Private Education Matters
EMPLOYEES STUDENTS
Contributors:
Grace Chan
Partner | San Francisco
Casey Williams
Partner | San Francisco
Jordan Carman
Associate | San Francisco
Hannah Dodge
Associate | San Francisco
Christopher Fallon
Partner | Los Angeles
Stephanie Lowe
Senior Counsel | San Diego
Madison Tanner
Associate | San Diego
Joshua Sarsfield
Associate | San Diego
SB 848
Key SB 848 Requirements Effective July 1, 2026.
Beginning July 1, 2026, SB 848 will impose several new compliance obligations on California private schools. With the school year winding down and July 1 quickly approaching, schools should be prepared to implement the following items during the summer break:
Professional Boundaries Policy: Effective July 1, 2026, schools must adopt a written policy applicable to employees, volunteers, and contractors addressing appropriate conduct in adult-student, student-student, and adult-adult interactions, including electronic communications. There are specific requirements for this policy and LCW can help schools evaluate whether their current boundaries policy aligns with the statutory requirements.
Facilities and Supervision Plan: By July 1, 2026, schools must adopt a written facilities and supervision plan designed to promote visibility, ensure adequate supervision, and reduce the risk of unsupervised contact between students and adults.
Mandated Reporter Training: The mandated reporter training portion of SB 848 goes into effect on July 1, 2026. Under this provision, employees, certain volunteers, board members, and covered contractors must complete training within six weeks of beginning service, within six weeks of the start of the school year, and annually thereafter. The training must be done by using state-provided or equivalent insurer-approved training and schools must report completion to the California Department of Education.
nrla
University’s Severance Agreement Survives NLRB Challenge Over Confidentiality Language.
The University of Dayton, a private university in Ohio, faced an unfair labor practice charge after it declined to renew the annual contracts of 45 professional staff members and offered each employee a separation and release agreement. The dispute centered on the agreement’s confidentiality provision, which prohibited employees from disclosing “confidential business, medical, and personnel information” and required them to notify the University of any legal demand for such information.
The National Labor Relations Board’s General Counsel alleged that this provision violated Section 8(a)(1) of the National Labor Relations Act, which prohibits employers from interfering with employees’ rights to engage in protected concerted activity, such as discussing wages or workplace conditions. The challenge relied heavily on the Board’s decision in McLaren Macomb, a 2023 NLRB decision that held that severance agreements’ confidentiality and non- disparagement clauses may be unlawful if their terms would reasonably tend to interfere with employees’ protected rights.
The Administrative Law Judge rejected the claim and dismissed the complaint. The judge first addressed the scope of McLaren Macomb, explaining that its holding was tied to agreements that included broader, more restrictive provisions, such as sweeping nondisparagement clauses, and arose in the context of other alleged unfair labor practices. By contrast, the agreement at issue here was limited to confidentiality of specific categories of information and did not include the same expansive restrictions.
The judge concluded that the agreement would not reasonably be interpreted by employees as restricting their ability to engage in protected activity. The confidentiality clause focused on proprietary and sensitive information, such as personnel records or information obtained in confidence, and did not
prohibit employees from discussing wages or working conditions. The judge emphasized that, absent other coercive circumstances, a reasonable employee would not understand the provision to limit their rights under the NLRA.
The Administrative Law Judge also addressed additional provisions in the agreement that were not directly challenged but were relevant to the analysis. In particular, the judge noted that the agreement’s non-disparagement clause was narrower than the one at issue in McLaren Macomb, as it was limited to prohibiting defamatory or maliciously false statements rather than broadly restricting any statements that could harm the employer’s image. The judge also observed that the agreement required confidentiality only as to the severance payment amount, rather than the entire agreement, which further distinguished it from the more restrictive provisions in McLaren Macomb. These distinctions reinforced the conclusion that the agreement, viewed as a whole, would not reasonably be interpreted to chill employees’ protected rights.
Because the agreement was not facially coercive and did not have a reasonable tendency to chill protected activity, the judge held that offering the agreement did not violate the NLRA and dismissed the complaint in its entirety.
University of Dayton (NLRB ALJ Apr. 10, 2026) JD–20–26.
Note:
This decision provides helpful guidance for schools navigating severance agreements after McLaren Macomb. While overly broad confidentiality or non-disparagement provisions may still raise risk, more narrowly tailored clauses focused on legitimate confidential information may be permissible, particularly in the absence of other coercive conduct.
MINISTERIAL EXCEPTION
Court Allows Discrimination Claims To Proceed Against Catholic School, Rejects
Ministerial Exception Based On Teacher’s Role.
Keshel Coates, a first-grade teacher at St. Peter Claver Catholic School, a private Catholic school in Macon, Georgia, filed suit after the School declined to renew her contract at the end of the 2023-2024 school year. Coates, an African American woman who is not Catholic and described Catholicism as “offensive,” alleged that the non-renewal was based on race and religion and brought claims under Title VII, Section 1981, and Section 1983.
During her initial interview in 2022, Coates told the School’s principal that she would not accept the position if it required her to participate in Catholic worship or doctrine. The principal reassured her that she would not be responsible for teaching religion and would only need to escort students to weekly Mass to supervise behavior. Coates accepted the position and, over the next two school years, taught secular subjects such as reading, science, and social studies. Another teacher provided religious instruction, and Coates did not lead prayer or participate in Catholic worship activities.
Despite these assurances, each year Coates signed employment agreements stating that her position was “ministerial” and required her to adhere to Catholic doctrine and serve as a faith-based role model. The School also evaluated teachers on their ability to incorporate Catholic values into instruction. Coates alleged that she believed these provisions applied only to Catholic teachers, particularly because her non-participation in religious activities was accepted without discipline and she received positive performance evaluations during her employment.
The situation changed in April 2024, when Coates provided a statement to police regarding an incident involving another teacher and a student, about which Coates informed the student’s parents. Following that report, Coates alleged that school leadership questioned her actions, accused her of harboring ill
will toward the other teacher, and began documenting minor performance issues such as tardiness. Coates further alleged that the other teacher, who was white, was not disciplined.
On May 29, 2024, the School informed Coates that her contract would not be renewed. The stated reason was that she had not fully participated in the religious aspects of the program, as required by her role.
The School moved to dismiss Coates’ complaint, relying primarily on two legal arguments: that it was permitted to make religious-based employment decisions under Title VII’s religious exemption, and that the First Amendment’s ministerial exception barred Coates’ claims entirely.
The Court first addressed Coates’ religious discrimination claims under Title VII. Title VII generally prohibits discrimination based on religion, but it expressly permits religious institutions to employ individuals whose beliefs align with the institution’s faith for work connected to its activities. Because Coates alleged that the School declined to renew her contract due to her lack of participation in Catholic practices, the Court held that these claims fell within the statutory exemption and dismissed them.
The Court then turned to the ministerial exception, which is a constitutional doctrine that bars certain employment discrimination claims involving employees who perform religious functions. The Court emphasized that the analysis for the ministerial exception depends on the employee’s actual duties rather than contractual labels alone.
Although Coates’ contract described her role as ministerial and required her to model the Catholic faith, the Court found that she plausibly alleged that her day-to-day responsibilities were primarily secular. She did not teach religion, did not lead students in prayer, and did not participate in religious services beyond supervising students. The Court also noted her allegation that the School knowingly permitted her to perform the role in this manner for two years. Based on these facts, the Court concluded that it was plausible that Coates did not perform a ministerial function and therefore declined to dismiss her race discrimination and retaliation claims at this stage.
Finally, the Court dismissed Coates’ constitutional claims under Section 1983, which require action by a state actor. The Court found that the Catholic school, as a private institution, was not a state actor, even though it may have received federal funding.
Accordingly, the Court dismissed Coates’ religious discrimination and constitutional claims but allowed her race discrimination and retaliation claims to proceed.
Coates v. Roman Cath. Diocese (M.D.Ga. Apr. 6, 2026) 2026 WL 926130.
Note:
This case highlights the importance of carefully evaluating roles at religious schools that include both secular and religious functions. While religious institutions retain discretion to make faith-based employment decisions, courts will look beyond contractual labels and examine the employee’s actual duties when applying the ministerial exception.
HOSTILE WORK
ENVIRONMENT
Court Finds Racially Charged Comments And Workplace Tension Not Severe Enough For Hostile Work Environment Claim.
Alyson Stephenson worked as a fifth-grade teacher at Bottenfield Elementary School in Champaign Community School District No. 4. Stephenson worked for the District from 2015 to 2020 and received consistently positive performance evaluations, including ratings of “proficient” and “excellent,” and was never formally disciplined. She received tenure in August 2019.
Stephenson, a Caucasian female, claimed that her assistant principal created a racially charged and uncomfortable work environment and that she was treated less favorably than male colleagues.
Her claims focused on a series of incidents during the 2019-2020 school year involving the assistant principal. For example, Stephenson alleged that a comment was made at a staff meeting suggesting that some teachers could have come from a Ku Klux Klan meeting and that a statement was made about needing more Black teachers. Stephenson also cited a remark that two male teachers
were better able to handle difficult students, which she interpreted as implying that she could not handle difficult students. Stephenson cited an incident where an article discussing “white supremacy” was read aloud during a meeting and an instance where she was not included in a shared ride from the airport while traveling with colleagues and her infant child. She reported some of these concerns to her principal and union representatives.
Stephenson also alleged that the administration retaliated against her after she raised concerns, including by attempting to reassign her to a different grade level. However, she was never reassigned and ultimately resigned voluntarily in July 2020 after accepting a position at a private school.
Stephenson subsequently filed suit, alleging race and gender discrimination, hostile work environment, and retaliation under Title VII. The Court granted summary judgment in favor of the District on all claims.
With respect to the hostile work environment claim, the Court emphasized that Title VII requires conduct that is both severe or pervasive and based on a protected characteristic. While some of the comments described by Stephenson were unprofessional or offensive, the Court
found they were isolated, infrequent, and not directed specifically at her. Importantly, the Court concluded that the conduct did not rise to the level of “discriminatory intimidation, ridicule, and insult” required to establish a hostile work environment.
The Court also found no evidence that the alleged conduct interfered with Stephenson’s ability to perform her job. She continued to receive positive evaluations, was not disciplined, and maintained professional relationships with colleagues. The Court reiterated that Title VII does not prohibit workplace rudeness or isolated offensive comments absent discriminatory intent.
Stephenson’s discrimination claims likewise failed because she could not show that she suffered an adverse employment action. She was not terminated, demoted, or reassigned, and her voluntary resignation did not constitute constructive discharge. The Court noted that even if she had felt uncomfortable, the conditions described did not rise to the level required to establish that she was forced to resign.
Finally, the Court rejected her retaliation claim. The Court found that the discussions about a potential reassignment were the only alleged retaliatory act. These discussions did not result in any actual change to her employment and were not the type of action that would deter a reasonable employee from making a complaint. The Court also found insufficient evidence of a causal connection between her complaints and any adverse action.
Stephenson v. Champaign Cmty. Sch. Dist. No. 4 (C.D.Ill. Mar. 9, 2026) 2026 LX 131922.
Note:
This case highlights that while inappropriate or insensitive comments should be addressed, the standard for a hostile work environment is conduct that is severe or pervasive and results in a tangible employment impact.
fmla
Court Finds No FMLA Violation For Employee Not Reinstated After Position Eliminated.
David Hansen, an Assistant Director of Building Services at Valparaiso University, filed suit after the University eliminated his position while he was on extended medical leave under the Family and Medical Leave Act (FMLA). Hansen alleged that the University interfered with his FMLA rights by failing to reinstate him and retaliated against him for taking leave.
Hansen had worked at the University since 2010 and was promoted to Assistant Director in 2019. In that role, he supervised three building services supervisors and reported to the Director of Building Services, who in turn reported to the Executive Director of Facilities. In early 2023, Hansen underwent surgery and took the full 12 weeks of FMLA leave beginning in February, followed by approved extensions that kept him on leave into May and beyond.
Before Hansen began his leave, University leadership had already begun discussing restructuring the Building Services Department. According to the University, the department was “top-heavy” with management, and leadership believed Hansen’s Assistant Director role added an unnecessary layer. The proposed restructuring eliminated Hansen’s position and had the supervisors report directly to the Director. Although leadership initially discussed adding a fourth supervisor position, that role was not approved or created until approximately a year and a half later.
On May 22, 2023, while Hansen was still on leave, University officials informed him during a videoconference that his position was being eliminated as part of the restructuring. They emphasized that the decision was unrelated to his medical leave and invited him to apply for other positions within the department if they became available. Hansen was also offered either a severance package or a lower-paying position as a Building Services Technician, both of which he declined.
Hansen argued that the restructuring explanation was a pretext and pointed to the timing of his termination,
the delay in creating the new supervisor role, and what he characterized as inconsistent explanations from the University. He also asserted that he should have been placed into the new supervisory role rather than terminated.
The Court granted summary judgment in favor of the University on both claims. With respect to his claim that the University interfered with his FMLA, the Court explained that although employees are generally entitled to reinstatement after leave, that right does not apply if the employer can show the employee would have lost the position regardless of the leave. The University met this burden through sworn declarations from decisionmakers explaining that the restructuring was planned before Hansen’s leave and implemented in May for efficiency reasons at the end of the academic year.
The Court emphasized that Hansen failed to present evidence to meaningfully dispute this explanation. His argument that the University’s evidence was “selfserving” was insufficient, as sworn declarations based on personal knowledge are valid evidence at the summary judgment stage. The Court also noted that Hansen chose not to take depositions or submit competing evidence that could have created a factual dispute.
The Court likewise rejected Hansen’s retaliation claim. It explained that such claims require evidence that the protected activity caused the adverse action. Hansen relied primarily on the timing of his termination, but the Court held that temporal proximity alone, particularly over a period of several months, is rarely sufficient to establish causation. The Court also rejected Hansen’s argument that he should have been placed in the new supervisory role, noting that the FMLA does not entitle an employee to a different or non-equivalent position.
Because Hansen failed to show that his leave played any role in the decision to eliminate his position, the Court granted summary judgment in favor of the university on all claims.
Hansen v. Lutheran University Ass'n (N.D.Ind. Mar. 19, 2026) 2026 WL 775397.
Note:
While employees generally have the right to reinstatement after FMLA leave, that right is not absolute. Employers may lawfully terminate or eliminate a position during leave if the decision is unrelated to the employee’s use of FMLA. Schools should be aware, however, that making those types of decisions often require a strong written record and still carry risk of a potential claim.
students
Free speech
Ninth Circuit Holds Elementary Student’s Black Lives Matter Drawing Is Protected Speech.
B.B., a first-grade student in the Capistrano Unified School District, filed suit after she was disciplined for creating and giving a drawing to a classmate that included the words “Black Lives Mater [sic] any life.” The incident occurred after B.B.’s teacher read the class a book about Dr. Martin Luther King, Jr. Wanting to express kindness, B.B. drew a picture of her classmates holding hands and included the phrase “Black Lives Matter” because it was at the end of the book the teacher read to the class, and B.B. included the phrase “any life” because “all lives matter.”
B.B. gave the drawing to M.C., an African American classmate, who thanked her and brought it home. M.C.’s mother later discovered the drawing and, concerned that her daughter was the only Black student to receive such a message, contacted the School principal. In her email, she expressed concern about messages directed at her child based on race and requested that the School take appropriate action.
The next day, the principal met with B.B. and told her the drawing was inappropriate and that she should not give drawings to other students. B.B. apologized to M.C. but testified that she did not understand why the drawing was considered wrong. She also alleged that she was barred from recess for approximately two weeks, although the principal denied that any formal discipline occurred. B.B.’s parents did not learn of the incident until nearly a year later, when another parent informed them.
B.B., through her mother, filed suit under 42 U.S.C. Section 1983, alleging that the School violated her First Amendment rights by disciplining her for protected
speech and retaliating against her. The trial court granted summary judgment in favor of the School, concluding that the drawing was not protected by the First Amendment and that School officials were entitled to deference in addressing student conduct at the elementary level.
The Ninth Circuit reversed. The Court began by reaffirming that elementary-aged students retain First Amendment rights at public schools. It clarified that the governing standard is the Supreme Court’s decision in Tinker v. Des Moines, which permits schools to regulate student speech only when it materially disrupts school operations or interferes with the rights of other students.
The Court rejected the trial court’s conclusion that B.B.’s speech was categorically unprotected. It emphasized that age is a relevant factor in applying Tinker, as younger students may be more vulnerable and schools may have greater discretion, but age alone does not eliminate constitutional protection. Schools must still demonstrate that any restriction on speech was reasonably necessary to protect student safety or well-being.
Because there was no evidence that B.B.’s drawing caused any disruption to classwork or school operations, the Court focused on whether the drawing interfered with M.C.’s right to be secure and “let alone.” The Court acknowledged that schools may regulate speech that targets students based on characteristics such as race, particularly where it is threatening, harassing, or demeaning. However, the record contained conflicting evidence about whether the drawing conveyed a harmful message, whether M.C. was actually affected by it, and whether the principal’s response was reasonably necessary. For example, there was evidence that M.C. did not initially understand the drawing and that B.B. intended it as a positive message.
The Court also noted disputes about whether B.B. was actually punished and, if so, the extent of that punishment. Given these factual disputes, the Court held that summary judgment was inappropriate and that a factfinder must determine whether the School’s actions satisfied the Tinker standard.
The Court likewise revived B.B.’s First Amendment retaliation claim, explaining that because the trial court’s ruling rested on the incorrect conclusion that the speech was unprotected, the retaliation claim required further factual development.
Accordingly, the Ninth Circuit vacated the grant of summary judgment and remanded the case for further proceedings.
B.B. v. Capistrano Unified Sch. Dist. (9th Cir. 2026) 169 F.4th 953.
Note:
While this case arose in the public-school context, it provides useful guidance for private schools when evaluating student speech. Elementary-aged students at private schools generally do not have constitutional free speech protections, however high school students at public and private schools do. This case reinforces the importance of considering the context of the speech, including the age of the students involved, the intent behind the expression, and whether the speech could reasonably be viewed as disruptive or harmful to others when determining an appropriate response.
TUITION
Aspirational Language Matters: Court Rejects Tuition Refund Claims Based On COVID-Era School Messaging.
Chapman University, like many institutions, closed its campus in March 2020 and moved to online instruction following public health orders related to the COVID-19 pandemic. In the months leading up to the Fall 2020 semester, Chapman communicated with students about the possibility of reopening campus, stating that its “goal” was to offer some in-person instruction and that it remained “optimistic,” while also making clear that any return depended on governmental “support and approval.” When those approvals did not materialize, Chapman informed students it would proceed with remote instruction. The plaintiffs, two students, remained enrolled and ultimately graduated.
Nonetheless, the two students sued, asserting claims for breach of contract, unjust enrichment, and unfair business practices, arguing that Chapman had promised in-person education and should have provided partial tuition refunds. They relied on various University materials, including course registration listings showing classroom locations, policies referencing “face-to-face
contact,” faculty handbook language about on-campus teaching and availability, descriptions of high-end campus facilities in the University’s catalogs, and the University’s longstanding practice of offering in-person instruction. They argued that these materials created an enforceable implied contract to provide in-person instruction.
The Court rejected these claims and affirmed summary judgment for Chapman. It emphasized that under California law, an implied contractual promise in the student-university context must be based on specific and definite representations, not general expectations. Courts evaluate such claims by examining the parties’ reasonable expectations in light of all the circumstances, including the language used in publications and communications.
Applying that standard, the Court found that none of the materials cited by the students constituted a binding promise. Course listings reflected anticipated locations rather than guaranteed conditions, the catalogs expressly disclaimed contractual intent, and faculty handbook provisions were not directed to students. The Court also held that a University’s past practice of offering in-person instruction does not create a perpetual obligation to continue doing so.
The Court noted there was no evidence that Chapman offered a lower-cost, fully online version of the same
program, which undercut the students’ argument that they paid for a premium in-person experience but received something materially different. The Court also found that Chapman’s communications about reopening, which described in-person instruction as a “goal” and expressing “optimism” subject to external approval, were aspirational and contingent, and therefore the opposite of specific promises.
The Court also rejected the students’ unjust enrichment and unfair business practices claims, concluding that the students received the benefit of their bargain by completing their coursework and earning degrees. Because no specific promise of in-person instruction existed, there was no basis for relief.
Grant v. Chapman University (2026) 118 Cal.App.5th 453.
Note:
This case is an important reminder that courts may look to school publications, websites, handbooks, and communications to assess whether a school has made enforceable promises to students or families.
misconduct
Medical Student’s Discrimination And Breach Of Contract Claims Dismissed Following Discipline For Student’s Confrontation With Professor.
Brandon Meng, a medical student at William Carey University’s College of Osteopathic Medicine, filed suit after a disciplinary incident led to his removal from campus and ultimately his inability to continue in the program. Meng, a Canadian citizen of Chinese ethnicity, alleged that the University and its administrators discriminated against him, breached contractual obligations, and effectively forced him to withdraw following a confrontation with a professor.
The dispute began in September 2023, when Meng missed a class due to nausea and flu-like symptoms and exchanged communications with a pathology professor regarding his absence. According to Meng, those communications escalated, with the professor suggesting that he be tested for tuberculosis. Concerned that such a diagnosis could significantly delay his studies, Meng went to the professor’s office that evening to discuss the issue. During that meeting, Meng alleged that the professor accused him of having tuberculosis without medical evidence and that the conversation became confrontational. Meng also questioned whether the professor’s conduct was influenced by his Chinese background.
Following the incident, the professor reported the interaction to University leadership, allegedly describing Meng as unstable and potentially threatening. Within a short period of time, the Dean had Meng escorted off campus by security before any formal disciplinary proceedings had occurred. The University then initiated its disciplinary process under the Student Affairs Committee, which held two separate hearings on allegations of unprofessional conduct.
After both hearings, the Committee recommended that the matter be dismissed. However, the Dean exercised his authority as the final decisionmaker and issued a “Non-Academic Warning” to Meng for the remainder of the academic year. The warning outlined expectations for future conduct and directed Meng on how to resume his studies. Meng alleged that, despite these instructions, subsequent communications from University officials were inconsistent and left him uncertain how to return, and that the combination of the disciplinary action and academic requirements ultimately prevented him from completing the program within the required six-year timeframe.
Meng asserted a wide range of claims, including discrimination under Title VI and multiple breach of contract theories based on the student handbook.
The Court dismissed all claims. With respect to the Title VI discrimination claim, the Court emphasized that the statute requires allegations of intentional discrimination. The Court found that Meng relied
primarily on his subjective belief that the professor’s actions were motivated by his ethnicity, without identifying any statements or conduct that plausibly suggested discriminatory intent. The professor’s communications about a potential medical condition and prior allegedly rude comment that Meng reminded him of another classmate did not reference Meng’s race or national origin and thus did not support an inference of discrimination.
Meng’s breach of contract claims likewise failed. Although Mississippi law recognizes that a student-university relationship can have contractual aspects, the Court found that the University’s student handbook expressly disclaimed any intent to create a binding contract. Because the handbook stated that it did not constitute a legally binding agreement, Meng could not rely on its provisions as enforceable contractual terms.
The Court further held that, even under an implied contract theory, Meng failed to state a claim. Courts afford private universities significant discretion in disciplinary matters, and the relevant question is whether the process was fundamentally fair and not arbitrary or capricious. Here, Meng received notice of the allegations, participated in multiple hearings, and had an opportunity to present his version of events. The fact that the Dean reached a different conclusion than the committee did not render the process unfair.
Accordingly, the Court granted the defendants’ motions to dismiss.
Meng v. William Carey University (S.D. Miss. 2026) 2026 WL 147539.
Note:
This case highlights that in handling student discipline matters, the process should be fundamentally fair, which includes providing a student with notice of the charges and an opportunity to respond. Because the University met that standard, the fact that the Dean reached a different conclusion than the committee did not render the process unfair.
governance
Court Dismisses Defamation and Fiduciary Claims by Removed University Trustee, Allows First Amendment Claim To Proceed.
Barry Fenchak served as an alumni-elected member of the Board of Trustees of Pennsylvania State University from 2022 to 2025. Fenchak filed suit after he was removed from the Board following a series of disputes with University leadership over financial transparency and governance. He alleged that the University and certain Board officials defamed him, breached fiduciary duties, and retaliated against him for exercising his First Amendment rights.
During his tenure, Fenchak frequently sought access to detailed financial information, particularly regarding administrative fees associated with the University’s endowment and the terms of a proposed long-term contract with Elevate Collegiate Ticketing, LLC, which was tied to a renovation project for the University’s football stadium. He reviewed publicly available IRS Form 990 filings and became concerned that administrative fees had increased significantly in recent years. Fenchak repeatedly requested underlying data and documentation supporting those figures, but his requests were denied by Board leadership, who cited confidentiality obligations and internal governance rules.
In July 2024, Fenchak filed a lawsuit in Pennsylvania state court seeking to compel the production of financial records related to the endowment and the Elevate contract. Around the same time, the Board continued to consider and ultimately approved aspects of the Elevaterelated project during public meetings, even as Fenchak raised concerns about the lack of transparency. He also publicly questioned why certain trustees were granted access to the contract while others were not.
Following these events, tensions between Fenchak and University leadership escalated. In July 2024, shortly after filing his lawsuit, Fenchak attended a Board meeting where he made a remark to University employees comparing a hat to a male body part, which
was later characterized as inappropriate and led to a sexual harassment investigation.
As the investigation proceeded, the Board also amended its bylaws to expand the authority of board leadership. The amendments allowed the Board chair to restrict trustees’ access to certain University information and granted leadership broader authority to discipline or remove trustees. After the investigation concluded, it was recommended that Fenchak be removed from the Board for violating the Trustee Code of Conduct.
On June 16, 2025, the Board voted 30 to 4 to remove Fenchak from his position and further determined that he would be ineligible to appear on the ballot in the upcoming alumni trustee election.
Fenchak then filed the present lawsuit asserting multiple claims. His defamation and false light claims were based on the public filing of an August 20, 2024 letter from University officials explaining why his requests for financial information had been denied. He alleged that the publication of the letter portrayed him in a false and damaging light.
The Court dismissed those claims, holding that the statements were protected by Pennsylvania’s doctrine of judicial privilege. Under that doctrine, statements made in the course of judicial proceedings are absolutely immune from defamation claims so long as they are pertinent to the issues in the case. The Court found that the letter was filed as part of the University’s pleadings in Fenchak’s earlier lawsuit and was directly related to the dispute over access to financial information.
The Court also dismissed Fenchak’s fiduciary duty claim. It explained that, under Pennsylvania law, directors of a nonprofit corporation owe fiduciary duties to the corporation itself, not to individual board members. As a result, Fenchak could not bring an individual claim for breach of fiduciary duty based on actions taken by other trustees.
Fenchak’s constitutional claims presented a more complex issue. He alleged that his removal from the Board was retaliation for his speech, including his public
criticism of University leadership and his efforts to obtain financial transparency. The defendants argued that his speech was not protected under the First Amendment because he was speaking in his official capacity as a trustee.
The Court declined to dismiss the First Amendment claim at this stage. It explained that existing precedent limits First Amendment protection for public employees speaking pursuant to their official duties. However, the Court noted that it is unsettled whether those principles apply in the same way to elected officials, such as alumni-elected trustees. The Court observed that elected officials are not subject to the same employer control as traditional public employees and that courts have recognized greater protection for their speech. Given this uncertainty and the factual questions surrounding Fenchak’s role and the nature of his speech, the Court allowed the First Amendment retaliation claim to proceed.
Fenchak v. Pa. State University (E.D.Pa. Apr. 17, 2026) 2026 WL 1045065.
Note:
LCW covered this case previously. While private school trustees do not have First Amendment protections, this case is a reminder that schools should have clear governance practices around trustee conduct and the process for addressing disputes between board members and school leadership.
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did you know...?
•The U.S. Department of Education is investigating Stanford University under Title VI to determine whether a program supporting teacher certification for educators who identify as people of color constitutes unlawful race-based discrimination. Title VI prohibits discrimination in federally funded education programs, and the case may test how that standard applies to targeted diversity initiatives. Stanford has since discontinued the program and is no longer accepting new participants.
•The U.S. Department of Education’s Office for Civil Rights (OCR) has opened new investigations into Harvard University regarding alleged race-based admissions practices and failure to address antisemitic harassment on campus. OCR is examining whether Harvard continues to use race in admissions despite the Supreme Court’s 2023 decision prohibiting such practices under Title VI, and has also raised concerns about the University’s response to complaints from Jewish students. In addition, OCR issued a notice of impending enforcement action after Harvard declined to provide requested admissions data, warning that failure to comply within 20 days could result in referral to the U.S. Department of Justice.
•Maryland lawmakers are considering legislation that would expand the state’s authority to enforce civil rights laws against private schools, including religious schools, by allowing the Maryland Commission on Civil Rights to investigate and file lawsuits alleging discrimination based on protected characteristics such as gender identity.
cases we are watching
• The U.S. Supreme Court has agreed to hear a case challenging whether religious preschools participating in Colorado’s universal preschool program must comply with nondiscrimination requirements related to LGBTQ+ families. The Court is expected to clarify how Free Exercise claims should be analyzed when laws appear neutral but include exceptions, and whether recent decisions like Carson v. Makin (which held that states cannot exclude religious schools from public funding programs based on their religious use) alter that framework. The ruling could significantly impact how states structure public funding programs that include private schools.
• A federal lawsuit was filed by Students for Fair Admissions, the entity that brought suit against Harvard and the University of North Caroline on their admissions policies. This lawsuit challenges the admissions policy of Kamehameha Schools, a private K–12 school system in Hawaii that gives preference to applicants of Native Hawaiian ancestry. The lawsuit alleges that Kamehameha Schools in practice admits non–Native Hawaiian students only if seats remain after all qualified Native Hawaiian applicants are accepted, a circumstance the complaint alleges effectively never occurs. Kamehameha Schools is a large, privately funded educational trust in Hawaii operating multiple campuses and serving thousands of students, and admissions requires families to enter into multiple agreements, including application and tuition contracts. The plaintiffs argue that this structure creates a race-based barrier to contracting in violation of federal law. The case is also drawing attention as the court considers whether the student plaintiffs may proceed anonymously due to reported threats, while the underlying claims raise significant questions about race-based admissions policies at private schools.
• Families of victims of a mass shooting in Canada have filed multiple lawsuits against OpenAI in federal court in California, alleging that ChatGPT’s design contributed to the attacker’s conduct and that the company failed to report credible threats to law enforcement. The complaints assert product liability–type theories, claiming the platform engaged with and reinforced violent planning over time. These cases reflect a growing wave of litigation testing whether AI developers can be held liable for design choices and safety measures.
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MAY
Schools with more than 100 employees: submit annual pay data to the California Department of Civil Rights (due 5/13/26).
Complete hiring of new employees for next school year.
Complete hiring for any summer programs.
If service agreements expire at the end of the school year, review service agreements to determine whether to change service providers (e.g., janitorial services, if applicable).
• Employees of a contracted entity are required to be fingerprinted pursuant to Education Code Section 33192, if they provide the following services:
School and classroom janitorial.
School site administrative.
School site grounds and landscape maintenance.
Pupil transportation.
School site food-related.
• A private school contracting with an entity for construction, reconstruction, rehabilitation, or repair of school facilities where the employees of the entity will have contact, other than limited contact, with pupils, must ensure one of the following:
There is a physical barrier at the worksite to limit contact with pupils.
There is continual supervision and monitoring of all employees of that entity, which may include either:
◆ Surveillance of employees of the entity by School personnel; or
◆ Supervision by an employee of the entity who the Department of Justice has ascertained has not been convicted of a violent or serious felony, which may be done by fingerprinting pursuant to Education Code Section 33192. (See Education Code Section 33193).
If conducting end of school year fundraising:
• Raffles:
Qualified tax-exempt organizations, including nonprofit educational organizations, may conduct raffles under Penal Code Section 320.5.
In order to comply with Penal Code Section 320.5, raffles must meet all of the following requirements:
◆ Each ticket must be sold with a detachable coupon or stub, and both the ticket and its associated coupon must be marked with a unique and matching identifier.
◆ Winners of the prizes must be determined by draw from among the coupons or stubs. The draw must be conducted in California under the supervision of a natural person who is 18 years of age or older.
practices
Each Month, LCW presents a monthly timeline of best practices for private and independent schools. The timeline runs from the fall semester through the end of summer break. LCW encourages schools to use the timeline as a guideline throughout the school year.
◆ At least 90 percent of the gross receipts generated from the sale of raffle tickets for any given draw must be used to benefit the school or provide support for beneficial or charitable purposes.
50/50 raffles may only be conducted by major league sports nonprofits.
• Auctions:
The School must charge sales or use tax on merchandise or goods donated by a donor who paid sales or use tax at time of purchase.
◆ Donations of gift cards, gift certificates, services, or cash donations are not subject to sales tax since there is not an exchange of merchandise or goods.
◆ Items withdrawn from a seller’s inventory and donated directly to nonprofit schools located in California are not subject to use tax.
◊ For example, if a business donates items that it sells directly to the School for the auction, the School does not have to charge sales or use taxes. However, if a parent goes out and purchases items to donate to an auction (unless those items are gift certificates, gift cards, or services), the School will need to charge sales or use taxes on those items.
JUNE
By June 30, 2026, complete training for all current mandated reporters under SB 848. Moving forward, develop a process for all mandated reporters to
complete the training within the first six weeks of each school year, within the first six weeks of that person’s employment, or within six weeks of commencing volunteer services.
Conduct exit interviews:
• Conduct at the end of the school year for employees who are leaving (whether voluntarily or not). These interviews can be used to improve the organization and can help defend a lawsuit if a disgruntled employee decides to sue.
MID-JUNE THROUGH END OF JULY
Update Professional Boundaries Policy.
• Effective July 1, 2026, schools must adopt a written policy applicable to employees, volunteers, and contractors addressing appropriate conduct in adult-student, student-student, and adult-adult interactions, including electronic communications.
Adopt Facilities and Supervision Plan:
• Effective July 1, 2026, schools must adopt a written plan designed to promote visibility, ensure adequate supervision, and reduce the risk of unsupervised contact between students and adults.
Update Employee and Student/Parent Handbooks:
• The handbooks should be reviewed at the end of the school year to confirm that the policies are legally compliant, consistent with the employment agreements and enrollment agreements that were executed, and current with the latest best practice recommendations. The school should also add any
Conduct review of the school’s Bylaws (does not necessarily need to be done every year).
Review of insurance benefit plans:
• Review the school’s insurance plans, in order to determine whether to change insurance carriers. Insurance plans expire throughout the year depending on your plan. We recommend starting the review process at least three months prior to the expiration of your insurance plan.
• Workers Compensation Insurance plans generally expire on July 1.
• Other insurance policies generally expire between July 1 and December 1.
AUGUST
Conduct staff trainings, which may include:
• Sexual Harassment Training:
A school with five or more employees, including temporary or seasonal employees, must provide sexual harassment training to both supervisory and nonsupervisory employees every two years. Supervisory employees must receive at least two hours and nonsupervisory employees must receive at least one hour of sexual harassment training. (California Government Code Section 12950.1.)
• Mandated Reporter Training:
Prior to commencing employment, all mandated reporters must sign a statement to the effect that they have knowledge of the provisions of the Mandated Reporter Law and will comply with those provisions. (California Penal Code Section 11166.5.)
• Maintaining Professional Boundaries
• Risk Management Training such as Injury and Illness Prevention and CPR.
Conduct Board / Governance Training, which may include:
• Fiduciary Duties
• Legal Compliance & Risk Management
• Governance Best Practices
Distribute Parent/Student Handbooks and collect signed acknowledgement of receipt forms, signed photo release forms, signed student technology use policy forms, and updated emergency contact forms.
benefits Corner
Court Dismisses Challenge To Employer’s Health Plan Surcharge As Untimely Despite Violation.
Res-Care is a home- and community-based health services enterprise that serves individuals in need of specialized medical care. Res-Care offered its employees a health benefit plan. In January 2020, Res-Care began assessing a monthly $50 surcharge as part of the health benefit plan for employees who had used tobacco products within the previous six months (referred to as the “tobacco surcharge”). The tobacco surcharge increased to $100 per month if both the employee and their spouse/domestic partner used tobacco products. The purpose of the tobacco surcharge was to promote a healthy lifestyle and to provide an incentive to not use tobacco. Res-Care’s benefits catalogue explained that employees could avoid the tobacco surcharge by enrolling in and successfully completing a tobacco cessation program through Res-Care’s Employee Assistance Program.
Plaintiff Minda Wiederhold worked at Res-Care and was a tobacco user. During open enrollment, she was required to respond to a tobacco usage question before selecting a health insurance plan. The tobacco attestation form directed enrollees to indicate “yes” or “no” to whether they had “used tobacco products any time in the last six months.”
Wiederhold discovered the tobacco surcharge when she reviewed her earnings statement in January 2020. According to Wiederhold, she did not contest it because she had to have health insurance. She also did not read the specific language referring to a tobacco cessation program.
On January 8, 2024, Wiederhold filed a class action lawsuit challenging the lawfulness of the tobacco surcharge and seeking monetary reimbursement for all participants who paid the tobacco surcharge. She alleged the tobacco surcharge violated the nondiscrimination provision set forth in the Employment Retirement Income Security Act (“ERISA”) because it imposed a premium on plan participants based on their health status. ERISA contains a nondiscrimination provision prohibiting group health plans, such as that offered by Res-Care, from charging participants with a greater premium based on any health status-related factor. (29 U.S.C. section 1182(b).) However, there is an exception. A group health plan is allowed to offer a premium discount or rebate in exchange for participation in a bona fide wellness program. In other words, ERISA prohibits plans from requiring individuals to pay health-status related premiums unless such premium is avoidable through adherence to a bona fide wellness program. For the exception to apply, the plan must disclose the terms of the wellness program in all plan materials.
In litigation, Res-Care did not contest that the tobacco surcharge constituted a violation of ERISA’s nondiscrimination provision. However, Res-Care claimed Wiederhold brought the lawsuit too late and that the statute of limitations had lapsed. While the District Court found that Res-Care’s tobacco surcharge violated the nondiscrimination rules, the District Court ultimately agreed with Res-Care on the statute of limitations issue. The District Court found that the undisputed record showed that Wiederhold had gained actual knowledge of the facts essential to her claim in January 2020, which triggered ERISA’s three-year statute of limitations, as opposed to ERISA’s longer six-year statute of limitations that applies when the plaintiff does not gain actual knowledge of the breach or violation. Since Wiederhold initiated the lawsuit one year after the three-year statute of limitations ended, the District Court rendered her claims untimely and granted Res-Care’s motion for summary judgment.
Wiederhold v. Res-Care, Inc. (S.D.Ind. Mar. 31, 2026, No. 4:24-cv-00003-SEB-TAB) 2026 WL 874928.
Note:
There could be other legal risks with charging employees a surcharge or higher rate based on their health status. If a benefit is more costly for employees because of their health status which could arise from a disability, there are risks of disability discrimination under the American with Disabilities Act and Fair Employment and Housing Act.
Benefits Compliance Question
Question: Is a tool allowance excludable from an employee’s gross income?
Answer: It depends on how the tool allowance is set up. When cash allowances are provided to employees for tools, the allowance is excludable from an employee’s gross income if it qualifies as a “working condition fringe benefit.”
To set up a working condition fringe benefit for a tool allowance, employees need to verify to the employer that the payment is actually used for tools needed to perform the job. Employees must submit receipts or other supporting documentation, and employees need to return any unused allowances to the employer.
In 2005, the IRS issued Revenue Ruling 2005-52, which provided guidance that a tool allowance that was determined by estimates (instead of actual costs) was included in gross income (i.e., taxable). In Revenue Ruling 2005-52, employees were given an allowance based on an estimate of tool costs for the hours they worked. The employees were not required to submit receipts or other supporting documentation, nor were they required to return amounts in excess of substantiated expenses, which is why the IRS determined their tool allowance was taxable.
Consortium Call Of The Month
LCW has four private education consortiums across the State! Consortium members enjoy access to quality training throughout the year, discounts on other LCW products and events, and unlimited, complimentary telephone and email consultation with an LCW private education attorney on matters related to employment and education law questions (including business & facilities questions and student issues!) We’ve outlined a recent consortium call and the provided answer below. Client confidentiality is paramount to us; we change and omit details in the Consortium Call of the Month.
Question:
A Human Resources Manager contacted LCW with a question about providing paid sick leave to temporary workers. The administrator said that she noticed the CA Department of Industrial Relations website said that employers must provide at least 40 hours or five days of paid sick leave each year to full-time, part-time, and temporary workers who have worked for the same California employer for at least 30 days within the year and who have completed a 90-day employment period before taking any paid sick leave. The administrator noted that the School has summer camp counselors who work for less than 90 days from mid-June to August, and she did not know if the School needed to provide them with paid sick leave.
Answer:
The LCW attorney advised that California’s Paid Sick Leave Law applies to summer camp counselors even though they are short-term employees. Because these employees will work at least 30 days in California, they are eligible to accrue paid sick leave. However, because the law allows employers to require employees to complete 90 days of employment before using accrued leave and assuming the School has language reflecting this in their sick leave policy, the counselors generally will not be able to use any leave while employed. The LCW attorney advised that if a counselor is rehired within 12 months, the School will need to reinstate any previously accrued, unused sick leave, and the counselor’s prior days worked will count towards satisfying the 90-day waiting period.
Liebert Cassidy Whitmore