The FCC Responds to Comcast’s Negative Option

FCC ComcastOn Tuesday, October 11, the Federal Communications Commission (“FCC” or “Commission”) announced the release of an Order and Consent Decree with cable behemoth Comcast Corporation (“Comcast”) in which the company agreed to pay US$2.3M to settle an FCC investigation into whether Comcast employed negative option billing to wrongfully charge for services and equipment customers never authorized.  The settlement also requires Comcast—by some accounts the largest cable company in the country with 22.3M subscribers—to adopt a sweeping, highly detailed five-year compliance plan designed to force the company to obtain customers’ affirmative informed consent prior to adding charges to their bills.  According to the FCC’s press release, the settlement amount is the largest civil penalty the agency has ever assessed against a cable operator.

What is Negative Option Billing and How Does the FCC Regulate It?

“Negative option billing” is a practice similar to “cramming” in the telecommunications context, wherein a company places unauthorized charges on a consumer’s bill, requiring subscribers to pay for services or equipment they did not affirmatively request.  In addition to the obvious nuisance of unknowingly paying for unauthorized services and equipment, the FCC’s action is also aimed at protecting consumers from “spend[ing] significant time and effort in seeking redress for any unwanted service or equipment, which is often manifested in long telephone wait times, unreturned phone calls from customer service, unmet promises of refunds, and hours of effort wasted while pursuing corrections.”  For these and other consumer protection reasons, negative option billing is illegal; it violates both Section 623(f) of the Communications Act of 1934, as amended (the Act), and Section 76.981(a) of the Commission’s rules.  Specifically, 47 U.S.C. § 543(f) explicitly prohibits negative billing options, noting also that a failure to refuse an offer is not the equivalent of accepting the offer.

As the FCC clarified in a 2011 Declaratory Ruling, while a customer does not have to know and recite specific names of equipment or service in the course of ordering those products, the cable operator must have “adequately explained and identified” the products in order for a subscriber to “knowingly accept[] the offered services and equipment by affirmative statements or actions.”

Section 76.981(b) explains that the negative billing option does not prevent a cable operator from making certain changes without consumer consent, such as modifying the mix of channels offered in a certain tier, or increasing the rate of a particular tier (unless more substantive changes are made, such as adding a tier, which then increases the price of service).

The FCC appears to have found only one violation of the negative option billing prohibition previously, and in that context, the Commission used its discretion to refrain from imposing a penalty.  More than 20 years ago, in 1995, the Commission acted on a complaint and investigated Monmouth Cablevision for allegations that the company—which had previously rented remote controls to their subscribers—violated FCC rules when it removed the leasing fee on subscriber bills and instead included a $5 sale price for the remotes. In that case, the Commission explained that, while “in a literal sense, this is the same equipment that the customer previously rented, we cannot find that these customers affirmatively requested to purchase these remotes rather than renting them.”  The Commission went on to explain that “changing the way in which existing service and equipment is offered, e.g., from leasing to selling,” did, in fact, violate the Commission’s negative option billing prohibition.  However, due to the “de minimis difference between the $ 5.00 purchase price and the total rental price” and because of the “large number of regulatory requirements that became effective on September 1, 1993, and the associated compliance difficulties,” the then Cable Services Bureau chose not to impose a penalty.  Because state governments have concurrent jurisdiction over negative billing practices, cable companies have faced court action for these and similar allegations for decades.

The FCC Investigation

Based on “numerous” consumer complaints, the FCC’s Enforcement Bureau opened an investigation in December of 2014 into whether Comcast engaged in negative option billing.  In the course of its investigation, the FCC determined that customers were billed for “unordered services or products, such as premium channels, set-top boxes, or digital video recorders (DVRs).”  Beyond not authorizing these products, in some cases the FCC claims that subscribers specifically declined additional services or upgrades, only to be billed anyway.  In fact, the Order—which is part of the settlement but generally not subject to the non-government party’s review prior to release—details numerous complainants that claim to have been given the runaround by Comcast customer service representatives, with one customer (Subscriber A) claiming that, after three hours on the phone and multiple transfers, she was ultimately transferred to a fax machine.  Another complainant (Subscriber B) asserted that he determined Comcast had wrongfully billed him for approximately 18 months for an extra cable box he never ordered, and that he spent another year calling to request (unsuccessfully) that the company remove the charge.

The Settlement

The Order and Consent Decree are striking in terms of the level of transparency exhibited throughout.  Unlike most FCC settlements, in which facts and legal arguments are closely guarded and held confidential, this Order reads more like a Notice of Apparent Liability for Forfeiture, where the FCC explains the underlying facts and legal theories in substantially more detail.  Especially noteworthy here, is that unlike majority of the other settlements released by the FCC’s Enforcement Bureau since Travis LeBlanc took the helm, neither the Order nor the Consent Decree include a statement admitting liability.  Rather than an admission of liability by Comcast, the Consent Decree includes a lengthy discussion of the perspectives of both Comcast and the Commission.  Besides arguing that most of the services were authorized and that unauthorized services inadvertently added to consumer bills were removed, Comcast—represented by FCC regular and first Enforcement Bureau Chief David Solomon—argued that the Commission itself “has cautioned against an expansive application of the Negative Option Billing Laws, stating that a broad reading of the rule could lead to harmful consequences.”  Moreover, Comcast asserted that “the Negative Option Billing Laws are not per se prohibitions, but instead are targeted only at affirmatively deceptive conduct on the part of cable operators, and Commission enforcement requires a demonstrated pattern of violation,” rather than an erroneous charge “occasioned by employee error” that does not involve deceit or intent.  For its part, the Commission asserted that it believes “the Customer Complaints and other facts adduced during the Investigation are evidence of violations of Section 623(f) of the Act and Section 76.981 of the Commission’s Rules.”

Moreover, the settlement requires that Comcast be required to comply with the terms of the Order and Consent Decree for an uncharacteristically long term—i.e., five years instead of the three years the Bureau has normally insisted upon.

In addition to the US$2.3M civil penalty, Comcast must implement a highly detailed compliance plan.  Although in many instances, Comcast is given until July 2017 to create and implement requisite processes, the level of detail applied to the cable company’s alleged transgressions is similar to that found in certain cramming and slamming settlements.  In those instances, however, the Commission is usually acting against less sophisticated targets with decidedly fewer resources that cannot retain compliance personnel with the expertise to design, develop, and implement their own expansive compliance plans.  Among other things, and as explained in five pages of detail in the Consent Decree, the company is required to:

obtain customers’ affirmative informed consent prior to charging them for new services or equipment; send customers an order confirmation, separate from any other bill, that clearly and conspicuously describes newly added services and equipment and their associated charges; offer mechanisms to customers that, at no cost, enable them to block the addition of new services or equipment to their accounts; implement a detailed program for redressing disputed charges in a standardized and expedient fashion; limit adverse actions (such as referring an account to collections or suspending service) while a disputed charge is being investigated; designate a senior corporate manager as a compliance officer; and implement a training program to ensure customer service personnel resolve customer complaints about unauthorized charges.

Going forward, it appears that the Commission will have a substantial amount of insight into the way the company conducts its business vis-à-vis its customer service responsibilities, in the form of annual reports and extended document retention requirements.

Lessons from the Settlement

Over the past two and a half years, it has become more apparent that the FCC is willing to apply old rules in new ways, and to continue to be an aggressive enforcer of the rules in general, but particularly when it comes to protecting consumers.  Although the Commission has issued Enforcement Advisories in the past, alerting companies that it is on the lookout for noncompliance in certain areas, this US$2M+ action is proof that regulatees should not wait for FCC warnings before ensuring they are compliant with the rules.  Companies should take heed and adopt a proactive approach to understanding the rules applicable to them based on their business operations.

ARTICLE BY Koyulyn K. Miller of Squire Patton Boggs (US) LLP

© Copyright 2016 Squire Patton Boggs (US) LLP

Dynamic Political and Public Policy Landscape in DC on Pharmaceutical Issues

Pharmaceutical IssuesThe post-election period — from the lame duck congressional session to the first 100 days and beyond of a new Administration and Congress — is expected to be a time of extraordinary, if not unprecedented, public policy debate on issues that impact pharmaceutical/life sciences companies and interest groups. These issues present both significant threats and possible opportunities to all stakeholders.

On the positive side, the 114th Congress has unfinished business in the form of the House’s 21st Century Cures Act and the Senate’s companion package of Medical Innovation bills, provisions of which are intended to streamline FDA review and approval processes as well as authorize key programs such as the Precision Medicine Initiative. And Prescription Drug User Fee (PDUFA) reauthorization is also right around the corner. These positive developments could come at a cost to the life sciences industry, however, with growing indications that a proverbial perfect storm is brewing in the U.S. on issues surrounding pharmaceutical pricing.  The presidential candidates, who find little else on which to agree, have criticized drug prices and espoused strong support for proposals — including ones that would allow HHS to directly negotiate with manufacturers and the importation of lower-priced drugs from Canada and elsewhere — that are anathema to industry. As shown in the pending Medicare Part B national demonstration project, presidential administrations, in addition to the bully pulpit, have used their perceived regulatory authority to elevate the executive branch role in the drug pricing debate in the absence of congressional action, and we would expect that to continue in the next Administration.

Furthermore, recent developments suggest that whoever the next president is might find willing partners in both parties on Capitol Hill on pharmaceutical pricing-related issues, regardless of the outcome of the general election in Congress. As evidenced in recent high profile oversight and investigations hearings, criticism of the pharmaceutical industry has become bipartisan fodder. Members on both sides of the aisle have to answer a growing chorus from their constituents who seek relief from high drug prices.  While Republicans historically provided some level of firewall for efforts to fend off price controls and other adverse policy prescriptions, the reservoir of political capital with the GOP is arguably less deep post enactment of the Affordable Care Act.  At the same time, there are fewer moderate Democrats who in the past helped defend the industry.

Growing public opinion and ongoing critical publicity around drug prices contribute to a political environment that is more likely to result in active consideration of a variety of unfavorable legislative proposals in the drug pricing space. To date, there has been a veritable menu of bipartisan options offered, which include, among many others, requiring greater transparency by manufacturers who raise prices above a certain percentage, allowing the government to directly negotiate prices with manufacturers, importation of lower priced drugs, reduction of the data exclusivity for biologics, policy changes to encourage even greater utilization of generics, reform of patient assistance programs, and curtailing of certain practices in patent settlement agreements and REMS programs.

Momentum for any or all of these proposals might further increase if Congress and the Administration pursue a deficit reducing budgetary deal or other policy priorities that must be paid for with policy changes affecting the Medicare program. The prospect for action on anti-industry proposals is further enhanced by the reality that congressional authorization of the industry supported PDUFA will be on tap in 2017.  Because PDUFA is considered “must-pass” legislation, it is recognized as a prime moving vehicle to which any number of healthcare-related proposals might be attached.  It remains uncertain whether pharmaceutical pricing and access will continue to be more of a rhetorical subject or if the rhetoric translates into significant changes in federal policy.  What is virtually certain is that this debate will rage on in the months ahead and that the outcome could have major ramifications for industry — whether or not new laws are ultimately enacted.

Against this backdrop, it is imperative that stakeholders follow the anticipated fast-moving developments, understand the substantive implications and political prospects for various proposals, and, where appropriate, engage in informed advocacy on Capitol Hill with the Administration and the public.

ARTICLE BY Gary A. Heimberg & Joan L. Kutcher of Covington & Burling LLP

© 2016 Covington & Burling LLP

Hillary Clinton’s Intellectual Property Litigation Experience

Hillary Clinton Intellectual PropertyMany people are surprised to learn that Hillary Clinton was an intellectual property attorney when she practiced law from 1977-1992 for the Rose Law Firm.  While the New York Times has reported that former colleagues cannot remember any cases she tried and that court reporters in Little Rock say she appeared in court infrequently, there are at least three reported court decisions on which she is named as counsel.  A review of those decisions provides an interesting glimpse into Clinton’s background with intellectual property.

In a case involving allegations of false advertising, Clinton represented Maybelline Co. in a suit against Noxell Corp. regarding Noxell’s “Cover Girl Clean Lash” mascara product.[1]  According to the complaint, Maybelline’s principal place of business and only factory in the United States was located in North Little Rock, Arkansas.  Maybelline asked the court to restrain Noxell from advertising the Clean Lash mascara as being waterproof.  Maybelline submitted to the court a videotape of a Clean Lash commercial in which a voice-over claimed that “water won’t budge” Clean Lash and that it “laughs at tears,” and then submitted independent laboratory tests contradicting those claims.  Maybelline argued that the commercials were deceptive.  Unfortunately for Clinton, it was found that Maybelline brought suit in the wrong venue because Noxell was not doing business in the Eastern District of Arkansas.[2]  The case was transferred to a court in New York and settled.[3]

In a trademark infringement case, Clinton represented First Nationwide Bank against Nationwide Savings and Loan Association regarding the use of the mark “Nationwide Savings.”[4]  In particular, First Nationwide Bank sought an injunction against the Savings and Loan Association’s use of the phrase “Nationwide Savings” for financial services.  First Nationwide Bank argued that the use of the disputed phrase was likely to cause confusion among customers as to the provider of the financial services and was an attempt by the Savings and Loan Association to benefit from the valuable goodwill and reputation established by First Nationwide Bank.  Clinton helped to secure injunctive relief for the Bank to prevent the Savings and Loan Association from using the mark.

In another case involving allegations of trademark infringement, Clinton represented Holsum Baking Co. against W.E. Long Co.[5] regarding the use of the “Holsum” trademark in the marketing of bakery products.  Long registered the “Holsum” mark on bakery products in Arkansas and later entered into an agreement granting Holsum Baking the right to use the “Holsum” name for advertising purposes in certain areas for three years.  After that time, Holsum Baking began using the composite mark “Holsum Sunbeam” until more than 40 years later when it introduced a wheat bread product and marketed it as “Holsum Grains” with no mention of Sunbeam. Long then contacted the packaging suppliers of Holsum Baking and advised them not to sell packaging bearing the “Holsum” mark to Holsum Baking. Holsum Baking sought injunctive relief to reinstate its packaging source with the “Holsum” mark, arguing that the earlier agreement had been breached or abandoned by the parties and that Holsum Baking had acquired the rights to the “Holsum” mark due to use for more than 44 years.  Clinton helped to secure a preliminary injunction for Holsum Baking.

While the number of reported cases involving Clinton is too small to draw any definitive conclusions, the above three cases demonstrate Clinton’s advocacy for companies that had their IP rights threatened.  Some commentators have criticized Hillary Clinton’s current intellectual property platform as being vague, consisting of passing references to patent litigation reform and copyright policy. However, given her past experience, she may have more detailed thoughts on IP policy–an area that rarely is a focus in presidential campaigns.

ARTICLE BY Justin M. Sobaje of Foley & Lardner LLP
© 2016 Foley & Lardner LLP

[1]  Maybelline Co. v. Noxell Corp., 643 F. Supp. 294 (E.D. Ark. 1986).

[2]  Maybelline Co. v. Noxell Corp., 813 F.2d 901 (8th Cir. 1987).

[3]  Morrison, T.C., “The Regulation of Cosmetic Advertising under the Lanham Act,” 44 Food Drug Cosm. L.J. 49, 57 1989.

[4]  First Nationwide Bank v. Nationwide Sav. & Loan Ass’n, 682 F. Supp. 965 (E.D. Ark. 1988).

[5]  W.E. Long Co. v. Holsum Baking Co., 307 Ark. 345 (Ark. 1991).

Employer Strategies for Surviving Election Season

Employer strategiesOnce again, the “silly season” is upon us. Every four years, battle lines are drawn and many employees take sides, touting their preferred candidate’s merits over what they regard as the utterly despicable nature of the other candidate. Fortunately for employers (and everyone else who values their sanity) this should be over in about a month. I hesitate only because I lived in Florida during the 2000 election, and if you think things are contentious now – pray the current election cycle doesn’t go into overtime.

Free Speech?

It’s only natural for employees to discuss politics at work. But doing so can be disruptive, and if a political discussion gets out of hand, it can lead to confrontations, allegations of assault, harassment, discrimination or retaliation. Generally, private employers may limit and even prohibit political expression in the workplace, such as discussing candidates or issues, wearing or displaying political signs and paraphernalia. What about free speech, you ask? The First Amendment does not apply to private employers – only the government. Still, there are limits. For one thing, the National Labor Relations Act (NLRA) allows political discussions directly connected to the terms and conditions of employment. Second, some states (such as Colorado, Connecticut, Maryland, New Jersey, New York, Oregon, Texas, Virginia and Washington) have laws that prohibit discrimination against employees based on their political affiliation, or from unduly influencing an employee’s vote through intimidation.

Prudent employers should adopt and implement policies advising their employees of what will and will not be tolerated in the workplace during election season. If an employer wants to keep politics separate and apart from the workplace, this is perfectly appropriate – provided of course, that the employer complies with the exclusions outlined by the NLRA, which may be required under state or local law.

Election Day Leave

Another reminder during election season is that most states permit employees to take leave during the workday so they can cast their ballots. The specific laws can vary significantly by state. For instance, some states – but not all – allow voting leave only where the employee would not otherwise have sufficient time to vote before or after their scheduled shift. The majority of states require employees to provide advance notice of voting leave, and also give employers the discretion to determine the specific times during which the employee may be absent from work to vote. With few exceptions, voting leave laws typically allow an employee to be away from work for up to two or three hours during the workday to vote. Similarly, with few exceptions, most states require the employer to pay the employee for the time spent on voting leave. Further, a few states also allow employees to take time off not only to vote, but to serve as election officials.

Other Employer Considerations

Employers seeking to preserve a calm workplace in this silly season – particularly one as heated as this year’s – should try to stay above the fray and consider these strategies:

  • Adopting a neutral stance about the elections while focusing on the business at hand.
  • Review, and if necessary, revise existing policies regarding political expressions at work.
  • Remind employees of the policies on voting and political expression.
  • Check the requirements of state and local laws regarding elections, and particularly anti-discrimination and voting leave laws, to ensure compliance.
  • Educate your front-line supervisors and human resources personnel (especially those tasked with handling leave requests) about the company’s policies and the requirements of state and local laws.
ARTICLE BY Hannesson Murphy of Barnes & Thornburg LLP

© 2016 BARNES & THORNBURG LLP

Election 2016: Trump on Antitrust

Donald Trump AntitrustWhile antitrust policy and enforcement has not received much attention from Donald Trump on the campaign trail, Mr. Trump has made a few notable statements regarding antitrust law that provide hints as to potential antitrust enforcement priorities for a Trump administration. Mr. Trump’s history as both a plaintiff and defendant in antitrust litigation is also notable and unprecedented.

In his 2011 book Time to Get Tough: Making America #1 Again, Mr. Trump addressed the Organization of the Petroleum Exporting Countries (OPEC) specifically in the context of antitrust law. Under the heading “Sue OPEC” Mr. Trump wrote:

We can start by suing OPEC for violating antitrust laws. Currently, bringing a lawsuit against OPEC is difficult. . . . The way to fix this is to make sure that Congress passes and the president signs the “No Oil Producing and Exporting Cartels Act” (NOPEC) (S.394), which will amend the Sherman Antitrust Act and make it illegal for any foreign governments to act collectively to limit production or set prices. If we get it passed, the bill would clear the way for the United States to sue member nations of OPEC for price-fixing and anti-competitive behavior. . . . Imagine how much money the average American would save if we busted the OPEC cartel.

More recently, in a May 2016 interview with Sean Hannity, Mr. Trump made a notable reference to antitrust law in connection with a discussion of Jeff Bezos and Amazon:

[Jeff Bezos is] using the Washington Post for power so that the politicians in Washington don’t tax Amazon like they should be taxed. He’s getting absolutely away. He’s worried about me and he’s, I think he said that to somebody, it’s in some article, where he thinks I would go after him for antitrust, because he’s got a huge antitrust problem because he’s controlling so much, Amazon is controlling so much of what they’re doing. And what they’ve done is, he-he bought this paper for practically nothing, and he’s using that as a tool for political power against me and against other people and, I’ll tell you what, we can’t let him get away with it. . . . So what they’re doing is that he’s using that as a political instrument to try and stop antitrust, which he thinks I believe he’s antitrust, in other words what he’s got is a monopoly and he wants to make sure I don’t get in. So, it’s one of those things. But I’ll tell you what, I’ll tell you what, what he’s doing is wrong and the people are being, the whole system is rigged – you see a case like that, the whole system is rigged. . . he’s using the Washington Post, which is peanuts, he’s using that for political purposes to save Amazon in terms of taxes and in terms of antitrust.

In addition to his statements, there is also Mr. Trump’s personal history as an antitrust litigant to be considered. In January 2016, former FTC Chairman Bill Kovacic was quoted as observing that “Donald Trump is the only presidential candidate in my lifetime to be a plaintiff in an antitrust case.

Indeed, as detailed in the American Bar Association’s Antitrust Source earlier this year, Mr. Trump was involved in three significant antitrust proceedings in the late 1980s and early 1990s. First, in 1988, Mr. Trump paid a $750,000 civil penalty to settle charges brought by the US Department of Justice (DOJ) and Federal Trade Commission (FTC) that he had violated the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) by acquiring stock in two companies without making timely HSR filings. Around the same time, Mr. Trump, as one of the owners of the New Jersey Generals US Football League team, was involved in a private antitrust suit against the National Football League (NFL)—a case that resulted in a jury verdict that the NFL had willfully acquired or maintained monopoly power in a market consisting of major league professional football in the United States, in violation of Section 2 of the Sherman Act. Damages of $1, trebled to $3, were awarded. US Football League v. Nat’l Football League, 842 F.2d 1335 (2d Cir. 1988). Finally, Mr. Trump, in connection with his Atlantic City casinos, was sued by Boardwalk Properties, Inc. on numerous grounds including allegations that he had attempted to monopolize casino gambling and had conspired to suppress competition. After a lengthy legal battle, Mr. Trump prevailed.

While we can only speculate as to how a Trump administration would approach antitrust policy and enforcement, Mr. Trump’s commentary regarding Amazon suggests that he would not be shy about pressing for aggressive investigation and potential enforcement action against those he perceives to be running afoul of antitrust laws. While it appears likely that Amazon would find itself under the microscope of a Trump administration, it is unknown whether Mr. Trump would direct enforcement towards other particular domestic companies or industries. It is also uncertain if Mr. Trump would maintain the Obama administration’s increased rate of merger challenges.

With respect to international enforcement, Mr. Trump’s comments on OPEC, coupled with his campaign focus on trade issues, suggest that he would be in favor of aggressive antitrust enforcement actions focused on foreign companies—and, potentially, against foreign governments (though some of Mr. Trump’s strategies may first require legislative action by US Congress before they can be pursued). Mr. Trump’s litigious history on both sides of antitrust laws demonstrates his familiarity and experience with the legal system, and further suggests that a President Trump would not hesitate in pressing for antitrust action against foreign actors. Mr. Trump underscored this point in Time to Get Tough favorably quoting a former Reagan and Bush advisor who, commenting on antitrust enforcement against OPEC, stated “isn’t starting a lawsuit better than starting a war?”

It is possible that a President Trump would ultimately do little to shake up the antitrust enforcement status quo, given other pressing national and international issues that have been focal points of the Trump Campaign. On the other hand, it is equally possible that, given his comments and litigation history, Mr. Trump would adopt a very aggressive antitrust investigation and enforcement policy against perceived wrongdoers, resulting in antitrust issues becoming central to a Trump administration’s economic and trade policies.

ARTICLE BY Emre N. Ilter of McDermott Will & Emery
© 2016 McDermott Will & Emery

State Department Issues Cable on Extension of Three Visa Programs

On Oct. 5, 2016, the U.S. Department of State (DOS) issued an unclassified cable on the Continuing Resolution signed into law on Sept. 29, 2016 that extends several important immigration programs, including the Conrad State 30 Program, the non-minister special immigrant religious worker program (SR visa), and the EB-5 Regional Center program. The House and Senate passed the Continuing Resolution on Sept. 28, 2016, and the president signed the bill into law on Sept. 29, 2016 (H.R.5325; P.L. 114-223).

Court Pillars, Department of State, Continuing Resolution

The DOS cable explains that the EB-5 Regional Center program (immigrant visa categories R51 and I51) now is set to expire on Dec. 9, 2016.  The DOS has clarified that all EB-5 immigrant visas based upon investments made in regional center projects must be issued by close of business Dec. 9, 2016; the expiration date also applies to dependent spouses and children.  The DOS has instructed all visa issuing posts to hold in abeyance any pending R51 and I51 immigrant visa applications beginning on Dec. 10, 2016, if there is no extension of the EB-5 Regional Center program on or before that date.  The cable also clarifies that immigrant visas for investors not investing through a regional center (T51 and C51), i.e., the “direct” or “non-regional center” program, can continue to be issued as that program remains valid beyond Dec. 9, 2016.

In addition, the DOS cable confirms that extension of the EB-5 Regional Center program through Dec. 9, 2016 will allow priority dates to immediately become “current” for October for all countries except mainland China.  The “current” priority date for China-mainland born I5 and R5 applicants is Feb. 22, 2014.  Accordingly, China mainland-born investors with an I-526 Petition filed after Feb. 22, 2014, do not have immigrant visas immediately available to them and they must wait until the priority dates in the Visa Bulletin advance further.

The cable further discussed the expiration of the Conrad State 30 Program, which also will expire on Dec. 9, 2016. The Conrad 30 program allows medical doctors on J-1 visas to apply for a waiver of the two-year home residence requirement under INA §212(e) upon completion of the J-1 exchange visitor program.  The cable clarifies that applicants who entered or were granted J-1 status on or before Dec. 8, 2016, may still apply for a Conrad State 30 waiver.

Finally, DOS stated in the cable that authorization for the SR visa, which is for professional and non-professional workers within religious vocation or occupation categories other than the vocation of a minister, will expire on Dec. 9, 2016.  This expiration relates to immigrant visa recipients and their accompanying spouses and children only, and does not affect any nonimmigrant categories such as R-1 visas.  Individuals seeking SR visa status are required to have applied for such status and be admitted into the United States prior to Dec. 9, 2016. DOS has instructed visa issuing posts that the validity of any SR visa issued, therefore, must be limited to Dec. 8, 2016, to coincide with the expiration of this classification.  Posts that have issued SR visas in recent months should consider informing the recipients that they must travel by Dec. 8, 2016. Moreover, Posts that issue SR visas in December should consider informing the individual of the expiration date and necessity of traveling before the expiration date. If the visa holder is not admitted into the United States before the program expires, replacement visas cannot be issued. Beginning Dec. 9, 2016, posts are advised by the DOS to hold in abeyance any pending SR application.

The cable also explains that the DOS Visa Office (VO) will continue to provide guidance as the appropriations process continues.  In December, following the federal elections, Congress is expected to reconvene for a “lame duck” session.  At that time, Congress will once again consider the extension of these vital visa programs.

©2016 Greenberg Traurig, LLP. All rights reserved.

Pet Policies at Work: Considerations for Employers

employer pet policiesAs millennials continue to negotiate workplace perks, such as flexible hours, gourmet cafeterias, gym memberships, and on-demand laundry services, employers may be confronted with employees who seek to bring pets to work for convenience, companionship, or to promote creativity and calmness. Beyond providing reasonable accommodations (absent showing an undue hardship) for disabled employees with services animals, here are some considerations for employers regarding voluntary pet policies.

Pros and Cons

Recent studies and articles advocate for pet-friendly workplaces, citing a number of benefits to companies and workers. Benefits include increased worker morale, co-worker bonding, attracting and retaining talent, and lower stress coupled with higher productivity.

On the other hand, permitting pets in the workplace presents a number of issues. For example, according to a leading asthma and allergy organization, as many as three in ten people suffer from pet allergies, meaning someone at work is likely allergic to Fido or Fifi. A significant number of people also have pet phobias, for example, resulting from a traumatic dog bite incident. Other concerns may include workplace disruption due to misbehaved animals, mess, and time-wasting.

Five Tips for Effective Pet Policies

If the Pros outweigh the Cons, the next question is: “[w]hat should I put in a pet policy?” Here are five things to consider when preparing a pet-policy:

  1. Ask Around: Offer employees an opportunity to provide feedback before implementing a pet-policy. Doing this allows the company time to confirm employee interest in the idea and address any concerns or issues before employees bring pets to work.

  2. Set a Schedule: Establish a schedule for pet-friendly work days, e.g., once a week or month, to provide structure and predictability so that the company and employees can plan, either to bring their pets (or allergy medicine) or to work remotely, for days when pets may be at the office or jobsite.

  3. Provide Pet Space: Designate certain areas as pet-friendly. This benefits everyone. For areas where pets are welcome, provide perks like snacks, cleaning supplies, and toys. Designate entrances and exits that pet owners can use to bring their animals in and out.  Space planning also helps employees who prefer to keep their distance, as boundaries provide notice of places to avoid.

  4. Offer Pet Benefits: Certain federal and/or state laws prohibit companies from permitting pets (not to be confused with ADA service animals) at work. Offering employees other benefits like pet insurance, pet bereavement, pet daycare, and financial help for pet adoption are other ways companies can support their pet-owning workers, even if pets can’t come to work.

  5. Waivers and Insurance: No list is complete without accounting for the chance something may go wrong. Consider requiring employees who bring pets to work to sign a waiver of liability for the company. Similarly, companies should check with their insurance to make sure that they are covered in the event an animal causes an injury in the workplace.

What about the ADA?

Voluntary pet policies should be considered separate from a company’s obligation to provide disabled workers with a reasonable accommodation, which may include use of a service animal at work. Three questions to consider when an employee asks to bring a service animal to work as an accommodation include: (1) does the employee have a disability; (2) is this a service animal, meaning is it trained to perform specific tasks to aid an employee in the performance of the job; and (3) is the service animal a reasonable accommodation.

If a service animal results in complaints from other employees (e.g., allergies, phobias, disruption), employers may consider other accommodations, or take other steps to address these complaints. The Job Accommodation Network, a service of the U.S. Department of Labor, Office of Disability Employment Policy, has some helpful tips for accommodating service animals.

ARTICLE BY Garrett C. Parks of Polsinelli PC               

 © Polsinelli PC, Polsinelli LLP in California

Cook County, Illinois, Enacts Paid Sick Leave Ordinance

paid earned Sick leaveThe Cook County “Earned Sick Leave” Ordinance mandates that employers in Cook County, Illinois, allow eligible employees to accrue up to 40 hours of paid sick leave in each 12-month period of their employment. The Ordinance, passed on October 5, 2016, becomes effective on July 1, 2017.

The Ordinance is similar to amendments to the Chicago Minimum Wage Ordinance providing for paid sick leave, also going into effect on July 1. Chicago is part of Cook County.

Paid Sick Leave Requirements

Who is covered?

Individuals are entitled to benefits under the Ordinance if they:

perform at least two hours of work for a covered employer while physically present within the geographic boundaries of the County in any particular two-week period; and work at least 80 hours for a covered employer in any 120-day period.

Compensated time spent traveling in Cook County, including for deliveries and sales calls and for travel related to other business activity taking place in the County, can count toward the two-hour requirement. However, uncompensated commuting time in the County will not be counted. Certain railroad employees are not covered by the Act.

Covered employers include individuals and companies with a place of business within the County that gainfully employ at least one covered employee. Government entities and Indian tribes are not covered employers under the Ordinance.

The Ordinance does not apply to collective bargaining agreements in force on July 1, 2017. After that date, the Ordinance may be waived in a bona fide CBA if the waiver is explicit and unambiguous. In addition, the Ordinance does not apply to any covered employee in the construction industry who is covered by a bona fide CBA.

What if my company already provides employees with paid time off (PTO)?

If an employer has a policy that grants employees PTO in an amount and a manner that meets the requirements of the new Ordinance, the employer is not required to provide additional paid leave. However, any existing PTO policy must meet each requirement of the Ordinance, including the reasons for which the time off may be used, to qualify for this exemption.

When do employees begin to accrue paid sick leave?

Employees begin to accrue paid sick leave on the first calendar day after the start of their employment or July 1, 2017, whichever is later.

How much sick leave is required and can employers limit the amount used?

Employees will accrue one hour of paid sick leave for every 40 hours worked. For purposes of calculating accruals, the Ordinance assumes exempt employees work 40 hours per workweek, unless their normal workweek is less, in which case the accrual will be based upon the number of hours in their normal workweek.

Accrual and usage of paid sick leave is capped at 40 hours for each 12-month period. Employees may carry over half of their unused paid sick leave (up to 20 hours) to the next 12-month period. The Ordinance also provides for additional carryover and usage for employers covered by the Family and Medical Leave Act that can be used exclusively for FMLA-eligible purposes.

When can employees start using paid sick leave?

New employees can begin using accrued paid sick leave no later than the 180th day following the commencement of employment. The Ordinance is unclear as to how the 180-day waiting period will apply to current employees who were hired prior to July 1, 2017.

For what reasons can an employee use paid sick leave?

Employees may use paid sick leave for their own illness, injuries, or medical care (including preventive care) or for the illness, injuries, or medical care of certain covered family members. “Family member” is defined broadly to include a child, legal guardian, or ward, spouse under the laws of any state, domestic partner, parent, parent of a spouse or domestic partner, sibling, grandparent, grandchild, or any other individual related by blood or whose close association with the employee is the equivalent or a family relationship. “Family member” also includes step- and foster relationships.

Employees also can use paid sick leave if either the employee or a family member is a victim of domestic violence or a sex offense.

Finally, employees are entitled to use paid sick leave if their place of business or the child care facility or school of their child has been closed by an order of a public official due to a public health emergency.

Can employers set restrictions on the use of paid sick leave?

Employers are entitled to set reasonable minimum increments for the use of paid sick leave, not to exceed four hours a day.

What notice must be provided by employees who need to use paid sick leave?

Employers may require that employees provide up to seven days’ advance notice if the need for paid sick leave is foreseeable. Scheduled medical appointments and court dates for domestic violence will be considered reasonably foreseeable. If the need for leave is unforeseeable, employees must provide as much notice as is practical. The Ordinance expressly provides that employees may notify their employers of the need for leave by phone, email, or text message. Employers may adopt notification policies if they notify covered employees in writing of such policies and the policy is not unreasonably burdensome. If leave is covered by the FMLA, notice must be in accordance with the FMLA. Employees need not give notice if they are unconscious or medically incapacitated.

Employers also may require that employees using paid sick leave for more than three consecutive workdays provide certification that the leave was for a qualifying purpose. However, employers cannot require that certification specify the nature of the medical issue necessitating the need for leave, except as required by law. Employers cannot delay commencement of Earned Sick Leave or delay payment of wages because they have not received the required certification.

Do employers have to pay out unused, accrued paid leave upon termination?

Unlike PTO and vacation pay, unless a collective bargaining agreement provides otherwise, unused, accrued sick leave need not be paid out upon termination or separation of employment.

What are the posting and notice requirements?

Employers must post notice of employees’ rights in a conspicuous place at each facility where any covered employee works that is located within the geographic boundaries of the County.

In addition, at the commencement of employment, employers must provide each covered employee written notice advising of his or her rights to Earned Sick Leave under the Ordinance. The Cook County Commission on Human Rights will publish a form notice.

Implementation and Enforcement

The Ordinance provides a private right of action for employees who believe they are denied their right to request or use paid sick leave. Employers who violate the Ordinance may be subject to damages equal to three times the amount of any unpaid sick time denied or lost as a result of the violation, along with interest, costs, and reasonable attorneys’ fees.

Anti-Retaliation

Employers are prohibited from discriminating against or taking any adverse action against covered employees in retaliation for exercising, or attempting in good faith to exercise, any right under the Ordinance, including disclosing, reporting, or testifying about any violation of the Ordinance or regulations promulgated thereunder, or requesting or using paid sick leave. Additionally, an employee’s use of paid sick leave under the Ordinance cannot be counted for purposes of determining discipline, discharge, demotion, suspension, or any other adverse activity under an employer’s absence-control policy.

Employers with operations in Cook County, Illinois, should review the Ordinance and their policies and practices related to paid sick leave carefully.

Employers should review their policies and practices regularly with employment counsel to ensure they effectively address specific organizational needs and comply with all applicable laws.

Article by Kathryn Montgomery Moran & Jody Kahn Mason of Jackson Lewis P.C.

Jackson Lewis P.C. © 2016

Campaign Finance Reform Emerges Briefly As Topic In Ugly Trump-Clinton Debate

Amid a presidential debate that focused as much on personal attacks as substance, the topic of campaign finance reform finally made a brief, if tangential, appearance in the high-stakes public forum.

Although the role of money in politics has been one of the top issues that voters want candidates to discuss, the topic hadn’t come up until Sunday night’s debate, the second in a series of three forums featuring both of the candidates.

Debate, Clinton, Trump, campaign finance reform
Photo Credit: Drew Angerer, Getty Images News

Asked about potential litmus tests for Supreme Court appointments, Democratic nominee Hillary Clinton told the town hall-style audience that she would select justices in favor of reversing the high court’s 2010 Citizens United ruling. The decision, which allowed corporations and unions to spend on elections, has led to sweeping changes to the U.S. campaign finance system that allow big donors to bankroll outside groups to boost their favored candidates.

Clinton said she wants to “get dark, unaccountable money out of our politics,” referring to non-profit organizations that can spend unlimited amounts of money supporting or opposing candidates without publicly revealing their donors. The number of “dark money” groups approved by the Internal Revenue Service has surged after the Citizens United ruling. In the past, Clinton has warned of dark money “distorting our elections, corrupting our political process and drowning out the voices of our people.”

The former secretary of state, however, didn’t speak directly to the issue of super PACs, another byproduct of the Citizens United decision. Super PACs, which are regulated by the Federal Election Commission, can accept any amount of money and spend unlimited funds on elections, as long as they disclose their donors and don’t coordinate directly with candidates.

Super PACs supporting Clinton have raised more than $143 million this election cycle, according to data compiled by the Center for Responsive Politics. Priorities USA Action, the most well-funded super PAC supporting Clinton, has raised $133 million during the current election cycle. While the group has disclosed the sources of most of its funding, it received $1 million in untraceable donations last summer.

The Campaign Legal Center, a nonpartisan watchdog organization, recently accused Clinton’s campaign of illegally coordinating with “Correct the Record,” another pro-Clinton super PAC. The group has claimed the limited scope of its expenditures means it doesn’t have to follow the federal election rules that prohibit outside organizations from coordinating activities with a campaign.

After the debate Sunday night, Republican nominee Donald Trump called Clinton a “hypocrite” on Twitter and said she is “the single biggest beneficiary of Citizens United in history, by far.” Even though Trump criticized the influence of outside groups during the Republican primary race, he currently benefits from the post-Citizens United world.

The billionaire real estate mogul’s campaign has close ties to two super PACs that are working to help him defeat Clinton. The two super PACs were the subject of another Campaign Legal Center complaint that argued the Trump campaign failed to follow rules designed to prevent super PAC staffers from immediately joining campaign staff, and vice versa.

Earlier this month, wealthy donors including Nevada casino magnate Sheldon Adelson announced they would pour tens of millions of dollars into another super PAC and a dark money organization to support Trump. So far, super PACs supporting Trump’s candidacy have raised more than $40 million.

Trump also touched upon money in politics issues at the debate, falsely claiming to be “pretty much self-funding” his campaign, as he has asserted many times over the course of the race. “By the time [the election] is finished, I’ll have more than $100 million invested,” Trump said.

Trump’s campaign has always received donations from individuals. While he did fund a significant portion of his primary race, he never promised to pay the entire bill for a general election race. Recently, his campaign has courted the support of the types of special interest donors he previously lampooned.

It’s unclear if Trump will meet the pledge he made Sunday night to invest $100 million in his presidential bid by Nov. 8 election. As of the end of August, Trump had given $54 million to his campaign.

Margaret Sessa-Hawkins contributed to this report.

You can view this press release in its original on the MapLight website here.

ARTICLE BY MapLight of MapLight
© Copyright MapLight

Hurricane Matthew Insurance Tips for Businesses

Hurricane map, Hurricane MatthewWith Hurricane Matthew downgraded to a tropical cyclone, it is time for affected businesses, property owners, and insurers to focus on quantifying the amount of damage caused by the storm.  By some estimates, Hurricane Matthew will generation over 100,000 insurance claims and between $4 billion and $7.5 billion in property losses.  Although the focus is typically on pre-storm preparation, the immediate steps taken this week will be important to any business owner seeking to present an adequate claim to its insurer for property damage.

Safety is always the first priority. Do not put yourself, your employees, or first responders in danger. Currently in North Carolina, the predictions are for worsening flooding in many low lying parts of the eastern part of the state, with peak flooding not reaching some areas until Wednesday (four days after the storm passed).

Once the threat of imminent danger has receded, the next step should be to document your loss.  Thorough documentation of the damage to your property will be invaluable.  Hopefully you will also have photographs or video from before the storm, so that any claim presented to an insurer can show both the before and after photographs of the condition of the property.  Because cell phones and digital cameras are not limited by physical film, do not hesitate to shoot dozens or hundreds of photographs.  Videos may be helpful as well.

At the same time you are documenting the damage, you should immediately put your insurer on notice of the loss.  You should call your insurer to begin putting them on notice as soon as you arrive at the property if you assess any physical loss.  After you give initial notice, you can follow up with complete details, provide the photographs you have taken, etc.  The insurer will likely eventually send an adjuster to physical inspect the damage to the property.

It is important to quickly give notice for several reasons.  As a legal matter, giving prompt notice prevents having a claim denied by an insurer on the basis of a late notice defense.  As a practical matter, because of the large number of claims that will be filed within a short period of time, some insurers will likely handle the claims on a first-come, first-serve basis.  Getting your claim in quickly gets you closer to the front of the line.

If immediate repairs are needed, take plenty of additional photos of the damage, the repairs in progress, and the final repairs.  Maintain copies of documentation regarding the repairs, and provide those to your insurer.  If your business had to buy or rent additional equipment as a result of the damage, or you suffered inventory loss, you will want to maintain detailed documentation of these costs as well.

Finally, whichever employee you assign to provide information to the insurer should maintain a journal or notebook.  This should include copies of all documents submitted to the insurance company, along with a log of all conversations with the insurer or its representatives.  The log should include the contact information of anyone from the insurer that you have contacted with, the date and time, the topics you discussed, and any additional information which you believe may be useful in the future or in the event of a dispute.

ARTICLE BY Jonathan Reich of Womble Carlyle Sandridge & Rice, PLLC

Copyright © 2016 Womble Carlyle Sandridge & Rice, PLLC. All Rights Reserved.