Federal Appeals Court Hands Down Important Ruling in Overtime Exemption Lawsuit

A federal appeals court earlier this year handed down an important ruling in an unpaid overtime lawsuit brought by a plaintiff who claims that his employer violated various provisions of federal wage and hour laws, including failure to pay overtime.

With the Fifth Circuit Court of Appeals’ ruling, employers will no longer be able to satisfy the salary basis component required to qualify an employee as overtime-exempt under federal wage and hour laws.

According to the unpaid overtime lawsuit, filed in U.S. District Court for the Southern District of Texas, the defendant Helix Energy Solutions Group violated the Fair Labor Standards Act (FLSA) when the company failed to pay the plaintiff his premium overtime wages.

Under the FLSA, employers must pay overtime-eligible workers premium overtime wages calculated at one and a half times their average hourly rate of pay for the time spent working past the 40-hour per workweek overtime threshold.

The plaintiff’s lawsuit claimed that he was improperly classified as overtime exempt when Helix Energy Solutions paid him a flat daily rate, regardless of the number of hours he put into his job each week.

The plaintiff claimed that he regularly worked more than 40 hours in a week on an oil rig but was not compensated with any additional premium overtime pay.

Helix Energy Solutions claimed that the company satisfied the salary requirements for the plaintiff to be overtime exempt when they paid him a daily salary because his weekly pay was greater than the minimum required under the FLSA.

While the trial court agreed with the defendant and dismissed the plaintiff’s case, the Fifth Circuit Court of Appeals rejected Helix Energy Solutions’ argument on appeal that it satisfied the criteria to classify the plaintiff as an independent contractor.

By ruling in favor of the plaintiff, the Fifth Circuit Court of Appeals, which covers Louisiana, Mississippi, and Texas, now brings its interpretation in line with the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee.

Sources:


Buckfire & Buckfire, P.C. 2020
For more articles on employment litigation, visit the National Law Review Labor & Employment section.

COVID-19: FCA and PRA Updates on Working from Home and Key Workers

On September 24, the UK Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) updated their respective statements, originally published in March, regarding key workers and working from home during the COVID-19 pandemic. Both the FCA and PRA advised firms to follow government advice on remote working until notified otherwise.

In addition, the FCA further updated its statement in respect of work-related travel and the responsibilities of senior managers under the Senior Managers and Certification Regime (SM&CR), explaining that:

  • firms should continue to discuss working arrangements with staff and support their employees in facilitating appropriate working arrangements; and
  • senior managers are expected to take account of changes in the applicability of local and national lockdown restrictions and to review and update employee working arrangements on a continuing basis.

A key financial worker is one who fulfills a role that is necessary for a firm to continue to provide essential daily financial services to consumers or to ensure the continued functioning of markets. Firms should identify a key worker by determining which activities, services or operations, of which, if interrupted, are likely to lead to the disruption of essential services to the real economy or financial stability.

Individuals essential to support functions so identified are that firm’s key financial workers. Firms should also identify any critical outsource partners who are essential to continued provision of services, even where these are not financial services firms.

The FCA also suggests that firms consider issuing a letter to all individuals they identify as key workers. The FCA recommends that the letter includes a notice, expressly stating “the individual has been designated as a key worker in relation to their employment by [firm name]” and is signed by someone with appropriate authority.

The FCA update on remote working is available here.


©2020 Katten Muchin Rosenman LLP
For more articles on employment, visit the National Law Review Labor & Employment section.

Privacy Tip #253 – Unemployment Fraud Claims Are Skyrocketing—What to Do if You Are a Victim?

I have received many questions this week on what to do if you are the victim of a fraudulent unemployment claim. It is unbelievable how many people I know who have become victims—yes—including myself.

It is disturbing that all of these fraudulent unemployment claims include the use of our full Social Security numbers. The other disturbing fact is that even if we have a security fraud alert or freeze on our credit accounts, those security freeze or fraud alerts don’t necessarily alert us in the event that a fraudulent unemployment claim is filed in our name.

The Federal Trade Commission (FTC) has recognized this rampant problem and issued tips this week to provide assistance to consumers who have been victimized by these fraudulent unemployment claim scams. The tips can be accessed here.


Copyright © 2020 Robinson & Cole LLP. All rights reserved.
For more articles on privacy, visit the National Law Review Communications, Media & Internet section.

New Legal Duty for Employers and Employees Regarding Self-Isolation in England Comes Into Force

The UK Government has enacted The Health Protection (The Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, which came into force in England on 28 September 2020. Failure to comply with these regulations is a criminal offence, the penalty for which includes a fine of £1,000 for a first offence, with fines increasing up to £10,000 for subsequent breaches.

The new regulations place a legal requirement on employers and employees regarding the enforcement of self-isolation for individuals in England who test positive for coronavirus, or who have been identified as close contacts of someone who has tested positive for the virus. An employee who has been instructed to self-isolate must inform his or her employer (or agency, if the worker is an agency worker) of the obligation to self-isolate as soon as practicable. Failure to do this will amount to a criminal offence.

Once an employer is aware of an employee who has tested positive, it must not permit the employee to attend any place of work other than the place where the employee is self-isolating. (This does not apply if an employee is working from home.) Agencies must notify hirers of workers’ obligations to self-isolate.

An employee who is notified of the requirement to self-isolate whilst at the work premises must return home immediately as the period of self-isolation has commenced directly.

Valid forms of notification of the requirement to self-isolate are not specified in the regulations. The only form of notification that the regulations specifically exclude is the National Health Service’s (NHS) COVID-19 smartphone contact tracing app. Other than this, the regulations merely state that if an individual is notified that he or she—or someone with whom he or she has had recent close contact—has tested positive for coronavirus, the individual must self-isolate (usually for up to 14 days) in accordance with the regulations.

Additionally, the regulations do not specify how the employee should inform his or her employer of the obligation to self-isolate. A commonsense approach may be adopted and employers might need to accept that self-isolation could largely be self-certified, much like regular short-term sickness.


© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

For more articles on labor law, visit the National Law Review Labor & Employment section.

ABA Encourages Attorneys and Law Students to Volunteer as Poll Workers

The stakes are high for the 2020 Election.  The nation is deeply divided politically, and a global pandemic is upending daily life. At this time of unrest, a smooth and efficient election process is crucial.  The ABA (American Bar Association) is encouraging lawyers and law students to volunteer as poll workers to perform an important civic duty during a difficult time.

The ABA, though the Standing Commission on Election Law, is working with the National Association of Secretaries of State (NASS) and the National Association of State Election Directors (NASED) to encourage attorneys and law students to volunteer as poll workers.  Patricia Lee Refo, President of the ABA:

 “Long wait lines at polling places or unexpected delays in getting election results counted can add to a distrust of the system . . .We hope lawyers and law students step up to help make this election run smoothly and efficiently.  I have volunteered as a poll worker here in Phoenix, and I hope this initiative inspires others to join me.”

COVID-19 Creates Adds Challenges to Poll-Worker Recruitment

Sylvia Albert Director of Voting and Elections at Common Cause, a watch-dog group focused on ensuring access to the vote and election integrity, points out that poll-workers are usually in short supply. Albert describes the problem of the shortage of poll workers this year as  “exponentially larger.”

Law students and younger attorneys may have an increased role this year. Poll workers in the United States are generally older Americans.  In 2018, 58% of poll workers were 61 or older, according to the Election Assistance Commission, and over 25% are 71 or older. Even without underlying medical conditions, this is an age group that has an increased vulnerability to the Coronavirus.  Many in this age group are choosing to sit 2020 out due to concerns about their health and coming into contact with a large number of people at a polling location, and younger poll workers can help undercut a shortage.  To this end, the ABA Young Lawyers Division and the Law Student Division have joined the initiative.  This could provide many younger attorneys and law students with the opportunity to provide an important civic service and ensure a smooth, efficient election experience for voters.

Law Firm Involvement and Election Day Time Off

Many big law firms are providing a paid day off for their employees and attorneys on election day. Mintz, Jenner & BlockHogan Lovells and many more firms have announced plans to make election day a paid holiday to encourage employee voting and volunteering in election-related activities.   Fenwick & West indicated their voting push will include “volunteer and community service opportunities for people to engage in nonpartisan election activities—including get-out-the-vote letter-writing campaigns, hosting and staffing an Election Protection call center, poll monitor training and support, and supporting nonpartisan organizations working for voter protection, registration and outreach.”

The ABA’s Push for Attorneys as Poll-Workers

To encourage the effort, the ABA has released a video (watch it below) which details the sign-up process.  Additionally, a social media campaign on Twitter, Linkedin and Facebook with the hashtag #PollworkerEsq encourages lawyers and law students to volunteer.  Work may include staffing polling places, opening ballot envelopes, comparing signatures and helping election officials tabulate the results.  The requirements and work vary across the country, as elections are managed by local entities, but attorneys and law students may be particularly suited to the work. Additionally, in some instances, poll worker training for lawyers may be eligible for CLE (Continuing Legal Education) Credit.

With all the uncertainty and confusion surrounding the election process, especially with the challenges created by COVID-19, this year is an election like no other in recent memory.  Regardless of the political fights playing out, the ability to cast a vote is a crucial piece, and it is important for everyone.  Refo says, “there is no question that maintaining the integrity and efficiency of our electoral process is important to all lawyers.”

Those interested can go to canivote.org, a website set up by the National Association of Secretaries of State, for more information.  The importance of voting and active bipartisan civic engagement is crucial to a healthy democracy, so if volunteering as a Poll-worker isn’t an option, it’s important to check your voter registration and make sure you have a voting plan in place.  As Thomas Jefferson said, “We do not have government by the majority. We have government by the majority who participate.”


Copyright ©2020 National Law Forum, LLC

For more articles on election law, visit the National Law Review Election Law / Legislative News section.

What is the Pregnant Workers Fairness Act and What Happens if it Becomes Law?

The House of Representatives passed the Pregnant Workers Fairness Act (PWFA) (H.R. 2694), which could have major implications for companies around the country. If enacted, the PWFA would require most employers to provide reasonable accommodations for pregnant employees along the lines of what is required for disabled employees under the Americans with Disabilities Act.

According to the House Committee on Education and Labor’s research, 62% of workers have witnessed pregnancy discrimination on the job, which can take the form of “losing a job, being denied reasonable accommodation, or not being hired in the first place.” This discrimination can be particularly damaging to Black and Latina employees, “who are overrepresented in low-wage, physically demanding jobs,” a harsh reality that is intensified during the COVID-19 pandemic given that pregnant women “who contract the virus are more likely than non-pregnant women to be hospitalized.”

While federal laws, including the Pregnancy Discrimination Act and the American with Disabilities Act, protect pregnant employees against certain forms of discrimination, the House passed the PWFA because “there is currently no federal law that explicitly and affirmatively guarantees all pregnant workers the right to a reasonable accommodation so they can continue working without jeopardizing their pregnancy.”

If it becomes law, the PWFA will provide that:

  • Private sector employers with more than 15 employees, as well as public sector employers, must make reasonable accommodations for pregnant workers and job applicants so long as the accommodation does not impose an undue hardship on the employer;
  • Pregnant employees cannot be retaliated against for requesting a reasonable accommodation and cannot be denied employment opportunities, or be required to take leave if another reasonable accommodation is available; and
  • the remedies available would include lost pay, compensatory damages, and attorneys’ fees

Hundreds of organizations, including the business community, civil rights groups, and employment/labor advocacy organizations have endorsed the PWFA. Next stop is the Senate, where the bill has been referred to the Committee on Health, Education, Labor, and Pensions. The intersection between pregnancy and disability discrimination, including the reasonable accommodations for employees that may be available, will continue to be a key employment law area to watch.


© 2020 Zuckerman Law
For more articles on labor law, visit the National Law Review Labor & Employment section.

Justice Ginsberg’s Multi-Generational Impact

I knew Justice Ginsburg had been seriously ill, so I shouldn’t have been surprised when I heard the news of her passing. But it was still a big shock, and tears started falling. I thought to myself, “I don’t even personally know her—why am I crying?” It was because of all that she represented. She was truly inspirational. She had a tough life—losing her mother at a young age and trying to get her foot in the door and succeed in a male-dominated profession, not to mention numerous serious health issues. Yet she persevered, and she became a “first” in so many ways, even in death—being the first woman and first Jewish American to lie in state at the U.S. Capitol.

Reading about her life has been fascinating, but two parts I especially enjoyed were her sense of humor and her friendship with the late Justice Antonin Scalia. The two justices were on opposite ends of the law but close friends. I love the picture of the two of them in India on an elephant. She was behind him, and when asked why she, an advocate of women’s rights, would agree to sit behind a man, she explained that it was for weight distribution purposes! It also just goes to show that you can be on polar opposite ends of important and often contentious issues, but still be respectful and mindful of others and their opinions.

Justice Ginsburg’s cachet was appealing to multiple generations—young, old, and everyone in between. I was surprised that even my 17-year-old twins knew of her and something about her life even if only because of “Notorious RBG” mania! That’s something special that not many public personas are able to achieve. She fought for equality and opened doors for the rest of us so that we could also succeed in professions previously dominated by men. Not only have I managed to succeed as an attorney and working mother because women like Ruth Bader Ginsburg paved the way, but I know that my daughter will have fewer challenges as a result. For that, I am so grateful to Justice Ginsburg, and she will be missed so very much.


©2020 Epstein Becker & Green, P.C. All rights reserved.
For more articles on RBG, visit the National Law Review Litigation / Trial Practice section.

President Trump Nominates Amy Coney Barrett to U.S. Supreme Court

In the wake of Justice Ruth Bader Ginsburg’s death, President Donald Trump has nominated the Honorable Amy Coney Barrett, who sits on the federal U.S. Court of Appeals for the Seventh Circuit, to the U.S. Supreme Court. A conservative jurist and self-described “originalist” and “textualist,” Barrett previously clerked for the late-Justice Antonin Scalia of the U.S. Supreme Court.

Barrett was widely considered to be a leading candidate to succeed Justice Scalia in 2018, but the nomination ultimately went to Justice Brett Kavanaugh. Her name quickly resurfaced as a top contender for Trump’s third Supreme Court appointment.

President Trump announced the selection on September 26, 2020. The Republican-majority Senate is expected to move quickly to a confirmation vote. If confirmed by the Senate, Judge Barrett will be one of the youngest Justice to ever sit on the Supreme Court.

Barrett’s Career

A deeply religious conservative, Barrett attended St. Mary’s Dominican High School, an all-girls Catholic school in New Orleans, before receiving a B.A., magna cum laude, from Rhodes College in 1994 and her J.D., summa cum laude, from Notre Dame Law School in 1997. She went on to clerk for Judge Laurence H. Silberman of the U.S. Court of Appeals for the District of Columbia Circuit from 1997 to 1998, and for the late-Justice Scalia of the U.S. Supreme Court from 1998 to 1999.

After her clerkships, Barrett worked briefly in private practice at Miller Cassidy Larroca & Lewin in Washington, D.C., from 1999 to 2001. She then taught successively at George Washington University Law School, Notre Dame Law School, and University of Virginia Law School.

President Trump nominated Barrett to the Seventh Circuit on May 8, 2017, and she was confirmed by the Senate on October 31, 2017. The 55-43 Senate vote fell largely along party lines with three Democrats voting to confirm Barrett and two not voting.

Barrett has been prolific in her short tenure at the Seventh Circuit, issuing nearly 100 written opinions. Her numerous employment law opinions provide a solid roadmap to how a Justice Barrett likely would address these matters on the high court. Combined, the decisions reflect a nuanced approach to workplace law, shaped less by dogma than by the text of the relevant employment law statutes.

Employment Law Decisions

Arbitration and Class Actions

Class action waivers contained in arbitration agreements governed by the Federal Arbitration Act (FAA) have been a focus of several Supreme Court decisions in recent years. The decisions affirmed by the high court have focused on the right of parties to enter into contracts that provide for individual arbitration of disputes.

A related question has been the subject of much litigation in the lower courts: Who can decide whether the parties, through their arbitration agreements, have consented to class or collective arbitration? Judge Barrett contributed to the growing body of case law on this question, which was a matter of first impression for the Seventh Circuit, by authoring the opinion in Herrington v. Waterstone Mortgage Corp., No. 17-3609 (Oct. 22, 2018), which held that a court, not an arbitrator, must decide.

In Herrington, the district court had invalidated a class waiver in the parties’ arbitration agreement and then ordered the employees to arbitrate. The arbitrator conducted a collective arbitration over the employer’s objections and issued a $10 million award to the employees. Writing for the appeals court, however, Judge Barrett stated the district court erred in striking the class waiver, noting that the Supreme Court had upheld the validity of such provisions in its landmark decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), and held the court must conduct the threshold inquiry of whether the arbitration agreement authorized class arbitration as this question involves a foundational question of arbitrability. In arriving at this opinion, Judge Barrett explained that this threshold question is of great importance as it could sacrifice the advantages of arbitration.

Judge Barrett’s opinion on a court’s ability to determine significant threshold questions of arbitrability may affect another key issue in arbitration that is winding its way through the federal courts: whether delivery drivers, including drivers in the expanding “gig” economy, fall under the narrow “transportation worker” exception or exemption in Section 1 of the FAA. If the exception is held to apply, drivers cannot be compelled to arbitrate disputes with their employer and would be entitled to pursue their class or collective claims in court. Judge Barrett’s opinion in Wallace v. Grubhub Holdings, Inc., Nos. 19-1564 & 19-2156 (Aug. 4, 2020), held that the transportation worker exception did not apply to drivers who make local food deliveries from restaurants to homes and thus they could be compelled to arbitrate their claims. To determine whether the exception applies, Judge Barrett explained that “transportation workers” are those who are “actually engaged in the movement of goods in interstate commerce,” which is determined by whether the interstate movement of goods is a central part of the drivers’ job description. While the Grubhub drivers argued they carried goods that had moved across state lines, Judge Barrett explained that this was insufficient to bring these drivers into the Section 1 exception, which must be “afforded a narrow construction.”

Both the First and Ninth Circuits have also ruled on the transportation worker exception in recent months; the First Circuit held the exception applied thereby foreclosing arbitration, while the Ninth Circuit found it inapplicable, allowing arbitration. Given the growing significance of the gig economy and the circuit split on a key issue arising under the FAA, the Supreme Court may soon take up the question, where Judge Barrett may apply her reasoning in Grubhub to any decision.

Employment Discrimination

Judge Barrett’s decisions in cases alleging discrimination reflect a restrained approach to statutory interpretation, a careful adherence to procedural rules, and a straightforward application of law to facts. The result has been a fairly balanced win rate for employers and employees. For example, her opinion in Smith v. Rosebud Farm, Inc., No. 17-2626 (Aug. 2, 2018), held that a reasonable jury could find a male employee was sexually harassed by male coworkers based on sex, given the “ample” evidence that only male employees, and not female employees, had been subjected to the harassing conduct.

In Vega v. Chicago Park District, Nos. 19-1926 & 19-1939 (Apr. 7, 2020) (one of Judge Barrett’s lengthier opinions, at 21 pages), the Seventh Circuit upheld a jury verdict in favor of a Hispanic park district employee on her Title VII claim for national origin discrimination. Judge Barrett rejected the park district’s contention that there was insufficient circumstantial evidence for the jury to find for the employee on her Title VII claim.” Judge Barrett wrote, “What matters is whether she presented enough evidence to allow the jury to find in her favor—and she did.” Judge Barrett wrote in similarly lenient terms about an employee’s burden to establish causation with respect to claims under Title VII of the Civil Rights Act. She explained that a plaintiff “has ‘plenty of room’ to convince the jury that a causal link exists,” and that the employee did so here. She emphasized, however, that the standard for proving a “widespread custom” of discrimination under Section 1983, is a good deal higher, and dismissed the Section 1983 claim as the employee did not meet this higher burden.

In Judge Barrett’s opinion in Purtue v. Wisconsin Department of Corrections, No. 19-2706 (June 26, 2020), the Seventh Circuit affirmed a district court ruling dismissing the discrimination claims by a corrections employee who was fired after she falsely claimed that a prisoner had struck her with an empty snack-cake box he had thrown from his cell. Again, Judge Barrett stressed that employees have numerous avenues to make their case. The familiar McDonnell Douglas burden-shifting approach is not the only way to establish a discrimination claim, she wrote, and an employee may have other available evidence to establish intentional discrimination. No such evidence existed in this case, Judge Barrett ultimately concluded, and no reasonable jury would find that the employee was subjected to gender discrimination.

Religion and LGBTQ Rights

When President Trump first floated Barrett’s name as a candidate to fill the seat vacated by Justice Scalia, her opponents feared that her conservative Catholicism would unduly shape her views on abortion and LGBTQ rights. In response, Republican leaders accused Democrats of applying a religious test to her nomination, which Article VI of the U.S. Constitution forbids. During her confirmation hearing before the Senate Judiciary Committee for her Seventh Circuit nomination, Barrett was questioned directly about how her personal religious convictions would affect her impartiality as a judge. Barrett confirmed her deeply held religious beliefs, but assured the Committee that she would separate her personal beliefs from her jurist role. Nonetheless, she quickly drew opposition from a broad coalition of LGBTQ rights organizations.

In its decision in Bostock v. Clayton County, Georgia, 140 S. Ct. 1731 (2020), the Supreme Court held that Title VII’s proscription against sex discrimination in employment was applicable to discrimination based on sexual orientation and transgender status. The landmark holding was heralded as a significant advancement for LGBTQ rights. Still, Bostock was a divided decision, and other cases (such as under Title IX of the Education Amendments Act, restroom and locker room usage, Affordable Care Act, and sex segregation) are likely to land before the Supreme Court to round out the jurisprudence in this area. In addition, Bostock left open the issue of religious exemptions, religious and religious-affiliated employers. Given Barrett’s deeply held Catholic beliefs and her commitment to a textualist interpretation of the law, her presence on the Court will be impactful in securing a conservative majority on these issues.

Judge Barrett is expected to favor a broad interpretation of the First Amendment’s religious freedom guarantees, to staunchly uphold protections from employment discrimination based on religion, and to safeguard the rights of religiously affiliated employers to hire and fire free from government interference. The Supreme Court has significantly expanded the scope of the ministerial exception in Our Lady of Guadalupe School v. Morrissey-Berru, 140 S.Ct. 2049 (2020). What remains to be seen is just how expansive this exception may be, such that it becomes the majority rule in cases involving religious affiliated employers. Will it continue to expand on the fourth factor in the Hosanna case — whether the employee’s job duties included “important religious functions” and not apply the remaining three factors with the emphasis on the job title of “minister”? To what extent could the exception be cited by some employers as a defense to discrimination claims brought by LGBTQ employees? Given Justice Barrett’s religious beliefs, she is expected to play a pivotal role in limiting the reach of Bostock and broadening the scope of religious-based protections.

Employee Benefits

The survival of the Affordable Care Act (ACA) is one of the largest issues teed up at the Supreme Court in the coming term. California v. Texas (No. 19-840), cons. with Texas v. California (No. 19-1019), the latest ACA challenge pending at the Court, is scheduled for oral argument on November 10. At issue is the ability of the ACA itself to survive after lower court rulings that the individual mandate portion of the ACA is unconstitutional following the elimination of any penalty associated with a failure of individuals to maintain minimum essential coverage. Judge Barrett has publicly criticized the ACA, as well as the high court’s 2012 decision upholding the law’s constitutionality. Were Barrett to be seated before November 10, she will likely participate in a highly divided decision that could invalidate much, if not all, of the ACA and lead to a complex reaction in the nation’s healthcare system, including significant impacts for employer-sponsored group health plans.

Confirmation Battle Looms

The latest political indicators, however, suggest that absent extraordinary circumstances, President Trump has the votes to confirm Judge Barrett swiftly.

Regardless of how Judge Barrett’s nomination fares, or whether President Trump will secure four more years to nominate judges, he will have left an indelible mark on the federal judiciary, including the nation’s highest court impacting every aspect of workplace law.


Jackson Lewis P.C. © 2020
For more articles on litigation, visit the National Law Review Litigation / Trial Practice section.

The Death of RBG…and the ACA?

The death of Supreme Court Justice Ruth Bader Ginsburg, and alongside it the high probability of a conservative successor to the open seat she left behind, is likely to shift the Court substantially to the right. Among the most notable cases that will likely be presented before the newly constituted Court is the pending challenge to the Affordable Care Act (the “ACA”).

We have previously examined the case history of Texas v. the United States (the “Case”), from the initial district court opinion, to its appeal to the Fifth Circuit, the Department of Justice’s brief in support of eliminating the ACA through this case, and the final decision from the Fifth Circuit, which can be seen here and here.

With Justice Ginsburg on the Court, stakeholders anticipated that the ACA would likely survive. While there was a conservative majority on the Court, consisting of Chief Justice Roberts, and Justices Alito, Gorsuch, Thomas and Kavanaugh, Chief Justice Roberts has consistently come to the ACA’s rescue. With Justice Ginsburg gone, the outlook seems a bit different.

By way of background, under the District Court ruling the judge determined that the ACA’s individual mandate, which was reduced to $0 as a result of the Tax Cuts and Jobs Act of 2017, was no longer considered a tax – meaning Congress no longer had the authority to enforce it. The District Court then held the individual mandate inseverable from the ACA, such that the whole law was unconstitutional. In a controversial turn of events, the Fifth Circuit, while upholding the unenforceability of the individual mandate, remanded the case back to the same District Court judge without ruling on the severability of the mandate. Now the time has come for the Supreme Court to take up the question of the ACA’s continuing viability.

Currently, the Supreme Court is set to hear arguments for the Case after elections, on November 10th. There are a few scenarios that may play out here. First, if no replacement is sworn in by that time to hear this case, there is a chance that one of the conservative justices, most likely Chief Justice Roberts, joins the liberals in their support of the ACA – resulting in a 4-4 deadlock that keeps the Fifth Circuit’s decision as is. There is a chance that the law will then continue on through the judicial process and eventually make its way back up to the Supreme Court. On the other hand, if the conservative justices band together on their decision, or if a conservative justice is appointed by then, it could very well be the end of the ACA as we know it. There’s a third option – Justice Kavanaugh has previously privately indicated that he may not support the argument that the mandate is inseverable, suggesting that holding one piece of the ACA invalid may not invalidate the ACA in its entirety.  A chance remains that more than one conservative will break ranks and prevent the entirety of the ACA from being held unconstitutional. The most likely outcome, however, appears that the Fifth Circuit decision will be upheld in a 5-4 decision, with Justice Roberts siding with the Court’s liberal wing against a 5 Justice conservative majority.

Top Contenders

Of course, the outcome also depends on the potential new conservative pick’s view on the ACA and particularly whether the nominee falls more in the Justice Roberts camp or aligns more fully with Court’s more conservative majority.

A top contender is Judge Amy Coney Barett, who has been particularly vocal in her criticisms of elements of the ACA. For one, she has previously signed a petition against the ACA’s mandate for employers to provide birth control access through their insurance plans, arguing it infringed on religious freedom. For another, she has previously written an article against the 2012 Supreme Court ruling that upheld the ability for Congress to enforce the requirement that Americans obtain health insurance or then face the tax penalty. Her rationale was that this was not a tax, and thus the statute should have been invalidated as it fell outside of Congress’ power to enforce. In this article, she was particularly critical of Chief Justice Roberts and what she noted as a “deference to democratic majorities.” Given Judge Barett’s history in speaking out against the ACA, and in particular against Chief Justice Roberts’ decisions in this arena, as well her previous willingness to see the ACA invalidated as a whole, it seems particularly likely that if chosen she will vote to uphold the Fifth Circuit’s decision.

Barbara Lagoa, another candidate at the top of the list, has been far less vocal about her stance on the ACA. However, she has previously referred to Roe v. Wade as “settled law” and “binding precedent of the Supreme Court.” Given this precedent, there’s a chance she may be more likely to break ranks with the conservative majority. Moreover, she was confirmed by the Senate in a bipartisan vote with a far less narrow margin than Judge Barett, making her an attractive choice to put forward.

Other Options?

On the other hand, if Vice President Biden wins the election in November and Democrats are able to take control of both houses of Congress, he would be able to simply replace the ACA with a new law that meets the legal challenges the ACA is currently facing (although to achieve this objective in the Senate, the budget reconciliation process would likely need to be utilized or, in the alternative, the filibuster eliminated, which would be a highly controversial move). If this were to happen, the new law could be more extensive than the ACA in its current form (e.g., by including a public option).

The idea of eliminating the filibuster in the Senate and expanding the size of the Supreme Court has been a subject of recent discussion in Democratic circles, and if such were to occur it would be reasonable to assume that President Biden and a Democratic Senate would likely fill the newly created seats with Justices sympathetic to the ACA and other Democratic causes.  However, this outcome seems unlikely given the current political environment and various on-the-record statements of stakeholders who would have to drive this process.

The Future 

As we have speculated in prior analyses of the Case, the impact of the ACA’s repeal or invalidation would be sure to be great. Not only would there be a massive loss in coverage by tens of millions of Americans, but absent a legislative fix, the ACA’s protections for those with pre-existing conditions would could find insurance difficult or impossible to procure,and children between the ages of 18 – 26 would no longer be able to remain on their parents insurance. We will monitor and provide updates as they come.


Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.
For more articles on the ACA, visit the National Law Review Health Law & Managed Care section.

Is A Corporation’s Address A Trade Secret?

“Cryptocurrency” is a hybrid word form from the Greek adjective, κρυπτός, meaning hidden, and the Latin participle, currens, mean running or flowing.  The word “currency” is also derived from currens, perhaps based on the idea that money flows from one person to the next in an economy.  Literally, cryptocurrency, is secret money.  But there are secrets and there a secrets.

Recently, a cryptocurrency exchange sued one of its employees for violating the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1831-39.  Among other things, the company alleged that the erstwhile employee had disclosed the “physical address” of the company in a complaint filed in a state court action.  Until now, I had never considered that a company’s physical address might be a secret.  The company argued that “keeping its physical address secret serves to protect it from ‘physical security threats,’ providing as an example of such threats ‘a recent spate of kidnappings’ of persons who work for cryptocurrency exchanges”.  Payward, Inc. v. Runyon, U.S. Dist.

Judge Maxine M. Chesney ruled for the defendant, finding that the plaintiff had failed to allege how its competitors would gain an economic advantage by knowing the company’s address.  Accordingly, Judge Chesney found that the plaintiff had not pled that the address met the definition of a trade secret under the DTSA.

I was somewhat nonplussed by the idea of an office address being a secret (trade or otherwise).  After all, the plaintiff, a Delaware corporation, had filed a Statement of Information with the California Secretary of State disclosing the address of its principal executive office (which is the same as its principal executive office in California).  That filing is a readily accessible public record.  It may be, however, that the address disclosed by the defendant was for another location not disclosed in the Statement of Information.

Etymologists use the term “hybrid word” to refer to a word that is formed by the combination of words from two different languages.  Greek-Latin hybrids are the most common form of hybrids in English.  English does have hybrids formed from other languages.  For example, “chocoholic” is a hybrid formed from New and Old World languages – Nahuatl, xocolatl, and Arabic, اَلْكُحُول (al-kuḥūl).  


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