Ministers may sue for minimum wage violations

The U.S. Supreme Court has held a First Amendment-based “ministerial exception” bars employees acting in a ministerial capacity from bringing certain employment claims against their religious employers. A California state court of appeal panel ruled late last month that this exception does not automatically bar a minister’s claims for failure to pay minimum wages and overtime.

Background

In Lorenzo v. San Francisco Zen Center, former San Francisco Zen Center employee Annette Lorenzo sued the center for violating California’s minimum wage and overtime laws.

The center is one of the largest Sōtō Zen Buddhist churches in North America. Its primary purpose is to encourage the practice of Zen Buddhism by operating practice facilities and educating the public about Zen Buddhism. The center generates income at its three temples from members of the public, who do not have to practice Buddhism, who pay to use the center’s facilities or stay as overnight guests at its three temples.

Lorenzo completed the multi-year Work Practice Apprentice (WPA) program, an entry-level Zen training program. After completing the apprentice program, Lorenzo worked on the staff of the center’s facilities in various roles, including cleaning guest rooms and serving as the assistant to the executive chef at one facility. Her “work practice” was considered a continuation of her Zen training. The center provided Lorenzo with a modest monthly stipend, and room and board. After about three years, Lorenzo was asked to leave the center. Her final monthly stipend was $198.33.

Lorenzo filed a claim with the California Labor Commissioner for wage-and-hour violations. Following a hearing, the commissioner awarded Lorenzo $149,177.15 for unpaid minimum wages, unpaid overtime pay, liquidated damages, interest and waiting time penalties.

In appealing the award to the San Francisco Superior Court, the center contended the ministerial exception required summary judgment of Lorenzo’s wage claims. The trial court agreed. The court of appeals reversed.

Ministerial exception limited

Lorenzo conceded the center is a religious organization, notwithstanding its commercial activity. She also conceded she was a minister for purposes of the ministerial exception. The only question was whether her status as a former minister of a religious organization by itself necessarily barred her wage-and-hour claims. The court of appeals concluded that it did not.

The court of appeals analyzed the U.S. Supreme Court rulings that recognized and applied the ministerial exception to “certain employment discrimination claims” and rulings from other courts that limited the exception by, for example, allowing ministers to assert claims for breach of contract.

The appellate court concluded the ministerial exception bars only those claims by a minister that a religious entity shows would require a court to probe into matters of the entity’s governance closely linked to its faith and doctrine: “The Center does not argue that, much less explain how, Lorenzo’s wage-and-hour claims—which only seek lost or unpaid wages for her work in the church’s commercial activities—require such an inquiry.”

Key to the court’s holding was that Lorenzo challenged only her wages for the center’s commercial activities. She did not challenge the center’s decision to terminate her employment or seek reinstatement.

It pointedly rejected the U.S. Court of Appeals for the Ninth Circuit’s rulings that the ministerial exception does bar a minister’s wage claims, dismissing the circuit court’s rulings as backed by “little or no analysis to support its overly broad interpretation of the ministerial exception.”

Next step

The court of appeals underscored it was holding only that the ministerial exception did not necessarily shield the center from Lorenzo’s wage claims simply “based on its status as a religious institution and its employee’s status as a minister.” The appellate court said its ruling did not preclude the center from presenting evidence at trial that the way Lorenzo was compensated for her “work practice” was grounded in religious doctrine, such as a sacramental vow of poverty.

Invitation: I’ll be presenting a Law at Work Year in Review complimentary luncheon on Dec. 16 (Tuesday), from noon to 1:30 p.m., in downtown San Diego. The luncheon is sponsored by my law firm, Seltzer Caplan McMahon Vitek. I will review key developments from 2025, preview the year ahead, and answer your questions. For more information and to RSVP, please email my assistant Milla Sheild at sheild@scmv.com.

Eaton is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers. He also is an instructor at the San Diego State University Fowler College of Business where he teaches classes in business ethics and employment law. He may be reached at eaton@scmv.com.