Transparency is the Best Policy: Teetering on the Edge of Misleading

In Chatham Asset Management, LLC v. Papanier, C.A. No. 2017-008-AGB (Del. Ch. Dec. 22, 2017), the Delaware Court of Chancery found that the plaintiffs, Chatham Asset Management, LLC, Chatham Fund, LP, and Chatham Asset High Yield Master Fund, Ltd. (collectively, “Chatham”), pleaded sufficient facts to avoid dismissal of a claim that the director defendants of Twin River Worldwide Holdings, Inc. (“Twin River”) breached their fiduciary duties by making materially false and misleading statements in tender offer materials.

This action arose from Twin River’s 2016 offer to purchase up to 250,000 shares of its issued and outstanding common stock for $80 per share (the “Tender Offer”), a $10 premium to the then-trading price of Twin River’s stock. Twin River’s stock did not trade on a national stock exchange, but rather on institutional trading desks.  The offer to purchase stated: “[t]he purpose of the offer is to return cash to [Twin River’s] shareholders” and that Twin River’s officers and directors did not “currently intend” to participate in the Tender Offer but that they may sell their shares “from time to time.” The Tender Offer launched on November 15, 2016, and expired one month later.  Chatham tendered into the Tender Offer because it allegedly had “no choice” given a 15% regulatory cap on its holdings in Twin River which might be surpassed if the number of all issued and outstanding shares of Twin River’s stock decreased while the number of shares of Twin River’s common stock owned by Chatham remained constant.  Within weeks of the Tender Offer closing, the defendant directors and officers of Twin River allegedly shopped, but did not sell, approximately 125,000 of their Twin River’s shares.  In the months after the Tender Offer closed, Twin River’s stock traded between $80 and $82 per share.

In this action, Chatham alleged, among other things, that Twin River’s directors breached their fiduciary duties by making false and misleading statements in the offer to purchase. Chatham alleged that the directors’ true intentions behind the Tender Offer was to cause an increase in the price of Chatham’s stock price and to sell at or near the increased price shortly after the Tender Offer closed.

The Court found that it was reasonably conceivable that the Twin River directors breached their fiduciary duties by misstating the reasons for the Tender Offer and their intention of selling stock. Quoting a federal court, the Court writes, “stating an outcome as a possibility, that in fact is not a possibility, is misleading.” Here, the Court found it plausible that the tender offer disclosure gave the impression that the directors were not committed to selling any shares even though substantial steps were allegedly taken shortly after the tender offer to sell a considerable amount of stock. However, the Court noted that Chatham would likely be unable to establish reliance and causation to recover compensatory damages for its disclosure claim. According to the Court, any damages suffered by Chatham were not likely related to the alleged disclosure violations but rather from the regulatory cap on its holdings in Twin River.

The case serves as a reminder of the importance for officers and directors to ensure that every disclosure to stockholders contains all material facts that may impact an investor’s decision as the slightest deviation from complete transparency could result in the claims brought against them not being dismissed.

Copyright 2018 K & L Gates

This article was written by Lisa R. Stark and Rashida Stevens of K&L Gates

New Head of MSHA to Hold First Quarterly Stakeholder Conference Call

On February 12, 2018, new Assistant Secretary David G. Zatezalo will hold his first quarterly stakeholder/training call since being confirmed as head of the agency. This stakeholder call is one of the first formal opportunities for the mining community to interact directly with Mr. Zatezalo since his confirmation, providing a glimpse into what can be expected from the agency in terms of inspection practices and rulemaking.  During his confirmation process, Mr. Zatezalo mentioned compliance assistance, education, and increased usage of technology as areas he plans to emphasize as Assistant Secretary.  Mr. Zatezalo may mention new initiatives in these areas during the call, or respond to questions regarding future initiatives.

The upcoming call will discuss recent fatalities and close-calls, including the topics of seat belt usage and general power haulage safety, as those areas were related to four fatalities in 2017. According to an MSHA press release, speakers will further discuss the latest on the proposed workplace examination rule, currently slated to take effect on March 2, 2018.  However, with several postponements of the effective date occurring already, the mining community would not be surprised to see an additional delay in the March 2, 2018 effective date.  This topic is particularly interesting to the stakeholders, as the general consensus is that rulemaking under the new MSHA may be significantly slower that under Joe Main’s agency.  The call will also touch on the approaching deadline for proximity detection installation on continuous mining machines.

Jackson Lewis P.C. © 2018
This article was written by Justin M. Winter of Jackson Lewis P.C.

New Tax Law Affects the Purchase and Operation of New or Used Aircraft

The 2017 Tax Cuts and Jobs Act (the Act) significantly affects business aviation. The full impact of changes to bonus depreciation, Federal Excise Tax exemptions, entertainment deductions, and the repeal of 1031 exchanges for personal property are unknown. However, based upon the language of the Act and current law, the impact on tax planning is immediate. We anticipate either a Technical Correction Act and/or additional guidance to be issued by the IRS containing certain issues as noted below.

1. Temporary 100% Expensing For Certain Business Assets

The Act allows for 100% deduction for business expenses (such as the purchase of an aircraft) placed into service after September 27, 2017, on the condition that the taxpayer has not entered into a written binding contract for the acquisition of an aircraft prior to September 27, 2017. See the Act, §13201(h). Note: The taxpayer may elect out of 100% expensing and depreciate an aircraft in accordance with other available depreciation methods.

The former law allowed for a 50% first year bonus depreciation (although the Act technically uses the term “increased expensing,” for the purposes of this alert we will use the common phrase of bonus depreciation) for the purchase of new aircraft, on the condition that an aircraft is used for a qualified business use. The Act allows for temporary 100% bonus depreciation for aircraft acquired and placed into service after September 27, 2017, and before January 1, 2023. (§13201(a)(2)), so long as the taxpayer had not either entered into a binding contract for the acquisition of an aircraft such or used an aircraft at any time prior to September 28, 2017. Further, the Act extends bonus depreciation to the purchase of used aircraft. The Act includes a transition rule that allows the taxpayer to elect a 50% allowance instead of a 100% allowance. (§13201).

In order to qualify for the bonus depreciation under the Act, a taxpayer must still comply with the requirements of §168(k) of the Internal Revenue Code. Specifically, you must be able to show that an aircraft meets the primary business use test during the year you intend to take the 100% bonus depreciation. To summarize broadly, for purposes of meeting the primary business use test, you must show that at least 25% of the time flown was for ordinary and necessary business use. If there is any personal non-entertainment or personal entertainment use of an aircraft, you must impute income to an employee. As long as you impute that income (and 25% of the flight time qualifies as ordinary and business), under the tax code you will qualify as having 100% business use for the purpose of bonus depreciation.

The Act provides that property are not treated as acquired after September 27, 2017, if a written binding contract for its acquisition was entered into before September 28, 2017. (§13201(h)(1)).

In short, a contract is binding

  • The contract is enforceable under state law against the taxpayer or a predecessor; and
  • The contract does not limit damages to a specified amount (for example, by use of a liquidated damages provision).

(Reg. 1.168(k)-1(b)(4)(ii)(A))

A contract that limits damages to an amount equal to or less than 5% of the total contract price is not treated as limiting damages to a specified amount. In determining whether a contract limits damages, the fact that there may be little or no damages because the contract price does not significantly differ from fair market value isn’t taken into account. A contract that provides for a full refund of the purchase price in lieu of any damages allowable by law in the event of breach or cancellation is not considered binding. There is still an open question on whether a contract can be “binding” for one party and not for the other.

In order for property to constitute “qualified property” eligible for bonus depreciation the property must qualify for the general depreciation rules of the Modified Accelerated Cost Recovery System (MACRS) under Section 168 of the Tax Code. Property that is subject to the “alternative depreciation system” (ADS) described in Section 168(g) is not “qualified property” eligible for depreciation under MACRS.

Section 280F(b) of the code provides that certain “listed property” will be treated as ADS property under Section 168(g) if certain requirements are not met. Aircraft are listed property. Under Section 280F(b)(2), if an aircraft is not predominantly used for qualified business use (i.e., used more than 50% in the trade or business of the taxpayer) for any taxable year (the “Predominant Use Test”), then MACRS is not available, and instead an aircraft must be depreciated under the slower straight line method of the alternative depreciation system, and any first-year “bonus” depreciation in excess of depreciation under ADS must be “recaptured” as ordinary income in the tax year that the Predominant Use Test is not met.

Section 168(k)(2)(C)(i)(II) provides that Section 280F(b) must be applied before determining whether an aircraft is eligible for bonus depreciation. Thus, the Predominant Use Test must be satisfied in the first year in order to take bonus depreciation.

Section 186(k)(2)(F)(ii) also makes clear that that the limitations of Section 280F(b)(2) apply to bonus depreciation: “The deduction allowable under paragraph (1) [i.e. the bonus depreciation deduction] shall be taken into account in computing any recapture amount under section 280F(b)(2).” Thus, the Predominant Use Test must be satisfied in each subsequent tax year during the ADS recovery period for an aircraft in order to avoid recapture of the bonus depreciation.

The listed property recapture rules under Section 280F(b) only apply if the Predominant Use Test is failed during the ADS recovery period that applies to the asset, and such rules apply only to recapture the excess of the depreciation taken under MACRS/bonus over what would have been taken under ADS. There is no excess depreciation expense to recapture under the listed property rules if the applicable ADS recovery period has expired.

The next question is what constitutes “qualified business use” necessary to satisfy the Predominant Use Test. The term “qualified business use” generally means any use in the trade or business of the taxpayer other than use for the production of income under Section 212.

There are important exceptions. Generally, the following uses of listed property by 5% owners and related persons are not qualified business use:

a) The use of listed property that is leased to a 5% owner or related person;

b) The use of listed property was provided as compensation for the performance of services by a 5% owner or related person; or

c) The use of listed property is provided as compensation for the performance of services by any person not described in (b), above, unless an amount is reported as income to such person and taxes are withheld

See Section 280F(d)(6)(C)(i); and Treas. Reg. § 1.280F-6(d)(2)(ii)(A).

But, if the property involved is an airplane, the above-mentioned business use by 5% owners and related persons is qualified business use if at least 25% of the total use during the tax year consists of other types of qualified business use. Section 280F(d)(6)(C)(ii); and Treas. Reg. § 1.280F6(d)(2)(ii)(B). The most conservative approach is to qualify for the 25% business use test by flight hours, based upon per-passenger flight hours.

Thus, if the 25% threshold is satisfied in a given year, trade or business use otherwise excluded is counted in determining whether more than 50% of total use of an aircraft for that year is qualified business use.

If the Predominant Use Test is not satisfied, an aircraft may still be depreciated to the extent of the qualified business use, but that portion of the basis of an aircraft that may be depreciated must be depreciated using the straight-line ADS system. Business use aircraft depreciable under ADS system must be depreciated on a straight-line basis over a six-year recovery period (12 years for commercial/charter aircraft).

The taxpayer must meet the Predominant Use Test during each taxable year of the applicable ADS recovery period. Maintenance flights must be allocated between flight hours or miles that are for qualified business use and flight hours or miles that are not for qualified business use, taking into account the preceding exclusions for 5% owners and related persons. For example, if 40% of the flight hours (or miles) of an aircraft (other than maintenance flights) are qualified business use, then only 40% of maintenance flight hours (or miles) may be taken into account as qualified business use. See Technical Advice Memorandum 200945037 (July 29, 2009).

As with any new legislation, several open questions must be addressed through either technical corrections or advisory opinions. For bonus depreciation, it is unclear what the term “such property was not used by the taxpayer at any time prior to such acquisition” means. Specifically, it is unclear whether charter or demonstration flights are considered as “used by taxpayer.” Further, the Act is silent on whether straight-line election for entertainment disallowance purposes is being revisited with enactment of 100% bonus depreciation.

2. Federal Excise Tax Exemption

The IRS had instituted a number of audits of aircraft management companies seeking to impose federal excise tax (FET) on amounts paid by a company to a management company for management services (including pilot services) relating to the operation of an aircraft. The new tax law seeks to address the audit concerns for managed aircraft in a positive way.

The Act creates an exemption to FET related to aircraft management services. Specifically, payments for the following are exempt from FET:

  • Support activities related to an aircraft (e.g. storage, maintenance, fueling);
  • Activities related to the operation of an aircraft (e.g. hiring and training of pilots, hiring and training of crew);
  • Administrative services related to an aircraft (e.g. scheduling, flight planning, weather forecasting, insurance, establishing and complying with safety standards); and
  • Other services necessary to support flights operated by an aircraft owner.

These exemptions, however, are applicable only to the extent that they are directly attributable to flights on an aircraft owner’s own aircraft. For example, if an aircraft owner leases its aircraft to a charter company and is provided an aircraft (not the owner’s aircraft) as needed, such payments could still be subject to FET

For the purposes of determining whether a lessee is an aircraft owner for the purpose of the FET exemption, a lessee is not considered an aircraft owner if (i) the lease is for a term of 31 days or less and (ii) an aircraft is leased from a management company or a related party. Otherwise, the lessee is considered an aircraft owner for FET purposes.

3. Disallowance of Travel Expenses “Directly Related” to Business

Under the former law, entertainment, amusement, and recreation were deductible if and only if the entertainment, amusement, or recreation bore direct relation to the active conduct of the taxpayer’s business. This deduction applied to the use of aircraft to get to the entertainment as well. 26 US Code § 247(a)(1).

For tax years starting with 2018, all entertainment, amusement, or recreation expenditures, regardless of whether they are directly related to a business goal will not be allowed. This would likely include travel on the company aircraft with business customers, prospective clients before, during or after entertainment, even if the entertainment was clearly associated with a business goal.

4. Disallowance of Commuting Expenses

The Act disallows deduction of costs for reimbursing transportation to employees to commute between employee’s residence and place of employment, unless provided for the safety of the employee. The Act is unclear as to whether an amount included in employee’s income for commuting (i.e. Standard Industry Fare Level (SIFL)) is deductible to the company for commuting flights. Further, it is unclear whether partners, LLC members, and S corporation owner-employees are treated as employees for the purpose of the Act’s Entertainment and commuting rule changes. A planning option might be to document that the commuting on the company aircraft by an executive is for security reasons related to the safety of the employee. This could involve obtaining an independent security survey that could also reduce the amount of SIFL to be imputed to the employee/executive.

5. Repeal of 1031 Exchanges For Personal Property

1031 like-kind exchanges of aircraft are no longer permitted under the new federal tax laws. (§13303). Thus, the only like-kind exchanges remaining in the Tax code are exchanges of real property not held primarily for sale.

If a 1031 exchange (or a reverse like-kind exchange) was initiated before December 31, 2017, then the amendments contained in the Act do not apply, and the like-kind exchange can be completed. (§§13304(c)(2)(A) and (B)).

The benefits of a like-kind exchange, at least until the end of 100% expensing (2023 or 2024 for longer production period property and certain aircraft), are offset by the ability to expense 100% of the purchase price of the replacement aircraft, which should more than offset the gain on the sale of the relinquished aircraft. Planning concerns may exist where the sale of the relinquished aircraft occurs in a tax year different than the purchase of the replacement aircraft.

This article was written by Clifford G. Maine and Todd A. Dixon of Barnes & Thornburg LLP

Employer’s Ultimatum Supports Employee’s ADA Failure to Accommodate Claim

The United States District Court for the Southern District of Alabama in McClain v. Tenax Corp. recently denied in part an employer’s motion for summary judgment on a disabled employee’s failure to accommodate claim under the ADA.  The Court held the ADA-required interactive process never took place where the employer’s issued an ultimatum to the disabled employee in response to his request for a reasonable accommodation.  The facts show the importance of a well-documented interactive accommodation program.  In this case, an employee suffering from hand and foot deformities worked full-time as a janitor until the employer faced a production slowdown.  The slowdown led to the employee’s position becoming part-time.  In an effort to restore him to full-time, the employer offered a part-time pallet-wrapping position to supplement his part-time janitorial position.  After just two days of performing the part-time pallet-wrapper position, the employee advised his manager he could not perform the job because of his physical impairments.  The employee requested an accommodation whereby he be permitted to return to work as a full-time janitor.  Despite his complaints to multiple managers, they indicated he could either do both positions or quit.  Given no other options, the employee resigned.  He was not fired, but an ultimatum was presented.

The Court determined that under the ADA the employer had no obligation to create a new position (i.e., a full-time, rather than a part-time, janitorial position) for the employee as a reasonable accommodation.  However, the Court ruled that the employer’s actions could be viewed by a jury as unlawful.  By giving the employee the all-or-nothing ultimatum it failed to engage in the mandatory interactive process, which requires interactive discourse between the employer and employee.

Jackson Lewis P.C. © 2018
This article was written by Henry S. Shapiro of Jackson Lewis P.C.

R2-Me2? How Should Employers Respond to Job Loss Caused by Robots?

There is no question that the use of robots, along with other similar technological changes in the workplace, will continue to eliminate or downgrade jobs. Indeed, it has been estimated that on average, each workplace robot eliminates six jobs. This article will examine (1) the impact such changes will have on women and (2) whether these changes can be subject to legal challenge as prohibited gender discrimination.

The gender pay gap has become a much debated and controversial topic, but this article will stay out of the fray. However, data produced by the consultancy firm Korn Ferry has concluded that women in Britain make just one percent less than men who have the same function and level at the same employer.  Therefore, some have suggested that the main problem today is not necessarily unequal pay for equal work, but rather the forces and circumstances that lead women to be forced into and stuck in lower-paid jobs at lower-paying organizations. According to The Economist, this is the true gender “pay gap,” which is a much more difficult problem to solve.

Current research suggests that, unless addressed, this gender “pay gap” will increase rather than decrease. Last month, a report to the World Economic Forum in Davos, Switzerland, predicted that “artificial intelligence, robotics and other digital developments,” and the consequent job disruption, are likely to widen rather than diminish the gender pay gap. See “Towards a Reskilling Revolution” at p. 3. Citing statistics published by the federal Bureau of Labor Statistics, the report concluded that of the 1.4 million U.S. jobs that are projected to become “disrupted” because of robotic and other technological changes between now and 2026, 57 percent will be held by women.

But there could be good news for those concerned about gender wage equality. The report argued that an increased awareness of the impending effect of these changes, along with a concerted plan by governments, employers, businesses, labor unions and employees themselves to retrain or “reskill” disrupted workers, will present displaced workers with more opportunities for jobs at higher pay levels than their current wages. In a summary of the main report, the authors predicted that reskilling programs could result in higher wages for 74 percent of all currently at-risk female workers, thereby narrowing the gender wage gap.

Although job disruption from the use of robots will disproportionately impact women, the fact that it will result from “business necessity” means that employees may have difficultymounting successful legal challenges to this practice. Instead, thoughtful employers may want to focus their energies on learning more about the scope of this looming problem and, wherever possible, create or participate in programs that will reskill impacted employees, and thereby provide them with more opportunities in expanding and higher-paid occupations.  Nor is this an unrealistic proposition as, overall, in the decade ending in 2026, the U.S. job market is projected to create 11.5 million new jobs.


© 2018 Foley & Lardner LLP
This post was written by Gregory W. McClune of Foley & Lardner LLP.

When Nursing Homes Feed Into Corporate Web, Patient Care Fails

According Kaiser Health News, an analysis of nursing home financial records revealed that nearly three-quarters of all nursing homes in the U.S. are owned by people who also have vested interest in companies that in turn sell services and goods to these same nursing homes.

These business dealings are known as “related party transactions.” These transactions enable a nursing home owner to arrange contracts with their related businesses above a more competitive price, allowing them to turn around and siphon off the extra profit.

As an additional benefit, creating these corporate “webs” provides a layer of legal protection to nursing home owners. When a nursing home is sued, it is often very difficult for victims and their families to collect from the other related companies an owner holds stake in, thereby allowing them to “shore” away money.

Unfortunately, nursing homes which deal in “related party transactions” tend to have significant shortcomings which specifically affect their patients. The Kaiser Health News analysis showed that nursing homes which outsource to related organizations “have fewer nurses and aides per patient, have higher rates of patient injuries and unsafe practices, and are the subject of complaints almost twice as often as independent [nursing] homes.”

In order for related companies to be brought into a nursing home lawsuit, the client’s attorney needs to convince the judge that all the companies acted together as “one entity,” meaning that the nursing home was unable to make standalone decisions. This is a complicated and often time and money intensive decision, as it often requires obtaining evidence like company documents and emails to prove the connections.


COPYRIGHT © 2018, Stark & Stark.
This post was written by Sherri Warfel of Stark & Stark.
More health news is available on the National Law Review’s Health Page.

Recent Challenges to the Use of Hair Follicle Drug Testing

Without question, the trucking industry must do all it can to make sure its drivers are drug-free. However, employers must establish policies and procedures that recognize the diversity in the work force and the need to be flexible in the types of drug tests it administers to drivers and applicants. Hair testing is very effective in detecting drugs but should not be used as an end all for all applicants and experienced drivers. The National Minority Trucking Association reports that of the 3.5 million truck drivers in the United States, 1.5 million are minorities. As demands for new drivers increases, minorities are increasingly entering the profession. In addition, employers seek to retain experienced drivers. Recent court cases and EEOC settlements point to the need for those wishing to hire and retain minority drivers to have flexibility when it comes to the types of drug testing used on minority drivers and candidates.

Race-Based Challenges to Hair Follicle Testing

A recent decision from the United States District Court of Appeals for the First Circuit revived a lawsuit filed by eight police officers, a cadet, and a 911 operator. All are African American. All tested positive for cocaine after a hair follicle test was administered by the Boston Police Department. This was the second time the First Circuit found that the hair follicle test had a statistical disparate impact on African American officers in violation of Title 7 of the Civil Rights Act of 1964.

Title 7 prohibits employers from utilizing “employment practices that cause a disparate impact on the basis of race,” unless those practices are justified by business necessity. A disparate impact claim can succeed even when the employer did not intend to discriminate against persons in a protected class. The Boston Police Department’s officers and cadets had been subject to annual hair follicle drug tests. When the testing agency reported that a sample tested positive for cocaine, a physician chosen by the department checked to see if the individual had been administered certain medications during a medical procedure. If not, the individual could elect to have a “safety net” test of a different hair sample. The safety net tests were much more sensitive than the initial tests in detecting the presence of cocaine and its chemical by-products.

Plaintiffs challenged the reliability of hair testing. They pointed out that the federal government has refused to authorize hair testing in drug screening of federal employees and employees of private industries for which the government regulates drug testing. Plaintiffs argued that black individuals have higher levels of melanin in their hair and that causes cocaine and cocaine metabolites to bind to the hair at higher rates. If someone snorts or smokes cocaine its “aerosolized powder” will deposit on any nearby surface, including non-users hair. These deposits cannot be distinguished from the effects of actual use by current hair testing methods.

The plaintiffs also pointed to statistics kept by the department over a seven-year period. The statistics showed that out of 4,222 blacks that were hair follicle tested, 55 were positive. That compared to 10,835 whites being tested and 30 being positive. This resulted in a standard deviation of 7.14. The court acknowledged Mark Twain’s quip that there are three kinds of lies: lies, damned lies and statistics. However, the statistical analysis provided by plaintiffs provided to the court that “…we can be almost certain that the difference in outcomes associated over race over that period cannot be attributed to chance alone.”

The court then discussed whether the testing was job related. The court readily agreed that the hair test was job related since abstention from drug use was an important element of police behavior and that having a work force that did not consume drugs was a legitimate business need for the department. It noted that there was no reason why a test need be anything near 100% reliable – as few tests are – to be job related and consistent with business necessity. However, the disparate impact claim of the plaintiffs survived if they could show that an alternative test would decrease the chances of impacting innocent officers. Plaintiff’s suggested that those who had a positive hair follicle test go through a series of random follow up urinalysis tests in order to reduce the number of experienced officers being terminated and recruits being denied the opportunity of joining the force. The court found that a jury could agree with that approach and ordered that the suit go forward.

Religious Challenges to Hair Follicle Testing

In a charge filed with the EEOC, four East Indian Sikh applicants challenged J.B. Hunt’s drug testing policy. The policy required applicants to provide a hair sample for follicle testing. One of the five Articles of Faith for a Sikh is to maintain uncut hair. The Sikhs sought a religious accommodation, but were denied by J.B. Hunt. Though other testing methods were available, J.B. Hunt elected to require hair follicle testing, arguing that hair follicle testing was more accurate – and therefore more likely to assist in the company’s compliance efforts in having a drug-free driver force – than other methods.

The EEOC found reasonable cause to believe that Hunt failed to accommodate the Sikhs’ religious beliefs and effectively failed to hire a class of individuals due to race, national origin and religion in violation of Title 7 of the Civil Rights Act of 1964. The EEOC believed that alternate testing methods were a reasonable accommodation for the Sikhs, even if marginally less accurate than hair follicle testing. Hunt agreed to pay $260,000 and extend unconditional offers of employment to the complainants. In addition, it agreed to designate an EEOC consultant, develop written policies and procedures, and conduct training for all employees participating in the hiring, compliance, and grievance process.

These cases highlight the need for trucking companies to balance their responsibilities of keeping a drug-free driver corps while also respecting the rights of their diverse applicants and employees. Though hair follicle testing is common in the industry, it is important to note that there are some situations where trucking companies need to be flexible in its use.


© 2018 Heyl, Royster, Voelker & Allen, P.C.
This post was written by Doug Heise of Heyl, Royster, Voelker & Allen, P.C.
Read more at the National Law Review’s Transportation Page.