Shepherd had a number of views that were criticized as being contrary to the Westminster Standards, and this led him to be dismissed from his post at Westminster. Firstly, Shepherd argued that evangelism should be carried out with covenant in mind rather than election, which will lead the evangelist to say to people, "Christ died to save you." This was criticized as being a denial of limited atonement. Secondly, Shepherd spoke of Christians being justified by "obedient faith," a phrase that was criticized as denying justification by faith alone.
On May 4, 1976, the faculty of Westminster Theological Seminary requested that Shepherd produce a written statement detailing his view of the doctrine of justification sola fide, due to concerns that his teaching on the subject might be out of accord with the Westminster Standards. The controversy over Shepherd's views gradually spread from the seminary to the broader Reformed theological community. Shepherd was repeatedly exonerated by the faculty and board of trustees during their investigation of his views. On November 21, 1981, the board of trustees dismissed Shepherd from his teaching post, expressing a desire to distance the seminary from the intensity and longevity of the controversy.
Jelle Faber, Principal of the Canadian Reformed Theological Seminary, compared Shepherd's dismissal to that of Klaas Schilder, and noted that Shepherd was in agreement with Francis Turretin. Faber also wrote at the time that Westminster had "lost an eminent Reformed dogmatician."
Shepherd's views were also controversial in the Orthodox Presbyterian Church, the denomination in which he was a minister. Shepherd left the OPC and became a minister in the Christian Reformed Church in North America.
- O. Palmer Robertson (2003). The Current Justification Controversy. Trinity Foundation. ISBN 978-0940931633
- Guy Prentiss Waters, "The Theology of Norman Shepherd: A Study in Development, 1963-2006," in The Hope Fulfilled: Essays in Honor of O. Palmer Robertson, pp. 225-226.
- Waters, "Theology of Norman Shepherd," p. 218.
- Waters, "Theology of Norman Shepherd," p. 222.
- Hewitson, Ian (2011). Trust and Obey: Norman Shepherd and the Justification Controversy at Westminster Theological Seminary. Minneapolis, MN: NextStep Resources. p. 40. ISBN 978-0-9118-0283-2.
- Hewitson, Trust and Obey, p. 19.
- Hewitson, Trust and Obey, pp. 90-92.
- Jelle Faber, Shepherd's Concept of the Covenant.
- Jelle Faber, Shepherd's Dismissal from Westminster Seminary.
- David VanDrunen, Justification by Faith In the Theology of Norman Shepherd.