Category: Administrative & Regulatory

EEOC Expands Reach of Pregnancy Discrimination Act

Michael Best Logo

On July 14, 2014 the Equal Employment Opportunity Commission (“EEOC”) issued its first “enforcement guidance” on the Pregnancy Discrimination Act (“PDA”) since 1983.  One of the more significant aspects of the Guidance is the EEOC’s view of an employer’s duty to accommodate pregnant workers under the Americans with Disabilities Act (ADA).

The EEOC now takes the position that employers must accommodate a pregnant employee’s work restrictions to the same extent it accommodates non-pregnant employees with similar restrictions.

This means, in the EEOC’s view, that employers who offer light duty work to individuals injured on the job must also offer light duty work to pregnant employees with work restrictions, regardless of the fact that the light duty policy only applies, by its terms, to those employees who have restrictions stemming from a work related injury.

The EEOC’s Enforcement Guidance is quite extensive.  The entire Guidance document can be found here.

The EEOC also issued a “Questions & Answers” document, found here.

As if that wasn’t enough summer reading, the EEOC also issued a “Fact Sheet” that summarizes the PDA’s requirements here.

Article By:

Mitchell W. Quick
Of:
Michael Best & Friedrich LLP

Update on USCIS Processing Time for I-526, I-829 and I-924 Petitions

Greenberg Traurig Law firm

On July 17, 2014, USCIS released updated processing times for EB-5 related petitions. The following chart provides the average processing times for cases being adjudicated by the Immigrant Investor Program Office (IPO), as May 31, 2014:

Form Processing Timeframe
as of May 31, 2014

I-526, Immigrant Petition by Alien Entrepreneur

 13.2 months

I-829, Petition by Entrepreneur to Remove Conditions

 7.9 months
I-924, Application for Regional Center 5.4 months

USCIS reminds I-526 applicants that case status can be checked online at www.uscis.gov or through an email to USCIS.ImmigrantInvestorProgram@uscis.dhs.gov.

Article By:

Ali Brodie
Of:
Greenberg Traurig, LLP

Executive Order Extends Workplace Anti-Discrimination Protections to LGBT Workers of Federal Contractors

Jackson Lewis Law firm

Though it took longer than expected, President Barack Obama has signed an Executive Order extending protections against workplace discrimination to members of the lesbian, gay, bisexual, and transgender (“LGBT”) community. Signed July 21, 2014, the Executive Order prohibits discrimination by federal contractors on the basis of sexual orientation or gender identity, adding to the list of protected categories. It does not contain any exemptions for religiously affiliated federal contractors, as some had hoped. Religiously affiliated federal contractors still may favor individuals of a particular religion when making employment decisions.

The President directed the Secretary of Labor to prepare regulations within 90 days (by October 19, 2014) implementing the new requirements as they relate to federal contractors under Executive Order 11246, which requires covered government contractors and subcontractors to undertake affirmative action to ensure that equal employment opportunity is afforded in all aspects of their employment processes. Executive Order 11246 is enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).

The Executive Order will apply to federal contracts entered into on or after the effective date of the forthcoming regulations. OFCCP likely will be charged with enforcement authority.

We recommend that employers who will be impacted by this Executive Order review their equal employment opportunity and harassment policies for compliance with the Executive Order. For example, employers who are government contractors should add both sexual orientation and gender identity as protected categories under these policies and ensure that mechanisms are put in place to ensure that discrimination is not tolerated against LGBT employees.

We will provide additional information and insights into the proposed regulations when they are available.

Article By:

Eric J. Felsberg
Michelle E. Phillips
Of:
Jackson Lewis P.C.

Commerce Department Rulings Spur Oil Export Battle

Covington BUrling Law Firm

As reported in our blog post of last week, the Commerce Department Bureau of Industry and Security (“BIS”) recently determined in two private classifications that lease condensate — a type of stabilized and distilled light crude oil — is not subject to the United States’ broad ban on crude oil exports.  BIS has for years defined “crude oil” in its regulations as “a mixture of hydrocarbons that existed in liquid phase in underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities and which has not been processed through a crude oil distillation tower.”   Although the regulations state that this definition includes lease condensate, BIS appears to have determined that lease condensate that has been distilled is a refined petroleum product that is not subject to the broad ban on crude oil exports from the United States.

While BIS claims that there has been “no change in policy on crude oil exports,” the recent determinations have spurred the debate over whether the U.S. should change its position on crude oil exports.  In particular, Senators Robert Menendez (D-NJ) and Edward Markey (D-Mass.) — who have been vocal opponents of lifting the ban on crude oil exports — wrote a letter to Commerce Secretary Priztker alleging that BIS may have impermissibly approved the exports of lease condensate and demanding copies of the two determinations and information on the legal rationale for approving such exports by July 14, 2014.  Senators Markey and Menendez argue that allowing exports of crude oil would increase reliance on foreign oil and cause domestic gas prices to rise.  However, with U.S. crude oil production surging as a result of the advancements in hydrofracking technology, Senators Lisa Murkowski and Mary Landrieu have championed the effort to reconsider the ban on crude oil exports, which has been in place since the Arab oil embargo and global energy supply shortages of the 1970s.  In particular, Senator Murkowski has issued a report calling for a “renovation” of U.S. energy export policy, which includes an April 2014 white paper in advocating for condensate exports.

While some view BIS’ approval of condensate exports as a step towards a greater liberalization in crude oil export policy, financial analysts such as Morgan Stanley are not bullish on any significant changes occurring before this years’ mid-term elections.  Moreover, recent reports indicate that the White House may not have been aware that BIS was planning to issue such determinations, and therefore this may not represent a conscious effort on the part of the Obama Administration to change crude oil export policy.  Indeed, Secretary Pritzker has confirmed publicly that the rulings were not a change in policy.  However, the Secretary also said that “it’s a mistake to think there isn’t serious conversation going on within the administration about what we should do,” and that the issue of energy exports overall should be “examined holistically from an economic, strategic, and diplomatic standpoint.”  These statements suggest that the Administration is not backing down from the condensate rulings, and is considering the broader policy issues involved in allowing exports of other oil products.

Article By:

E. Donald Elliott
Peter Flanagan
Sarah Liebschutz
Of:
Covington & Burling LLP

 

SEC Settles Charges Against Hedge Fund Adviser for Conducting Prohibited Transactions and Retaliating Against Whistleblower

Vedder Price Law Firm

On June 16, 2014, the SEC settled charges against a hedge fund advisory firm,Paradigm Capital Management, Inc., for engaging in principal transactions with an affiliated broker-dealer without providing effective disclosure to, or obtaining effective consent from, a hedge fund client. The SEC also settled charges against the firm’s owner, Candace Weir, for causing the improper principal transactions.

According to the SEC’s order, Paradigm’s former head trader made a whistleblower submission to the SEC that revealed the principal transactions between Paradigm and the affiliated broker-dealer. The SEC found that, after learning that its head trader had reported potential violations to the SEC, Paradigm engaged in a series of retaliatory actions that ultimately resulted in the head trader’s resignation. This is the first time the SEC has filed a case under its new authority to bring anti-retaliation enforcement actions. According to the SEC, Ms. Weir conducted transactions between Paradigm and an affiliated broker-dealer while trading on behalf of a hedge fund client. The SEC’s order also found that Paradigm failed to provide effective written disclosure to the hedge fund and did not obtain its consent as required prior to the completion of each principal transaction. The SEC’s order stated that Paradigm attempted to satisfy the written disclosure and consent requirements by establishing a conflicts committee to review and approve each of the principal transactions on behalf of the hedge fund. The SEC’s order found that the conflicts committee itself, however, was conflicted, because its two members, Paradigm’s chief financial officer and chief compliance officer, each reported to Ms. Weir and Paradigm’s CFO also served as CFO of the affiliated broker-dealer. The SEC also found that Paradigm’s Form ADV was materially misleading for failing to disclose its CFO’s conflict as a member of the conflicts committee.

The SEC’s order found that Paradigm violated, among other things, Sections 206(3) and 207 of the Advisers Act. The SEC’s order also found that Ms. Weir caused Paradigm’s violations of Section 206(3) of the Advisers Act. Paradigm and Ms. Weir agreed to jointly and severally pay disgorgement of $1.7 million for distribution to current and former investors in the hedge fund, and pay prejudgment interest of $181,771 and a penalty of $300,000. Paradigm also agreed to retain an independent compliance consultant.

Article By:

Investment Services Group
Of:
Vedder Price

Too Good To Be True: FTC’s Crackdown On L’Occitane’s Body Slimming Almond Extracts

Sheppard Mullin Law Firm

L’Occitane Inc’s advertisements for its topically-applied body sculpting almond extracts seemed straightforward: “Almond Shaping Delight 3 out of 4 women saw firmer, lifted skin. This luxuriously lightweight massage gel instantly melts into the skin to help visibly refine and sculpt the silhouette” and “Almond Beautiful Shape Trim 1.3 inches in just 4 weeks. This ultra-fresh gel cream helps to visibly reduce the appearance of cellulite, while smoothing and firming the skin.”

Unfortunately for L’Occitane, an international skin care company with over 150 shops across the U.S., the Federal Trade Commission (FTC) found those claims dubious at best, and earlier this year charged the company with violating the Federal Trade Commission Act (“FTC Act”).

According to the FTC’s complaint, which was filed on January 7, 2014, L’Occitane had been manufacturing, advertising, and selling the two products at issue, “Almond Beautiful Shape” and “Almond Shaping Delight,” in interstate commerce and violated the FTC Act by promoting them as being able to slim and reshape the body. The FTC alleged that L’Occitane did not have sufficient scientific data to support L’Occitane’s advertising claims that the creams could trim the user’s thighs, reduce cellulite, and slim the body in just weeks. The FTC asserted that  L’Occitane based its advertising claims in large part on two unblinded and non-controlled clinical trials and greatly exaggerated the results from one of the studies. The FTC charged L’Occitane with violating Sections 5(a) and 12 of the FTC Act, which declare unfair or deceptive acts or practices unlawful and bar false advertisements likely to induce the purchase of food, drugs, devices, or cosmetics. As part of the final consent order, the FTC fined L’Occitane $450,000 and prohibited it from making future false and deceptive weight-loss claims.

L’Occitane, however, is not the only entity which the FTC has recently fined because of questionable advertising claims. The FTC has also charged Sensa Products, LeanSpa, and HCG Diet Direct with violations of the FTC Act for allegedly misleading the public with unfounded weight loss claims and misleading endorsements relating to their products. These complaints, along with L’Occitane’s, were part of the FTC’s recent “Operation Failed Resolution” initiative, aimed at combating deceptive weight-loss claims.

One of the companies charged, Sensa Products, which claimed weight loss results from one of its dietary supplements, had to pay a $26 million fine for FTC Act violations. As a part of “Operation Failed Resolution,” the FTC also released an updated media guide for spotting deceptive weight-loss claims in advertising, entitled “Gut Check: A Reference Guide for Media on Spotting False Weight-Loss Claims.”

Manufactures and marketers of health products, cosmetics, drugs, and dietary supplements should be mindful of the FTC’s continuing and increasing vigilance in taking action with respect to enforcement of the FTC Act to stop unfounded weight loss claims. Companies making weight-loss claims in advertising and marketing materials must make sure that their claims are defensible and supported by sufficient credible scientific data.

Jordan Grushkin contributed to this article.

Article By:

Theodore C. Max
Of:
Sheppard, Mullin, Richter & Hampton LLP

IRS Introduces New Form 1023-EZ to Streamline Applications for 501(c)(3) Tax-Exempt Status

Drinker Biddle Law Firm

On July 1, 2014, the Internal Revenue Service (IRS) launched a new Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, that is intended to enable small charities to more easily apply for recognition of tax-exempt status under Internal Revenue Code Section 501(c)(3). The IRS has described the new form as a “common sense approach” to easing the filing burdens for small organizations and to shorten the time delays associated with IRS processing. Although not expressly stated, the new form is undoubtedly part of the IRS’s current effort to alleviate the huge backlog of pending applications awaiting IRS review.

What’s the general idea behind the new form?

The concept associated with the Form 1023-EZ is that the existing 26-page Form 1023 is simply unnecessary in the case of most small organizations. As designed, the new form becomes effectively a “registration” for exemption, rather than a comprehensive description of an organization’s activities, operations, governance, finances, etc. The IRS has clarified that the new forms will not undergo substantive review by IRS personnel. Rather, the IRS will defer that review until a later date when organizations are up and running; at that point, the IRS will evaluate whether organizations are functioning as described in their original filings.

When the new form was announced in draft form earlier this year, many industry experts voiced concern about foregoing the important educational and compliance opportunities associated with completing the full Form 1023 in its standard form. Others expressed doubt as to whether the IRS would be able to effectively and consistently perform the type of follow-up reviews asserted as the means for ensuring compliance with exemption standards. Nonetheless, the IRS has forged ahead, presumably under pressure to address its internal processing challenges and perhaps to present some much-needed “taxpayer-friendly” news from the Exempt Organizations Division.

Concurrent with issuing the new form, the IRS released Revenue Procedure 2014-40, which sets forth the procedures for using the new form and IRS’s processing of the same.

Who is eligible to use the new form?

The Revenue Procedure describes the scope of organizations that are eligible to use the form, consisting generally of organizations whose annual gross receipts have not exceeded $50,000 during any of the past three years and whose projected gross receipts for the current year and next two years are below that threshold. In addition, eligible organizations may not have total assets exceeding $250,000. Notably, when the draft Form 1023-EZ was initially announced earlier this year, the thresholds were appreciably higher – annual gross receipts of $200,000 or less and assets of $500,000 or less. In setting the final eligibility requirements, the IRS reduced those thresholds, presumably in response to exempt community (and possibly state charity official) voices expressing concern about this new approach being poorly suited to ferreting out actual or intended noncompliance, as discussed above.

The Revenue Procedure goes on to list other criteria that render an applicant ineligible to use the new form, including foreign organizations, successors to for-profit entities, churches, schools, colleges, universities, hospitals, supporting organizations described in IRC Section 509(a)(3), HMOs, ACOs, and entities maintaining donor-advised funds.

Notwithstanding the foregoing restrictions, the IRS has estimated that as many as 70 percent of organizations applying for 501(c)(3) status will be eligible to use the new form.

What does the new form look like?

Anyone who has tackled the process of preparing a Form 1023 in the past will recall the burden associated with wading through the standard 26-page application, which by necessity has traditionally covered a vast range of organizations (by size, scope and character) falling under the umbrella of 501(c)(3) status. By comparison, the new Form 1023-EZ is only three pages long and calls for:

  • Identifying information;
  • Form of entity under applicable state law, including check-box attestations regarding inclusion of appropriate language in pertinent organizational documents;
  • General information regarding the organization’s activities, using NTEE classification codes, check-box attestations regarding compliance with basic exemption requirements, and yes-or-no answers to high-level questions presumably aimed at fleshing out potentially at-risk conduct;
  • A check-box approach for attesting to public charity status; and
  • A check-box approach for organizations seeking reinstatement after losing their exemption due to failure to file annual information returns for three consecutive years.

A copy of the new form is available here. The accompanying instructions can be found here.

How is the new Form 1023-EZ to be filed?

Form 1023-EZ must be filed electronically, using the www.pay.gov website. A $400 user fee applies. Once filed, the IRS process will consist of determining whether an application is complete, meaning that the applicant has provided a response to each line item in the form. If a form is incomplete, the IRS may request additional information accordingly. Once complete, the IRS will accept the form for processing.

What if we have a pending Form 1023 already in the queue at the IRS?

If an organization has already submitted Form 1023 to the IRS, it may nevertheless submit Form 1023-EZ if its Form 1023 has not yet been assigned for review. In that case, the IRS will treat the Form 1023 as withdrawn and will instead process the organization’s Form 1023-EZ.

Corey Kestenberg contributed to this article.

Article By:

Linda S. Moroney
T.J. Sullivan
Taylor A. Romigh
Of:
Drinker Biddle & Reath LLP

Department of State Releases August 2014 Visa Bulletin

Morgan Lewis logo

The bulletin shows minor advancement in the EB-2 category for applicants chargeable to India and China as well as significant advancement in the EB-3 category for applicants chargeable to China and the Philippines, minor advancement for applicants chargeable to India, and no change for applicants chargeable to Mexico or the Rest of the World.

The U.S. Department of State (DOS) has released its August 2014 Visa Bulletin. The Visa Bulletin sets out per country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the respective cutoff dates specified by the DOS.

What Does the August 2014 Visa Bulletin Say?

In August, the cutoff date for applicants in the EB-2 India category will advance by a little more than four months, while the cutoff date for applicants in the EB-2 China category will advance by a little more than three months. Meanwhile, the cutoff date in the EB-3 China category will advance by slightly more than two years, while the cutoff date in the EB-3 Philippines category will advance by 17 months. The EB-3 India category will advance by one week, while the cutoff date for EB-3 Mexico and the Rest of the World will remain unchanged. The cutoff date in the F2A category for applicants from all countries will also remain unchanged.

EB-1: All EB-1 categories will remain current.

EB-2: The cutoff date for applicants in the EB-2 category chargeable to India will advance by a little more than four months to January 22, 2009. The cutoff date for applicants in the EB-2 category chargeable to China will advance by slightly more than three months to October 8, 2009. The EB-2 category for all other countries will remain current.

EB-3: The cutoff date for applicants in the EB-3 category chargeable to India will advance by one week to November 8, 2003. The cutoff date for applicants in the EB-3 category chargeable to China will advance by a little more than two years to November 1, 2008. The cutoff date for applicants in the EB-3 category chargeable to the Philippines will advance by one year and five months to June 1, 2010. The cutoff date for applicants chargeable to Mexico and all other countries will remain unchanged at April 1, 2011.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: November 1, 2008 (forward movement of two years and one month)
India: November 8, 2003 (forward movement of one week)
Mexico: April 1, 2011 (no movement)
Philippines: June 1, 2010 (forward movement of one year and five months)
Rest of the World: April 1, 2011 (no movement)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The EB-2 category for applicants chargeable to all countries other than China and India has been current since November 2012. The August Visa Bulletin indicates no change, meaning that applicants in the EB-2 category chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through August 2014.

China

The July Visa Bulletin indicated a cutoff date of July 1, 2009 for EB-2 applicants chargeable to China. The August Visa Bulletin indicates a cutoff date of October 8, 2009, reflecting forward movement of three months and one week. This means that applicants in the EB-2 category chargeable to China with a priority date prior to October 8, 2009 may file AOS applications or have applications approved in August 2014.

India

In December 2013, the cutoff date for EB-2 applicants chargeable to India retrogressed significantly to November 15, 2004 because of unprecedented demand in this category. This cutoff date remained constant through June. There was significant movement forward of nearly four years in the July Visa Bulletin. The August Visa Bulletin indicates a cutoff date of January 22, 2009, reflecting forward movement of another four months and three weeks. This means that applicants in the EB-2 category chargeable to India with a priority date prior to January 22, 2009 may file AOS applications or have applications approved in August 2014.

Developments Affecting the EB-3 Employment-Based Category

China

In late 2013 and early 2014, the cutoff date for EB-3 applicants chargeable to China advanced significantly to generate demand in this category. In June, to regulate demand, this cutoff date retrogressed by six years to October 1, 2006 and remained the same for July. The August Visa Bulletin indicates a cutoff date of November 1, 2008, reflecting forward movement of two years and one month. This means that only applicants in the EB-3 category chargeable to China with a priority date prior to November 1, 2008 may continue to file AOS applications or have applications approved in August 2014.

India

The July Visa Bulletin indicated a cutoff date of November 1, 2003 for EB-3 applicants chargeable to India. The August Visa Bulletin indicates a cutoff date of November 8, 2003, reflecting forward movement of one week. This means that only EB-3 applicants chargeable to India with a priority date prior to November 8, 2003 may file AOS applications or have applications approved in August 2014.

Rest of the World

From September 2013 through April 2014, the cutoff date for EB-3 applicants in the worldwide category advanced by 3.75 years. In June, to regulate high demand, the cutoff date in this category retrogressed by 549 days to April 1, 2011. The August Visa Bulletin indicates no change to this cutoff date. This means that only applicants in the EB-3 category chargeable to the Rest of the World with a priority date prior to April 1, 2011 may file AOS applications or have applications approved in August 2014.

Developments Affecting the F2A Family-Sponsored Category

In March, as a result of heavy demand in the F2A category from applicants chargeable to Mexico, the cutoff date in this category retrogressed significantly to April 15, 2012. In June, this cutoff date retrogressed again to March 15, 2011 and remained the same in July. The August Visa Bulletin indicates no change to this cutoff date. This means that only those applicants from Mexico with a priority date prior toMarch 15, 2011 will be able to file AOS applications or have applications approved in August 2014.

During fiscal year 2013, in an effort to generate demand in the F2A category from applicants from all countries other than Mexico, the cutoff date in this category advanced significantly. This advance resulted in a dramatic increase in demand, followed in June by a further retrogression of the cutoff date to May 1, 2012. The August Visa Bulletin indicates no change to this cutoff date. This means that only those F2A applicants from countries other than Mexico with a priority date prior to May 1, 2012will be able to file AOS applications or have applications approved in August 2014. Further retrogression of the worldwide F2A category should not be ruled out.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the August 2014 Visa Bulletin in its entirety, please visit the DOS website.

Article By:

Eric S. Bord
Lisa Stephanian Burton
Tracy Evlogidis
Malcolm K. Goeschl
Eleanor Pelta
A. James Vázquez-Azpiri
Of:
Morgan, Lewis & Bockius LLP

SEC Settles Civil Foreign Corrupt Practices Act (FCPA) Action Against Two Former Oil Services Executives

Katten Muchin

On the eve of a trial which was scheduled to begin this week, the Securities and Exchange Commission settled a civil Foreign Corrupt Practices Act (FCPA) case it brought against two former oil services executives. The case was an outgrowth of anindustry-wide investigation the SEC had initially commenced beginning in 2010.

In February 2012, the SEC filed a complaint against Mark A. Jackson, who was the former CEO and CFO of Noble Corporation, and James J. Ruehlen, former Director and Division Manager of Noble’s Nigerian subsidiary, alleging that they authorized the payment of bribes to customs officials to process false paperwork that purported to show the export and re-import of oil rigs, which was necessary under the requirements of Nigerian law. In fact, the rigs had never been moved. The SEC alleged that the scheme was part of a design to save Noble from losing business and incurring costs associated with exporting rigs from Nigeria and re-importing them under new permits. The complaint asserted violations of the anti-bribery and books and records provisions of the FCPA. The complaint also detailed the fact that Jackson had refused to cooperate during Noble’s internal investigation of the matter and had asserted his Fifth Amendment rights and refused to testify during the SEC investigation.

The settlement with Jackson and Ruehlen was the last in a lengthy saga of FCPA actions against Noble and its former employees. Noble was initially charged with FCPA violations in a civil action in 2010. The company settled, agreeing to pay more than $8 million in fees. The SEC filed charges against Jackson and Ruehlen in 2012 following the corporate settlement and also filed charges against Thomas F. O’Rourke, the former controller and head of internal audit at Noble. O’Rourke quickly settled and agreed to pay a penalty.

Despite pursuing the action for more than two years and alleging serious wrongdoing by the defendants, including responsibility for an extensive bribery scheme, the SEC agreed to settle with Jackson and Ruehlen just two days before their trial was to commence with an injunction against violating the books and records provision of the FCPA. Although Noble had settled its own case for a hefty penalty, neither Jackson nor Ruehlen were required to pay a fine, concede a violation of the bribery provisions of the FCPA nor agree to restrictions on employment.

SEC v. Jackson et al., No. 4:12-c-00563 (S.D. Tex. Jul. 7, 2014).  

Article By:

Emily Stern
Ashley H. Jones
Of:
Katten Muchin Rosenman LLP

Proposed Legislation Introduced to Override Hobby Lobby Ruling

Barnes Burgandy Logo

On July 9th, Senator Democrats introduced proposed legislation known at the Protect Women’s Health from Corporate Interference Act (Act) in an effort override the U.S. Supreme Court’s Hobby Lobby decision, which was previously discussed in our June 30th Alert.

The Act would reinstate the Affordable Care Act’s contraceptive coverage obligations imposed on employers, requiring employers to provide such health insurance. The Act specifically is targeted at the Supreme Court’s 5-4 Hobby Lobby decision, which held closely-held companies (those that are family-owned or have a limited number of shareholders) can exercise their freedom of religion protections to avoid paying for such contraceptive coverage.  Senator Tom Harkin (D-Iowa), one of the three Senators who introduced this legislation, explained that houses of worship and religious non-profits would remain exempt from providing contraceptive coverage under the Act.

The introduction of this legislation in the Senate follows the announcement by two House Democrats last week, indicating they would introduce similar bills in response to the Hobby Lobby decision. If the legislation were to pass the Senate, many experts anticipate it will fail in the Republican-controlled House.

Article By:

Tina A. Syring
Of:
Barnes & Thornburg LLP