Tag: civil rights

Abortion-Related Travel Benefits Post-Dobbs

Immediately following the Supreme Court decision in Dobbs v. Jackson returning the power to regulate abortion to the states, a number of large employers announced that they would offer out-of-state travel benefits for employees living in states where abortion-related medical care is unavailable. Employers considering offering abortion-related travel benefits have several key considerations to keep in mind. The law currently allows health plans to provide reimbursement for travel primarily for and essential to medical care. Although this area of the law is evolving, employers with self-funded medical plans may amend their existing medical plans to provide abortion-related travel benefits while those with fully insured medical plans may face more obstacles in providing such benefits.

In Dobbs v. Jackson, an abortion clinic challenged a Mississippi law that would ban abortion after 15 weeks of pregnancy, with limited exceptions. In establishing the constitutional right to abortion in Roe v. Wade, the Supreme Court restricted states in their ability to limit or ban abortions before viability of the fetus, or 24 weeks from the time of conception. In upholding the Mississippi law, the Supreme Court overturned Roe and held that the protection or regulation of abortion is a decision for each state.

Alabama, Arkansas, Kentucky, Missouri, Oklahoma and South Dakota have already banned or made abortion illegal pursuant to trigger laws which went into effect as of the Supreme Court decision on June 24, 2022.  Also, a number of additional states are expected to soon have similar legislation in effect, either by virtue of expected legislative action or trigger laws with slightly delayed effective dates.  In response, a number of employers have announced that they will reimburse all or a portion of abortion-related travel expenses for employees in states where abortions are banned or otherwise not available.

Under Section 213(d) of the Internal Revenue Code, the definition of “medical care” includes transportation that is both “primarily for and essential to” the medical care sought by an individual. These types of travel benefits have historically been utilized in connection with certain specialized medical treatments, such as organ transplants.  However, Section 213(d) is not limited to particular types of procedures, and thus forms the framework for providing abortion-related travel benefits through existing medical plans.

Although Code Section 213(d) applies to both self-insured and insured medical plans, the substantive coverage provisions of insured medical plans will generally be governed by the state insurance code of the state in which the insurance policy is issued.  Coverage for abortion services or any related travel benefits may not be permitted under the insurance code of the state in which the policy is issued, or an insurer may not offer a travel benefit for such services even if permitted to do so.  Self-insured plans, by contrast, provide employers more flexibility in plan design, including control, consistent with existing federal requirements, over the types and levels of benefits covered under the plan. As noted above, existing plans may already cover travel-related benefits for certain types of medical procedures.

Employers with high-deductible health plans tied to health savings accounts (HSAs) will need to consider the impact of adding abortion-related travel benefits to such plans.  Travel-related benefits of any type would not appear to be eligible for first dollar coverage, and thus may be of minimal benefit to participants enrolled in high-deductible health plans.

Employers with fully insured medical plans that do not cover abortion-related travel benefits may be able to offer a medical travel reimbursement program through an integrated health reimbursement arrangement (HRA).  An integrated HRA is an employer-funded group health plan from which employees enrolled in the employer’s traditional group medical insurance plan are reimbursed for qualifying expenses not paid by the traditional plan.

Another potential option for employers with fully insured medical plans may be to offer a stipend entirely outside of any established group health plan. Such reimbursement programs may result in taxable compensation for employees who receive such reimbursements. Also, employers would need to be sensitive to privacy and confidentiality considerations of such a policy, which should generally be minimized if offered in accordance with the existing protections of HIPAA through a medical plan and under which claims are processed by an insurer or third-party administrator rather than by the employer itself.

Additionally, some state laws may attempt to criminalize or otherwise sanction so-called aiding and abetting actions related to the procurement of abortion services in another state.  This is an untested area of the law, and it is unclear whether any actions brought under such statutes would be legally viable.  In this regard, Justice Kavanaugh stated as follows in his concurring opinion in Dobbs:  “For example, may a State bar a resident of that State from traveling to another State to obtain an abortion? In my view, the answer is no based on the constitutional right to interstate travel.” (Kavanaugh Concurring Opinion, page 10.)  This is an area that will require continual monitoring by employers who offer abortion-related travel benefits.

Article By Thomas G. Hancuch, Philip L. Mowery, and Amal Rafiq of Vedder Price

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Vedder Price

Preparing Corporate Messaging in the Wake of Dobbs

The United States Supreme Court (“SCOTUS”), in Dobbs v. Jackson Women’s Health Organization, has held that there is no constitutional right to abortion, overruling Roe v. Wade and Casey v. Planned Parenthood.

Employers, who increasingly are finding themselves on the front lines of many societal issues, will need to decide quickly whether and how they might address the Dobbs decision, as public reaction has been and is likely to remain strong. Board members, employees, and shareholders may advocate for corporations to take a visible stand on the issue of abortion and reproductive rights. And employees may want to speak up themselves (possibly via employer social media accounts).

It is important to remember that company communication decisions and actions regarding the Dobbs ruling, as well as other political and social issues, can have practical and legal implications.

The first question is whether your company will comment on Dobbs. If you decide to comment, there are many factors to consider. Your message is an important starting point. Who is your intended audience? Will your employees consider it an opportunity to join in the conversation? What will you say? Even if your message is internal, keep in mind that it may not stay that way, given the nature of social media. And before you think, “I’ll just stay out of it,” remember that some will view silence or neutrality as a statement in and of itself. If you choose not to speak, are you prepared to deal with any potential reaction from customers, employees, or shareholders?

Internally, employees may have questions about health benefits or other terms and conditions of employment because of Dobbs. It will be important to arm all key stakeholders, including leadership, corporate communications, and human resources, with tools to consistently manage these communications and responses.

Whether it’s internal or external communications, expect feedback! How that feedback is handled is as important as the initial communication (or lack thereof).

Certain industries, like healthcare and insurance, may also feel compelled to make an affirmative statement if the Dobbs decision has a direct impact on services and/or products. In those cases, the need to consider all implications is even more pressing.

In thinking through these decisions, employers should also consider who may need to approve any messaging. The board of directors, senior executives, legal, and marketing and communications teams are among the key stakeholders who may need to be consulted. And don’t forget that your public-facing employees may bear the brunt of your response. Are they prepared?

Employers should also keep in mind various laws that may govern their reaction, including those they might otherwise not consider. For example, the National Labor Relations Act protects employees’ rights to collectively discuss terms and conditions of employment at work and off duty – and that applies to employers with and without a unionized workforce. The current Biden-appointed General Counsel of the National Labor Relations Board has taken an expanded view of topics that are connected to the workplace. Moreover, some states, including California and New York, have enacted off-duty conduct laws that prohibit employers from disciplining employees for lawful conduct outside of work, which may include political advocacy. There may also be anti-discrimination laws and potential civil and criminal liability associated with your statements, depending on their wording.

Reactions to the Dobbs decision may vary. Some reaction may be comparable to what we’ve seen with respect to other recent political and/or social justice movements, such as Black Lives Matter and #MeToo; others may react differently, or not at all. In these rapidly changing times, companies — particularly publicly traded and consumer-facing ones — need to be make informed decisions. Clear, consistent messaging is key to establishing confident and consistent responses to potential concerns by employees and other stakeholders.

Article By M. Carter DeLorme, Frank C. Morris, JR, Susan Gross Sholinsky, Jennifer Barna, and Erin E. Schaefer of Epstein Becker & Green, P.C.

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

©2022 Epstein Becker & Green, P.C. All rights reserved.

Bouncing Back with Justice Leah Ward Sears [PODCAST]

Former Georgia Supreme Court Chief Justice Leah Ward Sears had to overcome multiple systemic barriers including racism and misogyny, but a personal setback – divorce – is something that profoundly shaped her. In this episode of Bouncing Back, Justice Sears shares with Rebecca Glatzer how she came to terms with her divorce and to accept that she could not control—or fix—everything in her life.

With decades of experience as an attorney, a jurist and an elected official, Justice Leah Ward Sears, a Partner in the Litigation Section of Smith, Gambrell & Russell, LLP, brings a powerful combination of strategy, analytical thinking and tactical action that gives her clients a compelling edge in complex litigation, appeal, and arbitration and mediation.

Recognized as one of Georgia’s leading legal luminaries and role models, Ms. Sears broke numerous barriers in her swift rise to the highest court in Georgia. When she was elected to the Superior Court of Fulton County, she became the first woman to ever serve on that court. Later she was appointed, and then elected, to serve as a Justice on the Supreme Court of Georgia — again, the first woman as well as the youngest jurist ever on that court.

She rose to Presiding Justice and in 2005 her colleagues elevated her to Chief Justice of the Georgia Supreme Court, where she served until retiring from the bench in 2009. During her tenure at the Georgia Supreme Court, Ms. Sears spearheaded an effort to establish the Georgia Office of Dispute Resolution, which is a policy-making body under the auspices of the Georgia Supreme Court that oversees the development of court-connected alternative dispute resolution (ADR) programs in Georgia. She also chaired the Judicial Council of Georgia and was a member of the Board of Directors of the National Conference of Chief Justices.

Since returning to private practice, Ms. Sears has concentrated on prosecuting appeals in both the state and federal courts in many jurisdictions across the United States. This often means embedding with the trial team to develop and execute pretrial and trial strategy, build credible evidence, and begin positioning for an appeal while the trial is underway by preserving evidence and proactively looking for narrowly focused issues at trial that will help protect a hard-fought victory or overturn an unfavorable outcome.

Ms. Sears earned an advanced degree (LLM) in Appellate Judicial Studies from the University of Virginia Law School, and she completed a Juris Doctorate (JD) at Emory University School of Law. She also holds a Bachelor of Science degree from Cornell University.

©2022 Major, Lindsey & Africa, an Allegis Group Company. All rights reserved.
For more articles about legal leaders, visit the NLR Civil Rights type of law page.

Privacy Tip #309 – Women Poised to Fill Gap of Cybersecurity Talent

I have been advocating for gender equality in Cybersecurity for years [related podcast and post].

The statistics on the participation of women in the field of cybersecurity continue to be bleak, despite significant outreach efforts, including “Girls Who Code” and programs to encourage girls to explore STEM (Science, Technology, Engineering and Mathematics) subjects.

Women are just now rising to positions from which they can help other women break into the field, land high-paying jobs, and combat the dearth of talent in technology. Judy Dinn, the new Chief Information Officer of TD Bank NA, is doing just that. One of her priorities is to encourage women to pursue tech careers. She recently told the Wall Street Journal that she “really, really always wants to make sure that female representation—whether they’re in grade school, high school, universities—that that funnel is always full.”

The Wall Street Journal article states that a study by AnitaB.org found that “women made up about 29% of the U.S. tech workforce in 2020.”  It is well known that companies are fighting for tech and cybersecurity talent and that there are many more open positions than talent to fill them. The tech and cybersecurity fields are growing with unlimited possibilities.

This is where women should step in. With increased support, and prioritized recruiting efforts that encourage women to enter fields focused on technology, we can tap more talent and begin to fill the gap of cybersecurity talent in the U.S.

Article By Linn F. Freedman of Robinson & Cole LLP

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

Copyright © 2021 Robinson & Cole LLP. All rights reserved.

Striking for Black Lives While Striking a Balance Between Business Needs and Employee Concerns

Plans are underway in multiple cities across the country for employees to participate in a Strike for Black Lives on Monday, July 20. The initiative encompasses the efforts of Black Lives Matter, the Movement 4 Black Lives, and a union-organizing effort by the Service Employees International Union. Strike for Black Lives encourages employees to “rise up for Black Lives” by walking off their jobs to march; and for those who can’t march, to take an “8:46 Pledge” in recognition of the death of George Floyd. The 8:46 Pledge asks supporters to take 8 minutes and 46 seconds at noon on July 20 to either take a knee, walk off the job, or observe a moment of silence.

Challenged by the threats of COVID-19, economic uncertainty, and now striking employees, employers should be prepared. As a reminder, the National Labor Relations Act (NLRA), which governs both union and non-union workplaces, protects most private sector employees who engage in concerted, protected activities to object to working conditions or terms of employment. On the other hand, employees who miss work without a good reason or for one’s own personal grievances may be subject to companies’ regular policies. Regardless, it is prudent for employers to proceed with caution in taking action against employees who join the Strike for Black Lives. If you have questions or doubts, consult with counsel.

Meanwhile, the Strike for Black Lives and similar events present opportunities for businesses to bolster their commitments to diversity and inclusion beyond standard statements of support. A recent Harvard Business Review article outlines recommendations for employers standing against racism. Others suggest allowing time off on short notice for last-minute marches and demonstrations. Showing flexibility in the application of company policies reflects a willingness to identify with employees’ concerns and reinforces a business’s own support for racial justice.

Although the convergence of extraordinary events in 2020 presents challenges for employers, in the words of John Adams, “Every challenge is an opportunity in disguise.”

© 2020 BARNES & THORNBURG LLP

For more on Black Lives Matter, see the National Law Review Civil Rights law section.

Black Lives Matter, Racial Unrest and Corporate Culture – How Do Employers Respond?

As the daily news continues to show protests and calls for justice in response to the death of George Floyd and others at the hands of police officers, there is, unsurprisingly, a desire from employees to hear from their employers regarding the ongoing violence and racial unrest in our communities and across the country. Many employers recognized the gravity of the racial unrest by celebrating, for the first time, Juneteenth on June 19, 2020, a holiday celebrating the emancipation of slaves. But is that enough? How do employers respond?

As a practical matter, employers must be aware of the application of Constitutional free speech protections, employee rights under the National Labor Relations Act and state laws that may apply to expressive employee conduct, as detailed in our previous post.

Beyond that, employers can choose the level of their response and engagement, or choose to do nothing at all—there is no right or wrong answer or a “one size fits all” solution. The most common reaction from employers is to acknowledge the unrest and issue a statement of support. Many employers have also chosen to make a public announcement expressing solidarity and support of the Black Lives Matter movement.

Though these responses are important, they fail to accomplish the more ambitious goal of many employers, which is to articulate and implement a strategy for lasting and real change within their own workplace and beyond. This action requires substantial reflection, consideration, time and effort.

So, for employers looking to do more, where do they start?

  • Leadership: Good leaders serve as good models. Leaders can lead by example and provide a safe workplace where all employees feel respected and included. As it pertains to the current environment, leaders can be open about their own lack of knowledge and share their growth and experiences with their workforce.
  • Anti-Discrimination Policies: Employers can review their policies regarding equal employment opportunity and workplace discrimination. Though most employers articulate such policies as a matter of course, it is important to reinforce these policies and remind employees of what is expected of them and to reassure employees who may be feeling vulnerable at this time.
  • Diversity Initiatives: Employers can focus on building diversity within their ranks by ensuring that recruitment, hiring, retention and advancement are truly objective and based on merit. Employers can also consider implementing a version of the National Football League’s recently-revised “Rooney Rule,” wherein at least two non-white candidates must be considered for open head coaching positions, and one non-white candidate must be considered for coordinator, senior football operations or general manager positions. Forming a diversity committee or task force is another way to ensure that minority members of your workforce are being heard and understood by management.
  • Awareness: Employers can educate their employees about prejudice and racism in its various forms; this can consist of formal training or open forums in which employees can communicate with one another and, importantly, with their co-workers of color. Employers can also make educational materials available for employees.
  • Community Involvement: Employers can publicly support the movement in the form of donations or activism. Doing so can create a sense of pride among your workforce, and it can also help in attracting future hires that share the principles of your workplace.

© Copyright 2020 Squire Patton Boggs (US) LLP

ARTICLE BY Anne Marie Schloemer at Squire Patton Boggs (US) LLP.

For more on employer-employee conduct see the National Law Review Labor & Employment law section.

Riot-Related Damage and Income Losses are Covered under Most Business Owners’ Policies

Following the deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Tony McDade, and Rayshard Brooks, protests against systematic racism in general, and police brutality in particular, have swept the globe. These protests have largely been peaceful, but a small, fractious group of individuals has used the protests as cover to incite violence, damage property, and loot businesses. While it might be cold comfort to the affected business owners to hear that property damage is not the norm, most have insurance that protects their pecuniary interest.[1]

 First-party property insurance policies generally include riot and civil commotion as covered causes of loss, unless there is a specific exclusion in the policy. Although courts have acknowledged that defining a “riot” can be difficult because they can vary in size, courts have identified at least four elements:

  1. unlawful assembly of three or more people (or lawful assembly that due to its violence and tumult becomes unlawful);
  2. acts of violence;
  3. intent to mutually assist against lawful authority where “lawful authority” is not limited to official law enforcement, but extends to those whose rights are or may be injured and who seek to protect those rights; and
  4. some degree of public terror (i.e., any minor public disturbance does not rise to the level of “riot”).

Blackledge v. Omega Ins. Co., 740 So. 2d 295, 299 (Miss. 1999).

Civil commotion likewise is undefined in most property policies. As a starting point, the term necessarily means something other than “riot,” since each term in an insurance policy is presumed to have its own meaning. See, e.g., Portland Sch. Dist. No. 1J v. Great Am. Ins. Co., 241 Or. App. 161, 171 (2011). Thus, while “civil commotion” may be similar to a riot, courts have construed the term more broadly, finding that civil commotion entails “either a more serious disturbance or one that is a part of a broader series of disturbances.” Pan Am. World Airways, Inc. v. Aetna Cas. & Sur. Co., 368 F. Supp. 1098, 1138 (S.D.N.Y. 1973), aff’d, 505 F.2d 989 (2d Cir. 1974). In fact, most property policies contain no limitation on the breadth of commotion or the type of harm that it might pose to person or property.

In many policies, riot, civil commotion, vandalism, and malicious mischief are “specified causes of loss.” The practical effect of this designation is that numerous exclusions will contain exceptions for loss caused by these situations. For example, while damage to a business’s electronic data may be excluded, the exclusion may contain an exception for damage to electronic data resulting from specified causes of loss, such as riot or civil commotion. Similarly, even where the policy contains a pollution exclusion – purportedly excluding loss, damage, cost, or expense caused by or contributed to or made worse by the release of “pollutants,” which could include tear gas – that exclusion may not apply to loss or damage caused by riot, civil commotion, or vandalism.

If a policy covers riot or civil commotion, covered losses may include property damage to the building and its contents, and lost income while the building is under repair or subject to government orders affecting the business’s operations (e.g., curfews limiting hours of operation) where the order is the result of property damage elsewhere. Business insurance policies may also cover costs incurred in protecting insured property from future, imminent harm or continued damage. These costs might include hiring (or increasing) security personnel, boarding up windows and doors, securing inventory in place or moving inventory and operations off-site.

Prior to the riots in Minneapolis, Minnesota, the costliest U.S. civil disorder occurred after the acquittal of police officers involved with the arrest and beating of a black American, Rodney King, from April 29 through May 4, 1992, causing $775 million in insured losses.[2] More recently, there were approximately $24 million in insured losses following the death of Freddie Gray, a black American who died in police custody after suffering a spinal cord injury.[3] Insured losses are not yet available for the riots in Minneapolis, but the Property Claims Services (“PCS”) unit of Verisk Analytics designated the event as a catastrophe. On June 4, 2020, PCS included over 20 other states, making the civil unrest that started in Minnesota a multi-state catastrophic event.[4]

If your business has experienced or may experience a loss because of civil unrest or riots, you should begin keeping track of these losses – and costs incurred to avoid them – immediately. Save receipts and inventory damages. Contact your insurance company as soon as you experience a loss to report your claim and diligently log your interactions with your insurer and its representatives. If you feel your insurer wrongfully denied your claim or delayed payment, contact experienced insurance coverage counsel.

[1] The authors by no means intend to equate property damage and a lost life. Quite the opposite. One is recoverable (and insurable); the other is irreplaceable.

[2]  https://www.iii.org/fact-statistic/facts-statistics-civil-disorders (last viewed June 15, 2020).

[3] Id.

[4] Id. By June 4, 2020, at least 40 cities in 23 states had imposed curfews. National Guard were called in Washington, D.C. and at least 21 states.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.
For more on property insurance amid protests, see the National Law Review Insurance, Reinsurance and Surety law page.

Recognizing Juneteenth and Strengthening Company Culture: Tips for Employers

Several prominent companies across the nation recently announced that they would observe Juneteenth as a holiday. This new trend of observing Juneteenth comes in the wake of several weeks of protests across the world advocating for an end to racial injustice and police brutality. These protests have generated discourse across the country, including in workplaces, about systemic racism and what actions we all can take to address the issues. Although Juneteenth is not a new holiday, recognizing and observing the holiday is one of many proactive measures that employers can take to demonstrate their commitment to fostering diverse and inclusive workplaces and to promoting racial justice.

What Is Juneteenth?

Juneteenth is the oldest nationally celebrated commemoration of the end of legal slavery in the United States. Although the Emancipation Proclamation was issued on January 1, 1863, the news did not reach enslaved Black people in Galveston, Texas, until June 19, 1865, where it was met with shock and jubilation.

The newly-freed people in Galveston celebrated after the announcement, and the following year, freedmen and freedwomen organized the first of what became the annual celebration of “Jubilee Day” on June 19 in Texas. Over time, the annual celebration spread from the Black community in Texas to the rest of the United States. Juneteenth celebrations focus on education, history, self-improvement, culture, and pride.

Who Is Observing Juneteenth?

Many companies have announced they will make Juneteenth an annual corporate holiday. The decision to observe Juneteenth in the workplace comes as more employers voice their support for racial justice. Other companies have also announced donations to organizations promoting racial justice.

How Can Employers Observe the Holiday?

Give employees a paid day off.

Consider observing Juneteenth as a company holiday and giving employees a paid day off as the company would for other observed holidays. This can help remind employees that the employer believes that the history of all its employees matters and that it is taking an active stand to promote racial justice.

If closing to observe Juneteenth is not a viable option for a company, they may want to consider alternatives. For example, some companies plan to remain open and give full-time non-exempt workers the option of taking the day off with full pay or working the day with time-and-one-half pay.

Honor Juneteenth in the workplace.

Recognizing Juneteenth in the workplace can strengthen a company’s commitments to its mission, vision, and values to promote a diverse and inclusive workplace and to foster social and racial justice.

There are many ways that employers can commemorate Juneteeth in the workplace:

  • Invite guest speakers to the workplace to speak on current issues;
  • Sponsor relevant workplace activities (on-duty and off-duty); or
  • Engage in the same kinds of activities that the company engages in for other commemorations for people of color.

Participate in local Juneteenth events.

Many communities across the country host Juneteenth celebrations. These events include parades, rodeos, cookouts, live concerts, and community outdoor activities. Consider hosting a company-sponsored booth or contest in these community events.

Is Juneteenth an Observed Holiday?

Juneteenth is an observed holiday in 47 states and the District of Columbia, but it is not a mandated federal holiday. Texas was the first state to recognize Juneteenth as a state holiday in 1980. A more comprehensive history of Juneteenth can be found here.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

A Word About Business Interruption Claims From Vandalism, Riot and Civil Commotion

The death of George Floyd is a national tragedy that should never have happened.  The winds of change are in the air and we can only hope that peace, understanding, justice and fairness for all will prevail.  What happened to George Floyd and the cries to end racial injustice, however, have been overshadowed in the eyes of many by the vandalism, looting and rioting that followed.  That brings us to insurance.

There have been many articles discussing whether and how the business losses arising from the vandalism and looting will be covered under insurance policies.  Because these losses took place during the novel coronavirus pandemic, the insurance coverage issues have become more complex.  This is particularly true for business interruption claims.

There are three issues that I thought were worth highlighting.  The first concerns the confluence of the existing COVID-19 stay-home orders and the vandalism and looting.  The second is the necessary nexus between direct physical damage and civil orders under coverage for civil authority.  Finally, the effect of anti-concurrent cause clauses in property policies.

First, some of the business interruption claims now being brought by businesses that had to shut down because of the protests or because of the curfew orders have been complicated by overlapping civil authority stay-home orders because of the novel coronavirus.  Where a business was closed because of COVID-19 stay-home orders or was open only to provide curbside pickup or delivery services, how is its loss of income and extra expense calculated if the business had to close because of the civil unrest?  Analyzing this issue requires much more space than this blog post can provide.  It is a complicated issue that depends on exactly what coverage is provided and how loss of income is calculated under the relevant business interruption coverage grant.

Just as an example, under a common business income and extra expense coverage form, the amount of business income loss is determined based upon the net income of the business “before the direct physical loss or damage occurred,” the likely net income of the business “if no physical loss or damage has occurred . . . ” and “the operating expenses, including payroll expenses, necessary to resume operations with the same quality of service that existed just before the direct physical loss or damage.”  When applied to the recent vandalism and looting business interruption losses, the net income before the vandalism and looting may have been much less than in months or years past because of the COVID-19 stay-home orders.  If no vandalism and looting had occurred, the likely net income would have been the same as under the existing COVID-19 stay-home orders; that is to say, most likely diminished from prior periods.  Yet some are pushing for the COVID-19 effect not to be considered at all in the calculation of net income in the context of business interruption losses due to vandalism and looting.

Second, civil orders that prevented ingress and egress to and from businesses because of the threat of violence from possible protests likely will not be sufficient to trigger coverage under business interruption civil order provisions.  The common form requires a nexus between direct physical damage and the civil order.  For example, the action of civil authority must be “taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage. . . .”  If a local government shuts down a business district in advance of a protest and before there is any physical damage to property, that civil order should not trigger coverage under the business interruption coverage grant.  A civil order that shuts down a business district after vandalism because the area is dangerous likely would result in some coverage under the business interruption coverage grant depending on other policy factors.

Finally, some property policies limit coverage to covered causes of loss and preclude coverage if the loss was caused in part by a non-covered cause of loss.  For example,

We will not pay for loss or damage caused directly by any of the following. Such loss or damage is excluded regardless of any other cause of event that contributes concurrently or in any sequence to the loss.  These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

If an insurance policy excludes a cause like looting, but covers vandalism, even if the loss was caused in part by looting, the anti-concurrent causation clause would preclude coverage.  So too, if part of the loss claimed was caused by the novel coronavirus and the policy has a virus exclusion, that would preclude the loss even if part of it was caused by vandalism.

As always, it is most important to read the complete policy because not all insurance policies are the same.  Nevertheless, there is no doubt that business interruption losses arising from the recent civil unrest have been complicated by existing governmental orders covering the novel coronavirus.  It will take patience by all parties and careful analysis to work through these claims.

© Copyright 2020 Squire Patton Boggs (US) LLP

For more on business interruption claims, see the National Law Review Insurance, Reinsurance and Surety law section.

Supreme Court Rules Title VII Bars Discrimination on the Basis of Sexual Orientation and Gender Identity

Today, June 15, 2020, the Supreme Court of the United States issued a landmark decision in Bostock v. Clayton County, Georgia, holding that Title VII of the Civil Rights Act of 1964 (“Title VII”) protects lesbian, gay, bisexual, and transgender workers.  The Court held that employers who discriminate against employees based on sexual orientation or gender identity unlawfully intend to rely on sex in their decision-making. Justice Gorsuch, along with Chief Justice Roberts and the four liberal justices of the Court, wrote, in deciding the question of whether an employer can fire an individual for being homosexual or transgender: “the answer is clear.”  Specifically, “an employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.  Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”  Ultimately, “an employer who fires an individual merely for being gay or transgender defies the law.”

Bostock v. Clayton County, Georgia consisted of three individual employment cases, all of which involved an employer terminating the employment of a long-time employee shortly after the employee revealed the he or she was homosexual or transgender.  Gerald Bostock worked as a child welfare advocate for Clayton County, Georgia for over ten years and was fired shortly after participating in a gay recreational softball league.  The reason given for his termination was an allegation of misspent funds and “conduct unbecoming of a county employee;” however, Bostock argued that was pretense and the real motivation for his termination was his sexual orientation.  Both the District Court and the Eleventh Circuit held that Title VII did not include protection against discrimination towards sexual orientation.

In Altitude Express Inc. v. Zarda, Donald Zara worked as a skydiving instructor for Altitude Express in New York.  Zarda worked for the company for several years and his employment was terminated shortly after mentioning to his employer that he was gay.  While the District Court ruled in favor of the employer, the Second Circuit ruled that Title VII protects employees from discrimination based on sexual orientation.

Lastly, in R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission, Aimee Stephens, a funeral home employee in Garden City, Michigan, who originally presented herself as a male upon hiring, revealed to her employer during her sixth year of employment that she would be transitioning and working and living full-time as a woman.  Shortly thereafter, she was dismissed from her job due to her transition.  Initially, the District Court found for the funeral home on two bases: (1) Title VII did not protect transgender persons nor gender identity, and (2) the Religious Freedom Restoration Act permitted the funeral home to make employment decisions based on faith.  The Sixth Circuit reversed this decision, ruling that Title VII’s “discrimination by sex” does include transgender persons and also that the funeral home had failed to show how Title VII interfered with its owner’s religious expression.

Given the split among the circuit courts, the Supreme Court took up this trio of cases to render a clear determination as to whether sexual orientation and gender identity are protected categories under Title VII.  This case of first impression signifies a key development in the interpretation and meaning of discrimination on the basis of “sex” under Title VII.  The opinion resolved the issue of whether those who drafted Title VII could have intended protection of these classes, with Justice Gorsuch explaining: “Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s con­sequences that have become apparent over the years, in­cluding its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination sup­ply no reason to ignore the law’s demands. When the ex­press terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.”

Employers must ensure that their policies, including their equal employment opportunity, harassment, and discrimination policies, reflect this opinion and prohibit discrimination on the basis of sexual orientation and gender identity.  In addition to these policy matters, employers should take actions to prevent discrimination on the basis of sexual orientation or gender identity and communicate the development in the law to employees and key decision makers in the company.

The full opinion can be found here.

© 2020 Bracewell LLP

For more on the SCOTUS Title VII decision, see the National Law Review Civil Rights law section.