Recent California appellate decisions are reshaping how religious organizations may need to think about wage and hour exposure. Two published opinions—Lorenzo v. San Francisco Zen Center and Ehrenkranz v. San Francisco Zen Center—suggest that the First Amendment’s ministerial exception does not provide blanket immunity from minimum wage and overtime claims simply because a worker qualifies as a “minister.” Instead, courts will examine whether adjudicating the claim would require inquiry into matters of faith, doctrine, or internal church governance. The California Supreme Court has now granted review in Lorenzo, which is likely to provide further guidance on these issues.
Background: The Lorenzo and Ehrenkranz Decisions
Both Lorenzo and Ehrenkranz arose from wage‑and‑hour claims brought by former participants and staff members of the San Francisco Zen Center, a Zen Buddhist training organization that also operates income‑generating activities such as guest accommodations and event rentals. The plaintiffs performed a range of duties, including cleaning guest rooms, kitchen work, guest services, and grounds maintenance, which supported both religious practice and the organization’s commercial operations.
After the Labor Commissioner found the Zen Center and individual defendants liable for unpaid wages, overtime, and penalties, the defendants invoked the ministerial exception as a complete bar to the claims. In Lorenzo, the trial court agreed and granted summary judgment for all defendants. The Court of Appeal reversed, holding that the ministerial exception does not categorically bar wage‑and‑hour claims absent evidence that adjudicating those claims would implicate ecclesiastical concerns. In Ehrenkranz, a different appellate panel reached the same substantive conclusion on the ministerial exception while addressing related procedural issues involving the same organization.
A Narrower View of the Ministerial Exception
At the core of both decisions is a narrower conception of the ministerial exception grounded in the church‑autonomy doctrine recognized by the U.S. Supreme Court in Hosanna‑Tabor and Our Lady of Guadalupe. The California courts emphasized that the exception protects religious organizations from judicial interference in decisions about the selection, supervision, discipline, or removal of ministers. It does not automatically shield religious organizations from generally applicable wage‑and‑hour laws.
Crucially, the courts distinguished wage‑and‑hour claims from termination or discrimination claims. Disputes over minimum wages and overtime for work already performed—particularly work tied to commercial or revenue‑generating operations—do not inherently require courts to resolve matters of faith or doctrine. The burden rests squarely on the religious employer to demonstrate that adjudicating a particular wage claim would intrude upon ecclesiastical governance or religious belief. In both cases, the Zen Center effectively conceded that resolving the claims would not require the court to decide any ecclesiastical issue, a concession the courts found fatal to the ministerial‑exception defense. At the same time, the decisions leave open the possibility that the exception could apply where compensation practices are closely intertwined with religious doctrine, such as vows of poverty or doctrinally mandated remuneration structures.
Procedural Split Adds Uncertainty
Although Lorenzo and Ehrenkranz aligned on the substantive scope of the ministerial exception, they diverged on an important procedural issue. Lorenzo held that each individual or entity found liable “as employers” under Labor Code section 558.1 must independently post a separate undertaking to appeal a Labor Commissioner award, and that failure to do so deprives the court of jurisdiction over their appeals. Ehrenkranz, by contrast, concluded after extensive statutory analysis that the undertaking requirement applied to the employing entity but did not apply to the individual defendants. This split creates uncertainty for both religious organizations and their officers and further underscores the importance of carefully evaluating appellate strategy in Labor Commissioner cases.
Key Takeaways from Lorenzo and Ehrenkranz
Religious organizations operating in California may consider several notable themes arising from these cases:
- Ministerial status alone may not be sufficient. Both courts declined to treat an employee’s classification as a minister as automatically defeating wage‑and‑hour claims. The decisions indicate that courts will look for a concrete showing that adjudication would intrude on ecclesiastical matters, not merely on the worker’s ministerial role.
- The evidentiary record matters. The Zen Center’s effective concession that adjudication would not implicate ecclesiastical issues was central to the outcome in both cases. The decisions suggest that where an organization does seek to invoke the ministerial exception in a wage-and-hour context, the factual and doctrinal basis for that argument will be scrutinized—though the contours of that showing remain in flux pending further appellate guidance.
- Commercial activities present particular challenges. In both cases, the courts focused on the commercial, revenue-generating nature of much of the plaintiffs’ work. Wage claims tied to lodging, food service, events, and facilities maintenance received particular attention as activities not inherently tied to religious doctrine or governance.
- Individual liability warrants attention. The Lorenzo and Ehrenkranz decisions highlight that in addition to employing entity liability, there is potential for personal liability under Labor Code section 558.1, as well as a procedural split between the two decisions regarding undertaking requirements when appealing Labor Commissioner awards.
- The California Supreme Court’s review of Lorenzo is significant. The Court’s forthcoming decision may provide important guidance on the governing standard on the substantive scope of the ministerial exception in wage and hour cases and may also address related procedural questions.
- Because the California Supreme Court has granted review in Lorenzo, the Court of Appeal’s opinion is no longer citable precedent unless otherwise ordered, further underscoring the unsettled nature of this area.
These decisions underscore that the law governing the ministerial exception in wage-and-hour cases is still developing in California. With the California Supreme Court now reviewing Lorenzo—and likely to consider related issues raised in Ehrenkranz—further clarity is on the horizon.
