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Archive for November, 2013

Proposed Affordable Care Act Fix Falls Flat

Posted on: November 26th, 2013

186372512By: Seth Kirby

In spite of President Obama’s assurances during his push to pass the Affordable Care Act (“ACA”) that individuals would be able to keep their existing health insurance, thousands of Americans have received notices that their plans have been terminated because they do not meet the requirements of the new law.  These individuals have now been forced to shop for new plans that provide the vast array of coverage that is mandated by the ACA.  In doing so, they have come to realize that the new plans, which must provide no copay wellness exams, coverage for pre-existing conditions, maternity care, and other benefits, are far more expensive than their prior plans.  To add insult to injury, many of these individuals are now discovering that this increased cost will not be offset by tax credits because their income exceeds the subsidy thresholds.  This perceived bait and switch, combined with the technological failures of the government’s on-line marketplace,  has led to widespread outrage over the implementation of the ACA.

The Obama administration has attempted to take several steps to salvage the public perception of the ACA.  The first step has been a noticeable attempt to rebrand the health care mandate by eliminating references to the ACA as “Obamacare.”  In his recent November 14, 2013 address on the health care mandate, he studiously avoided the term “Obamacare” opting instead to use “Affordable Care Act” throughout the presentation.  Somewhat surprisingly, this marketing tactic seems to work.  Recent opinion polls show that opposition to “Obamacare” is nearly 10% higher than to the “Affordable Care Act” even though they are one in the same.  Apparently, a rose by another name has less thorns.

On a more substantive level, during his November 14th address, President Obama stated that, subject to state approval, carriers would be allowed to continue to issue non-compliant policies for an additional year in order to allow more time for an orderly transition.  While this extension was presumably intended to address the outcry over the mass cancelation of non-compliant plans, it appears to be nothing more than a political sound bite that will not result in any real change.  Indeed, as of today, only 12 states have agreed to allow carriers to extend their non-compliant plans for a year, while several other states, including California and New York, have formally rejected the proposal.

Not only have two of the most populated states refused to accept the administration’s proposed Band-Aid, but most health insurance companies have refused to reinstate or continue the non-compliant plans.  The reason for the refusal is a simple matter of premium calculation.  The non-complaint plans were typically issued to healthy individuals that wanted coverage for catastrophic health care costs.  The plans they obtained did not include the frills required by the ACA, and they were restricted to a pool of low-risk insureds which allowed the associated premiums to be low.  To comply with the ACA’s mandate of coverage regardless of pre-existing conditions and provide extra benefits such as maternity care and no copay wellness exams, the carriers need the “good” risk insureds to join the pool of “bad” risk insureds in order to spread the risk and set premiums at an semi-acceptable level.  Allowing the “good” risk insureds to opt out for the first year of the ACA damages the pricing model and is unacceptable to most, if not all, carriers.  I suspect that the administration is well aware of these insurance pricing realities but chose to announce the extension of non-compliant plans for political cover.  Ultimately we will likely all discover that providing more coverage to more people costs more money.

Blow to Public Employers: Georgia Supreme Court Expands State Whistleblower Law

Posted on: November 26th, 2013

177651531By: Amanda Cash

Previously, Georgia’s whistleblower statute prohibited retaliation against public employees who complained or made disclosures about “fraud, waste, or abuse” in government operations or programs.  Based on this limited definition, public employers were able to defend against such retaliation claims if the complaint was about something other than fraud, waste, or abuse.

However, the Georgia Supreme Court’s recent opinion in Colon v. Fulton County changed all that.  The Supreme Court found that a 2005 amendment to whistleblower statute broadened the scope of its retaliation provisions.  The amended version prohibits retaliation against a public employee “for objecting to, or refusing to participate in, any activity, policy, or practice of the public employer that the public employee has reasonable cause to believe is in violation of or noncompliance with a law, rule, or regulation.”  It does not mention “fraud, waste, or abuse” about government programs or operations, so, the Supreme Court determined that the statute can no longer be limited by that definition.

This ruling has a few significant implications for public employers.  First, it broadens the scope of potential retaliation claims since they are no longer limited to a narrow class of complaints about fraud, abuse, or waste of public funds; instead, employees are protected based on complaints about alleged violations of any law, rule, or regulation, so long as their beliefs are reasonable.  This could make the scope of covered complaints almost limitless.  For instance, it could cover complaints about sexual harassment, discrimination, assault and battery, and any other alleged violations of the law.  Furthermore, because the term “rule” is not defined in the statute, a public employee’s complaint about a “rule” in an employee handbook or standard operating procedure manual might qualify as protected activity.

Second, this holding may give public employees a way to bring retaliation claims based on complaints about sexual harassment and discrimination under state law, as opposed to bringing them under Title VII or other federal discrimination laws.  This is significant for public employers because it gives plaintiff’s lawyers a way to bring retaliation claims in state court that cannot be removed to federal court by the public employer.  Because federal court is typically a more favorable venue for employers for a variety of reasons, such as the increased likelihood of obtaining summary judgment, the potential impact is significant.

At this time, it is not clear exactly how Georgia courts will flesh out the contours of the whistleblower statute after this ruling.  Future decisions may narrow the scope of complaints that are protected under the statute, such as limiting them to complaints about alleged violations of state law, as opposed to federal law.  For now, however, it seems likely this is an area where public employers will see renewed interest by plaintiff’s lawyers.  Thus, public employers should be aware of this expanded protection under the Georgia whistleblower statute when making employment decisions.

 

Georgia Supreme Court Analyzes Application Of Heightened Evidentiary Standard To Be Used In Emergency Room Cases

Posted on: November 20th, 2013

153701241By: Taryn Kadar

In Johnson v. Omondi, decided on November 14, 2013, the Georgia Supreme Court reversed the Court of Appeals’ decision which had previously affirmed the trial court’s decision granting summary judgment to the defendant ER doctor.  The Court explained that Georgia’s ER statute (OCGA 51-1-29.5(c)) requires a plaintiff to prove emergency room care was grossly negligent, and that evidentiary burden must be proven by clear and convincing evidence.  Gross negligence is defined as “the failure to exercise even a slight degree of care, or lack of the diligence that even careless men are accustomed to exercise.”

The Court then determined that the court of appeals erroneously applied this stringent burden when it affirmed the ER physician’s summary judgment.  In reversing the court of appeals, the Court relied on plaintiff’s experts which testified that the ER physician’s care and treatment was “ridiculous” and nothing he did ruled out the possibility of pulmonary embolism.  Because plaintiff’s expert testimony was legally required to be believed at the summary judgment stage, the Court found that plaintiff had properly shown that a jury could find that the ER physician failed to provide even slight care and therefore was grossly negligent.  Accordingly, summary judgment was reversed.

Notably, the concurring opinion took issue with the legal definition of “gross negligence” when used in medical malpractice cases.  The concurrence argued that whether slight care was or was not provided, is not the proper analysis in determining gross negligence.  Rather, the better analysis is to assess the degree in which the care deviated from the applicable standard of care.

This decision makes it seem that getting summary judgment in an ER malpractice case may be as difficult as it is in getting summary judgment in a non-ER medical malpractice case.  However, as the concurring opinion noted, given the stringent evidentiary standard, it would be surprising if this statute did not result in a large number of defense verdicts.

Here Is A Tip For Restaurants – You May Be Able To Include Non-Tipped Employees In Your Tip Pool

Posted on: November 20th, 2013

76729355By: Brad Adler

In April 2011, the United States Department of Labor issued new tip credit regulations.  Among other things, the DOL concluded that tips are the property of the employee and that an employer may never keep any part of an employee’s tips, even if the employer does not take a tip credit.  By such regulation, the DOL also determined that, even when an employer does not use a tip credit, the employer still may not include non-tipped employees in a tip pool.  In Oregon Restaurant and Lodging v. Hilda L. Solis, 2013 WL 2468298 (D. Or. 2013), various hospitality industry groups sued the U.S. Department of Labor to challenge the validity of these revised regulations.

In a June, 2013 opinion, a district court from the U.S. District of Oregon ruled that the DOL’s amended tip-pool regulations are invalid because they conflict with the clear intent of Congress in the FLSA.  Specifically, the Oregon District Court determined that the FLSA does not impose any restrictions on an employer’s use of tips when the employer is not taking a tip credit.  Rather, the FLSA only imposes limitations on the use of tips on those employers who take a tip credit.  While this is only a district court decision, considering a prior Ninth Circuit Court of Appeals opinion reaching a similar conclusion (Cumbie v. Woody Woo, Inc.), employers are more fully equipped to argue that they have wide discretion in handling tips if they do not take any type of tip credit.

Mooting A Plaintiff’s Right To Fees In FLSA Cases Is Not That Easy

Posted on: November 19th, 2013

152988178By: Marty Heller

The Eleventh Circuit recently ruled that an offer of a full and complete settlement to an FLSA plaintiff does not moot the plaintiff’s claim.  In Wolff v. Royal American Management, Inc., the Eleventh Circuit ruled that a plaintiff’s FLSA claim is mooted when the plaintiff is offered the “full relief requested” and a judgment.  Thus, it appears that an offer of judgment now will be required in order to moot an FLSA plaintiff’s claims.  The Wolff case had an unusual posture because the plaintiff and defendant settled the FLSA claims without the involvement of the plaintiff’s counsel.  The defendant then argued that the claim was moot and the plaintiff’s counsel was not entitled to their reasonable fees.  The Eleventh Circuit disagreed, ruling that an FLSA claim cannot be mooted without an accompanying offer of judgment.

The Wolff case also clarified that last year’s decision in Dione v. Floormasters Enters., Inc., 667 F.3d 1199 (11th Cir. 2012) is very limited.  Essentially, it appears that an FLSA settlement will cut off a plaintiff’s rights to their attorney’s fees only when the plaintiff concedes that their claim is moot and the case is dismissed by the court on that basis.

A bit of a side note, but this case involved a $3,600 settlement, and attorney’s fees of over $60,000.00.  This type of disparity between an FLSA recovery and the plaintiff’s attorney’s fees associated with litigating the case is becoming common.