7 Ways to Protect Your Church: Hiring Firing and Living to Tell About it

In today’s culture, legal threats to churches seem to be mounting on every side as many localities seek to restrict access to prime real estate through zoning, opponents of religious liberty attempt to dismantle tax-exempt benefits for churches and clergy, and disputes about church property and other issues increasingly wind up in the courts.

According to ChurchLaw&Tax.com, the top five reasons churches wind up in court include:

1. Property Disputes

2. The Sexual Abuse of Minors

3. Personal Injuries

4. Insurance Coverage Disputes

5. Zoning Issues

In this changing legal landscape, how can you protect your church from harm and increase your chances of staying out of court? Here are seven ways to protect your church:

1. Leverage the Law in Your Favor

2. Strengthen Your Governing Documents: Is That in our Bylaws

3. Minimize Your Liability Through Effective Policies: Three Policies Every Church Needs

4. Develop Effective Employment Practices: Hiring, Firing, and Living to Tell About it

5. Maintain Insurance Specific to Your Needs

6. Clarify Property Issues Early

7. Protect Your Children, Students, and Volunteers

To read any of the previous blogs in this series (1-3), click on the hyperlinks above. This blog focuses on protecting your church through effective employment practices. Or, as I like to say, Hiring, Firing, and Living to Tell About It!

At Will Employment

In the United States, all states are formally recognized as at-will employment states, meaning that both employers and employees may terminate an employment relationship “at will.” This means that an employer may terminate an employee for any reason, except a violation of the employee’s civil rights. Some states also restrict at will employment based on public policy, implied contract, and good faith.

The key for most churches is to avoid entering into a contract relationship, rather than an at will relationship. Churches can inadvertently form contracts through the language included in offer letters, policy manuals, and annual salary updates. It is critical that the church make it clear to each employee through such communications that the employment is at will—both for the employer and the employee’s benefit. Otherwise, an employee may only be terminated based on the terms of the contract, and the employee may only resign based on the terms of the contract.

Religious Employer

The Supreme Court of the United States has a long history of protecting a church’s or religious employer’s right to make employment decisions based on religious beliefs. However, in the evolving legal landscape, it is more important than ever for a church to be clear regarding its statement of faith, moral teachings, and religious standards for employment—especially regarding non-ministerial employees. These statements should be placed in any employee manual and employees should be required to acknowledge that the church is a religious employer and bases its employment decisions, in part, on the employee’s adherence to the church’s religious beliefs and expectations.

Ministerial Exception

Hosanna-Tabor Evangelical Lutheran Church v. EEOC, a recent Supreme Court case, established a long-understood doctrine that the government may not interfere with a church’s selection of clergy based on the prohibitions of the First Amendment to the United States Constitution. This means that a church’s decision to terminate a pastoral employee is protected against government interference and courts may not inquire as to whether a minister was discriminated against by the church when terminated. As a result, many churches may be advised to make an honest review of what positions perform ministerial functions in the church and categorize them appropriately.

Separation Agreements

Often, churches and employees must separate. What is important for the church to remember is that the church likely has not paid into an unemployment plan because churches are exempt from federal and state unemployment requirements. As such, it is important for the church to consider severance packages when separating from an employee—whether a ministerial or non-ministerial. The advantage to the employee is that the church provides funds to bridge the employee to the next job opportunity, while the advantage to the church includes a release from any lawsuits, a non-disparagement clause, non-compete clause, confidentiality clause, and other benefits. The advantage to both the employee and employer is that the separation agreement can clearly articulate the reason for separation so both parties can sing from the same sheet of music when describing the separation.

Final Thoughts

To protect your church, consider adopting the following employment practices:

1. Utilize language in offer letters, employment manuals, and compensation updates that emphasize the at will nature of employment.

2. Be clear in all church employment documents that the church is a religious employer and employment is contingent on the employee’s adherence to the church’s statement of faith and moral teachings.

3. Adopt separation agreements when appropriate to assist employees in bridging the gap to a new job opportunity, while protecting the church’s interest.

To learn how Reynolds Law Group, PLLC can become a member of your team and help your church navigate employment issues and more check us out at reynoldslawgroup.com or call 757.219.2500 to set up a free strategy session today.