In Hosanna-Tabor Evangelical Lutheran Church & School v. Equal Opportunity Employment Commission, 132 S. Ct. 694, 181 L. Ed. 2d 650, 114 FEP Cases 129, 25 AD Cases 1057 (2012), the Court addressed the claims of Cheryl Perich (“Perich”), a teacher at the Hosanna-Tabor Evangelical Lutheran Church and School (the “Church”), which is a member of the Lutheran Church.  Perich claimed that the Church terminated her because of her disability–narcolepsy–in violation of the Americans with Disabilities Act, as well as in retaliation for her threat to pursue a disability discrimination claim.  The Church argued that Perich lost her job because she violated its religious doctrine by failing to resolve her problems with the school using its internal procedures as opposed to bringing litigation.

In a landmark decision, the Supreme Court held that a church’s decisions regarding the firing of religious employees are protected from the regulation of anti-discrimination laws by the First Amendment’s guarantee of freedom of religion. The decision did not reach the question of exactly which church employees qualify for the “ministerial exception.” Perich was a teacher in a church school—she taught religious and well as secular subjects–and the court held that the ministerial exception applied to her termination. Yet there are numerous other workers at churches, synagogues, and other religious institutions who likely would not qualify for the ministerial exception.

Larry Crain, a faculty member of the Church Law Institute, discussed the case recently in The Tennessean. Mr. Crain heralded the decision as a signal that all religious groups are free to choose leaders with reference to their beliefs and doctrines, rather than being constrained by federal anti-discrimination laws. Other commentators expressed concerns that the decision meant that clergy could be fired for discriminatory reasons without recourse.

Regardless of where you come down on this issue, the decision is an important one for churches and other religious organizations to understand. While the decision did not spell out which employees are affected by the ministerial exception and which ones aren’t, organizations can probably safely look to Justice Alito’s separate opinion for guidance. Justice Alito argued that the exception should be tailored to an employee “who leads a religious organization, conducts worship services or important religious ceremonies or rituals or serves as a messenger or teacher of its faith.” While this language is not an official “test” set out in the opinion, it would be sensible to use it as a guide in making employment decisions about employees that may otherwise be in a protected class. The closer the employee is to meeting this description, the more likely a court would be to find that the employee’s termination is protected by the ministerial exception

By: Paige Waldrop Mills

Churches are filled with creative people that are…well….creating. Ministers are writing sermons and books, music leaders are writing beautiful choruses, graphics people and web designers are illustrating messages and the website with fantastic and sophisticated creations. These items that are created as the church fulfills its great commission are works of intellectual property. Creative works like the ones described above are subject to copyright law. Who owns this intellectual property? The Church or the individual that created it?

The answers to these questions can be found in federal copyright law (with a little tax thrown in for good measure). Why does it matter?  It matters because IP created by church employees can be extremely valuable. In the bankruptcy case involving the Crystal Cathedral and Rev. Robert Schuller, Rev. Schuller has held up the disposition of the bankruptcy by claiming that the estate owes him millions of dollars for his books and sermons, intellectual property that he says rightfully belongs to him instead of the church. Rev. Schuller claims that the church exceed the rights he granted to it in the IP and its current use of the IP amounts to copyright infringement. According to Dr. Schuller, he assigned his interest to the church for free but only on the condition that the church would use it to secure his retirement benefits. Because the bankruptcy filing puts his retirement benefits in jeopardy, he wants those copyrights (or the value of the copyrights) returned to him. He’s seeking immediate payments in excess of $5 million dollars, the return of the IP, and unspecified damages. While the Crystal Cathedral Bankruptcy raises issues that are beyond the scope of this blog post, it does underscore how valuable the ownership of copyrights can be and why it is important for churches to recognize and address these issues on the front end.

The ownership rules are pretty straightforward. Generally, if an employee creates intellectual property on the job, it belongs to the employer under the “work made for hire” doctrine. After all, the employer was paying the employee’s salary, providing him or her with a place to work, a computer, access to research, etc. However, in the absence of a specific policy on this point or a requirement that the employee agree that all IP created on the job belongs to the employer, these issues can get murky very quickly. What if the worker is characterized as an independent contractor and not an employee?  For the purpose of this type of analysis, courts tend to be liberal in finding independent contractors to be “employees.” Also, in today’s modern workplace, employees work at home, at all hours of the night, at Starbucks, on their iphones, using the internet for research. How do we know when things were created by an “employee” “at work” any more?

To avoid ambiguity and misunderstandings, the safest course is to have a written policy, acknowledged by the worker, that  IP created in the course of the individual fulfilling his or her job functions belongs to the church. This simple agreement on the front end can save many thousands of dollars of litigation down the road once the parties are fighting over IP that turns out to be extremely valuable, ala The Purpose Driven Church. If the employee wants to create content “off the clock,” it should be done somewhere other than the workplace, on a computer that was not supplied by the employer. If the employee–a minister for example– wants to use content created outside his job responsibilities in his sermons, he should only do so with an express acknowledgement by the church that the content is owned by the employee and is an exception to the work made for hire doctrine.

But what if the church wants to give that content or IP that should otherwise belong to the church to the minister? After all, ministers work hard for what is sometimes very little compensation. Shouldn’t he or she be able to supplement a minister’s salary with royalties from content he or she created on the job? The answer to this question is “probably not.” Because churches are not-for-profit corporations, they are subject to strict rules on the handling of their financial affairs. Giving valuable IP to the creating employee might seem “kind,” it could be viewed by the IRS as allowing “inurement,” or improperly funneling assets of the church to a particular individual. If the IRS deemed a gift of the IP to be an “inurement,” it could jeopardize the church’s tax exempt status or even result in tax liabilities or penalties for the minister or church board members. While I am not aware of a church ever losing its tax-exempt status for this reason, it is certainly a possible argument and risk, which the church should take seriously. It is advisable that a church have a competent attorney review its policies, procedures, and agreements related to its intellectual property to minimize the risk and exposure related to this sort of transaction. It is critical that the church’s creativity be used for the kingdom, not as a stumbling block that could lead to confusion and litigation later.

On March 27, 2012, I attended the oral argument at the United States Supreme Court on the constitutionality of the mandate provision in the Affordable Care Act that would require virtually all U.S. citizens to purchase a health care policy.  As a long time student of the constitution, it was intellectually riveting to see the rapid fire questions from the justices and the reaction of skilled advocates on both sides of this issue as they tried to use the force of logic to dislodge a justice from his or her seeming unswerving position.

Outside the courthouse the battle lines were equally divided as demonstrators gathered from all over the country to either decry the unconstitutionality of the Act, or urge the Court to preserve the Act.  It was in many respects like watching history unfold.  Regardless of one’s stand on the Act, one thing was clear – - this would be a watershed decision.  The consequences of this ruling transcends healthcare as much as the Court’s 7-2 decision a century and a half earlier in Dred Scott transcended slavery.

Our country likewise seems transfixed and divided over the question of whether this Congressional exercise of power exceeds the sovereign domain of the states. No fewer than twenty-six states sued to challenge the Act asserting, among other things, an intrusion on their rights under the 10^th  and 11^th  Amendments which reserve to the states and to the people all rights not specifically enumerated in the constitution to the federal government.

If the Court affirms the Affordable Care Act, virtually all Americans, as well as every institution in our society will be impacted in some way.  Among the most cherished of these is the church.  Surprisingly, this important aspect of the law was never addressed during oral argument, but the impact on religious organizations is no less significant and portends of future constitutional challenges if the Court upholds the Act.

Like many sweeping Congressional reforms, this Act empowers the Department of Health and Human Services to promulgate rules to implement its provisions.  One such provision known as “The Interim Rule”, mandates that all health insurance plans cover prescription contraceptives, sterilization, and related patient education and counseling. To some religious employers, like the Catholic Church and many conservative Protestant evangelical groups, this imposes an insupportable and undue burden on their sincerely held religious beliefs.

To these churches, their longstanding moral opposition to artificial contraception and sterilization is not something that can be carved out from the institution’s overall mission.  As one writer has described it:

. . . [T]he Church’s position on birth control is not a stand-alone item. From the Church’s standpoint, its position on birth control is part and parcel of its commitment to the sanctity of life . . . This need to defend the right to life from beginning to end manifests itself in a cohesive body of beliefs that starts with contraception and runs through abortion, the death penalty, and assisted suicide. Thus, an attack on any part of that core set of beliefs strikes at the heart of what the Church deems sacred.

Susan J. Stabile, State Attempts to Define Religion: The Ramifications of Applying Mandatory Prescription Contraceptive Coverage Statutes to Religious Employers, 28 Harvard J. L. & Pub. Pol’y 741 (2005).

While a decision is not expected from the Court until June of this year, the impact of the HHS Interim Rule is already taking its toll as some religious institutions are already preparing for the fines that will be imposed if the Act is sustained.

By: Paige Waldrop Mills

The entire country has been talking about the Trayvon Martin Case. I am starting to see numerous instances of churches joining the conversation. This case has been heart-breaking on so many levels, no matter your position on the social issues that are implicated. Whether you believe Zimmerman  acted in self-defense or created a situation where someone’s beloved son was killed while minding his own business, carrying a Snapple and some Skittles, there is no question that many lives have been destroyed, careers ruined, and, most tragic by far, a child with a promising future is dead.  It is not for me to decide what happened in this case because I wasn’t there and I don’t know. I have friends with different views on Zimmerman’s actions and motives, but all I can think about is Trayvon’s parents, and the parents of other young African-American boys or men, who live in  fear that the same thing could happen to their child. I have no answers and nothing but my heart-felt sympathies to offer to these families.

I have been following this case and the steadily rising outcry coming from all corners of the map, from men and women of all ages, colors, faiths, and political stripes. Like all the big stories of the last few years, social media is playing a prominent role. Social media remains the most effective medium by which passionate people can spread the word about the things they care about–reaching like-minded folks and gaining enough critical mass to get noticed and make a difference. It reminds me of one of my favorite children’s book, “Horton Hears a Who,” in which the heartless Kangaroo and the Wickersham Brothers are going to annihilate Who-ville unless sweet Horton can convince them that he is not crazy and there really are little people living on that grain of dust.  Horton tries to whip everyone on the dust speck into a frenzy, begging them to make more and more noise until their voices reach a critical mass  that the Wickershams can actually hear. And so it is with social media and the things that matter to people—more and more voices join until they are finally HEARD. Churches are naturally harnessing this power for their causes, missions, and to state their position on important social issues like the Trayvon Martin case.

This brings me to some important caveats that users of social media should keep in mind, no matter how passionate their feelings on a particular subject.  Marcus Davonne Higgins, a 33-year-old Los Angeles man who uses the online handle “maccapon,” tweeted what he thought was the address of George Zimmerman, with some pejorative commentary, ominously telling people to “reach out and touch him.” Higgins identified Zimmerman as “George W. Zimmerman”, when he is actually “George Michael Zimmerman.”  He also encouraged his large Facebook and Twitter following to spread the address far and wide. He tweeted it to many celebrities, such as Spike Lee and Will Smith, asking them to repost. Spike Lee retweeted it to his 240,000 twitter followers. Problem was, however, the address was not correct. It actually belonged to an elderly couple that had no relationship whatsoever to George Michael Zimmerman. This couple is now understandably terrified for their safety. There are a lot of furious people out there who could be capable of violence. If something should happen to this couple, Spike Lee and whoever else tweeted it, could potentially be facing very serious liability. A court could easily determine that mindlessly passing on information that is false, without bothering to check it out, is negligence, if not recklessness. Even if no physical harm comes to these folks, a decent plaintiff’s lawyer would throw in intentional infliction of emotional distress, false light and other invasion of privacy claims, and many other causes of action I can’t even think of right now.

Here’s the point: keep your wits about you, no matter how passionate you are about a situation or an injustice. Churches and other non-profits should have policies in place that outline best practices for the use of social media by the church or by congregants on behalf of the church. Don’t just mindlessly retweet information unless you have independently verified that it is true. Spike Lee and Will Smith would be easy targets with deep pockets but we would all be well-advised to “Snopes” anything that could potentially create a dangerous or embarrassing situation for another before cavalierly pressing the RT button. Better yet, don’t re-tweet or re-post anything, true or not, that could potentially bring harm of any kind to another person. There are other ways to get your point across that are less fraught with liability.

While Social Media provides a wonderful way for churches to reach their constituents and link to other like-minded people, churches should advise staff and members to keep in mind discretion and common sense. Passionate advocacy is one thing, unintentionally bringing harm to others or liability to your church is quite another.

Evangelists Joel and Victoria Osteen get a temporary reprieve in the copyright suit brought against them by writer of the song “Signaling Through the Flames,” courtesy of every defendant’s best friends, Twobley and Iqbal. The Texas district court granted their motion to dismiss because the plaintiffs failed to allege facts showing that the Osteens had a financial stake in the infringing activity and personally supervised the infringing conduct. The plaintiff was given leave to amend so the Osteens will undoubtedly have to face this issue again.