Category: Health

Surprise Billing Regulations: Out-Of-Network Providers at In-Network Facilities

On 1 July 2021, the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the Departments) issued an interim final rule (IFR)1 implementing certain provisions of the No Surprises Act (the Act).2 Congress enacted the Act in 2020 to protect patients from “surprise medical bills” and to limit so called “out-of-network” cost sharing bills for patients receiving care from providers who are not “in-network” participating providers in the patient’s health plan. The Act is applicable to emergency services, non-emergency services furnished by out-of-network providers at certain in-network health care facilities, and air ambulance services furnished by out-of-network providers. The IFR provides additional guidance to health care providers and facilities, including hospital and freestanding emergency departments, for complying with the Act. Comments on the IFR are due on 7 September 2021. Assuming no further changes from the Departments following the comment period, the requirements for providers as outlined in the IFR will be effective as of 1 January 2022.

For in-network providers and facilities, the Act and the IFR will require advance planning with respect to certain public and patient-specific disclosures. In-network providers and facilities will also need to prepare patient notice and consent forms in order to comply with updated surprise billing protections. Further, such providers will need to be actively coordinating with plans and insurers prior to seeking payment in order to determine whether notice and consent and/or balance billing prohibitions are triggered.

Key takeaways include:

  • The IFR extends surprise billing protections to non-emergency services furnished by an out-of-network provider at in-network health care facilities.
  • Out-of-network providers may not bill patients for an amount that exceeds in-network cost sharing, as determined in accordance with the balance billing provisions, when furnishing services at an in-network health care facility.
  • Such balance billing prohibitions will not apply if the patient has been provided with adequate notice as has agreed to waive such requirements pursuant to a valid consent, with certain enumerated exceptions.
  • Providers and facilities will further be required to make certain additional disclosures regarding protections against balance billing, including written disclosures to patients and prominent public displays on-site and online.

BACKGROUND

The Act provides protections from surprise medical bills for certain emergency and non-emergency services. The Act protects patients from surprise medical bills for emergency services from the point of evaluation and treatment until the patient can be stabilized and can consent to transfer to an in-network facility. Such protections apply to three emergency categories (1) emergency services received at an out-of-network facility, (2) emergency services rendered by an out-of-network individual provider, such as an emergency physician, regardless of whether the facility is in- or out-of-network, and (3) emergency services provided by out-of-network air ambulances. Additionally, patients will be protected from surprise medical bills for non-emergency services (1) provided by an out-of-network provider at an in-network facility and (2) out-of-network air ambulance services.3 For services subject to these protections, the Act limits cost sharing for out-of-network services to in-network levels and requires such cost sharing to count toward any in-network deductibles and out-of-pocket maximums.4

The Act effectively repeals the “Greatest of Three Rule” framework. Prior to the Act, the Affordable Care Act (ACA) enacted provisions requiring that insurance companies hold out-of-network patients harmless as if they were in-network. The ACA’s implementing regulations required insurers or private health plans to reimburse providers at the greatest of three enumerated amounts (the Greatest of Three Rule): (1) the rate generally reimbursed by the plan of insurance for out-of-network providers (i.e., the usual, customary, and reasonable amount); (2) the median in-network rate; or (3) the Medicare rate. The Act will effectively repeal the Greatest of Three Rule framework and replace it with a new reimbursement regime for emergency and certain non-emergency out-of-network services. The Act directs the Departments to establish through rulemaking the methodology that a group health plan or health insurance issuer offering group or individual health insurance coverage must use to determine the “qualifying payment amount” used to determine a patient’s coinsurance. For provider reimbursement where there is no governing state law or agreement between the payor and the provider, the Act establishes a baseball style arbitration that takes into account the qualifying payment amount. To learn more about how the No Surprises Act and IFR address reimbursement, please see our prior alerts here and here.

IMPACT FOR OUT-OF-NETWORK PROVIDERS AT IN-NETWORK FACILITIES

In the IFR, the Departments contend that surprise billing is a significant issue across all types of coverage and throughout the country, particularly certain specialties that are not “actively shoppable by consumers,” such as anesthesiology or laboratory providers, which often bill as out-of-network at in-network facilities.5 While the IFR focuses in part on emergency services, it also focuses on non-emergency services in certain circumstances, specifically extending surprise billing protections to non-emergency services furnished by an out-of-network provider at an in-network health care facility.6 Specifically, if a health plan provides benefits for certain non-emergency items and services at a facility, the plan must cover items and services furnished to a plan enrollee by an out-of-network provider with respect to a visit at an in-network health care facility, including meeting requirements regarding cost-sharing, payment amounts, and processes for resolving billing disputes. For providers, the IFR clarifies the Act’s requirement that out-of-network providers or facilities may not bill patients for an amount that exceeds in-network cost sharing. This cost-sharing is determined in accordance with the balance billing provisions. The balance billing prohibition is applicable when an out-of-network provider furnishes services at an in-network health care facility. The prohibition specifically includes those off-site out-of-network providers, such as laboratories, who furnish items or services that a patient receives as part of a visit to the in-network facility.7 The prohibitions on balance billing do not apply if certain notice is provided to the patient and the patient waives the balance billing protections with respect to the particular out-of-network provider.8

NOTICE AND CONSENT REQUIREMENTS

The IFR details the following specific standards around the notice and consent requirements for out-of-network providers providing items or services at in-network facilities.

  • The notice must be tailored to the individual patient in each circumstance, including identification of the provider or facility and a good faith estimate of the amount to be billed.9
  • A facility may provide a single notice for multiple out-of-network providers, provided that (1) each provider’s name is specifically listed, (2) each provider includes an individual estimate of the items and services they are individually furnishing, and (3) the patient has the option to consent to waive balance billing protections with respect to each individual provider separately.10
  • The notice and consent forms must be provided together and cannot be attached to or incorporated into any other documents.11
  • The notice be provided within an appropriate timeframe for the patient to make an informed decision. For example, for appointments scheduled in advance, notice should be made at least 72 hours before the date of the appointment, or if an appointment is made on the day of, notice should be given at least three hours prior to furnishing the items or services.12
  • The notice must make clear that the good faith estimate and patient consent do not constitute a contract or a binding commitment to the estimated charge.13
  • The notice must include information regarding whether prior authorization or other care management limitations may be required prior to the provision of services.14
  • The notice must clearly state that the patient is not required to consent to receive such items and services, and that the patient may instead seek care from an available in-network provider or facility and that in such cases, in-network cost-sharing amounts will apply.15
  • For post-stabilization services furnished by an out-of-network provider at an in-network emergency facility, the notice must include a list of in-network providers at the facility who are able to furnish the same items or services and state that the patient may be referred at their option to such provider(s).16
  • The Departments also clarified that an in-network facility may provide the notice on behalf of an out-of-network provider.17
  • Notice must be available in any of the 15 most common languages in the geographic region in which the facility is located. If an individual cannot understand any of the provided languages, the provider or facility must obtain a qualified interpreter.18
  • A patient may demonstrate consent by signature of the consent form, and may revoke consent by notifying the provider or facility in writing prior to the furnishing of items or services.19
  • Obtained consent must be maintained for a minimum of seven years.20

EXCEPTIONS TO NOTICE AND CONSENT REQUIREMENTS

In limited circumstances under the Act and as outlined in the IFR, notice and consent requirements do not apply for certain types of non-emergency items or services. In these situations, the prohibition on balance billing and in-network cost-sharing requirements will continue to apply. Specifically, notice and consent requirements do not apply to (1) ancillary services, including items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology; (2) items and services provided by assistant surgeons, hospitalists, and intensivists; (3) diagnostic services, including radiology and laboratory services; and (4) items and services provided by an out-of-network provider where there is no in-network provider who can furnish such item or service and the applicable facility.21 Further, notice and consent requirements do not apply for items or services furnished as a result of unforeseen, urgent medical needs arising when post-stabilization services are furnished and the out-of-network provider or facility has already satisfied the notice and comment criteria.22

DISCLOSURE REQUIREMENTS

In addition to notice and consent requirements, the Act also requires providers and facilities to provide general public disclosures regarding patient protections against balance billing, including written disclosures to patients and postings both physically displayed in a prominent location at the location of the provider or facility and on a public website. These requirements will apply for plan years beginning on or after 1 January 2022. The disclosure provided to patients must include clear and understandable information about applicable state requirements and how to contact appropriate federal and state authorities if the patient believes the provider or facility has violated any applicable requirements for balance billing.23 This disclosure may be on a one-page form and should be provided no later than at the time the provider requests payment from the patient (or if no payment is requested from the patient, at the time a claim for payment is submitted). The Departments suggest that this disclosure may be provided earlier, such as at the time when an individual schedules an appointment or when other standard notice disclosures, such as the Notice of Privacy Practices, are provided.24 The IFR states that the Departments will separately issue a model disclosure notice for providers and facilities. Notably, providers that do not furnish items or services at a health care facility or in connection with visits at a health care facility are not required to make such disclosures, and disclosures are only required for patients who are participants, beneficiaries, or enrollees of group health plans or insurance coverage offered by an insurer.25 Further, in order to streamline the documents provided to patients, the IFR clarifies that a provider may satisfy the above disclosure requirements if it has a written agreement with the facility that requires the facility to provide a single disclosure including information about balance billing requirements that are applicable to both the facility and the provider.26

ENFORCEMENT AND COMPLIANCE

The Act authorizes states to enforce certain requirements of the Act and requires the Department of Health and Human Services (HHS) to enforce if a state fails to substantially enforce the requirements.27 Failure to meet the requirements of the Act may result in civil monetary penalties in states where HHS directly enforces balance billing requirements. Accordingly, out-of-network providers and facilities should take necessary precautions to ensure that their billing practices are in alignment with the Act and IFR guidance. For example, the Departments recommend that out-of-network providers that furnish non-emergency services confirm whether the facility at which they are providing such services is in-network or not to determine whether balance billing protections will apply. Additionally, out-of-network providers should be in communication with applicable plans and insurers when limitations on cost-sharing do not apply, including when proper notice and consent have been obtained. The Departments further emphasize that out-of-network providers providing non-emergency services may need to alter current billing practices to ensure they are not running afoul of the Act’s requirements. In particular, out-of-network providers may need to bill a health plan or insurer before billing an individual directly, in order to determine whether the plan covers the applicable non-emergency services at issue and thus triggers the applicable requirements.28

CONCLUSION

Out-of-network providers who furnish services at in-network facilities, as well as in-network facilities that allow out-of-network providers to furnish services at their facilities, should be prepared to operationalize notice, consent, and disclosure requirements for out-of-network providers providing services in their facilities. Before providing services at a given location, out-of-network providers that furnish non-emergency services should confirm whether the facility at which they are providing such services is in- or out-of-network to determine whether balance billing protections will apply. Additionally, providers may need to alter current billing practices to meet the requirements of the Act. In particular, providers will need to proactively communicate with plans and insurers when limitations on cost-sharing do not apply, including when proper notice and consent have been obtained.

Our health care practice routinely assists health systems, hospitals, and other providers and suppliers with legal advice and strategic considerations, including providing advice on reimbursement matters and preparing clients’ public comments on proposed and final rulemakings.

Footnotes

1 Requirements Related to Surprise Billing; Part I, Office of Personnel Management, Dep’t of Treasury, Dep’t of Labor, Dep’t of Health and Human Serv., 86 Fed. Reg. 36,872 (July 13, 2021) (Interim Rule).

2 The No Surprises Act was signed into law as part of the Consolidated Appropriations Act of 2021 (H.R. 133; Division BB – Private Health Insurance and Public Health Provisions).

3 See Interim Final Rule at 36,878, 36,882-83.

4 Interim Rule at 36,877.

5 Id. at 36,922.

6 Id. at 36,882.

7 Id. at 36,904-05.

8 Id. at 36,905.

9 Id. at 36,906.

10 Id. at 36,907.

11 Id. at 36,906.

12 Id. at 36,907.

13 Id. at 36,908.

14 Id.

15 Id.

16 Id.

17 Id. at 36,906.

18 Id. at 36,909-10.

19 Id. at 36,909.

20 Id. at 36,911.

21 Id.

22 Id. at 36,910.

23 Id. at 36,912.

24 Id. at 36,914.

25 Id.

26 Id. at 36,915.

27 Id. at 36918.

28 Id. at 36,905.

Copyright 2021 K & L Gates
For more articles about healthcare coverage, visit the NLR Healthcare Law section.

CDC Changes Masking Guidance for Fully Vaccinated Individuals

The Centers for Disease Control (CDC) announced on July 27, 2021 that it will adjust its advice to recommend that vaccinated people in substantial or high transmission areas of COVID-19 (defined below) wear masks in indoor public spaces. This guidance will substantially alter the CDC’s May 13 guidance that largely exempted fully vaccinated individuals from the indoor mask requirement. There has been no change in the outdoor masking recommendations at this time. In changing its masking recommendations, the CDC asserts that current scientific information indicates that the delta variant can be spread despite vaccine status, warranting an adjustment to its prior guidance.

Below is a summary of the updated guidance based on the media telebriefing:

  • In public indoor settings in areas of substantial or high transmission, all are to wear masks – including fully vaccinated individuals.
  • All individuals in K-12 schools must wear a mask, regardless of vaccination status, including teachers, staff, and visitors.
  • There should be a continuing effort to strongly encourage vaccination to reduce the spread of COVID-19, including the delta variant.
  • Community leaders should encourage universal masking and vaccination nationwide, regardless of whether or not in a substantial or high transmission area.

Despite the updated guidance, CDC Director Dr. Rochelle Walensky emphasized that wearing a mask is a “personal choice” and no “stigma” should attach to the decision whether or not to wear a mask. Moreover, Dr. Walensky acknowledged that the renewed indoor masking requirement would “weigh heavily” with individuals who are already fully vaccinated. The White House has not provided additional comment on the CDC guidance as of this writing.

The definition of a substantial or high transmission area is based on the CDC’s COVID-19 Data Tracker, which tracks the level of community transmission by county nationwide. Notably, the updated guidance does not apply to areas of moderate or low transmission.

While the CDC guidance is not mandatory, employers are advised to evaluate their workplace policies to determine the extent to which it may be prudent to alter workplace masking requirements. Additionally, states and cities are free to institute their own legally binding masking requirements, regardless of the CDC guidance. Employers are advised to closely monitor state and local developments. We also note that it is unclear what, if any, impact the CDC guidance will have on OSHA’s recent healthcare emergency temporary standard for healthcare employers or its enforcement of its safe workplace standards.

©2021 von Briesen & Roper, s.c

Article By John A. Rubin and Robert J. Simandl at von Briesen & Roper, s.c.

For more CDC COVID-related guidelines, see the National Law Review Coronavirus News section.

“Hope Is On The Horizon”: California Governor Gavin Newsom Announces COVID-19 Vaccine Distribution Plan

N.B.  Concurrent with the posting of this article, the Vaccines and Related Biological Products Advisory Committee of the Food and Drug Administration (“FDA”) has decided to recommend to the FDA that the FDA approve the emergency use authorization applications submitted by Pfizer and BioNTech.  It is being reported that the FDA may formally approve the applications as soon as tomorrow, Friday, December 11, 2020.  More detail regarding the recommendation and the FDA’s decision will be discussed in a follow-up article.

California Governor Gavin Newsom announced that, “Hope is on the horizon with the [COVID-19] vaccination. We continue to accelerate our planning and preparedness for a safe and equitable vaccine distribution.”  As noted by the Governor, California expects to receive a little more than two million doses of the vaccine this month including 327,000 doses from pharmaceutical company, Pfizer, and 2.6 million doses from biotechnology maker, Moderna.

Now that there are estimated dates of delivery for both Pfizer’s and Moderna’s COVID-19 vaccines and it appears that the FDA – possibly as soon as tomorrow, Friday, December 11, 2020 – will be granting an emergency use authorization to Pfizer and BioNTech for the distribution of their COVID-19 vaccines based upon today’s recommendation from the FDA’s Vaccines and Related Biological Products Advisory Committee, California’s vaccine distribution plan (“Plan”) has claimed the public spotlight.

The following reviews California’s vaccine distribution strategy and highlights the populations receiving priority status for vaccination with the first round of vaccine doses scheduled to be delivered to California this month.

CALIFORNIA’S VACCINE DISTRIBUTION PLAN AND ALLOCATION GUIDELINES FOR COVID-19 VACCINE

During a December 3, 2020 online press conference, Governor Newsom described California’s “COVID-19 Vaccine Distribution Plan” (the “Plan”) and the California Department of Public Health (“CDPH”) “Allocation Guidelines for COVID-19 Vaccine During Phase 1A”  (the “Allocation Guidelines”) as putting healthcare workers[1] and vulnerable patient populations at the front of the line for vaccination.

A. Vaccination Priorities: A Tiered Vaccine Distribution Blueprint

According to the Allocation Guideline’s tiered vaccine distribution blueprint, vaccines will first be provided to (i) residents of skilled nursing facilities, assisted living facilities, and similar long-term care settings for older or medically vulnerable individuals; and (ii) healthcare workers who come into direct contact with patients positive for COVID-19 and those at the highest risk of exposure – e.g., paramedics, emergency medical technicians, and healthcare workers at acute care, correctional and psychiatric hospitals and nursing homes.  Next, healthcare workers in intermediate care facilities, home settings, and primary care clinics (e.g., federally qualified health centers, rural health centers, correctional facility clinics, and urgent care clinics) will be given access to the vaccine.  Finally, the Allocation Guideline’s “third tier” healthcare workers in less risky healthcare settings – e.g., dental offices, laboratories, and specialty clinics – will be eligible for vaccination.

Once vaccine is distributed to healthcare workers based upon the foregoing priority categories, the Plan directs the State to broaden vaccination access to other groups including essential workers – e.g., farm laborers, police officers, child care staff and teachers – and communities at increased risk of COVID-19, including minority communities disproportionately affected by COVID-19.  During a November 23, 2020 press conference, Governor Newsom said, “mass vaccinations are unlikely to occur anytime soon. For the back of the envelope purposes, March, April, May, June, July, where we start to scale, and we start getting into the subsequent phases (of vaccine distribution).”

B. Distribution Of Vaccine – The Mechanics.

According to the Plan, the State-wide distribution of vaccine will be based upon a multi-level and multi-step process designed to promote the equitable distribution of the vaccine and to protect, “California’s critical and vulnerable populations, especially during the early phases when vaccine supply will be limited.” See, Plan, pg. 35.

As outlined by Governor Newsom during his December 3, 2020 press conference, California’s distribution process is comprised of six distinct steps as set forth below:

Step One

Enroll Vaccine Providers and Establish Allocation Guidelines.  The first step involves enrolling healthcare providers to conduct vaccinations and developing guidelines for the allocation of the initial 327,000 doses of Pfizer’s vaccine among six vaccine regions.  As established by CDPH, the six regions and their respective allocation of Pfizer vaccine doses are as follows:

  1. Region I (126,750):  Los Angeles, Orange, San Diego, San Luis Obispo, Santa Barbara, Ventura;

  2. Region II (80, 497):  Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Shasta, Solano, Sonoma;

  3. Region III (8,592):  Butte, Colusa, Glenn, Lassen, Modoc, Plumas, Santa Cruz, Sierra, Siskiyou, Sutter, Tehama, Trinity, Yuba;

  4. Region IV (35,145):  Alpine, Amador, Calaveras, El Dorado, Nevada, Placer, Sacramento, San Joaquin, Stanislaus, Tulare, Tuolumne, Yolo;

  5. Region V (16,706):  Fresno, Kern, Kings, Madera, Mariposa, Merced; and

  6. Region VI (59,910): Imperial, Inyo, Mono, Riverside, San Bernardino.

As noted above, the Allocation Guidelines were adopted and distributed by the CDPH on December 5, 2020.  In addition, the CDPH has identified the following hospitals as participating in the vaccination process: Cedars Sinai Medical Center, Los Angeles; Mercy Medical Center, Redding; Rady Children’s Hospital, San Diego; UCD Health, Sacramento; UCSF Medical Center, San Francisco; Valley Children’s Healthcare, Madera; and Zuckerberg San Francisco General Hospital.[2]  According to CDPH, these facilities were chosen based on their ultra-cold storage capabilities, as the Pfizer vaccine must be stored in negative 80-degree freezers, at large “highest-risk” healthcare population and/or their willingness to redistribute vaccines outside their facility and network. The final criteria was one of geography, as the Department said these places were chosen to be spread across the state as evenly as possible.[3]

Step Two

Review Vaccine Orders Submitted by Local County Departments of Health.  Under the Plan, local county departments of health are obligated to submit distribution plans for their respective geographic regions.  Such plans must include various elements including a description of the region’s “vaccine administration capacity” – such capacity being determined based upon multiple factors including the number of registered vaccination providers in the region; the number of “point of dispensing” (“POD”) sites available to vaccinate emergency responders and critical infrastructure personnel in the region; and the COVID-19 vaccine storage capacity at each POD.

Steps Three and Four

Local County Orders.  Steps 3 and 4 involve the process of preparing and filling of the local county orders.

Step Five

Vaccine Delivery Logistics.  Shipping companies like UPS and FedEx will drop off the vaccine to hospitals and vaccine providers who already have approved cold-chain storage units. To increase storage capacity, the State has purchased additional cold storage units for providers to use.

Step Six

Vaccine Administration.  Once again, the 327,000 Pfizer vaccine doses will be distributed and administered in accordance with the Allocation Guidelines as described above. As explained by Governor Newsom, notwithstanding the initiative of the vaccination process, mask and social distancing rules will remain in place.  Over time, this will change; however, as an initial matter, it is still unclear as to whether vaccinated individuals are still capable of spreading the virus to others.

A CLOSER LOOK:  VACCINE DISTRIBUTION CHALLENGES.

As noted above, the execution of the Plan and the delivery of vaccine to the priority populations identified in the Allocation Guidelines fall on the shoulders of the local county departments of health. Although each county will experience its own unique challenges during the vaccination process – such challenges could vary significantly from one county to the next given the extreme demographic, geographic and other differences between the counties – experts have identified certain common challenges that will likely create significant hurdles for all counties to overcome.

1. “Colder than Winter in Antarctica.”

As has been widely reported and discussed, the Pfizer vaccine needs to be kept extremely cold: minus 70 degrees Celsius, which is, “colder than winter in Antarctica.”[4]  By contrast, Moderna has said that its vaccine needs to be frozen too, but only at minus 20 Celsius, more like a regular freezer.[5]

Given the need to maintain the Pfizer vaccine at ultra-low temperatures, the storage and transportation of the vaccine presents significant logistical challenges.  In order to meet this challenge, counties and healthcare providers in California and elsewhere have been scrambling to get their hands on ultra-cold freezers.  For example, in the case of Los Angeles County (“LAC”), the LAC Department of Public Health purchased five ultra-cold freezers in addition to three from the State and eight purchased by the LAC Department of Health Services.  These 16 freezers will be placed in strategic locations across LAC; however, the eight LAC Department of Health Services freezers will be dedicated to staff and patients at the LAC’s four public hospitals and 27 health clinics.

2. Multi-Dose Vaccines and Compliance Challenges.

In addition to the cold storage and transportation challenges described above, both the Moderna and the Pfizer vaccines present significant challenges as multi-dose vaccines – i.e., vaccines that require more than one dose to reach maximum effectiveness.

Multi-dose vaccines present a number of challenges that will likely complicate the vaccination process.  For example, vaccines with two-dose regimens will require careful tracking of doses and follow up with each individual receiving the vaccine to ensure they receive the same vaccine, with the second dose given at the proper time.[6]  The CDC and local jurisdictions are in the process of implementing a new vaccine tracking system to monitor COVID-19 vaccine administration and help with multiple dose tracking, but it is unclear if, or how, the new system will integrate with existing immunization information systems.[7]

In addition to the technical/logistical challenges posed by multi-dose vaccines, research has shown that many patients who receive their first dose of a multi-dose vaccine often fail to return for their second dose.  For example, studies conducted in both the US and UK on the hepatitis B vaccine — which, like the Pfizer and Moderna Covid-19 vaccines, is supposed to have around a one-month period between the first and second doses — found that roughly 50% of patients failed to get their follow-up shot within a year after their first.[8]   By failing to obtain the second dose, a patient may experience little or no protective effect from the vaccine.  Therefore, to the extent that the goal of vaccination in this case is to bring the current public health emergency to an end, the public will need to be educated as to why the second dose of the vaccine is as much an imperative as the first dose.  For this reason, many have argued that public education is an indispensable element of any successful vaccination plan.

We will continue to monitor State and local implementation of the Plan, the Allocation Guidelines, and the general progress of California’s efforts to distribute vaccine in California.

This article is not an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, but which are not referenced in this article.

FOOTNOTES

[1]  As described in the Allocation Guidelines, the term “healthcare worker” includes both clinical personnel and non-clinical personnel at “direct risk of exposure in their non-clinical roles, such as, but not limited to, environmental services, patient transport, or interpretation.”  See, Allocation Guidelines, pg. 1.

[2] “Here’s where COVID-19 vaccines will be stored and distributed in California,” by Andie Judson, KXTV-TV (December 4, 2020) at https://www.abc10.com/article/news/health/coronavirus/heres-where-covid-….

[3] Id.

[4] “Why Does Pfizer’s COVID-19 Vaccine Need to be Kept Colder than Antarctica?” by S. Simmons-Duffin, Morning Edition, National Public Radio (November 17, 2020) at https://www.npr.org/sections/health-shots/2020/11/17/935563377/why-does-…

[5] Id.

[6] “Distributing a COVID-19 Vaccine Across the U.S. – A Look at Key Issues” by J.M. Follow and J.K. Follow, Kaiser Family Foundation (October 20, 2020) at https://www.kff.org/report-section/distributing-a-covid-19-vaccine-acros…

[7] Id.

[8] “Compliance with multiple-dose vaccine schedules among older children, adolescents, and adults: results from a vaccine safety datalink study,” by Nelson JC, Bittner RC, Bounds L, et al., Am J Public Health. 2009;99 Suppl 2(Suppl 2):S389-S397 at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4504385/.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.
For more articles on the coronavirus vaccine, visit the National Law Review Coronavirus News section.

District Court Strikes Down DOL Regulation Exempting Non-Healthcare Workers from Paid Leave

On August 3, 2020, the U.S. District Court for the Southern District of New York struck down part of a Department of Labor (“DOL”) regulation that would have prevented huge swaths of employees from taking paid leave under the Families First Coronavirus Response Act (“FFCRA”). The court’s holding has important consequences for employees who may need to take leave from work to care for themselves or others during the ongoing COVID-19 pandemic.

Congress passed the FFCRA on March 18, 2020, to provide paid leave for employees who are experiencing symptoms of COVID-19, are quarantined and cannot work because of COVID-19, or are caring for someone who is quarantined, or a child whose school or care provider is closed, because of COVID-19. In recognition of the essential role of frontline health care workers during the pandemic, however, the FFCRA permits an employer to deny an employee’s request for qualifying leave if the employee is a “health care provider or emergency responder.” The Act defines “health care provider” as “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate)” or “any other person determined by the Secretary [of Labor] to be capable of providing health care services.” The Act also expressly authorizes DOL to “issue regulations to exclude certain health care providers and emergency responders from” from eligibility for paid leave.

DOL Expands Definition of ‘Health Care Provider’

On April 1, 2020, DOL issued a regulation implementing the FFCRA that significantly expanded the definition of “health care provider,” thereby excluding additional employees from eligibility for paid leave under the Act. The definition covered, among other employees, “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, [or] pharmacy[.]” In its motion to dismiss, DOL conceded that its definition would encompass many employees who are not traditionally considered healthcare workers, such as professors, librarians, and cafeteria managers at a university with a medical school. In this sense, DOL’s new definition of “health care provider” created an exception that threatened to swallow the rule.

District Court Rejects DOL Definition

In its opinion invalidating the DOL definition, the court held that the FFCRA requires DOL to determine that a particular employee is “capable of furnishing healthcare services . . . not that [the employee’s] work is remotely related to someone else’s provision of healthcare services.” DOL’s definition, the court found, “hinges entirely on the identity of the employer, in that it applies to anyone employed at or by certain classes of employers,” as opposed to the identity of the employee, in violation of the statutory text. Administrative procedure law therefore “unambiguously foreclose[d] the [DOL’s] definition” of “health care provider.”  Finding further that DOL’s definition of “health care provider” was severable from the remainder of the regulation, the court simply invalidated that provision, restoring the definition of “health care provider” to the more limited one in the text of the statute.

The court also rejected DOL’s argument that its definition “operationalizes” the goal of “maintaining a functioning healthcare system during the pandemic.” Acknowledging that employees who “do not directly provide healthcare services to patients – for example, lab technicians or hospital administrators – may . . . be essential to the functioning of the healthcare system,” the court nevertheless held that this rationale could not supersede the “unambiguous terms” of the FFCRA, which require DOL to determine whether a particular employee can provide healthcare services.

Keeping Employees Safe 

More broadly, by enabling more employees to stay at home without sacrificing a paycheck, the court’s holding bolsters the FFCRA’s dual purpose of limiting the spread of COVID-19 while at the same time providing financial relief to American workers. The DOL regulation, on the other hand, would have forced employees to report to work despite symptoms of or exposure to COVID-19, increasing the risk of spreading the virus to others, or take leave without pay.

If you need to take leave from work because you are experiencing symptoms of or were exposed to COVID-19, or to take care of a loved one who is at home because of COVID-19, consider consulting with an employment attorney to determine whether you may be eligible for paid leave under the FFCRA.

© Katz, Marshall & Banks, LLP
ARTICLE BY Jessica L. Westerman of  Katz, Marshall & Banks, LLP
For more articles on healthcare, visit the National Law Review Health Care, Medicare, Affordable Care Act, HIPAA Legal News section.

COVID-19: FTC Acts Fast, Lambasts Missing Masks

Section 5 of the Federal Trade Commission Act (15 U.S.C. Section 45(a)) provides worthwhile remedies for the types of unfair competition that intellectual property practitioners find quite familiar, and practitioners should give them due consideration.  Selling COVID-19 masks you don’t have provides a good example.

In a case filed in early July (FTC press release) the FTC took a Staten Island business to task, along with its owner, for claiming that masks, respirators and other “PPE’s” (personal protection equipment) was “in stock” and “would ship the next day” (Complaint).  The website “supergooddeals.com” continues to lead off with its signature slogan, “Pay Today, Ships Tomorrow” (https://supergooddeals.com/; also accessed by the author on July 31, 2020).

Apparently starting in March 2021, supergooddeals.com began selling PPE.  According to the FTC complaint, the website claimed that the desired masks were “IN STOCK” (complaint paragraphs 19 and 20).  The FTC complaint gives no indication as to whether or not the “in stock” claim was accurate, but instead pleads the examples of several consumers who never received masks, and numerous complaints to which supergooddeals.com never responded.

The FTC complaint also implies that to the extent that some orders may have been shipped, they were shipped on terms that were far less favorable than supergooddeals.com advertised, and when shipments never arrived (or perhaps were never sent) supergooddeals.com failed to give buyers the opportunity to change their mind, or offer a refund or any modification in price terms (e.g. Complaint paragraphs 29-31).

Supergooddeals.com also apparently attempted to conceal their failures (worse verbs could be applied) by producing shipment labels carrying the promised shipping date, but for packages that either would never ship, or shipped much later than the labelled date.  Supergooddeals.com apparently didn’t realize that when a business creates its own USPS shipping labels, “An electronic record is generated on the ship date indicating that your package has been mailed and the Postal Service is expecting to see your package that day.” Click-N-Ship Field Information Kit

(For those of us that may merely be tardy, the same USPS webpage suggests mailing the package on the next business day.  Checking for a friend.)

The FTC also asserted MITOR (“Mail, Internet, or Telephone Order Merchandise,” 16 CFR Part 435) which defines the terms in the name, defines unfair and deceptive practices in context, requires certain activities, and lists some exceptions (including, for reasons known only on K Street, “orders of seeds and growing plants”).

So, the alleged infractions include:

  • Advertising a delivery date that you know you cannot meet,
  • Advertising items that you don’t have in stock
  • Producing a false mailing label in an attempt to prove the shipping date, and
  • Failing to cancel orders when requested or provide prompt refunds

The Federal Trade Commission Act has worthwhile remedies for such activities, and as the Complaint indicates (paragraphs 58 and 59) the FTC plans to seek them against supergooddeals.com.

So, the people get their money back from supergooddeals.com and all’s well that ends well. Right?

Not exactly.  The FTC Act offers no private right of action in these circumstances.  The Fair Debt Collection Practices Act (FDCPA) 15 USC Section 1692(d) which is generally under the Federal Trade Commission, provides private remedies in the consumer debt arena, but a private party otherwise has no right to the remedies sought against supergooddeals.com under the FTC Act.

At this point, however, the intellectual property (“IP”) practitioner may have an extra arrow up his or her sleeve:  Section 43(a) of the Lanham Act (15 USC 1125(a)) if—IF—the parties can be defined as competitors in the section 43(a) sense.

FTC § 5(a)

Lanham Act § 43(a)

Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

(1)Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

Anchor(A)

is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

Anchor(B)

in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

The Lanham Act applies to false representations (etc.) about goods and services in interstate commerce, but plaintiffs attempting to stretch section 43 (a) too far have been turned down e.g., Radiance Found., Inc. v. NAACP, 786 F.3d 316 (4th Cir., 2015) (The Radiance Foundation, an African American influenced pro-life organization, criticized the NAACP over the NAACP position on abortion.  The NAACP issued a cease and desist letter and the Radiance Foundation filed a declaratory judgment complaint arguing that neither trademark infringement nor dilution had occurred.  The NAACP counterclaimed under (inter alia) section 43(a).  The Fourth Circuit held that for a number of reasons, including the lack of competing goods or services in the section 43(a) sense, the NAACP did not have a trademark remedy in these circumstances.)

Supergooddeals.com certainly dealt (and continues to deal) in “goods” in the sense of section 43(a).  Nevertheless, the “hundreds of” consumers listed in (e.g.) paragraph 26 of the FTC complaint don’t have a section 43(a) remedy against supergooddeals.com because such customers are not “competitors” of supergooddeals.com in the sense required by section 43(a).  Stated more formally, for individual defrauded customers, the answer to, “whether a legislatively conferred cause of action encompasses a particular plaintiff’s claim” is “no.” (Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014). (“A consumer who is hoodwinked into purchasing a disappointing product may well have an injury-in-fact cognizable under Article III, but he cannot invoke the protection of the Lanham Act—a conclusion reached by every Circuit to consider the question.”)

Does Pat Peoples have any Silver Lining here?  Well, yes. In addition to a possible contractual remedy, most states have some form of general “unfair competition is illegal” statute as well as consumer protection remedies.

For the time being, however, these defrauded consumers have Uncle Sam on their side, and when “Uncle” sues he usually gets the job done.

 

Copyright 2020 Summa PLLC All Rights Reserved

ARTICLE BY Philip Summa and Summa PLLC.
For more FTC PPE Actions see the National Law Review Coronavirus News section.

COVID-19 Update: NY Governor Cuomo Extends Tenant Protections, Including Eviction and Foreclosure Moratorium

On August 5, 2020, New York State Governor Andrew Cuomo issued Executive Order 202.551 (the “New Order”) to provide additional relief to renters impacted by the COVID-19 pandemic and extended the time periods for certain other protections that had been previously granted to renters and property owners pursuant to Executive Order 202.82, as extended by Executive Order 202.283 and Executive Order 202.484 (the “Prior Orders”).

The Prior Orders provided for (i) a moratorium on evictions of commercial tenants through August 5, 2020, and residential tenants through July 5, 2020, and (ii) a moratorium on eviction and foreclosure of any residential or commercial tenant or owner through August 20, 2020, if the basis of the eviction or foreclosure is the nonpayment of rent or the mortgage, as applicable, and the tenant or owner, as applicable, is eligible for unemployment insurance or benefits under state or federal law or is otherwise facing financial hardship due to the COVID-19 pandemic.

Executive Order 202.48 previously had removed the restrictions on residential foreclosures and residential evictions, as those has been superseded by legislative action.  The Laws of New York 2020, Chapter 112 provides for 180 days of mortgage forbearance for individuals, which period may be extended by the mortgagor for an additional 180 days.5  The Laws of New York 2020, Chapter 127 prohibits evictions of residential tenants that have suffered financial hardship during the COVID-19 pandemic for the non-payment of rent.  In each case, the relief granted extends through the period commencing on March 7, 2020, until the date on which “none of the provisions that closed or otherwise restricted public or private businesses or places of public accommodation, or required postponement or cancellation of all non-essential gatherings of individuals of any size” continue to apply.

The New Order extends a number of existing Executive Orders, including the Prior Orders for an additional 30 days, to September 5, 2020, effectively continuing the moratoria on commercial and residential evictions and foreclosures – whether instituted by executive order or passed into law by the legislature – until such date.

1       Executive Order 202.55, available here.

2       Executive Order 202.8, available here.

3       Executive Order 202.28, available here.

4       Executive Order 202.48, available here.

5       The Laws of New York 2020, Chapters 112 and 127.

© Copyright 2020 Cadwalader, Wickersham & Taft LLP

For more on COVID-19 related rental relief, see the National Law Review Coronavirus News section.

Return to Work COVID-19 Testing Considerations

As employees increasingly transition back into the physical workplace, employers have begun to grapple with whether and how to deploy COVID-19 diagnostic testing as a return-to-work solution.  Many employers want to avoid extended employee quarantine or isolation requirements that prevent their employees from returning to the office for weeks and disrupt their operations.  But is this potential solution legal?  And is it effective?  Below we discuss practical considerations for employers considering a return to work COVID-19 testing strategy.

Is it Legal?

For the most part, yes.  While the Equal Employment Opportunity Commission (“EEOC”) has approved of COVID-19 diagnostic testing in the workplace generally, it has, as explained further below, recently modified its guidance to discourage its use as a return to work strategy.  Further, approaches vary widely across the states and localities that have taken a position on return to work testing.  For example, while Illinois permits its use, an ordinance in Dallas, Texas prohibits return to work testing.

Is it Effective?  

It depends.  Before mandatory vaccination becomes an option (which we wrote about here), requiring employees to test negative for COVID-19 before returning to work may at first glance seem like a reasonable way to ensure employee attendance while keeping the workplace safe.  For some employers, particularly those that are able to test frequently, quickly and accurately, this may be a sound approach.  But for other employers, they will have to weigh their options carefully.  Recent updated guidance from the CDC, employee complaints about the invasiveness of testing, and very real ongoing concerns about testing availability and accuracy may militate against pursuing a testing strategy at this time.

More specifically, recent guidance from the CDC discourages a test-based strategy as a primary solution finding that a symptom-based screening strategy is sufficient to identify when an individual with symptoms may return to work.  However, if an employer nevertheless decides to proceed with diagnostic testing as part of their COVID-19 mitigation strategy, the CDC recommends having employees test negatively twice with the two consecutive tests coming at least 24 hours, before returning to work.

State and local guidance does not necessarily provide additional clarity on how best to proceed.  For example New York State’s guidance only addresses situations where an employee experiences symptoms upon arrival at work or while at the office, advising that in those instances an employee may return to work with a single negative COVID-19 test (in contrast to the CDC’s recommended two consecutive negative tests).  But New York’s guidance does not currently address whether testing is a solution to a host of other scenarios – for instance, where an employee’s remote screening indicates recent symptoms, known exposure, or where an employee traveled to a place with significant community spread.  In those instances, the New York guidance does not incorporate testing as a return to work solution, instead asserting that individuals who have had known close contact with someone who has COVID-19 (i.e. within 6 feet of someone for ten or more minutes) should (1) isolate for 10 days from the onset of symptoms (if the individual has symptoms); or (2) isolate for 14 days from the date of exposure (if the individual does not have symptoms).  New York’s guidance also states that employees who test positive for COVID-19 must complete at least 10 days of isolation from the onset of symptoms or 10 days of isolation after the first positive test if they remain asymptomatic.

Putting all the guidance aside for the moment, testing may prove futile in many cases regardless.  First, COVID-19 reportedly can take 2-14 days after exposure to become identifiable in a diagnostic test, and thus, employees who test negative may return to work and later discover they have indeed been infected.  And in other cases, testing may prove futile if an employee cannot access a test readily, and thereafter receive their results in a timely manner, which effectively sidelines them from returning to the office anyway.  Further, there is also the possibility of a false negative, particularly when an employee takes a rapid test.  Other employer considerations include how COVID-19 testing, and the resulting disciplining of employees if they refuse to be tested, might affect overall employee morale.

Employers should consider these issues and weigh them against the vitality of other preventative measures such as whether an employee can telework or take a paid or unpaid leave in lieu of returning to work.  If the employee must return to work, employers should consider using other safety measures (whether in lieu of or in addition to testing), such as symptom/exposure questionnaires, temperature checks and workplace social distancing requirements.

What if an Employee Refuses to Take a Diagnostic Test? 

In selecting any of these options, employers should consider creating a policy or procedure that, among other things, discloses the circumstances under which an employee must take a test, the specific test or tests that the employer will accept, and the consequences of an employee’s refusal to be tested prior to returning to work.  Employers should also consider whether they will afford an employee the opportunity to take an unpaid leave of absence where they refuse to take a test in lieu of a disciplinary action.

Further, before resorting to disciplinary measures, employers should first consider the nature of the employee’s objection.  If the employee is simply annoyed or frustrated about the testing policy, disciplinary measures may be appropriate as the employees is failing to adhere to a company safety policy.  However, employers should evaluate whether the employee is asking for a disability accommodation, and if so, should consider alternative options to testing.

A Note about Isolation Practices and Employee Abuses.

In jurisdictions that do not require employees to isolate after potential symptoms or exposure, employers that need employees to work in the office may be turning to COVID-19 diagnostic testing as an alternative or supplement to isolation practices they consider impractical or prone to abuse.  Indeed, some employers are facing scenarios in which employees attempt to take advantage of company isolation policies in an effort to take extended time away from the workplace.

Employers facing this situation may consider implementing a diagnostic testing strategy (where permitted and feasible), but should also consider addressing the various employee abuse scenarios that might unfold and provide cautionary warnings to employees.  For example, New York, New Jersey, Massachusetts, and some other jurisdictions are requiring individuals who travel to certain states with troublesome COVID-19 metrics to quarantine for 14 days upon their reentry.  If an employee is planning travel to a “hot spot” on vacation to avoid returning to work, the employer should consider warning the employee that if they are unable to telework upon their return, they may be required to take additional paid time off or even unpaid leave.  Alternatively, employers facing operational difficulties if employers are away for multiple weeks may wish to revisit paid time off approval processes or condition approval of company-provided vacation time on an employee’s ability to return to work promptly after traveling.  In short, employers may have several options to address employees’ abuse of isolation rules that do not necessarily have to involve the implementation of diagnostic testing.

Final Considerations.

If an employer does decide to implement a testing strategy, it should ensure that its COVID-19 testing and screening protocols and policies adhere to relevant state and local guidelines, which vary greatly by jurisdiction.  Employers should further ensure they are tracking other practical aspects of testing.  For example, employers must safeguard employee medical records in accordance with Americans with Disabilities Act (“ADA”) requirements and the privacy requirements of various states and localities, which we discussed here.  When choosing a diagnostic test, employers must also ensure that the test is reliable and accurate – for instance, some rapid testing kits now entering the market may not meet the EEOC’s reliability and accuracy standards.  Similarly, any testing strategies must be uniformly applied so as not to cause disparate treatment amongst employees.  Employers should refer to the EEOC’s ADA guidance, which we discussed here, to ensure non-discriminatory application of testing policies.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

For more on COVID-19 Testing see the National Law Review Coronavirs News section.

COVID-19 Brings Consumer Convenience to Pennsylvania

Effective tomorrow, August 4, 2020, the Pennsylvania Liquor Control Board (PLCB) amended sections 407, 415, and 442 of Act 29 of 2020. These revisions allow Pennsylvania Restaurant (“R”) liquor licensees, Eating Place Malt Beverage (“E”) licensees, and Wine Expanded Permit (“WEP”) holders that possess interior connections to another business they operate, such as a grocery store, convenience store, or similarly situated business that cannot have its entire building or business licensed, to have the consumer use the cash registers at their other business to sell malt or brewed beverages and wine for off-premises consumption.

Consumer Convenience in Pennsylvania

Previously, all alcohol sales in these businesses were confined to the licensed areas where alcohol was stored, served, and sold. This confused many customers who tried to check out at the wrong register line with beer and wine purchases. However, during the COVID-19 pandemic, there has been a push to allow customers to use other registers in the store to create fewer touchpoints for customers by not having to use two different registers and to create less congestion in the licensed areas, which are typically fairly small.

Qualifications for Additional Cash Registers

In order to qualify, ALL the following requirements must be met:

  • The licensee’s building is 11,000 square feet or less;
  • The other business cash registers are in the same building as the licensed premises; and
  • The other business cash registers comply with the following standards as set forth by 47 P.S. 4-415(a)(8) and (9) of the Liquor Code:
    • Cash registers must have signage to designate that alcohol may be purchased at said register
    • Cash registers cannot be registers where customers scan their own purchases, which means that self-checkout is still prohibited for all alcohol purchases
    • Cash registers must always be staffed when patrons are purchasing alcohol
    • Cash register clerks must be at least 18 years of age and have completed Responsible Alcohol Management Program training
    • Cash register clerks must use a transaction scan device to verify the age of any patron purchasing alcohol who appears to be under 35 years of age before a sale can occur
    • The licensee may not sell or share the data from the use of its transaction scan device, except for providing said data to the Pennsylvania State Police Bureau of Liquor Control Enforcement

In order to start using additional cash registers, all the above-mentioned criteria must be met AND an email notification of compliance must be sent to RA-LBLICINV@PA.GOV including the following information:

  • LID, license number, and licensee name and address
  • The building’s total square footage
  • Plans or sketches that show the location of the specific cash registers being used
  • Confirmation that all conditions are met

 

©2020 Norris McLaughlin P.A., All Rights Reserved

ARTICLE BY Matthew B. Andersen and Theodore J. Zeller III at Norris McLaughlin P.A. Summer Associate Benjamin MacLuckie contributed.
For more on state liquor laws, see the National Law Review Biotech, Food & Drug law section.

One-Two Punch: Businesses Must Fight the Virus and Possible Liability Claims

After several weeks in lockdown and thousands of business closures in an attempt to control the spread of the novel coronavirus, businesses are finally reopening their doors. Given the high transmission of COVID-19, businesses should consider their risks of legal liability to visitors on their property – customers, employees and others – in the event of COVID-19 exposure at their premises.  But the fear of civil liability remains a hindering problem. These claims will most commonly be pursued under the legal theory of negligence and plaintiffs may seeking financial compensation for their injuries and medical treatment related to COVID-19. Plaintiff’s lawyers in these cases will focus on the operations and procedures in place during the reopening. Some businesses are taking extraordinary measures to protect customers, while others are doing the bare minimum. Businesses need to know how to be in compliance with best safety practices to prevent and defend against claims related to an alleged failure to protect customers from COVID-19 exposures.

Immunity for Businesses for COVID-19 Exposure?

A large number of states, including Massachusetts, have enacted laws to shield health care workers, health care facilities and volunteer organizations treating COVID-19 patients from negligence claims subject to certain exceptions. However, the immunity does not extend to cover damages caused by gross negligence or recklessness. It is important to note that these states have not provided similar immunity to other businesses, nor have they limited liability in cases involving gross negligence for COVID-19 related claims. There have been discussions of additional legislation to protect businesses in these cases, but this has yet to happen.

Tort Claims and Premises Liability Law in Massachusetts

Personal injury claims typically stem from negligent acts, where a party had a duty of care, failed to reasonably care for that individual, and that failure to care caused the individual harm or injury. A ”duty of care” exists when its reasonably foreseeable that some act or omission would cause some type of knowable harm, and thus taking reasonable action to ensure safety. The breach of that duty is the act or omission that causes the harm. The breach of duty must cause some damages. Damages are monetary compensation for the victim’s injuries and losses if liability is found.

Premises liability law, a subset of personal injury law, similarly holds that property owners owe a duty of reasonable care to visitors on their premises in Massachusetts, so as to not create or allow unsafe or hazardous conditions to exist on their premises that could cause injury or harm to patrons and guests. If a hazardous condition exists that could reasonably cause harm, and the property owner fails to remove it or warn of it, this could ultimately result in liability.

The duty of care is stricter for business owners, as they invite persons onto their property to purchase goods or services. The level of care owed depends upon the type of visitor on the property. Massachusetts has two types of lawfully present visitors: 1) licensees- individuals presenting financial gain for the property owner like patrons, diners, shoppers; and 2) invitees- those who are not providing any financial gain to the property owner like guests and friends at a social gathering. The property owner owes its visitors a duty of care, that is to keep the property reasonably safe. In this context, the property owner is well aware of the risks associated with COVID-19, the nature of the disease and how it is transmitted. If it did not take reasonable steps to prevent the transmission of the virus to its licensees and invitees, and the claimant can prove the business’ failure to exercise reasonable care was a “substantial contributing factor” in causing the claimant’s injury, they may be entitled to damages, which can include among other things, medical expenses, economic damages, and even emotional distress.

Breach of Duty

There is an abundance of guidance available to businesses on the virus, transmission, preventative measures. Whether a business “breached” their duty of care will focus on what the business did to determine if taking action (or taking no action) was reasonable or not, given the state of knowledge on the virus. Thus, claimants would need to point to what steps the businesses took to protect its licensees and invitees, and whether there were additional procedures that could have been implemented to prevent the transmission, and whether those additional actions were reasonable in light of what was known about the virus. Intentional ignorance is not a defense – property owners have a duty to investigate known or potential hazards, including COVID-19.

Causation

Claimants in tort claims have the burden of proving causation. This usually means proving that the breach of duty was a “substantial contributing factor” in causing the claimant’s injury. In COVID-19 cases, the claimant will ultimately need to prove that the virus was contracted at that business as opposed to another source, which may be extremely difficult to do. Asymptomatic spread of COVID-19 is one of many challenges to proving the initial source of exposure. While some claimants will rely on contact tracing, that alone does not rule out alternative sources of COVID-19 exposure – any other place the person visited (markets, homes, their workplace), and exposure to family members and friends.

Notably, a large number of states are enacting legislation applicable to workers compensation claims related to COVID-19. This legislation establishes a rebuttable presumption that an employee who tests positive for COVID-19 contracted it in the course of employment, although some are limited to essential workers. A “rebuttable presumption” means that the burden of disproving causation is thrust upon the employer. While there are no similar rebuttable presumptions for personal injury and premise liability claimants at this time, it is an open question as to whether these presumptions can be used affirmatively in tort lawsuits, particularly in a situation where a worker brings COVID-19 into the home and sickens a family member or housemate.

Mitigating Liability

If businesses can show that safety protocols were followed, this evidence can be used to defend these types of claims. The Centers for Disease Control and Prevention (CDC) has set guidelines that should be followed as best practices to avoid COVID-19 liability claims. There is an abundance of state and local guidance on social distancing, use of masks and other measures to prevent the spread of the virus. With the vast amount of information available to the public on the risks of the virus and preventative measures, claimants will argue that businesses have enough information to safely operate Crafty plaintiff’s lawyers will likely seek out and find guidance that specifically supports their clients case. Business owners are advised to do the same for their respective industries, whether it be restaurants, offices or youth sports leagues.

Defenses to Consider in Defending COVID 19 Liability Claims

Statute of Limitations

The statute of limitations for in Massachusetts governing personal injury and premises liability cases places a time limit of three years within the date of the incident for filing the lawsuit. Lawsuits filed after the statute of limitations period may be dismissed as “time-barred.” Other states have similar statutes, although the specific timeframe may vary.

Modified Comparative Negligence Law

Some states, including Massachusetts, use a modified comparative negligence rule in personal injury cases, allowing plaintiffs to recover only if the defendant’s share of the blame was equal to or greater than their own. There are only a few exceptions allowing plaintiffs to recover if they were more than 51% at fault. Another important factor of this rule to consider is that if plaintiffs are found to be at fault, their damages are reduced by their allocated share of the blame. Did the visitor where a mask? Did they stay 6 feet apart from other individuals? Did they wash their hands and sanitize frequently? Were they placing their hands on their mouth and nose? These facts and circumstances are critical factors to consider when shifting the blame to the claimant.

Assumption of Risk Abolished in Massachusetts

Some jurisdictions allow a defendant in a personal injury action to raise an affirmative defense of assumption of risk, but that is abolished in Massachusetts as a defense in personal injury cases. In jurisdictions where this defense is allowed, instead of denying the allegations, defendants can assert that a plaintiff was aware of the risk when engaging in the activity or conduct, fully had knowledge of the consequences and willingly disregarded the risks or assumed the risks. Therefore, the defendant cannot be at fault for negligence and this serves as a complete bar to recovery.

Liability Waivers

Did a plaintiff sign a written liability waiver acknowledging and accepting risks? Enforceability of liability waivers as well as the exceptions to the enforceability of releases vary from state to state. While this only shows licensees and invitees were made aware of the risk, using such waivers in these COVID 19 claims is not a slam dunk defense.

Conclusion

We encourage businesses to consider these liability risks when resuming operations and to follow comprehensive procedures and CDC guidelines to mitigate the risks and protect licensees and invitees from the spread of the virus at these establishments. Our office can help businesses develop a plan specific to their business to mitigate the risks of liability from emerging claims related to COVID 19 and provide guidance and advocacy for defending such claims.

©2020 CMBG3 Law, LLC. All rights reserved.

ARTICLE BY Seta Accaoui at CMBG3 Law.
For more on business COVID-19 liability, see the National Law Review Coronavirus News section.

COVID-19 Whistleblower Protections: Few Options for Workers Reporting Unsafe Working Conditions

The United States has been rocked by the COVID-19 pandemic in innumerable ways and it has had profound and ongoing impacts on workers. One of the most vexing problems arising from COVID-19 has been protecting workers who object to employers that are failing to implement meaningful safety precautions to protect their workers during the pandemic. As just one of many examples, an Amazon employee was fired after he opposed the company’s failure to meaningfully protect warehouse employees who had potentially been exposed to the coronavirus. This article will examine our failures in addressing this problem through meaningful federal action and highlight instances where local legislators have passed laws to protect workers who find themselves facing this predicament.

The Deficiencies of Federal Law to Protect Workers During the Coronavirus Crisis

The primary federal law requiring a safe working environment is the Occupational Safety and Health Act (“OSH Act”). Section 11(c) of the OSH Act prohibits employers from discharging or discriminating against an employee because the employee exercised any rights under the Act, including the right to raise health or safety complaints. 29 U.S.C. § 660(c). The OSH Act theoretically protects an employee who refuses to work based on unsafe working conditions, although the requirements for a protected work refusal are stringent.

Unfortunately, the OSH Act does not effectively protect workers in general, much less in the face of a burgeoning pandemic. The Act does not have a private right of action, so employees who suffer retaliation for reporting unsafe working conditions cannot sue in court. Instead, Section 11(c) allows employees to file a complaint with the Occupational Safety and Health Administration (“OSHA”) and request that OSHA protect them. Thus, government officials ultimately decide what to do with the OSH Act complaint; if they fail to protect an employee, that employee has no other recourse under the statute. In addition, the OSH Act has a 30-day statute of limitations—the shortest of any federal anti-retaliation statute. Finally, the strict requirements governing what constitutes a protected refusal to work will leave many employees in the cold. OSHA officials have acknowledged the weakness of the OSH Act protections. In 2010, then-Deputy Assistant Secretary for Occupational Safety and Health, Jordan Barab, testified before Congress that Section 11(c)’s lack of a private right of action and statutory right of appeal were “[n]otable weaknesses” in the law. Mr. Barab also lamented the OSH Act’s “inadequate time for employees to file complaints.”

Several states have their own version of the OSH Act, protecting employees who raise concerns about workplace health and safety. Like the federal OSH Act, however, many of these state laws do not contain private rights of action. See, e.g., D.C. Code § 32-1117 (no private right of action); Md. Code, Labor & Empl. § 5-604 (same); but see Va. Code § 40.1-51.2:2 (providing private right of action and a 60-day limitations period for filing a complaint).

Proposed Legislation to Protect Whistleblowers

The Coronavirus Oversight and Recovery Ethics Act (“CORE Act”) put in place meaningful protections against retaliation for individuals who report waste, fraud, and abuse related to government funds that were distributed to combat the COVID-19 pandemic. Like other recent whistleblower protection legislation, it is primarily enforced through the Department of Labor but permits whistleblowers to “kick out” their claims into federal court. Further, language in the bill nullifies the effectiveness of pre-dispute mandatory arbitration provisions with respect to claims asserted under the law. In many ways, it is a model piece of whistleblower protection legislation.

One significant omission from the CORE Act, however, is language amending the OSH Act or otherwise granting meaningful protections to whistleblowers who report workplace health and safety concerns related to COVID-19. Thus, nothing in the bill purports to protect an individual who refuses to come to work, or opposes her employer’s practices, because her employer has failed to take sufficient steps to mitigate COVID-19-related risk to employee health. In most of the country, employees in that situation are left with the OSH Act as their primary recourse for protection against retaliation.

Given the clear deficiencies in the OSH Act’s protections of whistleblowers concerned about workplace safety, whistleblower advocacy organizations like the Project on Government Oversight (“POGO”) have pushed for Congress to pass legislation that would, among other things, “prohibit retaliation against essential workers making disclosures related to worker or public health and safety during the pandemic.” On June 15, 2020, in response to calls from groups like POGO, Senator Kamala Harris and Representatives Jackie Speier and Jamie Raskin introduced the COVID-19 Whistleblower Protection Actto expand the whistleblower protections of the CORE Act.

Protecting Whistleblowers at the Local Level

Given the lack of federal action to address this problem, some municipalities have passed legislation specifically designed to protect employees who report COVID-19-related workplace safety concerns. For example, Mayor Kenney of Philadelphia recently signed into law Bill No. 200328, which requires employers to “comply with all aspects of public health orders addressing safe workplace practices to mitigate risks” related to COVID-19. The bill further states that “[n]o employer shall take any adverse employment or other action against an employee” who refuses to work in conditions that do not comply with public safety guidelines, and that “no employer shall take any adverse employment or other action against any employee for making a protected disclosure.” A “protected disclosure” is defined as a “good faith communication” disclosing information “that may evidence a violation of a public health order that may significantly threaten the health or safety of employees or the public, if the disclosure or intention to disclose was made for the purpose of remedying such violation.” The legislation includes a private right of action and permits awards to successful litigants including reinstatement, back pay, compensatory damages, and liquidated damages “of $100 to $1000 on behalf of the City for each day in which a violation occurs.”

In late May, the City of Chicago enacted a bill that contained slightly narrower but still powerful protections. In the bill, the City of Chicago prohibited employers from retaliating against employees for complying with public health orders relating to COVID-19 issued by the City or the State or for following COVID-19-related quarantine instructions from a treating health care provider. The protections extend to employees who are caring for an individual subject to such a quarantine. The bill includes a remarkable damages provision entitling successful claimants to liquidated damages “equal to three times the full amount of wages that would have been owed had the retaliatory action not taken place.”

These actions by municipalities are meaningful and offer critical protections to citizens living in those cities. At the same time, the need for this local legislation highlights the glaring absence of meaningful protections for workers in the rest of the country. It seems that every week we hear more horror stories about conditions in which workers are forced to work during this pandemic, lest they risk losing their jobs in the midst of a devastating economic downturn. The weaknesses in the OSH Act and the absence of even proposed federal legislation that would fill this critical gap in protection is a moral failure.

Copyright Katz, Marshall & Banks, LLP

For more on COVID-19 related whistleblowing, see the National Law Review Coronavirus News section.