Legal Industry News from the National Law Review: Law Firm Hires, Attorney Accolades and Recognition and Innovation

As we move into fall, the National Law Review’s editorial team takes a look at the constantly evolving legal industry landscape—paying special attention to law firm hires, attorney awards and law firm innovation.

Law Firm Moves & Hires

Securities  attorney Paul McCurdy joined Katten’s Financial Markets and Funds group as a Partner in New York. Before joining Katten, McCurdy led the broker-dealer regulatory practice for over 20 years at his previous firm, and  he also previously served as an executive committee member and as the firm’s chairman.

In his practice, McCurdy represents investment banking, retail, clearing and direct broker-dealers and advisory firms in regulatory and enforcement matters. He has defended witnesses in over 200 interviews before the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Department of Justice.

“Katten is a solid leader in the financial services industry, well-known as a one-stop resource with a deep bench of talent and some of the most experienced litigation and regulatory enforcement attorneys there are,” McCurdy said.

Arent Fox law firm added Partner John Zaimes and Counsel Roxanne Wilson to its Labor and Employmentpractice in Los Angeles. The pair worked together at Mayer Brown before joining Arent Fox.

“John and Roxanne join our national team at an extremely opportune time,” said Michael L. Stevens, labor & employment practice leader. “Since the start of the year, our clients have increasingly sought our counsel as the COVID-19 pandemic has forced them to shift their business and employment strategies and operations. Now, we’re starting to see a growing number of disputes with employees on a variety of fronts and adding John and Roxanne will strengthen our support for clients in California and across the country.”

Wilson focuses her practice on advising clients on employment-related class actionsregarding drug and alcohol policies, sick leave, employment application and wage and hour issues.

Zaimes advises clients on non-compete agreements, employee non-solicitation agreements, and the protection of trade secrets, and defends clients in actions under the Fair Labor Standards Act and Telephone Consumer Protection Act.

Grant Schneider joined the Washington, D.C. office of Venable as the senior director of cybersecurity services. Previously, Schneider was the federal chief information security officer for the White House Office of Management and Budget. He also served as the senior director for cybersecurity policy on the White House National Security Council.

During his time working for the federal government, Scheider oversaw the review of the government’s cybersecurity enterprise and worked with Congress on the SECURE Technology Act which established the Federal Acquisition Security Council.

“Grant joins us from a distinguished career in the federal government, where he led numerous initiatives that were pivotal to managing risk and enhancing our national cybersecurity, not least of which was his recent work on supply chain security, encryption, and identity management. We look forward to welcoming him to our team and leveraging this experience in service to our clients,” said Ari Schwartz, managing director of cybersecurity services at the firm.

Schneider also worked as the senior director for cybersecurity policy for the National Security Council, helping gain presidential approval for the first National Cyber Strategy in more than 15 years.

“Venable presented the rare opportunity to work with some of the nation’s leading minds in shaping the future of cybersecurity from within the private sector. I have spent my nearly 28 years of government service implementing innovative programs and policies on a national scale and am eager to stretch these muscles in new ways to advance the cybersecurity goals of the firm’s clients,” Schneider said.

Marc Boiron and Rebecca Rettig joined Manatt law firm as partners in the firm’s financial services group and fintech practice. Boiron will be based out of the firm’s Los Angeles office and Rettig is joining the firm’s New York office.

Boiron, a leading corporate lawyer and blockchain and virtual currency advisor, has experience guiding clients through issues such as token distributions, regulatory compliance and financings. Boiron is admitted in California and Delaware and advises companies on governance and corporate issues.

Rettig was recognized as one of the top 100 women lawyers in New York City by Crain’s New York Business, and represents blockchain and virtual currency companies in litigation and private arbitrations. She works with Fortune 100 companies on securities, shareholder derivative and contract disputes.

“We were really drawn to Manatt due to its groundbreaking approach to client services, which blends legal and business advisory services, as well as its bench of nationally recognized lawyers, consultants and technologists,” said Boiron. “We believe that the firm’s hybridized platform and collaborative culture will resonate with and be an invaluable resource for our clients as they prepare to tackle any challenge they may face in today’s new, and unprecedented, economy,” Rettig added.

 

Maja Zerjal Fink of Arnold & Porter

Maja Zerjal Fink joined Arnold & Porter’s Bankruptcy and Restructuring practice as a partner in New York City.

Zerjal Fink represents clients in corporate reorganizations and insolvency proceedings, and has been involved in some of the largest reorganization cases in the U.S., including the $74 billion restructuring of Puerto Rico’s outstanding debt load, as well as the $18 billion debt of Caesars Entertainment.

“I am very pleased to welcome Maja to the team. She is a talented lawyer with significant experience in some of the most complex bankruptcy cases and restructuring matters,” said Michael Messersmith, chair of the Bankruptcy and Restructuring group at Arnold & Porter. “Maja’s expertise, energy and business-focused mindset will complement our existing strengths and help our clients navigate the challenging restructuring landscape during this unprecedented time.”

Zerjal Fink was named a Pro Bono Star by Human Rights First and is a 2020 member of the International Insolvency Institute’s NextGen Class IX.

“I am thrilled to be joining Arnold & Porter’s world-class Bankruptcy and Restructuring practice,” Zerjal Fink said. “I look forward to expanding my practice and helping clients achieve their goals with a sophisticated and collegial team of lawyers.”

Jeffrey K. Cassin and Ross J. Switkes joined Norris McLaughlin as Members of the firm.

Cassin will serve as the lead corporate attorney in the firm’s Business Law Practice Group, and Switkes joined the Bankruptcy & Creditors’ Rights Practice Group in the firm’s New Jersey office.

Norris McLaughlin Chairman John N. Vanarthos said the additions of Cassin and Switkes are critical components of the firm’s pandemic strategy.

“To be able to provide services our clients need, in a time of need, is so crucial to us. We are excited to have Jeff bring our already-well-established business group to New York, and to have Ross as an essential member of our bankruptcy group is truly a testament to our firm’s commitment to client service,” Vanarthos said.

Cassin’s expertise includes representing companies at every stage of the corporate lifecycle, and has led successful acquisitions and divestitures and has closed transactions in restaurant management, media, technology and human capital.

“Norris McLaughlin’s approach throughout the pandemic has been to help clients work through it so they come out stronger on the other end, which is a value that I share. I’m excited to be joining the team,” Cassin said.

Switkes’ practice includes corporate restructuring, and commercial litigation, debtor/creditor rights and corporate restructuring. He currently serves as the Vice-Chair of the Lawyers Advisory Committee for the U.S. Bankruptcy Court, District of New Jersey, and is a Trustee of the Mercer County Bar Association.

“I am excited to join Norris McLaughlin and its Bankruptcy Group. It is a privilege to join such a well-respected team. Not only am I benefitting from having access to the kind of business platform and infrastructure that I need to grow my practice, but my clients will benefit from the opportunity to take advantage of the broader range of high-quality legal services that Norris McLaughlin offers, and they can do so without an interruption in value,” Switkes said.

Attorney Awards and Recognitions

The Utah State Bar Labor & Employment Law Section named Elizabeth “Terry” Dunningof Holland & Hart law firm as a recipient of its 2020 Lifetime Achievement Award.

Dunning graduated from Harvard Law School in 1977 and went on to achieve equity partnerships at two Am Law 200 firms in a career spanning four decades. Dunning is recognized as a top employment law attorney in Utah and nationwide, and she has dedicated her time to educating others in the profession, serving as a mentor to junior women attorneys.

“Terry truly is the whole package—she is smart, hard-working, and devoted to her clients, her colleagues, her community, and to the rule of law,” said Brit Merril, one of the newer members of Holland & Hart’s Employment team and Denning’s mentee. “Terry is an exceptional mentor, a skilled advocate, and the embodiment of civility and professionalism.”

In addition to her legal career, Denning has served in leadership roles on the Board of Trustees for the Presbyterian Church Foundation and the Committee on Mission Responsibility Through Investment for the Presbyterian Church.

The St. Louis Business Journal named Armstrong Teasdale Partner Sarah Sise as one of its Most Influential Business Women for 2020, selecting Sise as one of 24 recipients out of 225 nominations.

Sise is the co-leader of Armstrong Teasdale’s Employee Benefits and Executive Compensation practice and has over 20 years of experience in the field. Sise also serves as co-chair of Armstrong Teasdale’s Inclusion Committee and is involved in the firm’s Women’s Inclusion Network.

Paul Klimos of DLA Piper

DLA Piper announced Paul Klimos, an associate in DLA Piper’s Corporate Practice, was appointed to the Global Future Council on Agile Governance of the World Economic Forum (WEF). Klimos will begin his one-year period of membership on October 1, 2020.  The WEF Global Future Council’s is invitation only, and is comprised of thought leaders from across academia, business, civil society and government, dedicated to innovation and sustainability with an eye to the future.  Klimos’ experience working with emerging technologies and entrepreneurs will inform his time on the WEF Global Future Council.  In his practice, he represents emerging growth companies at all levels, as well as investors.

Nancy S. Shilepsky, partner in Sherin and Lodgen’s Employment Department, has been appointed to a three-year term as Employee Co-chair of the American Bar Association (ABA) Section of Labor and Employment Law’s International Labor and Employment Law Committee. Her term began on September 1, 2020 and will run through the end of August 2023.  In this role, Shilepsky will study and report on foreign labor relations law and employment practices, with an emphasis on US executives and foreign executives working in the US. Shilepsky, along with her role at Sherin & Lodgen, has an internationally recognized reputation in executive employment compensation.  On her role with the ABA, Shilepsky says:

The International Labor and Employment Law Committee has the unique responsibility of staying apprised of legal developments across the world. I’m honored to receive this appointment and look forward to working with members of the Committee to offer the most up-to-date analysis of international employment law.

Nancy is a leading influence in the world of executive advocacy and employment law and litigation and is a Fellow of the College of Labor and Employment Lawyers. She is a champion of the interests of individuals and a trusted counselor to executives, professionals, and partners across a wide range of industries. Nancy has established an internationally recognized reputation representing such clients in complex matters involving executive employment and compensation. She is known for her pioneering efforts in wrongful termination and discrimination cases. Her work includes a high-profile sexual harassment case involving the impact of the First Amendment on workplace speech restrictions and a landmark case dealing with the eradication of race-based discrimination in compensation.

The ABA’s Labor and Employment Law Section is comprised of more than 20,000 members who represent all perspectives of labor and employment law: management, union, plaintiff, neutral, and public. The Section is committed to a balanced discussion of employment issues throughout the world.

Sonny Haynes of Womble Bond Dickinson

Womble Bond Dickinson announced that Sonny Haynes, a partner in the Winston-Salem office, has been named one of the Minority Corporate Counsel Association (MCCA)’s Rising Stars for 2020. Attorneys who are given this honor must have at least eight years of experience in the legal profession, have leadership and achievements that are outstanding and have demonstrated a commitment to community service, pro bono work, and diversity, inclusion and equality.

Haynes fulfills these requirements through her practice focused on insurance defense, product liability and mass tort litigation.  She has been a member of the City of Winston-Salem’s Human Relations Commission since 2013, and she served on the Minorities in the Profession Committee of the North Carolina Bar association.  In her community, Haynes has recently focused on improving communication between community leaders and law enforcement on racial inequalities in the criminal justice system, among other community service efforts.

Law Firm Innovation and Development

“Necessity is the mother of invention,” and the stress and constraints of COVID-19 has inspired many ideas to facilitate the adaptation required by the virus. The Pandemic Technology Resource Center, operated at  PandemicIp.org is a non-profit website with a searchable database of COVID-19 adaption ideas and technology, contributed to the public domain.  The goal of this initiative is to ensure useful adaption ideas are spread quickly, to reduce the spread of COVID-19.  PandemiciP.org is led by Jim Sulciner, a technology entrepreneur for over 30 years and former CEO of RTD Company and the website PandemicIP.org was organized by the intellectual property law firm Schwegman Lundberg & Woessner, P.A. (Schwegman).

PandemicIP.org’s board members Janal Kalis, a partner at Schwegman, and Russell Slifer, a former Deputy Director of the U.S. Patent and Trademark Office, infuse the endeavor with their expertise in patent licensing and commercialization.  This innovative website is a great place for users to search ideas and solutions, so others may benefit from the adaptations and discoveries made necessary by the virus. By sharing work, innovators can stand on each other’s shoulders and make the innovation’s required by these interesting times.

M&T Bank recently announced Nota, a Fintech tool designed to assist attorneys manage their trust accounts from their bank accounts.  The ABA recommends attorneys complete a three-way reconciliation process and balance their books against client ledgers and their bank statement.  Mistakes in this process can be time-consuming and expensive errors can lead to being out of compliance with state requirements and could mean inquiries, audits and possible disbarment. Nota was designed to simplify the trust account management process, creating a seamless and efficient tool for lawyers to adhere to their accounting requirements.  The tool was designed for small law firms and solo attorneys, which may not have extensive staff for accounting procedures.  Paul Garbian, president of Nota, says, “Nota is transforming the way lawyers manage their trust accounts.  We’ve reimagined the process by connecting it directly to the bank accounts and making it more intuitive, so attorneys spend less time managing their trust accounts and more time practicing law.”

We’ll be back with more legal industry news in two weeks.  Thanks for reading!

Copyright ©2020 National Law Forum, LLC

ARTICLE BY Eilene Spear and Rachel Popa of the The National Law Review / The National Law Forum LLC

 

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

The Bad Old Days: Why Nostalgia for In-Office Work Is Misguided

Nearly seven months into the pandemic, with “regular life” a distant memory, it’s understandable that some law leaders are grasping for the Before Times, casting familiar habits and routines in sepia and longing for the time when we can get back to the “good old days.”

This nostalgia seems to be driving a recent flurry of articles by senior law partners about how the loss of in-office work will hobble the next generation of attorneys. Without face-to-face interactions, the argument goes, associates will miss out on vital mentoring from senior partners, as well as the camaraderie and casual elevator banter that builds bonds and a sense of shared mission.

While no one can quibble with the latter (working from home can be lonely and boring — nobody ever asks “so how was your weekend?” when you are standing at the coffee pot in your own kitchen), admitting defeat on mentoring should raise a big red flag for anyone following current challenges in retention and advancement at law firms.

If this framing — a white man who holds institutional power saying “I wish I could mentor, but…” — sounds familiar, that’s because we also heard it at the height of the #metoo scandal. As accusations of abuses of power were coming to light and the perpetrators were, in some cases, being held accountable, other male leaders expressed concern, privately or in public, about mentoring women lawyers. In such a “sensitive environment,” what if something they said or did was misconstrued, and their well-intentioned efforts backfired? Best not to risk it. Best to continue mentoring lawyers who remind them of themselves.

Or maybe you have heard it in the context of racial inclusion, when white male senior partners (we hate to pick on them again, but minority women make up only 3.2% of law firm partners, according to the Institute for Inclusion in the Legal Profession’s 2019-2020 review) profess a sincere desire to mentor lawyers of color, except no lawyer of color has ever asked them for their help.

Now we find ourselves in new circumstances, with physical proximity slotting in as the barrier to mentoring the next generation of attorneys. And while it might seem different on its face, claiming that you can’t mentor someone unless you can interact with them in person during business hours is no less problematic than blaming potential accidental sexual harassment or lack of initiative by lawyers of color. That’s because when offices do begin to re-open, the first associates and junior partners to return will be white men. (Surveys and statistics show that lawyers in other demographic groups will be contending with remote learning, lack of childcare and care for other family members for far longer.) And under a mentoring rubric that views traditional work schedules and practices as essential, white men will continue to reap the benefits of the access to power and client contacts and high-profile assignments that they have always enjoyed.

Wash, rinse; repeat.

This problem with equity in training and development is completely predictable. (We are predicting it right now, and so are lots of other people.) Law firms have proved themselves to be extremely adept at solving all kinds of complex predictable problems, so this one should be no different. Of course law leaders acting in good faith can create new systems to sustain mentoring in this extraordinary time, and ensure that mentoring includes all attorneys, regardless of gender and race. (Whether they actually want to is a different question, but also an irrelevant one, since unprecedented focus and pressure on firms to become more inclusive workplaces means it’s not up to them anymore.) Here are some first steps to making it happen:

Get over your nostalgia. We all miss social interaction with colleagues, and lawyers maybe most of all, given that their jobs play such a large role in their identities. But be careful not to conflate conventions with business imperatives. The legal industry has experienced many other big changes that at the time seemed to threaten core aspects of the work process. (“How will we function without fax machines?!”) But then attorneys who were flexible and creative adapted, and law firms survived and found new ways to thrive. When client service is your core value, you find all kinds of novel ways to accomplish it, including by ensuring the critical development of powerhouse diverse teams who can meet client needs.

Acknowledge that the old mentoring system was already broken. It worked for some lawyers, but not for everyone, and in 2020 it is unacceptable to pretend like that’s not true. Mentorship and, even more important, active sponsorship, doesn’t happen “naturally” — it results from systems designed to yield those outcomes. Brokering a client relationship with a junior partner on the golf course at your all-white country club is the result of a system too, even if it simply feels to the participants like the way things have “always worked.” What would a mentoring system that includes women and lawyers of color look like? How would it be built? How could it be conducted remotely, and does remote work actually present some opportunities for equity that are not present in person at the office? When we stop revering the old ways of doing things, we open up space to think big and create something new. That should feel exciting, not limiting.

Get worried about the right things. All snark aside, law leaders should be concerned about how the pandemic will impact the careers of the next generation of lawyers. It is definitely harder to mentor from a distance, but an insistence on in-person connections will only (and very predictably) lead to inequality. Without thoughtful interventions, lawyers who return to the office first will get first dibs on high-value work and have greater visibility with leadership, leading to more positive performance reviews, increased compensation and promotions. But you can intervene to create a different outcome. Leaders who care about equitable training and development need to call on the expertise of diversity and inclusion experts for support in designing an approach to remote mentoring. It is possible, and they know how to do it. One thing is for sure: you won’t get there by applying yesterday’s solutions to today’s problems.

No question, law leaders are facing some of the hardest challenges they’ve ever seen. Let’s not make matters even worse by clinging to outdated thinking that will hobble our progress on equity and inclusion.

© 2020 Page2 Communications. All rights reserved.
For more articles on the legal industry, visit the National Law Review Law Office Management section.

FERC Redefines QF Eligibility Requirements

On September 1, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued an order breaking with decades of precedent regarding how it will determine whether a renewable resource is eligible for certification as a qualifying small power production facility (“QF”) pursuant to the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”).[1]  The result of the Commission’s order is that renewable resources will no longer have the ability to qualify for QF status by voluntarily limiting their output to comply with the 80 MW cap on small power production facilities.  Commissioner Richard Glick dissented and we anticipate that parties to the proceeding will seek rehearing and possibly appeal the order to federal court.  Bracewell will keep you updated on significant PURPA developments.

PURPA and the Commission’s implementing regulations limit a small power production QF’s capacity to a “power production capacity” of 80 MW.[2]  When evaluating whether a facility complied with this requirement, the Commission focused on the “maximum net output of the facility that can be safely and reliably achieved under the most favorable operating conditions likely to occur over a period of several years.”[3]  In practice, the Commission’s focus on the maximum net output of the facility—rather than the installed capacity of the equipment at the site—has meant that developers have been able to qualify for QF status by voluntarily installing control systems or taking other steps to limit the sustainable net output of the generation facility in any given hour to 80 MW or less, even if the installed generation capacity of the facility exceeded the 80 MW cap.

In the proceeding resulting in the September 1 Order, the Commission considered whether a combined solar and storage facility owned by Broadview Solar, LLC complied with the 80 MW cap.  The facility at issue consisted of a 160 MW solar array and a 50 MW battery storage system that would connect to 82.5 MW DC-to-AC invertors.  Because any energy produced by the solar array and battery storage system would need to be converted from DC power to AC power prior to the injection in the grid, the maximum achievable output from the facility in a given hour was 82.5 MW.  Thus, even though the installed capacity of the solar array and storage system exceeded the 80 MW cap, Broadview explained that the net output of the facility, taking into account losses and station load, could never exceed 80 MW.[4]

The Commission rejected Broadview’s arguments, however, and found that Broadview’s facility cannot meet the requirements for QF status.  The Commission acknowledged that previous orders had allowed “facilities with greater power production capacities to be certified as QFs when the net output was no more than 80 MW.”[5] The Commission found, however, that this interpretation was inconsistent with the plain language of PURPA limiting the “power production capacity” of QFs to 80 MW.  While the Commission recognized that the inverters were only capable of converting 80 MW into AC power, the Commission observed that this was merely a “conversion limit” and that the solar array alone had the capability to produce 160 MW of DC power.  According to the Commission, “[u]tilizing inverters to limit the output of an otherwise above-80 MW power production facility to 80 MW is . . . inconsistent with the type of facility that Congress specified can qualify as a small power production facility (i.e., a facility sized 80 MW or less).”[6]  For that reason, the Commission found that Broadview’s facility did not meet the requirements to qualify as a QF.

Recognizing the potential impact of its abrupt change in policy, the Commission explained that its finding would only be applied prospectively.[7]  As a result, the Commission’s order will not affect “QFs that have self-certified [through the submission of FERC Form 556] or have been granted Commission certification prior to the date of” the Commission’s order, even if the self-certification filed by the facility “included adjustments for inverters or other output-limiting devices to calculate its maximum net power production capacity as 80 MW or less.”[8]

The Commission’s order represents a marked departure from Commission precedent that  effectively eliminates the ability of renewable resources to meet the QF certification requirements by limiting the output of their facility so that it does not exceed 80 MW.[9]  Although the Commission indicated that it would only apply this determination prospectively, the Commission’s decision could have significant implications for projects that are in the final stage of development, but have not yet filed a notice of self-certification to FERC.[10]  The Commission emphasized, for example, that the owner of a facility with a legally enforceable obligation could not benefit from “grandfathered” status for the facility in the absence of a self-certification Form 556 submittal or FERC order granting certification before September 1, 2020.[11]  Also, the Commission’s order does not address whether the Commission would be willing to revisit the QF status of facilities that submit a notice of re-certification in order to report a change in the facts reported in its initial certification, including upgrading, modernizing or retrofitting existing facilities.[12]  The Commission did, however, clarify that load and line losses could continue to be factored in when measuring a facility’s 80 MW maximum net power production.

The Commission expressly declined to address how the capacity of an energy storage system should be taken into account for QF purposes – an aspect of the proceeding that many were following.[13]  In a number of recent proceedings, companies developing renewable resources combined with battery storage have taken the position that the capacity of a battery storage system should not be included when calculating the net capacity of the facility on the basis that the storage does not represent an additional source of independent power generation and merely allows the facility to shift the time of production; in those cases, however, the QF certification application was withdrawn before FERC made a substantive determination on the issue.[14]  Broadview took a similar position in this proceeding, arguing that aggregating the combined capacity of the solar array with the energy storage system would artificially inflate the aggregate capacity of the facility components.  The Commission found that it did not have to address that issue in this case because the 160 MW solar array on its own without considering the energy storage facilities was already double the 80 MW cap.[15]

 

[1] Broadview Solar, LLC, 172 FERC ¶ 61,194 (2020).

[2] 16 U.S.C. §§ 796(17), 824a-3; 18 C.F.R. § 292.204.

[3] Occidental Geothermal, Inc., 17 FERC ¶ 61,231, at 61,445 (1991).

[4] Id. at P 3.

[5] Id. at P 21.

[6] Id. at P 25.

[7] See id. at P 27.

[8] Id.

[9] See id. at P 27.

[10] Id.

[11] Id.

[12] See id.

[13] Id. at P 21 n. 57.

[14] See, e.g., NorthWestern Corp., 168 FERC ¶ 61,049 (2019).

[15] Broadview, 172 FERC ¶ 61,194, at P 21 n. 57.

© 2020 Bracewell LLP
For more articles on the environment, visit the National Law Review Environmental, Energy & Resources section.

Returning Resident Visas and COVID-19 Travel

With global travel disruptions reaching six months, lawful permanent residents (LPRs) and conditional permanent residents (CPRs) who are abroad and cannot currently travel back to the United States due to the Coronavirus Disease 2019 (COVID-19) pandemic are experiencing extended absences from the United States. Absences from the United States between six months to one year by a permanent resident may result in questioning at the time of reentry to the United States by the inspecting officer. Absences from the United States of more than one year can be more problematic. Those LPRs or CPRs who cannot, for whatever reason, return to the United States within the required timeframe may need to secure a “returning resident visa” from a U.S. consulate or embassy abroad.

LPRs or CPRs who have remained outside the United States for longer than one year, or beyond the validity period of a two-year re-entry permit, may require a returning resident visa to re-enter the United States and resume permanent residence. The returning resident visa is intended for LPRs or CPRs who departed the United States with the intention of returning to the United States, and only prolonged their stay outside the country due to circumstances beyond their control. For an LPR or CPR, qualifying reasons for remaining outside the United States for longer than one year or beyond the validity period of a two-year re-entry permit could include, but are not limited to, severe illness, pregnancy, third-party withholding of passport or travel documents, or government restrictions on outbound international travel such as those that may have been caused by the COVID-19 pandemic. Returning resident visa applicants must be able to justify their excessive absence from the United States due to circumstances “beyond their control” while presenting sufficient support for their continuous desire to promptly resume residence in the United States due to strong and continuous financial, employment, family, and social ties to the country.

LPRs or CPRs abroad with the possibility of remaining outside the United States for longer than one year, or beyond the validity period of a two-year re-entry permit, should be cognizant of the requirement of maintaining and being able to document continuous financial, employment, family and social ties to the United States. Such documents could include copies of U.S. income tax returns, property ownership documentation, employment documentation, and evidence of family and social ties, among other relevant documentation. This documentation will potentially establish that the original intent of the trip was temporary in nature. Due to the infrequent availability of appointment dates as U.S. consulates and embassies worldwide gradually resume routine services following initial closures due to COVID-19, returning resident visa applicants are encouraged to plan their applications sooner rather than later to avoid prolonging their stays abroad even further throughout the application process, which is substantively similar to that of other immigrant visa applications and also requires a medical examination.

*Special thanks to Chris Costa for his valuable assistance with this GT blog post.

©2020 Greenberg Traurig, LLP. All rights reserved.

ARTICLE BY Jennifer Hermansky of Greenberg Traurig, LLP

For more articles on immigration, visit the National Law Review Immigration, VISA, USCIS, ICE, & DHS Legal Updates section.

COVID-19 Liability: Practical Guidance on Risk Management for Horse Shows and Competitions

As COVID-19 continues to alter our daily lives, many of us have found comfort in barn time spent with our four-legged friends.  With so many spring and summer events cancelled, we are eager to get back in the saddle and into the show ring.  However, the legal implications facing horse show boards and competition venues are complex and ever-evolving. Which rules and guidelines apply?  What if someone at the show has or contracts COVID-19?  How do we manage (can we manage) the risks inherent in a pandemic?  This legal alert will explore risk management for horse shows in the age of COVID-19, including best practices, the efficacy of COVID-19 waivers, and prospects for statutory immunity.

Meeting Your Standard of Care through Best Practices

“Standard of care” is the legal yardstick by which we measure whether a person or business is acting in a reasonable manner.  If a business breaches or violates its standard of care and someone is injured as a result, a judge or jury can find that the business is legally liable to the injured person.  The best way for horse shows to meet their standard of care is to follow best practices in planning and preparing for events.

Best practices start with having a detailed, written plan for how the event will address and minimize the risk of exposure to COVID-19.  A good starting place is the United States Equestrian Federation’s (USEF) Emergency Response Plan, which walks through the types of things to consider when developing a plan specific to your event.[1]  But simply having a plan is not enough – you must implement and live your plan.  From a liability perspective, having a plan that is not updated, followed, or that is even intentionally ignored, is worse than not having a plan at all.

Your plan should comply with all applicable requirements and guidelines from your governing body or bodies.  If you are a USEF affiliate or hosting a USEF-rated competition, your plan must incorporate the mandatory requirements found in the USEF’s COVID-19 Action Plan.[2]  In addition, check with your breed/discipline association and your state and local government for requirements or recommendations.  For example, in Kentucky, three sets of state requirements could apply: Minimum Requirements, Horse Show Requirements, and Venues and Event Spaces Requirements.[3]  The state requirements overlap with each other and with the USEF Action Plan on topics such as maximizing work from home and electronic options, staff health screenings, face coverings, and social distancing, but the Kentucky Minimum Requirements also require items like a plan to ensure testing of symptomatic staff within a certain period of time and mandatory staff training on COVID-19 and the applicable state requirements.

As part of living your plan, you should consider how you will enforce it and then train your staff accordingly.  Both the USEF and Kentucky require the use of face coverings.  Both also require that shows ask an individual to comply and, if the person refuses (and is not exempt), either deny entry to the person or remove the person from the show grounds.  What is your enforcement plan?  Think in terms of a tiered system of soft and hard enforcement.  Soft enforcement includes making masks readily available across the grounds, signs, floor markings for social distancing, and routine announcements reminding participants and spectators of masking and other protocols.  If you’re seeing sloppy compliance or non-compliance, soft enforcement can also be in the form of show management holding (socially distanced) trainers’ or competitors’ meetings to reinforce the importance of following the protocols.  It can also come in the form of hiring off-duty, uniformed police officers, since their presence alone can encourage compliance.  Hard enforcement means denial of entry, asking someone to leave, and, if necessary, escorting that person from the premises.  If you see persistent non-compliance from a specific barn or group, consider whether hard enforcement might mean banning them from competition.  Of course, the goal is to avoid the need for hard compliance.  Consider training your staff on de-escalation techniques and push the themes of “we’re all in this together” and “we want to be able to compete, so please help us make this show happen.”

Finally, your plan should recognize what you do not know and plan for contingencies.  Revisit the plan as our understanding of COVID-19 evolves and as applicable requirements and guidelines change.  Since as many as 40 percent of COVID-19 cases are asymptomatic, encourage employees, volunteers, and contractors to take advantage of free testing in your area before, during, and after the competition.  Consider having staff operate in small pods with minimal face-to-face interaction with other pods.  This could minimize disruptions in the event a staffer becomes symptomatic or has to quarantine due to potential exposure or an asymptomatic positive.  Consider the conditions and circumstances under which you would cancel the show.  Will you rely on local positivity rates?  Will you consult with state and local health departments?  How far in advance do you need to make the call to be considerate to participants, sponsors, venues, and staff?  An insurance check-up – like an annual physical – is always a good idea, but this is especially so in the age of COVID-19.  Check your liability policy for language excluding claims related to communicable or infectious diseases.  If your policy excludes coverage for these claims (or if the policy isn’t clear on the subject), ask your agent if you can add coverage.  It may be cost-prohibitive to do so, but at least you will have a better understanding of your risk.  If you have event cancellation insurance, make sure you know what the policy covers and the type of documentation you will need if you have to make a claim.

Shows and competition venues should consider all of these factors when tailoring their individual plans.  While meeting the standard of care will not always deter claims or lawsuits, following best practices provides a solid starting point for your defense in the event of a claim.  It documents the careful planning, preparation, and implementation that went into making the show reasonably safe for participants and staff.

Should You Use COVID-19 Waivers?

COVID-19 waivers (“COVID waivers”) are an increasingly popular tool used by businesses in an effort to limit legal exposure.  However, like many popular trends, we have yet to see if the waivers have any staying power.  From a litigation perspective, there are serious questions about their enforceability.    Asking someone to waive potential claims related to “the inherent risks of being in public during a pandemic” is a much more abstract concept than asking them to sign the typical “inherent risk of equine activities” waiver.[4]  We do not yet know all or even most of the risks associated with COVID-19 and, as a result, courts may not enforce COVID waivers.  To compound this concern, courts in a majority of states (including Kentucky) have found that waivers signed on behalf of minors are not enforceable in at least some situations.[5]  Even putting enforcement concerns aside, COVID waivers – like most waivers – generally do not protect against gross negligence or willful misconduct.  In the context of COVID-19, this could look like a show that fails to follow their plan or a participant or staff member who knows he/she is positive and, nevertheless, comes to the competition.

Despite all of these challenges, a well-written COVID waiver can be useful to establish that a person was given fair notice of the potential for exposure and the potential risks of that exposure and chose to participate anyway.  If you decide to use a COVID waiver as part of your risk-management plan, consider including the following features.

  1. Draft the waiver in plain English with minimal legalese.
  2. Make the waiver a standalone document.  Avoid using combination waivers that lump in the standard equine activities language with vague references to “communicable and/or infectious diseases.”
  3. State the known risks of COVID-19 and the scope of the waiver in a clear and conspicuous manner.[6]  Does the waiver include claims arising from negligence?  Is it limited to the show board/committee, the venue, and staff, or does it include claims against other participants?
  4. One COVID waiver per person, signed by that person.  Do not permit trainers to sign on behalf of participants.  Develop a system for participants to access, sign, and submit the waiver online but avoid using fine print with a “Click Here to Accept Terms & Conditions” box.
  5. Use a specific waiver for minor children that requires the person signing to warrant and represent that she/he is the parent or authorized legal guardian.
  6. Use the waiver as a vehicle for compliance.  Consider attaching a copy of the show’s COVID-19 participant requirements and safety protocols.  Include language in the waiver that references those requirements and states that the participant acknowledges receipt and agrees to comply.

As discussed above, a well-written COVID waiver has uses beyond enforceability.  Even if a court finds that the waiver does not bar a claim, your show will still have important written evidence that the participant was warned of the risk in plain English and chose to participate anyway.

What about Statutory Immunity?

Several states and the federal government have enacted – or are considering – some form of statutory immunity to protect businesses from COVID-19 related claims.[7]  States like Kentucky limit that immunity to certain sectors, such as health care providers and PPE manufacturers.[8]   At least 10 states offer immunity to a broad range of businesses through heightened burdens of proof.[9]  For example, under Tennessee’s new COVID-19 Recovery Act, businesses are protected unless a plaintiff can prove (i) causation by clear and convincing evidence and (ii) that the business acted with gross negligence or willful conduct.[10]  The former will likely require proof of a verified, contact-traced outbreak at the business, and evidence that the plaintiff was at the business during a certain window of exposure.

While statutory immunity can provide some liability protection, horse shows should view it as a backstop rather than the centerpiece of their COVID-19 risk-management plan.  As with any immunity statute, COVID-19 immunity statutes will face court challenges on a variety of issues from the scope of immunity to the type of proof required to meet any exceptions.  Even if your state offers immunity for your event, it is not a substitute for careful planning and implementation of best practices.

Final Thoughts

Risk management in the age of COVID-19 is an ever-evolving challenge, but identifying best practices and putting them into action can help horse shows rein in potential liability and provide safe opportunities for competition.  Know the applicable governing body, state, and local requirements, be smart about how you use COVID waivers, and never rely entirely on statutory immunity.  It is impossible to eliminate all liability risks, but careful planning and living that plan give shows, venues, and equestrians the best chance for a return to safe and fun competition.

Footnotes

[1]See United States Equestrian Federation, COVID-19 Emergency Response Plan, August 18, 2020, available at: https://www.usef.org/forms-pubs/4Tog688hc10/covid-19-emergency-response-plan–

[2]See United States Equestrian Federation, COVID-19 Action Plan, August 18, 2020, available at: https://www.usef.org/forms-pubs/XhKGVYiiwTA/usef-covid-19-action-plan-for-operating

[3]See, e.g., Minimum Requirements for All Entities, Kentucky Healthy at Work Guidance Version 3.0, effective July 10, 2020, available at:  https://govsite-assets.s3.amazonaws.com/PuhOvvxS0yUyiIXbwvTN_2020-7-10%20-%20Minimum%20Requirements.pdf;  Requirements for Horse Shows, Kentucky Healthy at Work Guidance Version 3.0, effective July 10, 2020, available at:  https://govsite-assets.s3.amazonaws.com/1bjXrMecSSeEy8LR3mDk_2020-5-29_-_healthy_at_work_reqs_-_horse_shows%20draft%203.0.pdf; Requirements for Venues and Event Spaces, Kentucky Healthy at Work Guidance Version 3.0, effective June 29, 2020, available at: https://govsite-assets.s3.amazonaws.com/wHu3QCJdS6Bleg8gV5qR_HAW%20Venues%20and%20Events%20Spaces%20-%20FINAL%20-%202020-06-22.pdf

[4]See, e.g., KRS 247.4027 of the Kentucky Farm Animal Activities Act which endorses the use of waivers related to participation in equine and farm animal activities.

[5]See, e.g., Miller, as Next Friend of her Minor Child, E.M. v. House of Boom Kentucky, LLC, 575 S.W.3d 656 (Ky. 2019) (holding that pre-injury liability waivers for commercial businesses signed by a parent or guardian on behalf of a minor child are unenforceable under Kentucky law.)

[6]See Symptoms of Coronavirus, Center for Disease Control, available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html?utm_campaign=AC_CRNA

[7] Congress has considered legislation that would impose strict nationwide limitations on COVID-19 tort liability.  In anticipation of a “risk of a tidal wave of lawsuits” the proposed bill offers immunity for businesses, educational, religious and nonprofit institutions, local government agencies and healthcare providers for exposing people to COVID-19. SeeSAFE TO WORK Act, S. 4317, 116th Cong., §2 (2020), available at: https://www.congress.gov/bill/116th-congress/senate-bill/4317/text

[8]See Kentucky Senate Bill No. 150, March 30, 2020; see, e.g., states including Alaska (S.B. 241, enacted April 9, 2020), Massachusetts (S2640, enacted April 17, 2020), New Jersey (S2333, enacted April 14, 2020), New York (S75006B-A90506B-Chapter 56 (Section GGG),and Wisconsin (2019 Wisconsin Act 185, enacted April 15, 2020, as well as the District of Columbia (B23-0734), have enacted similar protections for healthcare workers and personal protective equipment manufacturers.

[9] Like the contemplated federal legislation, some states have already enacted legislation limiting COVID-19-related civil liability for a broad range of businesses.  See, e.g., Georgia (S.B. 359, enacted August 5, 2020), Kansas (H.B. 2016a, enacted June 8, 2020), Louisiana (HB 826, enacted June 13, 2020).

[10]See Tennessee COVID-19 Recovery Act (SB 8002/HB 8001), August 17, 2020.

© 2020 Dinsmore & Shohl LLP. All rights reserved.
For more articles on horse racing, visit the National Law Review’s Entertainment, Art & Sports section.

EPA’s Asbestos Problem: Pending Litigation and Draft Risk Evaluation

Multiple States’ Attorneys General and asbestos advocacy groups are suing EPA in the Federal District Court for the Northern District of California[1]. The plaintiffs are seeking judicial intervention concerning EPA “arbitrary and capricious” decision to deny states’ earlier petition that requested EPA collect more data on imported asbestos under the authority granted to EPA in the Toxic Substances Control Act (TSCA).[2]  Under the Arbitrary and Capricious standard, plaintiffs must prove that there was no rational connection between the facts found and the decision made by EPA.[3]  Normally, an agency action is “arbitrary and capricious” if the agency relied on factors that Congress did not intend it to consider, failed to consider an important aspect of the problem, offered an explanation not supported by the evidence, or the implausible decision cannot be explained as a differing viewpoint.[4]  The standard that EPA’s action will be evaluated is not as high as intermediate review and strict scrutiny.

At initial review, there is not a strong challenge EPA’s actions being outside Congress’ intent.  TSCA provides EPA with statutory authority to regulate the manufacturing, importing, processing, and commercial distribution of asbestos.[5]  EPA recently promulgated additional regulations regarding Restrictions on Discontinued Uses of Asbestos; Significant New Use Rule.[6]  Therefore, the States’ Attorneys General will have to develop factual evidence to show EPA’s action was unreasonable.  EPA argues, inter allia, that it did not act arbitrarily or capriciously with regard to its denial of the initial petition given it would not have collected any additional data on asbestos imports given its decision was based on review of data from multiple sources.[7]

For brief background on the mining and importing of asbestos, asbestos mining in the United States steadily declined after it peaked in the mid-1970’s, and mining in the United States completely stopped just after the turn of the millennia.[8]  Likewise, the rate of manufacturing/use of asbestos in the United States also steadily declined during this same period, but manufacturing/use of asbestos has never completely stopped.  Where does the United States get its asbestos now?  The answer is not Canada, which was once home to the largest asbestos mine in the world (i.e., Johns Manville’s Jeffrey Mine).  Currently, all the asbestos imported to the United States is chrysotile from Russia.[9]

As an overlay to the above, the EPA is also in the process to update its Risk Evaluation of asbestos, specifically chrysotile.  The EPA’s Draft Risk Evaluation of Asbestos (“DRE”) was released in March 2020.  Most notably, EPA’s draft findings call into question the long-standing conclusion of the medical and scientific communities that chrysotile asbestos is unequivocally less potent than amphibole asbestos minerals.[10]  EPA is currently evaluating the numerous comments it received from the medical and scientific communities that questioning the EPA’s data and findings in the DRE.[11]  EPA has seemingly created its own paradox by releasing the DRE that finds an increased risk from chrysotile after getting sued for allegedly loosening restrictions on imported asbestos that is all Russian chrysotile.  Notwithstanding and without triggering a political debate, there is always an elephant in the room when discussing the Federal government’s actions that implicate Russia given the current administration.  All these factors considered, should make for an active and interesting discovery period in the pending lawsuits against EPA.

©2020 CMBG3 Law, LLC. All rights reserved.

ARTICLE BY Clifford V. Pascarella II of CMBG3 Law.
For more articles on the EPA, visit the National Law Review Energy, Climate, and Environmental Law News section.

[1] States’ Attorneys General for California, Massachusetts, Connecticut, Hawaii, Maine, Maryland, Minnesota, New Kersey, Oregon, Washington, as well as  Washington DC are plaintiffs; and lead plaintiff for the asbestos advocacy groups is The Asbestos Disease Awareness Organization.  See Asbestos Disease Awareness Organization, et al. v. U.S. Environmental Protection Agency, et al., United States District Court for the Northern District of California, San Francisco Division, Case No. 3:19-CV-008871-EMC; and State of California, by and through Attorney General Xavier Becerra, et al. v. U.S. Environmental Protection Agency, et al., United States District Court for the Northern District of California, San Francisco Division, Case No. 3:19-CV-03807-EMC.

[2] 15 U.S.C. §2601

[3] Motor Vehicle Mfgrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983) (cited by Michigan v. E.P.A., 576 U.S. 743, 750-751 (2015)

[4] Id.

[5] See 40 CFR 763 (July 12, 1989)

[6] See 84 FR 17345 (April 25, 2019)

[7] United States District Court for the Northern District of California, San Francisco Division, Case No. 3:19-CV-008871-EMC, ECF Document 52, pp. 11-12

[8] https://www.asbestos.com/occupations/mining/

[9] https://www.asbestos.com/news/2020/03/23/us-asbestos-imports-drop/

[10] https://www.epa.gov/sites/production/files/2020-3/documents/1_draft_risk…

[11] https://www.regulations.gov/document?D=EPA-HQ-OPPT-2019-0501-0113;and https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/draft-risk-evaluation-asbestos#docs

COVID-19 Update: CDC Order Temporarily Halts Residential Evictions Nationwide until December 31, 2020

In response to the coronavirus pandemic, the federal government, as well as many States, have enacted eviction and foreclosure moratoriums in an effort to keep homeowners and renters in their homes and slow the spread of Covid-19.  One such moratorium was included by Congress in the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, which was enacted earlier this year.  The CARES Act provided, among other things, for a 120-day eviction moratorium for tenants who participated in federal housing assistance programs or who lived in a property that was federally related or financed.  The CARES Act eviction moratorium, which expired on July 24, 2020, prohibited landlords from commencing new evictions proceedings or charging late fees, penalties and/or other charges against eligible tenants for non-payment of rent during the moratorium period.

This week, citing concerns with the continued spread of Covid-19, the Center for Disease Control and Prevention (the “CDC”) issued a new order temporarily halting residential evictions nationwide through December 31, 2020 (unless extended).  The order would prohibit landlords, owners of residential properties, or any other person with the right to pursue an eviction action, from commencing eviction proceedings against any eligible non-paying tenant affected by the Covid-19 pandemic. The new CDC order does not, however, preclude evictions for reasons other than non-payment of rent or release qualifying tenants from their obligation to pay rent or to comply with the other terms of their rental agreement.  In addition, the order does not preclude foreclosures of home mortgages.

Unlike the CARES Act, the protections provided in the CDC order are available to all qualifying residential tenants and not just those tenants who receive federal housing assistance or who lived in a federally related or financed property.  In addition, the order does not prohibit landlords from imposing late fees, fines and/or from charging interest on unpaid rent while the moratorium is in effect.

In order to qualify, tenants must submit a “Declaration” to their landlord, the owner of the residential property, or any other person who has the right to commence an eviction action, claiming their eligibility under the new CDC order.  The declaration must include the following statements from each adult tenant listed on the rental agreement: (1) that the tenant has used his/her best efforts to obtain all available governmental rental or housing assistance; (2) that the tenant either (i) expects to earn no more than $99,000 (or $198,000 for joint filers) during the 2020 calendar year, (ii) was not required to file an income tax return with the IRS for the year 2019, or (iii) received an Economic Impact Payment under the CARES Act; (3) that the tenant is unable to make rental or housing payments when due as a result of a substantial loss of household income, loss of hours of work or wages, being lay-off or due to “extraordinary” out-of-pocket medical expenses; (4) that the tenant is using his/her best efforts to make partial rental payments, taking into account such tenant’s other non-discretionary expenses; and (5) that the eviction of such tenant would likely result in such tenant being homeless or such tenant having to move into a “closed quarters” shared living space.  Failure by any landlord to comply with the CDC order will result in criminal penalties.

The CDC order will only be applicable to those States, local, territorial, or tribal areas that do not already have an eviction moratorium in place that provides for the same or greater tenant protection than those provided in the CDC order.

© Copyright 2020 Cadwalader, Wickersham & Taft LLP
For more articles on real estate, visit the National Law Review Real Estate, Transportation, Utilities and Construction Law News section.

IRS Issues Guidance on Deferral of Certain Employee Payroll Taxes

On Friday, August 28, the IRS issued Notice 2020-65, providing guidance about the deferral of certain employee payroll taxes under the President’s Executive Memorandum issued earlier in August. As has become the norm in these uncertain times, the guidance must be considered fluid and subject to change without notice. The existing guidance leaves many questions unanswered so we will continue to monitor this issue.

What Is the Employee’s Portion of the Payroll Taxes Subject to Deferral Under Executive Memorandum and Notice 2020-65?

In addition to income tax withholding, payroll taxes include Federal Insurance Contributions Act (FICA) taxes. FICA taxes include old-age, survivor and disability insurance (OASDI) (Social Security) and hospital insurance (Medicare). These payroll taxes apply at a rate of 15.3 percent for wages up to $137,700 for the 2020 calendar year. The obligation for the FICA taxes are equally divided between employers and employees at 7.65 percent, broken down as follows: 6.2 percent for Social Security and 1.45 percent for Medicare. Accordingly, for purposes of the Executive Memorandum and Notice 2020-65 the amount subject to deferral is 6.2 percent of the Social Security taxes as the employee’s share.

What Is Known

  • Deferral of the employee’s share of Social Security taxes appears to be voluntary by the employer based on the language in this notice, Code Section 7508A, and prior statements made by Secretary Mnuchin. Since the deferral is voluntary, the employer may forgo the deferral and timely withhold and pay over the required taxes.
  • The employer is the “Affected Taxpayer” under Notice 2020-65. Thus, an employee cannot require its employer to defer the taxes.
  • The option to defer applies to wages paid to an employee on a pay date during the period beginning September 1, 2020 and ending on December 31, 2020.
  • The option to defer only applies to employees earning less than $4,000 paid for a bi-weekly pay period.
  • The determination of whether the employee earns less than $4,000 per bi-weekly pay period is made on a pay period-by-pay period basis. Notice 2020-65
  • The employer must withhold and pay the deferred taxes under this notice ratably between January 1, 2021 and April 30, 2021 or interest, penalties, and additions to the tax will begin to accrue on May 1, 2021, with respect to any unpaid applicable taxes. Notice 2020-65
  • “If necessary, the Affected Taxpayer [Employer] may make arrangement to otherwise collect the total Applicable Taxes from the employee.” Notice 2020-65. Implies the penalties will be assessed against Employer as the Affected Taxpayer as defined by the guidance.

What Is Not Known

  • What if the employee leaves the company?
  • What if employee doesn’t make enough money to pay the tax back?
  • It appears that the obligation to pay the deferred taxes remains with the employer in either situation above.

Absent further guidance or congressional action, the deferred taxes must be withheld from the employee’s wages and paid over to the government between January 1, 2021 and April 30, 2021. Employers who are considering allowing employees to defer payment of taxes should consult counsel and develop a plan to implement before ceasing to make deductions. Considerations for the plan should include an employee communication plan developed to address employee payment obligations after the deferral period expires or if the employee becomes no longer employed by the employer. In addition, the plan should take into account whether employees are covered by a collective bargaining agreement that triggers notice and bargaining obligations. Also, keep in mind that Michigan employers must have signed authorization from the employee to make deductions from wages. Employers should consider obtaining written authorization from qualifying employees who elect to defer that includes the plan to repay the deferred taxes and a backup in case the employee ceases to be employed before the taxes are paid.

© 2020 Varnum LLP
For more articles on the IRS, visit the National Law Review Tax, Internal Revenue Service and Treasury Legal News section.

District Court Strikes Down DOL Regulation Exempting Non-Healthcare Workers from Paid Leave

On August 3, 2020, the U.S. District Court for the Southern District of New York struck down part of a Department of Labor (“DOL”) regulation that would have prevented huge swaths of employees from taking paid leave under the Families First Coronavirus Response Act (“FFCRA”). The court’s holding has important consequences for employees who may need to take leave from work to care for themselves or others during the ongoing COVID-19 pandemic.

Congress passed the FFCRA on March 18, 2020, to provide paid leave for employees who are experiencing symptoms of COVID-19, are quarantined and cannot work because of COVID-19, or are caring for someone who is quarantined, or a child whose school or care provider is closed, because of COVID-19. In recognition of the essential role of frontline health care workers during the pandemic, however, the FFCRA permits an employer to deny an employee’s request for qualifying leave if the employee is a “health care provider or emergency responder.” The Act defines “health care provider” as “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate)” or “any other person determined by the Secretary [of Labor] to be capable of providing health care services.” The Act also expressly authorizes DOL to “issue regulations to exclude certain health care providers and emergency responders from” from eligibility for paid leave.

DOL Expands Definition of ‘Health Care Provider’

On April 1, 2020, DOL issued a regulation implementing the FFCRA that significantly expanded the definition of “health care provider,” thereby excluding additional employees from eligibility for paid leave under the Act. The definition covered, among other employees, “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, [or] pharmacy[.]” In its motion to dismiss, DOL conceded that its definition would encompass many employees who are not traditionally considered healthcare workers, such as professors, librarians, and cafeteria managers at a university with a medical school. In this sense, DOL’s new definition of “health care provider” created an exception that threatened to swallow the rule.

District Court Rejects DOL Definition

In its opinion invalidating the DOL definition, the court held that the FFCRA requires DOL to determine that a particular employee is “capable of furnishing healthcare services . . . not that [the employee’s] work is remotely related to someone else’s provision of healthcare services.” DOL’s definition, the court found, “hinges entirely on the identity of the employer, in that it applies to anyone employed at or by certain classes of employers,” as opposed to the identity of the employee, in violation of the statutory text. Administrative procedure law therefore “unambiguously foreclose[d] the [DOL’s] definition” of “health care provider.”  Finding further that DOL’s definition of “health care provider” was severable from the remainder of the regulation, the court simply invalidated that provision, restoring the definition of “health care provider” to the more limited one in the text of the statute.

The court also rejected DOL’s argument that its definition “operationalizes” the goal of “maintaining a functioning healthcare system during the pandemic.” Acknowledging that employees who “do not directly provide healthcare services to patients – for example, lab technicians or hospital administrators – may . . . be essential to the functioning of the healthcare system,” the court nevertheless held that this rationale could not supersede the “unambiguous terms” of the FFCRA, which require DOL to determine whether a particular employee can provide healthcare services.

Keeping Employees Safe 

More broadly, by enabling more employees to stay at home without sacrificing a paycheck, the court’s holding bolsters the FFCRA’s dual purpose of limiting the spread of COVID-19 while at the same time providing financial relief to American workers. The DOL regulation, on the other hand, would have forced employees to report to work despite symptoms of or exposure to COVID-19, increasing the risk of spreading the virus to others, or take leave without pay.

If you need to take leave from work because you are experiencing symptoms of or were exposed to COVID-19, or to take care of a loved one who is at home because of COVID-19, consider consulting with an employment attorney to determine whether you may be eligible for paid leave under the FFCRA.

© Katz, Marshall & Banks, LLP
ARTICLE BY Jessica L. Westerman of  Katz, Marshall & Banks, LLP
For more articles on healthcare, visit the National Law Review Health Care, Medicare, Affordable Care Act, HIPAA Legal News section.

CDC Issues Temporary Halt in Residential Evictions Nationwide to Prevent the Spread of COVID-19

On September 1, 2020, the Centers for Disease Control and Prevention (“CDC”) issued an Order under the Public Health Service Act Section 361 to temporarily halt residential evictions nationwide through December 31, 2020, to prevent the further spread of COVID-19.

Under the Order, a landlord, residential property owner, or other person with a legal right to pursue eviction action, cannot evict any tenant, lessee, or resident of a residential property from the property. The Order applies to all State, local, territorial, or tribal area in which there is no moratorium on residential evictions that provides the same or greater level of protection than this Order.

The Order does not relieve any tenant of its obligation to pay rent, make a housing payment, or comply with any other obligation under a tenancy, lease, or similar contract. The Order also does not preclude a landlord’s ability to charge or collect fees, penalties, or interest as a result of the failure to pay rent or other housing payment in a timely manner. Tenants are still required to pay rent and follow all the other terms of their lease, and may still be evicted for reasons other than not making a housing payment.

To invoke the CDC’s Order, tenants must sign and provide an executed copy of a Declaration form (or a similar declaration under penalty of perjury) attesting to their current circumstances and inability to pay, to the party attempting to enforce an eviction. A sample Declaration form is attached to the CDC Order and requires that the tenant seeking relief from eviction attest that the tenant: (1) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), (2) is unable to pay the full rent due to substantial loss of household income or extraordinary out-of-pocket medical expenses, and (3) will likely have no other option if evicted other than homelessness or living with more people in close proximity.

The Order, which does not include any provisions for rental and unemployment assistance, is being met with mixed responses. While many housing advocates welcome the action by the CDC, rental property owners are expressing concerns that the Order would negatively affect the stability of the rental housing sector. “An eviction moratorium will ultimately harm the very people it aims to help by making it impossible for housing providers, particularly small owners, to meet their financial obligations and continue to provide shelter to their residents,” said Doug Bibby, president of the National Multifamily Housing Council.

A full copy of the CDC Order can be found here.

© 2020 SHERIN AND LODGEN LLP

This article was authored by Trang Pham of  Sherin and Lodgen. 

For more articles on real estate, visit the National Law Review Real Estate, Transportation, Utilities and Construction Law News section.

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