Healthcare
New California Laws for Physicians and Surgeons for 2023
The Medical Board of California (MBC) recently discussed many of the new California laws that govern the practice of medicine in California. We summarize a few of those new laws here starting with – AB 2178 (Bloom) – Physicians and surgeons: special faculty permits: academic medical center. This law, according to MBC, updates how a medical center is defined and certain Board specific permit programs. AB 2178 states that the Medical Practice Act generally prohibits physicians and surgeons from practicing medicine unless the physician/surgeon has a certificate issued by the Medical Board of California. The Medical Practice Act also authorizes a person who “meets certain eligibility requirements to apply to the board for a special faculty permit.” The special faculty permit authorizes the applicant to “practice medicine without a physician’s and surgeon’s certificate only within: The medical school itself Any affiliated institution of the medical school, or An academic medical center, and Any affiliated institution in which the permit holder is providing instruction as part of the medical school’s or academic medical center’s educational program and for which the medical school or academic medical center has assumed direct responsibility.” Current California law defines an “academic medical center” for these purposes as a facility that meets specific requirements, including: Training a minimum of 250 residents and postdoctoral fellows annually Having foreign medical graduates in clinical research, and Offering clinical observership training. AB 2178 changes the definition of “academic medical center” by: “Requiring the facility to train a minimum of 250 resident physicians in specified residencies Removing the requirement that the research of the foreign medical graduates be clinical, and Requiring the facility to instead offer clinical observer experiences.” AB 2168 specifically updates the definition of the term “academic medical center” as follows: “A facility licensed by the State of California. The facility conducts both internal and external peer review of the faculty for the purpose of conferral of academic appointments on an ongoing basis. The facility conducts clinical and basic research for the purpose of advancing patient care. The facility trains a minimum of 250 resident physicians in Accreditation Council for Graduate Medical Education accredited residencies on an annual basis commencing each January 1. The facility has more than 100 research students or postdoctoral researchers annually. The facility has foreign medical graduates in research. The facility offers clinical observer experiences. The facility is accredited by the Western Association of Schools and Colleges and the Accreditation Council for Graduate Medical Education.” The time that a special faculty permit holder spends in a faculty position is not “counted toward the postgraduate training required for licensure and shall not qualify the holder of the permit for waiver of any written examination required for licensure.” The medical school or academic medical center shall not “appoint the holder of a special faculty permit to a position as a division chief or head of a department without express written authorization from the board.” California Medical Board lowers supervision threshold for medspa and cosmetics affiliated physicians California law now lowers the threshold of supervision of nurses and other appropriate licensed healthcare practitioners in medical spas.In recent rule-making the Medical Board of California […] Other physician and surgeon laws summarized by the Medical Board of California Other California laws (effective in 2023) that MBC suggests physicians and doctors understand include the following: AB 852: (Wood) – Health Care Practitioners: Electronic Prescriptions. This law governs when healthcare providers must provide electronic prescriptions, what exemptions may apply, the obligations of the pharmacies to fill electronic prescriptions, and the need for prescribers who qualify for an exemption to register with the Board of Pharmacy. AB 1102: (Low) – Telephone Medical Advice Services. This law addresses the requirements for providing telephone medical advice services from an out-of-state location. AB 1120: (Irwin) – Clinical Laboratories: Blood Withdrawal. This California explains how a certified phlebotomy technician can collect blood including the requirement that the “blood collection procedure is performed under the general supervision of a physician and surgeon and the blood collection procedure is performed using a device or devices approved by the United States Food and Drug Administration.” AB 1278: (Nazarian) – Physicians and Surgeons: Payments: Disclosure: Notice. AB 1278 requires written, office, and website notice requirements that physicians must provide “informing patients of the federal Centers for Medicare and Medicaid Services Open Payments online database.” “Physicians working in a hospital emergency room are exempted from these requirements.” AB 1636: (Weber) – Physician’s and Surgeon’s Certificate: Registered Sex Offenders. This law explains the Board’s authority regarding a physician and surgeon (P&S) license who is convicted or disciplined for acts of sexual misconduct. AB 1797: (Weber) – Immunization Registry. This law provides for the disclosure of certain patient information (such as race and ethnicity) that must be disclosed to certain local, regional, or state health departments regarding immunization information. AB 1954: (Quirk) – Physicians and Surgeons: Treatment and Medication of Patients Using Cannabis. This law prohibits physicians and surgeons “from automatically denying treatment or medication to a qualified patient based solely on a positive drug screen for tetrahydrocannabinol (THC) or report of medical cannabis use without first completing a case-by-case evaluation of the patient that includes a determination that the qualified patient’s use of medical cannabis is medically significant, as defined, to the treatment or medication.” Other conditions also apply. AB 2098: (Low) – Physicians and Surgeons: Unprofessional Conduct. AB 2098 “establishes that it is unprofessional conduct for a physician and surgeon to share mis/disinformation to a patient under their care in the form of treatment or advice, as defined.” AB 2176: (Wood) – Live Birth Registration. Changes the deadline to register live births. AB 2288: (Choi) – Advance Health Care Directives: Mental Health Treatment. “Clarifies that advance health care directives include mental health and treatment” and other provisions. AB 2338: (Gipson) – Health Care Decisions: Decisionmakers and Surrogates. “Creates a list of relatives who can make medical decisions for an incapacitated adult who does not otherwise have a legally recognized health care decisionmaker.” AB 2436: (Bauer-Kahan) – Death Certificates: Content. Updates the information that should be included. SB 189: (Committee on Budget and Fiscal Review) – State Government. Addresses MBC public meeting requirements. SB 528: (Jones) – Juveniles: Medication Documentation. “Requires certain forms related to the provision of psychotropic medications be included within a foster youth’s case plan.” Other new California laws of concern to physicians and surgeons include: SB 872: (Dodd) – Pharmacies: Mobile Units SB 923: (Wiener) – Gender-affirming Care SB 1029: (Hurtado) – One Health Program: Zoonotic Diseases SB 1184: (Cortese) – Confidentiality of Medical Information Act: School-linked Services Coordinators SB 1237: (Newman) – Licenses: Military Service SB 1259: (Laird) – Pharmacists: Furnishing Opioid Antagonists SB 1346: (Becker) – Surplus Medication Collection and Distribution SB 1440: (Roth) – Licensed Midwifery Practice Act of 1993: Complaints A summary of recent MBC enforcement actions The MBC’s recent newsletter also discusses its enforcement actions for 2022. The MBC stated that: For the fiscal year 2021-2022, nearly 10,00 complaints were filed with the Board. More than 82% of these complaints were closed. Administrative actions were taken on 438 complaints. “A physician who fails to provide the requested records may be subject to a civil penalty of $1,000 a day for each day the records have not been provided, up to $10,000.” “In FY 2021-2022 (pg.17), the following case types had administrative action taken: Gross Negligence/Incompetence – 211 Licensees Inappropriate Prescribing – 44 Licensees Unlicensed Activity – 1 Licensees Sexual Misconduct – 14 Licensees Mental/Physical Illness – 15 Licensees Self Abuse of Drugs/Alcohol – 64 Licensees Fraud – 10 Licensees Conviction of a Crime – 14 Licensees Unprofessional conduct – 65 Licensees” California enacted many laws in 2022 that are now effective including AB 2178 which explains licensing requirements and issues for physicians and surgeons who work at academic medical centers. AB 2178 updated the definition of an academic center. Other new California laws address many other licensing, treatment, practice, and do’s and don’ts of the medical profession. Physicians and other healthcare providers should contact Cohen Healthcare Law Group, PC to discuss the newest federal, state, and medical board laws and requirements. Our experienced healthcare attorneys advise doctors and other types of healthcare providers about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
March 22, 2023
M&A Nuggets
M & A Nuggets: Beware the Four Corners Offense
As the NCAA Basketball Tournament begins this week, it is appropriate to remember the “Four Corners Offense” and tie it to the merger process. The “Four Corners Offense” was popularized by the University of North Carolina in the 1960s and 1970s. The offense involved four of five players standing in the corners of the offensive half court with the fifth player dribbling in the middle, often for several minutes at a time. The result was a big slowdown of the game with no progress. Sellers of businesses devote substantial time, energy and resources to move a sale transaction to closing, but ultimately, are at the mercy of the purchaser. At the inception of the relationship between the potential seller and purchaser, all things are rosy. The purchaser lets the seller know how impressive the seller’s business is and how terrific of a fit the seller will be with the purchaser. As time unfolds during the merger process, sellers need to have an eagle eye for action or inaction by the purchaser that is not so obvious, but that indicates the purchaser intends to slow down the process, and which often results in the purchaser retreating from the transaction. Here are a few actions or inactions that should trigger concern: Comment from Purchaser: “One or two of our board (or investment committee) members are thinking about the pricing of the transaction or the current economic headwinds.” Real Meaning: The purchaser’s decision making body is rethinking the transaction. Inaction from Purchaser: Purchaser’s counsel is silent on when the purchase agreement will be forthcoming.Real Meaning: Purchaser has told its counsel not to prepare the purchase agreement because the purchaser is rethinking the transaction. Comment from Purchaser: “We are re-examining the valuation based upon current numbers.”Real Meaning: The purchaser intends to lower the purchase price or not proceed. The objective of seller and its counsel is to move the transaction along as fast as possible towards closing, but the above warning signs may indicate that the purchaser is deploying the “Four Corners Offense” and that the purchaser will withdraw. Being able to recognize this sooner rather than later will allow the seller to save a tremendous amount of time, energy and money and refocus on growing its business until such time as a purchaser with intent to complete a transaction arrives on the court ready to play and finish.
March 16, 2023
Litigation
Virginia Civil Lawsuit Filings Increase in 2022
Civil lawsuit filings in Virginia's General District Courts increased 9% during 2022. The biggest increase? Unlawful detainer (eviction) filings. Meanwhile, civil lawsuit filings in Virginia's Circuit Courts decreased, with domestic case filings (including divorces) seeing a notable decrease. Full data from the Supreme Court of Virginia can be found here & here. If you or your organization are served with a civil lawsuit, don’t make any decisions about how to proceed before talking with a trusted attorney in your area. Offit Kurman attorneys are available to advise and counsel you. Reach out to Anders Sleight | Offit Kurman today to discuss your specific situation.
March 16, 2023
One Minute of Overtime
Executive Exemption
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. An employee is exempt pursuant to the administrative exemption, and not subject to the minimum wage and overtime requirements, if the employee is paid consistent with the salary basis test and their primary duty is managing the enterprise, or division thereof, where the employee customarily and regularly directs the work of at least two or more other full-time employees and has the authority to hire or fire or the employee’s suggestions and recommendations as to hiring, firing, etc. is given particular weight.
March 15, 2023
Healthcare
California’s New Electronic Prescription Law – AB 852
More and more states like California are requiring that doctors and any other health providers who have the authority to prescribe medications should prescribe medications electronically. California recently passed a law, Assembly Bill (AB) 2789, that requires that all prescriptions, effective January 1, 2022, issued by a licensed healthcare provider be submitted electronically. Healthcare providers who fail to comply with the new law may be subject to disciplinary action. According to the California Hospital Association, there are some exceptions. A few exceptions include: The technology or electrical failures prevent the prescription order from being sent. The prescription is dispensed from a non-California pharmacy. The prescription is “issued to a patient who has a terminal illness “pursuant to Section 11159.2 of the Health and Safety Code. Other exceptions to the electronic transmission requirement listed in the AB 852 statute include: Prescriptions issued pursuant to Section 11159.2 of the Health and Safety Code. A hospital emergency department or urgent care center issues the prescription and at least one of the following conditions apply: The patient resides outside of California or outside the hospital’s geographic area. The patient is homeless, indigent, and doesn’t have a preferred pharmacy. The prescription is issued “at a time when a patient’s regular or preferred pharmacy is likely to be closed.” A veterinarian is the prescriber. The prescription is for eyeglasses or contact lenses. “The prescribing health care practitioner and the dispenser are the same entity.” Other statutory conditions AB 852 provides that additional exceptions to the electronic data transmission prescription requirement may apply for prescribers who are registered with the California State Board of Pharmacy and who state that the prescriber meets the exception criteria – for example, that the prescriber issues 100 or fewer prescriptions each calendar year. AB 852 also provides “specified exceptions to the requirement for a pharmacy to immediately transfer an electronic prescription to an alternative pharmacy upon request of the patient, including if the action would result in a violation of any state or federal law.” The full list of exemptions is located at Section 688 of the California Business and Professions Code. The Board of Registered Nursing, according to the California Hospital Association, is recommending that licensed prescribers also have paper prescription forms “that meet the requirements of AB 149 should a technological or electrical failure prevent a prescription from being issued electronically.” The California state attorney general’s website has a list of approved security prescription printers. AB 852 – California Assembly (2021-2022) AB 852 states that prior to the January 1, 2022 effective date of the law, existing law: “Provides for the regulation of health care practitioners and requires prescription drugs to be ordered and dispensed in accordance with the Pharmacy Law. The Pharmacy Law provides that a prescription is an oral, written, or electronic data transmission order and requires electronic data transmission prescriptions to be transmitted and processed in accordance with specified requirements.” AB 852 requirements: AB 852 now: Requires that healthcare practitioners who are authorized to issues prescriptions – should have the capability to issue electronic data transmission prescriptions. Pharmacies, pharmacists, or other practitioners authorized to dispense medications should have the capability to receive electronic data transmission prescriptions. AB 852 also requires that: The pharmacy promptly notify the prescriber if the prescription order failed or there was a problem with the prescription order. Healthcare providers who issue “a prescription for a controlled substance” but don’t “transmit the prescription as an electronic data transmission prescription shall document the reason in the patient’s medical record as soon as practicable and within 72 hours of the end of the technological or electrical failure that prevented the electronic data transmission of the prescription.” Patients or people authorized on behalf of the patient may request that a pharmacy that has received an electronic data transmission prescription (from a healthcare provider who has not yet dispensed the medication to the patient) immediately send that electronic prescription to a different pharmacy requested by the patient or an authorized person on the patient’s behalf. As discussed, if the pharmacy (or staff) is aware that the electronic prescription transmission failed or is incomplete the pharmacy must promptly notify the prescriber of the failure/incomplete transmission. AB 852 does not “require the pharmacy verify that a written, oral, or faxed prescription satisfies the specified exemptions.” The law exempts healthcare providers, pharmacists, and pharmacies who provide healthcare to specified individuals – who are under the Department of Corrections and Rehabilitation’s jurisdiction. Other exceptions and conditions may apply that skilled California healthcare lawyers can explain. Additional B 852 regulations AB 852, according to OpenStates, would: “prohibit a pharmacy, pharmacist, or other practitioner authorized to dispense or furnish a prescription from refusing to dispense or furnish an electronic prescription solely because the prescription was not submitted via, or is not compatible with, their proprietary software.” AB 852 would: “Authorize a pharmacy, pharmacist, or other authorized practitioner to decline to dispense or furnish an electronic prescription submitted via software that fails to meet any one of specified criteria, including compliance with the federal Health Insurance Portability and Accountability Act of 1996.” Failure to comply with AB 852 Healthcare providers, pharmacists, and pharmacies that fail to comply with AB 852 will be “referred to the appropriate state professional licensing board solely for administrative sanctions, as provided.” E-prescribing and CMS The Centers for Medicare and Medicaid Services defines E-prescribing as electronic prescriptions that are “accurate, error-free, and understandable” to a pharmacy. CMS supports electronic prescriptions because they help reduce medication errors. CMS requires Part D sponsors, prescribers, and dispensers to support electronic prescribing consistent with regulations at 42 CFR § 423.160. E-prescribing outside of California States outside of California have their own e-prescription laws. For example: “Nevada Assembly Bill 310 mandates that all controlled-substance prescriptions be electronically prescribed. The bill outlines additional regulations for controlled substance prescriptions including penalties for prescribers. See Nevada E-Prescribing for further details.” New York “was the first state to mandate e-Prescribing and put penalties in place for non-compliance. The Internet System for Tracking Over-Prescribing, or I-STOP, mandate was passed in 2012 and requires prescribers to electronically prescribe both non-controlled and controlled.” E-prescribing and HIPAA The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law. HIPAA creates standards for protecting sensitive health information from disclosure without the consent or knowledge of the patient. According to the US Centers for Disease Control and Prevention (CDC), HIPAA applies to “every healthcare provider, regardless of size of practice, who electronically transmits health information in connection with certain transactions.” HIPAA also applies to healthcare plans and other healthcare entities. Generally, the transmission of electronic prescriptions is required by HIPAA – which means that the patient needs to consent to the electronic transmission and the sender and receiver need to comply with HIPAA security rules to protect the patient’s health information. The transmission of electronic prescriptions may involve other federal and state privacy and protection laws that our skilled healthcare lawyers can explain. According to HIPAA Journal, healthcare providers and pharmacies need to review HIPAA’s administrative rules, privacy rule, security rule, and breach notification rule. There are also “best practices” for pharmacies. There are penalties for pharmacies that fail to comply with HIPAA. In addition to compliance with AB 852, CMS rules, and HIPAA, healthcare providers and pharmacies that send and receive electronic prescriptions need to understand the US Department of Justice rules for the electronic prescription of controlled substances. Prescriptions based on telemedicine may raise other legal issues including telemedicine issues and FDA compliance issues. Healthcare providers and pharmacies in California need to understand the new compliance requirements for sending and receiving electronic prescriptions. Failure to comply with the new California Law, AB 852, and other electronic prescription laws such as HIPAA can result in severe disciplinary actions. FAQs About HIPAA and the Right of Access, Part one The US Department of Health and Human Services provides questions and answers to the HIPAA Privacy Rule’s Right of Access. These FAQs directly affect healthcare practices. FAQs About HIPAA and the Right of Access Part two The US Department of Health and Human Services provides questions and answers to the HIPAA Privacy Rule’s Right of Access. These FAQs directly affect healthcare practices Doctors and pharmacies should contact Cohen Healthcare Law Group, PC to discuss California’s new electronic prescription law – AB 852. Our experienced healthcare attorneys advise any healthcare provider with the authority to prescribe or dispense medication about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
March 15, 2023
So, you’re thinking about a Prenup Agreement
More and more couples and considering entering into a prenuptial agreement before marriage. It’s often concerning that even the mention of exploring an agreement would be detrimental to the relationship. The parties are basically negotiating what would happen should there be a divorce, which can cause a great deal of stress, especially if the discussions are near the wedding date. The divorce rate is generally understood to be 50%, no matter where the parties live, or what their social or economic status may be. A prenuptial agreement is a written agreement where an engaged couple considers what would happen upon separation or divorce, which may happen, if it does, at any time during the marriage. The uncertainty of when a separation may take place creates a great deal of anxiety. What if the parties separated in a few years, vis-a-vis after many years, and potentially when the parties have children? Experts suggest that since finances often contribute to conflict in marriages and may often be the reason for separation and divorce, discussing the financial aspects of an agreement may be helpful in that it may promote a foundation for a better relationship. Here are crucial requirements: Give a great deal of thought to what your goals are and what you want to accomplish in the event of separation, divorce or death. Both parties must be represented. There must be full and complete disclosure of assets and debts at the time the Agreement is executed. It must be agreed upon by both parties, and discussions should begin at least six months prior to the marriage to assure that each party is not under any duress. It must be realistic and equitable.
March 14, 2023
Franchise Law
SBA Exiting Regulation of Franchise Relationships as Part of Effort to Increase Availability of Its Small Business Loan Programs
The U.S. Small Business Administration (SBA) is amending various regulations governing SBA's 7(a) Loan Program and 504 Loan Program, including streamlining determinations of loan applicants’ eligibility as small business owners. As part of the amended regulations, the SBA is removing the provisions relating to affiliation based on franchise and license agreements, along with all other provisions evaluating affiliation based on factors other than actual or indirect (or “beneficial”) ownership. Because of that removal, the SBA is eliminating the SBA Franchise Registry as of May 11, 2023. As stated by the SBA, “These revisions remove the principle of control of one entity over another from consideration of affiliation; therefore, the mere fact that an applicant may be a franchisee is not in itself a reason that would render the applicant ineligible for an SBA loan, and thus there is no longer a compelling reason to maintain the SBA Franchise Directory". In addition, the SBA will not require franchisors and franchisees to sign any sort of standard or pre-negotiated franchise agreement addendum to obtain an SBA-guaranteed loan. Instead, as is a requirement for all SBA guarantees of loans, lenders must examine the franchised business for affiliation based on ownership. The SBA announcement described the following as an example: “(W)hen lending to a Franchised business, the SBA Lender must determine who owns the applicant business and any businesses the applicant owns in accordance with these regulations. However, neither the SBA Lender nor SBA will review the applicant Franchised business for affiliation with other entities beyond ownership; the applicant business will not be considered affiliated with the Franchisor or other Franchised businesses except by ownership.” What Does This Mean for Franchising? As to regulation of the franchise relationship, this marks a major retrenchment of SBA’s involvement in that area, having required franchise agreement changes as a condition of lending for several decades. However, readers should note that the Federal Trade Commission is scrutinizing franchise relationships due to a large volume of complaints it has received from franchisees in the process of considering updates to its long-standing Franchise Sales Rule. During March 2023, the FTC issued a “Solicitation for Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices” that may be a preliminary step towards FTC issuing rules restricting franchise agreement terms and/or franchisor business practices that it perceives to be “unfair” to franchisees. In addition, the FTC is accepting comments on extending its proposed rule banning non-competition agreements in employment agreements to include franchise relationships. Finally, bills have been introduced in several state legislatures to substantively regulate aspects of franchise relationships. In terms of franchisee financing, this change may streamline obtaining an SBA-guaranteed loan. However, as the SBA noted in issuing its new regulations, to obtain an SBA guarantee a lender must determine whether the applicant meets all eligibility and other SBA Loan Program Requirements, including: certifying that the applicant does not have the ability to obtain some or all of the requested loan funds on reasonable terms from non-government sources, ensuring that applicants are U.S. citizens or Legal Permanent Residents, obtaining personal and corporate guaranties, confirming that the applicant business has the ability to repay the loan through cash flow of the business, and has eligible uses of proceeds, verifying financial information, obtaining proper collateral and lien position, determining whether there is a direct or indirect impact on historic properties (and) compliance with environmental policies and procedures, and closing the loan in accordance with SBA program requirements. This is a reminder that obtaining an SBA loan is still not the easiest way to finance. Also, we anticipate that, for the development of new franchise locations, lenders may require heightened business plan verification and support from franchisors, especially for emerging franchise systems and for applicants that are new to the system (even for larger franchisors). It may be more important than ever for franchisors to have a package of unit-level financial performance information to provide to lenders.
March 14, 2023
Family Law
Why should I get a Second Parent Adoption?
While many states have followed suit in adding protections for same-sex marriages and families after the Supreme Court decision in Obergefell v. Hodges, there are still many uncertainties when it comes to family formation in the LGBTQ+ community. For example, in a recent case out of Oklahoma, a judge ruled that a married, non-biological mother has no parental rights to the child she and her wife created and were raising together, but the couple’s sperm donor does. In this case, the judge relied on Oklahoma’s parentage laws under the Uniform Parentage Act, which predate same-sex marriage laws, meaning there was no presumption of parentage for the non-biological mom by virtue of the couple’s married status. A Second Parent Adoption provides an added layer of protection for all families where there is an intended parent without a biological tie. In many states, we are backed by the marital presumption, but, as demonstrated in Oklahoma just this year, a presumption can be easily rebutted if given any weight at all. This is why many same-sex families pursue a Second Parent Adoption, which is a court judgment that is recognized and protected in all jurisdictions. Having a skilled attorney who is versed in the Second Parent Adoption process will ensure that your family is protected regardless of the political climate of yesterday, today, or tomorrow.
March 13, 2023
Labor and Employment
Adhering to Laws of Every State in Which Employees Are Working Remotely Part II
As I’ve written before, the employment laws of the states where an employer hires employees are applicable to the employment relationship. If you missed those blogs, you may access them here and here. I am listing more types of laws to consider here. If you’re bored by this topic, I promise this is my last blog on the subject. Prior wages inquiries: The employer can’t do any or all of the following under some state laws: Require, as a condition of employment, that an employee refrain from inquiring about, discussing, or disclosing information about either the employee's own wages or about any other employee's wages (also violates federal law); Seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee's prior wage or salary history meet certain criteria; provided, however, that: If a prospective employee has voluntarily disclosed such information, a prospective employer may confirm prior wages or salary or permit a prospective employee to confirm prior wages or salary; and A prospective employer may seek or confirm a prospective employee's wage or salary history after an offer of employment with compensation has been negotiated and made to the prospective employee. Employers can’t retaliate against employees who report violations. Wage payment: Employers must pay wages earned by employees within different time periods of a termination; the definitions of “wages” and penalties for failing to pay on time vary from state to state. Medical assistance & family medical leave contributions: Employers in some locations must pay into an account set up by the state, similar to the unemployment insurance fund. Workers’ compensation and unemployment insurance premiums: Employers must pay these, in every state, for each employee performing any work in that state. Contribution to a workforce training fund program: Where a state has such a fund or similar, the employer must contribute. The list is not exclusive. There are other employment-related laws in some states that are not common, so I’ve omitted them here. Please ask if you have questions.
March 9, 2023
Business
Cannabis Manufacturing Complicated by New Jersey Industrial Site Recovery Act (ISRA) and Potential Environmental Liability
New Jersey’s Industrial Site Recovery Act (ISRA) may impose significant environmental liabilities on unsuspecting Class 2 Cannabis Manufacturers, including liability for historical contamination. ISRA requires investigation and remediation of all historical contamination, whether or not caused by the manufacturer, each time certain business goes through a change of ownership or control or ceases operations including as a result of a lease termination, subject to specific exceptions and limitations. Cannabis businesses that may be subject to ISRA will want to take additional precautions through due diligence, contracting, and perhaps even obtaining environmental insurance, to limit potential liability. However, ISRA does not apply to all businesses or transactions, and will not apply to all Class 2 Cannabis Manufacturers. In fact, the provisions of ISRA only apply if the following the place of business must have a North American Industry Classification System (NAICS) code listed in N.J.A.C. 7:26 B – Appendix C of the regulations implementing ISRA. A Class 2 Cannabis Manufacturer may fall under a few different NAICS codes, including: 311812 – Commercial Bakeries: This industry comprises establishments primarily engaged in manufacturing fresh and frozen bread and bread-type rolls and other fresh bakery (except cookies and crackers) products.” 311991 – Perishable Food Manufacturing: This industry comprises establishments primarily engaged in manufacturing perishable prepared foods, such as salads, sandwiches, prepared meals, fresh pizza, fresh pasta, and peeled or cut vegetables. 325411–Medicinal and Botanical Manufacturing: This industry comprises manufacturing uncompounded medicinal chemicals and their derivatives (i.e., generally for use by pharmaceutical preparation manufacturers) and/or Grading, grinding, and milling uncompounded botanicals 424590– Other Farm Product Raw Material Merchant Wholesalers: This industry comprises establishments primarily engaged in the merchant wholesale distribution of farm products (except grain and field beans, livestock, raw milk, live poultry, and fresh fruits and vegetables). It is possible that a business will have multiple operations at a single location, and then the dominant use must be determined for purposes of ISRA. The only ISRA-subject code noted above is 325411 (Medicinal and Botanical Manufacturing), but other ISRA-subject codes not listed above could apply in certain situations. Class 2 Cannabis Manufacturers with medicinal and botanical manufacturing as the dominant use may need to comply with the requirements of ISRA each time a change of ownership or operations, or a cessation of operations, including a lease termination, occurs. These businesses should protect themselves by conducting due diligence on historical contamination, carefully allocating environmental risks and liabilities in leases and other real estate contracts, and perhaps even obtaining pollution legal liability or other environmental insurance. Competent local environmental attorneys can assist with the evaluation of whether ISRA applies, and, if it does, advise on risk mitigation.
March 9, 2023
Litigation
Beware Sellers . . . Caveat Emptor May Not Be All You Believe it to Be!
When it comes to buying residential real estate in Virginia, the doctrine of caveat emptor, or “buyer beware,” may not be as onerous as you think. I’ve had numerous potential clients come to me with horror stories of post-purchase discoveries or mishaps occurring shortly after buying a property. Appliances are breaking down, ceilings are collapsing, and water in the basement! – just to name a few. Generally speaking, there’s not a whole lot one can do about it other than get the problem fixed! If you’re smart, you’ve paid for a good homeowner’s insurance (always get an HO policy! and have it in effect the moment you take the title – if not sooner!). If you’re doubly smart, you insisted upon having a pre-purchase inspection (and bordering on brilliant if you did your homework and checked the credentials of your inspector!). You’re atop the smarts pyramid if, in addition to all that, you also managed to sign an agreement with your inspector in which you refused to limit your damages to whatever comparative pittance you might have paid the inspector (g’luck with that one!). Congratulations are still in order if you at least insisted on accompanying the inspector and insisted further that everything gets inspected as thoroughly as possible for the money (to each their own as to how far to take this one, but I suggest you consider the following before you decide the extent to which you take heed . . . . Believe it or not, not every home seller is completely above board when it comes to disclosing shortcomings. This may shock you, but some share less than the full truth about the foibles and/or outright problems with their soon-to-be-someone-else’s-money-pit of a home. In fact, some people lie! NO?! Yes. It’s one thing to be less than completely forthcoming; it is quite another to hide, mislead, deflect, cover-up, and/or outright deny problems that exist. “Have these pipes ever caused you any problems? Have you ever had any water issues in the basement? Any known cracks in the foundation? How’s the roof? Has the place ever been struck by lightning to your knowledge?” How a seller responds to these inquiries may very well provide a future legal cause of action against them, even if they have seen fit to try to protect themselves as sellers with anything and everything from a “caveat emptor” contract condition to an “as is, where is” clause, and a disavowal of any buyer’s reliance on absolutely anything the seller might have said prior to finalizing the deal. In fact, you can take it up another notch (turn the volume up to eleven, if you will!) and find that you might still have a claim against the sellers even if, after signing a contract with all of these seller protections, you only closed on the deal after having a professional inspector look to find any problems and fail to discover anything. Now, in the event of a major “miss” from your inspector, you might certainly want to get your money back for a negligent inspection, for sure! (And, hopefully, you were savvy enough in advance to have negotiated out of your typical “money back” liability cap on the inspection contract). The key to whether you have any reasonable expectation of recovery from the sellers is if they committed fraud in the process. You see, it’s one thing not to discover problems when you are actively looking for them; it’s another thing entirely when a seller purposefully covers them up and/or affirmatively takes steps to prevent the discovery of the problem altogether. In this regard, I was recently surprised to learn that such cover-up actions can themselves satisfy the “misstatement” element required to establish an actionable fraud claim. In other words, a seller need not affirmatively lie about a problem if acts to “put you off your guard,” i.e., to prevent you from discovering the true nature of the condition. Consider in this regard examples such as damage from an active water leak that gets covered up, painted over, re-plastered, etc.; a “new” roof that was cheaply/improperly installed (with no underlayment by unskilled day laborers); denied access to a problem area (a locked entrance to a boiler room where the allegedly/assuredly “brand new” boiler is located); or, perhaps, a covered-up, foundation wall crack (for instance, with water-absorbent, sawdust packed in the newly-walled over “renovations” – yup, it’s been done!). All of these present possible major problems and potentially unmanageable expenses (not to mention frustration and aggravation!) after the purchase. Should you even bother asking the sellers if any of these potential deal-breakers exist? Undoubtedly, yes. Perhaps they respond truthfully when asked. You won’t know if you don’t try. Alternatively, perhaps they lie and deny it. What then? Trust but verify! But if you do get taken for a ride, you may not be a defenseless victim. Fraudulently inducing someone into a real estate purchase may not only be actionable in particular circumstances, it might also include with it the recovery of legal fees – often the difference between being made whole with a successful case and not being able to afford to bring the case in the first place. So, caveat emptor, for sure . . . but to those would-be fraudsters thinking they can hide safely behind this good-faith seller’s protection, I say, “caveat venditor!” And to those believing themselves victimized, I say document the seemingly fraudulent statements and actions and have a qualified legal professional look before you opt to do nothing.
March 8, 2023
Healthcare
California Assembly Bill (AB)-890 and Two New Nurse Practitioner Categories
Assembly Bill 890 was signed by California Governor Newsom. The law which went into effect on January 1, 2023, creates two new Nurse Practitioner (NP) categories. The California Association for Nurse Practitioners (CANP) states that the law enables NPs in certain practice settings to start practicing without physician supervision and expand much-needed care. The law, according to the California Board of Registered Nursing (BRN), also provides education, regulatory, training, certification, and medical staff governance requirements for those two categories. The BRN provides the following list of Frequently Asked Questions and Answers. Our seasoned healthcare compliance lawyers are ready to discuss all your AB 890 questions and review all your federal, California, and local healthcare compliance requirements. What are the New NP Categories? AB 890 establishes two new categories called 103 NP and 104 NP. The two new categories don’t “significantly extend or alter the current NP’s scope of practice.” The new NP categories provide additional authority to work without standardized procedures. Please see our prior discussion of nursing and scope of practice requirements for more information. Please see our prior discussion of standard procedures for additional information. California’s New Scope of Practice Law for Nurse Practitioners – Part One California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” California’s New Scope of Practice Law for Nurse Practitioners – Part Two California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” How Doctors & Nurses Use Standardized Procedures for Medical Spa Compliance Doctors and nurses and standardized procedures, oh my! Well it doesn’t quite have the same resonance as Dorothy’s chant in Wizard of Oz, but doctors and nurses and standardized procedures really […] 103 NP This category of nurse practitioner works under the provisions of the Business and Profession Code Section 2837.103. A 103 NP “can work without standardized procedures, in a group setting with at least one physician and surgeon, within the population focus of their National Certification.” BPC Section 2837.103 provides that in addition to any other authorized practices, an NP who meets the requirements of the statute “may perform the following functions without standardized procedures in accordance with their education and training:” Conduct advanced assessments. Order, perform, and interpret diagnostic procedures. “For radiologic procedures, a nurse practitioner can order diagnostic procedures and utilize the findings or results in treating the patient. A nurse practitioner may perform or interpret clinical laboratory procedures that they are permitted to perform under Section 1206 and under the federal Clinical Laboratory Improvement Act (CLIA).” Establish primary and differential diagnoses Prescribe, order, administer, dispense, procure, and furnish certain therapeutic measures, including, but not limited to those set forth in the BPC. “After performing a physical examination, certify disability pursuant to Section 2708 of the Unemployment Insurance Code.” Delegate some tasks to a medical assistant based on other regulations A 104 NP A 104 NP works pursuant to Business and Professions Code Section 2837.104. A 104 NP “may work without standardized procedures, outside of a group setting, within the population focus of their National Certification.” Among other provisions that experienced healthcare lawyers can explain, BCP 2837.104 provides that: (c) A nurse practitioner authorized to practice pursuant to this section shall comply with all of the following: “(1) The nurse practitioner, consistent with applicable standards of care, shall not practice beyond the scope of their clinical and professional education and training, including specific areas of concentration and shall only practice within the limits of their knowledge and experience and national certification.” “(2) The nurse practitioner shall consult and collaborate with other healing arts providers based on the clinical condition of the patient to whom health care is provided. Physician consultation shall be obtained as specified in the individual protocols” and under the circumstances set forth in the statute such as when a patient requests a physician consultation, emergency conditions that require “prompt medical intervention after initial stabilizing care has been started,” and other circumstances. (3) “Nurse practitioner consultation with a physician and surgeon alone shall not create a physician-patient relationship. The nurse practitioner shall be solely responsible for the services they provide.” [Emphasis added]. (4) “The nurse practitioner shall establish a plan for referral of complex medical cases and emergencies to a physician and surgeon or other appropriate healing arts providers.” The plan should meet additional criteria set forth in the BCP law. (d) “A nurse practitioner shall verbally inform all new patients in a language understandable to the patient that a nurse practitioner is not a physician and surgeon. For purposes of Spanish language speakers, the nurse practitioner shall use the standardized phrase “’enfermera especializada.’” Can an NP start practicing independently as an NP immediately in January 2023? No. An NP who wants to practice “without standardized procedures, must apply to the BRN for a special certification before they can do so.” There is no automatic grant of this authority. To apply for 104 NP status, a 103 NP must work as “a 103 NP in good standing for at least 3 years prior to becoming a 104 NP.” This means that the earliest the California Board of Registered Nursing can certify 104 NP is 2026. How do I apply to become a 103 NP? The BRN has released the new 103 NP application via BreEZe. Eligible NPs can start applying now. The BRN is encouraging all licensees to routinely check their emails to confirm that their application is live. What are the eligibility requirements to become a 103 NP? Business and Profession Code Section 2837.103, requires that the NP meet the following requirements to obtain 103 NP status: Certification as an NP by the California Board of Registered Nursing. Hold[ing] a National Certification in a recognized population focus consistent with 16 CCR 1481 by a national certifying body accredited by the National Commission for Certifying Agencies or the American Board of Nursing Specialties and recognized by the Board. Completion of a “transition to practice within the category of your National Certification in California of a minimum of three full-time equivalent years of practice or 4600 hours within 5 years of the date of your application.” What is a transition to practice? Business and Professions Code 2837.101 states that “transition to practice refers to additional clinical experience and mentorship provided to prepare a nurse practitioner to practice independently.” Examples of this additional clinical experience and mentoring include “managing a panel of patients, working in a complex health care setting, interpersonal communication, interpersonal collaboration and team-based care, professionalism, and business management of a practice.” The clinical and mentorship experience must include either three-full time equivalent years or 4600 hours completed – in California, within five years prior to the date the applicant applies for certification as a 103 NP, after BRN certification as an NP, or if direct patient care meets additional criteria. How does the Board verify an applicant has completed their transition to practice? The 103 NP needs to provide proof the NP completed the “transition to practice.” The NP will submit to the BRN information about the provider(s) “who oversaw and provided the mentorship during the transition to practice period.” The BRN will then request that the provider(s) attest to the applicant’s training. The providers must be competent in the same specialty area or category listed in 16 CCR Section 1481(a) in which the applicant seeks as a 103 NP. The person or entity that attests to the NP’s transition to practice “cannot have a familiar or financial relationship with the applicant and will be attesting to the applicant’s completion of the transition to practice requirement under penalty of perjury.” Can a 103 NP or 104 NP work in any content area without standardized procedures? No. An NP applicant can only obtain certification as a “103 NP or 104 NP and practice without standardized procedures in whichever of the six NP categories outlined in 16 CCR 1481(a) that the [NP] received their education and training in, hold a national certification in and completed their transition to practice clinical experience in.” These six categories are: Family/individual across the lifespan Adult-gerontology, primary care, or acute care Neonatal Pediatrics, primary care, or acute care Women’s health/gender-related Psychiatric-Mental Health across the lifespan Will the Board certify 103 NPs and 104 NPs in categories other than those outlined in 16 CCR 1481(a)? “According to Business and Professions Code Section 2837.103(a)(1)(B) and Section 2837.104(b), a 103 or 104 NP must hold a certification from a national certifying body accredited by the National Commission for Certifying Agencies or the American Board of Nursing Specialties and recognized by the Board.” “NPs who wish to progress to a 103 or 104 can only do so in whichever of the six NP categories outlined in 16 CCR 1481(a) in which they received their national certification in.” The Board cannot currently grant a 103 or 104 NP status in additional specialty areas such as an Emergency NP or a Dermatology NP. Can I open an independent practice as a 104 NP? “Yes. After 2026, when approved by the Board to become a 104NP, a 104 NP can practice without standardized procedures outside of a group setting. However, they cannot practice beyond the scope of their clinical and professional education and training, including specific areas of concentration. A 104 NP can only practice within the limits of their knowledge and experience and national certification.” BPC 2837.104(c) requires that “a 104 NP conduct a certain level of consultation, collaboration, and referral to other healing arts providers based on the clinical condition of the patient receiving care.” How can an employer, patient, or any interested party verify whether a licensee has been certified by the Board as a 103 NP or 104 NP? The authority to practice as a 103 NP or 104 NP will be “displayed along with their RN license status through DCA’s License Search,” an online search tool. Additional information about Assembly Bill 890 includes the following: Overview of Assembly Bill (AB) 890 (ca.gov) OPES Occupational Analysis for Nurse Practitioners (AB 890) BRN’s Proposed Regulations to Implement AB 890 Overview of Assembly Bill (AB) 890 – Presentation by Reza Pejuhesh, Board Legal Counsel California AB -890 authorizes two categories of nurse practitioners who can practice without physician supervision if specific criteria are met. A 103 NP can work in a group setting with at least one physician and surgeon, within the population focus of their National Certification.” A 104 NP may work without standardized procedures, outside of a group setting, within the population focus of their National Certification.” There are specific eligibility and practice requirements for both categories of NP – 103 and 104. Nurse practitioners should contact Cohen Healthcare Law Group, PC to discuss the eligibility and practice requirements for 103 NP and 104 NP status. Our experienced healthcare attorneys advise nurses and other healthcare professionals about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
March 8, 2023
Business
Crisis Management – Lessons from the Law, Aviation and Real Life
Originally posted on 03/04/2020, content updated on 03/04/2023 Crises are often self-inflicted, such as the Boeing 737 Max crisis in which Boeing’s executives apparently ignored the very people inside Boeing who knew of the Max’s problems – the pilots. “After the crash, Boeing issued a bulletin disclosing that this line of planes, known as the 737 Max 8, was equipped with a new type of software as part of the plane’s automated functions. Some pilots were furious that they were not told about the new software when the plane was unveiled.”[1] “Boeing Pilot Complained of ‘Egregious’ Issue With 737 Max in 2016” was a headline in the New York Times.[2] Too often a crisis in the cockpit is so urgent that time does not allow for taking out the paper or electronic flight manual to help analyze and solve the problem. Student pilots are taught the “4 C’s” -- when faced with difficulty, “Climb, Communicate, Confess and Comply with instructions.”[3] In addition to learning what’s in the flight manual for the aircraft being flown, the 4 C’s are part of every pilot’s proficiency check ride. “A pilot goes through four stages of proficiency when learning a new airplane, a new set of skills, or working in a new environment. Those stages are Cautious, Compliant (or Current), Confident and Complacent. The last of these can kill you.”[4] Boeing as an institution seems to have gotten “complacent” when it came to Max’s safety because, it appears, those in the C-suite knew better than the pilots in the trenches. Once a self-inflicted crisis due to whatever cause, such as complacency, escalates, the 4 C’s come into play – Climb to safety, Communicate the problem, Confess what you did and what the problem is, and Comply with instructions from the higher authority of air traffic control. Boeing did what the Iranians did in the crash of a Ukrainian Boeing 737-800 (not a Max). The Iranians denied there was a problem and blamed someone else. Boeing blamed pilot error and the Iranians blamed mechanical failure. The two Boeing Max crashes occurred when foreign pilots were in control of new Boeing Max jets maintained and operated by foreign airlines. The Iranians did what some say they do best – invoke the big lie. The Iranians had no access to the black box or to cockpit information; there was no distress call; and in lying the Iranians were effectively faulting Ukraine’s pilots, mechanics, and pilot training even though Ukraine has one of the best safety records in terms of aircraft maintenance and pilot training. Only days later did the Iranians admit their military “unintentionally” shot down the Ukrainian airliner.[5] Even when “confessing,” the Iranians continued to lie – the missile was fired intentionally at an ascending aircraft, not at a descending incoming anything, and the Iranian’s Russian missile homed in on the airliner’s transponder which is what those missiles are supposed to do to hit their targets. The “unintentional” word was intended to excuse the incompetence and stupidity of the Iranian missile defense personnel. Bill Clinton in the Monica Lewinsky affair invoked only part of the 4 C’s -- he Climbed by telling America he had to get back to work as President of the United States, and he certainly Communicated that position. He also did the big lie when he denied he had had “sex with that woman.” In telling America, “It depends on what the meaning of ‘is’ is,”[6] President Clinton made every American parent of a daughter cringe. Boeing, Iran and President Clinton created these crises, and all mismanaged them. While it would seem axiomatic that a self-inflicted crisis can be managed more easily than an unexpected crisis, that unfortunately appears not to be the case. In unexpected crises, these rules of aviation also apply. The obituary of one of America’s foremost crisis management experts, Harold Burson, said: “Mr. Burson advised corporate C.E.O.s to get bad news out quickly and fully, making it a one-day story rather than letting it drag out. He urged them to be candid, and refused to take clients who could not be. He held staff seminars to promote Burson-Marsteller’s ‘vision and values.’ He was less interested in hiring reporters with contacts than he was in finding good writers who could capture the essence of a client. As business and financial news reporting improved in the 1970s and ’80s, he sought writers adept at detailed analysis, not the old puffery about chief executives and companies.”[7] [Emphasis added] Boeing, Iran and President Clinton could have used and heeded this advice which looks similar to the 4 C’s As a lawyer for over 50 years, I have had the privilege of having clients trust my judgment when a crisis occurs. Sometimes those have been “bet-the-company” crises. Boeing’s Max crisis was potentially a “bet-the-company” crisis. The Iranian shoot-down of a passenger plane and killing all 176 aboard was nothing more than a seeming “public relations” crisis to the Iranian regime.[8] And the Clinton crisis was a “Bet-the-Presidency” crisis that turned on a 50-50 Senate vote. “Over the years, I learned that the traditional advice of a lawyer to avoid public comment during a legal crisis had become outdated, especially with the impact of the Internet at the turn of the twenty-first century. . . . It was no longer viable for a lawyer to tell a client, ‘We’ll win it in the courtroom—we won’t litigate this in the media.’ There were too many ways for the judge and the jury to be influenced by public opinion, consciously or unconsciously; too many ways for prosecutors and regulators to be persuaded by adverse media coverage to launch an investigation or to bring a case, as broadcast news, once a day, became 24/7 cable, and then within just a few years, the Internet led to websites and then some blogs and then the blogosphere and then Google, Twitter, YouTube, WiFi, and social networks. Everything that follows ineffective crisis management – developing a simple message, rapid response to correct misinformation that could hurt a client’s reputation, share values or outcome in the courtroom – and, in the long-term, repairing the damage begins with the need to get the facts, all the facts, good and bad – not just those that attorneys are ready to tell a non-attorney crisis manager or public relations, consultant. And that means getting access to all the facts, first with the protection of attorney-client privilege.”[9] While the author of that advice was one of President Clinton’s advisers in the Paula Jones and Monica Lewinsky matters, his words of today, which may be ironic given what happened some 25 years ago, are valuable: “The first rule of Crisis Management is to get all the facts.”[10] Some law firms have created crisis management practices, sometimes within their government investigations practices. One firm “advocates a multifront approach to crisis management. Whether the situation stems from internal problems or external events, we enable our clients to maintain focus on their business objectives while managing a crisis to its best outcome.”[11] In aviation terms, this law firm is telling clients to continue to fly the airplane – continue to run their businesses, which is the “Climb” mandate of the 4 C’s, and the lawyers will gather the facts and engage other professionals such as public relations or crisis management firms, under the umbrella of the attorney-client privilege, and then advise the client on potential courses of action. An Above-the-Law article explains the critical importance of learning the facts: A hospital manager’s lost laptop with protected patient information on it meant the focus had to be not first on what the potential damage for a HIPAA violation could be, but first on making sure the “fact” the laptop was lost was accurate. “[T]he only ‘wise’ decision I made that day was to turn over the reins of our response to my colleague who suggested we first ask the manager to retrace her steps over the previous day. And as luck would have it, her laptop turned up in a rarely used conference room a few minutes later. Safe and sound, and most importantly, no violation of HIPAA or our patients’ information.”[12] There is no substitute for learning the facts as quickly and as accurately as possible. Another aviation crisis management lesson taught to all student pilots and repeated at all phases of pilot training is to “Aviate, Navigate, Communicate.”[13] The “Aviate and Navigate” part of this mandate is the “Climb” part of the 4 C’s. The “Communicate” element is shorthand for the “Communicate, Confess and Comply with instructions” part of the 4 C’s. The client must always Aviate and Climb – run the business. The Confess part is usually where things get dicey in terms of whether the client will come clean with the lawyers. Boeing apparently did not. The global media were the lawyers in the case of the Iranian shoot-down of the Ukrainian aircraft. And we do not know whether President Clinton Confessed to his advisers at the time all of the facts regarding Paula Jones, Monica Lewinsky and other women accusers. I chose the aviation analogy to crisis management for business because as a licensed pilot for more than 40 years and having owned my own single engine aircraft for more than 38 years, I have had my share of difficult situations just as every plot does. Having a landing light blow out on approach to an unfamiliar non-tower controlled airport after a multi-hour night cross country to work on an acquisition in Maine; having a very large Seagull dive towards my windscreen and hit my right wing over the New Jersey Turnpike at 500 feet on approach to my home airport; and getting lost when encountering an unexpected snow squall in Western Pennsylvania, many occurring in my aircraft’s pre-GPS days, were all manageable because of my recurrent pilot training to prepare for those potential crises. While the possible crises in aviation are seemingly endless, especially the more complicated the aircraft, training and more training proves the adage that “practice makes perfect.” There are some crises that cannot be practiced in an aircraft and need to be practiced in a simulator, especially when flying more complicated aircraft. An airplane is a machine with parts, systems, passengers and crew that can malfunction. What we do as student pilots and then as pilots is train for contingencies. Training for a crisis in business is not as easy as training for a crisis in aviation because training for crises is usually not part of a business’s agenda. Contingency planning can be urged by insurers, and some companies’ management will have risk managers who do engage in contingency planning. Unenlightened management will often view costly contingency planning as an expense without a quantifiable immediate benefit. How often do we roll our eyes at fire drills in high rise office buildings? This is contingency planning and practice, or recurrent training, no different from what we do as pilots. “If you see fire or smoke, follow the four ACES of high rise building fire safety: 1. ACTIVATE the fire alarm immediately by pulling the nearest Fire Alarm Box . . . . If you cannot pull the Fire Alarm, call 911. 2. COMMUNICATE with the Fire Warden Team and other colleagues on your floor. 3. EVACUATE by using the stairs . . . . DO NOT USE THE ELEVATORS. Members of the Fire Warden team will lead the evacuation down two or more floors for re-entry (or if there is the need to evacuate the building completely . . .). 4. SELF-ESCAPE Stay calm, don’t panic. Stay low in smoke conditions, and close doors to confine fire and smoke. Feel doors before opening them; if they’re hot, don’t open!”[14] Isn’t this really a tenant’s variant on “Climb, Communicate, Confess and Comply with instructions?” “I have written before about the necessity of contingency plans, but what if there is simply no time to pull out the book and turn to page 63? You are in a state of emergency, your stomach is in a knot, and the CEO is asking you some very difficult questions. Grab the canoe. Take a breath and do your best.”[15] The canoe is the business or the aviate and navigate/fly the plane part of dealing with an aviation crisis. “First, you must ‘grab the canoe’ and get back to floating; only then can you assess what else might be wrong (missing possessions, food, wet socks, etc.). Things are going to go screwy during your tenure as an attorney — they just will. You cannot possibly plan for everything, but you can remember the mantra of ‘grab the canoe.’ The canoe is a metaphor for the stasis that usually surrounds your job. You are first and foremost representing an entity. . . . The entity is what keeps you and the other employees afloat. During a crisis, all of the happenings within the entity are to be worried about after first taking care to right your primary client, the business. Some things that occur in an emergency, or a quickly moving negotiation, can be left behind, such as obsolete contractual language. Other issues are absolutely necessary in a publicly-traded company — reporting requirements, for instance. And in the time it takes to read this column, some of these issues can overturn your company’s sense of balance, and leave you drifting.”[16] “Of course we are not saving lives, or curing dread disease. We practice law. The key is in the word “practice.” As you practice, answers become ingrained, and your expertise begins to grow. After years of “practice,” you enable yourself to right tipped canoes, and assist stressed CEOs quickly, efficiently, and appropriately. But in the recesses of your mind, you must always be aware of the possibilities for crisis. Remember that in the moment you will rely on what you know and keep the primary focus on staying afloat. You can allow yourself to let the what-ifs creep in once you are past the crisis and are happily ensconced at the third seat at the bar, with a martini safely in hand.”[17] Crises can be big or small. And they can sometimes involve saving lives. It is not often we as lawyers are called upon to help clients deal with “Bet-the-Company” or life-and-death crises. Our “practice” for these crisis events usually comes on the job and our performance often turns on the judgment we have developed from experience, from observing more experienced lawyers, from reading as much as we can about as much as possible, and most of all from thinking and analyzing what we read, see and hear and all the what-if’s that never cease in our daily law practices. In my law practice, I have had a few “Bet-the-Company” crises to help clients through. Fortunately, all turned out fine. One involved consumer product tampering and the other involved a brother-in-law’s attempt to misappropriate my client’s business. The Product Tampering Crisis: The CEO of my branded consumer product client called in a panic, telling me a supermarket executive notified the client and FBI that one of its stores had received a call from someone claiming to have put poison in a container of the client's product. The client asked whether he should issue a product recall. I have used this example in interviewing job applicants. I ascertained the facts by speaking with the client’s CEO, COO and plant manager and by liaising with the FBI. I learned that wiretaps had been placed on the supermarket's telephone lines and that the FBI agent’s experience was more often than not these were hoaxes. My advice to the client was to wait, not rush to issue a product recall, and instead to withdraw the product just from the stores in the local area, to test the withdrawn product, and to replace the product with new product produced at a different plant. That was done and testing proved negative. We waited. This was in the days before computer real-time inventory could tell us how much product had been purchased at each location. If no poisoned product was out there and the client issued a recall, the company and its brand would have been severely and possibly irreparably damaged. If a poisoned container was already out there in commerce to an unsuspecting consumer, the company would be severely damaged, and a recall would necessarily follow. The FBI agent and I thought the odds of a just-purchased container being consumed and harming or killing someone were fairly low. The supermarket received a second call from the same caller a few hours later. The FBI wiretap led to an arrest that day of a disgruntled teenage supermarket employee who confessed to the hoax. A public product recall was avoided, and no one was hurt. The Brother-In-Law Crisis: A prospective client was referred to me to discuss estate planning and his desire to leave his hotel business to his adult child who had joined the business and opened an on-premises restaurant. The client believed this hotel was “his,” as the client ran this hotel and his brother-in-law ran two other hotels that all four in-laws owned. I needed to know what the client owned, not what the client told me he owned. After reading the relevant documents, I learned that the client did not own or control the business he thought he did, and he would not be able to leave the business to his heir. The client owned 26% of a limited partnership that owned the business, and he was one of two general partners, the other being his brother-in-law, a very controlling and domineering person. The brother-in-law conditioned his okay for the client’s adult child to open the restaurant on the restaurant providing, at its expense, free breakfasts to the hotel’s guests. The client's then-lawyer and then-accountant were among the dozen or so family and friends limited partners. The partnership's term was contractually scheduled to expire some years earlier, but the brother-in-law, attorney and accountant had advised the client to extend the partnership's term because if the business was sold, they would all have to pay taxes. It was not a coincidence that each limited partner's original investment was yielding an annual 700% cash return, all while the assets of the business had appreciated significantly. Because the client was the nicest person I had ever met and was the kind of man one would choose as your father if that was a matter of choice, the client was not confrontational and did not want to sue despite what I thought were good claims against some of the actors here. I devised a non-litigation strategy that included the partnership not distributing cash to its partners so the partnership could use its cash for acquisitions and other business matters. That resulted in the partners having taxable income without cash being distributed to them. The client offered to buy out the limited partners who rejected the offer, commenced arbitration, and sued for an injunction to compel cash distributions. Although the client would not sue, he would defend himself quite vigorously. The injunction was denied. The case proceeded to pre-arbitration mediation. Relying on their own "expertise," the former lawyer and former accountant chose not to obtain an appraisal and agreed on behalf of the limited partners to a buy-out at a particular partnership valuation. I arranged for a bank client to make a loan to the partnership in an amount greater than the buy-out value of the limited partners’ 48%. The bank's appraised value of the business turned out to be about 50% greater than the buy-out value. After some intra-family transactions, this crisis was resolved with my client owning 100% of his business and having the ability to leave his very valuable asset to his heir. The client said that the decision to make me his attorney was the most significant business decision of his life. It is critical to ascertain the facts in any crisis situation, both for the lawyer and the client, and the lawyer must be able to communicate those facts clearly to the client and ultimately to others involved in the crisis. “’We are advocates,’ Mr. Burson told The New York Times in 1984. ‘We are being paid to tell our clients’ side of the story. We are in the business of changing and molding attitudes, and we aren’t successful unless we move the needle, get people to do something. But we are also a client’s conscience, and we have to do what is in the public interest.”[18] While we are advocates to the world outside the client, we need to be truth-tellers to and questioners of the client. “When cyanide-laced capsules of Tylenol, the pain medication, killed seven people in the Chicago area in 1982, its manufacturer, Johnson & Johnson, made the best of a bad situation. After consulting Mr. Burson, the company’s chief, James E. Burke, announced a recall, ordered new tamper-resistant caplets and packaging seals, and mounted a campaign that acknowledged the facts, stressed safety measures and eventually restored his company’s credibility. ‘Basically, I served to help him think through problems and reinforce his own instincts,’ Mr. Burson said of Mr. Burke. It was not modesty. P.R. people have always tried to keep their hands invisible, allowing clients to take credit and blame, and the Tylenol case is often cited as a textbook model of corporate responsibility in a crisis. No one was ever prosecuted for the tampering, or for an isolated 1986 recurrence.”[19] (Coincidentally, I advised a pharmaceutical packaging company client at that time that repackaged Tylenol in tamper-evident packaging following that crisis.) Sometimes, identifying and articulating the facts suggests a solution. In my examples, each business needed to continue to be operated while these crisis situations played out and resolved. “Climb, Communicate, Confess and Comply with instructions” is the client’s job in a crisis. Our role as lawyers is to focus the client on running the business and ascertaining the facts as rapidly and as accurately as possible, evaluate options with the client, and then together arrive at the solution that makes the most sense for the client and the client’s constituencies. "Never let a good crisis go to waste" has been attributed to Winston Churchill[20] and to others.[21] No matter the outcome of a crisis, there is always a lesson to be learned. [1] https://www.washingtonpost.com/business/economy/new-software-in-boeing-737-max-planes-under-scrutinty-after-second-crash/2019/03/13/06716fda-45c7-11e9-90f0-0ccfeec87a61_story.html[2] https://www.nytimes.com/2019/10/18/business/boeing-flight-simulator-text-message.html [3] https://airfactsjournal.com/2018/09/the-other-4-cs-of-aviation/ [4] https://airfactsjournal.com/2018/09/the-other-4-cs-of-aviation/ [5] https://www.nbcnews.com/news/world/iranian-military-says-it-unintentionally-shot-down-ukrainian-plane-n1113996 [6] https://en.wikipedia.org/wiki/Impeachment_of_Bill_Clinton [7] Harold Burson, a Giant in Public Relations, Dies at 98 https://www.nytimes.com/2020/01/10/business/media/harold-burson-dead.html [8] https://en.wikipedia.org/wiki/Ukraine_International_Airlines_Flight_752 [9] Lanny J. Davis, Why Lawyers Are Best At Crisis Management http://www.lannyjdavis.com/why-lawyers-are-best-at-crisis-management/ [10] http://www.lannyjdavis.com/why-lawyers-are-best-at-crisis-management/ [11] https://www.steptoe.com/en/services/practices/criminal-defense-investigations/crisis-management.html [12] https://abovethelaw.com/2017/05/counseling-through-an-in-house-crisis/ [13] For much more on this topic, see https://idea.library.drexel.edu › idea:6094 › datastream › OBJ › download). [14] https://finance.columbia.edu/content/building-evacuation-procedures [15] https://abovethelaw.com/2013/07/grabbing-the-canoe-or-reflections-on-crisis-management/ [16] https://abovethelaw.com/2013/07/grabbing-the-canoe-or-reflections-on-crisis-management/?rf=1 [17] https://abovethelaw.com/2013/07/grabbing-the-canoe-or-reflections-on-crisis-management/?rf=1 [18] https://www.nytimes.com/2020/01/10/business/media/harold-burson-dead.html [19] https://www.nytimes.com/2020/01/10/business/media/harold-burson-dead.html [20] https://realbusiness.co.uk/as-said-by-winston-churchill-never-waste-a-good-crisis/ [21] http://freakonomics.com/2009/08/13/quotes-uncovered-who-said-no-crisis-should-go-to-waste/
March 4, 2023
Labor and Employment
Adhering to Laws of Every State in Which Employees Are Working Remotely
As I’ve written before, the employment laws of the states where an employer hires employees are applicable to the employment relationship. If you missed that blog, you can access it here. I am listing more types of laws to consider. Sexual harassment policies: It may be legally required to adopt a policy against sexual harassment and provide notice of the policy at certain times. Workplace safety laws: Enough said. Non-competition agreements in an employment relationship: Severely limited or forbidden in some states and may soon be federally banned. Please look at my previous blog on this topic and the proposed legislation. Mini-COBRA laws: There are some state laws applying the COBRA requirements to employers with less than 20 employees. Voting leave: In certain cases, employers are required to provide leave to vote for a certain length of time and be paid for this. Lie detector tests: Requiring or requesting one is unlawful in some locations. Requiring the use of certain surnames: In some states, it’s illegal for employers to require employees to use, because of such individual's sex or marital status, any surname other than the one by which such individual is generally known. Veterans’ Day & Memorial Day leave: Employers in some locations must grant unpaid leave to a veteran or a member of a Department of War veteran who desires to participate in a Memorial Day exercise, parade, or service in the employee's community of residence. Volunteer emergency responders’ leave: Employers can’t take any disciplinary action against any employee of some states because they fail to report for work at the commencement of their regular working hours, where such failure is due to his responding to an emergency in their capacity as a volunteer member of a fire or ambulance department. This list is not exhaustive. I will continue the list in my next blog. I’m able to advise on employment laws applicable in other states, as needed.
March 3, 2023
Estates and Trusts
Three Reasons a Lawyer Should Settle Your Estate
When a loved one has died, the shock and sorrow of their loss may quickly lead to another emotional jolt—the prospect of having to settle their estate. Being named personal representative (executor) under someone’s will is both an honor and a burden. The process usually takes several months. There will likely be financial accounts to marshal, real estate to deal with, bills and taxes to pay, and probate filings to prepare—all at an emotionally difficult time. For many personal representatives, their first question is “How can I get out of this?” The good news is that a probate attorney can provide the necessary support and expertise to ensure that the estate is managed efficiently. In fact, an experienced lawyer can handle most of the tasks the personal representative would otherwise be responsible for. After passing these administrative duties over a member of the bar, the personal representative may well feel that a great burden has been lifted from their shoulders. When it comes time to have your own will prepared, you can name a probate attorney as your personal representative and spare your loved ones the burden of settling your estate. Especially for those of us in the LGBTQ community, this can be an attractive option for three important reasons. A lawyer can help ensure that your wishes are respected. First, in addition to providing legal expertise, a lawyer can help ensure that your wishes are respected. Settling an estate often triggers disputes among family members. This can be especially true in families with strained relations. Animosity might stem from a parent or other relative’s homophobia, or from simple family dysfunction. Either way, a lawyer can help prevent disputes by acting as a buffer between members of your family and other beneficiaries. And as a point of contact for the estate, the attorney can explain the administration process and how the assets will be distributed—all without the emotional baggage that frequently exists between blood relations. The result is often a smoother and less contentious administration process than when a family member serves as personal representative. Second, naming a probate lawyer as your personal representative can also save time and reduce stress for your loved ones. Estate administration can be a long and burdensome process, and a non-lawyer will likely find it physically and emotionally draining. A lawyer can help streamline the process and handle the difficult legal aspects of the job, allowing your loved ones to focus on grieving and self-care. Most people who settle an estate do so only once in their life. While learning on the job, they may naturally make mistakes and missteps along the way. By contrast, a probate lawyer will be intimately familiar with every aspect of serving as personal representative. With the help of a team of legal assistants and paralegals, they can streamline the process and handle any challenges that may arise. Third, a lawyer can help avoid costly mistakes. Estate administration involves many important decisions, such as deciding what assets to liquidate, whether to improve a house before selling it, and choosing a fiscal tax year. At each step along the way, making the wrong choice can have significant financial consequences. By drawing on years of experience, a lawyer can help prevent expensive misjudgments and ensure that your estate is settled in the most economical manner possible. Settling an estate can be a complicated and emotionally challenging process. Fortunately, there is a way out. Put an experienced probate lawyer in charge and make life easier for the people you care about most. Contact an Estates & Trusts attorney today to get started.
March 2, 2023
Bankruptcy
How Not to Violate the Automatic Stay
The automatic stay is "one of the fundamental debtor protections provided by the bankruptcy laws" of this country.”[1]. It is viewed as a very broad protection that "stops all collection efforts, all harassment, and all foreclosure actions . . . meant to provide “complete, immediate, albeit temporary relief to the debtor from creditors, and also to prevent dissipation of the debtor's assets before orderly distribution to creditors can be effected.”[2] Certain actions (like bringing or continuing a breach of contract action against the debtor) fit neatly in the prohibitions of the Bankruptcy Code while some more nuanced circumstances prove trickier to label as violations, yet they can put a creditor or a counterparty on the naughty list. Here are five examples: 1. The automatic stay applies outside of U.S. geographical borders. A declaration of a setoff and a foreign creditor’s refusal to return the receivables to the debtors upon request was an improper exercise of control over the property of the Debtor's estate, and thus a violation of Section 362(a)(3) of the Bankruptcy Code. [3] 2. The enforcement of provisions in a condominium's bylaws that prohibit a chapter 11 debtor with a pre-petition delinquency in the payment of condominium fees from voting at an annual meeting or holding office as a director of the condominium association violates the automatic stay.[4] 3. A lender proceeding with a foreclosure sale against a limited liability company in which the debtor held 99% of the equity willfully violates the automatic stay under Section 362(a)(1), and to the enforcement of an earlier judgment in that proceeding or action, under Section 362(a)(2) when the foreclosure action named both the company and the debtor as parties in the proceeding.[5] 4. A mortgage company’s attempt to perfect lien against estate property by registering a deed of trust on the debtor’s property, when the stay had not been lifted by the bankruptcy court and when the mortgage company and its counsel had actual knowledge of the bankruptcy filing is a willful violation of the automatic stay.[6] 5. Threatening a debtor with criminal prosecution is a willful violation of the automatic stay. In a case involving a landlord in Tennessee, the Sixth Circuit affirmed the bankruptcy court and the district court in finding that the landlord cannot hide behind the criminal prosecution exception to the automatic stay in Section 362(b)(1).[7] Before the commencement of the bankruptcy case, the debtor had written to the landlord a check that bounced. After the debtor filed for bankruptcy, the landlord wrote letters to the debtor and her mother, claiming he was not attempting to collect back rent but threatened that he would initiate criminal proceedings for the bounced check. __________________ [1] Melanotic Nat'l Bank v. N.J. Dep't of Envtl. Prot., 474 U.S. 494, 503 106 S.Ct. 755, 88 L.Ed.2d 859 (1986) (quoting S. Rep. No. 95-989, at 54-55 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5840, 5963, 6296) [2][2] SEC v. Brennan, 230 F.3d 65, 70 (2d Cir. 2000). [3] In re Arcapita Bank B.S.C.(c), 628 B.R. 414, 480 (Bankr. S.D.N.Y. 2021), aff'd sub nom. In re Arcapita Bank B.S.C.(C), 640 B.R. 604 (S.D.N.Y. 2022); Section 362(a)(3) of the Bankruptcy Code provides that a filed bankruptcy petition filed operates as a stay, applicable to all entities, of any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate. 11 U.S.C. § 362(a)(3). [4] In re Gordon Properties, LLC, 460 B.R. 681, 685 (Bankr. E.D. Va. 2011). [5] Bayview Loan Servicing LLC v. Fogarty (In re Fogarty), 39 F.4th 62 (2d Cir. 2022). Section 362(a)(1) bars the commencement or continuation ... of a judicial, administrative, or other action or proceeding against the debtor ... to recover a claim against the debtor that arose before the commencement of the case. [6] In re Medlin, 201 B.R. 188 (Bankr. E.D. Tenn. 1996). [7] Weary v. Poteat, No. 15-5159, 2015 WL 5712191 (6th Cir. Sept. 30, 2015).
February 28, 2023
Healthcare
SB 994 and AB 2685: California’s New Naturopathic Doctors’ Laws
California, in 2022, passed two laws that affect naturopathic doctors – SB 994 and AB 2685. SB 994 allows naturopathic doctors to hire licensed vocational nurses (LVNs). AB 2685, Prior law, created “the Naturopathic Medicine Committee within the Osteopathic Medical Board of California for the licensure and regulation of naturopathic doctors.” AB 2685, titled the Naturopathic Doctors Act, renames the Naturopathic Medicine Committee as the “California Board of Naturopathic Medicine” and places the Board within the Department of Consumer Affairs. AB 2685 specifies that any reference in any law or regulation to the Bureau of Naturopathic Medicine or the Naturopathic Medicine Committee refers to the California Board of Naturopathic Medicine. The Naturopathic Doctors Act prohibits the board from “incurring any costs as a result of its name change beyond what is absorbable within existing resources.” What is naturopathic medicine? The Association of Accredited Naturopathic Medical Colleges defines naturopathic medicine as a field or practice “that combines the wisdom of nature with the rigors of modern science. Naturopathic doctors (NDs) are trained as primary care providers who diagnose, treat and manage patients with acute and chronic conditions, while addressing disease and dysfunction at the level of body, mind and spirit.” “NDs concentrate on whole patient wellness through health promotion and disease prevention, while addressing the underlying cause of the patient’s condition. Naturopathic physicians care for patients of all ages and genders, and practice in settings ranging from private clinics to integrative medical centers, urgent care clinics and hospitals.” NDs “provide individualized, evidence-informed therapies that balance the least harmful and most effective approaches in order to help facilitate the body’s inherent ability to restore and maintain optimal health. Naturopathic doctors are experts in natural medicine, and naturopathic medical education is the most efficient and direct way to train as a primary care doctor who specializes in natural medicine.” FAQs about SB 994 and AB 2685 The American Association of Naturopathic Physicians provides the following questions and answers about licensed vocational nurses who now, in California, can be hired by naturopathic doctors. What is a Licensed Vocational Nurse (LVN)? A California LVN is licensed and governed by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT). LVNs have finished an approved practical nursing program. LVNs, through the direction of a California licensed Registered Nurse (RN), Nurse Practitioners (NPs), physicians, and other authorized healthcare providers – provide skilled nursing care and execute nursing interventions. SB 994 now provides that licensed naturopathic doctors in California can, effective January 1, 2023, direct LVNs in the same care and interventions. What is the scope of practice for an LVN working under the supervision of a California Licensed Naturopathic Doctor? An LVN in California is directed by a licensed ND, NP, RN, or physician – in the manual and technical skills learned in an approved school of vocational nursing. In addition to performing the same tasks as a naturopathic assistant, an LVN can: Administer IV therapy (vitamins, minerals and blood products only – no medications or herbs) Treat patients “carrying out the ND’s treatment orders without the ND needing to be present in the office at all times.” When directed and supervised by a naturopathic doctor, an LVN can also: “Administer medications by hypodermic injection.” Withdraw blood from a patient, if prior thereto such LVN has satisfactorily completed a prescribed course of instruction approved by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT). “The LVN must have a certificate from a training provider approved by the BVNPT for both phlebotomy and IV therapy prior to performing these functions.” “Start and superimpose intravenous fluids under the supervision of a Naturopathic Doctor after completing a BVNPT-approved IV therapy certification course.” An LVN must be Board certified to perform IV therapy and blood withdrawal. “Important note: LVNs can be trained to draw blood in an office setting by an MD or DO, but not by an ND. Any LVN that [an ND] hires must take a BVNPT-approved IV and blood draw training. As a result of the passage of AB 2685, the LVN can obtain an Intravenous Therapy (IVT) Specialty license from the California Board of Naturopathic Medicine (formerly the Naturopathic Medicine Committee).” Can LVNs perform IV therapy? Yes – provided that the: LVN has the property Intravenous Therapy Specialty License The LVN has completed an IV certification course approved by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT) “The supervising ND has ordered the IV treatment. (In other words, a new patient cannot just walk into the office and receive an IV treatment without the ND conducting an initial appropriate prior examination and ordering the IV with specific ingredients and dosages). The initial exam need not be performed before each IV – just before the first IV treatment – “and again if the patient’s health changes or the IV ingredients change and at appropriate intervals.” LVNs can only carry out an ND’s treatment decisions. LVNs cannot take over the care of a patient. Generally, provided the above requirements are met, LVNs can prepare IVs. LVNs can also start IVs – “but only peripheral lines. They cannot access ports.” What can LVNs infuse? “LVNs can infuse fluids, vitamins, minerals, nutrients and blood products. LVNs CANNOT infuse medications or herbs – so this means, for example, LVNs cannot infuse chelating agents, Zofran, curcumin, or other medications or herbs.” Can an ND give an order to an LVN to give someone medication or an injection or to perform an IV at a patient’s home? No, not at a patient’s home. The patient must be in the physician’s office or a health care setting, like a skilled nursing facility. Can LVNs give IM and SC injections? Yes. “LVNs can give IM and SC injections, such as vitamins and hormones under the supervision of a California licensed ND (*Note this does not include hormone pellets). However, the LVN cannot give IM and SC injections of any other medications unless the supervising ND has a supervising California physician (MD/DO) to allow the ND to prescribe such medications. In other words, the LVN cannot administer medications that the supervising ND is not authorized to prescribe or administer. Additionally, LVNs CANNOT inject glutathione.” There are additional options and requirements if the ND has a supervising MD/DO. Can an LVN administer vaccines? Yes. “Pursuant to the standing orders of the Naturopathic Doctor, if the Naturopathic Doctor has a supervision agreement in place with an MD/DO for prescribing vaccines. And the Naturopathic Doctor must ensure that the LVN demonstrates competence in the administration of the vaccines and knowledge of all the indications and contraindications and recognition and treatment of any emergency reactions.” Does the ND need to be in the office when the LVN is taking care of patients? Generally, the answer is no. However, the supervising naturopathic doctor “MUST be available by phone at all times that the LVN is providing patient care and must always be the one that does all diagnosis and ordering of treatments.” The LVN can’t determine what care to provide. Their job is just to carry out the supervising ND’s orders. Can LVNs do triage or answer a patient’s questions about their care? “No. Unlike NPs and RNs with appropriate standardized procedures, LVNs cannot triage patients or do assessments.” Contact us today to learn how the Cohen Healthcare Law Group can help with your legal needs. Our team is here to provide experienced guidance and practical solutions. What Are the Legal Risks Involved With An IV Therapy Business? Doctors, registered nurses and EMTs should review with an experienced healthcare attorney – corporate practice of medicine issues, medical and business practices, and other legal issues before […] What Are the Legal Risks Involved with An IV Therapy Business? Part Two IV therapy owners and practitioners need to discuss with experienced healthcare lawyers who can prescribe IV therapy, who can prepare the solution, and who can administer the therapy. Additional requirements for naturopathic doctors who hire LVNs The LVN must be a supervising ND’s employee. There must be a written supervision protocol in place. This protocol can “be part of the LVN’s employment agreement or can be a standalone document separate from their employment agreement.” The written supervision protocol must: Describe the LVN’s duties and responsibilities Set forth specific policies and procedures that ensure adequate supervision of the LVN. These policies should include, among other policies, a communication line between the Naturopathic Doctor and LVN, “availability of supervision, location(s) of where services are to be provided, and availability of consultations between the Naturopathic Doctor and LVN regarding the services provided.” The policies and procedures should also set forth the training methods and “continuing evaluation of the competency and qualifications of the LVN.” What is LVN prohibited from doing? LVNs are NOT permitted to: Administer any botulinum toxin, dermal filler or glutathione injections Perform platelet rich plasma treatments Remove skin growths Perform any other cosmetic treatments outside of the scope of an LVN Administer laser, light, steam, or UV treatment therapies unless directed by the ND for a medically necessary purpose (not cosmetic) NDs can hire LVNs starting on January 1st, 2023. Can an ND hire an RN (registered nurse) and have the RN do only the things listed as in the scope of an LVN? “No, an ND cannot hire, direct or supervise an RN or NP under any circumstances.” “RNs can only perform patient care services ordered by and within the scope of licensure of a physician, dentist, podiatrist, or clinical psychologist, as defined by Section 1316.5 of the Health and Safety Code.” AB-2685 Naturopathic Doctors Act: California Board of Naturopathic Medicine and licensing requirements AB 2685, in addition to renaming the “Naturopathic Medicine Committee” as the “California Board of Naturopathic Medicine, placing the board within the Department of Consumer Affairs, and other provisions we discussed above; updates the requirements and prohibitions for appointing healthcare professionals to the new Board. According to Open States, AB 2685 AB 2685 also changes current law regarding naturopathic medicine as follows: The California Board of Naturopathic Medicine will be required to hire a full-time employee whose duties would include enforcement against violations of the new law. That staff position will be under the direction of the executive officer. Expand the current requirement that applicants for licensure “pass the Naturopathic Physicians Licensing Examination (NPLEX) or an equivalent examination approved by the North American Board of Naturopathic Examiners to pass any NPLEX elective examinations relevant to a licensee’s scope of practice in California.” Expands how applicants could meet their continuing education requirements. Expands the requirements for a naturopathic doctor to be certified for the specialty practice of naturopathic childbirth attendance. The law extends “the operation of the act until January 1, 2027, and would also make nonsubstantive changes to those provisions.” California recently passed two laws that affect the ability of naturopathic doctors to practice medicine. The first grants NDs the right to hire licensed vocational nurses. The second creates the California Board of Naturopathic Medicine. Healthcare professionals who work in these fields need to understand the new compliance issues for each profession including what tasks LVNs can and cannot perform. Naturopathic doctors can take pride in the creation of a new Board for their professions but need to understand the duties and obligations of their new Board. California’s New Scope of Practice Law for Nurse Practitioners – Part Two California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” Naturopathic doctors, licensed vocational nurses, and other healthcare providers should contact Cohen Healthcare Law Group, PC to discuss the current federal, state, and medical board compliance requirements for their type of practice and scope of employment. Our experienced healthcare attorneys advise doctors, nurses, and other types of healthcare providers about healthcare compliance laws and regulations. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
February 28, 2023
Labor and Employment
Consider Labor Laws When Hiring in Other States
Please be aware that the employment laws of the states where an employer hires employees are applicable to the employment relationship. Many companies continue to hire remotely without this consideration. Some states have very complex laws favoring employees, and employers should be alert to this issue. I am mentioning some types of laws to consider so that employers can review this list when considering hires in other states. This is a rather lengthy list to be continued. Written notices: This is a commonly overlooked legal requirement. Check to be sure which legal notices must be provided in each state. Anti-discrimination laws based on protected status: There are various classifications on which an employer may not legally discriminate. These might include the classes protected by federal law or exceed them. For instance, it is illegal in Delaware to discriminate against an employee because they are a firefighter. Disability accommodations: In some states, it’s illegal for an employer to require documentation from an appropriate health care or rehabilitation professional in certain situations, such as a request to lift less than 20 pounds. Pregnancy accommodations: In some states, employers must grant reasonable accommodations requested by employees for their pregnancy or related conditions unless employers can show that these accommodations would impose an undue hardship on their business. Parental leave & sick leave: Some states’ laws grant employees parental leave, unpaid sick leave, or paid sick leave. To be continued next blog. In the meanwhile, if you have questions, please reach out.
February 24, 2023
Business
FTC Seeks to Ban Non-compete Clauses: What This Really Means for Your Business
Today we will cover how the FTC seeks to ban non-compete clauses and what this means for your business. On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a new rule banning employers from imposing non-competes on their workers. The rule is undoubtedly politically motivated as it was issued in response to President Biden’s Executive Order that encouraged the FTC to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” The FTC believes a non-compete is a “widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” By stopping this practice, the FTC erroneously estimates wages would increase by nearly $300 billion per year, and it would expand career opportunities for 30 million Americans. By stopping this practice, the FTC erroneously estimates wages would increase by nearly $300 billion per year, and it would expand career opportunities for 30 million Americans. Scope of Proposed Rule to Ban Non-compete Clauses The FTC’s proposed rule would prohibit employers from using non-compete clauses – i.e., any contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, within a specific geographic area and period of time after the conclusion of the worker’s employment with the employer. It would make it illegal for an employer to: enter into or attempt to enter into a non-compete with a worker; maintain a non-compete with a worker; or represent to a worker, under certain circumstances, that the worker is subject to a non-compete. The proposed rule would apply to “workers,” broadly defined by the FTC to include employees, individuals classified as independent contractors, externs, interns, volunteers, apprentices, and sole proprietors who provide a service to a client or customer. The rule also includes a “functional test” for determining what constitutes a “de facto” non-compete clause that has the same effect as an express non-compete clause – the same test employed by courts in states that already have express prohibitions on non-compete clauses. Effective Date of Proposed Rule Importantly, this is a proposed rule that is not in effect. The proposed rule is in a comment period until March 20, 2023. We do not believe it will go into effect, if at all, until after a lengthy court battle ending with a ruling from the United State Supreme Court. Then, even if the proposed ban becomes law, employers will have 180 days to revise their agreements to conform with the law. Moreover, there are a variety of tools, such as reasonably tailored non-disclosure agreements and confidentiality provisions, employers can use to accomplish their goals without violating the proposed ban. The proposed rule is the first step in a long process that will take years to complete. We expect the FTC will receive thousands or hundreds of thousands of comments to consider. Based on the comments, the rule will be revised. It could take the FTC until late 2023 or even the end of 2024 to issue a final rule. After the final rule is set forth, it will be subject to a legal challenge (or challenges); this will undoubtedly delay the effective date into 2025 or later, assuming the final rule survives any legal hurdles it faces. During this challenging period, a presidential election will occur, and the political winds will likely change, potentially further reversing the course of the FTC. Criticism of the Proposed Rule The U.S. Chamber of Commerce has opined that the FTC lacks the authority to issue the rule and ignores the benefits of non-competes. A senior vice president for the U.S. Chamber of Commerce has stated: “Attempting to ban non-compete clauses in all employment circumstances overturns well-established state laws which had long governed their use and ignores the fact that, when appropriately used, non-compete agreements are an important tool in fostering innovation and preserving competition.” An FTC Commissioner issued a dissenting statement when the proposed ban was announced. The dissenting statement outlined potential legal challenges noting the FTC lacks the legal authority to issue the ban, and the rule is barred by a recent United Supreme Court decision. Even if the FTC has authority, it is an impermissible delegation of that authority. The proposed rule must overcome extensive case law upholding the use of non-compete clauses that are determined to be reasonable unless they are unreasonable as to time or geographic scope. Even if the FTC has authority, it is an impermissible delegation of that authority. Exemptions to Proposed Rule to Ban Non-compete Clauses The proposed rule would exempt non-compete agreements that a person entered in connection with the sale of a business, but only if that person owned 25% or more of that business. The FTC is also seeking comments as to whether: non-compete clauses between employers and senior executives should be subject to a different standard; the rule should apply uniformly to all workers; and the rule should impose a categorical ban on non-compete clauses. Alternatives to Non-compete Clauses Employers are not without options. The FTC’s proposed rule’s definition of a non-compete clause does not include other types of covenants. Accordingly, employers should begin analyzing their confidentiality clauses, non-solicitation, and non-disclosure provisions. Carefully drafted provisions can ensure that employers are able to protect confidential information and customer relationships, as well as the poaching of current employees by former employees. Employers should also use this as an opportunity to strengthen trade secret protection plans. Employers should also use this as an opportunity to strengthen trade secret protection plans. What Should I Do as an Employer? There is no need to panic. The proposed rule will not go into law in its final form, if at all. However, now is the time to implement proper planning techniques into agreements with employees. As noted previously, with proper legal counsel, non-compete, non-solicitation (vertically and horizontally), confidentiality, non-disclosure, and other restrictive covenants can be used to accomplish the goals of employers, most of which are not within the scope of the current version of the proposed rule. With proper legal counsel, non-compete, non-solicitation, confidentiality, non-disclosure, and other restrictive covenants can be used to accomplish the goals of employers. Conclusion Thank you for reading our blog on how the FTC seeks to ban non-compete clauses and what this means for your business. Please contact us immediately so that we can assist you in your planning and contract drafting process to properly implement such restrictions to protect your business. Charles McCauley can be reached at cmccauley@offitkurman.com or 484-531-1712, and Sarah Goodman can be reached at sarah.goodman@offitkurman.com or 267-338-1319.
February 24, 2023
Intellectual Property
Does the First Amendment Protect the Use of Parody for Commercial Purposes?
The US Supreme Court Will Decide On March 22, the US Supreme Court will hear arguments in Jack Daniel's Properties, Inc. v. VIP Products LLC. In a case that pits trademark rights against free speech claims, Jack Daniel's has sued VIP Products for trademark infringement due to VIP Products' sale of a dog chew toy in the shape of a Jack Daniel's bottle with a label replacing "Jack Daniel's" with "Bad Spaniels" and engaging in other parodying of the Jack Daniel's label in a manner referring to dog defecation. VIP Products takes the position that its parody should be protected under the First Amendment Freedom of Speech Clause. Jack Daniel's view is that a company selling a commercial product that makes humorous use of the Jack Daniel's brand should not be entitled to First Amendment protection. I discovered in a store in Colorado that "Bad Spaniels" is just one of a line of dog toys parodying liquor brands. Although it may be that Jack Daniel's is the only brand worked up enough about this to bring a lawsuit (and take it all the way to the Supreme Court), several third parties have filed briefs in support of Jack Daniel's position, including Campbell Soup Company, Nike, and several trade associations. The Supreme Court's decision will likely issue in June.
February 23, 2023
Labor and Employment
Is an Individual with a Workers’ Compensation Injury Protected Under the ADA?
Companies operating in the logistics industry, whether it be as contractors for DHL, FedEx, Amazon, or the like, are all too familiar with the challenges of having a workforce that relies primarily on physical ability and the challenges associated with employees who suffer from injuries on the job that impact their ability to perform their job duties and potentially create unsafe working conditions. With physically demanding jobs comes the increased chance for accommodation requests under the Americans with Disabilities Act (ADA). When an employee is injured on the job, contractors are often quick to ensure they follow proper protocols for any potential workers’ compensation claims. However, they often overlook the application of the Americans with Disabilities Act, which may cover the injured worker if the employee meets the definition of disability. The ADA applies to employers with 15 or more employees. It prohibits employers from discriminating against qualified disabled individuals and requires that such employers provide reasonable accommodations that allow them to perform the essential functions of their job or to enjoy benefits and privileges of employment equal to those without a disability. An individual has a disability and is subject to protection if they have a physical or mental impairment that substantially limits major life activities. Crucially, the ADA does not require a showing of long-term effects to qualify, and short-term impairments are covered if they are considerably limiting. Often, employers mistakenly believe that employees struggling with short-term impairments due to a workplace injury do not qualify for protection under the ADA and are too focused on the initial worker’s compensation assessment to realize they also need to consider the implications of the ADA. If an employee asks for accommodation after a workplace injury, the ADA may apply, and the company must perform an individualized assessment to determine whether the individual meets the ADA definition of disabled, and if they do, assess what reasonable accommodations to grant based to help the employee perform their job duties. An accommodation request in the logistics industry can take many forms, including: requests for light duty, including limiting hours worked and weight lifted; requests for periodic unpaid leave or an alternative work schedule to attend physical therapy appointments; increased breaks; and reassignment to a less physically demanding position. While an employer is not obligated to grant the exact accommodation an employee requests, it must assess the request and engage in the interactive process with the employee to determine the employee’s limitations and needs, whether the accommodation requested is appropriate, and what other accommodations are needed. Employers’ obligations under the ADA are complex and fact specific. So complicated, in fact, that the U.S. Equal Employment Opportunity Commission’s (EEOC) guidance is seventy-six pages long. Employers must have a clear and compliant ADA policy that includes instructions for employees on pursuing an accommodation request.
February 22, 2023
Immigration Law
Policy U-Turn: US Visas to be Issued in DC
On February 9th Bloomberg Law reported on an interview they conducted with Julie Stufft, Deputy Assistant Secretary for Visa Services at the Bureau of Consular Affairs, in which Ms. Stufft outlined a Department of State (DOS) plan to restore stateside visa renewals. Which means that eligible nonimmigrants would be able to renew their visa stamps without leaving the country. This marks the turning point in the DOS policy on stateside visa renewals, which were largely discontinued in 2004 except for diplomats and international organization employees. It is great news for H and L visa holders who will be included in the trial program. Details are currently vague, but it will likely include a limited subset of those visa holders. The Covid-19 pandemic brought the policy into the forefront, with multiple organizations seeking assistance from the DOS in accepting stateside visa renewals. This was requested as the pandemic had led to the global closure of embassies and consulates worldwide, which in turn prevented thousands of individuals from traveling abroad with the fear they would not be able to return as there was no mechanism to renew their visa. Further, The Trump administration policies to ban certain visa issuances and strip the DOS of staff still have legacy impacts to the visa processing process. The many voices calling for stateside visa issuance fail to grasp the reality of implementing such a complex and massive undertaking. The DOS certainly has the capabilities to set up such a program, but the resources and procedures are vast, ranging from detailed security screening to secure document handling, possibly including online visa interviews with applicants and a myriad of additional complexities. Ms. Stufft alluded in her interview that the expansion of stateside visa processing would require setting up a new consular division in Washington, D.C. The main point of contention that ended the vast majority of stateside visa processing was the biometric requirements for visas required in 2004. How the DOS plans to address this is vague right now. Still, there are many national biometric screening centers operated by the United States Citizenship and Immigration Services (USCIS). We could see an expansion of use of these centers or the reliance on previously obtained biometrics – a policy implemented by the USCIS during the Covid-19 pandemic. Although the details provided are vague, this change in policy provides another level of protection for nonimmigrant visa holders and hopefully provide more certainty for international travel as visa wait times continue to suffer worldwide. The DOS has continued to highlight their programs to address worldwide visa backlogs, which have included expanded waivers for interviews, special programs to assist individuals affected by the trump administration policies and increased appointments. Further steps recommended to the DOS by a variety of groups include adding additional missions, allowing online visa appointments and streamlining the interview waiver process to cut wait times. If you’d like to discuss further, please reach out to Michael.Freestone@OffitKurman.com.
February 17, 2023
Litigation
Virginia’s 2023 Wage Hike – New Year, New Minimum!
Virginia is one of nine jurisdictions en route to a $15 minimum wage (or higher) by 2026. As it is, Virginia is one of nearly 30 states to affect an increase this year. The first of the year saw the Commonwealth’s previous minimum of $11 per hour -- which had only gone into effect at the beginning of 2022! -- bump up by another $1 to $12 per hour. By comparison here in the “DMV,” Virginia continues to lag its neighboring jurisdictions, Maryland and D.C., with the first of the year, Maryland’s minimum jumped from $12.50 to $13.25 per hour (for companies of certain minimum size – i.e., 15 or more employees), while D.C.’s $16.10 hourly rate comes in higher than all fifty states, many of which still abide by the federal minimum of $7.25, which has remained unchanged since 2009. Virginia’s increase is the latest in a series of step-ups scheduled to take effect in the Commonwealth between now and 2026. The minimum wage rate in Virginia recently climbed $1.50 per hour in 2021 and, after this year’s additional $1 per hour, is slated to increase again to $13.50 per hour in 2025 before reaching the targeted $15 per hour in 2026. That is, of course, so long as the most recent changes to Virginia’s Minimum Wage Act are not repealed or otherwise limited by the now Republican-controlled General Assembly. Keep a watchful eye out for attempted changes this legislative session to Code Section 40.1-28.10 as attempts are anticipated to try to walk back the increases or at least to “slow the roll.” Tipped employees, such as restaurant wait staff, continue to face a meager $2.13 per hour minimum but, with tips factored in, must meet the $12 per hour minimum rate. If you are a small business owner with questions about the new laws and your obligations regarding them, Offit Kurman has the resources to help. Not sure whether your workers are independent contractors or employees subject to the minimum wage requirements? Choosing to do nothing is still making a choice – and the wrong one could prove very costly in this context. If you’re uncertain whether and/or how this or any other new law (recreational cannabis, for instance?) might impact you or your business, let me get you connected with someone who can help.
February 15, 2023
Labor and Employment
Secure 2.0 Act of 2022
Attorneys Sarah Sawyer and Scott Tippett discuss extensive changes to the 2019 Secure Act, collectively called the Secure 2.0 Act of 2022. The Secure 2.0 Act increases the options for employers and employees regarding retirement plans and outcomes and adds additional compliance considerations for companies. In this informative legal update, Sarah and Scott discuss: Automatic enrollment requirements Increased age for mandatory distributions for IRAs The new inclusion of student loan payments as contributions for matching purposes Tax credit for military spouses Timing considerations for implementing and complying with the Act Sarah and Scott also discuss the importance of understanding the nuances of the Act and being proactive. Listen to learn more!
February 15, 2023
One Minute of Overtime
Deductions from Salaries
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. An employer is permitted to withhold a portion of an exempt employee’s salary in limited circumstances, such as when the employee is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions.
February 15, 2023
Business
Ninth Circuit Court of Appeals Submits Second Certified Question to California Supreme Court On COVID-19 Related Insurance Coverage
On February 7, 2023, the Ninth U.S. Circuit Court of Appeals (“9th Circuit”) sent a certified question to the California Supreme Court on an issue in a pending case relating to insurance coverage for COVID-19-related business shutdowns. This is the second time within the past 45 days that the 9th Circuit has done so, having submitted a different question to the California Supreme Court in another COVID-19 coverage case on December 28, 2022. The certified question sent on February 7, 2023, relating to a pending dispute between French Laundry Partners and its insurer, The Hartford, asks, “[i]s the virus exclusion in French Laundry’s insurance policy unenforceable because enforcing it would render illusory a limited virus coverage provision allowing for the possibility of coverage for business losses and extra expenses allegedly caused by the presence and impacts of COVID-19 at an insured’s properties, including the loss of business due to a civil authority closure order?” The certified question sent on December 28, 2022, relating to a pending dispute between concert organizer Another Planet Entertainment and its insurer Vigilant Insurance Co., asks “[c]an the actual or potential presence of the COVID-19 virus on an insured’s premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy?” The topics of the two certified questions are not the main points here. Instead, it is the uncertainty that remains as COVID-19-related insurance cases make their way through Courts – in California and elsewhere – that is paramount. Indeed, in its February 7, 2023, submission to the California Supreme Court, the 9th Circuit stressed: Courts at both the state and federal levels are grappling with the application of California insurance contract interpretation law to coverage for losses from business shutdowns due to government closure orders in response to COVID-19. While both state and federal courts have published opinions providing some guidance, there remains much uncertainty as to how California law applies in many scenarios. The prevalence of and uncertainty surrounding COVID-19 insurance litigation is underscored by our certification to the Supreme Court of California on December 28, 2022, in another case asking whether the actual or potential presence of the COVID-19 virus can constitute ‘direct physical loss or damage to property’ for the purposes of coverage under an insurance policy. The stakes are high in COVID-19 coverage cases, which center on an insured’s loss of business due to government closure orders. After more than two years of litigation across the nation, uncertainty remains. The 9th Circuit’s sending of two certified questions to the California Supreme Court in the past 45 days is a manifestation of this and an effort to, in the words of the 9th Circuit, “gain some efficiencies through concurrent consideration of our certification in [the French Laundry] case.” Time will tell what the California Supreme Court decides to do in these two instances and whether more certified questions will come from Federal Courts to State Supreme Courts as courts seek clarity and consistency in handling COVID-19-related insurance coverage cases. If you are still grappling with claims associated with losses due to government closure orders in response to COVID-19 or other comprehensive general liability or property insurance coverage issues, please feel free to contact us for a consultation.
February 14, 2023
Family Law
DIY Divorces Recap
There’s a lot to be said for embracing a do-it-yourself (DIY) ethos. DIYers develop useful skills, sometimes discover new hobbies, and often save a great deal of money. But while plenty of DIY projects can reduce upfront costs and bring personal fulfillment, there are some things you should never, ever do yourself. Giving your house a fresh coat of paint? Go for it! Brewing beer in your garage? Sure—why not? Handling your own divorce proceedings? Not a great idea. Looking to handle a divorce or another family legal matter in the best way possible? Don’t rely on a simple document retrieval service. Offit Kurman’s Family Law attorneys are dedicated to resolving conflicts and protecting your and your family’s interests in a fast, straightforward, and cost-effective manner. See for yourself what we can do for you.
February 13, 2023
Labor and Employment
New Federal Workforce Mobility Act Would Further Limit Non-Compete Agreements
Last week, politicians reintroduced the federal Workforce Mobility Act, a bipartisan bill intended to limit the use of non-compete agreements with U.S. employees. As the bill states, “economists now estimate that 1 in 5 workers is covered by a non-compete agreement.” It further finds that non-compete agreements are “blunt instruments that crudely protect employer interests and place a drag on national productivity by forcing covered workers to wither idle for long periods of time or leave the industries in which the workers have honed their skills altogether… [they] also reduce wages, restrict worker mobility, impinge on the freedom of a worker to maximize labor market potential, and slow the pace of innovation in the United States.” TheWorkforce Mobility Act would: Limit the use of non-competes to business sales and dissolution of partnerships; Require most employers to post a notice of the law for employees; Allow the Federal Trade Commission to bring an action to enforce the act according to the Federal Trade Commission Act; Direct the Department of Labor to investigate violations – confidentially - and allow it and state attorneys general to bring legal action against the employer who uses a non-compete; and Provide that employees may sue their employers or former employers to enforce the act, recovering both actual damages and attorney’s fees and costs. If this act passes, it will expose employers to a minefield of liabilities and enforcement actions. At this point, given both the proposed FTC rule banning non-competes, discussed in my previous blog, companies need to meet with their attorneys regarding protecting information, assets, and business by means of other agreements. Prediction from this litigator/ agreement drafter: if this bill passes, a great deal of litigation is coming. This bill doesn’t allow employees to agree to arbitrate any of these disputes. Employees will have little disincentive to file because they will recover their attorney’s fees and costs if they win the lawsuit. Looking forward, it will be more important than ever to craft an up-to-date agreement with employees to protect a business and its trade secrets.
February 9, 2023
Labor and Employment
New Harvard Wage Study Shows Employers Are Inflating Titles to Illegally Dodge Overtime
I am constantly reminded of employers’ mistakes in determining that their workers are exempt from overtime payments under the Fair Labor Standards Act. I recently came across a report of a new study from researchers at Harvard Business School and the University of Texas at Dallas. This study, covering 2011 – 2018, examined “title inflation,” misclassification of employees to avoid paying overtime, and the risk of U.S. Department of Labor/ USDOL suits. The report states, in part, "Our evidence indicates that firms strategically use job titles to exploit regulatory thresholds to avoid paying for overtime work … We find that [this practice] is also strongly associated with the usage of fake managerial titles and … thus can be used as a timely indicator of potential FLSA violations." The law requires that in order to classify an employee as exempt from overtime, the employee must earn a certain amount of salary, as well as perform the job duties of a non-exempt worker (for instance, managing others, professional duties based on a higher degree, and computer programming.) During the study’s time period, there was a 485% increase in managerial titles and pay that barely bumped workers over the minimum salary required to classify workers as exempt. Inflated titles are used to justify salary: researchers saw a barber called a “grooming manager” and a front desk clerk labeled as a “director of first impressions.” Overtime — or lack thereof — is prevalent in issues of wage theft. Nearly two-thirds of wage theft violations that resulted in fines involved overtime issues, according to the study's analysis of U.S. Department of Labor data from 2010 to 2021. Of all back wage fines levied by the agency, over 80% were for overtime. The USDOL has recovered millions of dollars in back pay for unpaid overtime. If just one employee blows the whistle – it costs employers dearly. Review the employee’s primary duties and then classify them correctly. If concerns arise about retention, know that the employee can retain the title (and salary); but watch hours closely to ensure overtime isn’t owed and set a policy requiring management’s permission to work overtime. Consult an experienced attorney for help to determine classification.
January 25, 2023
Contractor's Corner
The Utility of Non-Solicitation Agreements for FedEx Contractors
A restrictive covenant is an arrangement with employees that they will not engage in particular behavior after leaving your company. Non-competes[1], non-solicitations, and confidentiality provisions are all examples of restrictive covenants. Since these covenants restrict an employee's free movement in the marketplace, strict rules govern their enforceability. While determining the enforceability of these provisions is nuanced and can vary under state, federal, and local laws, a general rule of thumb is that the covenant should be no more restrictive than necessary to protect the interest of the employer's business interests. Given concerns around enforceability and whether an employee in a competitive labor market will agree to sign such restrictions, many contractors choose to refrain from utilizing restrictive covenants for employees. However, this is often a mistake and can lead to a fundamental member of a contractor's team leaving their employment with the company and taking several employees with them. A lack of understanding of the difference between a non-compete clause and a non-solicitation often results in contractors' failure to implement these safeguards. Non-compete clauses are more restrictive than non-solicitation clauses and generally prohibit employees from working with competing companies within a specific geographic area. In contrast, a non-solicitation provision provides that an employee who leaves their employment with their employer cannot encourage other employees to go with them or solicit the employees for a certain period after the employee leaves. Meaning a well-drafted non-solicitation provision does not restrict an employee from working for a competitor but prevents the employee from orchestrating a mass exodus or taking the employer's top talent. Given that non-solicitation provisions are far more limited in scope than non-competes, they are generally easier to enforce, and employers face fewer challenges when presenting them to employees. For contractors, non-solicitation agreements are vital to preventing an employee, especially a manager, from leaving to work for another contractor in the terminal and taking several of a contractor's best employees with them. Because of the challenges with finding and retaining qualified drivers, it is common for other contractors to hire another contractor's employee and encourage them to bring others along. It is also common for a manager to leave to work for another contractor or take on their own routes and attempt to take their critical drivers with them. Ultimately, a well-drafted non-solicitation agreement can be a helpful tool for contractors. However, the key to ensuring maximum benefit is to ensure that the non-solicitation provision is in a contract, not in your handbook, and drafted in an enforceable way. For more information, please feel free to contact me at sarah.sawyer@offitkurman.com. [1] The Federal Trade Commission has proposed a rule to ban all non-competes nationwide. The rule is pending, and employers should monitor the progress. [Nationwide Non-Compete Ban Makes Important Step Forward]
January 23, 2023
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