By Richard R. Hammar, J.D., LL.M., CPA
© Copyright 2001 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m43 c0103
Key point 8-05. Congress has enacted a number of employment and civil rights laws regulating employers. These laws generally apply only to employers that are engaged in interstate commerce. This is because the legal basis for such laws is the constitutional power of Congress to regulate interstate commerce. As a result, religious organizations that are not engaged in commerce generally are not subject to these laws. In addition, several of these laws require that an employer have a minimum number of employees. The courts have defined “commerce” very broadly, and so many churches will be deemed to be engaged in commerce.
Key point 8-07. Employees and applicants for employment who believe that an employer has violated a federal civil rights law must pursue their claim according to a specific procedure. Failure to do so will result in the dismissal of their claim.
Key point 8-09. The federal Age Discrimination in Employment Act prohibits employers with 20 or more employees, and engaged in interstate commerce, from discriminating in any employment decision on the basis of the age of an employee or applicant for employment who is 40 years of age or older. The Act does not exempt religious organizations. Many states have similar laws that often apply to employers having fewer than 20 employees.
* A federal court in Minnesota ruled that a religious school did not violate federal age discrimination law by refusing to offer a teaching contract to a 64-year-old teacher. A teacher (“David”) was employed by a Jewish school in 1981, and was offered one-year teaching contracts for many years. When his teaching contract expired after the 1997-98 school year, the school opted not to offer a new full time contract, asserting that David was no longer effective as a teacher. David sued the school, claiming that its decision not to offer him another contract violated the federal Age Discrimination in Employment Act (ADEA) which prohibits covered employers from discriminating in any employment decision on the basis of the age of an employee (who is at least 40 years old). School officials insisted that David’s teaching performance was a concern throughout his employment, but that more severe problems surfaced during recent years. Parents asked school officials not to place their children in David’s classes, and there were complaints that he made unwanted physical contact with students. In addition, school officials noted that David often was late in coming to school. David claimed that he was a very effective teacher, and met all of the school’s expectations. He cited letters of recommendation on his behalf written by Rabbis and teachers, and a thank you card from a satisfied parent. As support for his claim of age discrimination, David referred to the following comment made to him by a school official regarding the touching of students, “You are old. I am old. Times have changed. You can't touch the children the same way as you did before."
The court applied the three-stage “burden shifting” analysis created by the Supreme Court for analyzing age discrimination claims: The plaintiff has the initial burden of presenting a “prima facie case” of discrimination. If a prima facie case is established, a legal presumption arises that the employer unlawfully discriminated against the plaintiff. This rebuttable presumption shifts the burden to the employer to produce evidence that the plaintiff was rejected (or someone else was preferred) for a "legitimate, nondiscriminatory reason." If the employer articulates such a reason, the presumption disappears and the only remaining issue is whether the employer discriminated. The plaintiff then has an opportunity to prove, by preponderance of the evidence, that "the legitimate reasons offered by the employer were not its true reasons, but were a pretext for discrimination."
prima facie case
If an employee can prove a prima facie case of discrimination, then a rebuttable presumption of discrimination arises and the employer has the burden of proving a legitimate, nondiscriminatory basis for its decision. To establish a prima facie case of age discrimination, a plaintiff must demonstrate that: (1) he is within the protected class; (2) he was qualified to perform his job, or was meeting the legitimate expectations of his employer; (3) he suffered an adverse employment action; and (4) persons under 40 were not treated the same, or he was replaced by a person not in the protected class. The court conceded that David met the first and third requirements, but not the second and fourth. With regard to the second requirement, it noted that the school identified multiple complaints regarding David’s performance, which became progressively worse over time. With regard to the fourth requirement, the court noted that the question is whether a younger teacher was hired to replace David such that he was eliminated from the program on the basis of age. This requirement was not met, since David’s “replacement” only taught some of his former classes, and did not function as a true replacement. Further, his duties bore little correlation to duties performed by David. As a result, David failed to establish a prima facie case of age discrimination.
nondiscriminatory basis
The court noted that if David established a prima facie case (which he did not), then this had the effect of raising a rebuttable presumption of discrimination and imposing on the school the burden of proving a legitimate, nondiscriminatory basis for its decision not to renew David’s teaching contract. The court concluded that the school had established a nondiscriminatory basis for its decision. “The school has produced ample rebuttal evidence to show David’s employment was terminated for the legitimate, non-discriminatory reason of inadequate performance. It had long been concerned with David’s ability to teach younger students. It was receiving complaints from students and parents regarding his teaching style, and enrollment in his courses was far below average. The school has articulated a non-discriminatory reason for the decision to terminate, and the burden shifts back to David to prove that this reason is merely a pretext.”
pretext
If a prima facie case is established, and the employer rebuts the presumption of discrimination by proving a nondiscriminatory basis for its decision, the burden shifts back to the employee to prove that the employer’s alleged nondiscriminatory basis was a “pretext” for what in reality was genuine discrimination. David insisted that the school’s alleged nondiscriminatory basis was a pretext, based on the following facts: (1) the school failed to consistently document the problems David was having or give him notice that it was concerned with his performance; (2) the school must not have felt that David was a poor teacher because it invited him to come back to teach one class during the 1998-99 school year; and (3) a school official made statements concerning David’s age. The court concluded that this evidence did not prove that the school’s alleged nondiscriminatory reason for its decision not to renew David’s contract was a pretext. It noted that David was adequately informed that his performance was a concern to the school, and the school made sufficient documentation of the specific performance concerns. With regard to the school’s offer to have David come back and teach one class, the court observed, “The fact of continued employment on a limited basis does not establish that the diminishment of status from full-time to part-time was premised on age discrimination rather than performance deficiencies. The school should not be punished for an attempt to try David in a diminished tailored role prior to termination.” The court also rejected David’s claim that the statement of a school official concerning David’s age proved that the school’s alleged nondiscriminatory basis for not renewing his contract was a pretext for age discrimination. The official had informed David, “You are old. I am old. Times have changed. You can't touch the children the same way as you did before." David asserted that the thrust of the comment that times have changed and you cannot touch children the way you could twenty years ago is really the same as saying you are just too old to teach. The court disagreed, noting that the statement was too general and nebulous to be the basis for such a conclusion.
Application. This case is important for several reasons, including the following:
1. Was the school subject to the age discrimination law? The court did not even mention the fact that the Age Discrimination in Employment Act applies only to employers that have 20 or more employees and that are engaged in interstate commerce. Presumably, the school had 20 or more employees, and the school did not even question the commerce requirement.
2. Nonrenewal of one-year employment contracts. Many churches and church schools have adopted the practice of offering employees a one-year contract. Often, the objective is to give the employer the opportunity of getting rid of an employee without having to fire him or her. All it has to do is fail to renew the contract at its expiration. This case suggests that such a practice may not be legally sound. Neither the school nor the court even mentioned the fact that the school had not “fired” the principal, but rather had simply failed to renew his contract. Presumably, this means that the school considered this defense too weak to mention.
3. Procedure in employment discrimination cases. The case summarizes the “burden shifting” analysis in an age discrimination case. The same analysis applies to most other discrimination claims. Church leaders should be familiar with it. Employees who claim employment discrimination have the initial burden of establishing a “prima facie case” of discrimination. This requires proof that (1) they are a member of a class protected by a federal, state, or local civil rights law; (2) they suffered an adverse employment decision (such as not being hired if a job applicant, or being dismissed or disciplined if an employee); (3) a direct relationship exists between membership in the protected class and the adverse employment decision. If an employee is successful in making out a prima facie case of discrimination, then a presumption of discrimination exists, and the burden shifts to the employer to show a legitimate, nondiscriminatory reason for the adverse employment decision. If the employer demonstrates a nondiscriminatory reason for the adverse employment action, then the presumption is rebutted and the employee must prove that the nondiscriminatory reason was a pretext for discrimination. The court in this case noted that if an employer's allegedly nondiscriminatory basis for an adverse employment action is “subjective” in nature, then this seldom will be sufficient to overcome a presumption of pretext.
4. Nondiscriminatory basis for termination. This case illustrates that age discrimination requires proof that age was the basis for an adverse employment decision. An employer that dismisses an employee who is 40 years of age or older will not be guilty of age discrimination if it can prove a nondiscriminatory and “non-pretextual” basis for its action. In this case, the court concluded that the school established that its decision not to renew David’s contract was based on legitimate, nondiscriminatory reasons dealing with the performance of his duties. Blackman v. Talmud Torah of Minnesota, 2001 WL 1558320 (D. Minn. 2002).