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Thanks to whomever posted the OWL guidelines, which are much shorter and succincter than my letter, and yes, the senior minister should be involved, and most definitely the director of religious education. (Sorry--I thought that was obvious.)
Every church has conflicts of some kind, and in every denomination--Methodist, Baptist, or UU--you'll find churches that are themselves dysfunctional in one way or another. Personally, I've never been part of a Unitarian church that, whatever petty feuding might go on between certain members, didn't, as a whole, adhere to the guiding principles of the UUA and take them very seriously. The most important of these is seeing and respecting the dignity and worth inherent in every person, and it's not hard to see that this needs to be a priority for RE teachers.
The situation the LW described is probably pretty damn rare, all things considered, and it would be rarer still for the DRE not to act appropriately in response--the swift actions of our religions education minister would probably be very much the norm. After the incident, everything was absolutely fine. At the end of the year, the kids and their parents wrote us lovely notes--some of them thanking us for making them feel safe and giving them the confidence to talk about things that were sometimes hard to discuss. We knew all the parents very well, and they knew and trusted us--in fact, they usually came in and talked to us at the end of class. It was critical to us to have their trust and support.
That people get into teaching for the absolute wrong reasons happens everywhere, and I'm sure that for every flaky wacko found in a UU church, there are ten with equally freaky ideas teaching Sunday school in Christian congregations. It can be prevented. Instead of slamming the OWL curriculum, get involved--get on your RE or Sunday School committee, volunteer yourself to teach or help in the classroom, and above all, get to know your children's teachers as well as possible. And if a church is too screwed up for you to do this, then leave, but don't blame it on the denomination.