Blog Posts
Commercial Litigation
Does Maryland’s Anti-SLAPP Statute Achieve Its Intended Purpose?
"Originally published in the Maryland Bar Journal, Vol. 6, Issue 2, Summer 2024." An anti-SLAPP law is designed to prevent strategic litigation against public participation (SLAPP), which is litigation that, in its essence, seeks to chill protected speech. Thirty-three states and the District of Columbia have anti-SLAPP laws. Maryland, which promulgated its anti-SLAPP Statute in 2004, is included in this group, but despite being in effect for 20 years, the Statute has only been successfully invoked twice. Courtney Fix is one of those who found relief under this Statute. When Courtney Fix posted “be careful of the tequila in Baltimore, only drink from who you know personally” to her 16,000 Instagram followers in early April 2021, she had no idea that the events that would follow would dramatically change her life. This post, which was vague to many, had a specific meaning - a friend confided in her that she was sexually assaulted by a then-emerging Baltimore restaurateur who gave her a “special” tequila. Courtney did not anticipate the number of women that would contact her directly asking if that post was about the very same restauranteur. As those direct messages came in, Courtney felt the need to do something, and so she confronted the restauranteur directly. He denied any wrongdoing, but nevertheless, Courtney, who believed the women that contacted her, posted a warning to women on her Instagram to avoid associating with this individual. After Courtney’s “warning” post, she began receiving hundreds of direct messages from women detailing incidents of sexual violence, abuse and misconduct committed by various men who primarily worked in the restaurant and hospitality industry in the Baltimore area. While Courtney did not know the women who were messaging her, she felt a responsibility to listen and help. A common thread amongst these messages were requests for Courtney to share their stories as well and to disclose other men who committed wrongful acts. Wanting to help the women messaging her, Courtney decided to honor their requests and share their stories to her 16,000 followers. She posted screenshots of the direct messages, while withholding the identity of those who contacted her. Notably, Courtney only shared survivors’ stories if she received multiple messages from different people that showed a similar pattern of behavior committed by any alleged perpetrator. While Courtney did not actually author any content that detailed allegations of criminal or other sexual misconduct, she posted content that included her own commentary and opinions of the individuals identified by her posts. Courtney’s posts were met with intense reactions. On the one hand, many people applauded and celebrated her efforts for giving a voice to victims and for outing the men responsible for causing harm. On the other hand, there were people who dismissed her as being “crazy”, “reckless”, or “neurotic.” Included in this camp were people who targeted her small business, Full Circle Doughnuts, which was located in Baltimore’s Hampden neighborhood. Others submitted complaints to Instagram regarding her posts, which caused Courtney’s account to be disabled. Unfazed, Courtney created another Instagram account and resumed posting until that account was also disabled. Then she started posting to her business’s Instagram page, which was disabled as well. There were also the reactions of the individuals that were named in Courtney’s posts, which led to three defamation lawsuits being filed against Courtney and her business in June 2021. Because her business was named as a Defendant, Courtney was provided with defense coverage pursuant to her business insurance policy, but by the time the carrier responded to the lawsuits, all three cases were in vastly different procedural posture – one matter had a pending motion for default judgment and sanctions; another had other pending discovery issues; and the third, Joshua Harris v. Courtney Fix, et al., had not been served. By November 2021, the Harris lawsuit was at a standstill despite there already having been two motions for temporary restraining orders, which were heard and denied by the Circuit Court for Baltimore City. Joshua, a former candidate for multiple elected offices, including the 2018 Maryland House of Delegates District 40 election and the 2016 Baltimore mayoral election, labeled him as a “psychopath womanizer”, “scammer”, “narcissist and manipulator”, “abuser”, “sexual predator”, and “classic fuck boy.”[1] In response to these allegations, Courtney moved to dismiss the Harris complaint. Courtney’s motion argued that pursuant to Section 230(c)(1) of the Communications Decency Act of 1996, she could not be treated as a publisher or speaker of the screenshots she posted, and that any commentary that she authored was opinion speech protected by the First Amendment. Additionally, Courtney’s motion argued that the Harris suit was a “SLAPP suit” requiring dismissal under Maryland’s Anti-SLAPP Statute. Beginning with the Section 230 argument, “Section 230 was enacted, in part, to maintain the robust nature of Internet communication and, accordingly, to keep government interference in the medium to a minimum. In specific statutory findings, Congress recognized the Internet and interactive computer services as offering a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity.”[2] As a result, Section 230 creates immunity from defamation, when the defendant is 1) the provider or user of an “interactive computer service”; 2) the asserted claims treat the defendant as a publisher or speaker of that information; and 3) the challenged communication must be “information provided by another information content provider.” See 47 U.S.C. § 230(c)(1). The screenshot posts of direct messages met these criteria. It was without dispute that Courtney was a “user” of an “interactive computer service” (i.e., Instagram), and that the Harris lawsuit treated her as the publisher of the posts. Through affidavit, Courtney affirmed that the content was indeed screenshots of direct messages from other users. As such, pursuant to Section 230, Courtney could not be the publisher of these statements. As for Courtney’s own commentary, which did include labeling Harris as a “womanizer” and “sexual predator”, Courtney’s motion argued that these statements were not actionable because she was expressing loose, figurative or hyperbolic speech rather than objectively verifiable facts.[3] Of all the appellations Courtney used herself, “sexual predator” was perhaps the most salacious. While Maryland courts have not addressed this term specifically, sister-state courts have explained that this is “opinion and thus not actionable.”[4] As for the Anti-SLAPP argument, Maryland’s Anti-SLAPP statute provides that the court must dismiss lawsuits that are “1) brought in bad faith, 2) brought against a party who has made protected communications to a government body or the public on a matter within the authority of government body or on an issue of public concern, 3) materially related to the protected communications, and 4) intended to inhibit or to have inhibited the making of those protected communications. If all four criteria are satisfied, then the defendant is entitled to civil immunity if he or she acted ‘without constitutional malice’ when making the protected communications.”[5] Courtney argued that bad faith was evidenced by the relief that Harris sought: a request to chill Courtney’s speech about him entirely such that she could never speak about him again, whether in public or private, other than a forced apology; a demand for compensatory damages in excess of $75,000 and punitive damages in the amount of $1 million; and a request requiring Courtney to submit to a mental health examination in a motion for a temporary restraining order. Additionally, continued delays in service despite Courtney’s counsel offering to accept service was also argued to be an act of bad faith. Courtney argued further that all of her posts – whether third-party content (i.e., screenshots of direct messages) or her commentary on that content – were protected communications. Specifically, as already stated, Courtney’s commentary was opinion speech protected by the First Amendment. Similarly, Courtney also argued that the First Amendment protects her right to exercise editorial control over her platform and distribute others’ speech concerning issues of public concern. The Supreme Court has explained that “speech on public issues occupies the highest rung of the hierarchy of First Amendment value, and it is entitled to special protection”[6], and this rule is not “restricted to the press, being enjoyed by business corporations generally and by ordinary people engaged in unsophisticated expression as well as by professional publishers.”[7] The issues of “public concern”[8] relative to Courtney’s posts about Harris were twofold. First, Harris was a candidate for multiple elected offices, and it was argued that Courtney’s posts about him concerned his character and suitability for those offices. Second, Courtney’s speech was inextricably linked to ongoing public discussions concerning sex, consent, morality and power (e.g., the “Me Too” movement). It was clear and uncontested that Harris’ lawsuit was materially related to Courtney’s speech. The complaint also did not include a single allegation that Courtney made any statements with actual knowledge of their falsity, which could not be tested in any event.[9] The Honorable Jeffrey M. Geller heard arguments on March 30, 2022, and ruling from the bench, he granted Courtney’s motion on every basis that was raised.[10] It is believed that this is just the second time a party has prevailed under Maryland’s Anti-SLAPP Statute.[11] Joshua appealed this ruling, but his appeal was ultimately dismissed. This was a great outcome for Courtney, but it is easy to imagine that Maryland’s appellate courts would have appreciated the opportunity to address this matter. While Courtney prevailed, it was a Pyrrhic victory. The fact of the matter is that once the lawsuits were filed, her speech was chilled entirely. Courtney did make a few posts about the litigation once it was filed, but as soon as some litigants started incorporating that into their filings, she stopped altogether. There was also the damage caused by the allegations against her that painted her as a liar. She never really had an opportunity to defend against these allegations either, and even if she did have that chance, it is unclear if it would have mattered or if the court of public opinion had already judged her. Critically, Courtney’s business also suffered. She closed Full Circle Doughnuts in November 2021, just four years after it opened. Shortly after that, Courtney moved away from Baltimore. There is no doubt that the burden of the litigation was a critical factor in her decision to close her business and move. Courtney’s reality begs the question of whether Maryland’s Anti-SLAPP Statute is a paper tiger. For example, the Statute does not include an attorneys’ fee provision. The practical effect of this is that even a party eligible for relief under this Statute will still be burdened by the commencement of a SLAPP Suit. For Courtney, because her company was a co-defendant, she had no choice but to hire counsel. Additionally, the requirement to show “bad faith” does not necessarily distinguish the Statute from Rule 1-341 – Bad Faith – Unjustified Proceeding. No matter the damage the litigation caused Courtney, her strength and resolve will carry her through. She will tell her story one day, and it will be an incredible one. Until that day, the hope is that her case sets a precedent that will protect others that are as courageous as she was. [1] Mr. Harris also alleged that Courtney was responsible for posts concerning him that appeared on a website known as “outyourabusers” despite having nothing more than speculation that she was behind that content. These allegations were addressed through an affidavit from Courtney where she affirmed that she was not responsible for the website. This affidavit was not countered. [2] See Zeran v. Am. Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997) (internal quotations and citations omitted). [3] See Thacker v. City of Hyattsville, 135 Md. App. 268, 313 (2000), cert. denied, 363 Md. 206 (2001) (explaining that if a statement is not provable as false or is not reasonably interpretable as stating facts, then it cannot form the basis of a defamation suit) (quoting Milkovich v. Lorain Journal Co., 497 U.S. 1, 18, 110 S.Ct. 2695, 2705 (1990)). [4] See Mogged v. Lindamood, No. 02-18-00126-CV, 2020 WL 7074390, at *16 (Tex. App. Dec. 3, 2020), review denied (June 11, 2021) (holding that the label “sexual predator” is “mere opinion”); see also Rosado v. Daily News, L.P., No. 157674/13, 2014 WL 883648, at *3 (N.Y. Sup. Ct. Jan. 31, 2014) (holding that being labeled a “sex predator” is not actionable). See also Burgoon v Delahunt, 2000 WL 1780285 (Minn. App) (reasonable person could apply “sexual predator” to inappropriate touching and offensive sexual comments); Terry v Davis Community Church. 131 Cal App 4th 1534, 1555 (2005) (inappropriate relationship with minor) [5] See MCB Woodberry Developer, LLC v. Council of Owners of Millrace Condominium, Inc., 253 Md. App. 279, 297 (2021). [6] See Snyder v. Phelps, 562 U.S. 443, 452, 131 S. Ct. 1207, 1215, 170 L.Ed. 2d 172 (2011) [7] See Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Bos., 515 U.S. 557, 574, 115 S. Ct. 2338, 2347, 132 L. Ed. 2d 487 (1995). [8] In Woodberry, the Appellate Court of Maryland explained that “First Amendment jurisprudence in the context of actions for defamation … establish that a matter of ‘public concern’ means ‘fairly considered as relating to any matter of political, social, or other concern to the community’.” See 253 Md. App at 304. [9] See Batson v. Shiflett, 325 Md. 684, 728 (1992) (explaining that constitutional malice “is established by clear and convincing evidence that a statement was made ‘with knowledge that it was false or with reckless disregard of whether it was false or not.’”) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 11 L.Ed.2d 686 (1964)). [10] The motion also argued that the complaint failed to state a claim upon which relief could be granted. [11] Shortly after this ruling, the other lawsuits pending against Courtney were resolved.
September 16, 2024
Labor and Employment
OK at Work: Effective Strategies for Utilizing Your Attorney
On this week's OK at Work, Sarah Sawyer and Russell Berger discuss strategies for leveraging your attorney to help your business mitigate legal risk. Listen to learn more.
September 10, 2024
Labor and Employment
OK at Work: How Will the Newest Supreme Court Decision Affect Your Business?
On this week's OK at Work, Sarah Sawyer and Russell Berger discuss the Supreme Court's recent decision eliminating the substantial deference that federal courts previously gave to the decisions of administrative agencies and what it could mean for business owners, executives, and in-house counsel. Listen to learn more.
July 30, 2024
Labor and Employment
In the Know Series - Labor & Employment Law Changes in Pennsylvania
Stay Ahead of the Curve with Key Insights from Our L&E Team Pennsylvania employers must navigate evolving legislation impacting labor and employment practices in the Keystone State. Now that the first quarter is behind us, our team has assembled a concise overview of the recent changes to help you stay compliant and informed. Parental Leave: Currently, the Commonwealth of Pennsylvania does not require an employer to offer its employees parental leave. However, this past year, Pennsylvania legislators introduced House Bill 181, the Family Care Act, which would create a statewide paid family and medical leave program in Pennsylvania for the first time in the Commonwealth’s history. The program would offer up to twenty (20) weeks of paid leave. The House referred House Bill 181 to the Labor and Industry Committee on March 8, 2023. The House re-committed House Bill 181 to the Rules Committee on June 6, 2023. The Rules Committee and the Appropriations Committee last considered House Bill 181 on December 13, 2023, and a vote has not yet been scheduled. On March 28, 2024, the Senate introduced SB580, a companion bill.
April 22, 2024
Contractor's Corner
The Crucial Importance of Shareholder Agreements
When expanding your current FedEx business or embarking on a new business venture, individuals often join together to share resources instead of going at it alone. When forming a corporation that involves more than one shareholder or adding a shareholder to a single-shareholder entity, it is crucial to establish a shareholder agreement between all parties involved. Below are some reasons why creating a shareholder agreement is so important and why it’s especially essential when adding shareholders. Clarifying Roles and Responsibilities A shareholder agreement clarifies each shareholder’s roles, responsibilities, and expectations. It outlines the rights and obligations of each party, including how decisions will be made and how the company will be managed. Shareholder agreements also safeguard minority shareholders from being outvoted by the majority. Dispute Resolution Shareholder agreements make it easier to resolve potential disputes between shareholders. The agreement can establish a dispute resolution process, such as mediation or arbitration. The process will help ensure that any disagreements do not escalate into legal battles that could jeopardize the business. Protection for Minority Shareholders Minority shareholders need to protect themselves from being disadvantaged compared to the majority shareholders. Shareholder agreements can assist with this by establishing clear rules and outlining the rights of minority stakeholders. For example, it might ensure that no major decisions or changes can be made without the approval of all shareholders. Preparing for the Future Shareholder agreements can help prepare for the future. It can establish processes for adding new shareholders and outline the terms and conditions of any future sale of the company. Being prepared for future possibilities can provide a sense of control and stability that benefits everyone involved with the company. Compliance with State Laws In many states, shareholder agreements are legally required. But even in cases where it’s not required by law, it’s vital to have one in place. In some cases, not having a shareholder agreement could lead to significant disputes that could seriously impact the business. Conclusion: Shareholder agreements are intended to establish clear expectations, ensure fair treatment of minority shareholders, provide a roadmap for dispute resolution, and prepare for future possibilities. It is essential for business owners to create a well-thought-out shareholder agreement that is comprehensive, detailed, and legally binding. By doing so, business owners can protect their investments, minimize the risk of disputes, and help guarantee the company’s long-term health.
July 12, 2023
Contractor's Corner
Legalized Marijuana and DOT Regulations: What Contractors Need to Know
The legal status of marijuana in the United States has been changing rapidly over the last decade. This quick evolution has led to various questions and concerns for business owners, especially those who operate fleets of commercial trucks and employ truck drivers. Nowadays, marijuana is legalized for medical or recreational use in many states across the United States, which raises concerns about how this will impact the transportation industry. The legalization of marijuana for medical and recreational use in many states creates a bit of uncertainty for those that operate fleets of commercial trucks and employ truck drivers. The Department of Transportation (DOT) requires that drivers undergo regular drug testing, and marijuana use can cause a failed test, disqualification of a commercial driver’s license (CDL), and possible termination. Employers need to know the legal ramifications of marijuana use for commercial motor vehicle employees. It’s a good idea to review your company’s drug and alcohol policy to ensure that your policy is compliant with the DOT’s drug and alcohol testing regulations. If an employee tests positive for drug use, including marijuana, while on duty, the law stipulates that the employer must immediately remove the driver from duty. In this case, the DOT requires drivers to complete a Return-to-Duty process, including treatment plans and drug testing. After an employee meets all requirements, the DOT may allow the employee to return to work. When an employer is well informed regarding what is required under the law, they can act quickly to comply, which is crucial for safe operation and complying with timing requirements under the DOT, especially after an on-duty accident. It’s important to recognize and outline restrictions over the use of marijuana so that employees know their obligations. Employees cannot use marijuana on the job and must understand that using marijuana or CBD products is strictly prohibited under federal law for truck drivers. It’s critical to educate employees regarding the importance of abstaining from marijuana use while on duty and the potential consequences of failing a drug test. Often, employees operate under false assumptions about marijuana usage based on headlines around legalization and employee protections. While several states protect employees’ off-duty marijuana usage, they all have exemptions for federally mandated drug testing and sometimes for safety-sensitive positions. Although marijuana is legal in many states, it remains illegal under federal law, which could impact a driver’s ability to cross state lines with marijuana products. Ultimately, drug testing falls under the jurisdiction of the DOT and supersedes state laws on marijuana legalization. Therefore, business owners must follow DOT drug and alcohol testing regulations to avoid non-compliance issues and maintain a safe workplace. Conclusion: Contractors should prioritize compliance with DOT drug and alcohol testing regulations to maintain a safe workplace and avoid non-compliance issues. By ensuring your employees understand the importance of abstaining from marijuana use and educating them on the Return-to-Duty process, you can streamline your policies and minimize your legal exposure. Working with legal counsel and keeping abreast of the regulations will go a long way toward creating a safer, more informed workplace and preventing attrition based on misinformation.
July 6, 2023
Contractor's Corner
Personal Guarantees of Seller Financing in FedEx Deals
Seller financing, where the company selling the business agrees to provide the funding to the buyer for a percentage of the deal, is commonplace in the buying and selling of FedEx businesses. Seller financing can help the parties where a cash buyer needs more capital or where obtaining bank financing is challenging or is slowing down the deal. However, given the risks associated with lending to the buyer, sellers will often ask for a personal guarantee from the buyer. Typically, the promissory note is between the buying and selling entities. Meaning the buying entity is liable to the selling entity for the amount of the note, but the individual shareholder or shareholders of the buying entity are not personally responsible for the debt. This leaves the seller with little recourse should a buying entity fail to pay and become inactive. To better insulate itself, a seller may ask the shareholders of the buying entity to personally guarantee the funds, allowing the seller access to the shareholders’ personal assets should the buying entity fail to repay the loan. While seller financing can be an excellent tool for parties, before engaging in the process, buyers should take stock of their personal assets and the implications of a personal guaranty on those assests, and sellers should consider how they plan to secure the debt in case the buying entity is unsuccessful and ceases to exist.
March 30, 2023
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
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
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
Contractor's Corner
Legal Considerations When Running a FedEx Business Webinar
Sarah Sawyer hosted a webinar to discuss the Legal Considerations When Running a FedEx Business. A few aspects that were covered during the webinar are: Legal issues related to pay structures and incentives Wage deductions, the do and don’ts Business formation and structure concerns Asset protection considerations The webinar can be found here. Passcode: G17$0WjE
September 26, 2022
Contractor's Corner
Potential Changes to Federal Overtime Pay Laws Loom
Currently, under the Fair Labor Standards Act (FLSA) Motor Carrier Exemption, FedEx contractors do not have to pay drivers overtime when driving trucks over 10,000 pounds. That could change. The Guaranteeing Overtime for Truckers Act, introduced in the U.S. House of Representatives on April 14, 2022, and in the Senate on September 12, 2022, would repeal the FLSA Motor Carrier Exemption. The legislation will significantly change how contractors schedule employees and manage their fleet if passed. The U.S. Department of Transportation recently recommended eliminating the exemption to improve the supply chain, and the bipartisan bill has a coalition of support from the Owner-Operator Independent Drivers Association, the International Brotherhood of Teamsters, the Institute for Safer Trucking, the Truck Safety Coalition, Citizens for Reliable and Safe Highways and Parents Against Tired Truckers. The introduction by Senator Markey and Padilla of the Senate version of the Guaranteeing Overtime for Truckers Act gives this bill new life and continues to move the efforts of these groups forward. While these developments in no way guarantee the elimination of the Motor Carrier Exemption, it is a significant development that contractors need to be aware of and prepared to address. We will continue to provide you with updates as we receive them.
September 20, 2022
Contractor's Corner
Wage Deductions: When Can You Make Them?
While wage deductions can effectively recoup costs and losses from an employee, deductions from wages are heavily regulated, and contractors should proceed with caution when making these deductions. Under the Fair Labor Standards Act, a federal law governing most contractors nationwide, wage deductions for items considered primarily for the benefit or convenience of the employer may not reduce an employee’s pay rate below minimum wage. For example, if an employer has an agreement with an employee to deduct from the employee’s wages costs to cover any damage to an employer’s property or lost equipment, the employer’s deductions cannot bring the employee’s pay below minimum wage. Alternatively, wage deductions for items considered for the employee’s benefit and do not benefit the employer, such as a personal loan to the employee, the wage deduction can reduce the employee’s effective rate of pay below minimum wage. The same general rule applies to wage deductions and overtime compensation, not bringing the employee’s wage below time and a half. In addition to federal laws regulating wage deductions, many states have stricter rules governing what, when, and how employers may make deductions from employees’ wages. For instance, in New Jersey, employers may not require an employee to pay for their uniforms or deduct the cost of uniforms from an employee’s paycheck, and in California, employers are generally prohibited from making deductions from an employee’s wages for vehicle damage caused by an employee’s negligence. As a general rule of thumb, contractors should always get express permission from employees to make any deductions from their wages and pay close attention to their state’s laws on deductions to ensure they are not running afoul of these regulations. To merely include a deduction policy in the employee handbook without seeking permission and vetting what deductions are allowable in your state and the laws governing those deductions is wholly insufficient. Out of all of the many areas of employment law that employers must comply with, wage and hour laws have some of the steepest consequences for noncompliance. Contractors who fail to comply with wage and hour laws, such as wage deduction regulations, may have to pay double to treble damages, the employee’s attorney’s fees, and individual penalties for noncompliance. Accordingly, contractors must pay special attention to these laws before implementing any policies or procedures related to payroll deductions.
September 8, 2022
Contractor's Corner
Workplace Compliance: Avoiding Costly Mistakes
When you get down to brass tax, the fundamentals of running a successful FedEx operation are having operational trucks and employees to run the routes. Like most other businesses, employees are the organization’s lifeblood but can also be the most troublesome from a compliance perspective. This is especially true for FedEx contractors who, in managing their workforce, must work to remain in compliance with state, federal, and local laws and with FedEx requirements. One of the main struggles with maintaining workplace compliance is that there is a federal baseline related to wage and hour, discrimination, and leave laws, but states and local governments are free to require employers to provide additional benefits beyond the federal system offers. This means that states and local governments all over the country have different laws that employers must follow regarding employees. Generally speaking, the east coast states, California, and major cities have the most favorable laws and protections for employees, and southern and mid-west states have minor employee regulations and benefits. Sometimes, whether a state or local law is applicable is based on the size of the employer, meaning that small businesses, like a small FedEx contractor, would be exempt from compliance, while other state and local laws apply no matter the size of the company. Often, through speaking with other contractors and because they are on good terms with FedEx, contractors wrongly assume that they are following all relevant employment laws. However, given the patchwork of federal, state, and local laws, it is easy for contractors to overlook what they may see as nominal wage and hour violations or fail to provide employees with required federal, state, and local notices or protections. These oversights can be costly, both from a retention and an economic standpoint. For instance, many wage and hour laws, including the Fair Labor Standards Act, have expensive penalties for non-compliance, including double or treble damages and paying the employee’s attorney’s fees. Ultimately, different states have different employment laws, and compliance with these laws is an integral part of running a FedEx business. Contractors should ensure their policies and procedures meet all state, federal, and local legal requirements and that their practices align with what is required of them under their FedEx contract.
August 1, 2022
Labor and Employment
Time to Care Act
The Time to Care Act has passed, and beginning on January 1, 2025, most Maryland employees can apply for paid leave from a state fund. Fortunately, while this law took effect June 1, 2022, it isn’t functional until October 1, 2023, when employee and employer contributions start, and employees will not be eligible to take leave until January 1, 2025-allowing employers time to prepare. Essentially, employees who worked at least 680 hours over the 12 months immediately preceding the date on which leave is to begin are entitled to 12 weeks of paid leave for health and caretaking reasons. This leave can run concurrently with FMLA leave and, in many cases, essentially makes FMLA paid leave. That said, for employers who do not fall under the FMLA, it is important to note that the Time to Care Act does contain job protection similar to FMLA. While employers should start to consider next steps related to implementing new leave laws, they have some lead time. While employees won’t be eligible to take leave until 2025, employers should start communicating with employees about the new law next year since they will see contributions to the fund deducted from their paychecks beginning October 1, 2023. There are also a few unanswered questions based on how the law is drafted that I expect we will get answers to over the next 12-18 months.
July 13, 2022
Contractor's Corner
FedEx Purchase Agreements-More Than Just Legal Mumbo-jumbo
Often, when I first speak with prospective FedEx contractors, they are chomping at the bit to get started. They have learned about the industry and are excited about the opportunity to own a part of the booming logistics industry. This excitement often causes them to gloss over the purchase agreement in favor of moving forward quickly, viewing the purchase agreement as merely an obstacle to moving forward with the deal. However, failure to give the purchase agreement the attention it is due can yield complicated and expensive outcomes. The purchase agreement is more than just legal jargon and is the pivotal document dictating any verbal agreement the parties have reached and governs when the parties can terminate the deal, when the buyer gets their deposit back, and what the obligations of the seller between the execution of the purchase agreement and closing and after the sale. Outside the FedEx industry, businesses will often sign the purchase agreement and close on the same day. However, in the FedEx industry, because the sale depends on FedEx approval, the parties sign the purchase agreement and close weeks, if not months, later. This process, which is colloquially referred to as a “sign and delayed close,” leaves a lot of room for issues to arise between the time the parties sign the purchase agreement and closing, including, among other things: Seller failing to keep up the business in the ordinary course, leading to the buyer not getting what they were expecting on the closing date; A buyer failing to obtain or maintain financing; Physical assets falling into disrepair or becoming nonoperational; Employees leaving and the seller failing to hire new ones; and Seller improperly disposing of assets. Additionally, given the need to move forward quickly to start the process of getting FedEx approval, buyers are typically performing due diligence between signing the purchase agreement and closing, which can lead to buyers discovering unsavory details about the seller’s business that make them want to terminate the contract. While these are all real risks of “sign and delayed close” deals, they are palatable risks as long as the parties have a firm understanding of the risk they are each taking on, and the seller’s obligations between signing and close and the purchase agreement contains contingencies and reasonable outs for the buyer. Without proper protections in the purchase agreement, a buyer may have no choice but to move forward with an unexpectedly unsavory deal or risk losing their deposit. The moral of the story is: Don’t gloss over the purchase agreement! It governs the entire transaction, including what the buyer is entitled to between signing and closing and when the parties will go their separate ways.
July 10, 2022
Labor and Employment
Anti-SLAPP and Section 230 Ruling
In a rare ruling on April 26, 2022, the Circuit Court for Baltimore City granted our Anti-SLAPP Motion to Dismiss in a defamation case brought by Joshua Harris, a former Green Party candidate for Mayor of Baltimore, against our clients Courtney Fix and Get Your Fix, LLC. Ms. Fix, who was the owner of a local donut shop, Full Circle Doughnuts, was sued by five different men in three separate lawsuits for defamation based on her social media posts that shared the stories of other women and their alleged loathsome experiences involving the men who filed suit. While two of the lawsuits were ultimately resolved out of court, the case filed by Mr. Harris was dismissed on several grounds, including Anti-SLAPP and Section 230 of the Communications Decency Act. In granting Ms. Fix’s Motion, the Court found that Mr. Harris brought the case against Ms. Fix in bad faith, his case lacked merit, Ms. Fix’s speech was protected under the First Amendment, and Mr. Harris’s status as a public figure, as well as the content of Ms. Fix’s speech in the context of the MeToo and Times Up movements, made Ms. Fix’s speech a matter of public concern. In making its ruling, the Court noted Mr. Harris’ request that the Court force Ms. Fix to submit to a mental evaluation “particularly offensive.” I was honored to have worked with my colleague Mark Dimenna to secure this outcome for our client. While Maryland’s Anti-SLAPP law has been on the books since 2004, these matters are rarely before Maryland courts, and there is just one reported case analyzing the law. On April 29, 2022, Mr. Harris appealed the Baltimore City Circuit Court’s decision, and the case is now pending before the Court of Special Appeals, providing just the second opportunity for Maryland’s appellate courts to consider the Anti-SLAPP statute. Check out the Baltimore Business Journal article on this case here: Judge dismisses defamation lawsuit against former Full Circle Doughnuts owner
June 3, 2022
Labor and Employment
Supreme Court Ruling on OSHA’s ETS: Update
In my January 14, 2022, blog, Supreme Court Ruling on OSHA’s ETS: What Does it Mean and What’s Next? I discussed what could be next for OSHA’s Emergency Temporary Standard. As of January 26, 2022, OSHA has withdrawn the Emergency Temporary Standard and is pursuing a permanent standard through the standard process, which is slower and more rigorous. OSHA withdrawing the ETS means that employers can rest easy that they will never have to comply with its requirements. However, there’s more to come as OSHA looks to implement similar requirements through a permanent rule.
February 1, 2022
Labor and Employment
Supreme Court Ruling on OSHA’s ETS: What Does it Mean and What’s Next?
On January 13, 2022, three days after the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) COVID-19 vaccination and testing mandates went into effect; the Supreme Court stayed the mandate pending further review in the Sixth Circuit. However, the stay is only temporary, and employers should remain vigilant. For now, the mandate that would have impacted an estimated 100 million Americans is on hold, and employers, who were at the ready to race towards compliance, are likely breathing a collective sigh of relief. Supreme Court Ruling In a 6-3 decision, the Supreme Court reinstated the temporary injunction stopping OSHA from enforcing the ETS, pending resolution in the Sixth Circuit Court of Appeals. The Court’s decision focused on whether OSHA has the requisite authority to promulgate the ETS. In its ruling, the Court explained that, while OSHA has the power to “set workplace safety standards,” it does not have the authority to set “broad public health measures.” Ultimately, given that COVID-19 is a daily risk to individuals as they go about their daily lives, not just in the workplace, the Court found that “although COVID-19 is a risk that occurs in many workplaces, it is not an occupational hazard in most.” Accordingly, the Court views COVID-19 as part of “the hazards of daily living,” not a workplace hazard under OSHA’s purview. Justices Breyer, Kagan, and Sotomayor dissented, finding that OSHA acted within its scope of authority in issuing the ETS. The dissenting justices concluded that COVID-19 presents a “grave danger” to employees, and the ETS is necessary to address those dangers. What’s Next? It is now up to the Sixth Circuit Court of Appeals to determine whether the ETS is valid. If it does, based on the Court’s reasoning in staying the ETS, it is unlikely to survive should it go before the Court again. Another consideration for the future of this regulation is that the ETS is a temporary standard meant to be replaced by a permanent standard on or before May 5, 2022. As such, we could see some movement by OSHA to engage in the formal rulemaking process to publish a formal regulation in the coming months. Also, given that Court approval of a vaccine mandate is unlikely, we may see new targeted regulations from OSHA to implement additional safety measures in workplaces where in-person work is necessary and social distancing is difficult, which are less likely to face successful legal challenges. Though employers are not currently required to comply with the numerous requirements of the ETS, including mandatory vaccination, it is within their discretion to mandate vaccination and implement other COVID-19 safety protocols. Even without OSHA’s mandate, many employers are mandating vaccination or implementing safety protocols based on vaccination status. While businesses implementing voluntary directives do not need to jump through the regulatory hoops of the ETS, they must still take care to develop comprehensive and compliant policies to ensure compliance with Title VII and the Americans with Disabilities Act (ADA). Additionally, it is imperative that companies still carefully consider what safety protocols are suitable for their workplace as the transmittal of COVID-19 in the workplace has both practical and legal consequences, especially where employers are subject to state and local COVID-19 safety orders.
January 14, 2022
Labor and Employment
Unexpected Long-Lasting Impacts of the COVID-19 Pandemic on Employers
The COVID-19 pandemic has undoubtedly had long-lasting impacts on the workplace as we now enter the twentieth month of the pandemic. Some effects were expected, such as increased safety precautions, layoffs, rehiring, closed offices, and remote work. However, some of the challenges facing employers have been a bit more unexpected and longer-lasting than initially anticipated. In the later months of the pandemic, companies have been navigating vaccine mandates and increases in Americans with Disabilities Act (ADA) requests against a backdrop of worker shortages and continued safety concerns, which weigh heavily on the decisions they are making as it relates to workplace policies. Vaccine Mandates Since vaccines became available earlier this year, employers have been grappling with whether to mandate or encourage vaccination or stay silent. Initially, the lion’s share of employers were opting to remain silent on vaccination or encourage vaccination through incentives or gentle nudging to avoid the hassle of mandating vaccination and providing religious and medical exemptions. Though, as it became clear over the summer that the COVID-19 pandemic was far from over, many employers began to consider mandating vaccination. This change was largely driven by a shift in public opinion, bold moves at the federal level, and the practical need for many employers with in-person operations to keep their workforce healthy and working. However, with many companies struggling to hire and retain enough employees to staff their operations fully, the analysis for many employers has gone well beyond the health and safety of their employees. Ahead of the implementation of the federal mandate through the Occupational Safety and Health Administration (OSHA) issuing an Emergency Temporary Standard, due to industry-agnostic worker shortages, many employers have opted to encourage vaccination over requiring it since they cannot afford to terminate employees for failing to comply with a vaccine mandate. For those who have decided to mandate vaccination, many have faced walkouts and terminations, sometimes resulting in a mass exodus of their workforce. ADA Requests The COVID-19 pandemic has resulted in many business owners and Human Resource (HR) professionals taking a crash course in ADA compliance. While many employers may typically receive a couple of requests per year, the pandemic has led to an increase in these requests, with some being COVID-19 related and many being COVID-19 adjacent. As it relates to COVID-19 specifically, while temporary COVID-19 illness is not a disability, many employers have received leave and accommodation requests related to managing risk around contracting COVID-19 with a pre-existing condition or COVID-19 long-hauler illness. Additionally, companies have seen an increase in employees needing to take time away from work or needing accommodations for mental health conditions. In many instances, these requests have led employers to dig deep into the EEOC’s guidance on these issues and examine the interaction between the ADA and FMLA and determine how accommodating employee needs impact the business's operations. Overarching in both of these issues are the operational burdens of administering these policies and the impact on the company’s workforce based on employees being unavailable to work or terminated or restricted from returning to the office. As employers continue to navigate employment matters related to the COVID-19 pandemic, they will continue to face increased administrative burdens related to keeping their workforce safe and accommodating and retaining employees. There is no shortage of complex issues and legal landmines involved, and employers must stay vigilant regarding legal compliance and consider the practical and legal consequences of their actions.
October 28, 2021
Labor and Employment
That’s a violation of HIPAA! But is it…
It has certainly been an eventful summer from the reopening of businesses and office spaces, talk of a fall “comeback” with many employers hoping to return the majority of their workforce to working in person or operating in a hybrid model, and the elimination of mask mandates to the reinstatement of mask mandates, a delta surge, increased vaccine mandates, and approval of the Pfizer vaccine. As we have learned over the last 18 months, there is never a dull moment when it comes to the COVD-19 pandemic. Over the last month, I have seen a sharp increase in companies mandating vaccination in the workplace and organizations requiring proof of immunization or a negative COVID-19 test to attend meetings or events. With these increases in mandatory policies, I have also been fielding many questions regarding HIPAA compliance. Namely, what do we need to do to comply with HIPAA when requesting and obtaining medical information, such as vaccination status? Well, I am here to set the record straight-HIPAA probably doesn’t apply to your business. The Health Insurance Portability and Accountability Act of 1996, better known by its acronym, “HIPAA,” is a federal law that created national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge. Since this law covers patients, it only applies to healthcare providers, health plans, healthcare clearinghouses (“Covered Entities”), and business associates acting on behalf of these Covered Entities. HIPAA does not cover businesses that are not in healthcare or acting on behalf of healthcare entities. While HIPAA does not cover most businesses who call me with questions regarding HIPAA compliance, that does not mean they are not responsible for keeping medical information confidential and keeping it secure and out of the wrong hands. When it comes to protecting confidential medical information, other federal, state, and local laws likely apply. For example, when it comes to employees, under the Americans with Disabilities Act (ADA), employers are required to keep all employee medical information confidential and keep it in a confidential medical file separate from the employee’s personnel file. There are also laws, such as the Family Education Rights and Privacy Act (FERPA), that protect the medical information of elementary, secondary, and post-secondary students. While asking whether HIPAA applies is not technically relevant to most companies or organizations, the question has become a colloquial way of asking what they should do with confidential information to stay out of trouble, which is a thoughtful and necessary question. Ultimately, when obtaining or storing personal medical information of employees, clients, or event attendees, companies and organizations need to check federal, state, and local regulations to ensure compliance.
August 26, 2021
Labor and Employment
Vaccine Mandates: Are the Tides of Public Opinion Turning and Will it Lead to Increased Mandates?
Dr. Anthony Fauci recently expressed his support for more local vaccine mandates for schools and businesses, which was swiftly followed by a barrage of state and local governments and healthcare companies mandating the vaccine. While businesses have always been able to require vaccination, many have shied away from doing so based on the practical and legal implications, which include providing religious and medical exemptions and preparing to enforce a mandatory vaccination policy even if it means terminating high performing employees. Based on these complications, many private businesses have been encouraging vaccination instead of mandating it. However, with more encouragement from federal, state, and local governments and public health officials, the tides of public opinion are turning, and more businesses may opt to mandate vaccination. That said, moving forward, regardless of guidance from governments, the CDC, and public health officials, business owners will still have to consider the practical realities of vaccine mandates and the potential pitfalls. One practical consideration for many employers has been the appetite for vaccination among their employees. When employers mandate vaccination, they have to be prepared to enforce the policy if an employee refuses to get vaccinated, which could cause them to lose top talent in a competitive job market where replacements are hard to find. Another potential pitfall to mandating vaccinations is the administrative costs associated with processing and vetting exemption requests, especially related to religious exemptions, which are often difficult to assess and determine validity. On the flip side, with the cold and flu season on the horizon, unvaccinated workers may miss substantial amounts of work for common cold symptoms. Just last week, after Dr. Fauci encouraged vaccine mandates, I commented on this subject in the Maryland Reporter (view the article here). Since that time, as the infection and death rates related to the delta variant continue to rise, vaccine mandates have rolled out at a rapid pace with vaccine mandates for New York City, California, and Veterans Affairs workers and a wide range of medical groups and long-term care employees. Many of these mandates have been partial mandates giving employees an interesting choice: get vaccinated or get tested for COVID-19 weekly. Providing a testing option encourages vaccination by putting the burden on employees to get tested weekly and reduces the administrative headache of drilling down on exemptions claimed by employees by providing an alternative to vaccination. While there has been an increase in vaccine mandates in the public sector that may result in increases in private business mandates, the change in public opinion does not eliminate the potential pitfalls and challenges private employers face when determining if a vaccine mandate is right for them. Accordingly, employers still have several things to consider before mandating vaccination and should be sure to have a comprehensive policy to ensure their practices are legally compliant.
July 30, 2021
Labor and Employment
COVID-19 “Long-Haulers” and Workplace Accommodations
Employers spent the better part of 2020 and the beginning of 2021 evaluating how to prevent employees from contracting COVID-19 and address COVID-19-positive employees. Now, as employees return to work, employers face new requests from employees who had COVID-19 weeks or months ago but have not fully recovered. These individuals, typically called" long-haulers," often suffer from lasting physical and psychological issues from their illness. With little currently known about long-haulers, the problems and ailments long-haulers face are likely to impact the workplace for the foreseeable future. COVID-19 long-haulers deal with a host of ailments, including shortness of breath, debilitating fatigue, sluggish mental capacity and memory loss, and dizziness. As one can imagine, these symptoms may inhibit an employee's performance or attendance. As a result, employers should consider ways to address these issues and remain compliant with applicable state and federal laws. If an employee expresses concern regarding long-haul COVID-19 symptoms impacting their work performance, employers should consider whether the employee's challenges trigger company obligations under the Americans with Disabilities Act (ADA). While there's little precedent regarding whether COVID -19 long-haulers ailments are a condition covered under the law, employees who request accommodations because of long-haul symptoms will likely qualify for accommodation. The definition of "disability" under the ADA is intentionally broad, and the ADA does not provide a specific list of what conditions are covered. Instead, individuals meet the definition of "disability" if they have "a physical or mental impairment that substantially limits one or more major life activities." While the ADA does not likely cover an employee who contracts COVID-19 and fully recovers within the standard recovery time of two weeks, if an employee has lingering COVID-19 symptoms that limit their ability to perform their job duties, they likely qualify for coverage under the ADA. Similarly, long-haulers who ask for leave may be entitled to it under the Family Medical Leave Act (FMLA). The FMLA defines a serious health condition as an illness, injury, impairment, or physical or mental condition that involves inpatient care or continuing treatment by a health care provider. A serious health condition also includes impairment of more than three calendar days plus two or more visits to a health care provider. An employee suffering from long-term COVID-19 ailments is likely to meet the definition of a serious health condition and may qualify for leave, intermittent or continuous, under the FMLA. Ultimately, as employees return to work, employers should be mindful of handling requests from employees around COVID-19 related illnesses and challenges to ensure they are compliant and do not inadvertently or improperly deny employee requests.
July 16, 2021
Labor and Employment
Separate Pay for Restaurant “Side Work?” Maybe.
Anyone who has ever worked in the restaurant industry is familiar with the term "side work." For most servers, side work, typically consisting of folding napkins, setting tables, restocking, and other maintenance tasks, often make up a significant portion of their work hours. This is especially true when the restaurant is slow and there isn't much for servers to do. Side work, which is untipped work, is typically regarded as undesirable grunt work that is a necessary evil of waiting tables. Often, since restaurant owners can reduce servers' hourly rates well below the minimum wage to account for tips, employees are making as little as $2.13 per hour. However, a rule proposed by the DOL is seeking to change the way employees are paid for their side work, creating a dual approach where employees are paid at one rate when completing tip-producing duties and another when completing other tasks. Under the proposed rule, individuals who spend a "substantial amount of time" on untipped side work would be entitled to the full minimum wage for certain hours worked. The DOL defines a "substantial amount of time" as (a) spending more than 20% of their hours worked in a workweek on side work (otherwise known as the 80/20 rule), or (b) spending more than 30 minutes of uninterrupted time on side work must be paid standard minimum wage. Thus, per the proposed rule, if an employee spends a substantial amount of time on untipped work, the employer will not take a tip credit and lower the employee's minimum wage for the time the employee spends on untipped work. The comment period for the DOL's proposed tipped rule closes on August 23, 2021. If it is adapted, restaurants will need to shift from simply tracking the hours employees work to documenting what employees are doing during those hours.
July 2, 2021
Labor and Employment
Are you National Labor Relations Act (NLRA) compliant?
In 1935, Congress enacted the National Labor Relations Act (NLRA) intending to protect workers from harmful labor practices and encourage collective bargaining. Out of the NLRA came the National Labor Relations Board (NLRB), an independent federal agency created to enforce the NLRA. While the NLRA granted employees the right to form or join a union and engage in activities aimed at improving working conditions, many employers are unaware of the impact of the NLRA beyond its unionization rights. The NLRA applies to all private workplaces (unionized and non-unionized) in the United States, and all businesses must ensure that their policies and practices do not violate the NLRA's protected activity provisions. Under the NLRA, employees have the right to act with co-workers to address work-related issues. These rights materialize in many ways that go above and beyond employees circulating a petition or joining together to protest working conditions. Concerted protected activities include employees talking openly about pay and benefits, talking to the media about working conditions in the workplace, and refusing to work in unsafe conditions. It is also important to note that it does not take several employees engaging in the activity for it to be a "concerted protected activity." Individual employees may be engaging in protected activity if they are acting on the authority of other employees, bringing group complaints to the employer's attention, trying to induce group action, or seeking to prepare for group action. Ultimately, employers should not prohibit employees from talking about their pay and benefits and must be mindful of their confidentiality, workplace conduct, conflict of interest, and solicitation policies and whether they are NLRA compliant. Overly restrictive policies, while appearing reasonable on their face, may run afoul of the NLRA. For example, while an employer may prohibit an employee from posting something maliciously false or disparaging on social media, broad policy language prohibiting employees from posting anything negative or unsavory about an employer is likely unlawful.
June 10, 2021
Labor and Employment
What to Ask a Lawyer When Starting a Business
(Note: to navigate through the video, click on the YouTube button on the bottom right of the video to open the full version with time controls.) I sat down with Dave Lorenzo on the Inside BS Show to discuss what business owners should consider when hiring an attorney and the importance of having a team of subject matter experts available to help when needs arise. During my conversation with Dave, I answer several questions regarding how I engage with clients and what business owners need to know when dealing with legal issues impacting their business, including: Do I need a lawyer to start a business? Should I work with a litigator of a transactional attorney? What questions should I ask a lawyer before I hire her? Check out the interview for the answers to these questions and more. You can use the timestamps below to navigate through the interview: 00:00 - What to Ask a Lawyer When Starting a Business 01:47 - Business Lawyer Profile: How do you become a business lawyer? 02:22 - What is the biggest challenge you face as a business lawyer? 03:40 - What challenges do you face related to the law and COVID? 05:24 Why is it important to work with a lawyer who knows litigation as well as transactional work? 06:47 What is the definition of Complex Commercial Litigation? 08:00 Why your attorney must ask the right questions when you are a business start-up. 09:53 Do I need a lawyer to start a business? 11:48 How do you protect trade secrets when you hire employees? 14:53 How to get business clients as a lawyer 16:16 How to use LinkedIn and Blogs for law firm marketing. 18:00 Examples of strategic alliance marketing for law firm business development 19:40 How do I find the right lawyer for my small business? 21:18 What unique insight has being a general counsel given you as a business lawyer? 24:36 What is the biggest challenge for a small business owner in working with a lawyer? 26:33 How to get in touch with a business lawyer
June 1, 2021
Labor and Employment
Saying Goodbye to Maryland’s Mask Mandate: Now what?
On Friday, May 14, 2021, Governor Hogan announced changes to Maryland’s mask mandate, which took effect on Saturday, May 15, 2021. Under Governor Hogan’s executive order, individuals are no longer required to wear masks, inside or outside, except when they are: in or on any Public Transportation or School Bus; obtaining healthcare services, including without limitation, in offices or physicians and dentists, hospitals, pharmacies, and laboratories, and indoors in any portion of a School where interaction with others is likely, including, without limitation, classrooms, hallways, cafeterias, auditoriums, and gymnasiums. Many Maryland counties have advised that they will follow Governor Hogan’s order and not impose any additional mask restrictions. In contrast, some jurisdictions, such as Baltimore City, have kept their mask mandates in place. While individuals are no longer required to wear masks under Maryland law, the CDC has recommended that individuals who are not fully vaccinated against the coronavirus should continue to wear masks and practice social distancing (where possible) when inside or when outside and engaging in any of the following behavior: Attending a small outdoor gathering with fully vaccinated and unvaccinated people; Dining at an outdoor restaurant with friends from multiple households; And attending a crowded outdoor event, like a live performance, parade, or sports event. While Governor Hogan’s order does not distinguish between vaccinated and unvaccinated individuals, the CDC does. The CDC still recommends that unvaccinated individuals wear a mask most of the time to protect themselves. Now that Governor Hogan has limited the mask mandate, Employers must determine what policies and procedures make the most sense for their workforce. While, under Equal Employment Opportunity Commission (EEOC) guidance, employers can ask employees to verify whether they are fully vaccinated, the administrative burden will likely be too much for most employers. However, if employers are unaware of the vaccination status of their workforce, they are left to either continue a mask mandate in the office to protect unvaccinated employees or implement policies allowing employees to go maskless and encouraging unvaccinated employees to wear a mask to protect themselves. Putting the onus on each individual to act according to their vaccination status is likely how many employers will move forward. However, in doing so, it is vital for employers to thoroughly inform their employees of the current guidance and make it clear that employees, regardless of vaccination status, may still wear masks and practice social distancing. Additionally, regardless of whether employers decide to require masks or ditch mask-wearing, they need to pay close attention to what other policies they need to keep, such as quarantine requirements for unvaccinated employees and reporting policies. Ultimately, employees should explore their options and develop a clear and comprehensive policy letting employees know what the company expects and how to keep themselves safe. It is also crucial that employers continue to pay close attention to local rules and mandates. Questions about this or any other legal matter, please contact Sarah at Sarah.Sawyer@offitkurman.com.
May 20, 2021
Labor and Employment
Workplace Discrimination and Harassment Outside the Office
The breakdown of a concrete workplace where worker interaction was somewhat limited to the office during work hours has led to increased flexibility for workers and employers. In many cases, this flexibility has allowed companies greater access to skilled workers, led to a more productive and engaged workforce, and reduced overhead. However, the blurring of the lines between work and home has created additional compliance burdens, especially when communicating and enforcing harassment and discrimination policies. Difficulty ensuring that employees are compliant with workplace policies promoting healthy work environments did not start with the increase in remote work, but they have certainly increased since the world went remote a little over a year ago. Before the COVID-19 pandemic, employers were navigating the difficulties associated with employees’ behavior on social media. Many companies found themselves balancing their desire not to control or police employee behavior outside of work with the impact their outside behavior had on the company culture and exposure. For example, if a group of employees have connected on social media and an employee posts something discriminatory in nature and her colleagues see that post and bring it to the attention of the company, the company may face liability even though the post was made outside of work hours on an employee’s personal page. Now, with many employees working remotely, the ability for employers to prevent and address discriminatory and harassing behavior has become even more complex, and the impacts of such behavior have been more severe. A 2020 Pew Research Center study found that 41% of Americans have personally experienced some form of online harassment. Virtual harassment can take many forms, including sexually explicit jokes, use of derogatory terms through electronic communications, inappropriate use of memes and emojis, insistence on video calls after work hours, and a failure to maintain dress code during video conferences and calls. With fewer natural touchpoints between management and their subordinates, workplace harassment is more likely to go unreported. With this conduct taking place virtually within employees’ homes, employees are more likely to suffer more severe effects. So, what are employers to do? Employers should invest in training and adapt their policies to fit new and evolving office dynamics. Companies can mitigate many of the issues outlined above through clear expectations of employee conduct during work hours and outside work hours, a practical reporting structure that meets the needs of a remote environment, and regular check-ins with remote employees. More than ever, clear and consistent communication with employees is essential to a compliant and healthy work environment. Questions about this or any other legal matter, please contact Sarah at Sarah.Sawyer@offitkurman.com.
April 29, 2021
Labor and Employment
All of My Employees are Vaccinated. Can We Ditch the Masks?
Not Yet. Over the last three months, many employers, including large employers like Aldi, Amtrak, Instacart, McDonald’s, and Target, have been hard at work motivating employees to get vaccinated through incentive programs and education campaigns. Many businesses, especially small businesses with small workforces, wonder when they can start to lift COVID-19 safety protocols, such as mask-wearing in common areas and limiting in-person meetings. While we are the closest we have ever been since the start of the pandemic to scaling back these restrictions, in most states, we aren’t there yet. While the CDC has given vaccinated individuals the green light to visit with other fully vaccinated people indoors without wearing masks or distancing, a review of the CDC’s guidance is the start of the analysis, not the end. Many states, including the State of Maryland, still have mask mandates in place that impact employers. For example, in Maryland, Governor Hogan’s statewide mask mandate from July 2020 is still in place and requires that individuals wear a mask when “engaged in work in any area where…interaction with others is likely, including without limitation, in shared areas of commercial offices…” (View the Governor’s Order here: Executive Order 20-07-29-01) Governor Hogan’s Order does not contain any exceptions for vaccinated individuals, and willfully violating the Order is a misdemeanor punishable by up to a year in jail or up to a $5,000 fine or both. While changes to the Maryland mask mandate are likely in the months to come as more individuals are vaccinated, employers must continue to abide by the current order. Additionally, even when the rules on the federal and state levels loosen, employers will need to consider what makes the most sense for their workplace based on vaccination rates and the realities of their physical workplace to continue to keep employees safe. While restrictions are lifted nationwide, employers should be mindful of the risks associated with prematurely lifting restrictions in the workplace and continue to review their policies and procedures to ensure their employees are safe and comfortable coming to work. Main takeaway? Employers should continue to encourage their employees to get vaccinated, as vaccination is the best way for employees to stay safe and avoid contracting the virus. However, it is too soon to start removing other safety procedures in the workplace. Employers should continue to utilize COVID safety protocols, including liberal use of remote work, where possible, and mask and distancing mandates. Questions about this or any other legal matter, please contact Sarah at Sarah.Sawyer@offitkurman.com.
April 15, 2021
Labor and Employment
Now Hiring: Getting Back to Work Amid the COVID-19 Pandemic
For much of 2020, my conversations with employers were around layoffs, furloughs, and terminations. With the uncertainty of the pandemic, many companies moved forward with mass layoffs and terminations. With businesses opening back up, individuals getting vaccinated, and more information about the virus, employers are bringing employees back and making new hires. With these are overall positive changes, there are also challenges with hiring or rehiring during a global pandemic. While there are the obvious complications associated with safety and COVID-19 compliance, many employers face complaints around who they rehired and who they didn't. Though employers are not required to reinstate employees they have laid off or terminated due to the pandemic; if they reinstate some employees and terminate others, their actions could come under scrutiny if they reflect a potentially discriminatory pattern. For example, suppose an employer laid off similarly situated men and women of all ages but only brings back the young men under forty. In that case, the company could face age and sex discrimination claims. Employers are particularly susceptible to these claims when they do not bring back otherwise qualified candidates without any history of poor performance or misconduct. Accordingly, employers should be mindful of who they are bringing back and why and look for potential problematic patterns that could appear discriminatory. Also, as a practical matter, in addition to avoiding a potential claim of discrimination, bringing back employees who are already trained and ready to hit the ground running can provide businesses with a leg up and allow a business to scale back up quickly. However, many individuals companies laid off have found other jobs. With many companies hiring simultaneously and many individuals still being cautious because of COVID, many employers are struggling to find qualified candidates. This is particularly true in the hospitality industry, where many employees, still reeling from the industry uncertainty caused by the pandemic, have left the industry in favor of jobs that are more likely to withstand the ebbs and flows of crisis. Main Takeaway: As many employers go into hiring mode, they should think strategically regarding whether they rehire, who they rehire, and how they attract new talent. Former employees who were laid off or terminated and aren't rehired may challenge the company's hiring decisions and claim they were discriminatory or retaliatory.
April 15, 2021
