Appellate Court’s Narrow Interpretation of Ministerial Exception May Impact Faith-Based K-12 Schools and Colleges and Universities

01.05.2026

In a recent case, a California Court of Appeal clarified the “Ministerial Exception,” which provides that secular employment laws do not generally apply to religious organizations unless certain circumstances are present.

In Lorenzo v. San Francisco Zen Center (Nov. 21, 2025) 2025 DJDAR 10768, the Court of Appeal ruled that the Ministerial Exception did not bar claims by a former employee against a religious organization for wage-and-hour violations for non-religious work. In addition to churches and other religious institutions of all types, this decision impacts faith-based educational institutions at all levels, including parochial K-12 schools and church-affiliated colleges and universities.

Plaintiff Annette Lorenzo’s initial relationship with the defendant San Francisco Zen Center (“Zen Center”) was as a student of Buddhism. The Zen Center is a nonprofit religious corporation devoted to encouraging the practice of Zen Buddhism. It operates three temples, which are available to the public for overnight stays, corporate events, and conferences. Attendees have use of hot springs/baths and need not practice Buddhism. Accordingly, the Zen Center has both a religious Buddhism-focused mission and operates as a business that has a secular element as well.

Eventually, after her training was completed, Ms. Lorenzo became an employee of the Zen Center. As both student and employee, she was required to reside on-site and to live a monastic lifestyle. She received room, board, and a modest monthly stipend. For her final month, the stipend was $198.33.

In her role as a student, her training included both formal religious training for about 20 hours each week and “work practice,” which is considered to be a key part of Zen training and practice, for about 30-35 hours per week. At the Zen Center, “work practice” involved various jobs at the conference center, including front desk duties, cooking, washing dishes, doing laundry, and cleaning guest rooms and bathroom. “Work practice” also included work as a bathhouse attendant, preparing baths for guests, cleaning toilets and showers, sweeping exterior walkways, monitoring bath temperature, and organizing supplies.

After Ms. Lorenzo became an employee, she worked as the assistant to the executive chef, taking inventory, ordering supplies, and preparing lunches for guests, and as a librarian.

Eventually, Ms. Lorenzo was asked to leave her employment. Ms. Lorenzo filed this lawsuit alleging that the Zen Center violated California wage-and-hour laws.

The trial court dismissed Ms. Lorenzo’s case. It ruled that the Ministerial Exception barred the claims, even though no evidence was presented that her claims raised an ecclesiastical concern or that adjudicating them would interfere with internal religious decisions affecting the faith and mission of the religious component of the Zen Center. The trial court said that, though the applicable decisions by the US Supreme Court were limited solely to wrongful termination claims by ministers, a wage-and-hour claim would require the same prohibited judicial entanglement in religious issues. Ms. Lorenzo appealed.

The Court of Appeal reversed. In explaining its decision, the Court of Appeal reviewed the history of the law in this area, including multiple decisions by the US Supreme Court, lower federal courts, and other states.

In 1985, without mentioning the Ministerial Exception, the US Supreme Court ruled in Tony and Susan Alamo Foundation v. Secretary of Labor (1985) 471 U.S. 290, that a religious entity could be required to comply with laws requiring payment of minimum wage and keeping certain records for workers engaged in commercial activities, because they have no impact on the entity’s evangelical activities and do not pose an intolerable risk of government entanglement with religion.

The Ministerial Exception was first mentioned by the US Supreme Court in 2012 in Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC (2012) 565 U.S. 171. It is based on the language in the First Amendment which protects freedom of religion by barring government interference in both the establishment and free exercise of religion. As a specific application of the “Church Autonomy Doctrine,” the Ministerial Exception recognizes that religious organizations should be able to decide matters of governance, faith and doctrine without state interference. Specifically, the government may not interfere with the decision of a religious group to hire or fire a minister, where no improper method of choice is shown.

The Supreme Court expressly limited its 2012 decision to claims by ministers alleging discrimination in the decision to terminate their employment. The Court expressed no view on whether the Ministerial Exception applied to other types of claims, such as lawsuits alleging breach of contract or tortious conduct.

The second US Supreme Court case on the Ministerial Exception was Our Lady of Guadalupe School v. Morrissey-Berru (2020) 591 U.S. 732. The Court ruled that two Catholic school teachers qualified as ministers, despite no clerical training or titles, because they performed vital religious duties, such as educating students in the faith. The teachers’ claims for discrimination in termination were therefore barred.

In the Lorenzo decision, the Court stated that not every employment claim by a minister is barred by the Ministerial Exception. The scope of the Ministerial Exception is limited to what is necessary to comply with the First Amendment, and it only bars employment claims that require inquiry into matters that are strictly a matter of ecclesiastical government. Invoking the Ministerial Exception requires evidence that deciding the claim will involve questions of religious faith or doctrine.

The Court of Appeal concluded that this was not such a case. Claims for not paying minister compensation are permissible, unless the reason for non-payment is religious, as are claims for failure to provide meal periods, rest breaks and overtime pay.

One California case has gone even further. In Sumner v. Simpson University (2018) 27 Cal.App.5th 577, the California Court of Appeal ruled that the Ministerial Exception does not bar a claim for breach of a written employment agreement. The Court said that, by entering into the written contract, the entity had voluntarily circumscribed its conduct so the contract can be enforced without impinging on the entity’s religious autonomy. Courts in at least three other states have reached similar decisions.

In the present case, the Court distinguished minister selection (i.e., hiring and firing) from minister compensation. At least two other states have refused to apply the Ministerial Exception to bar wage-and-hour claims.

Finally, the court discussed the arguments concerning the broader doctrine of “Church Autonomy.” The Church Autonomy Doctrine protects First Amendment values by prohibiting courts from resolving controversies over religious doctrine and practice. To implicate that Doctrine, a threshold showing must be made that the alleged misconduct is rooted in religious belief. The Ministerial Exception is a specific application of the Church Autonomy Doctrine, which is both narrower and broader than the Ministerial Exception. The Church Autonomy Doctrine applies more narrowly because the Ministerial Exception applies regardless of whether the dispute is rooted in religious belief, and the Church Autonomy Doctrine also applies more broadly because the Ministerial Exception applies only to employment discrimination claims asserted by a minister.

Because this decision reversed the granting of defendant’s motion for summary judgment, the case will now proceed toward trial. Defendant is free to make any additional required showings at trial.

For further information on this topic, please contact the author, any member of our Private Education Team, or your regular AALRR attorney.