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FMG Law Blog Line

A Millennial Gig

Posted on: February 21st, 2018

By: David M. Daniels

With Contribution By: Jason C. Dineros

The Obama Administration’s federal enforcement relaxations for marijuana use in 2013, brought with it the development of a viable market industry from what was previously looked upon as taboo—akin to “that stoner stage you went through in high school, but grew out of.” As start-ups were popping up wanting to be frontrunners in an industry that had as much anticipation as whiskey distilleries in the years that followed prohibition, so did the need for legal consultation and representation.  No longer was the idea of marijuana dispensaries becoming as common as liquor stores a far too funny dream or overly paranoid nightmare—depending on the effect—concepts including edible bakeries, “weed lounges,” and cannabis-friendly restaurants and pop-ups also materialized.

A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.

The trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. Findings from Adobe revealed that as many as one-third of the 1,000 U.S. office workers they polled had a second job and more than half (56%) predicted we would all have multiple jobs in the future. The annual report from Upwork and freelancers Union found that more people than ever are choosing to freelance, up to 55 million this year, or 35% of the total U.S. workforce. As many as 81% of traditional workers they surveyed said they would “be willing to do additional work outside of [their] primary job if it was available and enabled [them] to make more money.

There are a number of forces behind the rise in short-term jobs. For one thing, in this digital age, the workforce is increasingly mobile and work can increasingly be done from anywhere, so that job and location are decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than that available in any given area.

Digitization has also contributed directly to a decrease in jobs as software replaces some types of work and means that others take much less time. Other influences include financial pressures on businesses leading to further staff reductions and the entrance of the millennial generation into the workforce. The current reality is that people tend to change jobs several times throughout their working lives; the gig economy can be seen as an evolution of that trend.

In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff. From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. Ideally, the model is powered by independent workers selecting jobs that they’re interested in, rather than one in which people are forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land.

The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy.

For further information or for further inquiries involving labor and employment law, commercial liability, or hospitality law, you may contact David M. Daniels, the Co-Chair of the Commercial and Complex Litigation Practice Section of Freeman Mathis & Gary, LLP, at [email protected].

 

Governor Wolf Proposes New Overtime Rules for Pennsylvania

Posted on: February 20th, 2018

By: Christopher M. Curci

Employers may recall the Obama administration’s efforts in 2016 to increase the overtime rule salary exemption from $23,600 annually to $47,476 annually.  By way of background, employers are required to pay overtime to employees who work over 40 hours in a given workweek.  However, many “white collar” employees are exempt from the overtime rules if their salary is above the $23,600 annual threshold.

The Obama administration’s proposed changes in 2016 caused quite a hubbub, finding strong support from pro-employee groups and strong opposition from pro-business groups.  Ultimately, the proposed changes were struck down by a federal court and the Presidential administration turned over to President Trump, largely mooting the issue.

However, Pennsylvania employers should be aware that Governor Wolf recently announced a similar change to Pennsylvania’s wage and hour laws as part of his “Jobs That Pay” initiative.  Governor Wolf’s proposal calls for increasing the salary exemption to $31,720 annually in 2020, $39,832 annually in 2021, and $47,892 annually in 2022.  Thereafter, the salary threshold will continue to increase every three years.

The Governor’s office estimates the proposed changes will increase the wages of 460,000 workers in Pennsylvania.  While the proposed changes have not yet been passed and would not take place for some time, employers should always be aware of the potential for significant change in wage and hour laws.  It is important that employers plan well in advance for such significant change to manage their own business finances and avoid costly wage and hour violations.

Christopher M. Curci, Esq., is a Pennsylvania and New Jersey Labor and Employment Attorney and member of Freeman Mathis & Gary’s Labor and Employment Law National Practice Section.  He represents employers in litigation and advises clients on all aspects of employment law.  If you need help with this or any other employment issue, he can be reached at [email protected].

Federal Jurisdictional Update

Posted on: February 19th, 2018

By: Owen T. Rooney

Title 28 of the United States Code Section 1367(d) allows for federal supplemental jurisdiction over state law claims. This statute, as now construed by the US Supreme Court in Artis v. District of Columbia, holds that the statutes of limitations on any state law claims stops while the claim is in federal court, such that the act of filing in federal court acts as a “stop clock” on any limitation period applied to a state law claim. This means that, in the event the district court enters judgment on federal claims and then dismisses state law claims, i.e., declines to retain jurisdiction over them, plaintiffs will have all of the remaining time on their state claims when the federal action was filed  plus 30 days.

Notably, this decision overrules the district court and the DC Circuit Court of Appeals decisions against Artis, as well as the California Supreme Court’s 2014 decision in City of Los Angeles v. County of Kern.

If you have any questions or would like more information, please contact Owen Rooney at [email protected].

Need a Lyft? Georgia Court of Appeals Decision Raises Coverage Questions for Ridesharing Services and Their Drivers

Posted on: February 19th, 2018

By: Connor M. Bateman

Most personal automobile insurance policies exclude coverage for damages that result from the ownership or operation of a vehicle used as a “public or livery conveyance.” Although typically undefined in the policy, this phrase has generally been understood to encompass vehicles that are “used indiscriminately in conveying the public, rather than being limited to certain persons and particular occasions or governed by special terms.”

The Georgia Court of Appeals recently weighed in on the scope of this exclusion in Haulers Insurance Co. v. Davenport.  In Davenport, the plaintiff sustained injuries in a car accident, sued the other driver, and served his uninsured motorist carrier (Haulers) with a copy of the complaint. At the time of the collision, the plaintiff was giving a ride to a female friend who would occasionally pay the plaintiff to drive her into town. There was no evidence, however, that the plaintiff ever offered paid rides to the general public. The Court of Appeals rejected Haulers’ argument that the policy’s public or livery exclusion barred coverage, reasoning that the exclusion was inapplicable absent evidence that the plaintiff “used his vehicle indiscriminately to transport members of the general public for hire, or regularly rented out his vehicle for hire.” The court recognized, however, that the exclusion would apply in cases where the driver “presents his services indiscriminately to the general public for hire.”

In light of the rising popularity of Transportation Network Companies (“TNCs”) such as Lyft and Uber, the coverage issues presented by this oft-forgotten exclusion should be carefully reexamined. TNC drivers, who use their personal vehicles to transport passengers, will often have no coverage under their personal policies due to the public or livery conveyance exclusion. This exclusion clearly applies to drivers actively transporting passengers and may even be triggered when the driver is simply using the ridesharing application to “troll” for potential customers. While some of these gaps have been addressed by commercial insurance policies provided by the TNCs, drivers may still be left without coverage in certain situations. For instance, although TNCs typically provide liability coverage for a driver who has the app turned on and is waiting to accept a ride, the TNC policies will not likely cover damages caused by someone or something else during that initial period. To account for this, the TNCs suggest that such damages may be covered by the at-fault driver’s policy or the TNC driver’s personal policy. However, the public or livery conveyance exclusion often extends to uninsured motorist, collision, and comprehensive coverage. And because courts have held that the public or livery conveyance exclusion applies when drivers “present their services” to the general public, the exclusion is arguably triggered even when the TNC driver is merely waiting for the application to connect to a customer.

Although the reach of this exclusion has yet to be fully examined in the context of ride-sharing services, these and other coverage issues will likely continue to arise. For additional information, please contact Connor Bateman at [email protected].

Latest Developments In DACA

Posted on: February 19th, 2018

By: Kenneth S. Levine

On 2/15/2018 four (4) separate legislative bills that sought to address the March 5th termination of the DACA program, border security, family-based immigration and the Diversity Lottery were put up for a vote in the U.S. Senate.  None of the bills garnered the necessary 60 votes to overcome a filibuster threshold and move the legislation to the House of Representatives.  At this point it seems doubtful that any piece of legislation will pass Congress that addresses DACA recipients, a border wall, the elimination of family-based categories and the Diversity visa lottery.

As to the March 5th date on which the DACA program was set to terminate, within the last several weeks two Federal Judges in the U.S. District Court in California and New York issued nationwide injunctions that, for now, keeps the DACA program intact beyond the March 5th deadline.  While the injunctions mean that the U.S. Department of Homeland Security must continue processing DACA renewal applications, the Judges are not requiring the Department to accept DACA applications from first time Applicants.

The latest major development on this issue is that the U.S. Supreme Court met on 2/16/18 to determine whether to accept a request from the U.S. Justice Department to take up the injunction cases. We expect their decision within the next few days.  An affirmative decision means that the Court would essentially leapfrog the relevant U.S. Court of Appeals in determining whether the injunctions are legally valid.  If the Supreme Court declines to accept immediate jurisdiction of the Justice Department’s appeals, then it will likely take 9-12 months for the 2nd and 9th U.S. Circuit Court of Appeals to render a decision.  Whatever the result, constitutional law legal experts widely anticipate that the U.S. Supreme Court will ultimately decide this issue.

The Immigration Attorneys of Freeman Mathis & Gary, LLP strongly advise all current DACA recipients to consider filing renewal applications immediately.  Although we do expect the DACA program to ultimately be terminated, those with pending renewal applications will likely be in a strong legal position to have their cases adjudicated.

For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws you may contact Kenneth S. Levine of the law firm of Freeman, Mathis & Gary, LLP at (770-551-2700) or [email protected]