Could it Happen to you?
A Case of Age Discrimination – Greenskeeper Begins to See Red Skip to Resolution
A local club had a long-time employee – a head greenskeeper, in this case – who was
approaching retirement. Yet at the time, the club’s board of directors and general manager knew
they needed to upgrade their facilities. Therefore, they asked this long-time employee to delay
retirement and remain in the position while they completed their upgrades. The club also asked
the long-time employee to assist in selecting a successor. Following the completion of the
upgrade and the selection of the successor employee, the club held a retirement party for the
long-time, but departing employee.
However, six months later, when the retired employee realized his retirement income was not quite
what he expected, he began to believe the club forced him to retire. So he decided to file a
charge of age discrimination with the Equal Employment Opportunity Commission (EEOC). Could your club afford to defend such a claim?
Resolution:
A Case of Age Discrimination – Greenskeeper Begins to See Red
After a thorough investigation, the EEOC ruled that the Greenskeeper had a legitimate claim of
age discrimination and the club was forced to defend their actions. The claim was submitted to
the club’s D&O insurance carrier. The club worked closely with the insurance carrier’s panel of
employment law attorneys to address the allegations. The attorneys were able to successfully
defend the club’s actions, although defense costs totaled $145,000. The club was only responsible
for their deductible of $10,000.
Changing the Bylaws – Grandfathers Want to Be
Grandfathered Skip to
Resolution
A club’s bylaws provided that senior members were not required to pay annual dues, but still
retained the right to use the club’s facilities and to vote for the board of directors. Then, the
board proposed an amendment to the bylaws, which required all senior members to pay annual dues
to maintain their membership in good standing. In spite of the strong objections of several
senior members, the club’s members approved the amendment to the bylaws. However, some senior
members still refused to pay the dues. The board suspended these memberships and their rights to
use the club’s facilities.
In turn, the dissident senior members sued the board for a declaratory judgment that the change
to the bylaws was invalid and for reinstatement as members in good standing. Do the senior members have a case?
Resolution:
Changing the Bylaws – Grandfathers Want to Be Grandfathered
After 8 months in court the club was able to successfully defend the changes in their by-laws.
The senior members were “grandfathered” under the revised by-laws. As part of the settlement, the
club agreed to a tiered annual dues approach which fazed dues out over a set period of time. The
attorney’s fees toped $100,000 dollars and severely hampered the club’s new membership drive. The
club’s D&O insurance carrier defended the claim. The club was responsible for the deductible of
$7,500.
A Case of Unfair Trade Practices – A Member Wants His Fair Dues and Due Process Skip to
Resolution
An established club had seen a decline in new members, primarily due to increased competition
from new clubs in the area. To help boost membership, the club’s board of directors approved a
major reconstruction of its golf course. It also offered a discounted initiation fee during the
construction phase.
A few new members joined the club at the reduced initiation fee. But following the completion of
the golf course reconstruction, the board extended the period for the reduced initiation fee in
an effort to further bolster membership. One of the new members threatens to sue the club for
fraud and misrepresentation, claiming that the board had fraudulently induced him to join with
the false promise that the reduced initiation fee was available for a limited time. Could the club be forced to defend such allegations?
Resolution:
A Case of Unfair Trade Practices – A Member Wants His Fair Dues and Due
Process
The disgruntled new member pursued a release from his membership obligations. The membership
dispute was decided in a court of law. The court ruled that the club’s extension of the “limited“
initiation fee reduction constituted a fraudulent misrepresentation of the membership terms.
Fortunately, the club’s D&O insurance policy responded with a defense of the allegations.
Although defense costs topped $75,000, the club was only responsible for their $5,000 deductible.
These claims scenarios provide a peek into the minefield within
which your board operates. You should be certain that your club is
armed with the necessary ammunition to defend not only the club’s
assets, but also the assets of the club’s board members.
