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Archive for November, 2017

California Homeowners’ Associations Must Allow Politicking: SB 407 is Now Law

Posted on: November 22nd, 2017

By: Jeffrey R. Cluett

On September 11, 2017, California Governor Edmund G. (“Jerry”) Brown, Jr. signed into law Senate Bill No. 407, which passed the California Senate and the California Assembly unanimously. SB 407 has been codified as California Civil Code Section 4515.

Prior Protections

California Civil Code Section 5105(a)(2) requires an association to ensure access to common area meeting space, during a campaign, at no cost, to candidates and members advocating a point of view, including views not endorsed by the board.

Similarly, Section 5105(a)(1) requires that if any candidate or member is provided access to association media, newsletters, or websites during a campaign, for purposes related to an election, the association shall provide equal access to candidates and members advocating a point of view, including those that are not endorsed by the board.

Section 4515’s Added Protections

Section 4515 adds to Section 5105’s protections. It bars associations’ governing documents from prohibiting members or residents from assembling or meeting in common areas or a member’s separate interest, during reasonable hours, for purposes related to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes, or for social and educational purposes.  This includes inviting public officials and candidates for office to meet with members, residents, and their invitees, canvassing and petitioning members, and distributing, without prior permission, information about common interest living, association elections, legislation, election to public office, or the initiative, referendum, and recall processes.

It also prohibits a member or resident from being required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy(ies) to use the common area for these activities.

It also authorizes one prevented by an association or its agent from engaging in these activities to bring a civil or small claims action to enjoin the enforcement of a governing document that violates Section 4015. It also authorizes the court to assess a civil penalty of not more than $500.

This law gives community interest associations attributes of public spaces for members, residents, and invitees. Indeed, the Senate Judiciary Committee analogized common areas to public spaces: “Just as with municipalities, CIDs are marked by common areas, be they streets, sidewalks, park, open courtyards, clubhouses, or common rooms.”  According to its author, “SB 407 would protect the political free speech rights of the 25% of Californians that live in common interest developments by prohibiting HOAs from creating community rules that disallow owners or residents from contacting others for the purpose of informing them about any issue that is the subject of public or association legislation of rule-making.”

Unintended Consequences?

While Section 4515 broadens members’ rights to expression, it may open homeowner associations to disruptive or offensive activities. Under Section 4515, a member or resident could hold demonstrations or marches.  Section 4515 appears to say that common interest associations could not prevent them.  While residents may applaud the increased speech and assembly protections, we foresee disputes arising from activity that association members find troubling or even offensive, but which Section 4515 appears to protect.

Beware of Potential Liability

Common interest development associations should ensure that their governing documents comply with Section 4515. If they do not, they should not enforce those provisions that do not comply with Section 4515.

If you have any questions or would like more information, please contact Jeff Cluett at [email protected].

Recent Affirmance of the Going and Coming Rule

Posted on: November 21st, 2017

By: Owen Rooney

In Morales-Simental v. Genentech, California’s First District Court of Appeal affirmed summary judgment for the employer, thus rejecting plaintiff’s attempts to expand on the special errand exception to going and coming rule. (No. A145865). The employee was involved in a fatal auto accident at 3:30 a.m. while driving his personal auto. The employee told the investigating officer he was going to work on his night off to pick up resumes for upcoming job interviews. The employee testified he was going to work to pick up some resumes and personal belongings on his way to visit his grandmother. He also testified that he was going to pick up the resume of his unemployed friend who had allegedly asked for a job recommendation. However, the friend denied this.

One exception to the going and coming rule is if the employee is on a “special errand” at the employer’s behest. Plaintiff argued that because the employee involved in this accident was “a supervisorial employee tasked with hiring” who “had authority to act on [the employer’s] behalf,” he could “request himself to complete a special errand connected” to his task. The court rejected this theory, holding that “such reasoning would expand the special errand rule to allow employees at various levels to request special errands of themselves on behalf of their employers, thereby stripping the employer of the ability to control when it will be liable for an employee’s off-shift activities.”

Plaintiff also argued that the “special errand” exception applied because the employee was sent work emails before the accident, and so may have been coming into work to respond. The court rejected this argument as well because the emails “did not require [the employee] to come in at a specific day or time” – much less 3:55 a.m. when the accident occurred.

If you have any questions or would like more information, please contact Owen Rooney at [email protected].

Farmworker Union Sues to Overturn NC Law That Nixes Dues Checkoff and Voids Agreements Requiring Farmers to Sign Union Contracts

Posted on: November 20th, 2017

By: Paul H. Derrick

For years, the Farm Labor Organizing Committee, a small Ohio-based union that is the only labor organization representing farmworkers in the State of North Carolina, has used actual and threatened lawsuits as a means of getting farmers in the state to voluntarily recognize and bargain with it. The state’s Farm Act of 2017 contains provisions aimed at stopping that coercive tactic, and FLOC is making good on its promise to fight back.

The Farm Act makes it a violation of the state’s public policy for farms, most of which are small, family-owned operations, to collect membership dues from employees and forward them along to a union, even if the union and the farm have executed a collective bargaining agreement that requires such dues collection. The law also makes it a violation of public policy for a union to require that a farm enter into a union contract as a means of settling a lawsuit or avoiding litigation in the first place.

Represented by civil rights lawyers from the American Civil Liberties Union, the Southern Poverty Law Center, and the North Carolina Justice Center, the union and two individual migrant farmworkers, both of whom previously brought legal actions against their non-union employers, have filed a lawsuit in federal court against Governor Roy Cooper and the director of the North Carolina court system. The lawsuit claims that the Farm Act impedes their First Amendment right to participate in union activity and is racially discriminatory (i.e., because most of the state’s farmworkers are Latino). It demands that the court declare portions of the Farm Act to be unconstitutional and also asks that preliminary and permanent injunctions be entered to restrain state officials from enforcing those provisions of the law.

North Carolina farmers employ about 100,000 workers annually, and FLOC claims to have almost 5,000 dues-paying members among that workforce. Because there are no federal or North Carolina laws that give agricultural workers a right to demand a union election, FLOC insists that the only way it can organize workers is by actual or threatened lawsuits over issues such as alleged wage and hour violations, where part of the settlement demanded includes farmers voluntarily recognizing the union as the bargaining representative of their employees and collecting dues from the workers on behalf of the union.

A copy of FLOC’s lawsuit can be found here. We will continue to keep you apprised of developments in this area as they occur. In the meantime, if you have any questions or would like more information, please contact Paul Derrick at [email protected].

You’ve Got Mail! – EEOC Charge Filing Process Is Now Available Online Across the Country

Posted on: November 17th, 2017

By: William E. Collins, Jr.

For many people, “You’ve Got Mail” evokes fun memories of Tom Hanks and Meg Ryan bickering and then falling in love over the internet in the popular 1998 romantic comedy.  Now, however, this phrase may evoke far less pleasant emotions (at least for employers) as the EEOC announced earlier this month that its online Public Portal is available nationwide for employees to file charges.

The EEOC has been working on the roll-out of the Public Portal for years and, after piloting the Portal in the EEOC’s Charlotte, Chicago, New Orleans, Phoenix, and Seattle offices earlier this year, the EEOC has now launched the Public Portal nationwide.  The EEOC anticipates that the Public Portal will streamline the charge process and open up the intake and charge systems to more employees.

Not only can an employee provide and update personal information through the Public Portal, an employee can proceed with the normal intake process.  While the portal will not let employees immediately submit charges, the portal allows an employee to ask the EEOC representatives questions, provide them with information, and upload supporting documentation. At that point, an employee may digitally sign and file a charge online that is prepared with the help of an EEOC representative.

Because the EEOC plans to provide access to charging parties that have charges currently pending and the Public Portal allows instant communication with these charging parties, there is hope that the Public Portal will provide a more efficient and streamlined resolution for the 84,254 charges filed in the Agency’s 2017 fiscal year.  Because, however, the Public Portal provides an additional mechanism that is a faster, more immediate path toward filing a charge, commentators anticipate that employers could see an increase in the number of charges filed with the Agency.

While the exact impact of the EEOC’s Public Portal remains to be seen, employers should take this opportunity to:

  • Review and develop their internal reporting and complaint policies and procedures;
  • Ensure managers and supervisors have received appropriate training; and
  • Ensure key leadership and human resources representatives know what to do if they receive notice of a charge.

If you have any questions or would like more information, please contact Will Collins at [email protected].

En Banc Eleventh Circuit Decision May Substantially Undermine Judicial Estoppel Defense

Posted on: November 17th, 2017

By: William H. Buechner, Jr.

A  decision recently issued by the Eleventh Circuit sitting en banc may substantially undermine the judicial estoppel defense in employment cases.

A judicial estoppel defense may arise in many contexts, but the most common scenario is when the plaintiff files for bankruptcy, denies under oath the existence of any actual or potential claims on the bankruptcy schedules, obtains relief (either a complete discharge or confirmation of a reorganization plan) and then pursues (or continues to pursue) the claims that the plaintiff failed to disclose.  Under circumstances such as these, courts may bar a plaintiff from pursuing these claims, on the ground that such conduct makes a mockery of the judicial system by denying the existence of claims in one judicial forum and then pursuing those claims in another forum.  Courts also recognize that such conduct would permit the plaintiff to enrich himself to the detriment of the plaintiff’s creditors.  We have asserted the judicial estoppel defense successfully to defeat a number of employment claims.

In order to apply judicial estoppel, the defendant must establish that the plaintiff intended to make a mockery of the judicial system.  The Eleventh Circuit previously had held that a district court may infer this intent if the plaintiff knew about the omitted claim and had a motive to conceal it (which the plaintiff almost always does).  In Slater v. United States Steel Corp., 871 f.3D 1174 (11th Cir. 2017) (en banc), the Eleventh Circuit reversed the dismissal of the plaintiff’s race and sex discrimination claims on the ground of judicial estoppel.  In doing so, the Eleventh Circuit overruled the precedent summarized above and held that the court should consider all the facts and circumstances of the case in deciding whether the plaintiff intended to make a mockery of the judicial system. Id. at 1185.  The Eleventh Circuit explained that the district court may consider factors such as (1) the plaintiff’s level of sophistication; (2) whether the plaintiff has corrected the non-disclosures and if, so, under what circumstances; (3) whether the plaintiff informed his bankruptcy attorney of the claim before filing the bankruptcy disclosures; and (4) whether the trustee or the creditors were aware of the claim before the plaintiff amended the disclosures. Id.

In announcing this totality of circumstances approach, the Eleventh Circuit suggested that, if the bankruptcy court allows the plaintiff to re-open the bankruptcy case to disclose the previously omitted claim, this factor may weigh against the application of judicial estoppel. Id. at 1186-1187.  In addition, the Eleventh Circuit resolved an intra-circuit conflict and held that judicial estoppel should not be applied in Chapter 7 cases where the claim belongs to the trustee, unless the trustee (rather than the plaintiff) fails to disclose the claim with the intent to make a mockery of the judicial system. Id. at 1184-1185, 1188 n.16.  Of course, a bankruptcy trustee seldom, if ever, engages in such conduct.

The Eleventh Circuit’s decision follows similar decisions in the Sixth, Seventh and Ninth Circuits, whereas the Fifth and Tenth Circuits continue to hold that the plaintiff’s intent may be inferred if the plaintiff knew about the omitted claim and had a motive to conceal it.  Given this circuit split, it is possible that the Supreme Court may address this issue at some point in the future.

Absent intervention by the Supreme Court, it may be much more difficult for employers in the Eleventh Circuit to prevail on a judicial estoppel defense as a result of the Slater decision.

If you have any questions or would like more information, please contact Bill Buechner at [email protected].