Few organizations can state the U.S. Constitution protects their existence. But, private clubs can. The First Amendment right to associate freely was established to ensure individuals could join together to further their interests and were guaranteed the right not to associate with others.
The right to include and exclude is what makes private clubs special, and it is what makes your club so meaningful to your members.
As America evolved, courts found this right was also being used to exclude some individuals in a way not in accordance with the Founding Fathers’ perspectives. So, the U.S. Supreme Court defined the parameters of freedom of assembly and focused on creating a balance between the right to chose with whom one would associate and the ability of all to be treated equally.
For Business or Pleasure
To say the least, this was a tough job.
Over time, the Court determined a distinction needed to be made between entities made up of individuals of like interests and those entities formed for business purposes.
Thus, facilities open for business to the public, or “public accommodations,” may not selectively choose whom they will or will not serve. This prohibition is what protects us all from discrimination at your favorite restaurant or local sports arena. Conversely, organizations like private clubs that are not open for business to the public at large are given broader latitude to select who they will serve and how they will serve their members.
Naturally, this distinction is extremely important to our industry. If you are a truly “private” club, then the Constitution allows you to do something that “public accommodations” may not: pick and choose whom you serve and how you serve them, like by having a men’s only grill.
Though some state laws prohibit this kind of selectivity, the reality is the United States Constitution protects our right to do this—as long as we are truly private.
Private Exemptions
Not only does the Constitution provide truly private clubs with much latitude, but also we are exempt from many federal and state laws and regulations.
These exemptions from anti-discrimination laws have the effect of shielding clubs from potentially debilitating liability claims. Without doubt, this is an extremely valuable right afforded to private clubs. And, it is this right that private clubs must work very hard to protect.
So, what does it mean to be truly private?
Unfortunately, no bright-line answers spell out everything a general manager needs to know to ensure his club is truly private. Instead, we have guidelines from an accumulation of state, federal and U.S. Supreme Court decisions. From these rulings we can establish a set of factors courts will use to determine if your club is truly private.
To begin, courts have stated a private club is one organized around a non-business interest enjoyed by its members, such as golf, tennis and other recreational activities. Private clubs are created so members may enjoy sport and relaxation, not to maximize profits. The more a club is seen as involved in a business endeavor, the more the right to associate freely can be questioned and the more your private status can be challenged.
Next, an exclusive, selective membership recruitment process for the club is imperative. Clubs pick who they want as members based on many preferences. If a club allows someone to select it—such as allowing someone to request an application or by advertising club openings on a Web site—then the club begins to lose its exclusiveness and selectiveness.
Private clubs get new members by current members offering candidates for membership. This is an extremely important factor for most courts looking to determine if a club is truly private. If everyone is welcome to apply, even though not everyone will be selected, then nothing is exclusive about your club.
Additionally, a private club must severely limit access to the property by non-members. All clubs allow guests, but this privilege must be limited, and non-members must be prohibited from having unrestricted access to the club. If non-members treat the club as they would any public facility, then your club cannot be seen as private.
Furthermore, a private club should be limited in the size of its membership. If a club says it is private yet allows in three-fourths of the town as members, then the club is no more exclusive than the local public golf course or restaurant. Not everyone may join nor should join.
In general, these above outlined factors are traditionally seen as the most important in proving privacy.
The Courts and Clubs
Even if you satisfy these requirements, a state court judge may still find your club is not private. But, in the end, the right to freely associate is a federal issue.
Though appealing a state court judgment to the federal court system may be expensive, it may be the only way to ensure your rights are protected. In the end, the value and importance to the club may far exceed the costs of the appeals.
Without this extraordinary protection provided by the U.S. Constitution, private clubs are vulnerable to lawsuits from employees, club members and even non-members. Potential liability could be astronomical, and the very existence of a club could be jeopardized if it is found to have lost its private status.
It was this very issue that the U.S. District Court for the Eastern District of Michigan reviewed in 2007, and the case serves as an excellent example of how a court typically examines a club’s private status.
In Bommarito v. Grosse Point Yacht Club (2007 WL 925791 (E.D. Mich. March 26, 2007)), a club employee claimed she was fired in violation of the Americans with Disabilities Act (ADA). She first filed her claim through the Equal Employment Opportunity Commission (EEOC); however, the EEOC refused to investigate her charge because, as a private club, Grosse Pointe Yacht Club was exempt from the ADA.
Ms. Bommarito filed suit in the federal court and argued that, due to its operating practices, Grosse Pointe Yacht Club was not truly private and, therefore, subject to the ADA. The club, in turn, vigorously defended its entitlement to private status.
In analyzing whether the club was truly private, the court analyzed three main factors: (1) the extent the club’s facilities and services were limited to club members and their guests; (2) the extent to which the members’ management of the club controlled the club and its access; and (3) whether the club advertised publicly for new membership or publicly advertised for its services.
The court found the club was indeed private. In its ruling, the court specifically noted Grosse Pointe Yacht Club’s guest policy. Additionally, the court found the club’s 12 directors had exclusive and complete control and all were club members who conducted the club’s business in the best interest of the membership and not for a purely “business” purpose.
Finally, the court noted the club employed meaningful membership selection criteria. No public advertising was done, and the process was exclusive and private to the club. Due to these and other appropriate practices of the club, the plaintiff could not pursue her ADA claim.
In other words, in the event someone decides to sue your club, maintaining your private status will be your most important means for defending yourself.
Unfortunately, claims of negligence or golf ball liability do not hinge on whether a club is private or not. Though they can be damaging to the clubs image and bottom line, they certainly do not have the same impact as, say, a discrimination claim.
Ultimately, private clubs must be wary not to allow themselves to be seen as a public accommodation or their protection under the First Amendment will be gone. Though some of your decisions may not seem like they could ever jeopardize your private status, the reality is that they can.
So, be careful, be aware and work hard to be truly private.
Brad Steele, Esq., is NCA’s vice president of government relations.