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Archive for April, 2019

California Attorneys Who Fail to Comply with the State Bar Re-Fingerprinting Rule Risk Monetary Penalties and License Suspension

Posted on: April 30th, 2019

By: Paige Pembrook

April 30, 2019 marks the initial deadline for California attorneys to comply with California Rules of Court, Rule 9.9.5—the rule that requires attorneys to re-submit fingerprints to the State Bar so the Bar can obtain records regarding attorney arrests and convictions.  Attorneys who fail to comply with the re-fingerprinting rule by April 30, 2019 will be subject to monetary penalties. Attorneys who fail to comply with the re-fingerprinting rule by the final deadline of December 1, 2019 will have their licenses suspended.

For the past 30 years the State Bar has not been complying with its statutory mandate to use attorney fingerprinting to obtain information about attorney arrests and convictions from the California Department of Justice (DOJ).  Although attorneys were fingerprinted at the time of admission to the State Bar, neither the Bar nor the DOJ retained those fingerprints for purposes of reporting arrests and convictions of admitted attorneys.

Rule 9.9.5 rectified this situation by requiring all active licensed attorneys to be re-fingerprinted by December 1, 2019. The State Bar and DOJ will retain the fingerprints to enable the Bar to receive state and federal criminal record information, including a summary of arrests, criminal charges, and sentencing.

Thus far, the re-fingerprinting rule has revealed that over 2,000 practicing attorneys have previously unreported criminal records, including 20 previously unreported felonies. The 20 previously unreported felonies have been sent to the State Bar’s Office of Chief Trial Counsel for review and potential disciplinary action.

Regardless of the re-fingerprinting rule, attorneys are required to report criminal convictions to the State Bar under the self-reporting mandate. The State Bar may discipline attorneys for failing to report a conviction to the Bar, for the conviction itself, or for both.  The best practice is to self-report any convictions as well as timely comply with the re-fingerprinting rules.

Even attorneys who have no criminal history should be sure to submit their fingerprints by the final December 1, 2019 deadline. Otherwise, such attorneys risk license suspension and exposure to liability for the unauthorized practice of law.

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

Sovereign Immunity Finally Bars $10.6 Million Judgment Against City of Albany

Posted on: April 30th, 2019

By: Wes Jackson

Following up on our recent blog post highlighting the Georgia Court of Appeals’ decision to reverse a $10.6 million trial verdict against the City of Albany on sovereign immunity grounds, we are pleased to announce that the Georgia Supreme Court has declined to review the Court of Appeals’ decision. The Supreme Court’s decision marks an important win for local governments in Georgia. Freeman Mathis & Gary attorneys Sun Choy, Jake Daly, and Wes Jackson represented the City as appellate counsel.

The wrongful death case concerned the murder of a young man at an illegal night club in Albany, Georgia. The administrators of the man’s estate argued at a trial that the illegal club was essentially a “nuisance” the City of Albany had created or maintained by declining to shutter the club when it had prior opportunities to do so. After trial, a jury awarded the plaintiffs $15,200,000 in damages, apportioning 70% of the liability to the City. The jury only apportioned 10% of the liability to the owners and operators of Brick City, 13% to the actual murderer, and 1% each to seven participants in the brawl.

In reversing, the Court of Appeals concluded that plaintiffs cannot circumvent sovereign immunity by simply alleging that the City’s discretionary conduct amounted to the maintenance of a “nuisance.” The Court of Appeals’ decision is available at City of Albany v. Stanford, 347 Ga. App. 95, 815 S.E.2d 322 (2018). The Georgia Supreme Court’s decision to deny plaintiffs’ petition for certiorari makes the Court of Appeals’ decision final.

The case marks an important win for municipalities in Georgia by reinforcing the scope of their defense of sovereign immunity.

For additional questions about this matter or sovereign immunity under Georgia law, please contact Sun Choy ([email protected]), Jake Daly ([email protected]), or Wes Jackson ([email protected]).

The Door Swings Both Ways for U.S. and Israeli Investors

Posted on: April 29th, 2019

By: Layli Eskandari Deal

In June 2012, Congress passed a law which authorized E-2 Investor visa classification for Israeli nationals provided that Israel’s government would establish a similar status for U.S. citizens. After a long regulatory change process, U.S. citizens can now apply for and obtain the B-5 Israeli Investor visa. In response, the U.S. government has made available the E-2 Investor Visa to Israeli citizens. The U.S. Embassy in Tel Aviv will start accepting E-2 visa applications on behalf of Israeli investors on May 1, 2019.

The E-2 Investor Visa is a temporary visa that can be used to develop, direct, or provide specialized skills to an enterprise in which the owner has invested a substantial amount of capital. To qualify for a Treaty Investor (E-2) visa:

  • The individual or the company has the nationality of the treaty country (at least half of the company must be owned by Israeli nationals).
  • The investment must be substantial and sufficient to ensure the successful operation of the enterprise beyond just providing a minimal living for the investor and their family.
  • The business must be a real operating enterprise.
  • The investor must be traveling to the U.S. to develop and direct the enterprise.
  • If the applicant is not the investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity.

The E-2 visa will provide a much-needed alternative visa category to Israeli entrepreneurs and Israel’s flourishing hi-tech sector.

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

California Judge Approves $3M Settlement with FedEx Workers

Posted on: April 29th, 2019

By: Marshall Coyle

A California federal judge gave the green light to a $3.15 million deal ending a pair of putative class actions accusing FedEx unit Genco I Inc. of not giving breaks to workers and of violating the Fair Credit Reporting Act by conducting secret background checks.

U.S. District Judge Yvonne Gonzalez Rogers initially approved the agreement in August following a revision of a “confusing” settlement first proposed in June.

Under the terms of the agreement, half the settlement will be allotted to the nearly 900 members of a California wage and hour class, and the other half will go to over 20,000 members of a national Fair Credit Reporting Act (FCRA) class.

In a brief order, Judge Gonzalez Rogers certified the classes for settlement purposes and granted an award of $787,500 in attorney fees, or 25% of the total fund, along with $16,809.70 for litigation expenses. The lead plaintiff for both suits, Adan Ortiz, will receive $5,000 for his time and effort.

“The Court further finds and determines that the terms of the Settlement are fair, reasonable, and adequate to the Classes and to each Class Member,” the judge said. “The Court finds and determines that the Classes, as conditionally certified by the Preliminary Approval Order meet all of the legal requirements for class certification for settlement purposes only.”

The settlement resolves two lawsuits that Ortiz filed against Genco, which has since been renamed FedEx Supply Chain Inc. Ortiz was a nonexempt worker for Genco, which operated a Kraft Heinz Food Co. facility, from March to October 2015. He filed the wage and hour suit against Genco and Kraft Heinz in June 2016, followed by a separate suit alleging FCRA violations in May 2017.

The first suit alleged Genco and Kraft Heinz failed to give workers meal and rest breaks and improperly rounded employee time records. Ortiz voluntarily dropped allegations against Kraft Heinz in December 2016. The other action accused the company of violating the FCRA by failing to disclose it was conducting preemployment background checks.

The cases are Ortiz v. Genco I Inc. and Ortiz v. Genco I Inc. et al., case numbers 4:16-cv-04601 and 4:17-cv-03692, in the U.S. District Court for the Northern District of California.

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

And The Saga Continues… EEO-1 Pay Data Likely Due September 30, 2019

Posted on: April 26th, 2019

By: Brad Adler and Brent Bean

As we have previously reported, in 2016, the EEOC adopted additional EEO-1 pay data collection requirements commanding employers to report employee wages and hours worked by race, ethnicity and sex. By way of background, companies with 100 or more employees, along with federal contractors who employ 50 or more employees, have long been required to submit to the EEOC annual Employer Information Reports, so-called EEO-1 reports. These reports disclose information concerning the number of employees a company employs broken down by job category, race, sex, and ethnicity. But with the additional pay data collection requirements, pay data also must be sorted by race, ethnicity and sex.

In August 2017, the Office of Management and Budget announced a stay of this pay data collection requirement, citing the burden imposed on businesses. In response, the National Women’s Law Center brought suit in the District Court for Washington, D.C., challenging the OMB’s basis for taking that action and seeking to reinstate the pay data collection.

On March 4, 2019, that court ruled that the EEOC must reinstate the pay and work hours reporting component of the EEO-1 Report. See National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019). Since that ruling (which was a blow to employers and a surprise to everyone, including the EEOC), the EEOC and the plaintiffs have been battling with each other (and the Court) over the timeline for collection of this data.

The same District Court judge has now ruled that the EEO-1 pay data (sorted by race, ethnicity and sex) must be collected from covered employers by September 30, 2019.  The Commission advises that the portal will be open for pay data by July 15, 2019. As such, it is advisable that covered employers prepare now to submit 2018 pay data by September 30, 2019. Be advised, however, that reporting of customary EEO-1 data for 2018 is still due by May 31, 2019.

While there remains the option of an appeal of the District Court’s order, such an appeal may, or may not, have the effect of staying compliance with the order. As a result, we advise employers to start now in preparing for submission of the required pay data. In doing so, employers should work with outside counsel to identify any disparities that may draw increased scrutiny and to understand what legitimate, non-discriminatory reasons exist for their present pay practices.

FMG will keep you updated on activity by the Commission and its actions (and reactions) on this continuing saga.

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Brent Bean at [email protected].