As the country emerges from the shutdown resulting from COVID-19 pandemic, planning will be essential to ensure workplace safety and to avoid legal complications. To assist in this effort, guidance has been offered by federal and state governments, as well as by the private sector. Rules and guidance established by governmental entities, in particular an organization’s home state and locality, should be carefully reviewed and followed to ensure legal compliance.

Employment disputes are common and can quickly result in litigation. Whether tried before a jury, before an arbitrator, or before an administrative agency, employment litigation is expensive, time-consuming, and risky, and can result in unwanted front-page news. Faced with these concerns, many companies have adopted arbitration policies. But this approach has not gone unchallenged. For example, courts in California courts have often found arbitration agreements to be procedurally or substantively “unconscionable,” or both, and hence unenforceable. And last year the California legislature passed a law that would have banned arbitration as a condition for employment. While that legislation has been enjoined (as to arbitration agreements governed by the Federal Arbitration Act), if history is any guide, there will more challenges to come.

This whitepaper examines some of the reasons why nonprofit organizations in California that are animated by Catholic values and/or formed to engage in apostolic endeavors should consider incorporating as Nonprofit Religious Corporations, even if such organizations are not directly tied to the hierarchy or a religious order. Before determining the appropriate form of corporation for your organization, you should consult with an attorney who is licensed in California and familiar with nonprofit corporate law.

The loan forgiveness opportunity included in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Paycheck Protection Program (“PPP”) loan is perhaps the program’s greatest feature. Indeed, many nonprofits and for-profit small businesses that might otherwise have shut down were able to stay in business because of this financial relief. In June 2020, the PPP Flexibility Act further adjusted the terms of the PPP to the benefit of borrowers, expanding the availability of loan forgiveness.

Increasingly, the daily headlines feature allegations of misconduct by the leaders of churches and religious tax-exempt organizations. [2] Typical stories describe an insider’s use of the tax-exempt organizations’ assets, such as a private plane, funds, or business opportunities, for the benefit of the insider or a favored person. Even if misconduct allegations are later shown to be unfounded, such stories can permanently harm an organization and, perhaps worse, the people it serves. Trustworthiness in fact and appearance is critical for religious organizations, especially if they are donor funded.