Four Legal Pitfalls to Avoid This Holiday Season

November 5, 2018 at 9:35 am Leave a comment

Maybe it’s because I’ve seen so many Christmas commercials already that I wouldn’t be surprised if Macy’s announces it is moving its parade from Thanksgiving Day to Halloween Day. Or maybe it’s because I felt the need to tell my wife that she shouldn’t expect a gift- wrapped Mercedes Benz waiting for her in the driveway Christmas morning but here is one man’s opinion as to how to handle some of the unique issues that arise each holiday season. Remember, these are simply my opinions and not a substitute for consulting with your attorney on these matters should they arise.

  1. Better off being Grinch when it comes to the Board. Many credit unions use this time of year to thank their Supervisory and Board of Directors for all the hard work they do. NCUA has consistently opined that only gifts of nominal value can be provided to board members without providing all that much guidance as to what nominal actually means. According to the trusty Merriam Webster Online Dictionary, nominal is defined as something “trifling or insignificant.” My rule of thumb is that when it comes to holiday gift giving, if the gift is something that would entice someone to be a member of your board, don’t do it.
  2. Festivus for the rest of us. This is always a good time of year to brush up on the rules governing religious discrimination. For example, if you let employees take time off for Christmas Eve, you sure as heck better allow employees who don’t celebrate Christmas to take time off for their religious holidays as well. An exception to this rule applies if the employer would suffer a true hardship by permitting the time off. A misapplication of this rule got Comfort Inn Ocean Front sued by the EEOC for religious discrimination. These protections apply to individuals with sincerely held religious beliefs. As the EEOC explains in this useful Q&A, religion extends far beyond the traditional faith. It includes “religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or that seem illogical or unreasonable to others. An employee’s belief or practice can be “religious” under Title VII even if the employee is affiliated with a religious group that does not espouse or recognize that individual’s belief or practice, or if few – or no – other people adhere to it.”As a result, we aren’t far from the day when employees make legitimate claims that they want to have Festivus off. You are better off just having a set number of floating days set aside for religious observance. If you find yourself delving into the merits of an employee’s beliefs, you are making a big mistake.
  3. The time of year to trust but verify. Both state and federal regulators emphasize the need to make employees in sensitive positions take continuous time off so that the credit union has the ability and time to identify maleficence. While both NCUA’s examination guide (Section 4-6 Examiners Guide) and New York’s Department of Financial Services strongly suggest two consecutive weeks must be taken off, anecdotally it seems that only state examiners occasionally are sticklers about the two week requirement. Incidentally, I have reason to believe that the state will be issuing guidance on this issue in the near future. In the meantime, make sure your policy in place mandating at least five days off for your key employees. What’s the holiday tie-in? Because with the end of the year right around the corner you should put those employees who haven’t complied with this requirement on notice that they are expected to do so.
  4. The morning after: Handle the office Christmas party with care. Let’s face it, the only thing more boring than going to a dry wedding reception is going to a dry office holiday party. After all, at the office party there are no family members celebrating the joyous event. New York’s Dram Shop Law actually pretty narrowly describes the circumstances when persons serving alcohol can be liable for subsequent accidents. In addition, New York Courts have been hesitant to impose liability on employers for accidents caused by their drunk employees. But obviously this does not mean that it’s party time. For what it’s worth, if I was organizing an office Christmas party I would (1) have it off the building’s premises so as to remove the threat of host liability (2) I would ask for volunteer spotters who agree to stay sober and make sure things don’t get out of control and (3) I would utilize Uber to offer free rides home to anyone who wants one.There is of course the ever-present danger of sexual harassment. There is no Christmas party exception to its prohibition which is why you can find scores of cases detailing office parties gone wild. In addition, keep in mind that New York law has removed any ambiguity with regard to your credit union’s liability for the acts of third-parties such as your favorite vendor during these get-togethers.

Entry filed under: General, HR, Legal Watch, New York State. Tags: , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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