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Q&A: Employment Agreements

Are non-compete clauses for church staff legal?

Is it legal to add something to a pastoral staff hiring agreement stating that if a pastor or ministry staff person is dismissed or resigns, they agree not to accept employment in any church within a 30 mile radius of our church for three years after their termination date?

This type of agreement or language is often referred to as a "non-compete" agreement. Non-compete agreements are common in the business world, but can be used by not-for-profit religious institutions to limit certain key employees' options when he or she terminates. Whether a non-compete agreement will be upheld varies state by state, however, most will allow it as long as certain conditions are met.

In most cases, courts will look to whether the agreement was reasonable in scope, geography and term. Here are examples of language that likely would or would not be upheld:

Reasonable: Reverend Smith agrees not ...

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Posted:
  • January 23, 2009

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