Key point 6-07.07. Church board members may be personally liable if they participate in a decision to terminate an employee in a way that violates the employee’s legal rights.
According to the traditional rule, an employee hired for an indefinite term was considered terminable at the will of either the employer or the employee. No “cause” was necessary. In recent years, the courts generally have permitted discharged “at will” employees to sue their former employer on the basis of one or more legal theories, including:
- wrongful discharge in violation of public policy (e.g., employee terminated for filing a workmen’s compensation claim, or for reporting illegal employer activities);
- intentional infliction of emotional distress (e.g., discharge accompanied by extreme and outrageous conduct);
- fraud (e.g., employee accepts job in reliance on employer misrepresentations);
- defamation (e.g., malicious and false statements made by previous employer to prospective employers);
- breach of contract terms (e.g., employer made oral representations, or written representations contained in a contract of employment or employee handbook, that were not kept).
Directors may be personally liable to the extent that they participate in such activities. The subject of wrongful discharge of employees is addressed fully in chapter 8.