Three Questions Raised by Decision Expanding Failure to Warn Manufacturer Liability

Manufacturer LiabilityIn Taylor v. Intuitive Surgical, Inc., the Washington Supreme Court held that a patient-plaintiff may now recover for a medical device manufacturer’s failure to provide adequate warning to a purchasing hospital—despite the manufacturer’s provision of adequate warning to the patient-plaintiff’s treating physician. This post addresses three key questions:

  1. How did the court come to this decision?

Taylor relies on three unobjectionable steps to justify its bold holding. First, under the Washington Product Liability Act (WPLA), manufacturers have a statutory duty to provide adequate warnings to purchasers and patients who use their product. Second, the learned intermediary doctrine is an exception to this statutory duty, which allows a manufacturer to satisfy its duty to adequately warn patients by providing proper warnings to the treating physician. Third, the learned intermediary doctrine does not excuse manufacturers from their duty to provide adequate warnings to purchasers, even where the product is a medical device.

  1. How will this decision operate in practice?

Patients can recover for a manufacturer’s failure to provide adequate warnings to the purchaser, even if the manufacturer provided adequate warnings to the patient’s treating physician. Thus, Taylor empowers plaintiffs to recover damages for breach of a duty owed to another. It also leaves an important question unanswered: what happens when both the plaintiff and purchaser bring an action for the same breach of duty?

And that is not the only situation where unjust outcomes are likely to result. Consider the following scenario: A surgeon performs the same surgery on Patient A and Patient B. Patient A’s surgery is performed at Hospital A, while Patient B’s surgery is performed at Hospital B. Both hospitals purchased identical surgical devices from the manufacturer, but somehow the manufacturer only provides proper warnings with its surgical device to Hospital A. The manufacturer does, however, provide proper warnings to the surgeon, who promptly disregards them. As a result, Patient A and Patient B are both gravely injured. Under the law as stated in Taylor, Patient A cannot recover from the manufacturer but Patient B can. Even worse, Taylor penalizes the manufacturer for an act that did not cause Patient B’s injury.

  1. What immediate steps should be considered?

Outside of leaving or avoiding Washington, a medical device manufacturer should think about incorporating Taylor into its risk management policies. First, manufacturers may consider assessing their exposure given the new state of law: determine how many products are being sold into or used in Washington, which hospitals and other facilities are using the products and which doctors are using their products. After determining the extent of potential liabilities, manufacturers should think about whether additional legal advice is required. And of course, until the law in this area crystalizes—tread carefully.


USCIS Announces FY 2018 H-1B Cap Lottery Completed and Total Filed Numbers

USCIS H1-B capUnited States Citizenship and Immigration Services (USCIS) announced on April 17, 2017, that it had completed its annual H-1B lottery and had selected a sufficient number of H-1B petitions to meet the 65,000 petition bachelor’s degree cap and the 20,000 petition U.S. master’s degree cap. In total, USCIS received 199,000 petitions this year during the filing period that ran from April 3, 2017, until April 7, 2017. On April 11, 2017, the agency completed its random computerized lottery to select the cap petitions. The 20,000 U.S. master’s cap petitions were randomly selected first. All unselected U.S. master’s petitions plus the bachelor’s petitions were then pooled and subjected to the general lottery where 65,000 petitions were selected.

The 199,000 total H-1B petitions filed this year represents 37,000 fewer petitions than were received during last year’s filing period.

USCIS will now begin its process of formally receipting all the selected H-1B petitions, and will reject and return all unelected petitions including filing fees.

Please note that, as of April 3, 2017, USCIS temporarily suspended premium processing on all H-1B petitions, both cap and non-cap cases. Thus, all cases selected under the lottery will be processed under the regular processing timeline.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

NLRB Invalidates Another Employer Arbitration Agreement – But NOT Under D.R. Horton

NLRB sealOn April 13, the National Labor Relations Board (NLRB) invalidated yet another employer arbitration program. This time, however, the NLRB did not do so under its infamous D.R. Horton case. In Dish Network, LLC, the NLRB struck down an arbitration agreement an employer used with its workforce because: 1) as drafted, employees would reasonably construe it as limiting or prohibiting them from filing charges with the NLRB; and 2) a confidentiality provision within the agreement that prohibited employees from discussing anything related to arbitration proceedings, even those related to terms and conditions of employment, was overly broad and infringed on employees’ rights to discuss such issues under the National Labor Relations Act.

While the NLRB’s general counsel also alleged the arbitration program should be found unlawful under D.R. Horton, the NLRB declined to strike it down on that basis because there was no explicit provision in the agreement that limited class or collective actions, and there was no evidence the company ever tried to preclude such actions from forming based on the agreement.

This case serves as an important reminder for companies using or considering an arbitration program to resolve workplace disputes with its employees that the NLRB aggressively scrutinizes such agreements. Accordingly, care must be taken when drafting and implementing the agreements so they account for recent NLRB decisions and guidance. Failure to do so may result in the program being partially or wholly invalidated.


USCIS Releases New Edition of Form I-526 with New Changes and Information Requested From Investors

Form I-526USCIS recently announced the release of a new edition of Form I-526, with the new edition dated 04/10/2017. Starting on June 9, 2017, USCIS will only accept the 04/10/2017 edition.  Until then, investors can use the 12/23/2016 edition. Both editions of Form I-526 are available to download at no cost on the USCIS website.

Investors should be mindful of several substantial changes to the new Form I-526 (04/10/2017 edition). At first glance, the length of the form has noticeably increased: up from 3 pages in the 12/23/16 edition to 13 pages in the new edition. The additional pages include new fields that request information on the investor, dependents, the Regional Center, NCE, and JCE(s). The 04/10/2017 edition includes the following new changes:

  • List of Employment for Last 5 Years: USCIS will now require the investor to certify his/her previous employment history for the last five years, including the employer’s name and address, and the investor’s job title and dates of employment. Therefore, the Form I-526 should accurately reflect the investor’s employment history, and the same should for all employment records, tax returns, and resumes submitted as part of the investor’s source of funds.
  • List of Physical Addresses for Last 5 Years: The investor will need to list all addresses in or out of the United States for the last 5 years.
  • Other Information About the Investor: The new form provides space for the investor to all other names ever used (including aliases, maiden name, and nicknames), place of birth (city/town and state/province), sex, and country of last foreign residence if the investor is a citizen of more than one country or his/her nationality differs from citizenship.
  • Is the Investor Currently in Immigration Proceedings? The investor will be required to certify whether he or she is currently in exclusion, deportation, or removal proceedings before the Department of Homeland Security (DHS) or the Department of Justice (DOJ).
  • Information on Dependent Family Members: This new addition to the Form I-526 requires the name, date of birth, and relationship of the dependent spouse and children applying with the investor. The form also asks the investor to specify whether the dependent will apply for adjustment of status of for a visa abroad.
  • Information about the Investment. A new addition to Form I-526 is that the investor will now need to check off and also describe the source(s) of the investment capital.
  • Information on the Regional Center:  The new form requires information on the Regional Center which prior versions of the form did not request. The new form includes fields for the Regional Center’s name, the Regional Center Identification Number, the receipt number for the approved Regional Center, and the New Commercial Enterprise (NCE) Identification Number.
  • Information on the NCE: The form requests that the investor list the name of any other person or entity that holds a percentage ownership in the NCE, their percentage of ownership, and whether that person has obtained classification or is seeking classification as an alien entrepreneur under INA section 305(b)(5) on the bases of his or her investment in the NCE.
  •  Information on the JCE: There is space to include information on all JCEs involved with the new commercial enterprise, if the JCE(s) differs from the NCE.
  • Interpreter’s Certification: If an interpreter was used by the investor to complete the form, then he or she will need to complete the Interpreter’s Certification section of the form.

Are these new additions to Form I-526 a sign of other changes to come for the EB-5 program?  With the comment period already concluded on the proposed EB-5 Regulations (the deadline to submit comments on the Notice of Proposed Rule Making ended on April 11, 2017 at 11:59pm eastern), it remains to be seen if any of the proposed amendments will be implemented by USCIS. The proposed rules seek to increase the minimum investment amount for high employment areas from $1 million to $1.8 million, and increase the minimum investment amount for targeted employment areas from $500,000 to $1.3 million. On top of this, the Regional Center program is set to expire again on April 28, 2017. It still remains to be seen what changes, if any, will be made by the agency or by Congress in the next few weeks. We will be sure to keep you updated on any developments.

©2017 Greenberg Traurig, LLP. All rights reserved.

#ShowMeTheMoney: Sofia Vergara’s Settlement of Social Media False Endorsement Lawsuit Highlights Modern Legal Issue

Social Media false endorsementLast month, Sofia Vergara, star of ABC’s Modern Family, reached a settlement in a lawsuit brought by the actress against beauty company Venus Concept for alleged improper use of her likeness on television and in social media, which Vergara alleged created the false impression that she endorsed the Venus Concept brand or its treatment products. In the lawsuit, Vergara claimed $15 million in damages.

The origin of the dispute dates back to 2014, when Vergara posted a selfie to her WhoSay account (an Instagram-like social media app) during a “skin tightening” massage with the Venus Legacy machine. The posted image featured a close-up of a portion of Vergara’s face, with a massage technician using the machine on her lower back, and a large poster of Marilyn Monroe’s laughing face hanging on the wall in the background. In the post, Vergara included the caption “What is so funny Marilyn?? Legacy massage at @drlancerrx.”

Venus Concept later used the photo during a television segment on the show “Extra!,” and posted it to several social media pages, using captions such as “Loved by bombshell actress Sofia Vergara[,]” which, in her suit, Vergara alleged made it appear like she endorsed the massage treatment. However, according to her claims, Vergara thought the treatment was a “waste of time and money with little in the way of any results” and that she “would not use it again and certainly would not endorse it nor agree to appear in an international advertisement campaign to promote it.”

Vergara, alleged to be the highest-paid woman in television, claimed she in the past made $15 million for endorsement deals, and therefore sued Venus Concept (and various affiliated companies) for that exact amount, i.e., what she allegedly would have been paid for an endorsement. Previously, Vergara has appeared in campaigns for such brands as CoverGirl, Diet Pepsi, Kmart, Comcast Xfinity, State Farm, Rooms To Go, Head and Shoulders, and Quaker Oats.

While the lawsuit did not reach a final ruling on the merits (and the settlement amount is undisclosed), the case is yet another illustration of the very real modern phenomenon of implied false endorsement litigation surrounding companies’ use of celebrities’ image, likeness, or work in social media promotion or advertising. For example, in 2015, the pioneering hip-hop group Beastie Boys successfully sued Monster Energy based on the beverage company’s unauthorized use of certain Beastie Boys songs in an online promotional video. The Beastie Boys claimed false endorsement and copyright infringement after the montage of Beastie Boys hits was posted on YouTube and Facebook. The Beastie Boys have long declined to license their music for use in advertisements, and, similar to Vergara’s claim, maintained that use of their songs without permission in Monster’s online commercial gave the consuming public the false impression that they endorsed Monster, its advertising campaign, or its products.

The omnipresence and popularity of social media platforms such as Twitter and Instagram have led to a sea change in how brands and advertisers seek to reach consumers, with paid (but not always disclosed) social media endorsements by celebrities and athletes driving consumer demand for products like never before, as well as the creation of a cottage-industry of “social influencers,” namely, aspirational fashionistas, models, or musicians, paid by brands to endorse particular products via social media due to the volume of their Instagram account followers. Indeed, partnering with such popular social media content creators is now one of the most effective ways for brands to reach and engage with consumers who spend hours each day on social media platforms and look to top Instagram influencers to make purchasing decisions.

In that past, celebrity false endorsement suits often involved an advertiser imitating a celebrity’s likeness or voice to sell a product without that celebrity’s consent, to create the impression of some association with that celebrity; in those cases, the advertisers were the creators of the allegedly problematic content. However, as the Vergara case illustrates, in this modern social media landscape of re-tweeting and re-posting, brand owners may still face liability even if they are not the creators of the content, and celebrities are keenly aware of the value of a paid social media endorsement. Merely reposting a celebrity’s Instagram account (or a paparazzi photo), even if well-intentioned, may open a brand owner up to a false implied endorsement claim if consent of the celebrity is not first obtained.

Under Lanham Act case law, a false implied claim is one that may be literally true but nonetheless deceives or misleads consumers by its implications. The FTC’s “Guide Concerning the Use of Endorsements and Testimonials in Advertising” defines endorsement as any advertising message “that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser.” A celebrity’s unpaid mention or use of a product in a social media post is certainly valuable to a brand owner as a “free” endorsement. And it may be tempting for brand owners to immediately re-post a celebrity’s social media account which features or seemingly approves of that brand owner’s product. But, as the Vergara case illustrates, consideration needs to first be given to the implications of re-posting the celebrity’s account, and any related captions or editorializing, so as to not create the impression of endorsement, authorization, or sponsorship by the celebrity without his or her prior consent.

Copyright © 2017, Sheppard Mullin Richter & Hampton LLP.

United Airlines, Dr. Dao and Contract of Carriage

United Airlines contract of carriageWe live in a society where everyone is a potential source of video ‘news’.  Today people tend to reach for their phone to video a situation rather than to make any attempt to intervene or help.  This week United Airlines felt the brunt of amateur news footage.  Several people on United Airlines flight no. 3411 taped the aggressive removal of Dr. Dao from the plane.   The videos went viral, and the incident dominated the headlines.  As a result United lost an estimated $1.4billion in market value[i] and this is just the beginning.  Just 3 days after the incident, Dr. Dao has already begun his legal filings. On April 12, 2017, lawyers on behalf of Dr. Dao filed a motion to preserve evidence.  With the filing of the first court document in this matter it appears likely that a lawsuit will follow shortly.

Pundits have by and large argued that United was within its legal right to forcibly remove Dr. Dao from flight 3411 under the terms and conditions of United Airlines contract of carriage.  A closer look at the contract for carriage itself, leads me to conclude that this is not the case.  Two rules in the contract for carriage are particularly relevant to this discussion – Rule 21 and Rule 25.  United Airlines Contract of Carriage Rule 21 deals with “Refusal of Transport”[ii] and Rule 25 addresses “Denied Boarding Compensation”. [iii]

Rule 25 “Denied Boarding Compensation” has two sections (A and B) but only section A is relevant to Dr. Dao’s case.  Section A of Rule 25 lists 6 provisions:

1. Request for Volunteers

2. Boarding Priorities

3. Transportation for Passengers Denied Boarding

4. Compensation for Passengers Denied Boarding Involuntarily

5. Payment Time and Form for Passengers Traveling Between Points within the United States or from the United States to a Foreign Point

6. Limitation of Liability – doesn’t apply because this was not a denied boarding incident.

The provisions at issue in the Dr. Dao case are 2, 4 and 6.

Under provision 2 ‘Boarding Priorities’, United may deny boarding if, after offering compensation, there are not enough volunteers to willingly give up their seat. If a passenger is denied boarding involuntarily it is to be done in accordance with UA’s boarding priority which in Dr. Dao’s situation would be:

“b. The priority of all other confirmed passengers may be determined based on a passenger’s fare class, itinerary, status of frequent flyer program membership, and the time in which the passenger presents him/herself for check-in without advanced seat assignment.”

Under provision 4 ‘Compensation for Passengers Denied Boarding Involuntarily’ UA shall pay passengers denied boarding involuntarily 400% of the fare up to a maximum of $1350USD.

Provision 6 ‘Limitation of Liability’ limits United’s liability to actual damages up to $1350USD and also excludes recovery for punitive, consequential or special damages for ‘failing to provide the Passenger with confirmed reserved space.’

Rule 21 “Refusal of Transport” gives United to the right to remove from the aircraft a passenger who violates any of the stated reasons. Based on the facts as they have been presented to date it appears that Dr. Dao was not removed for any of the stated reasons in Rule 21: 1) Dr. Dao did not breach the contract of carriage; 2) He was not asked to leave because of a government request, regulation or security directive; 3) There was no force majeure or other unforeseeable condition; 4) There was no necessity to search Dr. Dao or his property; 5) There was no issue with his identification; 6) Dr. Dao had paid for his ticket; 7) He was not travelling across international boundaries and finally; 8) None of the 19 safety issues stated in Rule 21 applied.

The problem that United faces is that, it appears, they breached their own Carriage Contract.  Dr. Dao was not denied boarding.  United should have, as most carriers do, taken care of the oversold situation before boarding passengers.  Once boarded, UA’s own contract controls with respect to why a passenger can be removed from a plane and being oversold is not a stated reason.

It has been argued that ‘boarding’ includes being seated on the plane while the plane is still at the gate.  As boarding is not defined in the contract, and when read in conjunction with Rule 21 which uses the language ‘remove from the aircraft’, there is at best ambiguity and as anyone who has studied contracts knows – ambiguity is construed against the drafter.

It would appear after analyzing the Contract of Carriage that United was not within their right to have Dr. Dao forcibly removed.

This ultimately leads to an analysis of the limitation of liability clause.  This too should fail.  The limitation of liability should be restricted to instances where there was a denial of boarding.   Nothing in United’s limitation of liability should apply to Dr. Dao’s inevitable myriad of claims associated with his forcible removal from the plane.

Simple common sense, not to mention following their own terms and conditions, could have averted this PR nightmare for United. The terms and conditions provides for up to $1350USD in compensation for an involuntary bump, so why stop at $800USD when they most likely would of had takers once it crossed the $1000 threshold.  Hopefully lesson learned by United and the other carriers who are overselling flights.




Department of State Releases May 2017 Visa Bulletin

may visa bulletinExpect some retrogression in EB-1 and EB-2 cutoff dates in the coming months.

The US Department of State has released its May 2017 Visa Bulletin setting out per-country priority date cutoffs that regulate immigrant visa availability and the flow of status adjustments and consular immigrant visa application filings and approvals.

What Does the May 2017 Visa Bulletin Say?

The May 2017 Visa Bulletin includes both a Dates for Filing Visa Applications chart and an Application Final Action Dates chart. The former indicates when intending immigrants may file their applications for adjustments of status or immigrant visas, and the latter indicates when adjustment of status applications or immigrant visa applications may be approved and permanent residence granted.

If US Citizenship and Immigration Services (USCIS) determines that there are more immigrant visas available for a fiscal year than there are known applicants for such visas, it will state on its website that applicants may use the Dates for Filing Visa Applications chart. Otherwise, applicants should use the Application Final Action Dates chart to determine when they may file their adjustment of status applications.

It is not yet clear which chart USCIS will select for May 2017 filings. To be eligible to file an employment-based (EB) adjustment application in May 2017, a foreign national must have a priority date that is earlier than the date listed below for his or her preference category and country (changes from last month’s Visa Bulletin are shown in yellow).

Application Final Action Dates

EB All Charge-


Areas Except

Those Listed


El Salvador,
and Honduras
India Mexico Philippines
1st C C C C C C
2nd C 08FEB13 (was 15JAN13) C 22JUN08 C C
3rd 15MAR17 (was 15FEB17) 01OCT14 (was 15AUG14) 15MAR17(was 15FEB17) 25MAR05 (was 24MAR05) 15MAR17(was 15FEB17) 01JAN13(was 15SEP12)
Other Workers 15MAR17 (was 15FEB17) 08MAR06 (was 01MAR06) 15MAR17 (was 15FEB17) 25MAR05 (was 24MAR05 ) 15MAR17 (was 15FEB17) 01JAN13 (was 15SEP12)

Dates for Filing Visa Applications

EB All Charge-


Areas Except

Those Listed


India Mexico Philippines
1st C C C C C
2nd C 01OCT13 (was 01MAR13) 01FEB09 (was 22APR09) C C
3rd C 01SEP15 (was 01MAY14) 22APR06 (was 01JUL05) C 01JUL14 (was 01SEP13)
Other Workers C 01JUN08 (was 01AUG09) 22APR06 (was 01JUL05) C 001JUL14 (was 01SEP13)

On the Application Final Action Dates chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates will advance by one month for EB-2 India and by three weeks for EB-2 China.

The EB-3 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, and Mexico will advance by one month to March 15, 2017. The cutoff date for EB-3 China will advance by six weeks to October 1, 2014 and the cutoff date for EB-3 India will advance by one day to March 25, 2005. The cutoff date for EB-3 Philippines will advance by three and a half months to January 1, 2013.

The EB-5 China cutoff date will advance by ten days to June 1, 2014.

On the Dates for Filing chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates for EB-2 China will advance by seven months to October 1, 2013. Cutoff dates for EB-2 India will retrogress by three months and three weeks, to February 1, 2009.

Cutoff dates for EB-3 China will advance by 16 months to September 1, 2015, but for “other workers” the cutoff dates will retrogress by 14 months, to June 1, 2008. Cutoff dates for EB-3 India will advance by nine months and three weeks, to April 22, 2006. Finally, cutoff dates for EB-3 Philippines will advance by ten months, to July 1, 2014.

The State Department projected that a Final Action date will be established in the EB-1 category for China and India in the near future. Visa numbers would advance slowly for the remainder of this fiscal year. Additionally, the EB-2 category for the worldwide allotment, El Salvador, Guatemala, Honduras, Mexico, and the Philippines is expected to retrogress no later than July. It is anticipated that this category will also become current at the start of the FY 2018 in October.

Read the May 2017 Visa Bulletin.

Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

Firestorm Over Passenger Forced Removal Proves Costly for United

United AirlinesUnited Airlines stock tumbled nearly 4% in early trading Tuesday morning before recovering late in the day as the company continued to deal with fallout after video surfaced showing a passenger being forcibly dragged from a United flight at Chicago’s O’Hare International Airport. United shares were down by as much as 6% in premarket trading Tuesday morning, according to MarketWatch.

Shocked viewers responded with universal outrage Monday to a video appearing to show a 69-year old man being brutally dragged off his flight by three uniformed officers from the Chicago Department of Aviation, one of which has since been placed on leave. The man’s face was bloodied and he appeared disheveled as officers dragged him along the narrow aisle of the plane.

“The incident on United flight 3411 was not in accordance with our standard operating procedure and the actions of the aviation security officer are obviously not condoned by the Department,” the agency said in a statement. “That officer has been placed on leave effective today pending a thorough review of the situation.”

Compounding the Airline’s misery was a letter sent to employees Monday night by United’s CEO, Oscar Munoz, saying that he supported the actions of the flight’s crew in removing the passenger, who Munoz accused of being “disruptive and belligerent.” Munoz later apologized directly to the passenger but his public sentiment was judged disingenuous in the wake of the leaked employee memo.

The passenger was removed from the flight to make room for four United employees, although it was initially reported that the passenger was removed from the flight to Louisville due to overbooking—a standard industry practice of selling more seats on any given flight than are actually available to shield the airline from lost revenue from no-shows. Although the flight was not technically overbooked, United followed the policy in order to seat the four employees.

In 2016, the 12 largest U.S. airlines bumped slightly more than 40,600 of 659.7 million passengers, for a rate of 0.62 per 10,000 passengers, down from 0.73 per 10,000 in 2015, according to the Bureau of Transportation Statistics, Bloomberg reported.

In this case, the airline requested that four passengers relinquish their seats to United employees. According to reports, the airline first offered passengers $400 in addition to hotel and flight vouchers, and then raised the cash component to $800. When there were no takers, the airline chose four passengers to be removed. Approached by the flight’s crew, the man declined to give up his seat, asserting that he is a doctor and needed to see patients Monday morning.

The incident also sparked an international outrage across China, where it was the top item trending on Sina Weibo, as it was reported the removed passenger was Asian. The BBC reported that a passenger seated next to the doctor said the doctor was originally from Vietnam, where there was also widespread negative reaction. The hashtag #UnitedForcesPassengerOffPlane had more than 270 million views and an online petition, “Chinese Lives Matter,” which has some 38,000 signatures and calls for a U.S. investigation into the case, according to Bloomberg.

Reputational damage can be potentially costly as a company may have to deal with expenses related to managing a crises, such as public relations and advertising, as well as any loss to the company’s stock market value. The incident is the second in as many weeks to envelop United, which previously suffered scorn in the court of public opinion after barring two nonrevenue passengers from boarding a flight based on a dress code violation.

United’s largest shareholder is Warren Buffet, whose 9% stake in the airline, worth roughly $2 billion, was down some $90 million when United’s stock was at its lowest point on Tuesday.

Risk Management Magazine and Risk Management Monitor.

Copyright 2017 Risk and Insurance Management Society, Inc. All rights reserved.

Watchdog: ‘Reason To Believe’ Trump And Super PAC Violated Election Law

Donald Trump Campaign finance election lawA campaign finance watchdog said Wednesday that chief White House strategist Steve Bannon may have illegally benefited from spending by a pro-Trump super PAC while he led Trump’s presidential campaign.

The Campaign Legal Center believes Make America Number 1, a super PAC that backed Trump, may have improperly subsidized Bannon’s salary. In a letter to regulators on Wednesday, the Campaign Legal Center argued that details in Bannon’s recent financial disclosure give “reason to believe” the Trump campaign and the super PAC may have violated federal election rules.

While Trump initially criticized his Republican opponents for their close ties to super PACs and disavowed outside groups that sought to support his bid, his team embraced outside help during his general election race against Hillary Clinton and pushed the boundaries of federal election rules as much as any other 2016 candidate, testing regulations meant to ensure super PACs operate independently from campaigns.

Bannon’s disclosure, filed March 31, confirmed his financial connection to Glittering Steel, a film production company that was involved with Bannon’s “Clinton Cash” documentary about the Clinton family and “Torchbearer,” which starred Duck Dynasty’s Phil Robertson.

Make America Number 1 paid the film production company nearly $1 million during the 2016 election cycle, with payments starting in July 2015 and continuing after Bannon became the Trump campaign’s CEO. The Trump campaign never paid Bannon, who previously was the executive chairman of Breitbart News, a right-wing news site.

The filing says Bannon resigned from Glittering Steel and stopped receiving monthly consulting payments from the company in August 2016, when he joined the Trump campaign. But the form indicates Bannon kept an ownership interest in Glittering Steel, worth at least $100,000. Bannon’s report says he’s trying to sell his stake in the company.

“As a result, as Bannon worked for the Trump campaign without pay, he continued to benefit, directly or indirectly, from the estimated $267,500 in payments that Make America Number 1 made to Glittering Steel LLC after or around his officially joining the campaign,” wrote the Campaign Legal Center’s general counsel, Larry Noble.

The Campaign Legal Center first filed its complaint with the Federal Election Commission in October. It’s unclear if the agency has decided to investigate, as the FEC doesn’t disclose investigations until they’re completed. Its commissioners have frequently deadlocked on whether to pursue apparent election law violations.

Overall, the FEC has done little to ensure that super PACs remain independent from candidates in the wake of the Supreme Court’s 2010 Citizens United decision, which allowed companies and unions to spend unlimited amounts of money on elections.

Super PACs and politically active nonprofits spent almost $1.5 billion during the last election cycle, with much of the money coming from ultra-wealthy individuals like billionaire Robert Mercer, the conservative hedge fund executive who financed Make America Number 1. His daughter, Rebekah, led the super PAC, which originally backed Texas Sen. Ted Cruz in the Republican primary race.

The Mercers pressed Trump to hire Bannon to lead his campaign, according to the Washington Post. Over the years, the Mercer family has funded Breitbart News, as well as the Government Accountability Institute, a conservative investigative nonprofit led by Bannon. Bannon and the Mercers founded Glittering Steel together, the Post reported.

The Mercers are also major investors in Cambridge Analytica, a data firm that worked for both Make America Number 1 and the Trump campaign. Bannon received monthly consulting payments from Cambridge Analytica and served on its board. Though Bannon’s financial disclosure says he resigned from the firm when he started working for Trump, he still has a stake in the company, worth over $1 million, that he’s planning to sell.

The Campaign Legal Center said that there’s reason to question whether Bannon did in fact resign from Glittering Steel and Cambridge Analytica in August.

Bannon’s financial disclosure says he resigned from Breitbart News then, but Breitbart’s CEO Larry Solov recently told the Senate Press Gallery that Bannon resigned from Breitbart in November, days after Trump’s victory.

The relationship between Bannon and Breitbart News, which gave Trump favorable coverage throughout the campaign, has generated controversy in recent weeks. Bannon has reportedly maintained contact with Breitbart editors about the site’s coverage. That news prompted a liberal watchdog group, Citizens for Responsibility and Ethics in Washington, to request an investigation into whether Bannon has violated his White House ethics pledge.

News reports suggested last week that there’s a growing rivalry between Bannon and Trump’s son-in-law and advisor Jared Kushner, and that Bannon could be on his way out the door, after Trump removed Bannon from a position on his National Security Council.

Trump did little to quiet talk of a shake-up on Tuesday when the New York Post asked him if he still has confidence in Bannon. “I like Steve, but you have to remember he was not involved in my campaign until very late,” he said. “I had already beaten all the senators and all the governors, and I didn’t know Steve. I’m my own strategist and it wasn’t like I was going to change strategies because I was facing crooked Hillary.”

*This article was produced by MapLight in partnership with Fast Company.


© Copyright MapLight

What Employers Need to Know About Arizona’s New Paid Sick Time Requirements

Arizona Paid sick timeIn November 2016, Arizonans passed Proposition 206. This proposition, entitled the “Fair Wages and Healthy Families Act,” not only increased the state’s minimum wage, but also created new requirements regarding paid sick time in Arizona. This article details the changes regarding paid sick time and the steps employers should be taking before July 1, 2017.

Overview of the Paid Sick Time Requirements

Before the passage of Proposition 206, Arizona did not require employers to provide paid sick time to employees. However, Proposition 206 establishes new requirements regarding (1) paid sick time accrual, (2) permissible uses of paid sick time, (3) how to handle unused paid sick time, and (4) notice to employees regarding paid sick time. These requirements apply to private employers and political subdivisions of the state and become effective July 1, 2017.

Accrual. Under Proposition 206, employers must provide employees with paid sick time. Employees must accrue at least one hour of paid sick time per 30 hours worked. Employers with 15 or more employees must allow employees to accrue, and use, up to 40 hours of paid sick time per year. Employers with less than 15 employees must allow employees to accrue, and use, up to 24 hours of paid sick time per year.

Permissible Uses. Employers must allow employees to use paid sick time for the following purposes:

  • mental or physical illness;

  •  care for a family member who has a mental or physical illness;

  • a public health emergency; and

  • to address issues related to domestic violence.

Employees do not need to provide prior notice to the employer if the leave is “not foreseeable” unless the employer has implemented a written policy setting forth how notice should be provided. If the leave is foreseeable, then employees must “make a good faith effort” to provide notice. If possible, employees must make a “reasonable effort” to avoid “unduly disrupting the operation of the employer” when scheduling paid sick time. Employers may not require an employee to find a replacement as a condition of using paid sick time, retaliate against an employee for use of paid sick time, or count paid sick time absences against an employee.

Unused Paid Sick Time. Proposition 206 provides employers two options regarding unused paid sick time. First, employers may allow unused paid sick time to carry over. If an employer allows paid sick time to carry over, employees are still only entitled to use the amount of time required by the statute unless the employer sets a higher limit. Second, if an employer does not allow for paid sick time to be carried over, then the employer must pay employees for unused paid sick time at the end of the year and provide the employee with an amount of paid sick time that is available for the employee’s immediate use at the beginning of the subsequent year. Employers are not required to pay out the unused paid sick time of employees who have been terminated, have resigned, or have retired, unless the employer has a policy or practice of doing so.

Notice to Employees. Proposition 206 requires employers to provide certain notices to employees. Among other things, employers must provide a summary of each employee’s paid sick time on or with each regular paycheck. The summary must include (1) the amount of earned paid sick time available for the employee, (2) the amount of earned paid sick time taken by the employee to date that year, and (3) the amount of pay the employee has received as earned paid sick time.

Next Steps for Employers

Employers should immediately take steps to ensure compliance with Arizona’s new law. To comply with this law, employers should consider taking the following steps.

  • Revise Policies. Employers should review current policies to determine whether they are adequate.  Many existing policies, including “use it or lose it” policies or policies that do not permit accrual of paid sick time until an employee has been employed for a specified period of time, will not comply with the new law.  If current policies are inadequate, employers and/or their legal counsel should revise existing policies or draft new policies to be implemented by July 1.

  • Provide Notice. Employers should become familiar with the notice requirements. Among other requirements, the Industrial Commission will require a new posting to accompany other required workplace posters.

  • Payroll and Recordkeeping Requirements. Employers should coordinate with their payroll companies or internal payroll personnel about how paid sick time will be tracked and reported, and be prepared for the additional recordkeeping requirements imposed by the law.

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