Editor’s note: Club Director’s new Legal column will present background on issues important to clubs and is written by NCA Legal Committee attorneys. (Save a little space for a legal disclaimer.)
Can Private Membership Clubs Rely on Their “Exempt” Status in Mandating Vaccinations for Employees, Members and Nonmember Guests?
By Thomas A. Lenz, Esq., Jonathan Judge, Esq., & Ryan L. Kilpatrick, Esq.
As vaccinations are becoming increasingly available, a common question facing employers, private clubs and associations is whether they will make vaccination mandatory as a condition of employment or of access to their workplace or club establishment. In order to safely resume normal club operations, staff, members and guests need to have confidence that club facilities are safe. At the same time, club managers must carefully weigh the pros and cons of any mandatory vaccination policy before rushing to action.
The following article primarily discusses the issues mandatory vaccination policies raise under federal anti-discrimination laws. However, managers should carefully evaluate the legal ramifications of any contemplated policy under all federal, state, or local laws before mandating vaccinations for employees, members or guests as a condition for gaining entrance to club facilities.
Employment Issues
According to the Equal Employment Opportunity Commission’s (EEOC’s) COVID-19 guidance, an employer can support and defend a mandatory vaccination policy as a permissible safety-based qualification standard by showing that an unvaccinated employee poses a direct threat to the health and safety of others in the workplace.[1] However, employers must ensure that any COVID-19 vaccine mandate does not lead to unlawful discrimination against individuals who cannot be vaccinated due to an underlying disability or who object to vaccination based on religious beliefs.
Under the Americans with Disabilities Act (ADA), an individual who has raised a disability-based objection to vaccination cannot be excluded from the workplace (and the employer cannot take other adverse action against the individual) “unless there is no way to provide a reasonable accommodation (absent undue hardship) that would eliminate or reduce the risk, so the unvaccinated employee does not pose a direct threat.” Similarly, under Title VII of the Civil Rights Act, any employee with a sincerely held religious belief, practice or observance that prevents the employee from taking the COVID-19 vaccine must be given an opportunity to seek accommodation before they are excluded from the workplace.
If there is a direct threat that cannot be reduced to an acceptable level, the employer may lawfully exclude the employee from physically entering the workplace, but this does not mean the employer may automatically terminate the worker. Employers must first evaluate whether employees are entitled to any reasonable accommodations that would enable the employee to continue working without posing a direct threat to others, such as a remote work arrangement or a leave of absence.
Members & Nonmember Guests
Requiring members or nonmember guests to be vaccinated in order to enter club facilities presents a different scenario—federal and state employment laws do not apply to nonemployees. However, the anti-discrimination prohibitions of the ADA and Civil Rights Act also apply to places of “public accommodation” (in general terms, “public accommodations” include establishments or facilities which are open to the public).
A “place of public accommodation” is generally prohibited from imposing certain discriminatory qualifications on who may make use of its facilities and/or services. Consequently, policies that tend to exclude nonmember guests or members who are unable to be vaccinated because of a disability or because of a religious objection could raise a potential claim of discrimination under the ADA and the Civil Rights Act. Notably, a place of public accommodation is entitled to impose legitimate safety requirements that are necessary for safe operation. However, where a person is unable to receive a vaccine because of a disability, or because of religious objection, a place of public accommodation will be required to provide a reasonable modification to its policies by, for example, allowing the guest or member to make use of its services and facilities if masked and socially distanced.
Federal Exemptions for Private Membership Clubs
Notably, “bona fide private membership club[s]” are afforded an exemption from the anti-discrimination provisions of the Civil Rights Act and ADA. Both Title VII of the Civil Rights Act and Title I of the ADA provide exemptions from their employment discrimination protections for employees of “bona fide private membership club[s].” Similarly, the facilities of “private club[s] or other establishment[s] not in fact open to the public” are also exempt from the anti-discrimination laws applying to “public accommodations.” However, managers of private membership clubs who prepare vaccination policies without considering anti-discrimination laws do so at their own significant peril. While it is true that both of the Acts discussed above provide exemptions to federal anti-discrimination laws, such exemptions do not guarantee a safe harbor from liability.
Applicability of “Private Club” Exemptions. First, the “private club” exemptions to Title VII and the ADA only apply to organizations that are tax exempt under section 501(c) of the Internal Revenue Code. Moreover, under applicable Internal Revenue Service regulations interpreting section 501(c)(7), this exemption is unavailable to clubs that engage in “business” or whose profits inure to private shareholders.
Second, the courts and the EEOC apply restrictive standards in determining whether clubs qualify as “bona fide private membership club[s]” exempt from federal employment laws and whether an establishment is truly a “private club or establishment” exempt from requirements for public accommodations. Application of such standards to particular clubs is not always easy to predict in advance. For instance, the EEOC provides in its compliance manual that a private club may only qualify as a “bona fide private membership club[s]” if it: (1) is a club in the ordinary sense of the word; (2) is private; and (3) imposes meaningful conditions of limited employment. The EEOC also provides multiple criteria for assessing whether a club is “private” but, notes that none of these criteria is “determinative.”[2] Courts have been equally restrictive in deciding which clubs qualify as “bona fide private membership club[s],” applying such varied criteria as: (1) membership selectivity; (2) membership control; (3) history of the club; (4) the use of facilities by nonmembers; (5) the club’s purpose; (6) whether the club advertises for members; and (7) whether the club is nonprofit.[3]
Notably, these are very fact specific criteria, and a given club’s status under the above standard might come out differently based on the factual circumstances that existed at the time of its inception than it might at later points of time throughout its existence.
Other Federal, State and Local Protections. Furthermore, even if the “private club” exemptions apply, state and municipal laws may provide protections which are identical to, or more extensive, than those provided under the Civil Rights Act or the ADA. Similarly, both state and municipal antidiscrimination statutes may provide protections for private club employees or general members of the public that these federal laws do not, and many such state or municipal statutes contain no comparable “private club” exemptions.
Therefore, managers of private membership clubs must ensure their clubs adhere to the standards of conduct demanded under federal, state and local laws; not only because such practices are fair, but because they are essential to guarding against very real litigation threats that may accrue in their absence.
Thomas Lenz, Esq., and Jonathan Judge, Esq., are partners and Ryan L. Kilpatrick, Esq., is an associate at Atkinson, Andelson, Loya, Ruud & Romo. Lenz also is a member of the NCA board and chairs the Legal Committee. They can be reached at [email protected], [email protected] and [email protected].
Disclaimer: This column is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other National Club Association (NCA) publication does not create an attorney-client relationship. NCA is not responsible for inadvertent errors that may occur in the publishing process.
Footnotes
[1] The EEOC’s COVID-19 guidance states that the COVID-19 pandemic meets the direct threat standard based on CDC and other public health authority guidance as of March 2020. This means that a significant risk of substantial harm is posed by having someone with COVID-19 or its symptoms (or now, presumably, an unvaccinated employee) present in the workplace.
[2] The EEOC suggests in illustrative examples that a golf club in which (1) nonmembers may use the facilities without a sponsoring member paying a fee, (2) applicants for membership need only know one current member, and (3) all applicants for membership have been admitted, is not sufficiently private or selective to qualify as a “bona fide private membership club.” By contrast, the EEOC suggests in a separate illustrative example that a golf club in which: (1) nonmembers may use the facilities only at a member’s request and in his or her presence; and (2) applicants for membership must be 25 years old, have an undergraduate degree and be sponsored by at least five current members, is sufficiently private and selective to qualify under both statutes’ exemptions.
[3] In applying these (and other) criteria, courts have found clubs to be nonexempt under Title VII or the ADA where: (1) they permit guests to have essentially the same privileges as members; (2) their membership criteria are not very selective; and (3) their marketing materials suggest that club facilities are open to the public at large.