Department of Labor Opinion Letters
Key Point 8-08.04. The United States Department of Labor has issued several opinion letters addressing coverage of church employees under the Fair Labor Standards Act.
The United States Department of Labor has issued three "opinion letters" that directly address the application of the FLSA to church employees. These opinion letters are summarized below:
Opinion Letter FLSA2005-12NA (September 23, 2005)
A church employed a person in a full-time salaried position who also works a second job for the church as an hourly employee. It was the church's position that no employee of the church was engaged in interstate or commercial activities, and that the church did not receive financial support through any commercial ventures.
The Opinion Letter concluded that the church was not subject to "enterprise" coverage under the FLSA:
Enterprise coverage does not apply to a private, nonprofit enterprise where the eleemosynary, religious or educational activities of the nonprofit enterprise are not in substantial competition with other businesses, unless it is operated in conjunction with a hospital, a residential care facility, a school or a commercial enterprise operated for a business purpose. … It appears that the local church you represent satisfies none of these tests and, thus, is not covered on an enterprise basis. Further … enterprise coverage is not applicable to employees engaged exclusively in the operation of a church or synagogue since their activities are not performed for a business purpose within the meaning of FLSA.
The Opinion Letter noted that employees of enterprises not covered under the FLSA may still be individually covered by the FLSA "in any workweek in which they are engaged in interstate commerce, the production of goods for commerce or activities closely related and directly essential to the production of goods for commerce. Examples of such interstate commerce activities include making/receiving interstate telephone calls, shipping materials to another state and transporting persons or property to another state."
The Opinion Letter further clarified:
As a practical matter, the Wage and Hour Division will not assert that an employee who on isolated occasions spends an insubstantial amount of time performing individually covered work is individually covered by the FLSA. As stated in Field Operations Handbook 11a01, individual coverage will not be asserted for employees who occasionally devote insubstantial amounts of time to:
- Receiving/making interstate phone calls;
- Receiving/sending interstate mail or electronic communications;
- Making bookkeeping entries related to interstate commerce.
The church asked the Department of Labor how to calculate overtime for an employee simultaneously holding a salaried position and an hourly position. The duties of the employee's salaried position were food preparation, while the duties of the hourly position were janitorial. The work of both positions was conducted in the church building. The Opinion Letter concludes:
Employees of a church are individually covered under FLSA where they regularly and recurrently use the telephone, telegraph, or the mails for interstate communication or receive, prepare, or send written material across state lines. … Generally, custodians would not be covered under FLSA on an individual basis unless they regularly clean offices of the church where goods are regularly produced for shipment across state lines. A cook in a church would not be covered on an individual basis unless the employee is ordering, receiving or preparing goods that are moving or will move in interstate commerce. Therefore, because the employee in question does not engage in these interstate activities, the employee would not be individually subject to the FLSA. In light of all of the above information, it is our opinion that the church and the culinary and janitorial employees within it are not covered by the FLSA.
Key Point. This Opinion Letter specifically referenced the following two Opinion Letters dated November 4, 1983. and July 23, 1975. This demonstrates that the Department of Labor still considers these earlier Opinion Letters to be correct interpretations of the FLSA.
Opinion Letter, November 4, 1983
A synagogue asked the Department of Labor for an opinion regarding the application of the FLSA to custodians and a cook. The custodians' duties included setup work for meetings, keeping the premises cleaned and repaired, and cutting the grass and serving food for various functions. The synagogue also employed a cook who prepared food following certain religious services and activities. The other employees of the synagogue were a rabbi, secretary, and part-time religious school teachers.
The Department of Labor concluded that it was not presented with enough information to enable it to make a ruling on the application of the FLSA to the synagogue staff. However, it did provide the following information to assist the synagogue in reaching an informed decision:
FLSA applies to employees individually engaged in interstate commerce or in the production of goods for interstate commerce and to all employees in certain enterprises which are so engaged. Employees of a church or synagogue are individually covered under FLSA where they regularly and recurrently use the telephone, telegraph, or the mails for interstate communication or receive, prepare, or send written material across state lines. Individual coverage will not be asserted, however, for office and clerical employees of a church or synagogue who only occasionally or sporadically devote negligible amounts of time to writing interstate letters or otherwise handle interstate mail or make bookkeeping entries related to interstate transactions. Generally, custodians would not be covered under FLSA on an individual basis unless the employees regularly clean offices of the church or synagogue where goods are regularly produced for shipment across state lines. A cook in a church or synagogue would not be covered on an individual basis unless the employee is ordering, receiving or preparing goods that are moving or will move in interstate commerce.
Whether or not enterprise coverage applies to the operations of a nonprofit religious organization, such as a church or synagogue, depends on several factors. Generally, enterprise coverage is not applicable to employees engaged exclusively in the operation of a church or synagogue since their activities are not performed for a "business purpose" within the meaning of FLSA. However, where the nonprofit religious organization employs employees in connection with the operation of the type of institutions described in sections 3(r) and 3(s) of the FLSA [pertaining to hospitals, elementary and secondary schools, preschools, residential care institutions, and institutions of higher education, all of which are presumed to be "enterprises" whose employees are all covered by FLSA regardless of annual gross income] they will be covered on an enterprise basis, since such activities have, by statute, been declared to be performed for a business purpose.
Additionally, activities of a religious organization may be performed for a "business purpose" where, for example, they engaged in ordinary commercial activities, such as operating a printing and publishing plant. In such cases, employees employed in these business activities may be individually covered under FLSA if they are engaged in commerce or the production of goods for commerce, or on an enterprise basis … if the business has employees engaged in commerce or in the production of goods for commerce or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person, and the enterprise has an annual dollar volume of sales made or business done of not less than [$500,000] exclusive of excise taxes at the retail level which are separately stated. Contributions, pledges, donations, and other funds raised through activities such as raffles and games that are in furtherance of the educational, eleemosynary and religious activities of a nonprofit organization are not included in computing the annual dollar volume of business done of the enterprise.
Individuals who volunteer their services, usually on a part-time basis, to a church or synagogue not as employees or in contemplation of pay are not considered to be employees within the meaning of FLSA. For example, persons who volunteer their services as lectors, cantors, ushers or choir members would not be considered employees. Likewise, persons who volunteer to answer telephones, serve as doorkeepers, or perform general clerical or administrative functions would not be employees. However, in situations where the understanding is that the person will work for wages there will be an employment relationship. On the other hand, a bookkeeper could not be treated as an unpaid volunteer bookkeeper for the employing institution in the same workweek in which he or she is also an employee.
Persons such as priests, ministers, monks, nuns, lay brothers, deacons and other members of religious orders or communities who serve pursuant to their religious obligations in the schools, hospitals, and other institutions operated by their church or religious order or community shall not be considered to be "employees."
This Department of Labor Opinion Letter contains a number of important clarifications. Consider the following:
- Individual coverage. Church employees are individually covered under FLSA, even if their employing church is not an "enterprise," if they "regularly and recurrently use the telephone, telegraph, or the mails for interstate communication or receive, prepare, or send written material across state lines."
- Occasional or sporadic tasks. Individual coverage will not be asserted "for office and clerical employees of a church who only occasionally or sporadically devote negligible amounts of time to writing interstate letters or otherwise handle interstate mail or make bookkeeping entries related to interstate transactions."
- Custodians. Church custodians are not covered under FLSA on an individual basis unless they "regularly clean offices of the church where goods are regularly produced for shipment across state lines."
- Cooks. A cook employed by a church is not covered on an individual basis unless he or she is "ordering, receiving or preparing goods that are moving or will move in interstate commerce."
- Enterprise coverage. The FLSA defines an enterprise as "the related activities performed … by any person or persons for a common business purpose." The United States Supreme Court has noted that this definition excludes most religious and charitable organizations to the extent that they are not operating for profit and are not pursuing a "business purpose." However, some religious organizations will satisfy the definition of an enterprise if they have annual sales revenue of $500,000 or more. The Opinion Letter cites a printing plant as one example. However, contributions, pledges, donations, and other funds raised through activities such as raffles and games that are in furtherance of a church's exempt purposes are not included in computing the annual dollar volume of business done by the enterprise.
- Church-operated hospitals and schools. The FLSA specifies that hospitals, elementary and secondary schools, preschools, residential care institutions, and institutions of higher education are presumed to be "enterprises" whose employees are all covered by FLSA regardless of annual gross income, since such employment is specifically designated by the FLSA as being for a business purpose. However, persons such as priests, ministers, monks, nuns, lay brothers, deacons and other members of religious orders or communities who serve pursuant to their religious obligations in the schools, hospitals, and other institutions operated by their church or religious order or community shall not be considered to be "employees."
- Volunteers. Individuals who volunteer their services, usually on a part-time basis, to a church "not as employees or in contemplation of pay are not considered to be employees within the meaning of FLSA." For example, persons who volunteer their services as lectors, cantors, ushers or choir members would not be considered employees. Likewise, persons who volunteer to answer telephones, serve as doorkeepers, or perform general clerical or administrative functions would not be employees. However, in situations where the understanding is that the person will work for wages there will be an employment relationship.
- Can employees be treated as volunteers? The Opinion Letter concludes that "a bookkeeper could not be treated as an unpaid volunteer bookkeeper for the employing institution in the same work week in which he or she is also an employee."
Opinion Letter, July 23, 1975
This Opinion Letter addressed the question of "the application of the provisions of the Fair Labor Standards Act to a secretary employed by a local church." The Opinion Letter concludes:
This Act applies to employees individually engaged in or producing goods for interstate commerce and to employees of certain enterprises so engaged.
Church employees would be individually covered under the Act where they regularly and recurrently use the telephone, telegraph or mails for interstate communications or receive, prepare or send material across state lines. We would not, however, assert individual coverage for office or clerical employees of a church, such as the secretary, who only occasionally or sporadically devote negligible amounts of time to such interstate transactions. Additionally, coverage would not be applicable to church employees, such as a janitor, engaged exclusively in the operation of the church since their activities are not performed for a business purpose.
Table of Contents
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1Definitions and Status
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§ 1.01Distinctions Between the Terms Pastor, Clergy, Minister
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§ 1.02Definition of the Terms Pastor, Clergy, Minister — In General
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§ 1.03Status—Employee or Self Employed
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§ 1.03.01Social Security
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§ 1.03.02Income Taxes
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§ 1.03.03Retirement Plans
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§ 1.03.04Legal Liability
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§ 1.03.05Miscellaneous Federal and State Statutes
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§ 1.04Status—Ordained, Commissioned, or Licensed
2The Pastor-Church Relationship
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§ 2.01Initiating the Relationship—In General
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§ 2.01.01Congregational Churches
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§ 2.01.02Hierarchical Churches
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§ 2.01.03Compliance with a Church's Governing Instrument in the Selection of a Minister
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§ 2.01.04Civil Court Review of Clergy Selection Disputes—the General Rule of Non-Intervention
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§ 2.01.05Civil Court Review of Clergy Selection Disputes—Limited Exceptions to the General Rule
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§ 2.01.06Negligent Selection
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§ 2.02The Contract
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§ 2.03Compensation
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§ 2.04Termination
3Authority, Rights, and Privileges
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§ 3.01General Scope of a Minister's Authority
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§ 3.02Officer of the Church Corporation
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§ 3.03Property Matters
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§ 3.04Performance of Marriage Ceremonies
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§ 3.05Exemption from Military Duty
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§ 3.06Exemption From Jury Duty
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§ 3.07The Clergy-Penitent Privilege—In General
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§ 3.07.01A "Communication"
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§ 3.07.02Made in Confidence
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§ 3.07.03To a Minister
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§ 3.07.04Acting in a Professional Capacity as a Spiritual Adviser
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§ 3.07.05In the Course of Discipline
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§ 3.08The Clergy-Penitent Privilege—Miscellaneous Issues
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§ 3.08.01Clergy-Parishioner Relationship
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§ 3.08.02Marriage Counseling
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§ 3.08.03Who May Assert the Privilege
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§ 3.08.04When to Assert the Privilege
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§ 3.08.05Waiver of the Privilege
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§ 3.08.06The Privilege in Federal Courts
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§ 3.08.07Constitutionality of the Privilege
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§ 3.08.08Child Abuse Reporting
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§ 3.08.09Confidentiality
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§ 3.08.10Disclosure to Civil Authorities
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§ 3.08.11Church Records
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§ 3.08.12Death of the Counselee
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§ 3.09Visiting Privileges at Penal Institutions
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§ 3.10Immigration of Alien Ministers, Religious Vocations, and Religious Occupations
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§ 3.11Miscellaneous Benefits
4Liabilities, Limitations, and Restrictions
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§ 4.01Negligence
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§ 4.02Defamation—In General
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§ 4.02.01Pastors Who Are Sued for Making Defamatory Statements
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§ 4.02.02Pastors Who Are Victims of Defamation
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§ 4.02.03Defenses
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§ 4.03Undue Influence
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§ 4.04Invasion of Privacy
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§ 4.05Clergy Malpractice
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§ 4.06Contract Liability
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§ 4.07Securities Law Violations
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§ 4.08Failure to Report Child Abuse
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§ 4.09Diversion of Church Funds
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§ 4.10State Regulation of Psychologists and Counselors
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§ 4.11Sexual Misconduct
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§ 4.11.01Theories of Liability
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§ 4.11.02Defenses to Liability
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5Definitions
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§ 5.01Tax Legislation—Federal
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§ 5.01.01Churches
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§ 5.01.02Mail Order Churches
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§ 5.01.03Other Religious Organizations
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§ 5.01.04Tax Legislation—State
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§ 5.02Zoning Law
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§ 5.02.01Churches
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§ 5.02.02Accessory Uses
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6Organization and Administration
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§ 6.01Unincorporated Associations
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§ 6.01.01Characteristics
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§ 6.01.02Personal Liability of Members
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§ 6.01.03Creation and Administration
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§ 6.02Corporations
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§ 6.02.01The Incorporation Process
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§ 6.02.02Charters, Constitutions, Bylaws, and Resolutions
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§ 6.03Church Records
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§ 6.03.01Inspection
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§ 6.03.02“Accountings” of Church Funds
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§ 6.03.03Public Inspection of Tax-Exemption Applications
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§ 6.03.04Government Inspection of Donor and Membership Lists
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§ 6.03.05The Church Audit Procedures Act
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§ 6.03.06Who Owns a Church’s Accounting Records?
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§ 6.04Reporting Requirements
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§ 6.04.01State Law
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§ 6.04.02Federal Law
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§ 6.05Church Names
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§ 6.06Officers, Directors, and Trustees—In General
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§ 6.06.01Election or Appointment
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§ 6.06.02Authority
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§ 6.06.03Meetings
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§ 6.06.04Removal
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§ 6.07Officers, Directors, and Trustees—Personal Liability
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§ 6.07.01Tort Liability
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§ 6.07.02Contract Liability
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§ 6.07.03Breach of the Fiduciary Duty of Care
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§ 6.07.04Breach of the Fiduciary Duty of Loyalty
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§ 6.07.05Violation of Trust Terms
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§ 6.07.06Securities Law
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§ 6.07.07Wrongful Discharge of an Employee
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§ 6.07.08Willful Failure to Withhold Taxes
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§ 6.07.09Exceeding the Authority of the Board
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§ 6.07.10Loans to Directors
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§ 6.08Immunity Statutes
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§ 6.08.01Directors and Officers Insurance
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§ 6.09Members—In General
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§ 6.09.01Selection and Qualifications
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§ 6.09.02Authority
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§ 6.10Members—Discipline and Dismissal
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§ 6.10.01Judicial Nonintervention
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§ 6.10.02“Marginal” Civil Court Review
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§ 6.10.03Preconditions to Civil Court Review
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§ 6.10.04Remedies for Improper Discipline or Dismissal
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§ 6.11Members—Personal Liability
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§ 6.12Meetings of Members
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§ 6.12.01Procedural Requirements
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§ 6.12.02Minutes
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§ 6.12.03Parliamentary Procedure
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§ 6.12.04Effect of Procedural Irregularities
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§ 6.12.05Judicial Supervision of Church Elections
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§ 6.12.06Who May Attend
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§ 6.13Powers of a Local Church
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§ 6.14Merger and Consolidation
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§ 6.15Dissolution
7Church Property
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§ 7.01Church Property Disputes—In General
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§ 7.02Church Property Disputes—Supreme Court Rulings
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§ 7.03State and Lower Federal Court Rulings
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§ 7.04Church Property Disputes—Dispute Resolution Procedures
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§ 7.05Transferring Church Property
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§ 7.06Zoning Law
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§ 7.07Restricting Certain Activities Near Church Property
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§ 7.08Building Codes
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§ 7.08.01Lead Paint on Church Property
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§ 7.09Nuisance
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§ 7.10Landmarking
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§ 7.11Eminent Domain
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§ 7.12Defacing Church Property
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§ 7.13Restrictive Covenants
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§ 7.14Reversion of Church Property to the Prior Owner
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§ 7.15Materialmen’s Liens
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§ 7.16Religious Discrimination in the Sale or Rental of Church Property
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§ 7.17Removing Disruptive Individuals
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§ 7.18Adverse Possession
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§ 7.19Accounting for Depreciation
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§ 7.20Premises Liability
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§ 7.20.01Liability Based on Status as Invitee, Licensee, or Trespasser
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§ 7.20.02Defenses to Premises Liability
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§ 7.20.03Use of Church Property by Outside Groups
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§ 7.20.04Assaults on Church Property
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§ 7.20.05Skate Ramps
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§ 7.20.06Sound Rooms
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§ 7.21Embezzlement
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§ 7.22Places of Public Accommodation
8Employment Law
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§ 8.01Introduction: Selection of Employees
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§ 8.02New Hire Reporting
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§ 8.03Employment Eligibility Verification
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§ 8.04Immigration
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§ 8.05Negligent Selection
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§ 8.06Introduction: Compensation and Benefits
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§ 8.07Workers Compensation
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§ 8.08Fair Labor Standards Act
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§ 8.08.01Enterprises
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§ 8.08.02Individual Coverage
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§ 8.08.03Federal Court Rulings
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§ 8.08.04Department of Labor Opinion Letters
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§ 8.08.05Exemptions
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§ 8.08.06Ministers
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§ 8.08.07State Laws
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§ 8.08.08Case Studies
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§ 8.09Introduction to Federal Employment and Civil Rights Laws—The “Commerce” Requirement
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§ 8.09.01Counting Employees
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§ 8.10The “Ministerial Exception” under State and Federal Employment Laws
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§ 8.11Procedure for Establishing a Discrimination Claim
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§ 8.12Title VII of the Civil Rights Act of 1964
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§ 8.12.01Application to Religious Organizations
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§ 8.12.02Application to Religious Educational Institutions
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§ 8.12.03Religion as a "Bona Fide Occupational Qualification"
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§ 8.12.04Discrimination Based on Religion or Morals
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§ 8.12.05Sexual Harassment
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§ 8.12.06The Catholic Bishop Case
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§ 8.12.07Failure to Accommodate Employees’ Religious Practices
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§ 8.12.08The Religious Freedom Restoration Act
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§ 8.12.09The Civil Rights Act of 1991
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§ 8.13The Age Discrimination in Employment Act
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§ 8.14The Americans with Disabilities Act
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§ 8.14.01Discrimination in Employment
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§ 8.14.02Discrimination in Public Accommodations
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§ 8.15Family and Medical Leave Act
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§ 8.16Employer “Retaliation” Against Victims of Discrimination
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§ 8.17Discrimination Based on Military Status
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§ 8.18Employee Polygraph Protection Act
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§ 8.19Occupational Safety and Health Act
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§ 8.20Display of Posters
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§ 8.21Discrimination under State Laws
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§ 8.22Termination of Employees
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§ 8.22.01Severance Agreements
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§ 8.23National Labor Relations Act
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§ 8.24Reference Letters
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§ 8.25Employee Evaluations
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§ 8.26Employment Interviews
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§ 8.27Arbitration
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§ 8.28Employee Handbooks
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§ 8.29Employee Privacy
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§ 8.30Insurance
9Government Regulation of Churches
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§ 9.01Introduction
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§ 9.02Regulation of Charitable Solicitations
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§ 9.03Limitations on Charitable Giving
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§ 9.04Federal and State Securities Law
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§ 9.05Copyright Law
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§ 9.05.01Copyright Ownership
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§ 9.05.02Works Made for Hire
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§ 9.05.03Exclusive Rights
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§ 9.05.04Infringement
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§ 9.05.05The "Religious Service" Exemption to Copyright Infringement
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§ 9.05.06Electronic Media
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§ 9.05.10Other Exceptions to Copyright Infringement
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§ 9.06Government Investigations
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§ 9.07Judicial Resolution of Church Disputes
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§ 9.08Political Activities by Churches and Other Religious Organizations
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§ 9.09Bankruptcy Law
10Church Legal Liability
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§ 10.01Negligence as a Basis for Liability—In General
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§ 10.02Vicarious Liability (Respondeat Superior)
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§ 10.02.01The Requirement of Employee Status
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§ 10.02.02Negligent Conduct
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§ 10.02.03Course of Employment
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§ 10.02.04Inapplicability to Nonprofit Organizations
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§ 10.03Negligent Selection of Church Workers—In General
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§ 10.04Negligent Selection of Church Workers—Sexual Misconduct Cases Involving Minor Victims
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§ 10.05Negligent Selection of Church Workers—Sexual Misconduct Cases Involving Adult Victims
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§ 10.05.01Court Decisions Recognizing Negligent Selection Claims
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§ 10.05.02Court Decisions Rejecting Negligent Selection Claims
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§ 10.05.03Risk Management
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§ 10.06Negligent Selection of Church Workers—Other Cases
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§ 10.07Negligent Retention of Church Workers—In General
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§ 10.07.01Court Decisions Recognizing Negligent Retention Claims
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§ 10.07.02Court Decisions Rejecting Negligent Retention Claims
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§ 10.07.03Risk Management
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§ 10.08Negligent Supervision of Church Workers—In General
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§ 10.09Negligent Supervision of Church Workers—Sexual Misconduct Cases Involving Minor Victims
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§ 10.09.01Court Decisions Recognizing Negligent Supervision Claims
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§ 10.09.02Court Decisions Rejecting Negligent Supervision Claims
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§ 10.09.03Risk Management
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§ 10.10Negligent Supervision of Church Workers—Sexual Misconduct Cases Involving Adult Victims
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§ 10.10.01Court Decisions Recognizing Negligent Supervision Claims
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§ 10.10.02Court Decisions Rejecting Negligent Supervision Claims
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§ 10.10.03Risk Management
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§ 10.11Negligent Supervision of Church Workers—Other Cases
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§ 10.11.01Risk Management
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§ 10.12Counseling—In General
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§ 10.12.01Risk Management
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§ 10.13Breach of a Fiduciary Duty
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§ 10.13.01Court Decisions Recognizing Fiduciary Duty Claims
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§ 10.13.02Court Decisions Rejecting Fiduciary Duty Claims
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§ 10.13.03Risk Management
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§ 10.14Ratification
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§ 10.15Defamation
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§ 10.16Defenses to Liability
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§ 10.16.01Contributory and Comparative Negligence
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§ 10.16.02Assumption of Risk
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§ 10.16.03Intervening Cause
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§ 10.16.04Statutes of Limitations
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§ 10.16.05Charitable Immunity
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§ 10.16.06Release Forms
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§ 10.16.07Insurance
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§ 10.16.08Other Defenses
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§ 10.17Damages—In General
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§ 10.17.01Punitive Damages
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§ 10.17.02Duplicate Verdicts
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§ 10.18Denominational Liability—In General
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§ 10.18.01Court Decisions Recognizing Vicarious Liability
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§ 10.18.02Court Decisions Rejecting Vicarious Liability
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§ 10.18.03Defenses to Liability
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§ 10.18.04Risk Management
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§ 10.18.05The Legal Effect of a Group Exemption Ruling
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§ 10.19Risks Associated with Cell Phones
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§ 10.20Risks Associated with the Use of 15-Passenger Vans
12The Present Meaning of the First Amendment Religion Clauses
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§ 12.01The Establishment Clause
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§ 12.01.01The Lemon Test
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§ 12.02The Free Exercise Clause
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§ 12.02.01The Smith Case
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§ 12.02.02The Religious Freedom Restoration Act
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§ 12.02.03The City of Boerne Case
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§ 12.02.04Conclusions
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13Significant First Amendment Issues
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§ 13.01The Right to Witness
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§ 13.02Prayer on Public Property other than Schools
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§ 13.03Prayer During Public School Activities
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§ 13.04Display of Religious Symbols on Public Property
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§ 13.05Recurring Use of Public Property by Religious Congregations for Religious Services
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§ 13.06Nonrecurring Use of Public Property by Adults for Religious Events and Activities
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§ 13.07Use of Public School Property by Students for Religious Purposes
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§ 13.08Sunday Closing Laws
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§ 13.09The Right to Refuse Medical Treatment
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§ 13.10Definition of "Religion" and "Religious"
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