In a new update posted to its website, the New York State Education Department has indicated that it is continuing work on its electronic system for the submission and recording of this year’s required certificates of compliance under Education Law Articles 129-A and 129-B, and the copies of written rules and polices required to be filed this year pursuant to Article 129-B. As before, the Department indicates that once the system is operational, information will be posted on its website on how to access the system and submit the required documentation. As institutions are aware, the statutory deadline for filing certifications, rules and policies is July 1 (though institutions do not risk loss of State funding for failure to file until September 1). However, all documentation must be submitted through the yet-to-be-released electronic filing system, and the Department will not accept, or record as received, hard copy documents or documents submitted via email. Consequently, institutions necessarily find themselves in a holding pattern until further notice.
On June 2, 2016, the New York State Education Department and the New York State Office of Campus Safety published a 52-page joint guidance document (“Guidance”) on New York Education Law Article 129-B (“the Law”), also often referred to as “Enough is Enough.” The Guidance is helpful in that it clarifies previously opaque points in the Law and acknowledges some of the practical problems faced by colleges and universities. The Guidance arrives in time to make adjustments before the July 1, 2016 deadline by which institutions are required to file their relevant policies and procedures with the State Education Department. Among the more interesting points in the 52-page Guidance are the following: When A Report is Received Section 6444(2) of the Law states that every institution must ensure that at the first instance of disclosure of an incident of domestic violence, dating violence, stalking, or sexual assault by a reporting individual, the recipient institutional representative presents the following information:
You have the right to make a report to university police or campus security, local law enforcement, and/or state police or choose not to report; to report the incident to your institution; to be protected by the institution from retaliation for reporting an incident; and to receive assistance and resources from your institution.
According to the Guidance, institutions may instruct employees to carry this paragraph with them for easy access, or, alternatively, allow employees to access the paragraph on a website and provide or read the information to reporting individuals. This second approach is only compliant if the institution trains those who are likely to receive a report on how to access the paragraph online. See pg. 19 of Guidance. An institution also must be neutral when explaining to students their options to notify law enforcement, request the assistance of campus authorities in notifying law enforcement, or to decline to notify law enforcement. See pg. 13 of Guidance. Institutions should review their policies to make sure that policy language discussing reporting options is absolutely neutral – i.e. does not recommend, suggest, or encourage any one option. Repetition of Report to Authorities The Guidance explains that the intent of Subdivision 7 of the Students’ Bill of Rights (the right to repeat an account to as few people as practicable) is to minimize impact so that students will not want to withdraw from the process. Subdivision 7 says “as few as practicable” not as “few as possible,” which, according the Guidance, affords institutions reasonable leeway to ask a student to repeat an account for legitimate reasons. See pgs. 14–15 of Guidance. For example, colleges may ask a student to repeat pertinent portions of an incident in a hearing or to a fact-finder. Emergency Access to Title IX Coordinator While the Law requires that reporting individuals have “emergency access to a Title IX Coordinator or other appropriate official trained in interviewing victims of sexual assault,” the Guidance clarifies that “emergency access” does not mean 24/7 access. See pg. 16 of Guidance. Amnesty The Law requires an assurance that students who make good faith reports of domestic violence, dating violence, stalking, or sexual assault will not be subject to disciplinary action for violations of alcohol and/or drug use policies occurring at or near the time of the reported incident. The Guidance clarifies that the mandatory amnesty provision does not, however, prevent an institution from removing students from clinical or residency programs where a drug or alcohol violation would indicate unsuitability to participate. See pg. 12 of Guidance. Explaining Standards of Proof Institutions are expected to educate students and employees who may receive a report about the differences between standards of proof in the criminal justice system (beyond a reasonable doubt) and the standard of proof used by the institution (preponderance of the evidence). The Guidance points out that SUNY has developed a document that may be helpful in explaining these differences: http://system.suny.edu/sexual-violence-prevention-workgroup/College-and-Criminal-Resource/. Charges The Law states that a student has the right to request that the institution bring disciplinary charges, but the Guidance clarifies that it is within the institution’s discretion to decide whether or not the evidence merits doing so. See pg. 25 of Guidance. Access to Case File The Law states that students have the right to review (and present) relevant evidence in the case file, or otherwise in the possession or control of the institution. The Guidance clarifies that this access requirement means reasonable, in person access at a time, place, and manner determined by the institution. Institutions are not required to provide the parties with copies of the case file. Further, this provision is not a generalized discovery requirement, in that the institution must only provide access to evidence that is “directly relevant to the specific case, as reasonably determined by the institution.” Institutions may restrict access to sensitive information in the file that is not directly relevant to the issues raised, as well as further restrict access if the institution determines that a student and/or advisor is merely engaged in a “fishing expedition.” See pg. 31 of Guidance. Response to Reports The Guidance addresses how charges may be adjudicated. It clarifies that while the Law refers to a “hearing,” institutions may opt for an investigator model in lieu of a traditional hearing format. Therefore, a college or university may rely on an investigator to gather the factual information, conduct interviews, summarize what is credible, and offer a determination as to whether the evidence supports the charges. Section 6444(5) does not require that evidence be offered during a hearing or in the presence of other parties or witnesses. See pg. 27 of Guidance. Advisors of Choice The Guidance contains helpful clarifications on the ability of institutions to place reasonable limits on the role of advisors, including (a) validation of rules restricting advisors from speaking during meetings or hearings; (b) a statement that institutions can prevent advisors from circumventing such restrictions, such as by writing questions that the advisee reads verbatim in real time; (c) authority to remove advisors who violate procedural rules without an obligation to adjourn the hearing or allow the student to replace the advisor; and (d) validation of institutional policies placing reasonable restrictions on scheduling accommodations for advisors (such as limiting requests for delays to allow for scheduling conflicts of advisors to a specified number of business days). See pgs. 28–29 of Guidance. Transcript Notations The Guidance notes that if a court vacates a college’s finding of responsibility for a violation of institutional policy, the corresponding transcript notation must be removed. The Guidance does not address, however, whether a transcript notation may be removed if the parties agree, as a condition of litigation settlement, to vacate a finding of responsibility. See pg. 37 of Guidance. Legal Resources The Law mandates that reporting individuals receive assistance from the institution “in initiating legal proceedings in family court or civil court,” but the Guidance confirms that this does not require that institutions bring actions on behalf of reporting individuals, provide attorneys, or provide actual direct support. Still, institutions should be able to direct individuals to resources. The Guidance cites another SUNY resource page on this topic: http://www.suny.edu/violence-response/. See pg. 18 of Guidance. Student Training The Guidance clarifies that that an institution need only offer onboarding training to all new students, and that there is no requirement, with the exception of student athletes and student leaders, that every student complete training in order for an institution to be in compliance with the onboarding training requirements. The Guidance does, however, prohibit, or at least strongly discourage, the use of online programs as the only component of onboarding training. Relatedly, the Guidance provides welcome flexibility as to the timing of the required training for leaders of student organizations and student athletes (who, unlike other students, must complete training). Specifically, the Guidance allows fall sport athletes to begin competition or student organization officers to begin their service prior to training, with an understanding that they will be trained within a short period thereafter. See pg. 45 of Guidance. Climate Surveys The Law’s climate survey requirement becomes effective in July 2016 and requires institutions to conduct surveys “no less than every other year.” However, the Guidance states that the first climate survey must be completed by July 2017. See pg. 39 of Guidance. Audits The Guidance notes that the State Education Department will conduct random audits, at any time after September 1, 2016, to ensure compliance with the provisions of the Law. See pg. 2 of Guidance. Therefore, institutions should revise policies as needed and review case handling protocols that are impacted by the Guidance.
On May 13, 2016, the U.S. Department of Education’s Office of Civil Rights (OCR) released a Dear Colleague Letter (DCL) addressing a school’s Title IX obligations regarding transgender students, and explaining how the U.S. Department of Education (ED) and the U.S. Department of Justice (DOJ) will evaluate a school’s compliance with those obligations. This DCL comes on the heels of a recent Fourth Circuit Court of Appeals decision discussing whether Title IX requires schools to allow transgender students to have access to restrooms consistent with their gender identities. Title IX of the Education Amendments of 1972 states, “no person shall on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance.” In the DCL, the Departments make clear that they treat a student’s gender identity as the student’s sex for purposes of Title IX and its implementing regulations. Therefore, schools may not treat a transgender student differently from how they would treat other students of the same gender identity. The Departments state that when a student or the student’s parent or guardian (as applicable) notifies the school administration that the student will assert a gender identity that differs from previous representations or records, Title IX requires that “the school will begin treating the student consistent with the student’s gender identity.” The Departments note that Title IX does not impose any type of medical diagnosis or treatment requirement that students must meet as a prerequisite to being treated consistent with their gender identity. The DCL goes on to discuss several areas where schools must provide transgender students with equal access to education programs and activities – “even in circumstances in which other students, parents, and community members raise objections or concerns” – and describes the steps that schools must take to ensure equal access. Some of the highlights from the DCL include:
Safe and Nondiscriminatory Environment – “If sex-based harassment creates a hostile environment, the school must take prompt and effective steps to end the harassment, prevent its recurrence, and, as appropriate, remedy its effects.”
Identification Documents, Names, and Pronouns – “[A] school must treat students consistent with their gender identity even if their education records or identification documents indicate a different sex.” Accordingly, school staff and contractors must use pronouns and names consistent with a transgender student’s gender identity.
Sex-Segregated Activities and Facilities – “When a school provides sex-segregated activities and facilities, transgender students must be allowed to participate in such activities and access such facilities consistent with their gender identity.” The Departments do, however, appear to acknowledge that schools may continue to use students’ legal names on records where such use is legally required.
Restrooms and Locker Rooms – “A school may provide separate facilities on the basis of sex, but must allow transgender students access to such facilities consistent with their gender identity.” “A school may, however, make individual-user options available to all students who voluntarily seek additional privacy.”
Social Fraternities and Sororities – “Title IX does not apply to the membership practices of social fraternities and sororities.” “Those organizations, therefore, are permitted under Title IX to set their own policies regarding the sex, including gender identity, of their members.”
Housing and Overnight Accommodations – “[A] school must allow transgender students to access housing consistent with their gender identity and may not require transgender students to stay in single-occupancy accommodations or to disclose personal information when not required of other students.”
The DCL also addresses gender identity-related issues dealing with athletics, other sex-specific activities and rules, privacy and education records, disclosure of personally identifiable information from education records, disclosure of directory information, and amendment or correction of education records. Both the Education Department and Department of Justice consider the DCL to constitute “significant guidance” and – although it purportedly does not add requirements to existing law – provide information and examples to inform schools about how the Departments evaluate whether covered entities are complying with their legal obligations. Thus, schools must be sure to carefully review the DCL and familiarize themselves with these requirements in addressing issues related to transgender students.
On June 2, 2016, the New York State Education Department published joint guidance from the Department and the New York State Office of Campus Safety that is intended to assist colleges and universities in complying with Education Law Article 129-B (the "Enough is Enough" sexual misconduct legislation). The guidance contains numerous interpretations of specific statutory provisions, many of which are consistent with consensus interpretations among New York institutions since the legislation's adoption, but others of which provide new (and in some cases surprising) leeway to institutions in implementing the statutory requirements and/or appear to create additional obligations in doing so. The guidance is intended to be a “living document,” with the Department indicating that “[a]s we receive additional comments and suggestions, we will work with the four higher education sectors, the Governor, and Legislature to make changes to the guidance as needed to ensure that the intent of the law is met.” We will provide additional information and commentary on the guidance in the near future; in the meantime, the guidance can be found here.
On April 19, 2016, the Fourth Circuit Court of Appeals issued a decision addressing transgender and gender nonconforming students. In G.G. v. Gloucester County School Board the Fourth Court was presented with the question of whether Title IX requires that schools allow transgender students to have access to restrooms consistent with their gender identities. The Fourth Circuit’s Decision In 2015, Virginia’s Gloucester County School Board passed a resolution endorsing a policy that provided male and female restrooms and locker rooms in its schools, but limited their use to those of the corresponding biological gender. The policy also provided that “students with gender identity issues shall be provided an alternative appropriate facility.” The School Board took this step in the face of community opposition to the fact that the high school permitted G.G., a transgendered boy, to use the boys’ restroom for seven weeks. Members of the community appeared at two different public hearings to express opposition to the practice of allowing G.G. to use the boys’ restroom and to express concerns about the privacy of other students and the potential for sexual assaults in restrooms. The American Civil Liberties Union of Virginia brought this case on behalf of G.G. seeking an injunction of the School Board’s policy arguing that the policy violated both Title IX and the Equal Protection Clause. Title IX of the Education Amendments of 1972 states that “no person shall on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance.” 20 U.S.C. § 1681(a). The U.S. Department of Education’s regulations implementing Title IX add that the practice of maintaining separate bathroom and locker room facilities on the basis of sex is not discriminatory as long as facilities are comparable. While Title IX and the regulations have been in place since 1972 and 1980, respectively, the question of how they apply to transgender individuals was not explicitly addressed until recently; in a January 7, 2015 opinion letter the Department’s Office for Civil Rights (OCR) advised that the regulations require that any school receiving federal funding treat transgender students consistent with their gender identities. In its April 19th decision, the Fourth Circuit reversed the District Court’s dismissal of G.G.’s Title IX claim, and held that the United States Department of Education’s “interpretation of its own regulation…is entitled to…deference and is to be accorded controlling weight in this case.” The case was remanded to the District Court for further proceedings. While the Fourth Circuit stopped short of ruling that transgender students have a Title IX right to use restroom facilities consistent with their gender identities, the Circuit’s deference to the Department of Education’s position strongly suggests that Title IX applies to transgender students. Some interested parties, including the ACLU, interpret the Fourth Circuit’s decision as a mandate that all states in its jurisdiction fall in line with the Department of Education’s position; and it is noteworthy that the Fourth Circuit includes North Carolina, which passed a law in March 2016 limiting bathroom access in government buildings (including public schools) to the facility that corresponds to the individual’s physical birth gender. However, while this is a possible result, the implications of the Fourth Circuit decision remain to be fully realized. Implications for Schools in New York It is possible that other federal jurisdictions, including the Second Circuit, will follow the Fourth Circuit’s lead and defer to the Department of Education regulations. It is also possible that some courts will go a step further and on their own find that, independent of the Department’s regulations, Title IX requires that schools permit transgender individuals access to the facilities consistent with their gender identities. In July of 2015 the New York State Education Department (NYSED) published a guidance document consistent with the U.S. Department of Education’s position. It sets forth an expectation that schools in New York ensure that the transgender and gender nonconforming members of their community are not subject to discrimination or harassment. The NYSED guidance document specifically addresses how to handle restroom and locker room access, names and pronouns, and student records. Transgender students’ rights remain an evolving area, but the Fourth Circuit’s April 19th decision indicates that the Department of Education’s interpretation is the standard to which secondary schools and colleges and universities will be held. It is also very possible that the Department of Education Office for Civil Rights (OCR) will focus on transgender and gender nonconformity issues in schools with heightened interest. We encourage clients to reach out to us with questions about this decision and the Department of Education’s expectations.
On March 15, 2016, plaintiffs in the O’Bannon case sought U.S. Supreme Court review of the United States Court of Appeals for the Ninth Circuit’s decision issued in September 2015. In that decision, the Ninth Circuit sided with the NCAA by vacating that portion of the District Court’s ruling that would have required the NCAA to allow member institutions to pay limited deferred compensation to student-athletes for the use of their names, images and likenesses. The Ninth Circuit’s decision did not wholly favor the NCAA, however, as it also upheld that part of the District Court’s ruling that enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance. Reports indicate that the NCAA had earlier requested an extension of time to file its own petition to seek U.S. Supreme Court review and that it continues to consider this option following the O’Bannon plaintiffs’ request.
In December of 2013, New York enacted the Nonprofit Revitalization Act (the NPRA) which impacted all New York not-for-profit corporations as it sought to not only update New York’s Not-for-Profit Corporation Law (NPCL) but it also enacted several measures intended to strengthen the internal controls of nonprofits. The enactment of the NPRA impacted all New York nonprofits, with the majority of not-for-profit corporations taking action to update their by-laws and adopt new conflict of interest and whistleblower policies to comply with the changes to the NPCL.
While the NPRA was heralded as a much needed reform to the NPCL, there have been a number of issues created by the practical application of the NPRA’s measures. These issues have resulted in multiple clarifications to the NPRA, with the most recent being amendments adopted on December 11, 2015, when Governor Andrew Cuomo signed into law three changes to the NPRA (the December Amendments, found at: A. 7641, S. 5870, S. 5868 – A) which became effective immediately.
Among the changes made to the NPCL by the December Amendments, the revisions to several key definitions and provisions related to the conflict of interest and related party transaction rules are likely to have the greatest impact on the regular operations of nonprofits (the text of these revisions can be found in Senate Bill S. 5868-A).
First, the December Amendments broadened the scope of the conflict of interest and related party transaction rules by amending the definitions of "independent director", "relative" and "related party", and at the same time slightly narrowed the scope of these rules with revisions to the definitions of "affiliate" and "key employee". The changes to the definition of "independent director" further expand the classifications of individuals that do not qualify as independent directors to include certain individuals related to the corporation’s outside auditor. In short, any individual who serves as a director of a nonprofit and is, or has a relative who is, "a current owner, whether wholly or partially, director, officer or employee of the corporation’s outside auditor or who has worked on the corporation’s audit at any time during the past three years" is not an independent director.
The definition of "relative" was amended to clarify that domestic partners of a person’s children, grandchildren and great-grandchildren are relatives for purposes of the NPCL, where, prior to the December Amendments, only the domestic partners of the individual in question were included as relatives for purposes of the NPCL. Finally, the definition of "related party" was expanded to include "any other person who exercises the powers of directors, officers or key employees over the affairs of the corporation or any affiliate of the corporation" and such person’s relatives and controlled entities, in addition to the directors, officers and key employees, their relatives and controlled entities, of a corporation and its affiliates.
The scope of the conflict of interest and related party transaction rules were narrowed slightly with the revision to the definition of "affiliate" that eliminated entities under common control of a corporation from this definition. Following the December Amendments, affiliates are limited to "any entity controlled by or in control of" a corporation. Also, the definition of "key employee" was revised to provide that a key employee means any person in a position to exercise substantial influence over the affairs of a corporation as provided under the Internal Revenue Code (IRC) rules and regulations related to excess benefit transactions under IRC Section 4958 "to the extent such provisions are applicable." Many organizations will find this clarifying language helpful because the excess benefit transaction regulations include several classifications of individuals that could be considered as key employees that often have no application to an organization. For example, the IRC regulations include substantial contributors as potential "key employees" and this often has no application to organizations in the context of the NPCL’s conflict of interest and related party transaction rules.
Other changes enacted by the December Amendments that impact the application of the new conflict of interest and related party transaction rules relate to quorum requirements and the ability of an interested director to provide information related to a potential conflict of interest transaction. First, the December Amendments revise the quorum requirements found at NPCL §708(d) to clarify that if a quorum is present for a meeting the quorum will not be broken if a director is required to leave the meeting due to a conflict of interest or related party transaction. Second, the December Amendments revise provisions related to the operations of a corporation’s audit committee (NPCL §712-a(e)) and a corporation’s conflict of interest policy (NPCL §715-a(b)(3)) to provide that, although interested directors cannot participate in deliberations or voting on an interested matter, the Board or audit committee may request "that a person with an interest in the matter present information as background or answer questions at a committee or board meeting prior to the commencement of deliberations or voting related thereto." Finally, the December Amendments revised the annual conflict of interest disclosure statement requirements to provide that these disclosures may be submitted to a designated compliance officer, instead of the corporation’s Secretary.
Similar to the changes impacting the conflict of interest and related party transaction rules, the December Amendments made clarifications to NPCL provisions related to the compensation of directors. The NPRA amended NPCL §514(b) regarding compensation of members, directors or officers, to provide that reasonable compensation may be paid to these individuals but that no person who may benefit from such compensation may be present at or otherwise participate in any board or committee deliberation or vote concerning such person’s compensation. This provision created problems in its practical application with respect to the compensation of directors because if the board of a not-for-profit intended to set a uniform rate for director compensation, under the terms of NPCL §514(b) no director would be able to participate in the decision making process because each person would benefit from the compensation. The December Amendments, amend NPCL §514(b) to clarify that although an individual who may benefit from a compensation decision cannot be present or participate in a deliberation or vote on a compensation award, nothing in NPCL Sections 514(b) or 715(h) [related party transactions] shall be construed to prohibit "a director from deliberating or voting concerning compensation for service on the board that is to be made available or provided to all directors of the corporation on the same or substantially similar terms."
In addition to making numerous changes impacting the conflict of interest, related party transaction and director compensation rules, the December Amendments made several other important changes.
First, the NPRA had changed the traditional committee structure under the NPCL from "standing" and "special" committees, to new classifications of "committees of the board" and "committees of the corporation." The NPRA clearly provided that committees of the corporation did not have any authority to bind the corporation’s board but left ambiguity as to whether non-directors could be elected or appointed to such committees. The December Amendments clarify that non-directors may be elected to committees of the corporation in accordance with a corporation’s by-laws or, if the by-laws are silent, in the same manner as officers of a corporation are elected.
Second, the NPRA created a new requirement that certain corporations must adopt a whistleblower policy and that the whistleblower policy must be distributed to all of the corporation’s directors, officers, employees and volunteers who provide substantial services. Numerous clients have inquired as to whether posting the corporation’s whistleblower policy on their website or in their offices would satisfy this requirement. Fortunately the December Amendments included clarifying language directly addressing these concerns providing that, for purposes of satisfying the distribution requirement, a whistleblower policy may be posted on a corporation’s website or at the corporation’s offices in a conspicuous location that is accessible to employees and volunteers.
Third, the December Amendments extend the effective date of the provision added to the NPCL by the NPRA prohibiting the chair of a not-for-profit from also being an employee of the not-for-profit from January 1, 2016 to January 1, 2017, giving all not-for-profits an additional year to make any necessary changes related to this new prohibition.
In sum, the December Amendments provide a number of helpful clarifications to the changes to the NPCL enacted by the NPRA in addition to several substantive amendments impacting the conflict of interest and related party transaction rules affecting all New York not-for-profit corporations. While most corporations that updated their governing documents to comply with the changes enacted by the NPRA will not require significant, if any, further revisions to these documents; these documents should be reviewed to understand the impact of the December Amendments and whether any updates are required. The December Amendments also serve as a reminder for corporations that have not taken steps to comply with the NPRA that action should be taken as soon as possible to comply with the NPRA’s requirements as more provisions will continue to become effective in the near future.
The situation has become all too familiar: an incident of prurient interest -- whether actual or falsely alleged -- goes viral on social media before university officials can even ascertain the names of the parties involved. Before anyone can take a breath, news vans have encircled the campus, hauling reporters who possess a keen eye for rash judgments and scapegoating, irrespective of that increasingly elusive concept known as truth. One of the most well-known of such incidents was, of course, “Duke lacrosse.” What may be less known is the eloquence with which Duke’s President, Richard H. Brodhead, gave a most instructive post-mortem about the lessons learned:
I’ll end with the deepest lesson this case taught me. When I think back through the whole complex history of this episode, the scariest thing to me, is that actual human lives were at the mercy of so much instant moral certainty, before the facts had been established. If there’s one lesson the world should take from the Duke lacrosse case, it’s the danger of prejudgment and our need to defend against it at every turn. Given the power of this impulse and the forces that play to it in our culture, achieving this goal will not be easy. But it’s a fight where we all need do our part.
The siege on Duke could have easily happened to any higher education institution and has, in fact, happened many times since. Universities earnest in their desire to avoid “instant moral certainty” when faced with the hot lights of the media whirlwind have developed processes and procedures -- “media kits” if you will -- to proactively prepare for such incidents. This preparedness often, and quite wisely, includes a public relations firm that can be on-call when needed. For those institutions with public relations firms on retainer, unintended privilege issues may arise in subsequent litigation. These situations typically play out as follows. The story hits the media. Institutional officials, legal counsel and the public relations firm enter a virtual bunker to plan a cogent strategy. The institution wants the outside world to know of its diligence, legal counsel wants to ensure compliance with investigative legal requirements, and the public relations firm wants to quell the storm while portraying the institution in its best possible light. Intertwined in the bunker discussions are both legal considerations and the compelling public relations considerations. We are, after all, part of the same team, and strict legal compliance makes for good public relations. The problem though is that once legal brings public relations into the fray, communications between the two may lose the cloak of attorney-client privilege. This recently played out in the case of Waters v. Drake, 2015 U.S. Dist. LEXIS 164179 (S.D.N.Y. 2015). In Waters, Ohio State University terminated the Director of its marching band after it had conducted an investigation resulting in a report outlining a “sexualized” culture with the marching band. Litigation ensued, and the plaintiff sought discovery of communications between university counsel and the public relations firm hired by the university to advise it. The university argued that such documents fell within the attorney-client privilege and were therefore immune from discovery. The court flatly rejected this argument, holding:
If … legal counsel involved the public relations firms not as part of his effort to provide legal advice to the University, but as part of an effort to craft announcements which would be more palatable to the media or the public, he was not using the consultants in order to help him as a lawyer, but to help the University as a public institution anticipating a public relations campaign. Under that scenario, sharing otherwise privileged documents with the consultant is a waiver of the attorney-client privilege, and communications directly with the consultant are not privileged at all.
Waters, 2015 U.S. Dist. LEXIS 164179 at **6-7. Although the court eventually denied discovery based on relevance, it reiterated a quote from other cases: “case law makes clear that a media campaign is not a litigation strategy.” Waters, 2015 U.S. Dist. LEXIS 164179 at *6 (internal citations and quotations omitted). Waters is not binding on other jurisdictions, and may be distinguishable on its facts such that the privilege may still apply. What constitutes a “media campaign” may not fit easily into a one size fits all definition. Nonetheless, the holding in Waters is of sufficient concern that it ought to be considered on the front end of a crisis. Moreover, Waters and the cases it cites do not eviscerate the value and importance of public relations firms. Indeed, such firms have a critical role to play in making sure an institution exercises due caution in undertaking a thoughtful investigation in the face of the media and the public at large demanding instantaneous conclusions and punishment. Legal counsel, however, ought to be careful not to discuss legal strategies with their outside public relations advisors that may be relevant to a subsequent lawsuit. Such discussions may well lose the cloak of privilege and thereby find themselves in front of the eager eyes of a plaintiff’s attorney envisioning a hefty payday. See Duke President Shares Lessons Learned, Regrets About Lacrosse Case, Duke Today, September 29, 2007, available at hhtps://today.duke.edu/2007/09/rhb_lawconf.html
On January 26, U.S. District Judge John Lee of the United States District Court for the Northern District of Illinois granted preliminary approval of a new settlement of consolidated class action litigation involving the NCAA and former NCAA student athletes, in which the NCAA agreed to provide $70 million towards concussion research, testing and diagnosis. This settlement is largely a restatement of an earlier proposed settlement that had been rejected by the Court. As part of the original settlement, the NCAA agreed to invest in concussion research and education, and to fund physical examinations, neurological measurements, and neurocognitive assessments of individuals who in the past 50 years competed in contact sports for NCAA member institutions. All of these things were restated in the new settlement, with the addition of a greater emphasis on strengthening game time concussion protocols (“return-to-play” rules) and instruction to begin to notify those former student athletes eligible for neurological testing and assessment. Notably, neither the prior proposed settlement nor the approved settlement shields NCAA member institutions or the NCAA itself from current or future concussion lawsuits. Unlike the NFL concussion settlements in which the NFL directly compensated injured plaintiffs, the money paid by the NCAA goes straight to funding the research, education, prevention and testing discussed above. As a result, student athletes retain the ability to sue the NCAA or their institutions on grounds relating to concussion diagnosis and/or treatment, or lack thereof. In fact, the awareness initiatives funded by the settlement may increase the likelihood of claims, at least in the short run. Relatedly, about one week prior to the announcement of the approved settlement, the “Power Five” NCAA conferences proactively voted to give team trainers and physicians the “unchallengeable” authority to decide whether and when a student athlete should return to competition. This action, while not literally required by the settlement, certainly was a move toward alignment with developing best practices, and offers the potential for prospective liability protection.
As reported in our November 2, 2015 blog post, the present STEM OPT rule which allows F-1 students with U.S. degrees in science, technology, engineering or mathematics (STEM) to extend their optional practical training (OPT) by 17 months was to expire on February 12, 2016 unless the U.S. Department of Homeland Security (DHS) could publish and promulgate a new rule. The present STEM OPT extension rule had been vacated by the U.S. District Court for the District of Columbia in August 2015 for procedural deficiencies in its promulgation, but the court’s ruling was stayed until February 12, 2016 so DHS could publish a new rule for public comment and prevent hardship to the thousands of F-1 students employed in the U.S. on STEM OPT and the companies that employ those individuals. Our November 2, 2015 blog post detailed some of the highlights of DHS’ proposed STEM OPT extension rule which was published for comment in the Federal Register on October 19, 2015. The DHS received an overwhelming 50,000 plus comments to the proposed rule and, a few days before the Christmas holiday, asked the court for a 90-day extension of the existing STEM OPT rule so it could address the comments and begin to train DHS officers on the intended changes to the STEM OPT program. Following additional pleadings by DHS and Washington Alliance of Technology Workers (WashTech) -- the plaintiff in the case that was before the U.S. District Court for the District of Columbia -- the court, last Saturday, delayed its order terminating the STEM OPT rule as of February 12, 2016 and granted the DHS an additional 90 days to revise its proposed STEM OPT rule. The court extended the sunset date of the STEM OPT extension rule to May 10, 2016 and warned DHS that no further extensions would be granted. As a result of this determination, those F-1 student employees with STEM OPT remain authorized to work in the U.S., at least through May 10, 2016. However, WashTech’s counsel has indicated that an appeal of the decision to extend the sunset date by 90 days would be filed with the D.C. Circuit immediately. We will continue to keep you informed of further developments in this matter so you and your employees can plan accordingly.
The Fable Children’s fables are often an overlooked source of wisdom. Take for example Aesop’s 17th century fable “The Monkey and the Cat.” As the story goes, a cat and monkey lived in the same house as pets. The monkey, desiring to eat the chestnuts roasting on the family hearth, dupes the cat into retrieving them by flattering the cat’s greater skill in such matters. The problem for the cat, however, was that as soon as she retrieved the nuts, the monkey would gobble them up, leaving an unfortunate ending:
Now the master came in, and away scampered the rascals, Mistress Cat with a burnt paw and no chestnuts.
Centuries later this fable has morphed into a theory of liability being deployed with increasing fervor by faculty members challenging disciplinary and tenure decisions in the context of employment discrimination cases. The theory is known as “cat’s paw.” What it means in essence is that the faculty member asserts that the discriminatory animus of one colleague (the monkey) should impute liability to an otherwise innocent decision-maker or the university itself (the cat). So, how does a university protect its “paw”? The Fire The cat’s paw theory in discrimination cases slinked its way through the courts for several years with mixed results as to its applicability and scope. In 2011, however, in Staub v. Proctor Hosp., 562 U.S. 411 (2011), the United States Supreme Court, upheld cat’s paw liability in the context of a USSERA claim. As with most things plaintiff, once that mine was opened a crack, legions of gold prospectors (plaintiff-side attorneys) jumped down the shaft digging for otherwise elusive gold. And, some have found it. Relying on Staub, federal courts around the County have applied cat’s paw liability in discrimination cases. The underlying rationale for such liability is that an employer should not be able to “shield itself from liability … by using a purportedly independent person or committee as the decision-maker where th[at] decision-maker merely serves as a conduit, vehicle, or rubber stamp by which another achieves his or her unlawful design.” Siani v. State University of N.Y. at Farmingdale, 7 Supp. 3d 304, 327 (E.D.N.Y. 2014) (internal quotation omitted). Although the law in this area continues to evolve, it has become clear that cat’s paw liability is a theory to be reckoned with in the world of higher education. By way of a basic example, take a garden variety situation where a stipend for additional duties is at stake for a faculty member. The ultimate decision whether or not to grant the stipend is made by a Dean. The Dean bases her decision solely on the recommendation of the Department Chair. However, unbeknownst to the Dean and the University at-large, the Department Chair’s negative recommendation arises out of her unstated belief that the faculty member is simply “too old” for any additional responsibility. Under this scenario, the Department Chair has devolved into the fabled monkey while the Dean and University would be suffering not only from a burnt paw but also the indignity of having to part with its chestnuts in favor of the faculty member. Cat’s paw liability can also be found in disciplinary matters and tenure decision-making. While tenure cases are complex and fact driven, often the key to avoiding liability is whether the University can break a causal connection between the recommendation made by the tainted evaluator and the ultimate decision. For example, in Taleyarkhan v. Trs. of Purdue University, 607 Fed. Appx. 548 (7th Cir. 2015), the federal Seventh Circuit Court of Appeals rejected a faculty member’s attempt at stating a discrimination claim using the cat’s paw theory as a way to challenge research misconduct sanctions imposed by the institution, where an independent committee confirmed the suspicions of misconduct that were raised by the alleged tainted supervisor. Similarly, in Veeramathu v. Bd. of Trustees for Conn. State Univ. Sys., 862 F. Supp. 2d 127, 161 (D. Conn 2012), a federal district court in Connecticut held that the cat’s paw theory was not available in a tenue denial case where the university president engaged in an independent review of the tenure candidate’s portfolio and considered multiple unbiased sources of information in making his determination. In other words, the court held that there was no evidence that the colleague who gave negative evaluations of the plaintiff was the “proverbial monkey” successful in inducing a denial of tenure. Rather, the denial was based on an untainted independent evaluation by the President. Protecting the Paw and Keeping the Chestnuts At the risk of being a connoisseur of the obvious, the best way to defeat cat’s paw liability, particularly in a pre-trial motion, is to be able to prove that our evaluator (e.g., Department Chair, Dean) did not harbor discriminatory animus. In Deger v. University of Cincinnati, 2015 U.S. Dist. Lexis 132756 (S.D. Ohio 2015), for example, an applicant for an assistant professor position could not win on the cat’s paw theory where the record showed that the alleged biased evaluator’s comments were nothing more than an honest evaluation and were not discriminatory at all. But let’s say we can’t prove that our would-be monkey is innocent, how do we win any way? The case law gives us some guidance. As noted by the Fifth Circuit, “collective decision-making” is less susceptible to influence by an individual with a retaliatory motive.” Wu v. Miss. State Univ, 2015 U.S. LEXIS 17354 (5th Cir. 2015) (internal citation and quotation omitted). In Wu, the plaintiff was an assistant professor who alleged, inter alia, that her denial to full professor was the result of race, national origin and age discrimination, as well as retaliation. The primary argument advanced by the plaintiff was that her department chair had retaliatory motives sufficient to establish cat’s paw liability against the university. In rejecting the plaintiff’s argument, the Fifth Circuit noted that the promotion decision involved many levels of review by multiple individuals. At each level, multiple decision-makers for reasons independent of the department chairs’ view recommended against the promotion. Standing in contrast to Wu is Goswami v. Depaul University, 2015 U.S. Dist. LEXIS 5937 (N.D. Ill. 2015), where a faculty member was able to defeat summary judgment in a tenure denial case using the cat’s paw theory. In Goswami, the court was presented with a “leviathan” of a record reflecting a sharply disputed recommendation to deny tenure based on an 11-7 departmental vote. On the facts presented, the professor was able to present just enough evidence that multiple proverbial monkeys in the department influenced the non-biased ultimate decision-maker. In reaching its conclusion, the court noted:
The record in this case proves that academics do not exist in splendid isolation, immune to the provocations and slights to which less Olympian men and women fall prey. But the record is such – perhaps just barely – that a jury must determine what truly underlay the actions and motivations of the parties. As the discussion above and below show, some of the evidence on both sides is problematic.
In a perfect world, tenure recommendations would all be unanimous and the committees that make them would have the diversity of the United Nations. Of course, we do not live in such a world, but that does not mean that we are doomed to try to convince juries that our university presidents were not mere instruments of discriminators in the trenches. Cat’s paw liability can be avoided when the ultimate decision-maker either engages in his/her own independent review or when the committee process is structured in such a way that a biased individual(s) cannot be deemed to have unduly influenced the ultimate decision. The full parameters of cat’s paw liability will be fleshed out as the law further evolves. In the meantime, plainly, no university wants to be the named defendant in the case that stakes out the theory’s outer boundaries. For this reason, counsel should be consulted as early as possible if there is any hint of a flaw in the faculty decision-making process.
Last week, a three-judge panel for the United States Court of Appeals for the Ninth Circuit voted 2-1 to deny the O’Bannon plaintiffs’ petition for a rehearing en banc of the Ninth Circuit’s September 30, 2015 decision on the NCAA’s appeal of the District Court’s 2014 decision.On appeal, the Ninth Circuit had upheld that part of the District Court’s ruling which enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance, but disagreed with that part of the District Court’s decision which would have required the NCAA to permit member institutions to pay deferred compensation to student-athletes in an amount up to $5,000 per year for the use of their names, images and likenesses.While the parties’ next steps in the case are presently unknown, both the O’Bannon plaintiffs and the NCAA could potentially seek U.S. Supreme Court review of the Ninth Circuit’s decision.