Estates and Trusts
LGBTQ+ Home Care Law Set to Go Into Effect in New York Next Month
It is no surprise to LGBTQ+ individuals and their allies that nine out of ten of those who identify as LGBTQ+ fear discrimination in medical settings. According to Services and Advocacy for Gay, Lesbian, Bisexual, and Transgender Elders (SAGE), LGBTQ+ people are two times as likely to age alone and four times less likely to have children who might otherwise serve as caregivers and advocates. This means the LGBTQ+ population is even more vulnerable as they age. As a result, and at long last, Governor Hochul signed a law that is intended to address this discrimination related to the medical care received by the LGBTQ+ community in the home care and nursing home setting. Beginning next month, New York State will require that all home health aides, certified nurses’ aides, and personal care aides – essentially the backbone of a senior’s long-term care team– will receive training focused on providing care to patients of diverse sexual orientations, expressions, and gender identities. This ambitious and much-needed law includes several components that will be incorporated into the training program. Much of the training relates to the education of the caregivers to provide comprehensive explanations of various terms related to the LGBTQ+ community. It provides an understanding of why patients with diverse sexual orientations and gender identities or expressions may conceal their identities. The goal of the training is, of course, to incorporate the concerns of these patients and ensure that they receive “person” directed care and to address the unique healthcare needs of LGBTQ+ patients. In light of the nearly 400 anti-LGBTQ+ legislative actions pending in the states across the country, it’s heartening that New York is taking the lead to combat this discrimination, especially for the most vulnerable in the LGBTQ+ population.
May 15, 2023
Estates and Trusts
Charitable Remainder Trusts: A Way of Giving Back by Paying it Forward
Many of our clients look to explore the ways in which they can give back to their favorite charities. One of the avenues worth considering is using a charitable remainder trust (CRT). CRTs are an excellent way to support your favorite charities in the future while providing an income stream now for yourself and your heirs and reducing the estate tax burden to your heirs in the future. How Charitable Remainder Trusts Work A CRT is an estate planning document, similar to a trust, that you might create to manage your assets and avoid probate. To set up a CRT, you transfer the chosen asset(s) to the trust, which a trustee then manages. You can serve as the trustee of a CRT; you could also appoint your spouse, your child, or even the charity. The trustee is responsible for investing or managing the donated assets and distributing income to you and your other income beneficiaries for your lifetime or a specified period. At the end of the trust term, the remaining assets are transferred to the charitable organizations of your choice as a charitable contribution. Types of Charitable Remainder Trusts There are two primary types of CRTs: charitable remainder annuity trusts (CRATs) and charitable remainder unitrusts (CRUTs). A CRAT pays a fixed income stream based on the initial value of the trust assets, while a CRUT pays a variable income stream based on the value of the assets determined each year. Which type of trust you choose will depend upon your personal financial goals and circumstances. A CRAT may be a better option if you want a fixed income stream and are more concerned about the stability of that income. In comparison, a CRUT may be a better option if you wish to add assets over time, are more comfortable with fluctuations in income, and wish to potentially benefit from increases in the value of the trust assets over the trust term. Benefits of Charitable Remainder Trusts Clearly, one of the primary benefits of a CRT is that you can receive income from the trust while also benefiting your favorite charity. The reason why CRTs are particularly useful is because many of our clients have highly appreciated assets with a low-cost basis, such as stocks or real estate. Instead of selling those assets, paying capital gains taxes, and then donating what is left of the proceeds to the charity, a CRT allows you to donate the highly appreciated assets to the CRT and have the CRT sell the asset, thus avoiding the capital gains tax entirely. Moreover, you are entitled to take federal and possibly a state income tax deduction for making the charitable donation to a CRT. Additionally, CRTs can provide significant estate planning benefits. Because the assets in the trust are ultimately transferred to a charitable organization, they are removed from your estate, reducing estate taxes for your heirs. CRTs can be an excellent way to support a charity while also receiving financial benefits. If you are interested in setting up a CRT, it is important to work with a qualified estate planning attorney who can help you determine the best course of action for your individual circumstances.
May 12, 2023
Family Law
Smart Home Devices and Domestic Abuse
Originally Posted 5/13/2019, no content changes. Modern homes are increasingly powered by internet-connected devices, from speakers to televisions, from thermostats to door locks, from security cameras to baby monitors. For some, this so-called “smart” technology can make life a little more convenient. For survivors of domestic violence or abuse, however, it’s fast becoming a vector for physical and psychological torment. The American Academy of Matrimonial Lawyers (AAML) recently published an article about the myriad ways abusers are weaponizing smart home devices. AAML notes that such devices “are set up by one spouse/partner but used by both spouses/partners.” It’s a situation that can create an uneven—and, at times, terrifying—power dynamic when the couple splits up and the person who has moved out of the house “wishes to destroy the emotional or mental calm of the other spouse.” In one example, an ex changed their partner’s alarm time on an Echo device from 7 am to 2 am. In another, a man spoiled his ex-wife’s food by switching off the refrigerator. Other reported incidents involve people surveilling their exes through speakers and TVs and turning up the heat remotely during summer months. In some cases, abusers seek to damage not only the psyches of their victims but survivors’ credibility as well. An article in domesticshelters.org offers a horrific pair of anecdotes: “Another abuser would repeatedly unlock a survivor’s home and car doors remotely. When the survivor tried to report it, the abuser petitioned the judge in their children’s custody case that this was a security issue he was worried about, making the survivor appear as an unfit mother. Another abuser would unlock a survivor’s electronic front door, go inside and take just one item from her home at a time, like a bracelet or a pair of shoes. The survivor kept thinking she was losing things and, in some respect, her mind along with them. She knew reporting these missing items to the police without any proof of a break-in would sound outrageous.” What can you do to protect yourself? First, make a list of all smart devices in your home and make sure you’re able to access and control each one. Change the passwords for every device as soon as a partner or spouse moves out and periodically thereafter. If you suspect that someone is spying on you, harassing you, or tampering with your home, speak to your lawyer immediately. The attorneys of Offit Kurman’s Family Law Practice Group can help you protect your home and family and obtain logging information for later use in court.
May 12, 2023
Family Law
How to Prepare for Divorce
Whatever brought you to the decision to consider divorce, as with most situations, knowledge is power. If you have determined that your spouse is considering separation or divorce, or if you have decided that you have tried to resolve matters and are ready to part ways, consulting with an experienced family lawyer will provide you with information so that you can make informed decisions. One of the first steps you should take is to prepare a chronology of events from the date of your relationship, noting important dates. The chronology need not be in great detail, but organizing your thoughts and recollection will be very helpful when it’s time for you to explain your situation to your attorney, counselors, mediators, etc. “Once and done” will relieve you of the need to review your history over and over again. Your attorney will request a summary of your and your spouse’s income, expenses, assets and liabilities. You will need to provide information as to what accounts, property, etc., is jointly or solely owned by one or both of you or if the assets are owned by a corporation or partnership. Generally speaking, you will be asked to provide the following documents: Income tax returns for the past five years Recent pay stubs for you and your spouse Bank statements for all joint and separate accounts Estate plans, including trust information Shareholder or partnership agreements Titles to cars, boats, airplanes, etc. Information regarding cryptocurrency Retirement plan statements Investment account statements Information regarding all debt - including mortgages, HELOC Accounts, personal loans, etc. Investment account statements Information regarding inheritance that you or your spouse received Information regarding pre-marital assets or gifts received from someone other than your spouse (or that your spouse has received from someone other than you) Be aware that your attorney will ask you to complete a financial statement, so becoming knowledgeable of your regular expenses will be very helpful. Consider counseling, which will be very helpful during this stressful and emotional time. Choose a divorce attorney who is recognized as an expert in this field. Sandy and Cheryl are both Fellows in the American Academy of Matrimonial Lawyers as well as the International Academy of Family Lawyers, having been recognized by their peers and the Court as experts in the field of Family Law. In addition, both Sandy and Cheryl have been included in Best Lawyers, Super Lawyers and other publications.
May 11, 2023
Family Law
How to Protect Your Privacy
While you will be sharing a great deal of information during the divorce process, it is important for you to take steps to protect your privacy. You will be required to produce financial documents, and you may also be required to provide copies of emails and text messages. Emails and texts between yourself and your attorney are protected due to privilege. However, the same is not true as to communication with others. If you believe that your spouse has access to your computer, iPad or phone, you should take steps to protect your privacy. You may want to purchase a new iPad or computer that you use only when communicating with your counsel or your therapist. If you do that, ensure that you are using a password that is difficult to break, such as a phrase. It is natural to want to discuss the divorce process with friends and family, but that may be to your detriment if too much detail or strategy is shared. This is a good reason to confide in a counselor or therapist to discuss the process and your feelings.
May 11, 2023
Family Law
College Decision Day – Now, Who Pays?
May 1 is an important and exciting day for high school seniors around the country, as this day is known as National College Decision Day. On May 1 each year, high school seniors are required to have made their formal commitment to the university they intend to attend by accepting their offers of admission and placing their college deposits. While some states have laws that grant courts the authority to order a non-custodial parent to contribute to a child’s college expenses, New Jersey does not have this requirement. Instead, New Jersey law grants the court the discretion to require that divorced or separated parents both contribute to a child’s college education and related expenses. In Newburgh v. Arrigo, 88 N.J. 529 (1982), the Supreme Court of New Jersey set forth several factors to consider in determining parents’ college contributions. These factors include: whether the parent, if still living with the child, would have contributed toward the costs of the requested higher education; the effect of the background, values, and goals of the parent on the reasonableness of the expectation of the child for higher education; the amount of the contribution sought by the child for the cost of higher education; the ability of the parent to pay that cost; the relationship of the requested contribution to the kind of school or course of study sought by the child; the financial resources of both parents; the commitment to and aptitude of the child for the requested education; the financial resources of the child, including assets owned individually or held in custodianship or trust; the ability of the child to earn income during the school year or on vacation; the availability of financial aid in the form of college grants and loans; the child’s relationship to the paying parent, including mutual affection and shared goals as well as responsiveness to parental advice and guidance; and the relationship of the education requested to any prior training and to the overall long-range goals of the child. Id. at 545. Subsequent case law in New Jersey has narrowed the obligation for contribution to a period in which there is an affirmative request and subsequent agreement or Order directing each party’s contribution. See Gac v. Gac, 186 N.J. 535 (2006). If you are looking to require your ex-spouse/partner to contribute to your child’s college contribution, here are some tips to consider to help achieve a favorable outcome: Assist your child in first obtaining all available loans, scholarships, grants, and aid. Keep the other parent informed of what schools the child is considering, the tuition costs, etc. If the two of you do not reach an agreement as to how the costs will be paid by May or June immediately preceding the child’s metrication to university, you should make the appropriate application to the court to avoid application of Gac. We strongly recommend that you consult with a knowledgeable family law attorney licensed in New Jersey regarding the facts and nuances of your matter, as all cases are fact sensitive and specific to the family involved. If you would like to discuss this issue or any other with us, please contact us by email at Emily.Ingall@offitkurman.com and msmith@offitkurman.com or by phone at 929-476-0046 or 267-338-1378.
May 10, 2023
Family Law
New York’s Laws Fail to Recognize Gender Neutrality
"How are you supposed to be believed about the harm that you experience when people don't even believe that you exist?[1] The legal system has long been criticized for its lack of inclusivity and support for marginalized communities. One such community is the gender non-binary or genderqueer community. People who identify as they/them often encounter challenges in accessing justice, as the legal system is structured around a gender binary. New York's laws assume that individuals identify as either male or female, and they often fail to recognize, let alone support, those who do not conform to these traditional gender roles. In New York State, there is currently no legal recognition of non-binary gender markers like "they/them" on government issued identification documents. As a result, people who identify as they/them are often stripped of their rights and may face discrimination and exclusion in various aspects of their lives, including access to healthcare, education, employment, and housing. In addition, legal documents, such as identification cards, passports, and birth certificates, also present challenges for those who identify as they/ them, as these documents require gender marker designations. This results in many people being misgendered or having to conform to a gender identity that does not accurately represent who they are. Moreover, the legal system's lack of support for those who identify as they/them is particularly concerning when it comes to cases involving domestic violence and sexual assault. These individuals often face additional barriers to accessing justice and may be further marginalized by the legal system. Opposition From Conservative Groups There has been some opposition from conservative groups who argue that recognizing non-binary gender markers on identification documents goes against traditional gender norms and could lead to confusion or fraud. However, advocates for non-binary recognition argue that it is a necessary step towards greater inclusivity and recognition of all individuals, regardless of their gender identity. Ultimately, the decision to recognize non-binary gender markers on identification documents will be up to lawmakers and policymakers. There are solutions, however, to address the concerns raised by conservative groups regarding non-binary recognition on identification documents. One potential solution could be to provide educational resources and training for government officials and individuals on the importance of recognizing non-binary gender markers. Another solution could be to implement safeguards to prevent fraud, such as requiring additional documentation or verification. Some other types of safeguards that could be implemented include biometric identification technologies, such as facial recognition, fingerprinting, or iris scanning. These technologies can be used to verify an individual's identity and prevent fraud. However, it is important to balance the need for security with the need for inclusivity. This requires a careful consideration of the potential impact on non-binary individuals and ensuring that any safeguards do not place an undue burden on them. It also requires ongoing dialogue and collaboration between stakeholders to ensure that the needs of all individuals are being met. In Conclusion The inclusion of non-binary gender markers in government-issued documents would have a significant impact on the lives and experiences of non-binary individuals in New York State. It would provide them with greater recognition and visibility and help reduce discrimination and exclusion based on gender identity. This could also lead to improvements in healthcare, housing, employment, and other services that are often difficult for non-binary individuals to access. Ultimately, it will require a collaborative effort between lawmakers, advocates, and community members to find a solution that addresses concerns while also promoting inclusivity and recognition of non binary individuals. There are ongoing efforts to push for legislative changes and updates to the current system to be more inclusive of non-binary individuals. Organizations like the National Center for Transgender Equality and the New York Civil Liberties Union are actively advocating for these changes. It is important for non-binary New Yorkers to consult with a lawyer who has experience navigating the legal issues related to gender identity. This can include issues related to changing legal documents, accessing healthcare services and other services, and experiencing discrimination or harassment. _________________________________________________ [1] -- Alok Vaid-Menon, Beyond the Gender Binary
May 10, 2023
Business
UPDATE: Did Your Business Need a PPP Loan? Borrowers May Return Funds by May 14 Without Fear of Civil or Criminal Enforcement
This blog post may contain information that was accurate at the time of publication but could become outdated over time. We strive to provide relevant and timely content, but circumstances, facts, and data can change. Users are encouraged to verify the current status of any information presented and seek updated guidance where necessary. Originally posted on 5/6/2020, no content changes. UPDATE: On May 6 the SBA extended the safe harbor deadline to return PPP funds from May 7 to May 14 in FAQ #43. FAQ #43 also noted this is an automatic extension of the safe harbor and that borrowers do not need to apply for the extension. The safe harbor applies to any borrower who applied for a PPP loan prior to April 24, 2020 and repays it in full by May 14, 2020. As the SBA has provided little guidance on what it means to “need” a PPP loan, the SBA has promised to provide additional guidance on this issue prior to May 14, 2020. *All May 7th deadlines have been extended to May 14th In response to adverse publicity, a number of high-profile entities, including listed companies, that had received loans in recent weeks under the Paycheck Protection Program (PPP), announced that they were returning the money. The decision by these entities was prompted in part by the SBA’s publication on April 23, 2020 of FAQ 31, emphasizing that loan applicants should think carefully before certifying, as required, that the loan was really necessary to support ongoing operations considering the uncertainty of economic conditions. The stakes were raised even further on April 28, 2020, when Treasury Secretary Steven Mnuchin announced that all companies receiving more than $2 million of PPP money, and other loans as appropriate, would be audited and could face criminal prosecution if their certification of “need” was false and they did not return the money by May 14th*. Predictably this sudden scrutiny of “need” by businesses that received loans has created uncertainty and anxiety among business owners who had applied in good faith, had been able to check all the qualification boxes on the application, and felt fortunate to have received the quick infusion of capital. However, the same business owners who a few weeks ago asked their attorneys and accountants for help in applying, are now asking these same advisors, with trepidation, should they keep the money? The problem of course is that the CARES Act legislation, and supporting regulations, were hastily drafted and did not provide clarity, especially with respect to “need”. Facing a hard May 14th* deadline, what should a business owner do now if he has any concerns regarding entitlement to the loan? Certainly, this requires a case-by-case analysis, beginning with making certain that the proceeds of the loan will be put to use as Congress intended: putting workers back on the payroll promptly, i.e., within the first eight weeks of receiving the loan. If a business is in an industry that cannot function during the lockdown, e.g., hospitality, the need for PPP money is difficult to justify. Second, businesses that have access to other sources of capital through, the public securities markets, private equity or hedge funds, should take a closer look at their “need”. On a more subjective basis, any company that would consider the scrutiny of a federal audit to be bad optics, e.g., a defense contractor, should carefully consider the consequences of not being able to support the need for the money. These special circumstances aside, what should the owners of a business that received a significant PPP loan be thinking about, and doing, in the next few days before the May 14th* deadline? If a borrower decides to retain the PPP Funds, affirmative steps must be taken now, if they have not been taken already, to document in writing the need for the loan. Put differently, in the event of audit by the SBA, the borrower must demonstrate that it had a good faith belief that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” While the Treasury and SBA have provided very little guidance on the interpretation of this borrower certification, documentation to establish a good faith belief should examine all issues the borrower faces as to economic uncertainty and necessity of the funds. Projections of revenue and cash flow under various scenarios should be made, with the margin of solvency resulting from each scenario closely analyzed. Further, the borrower should focus on issues specific to its business and also in the industry/region in which the borrower operates. Specifically, the borrower should review and document, among other items: Financial stability - budgets and projections, including payroll shortfall projections; Liquidity - cash on hand and alternative sources of funds; Geographic Location – will the area and region in which the borrower operates open first or last; Risks – is the borrower a favored “mom and pop” business; Employee Availability – cost to train, find and replace staff; Materiality of the Loan Amount – will the business be able to operate without the loan and for how long; Sensitivity to Public Scrutiny – what is the impact of an audit on prospective business opportunities; and Projected Uses of the Funds – when and how. Although the absence of clarity in the PPP legislation and rules makes good faith compliance challenging and uncertain for all, business owners should address these issues with a team of advisors including their attorneys and accountants.
May 8, 2023
Business
Why is M&A Due Diligence Important?
The success of a Merger and Acquisition (M&A) deal depends heavily on the due diligence process. Due diligence refers to the investigation and analysis of a company's financial and legal information to identify potential risks and opportunities associated with an M&A transaction. M&A due diligence is critical for several reasons. First, it helps the acquiring company to identify potential risks associated with the acquisition, such as legal or financial liabilities, compliance issues, or hidden costs. This information is vital in negotiating the terms of the deal and determining the fair value of the target company. Second, due diligence can help identify potential synergies and opportunities for growth that the acquisition may bring. By analyzing the target company's financial and operational data, the acquirer can identify areas where cost savings can be made, revenue can be increased, or efficiencies can be gained. Lastly, due diligence can help the acquirer to develop an integration plan and manage the transition process more effectively. By understanding the target company's operations and culture, the acquirer can plan and execute a seamless integration that minimizes disruption and maximizes value. Key Steps in M&A Due Diligence The due diligence process can be complex and time-consuming, involving a range of activities, such as financial analysis, legal review, and operational assessments. Below are some of the key steps involved in M&A due diligence: Identify Key Areas for Investigation: The first step in the due diligence process is to identify the key areas of investigation. This may include financial statements, tax records, legal documents, customer contracts, employee agreements, and operational data. Conduct Financial Analysis: The financial analysis involves a detailed review of the target company's financial statements, including income statements, balance sheets, and cash flow statements. This analysis helps identify potential financial risks and opportunities associated with the acquisition. Review Legal Documents: The legal review involves a thorough analysis of the target company's legal documents, such as contracts, agreements, leases, and intellectual property rights. This review helps identify any legal risks or liabilities associated with the acquisition. Assess Operational Data: The operational assessment involves a review of the target company's operations, including production processes, supply chain management, and customer service. This assessment helps identify potential synergies and opportunities for operational improvement. Identify Risks and Opportunities: Based on the findings of the due diligence process, the acquirer can identify potential risks and opportunities associated with the acquisition. This information is used to negotiate the terms of the deal and develop an integration plan. Develop an Integration Plan: The integration plan outlines the steps required to integrate the target company into the acquirer's operations successfully. This plan should address key areas such as organizational structure, culture, systems integration, and communication.
May 4, 2023
Labor and Employment
What You Should Know About the New Pregnant Workers Fairness Act
There’s another new federal law providing additional protections to pregnant employees. The Pregnant Workers Fairness Act (PWFA) requires employers with 15 or more employees to provide “reasonable accommodations” to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an “undue hardship.” It becomes effective on June 27, 2023. Beginning on that date, the U.S. Equal Employment Opportunity Commission (EEOC) will accept charges based upon violations of this law. To date, the EEOC has issued no proposed regulations, although it will do so. It offers some guidance here. Your state may already have a similar law, but even if it does, the EEOC guidance may be helpful. The PWFA adopts the familiar ADA interactive process in order to determine if the limitations may be accommodated without undue hardship. The EEOC defines “undue hardship” as “significant difficulty or expense for the employer.” The House Committee on Education and Labor Report on the PWFA provided some examples of accommodations, including the ability to sit or drink water; receive closer parking; have flexible hours; receive appropriately sized uniforms and safety apparel; receive additional break time to use the bathroom, eat, and rest; take leave or time off to recover from childbirth; and be excused from strenuous activities and/or activities that involve exposure to compounds not safe for pregnancy. It’s sometimes difficult to determine whether a request for accommodations is reasonable or an undue hardship. Don’t assume that the request is a hardship. Remember that a leave of absence may be a reasonable accommodation; consult your employment attorney, who can provide the latest court guidance on the issue.
May 3, 2023
Labor and Employment
The Power of Mediation: Mediator Settles Fox News v. Dominion Voting Systems During European River Cruise
Mediator to the rescue again! Mediator Jerry Roscoe was called in by counsel for Fox News and Dominion Voting Systems at the eleventh hour the night before the trial began. A huge amount of money and public images were at stake in the defamation trial. After attorneys failed to broker a deal over the weekend, Judge Davis had ordered the parties to attempt again to settle. At the time of the call, Mr. Roscoe was celebrating his birthday on a cruise ship sailing from Budapest to Bucharest. Notwithstanding this situation, he accepted the surprise job and reportedly estimated that he conducted as many as 50 calls with the parties from Sunday night through Tuesday afternoon (when the jury was selected and sworn in). CNN quoted Mr. Roscoe driving home the point: “Presence in the courtroom often tends to crystalize the focus of the risks and benefits of litigation. “Once the jury sits down and you’re looking at people who are going to decide your fate, it’s an awakening experience.” The moral of the story: don’t pay astronomical court and attorneys’ fees only to roll the dice with a jury in the public eye. Instead, save time, money, and reputation by agreeing to privately mediate disputes between employers and employees. Put it in writing and make sure it’s a legally enforceable agreement. Moreover, other commercial disputes include a mediation clause. Agree to settle arguments with your neighbors, even without a written agreement. I’ve mediated those, too. This is another example of the wisdom of calling a mediator. Sometimes, we perform what seems like an impossible task. Kudos to Mr. Roscoe for settling a case for one of the largest defamation awards in history.
April 27, 2023
Estates and Trusts
“de facto” Wills and the Harmless Error Rule – Part One
This is the first of a two-part article on “de facto” wills based in substantial part on a piece I previously published several years ago in the Virginia State Bar’s Trusts and Estates Section Newsletter, Vol. 22 No. 13. In part one, I explain the basics of the statutory Harmless Error Rule and how when timely seeking a court’s application of the Rule, an otherwise non-compliant, legally deficient will might nevertheless be deemed to be legally enforceable in certain circumstances. Is a document that is not valid will capable of being deemed a will – a “de facto” will, if you will? Yes, a document intended to be a will, but failing to satisfy all the statutory requirements for being automatically accepted as such, might nevertheless be capable of being deemed a will in appropriate circumstances. To understand what I mean by a “de facto” will, it is first necessary to appreciate what it takes to be a valid will. Not every state applies the same test for recognizing a valid or “self-proving” will, i.e., a document that is legally accepted as a will without the need for any additional evidence. If all the necessary signature attestation requirements have been followed (for instance, notarized signatures, witnesses’ signatures, etc.) -- what I like to refer to simply as all of the attestation “whistles and bells,” a document will be accepted officially without the need for anyone to testify or otherwise establish the specifics as to how it was prepared, who was present at the time, etc. The will, in effect, proves itself! Not every document intended as a will meets all the statutory requirements, however. Formerly, a document intended as a will without all the whistles and bells was simply rejected as if it had never been written. Nowadays, with the adoption of the so-called “Harmless Error Rule,” or, simply, “the Rule,” an otherwise legally deficient document determined to have been intended as a will (or an improperly carried out change to an otherwise proper will) may be upheld as a valid testamentary disposition in certain circumstances. In other words, even if you screw it up, legally speaking, the law now allows for certain screw-ups to be overlooked or overcome with sufficient evidence as to what you really meant to do. Section 64.2-404 calls upon a will proponent to establish by clear and convincing evidence that the decedent intended the document or writing as or to accomplish one of several possible outcomes: adding to, altering, or revoking an existing will; making a new will; or reviving a previously revoked will in whole or in part. Virginia Code Section 64.2-404, derived from Section 2-503 of the Uniform Probate Code (UPC), is Virginia’s enactment of the Harmless Error Rule. In effect, the Rule states that certain defects may be forgiven if sufficient proof can be shown at trial that the testator intended the faulty document to be the testator’s will. One seeking to have such a document upheld as a will, known as the “proponent” of the will, must present clear and convincing evidence to establish that the testator intended the document (or alteration) to effect a final testamentary disposition, that is to say, a transfer at death. A key word here is “final.” The actual statutory language allows a writing not executed with all the proper attestation whistles and bells to be admitted to probate as a will if it is supported by clear and convincing evidence of intentionality and finality. The purpose of the Rule is to allow a judge to excuse certain otherwise harmless errors in creating a will in much the same manner as has long been allowed for similar mistakes made with other important end-of-life documents such as with life insurance beneficiary designations, for example. Case studies and evidence considered during the development of the statutory Rule suggested that the remedial impact of the Rule would primarily apply in situations either where witness signatures were lacking or instances where the testator marks up an otherwise valid will (for example, inserting/adding a provision or crossing out one term or name and replacing or substituting another in its place). Let it be said here for emphasis -- one should not make such changes to a properly executed final will document. Don’t do it! As should be plain from context, doing so potentially invalidates the entire document. Minimally, it calls into question the finality of the document as a whole and raises questions as to the timing of the change, the capacity of the person at the time of making the change, and, absent proper witnessing, whether the change was made by the testator him- or herself (or perhaps with some form of “gun to the head” when doing so!). One of the key factors to be considered if a court is to be convinced that any missing whistle or bell is, in fact, harmless error is the extent to which the proponent can establish convincingly the circumstances at the time the testator created the less than perfect document or made any changes to an existing document. What about handwritten (or holographic) wills -- the exception to the exception? It is true that, at least in Virginia, a signed will prepared entirely in the handwriting of the testator is legally sufficient as a will, even without all the attestation whistles and bells. A fully handwritten will does not need to be witnessed or notarized to be valid and enforceable. Such an exception is still subject to burdens of proof imposed on the will’s proponent. For instance, a proponent of such a will faces the burden of establishing sufficiently that the handwriting and signature are that of the testator. In part 2, I will address Virginia’s non-uniform additions to the Harmless Error Rule (the signature requirement and one-year limitations period); what one might look for when trying to meet the heightened “clear and convincing” evidentiary burden. This work is intended for the non-lawyer wondering whether to involve a lawyer in the preparation of one’s will or a change to one previously made (you absolutely should!) and for family members or friends of departed loved ones who discover a document which you think might or could have been an attempt by the dearly departed to express their testamentary wishes in a form and manner that may or may not be legally sufficient to be accepted as the final will of the decedent. If you happened upon this article while conducting on-line legal research on the subject, I commend you to the prior publication. The earlier piece was intended for legal practitioners, complete with case and statutory citations and cross-references to scholarly sources upon which I relied at the time. Since publishing the original work, I have continued to be involved in cases with ever-evolving fact patterns of situations where proponents and opponents legally battle over the legal enforceability of documents which may or may not have been intended as testamentary dispositions, i.e., will documents seeking to dispose of one’s property at death.
April 27, 2023
Family Law
Current Policy on Sealing Adoption Records and the Need for Change
Beginning in the early 1900s, almost every state in the United States enacted legislation to permanently seal an adoptee’s original birth certificate and the records from the adoption proceeding. The process of sealing an adoptee’s birth records originated to protect adoptees from social attitudes and stigmas towards illegitimacy. Throughout the early 1900s, the prevailing view was to keep records sealed until the adoptee became an adult when they could then receive their records and their birth parent’s information. Only after World War II did states enact statutes that sealed the adoption records for all parties, and the only way to release these records was by court order. This type of sealed records statute is one that most states still retain today. The process of sealing an adoptee’s birth records originated to protect adoptees from social attitudes and stigmas towards illegitimacy. In the 1970s, adoptees began challenging the sealed records process as they asserted their right to know their biological background, medical history, and related information. These challenges were brought in largely due to changes in society, specifically surrounding stigmas and views on race and religion, as transracial adoptions became popular. In many instances, society started to view adoption as a blessing. Award-winning actress and singer Kristin Chenoweth has publicly stated how she feels about her adoption — “an adoption is a full circle blessing.” In terms of her feelings regarding her birth mother, she said, “I knew my birth mother loved me so much that she wanted to give me a better life.” Chenoweth’s statements reflect a change in how society views adoption, specifically that the negative stigmas prevalent in the 1900s are no longer prevalent today. States that have passed this type of legislation require agencies to write complete adoptive profiles on the adoptee and their biological parents at the time of their adoption placement. State legislatures began responding to adoptees’ assertions of their “right to know” by enacting provisions allowing adoptees access to non-identifying information about their adoption. States that have passed this type of legislation require agencies to write complete adoptive profiles on the adoptee and their biological parents at the time of their adoption placement. Although this profile gives an adoptee some information, such as the demographics of their birth parents, states are still in control of how much information can be shared. Most only allow non-identifying information, usually consisting of descriptive details about an adoptee’s birth relatives. This information includes the date and place of birth, age of the birth parents, general physical description, race, religion, and medical history of the birth parents at the time of birth. States that have passed this type of legislation require agencies to write complete adoptive profiles on the adoptee and their biological parents at the time of their adoption placement. On the other hand, identifying information consists of names, addresses, employment, and additional information that may lead to identifying the birth parents. While non-identifying information can provide an adoptee with some sense of their background, many jurisdictions still limit the release of this information. In attempting to limit the release of information, most adoption statutes provide for all records to be sealed unless specific circumstances are met, such as a compelling demonstration of good cause, the protection and/or promotion of the welfare and best interest of the child, or medical necessity. Other states have implemented a system of good cause, establishing a burden on the requesting party to demonstrate that there is a medical or psychiatric need for the sealed information and that the information is not attainable elsewhere. In attempting to limit the release of information, most adoption statutes provide for all records to be sealed unless specific circumstances are met… However, as adoptions have become more popular and the stigmas surrounding the non-traditional family have subsided, some states have implemented programs that, while limiting, do provide adoptees with some information. For example, states such as Arkansas and Iowa have created Mutual Consent Registries. These registries are one method used to arrange the consents that are required for the release of identifying information, wherein an individual directly involved in an adoption (either the birth parent or the adoptee) can indicate their willingness, or lack thereof, in having their identifying information disclosed. However, as adoptions have become more popular and the stigmas surrounding the non-traditional family have subsided, some states have implemented programs that, while limiting, do provide adoptees with some information. While states have certainly made progress in an adoptee’s access to information in the 20th century, many of these systems are ineffective because they are not properly or commonly advertised, and there are no informational guidelines in place to demonstrate how they work. Additionally, states have made small but significant changes in recent years, and minimal information is publicized regarding the changes in place and how they impact adoptees. Curious about what your state’s laws are? Stay tuned for updates on New York and New Jersey's current laws, recent amendments, and recommended improvements.
April 26, 2023
Estates and Trusts
Can Your Spouse Disinherit You? How Marriage Protects the Family
It’s the stuff of low-budget movies. The grieving widow, dressed in black with her face veiled, sits in the attorney’s oak-paneled conference room for the reading of the will. Mystery surrounds the proceedings. Who among the family members present will inherit the patriarch’s vast estate? The gray-headed attorney breaks the will’s wax seal and begins to read. Dramatic music swells as he utters phrases like “being of sound mind,” “heirs of the body,” and “give, bequeath, and devise.” The widow’s gaze intensifies as the attorney comes to the words she has been waiting for: “And to my wife of many years, I leave . . . nothing.” Audible gasps are heard as the widow faints in despair and is carried to a nearby sofa. Had her years of dutiful service meant nothing to the man she loved? So much fiction. In the real world, there is no reading of the will (the beneficiaries will likely receive a copy by email). Women seldom wear veils. And a would-be disinherited spouse has options. One of the benefits of marriage is protection from disinheritance. In fact, one of the benefits of marriage is protection from disinheritance. In Maryland, a surviving spouse can “elect against the will” by taking a “spousal share.” This usually amounts to one-half or one-third of the estate, depending on whether there are children. But conniving spouses were known to game the system. Some would transfer their property into a trust or name someone other than their spouse as the beneficiary on assets like retirement accounts and life insurance, which transfer outside the will. Maneuvers such as these placed the assets beyond the reach of the spousal share, and surprisingly enough, they were perfectly legal. To protect the surviving spouse from such attempts at disinheritance, Maryland has expanded the pool of assets that are subject to the elective share. A surviving spouse can now take a share of the “augmented estate.” This includes both the “probate” assets of the estate and any “non-probate” assets, which transfer outside the will. Probate and Non-probate Assets Probate assets include any property a deceased person owned in his or her name alone, such as a bank account, house, or investment portfolio. This property is controlled by the person’s will and generally goes to the beneficiaries named in the document. Non-probate assets, on the other hand, include things like retirement accounts and life insurance policies, which generally name a beneficiary directly on the asset. The beneficiary will receive the account or death benefit regardless of what the will might say. Non-probate assets also include most jointly owned property—whether real estate or bank accounts—which passes outside the will to the surviving owner. Assets the late spouse put into a trust are non-probate as well, as are any accounts that name a “transfer on death” or “pay on death” beneficiary. Before Maryland changed its laws protecting the surviving spouse from disinheritance, he or she was generally limited to a portion of the probate assets when taking an elective share. By adding the non-probate assets to the mix under the augmented estate, the law allows for a larger distribution to the surviving spouse when he or she would otherwise receive little or nothing under the will. This change to the augmented estate would seem to be a vast improvement over the older setup. There can be times, however, when disinheriting a spouse is completely appropriate. For example, someone who has children from a prior marriage might want them to inherit their entire estate, rather than their new spouse. In this circumstance, a prenuptial agreement can help ensure that the prior children receive their intended inheritance. The rules surrounding the augmented estate are complex and include many exceptions. Whether you want to leave your entire estate to your spouse or not, consulting with an Estates & Trusts attorney is an essential first step.
April 24, 2023
Immigration Law
Disappointed That it Did Not Work Out For You in the H-1B lottery? Do Not Despair, There are Other Options!
Did you apply for the H-1B lottery and were not selected? It is not the end of the road, and you have some alternative options. This year we had several H-1B lottery submissions. In prior years competition for limited visa numbers was keen. The number of H-1B visa applications received and the number of applications selected in the lottery process can vary from year to year. The H-1B lottery system is a random selection process that is conducted when the number of applications exceeds the available number of visas. The number of visas available is capped at 85,000 per fiscal year, which includes 65,000 for regular H-1B visas and an additional 20,000 for applicants with advanced degrees from U.S. universities. The USCIS usually announces the number of H-1B visa applications received and the number of applications selected in the lottery after the lottery is completed, which typically occurs in April of each year. For FY 2023, USCIS received 483,927 H-1B registrations. Since the annual limit is only 85,000, that means over 80% of H-1B registrations for FY 2023 and over 70% for FY 2022 did not result in an employer hiring a new foreign national employee chosen in the random selection process. Before you throw in the towel, consider the below options: Nonimmigrant Visa Options: TN Visa: If you are a citizen of Canada or Mexico and have a job offer in the United States that falls under the NAFTA professions list, you may be eligible for a TN visa. E-3 Visa: If you are an Australian citizen and have a job offer in a specialty occupation, you may be eligible for an E-3 visa. H-1B1 Visa: If you are a citizen of Chile or Singapore and have a job offer in a specialty occupation, you may be eligible for an H-1B1 visa. O-1 Visa: If you have extraordinary ability in the sciences, arts, education, business, or athletics, you may be eligible for an O-1 visa. L-1 Visa: If you have worked for a company overseas for at least one year and have been offered a job in the United States with the same company or a subsidiary, affiliate, or branch office, you may be eligible for an L-1 visa. F-1 Visa: If you are a student and want to pursue academic studies in the United States, you may be eligible for an F-1 visa. J-1 Visa: If you want to participate in an exchange program to study, teach, conduct research, or receive training in the United States, you may be eligible for a J-1 visa. Immigrant Visa Options: EB-1 Visa: If you have extraordinary ability in the sciences, arts, education, business, or athletics, or are an outstanding professor or researcher, you may be eligible for an EB-1 visa. EB-2 Visa: If you have an advanced degree or exceptional ability in the sciences, arts, or business, you may be eligible for an EB-2 visa. EB-3 Visa: If you have a bachelor's degree, are a skilled worker, or are an unskilled worker with less than two years of experience, you may be eligible for an EB-3 visa. EB-4 Visa: If you are a religious worker, broadcaster, or Afghan or Iraqi translator, you may be eligible for an EB-4 visa. EB-5 Visa: If you want to invest in a new commercial enterprise in the United States and create at least ten full-time jobs for U.S. workers, you may be eligible for an EB-5 visa. Keep in mind that each visa has its own eligibility criteria and application process. Consider consulting with an experienced immigration attorney to determine the best course of action based on your individual circumstances.
April 24, 2023
Healthcare
Can Physicians Legally Invest in a Startup-Owned Pharmacy?
In today’s video, we address whether a physician can legally invest in a pharmacy that is owned by a startup that provides online telehealth services, including diagnosis and prescription based on a questionnaire to its customers. Hi everyone, I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We help healthcare industry clients just like you, navigate healthcare and FDA legal issues so you can grow your healthcare business. In a prior video we said that the proposed venture that we’re talking about is legally risky from a variety of standpoints, including the way that telehealth rules in many States tend to require an in-person, good faith exam prior to physician prescribing, and the way regulators can frown upon prescription based solely on an online questionnaire. So, there are risks there depends on how aggressive you want your model to be. On the pharmacy side, many States do prohibit physicians from owning or investing in a pharmacy. So, that’s problematic. One State that is a little bit unusual in this regard is Texas. In Texas, physicians may own or invest in a pharmacy, as long as the ownership structure fits within the Texas Patient Non-Solicitation Law exceptions. So, we have to look at those. Now, even with that, physicians have to bear in mind that there is a federal Stark law, which prohibits self-referral; and the federal Anti-Kickback Statute (AKS), which prohibits payment in exchange for referrals for items or services paid for by Federal health care programs. Texas like many states has its own State law prohibitions against self-referral and kickbacks. Wherever you look: New York, California, you’ll find those prohibitions. So, in analyzing the proposed compensation arrangement, one thing physicians and startups should bear in mind is that legal or regulatory trouble can come from a variety of places, including some side doors that one might not expect. For example, many States have, as we know, been reviewing physician investment into compounding pharmacies and looking there for unlawful or medically unnecessary referrals. So, it might be that kind of regulatory activity that triggers legal jeopardy. Regulators possibly could see, for example, this as an arrangement where physicians are given a financial incentive (also known as an inducement) to refer patients to medications, where the physicians themselves benefit or profit as soon as the patient buys the medicine from the pharmacy where the physician has an ownership interest. Some of these arrangements, for example, might involve creams to alleviate pain; DNA tests; genetic tests; or referrals to affiliated labs for urine testing, there are lots of different varieties and flavors. Some States will impose on physicians the requirement of disclosing their ownership or investment or other compensation interest to an entity or in an entity to which they refer patients. Remember that kickbacks are often defined to involve any remuneration, “direct or indirect.” This is a powerful catch-all, “indirect,” it can be used where the business structure involves multiple entities and a roundabout way of getting compensation to the clinician. So, it pays to have these innovative business structures well vetted by experienced legal counsel, and we’ve seen many. Thanks for watching. Feel free to contact us with your questions or book an appointment. We have helped hundreds and hundreds of healthcare industry clients just like you build their dream. We look forward to working with you on your journey to success! Testimonials
April 24, 2023
Labor and Employment
PUMP Act Changes Protections for Working Mothers
Congress passed the bipartisan Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act as part of the omnibus budget bill for the fiscal year 2023. The PUMP Act is an extension of the Break Time for Nursing Mothers Act (the pumping break time law), which is part of the Affordable Care Act (ACA). The ACA requires employers to provide reasonable break time to nurse or pump and a private place to pump. Employers must provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.” Also, employers must give “reasonable break time” to their employees to pump for up to one year after the birth of their child. Women whose positions were exempt from overtime were not entitled to these ACA protections; the PUMP Act applies to all working mothers. In addition, the PUMP Act outlines legal remedies if an employer has violated any aspect of the Act or retaliated against an employee for behaving according to the Act. Employees may immediately file suit if employers ignore the break time requirement or have indicated that they don’t intend to provide private space to pump or if they were fired for requesting break time or a private location to pump. As a practical solution, short of court, employees must notify their employers if they have not provided a space to pump, and the employer then has ten (10) days to provide an appropriate space. Keep in mind the specific requirements and take note that putting an employee into a room with a camera (even if it’s turned off) or a private room where she may be viewed through a window or door will not comply with the law. Pumping breaks may be unpaid time and scheduled at employees’ regular break time.
April 20, 2023
One Minute of Overtime
Fluctuating Workweek
Welcome to One Minute of Overtime, where I will share insights on Labor and Employment Law topics, mostly related to minimum wage and overtime compliance issues. Compliance in this area of law is nuanced and technical, so it is critical for employers to audit and adjust their practices to remain compliant, so stop by to stay up-to-date and in-the-know. Under the fluctuating workweek method, an employee receives a fixed weekly salary and overtime pay is based on the average hourly rate in a specific workweek. The average hourly rate will change from week to week depending on how many hours the employee actually worked and must always exceed the minimum wage. While this keeps the overtime premium to 0.5 times the hourly rate, it also prevents the employee from reducing pay below the agreed upon threshold when the employee works less than 40 hours in a week.
April 19, 2023
Healthcare
How MSOs Help Medical Practices with Office and Equipment Rental
A Managed Service Organization (MSO) has numerous benefits. At the core, an MSO helps doctors and other healthcare professionals separate the administrative side of a medical practice from the clinical side. The clinical side is regulated in many ways through federal laws, state laws, and the regulations and policies of state and local medical boards. Federal and state laws the regulate medical practices Stark Law is a federal law that prohibits referrals by doctors to entities called designated healthcare services that the doctors (or a close relative) have a financial interest in – when medical practices submit bills for payment to Medicare and Medicaid. Stark Law imposes civil penalties including fines and the possible cessation of the medical practice for violations. The Anti-Kickback Statute (AKS) regulates referrals to and from physicians by entities such as pharmaceutical companies if the referral is based in any way on an improper financial incentive such as the payment of cash, positions on medical boards that are just ways to pay a doctor who does little or no work for the payment, vacations, and other benefits. The AKS applies to bills submitted to Medicare, Medicaid, and any other federal healthcare agency that pays medical bills such as TRICARE. Violations of the AKS can result in civil and criminal penalties. Violations of Stark Law or the AKS may also result in complaints that the doctor/medical practice violated the federal False Claims Act or a state false claim law because bills to federal agencies such as Medicare or Medicaid were made fraudulently. Physicians who have an ownership interest in a medical practice also need to understand their state’s corporate practice of medicine laws. These laws regulate who can have an ownership interest in a medical practice. The aim of all these laws – Stark Law, the AKS, the False Claim Act, and the corporate practice of medicine laws is to ensure that the health of the patients comes before any financial interests of the physicians. The benefits of an MSO An MSO helps medical practices do more than just tend to the business side of a medical practice. An MSO can help medical practices show that the business side of the practice is separate from the clinical side by specifically meeting the exceptions to Stark Law and the safe harbors to the AKS that are defined in those statutes. An MSO can help show that the medical malpractice is not violating either the federal or state False Claims Acts and is also meeting the requirements of the state and local medical boards. An MSO can help a medical practice come into compliance with corporate practice of medicine laws. As we’ve discussed, MSOs supply the business side of a medical practice – with human resources, payroll and employee benefits, education, compliance, and other non-medical matters. While MSOs mainly provide services for physicians, Physicians Practice Group states that “MSOs can help hospitals and other medical ventures. MSOs can be owned by different entities including hospitals, physician groups, investors, and others.” MSOs can also provide the capital for a medical practice and then offer the practice office space, equipment, and other essentials. In order for an MSO to show the medical practice is compliant with the various federal and state laws that prioritize patient safety over financial profit, a medical practice should review the specific statutory exceptions and safe harbors, what tasks the MSO can and can’t perform, and what contractual arrangements should be entered into between the medical practice and the MSO with an experienced healthcare lawyer. WHEN USING A MANAGEMENT SERVICES ORGANIZATIONS (MSO) IS THE RIGHT CHOICE FOR YOUR MEDICAL PRACTICE Managed Services Organizations help physicians focus on practicing medicine by freeing doctors from many administrative tasks. Failure to consult with an MSO healthcare lawyer can cause civil and […] What tasks can MSOs perform? Some of the general tasks MSOs can perform, according to Physicians Practice Group, include: Medical coding for billing, payment, and collection to help ensure False Claims Act compliance and other federal/state compliance issues Educate and train the medical staff Compliance with HIPAA (Health Insurance Portability and Accountability Act), OSHA (Occupational Safety and Health Administration) regulations, FMLA (Family and Medical Leave Act), CLIA (Clinical Laboratory Improvement Amendments of 1988), and state laws Ensuring that the medical and administrative staff have the proper credentials The information technology needs of the medical practice Various financial issues including procuring supplies and medications, audits, financial management, payroll and benefits, marketing, sales Risk management Scheduling Transcription of medical records Public relations Disaster management Quality assurance Contract negotiations Insurance risks Other administrative aspects of the medical practice According to Physicians Practice MSOs can: Provide business services that allows the medical practice to be quite independent of the MSO Own/buy the tangible assets of the practice and manage the assets directly In this type of MSO- the MSO owns the office space, equipment, and supplies – and leases the space/equipment/supplies back to the medical practice. “That is, the physicians continue to practice in their existing office space and own their medical records, keep their existing insurance plan contracts, staff, and so on, but no longer own the administrative expense and burden of managing those assets.” This makes it hard for the medical practice to terminate the agreement with the MSO but can help the medical practice meet its compliance issues and shifts the burden of administering the medical practice to the MSO. Stark law exceptions and office space rentals Stark law provides numerous exceptions to help medical practices come into compliance. One exception is for compensation arrangements involving payments for office space made by a lessee to a lessor. “This exception would also apply when a solo-practice physician establishes such a relationship through his/her practice or wholly owned legal entity, or where a physician stands in the shoes of his/her physician organization for purposes of the office space lease arrangement.” Stark Law provides the following exception for the rental of office space: Payments for the use of office space made by a lessee to a lessor should comply with this Stark Law exception if the arrangement meets the following requirements: The lease agreement must be in writing, signed by the parties (such as the MSO and the medical practice), and specify what property is covered. The length of the office space rental must be at least one year. If the lease contract terminates with or without cause, the parties (such as the MSO and the medical practice) can’t enter into a new lease contract for the same space for the remainder of the first year of the original lease contract. The office space that is rented/leased cannot be more than what is reasonable and necessary “for the legitimate business purposes of the lease arrangement” and shouldn’t be shared with the lessor or any person/entity related to the lessor. – unless certain specific conditions set forth in the Stark Law exception statute are met. The rental charges during the term of the lease should be set in advance and should be “consistent with fair market value.” The rental charges during the term of the lease should not be based in any manner on: “The volume or value of referrals or other business generated between the parties; or By using a formula based on A percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the services performed or business generated in the office space; or Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee.” The lease contract should be “commercially reasonable even if no referrals were made between the lessee and the lessor.” If the lease arrangement expires after a term of at least 1 year, a holdover lease arrangement immediately following the expiration of the lease arrangement satisfies the other requirements of the exception and other specific conditions set forth in the Stark Law exception statute. Generally, tenants can make payments for common areas such as central reception areas if the lease payments meet certain pro-rate share and fair market value conditions. Stark law exceptions and equipment rentals In many respects, the Stark Law exception for renting equipment is similar to the exception for office space. Again, for our discussion, the MSO should be considered the lessor and the medical practice the lessee – though Stark Law permits the physician to be either the lessor or the lessee – provided the specific terms of the exception are met. The equipment rental exception: “Would also apply when a solo-practice physician establishes such a relationship through his/her practice or wholly owned legal entity, or where a physician stands in the shoes of his/her physician organization for purposes of the lease arrangement.” The essential terms of the lease arrangement require: That the rental or lease agreement is in writing, signed by the parties, and specifies what equipment is covered. The equipment rented or leased should meet the reasonable and necessary business needs of the medical practice and be used exclusively by the lessee (not shared with the lessor or people/entities related to the lessor). The lease should be one year or more. Similar termination conditions to the office space rental requirements apply. The rental charges are set in advance, are based on fair market value, and are not based on the volume or value of any referrals or other business generated between the parties (the MSO and the medical practice), or other criteria set forth in the statute. The lease contract would be commercially reasonable even if there were no referrals between the parties. “A holdover month-to-month rental for up to six months immediately following an agreement with a term of at least one year is allowed,” provided certain conditions are met. The AKS and – office space rentals and equipment rentals The Office of Inspector General does permit similar office and equipment agreements between an MSO and a medical practice. Normally, payment for rental space wouldn’t violate the AKS – provided the payment isn’t below fair market value or the tenant/medical practice rents more than is commercially necessary. Payments below fair market value or for more spaced than commercially necessary could be considered “kickbacks.” Generally, for either the office space rental or equipment rental safe harbors to the AKS to apply: The lease must be signed by both parties (the MSO and the medical practice) The lease should cover the premises leased or the equipment leased. The lease should specify any lessor access rights. The length of the lease should be at least one year. The rental should be set forth in advance and be consistent with fair market value, The office space/equipment should be what is necessary for the practice and no more. MSOs and the Corporate Practice of Medicine For more information about how MSOs can help with corporate practice of medicine compliance, please see our prior discussion of this topic. There are some direct exceptions to the California laws that prohibit the corporate practice of medicine, such as creating a professional medical corporation. There are also strategies that can be used such as the use of a management services organization (MSO) to help ensure that the medical practice meets its financial needs while also ensuring that the care and treatment of patients are the priority. Medical practices should consider using a managed service organization to administer the business side of their practice so the medical practice can focus on the medical side of the practice – and also help show the practice is in compliance with Stark Law, the Anti-Kickback Statute, corporate practice of medicine laws, and other laws that serve to prioritize patent safety over financial profit. EXCEPTIONS AND ALTERNATIVES TO THE CORPORATE PRACTICE OF MEDICINE California has a strict corporate practice of medicine law. Physicians should consider a professional medical corporation. Doctors need to be aware of Stark Law and the AKS. An MSO may be advisable. Physicians and medical practices should contact Cohen Healthcare Law Group, PC to discuss how an MSO can help address federal and state compliance laws and regulations. Our experienced healthcare attorneys advise physicians and medical practices about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
April 15, 2023
Family Law
The State of Artificial Reproductive Technology Today
The best way to predict the future is to create it. – Abraham Lincoln. April 23-29, 2023, is National Infertility Awareness Week® (NIAW). NIAW is a movement founded in 1989 by The National Infertility Association. Its mission is to empower us all, change the conversation around infertility, raise awareness about fertility issues and promote better access to fertility care for people who need it. For most individuals and/or couples trying to have a baby, when the conversation of conceiving through natural means ends, a new dialogue begins that which focuses on having a baby with the help of artificial reproductive technology. Introduction The field of artificial reproductive technology, "ART," has made significant advancements since its inception in the mid-20th century. With the ability to manipulate and control the human reproductive system, ART has revolutionized the way we approach infertility and has also presented new ethical and legal challenges. This article will provide an overview of ART, its past, present, and future, and the myriad of legal and ethical issues it faces. Clinical Definitions, Historical Discrimination, Familial Reality and Legal Concerns Clinically/historically/ discriminatorily, infertility is a reproductive disorder defined as the failure to achieve a clinical pregnancy following at least 12 months of unprotected heterosexual intercourse1. It can be related to female factors, male factors, both, or remain unexplained. In women, it is commonly caused by ovulatory dysfunction, tubal obstructions, and/or endometriosis. In men, it is often a result of abnormalities in sperm production and function or sperm duct blockages. In helping people to have the children they desire, ART challenged and altered forever conventional clinical and societal definitions of "family." It threw open the doors for those wanting to be single parents (with no need for a partner) and has broken down the barriers for members of the LGBTQIA+ community to create their own families. The nuclear family is still often considered as an entity defined only by biological ties, even though living arrangements with children (families) have become increasingly diverse in recent decades, with unmarried families, adoptive and stepfamilies, and families with same-sex parents becoming increasingly common. ART adds to this growing complexity by providing treatments to single people and gay and lesbian couples, as well as to heterosexual couples to whom the conventional definition of infertility applies.2 These former groups have also been described as facing "social infertility." 3 The use of ART worldwide has led to the conception and birth of over nine (9) million babies since being implemented in the United Kingdom in 19784. ART, as it is commonly known, refers to any technique used to assist in the conception of a child without sexual intercourse. The most common methods of artificial reproduction include in vitro fertilization (IVF), intracytoplasmic sperm injection (ICSI), and gamete intrafallopian transfer (GIFT). There are various legal considerations when it comes to artificial reproduction. There are various laws and regulations governing these practices, including requirements for informed consent, screening and testing of donors and surrogates, and restrictions on the use of certain types of genetic material. One of the key issues is related to parental rights and responsibilities. In many cases, the child conceived through artificial reproduction will have genetic material from one or both parents who are not legally recognized as the child's parents. This can create complex legal situations, particularly if the parents separate or divorce. Another legal issue that arises in the context of artificial reproduction is the question of who has control over the genetic material used in the process. This includes issues such as sperm and egg donation, surrogacy, and embryo adoption. There are various laws and regulations governing these practices, including requirements for informed consent, screening and testing of donors and surrogates, and restrictions on the use of certain types of genetic material. Additionally, there are ethical considerations to be taken into account. Some people may have moral objections to certain methods of artificial reproduction, such as using donor eggs or sperm or creating embryos for the purpose of research. Overall, the legal landscape around artificial reproduction can be complex and is constantly evolving. It is important for individuals considering these techniques to consult with legal and medical professionals to ensure they fully understand their rights and responsibilities. ________________________________________________ 1 https://www.cdc.gov/reproductivehealth/infertility/index.htm 2 Zegers-Hochschild F., Adamson G.D., Dyer S., Racowsky C., de Mouzon J., Sokol R., Rienzi L., Sunde A., Schmidt L., Cooke I.D., Simpson J.L., van der Poel S. The International Glossary on Infertility and Fertility Care, 2017. Hum. Reprod. (Oxford, England) 2017. 3 Daar J. Yale University Press; 2017. The New Eugenics: Selective Breeding in an Era of Reproductive Technologies. [Google Scholar] [Ref list] 4 https://www.ncbi.nlm.nih.gov/pmc/articles The Past The first successful in vitro fertilization (IVF) was achieved in 1978 by Dr. Robert Edwards and Dr. Patrick Steptoe in the United Kingdom. This groundbreaking event paved the way for numerous developments in ART, including intracytoplasmic sperm injection (ICSI), pre-implantation genetic diagnosis (PGD), and cryopreservation of eggs, sperm, and embryos. Legal regulation of ART began in the 1980s, with the United Kingdom being the first country to pass laws governing ART procedures. The U.S. followed suit with the passage of the Fertility Clinic Success Rate and Certification Act of 1992 and the creation of the American Society for Reproductive Medicine (ASRM) in 1944. This author's home state of New York did not "get with the program" until the Child-Parent Security Act of 2021. Present ART has become more widely available and accessible over the years, with clinics offering a variety of treatments and services to individuals struggling with infertility. In addition to IVF and ICSI, ART now includes egg and sperm donation, surrogacy, and gestational carrier arrangements. The legal landscape of ART is complex and varies from state to state and country to country. In the U.S., there is no federal regulation of ART, with each state having its own laws and regulations. This has led to a patchwork of laws that can be confusing for patients and providers alike. One of the most significant legal challenges facing ART today is the issue of parental rights. With surrogacy and gestational carrier arrangements, the question of who has legal rights to the child can be complicated. Additionally, the use of donor gametes raises questions about the rights of the donor and any resulting offspring. Future Advancements in ART technology are rapidly evolving, with researchers exploring new techniques to improve success rates and decrease risks. One area of focus is the use of artificial intelligence (AI) to analyze large datasets of patient information to identify factors that contribute to successful outcomes. Another promising development is the use of gene editing technology to address genetic diseases and disorders. While still in the early stages of research, this technology has the potential to revolutionize the field of ART by allowing parents to screen for and eliminate genetic diseases before implantation. Back to the Future: Legal Concerns With all the good news about ART, there are some serious issues, namely, the regulation of fertility clinics and other providers of fertility services. In many countries, including the United States, fertility clinics are subject to strict regulations that govern everything from the storage and use of genetic material to the types of services they can offer. These regulations are designed to protect patients and ensure that fertility treatments are safe and effective. Another legal consideration is the use of donor material in assisted reproduction. When donor eggs or sperm are used to fertilize an egg, there may be legal issues related to parental rights and responsibilities. Additionally, there may be questions around the ethical implications of using donor material, particularly when it comes to issues related to identity and family relationships. Another recent development that has significant legal and ethical implications is the use of donor eggs and sperm, which can allow people who are unable to conceive naturally to have children. However, this technology also raises questions about the rights of donors and the potential for unintended consequences, such as the possibility of unwitting incest between donor-conceived siblings. Another important aspect of infertility and the law is the legal rights and responsibilities of parents who conceive through these technologies. For example, in cases of surrogacy, legal agreements must be put in place to establish custody and visitation rights for the intended parents as well as the surrogate mother. Similarly, in cases of egg or sperm donation, legal agreements must be put in place to establish parental rights and responsibilities. Other legal concerns related to infertility may include issues around adoption, paternity and genetic testing, and the use of reproductive materials after death. It is important for anyone dealing with infertility to consult with an experienced attorney who can help navigate the legal landscape and protect their legal rights and interests through the process. It is also important to consider the role of insurance and other financial considerations in fertility care. In many cases, infertility treatments can be expensive, and insurance coverage may be limited or nonexistent. This can create significant barriers to access for individuals and families who need fertility care. Overall, there are many legal and ethical considerations to think about when it comes to assisted reproductive technologies. As we continue to explore the potential benefits and drawbacks of these technologies, it is important to strike a careful balance between innovation and regulation and to prioritize the needs and interests of patients above all else. Back to the Future: Ethical Concerns There have been several recent technological advancements in fertility treatments that have significant implications for the legal and ethical considerations surrounding assisted reproductive technologies. Some people argue that these technologies blur the line between natural conception and artificial intervention and that they represent a potential threat to human dignity and autonomy. Others argue that these technologies have the potential to improve the lives of millions of people around the world who struggle with infertility and other reproductive issues. One of the most important developments in this area is the use of in vitro fertilization (IVF) with pre-implantation genetic testing (PGT). This technology allows doctors to screen embryos for genetic abnormalities before they are implanted in the uterus, potentially reducing the risk of certain genetic disorders and increasing the chances of a successful pregnancy. However, PGT also raises serious ethical concerns, as it allows parents to select embryos based on their genetic characteristics, such as gender and physical characteristics, potentially leading to a future in which only certain traits are valued, and others are deemed undesirable or even unacceptable; which could lead to discrimination or perpetuate harmful societal norms. To balance these competing concerns, it is important for society to engage in open and transparent discussion about the use of PGT and to ensure that regulations are in place to prevent abuse of this technology. This could include limiting the types of conditions that can be screened for, as well as creating oversight committees to review and approve PGT applications. Additionally, it is important for individuals and families to have access to accurate and unbiased information about PGT, so they can make informed decisions about whether or not to use this technology in their own fertility treatment. By considering both the potential benefits and ethical concerns of PGT, we can work towards a more equitable and responsible approach to healthcare. Finally, there has been growing interest in the use of artificial intelligence (Al) and machine learning to improve the accuracy of fertility diagnosis and prediction. While these technologies have the potential to revolutionize fertility care, they also raise concerns about data privacy and the potential for biased algorithms to perpetuate existing inequalities in healthcare. Overall, the recent technological advancements in fertility treatments have significant legal and ethical implications, and it is crucial that we carefully consider these issues as we continue to develop and implement new and innovative technologies in this field. Conclusion Infertility and the law is a complex, multi-faceted issue that encompasses a range of legal and ethical considerations. Laws governing these practices vary state by state and country by county and may include regulations around consent, screening, and financial compensation. ART has come a long way since its inception in the late 1970s, and its future is promising. However, as technology advances, legal and ethical challenges will continue to arise. It is crucial for lawmakers and healthcare providers to work together to create clear and comprehensive regulations that protect the rights of patients and any resulting offspring.
April 13, 2023
Labor and Employment
Post-McLaren: How Confidentiality and Non-Disparagement Provisions in Severance Agreements Interact with Section 7 Rights
Confidentiality and non-disparagement clauses are frequently included by employers when negotiating and drafting severance agreements. Several recent challenges, on both the state and federal level, have been made to these types of provisions, specifically, whether they are illegal on their face and/or unduly coercive. The National Labor Relations Board (“NLRB”) recently chimed in, holding in McLaren Macomb, 372 NLRB No. 58, that an employer violates Section 7 of the NLRA “when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights,” including agreements containing broad confidentiality and/or non-disparagement prohibitions. Thus, under McLaren, an employer violates the NLRA, which applies to both union and nonunion employees, anytime it offers a severance agreement to an employee that contains an unreasonably broad confidentiality and/or non-disparagement provision – whether the employee signs the agreement is irrelevant. The McLaren decision has sparked significant interest. On March 22, 2023, NLRB General Counsel Jennifer Abruzzo issued GC Memo 23-05 (the “GC Memo”), which addresses questions raised by the decision and provides guidance to employers. The memo confirms that confidentiality clauses that are narrowly tailored to restrict the dissemination of proprietary or trade secret information, have a limited duration, and are based on legitimate business reasons are permissible. Similarly, the memo notes that it is acceptable to restrict employee statements that are “maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity.” The memo also confirmed that the McLaren decision will apply retroactively; therefore, agreements proffered to employees prior to February 21, 2023, may be subject to challenge up to six months after the unlawful proffer if unsigned. Executed agreements containing unlawful provisions are not subject to any time bar if they do not contain an expiration date. Importantly, the GC Memo also clarified that the decision is not limited to severance agreements. The types of provisions that may interfere with Section 7 rights include noncompete clauses, non-solicitation clauses, no-poaching clauses, broad liability releases and covenants not to sue that go beyond the employer and/or employment claims, and cooperation requirements involving any current or future investigation or proceeding involving the employer as that affects the employee’s right to refrain under Section 7, such as if the employee were asked to testify against co-workers that the employee assisted with filing an unfair labor practice charge. Considering the McLaren decision and the GC Memo, employers should review and update their template agreements to mitigate or eliminate risk. This includes not only severance agreements, but also any separation or settlement agreements and other employment-related documents. Employers may also want to consider whether to take the preemptive remedial action of notifying prior recipients of agreements that overbroad confidentiality and non-disparagement restrictions will not be enforced.
April 11, 2023
Labor and Employment
Highly Paid Employee Awarded Overtime
You can’t make enough money to be exempt from overtime. In a surprising decision, the U.S. Supreme Court recently ruled that an employee who made over $215,000.00 per year was entitled to overtime payments. In Helix Energy Solutions Group v. Hewitt, the Supreme Court ruled 6-3 that Mr. Hewitt, a former employee, was eligible for overtime pay because he was paid on a daily basis, not a guaranteed salary basis. Mr. Hewitt’s daily pay varied. So, regardless of the fact that he earned $248,053 in 2015 and $218,863 in 2016, Helix Energy Solutions should have been paying him overtime, per the Court. According to the Court, “salary” as used in the Fair Labor Standards Act (FLSA) “connotes a steady and predictable stream of pay” and must be paid by the week or longer period. Why mention this decision? To highlight that the Court reads the FLSA regulations in a very technical way, and accordingly, employers must educate themselves about the requirements. Employers have to prove in court that employees are exempt from overtime. It doesn’t matter if the payment is very generous. I’ve had a number of clients investigated for violations, even when the pay was more than fair. Shock value. I want to meet the attorney who agreed that Mr. Hewitt should sue and pursue overtime payments all the way to the Supreme Court. Let me know if this raises any FLSA questions about classifying people as exempt or non-exempt and compliance with the overtime law.
April 6, 2023
Family Law
“Is There Another Me? How Online DNA Websites are Helping Adoptees Learn About Their History and Connect with Relatives”
DNA testing, including through websites such as 23andme.com, has become increasingly popular in recent years for individuals to obtain comprehensive ancestry breakdown, personalized health insights and more. 23 and Me is one of the programs that offers DNA testing through collection of saliva, to test both health and ancestry. Results include insights into health predispositions, carrier status, wellness, and ancestry composition, including tools to enable an individual to connect with relatives who share similar DNA. These testing programs were not always available, and in prior years, adopted individuals had no means by which they could obtain essential information such as medical background and genetic history. The documentary, Three Identical Strangers depicts the story of three identical triplets reuniting in 1980, simply by happenstance. Robert Shafran was beginning his sophomore year of college when students on campus began referring to him as “Eddy.” After lots of confusion and discussion with those referring to him as “Eddy,” Robert discovered he had an identical twin brother, Edward Galland. When local news outlets began publishing this story, photographs of Eddy and Bobby caught people’s attention, including a woman who recognized her friend David Kellman, identical brother number three. However, what starts as a fairytale story quickly turns dark, depicting the struggle of adoptees and the lack of information they have as to their physical and psychological background. In 1995, after a long struggle with mental illness (specifically, manic depression), Eddy committed suicide. As their story continues to unfold throughout this documentary, viewers learn that the triplets' biological mother suffered immensely from mental health challenges, something that they would have been aware of had they received any information on their birth mother and their biological background. Bobby and David have since pursued the unsealing of their adoption records, but, due to confidentiality laws, access to these records is extremely limited, with a high threshold showing required to obtain even the most minimal, basic information. This film, which was released nationwide on July 13, 2018, left a lot of lingering questions surrounding psychology, science, legislation, and adoptees' rights. Stay tuned in the coming weeks for more on state-specific laws and legislation for change. For more information on Three Identical Strangers, please visit Three Identical Strangers Trailer - YouTube
April 4, 2023
Estates and Trusts
Estate Planning for the College-bound Kiddo
It is college decision time for so many families and their soon-to-be adult children. Most are fretting over the cost of college, what their child will study, and how far from home they will be in six short months. Between those worries, the endless Amazon orders, and trips to Bed Bath and Beyond, is that their college-age kids need a few simple estate-planning documents in place before they leave. Estate planning documents for an 18-year-old? Yes! The two most important documents that your now-adult child needs are a Health Directive and a Financial Power of Attorney, particularly when they are away from home. A health care directive in New York is referred to as a Health Care Proxy. A Health Care Proxy is an “advanced directive” that allows someone else to make health care decisions on your behalf. Most assume that this document is only needed for an older person, but that could not be further from the truth. A Health Care Proxy authorizes you to make decisions for your adult child in the case of a medical emergency when they are away. Most importantly, a Proxy can provide you access to your adult child’s health records and information. Access to your adult child’s health information can be vital to ensure that they are receiving proper care, particularly in light of the collective mental health issues that befall so many of our college-bound children. Every Health Care Proxy should contain a privacy waiver, referred to as a HIPPA waiver, that permits your adult child’s healthcare providers to share your adult child’s private health information with you; without this waiver, doctors and nurses cannot provide you with any information regarding your child’s health including, diagnoses, blood test results, treatment plans, etc. In addition to managing your adult child’s health care concerns, a second advanced directive, commonly referred to as a Financial Power of Attorney, will allow you to assist your child with his finances. Once your child turns 18, they are an adult, and you no longer have access to their child’s bank accounts, their school records, school loans, nor the ability to sign on their behalf. Many parents assume that because they are paying the tuition bill for their child’s college, for example, that they would automatically have access to all of their school information, including transcripts, and that is simply not the case. The power of attorney appoints you as your adult child’s agent to be able to access this information at any time, sign documents on their behalf, open and close bank accounts and renegotiate school loans. While 18 may be the legal age of adulthood, often the financial responsibilities associated with adulthood are best managed with a parent’s assistance, and the Power of Attorney document will provide you the authorization you will need to help your adult child. Certainly, we all wish that there was a guidebook available to help us send our children off safely to their dorms and embark on their new life of independence. In the meantime, having these two simple documents in place, you will be able to provide the assistance and the guidance that your adult child may need when they first leave home.
April 4, 2023
Business
In Delaware – Is Your Business “Essential” or Not? A Deep Dive With Our Guidance
This blog post may contain information that was accurate at the time of publication but could become outdated over time. We strive to provide relevant and timely content, but circumstances, facts, and data can change. Users are encouraged to verify the current status of any information presented and seek updated guidance where necessary. Originally posted on 3/30/2020, no content changes Practice Group: Business Law & Transactions In response to the Coronavirus pandemic, most of us know that governments have ordered certain businesses to close. Delaware Governor John C. Carney declared a State of Emergency starting on March 13, 2020 and has since updated it multiple times, most recently on March 22. On March 22, the Governor ordered Non-Essential Businesses to close at 8:00 a.m. on Tuesday, March 24. The March 22 Order also requires that employers operating “Essential Businesses” maximize telecommuting. Moreover, the Order is a “stay at home” order that requires everyone to stay home, except essential personnel. The Order also puts in place a travel ban except for certain circumstances. The purpose of the Order is to control and direct within the State of Delaware the operation of certain businesses, organizations, and enterprises necessary to maintain life, health, property, or public peace during the State of Emergency. Above all else, we as a firm want everyone to remain healthy and make it through this emergency unscathed. This article provides a general overview. As always, please contact us for specific guidance for your business as the March 22 Order creates a few murky areas for the unwary business. For example, while the Order allows individuals to leave their house to perform “Essential Activities,” which seems to allow for work in the office, the section on “Essential Travel” does not seem to authorize leaving the house to go to the office. Another example is that the Order appears to require employers to exclude workers over 60 years old from the worksite. However, this provision may run afoul of the Americans with Disabilities Act. Another issue presented is what to do about situations in which employees cannot be kept six feet apart, as will happen in many situations. We are here to help. THE MARCH 22 ORDER. In essence, the March 22 Order states that all physical locations of Non-Essential Businesses within the State of Delaware are closed until after May 15, 2020, or after the public health threat of COVID-19 has been eliminated, except that Non-Essential Businesses may continue to offer goods and services over the internet. Here is a link to the 18-page March 22 Order relating to Essential and Non-Essential Businesses. https://governor.delaware.gov/wp-content/uploads/sites/24/2020/03/Fourth-Modification-to-State-of-Emergency-03222020.pdf WHO CAN WORK? Essential Businesses are certain businesses that employ or utilize the following workers: (a) healthcare and public health; (b) law enforcement, public safety and first responders; (c) food and agriculture; (d) certain energy-related industries (electricity, petroleum, natural and propane gas); (e) water and wastewater; (f) transportation and logistics; (g) public works; (h) certain communications and information technology businesses; (i) certain community-based government operations and essential function; (j) manufacturing; (k) hazardous materials; (l) financial services and insurance; (m) chemical; (n) defense industrial base; (o) construction; (p) necessary products retailers; (q) necessary retail and service establishments; and (r) open air recreational facilities. Non-Essential Businesses are certain businesses that employ or utilize the following workers: (a) hospitality and recreational facilities; (b) concert halls and venues; (c) theaters and performing arts venues; (d) sporting event facilities and venues; (e) golf courses and shooting ranges; (f) realtors; (g) business support services, including customer service call centers and telemarketing operations; (h) shopping malls; and (i) retail stores. It is important to note that the above list of Essential Business and Non-Essential Businesses contains many exceptions and clarifications. The list found at the link above also contains the relevant 4-digit North American Industry Classification System (NAICS) code. All businesses should have a NAICS code or codes on their unemployment insurance forms or on their most recent tax return to aid in determining whether a business is Essential or Non-Essential. If you are unsure as to whether your business is Essential or Non-Essential, you can email covid19faq@delaware.gov or call 302-577-8477 between the hours of 9:00 am and 4:00 pm with any additional questions. Again, Offit Kurman is also here to help you navigate your business through these troubled waters. CAN YOU APPEAL YOUR BUSINESS CLASSIFICATION AS NON-ESSENTIAL? Yes, but there is not a guarantee that a petition will be successful. A petition must be requested in writing via electronic mail to covid19faq@delaware.gov for consideration. We understand that you can expect to receive a decision within one week of your submission. If you have questions or need assistance with the preparation of your petition, please contact us at the phone number or e-mail address listed below. ENFORCEMENT. The March 22 Order has the force and effect of law. Any failure to comply with the provisions contained in a Declaration of a State of Emergency or any modification to a Declaration of the State of Emergency constitutes a criminal offense. State and local law enforcement agencies are authorized to enforce the provisions of any Declaration of a State of Emergency. OTHER RESOURCES. Delawareans with questions about COVID-19 or their exposure risk can call the Division of Public Health’s Coronavirus Call Center at 1-866-408-1899, or 711 for people who are hearing impaired, from 8:30 a.m. to 8:00 p.m. Monday through Friday, and 10 a.m. to 4 p.m. Saturday and Sunday, or email DPHCall@delaware.gov For more information go to https://dhss.delaware.gov/dhss/dph/epi/2019novelcoronavirus.html The Delaware Department of Health & Social Services website offers a response to COVID-19, including information on testing, community resources and what you can do to avoid spreading COVID-19. For more information go to https://coronavirus.delaware.gov/ FURTHER GUIDANCE AND CLARIFICATION. As noted above, Governor Carney has modified the Declaration of a State of Emergency on six occasions and we anticipate that such modifications will continue, seemingly on a daily basis. For example, on March 24, the Governor issued an order, effective March 25 at 8:00 a.m. that delayed elections, evictions, foreclosures, termination of utility service, and termination of insurance coverage. Here is a link to the March 24 order as to these issues. https://media1.dsba.org/public/pdfs/GOVR%20Sixth-Modification-to-State-of-Emergency-03242020.pdf Please contact us if you have any questions regarding the Declaration of a State of Emergency generally, the classification, or appeal of a classification, as an Essential or Non-Essential Business, insurance coverage questions, employment law questions, or the most recent order concerning delayed elections, evictions, foreclosures, termination of utility service, and termination of insurance coverage. Stay tuned for more. Charles “Max” McCauley III contributed to this Article.
March 31, 2023
Labor and Employment
A Dose of Education Law: Supreme Court Rules Disabled Students May Sue Under ADA After Settling with School District
As you may know, I represent students in education matters (as well as educators in some employment matters.) I help elementary and secondary students with everything from attaining special education services, accommodations, and payment for private schools when public schools aren’t serving students’ needs, provide bullying help to victims, and I defend disciplinary matters such as expulsions. For post-secondary (including graduate) students, I defend Title IX complaints, appeal disciplinary actions and school or program dismissals, and enforce my clients’ Americans with Disabilities Act (ADA) rights to accommodations (enforceable in every post-secondary program that accepts federal student loan money or federal grants). So I am, of course, interested in a recent Supreme Court case on an ADA action brought by a deaf student. Students and parents must proceed with an administrative process before seeking court relief in special education cases for failure to provide a free appropriate education under the federal Individuals with Disabilities Education Act (IDEA). Money damages are not available under the IDEA; courts may order school districts to pay for tutoring or private education as a remedy for failure to provide a proper education, however. The question arose whether, if a special education student settled a complaint against a school district for violating their ADA rights, they may sue in court for monetary damages without going through the administrative process regarding the ADA claim. Mr. Perez, a deaf man, alleges that the district provided him with aids who didn’t know sign language to translate for him and misled the family about the amount of progress he made. The unanimous Court allowed the case under the ADA for money damages to move forward even after Mr. Perez had received a settlement for his violation of IDEA claims. This decision is a game changer, as many students with disabilities will have a threat of an ADA claim hanging over the school district in addition to the threat of an administrative hearing under IDEA. In fact, Justice Gorsuch wrote that the case “holds consequences not just for Mr. Perez but for a great many children with disabilities and their parents.” The case is Perez v. Sturgis Public Schools, et al., No. 21-887, U.S. (2023). Many parents and students don’t know the extent of their rights under the ADA nor the IDEA and don’t know where to get assistance. Education specialists give legal guidance and help students navigate the process of attaining relief for students who were denied education via legal violations. Reach out if you have questions.
March 30, 2023
Contractor's Corner
Personal Guarantees of Seller Financing in FedEx Deals
Seller financing, where the company selling the business agrees to provide the funding to the buyer for a percentage of the deal, is commonplace in the buying and selling of FedEx businesses. Seller financing can help the parties where a cash buyer needs more capital or where obtaining bank financing is challenging or is slowing down the deal. However, given the risks associated with lending to the buyer, sellers will often ask for a personal guarantee from the buyer. Typically, the promissory note is between the buying and selling entities. Meaning the buying entity is liable to the selling entity for the amount of the note, but the individual shareholder or shareholders of the buying entity are not personally responsible for the debt. This leaves the seller with little recourse should a buying entity fail to pay and become inactive. To better insulate itself, a seller may ask the shareholders of the buying entity to personally guarantee the funds, allowing the seller access to the shareholders’ personal assets should the buying entity fail to repay the loan. While seller financing can be an excellent tool for parties, before engaging in the process, buyers should take stock of their personal assets and the implications of a personal guaranty on those assests, and sellers should consider how they plan to secure the debt in case the buying entity is unsuccessful and ceases to exist.
March 30, 2023
Elder Law and Advocacy
LGBTQ+: NY’s Goal of Aging Without Discrimination
It is no surprise to LGBTQ+ individuals and their allies that nine out of ten of those who identify as LGBTQ+ fear discrimination in medical settings. According to SAGE, LGBTQ+ people are two times as likely to age alone and four times less likely to have children who might otherwise serve as caregivers and advocates. This means the LGBTQ+ population is even more vulnerable as they age. As a result, and at long last, Governor Hochul signed a law that is intended to address this discrimination related to the medical care received by the LGBTQ+ community in the home care and nursing home setting. Beginning in June 2023, New York State will require that all home health aides, certified nurses’ aides and personal care aides – essentially the backbone of a senior’s long-term care team– will receive training focused on providing care to patients of diverse sexual orientations, expressions and gender identities. This ambitious and much-needed law includes several components that will be included in the training program. Much of the training relates to the education of the caregivers to provide comprehensive explanations of various terms related to the LGBTQ+ community and provides an understanding of why patients with diverse sexual orientations and gender identities or expressions may conceal their identities. The goal of the training is, of course, to incorporate the concerns of these patients and ensure that they receive “person” directed care and to address the unique healthcare needs of LGBTQ+ patients. In light of the nearly 400 anti-LGBTQ+ legislative actions pending in the states across the country, it’s heartening that New York is taking the lead to combat this discrimination, especially for the most vulnerable in the LGBTQ+ population.
March 29, 2023
Healthcare
Stem Cells Therapy Clinic Startups – Legal Compliance Issues
The FDA has the authority to regulate a practice’s regenerative medicine products or treatments. Healthcare companies that don’t understand and comply with these regulations may receive warning letters. Their products may be seized. The FDA may seek injunctions against the companies. There could even be fines and criminal penalties. Stem cells are one form of regenerative medicine. Other forms include platelet-rich-protein (PRP) therapy, and gene therapy. WHY THE FDA WON’T APPROVE YOUR REGENERATIVE MEDICINE PRACTICE Regenerative medicine includes many treatments and products such as stem cell therapy, PRP, and gene therapy. An experienced stem cell and regenerative medicine lawyer can explain the FDA requirements. What are stem cells products and therapies? According to the Mayo Clinic, stem cells are the cells of the human body: “From which all other cells with specialized functions are generated. Under the right conditions in the body or a laboratory, stem cells divide to form more cells called daughter cells. These daughter cells become either new stem cells or specialized cells (differentiation) with a more specific function, such as blood cells, brain cells, heart muscle cells or bone cells. No other cell in the body has the natural ability to generate new cell types.” Stem cells are useful in understanding how diseases happen. Stem cells can generate healthy cells that replace deceased cells or repair damaged cells (regenerative medicine). Some of the possible beneficiaries of stem cell therapy may include helping people with “spinal cord injuries, type 1 diabetes, Parkinson’s disease, amyotrophic lateral sclerosis, Alzheimer’s disease, heart disease, stroke, burns, cancer, and osteoarthritis.” Stem cells may be used to test drugs for safety and quality. For example, “nerve cells could be generated to test a new drug for a nerve disease.” Stem cell sources include: Embryonic stem cells. Embryos that are 3-5 days old and are considered versatile enough to “regenerate or repair diseased tissue and organs.” Adult stem cells. These cells are usually found in bone marrow or fat (or the hip). Adult stem cells have more limited utility than embryonic cells though researchers are discovering evidence that “adult stem cells may be able to create various types of cells. For instance, bone marrow stem cells may be able to create bone or heart muscle cells.” Currently, “adult stem cells are currently being tested in people with neurological or heart disease.” Adult cells altered to have the properties of embryonic stem cells. Using genetic programming, “researchers can reprogram the cells to act similarly to embryonic stem cells.” Scientists aren’t sure yet about the adverse effects in humans. Perinatal stem cells. Scientists have also found stem cells in amniotic fluid as well as umbilical cord blood that have the ability to change into specialized cells. There is some controversy (including moral and ethical concerns) about the use of embryonic stem cells. Stem cell products and therapies generally are injected into a person’s damaged anatomy – with the aim of regenerating a healthy anatomy. There are concerns with all types of regenerative medicine including the concern that cells could mutate which could cause cancer. The National Institutes of Health created guidelines for human stem cell research in 2009. FDA oversight of stem cell therapies and regenerative medicine Stem cell products are treated like biological drugs. Stem cells are regulated through the FDA’s Center for Biologics Evaluation and Research (CBER). “The Center for Biologics Evaluation and Research (CBER) regulates cellular therapy products, human gene therapy products, and certain devices related to cell and gene therapy. CBER uses both the Public Health Service Act and the Federal Food Drug and Cosmetic Act as enabling statutes for oversight.” “Cellular therapy products include cellular immunotherapies, cancer vaccines, and other types of both autologous and allogeneic cells for certain therapeutic indications, including hematopoetic stem cells and adult and embryonic stem cells. Human gene therapy seeks to modify or manipulate the expression of a gene or to alter the biological properties of living cells for therapeutic use.” The National Institutes of Health states that, in 1997, the FDA began a “Risk-based, tiered approach to regulating cellular and tissue-based products. As a result, human cells, with the exception of those deemed minimally manipulated and used for autologous treatments, would be subject to FDA premarket approval as biologics.” So far, the FDA has been slow to place products in the “minimally manipulated category.” In addition to FDA regulation, state medical boards and the states themselves can regulate experimental stem cell therapies and do regulate the practice of medicine. The FDA’s authority to regulate stem cells is derived from Section 361 of the Public Health Service Act (providing authority for the FDA to establish regulations for all HCT/Ps to prevent the introduction, transmission, and spread of communicable diseases) and a series of rules known as the HCT/P regulations. HCT/P stands for human cells, tissues, and cellular and tissue-based products. Manufacturers of stem cell therapies and other products in this category must comply with the HCT/P regulations including registering the stem cell therapy with the FDA’s CBER. “Manufacture means, but is not limited to, any or all steps in the recovery, processing, storage, labeling, packaging, or distribution of any human cell or tissue, and the screening or testing of the cell or tissue donor.” We’ve written about these regulations including discussing such terms as homologous use, autologous use, reproductive use, minimal manipulation, and other terms. Since stem cell therapies are handled by the FDA as drugs – these therapies are also subject to current Good Manufacturing Practices (cGMPs). Section 351 of the Public Health Service (PHS) Act defines a biological product as a “virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product, … applicable to the prevention, treatment, or cure of a disease or condition of human beings. “Both the FDA’s Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER) have regulatory responsibility for therapeutic biological products, including premarket review and oversight.” Again, since stem cell products are intended to treat disease, stem cell products fall within the definition of a biological drug, requiring FDA approval. California has its own stem cell regulations. CALIFORNIA STEM CELL REGULATIONS GUIDE THE EMERGING STEM CELL RESEARCH EFFORT AND INDUSTRY California stem cell laws boost the stem cell industry by funding stem cell research, but the product side of industry is largely in the hands of the FDA. FDA and stem cell warnings The FDA has raised concerns about stem cells. The FDA has expressed concerns that “stem cells have been called everything from cure-alls to miracle treatments.” The agency states that stem cell therapies do offer the hope that the therapies can treat diseases or conditions for which few treatments exist. The FDA is expanding its oversight of stem cell products because the products may be illegal, potentially harmful, and offer false promises. Stem cell therapies – FDA safety concerns The FDA has numerous safety concerns about unproven stem cell treatments. For example, “attendees at a 2016 FDA public workshop discussed several cases of severe adverse events. One patient became blind due to an injection of stem cells into the eye. Another patient received a spinal cord injection that caused the growth of a spinal tumor.” Some of the safety issues include: “Administration site reactions The ability of cells to move from placement sites and change into inappropriate cell types or multiply Failure of cells to work as expected The growth of tumors” The FDA emphasizes that even when stem cell therapies involve your own cells, there are still safety risks. “In addition, if cells are manipulated after removal, there is a risk of contamination of the cells.” STEM CELL LAWS AND REGULATIONS: FDA REGULATION OF STEM CELL THERAPIE If you wanted to upgrade the old film, “The Graduate,” you’d have Dustin Hoffman’s character shouting out “stem cells!” instead of “plastics!” Of course, he would immediate meet his favorite […] FDA approval of stem cell therapies Generally, stem cells products cannot be approved for market use unless the stem cell products are either approved by the FDA (premarket approval or 510 (k) clearance)) or are studied in a clinical investigation that is approved by the FDA. A clinical investigation is called an Investigational New Drug Application (IND). An IND is a “clinical investigation plan submitted and allowed to proceed by the FDA.” The review process also generally investigates how the stem cell therapy will be manufactured so the “FDA can make sure appropriate steps are being taken to help assure the product’s safety, purity, and strength (potency). The FDA also requires sufficient data from animal studies to help evaluate any potential risks associated with product use.” Clinical trials that aren’t conducted pursuant to a formal IND investigation may be subject to FDA warning letters or oversight. What is an IND? An Investigational New Drug Application (IND) is a clinical study sponsor request for FDA authorization to “administer an investigational drug or biological product to humans.” Unless an exemption applies, the sponsor for a clinical study must obtain FDA authorization for conducting the study by submitting an IND Application. Before a new drug or biological product such as a stem cell therapy treatment can be shipped in interstate commerce, the IND must be filed if the drug/biological product is not “the subject of an approved New Drug Application or Biologics Product License Application.” “Clinical studies must follow a set of laws and regulations, which are intended to protect the right, safety, and welfare of human subjects participating in human trials, ensure the quality, validity, and integrity of the clinical trial data, and promote the availability of new medical products to the public. These laws and regulations define the roles and responsibilities of entities, such as sponsors, clinical investigators, and institutional review boards. In addition, various guidance documents and standard operating procedures are available to clarify policies and procedures for the IND process.” The content and format of an IND submission must be “complete, well-organized as per 21 CFR 312, and include all applicable FDA Forms.” These forms can also be found in FDA’s Form Database. There are specific submission requirements including requirements for electronic submissions for commercial INDs. The current status of FDA-approved products derived from Stem Cells FDA’s approval of stem cell products is minimal. The only stem cell-based products that are FDA-approved for use in the United States consist of blood-forming stem cells (hematopoietic progenitor cells) derived from cord blood. One approved stem cell product is Hemacord, a cord blood-derived product manufactured by the New York Blood Center and used for specified indications in patients with disorders affecting the body’s blood-forming system…. Other approved licensed HCT products from the Office of Tissues and Advanced Therapies (OTAT) can be found on the FDA’s website. PHYSICIAN STEM CELL THERAPIES LEGALLY AMBIGUOUS, WHILE REGENERATIVE CLINICS PROSPER Recent press calls into question widespread “regenerative” and anti-aging medicine, and physician practices that use stem cell therapies. Possible FDA actions on for unapproved stem cell products The FDA may issue warning letters and seek many types of administrative and judicial actions, including criminal enforcement, depending on the violations involved. In August 2017, the FDA announced that the FDA would be increasing its oversight of stem cell therapies and regenerative medicine. And in March 2017, the FDA published a perspective article in the New England Journal of Medicine in March 2017, to further clarify the benefits and risks of stem cell therapy. The FDA has also provided Important Patient and Consumer Information About Regenerative Medicine Therapies. Stem cell therapies usually are reviewed through an Investigational New Drug (IND) process (otherwise a more formal premarket approval process is required). In turn, clinical studies are normally used to obtain IND approval. There are other legal compliance issues including privacy and diversity in clinical studies. Since stem cell therapies often involve cutting-edge technology and research, there are also intellectual property issues including possibly patent issues that need to be addressed. The developers and users of stem cell therapies should contact Cohen Healthcare Law Group, PC to discuss the FDA and other compliance issues. Our experienced healthcare attorneys advise medical companies and the doctors who prescribe stem cell therapies about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
March 28, 2023
Labor and Employment
Time to Review Settlement and Severance Agreement Templates
In a surprising decision that reveals the National Labor Relations Board’s (NLRB) position on perceived threats to employees’ right to organize under the National Labor Relations Act (NLRA), the Board held in McLaren Macomb, 372 NLRB No. 58 (2023), that even if an employer (with a unionized or non-unionized workplace) merely offers a severance agreement containing broad confidentiality and non-disparagement provisions, it is illegal. Note: The Board’s ruling only applies to nonmanagerial, nonsupervisory employees with Section 7 rights under the NLRA. The current Board’s view is that agreements are unlawful on their face if they contain terms with a “reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights” under the NLRA. As such, if an employee files a complaint, the NLRB will now review severance agreements for language that’s too “broad or coercive.” In McLaren Macomb, the NLRB found that asking an employee to agree to keep terms of an agreement confidential (even with exceptions for spouses, lawyers, and tax advisors, and as ordered by a court or agency) violated the NLRA because the former employee would be unable to discuss it with current employees, who might want to organize. The Board also decided that a non-disparagement agreement was illegally overbroad when it required the employee not to make statements that could disparage or harm the image of the “employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.” Note: This restriction has no time limitation and covers other entities and persons, not just the employer. Courts don’t have to follow the rulings of the NLRB. The courts always look to whether a non-disparagement agreement is “reasonable under the circumstances,” and I believe that a non-disparagement clause limited to the company would be reasonable as long as the non-disparagement clause doesn’t purport to last forever and cover too many entities. Would a court agree that it’s illegal to promise not to disclose the agreement’s terms? The ability to require confidentiality serves as the important public policy of encouraging settlements outside of court. That said, having your template severance and settlement agreements with employees reviewed for compliance with the Board’s rationale and holding it is not very time-consuming. I’m recommending this to my clients — tweaks would not be difficult. If you have questions, please reach out.
March 23, 2023
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