The National Law Forum

Elections 2016, Trans Pacific Partnership, TTIP: Trade Talk 7-13 November 2016

Donald Trump won the U.S. presidential election against former Secretary of State Hillary Clinton on 8 November in what many are describing as an upset. President-Elect Trump’s transition team is now tasked with vetting possible Cabinet officials and lower-level appointees, receiving background briefings from the Obama Administration, and crafting policy proposals based on his campaign promises. President-Elect Trump will be sworn-in as the 45th President of the United States on 20 January.

TPP – No-Go. President-Elect Trump remains opposed to the TPP agreement in its current form, and lawmakers on both sides of the aisle continue to express concerns with certain issues in the final deal that reportedly have not yet been addressed by the Obama Administration. Ongoing concerns with the TPP deal include longer intellectual property protections for biologic drugs and concerns with the tobacco industry’s carve-out from the deal’s investor-state dispute resolution mechanism. Shortly after the elections, Republican Congressional leaders in both chambers issued statements indicating the deal will not be brought up for a vote before the end of 2016 and must be revisited after President-Elect Trump takes office. According to a draft 100-day plan leaked by Politico, Trump advisors are proposing the U.S. withdraw from the deal soon after Trump takes office – however, other TPP countries are likely to keep advocating for the deal with the next Administration.

TTIP – On Hold. With the uncertainty surrounding President-Elect Trump’s trade priorities, European Union Trade Commissioner Cecilia Malmström said of the Transatlantic Trade and Investment Partnership (TTIP) negotiations on 11 November:

For quite some time TTIP will be in the freezer. What happens when it’s defrosted, I think we’ll have to wait and see.”

The EU and United States are not expecting to schedule any more formal negotiating rounds this year.

JCCT Meeting Ahead. U.S. Secretary of Commerce Penny Pritzker and U.S. Trade Representative Michael Froman will host the 27th session of the U.S.-China Joint Commission on Commerce and Trade (JCCT) next week in Washington. Vice Premier of the State Council Wang Yang will lead the Chinese delegation. U.S. Secretary of Agriculture Tom Vilsack is also expected to join the JCCT meeting to address bilateral agricultural trade issues. President-Elect Trump made it clear during the campaign that China’s perceived unfair trade practices will be addressed in his Administration, including labeling the country as a currency manipulator.

ARTICLE BY International Trade Practice at Squire Patton Boggs

Obama Administration Will Not Finalize Laboratory Developed Tests Framework Guidance

On November 18, 2016, the U.S. Food and Drug Administration (FDA) announced that it would not finalize the draft guidance entitled Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs) (Draft Guidance) prior to the end of the Obama administration.

As we previously reported, FDA issued the Draft Guidance on October 3, 2014. The document describes the Agency’s shift from enforcement discretion policy for LDTs to a risk-based framework under which LDTs would be regulated as medical devices pursuant to the Federal Food, Drug, and Cosmetic Act (FDCA). In particular, the Draft Guidance outlined a phased-in approach for both premarket review and postmarket requirements, including registration and listing, medical device reporting, and Quality System Regulation (QSR) requirements.

Section 1143 of the Food and Drug Administration Safety and Innovation Act (FDASIA) required FDA to provide notification to Congress of its intent to finalize the Draft Guidance at least 60 days prior to the issuance of a final guidance. Although agency officials had stated that FDA would finalize the Draft Guidance by the end of 2016, the Agency had not provided this notification to Congress. Had the Obama administration intended to move forward with a final guidance before the end of the administration, the notification required by FDASIA would had to have been issued by November 19, 2016. At the same time, lawmakers had threatened to use the Congressional Review Act to block FDA from finalizing guidance documents imposing the FDCA on LDTs.

On Friday, an FDA spokesperson confirmed that the Agency would not finalize the Draft Guidance during the Obama administration:

“The FDA believes that patients and health care providers need accurate, reliable, and clinically valid tests to make good health care decisions — inaccurate or false test results can harm individual patients. We have been working to develop a new oversight policy for laboratory developed tests, one that balances patient protection with continued access and innovation, and realize just how important it is that we continue to work with stakeholders, our new Administration, and Congress to get our approach right. We plan to outline our view of an appropriate risk-based approach in the near future. It is our hope that such an approach will help guide continued discussions.”

ARTICLE BY Christopher Hanson of Covington & Burling LLP

New Form I-9 Must Be Used By January 22, 2017

This week, the U.S. Citizenship and Immigration Services (USCIS) released a new version of its Form I-9, the Employment Eligibility Verification form. All U.S. employers must begin using the new Form I-9 after January 22, 2017.

Currently, U.S. Immigration and Customs Enforcement conducts over 3,000 I-9 employer audits annually, and immigration enforcement is anticipated to increase due to the Trump presidency. In January, Holland & Hart will host a webinar explaining the changes to the Form I-9 and discussing what immigration reforms employers should expect in a Trump presidency.

Form I-9 Changes

The new version of the Form I-9 includes some clarifications as well as some changes designed to make the form easier to fill out electronically. Completing the Form I-9 electronically will require downloading the latest version of Adobe Reader. Form I-9s completed electronically will still need to be printed and signed by the employee and employer agent by hand. One of the changes is in Section 1 which now asks for “other last names used” rather than “other names used.”

Enhancements for easier completion of the form include drop-down lists and calendars for entering dates, the addition of prompts to help ensure that information is entered properly, on-screen instructions for each field, and easy access to the full instructions. It also includes an option to clear the form and start over. Other changes you’ll find on the new I-9 include:

Question regarding whether a preparer or translator was used
Space to enter multiple preparers and translators
A supplemental page for the preparer/translator
Creation of a QR code once the Form I-9 is completed electronically
A field to enter additional information such as E-Verify confirmation numbers, termination dates and correction notes, and
Separating the full instructions from the form itself.

Reminder of I-9 Process

As you may know, the 1986 Immigration Reform and Control Act (IRCA), prohibits employers from hiring employees, including U.S. citizens, without first verifying their identity and checking that they have proper authorization to work in the United States. The Form I-9 ensures that you have completed this necessary verification for all new hires. USCIS provides the following useful graphic to show the proper timing and process for completing Form I-9s for each newly hired employee:

Labor, Chart

What You Need To Do

You have just over two months to switch to the new Form I-9, so it is best to put procedures in place now to make that switch for all new hires to ensure compliance.

ARTICLE BY Roger Y. Tsai of Holland & Hart LLP

Election 2016, Title VII and Sexual Orientation, DOL Persuader Rule: Employment Law This Week – November 21, 2016 [VIDEO]

Election 2016: New Laws Impacting Employers

Our top story: Election Day brings a wave of new laws affecting employers. While all eyes were on the battle for the White House, voters in a number of states approved new legislation that will directly impact employers. Arizona and Washington will soon require paid sick leave for workers, as well as minimum wage increases. Medical marijuana is now legal in Arkansas, Florida, and North Dakota, while recreational use was approved in California, Maine, Massachusetts, and Nevada. The new laws in Arkansas and Maine explicitly prohibit employment discrimination against medical marijuana users.

Federal Court Agrees with EEOC: Title VII Covers Sexual Orientation

In another move toward sexual orientation protections in Title VII of the Civil Rights Act of 1964 (“Title VII”), the U.S. District Court for the Western District of Pennsylvania has denied a motion to dismiss a sexual orientation case brought by the U.S. Equal Employment Opportunity Commission (“EEOC”), one of several claims that the agency is pursuing across the country. The employer in this case had argued for dismissal because it claimed that Title VII’s prohibition of sex discrimination does not apply to sexual orientation discrimination. The court found that sexual orientation discrimination is a “subset of sexual stereotyping” covered by Title VII. This same issue is currently pending before the U.S. Court of Appeals in the Second and Seventh Circuits, in cases where the district courts ruled that sexual orientation discrimination is not prohibited by Title VII.

DOL’s Amended Persuader Rule Is Permanently Blocked

A federal court in Texas has permanently enjoined the U.S. Department of Labor (“DOL”) from enforcing its 2016 amended Persuader Rule, after concluding that the amended rule is unlawful. The decision applies nationwide, making permanent a preliminary injunction that the court issued in June. The rule would have required employers to report payments made to consultants, including lawyers, in connection with even indirect efforts to influence employees’ opinions on labor unions and a wide range of employment matters.

Fourth Circuit Rules That Nursing-Home Nurses Are Not “Supervisors”

The Fourth Circuit recently upheld a conclusion by the National Labor Relations Board (“NLRB”) that registered nurses and licensed practical nurses at a nursing home in South Carolina can unionize because they do not exercise enough independent judgment to be supervisors. The Fourth Circuit deferred to the NLRB’s position that employees do not exercise independent judgment because their decisions are controlled by company policies or rules. Because the nurses’ supervision mainly consisted of making sure that nursing assistants followed written rules and did not discipline assistants on their own, the nurses did not exercise independent judgement and, therefore, were not supervisors.

Tip of the Week

Lenora Billings-Harris—Diversity Strategist, an award-winning international speaker, and the author of The Diversity Advantage—is here with some advice on how to combat unconscious bias.

ARTICLE BY George Carroll Whipple, III of Epstein Becker & Green, P.C.

Same Sex and LGBT Protection Rights Flourish – Except in Workplaces?

In the last 20 years, the legal landscape has shifted dramatically for lesbians, gays, bisexuals, and transgender (LGBT) individuals. In 1996, the Supreme Court used the Equal Protection Clause to invalidate an amendment to Colorado’s Constitution that would have prevented any branch or political subdivision of the state from protecting individuals against sexual orientation discrimination.¹ Several years later, the Court determined that individuals’ rights to liberty under the Due Process Clause gave them the full right to engage in private consensual sexual conduct without the government’s intervention.² Then, in 2013, the Supreme Court struck down the Defense of Marriage Act, finding that it violated the equal protection guarantee of the Fifth Amendment.³ And finally, just last year, the Supreme Court ruled that under both the Due Process and Equal Protection Clauses of the Fourteenth Amendment, same-sex couples had the right to marry in every state.⁴

While each of these decisions had a profound impact on the lives of many Americans, none increased the workplace protections of LGBT employees under federal anti-discrimination laws. As a panel of the Seventh Circuit recently pointed out, “[m]any citizens would be surprised to learn that under federal law any private employer can summon an employee into his office and state, ‘You are a hard-working employee and have added much value to my company, but I am firing you because you are gay.’”⁵

In fact, every circuit court that has been asked whether Title VII – the federal law that prohibits discrimination against an employee because of his race, color, religion, sex or national origin – covers discrimination based on sexual orientation has answered the question “no.”⁶ However, in reaching this conclusion, every court has unequivocally condemned the practice of sexual orientation discrimination as unwise, unfair and immoral. So why the disconnect?

As most courts see it, the issue is that Title VII does not explicitly prohibit sexual orientation discrimination, and Congress has attempted for decades to pass legislation that would expand Title VII to cover sexual orientation discrimination but has come up short.⁷ Also, most states have not passed legislation that covers such discrimination.

But all of this is not to say that LGBT employees are without recourse. Since the Supreme Court’s decision in Price Waterhouse v. Hopkins, Title VII has covered claims by employees who were discriminated against because they did not conform to traditional gender stereotypes.⁸ In Price Waterhouse, Ann Hopkins failed to make partner at her accounting firm and was told she could improve her chances next time if she would walk, talk and dress more femininely, get her hair styled, and wear jewelry. The Supreme Court said this sort of gender stereotyping constitutes discrimination because of sex under Title VII.⁹

What arose from Price Waterhouse is a line of cases that protect LGBT employees from gender stereotyping discrimination but not from discrimination based on sexual orientation. The courts following this approach are forced to distinguish between behavior that would fall into the gender stereotyping category and be protected from those which would fall into the sexual orientation discrimination category and not be. At best, this is a difficult task. At worst, it’s an exercise in futility.

Some courts, unwilling or unable to differentiate between the two categories, have discarded this approach all together. For these courts, if it appears that the employee is trying to recast a sexual orientation discrimination case as one for gender stereotyping, they will deny all relief. In other words, these courts reject employees’ claims of gender stereotyping, as meritorious as they may be, when it appears the claims are intertwined with a sexual orientation discrimination claim.¹⁰

This could be primed for a change, though. While courts seem confused as to Title VII’s scope, the EEOC has no doubt: sexual orientation discrimination is, the EEOC says, discrimination because of sex. In Baldwin v. Foxx,¹¹ the EEOC came to this conclusion for three main reasons. First, it concluded that “sexual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”¹² To make its point, the EEOC gave the example of a woman who is suspended for placing a photo of her female spouse on her desk, and a man who faces no consequences for the same act. Second, it explained that “sexual orientation discrimination is also sex discrimination because it is associational discrimination on the basis of sex,” in which an employer discriminates against lesbian, gay, or bisexual employees based on who they date or marry.¹³ Finally, the EEOC described sexual orientation discrimination as a form of discrimination based on gender stereotypes in which employees are harassed or punished for failing to live up to societal norms about appropriate masculine and feminine behaviors, mannerisms and appearances.¹⁴ In emphasizing this last point, the EEOC rejected the numerous court decisions that have tried to distinguish between gender non-conformity claims and those for sexual orientation discrimination.

In its guidance on the subject, the EEOC has tracked the Baldwin decision and said that discrimination on the basis of sexual orientation is illegal under Title VII. In litigation involving the EEOC, it has pushed this tripartite approach with varying success. While no circuit court has followed Baldwin or the EEOC’s guidance, a number of district courts have taken notice. Courts in Alabama, the District of Columbia, California, Oregon and Pennsylvania have all sided with the EEOC’s position and found that Title VII does prohibit sexual orientation discrimination.¹⁵ So, at least in these courts, an employer may be held liable for discrimination based on sexual orientation, just like any other protected category under Title VII.

Unfortunately, the Supreme Court has not weighed in on this important topic to resolve the tension between the circuit courts and the EEOC (and certain district courts). It’s hard to say whether the Supreme Court will decide this issue soon, but the Court’s interest in cases addressing LGBT rights, such as the Gloucester County School Board v. G.G. case (involving issues of a school district’s obligations to a transgender student) that will be addressed this term, makes it likely that this issue will come before the Court eventually.

So until the Court decides whether Title VII prohibits sexual orientation discrimination, what’s an employer to do? After all, a mistake here –- even one made in good faith — could cost an employer Here are three things employers can do right now to minimize their liability:

Update your anti-harassment policy to include sexual orientation. While the weight of legal authority says that LGBT employees do not have claims for sexual orientation discrimination under Title VII, that trend is shifting. The EEOC’s position is clearly at odds with most of the case law, but as the agency enforcing federal discrimination laws, it has the authority to file lawsuits against employers who thumb their noses at it. A number of lower courts have listened, holding that Title VII does prohibit sexual orientation discrimination. Even if you disagree with the EEOC’s position, do you want to be the long and expensive test case that goes to the Supreme Court?
Train your employees on your policies. A written policy isn’t any good unless your employees –– particularly your managers –– know about it. It’s smart to periodically train your employees on sexual and other types of harassment. Make training on sexual orientation discrimination part of it. Ensure your employees know that your company prohibits discrimination on the basis of sexual orientation just as it does discrimination on other protected bases.
Make sure to follow through. It’s easy to talk the talk, but make sure you walk the walk. Just as you should not tolerate racial slurs and derogatory comments about women in the workplace, employees need to know that offensive comments about gay, lesbian and transgender individuals are also out of bounds. If someone makes a complaint of sexual orientation discrimination, management should investigate and take prompt remedial action, just as it would with any other type of complaint.

When it comes to LGBT rights and protections, the legal world is in a state of flux. For employers, that means a lot of uncertainty, but you don’t have to be held captive by uncertain times. Be proactive now and help limit the potential of future liability.

^{1. Romer v. Evans, 517 U.S. 620 (1996).}

^{2. Lawrence v. Texas, 539 U.S. 558, 578 (2003).}

^{3. United States v. Windsor, 133 S. Ct. 2675 (2013).}

^{4. Obergefell v. Hodges, 135 S. Ct. 2584, 2696 (2015).}

^{5. Kimberly Hively v. Ivy Tech Community College, No. 15-1720, slip op. at 33 (7th Cir. Aug. 1, 2016). 5.}

^{6. Id. at 6.}

^{7. See, e.g., Employment Non-Discrimination Act of 2013, H.R. 1755, 113th Cong. (2013).}

^{8. 490 U.S. 228, 251 (1989).}

^{9. Id. at 251.}

^{10. See, e.g., Vickers v. Fairfield Med. Ctr., 453 F.3d 757 (6th Cir. 2006).}

^{11. EEOC Appeal No. 0120133080, 2015 WL 4397641 (July 16, 2015).}

^{12. Id. at 5.}

^{13. Id. at 6.}

^{14. Id.}

^{15. Isaacs v. Felder Services, LLC, 143 F. Supp. 3d 1190 (M.D. Ala. Oct. 29, 2015) (holding claims of sexual orientation-based discrimination cognizable under Title VII); Terveer v. Billington, 34 F. Supp. 3d 100 (D.D.C. 2014) (same); Heller v. Columbia Edgewater Country Club, 195 F. Supp. 2d 1212, 1222 (D. Or. 2002) (“Nothing in Title VII suggests that Congress intended to confine the benefits of that statute to heterosexual employees alone.”); Videckis v. Pepperdine Univ., 150 F. Supp. 3d 1151 (C.D. Cal. Dec. 15, 2015) (finding sex discrimination necessarily includes sexual orientation discrimination under Title IX); Equal Employment Opportunity Commission v. Scott Medical Health Center, No. 16-225 (W.D. Pa. Nov. 4, 2016) (denying defendant’s motion to dismiss and finding that allegations of sexual orientation discrimination are covered by Title VII).}

OSHA Clarifies Discipline, Retaliation and Drug Testing Commentary

When the Occupational Safety and Health Administration (OSHA) released its 2016 final rule requiring the electronic reporting of workplace injury and illness reports, it included controversial provisions on discriminatory discipline, retaliation, and even post-incident drug testing by employers. The uproar was instantaneous, with industry groups quickly filing lawsuits challenging OSHA’s authority to enforce the rule. Originally scheduled to go into effect on August 10th, the effective date for the new anti-retaliation rule was pushed back by OSHA until November 1st, and more recently, until December 1st.

In the interim, Dorothy Dougherty, OSHA’s Deputy Assistant Secretary, issued an interpretation memorandum designed to explain the anti-retaliation and injury reporting procedures in more detail. The interpretation may help clarify what your organization must do in order to comply with the final rule – even if it doesn’t make the rule more palatable.

Reasonable Procedures For Employees To Report Workplace Injuries/Illnesses

An employer violates OSHA’s new final rule if it either fails to have a procedure for employees to report work-related injuries or illnesses, or its reporting procedure is unreasonable. OSHA states that this requirement is not new, as it was implicit in the previous version of the rule. But now, it is an explicit employer requirement.

OSHA considers a reporting procedure to be reasonable if it is not unduly burdensome and would not deter a reasonable employee from reporting an injury or illness. Examples of what it considers reasonable and unreasonable are as follows:

Reasonable

Requiring employees to report a work-related injury or illness as soon as practicable after realizing they have a reportable incident, such as the same or next business day, when possible
Requiring employees to report work-related injuries or illnesses to a supervisor through reasonable means, such as by phone, email or in person.

Unreasonable

Requiring ill or injured employees to report in person if they are unable to do so
Disciplining employees for failing to report “immediately” if they are incapacitated because of the injury or illness
Disciplining employees for failing to report before they realize they have a work-related injury that they are required to report
Unnecessarily cumbersome or an excessive number of steps to report a work-related injury or illness

In short, if your procedure allows employees to report workplace injuries and illnesses within a reasonable amount of time after they realize they have experienced a reportable event, and the procedure does not make employees jump through too many hoops, it will be reasonable and comply with the final rule.

Anti-Retaliation Provision Explained

Retaliating against employees for reporting work-related injuries or illnesses has long been unlawful. To issue a citation under section 1904.35(b)(1)(iv), OSHA must have reasonable cause to believe that an employer retaliated against an employee by showing:

The employee reported a work-related injury or illness;
The employer took adverse action against the employee (i.e., action that would deter a reasonable employee from accurately reporting a work-related injury or illness); and
The employer took the adverse action because the employee reported a work-related injury or illness.

As in most employment retaliation cases, the third element on causation is often the toughest to prove. The determination is made on a case-by-case basis, depending on the specifics facts in any particular case.

OSHA has focused its commentary primarily on three types of potentially retaliatory actions—discipline policies, incentive programs, and post-accident drug testing. OSHA’s recent interpretation helps shed light on how employers should address these three issues to avoid a citation for a violation of the anti-retaliation rule.

Disciplining Employees For Violating Work Safety Rules

Employers violate the anti-retaliation provision by disciplining or terminating employees for reporting a work-related injury or illness. But, if an employer has a legitimate business reason for imposing discipline, such as the employee’s violation of a workplace safety rule, then there is no retaliation and no violation.

OSHA states that the primary inquiry is whether the employer has treated other employees who similarly violated a safety rule the same way – in other words, did the employer impose the same adverse action regardless of whether the other employees reported a work-related injury or illness. If the rule is consistently applied, then no retaliation exists. However, if the employer disproportionately disciplined employees for violating a rule when they reported workplace injuries, or the employer ignored violations of the safety rule when there was no injury or illness, OSHA may find that the actual reason for the discipline was the reported injury or illness rather than the rule violation.

Incentive Programs

OSHA does not prohibit employers from having safety-related incentive programs. But, it does prohibit employers from withholding a benefit or otherwise penalizing an employee because of a reported injury or illness. OSHA provides this example: if an employer raffles off a $500 gift card at the end of each month in which there are no workplace injuries, such an incentive program would violate the anti-retaliation provision as it withholds the incentive (i.e., the $500 gift card) when an employee reports a work-related injury. On the other hand, an acceptable alternative would be for the employer to raffle off a gift card each month in which employees universally comply with legitimate safety rules, such as using required fall protection and following lockout-tagout rules. The key is whether the employer is withholding a benefit because of a reported work-related injury. Incentive programs that penalize the reporting of injuries and illnesses are likely to result in an OSHA citation.

Post-Accident Drug Testing

One of OSHA’s more troubling and confusing anti-retaliation position is its stance that drug testing employees who report a work-related injury or illness can be considered retaliation. Many employers impose drug testing following any workplace accident or incident that results in injuries. OSHA states that while it does not prohibit employers from drug testing employees who report work-related injuries, employers must have an objectively reasonable basis for such testing.

So what is an objectively reasonable basis for testing? OSHA states that it will consider factors including whether the employer has a reasonable basis for concluding that drug use could have contributed to the injury or illness, whether other employees involved in the incident that caused the injury were also tested (or whether only the employee who reported an injury was tested), and whether the employer has a heightened interest in determining if drug use could have contributed to the injury due to the hazardousness of the work being performed.

In addition, OSHA will consider whether the drug test is capable of measuring impairment at the time the injury occurred, where such test is available. In its interpretive memo, though, OSHA states that at this time, the agency will consider this factor for tests that measure alcohol use, but not for tests that measure the use of any other drugs.

The bottom line is that OSHA is looking whether an employer is using drug and/or alcohol testing as a form of discipline against employees who report a workplace injury, which would be retaliation. Consequently, post-accident drug testing is permitted if all workers involved in the accident are tested in order to gain insight into the cause of the accident. But drug testing an employee whose injury could not possibly be related to drug use, such as a repetitive strain injury, would be seen as retaliation.

Key Takeaways

Assuming that the anti-retaliation rules survive their legal challenges, employers should prepare to implement a reasonable procedure for employees to report work-related injuries and illnesses. Organizations should review any safety-related incentive programs and remove any punitive effects or withholding of benefits/incentives if an employee reports a workplace injury. When adopting and enforcing drug testing policies, be certain to test all workers involved in a workplace incident, not just those who were injured or reported an injury. And last but not least, be very mindful when deciding to discipline or terminate an employee who has reported a workplace injury or illness. Without a legitimate, well-document business reason for the discipline that is unrelated to the injury report, you may find your business cited for retaliation.

ARTICLE BY Matthew Linton of Holland & Hart LLP

Will Republicans Embrace Center for Medicare and Medicaid Innovation’s Authority?

The Affordable Care Act (ACA) and the Medicare and CHIP Reauthorization Act (MACRA) provided the Centers for Medicare & Medicaid Services (CMS) and the newly created Center for Medicare and Medicaid Innovation (CMMI) tremendous authority. With Republicans set to take control of both the White House and Congress, the future of that authority is very much in question.

The ACA created CMMI to test innovative payment and service delivery models to reduce program expenditures and improve care. To carry out this goal, the ACA allows CMMI to waive any Medicare provision of the Social Security Act, as well as select Medicaid provisions, that may be necessary to carry out and evaluate demonstration policies. If the demonstrations prove effective, CMS may implement the program nationally.

Over the past few years, CMS has implemented numerous demonstration projects under CMMI’s authority. These include delivery reform demonstrations such as the Medicare Shared Savings Program and Pioneer ACO program, as well as the Financial Alignment Initiative, which integrates care for dual-eligible individuals in select states. Demonstrations such as the Medicare Advantage Value-Based Insurance Design Model have focused on encouraging the use of high-value clinical services, while others, such as the Diabetes Prevention Program, have focused on preventive service models. In July of this year, CMS proposed expanding the Diabetes Prevention Program nationally.

While there have been successes, CMS’s use of this authority has not been without controversy and criticism. In September of this year, Rep. Tom Price, along with over 150 members of Congress, sent a letter to CMS condemning CMMI’s large mandatory demonstrations, citing that “CMMI has exceeded its authority, failed to engage stakeholders, and has upset the balance of power between the legislative and executive branches.” This letter specifically attacked the Cardiac Bundled Payment Model, the Comprehensive Care Joint Replacement Model, and notably, the Part B Drug Payment model as problematic programs. Further, the House Budget Committee held a hearing criticizing the authority granted CMS and CMMI to effectively usurp the role of Congress in creating public policy. With Rep. Tom Price, current Chairman of the House Budget Committee, reportedly under consideration for HHS secretary in the Trump Administration, the future for CMMI is very much in question.

It is possible that Republicans will now move to defund or otherwise limit CMMI’s authority given their recent attacks on it. However, CMMI provides an avenue to test and garner buy-in for new models of care that otherwise did not exist. Republicans may realize the opportunity that CMMI could provide as they transition away from the Affordable Care Act. If Republicans want to maintain this authority or provide states greater authority to demonstrate coverage models, they could leverage CMMI’s authority to do so.

ARTICLE BY Eli Greenspan, Lauren M. Moldawer & Rodney L. Whitlock of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Immigration Policy Choices Under the New Administration

Now that the election is over, focus turns to the U.S. immigration policy of President-elect Donald J. Trump’s administration over the next four years. Forecasts of this type are never easy with any new President; the task is even more difficult this year because immigration policy dialogue during the campaign focused so heavily on illegal immigration and the Mexican wall. The critical questions to which our clients seek answers concern the policies that will define “business” immigration.

In this Special Immigration Alert, we will discuss 10 areas that impact business immigration and explore potential paths that the Trump administration might follow in addressing them.

Executive Orders: During the campaign, President-elect Trump indicated that he would vacate all executive orders issued by the Obama administration In the immigration area, the relevant executive orders would, in large part, consist of the Deferred Action for Childhood Arrivals (“DACA”) and the Deferred Action for Parents of Americans (“DAPA”). As our readers know, DACA and DAPA have been subject to numerous legal challenges since these executive orders were issued. Nevertheless, thousands of foreign nationals (“FNs”) received work authorization under these programs and are now employed within the United States. If DACA and DAPA are vacated, these FNs would lose their temporary protection against removal and their right to work in the United States. Employers need to start planning now for this possibility.
Temporary Protected Status (“TPS”): Under the immigration laws, the U.S. President has authority to grant TPS to citizens of any country who are temporarily unable to return to their home country due to ongoing armed conflicts or natural disasters. Those in TPS status are granted temporary refuge here and permitted to work. If it follows several recommendations of the Center of Immigration Studies, as some Trump supporters have suggested, the Trump administration could restrict the circumstances under which TPS grants are issued and terminate current grants earlier, requiring affected FNs to return home sooner.
Free Trade Agreements (“FTAs”): A major focus of the Trump campaign was the renegotiation/repeal of the North American Free Trade Agreement (“NAFTA”). The United States is a party to other FTAs with Chile, Singapore, and Australia that were not a primary focus of the campaign. Each of these FTAs contains immigration provisions. The questions are what, if anything, the Trump administration will do regarding these FTAs and what impact, if any, the administration’s actions may have on continued immigration under these FTAs or on the status of those FNs already here.

The concern about the continuing viability of these FTAs as a source for immigration is real, but the likelihood of an immediate abrogation of these FTAs and their immigration provisions is not great. At the outset, it seems that the Trump administration will focus more on immigration enforcement than on the FTAs, given the emphasis in candidate Trump’s campaign regarding the need to address southern border security issues and the problems posed by aliens in this country who have committed crimes. Moreover, even if cancelling these FTAs was formally pursued by the administration, most contain provisions that require six or more months of prior notice, and Congress may want to weigh in on this process as well.
Nonimmigrant Classifications (H-1B/L-1B): During the campaign, candidate Trump indicated that he wanted to revamp the H-1B program because it took jobs away from Americans. Since the H-1B program is largely statutory, it would be hard for any change to be effected immediately. With a Republican Congress, and historical Democratic opposition to the H-1B program, however, this could be an issue on the legislative agenda for 2017 if there is public pressure for immigration reforms. While the ultimate package is uncertain, there is a possibility of aligning the entire H-1B program with the current requirements for H-1B dependent employers. H-1B dependent employers are those that employ 15 percent or more H-1Bs as part of their overall workforce, and they are required to demonstrate the absence of qualified U.S. workers before an H-1B petition can be approved for a new employee.

Although the President-elect and his transition team have been relatively silent on other temporary working visa classifications, the L-1B classification has been the subject of controversy since December 2003, when Business Week published an article entitled “A Loophole as Big as a Mainframe.” The gist of the article was that third-party consultants were able to circumvent the salary requirements of the H-1B program by classifying their IT professionals as experts with “specialized knowledge” under the L-1B category. Following this article, Congress passed the L-1B Reform Act, which put limitations on the ability of consulting firms to place L-1B employees on worksites that were not their own. U.S. Citizenship and Immigration Services (“USCIS”) also began issuing progressively narrow interpretations of the L-1B definition of “specialized knowledge” to address this issue. This trend continued until March 2015, when USCIS issued what the agency characterized as “more relaxed” guidelines. In practice, the L-1B classification remains a volatile area in business immigration and, thus, may attract scrutiny from the new administration.

Like the H-1B program, the L-1B classification is statutory and immediate changes to the program are therefore unlikely. However, the new administration could issue guidance returning USCIS back to an even more restrictive interpretation of “specialized knowledge,” and this would have a much more immediate impact on the eligibility of FNs for this classification. Here also, the new administration could ramp up the number of anti-fraud site visits at L-1B employers to make sure that they comply with the L-1B Reform Act. If this occurs, it likely would have a disproportionate impact on smaller organizations that do not utilize the blanket L program.
F-1 Optional Practical Training (“OPT”): OPT has become an increasingly controversial component of the U.S. educational system. Prior regulations allowed foreign students up to one year of OPT work authorization following graduation. Recent regulatory changes have increased the authorized OPT work period up to three years if the FN has a STEM (Science, Technology, Engineering, and Mathematics) degree and the employer is registered with and using E-Verify. Several people reportedly advising the President-elect on immigration policy have expressed opposition to OPT because, in their view, it siphons employment opportunities from U.S. workers. Under the Trump administration, we can expect this debate to continue. The alteration or elimination of OPT work authorization, however, would require changes in the existing regulations. These changes do not appear to be imminent.
Spousal Employment: Many spouses of FNs legally in the United States are authorized by statute to work. Examples are the spouses of E and L nonimmigrants and applicants for permanent residence. In many other cases, however, spousal employment rests on regulatory provisions. Examples include employment authorization granted to the H-4 spouses of H-1B nonimmigrants who are the beneficiaries of approved I-140 petitions, or who are permitted to work here beyond six years pursuant to Section 106(a) of the American Competitiveness in the Twenty-First Century Act of 2000. Any administration emphasis on creating more job opportunities for Americans suggests that these regulatory provisions might be part of efforts to review the existing immigration system. Revising those provisions, however, cannot be accomplished by executive order and will require a regulatory change.
Visa Processing: Most FNs seeking admission to the United States must first apply for and secure a visa. During this visa application process, the U.S. Department of State conducts security and background checks to make sure that the FN does not pose a threat or otherwise violate U.S. immigration requirements. Throughout the campaign, candidate Trump repeatedly promised to enhance the current U.S. immigration vetting process to prevent terrorists and criminals from entering the country. If the vetting process for FNs applying for U.S. visas is materially changed, this may significantly delay the immigration process for everyone.

At the same time, the Visa Waiver Program (“VWP”) has come under additional scrutiny because it represents an exception to the standard visa application process. Given President-elect Trump’s stance on tightening the security screens on any FN seeking admission to the United States, it is likely that the VWP will also be under scrutiny in any Trump administration immigration policy review.
Expansion of E-Verify: E-Verify is the system offered by the federal government to check the identity and work authorization of all new employees. With certain exceptions, it currently is voluntary for most employers, except in states that mandate its use. Arizona was the first state to require employers to use E-Verify or risk loss of their license to do business in the state, and the state statute imposing this requirement, the Legal Arizona Workers Act, was upheld by the U.S. Supreme Court in Chamber of Commerce v. Whiting, 563 U.S. ___ (2011). With its emphasis on immigration enforcement and a sympathetic Congress, the Trump administration might place mandatory use of E-Verify high on its legislative agenda.
Worksite Enforcement: The Trump administration is likely to increase the amount of worksite enforcement significantly. President Obama has largely managed worksite enforcement through large fines levied by Immigration and Customs Enforcement for Form I-9 violations; the Obama administration expected this policy to deter employers from hiring and retaining FNs not authorized to work. Under a Trump administration, we expect to see less Form I-9 enforcement through fines and more enforcement through criminal prosecutions, as well as possible unannounced employer worksite inspections aimed at those suspected of employing undocumented workers.
Proposed Regulations: At the present time, there are several proposed regulations that are working their way through the federal government’s rulemaking process. This includes the Obama administration’s proposed rules on international entrepreneurs and the U.S. Department of Labor’s proposals to modernize the PERM labor certification process. Given President-elect Trump’s often expressed opposition to new regulatory proposals and support for rolling back existing regulations, the future of these and any other regulatory initiatives is in doubt.

On November 18, 2016, USCIS issued a final rule containing improvements to the EB-1, EB-2, and EB-3 immigrant classifications that the Obama administration designed to retain FNs who are the beneficiaries of employer-sponsored petitions in those classifications. According to USCIS, this rule will provide (i) improved process and certainty for employers seeking to sponsor and retain FN employees, (ii) greater stability and job flexibility for these FN workers, and (iii) more administrative consistency to USCIS adjudications of the applications involving these FN workers. Under the Congressional Review Act (“CRA”), 5 U.S.C. §§ 801-08, Congress essentially has 60 days to review and reject any new regulation. By publishing this rule now, the Obama administration may avoid rejection by Congress and the Trump administration under the CRA. Any new rules issued within 60 days of the inauguration, however, may be subject to the CRA’s provisions.

Overall Outlook

Much of this year’s presidential campaign rhetoric focused on the Mexican wall, restrictive immigration policies, and the mass incarceration and/or deportation of undocumented aliens in this country. At the present time, however, the budgetary and enforcement capacity constraints appear likely to limit the immediate realization of any such policies. Nevertheless, the campaign has stimulated a national debate on immigration and, thus, has increased the possibility of more comprehensive immigration reform being proposed later in the Trump administration.

This possibility is underscored by the reality that any uncertainty as to immigration and enforcement may have a serious impact on industries, such as agricultural and hospitality, which traditionally employ undocumented FNs, and on such sectors as technology, financial services, and health care and life sciences, which rely more on documented skilled and highly educated FNs. These industries are (i) important to the national economy, (ii) major employers in many congressional districts, and (iii) likely to beseech elected representatives to solve the immigration “problem.” The harsh truth is that America may not have enough of the necessary and willing workers to fill all the positions that a growing economy demands. In concert, these factors may drive the debate on immigration reform because the United States needs a comprehensive solution to grow the economy as the new administration has promised.

There is significant agreement that the current immigration system is antiquated and needs overhaul. Aside from the enforcement issues, the United States needs an immigration system that facilitates the admission of FNs whose labor and/or skills are critical to economic growth and who will not displace or supplant American workers. The ultimate irony may be that the enormous costs of massive immigration enforcement and the economic consequences to employers of American workers from overly restrictive immigration laws may be the catalyst for meaningful immigration reform.

ARTICLE BY Robert S. Groban, Jr., Pierre Georges Bonnefil, Patrick G. Brady, Jungmin Choi & Jang Hyuk Im of Epstein Becker & Green, P.C.

Texas Judge Not Persuaded, Permanently Enjoins DOL’s New Reporting Rule

In a major victory for the business community, Judge Sam R. Cummings of the U. S. District Court for the Northern District of Texas issued a permanent nationwide injunction blocking the Department of Labor (DOL) from enforcing its new “persuader” rule. National Federation of Independent Business, et al. v. Perez, et al., Case No. 5:16-cv-00066. The rule attempted to expand disclosure requirements by employers and their consultants (including attorneys) related to union-organizing campaigns.

The new rule, which Judge Cummings had preliminarily enjoined prior to its effective date of July 1 of this year, would have greatly increased the reporting requirements under Section 203 of the Labor Management and Reporting Disclosure Act. That section requires employers and their labor relations consultants to disclose the terms (including financial terms) of any arrangement by which the consultant provides services that are intended to directly or indirectly persuade employees concerning their rights to organize a union or to bargain collectively with their employer.

For years, the DOL took the position that no reporting was required unless the consultant had direct contact with employees by way of in-person meetings, telephone calls, letters, or emails. Similarly, no reporting was required if the consultant’s activities were limited to providing sample materials such as speeches, postings, letters to employees, and the like that the employer was free to accept, reject, or modify.

However, the new persuader rule expanded the disclosure requirements to include indirect contact with employees by the consultant, including:

Directing, planning, or coordinating the efforts of managers to persuade employees
Providing materials such as speeches, letters, or postings that are intended to persuade employees
Conducting union avoidance seminars if the consultant assists the employer in developing anti-union strategies
Developing personnel policies intended to persuade employees in the exercise of their organizational or collective bargaining rights.

The attorneys general for 10 states as well as various business groups challenged the new rule as infringing on employers’ First Amendment rights and conflicting with the attorney-client privilege. Judge Cummings agreed that the rule is unlawful and should be set aside. Presently, it is unknown if DOL intends to appeal Judge Cummings’ order.

ARTICLE BY Henry W. Sledz Jr. of Schiff Hardin LLP

The Unknown Future Of The Affordable Care Act

Donald Trump’s victory to become the next president of the United States, and the Republican Party’s continued control of the United States Senate and House, will likely have a significant impact on the future of the Affordable Care Act (ACA). President-elect Trump (Trump) has vowed to immediately dismantle the ACA. To date, Trump has provided only a broad outline of what exactly he plans to replace the law with, such as the following:

Eliminating ACA requirements which generally require (1) individuals to maintain health insurance, and (2) employers with more than 50 full time employees to offer affordable major medical plan coverage or run the risk of paying penalties;
Eliminating tax subsidies that eligible individuals can use to purchase coverage and/or offset costs under health insurance exchanges;
Expanding the use of health savings accounts to pay deductibles, copayments, etc.;
Establishing tax breaks to allow taxpayers to deduct premiums they pay for individual health insurance policies;
Allowing health insurance across state lines;
Allowing states to manage Medicaid funds;
Modifying or eliminating the ACA’s “essential health benefits” requirements;
Expanding age rating bands (increasing the range of premiums that will be allowed); and
“Modernizing” Medicare.

Despite his general opposition to the ACA, Trump has expressed support for ACA rules which prohibit insurers and employer plans from excluding coverage for expenses related to preexisting conditions. However, those prohibitions force insurance companies and employer plans to bear significant costs. The ACA’s employer and individual coverage mandates were intended to make the pre-existing condition exclusions more palatable to payers by forcing healthy individuals into the applicable insurance pools. Consequently, it is unclear how Trump would preserve the pre-existing condition exclusions yet eliminate the employer and individual mandates.

In addition, the ACA contains hundreds of provisions affecting hospitals, corporations, Medicare, health care quality and integrity, the health care workforce, biosimilars, health care prevention and other issues unrelated to what most people think of as “Obamacare.” To date, Trump appears not to have taken any public position on these provisions.

ARTICLE BY Molly R. Berkery, Todd M. Cleary, John E. Donahue, Thomas N. Shorter, Charles G. Vogel & Jed A. Roher of Godfrey & Kahn S.C.

The National Law Forum

Elections 2016, Trans Pacific Partnership, TTIP: Trade Talk 7-13 November 2016

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