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7th Circuit Court of Appeals Holds Religious School Can Choose Not to Renew an Employee’s Contract for being in a Same-Sex Relationship

October 07, 2022

Important takeaways: A church has the power under the 1st Amendment to the U.S. Constitution to select its leaders and leader of its organizations, including schools. A church can choose not to renew an employee’s contract for not following religious tenants included in an employment contract, if the employee is considered to be a minister.

Facts: Roncalli High School (School) is a Catholic school in the Archdiocese of Indianapolis. The principal of the School is responsible for hiring faculty and staff who are faithfully Catholic and whose values align with the mission of the school. After someone is hired, the principal continues to monitor if they are actively seeking opportunities to be involved in the faith formation of the students.

Lynn Starkey (Starkey) started at the School in 1978 as an assistant band and choral director. Starkey left for a year and came back to be the New Testament teacher and then the fine arts chair, finally, Starkey became a guidance counselor. About 10 years later, Starkey became the Co-Director of Guidance where she supervised the guidance counselors and oversaw the department’s social work. Starkey is not a practicing Catholic but did attend school mass and other religious events for the school. As part of her position, Starkey was on the Administrative Council but claims even though she could provide input on religious matters, she never did. Starkey was not listed in the Faculty Handbook as part of the faith community.

In 2017, the school added a clause in their employment contracts that employment could be suspended or terminated if an employee’s behavior did not align with the School’s moral or religious teachings, including cohabiting before marriage. In 2018, Starkey signed an employment contract with this clause. In August 2018, the other Co-Director of Guidance was placed on administrative leave for being in a same-sex union and Starkey informed the School’s leadership that she was also in a same-sex union. Starkey was permitted to finish that school year, but her contract was not renewed as the school claimed she had violated the terms of her contract.

In 2019, Starkey filed suit claiming Title VII, Title IX, and state violations. The 7th Circuit Court of Appeals explained that the First Amendment forbids the government from prohibiting the free exercise of religion. This means there is a ministerial exception that gives churches the authority to select ministers. In deciding if an employee is a minister, the Court looks at the formal title given by the church to the employee, the substance reflected in that title, the individual’s use of that title, and the important religious functions the individual performed at the church.

The 7th Circuit found that Starkey was a minister under this exception as she was one of the leaders responsible for a vast majority of the daily ministry, education, and operation. Starkey was required to carry out the school’s religious mission and to communicate the Catholic faith to the school’s students. The School also held Starkey out as a minister in her job description. Starting in the 2017-2018 school year, Starkey was employed under a “Ministry Contract.” Since Starkey was a minister under this exception, the school had the power to choose its leaders and not renew her contract.

What this means: If an employee of a school run by a church is determined to be a minister, the church has the authority to choose whether to renew an employment contract. In deciding if an employee is a minister, the Court will look at the formal title given by the church to the employee, the substance reflected in that title, the individual’s use of that title, and the important religious functions the individual performed at the church.  The church can choose not to renew the employee’s contract for failing to live by religious guidelines outside of the school setting.

What is the name of the case and where you can read it: Starkey v. Roman Catholic Archdiocese of Indianapolis, 7th Circuit Court of Appeals, July 28, 2022.  Read it here.

As you consider these and other issues, we recommend you speak with your school lawyer or contact Bea, Megan, Beth, and Kevin by email or at 406-542-1300 to discuss these issues.

Kaleva Law

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