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Archive for June, 2017

What’s in a Name?

Posted on: June 20th, 2017

By: Jeremy W. Rogers

Oftentimes in the law, a seemingly straightforward term or name for something turns out to be not so straightforward. Common meanings need to be defined or else creative attorneys may avoid mandates set forth by statute, for instance. One example may include successful arguments against the applicability of a particular statute to his or her client. Statutes and regulations are rife with definitions that would make a layperson wonder out loud, “Why?” or “Was that really necessary?”

When not included in a statute, however, it is up to the courts to decide what a particular term or name really means, even if it seems obvious. One such situation occurred earlier this year when the Florida Supreme Court decided the definition of the term “sexual intercourse.” This question arose in a case out of the Florida Keys where a man was charged with violating § 384.42, Fla. Stat. which makes it unlawful for a person who is aware they are HIV-positive to have sexual intercourse with any other person without first informing that person of the disease. The State alleged that Gary Debaun violated the law when he had sex with another man without first disclosing he had HIV.  Mr. Debaun went a step further, it seems, and produced a forged lab report saying he was HIV-negative, although that little nugget is not really relevant to the story.  Of course, § 384.42 does not define “sexual intercourse,” and, citing to a prior authority, Mr. Debaun’s attorney successfully argued that “sexual intercourse” was limited only to “penetration of the female sex organ by the male sex organ.”  How very romantic. Because Mr. Debaun and his partner were both male, they did not have “sexual intercourse” under that very narrow definition. The circuit court agreed and dismissed the charges, but the Third DCA reversed, asking the Florida Supreme Court to resolve the issue.

In opposition to Mr. Debaun’s arguments once the case got this far, it was argued that the intent of the statute was not to criminalize the sexual act, but, rather, to criminalize the act of knowingly exposing one’s sexual partners to the disease. This would seem rather clear, and one wonders why there is prior authority setting forth such a narrow definition as the circuit court followed. Nevertheless, after consulting with three separate dictionaries, the Court ruled that the applicable definition is clearly more expansive than simply penile-vaginal penetration. Further reasoning, the Court noted that a more expansive definition would further the purpose and intent of the law. Thus, the Court defined “sexual intercourse” under its plain and ordinary meaning (and, as one court put it, “obvious meaning”). The definition includes penile-vaginal intercourse, anal and oral sexual activity, and is not limited to only heterosexual relations.

Who knew? (sarcasm intended)

For any questions, please contact Jeremy Rogers at [email protected].

Labor and Employment Law Update

Posted on: June 14th, 2017

By: William H. Buechner, Jr.

Recent weeks continue to see a spate of significant decisions and regulatory developments. Below are some of the more notable developments.

Significant Court Decisions Affecting Employers

1. Supreme Court Holds That Pension Plans Established By Church-Affiliated Hospitals Are Exempt From ERISA

The Supreme Court has held that ERISA’s exemption for “church plans” includes benefit plans that are established by church-affiliated hospitals and healthcare facilities and managed by internal employee pension committees. Advocate Health Care Network v. Stapleton, — S.Ct. — 2017 WL 2407476 (June 5, 2017). The Court rejected the plaintiffs’ argument that the church exemption only applies to plans that were established by a church.

2. Sixth Circuit Holds That Class-Action Waivers In Employment-Related Arbitration Agreements Violate NLRA

In National Labor Relations Board v. Alternative Entertainment, Inc., — F.3d —, 2017 WL 2297620 (6th Cir. May 26, 2017), the Sixth Circuit held that employment-related arbitration agreements that include a class-action waiver violates Section 7 of the National Labor Relations Act. The Sixth Circuit concluded that the Federal Arbitration Act and the NLRA are compatible and do not conflict because the FAA’s “saving clause” does not make arbitration agreements more enforceable than other contracts. The Sixth Circuit reasoned that the NLRA prohibits class-action waiver provisions in arbitration agreements “on grounds that would apply to any contractual provision, and thus triggers the FAA’s saving clause.” Id. at *5. The Sixth Circuit panel’s decision also emphasized that the right to collective action in the NLRA is a substantive right rather than a procedural right. A vigorous dissent argued, among other points, that there was no NLRA “exception” in the FAA, or vice versa. The Sixth Circuit joins the Seventh Circuit and Ninth Circuit in holding that class-action waivers in employment-related arbitration agreements violate the NLRA. The Fifth Circuit and the Eighth Circuit have held that such provisions do not violate NLRA. On January 13, 2017, the Supreme Court granted certiorari to resolve this circuit split.

3. Second Circuit To Reconsider En Banc Whether Title VII Includes Discrimination On The Basis Of Sexual Orientation

The Second Circuit has granted a petition for re-hearing en banc to re-examine whether Title VII encompasses discrimination on the basis of sexual orientation. The Second Circuit also has invited the EEOC (which has taken the position that Title VII does encompass sexual orientation), to file a brief on this issue. An en banc decision by the Seventh Circuit recently held that Title VII encompasses sexual orientation. In March, an Eleventh Circuit panel held that Title VII does not encompass sexual orientation. A petition for rehearing en banc is still pending in that case.

4. Eleventh Circuit Rejects Joint Employer Claim

The Eleventh Circuit recently addressed a complex joint employer issue in Scott v. Sarasota Doctors Hospital, Inc., — Fed.Appx. —, 2017 Fed.Appx. 2471198 (11th Cir. June 8, 2017). In that case, the plaintiff doctor was a hospital-based primary care physician who was officially employed by EmCare, but who worked at Sarasota Doctors Hospital (“the Hospital”). EmCare and the Hospital shared responsibilities for hiring and overseeing the plaintiff’s work. Although an EmCare manager initially reviewed the plaintiff’s qualifications and recommended that she be interviewed, only the Hospital interviewed per for a position. EmCare was responsible for the plaintiff’s pay, benefits, tax withholdings and malpractice insurance, but the Hospital had the authority to order the plaintiff’s removal, and EmCare was contractually obligated to comply with the Hospital’s request. There was also evidence that the Hospital supervised her and controlled her activities. Nevertheless, the Eleventh Circuit held that there was sufficient evidence for a jury to conclude that the Hospital was not a joint employer of the plaintiff, and affirmed the district’s denial of the plaintiff’s motion for new trial.

Significant Administrative And Regulatory Action

1. Labor Secretary Signals That DOL Will Pursue Modification Of 2016 Overtime Rule 

Secretary of Labor Alexander Acosta testified before a House Subcommittee last week and signaled potential changes to the 2016 final rule increasing the threshold salary level for white-collar overtime exemptions from $23,600 to $47,476. Acosta testified that the DOL intends to file a Request for Information within the next few weeks to seek information in connection with the 2016 final rule and the salary level.  Acosta testified that the manner in which the salary level of $47,476 was determined “created a shock to the system.” Acosta also stated that it is a “problem” when the salary level is not updated “because life gets a lot more expensive.” During his confirmation hearing in March, Acosta stated that the increase to $47,476 was excessive and indicated that he was open to a more modest salary increase “somewhere around $33,000.”

Based on these comments, it appears that the DOL may be contemplating  issuing a notice of proposed rulemaking that may propose a more modest adjustment in the salary level and perhaps removal of the automatic salary adjustment provision contained in the 2016 final rule.

In the meantime, in the litigation challenging the 2016 final rule, the Department of Justice’s appeal to the Fifth Circuit (filed by the Obama administration) challenging a Texas district court’s preliminary injunction blocking enforcement of the rule is in a holding pattern. Since President Trump took office, the DOJ has been granted three extensions of time to file a reply brief in support of the appeal, with the latest extension giving the DOJ until June 30, 2017 to file a reply brief.

2. DOL Withdraws Controversial Guidance Statements Concerning Joint Employers And Independent Contractors

The DOL issued a press release last week announcing the withdrawal of two controversial guidance statements issued during the Obama administration. First, the DOL rescinded its guidance regarding joint employers under the FLSA and the Migrant and Seasonal Agricultural Protection Act. In the guidance, the DOL took the position that “[t]he concept of joint employment, like employment generally, should be defined expansively under the FLSA and MSPA.” Second, the DOL rescinded its guidance regarding the classification of independent contractors as employees under the FLSA. The guidance stated that “most workers are employees under the FLSA’s broad definitions.”

These two guidance statements have been removed from the DOL website. The press release stated that the DOL “will continue to fully and fairly enforce all laws within its jurisdiction.” During his confirmation hearing in March, Secretary Acosta expressed his view that the “direct and immediate” control standard (which is considered the traditional standard) should be utilized in determining when an entity is an employer. Secretary Acosta also expressed his preference for issuing opinion letters as opposed to the guidance statements. Accordingly, it is possible that the DOL will further clarify its views on both the joint employer and independent contractor issues in opinion letters.

3. DOL Proposes To Rescind “Persuader” Rule

In addition, the DOL published in the June 12, 2017 Federal Register its proposal to rescind regulations that would have required employers to file public reports with the DOL when they use consultants, including lawyers, to provide labor law advice for the purpose of persuading employees in connection with union organizing and collective bargaining. This “persuader” rule would have required consultants to provide details as to the services and advice provided and the amount received. The “persuader” rule was enjoined by a Texas district court in November 2016. The purported purposes of the proposed rescinding of the “persuader” rule is to give the DOL an opportunity to further consider the effects of the rule on the regulated parties. Comments on the proposed rescinding of the “persuader” rule are due by August 11, 2017.

Significant Federal and State Legislative Action Affecting Employers

1. GOP Introduces Employee Rights Act

On May 25, 2017, Republican Congressional leaders introduced the Employee Rights Act, which provides for substantial revisions to the National Labor Relations Act and other labor laws. Among the proposed changes, the legislation would provide for an election within a maximum of three years after there has been turnover of more than 50 percent of a bargaining unit, to determine whether the bargaining unit still wants to be represented by a union. The legislation also would require unions to obtain permission from members to utilize union dues for any purpose not directly related to the union’s collective bargaining or contract administration functions. This provision of course is intended to undermine the union’s political activities.   In the last session, 33 Senators and 137 House members co-sponsored the legislation.

2. Pennsylvania Enacts Pension Reform Legislation

On June 8, 2017, the Pennsylvania legislature enacted sweeping pension reform. Democrat Governor Tom Wolf is expected to sign the legislation today. Under the bill, most state employees and all school employees hired after January 1, 2019 will receive half of their pension benefits from an existing defined benefit plan and half from a new defined contribution plan. Employees hired after January 1, 2019 will also have the option of taking all of their retirement benefits from the defined contribution plan. In addition, current employees will be allowed to opt in to the hybrid pension arrangement. The measure was intended to alleviate the estimated $71 billion in unfunded liability in the state’s pension plans.

3. New Jersey Assembly Passes Bill That Would Prohibit Questioning Employees Regarding Salary History

On May 22, 2017, the New Jersey Assembly passed legislation that would prohibit employers from asking an employee about his or her salary history. The measure would need to be approved by the New Jersey Senate and signed by Republican Governor Chris Christie  As of April, at least seven other states were considering similar measures – Illinois, Maine, Maryland, New York, Pennsylvania, Rhode Island and Vermont.   Massachusetts, New York City and Philadelphia have already enacted similar measures.

Significant Opinions On Labor Issues

1. NLRB Ruling On Worker Recording Ban Upheld

The Second Circuit affirmed a NLRB ruling that invalidated Whole Foods’ policies prohibiting employees from making recordings at work. The Second Circuit concluded that the rule could be read as preventing employees from recording activity that is protected by Section 7 of the NLRA.

2. NLRB Ruling Requiring Employer To Disclose Witness Statement Affirmed

The DC Circuit affirmed an NLRB ruling compelling an employer to turn over a witness statement requested by the union in connection with the termination of an employee who was charged with sleeping on duty. The Court affirmed the Board’s finding that the witness who provided the statement was not assured that the statement would be kept confidential. Significantly, the opinion discusses the Board’s decision to overrule prior precedent and to enforce prospectively a rule applying a balancing test rather than providing absolute protection to witness statements obtained on the basis of an assurance of confidentiality.

3. NLRB Reverses Termination Based On Text Message

A divided NLRB decision reinstated an employee who was terminated after a manager sent him a text message with a question about his union sympathies.

Department of Labor Moves to Overturn or Modify Several Obama-Era Rules and Guidance Statements

Posted on: June 14th, 2017

By: William H. Buechner, Jr.

The Department of Labor has taken steps to reverse or modify several controversial rules and guidance statements issued by the Obama administration. These developments are favorable to employers.

1. Labor Secretary Signals That DOL Will Pursue Modification Of 2016 Overtime Rule 

Secretary of Labor Alexander Acosta testified before a House Subcommittee last week and signaled potential changes to the 2016 final rule increasing the threshold salary level for white-collar overtime exemptions from $23,600 to $47,476. Acosta testified that the DOL intends to file a Request for Information within the next few weeks to seek information in connection with the 2016 final rule and the salary level.  Acosta testified that the manner in which the salary level of $47,476 was determined “created a shock to the system.” Acosta also stated that it is a “problem” when the salary level is not updated “because life gets a lot more expensive.” During his confirmation hearing in March, Acosta stated that the increase to $47,476 was excessive and indicated that he was open to a more modest salary increase “somewhere around $33,000.”

Based on these comments, it appears that the DOL may be contemplating  issuing a notice of proposed rulemaking that may propose a more modest adjustment in the salary level and perhaps removal of the automatic salary adjustment provision contained in the 2016 final rule.

In the meantime, in the litigation challenging the 2016 final rule, the Department of Justice’s appeal to the Fifth Circuit (filed by the Obama administration) challenging a Texas district court’s preliminary injunction blocking enforcement of the rule is in a holding pattern. Since President Trump took office, the DOJ has been granted three extensions of time to file a reply brief in support of the appeal, with the latest extension giving the DOJ until June 30, 2017 to file a reply brief.

2. DOL Withdraws Controversial Guidance Statements Concerning Joint Employers And Independent Contractors

The DOL issued a press release last week announcing the withdrawal of two controversial guidance statements issued during the Obama administration. First, the DOL rescinded its guidance regarding joint employers under the FLSA and the Migrant and Seasonal Agricultural Protection Act. In the guidance, the DOL took the position that “[t]he concept of joint employment, like employment generally, should be defined expansively under the FLSA and MSPA.” Second, the DOL rescinded its guidance regarding the classification of independent contractors as employees under the FLSA. The guidance stated that “most workers are employees under the FLSA’s broad definitions.”

These two guidance statements have been removed from the DOL website. The press release stated that the DOL “will continue to fully and fairly enforce all laws within its jurisdiction.” During his confirmation hearing in March, Secretary Acosta expressed his view that the “direct and immediate” control standard (which is considered the traditional standard) should be utilized in determining when an entity is an employer. Secretary Acosta also expressed his preference for issuing opinion letters as opposed to the guidance statements. Accordingly, it is possible that the DOL will further clarify its views on both the joint employer and independent contractor issues in opinion letters.

3. DOL Proposes To Rescind “Persuader” Rule

In addition, the DOL published in the June 12, 2017 Federal Register its proposal to rescind regulations that would have required employers to file public reports with the DOL when they use consultants, including lawyers, to provide labor law advice for the purpose of persuading employees in connection with union organizing and collective bargaining. This “persuader” rule would have required consultants to provide details as to the services and advice provided and the amount received. The “persuader” rule was enjoined by a Texas district court in November 2016. The purported purposes of the proposed rescinding of the “persuader” rule is to give the DOL an opportunity to further consider the effects of the rule on the regulated parties. Comments on the proposed rescinding of the “persuader” rule are due by August 11, 2017.

For questions, please contact Bill Buechner at [email protected].

 

Florida Supreme Court Strikes Down Damage Caps in Med Mal Cases

Posted on: June 9th, 2017

By: Melissa A. Santalone

Almost a year to the day after hearing oral argument on the case of North Broward Hospital District v. Kalitan, the Florida Supreme Court finally issued its decision striking caps on noneconomic damages in medical malpractice cases, holding they violate the Equal Protection Clause of the Florida Constitution. The Court reviewed and agreed with the Fourth District Court of Appeal’s ruling that also found Fla. Stat. § 766.118(2) and (3) violate the Equal Protection Clause. Many in the Florida legal community anticipated this outcome, since in 2014, the Court stopped just short of striking all noneconomic damage caps in med mal cases in Estate of McCall v. U.S., 134 So.3d 894. In McCall, the Court limited its holding that noneconomic damage caps were unconstitutional to wrongful death medical negligence suits.

Section 766.118, originally enacted in 2003, imposed caps on noneconomic damages in medical malpractice personal injury lawsuits ranging from of $500,000 to $750,000 per claimant for non-catastrophic injuries, depending on whether they were caused by a “practitioner” or “nonpractitioner,” as defined by the statute. It also limited noneconomic damages to between $1 million and $1.5 million for catastrophic injuries, which includes things like the loss of a limb, severe burns, or severe brain injuries, and those injuries resulting in a permanent vegetative state. 

In the Kalitan case, the plaintiff had undergone surgery for carpal tunnel syndrome, wherein her esophagus was perforated during intubation. After awaking from surgery and complaining of chest and back pain, she was examined by a doctor, who failed to discover her injury, and she was released from the hospital. The next day she was found unresponsive and rushed back to the hospital, where she underwent emergency surgery and spent weeks in a drug-induced coma. The plaintiff underwent a long course of rehabilitation, including additional surgeries, to be able to eat again and alleged she continues to suffer from physical pain and emotional trauma from the incident. At trial, the jury awarded the plaintiff $4 million in noneconomic damages; however, the plaintiff’s recovery was reduced by close to $2 million due to the damage caps.

Section 766.118 was initially enacted under the rationale that it was necessary to combat a medical malpractice crisis where ever-escalating insurance premiums were driving doctors out of state or into retirement, effectively limiting Floridians’ access to healthcare. The 4-justice plurality of the Court found the statute’s effect was arbitrary and unreasonable. It compared the hypothetical outcomes to claimants with varying degrees of injury, and determined the statute arbitrarily limited the recovery of the most seriously injured. Moreover, the plurality concluded, it did so without any rational relationship to the stated objective of decreasing medical malpractice premiums, since there was no mechanism to ensure savings were passed from insurance companies to doctors.  The dissent opinion, signed by 3 justices, found a rational relationship did exist between the statute and the legitimate state interest of decreasing medical malpractice premiums, and argued the plurality misapplied the proper test used in equal protection challenges.

This decision is a win for the Plaintiffs’ bar, which has always been vehemently opposed to caps, and it will likely send shockwaves through the Florida medical and insurance realms. Insurers will need to reevaluate whether the premiums they charge are adequate in light of the increased risk they now face and will need to be prepared to see an increase in the number of suits they must defend against. Likewise, those working in the medical field must decide if the coverage they currently have will adequately protect their personal assets if the worst should happen.

For any questions regarding the Florida Supreme Court’s decision, please contact Melissa A. Santalone at [email protected].

 

Georgia Supreme Court Finds Fault with the Court of Appeals’ Decision Requiring a Full Retrial on Apportionment

Posted on: June 9th, 2017

By: Robyn Flegal

In July of 2007, Joshua Martin suffered a brutal gang attack outside of Six Flags Over Georgia and was left with severe brain damage. On June 5, 2017, the Supreme Court of Georgia granted certiorari to decide the following two questions: “(1) whether Six Flags could properly be held liable for the injuries inflicted in this attack; and (2) assuming liability was proper, whether the trial court’s apportionment error does indeed require a full retrial.” The Supreme Court reinstated a $35 million verdict for Mr. Martin, holding that the jury was authorized to find Six Flags liable for the breach of its duty to exercise ordinary care in keeping its premises safe for invitees. The Court then remanded the case to the trial court for a determination as to apportionment of fault.

The jury had apportioned fault between the parties by assigning 92% of the $35 million verdict against Six Flags, and 2% against four of Martin’s attackers. Six flags argued that the jury should be entitled to apportion damages among not only named defendants, but also among individuals who were alleged to have been involved in Martin’s attack. Georgia law provides that, when assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit. OCGA § 51-12-33.

The Georgia Supreme Court acknowledged that two of Mr. Martin’s assailants should be added to the verdict form, and decided that apportionment could be decided without a full retrial. “[A]s a general matter, where correction of an apportionment error involves only the identification of tortfeasors and assessment of relative shares of fault among them, there is no sound reason to disturb the jury’s findings on liability or its calculation of damages sustained by the plaintiff.” The Court did, however, concede that a retrial on apportionment might require the presentation of much or all of the same evidence as was presented when determining liability.

To be sure that fault is properly apportioned, Georgia attorneys must include on the jury verdict form all individuals, including the plaintiff, who contributed to the injury or damages.¹

For more information contact Robyn Flegal at [email protected].


¹ While this particular case was not a life sciences case, these principles also apply to drug and medical device trials in Georgia.