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William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Legal Q & A
Hotel Tax Exemptions,
Harassment Law
and Confidentiality

Deborah M. Kole
League Staff Attorney

Q I am the municipal clerk in a municipality with a new hotel/motel occupancy tax ordinance in place. One of the hotels in town just called to ask whether it should collect this tax and the state occupancy fee from a nonprofit organization holding an ST-5 certificate. Are such groups exempt from these assessments as well as the sales tax? If so, are rentals by these organizations of meeting rooms at hotels also exempt from these taxes and fees?

A Organizations holding ST-5 certificates are not exempt from state occupancy fees or municipal occupancy taxes for hotel or motel rooms their members rent and occupy. However, if such an organization offers rooms or shelter themselves as part of their operations (for example, a YMCA facility that rents rooms overnight), it need not collect state fees or local taxes on these occupancies.

Rentals for purpose of assembly or meetings are exempt from municipal occupancy taxes and state occupancy fees as well as New Jersey sales tax. Furthermore, a "permanent resident," defined as someone who occupies a hotel room for at least 90 consecutive days, is similarly exempt from all three taxes/fees.

Q One of our municipal employees filed suit against the municipality under the New Jersey Law Against Discrimination on the basis of a hostile work environment due to sexual harassment by her supervisor. Several years ago we instituted a detailed anti-sexual harassment policy which we give out to all employees. I told my colleagues on the governing body that I believe we can get the suit dismissed on motion because we have this policy in effect, but one of them indicated that she did not think it was that simple. Isn't there case law protecting an employer with such a policy in place from this type of suit?

A Having such a policy in place is certainly important, but ,""your colleague is correct that more is necessary to shield an employer from vicarious liability for an employee's harassing behavior. In Lehmann v. Toys 'R' Us, Inc., 132 NJ 587 (1993), the New Jersey Supreme Court set forth sever­al factors that must be considered along with the existence

of a formal anti-harassment policy to determine if an employ­er was negligent and therefore liable. There must be a viable complaint structure, mandatory anti-harassment training, monitoring of how effective the system is, and an unequivocal commitment by management to the policy. In a later case, Cavuoti v. New Jersey Transit Corporation, 161 NJ 107 (1999), the Court indicated that a truly active anti­harassment policy promulgated and supported by an employer could provide a form of safe haven from vicarious liability for an employee's actions.

An even more recent New Jersey Supreme Court case, Gaines v. Bellino, 173 NJ 301 (2002), made the limitation on this haven clear, however. The Court said, in overruling a grant of summary judgment to defendants, "A defendant is entitled to assert the existence of an effective anti-sexual harassment workplace policy as an affirmative defense to vicarious liability;.. .However, here the record contains numerous factual disputes... that raise serious questions concerning the effectiveness of the.. .policy."

The program must not only exist, but be proven effective, to protect the employer.

To ensure that a municipality's program meets this standard, municipal officials should consult with their municipal attorney, and perhaps an attorney or other expert in employment law, in formulating and implementing it

Q As municipal clerk, I recently received a request under OPRA for a collective bargaining agreement between the municipality and a municipal employees' union. A union official told me that these agreements are confidential and should not be released. Is this true?

A NO, it is not. Not only should the agreement be released, but such collective bargaining agreements are among the records that the Open Public Records Act designate as ordinarily subject to "immediate access" by requesters, along with bills, vouchers, budgets, contracts, and public employee salaries, rather than the seven business day time period usually allowed for providing access. ...

This column is for informational purposes only, and is not intended as legal advice.


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