Employment Law for Ministries


Out-of-Court Resolution of Employment Disputes

Lawsuits are, of course, one way to resolve employment claims. Courtrooms provide a civilized platform for conflict resolution and deliver, ideally, unbiased justice.

The reality is that employment disputes are rarely resolved by court judgments. Legal claims are often settled soon after a complaint is filed in court, if not before, either through informal discussions or formal alternative dispute resolution.

This is as true of commercial enterprises as it is in the ministry world. But it bears note that ministry employers have an advantage in judicial disputes that secular employers do not—namely, a substantially reduced risk of an adverse litigation outcome. Credit for this risk mitigation goes to the ministerial exception, which we have discussed in several newsletters. So long as the employer is a religious organization and the worker in question is a “minister”—a term the law defines broadly—the ministerial exception substantially reduces the worker’s odds of getting very far in court.

Still, litigation is always unpredictable. It also has downsides even if a claim is dismissed early in the judicial process, including workplace angst, negative publicity, and costs associated with obtaining dismissal. Perhaps more importantly, the tenets of various religious groups counsel against resort to secular courts, and some institutions consider “going to the law” a doctrinal offense. Interestingly, in the Hosanna-Tabor case involving the ministerial exception, the church had fired the teacher because, in threatening to sue the Church, she “violated the Synod’s belief that Christians should resolve their disputes internally.”

All of these factors make out-of-court resolution of employment preferable to litigation. Yet, there are multiple forms of conflict resolution within ministry organizations, and a question that arises is the extent to which secular courts will respect a ministry's conflict resolution process in an employment dispute. We address that question in three scenarios.

Ecclesiastical courts: Some church denominations have hierarchical governance structures where disputes may be addressed by successively higher church bodies, culminating in a final decision. Other denominations have internal ecclesiastical courts or judicial commissions. Church court disputes can and do vary in significance, from a decision to defrock to an allegation that the music minister is a bully.

The Supreme Court has directed secular courts to defer to the decisions of church courts: "Civil courts shall not disturb the decisions of the highest ecclesiastical tribunal within a church of hierarchical polity, but must accept such decisions as binding on them, in their application to the religious issues of doctrine or polity before them.” In the context of an employment dispute, the Court has said that "it is the function of the church authorities to determine what the essential qualifications of a chaplain are and whether the candidate possesses them."

There is a possible exception to this rule of deference: when a court can resolve a dispute solely by applying "neutral principles" of law, without delving into doctrine. That area of the law currently is somewhat muddled. Some courts do not consider the neutral-principles exception if a dispute has already been decided by an ecclesiastical court. Other courts have not been clear about this exception, and in any event it most often arises in property disputes, rather than in employment disputes.

Third-party faith-based dispute resolution: Third-party organizations are available to resolve employment disputes using faith-based procedures and with reference to substantive religious law. Christian organizations, for example, may opt to resolve disputes via the Institute for Christian Conciliation (ICC), a project of Peacemaker Ministries. In Jewish communities, Beth Din tribunals facilitate formal resolution of commercial and other disputes, including disputes between employer and employee, applying Jewish law.

Courts will defer to the outcome of these types of faith-based third-party proceedings to the same extent they will defer to binding arbitration decisions. Generally speaking, federal law strongly promotes arbitration to resolve disputes, including labor and employment conflicts. Arbitration awards are binding except in rare cases, such as where the proceedings were tainted by fraud or the outcome is contrary to established public policy. To assure that their conclusions are regarded as final, third-party organizations that provide faith-based dispute resolution commonly adopt well-established, secular arbitration procedures that they know courts will respect. Of course, for a conciliation outcome to be binding, the parties to the dispute must have explicitly agreed to that resolution path, either before or after the conflict arises.

Internal dispute resolution: A church (particularly a congregational or non-denominational assembly) or other ministry employer may develop its own internal dispute resolution process. To be effective, this process should be formal. It should be written and identify key attributes such as the type of disputes covered, process, appeals, and decision-making authority. New hires should be made aware of the process and acknowledge and agree to it.

An internal resolution process should explicitly state whether the parties intend the outcome to be a recommendation or a binding conclusion. In general, mediation does not bind the parties to a particular outcome. The mediator will guide the parties, if possible, to an outcome acceptable to all, but the dispute is settled only if the parties agree to waive all relevant claims. If a settlement agreement is not signed, the dispute may still end up in court. Arbitration, in contrast, leads to a binding conclusion when the arbitrator, or a panel of arbitrators, renders an award. The losing party may have some opportunity to seek court review of the decision, but that is usually very limited.

As a general matter, the availability of an alternative religious dispute resolution process makes it easier for the courts to stay out of these internal ministry disputes, including where employment claims are asserted. As one commentator has put it: "Because courts cannot serve as the forum to decide such matters, religious institutions fill the void, ensuring that parties have avenues to seek redress of legal wrongs wrapped in religion."

If you would like assistance in developing or reviewing alternative dispute resolution options available to your ministry, or if you have any questions about the above information, please let us know.

This summary is provided as an informational tool. It is not intended to be and should not be considered legal advice, and receipt of this information does not establish an attorney-client relationship.