Tag: licensing

Sexual Harassment Training Becomes Mandatory for All Professionals Licensed by IDFPR

All professionals licensed by the Illinois Department of Financial and Professional Regulation (IDFPR) whose licenses come up for renewal after January 1, 2020 and who must satisfy continuing education requirements need to complete one hour of sexual harassment and prevention training under a law that Governor J.B. Pritzker recently signed.

Health care companies that employ registered nurses, pharmacists, doctors and other health care professionals licensed by IDFPR should start making plans to conduct sexual harassment training to help their employees avoid license renewal issues next year.

Most large and medium-sized corporations have conducted in-house harassment and discrimination training for years. More than 20 years ago, the U.S. Supreme Court ruled that companies may have an affirmative defense against lawsuits alleging that a supervisor sexually harassed a subordinate if the employer adopted and annually trained its employees on policies that:

  • define the different forms of sexual harassment,

  • detail to whom to report harassment complaints,

  • detail how the company will investigate such complaints, and

  • prohibit retaliation for good-faith reporting of such complaints

After those Supreme Court decisions, the Equal Employment Opportunity Commission adopted a similar standard for all forms of illegal discrimination.

The new Illinois law, an outgrowth of the #MeToo movement, governs only sexual harassment, not other forms of discrimination. But smart employers will protect their employees and themselves by combining sexual harassment training with training on other types of discrimination. That approach allows employees to obtain the needed continuing education credits under the new law while simultaneously ensuring that employees understand what constitutes harassment and discrimination, to whom employees can report complaints and how their employers will investigate such complaints.

The new state statute is short on details. It simply says that all professionals who have continuing education requirements and are renewing their licenses after January 1, 2020 need one hour of continuing education credits on sexual harassment. The statute authorizes IDFPR to provide detailed regulations on such training, which IDFPR has not yet done.

© 2019 Much Shelist, P.C.

For more states requiring sexual harassment training, see the National Law Review Labor & Employment law page.

A Dark Day for Franchising: Ninth Circuit Reinstates its Misguided Vazquez Decision, Undermining the Franchise Business Model

In the course of a politically-charged frenzy to eliminate the misclassification of employees as independent contractors, the franchise business model has been trampled without respect by both the courts and the legislature in California, disrupting commercial relationships that have been a vital driver of the state’s economy for more than fifty years.  Only five years ago, the California Supreme Court acknowledged the vital importance of franchising to the California economy in generating “trillions of dollars in total sales,” “billions of dollars” of payroll and the “millions of people” franchising employs.  Patterson v. Domino’s Pizza, LLC (2014) 60 Cal.4th 474, 489.

Taking into account the “ubiquitous, lucrative, and thriving” franchise business model and its “profound” effects on the economy, the Patterson court held that the usual tests for “determining the circumstances under which an employment or agency relationship exists” could not be applied to franchises.  Id. at 477, 489 and 503.  To avoid disruption of the franchise relationship and turning the model “on its head,” a different test that took into account the practical realities of franchising had to be applied to franchise relationships.  Id. at 498, 499 and 503.  The “imposition and enforcement of a uniform marketing and operational plan cannot automatically saddle the franchisor with responsibility.”  Id. at 478.  A franchisor is liable “only if it has retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee’s employees.”  Id. at 497-98.  The special rule for franchising has been commonly referred to as the “Patterson gloss.”

On September 25, 2019, a panel of the Ninth Circuit Court reinstated an opinion it had previously published on May 2, 2019, then withdrew on July 22, 2019, recklessly undermining the delicate framework of the franchise business model in derogation of the California Supreme Court’s “Patterson gloss.”  Vazquez v. Jan-Pro, 923 F.3d 575 (9th Cir. May 2, 2019), opinion withdrawn, 2019 US App. Lexis 21687 (July 22, 2019), opinion reinstated, 2019 BL 357978 (9th Cir. September 24, 2019).

The “Patterson gloss” arose from the California Supreme Court’s subtle appreciation for the historical development of the franchise business model.  At the heart of all franchise relationships is a trademark license.  At common law, trademark licenses were seen as a representation to the public of the source of a product.  An attempt to license a trademark risked the forfeiture of any right to royalties and the abandonment of the licensed mark.  See Lea v. New Home Sewing Mach. Co., 139 F. 732 (C.C.E.D.N.Y. 1905); Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358, 367 (2d Cir. 1959).

Although the Trademark Act of 1905 did not allow for the licensing of trademarks, the Trademark Act of 1946, the Lanham Act, 15 U.S.C. § 1051, did allow a trademark to be licensed, but only where the licensee was “controlled by the registrant. . . in respect to the nature and quality of the goods or services in connection with which the mark is used.”  15 U.S.C. § 1127.   After the passage of the Lanham Act, a trademark could be licensed, as long as “the plaintiff sufficiently policed and inspected its licensees’ operations to guarantee the quality of the products they sold under its trademarks to the public.”  Dawn Donut, at 367.  After the Lanham Act had legitimized trademark licensing, the franchise model began to emerge in the 1950s, as the Patterson court noted (at 489), leading to the explosive growth of franchising over the last seven decades.

“Franchising is a heavily regulated form of business in California.”  Cislaw v. Southland Corporation (1992) 4 Cal.App.4th 1284, 1288.  Franchisors must provide prospective franchisees with detailed pre-sale disclosure documents under the California Franchise Investment Law, Corporations Code § 31000 et seq. and the FTC Rule, 39 Fed. Reg. 30360 (1974).  There are criminal, civil and administrative consequences for failure to comply.  Franchisees’ rights are protected by the California Franchise Relations Act, Business & Professions Code § 20000, et seq., which includes recently enhanced penalties for non-compliance.

Over the years, California courts have acknowledged the fundamental obligation of franchisors to impose controls over their licensees and have uniformly held that such controls do not create an employment or agency relationship.  See, e.g., Cislaw, 4 Cal.App.4th at 1295 (the owner of a brand may impose restrictions on a licensee “without incurring the responsibilities or acquiring the immunities of a master, with respect to the person controlled.”); Kaplan v. Coldwell Banker (1997) 59 Cal.App.4th 746, (“If the law were otherwise, every franchisee who independently owned and operated a franchise would be the true agent or employee of the franchisor.”).  This doctrine came to be known as the “Patterson gloss” and is the glue that holds the franchise business model together—allowing the franchisor to exert the controls necessary to license a trademark without incurring the responsibilities of an employer.

In its September 25, 2019 decision in Vazquez, the Ninth Circuit once again discarded the Patterson gloss like an extra part found in the bottom of an Ikea box after the hasty assembly of an end table.  According to the Vazquez court, Patterson had no relevance because it was just a vicarious liability decision, not an employment decision.  But Patterson was an employment case.

Patterson was a Fair Employment and Housing claim brought by a teenage girl after her supervisor had repeatedly groped her breasts and buttocks.  Patterson, at 479.  It is hard to understand why the Vazquez court considered the wage order claims before it to be more significant than Taylor Patterson’s right to pursue legal claims for sexual harassment.

Even more disturbingly, the Vazquez court disregarded the “Patterson gloss” because Dynamex [Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903] had favorably cited two Massachusetts decisions that applied the ABC test in the franchise context.  Id. at 39.  The Massachusetts cases were cited in Dynamex only as examples of cases where it had been more efficient to address “the latter two parts of the [ABC] standard” on a dispositive motion, rather than all three prongs.  Dynamex, 4 Cal.5th at 48.  The court never mentions franchising or the inconsequential fact that the parties in cited cases were franchises.  The Dynamex court could not be fairly understood to have abandoned its stalwart embrace of the franchise business model in its 2014 Patterson decision, without ever bothering to mention the case or to make any reference to franchising.  Yet the Vazquez court concluded that a passing citation to cases that happened to involve franchise companies in the Dynamex opinion—to make a procedural point that was unrelated to franchising in any way—was an occult signal from the California Supreme Court that the “Patterson gloss” had been abandoned by implication five years after its creation.

Nor was it valid for the Vazquez court to confine the “Patterson gloss” to vicarious liability cases.  As Witkin points out, California law on vicarious liability and employment developed together, so that most “of the rules relating to duties, authority, liability, etc. are applicable to employees as well as other agents.”  Witkin, Summary of California Law (10th ed., Agency & Employment, § 4).  The core obligation to control a trademark licensee—hard-wired by the Lanham Act into every franchise relationship—must be respected in both vicarious liability and employment cases if the franchise business model is to be preserved.

The Vazquez court had it right when it withdrew and de-published its original decision on July 22, 2019.  When the court certified the retroactivity issue to the California Supreme Court that day, it could have also certified the franchise issue back to the court that created the Patterson gloss, but it did not do so.  Franchisors are now left to wonder how they are to maintain existing long-term commercial relationships and to continue to sell franchises after the Vazquez opinion has taken from them the fundamental right to license trademarks without incurring the unintended liabilities of employers.

© 2019 Bryan Cave Leighton Paisner LLP

Read more on the topic on the National Law Review Franchising Law page.

Practicing Telemedicine Across State Borders: New Expedited Licenses Permit Physicians to Expand Practice

In a watershed moment for the expansion of telemedicine, the Interstate Medical Licensure Compact Commission is now processing applications to allow physicians to practice telemedicine across state lines with greater ease. Nineteen states have passed legislation to adopt the Interstate Medical Licensure Compact, which allows physicians to obtain a license to practice medicine in any Compact state through a simplified application process.  Under the new system, participating state medical boards retain their licensing and disciplinary authority, but agree to share information essential to licensing, creating a streamlined process.

The Federation of State Medical Boards’ President and CEO, Humayun Chaudhry, DO, MACP, called the Compact a “milestone” for medical regulation in the United States.  “The launch of the Compact will empower interested and eligible physicians to deliver high-quality care across state lines to reach more patients in rural and underserved communities. This is a major win for patient safety and an achievement that will lessen the burden being felt nationwide as a result of our country’s physician shortage.”

States currently participating in the Compact are Idaho, Montana, Wyoming, Nevada, Arizona, Utah, Colorado, South Dakota, Kansas, Minnesota, Iowa, Wisconsin, Illinois, Mississippi, Alabama, West Virginia, Pennsylvania, New Hampshire, and Nebraska.  Seven additional states have proposed legislation to adopt the Compact, including Washington, D.C.

Most states require a physician to obtain a license to practice medicine in each state where the patient is located at the time of the physician-patient encounter.  Prior to adoption of the Compact, obtaining licensure in a given state was an oppressive task, requiring the physician to complete lengthy applications, submit required documentation, pay fees, and pass examinations.  This proved to be a burdensome restriction for physicians practicing telemedicine, where patients may be located in any state at the time of the physician-patient encounter.  Licensing requirements were identified as a significant barrier to the expansion of telemedicine, prompting introduction of the Compact.

Physicians are eligible to apply for the Compact license if they possess a full and unrestricted license to practice medicine in a Compact state and have not been disciplined by any state medical board, among other requirements.  To apply, the physician must designate a Compact state as the “state of principal licensure” and select the other Compact states in which they would like to become licensed.  The state of principal licensure will verify the physician’s eligibility and provide credential information to the Interstate Commission.  The Interstate Commission then collects applicable fees and transmits the physician’s information to the additional states, where the licenses will then be granted.

Participation in the Compact creates another pathway for licensure, but does not otherwise change a state’s existing Medical Practice Act.  Physicians located in a state that has not adopted the Compact may still obtain licensure in other states through the ordinary licensure process.

This post was written by Marki Stewart at Dickinson Wright PLLC.

The Artist’s Legacy – Business and Legal Planning Issues

Sheppard Mullin Law Firm

Photographers face unique issues that must be carefully considered to ensure a continued market for the creative output and to preserve the artistic reputation. Prudently managed business affairs will minimize problems commonly encountered when closing down a studio and during the transition of business affairs from the photographer’s life to the photographer’s estate.

First, there is the issue of care for the physical works, the critical planning for the inventory, conservation and storage of the photographer’s works. Second is the issue of advantageously placing the photographer’s works; which works should be preserved, which donated, and when, where, how, including considering a sale or donation to a publicly-accessible archive as a permanent home for papers and other materials. This naturally leads to the third issue, prudent sales; how much and what part of the inventory should be released for sale each year and through what means? Is this the moment to re-examine the extant gallery relationship? These decisions require knowledge of the market, including a sense of timing, market conditions, and museum/collector interest.

Getting the house in order also includes appointing executors, attorneys, and accountants who can be trusted, who know the family or estate, who are familiar with and responsible toward the photographer’s work and the market, and who have both sensitivity and concern for the future of the photographer’s works and artistic reputation. Estate planning considerations for a photographer also include issues relevant for any individual: to provide for the surviving children, spouse and others according to the law and the photographer’s wishes so as to assure orderly transition and minimize the potential for probate litigation. For a photographer, though, preserving and enhancing a legacy also includes efficiently managing the estate to maintain continuity and safeguard the assets.

Photographers must likewise consider their intangible assets, which include copyrights, trademarks, licensing potential, and the like. It is important for photographers to register copyrights and keep track of any copyright renewal or termination rights, to be aware of current assignments and licenses of the intellectual property, and to maintain orderly files of subject releases, photographer agreements and other agreements affecting the works. Photographers should also consider licensing decisions to promote accessibility and generate revenue. It is crucial to weigh each transaction in terms of its potential for affecting the photographer’s stature in the art market. Indeed, one should consider the implications of each decision as it promotes and/or dilutes the overall value of the photographer’s oeuvre.

The photographer must identify and implement a comprehensive business and legal framework that can guide the present and govern the future in order to assure that legacy is preserved in accordance with the photographer’s wishes.

Above is the text of a handout on business and legal planning issues prepared by Christine Steiner. Christine Steiner and Lauren Liebes recently joined Weston Naef, Getty Photography Curator Emeritus, and ASA appraiser Jennifer Stoots for “What Will Become of Your Legacy”, a panel discussion at Los Angeles Center of Photography.  The panel addressed business and estate planning issues for photographers. In our next post, Lauren Liebes will address the myriad estate planning issues to consider.

ARTICLE BY

Christine Steiner
Lauren C. Liebes
OF
Sheppard, Mullin, Richter & Hampton LLP

The UK 14th Onshore Oil and Gas Licensing Round

Andrews Kurth

At the end of July 2014, the UK government published application criteria and terms for the 14th onshore oil and gas licensing round. This will be key to the aspirations of would-be shale gas developers in the UK. Onshore licences are available in areas including the Bowland Shale in the north of England (where the British Geological Society estimates a potential gas-in-place resource of 1,329 trillion cubic feet (tcf) alone) and the Midland Valley in Scotland.

Applications for new licences under the 14th round can be made until 2:00 p.m. 28 October 2014. This is the first round of onshore licensing in the UK for six years, and the resultant final licence awards are expected to be announced in the next 12 to 18 months. The level of interest expressed in these new licences will be a good barometer of how the industry regards the steps which the UK government has been taking to promote the growth of shale gas in the UK.

Additionally, new model clauses for onshore licences have been issued in the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014, which came into force on 17 July 2014. These model clauses are intended to promote unconventional oil and gas exploration and production and include several new provisions which are aimed at affording greater flexibility to licensees – these provisions relate to “drill or drop” elections, the term of the licence (with revised focus on extensions and retention areas) and splitting horizontal layers on surrenders.

The new model clauses recognise the different attributes of shale gas exploration and production programmes and that shale gas deposits typically have a much wider geographic footprint when compared to conventional oil and gas resources. Whilst greater flexibility is given to licensees under the new model clauses, there are also tighter controls over proposed project activities and timescales, with the intention of accelerating the outturns of planned exploration and production plans. 

The new model clauses are also intended to promote the findings of the recent Wood Review relating to maximising economic recovery.

There is also a new requirement for a detailed Environmental Awareness Statement (“EAS”) to be submitted with licence applications. The EAS is intended to demonstrate a licence applicant’s understanding of the environmental sensitivities relevant to the area proposed to be licensed. This requirement is intended to promote a successful interface with ecological sensitivities.

The UK government has taken a number of other steps to promote shale gas development in the UK, including introducing localised fiscal incentives to support the development of shale gas exploration pads. However, significant other issues still remain to be addressed by would-be shale gas developers, including obtaining planning permission to drill and hydraulically fracture test wells and managing often vociferous local public opposition to shale gas development. We have previously considered how UK onshore shale gas developments might be structured (see Notes From The Field – Issues 3 and 6).

Many challenges still lie ahead. Oil & Gas UK, the trade association that represents the interests of the UK’s offshore oil and gas industry, has given a cautious welcome to these new developments:

“There are a number of synergies between the offshore oil and gas industry and the onshore sector. Many of the techniques and some of the services required to recover land based unconventional shale gas already exist in the offshore oil and gas sector and should be readily transferable. There is scope for making these learnings and expertise from the offshore sector quickly transferable to operators developing onshore oil and gas resources. The new Oil and Gas Authority, which will govern both onshore and offshore industries, should ensure consistency of approach wherever applicable.”

ARTICLE BY

Peter Roberts
 
OF 
Andrews Kurth