Before this case, the high Court had never “had occasion to consider whether this freedom of a religious organization to select its ministers is implicated by a suit alleging discrimination in employment.”  The Courts of Appeals, in contrast, had addressed the issue extensively.

“Since the passage of Title VII of the Civil Rights Act of 1964, 42 U. S. C. §2000e et seq., and other employment discrimination laws, the Courts of Appeals have uniformly recognized the existence of a ‘ministerial exception,’ grounded in the First Amendment, that precludes application of such legislation to claims concerning the employment relationship between a religious institution and its ministers.”

To permit such an action would interfere with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs.  By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments.  According the state the power to determine which individuals will minister to the faithful also violates the Establishment Clause, which prohibits government involvement in such ecclesiastical decisions.

These principles of numerous Courts of Appeals across the country were confirmed by the U.S. Supreme Court in the Hosanna-Tabor Church case, which began when Cheryl Perich was fired.

In Hosanna-Tabor Church, the church was accused of terminating Perich in retaliation for her pursuit of an employment discrimination claim based on her disability — narcolepsy.  While the Court’s decision was clear and unequivocal in its establishment of the ministerial exception, it gave only limited guidance about how courts should decide who counts as a minister.  “We are reluctant, however, to adopt a rigid formula for deciding when an employee qualifies as a minister.  It is enough for us to conclude, in this our first case involving the ministerial exception, that the exception covers Perich, given all the circumstances of her employment.”

Perich had been a teacher at a school that was part of the Lutheran Church-Missouri Synod.  She taught mostly secular subjects but also taught religion classes and attended chapel with her class.  In fact, “. . . her religious duties consumed only 45 minutes of each workday. . . [and] the rest of her day was devoted to teaching secular subjects.”

Under the circumstances established in this case, this was enough to find that Perich qualified as a “minister” and the exception should be applied.

“To begin with, Hosanna-Tabor held Perich out as a minister, with a role distinct from that of most of its members.  When Hosanna-Tabor extended her a call, it issued her a ‘diploma of vocation’ according her the title ‘Minister of Religion, Commissioned’. . .  In a supplement to the diploma, the congregation undertook to periodically review Perich’s ‘skills of ministry’ and ‘ministerial responsibilities,’ and to provide for her ‘continuing education as a professional person in the ministry of the Gospel.’”

The Court further noted, Perich taught her students religion four days a week, and led them in prayer three times a day.  Once a week, she took her students to a school-wide chapel service, and—about twice a year—she took her turn leading it, choosing the liturgy, selecting the hymns, and delivering a short message based on verses from the Bible. During her last year of teaching, Perich also led her fourth graders in a brief devotional exercise each morning.

“In light of these considerations—the formal title given Perich by the Church, the substance reflected in that title, her own use of that title, and the important religious functions she performed for the Church—we conclude that Perich was a minister covered by the ministerial exception.”

Conclusion:

While the Court left open to debate the full parameters of when a church employee will be considered a “minister,” the breadth of the ruling is clear.  “Any suggestion that Hosanna-Tabor’s asserted religious reason for firing Perich was pretextual misses the point of the ministerial exception.  The purpose of the exception is not to safeguard a church’s decision to fire a minister only when it is made for a religious reason.  The exception instead ensures that the authority to select and control who will minister to the faithful is the church’s alone.”

Denise J. Bleau
Ward, Damon, Posner, Pheterson & Bleau
Labor and Employment Attorney at Law
561.842.3000

According to the Court, the Bankruptcy Code does provide protection for actual employees – but not potential employees – of private employers.  The plain language of the statute does not provide a cause of action against private employers for persons who are denied employment due to their bankrupt status.

But if the person filing for bankruptcy is employed a the time of filing the petition, the employee is protected, irrespective of whether the employee works in the public or private sector.  Government and private sector employers are prohibited from discriminating against those persons who are already employees when the bankruptcy petition is filed.

Denise J. Bleau, Esq. 

Manager Litigation Department 

dbleau@warddamon.com

The couple split after 33 years of marriage.  One of the marital assets subject to equitable distribution was funds that the couple had invested with Bernard Madoff.  The couple split their marital assets pursuant to a marital settlement agreement but the former husband kept much of his funds invested in his account with Madoff.  The former wife, who had no desire to continue to invest with the former husband, received her equitable distribution award in cash. 

As is set forth in the opinion of the New York Supreme Court, Appellate Division:

In the amended complaint, the former husband alleges that at the time of their agreement the parties believed that they owned an account (hereinafter referred to as the “Madoff Account”) with Bernard L. Madoff Investment Securities which was their largest asset (purportedly $5.4 million as of the cut-off date). Of $6,618,000 that plaintiff paid defendant pursuant to the 2006 agreement, $2.7 million was attributable to defendant’s share of what the parties believed to be their $5.4 million Madoff Account. This account was titled in plaintiff’s name. Plaintiff alleges that in reality, there was no such account because Madoff was running a Ponzi scheme. . . He also asserts a claim for unjust enrichment/restitution claiming that the former wife has been unjustly enriched based on the mutual mistake concerning the Madoff account and that she should pay the former husband restitution that “would put the parties in the position they intended.

After the Madoff ponzi scheme came to light, the former husband learned that his share of the investment funds were worthless.  The former husband then contacted the former wife, advised her that he had been victimized by the Madoff fraud and filed an action to modify the terms of their marital settlement agreement on the theory that the parties were mistaken as to the existence of the Madoff account.  The former husband is asking a court to require the former wife to turn over to him millions of dollars that she received in cash under the marital settlement agreement.  From the former husband’s perspective, there was a mistake.  From the former wife’s perspective, the former husband made a bad business deal. 

Earlier this year, the New York court of appeal declined to dismiss the former husband’s lawsuit.  The court credited the former husband’s argument (for purposes of evaluating the sufficiency but not the merits of his claims) that the parties were mistaken as to the existence of an account.  According to the former husband, the funds that were available to him were really nothing more than funds deposited by a “more recent investor” in the ponzi scheme. 

There was a dissenting opinion in the court which points out that at the time of the divorce, the amounts invested by the parties could have been withdrawn and, therefore, the mistake upon which the former husband relied did not exist when the parties signed the marital settlement agreement.  The dissent also argued that the approach taken by the court in this unique case undermined the desire to achieve finality in divorce cases.

Marital settlement agreements are subject to the same laws and rules of interpretation as any other contract.  In this case, the former husband is attacking the marital settlement agreement as a contract under a legal doctrine known as mutual; mistake.  While the court of appeals allowed the former husband’s claim to go forward, there has been no ruling on the merits of this case. 

The former husband’s position is that the Madoff account never really existed.  The issue is whether the demise of the account as a result of the fraud which came to light after the divorce was final constitutes grounds to revise the parties’ marital settlement agreement.

Under Florida law concerning contracts and marital settlement agreements, the parties are responsible for evaluating the assets and liabilities that are proposed to be awarded under a marital settlement agreement.   On the doctrine of mutual mistake, Florida courts have said, that the doctrine of mutual mistake was not created to relieve a party of “agreements entered into improvidently”.  The parties’ marital settlement agreement did not provide for the equal distribution of the Madoff account.  It would appear that the former husband chose to continue to invest his funds with Madoff after the divorce.  As stated by the dissenting opinion, “the former husband’s retention of the Madoff account and subsequent losses render this case no different than the legion of cases denying a spouse’s request to open up a divorce settlement where the final value of an asset was not what the parties believed at the time of the divorce.

The marital settlement agreement did not specify how the former husband was to pay the former wife.  Under those circumstances, the former husband may have difficulty when the time comes to try his case.  The former husband could have elected to liquidate the Madoff investment and invest the funds elsewhere at the time of divorce but he elected not to do so.  Are these circumstances much different than a spouse who elects to buy out his or her spouse’s marital interest in a business that later fails?  If the business later fails should that give rise to an action attacking the marital settlement agreement and the equitable distribution award? 

If the former husband is successful, this case will open the door to attacks on other agreements where the parties’ assumptions about the value and quality of assets prove wrong.  As for morals of this story, there are many – too numerous for this venue.

I have drafted many marital settlement agreements, prenuptial agreements, cohabitation agreements and post nuptial agreements and spent hundreds of hours litigating contested cases in Martin, Palm Beach, Broward and Miami Dade counties.  Although much of my practice involves divorce litigation, my ability to negotiate and draft comprehensive and well written agreements is as important to my clients as my skills in a courtroom.  Judges in Palm Beach County like to see qualified and well trained family lawyers in their courtrooms but they would prefer that the cases are settled voluntarily. 

The New York cases discussed here presents what appears to be a unique set of circumstances.  Nevertheless, the implications of this case can be addressed by a comprehensive and well drafted divorce settlement agreement.

Martin Kofsky is a partner with Ward Damon.  He is an experienced family law attorney handling divorce and other family law matters in Palm Beach, Broward and Miami-Dade counties and the treasure coast.

It is a common misperception that salaried employees don’t have to be paid overtime. Unfortunately, that’s not true.

Even though you pay your employees a salary, they may still be entitled to statutory premium pay for hours over forty in a work week. Salary is only part of the equation.

Many employers do not understand that salaried employees are not necessarily “exempt” from the Fair Labor Standards Act’s (“FLSA”) requirement to pay additional compensation when an employee works more than 40 hours in a week.  What determines an employee’s right to overtime compensation depends upon two things: first, whether they are paid on a salary basis, and second, the nature of their duties.  

In fact, overtime liability may present the single greatest risk of litigation to a  Florida  employer simply because South Florida leads the nation in FLSA lawsuit filings. The details of the various actual exemptions to the overtime law that permit employers to avoid overtime are identified in an article by Sally Still “Salaried Doesn’t Always Mean Exempt: How To Break The Bad News To Decisionmakers” from the Thompson Publication, Fair Labor Standards Handbook.  

Follow the link in the highlighted text after this sentence to my recent article explaining that “salary” and “exempt from overtime” are not synonymous, and the discussion of the exemptions from the requirement to pay overtime. Salaried Doesn’t Always Mean Exempt Article

Employers should have periodic audits of their employee’s position descriptions, and actual duties, to assure that they are complaint with this technical law. We can assist with these reviews, and thus help avoid costly lawsuits.

Questions about this overtime law or other employment matters may be answered by contacting Ms. Still at 561-842-3000, or at sstill@warddamon.com.

In a unanimous decision, the US Supreme Court, Justice Antonin Scalia overturned a lower appellate court ruling that had reversed a favorable jury verdict for an employee alleging discrimination based on hostility to his military service. Staub v. Proctor Hospital, No. 09-400, U.S. Supreme Court (March 1, 2011).

THE ISSUE

The issue before the Court was whether an employer may be held liable for employment discrimination based on the discriminatory animus of an intermediate supervisory employee who influenced, but did not make, the ultimate employment decision.

THE FACTS

The facts briefly are as follows. While employed as an angiography technician by respondent Proctor Hospital, Vincent Staub was a member of the United States Army Reserve. Evidence was presented at trial that showed that both his immediate supervisor (Mulally) and Mulally’s supervisor (Korenchuk) were hostile to his military obligations. Mulally gave Staub a disciplinary warning which included a directive requiring Staub to report to her or Korenchuk when his cases were completed. After receiving a report from Korenchuk that Staub had violated the Corrective Action, Proctor’s vice president of human resources (Buck) reviewed Staub’s personnel file and decided to fire him.

Staub filed a grievance, claiming that Mulally had fabricated the allegation underlying the warning out of hostility toward his military obligations. Buck adhered to her decision and terminated Staub.

THE LAW

Staub sued Proctor under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which forbids an employer to deny “employment, reemployment, retention in employment, promotion, or any benefit of employment” based on a person’s “membership” in or “obligation to perform service in a uniformed service,” 38 U. S. C. §4311(a), and provides that liability is established “if the person’s membership . . . is a motivating factor in the employer’s action,” §4311(c).

Staub did not contend that Buck was motivated by hostility to his military obligations, but that Mulally and Korenchuk were hostile, and that their actions influenced Buck’s decision.

A jury found that Staub’s “military status was a motivating factor in [Proctor’s] decision to discharge him,” and awarded $57,640 in damages. On appeal, the Seventh Circuit Court of Appeals reversed, holding that Proctor was entitled to judgment as a matter of law because the decision maker had relied on more than Mulally’s and Korenchuk’s advice in making her decision.

THE RULING

The Supreme Court reversed. Justice Scalia, discussing this as a “cat’s paw” case, held that if a supervisor performs an act that is motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.

The “cat’s paw” reference is noted by Justice Scalia to originate in Aesop’s Fables, where a monkey induces a cat by flattery to pull roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey then makes off with the chestnuts and leaves the cat with nothing. In discrimination cases, the cat’s paw is the action of lower level management (which may be improperly motivated), which then set up the action which the higher level personnel may capitalize on.

In construing the phrase “motivating factor in the employer’s action,” the Supreme Court starts from the premise that when Congress creates a federal tort it adopts the background of general tort law. Intentional torts such as the one here “generally require that the actor intend ‘the consequences’ of an act,’ not simply ‘the act itself.’” Kawaauhau v. Geiger, 523 U. S. 57, 61–62.

The Court held that the Hospital erred in contending that an employer is not liable unless the de facto decision maker is motivated by discriminatory animus. So long as the earlier agent intended, for discriminatory reasons, that the adverse action occur, he has the scienter or improper motivation required for USERRA liability. There was evidence at trial that the actions of these supervisors were motivated by hostility toward Staub’s military obligations, and that those actions were causal factors underlying Buck’s decision.

It was further found that the decision maker’s exercise of judgment does not prevent the earlier agent’s action from being the proximate cause of the harm. In this case, the earlier lesser discipline “set up” the employee for a more harsh discipline on the next “offense” resulting in his termination.

The Court went on to note that the employer’s position would have an improbable consequence: If an employer isolates a personnel official from its supervisors, vests the decision to take adverse employment actions in that official, and then asks that official to review the employee’s personnel file before taking the adverse action, then the employer will be effectively shielded from any and all discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse action. The opinion further stated that a decision maker’s independent investigation, and rejection, of an employee’s discriminatory animus allegations should not negate the effect of the prior discrimination.

Thus, the appellate court was reversed in its finding that the Hospital was entitled to judgment as a matter of law. Both supervisors had acted within the scope of their employment when they took the actions that allegedly caused Buck to fire Staub. The employer was thus liable.

THE TAKE AWAY

As is generally true, this case reflects an employer that did not stick to its knitting, and get back to the basics. There should be policies in place that require reporting of all perceived discrimination, of any kind. There should be a thorough investigation of complaints made. The advice and consent of top management should be involved in potential significant cases (with some reporting mechanism), so someone is “watching the watchers.” Staff should be trained as to employee’s rights. As reflected here, HR personnel may need additional training as well (which may have been this employer’s Achilles Heel).

Whenever an employer is responsible for the acts of others, perhaps deep in its organization, that is a significant source of concern for any employer. How to minimize that threat? Back to the basics.

There are other concerns about this decision, from a legal perspective. This USERRA case did not fall into the standard Tile VII analysis, exactly. However, such details may not affect the actions that prudent employers should take.

If the next employment decision you are about to make ended up in the Supreme Court and on the evening news, would it appear that you did enough? From an employer’s perspective, it’s all about the fundamentals, blocking and tackling, or sticking to one’s knitting.

Questions about this Supreme Court decision or other employment matters may be answered by contacting Mr. Pheterson at 561-842-3000, or at jpheterson@warddamon.com.

On September 30, 2010, the Supreme Court of Florida issued its opinion in
Kaaa v. Kaaa, 2010 Fla. LEXIS 1628 (Fla. Sept. 30, 2010). In Kaaa the Court considered whether the post-marital appreciation of a piece of real property that was purchased prior to marriage was a marital asset subject to equitable distribution.

The Kaaa decision is significant first because of the direction that it provides to trial courts regarding the character and treatment of the post-marital appreciation of pre-marital property. In addition, there is nothing in the Kaaa decision that specifically limits its application to real estate. In that regard, Kaaa may create some tension with existing cases dealing with the marital appreciation of non-marital property.

The second and more practical aspect of Kaaa concerns the importance of prenuptial and postnuptial agreements. For either the couple whose pre-marital home is their single largest asset, or for the couple who may own many homes and other assets subject to equitable distribution, Kaaa speaks to the need to consider and create a plan for the management and disposition of assets in the event of a divorce. Being proactive and stating your wishes clearly provides certain and valuable guidance in the event of a divorce.

The facts of Kaaa are common and unremarkable. Situations like the facts seen in Kaaa are common in Miami-Dade, Broward, Palm Beach and Martin Counties and the results of the Kaaa decision will resonate throughout divorce cases in our region.

Katherine and Joseph Kaaa married in 1980 and resided in a home that Joseph Kaaa purchased about six months before the marriage for $36,500.00. During the marriage, marital funds were used to pay down the mortgage as well as to improve the home by renovating the carport. In addition, the home was refinanced multiple times during the marriage but the wife was never granted an interest in the property. The parties agreed that that the value of the marital home was $225,000 and the remaining mortgage balance was about $13,000. The parties had not entered into a prenuptial or postnuptial agreement so it was up to the court to decide what assets were marital and would be equitably distributed in the divorce.

The trial court found that the marital home itself was the husband’s non-marital real property and that the mortgage balance had been reduced by about $22,000 during the marriage. The court also found that the carport renovation increased the value of the home by $14,000. In its final judgment, the trial court found that the total enhancement in value of the home (the value of the mortgage reduction and the carport), was approximately $37,000 and that this was the amount that was subject to equitable distribution.

The husband was ordered to pay the wife an equalizing payment for her one-half interest in the value of the value of the carport plus the reduction of the mortgage, or about $18,000, for her equitable distribution relating to the marital home. The husband was awarded the home itself. The wife appealed the final judgment of divorce claiming that the trial court’s equitable distribution analysis was wrong.

The wife argued that the trial court made a mistake by not equitably distributing the full value of the appreciation of the marital home because the husband paid the mortgage, insurance and taxes with his income, which was a marital asset. The wife argued that she was entitled to receive an additional $84,160.50 which represented the equitable distribution of her interest in the appreciation of the marital home.

The Florida Supreme Court agreed with the wife, holding that the use of marital funds to pay the mortgage and other expenses associated with the otherwise non-marital real property made the appreciation of the marital home a marital asset that should be equitably distributed.

All equitable distribution analyses begin with the presumption that there should be an equal distribution of marital assets and liabilities. This presumption works like the midpoint on a balance scale. Without evidence that supports a different result, the scale remains in balance – and the distribution of marital assets remains equal. But the court can consider a number of factors and, possibly, shift, the balance in favor of one party or the other.

In Kaaa, the value of the marital home appreciated $188,500.00 during the marriage. Under certain circumstances, the appreciation of a non-marital asset can be included as a marital asset. The appreciation of the marital home in Kaaa was such an asset and the court concluded that the appreciation of the value of the marital home was properly considered a marital asset because marital funds or the efforts of either party contributed to the appreciation.

The rules that emerge from Kaaa are: (i) an asset brought by one spouse prior to the marriage that appreciates during the course of the marriage, solely on account of inflation or market conditions, becomes in part a marital asset, if it is encumbered by indebtedness which marital funds service; (ii) each spouse’s funds are to be considered marital funds, and when marital funds are used to pay the mortgage and other obligations, the appreciation of the asset that occurred during the marriage should be subject to equitable distribution; and (iii) the appreciation in value of the marital home and the marital home itself are, under the circumstances found in Kaaa, to be treated as separate assets. In effect, the home remains the husband’s pre-marital property but the appreciation is a marital asset that has to be divided.

Now that the Florida Supreme Court has decided this issue, the treatment of the passive appreciation of a pre-marital home whose debt is serviced by marital funds will be a marital asset subject to distribution in divorce cases. A prenuptial or postnuptial agreement can be used to contractually determine whether assets are marital or non-marital and whether, as seen in Kaaa, the appreciation of a non-marital asset is a marital asset subject to equitable distribution or not.

Whether divorcing or in need of pre-marital counseling, couples can benefit from the assistance of an experienced divorce, family and marital attorney. Property issues in divorces can become quite thorny. Even where you do not anticipate the accumulation of great wealth during a marriage, there are a number of assets that should be considered as a part of any marital plan. How will you divide your pensions or 401k accounts? How will pre-marital property be treated when such property is encumbered by a loan that is paid for with marital funds? For example, jewelry, boats, cars, timeshares, homes, and other assets that were acquired before marriage but had loans outstanding at the time of marriage could conceivably fall within the reach of Kaaa. You can also contractually determine issues such as alimony in a prenuptial or postnuptial agreement. All couples can benefit from effective prenuptial or postnuptial planning with the assistance of an experienced family law attorney.

Florida marital and family law is constantly changing. There will be more to come on this and other issues concerning Palm Beach, Broward, Miami-Dade and Martin County divorce and family law matters.

A Florida appellate court held that the denial of the right to volunteer in a school as a mentor, after, and separate from, the employee’s termination, may be the subject of a suit for retaliation under Title VII.

The question – Does an ex-employee’s status as a non-paid volunteer disqualify her from raising a Title VII claim, or is she able to establish that material adverse action had been taken against her, even though it was only a volunteer position.

The Court found that Appellant’s status as a former employee qualifies her for Title VII protection from her former employer’s allegedly retaliatory postemployment actions in Gates v. Gadsden County School Board, 2010 Fla. App. Lexis 12162; 35 Fla. L. Weekly D 1865, (Fla. 1st DCA) August 18, 2010.
Gates (Appellant) was a schoolteacher in the Gadsden County School District who resigned from her teaching position. She filed a Title VII claim against her former employer. Despite her resignation, she continued to participate in a volunteer mentoring program within the School District. After her resignation, the School Board prohibited her from continuing as a volunteer. She sued, claiming the School Board violated the “anti-retaliation arm of Title VII” by taking “adverse action” against her when it barred her from the mentor program.

The School Board won at the trial level, as the court found (1) As a volunteer, Appellant could not maintain a claim under the Title VII anti-retaliation provision; and (2) Appellant was unable to demonstrate the School Board took “materially adverse employment action” against her. Summary judgment was entered for the employer.

The appellate court reversed, holding, “As to the first point, the circuit court was correct in finding volunteers do not qualify for protection under Title VII. However, Appellant is a former employee, and former employees enjoy Title VII protections where they can establish the requisite elements of a claim. Therefore, her volunteer status is irrelevant to this point.”

The appellate court found that Gates, as a former employee, may have been retaliated against, which violated Title VII. The court found, “Because Appellant is a former employee who allegedly suffered adverse, retaliatory action as a result of her filing a Title VII claim against her former employer, she is entitled to seek protection pursuant to the Title VII anti-retaliatory provision. Accordingly, the trial court erred in determining Appellant could not, as a matter of law, maintain a Title VII anti-retaliation claim.”

The message from this case is clear. Yogi was right on the money. It ain’t over til’ it’s over. Even after an employee has been terminated, an employer must be cautious as to the actions taken against an employee who has claimed discrimination.

Although it may not seem logical to managers, the reach of this anti-retaliation protection is a long one. Care should be exercised, and employers should consult with their human resources personnel or legal counsel before acting against terminated employees who have some measure of protection as they have filed a charge of discrimination with the EEOC, the Florida Commission on Human Relations or some other enforcement agency.

Link to case:

http://opinions.1dca.org/written/opinions2010/08-18-2010/09-3636.pdf

Denise J. Bleau, Esq.

Employers defending FLSA lawsuits brought under the Fair Labor Standards Act (FLSA) need the help of an experienced FLSA lawyer to defend lawsuits filed in Palm Beach, Broward, Miami-Dade and Martin County, Florida. Depending upon the kind of business that they are in, employers may have different obligations under the FLSA. For example, the obligations of a transportation company under the FSLA may be different from the obligations of a municipality or a hotel under the FSLA.

Employers or companies that provide local transportation for tourist or visitors from out of state should be aware of recent developments in the overtime laws.

In an action alleging violations of the overtime pay provisions of the Fair Labor Standards Act by an airport shuttle driver, the federal Eleventh Circuit Court of Appeals upheld a ruling in favor of the employer, finding that the airport shuttle van drivers were exempt from, or not covered by, the overtime provisions of the law. Abel v. Southern Shuttle Services, http://caselaw.findlaw.com/us-11th-circuit/1538787.html?DCMP=NWL-pro_11th 

The FLSA exempts from the overtime pay requirement any employee for whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of the Motor Carrier Act (“MCA”) exemption.  The key to this exemption is whether the Secretary has the power to regulate, not on whether the Secretary has actually exercised such power. 

There are two requirements for an employee to be subject to the motor carrier exemption:  (1) his employer’s business must be subject to the Secretary of Transportation’s jurisdiction under the MCA; and (2) the employee’s business-related activities must directly affect the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the MCA.

Under certain circumstances, purely intrastate local transport of passengers to and from an airport may constitute interstate commerce and thus bring the transportation company within the jurisdiction of the Secretary of Transportation.  The Court in Abel v. Southern Shuttle Service concluded that this was such a case.

“Many of Southern Shuttle’s passengers to and from the airport have either just flown from, or are about to fly to, places outside the state of Florida.   A large portion of Southern Shuttle’s reservations are made via travel websites on the internet.   Travelers buy package deals from these internet travel companies that include hotel accommodations and airfare in addition to transportation to and from the airport.   The internet travel companies provide their package-deal customers with a voucher for free airport transportation, which the customers use to board Southern Shuttle’s airport shuttles.   Southern Shuttle then uses the collected vouchers to invoice the internet travel company for payment.   In other words, Southern Shuttle’s local transport of these package-deal travelers has a ‘practical continuity of movement’ with the overall interstate journey.”

Furthermore, Southern Shuttle’s arrangement with internet travel companies to provide airport shuttle service for their package-deal customers meets the “common arrangement” requirement discussed in prior case law. “Indeed, Southern Shuttle’s voucher system resembles in many respects the voucher system the bus company used for cruise ship passengers.” 

Finding that the second requirement was satisfied as well – that Abel “engaged in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the Motor Carrier Act” the Court concluded that the exemption applies.

As an experienced FLSA attorney, Denise Bleau has successfully defended employers against many different claims under the FLSA in and around Palm Beach County, Broward County and Miami-Dade County.

Michael J Posner

            The Florida legislature recently added a new weapon in the arsenal of homeowner associations collecting delinquent accounts. Florida Statute §720.3085(8) provides:

If the parcel is occupied by a tenant and the parcel owner is delinquent in paying any monetary obligation due to the association, the association may demand that the tenant pay to the association the future monetary obligations related to the parcel. The demand is continuing in nature, and upon demand, the tenant must continue to pay the monetary obligations until the association releases the tenant or the tenant discontinues tenancy in the parcel. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the parcel owner.

            The purpose of the new law is to prevent homeowners from avoiding payment of Association assessments while collecting rent from a tenant residing within the community. The law requires the Association to notify the tenant in writing of the demand for the assessment which demand will specifically state that it is an ongoing or continuing obligation and that if the tenant fails to pay the applicable portion of the rent to the Association to pay the assessment then due, the Association has the right, under the new statute, to evict the tenant from the property.  A sample demand letter is as follows (be sure to send a copy to the owner as well):”

            We represent XXX Association in connection with the past due assessments owed by your landlord for the above reference property.  Pursuant to Florida Statute §720.3085(8) this letter shall serve as formal written demand for you to pay all future rent to the Association to cover the past due assessments, fees and costs of $_________ due, as well as payment of future assessments of $___________ per _______ commencing ______________, 2010 until otherwise notified.

            Should you fail or refuse to make such payments to the Association, you will be considered in default of your obligations and the Association may pursue eviction so as to terminate your possession of the property in accordance with Florida Statute §720.3085(8).  If you make the required payment due herein, we will, upon request, provide you with written receipts for payments made to the Association.

            Your assistance and cooperation are greatly appreciated and if you have any questions please feel free to contact the undersigned.

            One issue unaddressed by the new statute is whether the claim against the tenant is only for assessments that are coming due at the same time as the rent. Until this issue is addressed we are seeking all past due balances from the tenant but there is a possibility that a court could determine that in the future an Association may only collect from the tenant the current Assessment from the rent that is being paid.

            With this new mechanism Associations have another avenue to seek collection. So far our experience been very positive with this new statute, as tenants do not wish to be evicted from their premises and as long as the Association agrees to protect the tenant from backlash from the owner, most tenants will readily cooperate with the Association in this collection effort.

Can parties to a Florida Contract agree in advance to subject a non-Florida-resident to the jurisdiction of the Florida courts in the event of a dispute?  The answer is YES, provided that the requirements of Sections 685.101-102 of the Florida Statutes are met.  These statutes, enacted in 1989, are satisfied if the Contract between the Florida resident and the non-Florida resident:  (1) provides that Florida law applies to the transaction; (2) provides that the non-resident expressly agrees to submit to the jurisdiction of the courts of Florida; (3) involves consideration of not less than $250,000; (4) does not violate the United States Constitution (primarily as to due process concerns); and (5) either bears a reasonable relationship to the State of Florida or one of the parties to the Contract is residing or organized in Florida.

Companies hoping to negotiate a Florida contract containing jurisdiction, venue, and choice of law provisions that will be entered into by non-resident persons or entities should keep the above-noted statutory requirements in mind.  Provisions of this type are preferred by business in Florida, so that, if a dispute arises, it will be resolved where the company does business—here in Florida, and not where the non-resident happens to reside.

In past cases, non-residents have successfully argued that they should not be subjected to the in personam jurisdiction of the Florida Courts merely as a result of a contract they entered into because of their right to due process under the United States Constitution.  Their reasoning was that non-residents should not be brought into the Florida Courts unless they have notice of their need to appear, and that it is unreasonable to subject them to the long arm jurisdiction of a foreign court, many miles from their home state.  In 2004, a Federal Court in Florida held that due process is nevertheless met in such a case if the choice of forum is “freely negotiated” by the parties and is not “unreasonable and unjust.”  Stellar Group, Inc. v. Mid-Ohio Mech., Inc., 2004 WL 568557, at 3 (M.D. Fla. Jan. 28, 2004).  As a result, a standard “boilerplate” pre-printed contract would not pass the Stellar Group test for due process since it is not “freely negotiated”.  Additionally, small consumer purchase contracts would not satisfy the personal jurisdictional requirements of Section 685, since the consideration involved in such contracts is typically less than $250,000.

In 2009, five years after the Stellar Group case, Florida’s Third District Court of Appeal construed Section 685 and permitted parties to a Contract to restrict personal jurisdiction to the Florida courts by contract alone, since the requirements of Section 685 were met.  Jetbroadband WV, LLC v. Mastec North America, Inc., 13 So.3d 159 (Fla. 3d DCA 2009).  As a result of the Jetbroadband case, assuming the requirements of Section 685 are met, and at least one of the parties is a Florida resident or entity, it should not even be necessary to show that the subject matter of the Contract bears a reasonable relationship to Florida in order for the Florida Courts to obtain jurisdiction.  This new case law in Florida, based upon Section 685, takes the Florida Courts one step further to achieving long arm personal jurisdiction over non-residents.