Defamation Claims Against Churches, by Richard R. Hammar

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Ruling provides precedent for future civil lawsuits.

An Oregon court ruled that the First Amendment did not prevent it from resolving a defamation claim brought by a pastor against his former church and denominational officers.

A church laid off an associate pastor (the “plaintiff”) due to financial difficulties. A denominational officer offered the plaintiff a position as pastor of a church in a nearby small town. The plaintiff was unenthusiastic about this position and explained that he had concerns about the salary, health insurance coverage, and lack of opportunities to supplement his income in such a small town. The denominational officer offered the plaintiff a monthly salary of $1,500; a subsidy of an additional $1,100 per month for plaintiff’s first three months (totaling $3,300) to match the salary that the outgoing pastor had received; and health care coverage for up to six months.
The plaintiff eventually accepted the position, but emphasized to denominational officers that he wished to be considered an interim pastor. A denominational officer sent the plaintiff a letter stating that he would send him a check for $3,300 to subsidize his first three months of salary, and that these checks would not have to be repaid. A short time later, the plaintiff, with the knowledge of the church board, withdrew $3,000 from the church’s bank account. He discussed the transaction with the board, explaining that the money had been earmarked for him as a gift by a denominational officer. The board accepted that explanation and issued the check in accordance with its normal procedures, including having two individuals (in this instance, plaintiff and a board member) sign the check. The expenditure was further documented in expense reports that were sent to a denominational office. The plaintiff deposited the check into a personal checking account and wrote four checks against that amount to cover health insurance premiums.
A few months later the pastor informed the congregation that he would be leaving. As part of this transition a denominational officer reviewed the church’s accounting records. The church bookkeeper asked the denominational officer to take a look at the $3,000 withdrawal from the church’s bank account. The officer looked at the transaction, and later informed the pastor that he was being charged with “misappropriation of church funds” as a result of the withdrawal since “that money was intended for the subsidy of the church for your salary for the first three months of employment there and not to be taken over and above your salary.” The pastor expressed shock at the accusation. He elected not to pay back the $3,000 because he believed that, by doing so, he would be admitting that he was guilty of misconduct.
A denominational officer drafted a letter that he later read aloud to the congregation. He later testified that he wanted to inform the congregation about the circumstances of the plaintiff’s departure because it “had a right to know what was happening” and because he wanted to avoid speculation and rumors regarding the plaintiff and the $3,000 transaction. In the letter, the officer explained that “based on a review of the church books and board minutes, it is now evident that there has been, to some extent, a financial misappropriation by [the plaintiff].” Another denominational officer sent an e-mail to his superior’s secretary stating that the plaintiff “has already demonstrated a willingness to lie and steal, and to purposely sow discord and division.”
Source: ChurchLawandTax.com