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Q: A twelve year old girl who participates in our church's youth program recently told her parents that when the youth group went on their last field trip, a youth worker from the church touched her "in a way that made her uncomfortable." The child's parents are irate and are threatening to sue the church. What should I do? Is the church potentially liable?

A: The church should immediately and fully investigate the matter, and should suspend the youth worker from all youth activities until the investigation is completed. In addition, any time a person has cause to believe that child abuse has occurred, this information must be reported to local or state law enforcement authorities or to the Texas Department of Protective and Regulatory Services. The report must be made immediately. The church should consult its attorney for the proper reporting procedure. The church could be liable if the church failed to reasonably investigate the background of the youth worker to determine whether there were any instances in the worker's past that would indicate a propensity to commit an act of child abuse. Church liability could also arise if the church continued to allow the youth worker to work after the church received information that would indicate such a propensity. For example, if previous complaints had been made against the youth worker and those complaints were not taken seriously, this could lead to a conclusion that the church should have been aware of a propensity of the youth worker to commit such an act and the church could be negligent for continuing to allow him to work with the youth. The church's potential liability is the same whether the youth worker is a paid worker or volunteer at the church.

Child abuse | Top of page

Q: I am the assistant pastor in a very large church in Texas. I have been ministering to a church member who in our last session told me that his wife frequently shakes and slaps their 3 year old son when she cannot get him to do what she wants. He wants help and is concerned for their child, but asked that I not say anything to anyone for now, since according to him "'s really not that bad and she hasn't hurt him yet." What should I do?

A: Communications between a minister and a church member for the purpose of the church member seeking spiritual advice are protected by the clergy privilege. Normally such communications are confidential and may not be disclosed to third parties without the express consent of the individual being counseled. However, the reporting of child abuse is an express exception to the clergy privilege. Instances of child abuse must always be reported, even if the information is learned during spiritual counseling. The exception for reporting child abuse only allows for reporting to the authorities as specifically set out in the child abuse reporting statute. It does not allow you to disclose the information to any other party. Even though in this instance the church member claims that the conduct is "really not that bad", you must recognize that the wife's conduct may still constitute child abuse. Child abuse includes physical harm that is beyond reasonable discipline, emotional injury, and threats of physical or emotional injury to a child. Even for a child to see an adult physically abuse his brother or sister may constitute child abuse, because the mere viewing can cause an emotional injury. If you are in doubt as to whether an act constitutes abuse that must be reported, you should consult your church's attorney.

Child abuse | Top of page


Q: As the pastor of my church, I recently ministered to a young woman who is a member of the church and whose husband has been abusing her, both physically and verbally. The young woman filed charges against her husband with the local police department and now the police have contacted me to ask questions regarding the abuse and the statements made to me by the young woman. What should I do.?

A: The church's ministerial staff who provide individual ministering must understand that a privilege of confidentiality attaches to all communications between the ministerial staff member and the persons seeking spiritual advice. The privilege actually "belongs to" the person receiving counseling and that person has the right to prevent the information from being disclosed. In this case, the young woman owns the privilege and can prevent you from disclosing any of the communications to any third party. This privilege applies even when you are questioned by the police or when you are subpoenaed to testify in a court matter. You cannot disclose any of the communications between you and the young woman unless you obtain her consent to do so. To protect yourself, you should obtain the young woman's consent in writing before disclosing any information.

Clergy privilege | Top of page


Q: Our church is incorporated and I was on a committee that voted to borrow $250,000 from a local bank. I signed the Note as a "trustee" of the church. Unfortunately, the church has not been making its payments on time and the church is on the verge of defaulting on the Note. If the church defaults, will I be personally responsible for payment of the note?
Would the answer to my question be different if the church is unincorporated?

A: You would only be personally liable for repayment of the Note if:

(i) the committee that voted to borrow the loan from the bank exceeded its authority, or the trustees who actually signed the Note exceeded their authority in doing so,

(ii) you executed the Note in your name without showing or indicating your representative capacity on behalf of the church (i.e., you did not indicate on the Note when you executed it that you were signing only as a "trustee" on behalf of the church), or

(iii) you signed a document at the bank that contained a personal guaranty by you of the indebtedness. The answer to this question would not change if the church is unincorporated, based upon present law.

Contracting indebtedness | Top of page

Q: I am a member of the board of directors at our church. Another board member and I intended to have the board vote on whether the church would renew the lease on our office furniture. The board had discussed this issue at other meetings and it seemed everyone was in agreement to renew the lease for another year. The church really did have the money to buy furniture at the time. We were scheduled to vote on it at the next meeting. However, the lessor called the day before the meeting and said that if we wanted to renew the lease, we had to do it that day. So, before the board actually voted on it, a few of us signed the new lease on behalf of the church. When we voted on it at the director's meeting, the board voted to purchase new furniture. Are the directors who signed the lease personally liable for it or is the church obligated now to lease the furniture?

A: The directors who signed the lease are personally liable for the lease obligations because they exceeded their authority by entering into the contract prior to obtaining the proper authority to do so. If it appeared to the lessor that the directors had authority to sign on behalf of the church, then the church would also be liable to the lessor.

Contracting indebtedness | Top of page


Q: The number of members at our church has increased significantly. With the increase in membership, we have had a pressing need for more counselors. It seems that more and more people are needing help with so many different problems. Some of their circumstances are very serious. Who should we permit to counsel our members and on what subjects should we be counseling as a church? Additionally, I have heard of a number of instances where churches have been sued over alleged misconduct in counseling. How can we protect our members and our ministers from these occurrences and false allegations?

A: The church should develop a counseling policy that sets forth its procedures for ministering to its members and the community without violating the law or exposing the church to significant liability. The procedures set forth in the policy should be followed closely. Allegations against churches in this area have included claims that improper advice was given in a particular instance and that the individuals giving advice did not have the proper training or experience for the particular matters for which they were rendering advice. A counseling policy should stress that while the church will "minister" to a person's needs, if the needs are of such a nature that formal "counseling" is recommended, the person will be referred to a licensed professional inside or outside of the church who has the necessary training and experience to properly handle those issues. A counseling policy can also help the church avoid violating state law by prohibiting laypersons from counseling without proper training and licensing. Under Texas statutes, licensed or ordained clergy of the church are not required to be licensed from the State of Texas to provide counseling (under the Professional Licensed Counselor Act, the Marriage and Family Therapy Act, and other acts), but this exception does not apply to laypersons. A counseling policy adopted by the church should address who will be authorized to be involved in counseling and how particular problems will be handled. The policy may also address such subjects as counseling youth, counseling members of the opposite sex, whether the person being counseled will be told in advance that disclosure of certain facts may be required to be reported to the authorities, and the environment in which counseling will be conducted. A policy addressing these issues would significantly benefit the church and reduce the risk of claims being alleged against it.

Counseling | Top of page


Q: As the business administrator at our church, I have reason to believe that one of our church secretaries is embezzling money from the church. What should I do?

A: The church should conduct a full investigation of the matter, which includes an audit of the church's financial records. Most often, the audit will be performed by an outside accounting firm. If reasonable grounds exist to believe embezzlement has occurred, the church should also suspend the church secretary from her duties until the investigation is complete. In order to help protect against future occurrences, the church should review its financial accounting policies and procedures to determine whether further safeguards could be instituted. If the church does not have such a policy, one should be implemented.

Embezzlement | Top of page


Q: I received a telephone call last week and was informed that an individual who passed away in our town left the church a tract of real estate. I drove out and looked at the property and discovered that it had a building on it in poor repair and several large chemical containers that need to be cleaned up. I did some research and found out that years ago the property was used to store pesticides, fertilizers, feeds, and other inventory for a feed store. Is there anything I should be concerned about? What do I need to do to adequately protect the church?

A: Any time a church is considering purchasing real estate or accepting it by gift, the church should determine whether there are environmental concerns related to the property. By law, the owner of real property is obligated to pay the costs associated with the cleanup of any environmental hazard found on the property. Specific procedures are required to be followed for cleanup and the environmentally hazardous materials must be stored in special locations, all of which significantly increase the cost of cleanup. Accordingly, the church could be assuming a large financial obligation along with the property, which it dos not want or need. It is extremely important that the church determine whether any environmental concerns exist prior to accepting title to the property in its name. To make this determination the church should retain an environmental firm to perform an environmental evaluation of the property. Based upon the particular facts associated with a property, there are different levels of investigation that an environmental firm can perform to provide the church with the necessary recommendation. The church should consult its attorney with respect to these matters prior to proceeding.

Environmental liability | Top of page


Q: We are in the process of starting a new children's educational program at our church. As a result, we will need to hire a number of employees to work with the children on both a full and part time basis. What steps should we take when hiring these individuals? May we ask prospective workers about their religious beliefs?

A: Before hiring anyone to work in the children's educational program, the church should adopt and then enforce an employee policy that includes a procedure for conducting background investigations of prospective workers whether they are to be paid full time, paid part time, or volunteers. Background checks could involve the following:

(i) obtaining information by written application from the prospective worker,

(ii) checking references and past employment or work experiences and recording the information learned from these sources in a personnel file,

(iii) interviewing the prospective worker and recording the information received in a personnel file, and

(iv) having a criminal background check done on the prospective worker by an independent data base source.

Background checks should also be performed on any other person in the church who has or will have regular contact the children, which may include the church's cleaning or maintenance personnel. Because you are a church, you may ask questions regarding a person's religious beliefs, and you may limit your hiring to persons who have the same religious beliefs as those of your church.

Hiring and Firing | Top of page

Q: Over the course of the history of our church we have unfortunately had an occasion to dismiss a church employee. With the increasing size of our church, and the number of persons we employ, I am concerned that we will have to do so in the future as well. What do we do to help insure that the church will not be held liable, if it is required to dismiss an employee in the future?

A: In Texas, if an employer does not agree to specific terms of employment with its employee, the employee is an employee at will, meaning that the employee is employed for no specified term and can be terminated at any time by the employer with or without cause. However, the employment at will relationship can be altered. Examples of specific terms that would change the employment at will relationship include instances in which the employer retains an employee for a specified length of time, or for so long as the employee does not violate certain rules or job performance requirements. The church should take steps to insure that it does not inadvertently change the employment at will relationship with any of its employees. If the church has a personnel policy or employment manual, or otherwise communicates its policies in writing to its employees, the church should review these materials to make certain there are no statements contained therein that would change the relationship. For example, if the employment manual states that employees will be terminated only for reasons stated in the manual, then a question could arise as to whether the church violated its "contract" if the church dismisses the employee for a reason other than one listed. In addition to a review of the church's relationship with its employees, the church must be certain it never terminates an employee for a discriminatory reason (e.g., age, nationality, race, color, disability or sex). The statutes prohibiting discrimination apply to churches that employ a minimum number of employees (most statutes apply to employers who employ 15 or more employees) and that affect interstate commerce. Lastly, the church may discriminate on the basis of religion, and therefore cannot be liable for hiring and firing decisions that are based on religious grounds.

Hiring and Firing | Top of page


Q: Our church has operated as an unincorporated nonprofit association for many years. We would now like to incorporate. How do we accomplish incorporation? What do we need to do once we are incorporated?

A: It is advisable for churches to incorporate. In order to incorporate, a majority of the members of the church who have voting rights must approve the decision to incorporate at a duly called and constituted meeting of the church. Once the church has voted to incorporate, the church should have its legal counsel prepare articles of incorporation to be filed with the Texas Secretary of State's office in Austin, Texas. After incorporation, at the first business meeting of the church, the church must adopt bylaws to govern its affairs as a corporation. These bylaws may be similar to the bylaws the church operated under while unincorporated, but should be reviewed by the church's legal counsel to determine whether any necessary changes must be made prior to adoption. After incorporation, the church should also transfer all of its properties, contracts, accounts, service agreements, and debts into the name of the corporation. In the event that title to any real property is transferred into the new corporate name, or the church otherwise acquires title to real property after incorporation, then the church must file an application for an ad valorem tax exemption after January 1 of the year following the year of transfer and no later than April 30 to that year.

Incorporating | Top of page

Q: Our church has determined by proper vote that it will incorporate, but it does not have access to a lawyer practicing church law. Our church committee has drafted articles of incorporation and bylaws that it recommends the church use without a lawyer reviewing them. Are there problems the church could have from taking this action?

A: While not required, it is advisable to have an attorney review both the articles of incorporation and the bylaws prior to adopting them. There are specific legal requirements that must be included in the governing documents in order for the church to be organized and operate as desired. For example, if your church wishes to be congregationally led, the articles of incorporation must state that the church intends to have its affairs governed by its members, rather than a Board of Directors. If your documents are silent on this subject, state law automatically requires that the church be governed by a Board of Directors that will make most of the church's decisions, without them having to go before the congregation. In addition, the governing documents should set forth the legal requirements for meetings, such as what constitutes a quorum, which is the number of persons that must be present in order to have a duly constituted meeting. If they do not, then state law provides that 10% of the church membership having voting rights must be present in order to have a proper meeting. The 10% requirement is often difficult for churches to meet for business meetings. Governing documents can address this by making the quorum requirement a smaller percentage, a set number of members, or even by providing that the number of members who actually attend any given meeting will constitute a quorum.

Incorporating | Top of page


Q: Our church was recently sued by the parents of a child who was injured when he was attending a picnic held at one of our mission churches. In their lawsuit, the child's parents named both the mission church and our sponsor church as defendants. Can our church be held liable for the child's injuries?

A: Whether the church can be held liable depends on the relationship between the mission and the sponsor church. That relationship can either be one in which the mission and sponsor church constitute one legal entity or the relationship can be one in which the mission is a separate legal entity from the sponsor church. If the mission and sponsor church are one legal entity, then the sponsor church is liable for all obligations of the mission, both contractual and tortious (e.g., arising out of negligence). In that instance, the sponsor church could be held liable for the child’s injuries. If the mission and sponsor church comprise two separate legal entities, whether the sponsor church can be held liable will depend on the following:

(i) If the mission and the sponsor church have entered into an affiliation agreement that sets forth each entity's respective rights and obligations, liability will depend on whether in the terms of that affiliation agreement, the sponsor church has assumed the mission's liabilities that arise in this type of situation;

(ii) Whether the sponsor church was directly responsible for any negligent acts or omissions that contributed to this incident. For example, did leadership from the sponsor church help plan or make other decisions related to the picnic that contributed to the alleged negligent act or omission which caused the child to be injured; or

(iii) Whether any of the individuals who were responsible for supervising the picnic, were employees of the sponsor church or volunteers from the sponsor church.

Missions | Top of page

Q: At our last business meeting, one of our members asked whether or not our mission should incorporate. We are a mission of a large church in Texas. Our sponsor church is already incorporated. Should we incorporate?

A: Whether a mission should incorporate depends on the type of relationship the mission and the sponsor church wish to have with one another. In other words, do they want to be organized as one entity or two separate legal entities. If the mission and sponsor church intend to constitute one legal entity, then the mission should not incorporate. Incorporation would automatically make the mission a separate legal entity. If the mission and sponsor church intend to comprise two separate legal entities, then the mission can either be an unincorporated nonprofit association or a Texas nonprofit corporation. It is recommended that all missions that are separate legal entities from their sponsor church incorporate to obtain the advantages of incorporation, including limited liability protection.

Missions | Top of page


Q: Ms. Brown an elderly lady who was a member of our church recently passed away. In her will, she left a tract of real estate to the church. The tract of land would be perfect for the new sanctuary we have been planning to build. Due to the rapid growth we have had, the church is in desperate need of a larger sanctuary and worship center. We intended to turn the existing sanctuary into a youth fellowship hall. Ms. Brown was very much involved with out youth, and an avid supporter of an efforts to create new facilities and programs for them. However, in her will, Ms. Brown stated that the property she left to the church was to be used to create a park and recreational area. The will further stated that if the property ceased to be used as a park and recreational area, ownership of the property would automatically revert to Ms. Brown's heirs. Can we build our new sanctuary and worship center on the property Ms. Brown left the church since we need it so badly and the church already has a park it can use whenever it wishes?

A: The type of gift described in Ms. Brown's will is a restricted gift. That is, the gift may only be used for a particular purpose according to the instructions of the donor. The same rules apply to funds raised during a building campaign where those funds are solicited or given specifically for a particular purpose, such as constructing a new sanctuary. For any restricted gift, the church cannot violate the restrictions unless it:

(i) obtains the written consent of either the donor who creates the restrictions or the beneficiaries who will benefit from the gift if the restriction is violated (i.e., the reversionary heirs of Ms. Brown in the example above), or

(ii) the church obtains court approval to avoid the restrictions upon proper proof that the purposes of the gift would be frustrated if the restrictions are followed, due to facts that were not anticipated at the time the restrictions were placed on the gift, and that the intentions of the donors would be best served by modifying or avoiding the restrictions.

Restrictions on gifts | Top of page


Q: A very irate and upset church member called my office and claimed that she and a ministerial staff member of our church have been having an affair. She stated that he has been counseling her for over six months and that approximately two months after he started counseling her, they became involved. She claimed that the staff person used the counseling sessions to gain her trust and then once she confided in him, took advantage of her weaknesses. What should I do and can the church be held liable for any injuries she claims to have suffered as a result of this? What can we do as a church to protect against this type of thing happening in the future?

A: Texas law imposes legal duties on the church when a minister or counselor sexually exploits someone being counseled. To properly handle this situation, you should:

(i) Immediately investigate the matter to determine its truth,

(ii) Immediately suspend the ministerial staff member from any duties that would present an opportunity to continue any wrongdoing until such time as the matter has been fully investigated, and

(iii) If you suspect the allegations to be true, you and the church must report the matter to the County prosecuting attorney within thirty days of when you become aware of the incident.

The church could be liable in this matter if the allegations are true and the church failed to investigate the background of the ministerial staff member involved. Texas law requires the church to investigate a staff member's background for at least the five years prior to his employment by the church to determine if any specific instances of sexual misconduct occurred in his past. The church has the responsibility to take steps reasonably necessary to stop the conduct from reoccurring and to report the occurrence to the County prosecuting attorney. The church must also advise the ministerial staff member's prospective future employers of the acts known to the church which constitute sexual misconduct, if the church receives a specific request for such information. To help protect against sexual misconduct occurring in counseling sessions as well as against false allegations of its occurrence, the church should adopt a counseling policy to address matters such as ministerial counseling of the opposite sex. There are many suggestions and alternatives available to help reduce or avoid these types of claims.

Sexual misconduct | Top of page