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What Are the Top 3 Labor Law Developments of 2023 (So Far)?

It’s hard to believe the end of 2023 is upon us. This year is one for the history books on the labor law and labor relations fronts. In a year packed with significant legal landscape changes and high-profile labor disputes, it’s worth a quick recap of what are – in my view – the top 3 developments.

1. NLRB Revamps the Union Organizing Process

At the top of my list are changes the National Labor Relations Board (NLRB) made to the union organizing process. The board did several things in this regard. First, the NLRB reinstated the Obama-era “ambush” election rules that accelerate the union election timetable. Specifically, these rules truncate the amount of time between an election petition being filed and a vote being held (i.e., shorten the amount of time a company has to campaign).

Second, the agency issued arguably one of its most groundbreaking decisions in decades in Cemex. In that case, the NLRB altered the framework for how unions can and will be recognized and significantly loosened the standard for Draconian bargaining orders in some cases. Bottom line: The legal landscape, relatively speaking, makes it exponentially easier for workers to vote in unions now.

2. UAW Strikes at the Big 3

Labor relations issues haven’t been top headlines in recent decades. That changed this year. The ongoing nationwide union push at Starbucks over the last two years has garnered much attention, along with some other high-profile union pushes and disputes. But the United Auto Workers’ (UAW) coordinated strike efforts at Detroit’s “Big Three” automakers truly was remarkable in terms of the national attention it garnered. For the first time, the UAW struck General Motors, Ford, and Stellantis (aka Chrysler) at once.

The UAW took a creative approach: it targeted specific plants for work stoppages while leaving others operational. This approach had two primary benefits to the union: 1) it allowed it to slow the cash burn on their strike pay bank (estimated to be north of $800 million at one point) and 2) it allowed the union to keep the companies guessing as to which plants the UAW may bring offline next – creating operational inefficiencies and uncertainty. Ultimately, this strategy resulted in deals with each of the Big 3, and most view the UAW as having come out on top in these negotiations.

3. NLRB Starts to Scrutinize Non-competes

On May 30, the NLRB’s top lawyer, Jennifer Abruzzo, turned heads when she issued a memo signaling that her office was taking the view that non-compete agreements, in some circumstances, violate the National Labor Relations Act (NLRA). This development was somewhat surprising to some given that the NLRA was passed nearly 100 years ago and was not cited previously as a basis to invalidate standard restrictive covenants found in countless employment agreements around the country.

Abruzzo further announced the NLRB will be coordinating enforcement and a potential crackdown on non-competes with the other agencies, including the Federal Trade Commission – which this year also signaled an emphasis on these agreements – and the Department of Justice.

Given there’s a month left to go before the end of 2023, there may be other significant developments to come, but, for now, these are my top three. Happy Holidays!

Chicago Employers: Prepare for New Paid Leave Ordinance Effective 31 December 2023

On 9 November 2023, the Chicago City Council passed the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance¹(the Ordinance). The Ordinance takes effect on 31 December 2023, and replaces Chicago’s current paid sick leave ordinance.² Under the Ordinance, starting 1 January 2024, Chicago employees are entitled to up to 80 hours of paid time off in a 12-month period, with 40 hours allocated to paid sick leave and 40 hours allocated to general paid leave.

The Ordinance comes eight months after the Illinois legislature’s enactment of the Illinois Paid Leave for All Workers Act (PLAWA),³ which goes into effect on 1 January 2024 and guarantees that Illinois workers can earn or accrue up to 40 hours of paid leave per year that may be used for any reason. Although employers covered by the Ordinance are exempt from PLAWA,⁴the Ordinance adopts PLAWA’s purpose of providing general paid leave to employees in addition to paid sick leave.

METHOD FOR ACCRUAL, CARRYOVER, AND FRONTLOADING

The Ordinance provides that a covered employee⁵ will accrue one hour of general paid leave and one hour of paid sick leave for every 35 hours worked. Both general paid leave and paid sick leave are accrued in hourly increments and the total accrual for both forms of leave is capped at 40 hours in a 12-month period. At the end of the 12-month period, covered employees are allowed to carryover up to 16 hours of general paid leave and up to 80 hours of paid sick leave to the subsequent 12-month period. Chicago employers may also choose to “front-load,” or grant, 40 hours of paid leave or 40 hours of paid sick leave (or both) on the first day of employment or on the first day of the 12-month period. If an employer elects to front-load general paid leave hours, the employer is not required to allow employees to carry over unused general paid leave hours to the following 12-month period. However, employers must allow employees to carry over up to 80 hours of paid sick leave into the next 12-month period even if the leave is front-loaded.

USE OF LEAVE

Employers must allow covered employees to use accrued paid sick leave after completing 30 days of employment, and use accrued general paid leave after completing 90 days of employment. An employer may set a reasonable usage minimum increment, not to exceed four hours per day for paid leave or two hours per day for paid sick leave. If a covered employee’s scheduled workday is less than such minimum increments, then the minimum increment of time cannot exceed the covered employee’s regular scheduled workday.

Similar to the PLAWA, general paid leave under the Ordinance may be used for any reason and employees cannot be required to provide a reason for or documentation to support the leave. Paid sick leave may be used for the same reasons set forth under the current Chicago paid sick leave ordinance, including:

For illness or injury, or for the purpose of receiving professional care, which includes preventive care, diagnosis, or treatment for medical, mental, or behavioral issues, including substance use disorders;
For a family member’s illness, injury, or order to quarantine, or to care for a family member receiving professional care;
For domestic violence, or if a covered employee’s family is the victim of domestic violence;
If the covered employee’s place of business is closed by order of a public official due to a public health emergency, or the employee needs to care for a family member whose school, class, or place of care has been closed; or
For the covered employee to obey an order issued by the mayor, the governor of Illinois, the Chicago Department of Public Health, or a treating healthcare provider requiring the employee to stay at home to minimize the transmission of a communicable disease; to remain at home while experiencing symptoms or sick with a communicable disease; and to obey a quarantine order or an isolation order issued to the employee.

REQUESTING LEAVE

For general paid leave, an employer may require a covered employee to provide reasonable notice not to exceed seven days prior to the need for leave and may require preapproval to ensure continuity of business operations. An employer may also require seven days’ notice for paid sick leave. If the need for paid sick leave is not reasonably foreseeable, an employer may require a covered employee to give notice as soon as is practicable by notifying the employer by phone, email, or other means. The Ordinance defines “reasonably foreseeable” as including, but not limited to, prescheduled appointments with health care providers and court dates in domestic violence cases.

If a covered employee uses paid sick leave to be absent for more than three consecutive work days, the employer may require certification that the paid sick leave was used for a qualifying purpose. For health-related paid sick leave, this certification can be documentation signed by a licensed health care provider. For domestic violence-related paid sick leave this certification can be a police report, court document, or a signed statement from an attorney, a member of the clergy, or a victim services advocate. An employer may not delay the commencement of paid sick leave or delay payment of wages based on not receiving the required documentation or certification. However, an employer can take disciplinary action, up to and including termination, against a covered employee who uses paid sick leave for purposes other than those described in the Ordinance.

PAYMENT OF PAID LEAVE AND PAID SICK LEAVE

The Ordinance sets forth general requirements relating to the payment of general paid leave and paid sick leave. General paid leave and paid sick leave must be compensated at the employee’s regular rate of pay, including health care benefits. The regular rate of pay for nonexempt or hourly employees is calculated by dividing the employee’s total wages by total hours worked in full pay periods of the prior 90 days of employment. Wages do not include overtime pay, premium pay, gratuities, or commissions. Employers must pay an employee for their general paid leave and paid sick leave by the next regular payroll period after the time off was taken.

PAYMENT OF PAID LEAVE UPON TERMINATION

Under the Ordinance, an employer with 50 covered employees or less is not required to pay out any accrued, unused general paid leave upon termination. An employer with 51 to 100 covered employees (Medium Employer) must pay out accrued, unused general paid leave, up to 16 hours, until 31 December 2024. On or after 1 January 2025, a Medium Employer must pay all accrued, unused paid general leave upon an employee’s termination for any reason. Unless otherwise provided in a collective bargaining agreement, an employer cannot enforce a contract or a policy that requires the employee to forfeit any earned general paid leave upon separation from employment. Employers are not required to pay out accrued, unused paid sick leave.

Further, all unused paid sick leave and paid general leave is retained by the covered employee if the employer sells, transfers, or assigns the business to another employer and the employee continues to work in the City of Chicago.

EXISTING LEAVE POLICIES AND UNLIMITED PAID TIME OFF PROGRAMS

If a covered employee accrues paid sick leave before 1 January 2024 and the employer’s existing paid time off policy does not comply with the Ordinance, then on 1 January 2024, any paid sick leave that the covered employee is entitled to will rollover to the next 12-month period.

For employers that have recently adopted “unlimited paid time off policies,” the Ordinance provides that employers may offer unlimited paid time off policies and so long as the covered employer provides unlimited paid time off at the beginning of employment or the start of a 12-month period, there is no requirement to permit carryover of unused general paid leave to the next year. However, employees must still be allowed to carry over up to 80 hours of paid sick leave. Although the covered employer may still require reasonable notice for both foreseeable and unforeseeable reasons for leave, it may not require preapproval for such leave. Further, if the employer has an unlimited paid time off policy, upon separation from employment (or transfer outside of the City of Chicago’s boundaries), employers must pay the monetary equivalent of 40 hours of general paid leave less the amount of general paid leave used by the covered employee during the prior 12-month period preceding separation of employment (or transfer outside of the City of Chicago’s boundaries). Finally, employers must still comply with the other requirements in the Ordinance related to the administration of general paid leave and paid sick leave.

NOTICE AND POSTING

Similar to the current Chicago paid sick leave ordinance, a covered employer must post in a conspicuous place a notice advising covered employees of their right to paid time off. The Ordinance also sets the following requirements:

The employer must provide the same notice to the covered employee with the first paycheck issued to the employee, as well as on an annual basis with a paycheck issued within 30 days of 1 July.
In every pay stub or wage statement to the covered employee, the employer must provide a written notification stating the updated amount of paid leave and paid sick leave available to the employee.
The employer must notify employees at least five calendar days before any changes to the employer’s paid time off policy are made.
The employer must provide employees with a 14-day written notice of changes to its paid time off policies that affect the employees’ final wages.
The employer must notify the covered employee in writing that the employee may request payout of their accrued, unused paid leave time when the employee has not been offered a work assignment for 60 days.

PENALTIES FOR VIOLATION, DAMAGES, AND PRIVATE CAUSE OF ACTION

Any employer who violates the Ordinance may be subject to fines between US$1,000 and US$3,000 for each separate offense. If the employer violates the notice requirements, then the employer may be fined US$500 for the first violation and US$1,000 for any subsequent violation. Each day a violation occurs constitutes a separate and distinct offense.

Further, an employer who violates the Ordinance may be liable to the affected employee for damages equal to three times the full amount of any leave denied or lost by reason of the violation, plus interest, costs, and reasonable attorney’s fees paid by the employer to the covered employee. The Ordinance also provides for a private right of action, which is available to covered employees on 31 December 2023 for violations related to paid sick leave and 1 January 2025 for violations related to general paid leave.

Chicago employers should review their current paid time off policies and payroll systems for compliance and should consider consulting their labor and employment attorneys for assistance in developing a policy that meets the requirements of the Ordinance. The lawyers of our Labor, Employment, and Workplace Safety practice regularly counsel clients on a wide variety of issues related to paid leave policies and are well positioned to provide guidance and assistance to clients on this significant development in Illinois.

FOOTNOTES

¹Chi., Ill., Mun. C. Chi. § 6-130 (2023).

²Chi, Ill., Mun. C. Chi. § 6-105 (2023).

³Paid Leave for All Workers Act, Pub. Act No. 102-1143 (Jan. 1, 2024).

⁴See Sang-yul Lee, et al., Illinois Guarantees One Week of Paid Leave for All Workers, K&L Gates (Mar. 15, 2023), https://www.klgates.com/Illinois-Guarantees-One-Week-of-Paid-Leave-for-All-Workers-3-15-2023. Employers covered by local paid sick leave ordinances, such as the Ordinance, are exempt from PLAWA so long as such municipality has an ordinance in place on January 1, 2024. See 820 ILCS § 192/15(p).

⁵A “covered employee” is defined as an Employee who works at least two hours for a Chicago employer in any particular two week period. See Chi., Ill., Mun. C. Chi. § 6-130-010 (2023).

Legal Considerations for Healthcare Providers

Navigating the Physician and Non-Physician Relationship

Relationships between physicians and other healthcare professionals are highly regulated and can be complex to navigate. With non-physicians performing more services, including medical services with physician supervision, a variety of questions arise. What scope of services can be provided? What level of supervision is required? Can a non-physician have an ownership or related
interest in the entity providing services? With licensure on the line, it is critical to understand the legal requirements of the state where your practice operates.

What is the Corporate Practice of Medicine Doctrine (CPOM)?

Aimed at protecting patients, the CPOM restricts private ownership of medical corporations in an effort to prevent interference with a physician’s medical judgment. Although most states prohibit the corporate practice of medicine, every state provides exceptions. As with most laws, the exceptions vary by state.

Is it a Medical Service or Not?

What may seem like a simple question can be anything but. For example, a standard facial may be performed at a spa by a non-physician, but if the facial includes treatment that effects the tissue beneath the skin it crosses into the area of medical services. These nuances inform who can perform the service and with what level of physician supervision. What constitutes physician supervision is an additional area for consideration necessary to defining the physician/non-physician relationship and compensation.

Can Healthcare Providers Manage a Practice?

A Non-medical services provided by a healthcare professional require additional consideration with respect to corporate structure and compensation. Management services agreements are one way to afford a non-physician a greater stake in the practice. These agreements define the relationship and compensation associated with the provision of managerial and administrative services for a practice.

What Should I Know About Restrictive Covenants?

In the competitive medical field of today, healthcare providers should have a clear understanding of any restrictions before entering into a relationship with a physician or non-physician, switching practices, creating a new practice, forming
a relationship with multiple practices or terminating a relationship. It is important to understand any potential restrictive covenants and their impact, as you may want to challenge or negotiate those terms.

U.S. EV Sales Are Slowing: Implications for the Auto Industry

Throughout the past decade, analysts and policymakers have promoted electric vehicles (EVs) as the cars of the future, highlighting their potential to provide effective, environmentally friendly transportation for individual and business purposes alike. Pure EV sales in the United States rose from just over 10,000 in 2011 to nearly 500,000 in 2021, and the country is expected to add 1 million new EVs to its roads in 2023, aided by government subsidies. However, over the past year, the EV market has been struggling with price cuts and rising inventories; in August 2023, it took about twice as long to sell an EV in the U.S. as it did the previous January. Given the expectations for an EV takeover of the automotive industry, it is important to understand what is driving this slowdown, and how it may affect individuals and businesses in the years to come.

The Transportation of Tomorrow

Though fuel-powered motors were traditionally preferable due to their superior energy storage and range, concerns over their environmental impact in the late 20^th century propelled people to consider electricity-powered substitutes. Hybrid EVs, which use electric motors alongside internal combustion engines, became more widespread starting in the 1990s, while fully battery-powered electric cars, which only use energy stored in on-board batteries, have increasingly become practical options in the consumer market starting in the 2010s, though their recharging requirement remains a sore spot. Given the efficiency gap between fuel-powered motors and contemporary battery technologies, as well as typically higher costs for EV production, governments have often stepped in to offer economic incentives for EV purchasing and manufacturing, attempting to guide long-term automotive supply and demand toward sustainable transport options.

Government incentives for EV adoption have grown steadily over the past three decades, with large markets like the U.S. and EU commencing efforts in the 2000s, later followed by developing economies such as China and India. For years, the U.S. federal government and state governments have offered tax credits for producers and consumers adopting qualified electric drive motor vehicles, with states like California going even further by offering HOV lane access for EVs operated by a single occupant. President Biden designated increased EV adoption as a substantial element of his Investing in America agenda, setting a goal for 50% of all new vehicle sales in the U.S. to be electric by 2030. However, despite increasing environmental awareness and policy pressures, consumer demand has not always followed suit.

Wavering Consumer Demand

Currently, there is an oversupply of electric vehicles in the industry, reflecting continued automaker and government investment against slowing consumer demand. While most American consumers view adopting EVs as an inevitability, their anxieties relating to the range that the battery can produce and a lack of public charging infrastructure still induce uncertainties over dependability. During the COVID-19 pandemic, shelter-in-place orders reduced the need for frequent personal transportation, allowing consumers greater flexibility to adopt EVs. However, now that pandemic restrictions no longer present a substantial external variable and more workers are required to return to the office, vehicles powered by internal combustion engines remain preferable as the most reliable transport option. This is supported by the changing profile of the EV consumer – the percentage of EV shoppers trading in a vehicle they already own has doubled over the past decade, indicating that many EV consumers do not rely on them as their primary mode of transport. Amplifying the charging concern, a Pew Research Center survey from July found that Americans have low levels of confidence that the U.S. will build necessary EV infrastructure, including critical charging ports, dampening enthusiasm that the Biden administration’s EV goals will be met on time.

On the other hand, pricing continues to be another hurdle for greater EV adoption. According to Cox Automotive, the average transaction price for a vehicle in the U.S. was around $48,000 in September 2023; for EVs, the number was between $53,000 and $60,000. The higher price tag for EVs tends to be a result of manufacturing costs remaining more expensive than they would be for producing gasoline-powered vehicles, given the auto industry’s substantially longer experience making internal combustion engines compared to EV technologies and the still-inflexible EV supply chain. High interest rates render borrowing money for car payments more expensive, along with inflation reducing consumer purchasing power and global supply chain disruptions contributing to the issue as well. According to S&P Global Mobility, while 86% of U.S. car buyers were considering an EV in 2021, the number fell to 67% in 2023. Despite government tax credits, investing in a relatively more expensive EV purchase is a hefty request for many American consumers concerned about short-term costs in today’s economy.

Effects on the Auto Industry

The auto sector is facing the classic problem for a sector in transition, i.e., growing supply to pace with developing demand. The current market condition is not a problem of declining demand but supply outpacing demand and the auto industry is already making corrections. Ford, having opened reservations for its fully electric F-150 Lightning model in May 2021, closed them by the end of the year due to excess supply, and by September 2023, announced it was ramping up production of its hybrid F-150s in response to lowered than anticipated sales of the Lightning. Lucid, a high-profile luxury EV brand, has seen two consecutive quarters of weaker than expected demand, most recently delivering 600 fewer of its Air luxury sedans than Wall Street had expected in the second quarter of 2023. Tesla’s aggressive price cuts have hindered the growth of competition in the EV industry, with two-thirds of all EVs sold by the Elon Musk-owned automotive giant, as consumers find it difficult to afford suitable alternatives. At the end of the second quarter of 2023, several automakers announced their decision to move to the Tesla charging standard, stranding many vehicles on factory floors with an obsolete charging outlet, thus further exacerbating the dilemma.

Pushback against public sector efforts to mandate EV adoption may also reshape expectations for how the auto industry will move forward in the coming decade. On November 8, the U.S. Senate voted 50-48 to overturn Biden’s decision to waive some “Buy America” requirements for government-funded electric vehicle charging stations. Western lithium and graphite miners have started charging the EV supply chain higher prices to reduce dependence on Chinese supply of these materials. Owing to anxieties over cheap Chinese-manufactured EVs flooding the American market as has happened in Europe and a potential Chinese monopoly of rare earth minerals critical in EV production, these protectionist moves on an already inflexible EV supply chain are likely to further delay progress toward the administration’s vehicle electrification aims. EV adoption also remains inconsistent across U.S. regions, being significantly lesser in states like Texas where gas prices and home energy rates are lower, compared to others like California where the opposite is true. Nonetheless, there are reasons to remain optimistic about the long-term growth of EV sales in the auto industry – an S&P study in 2023 showed that people were willing to accept charging times of less than an hour and less range on an EV compared to a gasoline equivalent, and while the number of EV buyers fell from 2021 to 2023, it was still higher than in 2019. Understanding that a gradual shift towards electricity-powered vehicles is still probable, individuals and businesses alike should note that it will likely occur over a longer period than analysts and policymakers predict. Meanwhile, greater hybrid vehicle production and purchasing could generate a slew of new opportunities in the short to medium term.

This article was authored by William Samir Simpson.

Corporate Transparency Act: Implications for Business Startups

Congress passed the Corporate Transparency Act (CTA) in January 2021 to provide law enforcement agencies with further tools to combat financial crime and fraud. The CTA requires certain legal entities (each, a “reporting company”) to report, if no exemption is available, specific information about themselves, certain of their individual owners and managers, and certain individuals involved in their formation to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. The beneficial ownership information (BOI) reporting requirements of the CTA are set to take effect on January 1, 2024. Those who disregard the CTA may be subject to civil and criminal penalties.

A recent advisory explaining the CTA reporting requirements in further detail may be found here.

While the CTA includes 23 enumerated exemptions for reporting companies, newly formed businesses (Startups) may not qualify for an exemption before the date on which an initial BOI report is due to FinCEN. As a result, Startups (particularly those created on or after January 1, 2024) and their founders and investors, must be prepared to comply promptly with the CTA’s reporting requirements.

As an example, businesses may want to pursue the large operating company exemption under the CTA. However, among other conditions, a company must have filed a federal income tax or information return for the previous year demonstrating more than $5 million in gross receipts or sales. By definition, a newly formed business will not have filed a federal income tax or information return for the previous year. If no other exemption is readily available, such a Startup will need to file an initial BOI report, subject to ongoing monitoring as to whether it subsequently qualifies for an exemption or any reported BOI changes or needs to be corrected, in either case triggering an obligation to file an updated BOI report within 30 days of the applicable event.

Startups also should be mindful that the large operating company exemption requires the entity to (i) directly employ more than 20 full time employees in the U.S. and (ii) have an operating presence at a physical office within the U.S. that is distinct from the place of business of any other unaffiliated entity. Importantly, this means that a mere “holding company” (an entity that issues ownership interests and holds one or more operating subsidiaries but does not itself satisfy the other conditions of this exemption) will not qualify. Startups may want to consider these aspects of the large operating company exemption during the pre-formation phase of their business.

Fundraising often requires Startups to satisfy competing demands among groups of investors, which can lead to relatively complex capitalization tables and unique arrangements regarding management and control. These features may cause BOI reporting for Startups to be more complicated than reporting for other small and closely held businesses. Founders, investors, and potential investors should familiarize themselves with the CTA’s reporting requirements and formulate a plan to facilitate compliance, including with respect to the collection, storage and updating of BOI.

By ensuring all stakeholders understand the BOI reporting requirements and are prepared to comply, your Startup can avoid conflicts with current and potential investors and ensure that it collects the information that it needs to provide a complete and timely BOI report.

Yezi (Amy) Yan and Jordan R. Holzgen contributed to this article.

A Time for Clauses – Santa and No Gag

As we approach December, the impending arrival of Santa Claus is no doubt dominating discussions in many households. However, there is another, perhaps lesser known, “clause”-related item that health plan sponsors need to keep top of mind in the coming month.

Specifically, as discussed in our blog found here, health plan sponsors must remember to file their first annual “no gag clause” attestation on December 31, covering the period from December 27, 2020 through the attestation date.

Here are some quick reminders about the requirement, along with some next steps for plans that are catching up:

What is the “No Gag Clause” Attestation?

The “no gag clause” attestation, which must be filed annually by December 31, requires group health plans and issuers to certify that they are not subject to agreements that directly or indirectly restrict them from disclosing provider-specific cost or quality-of-care information to certain parties, electronic accessing de-identified claims and encounter information (consistent with privacy laws) or sharing this information with a business associate.

How to File an Attestation

The attestation is filed electronically on CMS’s dedicated website, found here. Instructions, frequently asked questions and a user manual can be found on CMS’s website here.

Who is Responsible for the Attestation?

While self-insured plans retain the ultimate responsibility for ensuring that the attestation is submitted, they can contract with their third-party administrators to file on their behalf.

For fully-insured plans, the insurance issuer’s submission of an attestation will satisfy the attestation requirement for both the plan and the issuer.

What Should Plan Sponsors Do Now?

For plans that have not yet begun to address the attestation, there is still time to take the necessary steps as follows:

If they have not already done so, plans should review their service agreement(s) to ensure that they do not contain any gag clauses.
Plans may also wish to obtain written confirmation from their administrators that no prohibited gag clauses are included in their applicable contracts (and, if any are, that the contracts are amended to remove them effective December 27, 2020).
Self-insured plans should contact their administrator(s) to coordinate who will be filing the submission. At this stage, many administrators already have their processes in place and may not wish to file on the behalf of the plan, in which case the plan will need to do the filing. This will make accomplishing the first two steps more important.

Getting these tasks accomplished as soon as possible will allow plan sponsors to put these prohibited clauses behind them and focus on the good Clauses of the season—Santa and Mrs.

Taking Stock of a Big Month for Methane Policy

November has been a big month for methane policy, featuring announcements of new international, domestic, and private sector initiatives. A common thread across all of the new initiatives is the aim of achieving more ambitious, credible, and internationally consistent standards for measurement, monitoring, reporting, and verification (MMRV) of methane emissions from the oil and gas sector. Below is a review.

China’s Methane Pledge. China is the world’s largest emitter of methane, accounting for 14% of the global total, and, for the first time, the government made an international announcement about methane policy. At a November summit held in Sunnylands, California, President Joe Biden and Chinese President Xi Jinping announced a new agreement to address climate change. Previous Chinese pledges had only targeted carbon dioxide, but the new agreement includes a first-ever commitment by the country to tackle non-CO2 emissions, including methane. Just prior to the Sunnylands summit, the Chinese government issued an action plan outlining goals to curb flaring and to develop a methane MMRV program.

EU Methane Regulation. The European Union (EU) also broke new ground on methane policy this month. After all-night talks, the EU’s governing entities finalized a new Methane Regulation, which targets not only domestic sources of methane but also emissions attributable to imports of natural gas into the Continent—including from the United States. For imports, the Regulation establishes phased requirements. The first phase focuses on data collection coupled with a mechanism for detecting and rapidly addressing large leaks. The second phase will condition imports on application of prescribed, uniform MMRV measures. Starting in 2030, importers will be subject to a limit on their methane “intensity”—a metric that measures methane emissions per unit of gas throughput. The methane intensity limit will apply across the entire value chain, from pre-production through final delivery. The Regulation requires the EU Commission to promulgate the intensity standard by 2027.

International Working Group on MMRV for Natural Gas Markets. To support not only these emerging governmental policies but also expanding private sector efforts to create a market for “Differentiated Gas,” a multilateral initiative was announced in November—the International Working Group to Establish a Greenhouse Gas Supply Chain Emissions Measurement, Monitoring, Reporting, and Verification (MMRV) Framework for Providing Comparable and Reliable Information to Natural Gas Market Participants (the Working Group). The Working Group’s members consist of the U.S. government, eleven other governments, the European Commission, and the Mediterranean Gas Forum. The Working Group’s objective is to develop a consensus-based, consistent international framework for supply chain MMRV. A consistent framework will make it easier for buyers to demand and suppliers to provide natural gas with a lower greenhouse gas profile. The Working Group will not prescribe emission targets, but it acknowledges that governments may use its work products to inform regulatory processes.

The Working Group has stated that it will draw on input from expert stakeholders. To that end, a consortium of three universities participating in the Energy Emissions Modeling and Data Lab (EEMDL) has convened a group of academic, think tanks, ENGO, and market experts to develop recommendations for MMRV standards for the Differentiated Gas market. (I am a participating expert in the EEMDL initiative.) This month, a subset of the experts group published a paper in Nature Energy outlining the issues.

Financial Institutions Call for Industry Action. Underscoring the increasing private sector demand for Differentiated Gas, two major financial institutions released reports in November calling for industry action. JP Morgan, one of the world’s largest financiers of fossil fuel projects, issued a report underscoring its commitment to achieve a net zero-aligned emission intensity reduction target for its oil and gas sector portfolio. Methane reductions are a key element of its net-zero strategy. To that end, the report identifies and exhorts the industry to adopt best-in-class practices for methane MMRV and mitigation.

In the same week, one of the world’s largest insurance underwriters for the oil and gas sector, Chubb, rolled out a Methane Resource Hub, a digital resource center for its clients. The site provides information on MMRV and mitigation techniques, technologies, studies, and policies.

Waiting for EPA. Also expected in November is EPA’s proposed implementation rules for the “Methane Fee” that was enacted as part of the Inflation Reduction Act (IRA). The IRA provisions apply a per-ton fee to facilities in the oil and gas sector that exceed specified methane intensity limits. To implement the fee, EPA will need to promulgate methods for facility-level methane intensity measurements. A significant issue in the rulemaking is the extent to which EPA will allow affected facilities to use advanced methane measurement technologies to calculate their annual emissions.

10 Content Marketing Best Practices to Implement Today

While many law firms are content producing powerhouses, pushing out alerts, social media posts and other information daily via the many distribution channels with which they engage their target audiences, they often fail to take the time to think about the how, what, when, where and why of the content they are creating and disseminating and how it will help/benefit their clients and other influential readers.

For example, do you ever feel as if you are a content machine who is just going through the content motions, following orders of those around you, because “that’s the way they’ve always done it,” or because you don’t want to question a partner or someone more senior to you?

If so, take a moment to give yourself a “content timeout” so you can really think about why you are doing what you are doing.

If it doesn’t make sense with your brand and business development goals, immediately change your course.

Taking the time to ensure that your content marketing strategy and your BD strategy are aligned will enable you to create more focused, strategic content that will better engage and resonate with your target audiences (more on this below).

Remember that the goal of content marketing is not just about populating your social media feeds with a steady stream of content.

Rather, the goal is to use content as a differentiator and a tool to help position you and your firm as a thought leader, which will help to keep you top of mind with key individuals.

Here are a few things you can do right away to take your content strategy to the next level to help you achieve these goals.

1 – Align your content strategy to your business development goals. I always say that every single person involved in legal marketing is a business development person regardless of your actual job title or function.

You must be focused on lead generation and business development in your position to really understand what the firm’s goals are, especially when it comes to content.

Aligning your content and social media strategy to your BD goals will enable you to choose the right practices and industries on which to focus.

You can then also use your analytics and competitive intelligence to help support your efforts (such as Google analytics, web site, social media and email stats, among others).

Remember, everything you do should be centered on bringing in business for the firm, including every single piece of content you create.

2 – Show vs. tell. Every piece of content you post should be value-added, helpful and client-centric. So, don’t just tell your clients why you are the best lawyers, show them. Think about how to demonstrate that you are a leader in your field versus telling someone.

Write content with this concept in mind – from the highest-level thought leadership article to every social media post.

Think about “why should your clients care about this?” when crafting language.

Remember that most often, your clients are not lawyers, so throw the legalese and jargon out the window and put yourself in their shoes. Clients want to know who you are and how you can help them. It’s that simple.

3 – Reuse and repurpose everything. Think headshots, practice area images, previously published client alerts and articles.

Every image and piece of content you have can be used multiple times. For example, you can pull out an interesting statistic, create a word cloud, use icons or big numbers to bring important points to life, a quote or just tell the story in a different way, and voilà, it’s a different piece of content! Use an editorial calendar to help you track and manage the posts.

3 – Create once, publish everywhere (but adjust the message for the medium). Delving deeper into the point above, while you should leverage the social platforms most frequently used by your clients and prospects, don’t post the same exact content and image to LinkedIn that you would post to Twitter or Facebook or Instagram.

It’s very important that you demonstrate to your target audiences that you have mastery of the social media platforms that you are utilizing or else you are committing social media suicide. Incorrectly using a particular platform shows your audience that you lack critical social media skills.

Also, while it’s great if your firm has thousands of followers on LinkedIn and Twitter and the like, don’t forget that you also need to tap into the critical social networks of your lawyers to have maximum engagement.

Ensure that your lawyers are properly trained on how to effectively use LinkedIn to share and like content or else you will miss out on reaching their powerful networks!

4 – Use free online tools to gain a competitive edge. Working with mid-size firms with limited budgets, I often have to get resourceful. I use a lot of online free/low-cost tools to help me gain a competitive advantage over my peers.

Also, set up Google Alerts on your top clients and prospects. These are free and give you great insights into your clients. Arm yourself with as much information as you can and you will have an advantage over your competitors and demonstrate to your clients how much you care about their businesses.

4 – Use evergreen content to your advantage: Evergreen content is SEO-optimized content that doesn’t have an expiration date, or lose its relevancy and value over time. It is high-quality, helpful content that provides value whether it is read today, next week or a year from now.

So why is it called “evergreen?” The evergreen tree is a symbol of everlasting life because this type of tree keeps its leaves throughout the seasons, rather than shedding them. Like the trees, evergreen content is considered sustainable and lasting.

Creating an evergreen content strategy is easier than you think because you already have all of the content and most of the tools that you need. It just requires a little creative thinking on how to effectively repurpose them.

For example, content opportunities (and the visual assets that go along with them) such as lawyer bios, holidays, office openings, firm history, timeless client alerts, case studies on matters/practices, careers, professional development, pro bono and diversity, events, as well as information from transcripts can all be used to fill in content gaps in your editorial calendar.

5 – Incorporate visuals. Taking the point above a step further, I’m a firm believer that you should post nothing to social media without an image. Why? Because social media posts with images gain more views and engagement, period. Anyone can incorporate visuals into their social media strategy, you just need to be creative and resourceful.

You can easily reuse and repurpose images that you already have, and resize them using tools right on your smartphone. In addition, there are many photo and online design tools that enable you to create images for free or at a low cost such as canva.com and Picstitch that enable you to create visually arresting graphics to bring your social media posts to life.

For more low cost and even better – free! – tools that you can incorporate into your social media content strategy, take a look at my JD Supra article that explores 17 really cool martech tools that you should know about.

6 – Focus on the headlines. In order to stand out from the many emails that your in-house counsel receive each day and the countless social media posts they see clogging their feeds, you must create headlines and copy that will draw them in. We already talked about how to effectively use images in your posts, but we didn’t delve into headlines.

The subject lines/headlines of your emails (so client alerts, press releases, white papers, CLE programs and anything else that you send via email to clients/contacts) is the very first thing that they see and determines whether someones wants to open up your email – or not. So make them clear, actionable, short, succinct (and extra points if you can create a “how-to” or “why” piece or use numbers or a list format such as what I did with my title above). “Listcicles” are very popular ways of communicating complex information into digestible chunks.

Network and share online: LinkedIn is the most important social media channel for law firm business development and professional networking. It enables you to quickly build and grow relationships so that you can bring in new business and referrals, build your brand and stay top of mind with key individuals in your professional network. So, use it smartly and use it often (meaning post and share value-added content, and engage meaningfully with your connections). I write a lot about how to maximize LinkedIn and use it effectively – see my latest JD Supra articles on LinkedIn profile basics and more advanced LinkedIn to-do’s – because I have never seen the platform directly lead to new business more than I have in the last year (hint – use the notifications section to give you reasons to be in touch with important contacts in your network – information is power here!).
Think quality not quantity. I touched on this a bit above, but since it’s such an important point, I wanted to dedicate a bullet to it. The ultimate goal of content marketing is to drive readers to take action, preferably in the form of contacting and retaining your firm. So it’s not how often you post content to social media that makes a true impact, but rather what you say and how you say it. The quality not the quantity of your posts should always be your primary focus, and keeping that concept at the forefront of your content strategy will help to guide your overall efforts.

For all firms and lawyers, the goal of content marketing is lead generation and business development. How you get there is by building targeted relationships, staying top of mind, providing helpful content and consistently adding value.

Ohio Legalizes Recreational Use of Marijuana

Earlier this month, Ohio joined the growing number of states to legalize the recreational use of marijuana. The new law, which becomes effective December 7, 2023, allows adults aged 21 and older to (within certain restrictions) use, possess, transfer without renumeration to another adult, grow, purchase, and transport marijuana without being subject to arrest, criminal prosecution, or civil penalties.

A natural question for Ohio employers is whether the new law impacts their drug-free or zero-tolerance workplace policies, e.g., can employment be denied or terminated due to a positive drug test? Although the governor has asked the legislature to make changes (not specifically focused on employer policies) to the new law before it takes effect, the new law expressly states that it does not:

Require employers to permit or accommodate an employee’s use, possession, or distribution of adult-use cannabis;
Prohibit employers from refusing to hire, discharging, disciplining, or otherwise taking adverse employment action against individuals with respect to hire, tenure, terms, conditions, or privileges of employment because of an individual’s use, possession, or distribution of cannabis that is otherwise in compliance with the law;
Prohibit employers from establishing and enforcing drug testing policies, drug-free workplace policies, or zero-tolerance drug policies;
Permit individuals to sue employers for refusing to hire, discharging, disciplining, discriminating, retaliating, or otherwise taking an adverse employment action against them with respect to hire, tenure, terms, conditions, or privileges of employment related to their use of cannabis; or
Affect the authority of the administrator of workers’ compensation to grant rebates or discounts on premium rates to employers that participate in a drug-free workplace program.

The new law also provides that individuals terminated because of their cannabis use are considered to have been “discharged for just cause” for purposes of eligibility for unemployment benefits if their use violated an employer’s drug-free workplace policy, zero-tolerance policy, or other formal program or policy regulating cannabis use. Thus, the new law makes it clear that employers can still enforce their drug-free and zero-tolerance workplace policies. Ohio employers should consider advising employees that the new law will not impact the enforcement of such policies.

New Lawsuit Addresses Eligibility Concerns for US Collegiate Athletes

It has been over two years since the National Collegiate Athletic Association (“NCAA”) lifted its prohibition on college athletes being able to profit from their name, image, and likeness (“NIL”). When people traditionally think of NIL, they think of student athletes at the collegiate level receiving payment for their likeness. However, collegiate athletes are not the only student athletes able to avail themselves of the burgeoning world of NIL.

To date, thirty-three states have enacted some form of legislation or executive order permitting high school athletes to profit from their NIL. As the NIL landscape continues to develop, one of the more interesting questions posed as a result of these new policies is whether or how a student athlete’s engagement in NIL at the high school level might affect their NCAA eligibility. A new lawsuit of first impression could address this very issue.

In November 2023, Matt and Ryan Bewley, twin brothers from Fort Lauderdale, Florida, filed a federal lawsuit against the NCAA in the U.S. District Court for the Northern District of Illinois.

The Bewleys are former basketball players at Overtime Elite Academy (“OTE”). OTE is a professional basketball league and training program for high school players. “In addition to basketball training, OTE places equal importance on education. The league offers a fully accredited curriculum, allowing players to pursue their academic goals alongside their basketball aspirations.”^[1]OTE players can either make a career playing for the OTE league, or they can play until they satisfy the coursework necessary to graduate and go to college and perhaps play for a college team.

Established mere months before the NCAA lifted their ban on NIL, OTE, coincidentally, was founded in part to offer an alternative path for athletes to receive compensation for their talents.^[2] As such, OTE initially offered their athletes only salaries. After the NCAA changed their NIL policies, however, OTE adjusted the options available to their players. Because accepting a salary can threaten college eligibility, OTE today offers their players one of two options: they can either collect a salary or, for those with collegiate-level aspirations, opt for a scholarship instead thus keeping their eligibility intact.

When the Bewleys signed with OTE, they did not have the option to elect a scholarship. Instead, they were paid a salary. The brothers were later awarded and accepted scholarship offers to play for Chicago State University. As a result of their OTE payments, however, the NCAA, citing amateurism rules, deemed the Bewley brothers to be ineligible. The NCAA reasoned that because the Bewleys’ OTE compensation exceeded their “actual and necessary expenses,” they could not be considered amateur players. Additionally, the NCAA “also said the twins competed for a team that considered itself professional.”^[3]

In their lawsuit, the Bewleys argue that the NCAA’s amateurism rules are anticompetitive and violate federal antitrust law; specifically, Section 1 of the Sherman Act. They allege that the NCAA is effectively restraining trade by limiting the amount of compensation that student-athletes can receive. This argument is reminiscent of the arguments raised by the Plaintiffs in the Alston case, which opened the door for NIL. In Alston, the Plaintiffs argued that the NCAA violated federal antitrust law by placing limits on the education-related benefits that colleges and universities can provide to student-athletes. The United States Supreme Court ruled in favor of the Plaintiffs in Alston, applying antitrust law directly to the NCAA and finding that the rule was an anti-competitive restriction on interstate commerce.

Both Alston and now Bewley challenge the NCAA’s authority to regulate student-athletes’ compensation. The Bewley brothers are also alleging that the NCAA’s determination violates state law, specifically, the Illinois Student-Athlete Endorsement Rights Act (“ISAEA”). The ISAEA allows student-athletes in Illinois to monetize their NIL by entering into deals with any company or organization.

The NCAA’s primary rebuttal in Bewley is that, while student-athletes can now profit from their NIL, they are still considered “amateurs” and should not be paid to play for professional teams while at the high school level. Specifically, the NCAA provides that “[p]rospective student-athletes may accept compensation from their club team while in high school, provided payments do not exceed costs for the individual to participate on the team.”^[4] In other words, the compensation received must be “actual and necessary,” which the NCAA defines as being: meals, lodging, apparel, equipment and supplies, coaching and instruction, health/medical insurance, transportation, medical treatment and physical therapy, facility usage, entry fees, and other reasonable expenses.

The NCAA believes that the Bewleys’ compensation from OTE exceeded these permissible limits, maintaining that it was not related to legitimate educational expenses and that their participation in the OTE program was akin to playing for a professional team.

The outcome of the Bewley case could have a significant impact on the future of compensation in college athletics, and specifically as it relates to the further application of federal antitrust law to the NCCA as well as nuanced circumstances where high school athletes who received payment before the NCAA permitted NIL now face risks relating to their collegiate eligibility.

[1] What is Overtime Elite?, Fan Arch, https://fanarch.com/blogs/fan-arch/what-is-overtime-elite (last visited November 11, 2023).

[2] Overtime Elite: Basketball Leaguge to Pay High School Players Six-Figure Salaries, Boardroom, https://boardroom.tv/overtime-elite-basketball-league-to-pay-high-school-players-six-figure-salaries/ (March 4, 2021):

OTE sees itself as a solution to the lack of compensation for amateur athletes and will offer every player a minimum salary of $100,000 per year, plus bonuses and equity shares in Overtime. Players will also profit from their likeness, a long-disputed issue in college sports, through sales of jerseys, trading cards, video games, and NFT’s.

Athletes will also be able to sign direct sponsorships with sneaker companies, something that is not allowed for collegiate athletes.

“Paying basketball players isn’t radical,” said Overtime President, Zack Weiner. “What’s radical is telling people who put in thousands of hours of work that they have to do it for free.” OTE will change this.

[3] Twin Brothers Suing NCAA in Federal Court Over Eligibility Dispute Involving NIL Compensation, Associated Press News, https://apnews.com/article/ncaa-nil-lawsuit-3f8cd7d2c6f7b73e816f77741663fb24 (November 3, 2023, 9:10 PM) (internal quotations omitted).

[4] Payment from Sports Team, NCAA, http://fs.ncaa.org/Docs/eligibility_center/ECMIP/Amateurism_Certification/Payment_from_team.pdf (last visited November 11, 2023).

Tag: business

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