Category: Labor & Employment

OSHA’s Next Steps with the Vaccine or Test Rule

On Tuesday, January 25, the U.S. Occupational Safety and Health Administration (OSHA) announced the withdrawal of the “Emergency Temporary Standard” (ETS) that would have required large private employers of 100 or more employees to implement a vaccine or test policy. This announcement came after the U.S. Supreme Court stayed enforcement of the ETS on January 13, 2022 pending a decision from the Sixth Circuit on the underlying proceedings challenging the ETS. The withdrawal of the ETS is effective as of January 26, 2022.

The announcement from OSHA made it clear that the withdrawal is not complete, stating:

“Although OSHA is withdrawing the Vaccination and Testing ETS as an enforceable emergency temporary standard, OSHA is not withdrawing the ETS to the extent that it serves as a proposed rule under section 6(c)(3) of the Act, and this action does not affect the ETS’s status as a proposal under section 6(b) of the Act or otherwise affect the status of the notice-and-comment rulemaking commenced by the Vaccination and Testing ETS.” OSHA’s complete withdrawal can be found here.

OSHA intends to keep the ETS as a proposed rule under OSHA’s rulemaking authority. This means that OSHA may choose to modify the previously published ETS and may rely on the Supreme Court’s opinion in doing so. OSHA may choose to implement ideas from the Supreme Court justices such as an industry or workplace-specific analysis.  Additionally, OSHA is also likely to review the comments submitted during the notice and comment period for direction with respect to a potential final ETS.

While Tuesday’s announcement does not necessitate action by employers, it does leave the door open for future directives.

© 2022 Varnum LLP
For more on OSHA, visit the NLR Labor & Employment section.

Labor Shortage: Will Additional Seasonal Visas Help?

The United States is in the midst of a significant labor shortage. In response to the growing demand for labor, the U.S. government recently announced it will expand the number of H-2B visas available for seasonal workers this winter. Although the announcement is hailed by some as necessary, critics suggest the response may be insufficient to meet growing demand.

The Modern Labor Shortage

Following the economic turmoil spawned by the COVID-19 pandemic, the U.S. economy faces an unusual set of circumstances: instead of a lack of jobs, there is a lack of workers to fill available positions. Experts attribute the labor shortage to a number of potential causes, but some suggest a lack of immigrant labor is at least partially to blame. Due to lengthy processing times for immigration applications, foreign born workers hoping to enter the United States face unprecedented challenges obtaining the necessary paperwork to work here legally.

Biden Administration Expands Seasonal Visas

In response to the growing challenges of the labor shortage, the Department of Homeland Security (“DHS”) and the Department of Labor (“DOL”) recently announced they will issue a joint temporary final rule to make available an additional 20,000 H-2B temporary nonagricultural worker visas. These visas will be set aside for U.S. employers seeking to employ additional workers on or before March 31, 2022.

The visas are in addition to 33,000 visas already set aside for seasonal employers, marking a substantial 60% increase from the previous limit.

What is the H-2B Program?

The H-2B visa program allows U.S. employers who meet specific regulatory requirements to bring foreign nationals to the United States to fill temporary nonagricultural jobs. The industries most reliant on the H-2B program vary, but include landscapers, hotels, and ski resorts. By providing foreign workers to meet labor shortages in the United States, the program is meant to support the fluctuating needs of the U.S. economy.

The program has restrictions, however. The employment must be for a limited period, including seasonal or intermittent needs. To hire H-2B workers, employers must, among other things, certify to a lack of U.S. workers available to fill the position. Additionally, employers must certify that using the program will not adversely affect wages for similarly-employed U.S. workers.

Will Additional Seasonal Visas Be Enough?

Expansion of the H-2B program is being praised as necessary relief by some. However, others suggest it may not be sufficient to answer the growing labor demand in the country.

Business owners from Cape Cod, Massachusetts, hailed the news, citing the strained vacation industry that relies so heavily on seasonal workers to meet the high demand. Additional workers will provide necessary relief on many strained industries.

Steve Yale-Loehr, a professor of immigration law practice at Cornell, recently noted that if employers get past these hurdles, the visas could help the labor shortage, but only a little bit. After all, the labor shortage in the United States exceeds the additional 20,000 seasonal visas being offered. Recent estimates suggest 10.4 million jobs are available here. Moreover, applications under the H-2B program can be costly, forcing employers to weigh the financial implications of sponsoring workers under the program.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

For more immigration legal news, click here to visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

USCIS Issues New Policy Guidance for O-1B Visas

United States Citizenship and Immigration Services (“USCIS”) recently issued policy guidance to clarify how to determine the appropriate visa classification for persons of extraordinary ability in the arts. Given the massive changes in the entertainment industry in the past year, including the increasing popularity of internet and streaming services, this guidance provides essential insight for those seeking to understand the nuances of O-1B nonimmigrant visas and determine which visa applies to their unique circumstances.

O-1 Visa Program for Individuals with Extraordinary Ability or Achievement

The O-1 nonimmigrant visa program provides nonimmigrant visas for individuals who possess extraordinary ability in the sciences, arts, education, business, or athletics, or who have demonstrated extraordinary achievement in the motion picture or television industry and been recognized nationally or internationally for those achievements.

The O-1 nonimmigrant visa program is broken down into the following classifications:

  • O-1A: Individuals with an extraordinary ability in the sciences, education, business, or athletics (not including the arts, motion pictures or television industry);
  • O-1B (Arts): Individuals with an extraordinary ability in the arts;
  • O-1B (MPTV): Individuals with extraordinary achievement in the motion picture or television industry.

Generally, to qualify for an O-1 visa, a beneficiary must demonstrate “sustained national or international acclaim” in their respective field. To prove this, applicants must provide evidence of their credentials, including national or international awards or prizes, membership in professional organizations in their respective field, published articles in notable trade publications, high salary for their services, as well as other relevant evidence of exceptional expertise.

Under the O-1B category, as noted above, individuals in the entertainment industry can demonstrate either extraordinary ability in the arts or extraordinary achievement in the motion picture and television industry. With the recent shifts in the entertainment industry, including the prevalence of household names from YouTube, TikTok, Instagram, etc., it has become increasingly common for applicants to possess qualities that fall under both the O-1B (Arts) and the O-1B (MPTV) categories.

Determining the Relevant Standard for Artists with Some Connection to MPTV

The USCIS Policy Manual acknowledges the difficulties associated with petitions that have elements of both O-1B (Arts) and O-1B (MPTV) classifications. According to the newly issued guidance, inclusion in the motion picture or television industry is not limited to whether artistic content will air on television or movie screens, noting that “USCIS considers streaming movies, web series, commercials, and other programs with formats that correspond to more traditional motion picture and television productions to generally fall within the MPTV industry’s purview.” Indeed, USCIS gives weight to whether an individual”s work aligns with industry organizations such as the Academy of Television Arts and Sciences.

However, under USCIS guidance, not all television stars are considered equal for the purpose of visa qualification. For instance, reality television poses an interesting problem because many of the “stars” are non-actors involved in a competition of some sort that takes place on television. According to USCIS, contestants on reality television programs fall outside of the MPTV industry, but judges, hosts, and those employed by the production company generally fall within industry parameters.

Video blogging, a staple of the increasingly popular YouTube and TikTok platforms, poses similar questions. However, USCIS makes clear that static web content, like video blogs, generally falls outside the O-1B (MPTV) classification and is more appropriate for O-1B (Arts) petitions. USCIS notes that if an artist’s work or appearance on an MPTV production is incidental to their non-MPTV work as an artist, the MPTV classification may not be appropriate.

Guidance for O-1B Visas

The newly-issued guidance provides some clarification of the nuances that distinguish O-1B (Arts) beneficiaries from O-1B (MPTV) beneficiaries. Potential beneficiaries and practitioners can continue to consult the USCIS Policy Manual for up-to-date guidance in this quickly changing industry.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

For more immigration legal news, visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

A Very Simple Proposal to Tweak the FLSA to Benefit Both Employees and Employers

A number of years ago, I received a kind note around the holidays from my opposing counsel in a wage-hour class action, thanking me and my firm for being their “partners” in addressing employment issues.

Maybe the word he used wasn’t “partners,” but it was something close to it.

At first, I must admit that I thought he was joking.

Then I realized that this attorney, for whom I have great respect, got it.

He got that employers are not looking to violate employment laws, and that the attorneys who represent them are not trying to help their clients violate the laws.

He got that the opposite is true – employers are trying to comply with the laws, and their attorneys are trying to help them do so.  No employer is hoping to get sued.  Not one.  And lawyers advising employers on how to violate the laws will soon be looking for new clients.  Or a malpractice attorney.

The general public may not understand this notion, and, unfortunately, many employees and plaintiffs’ lawyers may not, either.

The desire of employers and their counsel to comply with the law plays out thousands of times every day, to the great benefit not just of employers, but of employees.

All management-side employment lawyers worth their salt have stories about how they worked with their clients to prevent a manager from terminating an employee’s employment, or cutting an employee’s pay, or implementing a problematic policy, by explaining the law and the potential repercussions.  Some lawyers have hundreds of these stories.

“You should give the employee another chance,” is an expression that may as well be on a tape recording, it’s used that often.  “Document the problem, sit down with the employee to explain how they need to do things differently, and give the employee another chance.”  “If you make that change, you’re walking right into a class action that you will have difficulty defending.”

Often – usually – employers will understand and follow their counsel’s advice once distanced from the heat of the moment.

They’re looking to do the right thing, to treat their employees fairly.  And, yes, to comply with the law.

It’s an approach that works in virtually every context except perhaps one – the Fair Labor Standards Act (FLSA).

The FLSA actually works to dissuade employers from working with employees to correct many wage issues.

Why is that?

Because, unlike other employment laws, the FLSA generally doesn’t permit employers and employees to resolve wage disputes, short of the very litigation or agency complaint that neither employers nor employees really want.

The FLSA generally forbids the very amicable resolutions that would benefit both employers and employees.

And perhaps it’s time to change that.

In a perfect workplace, if employees have issues, whatever they might be, they would speak with their managers or with human resources and resolve their disputes amicably.

And, for the most part, the law not only permits them to do so, but encourages them to do so.

If employees believe they have been harassed, they can take their concerns to their employer and let their employer investigate and take corrective action, if appropriate.

If employees believe they have been discriminated against, they can share their concerns with their employer and resolve their disputes.

And if part of the resolution is a payment of some sum that the employer and employee agree to be fair, they can enter into a settlement agreement whereby those claims are resolved.  That is, the employee can accept some agreed-upon sum of money and sign a release.  And the employee can review the settlement agreement with his or her attorney beforehand in deciding whether the terms are fair.  If not, the employee won’t sign it.

But these very same employees who are able to amicably resolve virtually any dispute with their employers generally are not allowed to do so with FLSA claims.

If employees believe they were not paid for all time they worked, they cannot simply speak with their managers or human resources personnel to resolve the issue, get the problem fixed, and move on.  No, generally speaking, the only way they can resolve the issue is to file a lawsuit or a complaint with the Department of Labor (DOL).

If employees believe their overtime pay was miscalculated, the only way they and their employers can resolve the claim is by suing or going to the DOL.

If employees believe that they have been misclassified as exempt, they can’t resolve the issue with their manager or human resources personnel.  No, they have to sue or file a DOL complaint.

And if employers identify an issue – an error on someone’s paycheck, or a concern that an employee might have been misclassified – the best they can do is to correct the issue and pay the employee, then sit back and hope that the employee doesn’t turn around and sue about the very issue the employer wanted to resolve, but couldn’t.

It’s a system that is built to increase litigation, often unnecessarily, at the expense of amicable resolutions of issues that may arise.

There is no good reason that employees can be trusted to resolve other employment disputes without litigation or an agency complaint, but can’t be trusted to do so with regard to wage claims.

None.

There is no good reason why employees can be allowed to amicably resolve a race or sex discrimination concern, for instance, but the same employees can’t be allowed to resolve a wage claim – not even as part of the resolution of the race or sex discrimination concern.

None.

The argument that an employee wouldn’t understand the nuances of the FLSA flies about as far as a turkey.  The FLSA is no more nuanced than Title VII or the Americans with Disabilities Act, and employees are allowed to resolve those claims outside of litigation or an agency complaint.

And don’t forget that employees could always have an attorney review a proposed FLSA settlement before they ever enter into it.  If it wasn’t fair, the attorney would surely tell the employee that and try to negotiate better terms, right?

Ultimately, it’s the employees’ decision.  If they don’t like the terms of a proposed resolution of FLSA claims, they can always file suit or a DOL claim then.

If you assume that employers and employees would like to have the opportunity to try to resolve their FLSA disputes prior to litigation or a DOL claim, then it is time to amend the FLSA to give them to right to do so.

And the blueprint for what legislation could look like is easy to find – it’s right in the Age Discrimination in Employment Act (ADEA).  Or, more specifically, it’s right in the Older Workers Benefits Protection Act (OWBPA) amendments to the ADEA.

For reasons that remain somewhat mystifying, releases of age discrimination claims under the ADEA require specific terms that releases of other types of federal discrimination claims do not.  Among other things, such releases must specifically reference the ADEA, they must advise employees that they have the right to consult with an attorney, they must provide the employee with 21 days to consider the release (or 45 days under some circumstances), and they must provide the employees with 7 days to revoke an agreement after signing.

There is no reason that the FLSA couldn’t be amended to permit private settlements along the same lines – with a requirement that the release specifically reference the FLSA, that it advise employees that they have the right to consult with an attorney (or the DOL), that they have 21 days to consider the release, and that they may revoke the release within 7 days.

Don’t like the settlement proposed by your employer?  Don’t sign it.

Don’t understand it?  Talk with a lawyer or the DOL.

Need time to think about it?  You’ve got plenty of time.

Have second thoughts after signing the agreement?  Revoke it.

If such bells and whistles are sufficient to protect older workers who wish to settle age discrimination claims, they should be sufficient to protect all employees who wish to resolve FLSA claims.

Employees would benefit from a system that would encourage employers to address wage issues – and, not incidentally, by which they might not have to share 30-40% of their settlement with lawyers.

Employers would benefit from a system that would help them address those issues while avoiding litigation – saving on paying attorney’s fees to attorneys like me.

The courts and the DOL wouldn’t be clogged with claims that cry out for resolution.

The only people who wouldn’t benefit from this proposed amendment would be the lawyers.

And if you’re worried about us lawyers, you should call a doctor.

©2022 Epstein Becker & Green, P.C. All rights reserved.
For more articles on employment laws, visit the NLR Labor & Employment section.

Friendly Reminder: New Limitations on Non-Competes in Oregon Are Now in Effect

Employers, take note: certain amendments strengthening Oregon’s existing statutory restrictions on non-compete agreements, went into effect on January 1, 2022 – as previewed in our previous blog post.  Coupled with existing limitations in ORS 653.295, the newly-effective amendments mean that a non-compete entered into with an Oregon employee after January 1, 2022 will be “void” ab initio if:

  • The non-compete period extends longer than 12 months;

  • It applies to employees earning less than $100,533.00 in 2021 dollars adjusted for inflation;

  • It was not provided in writing to a new employee at least two weeks before the employee’s first day;

  • The employer did not provide the employee with a copy of the signed non-compete agreement within 30 days following the employee’s termination;

  • The employee is not engaged in administrative, executive, or professional work, performing predominantly intellectual, managerial, or creative tasks; further, the employee must exercise discretion and independent judgment; and be paid on a salary basis;

  • The employee does not have access to either trade secrets or sensitive confidential business or professional information; or

  • The employee is employed as an on-air talent in broadcasting.

Employers of Oregon employees should take steps to ensure they do not run afoul of the above conditions.  If unsure on these points, or about the reasonableness of non-competition restrictions more generally, employers should seek legal assistance.

©2022 Epstein Becker & Green, P.C. All rights reserved.
For more about employer requirements, visit the NLR Labor & Employment section.

January 2022 Legal News Roundup: Law Firm Moves, Hiring & Recognition

Happy 2022 to all of our readers! We hope you all had a safe and healthy New Year. Read on for more legal industry updates.

Recent Law Firm Moves and Hiring

Van Ness Feldman law firm elected three new partners in their Seattle office:

“Clara, Steven, and Chris have distinguished themselves not only through their professional accomplishments, but by their relationships with clients and colleagues. They reinforce the firm’s collaborative culture,” said Van Ness Feldman Seattle Managing Partner Tadas Kisielius.

Stubbs, Alderton & Markiles (SA&M)  have expanded their firm with the additions of Apparel and Fashion lawyer Mark Brutzkus and litigator Nick Rozansky to their office in Southern California.

Mr. Brutzkus represents consumer product companies in various e-commerce and sourcing issues, and has advised apparel, textile and consumer product clients during various stages of the corporate process.

“SA&M is an excellent platform for me to expand my consumer product practice, particularly because the Firm has unparalleled experience working with venture-backed emerging growth, middle-market public, large technology, and entertainment and digital media companies, as well as investors, venture capital funds, investment bankers, and underwriters. More and more of my clients are asking for ancillary practice areas and specialized attorneys who can help with long term, holistic goals,” said Mr. Brutzkus.

Mr. Rozansky advises corporate clients on various issues including litigation matters, risk avoidance, IP protection, and more. When necessary, Mr. Rozansky handles more high-stakes cases such as infringement issues, contract cases and shareholder disputes.

“This move provides my clients with much needed corporate and M&A expertise, and greatly expands my litigation capacity by joining three renowned litigation partners and several extremely capable litigation associates,” said Mr. Rozansky.

“Mark and Nick share the values that make up our unique and coveted culture at Stubbs Alderton, and we look forward to Mark and Nick making immediate and lasting contributions to our Firm,” said Scott Alderton, SA&M’s Managing Partner.

Gilbert LLP elected Heather Frazier to the firm’s partnership, effective January 1, 2022. Ms. Frazier focuses on insurance recovery in mass-tort proceedings, complex alternative dispute resolution, and other matters. Ms. Frazier has been with Gilbert since 2015.

“I am thrilled to join the partnership at Gilbert alongside the most innovative and dynamic lawyers I have had the fortune to know. I look forward to continuing to contribute to the firm’s growth and unique culture in this new role and assisting our clients in resolving the unresolvable,” said Ms. Frazier.

“In her time with us, Heather has established herself not only as an excellent lawyer, but also as an outstanding Gilbert citizen. She has been a true asset to all of us, serving our clients and our community with talent, dedication and tenacity.  We look forward to a long, exciting and mutually satisfying relationship with our newest partner,” said firm founder Scott Gilbert.

Bernstein Shur law firm announced the election of four attorneys to shareholder:

“This is an outstanding group of lawyers. They’ve each shown impressive dedication not only to their clients but also to our local communities and the legal profession. I’m confident they will continue to use their deep knowledge and skills to deliver high-quality legal counsel to help our clients meet their business goals,” said Bernstein Shur CEO Joan Fortin.

Legal Industry Recognition and Awards

Polsinelli’s intellectual property department recently ranked in three of Patexia Inc.’s reports: ANDA Litigation Intelligence Report, IPR Intelligence Report and CAFC Intelligence Report.

The firm received multiple awards, including ranking among the Best Performing and Most Active Law Firms in several categories in Patexia Inc.’s 2021 ANDA Litigation Intelligence Report. Polsinelli also ranked among the Best Performing and Most Active Law Firms, which evaluated 243 law firms and 1,471 attorneys on activity and performance within the Hatch-Waxman/ANDA space.

“Our team continues to work hard and provide excellent client service, which is on display as we continue to rank highly in Patexia’s various reports,” said our Intellectual Property Department Chair Pat Woolley. “As one of the nation’s largest IP practices, our commitment to focusing on our clients’ businesses and service needs has again enabled us to earn recognition as one of the best performing firms.”

Dinsmore earned a diversity award from Crain’s Cleveland Business in its issue recognizing seven “notable businesses championing diversity and inclusion.” Dinsmore recently earned Mansfield Rule 4.0 Certification Plus for the 2021 iteration of the diverse leadership hiring initiative.

The firm also launched a  Pre-Law Minority Program to help students of color at four Kentucky universities, as well as creating a fellowship with Procter & Gamble and the Ohio Innocence Project at Cincinnati Law for a recent diverse law school graduate to gain experience in civil rights litigation and policy.

Everyone has a customer in the business world, and the customer population is becoming more diverse,” partner Richik Sarkar told Crain’s. “Look around your company. If everyone seems the same, especially in leadership, you’ll have a problem serving your customer, and if you don’t take steps to understand your customers, you’ll face failure sooner rather than later.”

Six Wiggin and Dana attorneys are included on the Best Lawyers in America® 2022 Family Law Edition.

They include the following partners:

And one associate is included on the Best Lawyers 2022 “Ones to Watch” list:

Chief Justice Stuart Rabner and the Supreme Court of New Jersey appointed Stark & Stark Shareholder Bhaveen Jani to the Supreme Court of New Jersey to the Supreme Court Committee on the Unauthorized Practice of Law.

“I am honored to have just been appointed to an important Supreme Court Committee where I will be able to protect the people in New Jersey and the legal profession from the unauthorized practice of law,” said Bhaveen. “Great responsibility comes with being an attorney, especially for our clients and the community, and this committee will work to protect those we serve.”

Mr. Jani’s three year term began January 1, 2022, and will end on December 31, 2024. Mr. Jani is part of a number of professional organizations in New Jersey, which qualified him for the position. These organizations include the New Jersey State Bar Association, the South Asian Bar Association of New Jersey, the New Jersey Association for Justice, the American Association for Justice, the Hunterdon County Bar Association and the Mercer County Bar Association.

The committee performs three major functions, including supplying advisory opinions, inquiry into complaints and investigation of the unauthorized practice of law.

Shumaker attorney Melanie Griffin was appointed by Florida Governor Ron DeSantis as the Secretary of the Florida Department of Business and Professional Regulation (DBPR). Ms. Griffin has advised businesses in a variety of commercial law issues and also has substantial employment law and trust and estate experience as well. Ms. Griffin has been recognized by many organizations over the years for her outstanding leadership efforts.

“I’m so pleased for Melanie to have this opportunity to service the citizens of the state of Florida,” said Ron Christaldi, Shumaker’s Tampa Managing Partner and President of Shumaker Advisors Florida. “With her depth of experience and her understanding of the business community, she will be an excellent leader of this important state agency.”

Shelli Erffmeyer and Renee Stallions, employees at Varnum LLP, were recently named Unsung Legal Heroes by Michigan Lawyers Weekly. The publication’s award recognizes non-attorney legal professionals who frequently surpass expectations and go above and beyond in their roles. Ms. Erffmeyer, a legal assistant supporting Varnum’s Litigation practice group, has been noted for her outstanding initiative and dedication, especially through the ongoing COVID-19 pandemic. Ms. Stallions, a senior systems applications analyst in the firm’s Information Technology Department, has been noted for her considerable flexibility and work ethic, ensuring Varnum’s technology continues to operate efficiently across all offices.

“Both Shelli and Renee are very deserving of this recognition. Their exemplary service and commitment to the firm was especially appreciated this past year throughout the challenges of the pandemic,” said Scott Hill, Varnum Executive Partner. “As we congratulate Shelli and Renee, we are once again reminded of the vital role of our support staff. Their contributions are critical to the success of our firm.”

Much Shelist, P.C. has announced its new membership in the Law Firm Antiracism Alliance (LFAA). The LFAA, which seeks racial equality and systemic change in the law, helps to coordinate allied law firms in order to enact change that benefits underserved and oppressed communities. Previously, Much has assisted the LFAA in filing an amicus brief before the Supreme Court, which argues that the Court should consider the retroactive application of Ramos v. Louisiana (which holds that non-unanimous jury verdicts are unconstitutional).

“We’re proud to join the nearly 300 Alliance firms working together to address systemic racism in the law,” said Steve Blonder, chair of the firm’s social responsibility initiative, Much Community. “It’s our privilege and our responsibility to continue working for the rights of marginalized people.”

Copyright ©2022 National Law Forum, LLC

Article By Hanna Taylor,  Rachel Popa and Chandler Ford of The National Law Review / The National Law Forum LLC

For more articles on the legal industry, visit the NLR Law Office Management section.

U.S. Supreme Court Lifts Preliminary Injunctions on Healthcare Worker Vaccine Mandate

On January 13, 2022, the United States Supreme Court upheld the Centers for Medicare & Medicaid Services (“CMS”) Interim Final Rule (the “Rule”) in a 5-4 decision, staying the preliminary injunctions issued for 24 states by the District Courts for the Eastern District of Missouri and the Western District of Louisiana.  Therefore, the CMS vaccine mandate is in full effect for all states except Texas, which was not part of the cases before the Court.  The Rule requires nearly all workers at Medicare- and Medicaid-certified facilities—whether medical personnel, volunteers, janitorial staff, or even contractors who service the facilities—to be fully vaccinated against COVID-19 unless they qualify for a medical or religious exemption.

The Court based its holding on two main points.  First, the Court held that Congress clearly authorized CMS to put conditions on funding it provides to the Medicare and Medicaid certified facilities.  The Court opined that perhaps CMS’s “most basic” function is to ensure that regulated facilities protect the health and safety of their patients, noting that Medicare and Medicaid patients are often some of the most vulnerable to infection and death from COVID-19.  Because CMS determined that a vaccine mandate is necessary to protect patient health and safety, the Court held the mandate “fits neatly within the language of the [authorizing] statute.”  The Court acknowledged that CMS has never required vaccinations in the past, but attributed this in part to the fact that states typically already require necessary vaccinations like hepatitis B, influenza, and measles for healthcare workers.

Second, the Court held that the mandate is not arbitrary and capricious, and cautioned the district courts that their role is merely to make sure an agency acts within the “zone of reasonableness.”  The Court found the administrative record sufficient to explain CMS’s rationale for the mandate and also accepted that getting the vaccine mandate in place ahead of winter and flu season satisfied the “good cause” standard for skipping the notice and comment period.

Healthcare employers subject to the Rule should immediately start implementing vaccine requirements if they have not already.  It is anticipated that in all states but Texas, CMS will likely begin enforcement of the vaccine mandate in approximately 30 days.  On December 28, 2021, CMS released guidance to state surveyors with enforcement standards to use starting 30 days from the memo, though at the time the memo only applied to the 25 states that were not enjoined.  Healthcare employers should also keep in mind that this is not the end of the road: the Court’s holding only means that the CMS vaccine mandate is in force while the 5th and 8th Circuits complete their review of the underlying state challenges to the mandate.  While the Supreme Court’s opinion sends a strong message that lower courts should uphold the mandate, there is no guarantee they will do so.

The legal landscape continues to evolve quickly and there is a lack of clear-cut authority or bright line rules on implementation.  This article is not intended to be an unequivocal, one-size-fits-all guidance, but instead represents our interpretation of where applicable law currently and generally stands.  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, including, without limitation, potential liability should an employee become ill, requirements regarding family leave, sick pay and other issues.

Article By Keeley A. McCarty and Ashley T. Hirano of Sheppard, Mullin, Richter & Hampton LLP

For more health law legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

7 Tips to Avoid Employer Mandate Assessments and Penalties under the Affordable Care Act

As we discussed in a prior article, it is now more important than ever for employers to ensure they fully and accurately complete IRS Forms 1094-C and 1095-C — forms required to be filed and/or furnished to employees under the Affordable Care Act. A failure to do so can lead to eye-popping proposed employer shared responsibility payment (ESRP) assessments, as well as information reporting penalties.

To avoid such costly mistakes, employers should keep the following seven tips in mind when completing or reviewing Forms 1094-C and 1095-C:

Form 1094-C

  1. Be very sure that the “Yes” box is checked on Line 23, column (a) to state that minimum essential coverage was offered for all 12 months.

This is far and away the single most important data entry on both forms. The box should always be checked for an employer who provides minimum essential health coverage to all full-time employees in accordance with the Affordable Care Act (ACA). Failing to check this box may result in an automatic ESRP assessment of up to $2,700 per full-time employee for 2021. The amount is adjusted annually.

  1. Know when to check the box on Line 22 for “Qualifying Offer Method.”

If an employer is eligible to use the Qualifying Offer Method, it should check this box only if it is reporting offers of coverage on Forms 1095-C using code 1A.

Form 1095-C

  1. Conduct a coding audit and know where to prioritize.

Each of the below tips and other points of review for Forms 1095-C should be addressed prior to the furnishing and filing of the forms. Only by reviewing and understanding the codes can an employer have confidence that it will avoid an ESRP assessment or accuracy-related information return penalties. Of course, depending on the number of employees, reviewing the coding for all employees may be impracticable. Thus, employers should prioritize the following situations for review:

  • Forms for employees who were hired, terminated, or who experienced a change in status during the year;
  • Forms where code 1H is reported; and
  • Forms for employees who are more likely to be eligible for the premium tax credit (e.g., employees earning less than $51,040 in 2021).
  1. Review for “red flag” coding combinations on lines 14 and 16.

The following code combinations are triggers for an ESRP assessment and should never be used by an employer who provides minimum essential health coverage to all full-time employees: 1H/__, 1H/2C, 1H/2F, 1H/2G, and 1H/2H. All of these code combinations report that no offer of coverage was provided but fail to state a valid reason for why an ESRP should not apply. Where no offer of coverage is made, only one of the following code combinations should be used: 1H/2A, 1H/2B or 1H/2D.

  1. Review for incomplete coding on lines 14 and 16.

For employers who are not using the Qualifying Offer Method, both code series (series 1 and series 2) on lines 14 and 16 should always be completed for all months on the Forms 1095-C of all full-time employees. However, if an employer is using the Qualifying Offer Method, then it will be acceptable in many instances to use only code 1A and to leave the series 2 code blank.

  1. Make sure the safe harbor code reported on line 16 actually applies.

In more recent years, the IRS has begun scrutinizing the series 2 safe harbor codes reported by employers on line 16. For example, the IRS will automatically reject an employer’s use of code 2G, the federal poverty line safe harbor, if the monthly employee required contribution reported on the Form 1095-C exceeds $104.53 for a month in 2021.

  1. Ensure the waiting period is coded correctly on lines 14 and 16.

If an employee is in a waiting period on any day of a month, the month should be coded as 1H/2D to signify that the employee is in a limited non-assessment period. This code can only be used for up to four consecutive months for each period of employment. If an employee was terminated and rehired in the same year, the employer should determine whether the waiting period and code 1H/2D can be applied again under the rules for determining periods of employment.

© 2022 Bradley Arant Boult Cummings LLP

SCOTUS Cert Recap: Civil Procedure, Bankruptcy, And Worker’s Comp

This week, the U.S. Supreme Court granted three of the cert. petitions it considered at its first conference of the new year.

The Court agreed to hear issues involving: 1) the grounds for relief from a final judgment under Federal Rule of Civil Procedure 60(b)(1), 2) the limits on Congress’ authority to apply different bankruptcy rules to different parts of the country, and 3) the scope of states’ authority to apply their workers’ compensation laws to federal facilities.

Such issues are not the most high-profile the Court will address this term, as underscored by the absence of cert-stage amicus briefs in all three of the cases (though this is less uncommon than one might think; by our calculations, about 40 percent of the cert. petitions granted for plenary review last term lacked cert-stage amicus briefs). For governmental entities, bankruptcy practitioners, and federal court civil litigators, however, the cases are worth noting and following.

Rule 60(b) Motions for Relief from Final Judgment

In Kemp v. United States, the Court finally agreed to resolve what the cert. petition characterizes as a 50-year circuit split on whether the “mistake” prong of Rule 60(b)(1) authorizes relief based on a district court’s legal error. Rule 60(b) sets out six categories of reasons why a district court may relieve a party from a final judgment, including “mistake, inadvertence, surprise, or excusable neglect” under 60(b)(1) and “any other reason that justifies relief” under 60(b)(6). The lower courts agree that 60(b)(1) and 60(b)(6) authorize relief for at least some legal errors, but disagree about which of those provisions does so.

And that seemingly picayune distinction can matter. The Federal Rules require all 60(b) motions to be made “within a reasonable time” but set a hard one-year time limit for relief sought on 60(b)(1) grounds. This means that if Rule 60(b)(1) does not encompass legal errors, motions alleging legal errors would fall under Rule 60(b)(6) and would not need to meet the bright-line one-year rule – though such motions would then be subject to the Supreme Court’s additional requirement that 60(b)(6) motions establish “extraordinary circumstances” justifying relief. Accordingly, the question in this case can mean the difference between a timely and untimely 60(b) motion, and civil litigators should be on the lookout for the Court’s answer.

Congress’ Authority to Adopt “Uniform” Bankruptcy Rules

The Court will also take up Siegel v. Fitzgerald, where it will consider the meaning of the Constitution’s Bankruptcy Clause, which authorizes Congress to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” The petitioner in this case contends that Congress violated this “uniformity” requirement by dividing the nation’s bankruptcy courts into two slightly different categories. Most operate under the U.S. Trustee program, while six (all in North Carolina and Alabama) operate under the Bankruptcy Administrator program.

In 2017, Congress increased the quarterly fees paid by debtors in large Chapter 11 bankruptcies from $30,000 to $250,000, and while this increase was immediately applicable to all pending and future cases in Trustee districts, it was imposed in Administrator districts nine months later, and then only to future cases. In Siegel the Court will decide whether this difference renders the 2017 statute unconstitutionally “non-uniform” (and, if the Court concludes it is unconstitutional, there will be a further difficult question to tackle concerning how such a defect should be remedied). Notably, even the respondent (who is represented by the U.S. Solicitor General) urged the Court to take this case, observing that though Congress eliminated the difference in 2020, the question presented in this case could affect the status of approximately $324 million in quarterly fees imposed nationwide under the 2017 statute.

In light of such figures, bankruptcy professionals across the country – especially those with cases subject to the 2017 statute – will likely have a strong interest in what the Court will say.

Limits on States’ Application of Workers’ Compensation Laws to Federal Facilities

In United States v. Washington, the Court agreed to hear the federal government’s challenge to a Washington workers’ compensation law that applies exclusively to contractors at a federally owned nuclear-waste cleanup site. Under longstanding principles of intergovernmental immunity, state regulation of federal facilities is generally permissible only where such regulation is clearly authorized by Congress. And the federal government contends that the relevant statute here – which allows states to regulate workers’ compensation at federal facilities “in the same way and to the same extent as if the premises were under the exclusive jurisdiction of the State” – does not permit states to single out federal facilities for unique treatment. The state of Washington, meanwhile, counters that states routinely apply different rules to different employers, and it argues that the federal statute simply authorizes such context-sensitive regulation at private and federal facilities alike.

The dispute accordingly consists of competing interpretations of a narrow federal statute (40 U.S.C. § 3172(a)), and it is therefore difficult to see how the case could have much broader significance outside the workers’ compensation context. Contractors working at federal facilities, however, may be interested to see whether the Supreme Court opens the door for future challenges to state workers’ compensation laws.

© 2022 BARNES & THORNBURG LLP

Article By Kian Hudson of Barnes & Thornburg LLP

For more articles on SCOTUS, visit the NLR Litigation / Trial Practice section.

Will A Starbucks Union Affect Your Morning Cup Of Coffee?

Many among us can’t face the day ahead until they get their morning fix of caffeine, and Starbucks is a popular choice for procuring a morning beverage. While the coffee chain giant has long been known for employee perks and strong employee culture, some baristas in Buffalo, New York, recently formed the first union at a corporate-owned Starbucks store. The employees cited problems associated with understaffing, among other things.

The union’s recent election victory means that Starbucks will have to sit down and negotiate in good faith a collective bargaining agreement to cover the terms and conditions of those workers’ employment. Depending on the terms negotiated, believe it or not, changes to how and what you can order at a unionized café may be on the horizon.

Labor agreements typically cover wages, insurance benefits, grievance and arbitration procedures, workplace policies, and a host of other issues affecting employment. The employer and union go through negotiations to come to an agreement on specific language on each of the terms and then those terms control. For example, if a company agrees in a collective bargaining agreement that it will have a minimum staffing level for a shift, then a union can file a grievance seeking damages if the employer fails to keep staffing levels at the minimum. In a non-union setting, this typically is not a concern due to the absence of a grievance and arbitration procedure.

One item that could be of interest to coffee drinkers if it comes up in negotiations is limits on coffee orders. Baristas in Buffalo cited burnout from extensive mobile orders that allow customers to preorder and then pick up drinks and food at the café. The workers believed the volume was too much to keep up with. Custom orders – such as a latte with non-fat milk, two pumps of vanilla, one pump of mocha, and exactly two ice cubes – have been a point of frustration for baristas as well. The union may propose limits on the number of mobile orders a barista can be required to accept per hour and additional limits on the amount of specialty modifications that can be made to a drink. In other words, you may not be able to place a mobile order at the time you want or get all the customizations you desire if ordering from a location restricted by such an agreement. That doesn’t mean Starbucks needs to (or will) agree to those proposals, but based on the employee complaints we’ve seen, it’s likely to be an issue at the table – so it’s possible such a provision could make its way into a labor agreement.

We’re now seeing more union petitions being filed at Starbucks stores around the country, including in Chicago and Boston. To the extent we see a national wave of Starbucks cafés getting unionized, your morning cup of coffee may look different in 2022 and beyond.

© 2022 BARNES & THORNBURG LLP
For more articles on unions, visit the NLR Labor & Employment section.