FOR YEARS, the National Club Association (NCA) has been educating club leaders about the importance of maintaining a club’s private status. As truly private facilities, clubs are exempt from federal laws that every other business must comply with and are able to establish their own internal policies.
Truly private clubs are exempt from the federal Civil Rights Act of 1964 (CRA). Titles II and VII of the Act specifically indicate that a truly private club has the right to treat individuals using the club and employees working at the club differently than they are treated in places of public accommodation. This is because the club is not a business open to the public. Instead, it is open only to its members and guests for the benefit of those members and guests. These exemptions are extremely important to the existence of private clubs and the private club industry.
While the CRA exemption may be well known, some in the club industry may be less familiar with the same exemption for clubs in the Americans with Disabilities Act (ADA). Under Titles I and III of this law, truly private clubs are also exempt from the requirements that other businesses must meet.
For a club to receive these highly unique exemptions it must strictly conform to some basic requirements. For both the CRA and the ADA, the requirements are the same:
- The club must be truly selective in its membership process;
- The club must be controlled by its membership;
- The club must minimize nonmember use; and
- The club must not advertise for new members or the use of its facility.
Federal court reaffirms ADA exemption
In May, the ADA exemption was validated for clubs that meet their private status requirements. In the recent case Robert Lobel v. Woodland Golf Club of Auburndale, WL 2371789 (D. Mass. 2017), private club leaders were provided additional examples of how best to run their clubs while maintaining private status.
In the case, the Massachusetts club’s leadership had concerns with allowing a guest to use a special cart on the club’s course. After discussions with the member who brought the guest and the guest himself, a decision was made to disallow the use of the cart. In response, the guest initiated action against the club claiming it violated the ADA by refusing him the right to use his cart.
The club responded by claiming it was exempt from the ADA, which the plaintiff disputed. On May 31, 2017, the federal district judge found in the club’s favor.
In the order, the court focused on the four requirements for proving private status.
1. Truly selective membership process
At Woodland, the court found a very selective membership process. To be considered for membership, a candidate must first be approved to receive a membership application. Next, he or she must complete the application and provide two letters of recommendation from other members from the club and three written statements from members indicating why he or she would be a good addition to the membership. Then, a mandatory interview with a current member is conducted as well as a requirement that the candidate provide educational, employment and community involvement information to the club for review. The club’s board then votes on the candidate.
These factors, coupled with the substantial initiation fee and monthly dues and the strict limit on the number of golf members the club would admit, provided the judge with ample evidence to prove the club was truly selective in its admissions process.
The court addressed the fact that not many candidates for admission were rejected, but it downplayed this because of the stringent admissions process and considerable initiation fee. It concluded that if a candidate goes through this arduous process, the board would likely reject few.
2. Club controlled by the members
The court found the members had an ownership stake in the club and that those members voted on club business, including new members and financial issues that impacted the success of the club. In addition, the court stated that the mere fact the club had a general manager who handled the day-to-day operations did not lessen the members’ control of the club.
3. Use of the facilities by nonmembers
Though the club had some nonmember use, the court found it was not enough to impact the club’s private status. Indeed, the court noted that occasional use of the club and its facilities by nonmembers does not cause the club to become a public accommodation.
Specifically, the club had 29 golf events over a two-year period and 23 of those outings were on days when the club was closed. In addition, the club’s banquet and golf course were not open for rent at the whim of the club. Instead, the general manager made the determination of what events would be accepted.
In addition, the club had a very restrictive guest policy that required members to pay a guest fee and accompany their guests while on property. Furthermore, the club limited the number of times a guest could come to the club and it limited the time of day when he or she could be there. Finally, there were limits in place on the total number of guests who could be at the club on any given day.
All of these factors confirmed for the court that the club was mindful of not allowing regular and/or indiscriminate use of its facilities by nonmembers.
4. Advertising for new members or for nonmember use of the facilities
As it reviewed this factor, the court was quick to point out that clubs advertising for new members or advertising to increase nonmember use of the club often fail to meet the requirements of being truly private. As such, those clubs are not entitled to the ADA’s exemption. However, in Woodland’s case, there was no evidence of any plan or effort to actively advertise.
Though the club maintained a public website with a membership tab and a public Facebook page (two items NCA strongly encourages clubs to make accessible to members only), the court found there was no concerted effort to market the club to the general public through them. Furthermore, the club did not provide announcements in public newsletters of club openings nor were there letters sent to prospects or those who might be interested in using the clubs amenities. Thus, it did not advertise in a way to impact its private status.
Lessons learned
The court in the Woodland case has helped to highlight the manner to which a club can operate while still maintaining its private status. As the court’s decision indicates, there was no reason to consider the club as anything other than private.
Though truly private clubs are exempt from the CRA and ADA, it is clear that in today’s climate those exemptions are not always needed. Clubs are more inclusive with a desire to broaden their membership and make the club experience more enjoyable for each member and their family. However, if the need arises and the club is forced to protect itself, these exemptions can mean the difference between significant liability and no liability at all.
As always, the only way a club can avail itself of these protections is by ensuring it does all it can to protect its private status. The time taken to educate the board, members and staff about private status is time well spent—just ask those at Woodland Golf Club of Auburndale.
