Legal Issues: Spotting and Resolution How to Survive as a Pulpit Rabbi

1. Legal Issues: Spotting and Resolution How to Survive as a Pulpit Rabbi Andrew J. Lauer, Esq. Vice President for Legal Affairs, Secretary and General Counsel Yarchei Kallah March 11, 2010

2. INTRODUCTION • Rabbinic business is more complex today than in the “good old days” • Litigation and regulatory risks are no longer inapplicable to rabbis • Regulators have been investigating not-for-profits • Rabbis, like all professionals, need basic knowledge and understanding of potential legal pitfalls

3. INTRODUCTIONPresentation Overview • Legal Assistance • Obtaining legal assistance for yourself and for your congregants • Potential Legal Issues • Legal issues that might arise as a result of day-to-day interactions with your congregants • Some cases may not seem to be “dangerous” • For example, recommending a shidduch • Protecting Yourself and Your Shul • How to avoid the pitfalls of these types of situations

4. LEGAL ASSISTANCE • Role of “Trusted Advisor” • How to get help once a legal issue arises • Have a network of advisors who can provide specialized advice and refer congregants to them • Connect baal habatim with one another • Connect with other rabbanim and share information/programs • Obtaining Legal Assistance • Who contacts a lawyer (the rabbi or congregant) • What type of lawyer do you contact? • Where to search for legal counsel

5. LEGAL ASSISTANCEWhen Do You Need It? • Types of legal issues that can arise: • Employment • Bankruptcy • Real Estate • Corporate • Investments • Insurance

6. LEGAL ASSISTANCEEmployment Law • Employment Issues: • Reviewing releases • Separation agreements • Severance agreements • WARN notice issues • Unemployment benefits • Unpaid wages owed • Age or religious discrimination • COBRA rights • Reviewing offer letters

7. LEGAL ASSISTANCEEmployment Law (continued) • Termination: • Separation Letter • Severance Package • Release • What to consider: • Act quickly: generally, 21 days to consider the offer and 7 days to revoke it • Are there any causes of action? • Did you get all of the pay due to you? • If there are no legal issues, usually best to sign and get the severance.

8. LEGAL ASSISTANCELayoffs and Unemployment • Layoffs • Federal WARN Act • Applies to employers of 100+ if they will layoff 50+ employees • 60 days notice • New York State WARN Act • Applies to layoffs affecting at least 25 full-time employees representing at least 33% of the workforce. • 90 days notice • Unemployment Insurance • Most individuals who are laid off qualify • Requirements and benefit amounts vary state-to-state

9. LEGAL ASSISTANCEUnemployment and Benefits • Unemployment Benefits: • If your termination is the result of conditions beyond your control, you should apply for unemployment benefits • General requirements: the person lost their job through no fault of their own; are ready, willing, and able to work; and are actively seeking work. • COBRA Benefits: • Requires employers with 20 or more employees offer employees and their families the opportunity for a temporary extension of health coverage • Can be eligible upon termination or even reduction in work hours • More expensive than health coverage of active employees, but less expensive than individual coverage • TARP provides added benefits

10. LEGAL ASSISTANCEOther Legal Matters • Bankruptcy: • The company they worked for went bankrupt • Personal bankruptcy to protect their assets and home • Real Estate Law: • Protecting their homes • Mortgage issues • Property tax issues • Landlord/tenant issues • Corporate Law: • Protecting their company • Setting up an LLC as an independent contractor • Starting up a new business and attracting investors

11. POTENTIAL LEGAL ISSUES • Everyday occurrences that may contain legal dangers: • Shidduch Reference • SORA • Conflict of Interest • Political Endorsements • Discretionary Fund • Governance Issues • Professional Negligence and Insurance • Subpoenas

12. SHIDDUCH REFERENCE • SCENARIO: • You get a phone call from a man asking for information about a congregant for shidduch purposes. You know that the family of the young man in question has some issues which could be cause for concern. You don’t want to lie about the quality of the family, but you are concerned that the family might find out what you said. • Is there a problem with telling him the “issues” that the family has? • How should you be representing the information you give him?

13. SHIDDUCH REFERENCELegal Issues • Defamation • Three Components: • a statement which causes reputational damage • is made to a third party and • something which the speaker knew, or should have known, was false • Slander • Spoken defamation • Vs. “libel” = written defamation

14. SHIDDUCH REFERENCEHow to Avoid Trouble • Truth • You are only in violation if you say something that is false or that you should have known to be false • Opinion • You are entitled to state your personal opinion • Clearly indicate that what you are saying is your personal belief and should not be regarded as fact • Reputation • You can claim that the person already had a bad reputation, and therefore your statements were not the cause of reputational damage

15. SHIDDUCH REFERENCEAdditional Issues • SCENARIO: • You are (or were) the teacher of the young man. The person on the phone asks you about his academic abilities. • Can you discuss this information? • What information are you allowed to give him?

16. FERPALegal Issues • “FERPA” = The Family Education Rights and Privacy Act • Gives students the right to view their educational records • Protects the privacy of students’ educational records • “Educational Records” = • Transcripts and test scores • Disciplinary records • Financial Records • Exceptions (examples): • Parents who want to see their child’s records • School officials using the information for legitimate purposes

17. FERPAHow to Avoid Trouble • FERPA allows for the disclosure of “directory information” • “Directory” (or “Public”) Information = • name, address, telephone number… • Official school activities (clubs, sports etc.) • Dates that the student attended the institution • Major fields of study • Degrees, honors and awards received • Protect yourself by only providing this type of information

18. SORA ISSUES • SCENARIO: • A man has recently moved to your community and joined your congregation and you become aware of the fact that he has been convicted of child molestation. You want to make your congregation aware of this issue, but are unsure if you can openly acknowledge it. • What must you do? • What can you do? • What can’t you do?

19. SORALegal Issues • “SORA” = Sex Offender Registration Act • Convicted sex offenders who are on parole, probation or imprisoned are required to register with the Division of Criminal Justice Services • Mandatory Reporting: • When there is reasonable cause to suspect that a child has been abused, the law requires certain professionals who are in contact with children to report it to the proper authorities • This includes teachers and administrators • Permissible Reporting: • The law allows individuals who have reasonable cause to suspect abuse to come forward in good faith to report it

20. SORA ISSUES Clergy as Mandatory Reporters

21. SORAHow to Avoid Trouble • Law enforcement agencies are charged with compiling a list of “vulnerable organizational entities” • Includes places of worship and schools • What you can do: • Any organization that receives the information from the Division regarding an offender may disseminate that information as they see fit (letter, email etc.) • Synagogues are likely places with vulnerable populations, and will be notified by law enforcement of offenders in the neighborhood • Make sure the information is reliable: i.e. it is from the national sex offender database (NSOPR.gov) or there was a school board notice circulated

22. CONFLICT OF INTEREST • SCENARIO: • Your shul is planning to upgrade its office and will need to buy various office supplies to do so. Since your wife works at an office-supply company, you want to suggest that the shul make its purchases from them. • Does it make a difference if it’s a congregant who works at the supply company?

23. CONFLICT OF INTERESTLegal Issues • Not-for-Profit Corporation Law • Specifies “Fiduciary Duty” • A “Fiduciary” is… • someone with a legal responsibility to the organization • someone authorized by law to make decisions on behalf of the organization • Even if there is no official fiduciary responsibility, a fiduciary has a duty towards an organization that he is affiliated with to represent them in a good light

24. CONFLICT OF INTERESTLegal Issues • Three Fiduciary Duties: • Duty of Care • responsibility to be prudent in the business of the organization • Duty of Loyalty • Can’t let personal interests interfere with the organization’s best interests • This is where there could be a “conflict of interest” • Duty of Obedience • strict adherence to the mission of the organization • Behavior that is consistent with its goals and objectives

25. CONFLICT OF INTERESTAdditional Issues • In addition to being the rabbi of the local shul, you are also a member of the Va'ad Hakashrus in your community. You are considering becoming a part owner of a restaurant which falls under the Va'ad. • Does this example contain a conflict of interest?

26. POLITICAL ENDORSEMENTS • SCENARIO: • Next week is the election for the Mayor of your city. One candidate has publicly stated several policies that would be beneficial to your congregants. As such, you believe that the members of your shul should vote for this candidate. • Can you take a few minutes after your drasha to encourage everyone to vote for him?

27. POLITICAL ENDORSEMENTSLegal Issues • 501(c)(3) Status • Tax-exempt charitable organizations • Internal Revenue Code prohibits such organizations from directly or indirectly participating, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. • Prohibition applies to all campaigns, including campaigns at the federal, state and local level.

28. POLITICAL ENDORSEMENTSLegal Issues (continued) • Types of prohibited activities: • Candidate Endorsements • Contributions to political campaigns •  Distributing statements prepared by others that favor or oppose any candidate for public office • Allowing a candidate to use an organization’s assets or facilities • Potential consequences for violating this prohibition: • denial or revocation of tax-exempt status • the imposition of certain excise taxes

29. POLITICAL ENDORSEMENTSHow to Avoid Trouble • Clearly indicate that comments are personal and are not intended to represent the views of the organization • There is no problem if you are non-partisan • Example: You can invite candidates to speak if you invite all candidates to speak. • Example: You may publicly encourage congregants to vote, but cannot promote voting for a specific candidate

30. POLITICAL ENDORSEMENTSAdditional Issues • Your shul publishes a weekly newsletter. In each issue, you have a column entitled “My Views.” The month before an election, you write in the “My Views” column, “It is my personal opinion that Candidate X should be reelected.” For that one issue, you pay from your personal funds the portion of the cost of the newsletter attributable to the “My Views” column. • Is this okay?

31. DISCRETIONARY FUND • SCENARIO: • You are the rabbi of a shul and your discretionary fund allows you to distribute money to the needy in your community. Recently, another local rabbi was accused of misusing his fund. You want to maintain the confidentiality of the recipients who wish to remain anonymous. • What can you do to protect yourself from suspicion of inappropriate distribution?

32. DISCRETIONARY FUNDLegal Issues • Confidentiality • The recipients of such funds may wish to remain anonymous • You should attempt to maintain transparency while still maintaining the anonymity of the recipients • Taxes • Make sure that funds are being distributed appropriately since contributors receive a tax deduction

33. DISCRETIONARY FUNDHow to Avoid Trouble • Rabbi’s Responsibility • Include a clause in the rabbi’s contract stating that he is responsible for the appropriate distribution of fund monies • Clarify that the fund is a charity of the shul and the rabbi is only responsible for its distribution • Board Responsibility • Define the parameters by which the rabbi distributes these funds • Appoint someone (perhaps the shul president or assistant rabbi) to cosign checks or review the fund’s distribution

34. GOVERNANCE • Speak to president of your shul regarding By-Laws • Attorney General doesn’t care about the size of your institution • Should specify the rules by which your shul board operates

35. PERSONAL LEGAL ISSUESProfessional Negligence and Insurance • Is there such a thing as clergy malpractice? • Do you need Professional Liability Insurance? • Who obtains it (you or your shul)? • What is covered by clergy malpractice insurance? • Directors and Officers Insurance • Protects against claims for violating Duty of Care • Need for it depends on likelihood of such a claim against a board member • Remember that you are a rabbi, not a lawyer • ESPECIALLY if you are a lawyer!

36. PERSONAL LEGAL ISSUES Subpoenas • Requires you to either appear personally, or produce materials or documents • Motion to Quash contains a request to the court asking to modify or terminate the subpoena based on certain objections • Legitimate objections include: • Improper Service of the Subpoena • Scope of Request • Confidential Matters • States differ in who is covered by privilege, and under what situations it applies • Self Incrimination

37. PERSONAL LEGAL ISSUES • Employment Contracts • Termination • Compensation and Expenses • Pensions • Insurance (medical) • Duties/Title • Vacation/Benefits • Restrictive Covenants • Governance Law/Forum • Performance Review • Guidelines and Procedures GET YOURSELF A LAWYER!

38. ANY QUESTIONS?

39. Contact Information Phone: 212-960-0153 Email: andrewlauer@yu.edu Andrew J. Lauer, Esq. Vice President for Legal Affairs, Secretary and General Counsel