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The National Law Forum - Page 709 of 753 - Legal Updates. Legislative Analysis. Litigation News.

‘Super PACs’ Spend $13 Million on Early Primaries, Romney Top Beneficiary

Posted previously by the National Law Review, an article by The Center for Public Integrity regarding Super PACs Spending on Early Primaries:

New outside spending groups, dubbed super PACs, that can accept unlimited donations from corporations and wealthy individuals, spent $12.9 million in Iowa and other early GOP battleground states through New Year’s Day, according to an analysis of federal data.

The top beneficiary was former Massachusetts Gov. Mitt Romney. A total of $4.6 million was spent to help the nominal front-runner, the vast majority for ads torpedoing former House Speaker Newt Gingrich. Second was Texas Gov. Rick Perry, who benefited from $3.7 million in outside spending.

According to a Center for Public Integrity analysis of Federal Election Commission data,12 outside super PACs spent money, mostly on advertising, with the intention of electing or defeating a GOP presidential candidate. Ten have not yet reported their donors. The two that have did so last summer.

The upshot is that voters in Iowa, New Hampshire, South Carolina and Florida, all of whose contests will be held this month, won’t know who is paying for much of the advertising they see until after their votes are cast.

The next reports on donors aren’t due until January 31, the day of the Florida primary.

Federal court decisions in 2010 made it possible for individuals, corporations and labor unions to give unlimited contributions to political organizations (super PACs) and certain types of nonprofits, which can then spend the money to elect or defeat candidates. The groups are prohibited from coordinating their activities with candidates.

The top super PAC spender was “Restore Our Future” — the ambiguously named group set up to help Romney. The group spent $4.1 million, all of it in opposition to Gingrich, who enjoyed a brief lead in Iowa polls last month before the shellacking.

Restore Our Future has moved on from Iowa and spent $622,000 in Florida, a likely harbinger of more to come in that high stakes contest. Almost $100,000 has been spent by the pro-Romney group in South Carolina, whose primary is January 21.

Restore Our Future reported raising over $12 million in the first six months of 2011; it is apparently the best-funded of the new breed of PACs, and has received a few seven-figure donations. Not so well known is a second organization that hopped on the Romney bandwagon, Citizens for a Working America Inc.

The group spent $475,000 on a Christmas Eve ad buy praising the candidate.

The group initially supported Rep. Michele Bachmann of Minnesota but changed course shortly before the big ad buy.

The Center traced an address in an FEC filing for Citizens Inc. to the office of JSN Associates in Dayton, Ohio. The “JSN” is James S. Nathanson, who said Monday the group is “very definitely pro-Romney.” He would not say who the group’s donors are.

A previous incarnation of the group met with some controversy when it accepted a single $255,000 donation in 2010 from a Virginia consulting group called “New Models.” Questions were raised as to whether the group was being used as a pass-through for unnamed donors.

A super PAC supporting Perry, “Make Us Great Again,” spent all of its $3.7 million on ads backing the Texas governor.

Former Utah Gov. Jon Huntsman enjoyed the support of “Our Destiny PAC” which spent $1.9 million for ads in New Hampshire, where he opted to compete first rather than Iowa.

Two groups supporting Gingrich ponied up just over $900,000 for TV spots. The bulk of the pro-Gingrich spending was done by “Winning Our Future,” a super PAC that was just started last month.

A surging Rick Santorum, a former U.S. senator from Pennsylvania, enjoyed $631,000 in supportive spending by outside groups.

“Priorities USA,” a super PAC supporting President Obama, was also active, spending a little more than $306,000 on advertising opposing Romney.

And “Endorse Liberty Inc.,” a new super PAC embracing Rep. Ron Paul of Texas, spent more than $448,000, most of that on Internet advertising. It also listed one of the more unusual expenditures of the 2012 campaign — $2,000 on “costumes and makeup.”

Peter Stone contributed to this report.

Reprinted by Permission © 2011, The Center for Public Integrity®. All Rights Reserved.

White Collar Crime

The National Law Review would like to advise you of the upcoming White Collar Crime conference sponsored by the ABA Center for CLE and Criminal Justice Section, General Practice,  &   Solo and Small Firm Division:

Event Information

When

February 29 – March 02, 2012

Where

  • Eden Roc Renaissance Miami Beach
  • 4525 Collins Ave
  • Miami Beach, FL, 33140-3226
  • United States of America
Primary Sponsors

  • Highlight

The faculty includes some of the leading white collar lawyers in the United States.  The keynote panels for the 2012 program will continue to focus on the role of ethics and corporate compliance in today’s business environment.

  • Program Description

Each year the National Institute brings together judges, federal, state, and local prosecutors, law enforcement officials, defense attorneys, corporate in-house counsel, and members of the academic community.  The attendees include experienced litigators, as well as attorneys new to the white collar area.  Attendees have consistently given the Institute high ratings for the exceptional quality of the Institute’s publication, its valuable updates on new developments and strategies, as well as the rare opportunity it provides to meet colleagues in this field, renew acquaintances and exchange ideas.

The faculty includes some of the leading white collar lawyers in the United States.  The keynote panels for the 2012 program will continue to focus on the role of ethics and corporate compliance in today’s business environment.  Once again, we expect excellent representation from the corporate sector.

  • CLE Information

ABA programs ordinarily receive Continuing Legal Education (CLE) credit in AK, AL, AR, AZ, CA, CO, DE, FL, GA, GU, HI, IA, ID, IL, IN, KS, KY, LA, ME, MN, MS, MO, MT, NH, NM, NV, NY, NC, ND, OH, OK, OR, PA, RI, SC, TN, TX, UT, VT, VA, VI, WA, WI, WV, and WY. These states sometimes do not approve a program for credit before the program occurs. This course is expected to qualify for 11.0 CLE credit hours (including TBD ethics hours) in 60-minute-hour states, and 13.2 credit hours (including TBD ethics hours) in 50-minute-hour states. This transitional program is approved for both newly admitted and experienced attorneys in NY. Click here for more details on CLE credit for this program.

Be Organized Now, Save Your Family Time and Money Later

Recently posted in the National Law Review an article by Jessica M. DesNoyers of Varnum LLP regarding wills and estate planning:

Varnum LLP

I have assisted in the distribution and administration of more than one trust and estate, and I speak from experience – the process is much easier on the family and takes considerably less time if the deceased was organized.

If the decedent died without a valid will or any estate planning, and the decedent owned any assets upon his or her death, the family has to file a claim in Probate Court to transfer the property and hope that they know what all of the decedent’s assets were.  If the decedent died with a valid will, but did not have a trust in place, or did not transfer all of his or her assets into the trust, the family will still have to file a claim in Probate Court.  Finally, even if a solid estate plan is in place, there are a number of tasks to be completed and documents to be filed or mailed before the decedent’s estate can be disbursed or administered.  To make the process easier on family members attempting to comply with your last wishes, here are some easy things you can do now to help your family later:   he distribution and administration of more than one trust and estate, and I speak from experience – the process is much easier on the family and takes considerably less time if the deceased was organized.

  1. Meet with an attorney to ensure your estate plan is up-to-date, and you have all the documents you need.
  2. Keep all of your estate planning documents together and in a safe place, and let your attorney or a trusted family member know where they are.
  3. If you have retirement accounts, money market accounts, or insurance policies where you’ve named beneficiaries, keep all of those document together with your estate planning documents.  Confirm that your documents name the beneficiaries you want named.  Keep company contact information with the documents so that your family knows who to contact at the company to make a death claim and receive benefits.
  4. Keep all title documents together with your estate planning documents, or if kept in a safe deposit box or safe, make a note with your estate planning documents altering family of where it is how to access it.  This would include title to cars and real estate.
  5. If you have specific personal items you want to give to certain individuals, make that clear.  You can create what is called a “holographic will” for personal items by handwriting (not typed) what items you want to give to which people or entities, write the date on the document and sign it at the end of the document.  This does not take the place of an estate plan, but can be used to distribute items such as family heirlooms.
  6. Finally, keep a list of all the assets you have that will need to be transferred.  No, you do not need to list every plate in your cupboard.  You should, for example, list which banks you have accounts with and what types of accounts, where you own real property, life insurance policies, and vehicles or “toys” (i.e. boats, ATVs, etc.) you own.

Being organized is relatively easy, and the benefits of the time you take today will be a gift to your family after you are gone.  Call an estate planning attorney today to assist you in the process.

© 2011 Varnum LLP

U.S. Department of Education Amends its FERPA Regulations to Allow for Certain Additional Student Disclosures

Published in the National Law Review an article by attorney Stephen A. Mendelsohn of Greenberg Traurig, LLP regarding  Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. section 1232g:

 

GT Law

The United States Department of Education (DOE) has completed its administrative procedures and has enacted new regulations that amend current regulations enforcing the Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. section 1232g. These new regulations, which are effective on January 3, 2012, allow for greater disclosures of personal and directory student identifying information and regulate student IDs and e-mail addresses, among other issues. The new regulations are found at 34 CFR, Part 99, sections 99.3, 99.31, 99.5, 99.6 and 99.37. Colleges and universities need to quickly consider the impact of these new regulations upon their current student privacy policies and existing notices. Failure to do so may result in complaints and DOE enforcement proceedings.

FERPA

FERPA is a longstanding federal statute which provides that a parent or eligible student, if over the age of 18, has a right to inspect and review the student’s education records and to have them amended and withdrawn, under certain circumstances. FERPA is applicable to all public K-12 school districts and virtually all post secondary institutions, as they receive federal funds under programs administered by the DOE. FERPA generally prohibits the disclosure of personally identifying information (PII) contained in “education records,” without aparent’s or student’s written consent, to certain third parties. There are a number of statutory exceptions for emergency medical and health reasons and for law enforcement activities, among others. PII includes a student’s name, social security number, parents’ names, family addresses, birth dates, place of birth, a parent’s maiden name, and any other data that make a student’s identity easily traceable.

FERPA makes a distinction between PII and “directory information.” DOE regulations allow for the disclosure of directory information, without needing a student’s or parent’s consent, unless the parent or student has opted out of such disclosure. A school subject to FERPA must provide a written notice to parents or students setting forth its disclosure policies concerning directory information with the procedures for opting out and contesting the student’s education records.

The New Regulations

A. Directory Information and Student IDs

The new regulations clarify that an institution may, under certain circumstances, designate and disclose student ID numbers, or other unique personal identifiers, as directory information to be displayed on a student’s ID card or badge as long as the ID card is not the sole method of obtaining access to the student’s education records and is used with other credible identifiers. The regulations also provide that a parent or student may not opt out of the disclosure of such directory information.

The DOE left it up to the schools to determine what specifically should be included on a student ID. It also stated that FERPA does not require schools to force students to wear IDs. With regulations enacted in 2008, institutions may use directory information to access online electronic systems and to allow a school to require a student to disclose his/her name, identifying information and institutional e-mail address in and out of class. The DOE further clarified that an institution need not make directory information available on student IDs, but may do so if it so chooses.

B. Studies and Audit and Evaluation Exceptions

The new regulations also allow for the disclosure of PII, without student or parent consent, where institutions have contracted with organizations to conduct studies or audits of the effectiveness of education programs. However, the regulations require a written agreement with the organization containing mandatory provisions intended to guard the privacy of student records. The regulations also provide institutions with detailed, required provisions aimed at preventing PII from ending up in the hands of persons or entities not intended or permitted to receive them, and guidelines for addressing data breaches. A careful review of the regulations is necessary before an institution enters into any agreement to provide PII access to an organization that is conducting a study or an audit and evaluation.

C. Notices

The new regulations contain a model notification of rights form for post secondary institutions to provide to students and parents. Given the changes in the DOE’s regulations described in this Alert, current notice forms must be re-examined to determine whether they are in compliance. Also, the DOE’s model form has a number of optional provisions that each institution should evaluate based on their specific needs.

Conclusion

FERPA and the DOE’s regulations are complex and create the potential for administrative sanctions. The new regulations give expanded authority to institutions to make disclosures, but a careful approach to crafting policies and disclosures is necessary to avoid administrative penalties, as well as possible lawsuits by students and parents.

©2011 Greenberg Traurig, LLP. All rights reserved

Barnes & Thornburg Labor Relations’ Top Ten Traditional Labor Stories of 2011 (Part 2)

Published in the National Law Review Part 2 of  article by the  Labor and Employment Law Department of Barnes & Thornburg LLP regarding the past year’s labor news:

Here’s the conclusion to our countdown of the top ten traditional labor issues that made the news this year. Our top five are below; see numbers 6-10 in our post yesterday.

5. The Board mandates employee-rights posters, but lawsuits delay implementation

In a move that will affect virtually all private employers, whether unionized or not, the Board approved a final rule in August which requires employers to notify employees of their rights under the NLRA via an 11 x 17 inch poster. A copy of the required poster, along with more information about the posting requirement is available on the Board’s website.

This posting requirement elicited strong opposition from many business groups, including the National Association of Manufacturers, the National Federation of Independent Businesses, and the U.S. Chamber of Commerce, who have all filed lawsuits against the Board challenging the posting requirement. In response to these suits, the Board has delayed implementation of the rule, most recently postponing the effective date of the posting requirement until April 30, 2012.

So for now, employers can leave the NLRB poster off their walls, but all employers should stay informed on this issue as the implementation date approaches.

See our previous coverage of this issue here.

4. Social media becomes a new battleground

Facebook came to traditional labor this year, as the Board put a new emphasis on social media as a form of protected activity. Several complaints were filed against employers during the early part of the year alleging unfair labor practices, after the employers disciplined or terminated employees for posts related to their jobs on their personal Facebook and other social media accounts. In August, General Counsel Solomon issued a report summarizing the cases and detailing the Board’s position on appropriate social media policies.

These actions by the Board caution employers to be wary of protected speech rights under the NLRA before taking action against employees for off-duty Facebook chatter and to also make certain that company policies on social media do not chill or limit discussion regarding working conditions. Recent General Counsel decisions have also brought up the issue of potential surveillance violations if employers monitor employees’ off-duty social media use.

This continues to be a hot issue, and as we move into the new year, employers should stay cautious when it comes to social media.

See our previous coverage of this issue:

– New Facebook Cases – No Protected Concerted Activity, But Is It Surveillance??

– Update on Social Media issues with the NLRB

– Labor & Employment Law Alert – NLRB Sues Non-Union Employer Over Facebook Firing

3. NLRB complaint against Boeing for alleged unlawful transfer of work creates national controversy

By far the traditional labor story that created the most national headlines this year was the Board’s complaint filed against Boeing in April alleging unlawful transfer of work over Boeing’s decision to open a new 787 Dreamliner assembly plant in South Carolina instead of building the new planes at Boeing’s facilities in Washington. The key controversy wasn’t really the Board’s allegation of unlawful transfer of work, but its proposed remedy – shut down the brand new billion-dollar South Carolina plant and move the work to Washington. Unsurprisingly, this suggestion turned some heads in the business world. Accusations of job-killing by the NLRB soon followed, as well as legislation introduced in Congress to prevent the NLRB from mandating such a remedy.

Boeing litigated the issue for much of the year, but ultimately agreed in December to settle the case as part of a new contract with the Machinists union for its Washington facility. The union agreed to keep production of the Dreamliner in South Carolina in exchange for a promise by Boeing to build its new 737 MAX aircraft in Washington. This agreement officially ended the saga for Boeing, as the Machinists union withdrew its charge. As for the Board, it remains to be seen whether negative fallout, if any, from its decision to issue the complaint will affect its public perception in the future.

See our previous coverage of this issue:

– Labor & Employment Law Alert – NLRB Seeks Unprecedented Order Requiring Boeing to Move its New Production Line Across the Country

– An active day at the NLRB

– Boeing and the Union Reach a Tentative Agreement to End Contentious Battle Over Cross-Country Relocation

2. Board implements “quickie election” rules despite strong criticism from dissenting Member Brian Hayes

While it took all year, the Board succeeded last week in finalizing what critics have dubbed its “quickie election” rules. The new rules eliminate avenues for employers to challenge union activity prior to an election and also shorten time periods during which employers can campaign against unionization. The rules had been proposed by the Board in June and generated significant criticism from business groups who found the rules blatantly pro-union and accused the Board of denying employers their rights to free speech.

Also highly critical of the proposed rules was the sole Republican member of the Board, Brian Hayes, who said he considered resigning prior to the Board’s meeting to vote on the rules just to prevent them from being implemented. Member Hayes did not resign, but instead argued for more time to consider the rules, a request that was denied by his fellow Board members. The Board voted 2-1 in November to finalize the rules and the final version was published in the federal register last week.

As we move into 2012, this may not be the end of the issue, however. The rules should take effect in April, but a lawsuit filed by the U.S. Chamber of Commerce challenging the new rules may change this. Stay tuned.

See our previous coverage of this issue:

– Labor & Employment Law Alert – NLRB Election Changes Are Here (BT Alert)

– After A Long Wait, the NLRB Has Finalized the “Quickie Election” Rules

– An active day at the NLRB

– NLRB releases update on “quickie election” vote scheduled tomorrow

– Strategic resignation by Member Hayes may derail scheduled Board vote on “quickie election” rules

1. Behind-the-scenes politics leave an uncertain future for the NLRB

As our list so far has illustrated, 2011 was an active year for the National Labor Relations Board, with several controversial decisions, new administrative rules, and Congressional scrutiny. But all of these issues that we’ve included in our list are really just a byproduct of a more aggressive, and some would say politically motivated, Board. And the composition of the Board, which has driven most of the change we’ve seen this year, not only heads our list for 2011, but provides a starting point for looking into the 2012 crystal ball.

2011 saw an increased politicization of the Board, with a contentious division between the Board’s Democratic and Republican members. Sole Republican member Brian Hayes even went so far as to threaten resignation in November over what he saw as the Board’s unwillingness to take the time to consider the full effects of its controversial “quickie election” rules prior to drafting a final version of the rules. The Board also made the controversial decision to publish those rules without allowing the customary time for dissenting members (in this case, Hayes) to prepare and publish a dissent.

All of this behind-the-scenes politics has played out in the shadow of the looming expiration of Member Craig Becker’s appointment to the Board. President Obama appointed Becker as a recess appointment in 2010, which means that his term expires on December 31. Once his term expires, the Board (which is intended to have five members) will be left with only two remaining members. This loss of quorum will prevent the Board from issuing any new decisions or rules until a third member is appointed, under the U.S. Supreme Court’s New Process Steeldecision.

President Obama has attempted to prevent this from happening by recently naming two additional nominees for Board member positions, both Democrats. (The President also nominated Republican Terence Flynn to the Board last January, but his nomination has not yet been considered by the Senate.) However, the Senate so far has refused to hold a vote on any of the nominees and additionally appears to be avoiding declaring a formal recess so that the President cannot name a recess appointment as he did with Becker.

This collection of events is set to leave the National Labor Relations Board effectively useless come midnight Saturday. As we ring in the new year, the Board may be closing up shop. Stay tuned to BT Labor Relations as we see what 2012 brings.

Disagree with our picks? Let us know in the comments what traditional labor issues you think were most important in 2011.

Barnes & Thornburg Labor Relations’ Top Ten Traditional Labor Stories of 2011 (Part 1)

‘Tis the season for year-end recaps, and we here at BT Labor Relations couldn’t resist taking our own look back at the year in traditional labor. As we move into 2012, here’s our countdown of the top ten traditional labor issues that made the news this year. Numbers 10 through 6 are below; check back tomorrow for our top five.

10. The Board sues Arizona over secret ballot constitutional amendment

2011 started off with a bang in January when the Board’s Acting General Counsel Lafe Solomon threatened to sue four states (Arizona, South Carolina, South Dakota, and Utah) over their secret ballot union election constitutional amendments. All four states added provisions to their state constitutions mandating that union elections be held by secret ballot only, after constitutional amendments passed by public referendum at the November 2010 election. These constitutional amendments were in response to the Employee Free Choice Act (EFCA) proposed in Congress in 2009, which would have required an employer to recognize a union if a majority of employees signed cards stating their desire for representation. This “card check” method of recognition is currently allowed by the NLRA, but employers have the option of demanding that election of the union be confirmed by a secret ballot. EFCA would have taken this option away from employers (as well as enacting other pro-union changes to the NLRA).

EFCA never became law, but the constitutional amendments in these states passed anyway, purportedly preserving the right of a secret ballot election for employers in those states. The amendments as they currently stand do not conflict with the NLRA, but the NLRB nevertheless took exception to them, claiming that such state provisions are preempted by federal law. After a back and forth discussion with the states’ Attorneys General during the early part of 2011, the NLRB filed suit against Arizona in May, asking the court to declare that Arizona’s constitutional amendment was preempted by federal law and therefore unenforceable.

Although EFCA never became law, the NLRB has made attempts to individually implement many of the pro-union changes proposed in the bill, and Arizona has become the battleground for card checks. So far, the NLRB’s lawsuit appears to have some traction. The Arizona federal court hearing the case has deniedArizona’s motion to dismiss and litigation continues. Stay tuned in 2012 as this issue continues to develop …

See B&T’s previous coverage of this issue here.

9. The NLRB strikes a blow to mandatory arbitration policies in Supply Technologies

Companies love mandatory arbitration policies in contracts and in May, the U.S. Supreme Court issued a landmark decision in AT&T v. Concepcion upholding such policies in consumer contracts. Employers also see the appeal of mandatory arbitration clauses and many union contracts include such provisions. However, an NLRB Administrative Law Judge reminded employers of the limits of such policies in a decision in June, finding in Supply Technologies LLC that an employer’s arbitration policy violated the NLRA by unlawfully restricting employees’ rights by suggesting that an employee had to bring any unfair labor practice charge through the arbitration procedure, and thus could not make that charge with the Board. This decision served as a warning for employers hopeful after theConcepcion decision that arbitration provisions should be carefully reviewed before being included in collective bargaining agreements. Employers should know that just because SCOTUS approves, doesn’t mean the Board will.

See B&T’s previous coverage of this issue here.

8. Congress sits up and takes notice (although no new legislation is actually passed)

With a new majority in the House of Representatives after the 2010 elections, certain Republican members of Congress have made the NLRB their new target this year. Several hearings were held by Congressional Committees to discuss what many characterize as the pro-union, “activist agenda of the National Labor Relations Board.” The Board’s complaint against Boeing was a frequent target, as well as its decisions regarding posting requirements, “quickie” elections, and “micro” bargaining units.

Additionally, Republicans in both the House and the Senate have introduced bills to amend the NLRA to reverse these controversial actions taken by the NLRB in 2011. The Democrats weren’t able to get EFCA passed when they had a majority of both houses, so it is unlikely that any of this legislation will actually be passed by a divided Congress, but the NLRB’s continued perceived pro-union actions have made traditional labor a key issue as we move into the 2012 election season.

See B&T’s previous coverage of this issue here.

7. General Counsel memo regarding mandatory language in settlement agreements puts additional pressure on employers

This year, the Board has placed additional pressure on employers looking to settle NLRB proceedings with the issuance of a memo by General Counsel Solomon in January which requires mandatory language in settlement agreements whereby an employer in effect agrees in advance that if it is even accused of violating the agreement, all of the prior charges against it have merit. Although the Board characterized this language as necessary for effective enforcement of such agreements, this requirement likely has the effect of simply making employers less willing to settle a case. And it was another example of the Board’s aggressive efforts to secure rights for unions in 2011.

See B&T’s previous coverage of this issue here.

6. Specialty Healthcare decision opens the door for “micro” bargaining units

One of the Board’s more controversial decisions of 2011 was issued in August regarding appropriate bargaining units. In Specialty Healthcare (357 NLRB No. 83), the Board overturned 20 years of precedent regarding determination of an appropriate bargaining unit in non-acute health care facilities. The Board increased the burden on employers who wish to challenge a bargaining unit petitioned for by a union to include more employees. Under the new standard, employers have the burden to prove that the employees the employer believes also should be part of the unit share an “overwhelming community interest” with the petitioned for employees. The previous rule (as articulated by the Board inPark Manor Care Center, 305 NLRB 872 (1991)), applied a lower standard: whether the community of interest of the employees the employer sought to include was “sufficiently distinct from those of other employees” in order to justify their exclusion from the bargaining unit.

The upshot is that this decision allows unions to pursue so-called “micro” bargaining units, and it will be easier for unions to certify bargaining unit(s) piecemeal, even when a majority of employees in a facility do not desire union representation. This decision helps unions trying to “get a foot in the door” by allowing them to target vulnerable employer sub-groups.

This decision was targeted by legislation introduced in Congress to reverse it, but for now, it remains current Board law and sets up new challenges for employers seeking to avoid unionization.

See B&T’s previous coverage of this issue here.

Disagree with our picks? Let us know in the comments what traditional labor issues you think were most important in 2011. And don’t forget to check back tomorrow for our top five!

© 2011 BARNES & THORNBURG LLP

California Wage Theft Prevention Act Takes Effect January 1, 2012

Posted in the National Law Review on January 01, 2012 an article by the Labor & Employment Practice of Morgan, Lewis & Bockius LLP regarding The Wage Theft Prevention Act of 2011:

California Governor Jerry Brown recently signed into law Assembly Bill 469, also known as The Wage Theft Prevention Act of 2011 (the Act). The Act requires employers to provide all new nonexempt hires with written notice of specific wage information. It also increases the penalties for nonpayment of all wages due, including overtime premiums and minimum wage for all hours worked. The Act also mandates that the Labor Commissioner prepare a template of the written notice, which the Division of Labor Standards and Enforcement (DLSE) issued on December 28. A copy of the template is available online.

The Act is similar to wage theft statutes recently enacted in other states, including New York, New Mexico, Maryland, and Illinois. Below is a summary of the Act’s key provisions, which take effect on January 1, 2012.

Background

A UCLA study released in 2010 suggested that wage theft was costing low-wage California workers $26.2 million per week. Further, the DLSE, the state enforcement agency, was reporting more penalties assessed than actually collected. These statistics influenced the legislature to create the newer, heightened incentives for wage and hour compliance that are contained in the Act.

Labor Code § 2810.5: New Written Notice Requirements for New Employees

Under the Act, at “the time of hire” of any nonexempt employee, an employer will need to provide to the employee a written notice containing all of the following information:

  • The employee’s rate or rates of pay (including overtime rates), and whether the employee is paid hourly, by the shift, by the day, by the week, by salary, by piece, by commission, or otherwise.
  • Any allowances claimed as part of the minimum wage (i.e., allowances for meals or lodging).
  • The regular payday.
  • The name of the employer, including any D/B/A names the employer uses.
  • The physical address of the employer’s main office or principal place of business, and a mailing address if it is different.
  • The employer’s telephone number.
  • The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
  • Any other information that the Labor Commissioner deems necessary.

Employers need to provide the notice in the language that the employer normally uses for communicating employment-related information to employees. Employees must be notified of any changes to the information provided in the initial notice within seven calendar days after these changes are made. This notice of changes may take the form of an entirely new notice containing all of the information required by Section 2810.5, a notice of only the changed information, or a timely wage statement that reflects the changes.

Recordkeeping

The Act significantly increases employers’ recordkeeping obligations. Specifically, Labor Code § 226 requires that employers keep a copy of both an employee’s wage statement and a record of deductions, rather than just one or the other, for at least three years. The Act also amends Labor Code § 1174, requiring employers to keep payroll records for each employee for at least three years, instead of two years as previously required.

Increased Penalties and Damages and More Time for the Labor Commissioner to Seek Them

The Act contains numerous provisions that subject employers to significantly increased penalties and damages for noncompliance with various Labor Code provisions, including the following:

  • Labor Code § 98: The Labor Commissioner is now authorized to collect liquidated damages, in addition to wages and penalties, for failure to pay the minimum wage. Previously, liquidated damages were only available in civil court.
  • Labor Code § 240: The time period for which the Labor Commissioner can require that employers post bonds in order to incentivize compliance and ensure the employer can pay any future awards during that period has been increased from six months to two years. If the employer does not post the bond and does not appeal the order requiring a bond, the Labor Commissioner may order an accounting of the employer’s assets and subject the employer to an additional civil penalty of up to $10,000.
  • Labor Code § 243: An employer that has been convicted of violating wage laws for the second time within 10 years or has failed to satisfy a judgment for nonpayment of wages could be issued an immediate restraining order from conducting business within the state for 30 days unless the employer posts a bond conditioned on making correct wage payments or satisfying any judgment for nonpayment of wages.
  • Labor Code § 200.5: The DLSE now has three years-rather than one year, as previously-from the date a penalty or fee becomes final to collect it.
  • Labor Code § 1197.2: An employer may be criminally liable for a misdemeanor for the willful refusal to pay a final court judgment or final order for wages by the Labor Commissioner within 90 days. Each offense carries a minimum $1,000 fine or minimum six months of imprisonment. If the total wages due are more than $1,000, the minimum fine per offense is $10,000 and an employer may be subject to both the fine and imprisonment.

Conclusion

Under California’s new Wage Theft Prevention Act, employers have additional Labor Code compliance obligations, including the new written notice requirements in Section 2810.5. The Act also significantly increases the damages and penalties available for violations of the Labor Code. Thus, it is important that employers become familiar with the new requirements and take steps now to bring their policies and procedures into immediate compliance.

Copyright © 2011 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

7th Drug & Medical Device Litigation Forum, 7-8 Mar 2012, Philadelphia

The National Law Review is pleased to inform you of the 7th Drug & Medical Device Litigation Forum: Implementing Appropriate Litigation Readiness and Costs Management Policies That Ensure An Effective Defense at Trial

Event Date: 7-8 Mar 2012

Location: Philadelphia, PA, United States

Key conference topics

  • Mitigate and maintain costs associated with litigation
  • Gain judical insight on drug and medical litigation and its recent developments
  • Build better relationships with outside counsel in order to reduce the miscommunciation factor
  • Understand the limitations of marketing and advertising as it relates to emerging social media issues
  • Learn the latest on medical device product liability

Conference focus

 Pharmaceutical and medical device manufacturers have faced a growing array of legal challenges this year. With the increase of mass tort litigation, as it relates to product liability, pharmaceutical and medical device manufacturers must be prepared to defend the increasingly sophisticated, well-funded and multi-jurisdictional product liability campaigns against their companies.

The 7th Drug and Medical Device Litigation Conference will be a two-day, industry focused event specific to those within Drug & Medical Device Litigation, Product Liability and Regulatory Affairs in the Medical Device, Biotech and Pharmaceutical industries.

By attending this event, industry leaders will share best practices, strategies and tools on incorporating litigation readiness, utilizing cost efficient litigation strategies and accurately managing policies to ensure an effective defense at trial.

Attending This Event Will Enable You to:
1. Review the current landscape of drug and medical device litigation
2. Learn strategies in settlements and mass tort issues
3. Manage litigation expenses in order to effectively manage costs
4. Review recent case rulings, including the Mensing and Levine cases
5. Take a view from the bench: explore drug and medical device litigation
from a judicial point of view
6. Tackle product liability issues and challenges
7. Uncover the risks for drug and medical device companies when leveraging social media for marketing and advertising campaigns

With a one-track focus, the 7th Drug and Medical Device Litigation Conference is a highly intensive, content-driven event that includes case studies, presentations and panel discussions over two full days.

This is not a trade show; our Drug and Medical Device Litigation conference series is targeted at a focused group of senior level leaders to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

Testimonials:

“Great selection & breadth of speakers. Uniformly high quality of presentations. Intimate nature of meeting provided excellent opportunities for networking” – Abbott

“Great venue to learn and exchange best practices. More importantly how to leverage lesions learned from others.” – Baxter

“One of the best meetings I’ve attended. Excellent organization, topics and speakers. Overall extremely well done.” – Sanofi Aventis

marcusevans


Health Care Entities Using Social Media: Guidance from the Division of Quality Assurance

Recently posted in the National Law Review an article by Diane M. Welsh and Linda C. Emery of von Briesen & Roper, S.C. regarding  the use of social media and web-based email services:

Many articles have been written about the legal and business risks associated with the use of social media and web-based email services. However, the risk of using social media is heightened in the health care industry in light of a health care entity’s legal and regulatory obligations to protect the privacy and security of health care information. Health care entities need to be particularly familiar with the risks of using social media in the health care industry and methods for reducing those risks.

The DQA October 24, 2011 Memorandum

On October 24, 2011, the Wisconsin Division of Quality Assurance (“DQA”) issued numbered memorandum 11-026 entitled, “Using Social Media Platforms, such as Twitter, Facebook, MySpace and LinkedIn”. The Memo is available at www.dhs.wisconsin.gov/rl_DSL/Publications/11-026.htm.

The DQA definition of “Social Media” includes what one would normally consider social media, as well as “free and unencrypted web-based email services” such as Yahoo and Gmail, and web-based calendars. The purpose of the Memo is to “provide guidance to providers on the fast-changing landscape of the internet and the impact of using social networking and social media as a communications tool”.

DQA released the Memo to address concerns raised about (1) health care entities and their staff using web-based email accounts (e.g., Gmail) or web-based calendars (e.g., Yahoo Calendars) to convey patient or resident care information; and (2) health care entity staff members sharing protected health information on FaceBook.

The DQA notes that inappropriate use of Social Media or use of Social Media without adequate security protections may violate a patient’s or resident’s privacy rights. Moreover, DQA emphasizes that Social Media sites are now major targets of the hacker underground, creating further risk of a network security breach. DQA also warns health care entities of the potential for criminal and civil risks of using Social Media, (including criminal prosecution or civil actions under HIPAA) because it is the United States Department of Health and Human Services Office of Civil Rights—and not the Division of Quality Assurance—which has jurisdiction over such violations.

Risk Management Considerations With Regard to Entity Use of Social Media

DQA includes a number of recommendations for reducing the risks associated with the use of social media by health care entities.

First, the DQA recommends that each health care entity conduct a risk assessment to determine whether the entity or its staff members are utilizing Social Media in a manner that may violate patient or resident rights.

DQA also recommends that providers and staff members should be fully aware of the broad definition of “protected health information.” If a health care entity chooses to utilize a Social Media tool, it should insure that the information it discloses is “de-identified under HIPAA.” DQA points out that no health care provider should ever post any protected health information on-line without the appropriate written patient authorization. Merely omitting a patient’s name from a post does not make it a permissible disclosure. Posts that discuss the patient’s condition—even without disclosing the patient’s name—contain protected health information.

DQA emphasizes that “a covered entity should consider the need for a business associate agreement with a social media site, if the entity is uploading protected health information to the site. HIPAA makes it mandatory for all covered entities along with their business associates to ensure complete protection of patient health information, which they store, process and exchange between themselves.”

Finally, DQA recommends that health care entities should develop a social media policy that guides employees on the appropriate use of social media, and includes specific guidance (e.g., “Refrain from discussing patients, even in general terms.”). The organization should also provide staff with ongoing training on resident rights, privacy and security.

Marketing Uses of Social Media

DQA does not directly address the use by healthcare entities of social networking sites like FaceBook, Twitter or YouTube, or even the providers’ own websites, to promote their services or discuss advances they have made in healthcare. Many health care entities use videos, photos, and patient interviews to promote their services. If a health care entity posts a video, photograph, or patient interview of actual patients, that provider would be disclosing protected health information.

Any health care provider using protected health information in this manner should only do so with the express written authorization of the patient. Even with such authorization, the provider must be sure that the patient understands that when posting information online, the provider and the patient lose much control of the information. Although the provider could remove the materials if a patient withdraws authorization, the patient and the provider cannot get back any material that may have been downloaded by others.

Although not referenced in the Memo, health care providers should institute a social media policy which identifies who is permitted to use social media for the business purposes of the organization and what information may be posted on the company’s website or a social media web page.

Considerations for Staff Member’s Personal Use

One of the greatest risks of social media sites is that a health entity staff member may post protected information on the staff member’s social media page. The internet is filled with stories of hospital employees being fired for providing their opinions about a patient on a Facebook account, albeit without identifying the patient’s name. Given that any information disclosed about a patient or resident would likely constitute a breach of protected health information, it is imperative that providers inform staff that they are not to share any confidential information whether at work, or outside of work—including on their FaceBook pages or through Twitter (or in actual conversation with their family or friends). Staff should understand that they are not to share any patient information online—even if they are not naming the individual patient.

Additional Resources

Additional information on this issue is available through the HIPAA Collaborative of Wisconsin website, at www.hipaacow.org.

©2011 von Briesen & Roper, s.c

IRS Extends Transition Relief for Puerto Rico Qualified Plans to Participate in U.S. Group Trusts and Deadline to Transfer Assets

Posted in the National Law Review an article by attorney Nancy S. Gerrie and Jeffrey M. Holdvogt of McDermott Will & Emery regarding  U.S. employers with qualified employee retirement plans that cover Puerto Rico:

On December 21, 2011, the U.S. Internal Revenue Service (IRS) issued Notice 2012-6, which provides welcome relief for U.S. employers with qualified employee retirement plans that cover Puerto Rico employees.  Notice 2012-6 provides that the IRS will extend the deadline for employers sponsoring plans that are tax-qualified only in Puerto Rico (ERISA Section 1022(i)(1) Plans) to continue to pool assets with U.S.-qualified plans in group and master trusts described in Revenue Ruling 81-100 (81-100 group trusts) until further notice, provided the plan was participating in the trust as of January 10, 2011, or holds assets that had been held by a qualified plan immediately prior to the transfer of those assets to an ERISA Section 1022(i)(1) Plan pursuant to a spin-off from a U.S.-qualified plan under Revenue Ruling 2008-40.

Notice 2012-6 also extends the deadline for sponsors of retirement plans qualified in both the United States and Puerto Rico (dual-qualified plans) to spin off and transfer assets attributable to Puerto Rico employees to ERISA Section 1022(i)(1) Plans, with the resulting plan assets considered Puerto Rico-source income and not subject to U.S. tax.

There are now two separate deadlines:

    • First, in recognition of the fact that Puerto Rico adopted a new tax code in 2011 with significant changes to the requirements for qualified retirement plans, the IRS has extended the general deadline to December 31, 2012, for dual-qualified plans to make transfers to Puerto Rico-only plans, in order to give plan sponsors time to consider the effect of the changes made by the new tax code.
    • Second, in recognition of the fact that the IRS has not yet issued definitive guidance on the ability of an ERISA Section 1022(i)(1) Plan to participate in 81-100 group trusts, the IRS has extended the deadline for dual-qualified plans that participate in an 81-100 group trust to some future deadline, presumably after the IRS reaches a conclusion on the ability of a dual-qualified plan to participate in an 81-100 group trust, as described in Revenue Ruling 2011-1.

For more information on the issues related to participation of ERISA Section 1022(i)(1) Plans in 80-100 group trusts, see “IRS Permits Puerto Rico-Qualified Plans to Participate in U.S. Group and Master Trusts for Transition Period, Extends Deadline for Puerto Rico Spin-Offs.”

For more information on the issues plan sponsors should consider with respect to a dual-qualified plan spin-off and transfer of assets attributable to Puerto Rico employees to ERISA section 1022(i)(1) plans, see “IRS Sets Deadline for Transfers from Dual-Qualified to Puerto Rico-Only Qualified Plans.”

© 2011 McDermott Will & Emery