Affordable Care Act Proposed Rule Would Broaden Access to Over-the-Counter Contraception Without Cost Sharing

Employer-sponsored health plans would be required to cover over-the-counter contraception, including condoms and emergency contraception, without a prescription and without cost sharing under newly proposed Affordable Care Act (ACA) regulations

Quick Hits

  • Proposed rules issued by the DOL, HHS, and Treasury are designed to increase coverage for over-the-counter contraceptives, such as condoms, spermicides, and emergency contraception, without a prescription.
  • If finalized, the proposed rules would be the first time that male contraceptives will be covered under the ACA preventive care requirements.
  • The public has until December 27, 2024, to submit comments on the proposed rules.

Fully insured and self-insured health plans would have to cover every Food and Drug Administration (FDA)-approved contraceptive drug or drug-led combination product without cost sharing, unless the plan or insurer covers a therapeutic equivalent without cost sharing, under rules proposed by the U.S. Departments of Health and Human Services, Labor, and Treasury.

Employer-sponsored health plans and insurers also would have to tell participants that over-the-counter contraception without a prescription is covered at no cost, under the proposed rules published October 28, 2024, in the Federal Register.

The ACA requires most group health plans to cover preventive care at no cost to patients. Preventive care under the ACA includes FDA-approved contraceptives for women, such as birth control pills, injectable contraceptives, contraceptive patches, implantable rods, intrauterine devices, diaphragms, sponges, vaginal rings, emergency contraception medication, and sterilization procedures for women. In 2022, the Health Resources and Services Administration (HRSA) issued updated guidelines that define which healthcare services are considered preventive for women.

Without a prescription, over-the-counter products were not included in the ACA’s coverage requirement. The proposed rule would change that.

In guidance issued earlier this year, the departments noted that they are still identifying plans that are out of compliance with the contraceptive care requirements. Employers that violate the ACA mandate can be fined $100 for each day in the noncompliance period for each affected employee. At first, the ACA granted exemptions to churches and other religious organizations that hold instilling religious values as their purpose and primarily employ people who share their religious beliefs. The criteria to qualify for an exemption were broadened later. Without an exemption, nongovernmental employers can use a self-certification form to instruct their health insurer to exclude contraceptive coverage from the group health plan and provide payments to patients for contraceptive services separate from the health plan.

In July 2020, the Supreme Court of the United States ruled that private employers with religious or moral objections can be exempt from the contraceptive mandate.

Seven states—California, Colorado, Maryland, New Jersey, New Mexico, New York, and Washington—already have laws requiring state-regulated health insurance policies to cover certain over-the-counter contraceptives without a prescription and without cost sharing.

Next Steps

Employers may want to review the coverage of contraceptives under their medical plans both to ensure that no improper restrictions are put on them currently and also to clarify how their coverage would need to expand if these proposed rules became final in a substantially similar form.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

© 2024, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more news on ACA OTC Contraception Regulations, visit the NLR Health Law & Managed Care section.

Federal Contractors Beware – More Data Disclosures Coming!

On October 29, 2024, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a Freedom of Information Act (FOIA) notice, inviting federal contractors to respond to FOIA requests that the OFCCP received related to federal contractors’ 2021 Type 2 EEO-1 Consolidated Reports. These reports, required of federal contractors and subcontractors with at least 50 employees, contain data critical to the government’s diversity efforts consistent with anti-discrimination mandates under Title VII and Executive Order 11246. Contractors have previously relied on FOIA Exemption 4 to protect against disclosing sensitive commercial information that could impact competitive positioning, but in late December 2023 as previously reported here, a federal court ruling concluded that certain demographic data did not qualify as confidential under FOIA Exemption 4. That court decision may spur an increase in FOIA requests for EEO-1 reporting information.

Contractors who wish to object to the disclosure of their EEO-1 reporting information must do so via OFCCP’s online portal, email, or mail on or before December 9, 2024. Per the OFCCP’s notice, contractors can object to releasing their 2021 EEO-1 Type 2 data by providing evidence showing the data satisfies FOIA Exemption 4. To do this, contractors should:

  • Specifically identify the objectionable data;
  • Explain why this data is commercial or competitive to render it confidential;
  • Outline the processes the contractor has in place to safeguard the data;
  • Identify any prior assurances or expectations that the data would remain confidential; and
  • Detail the damage that would occur if the data were disclosed by conducting assessments to see how disclosure would impact business operations.

In addition to raising timely objections to disclosure of data, contractors should also implement clear policies to maintain a consistent approach to data confidentiality. Specifically, contractors should be thoughtful and consistent as to how they define confidential information and the protection measures they take related to such information.

FOIA requests and court decisions in this space will likely continue to make striking a balance between government transparency and protecting contractors’ confidential business information more difficult. To navigate these changes, federal contractors should remain vigilant by staying informed, preparing objections to FOIA requests, and consulting with legal counsel to ensure compliance with this evolving area of law.

Copyright © 2024, Hunton Andrews Kurth LLP. All Rights Reserved.
For more on Federal Contractors, visit the NLR Government Contracts Maritime Military section.

Social Media’s Legal Dilemma: Curated Harmful Content

Walking the Line Between Immunity and Liability: How Social Media Platforms May Be Liable for Harmful Content Specifically Curated for Users

As proliferation of harmful content online has increasingly become easier and more accessible through social media, review websites and other online public forums, businesses and politicians have pushed to reform and limit the sweeping protections afforded by Section 230 of the Communications Decency Act, which is said to have created the Internet. Congress enacted Section 230 of the Communications Decency Act of 1996 “for two basic policy reasons: to promote the free exchange of information and ideas over the Internet and to encourage voluntary monitoring for offensive or obscene material.” Congress intended for internet to flourish and the goal of Section 230 was to promote the unhindered development of internet businesses, services, and platforms.

To that end Section 230 immunizes online services providers and interactive computer services from liability for posting, re-publishing, or allowing public access to offensive, damaging, or defamatory information or statements created by a third party. Specifically, Section 230(c)(1) provides,

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

[47 U.S.C. § 230(c)(1)]

Section 230 has been widely interpreted to protect online platforms from being held liable for user-generated content, thereby promoting the free exchange of information and ideas over the Internet. See, e.g., Hassell v. Bird, 5 Cal. 5th 522 (2018) (Yelp not liable for defamatory reviews posted on its platform and cannot be forced to remove them); Doe II v. MySpace Inc., 175 Cal. App.4th 561, 567–575 (2009) (§ 230 immunity applies to tort claims against a social networking website, brought by minors who claimed that they had been assaulted by adults they met on that website]; Delfino v. Agilent Technologies, Inc., 145 Cal. App.4th 790, 804–808 (2006) (§ 230 immunity applies to tort claims against an employer that operated an internal computer network used by an employee to allegedly communicate threats against the plaintiff]; Gentry v. eBay, Inc., 99 Cal. App. 4th 816, 826-36 (Cal. Ct. App. 2002) (§ 230 immunity applies to tort and statutory claims against an auction website, brought by plaintiffs who allegedly purchased forgeries from third party sellers on the website).

Thus, under § 230, lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone or alter content—are barred. Under the statutory scheme, an “interactive computer service” qualifies for immunity so long as it does not also function as an “information content provider” for the portion of the statement or publication at issue. Even users or platforms that “re-post” or “publish” allegedly defamatory or damaging content created by a third-party are exempted from liability. See Barrett v. Rosenthal, 40 Cal. 4th 33, 62 (2006). Additionally, merely compiling false and/or misleading content created by others or otherwise providing a structured forum for dissemination and use of that information is not enough to confer liability. See, e.g. eBay, Inc. 99 Cal. App. 4th 816 (the critical issue is whether eBay acted as an information content provider with respect to the information claimed to be false or misleading); Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1122-1124 (9th Cir. 2003) (Matchmaker.com not liable for fake dating profile of celebrity who started receiving sexual and threatening emails and voicemails).

Recently, however, the Third Circuit appellate court found that Section 230 did not immunize and protect popular social media platform TikTok from suit arising from a ten-year old’s death following her attempting a “Blackout Challenge” based on videos she watched on her TikTok “For You Page.” See Anderson v. TikTok, Inc., 116 F.4th 180 (3rd Cir. 2024). TikTok is a social media platform where users can create, post, and view videos. Users can search for specific content or watch videos recommended by TikTok’s algorithm on their “For You Page” (FYP). This algorithm customizes video suggestions based on a range of factors, including a user’s age, demographics, interactions, and other metadata—not solely on direct user inputs. Some videos on TikTok’s FYP are “challenges” that encourage users to replicate the actions shown. One such video, the “Blackout Challenge,” urged users to choke themselves until passing out. TikTok’s algorithm recommended this video to a ten-year old girl who attempted it and tragically died from asphyxiation.

The deciding question was whether TikTok’s algorithm, and the inclusion of the “Blackout Challenge” video on a user’s FYP, crosses the threshold between an immune publisher and a liable creator. Plaintiff argued that TikTok’s algorithm “amalgamat[es] [] third-party videos,” which results in “an expressive product” that “communicates to users . . . that the curated stream of videos will be interesting to them.” The Third Circuit agreed finding that a platform’s algorithm reflecting “editorial judgments” about “compiling the third-party speech it wants in the way it wants” is the platform’s own “expressive product,” and therefore, TikTok’s algorithm, which recommended the Blackout Challenge on decedent’s FYP, was TikTok’s own “expressive activity.” As such, Section 230 did not bar claims against TikTok arising from TikTok’s recommendations via its FYP algorithm because Section 230 immunizes only information “provided by another,” and here, the claims concerned TikTok’s own expressive activity.

The Court was careful to note its conclusion was reached specifically due to TikTok’s promotion of the Blackout Challenge video on decedent’s FYP was not contingent on any specific user input, i.e. decedent did not search for and view the Blackout Video through TikTok’s search function. TikTok has certainly taken issue with the Court’s ruling contending that if websites lose § 230 protection whenever they exercise “editorial judgment” over the third-party content on their services, then the exception would swallow the rule. Perhaps websites seeking to avoid liability will refuse to sort, filter, categorize, curate, or take down any content, which may result in unfiltered and randomly placed objectionable material on the Internet. On the other hand, some websites may err on the side of removing any potentially harmful third-party speech, which would chill the proliferation of free expression on the web.

The aftermath of the ruling remains to be seen but for now social media platforms and interactive websites should take note and re-evaluate the purpose, scope, and mechanics of their user-engagement algorithms.

COPYRIGHT © 2024, STARK & STARK
For more on Social Media, visit the NLR Communications Media Internet section.

What U.S. Travelers to UK Need to Know About UK’s Electronic Travel Authorisation (ETA)

Americans traveling to the UK as tourists or business visitors are generally visa-exempt. Starting on Jan. 8, 2025, visa-exempt Americans traveling to the UK will need to use the new Electronic Travel Authorisation (ETA) scheme prior to travel. Americans will be able to apply for ETA starting on Nov. 27, 2024.

Like the U.S. ESTA (Electronic System for Travel Authorization), ETAs are digitally linked to the traveler’s passport, allowing smoother and more secure immigration processing.

Applying for an ETA costs ten pounds. The ETA expires either two years after issuance or when the individual’s passport expires – whichever is earlier. If an individual obtains a new passport, they must apply for new ETA.

The ETA allows:

  • Multiple entries
  • Stays for no longer than six months

The ETA is being rolled out in phases. It is already in effect for nationals from the Gulf States. On Jan. 8, 2025, approximately 50 other countries, including the United States, will be added to the list. ETA will be rolled out for European countries on April 2, 2025.

The application is online and through the UK ETA app. Every individual who is traveling will need a separate ETA application. It is best to apply early, although applications are usually processed within three working days.

The similar ETIAS program for travel to the European Union has been delayed, but it is expected to go into effect sometime in 2025.

Jackson Lewis P.C. © 2024
For more news on U.K. Electronic Travel Authorisation, visit the NLR Immigration section.

FDA Partners With Purdue University to Study Salmonella Risks

  • FDA has partnered with Purdue University and Indiana produce industry stakeholders to launch an environmental microbiology study to better understand the ecology of human pathogens, focusing on assessing risks related to Salmonella in the environment. The study is intended to develop a better understanding of the source of pathogens, their persistence, and how they transfer through the growing environment to ultimately help inform food safety practices.
  • The study is in response to outbreaks of Salmonella linked to cantaloupe grown in the Southwest Indiana agricultural region where a specific source or route of contamination was not found. The identification of other Salmonella varieties that were genetically similar to other isolates collected in the region over the last decade suggests that Salmonella is a reoccurring issue and that multiple reservoirs for Salmonella spp. may exist. According to FDA, “[t]he outbreak investigations have shown that there are complex environmental survival, proliferation, and dispersal mechanisms of pathogens in this region that need to be better understood.”
  • Researchers will sample air, soil, water, and animal scat, as well as collect weather data, to better understand what environmental conditions may encourage the survival, growth, and spread of pathogens. The study will occur at a farm in central Indiana, four Purdue-operated farms in northwest Indiana, and the Southwest Purdue Ag Center.
  • Indiana ranks sixth in U.S. cantaloupe production, according to USDA data from 2018 when Indiana growers planted 1,800 acres of cantaloupe worth $8.6 million. Growers “want to participate in this study because of their commitment to do everything they can to keep their produce as safe as possible.”
© 2024 Keller and Heckman LLP
For more on the FDA, visit the NLR Biotech Food Drug section.

Strategic Use of Arbitration Provisions in Nonprofits’ Contracts

In the nonprofit sector, organizations often face unique legal challenges that require efficient and cost-effective dispute resolution mechanisms. Arbitration provisions in contracts can offer nonprofits a strategic advantage by providing a streamlined process for resolving disputes. Below, we explore the benefits and strategic considerations for incorporating arbitration clauses in contracts, drawing on recent developments and case law.

Background and Legal Basis

Arbitration is increasingly favored in the business context for its efficiency, cost-effectiveness, and confidentiality. Unlike traditional litigation, arbitration generally allows parties to resolve disputes more quickly and with less expense, which is particularly beneficial for nonprofits operating on limited budgets. The process is also private, protecting sensitive information related to donors and beneficiaries, avoiding potential adverse publicity and reputational harm, and has less risk of unpredictability like a “run-away” jury verdict.

The Federal Arbitration Act (FAA), enacted in 1925, provides the foundational legal framework for arbitration in the United States. As a result, arbitration agreements involving interstate or foreign commerce are enforceable and binding. The FAA’s core principle is to support a national policy favoring arbitration, overcoming historical resistance in some areas.

The Uniform Arbitration Act and its revised version offer a model statute adopted by most states to ensure the enforceability of arbitration agreements, even in the face of state laws that may be hostile to arbitration.

Under these arbitration statutes, federal or state courts may be involved both before or after arbitration. First, the courts are empowered to order parties to arbitrate where an enforceable arbitration agreement exists. Second, the courts may conduct a substantially limited review of an arbitration award and may enter judgment on the award or, in some cases, vacate the award or order further arbitration proceedings.

Federal Court Jurisdiction

Most trial lawyers prefer federal courts. However, the FAA does not automatically confer federal court jurisdiction over arbitration matters. Federal court jurisdiction requires a federal question or diversity of citizenship between the parties. When one of the arbitrating parties is structured as an LLC or non-corporate entity, determining diversity can be complex because it is based on the citizenship of the individuals or corporations that ultimately own the entity, regardless of how many layers are in the ownership structure. Thus, as a practical matter, many arbitration matters are decided within state courts.

Arbitration Rules

There is no requirement that an arbitration agreement select an arbitration organization to administer the arbitration. Private arbitration, where the parties self-administer the matter, is possible but increasingly rare. Instead, there are two major arbitration organizations in the United States and many smaller ones. The two major organizations are the American Arbitration Association (AAA) and the Judicial Arbitration and Mediation Services (JAMS). Each organization has several sets of arbitration rules focused on the nature of the dispute. For example, there are rules for general commercial disputes, expedited cases, and larger, more complex matters. Selecting the applicable rules is an important consideration when drafting an arbitration provision.

Drafting Arbitration Clauses

When drafting arbitration clauses, clarity and precision are paramount; otherwise, you risk entering into litigation to interpret the clause. At the very least, the arbitration clause should cover the when, where, which, and how details of the arbitration process. Nonprofits should consider whether to use broad or narrow clauses. Broad clauses cover all disputes arising from or relating to the contract, while narrow clauses limit arbitration to specific issues. Sample clauses are available from the AAA and JAMS that provide templates for structuring effective arbitration agreements. These clauses should specify the rules governing arbitration, the number of arbitrators, and the location of proceedings, among other issues.

Deemed Arbitration Clauses

Courts have found other contractual clauses to be arbitration clauses and subjected them to the requirements for arbitration. For example, a real estate contract that included a procedure involving three experts to determine the actual square footage development potential of a property to be sold was deemed an arbitration clause. Thus, when the parties disagreed as to the determination by the experts, the court performed only the substantially limited review used to review arbitration awards, not a broader review that would allow reversal for mistakes or law or fact.

Conclusion

For nonprofits, arbitration provisions offer a strategic tool for managing disputes efficiently and confidentially. However, nonprofits should carefully draft effective arbitration clauses that align with their operational needs and legal obligations. Thoughtful consideration of the scope, rules, and procedural requirements will ensure that arbitration serves as a valuable mechanism for dispute resolution.

© 2024 ArentFox Schiff LLP
For more news on Arbitration Provisions, visit the NLR ADR, Arbitration, & Mediation section.

It’s Election Time: Time Off to Vote, Political Activities, and Political Speech in the Workplace

With Election Day quickly approaching, it is the right time for employers to refresh themselves on the various protections that may exist for their employees when it comes to voting and other political activities. Below is an overview of employees’ rights related to voting and other political activities leave, as well as protections for political speech and activity both in and outside the workplace.

Voting Leave Laws

Approximately thirty states require that employers provide their employees with some form of time off to vote. Twenty-one of these states require that the leave be paid. The exact contours of these laws – such as the amount of leave, notice requirements, and whether there is an exception when the employee has sufficient time outside of working hours to vote – vary by state. For example:

  • In New York, employers must provide leave to employees who do not have sufficient time outside of working hours to vote. An employee is deemed to have sufficient time to vote if the polls are open for four consecutive hours before or after the employee’s shift. Employees who do not have such a four-hour window are eligible to take the amount of leave that will – when added to their voting time outside working hours – enable them to vote, up to two hours of which must be without loss of pay. Employees may take time off for voting only at the beginning or end of their shift, as designated by the employer, unless otherwise mutually agreed to between the employee and employer. Employees are required to notify their employer that working time off to vote is needed between two and ten working days before the election.
  • Similarly, in California, employees are entitled to sufficient time off to vote, up to two hours of which must be paid. Unless the employer and employee agree otherwise, the employee must take the leave at the beginning or end of the employee’s shift, whichever allows the most time to vote and the least time off from work. Employees are required to provide notice that time off to vote is needed at least two working days before the election.
  • In the Washington, D.C., employees are entitled to up to two hours of paid leave to vote in either an election held in D.C. if the employee is eligible to vote in D.C., or in an election held in the jurisdiction in which the employee is eligible to vote. Employees must submit requests for leave a reasonable time in advance of the election date. Employers may specify the hours during which employees may take leave to vote, including requiring employees to vote during the early voting period or vote at the beginning or end of their shift during early voting or election day.
  • In Illinois, employers must provide two hours of paid voting leave to employees whose shifts begin less than two hours after the opening of the polls and end less than two hours before the closing of the polls. Employees must provide notice of the need for leave before the day of the election.
  • In Maryland, employees are entitled to up to two hours of paid voting leave, unless the employee has at least two non-working hours to vote while the polls are open. Employees must furnish proof to their employers that they either voted or attempted to vote, which can be in the form of a receipt issued by the State Board of Elections.

Certain states, includingNew York, California, and Washington, D.C., require that employers post a notice of an employee’s right to take leave in a conspicuous location before the election. Sample notices have been published by the New York State Board of Elections, the California Secretary of State, and D.C. Board of Elections.

Other Political Leave Laws

Some states require that employers provide leave for political-related reasons beyond just voting. For example:

  • Alabama, Delaware, Illinois, Kentucky, Nebraska, Ohio, Virginia, and Wisconsin require that certain employers provide unpaid leave for employees to serve as election judges or officials on Election Day. In Minnesota, employees are entitled to paid leave for this reason; however, employers may reduce an employee’s salary or wages by the amount the employee receives as compensation for their service as an election judge.
  • Minnesota and Texas require that certain employers provide employees with unpaid leave to attend party conventions and/or party committee meetings.
  • Connecticut, Iowa, Maine, Nevada, Oregon, South Dakota, and Vermont require that certain employers provide employees with an unpaid leave of absence to serve as elected members of state government. In Iowa, employees are also entitled to leave to serve in a municipal, county, or federal office.
  • In Vermont, employees may take unpaid leave to vote in annual town hall meetings.

Some of these laws only apply to larger employers. For example, in Nevada, employers with at least fifty employees are required to provide leave for employees to serve as members of the state legislature. State laws also vary with respect to the amount of notice that employees must provide to their employers in order to be eligible for leave.

Political Speech in the Workplace

In our current political climate, many employers are concerned with what steps they can take regarding political speech and activity in the workplace. When these discussions or activities occur during working hours, they have the potential to negatively impact performance, productivity, or even possibly cross the line into bullying or unlawful harassment.

When employees publicly attend political rallies or support causes on social media, they may also (intentionally or not) create an actual, or perceived, conflict of interest with their employer. The complicated question of what exactly employers can do around employee political speech and activity is governed by various sources of law, some of which is discussed below.

Additionally, for employers with designated tax statuses, certain political speech can give pose risk to an organization’s tax-exempt status. Many tax exempt-organizations are subject to significant restrictions on lobbying and political activities. For example, 501I(3) organizations risk losing their tax-exempt status if they engage in political campaign activities or if a substantial part of its activities involves lobbying. Speech by an employee that constitutes political campaign or lobbying activity risks being attributed to an organization if an employee’s speech is seen as representative of the organization and being ratified by the organization. For example, if an employee urges their social media followers to contact their state representative about proposed legislation, this risks carrying the inference that the employee was speaking on behalf of the organization.

Employee “Free Speech”

There is no general right to “free speech” in a private sector workplace. Because the U.S. Constitution is primarily concerned with state actors, the First Amendment does not prevent private employers from prohibiting or restricting political speech in the workplace. Therefore, subject to certain exceptions discussed below, private sector employers are generally able to enact prohibitions around discussing politics at work and discipline employees for violating such policies.

However, as noted, an employer’s ability to restrain political speech in the workplace comes with some restrictions. At the federal level, Section 7 of the National Labor Relations Act (“NLRA”), which applies to both unionized and non-union employees, protects certain “concerted activities” of employees for the purposes of “mutual aid or protection.” Political speech or activity that is unrelated to employment, such as an employee distributing pamphlets generally encouraging co-workers to vote for a candidate or support a political party, would not likely be covered or protected by the NLRA. The NLRA therefore does not universally prevent employers from prohibiting political discussions or activities in the workplace.

However, political speech may be protected by the NLRA when it relates to the terms or conditions of employment, such as communicating about wages, hours, workplace safety, company culture, leaves, and working conditions. Therefore, an employee encouraging co-workers to vote for a candidate because the candidate supports an increase in the minimum wage might claim to come under the protection of the NLRA.

State laws may also place certain limitations on employer attempts to restrict employee political speech. For example, Connecticut law prohibits employers from taking adverse action against employees for exercising their First Amendment rights, provided that such activity does not interfere with the employee’s job performance or the employment relationship.

Lawful Outside Activity/Off-Duty Conduct

Many states have laws that prohibit adverse action against employees based on lawful activities outside the workplace, which may include political activities. For example:

  • In approximately a dozen states, employers are prohibited from preventing employees from participating in politics or becoming candidates for public office. New York Labor Law § 201-d prohibits employers from discharging or otherwise discriminating against employees because of their “political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property, if such activities are legal.” Political activities include (1) running for public office, (2) campaigning for a candidate for public office, or (3) participating in fund-raising activities for the benefit of a candidate, political party, or political advocacy group. Similar laws exist in California, Louisiana, and Minnesota, among other states.
  • Other states – including Delaware, Florida, Massachusetts, and New Jersey– prohibit employers from attempting to influence an employee’s vote in an election. In Florida, “[i]t is unlawful for any person … to discharge or threaten to discharge any employee … for voting or not voting in any election, state, county, or municipal, for any candidate or measure submitted to a vote of the people.” A dozen or so states approach this issue in a more limited fashion by prohibiting employers from attaching political messages to pay envelopes.
  • At least two states, Illinois and Michigan, prohibit employers from keeping a record of employee’s associations, political activities, publications, or communications without written consent.
  • Washington, D.C. prohibits discrimination in employment on the basis of political affiliation. Despite its seemingly broad scope, this statute has been interpreted to only protect political party membership and not (1) membership in a political group, or (2) other political activities, such as signing a petition.

These laws vary considerably from state to state, so it is important for employers to consult the laws when considering policies or rules around employee political activity.

* * *

As the election approaches and early voting takes place, employers should review the applicable laws for each jurisdiction in which they operate and ensure that their policies and practices are compliant. Employers should also ensure that managers are well versed in the employer’s policies around voting and political speech and activities so that they can properly respond as situations arise.

© 2024 Proskauer Rose LLP.
For more on Workplace Speech, visit the NLR Labor Employment section.

The Spooky Consequences of Halloween Celebrations in the Workplace

There is no greater Halloween horror for employers than a workplace celebration that creates legal risks such as inappropriate costumes or safety hazards, among other issues. Thus, there are many considerations when planning an office celebration for this spooky holiday. If you are a manufacturer hosting an office Halloween party, consider following these three tricks to make the best out of your workplace treat.

1. Provide Guidance on Expectations

First and foremost, manufacturers should be transparent about expectations surrounding employee participation including costumes. With regard to costumes, when crafting guidance, manufacturers should consider both civility as well as safety, especially if the employees will be permitted to wear their costumes during the workday. For example, employees should understand what costumes or outfits do and do not meet manufacturing floor safety guidelines. Employees should also be expressly reminded that costumes must conform to all employer policies including anti-harassment, discrimination and respect policies and that costumes, outfits or accessories that violate such policies will not be tolerated.

This election year in particular, some employees may don political costumes. The free speech rights under the First Amendment of the U.S. Constitution do not apply to employees working for private manufacturers. Thus, private manufacturers can generally establish rules that, for example, prohibit costumes that support (or criticize) a political candidate or party. That said, manufacturers should be aware that several states have laws regulating when employers can lawfully discipline employees for political activity; further, there are state and federal laws that may be implicated with regard to employees expressing political views. If manufacturers are considering disciplining an employee for a political costume, they should first consult with legal counsel.

2. Prioritize Safety

There are more safety hazards at workplace Halloween parties than the cavity causing candy. This is especially true if the celebration is being held on the manufacturer’s shop floor. Manufacturers should ensure that all of the decorations in the workplace comply with the fire and safety codes set forth by local governments and by OSHA. Manufacturers should also avoid activities that inherently involve risks and could result in workplace injuries, such as pumpkin carving contests.

Lastly, manufacturers should carefully consider whether to serve alcohol. If the celebration is being held on the shop floor, it is highly recommended that alcohol is not served, especially if heavy machinery is accessible. For celebrations held elsewhere, manufactures should consider taking steps to ensure alcohol is consumed in moderation and is not central to the party, and follow best practices for serving alcohol; when considering tips for limiting alcohol consumption or its impact on employees, employers should consider only serving beer and wine, serving a meal (as compared to light appetizers), limiting the amount of alcohol served by, for example, using a drink ticket system, using bartenders to serve alcohol, serving non-alcoholic options; among other practices. In some circumstances, manufacturers may be legally responsible for the conduct of their intoxicated employees.

3. Make it Optional

Workplace celebrations are a great way to boost employee morale and help foster employee relationships. That said, these celebrations should generally be optional. Manufacturers should keep in mind that employees may not want to attend a Halloween party for various reasons, including, for example, their religious practices and beliefs; therefore, ensuring that the party is optional may support all employees including those that do and do not celebrate Halloween.

If attendance is mandatory, there may be implications from a workers’ compensation perspective if there are any injuries or illnesses. Further, manufacturers should pay the employees for their time pursuant to the Fair Labor Standards Act (FLSA) and applicable state laws regardless of whether the celebration was held outside of normal working-hours. Requiring non-exempt employees to attend unpaid celebrations can expose the manufacturer to wage and hour claims in the future.

Copyright © 2024 Robinson & Cole LLP. All rights reserved.

by: Abby M. Warren, Madison C. Picard of Robinson & Cole LLP

For more news on Workplace Halloween Party Considerations, visit the NLR Labor & Employment section.

Revisions to HSR Form Released

On October 7, 2024, the Federal Trade Commission (FTC), with the concurrence of the U.S. Department of Justice (DOJ), released its long-awaited final rule related to the revision of the Hart-Scott-Rodino (HSR) premerger notification form (the “Final Rule”).

The Final Rule will be effective 90 days after its publication in the Federal Register. The FTC and DOJ state that the revisions are intended to close the perceived gaps in current information provided in the HSR process, such as the disclosure of entities and individuals within the acquiring person; identification of potential labor market effects; identification of acquisitions that create a risk of foreclosure; identification of actions that may involve innovation effects, future market entry, or nascent competitive threats; and disclosure of roll-up or serial acquisition strategies.

The Final Rule dictates the use of two separate forms: one for the acquiring entity and one for the entity to be acquired. Each party will have to designate a “deal team lead” whose files must be searched for 4(c) and 4(d) documents, even if the deal team lead is not an officer or director. In addition, the acquiring entity must provide details not previously requested, including an organization chart, a list of officers and directors, a description of the ownership structure of the entity, and information on the transaction rationale.

While the information requested in the Final Rule is more limited than what was included in the original proposed rule, there are substantial changes that parties should expect to add significant time and cost to the filing process.

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For more on Hart-Scott-Rodino, visit the NLR Antitrust Trade Regulation section.

Unitary Executive Theory Surfaces in Court: District Court Rules Qui Tam Provisions of the False Claims Act Unconstitutional

On September 30, 2024, the United States District Court for the Middle District of Florida ruled that filing claims on behalf of the government under qui tam provisions of the False Claims Act (FCA) is unconstitutional in United States of America ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, et al. The ruling, made by Judge Kathryn Mizelle, a 33-year-old Trump-appointee, declares that False Claims Act whistleblowers undermine executive power by filing qui tam lawsuits.

The Zafirov decision follows a recent dissent by Supreme Court Justice Clarence Thomas in which he questioned the constitutionality of the FCA’s qui tam provisions. It also follows a political movement pushing the Unitary Executive Theory in the United States judicial courts.

This controversial decision mischaracterizes the qui tam provisions of the FCA and will likely be appealed to the Eleventh Circuit. Should the ruling stand, however, it and other similar challenges to the constitutionality of the FCA’s qui tam provisions will cripple what has been America’s number 1 anti-fraud law. Since the False Claims Act was modernized in 1986, qui tam whistleblower cases have allowed the government to recover more than $52 billion from fraudsters, over $5 billion of which came in cases where the government chose not to intervene.

Applying the ‘Unitary Executive’ Theory to Paint Whistleblowers as ‘Self-Selected Private Bounty Hunters’

Originally passed during the Civil War, the False Claims Act contains qui tam provisions enabling whistleblowers, also known as ‘relators’, to report government contracting fraud and work directly with government investigators. Once the whistleblower brings forward the suit, the government may intervene and continue to prosecute the litigation as the plaintiff. However, in the interest of accountability, the qui tam provision of the FCA permits the whistleblower to pursue a case even if the United States declines prosecution. Whistleblowers who file successful qui tam lawsuits are eligible to receive up to 30% of recovered damages.

The question of the constitutionality of the False Claims Act’s qui tam provisions was notably raised in a dissent by Justice Clarence Thomas in the 2023 Supreme Court case U.S., ex rel. Polansky v. Executive Health Resources. While Polansky discussed the issue of a relator pursuing a lawsuit after the government declines to intervene, Thomas raised a separate issue of constitutionality in his dissent. He stated that “there are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.” In a one-paragraph concurrence, Justice Brett Kavanaugh, joined by Justice Amy Coney Barrett, invited challenges to the constitutionality of the FCA’s qui tam provisions, writing that “In my view, the Court should consider the competing arguments on the Article II issue in an appropriate case.”

Judge Mizelle, a former clerk of Justice Thomas, drew heavily upon Justice Thomas’ dissent in her decision. Echoing Thomas’ dissent in Polansky, JudgeMizelle concluded that the qui tam provision “directly defies the Appointments Clause by permitting unaccountable, unsworn, private actors to exercise core executive power [litigating on behalf of the government] with substantial consequences to members of the public.” The District Court thus agreed with the defendants that the FCA’s qui tam provisions indeed violates the Appointments Clause of Article II of the Constitution.

The Zafirov ruling relies upon the ‘unitary executive theory,’ a constitutional law theory that states the President of the United States has sole authority over the executive branch and that power cannot be limited by Congress.

According to then-Assistant Attorney General William Barr’s 1989 Memo Constitutionality of the Qui TamProvision of the False Claims Act, which repeatedly cited by both the judgment and the U.S. Chamber of Commerce amicus brief, the move to enable private citizens to file on behalf of the government represents a breach of the separation of powers allowing “Congress to circumvent the Executive’s check.” Barr rebrands whistleblowers as “private bounty hunters” and claims that the 1986 amendments which reincorporated the FCA’s qui tam provisions was a tactic by Congress to override presidential powers. Barr maintains that “only a unitary executive” that is, “only the President” can “take care that the laws be faithfully executed.”

In a dissent in the 1988 Supreme Court case Morrison v Olsen, Justice Antonin Scalia interpreted the ‘Unitary Executive’ to have unchecked authority to appoint and remove executive officials, claiming that the firing of an independent counsel without cause falls within the limitless power of the President over the executive.

The Middle District of Florida ruling draws on Scalia’s rationale arguing that the right to pursue a qui tam case denies the President the executive authority of appointment of the relator. Under the FCA, however, whistleblowers are granted certain rights. For example, the executive must guarantee a whistleblower the “right to continue as a party” with or without the United States intervening and wait for the relator’s approval before settling the action.

The court agrees with the defendants’ argument that the FCA therefore “den[ies] the President necessary removal authority and sufficient supervisory control over [the relator].”

The court contends that the physician-turned-whistleblower Zafirov was “an improperly appointed officer” in violation of the Appointments Clause and the Take Care and Vest Clause of the Article. According to the ruling, by filing a qui tam against Medicare fraud, Zafirov was granted “core executive power” without any “proper appointment under the Constitution.”

A Mischaracterization of Qui Tam Whistleblowing

Judge Mizelle’s decision in United States ex rel. Zafirov v. Fla. Med. Assocs. first mischaracterizes the FCA’s qui tam as a breach of presidential power instead of as a provision that strengthens checks and balances. Second, the court ignores case law outlining government prerogatives over relators such that they are not menacing to the core Executive powers.

The revived qui tam provision of 1986 was a legislative move to improve government accountability over fraud—neither expanding Congressional oversight nor the size of government—by mobilizing private citizens rather than public agents. The Florida court wrongfully elevates the status of a relator to an ‘officer’ responsible to the government. A citizen pursuing a claim on behalf of the government is not and does not pretend to be an extension of the Executive Office and, therefore not subject to administrative appointment procedure. Rather the relator is a private person, and the government is a third party to the case. The Vt. Agency of Natural Res. v. United States ex rel. Stevens majority opinion also written by Justice Scalia discussing whether relators have judicial standing under Article III, qualifies that the relator is on “partial assignment of the Government’s damages claim.” A ‘partial assignee’—to which only some rights are transferred—may “assert the injury suffered by the assignor” (the U.S.) so long as the harm done is sufficient. Scalia reiterates the ‘representational standing’ of relators and makes no remarks on its challenge to the Unitary Executive. Judge Mizelle’s reliance on Morrison v Olsen to claim that like an independent counsel, a relator should also qualify as an officer ignores the Stevens Supreme Court ruling distinguishing relators as a type of assignee.

Mizelle also raises that relators seem to enjoy unbridled authority over the Executive by initiating a qui tam suit without government intervention. While Mizelle points to 31 U.S.C. § 3730 (c) to demonstrate the unchecked power of the relator, she neglects the numerous limitations specified in § 3730 (c)(2), including the broad power of the government to dismiss the qui tam action after intervening notwithstanding any objections from the relator. She frames the government intervention as “the government’s ability to pursue a parallel action and to exert limited control [which] does not lessen a relator’s unchecked civil enforcement authority to initiate.” In truth, the statute and years of judicial history maintain the government’s absolute discretion over whether to intervene in or completely stop the case by dismissing the action.

Contrary to Judge Mizelle’s belief, relators are not free from potential government intervention even when independently pursuing the case. On the contrary, relators are not able to independently pursue any binding action on the government unimpeded by the government. While Zafirov independently pursued the claim for five years, the government could have intervened and then dismissed the claim at any time. If the government intervenes, underlined in 31 U.S.C. § 3730 (c)(2), the government is empowered to settle the action with the defendant notwithstanding any objections from the relator and to restrict their participation in the course of the litigation. The fact that the government may choose not to intervene at one point does not divest them of their ability to intervene later and exercise significant authority over the relator.

Implications: Crippling the False Claims Act

Judge Mizelle’s decision seeks to end the historic success of the qui tam provision of the FCA by declaring the government’s most effective mechanism of detecting fraud as unconstitutional. While the decision does not invalidate the FCA nationally, this case could be the first step in a series of appeals that may elevate the issue to the Supreme Court.

The government’s largest obstacle to fighting white-collar crime such as fraud is detection. The diffuse and indirect nature of fraud requires those with insider knowledge to assist the government in pursuing corruption. In terms of the effectiveness of the qui tam provision, between 1987 and 2022, the Department of Justice Civil Fraud Division recovered $22.1 billion without the help of whistleblowers versus $50.3 billion with the help of whistleblower lawsuits. Since the 1986 amendments to the FCA, whistleblowers have been the direct source of approximately 70% of civil fraud recoveries by the federal government. From the Medicare billing fraud committed in Florida Medical Associates to Russian money laundering, the United States may lose its most effective tool to fight fraud fraud if the qui tam provisions of the FCA are ruled unconstitutional.

Copyright Kohn, Kohn & Colapinto, LLP 2024. All Rights Reserved.
For more on Whistleblowers, visit the NLR Criminal Law Business Crimes section.