Masterpiece Cakeshop: A Collision Course of Civil Liberties and Religious Rights

Masterpiece Cakeshop: A Collision Course of Civil Liberties and Religious Rights

The civil liberties of gay couples and the religious rights of a Colorado business owner were recently on a collision course. Then, on June 4, 2018, the U.S. Supreme Court found a detour to avoid the collision…at least for now.

The Court held that, in some instances, a balance must be struck between protecting gay persons in the exercise of their civil rights and the rights of a business owner to express his religious-based objection to gay marriage. The majority of the Supreme Court held that the Colorado commission’s treatment of the baker violated Colorado’s duty under the First Amendment not to have laws or regulations that express an overt hostility to a religion or a religious viewpoint. This case is known as the Masterpiece Cakeshop case.

This case is of special interest to human resources professionals and business owners because the same policy intersection could easily arise in an employment context in Wisconsin. Wisconsin has a law similar to the Colorado law that makes it unlawful to give preferential treatment to some classes of persons in providing services or facilities in any public place of accommodation or amusement because of sex, race, color, creed, sexual orientation, national origin or ancestry. In Wisconsin Statutes § 106.52(3), a person who feels that he or she has been a victim of unlawful treatment under the law may file a claim with the Equal Rights Division of the Wisconsin Department of Workforce Development, the same entity that considers violations under the Wisconsin Fair Employment Act.

In addition, certain Wisconsin employers may have the constitutional protection of the Free Exercise Clause of the First Amendment to the U.S. Constitution. That clause states that “Congress shall make no law . . . prohibiting the free exercise” of religion.

The rights and remedies available to everyone under state and federal law — whether state fair employment or public accommodation laws, or Title VII, the Americans with Disabilities Act, or similar federal laws — often create policy conflicts for employees, employers and businesses in general. The wise HR professional will stay alert to the intersection and potential conflicts that will necessarily arise in the workplace and in the marketplace. For now, the resolution to the underlying policy conflict in Masterpiece Cakeshop between public accommodation rights for gay couples and the religious expression rights of small businesses will need to be addressed another day.

 

Long-Term Care and Insurance Considerations

Long-Term Care and Insurance Considerations

Clients often seek the advice of an elder law attorney regarding the best protection for their assets in the event they need long-term care in a nursing home or assisted living facility. Since Medicare does not pay for long-term custodial care, having enough to pay for several months to several years of care in a facility is a serious concern for many seniors.

If you have minimal assets, you may qualify for Wisconsin’s Medicaid program to pay for care. But what if your assets exceed the limits for Medicaid qualification? Should you purchase long-term care insurance, or a combination of life insurance and long-term care insurance (called “hybrid” policies)? Factors to consider when choosing between the two include your current health status, available financial resources and your risk tolerance.

With traditional long-term care insurance, you will pay a monthly (or sometimes annual) premium. If you end up needing long-term care, the policy pays out a daily or monthly benefit, up to a lifetime maximum. If you never need long-term care, you end up with no return on the premiums you have paid. While this is the nature of many types of insurance (auto, home, term life), some find the “use-it-or-lose-it” strategy difficult to swallow.

As an alternative, some individuals will purchase so-called hybrid policies. These are policies that combine long-term care insurance with permanent life insurance policies that include a savings/investment component that builds over time. If you end up needing long-term care, you withdraw funds from the policy as they are needed, and the insurance company continues to pay for your care when those funds run out. If you never need long-term care, the funds are still available during your lifetime, and if you die without having expended the funds, your heirs receive the funds upon your death.

Typically, it is easier to qualify for hybrid type coverage because traditional long-term care insurance has stricter underwriting requirements and, therefore, the status of your health will be a consideration in which type of product to invest. Affordability may also be a factor. Hybrid policies are paid over a much shorter period of time, so you will not be able to stretch payments out as long as you would with traditional long-term care insurance, which means you will need to consider available resources. Individuals with more substantial resources may wish to look at alternative investments.

You should also inquire as to whether the payments you will be making are tax deductible. Payments for some hybrid products may not be deductible. Finally, be sure to consult with your attorney, accountant, and financial advisor as to the legal, financial, and tax consequences of your purchase before you make your final decision.

 

Vacation Rentals and Restrictive Covenants

Vacation Rentals and Restrictive Covenants

The vacation rental market has exploded in recent years due to the popularity of online sites such as Airbnb, VRBO, and HomeAway.  While these sites have created a booming marketplace for homeowners and renters alike, they have also created a myriad of legal and governmental quagmires.  One of these complex issues is restrictive covenants and land use.

A restrictive covenant is a type of agreement that limits permissible use of land.  Generally, a restrictive covenant agreement is recorded so that potential purchasers of real estate are aware that there are restrictions on what they, as landowners, can or cannot do with the real estate.

In a recent Wisconsin Supreme Court decision, Forshee v. Neuschwander, 2018 WI 62, restrictive covenants that prohibited “commercial activity” were held to be ambiguous and unenforceable.

In the Forshee case, the issue was that the landowners were renting their property to vacationers. The question that the Wisconsin Supreme Court analyzed here was whether the prohibition against “commercial activity” included short-term and long-term rentals. Wisconsin law requires that restrictive covenants must be expressed in clear, unambiguous, and peremptory terms in order to be enforceable. The Court held that the phrase “commercial activity” was susceptible to more than one reasonable interpretation and, therefore, ambiguous.  The Court ultimately decided that prohibition against commercial activity did not preclude either short-term or long-term rentals and the landowners could continue engaging in such activities.

The Forshee case could be setting a larger stage for landowners to have the ability to void any restrictive covenant that is ambiguous. If you own land that has restrictive covenants, you might want to closely examine those covenants as not all of them may be enforceable against you.

For developers, it is in your best interest to review those restrictive covenants again and make sure they are clear and convey exactly what you intend. At minimum, you should review those restrictive covenants that are most important to the development.  Having restrictive covenants drafted right the first time is crucial because subsequent landowners will be bound to the covenants as originally drafted. If the language in the covenants does not clearly convey what the restriction is, that restriction will likely be determined by a court to be unenforceable.

 

I Signed My Will, Now What?

I Signed My Will, Now What?

Completing your estate plan for the first time is a significant milestone.  It means that you have taken an important step forward in planning for your family’s future.  Our clients often breathe a sigh of relief after signing their estate planning documents, knowing the plans they have often long discussed are now finally in place.  However, just because you have signed your documents does not necessarily mean your estate plan is complete.  There are often a variety of tasks we recommend you complete after signing your estate planning documents to ensure your plans are fully realized.

1. Update Your Beneficiary Designations. After signing your estate planning documents, we recommend you review the primary and contingent beneficiary designations you have listed for your (i) life and accidental death insurance policies, (ii) retirement plan, pension plan, 401(k) plan, IRA and profit sharing plans, and (iii) any other contract, annuity, deferred compensation arrangement, policy or plan where a benefit is payable to a named beneficiary upon death. Most of these contract payments pass outside of the provisions of your will or trust directly to the named beneficiary identified in the beneficiary designation form.  This means that simply updating your will or trust does not necessarily change the beneficiary of such contact payments.  It is often necessary to update these beneficiary designations to ensure such payments will be made to your intended beneficiary and coordinated with your overall estate plan.  Your attorney should discuss with you his or her recommendations for updating your beneficiary designations after you complete your estate plan and can often help you to do so if you have any questions.

2. Prepare a List of Tangible Personal Property Bequests. Under Wisconsin law, you can incorporate certain language into your will that allows you the ability to leave a written statement or list disposing of items of tangible personal property at the time of your death. This list is separate from your will, and you can prepare it on your own if you wish.  This provides you with increased flexibility to update such bequests.  The list may only dispose of tangible personal property, such as jewelry, household furnishings, etc., and may not dispose of monetary assets.  To be enforceable, the list must describe the items and their recipients with reasonable certainty, and it needs to be signed and dated by you.  However, if you anticipate any disagreement among the beneficiaries, you can certainly have the list witnessed or notarized.  You may change or revoke the list at any time.  If you choose to prepare a list and decide to subsequently change it, we recommend that you destroy the old list and prepare an entirely new list.  You should always avoid erasing or crossing out prior entries on your list because this can lead to confusion regarding your intentions and possibly compromise the enforceability of the list.

3. Prepare and Maintain a Current List of Assets and Liabilities. We recommend that you regularly maintain a list of all of your substantial assets (home, checking and savings accounts, investments, retirement plans, or otherwise) and liabilities. We also suggest that you maintain a list of your insurance policies, policy numbers, and the name of the agent for each policy.  By regularly maintaining such lists, the person handling your estate will have accurate information regarding your assets and liabilities, and this can significantly increase the ease and efficiency with which he or she can settle your estate.  These lists should be updated at least annually and be kept in a safe and secure location where the person handling your estate knows how to access them.

4. Review and Update Your Estate Plan as Needed. The estate plan which is appropriate for you now may not be suitable years from now. We recommend that you contact your attorney and review your estate plan when any one or more of the following occur (i) when you move from Wisconsin to another state, (ii) when there is a change in your family circumstances (divorce, marriage, death of a child, marriage of a child, new grandchildren, incapacity of spouse or children, etc.), (iii) if there is a significant change in the law which may have an impact on your estate, and (iv) finally, even if you do not have a change in family circumstances or finances, it is advisable to regularly review your estate planning documents to make sure that they are a current statement of your preferences regarding the disposition of your property upon death.

The above recommendations are general tasks that should be completed in most all estate plans.  However, there may also be specific tasks that need to be completed that are unique to your individual estate.  Be sure to discuss with your attorney what tasks need to be completed after your estate planning documents have been signed to ensure your estate plan will fully accomplish your goals.

 

Harassment in the Headlines, Employers in the Headlights?

Harassment in the Headlines, Employers in the Headlights?

It is hard to ignore the daily dose of headlines that assert new allegations of sexual harassment or abuse in American society. While the problem of sexual harassment may be analyzed on many levels – personal, societal, historical, cultural, to name a few – sound legal analysis must not be overlooked by employers and employees when considering specific workplace situations.

When sex harassment occurs in in an employment setting, the conduct is likely addressed by Wisconsin and federal law.  Some forms of harassment may suggest criminal repercussions, although many forms of sexual harassment may not be considered a crime, depending on circumstances.

While all bad behavior in the workplace is inappropriate, not all inappropriate behavior may be contrary to state and federal laws.  Inappropriate conduct may not merely be illegal, it may be bad for business, including lowering employee morale.  The Equal Employment Opportunity Commission (EEOC) states that “workplace harassment affects all workers, and its true cost includes decreased productivity, increased turnover, and reputational harm,” all of which is a drag on productivity.  (Select Task Force on the Study of Harassment in the Workplace; June 2016.)

Given the wide range of sexually inappropriate conduct, it behooves employers and employees to know the law.  Sex harassment is a form of unlawful discrimination based on sex.  Wisconsin defines discrimination because of sex to include implicitly or explicitly making or permitting acquiescence and/or submission to sexual harassment a term or condition of employment.  It is unlawful for an employer to permit conduct that has “the purpose or effect of substantially interfering with an employee’s work performance or creating an intimidating, hostile or offensive work environment.”  Substantial interference with an employee’s work performance or creation of an intimidating, hostile or offensive work environment may be established when the conduct is such that a reasonable person under the same circumstances as the employee would consider the conduct to be sufficiently severe or pervasive to interfere substantially with the person’s work performance or to create an intimidating, hostile or offensive work environment.  Usually the offensive conduct must be unwelcome for the conduct to be deemed unlawful under Wisconsin law.

Federal law is similar to Wisconsin law.  Wisconsin law applies to any employer with one or more employees; federal law applies to employers with 15 or more employees.

What should employers do to protect themselves against conduct by employees that may lead to harassment complaints?

1. Review your harassment policy to make sure it is up-to-date and has been recently communicated to your employees.

2. Conduct harassment training for management and non-management employees if you have not done so within the past year. The EEOC recommends that the training be live and interactive, if possible, or computer-based and interactive if live training is not possible.

3. If applicable, conduct appropriate harassment training for your organization’s board of directors.

4. Analyze whether your organization has been unintentionally tolerating or ignoring an employee who has a reputation for engaging in inappropriate behavior.

5. If the allegations of inappropriate behavior or harassment in your organization are widespread or involve someone high up in the organization, consider outside legal counsel to assist with your investigation. Outside counsel will be able to help you analyze legally sound investigation techniques and what, if any, remedial action should be taken.

In conclusion, it is important to recognize that bad behavior is bad for business, whether or not the conduct is against the law.  Consult with your legal advisor to review whether your harassment policies are up to date and whether key employees in your company should have moral turpitude clauses added to their employment agreements (when there are such employment agreements) to assist the employer in terminating employees who are behaving poorly, even if their conduct does not rise to the level of unlawful harassment under state or federal law.  Seek legal advice promptly if you suspect behavior that may violate state or federal harassment laws.

 

Life Events Require a Fresh Look at Insurance Coverages

Life Events Require a Fresh Look at Insurance Coverages

I recently had the incredibly good fortune of getting married to my wonderful wife, Kat.  In addition to the name, address, and health insurance changes that came with this life event, I volunteered to get our auto and homeowners insurance policies and coverages melded and up to date.  Since I focus my practice on representing injury victims, as we were updating our policies, I kept an eye out for a number of insurance policy issues that I recently came across in my practice.

Arbitration for Underinsured (UIM) and Uninsured (UM) Motorist Coverage

One of the greatest, if not the greatest, protection that an injury victim has is his or her Seventh Amendment right to a jury trial.  If the negligent party’s insurer is unwilling to provide fair and reasonable compensation for the injuries and damage sustained, you can seek recourse from a jury of your peers.  This is also true if the negligent driver does not have sufficient, or any, insurance and you need to make an underinsured or uninsured motorist claim with your own insurance company.

However, the Seventh Amendment protection is disappearing in some automobile insurance policies that include provisions that require arbitration for uninsured and underinsured motorist claims.  As a result, if the injured person and his or her insurance company cannot agree as to whether UIM/UM coverage applies or the amount of damages, rather than a jury of your peers deciding the issues, a group of arbitrators (usually three) decides the issues.

It is easy to pass this issue off as an “only lawyers read the insurance policy” type of issue.  However, depending on the issues and type of injuries, having your claim limited to a three-person arbitration body with limited discovery, limited evidence and limited appellate review could have a huge influence on your injury claim.  Unfortunately, by the time a lawyer reads your insurance policy, it is often after the injuries have occurred, and it is too late for the injured party to make an informed choice.

Breed Restrictions and Limits for Dog Bites

In Wisconsin, there is statutory liability for an owner, harborer and keeper of a dog when a dog bite occurs.  Normally, insurance coverage for this type of incident falls under a homeowner’s or renter’s insurance policy.  Just as all UIM/UM policy provisions are not written the same, not all policy provisions involving dog bite liability are the same.  There are a number of insurance policies in Wisconsin that limit, or completely exclude, coverage for certain dog breeds.

Some insurance policies exclude coverage for bodily injury or property damage caused by what the policy defines as prohibited or excluded breeds of dogs, including mixed breeds.  If not excluded, some policies limit the amount of insurance to an amount that is much lower (e.g. $25,000 or $10,000) than the policy’s normal liability limit.  As such, if you or your family owns a dog, make sure to check your policy for any dog breed restrictions or limitations of coverage.  Fortunately, my new married life includes only a teacup Chihuahua, which I have yet to see listed as an excluded breed.

 

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