177 A.3d 1246
D.C.2018Background
- Rabbi Yehuda Steiner and his wife Rivky were hired by American Friends of Lubavitch (AFL) to run Chabad campus outreach at George Washington University (GW) under a written employment contract signed by the parties.
- The contract contained a broad noncompete (no employment/arrangement with any Chabad or similar institution in DC/MD/VA) and a noninterference clause (conclude GW operations peacefully and not interfere with appellees’ arrangements).
- After a second termination, the Steiners continued outreach at GW under other names; AFL sued for breach of contract and obtained a preliminary injunction restraining the Steiners from certain GW activities and use of Chabad branding.
- The trial court applied equitable reformation to narrow the overbroad covenant, imposing a two-year durational limit, a roughly one-mile geographic limit around GW, and a prohibition on specified activities with currently enrolled GW students; it also enjoined unspecified “interference.”
- On appeal the Steiners challenged jurisdiction, the court’s use of equitable reformation (versus blue-pencil), the breadth/vagueness of the revised injunction (noncompete and noninterference), constitutional claims, and whether Rivky was properly enjoined.
- The D.C. Court of Appeals held the civil courts had jurisdiction under "neutral principles" of contract law, adopted equitable reformation for D.C., but vacated the injunction because the trial court impermissibly expanded the noncompete beyond the contract’s plain organizational/employment scope and left the noninterference clause unclear; remanded for clarification and to consider whether Rivky may be enjoined.
Issues
| Issue | Plaintiff's Argument (Steiner) | Defendant's Argument (AFL/Shemtov) | Held |
|---|---|---|---|
| Subject-matter jurisdiction: may secular court enforce injunction affecting ministerial activity? | Court would impermissibly decide ecclesiastical matters and entangle religion. | Contract is subject to neutral principles; court need only interpret secular contract terms. | Court has jurisdiction; dispute resolvable by neutral contract principles. |
| Doctrine for modifying overbroad covenant: blue-pencil vs equitable reformation | Blue-pencil (delete offending language) or refuse enforcement; courts should not rewrite contracts. | Equitable reformation is appropriate and flexible to make reasonable modifications. | D.C. adopts equitable reformation but cautions against expanding terms; reformation permitted with limits. |
| Scope of revised injunction/noncompete: may court bar personal, non-employee religious activities? | Trial court overbroadly enjoined personal ministerial activities beyond contract language. | Broad clause (“similar work”) supports limiting activities to protect AFL’s interests. | Trial court erred: contract’s plain terms target employment/organizational arrangements; court may not expand covenant to bar personal activities. Geographic/duration limits were acceptable. |
| Noninterference clause & enjoining Rivky Steiner | Clause is vague/overbroad; Rivky was not party to contract and should not be enjoined absent separate analysis. | Clause enforces peaceful wind-down and noninterference; Rivky signed contract with Rabbi. | Clause unclear; remand required to define and assess enforceability. Remand also to decide whether Rivky may be enjoined. |
Key Cases Cited
- Meshel v. Ohev Sholom Talmud Torah, 869 A.2d 343 (D.C. 2005) (civil courts may apply neutral principles to disputes involving religious organizations)
- Jones v. Wolf, 443 U.S. 595 (1979) (neutral-principles approach avoids entanglement in ecclesiastical matters)
- Bible Way Church of Our Lord Jesus Christ v. Beards, 680 A.2d 419 (D.C. 1996) (courts lack jurisdiction when resolution requires ecclesiastical judgment)
- Hosanna–Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171 (2012) (ministerial exception and limits on judicial intrusion into church governance)
- Ellis v. James V. Hurson Assocs., Inc., 565 A.2d 615 (D.C. 1989) (noncompete enforcement approaches; judicial reluctance to rewrite contracts)
- Kedroff v. St. Nicholas Cathedral, 344 U.S. 94 (1952) (courts cannot decide ecclesiastical government matters)
- Kreshik v. St. Nicholas Cathedral, 363 U.S. 190 (1960) (judicial abstention from ecclesiastical disputes)