In today’s legal landscape, it is not uncommon for churches to find themselves on the receiving end of a lawsuit. How well does your church handle the following issues that can result in litigation against churches?
• Screen and Train Volunteers: Bad things happen, even in very good churches. It is absolutely necessary to make sure your volunteers, especially those working with minors, have undergone background checks and are properly trained in their duties and responsibilities. Are your volunteers competent in First Aid? Is there a procedure in place for dropping off and picking up children? Do you have volunteers that know how to handle food allergies? What is the protocol for dealing with a fire or other emergency?
• Maintain Safe Facilities: Not maintaining church property in a safe condition is a top reason churches find themselves in a lawsuit. Are the facilities clean and free of tripping hazards? Are any sharp objects or dangerous chemicals within reach of children? Do doors get locked when rooms are not being used? Is their adequate lighting inside and outside the church? A lawsuit is all too likely to result when someone gets injured from an unsafe condition that the church failed to correct.
• Prevent Misuse of Church Vehicles: Motor vehicle accidents happen every day, and church vehicles are not immune. Every church that owns any type of automobile should have a well-drafted policy explaining who can use the vehicles and for what purposes. Keys to all vehicles should be properly stored and not turned over to anyone who fails to meet insurance requirements. Church members should never be allowed to borrow church vehicles for personal transportation needs.
• Have Clear Policies and Follow Them: Like any organization, churches should have policies in place governing how the church operates. Everything from personnel issues, to how members are accepted and dismissed, to how money is handled need to be explained in writing. While lawsuits by disgruntled church members are rare (as they should be), these types of claims will often be thrown out by a court if the church can show that it acted consistent with its policies.
• Honor Copyright Laws: Copyright violations are extremely common in our society, but churches must be extra careful to follow the law. Copyright law is extremely complicated, and it is best to consult with an attorney before making use of anything that might be protected by federal law.
Reasons Church Need A Lawyer
• Every new church planter should talk to a lawyer familiar with churches, and ask about forming a corporation or similar entity. The legal risks are too high and the solution is relatively easy.
• If you are updating a corporate charter, constitution, bylaws, or similar governing document, talk to an attorney.
• If you haven’t updated your main governing documents in awhile, the church should touch base with an attorney. Hopefully, you have a relationship with a trusted legal advisor that you meet with every year. But if it’s been more than five years, please set aside an hour or two for a review.
• If you are updating your policy manual, it’s wise to have them reviewed by an attorney. If you don’t yet have a policy manual, you should’ve talked to a lawyer a long time ago.
• If the church is granting housing allowance to ministers, an experienced lawyer will help your decisions be supportable and defensible.
• If you’re making a major change in compensation or benefits to key staff, a quick review by a lawyer may save headaches down the road.
• If you are purchasing real estate, the church should use an attorney to make sure the deal doesn’t result in surprises (environmental contamination, zoning issues, etc.)
• If your church is going to terminate the employment of anyone, it is a good time to talk to an attorney. Non-ministerial employees are often subject to the same laws and regulations affecting other businesses. And while the Constitution gives churches broad leeway over “ministerial” employees, those decisions also have legal and political implications.
• A new or unusual fundraising method should be run by a lawyer who understands the charitable solicitation laws in the relevant areas. An improperly designed used-car donation program, eBay ministry, or commission-based solicitor can risk the church’s tax exemption.
• Any significant investment agreement should be reviewed by an attorney. Is the church issuing bonds? Engaging in creative financing? Offering interest? Expecting to receive a return on an investment? Developing real estate? Engage legal counsel.
• If the church is contacted by the IRS or the State or local equivalents, you should talk to an attorney, and have them respond.
• If your church receives communication about a zoning issue, it will be helpful to talk to an attorney before you make any response.
• If the church is contacted by an attorney representing someone else, you should respond through an attorney.
• If your church is engaged in church discipline, or removing members, talk to an attorney about your process. If you are contacted by an attorney representing a member, please have a church attorney respond.
• If your church becomes aware of allegations of sexual misconduct by any employee, contractor, volunteer or associate, contact an attorney immediately.
• If the sexual misconduct includes any person under 18 or over 65, contact an attorney immediately. In many states, ministers and other authorities are required to take very specific steps in a short timeframe. An attorney can make sure it is implemented properly.
• If any staff, contractor, or volunteer is alleged to have taken unfair advantage of an elderly, infirm, or disabled person, talk to an attorney immediately. Some states have implemented “elder abuse” laws similar to child abuse laws, with similar reporting requirements.
• If there is a potential conflict of interest transaction, it is helpful to involve an attorney before it is proposed and approved. Does it benefit staff, insiders, or key members in an unusual way? An attorney can make sure the discussion and record support the decision of the church.
• Does your church still have Trustees? It’s past time to talk to an attorney.
When Does A Church Need An Attorney?
When someone is starting or joining leadership in a religious institution, legal considerations are often towards the bottom of the priority list. However, religious institutions of all faiths need to be aware of areas where they may need advice from a licensed attorney in order to best serve their membership and carry out their faith. Here are some of the most common areas where a church or other religious organization should consult an attorney.
• Governing Documents: The majority of religious organizations operate under the direction of one or more governing documents. It is absolutely vital that these documents be kept up to date and reviewed on a regular basis. An attorney will be able to provide valuable advice and suggestions about what to include in these documents to give the maximum protection to the organization.
• Real Estate and Land Use: If your religious institution needs to move locations or expand its current location, an attorney will often be necessary. In this case, an attorney can help with reviewing your real estate transaction documents, determining whether your land use is permitted in the proposed location, or securing a variance or special use permit from the municipality if necessary.
• Employment: When hiring and firing lay employees, religious institutions must consider state and federal employment law. Discussing particular employment situations with an attorney before acting can save an organization thousands of dollars and an immeasurable amount of negative public perception. Further, an attorney can help prevent difficult situations in the first place by providing your organization with a clear and comprehensive employee handbook.
• Litigation: This is the obvious scenario where an attorney is needed. If a religious institution is presented with a lawsuit, it should immediately seek out an attorney with experience representing religious institutions, as the unique culture and issues in these types of lawsuits often call for a specialist. An attorney specializing in representing religious institutions will be able to better understand issues that are important to the organization, and will be familiar with the special challenges and opportunities presented.
• Denominational Relations: In today’s changing culture, many of the traditional denominations in Utah are changing also. It is inevitable that some congregations will feel called away from their past denominational affiliations for one or more reasons. When separation is being considered, it is vital to consult an attorney who is familiar with the process of leaving a denomination. Various legal issues will need to be considered before undertaking a separation and an understanding and knowledgeable counselor will ease the transition for all involved.
• Organizational Discipline: Many faiths have unique practices for disciplining individual members when necessary. However, there can be potential for some inter-organizational discipline practices to create legal issues. Having an attorney review organizational policy and provide advice on a particular issue can prevent unintended legal consequences.
• Advice on Current Legal Issues: As the culture changes rapidly, new legal issues arise frequently. Religious organizations must be prepared to operate in the light of these new realities. In these cases, an attorney will be an invaluable resource as a counselor who understands both the law and the client, and will be able to shed light on an otherwise confusing situation.
Church Governance And Property Disputes
Property and governance issues are often at the forefront in a church dispute:
• Governance issues — These often occur when there are struggles for control within a congregation or a church body. In nonhierarchical church bodies, disputes often arise between different factions who rival for control of the church.
• Control of church property — Disputes over property are usually a key issue when a church body splits. When a local church congregation breaks off from a larger church structure that is hierarchical in nature, disputes often arise over which body has rights in the church property.
All of these situations must be handled with the utmost care and sensitivity. Governance issues may result in religious employment litigation. When a church splits from a denomination, it is more than a matter of conflicting belief systems or leadership squabbles. Ownership of church buildings must be settled between a denomination and a congregation that is leaving that denomination. Possession and management of endowment funds may also be in question. It is often in the best interests of both sides to resolve the property or governance question without resorting to costly litigation. However, a desire to settle church building ownership or other questions of congregational control may not be enough to avoid a major lawsuit. It is critical to find a well-qualified attorney with experience handling church disputes, both to contain legal fees and to move forward with confidence toward a satisfactory resolution. Every church needs governing documents that define the organization’s scope and determine how it is run. Whether the church is organized as a religious nonprofit corporation or as a nonprofit association, a charter, bylaws, and other guiding documents are necessary for a wide variety of reasons, from basic operations to establishing proper tax treatment, managing assets, and controlling liability. As a church grows and evolves, it’s normal to need to make changes to governing documents.
There are some general steps that apply to each case:
• Take stock of existing documents: Many organizations, including churches, make the mistake of losing sight of their governing documents and discover conflicts only after they’ve become a real problem. Treating documents as living, breathing things is a helpful way to ensure that issues can be addressed. Doing so as a director is also an important part of satisfying one’s fiduciary obligations to the church. When changes do need to be made, it’s a good idea to review the entire document for any other improvements that could be made at the same time.
• Understand technical requirements: A particular governing document, like an incorporated church’s bylaws, typically will have a prescribed process for making amendments. In addition to these rules, changes to a particular document may be subject to state law or the rules of a church’s parent organization, if applicable.
• Reach a consensus: Following the church’s governing rules, the board or other leadership group should discuss why changes need to be made and proposals for new language. An attorney’s help is often necessary to ensure that proposed changes won’t create other problems.
• Document approvals: Regardless of how a church is organized it’s important that the leadership group’s approval of changes to its governing documents be memorialized in writing, either with meeting minutes or, if permitted, by a written consent. Certain types of documents, like corporate charters, may need to be submitted to the state before they will take effect.
• Notify applicable parties: If the church has relationships with outside organizations that rely on its governing documents, they will need to be provided with the updated versions. Banks are a common example of organizations that routinely refer to client governing documents to verify that formalities are satisfied.
Drafting Your Church Bylaws and Belief Statement
Starting a church is not unlike starting a corporation. A set of Corporate Bylaws and a belief statement must be drafted to define exactly what your church’s mission is, the beliefs you intend to follow, and how your “corporation” will be structured. The church’s bylaws will outline how the church will be governed. Consider the following questions when drafting your bylaws:
• Why are you starting a church?
• Will the church be performing funerals and weddings?
• Will the church be participating in community outreach programs?
• Will the church be a part-time or full-time commitment for you?
• Will fundraising be a part of the church’s activities?
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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