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Archive for November, 2016

Georgia’s New Garnishment Code

Posted on: November 10th, 2016

 

By: A. Ali Sabzevari 

To collect money owed, judgment-creditors must typically file a garnishment action and serve the garnishee, such as an employer or financial institution, and the judgment-debtor.  The State of Georgia has a new garnishment code that took effect in May, 2016 that governs these garnishments.

Senate Bill 255 was passed by the Legislature to repeal and replace the existing garnishment code in Georgia.  This bill was drafted in response to a Georgia federal court finding that the existing garnishment code was unconstitutional in part because it did not provide adequate protection for claims of exempt funds.

The following are of some of the key changes in the new garnishment code:

  • There have been changes to garnishments filed by judgment creditors against financial institutions.  Under the new code, the applicable coverage period for a financial institution garnishment has been reduced from 30 days to just 5 days. Non-financial institution garnishments still have a 30 day coverage period.
  • The time-period for continuing wage garnishments is 180 days with the ability to refile.
  • The answer deadline for a financial institution has been reduced to 15 days after service.
  • The new code clarifies funds that are exempt and explains the process for recovery if taken improperly.
  • The pre-judgment garnishment code (O.C.G.A. § 18-4-40 through 18-4-48) has been repealed and prejudgment garnishment is no longer a remedy in Georgia.
  • When no claim has been filed and no traverse has been filed within 20 days after the garnishee files an answer (as opposed to 15 days under the old code), the judgment-creditor can apply for the funds deposited into the registry of the court.
  • Finally, the new code outlines what a judgment debtor should do if exempt money has been taken and also requires that a hearing be held within 10 days after an exemption claim is filed.

The new garnishment code contains many other changes that apply to judgment-creditors, garnishees, and judgment-debtors.  The attorneys at Freeman Mathis & Gary, LLP can help you navigate and streamline the process for garnishments and disputes, including those pertaining to exempt funds.

For more information regarding garnishments in Georgia, or if you have been served with or need to serve a garnishment, please contact A. Ali Sabzevari at [email protected] or 770.303.8633.

NetDiligence’s 2016 Cyber Claims Study Shows Data Breach Risks Concern Organizations Large and Small

Posted on: November 7th, 2016

By: Melissa A. Santalone

NetDiligence’s 2016 study of cyber insurance claims made during the year show that data breaches are not just problems for retail giants or Fortune 500 companies.  Huge breaches, including those with over 1 million records lost, occurred in all sizes of organizations, from “mega-revenue” companies with over $100 billion in revenue per year down to so-called “nano-revenue” organizations, which NetDiligence defines for purposes of its study as those businesses with less than $50 million per year in revenue.  Indeed, nano-revenue companies made up the largest subsection of organizations making cyber claims, with 49% of the claims submitted for the study, followed by “micro-revenue” companies ($50-300 million) with 25% and “small-revenue” organizations ($300 million – 2 billion) with 13%.  The study indicates this may be simply the result of the fact that there are more smaller companies overall.  However, this finding may also be related, the study hypothesizes, to less awareness of cyber security risks and fewer resources available for employee training and protective measures.

The study also analyzed causes of breaches in relation to their costliness, finding that malicious activity leads to higher average costs per claim.  Hackers, malware/viruses, and “rogue employees” caused 51% of data breaches in the claims submitted.  These claims, the study theorizes, were likely more costly due to the larger amounts of records affected.  While the average claim for a large organization costs ten times that of small organizations, some of the largest claims in this year’s data set came from nano-, micro-, and small-revenue companies.  Specifically, 21 claims in excess of $1 million came from these smaller organizations with 86% of those 21 claims having been caused by hackers and malware/viruses.  However, a not-insignificant portion of claims had insider involvement – 30% to be exact –  and most of claims with insider involvement resulted from inadvertent exposure of the data.

NetDiligence’s study indicates that small businesses are far from safe from data breaches and actually make the lion’s share of cyber claims.  While these claims are generally less costly on average, the risk of a breach of significant cost is real, and threats to cyber security come from both inside and outside organizations.  This is why we have consistently stressed the importance of all organizations making the investment to be proactive by conducting regular data security assessments and preparing for the possibility of a data breach by implementing an incident response plan.  Please contact one of the attorneys from our Cyber Liability, Data Security & Privacy team to discuss how to best prepare and protect your organization.

 

Higher Screening Standards Needed to Prevent Fentanyl Misappropriation in Hospitals

Posted on: November 4th, 2016

By: Robyn Flegal

A disturbing trend is on the rise. Hospital employees are misappropriating drugs intended for patients. The drug of choice is fentanyl, which has been used as a prescription painkiller since the 1960s, but is up to fifty times more powerful than heroin and up to 100 times more potent than morphine.[1] In some areas of the United States, deaths resulting from fentanyl overdoses are more prevalent than deaths resulting from heroin overdoses.[2]

Several newsworthy cases illustrate this trend toward fentanyl misappropriation by hospital staff. A nurse in Colorado is suspected of misappropriating fentanyl intended for patients after she was found with fentanyl doses exceeding the amounts nurses typically need for their patients.[3] A month before, in another Colorado hospital, a surgical technician was arrested for allegedly tampering with “a syringe containing fentanyl citrate by removing the syringe containing [fentanyl] and replacing it with a similar syringe containing ‘other substances.’”[4] Other hospital employees, including surgical technicians,[5] emergency medical technicians,[6] and pharmacy technicians[7] have been investigated for similar circumstances of fentanyl misappropriation.

Hospitals should be aware of this dangerous trend and should limit employee access to fentanyl. Hospitals should implement thorough screening procedures and background investigation before hiring employees who will have access to fentanyl. The surgical technician mentioned above had previously been fired after testing positive for a controlled substance, but he answered “no” on his job application as to whether he had ever been fired from employment as a surgical technician.[8] It is important to be aware, however, that even the most thorough background screening may not prevent fentanyl misappropriation in every instance. One of the pharmacy technicians under investigation for replacing fentanyl with saline solution passed a criminal background check and his reference check did not raise any red flags.[9]

[1] Katharine Q. Seelye, Heroin Epidemic is Yielding to a Deadlier Cousin: Fentanyl, N.Y. Times, March 25, 2016, http://www.nytimes.com/2016/03/26/us/heroin-fentanyl.html?_r=0.

[2] Id.

[3] Noelle Phillips, Nurse Accused of Stealing Fentanyl from Summit County Hospital, Denver Post, March 19, 2016, http://www.denverpost.com/2016/03/19/nurse-accused-of-stealing-fentanyl-from-summit-county-hospital/.

[4] Elizabeth Hernandez, Feds Arrest Swedish Medical Surgical Tech Accused of Stealing Drugs, Denver Post, February 16, 2016, http://www.denverpost.com/2016/02/16/feds-arrest-swedish-medical-surgical-tech-accused-of-stealing-drugs/.

[5] Lane Lyon, Former Rose Hospital Employee Admits to Needle Swapping, July 3, 2009,  http://www.thedenverchannel.com/news/former-rose-hospital-employee-admits-to-needle-swapping.

[6] U.S. Attorney’s Office, Raymond Man Sentenced for Diverting Fentanyl at Exeter Hospital, August 29, 2014,  https://www.fbi.gov/contact-us/field-offices/boston/news/press-releases/raymond-man-sentenced-for-diverting-fentanyl-at-exeter-hospital.

[7] KSN-TV, Pharmacy Tech Swapped Fentanyl for Saline Solution, Hospital Says, October 27, 2016,  http://ksn.com/2016/10/27/pharmacy-tech-swapped-fentanyl-for-saline-solution-hospital-says/

[8] Elizabeth Hernandez, Feds Arrest Swedish Medical Surgical Tech Accused of Stealing Drugs, Denver Post, February 16, 2016, http://www.denverpost.com/2016/02/16/feds-arrest-swedish-medical-surgical-tech-accused-of-stealing-drugs/.

[9] KSN-TV, Pharmacy Tech Swapped Fentanyl for Saline Solution, Hospital Says, October 27, 2016,  http://ksn.com/2016/10/27/pharmacy-tech-swapped-fentanyl-for-saline-solution-hospital-says/

 

 

 

Federal Mandate for Electronic Logging Devices Upheld in U.S. Court of Appeals’ Ruling

Posted on: November 3rd, 2016

By: Parker M. Green

The Federal Motor Carrier Safety Administration’s mandate requiring most commercial truck drivers to use electronic logging devices (ELD) survived its strongest legal challenge to date when the 7th Circuit Court of Appeals voted unanimously to uphold the regulation.  As a result, the transportation industry still faces a December 18, 2017 compliance deadline with the ELD mandate.  In order to comply, any driver who currently records their duty status with paper logs must install and adopt ELDs to record hours-of-service.

The 7th Circuit’s decision comes after the Owner Operator Independent Drivers Association (“OOIDA”) filed a petition seeking to have the FMCSA’s mandate for installation and use of ELDs overturned.  OOIDA presented five arguments for vacating the mandate: (1) ELDs will not record enough information automatically; (2) the ELD mandate fails to sufficiently protect drivers from harassment; (3) the benefits of the ELD mandate will not outweigh its costs; (4) the ELD mandate fails to protect the confidentiality of personal data collected by ELDs; and (5) the mandate violates the Fourth Amendment prohibition against unreasonable searches and seizures, i.e., a commercial driver’s right to privacy.  The 7th Circuit rejected OOIDA’s arguments and upheld the FMCSA’s mandate in its entirety.

As to the argument that the FMCSA’s new mandate violates commercial drivers’ rights under the Fourth Amendment, the 7th Circuit specifically held the commercial trucking industry is a “pervasively regulated industry,” and the ELD mandate (1) was informed by a substantial government interest, (2) warrantless inspections were necessary to further the regulatory scheme of the proposed regulations, and (3) the inspection program permitted under the ELD mandate provided a constitutionally adequate substitute for a warrant.  See, New York v. Burger, 482 U.S. 692, 702-03 (1987).

As such, the 7th Circuit determined the ELD mandate is not “arbitrary or capricious, nor does it violate the Fourth Amendment,” and upheld the FMCSA’s proposed regulations.  OOIDA still has the option to appeal the 7th Circuit’s ruling to the United States Supreme Court.  However, in light of the 7th Circuit’s opinion (click here), the FMCSA’s mandate for ELDs appears as if it is here to stay.  That means nearly all transportation providers have until December 18, 2017 to begin using qualified ELDs to record their compliance with the FMCSA’s hours-of-service regulations.  As the compliance deadline draws closer, transportation providers and insurers must also prepare for the liability and evidentiary implications of ELDs proliferating through the industry.

Several members of Freeman Mathis & Gary, LLP’s transportation law practice group published an article in the Georgia Defense Lawyers Association’s 2016 Law Journal introducing many of the potential legal implications to the defense of personal injury claims. The law journal article is available at the following address:  2016 GDLA Law Journal. On November 10, 2016, this author will also participate in a panel discussion on the ELD mandate during the Georgia Motor Trucking Association’s annual Fleet Expo.  For additional information on the panel discussion, please refer to the GMTA’s announcement on the Fleet Expo.

Is Your Corporate Culture a Religion?

Posted on: November 1st, 2016

By: Michael M. Hill

Trouble with low morale in the workplace? Conflicts among employees?  Perhaps you are considering addressing the problems by hiring an outside consultant to tweak the company’s culture?  If so, you may want to tread cautiously.  A company in Long Island did just that and a court upheld a religious discrimination suit.

In EEOC v. United Health Programs of America, Inc., a wholesaler of discount medical plans, Cost Containment Group, Inc. (“CCG”), found itself in a difficult financial period and determined that its corporate culture was deteriorating.  In an attempt to resolve this, the CEO invited his aunt, a woman named Denali Jordon, to help turn the company’s fortunes around.  Jordan is the creator of a program called “Onionhead,” which she initially developed as a tool to help children “identify, understand, and communicate emotions.”  It involved cards, pins, dictionaries, workshop materials, magnets, journals, a “Declaration of Virtues of Empowerment,” and (last but not least) a cartoon anthropomorphic onion.  The company described Onionhead as a “multi-purpose conflict resolution tool.”

            Perhaps understandably, many employees were not too keen on taking advice from a cartoon onion.  Jordan became a paid employee of the company, started hosting Onionhead workshops for employees at the office, and implemented several unconventional practices with somewhat religious overtones.  For instance, employees claim they were told to burn candles and incense to “cleanse the workplace” and not to use overhead lights “in order to prevent demons from entering the workplace through the lights.”  Jordan also led the employees in chanting and prayer sessions and often sent employees emails that discussed subjects such as faith, souls, angels, demons, God, Satan, the “road to Heaven,” the “Universal Plan,” and the “Divine Plan.”

            This Onionhead program persisted for several years at the company, during the course of which a number of employees were terminated.  However, many terminated employees filed charges of discrimination with the Equal Employment Opportunity Commission, alleging that Onionhead actually was a religion and that they were discriminated against either (1) for rejecting the Onionhead religious teachings, or (2) because of their own non-Onionhead religious beliefs.  They also alleged that other employees who adhered to Onionhead beliefs or participated in Onionhead activities were treated more favorably, such as receiving progressive discipline instead of termination.  The EEOC filed suit and moved for partial summary judgment on the issue of whether Onionhead constitutes a “religion” under federal law.  The federal district court held that Onionhead is a religion as a matter of law.

            What is interesting about this case, however, is not the fact that a court was willing to find a strange belief system to constitute a religion.  That alone is not new, as there are a few cases where an individual had unusual beliefs and contended he suffered discrimination as a result (see, e.g., the case of the Church of the Flying Spaghetti Monster).  Rather, what is unusual is that the adherents to Onionhead are the ones contending it is not a religion.  The company said it was just a “conflict resolution tool,” and Jordan, who created the Onionhead system, submitted an affidavit to the court attesting that it was not a religion.  But the court held that the company was practicing religion, even if the company itself did not think that was what it was doing.

            An important takeaway from the Onionhead case is that employers may want to exercise caution in how they present their corporate culture or their policies and practices.  In determining whether a set of beliefs counts as “religious,” courts may use an expansive definition of “religion” and inquire not just into what the believer himself believes, but also into what other people think about the beliefs.  It is a good idea for employers to review their practices and company materials, with counsel, to see if they may be construed by others as endorsing or implicating religious issues.