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FMG Law Blog Line

Archive for May, 2018

Independent Contractor vs Employee Status in the Gig Economy

Posted on: May 31st, 2018

By: Daniel Walsh

As recently noted by FMG’s Connor Bateman, Courts across the country are now reexamining coverage issues stemming from auto insurance policies held by drivers working with Transportation Network Companies (“TNCs”) such as Lyft and Uber.

In Dynamex Operations W. v. Superior Court, 2018 Cal. LEXIS 3152, the California Supreme Court set forth a refined and more inclusive standard on the classification of employees vs. independent contractors in the “gig economy” commonly associated with Lyft and Uber but also extending to various delivery services.   An underappreciated side effect of this decision is the effect upon coverage issues that have been litigated for years throughout California courts.  With a robust gig economy in California, the Courts have seen a high number of general liability cases that have turned upon the Trial Court’s interpretation of employee vs independent contractor status.  This, in turn, has created a high volume of declaratory relief lawsuits centered upon liability coverage for the actions of a gig economy participant, as most insurance policies grant coverage to an employee but deny it to an independent contractor.  With the Court clarifying that distinction in Dynamex, California insurance coverage opinions regarding personal injury liability in the gig economy will now require a new focus and analysis.

If you have any questions or would like more information please contact Daniel Walsh at [email protected].

“Senior Safe Act” Encourages Reporting of Senior Investor Fraud

Posted on: May 25th, 2018

By: Ted Peters

On May 22, 2018, the Senior Safe Act, authored by U.S. Senators Susan Collins (R-ME) and Claire McCaskill (D-MO), passed in the House of Representatives as part of a bipartisan banking reform package after previously being passed by the Senate (67-31) in March.  The Act seeks to curb financial exploitation of senior investors by establishing a safe harbor in which advisors and their firms can report abuses without fear of liability for violation of privacy laws.

The Act extends legal immunity to banks, credit unions, investment advisors, broker-dealers, insurance companies and insurance agencies for reporting suspected exploitation or fraud, provided that they have established controls and procedures that will help employees and advisors identify and report suspected abuses, and provided further that they make the report in good faith and with reasonable care.

The Act has been broadly endorsed by the securities industry and has received bipartisan support.  Says FSI (Financial Services Institute) President and CEO, Dale Brown, “We applaud the House for taking a significant step toward the prevention of elder financial abuse by passing the Senior Safe Act… Financial advisors and financial firms are often the first to detect possible financial abuse, so it is critical that they have proper training to identify potential abuse as well as the ability to report it without fear of violating privacy laws.”

President Trump is expected to sign the Act into law as he tweeted that he would do so.

If you have questions or would like more information, please contact Ted Peters at [email protected].

Georgia’s Making a List and Long-Term Care Organizations Must Check It Twice

Posted on: May 24th, 2018

By: Will Collins

This month, Georgia’s Governor signed into effect a law implementing a comprehensive background check system in an effort to target and curb elder abuse, placing additional screening, notice, and retention requirements on long-term care organizations as well as presenting liability landmines and safe-harbors that these organizations should be cognizant of moving forward.

Effective October 1, 2019, the Georgia Long-term Care Background Check Program, requires that certain personnel are subject to both a “records check” and a “registry check,” allowing until January 1, 2021 for organizations to either submit a records check application or evidence showing satisfactory completion of a records check within the last twelve months for these personnel to the Department of Community Health (“DCH”).

The records check and registry check take substantial steps beyond Georgia’s current name-based single state criminal background check, expanding required screenings to include checks of the GCIS and FBI fingerprint databases, Georgia Nurse’s Aide Registry, Sexual Offender Registry, and the Federal List of Excluded Individuals and Entities. The Background Check Program goes further, expanding the registry check to any state where an individual resided for the previous two years when the individual has been a Georgia resident for less than two years.

Covered Organizations

The Background Check Program applies to Assisted Living Communities, Personal Care Homes, Home Health Organizations, Intermediate Care Homes, Hospice Providers, Nursing Homes, Skilled Nursing Facilities, and Adult Day Care Facilities.

Covered Personnel

The Background Check Program covers both owners active in operations as well as any applicant or current employee with direct access, which is defined as any position that will routinely:

  • Have contact with patients, residents, or clients including face to face interactions, hands-on physical assistance, and monitoring, reminding, or other stand-by activities;
  • Require the person to be alone with patient, resident, or client property; or
  • Have access to patient financial information, ranging from check books and debit cards to bank records and brokerage accounts

This includes housekeepers, maintenance personnel, dietitians, as well as any volunteer with similar access. Though the Background Check Program excludes certain types of contractors, it covers personnel that are contracted for a role “directly related to providing services to a patient, resident, or client of the facility.”

Record Retention and Notice Requirements

The Background Check Program requires that covered organizations maintain a personnel file for each employee, which shall be available for inspection and review by “appropriate enforcement agencies,” and at a minimum must include “evidence of each employee’s satisfactory determination, registry check, and licensure check.”

Organizations must also include a conspicuous notification on an application form that a state and national background check is required as a condition of employment and comply with the notification process established for denial of employment or adverse employment action based on unsatisfactory determination during the screening, including providing individuals the right to appeal the determination.

Liability and Safe Harbors

The good news for organizations covered by the Background Check Program is that when a denial of employment or an adverse employment action is based on a good faith attempt to comply with the screening requirements, the Program offers protection from damages or a claim, demand, cause of action, or proceeding of any nature.

Compliance with the Background Check Program similarly offers organizations both a “rebuttable presumption of due care” in negligent hiring or negligent retention claims or immunity from negligent hiring claims if certain conditions are met.

However, failure to comply with the Background Check Program’s requirements not only will subject an organization to civil monetary penalties, but may also act as evidence that the organization fell below the standard of care in negligence-based claims.

Take Away

We will closely monitor this issue as DCH develops regulations implementing the Background Check Program and can help you ensure your organization is prepared for these changes in Georgia law. For those with employees outside of Georgia, the attorneys in our Labor and Employment National Practice Section are well versed in state and industry specific screening requirements and regulations, so let us know if we can assist you assess compliance or litigate claims arising in this area.

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

High Court OKs Employers’ Use of Class Waivers

Posted on: May 23rd, 2018

By: Paul Derrick

Class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA), says the U.S. Supreme Court in a much-anticipated decision.

The Supreme Court’s long-awaited decision resolves a circuit split on whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA). By a 5-4 margin, the Court ruled that, under the FAA, arbitration agreements providing for individualized proceedings, rather than class or collective actions, are enforceable.

Arbitration agreements that require employees to pursue work-related claims in arbitration, rather than in court, have long been enforced pursuant to the FAA. Six years ago, however, the National Labor Relations Board decided that employers violate the NLRA when they require employees, as a condition of employment, to agree that they will resolve workplace disputes individually pursuant to an arbitration provision containing a class or collective action waiver.

The Supreme Court’s opinion makes it clear that the Board and various courts were wrong in believing that the NLRA trumps the FAA.  It noted that that nothing in a class or collective action waiver interferes with an employee’s right to participate in a union or engage in collective bargaining.

So, what does the Court’s ruling mean for employers right now?

First, they should look at their arbitration agreements and consider modifying them to include class action waivers if they are not already included.

Second, they should consider including an arbitration agreement and class waiver provision as part of their onboarding paperwork (but remember such clauses should not be included within the text of an employee handbook).

Finally, employers should expect that there is more litigation yet to come as employees and unions angle for ways to get around the Supreme Court’s decision.  Especially in states such California, there are other avenues by which employees can still maintain class and collective actions as a means of redressing their workplace disputes.  Despite these anticipated end-run attempts, employers should rest better knowing that the Supreme Court has explicitly approved the use of class action waivers in arbitration agreements.

If you have any questions or would like more information about this or any other labor law issue, please contact Paul Derrick at [email protected].

Shortening the Statutory Limitations Period in a Residential Lease

Posted on: May 23rd, 2018

By: Jake Daly

Every state has statutes or rules governing the time within which various types of claims must be filed.  In Georgia, the general rule is that a personal injury claim must be brought within 2 years of the date the injury occurred.  Is this an immutable rule, or can it be changed by contract?  Thanks to a recent decision by the Georgia Court of Appeals, we know that a statutory limitations period may be shortened by a provision in a residential lease and that a contractual limitations period of 1 year is valid and enforceable.

The plaintiff in Langley v. MP Spring Lake, LLC allegedly tripped and fell on a crumbling portion of a curb in the parking lot of the apartment complex where she lived.  The incident occurred on March 3, 2014, and the plaintiff filed the lawsuit on March 3, 2016.  Under Georgia’s statute of limitations for personal injuries, the lawsuit would have been timely filed.  However, the lease contained a provision that required any lawsuit against the owner and/or manager to be filed within 1 year of the occurrence giving rise to the claim.  Based on this contractual limitations provision, the trial court granted summary judgment for the defendant, which was represented by Sun Choy and Jake Daly of Freeman Mathis & Gary, LLP.

The Georgia Court of Appeals affirmed the trial court’s decision on May 1, 2018.  The plaintiff’s sole argument on appeal was that a contractual limitations provision should not apply to claims that do not arise out of the contract.  Because the plaintiff’s claim was based on Georgia’s premises liability statute, not the lease, she contended that her claim was subject to the statutory limitations period of two years.  The Court of Appeals disagreed, holding that the absence of a relationship between the lease and the claim was irrelevant because the contractual limitations provision in the lease applied by its own terms to “any legal action.”  There being no statute or public policy prohibiting the shortening of a statutory limitations provision in a contract, the Court of Appeals concluded that the contractual limitations provision in the lease was valid and enforceable and that, therefore, the plaintiff’s claim was time-barred.

We know from this decision that a contractual limitations provision of 1 year is valid and enforceable, but the Court of Appeals did not address the limit of how short such a provision can be.  However, we believe that a contractual limitations provision of 6 months could be valid and enforceable because that is the statutory deadline in Georgia for providing ante litem notice of a claim for money damages to a municipality.  Regardless of where the limit will be drawn by future cases, owners and managers of residential rental property should consider including in their leases a contractual limitations provision of no longer than 1 year.  For assistance with drafting such a provision that will withstand scrutiny by the courts, as well as other provisions that may help limit liability, please contact Jake Daly at [email protected] or (770) 818-1431.