Newsletters

Nonprofit Report - January 2020

Does Our Association Website Need To Be ADA Compliant? It Depends!

By: Jennifer S. Jackman

There has recently been a major influx in litigation involving website accessibility under the Americans with Disabilities Act (ADA).  Website accessibility claims arise from assertions that hearing or vision impaired plaintiffs are unable to use screen reading software or other assistive technologies to access the website’s content due to digital barriers on the site.  Defendants are usually faced with lawsuits seeking injunctive relief and attorney’s fees.  In order to protect against such claims, defendants typically must retain website accessibility experts, which can be expensive, often incentivizing an early settlement to avoid costly legal fees. 

The ADA provides equal opportunity for individuals with disabilities which applies to “public accommodations and services operated by private entities.”  According to the Code of Federal Regulations (“Regulations”), public accommodations include 12 specific categories of organizations generally described as “service establishments” and includes “places of education.”  Although the Regulations do not specifically identify nonprofit organizations and trade associations as public accommodations, the Regulations do include “private [entities] that offer[ ] examinations or courses related to applications, licensing, certification, or credentialing for secondary or postsecondary education, professional, or trade purposes.”  In addition, if the private entity offers goods or services via their website, they may fall under the parameters of the ADA for website compliance purposes.

Beginning in 2010, the Department of Justice (“DOJ”) took an interest in ensuring website accessibility, issuing an Advance Notice of Proposed Rulemaking.  The rule proposed set to revise the ADA Regulations to expressly provide requirements as to website accessibility.  Ultimately, the DOJ reversed course and decided against revising the Regulations, but not before it entered the website accessibility litigation playing field, filing more than 250 lawsuits by 2015.  While the DOJ has seemingly moved away from this issue, the number of lawsuits instituted by individual plaintiffs has increased dramatically from fewer than 300 lawsuits in 2016 to over 2,000 lawsuits in 2018 alone.  Based on the current environment, we expect the number of these lawsuits to continue to increase because of the relative ease of searching for and identifying inaccessible websites, the lack of need to prove actual damage or injury by the plaintiff, and the fact that attorney’s fees are part of the damages allowed. 

Since there are no regulations dealing with the specific issue of website accessibility, courts have to decide these cases without guidance.  This has resulted in a split in the federal circuit courts as to whether websites, which are not technically “physical” structures, are places of “public accommodation” under the ADA.  The First and Seventh Circuits have held that places of public accommodation do not need to be physical structures while the Third, Sixth, Ninth and Eleventh Circuits have held that places of public accommodation are physical structures and that a website accessibility claim can only be asserted if the alleged inaccessibility has a nexus to the goods and services offered at a physical location.

In February 2019, the Ninth Circuit Court of Appeals entered judgment in favor of a plaintiff who alleged that the Domino’s Pizza website was inaccessible.  Domino’s appealed the case to the United States Supreme Court.  On October 7, 2019, the Supreme Court denied cert, meaning it decided not to review the Ninth Circuit decision, leaving the Ninth Circuit’s decision untouched.  Thus, the highest court has declined to overturn a decision holding that the ADA applies to websites.

If a nonprofit website is a means for persons to access education, courses and examinations directed to licensing, certification or credentialing, then those nonprofits may be deemed to be a ‘place of education’ and, therefore, subject to ADA compliance.  Among the obstacles faced by disabled people are: images without text equivalents, documents not in an accessible format, lack of specification of colors and font sizes, and multimedia without accessible features.  Given the dramatic rise in website compliance lawsuits, every nonprofit organization should proactively evaluate its website and app for accessibility.  If there are issues with accessibility, plans need to be implemented to address the inaccessibility. 

Please contact Jennifer Jackman to discuss this issue and the proactive steps you can take to mitigate this risk.

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Top Five Political Law Compliance Tips for 2020

By: James A. Kahl

Avoid common and costly missteps presented by political contribution, lobbying and gift laws.

Another election year is upon us and, once again, federal and state candidates are on track to raise and spend unprecedented sums for their election efforts.  That means corporations, trade associations, 501(c)(4) advocacy organizations, and their leaders, members and donors will be inundated with political contribution requests.  They may also be asked to help candidates and political parties in other ways, such as hosting fundraisers or providing in-kind contributions of goods or services.

For many organizations, political engagement is not an option; decisions by federal, state and local officials may be critical to their success.  Any organization engaged in political activity must understand the basic rules of the road in order to avoid common pitfalls.  Here are our Top 5 compliance tips for addressing the political law risks facing your organization this election year.
 

1. Know which contribution rules apply to your organization

 

• All incorporated entities, including corporations, trade associations and 501(c)(4) organizations, are prohibited from contributing to federally-registered candidates, political parties and PACs.
• However, direct and indirect independent corporate candidate advocacy is permitted by the Supreme Court’s Citizens United v. FEC ruling (e.g., radio, TV, cable, Internet and print ads expressly supporting or opposing candidates that are not coordinated with candidates).  Corporate issue advocacy is also permitted.

• Only a few states allow unlimited corporate contributions in state/local elections.
• Contributions from incorporated entities are prohibited in about 20 states, and other states impose limits on corporate contributions.

• An incorporated entity (but not a 501(c)(3) organization) may establish a PAC as a vehicle for contributing when corporate funds cannot be used.  PACs are funded by individuals affiliated with the organization.  
• Only state-registered PACs can be used in some state/local elections.  

• Conduit and “straw-man” contributions, and contribution reimbursement schemes are almost always illegal and are a favorite target for federal and state prosecutors.
• Corporate facilities or resources – such as conference rooms, copiers, phones, and secretarial time – should not be used to assist in fundraising activities in support of federal candidates (unless paid by a permissible source or permitted by narrow safe harbor rules). Such “corporate facilitation” can result in significant fines under federal and state laws.

2. “Pay-to-Play” contribution laws pose special risks for “public contractors”

 

• “Pay-to-play” laws may prohibit or restrict political contributions by state or local public contractors and other organizations that have agreements with governmental bodies (including pension fund investment advisers and municipal bond broker-dealers).  These contribution restrictions may also apply to the organization’s PAC and to its officers, directors, senior managers, and even their spouses and children.
• The sanctions for violating pay-to-play laws can be harsh – e.g., bids disqualified, contracts voided, prospective contract bans.  In addition, adverse publicity is likely to accompany violations since the media closely covers pay-to-play violations.
   

3. Lobbying registration and reporting laws are becoming more onerous

 

• In many states, the term “lobbying” may mean more than just direct communications with legislators or executive branch officials.  For example, lobbying laws and regulations may also cover “grassroots” lobbying (communicating with the public), “goodwill” lobbying (“getting to know” public officials), or “procurement” lobbying (communications about pubic contracts).
• States are also requiring more disclosure about lobbying activities, imposing political contribution restrictions on lobbyists, and mandating ethics training for lobbyists and their employers.
   

4. Anything you give a public official might be an illegal gift

 

•  Gift giving is highly regulated by federal, state and local laws.  Gift and ethics laws must be reviewed carefully because a “gift” may be anything of value – even a cup of coffee!
• Gift and ethics rules usually apply to gift giving to elected legislative and executive officials, and career government employees.  Most states impose additional gift restrictions on lobbyists and government contractors.
• Virtually all gift rules have exceptions, which allow for some level of gift giving.  Common exceptions permit officials to receive invitations to receptions, awards and certificates, and informational materials.  In some jurisdictions a wide range of gifts are permitted, but advance planning is essential.  When gift giving is allowed, the donor and/or recipient may have disclosure obligations.
   

5. Develop a political activity risk management strategy

 

• Develop clear political activity policies and procedures (tailored to your organization’s level of political engagement) outlining “do’s and don’ts” for employees.
• Designate a “go-to” person who can respond to employees’ political activity questions.
• Establish tracking processes for gifts, contributions and other reportable expenditures to facilitate preparation of lobbying, campaign finance and IRS reports.
• On a periodic basis (i) provide training and/or informative materials to certain key employee groups; and (ii) review the scope of your organization’s political activities to identify risk areas and prioritize compliance needs.

For additional information contact Jim Kahl or 202.659.6775.