First it sued its former CEO. Then it said it would seek a negotiated settlement.
But now LifeWay Christian Resources, the Southern Baptist Convention’s publishing arm, appears to be going ahead with a lawsuit against Thom Rainer, its former president and CEO, for violating a noncompete clause in his contract. Rainer, a best-selling author himself, also runs a business called Church Answers.
The back and forth may be part of a bigger problem for the LifeWay board of trustees: the Christian publisher’s steep financial challenges.
Last year, LifeWay announced plans to close all its retail stores and in April said it will cut roughly 10% of its $281.3 million operating budget through staff reductions, a hiring freeze, and salary cuts.
The company cited the coronavirus as contributing to a revenue shortfall of 24% compared with the same period last year, largely due to a sharp drop in bulk orders from churches for resources such as Sunday school curricula, Bible study materials, and Vacation Bible School curricula.
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In addition, LifeWay was exploring the sale of its Ridgecrest Conference Center and Summer Camps near Asheville, North Carolina.
“LifeWay stands to lose tens of millions of dollars of revenue that the organization would normally generate over the summer months from camps, events, VBS, and ongoing curriculum sales,” Ben Mandrell, LifeWay’s CEO, said in a news release at the time. “LifeWay is mitigating these losses as much as possible through various expense reduction plans, including staff reductions and cuts in non-employee expenses.”
The lawsuit against Rainer is likely the fallout of that financial crunch. It alleges that in reneging on his noncompete contract, Rainer caused LifeWay “irreparable harm” and that damages “are not an adequate remedy.”
On Monday (Sept. 28) a lawyer for LifeWay filed a suit in chancery court in Williamson County, Tennessee. It alleged that Rainer had signed a multibook, multiyear agreement with Tyndale, a competing Christian publisher, in violation of a noncompete clause in his contract. (He continues to serve as chief advisory officer at LifeWay until Oct. 30, with a salary and a company car.)
Then on Wednesday, Todd Fannin, chair of LifeWay’s board of trustees, issued an update saying that “both parties are currently exploring the possibility of an agreed upon resolution of the differences.”
But a clerk at the Williamson County court said the lawsuit has not been withdrawn as of Friday afternoon.
And Rainer’s son, Sam Rainer, wrote in a tweet that LifeWay “has gone back on its word and will continue with their lawsuit.”
Please, please pray. I regret to inform you that @LifeWay has gone back on their word and will continue with their lawsuit against @ThomRainer. Will you help? Please sign. https://t.co/dhoYGIIS02
— Sam Rainer (@SamRainer) October 2, 2020
On Thursday, Rainer told RNS he had been returning his salary for the past four months at Mandrell’s request.
Meanwhile, a change.org petition calls on LifeWay trustees to “resolve their conflicts with Rainer out of court.”
Kenneth A. Weber, the lawyer representing LifeWay, did not return repeated phone messages.
UPDATE: On Oct. 6, Lifeway announced that it had reached an out-of-court agreement with Rainer. The agreement requires Rainer to keep the terms of his noncompete contract he had signed after leaving his position in 2018. That means that Rainer, who had signed a book deal with a competing Christian publisher, agreed to refrain from publishing until November 2021, when his noncompete clause with LifeWay expires.
Yonat Shimron is a national reporter and senior editor for Religion News Service.
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7 Responses
WE JUST DON’T GET IT DO WE CHURCH FOLKS? Scripture admonishes us not to drag/air our
“dirty laundry” before a court of “unbelievers.”
Yes, in many cases where it is absolutely necessary
( sexual abuse for one)…we must still be careful.
Could not agree more. We just don’t get it.
Sounds to me like your opinions are about managing perception at the expense of progress and correction.
Non-believers (and/or those injured by the church) might be more inclined to trust with increased transparency. Selective disclosure suggests an unhealthy organization.
Put another way, Christian organizations do not owe outsiders (including non-believers) any explanations or any sort of disclosure. At the same time, those on the outside have no obligation to trust churches and other Christian organizations.
For those in the IT field, take a look at the write-ups that Microsoft, Google and Amazon publish when there is a major outage with their services. They provide very detailed analysis of what went wrong and what they will do to mitigate such a risk in the future. The marketplace demands such transparency, because untrusting customers can take their business elsewhere. Christian organizations (in my opinion) often give themselves much more latitude in regards to what they choose to disclose to the congregation, and the public.
Agree. Completely.
CJ: Lawyers always advise to announce the suit is still on. Sounds like negotiations are still on. On the one hand with months to go could Rainer have deferred some aspects of his new work? Or could his contract have been renegotiated meantime? On the other hand could not LW – and Rainer himself – have seen years ago they didn’t have a spiritually sustainable business model? Is he another Galli at heart? Lead them up the garden path and drop out when things look bad? Did someone else call the shots with him as put-upon figurehead? Sunday schools used to use 30 year old pamphlets handed back in by grateful ex pupils: it meant something that it had meant something to someone before.
An address, “One Lifeway Plaza”, sounds grandiose. Business model problems.
This is the phrase that says it all — “a competing Christian publisher”.