Tag: business

From Adele to the NFL, Large-Scale Event Disruptions Show the Need for Policyholders to Have a Strategy to Recover in the Event of a Loss

The ongoing Covid-19 pandemic and supply chain issues have caused several major event organizers to cancel or postpone concerts, sporting events, and awards shows, among many other large-scale events. For example, this week, Elton John postponed tour concerts after testing positive for Covid-19; last week, Adele put on hold her much-anticipated Las Vegas residency over “delivery delays” and Covid-19 diagnoses among her team; last month, the NHL, NBA, and the NFL rescheduled major games, with the NHL citing concerns about “the fluid nature of federal travel restrictions,” and the NFL citing “medical advice” after “seeing a new, highly transmissible form of the virus;” and the Grammys postponed its January 31 awards show in Los Angeles—to now take place on April 3 in Las Vegas. The cancellations and postponements of these types of events often have major financial effects on its organizers and producers. Given the risk of substantial losses following the cancellation of big-ticket events, businesses should be aware that they can tap into event cancellation insurance to mitigate and protect against these risks.

“Specialty” Event Cancellation Coverage

Contrary to general liability insurance coverage—which protects against third-party bodily injury or property damage claims—event cancellation insurance is an elective, specialty-type insurance coverage designed to protect a policyholder’s loss of revenue and expenses following the cancellation, postponement, curtailment, relocation, or abandonment of an event for reasons outside the policyholder’s control.

As a threshold matter, for there to be coverage under an event cancellation policy, there must first be a triggering cause covered under the policy. Some event cancellation policies are written as “all cause”/“all-risk” policies. These policies provide coverage for any cause that is not specifically excluded by the policy. Other event cancellation policies, however, provide more limited coverage and are written to insure event cancellations or postponements following a narrow set of causes, which are typically listed within the policy.

Potential Coverage Issues

Although event cancellation policies typically provide broad coverage, businesses must be wary of certain obstacles insurers may raise in trying to avoid paying claims. Insurers might seek to disclaim or limit coverage for various purported reasons, including alleged non-disclosure at the policy-application stage, failure to satisfy certain conditions after the loss, application of policy exclusions, timely notice, and questions about whether an event was cancelled for a covered cause of loss. By way of example, insurance companies have denied coverage for event cancellations during the Covid-19 pandemic arguing, in part, that the “proximate cause” of the policyholder’s loss was the Covid-19 pandemic (a “communicable disease” excluded by the policies) and not the government orders prohibiting large gatherings (a covered cause of loss under the policies).

Steps to Secure Coverage

If an event is cancelled or postponed that might be covered by event cancellation coverage, policyholders must know that they might have a claim for coverage to protect against the resultant losses and extra costs. To secure coverage, policyholders are well-advised to:

  1. review the event cancellation policy at issue for potential coverages (as well as all other insurance policies that might provide coverage);
  2. provide immediate notice of the potential event cancellation claim to all applicable insurers; and
  3. keep detailed, up-to-date accounting records of all losses and costs at issue, including lost revenue and profits, as well as extra expenses.

Article By Jorge R. Aviles and Andrea DeField of Hunton Andrews Kurth

For more insurance and reinsurance legal news, click here to visit the National Law Review. 

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.

New Poll Underscores Growing Support for National Data Privacy Legislation

Over half of all Americans would support a federal data privacy law, according to a recent poll from Politico and Morning Consult. The poll found that 56 percent of registered voters would either strongly or somewhat support a proposal to “make it illegal for social media companies to use personal data to recommend content via algorithms.” Democrats were most likely to support the proposal at 62 percent, compared to 54 percent of Republicans and 50 percent of Independents. Still, the numbers may show that bipartisan action is possible.

The poll is indicative of American’s increasing data privacy awareness and concerns. Colorado, Virginia, and California all passed or updated data privacy laws within the last year, and nearly every state is considering similar legislation. Additionally, Congress held several high-profile hearings last year soliciting testimony from several tech industry leaders and whistleblower Frances Haugen. In the private sector, Meta CEO Mark Zuckerberg has come out in favor of a national data privacy standard similar to the EU’s General Data Protection Regulation (GDPR).

Politico and Morning Consult released the poll results days after Senator Ron Wyden (D-OR) accepted a 24,000-signature petition calling for Congress to pass a federal data protection law. Senator Wyden, who recently introduced his own data privacy proposal called the “Mind Your Own Business Act,” said it was “past time” for Congress to act.

He may be right: U.S./EU data flows have been on borrowed time since 2020. The GDPR prohibits data flows from the EU to countries with inadequate data protection laws, including the United States. The U.S. Privacy Shield regulations allowed the United States to circumvent the rule, but an EU court invalidated the agreement in 2020, and data flows between the US and the EU have been in legal limbo ever since. Eventually, Congress and the EU will need to address the situation and a federal data protection law would be a long-term solution.

This post was authored by C. Blair Robinson, legal intern at Robinson+Cole. Blair is not yet admitted to practice law. Click here to read more about the Data Privacy and Cybersecurity practice at Robinson & Cole LLP.

For more data privacy and cybersecurity news, click here to visit the National Law Review.

Copyright © 2022 Robinson & Cole LLP. All rights reserved.

New Tools in the Fight Against Counterfeit Pharmaceuticals

The explosive growth of internet pharmacies and direct-to-consumer shipment of pharmaceuticals has provided increased access to, and reduced the cost of, important medications. Unfortunately, these same forces have increased the risks that counterfeit medicines will make their way to consumers, endangering patient safety and affecting manufacturers’ reputation in the public eye.

While the Food and Drug Administration attempts to police such misconduct through enforcement of the Food, Drug, and Cosmetics Act (FDCA), the resources devoted to enforcement are simply no match for the size and scope of the counterfeiting threat. Fortunately, pharmaceutical manufacturers are not without recourse, as several well-established tools may be used in the right circumstances to stop counterfeiters from profiting from the sale of knock-offs.

Experienced litigators can use the Lanham Act and the Racketeer Influenced Corrupt Organizations (RICO) Act to stop unscrupulous individuals and organizations from deceiving customers with counterfeit versions of trademarked drugs. Until recently, these legal weapons – including search warrants, seizures, forfeitures, and significant penalties – were typically wielded only by the government and only in criminal prosecutions.

As one recent case demonstrates, however, many of the tools that law enforcement has used for years to combat counterfeiters are also available to pharmaceutical manufacturers. In Gilead Sciences, Inc. v. Safe Chain Solutions, LLC, et al., the manufacturer of several trademarked HIV medications filed a civil complaint, under seal, alleging violations of the Lanham Act and RICO against scores of individuals and companies that were allegedly selling counterfeit versions of these drugs to patients across the country.

By deploying private investigators and techniques typically used by law enforcement, Gilead was able to gather a substantial amount of evidence before even filing the case. The company then used this evidence to secure ex parte seizure warrants and asset freezes, allowing it to locate and seize thousands of counterfeit pills and packaging before they could be shipped to unsuspecting consumers. Through the seizure of the financial proceeds of the alleged counterfeiting, Gilead prevented the dissipation of assets. If the company can successfully prove its RICO case, it stands to recover treble damages and attorneys’ fees as well.

Manufacturers of trademarked pharmaceuticals may consider using these and other tools to tackle the threat posed by counterfeiters. By drawing upon the experience and skills of trained litigators – particularly counsel who previously deployed these tools on behalf of the government while serving as federal prosecutors – companies can proactively protect their intellectual property and the consumers who depend on their products.

Article By Eric J. Beste, Anthony J. Burba and Heather F. Delgado of Barnes & Thornburg LLP

For more health law legal news, click here to visit the National Law Review.

© 2022 BARNES & THORNBURG LLP

Labor Shortage: Will Additional Seasonal Visas Help?

The United States is in the midst of a significant labor shortage. In response to the growing demand for labor, the U.S. government recently announced it will expand the number of H-2B visas available for seasonal workers this winter. Although the announcement is hailed by some as necessary, critics suggest the response may be insufficient to meet growing demand.

The Modern Labor Shortage

Following the economic turmoil spawned by the COVID-19 pandemic, the U.S. economy faces an unusual set of circumstances: instead of a lack of jobs, there is a lack of workers to fill available positions. Experts attribute the labor shortage to a number of potential causes, but some suggest a lack of immigrant labor is at least partially to blame. Due to lengthy processing times for immigration applications, foreign born workers hoping to enter the United States face unprecedented challenges obtaining the necessary paperwork to work here legally.

Biden Administration Expands Seasonal Visas

In response to the growing challenges of the labor shortage, the Department of Homeland Security (“DHS”) and the Department of Labor (“DOL”) recently announced they will issue a joint temporary final rule to make available an additional 20,000 H-2B temporary nonagricultural worker visas. These visas will be set aside for U.S. employers seeking to employ additional workers on or before March 31, 2022.

The visas are in addition to 33,000 visas already set aside for seasonal employers, marking a substantial 60% increase from the previous limit.

What is the H-2B Program?

The H-2B visa program allows U.S. employers who meet specific regulatory requirements to bring foreign nationals to the United States to fill temporary nonagricultural jobs. The industries most reliant on the H-2B program vary, but include landscapers, hotels, and ski resorts. By providing foreign workers to meet labor shortages in the United States, the program is meant to support the fluctuating needs of the U.S. economy.

The program has restrictions, however. The employment must be for a limited period, including seasonal or intermittent needs. To hire H-2B workers, employers must, among other things, certify to a lack of U.S. workers available to fill the position. Additionally, employers must certify that using the program will not adversely affect wages for similarly-employed U.S. workers.

Will Additional Seasonal Visas Be Enough?

Expansion of the H-2B program is being praised as necessary relief by some. However, others suggest it may not be sufficient to answer the growing labor demand in the country.

Business owners from Cape Cod, Massachusetts, hailed the news, citing the strained vacation industry that relies so heavily on seasonal workers to meet the high demand. Additional workers will provide necessary relief on many strained industries.

Steve Yale-Loehr, a professor of immigration law practice at Cornell, recently noted that if employers get past these hurdles, the visas could help the labor shortage, but only a little bit. After all, the labor shortage in the United States exceeds the additional 20,000 seasonal visas being offered. Recent estimates suggest 10.4 million jobs are available here. Moreover, applications under the H-2B program can be costly, forcing employers to weigh the financial implications of sponsoring workers under the program.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

For more immigration legal news, click here to visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

CFPB to Examine College Lending Practices

On January 20, the CFPB announced that it would begin examining the operations of post-secondary schools that offer private loans directly to students and update its exam procedures to include a new section on institutional student loans.  The CFPB highlights its concern about the student borrower experience in light of alleged past abuses at schools that were previously sued by the CFPB for unfair and abusive practices in connection with their in-house private loan programs.

When examining institutions offering private education loans, in addition to looking at general lending issues, CFPB examiners will be looking at the following areas:

  • Placing enrollment or attendance restrictions on students with loan delinquencies;
  • Withholding transcripts;
  • Accelerating payments;
  • Failing to issue refunds; and
  • Maintaining improper lending relationships

This announcement was accompanied by a brief remark from CFPB Director Chopra:  “Schools that offer students loans to attend their classes have a lot of power over their students’ education and financial future.  It’s time to open up the books on institutional student lending to ensure all students with private student loans are not harmed by illegal practices.”

Putting it Into Practice:  The CFPB’s concern with the experience of student borrowers is in line with a number of enforcement actions pursued by the Bureau against post-secondary schools.  The education loan exam procedures manual is intended for use by Bureau examiners, and is available as a resource to those subject to its exams. These procedures will be incorporated into the Bureau’s general supervision and examination manual.

Article By Moorari Shah, A.J. S. Dhaliwal, and Pouneh Almasi of Sheppard, Mullin, Richter & Hampton LLP

For more financial legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

Legal Considerations for Ready-to-Drink Cocktails

The ready-to-drink cocktail or “RTD” category has exploded in recent years, and it’s occupied by more than merely craft distillers familiar with a carefully made cocktail. Brewers, distillers and even vintners have joined in, capitalizing on consumers’ desires for pre-made, no-fuss beverages. The most unexpected development to emerge with RTDs, however, is the legal complexity surrounding these products—something the industry is only beginning to understand.

Many of these legal issues stem from the fact that the legal regulatory landscape in most states has not caught up with the rapidly evolving alcohol industry. That leaves ready-to-drink cocktails, much like hard seltzers, as not having a specific class or type in certain states. Suppliers looking to enter the space have plentiful options when creating a new product, subject to what licenses the manufacturer holds and what those licenses allow them to produce.

Ready-to-drink cocktails can be spirits, malt, sugar, cider or wine-based. The base of the RTD product, nonetheless, is the key federal factor. It is also an important factor in most states when determining how the product will be treated from a legal perspective in the following areas:

  • Licensing needed to manufacture, distribute and sell the product;
  • Applicable franchise law (Do beer franchise laws apply to low-proof spirits?);
  • Available channels of distribution (Can you sell this product in grocery or convenience store?);
  • Excise tax rate charged to the manufacturer (Does state law have a lower excise tax rate for low ABV products?);
  • Labeling and advertising considerations (Is your product a modified traditional product?); and
  • Trade practice considerations/promotions (Do spirits laws apply?).

Industry members dabbling in a sphere that is relatively new to the market, state regulators and legislatures should be mindful of the patchwork of emerging regulations. Like hard seltzer, ready-to-drink cocktails are not a clearly defined category under existing alcohol law. Meanwhile, states are working quickly to legislate in this domain. New Jersey is considering a reduced alcoholic beverage tax rate on low-ABV liquors to align with the beer tax rate (NJ SB 701), Vermont is considering legislation to define “low alcohol spirits beverage” and treat it as a “vinous beverage” (VT HB 590) and the Washington State Senate has a bill pending that would establish a tax on low-proof beverages (WA SB 5049).

From franchise issues to excise tax, the issues discussed here are only a glimpse of the nuanced and complicated legal landscape that governs the distribution of RTDs and alcoholic beverages across all categories.

Article By Nichole D. Shustack and Isabelle R. Cunningham of McDermott Will & Emery

For more food and beverage legal news, click here to visit the National Law Review.

© 2022 McDermott Will & Emery

USCIS Issues New Policy Guidance for O-1B Visas

United States Citizenship and Immigration Services (“USCIS”) recently issued policy guidance to clarify how to determine the appropriate visa classification for persons of extraordinary ability in the arts. Given the massive changes in the entertainment industry in the past year, including the increasing popularity of internet and streaming services, this guidance provides essential insight for those seeking to understand the nuances of O-1B nonimmigrant visas and determine which visa applies to their unique circumstances.

O-1 Visa Program for Individuals with Extraordinary Ability or Achievement

The O-1 nonimmigrant visa program provides nonimmigrant visas for individuals who possess extraordinary ability in the sciences, arts, education, business, or athletics, or who have demonstrated extraordinary achievement in the motion picture or television industry and been recognized nationally or internationally for those achievements.

The O-1 nonimmigrant visa program is broken down into the following classifications:

  • O-1A: Individuals with an extraordinary ability in the sciences, education, business, or athletics (not including the arts, motion pictures or television industry);
  • O-1B (Arts): Individuals with an extraordinary ability in the arts;
  • O-1B (MPTV): Individuals with extraordinary achievement in the motion picture or television industry.

Generally, to qualify for an O-1 visa, a beneficiary must demonstrate “sustained national or international acclaim” in their respective field. To prove this, applicants must provide evidence of their credentials, including national or international awards or prizes, membership in professional organizations in their respective field, published articles in notable trade publications, high salary for their services, as well as other relevant evidence of exceptional expertise.

Under the O-1B category, as noted above, individuals in the entertainment industry can demonstrate either extraordinary ability in the arts or extraordinary achievement in the motion picture and television industry. With the recent shifts in the entertainment industry, including the prevalence of household names from YouTube, TikTok, Instagram, etc., it has become increasingly common for applicants to possess qualities that fall under both the O-1B (Arts) and the O-1B (MPTV) categories.

Determining the Relevant Standard for Artists with Some Connection to MPTV

The USCIS Policy Manual acknowledges the difficulties associated with petitions that have elements of both O-1B (Arts) and O-1B (MPTV) classifications. According to the newly issued guidance, inclusion in the motion picture or television industry is not limited to whether artistic content will air on television or movie screens, noting that “USCIS considers streaming movies, web series, commercials, and other programs with formats that correspond to more traditional motion picture and television productions to generally fall within the MPTV industry’s purview.” Indeed, USCIS gives weight to whether an individual”s work aligns with industry organizations such as the Academy of Television Arts and Sciences.

However, under USCIS guidance, not all television stars are considered equal for the purpose of visa qualification. For instance, reality television poses an interesting problem because many of the “stars” are non-actors involved in a competition of some sort that takes place on television. According to USCIS, contestants on reality television programs fall outside of the MPTV industry, but judges, hosts, and those employed by the production company generally fall within industry parameters.

Video blogging, a staple of the increasingly popular YouTube and TikTok platforms, poses similar questions. However, USCIS makes clear that static web content, like video blogs, generally falls outside the O-1B (MPTV) classification and is more appropriate for O-1B (Arts) petitions. USCIS notes that if an artist’s work or appearance on an MPTV production is incidental to their non-MPTV work as an artist, the MPTV classification may not be appropriate.

Guidance for O-1B Visas

The newly-issued guidance provides some clarification of the nuances that distinguish O-1B (Arts) beneficiaries from O-1B (MPTV) beneficiaries. Potential beneficiaries and practitioners can continue to consult the USCIS Policy Manual for up-to-date guidance in this quickly changing industry.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

For more immigration legal news, visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

Greenwashing and the SEC: the 2022 ESG Target

A recent wave of greenwashing lawsuits against the cosmetics industry drew the attention of many in the corporate, financial and insurance sectors. Attacks on corporate marketing and language used to allegedly deceive consumers will take on a much bigger life in 2022, not only due to our prediction that such lawsuits will increase, but also from Securities & Exchange Commission (SEC) investigations and penalties related to greenwashing. 2022 is sure to see an intense uptick in activity focused on greenwashing and the SEC is going to be the agency to lead that charge. Companies of all types that are advertising, marketing, drafting ESG statements, or disclosing information as required to the SEC must pay extremely close attention to the language used in all of these types of documents, or else run the risk of SEC scrutiny.

SEC and ESG

In March 2021, the SEC formed the Climate and Environmental, Social and Governance Task Force (ESG Task Force) within its Division of Enforcement. Hand in hand with the legal world’s attention on greenwashing in 2021, the SEC’s ESG Task Force was created for the sole purpose of investigating ESG-related violations. The SEC’s actions were well-timed, as 2021 saw an enormous increase in investor demand for ESG-related and ESG-driven portfolios. There is considerable market demand for ESG portfolios, and whether this demand is driven by institute influencers or simple environmental and social consciousness among consumers is of little importance to the SEC – it simply wants to ensure that ESG activity is being done properly, transparently and accurately.

Greenwashing and the SEC

The SEC has stated that in 2022, it will be taking direct aim at greenwashing issues on many different levels in the investment world. As corporations and investment funds alike increasingly put forth ESG-friendly statements pertaining to their actions or portfolio content, the law has thus far failed to keep pace with the increasing ESG statement activity. It is into this gap that the SEC sees itself fitting and attempting to ensure that the public is not subject to greenwashing. In order to tackle this objective, expect the SEC to focus on the wording used to describe investments or portfolios, what issuers say in filings, and the statements made by investment houses and advisors related to ESG.

From this stem several topics that the SEC’s ESG Task Force will scrutinize, such as: whether “ESG investments” are truly comprised of companies that have accurate and forthright ESG plans; the level of due diligence conducted by investment houses in determining whether an investment or portfolio is “ESG friendly”; how investment world internal statements differ from external public-facing statements related to the level of ESG considerations taken into account in an investment or portfolio; selling “ESG friendly” investments with no set method for ensuring that the investment continues to uphold those principles; and many others.

2022, the SEC, and ESG

Given the SEC’s specific targeting of ESG-related issues beginning in 2021, we predict that 2022 will see a great degree of SEC enforcement action seeking to curb over zealous marketing language or statements that it sees as greenwashing. Whether these efforts will intertwine with the potential for increased Department of Justice criminal investigation and prosecution of egregious violators over greenwashing remains to be seen, but it is nevertheless something that issuers and investment firms alike must closely consider.

While there are numerous avenues to examine to ensure that ESG principles are being upheld and accurately conveyed to the public, the underlying compliance program for minimizing greenwashing allegation risks is absolutely critical for all players putting forth ESG-related statements. These compliance checks should not merely be one-time pre-issuance programs; rather, they should be ongoing and constant to ensure that with  ever-evolving corporate practices, a focused interest by the SEC on ESG, and increasing attention by the legal world on greenwashing claims, all statement put forth are truly “ESG friendly” and not misleading in any way.

Article By John Gardella of CMBG3 Law

For more environmental legal news, click here to visit the National Law Review.

©2022 CMBG3 Law, LLC. All rights reserved.

Sixth Circuit Clarifies When Statute of Limitations Commences in False Claims Act Whistleblower Retaliation Cases

On January 10, 2022, the Sixth Circuit held in El-Khalil v. Oakwood Healthcare, Inc., 2022 WL 92565 (6th Cir. Jan 10, 2022) that the statute of limitations period for a False Claims Act whistleblower retaliation case commences when the whistleblower is first informed of the retaliatory adverse employment action.

El-Khalil’s False Claims Act Whistleblower Retaliation Claim

While working as a podiatrist at Oakwood Healthcare, El-Khalil saw  employees submit fraudulent Medicare claims, which he reported to the federal government. In 2015, Oakwood’s Medical Executive Committee (MEC) rejected El-Khalil’s application to renew his staff privileges.  After commencing a series of administrative appeals, El-Khalil found himself before Oakwood’s Joint Conference Committee (JCC) on September 22, 2016. The JCC, which had the authority to issue a final, non-appealable decision, voted to affirm the denial of El-Khalil’s staff privileges.  On September 27, 2016, the JCC sent El-Khalil written notice of its decision.

Three years later, on September 27, 2019, El-Khalil sued Oakwood for retaliation under the False Claims Act whistleblower retaliation law.  Oakwood moved for summary dismissal on the basis that the claim was not timely filed in that the JCC’s decision became final when it voted on September 22, 2016 and therefore the filing on September 27, 2019 was outside of the 3-year statute of limitations. The district court granted Oakwood’s motion and El-Khalil appealed.

Sixth Circuit Denies Relief

In affirming the district court, the Sixth Circuit held that the text of the FCA anti-retaliation provision (providing that an action “may not be brought more than 3 years after the date when the retaliation occurred”) is unequivocal that the limitations period commences when the retaliation actually happened. It adopts “the standard rule” that the limitations period begins when the plaintiff “can file suit and obtain relief,” not when the plaintiff discovers the retaliation. The retaliation occurred on September 22 when the JCC voted to affirm the denial of El-Khalil’s staff privileges, and the JCC’s September 27 letter merely memorialized an already final decision.

In addition, the Sixth Circuit held that the False Claims Act’s whistleblower protection provision does not contain a notice provision. As soon as Oakwood “discriminated against” El-Khalil “because of” his FCA-protected conduct, he had a ripe “cause of action triggering the limitations period.” The court noted that if an FCA retaliation plaintiff could show that the employer concealed from the whistleblower the decision to take an adverse action, the whistleblower might be able to avail themself of equitable tolling to halt the ticking of the limitations clock.

Implications for Whistleblowers

Some whistleblower retaliation claims have a short statute of limitations and therefore it is critical to promptly determine when the statute of limitations starts to run.  For most whistleblower retaliation claims that are adjudicated at the U.S. Department of Labor, the clock for filing a complaint begins to tick when the complainant receives unequivocal notice of the adverse action.  Udofot v. NASA/Goddard Space Center, ARB No. 10-027, ALJ No. 2009-CAA-7 (ARB Dec. 20, 2011).  If a notice of termination is ambiguous, the statute of limitations may start to run upon the effective date of the termination as opposed to the notice date.  Certain circumstances may justify equitable modification, such as where:

  1. the employer actively misleads or conceals information such that the employee is prevented from making out a prima facie case;
  2. some extraordinary event prevents the employee from filing on time;
  3. the employee timely files the complaint, but with the wrong agency or forum; or
  4. the employer’s own acts or omissions induce the employee to reasonably forego filing within the limitations period.

See Turin v. AmTrust Financial Svcs., Inc., ARB No. 11-062, ALJ No. 2010-SOX-018 (ARB March 29, 2013).

When assessing the statute of limitations for whistleblower retaliation claims, it is also critical to calculate the deadline to timely file a claim for each discrete adverse action or each act of retaliation.  However, in an action alleging a hostile work environment, retaliatory acts outside the statute of limitations period are actionable where there is an ongoing hostile work environment and at least one of the acts occurred within the statute of limitations period.  And when filing a retaliation claim, the whistleblower should consider pleading untimely acts of retaliation because such facts are relevant background evidence in support of a timely claim.

Article By Jason Zuckerman of Zuckerman Law

For more whistleblower and business crimes legal news, click here to visit the National Law Review.

© 2022 Zuckerman Law

U.S. Supreme Court Lifts Preliminary Injunctions on Healthcare Worker Vaccine Mandate

On January 13, 2022, the United States Supreme Court upheld the Centers for Medicare & Medicaid Services (“CMS”) Interim Final Rule (the “Rule”) in a 5-4 decision, staying the preliminary injunctions issued for 24 states by the District Courts for the Eastern District of Missouri and the Western District of Louisiana.  Therefore, the CMS vaccine mandate is in full effect for all states except Texas, which was not part of the cases before the Court.  The Rule requires nearly all workers at Medicare- and Medicaid-certified facilities—whether medical personnel, volunteers, janitorial staff, or even contractors who service the facilities—to be fully vaccinated against COVID-19 unless they qualify for a medical or religious exemption.

The Court based its holding on two main points.  First, the Court held that Congress clearly authorized CMS to put conditions on funding it provides to the Medicare and Medicaid certified facilities.  The Court opined that perhaps CMS’s “most basic” function is to ensure that regulated facilities protect the health and safety of their patients, noting that Medicare and Medicaid patients are often some of the most vulnerable to infection and death from COVID-19.  Because CMS determined that a vaccine mandate is necessary to protect patient health and safety, the Court held the mandate “fits neatly within the language of the [authorizing] statute.”  The Court acknowledged that CMS has never required vaccinations in the past, but attributed this in part to the fact that states typically already require necessary vaccinations like hepatitis B, influenza, and measles for healthcare workers.

Second, the Court held that the mandate is not arbitrary and capricious, and cautioned the district courts that their role is merely to make sure an agency acts within the “zone of reasonableness.”  The Court found the administrative record sufficient to explain CMS’s rationale for the mandate and also accepted that getting the vaccine mandate in place ahead of winter and flu season satisfied the “good cause” standard for skipping the notice and comment period.

Healthcare employers subject to the Rule should immediately start implementing vaccine requirements if they have not already.  It is anticipated that in all states but Texas, CMS will likely begin enforcement of the vaccine mandate in approximately 30 days.  On December 28, 2021, CMS released guidance to state surveyors with enforcement standards to use starting 30 days from the memo, though at the time the memo only applied to the 25 states that were not enjoined.  Healthcare employers should also keep in mind that this is not the end of the road: the Court’s holding only means that the CMS vaccine mandate is in force while the 5th and 8th Circuits complete their review of the underlying state challenges to the mandate.  While the Supreme Court’s opinion sends a strong message that lower courts should uphold the mandate, there is no guarantee they will do so.

The legal landscape continues to evolve quickly and there is a lack of clear-cut authority or bright line rules on implementation.  This article is not intended to be an unequivocal, one-size-fits-all guidance, but instead represents our interpretation of where applicable law currently and generally stands.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, including, without limitation, potential liability should an employee become ill, requirements regarding family leave, sick pay and other issues.

Article By Keeley A. McCarty and Ashley T. Hirano of Sheppard, Mullin, Richter & Hampton LLP

For more health law legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.