Case of First Impression: Federal Circuit Endorses Patent-Agent Privilege

In a case of first impression regarding whether communications between a non-lawyer patent agent and a client are legally privileged, a split panel of the US Court of Appeals for the Federal Circuit held that a patent-agent privilege is warranted on a limited basis where an agent is engaged in the congressionally endorsed, authorized practice of law. In Re Queen’s University at Kingston, PARTEQ Research and Development, Case No. 2015-145 (Fed. Cir., Mar. 7, 2016) (O’Malley, J) (Reyna, J, dissenting).

The opinion followed the plaintiffs’ petition for mandamus. At the district court, the petitioners withheld documents reflecting communications between the plaintiffs’ employees and the non-lawyer patent agents who prosecuted the patents-in-suit based on an alleged patent-agent privilege. The district court overruled objections to the magistrate’s order granting defendants’ motion to compel production over the alleged privilege, but agreed to stay the discovery order pending a writ of mandamus. Applying Federal Circuit law, the Court found that mandamus was warranted to decide the issue of first impression, which had split the lower courts.

The Federal Circuit first recognized that “Rule 501 of the Federal Rules of Evidence authorizes federal courts to define new privileges by interpreting ‘common law principles.’” Finding that the respondents did not argue that a patent-agent privilege was foreclosed by the US Constitution, any federal statute or any rule prescribed by the Supreme Court of the United States, the Court turned to reason and experience, as directed by Rule 501, in order to determine whether recognizing a privilege was now appropriate. The majority concluded that it was, holding that the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation warranted an independent patent-agent privilege.

The Federal Circuit relied on the Supreme Court’s prior assertion that the preparation and prosecution of patent applications for others constitutes the practice of law. Further, the majority found that Congress had delegated to the commissioner of patents oversight authority concerning lawyers, agents or other persons representing applicants or other parties before the US Patent and Trademark Office (PTO), and that the commissioner had, in fact, allowed both lawyers and agents to practice before the PTO.

In further support, the majority panel cited both the Supreme Court’s recognition of Congress’s delegation of supervisory authority to the commissioner of patents for lawyers and agents alike, and related legislative history acknowledging the practitioners’ equivalent professional rights before the PTO. The majority found that a client has a reasonable expectation that all communications relating to obtaining legal advice on patentability and legal services in preparing a patent application will be kept privileged, and that denying privilege to agents would frustrate Congress’s intent to provide clients a choice between agent and lawyer. As a result, the majority found that a patent-agent privilege is coextensive with the rights Congress affords to patent agents, and serves the same important public interests as the attorney-client privilege.

The Court also noted that the new privilege’s scope is necessarily limited to communications with non-lawyer patent agents when those agents are acting within their authorized practice of law before the PTO. The Court found that the Code of Federal Regulations (CFR) sets forth the acts permitted by non-lawyer agents and helps to define the scope of communications covered under the privilege. For example, communications are due the privilege if made in furtherance of the performance of tasks specifically set forth in the CFR, or “are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before the [PTO] involving a patent application or patent in which the practitioner is authorized to participate.” The Court stressed that it is the burden of the person asserting the privilege to justify its applicability. The Court also cited examples of non-privileged communications, including those with a patent agent who offers an opinion on the validity of another party’s patent in contemplation of litigation or the sale or purchase of a patent, or on infringement.

In dissent, Judge Reyna argued that the public’s need for open discovery outweighed the need for the privilege. The dissent also argued against the new privilege with the following reasoning:

  • The privilege may adversely affect an agent’s duty of candor.

  • Agent communications are already routinely protected because of lawyer involvement.

  • Patent agents and clients are able to destroy written communications through implementation of document-destruction policies.

  • Determining the scope of the privilege is complicated and uncertain.

  • Congress and the Supreme Court have recognized a difference between agents and lawyers.

  • Evidence suggests that Congress did not intend that agents have a privilege.

  • No state has created an agent-client privilege.

  • The Judicial Conference Advisory Committee has not recommended creating the privilege.

  • Lawyers hold the privilege because of their professional status.

  • The Supreme Court has never held that patent agents practice law; it has merely recognized that the Florida Supreme Court has done so under Florida law.

  • Congress has never believed that patent agents practice law.

The Federal Circuit remanded the issue to the district court to determine whether the patent-agent privilege applied.

Article By John C. Low, PhD
© 2016 McDermott Will & Emery

New Federal Law Will Provide First-Ever Civil Claim for Theft of Trade Secrets

On April 27, 2016, the U.S. House of Representatives approved the Defend Trade Secrets Act, S. 1890, by a vote of 410-2.  The Senate approved an identical bill 87-0 on April 4, 2016.  President Obama is expected to sign the DTSA into law in short order.  Once effective, the DTSA will create a federal, civil cause of action for trade secret misappropriation for any act that “occurs on or after the date of the enactment” of the law.  In addition to providing plaintiffs an opportunity to obtain injunctive relief and monetary damages, the DTSA will further allow for ex parteseizures of misappropriated trade secrets.

The DTSA borrows from the Uniform Trade Secret Act (the “UTSA”).  For example, the DTSA’s misappropriation, improper means, and three-year limitations provisions are all copied from the UTSA.  At the same time, the DTSA does not preempt state trade secret law or other sections of the U.S. code pertaining to trade secret misappropriation.  Finally, the DTSA directs government officials to report on exterritorial trade secret misappropriation.

The DTSA’s seizure provision is a notable addition vis-à-vis the UTSA.  It allows courts to issue an ex parte order to seize property as “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.”  To obtain such an order, a party must meet eight distinct prerequisites—including showing that a temporary restraining order is inadequate, that immediate and irreparable injury will occur if the seizure is not approved, and that the harm to the applicant outweighs the legitimate interests of any party from whom material is seized.  The party seeking an ex parte seizure order must post security and is subject to a claim for any damage caused by a wrongful seizure.  The raft of requirements intentionally set a high bar to issuance of an ex parte seizure order.  It is a powerful tool, but also susceptible to abuse absent strict controls.  The DTSA’s ex parte seizure requirements strike the right balance between need and caution.

The DTSA provides district courts with “original jurisdiction of civil actions brought under” the DTSA.  The DTSA does not contain any specific venue provisions and therefore an aggrieved party must look to the general venue statute for civil actions in deciding choice of venue in a federal district court.  In addition, plaintiffs may be able to bring a claim alleging a violation of Section 337 of the Tariff Act of 1930 in the U.S. International Trade Commission, depending on the circumstances.  Plaintiffs deciding upon a venue in which to bring a DTSA claim should analyze differences between the DTSA and any potential state law or other federal claim.

The DTSA explicitly applies to “interstate or foreign commerce.”  While the DTSA does not expand upon “foreign commerce” in any meaningful way, Section 4 of the DTSA requires various governmental officials to report on trade secret misappropriation experienced by U.S. companies that occurs abroad.  In particular, one year after the DTSA is enacted, and every two years thereafter, the Attorney General, the Intellectual Property Enforcement Coordinator, and the Director of the USPTO must submit a report to the House and Senate Judiciary Committees pertaining to trade secret theft occurring abroad.

The DTSA is an important development in U.S. law, as it provides the first-ever federal law providing a private civil claim for trade secret misappropriation.  The rationale for the DTSA is the belief by Congress, the Obama Administration, and stakeholders that the current patchwork of state laws is inadequate to address trade secret misappropriation and the concomitant damage it causes to trade secrets rights holders and to the U.S. economy.  Time will tell whether the law achieves its intended purposes.

Article By John J. Thuermer, Steven M. Auvil & David Elkins

© Copyright 2016 Squire Patton Boggs (US) LLP

 

Supreme Court Rules Public Employee Demoted For Perceived Political Activity Can Bring First Amendment Challenge

In a 6-to-2 decision, the Supreme Court ruled that when a public employer demotes an employee in order to prevent the employee from exercising his free-speech rights, the employee may challenge that action as a violation of the First Amendment and §1983, even if the employer was mistaken about the employee’s behavior. The Court found that the government’s motive is what matters and that the constitutional violation of discouraging employees from engaging in protected political activity and speech is the same regardless of whether or not the employer was mistaken about the employee’s political involvement. Heffernan v. City of Paterson, 578 U.S. ___ (2016).

Supervisor Assumed Employee Supported Opposing Candidate

Jeffrey Heffernan was a police officer in Paterson, N.J., a twenty-year veteran of the force. After being promoted to detective in 2005, he was assigned to the office of the chief of police. In April 2006, the city was in the middle of a mayoral election where the incumbent had the support of Heffernan’s supervisors, but the challenger was a former Paterson police chief and friend of Heffernan. Heffernan could not even vote in the election as he did not live in the city but his mother did.

One afternoon, while off duty, Heffernan went, at his mother’s request, to the challenger’s campaign office to get a new yard sign for his mother’s yard. Other members of the police force saw him with the sign. The following day, Heffernan’s supervisors demoted him to patrol officer and assigned him to a walking patrol post. They demoted him as punishment for what they thought was his “overt involvement” in the challenger’s campaign, even though that belief was mistaken. Heffernan was not involved in the campaign but merely picked up the sign to help his bedridden mother.

Heffernan sued, alleging his demotion violated the First Amendment. He asserted that his supervisors demoted him because they thought he engaged in constitutionally protected speech, even though they were mistaken about his actions. The district court and Third Circuit Court of Appeals rejected his claim, holding that a free-speech retaliation claim under §1983 lies only when the government retaliated against an employee who actually exercised his First Amendment rights, not on the mistaken perception that he exercised protected rights.

High Court Rules In Favor Of First Amendment Protection 

Generally, the First Amendment prohibits government officials from dismissing or demoting an employee because that employee engaged in constitutionally protected political activity or speech. Heffernan argued that the government’s motive in taking an adverse employment action is the key to a public employee’s retaliation claim. He alleged that as long as a government employer believed that the employee was engaged in protected activity and took adverse action because of that belief, the employer violated the First Amendment.

The Supreme Court agreed. Writing for the majority, Justice Breyer stated that “the government’s reason for demoting Heffernan is what counts here.” The Court ruled that when a government employer demotes an employee because it wants to prevent the employee from engaging in political activity protected by the First Amendment, the employee is entitled to challenge that unlawful action under the First Amendment and §1983, even if the employer is acting upon a factual mistake regarding the employee’s behavior. The Court stated that the employer’s mistake does not diminish the risk of harm to the demoted employee or to others who fear similar adverse consequences of engaging in protected activity.

The Court left the door open, however, for government employers to adopt a neutral policy that prohibits police officers from overt involvement in any political campaign. Whether a specific neutral policy meets constitutional muster is a question the Court left for another day.

It’s the Employer’s Ill Motive that Matters, Not the Employee’s Exercise of Rights

The Court’s ruling means that a public employer can be held liable for violating an employee’s constitutional rights even where the employee admits he wasn’t exercising those rights. The public employer’s desire or motive to keep the employee from engaging in protected political activity is enough to give the employee a viable claim for damages under §1983 regardless of whether the employee engaged in any activity protected by the Constitution.

Article By Joanna R. Vilos of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2016.

Uber Aims to Settle Two Class Actions; Approximately 385,000 Uber Drivers in California and Massachusetts to Remain Independent Contractors – At Least for Now

Last Thursday, Uber settled two closely-watched class actions contesting Uber’s classification of approximately 385,000 drivers in California and Massachusetts as independent contractors as opposed to employees. While the plaintiffs viewed the settlement as a victory, so likely did Uber, as it allows Uber to continue to pursue an on-demand independent contractor service business model.  The court, however, still needs to approve the settlement and whether it will do so is not clear.

As part of the proposed settlement, Uber agreed to pay $84 million to the drivers. If Uber holds an initial public offering and its valuation goes above $93.75 billion within one year, Uber will pay an additional $16 million to the drivers bringing the total settlement to $100 million.  After reducing the pot to account for attorneys’ fees and other costs, the individual payments, based on the number of miles driven by each driver, range from nominal amounts up to $8,000, although the majority of class members may just walk away with less than $100.  Uber further agreed to revise its termination practices so that drivers must generally be given warnings and explanations before Uber can deactivate them from its software application.  Drivers will also be able to appeal terminations and will enjoy a more driver-friendly tipping policy.

Many consider $84 million, or even $100 million, a well-spent business expense for Uber, who potentially had to spend hundreds of millions, if not billions, of dollars to reclassify its drivers and comply with the requirements of minimum wage, overtime, workers compensation, anti-discrimination, benefits, sick leave, and other federal, state and local laws that apply to employees.

But Uber is not out of the woods yet. First, as mentioned earlier, the court must approve the settlement and there is no guarantee that it will.  Just a few weeks earlier, a California judge rejected a proposed settlement of similar litigation between Uber’s competitor, Lyft, and its drivers in part because it “short-changed” those drivers.  Under that settlement, Lyft drivers would have received an average of $56.  Second, Uber is settling lawsuits with its former and existing drivers in California and Massachusetts, but lawsuits in other states remain outstanding and new ones could be on the way.  Stay tuned for further developments.

Article By Michael S. Arnold & Gauri P. Punjabi of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

New York Court Has Sufficient Jurisdiction Over Foreign Bank Where Bank Purposefully Uses Correspondent Bank Account in New York

In a recent New York  District Court decision in Official Comm. Of Unsecured Creditors of Arcapita Bank B.S.C. v. Bahr, Islamic Bank, 2016 U.S. Dist Lexis 42635 (S.D.N.Y. 2016), the court considered whether the use of a correspondent bank account provides a sufficient basis to exercise personal jurisdiction over a foreign bank. There, the Bahraini banks set the terms of investment placements and designated New York correspondent bank accounts to receiver the funds. The banks then actively directed the funds at issue into the New York accounts.

The Committee’s cause of action for the avoidance of preferential transfers arose from the use of the correspondent bank accounts. Hence, the heart of the claim was the receipt of the transferred funds in the New York correspondent bank accounts. The Bahraini banks deliberately chose to receive funds in US dollars and designated the correspondent bank accounts in New York to receive the funds. This deliberate choice made the exercise of jurisdiction constitutional. “Where, as here, the defendant’s in-forum activity reflects its ‘purposeful availment’ of the privilege of carrying on its activities here, the defendant has established minimum contacts sufficient to confer a court with jurisdiction over it, even if the effects of the defendant’s conduct are felt entirely outside of the United States.”

Thus, if a foreign party deliberately choses to use the US banking system to effectuate a transaction and a cause of action arises from that transaction, the foreign party can be forced to defend itself in the US courts.

Article By Eric (Rick) S. Rein of Horwood Marcus & Berk Chartered
© Horwood Marcus & Berk Chartered 2016. All Rights Reserved.

Senate Takes on Business Tax Reform; Treasury to Have “Intense Comment Period” for Inversion Regulations

Legislative Activity

Senate to Consider Business Tax Reform Proposals

Following multiple hearings on tax reform thus far this year in the House Ways and Means Committee, this week the Senate Finance Committee will hold a hearing on business tax reform. During the hearing, the difference between Republican and Democrat approaches to taxing corporate income, including what the top rate on corporations should be, will be on full display. In advance of the hearing, the Joint Committee on Taxation (JCT) has released an overview of various proposals for business tax reform, including: (1) the President’s framework; (2) reforms that both maintain and change the structure of the current business tax regime; and (3) proposals to shift to a consumption-based regime. As part of the Committee’s efforts on business tax reform, Senator Orrin Hatch (R-UT) last week reaffirmed his commitment to move forward with his “corporate integration” proposal by the end of June, noting that he is still awaiting a score from JCT before proceeding. For his part, Senate Finance Committee Ranking Member Ron Wyden (D-OR) this week is expected to introduce a proposal that would modify current corporate depreciation schedules – something former Senate Finance Committee Chairman Max Baucus (D-MT) also did during his time in the Senate.

As for tax reform efforts in the House, Ways and Means Committee Chairman Kevin Brady (R-TX) has announced his plans to release a comprehensive tax reform “blueprint” by June of this year as part of Speaker Paul Ryan’s (R-WI) Tax Reform Task Force efforts, while Representative Charles Boustany (R-LA) is expected to continue with his efforts on international tax reform – though whether we will see any action this year on his plan remains to be seen.

Notably, as both House and Senate tax-writers debate the best path forward for tax reform, Republicans lawmakers are pushing for the adoption of Representative Bob Goodlatte’s (R-VA) plan (H.R. 29, Tax Code Termination Act) that would repeal the Internal Revenue Code by 2019 and require Congress to approve a new system of taxation by July of that year. While the future of this legislation is uncertain – and no Senate counterpart exists – there are presently more than 130 co-sponsors in the House.

This Week’s Hearings:

  • Tuesday, April 26: The Senate Finance Committee will hold a hearing titled “Navigating Business Tax Reform.”

Regulatory Activity

Treasury Open to “Intense Comment Period” on Inversion Regulations

Following intense scrutiny and pushback from industry, last week Treasury Deputy Assistant Secretary Bob Stack acknowledged that Treasury “may have missed things” in its latest rulemaking targeting  inversions and the ability of multinational corporations to engage in so-called “earnings-stripping” practices. This acknowledgement comes at the same time that 18 former Treasury officials sent a strongly-worded letter to Treasury Secretary Jack Lew urging his Department to focus on reforming the tax Code, not on inversions as a standalone issue.

In looking ahead, Mr. Stack has promised that Treasury “will have an intense comment period, [and] be listening to taxpayers.” He also suggested that Treasury “want[s] to do things that are both right from a policy point of view and also minimize burdens on companies…[but] [t]he answer to inversions is not to join the race to the bottom so that we have ultimately a zero tax rate.” Notably, Internal Revenue Service (IRS) Commissioner John Koskinen has indicated that the IRS does not intend to put out any “significant” regulations past Labor Day, which creates a rather tight timeframe for Treasury to digest the responses to its proposed regulations and still finalize the regulations this year.

Separately, partly spurred by fallout from the “Panama Papers” fiasco, the Treasury Department has announced that it also soon plans to finalize rules proposed in 2014 that would require the beneficial owners of single-member LLCs to identify themselves to the IRS. According to Treasury Secretary Lew, this, along with widespread implementation of the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project and its proposal to require country-by-country reporting of certain tax information by large multinational corporations will help combat tax evasion.

Article By Brandon C. Roman & Stephanie L. Shaker of Squire Patton Boggs (US) LLP
© Copyright 2016 Squire Patton Boggs (US) LLP

The Challenge of Developing Marketing Initiatives in Law Firms

In many ways, law firms can be tough environments to begin marketing initiatives.  The National Law Review had the opportunity to follow-up with the panelists at the Designing a Wholly Integrated Marketing and Business Development Model Panel at this year’s Marketing Partner Forum conference.  Ian Turvill, Chief Marketing Officer at Freeborn & Peters LLP, Beth Cuzzone, Director of Business Development at Goulston & Storrs and David Burkhardt, Client Service Director at Wyrick Robbins Yates & Ponton LLP were gracious enough to share their thoughts on how to integrate marketing strategies into law firm life.

First of all, in many ways, marketing in law firms is tough because firms are naturally critical of new initiatives and leadership tends to be filled with “professional skeptics” who are quick to point out why something won’t work.  So to be successful, one must be strategic.  Turvill says, “It is difficult to get leadership on board with a strategy, and it will take time for strategies to show results.  So the answer is to take these facts explicitly into account.  I am a big believer in starting small, demonstrating that a particular approach is likely to bear fruit.”  Burkhardt says, “It’s important to monitor and improve client satisfaction and to ensure that our clients are aware of all the services available to them.” Cuzzone offers two golden rules: “the marketing initiatives [should] align with the firm’s strategic direction, culture and values.  The burden is on the marketing professionals to marry the implementation of the strategy with their firm’s people, personalities and budget.”

That means playing to people’s strengths.  Many marketing professionals at law firms have the same complaint: getting attorneys to work on marketing goals can be a difficult ask.  One example of this is content generation for content marketing: getting attorneys to write can be a challenge.  Turvill reminds us that “Recognize first that writing or generating content may not be the right approach for all attorneys.  As someone said to me, ‘you shouldn’t try and teach a pig how to sing opera; the pig will get angry and you’ll simply get muddy.’”  Turvill points out that there are many ways to create content, and “it is not necessary for attorneys to be the laboring oar on content generation.”  External consultants can be helpful, and finding ways for attorneys to have public obligations for writing give them a greater sense of  commitment.  Turvill says, “once the content is generated, then we repurpose that in as many ways possible.”  Cuzzone agrees, saying, “Once an attorney produces one piece of content – members of our department are good at repurposing it in several mediums. We turn a litigation win into a case study . .  . We turn a simple blog post into an executive briefing powerpoint to be given to clients or an article into a checklist, and so on.”  Cuzzone adds that it is very important to have strong writers on your team.

Once you have content, a social media strategy is crucial for getting it out and seen.  However, a good social media strategy is a bit more in-depth. Cuzzone says it’s all about creating a “unique social media personality by posting items that reflect our culture, people and clients … we don’t just post links to our newsletters and press releases. We also started interacting with clients on social media.”  Turvill agrees that social media should be thought-out and deliberate, involving the basic principles of marketing.  Social media channels should be segmented, so various practice groups have their own channels and the content should be tailored with client needs in mind.  Turvill also suggests that content should be differentiated–so there is information available through your social media feeds that is unique to you.  All of social media should be targeted, so that you know who your audience is broken down in terms of their position, industry and interest.

Turvill and Cuzzone agree that in terms of success, it’s important for law firms to know who they are and where they’ve been.  Turvill says, “The single most important technology is a database of a firm’s experience that can be easily searched and then used to generate a listing of representative matters  in response to a request from a client.”  Being able to quickly reference previous work done, and its subject matter is an important tool to have, as Turvill points out, “Outside of references, a client will judge a firm’s appropriateness for a matter based largely on whether they’ve done something like this previously.”  Cuzzone agrees, saying, “much consideration needs to be given internally before developing an external strategy.”

In his role as Client Services Director at Wyrick Robbins, David Burkhardt sees the importance of “listening opportunities.”  Burkhardt sees his job to provide, “intentional and sustained client advocacy.  Client service reviews, interviews and satisfaction surveys are a natural way to engage our clients in conversation.”  These are the opportunities for firms to learn about their performance and how their client’s perceive their service, perhaps using different metrics than law firms are familiar with.  Burkhardt says, “Law firms still have a ways to go to truly make their clients’ voices heard.  Yes, you won the case or closed the deal, but that is not always the ultimate sign of client success.”  Burkhardt points out that things like how your firm communicates with clients can have a big impact on how the client views the transaction. Similarly,something as minor as asking clients if they prefer an email to a phone call–can make a big difference.

As these steps are put in place, in order to demonstrate the success that might otherwise be difficult to measure, it’s important to create a measurement system that can show the growth or change.  Cuzzone says, “Since implementation has a high failure rate in law firm marketing, benchmarks are essential to show progress along the process.”  Being able to demonstrate success, with numbers and data, can go a long way to convincing skeptical law firm leadership that marketing initiatives contributed to the bottom line.

Successful marketing within law firms requires strategy, self-awareness, and a solid understanding of what your clients, and potential clients, want.  Strategically playing to the strengths of your firm for marketing purposes, re-purposing content, having a social media plan, and making sure yardsticks are in place to monitor progress are all important steps in being successful.

Article By Eilene Spear
Copyright ©2016 National Law Forum, LLC

Ohio Following National Trend in Clarifying Permissible Telemedicine Activities

On April 15, 2016, the State Medical Board of Ohio (Ohio Board) released proposed rules outlining the requirements for practitioners to prescribe or cause a prescription drug to be provided to a person who is at a location remote from the practitioner and for whom the practitioner has never conducted a physical examination. The proposed rules were a result of Ohio Revised Code Section 4731.74, enacted March 23, 2016, which tasked the Ohio Board with developing clear standards for practitioners who treat patients through telemedicine platforms. The proposed rules will replace Ohio Administrative Code Rule 4731-11-09.

Ohio defines “the practice of telemedicine” as “the practice of medicine in this state through the use of any communication, including oral, written, or electronic communication, by a physician located outside of this state.”i While this definition only references physicians, the Ohio Board has indicated that the proposed rule will also be applicable to podiatrists and physician assistants who have prescriptive authority. Any practitioner who treats a patient located in Ohio through telemedicine must be licensed by the Ohio Board or possessing a limited Ohio telemedicine certificate issued by the Ohio Board.

With regard to non-controlled substances, the proposed rules will authorize a practitioner to establish a practitioner-patient relationship by the use of appropriate technology in a manner consistent with the minimal standard of care for in-person treatment by a practitioner. This encompasses a medical evaluation and the collection of relevant clinical history as needed to establish a diagnosis, identify any underlying conditions, and identify any contraindications to the treatment recommended or provided. This information must be documented in the patient’s medical record along with confirmation of the patient’s identity, the patient’s physical location, and the patient’s informed consent for treatment through remote examination.

In accordance with the proposed rules, controlled substances may only be prescribed by a practitioner who has met the steps outlined above for authorizing non-controlled substances and one of the following situations exists:

  • The person is an “active patient” of a health care provider who is a colleague of the practitioner and the controlled substances are provided through an on call or cross coverage arrangement between the health care providers. Note that “active patient” means that within the previous 24 months, the practitioner conducted at least one in-person medical evaluation.

  • The person has been admitted as an inpatient or resident of an institutional facility such as a hospital, nursing home, or psychiatric facility.

  • The practitioner is appropriately engaged in the practice of telemedicine as defined in 21 C.F.R. 1300.04.

The Ohio Board’s proposed rules follow similar recent developments from other state licensing agencies, including Indiana, West Virginia and Washington State. The Ohio Board is accepting comments regarding the intended regulations through Thursday, May 12, 2016. For more information on the proposed rules and/or submitting comments about the rules, please contact a Dinsmore health care attorney.

Article By Daniel S. Zinsmaster & Jenna Moran ofDinsmore & Shohl LLP

© 2016 Dinsmore & Shohl LLP. All rights reserved.

1 Ohio Revised Code Section 4731.296.

Fourth Circuit Appeals Court Rules in Favor of Transgender Student

Schools across the country have found themselves at the forefront of the societal debate on the appropriate manner in which to address issues surrounding accommodation of transgendered persons. Conflicting regulatory rulings, contemplated state legislation, and in the case of North Carolina, state prohibitions on accommodation have led to a patchwork of inconsistencies and doubt in relation to a school district’s legal duties.

On Tuesday, April 19, the United States Court of Appeals for the Fourth Circuit ruled in favor of a transgender student, Gavin, who was born female and wished to use the boys’ restroom at his rural Virginia high school. The ruling, G.G. v Gloucester County Sch. Bd., No. 15-2056 (4th Cir., Apr. 19, 2016), is significant, as it marks the first time that a federal appellate court has ruled that Title IX extends to protect the rights of transgender students to use the bathroom that corresponds with the student’s gender identity.

Gavin had previously been granted approval by administration to use the boys’ restroom and did so for a short period of time until the school board adopted a policy prohibiting him from using the bathroom of the gender with which he identifies. Instead, according to board policy, Gavin was required to use the restroom of his biological gender or a separate, unisex restroom. Gavin filed a lawsuit claiming that the school board impermissibly discriminated against him in violation of Title IX and the Equal Protection Clause.

In reaching its decision, the Fourth Circuit Court of Appeals analyzed the Department of Education (“DOE”) regulations implementing Title IX. Those regulations permit schools to provide “separate toilet, locker room, and shower facilities on the basis of sex,” so long as the facilities are comparable. The question the Court faced in light of this regulatory guidance was how to apply the “separate but equal” mandate to transgender individuals.

The DOE argued that the regulation should be interpreted to mean that schools generally must treat transgender students consistent with their gender identity; the Gloucester school board argued for an interpretation that defined students consistent with their biological sex. The Court recognized that the plain language of the regulation clearly permits schools to provide separate toilet, locker room, and shower facilities for its male and female students. By implication, the regulation also permits schools to exclude males from the female facilities, and vice versa. Although the regulation is silent as to how a school should determine whether a transgender individual is a male or female for the purpose of access to sex-segregated restrooms, the Court concluded it is susceptible to two interpretations – determining maleness or femaleness is either a matter exclusively of biology, or it is a matter of gender identity.

The Court agreed that public restrooms, locker rooms, and showers historically have been separate on the basis of sex, and that individuals have a legitimate and important interest in bodily privacy. Nonetheless, the Court stated that these safety concerns or privacy interests should be addressed by the DOE or Congress, and not the Court. Thus, the Court held that it was required to afford deference to the DOE’s interpretation. In so doing, the Court held that an individual’s sex should be determined by reference to the student’s gender identity, i.e., consistent with DOE interpretation.

The Fourth Circuit only addressed the student’s claims with respect to Title IX and whether Title IX extends to gender identity. The case has been remanded back to the district court to decide whether the school board violated Title IX and the Equal Protection clause of the 14th Amendment. However, the Fourth Circuit’s ruling only has precedential value in that circuit (encompassing Maryland, Virginia, West Virginia, North Carolina, and South Carolina), which means those states are now required to follow the DOE’s interpretation of Title IX – that schools generally must treat transgender students consistent with their gender identity.

What Does This Mean for Your District?

Although not binding in the Seventh Circuit, which encompasses Wisconsin, the Fourth Circuit’s decision is instructive as to how Wisconsin school districts should address restroom, locker room, and shower concerns under Title IX. Additionally, the DOE has been aggressive in its efforts to ensure that transgender students can use bathrooms in public schools that correspond with their gender identities. In November 2015, the DOE Office of Civil Rights (“OCR”) issued a letter of findings to a Chicago-area school district demanding that the school district give unfettered locker room access to a transgender student for the facilities of the gender in which the student identified. The OCR gave the school district only 30 days to resolve the matter or risk forfeiting Title IX funding. The school district reached a settlement with OCR prior to having its federal funding rescinded.

School districts should begin the process (if they have not done so already) of developing policies to set the parameters and processes the district will follow when a transgender student seeks guidance and clarity. A district should further ensure that its non-discrimination policy is comprehensive in scope as to all protected classes of students. District policies should address how the district will ascertain the student’s gender identity; what proof, if any, a district will require; the manner in which a student should be addressed and allowed to change his/her name; student dress codes; student records; physical education class; school-sponsored and WIAA-sanctioned sports; and of course, restroom, locker room, and shower facilities.

If your district has a prior policy in place regarding transgender students and gender identity, your district should consider revising the policy to ensure it does not run afoul of Title IX. Ultimately, school districts should be prepared to respond to a request from a student seeking direction as to school processes and procedures. Now is the time to prepare for the inevitable and ensure the district has laid the framework to quickly and fairly respond.

Article By Christine V. Hamiel of von Briesen & Roper, S.C.

©2016 von Briesen & Roper, s.c

San Francisco Becomes First U.S. City To Require Employer-Funded Paid Parental Leave

Mother Bottle Baby.jpgThis month, the San Francisco Board of Supervisors unanimously approved an ordinance that provides six weeks of parental leave for bonding with a new child at 100% of the employee’s rate of pay (subject to certain caps).  The ordinance which will take effect beginning January 1, 2017, will make San Francisco the first U.S. city to require employer-paid parental leave.

The new ordinance will go above and beyond the California state mandate, which currently provides covered employees six weeks of paid family leave at 55% of their pay for baby bonding or to care for a sick family member.  That paid leave is funded by the employee who is taking the leave, through regular payroll contributions to the California State Disability Insurance (“SDI”) program.  The new ordinance requires covered San Francisco employers to pay the remaining 45% of a covered employee’s wages during the six weeks of paid parental leave.

The law’s effective dates are staggered as follows:

Effective Date

Size of Employer

January 1, 2017

50 or more employees regardless of the employees’ location.

July 1, 2017

35 or more employees regardless of the employees’ location.

January 1, 2018

20 or more employees regardless of the employees’ location.

Covered Employers

In determining the size of a covered employer, the ordinance looks at the size of an employer’s total workforce, regardless of the actual location of the employees.  Accordingly, an employer may be subject to the ordinance even if it does not employ 50 (or 20) employees within the city of San Francisco.

The City and other governmental entities are not covered employers under the ordinance.

Covered Employees

Employees (including part-time and temporary employees) are eligible for the fully paid leave if they meet all of the following criteria:

  • Are employed for at least 180 days prior to the start of the leave;

  • Work at least 8 hours per week in San Francisco;

  • Work at least 40% of their weekly hours in San Francisco; and

  • Are eligible for California Paid Family Leave for baby bonding.

Notably, employee eligibility is based on the number of hours the employee works in San Francisco, regardless of his or her residence and regardless of the employer’s work location.

Union employees are not covered if (1) their collective bargaining agreement expressly waives the requirements under the ordinance in clear and unambiguous terms, or (2) the collective bargaining agreement was entered into before the ordinance’s effective date.

How Much Do Employers Need to Pay?

The new ordinance requires covered employers to pay 45% of the employee’s weekly gross wages, up to a maximum of $924 per week, for six weeks.  This cap is based on the California Paid Family Leave program’s 55% wage replacement provision, which is capped at $1,129 per week.  Between the two programs, covered employees should receive 100% wage replacement for a six-week parental leave, up to a total of $2,053/week.

What if the Employee Works for Multiple Employers?

If the covered employee works for more than one employer, the 45% supplemental compensation amount is apportioned between or among the covered employers based on the percentage of the employee’s total weekly wages received from each employer.  For example, if the employee earns $800 per week from Employer A and $200 per week from Employer B for a combined total of $1,000, Employer A pays 80% of the supplemental compensation and Employer B pays 20% of the supplemental compensation.

Can the Employer Require the Use of Vacation?

An employer can require employees to use up to two weeks of unused, accrued vacation to help meet the employer’s obligation under the ordinance.  This vacation time can be counted toward the six-week paid parental leave period.

Anti-Discrimination/Retaliation Provision

Employers may not interfere with, discriminate, or retaliate against employees for exercising their rights under the ordinance.  Terminating a covered employee within 90 days of their request or application for California Paid Family Leave, or taking adverse action against an employee within 90 days of their filing a complaint based on the new ordinance, will raise a rebuttable presumption that such action was taken to avoid the employer’s obligations under the law.

Notice and Posting

Employers will be required to post in a conspicuous place, at any workplace where a covered employee works, a notice informing employees of their rights under the ordinance.  The notice must be in English, Spanish, Chinese, and any other language spoken by at least 5% of the employees at the workplace or job site.

Employer Records

Employers must retain for three years records documenting the supplemental compensation paid to its employees, and make the records available to San Francisco’s Office of Labor Standards Enforcement (“OLSE”) upon request.  Failure to do so will raise a rebuttable presumption that the employer has violated the ordinance.

Damages and Penalties for Violations

The ordinance provides for remedies through the OLSE and through the courts.  The OLSE or “a person or entity acting on behalf of the public as provided for under applicable state law” may bring a civil action in court for alleged violations of the ordinance.

If the OLSE (after an administrative hearing) or court determines that the employer has violated the ordinance, the employer may be required to pay:

  • the total supplemental compensation withheld,

  • penalties to the employee of $250 or three times the amount of supplemental compensation withheld (whichever is greater),

  • penalties of $50 per day to each employee whose rights were deemed violated (e.g., in the instance of a failure to post a notice, this may be several employees per workday),

  • interest, and

  • in the event of a lawsuit, the plaintiff’s attorneys’ fees and costs.

Courts may also provide injunctive relief.  In addition, the OLSE may require the employer to pay the City penalties of $50 per day per “employee or person as to whom the violation occurred or continued.”

Takeaways

Paid leave is an area gaining increasing attention from state and local governments.  San Francisco’s new law comes on the heels of New York state’s enactment of a new paid family leave law and California’s Assembly Bill No. 908 which, beginning in 2018, will raise California’s current family leave pay rate from 55% to 60% or 70% depending on the employee’s wage rate.  The U.S. Department of Labor has also set requirements for federal contractors to provide their employees with paid sick leave.

While San Francisco has gone farther than any other jurisdiction in what it requires employers to provide to new parents, employers should expect similar legislation in more jurisdictions across the U.S. in the years to come.

Employers with employees who work in San Francisco are highly encouraged to review the new ordinance carefully and to consult with an employment attorney to begin exploring what steps they may need to take now to ensure they are able to comply with the law upon its enactment.

We will continue to monitor the increasing and various city, state, and federal laws surrounding paid leave and provide additional analysis and guidance on compliance.

Article By Anna M. Stancu of Sheppard, Mullin, Richter & Hampton LLP
Copyright © 2016, Sheppard Mullin Richter & Hampton LLP.