Category: Uncategorized

Preparing Your Workplace to Address Coronavirus Risks: FAQs for Employers

Employers in the United States should continue to prepare for a widespread outbreak of COVID-19, commonly referred to as the coronavirus, as new cases are confirmed daily. These preparations include assessing work-related travel (as well as employee personal travel) and implementing more expansive work-from-home policies.

Although COVID-19 is new, the steps employers should take are not unlike the approaches recommended to address the annual flu season as well as prior outbreaks such as H1N1 (the “Swine Flu”), Severe Acute Respiratory Syndrome (“SARs”) or Ebola.

Employers should carefully monitor recommendations from the U.S. Centers for Disease Control and Prevention (“CDC”) and other public health agencies in connection with the creation of workplace plans and strategies. As this is an evolving situation, best practices for the workplace will continue to develop as conditions change. Carefully tailoring an employer’s plan so as to act consistently with current public health guidance will help keep employees, patients, customers and clients safe as well as reduce an employer’s legal risks. If an employer has an on-site medical professional, partnering with such an expert regarding the implementation of such a plan is strongly advised.

What is the coronavirus and how does it spread?

The novel coronavirus causes coronavirus disease 2019 or COVID-19. Reported cases include respiratory illness with symptoms of fever, cough and shortness of breath. It is spread mainly from person to person either in close contact with each other or through the transmission of respiratory droplets when an infected person coughs or sneezes. The number of cases continues to grow, but for now, most cases continue to be mild.

What steps should employers take to reduce the risk of the coronavirus spreading in their workplaces?

There is no vaccine to prevent the coronavirus. The best way to prevent the spread of any respiratory illness in the workplace is to exercise commonsense measures. Health officials, including the CDC, recommend the following preventive measures:

  • Sick employees should stay home from work until they are free of fever, signs of a fever, or any other symptoms for at least 24 hours without the use of fever-reducing or symptom-altering medicine.
  • Wash hands vigorously with soap and water or an alcohol-based hand rub for at least 20 seconds.
  • Avoid touching one’s face, especially eyes, nose and mouth.
  • Exercise respiratory etiquette and cover one’s mouth when coughing or sneezing.
  • Clean frequently touched surfaces.
  • Maintain at least three feet of distance between oneself and others, including those who are coughing, sneezing or have a fever.

What steps should employers take to prepare for employee communications?

Employers should take steps to be prepared for communicating important health and safety information to all their employees whenever such information needs to be shared. Employers may need to reach employees while outside the workplace and outside regular working hours. Employers should ensure that they have up-to-date contact information for all employees in case health and safety updates need to be communicated. Messaging regarding the coronavirus should come from a dedicated workplace representative to avoid the sharing of conflicting information and to prevent employee confusion and undue alarm.

What employment laws should employers consider when making decisions regarding the coronavirus?

Employers should consider the Occupational Safety and Health Act (“OSH Act”), the Americans with Disabilities Act (“ADA”), Title VII of the Civil Rights Act (“Title VII”), the Pregnancy Discrimination Act (“PDA”), the Family and Medical Leave Act (“FMLA”), state workers’ compensation laws and any federal or state anti-discrimination or disability laws as employers develop plans regarding the coronavirus.

Employers have a legal obligation to provide a safe and healthy working environment free from serious recognized hazards under the OSH Act. Taking reasonable steps to prevent the spread of communicable diseases, like COVID-19, may fall under this requirement. Employers should consider potential discrimination claims that could arise under the ADA, Title VII or the PDA. The ADA protects individuals who are disabled or who are regarded as disabled. The Equal Employment Opportunity Commission (“EEOC”) has stated that while the ADA’s requirements continue to apply, they do not interfere with or prevent employers from following CDC guidelines and recommendations regarding the coronavirus. The EEOC also has indicated that its previously issued guidance regarding the H1N1 pandemic is applicable here. Similar to the EEOC’s approach during the H1N1 pandemic, employer actions that might be viewed as discriminatory under other circumstances (such as requiring an employee to remain at home for a period of time upon returning from travel to certain countries) would not run afoul of the ADA when taken to limit workplace exposure to the coronavirus. This is because either COVID-19 will not be considered a disability because the resulting illness is mild or, alternatively, if COVID-19 becomes more severe and/or widespread, an employer’s actions to limit the spread of the coronavirus will likely be deemed justified given the direct threat posed to other employees, customers, patients or the public at large.

Employers should also take care not to discriminate against employees based on their national origin. Accordingly, employers should establish consistently applied and clearly communicated practices with regard to self-quarantining of employees. For instance, consistent and science-based practices should be followed when employees return from travel to certain countries facing significant outbreaks, rather than singling out employees on an ad hoc basis who may have visited their countries of origin. Recent reports suggest a heightened concern regarding possible workplace discrimination against employees of Asian descent.

While pregnant women may be more susceptible to viral respiratory infections or severe illness, the CDC has released no guidance establishing that such individuals are more susceptible to COVID-19 than the general population. Employers should thus ensure they are not engaging in disparate treatment of pregnant employees.

In addition to discrimination concerns, employers should consider what reasonable accommodations they may need to provide employees under the ADA or the PDA.

Employers also should be prepared to grant FMLA leave to employees who test positive for (or display symptoms of) COVID-19 or who require leave to care for an individual with COVID-19.

Lastly, employees who contract COVID-19 in the scope of their employment may be entitled to make claims under their employers’ workers’ compensation policies.

Should employers cancel work-related travel?

As of March 6, 2020, the CDC recommends avoiding all nonessential travel to China, Iran, Italy and South Korea and has issued travel alerts recommending that travelers practice enhanced precautions in Japan. These travel advisories extend to layovers in the affected areas. Moreover, entries into the United States of foreign nationals who have been in China or Iran in the 14 days prior to entering the United States have been suspended in many circumstances.

Employers should consider these travel advisories when formulating their business travel plans. Many employers are suspending all business travel to the affected areas. Employers face potential risk when requiring employees to travel to areas where the CDC and other federal agencies have advised against non-essential travel. Other employers are limiting or suspending all non-essential travel or canceling in-person attendance at conferences or meetings in light of the potential spread of the coronavirus.

In assessing work-related travel plans, employers should ensure that they do not single out certain groups (e.g., limiting a pregnant employee’s travel due to the risk of exposure to the coronavirus, but allowing other employees to travel).

Should employers cancel large conferences or other community events?

Employers planning events should stay informed about local coronavirus risks. The CDC is recommending event organizers and staff review existing emergency operations plans and focus on prevention strategies, such as frequent handwashing and encouraging both staff and patrons who are sick to stay home. If events are proceeding, the implementation of flexible refund policies may help encourage sick individuals to stay home. And organizers should have supplies that help prevent the spread of viruses such as soap, hand sanitizer and facial tissue available to employees and attendees. Organizers should also establish criteria with the venue and local public health officials to determine under what specific circumstances events will be postponed or canceled.

What should employers do when they suspect an employee was exposed to the coronavirus and is symptomatic?

An employer should send such an employee home and advise him or her to seek immediate medical attention. The employee should be required to remain at home until he or she no longer displays symptoms and is not contagious. The decision to discontinue home isolation should be made on a case-by-case basis, in consultation with health care providers and state and local health departments.

Are employees sent home due to exposure to the coronavirus (self-quarantined) entitled to paid leave?

Employers typically are not legally obligated to provide paid leave to employees who are sent home due to suspected COVID-19 infection or exposure unless state or local paid sick leave laws apply. However, employers should consider allowing employees to utilize paid leave under any available employer leave policies. If the employee is able to perform his or her job remotely, and is physically able to work, employers should consider allowing remote work during such self-quarantine period, even if such remote work is not consistent with the employer’s regular practices. Employers should consult with counsel to determine whether and when to offer paid or unpaid leave to employees facing quarantine situations. And any modification of an employer’s routine policies and practices to address this unique circumstance should be implemented consistently.

What should employers do if employees travel to affected areas (currently China, Iran, Italy, South Korea and Japan ) but do not display any symptoms upon return?

Many employers are encouraging (but not requiring) self-quarantining regardless of whether the employee is symptomatic. Others are requiring employees to self-quarantine for up to 14 days (the commonly presumed incubation period for the coronavirus) after returning from these areas. As the list of affected countries continues to expand and risk levels continue to change, employers should carefully monitor and reevaluate their practices.

Requiring self-quarantining protects other employees. On the other hand, requiring self-quarantining for those who have traveled to affected areas may expose an employer to potential claims under the ADA, Title VII, or other anti-discrimination statutes, especially where a forced quarantine situation results in the employee’s loss of income or other benefits. Such legal risks may be reduced where an employee is able to work remotely and thus is compensated during the quarantine period.

When employees work from home, are they entitled to a reasonable accommodation under the ADA, the PDA or other equal employment opportunity laws?

Employees are entitled to reasonable accommodations that will enable them to perform the essential functions of their positions. For example, if an employee has been provided the accommodation of a low-vision screen reader on his or her work computer, that employee should have access to such a screen reader as a reasonable accommodation when required to work at home.

Can employers ask employees if they have traveled to one of the affected areas?

Yes. Given the ongoing travel advisories and the recommendations of the CDC and other federal agencies regarding travel to affected areas and self-quarantining to limit the spread of the coronavirus, there is likely low risk in requiring employees to disclose their recent travel destinations.

Can employers require a return to work or fitness for duty exam to allow employees to return to work?

Employees who have been diagnosed with COVID-19 should only discontinue isolation after consulting health care providers and state and local health departments. Employers may require the employee to provide proof that isolation can be discontinued before the employee returns to work.

But for employees who have not been diagnosed with COVID-19, it practically may be difficult to receive a return to work exam given that there has been a shortage of testing kits to test for COVID-19. The CDC has also recognized that health care offices may be busy and it may be difficult for an employee with acute respiratory illness to validate their illness or return to work. Employers must take care to treat employees with similar symptoms in a consistent manner.

What should an employer do if an employee fears coming to work due to possible exposure in the workplace?

Creating and implementing consistent plans for preventing and addressing potential workplace exposure and communicating such measures clearly and effectively will go a long way to reducing employee fears of workplace exposure. Employers should assess the specific risk in the workplace on a case-by-case basis. Currently, federal guidance is focused on encouraging those who are sick (or may have been exposed to the coronavirus) to stay home. In the event of a more particularized risk, such as an actual case of exposure to the coronavirus in the workplace, employers may wish to encourage (or require) working from home or offer more lenient work from home options to its employees.

Should employers inform employees if there is an identified case of COVID-19 in the workplace?

Yes. Employees should be informed of confirmed cases in the workplace. But employers must ensure that employee confidentiality is maintained as required under the ADA, the Health Insurance Portability and Accountability Act (“HIPAA”) and any other state or federal law.

Should employees be encouraged to wear face masks?

The CDC has not recommended that healthy persons wear face masks. Face masks are reported to have no benefit for a healthy person in preventing their exposure to the coronavirus, although masks may provide some benefit if worn by sick persons in limiting their spread of the virus to others. The CDC has urged people to stop buying masks because such consumer behavior is depleting necessary resources from health care professionals who need them.

What about specific guidance for health care employers?

The CDC has issued specific guidance to try to prevent the spread of the coronavirus into, among, and between health care facilities, including monitoring patients and employees for fever or respiratory systems, encouraging employees to stay home if they have symptoms of respiratory infection and identifying which employees will care for patients with COVID-19. It is critical for health care facilities to have a plan in place to respond to any outbreak. There are potentially severe risks to patients facing health challenges if they are being cared for by employees who have been exposed to the coronavirus.

Is there a special risk for employees who handle packages or products shipped from an affected area?

The CDC has issued guidance that it is unlikely that the coronavirus can spread vis-à-vis products or packaging. Some employers may nevertheless decide to offer specific personal protective equipment (“PPE”) to those employees handling packages or products from affected areas, simply in an effort to mitigate employee fear or concern. In such cases, employees should be properly trained on the use and disposal of the PPE.

What other issues may employees working abroad face?

Consular offices may be closed due to the coronavirus outbreak. Currently, field offices in Beijing and Guangzhou are closed. Such closures may delay any communications with immigration officials

© 2020 Vedder Price

For more on the coronavirus, see the National Law Review’s New Coronavirus News section.

Youtube May Be an Enormous Town Square, But It’s Still Not Subject to the First Amendment

In Prager University v. Google LLC, et al., Case No. 18-15712 (9th Cir. Feb. 26, 2020), the Court of Appeals for the Ninth Circuit dismissed a First Amendment lawsuit against YouTube late last week, holding that the video hosting giant is a private forum that is free to foster particular viewpoints – and need not be content-neutral.  The victory is a significant message to other online content hosts, aggregators and service providers that they need not feel threatened by censorship claims for selecting and curating content on their systems.

The lawsuit began in 2017, when conservative media company PragerU sued YouTube for imposing restrictions on some of PragerU’s short animated educational videos.  YouTube tagged several dozen videos for age-restrictions and disabled third party advertisements on others.  PragerU claimed the restrictions constituted censorship because they muted conservative political viewpoints.

Traditionally, the First Amendment regulates only U.S. and state government actors when it comes to censoring speech; it does not touch the actions of private parties.  The Ninth Circuit noted that these principles have not “lost their vitality in the digital age.”  While this threshold question is not new, PragerU’s approach to this legal hurdle has drawn fresh interest in how courts’ conception of state action might one day shift in order to accommodate the digital re-imagining of a marketplace of ideas.

PragerU argued that YouTube should be treated as something akin to a government where it operates a “public forum for speech.”  The theory follows that because YouTube has an overwhelming share of the video sharing and streaming space, it essentially performs a “public function.”  The Ninth Circuit affirmed that public use of private resources, even on a large scale, is simply not governmental.  Just because YouTube generally invites the public to use its private property (in this case, its platform) for a specific or designated purpose, does not mean that property should lose its private character.  Similarly, the Ninth Circuit ruled almost twenty years ago that internet service provider America Online was not a government actor even though it broadly opened its networks to the public to send and receive speech.

PragerU’s theory does enjoy some support.  As the Ninth Circuit acknowledged, a private actor is a state or government entity for First Amendment purposes when it performs a public function that is “traditionally and exclusively governmental.”  In other words, the First Amendment may well still apply to private companies tasked with operating public elections or even local governmental administrative duties (for example, the proverbial “company town”).  But the Ninth Circuit simply did not accept the argument that YouTube’s function of “hosting speech on a private platform” bore any resemblance to “an activity that only governmental entities” traditionally and exclusively perform.  After all, noted the Court, even “grocery stores and comedy clubs have opened their property for speech.”  Neither was the Court persuaded that the sheer scale of YouTube’s operation – equal to perhaps many millions of grocery stores and comedy clubs – should alter the analysis.

Had the Ninth Circuit adopted PragerU’s approach, it would have been the first major judicial endorsement of the view that a private entity can convert into a public one solely where its property is opened up to significant public discourse.  Instead, the Ninth Circuit imposed and upheld a more traditional delineation between public and private actors in First Amendment jurisprudence.

© 2020 Mitchell Silberberg & Knupp LLP

See the National Law Review for more on constitutional law questions.

NEPA’s Rebirth?

The administration has long viewed the National Environmental Policy Act of 1969 (NEPA) as a stumbling block for major federal projects, including energy, infrastructure, pipelines, permitted actions, etc. After 50 years, the Council on Environmental Quality (CEQ) is proposing to limit NEPA reviews. See 85 F.R. 1684 (1/10/2020). CEQ’s regulations have in the past been entitled to deference by courts.

Agency NEPA reviews entail: categorical exclusion for minor projects, environmental assessments (EAs) for less than significant impact projects, and/or full blown environmental impact statement (EISs) for major projects with significant impacts on the human environment. Project impacts and alternatives, including no action, are to be considered by an agency. NEPA requires environmental impact disclosure yet does not require a wise agency environmental decision. The NEPA process has allegedly been exploited by interest groups in courts for delay of projects.

The CEQ’s proposed new NEPA rules will basically make its prior NEPA guidance obsolete. However, CEQ’s prior greenhouse gas guidance remains an issue for these rules or for future guidance. These proposals narrow NEPA, for example, environmental consequences are to be direct and causally related and reasonably foreseeable rather than indirect or cumulative; alternatives are to be within an agency’s authority and feasible for project goals, and many alternatives can be eliminated from detailed study; EAs are generally to be no longer than 75 pages and take no more than one year; and EISs are to generally to be no longer than 150 pages and take no more than two years.

The proposed rules mention administrative stays of actions and also de-emphasize remedies like court injunctions. They also suggest that bonds may be needed for any injunctive relief, and add that irreparable injury is not to be presumed for NEPA violations.

Comments are due on or before March 10, 2020 to CEQ at https://www.regulations.gov.

Docket # CEQ-2019-0003.

© 2020 Jones Walker LLP

Can the DOJ Really Prosecute State-Legal Marijuana Entities?

On Feb. 10, 2020, as West Virginia companies were finalizing applications for medical marijuana permits, President Donald J. Trump made statements that caused several companies to reconsider filing. President Trump said he is “empowered to ignore the congressionally approved medical cannabis rider [to the Omnibus Spending Bill], stating that the administration ‘will treat this provision consistent with the president’s constitutional responsibility to faithfully execute the laws of the United States.’”[1]

Both existing medical marijuana companies and those interested in applying for permits want to know whether this assertion of power would be justified and if it would affect their ability to do business going forward. That is: Has the executive branch been empowered to ignore the congressional spending power given to Congress in the Constitution? If so, from where does that power derive? Further, when two Congressional Acts conflict, what is the executive “empowered” to do, if anything?

Under Article II, Section 3, of the Constitution, “The executive power shall be vested in a president . . . [who] shall take care that the laws be faithfully executed.”[2] By assigning the executive power to see that laws be “faithfully executed” and assigning Congress with “all legislative powers” granted by the Constitution, the founders limited the executive to only enforce the laws promulgated by Congress.[3] Thus, the executive branch is given limited power, which “must stem either from an act of Congress or from the Constitution itself.”[4] Under the Controlled Substances Act (CSA), Congress has given the executive expressed power to enforce the laws identified under the CSA. This power, however, is limited to Congressional authority. Thus, the power can be suppressed or eradicated by Congress at will. When this occurs, the executive has little to no ability to enforce the law.[5]

In 1970, Congress enacted the CSA to regulate specific drugs deemed at risk of abuse and dependence.[6] Since then, cannabis has been declared by Congress to be a Schedule I drug, meaning there is no acceptable medical use, establishing its outright ban. To support the banning of cannabis, Congress asserted, “Controlled substances [like cannabis] have a substantial and detrimental effect on the health and general welfare of the American people.” Until 2014, Congress supported the full enforcement of the CSA through Omnibus Spending Bills.

However, in 2014, in public law No. 113-235, Section 38, in the Rohrabacher-Farr Amendment, Congress expressed its will to limit the DOJ’s (executive’s) power to enforce the CSA by restricting the DOJ’s use of congressionally approved funds therein. Specifically, the amendment prevented funds made available under the spending bill “to be used to prevent [32 States and the District of Columbia] from implementing their own state laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” In so doing, Congress effectively removed the DOJ’s power to enforce the CSA against state legal entities.

In addition to the question of enforcement authority by the executive, there are also questions regarding whether Congress was endowed with the power to regulate the cultivation, processing, or sale of drugs generally. In our limited federal government model, in order for Congress to create a law, it must have been given the power to act by the Constitution.[7] There are two essential constitutional provisions typically relied upon to justify the vast majority of our laws, which are both found in Article I, Section 8 of the Constitution.[8] The first is the power to tax and spend for the “general welfare” of the people. The other is the power to regulate interstate commerce. The founders feared the power to tax and spend for the general welfare had the potential to be broadly construed, and they discussed at length how the General Welfare Clause should be interpreted narrowly.[9] 

In other words, absent an enumerated power listed in Article I, Section 8 or an amendment to the Constitution, Congress has no constitutional power to act. Some contemporary examples highlight the means by which Congress has been able to regulate such vices when there is no enumerated constitutional power to do so. For example, when Congress outlawed the sale of alcohol during the prohibition era, it could not do so based on the language of the Constitution. Rather, Congress had to amend the Constitution with the ratification of the 18th Amendment in 1919. Congress had no such constitutional authority to ban alcohol; it had to create a new power to enact prohibition. Likewise, when the federal government wanted to enact a federal minimum drinking age of 21, it knew it could not create a law mandating the restriction, because no such constitutional power exists. Rather, Congress used the General Welfare Clause by conditioning receipt of federal highway funds on a state’s adoption of the 21-year age limit.[10] Congress did not create a national drinking age; it just provided a carrot to trigger state compliance.[11] 

Despite this legislative history, the Supreme Court found Congress has the authority to enact the CSA pursuant to the Commerce Clause.[12] Specifically, in Raich, California’s Compassionate Use Act authorized limited marijuana use for medicinal purposes, and respondents Raich and Monson, who were California residents, both used doctor-recommended marijuana for serious medical conditions.[13] After federal Drug Enforcement Administration (DEA) agents seized and destroyed all six of Monson’s cannabis plants, respondents brought this action seeking injunctive and declaratory relief prohibiting the enforcement of the federal CSA to the extent it prevented them from possessing, obtaining, or manufacturing cannabis for their personal medical use.[14]  Respondents argued enforcing the CSA against them would violate the Commerce Clause and other constitutional provisions.[15] The district court denied the respondents’ motion for a preliminary injunction, but the Ninth Circuit reversed, finding they had “demonstrated a strong likelihood of success on the claim that the CSA is an unconstitutional exercise of Congress’ Commerce Clause authority” as applied to the intrastate, noncommercial cultivation and possession of cannabis for personal medical purposes.[16] On review, the Supreme Court vacated the Ninth Circuit and reinstated the district court’s ruling.[17] It held Congress was acting within its Commerce Clause power in enacting the CSA.[18] Whether that holding would be revisited is a question many are currently asking.

[1] Kyle Jaeger, Trump Budget Proposes Ending State Medical Marijuana Protections and Blocking DC From Legalizing, Marijuana Moment, (February 10, 2020) https://www.marijuanamoment.net/trump-budget-proposes-ending-state-medic….

[2] The Constitution enumerates few powers to the executive.  These include: power to veto bills passed by Congress—art. I, § 7, cls. 2 & 3; power to write checks pursuant appropriations made by law—art. I, § 9; military power as commander in chief—art. II, § 2, cl. 1; pardon power—Id.; power to make treaties, with advice and consent of the Senate—art. II, §2, cl. 2; power to nominate ambassadors, federal judges, and other public officers, with advice and consent of the senate—Id.; power to make recess appointments—art. II, § 2, cl. 3; and power to convene and adjourn both houses of Congress—art. II, § 3. The Constitution also imposes duties on the president, which the president has power to implement. These include: duty to preserve, protect and defend the Constitution—art. II, § 1; duty to advise Congress on the state of the union—art. II, § 3; duty to receive ambassadors and other public ministers—Id.; duty to faithfully execute the law passed by Congress—Id.; and duty to commission officers of the United States—id.

[3] See Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 587-588 (1952).

[4] Id. at 585. 

[5] See id., at 602 (Frankfurter, J. concurring) (stating that “[i]t cannot be contended that the president would have had power” when “Congress explicitly negated such authority in formal legislation.”  Thus, “Congress has expressed its will to withhold power from the president”).

[6] Joanna R. Lampe, Cong. Research Serv., R45948, The Controlled Substances Act (CSA): A Legal Overview for the 116th Congress Summary (2019).

[7] Andrew Nolan, et al., Cong. Research Serv., R45323, Federalism-Based Limitations on Congressional Power: An Overview 4 (2018).

[8] The specific provisions stated within U.S. Const. art. I. § 8 are: “The Congress shall have power To lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;” and “to regulate commerce with foreign nations, and among the several states, and with the Indian Tribes[.]” 

[9] Prior to the ratification of the Constitution, Alexander Hamilton, largely known as the leading advocate for a strong federal government, provided that “[t]his specification of particulars [the 18 enumerated powers of Article I, Section 8] evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended.”[9]The Federalist 83 (Alexander Hamilton) (emphasis added); later Hamilton would take a more expansive view on the clause. See Hamilton, Alexander, (5 December 1791) “Report on Manufactures” The Papers of Alexander Hamilton (ed. by H.C. Syrett et al.; New York and London: Columbia University Press, 1961–79).James Madison, another key Federalist, said if Congress could do anything it wanted to promote the general welfare, then it “would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”[9] Letter from James Madison to James Robertson, Jr., (20 April 1831), National Archives, Founders Online, https://founders.archives.gov/documents/Madison/99-02-02-2332 (last updated September 29, 2019).

[9] See South Dakota v. Dole, 483 U.S. 203, 211-12 (1987).

[10] See id.

[11] Something to consider today is Congress’ recent act to raise the federal age of tobacco use to 21. Rather than attempting to connect the minimum age to a constitutional authority like the prior examples, it appears Congress outright mandated it to the states. This demonstrates that, over time, Congress feels it has gotten stronger as constitutional protections have weakened.

[12] Gonzales v. Raich, 545 U.S. 1 (2005).

[13] Id. at 6-7.

[14] Id. at 7.

[15] Id. at 8.

[16] Id.

[17] Id. at 9.

[18] Id. at 22.

© 2020 Dinsmore & Shohl LLP. All rights reserved.

For more on marijuana businesses, see the National Law Review Biotech, Food  & Drug law section.

FCA Issues Coronavirus Statement

On March 4, the UK’s Financial Conduct Authority (FCA) issued a statement on Covid-19, the novel coronavirus that originated in China in December 2019 and recently spread to Italy and Iran, among many other countries globally (the Statement).

In the Statement, the FCA explained that they are working with the Bank of England and HM Treasury to engage with firms, trade associations and industry bodies to understand the pressures they are facing. This work includes actively reviewing the contingency plans of a wide range of firms.

The FCA noted that all firms are already expected to have contingency plans in place to deal with major events such as this and that firms should be taking all reasonable steps to meet their regulatory obligations. While the FCA has no objection in principle to staff working from home or from alternative sites, firms still need to be able to, for example, use recorded lines when trading and give staff access to any compliance support they may need.

The Statement is available here.

©2020 Katten Muchin Rosenman LLP

How Firm Marketing Leaders Can Shake Up the Law Firm “Caste System”

Marketing professionals and other non-lawyers are all too familiar with the age-old hierarchy that pervades law firms and treats attorneys differently from everyone else. Reminiscent of a caste system, this throwback aspect of law firm culture offers attorneys and staff two separate benefits packages, two separate leave policies, two separate dining rooms.

While this system never could have been called equitable, a few professional generations ago firm leadership could provide an understandable justification for it. Law firm staff worked a predictable nine-to-five schedule, while the lawyers put in hundreds more hours per year, working many “all-nighters.” Lawyers’ jobs were highly specialized, while the firm’s non-lawyers performed administrative tasks that were not central to generating revenue.

What a difference a few decades make. Technology has changed the nature of every role within the firm, allowing lawyers to at least assert some work-life balance by working remotely while non-lawyer staff members likely spend longer hours than ever in the office. In addition, today’s forward-thinking firms have expanded the c-suite to include chief marketing officers, chief information officers and chief financial officers. Increasingly they are also hiring internal operations managers and other pricing experts who can speak the same language as the procurement professionals GCs count on to save their companies money. Each of these members of the team bring highly specialized training and skills to their role — and make a measurable impact on the bottom line. And whether managing partners genuinely value their skills, or are simply responding to client demand for their expertise, the result is the same: these professionals now have a seat at the table with clients.

Given this new reality, it no longer makes sense to cling to a law firm culture that renders non-lawyers second-class citizens. And yet old habits die hard. CMOs may finally be getting (a portion of) the respect they deserve, but what about the members of their teams who execute marketing strategy and play a crucial business development role with existing clients?

To be sure, marketing professionals still face an uphill battle in demonstrating their value to firm leaders. But the upheaval in the old system has created an opportunity for CMOs and marketing directors. With the right strategy and messaging, they can use their newfound platform to advance a discussion about firm policies and shed light on the fundamental work of non-lawyer professionals. Here are three ways to get started:

Rebrand your legal marketers as a business development team. Think carefully about how you talk about what you do when you interface with other stakeholders in the firm. Craft your messaging to emphasize the ways in which marketing directly generates revenue. For many large firms, a significant portion of new business comes from expanding engagements with existing clients, and marketers are on the front lines servicing those client relationships and creating opportunities for attorneys to sell across practices.

And make the case with data. Marketing leaders can use many available tools — from the simple to the sophisticated — to collect and process information about their campaigns and initiatives, and understand what really gets results. Firm leaders respect and respond to hard numbers that help them assess how your department is converting firm resources to new opportunities for business development.

Speak up about policies that don’t pass the smell test. The broader culture is extremely sensitive to matters of diversity and equity, and while law firms may be later arrivals to this conversation, their corporate clients are paying close attention. Is the cost savings of a two-tiered benefits package (assuming there is one) really worth the potentially damaging optics of a negative news story on the firm’s throwback culture? Is your diversity and inclusion initiative really embracing inclusion if only lawyers — and not professional staff members — are invited to participate? Legal marketing leaders can use the credibility they have gained to make the case for reexamining problematic policies and suggesting alternatives.

For most legal industry veterans, it’s impossible to imagine law firms that don’t elevate lawyers high above the rest of the staff. And while we probably won’t be saying goodbye to this outdated aspect of firm culture anytime soon, the demands of the marketplace have introduced some much-needed wiggle room into long calcified roles. Don’t miss this opportunity to help firm leaders appreciate the crucial contributions of legal marketers.

© 2020 Page2 Communications. All rights reserved.

For more on law firm marketing, see the National Law Review Law Office Management section.

6 Months Until Brazil’s LGPD Takes Effect – Are You Ready?

In August 2018, Brazil took a significant step by passing comprehensive data protection legislation: the General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – Law No. 13,709/2018, as amended) (LGPD). The substantive part of the legislation takes effect August 16, 2020, leaving fewer than six short months for companies to prepare.

While the LGPD is similar to the EU’s General Data Protection Regulation (GDPR) in many respects, there are key differences that companies must consider when building their compliance program, to be in line with the LGPD.

Application

The LGPD takes a broad, multi-sectoral approach, applying to both public and private organizations and businesses operating online and offline. The LGPD applies to any legal entity, regardless of their location in the world, that:

  • processes personal data in Brazil;
  • processes personal data that was collected in Brazil; or
  • processes personal data to offer or provide goods or services in Brazil.

Thus, like the GDPR, the LGPD has an extraterritorial impact. A business collecting or processing personal data need not be headquartered, or even have a physical presence, in Brazil for the LGPD to apply.

Enforcement and Penalties

After many debates and delays, the Brazilian Congress approved the creation of the National Data Protection Authority (ANPD), an entity linked to the executive branch of the Brazilian government, which will be tasked with LGPD enforcement and issuing guidance.

Violations of the LGPD may result in fines and other sanctions; however, the fine structure is more lenient than the GDPR’s. Under the LGPD, fines may be levied up to 2% of the Brazil-sourced income of the organization (which is considered any legal entity, its group or conglomerate), net of taxes, for the preceding fiscal year, limited to R$ 50,000,000.00 (app. $11 million), per infraction. There is also the possibility of a daily fine to compel the entity to cease violations. The LGPD assigns to ANPD the authority to apply sanctions and determine how the fines shall be calculated.

Legal Basis for Processing

Similar to the GDPR, an organization must have a valid basis for processing personal data. Personal data can only be processed if it meets one of the 10 requirements below:

  • with an individual’s consent;
  • when necessary to fulfill the legitimate interests of the organization or a third party, except when the individual’s fundamental rights and liberties outweigh the organization’s interest;
  • based on a contract with the individual;
  • to comply with a legal or regulatory obligation;
  • public administration and for judicial purposes;
  • for studies by research entities;
  • for the protection of life or physical safety of the individual or a third party;
  • by health professionals or by health entities for health care purposes; or
  • to protect an individual’s credit.

Sensitive personal information (race, ethnicity, health data, etc.) and children’s information may only be processed with the individual or a parent or legal guardian’s consent, as applicable, or as required by law or public administration.

Individual Rights

Brazilian residents have a number of rights over their personal data. Many of these rights are similar to those found in the GDPR, but the LGPD also introduces additional rights not included in the GDPR.

Established privacy rights, materially included in the GDPR

  • access to personal data
  • deletion of personal data processed with the consent of the individual
  • correction of incomplete, inaccurate, or out-of-date personal data
  • anonymization, blocking, or deletion of unnecessary or excessive data or personal data not processed in compliance with the LGPD
  • portability of personal data to another service or product provider
  • information about the possibility of denying consent and revoking consent

Additional rights provided by the LGPD

  • access to information about entities with whom the organization has shared the individual’s personal data
  • access to information on whether or not the organization holds particular data

Transferring Data Out of Brazil

Organizations may transfer personal data to other countries that provide an adequate level of data protection, although Brazil has not yet identified which countries it considers as providing an adequate level of protection. For all other transfers, organizations may not transfer personal data collected in Brazil out of the country unless the organization has a valid legal method for such transfers. There are two main ways organizations can transfer data internationally:

  • with the specific and express consent of the individual, which must be prior and separated from the other purposes and requisitions of consent;
  • through contractual instruments such as binding corporate rules and standard clauses, committing the organization to comply with the LGPD principles, individual rights, and the Brazilian data protection regime.

Governance & Oversight

In addition to the requirements above, under the LGPD, organizations must, in most circumstances:

  • Appoint an officer to “be in charge of the processing of data,” who, together with the organization, shall be jointly liable for remedying any damage, whether individually or collectively, in violation of the personal data protection legislation, caused by them (there is little specificity around the role or responsibility of the data processing officer; however, it is not mandatory for the officer to be located in Brazil);
  • Maintain a record of their processing activities;
  • Perform data protection impact assessments;
  • Design their products and services with privacy as a default;
  • Adopt security, technical, and administrative measures able to protect personal data from unauthorized access, as well as accidental or unlawful destruction, loss, alteration, communication (likely similar standards to those established under the Brazilian Internet Act); and
  • Notify government authorities and individuals in the case of a data breach.

Meeting these requirements will likely be a significant administrative burden for organizations, especially as they work to meet varying documentation and governance requirements between the GDPR, CCPA, and LGPD. This effort is made more complicated by the lack of clarity in some of the LGPD administrative requirements. For example, while the LGPD requires a record of processing, it does not delineate what should be included in the document, and while it establishes that privacy impact assessments should be carried out, it does not indicate when such assessments are required.

Final Thoughts

Given August 2020 is right around the corner, global organizations processing personal data from or in Brazil should consider immediately moving forward with a review of their current data protection program to identify and address any LPGD compliance gaps that exist. As privacy law changes and global compliance requirements are top of mind for many clients operating global operations, we will be sure to provide timely informational updates on the LGPD, and any ANPD guidance issued.

Greenberg Traurig is not licensed to practice law in Brazil and does not advise on Brazilian law. Specific LGPD questions and Brazilian legal compliance issues will be referred to lawyers licensed to practice law in Brazil.

©2020 Greenberg Traurig, LLP. All rights reserved.

For more privacy laws around the globe, see the National Law Review Communications, Media & Internet law section.

Secretary Of State Issues 2020 Women On Boards Report

The legislation creating California’s female director board quota requires the Secretary of State to publish on his Internet website a report no later than March 1, 2020 a report of the following:

  1. The number of corporations subject to the law that were in compliance during at least “one point during the preceding calendar year”.

  2. The number of publicly held corporations that moved their United States headquarters to California from another state or out of California into another state during the preceding calendar year.

  3. The number of publicly held corporations that were subject to this section during the preceding year, but are no longer publicly traded.

The Secretary of State published the mandated report a day late and without some of the required information.  Below is the Secretary of State’s summary of the report:

The above table illustrates one confusing aspect of the new law – the female director quota law refers to “publicly held corporations” and foreign corporations that are “publicly held corporations” while the corporate disclosure statement requirement applies to “publicly traded corporations” and “publicly traded foreign corporations”.  See Publicly Held Corporations and Publicly Traded Corporations – Non Bis In Idem?

The report explains that the Secretary of State lacked the data necessary to comply with the requirement to report on publicly held corporation’s movement of headquarters or delisting of shares from a particular market or exchange.

© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP

Under Siege from the SEC, Steven Seagal Ponies Up to Settle Charges for Promoting an Initial Coin Offering

Steven Seagal just learned the hard way that, unlike the title of his 1988 police action movie, he is not Above the Law. Unfortunately for the prolific action movie star, the SEC took notice of his recent actions and was Out for Justice. In order to avoid a Maximum Conviction, the SEC recently announced that Seagal made the Executive Decision to settle charges brought by the agency related to the actor’s failure to disclose the nature, scope, and amount of compensation he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen.

The SEC has taken the position that cryptocurrency coins/tokens may qualify as “securities,” and celebrities or other individuals who promote cryptocurrency may run afoul of the federal securities laws if they fail to make adequate disclosures of the compensation they received in exchange for the promotion. One could think of this as a Code of Honor, but the SEC calls it the anti-touting provisions of the Securities Act of 1933. Specifically, Section 17(b) states:

It shall be unlawful for any person . . . to publish, give publicity to, or circulate any notice . . . or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof.

This broad language makes the anti-touting provision The Perfect Weapon for the SEC to go after issuers who seek to use well-known individuals to promote risky cryptocurrency products to vulnerable populations. Indeed, the SEC has previously used this provision to go after other celebrities for similar conduct, including boxer Floyd Mayweather Jr. and music producer DJ Khaled.

Seagal found himself in the Belly of the Beast when he promoted the ICO on his social media accounts and issued a press release titled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.” He also permitted the company to issue a press release that included a quote demonstrating his strong endorsement. In exchange for this publicity, Seagal was promised $250,000 in cash and $750,000 of the company’s coins.

As a result of the settlement, Seagal was ordered to pay over $330,000 in disgorgement, civil penalties, and interest. Seagal also agreed not to promote any security for a period of three years. With Exit Wounds this severe for the well-known movie star, this case should serve as a stark reminder that the SEC is committed to examining all aspects of ICOs and cryptocurrencies with a careful eye. If the SEC catches wind of similar conduct by other celebrities, future cases could be Hard to Kill.

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.

For more on the SEC Segal settlement see the National Law Review Securities & SEC law section.

The 2019 Honig Act Means New Obligations for New Jersey Employers Around Cannabis at Work

Employers cannot afford to ignore the direct impact of the 2019 amendments to the law permitting legal medicinal marijuana use in New Jersey. Among the most important areas of concern, employers must be prepared to (1) create policies that will comply with federal, state and local laws, as well as maintain a safe workplace and (2) respond to a potential increase in positive drug tests and the resultant challenges to any employer action taken in response to a positive test result (e.g., denial of employment for an applicant or termination of the employment of a current employee).

New Jersey’s former Compassionate Use of Medical Marijuana Act (CUMMA) contained language stating:

[N]othing in [CUMMA] shall be construed to require… an employer to accommodate the medical use of marijuana in any workplace. N.J.S.A. 24:6I-14.

On July 2, 2019, Governor Murphy signed into law the Jake Honig Compassionate Use Medical Cannabis Act, N.J.S.A. 24:6I-2, et seq. (Honig Act), which replaced CUMMA. The revised employment law provisions of the Honig Act create job protections. The above-cited language from CUMMA changed, and the Honig Act provides as follows:

It shall be unlawful to take any adverse employment action against an employee who is a registered qualifying patient based solely on the employee’s status as a registrant with the commission [i.e., the Cannabis Regulatory Commission established pursuant to the law].

The Honig Act defines “adverse employment action” as “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.” N.J.S.A. 24:6I-3. State regulations were adopted to support CUMMA (N.J.A.C. 8:64-1 et seq.) but no new regulations were promulgated in furtherance of the Honig Act.

The patient/employee-friendly provision moves New Jersey into the group of states with medical marijuana laws that expressly provide employment law protections for medical marijuana users (e.g., Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Minnesota, New York, Nevada, Oklahoma, Pennsylvania, Rhode Island and West Virginia).

The Honig Act establishes a procedure employers must follow when an employee tests positive for marijuana. If an employee (or prospective employee) tests positive for cannabis, the employer is required to (1) provide written notice of the right to provide a valid medical explanation for the test result and (2) offer an opportunity to present a valid medical explanation for the result. N.J.S.A. 14-6I-9.

The employee or applicant has three (3) working days after receipt of the employer’s written notice to explain the result or request a retest of the original sample (at the employee’s expense). The Act does not define “working days.” A valid explanation for the positive test result may include an authorization for medical cannabis issued by a health care practitioner or proof of registration with the medical marijuana commission.

If an employee demonstrates she is a valid medical marijuana user, employers will not be permitted to use that alone as a basis to take adverse employment action, unless the employer can demonstrate that one of the federal exemptions applies.

The Honig Act permits employers to take adverse action if an employee possesses or uses an intoxicating substance during work hours, or if such use would require an employer to commit any act that would cause the employer to be in violation of federal law.

“Cannabis” has the meaning given to “marijuana” in section 2 of the New Jersey Controlled Dangerous Substances Act, N.J.S.A. 24:21-2. The NJ Controlled Dangerous Substance Act includes cannabis as a Schedule I(e) hallucinogenic that has a high potential for abuse, has no accepted medical use in treatment in the United States, or lacks accepted safety for use in treatment under medical supervision. Accordingly, we assume “intoxicating substances” includes medical marijuana as it’s used in the Honig Act.

Nothing in the Honig Act requires an employer to commit any act that would cause the employer to be in violation of federal law, lose a licensing-related benefit pursuant to federal law, or lose a federal contract or federal funding. For example, most federal contractors are required to comply with the federal Drug-Free Workplace Act (DFWA), which precludes the possession or use of controlled substances at work sites. 41 U.S.C. §8101(a)(5)(B).

Future lawsuits surrounding marijuana use are likely to be focused on the types of reasonable accommodations employers should make and what jobs are too safety-sensitive to permit an accommodation for medical marijuana use. Due to the Honig Act’s infancy, it is not clear if New Jersey courts will follow precedent from other states imposing a burden on the employer to engage in an interactive process with the employee to determine if there are medical alternatives that are equally effective, and the use of which would not violate company policy.

In some other states, when there are no equally effective alternatives, the employer bears the burden of proving that the use of a medication would cause an undue hardship to the employer’s business to justify the employer’s refusal to make an exception to an anti-drug policy. In addition, the use of medical marijuana may be for an underlying condition meeting the definition of a disability, a condition that affords job protections, including the need to engage in the interactive process seeking to reach a reasonable accommodation.

For example, in Massachusetts, an employer may be able to show an undue hardship exists where accommodating the medical marijuana use would impair the employee’s performance of her work; pose an unacceptably significant safety risk to the public, the employee or fellow employees; or violate an employer’s contractual or statutory obligation and thereby jeopardize its ability to perform its business. We do not yet know how New Jersey will interpret what constitutes an undue hardship in accommodating an employee’s medical marijuana use.

On March 27, 2019, New Jersey’s Appellate Division, the second-highest court, issued an unpublished opinion in Wild v. Carriage Funeral Holdings, Inc. et al., A-3072-17T3 (March 27, 2019). Mr. Wild appealed dismissal of his lawsuit against his former employer alleging various Law Against Discrimination (LAD) violations and common-law defamation. His lawsuit claimed his employer discriminated against him for his use of medical marijuana, which he used as part of his cancer treatment. Both parties pointed the Appellate Division to the fact that “nothing” in CUMMA requires an employer to accommodate a medical marijuana user. Based on that the defendants argued, the plaintiff’s claims under the LAD could not go forward.

The Wild court analyzed whether the plaintiff pleaded a case under the LAD; it did not weigh and analyze proofs. The court concluded the plaintiff set forth allegations necessary to his cause of action and the matter was reversed and remanded for further proceedings. The Appellate Division held CUMMA’s declaration should not be construed to “require” an accommodation, but does not mean such a requirement might not be imposed by other legislation. N.J.S.A. 24:6I-14. Further, the court concluded that CUMMA’s refusal to require an employment accommodation for a user does not mean CUMMA immunizes employers from obligations already imposed elsewhere. Essentially, CUMMA does not limit the LAD by permitting an employer’s termination of a cancer patient’s employment by discrimination without compassion.

The Appellate Division rejected the argument CUMMA and the LAD are in conflict because CUMMA states that “nothing in this act shall be construed to require … an employer to accommodate the medical use of marijuana in any workplace.” N.J.S.A. 24:6I-14. CUMMA intended to cause no impact on existing employment rights; CUMMA neither created new employment rights nor destroyed existing employment rights. CUMMA imposes no burden on defendants, and negates no rights or claims available to a plaintiff under the LAD.

The New Jersey Supreme Court agreed to review the case and heard oral argument on February 4, 2020. The State Supreme Court is considering the impact of the Honig Act’s amendments providing employment protections to medical marijuana users. Because the Honig Act was passed after the events leading to Wild’s termination, it is unclear how it will affect his case on appeal. The Court may address whether the Honig Act, as amended, grants employees a private right of action, and, if so, whether the amendments are retroactive. We anticipate the Supreme Court’s decision within the next three to six months.

While the Honig Act grants employee protections, it is likely that employees still will seek to bring suits under the LAD as a continued source of protection because, unlike the Honig Act, the LAD allows the possibility for punitive damages and contains a fee-shifting provision.

For now, employers should, at a minimum, make sure they comply with the notice and communication provisions in the Honig Act when an employee/applicant tests positive.

© 2020 Wilson Elser

For more on marijuana and employment see the National Law Review Labor & Employment section.