Priest Claimed Defamatory and False Statements Led to His Dismissal

Key point 8-10.01. The civil courts have consistently ruled that the First Amendment prevents the civil courts from applying employment laws to the relationship between a church and a minister.

A Pennsylvania court ruled that it was barred by the “ministerial exception” from resolving a priest’s claim that members of his church “interfered with” his employment contract by sharing negative information about him with diocesan officials for the purpose of having him permanently removed.

Background

A Catholic priest was appointed by contract by his diocese to be the priest and administrator for a church in Scranton, Pennsylvania. Prior to this assignment, the priest alleged that a lay employee (“Defendant 1”) and two lay members of the church (“Defendant 2” and “Defendant 3”) exerted influence over the parish’s finances.

After assuming his duties as a priest and administrator for the church, the priest claimed that, while looking through a file cabinet, he found hundreds of dollars in cash that was hidden and unaccounted for. Since the cabinet was under the control of Defendant 1, he confronted her, but she did not have a sufficient explanation.

The priest claimed the defendants had previously demonstrated dismay at decisions he made due to their lack of ability to exert control they once had in the parish.

He further claimed that the defendants made defamatory and false statements to members of the parish with the intention of causing the separation of the priest from his contractual agreement with the Diocese of Scranton.

Specifically, he stated that Defendant 1 made untrue complaints to the local police department alleging harassment, which were discovered to be unfounded by the department. He said Defendant 1 also made similar remarks about harassment to church members as well as individuals in the diocese, all for the purpose of causing separation of the priest from his contract with the diocese.

Defendant 2 allegedly made defamatory and false statements, both orally and in writing, to the local bishop with the intention of removing the priest. It was also asserted that Defendant 2 forwarded emails to the priest’s superiors stating that the priest had made “outright lies to his congregation” and “spends the Diocese’s money like a drunken sailor.”

Defendant 2 reportedly forwarded an additional email to the diocese claiming that the priest “spent an exorbitant amount of money on light fixtures, that were never as expensive as claimed and never even purchased.”

The priest claimed that Defendant 3 made defamatory and false statements, both orally and in writing, to the bishop with the intention of removing the priest from the church.

Applying the “rule of deference”

The priest sued the three defendants, claiming they interfered with his contractual relationship with the diocese, which resulted in the decision of the bishop to terminate his employment with the diocese.

The defendants argued that the Establishment and Free Exercise Clauses of the First Amendment to the United States Constitution prohibit judicial interference with the employment decisions of religious institutions. A trial court agreed with the defendants and dismissed the lawsuit.

The priest appealed, claiming that the trial court erred in concluding that the constitution prohibited judicial interference with his lawsuit. The priest claimed that the defendants’ campaign of defamatory and false statements caused monetary damages through the termination of his contract and in “keeping him from obtaining other similar positions in the . . . Diocese.”

The appeals court concluded that American courts have developed a “rule of deference” to religious tribunals in matters of doctrine and faith:

[W]henever the questions of discipline, or of faith, or ecclesiastical rule, custom, or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them, in their application to the case before them. Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94 (1952) (quoting Watson v. Jones, 80 U.S. 679 (1871)).

The appeals court noted that this “rule of deference” arose out of disputes over church property, but its application has expanded to other kinds of church disputes including those “involving the choice of church leadership.” The court elaborated this point by quoting a 1985 Supreme Court decision:

All disputes among members of a congregation, however, are not doctrinal disputes. Some are simply disputes as to the meaning of agreements on wills, trusts, contracts, and property ownership. These disputes are questions of civil law and are not predicated on any religious doctrine. While it is true that parties may agree to settle their disputes according to their own agreed fashion, the question of what they agreed to, or whether they agreed at all, are not doctrinal and can be solved without intruding into the sacred precincts.

The appeals court stated:

We must decide whether the same is true of [the priest’s] interference [with contract claim]—can we analyze the propriety of [the defendants’] communications without intruding into the sacred precincts?

Applying the ministerial exception

The appeals court then evaluated how the priest’s claims compared with a prior decision made by the Pennsylvania Supreme Court. In that specific case, the Pennsylvania Supreme Court noted:

[C]ases involving the choice of clerical leadership . . . is a special class of cases that involves the employment relationship between a religious institution and its ministerial employees in which the courts understandably are particularly reluctant to encroach on the institution’s decision-making process in selecting such employees. . . . This application of the deference rule has come to be known as the “ministerial exception” to a civil court’s ability to exercise jurisdiction over a matter related to the employment or retention of a cleric.

The appeals court then continued:

Under the “ministerial exception,” the Free Exercise Clause of the First Amendment of the United States Constitution prohibits courts from exercising . . . jurisdiction in cases where the court’s involvement would encroach on decisions made by religious institutions concerning employment of ministers. Rooted in the First Amendment’s guarantee of religious freedom, the ministerial exception precludes courts from considering claims involving the employment relationship between a religious institution and its ministerial employees, based on the institution’s constitutional right to be free from judicial interference in the selection of those employees.

The appeals court further noted:

The ministerial exception applies to persons whose “primary duties include teaching, spreading the faith, church governance, supervision of a religious order, or supervision of participation in religious ritual and worship.” . . . The question, then, is whether the [defendants’] statements are actionable regardless of [the priest’s] status as a minister.”

According to the priest:

[The defendants] were influential members of the parish community whose communications were made with the intention of prompting the bishop to terminate [the priest’s] employment and had the desired effect. He also notes that [the defendants] were not members of the church hierarchy, that their statements did not occur during a church meeting or in furtherance of an official church proceeding relating to [the priest’s] continued employment, and that the statements did not relate to [the priest’s] pastoral care. . . . “[T]he defamatory statements of lay persons against a priest are not religious controversies and, as such, should be dealt with through civil law.” . . . [The priest] claims [the defendants’] statements were made in retaliation to [the priest’s] discovery of possible malfeasance on [the defendants’] part; that he brought this action in response to [the defendants’] concerted campaign to discredit him; and that the association of [the parties] with the same religious organization is merely incidental to this lawsuit. . . . Thus, [the priest] argues that this case can and should be decided under neutral principles of law and that the trial court erred in dismissing his complaint pursuant to the ministerial exception.

The appeals court disagreed with the priest’s arguments.

It concluded that there was “no doubt” that the priest believed that the defendants’ communications to the bishop and various parishioners led to his “undeserved and unjust termination from his post as priest” of the church. The appellate court pointed to the United States Supreme Court’s unanimous 2012 ruling, in which the Court found the ministerial exception applies to cases involving the termination of a cleric—regardless of whether the termination was for a religious reason. Hosanna-Tabor Evangelical Lutheran Church and School v. E.E.O.C., 132 S.Ct. 694 (2012).

“Thus, the fact that [the defendants’] allegedly defamatory statements concern secular matters—[the priest’s] misuse of parish funds, dishonesty toward parishioners, and an alleged incident of harassment—does not avoid the applicability of the ministerial exception,” the appellate court said.

The appellate court concluded:

[The priest’s] complaint is very specific—he alleges that [the defendants] through their communications with the local bishop and others, sought and successfully procured [his] removal from ministry. Our holding is correspondingly narrow—[the priest’s] allegations are inextricably intertwined with his removal from ministry, and therefore the trial court properly [dismissed his lawsuit.]

What this means for churches

Consider the following points.

1. Liability for intentional interference

According to the legal principle of “interference with contract,” a former employer may be liable if it intentionally interferes with an existing employment relationship.

To illustrate, assume that Church A dismisses a lay employee (“Jill”) because of embezzlement, and Jill is later hired by Church B as its bookkeeper. The pastor of Church A discovers that Jill is now working for Church B and calls the pastor of Church B to warn him that Church B has hired an embezzler.

Based on this unsolicited communication, Jill is dismissed by Church B. She later sues Church A and its pastor for interference with contract. To prove interference with contract, Jill must demonstrate the existence of a contract (an employment relationship), and some intentional act by her former church or pastor that interfered with that contract. Consider the holding from the Alaska Supreme Court regarding interference with contract (see sidebar).

2. Interference requires malicious intent

Interference with contract requires malicious intent. The defendant must have willfully and intentionally engaged in conduct that interfered with another’s employment contract.

3. Interference during the preemployment stage

Some courts have extended the principle of interference with contract to the preemployment stage, referring to this as “interference with prospective contractual relations.”

This requires proof of the following elements: (1) a “reasonable probability” that the plaintiff would have entered into the prospective relationship or contract; (2) a wrongful act by the defendant that prevented the relationship from occurring; (3) the defendant did such act with a conscious desire to prevent the relationship from occurring, or knew that the interference was certain or substantially certain to occur as a result of the defendant’s conduct; and (4) the plaintiff suffered actual harm or damage as a result of the defendant’s interference.

4. The ministerial exception may bar rulings on interference-with-contract claims

Some courts, like the appellate court in this Legal Development, have ruled that the ministerial exception prevents them from resolving interference-with-contract claims involving clergy. Consider the outcome reached by a Louisiana court illustrating this point (see sidebar).

5. Seek legal counsel

Pastors should not interfere with a former employee’s employment relationship with another employer without first seeking legal counsel.

Tracy v. O’Bell, 268 A.3d 405 (Pa. App. 2021)