In a Battle of Bylaws, Court’s Intervention with Pastor’s Firing Found Proper

Key point 2-04.02. Some courts are willing to resolve disputes over the termination of clergy if they can do so without any inquiry into religious doctrine.

A North Carolina appeals court ruled that a trial court did not err in determining it had jurisdiction over a church pastor’s counterclaim because it related to church bylaws and did not involve ecclesiastical matters protected under the First Amendment of the United States Constitution.

Background

A church was incorporated as a North Carolina nonprofit corporation in 1988. At the church’s time of incorporation, the elders acted as the board of directors for the church.

On March 31, 2016, the elders hired a senior pastor for the church. The pastor was employed on an “at-will” basis. The employment agreement letter signed by the pastor in March of 2016 set out his terms of employment, in pertinent part, as follows:

An “at-will” employment relationship has no specific duration. This means that an employee can resign their employment at any time, with or without reason or advance notice. The [C]hurch has the right to terminate employment at any time, with or without reason or advance notice as long as there is no violation of applicable state or federal law.

Disagreement over which set of bylaws apply

The church had two different sets of bylaws, and the parties disagreed regarding which set governed the church’s operations during the time relevant to this case. The church adopted a set of bylaws (the “first bylaws”) in January of 1997. In April of 2008, the church applied for a bank loan and incorporated another set of bylaws (the “second bylaws”) as part of its loan application.

Effective June 17, 2019, the elders unanimously decided to terminate the pastor’s employment at the church. Despite his termination, the pastor ignored the instructions of the church and continued to conduct religious activities at the church.

The church filed a lawsuit on September 17, 2019, seeking an injunction to prohibit the pastor from accessing the church. In response, the pastor filed an answer and counterclaim.

The pastor’s counterclaim requested the following:

(I) Declaratory judgment against the Church and the Elders, declaring that: (i) [the Pastor] is the “Bishop” and “Senior Pastor” of the Church; (ii) [the Pastor] was not an “at-will” employee of the Church; (iii) the Elders’ attempt to terminate [the Pastor’s] employment with the Church was unauthorized by the then-controlling Second Bylaws; and (iv) [the Pastor] is entitled to recover back-pay and benefits earned since his purported termination;

(II) Preliminary and permanent injunction allowing [the Pastor] to resume employment with the Church, earning full compensation and benefits;

(III) Money damages from the Elders for breach of fiduciary obligations owed to [the Pastor] and to the Church;

(IV) Money damages from the Elders for wrongful interference with [the Pastor’s] employment relationship with the Church;

(V) Rights (i) to inspect the Church’s financial records, (ii) to receive an accounting from the Elders and the Church of Church funds or assets the Elders misappropriated, and (iii) to impose a constructive trust upon the Elders’ assets in an amount equal to any Church funds or assets found to have been misappropriated; and

(VI) Money damages from the Elders for civil conspiracy to remove [the pastor] from employment with the Church and to seize complete control of the Church’s operations.

The court concluded that it had jurisdiction over the matters and claims asserted in the pastor’s counterclaim. The church and the elders appealed, arguing that the trial court erred in concluding that it had jurisdiction, since such a conclusion would force the court to interpret and resolve ecclesiastical questions to resolve the claims.

The appeals court concluded that the trial court properly determined that it had jurisdiction over the pastor’s claims. It acknowledged that “the First Amendment of the United States Constitution prohibits a civil court from becoming entangled in ecclesiastical matters,” and it defined an ecclesiastical matter as one which “concerns doctrine, creed, or form of worship of the church, or the adoption and enforcement within a religious association of needful laws and regulations for the government of membership.”

However, civil courts do not violate the First Amendment “merely by opening their doors to internal church disputes,” the court said (quoting Presbyterian Church in U.S. v. Mary Elizabeth Blue Hull Mem’l Presbyterian Church).

“‘The dispositive question,’” the appeals court continued (quoting Smith v. Privette, 128 N.C. App. 490 (1998)), “‘is whether resolution of the legal claim requires the court to interpret or weigh church doctrine. . . . If not, the First Amendment is not implicated and neutral principles of law are properly applied to adjudicate the claim.’”

The court concluded:

As [the pastor] asserts, “[t]his is an employment dispute.” The core tenet upon which all of [the Pastor’s] claims depend is the determination of which bylaws governed the Church at the relevant time. [The Pastor] was an employee of the Church and now raises disputes regarding the Church’s bylaws. His claims do not fall under the protections of ecclesiastical matters within the First Amendment.

Resolving [his] claims requires a two-part determination: First, which bylaws were the governing authority at the relevant time, and whether [the Pastor’s] termination was in accordance with the proper bylaws? Second, whether the Elders properly determined that [the Pastor] was unfit to serve as Senior Pastor of the Church?

The first determination may be made by applying neutral principles of law without engaging in ecclesiastical matters. . . . The trial court must first determine which set of bylaws controlled at the relevant time, based solely on contract and business law. The court will then be able to assess whether the Church’s procedure for firing [the Pastor] complied with the requirements of the controlling bylaws. The court may determine that the Church’s method of terminating [the Pastor] did not comply with the requirements of the controlling bylaws, making [his] termination void. In this instance, this dispute would be resolved without the necessity of answering the second question—whether [the pastor] was unfit to serve—and engaging with ecclesiastical matters.

If the court determines that the Church’s method of terminating [the Pastor] did comply with the requirements of the controlling bylaws, then our Courts would be required to assess whether the Church, through its Elders, properly determined that [the Pastor] was unfit to serve as Senior Pastor. That determination cannot be made applying only neutral principles of law. Answering this second question may require an impermissible engagement with ecclesiastical matters. . . .

The present case requires determining which bylaws were in effect, whether new bylaws had been adopted by the Church, whether the Elders had the authority to terminate [the Pastor] and whether the termination was done in accordance with the proper bylaws. “This inquiry can be made without resolving any ecclesiastical or doctrinal matters” [quoting Tubiolo v. Abundant Life Church, Inc., 605 S.E.2d 161, 163 (2004)] . . . [and therefore [o]ur courts have jurisdiction over each of these determinations.

What this means for churches

This decision deviates from the vast majority of court rulings refusing to resolve internal church disputes involving the fitness or tenure of a pastor. Most courts (including the trial court in this case) have concluded that the relationship between a church and its pastor inevitably implicates religious issues that are off limits to the courts.

Additionally, note that the pastor’s counterclaim requested declaratory judgment against the church and the elders because he claimed, in part, that he—as the church’s pastor—was not an “at-will” employee of church. To better understand various issues related to “at-will” employment—including exceptions to note—see the section titled “Termination“ in the Legal Library.

Nation Ford Baptist Church Inc. v. Davis, 866 S.E.2d 11 (N.C. App. 2021)