England’s Current COVID-19 Quarantine Travel Entry Rules

The United Kingdom is operating a traffic light system for foreign travel, and what passengers must do upon arrival in England depends on where they have been in the 10 days before they arrive.

This article focuses on the guidance for England. Separate guidance applies to Northern Ireland, Scotland, and Wales.

The quarantine rules differ depending on what list the country or territory that the passenger is travelling from is on—red, amber, or green. Note that the rules apply to vaccinated passengers as well.

Red List Countries

Only British citizens, Irish citizens, and those with UK residence rights are able to enter England if they have visited or transited through a red list country in the 10 days prior to arrival.

Passengers travelling from a red list country or territory must abide by the following requirements:

  • Passengers must take a COVID-19 test within the three days prior to departure to England and provide proof of a negative test result in order to travel. Passengers may be fined £500 if they arrive in England without proof of a negative test result.
  • Passengers must undergo 10 full days of quarantine in a government-managed hotel (arrival day in England does not count toward 10-day requirement). Before travelling to England, passengers must book and pay for a managed quarantine hotel within the 14 days prior to arrival. The booking includes passengers’ hotel stay, meals, transportation to and from the hotel, and two COVID-19 tests, which must be taken on the second and eighth days of the quarantine period. Passengers who have not booked a ‘quarantine package’ prior to arrival in England could ‘face a penalty of up to £4,000 and will still have to pay for [a] quarantine package on arrival’.
  • Passengers must arrive at an authorised airport. Currently, the only authorised airports are Heathrow Airport, Gatwick Airport, London City Airport, Birmingham Airport, Bristol Airport, Farnborough Airport, and Biggin Hill Airport, although ‘[o]ther ports of entry may be added in the future’. Passengers whose flights are due to arrive at a different airport must reschedule them to an authorised airport, or face a penalty of up to £10,000 and transportation costs to the nearest designated port of entry.
  • Passengers must submit an online ‘passenger locator form’ in the 48 hours prior to arriving in England. The form is intended to provide a passenger’s journey and contact details. Passengers will need to book and pay for a quarantine package before completing a passenger locator form, as the form requires details of where the passenger will quarantine once they arrive in England. The guidance stipulates that passengers ‘could be fined, imprisoned or both if [they] do not provide accurate details about the countries [they] have visited in the 10 days before [they] arrive in the UK’.

Amber List Countries

Before travelling to England from an amber list country or territory, passengers must:

  • take a COVID-19 test within the three days prior to departure (proof of a negative test result is required in order to be able to travel to England),
  • book and pay for two COVID-19 tests to be taken on the second and eighth days after arrival in England, and
  • complete an online passenger locator form.

Upon arrival in England, passengers must:

  • quarantine at home or in the place they are staying for 10 days;
  • take a COVID-19 test on the second and eighth days of the quarantine period, which passengers are required to schedule prior to departure as mentioned above (children aged four years old and under are not required to take these tests).

Green List Countries

Before travelling to England from a green list country or territory, passengers must:

  • take a COVID-19 test within the three days prior to departure (proof of a negative test result is required in order to be able to travel to England),
  • book and pay for a COVID-19 test to be taken on the second day after arrival in England, and
  • complete an online passenger locator form.

Passengers must take a COVID-19 test on the second day after they arrive in England, which they are required to book prior to departure as mentioned above. Passengers do not need to quarantine unless they receive a positive test result.

These lists are reviewed every three weeks and a country or territory can move between lists at short notice. Passengers may therefore want to review the guidance for updates before they travel.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles on travel restrictions the NLR Immigration section.

At a Glance: White House 100-Day Supply Chain Report

In February 2021, President Biden issued Executive Order 14017, “Executive Order on America’s Supply Chains” (discussed here), requiring (among other things) a report within 100-days requiring key government agencies to assess vulnerabilities and consider potential improvements to supply chains in four critical industries – (i) semiconductor manufacturing; (ii) high capacity batteries; (iii) rare earth elements; and (iv) pharmaceuticals.

On June 8, 2021, the White House released its 100-day Supply Chain Review Report and accompanying fact sheet. This article does not attempt to relay all of the information from the 250-page Report (the Report’s Executive Summary alone is 6 pages). Instead, we have attempted to summarize some of the Report’s most salient points and suggest how the risks, challenges, and recommendations discussed in the Report may impact companies that do business in these four critical industries.

Summary of the 100-day Supply Chain Review

As a reminder, the Executive Order asked for a quick-turn report within 100 days discussing four “critical” industries and the associated supply chain. Specific government agencies were assigned to lead the quick-turn review as follows:

Industry/Supply Chain Issues Responsible Agency
Semiconductor manufacturing Department of Commerce
High-capacity batteries (including those for electric vehicles) Department of Energy
Rare earth elements Department of Defense
Pharmaceuticals Department of Health and Human Services

Our summary, below, focuses on what we see as the key risk areas and challenges, as well as certain of the resulting recommendations identified by each reviewing agency.

I. Semiconductor Manufacturing and Advanced Packaging (Department of Commerce)

Key Risks and Challenges

  1. Fragile supply chains. Semiconductor supply chains are immense, and require vast inputs and resources to function properly. Because the industry is highly specialized and geographically concentrated (in Asia), a natural or human-made disaster has the potential to cause a massive disruption in the industry.
  2. Malicious supply chain disruptions. As microchips become more complex and outsourced, the risk of malicious interference or disruptions increases dramatically. In particular, this includes insertions of malicious vulnerabilities (e.g., “back doors” that can allow malicious actors to target a system using the chip). Counterfeiting and re-use of compromised semiconductors presents an additional risk, including revenue loss and early or catastrophic failure of end systems.
  3. Dependence on China. U.S. equipment companies are nearly entirely dependent on foreign suppliers, with purchases from China accounting for an increasingly large percentage of the market. Semiconductor companies would be significantly impacted by trade restrictions, embargos, or conflicts involving China. In short, the need to rely so heavily on a non-U.S. ally for an essential component of nearly every modern technology product puts the U.S. at significant risk.

Key Recommendations

  1. Fully fund the “Creating Helpful Incentives for Production of Semiconductors (CHIPS) for America” program. The 2021 National Defense Authorization Act, Pub. L. No. 116-283 §§ 9901-9908, incentivizes domestic investment in semiconductor production. The Department of Commerce recommends these programs be fully funded to incentivize semiconductor manufacturing and research and development (R&D) to promote long-term U.S. leadership in the industry.
  1. Strengthen the domestic semiconductor manufacturing ecosystem. This recommendation suggests legislative action, incentives, and investment to “support key upstream—including semiconductor manufacturing equipment, materials, and gases—and downstream industries to offset high operational costs in the United States.” Specifically, the government may leverage programs like the International Trade Administration’s “SelectUSA” program and the Department of Commerce National Institute of Standards and Technology (NIST) Manufacturing USA Institute, both of which have been requested in President Biden’s 2022 Budget.
  1. Support manufacturers, particularly small and medium-size businesses. To enhance innovation, the Department of Commerce recommends the U.S. Government invest R&D resources in small and medium-sized business, as well as disadvantaged firms along the supply chain. This kind of diversification will reap benefits both in terms of innovation and also jobs.
  1. Protect U.S. technological advantage. To address national security and foreign policy concerns, the Department of Commerce recommends that export control policies align with policy actions related to the supply chain. Additionally, the Department of Commerce recommends that reviews by the Committee on Foreign Investment in the U.S. (CFIUS) consider the national security concerns related specifically to the semiconductor supply chain before approving foreign investment in U.S. companies.

II. Large Capacity Batteries And Electric Vehicles (EVs) (Department of Energy)

Key Risks and Challenges

  1. Weak domestic production/foreign dependence. Global production of the minerals that are essential to producing high-capacity batteries – including lithium, cobalt, nickel, and graphite – each are primarily dependent on a single nation, China. Additionally, the business of refining these minerals is dominated by China and Russia. Dependence on potential adversaries is a huge supply chain risk, as these countries can use market control to restrict access to necessary materials to build long-lasting batteries.
  2. Geopolitical issues. This includes a host of different issues including restriction of access to resources by China; substandard materials being offered to U.S. makers of the battery cells; and human rights violations (including forced labor) or other types of corruption in countries in the supply chain.
  3. Market/economic shocks. As demand increases, and supply struggles to keep pace, it is likely that battery prices may spike in the future. Additionally, any tax or penalties on products whose production and delivery require large CO2 emissions could lead to secondary market related disruptions. If such policies become widespread, the price of Chinese products, in particular, could rise sharply, placing U.S. EV manufacturers at a severe disadvantage.

Key Recommendations

  1. Stimulate demand for end products using domestically manufactured high-capacity batteries. This recommendation focuses on supporting U.S.-based demand in two sectors: (1) transportation and (2) utilities. For transportation, the Department of Energy recommends: (a) transitioning the entire federal government vehicle fleets, as well as other school and transit buses, to EVs; (b) providing rebates and tax credits for consumers (with a “Buy America” preference for U.S. content); and (c) supporting the EV charging infrastructure across the country. Likewise, for utilities, the Department of Energy recommends: (i) accelerating federal procurement of battery storage; (ii) expanding tax credits to include stationary storage as a stand-alone resource; and (iii) reforming power transmission regulations to support renewable power and stationary energy storage.
  2. Strengthen responsibly-sourced supplies for key advanced battery minerals. The Department of Energy recommends: (a) that the U.S. invest in targeted, mineral-specific strategies, including supporting sustainable domestic extraction of lithium; (b) recovering nickel and cobalt from recycled or unconventional sources; and (c) working with global allies to expand global production and increase access to supplies.
  3. Promote sustainable domestic battery materials, battery cell, and battery pack production. This recommendation centers around financial support and investment from the U.S. government in the form of grant programs, tax credits, and federal procurement contracts. It specifically mentions leveraging the Department of Energy’s Advanced Technology Vehicle Management Loan program and reviving and expanding Section 1603 of the American Recovery and Reinvestment Tax Act (ARRTA) program to support small manufacturers in the batteries, battery cells, and related material processing supply chain.

III. Critical Minerals and Materials (Department of Defense)

Key Risks and Challenges

  1. Concentration of supply. Strategic and critical minerals are any materials that are needed to supply the military, industrial, and essential civilian needs of the United States during a national emergency, and that are not found or produced in the U.S. in sufficient quantities to meet such need. These materials can be found in nearly every electronic device, and they support high value-added manufacturing and high-wage jobs, in sectors such as automotive and aerospace. Similar to the materials needed for high-capacity batteries, a significant portion of global production for strategic and critical minerals is concentrated in only one or a few countries (predominantly China). The lack of diversity in suppliers creates a single point of disruption for a large portion of the global supply. In some instances, the concentration of supply is so extreme that production is limited to a single source (often China).
  2. Price shocks. The markets for critical minerals are often small and the production efforts are complex, which leads to a relatively inelastic supply. Such markets are particularly susceptible to massive price spikes and volatility.
  3. Human rights and related issues. Production and trade of critical minerals often involve a host of concerns, including forced and child labor, violence related to conflict minerals, profiteering by non-state actors, environmental pollution, organized crime, and corruption.

Key Recommendations

  1. Expanding sustainable domestic production and processing capacity. The Department of Defense recommends the U.S. Government work with key stakeholders from the private sector, labor, and nongovernmental organizations (NGOs) to develop sustainability metrics for critical materials. Additionally, the Department of Defense recommends the U.S. government adopt a sustainability requirement (g., a “sustainably produced” standard) for its purchasing, and develop a related Federal Acquisition Regulation (FAR) rule to establish a preference or requirement for the selection of products with higher sustainably-produced content.
  2. Deploy the Defense Production Act (DPA) and other programs to incentivize production. The Department of Defense recommends that multiple agencies use the DPA and other existing authorities and funding to incentivize production across the critical materials supply chain, including downstream, high value-added manufacturing such as new magnet capabilities and advanced electric motor designs. The Department of Defense recommends using similar programs to support R&D efforts, such as those focused on rare earth magnet recycling capabilities.
  3. Convene industry stakeholders to expand production. This recommendation also is related to the DPA, which authorizes the U.S. government to convene industry groups (with protection from civil and criminal anti-trust law) to coordinate business activities and form plans of action that satisfy a national need. The Department of Defense suggests convening such a group to identify opportunities to expand sustainable domestic production, and explore opportunities to create consortia or public-private partnerships for sustainable domestic processing of key strategic and critical materials.

IV. Pharmaceuticals and Active Pharmaceutical Ingredients (API) (Department of Health and Human Services)

Key Risks and Challenges

  1. Foreign dependence/lack of domestic manufacturing. As with the other supply chain areas, dependence on foreign nations has been cited as a key vulnerability for the U.S. pharmaceutical supply chain. The need to acquire pharmaceutical products at the lowest cost possible has led to a consolidation of production in foreign, low-cost countries (such as India). This potentially allows foreign governments to leverage such dependency by interrupting U.S. access to these supply chains.
  2. Limited resilience. Because of the cost and complexity of pharmaceutical manufacturing, the supply chain is particularly susceptible to disruptions. For example, shifting from an unreliable third-party source and expanding manufacturing can take significant time and require costly investment and time to obtain regulatory approvals.
  3. Limited redundancy. Most production of the active pharmaceutical ingredients occurs outside of the U.S., and sometimes from a single source. As such, the supply chain is particularly vulnerable to changes in natural disasters or other disruptions that could occur in one country, but affect the entire supply chain. Additionally, there are a limited number of drug manufacturers per unique drug, such that the markets are highly concentrated, which can lead to increased costs.

Key Recommendations

  1. Improve supply chain transparency and incentivize resilience. The Department of Health and Human Services recommends that any new policies seek to provide increased transparency related to the sources of drug manufacturing and the quality of the facilities that make them. This will incentivize purchasers to rely on more resilient suppliers with higher quality production and a more robust supply chain.
  2. Increase the economic sustainability of U.S. and allied drug manufacturing and distribution. The U.S. market is often undercut by cheaper options, particularly from India and China. To increase domestic capacity for production of key drugs, the U.S. should focus on: (a) increasing the economic sustainability of U.S. and allied drug manufacturing; (b) increasing government and private sector flexibility in contracting and sourcing of finished drugs and raw materials; and (c) studying whether the current market for finished drugs supports a diversification of supply instead of relying on one or two suppliers through preferred contractual arrangements.
  3. Boost domestic production and foster international cooperation. The Department of Health and Human Services recommends boosting domestic production with a mix of: (a) targeted investments and financial incentives (including through use of the DPA); (b) R&D to create new manufacturing technologies; (c) greater supply chain transparency; and (d) improved data collection to better understand the economics and supply chain realities.
  4. Build emergency capacity. In addition to bolstering domestic production and creating additional supply chains with U.S. allies, the Department of Health and Human Services recommends crating a virtual stockpile of active pharmaceutical ingredients and other critical materials necessary to produce critical drugs during times of crisis.

Conclusion

What does all of this likely mean for you and U.S. industry? Well, it’s hard to say, especially given that this is a quick-turn 100-day report. But here’s our initial “in a nutshell” takeaway of what we expect to see:

  • More business in these four industries/sectors (especially in the U.S.). The recommendations suggest there likely will be increased domestic investment by the Government (including tax credits and tax incentives). Overall, there seems to be recognition that domestic options may be more expensive, but that the higher price is worth the cost.
  • Higher costs for foreign sourcing. The Government will be looking to increase the costs associated with foreign sourcing, making those foreign sources more expensive and thereby more competitive with the more costly domestic alternatives.
  • Restrictions on Chinese imports. In particular, the Government will continue to move away from sourcing products/components/materials from China – “China” is the great buzzword in this Report, being mentioned 458 times!
  • More “Buy America” requirements.
  • More regulations.
  • Implementation of the new bi-partisan infrastructure bill (announced last week), complete with its focus on public transportation options, may give us near-term insights into how some of these policies will play out over the longer term (including the push for more domestic jobs).

We thank Sheppard Mullin Summer Associate Jake Walker for his contributions to this article.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.
For more articles on supply chain, visit the NLR Corporate & Business Organizations section.

Miami Condo Collapse: What Role Can Whistleblowers Play to Prevent Such Tragedies?

In the early morning hours of June 24, 2021, a 13-story condominium building in the town of Surfside on Miami Beach, Florida, collapsed. Tragically, four people have been confirmed dead, and search and rescue crews continue their efforts to find other survivors, with at least 156 people still unaccounted for. According to recent reports, nearly three years before the collapse, in October 2018, a consultant found evidence of “major structural damage” to concrete slabs beneath the pool deck and beams and walls of the parking garage under the building. While the cause of the collapse remains unknown, the 2018 report suggests that the complex’s management association knew of the potentially severe structural damage to the building.

This tragedy was not the first time a building has collapsed in the County. In 1974, the federal Drug Enforcement Agency building in downtown Miami collapsed. In response, Miami-Dade County created a recertification process for buildings over 40 years old to ensure these buildings’ structural integrity. Because of weather conditions in South Florida and exposure to corrosive salt air, damage to rebar and steel beams can impact the structural integrity of a building over time. The Miami-Dade County Code requires inspections to be conducted to evaluate the general structural condition of the building and to ensure building safety. The association was set to begin plans to repair the building this year, in connection with this recertification process.

This recent disaster leaves many wondering what could have been done to prevent it, and how we can avoid such tragedies. Employees and contractors in the construction industry are uniquely positioned to discover safety risks and other violations in building projects. As such, they can play a significant role in alerting the government, and in turn the public, of serious risks. What laws exist to protect and incentivize these whistleblowers?

Protections for Whistleblowers in Florida

Florida provides broad protection to employees who report legal violations. For employees in the public sector, the law protects public employees, as well as independent contractors with a government agency, who report to an appropriate government agency violations “that create a substantial and specific danger to the public’s health, safety or welfare.” The state’s private sector whistleblower law also protects private employees who disclose wrongdoing to a government agency. Significantly, the law also protects private employees who have “objected to, or refused to participate in, any activity, policy, or practice of the employer which is in violation of a law, rule, or regulation.” An employee who faces retaliation for reporting wrongdoing may be entitled to damages, including lost wages, benefits, and other types of compensatory damages.

False Claims Acts

Protections under the federal False Claims Act (FCA) apply across a wide range of industries, including in the construction industry. The FCA prohibits the intentional presentation of false claims to the government for payment, which includes providing false information in connection with any claims for payment. If a construction whistleblower discovered a violation of the FCA – for example, if a company received federal funds to complete building repairs that were not completed – he or she could file a lawsuit on behalf of the federal government, known as a qui tam. An individual who brings a successful qui tam lawsuit can receive 15 to 30 percent of the damages received by the government. The FCA also includes worker protections so that an individual who brings a qui tam action or tries to stop the FCA violations may be entitled to relief if he or she experiences retaliation on the job.

Like many other states, Florida has a statute modeled on the federal FCA that protects employees for reporting an employer who presents false claims to the state or otherwise misappropriates state property. An individual who brings an action under the Florida FCA may be entitled to a percentage of the amount recovered by the government. Similar to the federal FCA, individuals who report violations under Florida’s FCA are also protected from retaliation for trying to stop such violations or bringing a qui tam action.

Conclusion

News reports state it may take months to know what caused the horrific collapse of the condo building in Miami. Miami-Dade County will undoubtedly evaluate how it may prevent such tragedies in the future. In Miami and elsewhere, whistleblowers can play an integral role in protecting public safety. Federal and state laws provide protections and incentives to those who come forward to report potential violations.

Katz, Marshall & Banks, LLP
For more articles on whistleblowers, visit the NLR Criminal Law / Business Crimes section.

Carlos Rios, A U.S. Citizen, Sues ICE for Wrongful Detention, Seeks $500,000 in Damages

On November 17, 2019, Carlos Rios was arrested by the Washington State Patrol in Pierce County, Washington, allegedly for driving his motorcycle under the influence. Rios was imprisoned in Pierce County Jail, and his belongings were confiscated. Upon his release two days later, he was taken into custody by two U.S. Immigration and Customs Enforcement (ICE) officers. Rios repeatedly told the officers that he was a U.S. citizen, but his protests went unheard.

Now, Rios, a welder at the Port of Everett, is suing ICE for unlawful arrest, false imprisonment, intentional infliction of emotional distress, and negligence. Rios is also seeking compensatory damages totaling $500,000. He is represented in his lawsuit by the Northwest Immigrant Rights Project (NWIRP).

Rios was born in Mexico, entered the U.S. in the 1980s, and has lived here ever since. He became a naturalized citizen in 2000. “I cannot understand why I was detained and why no one listened to me,” he said in a news release issued by the NWIRP.

The Arrest by ICE

Rios said he kept telling the officers who handcuffed him outside the prison that he was a U.S. citizen. No one listened to him, and instead, put him in a van to be transported to the Northwest Detention Center in Tacoma, where he stayed for a week. Ironically, Rios was carrying a passport in his plastic bag but was never given the opportunity to show it to the officers.

His lawsuit says that he was kept in an isolated cell allocated to people who are at risk of self-harm. He slept on the floor. The officers also told him that if he caused trouble, then even his clothes would be confiscated.

Pierce County Prison Notified ICE of Rios’s Release

The officials of the Pierce County Jail had notified ICE that Rios was to be released. However, because county prison officials did not hold him for any additional period, they avoided violating any state laws. Six months ago, Washington State passed a “Keep Washington Working Act,” which prohibits cooperation between the state and immigration officials.

Rios faces the consequences of his disappearance. He claims that he lost his job and that his absence strained his marriage. Rios is seeking $500,000 in compensation for his humiliation and distress.

Wrongful Detention by ICE

U.S. Army veteran and Belize native, Rennison Castillo, was taken to the Tacoma facility, where he was detained for seven-and-a-half months. He was detained despite having repeatedly claimed that he is a naturalized citizen of the United States. In 2010, the U.S Army veteran received a $400,000 settlement and an apology from the Department of Justice. It was around that time that NWIRP investigated and compiled a list of 16 U.S. citizens who were subject to such wrongful detention in Tacoma.

Following many claims of wrongful detention, ICE instituted new policies requiring officers to immediately investigate claims of citizenship and to instantly alert supervisors. ICE has also been warned against conducting discriminatory stops based on the people’s looks and the language they were speaking. The NWRIP has won two $35,000 settlements from the federal government for similar issues.

©2021 Norris McLaughlin P.A., All Rights Reserved
For more articles on ICE, visit the NLR Immigration section.

Justice Thomas Criticizes Federal Marijuana Policy, Questions Whether Prohibition Remains Necessary or Proper

U.S. Supreme Court Justice Clarence Thomas has issued an unexpected statement questioning whether the federal government’s continuing prohibition on marijuana is necessary or proper. His statement was made in conjunction with the denial of a writ of certiorari in the matter of Standing Akimbo LLC v. United States, which asked the court to address whether a medical marijuana dispensary could properly deduct ordinary business expenses in violation of section 280E of the federal tax code.

In his statement, Justice Thomas bluntly acknowledges that the reasoning behind the U.S. Supreme Court’s 2005 decision in Gonzales v. Raich ‒ which held that the power of Congress to regulate interstate commerce authorizes it to prohibit the local cultivation and use of marijuana ‒ has been “greatly undermined” by federal policies over the past 16 years. He characterized the federal government’s current approach as a contradictory and unstable “half-in, the half-out regime” that “strains basic principles of federalism and conceals traps for the unwary.”

Examples of the federal government’s mixed signals include the 2013 Cole Memorandum issued by the Department of Justice (DOJ) and Congress’s prohibition in place since 2015 that restricts the DOJ from spending funds to prevent states from implementing their own medical marijuana laws. These actions by the federal government have “broad ramifications” according to Justice Thomas, given that 36 states allow medical marijuana use and 18 of those states also allow adult use of cannabis.

Behind the Statement

In this environment, Justice Thomas rhetorically asks whether it is now reasonable for an ordinary person to think that the federal government “has retreated from its once absolute ban on marijuana,” and for cannabis business owners to think “that their intrastate marijuana operations will be treated like any other enterprise that is legal under state law.” He points out, however, that “legality under state law and the absence of federal criminal enforcement do not ensure equal treatment.”

Justice Thomas clearly is bothered by the strict enforcement of the federal tax code to the detriment of state-legal businesses and the simultaneous absence of federal enforcement in areas such as cultivation and distribution of marijuana that is legal under state law. He describes the federal government’s willingness to look the other way as “more episodic than coherent.” Justice Thomas identifies other harmful results caused by this schizophrenic federal approach, including federal prohibitions on financial institutions providing services to the cannabis industry, which has resulted in significant public safety issues, and civil lawsuits brought against individuals and businesses under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Justice Thomas concludes by noting that the federal government’s current approach to marijuana bears little resemblance to the uniform policy of prohibition upon which a closely divided Supreme Court based its decision in Raich 16 years ago. He warns that by allowing states to act as laboratories that try novel social and economic experiments, the federal government may no longer have authority to intrude on the states’ core police powers. “A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach.”

Marijuana Policy

Though Justice Thomas’ statement has no formal precedential value, it nevertheless represents the most explicit statement yet from a sitting – and conservative – Supreme Court Justice that questions the rationality of current federal marijuana policy. For court watchers, this represents a seismic shift on marijuana policy within the highest court of the land. Justice Thomas’s bold defense of federalism also should prove influential to members of the other branches of government who remain cautious on broad marijuana reform.

© 2021 Wilson Elser
For more articles on marijuana policies, visit the NLR Biotech, Food, Drug section.

Making the Roster: Conflicting Title IX Interpretations Present Challenges for Transgendered Athlete Participation

Nationwide, college athletic programs are facing a dilemma: can they roster transgendered athletes on teams that conform with their gender identity? The answer is: it depends on where the team is located. In recent years, presidential administrations, Congress, states, and federal courts have weighed in on this issue. School athletics must not only take into account the guidelines and bylaws of the NCAA, but also must consider the federal guidance of the Department of Justice and the Department of Education, the recent rash of state laws that prohibit the participation of trans athletes in sports, and judicial decisions that interpret federal and state law. This is a daunting task as the four sets of rules (NCAA, federal law, state law, and judicial decisions) appear to be in conflict in interpreting the right to roster transgendered athletes to conform to the athletes’ gender identity.  These conflicting policies create risk for athletic departments of colleges and universities.

NCAA Guidelines

The NCAA has had a trans-inclusion policy in place for years, predating the current legal debate. The NCAA bylaws allow for transgendered athletes to participate on teams that conform with their gender identity if certain conditions are met regarding hormone therapy. Additionally, in August 2011, the NCAA issued guidelines (the “NCAA Guidelines”) on trans-inclusive policies for intercollegiate athletic teams. The NCAA Guidelines’ purpose was “to provide guidance to NCAA athletic programs about how to ensure transgendered student-athletes fair, respectful, and legal access to collegiate sports teams based on current medical and legal knowledge.” The NCAA Guidelines, among other things, advise institutions that “all members of the school community should receive information about transgender identities, non-discrimination policies, the use of pronouns and chosen names, and expectations for creating a respectful school and team climate for all students, including transgender students.” Further, they recommend that transgendered athletes be afforded access to the locker room and other facilities in accordance with their gender identity and that transgender student-athletes should be assigned hotel rooms according to their identified gender in the same manner that other members of the team are assigned rooms. The NCAA Guidelines’ purpose is to treat transgendered athletes the same way as their cisgendered teammates.

The NCAA recently reaffirmed its trans-inclusive policies, partly in response to the ongoing legal battles, and stated that it “regularly assesses its practices related to transgender participation and solicits feedback” from not only medical community experts and inclusion thought leaders, but also current and former student-athletes.  The NCAA included an educational session on transgender and nonbinary student-athlete participation in its annual Inclusion Forum, which took place June 2–4, 2021.

Federal Law and the Biden Administration’s Trans-Inclusive Policies

Titles VII and IX protect against sex discrimination.  Until recently, however, the scope of that protection to gay and transgender people was uncertain as court decisions were mixed and the previous administration did not include gay and transgender persons within the scope of sex discrimination under federal law.

In June 2020, the United States Supreme Court clarified that homosexual and transgender individuals are entitled to the protections of Title VII.[1]  In an affirmance of the Supreme Court’s Bostock decision, on his first day in office, President Biden issued an Executive Order, entitled, Preventing and Combating Discrimination Based on Gender Identity or Sexual Orientation. Among other declarations, the Executive Order asserts that “[a]ll persons should receive equal treatment under the law without regard to their gender identity or sexual orientation”, including that “[c]hildren should be able to learn without worrying about whether they will be denied access to the restroom, locker room, or school sports.” This Executive Order changed the federal government’s position on transgender rights from that which existed under the prior administration.

Since January 21, 2021, the Department of Justice’s Civil Rights Division issued a memo to all federal agencies extending the protection to gay and transgender people under Title IX as well.  The Civil Rights Division wrote that based on the Bostock decision, Title IX also should be read as protecting the status of gay and transgender students. In its memo, the Division wrote: “After considering the text of Title IX, Supreme Court case law, and developing jurisprudence in this area, the Division has determined that the best reading of Title IX’s prohibition on discrimination ‘on the basis of sex’ is that it includes discrimination on the basis of gender identity and sexual orientation.”

On April 6, 2021, the Department of Education’s Office for Civil Rights, which is responsible for enforcing Title IX, announced it would undertake a comprehensive review of its Title IX regulations.  It announced that “all students should be guaranteed an educational environment free from discrimination on the basis of sex, including discrimination in the form of sexual harassment, which encompasses sexual violence and including discrimination on the basis of sexual orientation or gender identity.”

On June 16, 2021, the Office for Civil Rights issued a Notice of Interpretation, which states that the Department of Education interprets Title IX’s prohibition on discrimination to include discrimination on the basis of sexual orientation and gender identity and based that interpretation on the Supreme Court’s decision in Bostock. The Office for Civil Rights concluded that such interpretation “is most consistent with the purpose of Title IX, which is to ensure equal opportunity and to protect individuals from the harms of sex discrimination.”[2]

Recent Anti-Transgender State Legislation

Transgendered athletes also face legal challenges on a state level. Eight states have passed laws prohibiting women from participating in sports outside of their birth gender[3] and over 30 states have introduced some form of bill that prohibits transgendered athletes from participating on single-sex sports teams. For example, in Arkansas, Governor Asa Hutchinson signed Senate Bill 354, which bans transgender women and girls from participating in school sports. The decision comes two weeks after Mississippi Governor Tate Reeves signed a similar bill, which will go into effect July 1, 2021. Arkansas Attorney General Leslie Rutledge stated, “We don’t want common sense to be overshadowed by so-called political correctness, and this bill will ensure the integrity of girls and women in sports.” Florida’s law would require any athlete whose biological sex is disputed to have a health official examine the athlete’s reproductive anatomy.

North Carolina’s bill, known as the “Save Women’s Sports Act,” would prevent transgendered women from playing on women’s sports teams at public schools or universities as well. Texas’s legislature took a similar approach, introducing a bill that would prohibit transgendered athletes from participating on single-sex sports teams in public high schools, colleges, and universities. This week, Texas’ Governor called the legislature back into special session to vote on this bill.

Supreme Court’s Decisions on Sex Discrimination

In Bostock, the United States Supreme Court held that homosexual and transgender individuals are a protected class under Title VII. Bostock came to the Court as a consolidation of three Title VII appeals—two cases of which involved employees being fired for being gay and the third involved the firing of an employee who intended to undergo gender affirmation surgery. In a 6–3 ruling, the Supreme Court found that homosexual and transgender individuals were afforded “protected class” status under Title VII.  It found that the employers’ conduct constituted illegal discrimination. The majority, analyzing Title VII’s language that prohibits discrimination on the basis of sex, concluded that sex was so intertwined with sexual orientation and gender identity, that any discrimination based on sexual orientation or gender identity is necessarily, in part, discrimination based on sex.[4]

The majority made clear that its definition of “sex” only should be applied to Title VII and employment matters. However, the Bostock ruling does seem to open the door to similar interpretation of Title IX. Such application might have, as Justice Alito mused in his dissenting opinion, unintended consequences, especially for college and university Athletic Departments.

This week, the Supreme Court determined that there are legitimate religious objections to the treatment of lesbian, gay, bisexual, and transgender people and these objections are entitled to First Amendment protection against statutes to the contrary.  In Fulton v. City of Philadelphia, ___ S.Ct. ___, 2021 WL 2459253 (June 17, 2021), the Court unanimously held that Philadelphia’s anti-discrimination laws (which were included in its foster care contracts) did not apply to a Catholic social services agency’s policy to exclude same-sex couples from foster placement. The Court determined the agency’s religious beliefs were entitled to First Amendment protection from Philadelphia’s local laws.  It held that the Catholic-based foster care agency was allowed to maintain its contract with the city and continue to bar same-sex couples from fostering.

While the Court focused on the wording of Philadelphia’s anti-discrimination ordinance in the Fulton decision, it may be read to exempt faith-based opposition to laws precluding discrimination against gay and transgendered individuals. Indeed, future rulings may allow religious colleges and universities to bar transgendered student-athletes.

Federal Courts Take Up the Debate

Other federal courts have decided cases involving transgendered athletes’ rights.[5]  In Hecox v. Little, two transgender women sued the state of Idaho over its Fairness in Women’s Sports Act, which prohibits transgendered women from competing on women’s sports teams at public schools. The plaintiffs sought to apply Title IX anti-discrimination protections to declare the state law unconstitutional. The federal judge granted the plaintiffs’ preliminary injunction, temporarily prohibiting the law from becoming effective. The Ninth Circuit is now deliberating the constitutionality of the state law, following Idaho’s appeal of the district court’s injunction.

And, in Soule v. Connecticut, some cisgendered female high school athletes in Connecticut sued the Connecticut Interscholastic Athletic Conference for violating Title IX.  The plaintiffs claimed the conference’s policies allowed transgendered athletes to unfairly dominate track and field events when those events were meant for cisgendered female competitors.  The Trump administration, which issued guidance that interpreted Title IX in line with the Connecticut plaintiffs’ arguments, supported the lawsuit. The court dismissed the Connecticut action on the ground of mootness.  The court held that because the transgendered athletes in question had already graduated from high school and would not be participating in CIAC events, there was nothing left to decide. The court did not decide the case on the merits.  The ACLU issued a statement that it intended to challenge any legislation that prohibited transgendered athletes from participating in interscholastic sports, so future litigation is likely.

Conclusion

Colleges and universities face risks and opportunities with regard to transgendered athletes. The NCAA by-laws and guidelines permit transgendered athletes to compete on teams that conform with their gender identity.  The federal government has issued administrative guidance, Executive Orders, and a Notice of Interpretation that would preclude institutions from discriminating against transgendered individuals, under Title VII or Title IX.  A number of states—eight and increasing —have enacted legislation that not only conflicts with federal guidance but also limits the rights of transgendered athletes. While courts so far have found restrictions on gay and transgendered persons to violate Title VII and Title IX, the United States Supreme Court may have limited the applicability of those decisions where there is a religious issue.  In short, courts are struggling to balance equal protection and Titles VII and IX guarantee with other constitutional protections.  And, of course, colleges and universities need to be able to articulate policies that are compliant with the law and their core values.

The resolution of these issues has real consequences on colleges and universities.  The resolution may affect the institution’s core values and donations.  It also may, in the athletic department, affect the ability to recruit and retain athletes.  The institution may find that its policies may conflict with those of the NCAA, and thereby risk eligibility or media rights revenues.   And, the institution’s policies may put it at the center of disagreements between its state and the federal government.

[1] See Bostock v. Clayton County, 140 S.Ct. 1731 (2020) and the discussion in section 4 below.

[2] Notably, the Executive Orders, DOJ Memo, and the Notice of Interpretation are all silent as to any potential enforcement actions the Biden administration and its agencies would take against non-compliant institutions. Colleges and universities should be on the lookout for further guidance from the Department of Education on compliance with its Title IX interpretation—and consequences of noncompliance.

[3] Alabama, Arkansas, Florida, Idaho, Mississippi, Montana, Tennessee and West Virginia.

[4] In a dissent, Justice Alito pondered the effect the majority’s ruling would have on other matters involving sex discrimination, specifically whether the Court’s interpretation of Title VII—which focuses on employment—would impact Title IX, which applies to sex discrimination in educational and athletic programs.

[5] Hecox v. Little, 479 F.Supp.3d 930 (D. Idaho 2020); Soule v. Conn. Ass’n of Pub. Sch.,  No. 3:20-CV-00201-RNC, 2021 WL 1617206 (D. Conn. April 25, 2021) .

2021 Goulston & Storrs PC.
For more articles on Title IX, visit the NLR Public Education & Services section.

How Law Firms Can Invest in Employee Wellbeing Through E-Relationship Building

The COVID-19 pandemic highlighted the need for an increased focus on mental health in the legal industry. In a recent webinar from GCC Portfolio, Renee Branson, a principal at RB Consulting and Executive Director at the Sexual Assault Resource Agency, Deborah Knupp, Managing Director at GrowthPlay and Lisa Buchanan, Director of Marketing and Creative Services at GCC Portfolio discussed the importance of mental health and E-relationship building at law firms.

The coronavirus pandemic provided an opportunity to speak about mental health in a way that allowed it to be destigmatized. Many in the industry were experiencing the same feelings of anxiety and depression. As a result, the legal industry recognized mental health was something that needed to be discussed.

To address the issue of mental health in the legal industry, law firms need to understand what the biggest issues are, how to address them, and how to get support from leadership to tackle those issues.

What are the Biggest Mental Health Issues in the Legal Industry?

With many in the legal industry beginning to return to the office, Ms. Branson said she’s seen higher levels of anxiety, guilt, and ambivalence among workers. These feelings manifest in social reluctance among employees, as well as an increased need for remote work flexibilities.

“What we have experienced really is a trauma,” Ms. Branson said. “First of all, frame it for what it is.”

Ms. Knupp said there is a phenomenon called the “shadow pandemic” emerging as a long term effect of the coronavirus pandemic. This shadow pandemic encompasses feelings of mortality, neurological disorders, and other mental health consequences of the COVID-19 pandemic that are expected to last for years.

“We’re going to see a broad expanse of different things,” Ms. Branson said. “For folks who had COVID, we still don’t know the long term neurological and mental health impacts of surviving that illness.”

For those who haven’t experienced COVID-19 firsthand, what the shadow pandemic could reveal are long term feelings of trauma. Ms. Branson said that once the pandemic subsides and people begin to feel a sense of security, they then begin to process the trauma they experienced during lockdown.

“That processing can take a short amount of time, or it can take years,” Ms. Branson said. “The way to keep that from feeling really overwhelming is to not add on really high expectations to yourself and others.”

Investing in mental health education for those in the legal industry is one way to help leadership be better coaches, issue spotters and counsel for their organizations and clients. This involves staying connected with clients to keep mental health issues a top priority. To achieve this, Ms. Branson said she utilizes what she calls a resilience library with six “books” that address mental health issues.

“One of those books is Connection,” she said. “When we feel disconnected from people and feel a lack of belonging and an inability to be authentic to ourselves, whatever burden we’re carrying feels twice as heavy. If they have a connection with someone that they can rely on, it helps ease [that burden].”

The law firms that are the most successful in addressing mental health issues are those that listen and adapt. Even though the coronavirus pandemic was a huge disruption, it also gave law firms the opportunity to adapt and examine their processes in order to better accommodate their employees’ needs.

“It’s really challenging right now because we do have this great ability to connect but also Zoom fatigue is real. We have to find new and different ways to stay connected…[especially] with small groups of folks, whether that’s done virtually or in person,” Ms. Branson said. “It’s about listening and being able to respond when you can.”

How Law Firms Can Connect Through E-Relationship Building

To tackle the issue of mental health during the pandemic, law firms need to be creative and innovative in the ways they reach out to employees. E-relationship building includes team-based activities, events, and communications. Ms. Buchanan said that one of the biggest changes GCC saw in the past year was law firms showing appreciation to their employees by acknowledging their hard work during challenging times.

With many feeling Zoom burnout, electronic and virtual communications are one way law firms are engaging with their employees and showing appreciation. These communications can be as simple as sending individual messages letting employees know they’re appreciated.

“It can be so impactful for a firm to say ‘thank you’ because we’re all having a rough time,” Ms. Buchanan said. “Little things can be so impactful… and make a huge difference in somebody’s life.”

Ms. Buchanan said the pandemic affected the way firms think in terms of focusing on small gestures instead of bigger initiatives. Investing in ways to give employees appreciation shows that the firm is focused on their wellbeing.

“I’m just blown away by the fact that our firms are so forward in being part of [mental health],” she said. “The law industry seems to be taking it and moving forward.”

How to Start Mental Health Initiatives at Law Firms

Even if employee mental health and wellbeing is top of mind for law firms, it can be a challenge to get leadership on board. One way to stress the importance of mental health initiatives is to highlight the impact poor mental health can have on productivity.

“Either spend a certain amount of time addressing feelings and mental health, or we’re going to spend a lot of time [addressing] inefficiencies and lack of productivity,” Ms. Branson said, quoting author and researcher Brené Brown. “These things really do have bottom line impacts.”

Ignoring mental health issues impacts both client relationships and a law firm’s finances. To deal with issues of decreased productivity, firms should focus on innovative ways to communicate with employees. Ms. Buchanan said firms who used GCC for holiday cards get input back from employees.

“Letting the firms be creative in the way that they want to portray who they are is the first thing,” Ms. Buchanan said. “It’s also a connection and letting their clients and people know ‘we see you.’ Just little touch points are really important.”

What Can Law Firms Do to Focus on Mental Health Moving Forward?

The coronavirus pandemic offered an opportunity for law firms to put an increased focus on mental health. Acknowledgement, education, acceptance, and understanding of mental health issues validates those who are struggling, and helps remove the stigma. By acknowledging mental health, firms will help improve their bottom line while also investing in their employees’ wellbeing.

“It starts at the top,” Ms. Buchanan said. “If you’ve got a leader in the firm that gets [mental health], you’ve got so many options.”

For law firms looking to prioritize their employees’ mental health, focusing on E-relationship building is a good place to start. With many firms still working remotely, Ms. Knupp emphasized that there hasn’t been a better time to reach out to employees and start an initiative.

“This is the time to let people know that you see them,” she said. “No matter what you do, be a kind human to humankind.”

Watch the full webinar here: GCC Presents Mental Health & E-Relationship Building

Copyright ©2021 National Law Forum, LLC
ARTICLE BY Rachel Popa of The National Law Review / The National Law Forum LLC
For more articles on the legal industry, visit the NLR Law Office Management section.

Supreme Court Offers Clarification on Protection for Off Campus Speech: Implications for School Boards & First Amendment

On June 23, 2021, the U.S. Supreme Court held that the Mahanoy Area School District violated the First Amendment rights of Brandi Levy, a high school student who went to Snapchat to voice her frustrations when she didn’t make the varsity school cheerleading team.

Ms. Levy posted on her personal Snapchat a few photos showing the middle finger, one with the caption, “F*** school f*** softball f*** cheer f*** everything,” and the other saying, “Love how me and [another student] get told we have another year of jv before we make varsity but tha[t] doesn’t matter to anyone else.” which was visible to about 250 people at the time, many of whom were fellow students.  Snapchat messages, by design are meant to go away not long after they are sent.

In this circumstance, at least one other student took a screenshot of the post(s) and shared it with her mother, who was also a coach, to express concern, the school district decided Ms. Levy violated school and team rules, and was ultimately suspended from the junior varsity cheer squad for the remainder of the year.

Ms. Levy and her parents sued Mahanoy School District (“School District”) under 42 U.S.C. § 1983, stating that her suspension violated the First Amendment, and Mahanoy’s team and school rules were overbroad and unconstitutionally vague. The School District argued that they were within their rights to suspend Ms. Levy because of the previous Supreme Court decision Tinker v. Des Moines Independent Community School District, which ultimately held that school officials could regulate speech that would disrupt the work and discipline of the school.

Both the United States District Court for the Middle District of Pennsylvania and the Third Circuit Court of Appeals sided with Ms. Levy, and the Mahanoy School District filed a petition for certiorari, asking whether Tinker standard did or did not apply to this case.

The Supreme Court needed to decide whether the First Amendment prohibits public schools from regulating off-campus speech, and whether the Third Circuit correctly held that the school violated Ms. Levy’s first amendment rights. It was an 8 to 1 decision, with Justice Stephen Breyer drafting the majority opinion and Justice Clarence Thomas authoring the dissenting opinion.

The Supreme Court previously outlined three instances where a school may regulate student speech: (1) incident, lewd or vulgar speech uttered during a school assembly on school grounds, (2) speech uttered during a class trip that references illicit drug use, and (3) speech that others may perceive as bear[ing] the imprimatur of the school, such as in a school newspaper.

Ms. Levy’s words of criticism were outside of school hours and not on school property, and although they were vulgar, they were not threatening in nature, so the Supreme Court held the School District did not have the right to punish Ms. Levy and she was not outside of her First Amendment rights.

What are the Free Speech Implications?

While the Supreme Court ruled in favor of Ms. Levy in this case, the ruling does not necessarily protect all off-campus speech. For example, in Tinker v. Des Moines Independent Community School District, the Supreme Court said schools may regulate speech that disrupts the order of the school or infringes on others’ rights. In his dissenting opinion, Justice Thomas said schools have the authority to regulate speech off-campus when it harms the school and threatens its faculty.

The Court said exceptions to the ruling in Mahanoy Area School District v. B.L. would be limited, and would have to be worked out in future cases. Justice Samuel Alito said in his concurring opinion that “the regulation of many types of off-premises student speech raises serious First Amendment concerns, and school officials should proceed cautiously before venturing into this territory.”

According to previous precedent, students do not lose their First Amendment rights when they set foot on school grounds.

“I think this result is foreseeable insofar as the Court seemed unlikely during oral argument to adopt the Third Circuit’s broad view that schools can’t regulate off-campus speech at all, but they also seemed to think the school had overreached here,” said Gautam Hans, assistant clinical professor of law and director of the Stanton Foundation First Amendment Clinic at Vanderbilt University Law School in a statement to the National Law Review.

The Court outlined three facets that distinguish schools’ efforts to regulate off-campus speech. First, it’s the parents’ responsibility to regulate students’ speech off campus. Additionally, if a student is subjected to speech regulations on and off campus, then their speech is regulated 24 hours a day.

“That means courts must be more skeptical of a school’s efforts to regulate off-campus speech, for doing so may mean the student cannot engage in that kind of speech at all,” per Justice Breyer writing for the majority. Lastly, the Court said schools are America’s “nurseries of democracy,” and therefore have an interest in protecting students’ unpopular opinions.

“Justice Breyer’s adoption of a flexible standard for when schools can regulate speech off-campus demonstrates the real challenges for schools and the need to balance competing interests. I suspect this will get litigated a fair amount in the coming years as courts try to figure out what to do with the standard articulated here,” Professor Hans said.

The Court specifically pointed out that in this case, Ms. Levy’s Snapchats were sent outside of school hours on her own time and were not sent on school grounds. She also did not identify the school itself in the posts, and did not target any person in particular. Therefore, the school did not have the right to suspend her.

“Likewise, there is little to suggest a substantial interference in, or disruption of, the school’s efforts to maintain cohesion on the school cheerleading squad,” the Court said.

What are the Implications for School Boards & Administrators?

In his dissenting opinion, Justice Thomas criticized the Court’s majority opinion for being too vague, and for its lack of guidance to schools on how to discipline students moving forward.

“Because the Supreme Court declined to set forth a uniform rule and give leeway to schools to regulate off-campus speech, the lower courts will further shape the landscape of First Amendment application to student speech,” per  Christine V. Hamiel, Chair of the School Law Section at von Briesen & Roper. “School boards and administration must be mindful that such further interpretation will continue to lay the foundation for what action a school may take with respect to student off-campus speech.”

Due to the ruling’s lack of uniformity, school administrators will have to think about the specific characteristics of off-campus speech when deciding whether or not to respond with disciplinary action.

“While acknowledging that there can be circumstances where off-campus speech may be regulated, it is clear from the decision that the characteristics of off-campus speech that differentiate it from speech at school or at a school function will make it more difficult to pass constitutional muster when dealing with off-campus speech,” per  Robert Burns, Chair of the School and Higher Education Team at Davis Kuelthau. “School administrators will have to analyze such issues carefully when contemplating responding to off-campus speech.”

Moving forward, schools will have to consider multiple factors of the impact of students’ speech when determining if and how to respond.

“The Supreme Court recognized that there can be circumstances where off-campus speech implicates the regulatory interests of schools,” Mr. Burns said.  “It concluded that the facts in Mahanoy did not rise to that level, but going forward school districts are in a position to respond to such speech if they conclude it is creating a substantial disruption of learning or threatening the protection of the school population.”

Should a school decide to take action against a student for off-campus speech, they must also determine the circumstances around the student’s speech.

“Schools must carefully consider each situation and the unique circumstances of each situation on a case-by-case basis, taking into consideration three key features: the authority a school has over the off-campus student; the content of the speech at the time it is made (given that off-campus regulation opens the door to school regulation of all student speech); and a school’s responsibility in maintaining a free ‘marketplace of ideas,’” Ms. Hamiel said.

Copyright ©2021 National Law Forum, LLC

ARTICLE BY Rachel Popa and Hanna Taylor of
The National Law Review / The National Law Forum LLC
For more articles on the Supreme Court, visit the NLRLitigation / Trial Practice section.

Tips to Determine Your Law Firm’s Contingency Fee

In the legal world, there are a lot of outlying factors to consider when setting up a new law firm or maximizing an existing one. And one of those factors is determining whether or not your firm needs a contingency fee, and, if so, how much that contingency fee should be.

What are contingency fees?

Law firm contingency fees are rates that a client agrees to pay after a lawyer successfully wins the case. Typically, these fees are agreed upon for cases involving money claims, such as workers’ compensation or personal injury. If the lawyer wins the case, they’re given a certain percentage of the money claimed. If not, then neither the lawyer nor the client receives any money. While in the latter situation, the client doesn’t have to pay the lawyer for working on the case, there are still court filing fees and other costs that occur, no matter if the lawyer wins or loses.

Lawyers who use contingency fees—also referred to as “no win, no fee” lawyers—can exist in almost any specialty area. However, contingency can only be used in civil litigation, not criminal justice. While the percentage of the fee varies by lawyer, typically contingency fees are 33 ⅓ percent of the case if a lawsuit is not filed and 40% if a lawsuit is filed.

5 Tips to establish contingency fees

Now that the basics of law firm contingency fees are covered, it’s time to go over the five best tips for determining your law firm’s contingency.

#1 Ask your network

Unfortunately, there are no hard and fast rules on contingency fee percentages in the legal industry. Books and statutes will give a lot of vague information but no straight answers on what’s reasonable for you and your clients. Because of this, it’s helpful to reach out to your colleagues and mentors for advice.

Sure, it can be a little awkward and uncomfortable to ask your peers what their contingency fee percentages are, but it’s one of the few ways to collect accurate data about rates in your area. And if it’s people you’ve worked with for some time, they most likely won’t mind the question. Just be polite, professional, and make sure they know that they only have to answer if they’re comfortable revealing that information.

#2 Discover your state’s rules

Once you’ve gathered examples from your colleagues on their contingency fee percentages, it’s important to verify that information against your state’s rules. This might seem obvious, but many lawyers fail to do so then have to pay for it later. And as an attorney, you know that rules change all the time.

So before you set your own contingency fee, spend some time getting to know the rules and regulations within the state you’re practicing. Be sure to make a note somewhere in your calendar to do an annual check in to see if those rules have changed to avoid falling into any unnecessary ethical traps.

#3 Weigh all the factors

You would think that having your colleagues’ data and your state rules would be enough to determine a reasonable percentage, but they might not.

Every state has a complex set of factors used to determine the reasonableness of client costs in addition to a set of rules about the fee. Get comfortable with these factors and weigh the average percentage from your colleagues against them. Spending some time scrutinizing now will save you a lot of headaches down the road.

#4 Get familiar with other types of contingency fees

That’s right—there’s more than just the standard type of contingency fee. Lawyers also have to consider using reverse contingency fees and hybrid fee arrangements.

In reverse contingency fees, lawyers are given a percentage based on how much money they saved the client rather than how much money the client was rewarded. For example, if you’re representing a client who is being sued for $1 million, but you negotiated the settlement down to $100,000, then you would be given a percentage of the $900,000 you saved the client.

Reverse contingency fees get tricky because someone can sue for an outrageous amount of cash that is unlikely to be paid in full. So a lawyer may have just negotiated down to a more reasonable rate, not really “saving” any money at all. However, because of the problems that can arise with these cases, they are very uncommon.

Hybrid fee arrangements, on the other hand, are a little more common. They include both a fee that’s based on the lawyer winning the case and the lawyer’s fixed, hourly rate. These arrangements must also hold up to the state’s requirements regarding contingency fees, but the fees are more of a bonus rather than the lawyer’s entire paycheck.

#5 Secure informed consent from clients

No matter how brilliant a lawyer you are and how hard you work to win your clients’ cases, you always run the risk of a client refusing to pay the agreed-upon contingency fee. They can then complain to the state bar. When you’ve done your homework and crafted a reasonable fee, this is unfair. But it happens, and it helps to be prepared for it.

It’s imperative to get informed consent from your client that explains the risk of the case, the likelihood of securing a victory, and the monetary amount that you could be taking home if the case is won. A good statement to use in your Informed Consent Agreement is the following: “the fee is not set by law but is negotiable between attorney and client.” A written and signed agreement protects both you and your client from any surprises at the end of the trial.

Takeaway

As confusing as they are to navigate and understand, contingency fees are standard practice in most law firms. They not only provide a great incentive for lawyers to win cases, but they also give an avenue for those who can’t afford legal help to have it.

© Copyright 2021 PracticePanther
ARTICLE BY Kamron Sanders of PracticePanther
For more articles on the legal industry, visit the NLRLaw Office Management section.

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