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Employment Liability and the Church: Myths and Misconceptions
By Laura J. Brown, Brotherhood Mutual
Lawsuits alleging wrongful employment practices are the fastest-growing area of civil litigation today. Unfortunately, many churches and related ministries are unaware of the legal risks they face as employers. “Hiring, disciplining, compensating, or terminating employees can expose your ministry to expensive litigation if the employment issue is not handled correctly,” says attorney Kathleen Turpin, vice president of human resources for Brotherhood Mutual Insurance Company.
Mistaken assumptions about employment law can also leave religious organizations vulnerable to employment-related lawsuits, says Turpin, an expert on employment law. Here are some of the common misconceptions that frequently lead to charges of wrongful employment practices:
"We are a religious organization and are protected by the First Amendment."
Unfortunately, there are only a limited number of employment situations in which an organization, operating as a religious institution, is protected by the First Amendment. Terminating clergy, discussing concerns within a board meeting, or requiring certain employees to be of a specific faith may be provided limited protection. However, even in these cases, you cannot count on the First Amendment to protect you from an employment action.
What you can do: Consult with local counsel before making employment decisions to determine whether you are complying with federal and state laws.
"Our employees are like one big family. Even if they were terminated, they would not sue us."
Discrimination lawsuits have increased exponentially in the past 20 years, and religious institutions are not immune. During the hiring process, most employers do not anticipate problems with the employee. Rather, issues tend to surface after the employment relationship begins. For example, what starts as a personality conflict or constructive criticism can escalate quickly into a situation involving a disgruntled employee.
What you can do: Conduct annual performance reviews, document all disciplinary actions, maintain accurate records, and avoid emotional confrontations.
"We only have a few employees, so the laws do not apply to our organization."
While many federal statutes (such as the Americans with Disabilities Act, Title VII of the Civil Rights Act, and the Family and Medical Leave Act) require a minimum number of employees before they apply, state statutes and case law generally do not include this requirement. In fact, many states have enacted legislation that broadens the scope and damages of their federal counterparts.
What you can do: Be aware of both the federal and state laws that affect your organization, regardless of the number of employees.
"We have a right to provide details to our staff/congregation concerning why an employee was terminated or disciplined."
Confidentiality relating to discipline or termination of an employee is extremely important. While many states provide some level of protection for statements made to a limited number of people with a "need to know," this protection can easily be forfeited or lost. The privilege may be overcome if the information provided is false or given to individuals who do not have a "need to know," or if the employer shares private information concerning an employee without the employee's prior permission.
What you can do: Provide factual information on a strict "need to know" basis. Do not offer opinions. In addition, never reveal information to individuals who are not members of your staff or congregation.
"As long as we were not aware that sexual harassment had taken place, we are not responsible."
Employers are, with a few narrow exceptions, responsible for the acts of their supervisory employees, regardless of whether the employer prohibited the conduct and regardless of whether the employer knew about it. Employers may also be liable for sexual harassment that occurs between fellow employees if the employer knew or should have known about the conduct, unless it can be shown that the employer took immediate and appropriate action.
What you can do: Implement a sexual harassment policy that provides for zero tolerance of sexual harassment and educate your staff as to what constitutes sexual harassment. Make sure that the sexual harassment policy and the complaint procedure have been communicated to all employees.
"We can terminate our employees for any reason as long as no written contract exists."
The "at will" employment doctrine says that: "absent a contract between an employer and employee, the employer may terminate an employee for any reason not prohibited by law." The problem with this general rule is that it has been dramatically modified in recent years. In many states, an employer may be bound by oral assurances made to an employee, employment handbook provision, or even an employer's conduct that led the employee to believe he or she would not be terminated, regardless of whether a written contract exits.
What you can do: Do not rely on an assumption of "at will" employment. Always consult a local attorney before firing an employee.
"If we have an employment handbook, we are protected from being sued."
An employment handbook is a great tool that can often be used to limit liability. Unfortunately, if the handbook has not been updated annually, has not been reviewed by an attorney, or is not followed, it may actually cause more damage than it prevents. Without appropriate disclaimers and limiting language, courts may find that your handbook constitutes an employment contract. In these situations, if procedures or policies have not been strictly followed, the organization could be held liable.
What you can do: Ensure that employment handbooks and policies are regularly reviewed by legal counsel.
"Our general liability insurance policy would cover us if an employment lawsuit was filed."
Most general liability insurance and personal injury policies specifically exclude claims arising out the employment relationship. In an effort to provide coverage for these issues, some insurance companies have begun offering employment practices liability coverage. Brotherhood Mutual is among them. The company also offers defense reimbursement coverage, which assists in defense costs if an employment lawsuit is filed. The average cost to defend an employment lawsuit is between $20,000 and $200,000, regardless of the legitimacy of the suit.
What you can do: Contact your insurance agent to request a quote for employment practices liability coverage or defense reimbursement coverage.
Want to learn more? Employment Practices for Ministries offers suggestions for dealing with sticky employment issues that can arise in ministry settings. If your ministry’s employment practices haven’t been reviewed by an attorney familiar with this area of law, now would be a good time for a review. Court rulings have shown that churches can’t consider themselves exempt from the standards that apply to other employers.
Laura J. Brown is a writer and communications specialist with Brotherhood Mutual Insurance Company.Brotherhood Mutual Insurance Company is one of the nation's leading insurers of churches and related ministries. It custom designs property and liability insurance to help ministries run safely and effectively. To discover free resources that can help protect your ministry, visit www.brotherhoodmutual.com.
