Seyfarth Shaw http://www.seyfarth.com News for website http://www.seyfarth.com en-us email Copyright 2011 https://www.seyfarth.com:443/news/babsonbloomberglaw092019 Marshall Babson quoted in Bloomberg Law https://www.seyfarth.com:443/news/babsonbloomberglaw092019 Fri, 20 Sep 2019 00:00:00 -0400 <p> Marshall Babson was quoted in a September 20 story from Bloomberg Law, &quot;Limited Options for Unions When Labor Board Nixes Election Win.&quot; Babson said that, nevertheless, organized labor has considerable latitude in choosing the timing and scope of union elections, and winning representational rights at a facility is a big deal.</p> https://www.seyfarth.com:443/publications/PM091919-LE Seyfarth Shaw Policy Matters Newsletter - September 19, 2019 https://www.seyfarth.com:443/publications/PM091919-LE Fri, 20 Sep 2019 00:00:00 -0400 <p> <strong>Scalia One Step Closer to Secretary of Labor</strong>. Today, the Senate HELP Committee held a <a href="https://www.help.senate.gov/hearings/nomination-of-eugene-scalia-to-serve-as-secretary-of-labor-exec">hearing</a> on the nomination of Eugene Scalia to serve as Secretary of Labor. The hearing went as expected, with Republican Senators generally supportive of his nomination, and Democratic Senators expressing concern about his record of representing employers, as well as the amount of time provided to review his record. It appears at this point, however, that we are looking only at the question of &ldquo;when&rdquo; &mdash; not &ldquo;whether&rdquo; &mdash; we will see Secretary Scalia.<br /> <br /> <strong>Salary Level Increase About to Get Real.</strong> The White House Office of Management and Budget Office of Information and Regulatory Affairs has <a href="https://www.reginfo.gov/public/do/eoReviewSearch">completed its review</a> of the Final Rule increasing the salary threshold required for the Part 541 exemption under the FLSA. This is one of the final steps before the Labor Department publishes the Final Rule in the Federal Register. The proposed rule set the standard level at $35,308, and the highly compensated employee threshold at $147,414. No word yet on what to expect in the Final Rule.<br /> <br /> <strong>&ldquo;Per Country&rdquo; Bill to Hit Senate Floor?</strong>&nbsp; You will recall that the House passed The Fairness for High Skilled Immigrants Act, <a href="https://www.congress.gov/bill/116th-congress/house-bill/1044">H.R. 1044</a>, on July 10 by the wide margin of 365 - 65.&nbsp; The Senate was poised to take up its version of the bill, <a href="https://www.congress.gov/bill/116th-congress/senate-bill/386">S. 386</a>, today (by unanimous consent), but objections were again raised, this time by Senator Perdue.&nbsp; Senator Rand Paul earlier had objected to the bill due to concerns over how it would impact nursing shortages; those concerns apparently have been resolved.&nbsp; Another key player &mdash; Senator Grassley &mdash; is also reportedly on board with the bill, now that certain changes to H-1B procedures had been incorporated.&nbsp; Stay tuned.....<br /> <br /> <strong>Independent Contractors Take Center Stage.</strong> Fresh on the heels of the Governor <a href="https://www.calpeculiarities.com/2019/09/17/who-are-independent-contractors-throw-your-hands-up-at-me/">signing California&rsquo;s AB5</a>, the House Workforce Protections Subcommittee has announced a <a href="https://edlabor.house.gov/hearings/misclassification-of-employees-examining-the-costs-to-workers-businesses-and-the-economy">hearing</a> next week on &ldquo;Misclassification of Employees: Examining the Costs to Workers, Businesses, and the Economy&rdquo;. More on the hearing in next week&rsquo;s Policy Matters.<br /> <br /> <strong>California Legislative Update.</strong> Last Friday marked the Legislature&rsquo;s last day to pass bills to Governor Newsom&rsquo;s desk for approval in the first year of the 2019-2020 Legislative Session. <a href="https://www.calpeculiarities.com/2019/09/19/california-employment-legislative-update-governor-newsom-gets-to-work/">Seyfarth&rsquo;s California Peculiarities blog</a> has all the key updates.</p> https://www.seyfarth.com:443/publications/MA092019-LE New Jersey Releases Guidance Clarifying Stance on Hairstyle Discrimination https://www.seyfarth.com:443/publications/MA092019-LE Fri, 20 Sep 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis: </strong>The New Jersey Division on Civil Rights recently released guidance clarifying that existing anti-discrimination laws prohibit employers from taking adverse employment actions or applying a grooming policy against an employee or applicant because of the employee&rsquo;s natural hair growth and texture. This announcement is part of a growing trend that follows similar efforts earlier this year in New York and California.</em></p> <p> On September 18, 2019, the New Jersey Division on Civil Rights (&ldquo;DCR&rdquo;) issued <a href="https://www.nj.gov/oag/newsreleases19/DCR-Hair-Discrimination-Guidance.pdf">official guidance</a> which clarifies that the DCR interprets the New Jersey Law Against Discrimination&rsquo;s (&ldquo;LAD&rdquo;) existing ban of race-based discrimination to include discrimination based on hairstyles, particularly as it applies to hairstyles closely associated with Black people. The DCR observed that Black people have historically suffered discrimination in the employment context and otherwise based on hairstyles that are inextricably linked or associated with being Black, in that the hair of many Black people when grown out naturally forms or can be formed into a variety of hairstyles including &ldquo;locs, cornrows, twists, braids, Afros, fades, and Bantu knots, all of which are closely associated with Black people.&rdquo;&nbsp;</p> <p> <strong>DCR&rsquo;s Interpretation of the LAD</strong></p> <p> The DCR announced its understanding that the LAD prohibits employers, as a general matter, from enforcing &ldquo;grooming or appearance policies that ban, limit, or restrict hair styled into twists, braids, cornrows, Afros, locs, Bantu knots, fades, or other hairstyles closely associated with Black racial, cultural, and ethnic identity.&rdquo; In so doing, the DCR outlined three broad areas it believes violates the LAD. First, the guidance notes that &ldquo;[a]ny policy specifically singling out such a hairstyle will generally constitute direct evidence of disparate treatment under the LAD and unlawful discrimination on the basis of race.&rdquo;&nbsp;</p> <p> Second, the DCR stated that even if a grooming policy is facially neutral in that it requires employees to maintain a &ldquo;professional&rdquo; or &ldquo;tidy&rdquo; appearance, the policy will violate the LAD if it is applied disproportionately against Black people, &ldquo;such as if Black people with shoulder-length locs or braids are told that they cannot maintain their hairstyle because it is not &lsquo;tidy,&rsquo; whereas white people with shoulder-length hair are not told to change their hair.&rdquo;&nbsp;</p> <p> Third, a company cannot enforce an appearance policy that practically discriminates against employees with hairstyles closely associated with Black people by claiming that it seeks to project a &ldquo;corporate image&rdquo; or to satisfy customers&rsquo; preferences. Such justifications will not be sufficient to overcome an inference of discriminatory intent.&nbsp; Moreover, any health or safety concerns an employer raises in defense of such a policy must be &ldquo;rooted in objective, factual evidence&mdash;not generalized assumptions&mdash;that the hairstyle in question would actually present a materially enhanced risk of harm to the wearer or to others.&rdquo;&nbsp;</p> <p> The guidance concludes by providing the following examples of a potential LAD violation: &ldquo;An employer denying a promotion or bonus to, failing to address harassment or a hostile work environment against, imposing unfair work conditions on, or otherwise adversely disadvantaging an employee for wearing locs.&rdquo;&nbsp;</p> <p> <strong>Changes Sweeping the Nation</strong></p> <p> As the guidance notes, and as we have discussed in previous client alerts, the DCR&rsquo;s interpretation of existing race-discrimination bans to include enforcing appearance policies against those with hairstyles closely associated with Black people follows a growing trend at the state and local level to protect hairstyles associated with specific races or religions. In July 2019, California and New York State both amended their respective anti-discrimination laws to clarify that the term &ldquo;race&rdquo; includes &ldquo;hair texture and protective hairstyles,&rdquo; including &ldquo;braids, locks, and twists,&rdquo; such that the existing prohibitions on racial discrimination also prohibit discrimination against Black people because of hairstyles closely associated with being Black. Additionally, in February 2019, <a href="https://www.seyfarth.com/publications/MA022619-LE">New York City issued guidance</a> similar to that of the DCR clarifying that New York City&rsquo;s existing race discrimination laws include hairstyle-based discrimination.&nbsp; Finally, <a href="https://www.seyfarth.com/publications/OMM081619-LE">New York State amended its anti-discrimination laws</a> in August 2019 to explicitly prohibit any discriminatory act based upon &ldquo;the wearing of any attire, clothing, or facial hair in accordance with the requirements of his or her religion . . . .&rdquo;&nbsp;</p> <p> <strong>Employer Takeaways</strong></p> <p> &nbsp;</p> <p> Employers should recognize, however, that the DCR&rsquo;s guidance is not a legislative amendment to the LAD; rather, it reflects this administrative body&rsquo;s interpretation of the existing version of the LAD.&nbsp; As such, while the DCR will certainly follow the guidance in carrying out its investigatory and adjudicative responsibilities, courts are free to decide whether to defer to the guidance&rsquo;s interpretation of the law. Nevertheless, we continue to recommend that all employers with New Jersey operations, as well as those with operations in California, New York State, and/or New York City, should not only ensure that their grooming or appearance policies are facially neutral, but also consider whether the application of these policies or other actions related to the hair of an applicant or employee might be deemed discriminatory in a specific instance.</p> https://www.seyfarth.com:443/publications/CP091919 California Employment Legislative Update: Governor Newsom Gets to Work https://www.seyfarth.com:443/publications/CP091919 Thu, 19 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The California Legislature has passed a series of bills for Governor Newsom to consider. He now has until October 13 to approve or veto bills such as a Dynamex codification bill and a San Francisco-inspired lactation accommodation bill.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/09/19/california-employment-legislative-update-governor-newsom-gets-to-work/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT091919 The Week in Weed: September 20, 2019 https://www.seyfarth.com:443/publications/TBT091919 Thu, 19 Sep 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/09/the-week-in-weed-september-20-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA091919-LE PAGA Claims Limited to Recovery of Civil Penalties https://www.seyfarth.com:443/publications/MA091919-LE Thu, 19 Sep 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> The California Supreme Court has held that an individual may not seek unpaid wages under Labor Code section 558. Section 558 can be invoked only by the Labor Commissioner or by an individual suing under PAGA, and PAGA claims are limited to the recovery of civil penalties. ZB, N.A. v. Superior Court of San Diego County</em></p> <p> <strong>The Facts</strong></p> <p> Kalethia Lawson sued her employer, a bank called ZB, under California&rsquo;s Private Attorneys General Act (&ldquo;PAGA&rdquo;), and Labor Code section 558, seeking both the civil penalties and the unpaid wages that Section 558 references as remedies. ZB moved to compel enforcement of its arbitration agreement with Lawson, contending that she was required to arbitrate the portion of her Section 558 claim regarding wages (while acknowledging that the Section 558 claim for civil penalties was not arbitrable). The trial court agreed, bifurcating Lawson&rsquo;s action and compelling the unpaid wages issue to arbitration.</p> <p> The Court of Appeal disagreed, determining that Lawson, as an aggrieved employee, could pursue an entire, indivisible, Section 558 remedy through PAGA, and that such a claim could not be compelled to arbitration. The California Supreme Court agreed to review whether Section 558 claims for unpaid wages could be compelled to arbitration.</p> <p> <strong>The California Supreme Court&rsquo;s Decision</strong></p> <p> While the original question posed was whether claims for unpaid wages under Section 558 could be compelled to arbitration, the Supreme Court decided on its own to review a threshold issue: whether the unpaid wages that the Labor Commissioner can recover under Section 558 qualify as a &ldquo;civil penalty&rdquo; that an aggrieved employee can recover under PAGA. The Supreme Court determined that Section 558 does not authorize a private right of action: an aggrieved employee may invoke Section 558 only when bringing a PAGA action. Accordingly, determining whether an aggrieved employee can pursue a PAGA action hinged on whether the unpaid-wages remedy in Section 558 is a civil penalty.</p> <p> In resolving this issue, the Supreme Court focused on four things: (1) the language and legislative history of Section 558; (2) the fact that statutory damages seek to compensate employees for actual losses incurred, as opposed to penalties that seek to shape employer conduct; (3) an individual&rsquo;s ability to recover unpaid wages directly through a private civil action under Labor Code section 1194; and (4) the similarity in language between Sections 558 and 1197.1 (which provides for restitution of wages separate and apart from a civil penalty).</p> <p> Ultimately, the Supreme Court held that the wages remedy mentioned in Section 558 is not a civil penalty but rather is more akin to a damages remedy for withheld overtime premium wages. By categorizing Section 558 unpaid wages as compensatory and not a civil penalty, the Supreme Court rendered them unrecoverable through a PAGA action.</p> <p> <strong>What <em>ZB</em> Means to Employers</strong></p> <p> <em>ZB</em> is that rare example of a California judicial decision utilizing common sense and practical reasoning to limit the abuse of PAGA litigation. Unpaid employees already have ample means to recover unpaid wages, and the case law mischaracterizing them as PAGA &ldquo;penalties&rdquo;&mdash;pursuable without regard to arbitration agreements&mdash;created an anti-arbitration loophole that the Supreme Court has now closed. Moreover, the Supreme Court&rsquo;s ruling that PAGA recoveries are limited to &ldquo;civil penalties&rdquo; is likely to apply beyond Section 558. While an employee may still seek unpaid wages under Section 1194, for example, such a damages claim cannot be brought on a PAGA representative basis, and thus should be subject to any valid arbitration agreement that applies.</p> https://www.seyfarth.com:443/publications/ADA091819 THE SEVENTH CIRCUIT HOLDS “INDIGNATION” IS NOT AN INJURY-IN-FACT https://www.seyfarth.com:443/publications/ADA091819 Wed, 18 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In a recent decision, the Seventh Circuit agreed with the Fourth Circuit in holding that a plaintiff who is legally barred from using a credit union&rsquo;s services cannot demonstrate an injury in fact that can support standing to sue.<br /> <br /> <a href="https://www.adatitleiii.com/2019/09/the-seventh-circuit-holds-indignation-is-not-an-injury-in-fact/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA091819-LE A Day Late and Potentially Many Dollars Short: NY Appellate Court OK’s Liquidated Damages in Late Payment Case https://www.seyfarth.com:443/publications/MA091819-LE Wed, 18 Sep 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em>&nbsp; A New York appellate court recently held that New York employers may be liable for liquidated damages for failure to pay employees on a timely basis, even where the employees have been paid in full.</em></p> <p> In <em>Vega v. CM &amp; Assoc. Constr. Mgmt., LLC</em>, a construction worker sued her employer for paying her and her co-workers on a bi-weekly basis in violation of the New York Labor Law, which requires that non-exempt &ldquo;manual workers&rdquo; be paid on a weekly basis.&nbsp; As a remedy, the construction worker sought liquidated damages.</p> <p> On September 10, 2019, the Appellate Division, First Department, affirmed the lower court&rsquo;s order permitting the construction worker to proceed with her case.&nbsp; The decision, available <a href="http://www.courts.state.ny.us/reporter/3dseries/2019/2019_06459.htm">here</a>, held that liquidated damages are available where an employer pays its employees in full but fails to pay them on a timely basis.&nbsp;</p> <p> The court rejected the employer&rsquo;s argument that it had cured any potential violation &ldquo;by paying the wages that [were] due before the commencement of [the] action,&rdquo; holding that by that logic, employers could avoid liability for any wage violations by simply paying their employees whatever is owed prior to commencement of a lawsuit.</p> <p> The court was similarly unconvinced by the argument that the New York Labor Law provides remedies only for nonpayment or partial payment of wages &ndash; but not late payment.&nbsp; The court noted that even if employees are eventually paid their full wages, the late payments deprive them of &ldquo;the use of money&rdquo; during the delay.</p> <p> Notably, this decision involved non-exempt &ldquo;manual workers,&rdquo; which the New York Department of Labor broadly interprets to include any employees who spend more than 25 percent of their working time performing physical labor of any type, regardless of title or job description.&nbsp; Under this expansive definition, pizzeria workers, hairdressers, and even chauffeurs have been brought within the ambit of the pay frequency provisions governing &ldquo;manual workers.&rdquo;&nbsp; Exempt employees, commissioned salespersons, clerical workers and railroad workers are not subject to the weekly pay requirement under the New York Labor Law.</p> <p> <strong>Employer Takeaways</strong></p> <p> <em>Vega </em>highlights the significant liability that employers can incur based on a failure to timely remit wages. While this is just one appellate court decision, which may ultimately result in resolution by the Court of Appeals, employers would be well-served by reviewing their pay frequency practices to ensure that their employees are being paid on time.</p> https://www.seyfarth.com:443/publications/TS091719 Erik Weibust Co-Chairs the ABA Litigation Section’s Restrictive Covenants/Tortious Interference Subcommittee https://www.seyfarth.com:443/publications/TS091719 Tue, 17 Sep 2019 00:00:00 -0400 <p> Seyfarth Partner Erik Weibust was recently named as a co-chair of the Restrictive Covenants/Tortious Interference Subcommittee of the American Bar Association Litigation Section.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/09/articles/restrictive-covenants/erik-weibust-co-chairs-the-aba-litigation-sections-restrictive-covenants-tortious-interference-subcommittee/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT091719 FTC Issues Additional Three Warning Letters to CBD Companies https://www.seyfarth.com:443/publications/TBT091719 Tue, 17 Sep 2019 00:00:00 -0400 <p> On September 10, 2019, the Federal Trade Commission (FTC) sent warning letters to three companies that sold cannabidiol (CBD) products marketed with misleading claims that they could treat serious diseases. The FTC aims to &ldquo;protect consumers from unfair and deceptive practices in the marketplace,&rdquo; and accordingly has the responsibility of jointly overseeing marketing and advertising of products that fall under the U.S. Food &amp; Drug Administration&rsquo;s control. (In 2019, the FDA issued four warning letters, and publicly disclosed the names of the companies in question. We previously discussed these letters in an earlier article.) According to its press release, the FTC warned three companies that it is illegal to market cures or preventative features of a product without supporting &ldquo;competent and reliable scientific evidence.&rdquo; The FTC has not publicly identified the recipients of the letters.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/09/ftc-issues-additional-three-warning-letters-to-cbd-companies/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL091719 Second Circuit Rules Against Plaintiff in AutoZone Case and Allows Nixing of her Deposition https://www.seyfarth.com:443/publications/EL091719 Tue, 17 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In affirming summary judgment in favor of AutoZone, the Second Circuit rules that a sales associate did not provide enough evidence to satisfy her burden of proof for sex discrimination, retaliation and hostile work environment. This decision is significant because the court agreed that it was proper for a judge to exclude the former employee&rsquo;s flawed deposition testimony as evidence.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/09/second-circuit-rules-against-plaintiff-in-autozone-case-and-allows-nixing-of-her-deposition/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP091719 Who Are Independent (Contractors)? Throw Your Hands Up At Me! https://www.seyfarth.com:443/publications/CP091719 Tue, 17 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: California&rsquo;s hotly contested and closely followed AB 5 independent contractor bill, which would extend the ABC test beyond Wage Order claims, just passed the California Senate, and now heads back to the State Assembly for reconciliation before going to Governor Newsom&rsquo;s desk for his expected signature.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/09/17/who-are-independent-contractors-throw-your-hands-up-at-me/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/schreronyrej091719 Elizabeth Schrero profiled in the New York Real Estate Journal https://www.seyfarth.com:443/news/schreronyrej091719 Tue, 17 Sep 2019 00:00:00 -0400 <p> Elizabeth Schrero was profiled in a September 17 spotlight from the New York Real Estate Journal, &quot;2019 Women in Real Estate: Elizabeth Schrero, Seyfarth Shaw LLP.&quot; You can read the <a href="http://nyrej.com/2019-wire-ps-elizabeth-schrero-seyfarth-shaw-llp">full profile here</a>.</p> https://www.seyfarth.com:443/news/hendricksonblaw091619 Christine Hendrickson quoted in Bloomberg Law https://www.seyfarth.com:443/news/hendricksonblaw091619 Mon, 16 Sep 2019 00:00:00 -0400 <p> Christine Hendrickson was quoted in a September 16 story from Bloomberg Law, &quot;U.S. Pay Data Effort Could Fall Short Without Public Scrutiny.&quot; Hendrickson said that companies that operate in multiple jurisdictions must comply with the European models, the new U.S. federal attempt, as well as the various state attempts to address equal pay.</p> https://www.seyfarth.com:443/news/yangshrm091619 Simon Yang quoted in SHRM https://www.seyfarth.com:443/news/yangshrm091619 Mon, 16 Sep 2019 00:00:00 -0400 <p> Simon Yang was quoted in a September 16 story from SHRM, &quot;California Employees Can&rsquo;t Seek Back Pay Under PAGA.&quot; Yang said that the decision is a welcome dose of common sense. He said that PAGA was never intended to exempt unpaid wage claims from class certification procedures or class waivers in arbitration agreements. You can read the <a href="https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/california-employees-can-not-seek-back-pay-under-paga.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/OMM091619-LIT FTC Issues Additional Three Warning Letters to CBD Companies https://www.seyfarth.com:443/publications/OMM091619-LIT Mon, 16 Sep 2019 00:00:00 -0400 <div> On September 10, 2019, the Federal Trade Commission (FTC) sent warning letters to three companies that sold cannabidiol (CBD) products marketed with misleading claims that they could treat serious diseases.&nbsp; The FTC aims to &ldquo;protect consumers from unfair and deceptive practices in the marketplace,&rdquo; and accordingly has the responsibility of jointly overseeing marketing and advertising of products that fall under the U.S. Food &amp; Drug Administration&rsquo;s control.<sup>1</sup>&nbsp; According to its press release, the FTC warned three companies that it is illegal to market cures or preventative features of a product without supporting &ldquo;competent and reliable scientific evidence.&rdquo;&nbsp; The FTC has not publicly identified the recipients of the letters.</div> <div> &nbsp;</div> <div> The companies in question sold various products containing CBD, including oils, tinctures, capsules, creams, and &ldquo;gummies.&rdquo;&nbsp; Each company asserted its CBD product was able to cure or treat serious health concerns.&nbsp; One company claimed that its product could treat pain better than opioids and that CBD was &ldquo;clinically&rdquo; proven to treat a host of diseases, including Alzheimer&rsquo;s, cancer, and multiple sclerosis.&nbsp; That company cited to its participation in research with Harvard researchers.&nbsp; The other two companies likewise made similar claims that their CBD products could treat pain and other conditions (both physical and psychological), such as anxiety, depression, fibromyalgia, heart disease, and autism.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> In the letters, the FTC asked that the companies review their marketing claims and back those claims with competent and reliable scientific evidence.&nbsp; The companies have 15 days within receipt of the letter to respond to the FTC&rsquo;s inquiry.</div> <h3> Takeaways:&nbsp;</h3> <ol> <li> <strong>Increasing government interest in the CBD space:</strong> There is growing government interest in regulating the CBD space, as evidenced by the FTC and FDA 2019 warning letters.&nbsp; This is further underscored by the FDA&rsquo;s 2019 Working Group public hearings and <a href="https://twitter.com/DrAbernethyFDA/status/1149766448669216769">public comments</a>.&nbsp; CBD companies should understand and appreciate their potential risk exposure, which is largely governed by the Federal Food, Drug and Cosmetic Act (FD&amp;C Act) and Federal Trade Commission Act (FTC Act).&nbsp; To ensure compliance with these laws, each agency has its own enforcement measures with warning letters only being at the tip of the iceberg.&nbsp; The FTC, for example, may issue cease and desist orders and issue civil monetary penalties to violators.&nbsp; On the other hand, the FDA may seize products and issue injunctions.&nbsp;<br /> &nbsp;</li> <li> <strong>Watch what you say:</strong>&nbsp; It comes as no surprise that the FTC has highlighted the importance of claim substantiation.&nbsp; As the <a href="https://www.blunttruthlaw.com/2019/08/cbd-is-everywhere-but-where-does-the-fda-stand/">FDA Working Group</a> has stated, however, there is insufficient data available surrounding the implications and effects of CBD.&nbsp; Accordingly, companies selling CBD-products should be cautious in avoiding making unsubstantiated claims.&nbsp; To minimize exposure, company marketing teams should ensure that claims are properly substantiated by adequate and acceptable scientific evidence.&nbsp; The FTC has previously explained that &ldquo;&rsquo;competent and reliable <em>scientific </em>evidence&rsquo; means tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results.&rdquo;<sup>2</sup></li> </ol> <h3> How Seyfarth Help?</h3> <div> Seyfarth Shaw&rsquo;s Cannabis Law and False Advertising and Product Labeling &amp; Warning practice groups continue to monitor this space and are ready to assist companies with navigating this complicated and dynamic regulatory regime.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> <hr /> <p> <span style="font-size:9px;">1.&nbsp; In 2019, the FDA issued four warning letters, and publicly disclosed the names of the companies in question.&nbsp; We previously discussed these letters in an earlier <a href="https://www.seyfarth.com/publications/MA080519-LIT">article</a>.<br /> 2.&nbsp;&nbsp;<a href="https://www.ftc.gov/system/files/documents/cases/161212_1523229_mars_petcare_us_decision_and_order.pdf">Decision and Order</a>, Mars Petcare US, Inc., FTC Dkt. No. C-4599 (Dec. 13, 2016).</span></p> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/WC091319 Ohio Federal Judge Crafts An Unprecedented Class Action Mechanism To Bring Relief To Counties And Cities Struggling To Address Opioid Crisis https://www.seyfarth.com:443/publications/WC091319 Fri, 13 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In complex class actions, courts have looked to Rule 23 to authorize class actions either for trial, or for approval of a previously negotiated settlement. Now as thousands of public entities nationwide pursue financial relief from opiate manufacturers, distributors, and pharmacies, U.S. District Court Judge Daniel A. Polster has ordered into effect a third and &ldquo;innovative&rdquo; type of class action. In the litigation entitled In Re National Prescription Opiate Litigation, No. 1:17-MD-2804 (N.D. Ohio Sept. 11, 2019) the Court, over the objections of most of the state attorneys general in the U.S., has granted a &ldquo;negotiation class certification&rdquo; order allowing a nationwide class of public entities to negotiate potential settlement of the 2,000 pending lawsuits in this sweeping multidistrict litigation. For obvious reasons, the ruling of Judge Polster is well worth a read for any company involved in class action litigation.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/09/ohio-federal-judge-crafts-an-unprecedented-class-action-mechanism-to-bring-relief-to-counties-and-cities-struggling-to-address-opioid-crisis/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH091319 Fifth Circuit Hands Employers a Big Win, Rules Day Rates Can Satisfy the Salary Basis Under the Highly Compensated Employee Exemption https://www.seyfarth.com:443/publications/WH091319 Fri, 13 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Employers were handed a big win recently when the U.S. Court of Appeals for the Fifth Circuit held that a day rate can satisfy the salary basis requirement for overtime exemptions under FLSA and also advocated for an award of costs to the prevailing employer. Specifically, the Fifth Circuit held that a sufficiently-high, guaranteed day rate no less than $455 paid on a weekly or less frequent basis can be used to satisfy the salary basis requirement under the highly compensated employee exemption. The Fifth Circuit also remanded the lower court&rsquo;s decision denying costs to the prevailing employer, and directed the court to either award costs or articulate its reasons for declining to do so. Employers in the oil and gas industry and other sectors where day rates are common should read on, as should defense-side practitioners who can use this case to defend future overtime and contractor misclassification claims.<br /> <br /> <a href="https://www.wagehourlitigation.com/flsa/fifth-circuit-hands-employers-a-big-win-rules-day-rates-can-satisfy-the-salary-basis-under-the-highly-compensated-employee-exemption/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT091219 The Week in Weed: September 13, 2019 https://www.seyfarth.com:443/publications/TBT091219 Thu, 12 Sep 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/09/the-week-in-weed-september-13-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ERISA091219 The Check is in the Mail—Or Not https://www.seyfarth.com:443/publications/ERISA091219 Thu, 12 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The IRS recently issued somewhat helpful guidance to plan administrators on what to do about the constant problem of uncashed benefit checks from qualified retirement plans. The initial excitement upon hearing the news, however, was quickly met with disappointment as the realization set in that the guidance was limited.<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/09/12/the-check-is-in-the-mail-or-not/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA091119-LE California Senate Passes Hotly Contested AB 5 Independent Contractor Bill https://www.seyfarth.com:443/publications/MA091119-LE Wed, 11 Sep 2019 00:00:00 -0400 <div> <strong>Background On AB 5</strong></div> <div> &nbsp;</div> <div> The California Senate passed a landmark bill, Assembly Bill 5 (&ldquo;AB 5&rdquo;), on the evening of September 10, 2019, which could impact businesses&rsquo; relationships with independent contractors.&nbsp; AB 5 now goes back to the State Assembly, which must approve amendments to the bill before sending it to Gov. Gavin Newsom&rsquo;s desk.&nbsp; He is expected to sign the bill &mdash; which many industries and interest groups lobbied against &mdash; into law given his expressed support for it.</div> <div> &nbsp;</div> <div> AB 5 codifies the &ldquo;ABC&rdquo; test for employee status adopted in the California Supreme Court&rsquo;s 2018 decision in<em> Dynamex v. Superior Court</em>.&nbsp; In <em>Dynamex</em>, the California Supreme Court held that in order to defeat claims arising under California&rsquo;s Wage Orders premised on independent contractor misclassification, a defendant must prove (A) the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact; (B) the worker performs work outside the usual course of the hiring entity&rsquo;s business; and (C) the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.&nbsp;</div> <div> &nbsp;</div> <div> The bill expands the reach of <em>Dynamex</em> by making the &ldquo;ABC&rdquo; test the default test for <em>all</em> Labor Code, Unemployment Insurance Code and Wage Order claims.&nbsp; As a result, the ABC test will apply to a host of additional causes of action to which it previously did not apply, such as, for instance, claims for failure to reimburse necessary business expenses and failure to provide accurate wage statements.&nbsp; Consequently, the bill impacts businesses in industries across the board.&nbsp;</div> <div> &nbsp;</div> <div> In addition to expanding the applicability of the ABC test, AB 5 also broadens the potential liability to businesses that are found to have misclassified independent contractors.&nbsp; The bill empowers the State Attorney General and certain city attorneys to pursue injunctions against businesses suspected of misclassifying independent contractors.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> <strong>Exemptions From the ABC Test</strong></div> <div> &nbsp;</div> <div> Perhaps not surprisingly given the intense lobbying efforts by businesses, AB 5 contains numerous statutory exemptions from the ABC test.</div> <div> &nbsp;</div> <div> For instance, the bill contains a &ldquo;business-to-business&rdquo; exemption from the ABC test that applies to &ldquo;business service providers&rdquo; that contract to provide services to another business, provided that certain criteria are met.&nbsp; Likewise, &ldquo;service providers&rdquo; in certain fields, including graphic design, photography, tutoring, event planning, moving, home cleaning, pool and yard cleanup, animal services, web design and dog grooming and walking, may also qualify for an exemption from the ABC test.</div> <div> &nbsp;</div> <div> AB 5 also contains an exemption for &ldquo;professional services&rdquo; contracts, which covers occupations including: marketing, human resources administration, travel agents, graphic designers, grant writers, fine artists, agents licensed to practice before the IRS, payment processing agents, photographers and photojournalists, freelance writers, editors or cartoonists, and professionals providing cosmetic services (e.g., licensed barbers and manicurists).&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Other occupations which may be exempted from the ABC test under AB 5 include, but are not limited to: certain medical professionals; attorneys; architects; engineers; private investigators; registered securities brokers and dealers; commercial fishermen; real estate agents; construction subcontractors; and individuals providing roadside services pursuant to a contract between a motor club and a third party business.&nbsp; Assuming a companion bill to AB 5 is also passed into law, newspaper carriers will be exempted from the ABC test until 2021.</div> <div> &nbsp;</div> <div> <strong>What&rsquo;s Next?</strong></div> <div> &nbsp;</div> <div> Assuming AB 5 is signed into law, it will become effective on January 1, 2020 and may prompt a spike in litigation concerning independent contractor classification.&nbsp; With that said, it is anticipated that the law will be subject to numerous legal challenges.</div> <div> &nbsp;</div> <div> <strong>Want to Learn More?</strong></div> <div> &nbsp;</div> <div> <p> <strong>San Francisco:&nbsp; Seyfarth Roundtable for In House Counsel</strong></p> </div> <div> Please join us for an interactive roundtable discussion in San Francisco, developed to provide a forum for in-house counsel to discuss and analyze some of the most pressing wage and hour issues arising in the marketplace space, and also impacting companies in the broader economy.</div> <div> &nbsp;</div> <div> Some of the topics we expect to cover include:&nbsp;</div> <div> &nbsp;</div> <ul> <li> AB 5 and Strategies for Dealing with the New Legislation</li> <li> Post-Dynamex World: Worker Classification and Minimizing Risk</li> <li> Best Practices to Avoid Joint Employer Liability</li> <li> Class Action Waivers and the Influx of PAGA-Only Actions and Mass Arbitrations&nbsp;</li> <li> Successfully Managing Worker Reclassifications</li> <li> Strategies for Limiting Employer Liability With Respect to Mobile Devices and Remote Work</li> <li> On-Demand Pay: What to Watch Out For</li> </ul> <div> <br /> <strong><em>Details:</em></strong></div> <div> Wednesday, October 23, 2019</div> <div> 5:00 p.m. - 5:30 p.m. Registration</div> <div> 5:30 p.m. - 6:30 p.m. Program</div> <div> 6:30 p.m. - 7:30 p.m. Networking Reception</div> <div> &nbsp;</div> <div> <div> Please contact <a href="mailto:krustigian@seyfarth.com?subject=Seyfarth%20SF%20Wage%20and%20Hour%20Roundtable">Kelsey Rustigian</a> for more information and to register.</div> <div> &nbsp;</div> <div> <div> <strong>Other Related Events</strong></div> <div> &nbsp;</div> <div> <strong>Houston:&nbsp; ACC-Seyfarth Roundtable</strong></div> <div> <em>Thursday, October 10, 2019</em></div> <div> &nbsp;</div> <div> <strong>Boston:&nbsp; Seyfarth Roundtable</strong></div> <div> <em>Tuesday, November 5, 2019</em></div> <div> &nbsp;</div> <div> To get on the list, or to pre-register for either of these events, please&nbsp;<a href="mailto:clpeterson@seyfarth.com?subject=Related%20Events%20-%20AB%205">CLICK HERE</a>.</div> </div> <div> &nbsp;</div> <div> <em><strong>AB 5 Webinar</strong></em></div> <div> &nbsp;</div> <div> We are finalizing details for an upcoming webinar to discuss the recent developments around AB 5. If you would like to receive additional information on this webinar, please <a href="mailto:clpeterson@seyfarth.com?subject=Seyfarth%20Shaw%20AB%205%20Webinar">CLICK HERE</a>.</div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/ADA091119 California Court Of Appeal’s Midvale Decision Opens The Floodgates For More Website Accessibility Lawsuits https://www.seyfarth.com:443/publications/ADA091119 Wed, 11 Sep 2019 00:00:00 -0400 <p> Seyfarth synopsis: California Court of Appeal affirms ruling that inaccessible restaurant website violated the Unruh Act and orders that restaurant website comply with WCAG 2.0 Level AA.<br /> <br /> <a href="https://www.adatitleiii.com/2019/09/california-court-of-appeals-midvale-decision-opens-the-floodgates-for-more-website-accessibility-lawsuits/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/LR091119 NLRB Adopts “Contract Coverage” Standard, Making it Easier for Employers to Make Unilateral Changes Under their Collective Bargaining Agreements https://www.seyfarth.com:443/publications/LR091119 Wed, 11 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On September 10, in a 3-1 decision, the NLRB in MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019), adopted the &ldquo;contract coverage&rdquo; standard in replacement for its previous &ldquo;clear and unmistakable waiver&rdquo; standard for determining when a collective bargaining agreement allows an employer to take unilateral action. This decision makes it easier for employers to show that their collective bargaining agreements allows them to make unilateral changes and is consistent with the position the D.C. Circuit has taken for years.<br /> <br /> <a href="https://www.employerlaborrelations.com/2019/09/11/nlrb-adopts-contract-coverage-standard-making-it-easier-for-employers-to-make-unilateral-changes-under-their-collective-bargaining-agreements/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT091019 National Credit Union Administration Issues Statement About Serving Hemp Businesses https://www.seyfarth.com:443/publications/TBT091019 Tue, 10 Sep 2019 00:00:00 -0400 <p> Following last year&rsquo;s passage of the 2018 Farm Bill, the National Credit Union Administration (NCUA) issued a regulatory update in August of 2019 to federally insured credit unions. Citing growth in hemp-related commerce, the NCUA emphasized the need for credit unions to understand the gamut of regulation across jurisdictions in order to lend lawfully to hemp-related businesses. Within its memorandum to members, the NCUA provided: 1) a summary of repercussions generated by the 2018 Farm Bill, 2) specific compliance program concerns with regard to the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML), and 3) considerations under existing NCUA regulations for lending. As to the effects of the 2018 Farm Bill, the NCUA highlighted three points. First, as of December 20, 2018, hemp is no longer designated as a federally controlled substance. The industrial hemp pilot provisions under an earlier 2014 Farm Bill govern the lawful production of hemp; noncompliant production remains illegal. Under the 2018 Farm Bill, this pilot program will be terminated one year after the issuance of final hemp regulations and guidelines from the USDA. Second, the NCUA cautioned that notwithstanding these federal developments, state and Indian Tribe laws may still prohibit the production or possession of hemp. Yet, it also noted that states and Indian Tribes laws cannot prohibit the transportation of products produced lawfully under federal law. Last, the 2018 Farm Bill does not modify other existing statutes, including the Federal Food, Drug, and Cosmetic Act and Public Health Service Act, and existing regulations thereof. Nor does the bill affect the authority of the Health and Human Services Secretary or FDA Commissioner to promulgate new regulations under existing statutory powers. Apart from the 2018 Farm Bill, and state and Indian Tribe laws, the NCUA underscored several compliance program considerations for credit unions stemming specifically from the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML). First, as it otherwise would with regular accounts, credit unions need to maintain due diligence programs and file statutorily-required Suspicious Activity Reports (SAR) with respect to hemp-related accounts. However, absent unusual or unlawful activity for the account, credit unions need not typically file such reports. The NCUA instead stressed the need for robust compliance systems to detect unusual suspicious activities warranting such filings. Second, credit unions that service hemp-related businesses operating under the 2014 Farm Bill pilot provisions need to also understand the state laws, regulations, and agreements under which such businesses operate. For example, credit unions need to verify compliance of hemp businesses with the 2014 Farm Bill pilot program and adapt compliance programs to handle specific risks posed by pilot program participants. Last, when deciding whether to serve hemp-related businesses, credit unions also need to consider other applicable federal and state laws. For example, hemp products may soon fall into the purview of forthcoming FDA regulations. In addition to the federal, state, and Indian Tribe regulatory landscape, the NCUA also stressed that members need to be compliant with internal NCUA regulations, including those on commercial lending and underwriting. For example, the NCUA recognized that credit unions ought to consider the risks posed by businesses that rely on products subject to ever-changing federal and state health-related regulations. The NCUA&rsquo;s regulatory update serves as yet another reminder of the complexity associated with hemp-related regulations across all levels of government. Seyfarth Shaw&rsquo;s Cannabis Law Practice Group and Consumer Financial Services Practice Group continue to monitor this space and are ready to assist both current and prospective clients with navigating this complicated and dynamic regulatory regime.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/09/national-credit-union-administration-issues-statement-about-serving-hemp-businesses/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD091019 Seventh Circuit Limits Scope of Federal Trade Commission’s Enforcement Authority https://www.seyfarth.com:443/publications/CCD091019 Tue, 10 Sep 2019 00:00:00 -0400 <p> The Seventh Circuit issued a decision recently that eliminates an enforcement tool long used by the Federal Trade Commission (&ldquo;FTC&rdquo;)&mdash;the ability to obtain equitable monetary relief from defendants when the FTC challenges conduct under Section 13(b) of the Federal Trade Commission Act (&ldquo;FTC Act&rdquo;).<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/09/seventh-circuit-limits-scope-of-federal-trade-commissions-enforcement-authority/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/bauer091019 Employee Benefits Partner Jeffrey Bauer Joins Seyfarth’s Chicago Office https://www.seyfarth.com:443/news/bauer091019 Tue, 10 Sep 2019 00:00:00 -0400 <p> CHICAGO -- (September 10, 2019) -- Seyfarth Shaw LLP announced today the arrival of partner Jeffrey Bauer to the Employee Benefits &amp; Executive Compensation department in Chicago. Bauer joins from Dorsey &amp; Whitney LLP, where he was a partner in its Employee Benefits group in Minneapolis.</p> <p> Bauer&rsquo;s practice is focused on qualified and nonqualified retirement plans (including ESOPs), ERISA fiduciary law and executive compensation. He represents a broad range of employers, including private and public companies, government entities, and nonprofit organizations, on the design, operation and termination of all types of benefit plans and compensation arrangements.</p> <p> &ldquo;Jeff brings a multifaceted employee benefits practice and his corresponding results are lauded by clients and colleagues alike,&rdquo; said Diane Dygert, chair of Seyfarth&rsquo;s Employee Benefits &amp; Executive Compensation department. &ldquo;We are ecstatic to bring Jeff on board as an important, strategic addition to our growing benefits practice.&rdquo;</p> <p> As a certified public accountant, Bauer holds a unique skill-set in the financial accounting facets of employee benefits and executive compensation law. He often works with employers and fiduciaries on their fiduciary obligations under ERISA and counsels company stakeholders on the applicable ESOP laws involved in the purchase and sale of employer securities. In addition, he is knowledgeable in the many compensation and benefits issues that frequently result from ERISA and tax litigation, as well as mergers and acquisitions.</p> <p> &ldquo;With significant and overlapping client relationships, Jeff is the ideal addition to our Employee Benefits &amp; Executive Compensation team here in Chicago,&rdquo; said Cory Hirsch, co-managing partner of Seyfarth&rsquo;s Chicago office.</p> <p> &ldquo;Jeff naturally fits our firm&rsquo;s culture and his strong employee benefits practice is key as we expand our capabilities in Chicago and throughout the firm,&rdquo; said Amanda Sonneborn, co-managing partner of Seyfarth&rsquo;s Chicago office.</p> <p> Bauer earned his J.D., <em>cum laude</em>, from Stetson University College of Law and his LL.M., in Taxation, from Georgetown University Law Center. He received his M.S., in Taxation, and B.S., in Accounting, from the University of Central Florida.</p> <p> As one of the largest employee benefits groups in the U.S., Seyfarth&rsquo;s team of over 65 attorneys represent some of the largest and most well-known businesses in key industries, such as manufacturing, retail, health care, insurance and financial services. The multi-disciplinary team focuses on supporting clients&rsquo; ongoing legal counseling needs with respect to the establishment, maintenance and termination of their retirement, health, welfare, and executive compensation plans and programs. Seyfarth&rsquo;s Employee Benefits &amp; Executive Compensation Department assists businesses with every aspect of these needs, from designing, drafting and implementing plans and agreements to counseling on compliance, fiduciary duties and administration.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 16 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com ">bkiefer@seyfarth.com </a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/news/shermanpodcast090919 Andrew Sherman interviewed on "My Worst Investment Ever" Podcast https://www.seyfarth.com:443/news/shermanpodcast090919 Mon, 09 Sep 2019 00:00:00 -0400 <p> Andrew Sherman was interviewed September 9th on the &quot;My Worst Investment Ever&quot; Podcast, &quot;Mistakes To Avoid When Selling Your Business.&quot; You can listen to the <a href="https://myworstinvestmentever.com/ep133-andrew-sherman-mistakes-to-avoid-when-selling-your-business/">full interview here</a>.</p> https://www.seyfarth.com:443/publications/CCD090919 Seyfarth Attorneys to Speak on Panels at the 2019 NAPBS Annual Conference https://www.seyfarth.com:443/publications/CCD090919 Mon, 09 Sep 2019 00:00:00 -0400 <p> Seyfarth attorneys Pam Devata, Esther Slater McDonald, Courtney Stieber, John Drury, and Rob Szyba are speaking at multiple key sessions during the 2019 NAPBS Annual Conference in San Antonio, Texas from September 8-10, 2019. The NAPBS Annual Conference offers a diverse range of educational topics ranging from global screening techniques, strategic business sessions, technology and information security practices, legal and compliance guidelines, legislative updates and what&rsquo;s on the horizon for NAPBS members, to name just a few. Whether you are new to the industry or a seasoned expert, there&rsquo;s content for everyone. Each attendee will be able to take away valuable information and resources to benefit their specific business goals.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/09/seyfarth-attorneys-to-speak-on-panels-at-the-2019-napbs-annual-conference/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA090619-LE If Pain (or Anything Else), Yes Gain—Part 73: Bernalillo County, NM Enacts First Local Paid Time Off Ordinance https://www.seyfarth.com:443/publications/MA090619-LE Fri, 06 Sep 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>Last month, Bernalillo County, NM became the first local jurisdiction to enact a mandatory paid time off ordinance. The Ordinance, which goes into effect on July 1, 2020, requires covered employers located within the County&rsquo;s unincorporated limits to allow employees to use earned paid leave for any reason. Albuquerque could also be next.&nbsp;</em><strong><em> </em></strong></p> <p> New Mexico municipalities, in particular Albuquerque, have flirted with proposed paid sick leave mandates on multiple occasions over the last few years. However, no such proposal became law, and New Mexico remains free of the <a href="https://www.laborandemploymentlawcounsel.com/2018/12/the-evolution-of-americas-sick-leave-epidemic-vs-state-efforts-to-find-a-cure/">paid sick leave epidemic</a> that has infected 11 states, including neighboring <a href="https://www.seyfarth.com/publications/MA120817-LE">Arizona</a>, and dozens of municipalities (including <a href="https://www.seyfarth.com/publications/OMM073119-LE">multiple cities in neighboring Texas</a>) across the country.&nbsp;</p> <p> The first cases of mandatory PTO laws appeared earlier this year in Maine and Nevada.<a href="#_ftn1" name="_ftnref1" title="">[1]</a> Then, on August 20, 2019, Bernalillo County became the first municipality, and third jurisdiction overall, to enact a law mandating that certain employers provide eligible employees with PTO for any reason. &nbsp;</p> <p> Importantly, although Albuquerque is located in Bernalillo County, the County&rsquo;s mandatory PTO law, known as the &ldquo;Employee Wellness Act&rdquo; (the &ldquo;Ordinance&rdquo;), has a limited scope. Specifically, the Ordinance applies only to covered employers with &ldquo;a physical premises&rdquo; within the unincorporated limits of Bernalillo County.&nbsp; This limitation is significant because it shields employers in the County&rsquo;s incorporated jurisdictions, such as the City of Albuquerque, from the Ordinance&rsquo;s effects.<a href="#_ftn2" name="_ftnref2" title="">[2]</a>&nbsp; Albuquerque councilmembers, however, have ordered an economic analysis to determine whether adopting the recently passed Bernalillo County PTO Ordinance would be feasible in Albuquerque.</p> <p> Covered employers have until July 1, 2020 to develop a plan that complies with the Bernalillo County PTO Ordinance. &nbsp;In the meantime, here are some highlights of the Ordinance:</p> <ul> <li> <strong>Covered Employers:</strong> Employer is defined to include, among others, any person, business trust, corporation, or other entity or group of persons or entities that is required to apply for a business registration from the County of Bernalillo and has a physical premises within the unincorporated limits of the County.&nbsp; In addition, to be covered, the employer must employ two or more employees within the unincorporated limits of the County. &nbsp;</li> <li> <strong>Eligible Employees:</strong> Employee is defined as any person a covered employer suffers or permits to perform work for monetary compensation for at least 56 hours in a year within the unincorporated limits of Bernalillo County. &nbsp;The definition of employee includes full-time, part-time, seasonal, and temporary basis employees, but lists multiple exclusions, such as certain overtime exempt employees and independent contractors.</li> <li> <strong>Accrual:</strong> Under the Ordinance, no later than the 90th day of employment, employees must be permitted to accrue a minimum of one hour of earned PTO for every 32 hours worked. Accrual will begin on the Ordinance&rsquo;s effective date for eligible employees who have already been employed with the employer for at least 90 days as of the effective date.</li> <li> <strong>Accrual Cap: </strong>Employees must be permitted to accrue PTO up to the following amounts: <ul> <li> <strong>July 1, 2020</strong>: 24 hours of PTO in a year;</li> <li> <strong>July 1, 2021</strong>: 40 hours of PTO in a year;</li> <li> <strong>July 1, 2022</strong>: 56 hours of PTO in a year.</li> </ul> </li> <li> <strong>Frontloading:</strong> Rather than permit accrual, employers may frontload the required amount of PTO, per the above caps, at the start of the year.</li> <li> <strong>Carryover:</strong> Employers must permit employees to carry over unused, accrued PTO to the following year, but employees are not entitled to carry over more than the total annual accrual amount, unless the employer&rsquo;s policy provides otherwise.&nbsp; The Ordinance is silent on whether frontloading the required amount of PTO at the start of each year absolves an employer&rsquo;s year-end carryover obligations.</li> <li> <strong>Usage Cap:</strong> The Ordinance is silent on whether employers can impose a limit on the amount of available PTO an employee can use in a year.</li> <li> <strong>Benefit Year:&nbsp; </strong>Benefit year is defined as a regular and consecutive 12-month period as determined by the covered employer.</li> <li> <strong>Reasons for Use: </strong>An employer shall permit an employee to use earned PTO for any use.</li> <li> <strong>Usage Waiting Periods:</strong> An employer need not permit an employee to use PTO until the employee has worked 56 hours in a year. In addition, the Ordinance states that employers cannot impose more than a 90-day delay on employees&rsquo; use of earned PTO.</li> <li> <strong>Notice to Employer: </strong>The employer must provide PTO upon the request of an employee or a family member, caretaker, or medical professional acting on the employee&rsquo;s behalf. At the time of employment, the employer must notify the employee whether a PTO request may be made orally, in writing, by electronic means, or by any other means acceptable to the employer. The request for PTO must include the expected duration of the absence when possible. <ul> <li> <strong>Foreseeable Leave: </strong>When the use of PTO is foreseeable, the employee must provide notice to the employer as soon as practicable.&nbsp; When possible, employees must schedule the use of PTO in a manner that does not unduly disrupt the operations of the employer.</li> <li> <strong>Unforeseeable Leave: </strong>Employers cannot require advance notice for PTO taken due to an emergency or illness.</li> </ul> </li> <li> <strong>Notice to Employees: </strong>At the time of employment, the employer must provide notice to each employee of the following: (1) the entitlement to PTO for employees, the amount of PTO provided to employees and the terms under which PTO may be used; (2) ways in which an employee may submit a request for, or notify, an employer of the use of PTO and to whom; (3) that retaliation by the employer against the employee for requesting or using PTO for which the employee is eligible is prohibited; and (4) that the employee has a right to file a complaint with the County for any violation of the Ordinance.</li> <li> <strong>Posting:</strong> Employers may comply with the above notice requirement by displaying a poster that contains the required information in a conspicuous place, accessible to employees, at the employer&rsquo;s place of business. &nbsp;The information must be included in both English and Spanish.&nbsp; The County will make a model poster available on or before the effective date of the Ordinance.</li> <li> <strong>Recordkeeping: </strong>Employers must accurately track and record the amount of PTO accrued or used by each employee for each pay period in any format the employer chooses, keep such records for the time period required for employment and payroll records provided in 11.3.400.401(F) New Mexico Administrative Code, and make such records available to the County upon request.</li> <li> <strong>Notification of PTO Accrual and Usage: </strong>An employer must inform an employee of the amount of PTO accrued and used by the employee, upon the employee&rsquo;s request.</li> </ul> <p> Employers should begin taking steps to comply with the Bernalillo County PTO law before its July 1, 2020 effective date. Here are some steps to consider:</p> <ul> <li> Assess whether the employer is covered under the Bernalillo County PTO Ordinance, with a particular focus on whether the employer has a physical premises within the County&rsquo;s unincorporated limits;</li> <li> Review existing paid time off policies and either implement new policies or revise existing policies to satisfy the Bernalillo County PTO law;</li> <li> Monitor the Bernalillo County&rsquo;s website for information on the PTO law, including draft and final rules; and</li> <li> Train supervisory and managerial employees, as well as HR, on the new requirements.</li> </ul> <p> We will continue to monitor and provide updates on Bernalillo County paid leave developments as the law&rsquo;s effective date approaches and on any subsequent changes.</p> <p> As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Law and sick leave requirements generally. To stay up-to-date on paid leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> As noted above, <a href="https://www.seyfarth.com/publications/MA053119-LE">Maine</a> and <a href="https://www.seyfarth.com/publications/MA071519-LE2https:/www.seyfarth.com/publications/MA071519-LE2">Nevada</a> enacted mandatory paid time off laws earlier this year. Also, the <a href="https://www.seyfarth.com/publications/MA062819-LE2">New York City</a> Council is considering amending the current sick/safe time ordinance yet again to add a mandatory paid personal time component.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> Bernalillo County has <a href="https://www.bernco.gov/planning/download-gis-data.aspx">resources</a> available to the public regarding the breakdown of incorporated and unincorporated areas of the County.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/OMM090619-LE Massachusetts DFML Clarifies Standard For Including 1099-MISC Workers In Workforce Count And Reverses Course On Their Inclusion In Quarterly Reports https://www.seyfarth.com:443/publications/OMM090619-LE Fri, 06 Sep 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em> Yesterday, the Department of Family and Medical Leave (DFML) issued new guidance clarifying when a business should include 1099-MISC workers in the company&rsquo;s workforce count for contribution, coverage, and reporting purposes. The DFML further reversed its previous position and clarified that an employer&rsquo;s quarterly reports should not include 1099-MISC workers if the 1099-MISC workers make up 50% or less of its Massachusetts workforce.</em></p> <p> <strong>When To Include 1099-MISC Workers In Your Company&rsquo;s Workforce Count</strong></p> <p> As previously reported, if 1099-MISC workers make up more than 50% of a company&rsquo;s Massachusetts workforce, a company will have to make PFML contributions on their behalves and these workers will count toward the company&rsquo;s 25-worker threshold, which will affect the company&rsquo;s PFML contribution levels. For this 50% calculation, the DFML clarified when to include 1099-MISC workers in the workforce count.</p> <p> Employers must count 1099-MISC workers as part of their Massachusetts workforce count if the 1099-MISC workers:</p> <ul> <li> Perform services as an <em>individual</em> entity;</li> <li> Live in Massachusetts;</li> <li> Perform services in Massachusetts; <u>and</u></li> <li> <strong>Are <u>not</u> defined as an independent contractor under the Massachusetts Unemployment Statute&rsquo;s independent contractor test (M.G.L. c. 151A, s. 2)</strong>.</li> </ul> <p> <br /> Essentially, the DFML has clarified that properly classified independent contractors <em>do not</em> fall within an employer&rsquo;s workforce count for PFML purposes. To be properly classified as an independent contractor, this test generally requires that:</p> <p> a.&nbsp;&nbsp; the individual is free from the company&rsquo;s control and direction in connection with the performance of the services; <em>and</em></p> <p> b.&nbsp;&nbsp; such service is performed either outside the usual course of the company&rsquo;s business <em>or</em> is performed outside of all the places of business of the company for which the service is performed; <em>and</em></p> <p> c.&nbsp;&nbsp; such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.</p> <p> Thus, if an individual or sole proprietor 1099-MISC contractor resides and performs services in Massachusetts and fails this independent contractor test, the worker should be included in the employer&rsquo;s workforce count when calculating whether more than 50% of the workforce is comprised of 1099-MISC workers. Otherwise, a 1099-MISC worker should not be included.</p> <p> The DFML&rsquo;s clarification is likely aimed at balancing the Legislatures&rsquo; intent to provide PFML benefits to misclassified workers with the serious concerns raised by the business community, including the Associated Industries of Massachusetts (&ldquo;AIM&rdquo;), regarding confusion, compliance challenges, and data security risks associated with collecting tax and financial information from 1099-MISC workers.</p> <p> <strong>Quarterly Reports Should <u>Not</u> Include 1099-MISC Workers If 1099-MISC Workers Comprise 50% Or Less Of An Employer&rsquo;s Massachusetts Workforce </strong></p> <p> In further response to these concerns, the DFML reversed its prior position and announced that employers are <u>not</u> required to report payments made to 1099-MISC workers in the company&rsquo;s quarterly reports if they make up 50% or less of the employer&rsquo;s Massachusetts workforce. This is welcome news to employers, as the final regulations did not provide clarity on this question and the DFML&rsquo;s position on it has changed multiple times over the last nine months.</p> <p> <strong>Other Noteworthy Recent Developments</strong></p> <ul> <li> For the upcoming October 1, 2019 commencement of PFML payroll withholdings, the DFML recently clarified that withholdings should begin with the first wage payment made on or after October 1.&nbsp; In other words, all paychecks issued on or after October 1 are subject to contribution withholdings, even for services performed in September but paid for in October.</li> <li> The DFML clarified that certain types of employment that are excluded under the Unemployment Statute will also be excluded from PFML coverage.</li> <li> Employers who employ H-2A visa holders are exempt from remitting contributions to the DFML on behalf of those workers. All other temporary foreign visa programs (e.g., F-1, OPT, J-1, and J-2), however, are subject to the contribution requirements and are considered covered individuals if they otherwise meet the criteria.</li> </ul> <p> <br /> <strong>Reminder: The September 30<sup>th</sup> Deadline To Provide Notice Is Approaching </strong></p> <p> As a reminder, employers and covered business entities are required to provide written notice to employees and covered individuals by September 30, 2019.&nbsp; The English version for employers with 25 or more covered workers can be accessed <a href="https://www.mass.gov/doc/employer-notice-for-a-workforce-with-25-or-more-covered-individuals/download">here</a>; and the English version for employers with less than 25 covered workers can be accessed <a href="https://www.mass.gov/doc/employer-notice-for-a-workforce-with-fewer-than-25-covered-individuals/download">here</a>.</p> <p> For our prior reports on the PFML Law and the regulations, you may refer <a href="https://www.seyfarth.com/dir_docs/publications/MA_Paid_Family_and_Medical_Leave_Alerts.pdf">here</a>.</p> https://www.seyfarth.com:443/publications/OMM090619-LIT National Credit Union Administration Issues Statement About Serving Hemp Businesses https://www.seyfarth.com:443/publications/OMM090619-LIT Fri, 06 Sep 2019 00:00:00 -0400 <div> Following last year&rsquo;s passage of the 2018 Farm Bill, the National Credit Union Administration (NCUA) issued a <a href="https://www.ncua.gov/files/regulatory-alerts/19-RA-02-serving-hemp-businesses.pdf">regulatory update</a> in August of 2019 to federally insured credit unions.&nbsp; Citing growth in hemp-related commerce, the NCUA emphasized the need for credit unions to understand the gamut of regulation across jurisdictions in order to lawfully lend to hemp-related businesses.&nbsp; Within its memorandum to members, the NCUA provided: 1) a summary of repercussions generated by the 2018 Farm Bill, 2) specific compliance program concerns with regard to the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML), and 3) considerations under existing NCUA regulations for lending.&nbsp;</div> <div> &nbsp;</div> <div> As to the effects of the 2018 Farm Bill, the NCUA highlighted three points.&nbsp; <strong>First</strong>, as of December 20, 2018, hemp is no longer designated as a federally controlled substance.&nbsp; The industrial hemp pilot provisions under an earlier 2014 Farm Bill govern the lawful production of hemp; noncompliant production remains illegal.&nbsp; Under the 2018 Farm Bill, this pilot program will be terminated one year after the issuance of final hemp regulations and guidelines from the USDA.&nbsp; <strong>Second</strong>, the NCUA cautioned that notwithstanding these federal developments, state and Indian Tribe laws may still prohibit the production or possession of hemp.&nbsp; Yet, it also noted that states and Indian Tribes laws cannot prohibit the transportation of products produced lawfully under federal law.&nbsp; <strong>Last</strong>, the 2018 Farm Bill does not modify other existing statutes, including the Federal Food, Drug, and Cosmetic Act and Public Health Service Act, and existing regulations thereof.&nbsp; Nor does the bill affect the authority of the Health and Human Services Secretary or FDA Commissioner to promulgate new regulations under existing statutory powers.&nbsp;</div> <div> &nbsp;</div> <div> Apart from the 2018 Farm Bill, state and Indian Tribe laws, the NCUA underscored several compliance program considerations for credit unions stemming specifically from the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML).&nbsp; <strong>First</strong>, as it otherwise would with regular accounts, credit unions need to maintain due diligence programs and file statutorily-required Suspicious Activity Reports (SAR) with respect to hemp-related accounts.&nbsp; However, absent unusual or unlawful activity for the account, credit unions need not typically file such reports.&nbsp; The NCUA instead stressed the need for robust compliance systems to detect unusual suspicious activities warranting such filings.&nbsp; <strong>Second</strong>, credit unions that service hemp-related businesses operating under the 2014 Farm Bill pilot provisions need to also understand the state laws, regulations, and agreements under which such businesses operate.&nbsp; For example, credit unions need to verify compliance of hemp businesses to the 2014 Farm Bill pilot program and adapt compliance programs to handle specific risks posed by pilot program participants.&nbsp; <strong>Last</strong>, when deciding whether to serve hemp-related businesses, credit unions also need to consider other applicable federal and state laws.&nbsp; For example, hemp products may soon fall into the purview of forthcoming FDA regulations.&nbsp; &nbsp;</div> <div> &nbsp;</div> <div> In addition to the federal, state, and Indian Tribe regulatory landscape, the NCUA also stressed that members need to be compliant with internal NCUA regulations, including those on commercial lending and underwriting.&nbsp; For example, the NCUA recognized that credit unions ought to consider the risks posed by businesses that rely on products subject to ever-changing federal and state health-related regulations.</div> <div> &nbsp;</div> <div> The NCUA&rsquo;s regulatory update serves as yet another reminder of the complexity associated with hemp-related regulations across all levels of government.&nbsp; Seyfarth Shaw&rsquo;s Cannabis Law Practice Group and Consumer Financial Services Practice Group continue to monitor this space and are ready to assist both current and prospective clients with navigating this complicated and dynamic regulatory regime.&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/TBT090519 The Week in Weed: September 6, 2019 https://www.seyfarth.com:443/publications/TBT090519 Thu, 05 Sep 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/09/the-week-in-weed-september-6-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE090519 The Future of Health Care Symposium https://www.seyfarth.com:443/publications/WSE090519 Thu, 05 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Stay ahead of the curve! The future is rapidly changing for health care providers. To keep up with emerging trends, changes and needs, it is important to get the latest information and ideas that can be leveraged to make strategic, compliant business decisions in the future while delivering patients a culture of excellence.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/healthcare/the-future-of-health-care-symposium/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP090519 Governor Newsom Pumps Brakes On New Sexual Harassment Training Requirements https://www.seyfarth.com:443/publications/CP090519 Thu, 05 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: California employers racing to ensure all their employees receive mandatory harassment training by the end of the year can now take their foot off the gas. In response to an outcry from employer groups regarding the challenge of compliance at breakneck speed, the Legislature and Governor Newsom have extended the new training deadline for a year.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/09/05/governor-newsom-pumps-brakes-on-new-sexual-harassment-training-requirements/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/johnsonbloomberglaw090519 Randel Johnson quoted in Bloomberg Law https://www.seyfarth.com:443/news/johnsonbloomberglaw090519 Thu, 05 Sep 2019 00:00:00 -0400 <p> Randel Johnson was quoted in a September 5 story from Bloomberg Law, &quot;Labor Priorities Buried Under Congress&rsquo; Post-Recess Calendar.&quot; Johnson said that the real question is: Is the Senate just going to sit on the bills that the House sent over or, as the Senate heads into an election year, will they take them on?</p> https://www.seyfarth.com:443/news/manevitz090419 Seyfarth’s New York Office Adds Real Estate Litigator Ingrid Manevitz https://www.seyfarth.com:443/news/manevitz090419 Wed, 04 Sep 2019 00:00:00 -0400 <p> NEW YORK -- (September 4, 2019) -- Seyfarth Shaw LLP announced today the arrival of partner Ingrid C. Manevitz to the Litigation department in New York. Manevitz joins from Schwartz Sladkus Reich Greenberg Atlas LLP, where she was a partner in its Litigation and Real Estate groups in New York.</p> <p> Manevitz represents clients in cooperative and condominium related disputes, including disputes involving construction and design defects, alterations, access to neighboring properties, holders of unsold shares, discrimination, reasonable accommodations, mold, lead contamination and short-term rentals. In addition to handling all aspects of real estate-related litigation, Manevitz handles mediations and arbitrations before the AAA and JAMS.</p> <p> &ldquo;Ingrid&rsquo;s practice is an important complement to our growing real estate litigation practice, enhancing our co-op/condo capabilities,&rdquo; said James McGrath, chair of Seyfarth&rsquo;s Litigation department. &ldquo;She is well-known as an entrepreneurial leader in the space and we are excited to have her as a new member of our strong and diverse Litigation department.&rdquo;</p> <p> Apart from her litigation work, Manevitz provides general counseling to cooperative corporations and condominiums and their respective managing agents on general corporate governance and other matters. She began her legal career at Wolf Haldenstein Adler Freeman &amp; Hertz LLP, where she was the youngest woman to become partner in the firm&rsquo;s 120 year history.</p> <p> &ldquo;Clients praise Ingrid&rsquo;s counsel and her leadership is reflected throughout the professional organizations she serves here in New York. We&rsquo;re lucky to have a dynamic presence like Ingrid join our team,&rdquo; said Lorie Almon, co-managing partner of Seyfarth&rsquo;s New York office.</p> <p> &ldquo;The co-op and condo industry is a major segment of the New York real estate market. Ingrid&rsquo;s stellar track record in this area is a huge asset for clients facing complex litigation in today&rsquo;s real estate environment,&rdquo; said John Napoli, co-managing partner of Seyfarth&rsquo;s New York office.</p> <p> Manevitz earned her J.D. from Brooklyn Law School and received her B.A. from Brandeis University, where she was a Presidential Scholar.</p> <p> Earlier this year, the firm announced the arrivals of partners Tracee Davis and Steven Paradise to the Litigation department in New York.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 16 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com">bkiefer@seyfarth.com</a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/news/wcarsaen090419 Seyfarth's Workplace Class Action Report referenced in the San Antonio Express-News https://www.seyfarth.com:443/news/wcarsaen090419 Wed, 04 Sep 2019 00:00:00 -0400 <p> Seyfarth&#39;s Workplace Class Action Report was referenced in a September 4 story from the San Antonio Express-News, &quot;H-E-B sued over 401(k) fees, accused of having one of the &lsquo;most expensive&rsquo; retirement plans.&quot; According to Seyfarth&#39;s report, the top 10 ERISA settlements fell nearly threefold to $313.4 million last year, down from $927 million in 2017 and $807.4 million in 2016. You can read the <a href="https://www.expressnews.com/business/local/article/H-E-B-sued-over-401-k-fees-accused-of-having-14413112.php">full article here</a>.</p> https://www.seyfarth.com:443/publications/OMM090419-LIT Fifth Circuit Holds the TCPA Does Not Apply to Federal Court Diversity Cases https://www.seyfarth.com:443/publications/OMM090419-LIT Wed, 04 Sep 2019 00:00:00 -0400 <div> <p> On August 23, 2019, the United States Court of Appeals for the Fifth Circuit issued its long-awaited opinion in <em>Klocke v. Watson</em>, 17-11320, 2019 WL 3977545, at *1 (5th Cir. Aug. 23, 2019), holding that the Texas Citizens Participation Act (&ldquo;TCPA&rdquo;) does not apply to diversity cases in federal court. This decision settles a split manifested across dozens of cases at the district courts.</p> <p> By ruling that the TCPA does not apply to diversity cases in federal court, the Fifth Circuit foreclosed an otherwise potent weapon used by defendants throughout Texas in trade secrets litigation. Because of the TCPA&rsquo;s extremely broad application, defendants in trade secrets cases, for example, often asserted that claims alleging the misappropriation of trade secrets and related causes of action were based on and related to the defendant&rsquo;s freedom to speak freely on all topics, including the trade secrets at issue, and its freedom to associate with competitors, and therefore such claims should be dismissed under the TCPA. Such arguments are now foreclosed by this ruling, at least in federal court.</p> <p> Nevertheless, the Fifth Circuit&rsquo;s holdings in <em>Klocke</em> may be soon revisited, as new provisions of the TCPA went into effect September 1 that repealed and replaced some of the burden-shifting framework that the Fifth Circuit held conflicted with the Federal Rules of Civil Procedure. The statute&rsquo;s September 1 amendments also dramatically reduce the TCPA&rsquo;s applicability to trade secret cases regardless of where they are filed.</p> <h2> Background</h2> <p> The TCPA is an anti-SLAPP (Strategic Lawsuit Against Public Participation) statute allowing litigants to seek early dismissal of a lawsuit if the legal action is based on, relates to, or is in response to a party&rsquo;s exercise of the constitutional right of free speech, right to petition, or right of association. Like other states, Texas enacted the TCPA to address concerns over the increasing use of lawsuits to chill the exercise of First Amendment rights. As it applied up until September 1, a movant was required to show by a preponderance of the evidence that the TCPA applied. If a movant was successful, a non-movant was then required to show by &ldquo;clear and specific evidence&rdquo; each element of its prima facie case or face mandatory dismissal, fees, and sanctions. If a movant was successful, a movant could still obtain dismissal fees and sanctions if the movant could show by a preponderance of the evidence each essential element of a valid defense to the non-movant&rsquo;s claim.</p> <h2> Case Facts</h2> <p> Thomas Klocke was a student at the University of Texas at Arlington who tragically committed suicide in June 2016 after being refused permission to graduate while the University investigated allegations made by fellow student Nicholas Watson that Klocke harassed Watson based on his sexual orientation. Thomas Klocke&rsquo;s father, as administrator of his son&rsquo;s estate, filed suit against the University for possible Title IX violations and against Watson alleging common law defamation and defamation <em>per se</em>. Watson moved to dismiss the defamation claims under the TCPA, alleging the lawsuit was based on, related to, and in response to his freedom of speech rights.&nbsp;</p> <p> The district court granted Watson&rsquo;s motion to dismiss, holding the TCPA applicable in federal court, and awarded Watson attorneys&rsquo; fees and sanctions pursuant to the TCPA. Klocke appealed, arguing that the TCPA conflicts with the Federal Rules. The Fifth Circuit agreed with Klocke, reversing and remanding the district court&rsquo;s judgment for further proceedings.</p> <h2> The Ruling</h2> <p> Breaking with its recent practice of declining to rule on whether, and to what extent, the TCPA applies in federal court, the Fifth Circuit directly held the TCPA does not apply in diversity cases in federal court. While the opinion applies expressly to federal diversity cases, the Fifth Circuit&rsquo;s reasoning equally applies to any case filed in federal court, including those based on supplemental or federal question jurisdiction, although the latter set of cases are likely excluded from the TCPA&rsquo;s application due to the Supremacy Clause of the U.S. Constitution.</p> <p> In reaching this decision, the Fifth Circuit found most persuasive the D.C. Circuit&rsquo;s reasoning in <em>Abbas v. Foreign Policy Grp., LLC</em>, 783 F.3d 1328, 1333-34, that Rules 12 and 56, governing dismissal and summary judgment respectively, answer the same question as the TCPA: namely, what are the circumstances under which a court must dismiss a case before trial? The Fifth Circuit analyzed the issue under the framework of <em>Abbas</em> and <em>Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co.</em>, 559 U.S. 393, 398 (2010), which hold that state rules conflict with federal procedural rules when they impose additional procedural requirements not found in the federal rules. The Fifth Circuit found that the TCPA and the Federal Rules &ldquo;answer the same question&rdquo; because each specifies requirements for a case to proceed at the same stage of litigation.</p> <p> Specifically, the Fifth Circuit found:</p> <ol> <li> The TCPA&rsquo;s &ldquo;clear and specific evidence&rdquo; standard exceeds the pleading requirements of Rules 8 and 12 and the evidentiary requirements of Rule 56, and therefore must yield. Further, it requires the court to weigh evidence &ldquo;by a preponderance of the evidence&rdquo; prior to the parties conducting discovery, thereby imposing weighing requirements not found in the Federal Rules, and thus conflicts with them;&nbsp;</li> <li> The TCPA answers the same question as the Rules 12 and 56 because they all involve when the court must dismiss a case before trial;</li> <li> The Fifth Circuit relied on the United States Supreme Court&rsquo;s ruling in <em>Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co.</em>, 559 U.S. 393 (2010), to make clear that the federal rules impose comprehensive, not minimum, pleading requirements, and states may not superimpose additional requirements on the federal rules; and</li> <li> Under the rule of orderliness, the Fifth Circuit concluded it was not bound by its prior decision in <em>Henry v. Lake Charles American Press, L.L.C.</em>, 566 F.3d 164 (5th Cir. 2009), where the Fifth Circuit upheld the dismissal of a lawsuit under Louisiana&rsquo;s anti-SLAPP statute, because <em>Henry</em> preceded the Supreme Court&rsquo;s <em>Shady Grove</em> decision, subsequent Fifth Circuit rulings declined to hold <em>Henry</em> controlling on the applicability of the TCPA, and because <em>Henry</em> addressed Louisiana&rsquo;s anti-SLAPP statute, rather than the TCPA.</li> </ol> <h2> Applicability to Cases Moving Forward</h2> <p> The impact of the <em>Klocke</em> case ultimately may be limited. On September 1, 2019, H.B. No. 2730 went into effect, which changed several key provisions of the TCPA. In addition to changing the scope of several key definitions, the amendments included removing the requirement that the movant must show by a &ldquo;preponderance of the evidence&rdquo; that the TCPA applied or each essential element of a valid defense to the non-movant&rsquo;s claim. These evidentiary burdens were replaced by more amorphous language stating that a movant only needed to &ldquo;demonstrate&rdquo; the TCPA&rsquo;s applicability and to &ldquo;establish&rdquo; an affirmative defense or that it was entitled to judgment as a matter of law.</p> <p> It is likely, however, that <em>Klocke</em>&rsquo;s holding, if not all of its reasoning, will be upheld by a future Fifth Circuit panel addressing the new TCPA language. While the&nbsp; &ldquo;preponderance of the evidence&rdquo; language in the TCPA has been removed for the movant, the &ldquo;clear and specific evidence&rdquo; standard for the non-movant remains, language which the Fifth Circuit held constitutes an &ldquo;evidentiary weighing requirement[] not found in the Federal Rules&rdquo; and which &ldquo;exceeds the plaintiff&rsquo;s Rule 56 burden to defeat summary judgment.&rdquo; Accordingly, a future Fifth Circuit panel may likely conclude that the TCPA remains inapplicable to cases in federal court.</p> <p> Regardless of how the Fifth Circuit rules on TCPA cases in general, its applicability to trade secret cases has been much narrowed by the September 1 amendments. Specifically, the new provisions state that the TCPA does not apply to a legal action arising from an officer-director, employee-employer, or independent contractor relationship that seeks recovery for misappropriation of trade&nbsp; secrets or corporate opportunities. While this does not eliminate all conceivable trade secret claims from the TCPA&rsquo;s grasp, it greatly reduces the number, whether in state or federal court.</p> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/TS090419 Fifth Circuit Holds the TCPA Does Not Apply to Federal Court Diversity Cases https://www.seyfarth.com:443/publications/TS090419 Wed, 04 Sep 2019 00:00:00 -0400 <p> On August 23, 2019, the United States Court of Appeals for the Fifth Circuit issued its long-awaited opinion in Klocke v. Watson, 17-11320, 2019 WL 3977545, at *1 (5th Cir. Aug. 23, 2019), holding that the Texas Citizens Participation Act (&ldquo;TCPA&rdquo;) does not apply to diversity cases in federal court. This decision settles a split manifested across dozens of cases at the district courts.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/09/articles/trade-secrets/fifth-circuit-holds-the-tcpa-does-not-apply-to-federal-court-diversity-cases/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD090419 Fifth Circuit Holds the TCPA Does Not Apply to Federal Court Diversity Cases https://www.seyfarth.com:443/publications/CCD090419 Wed, 04 Sep 2019 00:00:00 -0400 <p> On August 23, 2019, the United States Court of Appeals for the Fifth Circuit issued its long-awaited opinion in Klocke v. Watson, 17-11320, 2019 WL 3977545, at *1 (5th Cir. Aug. 23, 2019), holding that the Texas Citizens Participation Act (&ldquo;TCPA&rdquo;) does not apply to diversity cases in federal court. This decision settles a split manifested across dozens of cases at the district courts.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/09/fifth-circuit-holds-the-tcpa-does-not-apply-to-federal-court-diversity-cases/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ADA090319 Renewed Web and Physical Accessibility Congressional Efforts an Exercise in Futility? https://www.seyfarth.com:443/publications/ADA090319 Tue, 03 Sep 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Congress Members recently renewed their efforts to take legislative action and urge the DOJ take regulatory action regarding physical and website accessibility, respectively.<br /> <br /> <a href="https://www.adatitleiii.com/2019/09/renewed-web-and-physical-accessibility-congressional-efforts-an-exercise-in-futility/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM090319-LIT Seventh Circuit Limits Scope of Federal Trade Commission’s Enforcement Authority https://www.seyfarth.com:443/publications/OMM090319-LIT Tue, 03 Sep 2019 00:00:00 -0400 <div> The Seventh Circuit issued a <a href="https://www.courthousenews.com/wp-content/uploads/2019/08/FTCvCredit-Bureau.pdf">decision</a> recently that eliminates an enforcement tool long used by the Federal Trade Commission (&ldquo;FTC&rdquo;)&mdash;the ability to obtain equitable monetary relief from defendants when the FTC challenges conduct under Section 13(b) of the Federal Trade Commission Act (&ldquo;FTC Act&rdquo;).</div> <div> &nbsp;</div> <div> Under Section 13(b), the FTC may seek an injunction in federal court &ldquo;[w]henever the Commission has reason to believe . . . that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission.&rdquo;&nbsp; But the FTC has long sought and obtained restitution under Section 13(b) as an implied remedy.</div> <div> &nbsp;</div> <div> In <em>Credit Bureau Center</em>, the FTC sued a credit monitoring service and its owner for an injunction and restitution.&nbsp; The FTC brought the suit under Section 13(b) for violating several consumer protection statutes by enrolling consumers in a monthly subscription without proper notice.&nbsp; The service offered a &ldquo;free credit report and score&rdquo; while disclosing in much smaller text that applying for the information automatically enrolled customers in an unspecified $29.94 monthly membership subscription&mdash;the defendants&rsquo; credit monitoring service.&nbsp; The district court entered a permanent injunction and ordered the defendants to pay more than $5 million in restitution.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> On appeal, the defendants made the straightforward argument that Section 13(b) does not authorize restitution because it does not mention restitution.&nbsp; And the Seventh Circuit agreed.&nbsp; It concluded that nothing in the text or structure of the FTC Act supported an implied right to restitution under Section 13(b), which by its terms authorizes only injunctions.&nbsp; As a result, the court affirmed the judgment against the defendants but vacated the restitution award.</div> <div> &nbsp;</div> <div> The court reached its decision despite prior Seventh Circuit precedent recognizing a right to restitution under Section 13(b) in <em>FTC v. Amy Travel Service, Inc.</em>, 875 F.2d 564 (7th Cir. 1989).&nbsp; Looking to the Supreme Court&rsquo;s subsequent decision in <em>Meghrig v. KFC W., Inc.</em>, 516 U.S. 479 (1996), the court concluded that it must consider whether an implied equitable remedy is compatible with a statute&rsquo;s express remedial scheme, and that it cannot assume that a statute with elaborate enforcement provisions like the FTC Act implicitly authorizes other remedies.&nbsp; The court analyzed the FTC Act&rsquo;s overall text and structure, including the FTC&rsquo;s various enforcement powers, and concluded that an implied restitution remedy was incompatible with Section 13(b).&nbsp; &nbsp;</div> <div> &nbsp;</div> <div> In particular, the court observed that the FTC can obtain other equitable relief under separate provisions of the FTC Act that involve certain administrative procedures.&nbsp; The court explained that the FTC can try cases before an administrative law judge or define unfair or deceptive practices through rulemaking and then pursue violators of the rule, and that that those mechanisms afford protections to defendants not offered under Section 13(b).&nbsp; As a result, the court reasoned, the FTC asserted an unqualified right to a remedy that the FTC Act&rsquo;s other enforcement provisions give only with protections or, as the court called it, &ldquo;heavy qualification.&rdquo;&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The Seventh Circuit&rsquo;s decision is significant.&nbsp; It creates a circuit split on a key aspect of FTC&rsquo;s enforcement authority.&nbsp; The Seventh Circuit did not grant a rehearing <em>en banc</em>, and it is unclear whether the FTC will appeal to the Supreme Court.&nbsp; Congress may attempt to resolve the split through legislation.&nbsp; In the meantime, the FTC will no doubt see increased challenges to its right to recover restitution in Section 13(b) cases.&nbsp; Indeed, the Seventh Circuit criticized contrary decisions in other circuits as based on a &ldquo;similarly brief analysis&rdquo; as <em>Amy Travel</em> and observed that they have been the subject of recent judicial skepticism.&nbsp;&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/MA090319-LE California Invalidates Wage Arbitration Agreement, Inviting U.S. Supreme Court Review https://www.seyfarth.com:443/publications/MA090319-LE Tue, 03 Sep 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>The California Supreme Court invalidated an employment arbitration agreement on August 29, 2019. At issue in OTO, LLC v. Kho was an agreement to arbitrate employment claims, including wage claims. Under the agreement, Kho had to arbitrate wage claims instead of having them decided in court or in an administrative </em>&ldquo;<em>Berman hearing</em>&rdquo; <em>conducted by the California Labor Commissioner. A Court of Appeal upheld the agreement, even though it was &ldquo;disturbed&rdquo; by how it was drafted and presented. But the California Supreme Court struck down the agreement, insisting that an agreement waiving a Berman hearing must be particularly fair, given the &ldquo;full panoply&rdquo; of benefits employees would enjoy in a Berman hearing. Dissenting, Justice Chin criticized the majority&rsquo;s decision as violating the Federal Arbitration Act, and reflecting the Court&rsquo;s ongoing animus against agreements to arbitrate employment disputes. </em></p> <p> <strong>Background</strong></p> <p> Agreements to arbitrate wage claims in California have a turbulent history, dating back to at least 1987, when the U.S. Supreme Court held that the Federal Arbitration Act preempted Labor Code section 229&mdash;which purports to invalidate any &ldquo;private agreement to arbitrate&rdquo; wage disputes. During the ensuing years the U.S. Supreme Court repeatedly reversed California rules that presented obstacles to the enforcement of arbitration agreements covered by the FAA.</p> <p> One such occasion presented itself in 2011, when the California Supreme Court, in <em>Sonic Calabasas A, Inc. v. Moreno </em>(<em>Sonic I</em>), held that any arbitration agreement waiving a Berman hearing was unconscionable. <em>Sonic I </em>was overturned by the U.S. Supreme Court, which held that the FAA preempted any categorical bar on arbitrating wage claims. The California Supreme Court revisited the issue in 2013 (<em>Sonic II</em>), to hold that agreements to arbitrate wage disputes are enforceable so long as they provide &ldquo;an accessible and affordable process for resolving those disputes.&rdquo; For more details on these decisions, see <a href="https://www.seyfarth.com/uploads/siteFiles/publications/eab78723-ca80-410d-8d1d-f5df1d172d48_documentupload.pdf">here</a>&nbsp;and <a href="https://www.seyfarth.com/uploads/siteFiles/publications/OMM103013Arbitration.pdf">here</a>.</p> <p> Against this legal backdrop, mechanic Ken Kho signed an arbitration agreement to resolve employment disputes with his car dealership employer. A year later, he filed a wage claim to initiate a Berman hearing with the Department of Labor Standards Enforcement, commonly known as the Labor Commissioner. The employer filed a petition in state court to compel Kho to arbitrate his wage claim.</p> <p> The trial court denied the petition because the arbitration agreement was &ldquo;highly&rdquo; unfair as it deprived Kho of advantages he would enjoy in a Berman hearing, including the right to free advice and assistance by the Labor Commissioner. But the Court of Appeal <a href="https://www.seyfarth.com/publications/OMM082417-LE">reversed</a>, finding that, under <em>Sonic II</em>, the arbitration agreement allowed Kho to have his wage claim heard in an accessible, affordable forum that mirrored normal civil litigation, even though the form of the agreement and the way it was presented to Kho were &ldquo;extraordinarily&rdquo; unfair.</p> <p> <strong>Supreme Court&rsquo;s Decision in <em>OTO, LLC v. Kho</em></strong></p> <p> The Supreme Court reversed the Court of Appeal, finding the arbitration agreement unenforceable. Key to the decision was the &ldquo;unusually coercive setting&rdquo; in which Kho signed the agreement. He was presented with it three years into his employment with OTO and he had to sign it to keep his job. The terms of the 1 1/4 page agreement appeared in one block paragraph, in seven-point font. The agreement included long, complex statutory references and dense legal jargon. One sentence alone ran twelve lines. And rather than state that arbitration costs would be paid by the employer, the agreement stated that costs would be controlled by the Code of Civil Procedure and &ldquo;controlling case law,&rdquo; requiring someone with legal knowledge to understand it. The Supreme Court concluded that the agreement&rsquo;s &ldquo;visually impenetrable&rdquo; text aimed to &ldquo;thwart, rather than promote, understanding.&rdquo;</p> <p> The arbitration agreement was delivered to Kho at his desk by a &ldquo;low-level employee&rdquo; who lacked both the knowledge to explain it and the authority to negotiate it. The employee waited in front of Kho as he read it, creating the expectation that Kho had to sign immediately. Had Kho spent any time reviewing the agreement, his pay would have been reduced because he was paid by piece rate (Kho signed it after four minutes). Kho had no chance to review the agreement outside of work or in his native language. Finally, Kho was not given a copy of the agreement he signed.</p> <p> These extraordinary facts drove the Supreme Court&rsquo;s decision. <em>Sonic II </em>held that if the terms and circumstances in which an arbitration agreement are particularly unfair, or are &ldquo;procedurally unconscionable,&rdquo; then it would only take a &ldquo;relatively low degree&rdquo; of unfairness in the terms of the agreement to make it unenforceable.</p> <p> The Supreme Court in <em>Kho </em>found several parts of the arbitration agreement to be unfair or substantively unconscionable, particularly when contrasted with the &ldquo;simplified,&rdquo; &ldquo;efficient,&rdquo; &ldquo;affordable&rdquo; Berman hearing. The agreement did not explain how to initiate arbitration. Rather, Kho would have to submit a pleading to start an arbitration, serve and respond to discovery, comply with state rules of evidence, and make his case before a retired judge who, unlike a Berman hearing officer, would have no duty to assist him. The complexity was such, Kho claims, that Kho would have to hire an attorney to pursue his claim in arbitration. Overall, Kho saw the arbitration agreement as a bad bargain to waive the advantages of a quick, simple, and affordable Berman hearing in exchange for a more time-consuming, complex, and costly arbitration.</p> <p> Justice Chin&rsquo;s 55-page dissent challenges at every turn the majority&rsquo;s view of the procedural and substantive fairness of the arbitration agreement. The dissent argues that the majority reversed the burden on an employee to prove unfairness on its head by instead requiring the employer to explain the arbitration agreement to the employee. Justice Chin makes the case that the Supreme Court misinterpreted the facts, misapplied <em>Sonic II</em>, and again violated the FAA by ultimately relying on a subjective view that arbitration is not an adequate forum.</p> <p> <strong>Action Items for California Employers</strong></p> <p> <em>Kho, </em>like <em>Sonic I </em>before it, may end up before the U.S. Supreme Court. Justice Chin&rsquo;s dissent persuasively illustrates how, once again, California has disfavored arbitration in a way that the FAA forbids. But U.S. Supreme Court intervention is always a long shot at best. In the meanwhile, employers should give special attention to the structure and terms of their arbitration agreements&mdash;particularly with respect to wage claims&mdash;and the manner in which they are presented. While the burden of proof as to procedural and substantive fairness of arbitration agreements properly falls on the employee (not the employer), the Supreme Court&rsquo;s decision will be read by some to reverse the burden. With that thought in mind, employers should find ways to draft, design, and present arbitration agreements that emphasize accessibility, promote understanding, and eliminate surprise.</p> https://www.seyfarth.com:443/news/mansfield090319 Seyfarth Earns Mansfield 2.0 Certification from Diversity Lab https://www.seyfarth.com:443/news/mansfield090319 Tue, 03 Sep 2019 00:00:00 -0400 <p> Seyfarth Shaw LLP announced today that it has again earned Mansfield Certification from Diversity Lab after completing the Mansfield Rule 2.0 12-month certification program.</p> <p> The Mansfield Rule Certification measures whether law firms have affirmatively considered at least 30 percent women, LGBTQ+ and attorneys of color for leadership and governance roles, equity partner promotions, and senior lateral positions.</p> <p> Mansfield Rule 2.0, the next iteration of the Rule, launched July 16, 2018 and included LGBTQ+ lawyers in addition to women and attorneys of color. Also new, Mansfield 2.0 measures consideration for participation in client pitch meetings and request that participating law firms make appointment and election processes transparent to all lawyers in their firms. After finishing the inaugural one-year Mansfield Rule pilot in 2018, the firm earned Mansfield Certification &lsquo;Plus&rsquo; rating from Diversity Lab.</p> <p> Named after Arabella Mansfield, the first woman admitted to the practice of law in the United States, the Mansfield Rule is a variation of the NFL&rsquo;s &ldquo;Rooney Rule.&rdquo; The goal of the Mansfield Rule is to boost the representation of diverse lawyers in law firm leadership by broadening the pool of candidates considered for these opportunities.</p> <p> &ldquo;The firm is thrilled to achieve Mansfield Certification once again following the second year of its pilot program. Our team worked tirelessly to continue implementing initiatives reflective of Seyfarth&rsquo;s strong commitment to inclusion and diversity,&rdquo; said Kori Carew, chief inclusion &amp; diversity officer at Seyfarth Shaw. &ldquo;As an early adopter of the Rooney Rule, the firm is proud to celebrate this notable accomplishment as we remain steadfast in our execution of these inclusive polices shaping our workplace.&rdquo;</p> <p> A recognized industry leader in law firm diversity, Seyfarth was recently shortlisted for the 2019 <em>Chambers USA </em>Diversity &amp; Inclusion Awards. Notably, the firm was nominated for Outstanding Diversity &amp; Inclusion Program in recognition of Seyfarth&rsquo;s own &ldquo;Rooney Rule&rdquo; initiative. Inspired by the NFL and launched in early 2016, this program has helped improve the hiring of diverse candidates across the firm.</p> <p> The Mansfield Rule was one of the winning ideas from the 2016 Women in Law Hackathon hosted by Diversity Lab in collaboration with <em>Bloomberg Law</em> and Stanford Law School. Diversity Lab creates and experiments with innovative ways to close the gender gap and boost diversity in law firms and legal departments by leveraging data, behavioral science, and design thinking. To learn more about Mansfield Certification click <a href="https://www.diversitylab.com/pilot-projects/mansfield-rule/">here</a>.</p> https://www.seyfarth.com:443/news/greensteincoop090119 Dennis Greenstein quoted in The Cooperator https://www.seyfarth.com:443/news/greensteincoop090119 Sun, 01 Sep 2019 00:00:00 -0400 <p> Dennis Greenstein was quoted in a September 1 story from The Cooperator, &quot;Q&amp;A: Smoking and Shared Terraces.&quot; Greenstein said that The New York City Smoke Free Air Act prohibits smoking in virtually all enclosed areas within public places and in certain outdoor areas of public places. You can read the <a href="https://cooperator.com/article/qa-smoking-and-shared-terraces/full#cut">full article here</a>.</p> https://www.seyfarth.com:443/news/bitarbi090119 Karen Bitar quoted in Business Insurance https://www.seyfarth.com:443/news/bitarbi090119 Sun, 01 Sep 2019 00:00:00 -0400 <p> Karen Bitar was quoted in a September 1 story from Business Insurance, &quot;Coverage Battles Over Abuse Suits Loom.&quot; On New York&#39;s Child Victims Act, Bitar said that New York was previously viewed as having one of the toughest statue of limitations in the country. She said this is a complete sea change for the state.</p> https://www.seyfarth.com:443/publications/obrienclls090119 James O'Brien authored an article in Commercial Leasing Law & Strategy https://www.seyfarth.com:443/publications/obrienclls090119 Sun, 01 Sep 2019 00:00:00 -0400 <p> James O&#39;Brien authored a September 1 article in Commercial Leasing Law &amp; Strategy, &quot;A Tenant&rsquo;s Perspective on SNDAs: Non-Disturbance Is Not Enough.&quot; Part One outlines the basic elements of an SNDA and will explain the differences between the concepts of &ldquo;non-disturbance&rdquo; and &ldquo;recognition,&rdquo; while contending that lease recognition is more important to the tenant than not having its possession disturbed. You can read the <a href="http://www.lawjournalnewsletters.com/2019/09/01/a-tenants-perspective-on-sndas-non-disturbance-is-not-enough/?slreturn=20190813102836">full article here</a>.</p> https://www.seyfarth.com:443/publications/ariparworkforce083019 Ari Hersher and Parnian Vafaeenia authored an article in Workforce https://www.seyfarth.com:443/publications/ariparworkforce083019 Fri, 30 Aug 2019 00:00:00 -0400 <p> Ari Hersher and Parnian Vafaeenia authored an August 30 article in Workforce, &quot;Predictive Scheduling Laws: What Are They, Where Do They Exist and Employers&rsquo; Reaction.&quot; You can read the <a href="https://www.workforce.com/2019/08/30/predictive-scheduling-laws-what-are-they-where-do-they-exist-and-employers-reaction/">full article here</a>.</p> https://www.seyfarth.com:443/publications/CONS083019 Illinois Expands Protections Under the Contractor Prompt Payment Act by Imposing New Restrictions on Retainage https://www.seyfarth.com:443/publications/CONS083019 Fri, 30 Aug 2019 00:00:00 -0400 <p> The Illinois Contractor Prompt Payment Act, 815 ILCS 603/1, et seq. (the &ldquo;Act&rdquo;) was first enacted in 2007 and designed to safeguard contractors and subcontractors on private projects by providing a mechanism to expedite payments for work performed. The Act applies to all private construction projects in Illinois, except those involving single family residences or multiple family residences with twelve or fewer units in a single building. With the Act, Illinois joined a growing number of states that had enacted similar legislation.<br /> <br /> <a href="https://www.constructionseyt.com/2019/08/illinois-expands-protections-under-the-contractor-prompt-payment-act-by-imposing-new-restrictions-on-retainage/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM082919-LIT Illinois Expands Protections Under the Contractor Prompt Payment Act by Imposing New Restrictions on Retainage https://www.seyfarth.com:443/publications/OMM082919-LIT Thu, 29 Aug 2019 00:00:00 -0400 <p> The Illinois Contractor Prompt Payment Act, 815 ILCS 603/1, <em>et seq</em>. (the &ldquo;Act&rdquo;) was first enacted in 2007 and designed to safeguard contractors and subcontractors on private projects by providing a mechanism to expedite payments for work performed. The Act applies to all private construction projects in Illinois, except those involving single family residences or multiple family residences with twelve or fewer units in a single building. With the Act, Illinois joined a growing number of states that had enacted similar legislation.</p> <p> On August 20, 2019, Illinois amended the Act and again joined a growing number of states that are expanding their protections for contractors, this time by restricting the amount of retainage that may be withheld on a construction project. The amendment, codified at 815 ILCS 603/20, imposes a ten percent (10%) cap on the amount of retainage that may be withheld and reduces that cap to five percent (5%) once the project is fifty percent (50%) complete. Specifically, the Act provides:</p> <p style="margin-left: 80px; text-align: justify;"> <em>No construction contract may permit the withholding of retainage from any payment in excess of the amounts permitted in this Section. A construction contract may provide for the withholding of retainage of up to 10% of any payment made prior to the completion of 50% of the contract. When a contract is 50% complete, retainage withheld shall be reduced so that no more than 5% is held. After the contract is 50% complete, no more than 5% of the amount of any subsequent payments made under the contract may be held as retainage.</em></p> <p style="margin-left: 80px; text-align: justify;"> 815 ILCS 603/20</p> <p> A &ldquo;construction contract&rdquo; under the Act &ldquo;means a contract or subcontract&rdquo; for the &ldquo;design, construction, alteration, improvement or repair&rdquo; of property. Therefore, this cap applies equally to owner-contractor agreements and to contractor-subcontractor agreements, as well as to owner-architect and design agreements. Also, because the terms &ldquo;contractor&rdquo; and &ldquo;subcontractor&rdquo; have the same broad meanings ascribed to them by the Illinois Mechanics Lien Act, this cap equally applies to construction managers, design-builders, sub-subcontractors, and material suppliers.&nbsp;</p> <p> While the amendment is effective immediately, it does not impact contracts entered into prior to August 20, 2019. It will, however, impact any ongoing contract negotiations involving the withholding of retainage.&nbsp;</p> <p> The amendment represents a significant victory for contractors, who have long argued that withholding 10% of payments earned until the end of a project negatively impacts their cash flow. The requirement to reduce retainage to 5% once the project reaches its midpoint and thereafter to withhold no more than 5% from subsequent payments will result in an infusion of funds to the contractor and a reduction of an owner&rsquo;s security from what has been traditionally withheld on construction projects in Illinois. Whether there will be a resulting increase in the prevalence of payment and performance bonds or other forms of security on construction projects remains to be seen.&nbsp;</p> <p> The cap presumably is tied to the contract price for determining when the contract has been 50% completed, as opposed to the overall percentage of work actually performed. But for projects where those benchmarks may not be commensurate with each other, this issue could be the subject of contract negotiations between owner and contractor.&nbsp;</p> <p> Owners will need to bear the cap in mind when they negotiate construction financing with lenders. For, while the amount of retainage that owners may withhold is now capped, the Act does not apply to construction loans or limit the amount of retainage that lenders may insist on withholding from construction draws. Owners will need to make sure that their cash flow requirements for a project are sufficient, in view of what their lenders ultimately insist on withholding.</p> https://www.seyfarth.com:443/publications/EL082919 Future Enterprises: New Safety Hazards from Nanotechnology Materials and Processes on the Horizon https://www.seyfarth.com:443/publications/EL082919 Thu, 29 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The Nanotechnology Research Center (NTRC), part of the National Institute for Occupational Safety and Health (NIOSH), has identified new safety hazards from the expanding nanotechnology industry.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/future-enterprises-new-safety-hazards-from-nanotechnology-materials-and-processes-on-the-horizon/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT082919 The Week in Weed: August 20, 2019 https://www.seyfarth.com:443/publications/TBT082919 Thu, 29 Aug 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/the-week-in-weed-august-20-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM082819-EB DOL Clarifies Employers’ Retirement Plan Obligations Under USERRA https://www.seyfarth.com:443/publications/OMM082819-EB Wed, 28 Aug 2019 00:00:00 -0400 <div> On August 9, 2019, the Department of Labor (&ldquo;DOL&rdquo;) issued <a href="https://www.dol.gov/agencies/vets/programs/userra/userra_fs1">USERRA Fact Sheet 1</a>, providing guidance to employers about their pension obligations to reemployed service members under the Uniformed Services Employment and Reemployment Rights Act of 1994 (&ldquo;USERRA&rdquo;).</div> <div> &nbsp;</div> <div> &nbsp;</div> <h2> Background</h2> <div> Since its enactment in 1994, USERRA has provided that employees who return to employment with USERRA reemployment rights are entitled to service and certain retirement benefit accruals for their period of absence to perform military service. Generally, the returning employee is entitled to vesting, eligibility, and benefit service credit for the entire period of the absence. The employee is also entitled, upon reemployment, to all benefit accruals that are not conditioned on employee contributions or deferrals and to employer accruals that are conditioned on employee contributions/deferrals to the extent that the employee makes up missed contributions/deferrals upon return from military service.</div> <div> &nbsp;</div> <div> Because many retirement plan contributions are based on employee compensation, and most employees do not receive pay or full pay during periods of military leave, USERRA requires employers to deem compensation for the military employees&rsquo; period of absence for purposes of calculating retirement plan accruals attributable to the period of military service. USERRA provides that such deemed compensation must be computed at the compensation rate the employee would have received but for the period of military service, or if that determination cannot be made with reasonable certainty, on the basis of the employee&rsquo;s average rate of compensation during the 12-month period immediately preceding the military leave of absence (or, if shorter, the period of employment immediately preceding the military leave of absence).</div> <div> &nbsp;</div> <div> This deemed compensation requirement has raised several practical questions for employers seeking to comply with USERRA once an employee returns from military service. For example, what constitutes &ldquo;reasonable certainty&rdquo; when calculating the compensation an employee would have earned? Is deemed compensation based on base pay only, or must it include overtime? How should the 12-month lookback rule be applied in the case of multiple periods of military leave&mdash;should the employer reach back beyond 12 months to find the last 12 months of employment without military service, use an average of those months in the last 12 months of employment with no military leave, or use only the months since the prior period of military leave as the lookback period?</div> <div> &nbsp;</div> <div> &nbsp;</div> <h2> The Guidance</h2> <div> Through a series of Q&amp;As and examples, the fact sheet provides the DOL&rsquo;s viewpoint on many of these practical issues. For example:</div> <div> &nbsp;</div> <ol> <li> A service member&rsquo;s rate of compensation may not be determined with reasonable certainty where the service member consistently works variable hours or earns various rates of pay (e.g., under a commission scheme).</li> <li> If an employee who is scheduled to work 40 hours per week consistently worked 40 hours per week prior to the military absence, it is reasonably certain that the employee would have worked 40 hours per week during the period of service. However, if the same employee who was scheduled to work 40 hours per week consistently worked 50 hours per week before military service, it is reasonably certain the employee would have worked 50 hours per week during the period of service. And if the same employee who was scheduled to work 40 hours per week worked varying hours in the period preceding military service, then the employee&rsquo;s compensation cannot be calculated with reasonable certainty, and the 12-month lookback approach should be utilized.</li> <li> An employee whose compensation varies by month has been employed by the company for six years. The employee returns from a one-year period of military service, works an additional six months, then serves an additional two weeks in the military before returning. To calculate the employee&rsquo;s rate of compensation for the most recent two-week period of military leave, the employer should look at the last 12 months of employment preceding the period of military leave and disregard the 6 months the employee spent on military service. Therefore, the employee&rsquo;s rate of compensation should be based on the average rate of compensation for the six months the employee worked upon returning from the one-year period of military leave.</li> <li> An employee whose compensation varies has been employed by the company for ten years. Three months ago, the employee returned from a one-week military absence. The employee subsequently performed military service for one month. To calculate the employee&rsquo;s rate of compensation for the most recent one month period of military leave, the employer should look at the average rate of compensation during the last 12 months of employment preceding the one month period of military leave and disregard the 1 week the employee spent on military leave.</li> </ol> <p> &nbsp;</p> <h2> Key Takeaways</h2> <div> The ruling provides the DOL&rsquo;s views on several of the more granular questions involved in applying USERRA&rsquo;s requirements for calculating retirement plan contributions upon an employee&rsquo;s return from military leave. Even more importantly, the fact sheet emphasizes that these requirements must be applied to employees on an individual basis and that there likely is no one across-the-board approach that will adequately address each returning service member&rsquo;s individual circumstances. Because USERRA&rsquo;s scheme for retirement plan contributions is complex, full of gray areas, and requires an individualized approach, practitioners will likely want to consult with legal counsel to determine compliance risks for all but the most straightforward situations.</div> https://www.seyfarth.com:443/publications/masseymillergbcc082819 Hillary Massey and Barry Miller authored an article in the Greater Boston Chamber of Commerce https://www.seyfarth.com:443/publications/masseymillergbcc082819 Wed, 28 Aug 2019 00:00:00 -0400 <p> Hillary Massey and Barry Miller authored an August 28 article in the Greater Boston Chamber of Commerce, &quot;The Massachusetts Equal Pay Act: One Year Later.&quot; You can read the <a href="https://www.bostonchamber.com/our-impact/insights-blog/equal-pay-act">full article here</a>.</p> https://www.seyfarth.com:443/publications/EL082719 Cyber Restraints of Trade in the New Era of Digital Markets https://www.seyfarth.com:443/publications/EL082719 Tue, 27 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: An enforceable restraint of trade can be a key business asset, giving an employer time to recover when a senior employee has left the business for a competitor. Like a good insurance policy, it&rsquo;s a big relief to have it when you need it.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/cyber-restraints-of-trade-in-the-new-era-of-digital-markets/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS082719 Newly Enacted Workplace Transparency Act to Change Illinois Employment Law Landscape https://www.seyfarth.com:443/publications/TS082719 Tue, 27 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On Friday, August 9, 2019, Governor J. B. Pritzker signed a wide-ranging bill that, among other things, encompasses the Workplace Transparency Act. The Act, which will impact nearly every employer in Illinois: significantly restricts inclusion of non-disclosure and non-disparagement provisions in employment agreements, separation agreements, and settlement agreements; limits an employer&rsquo;s ability to &ldquo;unilaterally&rdquo; require certain terms (including mandatory arbitration) as a condition of employment; creates annual training and disclosure requirements to the Illinois Department of Human Rights, and establishes new civil penalties for non-compliance. The new law includes additional requirements specific to restaurants, bars, hotels, and casinos. Those requirements take effect immediately, whereas the broader employment law changes take effect January 1, 2020.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/08/articles/legislation-2/newly-enacted-workplace-transparency-act-to-change-illinois-employment-law-landscape/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ERISA082719 ERISA Means What It Says And Nothing More https://www.seyfarth.com:443/publications/ERISA082719 Tue, 27 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The Court of Appeals for the Seventh Circuit recently held that once a multi-employer pension fund accelerates withdrawal liability periodic payments into a lump sum liability, there is no statutory mechanism to revoke that acceleration. So the Court affirmed a finding that the fund&rsquo;s trustees waited too long to collect on the lump sum debt when it sued more than six years after the initial acceleration.<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/08/27/erisa-means-what-it-says-and-nothing-more/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/hersherkfrog082719 Ari Hersher interviewed on KFROG's "Eye on the Community" https://www.seyfarth.com:443/news/hersherkfrog082719 Tue, 27 Aug 2019 00:00:00 -0400 <p> Ari Hersher was interviewed August 27th on KFROG&#39;s &quot;Eye on the Community&quot;, &quot;Predictive Scheduling Laws Impact Business.&quot; Hersher said that these are well-intentioned laws; however, there have been unintended negative consequences for the business community. You can listen to the <a href="https://omny.fm/shows/eye-on-the-community/predictive-scheduling-laws-impact-business">full interview here</a>.</p> https://www.seyfarth.com:443/news/atlantalelit082619 Seyfarth Grows Atlanta Office with Labor & Employment and Litigation Group https://www.seyfarth.com:443/news/atlantalelit082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> <em><span style="font-size:14px;">Four Partners Join the Firm&rsquo;s Southeast Presence </span></em></p> <p> ATLANTA (August 26, 2019) -- Seyfarth Shaw LLP announced today the arrival of four partners to its Labor &amp; Employment and Litigation departments in Atlanta. Nancy E. Rafuse (Labor &amp; Employment), William B. &ldquo;Hill&rdquo; Hill, Jr. (Litigation), James J. Swartz, Jr. (Labor &amp; Employment), and Stan Hill (Labor &amp; Employment) all join Seyfarth from Polsinelli&rsquo;s Atlanta office.</p> <p> Rafuse, who served as chair of Polsinelli&rsquo;s Labor &amp; Employment department, leads the team of three Labor &amp; Employment partners joining the firm. She has over 25 years of experience in employment law, as a c-suite advisor and employment litigator, including as lead counsel in class-action and &ldquo;bet the company&rdquo; trials.</p> <p> &ldquo;This is an exciting moment for our department. It&rsquo;s rare to announce the arrival of three remarkable partners who are highly skilled in the most complicated matters developing in today&rsquo;s workplace,&rdquo; Seyfarth Labor &amp; Employment chair Laura Maechtlen said. &ldquo;Nancy, Jim and Stan bring an unparalleled acumen in wage and hour class actions, labor employee relations, internal executive suite investigations, and trial work.&rdquo;</p> <p> With more than 435 lawyers across the country, Seyfarth&rsquo;s Labor &amp; Employment department stands at the forefront of the employment industry, defending companies of all sizes at the epicenter of today&rsquo;s largest, most complex, and strategic matters.</p> <p> The Litigation side of the group features William &ldquo;Hill&rdquo; Hill, a partner with over 40 years of experience. Earlier in his distinguished career, Hill worked as a Deputy Attorney General for Georgia followed by a career in public service that culminated in a position as a Superior Court Judge for Fulton County.</p> <p> &ldquo;In the legal and business community, Hill is well-known for his powerful courtroom presence and his resulting victories in high-value litigation disputes,&rdquo; said James McGrath, chair of Seyfarth&rsquo;s Litigation department. &ldquo;I speak for the entire department in welcoming Hill to our outstanding bench of litigators.&rdquo;</p> <p> Comprised of more than 160 attorneys, Seyfarth&rsquo;s Litigation department helps clients with every aspect of their dispute resolution needs, nationally and internationally. The practice covers the full spectrum of litigation services, including trials and appeals in federal and state courts.</p> <p> &ldquo;Every lawyer in this group is a dynamic talent and well-respected by clients and colleagues in Atlanta, and across the country,&rdquo; said Steven Kennedy, managing partner of Seyfarth&rsquo;s Atlanta office. &ldquo;Building off of the firm&rsquo;s already strong reputation in the Southeast, these new team members enhance the capabilities of our Atlanta office, the Labor &amp; Employment and Litigation departments, and the firm.&rdquo;</p> <p> Founded in 1996, Seyfarth&rsquo;s Atlanta office has grown to more than 100 lawyers who practice in nearly all areas of the law. The office has been recognized as one of the fastest growing Atlanta law firms over the last five years.</p> <p> <strong>About the New Partners: </strong></p> <p> <strong>Nancy E. Rafuse</strong> focuses her practice representing companies on the full gamut of employment and litigation obstacles facing today&rsquo;s employers. Her trial experience is extensive, acting as lead trial counsel in every area of employment litigation, including matters involving Titles VI and VII of the Civil Rights Act, Section 1981, the Americans with Disabilities Act, the Equal Pay Act, the Age Discrimination Act, FMLA, FLSA, ERISA, and OSHA. In addition, Rafuse counsels businesses on executive employment issues, such as executive contracts and compensation agreements, and executive investigations, placements and departures.</p> <p> Rafuse received her J.D., <em>magna cum laude</em>, from the University of Georgia School of Law, <em>Order of the Coif</em>, where she served as Notes Editor for the <em>Georgia Law Review</em>. Earlier at the University of Georgia, she earned a B.B.A., <em>cum laude</em>, in Finance.</p> <p> <strong>William B. &ldquo;Hill&rdquo; Hill, Jr.</strong> represents clients in negotiations, ADR, at trial and on appeal, and also in significant and high-profile cases, including commercial litigation, products liability, employment law, Lanham Act cases, internal investigations, restrictive covenants enforcements and trade secrets, fiduciary and shareholder disputes and professional services litigation. He has successfully counseled major industries, private companies and individuals in state and federal courts throughout the United States.</p> <p> Hill received his J.D. and B.A. from Washington and Lee University in Lexington, Virginia.</p> <p> <strong>James J. Swartz, Jr. </strong>advises employers on all issues facing businesses, including class and collective lawsuits, discrimination and retaliation claims, restrictive covenants, wage and hour matters, public accommodation cases, and sexual harassment claims. In addition, he counsels clients with workplace investigations and audits of EEO and wage and hour practices.</p> <p> Swartz received his J.D. from the University of Notre Dame Law School, where he served as Symposium Editor for the <em>Journal of College and University Law</em>. Earlier at Notre Dame, he earned his Bachelors of Arts Degree.</p> <p> <strong>Stan Hill</strong> focuses on individual, collective, and class actions brought under state and federal employment laws, including Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Fair Labor Standards Act, and state wage and hour laws.</p> <p> Hill earned his J.D. from Vanderbilt University Law School, where he served as Executive Authorities Editor for the <em>Vanderbilt Journal of Transnational Law</em>. He received his B.S., <em>highest honor</em>, in Materials Science and Engineering from the Georgia Institute of Technology.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 16 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com">bkiefer@seyfarth.com</a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/publications/MA082619 California Supreme Court Rejects Conversion Claim for Unpaid Wages https://www.seyfarth.com:443/publications/MA082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:&nbsp;</em></strong><em>In Voris v. Lampert, the California Supreme Court held that unpaid wages cannot be recovered through a tort claim for conversion.</em></p> <p> <strong>The Facts</strong></p> <p> Brett Voris, in exchange for promises of later payment of wages and stock, did substantial work for start-up corporations formed by his friend, Greg Lampert. When Voris was fired, he sued the corporations for the wages and stock he had earned but never received. Voris also sought to hold Lampert personally liable on an alter-ego theory and on a claim of conversion. While Voris won his lawsuit against the corporations, he lost his claims against Lampert, which were based on an alter-ego theory, and found himself unable to collect his $350,000 judgment against the financially ailing corporations.</p> <p> After multiple appeals, the question the California Supreme Court agreed to review was this: while corporate shares are subject to a tort claim for conversion, does the conversion tort also apply to a claim for unpaid wages?</p> <p> <strong>The Supreme Court Decision </strong></p> <p> In its decision of August 15, 2019, the Supreme Court answered &ldquo;no,&rdquo; explaining that &ldquo;the tort of conversion is &hellip; &lsquo;the wrongful exercise of dominion over personal property of another.&rsquo;&rdquo; And although money can be the subject of an action for conversion, this is only the case when the money is &ldquo;a specific sum capable of identification,&rdquo; as, for example, where a real estate agent accepts commissions on behalf of himself and a business partner, but then refuses to give the partner his share.</p> <p> The Supreme Court distinguished between an employer exercising &ldquo;dominion over a specifically identifiable pot of money that already belongs to the employee&rdquo; and an employer failing &ldquo;to reach into its own funds to satisfy its debt.&rdquo; The former wrong is what conversion aims to remedy, whereas the latter wrong is simply a failure to satisfy a mere contractual right of payment.</p> <p> In declining to extend the tort of conversion to the wrong of unpaid wages, the Supreme Court observed that &ldquo;there already exist extensive remedies for the nonpayment of wages,&rdquo; with &ldquo;the primary bulwark&rdquo; being the California Labor Code. The Supreme Court reasoned that a conversion claim for unpaid wages would largely duplicate Labor Code remedies, and would be a particularly blunt tool for deterring the nonpayment of wages&mdash;reaching not only those who act in bad faith, but also those who make good-faith mistakes, such as clerical errors.&nbsp;</p> <p> <strong>The Dissenting Opinion </strong></p> <p> Justice Cu&eacute;llar, in dissent, argued two main points: First, plaintiffs <em>have</em> recovered pay for labor through the tort of conversion&mdash;a real estate agent seeking unpaid commissions (<em>Sanowicz v. Bacal</em>), a seller of consigned goods seeking a portion of sales proceeds (<em>Fischer v. Machado</em>), an attorney seeking legal fees from a client&rsquo;s award (<em>Weiss v. Marcus</em>), and an employee seeking promised pay in the form of stock (the present case). Justice Cu&eacute;llar saw no principled argument for why the tort of conversion &ldquo;peters out&rdquo; when it comes to <em>wages</em>&mdash;&ldquo;the common way by which workers make their way in the world.&rdquo; Justice Cu&eacute;llar also cited a DLSE case in which the Labor Commissioner invoked conversion to collect settlement checks that were returned to a defendant as undeliverable and that the defendant refused to pay into California&rsquo;s unpaid wage fund. Second, Justice Cu&eacute;llar noted that while the Labor Code generally does provide &ldquo;extensive remedies for the nonpayment of wages,&rdquo; they proved inadequate for the employee here.</p> <p> <strong>What <em>Voris </em>Means for Employers</strong></p> <p> Crisis averted! As a Court of Appeal decision has noted, permitting a conversion claim to proceed in this kind of case would mean that &ldquo;any claimed wage and hour violation would give rise to tort liability for conversion as well as the potential for punitive damages.&rdquo; <em>Voris</em> is a rare example of judicial restraint recognizing that the Legislature&mdash;not the judiciary&mdash;has the job to address any meaningful gap that might exist in what is already a comprehensive remedial structure addressing unpaid wages.</p> https://www.seyfarth.com:443/publications/ADA082619 FLORIDA JUDGE SANCTIONS SERIAL ADA PLAINTIFF ALEXANDER JOHNSON AND ATTORNEY SCOTT DININ https://www.seyfarth.com:443/publications/ADA082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Serious sanctions imposed on a serial ADA Title III plaintiff and his attorney should concern the plaintiffs&rsquo; bar.<br /> <br /> <a href="https://www.adatitleiii.com/2019/08/florida-judge-sanctions-serial-ada-plaintiff-alexander-johnson-and-attorney-scott-dinin/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE082619 Future Enterprises: New Safety Hazards from Nanotechnology Materials and Processes on the Horizon https://www.seyfarth.com:443/publications/WSE082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The Nanotechnology Research Center (NTRC), part of the National Institute for Occupational Safety and Health (NIOSH), has identified new safety hazards from the expanding nanotechnology industry.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/workplace-policies-and-processes/future-enterprises-new-safety-hazards-from-nanotechnology-materials-and-processes-on-the-horizon/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS082619 Maryland Low-Wage Workers Are Exempt from Non-Compete Clauses https://www.seyfarth.com:443/publications/TS082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> Joining the wave of jurisdictions limiting the competitive restraints employers may place on low-wage employees is Maryland. Maryland&rsquo;s Noncompete and Conflict of Interest Clauses Act (the &ldquo;Act&rdquo;)?which passed without Governor Larry Hogan&rsquo;s signature on May 28, 2019?will take effect on October 1, 2019. Recognizing that certain non-compete and conflict-of-interest clauses violate Maryland&rsquo;s public policy and are therefore null and void, the Act prohibits employers from mandating that certain employees not join another employer or become self-employed in a same or similar business area. The covered employees are those who earn equal to or less than $15 per hour or $31,200 annually. This prohibition applies even if the parties entered into the employment agreement outside of Maryland and is not restricted to only post-employment actions. That is, a qualified employee may work for a competitor even during the term of employment.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/08/articles/legislation-2/maryland-low-wage-workers-are-exempt-from-non-compete-clauses/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/FutureEnterprise082619 New Safety Hazards from Nanotechnology Materials and Processes on the Horizon https://www.seyfarth.com:443/publications/FutureEnterprise082619 Mon, 26 Aug 2019 00:00:00 -0400 <p> The Nanotechnology Research Center (NTRC), part of the National Institute for Occupational Safety and Health (NIOSH), has identified new safety hazards from the expanding nanotechnology industry. We have previously blogged on future issues related to the safety of automation and technology in the workplace, including, National Safety Council Congress: Executive Forum Industry 4.0 &ndash; EHS in the Future of the Workplace, Future Enterprise &ndash; Workplace Safety Compliance Comes to the Forefront for Expanding Healthcare Industry, A Global Perspective on the Future of Wearable Technology, and Robotics, Automation, and Employee Safety for the Future Employer. One of the potential safety issues facing employers relates to the use of nanomaterials and processes involving nanotechnology in the workplace. In a recent publication (NIOSH Publication Number 2019-147, August 2019), the NTRC summarized its research aimed at understanding the potential effects on human health of exposure to engineered nanomaterials and seeking to develop methods to control or eliminate exposures. According to NIOSH, nanoparticles are extremely small particles (between 1 and 100 nanometers, 10-9 m) that are designed to have certain new or unique characteristics, like strength, elasticity, or reactivity. The concept is that these new and unique characteristics or properties make advanced materials and products possible. The U.S. Occupational Safety and Health Administration (OSHA) has published a Fact Sheet, Nanotechnology: Working Safely with Nanomaterials (OSHA FS-3634 - 2013) to educate the public on safety hazards related to nanomaterials. The Fact Sheet indicates that &ldquo;workers who use nanotechnology in research or production processes may be exposed to nanomaterials through inhalation, skin contact, or ingestion. The &ldquo;fact sheet&rdquo; provides basic information to workers and employers on the most current understanding of potential hazards associated with this rapidly-developing technology and highlights measures to control exposure to nanomaterials in the workplace.&rdquo; The OSHA Fact Sheet notes that &ldquo;some examples of workplaces that may use nanomaterials include chemical or pharmaceutical laboratories or plants, manufacturing facilities, medical offices or hospitals, and construction sites.&rdquo; The NTRC Publication focuses on these areas from an occupational safety and health perspective to assist industry in preparing for the future by: Increasing understanding of potential health risks to workers making and using nanomaterials. Preventing occupational exposures to nanomaterials. Evaluating potential worker health risks from advanced material and manufacturing processes. For instance, the NTRC prioritizes the growing number of engineered nanomaterials for laboratory and field research, focusing on the ones that have the greatest potential for exposure and harm to workers. NTRC conducts field investigations and epidemiological studies for a realistic understanding of exposure and risks to nanomaterial workers. It also issues recommendations on how to use engineering controls and personal protective equipment to mitigate exposure to engineered nanomaterials, along with providing nanomaterial businesses with &ldquo;guidance&rdquo; on how to keep workers safe. In that continuing effort, the NTRC recently published its &ldquo;Continuing to Protect the Nanomaterial Workforce: NIOSH Nanotechnology Research Plan for 2018-2025.&rdquo; (NIOSH Publication Number 2019-116, January 2019). This Plan seeks to be &ldquo;a roadmap to advance (1) understanding of nanotechnology-related toxicology and workplace exposures and (2) implementation of appropriate risk management practices during the discovery, development, and commercialization of engineered nanomaterials along their product lifecycle.&rdquo; Employer Takeaway As we continue to move boldly into the future of nanotechnology, industries must make sure employees are knowledgeable and trained to work safely with these materials and the related processes and machines. Company policies and training materials must be updated to adjust to these new hazards. For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) or Workplace Policies and Handbooks Teams.<br /> <br /> <a href="https://www.futureenterprise.com/blog/2019/8/26/future-enterprises-new-safety-hazards-from-nanotechnology-materials-and-processes-on-the-horizon">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH082319 Does a Third-Party’s Bonus Payment to Your Employees Require You to Pay More Overtime? Citing Clark Griswold, Appeals Court Says Not Necessarily. https://www.seyfarth.com:443/publications/WH082319 Fri, 23 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On Tuesday, the Third Circuit issued a decision rejecting the U.S. DOL&rsquo;s general position that incentive bonuses paid to employees by a third-party must be factored into overtime pay. While the decision merely endorses a more tempered &ldquo;it depends&rdquo; view, it provides welcome news and guidance for employers that provide labor to third-parties.<br /> <br /> <a href="https://www.wagehourlitigation.com/regular-rate/does-a-third-partys-bonus-payment-to-your-employees-require-you-to-pay-more-overtime-citing-clark-griswold-appeals-court-says-not-necessarily/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/weisswgn082319 Philippe Weiss interviewed on WGN Radio https://www.seyfarth.com:443/news/weisswgn082319 Fri, 23 Aug 2019 00:00:00 -0400 <p> Philippe Weiss was interviewed August 23rd on WGN Radio, &quot;Wintrust Business Lunch 8/23/19: Business Mission Statements.&quot; Weiss sorted through the mission statement change said to be coming from some of the biggest companies in the world by shifting their number one business driver. You can listen to the full interview at minute 14:32 <a href="https://wgnradio.com/2019/08/23/wintrust-business-lunch-8-23-19-presidential-tweets-business-mission-statements-the-slowing-ethanol-business/">here</a>.</p> https://www.seyfarth.com:443/news/passantinobloomberglaw082219 Alex Passantino quoted in Bloomberg Law https://www.seyfarth.com:443/news/passantinobloomberglaw082219 Thu, 22 Aug 2019 00:00:00 -0400 <p> Alex Passantino was quoted in an August 22 story from Bloomberg Law, &quot;Trump Wage Chief Overhauls Agency, Internal Documents Reveal.&quot; Passantino noted that it makes more sense to place government contracts enforcement in the same division that enforces the Fair Labor Standards Act, as well as to transfer wage survey work to the new data office.</p> https://www.seyfarth.com:443/publications/EL082219 DOT Publishes Proposed Changes to Hours of Service Regulations for Commercial Motor Vehicle Drivers https://www.seyfarth.com:443/publications/EL082219 Thu, 22 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The U.S. Department of Transportation&rsquo;s Federal Motor Carrier Safety Administration (FMCSA) published this week a notice of proposed rulemaking (NPRM) on changes to &ldquo;hours of service&rdquo; (HOS) rules to &ldquo;increase safety on America&rsquo;s roadways.&rdquo; 84 FR 44190 (Aug. 22, 2019). The proposal, if adopted, would update existing regulations for commercial motor vehicle (CMV) drivers.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/dot-publishes-proposed-changes-to-hours-of-service-regulations-for-commercial-motor-vehicle-drivers/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WLS082219 Finger pointing on agreement approvals but… https://www.seyfarth.com:443/publications/WLS082219 Thu, 22 Aug 2019 00:00:00 -0400 <p> Lots has been said recently in the press about enterprise agreement making and the approval process by the Fair Work Commission (FWC). In short, the numbers of agreements being made is down and approval times are &ldquo;long&rdquo;. The graph below, recently cited in an AFR article, demonstrates a possible link between approval times slowing and a Full Bench decision involving Coles. But the numbers are turning.<br /> <br /> <a href="https://www.workplacelawandstrategy.com.au/2019/08/finger-pointing-on-agreement-approvals-but/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT082219 The Week in Weed: August 23, 2019 https://www.seyfarth.com:443/publications/TBT082219 Thu, 22 Aug 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/the-week-in-weed-august-23-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS082219 Webinar Recap! Enforcement of Non-Competes: Increasing Difficulty Depending on State https://www.seyfarth.com:443/publications/TS082219 Thu, 22 Aug 2019 00:00:00 -0400 <p> In Seyfarth&rsquo;s fourth installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys Kristine Argentine, Eric Barton, and Katelyn Miller focused on the enforcement of non-competes and how the difficulty of enforcement of these restrictive covenants vary by state, especially based on recent legislation in various states.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/08/articles/noncompete-enforceability/webinar-recap-enforcement-of-non-competes-increasing-difficulty-depending-on-state/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE082119 U.S. EPA Indicates that Air Pollution Trends Show Cleaner Air, Growing Economy https://www.seyfarth.com:443/publications/WSE082119 Wed, 21 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The EPA has posted an interesting flyer on &ldquo;Our Nation&rsquo;s Air,&rdquo; the Status and Trends Through 2018.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/caa/u-s-epa-indicates-that-air-pollution-trends-show-cleaner-air-growing-economy/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM082119-EB Qualified Plan Uncashed Check Guidance Issued Related to Tax Obligations https://www.seyfarth.com:443/publications/OMM082119-EB Wed, 21 Aug 2019 00:00:00 -0400 <p> On August 14, 2019, the IRS issued Revenue Ruling 2019-19, providing guidance to both tax-qualified plan administrators and participants on the tax treatment of plan distribution checks that are not cashed.&nbsp;</p> <h2> Background</h2> <p> In recent years, the issue of uncashed distribution checks has gained increased attention (and scrutiny) from the DOL and IRS and, as a result, has become a primary concern for plan administrators. Despite the best efforts of plan administrators to ensure that terminated participants receive their funds, it is common for checks to go uncashed, particularly in those situations where distribution was mandatory (e.g., account balances that are less than $1,000 and minimum required distributions).</p> <p> A distribution from a tax-qualified plan generally is subject to income tax withholding and reported on IRS Form 1099-R for the year of distribution, and the participant must include the amount of the distribution in gross income for that year. However, when a check goes uncashed, one question that plan administrators commonly face is what to do about the income tax withholding and Form 1099-R reporting, i.e., should the plan administrator issue a corrected Form 1099-R for the uncashed check and recoup the tax withholding, reversing the transaction.&nbsp;&nbsp;</p> <h2> The Ruling</h2> <p> The ruling lays out a specific situation where a plan administrator is required to make a distribution under $1,000 to a plan participant in 2019. The plan administrator sends a check to the participant for the amount of the mandatory distribution, less applicable withholding taxes. The participant receives the check but does not cash it or roll over any portion of the distribution.&nbsp;</p> <p> The ruling addresses three concerns relating to the uncashed check, one related to income inclusion for the participant and two addressing the plan administrator&rsquo;s withholding and reporting obligations. Specifically, the ruling concludes that:</p> <ol> <li> The distribution is taxable to the participant and must be included in the participant&rsquo;s gross income for 2019. The participant cannot escape this tax liability by not cashing the check in 2019 for whatever reason (even if the check is cashed in a later calendar year).</li> <li> The fact that the participant did not cash the check in 2019 does not change the plan administrator&rsquo;s withholding requirements. The plan administrator must withhold and be liable for depositing the applicable withholding tax (or direct the third-party payor to withhold the tax as permitted under law).</li> <li> The plan administrator must report the distribution and the federal income tax withheld on a Form 1099-R for 2019 to satisfy its reporting obligations. This obligation is unchanged by the fact that the distribution check was not cashed in 2019.</li> </ol> <p> &nbsp;</p> <h2> Key Takeaways</h2> <p> The ruling provides welcome clarification to plan administrators but does not address some of the more complex issues that arise when distribution checks from a tax-qualified plan remain uncashed. For example, the ruling seems to draw a distinction between a participant who simply refuses to cash a check versus a participant who is truly missing and does not receive the distribution check. The facts on which this ruling is based make it clear that the participant could have cashed the check but chose not to do so. However, it does not appear that the holdings in the ruling would also apply in the case of a participant who never actually received the distribution check (e.g., because of a bad address).</p> <p> Accordingly, if a check is returned to the plan uncashed, demonstrating that it was never received, the administrator may still have an obligation to reverse the reporting and withholding on the distribution. In reality, in many cases a check is neither cashed nor returned. If the check is mailed to a presumptively good address, it appears that the administrator may assume the check was received and simply uncashed.&nbsp;</p> <p> Both the DOL and the IRS have indicated that additional guidance relating to missing participants and uncashed checks is forthcoming. Further, the ruling specifically states that the IRS will continue to analyze issues that arise in other situations involving uncashed checks, including situations involving missing participants.</p> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/TBT082119 Are Multi-State Employers “Rolled Too Tight” on their Drug Testing Policies? https://www.seyfarth.com:443/publications/TBT082119 Wed, 21 Aug 2019 00:00:00 -0400 <p> In a time where marijuana legalization is rapidly expanding, all employers should reassess their workplace drug testing policies to be sure they are in compliance with existing and soon to be effective state and local laws. Currently, thirty-three states, the District of Columbia, and Puerto Rico have passed laws broadly legalizing marijuana in some form. Eleven of those states &mdash; Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington &mdash; and the District of Columbia have adopted laws legalizing marijuana for recreational use. The Illinois law, which will become effective January 1, 2020, is the most expansive recreational law to date and has created a lot of uncertainty with respect to the risk assessment for drug testing of employees for marijuana. Nevada will prohibit employers from taking adverse action against applicants who test positive for marijuana, with exceptions for, among other jobs, safety-sensitive positions and motor vehicle drivers who are subject to testing under state or federal law. New York City, with some similar exceptions, will bar employers from requiring applicants to submit to testing for marijuana on May 10, 2020. This rapidly evolving legal landscape presents new challenges for employers, especially multi-state employers. Employers must balance complying with conflicting federal, state, and local laws, maintaining a safe work environment, and protecting applicants&rsquo; and employees&rsquo; privacy and other legal rights.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/are-multi-state-employers-rolled-too-tight-on-their-drug-testing-policies/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/maatmanlaw360082119 Gerald Maatman quoted in Law360 https://www.seyfarth.com:443/news/maatmanlaw360082119 Wed, 21 Aug 2019 00:00:00 -0400 <p> Gerald Maatman was quoted in an August 21 story from Law360, &quot;Employers Far Outpacing Workers In Pretrial Wins.&quot; Maatman said that settling makes sense for businesses in many cases.</p> https://www.seyfarth.com:443/news/scrogginsszybaschneidermhl082119 Andrew Scroggins, Robert Szyba and Ryan Schneider quoted in Material Handling & Logistics https://www.seyfarth.com:443/news/scrogginsszybaschneidermhl082119 Wed, 21 Aug 2019 00:00:00 -0400 <p> Andrew Scroggins, Robert Szyba and Ryan Schneider were quoted in an August 21 story from Material Handling &amp; Logistics, &quot;Despite Laws Against It, Age Discrimination Persists.&quot; The Seyfarth lawyers advise employers to organize their recruitment efforts based on more objective qualifications. You can read the <a href="https://www.mhlnews.com/labor-management/despite-laws-against-it-age-discrimination-persists">full article here</a>.</p> https://www.seyfarth.com:443/news/hersherbmd082019 Ari Hersher quoted in Business Management Daily https://www.seyfarth.com:443/news/hersherbmd082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> Ari Hersher was quoted in an August 20 story from Business Management Daily, &quot;Predictive scheduling laws pick up steam.&quot; Hersher said that these are well-intentioned laws. However, he said that there have been unintended negative consequences for the business community including increasing litigation. You can read the <a href="https://www.businessmanagementdaily.com/60397/predictive-scheduling-laws-pick-up-steam/">full article here</a>.</p> https://www.seyfarth.com:443/news/maatmanbi082019 Gerald Maatman quoted in Business Insurance https://www.seyfarth.com:443/news/maatmanbi082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> Gerald Maatman was quoted in an August 20 story from Business Insurance, &quot;Ruling against Facebook could propel additional biometric lawsuits.&quot; Maatman said that over the past two years, five to six lawsuits have been filed daily in Illinois under BIPA, with &ldquo;virtually 99.9%&rdquo; of them class actions. You can read the <a href="https://www.businessinsurance.com/article/20190820/NEWS06/912330203/Ruling-against-Facebook-could-propel-additional-biometric-lawsuits">full article here</a>.</p> https://www.seyfarth.com:443/publications/WC082019 Good News For Employers: D.C. Circuit Insists On “Hard Look” At Uninjured Class Members At Class Certification Stage https://www.seyfarth.com:443/publications/WC082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In a decision with far&ndash;reaching implications for workplace class actions, the D.C. Circuit recently affirmed the denial of class certification of a Rule 23(b)(3) class on the grounds that the proposed class contained uninjured class members in the case of In Re Rail Freight Fuel Surcharge Antitrust Litigation, Dakota Granite Co, et. al. v. BNSF Railway Co., et. al. (decided August 16, 2019) (&ldquo;Rail Freight&rdquo;). In so doing, the D.C. Circuit joined the First Circuit in a decision issued last year, which denied certification on the same grounds. See In Re Asacol Antitrust Litig., 907 F. 3d 42, 51-58 (2018). The issue of whether a certified class may contain uninjured class members was left open in the Supreme Court&rsquo;s decision in Tyson Foods Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), and now has been answered in the negative by two federal Courts of Appeal. It should be required reading for any corporate counsel involved in workplace class action litigation.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/08/good-news-for-employers-d-c-circuit-insists-on-hard-look-at-uninjured-class-members-at-class-certification-stage/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM082019-LIT President Trump Issues Third Installment of Buy American Initiative https://www.seyfarth.com:443/publications/OMM082019-LIT Tue, 20 Aug 2019 00:00:00 -0400 <div> <p> President Trump continues to push forward with his &ldquo;Buy American, Hire American&rdquo; initiative with the issuance of his third Executive Order No. 13881 (the &ldquo;Order&rdquo;) on July 15, 2019, entitled &ldquo;Maximizing Use of American-Made Goods, Products, and Materials.&rdquo; This Order attempts to strengthen the standards that federal agencies must follow under the Buy American Act (&ldquo;BAA&rdquo;) by raising the threshold for domestic purchasing requirements.</p> <p> Specifically, this Order proposes rule changes that would require iron and steel end products used in federal procurements to contain 95% U.S. materials. This is significantly above the current 50% threshold. The Order further proposes a rule requiring non-iron and steel end products used in federal procurements to contain 55% U.S. materials, up from the current 50% threshold.</p> <p> This recent Order comes on the heels of two prior Executive Orders issued over the last two years.</p> <p> Executive Order No. 13788, signed on April 28, 2017, required federal agencies to &ldquo;scrupulously monitor, enforce, and comply with Buy American laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.&rdquo; Executive Order 13788 also mandated federal agency action on Buy American laws at specified dates, as well as subsequent reporting on implementation of Buy American laws. In short, agencies were instructed to follow the law and report back.</p> <p> Executive Order No. 13858 signed on January 31, 2019, instructed all agencies to maximize the use of iron and aluminum, as well as steel, cement, and other manufactured products produced in the United States in contracts, sub-contracts, purchase orders, or sub-awards. While Executive Order 13788 targeted recipients of &ldquo;federal grants&rdquo;, Executive Order 13858 amended that language to include those receiving &ldquo;Federal financial assistance&rdquo;, as defined in 2 C.F.R. &sect; 200.40&mdash;federal assistance received by private entities in the form of grants, cooperative agreements, direct appropriations, loans, etc. Thus, private entities receiving public funds will be &ldquo;encouraged&rdquo; to use domestic sources when procuring goods or services.</p> <p> Congress passed the BAA during the Great Depression to foster American industry by protecting it from foreign competition for federal procurement contracts. The BAA affords generous pricing preferences to offerors who certify their compliance with the domestic purchasing requirements stated in the act. Specifically, the BAA requires public agencies to procure articles, materials, and supplies that were mined, produced, or manufactured in the United States, except under five exempt circumstances. See 41 U.S.C. &sect; 8302(a).</p> <p> The BAA is one of several federal statutes implementing domestic purchasing requirements, including the &ldquo;Buy America Act&rdquo; and related regulations applicable to certain federal infrastructure and federal stimulus projects. See 49 U.S.C. &sect; 5323(j) (mass transit grants); 23 U.S.C. &sect; 313 (federally-funded highway grants); 49 U.S.C. &sect; 24305(f) (federal grants to Amtrak); 49 U.S.C. &sect; 50101 (grants to the Federal Aviation Administration); 48 C.F.R. &sect; 25.600, et seq. (projects using funds appropriated by the American Reinvestment and Recovery Act).</p> <p> The key to understanding the BAA is determining whether the solicited goods or &ldquo;end products&rdquo; are domestic, i.e. were mined, produced, or substantially manufactured in the United States. The FAR defines an &ldquo;end product&rdquo; as &ldquo;those articles, materials, and supplies to be acquired for public use.&rdquo; See 48 C.F.R. &sect; 25.003. The analysis of whether an end-product qualifies as domestic is done using a two-part test. See 48 C.F.R. &sect; 25.101. First, the end-product must be manufactured in the United States; second, more than 50% of all component parts (determined by cost of the components) must also be manufactured in the United States. If a product meets this two-part test, then it can be considered a &ldquo;domestic end product&rdquo; under the BAA. End products that do not qualify as domestic under this test are treated as foreign.</p> <p> The most recent Order proposes a new standard for iron and steel end products to qualify as domestic end products, by requiring that iron and steel end products contain 95% U.S. material. In addition, the new Order proposed to amend the Federal Acquisition Regulation (&ldquo;FAR&rdquo;) to increase the percentage of required U.S. material for all non-iron and steel products to 55%. The Order also directs the FAR Council to consider whether this threshold should be gradually increased over time to require that an end product contain a minimum 75% U.S. components in order to qualify as domestic. While the Order does not address the existing FAR requirement that the end product also be &ldquo;manufactured&rdquo; in the United States, it is assumed that this would remain a threshold requirement for constituting a &ldquo;domestic end product.&rdquo; See 48 C.F.R. &sect; 25.101</p> <p> The Order also directs the FAR Council to consider increasing the price evaluation preference that domestic end products enjoy under the BAA. The FAR currently provides that when a domestic offer is not the lowest offer, the Contracting Officer must assert an evaluation penalty against the price of any contractor&rsquo;s proposal. See 48 C.F.R. &sect; 25.105. Generally speaking, the applicable penalties for foreign offers are: 6% where the lowest domestic offer is from a large business; 12% when the lowest domestic offer is from a small business; and 50% for any Department of Defense procurements. See 48 C.F.R. &sect; 25.105(b)(1) and (2). The recent Order asks the FAR Council to consider amending these penalties from 6% to 20% for large businesses and from 12% to 30% for small businesses.</p> <p> Under the Order, the Secretary of Commerce and the Director of the Office of Management and Budget, in consultation with others, including the FAR Council, are required to submit a report to the President on any other changes to the FAR that &ldquo;the FAR Council should consider in order to better enforce the Buy American Act.&rdquo;</p> <p> The practical impact of this Order, as well as prior Executive Orders, remains to be seen. If implemented, domestic industries supplying domestic end products are certain to benefit in the form of a competitive advantage. However, this home field advantage could likely come at a cost to the American taxpayers, as the pool of qualified suppliers would be reduced, resulting in lesser competition. With decreased competition comes a possible increase in prices that the Government will pay to procure these products. Whatever the outcome, Buy American will continue to grab headlines as part of the President&rsquo;s agenda moving forward.</p> </div> https://www.seyfarth.com:443/publications/LR082019 NLRB ISSUES NOTICES OF PROPOSED RULE MAKING TO CODIFY CERTAIN UNION ELECTION PROCEDURES https://www.seyfarth.com:443/publications/LR082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> Authors: Howard M. Wexler and Samuel Sverdlov<br /> <br /> <a href="https://www.employerlaborrelations.com/2019/08/20/nlrb-issues-notices-of-proposed-rule-making-to-codify-certain-union-election-procedures/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL082019 Whew! Fifth Circuit Reinforces Importance of Documenting Performance Issues https://www.seyfarth.com:443/publications/EL082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In affirming summary judgment in favor of the defendant in an Family and Medical Leave Act (FMLA) interference and retaliation case, the Fifth Circuit reinforced the importance of documenting performance issues and following internal policies. This case serves as a good reminder for employers to continue to document performance issues and follow or, if necessary, revise internal company policies.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/whew-fifth-circuit-reinforces-importance-of-documenting-performance-issues/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CONS082019 President Trump Issues Third Installment of Buy American Initiative https://www.seyfarth.com:443/publications/CONS082019 Tue, 20 Aug 2019 00:00:00 -0400 <p> President Trump continues to push forward with his &ldquo;Buy American, Hire American&rdquo; initiative with the issuance of his third Executive Order No. 13881 (the &ldquo;Order&rdquo;) on July 15, 2019, entitled &ldquo;Maximizing Use of American-Made Goods, Products, and Materials.&rdquo; This Order attempts to strengthen the standards that federal agencies must follow under the Buy American Act (&ldquo;BAA&rdquo;) by raising the threshold for domestic purchasing requirements.<br /> <br /> <a href="https://www.constructionseyt.com/2019/08/president-trump-issues-third-installment-of-buy-american-initiative/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM081919-LIT “Monroney Stickers” And Protecting Car Buyers From Fraud In The Age Of Online Motor Vehicle Sales https://www.seyfarth.com:443/publications/OMM081919-LIT Mon, 19 Aug 2019 00:00:00 -0400 <div> When Congress adopted legislation in 1958 requiring that manufacturers affix a label&mdash;today called a &ldquo;Monroney sticker&rdquo;&mdash;in the window of each new motor vehicle they produced showing the suggested retail price for the vehicle and installed accessories, the assumption was that no car buyer would ever purchase a vehicle without first visiting their local dealer to take that vehicle for a test drive. This conventional wisdom has been tested in recent years, as consumers have shown a willingness to make increasingly significant purchases online. In 2018, Ryan Keeton, co-founder and chief brand officer for Carvana.com&mdash;an online retailer of newer used cars usually two to three years old&mdash;reported that 20% of car buyers completed the entire transaction on a mobile device; for millennials, he reported that this percentage was closer to 30%.<sup>1</sup> New car buyers who buy online may never even see the &ldquo;Monroney sticker&rdquo; in the window before they take delivery of their new car. This trend toward online sales will undermine the consumer protection purpose of the &ldquo;Monroney sticker&rdquo; and present new challenges for regulators, manufacturers, and car buyers in the 21st century.</div> <h3> Origins of the &ldquo;Monroney Sticker&rdquo;</h3> <div> Few may recall, but manufacturers did not always place a &ldquo;Monroney sticker&rdquo; in the windows of new motor vehicles they shipped to dealers. The sticker&rsquo;s namesake, Senator Almer Stilwell &ldquo;Mike&rdquo; Monroney of Oklahoma, had chaired a subcommittee&nbsp; of the Senate Interstate and Foreign Commerce Committee formed in 1955 to investigate dealer complaints of abusive treatment by manufacturers. After Congress passed the Automobile Dealers&rsquo; Day in Court Act in 1956, Senator Monroney&rsquo;s subcommittee continued to probe deceptive dealer practices.<sup>2</sup></div> <div> &nbsp;</div> <div> Senator Monroney&rsquo;s concern was focused on &ldquo;price packing,&rdquo; which he defined as &ldquo;the boosting of the manufacturer&rsquo;s suggested retail price in order to mislead the purchaser into believing he received a larger allowance or trade-in,&rdquo; or more bluntly, &quot;the falsification of the manufacturers suggested retail price.&rdquo;<sup>3 </sup>Senator Monroney urged the adoption of legislation that would &ldquo;simply require the manufacturer to place a price tag on the windshield or window of the car in the form of a label.&rdquo;<sup>4</sup> A committee report from the House of Representatives likewise identified &ldquo;packing&rdquo; as a threat to the industry and declared legislation necessary because &ldquo;the new car dealers have been plagued by unfair and unscrupulous marketing practice on the part of some dealers, which have been injurious to the new car dealers as a whole, injurious to the car manufacturers, and bewildering to the purchasers of new cars.&rdquo;<sup>5</sup></div> <div> &nbsp;</div> <div> The product of Senator Monroney&rsquo;s effort was the Automobile Information Disclosure Act of 1958, which required manufacturers, prior to shipping new vehicles to dealers, to affix a label to each new vehicle disclosing the make, model, and serial number of the vehicle; the equipment installed in the vehicle and the manufacturer&rsquo;s suggested resale price (MSRP) for the vehicle and equipment, as well as any charges for the transportation of the vehicle to the dealer. The statute is codified at 15 U.S.C. &sect;&sect; 1231-1233, and has since been amended to require disclosure of additional information, including fuel economy and crash-test ratings. As described in the Senate subcommittee report, the disclosure of this information does not interfere with the buyer&rsquo;s &ldquo;freedom to bargain over the price of the car&rdquo; or the dealer&rsquo;s right &ldquo;to sell the new car for any price he desire[s],&rdquo; but it does &ldquo;assure that the purchaser [will] start the negotiations with the minimum necessary information.&rdquo;<sup>6</sup></div> <h3> Modern Challenges for Regulators and Manufacturers</h3> <div> A critical assumption made by Senator Monroney and Congress in 1958 was that a buyer would &ldquo;start the negotiations&rdquo; after seeing the label affixed to the inside windshield or window of a new car. In 2019, that is no safe assumption, and consumers have shown a willingness to buy increasingly expensive products online&mdash;even cars, often the most significant purchase consumers will make in their lives other than their homes. Trying to stay ahead of this trend, the American Association of Motor Vehicle Administrators (AAMVA) in April 2017 formed an Internet Vehicle Sales Working Group to spend two years developing best practices for the regulation of internet vehicles sales; that working group is expected to release the results of its efforts shortly.<sup>7</sup> Whatever recommendations are made by the AAMVA working group, the trend toward online buying will present manufacturers with their own set of challenges in the coming years. Prohibited by dealer statutes in most (if not all) states from selling directly to consumers, manufacturers will need to develop their own strategies to ensure that customers are not misled and the manufacturer&rsquo;s brand is not tarnished by rogue dealers on this new digital frontier.</div> <div> &nbsp;</div> <div> <hr /> <div> <span style="font-size:9px;">1 &ldquo;How Carvana Convinces Shoppers to Buy Cars on Their Mobile Phones,&rdquo; Internet Retailer, Digital Commerce360, Aug. 2, 2018, https://www.digitalcommerce360.com/2018/08/02/howcarvana-</span><span style="font-size: 9px;">convinces-shoppers-to-buy-cars-on-their-mobile-phones/.</span></div> <div> <span style="font-size:9px;">2 Robert Peele, <em>The Senator Behind the Window Sticker</em>, N.Y. TIMES, Jan. 2. 2009, https://www. nytimes.com/2009/01/04/automobiles/04MONRONEY.html</span></div> <div> <span style="font-size:9px;">3 S. REP. NO. 85-1555, at 2-3, 4 (1958).</span></div> <div> <span style="font-size:9px;">4<em> Id</em>. at 2.</span></div> <div> <span style="font-size:9px;">5 H.R. REP. NO. 85-1958, at 2 (1958).</span></div> <div> <div> <span style="font-size:9px;">6 S. REP. NO. 85-1555, at 2.</span></div> <div> <span style="font-size:9px;">7 <em>See </em>American Association of Motor Vehicle Administrators, Internet Vehicle Sales Working Group, https://www.aamva.org/Internet-Vehicle-Sales-Working-Group-General/.</span></div> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/MA081919-LE Student-Athletes Are Students—And Athletes—But Not Employees https://www.seyfarth.com:443/publications/MA081919-LE Mon, 19 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>The Ninth Circuit has held that, under federal and California law, college student-athletes are not employees of either the NCAA or the Pac-12, the regulatory bodies that govern college sports.</em></p> <p> <strong>The Facts</strong></p> <p> Dawson played football for the University of Southern California. USC is a member of the National Collegiate Athletic Association and the Pac-12 Conference. The NCAA is an organization encompassing more than 1,100 colleges and universities nationwide. The Pac-12 operates a multi-sport collegiate conference.</p> <p> NCAA member schools agree to administer their athletic programs in accordance with the NCAA constitution, bylaws, and other NCAA policies. Consistent with its decades-long tradition of amateurism, the NCAA in its bylaws prohibits student-athletes from being paid to participate in school athletic programs. The bylaws also provide that student-athletes may receive financial aid based on athletic ability, but that the amount of aid must not exceed the value of the student&rsquo;s cost of attending the school.</p> <p> Dawson sued the NCAA and the Pac-12, claiming that he and other Division I athletes were employees for purposes of California and federal law. Dawson did not sue USC.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</p> <p> <strong>The Court of Appeal&rsquo;s Decision</strong></p> <p> Reviewing the District Court&rsquo;s order dismissing Dawson&rsquo;s complaint, the Ninth Circuit held that Dawson was not an employee of either the NCAA or Pac-12. The Ninth Circuit first applied the &ldquo;economic realities&rdquo; test under the federal Fair Labor Standards Act (FLSA), which considers (1) the expectation of compensation, (2) the power to hire and fire, and (3) evidence that an arrangement was conceived or carried out to evade the law.</p> <p> The Ninth Circuit held that Dawson&rsquo;s scholarship did not create an expectation that he would receive compensation from the NCAA or the Pac-12, as he did not receive his scholarship from either of them. The Ninth Circuit also held that the regulation limiting scholarships to the cost of attendance did not create any expectation of compensation. Next, the Ninth Circuit found that neither the NCAA nor Pac-12 had the ability to hire or fire Dawson. Although the NCAA bylaws regulate college athletics, neither the NCAA nor Pac-12 choose the players on a team or supervise the players&rsquo; performance. Finally, the Ninth Circuit held that there was no evidence that the arrangement was designed to evade the law because the NCAA rules have existed in some form since before Congress enacted the FLSA.</p> <p> The Ninth Circuit also rejected Dawson&rsquo;s claim that the NCAA and Pac-12 were his employers under California law. California, by statute, exempts student-athletes from workers&rsquo; compensation benefits. California appellate courts have held that student-athletes are not employees of their universities for purposes of the California Tort Claims Act and the Fair Employment and Housing Act, reasoning that the workers&rsquo; compensation exemption reflects a legislative intent to exclude student-athletes from California&rsquo;s employment laws. Applying similar reasoning, the Ninth Circuit held that student-athletes also are not employees of the NCAA or Pac-12 for purposes of California&rsquo;s wage and hour laws.</p> <p> Seyfarth Shaw represented the Pac-12 before both the district court and the Ninth Circuit.</p> <p> <strong>What <em>Dawson </em>Means for Employers</strong></p> <p> There have been numerous efforts over the years to persuade courts and administrative agencies to confer employee status on student-athletes. In <em>Dawson</em>, the Ninth Circuit has recognized that, as a matter of law, student-athletes are not employees of either the NCAA or the Pac-12, the regulatory bodies governing college sports, for purposes of the FLSA and California wage and hour law. <em>Dawson</em> provides useful insight into how the Ninth Circuit applies the sometimes amorphous FLSA &ldquo;economic realities&rdquo; test. It remains to be seen what impact <em>Dawson</em> will have on other efforts to challenge the status of student-athletes.</p> https://www.seyfarth.com:443/news/rodriguezwnyc081919 Leon Rodriguez interviewed on WNYC New York Public Radio https://www.seyfarth.com:443/news/rodriguezwnyc081919 Mon, 19 Aug 2019 00:00:00 -0400 <p> Leon Rodriguez was interviewed August 19th on WNYC New York Public Radio, &quot;USCIS Backlog Leaves Thousands of Immigrants In Limbo.&quot; You can listen to the <a href="https://www.wnycstudios.org/story/uscis-backlog-leaves-thousands-immigrants-limbo">full interview here</a>.</p> https://www.seyfarth.com:443/publications/WC081719 The Supreme Court of Ohio Rules That Defendants Need Not Plead An Arbitration Defense To Defeat Class Certification https://www.seyfarth.com:443/publications/WC081719 Sat, 17 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Complex class actions often present a scenario in which some or most of the putative class members are subject to arbitration agreements, but the named plaintiff is not. In Gembarski v. PartsSource, Inc., No. 2018-0125, 2019 Ohio LEXIS 1639 (Ohio Aug. 14, 2019), the Supreme Court of Ohio concluded that because the defendant could not have raised an arbitration defense against the named plaintiff prior to class certification, such a defense did not have to be raised in the Answer. For this reason the defendant was not precluded from raising arbitration as a defense to class certification for putative class members.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/08/the-supreme-court-of-ohio-rules-that-defendants-need-not-plead-an-arbitration-defense-to-defeat-class-certification/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD081619 Webinar Recap! Hot Topics and Trends in California Consumer Class Actions https://www.seyfarth.com:443/publications/CCD081619 Fri, 16 Aug 2019 00:00:00 -0400 <p> We are pleased to announce the webinar &ldquo;Hot Topics and Trends in California Consumer Class Actions&rdquo; is now available as a webinar recording.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/08/webinar-recap-hot-topics-and-trends-in-california-consumer-class-actions/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE081619 DOT Publishes Proposed Changes to Hours of Service Regulations for Commercial Motor Vehicle Drivers https://www.seyfarth.com:443/publications/WSE081619 Fri, 16 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The U.S. Department of Transportation&rsquo;s Federal Motor Carrier Safety Administration (FMCSA) published this week a notice of proposed rulemaking (NPRM) on changes to &ldquo;hours of service&rdquo; (HOS) rules to &ldquo;increase safety on America&rsquo;s roadways.&rdquo; The proposal, if adopted, would update existing regulations for commercial motor vehicle (CMV) drivers.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/dot/dot-publishes-proposed-changes-to-hours-of-service-regulations-for-commercial-motor-vehicle-drivers/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM081619-LE New York Protects Religious Garb, Attire And Facial Hair In The Workplace https://www.seyfarth.com:443/publications/OMM081619-LE Fri, 16 Aug 2019 00:00:00 -0400 <p> On August 9, 2019, Governor Andrew Cuomo signed legislation <a href="https://assembly.state.ny.us/leg/?default_fld=&amp;leg_video=&amp;bn=S04037&amp;term=2019&amp;Summary=Y&amp;Actions=Y&amp;Memo=Y&amp;Text=Y">(S.04037/A.4204)</a> that prohibits employment discrimination based on religious attire, clothing, and facial hair.&nbsp; This law amends the New York State Human Rights Law (&ldquo;NYSHRL&rdquo;) by specifying that the existing religious discrimination ban includes any discriminatory act based upon &ldquo;the wearing of any attire, clothing, or facial hair in accordance with the requirements of his or her religion . . . .&rdquo;&nbsp; In <a href="https://www.governor.ny.gov/news/governor-cuomo-signs-legislation-prohibiting-employment-discrimination-based-religious-attire">Governor Cuomo&rsquo;s signing memorandum</a>, he emphasized that &ldquo;[t]his law will protect people from discriminatory employment practices based on religious attire or facial hair and makes it crystal clear to anyone who may still have doubts that New York has zero tolerance for bigotry of any kind.&rdquo;&nbsp;</p> <p> Although this amendment is undoubtedly welcome to the robust and diverse religious communities in New York, a thoughtful observer will note that such discrimination was already prohibited under this section of the NYSHRL and federal law.&nbsp; Employers will recognize the pre-existing obligation to not discriminate against and to actively accommodate an employee&rsquo;s &ldquo;sincerely held&rdquo; religious practices and that the obligation to accommodate is set aside when said accommodation would pose an &ldquo;undue hardship on the conduct of the employer&rsquo;s business.&rdquo;&nbsp; Thus, unlike the recent trend in &ldquo;natural hair&rdquo; legislation and guidance (such as discussed <a href="https://www.seyfarth.com/publications/MA022619-LE">here</a>), the State amendment addressed in this alert does not break new ground.</p> <p> Whether a specific request for accommodation to not shave one&rsquo;s beard or to wear certain attire involves a sincerely held religious practice demands a highly fact-intensive inquiry.&nbsp; Courts often, but not always, defer to an employee&rsquo;s interpretation of religious requirements and his or her sincerity in needing to abide by such religious demands.&nbsp; The EEOC provides <a href="https://www.eeoc.gov/policy/docs/religion.html">helpful guidance</a> in navigating these thorny issues.&nbsp;</p> <p> Additionally, whether granting the requested accommodation will cause an undue hardship on an employer&rsquo;s business requires thoughtful and reasoned reflection.&nbsp; How compelling today is an argument regarding the need to maintain a &ldquo;professional appearance&rdquo; that suggests a clean-shaven face?&nbsp; Do legitimate safety concerns exist given the employment setting and the nature of the employee&rsquo;s job responsibilities?&nbsp;</p> <p> Notwithstanding the minimal practical changes to the NYSHRL provided by this piece of legislation, this law nonetheless is a timely reminder for employers to review their existing personal appearance and grooming standards to ensure they do not intentionally or unintentionally discriminate against those who hold sincere religious beliefs related to garb, attire, and hair.&nbsp; The labor and employment attorneys at Seyfarth Shaw are available to assist in navigating these issues.&nbsp;</p> https://www.seyfarth.com:443/publications/CP081519 Companies Remain In Suspense On AB 5 Independent Contractor Bill https://www.seyfarth.com:443/publications/CP081519 Thu, 15 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The hotly contested AB 5 was put on hold, but is widely expected to be revived before the end of the legislative session.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/08/15/companies-remain-in-suspense-on-ab-5-independent-contractor-bill/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT081519 The Week in Weed: August 16, 2019 https://www.seyfarth.com:443/publications/TBT081519 Thu, 15 Aug 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/the-week-in-weed-august-16-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL081519 Effective Remedial Action Does Not Require Crystal Ball, Rules Iowa Court https://www.seyfarth.com:443/publications/EL081519 Thu, 15 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In Sellars v. CRST Expedited, Inc. Case No. C15-117-LTS (July 15, 2019), the Northern District of Iowa held that employer responses to sexual harassment complaints need not deter harassment by other employees, where the employer lacks notice that those other employees might engage in harassing behavior.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/effective-remedial-action-does-not-require-crystal-ball-rules-iowa-court/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/schwartzfenwicklaw360081519 Sam Schwartz-Fenwick quoted in Law360 https://www.seyfarth.com:443/news/schwartzfenwicklaw360081519 Thu, 15 Aug 2019 00:00:00 -0400 <p> Sam Schwartz-Fenwick was quoted in an August 15 story from Law360, &quot;5 Decisions That May Sway High Court On LGBT Protections.&quot; Schwartz-Fenwick said that advocates of including sexual orientation and gender discrimination under Title VII will likely point to several Supreme Court decisions that have taken a broad view of the statute in other contexts, including landmark cases known as Price Waterhouse and Oncale.</p> https://www.seyfarth.com:443/news/adacbo081519 Seyfarth's ADA statistics referenced in Construction Business Owner https://www.seyfarth.com:443/news/adacbo081519 Thu, 15 Aug 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in an August 15 story from Construction Business Owner, &quot;5 Digital Policies Every Construction Business Needs.&quot; According to Seyfarth, the number of lawsuits filed against businesses whose websites aren&rsquo;t accessible has skyrocketed over the last few years. You can read the <a href="https://www.constructionbusinessowner.com/technology/software/5-digital-policies-every-construction-business-needs">full article here</a>.</p> https://www.seyfarth.com:443/news/hershernrn081419 Ari Hersher quoted in Nation’s Restaurant News https://www.seyfarth.com:443/news/hershernrn081419 Wed, 14 Aug 2019 00:00:00 -0400 <p> Ari Hersher was quoted in an August 14 story from Nation&rsquo;s Restaurant News, &quot;Preparing for predictive scheduling.&quot; Hersher said that there are ways employers can protect their businesses in areas where predictive scheduling is adopted. You can read the <a href="https://www.nrn.com/operations/preparing-predictive-scheduling">full article here</a>.</p> https://www.seyfarth.com:443/publications/ADA081419 Plaintiff Robles Files His Opposition To Domino’s Petition For Certiorari https://www.seyfarth.com:443/publications/ADA081419 Wed, 14 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The Supreme Court will decide whether to hear its first website accessibility case now that briefing on Domino&rsquo;s Petition for Certiorari is complete.<br /> <br /> <a href="https://www.adatitleiii.com/2019/08/plaintiff-robles-files-his-opposition-to-dominos-petition-for-certiorari/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WLS081319 Cyber restraints of trade in the new era of digital markets https://www.seyfarth.com:443/publications/WLS081319 Tue, 13 Aug 2019 00:00:00 -0400 <p> An enforceable restraint of trade can be a key business asset, giving an employer time to recover when a senior employee has left the business for a competitor. Like a good insurance policy, it&rsquo;s a big relief to have it when you need it.<br /> <br /> <a href="https://www.workplacelawandstrategy.com.au/2019/08/cyber-restraints-of-trade-in-the-new-era-of-digital-markets/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA081319-LIT Filings Begin Under New York’s Child Victim Act: Know The Rules https://www.seyfarth.com:443/publications/MA081319-LIT Tue, 13 Aug 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis:</strong> The Child Victim Act is now law and will have a significant impact on New York&rsquo;s educational and religious institutions and other civic organizations that care for children. It extends the Statute of Limitations an additional 22 years so that victims of childhood sexual abuse can now initiate suit until age 55. When it passed, on February 14th, 2019, it also imposed a six month moratorium as to the filing of any cases. Tomorrow the moratorium lifts and hundreds if not thousands, of cases are expected to be filed, in short order, throughout New York State. Following the CVA&rsquo;s legislative mandate New York&rsquo;s judiciary has promulgated certain rules to deal with the expected filings. These rules will impact how these cases go forward.&nbsp;</em></div> <h3> What is the Child Victim Act?&nbsp;</h3> <div> The Child Victim Act (&ldquo;CVA&rdquo;) is New York based legislation designed to protect childhood victims of sexual abuse. Its passage drastically changes New York&rsquo;s strict statute of limitations for sex abuse cases and rectify the fact that many victims of sexual abuse had forfeited their right to redress by not reporting their abuse until after the statutory limitations period had expired.&nbsp;</div> <div> &nbsp;</div> <div> The previous law, one of the strictest in the nation, required alleged victims of sexual abuse to initiate any civil lawsuit before their twenty-third birthday. The CVA now allows alleged victims to bring civil lawsuits until their fifty-fifth birthday and further, it provides an open one-year window to revive old cases where the statute of limitations has passed regardless of the age of the victim. That window opens tomorrow--August 14, 2019.</div> <h3> Rules To Facilitate The Prompt Disposition Of Matters Revised Under The Child Victims Act Of 2019</h3> <div> Among the CVA&#39;s provisions is a requirement that the Unified Court System enact rules &quot;for the timely adjudication of revived actions&quot; commenced pursuant to CPLR 214-g, the new provision of the CPLR which extends the statute of limitations asserting such claims. Thereafter, on May 10, 2019 the Office of Court Administration sought public comment on proposed rules to facilitate the prompt disposition of cases revived under the CVA. The comments, which were due on July 1, 2019 and made publicly available thereafter, made certain suggestions that found their way into the final rules (Part 202.72 of the Uniform Civil Rules for the Supreme Court entitled &ldquo;Actions Revived Pursuant to CPLR 214-g.&rdquo; Promulgated pursuant to an order dated July 19, 2019 the rules, which set forth how CVA cases are to be handled, state as follows:&nbsp;&nbsp;</div> <ol> <li> There shall be a dedicated part(s) of Supreme Court in each Judicial District which shall be assigned all actions revived pursuant to CPLR 214-g (&quot;214-g Part&quot;).<br /> &nbsp;</li> <li> Justices, judicial hearing officers, referees and alternative dispute resolution (ADR) neutrals in 214-g Parts shall receive training in subjects related to sexual assault and the sexual abuse of minors, pursuant to a curriculum and format approved by the Office of Court Administration.<br /> &nbsp;</li> <li> Judges and other court personnel involved in actions revived pursuant to CPLR 214-g, in the exercise of their discretion in any matter relating to such action, shall be mindful of the statutory directive that such actions be adjudicated in a timely fashion (Judiciary Law section 219-d) and shall aspire to the following schedule in such actions:</li> </ol> <ul style="margin-left: 40px;"> <li> Assignment to Part: immediately upon filing of the RJI</li> <li> Preliminary conference (PC): within 30 days of filing the RJI</li> <li> Status conferences (SC): every 60 days after the PC or prior SC</li> <li> Conclusion of discovery and note of issue within 365 days of PC</li> <li> Dispositive motions: fully submitted within 90 days of conclusion of discovery; decided within 30 days of briefing.</li> <li> Trial: scheduled to be held within 60 days of note of issue, except with leave of court on good cause shown; or if dispositive motions have been filed, within 60 days of the decision of those motions.</li> </ul> <div> The rule, as promulgated after the comment period, accelerated the time to hold a preliminary conference from the proposed 45 days to 30 after the filing of an RJI. However, it also extended the time to complete discovery from 180 to 365 days. Perhaps tipping its hand on the likelihood of adhering to this schedule, the rule expressly states that &ldquo;Judges and other court personnel shall &lsquo;aspire&rsquo; to the timetable set forth above.&rdquo;</div> <div> &nbsp;</div> <div> Also making its way into the final rule are the added considerations provided during the public comment period:&nbsp;&nbsp;</div> <ol start="4"> <li> In setting schedules for the conduct of litigation of actions revived pursuant to CPLR 214-g, and in a manner consistent with the goal of timely adjudication of such actions, judges and other court personnel should be mindful of (1) the impact upon the litigation of pending proceedings addressing insurance coverage issues relating to the parties; (2) the difficulties inherent in document, deposition, and other discovery in matters of this type and age; and (3) the benefits of appropriate use of ADR programs to facilitate early resolution of disputes.</li> </ol> <div> Perhaps one benefit of the six month moratorium was that litigants on either side of the equation were able to use the six months to carefully consider some of the practical concerns that would stem from too aggressive a timetable, and the OCA apparently listened.&nbsp;</div> <div> &nbsp;</div> <div> The remainder of the rule comes almost verbatim out of the proposal:&nbsp;</div> <ol start="5"> <li> Counsel for all parties shall consult prior to any preliminary or status conference on all issues likely to be addressed at the conference, including but not limited to (1) resolution of the case in whole or in part and early ADR; (2) outstanding issues relating to insurance coverage of the parties; (3) outstanding discovery issues, including the voluntary informal exchange of information for settlement purposes; (3) adoption of a confidentiality order; (4) scheduling; (5) anticipated use of experts; and (6) anticipated requests to obtain records from earlier cases related to the allegations in the revived case.<br /> &nbsp;</li> <li> Counsel at all court appearances should be fully familiar with the case, fully prepared to discuss pending matters competently, authorized to enter into substantive and procedural agreements on behalf of their clients, and authorized to enter into a disposition of the case.<br /> &nbsp;</li> <li> Any party claiming a preference under CPLR 3403(7) may apply to the court in the manner prescribed by that section.</li> </ol> <div style="margin-left: 40px;"> Any person who intends to appear without a lawyer in a case revived under CPLR 214-g is advised to review the information set forth at <a href="https://www.nycourts.gov/courthelp/">https://www.nycourts.gov/courthelp/</a>.</div> <h3> Conclusion</h3> <div> After a long and often heated debate the CVA is now the law, and with it will come the expected lawsuits and arguments that will work their way through the courts as to what the statute means, and how these cases should best be handled, notwithstanding the tacit acknowledgment that the timetable is aspirational. But it is clear that many of the other considerations--insurance coverage, appellate rights, inherent discovery problems, and use of ADR to name a few, made it to the OCR&rsquo;s radar screen before a single CVA case was ever filed. It will be interesting to see how these type of issues play out, and how the dedicated Parts, with dedicated Judges handling these cases, may use this opportunity to alter the judicial landscape. As this author explained in a <a href="https://www.wsj.com/articles/change-to-new-york-sex-abuse-laws-expected-to-spur-a-wave-of-lawsuits-11565105215?emailToken=862e8eccd5900c321b29bbf89c7eb323HgBqnkF/UZDGQzqF23/xoW1Qgy1mOWTsFraeHG1koLJFy02YtAyV6vpuuEY1AMraDdJh87V+FUjq8JKBmZvwOLF4TP0O/ZCx0e6R/DN8X+oLIQB+mYBa6EUopcw1NLganONQXO3Lc4eBdr2AD3aE+Q%3D%3D&amp;reflink=article_email_share">recent Wall Street Journal article</a> discussing the impact of the impending influx of cases, &ldquo;the hardest part is the unknown&rdquo;.&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/MA081319-LE Governor Cuomo Signs Landmark Legislation Impacting Anti-Discrimination and Anti-Harassment Laws https://www.seyfarth.com:443/publications/MA081319-LE Tue, 13 Aug 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis: </strong>As expected, Governor Cuomo signed another landmark piece of legislation amending New York&rsquo;s anti-discrimination and sexual harassment laws.&nbsp; Not only does the law significantly expand the protections afforded to employees, but its varying effective dates, some requiring immediate attention, require employers to reevaluate existing policies and practices.</em></p> <p> On June 19, 2019, the New York State Legislature passed <a href="https://nyassembly.gov/leg/?default_fld=&amp;leg_video=&amp;bn=A08421&amp;term=2019&amp;Summary=Y&amp;Text=Y">S6577/A8421</a>.&nbsp; Our previous <a href="https://www.seyfarth.com/publications/MA062419-LE">Management Alert</a> provided a comprehensive overview of the provisions that were expected to become law.&nbsp; Unsurprisingly, based on the political climate and the pace with which <a href="https://www.seyfarth.com/publications/MA032819-LE">sexual harassment laws in the wake of the #Me Too era</a> have been enacted, Governor Cuomo signed the bill into law yesterday, August 12, 2019.&nbsp; The law contains a series of staggered effective dates, as outlined below:</p> <p> <strong>Effective Immediately</strong></p> <p> Effective immediately, the New York State Human Rights Law (NYSHRL) is to be construed &ldquo;liberally.&rdquo;&nbsp; This appears to be a legislative effort to ensure that the NYSHRL is interpreted similarly to the New York City Human Rights Law (NYCHRL), as opposed to Title VII.</p> <p> Also effective immediately, employers are required to distribute to new-hires and to existing employees annually at each sexual harassment prevention training, written notice regarding the employer&rsquo;s sexual harassment prevention policy and information presented at the training.&nbsp; Notice must be available in English and the primary language of the employee, provided that a model State notice exists in that language.</p> <p> <strong>Effective 60 Days After Enactment (October 11, 2019)</strong></p> <p> Under the new law, the following seven changes will take effect in sixty days:</p> <ol> <li> Elimination of the &ldquo;severe or pervasive&rdquo; standard in favor of the lower legal standard applicable under the NYCHRL.&nbsp;</li> <li> Elimination of the <em>Farrager/Ellerth</em> defense in cases of alleged supervisor harassment.</li> <li> Extension of anti-discrimination protections to &ldquo;non-employees&rdquo; including contractors, vendors, and consultants.</li> <li> Allowance of punitive damages as remedy for discrimination cases brought against private employers under the NYSHRL.</li> <li> Mandatory award of attorneys&rsquo; fees for a prevailing party, irrespective of the forum in which the complaint is brought, except that if the employer is seeking attorneys&rsquo; fees it must show that the action brought by the plaintiff was frivolous.</li> <li> Prohibition of nondisclosure agreements in settlement agreements relating to facts and circumstances underlying claims of discrimination, unless confidentiality is the complainant&rsquo;s preference.&nbsp;</li> <li> Prohibition of mandatory pre-dispute arbitration for all claims of discrimination.<br /> &nbsp;</li> </ol> <p> <strong>Contracts Entered Into On or After January 1, 2020</strong></p> <p> After the new year, blanket provisions limiting employees&rsquo; abilities to disclose factual information related to future claims of discrimination will be void and unenforceable.&nbsp; However, these provisions may still be included so long as they inform the employee that they may speak with law enforcement, government agencies, and attorneys.</p> <p> <strong>Effective 180 Days After Enactment (February 8, 2020)</strong></p> <p> Under the new law, all private employers, regardless of size, may be liable for violations of the NYSHRL.&nbsp; Significantly, this will impact businesses with less than four employees who were previously outside the NYSHRL&rsquo;s coverage.</p> <p> <strong>Effective 1 Year After Enactment (August 12, 2020)</strong></p> <p> Next year, employees will no longer be limited to a one-year statute of limitations for filing sexual harassment claims.&nbsp; Instead, under the new law, the statute of limitation for those claims has been extended to three years at the New York State Division of Human Rights.</p> <p> <strong>Employer Takeaways </strong></p> <p> Employers should immediately assess whether their policies and practices are in compliance with the new law.&nbsp; As always, Seyfarth Shaw LLP and its attorneys are available to assist employers with ensuring compliance with this new law.&nbsp;&nbsp;</p> https://www.seyfarth.com:443/publications/TBT081319 CBD is Everywhere – But Where Does the FDA Stand? https://www.seyfarth.com:443/publications/TBT081319 Tue, 13 Aug 2019 00:00:00 -0400 <p> CBD is &ldquo;thriving&rdquo; in the current regulatory environment, but is it doing so illegally?<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/cbd-is-everywhere-but-where-does-the-fda-stand/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL081319 Exclusion for Gender Reassignment Surgery May Disadvantage a “Suspect Class” https://www.seyfarth.com:443/publications/EL081319 Tue, 13 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In Toomey v. U of Arizona, No. 19-35 (D. Ar. June 24, 2019), the Magistrate Judge determined on a motion to dismiss that Title VII does not prohibit discrimination based on a person&rsquo;s transgender status. However, she decided that the plaintiff had adequately alleged that the health plan exclusion for gender reassignment surgery disadvantaged a &ldquo;suspect class&rdquo;, justifying a heightened level of scrutiny, and that defendants had failed to argue that the exclusion would survive this level of scrutiny.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/exclusion-for-gender-reassignment-surgery-may-disadvantage-a-suspect-class/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/bitarnylj081319 Karen Bitar quoted in the New York Law Journal https://www.seyfarth.com:443/news/bitarnylj081319 Tue, 13 Aug 2019 00:00:00 -0400 <p> Karen Bitar was quoted in an August 13 story from the New York Law Journal, &quot;NY State Courts Prepared for Flood of Lawsuits Under New Child Victims Act, Officials Say.&quot; Bitar predicted that cases brought during the one-year window will have a tough time sticking to the state&rsquo;s recommended deadlines.</p> https://www.seyfarth.com:443/news/maatmanccr081319 Gerald Maatman quoted in the Cook County Record https://www.seyfarth.com:443/news/maatmanccr081319 Tue, 13 Aug 2019 00:00:00 -0400 <p> Gerald Maatman was quoted in an August 13 story from the Cook County Record, &quot;Big loss for Facebook on IL privacy law, big win for trial lawyers; Legal questions could be ticketed for Supreme Court.&quot; Maatman said that as this issue plays out in privacy class actions throughout the U.S. over the next year or so, he expects the question to find its way to the Supreme Court, for the value and risk created by such class litigation will raise the stakes for corporate defendants. You can read the <a href="https://cookcountyrecord.com/stories/513030377-big-loss-for-facebook-on-il-privacy-law-big-win-for-trial-lawyers-legal-questions-could-be-ticketed-for-supreme-court">full article here</a>.</p> https://www.seyfarth.com:443/publications/CP081219 Time to Clean Up Janitorial Training https://www.seyfarth.com:443/publications/CP081219 Mon, 12 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: A new set of proposed regulations requires all janitorial employees and their supervisors to receive two hours of in-person, interactive sexual harassment training every two years.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/08/12/time-to-clean-up-janitorial-training/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CONS081219 The Two-Part Manufacturing Test Under the Buy American Act https://www.seyfarth.com:443/publications/CONS081219 Mon, 12 Aug 2019 00:00:00 -0400 <p> Congress enacted the Buy American Act (&ldquo;BAA&rdquo;) during the Great Depression, in order to protect American industry from foreign competition on federal procurement contracts. While the BAA is simplistic in its policy goal of promoting domestic purchasing, government contractors and subcontractors are often faced with complex and confusing rules for compliance.<br /> <br /> <a href="https://www.constructionseyt.com/2019/08/the-two-part-manufacturing-test-under-the-buy-american-act/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA081219-LE Newly Enacted Workplace Transparency Act To Change Illinois Employment Law Landscape https://www.seyfarth.com:443/publications/MA081219-LE Mon, 12 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em> On Friday, August 9, 2019, Governor J. B. Pritzker signed a wide-ranging bill that, among other things, encompasses the Workplace Transparency Act. The Act, which will impact nearly every employer in Illinois: significantly restricts inclusion of non-disclosure and non-disparagement provisions in employment agreements, separation agreements, and settlement agreements; limits an employer&rsquo;s ability to &ldquo;unilaterally&rdquo; require certain terms (including mandatory arbitration) as a condition of employment; creates annual training and disclosure requirements to the Illinois&nbsp; Department of Human Rights, and establishes new civil penalties for non-compliance. The new law includes additional requirements specific to restaurants, bars, hotels, and casinos. Those requirements take effect immediately, whereas the broader employment law changes take effect January 1, 2020.</em></p> <p> The bill signed by the Governor is SB75, which was passed by the Illinois Senate on June 10, 2019, having passed in the General Assembly earlier that month. As originally drafted, SB75, titled the &ldquo;Hotel Casino Employee Safety Act,&rdquo; requires hotels and casinos to provide a safety device or notification device to employees who works in guest rooms, restrooms, or on a casino floor &ldquo;under circumstances where no other employee is present in the room or area&rdquo; for summoning help if the employee reasonably believes there is an ongoing crime, sexual harassment or assault or other emergency. SB75, as enacted, also requires hotels and casinos to develop or modify their anti-sexual harassment policies &ldquo;to protect employees against sexual assault and sexual harassment by guests.&rdquo;</p> <p> While SB 75 was pending, an amendment was introduced (and ultimately passed) to add the Workplace Transparency Act (sometimes below &ldquo;WTA&rdquo; or the &ldquo;Act&rdquo;). Unlike the original Hotel Casino Employee Safety Act, the WTA applies to all employers and creates multiple new substantive protections and compliance requirements, in the name of &ldquo;ensur[ing] that all parties to a contract for the performance of services understand and agree to the mutual promises and consideration therein, and to protect the interest of this State in ensuring all workplaces are free of unlawful discrimination and harassment.&rdquo;&nbsp;&nbsp;</p> <p> <strong><u>New Rules for Employment Contracts and Policies</u></strong></p> <p> At the outset, the WTA sets out rules applicable to all <em>employment agreements</em> entered into, extended, or modified on or after January 1, 2020, without exception. These and other agreement-related provisions reflect a legislative trend at the state level in reaction to or as part of #MeToo&nbsp; developments. The Act first provides:</p> <p style="margin-left:.6in;"> No contract, agreement, clause, covenant, waiver, or other document shall prohibit, prevent, or otherwise restrict an employee, prospective employee, or former employee from reporting any allegations of unlawful conduct to federal, State, or local officials for investigation, including, but not limited to, alleged criminal conduct or unlawful employment practices.</p> <p> To the extent any contract, or provision thereof, is found to violate the Act, it is &ldquo;against public policy,&rdquo; void, and severable from any otherwise enforceable contractual provisions.</p> <p> Earlier versions of the Act had contained specific restatements of anti-retaliation principles applicable to the reporting of harassment or retaliation. The removal of those provisions from the final Act, however, are likely immaterial, given existing anti-retaliation provisions of other federal, state, and local laws.</p> <p> <strong><u>Rules Governing Other Types of Agreements</u></strong></p> <p> In addition to these employment contract rules, the Act also restricts discrimination-related confidentiality provisions in other types of agreements.</p> <p> <em>Unilateral Contracts &amp; Policies</em></p> <p> Non-negotiated employment contracts and policies that must be signed as a condition of employment cannot prohibit making truthful statements or disclosures about alleged unlawful employment practices (i.e., discrimination and harassment), unless the following conditions are satisfied:</p> <ul> <li> The provision must be in writing;</li> <li> It must demonstrate actual, knowing, and bargained-for consideration from both parties; and</li> <li> It must acknowledge certain fundamental employee rights, including those to: ?Report good faith allegations of unlawful discrimination or harassment to an appropriate agency; <ul> <li> Report good faith allegations of criminal conduct to an appropriate government official;</li> <li> Participate in a proceeding with an appropriate federal, state, or local government agency;</li> <li> Make truthful statements or disclosures required by law, regulation, or legal process; and</li> <li> Request or receive confidential legal advice.</li> </ul> </li> </ul> <p> <br /> Only if all these provisions are satisfied can any employment contract or policy prohibit making truthful statements or disclosures about alleged discrimination and harassment.</p> <p> <em>Arbitration Agreements</em></p> <p> Where an employee or applicant is required to accept mandatory arbitration as a condition of his or her employment, the arbitration agreement must satisfy all requirements listed above for non-negotiated employment contracts.</p> <p> As originally conceived, the WTA also purported to require that, to be valid as to any claim, an arbitration agreement must contain a written exception for claims of harassment or other discrimination, and allow the employee to elect whether to bring such claims in either a judicial or arbitral forum. Perhaps sensing that such a provision was likely to conflict with, and be preempted by, the Federal Arbitration Act, that requirement was dropped from the final bill. Instead, the enacted law provides only that, unless it satisfies the rules above for conditions of employment to be enforceable:</p> <p style="margin-left:.5in;"> Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices, and severable from an otherwise valid and enforceable contract under this Act.</p> <p> The enacted version of the WTA also drops the original&rsquo;s list of items which, unless drafted by the employee, were presumed to be &ldquo;unconscionable&rdquo;:</p> <ul> <li> Any requirement that claims be resolved in &ldquo;inconvenient venue&rdquo;&mdash;principally, a venue other than the one where the employee or applicant resides, or where the contract was formed;</li> <li> Any waiver of rights to assert claims or seek remedies provided by state or federal statute (including, presumably, a waiver of the right to assert claims on a class basis);</li> <li> Any waiver of punitive damages;</li> <li> Any shortened statute of limitations; or</li> <li> Any requirement to pay fees and costs in excess of those required to bring claims in court.</li> </ul> <p> <br /> While no longer included in the WTA, these &ldquo;rebuttable presumptions&rdquo; are common reasons why courts have held arbitration agreements to be unconscionable as a matter of contract law.</p> <p> <em>Separation and Settlement Agreements</em></p> <p> The Act also establishes detailed limits on confidentiality provisions that are oftentimes included in separation and settlement agreements. While the Act does not limit the parties from agreeing to confidentiality regarding the terms of the agreement itself, it prohibits employers from &ldquo;unilaterally&rdquo; including any clause that prohibits an individual from &ldquo;making truthful statements or disclosures regarding unlawful employment practices.&rdquo; In order for the parties to agree on&nbsp; valid, enforceable confidentiality provisions related to harassment or other discrimination allegations, the agreement must demonstrate that:</p> <ul> <li> Confidentiality mutually benefits both parties, and is the documented preference of the employee, prospective employee, or former employee;</li> <li> The employer has notified the employee, prospective employee, or former employee, in writing, of his or her right to have an attorney or representative review the agreement prior to execution;</li> <li> There is valid, bargained-for consideration in exchange for the confidentiality;</li> <li> The settlement or termination agreement does not waive any claims of unlawful employment practices that have not yet accrued;</li> <li> The employee received the written agreement with at least 21 days to consider whether to sign it; and</li> <li> The employee was given at least 7 calendar days after signing the agreement to revoke it, or expressly waived the right to do so.</li> </ul> <p> <br /> The WTA&rsquo;s 21 and 7-day periods parallel those under the federal Age Discrimination in Employment Act (&ldquo;ADEA&rdquo;), as amended by the Older Workers Benefit Protection Act. In order for the employer to obtain a valid age waiver under ADEA, the employee must be provided 21 days to consider the agreement before signing and 7 days after signing in which to revoke the agreement. However, the 21-day ADEA period can be waived (the employee can sign at any point during that period); the same is true under WTA. Under both laws, the agreement takes effect once the revocation period expires (provided the employee hasn&rsquo;t revoked).</p> <p> How all this will affect negotiation and execution of discrimination settlements in practice remains to be seen. Things will be different; that much is clear. Up until now, counsel for one or both parties frequently want a harassment settlement signed as soon as possible, lest the other party get cold feet and try to back out. Likewise, judges and mediators who oversee and facilitate settlement encourage signature as soon as possible before the deal can unravel. Under WTA, if an Illinois employee or complainant wants confidentiality, s/he can take up to 21 days to make sure of that; and another 7 days after signing to change his/her mind and revoke.</p> <p> <strong><u>Exceptions to Limits on Confidentiality</u></strong></p> <p> The Act contains only two significant exceptions to the restrictions on an employer&rsquo;s ability to require confidentiality in employment, separation or settlement agreements.</p> <p> (1)&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;The Act&rsquo;s restrictions do not apply to terms of collective bargaining agreement and, to the extent a conflict exists, the terms in the CBA govern.</p> <p> (2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Act does not prevent an employer from requiring the following to maintain confidentiality as to allegations made by others:</p> <ul> <li> Employees who, as part of their assigned job duties, &ldquo;receive complaints or investigate allegations relating to unlawful employment practices,&rdquo; or &ldquo;otherwise have access to confidential personnel information&rdquo;;</li> <li> Employees and third parties who are asked to participate in and maintain the confidentiality of an investigation of unlawful employment practices while the investigation is pending and thereafter;</li> <li> Employees and third parties who receive attorney work product and/or attorney-client privileged information implicating an unlawful employment practice as part of any dispute, controversy, or legal claim;</li> <li> Any other individual subject to a legal or evidentiary privilege by law; or</li> <li> Any third party engaged or hired by an employer for the purpose of investigating complaints of an unlawful employment practice.</li> </ul> <p> <br /> <strong><u>Enforcement and Remedies</u></strong></p> <p> Agreement provisions found to violate any part of the Act will be considered void under Illinois law and severed from the agreement; other agreement terms will remain in effect. Where an employee successfully challenges the enforceability of a contract (but not an employment policy) that is determined to violate the Act, the employee is entitled to recover attorney&rsquo;s fees and costs incurred in doing so.</p> <p> <strong><u>Additional Provisions Beyond Those Restricting Contracts</u></strong></p> <p> Apart from provisions governing employment, separation and settlement agreements, the Workplace Transparency Act also includes:</p> <p> <em>IHRA Amendments</em></p> <p> The Act amends existing Illinois Human Rights Act protections in three material ways.</p> <p> (1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It expands the IHRA&rsquo;s prohibition of harassment and other discrimination based on &ldquo;perceived&rdquo; protected characteristics.</p> <ul> <li> Previously, causes of action for &ldquo;perceived&rdquo; harassment or other forms of discrimination were limited to disability claims. Under the WTA&rsquo;s expanded protections, employees will be able to pursue claims alleging they were subjected to unwelcome conduct based on a protected characteristic their employer &ldquo;perceived&rdquo; them to have, regardless of whether the individual actually has that characteristic.</li> </ul> <p> (2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It amends the IHRA to specifically protect &ldquo;nonemployees&rdquo; such as contractors and consultants.</p> <ul> <li> This change would allow employers otherwise subject to the IHRA to be held liable for harassing conduct which substantially interferes with an independent contractor or consultant&rsquo;s work performance, or which creates an intimidating, hostile or offensive working environment for them as members of a protected class.</li> </ul> <p> (3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It clarifies that the definition of &ldquo;working environment&rdquo; is not limited to a physical location where an employee is assigned to perform his or her duties.</p> <p> <em>Mandatory Annual Disclosures</em></p> <p> While the bulk of the Workplace Transparency Act is set to take effect January 1, 2020, the Act also provides that, <strong>beginning July 1, 2020</strong>, and by July 1 of every year after, covered employers must disclose the following information annually to IDHR:&nbsp;&nbsp;</p> <ul> <li> The total number of adverse judgments or administrative rulings against the employer during the preceding year in any discrimination case under any law&mdash;federal or state;</li> <li> Whether any equitable relief was ordered against the employer in any adverse judgment or administrative ruling; and</li> <li> The total number of adverse judgments or administrative rulings, broken down by protected characteristics, in the following categories:</li> <li> sexual harassment;</li> <li> discrimination or harassment on the basis of sex;</li> <li> discrimination or harassment on the basis of race, color, or national origin;</li> <li> discrimination or harassment on the basis of religion;</li> <li> discrimination or harassment on the basis of age;</li> <li> discrimination or harassment on the basis of disability;</li> <li> discrimination or harassment on the basis of military status or unfavorable discharge from military status;</li> <li> discrimination or harassment on the basis of sexual orientation or gender identity; and</li> <li> discrimination or harassment on the basis of any other characteristic protected under this Act.</li> </ul> <p> <br /> In addition, during the course of an investigation, the Act allows an IDHR investigator to require and employer to submit the total number of settlements entered into during the preceding 5 years (or less, at IDHR&rsquo;s direction), that relate to any alleged act of sexual harassment or unlawful discrimination that: (1) occurred in the workplace of the employer; or (2) involved the behavior of an employee of the employer or a corporate executive of the employer, without regard to whether that behavior occurred in the workplace of the employer. If the investigator requests this information, the employer is required to disclosure the total number of settlements entered into during the requested period, along with a breakdown of those settlements by the categories of protected characteristic set forth above.</p> <p> Although the information in these disclosures will not be subject to disclosure under a FOIA request, IDHR is required to publish an annual, publicly available report, aggregating all disclosed information, without identifying any reporting employer. In addition, failure to comply with reporting obligations could result in civil penalties up to $5,000 per offense, depending on employer size and the number of violations.</p> <p> <em>Mandatory Annual Sexual Harassment Prevention Training</em></p> <p> Upon taking effect, the Act requires employers to provide annual sexual harassment prevention training to all employees, which must at minimum:</p> <ul> <li> Define sexual harassment;</li> <li> Provide examples of prohibited conduct;</li> <li> State that it is the employer&rsquo;s responsibility to prevent, investigate and address sexual harassment; and</li> <li> Summarize federal and state laws addressing sexual harassment, and available remedies for violation thereof.</li> </ul> <p> <br /> While there is no word on when it will be available, the Act requires that IDHR make available a model sexual harassment prevention training program that meets these criteria. Once published, employers must either use the model program or establish training that exceeds the minimum standards provided by the model training.</p> <p> As with the annual disclosures, noncompliance with this section may subject employers to civil penalties up to $5,000 per offense.</p> <p> <em>Additional Training and Policy Requirements for Bars and Restaurants</em></p> <p> The Act would require all bars and restaurants in the state to provide employees a written sexual harassment policy in English and Spanish within the first calendar week of employment, as well as providing supplemental training in English and Spanish.</p> <p> <em>Amendment to Illinois Victims&rsquo; Economic Security and Safety Act (VESSA)</em></p> <p> VESSA currently requires employers to provide 4-12 weeks of unpaid, job-protected leave (or other reasonable accommodations) to obtain medical, psychological, or other services after an employee experiences domestic or sexual violence. The Act amends VESSA to include gender violence among the qualifying reasons for taking leave under VESSA.</p> <p> <strong><u>Employer Takeaways</u></strong></p> <p> The WTA is a sweeping law that will impact policies and practices of nearly all employers in Illinois. Accordingly, employers should begin now to review their current agreements and policies to assess whether they are consistent with WTA mandates; if not, agreement templates and policies should be revised&mdash;or new ones created&mdash;to bring those and the employer&rsquo;s practices more generally into compliance before the January 1 effective date.</p> <p> In particular, employers will likely need to evaluate separation agreements and any settlement templates, confidentiality and non-disclosure language in various forms of agreements, and any existing arbitration policies. While the Act does not ban confidentiality agreements or arbitration agreements outright, it will invalidate those (or the invalid portions thereof) that don&rsquo;t comply, and subject employers to paying the employee&rsquo;s attorneys&rsquo; fees if the employee prevails in challenging an agreement or policy under the Act.</p> <p> Besides revising or replacing existing policies and agreement templates, employers will need to start preparing for and planning to implement sexual harassment training that complies with the model training program, once released, as well as for tracking and reporting the information required in the annual disclosures to IDHR, and those that can be required during investigation of a charge.&nbsp;</p> https://www.seyfarth.com:443/publications/WH081219 New Jersey Passes Landmark Anti-Wage Theft Law https://www.seyfarth.com:443/publications/WH081219 Mon, 12 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On August 6, 2019, Acting New Jersey Governor Sheila Oliver signed into law A-2903/S-1790, described as an Act &ldquo;concerning enforcement, penalties, and procedures for law regarding failure to pay wages.&rdquo; The Act makes a number of critical changes to several New Jersey civil and criminal laws, adding a variety of increased employee protections and harsher penalties. These additions make New Jersey&rsquo;s anti-wage theft law one of the strongest anti-wage theft protection laws in the country.<br /> <br /> <a href="https://www.wagehourlitigation.com/uncategorized/new-jersey-passes-landmark-anti-wage-theft-law/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC080919 Fifth Circuit Rules That The EEOC Can’t Mess With Texas Over Criminal Background Checks https://www.seyfarth.com:443/publications/WC080919 Fri, 09 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In the latest battle of the multi-year showdown between the State of Texas and the EEOC &ndash; whereby Texas asserted that the EEOC&rsquo;s 2012 &ldquo;Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII&rdquo; (&ldquo;Guidance&rdquo;) interfered with its authority to limit the hiring of felons &ndash; the U.S. Court of Appeals for the Fifth Circuit affirmed most parts of an injunction that the U.S. District Court for the Northern District of Texas entered in favor of Texas, which blocked the EEOC and the U.S. Department of Justice (&ldquo;Defendants&rdquo;) from enforcing the Guidance. State of Texas v. EEOC et al., No. 18-10638, 2019 U.S. App. LEXIS 23498 (5th Cir. Aug. 6, 2019).<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/08/fifth-circuit-rules-that-the-eeoc-cant-mess-with-texas-over-criminal-background-checks/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EEOC080919 Fifth Circuit Rules That The EEOC Can’t Mess With Texas Over Criminal Background Checks https://www.seyfarth.com:443/publications/EEOC080919 Fri, 09 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In the latest battle of the multi-year showdown between the State of Texas and the EEOC &ndash; whereby Texas asserted that the EEOC&rsquo;s 2012 &ldquo;Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII&rdquo; (&ldquo;Guidance&rdquo;) interfered with its authority to limit the hiring of felons &ndash; the U.S. Court of Appeals for the Fifth Circuit affirmed most parts of an injunction that the U.S. District Court for the Northern District of Texas entered in favor of Texas, which blocked the EEOC and the U.S. Department of Justice (&ldquo;Defendants&rdquo;) from enforcing the Guidance. State of Texas v. EEOC et al., No. 18-10638, 2019 U.S. App. LEXIS 23498 (5th Cir. Aug. 6, 2019).<br /> <br /> <a href="https://www.eeoccountdown.com/2019/08/09/fifth-circuit-rules-that-the-eeoc-cant-mess-with-texas-over-criminal-background-checks/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/vultn080919 Minh Vu interviewed on Legal Talk Network https://www.seyfarth.com:443/news/vultn080919 Fri, 09 Aug 2019 00:00:00 -0400 <p> Minh Vu was interviewed August 9th on Legal Talk Network, &quot;Website Accessibility and the ADA.&quot; Vu discuss website accessibility litigation and how the ADA impacts such cases. You can listen to the <a href="https://legaltalknetwork.com/podcasts/lawyer-2-lawyer/2019/08/website-accessibility-and-the-ada/">full interview here</a>.</p> https://www.seyfarth.com:443/news/luriebloombergenvironment080819 Dawn Lurie quoted in Bloomberg Environment https://www.seyfarth.com:443/news/luriebloombergenvironment080819 Thu, 08 Aug 2019 00:00:00 -0400 <p> Dawn Lurie was quoted in an August 8 story from Bloomberg Environment, &quot;ICE Raids Could Increase Safety Hazards in Poultry Plants.&quot; Lurie said that employees who remain working in the plant could face an increased risk of safety hazards, as they&rsquo;re left in a dangerous position.</p> https://www.seyfarth.com:443/news/vunpr080819 Minh Vu interviewed on NPR https://www.seyfarth.com:443/news/vunpr080819 Thu, 08 Aug 2019 00:00:00 -0400 <p> Minh Vu was interviewed August 8th on NPR, &quot;Disability Advocates Say ADA Requirements Should Apply Online, Domino&rsquo;s Wants Supreme Court To Weigh In.&quot; You can listen to the <a href="https://www.scpr.org/programs/airtalk/2019/08/08/64763/disability-advocates-say-ada-requirements-should-a/">full interview here</a>.</p> https://www.seyfarth.com:443/news/casciarishrm080819 Joan Casciari quoted in SHRM https://www.seyfarth.com:443/news/casciarishrm080819 Thu, 08 Aug 2019 00:00:00 -0400 <p> Joan Casciari was quoted in an August 8 story from SHRM, &quot;Parents May Take FMLA Leave for Special Education Meetings.&quot; Casciari said that medical certification that the child has a serious health condition is probably sufficient without evidence of an IEP. You can read the <a href="https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/fmla-leave-for-special-education-meetings.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/MA080819-LE New Jersey Passes Landmark Anti-Wage Theft Law https://www.seyfarth.com:443/publications/MA080819-LE Thu, 08 Aug 2019 00:00:00 -0400 <p> <em>Seyfarth Synopsis:&nbsp;On August 6, 2019, Acting New Jersey Governor Sheila Oliver signed into law <a href="https://www.njleg.state.nj.us/2018/Bills/S2000/1790_R3.PDF">A-2903/S-1790</a>, described as an Act &ldquo;concerning enforcement, penalties, and procedures for law regarding failure to pay wages.&rdquo;&nbsp; The Act makes a number of critical changes to several New Jersey civil and criminal laws, adding a variety of increased employee protections and harsher penalties.&nbsp; These additions make New Jersey&rsquo;s anti-wage theft law one of the strongest anti-wage theft protection laws in the <a href="https://nj.gov/governor/news/news/562019/approved/20190806a.shtml">country</a>.&nbsp;</em></p> <p> The primary and immediate impact of the Act&rsquo;s amendments to various wage-payment laws is the institution of increased penalties for failure to pay wages, up to and including criminal punishments.&nbsp; Below is a summary of the Act&rsquo;s key provisions:</p> <p> <strong>Liquidated Damages for Violation of Wage Payment Law</strong></p> <p> Among other changes, the Act primarily amends key provisions to the Wage Payment Law, the Equal Pay Act, and the Wage and Hour Law.&nbsp; With amendments to each of these laws, the Act provides that if an employer is found to owe wages to an employee that is due unpaid wages or wages lost due to the retaliatory action, the employee is allowed to recover the wages owed <em>plus</em> liquidated damages in an additional amount equal to 200 percent of the unpaid wages, plus reasonable costs of the action and attorney&rsquo;s fees to the employee.</p> <p> The Act does provide for a good faith defense.&nbsp; The payment of liquidated damages is not required for a first violation by an employer who demonstrates that the employer&rsquo;s action was taken in good faith with reasonable grounds for believing that the action was not a violation, <u>and</u> the employer admits the violation and pays the amount owed within 30 days.</p> <p> <strong>Increased Statute of Limitations</strong></p> <p> The Statute of Limitations for commencing an action to recover wages is significantly extended from two to <strong><em>six</em></strong> years.</p> <p> <strong>Expansion of &ldquo;Employer&rdquo; to Include Successor Entity</strong></p> <p> The Act also expands the definition of &ldquo;employer&rdquo; to encompass any successor entity or successor firm of the employer, meaning that a successor entity can also now be liable for the purported wage violations of its predecessor.</p> <div> The Act provides that a rebuttable presumption that an employer has established a successor entity shall arise if the two share at least two of the following capacities or characteristics:&nbsp;</div> <div> &nbsp;</div> <div> (1) perform similar work within the same geographical area;&nbsp;</div> <div> (2) occupy the same premises;&nbsp;</div> <div> (3) have the same telephone or fax number;&nbsp;</div> <div> (4) have the same email address or Internet website;&nbsp;</div> <div> (5) employ substantially the same work force, administrative employees, or both;&nbsp;</div> <div> (6) utilize the same tools, facilities, or equipment;&nbsp;</div> <div> (7) employ or engage the services of any person or&nbsp; persons involved in the direction or control of the other; or&nbsp;</div> <div> (8) list substantially the same work experience.</div> <div> &nbsp;</div> <div> Furthermore, with regard to a failure to pay employees pursuant to a contract, a client employer and a labor contractor providing workers to the client employer shall now be subject to joint and several liability and shall share civil legal responsibility for any violations of the provisions of the wage and hour laws, including provisions regarding retaliatory actions against employees for exercising their rights under the laws.</div> <div> &nbsp;</div> <div> <strong>Employees to Be Given Statement of Rights</strong></div> <div> &nbsp;</div> <div> The Act also provides that current employees and each newly hired employee shall be provided a written copy of a statement of employee&rsquo;s rights under the stage wage and hour laws, which an explanation of how to file a claim or take an action pursuant to those laws.&nbsp; The Act also calls upon the Department of Labor and Workforce Development to promulgate a model statement of rights and make it available to the public on its website.</div> <div> &nbsp;</div> <div> <strong>Penalties and Criminal Punishments</strong></div> <div> &nbsp;</div> <div> The Act also amends the violations provision of the Wage Payment Law.&nbsp; A violation will be found if the employer <em>knowingly </em>fails to pay the full amount of wages to an employee agreed to or required by law; OR the employer takes a retaliatory action against an employee by discharging or in any other manner discriminating against the employee, because the employee either:</div> <ul> <li> made a complaint to his/her employer, to the commissioner, or to an authorized representative, that the employer has not paid the employee the full amount of wages due, OR</li> <li> testified or is about to testify in any proceeding relating to the wage-payment laws, OR</li> <li> because the employee has informed any employee of the employer about rights under State laws regarding wages and hours worked.</li> </ul> <p> Fines and punishments will be imposed as follows:</p> <p style="margin-left:40.5pt;"> <em>For First Violation</em>: the employer shall be guilty of a disorderly persons offense and shall be punished by a fine of $500 to $1,000, or by imprisonment for 10-90 days, or by both the fine and imprisonment.</p> <p style="margin-left:40.5pt;"> <em>For Second Violation:</em> the employer shall be guilty of a disorderly persons offense and shall be punished by a fine of $1,000 to $2,000, or by imprisonment of 10 to 100 days, or by both the fine and imprisonment.</p> <p style="margin-left:40.5pt;"> <em>For Third or subsequent Violation: </em>the employer shall be guilty of a crime of the fourth degree, and be punished by a fine of $2,000 to $10,000 or by imprisonment of up to 18 months, or by both the fine and imprisonment.</p> <p> Each week in which an violation of the Wage Payment Act occurs shall constitute a separate and distinct offense.</p> <p> <strong>Anti-Retaliation Provisions</strong></p> <p> The Act also carves out an additional remedy in the case of an adverse action such as discharge or other discriminatory action taken against an employee in violation of the Wage Payment Law, the Wage and Hour Law, or a contract to pay employees.&nbsp; Employers shall be required to offer reinstatement to the discharged employee and take other actions as needed to correct the retaliatory action.&nbsp; In addition, an employer taking an adverse action against an employee within <strong><em>ninety</em></strong> days of the employee filing a complaint with the Department of Labor and Workforce Development, or a claim or action being brought for a violation of the wage payment laws, shall raise a rebuttable presumption that the employer&rsquo;s action was taken in retaliation against the employee.&nbsp; The presumption may be rebutted only by clear and convincing evidence that the action was taken for other, permissible, reasons.</p> <p> <strong>Crime of Violation Of Contract to Pay Employees</strong></p> <p> The Act further amends the New Jersey Code of Criminal Justice to provide that it will constitute a disorderly persons offense if an employer agreed with an employee to pay wages, compensation or benefits and fails to pay wages when due or fails to pay compensation as required by law within <strong><em>thirty</em></strong> days due.&nbsp; The Act further imposes a fine of $500, plus a penalty equal to 20% of the wages owed for the first offense.&nbsp; Penalties for subsequent violations will be assessed at $1,000 plus a penalty of 20 percent of wages owed.&nbsp; Employers who have been convicted of violating the law on two or more occasions are guilty of the crime of &ldquo;pattern of wage nonpayment&rdquo; which is a crime in the third degree.</p> <p> <strong>Effective Date</strong></p> <p> The majority of the Law&rsquo;s provisions take place immediately, except for the addition of the crime of pattern of non-payment of wages, which will take effect on the first day of the third month following enactment, which is November 1, 2019.</p> <p> <strong>Conclusion</strong></p> <p> These are drastic changes to New Jersey wage and hour law, to which all employers with operations in New Jersey should be mindful of going forward.&nbsp; Given the increased penalties, when coupled with the largely expanded statute of limitations period for wage and hour violations, a spike in wage and hour lawsuits in New Jersey may very well be forthcoming.&nbsp; As such, a renewed review of pay, timekeeping, and classification practices and policies for employers with operations in New Jersey is well advised.</p> <p> If you would like further information, please contact <a href="https://www.seyfarth.com/howardwexler">Howard M. Wexler</a> at <a href="mailto:hwexler@seyfarth.com">hwexler@seyfarth.com</a> or <a href="https://www.seyfarth.com/lisasavadjian">Lisa L. Savadjian</a> at <a href="mailto:lsavadjian@seyfarth.com">lsavadjian@seyfarth.com</a>.</p> https://www.seyfarth.com:443/publications/MA080819-LE2 On Or Off-Duty, Meal Periods Must Be 30 Minutes https://www.seyfarth.com:443/publications/MA080819-LE2 Thu, 08 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em> A California Court of Appeal has held that on-duty meal periods under IWC Wage Order No. 5 must be at least 30 minutes long. While the Court of Appeal&rsquo;s ruling involved employees of 24-hour residential care facilities for seniors, the ruling is apt to apply to on-duty meal periods generally. &nbsp;</em></p> <p> <strong>The Facts</strong></p> <p> L&rsquo;Chaim House, Inc. and its owner, (colletively, &ldquo;L&rsquo;Chaim&rdquo;) were cited by the Division of Labor Standards Enforcement (&ldquo;DLSE&rdquo;) for wage and hour violations. The citations were for, among other things, L&rsquo;Chaim&rsquo;s failure to provide 30-minute meal periods under IWC Wage Order No. 5, which governs the public housekeeping industry. After an unsuccessful administrative appeal, challenging the DLSE citations imposed, L&rsquo;Chaim filed an appeal with the trial court, which was denied. On the subsequent appeal, the Court of Appeal considered whether the on-duty meal periods authorized by IWC Wage Order No. 5, subsdivision 11(E) must be at least 30 minutes long. Subdivision 11(E) creates a special exception from the general on-duty meal period requirements of subdivision 11(A) for certain employees involved in residential care.</p> <p> <strong>The Court of Appeal&rsquo;s Decision</strong></p> <p> The Court of Appeal concluded that a residential care employee subject to subdivision 11(E) of Wage Order No. 5 &ldquo;is still entitled to a 30-minute meal period even though that meal period may be on-duty instead of off-duty.&rdquo; The Court of Appeal concluded that &ldquo;an on-duty meal period is not the functional equivalent of no meal period at all. On-duty meal periods are an intermediate category requiring more of employees than off-duty meal periods but less of employees than their normal work.&rdquo;</p> <p> L&rsquo;Chaim unsuccessfully argued that employers with employees are covered by subdivision 11(E) of Wage Order No. 5 are exempt from complying with <em>any </em>part of subdivision 11(A), including the requirements that meal periods be at least 30 minutes long. The Court of Appeal disagreed and clarified that subdivision 11(E) &ldquo;creates an exception to subdivision 11(A) by authorizing an employer to mandate on-duty meal periods without the need to reach a revocable waiver agreement with its employees,&rdquo; if certain requirements are met. However, the subdivision 11(E) exception does <strong><em>not</em></strong> change the underlying requirement that a meal period must still be at least 30 minutes long (even though the employee remains on-duty during the meal period).&nbsp;</p> <p> <strong>What <em>L&rsquo;Chaim </em>Means to Employers </strong></p> <p> If extended to the other on-duty meal period provisions of the various Wage Orders, the <em>L&rsquo;Chaim </em>decision teaches that, no matter the industry, the best practice for employers who make use of on-duty meal periods is to provide employees with a meal period of at least 30 minutes. Put differently, the on-duty nature of a meal period does not change the underlying requirement that employers must provide meal periods that are at least 30 minutes long. Employers that fail to provide employees with on-duty meal periods that are at least 30 minutes long could be exposed to claims for meal period penalties. Unfortunately, <em>L&rsquo;Chaim </em>provides no guidance as to what types of duties, if any, an employee taking an on-duty meal may be required to perform.</p> <div> If you would like further information, please contact <a href="https://www.seyfarth.com/ZaherLopez">Zaher Lopez</a> at <a href="mailto:zlopez@seyfarth.com">zlopez@seyfarth.com</a> or <a href="https://www.seyfarth.com/KerryFriedrichs">Kerry Friedrichs</a> at <a href="mailto:kfriedrichs@seyfarth.com">kfriedrichs@seyfarth.com</a></div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/EL080819 CBD is Everywhere – But Where Does the FDA Stand? https://www.seyfarth.com:443/publications/EL080819 Thu, 08 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: CBD is &ldquo;thriving&rdquo; in the current regulatory environment, but is it doing so illegally?<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/cbd-is-everywhere-but-where-does-the-fda-stand/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT080819 The Week in Weed: August 9, 2019 https://www.seyfarth.com:443/publications/TBT080819 Thu, 08 Aug 2019 00:00:00 -0400 <p> Welcome back to the Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/the-week-in-weed-august-9-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EEOC080719 Federal Court Rules That Employer Is Not Entitled To EEOC’s Pre-Suit Materials https://www.seyfarth.com:443/publications/EEOC080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: After a federal magistrate judge in California ordered the EEOC to provide written discovery responses relative to the substance its pre-suit investigation of a sex discrimination charge in EEOC v. Chipotle Mexican Grill, Inc., No. 17-CV-5382, 2019 U.S. Dist. LEXIS 129046 (N.D. Cal. Aug. 1, 2019), the EEOC objected to the order and sought review; thereafter, the district judge granted EEOC&rsquo;s motion for relief from the magistrate judge&rsquo;s order. The Court found that the requested evidence was protected by the deliberative process privilege, and therefore, that the EEOC did not have to respond to the discovery request.<br /> <br /> <a href="https://www.eeoccountdown.com/2019/08/07/federal-court-rules-that-employer-is-not-entitled-to-eeocs-pre-suit-materials/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH080719 Full Steam Ahead on Arbitration Says NJ Appellate Court https://www.seyfarth.com:443/publications/WH080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Earlier this year, in New Prime, the Supreme Court decisively held that the Federal Arbitration Act&rsquo;s &sect; 1 exemption for transportation workers engaged in foreign or interstate commerce applied to independent contractors and employees alike. While New Prime presented a bump in the road to arbitration, a recent appellate court decision in New Jersey provides a road map for enforcing arbitration agreements with transportation workers who are otherwise subject to FAA&rsquo;s &sect; 1 exemption. In Colon v. Strategic Delivery Solutions, LLC, the court held that even if the FAA &sect; 1 exemption applied to the plaintiff delivery drivers, the parties&rsquo; arbitration agreement was enforceable under the state analog to the FAA.<br /> <br /> <a href="https://www.wagehourlitigation.com/arbitration/full-steam-ahead-on-arbitration-says-nj-appellate-court/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC080719 Federal Court Rules That Employer Is Not Entitled To EEOC’s Pre-Suit Materials https://www.seyfarth.com:443/publications/WC080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: After a federal magistrate judge in California ordered the EEOC to provide written discovery responses relative to the substance its pre-suit investigation of a sex discrimination charge in EEOC v. Chipotle Mexican Grill, Inc., No. 17-CV-5382, 2019 U.S. Dist. LEXIS 129046 (N.D. Cal. Aug. 1, 2019), the EEOC objected to the order and sought review; thereafter, the district judge granted EEOC&rsquo;s motion for relief from the magistrate judge&rsquo;s order. The Court found that the requested evidence was protected by the deliberative process privilege, and therefore, that the EEOC did not have to respond to the discovery request.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/08/federal-court-rules-that-employer-is-not-entitled-to-eeocs-pre-suit-materials/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE080719 EPA Proposes Revisions to Clarify New Source Review Permitting Process – Updating “Project Emissions Accounting” https://www.seyfarth.com:443/publications/WSE080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Consistent with guidance issued by the Environmental Protection Agency (EPA) in March 2018, the Agency has now proposed to codify changes to the New Source Review (NSR) applicability regulations to clarify the requirements that apply to sources proposing to undertake a physical or operational change under the NSR PSD preconstruction permitting program. The proposal would &ldquo;make it clear that both emissions increases and decreases from a major modification at an existing source are to be considered during Step 1 of the two-step NSR applicability test.&rdquo; The process is known as &ldquo;project emissions accounting&rdquo; (previously known as project netting).<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/caa/epa-proposes-revisions-to-clarify-new-source-review-permitting-process-updating-project-emissions-accounting/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP080719 New Cal/OSHA Emergency Regulation to Protect Workers from Wildfire Smoke https://www.seyfarth.com:443/publications/CP080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Cal/OSHA&rsquo;s new emergency regulation for workers exposed to wildfire smoke creates new obligations for many employers.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/08/07/new-cal-osha-emergency-regulation-to-protect-workers-from-wildfire-smoke/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/jansonssm080719 Eric Janson quoted in Street Sense Media https://www.seyfarth.com:443/news/jansonssm080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Eric Janson was quoted in an August 7 story from Street Sense Media, &quot;Marijuana is legal, but returning citizens from the criminal justice system are still facing consequences for using it.&quot; Janson said that nationwide, in the past three to five years, both the laws on the books as well as the case law and the courts interpreting those laws have seemingly been trending pro-employee. You can read the <a href="https://www.streetsensemedia.org/article/employment-drug-test-weed-cbd/#.XUszAHlYaUl">full article here</a>.</p> https://www.seyfarth.com:443/news/morashrm080719 Jennifer Mora quoted in SHRM https://www.seyfarth.com:443/news/morashrm080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Jennifer Mora was quoted in an August 7 story from SHRM, &quot;Cannabis Oil Complicates Drug Testing.&quot; Mora said that a positive test for THC may not necessarily mean that an individual is impaired, because THC can remain in the body for weeks. You can read the <a href="https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/cannabis-oil-complicates-drug-testing.aspx">full article here</a>.</p> https://www.seyfarth.com:443/news/paparellilaw360080719 Angelo Paparelli quoted in Law360 https://www.seyfarth.com:443/news/paparellilaw360080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Angelo Paparelli was quoted in an August 7 story from Law360, &quot;How Attorneys Can Brace For Rising EB-5 Compliance Checks.&quot; Paparelli said that attorneys should be aware that there might be a legal basis to challenge unannounced EB-5 site visits.</p> https://www.seyfarth.com:443/news/lurienyt080719 Dawn Lurie quoted in the New York Times https://www.seyfarth.com:443/news/lurienyt080719 Wed, 07 Aug 2019 00:00:00 -0400 <p> Dawn Lurie was quoted in an August 7 story from the New York Times, &quot;ICE Arrests Hundreds in Mississippi Raids Targeting Immigrant Workers.&quot; Lurie said that it&rsquo;s all part of a concerted effort by this administration to target not only the individuals in the United States unlawfully but also the companies that are employing them. You can read the <a href="https://www.nytimes.com/2019/08/07/us/ice-raids-mississippi.html">full article here</a>.</p> https://www.seyfarth.com:443/news/bitarwsj080619 Karen Bitar quoted in the Wall Street Journal https://www.seyfarth.com:443/news/bitarwsj080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> Karen Bitar was quoted in an August 6 story from the Wall Street Journal, &quot;Change to New York Sex-Abuse Laws Expected to Spur A Wave of Lawsuits.&quot; Bitar said that schools and other institutions that have faced past allegations have been working to retain documents they might need to defend themselves in advance of the look-back window. You can read the <a href="https://www.wsj.com/articles/change-to-new-york-sex-abuse-laws-expected-to-spur-a-wave-of-lawsuits-11565105215">full article here</a>.</p> https://www.seyfarth.com:443/news/vugizmodo080619 Minh Vu quoted in Gizmodo https://www.seyfarth.com:443/news/vugizmodo080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> Minh Vu was quoted in an August 6 story from Gizmodo, &quot;Domino&#39;s Could **** Up the Internet for People With Disabilities Because They Won&#39;t Just Fix Their Website.&quot; Vu characterized the rise in lawsuits brought under Title III as a &ldquo;litigation tsunami,&rdquo; adding that Seyfarth&rsquo;s data shows that in 2018, there were over 2,250 lawsuits involving websites filed in federal court. You can read the <a href="https://gizmodo.com/dominos-could-fuck-up-the-internet-for-everyone-with-di-1836794767">full article here</a>.</p> https://www.seyfarth.com:443/news/whitmanbloomberglaw080619 Robert Whitman quoted in Bloomberg Law https://www.seyfarth.com:443/news/whitmanbloomberglaw080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> Robert Whitman was quoted in an August 6 story from Bloomberg Law, &quot;Federal Arbitration Law Poses Barrier to #MeToo Era State Laws.&quot; Whitman said that arbitration was targeted as something that contributed to the problem that led to the #MeToo movement. He said the text of the New York law itself says the state apply would apply &ldquo;except where inconsistent with federal law.&rdquo;</p> https://www.seyfarth.com:443/publications/TS080619 Maine Governor Restricts Restrictive Covenants https://www.seyfarth.com:443/publications/TS080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> On June 28, 2019, Governor Mills signed LD 733, An Act To Promote Keeping Workers in Maine, into law. The Act places limits on non-compete agreements and bans restrictive employment agreements.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/08/articles/legislation-2/maine-governor-restricts-restrictive-covenants/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL080619 Illinois – the Newest State to Toughen its Equal Pay Laws with a Robust Salary History Ban https://www.seyfarth.com:443/publications/EL080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On July 31, 2019, the Illinois Governor J.B. Pritzker signed HB0834 into law, amending the state&rsquo;s Equal Pay Act. The amendments toughen the state&rsquo;s pay equity protections and includes a salary history ban, among other provisions. This adds Illinois to the growing list of states barring employers from inquiring about an applicant&rsquo;s salary history. Former Governor Bruce Rauner vetoed previous attempts to prohibit private employers from requesting applicants&rsquo; previous pay history, but current Governor J.B. Pritzker had publically pledged to sign the bill into law. The new law becomes effective September 29, 2019.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/illinois-the-newest-state-to-toughen-its-equal-pay-laws-with-a-robust-salary-history-ban/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT080619 Win Some, Lose Some, Fight Another Day: Cannabis Decriminalized in New York and Full Legalization Discussions Postponed https://www.seyfarth.com:443/publications/TBT080619 Tue, 06 Aug 2019 00:00:00 -0400 <p> On July 29, 2019, New York Governor Andrew Cuomo (D) signed state legislation that further decriminalizes the possession of cannabis. The bill, sponsored by Senator Jamaal Bailey (D-Bronx), was passed by the New York State Assembly just over a month before it was signed, receiving 39 to 20 votes in the State Senate and 94 to 44 votes in the State Assembly.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/win-some-lose-some-fight-another-day-cannabis-decriminalized-in-new-york-and-full-legalization-discussions-postponed/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA080519-LIT CBD is Everywhere - But Where Does the FDA Stand? https://www.seyfarth.com:443/publications/MA080519-LIT Mon, 05 Aug 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis:&nbsp;</strong> CBD is &ldquo;thriving&rdquo; in the current regulatory environment, but is it doing so illegally?</em></div> <div> &nbsp;</div> <div> As former U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb opined last <a href="https://www.washingtonpost.com/opinions/the-cbd-craze-is-getting-out-of-hand-the-fda-needs-to-act/2019/07/30/94c8024c-b211-11e9-8f6c-7828e68cb15f_story.html?utm_term=.ba43a919d8a1">week</a>, &ldquo;the CBD craze is getting out of hand. The FDA needs to act.&rdquo;&nbsp; Since the passage of the <a href="https://www.seyfarth.com/publications/OMM101118-LIT">Farm Bill in December of 2018</a>, there has been a marked uptick in interest in the cannabidiol (CBD) space from businesses and users alike.&nbsp; Congress explicitly preserved the <a href="https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-questions-and-answers">FDA&rsquo;s authority to regulate CBD-containing products</a> to ensure that they are safe and that their claims are valid.&nbsp; Current federal law expressly allows for the distribution of hemp-derived CBD products that contain 0.3% tetrahydrocannabidiol (THC) or less to be sold, with certain caveats.&nbsp; The FDA has provided clarity that hulled hemp seed, hemp protein powder, and hemp seed oil can be legally used in foods.&nbsp; Other CBD products, however, are still subject to various state law regulations as well as the U.S. Food, Drug, and Cosmetic Act (FD&amp;C Act), which requires FDA pre-market approval for drug products.&nbsp; Currently, the FDA treats CBD products aimed at human or animal consumption as drugs and therefore they cannot be distributed <a href="https://www.seyfarth.com/publications/OMM070518-LIT">without prior approval</a> or a rulemaking exception (more on this below).&nbsp; The following is a brief update on recent developments within the federal regulatory regime of CBD products.&nbsp;&nbsp;</div> <h3> FDA&rsquo;s Regulatory Efforts</h3> <div> In light of the enactment of the Farm Bill, along with growing activity and interest in CBD products, the FDA has taken initial steps toward exercising greater oversight&mdash;with a goal of devising a more robust regulatory regime.&nbsp; In March of 2019, the FDA established a Working Group to determine the possible legislative pathways to regulate CBD.&nbsp; Specifically, the group aims to &ldquo;make recommendations&rdquo; on CBD legislation to Congress.</div> <div> &nbsp;</div> <div> On May 31, 2019, the FDA&rsquo;s Working Group held a public hearing for stakeholders to share their experiences and challenges with CBD products, including information and views related to product safety.&nbsp; The public hearing attracted over 100 speakers and 2000 participants.&nbsp; In addition, the Working Group invited the public to submit written comments (the &ldquo;Public Docket&rdquo;), which closed on July 16, 2019.&nbsp; Dr. Amy Abernethy, the Principal Deputy Commissioner and Acting Chief Information Officer and head of the Working Group, recently <a href="https://twitter.com/DrAbernethyFDA/status/1149766447910047745">Tweeted</a>:</div> <div> &nbsp;</div> <div> &ldquo;We are enthusiastic about research into the therapeutic benefits of CBD products but also need to balance safety. To understand the breadth of issues and gather data on safety we have conducted a public hearing, reviewed the medical literature, and have an open public docket.&rdquo;&nbsp;</div> <div> &nbsp;</div> <div> Elaborating on this statement, on July 25, 2019, Dr. Abernethy testified before the Agriculture, Nutrition and Forestry Committee where she stated that providing clarity on the regulatory status of CBD products is an FDA priority, but cautioning that based on the FDA&rsquo;s review of Epidiolex (the first CBD-approved drug), CBD is not risk-free.&nbsp; She stressed that, to the FDA&rsquo;s knowledge, adequate studies simply have not been done, leaving the FDA without adequate information for science-based decision-making about CBD.&nbsp; The FDA is collecting data to fill these gaps.&nbsp; The Working Group is in the process of reviewing published medical literature and other available information from industry sponsors.&nbsp; In addition, as of July 29, 2019, the FDA received over 4400 comments on the Public Docket, which will add to the Working Group&rsquo;s active review.&nbsp; The FDA is also meeting with other federal agencies and state counterparts, trade organizations, and patient groups in a quest for data.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The FDA is living up to its previous statement that it would apply both a &ldquo;rigorous and science-based approach&rdquo; to formulating its regulations on CBD products.&nbsp; And now, it appears, based on Dr. Abernethy&rsquo;s <a href="https://twitter.com/DrAbernethyFDA/status/1149766448669216769">public comments</a>, the FDA is primed to roll out a report on its progress later this summer or early fall.&nbsp; &nbsp;</div> <h3> FDA&rsquo;s Enforcement Efforts</h3> <div> Meanwhile, the FDA is seeking opportunities to provide regulatory clarity wherever possible.&nbsp; In 2019, the FDA issued warning letters to four companies marketing and selling CBD products.&nbsp; In each instance, the companies were selling products with flagrant disease-related claims that the FDA had not approved for the treatment or prevention of any ailments.&nbsp; The FDA has historically been passive in its oversight of CBD products.&nbsp; The recent shift underscores the need for companies to both understand and adhere to federal regulations over such products.&nbsp;</div> <div> &nbsp;</div> <div> In its most recent warning letter, dated July 22, 2019, the FDA asserted that Curaleaf Inc., (based in Wakefield, Massachusetts) marketed unapproved products that qualified as &ldquo;drugs&rdquo; with improper labeling as defined under the FD&amp;C Act.&nbsp; The FDA explained that Curaleaf&rsquo;s products, advertised both through its online store and on social media sites, were aimed at the &ldquo;diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.&rdquo;&nbsp; The FDA specifically found that Curaleaf marketed its CBD products online with unsubstantiated claims that they treated (among other things) cancer, opioid withdrawal, pain and pet anxiety, and Alzheimer&rsquo;s disease.&nbsp; For example, on one of Curaleaf&rsquo;s pages entitled &ldquo;How to Use CBD Oil for Anxiety,&rdquo; the company explains that &ldquo;CBD can successfully reduce anxiety symptoms, both alone and in conjunction with other treatments&rdquo; and that &ldquo;CBD oil can be used in a variety of ways to help with chronic anxiety.&rdquo;&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The FDA requested that, within fifteen working days, Curaleaf respond with the specific steps it has taken to remedy the violations.&nbsp; The FDA cautioned that, without prompt action, legal action may follow, including seizure and injunctions.&nbsp; On Friday, July 26, 2019, Curaleaf responded, noting that it has taken steps to review all inaccurate statements about CBD products from their websites and social media platforms.&nbsp; It has since removed from its site the specific offending statements previously identified by the FDA.&nbsp; CVS, one of the nation&rsquo;s largest drugstore chains, has also removed Curaleaf products (CDB lotion and transdermal patches) from its shelves.&nbsp;&nbsp;</div> <h3> What&rsquo;s Next?</h3> <div> The Working Group is continuing to collect and review information relevant to the science of CBD, as well as investigating possible pathways for regulating CBD.&nbsp; Under section 331(ll) of the FD&amp;C Act (21 U.S.C. 331(ll)), the FDA prohibits the sale of products containing an ingredient that has been treated as a drug or involved in clinical trials, without prior FDA approval.&nbsp; This requirement is not without exceptions&mdash;some of which explicitly apply to CBD or could apply to CBD.&nbsp; One such exemption is that the drug was marketed in food before any approval and before substantial clinical investigations involving the ingredient were instituted.&nbsp; Another exemption exists if &ldquo;the Secretary, in the Secretary&rsquo;s discretion, has issued a regulation, after notice and comment, approving the use of such drug or such biological product in the food.&rdquo;&nbsp; Accordingly, the Secretary of Health and Human Services could exercise his authority and expedite the pathway for use of CBD in food products; although, any proposed regulation would take time to draft and be subject to public comment.&nbsp; The FDA won&rsquo;t have to get too creative in finding a legal way to permit the use of CBD in food products, but any such action will have to wait until the Working Group has gathered enough science to inform its decision on the safety of CBD.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> In addition to the anticipated FDA regulations and further guidance on CBD, activity at both the state and federal level add another layer of complexity that companies should consider.&nbsp; Both states and Congress are taking active measures to promote increased regulation of cosmetics and, on the other side, seeking to deregulate cannabis, which may consequentially affect CBD products.&nbsp; Increasingly fragmented state laws regarding marijuana and related products will further pressure the FDA to respond to confusion in this space.&nbsp; As for Congress, pending pieces of legislation aim to provide, more generally, stricter guidance on cosmetics and personal care products ingredients, labeling, and testing.&nbsp; &nbsp;</div> <div> &nbsp;</div> <div> Two key pieces of legislation, one from each chamber of Congress, deserve attention, primarily for topical CBD products.&nbsp; First, Sens. Dianne Feinstein and Susan Collins reintroduced their &ldquo;<a href="https://www.seyfarth.com/publications/OMM042718-LIT">Personal Care Products Safety Act</a>&rdquo; (S. 726) in March of 2019.&nbsp; This Act would amend the 80-year-old FD&amp;C Act in a variety of ways, including, but not limited to:&nbsp; requiring the FDA to review ingredients and other non-functional constituents for safety at a rate of at least five ingredients per year; requiring cosmetic ingredient statements for all cosmetics and fragrances, including the range of possible amounts of each ingredient; requiring ingredients, warnings and statements on professional products; and requiring complete label information (including manufacturer contact information) to be made available online in connection with online sales.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Second, Representative Jan Schakowsky&rsquo;s pending bill entitled the &ldquo;<a href="https://www.seyfarth.com/publications/OMM101118-LIT">Safe Cosmetics and Personal Care Products Act of 2018</a>&rdquo; (HR 6903) likewise aims to amend the FD&amp;C Act.&nbsp; While the bill is currently under review by several committees, it aims to require disclosure of all ingredients in beauty and personal care products, including fragrances.&nbsp; It also aims to outright ban toxic substances (e.g., carcinogens) from such products.&nbsp; The House, in June of 2019, has also set aside funds to further aid the FDA in setting guidelines for CDB products.</div> <div> &nbsp;</div> <div> To further complicate matters, there has been a flurry of activity at the state level.&nbsp; Governor Andrew Cuomo of New York, for example, in July of 2019, signed into law a bill decriminalizing marijuana.&nbsp; Hawaii has also done so in the same timeframe.&nbsp; These are just two additional examples of a patchwork of states that have legalized marijuana usage.&nbsp; With such activity at both the state and federal level, CBD finds itself in a unique, complicated legal environment, which we continue to monitor.&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/WSE080519 New Cal/OSHA Emergency Regulation to Protect Workers from Wildfire Smoke https://www.seyfarth.com:443/publications/WSE080519 Mon, 05 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Cal/OSHA&rsquo;s new emergency regulation for workers exposed to wildfire smoke creates new obligations for many employers.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/states/california/new-cal-osha-emergency-regulation-to-protect-workers-from-wildfire-smoke/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/olsonignites080519 Camille Olson quoted in Ignites https://www.seyfarth.com:443/news/olsonignites080519 Mon, 05 Aug 2019 00:00:00 -0400 <p> Camille Olson was quoted in an August 5 story from Ignites, &quot;How Shops Are Rebuilding Trust in HR, Post #MeToo.&quot; Olson said that with the #MeToo movement bringing greater awareness of sexual harassment more generally, senior executives at some firms are giving HR more resources to deal with complaints.</p> https://www.seyfarth.com:443/publications/TS080219 State Attorneys General Urge FTC to Consider Labor Issues in Antitrust Enforcement https://www.seyfarth.com:443/publications/TS080219 Fri, 02 Aug 2019 00:00:00 -0400 <p> A group of 18 state attorneys general (the &ldquo;AGs&rdquo;) recently filed comments with the Federal Trade Commission (&ldquo;FTC&rdquo;) in advance of a series of hearings centered on changes to antitrust and consumer protection enforcement in the 21st century. The letter identifies four major areas where recent antitrust activity involving labor issues have occurred: (1) horizontal no-poach agreements between employers; (2) vertical no-poach agreements, particularly franchise agreements; (3) non-compete agreements between employers and employees; and (4) mergers impacting labor markets. Although it may reveal the enforcement priorities of its signatories, the letter&rsquo;s arguments are mostly unsupported by any case law and in some respects are contrary to the Department of Justice&rsquo;s positions on the matters.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/08/articles/restrictive-covenants/state-attorneys-general-urge-ftc-to-consider-labor-issues-in-antitrust-enforcement/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ERISA080219 When An Innocent ERISA Administrator Mistake Can Lead To Money Damages https://www.seyfarth.com:443/publications/ERISA080219 Fri, 02 Aug 2019 00:00:00 -0400 <p> Synopsis: A recent decision of the federal district court for the Southern District of New York warns ERISA fiduciaries that even innocent mistakes that do not misuse plan assets or unjustly enrich the fiduciaries can cause an unexpected and substantial expense to the plan, at least in the context of a less than clear summary plan description (SPD)<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/08/02/when-an-innocent-erisa-administrator-mistake-can-lead-to-money-damages/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/petersonspeierlaw360080219 Dana Peterson and Jared Speier authored an article for Law360 https://www.seyfarth.com:443/publications/petersonspeierlaw360080219 Fri, 02 Aug 2019 00:00:00 -0400 <p> Dana Peterson and Jared Speier authored an August 2 story from Law360, &quot;3 Remote-Worker Considerations For Calif. Employers.&quot;</p> https://www.seyfarth.com:443/publications/PM080119-LE Seyfarth Shaw Policy Matters Newsletter - August 1, 2019 https://www.seyfarth.com:443/publications/PM080119-LE Thu, 01 Aug 2019 00:00:00 -0400 <p> <strong>Senate Confirms EEOC Nominees</strong>. On July 30, the Senate Health, Education, Labor and Pensions Committee approved current EEOC Commissioner Charlotte Burroughs for a second term to a Democrat seat, and Sharon Gustafson as the agency&#39;s general counsel. Burroughs was approved 23-0; Gustafson&rsquo;s vote was 13-10. The full Senate confirmed both by unanimous consent earlier today. The remaining Republican nominee to the Commission, Keith Sonderling (who currently serves as the Deputy Administrator of the Wage &amp; Hour Division), is still pending.<br /> <br /> <strong>Judiciary Advances Graham Asylum Bill.</strong>&nbsp; In a controversial procedure, the Senate Judiciary Committee today approved the Secure and Protect Act of 2019 (<a href="https://www.congress.gov/bill/116th-congress/senate-bill/1494">S. 1494</a>), which is an asylum reform bill introduced by Sen. Graham (R-SC). The Committee passed the bill over objections by Committee Democrats that the Chairman was breaking&nbsp;Committee rules by permitting a vote in the first place. Graham explained prior absences by Committee Democrats blocked action and forced his hand. Perhaps the most important provisions of the bill are that it would (1) require asylum claims to be filed in Mexico or a home country instead of the United States, (2) provide funding for 500 new immigration judges, and (3) allow unaccompanied minors from Central America to be sent back to their home countries. The partisanship here does not bode well for progress on immigration issues (indeed, there are doubts that the bill will pass the full Senate, and Speaker Pelosi is reported to have said that it would not get a vote in the House in any case). Hopefully, this controversy will not add additional reasons for Senators to block consideration of the so-called &ldquo;per country&rdquo; bill (the Fairness for High Skilled Immigrants Act, <a href="https://www.congress.gov/bill/116th-congress/house-bill/1044">H.R. 1044</a>, <a href="https://www.congress.gov/bill/116th-congress/senate-bill/386">S. 386</a>), an earlier version of which was passed by the House. We remain hopeful that the Senate will pass the bill.<br /> <br /> <strong>Another -- Bipartisan -- Paid Leave Proposal.</strong>&nbsp; Sens. Cassidy (R-LA) and Sinema (D-AZ) announced a <a href="https://www.cassidy.senate.gov/imo/media/doc/Cassidy%20Sinema%20Proposal%20FAQs.pdf">new entry</a> into the crowded field of paid leave proposals on the Hill.&nbsp; Their proposal would provide new parents the option of receiving $5,000 following the birth or adoption of a child, with an annual $500 reduction of their Child Tax Credits over the following 10 years.&nbsp; The bill only addresses birth or adoption and would not apply to other types of family or medical leave, which may prove to limit the bill&rsquo;s traction.<br /> <br /> <strong>White House Reviewing Tip Proposal.</strong>&nbsp; The White House Office of Management and Budget Office of Information and Regulatory Affairs (OIRA) is reviewing the Department of Labor&rsquo;s proposed rule on tipped employees. The specific contents of the proposal remain under wraps, but the general description states that &ldquo;the Department will align its regulations with the recent statutory changes [and] revise the existing &lsquo;dual jobs&rsquo; regulation to provide greater clarity . . . regarding an employer&#39;s ability to take a tip credit to satisfy minimum wage obligations for time spent by a tipped employee performing duties that are related to the employee&#39;s tipped occupation.&rdquo;&nbsp; OIRA is one of the last stops for a proposed rule before publication in the Federal Register, so we expect to see the proposal in the next several months.&nbsp;&nbsp;&nbsp;&nbsp;<br /> <br /> <strong>See You in September.</strong> With both the House and Senate in recess for the rest of the summer, <em>Policy Matters</em> will resume publication on September 5, 2019.</p> https://www.seyfarth.com:443/publications/PE080119-LE Illinois - the Newest State to Toughen its Equal Pay Laws with a Robust Salary History Ban https://www.seyfarth.com:443/publications/PE080119-LE Thu, 01 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis</em></strong>: <em>On July 31, 2019, the Illinois Governor J.B. Pritzker signed <a href="http://www.ilga.gov/legislation/BillStatus.asp?DocNum=834&amp;GAID=15&amp;DocTypeID=HB&amp;LegId=115119&amp;SessionID=108&amp;GA=101">HB0834</a> into law, amending the state&rsquo;s Equal Pay Act.&nbsp; The amendments toughen the state&rsquo;s pay equity protections and includes a salary history ban, among other provisions.&nbsp; This adds Illinois to the growing list of states barring employers from inquiring about an applicant&rsquo;s salary history.&nbsp; Former Governor Bruce Rauner vetoed previous attempts to prohibit private employers from requesting applicants&rsquo; previous pay history, but current Governor J.B. Pritzker had publically pledged to sign the bill into law.&nbsp; The new law becomes effective September 29, 2019.</em></p> <p> <strong>Stronger Equal Pay Protections &amp; Tougher Penalties</strong></p> <p> Since we have been tracking equal pay trends across the country, states, counties, and even cities have enacted more stringent equal pay laws.&nbsp; (Click <a href="https://www.seyfarth.com/dir_docs/publications/Seyfarth-50StatePayEquityDesktopReference-2019.pdf">here</a> for our 50-State Pay Equity Desktop Reference, which was updated in June.).&nbsp; Illinois now joins a slew of other states to strengthen its equal pay protections, providing for a robust salary history ban and narrowed affirmative defenses, in addition to protecting wage discrimination on the basis of sex and against African American employees.</p> <p> The amendments change the Illinois Equal Pay Act&rsquo;s requirement that employers pay equally for work that requires &ldquo;<em>equal</em>&rdquo; skill, effort, and responsibility and instead allows comparisons to those with &ldquo;<em>substantially similar</em>&rdquo; skill, effort, and responsibility.&nbsp; This change broadens the scope of equal pay claims under the Act by expanding the universe of potential comparators, putting Illinois in line with California, Massachusetts, New York, New Jersey, Oregon and other jurisdictions</p> <p> The amendments also increase the employer&rsquo;s burden of proof to defeat Equal Pay Act claims by requiring that any differences in pay meet the following criteria:</p> <ul> <li> Not be based on or derived from a differential in compensation based on sex or another protected characteristic,</li> <li> Be job-related and consistent with business necessity, and</li> <li> Accounts for the differential in pay.</li> </ul> <p> Violating the Act&rsquo;s new provisions may now cost employers even more.&nbsp; Prior to the amendments, an employee who suffers a violation of the Act was only entitled to lost wages and attorney&rsquo;s fees and costs.&nbsp; Now that the amendments have become law, violating Illinois&rsquo;s Equal Pay Act becomes riskier than in the past since the statute will now allow an employee to recover lost wages, compensatory damages, special damages not to exceed $10,000, punitive damages and injunctive relief as may be appropriate.&nbsp;</p> <p> An employer is also subject to civil penalties that range from $500 for the first offense to $5,000 for a third or subsequent offense, depending upon the size of the employer, <em>for each employee affected</em>.<br /> <br /> <strong>Pay History Ban</strong></p> <p> Illinois is now the fourteenth state with a salary history ban that applies to applicants for employment.</p> <p> The amendments prohibit Illinois employers from: (i) screening job applicants based on their wage or salary history, (ii) requiring that an applicant&#39;s prior wages satisfy minimum or maximum criteria, and (iii) requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose prior wages or salary.</p> <p> Employers are also prohibited from seeking the salary, including benefits or other compensation or salary history, of a job applicant from any current or former employer, with some exceptions.&nbsp; This prohibition does not apply if a job applicant&rsquo;s wage or salary history is a matter of public record or the job applicant is a current employee and is applying for a position with the same current employer.&nbsp;</p> <p> Employers are free to provide salary information offered in relation to a position and engage in discussions with an applicant about his or her salary expectations.&nbsp; Additionally, the amendments make clear that an employer does not violate the statute when a job applicant voluntarily and without prompting discloses his or her current or prior salary history.&nbsp; But unlike many states that allow employers to consider voluntarily provided information, the Illinois law does not permit employers to consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making an offer of compensation, or in determining future wages, salary, benefits, or other compensation.</p> <p> In short, employers may not ask about salaries, but employees are free to discuss that information as they see fit.&nbsp; &nbsp;</p> <p> <strong>Expanded Anti-Retaliation Provision</strong></p> <p> The amendments also expand retaliation protections under the Act.&nbsp; The Illinois Equal Pay Act has always prohibited retaliation in response to filing a charge related to the Act, giving information in connection with any inquiry relating to any right under the Act or testifying in a proceeding under the Act.&nbsp; However, it now protects an individual who fails to comply with any wage or salary history inquiry.&nbsp;</p> <p> <strong>Pay Transparency Protected</strong></p> <p> Finally, the amendments explicitly protects employees&rsquo; right to discuss wages, salary, benefits, or other compensation. &nbsp;Employers are prohibited from requiring employees to sign any contract or waiver of these rights.&nbsp; Notably, human resource employees, supervisors or any other employee whose job responsibilities require or allow access to another employees&rsquo; wage or salary information are exempted from this provision.</p> <p> <strong>What Should Employers Do?</strong></p> <p> The new law becomes effective September 29, 2019.&nbsp; Employers should review their job applications and other policies and procedures, make any necessary changes, and consider training hiring managers and human resources employees about the amendments.&nbsp; Because of the complex risks associated with implementing changes to comply with the Act, we recommend working closely with legal counsel before making these changes.&nbsp; In addition, employers should consider whether to conduct a comprehensive pay audit as a proactive step in complying with the statute&rsquo;s protections against discrimination in pay on the basis of sex and against discrimination in pay for African American employees.</p> https://www.seyfarth.com:443/publications/EL080119 Federal ADA Title III Lawsuit Numbers Continue to Climb in 2019 https://www.seyfarth.com:443/publications/EL080119 Thu, 01 Aug 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Data from the first six months of 2019 shows a 12% increase over 2018.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/08/federal-ada-title-iii-lawsuit-numbers-continue-to-climb-in-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT080119 The Week in Weed: August 2, 2019 https://www.seyfarth.com:443/publications/TBT080119 Thu, 01 Aug 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/08/the-week-in-weed-august-2-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/PE080119-LE2 New Pay Equity Laws in New York and New Jersey (Again) (Update: New Jersey Law Signed Into Law) https://www.seyfarth.com:443/publications/PE080119-LE2 Thu, 01 Aug 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em> </strong><em>This week, New York state expanded a state Equal Pay Act, making it illegal to pay someone less based on characteristics including race, religion, disability or gender identity, and also other protected characteristics.&nbsp; New York state also passed a salary history ban.&nbsp; Also, just one state over, on June 20, 2019, the New Jersey Legislature passed a salary history ban and New Jersey Governor Phil Murphy is expected to sign the measure into law</em><strong>.</strong></p> <p> <em>UPDATE: The New Jersey law was signed by Governor Murphy on July 25, 2019.&nbsp; The New Jersey law goes into effect on January 26, 2020</em></p> <p> <u><strong>Changes to the New York State Laws</strong></u></p> <p> This week, New York state enacted two new pay equity laws.&nbsp; The first modified the state&rsquo;s equal pay law and the second will ban employers from seeking salary history from applicants or current employees.&nbsp; Key provisions of these laws are summarized below.</p> <p> <u>Previous Modifications to the New York State Pay Equity Law</u></p> <p> In November 2015, New York State became <a href="https://www.seyfarth.com/publications/MA112415-LE">one of the first jurisdictions</a> to pass a pay equity law that was more extensive than the federal equal pay laws. &nbsp;When this law went into effect in January 2016, New York Labor Law &sect; 194 was amended to:</p> <ul> <li> Outline the geographic scope of who could be compared under the pay equity law;</li> <li> Put the burden on employers to affirmatively demonstrate that any pay differences are based on one or more of a limited number of factors. The permitted reasons for differences in pay are: <ul> <li> A seniority system;</li> <li> A merit system;</li> <li> A system that measures earnings by quantity or quality of production; or</li> <li> A bona fide factor other than sex such as education, training, or experience.&nbsp; This bona fide factor exception will replace the &ldquo;any other factor other than sex&rdquo; language in the current law, and will apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a &ldquo;business necessity&rdquo; (i.e., the factor relied upon effectively fulfills the business purpose it is supposed to serve).&nbsp; But this defense will not apply if there is an employment practice that causes a disparate impact, or if the employer refuses to adopt a neutral alternative practice that would serve the same business need.</li> </ul> </li> <li> Prohibit employers from prohibiting employees from inquiring about, discussing, or disclosing wage information, and</li> <li> Increase the liquidated damages for willful violations of &sect; 194 to 300% of wages due.</li> </ul> <p> These prohibitions were expanded with the amendment of Section &sect;194, which was signed by Governor Cuomo this week.</p> <p> <u>Expanded New York State Pay Equity Law</u></p> <p> The revisions to <a href="https://www.seyfarth.com/dir_docs/publications/S5248B.pdf">New York Labor Law &sect; 194</a><strong>&nbsp;</strong>signed by Governor Cuomo on Wednesday, July 10, 2019, will expand upon the equal pay law in meaningful ways.</p> <p> First, the New York state law makes it illegal pay someone less based on characteristics beyond just sex including age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability,&nbsp; predisposing genetic characteristics, familial status, marital status, or domestic violence victim status.&nbsp; In this regard, New York state will join other jurisdictions, like <a href="https://www.seyfarth.com/publications/MA040218-LE">New Jersey</a> and <a href="https://www.seyfarth.com/publications/MA051019-LE">Washington State</a>, to have a very expansive view of who is protected under the pay laws.&nbsp;</p> <p> Second, the New York equal pay act was amended to allow employees can be compared even if they do not hold the &ldquo;same&rdquo; job. The new law would require only a showing that the employees are engaged in &ldquo;substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.&rdquo;&nbsp; Like similar expansions in <a href="https://www.seyfarth.com/dir_docs/publications/2019-Cal-Peculiarities.pdf">California</a>, <a href="https://www.seyfarth.com/publications/MA040218-LE">New Jersey</a>, <a href="https://www.seyfarth.com/publications/OMM080116-LE2">Massachusetts</a>, and elsewhere, this will increase the scope of who can be compared under these pay equity laws.&nbsp;</p> <p> In combination, these provisions further expand upon the protections under the federal pay equity laws and will make it more challenging, and more important, for employers to be attuned to how employees are paid.</p> <p> <u>New York State Salary History Ban</u></p> <p> The expanded pay equity law was not the only law signed into law on Wednesday in New York state.&nbsp; Governor Cuomo also signed into law a salary history ban, adding a new section to <a href="https://www.seyfarth.com/dir_docs/publications/NY_2019_Ch_94.pdf">New York Labor Law &sect; 194-a</a>.</p> <p> With the passage of this law, New York State will join many other states and jurisdictions with a salary history ban that applies to applicants for employment.<a href="#_ftn1" name="_ftnref1" title="">[1]</a></p> <p> Like many of the salary history bans the New York State law will:</p> <ul> <li> Forbid employers from orally or in writing seeking, requesting, or requiring the wage or salary history from an applicant or current employee as a condition to be interviewed, or as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion. Employers also cannot seek wage or salary history from a current or former employer, current or former employee, or agent of the applicant or current employee&#39;s current or former employer.</li> <li> Prohibit employers from relying on the wage or salary history of an applicant in determining whether to offer employment to such individual or in determining the wages or salary for such individual.</li> <li> Prohibit employers from refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee based upon prior wage or salary history, the refusal to provide the same, or because the individual filed a complaint with the department alleging a violation of the law.</li> </ul> <p> What is different from some of the other salary history bans -- for example, in California, is that this law also applies to current employees.</p> <p> <u>Exceptions to the New York Salary History Ban Law</u></p> <p> While employers are forbidden to ask about prior wages, the law does not prevent an applicant or current employee from voluntarily, and without prompting, disclosing or verifying wage or salary history, including but not limited to for the purposes of negotiating wages or salary.</p> <p> Further, the New York state law allows employers to confirm wage or salary history if, at the time an offer of employment with compensation is made, the applicant or current employee responds to the offer by providing prior wage or salary information to support a wage or salary higher than offered by the employer.</p> <p> Finally, the law makes clear that it does not supersede any federal, state or local law enacted prior to the effective date of this section that requires the&nbsp; disclosure or verification of salary history information to determine an employee&#39;s compensation.</p> <p> <u>Damages Under New York State Salary History Ban</u></p> <p> The law provides a private right of action to applicants or current or former employee. The court may award injunctive relief as well as&nbsp; reasonable attorneys&#39; fees to a plaintiff who prevails in a civil action brought under this paragraph.</p> <p> The New York pay equity law goes into effect on October 8, 2019 and the New York state salary history ban law goes into effect on January 6, 2020.</p> <p> <strong><u>The New Jersey Salary History Ban Law</u></strong></p> <p> Just across the border, New Jersey made modifications to its state pay equity laws.</p> <p> More than a year after passing the sweeping pay equity legislation known as the <a href="https://www.seyfarth.com/publications/MA040218-LE">&ldquo;Diane B. Allen Equal Pay Act,&rdquo;</a> the New Jersey Legislature passed <a href="https://www.seyfarth.com/dir_docs/publications/1094_U1.PDF">Assembly Bill 1094</a><strong>&nbsp;</strong>on June 20, 2019, which would amend existing law to prohibit employers from screening applicants based on salary history, requiring applicants to satisfy any minimum or maximum salary criteria, or considering an applicant&rsquo;s refusal to volunteer salary history information in any employment decisions. The Act also provides that a violation of these provisions would be an unlawful employment practice under the Law Against Discrimination (&ldquo;LAD&rdquo;), if the applicant is a member of a protected class.</p> <p> This is the second attempt to pass salary history legislation in New Jersey.&nbsp; On July 31, 2017, former Governor Chris Christie vetoed a similar bill passed by the legislature. Governor Phil Murphy was widely expected to sign A1094 into law. On January 16, 2018, Governor Murphy signed an executive order banning salary history inquiries by state governmental entities. In doing so, he urged the legislature to pass a statewide ban on the practice and pledged to sign any such legislation that landed on his desk.&nbsp;And Governor Murphy signed the salary history bill impacting private employers into law on July 25, 2019.</p> <p> Key provisions of the Act are summarized below.</p> <p> <u>Unlawful to Screen Any Applicant Based on Salary History in New Jersey</u></p> <p> Like in many other jurisdictions, as noted above, the New Jersey Act prohibits an employer from screening any job applicant based on salary history, including but not limited to wages, salaries, or benefits.</p> <p> It would also prohibit an employer from requiring an applicant&rsquo;s salary history to satisfy any minimum or maximum criteria.</p> <p> Additionally, the Act would prohibit an employer from considering an applicant&rsquo;s refusal to volunteer salary history in any employment decisions. Any violation by an employer of the aforementioned salary history inquiry prohibitions would also be an unlawful employment practice in violation of the LAD if the applicant is a member of any of the protected classes enumerated in the LAD.</p> <p> <u>Exceptions to the New Jersey Salary History Ban Law</u></p> <p> The New Jersey Act contains several notable exceptions.</p> <p> First, if an applicant voluntarily provides an employer with salary history information, the employer would be allowed to:</p> <ul> <li> Consider the applicant&rsquo;s salary history in determining compensation for the applicant; and</li> <li> Verify the salary history information voluntarily provided.</li> </ul> <p> Second, <em>after</em> an offer of employment that includes an explanation of compensation has been extended to an applicant, an employer would be allowed to request that the applicant provide a written authorization to confirm the previous salary history.</p> <p> Third, employers are not prohibited from acquiring salary history information that is publicly available, but shall not retain or consider that information when determining the salary, benefits, or other compensation of the applicant unless the applicant voluntarily, without employer prompting or coercion, provides the employer with salary history. Importantly, an applicant&rsquo;s refusal to volunteer this information may not be considered by the employer in any employment decisions.</p> <p> Further, the provisions of the Act would not apply to:</p> <ul> <li> Applications for internal transfer or promotion under the same employer;</li> <li> An employer&rsquo;s use of previous knowledge acquired as a result of an applicant&rsquo;s prior employment with the employer;</li> <li> Actions taken by an employer pursuant to a federal law or regulation that requires disclosure, verification, or use of salary history for employment purposes;</li> <li> An employer&rsquo;s attempt to obtain or verify an applicant&rsquo;s disclosure of non-salary-related information when conducting a background screening, provided that the employer specifies that salary history is not to be disclosed when requesting information for the background check. However, if salary history is nonetheless disclosed, the employer would be prohibited from retaining the information or considering it when determining compensation for the applicant; or</li> <li> An employer&rsquo;s inquiries regarding an applicant&rsquo;s previous experience with incentive and commission plans, provided that the compensation package for the position for which the applicant is being considered includes an incentive or commission component and the employer does not seek information regarding the applicant&rsquo;s previous earnings in connection with any incentive or commission plan. &nbsp;</li> </ul> <p> No provision of the Act would prohibit employers from:</p> <ul> <li> Offering an applicant information regarding compensation set by law or a collective bargaining agreement, and paying the applicant according to this information if hired;</li> <li> Including a salary history inquiry on a job application if the employer does business, employs persons, or takes applications in at least one state besides New Jersey, provided it is permissible in that state and that the application contains a notice immediately preceding the inquiry that instructs New Jersey applicants not to answer</li> </ul> <p> <u>Civil Penalties For Violations of the New Jersey Salary History Ban</u></p> <p> An employer that violates the Act would be liable for a civil penalty not to exceed:</p> <ul> <li> $1,000 for the first violation;</li> <li> $5,000 for the second violation; and</li> <li> $10,000 for each subsequent violation.</li> </ul> <p> Interestingly, the Act makes clear that an award of neither attorney&rsquo;s fees nor punitive damages would be available as a remedy for any violation of the salary history inquiry prohibition.</p> <p> The law goes into effect on January 26, 2020.</p> <p> <u><strong>What&rsquo;s Next for New York or New Jersey Employers?</strong></u></p> <p> These developments follow the trend of the equal pay movement taking place in cities and states nationwide. In light of New York and New Jersey&rsquo;s focus on equal pay, employers should be mindful of these new restrictions and evaluate how the new legislation would impact their hiring practices.</p> <p> &nbsp;</p> <div> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> Fourteen states (Alabama*, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, New Jersey, Oregon, Vermont, Washington, and now New York), nine cities or counties (San Francisco, CA, Kansas City, MO, New York City, NY, Albany County, NY, Suffolk County, NY, Westchester County, NY, Cincinnati, OH, Toledo, OH, and Philadelphia, PA) and one Territory (Puerto Rico) have passed salary history bans.&nbsp; *Note: The Alabama and Philadelphia do not outright ban soliciting salary history but do restrict its use.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/OMM073119-LE If Pain, Yes Gain—Part 72: New Lawsuit Places Dallas Paid Sick Leave Ordinance on the Chopping Block https://www.seyfarth.com:443/publications/OMM073119-LE Wed, 31 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Just last week, San Antonio agreed to delay implementation of its paid sick leave ordinance until at least December 1, 2019.&nbsp; Now, as of yesterday, a lawsuit has been filed challenging the Dallas paid sick leave ordinance.&nbsp; While the Dallas ordinance is still currently scheduled to go into effect on August 1, 2019 for most employers, events are unfolding quickly. &nbsp;Employers should watch developments carefully to see whether the Dallas paid sick leave ordinance will be similarly delayed.</em></p> <p> Over the past several months, there has been a new paid sick leave (&ldquo;PSL&rdquo;) development in Texas every few weeks.&nbsp; And in the past two weeks&mdash;with the August 1 deadline for implementation in Dallas and San Antonio quickly approaching&mdash;the developments have come in droves.</p> <p> As we previously reported, Austin, San Antonio, and Dallas all passed PSL ordinances in the last year or so.&nbsp; The <a href="https://www.seyfarth.com/publications/OMM112118-LE">Austin</a> PSL ordinance was halted by the courts shortly before implementation.&nbsp; The case is currently on appeal to the Texas Supreme Court.&nbsp;</p> <p> Despite <a href="https://www.seyfarth.com/publications/MA082118-LE">San Antonio</a> and <a href="https://www.seyfarth.com/publications/MA050719-LE">Dallas</a> passing their own PSL ordinances, Texas employers thought a legislative fix was coming, namely in the form of preemption legislation that would prevent Texas municipalities from passing their own PSL ordinances.&nbsp; <a href="https://www.seyfarth.com/publications/OMM053119-LE3">That fix failed</a>, however, and the Texas Legislature ended its 2019 session without passing any such legislation.&nbsp; Accordingly, employers in San Antonio and Dallas spent the first half of the summer preparing for their cities&rsquo; respective PSL requirements.</p> <p> Last week, after a lawsuit was filed challenging the constitutionality of its PSL ordinance, <a href="https://www.seyfarth.com/publications/OMM072419-LE">San Antonio agreed to delay</a> implementation of the ordinance until at least December 1, 2019.&nbsp; This left Dallas as the only Texas municipality with an enacted PSL ordinance that remains scheduled to go into effect August 1, 2019.</p> <p> On Tuesday, July 30, 2019, businesses filed a federal lawsuit in the Eastern District of Texas Sherman Division challenging the Dallas PSL ordinance on many of the same grounds used to successfully halt PSL in Austin and San Antonio.&nbsp; The plaintiff businesses asked the court to postpone the Dallas ordinance&rsquo;s August 1, 2019 effective date, and ultimately to declare the ordinance unconstitutional and unenforceable.&nbsp; Whether the Dallas PSL ordinance&#39;s August 1 effective date will be delayed remains to be seen. Employers impacted by the Dallas ordinance should continue to monitor develops carefully.&nbsp; And we, of course, will provide further updates as they become available.</p> <p> To stay up-to-date on Paid Sick Leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to sickleave@seyfarth.com.</p> https://www.seyfarth.com:443/publications/TBT073019 Cannabis Industry: The Latest Takeaways https://www.seyfarth.com:443/publications/TBT073019 Tue, 30 Jul 2019 00:00:00 -0400 <p> Last week, several members of Seyfarth&rsquo;s cannabis practice attended CannaVest West and the Cannabis Business Summit &amp; Expo. Industry expert panels discussed market trends, private equity, venture capital, family offices, and banking, as well as commercial real estate, which I had the opportunity to moderate.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/cannabis-industry-the-latest-takeaways/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA073019-RE Climate Mobilization Act https://www.seyfarth.com:443/publications/CA073019-RE Tue, 30 Jul 2019 00:00:00 -0400 <p> On April 18, 2019, the New York City Council passed legislation, referred to as the Climate Mobilization Act, which includes bills designed to aggressively reduce carbon emissions produced by New York City&rsquo;s buildings. According to a study conducted by the New York City Mayor&rsquo;s Office, buildings currently account for almost 70% of the city&rsquo;s green-house gas emissions. The bills set heavy fines for building owners&rsquo; non-compliance. Notwithstanding strong objections from the real estate industry, the bills found overwhelming support in the New York City Council and passed with a vote of 45-2.</p> <p> To comply with the bills, Covered Buildings (defined as buildings that exceed 25,000 gross square feet, two or more buildings on the same tax lot that together exceed 50,000 gross square feet, or two or more condominium buildings governed by the same board of managers and that together exceed 50,000 gross square feet) will need to be retrofitted with conservation features such as new windows and efficient heating systems and insulation so that, beginning on May 1, 2024, Covered Buildings&rsquo; emissions are reduced below the prescribed levels, all in an effort to reduce emissions by 40% below 2005 levels by the year 2030 and by 80% below 2005 levels by the year 2050. Owners of Covered Buildings that fail to comply by May 1, 2024 will face hefty annual fines upon filing annual certifications on May 1, 2025. Building owners or managers will have to submit annual building emissions assessments to the newly created Office of Building Energy and Emissions Performance on May 1 of each year certifying compliance for the previous twelve month period.</p> <p> Penalties will be costly for non-compliant owners, namely, $268 per metric ton of emissions above the permitted emissions for the reporting year. Additionally, late-filers will face monthly penalties in the amount of $.50 per gross square footage of the covered building, subject to extension (where, notwithstanding the use of its good faith efforts, the building owner is unable to timely file the required report).</p> <p> All may not be lost for a building that fails to meet the emissions caps &mdash; the bills create alternative, but sometimes costly, pathways to compliance. In some limited circumstances, adjustments will be allowed for buildings which exist on the effective date of the new law or for which a permit for construction was issued prior to such date. Additionally, the purchase of certain greenhouse gas offsets and renewable energy credits and the use of clean distributed energy resources can be used to offset a building&rsquo;s reported annual emissions. The bills also contain numerous exceptions, including for certain city-owned buildings, NYCHA buildings, rent regulated accommodations, buildings that are three stories or less where the HVAC systems and hot water heating systems are held by each individual dwelling unit owner and with no HVAC system or hot water system serving more than two units. The bills also include exceptions based on the potential burdens of compliance, which will be assessed on a case-by-case basis.</p> <p> Among the specific bills included in the Act are the following:</p> <p> <strong>Int. 1253 - Building Retrofits (enacted as local law 97)&nbsp;</strong></p> <p> This bill establishes the Office of Building Energy Performance, sets greenhouse gas emissions limits for existing buildings and expands existing retro-commissioning requirements to certain buildings. It also creates an online portal for the submission of annual building emissions assessments by owners of Covered Buildings.</p> <p> This bill also creates an advisory group to study and set future emissions limits and create a carbon trading scheme that can be utilized by building owners to offset some carbon emissions or monetize savings produced by their own Covered Buildings.</p> <p> <strong>Int. 1252 - Property Assessed Clean Energy (PACE) Financing (enacted as local law 96)</strong></p> <p> This bill establishes a private sustainable energy loan program to provide qualifying building owners with loans to help cover the costs of renewable energy systems, energy efficiency improvements, related energy audits and renewable energy system feasibility studies. These loans will generally require no money down, the term of the loans will be the estimated useful life of such systems or improvements and the interest rate will be fixed at the time of the making of the loan. The assessments relating to these loans will enjoy a lien priority similar to real estate taxes and, as such, will have priority over a recorded mortgage.</p> <p> <strong>Int. 1032 - Green Roofs for New Construction (enacted as local law 94)</strong></p> <p> This bill requires that the rooftops of new buildings in occupancy groups B, I-4, M or S-2 (as defined in Section BC 302 of the New York City building code) and existing buildings which are replacing their roof structure be covered in plants (to filter pollutants and add agricultural space), solar panels (to generate renewable energy generation and reduce air pollution), small wind turbines (to generate heat and electric power in an environmentally conscious manner) or a combination thereof.</p> <p> <strong>Int. 276-A - Green Roofs on Smaller Buildings (enacted as local law 92)</strong></p> <p> This bill adjusts the &ldquo;green roof&rdquo; requirements established by Int. No. 1032-A for buildings five stories or less and provides for adjusting the requirements of Int. Non 1032-A for certain buildings (those receiving certain tax exceptions or owned by HPD) for a five year period.</p> <p> <span style="font-size:14px;"><strong>The Path Forward</strong></span></p> <p> According to the Real Estate Board of New York, the total cost of these deep retrofits city-wide could be as much as $4 billion, and will fall mainly on the owners of commercial buildings and condominiums and cooperatives, but may also be passed through, if permitted under applicable building governing documents by way of monthly or special assessments, to tenants and shareholders.</p> <p> Although the exact cost and path forward for many remains unclear (for example, the exact criteria for some exemptions and the mechanism and cost for purchasing and selling offsets or credits remains undefined), these new laws are poised to be the largest disruptor in New York City real estate since perhaps the enactment of the Commissioners&rsquo; Plan of 1811, which created Manhattan&rsquo;s famous grid system.</p> https://www.seyfarth.com:443/publications/EL073019 Chicago Passes Expansive Fair Workweek Law https://www.seyfarth.com:443/publications/EL073019 Tue, 30 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Last week the Chicago City Council passed the Chicago Fair Workweek Ordinance, arguably the most expansive law of its kind. When the law takes effect in July 2020, it will require covered employers to publish employee schedules at least ten days in advance and impose premium pay requirements for schedule changes after that time. The law is noteworthy for numerous reasons, including the fact that it covers not just retailers, restaurants, and hotels, but also industries not typically targeted by fair workweek measures, such as health care, manufacturing, building services, and warehouse services. Employers operating in Chicago should act now to begin formulating a plan to ensure compliance and minimize impacts.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/chicago-passes-expansive-fair-workweek-law/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/lorberbloomberglaw073019 Lawrence Lorber quoted in Bloomberg Law https://www.seyfarth.com:443/news/lorberbloomberglaw073019 Tue, 30 Jul 2019 00:00:00 -0400 <p> Lawrence Lorber was quoted in a July 30 story from Bloombreg Law, &quot;Civil Rights Agency Top Lawyer Nominee to Get First Vote.&quot; Lorber said that Gustafson brings another perspective to the commission, and that&rsquo;s not a bad background.</p> https://www.seyfarth.com:443/news/resurveybisnow072919 Seyfarth's Real Estate Market Sentiment Survey referenced in Bisnow https://www.seyfarth.com:443/news/resurveybisnow072919 Mon, 29 Jul 2019 00:00:00 -0400 <p> Seyfarth&#39;s Real Estate Market Sentiment Survey was referenced in a July 29 story from Bisnow, &quot;SAFE Banking Act Would Protect CRE In Cannabis Deals.&quot; According to Seyfarth&rsquo;s fourth annual Real Estate Market Sentiment Survey published earlier this year, 85% of CRE leaders will not invest in the cannabis industry in 2019, since there is still too much uncertainty for their liking. You can read the <a href="https://www.bisnow.com/national/news/industrial/safe-banking-act-would-protect-cre-in-cannabis-deals-100097">full article here</a>.</p> https://www.seyfarth.com:443/publications/rodriguezwapo072919 Leon Rodriguez authored an op-ed in the Washington Post https://www.seyfarth.com:443/publications/rodriguezwapo072919 Mon, 29 Jul 2019 00:00:00 -0400 <p> Leon Rodriguez authored a July 29 op-ed in the Washington Post, &quot;The Trump administration is making legal immigration harder, too.&quot; You can read the <a href="https://www.washingtonpost.com/outlook/2019/07/29/trump-administration-is-making-legal-immigration-harder-too/?noredirect=on&amp;utm_term=.9d9a0942b0bb">full op-ed here</a>.</p> https://www.seyfarth.com:443/publications/CA072919-EB-5 USCIS Publishes EB-5 Modernization Rule: the Impact on the EB-5 Program https://www.seyfarth.com:443/publications/CA072919-EB-5 Mon, 29 Jul 2019 00:00:00 -0400 <div> <div> <em><strong>Seyfarth Synopsis: </strong>On July 24, 2019, U.S. Citizenship and Immigration Services (USCIS), the immigration-benefits component of the Department of Homeland Security (DHS),&nbsp; published a final regulation on &ldquo;EB-5 Immigrant Investor Program Modernization&rdquo; (the &ldquo;Rule&rdquo;) to reform the EB-5 program in the Federal Register. Absent successful court challenges, or the passage by Congress of EB-5 legislation, the Rule will take effect on November 21, 2019. The Rule makes pronounced changes to the EB-5 program, including a significant increase in the investment threshold, conferral of exclusive authority to USCIS to designate Targeted Employment Areas (TEAs), and retention of priority dates for petitioners. <a href="https://www.federalregister.gov/documents/2019/07/24/2019-15000/eb-5-immigrant-investor-program-modernization" target="_blank">The text of the Rule can be found here</a>.</em></div> <div> &nbsp;</div> <div> &nbsp;</div> <div> The changes imposed by the Rule include the following:</div> <div> &nbsp;</div> <ul> <li> Raising minimum non-TEA investment by 80% &ndash; from $1 million to $1.8 million with automatic adjustments based on increases in the Consumer Price Index for All Urban Consumers (CPI-U) every five years;</li> <li> Increasing the TEA investment by 80% &ndash; from $500,000 to $900,000. In the event of subsequent adjustment to the minimum non-TEA investment, the minimum TEA investment will be automatically adjusted to remain at 50% of minimum non-TEA investment, maintaining the current ratio between the 2 investments;</li> <li> Stripping states&rsquo; authority to designate high-unemployment TEAs, thereby giving an exclusive authority to USCIS to designate TEAs;</li> <li> Changing the definition of which geographical locations qualify for a TEA;</li> <li> Allowing an EB-5 investor to retain the priority date (for purposes of the immigrant visa quota) in the event that, e.g., a regional center is terminated, by filing a new Form I-526 petition and showing that there are no material changes to their investment other than securities law disclosure obligations arising because of the Rule&rsquo;s new requirements; and</li> <li> Allowing the derivative family members (i.e. the spouses and children) of an EB-5 investor to file their own Form I-829 petition if they were not included in the principal investor&rsquo;s petition.</li> </ul> <div> &nbsp;</div> <div> The changes in the requirements for qualifying as a TEA include the following:</div> <div> &nbsp;</div> <ul> <li> Permitting cities and towns with a population of 20,000 or more outside of a Metropolitan Statistical Area to potentially qualify as TEAs based on high levels of unemployment;</li> <li> If a new commercial enterprise (&ldquo;NCE&rdquo;) is located in multiple census tracts, allowing the inclusion of contiguous census tracts in which the NCE is principally doing business so long as the weighted average of the unemployment rate for the tracts included is at least 150% of the national average; and</li> <li> Allowing the inclusion of both contiguous census tracts in which the NCE is principally doing business and any adjacent tracts so long as the weighted average of the unemployment rate for the tracts included is at least 150% of the national average;</li> <li> The principal effect of the changes in the TEA designation process is likely to be that obtaining a TEA designation will become more both more uniform, with a single agency (USCIS) responsible for TEA designations, and more difficult in that there will be greater restrictions on the census tracts that can be used to comprise a TEA.</li> </ul> <div> &nbsp;</div> <div> Given these major changes, such as a notable increase in the minimum investment amount, the change in the authority to designate TEAs, and the narrowed down definition of TEAs, it is foreseeable that there will be an influx of EB-5 applications in an attempt to be grandfathered under the current rules. This will certainly result in further application processing delays and possibly the further tightening of standards by USCIS.</div> <div> &nbsp;</div> <div> The Rule does not impose a moratorium on the filing of I-526 petitions prior to the effective date of the Rule. In fact, the Rule expressly provides that I-526 petitions filed prior to the effective date will be adjudicated based on the eligibility standards in effect as of the date of filing the petition. Accordingly, investors should take care both to invest and file their I-526 petition prior to November 21. Investment alone will not suffice.</div> <div> &nbsp;</div> <div> The Rule further provides that there will be no loss of an investor&rsquo;s immigrant visa priority date if there are any amendments to the project documents that may be required as a result of investor disclosures under the securities laws due to the changes in the EB-5 program implemented by the Rule. It remains to be seen how USCIS will apply this provision since the agency has kept in place its existing material-change policy which triggers a loss of priority date if a new I-526 petition is required.</div> <div> &nbsp;</div> <div> A quick search on the internet shows many regional centers, and attorneys, are advocating the rapid filing of skeletal petitions in order to invest with the lower amount. A skeletal filing is made with very little information included on the source and trace of EB-5 funds by the investor. The 120-day delay between publication and implement of the Rule should make it easier to file a more fulsome application before the new standards take effect. Investors should be forewarned that the skeletal-submission approach may meet with rejection by USCIS (for lack of sufficient initial evidence) or trigger the issuance of a burdensome or impossible-to-fulfill USCIS request for additional evidence.</div> <div> &nbsp;</div> <div> To the extent, however, that investors find themselves with no choice but to file something without all the relevant information and documentation, investors should at least take care to include any evidence of lawful source of funds in order to avoid requests for additional evidence from the USCIS or even denials. It is also critical to review the potential source of funds with a qualified attorney to identify any potential issues with respect to either the ability to verify the source of funds or the compliance of the proposed source of funds with the requirements of the EB-5 Program as it is impossible to make changes once the investment and filing are made.</div> <div> &nbsp;</div> <div> There is sometimes an alternative source of funds available which may be easier to satisfy the EB-5 requirements than the original source considered. A dialogue with an expert could ferret that information out. For example, an investor considering the use of a gift from a family member may not understand they will need to detail the legal source of those funds, which may prove more difficult than first contemplated as the gift or may not be willing or able to provide the level of detail in terms of documentation the USCIS is expecting to see.</div> <div> &nbsp;</div> <div> In the context of a regional center investment, investors should be careful to diligence projects, including a detailed review of the offering documents, economic analysis and business plan, in order to protect their investment and ability to obtain permanent residence. Consideration should be given as to the impact of a slowdown of investment capital coming in to the project after the thresholds are increased, leaving projects at risk of not being completed or delayed because of inadequate funds. Investors should inquire about that impact, if any.</div> <div> &nbsp;</div> <div> Of course, this final regulatory action was preceded by several years of activity on Capitol Hill in pursuit of changes to the EB-5 program, many opposed and blocked by industry, but which are reflected in the final regulation. It&rsquo;s possible that dissatisfaction with the Rule will create pressure on the Hill to revisit many of these provisions and result in a compromise which would trump the Rule.&nbsp; However, it&rsquo;s a lot easier to kill something on the Hill than to get it enacted. Further, it is very unclear how the replacement of Representative Bill Goodlatte (R-VA.), who was much involved in in past legislative EB-5 debates, as chair of the Judiciary Committee with Representative Jerry Nadler (D-NY) affects the Hill&rsquo;s dynamics. Needless to say, Chairman Nadler also has other priorities attracting his attention at this time.</div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/TS072919 Upcoming Webinar! Enforcement of Non-Competes: Increasing Difficulty Depending on State https://www.seyfarth.com:443/publications/TS072919 Mon, 29 Jul 2019 00:00:00 -0400 <p> On Tuesday, August 20, 2019, at 12:00 p.m. Central Time, in Seyfarth&rsquo;s fourth installment of its 2019 Trade Secrets Webinar Series, Seyfarth attorneys will focus on the enforcement of non-competes and how the difficulty of enforcement of these restrictive covenants vary by state. Any company that seeks to use non-compete and non-solicitation agreements to protect its trade secrets, confidential information, client relationships, goodwill, or work forces needs to stay informed of the varied and ever-evolving standards in each state.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/noncompete-enforceability/upcoming-webinar-enforcement-of-non-competes-increasing-difficulty-depending-on-state/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP072919 Minimum Wage Increases Across the Pride Lands https://www.seyfarth.com:443/publications/CP072919 Mon, 29 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The great California patchwork of minimum wage ordinances might have employers feeling full of matatas, but no worries! Seyfarth is here to explain the circle of life of these laws so that even the slowest hyena could follow.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/07/29/minimum-wage-increases-across-the-pride-lands/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/moradygn072819 Ilany Morady quoted in GineersNow https://www.seyfarth.com:443/news/moradygn072819 Sun, 28 Jul 2019 00:00:00 -0400 <p> Ilana Morady was quoted in a July 28 story from GineersNow, &quot;Sustainable Energy Generation Life Hazards,&quot; on how workers in renewable energy are exposed to the risks, such as falls, fires, electrical current, confined space hazards, etc. Morady said that one of the biggest challenges with these industries is their location. You can read the <a href="https://gineersnow.com/magazines/renewables-magazines/sustainable-energy-generation-life-hazards">full article here</a>.</p> https://www.seyfarth.com:443/news/adapns072619 Seyfarth's ADA statistics referenced in Public News Service https://www.seyfarth.com:443/news/adapns072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a July 26 story from Public News Service, &quot;ADA Marks 29 Years with Room for Improvement.&quot; Research conducted by Seyfarth found website-accessibility lawsuits rose from about 800 in 2017 to 22-hundred in 2018. You can read the <a href="https://www.publicnewsservice.org/2019-07-26/disabilities/ada-marks-29-years-with-room-for-improvement/a67278-1">full article here</a>.</p> https://www.seyfarth.com:443/news/billowsccr072619 Tracy Billows quoted in the Cook County Record https://www.seyfarth.com:443/news/billowsccr072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Tracy Billows was quoted in a July 26 story from the Cook County Record, &quot;Chicago scheduling ordinance opens employers to new lawsuit risk, starting next year.&quot; Billows said that the Chicago ordinance will require attention from employers who are not accustomed to being covered by similar measures in other areas of the country. You can read the <a href="https://cookcountyrecord.com/stories/512797955-chicago-scheduling-ordinance-opens-employers-to-new-lawsuit-risk-starting-next-year">full article here</a>.</p> https://www.seyfarth.com:443/news/babsonlaw360072619 Marshall Babson quoted in Law360 https://www.seyfarth.com:443/news/babsonlaw360072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Marshall Babson was quoted in a July 26 story from Law360, &quot;5 Cases To Watch At The NLRB.&quot; On the issue of protesting with the rat, Babson said that the rat acts as a picket because it signifies a labor dispute.</p> https://www.seyfarth.com:443/publications/ADA072619 FEDERAL ADA TITLE III LAWSUIT NUMBERS CONTINUE TO CLIMB IN 2019 https://www.seyfarth.com:443/publications/ADA072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Data from the first six months of 2019 shows a 12% increase over 2018.<br /> <br /> <a href="https://www.adatitleiii.com/2019/07/federal-ada-title-iii-lawsuit-numbers-continue-to-climb-in-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH072619 It’s Easy to See: 20/20 a Clear Win for Employers in the Fifth Circuit https://www.seyfarth.com:443/publications/WH072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In 20/20 Communications, Inc. v. Crawford, the Fifth Circuit joined eight other circuits in holding that the availability of class arbitration is a &ldquo;gateway&rdquo; issue for courts, not arbitrators, to decide&mdash;unless there is &ldquo;clear and unmistakable language&rdquo; in the arbitration agreement to the contrary. No circuit court has ruled to the contrary, and only the First, Second, and Tenth Circuits have yet to weigh in. In 20/20 Communications, the latest decision to address this issue, the district court, over the employer&rsquo;s objection, had held that the arbitration agreement authorized the arbitrator, rather than the court, to determine the class arbitrability issue.<br /> <br /> <a href="https://www.wagehourlitigation.com/arbitration/its-easy-to-see-20-20-a-clear-win-for-employers-in-the-fifth-circuit/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL072619 The Saga Continues: San Antonio Delays Paid Sick Leave Ordinance Until December 1; Dallas Ordinance Remains Scheduled To Begin August 1—At Least For Now https://www.seyfarth.com:443/publications/EL072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On Wednesday, July 24, 2019, approximately one week before San Antonio&rsquo;s paid sick leave ordinance was scheduled to go into effect for most employers, a Texas state court stayed implementation of the city&rsquo;s paid sick leave ordinance until at least December 1, 2019. In the meantime, the Dallas paid sick leave ordinance remains scheduled to go into effect on August 1, 2019 for most employers.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/the-saga-continues-san-antonio-delays-paid-sick-leave-ordinance-until-december-1-dallas-ordinance-remains-scheduled-to-begin-august-1-at-least-for-now/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA072619-CORP New Illinois Law Eliminates Franchise Tax, Offers Tax Amnesty https://www.seyfarth.com:443/publications/CA072619-CORP Fri, 26 Jul 2019 00:00:00 -0400 <div> Illinois recently enacted legislation that offers significant benefits to delinquent taxpayers and corporations doing business in Illinois. The new legislation phases out the Illinois franchise tax over a four year period beginning in 2020, and it establishes an amnesty program for unpaid franchise taxes and license fees owed to the Illinois Secretary of State and for unpaid taxes owed to the Illinois Department of Revenue.</div> <div> &nbsp;</div> <div> <strong>Franchise Tax Repeal</strong></div> <div> &nbsp;</div> <div> The Illinois franchise tax is imposed on domestic and foreign corporations for the privilege of doing business in Illinois. Its repeal is welcome news to many who have long criticized the way the tax is calculated, the administrative burdens it places on taxpayers, and its traps for the unwary.&nbsp;</div> <div> &nbsp;</div> <div> The franchise tax is calculated as a percentage of the amount of a corporation&rsquo;s paid-in capital that is allocated to Illinois. The amount of a corporation&rsquo;s paid-in capital that is allocated to Illinois is based on the percentage of the corporation&rsquo;s total property and total business that is allocated to Illinois. A corporation&rsquo;s paid-in capital is generally the amount of consideration paid to the corporation in connection with the issuance of shares (less certain expenses) plus the amount of other shareholder contributions to the corporation, minus certain reductions. Unfortunately, once established it can be difficult for a corporation to reduce its paid-in capital for franchise tax purposes. A corporation may reduce its paid-in capital only (i) by the amount of paid-in capital represented by shares acquired and cancelled by the corporation, but only to the extent of the amount paid by the corporation for such shares, (ii) by dividends paid on preferred shares, (iii) by distributions as liquating dividends, or (iv) pursuant to an approved reorganization in bankruptcy that specifically directs a reduction in paid-in capital.</div> <div> &nbsp;</div> <div> Given the difficulty in reducing paid-in capital, a corporation with significant paid-in capital can be stuck paying high franchise taxes even for years in which the corporation performs poorly and even if the value of the corporation drops significantly from when it received its paid-in capital. This is just one of the franchise tax traps that have surprised corporations doing business in Illinois.</div> <div> &nbsp;</div> <div> Fortunately, the new legislation phases out the franchise tax beginning in 2020. The new law exempts the first $30 of a corporation&rsquo;s franchise tax due in 2020, with the exemption amount increasing to $1,000 for taxes due in 2021, $10,000 for taxes due in 2022 and $100,000 for taxes due in 2023. For 2024 and following years, the franchise tax is repealed and no franchise tax will be due.&nbsp;</div> <div> &nbsp;</div> <div> <strong>Amnesty Programs</strong></div> <div> &nbsp;</div> <div> The new law provides two amnesty programs for delinquent taxpayers. One program is for taxpayers owing franchise taxes or license fees imposed by the Illinois Business Corporation of 1983 for any tax period ending after March 15, 2008 and on or before June 30, 2019. This amnesty program is available only between October 1, 2019 and November 15, 2019. Taxpayers with unpaid franchise taxes or license fees for the relevant period can realize significant benefits by participating in the program. If a taxpayer pays all unpaid franchise taxes and license fees for any taxable period included in the amnesty program, the Secretary of State will abate and not seek to collect any interest or penalties, and it will not seek civil or criminal prosecution, for the period for which such taxes and fees are paid. Considering that unpaid franchise taxes accrue interest at a rate of 2% per month, the waiver of interest can result in significant savings. Further, amnesty will be available with respect to any taxable period for which a taxpayer pays all back franchise taxes and fees, even if the taxpayer does not pay all taxes and fees that it may owe for all periods. Amnesty is not available, however, for any taxpayer who is a party to any criminal investigation or any civil or criminal litigation pending in court for nonpayment, delinquency or fraud concerning franchise tax or license fees.&nbsp;</div> <div> &nbsp;</div> <div> A second amnesty program is available for unpaid taxes owed to the Illinois Department of Revenue for taxable periods ending after June 30, 2011 and prior to July 1, 2018. Like the franchise tax amnesty program, this program runs from October 1, 2019 through November 15, 2019, and provides that the Department of Revenue will abate and not seek to collect any interest or penalties, and it will not seek civil or criminal prosecution, for any taxable period for which amnesty is granted. However, unlike the franchise tax amnesty program, a taxpayer&rsquo;s failure to pay <u>all</u> taxes owed to Illinois for any taxable period will invalidate any amnesty under this program, and amnesty under this program is not available to any taxpayer who is a party to any criminal investigation or any civil or criminal litigation pending in court for nonpayment, delinquency or fraud concerning <u>any</u> taxes owed to Illinois.</div> <div> &nbsp;</div> <div> <strong>Conclusion</strong></div> <div> &nbsp;</div> <div> The Illinois franchise tax is scheduled to be completely phased out in 2024, which will provide significant tax savings for corporations with large paid-in capital allocated to Illinois and eliminate an administrative burden for all corporations doing business in Illinois. Taxpayers should be aware, however, that although the franchise tax is scheduled to disappear for years after 2023, a taxpayer&rsquo;s franchise tax liability for years before 2024 will remain.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The new amnesty programs offer qualifying delinquent taxpayers a great opportunity to resolve tax liabilities at a significant savings and without civil or criminal prosecution. Even taxpayers who do not believe they owe back taxes should consider double-checking their tax returns, annual reports and other tax-related filings for the tax periods covered by the amnesty programs to confirm that the filings were accurate and that all required taxes have been paid. With regard to franchise taxes, taxpayers should also confirm that they reported all changes in paid-in capital, since the failure to do so would result in unpaid tax. A taxpayer that knows it currently owes taxes or reviews its past filings and discovers that it owes taxes should work with its tax advisers to determine if it should participate in the amnesty programs and, if so, to be ready to request amnesty when it becomes available on October 1, 2019.&nbsp;</div> https://www.seyfarth.com:443/publications/IMM072619 USCIS Publishes EB-5 Modernization Rule: the Impact on the EB-5 Program https://www.seyfarth.com:443/publications/IMM072619 Fri, 26 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On July 24, 2019, U.S. Citizenship and Immigration Services (USCIS), the immigration-benefits component of the Department of Homeland Security (DHS), published a final regulation on &ldquo;EB-5 Immigrant Investor Program Modernization&rdquo; (the &ldquo;Rule&rdquo;) to reform the EB-5 program in the Federal Register. Absent successful court challenges, or the passage by Congress of EB-5 legislation, the Rule will take effect on November 21, 2019. The Rule makes pronounced changes to the EB-5 program, including a significant increase in the investment threshold, conferral of exclusive authority to USCIS to designate Targeted Employment Areas (TEAs), and retention of priority dates for petitioners. The text of the Rule can be found here.<br /> <br /> <a href="https://www.bigimmigrationlawblog.com/2019/07/uscis-publishes-eb-5-modernization-rule-the-impact-on-the-eb-5-program/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA072519-TEO Nonprofit Universities and Schools - Skip the Newspaper Publication of Your Nondiscrimination Policy https://www.seyfarth.com:443/publications/CA072519-TEO Thu, 25 Jul 2019 00:00:00 -0400 <div> At long last, tax-exempt schools, colleges, and universities can stop paying newspapers to annually publish their nondiscrimination policies, and instead satisfy the IRS publicity requirement by posting the policy on their websites. Revenue Procedure 2019-22 has modified the publication requirements originally set forth in Revenue Procedure 75-50<sup>1</sup> to allow schools to publicize their nondiscrimination policy on their websites alone. Importantly, this new method could make it easier for private foundations to make &ldquo;equivalency determinations&rdquo; with respect to foreign school grantees.</div> <div> &nbsp;</div> <div> <strong>Background</strong></div> <div> &nbsp;</div> <div> In order for schools, including colleges, universities, secondary schools, foreign schools, preschools and schools operated by churches, to qualify and maintain exemption from tax under Section 501(c)(3) of the Internal Revenue Code, they must comply with the guidelines and recordkeeping requirements set forth in Revenue Procedure 75-50. The requirements include adopting and publicizing a racial nondiscrimination policy as to students and operating in a manner consistent with the policy.&nbsp;</div> <div> &nbsp;</div> <div> Revenue Procedure 75-50 defines a &ldquo;racially nondiscriminatory policy&rdquo; to mean nondiscrimination with regard to: (i) administration of student admission and educational policies; (ii) awarding of scholarships and financial aid; and (iii) the administration of athletic and other school-administered programs. &ldquo;Discrimination&rdquo; for purposes of this non-discriminatory policy includes any discrimination against applicants and students on the basis of race, color, and national or ethnic origin.<sup>2</sup></div> <div> &nbsp;</div> <div> Revenue Procedure 75-50 requires schools to include a statement of their nondiscrimination policy in all distributed catalogs and brochures that relate to student admissions, programs, scholarships, as well as in other written advertising recruiting students. Schools must also publicize their nondiscrimination policy to all segments of the general community that are served by the school.&nbsp; &nbsp;</div> <div> &nbsp;</div> <div> Until Revenue Procedure 2019-22 came along, schools had to satisfy the publicity requirement in one of two ways (each of which still work). A school may publish, at least once annually during the period of the school&rsquo;s solicitation for students, a notice of its nondiscrimination policy in a newspaper of general circulation that serves all racial segments of the community. Alternatively, a school may use broadcast media to publicize its nondiscrimination policy if this use makes the policy known to all segments of the general community the school serves.<sup>3</sup></div> <div> &nbsp;</div> <div> <strong>Revenue Procedure 2019-22 - The Internet Has Arrived!</strong></div> <div> &nbsp;</div> <div> Revenue Procedure 2019-22 provides a third method for publicizing its racial nondiscrimination policy. A school can now display a notice of its policy on its primary, publicly accessible homepage. This notice must be displayed at all times during the taxable year, excluding temporary outages due to website maintenance or technical problems. It must also be presented in a manner that is reasonably expected to be noticed by visitors accessing the school&rsquo;s homepage.&nbsp;</div> <div> &nbsp;</div> <div> Revenue Procedure 2019-22 defines a &ldquo;publicly accessible homepage&rdquo; as one that does not require a visitor to input information (such as an email address or a username and password) to access the homepage.&nbsp;</div> <div> &nbsp;</div> <div> The IRS will consider a variety of factors for purposes of determining whether a notice is reasonably expected be noticed by visitors to the school&rsquo;s homepage. Some of these factors include the following:&nbsp;</div> <div> &nbsp;</div> <ul> <li> The size, color and graphic treatment of the notice in relation to other parts of the homepage;&nbsp;</li> <li> Whether the notice is unavoidable;&nbsp;</li> <li> Whether other parts of the homepage distract attention from the notice; and&nbsp;</li> <li> Whether the notice is visible without a visitor having to do anything other than simple scrolling on the homepage.</li> </ul> <div> &nbsp;</div> <div> A link on the school&rsquo;s homepage to another page where the notice appears, or a notice that appears in a carousel or only by selecting a dropdown or by hover (mouseover) will not meet the requirements set forth in Revenue Procedure 2019-22.</div> <div> &nbsp;</div> <div> Furthermore, if a school does not have its own website, but has webpages contained in a website, the school must display a notice of its nondiscrimination policy on its primary landing page within the website in a manner that satisfies all other requirements of this new method, as discussed above.&nbsp;</div> <div> &nbsp;</div> <div> <strong>Implications - Foreign and Domestic</strong></div> <div> &nbsp;</div> <div> Revenue Procedure 2019-22 became effective May 28, 2019, and makes it easier for schools to comply with the publicity requirement with respect to their nondiscrimination policy. While it may amount to more unwelcome news for newspaper publishers, this is welcome news for tax-exempt schools. Schools now choosing to forego print advertising should review the guidelines set forth in Revenue Procedure 2019-22 to ensure that their discrimination policy is displayed on their website in a manner compliant with the new requirements.&nbsp;</div> <div> &nbsp;</div> <div> This new method may also make it easier for private foundations to make good faith determinations (also known as &ldquo;equivalency determinations&rdquo;) with respect to foreign school grantees. For purposes of such equivalency determinations, Revenue Procedure 2017-53<sup>4</sup> requires a foreign school grantee to adopt a policy in its governing instrument, or in a resolution of its governing body, that it does not discriminate against students and provide evidence that such policy is actually practiced and enforced. Evidence of racial nondiscrimination regarding students can be shown by complying with the guidelines set forth in Revenue Procedure 75-50. Now, private foundations may be able to look to a foreign school grantee&rsquo;s website, with its nondiscrimination policy appropriately posted, as evidence that the grantee does not discriminate on the basis of race, color, or national or ethnic origin.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> &nbsp;</div> <div> &nbsp;</div> <div> <div align="center"> <hr align="center" size="3" width="100%" /> </div> </div> <div> <sup>1</sup> 1975-2 CB 587.</div> <div> <div> <sup>2</sup> Two exceptions to this general rule are as follows: (i) policies that favor racial minority groups with respect to admissions, facilities and programs, and financial assistance (e.g., affirmative action-type programs) are not considered discriminatory; and (ii) religious schools that select students based on membership to a certain religious denomination are not discriminatory if admission is open to all individuals.&nbsp;</div> <div> <sup>3</sup> A school is not subject to these publication requirements if it follows a nondiscrimination policy as to students and meets one of the following: (i) customary draws its students nationally or internationally and regularly enrolls minority students in meaningful numbers and keeps records of its student body that evidences this policy, or (ii) customarily draws its students from local communities and regularly enrolls minority students in meaningful numbers and keeps records of its student body that evidences this policy.&nbsp;</div> <div> <sup>4</sup> 2017-40 IRB 263.</div> </div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/OMM072519-RE DC Recordation and Transfer Taxes Skyrocketing for Commercial Properties https://www.seyfarth.com:443/publications/OMM072519-RE Thu, 25 Jul 2019 00:00:00 -0400 <div> As has been announced, the cost of real estate transactions involving commercial property located in the District of Columbia will increase significantly as of October 1, 2019, but not necessarily for multifamily properties. On July 22, 2019, the D.C. City Council adopted Bill 23-209 &ldquo;to enact and amend provisions of law necessary to support the Fiscal Year 2020 budget&rdquo; (the &ldquo;Bill&rdquo;) which budget was approved pursuant to the Fiscal Year 2020 Local Budget Act of 2019. The Bill, which is subject to congressional approval, includes an increase in the transfer tax and recordation tax on certain commercial real estate transactions valued over $2,000,000 from a combined 2.9 percent (1.45 percent each) to a combined 5 percent (2.5 percent each). The increase also applies to a transfer of economic interests in real estate.</div> <div> &nbsp;</div> <div> What has not been broadcast generally is that the provisions of the Bill relating to the transfer and recordation tax increases apply <u>only</u> to &ldquo;Class 2&rdquo; properties and other properties &ldquo;if any portion of the building or structure in which the real property (or interest in real property) being transferred is classified as Class 2 Property&rdquo;. Residential property, including multifamily residential, is not classified as a &ldquo;Class 2&rdquo; property. Consequently, a multifamily residential project that does not include any commercial uses (e.g., dry cleaner, day care, eatery, coffee shop, etc.) will not be subject to the tax increases. The question of what constitutes a &ldquo;portion of the building or structure&rdquo; for purposes of the Bill has not been resolved. The D.C. Recorder&rsquo;s Office has promised &ldquo;guidance&rdquo; on this question in the near future.&nbsp; &nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/MA072519-LE Chicago Passes Expansive Fair Workweek Law https://www.seyfarth.com:443/publications/MA072519-LE Thu, 25 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis: </strong>On Wednesday, the Chicago City Council passed the Chicago Fair Workweek Ordinance, arguably the most expansive law of its kind. When the law takes effect in July 2020, it will require covered employers to publish employee schedules at least ten days in advance and impose premium pay requirements for schedule changes after that time. The law is noteworthy for numerous reasons, including the fact that it covers not just retailers, restaurants, and hotels, but also industries not typically targeted by fair workweek measures, such as health care, manufacturing, building services, and warehouse services. Employers operating in Chicago should act now to begin formulating a plan to ensure compliance and minimize impacts.</em></p> <p> A fight that began more than two years ago ended on Wednesday, when Chicago joined the growing number of cities across the country that have enacted predictive scheduling laws. <a href="https://chicago.legistar.com/LegislationDetail.aspx?ID=3964374&amp;GUID=52BA6EC6-9561-4581-87E2-51C8F279DE2D&amp;Options=Advanced&amp;Search">The Ordinance</a>, originally introduced in June 2017, received unanimous approval by the City Council. The new law is incredibly expansive, and it only adds to the complex web of wage and hour laws that multi-state employers must account for in order to ensure compliance.</p> <p> <strong>What Does the Ordinance Require?</strong></p> <p> Similar to many other predictive scheduling laws, the Chicago Ordinance requires covered employers to publish covered employee schedules at least 10 days in advance (or 14 days starting July 1, 2022) of the first working day of any new schedule, beginning July 1, 2020.</p> <p> Subject to a handful of exceptions, if the employer changes the schedule after posting, then it must provide the employee with &ldquo;predictability pay&rdquo; in the amount of one hour of pay at the employee&rsquo;s &ldquo;regular rate,&rdquo; as defined by Section 7 of the FLSA (29 U.S.C. &sect; 207(e)). If a change is made within 24 hours of the shift, the employee would be entitled to at least 50% of their regular rate for any scheduled hours not worked due to the change.</p> <p> The Ordinance speaks to more than just schedule changes, however. It also establishes the following requirements, among others:</p> <ol> <li> The Ordinance penalizes employers who fail to provide employees with at least 10 hours off in between shifts. Specifically, similar to spread-of-hour requirements in New York, the Ordinance requires that employees who work a shift that begins less than 10 hours after the end of the prior day&rsquo;s shift must be paid at a rate of 1.25 times their regular rate of pay for the shift.</li> <li> The Ordinance dictates that when a shift becomes available, they must first be offered to covered, qualified employees. If the offered shifts are not accepted, the shifts must then be offered to temporary or seasonal workers who have worked for the employer for two or more weeks. This suggests that there may be cases when an open shift may not be offered to a current employee who is not covered by the Ordinance (e.g., an employee earning $27/hour) before it is offered to a temporary or seasonal worker.</li> <li> Covered employers must provide new employees covered by the law with a written estimate of the employee&rsquo;s projected days and hours of work for the first 90 days of employment, including average hours per week, expected days and times or shifts that the employee can expect to work (or not work), and whether on-call shifts are expected</li> </ol> <p> <br /> <strong>Who Is Affected? </strong></p> <p> The Chicago Ordinance will require attention from employers who are not accustomed to being covered by similar measures in other areas of the country. Those who have grappled with fair workweek laws in other jurisdictions will not be surprised to learn that the Ordinance applies to the hospitality, retail, and restaurant industries. But the law goes much further: it also encompasses health care, manufacturing, warehouse services, and building services.</p> <p> Restaurants, as a general matter, are covered if they have at least 30 locations and 250 employees globally (though there is a carve-out for certain franchises with no more than three locations in Chicago). Employers primarily operating in the other covered industries are subject to the law if they employ more than 100 employees globally (or 250 in the case of a non-profit),&nbsp;of whom at least 50 are covered employees.</p> <p> The Ordinance is also expansive in the types of employees it covers. It covers not only hourly employees&mdash;specifically, those earning no more than $26/hour&mdash;but <em>salaried employees</em> earning $50,000/year or less. While the Ordinance includes an exception for employees who &ldquo;self-schedule,&rdquo; that term is defined to include only employees who &ldquo;self-select work shifts without employer pre-approval pursuant to a mutually acceptable agreement.&rdquo;</p> <p> Finally, it is important to note that the Ordinance covers any employee of a &ldquo;day and temporary labor service agency&rdquo; who has been assigned to a covered employer for 420 hours within an 18-month period. Thus, certain temp agencies that might not otherwise be covered will need to monitor where their employees work and for how long.</p> <p> <strong>How About the Exceptions? </strong></p> <p> The Ordinance carves out a few scenarios in which predictability pay is not required. A few of the more notable exceptions include: (i) mutually agreed upon shift trades between covered employees; (ii) &nbsp;mutually agreed upon changes between the employee and employer, if confirmed in writing; and (iii) changes that an employee requests and confirms in writing.</p> <p> Additionally, the Ordinance contains exceptions specific to manufacturing and health care employers. In the former setting, predictability pay is not triggered when a schedule change is the result of events outside the employer&rsquo;s control (e.g., delay of raw materials). For health care employers, employers will not be penalized for changes due to (i) patient care needs that require specialized skills to complete a procedure, or (ii) substantial increases in demand due to weather, violence, or other circumstances beyond the employer&rsquo;s control.</p> <p> Employers with unionized workforces will also need to take note of the Ordinance. Like many other local wage measures, the Ordinance provides that its requirements may be waived in a collective bargaining agreement. But any such waiver must be explicitly stated in clear and unambiguous terms, and, at this time, the city has not provided guidance on how that requirement will be interpreted, particularly for CBA&rsquo;s that are not up for renegotiation until after the July 1, 2020 effective date.</p> <p> <strong>How Will the Ordinance Be Enforced?</strong></p> <div> The Ordinance provides employees with the right to file a civil lawsuit within two years of a violation, but only after submitting a complaint to the Department of Business Affairs and Consumer Protection, which will then provide the employer the opportunity to respond. An employee who wins such a lawsuit is entitled to unpaid predictability pay, as well as attorneys&rsquo; fees and costs.</div> <div> &nbsp;</div> <div> In addition, employers are subject to a fine of $300 to $500 for each offense. Each employee whose rights are violated constitutes a separate offense, and each day of violation constitutes a separate offense. Thus, the penalties for non-compliance can mount quickly.</div> <div> &nbsp;</div> <div> In furtherance of these provisions, the Ordinance authorizes City officials to access work sites and records to monitor compliance and investigate complaints.</div> <p> <br /> <strong>Takeaways and Next Steps</strong></p> <p> We will continue to monitor and provide updates on what comes next for the Chicago Ordinance, including any regulations or other guidance. In the meantime, here are some steps to consider:</p> <ul> <li> Review existing scheduling policies in preparation for implementing new policies or revising existing policies to satisfy the Ordinance;</li> <li> Review dates for collective bargaining agreements to determine when to address the new Ordinance and seek a waiver during bargaining; and</li> <li> Be on the lookout for further information such as regulations, model notices, and other administrative guidance.</li> </ul> <p> With predictive scheduling / fair workweek laws continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Ordinance and other similar measures across the country.</p> https://www.seyfarth.com:443/publications/PM072519-LE Seyfarth Shaw Policy Matters Newsletter - July 25, 2019 https://www.seyfarth.com:443/publications/PM072519-LE Thu, 25 Jul 2019 00:00:00 -0400 <p> <strong>Scalia to Replace Acosta as Secretary of Labor</strong>.&nbsp; Last week, President Trump <a href="https://twitter.com/realdonaldtrump/status/1152010854176452608">tweeted</a> his intent to nominate Eugene Scalia as Secretary of Labor.&nbsp; Scalia served as Solicitor of Labor in the George W. Bush administration and has been in private law practice, focusing on labor, employment, and administrative law, since leaving the administration in 2003.&nbsp; With a crowded Senate calendar, a long August recess, and the fact that he has not yet actually been nominated, we expect September will be the earliest we see Scalia confirmed to the Cabinet.</p> <p> <strong>House Subcommittee Holds Hearing on &ldquo;Modernizing America&rsquo;s Labor Laws.&rdquo;</strong>&nbsp; The House Health, Employment, Labor, and Pensions Subcommittee held a <a href="https://edlabor.house.gov/hearings/protecting-the-right-to-organize-act-modernizing-americas-labor-laws">hearing</a> titled &ldquo;Protecting the Right to Organize Act: Modernizing America&rsquo;s Labor Laws.&rdquo;&nbsp; The focus of the hearing was <a href="https://www.congress.gov/bill/116th-congress/house-bill/2474">H.R. 2474</a>, marking the second time the bill has had a <a href="https://edlabor.house.gov/hearings/the-protecting-the-right-to-organize-act-deterring-unfair-labor-practices_">hearing</a> in this subcommittee in the past three months.&nbsp; As we have discussed in prior issues, the scope of the bill is incredibly broad: among other things, it would codify an expansive joint employment standard; eliminate the ability of employers to hire replacement workers during an economic strike; reverse the Supreme Court&rsquo;s recent <u>Epic</u> decision on class action arbitrations; create a new private right of action for workers when the Board does not take up a case; establish expanded damages and civil penalties; effectively repeal state right-to-work laws by permitting &ldquo;fair share&rdquo; fees; expand the definitions of &ldquo;supervisor&rdquo; and &ldquo;employee&rdquo;; impose first contract interest arbitration; broadly repeal existing protections against secondary boycott actions, and allow card check recognition where a &ldquo;violation&rdquo; has occurred.&nbsp; Although the second hearing sheds some light on the priority this bill may have in the House, it will not be taken up by the Senate.</p> <p> <strong>House Passes Multiemployer Funding Legislation.</strong>&nbsp; Last night, July 24, the House passed the Rehabilitation for Multiemployer Pension Act (H.R. 397), often referred to as the Butch Lewis Act, by the vote of 264-169, with 29 Republicans in support.&nbsp; The bill is aimed at providing relief for underfunded plans through 30 year loans, to be administered by a new Pension Rehabilitation Administration.&nbsp; While there is bipartisan consensus that the multiemployer system faces a severe underfunding crisis, this bill was moved to the Floor without hearings or even an Education and Labor markup which allowed amendments.&nbsp; It was generally criticized by the Republicans as a bailout without meaningful reforms to reign in future spending.&nbsp; (A bipartisan working group from the 115th Congress which had been reportedly near a deal was not reconstituted this Congress). Nevertheless, the 29 Republicans voting in support signal the political sensitivities of the issue as Congress moves&nbsp;in to an election-year.&nbsp; While the problem is pressing, it is clear that the Senate will not take up this version of multiemployer reform, but may nevertheless act.&nbsp; Stay tuned for further action as elections near.</p> <p> <strong>Final EB-5 Regulation Issued</strong>.&nbsp;&nbsp;After flurries or rumors that the regulation had been killed, the regulation was indeed <a href="http://marketing.seyfarth.com/rs/emsdocuments/2019-15000%201.pdf">published on July 24, 2019</a>, taking effect November 21.&nbsp;The rule makes very significant changes to the program, including marked increases in the investment thresholds, conferral of exclusive authority to USCIS as to designation of targeted employment areas (eliminating the state roles) and retention of priority dates for petitioners.&nbsp; No one in the business community appears happy with the regulation and there is some talk of again going to Congress to cut a compromise deal which would trump the regulation.&nbsp; Past efforts at reform of course eventually died in the Congress and the path forward is far from clear, particularly given new leadership in the House Judiciary Committee.&nbsp; We will keep you informed as to future developments.</p> https://www.seyfarth.com:443/publications/LR072519 Board Invokes Sensibility When Determining When An Employer Can Withdraw Recognition From A Union Upon Expiration Of A CBA https://www.seyfarth.com:443/publications/LR072519 Thu, 25 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In a 3-1 decision, the National Labor Relations Board (&ldquo;Board&rdquo;) in Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019), established a new standard for determining whether a union has reacquired majority status after an employer announces its anticipatory withdrawal of recognition based on evidence indicating that the union has lost majority support. The Board&rsquo;s new framework requires a secret ballot election be conducted when both the employer and the union have evidence supporting their positions of majority status.<br /> <br /> <a href="https://www.employerlaborrelations.com/2019/07/25/board-invokes-sensibility-when-determining-when-an-employer-can-withdraw-recognition-from-a-union-upon-expiration-of-a-cba/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT072519 The Week in Weed: July 26, 2019 https://www.seyfarth.com:443/publications/TBT072519 Thu, 25 Jul 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/the-week-in-weed-july-26-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/briggscd072519 Ben Briggs quoted in Construction Dive https://www.seyfarth.com:443/news/briggscd072519 Thu, 25 Jul 2019 00:00:00 -0400 <p> Ben Briggs was quoted in a July 25 story from Construction Dive, &quot;Employer or employee: Who&#39;s to blame for OSHA violations?&quot; While there is no mechanism for OSHA to issue a citation to employees who refuse to follow company safety rules, said Briggs, they can be charged criminally in some cases. You can read the <a href="https://www.constructiondive.com/news/employer-or-employee-whos-to-blame-for-osha-violations/559198/">full article here</a>.</p> https://www.seyfarth.com:443/news/johnsonge072519 Randel Johnson quoted in Government Executive https://www.seyfarth.com:443/news/johnsonge072519 Thu, 25 Jul 2019 00:00:00 -0400 <p> Randel Johnson was quoted in a July 25 story from Government Executive, &quot;Acting Labor Secretary Has a Long Paper Trail.&quot; Johnson said that Patrick Pizzella is a substantive guy who knows the department inside and out. You can read the <a href="https://www.govexec.com/management/2019/07/acting-labor-secretary-has-long-paper-trail/158696/">full article here</a>.</p> https://www.seyfarth.com:443/news/maatmanlaw360072519 Gerald Maatman quoted in Law360 https://www.seyfarth.com:443/news/maatmanlaw360072519 Thu, 25 Jul 2019 00:00:00 -0400 <p> Gerald Maatman was quoted in a July 25 story from Law360, &quot;Sex-Harass Article Portends Pitched Battle Over Scalia.&quot; Maatman said that in today&rsquo;s Washington, virtually nothing is beyond relevant when it comes to the nomination process.</p> https://www.seyfarth.com:443/news/olsonshrm072419 Camille Olson quoted in SHRM https://www.seyfarth.com:443/news/olsonshrm072419 Wed, 24 Jul 2019 00:00:00 -0400 <p> Camille Olson was quoted in a July 24 story from SHRM, &quot;Putting Humanity into HR Compliance: Fire Progressive Discipline.&quot; Olson believes that constructive comments and forward-looking communications with employees about their performance are very useful. You can read the <a href="https://www.shrm.org/ResourcesAndTools/hr-topics/employee-relations/Pages/progressive-employee-discipline-.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/OMM072419-LIT Let’s Try on the Patterson Gloss Again: The Ninth Circuit Retracts Vazquez https://www.seyfarth.com:443/publications/OMM072419-LIT Wed, 24 Jul 2019 00:00:00 -0400 <p> In its May 2019 opinion in <em>Vazquez v. Jan-Pro Franchising Int&rsquo;l, Inc.</em>,<a href="#_ftn1" name="_ftnref1" title="">[1]</a> the Ninth Circuit held that the recent California Supreme Court decision, <em>Dynamex Ops. W. Inc. v. Superior Court</em>,<a href="#_ftn2" name="_ftnref2" title="">[2]</a> should apply retroactively.&nbsp; On Monday, the Ninth Circuit withdrew its <em>Vazquez</em> opinion and will certify the retroactivity question to the California Supreme Court.&nbsp; The Ninth Circuit&rsquo;s withdrawal of <em>Vazquez</em> is a welcomed development for franchisors doing business in California because the Ninth Circuit&rsquo;s decision in <em>Vazquez</em> not only held <em>Dynamex</em> applied retroactivity, but offered &ldquo;guidance&rdquo; on how <em>Dynamex</em> should apply to California franchise relationships.&nbsp; In doing so, the Ninth Circuit not only ignored its general rule that &ldquo;courts and agencies are not required to decide issues unnecessary to the results they reach,&rdquo; but also inexplicably gave no weight to California precedent that, under <em>Miller v. Gammie</em>,<a href="#_ftn3" name="_ftnref3" title="">[3]</a> it was required to apply.</p> <p> <strong>The<em> Dynamex </em>decision and its impact on the <em>Martinez</em> test</strong></p> <p> In California, an &ldquo;employer&rdquo; under a wage order is typically defined by <em>Martinez v. Combs</em> as someone who exercised control over the wages, hours, or working conditions of another; suffered or permitted another to work; or engaged, and thereby a common law employment relationship is created.<a href="#_ftn4" name="_ftnref4" title="">[4]</a>&nbsp; In <em>Dynamex</em>, the California Supreme Court addressed what it meant for an employer to &ldquo;suffer&rdquo; or &ldquo;permit [another] to work&rdquo;<a href="#_ftn5" name="_ftnref5" title="">[5]</a> holding that lower courts should apply the &ldquo;ABC test&rdquo; to determine if an employment relationship, as opposed to an independent contract relationship, exists.<a href="#_ftn6" name="_ftnref6" title="">[6]</a>&nbsp; Under the ABC test, a claimant is presumed to be an employee, and a purported employer may rebut the presumption only if it can establish: (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of work, both under the contract and in fact; (B) that the worker performs work that is outside the usual course of the entity&rsquo;s business; <strong><em>and</em></strong> (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.<a href="#_ftn7" name="_ftnref7" title="">[7]</a>&nbsp; If an employer fails to prove any prong, it is deemed an employer for purposes of the wage order.&nbsp;</p> <p> The <em>Dynamex</em> ABC test, if applied literally and without regard to the special features of a franchise relationship, could jeopardize many, if not all, California franchise relationships.&nbsp; For example, franchisors often assert they are in the business of selling franchises, and it is the independently owned franchisees that are in the business of actually operating the franchised business.&nbsp; But some courts question that distinction, especially when a franchisor not only sells, but also operates outlets that are similar to those operated by its franchisees. &nbsp;Because the distinction between the franchisor as the developer and seller of a business concept and the network of franchisees as the actual operators is clouded, courts need to use common law tests to determine whether notwithstanding the franchise relationship defined by a franchise agreement, there is still an employment relationship. &nbsp;That is where Jan-Pro found itself in <em>Vazquez.&nbsp; </em></p> <p> <strong><em>Vazquez </em>and the<em> Patterson </em>gloss</strong></p> <p> In <em>Vazquez</em>, a Jan-Pro commercial cleaning franchisee brought an action under a California wage order claiming it was actually Jan-Pro&rsquo;s employee, not a franchisee.&nbsp; In its motion for summary judgment, Jan-Pro argued that its franchisee was an independent contractor under applicable California law, and cited to <em>Patterson v. Domino&rsquo;s Pizza, LLC</em>, while Vazquez claimed that he was Jan-Pro&rsquo;s employee under a strict application of the <em>Martinez</em> test.<a href="#_ftn8" name="_ftnref8" title="">[8]</a>&nbsp; In <em>Patterson</em>, the California Supreme Court recognized that a strict application of California&rsquo;s vicarious liability test would do harm to franchise relationships, and instead applied a modified form of the common law test to account for the fact that a franchise relationship necessarily contemplates some level of control by the franchisor over the franchisee and its operation.<a href="#_ftn9" name="_ftnref9" title="">[9]</a>&nbsp; The district court in <em>Vazquez</em> took the same approach that <em>Patterson</em> did, applying a <em>&ldquo;Patterson</em> gloss&rdquo; to the <em>Martinez</em> definition of employer.<a href="#_ftn10" name="_ftnref10" title="">[10]</a>&nbsp; It did so because the district court recognized that, if it did not apply a <em>Patterson </em>gloss to the <em>Martinez</em> test, it &ldquo;would yield &lsquo;a distorted view of operative law,&rsquo; inasmuch as <em>Patterson</em> &lsquo;denigrate[d] reliance on [the California Supreme Court&rsquo;s] older decisions&rsquo; and applied its new standard where the &lsquo;traditional common law principles of agency&rsquo; would otherwise apply.&rdquo;<a href="#_ftn11" name="_ftnref11" title="">[11]</a>&nbsp; Having modified the <em>Martinez</em> test to account for the special features of the franchise relationship, the district court in <em>Vazquez</em> granted Jan-Pro&rsquo;s motion for summary judgment.&nbsp;</p> <p> Then came <em>Dynamex.</em> &nbsp;In considering the franchisee&rsquo;s appeal, the Ninth Circuit asked the parties to address the effect of <em>Dynamex</em> on the district court&rsquo;s decision.<a href="#_ftn12" name="_ftnref12" title="">[12]</a>&nbsp; Initially, the Ninth Circuit concluded that <em>Dynamex</em> applied retroactively, and that &ldquo;the case must be remanded to the district court to consider the merits in light of <em>Dynamex</em>.&rdquo;<a href="#_ftn13" name="_ftnref13" title="">[13]</a>&nbsp; However, instead of leaving that application to the district court in the first instance, the Ninth Circuit offered &ldquo;guidance&rdquo; as to how the district court should apply <em>Dynamex</em>.&nbsp; Significantly, its guidance conflicted with the California Supreme Court&rsquo;s decision in <em>Patterson </em>because it dismissed the relevance of the franchise relationship.</p> <p> <strong><em>Miller</em> and the role of precedent</strong></p> <p> In <em>Miller v. Gammie</em>, the Ninth Circuit issued an <em>en banc</em> decision instructing appellate panels that they remain bound to apply the &ldquo;mode of analysis&rdquo; from decisions with precedential value.<a href="#_ftn14" name="_ftnref14" title="">[14]</a>&nbsp; The <em>Miller</em> rule binds panels regardless of whether or not the precedential framework is derived from state or federal decisions, so long as the framework is embodied by &ldquo;a decision of a court of last resort.&rdquo;<a href="#_ftn15" name="_ftnref15" title="">[15]</a>&nbsp; An analytical framework will remain good law until such a court issues a decision &ldquo;clearly irreconcilable&rdquo; with the prior precedent.<a href="#_ftn16" name="_ftnref16" title="">[16]</a></p> <p> In <em>Patterson</em>, the California Supreme Court comprehensively considered the many &ldquo;special features&rdquo; that exist in a franchise relationship in determining how best to apply the common law test for <em>respondeat superior</em> liability to a franchise relationship.&nbsp; Since it did not involve a franchise relationship, the <em>Dynamex</em> decision did not undercut the <em>Patterson </em>&ldquo;mode of analysis,&rdquo; and most certainly is not &ldquo;clearly irreconcilable&rdquo; with <em>Patterson</em>.&nbsp; Consequently, <em>Patterson</em>, and the special attention the California Supreme Court gave to the franchise relationship, should remain the proper means for analyzing the application of common law tests in the franchise context.&nbsp;</p> <p> While the Ninth Circuit order reflects the certified question is on the issue of retroactivity hopefully, the California Supreme Court&rsquo;s resolution of the certified question will also address the fundamental question of whether <em>Dynamex</em> was intended to overrule <em>Patterson</em> or whether the franchise-conscious framework used in <em>Patterson </em>must be taken into account when applying the <em>Martinez</em> test in the context of a franchise relationship.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <span style="font-size:9px;"><a href="#_ftnref1" name="_ftn1" title="">[1]</a> 923 F.3d 575 (9th Cir. 2019).<br /> <a href="#_ftnref2" name="_ftn2" style="background-color: rgb(255, 255, 255);" title="">[2]</a> 4 Cal.5th 903 (2018).<br /> <a href="#_ftnref3" name="_ftn3" style="background-color: rgb(255, 255, 255);" title="">[3]</a> 335 F.3d 889 (9th Cir. 2003) (<em>en banc</em>)<br /> <a href="#_ftnref4" name="_ftn4" style="background-color: rgb(255, 255, 255);" title="">[4]</a> 49 Cal.4th 35, 64 (2010).<br /> <a href="#_ftnref5" name="_ftn5" style="background-color: rgb(255, 255, 255);" title="">[5]</a> 4 Cal.5th at 956-57.&nbsp;<br /> <a href="#_ftnref6" name="_ftn6" style="background-color: rgb(255, 255, 255);" title="">[6]</a><em> Id.</em><br /> <a href="#_ftnref7" name="_ftn7" style="background-color: rgb(255, 255, 255);" title="">[7]</a> <em>Id. </em>at 957.<br /> <a href="#_ftnref8" name="_ftn8" style="background-color: rgb(255, 255, 255);" title="">[8]</a> 60 Cal.4th 474, 497-98 (2014).<br /> <a href="#_ftnref9" name="_ftn9" style="background-color: rgb(255, 255, 255);" title="">[9]</a> <em>Id. </em>at 499.&nbsp;<br /> <a href="#_ftnref10" name="_ftn10" style="background-color: rgb(255, 255, 255);" title="">[10]</a> 923 F.3d at 594.<br /> <a href="#_ftnref11" name="_ftn11" style="background-color: rgb(255, 255, 255);" title="">[11]</a> No. 16-05961, 2017 WL 2265447, at *3 (N.D. Cal. 2017) (quoting <em>Salazar v. McDonald&rsquo;s Corp</em>., No. 14-02096, 2016 WL 4394165 (N.D. Cal. 2016).<br /> <a href="#_ftnref12" name="_ftn12" style="background-color: rgb(255, 255, 255);" title="">[12]</a> 923 F.3d at 580.&nbsp;<br /> <a href="#_ftnref13" name="_ftn13" style="background-color: rgb(255, 255, 255);" title="">[13]</a> <em>Id.</em><br /> <a href="#_ftnref14" name="_ftn14" style="background-color: rgb(255, 255, 255);" title="">[14]</a> 335 F.3d 889, 900 (9th Cir. 2003).&nbsp;<br /> <a href="#_ftnref15" name="_ftn15" style="background-color: rgb(255, 255, 255);" title="">[15]</a> <em>Id.</em><br /> <a href="#_ftnref16" name="_ftn16" style="background-color: rgb(255, 255, 255);" title="">[16]</a> <em>Id.</em></span></p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/OMM072419-LE If Pain, Yes Gain—Part 71: San Antonio Delays Paid Sick Leave Ordinance Until December 1; Dallas Ordinance Remains Scheduled To Begin August 1—At Least For Now https://www.seyfarth.com:443/publications/OMM072419-LE Wed, 24 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis</strong>:&nbsp; On Wednesday, July 24, 2019, approximately one week before San Antonio&rsquo;s paid sick leave ordinance was scheduled to go into effect for most employers, a Texas state court stayed implementation of the city&rsquo;s paid sick leave ordinance until at least December 1, 2019.&nbsp; In the meantime, the Dallas paid sick leave ordinance remains scheduled to go into effect on August 1, 2019 for most employers.</em></p> <p> Since <a href="https://www.seyfarth.com/publications/MA022318-LE2">Austin passed</a> the first paid sick leave (&ldquo;PSL&rdquo;) ordinance in Texas last year, the state has enjoyed an ongoing PSL saga, including similar ordinances passed by <a href="https://www.seyfarth.com/publications/MA050719-LE">Dallas</a> and <a href="https://www.seyfarth.com/publications/MA082118-LE">San Antonio</a>, <a href="https://www.seyfarth.com/publications/OMM053119-LE3">failed preemption legislation</a>, <a href="https://www.seyfarth.com/publications/OMM112118-LE">court battles</a>, and a pending appeal to the Texas Supreme Court.&nbsp; The drama has not abated.&nbsp; <a href="https://www.seyfarth.com/publications/MA071719-LE">We last reported</a> on the state of PSL ordinances in Texas a week ago.&nbsp; Since that time, a whirlwind of activity has occurred.&nbsp; Most notably, on July 24, 2019, a Bexar County District Court stayed implementation of San Antonio&rsquo;s PSL ordinance until at least December 1, 2019.&nbsp; Meanwhile&mdash;for the time being at least&mdash;Dallas&rsquo; PSL ordinance is still scheduled to go into effect on August 1, 2019.</p> <p> <strong>San Antonio PSL Ordinance Is Stayed Until December 1</strong></p> <p> <a href="https://www.seyfarth.com/publications/OMM053119-LE3">As we previously reported</a>, San Antonio&rsquo;s PSL ordinance was scheduled to go into effect on August 1, 2019 for most businesses.&nbsp; On July 15, however, a group of local businesses and business associations filed a lawsuit in Texas state court seeking an injunction of the San Antonio ordinance&rsquo;s August 1 effective date.&nbsp; The business plaintiffs focused on the same constitutional grounds that suspended implementation of Austin&rsquo;s paid sick leave ordinance last year.&nbsp;</p> <p> On July 19, the State of Texas (through the Attorney General&rsquo;s office) intervened in the San Antonio lawsuit, siding with the business plaintiffs.&nbsp; The City of San Antonio then agreed to voluntarily stay implementation of the PSL ordinance until December 1 stating that it would use the four-month delay to consider possible revisions to the PSL ordinance.&nbsp; Today, the court granted the stay, halting the August 1 implementation date and postponing the San Antonio PSL ordinance.&nbsp; Accordingly, businesses in San Antonio now need not worry about PSL compliance until at least December 1.</p> <p> <strong>Dallas PSL Ordinance Is Scheduled To Go Into Effect August 1</strong><strong>&mdash;At Least For Now</strong></p> <p> Not to be deterred by San Antonio&rsquo;s PSL delay, the Dallas PSL ordinance is still scheduled to go into effect on August 1, 2019 for most businesses.&nbsp; Dallas is continuing to prepare for implementation as the city recently published <a href="https://dallascityhall.com/departments/fairhousing/paid-sick-leave/Pages/Rules.aspx">PSL Rules</a> and <a href="https://dallascityhall.com/departments/fairhousing/paid-sick-leave/Pages/Frequently-Asked-Questions.aspx">Frequently Asked Questions</a>.&nbsp; Accordingly, employers in Dallas should continue to prepare for the city PSL ordinance&rsquo;s implementation, subject to any further developments over the next week.</p> <p> To date&mdash;unlike in Austin and San Antonio&mdash;no lawsuit has been filed challenging the Dallas PSL ordinance.&nbsp; That being said, a lawsuit could be filed in the next several days.&nbsp; We will continue to monitor developments as they unfold in Texas, and will provide updates as additional information becomes available.</p> <p> With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this law and sick leave requirements generally.</p> <p> To stay up-to-date on Paid Sick Leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here </a>to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to <a href="mailto:sickleave@seyfarth.com">sickleave@seyfarth.com</a>.</p> https://www.seyfarth.com:443/publications/MA072319-LE ICE Chills the Summer with Thousands of Audit Notices Issued to Businesses Nationwide https://www.seyfarth.com:443/publications/MA072319-LE Tue, 23 Jul 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis</strong>: The temperature may be heating up in the nation&rsquo;s capital, but Immigration and Customs Enforcement (ICE) is keeping things cool.&nbsp;</em>&nbsp;<em>ICE Acting Director, Matthew Albence, confirmed that almost 3330<sup>1</sup> Notices of Inspection (NOI) have already been served, across the 50 states and Puerto Rico, initiating Form I-9 audits for companies of all shapes and sizes. It is expected that over 5000 NOIs will be issued before this latest ICE blitz is over. With the current enforcement climate, there may even be a resurgence of pre-dawn enforcement actions &ndash; otherwise known as &ldquo;raids&rdquo; &ndash; to surprise both workers and their employers. <strong>Companies should expect penalties to climb sky high, with recent reports of multi-million dollar fines</strong>, especially for non-compliant electronic I-9 systems &mdash; that&rsquo;s right, something that has nothing to do with unlawful workers.&nbsp;&nbsp;</em></div> <div> &nbsp;</div> <div> <strong>What is an NOI?</strong></div> <div> &nbsp;</div> <div> An NOI initiates a government administrative inspection of a company&rsquo;s Forms I-9 to determine whether they are complying with existing law.&nbsp; U.S. Immigration and Customs Enforcement&rsquo;s (ICE) Homeland Security Investigations (HSI) leadership considers civil administrative audits to be just one of many tools that ICE can use to reduce the demand for unauthorized unemployment and to protect opportunities for U.S. workers.&nbsp; The current enforcement strategy includes an expanded use of civil penalties, employer audits, and debarment, as well as the criminal prosecution of employers who knowingly break the law.</div> <div> &nbsp;</div> <div> <strong>What Happens When A Client Receives an NOI?</strong></div> <div> &nbsp;</div> <div> An ICE audit begins when an auditor and/or an ICE agent arrives at the client&rsquo;s doorstep to serve the NOI.</div> <ul> <li> Service can also be accomplished via certified U.S. mail, return receipt requested. Ensure you have a protocol to have a NOI reach the right party in a timely fashion. For your reference, we have previously provided <a href="https://www.seyfarth.com/uploads/siteFiles/publications/MA033017LE.pdf">Quick Guidance: What To Do In The Event of a Visit By The DHS-ICE Agents</a>.</li> <li> If in person, the agent will generally deliver the notice and will request to see a manager, or the person charged with Form I-9 duties.&nbsp; The employee receiving service of the NOI will need to sign a document acknowledging the receipt. It&rsquo;s ok to sign, you can still keep your first born, I promise.</li> <li> The company will then be provided with three (3) days to respond to the NOI, but extensions may be granted with good reason. Those three days will go by very quickly and it is critical that companies use them wisely.</li> <li> NOIs should be taken very seriously.&nbsp; In 2017, the largest judgment in U.S. history was levied against Asplundh Tree Expert Co. for illegally employing undocumented immigrants &mdash;the company had to eventually <strong>pay a total of $95 million</strong> in forfeitures and civil claims.</li> </ul> <div> <strong>What do companies need to know?</strong></div> <div> &nbsp;</div> <div> HSI leadership has been instructed to continue increasing the number of inspections; it is expected that many companies will receive these government subpoenas during the next week or so.&nbsp; Historically, ICE has prioritized investigations involving critical infrastructure and traditionally targeted industries &ndash; including the service industry, restaurants and hospitality, construction, brick and mortar retailers, production and packaging, landscaping, maintenance, and manufacturing.&nbsp; The majority of NOIs are driven by tips and leads. We have several companies that have received multiple NOIs, at different worksites, across state lines.&nbsp; It&rsquo;s possible this is purely a coincidence, or it could be proof of a more coordinated effort between the twenty-six (26) local offices, or Special Agents in Charge (SACs) as they are called, than we have seen in the past.&nbsp; It&rsquo;s too early to tell.</div> <div> &nbsp;</div> <div> <strong>What should you do if you receive a NOI?</strong></div> <div> &nbsp;</div> <div> Receipt of a NOI should be taken very seriously, regardless of the size of the company.&nbsp; If you receive one, it is critical that you act immediately. The law requires employers to provide ICE with the Forms I-9 for each active employee (and for employees terminated within the retention period) within three days of being served the NOI. Failing to timely complete, or doing a sloppy job of completing an I-9 for employees can result in fines of $230 &ndash; $2,292 and employing undocumented worker can cost companies a steep $573 &ndash; $22,927 per employee. Under no circumstances should a company waive the three days that they are afforded to submit the Forms I-9.&nbsp; During that time, missing Forms I-9 will need to be located, and/or completed when necessary.&nbsp; Documents such as employee lists, payroll, E-Verify and SS no-match information, business entity and staffing agency/contractor information, will need to be collected, in addition to the Forms I-9. The submission should be neatly organized for the government.&nbsp; Working with experienced counsel can simplify a stressful time.</div> <div> &nbsp;</div> <div> <strong>What can companies do to ensure they are ready for a government inspection?</strong></div> <div> &nbsp;</div> <div> Be proactive and address gaps in immigration compliance. Following are some of the practices that will ensure just that:</div> <ul> <li> <strong>Internal Assessment, I-9 Audits, and Remediation</strong>.&nbsp; The Form I-9 is often referred to as &ldquo;the most complicated 3-page form in America.&rdquo;&nbsp; Companies should consider an internal I-9 audit under the direction of experienced counsel.&nbsp; Before deciding to take on a full audit, however, companies should look at alternatives such as an internal assessment of policies and processes, in conjunction with a sampling of I-9s and E-Verify hygiene, where applicable.&nbsp; Such a project may be more appropriate and cost effective.&nbsp; Then, companies can decide if a full I-9 review or broader cross section is necessary.&nbsp; Either way, the timely remediation of any issues discovered on I-9s is critical. These include, but are not limited to, simple paperwork violations, missing I-9s, expired work authorizations, and fraudulent documents.&nbsp; Acting on the results is key, and the more serious issues should be addressed as quickly as possible.&nbsp; Being proactive will reduce fines and penalties and will also establish a good faith defense in the event of an ICE audit.<br /> &nbsp;</li> <li> <strong>Review/Establish Policies and Procedures.</strong>&nbsp; Management cannot turn a blind eye to what is happening in the field, and should insist upon compliant practices.&nbsp; Don&rsquo;t Ask, Don&rsquo;t Tell-based immigration policies are something ICE appears to be interested in targeting.&nbsp; Companies should look at their pre-hire applications, I-9 retention schedules, photocopying policies, Social Security (SS) number-related &ldquo;mismatch&rdquo; issues (they are back!), reverification policies and practices, and other relevant processes to ensure compliance with the law. From an anti-discrimination perspective, these policies and processes should be implemented consistently.<br /> &nbsp;</li> <li> <strong>Conduct Due Diligence.</strong> Whether in the context of a merger, acquisition, or restructuring, understanding the current state of compliance is important. 1. This is particularly important for public companies that could face issues with shareholders over the roles executives may have played in allowing non-compliance to transpire.&nbsp; Accordingly, in cases where I-9 issues were deprioritized before closing, post deal clean up should be addressed as soon as possible.&nbsp; 2.&nbsp; Another area of compliance that is often overlooked is performing diligence on electronic Form I-9 systems.&nbsp; Not all systems are compliant with the electronic I-9 regulations, and ICE is starting to focus on reviewing these systems and fining for flaws.&nbsp; In fact, the government has recently issued fine notices topping the $10 million mark, where threshold issues include audit trails and digital signatures.<br /> &nbsp;</li> <li> <strong>Be Proactive</strong>.&nbsp; Do not ignore government notifications including SS no-match letters, Affordable Care Act health insurance notices, and other unconventional no-match notifications (such as unemployment claims of employees not working at your company), or potential identity theft issues.&nbsp; Do not ignore existing liability on the books, including individuals whose I-9s indicate that they are unauthorized to work.&nbsp; Consider the use of E-Verify and other government recommended best practices.&nbsp; Review IMAGE best practices (https://www.ice.gov/image) and consider attending an HSI IMAGE training.&nbsp; This program has recently been revamped and is currently offering companies immunity to fines in exchange for joining the program. IMAGE is not for every company and the decision to engage with the government should considered be carefully with counsel. Finally, here are a few quick fixes to reduce exposure: <ul> <li> Ensure there is a Form I-9 on file for every active employee;</li> <li> Ensure all Section 3 reverifications are completed where an employee&rsquo;s work authorization has expired and set a cadence to ensure Section 3 is completed timely; and,</li> <li> Maintain copies of identity and work eligibility documents on a going forward basis (if not already being done).<br /> &nbsp;</li> </ul> </li> <li> <strong>Invest in Ongoing Training</strong>.&nbsp; While tight policies and procedures can reduce errors, the churn of HR personnel, combined with ongoing updates to United States Citizenship and Immigration Services (USCIS) guidance, make reinforcement of ongoing training, job aids, and in-house subject matter expertise critical.&nbsp; Aside from imparting technical knowledge, trainings should highlight the importance of the Form I-9 and the need to take the process seriously.&nbsp; Companies should review free government related online resources and organize an accessible library for their I-9 Administrators while also keeping that space up to date.<br /> &nbsp;</li> <li> <strong>Prepare for a Government Visit.</strong>&nbsp; Companies should prepare for a knock at the door by the government.&nbsp; Regardless of industry or company size, this is an event for which every company should have a plan.</li> </ul> <p> This Management Alert,&nbsp;<a href="ICE%20Chills%20the%20Summer%20with%20Thousands%20of%20Audit%20Notices%20Issued%20to%20Businesses%20Nationwide">ICE Chills the Summer with Thousands of Audit Notices Issued to Businesses Nationwide</a>, appeared first on <a href="https://www.bigimmigrationlawblog.com/">Seyfarth&rsquo;s Big Immigration Law Blog</a></p> <hr /> <p> <span style="font-size: 10px;"><sup>1</sup></span>See, Miriam Jordan&rsquo;s New York Times article,<a href="https://www.nytimes.com/2019/07/23/us/ice-raids-apprehensions.html?searchResultPosition=1%20%5bnytimes.com%5d"> More Than 2,000 Migrants Were Targeted in Raids. 35 Were Arrested</a> confirming that 3382 Notices of Inspection were issued as of Monday, July 22, 2019. The article also provides key statistics from Immigration and Customs Enforcement.</p> https://www.seyfarth.com:443/publications/OMM072319-LIT DOJ Antitrust Division Announces Landmark Policy Incentivizing Corporate Compliance https://www.seyfarth.com:443/publications/OMM072319-LIT Tue, 23 Jul 2019 00:00:00 -0400 <p> On July 11, 2019, the Antitrust Division of the United States Department of Justice announced a key policy change that now permits the Division to consider the existence and efficacy of corporate compliance programs in its criminal enforcement investigations. The policy change, as explained by Makan Delrahim (Assistant Attorney General for the Antitrust Division), was designed to encourage proactive and concerted efforts in antitrust compliance.&nbsp; With this change, the Division may now consider, during the charging stage in a criminal antitrust investigation, a company&rsquo;s compliance program both at the time of offense and at the time charging. Further, a company typically not eligible for leniency under the Corporate Leniency Program (which requires a company to provide the government with critical information about the price-fixing conspiracy, i.e., whistleblowing) may now be able to obtain a deferred prosecution agreement, provided that it has in place a strong compliance program.&nbsp;</p> <p> The previous iteration of the Division&rsquo;s longstanding policy, as published in the Department of Justice Manual, provided that: 1) &ldquo;credit should not be given at the charging stage for a compliance program&rdquo; and 2) &ldquo;the nature of some crimes, e.g., antitrust violations, may be such that national law enforcement policies mandate prosecution of corporations notwithstanding the existence of a compliance program.&rdquo; In its revised version of the Department of Justice Manual, credit for compliance programs may now be granted during the charging stage. The Division has also stricken &ldquo;antitrust violations&rdquo; in the provision regarding mandated prosecution, thereby allowing for deferred prosecution agreements (a very beneficial resolution of matters if permitted).</p> <p> The Antitrust Division published a <a href="https://www.seyfarth.com/dir_docs/publications/369115_0-USDOJ-July2019.pdf">guidance document</a> designed to help prosecutors in evaluating compliance programs. Within the sentencing guidelines, the Division notes that antitrust compliance programs may: 1) allow for the Division to grant a three-point reduction in culpability if the program is &ldquo;effective&rdquo;; 2) help determine corporate fines; and 3) help determine the Division&rsquo;s probation recommendations.</p> <p> While the Division acknowledged that there was no &ldquo;formulaic&rdquo; approach to evaluating corporate compliance programs, it nevertheless asked prosecutors to consider three questions:</p> <ol> <li> Is the company&rsquo;s compliance program well designed?</li> <li> Is the program being applied earnestly and in good faith?</li> <li> Does the company&rsquo;s compliance program work?</li> </ol> <p> Companies should consider these three basic questions in designing and rolling out their compliance programs. By implementing these types of policies, companies are better equipped at detecting and/or avoiding criminal antitrust violations, potentially garnering leniency under the Division&rsquo;s Corporate Leniency policy. Robust compliance policies may now, under these changes, further shield companies from liability and the very large cost of litigation of antitrust matters</p> <p> Seyfarth Shaw&rsquo;s Antitrust team is able to assist corporations with creating, administering, and reviewing antitrust compliance programs, as well as criminal investigations.</p> https://www.seyfarth.com:443/publications/TBT072319 New Jersey Governor Clears the Medical Cannabis Haze https://www.seyfarth.com:443/publications/TBT072319 Tue, 23 Jul 2019 00:00:00 -0400 <p> A New Jersey appellate court recently concluded in Wild v. Carriage Funeral Holdings, Inc. (reported in our blog here) that even though New Jersey&rsquo;s Compassionate Use Medical Marijuana Act (the Act) did not &ldquo;require &hellip; an employer to accommodate the medical use of marijuana in any workplace,&rdquo; it also did not &ldquo;immunize an employer&rsquo;s obligation already imposed elsewhere&rdquo; &mdash; such as in discrimination statutes. On July 2, 2019, a few months after that decision, New Jersey Governor Phil Murphy signed a bill that amends the Act&rsquo;s employment provisions to not only clear up previously unanswered questions but also to create additional compliance obligations for employers. The amended law takes effect immediately.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/new-jersey-governor-clears-the-medical-cannabis-haze/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ERISA072319 A Small Administrative Health Care Fix Gets Court Approval (So Far) https://www.seyfarth.com:443/publications/ERISA072319 Tue, 23 Jul 2019 00:00:00 -0400 <p> The hyper-partisan political warfare in the American health care industry is far from over. But another small battle in a federal district court was just resolved in favor of the Trump Administration.<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/07/23/a-small-administrative-health-care-fix-gets-court-approval-so-far/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL072319 Ninth Circuit Narrowly Construes The First Amendment’s Ministerial Exception For Religious Institution Employers https://www.seyfarth.com:443/publications/EL072319 Tue, 23 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In Biel v. St. James School, the Ninth Circuit once again split from other circuit courts, this time by narrowly construed an affirmative defense known as the &ldquo;ministerial exception&rdquo; that bars claims of employment discrimination brought by ministerial employees of religious institutions. The Ninth Circuit recently denied the request for a rehearing en banc, entrenching its departure from other circuits on the ministerial exception.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/ninth-circuit-narrowly-construes-the-first-amendments-ministerial-exception-for-religious-institution-employers/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/eganshrm072319 Chantelle Egan quoted in SHRM https://www.seyfarth.com:443/news/eganshrm072319 Tue, 23 Jul 2019 00:00:00 -0400 <p> Chantelle Egan was quoted in a July 23 story from SRHM, &quot;California Employers May Need to File Pay-Data Reports Similar to EEO-1.&quot; Egan said that if SB 171 is enacted, employers would be required to send a copy of their federal pay-data report to the state. You can read the <a href="https://www.shrm.org/ResourcesAndTools/legal-and-compliance/state-and-local-updates/Pages/California-Employers-May-Need-to-File-Pay-Data-Reports.aspx">full article here</a>.</p> https://www.seyfarth.com:443/news/paparellilaw360072319 Angelo Paparelli quoted in Law360 https://www.seyfarth.com:443/news/paparellilaw360072319 Tue, 23 Jul 2019 00:00:00 -0400 <p> Angelo Paparelli was quoted in a July 23 story from Law360, &quot;New EB-5 Rule Likely To Discourage Investors.&quot; Paparelli said that the higher investment amounts might also discourage investors with EB-5 applications that have already been approved from altering their underlying investments.</p> https://www.seyfarth.com:443/news/greensteinnyt072219 Dennis Greenstein quoted in the New York Times https://www.seyfarth.com:443/news/greensteinnyt072219 Mon, 22 Jul 2019 00:00:00 -0400 <p> Dennis Greenstein was quoted in a July 22 story from the New York Times, &quot;Can I Force My Next-Door Neighbor to Stop Smoking?&quot; You can read the <a href="https://www.nytimes.com/2019/07/22/realestate/can-i-force-my-next-door-neighbor-to-stop-smoking.html">full article here</a>.</p> https://www.seyfarth.com:443/publications/WSE072219 Cool For the Summer https://www.seyfarth.com:443/publications/WSE072219 Mon, 22 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: As the mercury rises, California employers must comply with regulatory requirements to keep their employees cool. Employers should be aware of Cal/OSHA&rsquo;s existing requirements for outdoor workplaces and proposed rules which could turn up the heat on indoor employers.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/states/california/cool-for-the-summer/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/IMM072219 ICE Chills the Summer with Thousands of Audit Notices Issued to Businesses Nationwide https://www.seyfarth.com:443/publications/IMM072219 Mon, 22 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The temperature may be heating up in the nation&rsquo;s capital, but Immigration and Customs Enforcement (ICE) is keeping things cool. Government insiders indicate that agents have been busy serving thousands of Notices of Inspection (NOI) across the country, initiating Form I-9 audits for companies of all shapes and sizes. With the current enforcement climate, there may even be a resurgence of pre-dawn enforcement actions &ndash; otherwise known as &ldquo;raids&rdquo; &ndash; to surprise both workers and their employers. Companies should expect penalties to climb sky high, with recent reports of multi-million dollar fines, especially for non-compliant electronic I-9 systems &mdash; that&rsquo;s right, something that has nothing to do with unlawful workers.<br /> <br /> <a href="https://www.bigimmigrationlawblog.com/2019/07/ice-chills-the-summer-with-thousands-of-audit-notices-issued-to-businesses-nationwide/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH072219 On Demand: It’s Not Just About Movies—It’s About Pay! https://www.seyfarth.com:443/publications/WH072219 Mon, 22 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Employers are starting to consider &ldquo;on demand&rdquo; pay for employees. Before considering whether to implement an &ldquo;on demand&rdquo; pay program, employers should consider laws on wage deduction, wage assignment, and wage statements, as well as the administrative support needed for such a program.<br /> <br /> <a href="https://www.wagehourlitigation.com/gig-economy/on-demand-its-not-just-about-movies-its-about-pay/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP072219 Cool For the Summer https://www.seyfarth.com:443/publications/CP072219 Mon, 22 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: As the mercury rises, California employers must comply with regulatory requirements to keep their employees cool. Employers should be aware of Cal/OSHA&rsquo;s existing requirements for outdoor workplaces and proposed rules which could turn up the heat on indoor employers.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/07/22/cool-for-the-summer/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/adaocr072119 Seyfarth's ADA statistics referenced in the Orange County Register https://www.seyfarth.com:443/news/adaocr072119 Sun, 21 Jul 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a July 21 story from the Orange County Register, &quot;These &lsquo;ghost&rsquo; legal clients are shaking down mom-and-pop businesses under the guise of disability rights.&quot; According to Seyfarth, the number of ADA lawsuits filed in federal court in 2018 hit a record high of 10,163 &mdash; up 34 percent from 2017, when the number was 7,663. You can read the <a href="https://www.ocregister.com/2019/07/21/these-ghost-legal-clients-are-shaking-down-mom-and-pop-businesses-under-the-guise-of-disability-rights/">full article here</a>.</p> https://www.seyfarth.com:443/publications/TS072019 The Increasing Importance of Trade Secrets and Trade Secret Asset Management Explained https://www.seyfarth.com:443/publications/TS072019 Sat, 20 Jul 2019 00:00:00 -0400 <p> As a special feature of our blog&mdash;guest postings by experts, clients, and other professionals&mdash;please enjoy this blog entry from Donal O&rsquo;Connell, Managing Director of Chawton Innovation Services Ltd.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/trade-secrets/the-increasing-importance-of-trade-secrets-and-trade-secret-asset-management-explained/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM071919-LE If Pain, Yes Gain—Part 70: Pennsylvania Supreme Court Orders Steel City to Lift Sick Leave Barrier https://www.seyfarth.com:443/publications/OMM071919-LE Fri, 19 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis</strong>:</em> <em>On Wednesday, July 17, 2019, the Pennsylvania Supreme Court reversed trial and appellate court rulings that found the Pittsburgh Paid Sick Days Act</em>&mdash;<em>first enacted in August 2015</em>&mdash;<em>in violation of state law. For the first time since 2015, Pittsburgh is bracing itself for the impact of the sick leave bug.</em></p> <p> At the time of the <a href="https://www.seyfarth.com/publications/MA052217-LE">30th edition of our &ldquo;If Pain, Yes Gain&rdquo; series</a>, the Pittsburgh paid sick leave (&ldquo;PSL&rdquo;) mandate was on life support. Earlier this week, the mandate was resuscitated by the Pennsylvania Supreme Court (the &ldquo;Court&rdquo;). Sending shock waves through the PSL community, on July 17, 2019, the Pennsylvania Supreme Court reversed the <a href="https://www.seyfarth.com/publications/OMM010516-LE">December 2015 trial court</a> and the <a href="https://www.seyfarth.com/publications/MA052217-LE">May 2017 appellate court</a> decisions, which had found the Pittsburgh Paid Sick Days Act (&ldquo;PSDA&rdquo;) to be in violation of the state Home Rule Charter and Optional Plans Law (&ldquo;Home Rule Law&rdquo;). Notably, however, the decision does not appear to address when the PSDA binds Pittsburgh employers and actually takes effect,&nbsp;although guidance from the city is expected in the near future.</p> <p> The PSDA was enacted in August 2015 and originally scheduled to go into effect on January 11, 2016. But for the lower court decisions, the PSDA would have been&mdash;and now likely will be&mdash;the second local PSL ordinance in effect in Pennsylvania. As we previously noted, the PSDA provides more employee-friendly sick leave benefits than does Philadelphia&rsquo;s PSL ordinance.<a href="#_ftn1" name="_ftnref1" title="">[1]</a></p> <p> Despite a lengthy <a href="http://www.pacourts.us/assets/opinions/Supreme/out/J-72B-2018mo%20-%2010406628568843948.pdf?cb=1">opinion</a> providing extensive historical, factual, and legal background, simply put, the Court ruled that the PSDA does not violate the Home Rule Law because Pittsburgh has &ldquo;express statutory authority to legislate in furtherance of disease control and prevention.&rdquo; Accordingly, the Court reversed the lower courts&rsquo; PSDA rulings and remanded for proceedings consistent with its decision.&nbsp;</p> <p> As of now, assuming all remains the same,<a href="#_ftn2" name="_ftnref2" title="">[2]</a> once effective, the PSDA will require employers with 15 or more employees to provide each eligible employee with one hour of PSL for every 35 hours the employee works in Pittsburgh, up to 40 hours of PSL per year. Employers with fewer than 15 employees will be required to provide their employees with one hour of <u>unpaid</u> sick leave for every 35 hours worked in Pittsburgh, up to 24 hours per year. After the law&rsquo;s first anniversary, employers with fewer than 15 employees will be required to provide&nbsp;<u>paid</u>&nbsp;sick leave at the same accrual rate and up to the same 24-hour cap as set forth during the Act&rsquo;s inaugural year.&nbsp;&nbsp;</p> <p> We will continue to monitor and provide updates on what comes next for the PSDA and Pittsburgh employers. In the meantime, here are some steps to consider:</p> <ul> <li> Review existing sick leave or paid time off policies in preparation for implementing new policies or revising existing policies to satisfy the PSDA;</li> <li> Review policies on attendance, anti-retaliation, conduct, and discipline for compliance with the&nbsp;PSDA;</li> <li> Be on the lookout for further information on the PSDA including a PSL website and release of regulations, model notices, and other administrative guidance; and</li> <li> Monitor lower court proceedings and legislative developments involving the PSDA.</li> </ul> <p> With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this law and sick leave requirements generally.</p> <p> To stay up-to-date on Paid Sick Leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to <a href="mailto:sickleave@seyfarth.com">sickleave@seyfarth.com</a>.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> For more information on the PSDA as passed, see our prior alerts <a href="https://www.seyfarth.com/publications/MA080515-LE">here</a> and <a href="https://www.seyfarth.com/publications/OMM101315-LE">here</a>. For information on Philadelphia&rsquo;s PSL ordinance, see our prior alert <a href="https://www.seyfarth.com/publications/MA021715-LE">here</a>.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> On February 1, 2019, <a href="https://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&amp;sessYr=2019&amp;sessInd=0&amp;billBody=H&amp;billTyp=B&amp;billNbr=0331&amp;pn=0309">HB 331</a> was introduced in the state House of Representatives and referred to the Committee on Labor and Industry, where it has since remained. Titled &ldquo;An Act Amending Title 53 . . . Of the Pennsylvania Consolidated Statutes, in preemptions, providing for employer mandates by municipalities,&rdquo; HB 331 would likely invalidate the PSDA, as well as the Philadelphia PSL ordinance, as it would preempt local ordinances regulating paid or unpaid employee leave enacted from January 1, 2015 on.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/FutureEnterprise071919 Increasing Efficiency, Accuracy and Speed: the Use of Bot Technology in Real Estate Transactions https://www.seyfarth.com:443/publications/FutureEnterprise071919 Fri, 19 Jul 2019 00:00:00 -0400 <p> The term &ldquo;bot&rdquo; actually stands for &quot;robot&quot; and is a software robot device that is an automated program that runs through various types of technologies.[1] There are many different types of bots that execute certain commands based upon the programming used. One example of this programming is RPA, which stands for Robotic Process Automation. RPA is the use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks that previously required humans to perform. These tasks can include queries, calculations and maintenance of records and transactions. [2] To learn more about how bots work, visit this animated video.[3]<br /> <br /> <a href="https://www.futureenterprise.com/blog/2019/7/19/increasing-efficiency-accuracy-and-speed-the-use-of-bot-technology-in-real-estate-transactions">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/weisswgnradio071919 Philippe Weiss interviewed on WGN Radio https://www.seyfarth.com:443/news/weisswgnradio071919 Fri, 19 Jul 2019 00:00:00 -0400 <p> Philippe Weiss was interviewed July 19th on WGN Radio, &quot;Wintrust Business Lunch.&quot; Weiss cautioned companies to avoid their own &ldquo;send her back&rdquo; situation in the workplace. You can listen to the full interview at minute 11:52 <a href="https://wgnradio.com/2019/07/19/wintrust-business-lunch-7-19-19-digital-privacy-occupational-burn-out-coopers-hawk-bought-out/">here</a>.</p> https://www.seyfarth.com:443/news/johnsonlaw360071919 Randel Johnson quoted in Law360 https://www.seyfarth.com:443/news/johnsonlaw360071919 Fri, 19 Jul 2019 00:00:00 -0400 <p> Randel Johnson was quoted in a July 19 story from Law360, &quot;Trump Labor Pick Scalia Seen As Deregulatory Force.&quot; Johnson said that Scalia knows what goes into defending a regulation because he&rsquo;s been on the other side, challenging regulations.</p> https://www.seyfarth.com:443/publications/PM071819-LE Seyfarth Shaw Policy Matters Newsletter - July 18, 2019 https://www.seyfarth.com:443/publications/PM071819-LE Thu, 18 Jul 2019 00:00:00 -0400 <p> <strong>Minimum Wage Bill Passes House . . .</strong>&nbsp; Today, the Raise the Wage Act (<a href="https://www.congress.gov/bill/116th-congress/house-bill/582">H.R. 582</a>) passed the House <a href="http://clerk.house.gov/evs/2019/roll496.xml">231-199</a>.&nbsp; The Act would raise the federal minimum wage to $15 per hour over a five-year period, then annually index the minimum wage to the percentage increase in the median hourly wage for all employees.&nbsp; It would also (1) increase the tipped employee wage by no more than $1.50 per year until it equals the minimum wage (a minimum of 9 years after enactment); and (2) immediately eliminate mandatory tip pooling.&nbsp; Finally, the Act would gradually eliminate the subminimum wage rates under section 14(c), as well as for newly-hired employees under 20 years old.&nbsp; Majority Leader McConnell (R-KY) has said that the bill will not be taken up by the Senate.<br /> &nbsp;<br /> <strong>. . . As Does the Cadillac Tax Repeal.</strong>&nbsp; The House voted overwhelmingly (<a href="http://clerk.house.gov/evs/2019/roll493.xml">419-6</a>) to pass the Middle Class Health Benefits Tax Repeal Act (<a href="https://www.congress.gov/bill/116th-congress/house-bill/748">H.R. 748</a>), which would repeal the so-called Cadillac tax on high-cost health insurance plans as part of the Affordable Care Act (ACA).&nbsp; The tax was intended to deter high cost health care plans and to finance parts of the ACA and repeal has been long supported by both the business community and organized labor.&nbsp;&nbsp;Nevertheless, consideration by the Senate is uncertain due to general fears of opening up debate on health care on the Senate Floor.</p> <p> <strong>Pizzella Poised to Take DOL Reins.</strong>&nbsp; As has been now widely reported, Secretary of Labor Acosta recently resigned amid controversy over how he handled a plea deal related to Jeffrey Epstein while serving as U.S. Attorney in Miami.&nbsp; Tomorrow, Deputy Secretary Patrick Pizzella will begin his tenure as Acting Secretary.&nbsp; Pizzella is well known within the Washington, D.C. business labor community, served previously at the Department under Secretary Elaine Chao, and is expected to push forward with the Department of Labor&#39;s agenda, including the overtime, joint employer, and regular rate rulemakings.&nbsp; Due to his lengthy experience with the Department, Pizzella is likely to be keenly aware of&mdash;and interested in addressing&mdash;Departmental management and operational issues, as well as the subregulatory agenda.&nbsp; Whether Pizzella will be formally nominated to be Secretary remains to be seen, but the Department is in more-than-capable hands as we await confirmation of Acosta&rsquo;s successor.<br /> <br /> <strong>New York and New Jersey Continue Pay Equity Legislative Efforts.</strong>&nbsp; The legislatures of New York and New Jersey each recently passed salary history bans and other developments in the equal pay arena, continuing the state and local efforts to tackle these issues.&nbsp; The New York provisions take effect in January 2020, while the New Jersey provision awaits the Governor&rsquo;s (expected) signature.&nbsp; For detailed analysis of the provisions, see Seyfarth&rsquo;s <a href="https://www.seyfarth.com/publications/PE071519-LE">Client Alert</a>.</p> <p> <strong>New Hampshire Bans Low-Wage Non-Competes.</strong>&nbsp; States remain active on a variety of labor and employment fronts, one of which is the effort to ban non-compete agreements in whole or in part.&nbsp; New Hampshire recently joined the non-compete ban train with a prohibition on non-competes for any employee earning 200% of the federal minimum wage (currently, $14.50 per hour).&nbsp; For more, see the Trading Secrets <a href="https://www.tradesecretslaw.com/2019/07/articles/legislation-2/new-hampshire-governor-bans-non-compete-agreements-for-low-wage-employees/">blog</a>.&nbsp;&nbsp;</p> https://www.seyfarth.com:443/publications/GPW071819 CCPA Amendments – Employees and the Loyalty Program Change Nobody is Talking About https://www.seyfarth.com:443/publications/GPW071819 Thu, 18 Jul 2019 00:00:00 -0400 <p> Those interested in keeping up with the latest news impacting the California Consumer Privacy Act have been heavily focused on AB 25, and its potential to exclude employees from the scope of the CCPA. In a marathon late-night session, the California Senate Judiciary Committee weighed in July 11 on various bills &ndash; including AB 25. An while AB 25 was part of the Committee debate, that amendment may actually make the bill less useful than first intended. Additionally, another bill made it out of committee which has the potential of a far greater impact than anyone seems to be noticing.<br /> <br /> <a href="https://www.globalprivacywatch.com/2019/07/ccpa-amendments-employees-and-the-loyalty-program-change-nobody-is-talking-about/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL071819 Is Your Employee As Fit As A Fiddle? https://www.seyfarth.com:443/publications/EL071819 Thu, 18 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: While employees often will toot their own horn, employers sometimes may have concerns about their ability to safely perform their job. If this situation rings a bell, it will be music to your ears to hear that it may be possible to request employees to undergo a medical examination to certify their fitness for duty.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/is-your-employee-as-fit-as-a-fiddle/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CDL071819 CCPA Amendments: Again Employees and the Loyalty Program Change Nobody is Talking About https://www.seyfarth.com:443/publications/CDL071819 Thu, 18 Jul 2019 00:00:00 -0400 <p> Those interested in keeping up with the latest news impacting the California Consumer Privacy Act have been heavily focused on AB 25, and its potential to exclude employees from the scope of the CCPA. In a marathon late-night session, the California Senate Judiciary Committee weighed in July 11 on various bills&mdash;including AB 25. An while AB 25 was part of the Committee debate, that amendment may actually make the bill less useful than first intended. Additionally, another bill made it out of committee which has the potential of a far greater impact than anyone seems to be noticing.<br /> <br /> <a href="https://www.carpedatumlaw.com/2019/07/ccpa-amendments-again-employees-and-the-loyalty-program-change-nobody-is-talking-about/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT071819 The Week in Weed: July 19, 2019 https://www.seyfarth.com:443/publications/TBT071819 Thu, 18 Jul 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/the-week-in-weed-july-19-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA071719-LE If Pain, Yes Gain—Part 69: Despite a New Effort to Zap the Local Texas Sick Leave Bug, Dallas and San Antonio Take Steps to Enforce Looming Ordinances https://www.seyfarth.com:443/publications/MA071719-LE Wed, 17 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis: </strong>On Monday, a lawsuit seeking an injunction of the San Antonio Paid Sick Leave Ordinance&rsquo;s August 1, 2019 effective date was filed in a Bexar County District Court. The lawsuit was filed on the same constitutional grounds that caused the Texas Court of Appeals for the Third District to indefinitely suspend the Austin sick leave ordinance&rsquo;s October 2018 effective date pending further litigation. A temporary injunction hearing involving the San Antonio ordinance is scheduled for July 24.</em></p> <p> <em>Despite this lawsuit and the appeal of the Austin ruling pending before the Texas Supreme Court, San Antonio and Dallas enforcement agencies appear ready to proceed with their respective ordinances as of August 1, 2019, as both have released model posters and administrative guidance as recently as this week.</em></p> <p> As summer temperatures soar, the battle in Texas between local paid sick leave (&ldquo;PSL&rdquo;) enforcement and preemption continues to heat up. <a href="https://www.seyfarth.com/publications/OMM053119-LE3">After state legislative efforts to preempt municipal Texas PSL ordinances failed</a> at the close of the session in May 2019, employers were left bracing for the impact of the San Antonio and Dallas PSL ordinances&rsquo; respective August 1, 2019 effective dates (for most businesses).<a href="#_ftn1" name="_ftnref1" title="">[1]</a> Lacking a legislative cure to the San Antonio and Dallas PSL ordinances, PSL preemption efforts are changing course to the courthouse &mdash; at least in San Antonio for now.</p> <p> In particular, on July 15, 2019, several businesses and associations filed a lawsuit seeking an injunction of the San Antonio ordinance&rsquo;s August 1 effective date. A temporary injunction hearing is scheduled for July 24, 2019. As of now, a similar lawsuit involving the Dallas paid sick leave ordinance has not been filed.</p> <p> Arguments against the San Antonio ordinance focus on the same constitutional grounds that delivered a blow to the Austin paid sick leave ordinance last year and have since held it in abeyance. As a reminder, in November 2018, the Texas Court of Appeals for the Third District (&ldquo;Third District&rdquo;) ordered a temporary injunction of the Austin ordinance after finding it to be in conflict with the Texas Minimum Wage Act.<a href="#_ftn2" name="_ftnref2" title="">[2]</a> The City of Austin filed a petition for review of the Third District&#39;s decision with the Texas Supreme Court, which is currently pending.<a href="#_ftn3" name="_ftnref3" title="">[3]</a></p> <p> Efforts to immunize Texas localities from PSL mandates have not slowed down Dallas and San Antonio&rsquo;s PSL activity. Over the last month, both cities have launched PSL websites. The websites include, among other things, the following resources and administrative guidance:<a href="#_ftn4" name="_ftnref4" title="">[4]</a></p> <ul> <li> <em>San Antonio PSL FAQs:</em> San Antonio released its most recent set of <a href="https://www.sanantonio.gov/Portals/0/Files/Atty/Regulatory/PaidSickLeave/FAQs.pdf">PSL FAQs</a> on July 1, 2019. Although extensive, a key highlight includes clarity that &ldquo;[e]mployer size is determined based on the number of employees that perform 80 hours of work for an employer within the City of San Antonio in a year.&rdquo;<a href="#_ftn5" name="_ftnref5" title="">[5]</a></li> <li> <em>Dallas and San Antonio Posters:</em> Both the Dallas and San Antonio ordinances require that posters be displayed in conspicuous places where notices to employees are posted in English and other languages made available by the applicable enforcement agency. For compliance with these mandates, Dallas recently released both <a href="https://dallascityhall.com/departments/fairhousing/paid-sick-leave/PublishingImages/Pages/default/Paid%20Sick%20Ordinance%20Poster%20ENGLISH-page-001.jpg">English</a> and <a href="https://dallascityhall.com/departments/fairhousing/paid-sick-leave/PublishingImages/Pages/default/Paid%20Sick%20Ordinance%20Poster%20SPANISH-page-001.jpg">Spanish</a> versions of its PSL poster, and on the same date that the lawsuit against the San Antonio ordinance was filed, San Antonio released an <a href="https://www.sanantonio.gov/Portals/0/Files/health/PaidSickLeave/posterEmployeeRights.pdf">English version of its PSL poster</a>. <ul> <li> <u>Employee Handbook Notice</u>: It is currently unclear whether these model PSL posters are sufficient to satisfy each ordinance&rsquo;s requirement that employers who provide an employee handbook to their workers include a notice of employee rights and remedies under the applicable ordinance in the handbook.</li> </ul> </li> </ul> <p> <br /> <strong>Employer Takeaway</strong></p> <p> As of now, and despite a new lawsuit that threatens to delay at least the San Antonio PSL ordinance, Dallas and San Antonio appear prepared to proceed with their respective PSL ordinances on August 1, 2019. We will continue to monitor PSL developments in Texas.&nbsp;In the meantime, here are some steps for Dallas and San Antonio employers to consider:</p> <ul> <li> Review existing sick leave policies and either implement new policies or revise existing policies to satisfy the Dallas and San Antonio ordinances.</li> <li> Review policies on attendance, anti-retaliation, conduct, and discipline for compliance with the Dallas and San Antonio ordinances.</li> <li> Be on the lookout for further information on both ordinances including release of regulations, further model notices, and other administrative guidance.</li> <li> Monitor judicial developments involving the Dallas, San Antonio, and Austin PSL ordinances.</li> </ul> <p> <br /> With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with these laws and sick leave requirements generally.</p> <p> To stay up-to-date on Paid Sick Leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here </a>to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to <a href="mailto:sickleave@seyfarth.com">sickleave@seyfarth.com</a>.</p> <p> &nbsp;</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> For more information on Texas paid sick leave see our prior alerts&nbsp;<a href="https://www.seyfarth.com/publications/MA022318-LE2">here</a>,&nbsp;<a href="https://www.seyfarth.com/publications/MA082118-LE">here</a>,&nbsp;<a href="https://www.seyfarth.com/publications/OMM112118-LE">here</a>, and&nbsp;<a href="https://www.seyfarth.com/publications/MA050719-LE">here</a>.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> <em>Tex. Ass&#39;n of Bus. v. City of Austin</em>, 565 S.W.3d 425 (Tx. App. 2018).</p> </div> <div id="ftn3"> <p> <a href="#_ftnref3" name="_ftn3" title="">[3]</a> The docket for the appeal pending before the state Supreme Court is available <a href="http://www.search.txcourts.gov/Case.aspx?cn=19-0025&amp;coa=cossup">here</a>.</p> </div> <div id="ftn4"> <p> <a href="#_ftnref4" name="_ftn4" title="">[4]</a> Links to the Dallas and San Antonio PSL websites respectively are provided <a href="https://dallascityhall.com/departments/fairhousing/paid-sick-leave/Pages/default.aspx">here</a> and <a href="https://www.sanantonio.gov/Health/Paid-Sick-Leave">here</a>.</p> </div> <div id="ftn5"> <p> <a href="#_ftnref5" name="_ftn5" title="">[5]</a> <em>See</em> City of San Antonio PSL Ordinance FAQ No. 17. As a reminder, the ordinance is <strong>not</strong> scheduled to take effect for employers with fewer than six employees in the preceding 12 months until August 1, 2021. Employer size also comes into play when determining an employer&rsquo;s accrual cap and year-end carryover cap obligations. Specifically, &ldquo;medium or large employers,&rdquo; which are defined as employers with more than 15 employees at any time in the preceding 12 months, are subject to 64-hour accrual and carryover caps, while smaller employers are subject to 48-hour accrual and carryover caps. Although the Dallas ordinance contains the same &ldquo;employer size&rdquo; provisions as the San Antonio ordinance, employers are reminded that the FAQ clarification cited above is specific to San Antonio.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/news/adafn071719 Seyfarth's ADA statistics referenced in Footwear News https://www.seyfarth.com:443/news/adafn071719 Wed, 17 Jul 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a July 17 story from Footwear News, &quot;Are E-Commerce Sites Covered by Americans With Disabilities Act? Retailers Ask Supreme Court to Weigh In.&quot; Website accessibility lawsuits nearly tripled last year, from 814 in 2017 to at least 2,258 in 2018, according to an analysis by Seyfarth. You can read the <a href="https://footwearnews.com/2019/business/legal-news/ada-ecommerce-websites-accessibility-americans-with-disabilities-1202805008/">full article here</a>.</p> https://www.seyfarth.com:443/news/workingmother071619 Seyfarth Named a “Best Law Firm for Women” for 9th Year by Working Mother https://www.seyfarth.com:443/news/workingmother071619 Tue, 16 Jul 2019 00:00:00 -0400 <p> CHICAGO (July 16, 2019) -- Seyfarth Shaw LLP announced today that it has been named to <em>Working Mother </em>magazine&rsquo;s annual &ldquo;Best Law Firms for Women&rdquo; list for the ninth straight year. In partnership with the <em>ABA Journal</em>, this list recognizes 60 firms for their best practices in retaining and promoting women lawyers.</p> <p> &ldquo;We are excited and proud to be included on this distinguished list once again. This honor is a direct reflection of the firm&rsquo;s continued dedication to fostering the best environment for women to succeed and advance in their careers,&rdquo; said Ellen McLaughlin, chair of Seyfarth Women&rsquo;s Network.</p> <p> The full list, available <a href="https://www.workingmother.com/best-law-firms-for-women-2019">here</a>, highlights law firms where on average more than a third of new equity partners are women. According to <em>Working Mother</em>, these firms also increasingly offer extended parental-leave benefits and encourage more lawyers to work remotely and use flexible hours.</p> <p> &ldquo;It&rsquo;s heartening to see the progress women lawyers are making at firms committed to fully utilizing these attorneys&rsquo; abilities,&rdquo; said Meredith Bodgas, editor-in-chief of <em>Working Mother</em>. &ldquo;The war for talent is increasing incentives for law firms to invest in retaining women lawyers, which is why we&rsquo;re seeing more women&rsquo;s initiatives and parental-support groups. By highlighting what our top firms are doing, we hope others in the legal community will follow.&rdquo;</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 16 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> https://www.seyfarth.com:443/publications/OMM071619-LE New Jersey Governor Clears the Medical Cannabis Haze https://www.seyfarth.com:443/publications/OMM071619-LE Tue, 16 Jul 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>A New Jersey appellate court recently concluded in Wild v. Carriage Funeral Holdings, Inc. (reported in our blog <a href="https://www.blunttruthlaw.com/2019/04/nj-medical-pot-users-case-not-up-in-smoke-accommodations-might-be-required-despite-weed-statutes-saying-otherwise/">here</a>) that even though New Jersey&rsquo;s Compassionate Use Medical Marijuana Act (the Act) did not &ldquo;require &hellip; an employer to accommodate the medical use of marijuana in any workplace,&rdquo; it also did not &ldquo;immunize an employer&rsquo;s obligation already imposed elsewhere&rdquo; &mdash; such as in discrimination statutes. On July 2, 2019, a few months after that decision, New Jersey Governor Phil Murphy signed a bill that amends the Act&rsquo;s employment provisions to not only clear up previously unanswered questions but also to create additional compliance obligations for employers. The amended law takes effect immediately.</em></p> <p> The New Jersey legislature adopted the Act in 2009 and, at that time, specifically stated that the law did not require an employer &ldquo;to accommodate the medical use of marijuana in any workplace.&rdquo; That said, as the appellate court noted in <em>Wild v. Carriage Funeral Holdings, Inc.</em>, medical cannabis users may be able to bring suit against an employer for disability discrimination under the state&rsquo;s Law Against Discrimination. While the appellate court did not rule on the merits of any disability discrimination claim, it did let the case proceed.</p> <p> More recently, however, New Jersey amended its law, now called the Jake Honig Compassionate Use Medical Cannabis Act, to remove the language that resulted in the <em>Wild</em> litigation and include new applicant/employee-side protections. Specifically:</p> <ul> <li> Employers are prohibited from taking any &ldquo;adverse employment action&rdquo; against a &ldquo;registered qualifying patient&rdquo; based solely on the person&rsquo;s status as a registered patient. An &ldquo;adverse employment action&rdquo; is defined to mean &ldquo;refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.&rdquo;</li> <li> Employers must provide applicants or employees who test positive for cannabis written notice of their right to explain and their right to provide a &ldquo;legitimate medical explanation&rdquo; for the positive test result. The employee has three working days to provide such information, which can include evidence that a health care practitioner has authorized the use of medical cannabis, proof that the applicant or employee is a registered patient, or both. Or, within that same three-day timeframe, the applicant or employee can request a confirmatory retest of the original sample at their own expense.</li> </ul> <p> The silver lining for employers is the amended law includes two employer-side protections. First, the law does not restrict an employer in its ability to take action against an employee who uses or possesses &ldquo;intoxicating substances&rdquo; during work hours or on the premises of the workplace outside of work hours. In addition, the amendment states that nothing in the law should be viewed as requiring an employer to commit any act that would cause the employer to be in violation of federal law, that would result in the loss of a licensing-related benefit pursuant to federal law, or that would result in the loss of a federal contract or federal funding.</p> <p> New Jersey is not alone in providing employment protections to applicants and employees using medical cannabis. In recent years, more and more states are passing laws, or their courts are interpreting existing laws, to protect medical cannabis users, including in Arizona, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Nevada, New York, Oklahoma, and Rhode Island. It is likely that list will grow. Employers in all jurisdictions should exercise caution when dealing with applicants and employees using medical cannabis. Before taking any action against medical cannabis users, employers should review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.</p> <p> Seyfarth Shaw will continue to monitor legal developments at the federal and state level.</p> https://www.seyfarth.com:443/publications/TS071619 First UK Supreme Court Decision on Restrictive Covenants for 100 years https://www.seyfarth.com:443/publications/TS071619 Tue, 16 Jul 2019 00:00:00 -0400 <p> The Supreme Court in the UK, the highest court in the country, last week ruled on a restrictive covenant case for the first time in 100 years [Tillman v Egon Zehnder Ltd [2019] UKSC 32 (3 July 2019)]. It has clarified important points on interpretation, the key takeaway being it will now be easier for employers to enforce covenants against departing employees.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/international-2/first-uk-supreme-court-decision-on-restrictive-covenants-for-100-years/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS071619a New Hampshire Governor Bans Non-Compete Agreements for Low-Wage Employees https://www.seyfarth.com:443/publications/TS071619a Tue, 16 Jul 2019 00:00:00 -0400 <p> On July 11, 2019, Governor Sununu signed S.B. 197 into law. S.B. 197 prohibits an employer from requiring an employee who makes 200% of the federal minimum wage ($14.50) to sign a non-compete agreement restricting the employee from working for another employer for a specified period of time or within a specific geographic area. Any &ldquo;noncompete agreement entered into between an employer and a low-wage employee shall be void and unenforceable.&rdquo; The new law will take effect in September. S.B. 197 had bipartisan sponsorship.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/legislation-2/new-hampshire-governor-bans-non-compete-agreements-for-low-wage-employees/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL071619 Supreme Court Issues Decision Significantly Expanding the Scope of FOIA’s Confidentiality Exemption https://www.seyfarth.com:443/publications/EL071619 Tue, 16 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On June 24, 2019, the Supreme Court issued its decision in Food Marketing Institute v. Argus Leader Media and resolved fractured circuit splits about the parameters for when the government may withhold information from a Freedom of Information Act (&ldquo;FOIA&rdquo;) request based on responsive information being confidential or a trade secret.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/supreme-court-issues-decision-significantly-expanding-the-scope-of-foias-confidentiality-exemption/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT071619 CBD: Uncertainty for Restaurants and Retailers https://www.seyfarth.com:443/publications/TBT071619 Tue, 16 Jul 2019 00:00:00 -0400 <p> In Dallas, a yoga studio offers CBD-infused kombucha.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/cbd-uncertainty-for-restaurants-and-retailers/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA071519-LE2 If Pain (or Anything Else), Yes Gain—Part 68: Nevada Becomes Second State to Enact Paid Time Off Law https://www.seyfarth.com:443/publications/MA071519-LE2 Mon, 15 Jul 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Last month, Nevada became the second state to enact a mandatory paid time off law. The law, which goes into effect on January 1, 2020, requires employers to allow employees to use earned paid leave for any reason.</em></p> <p> On June 12, 2019, Governor Steve Sisolak of Nevada signed Senate Bill No. 312 (the &ldquo;Bill&rdquo;), which requires certain employers to provide eligible employees with paid time off (&ldquo;PTO&rdquo;), which employees can use for any reason. The law is only the second PTO law to have passed in the United States, and requires employers to allow employees to use earned paid leave for any reason.<a href="#_ftn1" name="_ftnref1" title="">[1]</a> While states have generally regulated how vacation or PTO must be accrued, paid out upon termination, etc., until recently, states have not mandated that employers provide PTO.&nbsp; The Bill began as a mandatory paid sick leave proposal, similar to the sick leave laws that exist in eleven states and more than two dozen municipalities around the country.<a href="#_ftn2" name="_ftnref2" title="">[2]</a> However, in April 2019, the Bill was amended, to among other things, permit employees to use paid time off without providing a reason to their employer for the use.</p> <p> Employers have until January 1, 2020, to develop a plan that is complaint with the Nevada PTO law. In the meantime, here are some of the highlights of the Nevada PTO law:</p> <ul> <li> <strong>Covered Employers:</strong> The Nevada PTO law applies to private employers who have fifty or more employees in private employment in the State. The law further provides that it does not apply to an employer who, pursuant to a contract, policy, collective bargaining, or other agreement, provides employees with a policy for paid leave or a policy for paid time off to all scheduled employees at a rate of at least 0.01923 hours of paid leave per hour of work performed.</li> <li> <strong>Eligible Employees:</strong> The Nevada PTO law does not define employee, but provides that temporary, seasonal, and on-call employees are not covered under the law.</li> <li> <strong>Accrual:</strong> Employees are entitled to accrue paid leave at the rate of at least 0.01923 hours for each hour of work performed.</li> <li> <strong>Frontloading: </strong>Rather than permit accrual, employers may provide employees the total number of hours of paid leave that the employee is entitled to accrue in a benefit year (i.e. forty hours) on the first day of each benefit year.</li> <li> <strong>Carryover:</strong> If employees accrue paid leave, employers must permit employees to carry over up to a maximum of forty hours of paid leave to the following benefit year. The law, however, does not require employers to permit carry over if the employer frontloads paid leave at the start of the year.</li> <li> <strong>Usage Cap:</strong> An employer may limit the amount of paid leave an employee uses to forty hours per benefit year.</li> <li> <strong>Benefit Year:&nbsp; </strong>Under the Nevada PTO law, benefit year means a 365-day period used by an employer when calculating the accrual of paid leave.</li> <li> <strong>Increments of Use:</strong> Although an employer may set a minimum increment of paid leave that an employee may use at any one time, such increment cannot exceed four hours.</li> <li> <strong>Usage of PTO: </strong>An employer must allow an employee to use paid leave beginning on the 90th calendar day of the employee&rsquo;s employment.</li> <li> <strong>Reasons for Use:</strong> Employee may use available paid leave without providing a reason to his or her employer for such use.</li> <li> <strong>Notice to Employer: </strong>Employees must give notice to their employer as soon as practicable.</li> <li> <strong>Recordkeeping: </strong>The Nevada PTO law requires employers to maintain a record of the receipt or accrual and use of paid leave for each employee for a one-year period following the entry of such information in the record. Upon request, the employer must make those records available for inspection by the Labor Commissioner.</li> <li> <strong>Employee Paystub Notification: </strong>An employer is required provide to each employee on each payday an accounting of the hours of paid leave available for use by that employee.</li> <li> <strong>New Employer Grace Period: </strong>The Nevada PTO law provides for a grace period for new employers.&nbsp; Specifically. for the first 2 years of operation, an employer is not required to comply with the law.</li> </ul> <p> Employers should begin taking steps to comply with the Nevada PTO law before its January 1, 2020, effective date. Here are some steps to consider:</p> <ul> <li> Review existing paid time off policies and either implement new policies or revise existing policies to satisfy the Nevada PTO law;</li> <li> Monitor the Nevada Department of Labor&rsquo;s website for information on the PTO law, including draft and final rules; and</li> <li> Train supervisory and managerial employees, as well as HR, on the new requirements.</li> </ul> <p> We will continue to monitor and provide updates on Nevada paid leave developments as the law&rsquo;s effective date approaches and on any subsequent changes.</p> <p> As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Law and sick leave requirements generally. To stay up-to-date on paid leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> <a href="https://www.seyfarth.com/publications/MA053119-LE">Maine</a> was the first state to enact a mandatory paid time off law. Also, the <a href="https://www.seyfarth.com/publications/MA062819-LE2">New York City</a> Council is considering amending the current sick/safe time ordinance yet again to add a mandatory paid personal time component.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> The existing statewide paid sick leave laws include: (1)&nbsp;<a href="http://www.seyfarth.com/publications/OMM062714-LE">Connecticut</a>; (2)&nbsp;<a href="http://www.calpeculiarities.com/2015/07/14/at-last-amendments-to-cas-paid-sick-leave-law-signed-by-governor/">California</a>; (3)&nbsp;<a href="http://www.seyfarth.com/publications/MA061915-LE">Massachusetts</a>; (4)&nbsp;<a href="https://www.seyfarth.com/publications/MA020416-LE">Oregon</a>; (5)&nbsp;<a href="http://www.seyfarth.com/publications/MA031716-LE">Vermont</a>; (6)&nbsp;<a href="https://www.seyfarth.com/publications/MA120817-LE">Arizona</a>; (7)&nbsp;<a href="http://www.seyfarth.com/publications/MA102717-LE">Washington</a>; (8)&nbsp;<a href="https://www.seyfarth.com/publications/MA020918-LE">Maryland</a>; (9)&nbsp;<a href="http://www.seyfarth.com/publications/MA061218-LE">Rhode Island</a>; (10)&nbsp;<a href="https://www.seyfarth.com/publications/MA102618-LE2">New Jersey</a>; and (11) <a href="https://www.seyfarth.com/publications/MA031419-LE">Michigan</a>. The existing local paid sick leave ordinances include: (1) San Francisco, CA; (2) Washington, D.C.; (3) Seattle, WA; (4) Long Beach, CA; (5) SeaTac, WA; (6) New York City, NY; (7) Los Angeles, CA (2 laws); (8) Oakland, CA; (9) Philadelphia, PA; (10) Tacoma, WA; (11) Emeryville, CA; (12) Montgomery County, MD; (13) Pittsburgh, PA; (14) Santa Monica, CA; (15) Minneapolis, MN; (16) San Diego, CA; (17) Chicago, IL; (18) Berkeley, CA; (19) Saint Paul, MN; (20) Cook County, IL; (21) Austin, TX; (22) Duluth, MN; (23) San Antonio, TX; (24) Westchester County, NY; and (25) Dallas, TX. Some of the above local sick leave ordinances are not yet in effect, either because their effective date is scheduled for the coming months or has been delayed as part of an ongoing legal challenge.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/CCD071519 Industries Seek Uniform Federal Privacy Law To Preempt Inconsistent Patchwork of State Laws https://www.seyfarth.com:443/publications/CCD071519 Mon, 15 Jul 2019 00:00:00 -0400 <p> On Thursday, July 11, 2019, a diverse group of trade associations spanning numerous industries, including retail, telecom, manufacturing, and food and beverage, urged Congress to enact a consumer privacy law. In a letter to the Senate and House commerce committees, the coalition of 27 industry groups asked Congress &ldquo;to act quickly to adopt a robust and meaningful national consumer privacy bill to provide uniform privacy protections for all Americans.&rdquo; The coalition said that a &ldquo;comprehensive federal privacy law that establishes a single technology and industry-neutral framework for our economy&rdquo; is necessary because &ldquo;consumers&rsquo; privacy protections should not vary state by state.&rdquo; The coalition noted that &ldquo;a uniform federal framework&rdquo; would &ldquo;provide certainty for businesses and consumers alike.&rdquo;<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/07/industries-seek-uniform-federal-privacy-law-to-preempt-inconsistent-patchwork-of-state-laws/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/GPW071519 Industries Seek Uniform Federal Privacy Law To Preempt Inconsistent Patchwork of State Laws https://www.seyfarth.com:443/publications/GPW071519 Mon, 15 Jul 2019 00:00:00 -0400 <p> On Thursday, July 11, 2019, a diverse group of trade associations spanning numerous industries, including retail, telecom, manufacturing, and food and beverage, urged Congress to enact a consumer privacy law. In a letter to the Senate and House commerce committees, the coalition of 27 industry groups asked Congress &ldquo;to act quickly to adopt a robust and meaningful national consumer privacy bill to provide uniform privacy protections for all Americans.&rdquo; The coalition said that a &ldquo;comprehensive federal privacy law that establishes a single technology and industry-neutral framework for our economy&rdquo; is necessary because &ldquo;consumers&rsquo; privacy protections should not vary state by state.&rdquo; The coalition noted that &ldquo;a uniform federal framework&rdquo; would &ldquo;provide certainty for businesses and consumers alike.&rdquo;<br /> <br /> <a href="https://www.globalprivacywatch.com/2019/07/industries-seek-uniform-federal-privacy-law-to-preempt-inconsistent-patchwork-of-state-laws/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/vunpr071519 Minh Vu interviewed on NPR's Marketplace https://www.seyfarth.com:443/news/vunpr071519 Mon, 15 Jul 2019 00:00:00 -0400 <p> Minh Vu was interviewed July 15th on NPR&#39;s Marketplace, &quot;Businesses face lawsuits over website accessibility.&quot; Vu said that there should have been a set of regulations with an orderly process that businesses could understand and follow. She said that we got none of that. You can listen to the <a href="https://www.marketplace.org/2019/07/15/businesses-face-lawsuits-over-website-accessibility/">full interview here</a>.</p> https://www.seyfarth.com:443/news/shermancnbc071519 Andrew Sherman quoted in CNBC.com https://www.seyfarth.com:443/news/shermancnbc071519 Mon, 15 Jul 2019 00:00:00 -0400 <p> Andrew Sherman was quoted in a July 15 story from CNBC.com, &quot;These are the best places to launch a small business in America.&quot; Sherman said that more companies are looking at the quality of life and eco-friendliness. You can read the <a href="https://www.cnbc.com/2019/07/15/these-are-the-best-places-to-launch-a-small-business-in-america.html">full article here</a>.</p> https://www.seyfarth.com:443/news/mcdonaldccr071519 Esther Slater McDonald quoted in the Cook County Record https://www.seyfarth.com:443/news/mcdonaldccr071519 Mon, 15 Jul 2019 00:00:00 -0400 <p> Esther Slater McDonald was quoted in a July 15 story from the Cook County Record, &quot;Federal appeals court leaves unanswered key questions in big class action ruling vs Dish Network.&quot; McDonald said that there are serious issues relating to exactly who has standing in a class action. You can read the <a href="https://cookcountyrecord.com/stories/512682066-federal-appeals-court-leaves-unanswered-key-questions-in-big-class-action-ruling-vs-dish-network">full article here</a>.</p> https://www.seyfarth.com:443/publications/larkinghn071419 Daniel Larkin authored an article in Global Hotel Network https://www.seyfarth.com:443/publications/larkinghn071419 Sun, 14 Jul 2019 00:00:00 -0400 <p> Daniel Larkin authored a July 14 article in Global Hotel Network, &quot;The New Universe of Hotel Industry Stakeholders.&quot; You can read the <a href="https://globalhotelnetwork.com/daniel-larkin.html">full article here</a>.</p> https://www.seyfarth.com:443/publications/warburgopalesque071219 David Warburg authored an article in Opalesque https://www.seyfarth.com:443/publications/warburgopalesque071219 Fri, 12 Jul 2019 00:00:00 -0400 <p> David Warburg authored a July 12 article in Opalesque, &quot;Other Voices: ILPA Principles 3.0 reflect changes in the alternatives industry.&quot;</p> https://www.seyfarth.com:443/publications/CP071219 Is Your Employee As Fit As A Fiddle? https://www.seyfarth.com:443/publications/CP071219 Fri, 12 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: While employees often will toot their own horn, employers sometimes may have concerns about their ability to safely perform their job. If this situation rings a bell, it will be music to your ears to hear that it may be possible to request employees to undergo a medical examination to certify their fitness for duty.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/07/12/is-your-employee-as-fit-as-a-fiddle/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/johnsonbloomberglaw071219 Randel Johnson quoted in Bloomberg Law https://www.seyfarth.com:443/news/johnsonbloomberglaw071219 Fri, 12 Jul 2019 00:00:00 -0400 <p> Randel Johnson was quoted in a July 12 story from Bloomberg Law, &quot;Harder-Charging Patrick Pizzella Takes Labor Reins From Acosta.&quot; Johnson said that it would be important for Pat to send a signal that there is a new sheriff in town and enforcement needs to be well balanced with voluntary compliance efforts, in terms of helping employers comply with the law.</p> https://www.seyfarth.com:443/news/bergmannshrm071219 Edward Bergmann quoted in SHRM https://www.seyfarth.com:443/news/bergmannshrm071219 Fri, 12 Jul 2019 00:00:00 -0400 <p> Edward Bergmann was quoted in a July 12 story from SHRM, &quot;Know the Risks of Fighting Unemployment Claims in Kentucky.&quot; Bergmann said that HR professionals in Kentucky will have to closely monitor the situation relative to representation of their employer in various state administrative proceedings. You can read the <a href="https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/know-the-risks-of-fighting-unemployment-claims-in-kentucky.aspx">full article here</a>.</p> https://www.seyfarth.com:443/news/bartlettlaw071119 Brett Bartlett quoted in Law.com https://www.seyfarth.com:443/news/bartlettlaw071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Brett Bartlett was quoted in a July 11 story from Law.com, &quot;Cottage Industry Develops Around Lawyer Well-Being,&quot; on Seyfarth&#39;s work with Life Cross Training (LIFE XT). Bartlett said that LIFE XT&rsquo;s program helped him change the way he looks at the legal profession and develop more coping mechanisms.</p> https://www.seyfarth.com:443/news/4934 Pamela Devata quoted in SHRM https://www.seyfarth.com:443/news/4934 Thu, 11 Jul 2019 00:00:00 -0400 <p> Pamela Devata was quoted in a July 11 story from SHRM, &quot;House Committee Passes Bill to Ban Employment Credit Checks.&quot; Devata said that the bill puts restrictive prohibitions on companies who may be using it in a correct, limited manner for a job-related purpose. You can read the <a href="https://www.shrm.org/ResourcesAndTools/hr-topics/talent-acquisition/Pages/House-Maxine-Waters-Passes-Bill-Ban-Employment-Credit-Checks.aspx">full article here</a>.</p> https://www.seyfarth.com:443/news/adaft071119 Seyfarth's ADA statistics referenced in the Franchise Times https://www.seyfarth.com:443/news/adaft071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a July 11 story from the Franchise Times, &quot;Accessible Websites: Compliance and a Big Opportunity.&quot; A recent count by Seyfarth found that of the more than 2,200 web accessibility lawsuits filed in federal court in 2018, one in 10 cases involved a restaurant company and that number is growing. You can read the <a href="http://www.franchisetimes.com/news/July-2019/Accessible-Websites-Compliance-and-a-Big-Opportunity-too/">full article here</a>.</p> https://www.seyfarth.com:443/news/farabowlaw360071119 Sara Beiro Farabow quoted in Law360 https://www.seyfarth.com:443/news/farabowlaw360071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Sara Beiro Farabow was quoted in a July 11 story from Law360, &quot;Gov&rsquo;t Can&rsquo;t Escape Contractor&rsquo;s Claims Over $40M Contract,&quot; on how the Armed Services Board of Contract Appeals ruled that Watts Constructors LLC can proceed with its bad faith claim against the government. Representing Watts, Farabow said that they&#39;re pleased that the board entirely rejected the jurisdictional challenge set out in the government&#39;s motion for summary judgment.</p> https://www.seyfarth.com:443/news/sonneborncl071119 Amanda Sonneborn quoted in Chicago Lawyer https://www.seyfarth.com:443/news/sonneborncl071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Amanda Sonneborn was quoted in a July 11 story from Chicago Lawyer, &quot;View from the top: Half of Illinois&rsquo; 20 largest firms are headed by women &mdash; here&rsquo;s what they had to say.&quot; Sonneborn said that women are statistically equal to men in law schools since the &rsquo;80s, but we don&rsquo;t see that statistic bearing out in terms of equity partnership in Big Law.</p> https://www.seyfarth.com:443/publications/IMM071119 Houses Passes Bill Lifting “Per-Country Caps” https://www.seyfarth.com:443/publications/IMM071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On July 10, 2019, the U.S. House of Representatives passed H.R. 1044 &ndash; the &ldquo;Fairness for High-Skilled Immigrants Act of 2019,&rdquo; on the Suspension Calendar[1] with a bipartisan vote of 365-65. The legislation, originally introduced by Rep. Zoe Lofgren (D-CA), would eliminate the existing &ldquo;per-country cap&rdquo; for employment-based immigrants while also increasing the per-country cap on family-based immigrant visas.<br /> <br /> <a href="https://www.bigimmigrationlawblog.com/2019/07/houses-passes-bill-lifting-per-country-caps/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL071119 Close Call: American Airlines Wins ADA Case by One Vote, but the Warning Signals for Employers are Loud and Clear https://www.seyfarth.com:443/publications/EL071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In a 2-1 decision in Bilinsky v American Airlines, Inc., 2019 WL 2610944 (7th Cir. June 26, 2019), the Seventh Circuit recently affirmed American Airlines&rsquo; summary judgment win against a former employee who alleged American violated the ADA by failing to allow her to continue to work remotely after the American/US Airways merger. In doing, the majority made clear &ndash; as a &ldquo;note of caution to future ADA litigants&rdquo; &ndash; that employers must analyze what is reasonable under the ADA based upon current technological capabilities, not what was possible decades ago. The case also highlights the importance of having and updating job descriptions in the face of changed work circumstances. American survived its close call without one, but the next employer may not.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/close-call-american-airlines-wins-ada-case-by-one-vote-but-the-warning-signals-for-employers-are-loud-and-clear/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC071119 Copy-Cat Class Actions Meet Copy-Cat Legislation: Illinois’ BIPA Spurs New Biometric Privacy Legislation Across The Nation https://www.seyfarth.com:443/publications/WC071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: While most employers are likely familiar with the Illinois Biometric Information Privacy Act (&ldquo;BIPA&rdquo;), they should know that Illinois is not the only state with a biometric privacy law and many other states are not far behind from joining that group. In addition to states with existing biometric privacy laws (Illinois, Texas, and Washington), various state legislatures are considering similar (often-times identical) statutes. As a result, employers should take account of this patchwork quilt of laws in their compliance activities.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/07/copy-cat-class-actions-meet-copy-cat-legislation-illinois-bipa-spurs-new-biometric-privacy-legislation-across-the-nation/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT071119 The Week in Weed: July 12, 2019 https://www.seyfarth.com:443/publications/TBT071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/the-week-in-weed-july-12-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/vasquezsantosdj071119 Jinouth Vasquez Santos authored an article in the Daily Journal https://www.seyfarth.com:443/publications/vasquezsantosdj071119 Thu, 11 Jul 2019 00:00:00 -0400 <p> Jinouth Vasquez Santos authored a July 11 article in the Daily Journal, &quot;More states are requiring cannabis companies to engage a union.&quot; More and more lawmakers are requiring Cannabis companies to enter into labor peace agreements in order to obtain their licensing.</p> https://www.seyfarth.com:443/publications/PM071119-LE Seyfarth Shaw Policy Matters Newsletter - July 11, 2019 https://www.seyfarth.com:443/publications/PM071119-LE Thu, 11 Jul 2019 00:00:00 -0400 <p> <strong>Pallasch Confirmed as ETA Assistant Secretary.</strong>&nbsp; Today, by a <a href="https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=116&amp;session=1&amp;vote=00201#position">54-39 vote</a>, the Senate confirmed John Pallasch to serve as the Assistant Secretary of Labor for the Employment and Training Administration.&nbsp; Pallasch is currently the Executive Director of Kentucky&rsquo;s Office of Employment and Training and previously served in the Bush 43 Department of Labor.&nbsp; At ETA, Pallasch will jump right in to two key policy areas for the Administration: immigration and apprenticeships.&nbsp;<br /> <br /> <strong>House Subcommittee to Tackle Apprenticeships.</strong>&nbsp; The House subcommittee on Higher Education and Workforce Investment next week will hold a <a href="https://edlabor.house.gov/hearings/scaling-up-apprenticeships-building-on-the-success-of-international-apprenticeship-models">hearing</a> entitled &ldquo;Scaling Up Apprenticeships: Building on the &lsquo;Success of International Apprenticeship Models.&rsquo;&rdquo;&nbsp; Witnesses have not yet been announced.<br /> <br /> <strong>Sonderling Nominated for EEOC Slot.</strong>&nbsp; Meanwhile, during the Independence Day break, President Trump <a href="https://www.whitehouse.gov/presidential-actions/president-donald-j-trump-announces-intent-nominate-personnel-key-administration-posts-75/">announced</a> his intent to nominate current Wage &amp; Hour Division official (and former Acting Administrator) Keith Sonderling to serve as a Commissioner on the Equal Employment Opportunity Commission.&nbsp; Sonderling&rsquo;s nomination has been paired with current Commissioner Charlotte Burrows.<br /> <br /> <strong>States Taking Action on Gig Economy.</strong>&nbsp; New York and California are each pushing legislation that would provide gig economy workers with certain rights.&nbsp; Yesterday, California&rsquo;s <a href="https://legiscan.com/CA/bill/AB5/2019">AB 5</a>, which would make it harder to classify gig workers as independent contractors, passed the Senate Committee on Labor, Public Employment, and Retirement.&nbsp; On the other side of the country, New York&rsquo;s Dependent Worker Act would provide the workers with the right to unionize and collectively bargain, as well as to pursue &ldquo;wage theft&rdquo; claims.&nbsp; For more on the New York bill, check out <a href="https://www.employerlaborrelations.com/2019/07/03/ny-lawmakers-propose-gig-worker-protection-law/">Seyfarth&rsquo;s Employer Labor Relations blog post</a>.<br /> <br /> <strong>Workforce Protections Subcommittee Deals with Excessive Heat.</strong>&nbsp; Today, the House Subcommittee on Workforce Protections held a <a href="https://edlabor.house.gov/hearings/from-the-fields-to-the-factories-preventing-workplace-injury-and-death-from-excessive-heat">hearing</a> on preventing workplace injury and death from excessive heat, featuring testimony from workers, academics, health and safety experts, and representatives of farm workers and farmers.<br /> <br /> <strong>&ldquo;Per-Country&rdquo; Bill Passes House</strong>.&nbsp; Yesterday the House passed on the Suspension Calendar by the bipartisan vote of 365 &ndash; 65, H.R. 1044,&nbsp;the Fairness for High Skilled Immigrants Act of 2019, which would eliminate the existing per country cap of 7% of total employment based green cards. &nbsp;The bill also adjusts the family based cap from 7% to 15%.&nbsp; The end result of this legislation, which has been repeatedly introduced in past Congresses, would be to help clear the backlog of pending green card petitions from India, China and other countries.&nbsp; Passage of the bill on this wide bipartisan basis is a testament to&nbsp;the merits of the legislation and that the Majority and Minority can work together on immigration issues.&nbsp; Comparable legislation, S. 386, is pending in the Senate.&nbsp; However, certain senators are supporting changes to the bill which would seriously impair the H-1B employment process and therefore potentially undermine support for the bill overall.&nbsp; See&nbsp;our <a href="https://www.bigimmigrationlawblog.com/2019/07/houses-passes-bill-lifting-per-country-caps/">BIG Immigration blog post</a>.</p> https://www.seyfarth.com:443/publications/OMM071019 Recent Private Equity and Other Alternative Asset Investment Developments and Investor Concerns Reflected in New ILPA Principles 3.0 https://www.seyfarth.com:443/publications/OMM071019 Wed, 10 Jul 2019 00:00:00 -0400 <div> <strong>Overview</strong></div> <div> &nbsp;</div> <div> <em>ILPA Updates Its Best Practices Guidance in &ldquo;Principles 3.0.&rdquo;</em> Responding to private equity and other alternative asset investment trends and new issues, the Institutional Limited Partners Association (ILPA) recently released &ldquo;ILPA Principles 3.0: Fostering Transparency, Governance and Alignment of Interests for General and Limited Partners.&rdquo; ILPA Principles 3.0 updates and expands on prior ILPA Principles 1.0 (2009) and 2.0 (2011).&nbsp;</div> <div> &nbsp;</div> <div> <strong>Noteworthy Highlights from and New Developments in Principles 3.0</strong></div> <div> &nbsp;</div> <div> While ILPA 3.0 builds on and comprehensively reiterates prior principles last fully enunciated in ILPA 2.0, it addresses several aspects of private equity and other alternative asset investment that are either recent developments, or were not addressed previously. Summarized below are some of these areas that were not previously addressed by ILPA 2.0, along with the primary ILPA 3.0 recommendations.</div> <div> &nbsp;</div> <div> <em>Co-Investment Allocations</em>. General partners of funds (GPs) should disclose the framework for allocation of co-invest opportunities and how related expenses will be allocated, including any prioritization. Existing side letter co-invest rights should be disclosed. Where co-investment opportunities have been offered any other GP-managed vehicle, the GP should disclose any potential conflicts to the limited partner advisory committee (LPAC).</div> <div> &nbsp;</div> <div> <em>Fee and Expense Allocation and Reasonableness</em>. Travel relating to sourcing deals, networking and preliminary deal diligence should be borne by the manager, until the potential investment advances past the initial term sheet. Technology, cybersecurity and software upgrade expenses that &ldquo;solely or chiefly benefits the GP, and can be utilized over multiple funds over time&rdquo; should be borne by the manager. Cost of regulatory compliance at the management company/GP level or remedial actions as a result of regulatory review should be borne by the manager.</div> <div> &nbsp;</div> <div> <em>GP Ownership and Succession Issues</em>. GPs should proactively disclose ownership of the management company and any ownership changes over the life of the fund. Transfers of GP interests to third parties (even if not restricted) should be notified to LPs in advance, accompanied by information on goals and rationale, and how GP-level as well as fund-level economics may change, including any impact on GP/management members not participating in the transfer.</div> <div> &nbsp;</div> <div> <em>Subscription Lines of Credit</em>. Where advances are drawn under a subscription facility secured by LP capital commitments, the preferred return accruing to investors should be calculated from the date the subscription facility is drawn upon (which is when the LP commitment is at risk), rather from the later date capital is called from the investor. Offering prior performance and ongoing reporting data should be presented both with and without the effect of subscription credit facilities. Investors should be offered the option to opt out of a subscription credit facility at the time of their initial admission to the fund. Subscription line facilities should reasonable in both size and duration, and there should be full disclosure of anticipated size, duration limits, parameters around use of proceeds, and costs incurred, and how treated in context of overall leverage limitations. Many of these recommendations first appeared in 2017 in ILPA&rsquo;s &ldquo;Guidance on Subscription Lines of Credit.&rdquo;</div> <div> &nbsp;</div> <div> <em>GP-led Secondaries</em>. The GP should engage the LPAC as early as possible regarding the proposed secondary sale transaction. Any conflicts should be disclosed, mitigated and approved by the LPAC before the transaction is presented to all LPs. A &ldquo;status quo&rdquo; option should be offered for LPs wishing to &ldquo;roll&rdquo; their interests rather than sell. GPs should engage an advisor to solicit bids at the GP&rsquo;s expense (not the fund). The LPAC should review the advisor engagement. Disclosure to LPs should include: the number, range and content of bids received; economics and/or any &ldquo;stapling&rdquo; (LPs allocating primary capital); and any other meaningful changes in terms vs. the original fund. Most of these recommendations first appeared earlier in 2019 in ILPA&rsquo;s &ldquo;GP-led Secondary Fund Restructurings: Considerations,&rdquo; which includes a more expansive discussion of these issues.&nbsp;</div> <div> &nbsp;</div> <div> Other new areas addressed by ILPA 3.0 include: Disclosures regarding ESG (environmental, social and governance investing), Code of Conduct and Regulatory Compliance; and Scope of the Fund Audit.</div> <div> &nbsp;</div> <div> <strong>Future Impact</strong></div> <div> &nbsp;</div> <div> ILPA 3.0 also clarifies and expands on previous recommendations made in ILPA 2.0 in areas such as fund economics, fiduciary duties, key person provisions and LPAC responsibilities.&nbsp;</div> <div> &nbsp;</div> <div> Unlike in the release of ILPA Principles 1.0 and 2.0, ILPA will not be seeking official endorsements for the document, possibly reflecting the past mixed industry reception for Principles 1.0 and 2.0, as well as the rapidly evolving and relatively recent nature of some of the issues addressed in Principles 3.0.</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/CCD071019 Hot Topics and Trends in California Consumer Class Actions https://www.seyfarth.com:443/publications/CCD071019 Wed, 10 Jul 2019 00:00:00 -0400 <br /> <br /> <p> <a href="https://www.consumerclassdefense.com/2019/07/hot-topics-and-trends-in-california-consumer-class-actions/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE071019 Supreme Court Issues Decision Significantly Expanding the Scope of FOIA’s Confidentiality Exemption https://www.seyfarth.com:443/publications/WSE071019 Wed, 10 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On June 24, 2019, the Supreme Court issued its decision in Food Marketing Institute v. Argus Leader Media and resolved fractured circuit splits about the parameters for when the government may withhold information from a Freedom of Information Act (&ldquo;FOIA&rdquo;) request based on responsive information being confidential or a trade secret.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/foia/supreme-court-issues-decision-significantly-expanding-the-scope-of-foias-confidentiality-exemption/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS071019 Recap! ITechLaw 2019 World Technology Conference in Boston https://www.seyfarth.com:443/publications/TS071019 Wed, 10 Jul 2019 00:00:00 -0400 <p> In May, Seyfarth attorneys Katherine Perrelli, Robert Milligan, and Dawn Mertineit participated in the ITechLaw 2019 World Technology Conference in Boston.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/uncategorized/recap-itechlaw-2019-world-technology-conference-in-boston/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA071019-RE Green Up Your Next Real Estate Financing https://www.seyfarth.com:443/publications/CA071019-RE Wed, 10 Jul 2019 00:00:00 -0400 <div> <strong>Background of FHFA and the Scorecard</strong></div> <div> &nbsp;</div> <div> The Federal Housing Finance Agency (FHFA) was established under the Housing and Economic Recovery Act of 2008. FHFA has regulatory oversight of the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank System. One of FHFA&rsquo;s statutory mandates is to ensure that Fannie Mae and Freddie Mac (the Enterprises) operate in a safe and sound manner so that they provide stability and liquidity to the mortgage market (both the single family and multifamily markets).&nbsp;</div> <div> &nbsp;</div> <div> Since September 6, 2008, FHFA has also served as the conservator of the Enterprises. As conservator, FHFA has established three strategic goals for the Enterprises: (1) &ldquo;maintain, in a safe and sound manner, foreclosure prevention activities and credit availability for new and refinanced mortgages to foster liquid, efficient, competitive, and resilient national housing finance markets;&rdquo; (2) &ldquo;reduce taxpayer risk through increasing the role of private capital in the mortgage market;&rdquo; and (3) &ldquo;build a new single-family securitization infrastructure for use by the Enterprises and adaptable for use by other participants in the secondary market in the future.&rdquo;<sup>1</sup> Each year, FHFA publishes a scorecard by which the Enterprises are assessed in how well they are fulfilling these strategic goals. One of the mandates from the scorecard is that each Enterprise must manage the volume of new multifamily business to remain at or below $35 billion for the current year.&nbsp;</div> <div> &nbsp;</div> <div> <strong>Scorecard Exclusions</strong></div> <div> &nbsp;</div> <div> There are several categories of loans that do not count toward the $35 billion cap: loans secured by affordable housing (with several different categories), loans secured by small multifamily properties (5 to 50 units), loans for manufactured housing projects, loans on seniors housing assisted living properties (to the extent those units are affordable at 80% AMI or below), and loans to finance energy or water efficiency improvements. The extent to which the loan amount may be excluded from the $35 billion cap correlates, in large part, to the extent that the underlying project is use and rent restricted. While some categories offer an exclusion of the full loan amount (e.g., manufactured housing), others offer only an exclusion of the pro rata portion of the loan amount based on the percentage units affordable at 80% AMI (or some lower affordability threshold).</div> <div> &nbsp;</div> <div> Fannie Mae&rsquo;s total multifamily finance activity for 2018 was approximately $66 billion, of which $30 billion fell within the cap and $36 billion was in the excluded categories. Freddie Mac&rsquo;s total multifamily finance activity for 2018 was approximately $78 billion, of which $33 billion fell within the cap and $45 billion was in the excluded categories.<sup>2</sup></div> <div> &nbsp;</div> <div> <strong>Green Financing Programs</strong></div> <div> &nbsp;</div> <div> Each Enterprise has established an energy and water efficiency improvement loan program:&nbsp;</div> <ul> <br /> <li> Fannie Mae has the Green Rewards loan program: <a href="https://www.fanniemae.com/content/fact_sheet/competitive-advantage-green-financing.pdf" target="_blank">https://www.fanniemae.com/content/fact_sheet/competitive-advantage-green-financing.pdf</a></li> <li> Freddie Mac has the Green Up and Green Up Plus loan programs: <a href="https://mf.freddiemac.com/docs/product/green_advantage_term_sheet.pdf" target="_blank">https://mf.freddiemac.com/docs/product/green_advantage_term_sheet.pdf</a></li> </ul> <br /> <div> Under these programs, the full loan amount will be excluded from the cap if the renovations under the program project a minimum 15% reduction in annual property energy consumption and a minimum 15% reduction in annual property water and/or energy consumption. Thus, a property projecting a 30% reduction in annual energy consumption would qualify for the cap exclusion, or a property projecting a 20% reduction in energy consumption combined with a 10% reduction in water consumption would also qualify for the cap exclusion. In addition to the energy and water consumption reduction, all Fannie Mae Green Rewards and Freddie Mac Green Up and Green Up Plus loans must have a third-party data collection firm engaged for ongoing data collection for the life of the loan in order to receive the full exclusion from the cap. This third-party firm can be funded by the borrower, the lender or the Enterprise. Annual reporting is required under these programs.&nbsp;</div> <div> &nbsp;</div> <div> Through these green financing programs, both Enterprises tout lower interest rates and additional loan proceeds, perks which are also offered to Green Building Certified properties.&nbsp;</div> <div> &nbsp;</div> <div> <strong>Key Takeaways</strong></div> <div> &nbsp;</div> <div> Borrowers with a general understanding of the applications of green financing, and the 2019 requirements, will be best positioned to reap the benefits of the available incentives. For example, although older properties may more easily qualify for green financing through energy and water saving improvements, newer properties are not excluded from qualifying and may be feasible as well. Recently, a property which was built without LED lights was able to qualify for the green financing program by changing out all of the interior corridors and exterior lights to LED.</div> <div> &nbsp;</div> <div> <div align="center"> <div align="center"> <hr align="center" size="3" width="100%" /> </div></br> <div style="text-align: left;"> <sup>1</sup>&nbsp;Federal Housing Finance Agency, Report to Congress 2018.</div> <div style="text-align: left;"> <sup>2</sup> <em>Id.</em></div> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/news/lorberbloomberglaw071019 Lawrence Lorber quoted in Bloomberg Law https://www.seyfarth.com:443/news/lorberbloomberglaw071019 Wed, 10 Jul 2019 00:00:00 -0400 <p> Lawrence Lorber was quoted in a July 10 story from Bloomberg Law, &quot;EEOC Mulls Revoking General Counsel&rsquo;s Litigation Authority.&quot; Lorber said that pulling more litigation authority into the national office could be a good thing.</p> https://www.seyfarth.com:443/news/charlotte070919 Seyfarth Announces Charlotte Office Opening https://www.seyfarth.com:443/news/charlotte070919 Tue, 09 Jul 2019 00:00:00 -0400 <p> CHARLOTTE (July 9, 2019) -- Seyfarth Shaw LLP announced today the opening of an office in Charlotte, the firm&rsquo;s first in the region, which has grown into an increasingly important hub for its clients. Serving clients around the globe, this marks Seyfarth&rsquo;s 16th office.</p> <p> Seyfarth&rsquo;s office will be located at 121 West Trade in Uptown, and will be led by veteran Seyfarth partners Frederick T. &ldquo;Fritz&rdquo; Smith and Eric Sidman, who live in Charlotte and will serve as office co-managing partners.</p> <p> &ldquo;We were drawn to Charlotte by our clients, who we have served in this market for many years as they encouraged us to join them,&rdquo; said Pete Miller, Seyfarth&rsquo;s chair and managing partner. &ldquo;We are excited to expand on these efforts today with a strong local presence on the ground in Charlotte that complements our growing platform.&rdquo;</p> <p> With more than 25 active clients in the market, including Compass Group, Teachers Insurance and Annuity Association of America (TIAA), and Wells Fargo, among others, Seyfarth&rsquo;s Charlotte office will initially be comprised of 8 to 10 lawyers from the firm&rsquo;s nationally ranked Labor &amp; Employment and Real Estate departments as it grows into a full-service office.</p> <p> &ldquo;This is the first step toward establishing a significant footprint in Charlotte, and we already have the privilege of working with a wide range of clients here,&rdquo; said Fritz Smith, a Wake Forest alumnus and Labor &amp; Employment department partner, who formerly chaired Seyfarth&rsquo;s Employment Litigation &amp; Counseling practice group. &ldquo;Charlotte is a vibrant market for legal talent, and we&rsquo;re excited to build a diverse and talented team to serve clients old and new.&rdquo;</p> <p> &ldquo;Charlotte is among the three fastest growing U.S. cities, and the second-largest U.S. banking center,&rdquo; said Eric Sidman, a Winston-Salem native and partner in the Real Estate department. &ldquo;This is a dynamic market for our clients, and we look forward to strengthening our relationships here as we grow together.&rdquo;</p> <p> Long recognized for its dedication, excellence, and innovation in serving clients, Seyfarth recently earned a number of honors from <a href="https://www.seyfarth.com/Accolades/legal500053019"><em>Legal 500</em></a> and <a href="https://www.seyfarth.com/Accolades/chambers042519"><em>Chambers USA</em></a>, which noted the firm&rsquo;s continued leadership across a variety of practice areas in 2019. In May, the firm was also ranked as one of the strongest law firm brands in the world by corporate counsel, according to <a href="https://www.seyfarth.com/news/btibrand051619">BTI Consulting</a>, where Seyfarth earned &quot;Best of the Best&quot; status for its use of technology to add value to the client experience.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 16 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com">bkiefer@seyfarth.com</a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/news/fritzlaw360070919 Kevin Fritz featured in Law360 https://www.seyfarth.com:443/news/fritzlaw360070919 Tue, 09 Jul 2019 00:00:00 -0400 <p> Kevin Fritz was featured in a July 9 diversity snapshot story from Law360, &quot;12 Attorneys On How Diversity Gives Them The Edge.&quot; Fritz said that, as a lawyer with a physical disability who defends companies, he works with employers to be proactive so that they can prevent discrimination and ensure that individuals are having appropriate access to places of public accommodation.</p> https://www.seyfarth.com:443/publications/CONS070919 Legal Issues to Consider for Projects that Utilize Virtual and Augmented Reality https://www.seyfarth.com:443/publications/CONS070919 Tue, 09 Jul 2019 00:00:00 -0400 <p> Using VR and AR technology reduces overruns related to accidents, delays, and design efficiencies, by providing more accurate, meaningful details, replicas, and simulations earlier in the construction process.[2] Another major benefit of VR and AR technology is that it allows end users to engage with the design process earlier. For instance, take a hospital renovation project that specifies wall-mounted equipment in each patient room. Using VR, the hospital staff can virtually tour the room to confirm that equipment is the proper distance from the patient&rsquo;s bedside and that the other facets of the project meet their design expectations. In the same vein, tenants who are wary of the impact of renovation project on their living space can actually walk through the project before expending a great deal of resources, to ensure that the design concept is to their liking. By allowing a user to virtually walk through the project, interact with a superimposed design, and modify designs with greater accuracy issues can be identified earlier and informed decisions regarding changes across various contractors and subcontractors can be made faster.[3]<br /> <br /> <a href="https://www.constructionseyt.com/2019/07/legal-issues-to-consider-for-projects-that-utilize-virtual-and-augmented-reality/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM070919-LIT New Amendment to Chinese Trademark Law Seeks to Combat “Bad Faith” Filers https://www.seyfarth.com:443/publications/OMM070919-LIT Tue, 09 Jul 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis: </strong>On April 23, 2019, the 10th Session of the Standing Committee of the 13th National People&rsquo;s Congress in China (NPC) amended the Chinese Trademark Law. The changes are intended to combat the problem of trademark filings made in bad faith in China.&nbsp; Concerns remain, though, that the new law may undermine the practice by which legitimate brand owners file &ldquo;defensive&rdquo; trademark applications in China.</em></div> <div> &nbsp;</div> <div> Earlier this year, the global trademark community received news that the Chinese Trademark Law would be amended, with the ostensible purpose of combatting bad faith trademark filings in China.&nbsp; News of the amendment was pleasing to brand owners, who are acutely aware of the difficulties in dealing with bad faith trademark filers in China.&nbsp; The amendment reads in pertinent part as follows:</div> <div> &nbsp;</div> <div> <em>Where any natural person, legal entity or other organization, in the course of his or its production or business operations, intends to acquire the exclusive right to use a trademark for his or its goods or services, an application should be filed with the Trademark Office for registration of the goods trademark.&nbsp; Applications for trademark registrations in bad faith which are not intended for use shall be refused.</em></div> <div> &nbsp;</div> <div> The amended law goes into effect on November 1, 2019.&nbsp;</div> <div> &nbsp;</div> <div> Unlike in the U.S. and certain other jurisdictions, where trademark rights derive from use and not registration, trademark rights in China are secured by obtaining trademark registration, and the party who files an application for registration of a trademark first is typically given priority in the establishment of trademark rights in China.&nbsp; This structure creates what is often referred to as a &ldquo;race to the filing office&rdquo; for trademarks in China.&nbsp; As a result, there are incentives for bad faith filers to attempt to file trademark applications for trademarks owned by legitimate brand owners, in the hopes that the brand owner will be forced to purchase the resulting trademark registrations from the bad faith filer.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Bad faith filers also sometimes attempt to obtain registrations for trademarks in goods or service classes outside of those in which the legitimate brand owner operates.&nbsp; For example, a bad faith filer may seek registration of a legitimate footwear trademark in connection with unrelated goods such as beer, video games, luggage, etc.&nbsp; These non-class registrations also pose problems for the legitimate brand owner because such registrations can be used as the foundation for counterfeiting operations and other nefarious activities.&nbsp; For this reason, legitimate brand owners often &ldquo;file defensively&rdquo; in China, in an effort to secure trademark registrations that significantly exceed the scope of actually intended goods and services to be offered under their mark.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Against this backdrop, the new amendment appears encouraging to brand owners.&nbsp; It is worth noting that the original version of the amendment apparently did not include the reference to the term &ldquo;bad faith.&rdquo;&nbsp; Rather, the original version simply said that &ldquo;any trademark application <em>without intent </em>to use shall be dismissed&rdquo; (emphasis added).&nbsp; While this language would have targeted bad faith filers, it also might have encompassed legitimate defensive filers as well, and this concern apparently led to the inclusion of &ldquo;bad faith&rdquo; in addition to &ldquo;without intent to use.&rdquo;</div> <div> &nbsp;</div> <div> That said, there currently is no clear definition for &ldquo;bad faith&rdquo; in the amendment or otherwise in the law.&nbsp; As such, it is unclear at this time how the law will be interpreted, and whether it will have the seemingly intended result of deterring bad faith filers and providing legitimate brand owners another weapon to use against bad faith filings.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> There is reason for hope in this regard. The Supreme People&rsquo;s Court (SPC) in China, which is the country&rsquo;s highest court, has in the past complained, and continues to complain still, about the problem of bad faith trademark filers in China. In a 2018 decision, the SPC, in the<em> Shanyin v. Zhongjun</em>, case criticized illegitimate trademark hoarders for filing deceitful trademark applications. Many expect that this case will be a helpful precedent in the further attack against bad faith filers.&nbsp; It also may suggest the approach that lower courts, the China Trade Mark Office and the Trademark Review and Adjudication Board will take in considering the new law.</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/EL070919 7th Circuit Rules that Extreme Obesity is Not an ADA Impairment (at Least on These Facts) https://www.seyfarth.com:443/publications/EL070919 Tue, 09 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The U.S. Court of Appeals in the Seventh Circuit has recently decided a case involving an extremely obese bus driver and denied his claims under the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. &sect;&sect; 12101&ndash;12213, as amended by the ADA Amendments Act of 2008 (ADAAA), Pub. L. No. 110-325, 122 Stat. 3553. Richardson v Chicago Transit Authority, No 17-3508 &amp; 18-2199 (7th Cir. June 12, 2019).<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/7th-circuit-rules-that-extreme-obesity-is-not-an-ada-impairment-at-least-on-these-facts/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ERISA070819 Supreme Court Seeks Solicitor General’s Input on Scope of ERISA Preemption of State Rate Regulation of Pharmacy Benefit Managers (PBMs) https://www.seyfarth.com:443/publications/ERISA070819 Mon, 08 Jul 2019 00:00:00 -0400 <p> Seyfarth synopsis: Arkansas has sought certiorari on the question of the ability of states under the ERISA preemption clause to regulate the rates charged by PBMs, and the Supreme Court has asked for the input of the Solicitor General on whether it should decide the issue..<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/07/08/supreme-court-seeks-solicitor-generals-input-on-scope-of-erisa-preemption-of-state-rate-regulation-of-pharmacy-benefit-managers-pbms/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD070819 Fourth Circuit Says Inability to Get Information from Website, Without More, is Not Enough to Establish Standing to Sue https://www.seyfarth.com:443/publications/CCD070819 Mon, 08 Jul 2019 00:00:00 -0400 <p> Cross-Posted from ADA Title III Blog<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/07/fourth-circuit-says-inability-to-get-information-from-website-without-more-is-not-enough-to-establish-standing-to-sue/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM070819-LIT Auto Manufacturers: Don’t Forget the Amended Franchise Rule When Considering New Business Opportunities https://www.seyfarth.com:443/publications/OMM070819-LIT Mon, 08 Jul 2019 00:00:00 -0400 <div> As competition intensifies and auto manufacturers and distributors look for new ways to realize value from their brands, they and their counsel would do well to familiarize themselves with the Federal Trade Commission&rsquo;s (FTC) Amended Franchise Rule and the reasons why their clients are exempt to make sure they are not inadvertently creating business ventures subject to federal and state regulations.&nbsp; Although the federal Automobile Dealer Day in Court Act<sup>1</sup> and many state dealer statutes refer to the written agreement between auto manufacturers and dealers as a &ldquo;franchise,&rdquo; it is not common industry practice to refer to manufacturers as &ldquo;franchisors&rdquo; or dealers as &ldquo;franchisees.&rdquo;&nbsp; This is likely because most states&mdash;even states with franchise laws of general applicability&mdash;have adopted industry-specific statutes regulating manufacturer-dealer relations and the exemptions obtained from the FTC by auto manufacturers shortly after the adoption of the FTC Franchise Rule<sup>2</sup> in 1979.&nbsp; But when considering business opportunities that are outside the scope of the traditional manufacturer-dealer relationship, the applicable federal and state regulations could convert the relationship into one of franchisor-franchisee.&nbsp; If auto manufacturers wish to expand the power of their brand while avoiding the implications of the FTC Franchise Rule, they first need to understand it.&nbsp; &nbsp;&nbsp;</div> <h3> The FTC Franchise Rule</h3> <div> First adopted by the FTC in 1979, the Franchise Rule broadly defines a &ldquo;franchise&rdquo; as &ldquo;any continuing commercial relationship or arrangement&rdquo; in which (1) a franchisee obtains a right to operate a business associated with a franchisor&rsquo;s trademark; (2) the franchisor will exert or has authority to exert a significant degree of control over the franchisee&rsquo;s method of operation; and (3) a franchisee agrees to pay a fee to the franchisor.<sup>3</sup>&nbsp; Generally speaking, the FTC Franchise Rule requires written disclosure by a franchisor to a prospective franchisee of material information concerning the business opportunity being sold prior to the sale of a franchise in a document that is today called a &ldquo;Franchise Disclosure Document&rdquo; or &ldquo;FDD,&rdquo; and imposes certain requirements on a franchisor before selling a franchise to a prospective franchisee.<sup>4</sup></div> <div> &nbsp;</div> <div> Shortly after the adoption of the FTC Franchise Rule in 1979, participants in already heavily regulated industries sought exemptions under Section 18(g) of the FTC Act, which provides that an exemption to a trade regulation rule may be granted if coverage &ldquo;is not necessary to prevent the unfair or deceptive act or practice to which the rule relates.&rdquo;<sup>5</sup>&nbsp; For example, a group of oil companies and oil jobbers petitioned for and obtained from the FTC an exemption for the entire petroleum industry because the Petroleum Marketers Practices Act (PMPA)<sup>6</sup> already imposed pre-sale disclosure requirements and regulated the relationship between franchisors and franchisees in that industry.<sup>7</sup></div> <div> &nbsp;</div> <div> Auto manufacturers also petitioned for exemptions from the FTC Franchise Rule, either individually or through trade associations. For example, at the same time the FTC granted the exemption sought by oil companies and oil jobbers, the FTC also granted exemptions sought by the Automobile Importers of America, Inc. on behalf of its members.<sup>8</sup>&nbsp; In granting the exemptions, the FTC found in the record an &ldquo;absence of significant abuse by franchisors of their relationships with automobile dealer franchisees or prospective franchisees,&rdquo; and noted that the National Automobile Dealers Association supported the petition.<sup>9</sup>&nbsp; The FTC also explained that it had &ldquo;previously determined . . . that the sale of most automobile dealerships does not constitute the sale of a &lsquo;franchise&rsquo; within the meaning of the rule,&rdquo; referring to its ratification of prior staff advisory opinions to the Big Three domestic automobile manufacturers that the manner in which those companies appointed dealers did not constitute a &ldquo;franchise.&rdquo;<sup>10</sup></div> <div> &nbsp;</div> <div> Finally, the FTC observed that because prospective motor vehicle dealers make &ldquo;extraordinarily large investments,&rdquo; those investments are, as a practical matter, made by knowledgeable investors and preceded by substantial negotiation so that those investors can make an &ldquo;informed assessment of the potential risks and benefits of the proposed investment.&rdquo;<sup>11</sup>&nbsp; The FTC concluded that the exemptions from the Franchise Rule were appropriate &ldquo;[b]ecause (i) the transactions, for the most part, are not covered by the rule, (ii) the conditions most likely to lead to consumer abuses are absent from [the] sale of dealerships . . . and (iii) such sales transactions include sufficient disclosure to ensure that the prospective investor is in the position to make an informed decision . . . .&rdquo;<sup>12</sup></div> <h3> 2007 Amendment to the Franchise Rule</h3> <div> In 2007, the FTC adopted an Amended Franchise Rule designed to clarify ambiguities, reduce compliance costs, and respond to changes in technology and market conditions in the offer and sale of franchises.&nbsp; In the Statement of Basis and Purpose (SBP) issued by the FTC in conjunction with its adoption of the Amended Franchise Rule, the FTC explained that because &ldquo;most of the provisions of the original Rule have been retained in the final amended Rule . . . . all former informer staff advisories remain a source of Rule interpretation, except where this SBP contradicts a staff advisory.&rdquo;<sup>13</sup></div> <div> &nbsp;</div> <div> The FTC expressly incorporated into the Amended Franchise Rule the exemption that it had granted to oil companies and oil jobbers more than 25 years earlier, adding language declaring that the rule shall not apply if &ldquo;[t]he franchise relationship is covered by the Petroleum Marketing Practices Act, 15 U.S.C. 2801.&rdquo;<sup>14</sup>&nbsp; Explaining in the SBP its rationale for adopting this language, and responding to commenters who asked whether this exemption would extend to ancillary businesses at gas stations (like car washes and convenience stores), the FTC declared that it &ldquo;intends that it be clear that the PMPA exemption should be read broadly to cover other branded services and products (such as a car wash or mart) sold to the prospective franchisee under the same franchise agreement as the gasoline station.&rdquo;<sup>15</sup>&nbsp; Although the FTC recognized &ldquo;as a practical matter&rdquo; that this broad exemption was warranted because it may be impossible to tease out exempt and non-exempt business lines in a single franchise agreement, the FTC warned that separate or subsequent sales of a restaurant or convenience store franchise to a gasoline station owner fall outside the exemption.<sup>16</sup></div> <div> &nbsp;</div> <div> The Amended Franchise Rule also expressly incorporated portions of the rationale that informed the exemptions granted to auto manufacturers by adopting two new &ldquo;sophisticated investor exemptions.&rdquo;&nbsp; The &ldquo;large franchise investment&rdquo; exemption provides that the rule does not apply if &ldquo;[t]he franchisee&rsquo;s initial investment, excluding any financing received from the franchisor or an affiliate and excluding the cost of unimproved land, totals at least $1,143,100 and the prospective franchisee signs an acknowledgment verifying the grounds for the exemption.&rdquo;<sup>17</sup>&nbsp; The &ldquo;large franchisee&rdquo; exemption provides that the rule does not apply if&nbsp; &ldquo;[t]he franchisee . . . is an entity that has been in business for at least five years and has a net worth of at least $5,715,500.&rdquo;<sup>18</sup>&nbsp; Explaining in the SBP its rationale for adopting these exemptions, the FTC expressly noted that the sophistication of large investors&nbsp; had been one of the reasons for granting the exemptions sought by the Automobile Importers of America more than 25 years earlier.<sup>19</sup></div> <h3> Realizing Brand Value In The 21st Century</h3> <div> Unlike oil companies and oil jobbers, auto manufacturers and distributors do not enjoy an industry-wide categorical exemption from the FTC Franchise Rule.&nbsp; As the FTC observed in 1980, &ldquo;most&rdquo; arrangements between manufacturers and dealers do not meet the definition of a &ldquo;franchise,&rdquo; significantly because auto manufacturers do not &ldquo;sell&rdquo; their dealerships like traditional franchisors or otherwise charge dealers a fee for the right to use the manufacturer trademarks in selling new cars.<sup>20</sup>&nbsp; Most (if not all) manufacturers also have obtained exemptions from the rule under Section 18(g) of the FTC Act.&nbsp; And given the significant investment typically involved in acquiring a dealership, the &ldquo;large investment exemption&rdquo; would seem to cover most of the agreements between manufacturers and dealers.&nbsp; Nevertheless,&nbsp; as the automobile and transportation industries continue to evolve and respond to ever changing technologies, and auto manufacturers look to develop new business opportunities to capitalize on brand value, they must take care to ensure that they do not inadvertently extend beyond the recognized exemptions.&nbsp; Especially with respect to business ventures outside of the traditional auto dealership or ancillary dealership businesses, auto manufacturers and distributors should keep in mind that potential franchise compliance issues lurk in the background.</div> <div> &nbsp;</div> <div> <hr /> <div> <span style="font-size:9px;">1.&nbsp; &nbsp;15 U.S.C. &sect; 1221.</span></div> <div> <span style="font-size:9px;">2.&nbsp; &nbsp;16 C.F.R. Part 436.&nbsp; In 2007, the FTC added part 437 to the Franchise Rule to regulate the sale of &ldquo;business opportunities,&rdquo; which are similar to franchises.&nbsp; Many states also regulate the sale of &ldquo;business opportunities&rdquo; separate and apart from, or instead of, franchise relationships.&nbsp; To the extent that an automobile manufacturer creates a business outside the scope of the traditional dealership arrangement, they and their counsel should be familiar with the applicable federal and state franchise and business opportunity statutes.&nbsp;&nbsp;</span></div> <div> <span style="font-size:9px;">3.&nbsp; &nbsp;16 C.F.R. &sect; 436.1(h).</span></div> <div> <span style="font-size:9px;">4.&nbsp; &nbsp;<em>Id.</em>, &sect; 436.2.</span></div> <div> <span style="font-size:9px;">5.&nbsp; 15 U.S.C. &sect; 57a(g).</span></div> <div> <span style="font-size:9px;">6.&nbsp; 15 U.S.C. &sect; 2801 <em>et seq.</em></span></div> <div> <span style="font-size:9px;">7.&nbsp; 45 Fed. Reg. 51765 (Aug. 5, 1980).</span></div> <div> <span style="font-size:9px;">8.&nbsp; 45 Fed. Reg. 51763 (Aug. 5, 1980).</span></div> <div> <span style="font-size:9px;">9.&nbsp; <em>Id.</em> at 51764.</span></div> <div> <span style="font-size:9px;">10.&nbsp; <em>Id.</em> at 51764, 51765 n.4.</span></div> <div> <span style="font-size:9px;">11.&nbsp; <em>Id.</em> at 51764.</span></div> <div> <span style="font-size:9px;">12.&nbsp; <em>Id.</em></span></div> <div> <span style="font-size:9px;">13.&nbsp; 72 Fed. Reg. 15444, 15449 (Mar. 20, 2007).</span></div> <div> <span style="font-size:9px;">14.&nbsp; 16 C.F.R. &sect; 436.8(a)(4).</span></div> <div> <span style="font-size:9px;">15.&nbsp; 72 Fed. Reg. at 15522.</span></div> <div> <span style="font-size:9px;">16.&nbsp; <em>Id.</em></span></div> <div> <span style="font-size:9px;">17. 16 C.F.R. &sect; 436.8(a)(5)(i).&nbsp; The threshold amount for the &ldquo;large franchise investment&rdquo; exemption was $1 million when the Amended Franchise Rule was adopted in 2007.&nbsp; &nbsp;Under 16 C.F.R. &sect; 436.8(b), the FTC adjusts the thresholds for exemptions to the Amended Franchise Rule every four years based on the consumer price index.&nbsp;</span></div> <div> <span style="font-size:9px;">18. 16 C.F.R. &sect; 436.8(a)(5)(ii).</span></div> <div> <span style="font-size:9px;">19.&nbsp; 72 Fed. Reg. at 15523.</span></div> <div> <span style="font-size:9px;">20.&nbsp; Even though auto manufacturers do not ordinarily charge an explicit fee in exchange for licensing their brands, there may be challenges based on other costs associated with an established business being the functional equivalent of a franchise fee.&nbsp; <em>See e.g. Wright-Moore Corp. v. Ricoh Corp.</em>, 908 F.2d 128, 135 (7th Cir. 1990) (investment in excess inventory may constitute an indirect franchise fee).</span></div> <div> &nbsp;</div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/news/carewido070819 Seyfarth Welcomes Chief Inclusion & Diversity Officer Kori S. Carew, Esq. https://www.seyfarth.com:443/news/carewido070819 Mon, 08 Jul 2019 00:00:00 -0400 <p> Seyfarth Shaw LLP has welcomed Kori S. Carew, Esq. as Chief Inclusion &amp; Diversity Officer, who joins from Shook, Hardy &amp; Bacon LLP, where she was the Director of Strategic Diversity Initiatives for the past seven years.</p> <p> In this newly created role, Carew is responsible for advancing Seyfarth&rsquo;s inclusion and diversity strategy, and accelerating its existing portfolio of award-winning programs and external partnerships.</p> <p> &ldquo;We are thrilled to welcome Kori to the Seyfarth family,&rdquo; said Pete Miller, Seyfarth&rsquo;s chair and managing partner. &ldquo;Kori is an impactful leader who will bring even greater focus to our efforts and drive our continued success in creating a more inclusive and diverse culture&mdash;which is critically important to our people, our clients, and the firm at large.&rdquo;</p> <p> Over her career, Carew has become a sought-after authority on inclusive leadership, cultural fluency, having courageous discussions on difficult topics, and how best to empower and equip diverse talent for success. Under Kori&rsquo;s leadership, her prior firm earned over 40 top accolades such as 100% scores on the Human Rights Council&rsquo;s Corporate Equality Index, successive Gold Standard recognitions from the Women in Law Empowerment Forum, and inclusion in the &ldquo;Best Law Firms for Women&rdquo; from <em>Working Mother</em> magazine, as well as top diversity awards from clients like The Coca-Cola Company.</p> <p> &ldquo;Every belonging, inclusion and diversity professional desires to work with a committed team, leadership that has their back, and a culture willing to lean in to discomfort if that&rsquo;s what it takes to move forward. For me, Seyfarth checks all the boxes,&rdquo; said Carew.</p> <p> Earlier in her career, Carew was a trial attorney and law firm partner where she was actively engaged in diversity and inclusion initiatives. This included serving an integral role in designing and implementing diversity strategies. Known for her bold and creative approach to problem solving, insightful voice, thought leadership on belonging, inclusion, diversity and courage, Carew has over 25 years of experience facilitating solutions to difficult diversity and inclusion obstacles.</p> <p> &ldquo;With her deep experience, credentials and successful track record in the legal industry, Kori is extremely well-prepared to collaborate with our clients on the many diversity and inclusion initiatives we pursue together,&rdquo; said Laura Maechtlen, co-chair of Seyfarth&rsquo;s Diversity &amp; Inclusion Action Team.</p> <p> &ldquo;Kori is exactly the leader we envisioned for this important role. We&rsquo;re excited to see her leadership displayed in diversity initiatives and events throughout the country,&rdquo; said Gerald Pauling, co-chair of Seyfarth&rsquo;s Diversity &amp; Inclusion Action Team.</p> <p> A recognized industry leader in law firm diversity, Seyfarth was recently shortlisted for the 2019 <em>Chambers USA</em> Diversity &amp; Inclusion Awards. Notably, the firm was nominated for Outstanding Diversity &amp; Inclusion Program in recognition of Seyfarth&rsquo;s &ldquo;Rooney Rule&rdquo; initiative which, inspired by the NFL, has helped improve the hiring of diverse candidates across the firm.</p> <p> <strong>A Celebrated Leader and Dynamic Champion for Workplace Diversity and Inclusion </strong></p> <p> Recently, Carew spent time with Dr. Bren&eacute; Brown, renowned professor and five-time #1 <em>New York Times</em> bestselling author, completing the Dare to Lead&trade; Facilitator Certification Program for leadership and organizational development professionals. Notably, in an article discussing why leaders should choose courage over comfort, Dr. Brown praised Carew&rsquo;s 2017 Tedx Talk, &ldquo;Just belonging: finding the courage to interrupt bias.&rdquo;</p> <p> &ldquo;Kori is an inspirational, motivational, dynamic, and powerful champion of diversity and inclusion. For years I have watched with admiration as she leans forward&mdash;and even pulls forward&mdash;international firms, and a broad array of other industries, towards achieving aggressive D&amp;I objectives,&rdquo; remarked Carew&rsquo;s former client Andrew Cooper, Vice President, Chief Legal Officer for UPS Airlines.</p> <p> Active in a number of industry organizations, Carew also chairs the Defense Research Institute&#39;s Diversity Subcommittee of the Women in the Law Committee. She received her J.D., <em>order of the barristers</em>, from Drake University Law School and earned her B.A. from Westmar University.</p> <p> <strong>About Seyfarth Shaw LLP</strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 15 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com ">bkiefer@seyfarth.com </a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/publications/TBT070419 The Week in Weed: July 5, 2019 https://www.seyfarth.com:443/publications/TBT070419 Thu, 04 Jul 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/the-week-in-weed-july-5-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ADA070319 FOURTH CIRCUIT SAYS INABILITY TO GET INFORMATION FROM WEBSITE, WITHOUT MORE, IS NOT ENOUGH TO ESTABLISH STANDING TO SUE https://www.seyfarth.com:443/publications/ADA070319 Wed, 03 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Courts in the Fourth Circuit are taking a hard look at a plaintiffs&rsquo; standing in website accessibility cases.<br /> <br /> <a href="https://www.adatitleiii.com/2019/07/fourth-circuit-says-inability-to-get-information-from-website-without-more-is-not-enough-to-establish-standing-to-sue/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/FutureEnterprise070319 NY Lawmakers Propose Gig Worker Protection Law https://www.seyfarth.com:443/publications/FutureEnterprise070319 Wed, 03 Jul 2019 00:00:00 -0400 <p> On June 14 and 15, lawmakers in the New York State Assembly and the New York State Senate introduced the &ldquo;Dependent Worker Act,&rdquo; which would classify workers in the gig economy as &ldquo;dependent workers&rdquo; under New York law and extend to them the right to unionize and collectively bargain with their employers, and also provide them with the right to bring wage theft claims.<br /> <br /> <a href="https://www.futureenterprise.com/blog/2019/7/2/ny-lawmakers-propose-gig-worker-protection-law">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/LR070319 NY Lawmakers Propose Gig Worker Protection Law https://www.seyfarth.com:443/publications/LR070319 Wed, 03 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Just before the end of the legislative session, lawmakers in New York introduced the &ldquo;Dependent Worker Act,&rdquo; which proposes to provide workers in the gig economy with certain rights, including the right to unionize.<br /> <br /> <a href="https://www.employerlaborrelations.com/2019/07/03/ny-lawmakers-propose-gig-worker-protection-law/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE070319 Illinois Supreme Court Affirms Pollution Control Board’s Clean Construction or Demolition Debris Rules, and Articulates Guidelines for Determining if Agency Action is Arbitrary or Capricious https://www.seyfarth.com:443/publications/WSE070319 Wed, 03 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The Illinois Supreme Court recently affirmed that the Illinois Pollution Control Board&rsquo;s clean construction or demolition debris (CCDD) rules were not arbitrary and capricious. County of Will v. Pollution Control Board, Docket Nos. 122798 and 122813 (June 20, 2019).<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/rcra/illinois-supreme-court-affirms-pollution-control-boards-clean-construction-or-demolition-debris-rules-and-articulates-guidelines-for-determining-if-agency-action-is-arbitrary-or-capricious/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS070219 Supreme Court Issues Decision Significantly Expanding the Scope of FOIA’s Confidentiality Exemption https://www.seyfarth.com:443/publications/TS070219 Tue, 02 Jul 2019 00:00:00 -0400 <p> On June 24, 2019, the Supreme Court issued its decision in Food Marketing Institute v. Argus Leader Media and resolved fractured circuit splits about the parameters for when the government may withhold information from a Freedom of Information Act (&ldquo;FOIA&rdquo;) request based on responsive information being confidential or a trade secret. Earlier this year, we reported on this case when the Supreme Court granted certiorari and predicted that the case would have significant ramifications for the protections given to sensitive information submitted by companies to the government.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/07/articles/trade-secrets/supreme-court-issues-decision-significantly-expanding-the-scope-of-foias-confidentiality-exemption/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL070219 Happy Fourth of July! https://www.seyfarth.com:443/publications/EL070219 Tue, 02 Jul 2019 00:00:00 -0400 <p> The Employment Law Lookout is taking a holiday break this week, but will resume delivering insightful discourse and updates on the day&rsquo;s most pressing workplace issues next week.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/07/happy-fourth-of-july-2/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT070219 Unions Are Going Green: What Cannabis Companies Need To Know About Peace Agreements https://www.seyfarth.com:443/publications/TBT070219 Tue, 02 Jul 2019 00:00:00 -0400 <p> If you are a cannabis business trying to operate in California (and now possibly Illinois too), you&rsquo;ve probably heard that you need to enter into a peace agreement (also known as an LPA). But what is that?<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/07/unions-are-going-green-what-cannabis-companies-need-to-know-about-peace-agreements/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA070219-LIT Oregon Adds Employee-Friendly Requirement to Existing Non-Compete Law… But Also Produces Company-Friendly Trade Secrets Law in Recent Court of Appeals Case https://www.seyfarth.com:443/publications/MA070219-LIT Tue, 02 Jul 2019 00:00:00 -0400 <p> On May 14, 2019, Oregon Governor Kate Brown signed into law HB 2992, which, as of January 1, 2020, requires an employer to provide a terminated employee with a signed, written copy of his or her non-competition agreement within <em><strong>30 days</strong></em> of his or her termination date. Failure to do so will render the agreement voidable and unenforceable in the state of Oregon.</p> <h2> Backdrop for HB 2992</h2> <p> Under current Oregon law (ORS 653.295), a non-competition agreement is not enforceable unless the following four requirements are met: (1) the employer informs the employee of the non-competition agreement in a written employment offer received at least two weeks before the employee&rsquo;s first day, or the agreement is entered into upon promotion; (2) the employee is engaged in administrative, executive, or professional level work; (3) the employer has a protectable interest in requiring the non-competition agreement; and (4) the employee&rsquo;s gross annual salary and commissions at the time of termination exceeds the median family income for a four-person family. Furthermore, the term of a non-competition agreement may not exceed 18 months from the date of the employee&rsquo;s termination. Any time remaining on a non-competition agreement beyond 18 months is voidable and precluded from enforcement by any Oregon court.</p> <p> HB 2992 now adds to these existing limitations, the requirement that terminated employees be provided with copies of their non-competition agreements within 30 days of termination.</p> <h2> Why HB 2992&rsquo;s Thirty-Day Requirement Matters</h2> <p> Because &ldquo;termination&rdquo; includes voluntary termination, i.e., resignation, the new law presents more creative employees with a virtually complete end-run around their non-competition agreements. In theory, such an employee could resign, subsequently request some time to reconsider, and wait until the thirty-day period elapses before immediately starting work with a competitor or engaging in some other activity in violation of his non-competition agreement. If the employer fails to provide him a copy of the agreement within the required time frame, the employer will be left without a mechanism for recourse at the end of the 30 days.</p> <p> This will be equally problematic in cases where a sale, merger, reduction in force, purging policy, or even simply a change in HR personnel, has resulted in destroyed, misplaced, and otherwise difficult-to-locate agreements. Without a copy of the agreement to provide, the employer, under the new law, will also be left without a mechanism for recourse at the end of the 30 days.</p> <p> Employers with Oregon-based employees should consider not only instituting a policy of providing every employee his or her non-competition agreement upon termination, but also taking inventory of existing non-competition agreements and imposing strict polices for the maintenance and tracking of these agreements.</p> <h2> Oregon Court of Appeals Answers the Question of Whether Information Taken by Memory Maintains &ldquo;Trade Secret&rdquo; Protection</h2> <p> An Oregon appellate court recently found that information taken by memory may still constitute a &ldquo;trade secret&rdquo; under the Oregon Uniform Trade Secret Act and accordingly maintain its protection against disclosure.</p> <p> The issue before the court of appeals in <em>Pelican Bay Forest Products, Inc. v. W. Timber Products, Inc.</em>, was whether the trial court erred in granting summary judgment on Pelican Bay&rsquo;s trade secrets claim. The question turned on (1) whether the information taken by the former employee&mdash;in this case, a customer list&mdash;was a &ldquo;trade secret&rdquo; under ORS 646.461(4), and (2) whether the defendants &ldquo;misappropriated&rdquo; that information under ORS 646.461(2)(d)(C), even though the information had been memorized by the former employee. 297 Or. App. 417 (2019).</p> <h2> The Court&rsquo;s Analysis in <em>Pelican Bay</em></h2> <p> The court of appeals ultimately held that the trial court erred in granting summary judgment for the competitors based on insufficient evidence of misappropriation. In its analysis, the court discussed the evidence Pelican Bay presented on the information taken and how the information was acquired by Timber Products, a direct competitor.</p> <p> The court determined that the customer information taken and disseminated by the former employee constituted a trade secret, which Pelican Bay had made reasonable efforts to keep confidential. The court described the value of customer-specific information and client lists, particularly in the lumber trading industry which, as the defendants admitted, is competitive and requires years to build up a quality book of business. In addition, the former employee hired by Timber Products, would not have been hired <em>but for</em> his access to Pelican Bay&rsquo;s customer information, a fact that allowed the court to infer that (1) the information was not generally known to the public, and (2) that the information held economic value as a result.</p> <p> The court noted that Pelican Bay had required the former employee to sign an &ldquo;Employee Acknowledgement,&rdquo; in which he agreed to abide by the policies in Pelican Bay&rsquo;s Handbook. The Handbook, incorporated by reference, contained a confidentiality agreement providing that Pelican Bay&rsquo;s confidential proprietary information included its customer lists, and that such information was not to be shared with third parties. In addition, Pelican Bay&rsquo;s president had met with the former employee and personally reminded him of his confidentiality obligations&mdash;and this meeting was memorialized by written agreement.</p> <h2> Information Taken &ldquo;by Memory&rdquo;</h2> <p> Importantly, the appellate court rejected the defendants&rsquo; argument that the information taken could not constitute a trade secret because it was taken by memory, as opposed to some tangible form (e.g., emails, copies on a USB drive, etc.). The court observed the lack of any textual support for this argument in Oregon&rsquo;s Uniform Trade Secret Act and stated as follows: &ldquo;[N]othing in the Act suggests that information otherwise constituting a trade secret would lose that status simply because a person is able to take that information in an intangible form. . . . Rather, the terms of the Act are written broadly so as to safeguard trade secrets, no matter the form in which they may be misappropriated.&rdquo; 297 Or. App. at 430-31. Without this limitation in the statute, the court went on to find that the evidence presented by Pelican Bay was &ldquo;sufficient to permit a reasonable factfinder to find that defendants &lsquo;misappropriated&rsquo; Pelican Bay&rsquo;s confidential customer information. . . . <em>in that manner</em>.&rdquo; 297 Or. App. at 431 (emphasis added).</p> <h2> Takeaways</h2> <p> While this is a favorable ruling for Oregon businesses, especially those for whom customer lists are particularly crucial, employers should remain vigilant when it comes to proprietary information, and revisit their policies and agreements governing employee access and use of such information.</p> https://www.seyfarth.com:443/publications/MA0702192-LIT Supreme Court Issues Decision Significantly Expanding the Scope of FOIA’s Confidentiality Exemption https://www.seyfarth.com:443/publications/MA0702192-LIT Tue, 02 Jul 2019 00:00:00 -0400 <p> On June 24, 2019, the Supreme Court issued its decision in <em><a href="https://www.supremecourt.gov/opinions/18pdf/18-481_5426.pdf">Food Marketing Institute v. Argus Leader Media</a></em> and resolved fractured circuit splits about the parameters for when the government may withhold information from a Freedom of Information Act (&ldquo;FOIA&rdquo;) request based on responsive information being confidential or a trade secret. Earlier this year, we <a href="https://www.tradesecretslaw.com/2019/01/articles/trade-secrets/supreme-court-grants-cert-to-interpret-meaning-of-confidential-or-trade-secret-under-foia/">reported on this case</a> when the Supreme Court granted <em>certiorari</em> and predicted that the case would have significant ramifications for the protections given to sensitive information submitted by companies to the government.</p> <p> And it has. The Court did away with the former requirement that the company requesting confidential treatment demonstrate it would suffer &ldquo;substantial competitive harm,&rdquo; which, in practice, could be quite costly to prove up and, as a practical matter, required the company to prove harm based on the occurrence of a hypothetical event. Now, an entity seeking shelter under FOIA&rsquo;s confidentiality exemption, Exemption 4, need only show that (1) the commercial or financial information is customarily and actually treated as private by its owner; and (2) that the information was provided to the government under an assurance of privacy. The decision creates a far more accommodating framework for entities seeking to protect information as confidential under FOIA Exemption 4.</p> <h2> FOIA Exemption 4</h2> <p> FOIA Exemption 4 protects &ldquo;trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.&rdquo; Prior to the FMI decision, the Supreme Court had never weighed in on what that meant, leaving a wide range of circuit-level decisions. In early decisions, the courts adhered to the ordinary, everyday usage of the term &ldquo;confidential,&rdquo; viewing it as commercial or financial information that the person would not want in the public sphere. A company&rsquo;s price lists would be one such example. This interpretation generally comports with the understanding of what constitutes &ldquo;confidential information&rdquo; for purposes of non-disclosure agreements.</p> <p> But, in <em>National Parks &amp; Conservation Association v. Morto</em>n (1974), the D.C. Circuit adopted a much different and somewhat counterintuitive test, holding that the government may invoke FOIA Exemption 4 and refuse disclosure of so-called confidential information requested under FOIA only if the disclosure is likely either to (1) impair the government&rsquo;s ability to obtain necessary information in the future (&ldquo;impairment&rdquo;); or (2) cause substantial harm to the competitive position of the person from whom the information was originally obtained (&ldquo;competitive harm&rdquo;).</p> <p> Most circuits adopted this test or something very similar to it, even though lower courts and litigants generally criticized the test as unmoored from any ordinary understanding of what qualified as confidential information. Although the Supreme Court had previously declined to grant <em>certiorari</em> in cases where the test was challenged, that changed when it agreed to hear the FMI case.</p> <h2> The Food Marketing Institute Case</h2> <p> <em>The Argus Leader</em>, a South Dakota newspaper, submitted a FOIA request to the United States Department of Agriculture (&ldquo;USDA&rdquo;) seeking the name, unique identifier, address, store type and the yearly Supplemental Nutrition Assistance Program (&ldquo;SNAP&rdquo;) sales figures for every store in the United States. The USDA produced all the data requested, except for the yearly revenue, which it withheld under Exemption 4. After exhausting its administrative remedies, Argus sued the USDA in district court.&nbsp;</p> <p> The district court initially granted summary judgment in the government&rsquo;s favor. The Eighth Circuit reversed and instructed the district court to consider whether releasing store-level SNAP data would likely result in substantial harm to the stores that submitted the data.&nbsp;</p> <p> After a two-day bench trial, the district court ruled in favor of Argus and in support of the data&rsquo;s release. The USDA made known that it intended to release the data to Argus, which in turn caused Food Marketing Institute (&ldquo;FMI&rdquo;) to obtain leave to intervene and then file an appeal.&nbsp;</p> <p> Now on appeal for the second time, the Eighth Circuit affirmed the district court&rsquo;s judgment. The circuit court found that, although the SNAP data could be commercially useful, that was not enough to show that FMI&rsquo;s members, retail food stores that participate in SNAP, and others would experience a substantial likelihood of competitive harm.&nbsp;</p> <p> FMI then filed for <em>certiorari</em> and asked the Supreme Court to abandon the competitive harm test or, alternatively, apply the test and find that the district court and circuit court erred. FMI urged the Court to reject the D.C. Circuit&rsquo;s <em>National Parks</em> test and instead apply the plain meaning of the term &ldquo;confidential,&rdquo; as the D.C. Circuit had done when determining what constituted &ldquo;commercial or financial&rdquo; information. FMI objected to <em>National Parks</em>&rsquo; focus on whether the information&rsquo;s release would cause &ldquo;substantial competitive harm,&rdquo; which represents a reversal of the test when assessing whether information is confidential or a trade secret: whether the information provides a competitive advantage by virtue of the information not being broadly known.&nbsp;</p> <h2> The Supreme Court Reverses the Eighth Circuit</h2> <p> In a 6-3 decision, the Supreme Court reversed the Eighth Circuit, holding that the <em>National Parks</em> test grafted requirements onto Exemption 4 that lacked any textual support. After quickly finding standing, the majority turned to the &ldquo;ordinary, contemporary, common meaning&rdquo; for the undefined term &ldquo;confidential.&rdquo; From dictionary definitions, the Court viewed the core aspects of confidentiality as requiring that the information be &ldquo;customarily kept private&rdquo; or &ldquo;closely held&rdquo; and that the receiving party provide some assurance that it will remain secret.&nbsp;</p> <p> The Court did not find any indication that confidentiality required the disclosing party to demonstrate that, if the information were shared, that some harm would result from the disclosure. Rather, the Court criticized <em>National Park</em>&rsquo;s introduction of the &ldquo;substantial competitive harm&rdquo; test as a &ldquo;relic from a &lsquo;bygone era of statutory construction&rsquo;&rdquo; that resulted from elevating legislative history over the statute&rsquo;s text and structure. The Court also found significant that subsequent cases had actually created two definitions of what qualified as &ldquo;confidential&rdquo; based on whether the disclosure was voluntary or involuntary. The Court did not address whether a party could disclose information to the government without requiring the government to keep it confidential and then later assert that it is confidential information protected under Exemption 4.</p> <p> The three dissenting Justices agreed with the outcome and that the <em>National Parks</em> test had gone too far in requiring the disclosing party to prove harm but were of the view that the majority went too far in jettisoning from the test any harm requirement. The dissent advocated for the test to incorporate an additional element: whether release of the information &ldquo;will cause genuine harm to an owner&rsquo;s economic or business interests.&rdquo; The dissent considered this requirement to be more accommodating than <em>National Parks</em> while still preserving FOIA&rsquo;s preference for disclosure and narrow construction of its exemptions.</p> <h2> The Key Takeaways</h2> <p> The Court&rsquo;s decision has significant ramifications for industries that provide important, valuable data to the government, particularly where the confidential information is subject to a mandatory reporting or disclosure obligation. The decision also generally supports the proposition that companies can maintain property rights in their confidential information through written agreements (such as those used with employees and third parties) and that courts should give effect to those agreements.&nbsp;</p> <p> As a result of this decision, government contractors will likely be able to protect more information that is disclosed to the government. In contrast, government contractors that regularly seek such information through FOIA requests may receive much less information in response.&nbsp;</p> <p> Prior to disclosing confidential information, entities faced with a government request to disclose information should clearly identify and label confidential information as confidential and also seek to obtain written assurances from the government that such information will be treated as such. Entities should also review their internal policies and procedures to proactively identify materials that warrant confidential treatment and to establish procedures for how such materials should be handled when distributed to the government or other third parties. Of course, once implemented, all such policies should be vigilantly enforced so that such policies are not used as evidence of a company&rsquo;s non-compliance with its own procedures.</p> https://www.seyfarth.com:443/publications/CCD070119 District Court Judge Rejects M&A Mootness Fee Settlement As A “Racket” That “Must End” https://www.seyfarth.com:443/publications/CCD070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Following Delaware&rsquo;s lead in Trulia, an Illinois District Court judge refused to approve a mootness fee settlement as &ldquo;worthless to the shareholders.&rdquo; The judge noted that such settlements amounted to a plaintiffs&rsquo; bar &ldquo;racket&rdquo; with the goal of obtaining fees in cases that should be &ldquo;dismissed out of hand.&rdquo; Specifically, Judge Thomas M. Durkin exercised his &ldquo;inherent authority&rdquo; to abrogate the settlement of shareholder litigation arising out of the proposed acquisition of Akorn, Inc. In ordering Plaintiffs&rsquo; counsel to return the $322,000 mootness fee paid in connection with the settlement, the Court signaled that this decision should mark the beginning of the end for the merger objection litigation &ldquo;racket,&rdquo; which recently shifted from Delaware Chancery Court to federal court following Delaware&rsquo;s 2016 Trulia decision, which cracked down on merger litigation in Delaware. A recent study1 about mootness fees found that in 2018 alone at least 65% of federal merger litigation filings resulted in a settlement after supplemental disclosures were made accompanied by the payment of a mootness fee to Plaintiffs&rsquo; attorneys. These mootness fee settlements generally occur without meaningful judicial oversight, and the negotiated supplemental disclosures often provide little or no value to shareholders.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/07/district-court-judge-rejects-ma-mootness-fee-settlement-as-a-racket-that-must-end/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CONS070119 Chuck Wall to Moderate a Panel at the 2019 ARTBA P3 Conference on July 19 https://www.seyfarth.com:443/publications/CONS070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Seyfarth Shaw partner Chuck Wall will moderate a panel entitled &ldquo;(Don&rsquo;t) Kill All the Lawyers&hellip;Untangling Risk Issues in P3 Projects&rdquo; on Friday, July 19. The panel will be featured at the American Road &amp; Transportation Builders Association (ARTBA) Public-Private Partnerships in Transportation Conference. The program is intended to explore legal perspectives on key contractual risk issues in the current P3 market. Topics will include a look at the current state of risk allocations and whether P3 risk profiles and tolerances may be shifting.<br /> <br /> <a href="https://www.constructionseyt.com/2019/07/chuck-wall-to-moderate-a-panel-at-the-2019-artba-p3-conference-on-july-19/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/IMM070119 Too Natural for Naturalization: An Update https://www.seyfarth.com:443/publications/IMM070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> On May 29, 2019, forty-seven members of Congress wrote a letter to Attorney General Bob Barr and Acting Secretary of Homeland Security Kevin McAleenan registering their disagreement with the application of USCIS policy guidance to those who have been employed in the legal cannabis industry.<br /> <br /> <a href="https://www.bigimmigrationlawblog.com/2019/07/too-natural-for-naturalization-an-update/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM07019-LIT District Court Judge Rejects M&A Mootness Fee Settlement As A “Racket” That “Must End” https://www.seyfarth.com:443/publications/OMM07019-LIT Mon, 01 Jul 2019 00:00:00 -0400 <div> <strong>Seyfarth Synopsis:</strong>&nbsp; Following Delaware&rsquo;s lead in <em>Trulia</em>, an Illinois District Court judge refused to approve a mootness fee settlement as &ldquo;worthless to the shareholders.&rdquo;&nbsp; The judge noted that such settlements amounted to a plaintiffs&rsquo; bar &ldquo;racket&rdquo; with the goal of obtaining fees in cases that should be &ldquo;dismissed out of hand.&rdquo;&nbsp; Specifically, Judge Thomas M. Durkin exercised his &ldquo;inherent authority&rdquo; to abrogate the settlement of shareholder litigation arising out of the proposed acquisition of Akorn, Inc.&nbsp; In ordering Plaintiffs&rsquo; counsel to return the $322,000 mootness fee paid in connection with the settlement, the Court signaled that this decision should mark the beginning of the end for the merger objection litigation &ldquo;racket,&rdquo; which recently shifted from Delaware Chancery Court to federal court following Delaware&rsquo;s 2016 <em>Trulia </em>decision, which cracked down on merger litigation in Delaware.&nbsp; A recent <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3398405">study</a><sup>1</sup> about mootness fees found that in 2018 alone at least 65% of federal merger litigation filings resulted in a settlement after supplemental disclosures were made accompanied by the payment of a mootness fee to Plaintiffs&rsquo; attorneys.&nbsp; These mootness fee settlements generally occur without meaningful judicial oversight, and the negotiated supplemental disclosures often provide little or no value to shareholders.</div> <div> &nbsp;&nbsp;</div> <div> Presumably, the decision in <em>Akorn </em>will further deter the filing of merger litigation now that several courts have reprimanded plaintiffs&rsquo; counsel for bringing meritless claims in order to obtain a quick pay day.&nbsp; Indeed, based on Judge Durkin&rsquo;s ruling, plaintiffs&rsquo; counsel should no longer assume they can avoid judicial review of mootness fee settlements or assume they can keep fees paid pursuant to those settlements.&nbsp; If the case is appealed, it will be closely watched and if upheld could have important effects in the Seventh Circuit and elsewhere.&nbsp; Moreover, as a policy matter this decision should further raise the profile of this issue and hopefully result in legislation which will curb the abuse present here.&nbsp;&nbsp;</div> <h3> Background</h3> <div> Plaintiff shareholders sued Akorn, Inc. and its board of directors in connection with its proposed acquisition.&nbsp; After Akorn revised its proxy statement and issued a Form 8-K, Plaintiffs voluntarily dismissed their lawsuits and settled for a $322,000 mootness fee.&nbsp; Following the settlement, one shareholder filed a motion to intervene to object to the settlement.&nbsp; The Court denied that motion, but in light of the shareholder&rsquo;s arguments ordered the parties to brief the issue of whether the Court should abrogate the settlement agreements in light of a recent Seventh Circuit&rsquo;s decision, Judge Richard Posner overturned the district court&rsquo;s approval of a disclosure only settlement and referenced Chancellor Bouchard&rsquo;s decision in <em>Trulia</em>, wherein the Chancery Court held that disclosures made in this context must be &ldquo;plainly material . . . mean[ing] that it should not be a close call that the . . . information is material.&rdquo;&nbsp; <em>In re Trulia, Inc. Stockholder Litig.</em>, 129 A.3d 884, 894 (Del. Ch. 2016).&nbsp; Because no class was certified in this case and no class claims were released in the settlement, the Court determined that it must assess whether &ldquo;a class action that seeks only worthless benefits for the class should be dismissed out of hand.&rdquo;&nbsp; The Court then reviewed each of the disclosures that Plaintiffs sought in their complaints and ruled that they were not &ldquo;plainly material&rdquo; and instead were &ldquo;worthless to the shareholders&rdquo; and &ldquo;caused the company in which they hold an interest to lose money.&rdquo;&nbsp; Because &ldquo;[t]he quick settlements obviously took place in an effort to avoid the judicial review this decision imposes,&rdquo; the Court declared that &ldquo;this sharp practice &lsquo;must end.&rsquo;&rdquo;</div> <h3> Takeaways</h3> <p> 1. <u>Other Federal Judges May Start Scrutinizing Mootness Fee Settlements.</u>&nbsp;&nbsp;</p> <div> &nbsp;</div> <div> Judge Durkin&rsquo;s decision has paved the way for other judges, particularly in the Seventh Circuit, to exercise their inherent authority to abrogate mootness fee settlements that they in the past may have concluded they don&rsquo;t have the authority to review.</div> <div> &nbsp;</div> <div> 2. <u>Reaffirms High Bar To Finding That Supplemental Disclosures Are Plainly Material.</u>&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The Court deemed all of Plaintiffs&rsquo; additional sought-after disclosures as &ldquo;not &lsquo;plainly material&rsquo;&rdquo; and &ldquo;worthless to the shareholders.&rdquo;&nbsp; These included the following:&nbsp;</div> <ul> <li> <u>GAAP reconciliation of the proxy&rsquo;s projections</u> because the applicable SEC regulation requiring GAAP reconciliation does &ldquo;not apply to . . . a disclosure relating to a proposed business combination.&rdquo;<br /> &nbsp;</li> <li> <u>Certain components of financial advisor&rsquo;s analysis</u> because (i) the information was already provided in the original proxy; (ii) shareholders can make their own determination as to whether a growth rate range is reasonable in light of prior performance; and (iii) courts find that only a &ldquo;fair summary&rdquo; of data underlying a financial advisor&rsquo;s opinion must be disclosed.<br /> &nbsp;</li> <li> <u>Financial advisor&rsquo;s compensation from Akorn</u> because (i) that information was disclosed in the original proxy, and (ii) the fact that the fee was contingent on consummation of the merger could be inferred from other language in the proxy and, moreover, is plainly not material.<br /> &nbsp;</li> <li> <u>Financial advisor&rsquo;s compensation from the buyer</u> because the exact historical payments were deemed not material and the proxy, in any event, did not indicate that the financial advisor was continuing to receive payments from the buyer.<br /> &nbsp;</li> <li> <u>Potential upside in stand-alone strategic plan</u> because the &ldquo;upside&rdquo; was readily apparent in that avoiding the merger means avoiding the costs and the relinquishment of control inherent to the merger and that it was sufficient to disclose in the proxy that the plan involved significant risks in light of the industry and competitive pressures the Company faced.&nbsp; The Board additionally translated those concerns into financial projections that were provided in the proxy. Moreover, Plaintiff settled the case without receiving this information, which cast significant doubt on whether information was truly material.<br /> &nbsp;</li> <li> <u>Substance of the March 2017 projections</u> because (i) &ldquo;completeness&rdquo; is not the standard for disclosure; (ii) Plaintiff did not identify what information in particular was necessary to evaluate the merger; and (iii) Plaintiff settled without receiving this information, which again cast doubt on its materiality.<br /> &nbsp;</li> <li> <u>Other potential buyers and the reason for their rejection</u> because the Board had disclosed that it determined &ldquo;it was highly unlikely that any of those counterparties would be interested in an acquisition of the Company at that time due to competing strategic priorities and recent acquisitions in the industry&rdquo; and detailed information about potential buyers that weren&rsquo;t actually considered is not material.<br /> &nbsp;</li> <li> <u>Pending litigation</u> because (i) the lawsuits were public record prior to issuance of the original proxy, and (ii) the allegation that the Board had ulterior motives related to absolving themselves of liability arising from pending litigation is unfounded speculation and, moreover, does not seek information relevant to the merger.</li> </ul> <div> &nbsp;</div> <div> For a copy of the opinion, click <a href="https://www.seyfarth.com/dir_docs/publications/House-v-Akorn_062419.pdf">here</a>.</div> <div> &nbsp;</div> <div> <hr /> <div> <span style="font-size:9px;">1 Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon &amp; Randall S. Thomas, <em>Mootness Fees</em>, Vanderbilt Law Review, Forthcoming; U of Penn, Inst. for Law &amp; Econ. Research Paper No.</span></div> <div> <span style="font-size:9px;">19-26 (May 29, 2019).</span></div> </div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/OMM070119-LE Reminder: 100 Days Until NYS Deadline for Employers to Provide Sexual Harassment Prevention Training https://www.seyfarth.com:443/publications/OMM070119-LE Mon, 01 Jul 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>All New York State employers must provide all employees with annual, interactive sexual harassment prevention training by October 9, 2019.</em></p> <p> On April 12, 2018, New York State enacted comprehensive legislation targeting workplace sexual harassment. Among other things, the law requires every employer to either adopt the State&rsquo;s <a href="https://www.ny.gov/combating-sexual-harassment-workplace/employers">model </a>training program, or establish its own training program that equals or exceeds the minimum standards set by the State.</p> <p> All employees&mdash;including undocumented immigrants, exempt and non-exempt employees, part-time workers, seasonal workers, and temporary workers&mdash;must be trained by October 9, 2019, which is 100 days from the date of publication of this Alert. The training must be interactive, provided annually &ldquo;in the language spoken by [the] employees,&rdquo; and counted as regular work hours. Our previous Alerts outlining the various provisions of the New York State law and the model training program are linked <a href="https://www.seyfarth.com/publications/MA040518-LE">here</a> and <a href="https://www.laborandemploymentlawcounsel.com/2018/10/new-york-state-releases-final-anti-sexual-harassment-materials/">here</a>.</p> <p> New York City employers should note that the &ldquo;Stop Sexual Harassment in NYC Act,&rdquo; which went into effect on April 1, 2019, contains similar yet non-identical training requirements. Notable differences include that the NYC law covers only employers with 15 or more employees, contains a 3-year recordkeeping requirement, and requires employees to be trained on bystander intervention. Our previous Alerts further detailing the NYC law and comparing the State and City laws are linked <a href="https://www.seyfarth.com/publications/MA041718-LE2">here</a> and <a href="https://www.seyfarth.com/publications/MA051418-LE">here</a>.</p> <p> The New York City Commission on Human Rights has developed an <a href="https://www1.nyc.gov/site/cchr/law/sexual-harassment-training.page">online training program </a>that satisfies both the New York State and New York City requirements. New York City employers with 15 or more employees that opt to create their own policies should take care to meet or exceed both the State and City requirements. &nbsp;</p> <p> The attorneys at Seyfarth Shaw LLP are available to provide assistance with both State and City obligations, including ensuring that employers have robust policies in place regarding anti-harassment in the workplace and procedures to effectively respond to complaints.&nbsp; We can also provide interactive anti-harassment training tailored to your company&rsquo;s specific business and needs.</p> https://www.seyfarth.com:443/publications/RS070119-LE Regulatory Spring: Rulemaking by the Wage & Hour Division - July 1, 2019 https://www.seyfarth.com:443/publications/RS070119-LE Mon, 01 Jul 2019 00:00:00 -0400 <p> Last&nbsp;week, Seyfarth submitted comments regarding the DOL&rsquo;s proposal to update the federal regulations that set the standard for determining whether a business can be held liable as a joint employer under the FLSA. You can see a copy of the comments by clicking <a href="http://marketing.seyfarth.com/rs/ct.aspx?ct=24F76618D3E10AEDC1D181ADD728911BDDBE4185FEB4211">here</a>.<br /> <br /> In our comments, we applaud the DOL&rsquo;s move to update the joint employer rule. The current rule is outdated and murky, and it has left far too many businesses to grapple with uncertainty over whether and when they might be held liable for the employment practices of the third-parties with which they contract. In addition to complicating risk assessment, the current rule has proven prone to protracted and costly litigation, as well as conflicting interpretations across federal judicial circuits. By supplanting the old rule with a four-factor test that focuses on exercised control, rather than theoretical or unexercised power, the DOL&rsquo;s proposed rule&nbsp;is a much needed step in the right direction.<br /> <br /> Yet as noted in our comment, the rule could be even clearer and more predictable for the regulated community. To that end, we suggest in our comments various changes that would help to reduce the potential for conflicting interpretations and litigation pertaining to certain aspects of the proposed rule. Likewise, we recommend the addition of further examples illustrating what might prove joint employer status and what should not.<br /> <br /> For instance, business practices that should be irrelevant to the joint employer&nbsp;determination include when another business&rsquo;s employees:</p> <ul> <li> Use the email systems of, or share common email addresses with, the benefitted entity (i.e., the entity contracting with the worker&rsquo;s direct employer);</li> <li> Have access to the benefitted entity&rsquo;s electronic portals and platforms containing guidelines, forms, systems, tools, etc.;</li> <li> Use materials, tools, systems, and other conveyances bearing the benefitted entity&rsquo;s brand or logo; sign in or out on a timekeeping system or a log provided or maintained by the benefitted entity to facilitate compliance with applicable laws, regulations, or contractual requirements or expectations;</li> <li> Have freedom to use the benefitted entity&rsquo;s common facilities, e.g., cafeterias, break areas, and nursing mother rooms; or</li> <li> Participate in meetings conducted by the benefitted entity pertaining to matters such as health, safety, and legal compliance.</li> </ul> <p> Similarly, we explain in our comment, the final rule should clarify that the joint employment analysis is not be impacted by:</p> <ul> <li> A benefitted entity merely having access to or possession of data pertaining to a direct employer&rsquo;s employees;</li> <li> A benefitted entity&rsquo;s placement of its personnel for periods of time in management, executive, or board-level roles of the direct employer, as long as such placement and associated involvement does not establish actual exercise of control or otherwise effect the analysis of the Final Rule&rsquo;s other factors;</li> <li> A direct employer&rsquo;s use of policies and handbooks provided or recommended by the benefitted entity as fulfilling best practice models;</li> <li> The collaboration among benefitted entities and direct employers in initiatives to drive revenue-producing and operations enhancing advantages for the whole; e.g.: (a) when a franchisor participates in job fairs or job postings and other recruiting initiatives with franchisees; (b) when benefitted entities collaborate with direct employers to develop and implement systems and processes helpful to business operations; and (c) when committees comprising representatives of benefitted entities&rsquo; and direct employers&rsquo; collaborate to develop policies and similar matters;&nbsp;</li> <li> The engagement of similar or the same lawyers, law firms, accountants, accounting firms, consultants, consulting firms, or any other professional or non-professional services providers engaged commonly by both entities;</li> <li> Engaging in co-location practices beyond the &ldquo;store within a store&rdquo; arrangement cited in the Proposed Rule, such as subleasing, back-of-house, and computer coding teams;</li> <li> The benefitted entity&rsquo;s processing of payroll or administration / provision of other functions and services pursuant to arms&rsquo; length deals negotiated at reasonable market prices; or</li> <li> The beliefs or communications of the direct employer&rsquo;s employees that do not demonstrate the actual exercise of control by the benefitted entity (such as a worker&rsquo;s representation that he or she &ldquo;works for&rdquo; the benefitted entity).</li> </ul> <p> Of course, this is merely a snippet of the issues that we cover in our full comments. If you have any questions about our comments, please do not hesitate to contact us at <a href="mailto:regulatoryspring@seyfarth.com">regulatoryspring@seyfarth.com</a>. We anticipate that the DOL will publish its final rule in early 2020. We would be happy to discuss these issues with you in the meantime.</p> https://www.seyfarth.com:443/publications/wjgc070119 Raymond Tran and Anthony LaPlaca authored an article in Westlaw Journal Government Contract https://www.seyfarth.com:443/publications/wjgc070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Raymond Tran and Anthony LaPlaca authored a July 1 article in Westlaw Journal Government Contract, &quot;Legal issues to consider for projects that utilize virtual and augmented reality.&quot; The authors discuss how parties to a construction contract can benefit from the use of virtual reality and augmented reality applications.</p> https://www.seyfarth.com:443/news/launeyaba070119 Kristina Launey quoted in the ABA Journal https://www.seyfarth.com:443/news/launeyaba070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Kristina Launey was quoted in a July 1 story from the ABA Journal, &quot;How to make a website accessible.&quot; Launey recommends that companies adopt internal web accessibility policies, as well as guidelines for third-party vendors who provide content that is embedded in their websites. You can read the <a href="http://www.abajournal.com/magazine/article/how-to-make-a-website-accessible">full article here</a>.</p> https://www.seyfarth.com:443/news/launeyabajournal070119 Kristina Launey quoted in the ABA Journal https://www.seyfarth.com:443/news/launeyabajournal070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Kristina Launey was quoted in a July 1 story from the ABA Journal, &quot;ADA questions remain over web accessibility cases and the lack of DOJ regulations.&quot; Despite the lack of specific regulations, Launey says her clients are making their websites more accessible in light of the DOJ response and the Domino&rsquo;s decision. You can read the <a href="http://www.abajournal.com/magazine/article/ada-web-accessibility-doj-regulations">full article here</a>.</p> https://www.seyfarth.com:443/news/grossenbachersiw070119 Karla Grossenbacher quoted in Security InfoWatch https://www.seyfarth.com:443/news/grossenbachersiw070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Karla Grossenbacher was quoted in a July 1 story from Security InfoWatch, &quot;The war on biometrics.&quot; Grossenbacher said that pretty much every state is looking at some form of biometric privacy legislation and she would expect at some point later this year we&rsquo;re going to see some more come through. You can read the <a href="https://www.securityinfowatch.com/access-identity/biometrics/article/21086970/the-war-on-biometrics">full article here</a>.</p> https://www.seyfarth.com:443/news/moralaw360070119 Jennifer Mora quoted in Law360 https://www.seyfarth.com:443/news/moralaw360070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Jennifer Mora was quoted in a July 1 story from Law360, &quot;Cannabis Suits Haunt Employers As More States Legalize.&quot; Mora said that it&rsquo;s not unexpected that there would be more litigation in this space.</p> https://www.seyfarth.com:443/publications/califanokellehermassbar070119 Anthony Califano and Chris Kelleher authored an article in the Massachusetts Bar Association's Section Review https://www.seyfarth.com:443/publications/califanokellehermassbar070119 Mon, 01 Jul 2019 00:00:00 -0400 <p> Anthony Califano and Chris Kelleher authored an article in the July/August issue of the Massachusetts Bar Association&#39;s Section Review, &quot;Fishing On FMLA Leave May Or May Not Be Permissible Activity.&quot; You can read the <a href="https://www.massbar.org/publications/section-review/section-review-article/section-review-2019-july-august-2019/fishing-on-fmla-leave-may-or-may-not-be-permissible-activity">full article here</a>.</p> https://www.seyfarth.com:443/news/adath063019 Seyfarth's ADA statistics referenced in Today's Hotelier https://www.seyfarth.com:443/news/adath063019 Sun, 30 Jun 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a June 30 story from Today&#39;s Hotelier, &quot;The right legal counsel can protect your business.&quot; According to Seyfarth, a staggering 10,163 ADA Title III lawsuits were filed in 2018. That&rsquo;s a 34 percent increase from the 7,663 lawsuits filed in 2017. You can read the <a href="https://www.todayshotelier.com/2019/06/30/the-right-legal-counsel-can-protect-your-business/">full article here</a>.</p> https://www.seyfarth.com:443/publications/WC062819 Biometric Privacy Class Actions By The Numbers: Analyzing Illinois’ Hottest Class Action Trend https://www.seyfarth.com:443/publications/WC062819 Fri, 28 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Over the last few years, Illinois companies have quickly become aware of the risks associated with the state&rsquo;s unique biometric privacy law. Originally passed in 2008, the Illinois Biometric Information Privacy Act (&ldquo;BIPA&rdquo;) made Illinois the first state to enact a policy governing the collection and storage of biometric data resulting in a surge of class action lawsuits filed by employees and consumers alleging that their biometric data was improperly collected for timekeeping, security, and consumer transactions. While filing activity under the statute remained silent for nearly a decade following its enactment, the recent explosion of class actions in Illinois under the BIPA has since made biometric privacy compliance a top priority for many employers. In today&rsquo;s blog, we examine this novel class action trend and provide a comprehensive analysis of the class action filing history of claims under the BIPA including the volume of class action filings, a breakdown of jurisdictions in which class actions are filed, who is filing, and the primary industries facing class actions.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/biometric-privacy-class-actions-by-the-numbers-analyzing-illinois-hottest-class-action-trend/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA062819-LE Connecticut Becomes Seventh State to Enact Paid Family Leave Law https://www.seyfarth.com:443/publications/MA062819-LE Fri, 28 Jun 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Earlier this week, Connecticut became the seventh state with a paid family leave program when Governor Ned Lamont signed the Paid Family and Medical Leave (&ldquo;CPFML&rdquo;) Act</em>.<em>&nbsp; CPFML premium withholdings begin on January 1, 2021 and covered employees can start receiving CPFML benefits on January 1, 2022.</em></p> <p> On June 25, 2019, Connecticut Governor Edward &ldquo;Ned&rdquo; Lamont signed Public Act. No. 19-25, known as the Connecticut Paid Family and Medical Leave (&ldquo;CPFML&rdquo;) Act, into law. This comes after months of disagreement between Connecticut lawmakers and Governor Lamont on how best to setup a CPFML program. &nbsp;Signs pointed towards a resolution when the Connecticut Legislature passed the current version of the CPFML on May 31, 2019.&nbsp; Now, following Governor Lamont&rsquo;s approval, Connecticut is the seventh state in the country to have enacted a comprehensive paid family leave program.<a href="#_ftn1" name="_ftnref1" title="">[1]</a></p> <p> Most notably, the CPFML Act creates a new paid leave program. &nbsp;In addition, the CPFML amends the Connecticut Family and Medical Leave Act (&ldquo;CFMLA&rdquo;), expanding the reasons employees may take leave and the amount of leave available to employees.&nbsp; Like certain other state paid family leave laws,<a href="#_ftn2" name="_ftnref2" title="">[2]</a> the CPFML appears to be fully employee-funded.&nbsp; The employee contribution amount will be established by the Connecticut Paid Family and Medical Leave Insurance Authority (the &ldquo;Authority&rdquo;) in the coming months. Employers must begin to collect contributions as of <strong>January 1, 2021</strong>.&nbsp; Employees will be able to start receiving CPFML benefits, as discussed below, starting <strong>January 1, 2022</strong>.</p> <p> <strong>I</strong><strong>nterplay Between CPFML and CFMLA</strong></p> <p> The CPFML, in part, is an amendment to the CFMLA.&nbsp; Based on the drafting, it appears that the Connecticut Legislature envisioned that the two leaves would work together.&nbsp; The CPFML Act will provide wage replacement benefits up to a maximum of 14 weeks depending on the nature of the absence.&nbsp; The CFMLA has been revised to allow a similar 14-week maximum potential leave in a 12-month period &ndash; a more generous allotment than the 16 weeks in a 24-month period that the CFMLA currently permits.&nbsp; This and other amendments to the CFMLA go into effect on January 1, 2022.</p> <p> CPFML and CFMLA are designed to run concurrently when used for reasons covered by both laws and the employee has time available under both laws. However, based on certain considerations, including different employee eligibility standards, this may not always be the case. &nbsp;In such situations, the employee may be entitled to benefits under and subject to the conditions of one law but not the other.&nbsp;</p> <p> Regulations and administrative guidance on the CPFML, the amended CFMLA, and their interaction are expected in the coming months and years. While employers await clarification on certain aspects of CPFML, here is a summary of the CPFML&rsquo;s key provisions.</p> <p> <strong>Summary of CPFML&rsquo;s Key Provisions</strong></p> <p> <em>Covered Employers</em><br /> &ldquo;Employer&rdquo; is defined broadly as any entity that employs one or more employees. &nbsp;Thus, CPFML will affect virtually all private employers in Connecticut.&nbsp; As of January 1, 2022, &ldquo;employer&rdquo; under the CFMLA will also be expanded to entities with one or more employees &ndash;&nbsp; a significant change from the law&rsquo;s current 75-employee threshold.</p> <p> <em>Covered Employees</em><br /> To be considered a covered employee for CPFML purposes, an employee must have earned at least $2,325 during the employee&rsquo;s highest earning quarter within the base period<a href="#_ftn3" name="_ftnref3" style="background-color: rgb(255, 255, 255);" title="">[3]</a> <strong><u>and</u></strong> meet any of the following conditions: (1) is presently employed; (2) was employed by the employer within the previous 12 weeks; or (3) is self-employed or a sole proprietor and Connecticut resident enrolled in CPFML.&nbsp;&nbsp;</p> <p> To be eligible for leave under the amended CFMLA, effective January 1, 2022, an employee must have been employed for at least three months by the employer from whom leave is requested.&nbsp; To be eligible under the current CFMLA, an employee must be employed for 12 months and have completed 1,000 hours of service before the first day of leave. Thus, as of January 1, 2022, the CFMLA will apply to a much larger number of employees than it does today.</p> <p> <em>Amount and Reasons for Leave</em><br /> The CPFML Act will provide 12 weeks of CPFML benefits in a 12-month period for eligible employees who are absent for one of the below covered reasons. Importantly, where an employee is absent due to a serious health condition resulting in incapacitation that occurs during a pregnancy, she may be entitled to two additional weeks of CPFML benefits (i.e., for a total of 14 weeks in a 12-month period).</p> <p> Employees can receive CPFML benefits for the following reasons:</p> <ul> <li> to care for a family member of the employee with a serious health condition;<a href="#_ftn4" name="_ftnref4" title="">[4]</a></li> <li> for the employee&rsquo;s own serious health condition;</li> <li> to bond with a newly born, adopted, or fostered child;</li> <li> to serve as an organ or bone marrow donor;</li> <li> in connection with a qualifying military exigency of the spouse, son, daughter, or parent of the employee, in accordance with the federal Family and Medical Leave Act (&ldquo;FMLA&rdquo;);</li> <li> military caregiver leave;<a href="#_ftn5" name="_ftnref5" title="">[5]</a> or</li> <li> certain absences related to the employee&rsquo;s status as a victim of family violence.<a href="#_ftn6" name="_ftnref6" title="">[6]</a></li> </ul> <p> The first six bullet points above also are covered reasons under the CFMLA. However, the final bullet point dealing with absences related to family violence incidents is only covered under the CPFML.</p> <p> <em>Covered Family Members</em><br /> Effective January 1, 2022, the definition of &ldquo;family member&rdquo; under both the CPFML and CFMLA will include a (1) spouse, (2) son or daughter, (3) parent, (4) <strong>parent-in-law, </strong>(5)<strong> sibling, </strong>(6) <strong>grandchild, </strong>(7) <strong>grandparent, or </strong>(8) <strong>an individual related to the employee by blood or whose close association to the employee is the equivalent of those family relationships.<a href="#_ftn7" name="_ftnref7" title=""><strong>[7]</strong></a> </strong>&nbsp;Newly covered family members, in contrast to covered family members under the current CMFLA, are in <strong>bold</strong>.&nbsp; These relatives may be related by blood, marriage, adoption, and foster relationships.&nbsp; In addition, step-parents and legal guardians who stood in loco parentis to the employee when the employee was a child are considered &ldquo;family members&rdquo; under the CPFML Act.</p> <p> <em>Benefits</em><br /> CPFML will serve as a wage-replacement, with caps tied to the state minimum wage.&nbsp; Governor Lamont recently signed <a href="https://www.cga.ct.gov/2019/ACT/pa/pdf/2019PA-00004-R00HB-05004-PA.pdf">House Bill No. 5004</a>, which will gradually increase Connecticut&rsquo;s minimum wage to $15 an hour by June 2023.</p> <p> Beginning <strong>January 1, 2022</strong>, covered employees may be entitled to CPFML benefits as follows:<a href="#_ftn8" name="_ftnref8" title="">[8]</a></p> <table border="1" cellpadding="0" cellspacing="0"> <tbody> <tr> <td style="width:330px;"> <p> <strong>Employee&rsquo;s Base Weekly Earnings (&ldquo;BWE&rdquo;)<a href="#_ftn9" name="_ftnref9" title=""><strong>[9]</strong></a></strong></p> </td> <td style="width:294px;"> <p> <strong>CPFML Weekly Benefit</strong></p> </td> </tr> <tr> <td style="width:330px;"> <p> Less than or equal to 40 times the minimum wage</p> </td> <td style="width:294px;"> <p> 95% of BWE, up to 60 times the minimum wage</p> </td> </tr> <tr> <td style="width:330px;"> <p> Greater than 40 times the minimum wage</p> </td> <td style="width:294px;"> <p> 60% of BWE, up to 60 times the minimum wage</p> </td> </tr> </tbody> </table> <p> &nbsp;</p> <p> Based on the recently signed Connecticut minimum wage increases, in 2022, CPFML benefits will be capped at approximately $780-$840 per week.&nbsp; As of June 1, 2023, when the minimum wage will reach $15 per hour, CPFML benefits will top off at approximately $900 per week.</p> <p> <em>Funding of CPFML</em><br /> The CPFML program will be funded through employee payroll deductions. The CPFML Act imposes an obligation on employers to &ldquo;deduct and withhold&rdquo; the necessary amounts from employee wages, so at this time, it appears that employers do not contribute to the PFML program. The amount of deductions cannot exceed 0.5 percent of an employee&rsquo;s earnings that are subject to Social Security taxes.</p> <p> <em>Substitution of Employer-Provided Paid Leave</em><br /> Generally, when an employee is absent for a covered reason (as set forth above), an employer may require, or the employee may choose, to substitute certain forms of accrued paid time off (depending on the nature of the absence) for any part of the 12-week (or, in the case of military caregiver leave, 26-week) period.&nbsp; However, this right is not unlimited, as the amendment allows employees to retain at least two weeks of paid time off in their banks. We expect forthcoming regulations and administrative guidance will address and clarify these provisions.&nbsp; We will keep you posted on developments.</p> <p> <em>Intermittent Leave</em><br /> When an employee is absent for bonding, CPFML benefits are only available on an intermittent basis or on a reduced leave schedule if the employer agrees to such an arrangement.&nbsp; When an employee is absent for a serious health condition (self or family member) or for military caregiver leave, CPFML benefits are available on an intermittent basis only when it is medically necessary.&nbsp;</p> <p> In addition, if (a) an employee requires intermittent leave for a planned medical treatment<strong> and</strong> (b) the employee is absent for a serious health condition (self or family member), military caregiver leave, or organ or bone marrow donation, the employer can temporarily transfer the employee to an available alternative position for which the employee is qualified, as long as it offers equivalent pay and benefits and better accommodates the intermittent leave.</p> <p> <em>Private Plan Exemption</em><br /> The CPFML Act provides that employers will be able to satisfy their CPFML obligations through a private plan as long as the plan meets the following criteria:</p> <ul> <li> confers all of the same rights, protections and benefits provided by CPFML including at least the same number of weeks of benefits, at the same wage replacement, and coverage for the same reasons;</li> <li> imposes no additional conditions or restrictions on the use of the leave beyond those explicitly authorized under the CPFML Act;</li> <li> does not cost employees more than CPFML through the state;</li> <li> provides coverage for all employees throughout employment;</li> <li> provides for inclusion of future employees;</li> <li> does not adversely select members and does not threaten the state fund or endanger the solvency of the fund;</li> <li> was approved by a majority of employees (subject to other requirements of the bill); and</li> <li> meets any additional requirements established by the Authority.</li> </ul> <p> &nbsp;</p> <p> Employers seeking to use such a private plan must apply to the Authority for approval of the private plan.</p> <p> <em>Notice to Employees</em><br /> As of July 1, 2022, the CPFML will require employers to distribute written notice, at the time of hire, and each year thereafter, to employees concerning certain rights under the CPFML. As of now, the CPFML does not impose any specific corresponding posting obligation on employers.</p> <p> <em>Job Protection</em><br /> While the CPFML Act on its own likely does not provide job protection to employees who are absent for a covered reason and receive CPFML benefits, this is a gray area under the new law. We expect the Authority will clarify this point before employees begin receiving CPFML benefits in 2022.&nbsp;</p> <p> <strong>Employer Takeaways</strong></p> <p> In the coming months, Connecticut employers should consider whether to apply for the CPFML private plan exemption, and keep an eye on the various effective dates for collecting the employee contribution, when paid leave benefits begin, and when additional rights are afforded to employees.&nbsp; Seyfarth will continue to track developments concerning this and other paid leave laws.</p> <div> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> Paid family leave laws currently exist in <a href="https://www.seyfarth.com/publications/CP041116">California</a>, <a href="https://www.seyfarth.com/publications/OMM013019-LE">New York</a>, <a href="https://www.seyfarth.com/publications/MA022119-LE">New Jersey</a>, <a href="https://www.seyfarth.com/publications/MA061819-LE">Massachusetts</a>, Rhode Island, Washington, Washington, DC, and <a href="https://www.seyfarth.com/publications/CP040616">San Francisco (CA)</a>. Certain aspects of several of these laws are not yet in effect, although they are scheduled to go into effect in the coming months and years.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> This includes the paid family leave laws in California, New Jersey and Rhode Island.</p> </div> <div id="ftn3"> <p> <a href="#_ftnref3" name="_ftn3" title="">[3]</a> &quot;Base period&quot; means the first four of the five most recently completed quarters.</p> </div> <div id="ftn4"> <p> <a href="#_ftnref4" name="_ftn4" title="">[4]</a> Under the CFMLA and CPFML, a &ldquo;serious health condition&rdquo; is defined as an illness, injury, impairment, or physical or mental condition that involves (a) inpatient care in a hospital, hospice, nursing home or residential medical care facility; or (b) continuing treatment, including outpatient treatment, by a health care provider.</p> </div> <div id="ftn5"> <p> <a href="#_ftnref5" name="_ftn5" title="">[5]</a> Entitles the employee to a one-time benefit of 26 workweeks of leave during any 12-month period for each appropriate armed forces member per serious injury or illness incurred in the line of duty.</p> </div> <div id="ftn6"> <p> <a href="#_ftnref6" name="_ftn6" title="">[6]</a> Specifically, employees are entitled to use CPFML if they are victims of family violence and the absence is reasonably necessary (1) to seek medical care or psychological or other counseling for physical or psychological injury or disability for the victim, (2) to obtain services from a victim services organization on behalf of the victim, (3) to relocate due to such family violence, or (4) to participate in any civil or criminal proceeding related to or resulting from such family violence.</p> </div> <div id="ftn7"> <p> <a href="#_ftnref7" name="_ftn7" title="">[7]</a> The state is expected to release guidelines regarding factors to consider when determining whether an individual&rsquo;s close association with an employee is the equivalent of a family relationship.</p> </div> <div id="ftn8"> <p> <a href="#_ftnref8" name="_ftn8" title="">[8]</a> An employee cannot receive unemployment or workers&rsquo; compensation benefits at the same time as CPFML benefits.</p> </div> <div id="ftn9"> <p> <a href="#_ftnref9" name="_ftn9" title="">[9]</a> &ldquo;Base weekly earnings&rdquo; are defined as an amount equal to one-twenty-sixth, rounded to the next lower dollar, of the covered employee&rsquo;s total wages or self-employed income earned during the two quarters of the covered employee&rsquo;s Base Period (as defined above) in which the earnings were highest.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/MA062819-LE2 If Pain (or Anything Else), Yes Gain—Part 67: New York City Council Considers Mandatory Paid Personal Time https://www.seyfarth.com:443/publications/MA062819-LE2 Fri, 28 Jun 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Since the enactment of New York City&rsquo;s original Earned Sick Time Act (&ldquo;ESTA&rdquo;) in 2014, the City&rsquo;s employers have dealt with a seemingly steady stream of updates expanding the law&rsquo;s scope. In addition to the recent expansion requiring employers to provide safe time, the New York City Council is considering amending the current sick/safe time law yet again to add a mandatory paid personal time component.</em></p> <p> In its early years, ESTA allowed eligible employees to accrue up to 40 hours of paid sick time (&ldquo;PST&rdquo;) annually. &nbsp;In late 2017, the law was amended to allow employees to use their accrued PST for safe time reasons in instances where the employee or a covered family member was a victim of a family offense, sexual offense, stalking, or human trafficking, in addition to sick time reasons. The amended law, now called the <a href="https://www.seyfarth.com/publications/MA050718-LE">Earned Safe and Sick Time Act (&ldquo;ESSTA&rdquo;)</a>, went into effect in May 2018 and, among other things, also broadened the definition of a covered &ldquo;family member,&rdquo; which applies to both the sick and safe time components.<a href="#_ftn1" name="_ftnref1" title="">[1]</a></p> <p> In what would be a trailblazing step for municipalities in the country, the New York City Council is now considering another significant amendment to its paid safe and sick time law, namely by introducing a mandatory personal time element. The proposal, called Int. No. 800-A (&ldquo;the Bill&rdquo;), would impose even greater substantive burdens on employers, by among other things, allowing covered employees to accrue one hour of personal time for every 30 hours worked, up to 80 hours of personal time per calendar year. These 80 hours would be available for employees to use for any reason and, as the Bill currently stands, would be in addition to the 40 hours of sick/safe time provided to eligible employees. As amended, the law would be called the &ldquo;Earned Safe, Sick and Personal Time Law&rdquo; (&ldquo;ESSPTL&rdquo;).</p> <p> On May 28, 2019, the New York City Council held a hearing on Int. No. 800-A. Business advocates voiced concerns regarding the Bill&rsquo;s burdens on small businesses. Further, council members questioned whether the coverage threshold for employers, which as proposed provides that the <em>paid</em> personal time component would apply to any business with five or more employees (covered employers with fewer employees would be obligated to provide <em>unpaid</em> personal time), would unduly burden small businesses.</p> <p> New York City Mayor Bill de Blasio has expressed support for the Bill, but its future remains uncertain. If enacted, the Bill would take effect 120 days after becoming law.</p> <p> Here are some highlights of the proposed Bill:</p> <ul> <li> <strong>Employee Eligibility: </strong>As under ESSTA, the ESSPTL, broadly defines &ldquo;employee&rdquo; to include any person employed for hire by an employer in any employment within New York City for more than 80 hours in a calendar year.&nbsp;</li> <li> <strong>Covered Employer: </strong>As under ESSTA, the ESSPTL, broadly defines &ldquo;employer&rdquo; to include any person or entity employing any individual. Employer, however, does not include governmental agencies or certain other public entities.</li> <li> <strong>Start of Accrual and Usage Waiting Period: &nbsp;</strong>Under the ESSPTL, personal time would begin to accrue at the law&rsquo;s effective date (assuming it is enacted) or commencement of employment, whichever is later. Eligible employees would not be entitled to begin using personal time until the later of the 90th calendar day after (a) the law&rsquo;s effective date (assuming it is enacted) or (b) the employee&rsquo;s commencement of employment.</li> <li> <strong>Accrual Rate and Cap: </strong>Under the ESSPTL, eligible employees would accrue one hour of paid personal time for every 30 hours worked, up to 80 hours per calendar year. In addition, employees would continue to accrue one hour of paid safe/sick time for every 30 hours worked, up to 40 hours per calendar year.<a href="#_ftn2" name="_ftnref2" title="">[2]</a></li> <li> <strong>Usage and Carryover Caps: </strong>Eligible employees would be able to carry over up to 40 hours of earned, unused paid safe/sick time and up to 80 hours of earned, unused paid personal time to the following calendar year. An employer would not be required to permit employees to use more than 40 hours of paid safe/sick time or more than 80 hours of paid personal time per year.<a href="#_ftn3" name="_ftnref3" title="">[3]</a> <ul> <li> <strong>Carryover Exception: </strong>The Bill notes that to avoid year-end carryover an employer can (1) pay the employee for any unused time at the end of the calendar year in which the time is accrued and (2) provide the employee with an amount of paid time that meets the requirements of the ESSPTL (i.e., 80 hours of personal time and 40 hours of safe/sick time) on the first day of the subsequent calendar year.</li> </ul> </li> <li> <strong>Reasons for Use: </strong>Employees would be able to use accrued personal time for any reason, including the reasons authorized for use of safe/sick time. &nbsp;</li> <li> <strong>Use of PTO: </strong>Employers would be able to substitute and use other employer-provided paid leave (i.e., paid vacation, paid personal days, PTO, etc.) for compliance if the employer provides employees with the right amount of time off that can be used for the same purposes and under the same conditions as personal time under the Bill.</li> <li> <strong>Increments of Use: </strong>The Bill notes that employees would be able to determine how much accrued personal time they need to use, except that employers would be able to set a reasonable minimum increment for the use of personal time not to exceed four hours per day.</li> <li> <strong>Notice to Employer:</strong> <ul> <li> <strong>Foreseeable Absences: </strong>&nbsp;Under the ESSPTL, employers would be able to require reasonable advance notice of the intention to use personal time, not to exceed 14 days prior to the date the leave is expected to begin.</li> <li> <strong>Unforeseeable Absences: </strong>As with ESSTA, under the ESSPTL, an employer may require notice of unforeseeable uses of paid personal time as soon as practicable.</li> </ul> </li> <li> <strong>Documentation:</strong> Employers would still be able to require reasonable documentation for safe/sick leave for absences of more than 3 consecutive work days as permitted under ESSTA. However, the Bill expressly states that employers will not be able to require documentation for use of personal time.&nbsp;</li> <li> <strong>Notice and Posting: </strong>Employers would be required to provide notice to employees <u>and</u> display a poster of employees&rsquo; rights under the law. Specifically, employers would be required to provide each employee with a written copy of the notice at the time of the employee&rsquo;s hiring if hired after the effective date of the ESSPTL, or within 30 days of the law&rsquo;s effective date for current employees.</li> <li> <strong>Separation of Employment:</strong> The Bill notes that employers are not obligated to reimburse employees for earned, unused paid sick/safe or paid personal time upon separation of employment.<br /> &nbsp;</li> </ul> <p> New York City employers should be on the lookout for further developments involving the proposed ESSPTL. We will continue to monitor the Bill and provide updates on developments as they arise.</p> <p> With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this law and sick leave requirements generally.</p> <p> To stay up-to-date on Paid Sick Leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to <a href="mailto:sickleave@seyfarth.com">sickleave@seyfarth.com</a>.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> For more information on New York City paid sick and safe time, see our prior alerts <a href="https://www.seyfarth.com/publications/MA100118-LE2">here</a>, <a href="https://www.seyfarth.com/publications/MA050718-LE">here</a>, <a href="https://www.seyfarth.com/publications/OMM11917-LE">here</a>, <a href="https://www.seyfarth.com/publications/MA102017-LE">here</a>, <a href="http://www.seyfarth.com/publications/MA022316-LE">here</a>, <a href="http://www.seyfarth.com/publications/OMM011216-LE">here</a>, <a href="http://www.seyfarth.com/publications/OMM011215-LE">here </a>and <a href="http://www.seyfarth.com/publications/MA0303LE">here</a>.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> The Bill currently states the following on accrual: &ldquo;All employers shall provide a minimum of one hour of safe/sick time <strong><em>and</em></strong> one hour of personal time for every thirty hours worked by an employee, provided that employers shall not be required under this chapter to provide more than a total of forty hours of safe/sick time <strong><em>and</em></strong> a total of eighty hours of personal time for an employee in a calendar year.&rdquo; Proposed Int. No. 800-A, &sect; 20-913(5)(b) (emphasis added) (removing brackets and underlines that appear in the current Bill).</p> </div> <div id="ftn3"> <p> <a href="#_ftnref3" name="_ftn3" title="">[3]</a> The Bill currently states the following on carryover and usage caps: &ldquo;Up to forty hours of unused safe/sick time as provided pursuant to this chapter <strong><em>and</em></strong> up to eighty hours of unused personal time as provided pursuant to this chapter shall be carried over to the following calendar year; provided that no employer shall be required to (i) allow the use of more than forty hours of safe/sick time <strong><em>or</em></strong> more than eighty hours of personal time in a calendar year&hellip;&rdquo; Proposed Int. No. 800-A, &sect; 20-913(5)(h)&nbsp;(emphasis added) (removing brackets and underlines that appear in the current Bill).</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/WSE062819 High Times Continue – Illinois Enacts Recreational Cannabis Law https://www.seyfarth.com:443/publications/WSE062819 Fri, 28 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Illinois Governor J.B. Pritzker signed the new recreational cannabis bill, which contains extensive provisions regarding the extent of an employer&rsquo;s right to ban and otherwise discipline employees for cannabis use. The legislation takes effect on Jan. 1, 2020.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/cannabis/high-times-continue-illinois-enacts-recreational-cannabis-law/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE062719 Supreme Court Upholds “Auer” Doctrine of Deferring to Agency’s Interpretation of its Own Ambiguous Regulation, While Imposing Limitations of When Deference is Triggered https://www.seyfarth.com:443/publications/WSE062719 Thu, 27 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The U.S. Supreme Court upheld this week a key component of administrative law that tells judges to defer to an executive agency&rsquo;s interpretation of its own ambiguous regulation. Kisor v. Secretary of Veterans Affairs, No. 18-15 (US June 26, 2019). The case challenged so-called &ldquo;Auer&rdquo; or &ldquo;Seminole Rock&rdquo; deference. Auer deference has recently been criticized by conservative justices on the court.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/administrative-procedure-act/supreme-court-upholds-auer-doctrine-of-deferring-to-agencys-interpretation-of-its-own-ambiguous-regulation-while-imposing-limitations-of-when-deference-is-triggered/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/9231 Seyfarth Shaw Policy Matters Newsletter - June 27, 2019 https://www.seyfarth.com:443/publications/9231 Thu, 27 Jun 2019 00:00:00 -0400 <p style="margin-bottom:12.0pt;line-height:120%"> <strong><span style="font-family: Arial, sans-serif;">Labor Department Releases Long-Awaited Apprenticeship Proposal.</span></strong><span style="font-family: Arial, sans-serif;">&nbsp; Earlier this week, the Department published a notice of proposed rulemaking (</span><a href="https://www.federalregister.gov/documents/2019/06/25/2019-13076/apprenticeship-programs-labor-standards-for-registration-amendment-of-regulations"><span style="font-family:&quot;Arial&quot;,sans-serif">NPRM</span></a><span style="font-family: Arial, sans-serif;">) on industry-recognized apprenticeship programs (IRAPs).&nbsp; The NPRM reflects recommendations made in May 2018 by the Task Force on Apprenticeship Expansion, which itself was created by a June 2017 executive order. Under the proposal, trade, industry, and employer groups or associations, educational institutions, state and local government entities, non-profit organizations, unions, or a consortium or partnership of these entities, can become a Standards Recognition Entity (SRE).&nbsp; SREs will set standards for training, structure, and curricula for IRAPs in relevant industries or occupational areas.&nbsp; The SREs would be recognized through the U.S. Department of Labor to ensure that certain requirements are met.&nbsp; Specifically, the Department proposes to ensure that SREs have the capacity and quality-assurance processes and procedures needed to monitor IRAPs. and recognize that IRAPs are high quality (e.g., include paid work, work-based learning, mentorship, education and instruction, industry-recognized credentials, safety and supervision, and equal employment opportunity).&nbsp; Interested parties have </span><a href="https://www.regulations.gov/docket?D=DOL_FRDOC_0001"><span style="font-family:&quot;Arial&quot;,sans-serif">60 days to comment</span></a><span style="font-family: Arial, sans-serif;">.</span><br /> <br /> <strong><span style="font-family: Arial, sans-serif;">FLSA Gets Some Love on the Hill.</span></strong><span style="font-family: Arial, sans-serif;">&nbsp; Earlier this week, the FLSA celebrated its 81st birthday.&nbsp; Rather than throwing a blowout party, Congress appears to have celebrated this milestone event by suggesting ways for the FLSA to change.&nbsp; In the past week or so, bills have been introduced to &ldquo;clarify the definition of employee as it relates to direct sellers&rdquo; (</span><a href="https://www.congress.gov/bill/116th-congress/house-bill/3522?q=%7B%22search%22%3A%5B%22congressId%3A116%20AND%20billStatus%3A%5C%22Introduced%5C%22%22%5D%7D&amp;s=3&amp;r=1"><span style="font-family:&quot;Arial&quot;,sans-serif">H.R. 3522</span></a><span style="font-family: Arial, sans-serif;">); prohibit states and municipalities from adopting higher wage rates (</span><a href="https://www.congress.gov/bill/116th-congress/house-bill/3515?q=%7B%22search%22%3A%5B%22congressId%3A116%20AND%20billStatus%3A%5C%22Introduced%5C%22%22%5D%7D&amp;r=3&amp;s=3"><span style="font-family:&quot;Arial&quot;,sans-serif">H.R. 3515</span></a><span style="font-family: Arial, sans-serif;">); provide that over-the-road bus drivers are covered under the maximum hours requirements (</span><a href="https://www.congress.gov/bill/116th-congress/house-bill/3485?q=%7B%22search%22%3A%5B%22congressId%3A116%20AND%20billStatus%3A%5C%22Introduced%5C%22%22%5D%7D&amp;s=3&amp;r=12"><span style="font-family:&quot;Arial&quot;,sans-serif">H.R. 3485</span></a><span style="font-family: Arial, sans-serif;">); and provide that sex includes sexual orientation and gender identity (</span><a href="https://www.congress.gov/bill/116th-congress/house-bill/3468?q=%7B%22search%22%3A%5B%22congressId%3A116%20AND%20billStatus%3A%5C%22Introduced%5C%22%22%5D%7D&amp;s=3&amp;r=15"><span style="font-family:&quot;Arial&quot;,sans-serif">H.R. 3468</span></a><span style="font-family: Arial, sans-serif;">).</span><br /> <br /> <strong><span style="font-family: Arial, sans-serif;">Federal Law Preempts New York&rsquo;s Arbitration Limitations.</span></strong><span style="font-family: Arial, sans-serif;">&nbsp; In 2018, New York passed significant reforms to its sexual harassment laws.&nbsp; Key among the changes was a prohibition on employers&rsquo; use of agreements requiring pre-dispute arbitration of sexual harassment claims (and rendering existing language null and void).&nbsp; A recent decision out of the Southern District of New York held that such a prohibition is preempted by the Federal Arbitration Act.&nbsp; For more, see Seyfarth&rsquo;s </span><a href="https://www.seyfarth.com/publications/OMM062719-LE"><span style="font-family:&quot;Arial&quot;,sans-serif">One Minute Memo</span></a><span style="font-family: Arial, sans-serif;">.</span><br /> <br /> <strong><span style="font-family: Arial, sans-serif;">New York Anti-Discrimination and Anti-Harassment Update</span></strong><span style="font-family: Arial, sans-serif;">.&nbsp; As we noted in last week&rsquo;s issue, the New York State Legislature passed yet another a sweeping amendment to the state&rsquo;s anti-discrimination and anti-harassment laws.&nbsp; For a comprehensive analysis, see Seyfarth&rsquo;s </span><a href="https://www.seyfarth.com/publications/MA062419-LE"><span style="font-family:&quot;Arial&quot;,sans-serif">Management Alert</span></a><span style="font-family: Arial, sans-serif;">.</span><br /> <br /> <span style="font-family: Arial, sans-serif;">Policy Matters will be off next week as we celebrate our Nation&#39;s independence.&nbsp; Have a happy and safe Fourth of July!</span></p> https://www.seyfarth.com:443/publications/OMM062719-LE Court Holds That NY’s Prohibition of Arbitration Agreements Is Preempted by Federal Law https://www.seyfarth.com:443/publications/OMM062719-LE Thu, 27 Jun 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em> A new decision in the Southern District of New York held that the N.Y. prohibition of mandatory, pre-dispute arbitration of sexual harassment claims is preempted by the Federal Arbitration Act.</em></p> <p> In April 2018, as part of a sweeping set of reforms to sexual harassment law, New York State enacted a provision to its civil procedure code stating that employers are prohibited from including, in any contracts with employees, provisions that require arbitration for allegations or claims of sexual harassment.&nbsp; The law also declared such clauses in existing contracts null and void.</p> <p> As we <a href="https://www.seyfarth.com/publications/MA102518-LE">observed previously</a>, the New York prohibition appeared to be at risk of preemption by the Federal Arbitration Act, which declares that arbitration agreements are generally enforceable and supersedes any state laws to the contrary.&nbsp; In fact, the New York Legislature recognized the potential for preemption by stating that the prohibition of arbitration clauses applied &ldquo;except where inconsistent with federal law.&rdquo;</p> <p> Now, in the <a href="https://www.seyfarth.com/dir_docs/publications/LatifvMorgan_Stanley.pdf">first reported decision</a>&nbsp;addressing the preemption issue under the New York law, Judge Denise Cote of the Southern District of New York held that the statute is indeed preempted.</p> <p> <strong>The Decision</strong></p> <p> The case before Judge Cote was a relatively straightforward claim by a former employee against his former employer and seven individual defendants, involving claims of discrimination, hostile work environment, and retaliation in violation of Title VII, the New York State Human Rights Law, and the New York City Human Rights Law.&nbsp; The plaintiff claimed, among other things, that he was the target of inappropriate comments regarding his sexual orientation, inappropriate touching, and sexual advances.&nbsp; He also claimed that a female supervisor sexually assaulted him.</p> <p> In response to the lawsuit, the defendants filed a motion to compel arbitration, arguing that an arbitration agreement between the plaintiff and the employer required that the claims be arbitrated.&nbsp; The plaintiff countered that, in light of the new State statute, codified as section 7515 of the Civil Practice Law and Rules, his arbitration agreement was void and unenforceable to the extent that it required him to arbitrate his sexual harassment claims.&nbsp;</p> <p> In granting the employer&rsquo;s motion, Judge Cote relied heavily on recent Supreme Court precedent.&nbsp; Quoting from <em>AT&amp;T Mobility LLC v. Concepcion</em>, she stated that &ldquo;the FAA reflects both a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.&rdquo;&nbsp; Quoting next from the Court&rsquo;s most recent arbitration decision, <em>Lamps Plus, Inc. v. Varela</em>, she observed that &ldquo;state law is preempted to the extent it stands as an obstacle to the accomplishment and execution of the full purposes and objective of the FAA.&rdquo;&nbsp; She then concluded:&nbsp; &ldquo;when state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward:&nbsp; The conflicting rule is displaced by the FAA.&rdquo;</p> <p> Applying those principles, Judge Cote held that &ldquo;application of Section 7515 to invalidate the parties&rsquo; agreement to arbitrate . . . would be inconsistent with the FAA,&rdquo; and that &ldquo;[t]he FAA sets forth a strong presumption that arbitration agreements are enforceable and this presumption is not displaced by &sect; 7515.&rdquo;</p> <p> In so holding, the court rejected the plaintiff&rsquo;s argument that &sect; 7515 reflects a general intent to protect victims of sexual harassment and not a specific intent to single out arbitration for special treatment.&nbsp; She also rejected the argument that the FAA&rsquo;s savings clause, which recognizes defenses &ldquo;for the revocation of <em>any</em> contract,&rdquo; compels a different result, because &ldquo;Section 7515 presents no generally applicable contract defense . . . and cannot overcome the FAA&rsquo;s command that the parties Arbitration Agreement be enforced.&rdquo;</p> <p> <strong>Effect on Recent Amendments to &sect; 7515 </strong></p> <p> <a href="https://www.seyfarth.com/publications/MA062419-LE">Just last week</a>, the New York Legislature amended &sect; 7515 to prohibit mandatory arbitration not only for sexual harassment claims, but all discrimination claims.&nbsp; Governor Cuomo has not yet signed that amendment into law, but he is expected to do so soon.&nbsp; In a footnote of the decision, Judge Cote observed that, &ldquo;[f]or the same reasons described above, &sect; 7515 as so amended would not provide a defense to the enforcement of the Arbitration Agreement.&rdquo;</p> <p> Thus, even as newly amended, &sect; 7515 is likely preempted by the FAA.&nbsp; Absent some refinements to the statute to avoid the preemption issue, or an intervening<a href="https://www.congress.gov/bill/116th-congress/house-bill/1443?q=%7B%22search%22%3A%5B%22H.R.+334%22%5D%7D"> change in federal law</a>, New York employers with existing arbitration agreements that pertain to employment discrimination claims, or those that are considering rolling out an arbitration program for such claims, can rest assured that the existence of &sect; 7515 will not likely pose a barrier to the full enforcement of their agreements.</p> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/EL062719 The Stoned Age: What the CBD Craze Means for Employers and Their Substance Abuse Policies https://www.seyfarth.com:443/publications/EL062719 Thu, 27 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The federal Drug Enforcement Agency (DEA) recently announced that drugs that include CBD (cannabidiol) with less than 0.1% of THC (tetrahydrocannabinols) are now considered Schedule V drugs provided they are approved by the federal Food and Drug Administration (FDA). The move marked the first time the DEA removed any form of cannabis from Schedule I and was due to the FDA&rsquo;s approval of Epidiolex, a non-synthetic cannabis-derived medicine used to treat severe epilepsy. Yet, setting aside this very limited exception, marijuana and CBD remain illegal under federal law. And while CBD is projected to be a $22 billion industry by 2022, many employers remain hazy about this extremely popular product and the implications it has on their employees and businesses.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/the-stoned-age-what-the-cbd-craze-means-for-employers-and-their-substance-abuse-policies/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CDL062719 Upcoming Webinar Series! California Consumer Privacy Act: Is your organization ready? https://www.seyfarth.com:443/publications/CDL062719 Thu, 27 Jun 2019 00:00:00 -0400 <p> In just a few short months, on January 1, 2020, the California Consumer Privacy Act (CCPA) is set to go into effect, establishing new consumer privacy rights for California residents and imposing significant new duties and obligations on commercial businesses conducting business in the state of California. Consumer rights include the right to know what personal information a business is collecting, selling, and disclosing about them; the right to deletion; the right to opt-out of the sale of personal information; and the right not to be discriminated against (written as a business duty). These rights are intended to provide consumers with a level of control of their personal information and to establish transparency on the part of the businesses to comply with consumers&rsquo; exercise of their privacy rights. In addition, businesses are required to provide employee training; website notice of consumer rights and categories of personal information collected, sold, and disclosed; and to implement and maintain adequate security measures. The penalties of non-compliance can be severe, with avenues for both regulatory enforcement and private cause of action. Learn what the attorney general&rsquo;s forthcoming regulations likely have in store for businesses and what your organization should be doing now to proactively prepare for the CCPA to ensure compliance.<br /> <br /> <a href="https://www.carpedatumlaw.com/2019/06/upcoming-webinar-series-california-consumer-privacy-act-is-your-organization-ready/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/mlw062719 Lynn Kappelman, Renate Walker and Hillary Massey authored an article in Massachusetts Lawyers Weekly https://www.seyfarth.com:443/publications/mlw062719 Thu, 27 Jun 2019 00:00:00 -0400 <p> Lynn Kappelman, Renate Walker and Hillary Massey authored a June 27 article in Massachusetts Lawyers Weekly, &quot;Expanding the definition of &lsquo;protected class&rsquo;.&quot;</p> https://www.seyfarth.com:443/publications/TBT062719 The Week in Weed: June 28, 2019 https://www.seyfarth.com:443/publications/TBT062719 Thu, 27 Jun 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/the-week-in-weed-june-28-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA062619-HealthLaw Veterans Community Care Program Final Rule https://www.seyfarth.com:443/publications/CA062619-HealthLaw Wed, 26 Jun 2019 00:00:00 -0400 <div> On June 6, 2019, the US Department of Veterans Affairs (&ldquo;VA&rdquo;) issued final rules regarding the implementation of the Veterans Community Care Program. These rules respond to the VA&rsquo;s broader mandate under the 2018 Maintaining Internal Systems and Strengthening Integrated Outside Networks Act (MISSION Act), whose objective is to consolidate VA programs, improve medical provider recruitment and retention, and advance VA technological infrastructure. The new Veterans Community Care Program, which will, over a two-year period, replace the Veterans Choice Program, seeks to increase veteran access to private healthcare providers in an effort to reduce wait times and expand the availability of specialty services.</div> <div> &nbsp;</div> <div> The rules more specifically set out how the VA will determine which veterans qualify for care by a private provider and which private providers qualify to receive veterans as part of the new Community Care Network (&ldquo;CCN&rdquo;). Veterans may choose to seek care from private providers in the CCN if they reside at least 30 minutes&rsquo; drive time from a VA provider of primary or mental healthcare services, or 60 minutes in the case of a specialist. Veterans may also choose a private provider if the wait time for a VA primary or mental care provider exceeds 20 days, or 28 days for specialists. Quality of service constitutes an additional factor in the decision-making process.</div> <div> &nbsp;</div> <div> Private provider CCN eligibility requires a contract with the VA through one of its third-party administrators. The contracting provider must offer qualifying services that veterans may access within reasonable travel and wait times. The VA begins implementing the program this summer on a regional basis, with the full transition occurring through 2020. The VA intends to announce standards at a later date for comparing the quality of private provider services with quality based on local, rather than national, standards. The final rule may be accessed at Office of the Federal Register: <a href="http://www.federalregister.gov/documents/2019/06/05/2019-11575/veterans-community-care-program" target="_blank">www.federalregister.gov/documents/2019/06/05/2019-11575/veterans-community-care-program</a>.&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/news/conleylaw360062619 Ben Conley quoted in Law360 https://www.seyfarth.com:443/news/conleylaw360062619 Wed, 26 Jun 2019 00:00:00 -0400 <p> Ben Conley was quoted in a June 26 story from Law360, &quot;4 Benefits Policy Developments To Watch In 2nd Half Of 2019,&quot; on how lawmakers are eyeing the revival of the AHP rule. Conley said that it strikes me as unlikely that Congress (including the House of Representatives) will get behind any legislative effort to enshrine the AHP rules.</p> https://www.seyfarth.com:443/publications/ERISA062519 The Supreme Court Will Take Another Look At Its ERISA Stock-Drop Pleading Standard https://www.seyfarth.com:443/publications/ERISA062519 Tue, 25 Jun 2019 00:00:00 -0400 <p> Synopsis: ERISA stock-drop litigation has diminished in recent years due to the Supreme Court&rsquo;s Dudenhoeffer decision (and a rising stock market). Now, the Court will have another chance to weigh in on whether federal ERISA litigation in this space should breathe new signs of life.<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/06/25/the-supreme-court-will-take-another-look-at-its-erisa-stock-drop-pleading-standard/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL062519 Google: Demonstrating The Hazards Of Employment Discrimination From Every Angle https://www.seyfarth.com:443/publications/EL062519 Tue, 25 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Google&rsquo;s recent travails with simultaneous traditional and &ldquo;reverse&rdquo; discrimination claims signal a new era of dynamic employment discrimination risk. Employers will be wise to consider the push and pull legal effect of diversity and inclusion programs, pay equity reviews, and other well-intended efforts.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/google-demonstrating-the-hazards-of-employment-discrimination-from-every-angle/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA062419-LE New York State Legislature Passes Major Amendments To Anti-Discrimination and Anti-Harassment Laws https://www.seyfarth.com:443/publications/MA062419-LE Mon, 24 Jun 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis:</strong>&nbsp; The New York State Legislature has passed, and Governor Andrew M. Cuomo is expected to sign, a bill amending the state&rsquo;s anti-discrimination and anti-harassment laws. The legislation significantly expands the protections to employees by, among other things, removing the long-standing &ldquo;severe or pervasive&rdquo; standard for workplace harassment claims, eliminating the Faragher/Ellerth affirmative defense to harassment claims, providing punitive damages and attorneys&rsquo; fees as potential forms of recovery under the law, prohibiting NDAs in settlement agreements with respect to the facts and circumstances underlying claims of any form of discrimination or harassment, and prohibiting mandatory pre-dispute arbitration agreements for any form of discrimination or harassment.&nbsp;</em></div> <div> &nbsp;</div> <div> On June 19, 2019, the New York State Legislature passed <a href="https://nyassembly.gov/leg/?default_fld=&amp;leg_video=&amp;bn=A08421&amp;term=2019&amp;Summary=Y&amp;Text=Y">S6577/A8421</a>, which Governor Cuomo is expected to sign soon.&nbsp; The proposed legislation builds on New York State&rsquo;s sweeping revisions to the sexual harassment laws that were passed in 2018, discussed <a href="https://www.seyfarth.com/publications/MA040518-LE">here</a> and <a href="https://www.seyfarth.com/publications/MA051418-LE">here</a>.&nbsp; The provisions in the bill impacting private employers are summarized below.&nbsp; Employers should pay particular attention to the effective dates for each provision of the law, which differ.&nbsp;</div> <div> &nbsp;</div> <div> <strong>New York State&rsquo;s Human Rights Law Will Now Apply to All Employers</strong></div> <div> &nbsp;</div> <div> As written, the new legislation expands the definition of &ldquo;employer&rdquo; to encompass all private employers, regardless of size.&nbsp; Previously, only employers with four or more employees were covered by the law (except as to sexual harassment, where the employee threshold had been lowered to one employee in 2015).&nbsp;</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 180 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Eliminates The Severe or Pervasive Standard for Harassment</strong></div> <div> &nbsp;</div> <div> The law eliminates the &ldquo;severe or pervasive&rdquo; standard that has been the legal standard applicable to hostile work environment claims under both the federal and New York State anti-harassment laws.&nbsp; Now, harassment based on any protected characteristic (and retaliatory harassment) is unlawful so long as such conduct &ldquo;subjects an individual to inferior terms, conditions or privileges of employment because of the individual&rsquo;s membership in one or more&rdquo; protected characteristics, &ldquo;<em>regardless of whether such harassment would be considered severe or pervasive</em>.&rdquo;&nbsp; Tracking the text of the New York City Human Rights Law, the proposed law provides that it is an affirmative defense to liability &ldquo;that the harassing conduct does not rise above the level of what a reasonable victim of discrimination with the same protected characteristic would consider petty slights or trivial inconveniences.&rdquo;&nbsp; The adoption of the City law&rsquo;s language strongly suggests the Legislature&rsquo;s intention to align the standard for harassment cases brought under the New York State Human Rights Law with the much lower legal standard applicable under the New York City Human Rights Law.</div> <div> &nbsp;</div> <div> This section of the bill also provides that &ldquo;[n]othing in this section shall imply that an employee must demonstrate the existence of an individual to whom the employee&rsquo;s treatment must be compared.&rdquo;</div> <div> &nbsp;&nbsp;</div> <div> The bill also extends the foregoing protections to domestic workers.</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Does Away With the <em>Faragher/Ellerth</em> Defense</strong></div> <div> &nbsp;</div> <div> The proposed legislation also eliminates a common affirmative defense upon which employers have relied in cases involving claims of supervisor harassment, known as the <em>Faragher/Ellerth</em> defense.&nbsp; This defense applies under federal law (and previously applied under New York State law) in circumstances of supervisor harassment, when the employee did not file a complaint and the alleged harassment did not result in tangible employment action (such as termination).&nbsp; If applicable, <em>Faragher/Ellerth</em> prevents plaintiffs from imputing liability to an employer for the claimed harassment. The New York State Human Rights Law now provides that &ldquo;[t]he fact that the individual did not make a complaint about the harassment to the employer shall not be determinative of whether the employer shall be liable.&rdquo;&nbsp;</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Extension of Protections to Non-Employees</strong></div> <div> &nbsp;</div> <div> The proposed law amends Section 296-d of the Executive Law, which was passed in 2018, and extended the protections of the State Human Rights Law to certain &ldquo;non-employees&rdquo; (including contractors, vendors, or consultants), but only for sexual harassment claims.&nbsp; As amended, it expands protections to &ldquo;non-employees&rdquo; for all forms of discrimination, irrespective of the protected characteristic.&nbsp; Thus, employers may now be liable to non-employees &ldquo;when the employer, its agents, or supervisors knew or should have known that such non-employee was subjected to an unlawful discriminatory practice in the employer&rsquo;s workplace, and the employer failed to take immediate and appropriate corrective action.&rdquo;&nbsp; The extent of the employer&rsquo;s control and other legal responsibility over alleged wrongdoer remain factors courts may consider in determining liability.</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Punitive Damages Are Now An Available Remedy</strong></div> <div> &nbsp;</div> <div> The proposed law will allow punitive damages to be available as a remedy in all &ldquo;cases of employment discrimination related to private employers&rdquo;&nbsp; brought under the New York State Human Rights Law.&nbsp;</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Attorneys&rsquo; Fees Are Mandatory&nbsp;</strong></div> <div> &nbsp;</div> <div> The proposed legislation provides that any prevailing party &ldquo;shall&rdquo; be awarded attorneys&rsquo; fees, whether the claim is before a court or the State Division of Human Rights.&nbsp; Moreover, if the employer is the party seeking such fees, it is required to show, by motion, that the action brought by the plaintiff was frivolous &mdash; meaning that the action was filed or pursued in bad faith.&nbsp;</div> <div> &nbsp;</div> <div> <em>Effective date</em>:&nbsp;60 days after enactment</div> <div> &nbsp;</div> <div> <strong>The New York State Human Rights Law Is To Be Liberally Construed</strong></div> <div> &nbsp;</div> <div> The law requires that the State Human Rights Law be construed &ldquo;liberally,&rdquo; even when such construction would diverge from that of &ldquo;federal civil rights laws, including those laws with provisions worded comparably,&rdquo; and that exceptions to the law should be construed narrowly &ldquo;in order to maximize deterrence of discriminatory conduct.&rdquo;&nbsp;</div> <div> &nbsp;</div> <div> <em>Effective date</em>: immediately upon enactment.</div> <div> &nbsp;</div> <div> <strong>Prohibition of Nondisclosure Agreements in Settlement Agreements for All Discrimination Cases</strong></div> <div> &nbsp;</div> <div> Last year, New York amended the General Obligations Law and the Civil Practice Laws and Rules to prohibit employers from including NDAs in settlement agreements resolving claims of sexual harassment (unless confidentiality was the claimant&rsquo;s preference).&nbsp; The new legislation extends that prohibition to all claims of discrimination.&nbsp; As with last year&rsquo;s amendments, the current bill prohibits only NDAs that &ldquo;would prevent the disclosure of <em><strong>the underlying facts and circumstances </strong></em>to the claim or action,&rdquo; and does not affect an employer&rsquo;s right to include an NDA that prohibits disclosure of the fact of the agreement or the settlement amount.&nbsp; Additionally, and similarly consistent with the 2018 version, the law includes an exception if confidentiality is the complainant&rsquo;s preference.&nbsp; In that circumstance, the parties may agree to include an NDA that prohibits disclosure of the underlying facts and circumstances of the claim.&nbsp; However, the NDA must be written in &ldquo;plain English, and, if applicable, [in] the primary language of the complainant.&rdquo;&nbsp; The complainant must also be provided a non-waivable 21-day period to consider the language of the NDA and a 7-day revocation period.&nbsp;</div> <div> &nbsp;</div> <div> Even where the parties agree to include an NDA that prohibits disclosure of the underlying facts and circumstances of the claim, the provision will be deemed void to the extent that it &ldquo;prohibits or otherwise restricts the complainant from: (i) initiating, testifying, assisting, complying with a subpoena, or participating in any manner with an investigation conducted by the appropriate local, state, or federal agency; or (i) filing or disclosing any facts necessary to receive unemployment insurance, Medicaid, or other public benefits to which the complainant is entitled.</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>NDAs Regarding Future Claims of Discrimination Void</strong></div> <div> &nbsp;</div> <div> The bill provides that any provision in any contract or agreement between an employee and employer &ldquo;that prevents the disclosure of factual information related to any future claim of discrimination is void and unenforceable.&rdquo;&nbsp; Again, however, there is an exception: such a provision may be included in an agreement, so long as the provision &ldquo;notifies the employee or potential employee that it does not prohibit him or her from speaking with law enforcement, the equal employment opportunity commission, the state division of human rights, a local commission on human rights, or an attorney retained by the employee or potential employee.&rdquo;</div> <div> &nbsp;&nbsp;</div> <div> <em>Effective date</em>: Applies to contracts entered into on and after January 1, 2020.</div> <div> &nbsp;</div> <div> <strong>Prohibition of Mandatory, Pre-Dispute Arbitration Agreements</strong></div> <div> &nbsp;</div> <div> In 2018, New York amended the General Obligations Law to prohibit mandatory arbitration of sexual harassment claims.&nbsp; This prohibition has now been extended to prohibit mandatory pre-dispute arbitration of any claim of discrimination, not just sexual harassment.&nbsp; As discussed in a <a href="https://www.seyfarth.com/publications/MA102518-LE">prior alert</a>, this provision is likely preempted by the Federal Arbitration Act.</div> <div> &nbsp;</div> <div> <em>Effective date</em>: 60 days after enactment.</div> <div> &nbsp;</div> <div> <strong>Distribution of a Written Notice</strong></div> <div> &nbsp;</div> <div> Last year, New York State required that all employers: (i) provide all employees with a sexual harassment prevention policy and (ii) provide employees with annual, interactive sexual harassment prevention training.&nbsp; New York also prescribed certain minimum substantive requirements for the policy and the training.&nbsp; The new bill will require employers to provide employees with a written notice, both &ldquo;at the time of hiring and during every annual sexual harassment prevention training,&rdquo; that contains the &ldquo;employer&rsquo;s sexual harassment prevention policy and the information presented at such employer&rsquo;s sexual harassment prevention training program.&rdquo;&nbsp; The notice must be provided in English and in the language identified by any employee as their primary language (provided the State&rsquo;s model exists in that language).</div> <div> &nbsp;</div> <div> <em>Effective date</em>:&nbsp; immediately upon enactment.</div> <div> &nbsp;</div> <div> <strong>Extended Statute of Limitations for Sexual Harassment Claims</strong></div> <div> &nbsp;</div> <div> The new legislation extends the statute of limitations to three years for employees to file a claim of sexual harassment under state law with the State Division of Human Rights.&nbsp; The legislation does not affect the statute of limitations for employees to file state law sexual harassment claims in court, which also is three years.&nbsp; Claims for all other forms of discrimination and harassment are still subject to a one-year statute of limitations when filed with the State Division of Human Rights.</div> <div> &nbsp;</div> <div> <em>Effective date</em>:&nbsp; one year after enactment.</div> <div> &nbsp;</div> <div> <strong>Next Steps:</strong>&nbsp; The new legislation makes major amendments to New York&rsquo;s discrimination and harassment laws and employers should be aware of these changes.&nbsp; In terms of initial steps employers should consider the following:</div> <div> &nbsp;</div> <ul> <li> Employers should consider reviewing their discrimination, harassment and retaliation policies to ensure they are in compliance, and further consider expanding protections to non-employees beyond just sexual harassment.</li> <li> Prepare the required &ldquo;notice&rdquo; containing the employer&rsquo;s sexual harassment prevention policy and the information presented at the sexual harassment prevention training program, which will be particularly important with the upcoming training deadline of October 9, 2019, and ensure this &ldquo;notice&rdquo; is provided to all employees at the time of hiring.</li> <li> Be aware of the changes to NDAs in settlement agreements and ensure compliance for any discrimination and harassment claims regardless of protected characteristic settled after 60 days of the enactment of the law.&nbsp; Similarly, as of January 1, 2020, employers should ensure any employment contracts with NDA&rsquo;s that apply to future claims of discrimination include the required carve out language.</li> <li> Assess any mandatory pre-dispute arbitration agreements and strategy as to enforcing such agreements in light of likely pre-emption under federal law.</li> <li> Carefully assess litigation strategies in light of the lower burdens of proof and new forms of damages available for claims brought under the New York State Human Rights Law.&nbsp;&nbsp;</li> </ul> <div> <br /> As always, Seyfarth Shaw LLP and its attorneys are available to assist employers with ensuring compliance with this new legislation.</div> https://www.seyfarth.com:443/publications/WC062419 Google: Demonstrating The Hazards Of Employment Discrimination From Every Angle https://www.seyfarth.com:443/publications/WC062419 Mon, 24 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Google&rsquo;s recent travails with simultaneous traditional and &ldquo;reverse&rdquo; discrimination claims signal a new era of dynamic employment discrimination risk. Employers will be wise to consider the push and pull legal effect of diversity and inclusion programs, pay equity reviews, and other well-intended efforts.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/google-demonstrating-the-hazards-of-employment-discrimination-from-every-angle/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD062419 In Moran, Dissent Sets Up Arguments for Other Circuits to Find Dismissals Are Adverse Events https://www.seyfarth.com:443/publications/CCD062419 Mon, 24 Jun 2019 00:00:00 -0400 <p> The Fair Credit Reporting Act (&ldquo;FCRA&rdquo;) bars consumer reporting agencies from reporting civil suits, civil judgments, records of arrest, and other &ldquo;adverse items&rdquo; more than seven years after they occur. In a recent decision in Moran v. The Screening Pros, the Ninth Circuit held that the later dismissal of criminal indictments or charges was not a new adverse event and did not restart the seven-year clock for reporting. Judge Kleinfeld, dissenting, argued that dismissals often are evidence of an &ldquo;adverse event,&rdquo; such as a guilty plea followed by deferred sentencing, and should be considered a separate event that restarts the clock. Because Moran opens the door to additional lawsuits based on the reporting of dismissals, other circuits are likely to consider the same question. Judge Kleinfeld&rsquo;s dissent is a potential roadmap for both defendant consumer reporting agencies litigating in other jurisdictions and other courts considering the issue anew.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/06/in-moran-dissent-sets-up-arguments-for-other-circuits-to-find-dismissals-are-adverse-events/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS062419 Oregon Adds Employee-Friendly Requirement to Existing Non-Compete Law… But Also Produces Company-Friendly Trade Secrets Law in Recent Court of Appeals Case https://www.seyfarth.com:443/publications/TS062419 Mon, 24 Jun 2019 00:00:00 -0400 <p> On May 14, 2019, Oregon Governor Kate Brown signed into law HB 2992, which, as of January 1, 2020, requires an employer to provide a terminated employee with a signed, written copy of his or her non-competition agreement within 30 days of his or her termination date. Failure to do so will render the agreement voidable and unenforceable in the state of Oregon.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/06/articles/noncompete-enforceability/oregon-adds-employee-friendly-requirement-to-existing-non-compete-law-but-also-produces-company-friendly-trade-secrets-law-in-recent-court-of-appeals-case/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/IMM062419 Too Natural for Naturalization: Even Decriminalized Marijuana Can be a Bar to US Citizenship https://www.seyfarth.com:443/publications/IMM062419 Mon, 24 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: As a number of states and the District of Columbia have moved to permit possession, use and sale of marijuana for both medicinal and recreational purposes and the business of legalized cannabis distribution has grown exponentially, federal law banning such activity remains unchanged. Deeming the trend in state law irrelevant, federal immigration authorities have in fact moved in the opposite direction. Last month, on April 19, US Citizenship and Immigration Services announced policy guidance &ldquo;to clarify that violations of federal controlled substance law, including violations involving marijuana, are generally a bar to establishing good moral character for naturalization, even where that conduct would not be an offense under state law.&rdquo;<br /> <br /> <a href="https://www.bigimmigrationlawblog.com/2019/06/too-natural-for-naturalization-even-decriminalized-marijuana-can-be-a-bar-to-us-citizenship/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP062419 “California Dreamin”—Peculiar Laws To Consider When Crossing State Lines https://www.seyfarth.com:443/publications/CP062419 Mon, 24 Jun 2019 00:00:00 -0400 <p> Seyfarth Summary: Like the singers in &ldquo;California Dreamin,&rdquo; many out-of-state employers&mdash;on a winter&rsquo;s day and otherwise&mdash;might dream of operating in California. California is an attractive market for out-of-state companies. But employers who hire employees in California or send employees to work there face a unique set of challenges. Below are some key areas of employment law these companies should consider if they want to be &ldquo;safe and warm in L.A.&rdquo;<br /> <br /> <a href="https://www.calpeculiarities.com/2019/06/24/california-dreamin-peculiar-laws-to-consider-when-crossing-state-lines/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/vupi062219 Minh Vu quoted in the Philadelphia Inquirer https://www.seyfarth.com:443/news/vupi062219 Sat, 22 Jun 2019 00:00:00 -0400 <p> Minh Vu was quoted in a June 22 story from the Philadelphia Inquirer, &quot;A &lsquo;blitz of lawsuits&rsquo; against Philly restaurants: Was it a &lsquo;money grab&rsquo; or helping blind consumers?&quot; Vu said that this whole tsunami of lawsuits is largely the fault of the Justice Department in failing to come up with clear guidance and rules on what businesses need to be doing. You can read the <a href="https://www.inquirer.com/news/philly-restaurants-ada-website-accessibility-lawsuits-20190622.html">full article here</a>.</p> https://www.seyfarth.com:443/news/adapcs062219 Seyfarth's ADA statistics referenced in the Port Charlotte Sun https://www.seyfarth.com:443/news/adapcs062219 Sat, 22 Jun 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a June 22 story from the Port Charlotte Sun, &quot;Charlotte County to pay $10,500 over ADA lawsuit; make website more accessible.&quot; These website accessibility lawsuits nearly tripled last year across the country. According to Seyfarth, there were 814 website accessibility cases in 2017. That ballooned 177 percent last year, to 2,258. You can read the <a href="https://www.yoursun.com/charlotte/county-to-pay-over-ada-lawsuit-make-its-website-more/article_dba5a7ee-93b4-11e9-865b-a32c1491f053.html">full article here</a>.</p> https://www.seyfarth.com:443/publications/WC062119 What Employers Can Expect With The EEOC https://www.seyfarth.com:443/publications/WC062119 Fri, 21 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: As we approach the latter portion of the fiscal year, employers are beginning to see a significant spike in EEOC case filings over the last month or so, bringing the EEOC more in line with its relative aggressiveness during the previous couple of fiscal years. This increase in case filings comes on the heels of the May 8th Senate confirmation of the new EEOC Chair, Janet Dhillon. In today&rsquo;s video, Partner Jerry Maatman gives an update on the EEOC&rsquo;s recent activity, as well as what employers can expect from the Agency going forward through the end of the Fiscal Year in September.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/what-employers-can-expect-with-the-eeoc/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL062119 Paid Sick Leave in Texas Survives the Texas Legislature https://www.seyfarth.com:443/publications/EL062119 Fri, 21 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Employers in Austin, Dallas, and San Antonio expected the Texas Legislature to overturn their cities&rsquo; recent foray into city-specific paid sick leave laws. However, the Texas Legislature recently wrapped-up its legislative session without passing a law curtailing city-specific paid sick leave laws&mdash;and the Legislature will not meet again until 2021. In the meantime, Dallas&rsquo; and San Antonio&rsquo;s paid sick leave laws are scheduled to go into effect on August 1, 2019. (Austin&rsquo;s ordinance is stayed pending an appeal to the Texas Supreme Court.) As a result, unless the Texas Supreme Court rules that the laws are unconstitutional, employers in Dallas and San Antonio should begin preparing to comply with the paid sick leave requirements.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/paid-sick-leave-in-texas-survives-the-texas-legislature/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/RS062119-LE Regulatory Spring: Rulemaking by the Wage & Hour Division - June 21, 2019 https://www.seyfarth.com:443/publications/RS062119-LE Fri, 21 Jun 2019 00:00:00 -0400 <p> Last week, the comment period ended for the Department of Labor&rsquo;s Notice of Proposed Rulemaking seeking to revise and update the regulations interpreting the Fair Labor Standards Act&rsquo;s (&ldquo;FLSA&rdquo;) regular rate of pay requirements.&nbsp; Our Firm submitted comments, which&nbsp;can be found <a href="http://marketing.seyfarth.com/rs/emsdocuments/Comments%20to%20NPRM%20Regular%20Rate.pdf">here</a>.&nbsp; In those comments, we:</p> <ul> <li> Supported the Department&rsquo;s proposal to treat vacation, sick, and other forms of paid time off similarly for the purposes of determining whether &ldquo;cashed out&rdquo; leave must be included in the regular rate.&nbsp;</li> <li> Agreed with the Department&rsquo;s efforts to eliminate confusion over whether meal periods are properly excluded from the regular rate.</li> </ul> <ul> <li> Noted that the Department&rsquo;s proposal to align the exclusion of reimbursable expenses from the regular rate with the broader language and intent of the FLSA would also provide needed clarity to employers in states such as Illinois and California, which require reimbursement of expenses.</li> <li> Requested that the Department provide further clarity on the types of &ldquo;other similar payments&rdquo; that can be excluded from the regular rate, such as employee wellness programs and fitness memberships, tuition benefits, sign-on bonuses, and employee discounts.</li> <li> Supported the Department&rsquo;s proposal to exclude state-law required show-up pay and call-back pay, as well as similar payments, from the regular rate.</li> <li> Welcomed the Department&rsquo;s clarification of the types of bonuses that can be excluded from the regular rate as discretionary.</li> <li> Requested that the Department clarify its position with respect to the inclusion of certain benefits-type payments.</li> <li> Proposed additional examples to support the Department&rsquo;s clarification of how the regular rate should be calculated when an employer uses more than one method of payment (e.g., day rates and piece rates).</li> </ul> <p> This week, we are finalizing comments on the joint employer proposal.&nbsp; That deadline is June 25.&nbsp; If you have any questions about these comments or the regulatory process at DOL generally, please contact us at <a href="mailto:regulatoryspring@seyfarth.com">regulatoryspring@seyfarth.com</a>.&nbsp;</p> https://www.seyfarth.com:443/publications/TBT062019 Nevada Becomes the First State to Restrict Employer Use of Pre-Employment Cannabis Tests https://www.seyfarth.com:443/publications/TBT062019 Thu, 20 Jun 2019 00:00:00 -0400 <p> Following closely on the heels of a similar law in New York City, effective January 1, 2020, it will be unlawful for Nevada employers to reject a job applicant who tests positive for cannabis on a pre-employment drug test. While there is debate as to whether some medical and recreational cannabis laws, including in Maine, allow an employer to take action based on off-duty or off-premises cannabis use, when it comes to job applicants, Nevada law could not be more clear.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/nevada-becomes-the-first-state-to-restrict-employer-use-of-pre-employment-cannabis-tests/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT062019a The Week in Weed: June 21, 2019 https://www.seyfarth.com:443/publications/TBT062019a Thu, 20 Jun 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/the-week-in-weed-june-21-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/resurveycpe062019 Seyfarth's Real Estate Survey referenced in Commercial Property Executive https://www.seyfarth.com:443/news/resurveycpe062019 Thu, 20 Jun 2019 00:00:00 -0400 <p> Seyfarth&#39;s Real Estate Survey was referenced in a June 20 story from Commercial Property Executive, &quot;Industry Watches as Fed Says No Rate Cut&mdash;For Now.&quot; Industry executives surveyed by Seyfarth shortly after last December&rsquo;s quarter-point rate hike identified rising interest rates as their top concern for the year. You can read the <a href="https://www.cpexecutive.com/post/industry-watches-as-fed-says-no-rate-cut-for-now/">full article here</a>.</p> https://www.seyfarth.com:443/news/masspecs061919 Seyfarth Releases New Edition of Massachusetts Peculiarities, the Authoritative Guide to the State’s Wage & Hour Laws https://www.seyfarth.com:443/news/masspecs061919 Wed, 19 Jun 2019 00:00:00 -0400 <p> BOSTON (June 19, 2019) &ndash; Seyfarth Shaw LLP has published the fourth edition of its book, <em>Massachusetts Peculiarities: An Employer&rsquo;s Guide to Wage &amp; Hour Laws in the Bay State</em>, the industry&rsquo;s only comprehensive guide on the substantial risks to employers under the Commonwealth&rsquo;s unique wage and hour laws. With a patchwork of arcane and complex statutes that impose many non-intuitive requirements, some of which date back to the 17th century, Massachusetts laws far exceed the scope of federal law and remain among the most restrictive in the nation.</p> <p> The 2019 edition of <em>Massachusetts Peculiarities</em> provides a detailed summary of Massachusetts wage and hour laws, including an analysis of the significant court decisions and regulatory authorities interpreting those laws and, where applicable, the ways in which they differ from federal law.</p> <p> &ldquo;Employers operating in the Commonwealth continue to encounter many unique challenges brought on by a myriad of new and existing wage and hour laws that carry the further burden of mandatory treble damages,&rdquo; said Richard Alfred, Boston-based chair of Seyfarth&rsquo;s national Wage &amp; Hour Litigation practice. &ldquo;Among many other local employment peculiarities, Massachusetts companies face obscure restrictions dating back to the colonial period; comply with possibly the harshest tip statue in the country; and abide by one of the most defined constriction in the use of independent contractors of any state.&rdquo;</p> <p> Led by Seyfarth&rsquo;s Robert Fisher, editor-in-chief of <em>Massachusetts Peculiarities</em>, the book features the collective contributions of more than 20 Labor &amp; Employment lawyers from the firm&rsquo;s Boston office. &ldquo;In the past year alone, the protections for employees and obligations on employers have increased substantially in Massachusetts. Our team carefully crafted this resource as a business necessity for in-house counsel and human resources professionals looking to successfully navigate our current legal landscape,&rdquo; said Fisher.</p> <p> The Seyfarth book analyzes a number of new trends and topics, including:</p> <ul> <li> The increase of the Massachusetts minimum wage to one of the highest in the country, which will continue to increase annually over the next four years.</li> <li> The establishment of a complicated and unique paid family and medical leave law.</li> <li> The enactment of an equal pay law that exceeds the requirements of federal law.</li> <li> The extension of parental leave to include paternity leave.</li> <li> The passage of a generous sick leave law.</li> </ul> <p> First published in 2010, <em>Massachusetts Peculiarities</em> is part of Seyfarth&rsquo;s popular <em>Peculiarities</em> series of books, which closely analyze the most challenging environments for U.S. employers operating in states like California, Illinois and Massachusetts. It is also available in eBook format, which is compatible with most major devices, fully searchable and includes a number of other features, including note-taking, highlighting and more. To view the Massachusetts Peculiarities eBook, please click <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=Dev42U4MNQf4Audm2QtiQRHllRwF6xLNxsa94SyGAmmva-38l9rI3IIQAeBDc7qA">here</a>.</p> <p> With more than 35 lawyers, Seyfarth&rsquo;s Boston Labor &amp; Employment group is one of the largest labor and employment practices in Massachusetts. Nationally, Seyfarth&rsquo;s Wage &amp; Hour Litigation practice includes close to 150 lawyers and has become one of the hallmarks of the firm&rsquo;s nationally recognized Labor &amp; Employment Department. For additional news and analysis of wage and hour cases nationwide, please visit Seyfarth&rsquo;s <a href="https://www.wagehourlitigation.com/">Wage &amp; Hour Litigation Blog</a>.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 15 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com ">bkiefer@seyfarth.com </a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/publications/MA061919-LE New Jersey to Require Hotel Employers to Provide “Panic Devices” to Employees https://www.seyfarth.com:443/publications/MA061919-LE Wed, 19 Jun 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em>&nbsp;On June 11, 2019, New Jersey Governor Phil Murphy signed a law requiring covered hotels to provide &ldquo;panic devices&rdquo; to employees engaged in &ldquo;housekeeping or room service duties.&rdquo;&nbsp; The law further imposes notification, reporting, and recordkeeping obligations on covered hotels.</em></p> <p> <strong>Background</strong></p> <p> In September 2018 two New Jersey state senators introduced Bill No. S2986 to address the &ldquo;unique&rdquo; nature of hotel work. Specifically, the bill sought to protect those hotel employees working alone in guest rooms who may be &ldquo;particularly vulnerable&rdquo; to assault. After amendments in the New Jersey State Senate and Assembly, the bill was signed by Governor Murphy on June 11, 2019. A copy of the bill&rsquo;s text is available <a href="https://www.njleg.state.nj.us/2018/Bills/A4500/4439_R2.HTM">here</a>.</p> <p> <strong>Employer&rsquo;s Covered and Their Obligations</strong></p> <p> The law differs in some significant ways from the bill introduced in September 2018, discussed in our previous alert <a href="https://www.laborandemploymentlawcounsel.com/2018/12/phone-wallet-keys-panic-button-hotel-employee-panic-device-bill-advanced-to-new-jersey-senate-for-further-consideration/">here</a>. The highlights of the law include:</p> <ul> <li> <strong>Covered Hotels:</strong> The mandate applies to hotels and similar establishments that contain 100 or more guest rooms.</li> <li> <strong>Obligation to Provide a Panic Device</strong>: Covered hotels must provide each employee who performs &ldquo;housekeeping or room service duties,&rdquo; without other employees present, a &ldquo;panic device.&rdquo; This includes &ldquo;any subcontractor&rdquo; of the hotel employer. <ul> <li> <strong>Panic Device: </strong>A &ldquo;panic device&rdquo; is a &ldquo;two-way radio or other electronic device&rdquo; that an employee keeps on his or her person and allows an employee to &ldquo;communicate with&rdquo; or &ldquo;effectively summon&rdquo; immediate assistance from security, management, or other appropriate hotel staff member.</li> </ul> </li> <li> <strong>Employee&rsquo;s Use: </strong>An employee may use the device if the employee &ldquo;reasonably believes&rdquo; there is an ongoing crime, immediate threat of assault or harassment, or other emergency in the employee&rsquo;s presence. After using the device, the employee may leave the &ldquo;immediate area of perceived danger&rdquo; and cease work to await the arrival of assistance. An employee exercising this right is protected from any adverse employment action by the law&rsquo;s anti-retaliation provision.</li> </ul> <p> <strong>Employer&rsquo;s Obligations After Device Triggered</strong></p> <p> Beyond promptly responding to the employee&rsquo;s location once the device is triggered, covered hotels&rsquo; obligations include:</p> <ul> <li> <strong>Notice:</strong> Notifying hotel employees &ldquo;assigned to housekeeping or room service duties&rdquo; about the room where the alleged incident occurred.</li> <li> <strong>Recordkeeping:</strong> Keeping records of accusations and maintaining a list of accused guests for five years from the date of the incident.</li> <li> <strong>Reporting:</strong> Alerting the appropriate law enforcement agency about any panic device incident and cooperating in any subsequent investigation undertaken by such agency.</li> <li> <strong>Reassignment:</strong> Immediately reassigning the employee who activated the panic device to a different work area &ldquo;away from the guest room&rdquo; for the duration of the guest&rsquo;s stay.</li> <li> <strong>Servicing:</strong> Providing other employee&rsquo;s the option of servicing the accused guest&rsquo;s room with a partner or &ldquo;opting out&rdquo; of servicing that guest&rsquo;s room for the remainder of the guest&rsquo;s stay.</li> <li> <strong>Guest Conviction:</strong> Where an accused guest is convicted of a crime connected to the incident brought to the hotel&rsquo;s attention, the hotel &ldquo;may decline to provide occupancy to the guest.&rdquo;</li> </ul> <p> <strong>Employer&rsquo;s Notification Obligations</strong></p> <p> Covered hotels must notify both employees and guests of the panic device requirement, which requires:</p> <ul> <li> <strong>Notice to Employees:</strong> The law requires covered hotels to &ldquo;develop and maintain&rdquo; a program that educates hotel employees regarding the use of the panic device, an employee&rsquo;s rights if they activate the device, and to encourage use of the device when appropriate. This program &ldquo;may include written information,&rdquo; but the law does not require it.</li> <li> <strong>Notice to Guests:</strong> Covered hotels are required to notify guests that panic devices are provided to certain hotel employees. This may be done by requiring guest acknowledgement of the policy at check-in or by prominently displaying signs on the interior side of guest room doors detailing the panic device policy and the employees&rsquo; rights.</li> </ul> <p> <strong>Collective Bargaining Agreement Carve Out</strong></p> <p> The law does not apply where a collective bargaining agreement already addresses the issue of panic devices or otherwise addresses safety and reporting procedures for hotel employees. Further clarification may come when the Commissioner of Labor and Workforce Development adopts rules and regulations to enforce the law.</p> <p> <strong>Penalties for Non-Compliance</strong></p> <p> Covered hotels that fail to provide required panic devices to their employees or fail to uphold their obligations under the law could face civil penalties in the amount of $5,000 for a first violation, and $10,000 for each subsequent violation.</p> <p> <strong>Similar Action Around the Country</strong></p> <p> Protecting hotel and related industry workers remains a hot topic among state and local legislatures. Similar protections for hotel workers are being considered in the Illinois legislature&mdash;the Hotel and Casino Employee Safety Act. A copy of the bill is available <a href="http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=SB&amp;DocNum=75&amp;GAID=15&amp;SessionID=108&amp;LegID=115041">here</a>. This follows an ordinance passed by the City of Chicago on October 11, 2017&mdash;the Hotel Workers Sexual Harassment Ordinance&mdash;requiring Chicago hotels to provide panic buttons or notification devices to certain hotel employees. We previously published an alert regarding the Chicago ordinance <a href="https://www.laborandemploymentlawcounsel.com/2017/10/click-for-backup-new-ordinance-requires-chicago-hotels-to-provide-staff-with-panic-buttons/">here</a>. The full text of the ordinance can be found <a href="https://www.laborandemploymentlawcounsel.com/wp-content/uploads/sites/224/2017/10/SO2017-3260.pdf">here</a>, and a link to FAQs regarding the ordinance is available <a href="https://www.chicago.gov/content/dam/city/depts/bacp/Small%20Business%20Center/BACPPanicButtonFAQs.pdf">here.</a></p> <p> Washington state passed a law on May 13, 2019, addressing sexual harassment in the workplace, which also requires a &ldquo;panic button&rdquo; be provided to employees including janitors, security guards, hotel or motel housekeepers, or room service attendants. The Washington state law is set to take effect on July 28, 2019. A copy of the law is available <a href="http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session%20Laws/Senate/5258-S.SL.pdf#page=1">here</a>. Finally, Miami Beach also passed an ordinance designed to protect these workers by requiring employers to provide &ldquo;panic buttons,&rdquo; which is set to take effect on August 1, 2019. A copy of the ordinance is available <a href="https://library.municode.com/FL/miami_beach/codes/code_of_ordinances?nodeId=SPAGEOR_CH62HURE_ARTVIPRHOHOEMASSEHA_S62-206REPRSABUNODECEEM">here</a> .</p> <p> <strong>Employer Takeaways</strong></p> <p> The New Jersey law is set to take effect on January 1, 2020. Employers need to start considering the costs and burdens of compliance. This includes assessment of how many employees will require the panic devices, what updates need to be made to employee handbooks or other training materials, and how employers will notify guests about the panic device policy.</p> https://www.seyfarth.com:443/publications/EL061919 Building a Modern Slavery Strategy https://www.seyfarth.com:443/publications/EL061919 Wed, 19 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: This is the fourth and last in a series of blogs by our Global Modern Slavery Team dealing with how companies can navigate the changing legal landscape addressing the role of business and its connection to modern slavery.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/building-a-modern-slavery-strategy/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/2019MassPecs Now Available: 4th Edition of Mass-Peculiarities: An Employer’s Guide to Wage & Hour Law in the Bay State https://www.seyfarth.com:443/publications/2019MassPecs Wed, 19 Jun 2019 00:00:00 -0400 <p> We are pleased to announce Seyfarth Shaw&rsquo;s publication of the 2019 Edition of <em>Mass-Peculiarities: An Employer&rsquo;s Guide to Wage &amp; Hour Law in the Bay State</em>. This publication explains and analyzes the ways in which Massachusetts wage and hour law differs from federal law and incorporates unique requirements not a part of the laws of most other states. The 4th Edition includes, among other important legal changes, the impact of the <strong>Grand Bargain legislation,</strong> updates to the <strong>pay equity, overtime and arbitration</strong> sections, and a discussion of <strong>key court decisions</strong>.</p> <p> Authored by attorneys in the Wage &amp; Hour Litigation Practice Group in Seyfarth&rsquo;s Boston office, <em>Mass-Peculiarities</em> is the only publication of which we are aware that covers this topic in such a comprehensive manner. As a company doing business in Massachusetts, you are undoubtedly aware that it is more important than ever that employers of Massachusetts employees understand their peculiar legal obligations. I am pleased to enclose, with our compliments, the 2019 Edition of this publication.</p> <p> We hope this publication will be of use to you in coping with the challenges of Massachusetts employment law. Additionally, for the latest updates and insight on wage &amp; hour law, I invite you to subscribe to our Wage &amp; Hour Litigation Blog by <a href="https://www.wagehourlitigation.com/subscribe/">clicking here</a>.</p> <p> <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=Dev42U4MNQf4Audm2QtiQRHllRwF6xLNxsa94SyGAmmva-38l9rI3IIQAeBDc7qA "><img alt="Mass-Peculiarities Report" src="http://marketing.seyfarth.com/reaction/images/book_covers/2019_Mass_Pecs_Cover-150x194.png" style="border: 1px solid rgb(95, 106, 114); width: 150px; height: 194px;" /></a></p> <p> <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=Dev42U4MNQf4Audm2QtiQRHllRwF6xLNxsa94SyGAmmva-38l9rI3IIQAeBDc7qA "><strong>Request Your Copy Here</strong></a></p> https://www.seyfarth.com:443/publications/CCD061819 Ninth Circuit Upholds Decertification of Class in Unauthorized Customer Call Recording Suit Where the Class Representative Did Not Have Standing https://www.seyfarth.com:443/publications/CCD061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On June 5, 2019, the Ninth Circuit issued an opinion in NEI Contr. &amp; Eng&rsquo;g, Inc. v. Hanson Aggregates Pac. Sw., Inc., 2019 U.S. App. LEXIS 16885 (9th Cir. June 5, 2019), upholding the district court&rsquo;s decertification of a class whose class representative lacked standing on its individual claims.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/06/ninth-circuit-upholds-decertification-of-class-in-unauthorized-customer-call-recording-suit-where-the-class-representative-did-not-have-standing/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/GPW061819 Upcoming Webinar Series! California Consumer Privacy Act: Is your organization ready? https://www.seyfarth.com:443/publications/GPW061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> In just a few short months, on January 1, 2020, the California Consumer Privacy Act (CCPA) is set to go into effect, establishing new consumer privacy rights for California residents and imposing significant new duties and obligations on commercial businesses conducting business in the state of California. Consumer rights include the right to know what personal information a business is collecting, selling, and disclosing about them; the right to deletion; the right to opt-out of the sale of personal information; and the right not to be discriminated against (written as a business duty). These rights are intended to provide consumers with a level of control of their personal information and to establish transparency on the part of the businesses to comply with consumers&rsquo; exercise of their privacy rights. In addition, businesses are required to provide employee training; website notice of consumer rights and categories of personal information collected, sold, and disclosed; and to implement and maintain adequate security measures. The penalties of non-compliance can be severe, with avenues for both regulatory enforcement and private cause of action. Learn what the attorney general&rsquo;s forthcoming regulations likely have in store for businesses and what your organization should be doing now to proactively prepare for the CCPA to ensure compliance.<br /> <br /> <a href="https://www.globalprivacywatch.com/2019/06/upcoming-webinar-series-california-consumer-privacy-act-is-your-organization-ready/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH061819 California State Court Yields To FMCSA’s Preemption Determination Over Drivers’ Meal And Rest Break Claims https://www.seyfarth.com:443/publications/WH061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Following the Federal Motor Carrier Safety Administration&rsquo;s determination in December 2018 that federal law preempts California&rsquo;s meal and rest break rules, observers questioned what deference courts would give to the agency&rsquo;s determination. This week, a Los Angeles Superior Court was the first California state court to apply the determination, dismissing armored truck drivers&rsquo; claims against a security company because federal hours of service rules governing commercial truck drivers preempt California&rsquo;s meal and rest break rules for both long- and short-haul drivers. While this state court ruling is favorable, all eyes remain on how the Ninth Circuit will address this preemption issue in a pending appeal brought by the State of California and several other groups, arguing the federal agency overstepped its authority. Employers should proceed with caution until the Ninth Circuit resolves the preemption issue.<br /> <br /> <a href="https://www.wagehourlitigation.com/california/california-state-court-yields-to-fmcsas-preemption-determination-over-drivers-meal-and-rest-break-claims/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS061819 Upcoming Webinar Series! California Consumer Privacy Act: Is your organization ready? https://www.seyfarth.com:443/publications/TS061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> In just a few short months, on January 1, 2020, the California Consumer Privacy Act (CCPA) is set to go into effect, establishing new consumer privacy rights for California residents and imposing significant new duties and obligations on commercial businesses conducting business in the state of California. Consumer rights include the right to know what personal information a business is collecting, selling, and disclosing about them; the right to deletion; the right to opt-out of the sale of personal information; and the right not to be discriminated against (written as a business duty). These rights are intended to provide consumers with a level of control of their personal information and to establish transparency on the part of the businesses to comply with consumers&rsquo; exercise of their privacy rights. In addition, businesses are required to provide employee training; website notice of consumer rights and categories of personal information collected, sold, and disclosed; and to implement and maintain adequate security measures. The penalties of non-compliance can be severe, with avenues for both regulatory enforcement and private cause of action. Learn what the attorney general&rsquo;s forthcoming regulations likely have in store for businesses and what your organization should be doing now to proactively prepare for the CCPA to ensure compliance.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/06/articles/privacy-2/upcoming-webinar-series-california-consumer-privacy-act-is-your-organization-ready/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/FutureEnterprise061819 Building a Modern Slavery Strategy https://www.seyfarth.com:443/publications/FutureEnterprise061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> There are many human rights which are already respected and protected by business in relation to their employees and contractors.<br /> <br /> <a href="https://www.futureenterprise.com/blog/2019/6/17/building-a-modern-slavery-strategy">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WLS061819 The data that demonstrates the state of play of enterprise bargaining https://www.seyfarth.com:443/publications/WLS061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> In a previous blog, we&rsquo;ve mentioned the decline of enterprise bargaining in Australia.<br /> <br /> <a href="https://www.workplacelawandstrategy.com.au/2019/06/the-data-that-demonstrates-the-state-of-play-of-enterprise-bargaining/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT061819 Court Finds No Private Right of Action Under Michigan Medical Marihuana Act https://www.seyfarth.com:443/publications/TBT061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> On February 19, 2019, the Michigan Court of Appeals considered whether a job applicant rejected for a position due to a positive test result for marijuana could sue under the state&rsquo;s Medical Marihuana Act (MMA). At issue was the following from the MMA:<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/court-finds-no-private-right-of-action-under-michigan-medical-marihuana-act/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA061819-LE Department of Family and Medical Leave Releases Final PFML Regulations And New Template Worker Notice Forms https://www.seyfarth.com:443/publications/MA061819-LE Tue, 18 Jun 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis:&nbsp;</strong> Earlier today, the Department of Family and Medical Leave (DFML) issued its final regulations for the Massachusetts Paid Family and Medical Leave (PFML) Law. While the final regulations do not contain many substantial changes from the March 29, 2019 proposed regulations, there are a number of noteworthy changes and clarifications. Separately, the DFML also released new template worker notice forms, due to be distributed by September 30, 2019, and posted clarifying information for those employers that already distributed notices to their workers.</em></div> <div> &nbsp;</div> <div> <strong>DFML&rsquo;s New Notice Forms And Addendum For Employers That Already Issued Notices</strong></div> <div> &nbsp;</div> <div> Although not part of the final regulations, we wanted to alert our readers that the DFML has posted updated template notice forms. The English version for employers with 25 or more covered workers can be accessed <a href="https://www.mass.gov/doc/employer-notice-for-a-workforce-with-25-or-more-covered-individuals/download">here</a>; and the English version for employers with fewer than 25 covered workers can be accessed <a href="https://www.mass.gov/doc/employer-notice-for-a-workforce-with-fewer-than-25-covered-individuals/download">here</a>. The DFML also announced on its website that if an employer provided written notices to its workforce prior to the July 14 delay announcement, the employer will need to provide covered workers with an addendum sheet explaining the updated program dates and contribution rates. A template of this addendum will be provided by the DFML this week.</div> <div> &nbsp;</div> <div> <strong>Noteworthy Highlights From Final Regulations</strong></div> <div> &nbsp;</div> <div> The final regulations will go into effect on July 1, 2019.&nbsp; They will be codified at 458 CMR 2.00 and may be accessed <a href="https://www.mass.gov/doc/458-cmr-200-department-of-family-and-medical-leave/download">here</a>. While this summary is not meant to capture all changes between the proposed regulations and the final regulations, we highlight the changes and clarifications most noteworthy to employers.</div> <div> &nbsp;</div> <ul> <li> The regulations adopt the October 1, 2019 contribution start date and the initial 0.75% contribution rate we reported yesterday, <a href="https://www.seyfarth.com/publications/OMM061719-LE">here</a>.</li> <li> The final regulations clarify that the statutory <em>exclusions </em>from the definition of &ldquo;employment&rdquo; set forth in the Massachusetts unemployment statute (M.G.L. ch. 151A, &sect; 6) also apply to the PFML Law. For example, service performed by a student in the employ of a school, college, or university, who is also enrolled in that school, is not covered by the PFML Law.</li> <li> The final regulations confirm that employers may deduct different percentages from the wages of different groups of covered workers, provided that the deductions do not exceed the maximum percentages set by the PFML Law. For example, employers may deduct a greater percentage of the family leave or medical leave contribution from exempt employees than deducted from non-exempt employees. Likewise, employers may deduct a greater percentage from its non-unionized workers than from its unionized workers (depending on its collective bargaining with the union).</li> <li> The final regulations permit employers to require intermittent leave to be taken in increments not smaller than a designated minimum time period, provided that the minimum period does not exceed four consecutive hours. Employers should be sure to include this requirement in their paid family and medical leave policies. The final regulations also clarify that the initial seven-day waiting period for intermittent leave or reduced schedule leave is seven consecutive calendar days, not the aggregate accumulation of seven days of intermittent leave.</li> <li> The final regulations clarify that employers&rsquo; quarterly reports to the State do not have to report earnings of 1099-MISC contract workers unless the contract worker has elected coverage under the public PFML program, or if the employer is a covered business entity (<em>i.e. </em>more than 50% of the employer&rsquo;s Massachusetts workforce is comprised of 1099-MISC contract workers).</li> <li> With respect to job protection and reinstatement requirements, the final regulations have added an exception for employees who are hired for a specific term or only to perform work on a discrete project. In those situations, if the employment term or project is over and the employer would not have otherwise continued to employ the employee, the employer does not need to reinstate the employee after leave. This is an important clarification for staffing industry employers.</li> <li> Several of the final regulations&rsquo; key revisions and clarifications pertain to private plans, including: <ul> <li> If an employer has applied for and received approval for a private plan exemption and subsequently fails to maintain or renew its private plan exemption prior to January 1, 2021, the employer may be responsible for retroactive contributions to the public Trust Fund. The regulations do not clarify whether employers will be responsible for retroactive contributions if they fail to renew a private plan after January 1, 2021.</li> <li> An employer may apply for a private plan exemption only once per quarter.</li> <li> The final regulations establish a three-year record keeping requirement for employers with approved private plans with respect to any records relating to the plan, including those relating to PFML benefits claims under the plan.</li> </ul> </li> <li> The final regulations adopt a provision allowing the DFML to waive or modify any penalty imposed under the PFML Law for an employer&rsquo;s failure to make the required contributions if the employer can make a showing of good cause.</li> <li> The final regulations clarify that it will refund contributions to an employer that overpays its contributions.</li> <li> The DFML has clarified that the DFML may contact a covered worker&rsquo;s health care provider directly for clarification or authentication of a certification form when necessary.<br /> &nbsp;</li> </ul> <div> Please note that the mandatory poster is still required to be posted by July 1, 2019.&nbsp; Otherwise, with the regulations now final and the various dates and deadlines set, businesses can now finalize their decision-making and preparation for the September 30th notices and the October 1st commencement of payroll deductions. For our prior reports on the PFML Law and the proposed regulations, you may refer <a href="https://www.seyfarth.com/dir_docs/publications/MA_Paid_Family_and_Medical_Leave_Alerts.pdf">here</a>.</div> https://www.seyfarth.com:443/news/weisswgn061819 Philippe Weiss interviewed on WGN Radio https://www.seyfarth.com:443/news/weisswgn061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> Philippe Weiss was interviewed June 18th on WGN Radio, &quot;Wintrust Business Lunch 6/18/19: Workplace Betting.&quot; Weiss discussed helping employers navigate legalized sports betting in the workplace. You can listen to the full interview at minute 14 <a href="https://wgnradio.com/2019/06/18/wintrust-business-lunch-6-18-19-facebooks-big-time-cryptocurrency-workplace-betting-boeings-big-break/">here</a>.</p> https://www.seyfarth.com:443/news/youngccr061819 Adam Young quoted in the Cook County Record https://www.seyfarth.com:443/news/youngccr061819 Tue, 18 Jun 2019 00:00:00 -0400 <p> Adam Young was quoted in a June 18 story from the Cook County Record, &quot;Businesses could face yet more lawsuits if defined as &#39;person&#39; under IL Gender Violence law, attorney says.&quot; Young said that, under the Gender Violence Act, the plaintiff must prove an intentional act by employer, that they knew or should have known about the violence based on gender. You can read the <a href="https://cookcountyrecord.com/stories/512627304-businesses-could-face-yet-more-lawsuits-if-defined-as-person-under-il-gender-violence-law-attorney-says">full article here</a>.</p> https://www.seyfarth.com:443/news/olsonusnews061719 Camille Olson quoted in U.S. News & World Report https://www.seyfarth.com:443/news/olsonusnews061719 Mon, 17 Jun 2019 00:00:00 -0400 <p> Camille Olson was quoted in a June 17 story from U.S. News &amp; World Report, &quot;Learn Your Genetic Privacy Workers&#39; Rights.&quot; Olson said that normal office conversations can sometimes veer into GINA territory if managers aren&#39;t careful. You can read the <a href="https://money.usnews.com/careers/applying-for-a-job/articles/learn-your-genetic-privacy-workers-rights">full article here</a>.</p> https://www.seyfarth.com:443/news/ehstoday061719 James Curtis, Daniel Birnbaum, Patrick Joyce, Matthew Sloan and Adam Young quoted in EHS Today https://www.seyfarth.com:443/news/ehstoday061719 Mon, 17 Jun 2019 00:00:00 -0400 <p> James Curtis, Daniel Birnbaum, Patrick Joyce, Matthew Sloan and Adam Young were quoted in a June 17 story from EHS Today, &quot;The Gig Economy Poses New Safety Threats and Liabilities.&quot; The Seyfarth lawyers said that safety training, culture, practices, supervision and enforcement must be adapted to meet the new economy. You can read the <a href="https://www.ehstoday.com/safety/gig-economy-poses-new-safety-threats-and-liabilities">full article here</a>.</p> https://www.seyfarth.com:443/publications/OMM061719-LE Governor Signs Legislation Amending Massachusetts Paid Family And Medical Leave Law And DFML Extends Worker Notice And Private Plan Application Deadlines And Announces Updated Contribution Rates https://www.seyfarth.com:443/publications/OMM061719-LE Mon, 17 Jun 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: &nbsp;</em></strong><em>On June 13, 2019, Governor Baker signed into law S 2255, officially delaying the start of the payroll deductions for the Massachusetts Paid Family and Medical Leave (PFML) program by three months to October 1, 2019 and implementing other technical changes. On June 14, 2019, in response to the three-month delay, the Department of Family and Medical Leave (DFML) extended the deadline for distributing the mandatory PFML notice to workers from June 30th to September 30, 2019 and the deadline for applying for a private plan exemption to December 20, 2019.&nbsp; Now, employers will remit the required contributions for the October - December quarter by January 31, 2020.&nbsp; The DFML also has provided an updated breakdown of the new 0.75% contribution rate. </em></p> <p> <strong>Deadline Extensions And New Contribution Rates</strong></p> <p> In response to the three-month delay of the payroll deductions and contributions, the DFML extended a number of the program&rsquo;s other deadlines. Rather than racing to finalize and distribute the mandatory worker notice by June 30, employers will now have until September 30 to provide the mandatory notice to all Massachusetts covered workers. The DFML announced that it will be revising and posting on its website updated template notices in the coming days.</p> <p> For employers considering applying for a private plan exemption, the application deadline has been extended from September 20 to December 20, 2019.</p> <p> The date for the first payment of the employer-worker contributions to the public program&rsquo;s trust fund has changed from October 31, 2019 to January 31, 2020, covering the first quarter, October 1 to December 31.</p> <p> To make up for the loss of three months&rsquo; worth of contributions, the DFML announced that the contribution rate will increase from 0.63% to 0.75%. The new contribution rate will be allocated as 0.13% for family leave and 0.62% for medical leave. If charging employees the 40% maximum share of the 0.62% medical leave contribution, the employee share will be 0.248% and the employer share will be 0.372%. Employers may also charge employees 100% of the 0.13% family leave contribution. The DFML has provided the following chart to explain the breakdown of the new contribution rate as well as the obligation for employers with 25 or more covered workers.</p> <p style="text-align: center;"> <img alt="" src="https://www.seyfarth.com/dir_docs/publications/OMM061719.png" /></p> <p> According to the DFML, the final PFML regulations will be posted to the DFML website on Monday, June 17, 2019, and they will go into effect on July 1, 2019.</p> <p> <strong>Technical Amendments To PFML Law</strong></p> <p> The technical amendments made the following changes and/or clarifications to the PFML Law:</p> <ul> <li> The term &ldquo;serious health condition&rdquo; will have the same meaning under the PFML as under the federal Family Leave and Medical Leave Act.</li> <li> A covered individual who is a former employee shall be eligible for PFML benefits if he or she is unable to perform the functions of their most recent position or other suitable employment as that term is defined under the unemployment benefits statute, subsection (c) of section 25 of Chapter 151A.</li> <li> Previously, the provision related to the taking of leave intermittently or on a reduced leave schedule stated that taking such leave would &ldquo;not result in a reduction in the total amount of leave to which the covered individual is entitled.&rdquo; The amendment clarifies that the total amount of leave will in fact be reduced based on the amount of leave actually taken.</li> <li> The amendments clarify that a health care provider should include the following information in the certification for a covered individual taking medical leave: a statement by the health care provider that the covered individual is unable to perform the functions of the covered individual&rsquo;s position, a statement of the medical necessity, if any, for intermittent leave or leave on a reduced leave schedule and, if applicable, the expected duration of the intermittent leave or reduced leave schedule.</li> <li> The certification for a covered individual taking family leave of because of the serious health condition of a family member may also be required to provide a statement of the medical necessity, if any, for intermittent leave or leave on a reduced leave schedule and the expected duration of the intermittent leave or reduced leave schedule. The same changes were made to the provision for covered individuals taking family leave to care for a family member who is a covered service member.</li> <li> Previously, the PFML Law assessed employers or covered business entities who failed or refused to make the required contributions a penalty of 0.63% of its total annual payroll for each year or fraction of a year that is failed to comply as well as the total amount of benefits paid to covered individuals for whom it failed to make contributions. The amendment changes this penalty to an amount equal to the employer&rsquo;s or covered business entity&rsquo;s total annual payroll for each year, or the fraction thereof for which it failed to comply, multiplied by the then-current annual contribution rate required in addition to the total amounts of benefits paid to covered individuals for whom it failed to make contributions. This change accounts for potential increases in the contribution rate, including the most recent increase to 0.75%.</li> </ul> <p> The Associated Industries of Massachusetts (AIM) was a key player in convincing State Leaders to amend the PFML Law and extend the various key dates and deadlines.</p> <p> For our prior reports on the PFML Law and the proposed regulations, you may refer <a href="https://www.seyfarth.com/dir_docs/publications/MA_Paid_Family_and_Medical_Leave_Alerts.pdf">here</a>.</p> https://www.seyfarth.com:443/publications/TS061719 “A Very Tortured Argument”—Lawyer Cannot Use Bar Membership to Skirt a Bargained-For Restrictive Covenant in the Sale of a Non-Legal Business https://www.seyfarth.com:443/publications/TS061719 Mon, 17 Jun 2019 00:00:00 -0400 <p> While it is well-settled law that an attorney cannot be bound by an agreement restricting the right to practice law, that does not insulate attorneys from all restrictive covenants. As we have previously discussed, there are exceptions to this rule, as a Massachusetts attorney recently learned the hard way.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/06/articles/restrictive-covenants/a-very-tortured-argument-lawyer-cannot-use-bar-membership-to-skirt-a-bargained-for-restrictive-covenant-in-the-sale-of-a-non-legal-business/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC061519 Conditional Certification Granted In ADEA Collective Action On Behalf Of All Chattanooga Volkswagen Employees Aged 50 And Over https://www.seyfarth.com:443/publications/WC061519 Sat, 15 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On June 11, 2019, in an age discrimination lawsuit, the U.S. District Court for the Eastern District of Tennessee once again demonstrated how the lenient standard that is so often applied at the conditional certification stage of a collective action brought under the procedural rules of the Fair Labor Standards Act. In Manlove v. Volkswagen Aktiengesellschaft, No. 18-CV-145 (E.D. Tenn. June 11, 2019), the Court granted conditional certification on the basis of just four declarations, even though those declarations identified four different methods of alleged age discrimination that were perpetrated by different decision-makers.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/conditional-certification-granted-in-adea-collective-action-on-behalf-of-all-chattanooga-volkswagen-employees-aged-50-and-over/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CA061419-CORP Tune-Up Your Estate Plan in Light of Changing Conditions https://www.seyfarth.com:443/publications/CA061419-CORP Fri, 14 Jun 2019 00:00:00 -0400 <div> If you haven&rsquo;t looked at your Will or estate plan lately, now is a good time to do so. Much has changed over the last decade, and more change may be on the horizon. See if your estate plan is still appropriate in light of the following:</div> <div> &nbsp;</div> <div> <strong>Federal Changes&nbsp;</strong></div> <div> &nbsp;</div> <ul> <li> The federal estate tax gift and estate tax exemption amount is now $11.4 million, indexed for inflation, which is its historic high. A married couple may transfer twice that amount to children or others, or $22.8 million, free of federal gift and estate tax.&nbsp;</li> <li> The federal exemption amount is now &ldquo;portable&rdquo; between spouses, so that the first spouse to die may transfer any unused exemption to the surviving spouse without a &ldquo;credit shelter trust&rdquo;.</li> <li> However, the enhanced federal exemption amount is scheduled to &ldquo;sunset&rdquo; in 2026 back down to $5.6 million (indexed for inflation). No new legislation is needed for the sunset; in fact, Congress and the President would have to agree to change it.&nbsp;</li> <li> Many are calling for increased taxes on wealth and the wealthy. Some candidates for President have proposed reducing the federal exemption amount, increasing gift and estate tax rates up to 77%, and closing &ldquo;loopholes&rdquo;, i.e., eliminating long-standing estate planning strategies. These changes could happen before 2026.</li> </ul> <div> &nbsp;</div> <div> <strong>State Law Changes</strong></div> <div> &nbsp;</div> <ul> <li> The New York estate tax exemption amount is $5.74 million but is not portable, and the exemption is phased out if your taxable estate exceeds that amount by 5%. For a NY taxable estate of about $6 million there is effectively no exemption, and the NY estate tax is about $500,000. The NY estate tax on a $10 million taxable estate is more than $1 million! Because NY has no gift tax, lifetime gifts do not decrease the estate tax exemption for NY purposes, although gifts made within three years of death would be clawed back under a pending proposal.&nbsp;</li> <li> New Jersey repealed its estate tax but retained its inheritance tax.&nbsp;</li> <li> Connecticut raised its estate and gift tax exemption amount.</li> <li> The Illinois estate tax exemption amount is only $4 million and is not portable, putting a premium on flexibility in your estate plan. For IL residents, the estate tax savings are less dramatic as the exemption is smaller than in NY, but the potential savings through proper planning are nonetheless significant.</li> </ul> <div> &nbsp;</div> <div> <strong>Other Considerations</strong></div> <div> &nbsp;</div> <ul> <li> Surrogate&rsquo;s Courts and Probate Courts, always slow, have become even slower.</li> <li> Stock markets and real estate markets have surged since 2008.</li> </ul> <div> &nbsp;</div> <div> <strong>Conclusion</strong></div> <div> &nbsp;</div> <div> Some of the above may affect your current estate plan. Many older Wills have credit shelter bequests and trusts that should be revised in light of the changes. You may want to take advantage of the enhanced federal exemption amount now, before it sunsets away. We can show you how to shelter up to almost $23 million from your state&rsquo;s estate tax if you are married and live in a state with an estate tax such as NY, CT or IL, potentially saving millions of dollars of state estate tax.&nbsp;</div> <div> &nbsp;</div> <div> We can show you a variety of estate planning techniques that are tried and true and may save you a great deal of tax, which may not be available much longer. We can help you avoid probate and allow your estate and any trusts you create to sidestep the judicial system.&nbsp;</div> <div> &nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/CONS061419 David Blake to Present Strafford Webinar on Construction Management Agreements on June 17 https://www.seyfarth.com:443/publications/CONS061419 Fri, 14 Jun 2019 00:00:00 -0400 <p> On June 17, 2019, from 1:00 to 2:30 p.m. Eastern, David Blake is co-presenting a Strafford webinar entitled: &ldquo;Construction Management Agreements: Key Provisions Common Areas of Dispute, and Minimizing Performance Risks.&rdquo; The panel, which includes construction practitioners experienced in negotiating construction management contracts, will focus on best practices for drafting and negotiating these agreements. They will also cover the critical clauses to include in the contracts and provide strategies for avoiding common drafting pitfalls and resolving contract disputes.<br /> <br /> <a href="https://www.constructionseyt.com/2019/06/david-blake-to-present-strafford-webinar-on-construction-management-agreements-on-june-17/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/FutureEnterprise061419 Washington, D.C.’s First Annual Restaurant and Specialty Retail Summit - The First of Many for Local Industry Leaders https://www.seyfarth.com:443/publications/FutureEnterprise061419 Fri, 14 Jun 2019 00:00:00 -0400 <p> On Wednesday, June 12, the Seyfarth Shaw DC office hosted its first Restaurant and Specialty Retail Summit. Together with co-hosts Streetsense and CohnReznick, Partner Andrew Sherman, creator and moderator of the event, sought to bring together local restauranteurs and specialty retail businesspeople to start a conversation about the latest trends at the forefront of the restaurant and retail industry. The event drew in around eighty local leaders in the restaurant and specialty retail industries, some of whom contributed their own restaurants&rsquo; signature dishes to the lunch buffet. Panelists discussed a variety of topics over three separate panels, including subjects like building a strong foundation for a successful restaurant, site design and customer experience, current legal and regulatory challenges inherent in building retail brands and systems, and important, inescapable trends in the industry.<br /> <br /> <a href="https://www.futureenterprise.com/blog/2019/6/14/washington-dcs-first-annual-restaurant-and-specialty-retail-summit-the-first-of-many-for-local-industry-leaders">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/schoonmakershrm061419 Linda Schoonmaker quoted in SHRM https://www.seyfarth.com:443/news/schoonmakershrm061419 Fri, 14 Jun 2019 00:00:00 -0400 <p> Linda Schoonmaker was quoted in a June 14 story from SHRM, &quot;The Battle over Paid Sick Leave in Texas Continues.&quot; Schoonmkaer said that unless the Austin judicial challenge succeeds, employers will not see any relief from these local laws in the near future. You can read the <a href="https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/the-battle-over-paid-sick-leave-in-texas-continues.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/TBT061319 The Week in Weed: June 14, 2019 https://www.seyfarth.com:443/publications/TBT061319 Thu, 13 Jun 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/the-week-in-weed-june-14-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT061319a Half Baked: Illinois Legislature Includes Some Employer Protections in New Recreational Cannabis Law – But Beware the Traps https://www.seyfarth.com:443/publications/TBT061319a Thu, 13 Jun 2019 00:00:00 -0400 <p> Illinois Governor J.B. Pritzker is expected to sign a comprehensive recreational cannabis bill. While the &ldquo;Cannabis Regulation and Tax Act&rdquo; contains extensive provisions preserving an employer&rsquo;s right to ban cannabis and otherwise have a &ldquo;zero tolerance&rdquo; substance abuse policy, there are potential traps for the unwary and, thus, employers should carefully consider how the new law will impact their existing substance abuse and drug testing policies and procedures.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/half-baked-illinois-legislature-includes-some-employer-protections-in-new-recreational-cannabis-law-but-beware-the-traps/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ADA061319 Domino’s Files Petition for US Supreme Court Review of Unfavorable Website Access Decision https://www.seyfarth.com:443/publications/ADA061319 Thu, 13 Jun 2019 00:00:00 -0400 <p> Domino&rsquo;s filed its petition for writ of certiorari with the U.S. Supreme Court today, June 13, 2019, asking the Court to review and overturn the Ninth Circuit&rsquo;s decision which allowed a website accessibility lawsuit to proceed against Domino&rsquo;s. Domino&rsquo;s styled the question presented as &ldquo;Whether Title III of the ADA requires a website or mobile phone application that offers goods or services to the public to satisfy discrete accessibility requirements with respect to individuals with disabilities.&rdquo; See here for our report on the Ninth&rsquo;s Circuit decision, and here for a copy of the Petition. The Court will generally act on a petition within 6 weeks &ndash; Robles now has 30 days to file a response, then Domino&rsquo;s a reply, at which time the Justices will review and determine whether to entertain the appeal.<br /> <br /> <a href="https://www.adatitleiii.com/2019/06/dominos-files-petition-for-us-supreme-court-review-of-unfavorable-website-access-decision/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA061319-LE Half Baked: Illinois Legislature Includes Some Employer Protections in New Recreational Cannabis Law – But Beware the Traps https://www.seyfarth.com:443/publications/MA061319-LE Thu, 13 Jun 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis</em></strong><em>: Illinois Governor J.B. Pritzker is expected to sign a comprehensive recreational cannabis bill.&nbsp; While the &ldquo;Cannabis Regulation and Tax Act&rdquo; contains extensive provisions preserving an employer&rsquo;s right to ban cannabis and otherwise have a &ldquo;zero tolerance&rdquo; substance abuse policy, there are potential traps for the unwary and, thus, employers should carefully consider how the new law will impact their existing substance abuse and drug testing policies and procedures.&nbsp;</em></p> <p> Across the country, states are moving to legalize medical and recreational cannabis.&nbsp; In states that legalize recreational cannabis, employers and drug testing services have seen significant increases in positivity rates for cannabis metabolites.&nbsp; Wider cannabis use will require employers to take action to ensure safe work environments for their employees, especially in safety sensitive settings. &nbsp;Drug policies must be updated and must address discrimination concerns. &nbsp;To that end, we are closely monitoring new forms of discrimination claims from medical cannabis users and regarded-as disabled employees.&nbsp; See our <a href="https://www.blunttruthlaw.com/2019/03/arizona-federal-judge-enters-judgment-for-terminated-employee-high-levels-in-positive-drug-test-insufficient-to-show-impairment-from-marijuana/">recent blog</a> concerning a related Arizona court decision.&nbsp; We also are monitoring what appears to be a new trend in states and localities expressly restricting employer use or consideration of positive test results for cannabis in pre-employment situations, as we reported has occurred in <a href="https://www.blunttruthlaw.com/2019/05/new-york-city-bans-pre-employment-marijuana-tests/#more-2745">New York City</a> and <a href="https://www.seyfarth.com/publications/OMM061019-LE">Nevada</a>.</p> <p> <strong>Illinois&rsquo; Cannabis Regulation and Tax Act</strong></p> <p> The Illinois legislature has just taken the route of full legalization of recreational cannabis.&nbsp; On May 31, 2019, it approved House Bill 1438, which will create the &ldquo;Cannabis Regulation and Tax Act.&rdquo;&nbsp; That same day, Illinois Governor Pritzker tweeted that he intends to sign the Act.</p> <p> The Act provides, among many other things, that effective January 1, 2020, Illinois residents 21 years of age or older may legally possess up to 30 grams of cannabis flower, no more than 500 milligrams of THC contained in cannabis-infused products, and 5 grams of cannabis concentrate. Non-Illinois residents will be able to legally possess 15 grams of cannabis flower, no more than 250 milligrams of THC in cannabis-infused product, and 2.5 grams of cannabis concentrate.&nbsp; Permitted cannabis purchases must be made from licensed cannabis dispensaries.</p> <p> The House Bill also provides an excise tax imposed on purchasers for the privilege of using cannabis.&nbsp; The rate of the excise tax is either 10%, 20% or 25% of the purchase price, depending on whether the sale is for a &ldquo;cannabis-infused product&rdquo; and the level of delta-9-tetrahydrocannabinol (THC) (i.e., strength).&nbsp;</p> <p> <strong>The Act&rsquo;s Employment Provisions</strong></p> <p> Relevant to employers is Section 10-50, which states that the Act is not to be construed as prohibiting an employer from &ldquo;adopting reasonable zero tolerance or drug free workplace policies, or employment policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace or while on call provided that the policy is applied in a nondiscriminatory manner.&rdquo; &nbsp;The Act does not require employers to permit an employee to be under the influence of or use cannabis in the employer&rsquo;s workplace or while performing the employee&rsquo;s job duties or while on call. Employers also retain the right to discipline an employee or terminate their employment if they violate the employer&rsquo;s employment policies or workplace drug policy.&nbsp; While the Act defines the term &ldquo;workplace&rdquo; to include the &ldquo;employer&rsquo;s premises&rdquo; (any building, real property, and parking area under the control of the employer or area used by an employee while in performance of the employee&rsquo;s job duties, and vehicles (leased, rented or owned)), it goes on to state that &ldquo;workplace&rdquo; may be further defined by the employer&rsquo;s policy so long as the policy is consistent with the Act.</p> <p> The Act provides guidance to employers in determining whether an employee is impaired by or under the influence of cannabis while working.&nbsp; Specifically, an employer can meet this showing if it has a good faith belief that an employee manifests specific and articulable symptoms while working that decrease or lessen the employee&rsquo;s performance of their job including:</p> <ul> <li> symptoms of the employee&#39;s speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery;</li> <li> disregard for the safety of the employee or others, or involvement in any accident that results in serious damage to equipment or property;</li> <li> disruption of a production or manufacturing process; or</li> <li> carelessness that results in any injury to the employee or others.</li> </ul> <p> <br /> The list is non-exhaustive, which leaves room for an employer to rely on other indicia of impairment.&nbsp; The Act does not regulate drug testing and, thus, <em>additional</em> indicia might include a positive test result for cannabis if the employee is sent for a reasonable suspicion test.&nbsp; However, given that cannabis can remain in a person&rsquo;s system for a few weeks, and the Act&rsquo;s standard for impairment requires facts showing an issue with an employee&rsquo;s performance, most employers cannot take action against a current employee based solely on a positive test result where no other indicia of impairment exists.</p> <p> If an employer disciplines or terminates an employee because they are under the influence of or impaired by cannabis, the employer must provide the employee a <em>reasonable opportunity</em> to contest the basis of the determination.&nbsp; Exactly what this means remains to be seen.&nbsp;</p> <p> <strong>No Private Right of Action</strong></p> <p> The Act expressly states that employees do not have a private right of action against an employer for:</p> <ul> <li> subjecting an employee or applicant to reasonable drug and alcohol testing under the employer&#39;s workplace drug policy, including an employee&#39;s refusal to be tested or to cooperate in testing procedures;</li> <li> disciplining the employee or terminating employment, based on the employer&#39;s good faith belief that an employee used, possessed, was impaired by or was under the influence of cannabis in violation of the employer&#39;s workplace policies while in the employer&#39;s workplace, performing the employee&#39;s job duties or while on call; and</li> <li> injury, loss or liability to a third party if the employer neither knew nor had reason to know that an employee was impaired.</li> </ul> <p> <br /> <strong>Interplay with the Illinois Right to Privacy in the Workplace Act</strong></p> <p> Employers should also bear in mind that the Act designates recreational cannabis used in compliance with the Act as a &ldquo;lawful product&rdquo; subject to the protections against discrimination provided under the Illinois Right to Privacy in the Workplace Act.&nbsp; This means that an employee who lawfully uses cannabis outside of work and is not impaired by or under the influence of cannabis during working hours (while on duty or while on call) should generally not be subject to adverse employment action on that basis alone.&nbsp; Thus, employers should carefully consider whether to test for cannabis or consider a positive test result for the drug in pre-employment situations given that job applicants are neither on duty nor on call. In terms of drug tests during employment (e.g., reasonable suspicion and post-accident), while the Act leaves open the possibility of relying on a positive cannabis test result as <em>additional</em> indicia of impairment, cannabis can remain in the system for weeks and, thus, employers should exercise caution and work with employment counsel before taking action against incumbent employees based solely on a positive cannabis test result.&nbsp; Employers also should consider training their managers on the signs of impairment and, if an employee is referred for any drug test, steps to take if the employee tests positive for cannabis. &nbsp;&nbsp;</p> <p> <strong>Regulated Employers and Government Contractors</strong></p> <p> Notably, cannabis remains a Schedule I controlled substance under federal law and, thus, illegal, which might put some Illinois employers in a difficult situation.&nbsp; Fortunately, the Act does not require employers to ignore their obligations under federal law, expressly stating that it is not to be construed to &ldquo;interfere with any federal, State, or local restrictions on employment including, but not limited to, the United States Department of Transportation regulation 49 CFR 40.151(e)&rdquo; nor does it impact an employer&rsquo;s ability to &ldquo;comply with federal or State law or cause it to lose a federal or State contract or funding.&rdquo;&nbsp; It is therefore likely the Act will be interpreted to allow employers to continue to maintain employment policies prohibiting any cannabis use where necessary to comply with applicable federal or state law.&nbsp; However, it is not certain whether such policies would result in a violation of the Illinois Right to Privacy in the Workplace Act.</p> <p> <strong>Next Steps for Employers</strong></p> <p> The Act states that &ldquo;cannabis should be regulated in a manner similar to alcohol.&rdquo;&nbsp; But, what does this mean for employers?&nbsp; Cannabis, unlike alcohol, is still illegal under federal law and signs of cannabis use or impairment are not as easily detectable as alcohol impairment.&nbsp; Moreover, it also is easier to prove alcohol impairment with an alcohol test.&nbsp; The same cannot be said for a drug test given that cannabis can remain in the system for several weeks.</p> <p> The new law does not strip employers of the right to conduct drug tests pursuant to a drug testing or substance abuse policy and, in fact, expressly preserves it. Yet, Illinois employers should:</p> <ul> <li> review and, if necessary, revise their current policies and practices in advance of the January 1, 2020 deadline;</li> <li> determine whether to include cannabis or consider the drug in pre-employment drug tests; and</li> <li> train their managers on how to document and recognize the signs of use and impairment and steps to take if an employee tests positive for cannabis after a reasonable suspicion or post-accident drug test.&nbsp;</li> </ul> <p> <br /> Employers should be vigilant in documenting all signs and evidence of potential impairment, including any violations of occupational safety rules.&nbsp; At the end of the day, employers will have to walk a fine line of balancing their drug policy objectives against applying that policy in a nondiscriminatory manner. &nbsp;Further, employers will need to track the forthcoming regulations closely, and may need to further revise their policies to accommodate unexpected interpretations of the law.</p> https://www.seyfarth.com:443/publications/PM061319-LE Seyfarth Shaw Policy Matters Newsletter - June 13, 2019 https://www.seyfarth.com:443/publications/PM061319-LE Thu, 13 Jun 2019 00:00:00 -0400 <p> <strong>House Ed &amp; Labor Addresses FLSA Salary Level.</strong>&nbsp; In a sometimes contentious <a href="https://edlabor.house.gov/hearings/restoring-the-value-of-work-evaluating-dols-efforts-to-undermine-strong-overtime-protections">hearing</a> earlier this week, the Subcommittee on Workforce Protections reviewed the Department of Labor&#39;s proposed salary increase to thew hite collar exemption threshold.&nbsp; In addition, the Subcommittee <a href="https://edlabor.house.gov/imo/media/doc/AA OS 061219.pdf">chair</a> and several other members of the Majority advocated for the Restoring Overtime Pay Act (<a href="https://www.congress.gov/bill/116th-congress/house-bill/3197?q=%7B%22search%22%3A%5B%22hr%203197%22%5D%7D&amp;s=1&amp;r=1">H.R. 3179</a>), which would set the salary level at nearly $51,000 (i.e., higher than the court-enjoined level set in 2016) with automatic updates every three years.&nbsp; Regardless of what happens in the House, the bill is not likely to get through the Senate.&nbsp; The battle over the proper salary level, however, will continue.&nbsp; Notably, both Senator Alexander, Chair of the Senate HELP Committee and Rep. Foxx, Rnaking Republican of the House Education and Labor Committee, <a href="http://marketing.seyfarth.com/rs/emsdocuments/Final MEP stakeholder sign on letter.pdf">have written in support of the rule</a>.</p> <p> <strong>POWADA, Workplace Violence Protection Act, and Multiemployer Pensions Measure Clear House Committee.</strong>&nbsp; A busy House Education and Labor Committee also held a markup this week on the Protecting Older Workers Against Discrimination Act (POWADA) (H.R. 1230), the Workplace Violence Prevention for Health Care and Social Service Workers Act (H.R. 1309), and the Rehabilitiation for Multiemployer Pensions Act (H.R. 397). As discussed previously, POWADA would reverse a 2009 Supreme Court decision on mixed motive discrimination under the ADEA.&nbsp; Republicans Stefanik and Grothman supported final passage of the bill.&nbsp; H.R. 1309 would require OSHA to implement a safety standard requiring health care and social service providers to implement workplace violence programs.&nbsp; Republicans Roe and Stefanik supported final passage.&nbsp; The hugely expensive multiemployer pension bill would create an agency within the Treasury Department to issue loans to failing plans.&nbsp; No Republicans supported the ill which was brought up with little notice and without any opportunity for debate, much less amendments.&nbsp; The business community <a href="http://marketing.seyfarth.com/rs/emsdocuments/5.21.19 - Joint Overtime Rule Comment Letter.pdf">wrote a lengthy letter</a> detailing the severe problems facing the multiemployer system, but did not expressly oppose the bill.&nbsp; While all these bills will likely be brought to the House Floor for consideration, their future, as currently written, in the Senate is doubtful.</p> <p> <strong>Regular Rate Comment Period Ends; Joint Employment Up Next.&nbsp;</strong> The Department of Labor has had a busy spring, with three proposed regulations out of the Wage &amp; Hour Division alone.&nbsp; The first, on the <a href="https://www.regulations.gov/document?D=WHD-2019-0001-0001">exempt status salary threshold</a>, was the subject of the hearing described above.&nbsp; The second, a more technical exercise regarding the proper overtime rates of pay for nonexempt employees, saw its comment period close yesterday with a scant <a href="https://www.regulations.gov/docketBrowser?rpp=25&amp;so=DESC&amp;sb=commentDueDate&amp;po=25&amp;dct=PS&amp;D=WHD-2019-0002">77 comments received</a>.&nbsp; The final proposal &ndash; one addressing joint employment under the FLSA &ndash; is starting to gather steam.&nbsp; Approximately two weeks out from the comment deadline, well over 7500 comments have been submitted to the <a href="https://www.regulations.gov/docket?D=WHD-2019-0003">docket</a>.</p> <p> <strong>Marijuana Laws Sprouting Up Everywhere.</strong>&nbsp; Earlier this month, Nevada became the first state to restrict an employer&#39;s use of pre-employment cannabis tests.&nbsp; For more, see <a href="https://www.seyfarth.com/publications/OMM061019-LE">Seyfarth&#39;s Client Alert</a>.&nbsp; Illinois, meanwhile, is on the path to legalizing recreational cannabis, but includes some employer protections in its legislation, which is expected to be signed by the governor.&nbsp; For more, see <a href="https://www.seyfarth.com/publications/MA061319-LE">Seyfarth&#39;s Client Alert</a>.</p> https://www.seyfarth.com:443/publications/EL061319 Use It or Lose It: Supreme Court Rules that Failure to Exhaust Defense Must be Prompt https://www.seyfarth.com:443/publications/EL061319 Thu, 13 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: New decision from the Supreme Court ruled that Title VII&rsquo;s requirement that plaintiffs file with the EEOC or other state agencies is a non-jurisdictional claim-processing rule, which means it can be forfeited if a defendant waits too long to raise the objection.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/use-it-or-lose-it-supreme-court-rules-that-failure-to-exhaust-defense-must-be-prompt/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WSE061319 Half Baked — Illinois Legislature Includes Some Employer Protections in New Recreational Cannabis Law, But Creates Potential Liabilities https://www.seyfarth.com:443/publications/WSE061319 Thu, 13 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Illinois Governor J.B. Pritzker is expected to sign a new recreational cannabis bill, which contains extensive provisions regarding the extent of an employer&rsquo;s right to ban and otherwise discipline employees for cannabis use.<br /> <br /> <a href="https://www.environmentalsafetyupdate.com/cannabis/half-baked-illinois-legislature-includes-some-employer-protections-in-new-recreational-cannabis-law-but-creates-potential-liabilities/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP061319 California To Protect Pay Equity Reporting Requirements From Federal Challenge? https://www.seyfarth.com:443/publications/CP061319 Thu, 13 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: The California state assembly is set to vote on Senate Bill 171, a state analogue to the federal EEO-1 report, which would require employers with 100 or more employees to submit annual pay data reports to the Department of Fair Employment and Housing, broken down by gender, race, ethnicity, and job category.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/06/13/california-to-protect-pay-equity-reporting-requirements-from-federal-challenge/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/RS061319-LE Regulatory Spring: Rulemaking by the Wage & Hour Division - June 13, 2019 https://www.seyfarth.com:443/publications/RS061319-LE Thu, 13 Jun 2019 00:00:00 -0400 <p> <strong>A Request for Feedback on the DOL&rsquo;s Proposed Joint Employer Standard</strong><br /> <br /> In our prior installment of <em>Regulatory Spring</em>, we walked through the DOL&rsquo;s proposed rule to update the FLSA&rsquo;s standard for joint employer status. This week, we are asking for your feedback on the proposed rule via the short survey linked below.<br /> <br /> The DOL is accepting comments on the proposed rule until June 25, 2019. Seyfarth intends to submit comments to convey, confidentially, the feedback and sentiments of employers throughout the U.S. economy. Your feedback is crucial to our ability to provide the most insightful and actionable feedback to the DOL.</p> <p> <a href="https://www.surveymonkey.com/r/BZD32R9"><strong>Take the Survey Here</strong></a><br /> <br /> As always, please do not hesitate to reach out to us directly via email at <a href="mailto:regulatoryspring@seyfarth.com">regulatoryspring@seyfarth.com</a>.</p> https://www.seyfarth.com:443/publications/OMM061219-LE BREAKING NEWS!!! Massachusetts Governor And Legislative Leaders Agree To 3-Month Delay Of July 1st Paid Family And Medical Leave Contributions https://www.seyfarth.com:443/publications/OMM061219-LE Wed, 12 Jun 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis:</strong> Yesterday, the Massachusetts Governor, Senate President and House Speaker issued a joint statement confirming that they have agreed to adopt a 3-month delay to the start of required contributions under the Massachusetts Paid Family and Medical Leave (PFML) Law and to make technical changes to the statute to help improve program design.</em></div> <div> &nbsp;</div> <div> The Legislature will need to advance a bill to effectuate these amendments to the statute. At this point, we know that the bill will provide for a 3-month delay to the July 1st start date of required contributions to the PFML program. The bill will also adopt technical changes to clarify program design.</div> <div> &nbsp;</div> <div> We do not yet know whether the Department of Family and Medical Leave (DFML) will delay the June 30th deadline for the mandatory notices to be distributed to employees and covered contract workers. Stay tuned on that issue.</div> <div> &nbsp;</div> <div> It appears that the contribution rate will increase from 0.63% to 0.75% to make up for the 3 months of lost contributions, while the January 1, 2021 and July 1, 2021 effective dates for the commencement of leave benefits will remain the same.</div> <div> &nbsp;</div> <div> The other proposed technical amendments would provide clarity on issues such as intermittent leave and the definition of &ldquo;serious health condition.&rdquo; The clarifying amendments will also align core principles of the Massachusetts PFML Law with the federal Family and Medical Leave Act (FMLA).</div> <div> &nbsp;</div> <div> The Associated Industries of Massachusetts (AIM), the Greater Boston Chamber of Commerce and numerous supporters played an integral role in leading the push for this delay. We will keep you posted on any developments.</div> <div> &nbsp;</div> <div> For our prior reports on the PFML Law and the proposed regulations, you may refer to any of our prior alerts below:</div> <ul> <li> <a href="https://www.seyfarth.com/publications/OMM053119-LE">Breaking News&mdash;Massachusetts DFML Clarifies That Businesses Do Not Have To Provide Written Notice To 1099 Contractors Where Such Contractors Make Up 50% Or Less Of Their Massachusetts Workforce</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/OMM051019-LE2">Breaking News &ndash; Massachusetts DFML Confirms That Employers May Be Approved Now For Private Plans That Do Not Provide Paid Leave Benefits Until 2021</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/OMM050119-LE">Hot Off The Presses: Massachusetts DFML Just Announced Extension Of May 31st Notice Deadline And June 30th Exemption Application Deadline</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/MA043019-LE">Massachusetts DFML Releases Private Plan Exemption Application And Guidance; Applications Due By June 30, 2019</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/OMM041819-LE2">Massachusetts DFML Releases Template Paid Family And Medical Leave Notices And Sets May 31, 2019 Distribution Deadline</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/MA040219-LE2">Massachusetts Releases Updated Proposed Paid Family And Medical Leave Regulations&mdash;What You Need To Know</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/MA032719-LE">Massachusetts DFML Releases New Guidelines Providing Clarifying Information And Other Helpful Resources On Paid Family And Medical Leave In Advance Of Friday&rsquo;s Issuance Of The Proposed Regulations</a><br /> &nbsp;</li> <li> <a href="https://www.seyfarth.com/publications/MA062218-LE">Massachusetts Legislature Passes Bill Providing $15 Minimum Wage And Paid Family And Medical Leave: What Employers Need To Know</a></li> </ul> <div> &nbsp;</div> https://www.seyfarth.com:443/news/cisnerosdc061219 Alonso Cisneros Joins Seyfarth’s Real Estate Team in Washington, D.C. https://www.seyfarth.com:443/news/cisnerosdc061219 Wed, 12 Jun 2019 00:00:00 -0400 <p> WASHINGTON, D.C. -- (June 12, 2019) -- Seyfarth Shaw LLP announced today the arrival of partner Alonso J. Cisneros to the Real Estate department and Structured &amp; Real Estate Finance practice group in Washington, D.C. Cisneros was previously with Troutman Sanders LLP, where he was a member of its Multifamily Housing Finance group in Washington, D.C., focused on loan originations and servicing transactions.</p> <p> Cisneros&rsquo; practice concentrates on advising mortgage banking clients in the origination, sale and servicing of loans sold to government-sponsored enterprises (GSEs) in the secondary mortgage market. He regularly counsels lenders in Fannie Mae&rsquo;s Delegated Underwriting and Servicing (DUS) product line and Freddie Mac&rsquo;s Optigo Seller/Servicer program, and has a deep background with many other agency loan products.</p> <p> &ldquo;Alonso is a terrific lawyer with an outstanding track record managing a variety of transactions, including GSE-related lending work,&rdquo; said Paul Mattingly, chair of Seyfarth&rsquo;s Real Estate department. &quot;His knowledge of GSEs is a tremendous asset and blends well with our strategic plan to expand the firm&rsquo;s national lending capabilities.&rdquo;</p> <p> Prior to entering law school, Cisneros served in the United States Marine Corps as a Legal Officer and an Air Defense Control Officer at the Marine Air Control Squadron One in Yuma, Arizona. He was then stationed in the Fourth Civil Affairs Group in Washington, D.C. as an Assistant Training and Operations Officer and a Civil Affairs Officer.</p> <p> &ldquo;As we continue to build our real estate team in D.C., we are excited to welcome a lawyer like Alonso. He brings a diverse and successful lending practice which provides remarkable value to both our local and national clients,&rdquo; said Robert Bodansky, managing partner of Seyfarth&rsquo;s Washington, D.C. office. &ldquo;Alonso&rsquo;s addition is another example of our office&rsquo;s commitment to attracting top legal minds in the region.&rdquo;</p> <p> Cisneros earned a J.D. from the George Washington University Law School and his B.S., in Mathematics, from the University of Florida. Following law school, he worked as a Law Clerk for the Honorable Gerald Bruce Lee, U.S. District Court for the Eastern District of Virginia.</p> <p> <strong>About Seyfarth Shaw LLP </strong></p> <p> Seyfarth Shaw has more than 850 attorneys in 15 offices providing a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate and real estate. Seyfarth&rsquo;s clients include over 300 of the Fortune 500 companies and reflect virtually every industry and segment of the economy. A recognized leader in delivering value and innovation for legal services, Seyfarth has earned numerous accolades from a variety of highly respected industry associations, consulting firms and media.</p> <p> Contacts:</p> <p> Brian Kiefer, Director of Communications, (312) 460-6401, <a href="mailto:bkiefer@seyfarth.com ">bkiefer@seyfarth.com </a></p> <p> Martin Grego, Senior Public Relations Manager, (312) 460-6659, <a href="mailto:mgrego@seyfarth.com">mgrego@seyfarth.com</a></p> https://www.seyfarth.com:443/news/weisscasinolife061219 Philippe Weiss quoted in Casino Life https://www.seyfarth.com:443/news/weisscasinolife061219 Wed, 12 Jun 2019 00:00:00 -0400 <p> Philippe Weiss was quoted in a June 12 story from Casino Life, &quot;Legalized sports betting in Illinois and other states &ndash; perspective from workplace consultancy Seyfarth Shaw at Work.&quot; You can read the <a href="https://www.casinolifemagazine.com/news/legalized-sports-betting-illinois-and-other-states-%E2%80%93-perspective-workplace-consultancy-seyfarth">full article here</a>.</p> https://www.seyfarth.com:443/news/devatashrm061219 Pamela Devata quoted in SHRM https://www.seyfarth.com:443/news/devatashrm061219 Wed, 12 Jun 2019 00:00:00 -0400 <p> Pamela Devata was quoted in a June 12 story from SHRM, &quot;FCRA&rsquo;s Seven-Year Reporting Window Begins with Charge, Not Dismissal.&quot; Devata said that at issue in the case was the appropriate measuring period for reporting certain criminal records that did not result in a conviction. You can read the <a href="https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/fcra-seven-year-reporting-window-begins-with-charge-not-dismissal.aspx">full article here</a>.</p> https://www.seyfarth.com:443/news/dolinshrm061119 Kenneth Dolin quoted in SHRM https://www.seyfarth.com:443/news/dolinshrm061119 Tue, 11 Jun 2019 00:00:00 -0400 <p> Kenneth Dolin was quoted in a June 11 story from SRHM, &quot;Is California&rsquo;s Law Requiring Union Access to Agricultural Worksites Constitutional?&quot; Dolin said that if the 9th Circuit&#39;s decision stands, those employers will be required to give unions significant access to their private property multiple times a day for up to 120 days a year, even absent any showing of a special need for such access. You can read the <a href="https://www.shrm.org/ResourcesAndTools/legal-and-compliance/state-and-local-updates/Pages/California-Law-Union-Access-to-Agricultural-Worksites-Constitutional.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/CCD061119 Ninth Circuit Rules That Varying State Laws Do Not Defeat Predominance Requirement In Class Action Settlement Context https://www.seyfarth.com:443/publications/CCD061119 Tue, 11 Jun 2019 00:00:00 -0400 <br /> <br /> <p> <a href="https://www.consumerclassdefense.com/2019/06/ninth-circuit-rules-that-varying-state-laws-do-not-defeat-predominance-requirement-in-class-action-settlement-context/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL061119 Illinois Employers May Face Liability for Workplace Violence Against Women Under Gender Violence Act https://www.seyfarth.com:443/publications/EL061119 Tue, 11 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: New Decision from Illinois Court of Appeals holds that employer can be liable for workplace violence under Illinois Gender Violence Act.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/illinois-employers-may-face-liability-for-workplace-violence-against-women-under-gender-violence-act/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT061119 USPTO Allows Hemp-related Trademarks on or after December 20, 2018 https://www.seyfarth.com:443/publications/TBT061119 Tue, 11 Jun 2019 00:00:00 -0400 <p> Federal trademark registrations are now possible to obtain for some hemp-related trademarks. The U.S. Patent and Trademark Office&rsquo;s (USPTO) recent guidance, Examination Guide 1-19 &ldquo;Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill&rdquo; issued on May 2, 2019 (Guide 1-19), clarifies the procedure for examining applications for marks covering cannabis and cannabis-derived goods and services in light of the Agriculture Improvement Act of 2018, Pub. L. 115-334 (also known as the &ldquo;2018 Farm Bill&rdquo;). Guide 1-19 does not change the requirements for obtaining a trademark registration, but instead explains that hemp-related federal trademark registrations (in certain instances) are not barred as a matter of law.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/uspto-allows-hemp-related-trademarks-on-or-after-december-20-2018/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/ADA061119 SDNY DISMISSES WEBSITE ACCESSIBILITY LAWSUIT BASED ON MOOTNESS AND LACK OF PERSONAL JURISDICTION https://www.seyfarth.com:443/publications/ADA061119 Tue, 11 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: A SDNY judge dismissed a website accessibility lawsuit finding that the company mooted the allegations in the complaint by remediating the accessibility barriers and that the Court lacked personal jurisdiction since the company does not transact business in New York.<br /> <br /> <a href="https://www.adatitleiii.com/2019/06/sdny-dismisses-website-accessibility-lawsuit-based-on-mootness-and-lack-of-personal-jurisdiction/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA061119-LIT New Jersey Legislation Extends Statute Of Limitations To Bring Child Sex Abuse Claims https://www.seyfarth.com:443/publications/MA061119-LIT Tue, 11 Jun 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis: </strong>The State of New Jersey passed legislation which significantly extends the statute of limitations for sexual abuse claims and creates a two-year filing window for sexual abuse claims that would otherwise be time-barred by the statute of limitations.&nbsp;</em></div> <div> &nbsp;</div> <div> New Jersey has just become the latest state to pass legislation that expands the statute of limitations for filing civil sex abuse lawsuits, giving victims more time to sue their accusers and organizations that happen to be affiliated with them.&nbsp;</div> <div> &nbsp;</div> <div> Described as an &ldquo;Act concerning certain civil actions alleging sexual abuse,&rdquo; Senate measure S477 passed the State Senate with a 32 to 1 vote on March 14, 2019.&nbsp; On March 25, 2019, the Bill then passed the New Jersey State Assembly with a 71-0 vote with five abstentions.&nbsp; On May 13, 2019, the Bill was signed into law by New Jersey Governor Phil Murphy who had expressed support for the proposed legislation and vowed to sign it into law.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> This controversial legislation was at least a decade in the making after facing vigorous opposition from religious groups. The new legislation significantly expands the ability of individuals to pursue civil claims against their attackers and the entities that allegedly allowed the assaults to occur.&nbsp; Previously, New Jersey allowed minor victims of sexual abuse only two years from the later of the date of their eighteenth birthday, or the date the victim learned of their injury and its causal relationship to the sexual misconduct, to file suit. The Act now allows child victims of childhood sexual abuse to file lawsuits up until the time they turn 55 years old, or seven years from the date they became aware of the abuse, whichever is later.&nbsp; It also allows adult victims of sexual abuse, whatever their age, to bring suit within seven years from the time of their discovery of the abuse.&nbsp; It also gives victims who were previously barred from filing claims, because the statute of limitations had lapsed, a two-year window to now file their claims.&nbsp; The effective date of the Act is December 1, 2019.</div> <div> &nbsp;</div> <div> Importantly, the Act also now permits lawsuits against organizations that were historically immune from suit by amending the Charitable Immunity Act&nbsp; N.J.S.A. 2A:53A-7 to expose nonprofit organizations to retroactive liability for willful, wanton or grossly negligent acts resulting in sex abuse.&nbsp; The Act also retroactively applies an exception to the Charitable Immunity Act so that nonprofit organizations can face liability for acts of simple negligence in the hiring, supervision or retention of an employee agent or server for servant that led to the sexual abuse against a minor.</div> <div> &nbsp;</div> <div> The Act also creates a carve-out to the New Jersey Tort Claims Act N.J.S.A. 59:1-1, stripping public entities of immunity from sexual abuse lawsuits, such that they can now be held liable as if they were private organizations.&nbsp; This means public schools, and not-for-profit private schools, will now find themselves named as defendants in sex abuse claims, in what is a striking departure from well-established New Jersey law.&nbsp;</div> <div> &nbsp;</div> <div> However, the Act has certain limitations.&nbsp; Notably, it will not permit lawsuits alleging child sex abuse to proceed as a class action, or be settled privately as a class, a limitation which may make any lawsuits filed be more manageable to administer, but which will require many victims to come forward and file individual lawsuits seeking redress.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Much like New York, which passed similar legislation in early 2019 entitled &ldquo;The Child Victim Act,&rdquo; the New Jersey legislation was passed in the context of the newfound momentum for victim&rsquo;s rights stemming from the #MeToo Movement, the detailed widespread sexual abuse of the Catholic Church in New York, New Jersey, and in a Grand Jury Report in neighboring Pennsylvania which accused 300 clergy members of sexual assault, where certain of these priests resided in New Jersey.&nbsp;</div> <h3> What Does This Mean for Your Institution?</h3> <div> Simply stated, the ramifications of the legislation can be enormous.&nbsp; Any educational, religious or civic organization that cares for children, such as a school camp or day care facility, will be subject to this new legislation.&nbsp; As a result, a significant number of victims may now come forward, recognizing that they have broad-based legislative and public support, and will not face the immediate dismissal of their claims on statute of limitations grounds.&nbsp; While many wrongdoers have gone to their graves without proper punishment, their employers will be left to answer for their wrongdoing, accused of turning a blind eye to these victims when in their care, and negligently supervising or retaining the wrongdoer.</div> <div> &nbsp;</div> <div> As an institution providing services to children, your organization may be subject to a public lawsuit even if it is currently unaware of any historical issues.&nbsp; The defense of such cases is often extremely difficult as memories have faded and witnesses have disappeared or died.&nbsp; Evidence such as student records, medical records, witnesses to the abuse, individuals who might have received the victim&rsquo;s outcry, and even the wrongdoers themselves, may be long gone.&nbsp; In many respects, the lack of any evidence, other than the statement of the victim, can make an institution particularly vulnerable when such claims are filed.&nbsp;</div> <div> &nbsp;</div> <div> The new legislation does not alter the burden of proof as a civil case: liability can still be established by a mere preponderance of the evidence.&nbsp;</div> <div> &nbsp;</div> <div> The creation of a two-year window to assert claims that previously were, or would have been, dismissed under the former statute will likely open the floodgates as to the initiation of child sex abuse cases for conduct that occurred decades ago.&nbsp; It will be extremely difficult to predict how many people chose to initiate lawsuits during this &ldquo;look back&rdquo; period. In some cases, institutions unable to assess what might be an overwhelming horizon of liability may face financial uncertainty or distress.</div> <h3> What Are the Next Steps?</h3> <div> Your institution will have until December 1, 2019 to best prepare for the Act&rsquo;s impending impact. While an alleged victim will now have a two year window in which to revive his or her claim, the victim cannot actually commence their lawsuit until the effective date.&nbsp; Your institution&rsquo;s consideration of the ramifications of the law is a necessary and critical first step in addressing this potential problem.&nbsp; Take this time to prepare before the expected floodgates open.&nbsp;</div> <h3> Determine Your Potential Risk:</h3> <ul> <li> Have you ever received a complaint or other information suggesting sexual abuse may have occurred? Have you dealt with such information in a reasonable and prudent manner? If your institution had no knowledge of the abuse in real time, it should not be liable for being willful, wanton, or negligent supervision of an abuser in its employ.&nbsp;<br /> &nbsp;</li> <li> If you are aware of possible victims, or rumors of possible victims that may come forward, what steps have to you taken to investigate those claims? Who might potential plaintiffs be? What is their risk tolerance for litigation?&nbsp; Now is the time to investigate those claims, and perhaps avoid a headline and a lawsuit.<br /> &nbsp;</li> <li> Are there lawsuits against your organization that were dismissed on statute of limitations grounds. Be aware that they may now be resurrected under the Act&rsquo;s provision allowing for such actions to be revived for a period of two years following the effective date.<br /> &nbsp;</li> <li> Does your institution have insurance policies that may be used to fund the defense or settlement of such claims?&nbsp; Are your carriers on notice of the potential ramifications to your organization?&nbsp; Do you still have copies of all applicable policies?&nbsp; Now is the time to find out.&nbsp; &nbsp;<br /> &nbsp;</li> <li> If lawsuits commence, do you still have access to supporting witnesses or relevant documents? Is the alleged abuser still alive? Is he/she still affiliated or with or employed by your institution? In short, is this a lawsuit you can defend?&nbsp;<br /> &nbsp;</li> <li> Consider what could be done now to address any concerns and avoid potential litigation. Conducting outreach to victims, offering truth and reconciliation efforts, perhaps even earmarking funds for counseling may be a good starting point. Consider the creation of a victims&rsquo; fund that can administer compensation to those victims that seek monetary relief but would rather not file a public lawsuit.&nbsp;</li> </ul> <h3> Conclusion</h3> <div> Sexual abuse of children has had lasting impacts in its victims in countless ways. The enactment of this sweeping legislation addresses the conduct in an attempt to stop its proliferation and compensate its victims. While your institution has a responsibility to the children it serves, it must also take reasonable and prudent steps to prepare itself to respond to any complaints or lawsuits that may now be brought. It needs to now consider allocation of resources and the extent to which funds can be used for today&rsquo;s objectives, while reserving funds to pay for the possibility of historical claims. These are not easy decisions to make and they require careful consideration. One thing is for certain however: the Act is now the law in New Jersey, which means that these cases will almost certainly be filed, and an institutional response will be required.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> Seyfarth Shaw would be happy to discuss these various ideas and alternatives with you in more detail, and share with you our collective wisdom.</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/WC061019 Ninth Circuit Rules That Varying State Laws Do Not Defeat Predominance Requirement In Class Action Settlement Context https://www.seyfarth.com:443/publications/WC061019 Mon, 10 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Satisfying Rule 23(b)(3)&rsquo;s predominance requirement is undoubtedly a challenge when it comes to a nationwide class. Among the many issues that arise is the extent to which varying state laws can impact whether questions of law or fact common to class members predominate over any questions affecting only individual members. In In Re Hyundai &amp; Kia Fuel Econ. Litig., No. 15-56014, 2019 WL 2376831 (9th Cir. June 6, 2019), after an en banc rehearing, the Ninth Circuit ruled that a district court did not abuse its discretion by failing to address varying state laws when granting class certification for settlement purposes. Drawing a distinction between class certification for litigation purposes and class certification for settlement purposes, the Ninth Circuit held that the variations in state law across the nationwide class did not defeat predominance.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/ninth-circuit-rules-that-varying-state-laws-do-not-defeat-predominance-requirement-in-class-action-settlement-context/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/MA061019-LIT Recent Developments In Securities Litigation: The “Event Driven” #MeToo Lawsuit https://www.seyfarth.com:443/publications/MA061019-LIT Mon, 10 Jun 2019 00:00:00 -0400 <div> The #MeToo movement has had an enormous impact on corporate America. Workplace harassment and sexual misconduct are not new concepts and have been the focus of litigation for many years. However, the power of the #MeToo has created new theories of liability extending beyond the usual employment claims of negligent retention and supervision and/or workplace discrimination typically brought by the alleged victim.&nbsp;</div> <div> &nbsp;</div> <div> A recent development stemming from #MeToo now allows improper workplace conduct to become the gravamen of new claims against the corporation. Notably, these claims are not brought by the victim, but by the corporation&rsquo;s shareholders.&nbsp;</div> <h3> A New Trend?&nbsp;</h3> <div> &ldquo;Event-driven&rdquo; securities litigation -- where negative events, instead of financial misstatements or omissions, trigger the filing of securities class actions or shareholder derivative lawsuits -- is not a new concept.&nbsp;However, the &ldquo;events&rdquo; giving rise to such claims has expanded with the advancement of the #MeToo movement, suggesting a trend worthy of note.<sup>1</sup>&nbsp;These suits fall into two categories: (1) derivative claims that corporate mismanagement of #MeToo issues caused a decrease of corporate value; or (2) securities fraud claims where a company&rsquo;s stock price dropped as a result of the corporation&rsquo;s conduct in dealing with #MeToo allegations and the accompanying negative publicity. Event-driven litigation, such as the #MeToo cases, have contributed to the overall recent increase in securities filings.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The first category of shareholders&rsquo; #MeToo actions allege a corporation&rsquo;s value was diminished due to corporate mismanagement of #MeToo allegations. What kind of corporate mismanagement is out there?&nbsp; Allegations include a company ignoring misconduct, a company&rsquo;s failure to sanction misconduct, and a failure to initiate appropriate safeguards against misconduct, all of which allowed a hostile work environment to thrive. Similarly, paying victims to remain silent through the use of nondisclosure agreements (&ldquo;NDA&rsquo;s), or approving generous severance packages to make wrongdoers go away quietly, may also be alleged as corporate mismanagement. Shareholders allege that when this corporate malfeasance is disclosed, the corporation experiences reputational harm and its stock loses value, giving rise to a derivative claim.&nbsp;</div> <div> &nbsp;</div> <div> The second category of shareholders&rsquo; #MeToo actions, securities fraud cases, are framed a little differently. These claims are brought under Section 10(b) of the Securities Exchange Act and rule 10(b)-5 promulgated thereunder and allege the company made materially false and misleading statements to the investing public. These lawsuits tend to follow a particular pattern: asserting that the corporation engaged in a cover up of the abuse, failed to take adequate steps when faced with allegations of abuse by key personnel, or failed to truthfully disclose what steps it did or did not take to deter, investigate or curb abuse after allegations of abuse became public. Alternatively, these lawsuits may allege that a company professed it had integrity, high ethical standards and sound internal policies, including a no tolerance policy for sexual misconduct, but did not uphold such standards. These cases allege that subsequent disclosure of the true facts, including that the company&rsquo;s purported ethical standards were not as rigorous as asserted, or that the officers and directors knew of such misconduct and did not take action, led to a stock price decline.<sup>2</sup></div> <div> &nbsp;</div> <div> As a result, public companies now find themselves, their boards and their senior management, as defendants in securities class actions or derivative actions. These claims are being filed with increasing frequency, and courts are letting them proceed.&nbsp;</div> <h3> The Problems At CBS</h3> <div> Take for example the putative class action for securities fraud brought by CBS shareholders against CBS and certain of its executives, including ex-CEO Leslie Moonves. The amended complaint, (&ldquo;AC&rdquo;) filed in February, received significant media attention.<sup>3</sup></div> <div> &nbsp;</div> <div> The AC alleges misrepresentations by CBS and its executives relating to their efforts to quash sexual harassment in the workplace. Add to that the allegations that Moonves, Joseph Iannelli the Chief Operating Officer, Lawrence Liding the Chief Accounting Officer, and Communications Director Guild Schwartz, collectively sold over 3.4 million shares of CBS stock, valued in excess of $200 million, to an unsuspecting public during the class period. Plaintiffs allege that the executives sold because they knew what the investors did not: that the allegations against Moonves were mounting. The AC further alleges that the failure to disclose these facts violated the antifraud provisions of the Securities Exchange Act. Specifically, it alleges that these top executives misrepresented compliance with internal anti-harassment policies, and hid the severity of the allegations against Moonves, TV journalist Charlie Rose, and others, which artificially inflated the value of CBS stock and caused investors to lose money when the stock price dropped as various allegations became public.</div> <div> &nbsp;</div> <div> The plaintiffs claim that CBS held itself out to have &ldquo;the highest standards of ethical and appropriate business actions&rdquo;, a &ldquo;zero tolerance policy for sexual harassment&rdquo; and a prohibition on &ldquo;discriminatory treatment including sexual harassment&rdquo;. Yet, after touting these values, allegations about Moonves&rsquo; proclivities and CBS&#39;s alleged widespread culture of harassment were exposed in detail over a period of months. The AC also references other examples of wrongdoing, including that CBS and its executives fostered a company-wide pattern of harassment and hostile work environment--one which was diametrically opposed to the company&rsquo;s public statements. Moreover, the company allegedly did not disclose the risk that Moonves would step down as CEO as the claims mounted against him, where he was represented to be a &ldquo;key executive&rdquo;. The AC further alleges that the company also failed to disclose significant settlements with female employees that had complained about mistreatment. These, and other alleged material omissions, came to light at various junctures over the class period leading to lawsuits. The alleged loss of stock value occurred after July 27th media reports that the New Yorker would publish an expos&eacute; discussing sexual misconduct by Moonves, an August 6, 2018 disclosure revealing more details of &ldquo;Moonves and CBS&rsquo; sexual misconduct,&rdquo; and another New Yorker expos&eacute; on September 9, 2018, where CBS announced that Moonves would be stepping down as the company&#39;s chairman and CEO, and its stock took another tumble.<sup>4</sup></div> <div> &nbsp;</div> <div> CBS and the individual defendants filed a motion to dismiss on April 12, 2019. They argue, <em>inter alia</em>, that CBS did not make any material misrepresentation or omissions, that allegations of &ldquo;company-wide&rdquo; harassment are too vague and conclusory to be actionable, that rumor and innuendo about Moonves are not statements of material fact and thus not violative of federal securities laws, nor that there is any statute or regulation &ldquo;expressly requiring the disclosures that plaintiffs claim defendants were obligated to make.&rdquo; They also argue failure to adequately allege scienter, as there are no plausible allegations of a motive to defraud, and a failure to adequately allege loss causation. Plaintiffs are yet to file an opposition brief.</div> <h3> What Should a Company Do Now to Avoid a Similar Fate?&nbsp;&nbsp;</h3> <div> Sophisticated plaintiffs lawyers now know that cases stemming from a #MeToo event can present a new basis to assert claims, and will utilize the precedent from cases that have survived motions to dismiss to draft new complaints. Knowing this, what steps should you consider doing to protect your company now?&nbsp;</div> <div> &nbsp;</div> <div> <strong>Company Considerations.&nbsp;</strong> What is the company disclosing and how can it be challenged? Simply, if the company is making public statements about its comprehensive policies and procedures as to sexual misconduct in the workplace, it needs to strictly enforce them. If the company will not, it is better to say nothing at all about its corporate culture.</div> <div> &nbsp;</div> <div> <strong>Board Considerations. </strong>Consider the board&#39;s role in preventing and responding to sexual harassment allegations. How and when does it become involved? Are its responses independent and reasonable, or a mere rubber stamp of management&rsquo;s actions? Is the board promptly advised of&nbsp; significant issues of misconduct, and if so, do they take decisive action to ensure the company is protected against the type of claims shareholders now can file when allegations of sexual abuse become known?&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> <strong>Compliance Programs.</strong> Look at company guidance. The company&rsquo;s compliance program&nbsp; must be reviewed regularly, updated as necessary, distributed at regular intervals, and enforced from the top down. Corporate counsel needs to ensure awareness of, and compliance with, federal and state laws, and with best practices generally. As new program requirements are rolled out, training should follow. Attention is needed to keep compliance documents contemporary and relevant.</div> <div> Internal Investigations. Consider conducting an internal investigation to identify not only actual allegations of sexual harassment, but also the less obvious rumors and innuendo, so as to identify and remedy these issues before lawsuits and reputational harms occur. At the very least, companies should conduct a fulsome investigation in response to all complaints of abuse or other red flags.&nbsp;</div> <div> &nbsp;</div> <div> <strong>Nondisclosure Agreements</strong>. In some jurisdictions, such as New York, New Jersey and California, the use of NDAs in settlements pertaining to sexual harassment and discrimination is restricted. Where they are permitted, carefully consider NDAs or confidentiality provisions, recognizing that such provisions may be perceived as buying silence of the alleged victim, and shielding the alleged perpetrator. It is prudent to review the law in your jurisdiction.</div> <div> &nbsp;</div> <div> It will be interesting to see if, and how, event driven litigation relating to #MeToo makes its way through the Courts, but taking defensive measures now, to guard against whatever that eventuality might be, is a step in the right direction.</div> <div> &nbsp;</div> <div> <hr /> <div> <span style="font-size:9px;">1&nbsp; These claims are often filed quickly after the event, with less investigation and witness involvement than the more traditional financial fraud cases.&nbsp; This haste may result in an inability to adequately allege scienter, resulting in successful motions to dismiss filed by defendants.&nbsp;&nbsp;</span></div> <div> <span style="font-size:9px;">2&nbsp; Both derivative claims and securities fraud claims have pleading challenges. Derivative claims need to plead demand futility with particularity.&nbsp; Claims under Rule 10(b)-5 must also be pled with particularity under Rule 9(b) and the PSLRA&rsquo;s heightened pleading standard. Companies are often successful in defending derivative claims on the basis of the pre-suit demand requirements and the business judgment rule.&nbsp; Companies are defending these securities class actions by claiming that their representations regarding the existence of good corporate governance are non-actionable puffery, do not impact the &ldquo;total mix&rdquo; of information available to investors, and that, in any event, there is no duty to disclose the alleged wrongdoing.&nbsp;</span></div> <div> <span style="font-size:9px;">3&nbsp; <em>See</em>, Amended Class Action Complaint <em>Samit v. CBS Corp.</em>, No. 1:18-CV-07796 (S.D.N.Y) filed February 13, 2019.&nbsp;</span></div> <div> <span style="font-size:9px;">4&nbsp; Other publicly traded companies, including news organizations, have experienced a similar plight of securities litigation stemming from #MeToo allegations. For example, on December 11, 2017, the shareholders of Liberty Tax, Inc. filed a derivative action in Delaware Chancery Court against the company and its former CEO alleging the CEO breached his fiduciary duties by diverting company assets to further his sexual relationships with female employees. As another example, on July 17, 2018, the shareholders of National Beverage Corporation, the company responsible for LaCroix sparkling water, filed a derivative action in the Southern District Court of Florida alleging the company made false and misleading statements regarding the former CEO&rsquo;s sexual harassment of pilots on corporate jets.</span></div> <div> &nbsp;</div> </div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/OMM061019-LE Nevada Becomes the First State to Restrict Employer Use of Pre-Employment Cannabis Tests https://www.seyfarth.com:443/publications/OMM061019-LE Mon, 10 Jun 2019 00:00:00 -0400 <div> <div> <em><strong>Seyfarth Synopsis:</strong> Following closely on the heels of a similar law in New York City, effective January 1, 2020, it will be unlawful for Nevada employers to reject a job applicant who tests positive for cannabis on a pre-employment drug test. While there is debate as to whether some medical and recreational cannabis laws, including in Maine, allow an employer to take action based on off-duty or off-premises cannabis use, when it comes to job applicants, Nevada law could not be more clear.</em></div> </div> <div> &nbsp;</div> <div> <strong>Nevada Assembly Bill 132</strong></div> <div> &nbsp;</div> <div> As we previously reported <a href="https://www.blunttruthlaw.com/2019/05/new-york-city-bans-pre-employment-marijuana-tests/#more-2745">here</a>, New York City employers will no longer be able to require job applicants to submit to a cannabis test as a condition of employment. There are certain exceptions to the New York City law, including pre-employment drug testing for, among others, people applying to work in certain construction jobs and driver applicants subject to Department of Transportation drug and alcohol testing regulations (Part 40).</div> <div> &nbsp;</div> <div> Nevada quickly followed suit. On June 5, 2019, Governor Steve Sisolak signed Assembly Bill 132, which makes it unlawful for any Nevada employer to fail or refuse to hire a prospective employee because the prospective employee submitted to a blood, urine, hair, or oral fluids drug test and the results of the test revealed the presence of cannabis.</div> <div> &nbsp;</div> <div> The law also provides that if an employer requires an employee to submit to a screening test within the first 30 days of employment, the employee shall have the right to submit to an additional screening test, at his or her own expense, to rebut the results of the initial screening test. The employer shall accept and give appropriate consideration to the results of the second screening test.</div> <div> &nbsp;</div> <div> <strong>Exceptions</strong></div> <div> &nbsp;</div> <div> Of course, there are exceptions. Specifically, the prohibition does not apply if the prospective employee is applying for a position as a firefighter or an emergency medical technician (as defined in state law), or if the position will require the prospective employee to operate a motor vehicle for which federal or state law mandates the employee submit to screening tests. AB 132 also states the law does not apply to a position that, &ldquo;in the determination of the employer, could adversely affect the safety of others.&rdquo; Moreover, the law does not apply to the extent it is inconsistent or otherwise in conflict with the provisions of an employment contract, a collective bargaining agreement, or federal law, or to a position funded by a federal grant.</div> <div> &nbsp;</div> <div> <strong>Implications for Employers</strong></div> <div> &nbsp;</div> <div> Nevada employers should review their existing drug testing or substance abuse policies to determine whether changes are necessary in light of the January 1, 2020, effective date of AB 132. Employers may also need to consider working with their drug testing vendors and Medical Review Officers to ensure that job applicants are not tested for cannabis, or that such tests are not reported in the final test result. Although AB 132 gives employers discretion to determine whether a position is exempt because it &ldquo;could adversely affect the safety of others,&rdquo; it remains to be seen how Nevada courts will interpret this exemption and, thus, Nevada employers should work with employment counsel experienced with drug and alcohol testing laws and programs to evaluate whether a position fits this standard. Finally, until courts address the type of &ldquo;employment contract&rdquo; that might exempt a particular job applicant from the law, employers should exercise caution before relying on a vague term left undefined by the statute.</div> <div> &nbsp;</div> <div> Nationwide employers are finding it increasingly difficult to stay head of the pot craze sweeping the nation. Employers in certain states, like California, can take some comfort in clear language in statutes or court decisions that grant employers the right to maintain a drug-free workplace and take action against those who test positive for cannabis, including rejecting job applicants testing positive for the drug. Yet, those states may become the exception rather than the rule, with more courts finding that employers are required to comply with state disability laws when confronted with medical cannabis users and jurisdictions now stepping in and granting protections to off-duty cannabis users. Now more than ever, employers in all jurisdictions should consider.</div> https://www.seyfarth.com:443/publications/crefc061019 Stanley Jutkowitz and Christopher Palmese authored an article in CRE Finance World https://www.seyfarth.com:443/publications/crefc061019 Mon, 10 Jun 2019 00:00:00 -0400 <p> Stanley Jutkowitz and Christopher Palmese authored a June 10 article in CRE Finance World, &quot;But My Dispensary Tenant is Cash Flow Positive, Why Can&#39;t I Get a Loan?&quot; You can read the full article on page 17 <a href="https://www.crefc.org/crefcdocs/crefw/CREFWJUNE2019.pdf">here</a>.</p> https://www.seyfarth.com:443/publications/CCD061019 Significant TCPA Verdict Returned in Wakefield v. ViSalus, Inc. https://www.seyfarth.com:443/publications/CCD061019 Mon, 10 Jun 2019 00:00:00 -0400 <p> An Oregon federal jury reached a verdict in a Telephone Consumer Protection Act (&ldquo;TCPA&rdquo;) class action in April that exposes the defendant to a potential judgment in excess of $2.7 billion.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/06/significant-tcpa-verdict-returned-in-wakefield-v-visalus-inc/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/baffaccb061019 David Baffa quoted in Crain's Chicago Business https://www.seyfarth.com:443/news/baffaccb061019 Mon, 10 Jun 2019 00:00:00 -0400 <p> David Baffa was quoted in a June 10 story from Crain&#39;s Chicago Business, &quot;How will recreational marijuana affect the workplace?&quot; Baffa said that the problem is one of science, which is that there is not a reliable way to test for marijuana impairment like we would for alcohol impairment in a way that is scientifically accessible to employers. You can read the <a href="https://www.chicagobusiness.com/news/how-will-recreational-marijuana-affect-workplace">full article here</a>.</p> https://www.seyfarth.com:443/news/baffalaw060719 David Baffa quoted in Law.com https://www.seyfarth.com:443/news/baffalaw060719 Fri, 07 Jun 2019 00:00:00 -0400 <p> David Baffa was quoted in a June 7 story from Law.com&#39;s Higher Law, &quot;The Weed Deal in Illinois.&quot; Baffa discussed the impacts that Illinois&#39; pending adult-use marijuana law could have on the workplace.</p> https://www.seyfarth.com:443/news/rileylaw360060719 Jennifer Riley quoted in Law360 https://www.seyfarth.com:443/news/rileylaw360060719 Fri, 07 Jun 2019 00:00:00 -0400 <p> Jennifer Riley was quoted in a June 7 story from Law360, &quot;4th Circ. Ruling Eases Class Cert. Path In Telemarketing Rows.&quot; Riley said that this conclusion clarifies, if not lowers, the bar for class certification under the TCPA by embracing the idea that Congress has a great deal of latitude to structure consumer protection statutes to be class-friendly and avoid individual inquiries.</p> https://www.seyfarth.com:443/publications/OMM060719-EB Ninth Circuit Rules that a Domestic Partner Under California State Law Was a Spouse for an ERISA Plan https://www.seyfarth.com:443/publications/OMM060719-EB Fri, 07 Jun 2019 00:00:00 -0400 <div> In an unpublished decision dated May 16, 2019, the Ninth Circuit held that a plan administrator abused its discretion by denying surviving spouse benefits under an ERISA retirement benefit plan to a participant&rsquo;s domestic partner.</div> <div> &nbsp;</div> <div> The plaintiff and his partner (the plan participant) registered as domestic partners in California in 2004.&nbsp; Under California law, registered domestic partners were given the same rights as spouses, and the same protections and benefits.&nbsp; The participant retired in 2009 and began receiving his pension benefits as a single-life annuity.&nbsp; The plaintiff and the participant married in 2014, and the participant died five days later.&nbsp; The plan benefits ceased on the participant&rsquo;s death, consistent with the operation of a single life annuity.</div> <div> &nbsp;</div> <div> The plaintiff filed a claim with the plan administrator for spousal benefits, and the claim was denied based on the plan administrator&rsquo;s interpretation of the term &ldquo;spouse&rdquo; in the plan, in a manner that excluded domestic partners.&nbsp; The plaintiff sued in the Northern District of California, and the district court held that the plan administrator did not abuse its discretion in interpreting &ldquo;spouse&rdquo; under the plan to exclude domestic partners.&nbsp;&nbsp;</div> <div> &nbsp;</div> <div> The Ninth Circuit reviewed the plan administrator&rsquo;s decision for abuse of discretion, overturned the district court&rsquo;s decision and remanded the case to order payments from the plan to the plaintiff.&nbsp; In a very short written opinion, the Ninth Circuit found that neither ERISA nor the Internal Revenue Code contained a binding interpretation of &ldquo;spouse&rdquo; after the Supreme Court found the Defense of Marriage Act (&ldquo;DOMA&rdquo;) to be unconstitutional. (The Ninth Circuit reasoned that as the Supreme Court found DOMA had never been constitutional, the decision striking down DOMA needed to be applied retroactively.)&nbsp; The plan&rsquo;s choice of law provision indicated that the plan should be interpreted in accordance with California law as consistent with ERISA and the Internal Revenue Code.&nbsp; In this revisionist view of looking back and excising DOMA, the Court found that because California law gave registered domestic partners the same rights as spouses and that was not inconsistent with ERISA or the Internal Revenue Code (again ignoring DOMA), the plan administrator should have interpreted the term &ldquo;spouse&rdquo; to include registered domestic partners.&nbsp; The Ninth Circuit specifically stated that the plan administrator should have given the plaintiff benefits as a spouse under the plan, which would have included the right to consent to the participant&rsquo;s election of a single life annuity.</div> <div> &nbsp;</div> <div> While unpublished opinions are non-precedential, this decision is important as it reflects the ongoing efforts to make the survivors of same-sex relationships whole. Related litigation has focused on efforts to provide surviving spouse social security benefits. While this decision is unpublished, plan administrators should not hesitate to reach out to legal counsel in order to assess what if any implications this decision may have both in terms of copy-cat litigation and plan administration.&nbsp;</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/OMM060719-LIT SEC Imposes New Standard for Broker-Dealer Investment Advice https://www.seyfarth.com:443/publications/OMM060719-LIT Fri, 07 Jun 2019 00:00:00 -0400 <p> On June 5, 2019, the Securities and Exchange Commission (&ldquo;SEC&rdquo;) voted to adopt &ldquo;Regulation Best Interest,&rdquo; which is intended to increase the duties a broker-dealer owes to its clients. While SEC-registered investment advisors (&ldquo;RIAs&rdquo;) have historically been held to a fiduciary duty standard of care, broker-dealers have been subject to the lesser &ldquo;suitability&rdquo; standard. Governed by FINRA Rule 2111, the suitability standard requires that a broker-dealer have a reasonable basis to believe a recommended transaction or investment strategy is suitable for the customer based on the customer&rsquo;s investment profile. The customer&rsquo;s investment profile includes factors such as the customer&rsquo;s age, financial situation, and investment experience. Consumer advocates had hoped the SEC would eliminate the distinction between the duties owed by RIAs and broker-dealers by establishing an across-the-board fiduciary standard covering both. While the SEC has stated that the &ldquo;best interest&rdquo; standard &ldquo;draws from key fiduciary principles,&rdquo; supporters and critics alike agree that it falls short of the fiduciary duty standard.</p> <p> So what exactly is the &ldquo;best interest&rdquo; standard? According to the SEC&rsquo;s press release, &ldquo;When making a recommendation of a securities transaction or an investment strategy involving securities, a broker-dealer must act in the retail customer&rsquo;s best interest and cannot place its own interests ahead of the customer&rsquo;s interests.&rdquo; The best interest standard &ldquo;applies to account recommendations, including recommendations to roll over or transfer assets in a workplace retirement plan account to an IRA, and recommendations to take a plan distribution. It also applies to implicit &lsquo;recommendations to hold&rsquo; that result from agreed-upon account monitoring.&rdquo; The new regulation also requires broker-dealers to provide additional disclosures about the broker&rsquo;s fees and scope of services provided, as well as mitigate potential conflicts through disclosure of any financial incentives the broker-dealer has to sell specific products.&nbsp;&nbsp;</p> <p> Whether the best interest standard ultimately provides greater protections to consumers, as supporters hope, remains to be seen. Critics of the new regulation anticipate litigation and additional regulatory guidance given what they describe as the ambiguity and vagueness of the regulation. There also remains some question about how the standard will be enforced to hold brokers to the standard. Though the regulation is intended to have an impact on day-to-day interactions with investors, the immediate concern for many broker-dealers is the revision of disclosures and marketing materials, as well as updates to compliance systems. The new rules become effective 60 days from publication in the Federal Register and broker-dealers must begin complying with Regulation Best Interest by June 30, 2020.</p> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/CP060719 Cannabis in California: High Time to Smoke Out the Issues https://www.seyfarth.com:443/publications/CP060719 Fri, 07 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: In a simpler time, courts reviewing medical cannabis laws issued employer-friendly decisions, generally finding no duty to accommodate medical cannabis even when state laws allowed its use for medical purposes. Now, however, the tide is rapidly turning. Where does California employment law currently stand on cannabis? Below we address burning issues regarding accommodations and drug testing.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/06/07/cannabis-in-california-high-time-to-smoke-out-the-issues/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT060619a The Week in Weed: June 7, 2019 https://www.seyfarth.com:443/publications/TBT060619a Thu, 06 Jun 2019 00:00:00 -0400 <p> Welcome back to The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/the-week-in-weed-june-7-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM060619-LE New York State Election Law Amended to Allow Employees Up to Three Hours of Paid Time Off to Vote https://www.seyfarth.com:443/publications/OMM060619-LE Thu, 06 Jun 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong>&nbsp; <em>A recent amendment to New York&rsquo;s Election Law now provides employees up to three hours of paid time off to vote.&nbsp; Employers need to ensure their policies and practices comply with these new requirements before the next election.</em></p> <p> On April 12, 2019, as part of the New York State FY 2020 Budget, Governor Andrew Cuomo signed into law an amendment to Section 3-110 of the New York State Election Law, providing registered voters up to three hours of paid time off to vote on any election day.</p> <p> <strong>The Prior Law on Time Off for Voting</strong></p> <p> The prior law required employers to provide &ldquo;sufficient time&rdquo; outside of an employee&rsquo;s working hours for that employee to vote in any election.&nbsp; An employee was deemed to have &ldquo;sufficient time&rdquo; to vote if he or she had four consecutive hours either between the opening of the polls and the start of the employee&rsquo;s shift, or between the end of the employee&rsquo;s shift and the closing of the polls.&nbsp; Employees with less than four consecutive hours before or after their shift could take up to two hours off without losing pay to vote.&nbsp; An employer could designate whether the time off occurred at the beginning or end of the employee&rsquo;s shift, and employees were required to notify their employers not more than ten nor less than two working days before the day of the election that they needed time off to vote.&nbsp; The law further mandated that employers post a notice conspicuously in the workplace setting forth the provisions of Section 3-110 at least ten working days before an election.</p> <p> <strong>Changes to the Law</strong></p> <p> The amendment to Section 3-110, found <a href="https://www.elections.ny.gov/NYSBOE/elections/AttentionEmployees.pdf">here</a>, eliminates the &ldquo;sufficient time&rdquo; requirement.&nbsp; Instead, employees who are otherwise scheduled to work on an election day may now take up to three hours off in order to vote in any election without losing pay.&nbsp; Additionally, while employees must still notify their employers not less than two working days before the day of the election that they require time off to vote, the new law has removed the upper ten-day limit on when notice may be given. &nbsp;</p> <p> <strong>Employer Takeaways</strong></p> <p> The New York Primary Election is on June 25, 2019 and the General Election will follow November 5, 2019.&nbsp; Employers must ensure updated notices are posted conspicuously in the workplace at least ten working days before the election. &nbsp;Employers may use the New York State Board of Elections&rsquo; updated model notice, available <a href="https://www.elections.ny.gov/NYSBOE/elections/AttentionEmployees.pdf">here</a>.&nbsp; Additionally, employers should review their policies and procedures, including employee handbooks, to ensure compliance with the amended law.</p> https://www.seyfarth.com:443/publications/TBT060619 DC Mayor Begins Effort to Legalize Recreational MJ Sales https://www.seyfarth.com:443/publications/TBT060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> The District of Columbia is one of only two jurisdictions (the other is Vermont) which have legalized possession of recreational marijuana but where sales remain illegal. Wait, what? That&rsquo;s correct; in your nation&rsquo;s capital, you can use recreational MJ, but you can&rsquo;t buy or sell it.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/dc-mayor-begins-effort-to-legalize-recreational-mj-sales/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL060619 Modern Slavery: The Dilemma of Internal Accountability and Resource Allocation https://www.seyfarth.com:443/publications/EL060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: This is the third in a series of blogs by our Global Modern Slavery Team dealing with how companies can get ahead of the curve of the changing legal landscape addressing the role of business and its connection to modern slavery.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/modern-slavery-the-dilemma-of-internal-accountability-and-resource-allocation/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS060619 Not All Is Lost for California Employers: Enforce Non-Compete Forfeiture Provisions through ERISA Top Hat Plans? https://www.seyfarth.com:443/publications/TS060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Even before the California Supreme Court decided Edwards in 2008, employers knew all too well the woes of attempting to enforce non-competes against California employees. Edwards simply reaffirmed California&rsquo;s long-standing policy in favor of employee mobility, finding that employee non-competition agreements are typically void in California unless they fall within one of the exceptions to Business and Professions Code section 16600. But this need not become the fate of every non-compete; notwithstanding Edwards and recent California decisions applying the state&rsquo;s notorious statute, section 16600, it may be possible for employers to enforce non-competition forfeiture provisions by including them in deferred compensation top hat plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/06/articles/noncompete-enforceability/not-all-is-lost-for-california-employers-enforce-non-compete-forfeiture-provisions-through-erisa-top-hat-plans/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/PM060619-LE Seyfarth Shaw Policy Matters Newsletter - June 6, 2019 https://www.seyfarth.com:443/publications/PM060619-LE Thu, 06 Jun 2019 00:00:00 -0400 <div> <strong>House Hearing on Overtime Rule.</strong>&nbsp; The seemingly never-ending saga of the Department of Labor&rsquo;s regulatory efforts to increase the salary threshold gets another chapter next week when a subcommittee of the House Committee on Education and Labor holds a <a href="http://marketing.seyfarth.com/rs/ct.aspx?ct=24F76619DFEB0AEDC1D181AFD22E991DD5BE4185EDA334F67CCE9">hearing</a> titled &ldquo;Restoring the Value of Work: Evaluating DOL&rsquo;s Efforts to Undermine Strong Overtime Protections.&rdquo;&nbsp; Witnesses have not yet been announced for the June 12 hearing.</div> <div> &nbsp;</div> <div> <strong>Regular Rate Comment Period Ends Soon.</strong>&nbsp; The second of the U.S. Department of Labor Wage &amp; Hour Division&rsquo;s spring rulemakings ends next week (the first&mdash;the subject of the hearing referenced above&mdash;addresses the exempt status salary level and the third joint employment).&nbsp; This rulemaking focuses on revisions that address the manner and method by which the overtime rate of pay is calculated under the FLSA.&nbsp; Interested parties may provide comments by June 12 at <a href="http://marketing.seyfarth.com/rs/ct.aspx?ct=24F76619DFEB0AEDC1D181AFD22E991DD5BE5B85EBA431F96FDB4D5D4D94EE23EC410">regulations.gov</a>.&nbsp; Seyfarth&rsquo;s Wage &amp; Hour Litigation Practice Group will be submitting comments; please reach out to a member of that team with any questions or ideas.</div> <div> &nbsp;</div> <div> <strong>D.C. Begins Process to Legalize Sale of Marijuana.&nbsp;</strong> In Washington, D.C., you can possess recreational marijuana, but you cannot legally buy it or sell it.&nbsp; D.C.&rsquo;s mayor has introduced a bill that would change that anomaly.&nbsp; And the City Council has announced hearings.&nbsp; For more on this development&mdash;and an explanation of the odd way in which D.C.&rsquo;s laws become laws&mdash;see <a href="http://marketing.seyfarth.com/rs/ct.aspx?ct=24F76619DFEB0AEDC1D181AFD22E991DD5BE7A85F5B73CEA6FDA0540429">Seyfarth&rsquo;s Blunt Truth blog</a>.</div> <div> &nbsp;</div> <div> <strong>Immigration&mdash;the Intractable Debate Continues.</strong>&nbsp; On June 4, the House passed HR 6, the American Dream and Promise Act of 2019, 237-187 with 7 Republicans in support.&nbsp; The Act, prompted by the Administration&rsquo;s attempted rescission of the DACA (Deferred Action for Childhood Arrivals) program and threatened termination of the various TPS (Temporary Protected Status) programs, would create permanent protections for an estimated 2.5 million people.&nbsp; Ongoing negotiations to create a more bipartisan legislative effort obviously failed.&nbsp; &nbsp;The Act was strongly supported by the business community.&nbsp; Senate consideration in unlikely.</div> <div> &nbsp;</div> <div> <strong>POWADA.&nbsp;</strong> As earlier reported, the Protecting Older Workers Against Discrimination Act (H.R. 1230)&nbsp; will soon be headed to markup in the House Education and Labor Committee and then to the House floor.&nbsp; The bill, in a nutshell, would reverse the Supreme Court&rsquo;s <em>Gross </em>decision which found that &ldquo;mixed motive&rdquo; cases cannot be brought under the Age Discrimination in Employment Act, and would apply the framework now used under Title VII, as amended by the Civil Rights Act of 1991, to allow mixed motive cases. However, if an employer could show that it would have made the same decision even absent the discriminatory age-related motive, damages would be limited to injunctive relief and attorney&#39;s fees.&nbsp; Notably, the bill ranges much further than this fix, also amending the retaliation provisions of Title VII and the ADEA and further amends the Americans With Disabilities Act and the Rehabilitation Act.&nbsp; Seyfarth counsel Larry Lorber prepared a statement for the record, which we include <a href="http://marketing.seyfarth.com/rs/ct.aspx?ct=24F76619DFEB0AEDC1D181AFD22E991DD5BE4185FEB4213">here for your information</a>.</div> <div> &nbsp;</div> https://www.seyfarth.com:443/news/lorberbloomberglaw060619 Lawrence Lorber quoted in Bloomberg Law https://www.seyfarth.com:443/news/lorberbloomberglaw060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Lawrence Lorber was quoted in a June 6 story from Bloomberg Law, &quot;Trump Contractor Watchdog Wants Closer Tabs on Career Attorneys.&quot; Lorber said that the Solicitor&rsquo;s Office has, some would say, an overwhelming amount of authority or weight in the policy decisions of the OFCCP.</p> https://www.seyfarth.com:443/news/lazaradage060619 Bart Lazar quoted in AdAge https://www.seyfarth.com:443/news/lazaradage060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Bart Lazar was quoted in a June 6 story from AdAge, &quot;What Advertisers Should Know About the Facebook and Google Probes.&quot; Lazar said that there are anti-trust, market-power investigations going on for these businesses. You can read the <a href="http://www.adageindia.in/digital/what-advertisers-should-know-about-the-facebook-and-google-probes/articleshow/69685327.cms">full article here</a>.</p> https://www.seyfarth.com:443/news/meieradisa060619 Steven Meier interviewed by ADISA https://www.seyfarth.com:443/news/meieradisa060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Steven Meier was interviewed June 6th by the Alternative and Direct Investment Securities Association, Inc. (ADISA), &quot;QUALIFIED OPPORTUNITY ZONE FUNDS.&quot; Meier discussed Qualified Opportunity Zone funds, including their tax advantages, how investors can participate, what to evaluate when reviewing a fund, proposed regulations, uncertainties and more. You can listen to the <a href="https://www.adisa.org/education/adisa-raa-educational-video-series/qozf?utm_content=93574983&amp;utm_medium=social&amp;utm_source=twitter&amp;hss_channel=tw-2746258740">full interview here</a>.</p> https://www.seyfarth.com:443/news/adareuters060619 Seyfarth's ADA statistics referenced in Reuters https://www.seyfarth.com:443/news/adareuters060619 Thu, 06 Jun 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a June 6 story from Reuters, &quot;A ray of hope for ADA website defendants? N.Y. judge tosses case for mootness.&quot; According to Seyfarth, which tallied the cases, the growth of ADA website accessibility litigation has been nothing short of staggering. You can read the <a href="https://www.reuters.com/article/us-otc-ada/a-ray-of-hope-for-ada-website-defendants-ny-judge-tosses-case-for-mootness-idUSKCN1T72P5">full article here</a>.</p> https://www.seyfarth.com:443/news/olsonshrm060519 Camille Olson quoted in SHRM https://www.seyfarth.com:443/news/olsonshrm060519 Wed, 05 Jun 2019 00:00:00 -0400 <p> Camille Olson was quoted in a June 5 story from SHRM, &quot;Putting Humanity into HR Compliance: Become Aware of Unconscious Bias.&quot; Olson recommends a three-pronged approach. You can read the <a href="https://www.shrm.org/ResourcesAndTools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/Pages/Putting-Humanity-into-HR-Compliance-Become-Aware-of-Unconscious-Bias.aspx">full article here</a>.</p> https://www.seyfarth.com:443/publications/ERISA060519 The Third Circuit Carries On The Judicial Debate Over The Level Of Specificity Needed In An ERISA Fee Complaint https://www.seyfarth.com:443/publications/ERISA060519 Wed, 05 Jun 2019 00:00:00 -0400 <p> Synopsis: A new Third Circuit decision has allowed an ERISA fee complaint to stand even though there were no specific allegations of fiduciary errors in the process of selecting investment options and fees. This development is yet another in the line of decisions that decide if the federal door to discovery will be opened or closed at the complaint stage of the litigation. Expect judges to differ and more such decisions to issue.<br /> <br /> <a href="https://www.erisa-employeebenefitslitigationblog.com/2019/06/05/the-third-circuit-carries-on-the-judicial-debate-over-the-level-of-specificity-needed-in-an-erisa-fee-complaint/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CDL060519 Seyfarth’s eDiscovery and Information Governance Group is Ranked in the Legal 500 https://www.seyfarth.com:443/publications/CDL060519 Wed, 05 Jun 2019 00:00:00 -0400 <p> The eDiscovery and Information Governance Group has been ranked in Tier Three in the latest Legal 500 ranking. Richard (Rick) Lutkus was also recognized as a Rising Star in Media, Technology &amp; Telecoms &ndash; Cyber Law. Rick Lutkus and Kathleen McConnell were also recognized by the editorial as recommended lawyers. Led by Scott Carlson (also ranked in the Legal 500) and Jay Carle, the group has been lauded by clients and peers for their &ldquo;legal experience, computer science knowledge, exceptional business judgment and standout integrity&rdquo;.<br /> <br /> <a href="https://www.carpedatumlaw.com/2019/06/seyfarths-ediscovery-and-information-governance-group-is-ranked-in-the-legal-500/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CONS060519 The Integrated Project Delivery Model: Why, What, and How to Decide if it is Right for Your Project https://www.seyfarth.com:443/publications/CONS060519 Wed, 05 Jun 2019 00:00:00 -0400 <p> As a response to an increasingly demanding market place, project delivery methods have evolved from the more traditional methods of design-bid-build, design-build, and construction-manager-at-risk into what is known as Integrated Project Delivery (&ldquo;IPD&rdquo;). In the typical construction contract, each party seeks to avoid and transfer risk to other parties. The IPD approach employs a different philosophy&mdash;the project participants accept and manage design and construction risks as a team. The pure IPD method often does this with a single, multi-party contract that is executed by the owner, general contractor, and designer. The team members to a multi-party contract share financial risks and rewards using a profit/incentive pool that is based upon measurable project-outcomes. Team members collaborate on how the profit and incentive pool is structured to ensure that each member is accountable for its contribution to the project outcome. The goal is to motivate each member in a way that encourages candid communication and accountability for overall design and construction.<br /> <br /> <a href="https://www.constructionseyt.com/2019/06/the-integrated-project-delivery-model-why-what-and-how-to-decide-if-it-is-right-for-your-project/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL060419 The Uncertain Landscape of Discrimination & Harassment Laws: Expanding the Definition of “Protected Class” https://www.seyfarth.com:443/publications/EL060419 Tue, 04 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Laws protecting individuals from discrimination and harassment in the workplace are expanding rapidly at the state and local levels, while the federal landscape remains unclear regarding LGBTQ rights. In light of the rapidly changing landscape, employers should review their policies, handbooks, and training materials for compliance at least annually.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/06/the-uncertain-landscape-of-discrimination-harassment-laws-expanding-the-definition-of-protected-class/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM060419-LIT Chancery Court Finds Merger Agreement’s “No Use” Provision Preserves Seller’s Privilege https://www.seyfarth.com:443/publications/OMM060419-LIT Tue, 04 Jun 2019 00:00:00 -0400 <p> In <em>Shareholder Representative Services LLC v. RSI Holdco, LLC</em>, C.A. No. 2018-0517-KSJM (Del. Ch. May 29, 2019), the Delaware Court of Chancery held that a merger agreement provision assigning pre-merger privilege held by sellers to Shareholder Representative Services and further prohibiting &ldquo;use&rdquo; of such communications in subsequent litigation between the parties precluded the purchasing entity from accessing and using the seller&rsquo;s privileged email against the seller in post-closing litigation.</p> <p> The ruling by Vice Chancellor Kathleen S. McCormick was the first opinion by the Chancery Court since <em>Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLP</em>, 80 A.3d 155 (Del. Ch. 2013), to squarely address the scope of provisions preserving pre-merger privilege.&nbsp;&nbsp;</p> <h2> Background</h2> <p> In September 2016, RSI Holdco (&ldquo;RSI&rdquo;), an affiliate of TA Associates, acquired Radixx Solutions International, Inc. (&ldquo;Radixx&rdquo;), a cloud-based provider of travel distribution and passenger service system software for airline reservations, distribution, and merchandising. Seyfarth Shaw LLP (&ldquo;Seyfarth&rdquo;) served as counsel to Radixx in connection with the merger. The merger agreement designated Shareholder Representative Services (&ldquo;SRS&rdquo;) as representative of Radixx&rsquo;s selling stockholders. Through the merger, RSI obtained possession of Radixx&rsquo;s computers and email servers, including approximately 1,200 pre-merger emails between Radixx and Seyfarth. The emails were not excised or segregated from Radixx&rsquo;s other communication at the time of the merger; rather, the parties negotiated a provision preserving the pre-merger privilege and assigning that privilege to SRS. The parties further negotiated a &ldquo;no use&rdquo; provision, which prohibited any party from using pre-merger privileged communications in subsequent litigation between the parties.</p> <p> Despite these provisions, RSI sought to access and use the pre-merger privileged communications in litigation between RSI, SRS, and certain of the former Radixx shareholders. RSI moved the Chancery Court for an order declaring that any privilege with respect to the pre-merger emails between Radixx and Seyfarth has been waived and that RSI may access and review the emails. SRS cross-moved for a protective order.</p> <h2> Analysis</h2> <p> In <em>Great Hill</em>, a buyer discovered pre-acquisition communications between the seller and its attorneys on the surviving company&rsquo;s computer systems. Unlike the merger agreement at issue in <em>SRS v. RSI</em>, the <em>Great Hill</em> parties&rsquo; merger agreement did not carve pre-merger attorney-client communications out of the assets transferred to the buyer at closing. The Chancery Court held that under those circumstances, Delaware&rsquo;s default rule&mdash;that &ldquo;all property, rights, privileges, powers and franchises, and all and every other interest shall be thereafter as effectually the property of the surviving or resulting corporation&rdquo;&mdash;applied and &ldquo;the privilege over all pre-merger communications. . . passed to the surviving corporation in the merger.&rdquo; The Chancery Court noted, however, that parties may contract out of the default rule, which many parties chose to do in post-Great Hill mergers and acquisitions.&nbsp;&nbsp;</p> <p> Radixx did just that. Its Seyfarth Shaw attorneys negotiated not only a so-called &ldquo;<em>Great Hill</em>&rdquo; provision preserving privilege over the pre-merger communications and assigning that privilege to SRS, but also a &ldquo;no use&rdquo; provision, which provided that a second level of protection by expressly precluding any party from &ldquo;us[ing] or rely[ing] on any of the Privileged Communications in any action or claim against or involving any of the parties [to the Merger Agreement] after the Closing.&rdquo;&nbsp;&nbsp;</p> <p> Despite these provisions, RSI sought leave of the Court to access and review the pre-merger privileged communications. RSI argued that the &ldquo;no use&rdquo; clause did not apply because the provision only applied to privileged communications and the emails it sought to review were no longer privileged because sellers took no steps post-closing to segregate, excise, or demand the return of the emails, and thereby waived the privilege. The Chancery Court rejected RSI&rsquo;s arguments and found that the argument ran counter to the express language of the merger agreement. The Court further noted that RSI&rsquo;s argument for waiver would &ldquo;undermine the guidance of <em>Great Hill</em>&mdash;which cautioned parties to negotiate for contractual protections&rdquo; and also render the express language negotiated by the parties meaningless.&nbsp;&nbsp;</p> <p> The Court also pointed out that the merger agreement required all parties to &ldquo;take the steps necessary to ensure that any privilege attaching as a result of [Seyfarth] representing [Radixx]. . . in connection with the transactions contemplated by this Agreement shall survive the Closing, remain in effect and be assigned to and controlled by the [Representative].&rdquo; For that privilege to be waived, the Court found that it would necessarily be due in part to RSI&rsquo;s own failure to &ldquo;take the steps necessary&rdquo; to preserve it and that RSI could not argue that its own failure to preserve privilege should now inure to its benefit.</p> <h2> Conclusion</h2> <p> The Court&rsquo;s opinion illustrates the importance of expressly preserving the privilege attached to pre-merger communications at the time of closing and assigning control of that privilege. The decision also highlights the utility of provisions that require all parties to take steps necessary to ensure the privileges remain in effect and to expressly preclude the buyer from using the privileged communications in post-closing litigation against the sellers.</p> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/TBT060419 Too Natural for Naturalization: An Update https://www.seyfarth.com:443/publications/TBT060419 Tue, 04 Jun 2019 00:00:00 -0400 <p> On May 29, 2019, forty-seven members of Congress wrote a letter to Attorney General Bob Barr and Acting Secretary of Homeland Security Kevin McAleenan registering their disagreement with the application of USCIS policy guidance to those who have been employed in the legal cannabis industry.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/06/too-natural-for-naturalization-an-update/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CCD060419 The Consumer Financial Protection Bureau Dodges Another Bullet: Consumer Financial Protection Bureau v. Seila Law LLC https://www.seyfarth.com:443/publications/CCD060419 Tue, 04 Jun 2019 00:00:00 -0400 <p> Although Congress created the Consumer Financial Protection Bureau (&ldquo;CFPB&rdquo;) nearly a decade ago, constitutional challenges to its leadership structure remain ongoing. Until recently, only the D.C. Circuit had ruled on the constitutionality of the CFPB structure at the appellate level in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018) (en banc), and did so approvingly. The D.C. Circuit rejected the notion that an agency headed by a single director who can only be removed for cause is unconstitutional. Early this month, the Ninth Circuit concurred with the D.C. Circuit in CFPB v. Seila, LLC.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/06/the-consumer-financial-protection-bureau-dodges-another-bullet-consumer-financial-protection-bureau-v-seila-law-llc/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TS060419 Federal Judge Confirms That Massachusetts’ New Non-Compete Law Does Not Require Garden Leave or Massachusetts Choice of Law https://www.seyfarth.com:443/publications/TS060419 Tue, 04 Jun 2019 00:00:00 -0400 <p> As we&rsquo;ve previously written about on this blog, last summer the Massachusetts legislature passed a non-compete reform bill which went into effect on October 1, 2018. Readers of this blog will recall our concerns that the new law is in many ways confusing and may lead to unpredictable results. Now, more than six months after its effective date, we have a second published decision out of the United States District Court for the District of Massachusetts citing the new Massachusetts Noncompetition Agreement Act (&ldquo;MNCA&rdquo;), Mass. Gen. Laws ch. 149, &sect; 24L. Like the first published decision, this decision does not directly analyze an agreement that is subject to the Act, but it is still instructive for employers with personnel who may be subject to the MNCA.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/06/articles/noncompete-enforceability/federal-judge-confirms-that-massachusetts-new-non-compete-law-does-not-require-garden-leave-or-massachusetts-choice-of-law/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/morrisonhre060419 Ian Morrison quoted in Human Resource Executive https://www.seyfarth.com:443/news/morrisonhre060419 Tue, 04 Jun 2019 00:00:00 -0400 <p> Ian Morrison was quoted in a June 4 story from Human Resource Executive, &quot;Avoiding Legal Pitfalls,&quot; on employee benefits. Morrison says four issues warrant HR leaders&rsquo; attention when it comes to employee benefits. You can read the <a href="http://hrexecutive.com/avoiding-legal-pitfalls/">full article here</a>.</p> https://www.seyfarth.com:443/publications/CCD060319 Fourth Circuit Affirms $61 Million Treble Damages Award in TCPA Class Action Against Marketing Agency’s Customer https://www.seyfarth.com:443/publications/CCD060319 Mon, 03 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On May 30, 2019, the Fourth Circuit issued an opinion in Krakauer v. Dish Network, L.L.C., No. 18-1518 (4th Cir. May 30, 2019), that paved the way for TCPA plaintiffs to collect historic awards from unsuspecting defendants. The Fourth Circuit held that TCPA plaintiffs need not show any threshold level of injury to have standing, so long as they prove the statutory elements of a TCPA claim; the TCPA creates a simple cause of action that is &ldquo;conducive to class-wide disposition&rdquo; without reference to individualized inquiries; and Dish Network could be held responsible for the actions of its third-party marketer even if it repeatedly admonished the third party against violating the law and its contracts disclaimed any agency relationship. As a result, companies should be wary of using third parties to conduct telemarketing without appropriate oversight.<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/06/fourth-circuit-affirms-61-million-treble-damages-award-in-tcpa-class-action-against-marketing-agencys-customer/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC060319 Fourth Circuit Affirms $61 Million Treble Damages Award in TCPA Class Action Against Marketing Agency’s Customer https://www.seyfarth.com:443/publications/WC060319 Mon, 03 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: On May 30, 2019, the Fourth Circuit issued an opinion in Krakauer v. Dish Network, L.L.C., No. 18-1518 (4th Cir. May 30, 2019), that paved the way for TCPA plaintiffs to collect historic awards from unsuspecting defendants. The Fourth Circuit held that TCPA plaintiffs need not show any threshold level of injury to have standing, so long as they prove the statutory elements of a TCPA claim; the TCPA creates a simple cause of action that is &ldquo;conducive to class-wide disposition&rdquo; without reference to individualized inquiries; and Dish Network could be held responsible for the actions of its third-party marketer even if it repeatedly admonished the third party against violating the law and its contracts disclaimed any agency relationship. As a result, companies should be wary of using third parties to conduct telemarketing without appropriate oversight.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/06/fourth-circuit-affirms-61-million-treble-damages-award-in-tcpa-class-action-against-marketing-agencys-customer/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WH060319 Caveat Propraetor: Private Equity Firms Operating In California and Beyond Should Be Wary Of Expanding Labor And Employment Class Action Costs https://www.seyfarth.com:443/publications/WH060319 Mon, 03 Jun 2019 00:00:00 -0400 <p> Seyfarth Synopsis: News Flash: &ldquo;Caveat Propraetor&rdquo; or &ldquo;Proprietor Beware&rdquo; might soon replace &ldquo;Eureka&rdquo; as the state motto of California. Okay, that&rsquo;s just melodramatic hyperbole, but one can imagine that business owners in the state might feel similarly given California&rsquo;s increasingly hostile business environment. Ever expanding litigation exposure, particularly with regard to labor and employment class actions, weighs heavily on the minds of businesses operating in California, and increasingly nationwide. It should come as no great surprise that class action costs to U.S. companies are at their highest in a decade. According to a recent report by Carlton Fields, spending on class action litigation has reached its highest level in the United States since 2008, and that figure is expected to climb even further. [1] Of the $2.46 billion spent in 2018, labor and employment matters account for a full quarter of the total, with most legal departments highlighting wage and hour class actions as their chief area of concern.[2] Private equity firms should thus take note as these escalating expenses pose increased risks to their investments, particularly because of labor and employment law.<br /> <br /> <a href="https://www.wagehourlitigation.com/california/caveat-propraetor/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/maatmanss060119 Gerald Maatman authored an article in Staffing Success https://www.seyfarth.com:443/publications/maatmanss060119 Sat, 01 Jun 2019 00:00:00 -0400 <p> Gerald Maatman authored an article in the June issue of Staffing Success, &quot;Adding Customer Value With Arbitration Agreements.&quot; You can read the <a href="https://www.seyfarth.com/dir_docs/publications/Staffing_Success-MJ19-Law_YouReprint.pdf">full article here</a>.</p> https://www.seyfarth.com:443/news/neilssondowningplansponsor060119 Jennifer Neilsson and Jake Downing quoted in PlanSponsor Magazine https://www.seyfarth.com:443/news/neilssondowningplansponsor060119 Sat, 01 Jun 2019 00:00:00 -0400 <p> Jennifer Neilsson and Jake Downing were quoted in the June-July issue of PlanSponsor Magazine, &quot;NQDC Investment Menus,&quot; on how to choose the structure that makes sense for your plan. Neilsson and Downing said that the DC-mirror approach is common&mdash;the most common investing approach they see among NQDC plans. You can read the <a href="https://www.plansponsor.com/magazine/nqdc-investment-menus/">full article here</a>.</p> https://www.seyfarth.com:443/publications/CA053119-CORP Culture of Compliance: M&A Transactions Subject To U.S. Department of Treasury Scrutiny https://www.seyfarth.com:443/publications/CA053119-CORP Fri, 31 May 2019 00:00:00 -0400 <div> <em><strong>Seyfarth Synopsis</strong>: On May 2, 2019, the U.S. Department of the Treasury&rsquo;s Office of Foreign Assets Control (&ldquo;<strong>OFAC</strong>&rdquo;) released explicit guidance outlining its expectations for effective written sanctions compliance programs (&ldquo;<strong>SCPs</strong>&rdquo;) for organizations subject to U.S. jurisdiction. These guidelines are meant to help such organizations avoid sanctions violations and to inform if and how OFAC will evaluate such violations and assess penalties. OFAC focuses on M&amp;A transactions within these compliance guidelines and highlights certain data points that it will assess in the context of scrutinizing any M&amp;A transaction in relation to sanctions violations-related enforcement actions.&nbsp;</em></div> <div> &nbsp;</div> <div> The U.S. government imposes economic and trade sanctions against certain targeted foreign governments, individuals, groups and entities in accordance with national security and foreign policy goals and objectives. Consequently, OFAC strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the U.S., U.S. persons, or using U.S.-origin goods or services, to employ a risk-based approach to sanctions compliance by developing, implementing, and routinely updating an SCP.&nbsp;</div> <div> &nbsp;</div> <div> If and when there is a sanctions-related violation implicated in any given transaction, OFAC may bring an enforcement action against the parties subject to U.S. jurisdiction. These enforcement cases usually entail an investigation by OFAC and a determination based on OFAC&rsquo;s Economic Sanctions Enforcement Guidelines (Appendix A to Part 501 of 31 C.F.R.) (&ldquo;<strong>Guidelines</strong>&rdquo;). Historically, OFAC has not provided any specific, prescriptive guidance on the form and content of an SCP until now.&nbsp;</div> <div> &nbsp;</div> <div> On May 2, 2019, OFAC released &ldquo;A Framework for OFAC Compliance Commitments,&rdquo; (the &ldquo;<strong>Framework</strong>&rdquo;) which serves as a roadmap that will guide OFAC in applying the Guidelines to any given factual situation. It also further informs, in detail, if and how OFAC will consider the existence, nature and adequacy of an SCP and, when appropriate, if and how OFAC will rely on these considerations in mitigating any civil monetary penalties it may choose to impose upon sanctions violators. The Framework is intended to provide organizations with a framework for what OFAC describes as five essential components upon which a risk-based SCP should be predicated:&nbsp;</div> <div> &nbsp;</div> <ol> <li> Management Commitment;</li> <li> Risk Assessment;</li> <li> Internal Controls;</li> <li> Testing and Auditing; and</li> <li> Training.</li> </ol> <div> &nbsp;</div> <div> Within each of these five elements of an effective SCP, the Framework also provides concrete examples of best practices that companies are expected to follow. For example, in the context of &ldquo;Management Commitment,&rdquo; OFAC states that &ldquo;one of the most important factors in determining&rdquo; the success of an SCP is the idea that senior management of any given organization must promote a &ldquo;culture of compliance&rdquo; throughout the organization. &ldquo;Culture of compliance&rdquo; is given no specific definition but is instead a subjective standard that OFAC states can be measured by the following criteria:&nbsp;</div> <div> &nbsp;</div> <ol> <li> The ability of personnel to report sanctions related misconduct by the organization or its personnel to senior management without fear of reprisal;&nbsp;</li> <li> Senior management messages and takes actions that discourage misconduct and prohibited activities, and highlights the potential repercussions of non-compliance with OFAC sanctions; and</li> <li> The ability of the SCP to have oversight over the actions of the entire organization, including but not limited to senior management, for the purposes of compliance with OFAC sanctions.</li> </ol> <div> &nbsp;</div> <div> M&amp;A advisors should take special heed of this &ldquo;culture of compliance&rdquo; guideline, as it is a subjective standard which serves as an impetus to ensuring a truly <em>holistic</em> evaluation of parties involved in any given merger or acquisition &mdash; especially in scenarios involving non-U.S. companies or corporations and when the surviving entity remains subject to U.S. sanctions compliance. This holistic approach should involve not just a review of written policies and protocols, but also a granular understanding of human behaviors and patterns of conduct in any given organization, be it the acquirer or the target.</div> <div> &nbsp;</div> <div> The Framework focuses on M&amp;A transactions in the context of &ldquo;Risk Assessment,&rdquo; stating that mergers and acquisitions in particular have presented &ldquo;numerous challenges with respect to OFAC sanctions.&rdquo; In stressing that compliance functions should be incorporated into the merger, acquisition and integration process of any M&amp;A deal, OFAC cites the following points as critical in undertaking an effective risk-assessment in connection with an M&amp;A transaction:&nbsp;</div> <div> &nbsp;</div> <ol> <li> Whether an organization engages in appropriate due diligence to ensure that sanctions-related issues are identified;&nbsp;</li> <li> Whether such issues are escalated to the relevant senior levels;&nbsp;</li> <li> Whether such issues are then addressed prior to the conclusion of any [M&amp;A] transaction; and&nbsp;</li> <li> Whether adequate safeguards are then incorporated into the organization&rsquo;s risk assessment process going forward.&nbsp;</li> </ol> <div> &nbsp;</div> <div> These concerns last beyond a pre-acquisition or consummation phase of an acquisition transaction, for example, but also have post-acquisition impact. To this end, OFAC&rsquo;s Framework states: &ldquo;After an M&amp;A transaction is completed, the organization&rsquo;s Audit and Testing function will be critical to identifying any additional sanctions-related issues.&rdquo;&nbsp;</div> <div> &nbsp;</div> <div> In the context of &ldquo;Testing and Auditing,&rdquo; the Framework explains that audits assess the effectiveness of an organization&rsquo;s current processes and check for inconsistencies between these and day-to-day operations. A comprehensive and objective testing or audit function within an SCP ensures that an organization identifies program weaknesses and deficiencies, and it is the organization&rsquo;s responsibility to enhance its program, including all program-related software, systems, and other technology, to remediate any identified compliance gaps.&nbsp;</div> <div> &nbsp;</div> <div> M&amp;A advisors should also remain sensitive to the published list of certain common &ldquo;Root Causes of OFAC Sanctions Compliance Program Breakdowns or Deficiencies&rdquo; which concludes the Framework. As stated, the following are essentially common causes of U.S. sanctions liability which can taint or otherwise derail an M&amp;A transaction either from its inception or well into a post-closing integration phase:</div> <div> &nbsp;</div> <ol> <li> Lack of a formal OFAC SCP;</li> <li> Misinterpreting, or failing to understand the applicability of, OFAC&rsquo;s regulations;</li> <li> Facilitating transactions by non-U.S. persons (including through or by overseas subsidiaries or affiliates);</li> <li> Exporting or re-exporting U.S.-origin goods, technology or services to OFAC-sanctioned persons or countries;</li> <li> Utilizing the U.S. financial system, or processing payments to or through U.S. financial institutions, for commercial transactions involving OFAC-sanctioned persons or countries;</li> <li> Sanctions screening software or filter faults;</li> <li> Improper due diligence on customers and clients;</li> <li> De-centralized compliance functions and inconsistent application of an SCP;</li> <li> Utilizing non-standard payment or commercial practices; and</li> <li> Individual liability.</li> </ol> https://www.seyfarth.com:443/publications/OMM053119-LIT Supreme Court: Third-Party Defendants Cannot Remove to Federal Court https://www.seyfarth.com:443/publications/OMM053119-LIT Fri, 31 May 2019 00:00:00 -0400 <p> It has long been established that a state-court plaintiff who is the subject of a counterclaim cannot remove the case to federal court. The federal removal statute provides that a state civil action may be removed to federal court only by &ldquo;the defendant or the defendants,&rdquo; 28 U.S.C. &sect; 1441(a), and, in 1941, the Supreme Court determined that the term &ldquo;defendant&rdquo; in the statute did not extend to a plaintiff against whom a counterclaim was asserted. Congress, the Court noted, had deliberately removed &ldquo;plaintiffs&rdquo; from the removal statute in an 1887 amendment, and there was no evidence that Congress intended to carve out an exception for plaintiffs who became counterclaim defendants as well. <em>See Shamrock Oil &amp; Gas Corp. v. Sheets</em>, 313 U.S. 100 (1941).&nbsp;</p> <p> But the Court&rsquo;s decision left unanswered the question of whether third-party defendants, who are not plaintiffs at all, may remove. More than seven decades later, the Court has now definitively said they may not. In <em>Home Depot, U.S.A. v. Jackson</em>, No. 17-1471 (U.S. May. 28, 2019), the Court concluded that neither the ordinary removal statute (&sect; 1441) nor the removal provision of the Class Action Fairness Act (28 U.S.C. &sect; 1453) (&ldquo;CAFA&rdquo;) allows a third-party defendant to remove.&nbsp;</p> <p> <em>Jackson</em> started with a debt collection action by Citibank against George Jackson for charges incurred on a Home Depot credit card. Jackson counterclaimed against Citibank and also filed third-party class action claims against Home Depot and another entity. After Citibank dropped its underlying claim and Jackson amended his third-party complaint to remove all references to Citibank, Home Depot removed the class claims to federal court. The district court granted Jackson&rsquo;s motion to remand, and the Fourth Circuit affirmed.</p> <p> The Supreme Court agreed that remand was proper. Justice Thomas, writing for a five-justice majority, recognized that Home Depot&rsquo;s reading of the term &ldquo;defendant&rdquo; to include third-party defendants was &ldquo;plausible&rdquo; but nonetheless found that in context it should be read to exclude such defendants. While Home Depot was a defendant to a &ldquo;claim,&rdquo; &sect; 1441 speaks of the removal of a &ldquo;civil action,&rdquo; and a district court&rsquo;s determination of its jurisdiction on removal has traditionally turned on whether the <em>action</em>, as defined by the original complaint, could have been originally brought in federal court. The Court therefore found &ldquo;defendant,&rdquo; as used in the removal statute, to mean a defendant to the claims in the original complaint. The Court also noted that reading &ldquo;defendant&rdquo; broadly could have unintended and problematic effects on the rest of the statute, such as determining which parties must consent to removal.&nbsp;&nbsp;</p> <p> The majority also concluded that CAFA does not allow removal by third-party defendants. As the Court noted, this is a &ldquo;closer question,&rdquo; because the CAFA statute permits removal by &ldquo;any defendant&rdquo; to a &ldquo;class action.&rdquo; Nonetheless, the Court concluded that &ldquo;any&rdquo; as used here was not intended to expand the removal jurisdiction granted to district courts under &sect; 1441. It merely indicates that, in a class action, the consent of all defendants is not needed&mdash;&ldquo;any&rdquo; defendant may remove without the consent of the others.</p> <p> The dissent, written by Justice Alito and joined by the Chief Justice and Justices Gorsuch and Kavanaugh, noted that the Court&rsquo;s decision ran against CAFA&rsquo;s intent to make the federal courts more readily available to class-action defendants in response to the perceived tendency of state court judges to favor class plaintiffs and freely certify classes. As the dissent noted, the Court&rsquo;s new rule means that, as happened in this case, a &ldquo;routine attempt to collect a debt from a single consumer could be leveraged into an unremovable&rdquo; class action. The majority acknowledged the dissent&rsquo;s concern but redirected the issue to Congress: &ldquo;[T]hat result is a consequence of the statute Congress wrote.&rdquo;</p> <p> Whether Congress sees fit to adjust the statute in light of this ruling remains to be seen. In the meantime, third-party class action defendants must be prepared to litigate in state court.</p> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/OMM053119-LE Breaking News—Massachusetts DFML Clarifies That Businesses Do Not Have To Provide Written Notice To 1099 Contractors Where Such Contractors Make Up 50% Or Less Of Their Massachusetts Workforce https://www.seyfarth.com:443/publications/OMM053119-LE Fri, 31 May 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis: </em></strong><em>The Massachusetts Department of Family and Medical Leave (DFML) has clarified that employers are <u>not</u> required to provide their 1099-MISC contractors the written notice of Paid Family and Medical Leave (PFML) benefits and protections where such contractors make up 50% or less of their Massachusetts workforce. This is a welcome change from the DFML&rsquo;s previous position.</em></p> <p> Under the Massachusetts PFML Law, only employers with more than 50% of their Massachusetts workforce comprised of 1099-MISC contractors (&ldquo;covered business entities&rdquo;) are required to provide notice to contractors regarding PFML benefits and protections. However, despite the statutory language, the DFML&rsquo;s previous online guidance stated that businesses needed to issue the mandatory written notice to all Massachusetts 1099-MISC contractors, even if the company fell under the 50% threshold. Further, the DFML&rsquo;s template notice to self-employed 1099-MISC contractors included information for employers that were not covered business entities and their contractors. You can access the template notice <a href="https://www.mass.gov/doc/employer-notice-to-self-employed-individual/download">here</a>.</p> <p> We raised this issue to the DFML in our written comments and during the May 24, 2019 public hearing on the proposed regulations. The DFML has since revised its online guidance on its website to state that employers that are <em>not</em> covered business entities are <em>not</em> required to send notice and collect acknowledgments from their Massachusetts 1099-MISC contractors. In its online guidance, the DFML, however, does encourage sending notice to these contractors so that these self-employed contractors become aware of their right to opt-in to the state PFML program.</p> <p> This clarification is welcome news to employers whose 1099-MISC contractors make up a minority of their Massachusetts workforce and for which issuing notice to contractors and collecting acknowledgments would have posed a difficult endeavor.</p> <p> On a separate note, we also wanted to share that the Associated Industries of Massachusetts (AIM), with whom we have partnered on a number of PFML-related efforts, recently asked State leaders to postpone the July 1 starting date of the PFML program by three months. AIM based its call for a delay on a growing concern that the marketplace, employers, and workers are not adequately prepared for the sweeping new benefits program. AIM is looking for support for its request to the Governor, Senate, and House.&nbsp; You may join in supporting AIM&rsquo;s request <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.votervoice.net_BroadcastLinks_O6pnZK7pVocDv6iscuLReg&amp;d=DwMGaQ&amp;c=fMwtGtbwbi-K_84JbrNh2g&amp;r=fIK46enRdef6tfDAOa9mDWrtpIdBuso6_h_7jmk6axE&amp;m=5m46uFYYKjlI2-eUEj-DmLIdY2HIbeSKk_A_ghlSwgI&amp;s=A7DNt1Cq_tlpY-l76F_4MYmF7RwM_vd0VNIbl4_plQo&amp;e=">through this link</a>.</p> <p> For our prior reports on the PFML Law and the proposed regulations, you may refer <a href="https://www.seyfarth.com/publications/OMM051019-LE2">here</a>, <a href="https://www.seyfarth.com/publications/OMM050119-LE">here</a>,&nbsp;<a href="https://www.seyfarth.com/publications/MA062218-LE">here</a>,&nbsp;<a href="https://www.seyfarth.com/publications/MA032719-LE">here</a>, <a href="https://www.seyfarth.com/publications/MA040219-LE2">here</a>, and <a href="https://www.seyfarth.com/publications/OMM041819-LE2">here</a>.</p> https://www.seyfarth.com:443/publications/MA053119-LE If Pain (or Anything Else), Yes Gain—Part 65: Maine Becomes First State to Enact Paid Time Off Law https://www.seyfarth.com:443/publications/MA053119-LE Fri, 31 May 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis</strong>: Earlier this week, Maine became the first state to enact a mandatory paid time off law. The law, known as the Earned Employee Leave Act, requires employers to allow employees to use earned paid leave for any reason and could have a ripple effect on how Maine and multi-state employers structure their employee paid leave benefits. The law goes into effect on January 1, 2021.</em></p> <p> On May 28, 2019, Governor Janet Mills of Maine signed the Earned Paid Leave Law (&ldquo;EELA&rdquo;)&mdash;the nation&rsquo;s first paid leave mandate requiring employers to allow employees to use earned paid leave for any reason. The trailblazer law began as a mandatory paid sick leave proposal similar to the sick leave laws that exist in 11 states and more than two dozen municipalities around the country.<a href="#_ftn1" name="_ftnref1" title="">[1]</a> However, when the legislative dust settled several months later, the EELA emerged as the country&rsquo;s first mandatory paid time off law affecting eligible employees of private employers.</p> <p> Employers have until January 1, 2021 to develop an EELA compliance plan. In the meantime, here are some of the EELA&rsquo;s highlights:</p> <ul> <li> <strong>Covered Employers:</strong> The EELA uses the definition of &ldquo;employer&rdquo; from the Maine Unemployment Compensation law; <a href="#_ftn2" name="_ftnref2" title="">[2]</a> however, the statute makes clear that any employer with more than 10 employees will be covered.</li> <li> <strong>Eligible Employees:</strong> The EELA broadly defines &ldquo;employee&rdquo; to mean &ldquo;a person engaged in employment.&rdquo;<a href="#_ftn3" name="_ftnref3" title="">[3]</a> The term &ldquo;employment&rdquo; also follows the Maine Unemployment Compensation law&rsquo;s definition, with an exception for individuals employed in a seasonal industry.<a href="#_ftn4" name="_ftnref4" title="">[4]</a></li> <li> <strong>CBAs:</strong> The EELA provides an exception for certain CBAs. Specifically, the law states that it does not apply to employees covered by a CBA between January 1, 2021 (i.e., the law&rsquo;s effective date) and the expiration of the CBA.</li> <li> <strong>Earned Paid Leave:</strong> In addition to satisfying the Maine Unemployment Compensation law&rsquo;s &ldquo;employer&rdquo; standard, the EELA states that only employers that employ more than 10 employees in the usual and regular course of business for more than 120 days per calendar year will be required to allow employees to earn paid leave.</li> <li> <strong>Accrual:</strong> Employees must be allowed to earn one hour of paid leave for every 40 hours worked, up to a maximum of 40 hours per year. While accrual begins at the start of employment, employers can impose a 120-day waiting period on when new hires can begin using their accrued paid leave.</li> <li> <strong>Rate of Pay:</strong> Employers must pay an employee for used paid leave at a rate that is at least the same base rate of pay that the employee received immediately before using the earned leave.</li> <li> <strong>Employee Notice to Employer:</strong> Employees must provide their supervisor with reasonable notice of their intent to use paid leave. An exception to this notice standard exists for emergencies, illnesses or other sudden needs. In addition, employers can require that employees schedule their paid leave in such a way that prevents undue hardship on the employer as reasonably determined by the employer.</li> <li> <strong>Preemption:</strong> The EELA expressly preempts municipalities from enacting an ordinance or rule that regulates earned paid leave.</li> <li> <strong>Penalties: </strong>Violations of the EELA could result in a $1,000 penalty per violation.</li> <li> <strong>Absent Substantive Topics:</strong> The EELA is silent on a number of topics commonly found in paid sick leave laws, including, but not limited to, year-end carryover, notice and posting, increments of use, recordkeeping, documentation, payout on termination, and frontloading. The EELA calls for the state Department of Labor to adopt paid leave rules. We expect that these rules will address some or all of the above absent topics.</li> </ul> <p> Employers should begin taking steps to comply with the EELA before its January 1, 2021 effective date. Here are some steps to consider:</p> <ul> <li> Review existing paid time off policies and either implement new policies or revise existing policies to satisfy the EELA;</li> <li> Monitor the Maine Department of Labor&rsquo;s website for information on the EELA, including draft and final rules; and</li> <li> Train supervisory and managerial employees, as well as HR, on the new requirements.</li> </ul> <p> We will continue to monitor and provide updates on Maine paid leave developments as the EELA effective date approaches and on any subsequent changes.</p> <p> As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Law and sick leave requirements generally. To stay up-to-date on paid leave developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> The existing statewide paid sick leave laws include: (1)&nbsp;<a href="http://www.seyfarth.com/publications/OMM062714-LE">Connecticut</a>; (2)&nbsp;<a href="http://www.calpeculiarities.com/2015/07/14/at-last-amendments-to-cas-paid-sick-leave-law-signed-by-governor/">California</a>; (3)&nbsp;<a href="http://www.seyfarth.com/publications/MA061915-LE">Massachusetts</a>; (4)&nbsp;<a href="https://www.seyfarth.com/publications/MA020416-LE">Oregon</a>; (5)&nbsp;<a href="http://www.seyfarth.com/publications/MA031716-LE">Vermont</a>; (6)&nbsp;<a href="https://www.seyfarth.com/publications/MA120817-LE">Arizona</a>; (7)&nbsp;<a href="http://www.seyfarth.com/publications/MA102717-LE">Washington</a>; (8)&nbsp;<a href="https://www.seyfarth.com/publications/MA020918-LE">Maryland</a>; (9)&nbsp;<a href="http://www.seyfarth.com/publications/MA061218-LE">Rhode Island</a>; (10)&nbsp;<a href="https://www.seyfarth.com/publications/MA102618-LE2">New Jersey</a>; and (11) <a href="https://www.seyfarth.com/publications/MA031419-LE">Michigan</a>. The existing local paid sick leave ordinances include: (1) San Francisco, CA; (2) Washington, D.C.; (3) Seattle, WA; (4) Long Beach, CA; (5) SeaTac, WA; (6) New York City, NY; (7) Los Angeles, CA (2 laws); (8) Oakland, CA; (9) Philadelphia, PA; (10) Tacoma, WA; (11) Emeryville, CA; (12) Montgomery County, MD; (13) Pittsburgh, PA; (14) Santa Monica, CA; (15) Minneapolis, MN; (16) San Diego, CA; (17) Chicago, IL; (18) Berkeley, CA; (19) Saint Paul, MN; (20) Cook County, IL; (21) Austin, TX; (22) Duluth, MN; (23) San Antonio, TX; (24) Westchester County, NY; and (25) Dallas, TX. Some of the above local sick leave ordinances are not yet in effect, either because their effective date is scheduled for the coming months or has been delayed as part of an ongoing legal challenge.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> At a high level, the Unemployment Compensation law defines &ldquo;employer&rdquo; to include any individual or type of organization that has one or more individuals performing services for it within the state of Maine and either (a) paid wages of $1,500 or more during any calendar quarter in either the current or preceding calendar year, or (b) for some portion of a day in each of 20 different weeks within the current or the preceding calendar year has or had in employment at least one individual.</p> </div> <div id="ftn3"> <p> <a href="#_ftnref3" name="_ftn3" title="">[3]</a> The Maine Department of Labor provides <a href="https://www.maine.gov/labor/misclass/employment_standard.shtml">guidance</a> on the employment standard employers should use when assessing &ldquo;employee&rdquo; versus &ldquo;independent contractor&rdquo; status.</p> </div> <div id="ftn4"> <p> <a href="#_ftnref4" name="_ftn4" title="">[4]</a> &ldquo;Seasonal Industry&rdquo; is defined as &ldquo;an industry in which, because of the seasonal nature thereof, it is customary to operate only during a regularly recurring period or periods of less than 26 weeks in a calendar year.&rdquo;</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/MA053119-LE2 No Safe Landing for Westchester County, NY Employers—County Enacts Standalone Paid Safe Leave Law https://www.seyfarth.com:443/publications/MA053119-LE2 Fri, 31 May 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Earlier this month, and only weeks after its new Earned Sick Leave Law (&ldquo;ESLL&rdquo;) took effect, Westchester County, NY enacted the Safe Leave Time Law (&ldquo;SLTL&rdquo;). Effective approximately October 30, 2019, the SLTL requires employers to provide all eligible employees with 40 hours of paid leave that can be used for certain reasons relating to domestic violence or human trafficking. The SLTL&rsquo;s 40 hours of paid leave will be in addition to any sick leave provided by the ESLL.</em></p> <p> Westchester County was first infected with the nation&rsquo;s paid sick leave bug late last year, when it became the second New York State locality <strong>&mdash;</strong> and first county <strong>&mdash;</strong> to pass a mandatory paid sick leave ordinance.&nbsp;That mandate, known as the Earned Sick Leave Law (&ldquo;ESLL&rdquo;), went into effect on April 10, 2019. As noted in our prior alerts <a href="https://www.seyfarth.com/publications/MA041119-LE">here</a> and <a href="https://www.seyfarth.com/publications/MA110718-LE">here</a>, the ESLL allows eligible employees to use up to a maximum of 40 hours of earned sick leave per year.<a href="#_ftn1" name="_ftnref1" title="">[1]</a> In addition and unlike the <a href="https://www.seyfarth.com/publications/MA050718-LE">NYC Earned Safe and Sick Time Act</a> (&ldquo;ESSTA&rdquo;), <a href="https://www.seyfarth.com/publications/MA041318-LE">New Jersey Earned Sick Leave Law</a>, and many other existing paid sick leave laws and ordinances, the ESLL contains no &ldquo;safe time&rdquo; reason for use.</p> <p> Despite the ESLL&rsquo;s silence, paid &ldquo;safe time&rdquo; will be coming to Westchester County later this year. On May 3, 2019 and following unanimous passage by the County Board of Legislators, County Executive George Latimer signed the Safe Leave Time Law (&ldquo;SLTL&rdquo;). The SLTL goes into effect 180 days after its adoption, or approximately October 30, 2019. Notably, instead of amending the ESLL to include &ldquo;safe time&rdquo; among the reasons for which eligible employees can use their existing paid sick leave benefit, the County has introduced the SLTL as an additional <strong>&mdash; </strong>as opposed to complimentary <strong>&mdash;</strong> paid leave mandate.</p> <p> Here are some of the SLTL&rsquo;s highlights.<a href="#_ftn2" name="_ftnref2" title="">[2]</a></p> <ul> <li> <strong>Obligation to Provide <u>Paid</u> Safe Leave: </strong>Unlike the ESLL, which as noted in footnote 1 distinguishes between small and large covered employers and only requires the latter to provide <u>paid</u> sick leave, the SLTL requires <u>all</u> covered employers to provide <u>paid</u> safe leave.</li> <li> <strong>Covered Employer: </strong>&ldquo;Employer&rdquo; is broadly defined to include any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service.</li> <li> <strong>Employee Eligibility: </strong>The SLTL also broadly defines &ldquo;Employee&rdquo; to mean &ldquo;any person employed for hire by an employer in any employment within Westchester County for more than 90 days in a calendar year who performs work on a full-time or part-time basis.&rdquo;</li> <li> <strong>Amount of Safe Leave and Relation to ESLL: </strong>Unlike existing paid sick leave laws and ordinances, the SLTL does not contain accrual or carryover provisions. Instead, all eligible employees are entitled to take up to 40 hours of paid leave for covered reasons per year.<a href="#_ftn3" name="_ftnref3" title="">[3]</a> The SLTL is clear that such leave &ldquo;<strong><em>shall be in addition to sick leave</em></strong>&rdquo; required by the ESLL.</li> <li> <strong>Increments of Use: </strong>The SLTL vaguely states that safe leave can be used in &ldquo;full days and/or increments.&rdquo; Through administrative guidance or regulations, we suspect that the County will clarify whether employers can impose a minimum usage increment in the coming months.</li> <li> <strong>Reasons for Use: </strong>Safe leave can be used by &ldquo;[e]mployees who are victims of domestic violence or victims of human trafficking . . . in order to: attend/testify in criminal and/or civil court proceedings relating to domestic violence or human trafficking and/or to move to a safe location.&rdquo; <ul> <li> <u>Note on Family Members:</u> The SLTL appears to limit employees&rsquo; use of paid safe leave to their own instances of domestic violence or human trafficking and not to instances of certain &ldquo;family members.&rdquo; This would deviate from &ldquo;safe time&rdquo; provided under many existing paid sick leave laws, including the New York City ESSTA. The County may provide additional clarity on this point in the coming months.</li> </ul> </li> <li> <strong>Notice to Employer: </strong>The SLTL&rsquo;s notice provisions mirror the ESLL in the following ways: <strong>(1)</strong> the SLTL generally states that paid safe leave shall be provided upon an employee&rsquo;s request; <strong>(2) </strong>a request for paid safe leave may be made orally, in writing, electronically, or by any other means acceptable to the employer; and <strong>(3) </strong>the SLTL contemplates that where an employee&rsquo;s need to use safe leave is foreseeable, the employee must make a good faith attempt to provide advanced notice to the employer and make reasonable efforts to schedule the leave in a way that does not unduly disrupt the employer&rsquo;s operations. Also like the ESLL, the SLTL lacks language regarding notice standards for unforeseeable absences.</li> <li> <strong>Documentation: </strong>Unlike the ESLL,<a href="#_ftn4" name="_ftnref4" title="">[4]</a> the SLTL does not provide a certain amount of time that an employer must wait before it can request &ldquo;reasonable documentation&rdquo; that paid safe leave was used for a permissible purpose. Instead, the SLTL merely notes that employers may require such documentation of employees, and that employees may provide any one of the following to satisfy the requirement: <strong>(1) </strong>a court appearance ticket or subpoena; <strong>(2) </strong>a copy of a police report; <strong>(3) </strong>an affidavit from an attorney involved in the court proceeding relating to the issue of domestic violence and/or human trafficking; and <strong>(4)</strong> an affidavit from an authorized person from a reputable organization known to provide assistance to victims of domestic violence and victims of human trafficking.<a href="#_ftn5" name="_ftnref5" title="">[5]</a></li> <li> <strong>Retaliation: </strong>The SLTL&rsquo;s retaliation provisions mirror those of the ESLL. Among other things, the SLTL prohibits employers from&nbsp;<strong>(1)</strong>&nbsp;interfering with or restraining an employee&rsquo;s exercise or attempt to exercise SLTL rights,&nbsp;<strong>(2)&nbsp;</strong>counting paid safe leave as an absence that may lead to adverse employment action, and&nbsp;<strong>(3)&nbsp;</strong>retaliating or discriminating against an employee for requesting to use or using paid safe leave, filing a complaint, or informing other employees of their SLTL rights.</li> <li> <strong>Notice, Posting, and Recordkeeping: </strong>Notably, unlike the ESLL, the SLTL does not contain recordkeeping provisions. In line with the ESLL, however, the SLTL&rsquo;s employer notice and posting obligations include: <strong>(1)&nbsp;</strong>providing employees with both a copy of the SLTL&nbsp;<strong><em>and</em></strong>&nbsp;written notice of how the SLTL applies to the employee at the commencement of the employee&rsquo;s employment or within 90 days of the SLTL&rsquo;s effective date, whichever is later; and&nbsp;<strong>(2)&nbsp;</strong>displaying both a copy of the SLTL and a poster in English, Spanish, and any other language deemed appropriate by the County in a conspicuous location accessible to employees. <ul> <li> <u>Note:</u> It is likely that the County will release both a model safe leave notice and poster in the coming months. Our prior alert noted uncertainty as to whether the ESLL notice and poster would be the same document as the County had only released a model notice during the initial days the ESLL was in effect. The County has since released a model sick leave <a href="https://humanrights.westchestergov.com/images/stories/pdfs/2019slposter.pdf">poster</a> as well.</li> </ul> </li> <li> <strong>Reverse Preemption: </strong>As does the ESLL, the SLTL provides that it shall be null and void on the effective date of any future statewide or federal legislation incorporating the same or substantially similar provisions as those contained in the SLTL.</li> </ul> <p> Employers should take steps now to comply with the SLTL before its approximate October 30, 2019 effective date. Here are some steps to consider:</p> <ul> <li> Review existing sick and safe leave policies and either implement new policies or revise existing policies to satisfy both the SLTL and ESLL;</li> <li> Review policies on attendance, anti-retaliation, conduct, and discipline for compliance with the both the SLTL and ESLL;</li> <li> Monitor the Westchester County Board of Legislators&rsquo; and County Executive&rsquo;s websites for information on the SLTL, including a model poster and notice; and</li> <li> Train supervisory and managerial employees, as well as HR, on the new requirements.</li> </ul> <p> We will continue to monitor and provide updates on Westchester County paid safe leave and paid sick leave developments as the SLTL effective date approaches and on any subsequent changes.</p> <p> As the PSL landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Law and sick leave requirements generally. To stay up-to-date on PSL developments, <a href="http://marketing.seyfarth.com/reaction/RSGenPage.asp?RSID=46_CcQ6ql8Lkw6aicQPtbWkBfaxfQM19fM28NxhOC7Y&amp;RS_REFERRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj&amp;RS_ORIGRSID=46_CcQ6ql8Lkw6aicQPtbTM3fBrFqIlgZooDy0P0jkXGEn2_HUcHkvk7fbGMmqjj">click here</a> to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> The ESLL distinguishes between small and large covered employers and only requires the latter to provide <u>paid</u> sick leave.</p> </div> <div id="ftn2"> <p> <a href="#_ftnref2" name="_ftn2" title="">[2]</a> A copy of the SLTL can be found <a href="http://westchestercountyny.iqm2.com/Citizens/FileOpen.aspx?Type=4&amp;ID=20610">here</a>.</p> </div> <div id="ftn3"> <p> <a href="#_ftnref3" name="_ftn3" title="">[3]</a> Under the SLTL, a &ldquo;year&rdquo; is defined as a regular and consecutive 12-month period as determined by the employer, other than a &ldquo;calendar year,&rdquo; which is defined as January 1 to December 31 in any given year.</p> </div> <div id="ftn4"> <p> <a href="#_ftnref4" name="_ftn4" title="">[4]</a> The ESLL states that in the event of a sick leave absence of more than three consecutive work days, an employer may require the employee to provide &ldquo;reasonable documentation&rdquo; that the sick leave was used for a covered reason.</p> </div> <div id="ftn5"> <p> <a href="#_ftnref5" name="_ftn5" title="">[5]</a> Due to the sensitive nature of the paid safe leave documentation that will be received, employers should review their internal confidentiality procedures regarding document collection and storage.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/OMM053119-LE3 If Pain, Yes Gain—Part 66: Texas Legislative Session Ends Without Statewide Sick Leave Preemption; San Antonio and Dallas Mandates on Horizon https://www.seyfarth.com:443/publications/OMM053119-LE3 Fri, 31 May 2019 00:00:00 -0400 <p> <em><strong>Seyfarth Synopsis:</strong> Despite gubernatorial support, passing through the state Senate, and being reported favorably out of Committee in the House, multiple bills that likely would have preempted local sick leave ordinances in Texas if passed, did not make the deadline for consideration on the House floor. Thus, the state&rsquo;s 2019 legislative session closed earlier this week without the legislature sending a sick leave preemption bill to the Governor. With this development, as of now, the Dallas and San Antonio paid sick leave ordinances are scheduled to go into effect for most employers on August 1, 2019.</em></p> <p> The nation&rsquo;s paid sick leave (&ldquo;PSL&rdquo;) bug&rsquo;s journey south has been anything but smooth since the beginning of last year.<a href="#_ftn1" name="_ftnref1" title="">[1]</a> In February 2018, Austin became the first city in Texas &ndash; and the first Southern jurisdiction &ndash; to enact a mandatory paid sick leave law. Shortly thereafter, a number of businesses and associations filed suit seeking an injunction of the Austin ordinance&rsquo;s effective date on constitutional grounds. In November 2018, the Texas Court of Appeals for the Third District (&ldquo;Third District&rdquo;) ordered a temporary injunction after finding the ordinance to be in conflict with the Texas Minimum Wage Act. The City of Austin filed a petition for review of the Third District&#39;s decision with the Texas Supreme Court, which is currently pending.</p> <p> During the Austin PSL lawsuit, both San Antonio and Dallas enacted their own PSL ordinances that are substantially similar to the Austin ordinance and scheduled to begin for most employers on August 1, 2019. In addition, the Texas legislature introduced multiple bills aimed at preempting municipal PSL ordinances. While the preemption bills appeared poised for passage, the state legislature was unable to finalize them by May 27 &ndash; the close of the state&rsquo;s 2019 legislative session. San Antonio and Dallas employers are now left with two months to prepare for the looming sick leave mandates.</p> <p> Although the PSL bug has remained resilient in Texas thus far, the long-term fate of local Texas PSL ordinances, including those in Austin, San Antonio and Dallas, remains unclear. Specifically, future legislative developments, successful lawsuits under the same theory that has at least temporarily cured the Austin ordinance, or Texas Supreme Court rulings all could zap the local PSL bug. We will report on developments as they occur.</p> <p> In the meantime, Dallas and San Antonio employers should consider taking steps to comply with their respective mandates by August 1. At a high level, both laws allow eligible employees to accrue up to 64 hours of PSL (48 for small employers) per year at a one hour of PSL for every 30 hours worked rate, or receive a lump grant of the full amount of PSL at the start of each year. Eligible employees who accrue PSL can carry over up to the annual maximum to the following year, but regardless, eligible employees of all sized employers are limited to using a maximum of eight days of PSL per year. Like many other existing sick leave mandates, PSL can be used for &ldquo;sick&rdquo; and &ldquo;safe&rdquo; time reasons.</p> <p> We will continue to monitor PSL developments in Texas. In light of the current state of affairs, here are some measures for Dallas and San Antonio employers to consider:</p> <ul> <li> Review existing sick leave policies and either implement new policies or revise existing policies to satisfy the Dallas and San Antonio ordinances.</li> <li> Review policies on attendance, anti-retaliation, conduct, and discipline for compliance with the Dallas and San Antonio ordinances.</li> <li> Be on the lookout for further information on both ordinances including release of regulations, model notices, and other administrative guidance.</li> <li> Monitor judicial developments involving the Dallas, San Antonio, and Austin PSL ordinances.</li> </ul> <p> <br /> With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this law and sick leave requirements generally.</p> <p> To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth&rsquo;s Paid Sick Leave mailing list. Companies interested in Seyfarth&rsquo;s paid sick leave laws survey should reach out to <a href="mailto:sickleave@seyfarth.com">sickleave@seyfarth.com</a>.</p> <div> <br clear="all" /> <hr align="left" size="1" width="33%" /> <div id="ftn1"> <p> <a href="#_ftnref1" name="_ftn1" title="">[1]</a> For more information on Texas paid sick leave see our prior alerts <a href="https://www.seyfarth.com/publications/MA022318-LE2">here</a>, <a href="https://www.seyfarth.com/publications/MA082118-LE">here</a>, <a href="https://www.seyfarth.com/publications/OMM112118-LE">here</a>, and <a href="https://www.seyfarth.com/publications/MA050719-LE">here</a>.</p> </div> </div> <p> &nbsp;</p> https://www.seyfarth.com:443/publications/TS053119 Seyfarth’s Trade Secrets Group Earns Top Tier Ranking from Legal 500 for Fourth Consecutive Year https://www.seyfarth.com:443/publications/TS053119 Fri, 31 May 2019 00:00:00 -0400 <p> The 2019 edition of The Legal 500 United States recommends Seyfarth Shaw&rsquo;s Trade Secrets group as one of the best in the country. Nationally, for the fourth consecutive year, our Trade Secrets practice earned Top Tier.<br /> <br /> <a href="https://www.tradesecretslaw.com/2019/05/articles/trade-secrets/seyfarths-trade-secrets-group-earns-top-tier-ranking-from-legal-500-for-fourth-consecutive-year/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/RS053119-LE Regulatory Spring: Rulemaking by the Wage & Hour Division - May 31, 2019 https://www.seyfarth.com:443/publications/RS053119-LE Fri, 31 May 2019 00:00:00 -0400 <p> <strong>An Overview of the DOL&rsquo;s Proposed Joint Employment Rule</strong><br /> <br /> In this edition of <em>Regulatory Spring</em>, we turn to the DOL&rsquo;s third and final proposed rulemaking of early 2019: a new standard for joint employment under the FLSA. This week, we offer an overview of the rule that the DOL has proposed. In a later installment, we will provide a short survey for you to share feedback on the rule. Of course, we always welcome you to reach out to us directly with feedback or questions by emailing us at <a href="mailto:regulatoryspring@seyfarth.com">regulatoryspring@seyfarth.com</a>.<br /> <br /> To put it mildly, the DOL&rsquo;s proposed joint employment rule&mdash;if adopted&mdash;should provide welcome clarity for many businesses. This is particularly true for those most targeted by joint employment litigation, such as franchisors, staffing agencies, and businesses with subsidiaries or affiliates.<br /> <br /> With its proposed rule, the DOL endeavors to undertake formal rulemaking and establish a clear, four-factor test for determining whether an entity is a joint employer. The four factors include whether the potential joint employer exercises the power to:</p> <ul> <li> Hire or fire the employee;</li> <li> Supervise and control the employee&rsquo;s work schedules or conditions of employment;</li> <li> Determine the employee&rsquo;s rate and method of payment; and</li> <li> Maintain the employee&rsquo;s employment records.</li> </ul> <p> The proposed rule is notable not just for the factors it deems relevant, but also&mdash;if not more so&mdash;for the factors that it deems not relevant:</p> <ol> <li> In sharp disagreement with the prior administration&rsquo;s view of the joint employment standard, the proposed rule slams the door on economic dependence as a factor for joint employment. Considerations that fall into this category include, for example, whether the employee is in a job requiring special skill or has the opportunity for profit or loss based on his or her managerial skill.</li> <li> According to the DOL, the &ldquo;ability, power, or reserved contractual right to act with respect to the employee&rsquo;s terms and conditions of employment would not be relevant to that person&rsquo;s joint employer status under the Act.&rdquo; Instead, only actions actually taken would matter.</li> <li> An entity&rsquo;s business model (e.g., a franchise model), certain business practices (e.g., allowing an employer to operate on the entity&rsquo;s premises), and certain agreements (e.g., requiring an employer to institute a code of conduct) do not move the joint employment needle.</li> </ol> <p> The proposed rule also includes a set of hypothetical examples that are aimed to help illustrate the contours of the rule. The examples include, but are not limited to:</p> <ul> <li> An office park that hires a janitorial services company to clean after-hours. The park pays the company a fixed fee and reserves the right to supervise the janitorial employees. Office park personnel do not set the janitorial employees&rsquo; schedules and, in fact, do not supervise the janitorial employees. <em><strong>Outcome: the office park is not a joint employer of the janitorial employees.</strong></em></li> <li> An individual works 30 hours per week as a cook at one restaurant, and 15 hours/week at a different restaurant affiliated with the same nationwide franchise. The restaurants are locally owned and managed by different franchisees that do not coordinate in any way with respect to the employee. <em><strong>Outcome: the restaurants are not joint employers of the cook.</strong></em></li> <li> A franchise owns a hotel and is a licensee of a global franchisor&rsquo;s brand. The franchisor-brand provides the hotel with samples of an employment application, employee handbook, and other forms and documents for use in operating the franchise. The licensing agreement is an &ldquo;industry-standard&rdquo; document explaining that the franchisee is solely responsible for daily operations, including hiring/firing, setting pay rates, maintaining records, and supervising the work. <em><strong>Outcome: the global franchisor is not a joint employer of the hotel&rsquo;s employees.</strong></em></li> <li> A packaging company requests workers on a daily basis from a staffing agency. The packaging company determines each worker&rsquo;s rate of pay, supervises them, and analyzes customer demand in detail to continuously adjust their daily schedules. <em><strong>Outcome: the packaging company is a joint employer.</strong></em></li> </ul> <p> It is important to remember that the proposed rule is focused on joint employment under the FLSA. It does not touch upon joint employment under other federal laws or any state laws.<br /> <br /> In a later installment, we will provide a short survey for you to share feedback on the DOL&rsquo;s proposed joint employment rule. Please don&rsquo;t hesitate to contact us in the meantime at <a href="mailto:regulatoryspring@seyfarth.com">regulatoryspring@seyfarth.com</a> if you have any questions or feedback that you would like to share.</p> https://www.seyfarth.com:443/publications/CCD053019 U.S. Supreme Court Rules That Third-Party Counterclaim Defendants Are Not Entitled To Removal Under The CAFA https://www.seyfarth.com:443/publications/CCD053019 Thu, 30 May 2019 00:00:00 -0400 <p> From Seyfarth&rsquo;s Workplace Class Action Blog<br /> <br /> <a href="https://www.consumerclassdefense.com/2019/05/u-s-supreme-court-rules-that-third-party-counterclaim-defendants-are-not-entitled-to-removal-under-the-cafa/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/CP053019 Employer Web Therapy: Accommodating Employee Mental Health Illness https://www.seyfarth.com:443/publications/CP053019 Thu, 30 May 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Sometimes even the best employees can have their woebegone days. How is an employer to distinguish between (1) a mental disability that may require accommodation and (2) a case of someone &ldquo;having the Mondays&rdquo;? In honor of Mental Health Awareness Month, we offer some therapeutic antidotes for your queries on tackling mental illnesses at work.<br /> <br /> <a href="https://www.calpeculiarities.com/2019/05/30/employer-web-therapy-accommodating-employee-mental-health-illness/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT053019 The Week in Weed: May 31, 2019 https://www.seyfarth.com:443/publications/TBT053019 Thu, 30 May 2019 00:00:00 -0400 <p> Welcome back to the The Week in Weed, your Friday look at what&rsquo;s happening in the world of legalized marijuana.<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/05/the-week-in-weed-may-31-2019/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WLS053019 Collective bargaining: the outlook https://www.seyfarth.com:443/publications/WLS053019 Thu, 30 May 2019 00:00:00 -0400 <p> So what&rsquo;s the outlook for enterprise bargaining in Australia? Here&rsquo;s the top 7:<br /> <br /> <a href="https://www.workplacelawandstrategy.com.au/2019/05/collective-bargaining-the-outlook/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/OMM053019-LE Colorado Enacts Statewide Ban-the-Box Law for Private Employers https://www.seyfarth.com:443/publications/OMM053019-LE Thu, 30 May 2019 00:00:00 -0400 <p> <strong><em>Seyfarth Synopsis:</em></strong><em> The Colorado Governor has just signed a new law prohibiting employers from inquiring about an applicant&rsquo;s criminal history on an initial employment application. </em></p> <p> On May 28, 2019, Colorado Governor Jared Polis signed <a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_1025_enr.pdf">the Colorado Chance to Compete Act</a>&nbsp;(House Bill 19-1025), which will prohibit employers from asking about criminal history on an initial written or electronic application. Colorado employers should immediately assess whether they are covered by the new law and, if so, whether they need to update their employment applications and other pre-hire screening policies.</p> <p> <strong>Coverage</strong></p> <p> The new law broadly defines employer to mean &ldquo;a person that regularly engages the services of individuals to perform services of any nature,&rdquo; which includes any agent, representative, or designee of an employer and employment agencies as that term is defined elsewhere in Colorado law.</p> <p> It does not apply to the state, any local government, or any quasi-governmental entity or political subdivision of the state. It also will not apply to a position being offered or advertised if:</p> <ul> <li> federal, state, or local law or regulation states that someone with a specific criminal history cannot work in the position sought;</li> <li> the position is designated by the employer to participate in a federal, state, or local government program to encourage the employment of people with criminal histories; or</li> <li> the employer is required by federal, state, or local law or regulation to conduct a criminal history record check for that position, regardless of whether the position is for an employee or an independent contractor.</li> </ul> <p> <br /> <strong>Unlawful Practices</strong></p> <p> The new law makes it unlawful for an employer to:</p> <ul> <li> state in any advertisement for the position that a person with a criminal history may not apply for the position;</li> <li> state on any form of application, whether written or electronic, that a person with a criminal history may not apply for the position; or</li> <li> inquire into, or require disclosure of, an applicant&rsquo;s criminal history on an initial written or electronic application form.</li> </ul> <p> &ldquo;Criminal history&rdquo; is defined to mean &ldquo;records of arrests, charges, pleas, or convictions for any misdemeanor or felony at the federal, state, or local level.&rdquo;</p> <p> Interestingly, the law specifically allows an employer to &ldquo;obtain the publicly available criminal background report of an applicant at any time.&rdquo; While many ban-the-box laws either expressly or could be read to prohibit such a practice, Colorado expressly allows it.</p> <p> <strong>Enforcement</strong></p> <p> The law does not provide an aggrieved individual with a private right of action against a covered employer and it states that it does not create a protected class under the state&rsquo;s anti-discrimination statute. Rather, an aggrieved individual may file a complaint with the state Department of Labor. Such complaint must be brought within one year of the alleged violation. The Department is required to adopt rules regarding the procedures for handling complaints and any record retention requirements that employers will be required to follow.</p> <p> If the Department finds a violation, it will issue penalties as follows:</p> <ul> <li> First violation: a warning and an order requiring compliance within 30 days.</li> <li> Second violation: an order requiring compliance within 30 days and a civil penalty not to exceed $1,000.</li> <li> Third or subsequent violations: an order requiring compliance within 30 days and a civil penalty not to exceed $2,500.</li> </ul> <p> <br /> <strong>Next Steps</strong></p> <p> Most immediately, Colorado employers should determine whether they need to revise job applications, interview guidelines, and policies and procedures for criminal background checks. Although the Chance to Compete Act&rsquo;s restrictions will eventually apply to all employers regardless of the number of employees, the law states that its restrictions apply to employers with 11 or more employees starting on September 1, 2019, and then to &ldquo;all employers&rdquo; as of September 1, 2021. This grace period gives smaller employers additional time to bring their policies and practices into compliance.</p> <p> Employers throughout the United States, and particularly multi-state employers, should continue to monitor developments in this and related areas of the law, including laws restricting the use of credit history information and the fair credit reporting laws.</p> https://www.seyfarth.com:443/news/rodriguezpbs053019 Leon Rodriguez interviewed on PBS America From Scratch https://www.seyfarth.com:443/news/rodriguezpbs053019 Thu, 30 May 2019 00:00:00 -0400 <p> Leon Rodriguez was interviewed May 30th on PBS America From Scratch, &quot;Should the USA Build a Wall on BOTH of its Borders?&quot; You can watch the <a href="https://www.youtube.com/watch?v=f61ZE5nuNGo">full episode here</a>.</p> https://www.seyfarth.com:443/publications/WLS052919 The collective bargaining state of play (AKA risk management for employers) https://www.seyfarth.com:443/publications/WLS052919 Wed, 29 May 2019 00:00:00 -0400 <p> The genesis of enterprise bargaining in the mid 1990&rsquo;s lay in its potential to generate productivity gains at a time when workplaces were strangled by terms and conditions set for whole industries and occupations, divorced from the particular needs of a workplace. At the time, enterprise bargaining presented opportunity. But this potential is all but exhausted.<br /> <br /> <a href="https://www.workplacelawandstrategy.com.au/2019/05/the-collective-bargaining-state-of-play-aka-risk-management-for-employers/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/WC052919 U.S. Supreme Court Rules That Third-Party Counterclaim Defendants Are Not Entitled To Removal Under The CAFA https://www.seyfarth.com:443/publications/WC052919 Wed, 29 May 2019 00:00:00 -0400 <p> Seyfarth Synopsis: Defendants can remove lawsuits filed in state courts to federal courts if they meet the statutory requirements for removal under either 28 U.S.C. &sect; 1441(a) or the Class Action Fairness Act. In Home Depot U. S. A., Inc. v. Jackson, No. 17-1471, 2019 WL 2257158, at *2 (U.S. May 28, 2019), the U.S. Supreme Court ruled that Home Depot was not entitled to removal under either provision because it was brought into the lawsuit by a counterclaim filed by the original defendant. According to the Supreme Court, the term &ldquo;defendant&rdquo; in the removal statutes refers only to the party sued by the original plaintiff.<br /> <br /> <a href="https://www.workplaceclassaction.com/2019/05/u-s-supreme-court-rules-that-third-party-counterclaim-defendants-are-not-entitled-to-removal-under-the-cafa/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/EL052919 The Company You Keep – Engagement & Reputational Risk https://www.seyfarth.com:443/publications/EL052919 Wed, 29 May 2019 00:00:00 -0400 <p> Seyfarth Synopsis: This is the second in a series of blogs by our Global Modern Slavery Team dealing with how companies can get ahead of the curve of the changing legal landscape addressing business&rsquo; role and connection to modern slavery.<br /> <br /> <a href="https://www.laborandemploymentlawcounsel.com/2019/05/the-company-you-keep-engagement-reputational-risk/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/TBT052819 Too Natural for Naturalization: Even Decriminalized Marijuana Can be a Bar to US Citizenship https://www.seyfarth.com:443/publications/TBT052819 Tue, 28 May 2019 00:00:00 -0400 <p> As a number of states and the District of Columbia have moved to permit possession, use and sale of marijuana for both medicinal and recreational purposes and the business of legalized cannabis distribution has grown exponentially, federal law banning such activity remains unchanged. Deeming the trend in state law irrelevant, federal immigration authorities have in fact moved in the opposite direction. Last month, on April 19, US Citizenship and Immigration Services announced policy guidance &ldquo;to clarify that violations of federal controlled substance law, including violations involving marijuana, are generally a bar to establishing good moral character for naturalization, even where that conduct would not be an offense under state law.&rdquo; (uscis-issues-policy-guidance-clarifying-how-federal-controlled-substances-law-applies-naturalization-determinations)<br /> <br /> <a href="https://www.blunttruthlaw.com/2019/05/too-natural-for-naturalization-even-decriminalized-marijuana-can-be-a-bar-to-us-citizenship/">Read the full blog post.</a></p> https://www.seyfarth.com:443/news/meierbloomberglaw052819 Steven Meier quoted in Bloomberg Law https://www.seyfarth.com:443/news/meierbloomberglaw052819 Tue, 28 May 2019 00:00:00 -0400 <p> Steven Meier was quoted in a May 28 story from Bloomberg Law, &quot;Opportunity Zones Give Big Law &lsquo;Pop-Up&rsquo; Teams Plenty of Work.&quot; Meier said that those with strong real estate and capital markets groups with a talented and entrepreneurial tax group are very-well positioned to effectively guide their clients in navigating the opportunity zone rules.</p> https://www.seyfarth.com:443/news/adaje052719 Seyfarth's ADA statistics referenced in the Journal Enterprise https://www.seyfarth.com:443/news/adaje052719 Mon, 27 May 2019 00:00:00 -0400 <p> Seyfarth&#39;s ADA statistics were referenced in a May 27 story from the Journal Enterprise, &quot;3 Famous Companies Sued Over Website ADA Compliance.&quot; According to Seyfarth, in the first six months of 2018, a whopping 5,000 ADA lawsuits were submitted to the federal courts. You can read the <a href="http://www.isurfwebster.com/3-famous-companies-sued-over-website-ada-compliance/">full article here</a>.</p> https://www.seyfarth.com:443/news/lorberlaw360052419 Lawrence Lorber quoted in Law360 https://www.seyfarth.com:443/news/lorberlaw360052419 Fri, 24 May 2019 00:00:00 -0400 <p> Lawrence Lorber was quoted in a May 24 story from Law360, &quot;DOL Contractor Watchdog Eyeing Religious Liberty Rule.&quot; Lorber said that not many government contractors qualify as privately held, religiously affiliated or religiously directed organizations, so effects might be limited if the rule uses the same parameters as the policy directive that preceded it. But the rule may not look exactly like the directive.</p> https://www.seyfarth.com:443/publications/CDL052419 Proposed Amendment to Expand CCPA Private Action Stalls https://www.seyfarth.com:443/publications/CDL052419 Fri, 24 May 2019 00:00:00 -0400 <p> Senate Bill 561, which would have generated even greater compliance challenges and litigation risk for businesses, has been held in committee and placed on suspense. This development effectively prevents the bill from advancing for a vote and is a bit of CCPA good news for businesses. It also serves as a minor setback to consumer privacy interest groups and plaintiff-oriented trial lawyers, who were banking on even more lucrative individual consumer violation claims after January 1, 2020.<br /> <br /> <a href="https://www.carpedatumlaw.com/2019/05/proposed-amendment-to-expand-ccpa-private-action-stalls/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/GPW052419 Proposed Amendment to Expand CCPA Private Action Stalls https://www.seyfarth.com:443/publications/GPW052419 Fri, 24 May 2019 00:00:00 -0400 <p> Cross-Posted from Carpe Datum Law Blog<br /> <br /> <a href="https://www.globalprivacywatch.com/2019/05/proposed-amendment-to-expand-ccpa-private-action-stalls/">Read the full blog post.</a></p> https://www.seyfarth.com:443/publications/RS052319-LE Regulatory Spring: Rulemaking by the Wage & Hour Division - May 23, 2019 https://www.seyfarth.com:443/publications/RS052319-LE Thu, 23 May 2019 00:00:00 -0400 <div> Earlier this week, the comment period ended for the U.S. Department of Labor, Wage &amp; Hour Division&rsquo;s proposed rule increasing the salary threshold for the FLSA&rsquo;s white collar exemption.&nbsp; The proposal received more than 116,000 comments, many of which appear to be form comments that are part of a coordinated campaign by employee groups to raise the salary threshold to $51,000 or more.</div> <div> &nbsp;</div> <div> Seyfarth Shaw LLP&rsquo;s Wage &amp; Hour Litigation Practice Group submitted its own <a href="https://www.seyfarth.com/dir_docs/publications/Seyfarth-Shaw-Comment-Letter-Part-541.pdf">comments</a> to the proposed rule.&nbsp; In those comments, we:</div> <ul> <li> Supported the Department&rsquo;s decision to use the same methodology for determining the salary threshold as it employed in 2004 (which results in an expected salary threshold of $679/week in 2020);</li> <li> Supported the Department&rsquo;s decision to allow non-discretionary bonuses/commissions to satisfy the salary threshold, but requested that the Department&nbsp; increase from 10% the limitation on the amount of the salary threshold that can be satisfied by such payments;</li> <li> Requested that the Department not increase from $100,000 the salary threshold for the highly-compensated employee provisions;</li> <li> Supported the Department&rsquo;s decision to require notice-and-comment rulemaking for future salary increases;</li> <li> Requested that the Department allow additional forms of compensation (e.g., board and lodging) to be used to satisfy the salary threshold (and to clarify its position on other forms of compensation);</li> <li> Requested that the Department make no revisions to the duties tests (none were proposed); and</li> <li> Requested a minimum of 120 days for implementation.</li> <li> The Department has expressed a desire to finalize this rulemaking by the end of the calendar year, which is an ambitious goal.&nbsp; We will continue to update you as this rulemaking progresses.</li> </ul> <div> In the meantime, next week, we will turn to the final of the three rulemakings at WHD &mdash; joint employment.</div> <div> &nbsp;</div> https://www.seyfarth.com:443/publications/PM052319-LE Seyfarth Shaw Policy Matters Newsletter - May 23, 2019 https://www.seyfarth.com:443/publications/PM052319-LE Thu, 23 May 2019 00:00:00 -0400 <p> <strong>POWADA</strong>.&nbsp; On May 21, the House Committee on Education and Labor held a hearing on the &ldquo;<a href="https://www.congress.gov/bill/116th-congress/house-bill/1230?q=%7B%22search%22%3A%5B%22H.R.%201230%22%5D%7D&amp;s=1&amp;r=1">Protecting Older Workers Against Discrimination Act</a>&rdquo;&nbsp; (POWADA, H.R. 1230, S. 485).&nbsp; In a nutshell, this bill would reverse the Supreme Court&#39;s <u>Gross</u> decision concerning so-called&nbsp; &ldquo;mixed motive&rdquo; cases in which the Court held that the Age Discrimination in Employment Act has a &ldquo;but for&rdquo;&nbsp; standard which requires a plaintiff to show that age was <u>the</u> motivating factor in the employer&#39;s decision in question as opposed to merely a motivating factor, i.e. one of many. The basic justification for this change is that Title VII of the 1964 Civil Rights Act takes a different approach in these &ldquo;mixed motive&rdquo; cases by providing that if a plaintiff shows that an improper factor was a factor in the decision, the plaintiff can prevail even if that factor was not the primary one driving the employer&rsquo;s decision in the underlying personnel action. However, remedies in such a case are limited to injunctive relief and attorney&rsquo;s fees. This structure was enacted through the 1991 Civil Rights Act amendments to Title VII, and proponents of POWADA argue they are simply asking for equivalent treatment for older workers. Similar changes are made to the Americans with Disabilities Act and the Rehabilitation Act.&nbsp; Further, this mixed motive analysis would also be applied to retaliation cases.&nbsp; The bill, which has bipartisan support, is strongly supported by the AARP.&nbsp;&n