Church Law Group

Pastoral Separation Guidelines

Pastoral Separation Guidelines

From time to time it becomes necessary for a church to part ways with a pastor or other senior leaders.  The reasons for separation may vary; therefore, the specifics of the church’s response and handling of the separation may also vary.  No matter what the context is for separation, consideration must be given to ensure that the church’s bylaws as well as any existing employment agreement with the pastor are reviewed and the procedures followed carefully.  Further, pastoral care should be exercised while developing terms and implementing the pastor’s separation and overall exit strategy.  Because pastors serve the Kingdom in different capacities and for different amounts of time, each scenario regarding separation is different and will require a well thought out plan to conclude the relationship with the church.  The terms of any separation agreement should therefore allow for pastors to complete certain defined ministry goals, as applicable, which should be discussed and agreed upon in advance.  Keep in mind, however, that this best practice is only an option in the event of an amicable separation, as the church might not have the luxury to engage in more long-term planning if the separation is for cause or for disciplinary reasons.

At-Will Employee or Hired for a Definite Term?

In most cases, and with most states, employees hired for an indefinite period of time are at-will employees and the employment relationship can be terminated by either the church or the pastor for good cause, or without cause, and even without any notice.  If an employee is hired for a specified period of time then that employee is not at-will, and may only be terminated for “good cause.” Good cause can include: serious illness; abandonment of employment; breach of contract; refusal to perform duties; incompetency; misconduct; insubordination; intoxication; doctrinal deviation and moral failure. 

This is the formal legal framework within which we are discussing the termination of a pastoral employment relationship.  However, as we know, there are other very important considerations.  Should information be shared with the congregation?  How much information?  Should information be shared with the staff?  How much information?  Of course there are also timing issues and other consideration for the church leadership team.  It is very helpful to approach the termination of a pastoral employee with care and caution, not only for good legal reasons but also for very good church management reasons.

Church leaders should try to take advantage of what is known as a “qualified privilege” or more simply put, that statements made to others concerning a matter of common interest cannot be defamatory unless made with malice.  Practically speaking, this means that if church leaders speak only to church members and not in an open, public church meeting, then they can reduce the risk of being sued for making false, defamatory remarks.  Limit your communication to church members only and stick to the facts and not opinions.  Prepare a written statement to be read or otherwise shared with members and have it reviewed by an attorney.

Reasons for Separation

1. Termination - In this situation, either the pastor or the church may request a separation when, in the view of either the pastor or the church, there exists a perspective or belief that the relationship is no longer workable.  For example, some of the following circumstances may lead to this conclusion:

  • Change in calling for the pastor;
  • Changing ministry environment;
  • Change in vision or focus of the church or the pastor;
  • Poor pastoral performance;
  • The result of funding limitations;
  • Any other situation that brings the viability of the pastoral relationship into question.

2. Medical Disability or Incapacitation – Sometimes a situation arises where a pastor suffers from some type of physical or mental impairment of either a permanent or progressive nature that may become a cause for separation. In these situations, the church needs to be sensitive to the many issues involved and work collaboratively with the pastor regarding the physical needs, housing, placement of the pastor and his family.  At all times during this process, the church should be mindful of state and federal laws pertaining to disability, and the church should make contact with its insurance broker to understand the benefits that might be payable under any long-term disability policy the church may own for the benefit of the pastor.  Additionally, the church’s employee handbook should also be consulted.

3. Separation for Cause – Unfortunately, there are also times when a pastor engages in conduct that does not meet the Church’s spiritual or contractual standards.  In such situations, termination of the pastoral relationship may be necessary. Separation of pastoral relationships for cause is to be clearly stated and is ordinarily only to come after other potential resolutions of difficulties have been attempted.  This category carries a higher risk of potential liability and the church should ensure it has competent, experienced legal counsel to help guide the church through this type of troubled separation.

Separation Agreement

In all situations, regardless of the reason for separation, we recommend that the church and departing pastor enter into a separation agreement.  These agreements set forth the terms and conditions of separation and often occur with the church paying the employee a specified sum of money over a specified period of time in exchange for the employee’s consent to termination and the very important release of any legal claims against the church.  You need the services of an experienced church law attorney so that you do not run afoul of any federal or state issues and so that the communication process with the church can be best managed to ensure that any possible legal liability is minimized.  Ensure your church has employment practices insurance coverage and verify whether the directors and officers have D&O insurance coverage.  D&O coverage often carries a high deductible so it is important to check on the availability of employment practices coverage as well.

The terms of any agreement are negotiable; however, a basic separation agreement should contain, at minimum, the following terms:

  • Identification of the parties (pastor, church, etc.);
  • Dates for:
    • End of ministry responsibilities;
    • Removal of personal property;
    • Termination of cell phone ;
    • Final compensation, benefit payments;
    • All financial agreements, including but not limited to:
      • Salary continuation;
      • Benefits continuation;
      • Loan repayment or shared equity agreement (where applicable);
      • Possible continuation of the housing allowance;
      • Compensation for unused, earned vacation;
  • Voluntary termination of employment;
  • Confidentiality provision;
  • Non-disparagement clause;
  • Return of all employer property;
  • The agreement may specify that if the pastor finds full-time employment prior to the end of the terms of the agreement, the church's financial obligations end as of the date of said employment begins;
  • A clause that releases each party from legal action unless the agreement is not fulfilled;
  • A statement regarding the limited liability of the church;
  • A statement (if the church has more than 20 employees and the employee being separated is at least 40 years old) that the agreement is in compliance with the Older Workers Benefit Protection Act which, among other things, requires a 21 day review period;
  • Alternative dispute resolution;
  • Date and signature of all parties; and
  • The statement is to be put in the pastor's file and the church's file.

We recommend that churches seek the assistance of an experienced church law attorney to help guide the church and/or pastor through the separation process as well as assistance in the drafting of an executive level separation agreement simply because such an agreement entails many aspects of state and federal law that can have significant impact on the church and the pastor. 

Church Law Group

Written by Church Law Group  |  Category: Main Articles, General
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