Bristol-Myers Squibb whistleblower

U.S. State Department Contractor to Resolve Allegations of Improper Vetting with $5 Million Settlement

On September 14, 2017, Pacific Architects & Engineers Incorporated (PAE) settled a whistleblower lawsuit alleging the company did not follow proper vetting procedures for its personnel that performed and billed work to the U.S. State Department. The $5 million settlement resolves allegations without any determination of liability of contract violations.

PAE is a company originally incorporated in California in 1955. The company first served the rebuilding of Japan after WWII and has since grown to participate in projects and government contracts globally. In 2007, already a contractor with the U.S. State Department, PAE was assigned the task of training U.S. personnel in Afghanistan and conducting extensive background checks and documentation for those in high-risk positions. Reporting the names, nationalities and background information on contract employees in these positions was a requirement of the contract for work between PAE and the U.S. government.

After its investigation, the U.S. Justice Department alleged that “PAE was aware of these contractual requirements but did not comply with them for extended periods.”

Robert Palombo, the former PAE manager, filed this whistleblower lawsuit against his employer alleging that this was the case and that PAE continued billing for work done under the contract.

PAE, however, contends that “The invoices specifically identified the names of employees for whom the lawsuit alleges that requisite notice was not made. The employees whose background investigations were allegedly inadequate were not involved in any security incidents or injuries. The services called for under the contract were provided in full.”

Without admitting fault or liability, PAE has decided to settle these allegations of improper vetting by paying the U.S. government $5 million, $875,000 of which whistleblower Robert Palumbo is entitled to receive.

This post was written by Tycko & Zavareei Whistleblower Practice Group of Tycko & Zavareei LLP © 2017

For more legal analysis go to The National Law Review

Litigation After Devastation: The Legal Storm Surge

Bridges crumbling in Texas. Houses turned to toothpicks in the USVIs. Newly-formed rivers ravaging the streets in South Florida. The devastating destruction from the recent hurricanes that have pummeled the U.S. has uprooted many peoples’ homes and lives, but we have only begun to feel the impact of the surge.

Massive relief efforts have begun, national fundraising, news coverage, responsive legislation, and building codes to name a few. A litigation surge is swelling as well. We have seen several types of cases and class actions churn from a hurricane’s aftermath. Here are some of the types of cases, coverage issues, and expert needs you may see after the storm.

Property Damage and Meteorological Causation

Insurance companies insuring the Southern United States are bracing for the waves of claims that will soon be flooding in. Just as it was following Hurricanes Katrina, Ivan, and Sandy, the hotly-debated issue of whether the damage was caused by wind or water will be the likely focus. While most homeowner insurance policies will cover water damage that was caused by a roof or window that was compromised by wind and allowed water intrusion, most do not cover water that rises from the ground level and enters the home. Experts will be relied upon to determine how water got into a structure, even when it is entirely obliterated.

Insurance companies and attorneys will be looking for experts in meteorology, often with advanced degrees and testifying experience, who can opine on the types of weather conditions that might have existed at a given time in a given place (i.e., Key West when Hurricane Irma struck). The experts could come from academia or environmental institutes and societies. They will be asked to review various data points and speak on weather conditions at a particular time and place to support causation for insurance coverage. Structural engineers will also be needed, preferably with experience in standard insurance practices, procedures, and protocols in evaluating damage caused by hurricanes. They will need to have an understanding of insurance claims handling and will be asked to review various reports and data, some from other engineers, discussing damage caused to structures by the hurricane and opine as to whether or not the reports and data are accurate.

Structural Failures and Faulty Design/Construction

While many large, concrete commercial buildings and bridges are designed to withstand 150+ mph winds and flooding,  they can still be left severely damaged after a storm blows through. Structural failure of buildings, roofs, bridges, and roadways that were expected to withstand hurricane winds will lead to litigation over damage caused by the failure. Structural engineers with expertise in the types of structures at issue, likely licensed engineers, will be needed to examine damage patterns through photos, video, or via a post-storm on-scene inspection. They will also need to use meteorological wind information to determine the cause of the failure and the quality of the design or construction.

Class Actions for Coverage Determinations

Often, the core issues in insurance-related storm damage cases are similar across a wide span of policyholders. These cases will vary depending on the coverage matter at issue, but the most sought-after experts will be familiar with insurance claims standards, protocols, and policy interpretation. Construction experts may also be needed to opine on the necessity and extent of certain repairs required after a storm. Also, standard practices and interactions between contractors and insurance companies during the re-build process will come into question. Class actions may be filed as well, simply as placeholders to toll certain claims-filing deadlines or allow broader bad faith discovery against insurance companies who refuse to pay mass claims.

Litigation Over Price-Gouging

One of the worst scenarios to follow a storm is wide-scale price-gouging and scamming by companies trying to capitalize on the desperation and vulnerability of storm victims. Before the storm, many people preparing for power outages or evacuation will see unfair spikes in essentials such as water and gas. After the storm, shady contractors and tree-removers often flood in, lie about their licensing and credentials, and charge exorbitant fees while performing shoddy, haphazard work, or no work at all. Many states, including Florida, have made it a crime for any service provider to offer or sell essential commodities for an amount that “grossly exceeds the average price” during the thirty days following a declaration of emergency. In the days before Hurricane Irma’s approach, many reported price-gouging for essentials such as water, ice, batteries, and gas when thousands of Floridians were stocking up or evacuating. Class actions alleging price-gouging will likely occur following the storm. Experts in standard industry pricing, manufacture costs, and storm clean-up and repair may be called in to opine on the “average price” of certain essential commodities and post-storm services.

In the wake of Hurricanes Harvey and Irma, we are gearing up for the incumbent waves of litigation and expert requests we anticipate will follow. What types of cases, class actions, and expert needs are you expecting?

This post was written by Annie Dike of IMS ExpertServices, All Rights Reserved. © Copyright 2002-2017
For more legal analysis go to The National Law Review

Mississippi Gaming Commission’s Special Interim Commission Meeting: September 14, 2017

The Mississippi Gaming Commission held a Special Interim Meeting on Thursday, September 14, 2017, at 10:00 a.m. in the Biloxi office of the Mississippi Gaming Commission. Executive Director Allen Godfrey, Chairman Al Hopkins, and Commissioner Jerry Griffith were in attendance. The following matters were considered:

Riverboat Corporation of Mississippi d/b/a Golden Nugget Biloxi Hotel and Casino received approval of the following:

  1. Registration of Golden Nugget, Inc. as a Holding Company of Riverboat Corporation of Mississippi

  2. Registration of Landry’s Gaming, Inc. as a Holding Company of Riverboat Corporation of Mississippi

  3. Transfer of the Equity Interests or Securities of Riverboat Corporation of Mississippi

  4. Pledges of Equity Interests or Securities in Connection with the Credit Facility

  5. Imposition of Equity Restrictions Including Negative Equity Pledges in Connection with the Credit Facility

These approvals were in connection with a restructuring of the ownership of the Golden Nugget companies in order to facilitate the acquisition of the Houston Rockets NBA basketball team.

This post was written by Thomas B. Shepherd & Christopher S. Pace  of Jones Walker LLP © 2017
For more legal analysis go to The National Law Review

Check out the ABA’s Business, Human Rights, and Sustainability Sourcebook

Now available from the ABA: Business, Human Rights, and Sustainability Sourcebook

The Business, Human Rights and Sustainability Sourcebook addresses the intersection of human rights law with the conduct of business, in light of sustainability mandates and the UN Guiding Principles on Business and Human Rights.

This sourcebook can be used as a standalone reference, or combined into a set as a companion volume with the Center on Human Right’s International Human Rights Law Sourcebook and The International Humanitarian Law Sourcebook.

Available for purchase here.

Athletes and Employees Speak Out: Do Your Employment Practices Drop the Ball in Addressing Diversity, Controversial Speech, or Tensions at Work?

With the 2017-18 National Football League (NFL) regular season and National Basketball Association (NBA) pre-season underway, many spectators are excited to don their favorite players’ jerseys and cheer on their teams. Yet in recent years, many fans also find themselves equally entrenched in controversial debates that have little to do with who wins or loses the game.

Rather, these dialogues relate to the frequent media coverage over the alleged “blacklisting” of former San Francisco 49ers quarterback Colin Kaepernick after he took a knee during the national anthem last season to protest police brutality against minorities, related demonstrations held in front of the NFL’s corporate offices, and actions of solidarity on football fields across the country by athletes like Marshawn Lynch and members of the Cleveland Browns virally trending with the hashtag #ImWithKap. Most recently ESPN sports host, Jemele Hill, drew the attention of the White House and placed her own employment in the cross-hairs by stating in a series of tweets that President “Donald Trump is a white supremacist who has largely surrounded himself w/ other white supremacists” and is “unqualified and unfit to president.” and in In response, the White House press secretary called Hill’s statements a “fireable offense.”

As athletes and other public figures use their careers to bring awareness to social movements and other world events such as the Charlottesville tragedy, the implications of social movements on employee relations remains a hot topic that poses challenging issues for employers related to diversity, inclusion, and free speech. Here are a few of those related topics and some practical suggestions of ways employers can address these issues in the workplace:

Does the First Amendment Apply to Athletes or Employees Generally?

People often mention their First Amendment guarantees without understanding that this right is not without certain limitations, especially in the employment context. Specifically, while this protection covers federal, state, and local government employees, courts have held that First Amendment protections do not generally extend to the employees of private-sector employers.

Does Social Media Change Things?

As evidenced by legendary athletes Dale Earnhardt Jr.’s and Kareem Abdul-Jabbar’s Twitter posts in response to the Charlottesville tragedy, many athletes and employees use social media to vocalize their positions on social issues. The National Labor Relations Board (NLRB) has taken on cases where employers have fired or taken disciplinary actions against employees who have engaged in certain protected speech via various social media platforms. On the agency’s website, the NLRB states: “The National Labor Relations Act protects the rights of employees to act together to address conditions at work…. [t]his protection extends to certain work-related conversations conducted on social media”.

This raises the question: Can an employee be disciplined for making racially- or politically- charged speech via social media?

The standard that the NLRB considers is whether the employee is engaging in “protected concerted activity” involving the terms and conditions of employment. Courts have used a multi-factor assessment to determine whether discipline or discharge violates Section 8(a)(1) of the NLRA, which evaluates whether:

  1. the activity in which the employee was engaged was “concerted” within the meaning of Section 7 of the NLRA;
  2. the employer knew of the concerted nature of the employee’s activity;
  3. the concerted activity was protected by the NLRA; and
  4. the discipline or discharge was motivated by the employee’s protected, concerted activity.

If the employer alleges that an employee engaged in misconduct during otherwise protected activity, the NLRB generally considers four factors in determining whether speech is protected:

  1. the place of the discussion;
  2. the subject matter of the discussion;
  3. the nature of the employee’s outburst; and
  4. whether the outburst was, in any way, provoked by an employer’s unfair labor practice

In many instances, purely individual speech about a social or political topic that in no way involves an employee’s work conditions will not be protected by the NLRA. Because of the fact-specific nature of the inquiry, a determination must be made on a case-by-case basis.

So What Now?

Even employers not covered under the First Amendment and NLRA’s protections are finding themselves examining some weighty questions. For example:

  • Although there may be legally sanctioned limitations to free speech in the workplace, does the modern day work culture require employers to facilitate an employment experience that goes beyond what the law requires?
  • Are employers tasked with creating a workplace that is inclusive but also allows people to express unique (and sometimes controversial) viewpoints on social or political issues?
  • If so, how does this work and does it ultimately help the business to thrive long term?

Last year the NBA and the NBA’s Players Association (NBAPA) appeared to have answered this question in the affirmative and implemented this approach with its players. Despite having player agreements with language that can, in some cases, regulate players’ conduct, NBA athletes have expressed their positions on social issues both on and off the court.  For example, during pre-game warm ups LeBron James wore a t-shirt stating “I Can’t Breathe,” bringing awareness to the death of Eric Garner. Similarly, Carmelo Anthony and Dwyane Wade made a social action appeal during the 2016 ESPY awards.

Many players have been so outspoken that last year NBA Commissioner Adam Silver and NBPA Executive Director Michele Roberts penned a letter noting that both organizations were addressing the best ways they could move forward in “developing substantive ways . . . to come together and take meaningful action.” The letter noted that, in recent weeks, many teams had reached out to the organizations to figure out how they could “create positive change” and garner support with team efforts.

Employers may want to take note of the ways that the NBA and the NBAPA are attempting to address this topic. Additionally, employers may also want to review the following considerations.

Be Aware of Blacklisting Laws

Many states have blacklisting laws that, generally, prohibit employers from limiting former employees’ opportunities. The following are a handful of state laws regulating blacklisting:

  • North Carolina law prohibits employers from preventing or attempting to prevent any “discharged employee from obtaining employment with any other person, company, or corporation” whether by verbal or written action.
  • The California Labor Code also prohibits any person from preventing or attempting “to prevent the former employee from obtaining employment” by misrepresentation and punishes any manager or employee who knowingly “fails to take all reasonable steps to prevent” such action.
  • Indiana law makes it illegal for an employer to prevent a “discharged employee from obtaining employment with any other person” or employer.
  • Florida law makes it illegal for two or more people to “agree, conspire, combine or confederate together for the purpose of preventing any person from procuring work . . .  or to cause the discharge of any person.” The law also prohibits verbal, written, or printed communication that “threaten[s] any injury to life, property or business of any person for the purpose of procuring the discharge of any worker . . . or to prevent any person from procuring work”.
  • New York Labor Law says it is an unfair labor practice “[t]o prepare, maintain, distribute or circulate any blacklist of individuals for the purpose of preventing any of such individuals from obtaining or retaining employment because of the exercise by such individuals of any of the rights guaranteed by section seven hundred three,” which discusses the right to join a labor organization or to bargain collectively.
  • Arizona law explicitly defines the term “blacklist” as “any understanding or agreement whereby the names of any person or persons, list of names, descriptions or other means of identification shall be spoken, written, printed or implied for the purpose of being communicated or transmitted between two or more employers of labor, or their bosses, foremen, superintendents, managers, officers or other agents, whereby the laborer is prevented or prohibited from engaging in a useful occupation. Any understanding or agreement between employers, or their bosses, foremen, superintendents, managers, officers or other agents, whether written or verbal, comes within the meaning of this section and it makes no difference whether the employers, or their bosses, foremen, superintendents, managers, officers or other agents, act individually or for some company, corporation, syndicate, partnership or society and it makes no difference whether they are employed or acting as agents for the same or different companies, corporations, syndicates, partnerships or societies.”

Be Proactive

Do not wait for your company to become the next trending hashtag on social media as a result of a workplace controversy! Instead, be prepared and take proactive measures in the event employees take a stand on controversial issues. Some options are to proactively address and be sensitive to diversity issues, and to recognize and understand the benefits of workforce diversity both as a source of varied ideas and a competitive advantage. Employers may also want to consider hiring a Chief Diversity and Inclusion Officer or diversity and inclusion team responsible for addressing equity issues.

Be Current

Consider reviewing your employee handbooks, in addition to contracts you might have with individual employees (or athletes) and third parties to ensure your company’s policies regarding diversity and inclusion, nondiscrimination and harassment, and professional development are up to date. Employers may also want to consider evaluating successes and areas for growth in the following areas:

Finally, employers may want to examine records to determine whether all employees, especially management employees, have participated in appropriate diversity and inclusion trainings, particularly on implicit or unconscious bias.

Be Careful

Employer-created bans on any socially- or politically-related speech rarely if ever actually work and may create exposure to liability under the First Amendment, the NLRA, or state-specific laws. Rather than imposing an outright ban on certain conduct, employers may want to slow down and engage in careful thought at the outset prior to taking any action on behalf of the organization. Employers may also find it beneficial to acknowledge that what happens in the world impacts the workplace. Accordingly, employers may want to develop affinity or employee resource groups, and/or maintain a diversity committee that facilitates well-thought-out inclusion initiatives. With many issues at play from reducing the risk of unlawful discrimination charges to preventing social media reputational harm, planning ahead may help to avoid potential risks.

This post was written by Karla Turner Anderson & Dawn T. Collins of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved. © 2017
For more Labor & Employment legal analysis go to The National Law Review
Pharmaceutical Issues

Worried About Fake News? You Should Really Worry About Fake Drugs

While the concept of “fake news” continues to trigger Twitter followers and grab headlines, the trade in counterfeit drugs is a worldwide problem of significant scale.  This article discusses the problem and talks about some things trademark owners are doing to address the public safety issues posed by fake drugs.

The Problem.

Trademark counterfeiting?  Most think of fake Rolex watches sold on city street corners or faux designer purses sold in suburban kitchens.  While knock-off luxury goods may seem harmless, the economic harm inflicted on legitimate businesses—and the workers they employ—is enormous.  The Federal Bureau of Investigation estimates that the dollar value of counterfeit goods sold in the U.S. at $200-250 billion annually.  Many of North Carolina’s leading industries, including tobacco, furniture, apparel and pharmaceuticals, are among the most frequent targets of trademark counterfeiting. Also, according to Interpol, trademark counterfeiting often provides for a source of income and reliable import channel for those with other nefarious purposes, such as illegal drug or human trafficking and potentially even terror activities.

In addition to these very negative economic consequences, there is a particular level of harm associated with certain kinds of trademark counterfeiting.  Counterfeit goods aren’t subject to the same regulatory standards and safety inspections as items produced by legitimate manufacturers. So, in areas of manufacture where quality control is important, counterfeit products fall short.  Consider, for example, the potential harm that could be caused by substandard, bogus automobile tires or airplane parts.

Counterfeit pharmaceutical drugs are clearly an area where public safety concerns are paramount.  Counterfeit medicines have been found in all areas of the globe, including the highly regulated U.S. market, and extend to medicines, vaccines, testing and diagnostic equipment, and other medical devices.  Both branded and generic pharmaceutical products can be falsified.  And sales are not just limited to the black market—such products make their way to hospitals and pharmacies, often through internet sales trade channels.

Lifestyle or “popular” drugs are often counterfeited, and there have been recent increases in cosmetic, weight loss and opioid drugs.  However, such drugs are not limited to such trends—counterfeit malaria vaccines, cholesterol medications and cancer treatments can also be found in the U.S.  The World Health Organization (WHO) estimates that an average of up to 10% of medicines are counterfeit, and in developing countries, that percentage is considerably higher.

The Center for Medicine in the Public Interest estimates the annual worldwide dollar value of counterfeit pharmaceuticals at $200 billion annually and rising. Sadly, the damage is far greater than lost sales. WHO estimates that approximately 200,000 people die each year as the result of ineffective counterfeit anti-malarial drugs.

Counterfeit medicines also may cause adverse affects or allergic reactions, and they may not effectively treat the ailment for which prescribed.  They may promote drug resistant disease strains or contain no active ingredient, the wrong active ingredient, or the incorrect strength (too much or too little) or dosage of the intended ingredient.  According to a WHO investigation, approximately 1/3 of such drugs contain no effective ingredient.  Given the lack of inspection of counterfeit manufacturing facilities, such products are often produced under non-sterile circumstances, resulting in bacterial or other contamination.  Clearly, the ways in which counterfeit drugs can cause serious negative patient outcomes are extensive and extreme.

Combating the Problem.

Drug companies, and their attorneys and security departments, take a multi-pronged approach to combating counterfeiting.  Many of these efforts are used to combat counterfeiting generally, but some have been developed with particular focus toward the nuances of the counterfeit pharmaceutical market.

The counterfeiting problem can appear daunting, given an array of unknown manufacturing sources, the breadth of possible sales outlets, and the strong consumer preference for the “cheap but name brand” combination. Successful anti-counterfeiting practices do not generally follow a reactive “Whack-A-Mole” approach, attempting to squelch every low-level advertisement or email blast that comes out. Rather, systematic and strategic prosecution, akin to practices used in the intelligence community, is preferred. Investigations of networks and relationships, rather than merely products and sellers, can help identify high-payoff targets, the disruption of which can have positive effects across several echelons of the counterfeit trade. Focusing limited enforcement resources on valuable choke points which contribute to an ecosystem response can often be the most fruitful and strategic approach.

Counterfeit pharmaceuticals in particular, given their specific methods of typical advertisement and sale, are prone to certain forms of interdiction over others. It is well known that counterfeit pharmaceuticals are advertised heavily on both internet ads and email “spam” messages, all of which attempt to direct a prospective purchaser to a product-ordering website. Attempting to interdict the advertising messages, which are often sent by botnets or third-parties through a referral-affiliate relationship, or to shut down specific websites, is a losing proposition. This is the case because there are hundreds of thousands or more of each, and the costs to re-establish a confiscated website are negligible compared to the significant enforcement costs. However, academic researchers working with industry and enforcement contacts identified several potential chokepoints on which these sorts of pharmaceutical sales pathways rely. See Dharmdasani et al., “Priceless: The Role of Payments in Abuse-advertised Goods,” CCS ’12, October 16–18, 2012, Raleigh, N.C.  One key chokepoint relationship for online transactions is a seller’s host bank, nearly always non-U.S. and non-EU, that is willing to accept abusive credit card transactions related to these unlawful goods from card processors such as Visa and MasterCard.

Pharmaceutical

Nearly all online counterfeit pharmaceutical revenue can flow through these concentrated banking relationships, and researchers discovered that intercepting just one or two of these banking relationships, and seizing related funds, could have ripple effects disrupting thousands of drug transaction websites and referral affiliates. For example, a 2011 study determined that across 95% of spam e-mail for pharmaceuticals and similar goods, only three acquiring bank institutions were used. Id. This research demonstrates a guiding principal of anti-counterfeiting efforts: enforcement is most successful where the “termination cost [to the counterfeiter] is inevitably far higher— in fines, in lost holdback, in time and in opportunity cost—than the cost of the intervention itself [by the rights holder]. … [R]elatively concentrated actions with key . . .  institutions can have outsized impacts.” Id.

Targeted investigations and enforcement are only one aspect of a comprehensive anti-counterfeiting approach. Successful rights holders employ a broad-based strategy, involving secured supply chain management, thorough technology and distribution agreements with market partners, and high-tech security solutions such as secure packaging, microchips, holograms, and the like. The combination of many of these controls can make enforcement actions easier and more productive, and thus reduce the prevalence and success of counterfeit competitors. In addition, it is important to inform consumers and retailers about both the dangers of counterfeits and the value of accessing authentic products. Pharmaceutical companies should engage in advertising to alert the marketplace to the dangers of counterfeit pharmaceuticals and to also assist others in identifying counterfeit drugs – including examination of packaging and medicines for quality, condition, spelling and grammar; and checking manufacturing and expiration dates and batch numbers on both exterior and interior packaging.

The problem of fake drugs is in fact very real news and companies here in North Carolina and around the world are taking steps to defend their brands and protect their customers in the marketplace.

Authentic Vial                Counterfeit Vial

Botox Authentic    Fake Botox Vial

This article originally was published in the August 2017 edition of the Newsletter of the Board of Legal Specialization, a publication of the North Carolina State Bar.

This post was written by Sarah Anne Keefe & Stephen Shaw of Womble Carlyle Sandridge & Rice, PLLC. Copyright © 2017. All Rights Reserved.
For more Intellectual Property Law legal analysis go to The National Law Review

Federal Laws Do Not Preempt Connecticut Law Providing Employment Protections to Medical Marijuana Users

Connecticut employees using medical marijuana for certain debilitating medical conditions as allowed under Connecticut law for “qualified users” are protected under state law from being fired or refused employment based solely on their marijuana use. Employers who violate those protections risk being sued for discrimination, according to a recent federal district court decision.

Background

In Noffsinger v. SSC Niantic Operation Company (3:16-cv-01938; D. Conn. Aug. 8, 2017), the federal district court ruled that “qualified users” are protected from criminal prosecution and are not subject to penalty, sanction or being denied any right or privilege under federal laws, such as the Controlled Substances Act (CSA), the Americans with Disabilities Act (ADA) and the Food, Drug and Cosmetic Act (FDCA), because the federal laws do not preempt Connecticut’s Palliative Use of Marijuana Act (PUMA).

PUMA prohibits employers from refusing to hire, fire, penalize, or threaten applicants or employees solely on the basis of being “qualified users” of medical marijuana. PUMA exempts patients, their caregivers and prescribing doctors from state penalties against those who use or distribute marijuana, and it explicitly prohibits discrimination by employers, schools and landlords.

In Noffsinger, Plaintiff was employed as a recreational therapist at Touchpoints, a long term care and rehabilitation provider, and she was recruited for a position as a director of recreational therapy at Bride Brook, a nursing facility. After a phone interview, she was offered the position at Bride Brook and accepted the offer, and she was told to give notice to Touchpoints, which she did to begin working at Bride Brook within a week. Plaintiff scheduled a meeting to complete paperwork and routine pre-employment drug screening for Bride Brook, and at the meeting, she disclosed her being qualified to use marijuana for PTSD under PUMA. The job offer was later rescinded because she tested positive for cannabis; in the meantime, Plaintiff’s position at Touchpoints was filled, so she could not remain employed there.

Litigation

Plaintiff sued for violation of PUMA’s anti-discrimination provisions, common law wrongful rescission of a job offer in violation of public policy and negligent infliction of emotional distress. Defendant filed a Rule 12(b)(6) pre-answer motion to dismiss based on preemption under CSA, ADA, and FDCA. The federal court denied the motion and ruled that PUMA did not conflict with the CSA, ADA or FDCA, because those federal laws are not intended to preempt or supersede state employment discrimination laws. The court concluded that CSA does not make it illegal to employ a marijuana user, and it does not regulate employment practices; the ADA does not regulate non-workplace activity or illegal use of drugs outside the workplace or drug use that does not affect job performance; and the FDCA does not regulate employment and does not apply to PUMA’s prohibitions.

The court’s decision is notable in that it is the first federal decision to determine that the CSA does not preempt a state medical marijuana law’s anti-discrimination provision, and reaches a different result than the District of New Mexico, which concluded that requiring accommodation of medical marijuana use conflicts with the CSA because it would mandate the very conduct the CSA proscribes. The Noffsinger decision supplements a growing number of state court decisions that have upheld employment protections for medical marijuana users contained in other state statutes. These decisions stand in stark contrast to prior state court decisions California, Colorado, Montana, Oregon, and Washington that held that decriminalization laws – i.e., statutes that do not contain express employment protections – do not confer a legal right to smoke marijuana and do not protect medical marijuana users from adverse employment actions based on positive drug tests.

Key Takeaways

Employers may continue to prohibit use of marijuana at the workplace; and qualified users who come to work under the influence, impaired and unable to perform essential job functions are subject to adverse employment decisions. Employers in Connecticut, however, may risk being sued for discrimination for enforcing a drug testing policy against lawful medical marijuana users.  In those cases, employers may have to accommodate off-duty marijuana use, and may take disciplinary action only if the employee is impaired by marijuana at work or while on duty.

It remains unclear how employers can determine whether an employee is under the influence of marijuana at work. Unlike with alcohol, current drug tests do not indicate whether and to what extent an employee is impaired by marijuana. Reliance on observations from employees may be problematic, as witnesses may have differing views as to the level of impairment, and, in any event, observation alone does not indicate the source of impairment. Employers following this “impairment standard” are advised to obtain as many data points as possible before making an adverse employment decision.

All employers – and particularly federal contractors required to comply with the Drug-Free Workplace Act and those who employ a zero-tolerance policy – should review their drug-testing policy to ensure that it: (a) sets clear expectations of employees; (b) provides justifications for the need for drug-testing; and (c) expressly allows for adverse action (including termination or refusal to hire) as a consequence of a positive drug test.

Additionally, employers enforcing zero-tolerance policies should be prepared for future challenges in those states prohibiting discrimination against and/or requiring accommodation of medical marijuana users. Eight other states besides Connecticut have passed similar medical marijuana laws that have express anti-discrimination protections for adverse employment actions: Arizona, Delaware, Illinois, Maine, Nevada, New York, Minnesota and Rhode Island. Those states may require the adjustment or relaxation of a hiring policy to accommodate a medical marijuana user. Additionally, courts in Massachusetts and Rhode Island have permitted employment discrimination lawsuits filed by medical marijuana users to proceed.

Finally, employers should be mindful of their drug policies’ applicability not only to current employees, but also to applicants.

This post was written by David S. Poppick & Nathaniel M. Glasser of Epstein Becker & Green, P.C.  ©2017. All rights reserved.
For more Health Care Law legal analysis go to The National Law Review

DOE Announces $8.8 Million In Funding For Algae Technology Innovation Projects

On September 8, 2017, the U.S. Department of Energy (DOE) selected an additional four Productivity Enhanced Algae and Toolkits (PEAK) projects to receive up to $8.8 million.  The projects aim to develop high-impact tools and techniques that will increase the productivity of algae organisms to reduce the costs of producing algal biofuels and bioproducts.  In total, DOE has awarded over $16 million in funding to the initiative.

The project winners include:

  • Colorado School of Mines, in partnership with Global Algae Innovations, Pacific Northwest National Laboratory, and Colorado State University, which will use advanced directed evolution approaches in combination with high-performance, custom-built, solar simulation bioreactors to improve the productivity of robust wild algal strains;
  • University of California, San Diego, which will work with Triton Health and Nutrition, Algenesis Materials, and Global Algae Innovations on the development of genetic tools, high-throughput screening methods, and breeding strategies for green algae and cyanobacteria, targeting robust production strains;
  • University of Toledo, in partnership with Montana State University and the University of North Carolina, which will cultivate microalgae in high-salinity and high-alkalinity media to achieve productivities without needing to add concentrated carbon dioxide, and deliver molecular toolkits, including metabolic modeling combined with targeted genome editing; and
  • Lawrence Livermore National Laboratory, which will ecologically engineer algae to encourage growth of bacteria that efficiently remineralize dissolved organic matter to improve carbon dioxide uptake and simultaneously remove excess oxygen.
This post was written by  Kathleen M. Roberts of Bergeson & Campbell, P.C. ©2017
For more Environmental & Energy legal analysis go to The National Law Review
Swiss Privacy Shield

So…Everyone’s Been Compromised? What To Do In The Wake of the Equifax Breach

By now, you’ve probably heard that over 143 million records containing highly sensitive personal information have been compromised in the Equifax data breach. With numbers exceeding 40% of the population of the United States at risk, chances are good that you or someone you know – or more precisely, many people you know – will be affected. But until you know for certain, you are probably wondering what to do until you find out.

To be sure, there has been a lot of confusion. Many feel there was an unreasonable delay in reporting the breach. And now that it has been reported, some have suggested that people who sign up with the Equifax website to determine if they were in the breach might be bound to an arbitration clause and thereby waive their right to file suit if necessary later (although Equifax has since said that is not the case). Others have reported that the “personal identification number” (PIN) provided by Equifax for those who do register with the site is nothing more than a date and time stamp, which could be subject to a brute-force attack, which is not necessarily reassuring when dealing with personal information. Still others have reported that the site itself is subject to vulnerabilities such as cross-site scripting (XSS), which could give hackers another mechanism to steal personal information. And some have even questioned the validity of the responses provided by Equifax when people query to see if they might have been impacted.

In all the chaos, it’s hard to know how to best proceed. Fortunately, you have options other than using Equifax’s website.

1. Place a Credit Freeze

Know that if you are a victim of the breach, you will be notified by Equifax eventually. In the meantime, consider placing a credit freeze on your accounts with the three major credit reporting bureaus. All three major credit reporting bureaus allow consumers to freeze their credit reports for a small fee, and you will need to place a freeze with each credit bureau. If you are the victim of identity fraud, or if your state’s law mandates, a credit freeze can be implemented without charge. In some states, you may incur a small fee. Lists of fees for residents of various states can be found at the TransUnionExperian, and Equifax websites. Placing a freeze on your credit reports will restrict access to your information and make it more difficult for identity thieves to open accounts in your name. This will not affect your credit score but there may be a second fee associated with lifting a credit freeze, so it is important to research your options before proceeding. Also, know that you will likely face a delay period before a freeze can be lifted, so spur-of-the-moment credit opportunities might suffer.

Here is information for freezing your credit with each credit bureau:

Equifax Credit Freeze

  • You may do a credit freeze online or by certified mail (return receipt requested) to:

            Equifax Security Freeze

            P.O. Box 105788

            Atlanta, GA 30348

  • To unfreeze, you must do a temporary thaw by regular mail, online or by calling 1-800-685-1111 (for New York residents call 1-800-349-9960).

Experian Credit Freeze

  • You may do a credit freeze online, by calling 1-888-EXPERIAN (1-888-397-3742) or by certified mail (return receipt requested) to:

            Experian

            P.O. Box 9554

            Allen, TX 75013

  • To unfreeze, you must do a temporary thaw online or by calling 1-888-397-3742.

TransUnion Credit Freeze

  • You may do a credit freeze online, by phone (1-888-909-8872) or by certified mail (return receipt requested) to:

            TransUnion LLC

            P.O. Box 2000

            Chester, PA 19016

  • To unfreeze, you must do a temporary thaw online or by calling 1-888-909-8872.

After you complete a freeze, make sure you have a pen and paper handy because you will be given a PIN code to keep in a safe place.

2. Obtain a Free Copy of Your Credit Report

Consider setting up a schedule to obtain a copy of your free annual credit report from each of the reporting bureaus on a staggered basis. By obtaining and reviewing a report from one of the credit reporting bureaus every three or four months, you can better position yourself to respond to unusual or fraudulent activity more frequently. Admittedly, there is a chance that one of the reporting bureaus might miss an account that is reported by the other two but the benefit offsets the risk.

3. Notify Law Enforcement and Obtain a Police Report

If you find you are the victim of identity fraud (that is, actual fraudulent activity – not just being a member of the class of affected persons), notify your local law enforcement agency to file a police report. Having a police report will help you to challenge fraudulent activity, will provide you with verification of the fraud to provide to credit companies’ fraud investigators, and will be beneficial if future fraud occurs. To that end, be aware that additional fraud may arise closer to the federal tax filing deadline and having a police report already on file can help you resolve identity fraud problems with the Internal Revenue Service if false tax returns are filed under your identity.

4. Obtain an IRS IP PIN

Given the nature of the information involved in the breach, an additional option for individuals residing in Florida, Georgia, and Washington, D.C. is to obtain an IRS IP PIN, which is a 6-digit number assigned to eligible taxpayers to help prevent the misuse of Social Security numbers in federal tax filings. An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return. When a taxpayer has an IP PIN, it prevents someone else from filing a tax return with the taxpayer’s SSN.

If a return is e-filed with a taxpayer’s SSN and an incorrect or missing IP PIN, the IRS’s system will reject it until the taxpayer submits it with the correct IP PIN or the taxpayer files on paper. If the same conditions occur on a paper filed return, the IRS will delay its processing and any refund the taxpayer may be due for the taxpayer’s protection while the IRS determines if it is truly the taxpayer’s.

Information regarding eligibility for an IRS IP PIN and instructions is available here and to access the IRS’s FAQs on the issue, please go here.

Conclusion

Clearly, the Equifax breach raises many issues about which many individuals need to be concerned – and the pathway forward is uncertain at the moment. But by being proactive, being cautious, and taking appropriate remedial measures available to everyone, you can better position yourself to avoid fraud, protect your rights, and mitigate future fraud that might arise.

 This post was written by Justin L. Root Sara H. Jodka of Dickinson Wright PLLC © Copyright 2017
For more legal news go to The National Law Review

Trump Administration Issues New Guidance for Automated Driving Systems

The National Highway Traffic Safety Administration (NHTSA) announced yesterday the Trump administration’s first significant guidance concerning autonomous vehicles and Automated Driving Systems (ADS).

The new voluntary guidelines, titled Automated Driving Systems: A Vision for Safety, are intended to encourage innovation in the industry and are being touted as the administration’s “new, non-regulatory approach to promoting the safe testing and development of automated vehicles.” One of the most important aspects of these guidelines is the NHTSA’s clarification of its view of the delineation between the roles of the states and the federal government with respect to ADS technology.

The new guidelines replace the Federal Automated Vehicle Policy (FAVP), which was released by the Obama administration in 2016A Vision for Safety comprises voluntary guidance for vehicle manufacturers, best practices for state legislatures when drafting ADS legislation, and a request for further comment.

Autonomous-vehicle manufacturers are asked to undertake a voluntary self-assessment addressing 12 safety elements discussed in the new guidance. That is a slight departure from the FAVP, which detailed a 15-point safety assessment. The safety self-assessment remains voluntary, and NHTSA emphasizes that there is no mechanism to compel manufacturers to participate. The agency also stated that the testing or deployment of new ADS technologies need not be delayed to complete a self-assessment.

In what may be the most significant component of the guidance, NHTSA made clear its role as the primary regulator of ADS technology by “strongly encourage[ing] States not to codify th[e] Voluntary Guidance . . . as a legal requirement for any phases of development, testing, or deployment of ADSs.”

Further acknowledging the potential problems associated with a patchwork of state laws, the agency expressed its belief that “[a]llowing NHTSA alone to regulate the safety design and performance aspects of ADS technology will help avoid conflicting Federal and State laws and regulations that could impede deployment.” States are instead tasked by A Vision for Safety with regulating licensing of human drivers, motor vehicle registration, traffic laws, safety inspections, and insurance.

The new guidance comes just one week after the House of Representatives passed the SELF-DRIVE Act designed to eliminate legal obstacles that could interfere with the deployment of autonomous vehicles. However, as NHTSA and Congress are seeking to speed up ADS development by removing regulatory and legal impediments, it is noteworthy that on the same day NHTSA announced A Vision for Safety, the National Transportation Safety Board (NTSB) called for NHTSA to require automakers to install “system safeguards to limit the use of automated vehicle systems to those conditions for which they were designed.”

In an abstract of its forthcoming final report on the 2016 fatal crash involving a Tesla Model S operating in semi-autonomous mode, the NTSB concluded that “operational limitations” in the Tesla’s system played a major role in the fatal crash and that the vehicle’s semi-autonomous system lacked the safeguards necessary to ensure that the system was not misused. These recent developments only underscore the uncertainty facing the industry as regulators attempt to keep pace with fast-developing technology.

This post was written by Neal Walters and Casey G. Watkins of  Ballard Spahr LLP Copyright ©
For more legal analysis go to The National Law Review