How current events impact business & real estate

Monday, June 21, 2021

Second Circuit Dismisses Discrimination Lawsuit by African American Firefighters Seeking an Accommodation to Grow Facial Hair

The United States Court of Appeals for the Second Circuit of New York recently dismissed a lawsuit filed by four African American firefighters, pursuant to the American with Disabilities Act, claiming that the FDNY discriminated against them by denying their request for a reasonable accommodation to grow facial hair.

In Bey et al. v. City of New York et al., the four African American firefighters suffered from pseudofolliculitis barbae ("PFB"), a skin condition most commonly affecting African American males, which causes skin irritation after shaving (The lower court previously dismissed the plaintiffs race discrimination claims). The Second Circuit ruled that the FDNY did not discriminate against the firefighters because they were abiding by a binding safety regulation requiring firefighters to be clean shaven in areas where a respirator seals against the skin on their faces. The Court further stated that any challenge to this regulation should be directed to OSHA (Occupational Safety and Health Administration), not their employer. 

Do you agree with the decision? 

Thursday, June 17, 2021

New NYS Bill Requires Employers to Provide Notice to Employees of Electronic Monitoring

New legislation, which passed the NYS Senate and Assembly on June 9, 2021 and is awaiting signature by Governor Cuomo, will require employers who monitor employees' e-mail or internet usage on any electronic device (e.g. phone or computer) to provide notice of such monitoring to all employees.

The notice must be in writing (acknowledged by the employee), provided to all employees upon hiring and posted in the workplace. 

The bill further provides that the notice must contain the following:

"An employee shall be advised that any and all telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system, including but not limited to the use of a computer, telephone, wire, radio or electromagnetic, photoelectronic or photo-optical systems may be subject to monitoring at any and all times and by any lawful means." 

Employers who fail to provide the required notice are subject to fines of between $500- $3,000 per offense. 

The bill is effective 180 days after Governor Cuomo signs the bill into law.

Construction Question - Can you get around zoning restrictions by claiming free speech?

In Burns v. Town of Palm Beach, the 11th Circuit said free speech does not let you build a mansion when zoning prohibits it.

This case is a true Palm Beach tale. 

Donald Burns sought to knock down his "traditional" beachfront mansion and build an entirely new one, double the size, in a mid-century modern style. 

Get that - mansion #1 wasn't big enough so he needed mansion #2. 

In order to build his new mansion, Burns had to obtain approval from the Town of Palm Beach's architectural review commission. 

However, the commission denied Burns' building permit and found that his new mansion was not in harmony with the proposed developments in land in the general area and was excessively dissimilar to other homes within 200 feet in terms of architecture, size, and mass. 

This prompted Burns to take the dispute to federal court where Burns sued the town, claiming that the denial of his building permit was a violation of his First Amendment free speech rights and Fourteenth Amendment rights to due process and equal protection. 

Our hats are off to Burns' attorneys for this creative argument (lawyers that think outside the box are the best client advocates). Yet, Burns lost. 

The 11th Circuit found that architectural design was not protected by the First Amendment because "there was no great likelihood that some sort of message would be understood by those who viewed Burns's new beachfront mansion." 

In the majority opinion, Judge Robert Luck stated that "one day, we may even find some residential architecture to be expressive conduct. . .but Burns' new mansion is not Monticello or Versailles. . ." 

Do you agree?

Should artistic expression override zoning laws?

Tuesday, June 15, 2021

Federal Court Upholds Employer's Mandatory Vaccination Policy

The United States District Court for the Southern District of Texas held that the Houston Methodist Hospital's policy requiring employees to be vaccinated against COVID-19, under the threat of termination, is lawful.

In Bridges et al. v. Houston Methodist Hospital et al., 117 hospital employees sued the hospital for "unlawfully forcing its employees to be injected with one of the currently-available vaccines or be fired." The plaintiffs alleged that they were wrongfully terminated and compared the vaccination requirement to "forced medical experimentation during the Holocaust."  

Citing to EEOC guidance (which is not binding) stating that employers can mandate COVID-19 vaccinations subject to reasonable accommodations for employees with disabilities or sincerely held religious beliefs, the Court dismissed plaintiffs' wrongful termination claim (Texas law only protects employees from being terminated for refusing to commit a criminal act). The Court also dismissed the plaintiffs' claims that requiring vaccinations is against public policy because the employees were not coerced to take the vaccine (clearly distinguishing a mandatory vaccination policy from plaintiffs' absurd example of forced injections in concentration camps). Rather, the hospital is trying to protect against a spread of COVID-19 and employees "can freely choose to accept or refuse a COVID-19 vaccine; however, if she refuses, she will simply need to work somewhere else." The Court equated a mandatory vaccination policy to changing an employee's schedule or office location in the sense that "every employment includes limits on the worker's behavior in exchange for his remuneration. That is all part of the bargain." 

This is the first of likely many challenges to employer mandatory vaccination policies. Do you think permitting employers to implement mandatory vaccination policies is against public policy? If so, why?

Monday, June 14, 2021

Tenant's Rights During Foreclosure - New Law

A new NYS law permits tenants who did not occupy a foreclosure premises at the time of the commencement of the foreclosure lawsuit to remain in occupancy for the remainder of their lease term, up to a maximum of 3 years. 

This new law gives tenants greater protection in the event that they happen to occupy a home subject to a foreclosure action, prior to their possession. The ongoing COVID-19 pandemic has caused so much chaos, disruption, and hardship to families across this nation (and the world for that matter) and the ability for families to be able to remain in a rental dwelling that is being foreclosed upon for at least the remainder of their lease and up to a maximum of 3 years, can give these families some relief and afford them a little more time to figure out their next move. 

On the other hand, this law could create delays in the purchase and sale of residential homes due to a tenant's ability to remain at a foreclosed home as referenced above. 

Would you even want to buy a house from foreclosure anymore? 

Do you support the new law that gives tenants additional rights during foreclosure? 

How much of an impact will this new bill have on future purchase and sales on foreclosed homes? 

Friday, June 11, 2021

Gov Cuomo - the NY Islanders Need You Now!

On June 10th, 2021, the NYS Senate joined the Assembly in passing a bill to make baseball the official sport of NY.

Governor Cuomo - it's time for a veto!

The New York Islanders are in the final four for the second year in a row. Let's make ice hockey our sport. 

Come on Governor, you can do it. 

Seasonal Rentals May Soon Collect More Than One Month’s Rent for Deposit or Advance

On June 9, 2021, the New York State Legislature passed Assembly Bill A4587 / Senate Bill S6877. The bill amends General Obligations Law §7-108(1-a) which, if passed, will exempt certain seasonal use tenancies from the maximum deposit or advance of one month’s rent. The seasonal use dwelling must meet the following conditions:
  1. The lease expressly provides that:
    • the dwelling unit is registered as a seasonal use dwelling unit, indicating the local or county government agency with which it is registered;
    • the occupancy is only for seasonal use and does not exceed 120 days or a shorter period provided by the lease; and
    • the tenant has a primary residence to return to and such address must be expressly stated on the lease.
  2. The dwelling unit is registered with the appropriate local government, county, or state registry as a seasonal use dwelling; and
  3. The dwelling unit is not rented as a seasonal use dwelling unit for more than 120 days during each calendar year.

The problem is that local municipalities now need to create seasonal use dwelling registries or this whole law does nothing, no?

NYS Bill Exempts Co-Ops from Certain Landlord-Tenant Laws

On June 10, 2021, the New York State Legislature passed Assembly Bill A350 / Senate Bill S5105C (“Bill”) which set forth exemptions for cooperative housing corporations (co-ops) in relation to their tenants who are unit owners, purchasers, or shareholders. Once signed by the Governor, the Bill takes effect immediately.

While unit owners, purchasers, or shareholders of co-op units are generally considered “tenants” under their respective proprietary leases or occupancy agreements, if the bill becomes law, co-ops will be 
exempted from the usual landlord-tenant requirements and prohibitions set forth below:

  • Security Deposit or Advance (GOL §7-108): A co-op will be allowed to collect more than one month’s rent for a deposit or advance from tenants who are unit owners, purchasers, or shareholders of owner-occupied units;
  • Notice of Non-Renewal or Notice of Rent Increase (RPL §226-c): A co-op is no longer required to provide the RPL §226-c Notice of Non-Renewal or Notice of Rent Increase to tenants who are unit owners or shareholders of the co-op;
  • Application Fees (RPL §238-a): A co-op may demand any payment, fee, or charge necessary to compensate a managing agent and/or transfer agent for processing, reviewing, or accepting a tenant’s application where such tenant would become prospective unit owner or shareholder;
  • Credit and Background Check Fees (RPL §238-a): A co-op may charge more than $20, but such fees should not exceed the actual cost;
  • Monthly Maintenance Fees for Late Payments (RPL §238-a): A co-op may charge up to 8% of the monthly maintenance fee for the late payment of such fee if provided for in the proprietary lease or occupancy agreement;
  • Rent” in a Summary Proceeding (RPL §702): A co-op may demand more than the rent in a summary proceeding against a unit owner or shareholder provided that the proprietary lease or occupancy agreement allows for the recovery of other fees, charges, penalties or assessments in a summary proceeding;
  •  5-Day Notice of Non-Payment (RPL §235-e(d)): A co-op may provide another method of sending notice by mail other than certified mail as long as it is set forth in the proprietary lease or occupancy agreement; and
  • Attorneys’ Fees upon a Default Judgment (RPL §234(2)): A co-op may be awarded attorney’s fees in the event of default judgment against a unit owner or shareholder if the recovery of such fees are set forth in the proprietary lease or occupancy agreement.

Essentially, the Bill aims to correct the unintended effects of the Housing Stability and Tenant Protection Act of 2019 towards unit owners or shareholders of co-ops who are “tenants” only because of their proprietary leases or occupancy agreements.

Do you agree with the Legislature’s corrections? Is it too little, too late?

For pending litigation, it sure seems that this new law affirms that co-ops that previously breached the Housing Stability & Tenant Protection Act as applicable to tenants, are liable, no?

Thursday, June 10, 2021

NYS Cannabinoid Hemp Licensing May Became Much More Challenging to Obtain

Those looking to apply for Cannabinoid Hemp Licensing in NYS to process, sell, or distribute cannabinoid hemp products may have to jump through several more hoops in the application process due to new proposed regulations.

If adopted, the regulations will require that licensing applications to manufacture cannabinoid hemp products in NYS be accompanied by: 

  1. A summary and description of the products the applicant intends to make; 
  2. Proof of liability insurance;
  3. Evidence of good manufacturing practices; and 
  4. Copies of organizational documents. 

Similarly, an application to sell cannabinoid hemp products will be required to be accompanied by: 

  • A summary and description of the type of product intended for sale;
  • The name and country of origin of the distributor; and 
  • Verification that the applicant will not sell inhalable cannabinoid hemp products to consumers under 21.   

Additionally, even if an cannabinoid hemp processor application is approved, the applicant must still submit numerous items in order to receive a final license (e.g., copy of certificate of occupancy for facility, evidence of Good Manufacturing Practices Audit, and proof of product liability). 

Do you think these additional hurdles in the cannabinoid hemp licensing application process will scare away entrepreneurs from applying for a license?  

If you don't agree or think these proposed regulations are too onerous, you can make your voice heard until July 19, 2021 by emailing: - use I.D. No. HLT-45-20-00002-RP in your subject. 

Are you going to make your voice heard?

Wednesday, June 09, 2021

The Supreme Court Limits Employers Ability to Prevent Unauthorized Use of its Computers.

As a result of a recent United States Supreme Court decision, employers can no longer use the Computer Fraud and Abuse Act of 1986 ("CFAA") as a tool to prevent unauthorized use of its computer systems. 

The CFAA makes it illegal to "access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter."

In Van Buren v. United States, No. 19-783, the Supreme Court held that a police officer did not violate the CFAA when he ran an unauthorized license plate search in exchange for money. Relying on the language of the statute, the Court reasoned that the CFAA makes it illegal to access information an individual is not permitted to obtain, but does not prohibit improper use of information or databases which an individual has the authority to access. 

Justice Barrett used the following example to clarify the Court's holding: If an individual is authorized to access a specific folder on a computer, he/she does not violate the CFAA if he/she accesses the folder for an unauthorized purpose. However, if an individual accesses a separate folder on the computer to which he/she does not have authorized access, such conduct violates the CFAA.

In light of the Supreme Court's decision, employers should consider the following to protect against improper/unauthorized use of its computers/databases:

1) Strengthening policies regarding unauthorized use of computers/databases. While unauthorized use is no longer unlawful under the CFAA, employers are free to implement restrictive policies regarding unauthorized use of computers and discipline employees who violate the policies. 

2) Taking further steps (e.g. secure passwords) to safeguard documents/information to which employers do not want employees to access.

3) Entering into confidentiality/unauthorized use agreements with employees.