Churches and Lawsuits

Churches and Lawsuits

Church leaders often mistakenly believe the church has immunity from lawsuits. Although two important legal doctrines offer churches certain protections (the ministerial exception and ecclesiastical abstention) whenever it enters into a civil contract – for a construction project, new carpet or paint, rental of church property or employment of a pastor – the church abandons the two doctrines and falls squarely under civil laws that govern contracts, from which there is no protection on religious grounds.

Courts cannot intervene in matters involving purely doctrinal disputes that hinge on things like a church’s decision to terminate the pastor, or if a policy that permits rental of church facilities to members for weddings but prohibits rentals to the general public is discriminatory. If the church enters into an employment contract with its pastor or any other employee, however, and that contract makes specific promises, a breach of any or all of those promises can land the church in civil court as respondent in a lawsuit.

After it was sued in 2013 for several years’ worth of wages and benefits under a contract it entered into more than 10 years earlier with its then-part-time, bivocational pastor, a Baptist church in North Carolina was subsequently held liable in 2016. Among the promises made was church-paid disability insurance and continuation of the pastor’s salary until the disability insurance benefits started. After the now-full-time pastor developed kidney disease, had surgery and could no longer serve the church, his salary was discontinued. The pastor discovered that the church had lapsed his disability insurance policy several years earlier. With no insurance, he argued, the church was obliged to continue paying his wages indefinitely due to his disability.

The appeals court overturned a lower court, stating none of the church’s arguments supported dismissal of the case under either preemptive doctrine. Instead, the matter was purely one of “neutral” contract law, under which the church voluntarily accepted civil liability by entering into a contract of employment.

CSBC’s HR and church compliance office offers assistance in the areas of personnel matters, policies and procedures, bylaws, and issues involving the corporation and its exempt status.

Having well-crafted employment and general operating policies is an absolute must for churches in California, the most litigious state in the United States, with some of the most onerous wage and employment laws. Failure to properly protect the church from interference by the courts exposes it to liabilities it may not be prepared to address.

This Convention serves our culturally diverse congregations as we fulfill the Great Commandment and the Great Commission.