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Missouri Supreme Court Upholds Non-Economic Damages Cap

On July 22, 2021, the Court issued its opinion in the matter of Ordinalo Velazquez v. University Physician Associates, et al. In a victory for health care providers, the Missouri Supreme Court rejected a constitutional challenge to non-economic damages caps in actions based on the provision of medical services.

Court Remands Mine’s ‘Synthetic Minor’ Air Permit for Findings on Whether Mine Intends to Comply With Operational Limits

The Minnesota Court of Appeals ruled this week that a mine’s “synthetic minor” air emissions permit failed to address contentions attributed to its parent company’s public securities filing that some said suggested the mine might not comply with the permit’s output restrictions.  The court ruled the Minnesota Pollution Control Agency (“MPCA”) must make additional factual findings to address those contentions and issue a revised decision to support its conclusion that PolyMet Mining Inc. (“PolyMet”) is anticipated to comply with the terms of its synthetic minor source permit.

Name, Image, and Likeness: What Colleges and Universities Need to Know

For years advocates for collegiate athletes’ rights have argued that there should be compensation allowed for their participation in intercollegiate athletics.  At the very least these advocates have insisted that the athletes should be able to benefit from the use of their name, image, and likeness (NIL).  In September 2019, California enacted the first law granting NIL rights to collegiate athletes with an effective date of July 1, 2021.  A month later the NCAA Board of Governors unanimously agreed it was time to address its NIL regulations. Subsequently, 27 states have joined in enacting NIL legislation, including 15 that have become effective since July 1.  The remaining dozen will become effective between now and 2023.  Three other states have pending bills with a similar focus.

United States Supreme Court Holds That Plaintiffs Must Suffer Concrete Harm to Sue in Federal Court

As part of the flurry of its end-of-term opinions, the U.S. Supreme Court recently issued its opinion in TransUnion LLC v. Ramirez, 594 U.S. ____ (2021) confirming that plaintiffs who have suffered no concrete harm have no standing to sue in federal court under Article III of the U.S. Constitution.  As Justice Kavanaugh succinctly put it in writing for the five justice majority, “No concrete harm, no standing.”

OSHA Implements COVID-19 Emergency Temporary Standard for Healthcare and Updates COVID-19 Guidance for all Employers

On June 10, 2021, the Occupational Safety and Health Administration (“OSHA”) announced an action OSHA has not taken in 38 years: issuing an Emergency Temporary Standard (“ETS”).  This ETS aims to protect “healthcare and healthcare support service workers from occupational exposure to COVID-19 in settings where people with COVID-19 are reasonably expected to be present.”  The ETS does not go into effect until publication in the Federal Register, which has not yet occurred but appears imminent (OSHA has submitted the ETS to the Office of the Federal Register for publication and codification in 29 CFR 1910 Subpart U).  The text of the ETS, as submitted to the Office of the Federal Register, is available here.  OSHA also launched a website with resources regarding the ETS.

Five Best Practices the White House Urges all Businesses to Take to Mitigate Risk of Ransomware Attacks

The threat of ransomware attacks against all American businesses is so great that on June 2, 2021, the White House issued a memo to all corporate executives and business leaders with the subject “What We Urge You To Do To Protect Against The Threat of Ransomware.” This is the first time such a memo has ever been issued. That is how serious the threat of ransomware attacks is to our nation.

Did my Client Just Waive Privilege?!

For any attorney, whether new or seasoned, this can be a terrifying possibility. Privilege waivers can happen at any time and can have devastating consequences for your client’s case. This possibility is made even more precarious when one considers that jurisdictions have varying guidelines when it comes to what constitutes a waiver.

COVID-19 Update: EEOC Vaccine Incentive Programs

On May 28, 2021, the Equal Employment Opportunity Commission (“EEOC”) updated its COVID-19 related technical assistance document, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” which can be found here (“WYSK”). This document was first published on March 19, 2020, and was last updated, as we noted in this previous WorkSmarts update, on December 16, 2020. Although the recent update was published without consideration of updated guidance from CDC for fully vaccinated individuals issued on May 13, 2020, it still contains valuable guidance for employers with respect to vaccines in the workplace.

Whistle Blowers Claim Colorado Air Pollution Control Division Violates the Law

Three air quality modeling staff ask the EPA Inspector General to investigate

In a letter to the U.S. Environmental Protection Agency (EPA) dated March 30, 2021, three self-styled “whistle blowers” who serve as air quality modelers working in the Air Pollution Control Division (APCD) of the Colorado Department of Public Health and Environment (CDPHE) asked EPA’s Inspector General, Sean W. O’Donnell, to open an investigation into policy decisions made by the agency. See letter here.

To Mask or not to Mask – Questions in Light of new CDC Guidance

On May 13, 2021, the Centers for Disease Control and Prevention (CDC) made a surprising announcement: individuals who are fully vaccinated no longer need to wear masks or maintain social distance in most indoor spaces. Individuals are considered fully vaccinated two weeks after their second dose of the Pfizer or Moderna vaccine or two weeks after a single dose of the Johnson and Johnson vaccine.

Greater Sage Grouse Habitat – Bureau of Land Management Will Reevaluate Land Withdrawals

At Issue? Impacts on 10 million acres of public lands

On May 11, 2021, the Bureau of Land Management (BLM) announced it will take another look at its greater sage grouse conservation plans and the agency’s process related to the possible withdrawal of up to 10 million acres of habitat from mineral location and entry.  See the BLM announcement here.

The agency’s long-delayed announcement comes after two federal court judges ordered the agency to re-think its plans: (1) a May 2020 federal Court’s decision in Montana vacating oil and gas lease sales on BLM lands in Wyoming and Montana [see opinion here], and (2) a February 2021 federal Court’s decision in Idaho that vacated the Trump administration’s decision to stop withdrawal of millions of acres of public lands for mineral development [see opinion here].  The focus of the courts’ opinions is BLM’s management plans that were designed to support sagebrush ecosystems on which sage grouse rely.

DOL Withdraws FLSA Independent Contactor Rule

On May 5, 2021, the United States Department of Labor (“DOL”) withdrew the regulations (i.e. the “Independent Contractor Rule”) that were intended to clarify the standard for determining whether a worker qualifies as an independent contractor for FLSA purposes. See DOL Press Release, US Department of Labor to Withdraw Independent Contractor Rule (May 5, 2021); see also Independent Contractor Status Under the Fair Labor Standards Act: Withdrawal, 86 FR 24303 (Published: May 6, 2021). The withdrawal of the Independent Contactor Rule is effective as of May 6, 2021.

The Anatomy of Lost Profits Claims in Franchise Cases

Originally Published in Franchise Law Journal

Claims seeking the recovery of lost profits are becoming increasingly more common in franchise litigation, particularly after franchise termination.  Because both the franchisor and the franchisee enter into the relationship with the expectation of profit, a termination frustrates both sides’ expectations and the economic rationale for entering the relationship in the first place.  Although historically franchisees were more likely to assert these claims in reaction to terminations, more recently franchisors have also pursued such claims when franchisees leave the relationship before the end of the contract term.  This article provides a brief history of the law governing claims for lost profits, outlines selected issues facing litigants under the current slaw, and concludes by offering some opinions about best practices for litigants relating to lost profits, particularly in the franchise context.

DOL Issues Cybersecurity Guidance

On April 14, 2021, the Department of Labor’s Employee Benefits Security Administration (“EBSA”) issued cybersecurity guidance for retirement plan fiduciaries and service providers, as well as plan participants.  In the guidance, the EBSA states that ERISA fiduciaries are required to take appropriate steps to mitigate internal and external cybersecurity threats to plan participants and retirement plan assets.   To assist fiduciaries  and service providers in fulfilling this obligation, the EBSA issued two documents that describe cybersecurity best practices – Cybersecurity Program Best Practices and Tips for Hiring a Service Provider.  The EBSA also issued some basic rules – Online Security Tips – to help participants reduce the risk of fraud and loss to their retirement accounts.

The Eleventh Circuit Calls Into Question the use of Letter Vendors as Violative of the FDCPA

The Eleventh Circuit in Hunstein v. Preferred Collection and Management Services, Inc. issued an opinion yesterday that confronted an issue of first impression, namely, whether a debt collector can use a third party vendor to send collection letters without violating the Fair Debt Collection Practices Act (“FDCPA”).  The facts were simple.  The defendant/debt collector used a third party letter vendor to send an initial “dunning” letter to the plaintiff/consumer.  In doing so, the defendant provided the vendor with the plaintiff’s name, his outstanding balance, the fact that his debt resulted from his son’s medical treatment, and his son’s name.  The plaintiff filed a lawsuit alleging that the defendant violated the FDCPA by disclosing his personal information to the third-party vendor.

Three Quick Steps to Help Prepare Your Business for Cyber Threats

Nearly Half of all Businesses hit by Cyber Attacks in 2020

43% of businesses in the United States and Europe were hit with a cyber attack in 2020, an increase of 5% from 2019 which was 38%, according to Hiscox’s Cyber Readiness Report. Businesses cannot ignore this threat and must face it head-on. All businesses should now have an operational and maturing cyber risk management program in place that is led by their trusted cyber legal counsel.

Wyoming Legislature Authorizes Suits Against Colorado and Other States

The Prospective Claims: States “Impermissibly” Impede the Export of Wyoming Coal and Force Closure of Coal-Fired Power Plants

Colorado (as only one example of many states) is working to reduce its reliance on coal and other fossil fuels for its electricity and transportation needs.  Colorado plans to transition to 100 percent clean electricity generation by 2040 and rapidly expand the electrification of vehicles.

Products Containing PFAS may Soon Require California Proposition 65 Warnings

Manufacturers, suppliers, retailers, and other entities in supply chains for consumer products sold in California might soon need to provide warnings regarding certain per- and polyfluoroalkyl substances (PFAS) in their products.  California’s Office of Environmental Health Hazard Assessment (OEHHA) recently announced its intent to further regulate and study certain per- and polyfluoroalkyl substances under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65.  Proposition 65 prohibits companies from knowingly exposing California consumers to chemicals “known to cause cancer or reproductive toxicity” (i.e., “listed chemicals”) in consumer products without first providing a “clear and reasonable warning.”  (Although not the focus of this article, Proposition 65 also addresses occupational and environmental exposure to listed chemicals.)

New Kansas City, Missouri Affordable Housing Ordinance Goes Into Effect

Developers Need to Consider New Affordable Housing Requirements Materially Impacting Project Feasibility

As demand for affordable housing continues to grow throughout the country, municipalities are increasingly faced with decisions of how best to structure and incentivize affordable housing development.  Recently, Kansas City, Missouri passed Ordinance No. 201038 (“Ordinance”) on January 28, 2021 which sets forth requirements for residential development projects seeking incentives to require affordable housing components. It took effect on April 8, 2021.  The Ordinance provides in part that projects “seeking economic incentives in the nature of the capture and redirection, abatement or exemption of taxes or other City financing contain an minimum number of affordable housing units” to qualify for those incentives.  Only projects that have not submitted an application by April 8, 2021 (the “Effective Date”) seeking incentives (as defined below) will be impacted, although projects that have applied earlier will be subject to the Ordinance if the project takes longer than three years from the Effective Date to receive final approval.

The Third Circuit Explains That the ‘Least Sophisticated Consumer’ is Presumed to Have a Willingness to Read Collection Letters With Care

In the recent Third Circuit opinion rendered in Moyer v. Patenaude & Felix, A.P.C., the plaintiff brought a putative class action alleging that Patenaude & Felix violated the Fair Debt Collection Practices Act (“FDCPA”) by sending her a single collection letter. The letter advised the plaintiff that her debt had been assigned to the firm and stated: “If you wish to eliminate further collection action, please contact us at 800-832-7675 ext. 8500.”  The letter then went on to advise the plaintiff of her validation rights under §1692g.  Resolution of the alleged class action claims required the Third Circuit to decide whether the inclusion of the single sentence inviting a call would confuse the least sophisticated consumer.

The Minnesota Supreme Court Determines Retailer Cannot Claim a Sales Tax Offset Based on Uncollectible Debts

The Minnesota Supreme Court recently ruled that a large home improvement retailer cannot claim a sales tax offset based on uncollectible debts from purchases made on its private label credit card, in the case Menard, Inc. v. Commissioner of Revenue, case number A20-0241. The home improvement retailer, attempted to offset its sales tax liability pursuant to Minnesota Statues § 297A.81, subd. 1 that allows a taxpayer to offset against its current sales tax liability taxes “previously paid as a result of any transaction the consideration for which became a debt owed to the taxpayer that became uncollectible during the reporting period.”

COBRA Changes Under the American Rescue Plan Act of 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law.  Among the Act’s many provisions is a temporary subsidy for COBRA coverage that will undoubtedly be a significant benefit for individuals who lost health coverage during the pandemic, but which is just as certain to be a tremendous administrative burden for employers and group health plans.

The Impacts of the Upcoming Beneficial Owner Disclosure Requirement on Real Estate Owners

As part of the National Defense Authorization Act for fiscal year 2021, Congress inserted a section titled the Corporation Transparency Act (the “CTA”) in order to combat money laundering and terrorism by creating a federal registry of the beneficial owners of limited liability companies, corporations, and other similar entities. The Financial Crimes Enforcement Network (“FINCEN”) of the Department of Treasury will keep the registry confidential, but is authorized to share the information with governmental, law enforcement, and foreign authorities.

After CFPB Refuses to Change FDCPA’s Strict Liability, Ninth Circuit Permits Bona Fide Error Defense for Statute of Limitations Mistake

The Consumer Financial Protection Bureau (CFPB) recently considered eliminating strict liability for one category of claims under the Fair Debt Collection Practices Act (FDCPA): claims asserting that a debt collector brought or threatened to bring legal action to collect a time-barred debt. The proposed revision to Regulation F would have required consumers to show that a debt collector knew or should have known the debt was outside the statute of limitations. Advocates for the change argued that strict liability was inappropriate because a debt collector can reach the wrong conclusion about a state’s application of the statute of limitations even after a thorough investigation and a consumer can raise the issue as an affirmative defense if he/she disagrees with the collector’s conclusion.  Debt Collection Practices (Regulation F), 86 FR 5766-01 (Jan. 19, 2021).

Harris County Steps up Inspections and Enforcement of Industrial Permitting and Fire Code Compliance

Businesses that own and operate industrial facilities in Harris County, Texas, should be aware of recent efforts by the Harris County Fire Marshal’s Office (HCFMO) to ensure that these facilities have obtained proper permits and certificates of compliance for construction and development projects for energy infrastructure and related operations. Failure to obtain the necessary permits and certificates of compliance presents the attendant risk of an enforcement case with the issuance of a notice of violation and potential shutdown of all operations.

Confusion and Anxiety Fail to Satisfy a Plaintiff’s Burden Under the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (“FDCPA”) was enacted in 1977 to eliminate abusive debt collection practices.  15 U.S.C. § 1692(e).  To further that goal, section 1692e of the FDCPA prohibits a debt collector from using false, deceptive, and misleading representations; section 1692f prohibits a debt collector from using unfair or unconscionable means; and, section 1692g requires a debt collector to provide certain information (the amount of the debt, name of creditor, and explanation of right to dispute a debt) to a consumer.

Trademark Owners Should Proactively Audit Goods and Services Coverage

A trademark registration issued by the U.S. Patent and Trademark Office (USPTO) is a valuable asset to a trademark owner in view of the substantial statutory benefits, advantages, and remedies it provides.  A federal registration provides statutory notice to the public of the trademark it represents and the USPTO maintains a register of all trademark registrations.  In its role as gatekeeper, the USPTO strives to ensure the integrity of the register and to clear away any “dead wood” registrations for trademarks that have been abandoned.  The USPTO views its gatekeeper role as a benefit to the public in that the removal from the trademark register of registrations for abandoned trademarks (1) reduces the unnecessary blockage of future trademark applications and (2) maintains the integrity of the register to provide notice of existing trademark rights to the public.

Waters of the U.S. – Tenth Circuit Overturns Preliminary Injunction in Colorado WOTUS Case

Although other states and parties tried, Colorado was the only state that succeeded in persuading a U.S. District Court Judge to enter a preliminary injunction against enforcement (in Colorado only) of the new waters of the United States (WOTUS) rule which was published nearly a year ago, i.e., April 21, 2021. After being on appeal for several months, the Tenth Circuit Court of Appeals expressed its displeasure with that ruling.  In State of Colorado v. U.S. Environmental Protection Agency et al., case number 20-1238, Judge Baldock, in his March 2, 2021 opinion, was direct and to the point:

EPA Takes New Steps to Regulate PFAS

EPA on February 22, 2021, announced new steps to address PFAS  (per- and polyfluoroalkyl substances) in drinking water.  These actions will collect new data on the presence of PFAS in drinking water and could lead EPA to establish maximum contaminant levels, commonly known as MCLs, for these substances under the Safe Drinking Water Act (SDWA).  

In Between a Rock and a Hard Place

Condemning Property When in the Process Of Obtaining Development Approvals

Typically, special districts in Colorado are required by local municipalities to construct various improvements in order to move forward to develop property.  These requirements can be imposed before, during, and after certain development approvals are obtained.  Special districts can find themselves in between a proverbial rock and a hard place when seeking to move forward with condemnation to construct improvements before having formal approval to move forward with the larger development.

EPA Criminal Penalty for RMP Violations at Cold Storage Ammonia Refrigeration Warehouse

On December 16, 2020, a cold storage warehouse and ice manufacturing facility in East Providence, Rhode Island, entered into a guilty plea with the Justice Department for a “knowing” criminal violation of Clean Air Act section 112(r)(7), 42 USC 7412(r)(7), in connection with EPA’s Chemical Accident Prevention Program and requirement to submit a risk management plan (RMP) under 40 CFR Part 68.  The facility used a refrigeration system to manufacture and store ice and other frozen products, with 19,000 pounds of anhydrous ammonia in the refrigeration process.

Investment Advice Exemption Confirmed

On February 12, 2021, the Department of Labor issued a press release confirming that the new fiduciary investment advice guidelines under Prohibited Transaction Exemption 2020-02 will go into effect on February 16, 2021.  The Department also confirmed that the temporary enforcement relief provided by Field Assistance Bulletin 2018-02 will remain in place until December 20, 2021.

The Biden administration previously issued a memo to regulatory agencies suspending new regulations issued during the waning days of the Trump administration.  The purpose of the suspension is to provide the incoming administration with the opportunity to review those regulations.   As a result, there was some question whether the Exemption would become effective.

EPA Clarifies its Audit Policy on Voluntarily Disclosed Violations

Manufacturing facilities, industrial operations, and other businesses subject to environmental statutes and regulations will want to evaluate a new EPA document when considering whether and how to voluntarily disclose environmental violations to the federal government.  EPA recently published a 22-page guidance document, dated January 2021, clarifying EPA’s Audit Policy.  EPA’s Audit Policy consists of incentives the agency offers to companies that voluntarily discover their own violations of environmental laws and regulations and disclose the violations to EPA.  When all of the nine eligibility conditions in the Audit Policy are met, the Audit Policy allows for up to complete elimination of the gravity-based portion of civil penalties for environmental non-compliance, and a recommendation of no criminal prosecution. (EPA penalties may also include amounts to address the economic benefit of non-compliance, which the Audit Policy does not address.)  The Audit Policy itself is memorialized in Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations, 65 Fed. Reg. 19618 (Apr. 11, 2000) (an update to the original 1995 document establishing the Audit Policy).

Taking a Shot at Avoiding Quarantine (and COVID-19): A Layered Approach

During the COVID-19 pandemic, it is important to stay up-to-date with the latest guidance from the CDC. On February 10, 2021, the CDC released new guidance for the general public regarding mask-wearing and quarantining for individuals who have received both doses of the COVID-19 vaccine. This new guidance is important for employers whose employees are working in-person and for employers in certain industries who may have fully-vaccinated employees.

Since When do Attorneys Have to Pay the Opposing Counsel Fees?!

Attorneys can be Held Responsible for Opposing Legal Fees if Discovery Rules are Neglected

This may be a question that has never crossed your mind. If so, then good for you. It means you’ve likely never been faced with sanctions. However, just because you haven’t, doesn’t mean you shouldn’t be aware of the possibility.

Exclusions In Your Insurance Policy May Leave Your Business Exposed

Insurance Companies are Increasingly Excluding Coverage for Copyright and Trademark Infringement Actions

Most companies obtain one or more insurance policies to help limit the company’s risk.  A commercial general liability policy (or “CGL policy”) is arguably the most common insurance policy that companies obtain.  CGL policies are often thought to provide broad protection to a company for various risk factors.  This coverage includes things often outside the company’s control (e.g., things that happen just because the company is “in business”).  Many companies rely on these insurance policies to provide coverage to defend against frivolous lawsuits, including those brought by trademark and copyright “trolls” whose primary purpose is to make money through litigation.  Without insurance coverage, a company that is met with a (threatened) lawsuit is left to pay extensive attorneys’ fees for a legal defense, and/or must concede to the extortion of the plaintiff (which usually entails paying for a settlement, plus relinquishing other rights that negatively impact the company).

OSHA Issues New Comprehensive Worker Safety Guidance – COVID-19

On Friday, January 29, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) issued a new comprehensive worker safety guidance to protect workers against COVID-19, entitled: “Protecting Workers – Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.”

Biden Executive Order regarding OSHA and COVID-19 Ushers in Changes

On January 21, 2021, President Biden issued the “Executive Order on Protecting Worker Health and Safety,” available here, along with numerous other executive orders addressing COVID-19.  The order directs the Occupational Safety and Health Administration (OSHA) to:

  • Issue revised guidance to employers on workplace safety during the COVID-19 pandemic, by February 4, 2021;
  • Consider whether any emergency temporary standards on COVID-19, including regarding masks in the workplace, are necessary, and if necessary, issue them by March 15, 2021 (expedited approval measures apply to such emergency standards);
  • Review OSHA’s enforcement efforts related to COVID-19 and identify changes that could better protect workers and ensure equity in enforcement;
  • Launch a national program to focus OSHA enforcement efforts related to COVID-19 on violations that put the largest number of workers at serious risk or are contrary to anti-retaliation principles; and
  • Conduct a multilingual outreach campaign to inform workers and their representatives of their rights under applicable law, placing a special emphasis on communities hit hardest by the pandemic.

OSHA and EPA Penalties Set to Increase in 2021

Fines and penalties issued by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Labor Occupational Safety and Health Administration (OSHA) are set to increase in 2021 as a result of annual inflationary adjustments.

‘American Rescue Plan’ Proposed to Provide Expanded COVID-19 Paid Leave and Unemployment Relief

On January 14, 2021, President-elect Biden announced the “American Rescue Plan,” which is the new administration’s first emergency coronavirus and stimulus proposal.  If passed, the plan will greatly expand the availability of paid leave and unemployment benefits to U.S. workers.  Indeed, the new administration maintains that the plan could provide emergency paid leave to an additional 106 million Americans.  To do so, the plan will impose significant new burdens on employers by, for example, closing certain loopholes that previously exempted large segments of employers from federal paid leave requirements.

Major Employee Benefit Reforms Included in COVID-19 Stimulus Package

In addition to $600 checks for most Americans, the year-end COVID-19 stimulus package signed by the President on December 27, 2020, includes a new round of changes that employers will need to track for their employee benefit plans.  The Consolidated Appropriations Act, 2021 (H.R. 133) (the “Act”) is the fourth major legislative attempt to provide relief to businesses and individuals facing economic hardship due to the COVID-19 pandemic.   Although lacking a catchy acronym (like the “CARES” and “SECURE” Acts), this legislation makes the most significant changes to health plans since the Affordable Care Act, offers employers and employees additional flexibility for cafeteria plan benefits, and provides additional retirement plan relief.

DOL Finalizes Fiduciary Investment Advice Guidance

On December 15, 2020, the Department of Labor finalized its new guidelines for fiduciary investment advice.  Prohibited Transaction Exemption 2020-02 both clarifies the circumstances under which financial institutions and investment professionals are considered “fiduciaries” under ERISA and the Internal Revenue Code, and also establishes a new framework under which such fiduciaries may provide services and receive compensation.

The preamble to the final Exemption provides the Department’s long-awaited final interpretation of when investment advice – such as a recommendation to roll over retirement plan assets to an IRA (or between IRAs) – creates a fiduciary relationship under ERISA or the Code. The substantive terms of the Exemption allow investment advisers who are fiduciaries to receive compensation and engage in principal transactions that would otherwise violate prohibited transaction rules.

The Exemption applies to SEC- and state-registered investment advisers, broker-dealers, banks, insurance companies, and their employees, agents and representatives that are investment advice fiduciaries under the newly interpreted “five-part” test of fiduciary status.  It imposes certain conditions to protect the interests of retirement plans, participants, beneficiaries, and IRA owners.  The Exemption is set to become effective February 16, 2021, absent a delay by the Biden Administration.  Thus, employers will need to be aware of the Exemption and its conditions in their engagement of (and interactions with) plan service providers.

COVID-19 Update: FFCRA Tax Credits Extended and Updated Guidance from the CDC

On Monday, December 21, the stimulus bill from Congress was released. The bill contains individual relief, as well as an extension of federal unemployment assistance benefits. The bill did not, however, contain an extension of the mandatory paid leave benefits provided under the Families First Coronavirus Response Act (“FFCRA”). The stimulus does contain an extension through the end of March, 2021 of the tax credits provided for under the FFCRA leave. As a result, the mandate for FFCRA leave will formally sunset on December 31, 2020, but employers who voluntarily provide leave under the original provisions of the law may be able to qualify for tax credits through the end of March, 2021.

7th Circuit Issues 5 Rulings Clarifying Standing Under Fair Debt Collection Practices Act

Setting up the potential for the U.S. Supreme Court to confirm and strengthen its 2016 opinion in Spokeo v. Robins, the United States Court of Appeals for the Seventh Circuit issued a raft of five rulings this week that clarify Article III standing issues related to claims under the Fair Debt Collection Practices Act (FDCPA). Through these five opinions, the Seventh Circuit has unequivocally aligned itself with the Eleventh and D.C. Circuits in requiring a plaintiff to plead and provide “competent proof” of a concrete injury in fact to establish Article III standing.  What follows is a brief analysis of each opinion as it relates to a plaintiff’s burden to survive a motion to dismiss for lack of standing.

Colorado’s Equal Pay for Equal Work Act Starts January 1, 2021

No Pay Discrimination for Substantially Similar Work, and New Job Posting Rules

On January 1, 2021, the Equal Pay for Equal Work Act (“EPEWA” or “the Act”) becomes effective in Colorado.  C.R.S. § 8-5-101 et seq.  The Act applies to virtually all employers in the state, regardless of size, and is intended to “close the pay gap” between men and women and “ensure that employees with similar job duties are paid the same wage rate regardless of sex,” which it defines broadly as “gender identity.”  The Act has two major parts: (1) Part 1 amends Colorado’s previous equal pay statute by broadening the prohibition against wage discrimination to include paying employees of different sexes less for “substantially similar work”; and (2) Part 2 provides for “transparency in pay and opportunities for promotion and advancement” by requiring employers to announce opportunities for promotion and to disclose wage and benefit information in all job postings.

What to Consider Before Implementing a Mandatory Vaccine Policy

The first COVID-19 vaccines have been released, with more to come in the near future. This landmark development raises important questions – can employers require their employees to get the COVID-19 vaccine as a term and condition of continued employment when it becomes available to them? And if an employer implements such a mandate, would it be lawful?

Missouri Bankruptcy Court Holds Debtor Must Be Currently Engaged in Commercial or Business Activities to Be Eligible to Make Subchapter V Election

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In In re Thurmon, the Bankruptcy Court for the Western District of Missouri (Judge Norton) held that debtors who had ceased operation of their business and sold its assets pre-petition were not “engaged in commercial or business activities,” and therefore could not proceed under new subchapter V of chapter 11. Despite its order, the Court nonetheless signaled its willingness to confirm the debtors’ subchapter V plan with a modification, although the debtor had never sought approval of or distributed a disclosure statement as required for non-subchapter V chapter 11 debtors.

This Year’s Top 8th Circ. Bankruptcy Decisions

Originally published Dec. 9, 2020, on Law360.

With the COVID-19 pandemic depriving bankruptcy practitioners of our usual opportunities to meet in court and at conferences to discuss recent developments in the law, I spent time tracking developments in bankruptcy law within the U.S. Court of Appeals for the Eighth Circuit.

Colorado Looking to Issue Comprehensive Guidance for Waters of the United States (WOTUS)

How is Colorado Dealing with “Gap” Waters?

The scope of federal jurisdiction under the Clean Water Act remains perplexing, particularly now that Colorado is the only state in the nation where the Navigable Water Protection Rule did not take effect June 22, 2020.  In the context of a lengthy “stakeholder” process, on November 20, 2020, the Colorado Department of Public Health and Environment (CDPHE) issued a White Paper addressing its regulatory options in light of the new federal WOTUS rule.  Construction companies, developers, and other businesses seeking to permit activities around wetlands, ephemeral waters, and intermittent streams in Colorado would benefit from reviewing this comprehensive discussion of the multitude of dilemmas Colorado and others states face in light of the new rule.

Eighth Circuit Clean Air Act Opinion Brings “Deference” into Sharp Focus

Chevron, Auer, and Now Voight Deference?

On November 20, 2020, the Eighth Circuit Court of Appeals jumped headlong into the Chevron, and Auer deference realm.  The issue: can a Clean Air Act permittee rely on a state agency’s prevention of significant deterioration (PSD) determination?  And should a Court “defer” to the state agency’s determination to assist in the interpretation of an “ambiguous” environmental program requirement?  Voight v. Coyote Creek Mining Company (No. 18-2705, 8th Circuit Court of Appeals).

Inadequate NEPA Climate Change Analysis Prevents Oil and Gas Leasing in Wyoming

Judge Contreras’s Second Opinion Blasts the Bureau of Land Management for Sloppy Environmental Analysis

Last year, in a 60-page opinion issued in March 2019, U.S. District Judge Rudolph Contreras stopped the Bureau of Land Management (BLM) from leasing oil and gas on over 500 square miles of federal lands in Wyoming.  He began his opinion by stating:  “Climate change, and humanity’s ability to combat it, are increasingly prominent topics of public discourse. This case concerns the attention the government must give climate change when taking action that may increase its effects.”

OSHA Provides Insight Into COVID-19 Enforcement Priorities

Despite widespread commentary regarding the lack of COVID-specific regulatory rules in the workplace, the Occupational Safety and Health Administration (OSHA) continues to cite employers for a wide variety of health and safety violations arising from COVID-related investigations.  On November 6, 2020, OSHA issued guidance summarizing which safety standards the federal agency most frequently cites during COVID-related inspections: Respiratory Protection, Recording and Reporting Occupational Injuries and Illnesses, Personal Protective Equipment (PPE), and the General Duty Clause.

Nebraska Bankruptcy Court Holds Chapter 7 Debtors Not Individually Liable for Damages from Their Alleged Fraud in Conduct of Their Non-Debtor Business

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In Lund-Ross Constructors, Inc. v. Buchanan (In re Buchanan), the Bankruptcy Court for the District of Nebraska (Judge Saladino) denied an objection to discharge on the basis that tort claims against a non-debtor business were not enforceable against the husband-and-wife chapter 7 debtors who owned the business. The opinion warrants careful consideration by counsel representing property owners and general contractors in Nebraska, because it suggests Nebraska law limits the liability of corporate principals, even when they participate actively in allegedly actionable misrepresentations.

COVID-19 Resources

As COVID-19 continues to spread, so does its impact on employers, health care providers, financial institutions, real estate entities, fiduciaries, and small businesses. Spencer Fane has created a COVID-19 Resources page to serve as a resource to all individuals and entities grappling with the consequences of this ordeal, and will be updated as new developments take place.

Federal Court Affirms OSHA’s Broad Interpretation of its Process Safety Management Standard

Chemical plant owners and operators need to carefully review a recent federal appellate court decision that could substantially expand process safety management (PSM) considerations and related chemical safety and accidental release regulatory requirements under EPA’s Risk Management Plan (RMP) program.

2021 Inflation Adjustments

Following announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2021.  The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2021 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of the 2021 limits card is available upon request.  To obtain one or more copies, please contact any member of our Employee Benefits Group.  You also can contact the Spencer Fane Marketing Department at marketing@spencerfane.com.

Iowa Bankruptcy Court Exercises Personal Jurisdiction over Canadian Law Firm Based on Firm’s Representation of Canadian Client with Iowa Subsidiary

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In Veroblue Farms USA, Inc. v. Cassels Brock & Blackwell, LLP (In re Veroblue Farms USA, Inc.), the Bankruptcy Court for the Northern District of Iowa (Judge Collins) held the Court could properly exercise personal jurisdiction over a Canadian law firm in an adversary complaint for turnover.  The law firm argued exercise of jurisdiction was improper because it had no pertinent contacts with Iowa; rather, the firm had represented a Canadian company from the firm’s offices in Canada.  The firm further argued that it did not give legal advice in Iowa or related to Iowa law.

EPA and Other Government Agencies Scrutinize COVID-19 Marketing and Product Claims

If your business sells or distributes products or devices by claiming that the products work against or kill COVID-19, beware that such claims are subject to regulatory oversight by a variety of governmental agencies, such as the Environmental Protection Agency, Federal Trade Commission, and the Food & Drug Administration. Unsuspecting companies in the sale and distribution of these products, such as disinfectants, sanitizers, or cleaners,[1] must ensure their labels and marketing claims satisfy regulatory requirements.

Eighth Circuit BAP Addresses Parens Patriae Standing and Laches in Context of Chapter 7

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In State of North Dakota ex rel. Stenehjem v. Bala (In re Racing Services, Inc.) the Eighth Circuit BAP (Judges Dow, Nail and Shodeen) concluded the North Dakota Attorney General lacked standing to file a chapter 7 proof of claim on behalf of eligible nonprofit organizations, but that its tardy filing of a proof of an assigned claim was not barred by laches or subject to disallowance under section 502(b)(1).

DOL Proposes New Rule to Better Define Independent Contractor Status

On September 22, 2020, the Department of Labor (“DOL”) issued proposed regulations that are intended to clarify the standard for determining whether a worker qualifies as an independent contractor for Fair Labor Standards Act (“FLSA”) purposes. See RIN 1235-AA34 (Independent Contractor Status under the Fair Labor Standards Act).

New California Medical Waste Law Impacts Out-of-State Manufacturers and Distributors with Costly Compliance Mandates

In late 2018, California passed a new law that will, in the near future, present sweeping changes to the pharmaceutical industry and certain medical device manufacturers.  The new law amends the existing California Integrated Waste Management Act and is expected to be a boom for medical waste disposal companies who stand to obtain significantly more business.  While the law was signed by the California Governor nearly two years ago, the regulations will go into effect in a few months (by January 1, 2021).  The original bill, dubbed the “California Sharps and Drug Takeback Bill”, requires a manufacturer of covered drugs or home-generated sharps waste, to offer safe disposal methods for their customers’ used and unused products.  The law has potentially sweeping affect because it encompasses all covered drugs and home generated sharps waste that are sold or offered for sale in California.

Eighth Circuit Holds Federal Law Controls Award of Pre-Judgment Interest on Judgments for the Value of Transfers Avoided under Section 544(b)

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In Kelley v. Boosalis (In re Petters Company, Inc.) and Kelley v. Kanios (In re Petters Company, Inc.),[1] the Eighth Circuit (Judges Loken and Benton, with Judge Kelly dissenting in part and concurring in part) held that federal law, not state law, determines whether pre-judgment interest may be awarded on judgments for the value of transfers avoided under section 544(b).  In so doing, the Court split with the Ninth Circuit and the First Circuit BAP.  The Court also interpreted the application of Minnesota’s Uniform Fraudulent Transfer Act (“MUFTA”) in the context of a Ponzi scheme.

EPA Penalties May No Longer Require Disclosure as SEC Amends SK-103

On August 26, 2020, the U.S. Securities and Exchange Commission (SEC) announced significant changes to the disclosure requirements for publicly traded companies under Regulation S-K.  Businesses that receive monetary sanctions from the EPA and other governmental authorities involving violations of environmental laws will want to carefully review the new Item 103 Legal Proceedings rules as it may substantially alter disclosure obligations.

Filing for Spoliation Sanctions – Is it always worth it?

A recent order out of the District of Colorado provides a cautionary tale when it comes to filing motions requesting sanctions in response to alleged spoliation claims. It may not always be in your client’s best interests.

Plan Administration – A SECURE and CARES Act Reminder

The SECURE and CARES Acts provide a broad spectrum of required and optional changes that employers must evaluate with respect to retirement plan administration.  One impending change is the SECURE Act’s broader eligibility requirement for part-time employees in 401(k) plans, which becomes effective on January 1, 2021.  In addition, employers may be surprised to learn that some CARES Act distribution options were added to their plans automatically by their record keepers through a “default” process.   Thus, employers should review their plan’s administrative procedures to determine if (and how) changes under the SECURE Act and CARES Act were (and are being) implemented to ensure administrative compliance with the plan document.

 

Colorado’s Paid Sick Leave Law

On July 14, 2020, Governor Jared Polis signed the “Healthy Families and Workplaces Act” (“HFWA”). Last month, we discussed the emergency COVID-19 provisions here. The emergency provisions are effective from July 15 to December 31, 2020. In this Part 2, we will discuss the paid sick leave provisions of HFWA that go into effect January 1, 2021.

Ferrets, “Ipse Dixits,” and “Logical Fallacies”: Fifth Circuit Opinions Shine Light on Messy Citizen Suit Standing Precedents

Facility owners and operators with air permits will want to pay close attention to a recent Fifth Circuit ruling on a private citizen’s ability to seek penalties for/and defenses against alleged violations of the Clean Air Act.  Following a bench trial, an appeal, and another bench re-trial, this decade-old case has again gone up to the appeals court and had the trial court’s judgment vacated and remanded, this time to decide the Plaintiffs’ standing to bring the case in the first place and to judge the viability of two key affirmative defenses. Environment Texas Citizen Lobby, Inc. v. Exxon Mobil Corp., 66 F.Supp.3d 875 (S.D. Tex. 2014), vacated and remanded, 824 F.3d 507 (5th Cir. 2016), on remand, No. H-10-4969, 2017 WL 2331679 (S.D. Tex. Apr. 26, 2017), vacated and remanded, slip op. No. 17-20545, 2020 WL 4345337 (5th Cir. Jul. 29, 2020), as revised (Aug. 3, 2020).  According to the majority opinion, the panel gave both the lower court and the regulated community guidelines for when each CAA violation is “fairly traceable” to a plaintiff’s alleged injury to support standing under Article III of the U.S. Constitution. According to the concurrence, the Fifth Circuit’s standing precedents are “a mess” that are trending toward the unconstitutional elimination of “but-for” causation; a paradox that should be clarified by the full court en banc to stop a continuing loop of confusion.

What to Consider When Your Tenant Wants a Lease Modification

Landlords have several options to keep current tenants intact or reduce the financial ramifications if the tenant needs to step back from its current office footprint.

DOL-WHD Releases FLSA, FMLA, and FFCRA Guidance Relating to COVID-19 and Work From Home Issues

During the week of July 20th, the Wage and Hour Division of the Department of Labor published new guidance for employers, focusing on compliance under the Fair Labor Standards Act (“FLSA”) and the Family and Medical Leave Act (“FMLA”) in the midst of the pandemic (See FLSA Q&A, FMLA Q&A, and FFCRA Q&A).

$1,040,000 HIPAA Settlement for Stolen Unencrypted Laptop Breach — Why?

The United States Department of Health and Human Services reached an agreement with Lifespan Health System Affiliated Covered Entity (Lifespan ACE) in which Lifespan agreed to pay $1,040,000 and adopt a corrective action plan in the wake of its data breach that exposed over 20,431 patients’ protected health information. The breach occurred when an employee’s unencrypted laptop was stolen which contained electronic protected health information (ePHI) including: patients’ names, medical record numbers, demographic information, and medication information.

Eighth Circuit Weighs in on North Dakota Law in O&G Case

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In Slawson Exploration Co., Inc. v. Nine Point Energy, LLC (In re Triangle USA Petroleum Corp.), the Eighth Circuit (Judges Shepherd, Smith, Melloy) held that under North Dakota law, an O&G promote obligation does not run with the land, was not an equitable servitude, and was not a real property interest akin to an overriding royalty.  Slawson and the Debtor’s predecessor, TPC, were O&G production companies who teamed up to lease, develop and drill land in North Dakota.  Under the terms of their agreement (the “EDA”), either party that acquired an O&G leasehold in a specified area of North Dakota was required to offer the other an undivided interest at cost in the proportion specified in the EDA: 70% for Slawson and 30% for TPC.  TPC also agreed to pay “an additional 10% of its share of the drilling, completing, and equipping costs for each well in which TPC elect[ed] to participate” – the “Promote Obligation.”

OSHA Fines Healthcare Facilities for Improper Use of N95 Respirators

Employers beware, particularly those in healthcare sectors.  If you provide a NIOSH-approved N95 “respirator” to protect employees from COVID-19, there are a number of OSHA respiratory protection standards that must be followed in a comprehensive Respiratory Protection Program.  The Department of Labor OSHA’s July 21, 2020, national press release makes clear that OSHA will seek the maximum possible penalties for serious violations against companies that do not fully satisfy the respiratory protection standards.

Colorado Passes Paid Sick Leave and Whistleblower Laws

On July 14, 2020, Governor Jared Polis signed the “Healthy Families and Workplaces Act” (“HFWA”).  Several provisions of this law are effective immediately (July 15, 2020), and require paid sick leave specifically for COVID-19 related issues.  Starting January 1, 2021, the HFWA will require that most employers provide their employees with up to 48 hours of paid sick leave per year.  This article is Part 1 of a two-part series, and focuses on the immediately effective laws relating to COVID-19. We will discuss the details of the general paid sick leave in Part 2.  Governor Polis also recently signed the Public Health Emergency Whistleblower Law (“PHEW”), effective July 11, 2020, which we will discuss briefly below.

Guidance for Arizona Banks on the Small Business Reorganization Act of 2019

As a result of the coronavirus pandemic, Arizona banks and their borrowers are facing economic uncertainty. Bankruptcy filings are on the rise, and many eligible borrowers are opting to file under the Small Business Reorganization Act of 2019 (SBRA), a new fast-track bankruptcy option that alters lenders’ and other creditors’ rights in certain Chapter 11 bankruptcy cases.

Supreme Court Expands “Ministerial Exception” to Employment Discrimination Laws

On July 8, 2020, the Supreme Court expanded the scope of the “ministerial exception” to employment discrimination statutes. This exception is grounded in the First Amendment’s protections for religious institutions. In Our Lady of Guadalupe School v. Morrissey-Berru, the Court considered two cases involving elementary school teachers in Catholic schools who alleged that they were terminated in violation of federal employment discrimination law. Seven justices joined the majority opinion of the Court, holding that “When a school with a religious mission entrusts a teacher with the responsibility of educating and forming students in the faith, judicial intervention into disputes between the school and the teacher threatens the school’s independence in a way that the First Amendment does not allow.” A link to the full decision of the Court can be found here.

Eighth Circuit Bankruptcy Monitor: Objection to IRS Proof of Claim

Objection to IRS Proof of Claim, Filed Before Amendment to Rule 3007 Went Into Effect, Was Properly Mailed Only to IRS

In Nicolaus v. USA (In re Nicolaus), the Eighth Circuit (Judges Stras, Benton and Gras) held that a debtor’s objection to a proof of claim filed by the IRS may properly be served by mail to the IRS, rather than by service on the Attorney General and the local United States Attorney.  The Eighth Circuit’s holding is contrary to that of other courts, including the First Circuit BAP.

IRS Creates New “Window” to Suspend 401(k) Safe-Harbor Contributions for 2020

The IRS has granted additional, albeit temporary, COVID-19-related relief for sponsors of “safe-harbor” 401(k) and 403(b) plans (i.e., plans that are exempt from one or both of the ADP and ACP nondiscrimination tests).  Notice 2020-52, which was issued on June 29, 2020, provides temporary relief from the current requirements for mid-year amendments to such plans, and provides additional clarification regarding mid-year amendments to safe-harbor plans that only affect highly compensated employees.   This guidance is welcome relief for plan sponsors who feel the financial need to reduce or suspend employer contributions under these plans, but who may not be able to satisfy the current regulatory requirements for mid-year amendments.

U.S. Supreme Court Reinstates Wetland Permitting Under Nationwide Permit 12

In a one paragraph, unsigned order issued July 6, 2020, the U.S. Supreme Court reinstated most uses of the U.S. Army Corps of Engineers’ Nationwide Permit 12 for pipeline and utility trenching and construction, dredge and fill, and maintenance, inspection, and repair activities in or adjacent to wetlands and other waters of the United States. The Court’s order carves out and continues to disallow use of NWP 12 for the Keystone XL pipeline (the actual target of plaintiffs’ lawsuit). For our earlier alerts on this fast-moving litigation see here, and here, and here.

EPA and OSHA Continue Aggressive Enforcement of Accidental Chemical Releases

Accidental chemical releases in the workplace and offsite into the environment continue to be a high-priority enforcement area for both the U.S. Environmental Protection Agency and the U.S. Department of Labor’s OSHA, including releases of anhydrous ammonia and other toxic and flammable substances under the agencies’ RMP and PSM programs.

Colorado Judge Enjoins Implementation of the WOTUS Rule in Colorado

California Judge Denies Nationwide Injunction

This is an updated version of a previous blog to include recent developments. 

Something to do during lock-down: track the twists and turns of the multiple court challenges to the Waters of the U.S. (WOTUS) rule; a fascinating pass-time.

SCOTUS Holds That Title VII Prohibits Discrimination Because of Sexual Orientation and/or Transgender Status

On June 15, 2020, the Supreme Court held that Title VII’s prohibition of “sex” discrimination also prohibits discrimination because of sexual orientation and transgender status. See Bostock v. Clayton County, Case No. 17-1618 (Slip Opinion). Therefore, “an employer who fires an individual merely for being gay or transgender violates Title VII.” Id. at pg. 1.

Partial Vacation of Nationwide Permit 12 Stands as Ninth Circuit Denies Emergency Stay

The partial vacation of Nationwide Permit 12 (NWP 12) will remain in place for now as the Ninth Circuit today denied emergency motions for a partial stay pending appeal. In its May 28, 2020, Order (available here) the Ninth Circuit held that appellants “have not demonstrated a sufficient likelihood of success on the merits and probability of irreparable harm to warrant a stay pending appeal.”

Colorado Joins the Surge of WOTUS Lawsuits and Proposes State Legislation to Institute a State-Run 404 Program

This is an updated version of a previous blog to include recent developments. 

On May 22, 2020, Colorado joined the surge of lawsuits challenging the Waters of the United States (“WOTUS”) rule issued in April by the Trump administration.  See the link below to the Colorado lawsuit filed in federal court in Colorado as well as links to other similar lawsuits in other jurisdictions.

DOL Finalizes Electronic Disclosure Safe Harbor for Retirement Plans

The Department of Labor (DOL) has now finalized its October 2019 proposal (described in our previous blog) to create a new “safe harbor” for the electronic distribution of ERISA-required notices and disclosures.  The final regulation establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to participants and beneficiaries, rather than providing paper documents through mail or hand delivery.  The new safe harbor permits electronic delivery by either (i) posting covered documents on the plan sponsor’s website, if appropriate notification of internet availability is furnished to the participant’s electronic address, or (ii) sending the documents directly to the participant’s electronic address, with the covered document either in the body of the e-mail or as an attachment thereto.  Although the final rule is not effective until 60 days after its publication in the Federal Register, the DOL has indicated that it will not take any enforcement action against a plan administrator that relies on the safe harbor before that date.

OSHA Refines Stance on COVID-19 Recordkeeping and Enforcement

On May 19, OSHA issued two enforcement memos regarding COVID-19.  The first of these memos revised OSHA’s requirements for employers as they determine whether individual cases of COVID-19 are work-related.  The second enforcement memorandum OSHA issued on May 19 revised OSHA’s policy for handling COVID-19-related complaints, referrals, and severe illness reports.  These two memos are summarized below.

Nationwide Permit 12 Restored for Most Non-Pipeline Uses by Trial Court, While the Ninth Circuit Expedites Briefing on Emergency Motion for Stay

This week the U.S. District Court for the District of Montana restored use of the U.S. Army Corps of Engineers’ Nationwide Permit 12 for some utility line construction and maintenance activities (primarily for non-pipeline projects) by restricting the scope of its earlier vacation of the permit, while the Ninth Circuit ruled on an initial round of briefings in the government’s request for an emergency stay.  The District Court’s April 15 decision has been the source of significant disruption because it not only blocked application of the popular nationwide permit to the Keystone XL pipeline (the subject of the litigation), but also barred any and all other uses of the permit.  See our earlier alert here.

Eighth Circuit BAP Addresses What Is Property of the Estate When There Are Multiple Bankruptcies

Eighth Circuit Bankruptcy Monitor

In Boisaubin v. Blackwell (In re Boisaubin), the Eighth Circuit BAP (Judges Sanberg, Nail, Saladino) affirmed the Bankruptcy Court’s (Judge Rendlen) orders approving a compromise and denying motions to file documents under seal.  In so doing, the Court addressed whether an asset that was estate property in a prior case by the debtor, but which was never scheduled, becomes estate property in a later case by the same debtor once the first case is reopened and the asset abandoned. The Court answered that the asset becomes part of the second bankruptcy estate even though the asset itself was not the property of the debtor at the time the second case was filed.

Re-Opening Medical Practices Following COVID-19 Outbreak

Over the last couple of weeks, a great deal has been written about the steps hospitals should take as they begin to provide elective procedures again as the COVID-19 outbreak slowly subsides in some parts of the US.  Lurking in the shadow of this issue is the question of what steps medical practices and outpatient clinics (“Medical Practices”) should take as they begin the process of returning to normal operations.

IRS Provides More COVID-19 Relief: This Time for Cafeteria Plans

As part of its ongoing response to the coronavirus (COVID-19) outbreak, the IRS has released new guidance (Notice 2020-29) providing increased flexibility with respect to mid-year election changes under Section 125 cafeteria plans during the 2020 calendar year. The Notice also provides increased flexibility with respect to grace periods that will allow participants with unused amounts in their health or dependent care flexible spending accounts (FSAs) to apply those amounts to expenses incurred through December 31, 2020. Generally, employers may adopt the changes immediately (in some cases retroactive to January 1, 2020), so long as the plan is amended by December 31, 2021.

Deadline Approaching Quickly for Schools to Update Title IX Policies

The Department of Education released the long awaited Title IX regulations focusing on sexual misconduct on May 6.  The regulations were initially proposed in November, 2018.  It is the first time that the Department has issued regulations dealing with sexual harassment or sexual assault.  Previously, the Department has issued Dear Colleague letters setting forth guidance to covered entities.

Retroactive Change in Distribution Methodology for Provider Relief Funds May Trigger Refunds

As I am sure you know, the U.S. Department of Health and Human Services (HHS) began distributing approximately $50 billion in Provider Relief Funds provided under the CARES Act between April 10 and April 17.  The initial distribution of Provider Relief Funds (consisting of approximately $30 billion) was distributed among healthcare providers based on their “proportionate share of Medicare fee-for-service reimbursement for 2019”.  For example, a provider with $15 million of Medicare FFS revenue in 2019 and $22 million in net patient revenue for 2018 would have received approximately $930,000 of Provider Relief Funds in the initial distribution:  ($15,000,000/$484,000,000,000 (Total Medicare FFS Revenue for 2019) x $30,000,000,000).

Extended Group Health Plan Deadlines Create Risks for Employers

Deadline relief afforded by a new DOL and IRS Joint Notice during the COVID-19 national emergency significantly changes the administration of both self-funded and fully insured group health plans. Some of the extended deadlines are already causing confusion and increasing compliance risks for employers.

Eighth Circuit Affirms Environmental Claims Against Peabody Barred By Confirmed Plan

EIGHTH CIRCUIT BANKRUPTCY MONITOR

In County of San Mateo, California v. Peabody Energy Corp. (In re Peabody Energy Corp.), the Eighth Circuit (Judges Arnold, Gruender and Shepherd) agreed that the Bankruptcy Court (Judge Schermer) did not abuse its discretion when it held that litigation against Peabody by various California municipalities was barred by the terms of Peabody’s confirmed chapter 11 plan of reorganization.  In so doing, the Court placed particular weight on the presumed intent of the plan drafters in defining exceptions from discharge – a rule of interpretation that may prove significant.

IRS Posts Initial Guidance Re: Coronavirus-Related Loans and Distributions under the CARES Act

On May 4, 2020, the IRS posted 14 Questions and Answers (Q&As) on its website regarding the special retirement plan distribution options and loan provisions made available to certain qualified participants under the Coronavirus Aid, Relief, and Economic Security Act (hereinafter, the “CARES Act”).  These Q&As answer many, but not all, of the questions that plan sponsors and third-party administrators have been grappling with since the CARES Act was enacted on March 27, 2020.  Perhaps most importantly, the Q&As confirm that each of the distribution and loan provisions are optional for employers to adopt (or not adopt).  They also indicate that the IRS intends to issue formal guidance regarding the CARES Act distribution and loan provisions in the near future, and that it anticipates that the guidance will generally apply the principles set forth in its prior guidance (Notice 2005-92) regarding the Katrina Emergency Tax Relief Act of 2005 (“KETRA”).

WOTUS Lawsuits Surge

On May 1, 2020 in the Northern District of California, 17 States, the District of Columbia and New York City joined the menagerie suing to prevent implementation of the “waters of the United States” (“WOTUS”) rule.  The Plaintiffs include the states of California, New York, Connecticut, Illinois, Maine, Maryland, Michigan, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Washington and Wisconsin, the Commonwealths of Massachusetts and Virginia, the North Carolina Department of Environmental Quality, the District of Columbia, and the City of New York.

LLC Members Equitably Estopped From Claiming Ownership of LLC Property

Eighth Circuit Bankruptcy Monitor

In Richards v. Rabo Agrifinance, LLC (In re Kip and Andrea Richards Family Farm & Ranch, LLC), the Eighth Circuit BAP (Judges Schermer, Shodeen and Sandberg) affirmed the bankruptcy court’s determination that members of a debtor LLC were equitably estopped from claiming ownership of LLC property.

CARES Act Offers New Options for Cafeteria Plan Sponsors

A frequently overlooked portion of the CARES Act offers employers the ability to give their employees some immediate – and cost-free – financial assistance.  The Act opens the door for employees to use pre-tax dollars to purchase over-the-counter drugs and menstrual care products.  Employers will need to modify health FSAs, HSAs, and HRAs to take advantage of this relief.

Court May Exercise “Related To” Jurisdiction Over Adversary Complaint By A Creditor Against a Third Party

Eighth Circuit Bankruptcy Monitor

Court May Exercise “Related To” Jurisdiction Over Adversary Complaint by a Creditor Against a Third Party; Orders Transfer of Action to State Court Although Action Originally Filed in Federal Court

In Bushman Custom Farming, LLC v. Stillmunkes (In re Stillmunkes), Bankr. N.D. Iowa, 19-01011, d/e 16, April 30, 2020, Judge Thad Collins found the Court had “related to” subject matter jurisdiction under 28 U.S.C. § 157(b)(3) to entertain a non-core adversary proceeding between a creditor and a third party. The Court elected to abstain and ordered the action transferred to an Iowa state court.

DOL Disaster Relief Notice Extends Deadlines, Enables COBRA Gamesmanship

The Department of Labor’s Employee Benefits Security Administration issued guidance on April 28, 2020, providing temporary, coronavirus-related relief from many deadlines and requirements under ERISA.  Notably, the guidance relaxes the standards for employers to provide notices electronically, and affords significant latitude to COBRA qualified beneficiaries for electing, and paying for, COBRA continuation coverage.

Chapter 12 Debtor May Require Turnover of Withheld Pre-Petition Taxes Despite Section 553(a)

EIGHTH CIRCUIT BANKRUPTCY MONITOR

Judge Thad Collins of Bankr. N.D. Iowa held, as a matter of first impression, that “§ 1232(a) allows family farmers who have capital gains tax debt under Chapter 12 process to require taxing entities to issue a refund of withheld income taxes to the bankruptcy estate.”

Summary of CISA Guidance on Essential Critical Infrastructure Workforce 3.0

On April 17, 2020, the Cybersecurity and Infrastructure Security Agency (CISA) released version 3.0 of its guidance to help state and local jurisdictions, decision makers in communities and jurisdictions and the private sector across the country to manage and identify their essential workforce while responding to COVID-19. Original guidance was released on March 19, 2020 and version 2.0 was subsequently released on March 28, 2020. The reason for publishing Version 3.0 of the CISA guidance was to assist local decision makers in balancing public health and safety with the need to maintain critical infrastructure in their communities.

Landowners Can Seek a Cleaner Cleanup in State Court

US Supreme Court Says Superfund Statute Allows Landowners to Seek Additional Remediation in State Court, but Delays Additional Work

On April 20, 2020, the United States Supreme Court issued its long-awaited decision allowing 98 private landowners in Montana to pursue a restoration damages claim against Atlantic Richfield Co. (as successor to the Anaconda Copper Mining Co.) based on Montana common law nuisance, trespass, and strict liability claims. Atlantic Richfield Co. v. Christian, et al, slip op., 590 U.S. ___ (April 20, 2020). After giving with one hand however, Chief Justice Roberts (writing for the Court) took with the other, and held that on remand, if the landowners persuade a Montana jury of their entitlement to restoration damages, absent EPA’s consent, they still may not use that right until after EPA’s approved cleanup is completed and the site is delisted from the NPL.

Scope of Clean Water Act Jurisdiction Set to Change

On April 21, 2020, the U.S. Army Corps of Engineers (“Corps”) and the Environmental Protection Agency published the finalized Navigable Waters Protection Rule in the Federal Register, ushering in significant changes to the definition of Waters of the United States (“WOTUS”), those waters federally regulated under the Clean Water Act.  The rule affects multiple Clean Water Act programs, including Section 404 (wetlands), Section 402 (end-of-the-pipe discharges), and Section 311 (oil and hazardous substance spills).  The rule is available here, and an EPA fact sheet regarding the rule is available here.  For more background information, our latest article regarding the WOTUS saga is available here

Is Your Hospital Ready to Re-Open for Elective Medical Services?

On April 19, 2020, the Centers for Medicare and Medicaid Services (“CMS”) provided its initial guidance to hospitals and other healthcare facilities (collectively, “Hospitals”) as they begin to consider the timing for re-commencing normal operations as the COVID-19 outbreak begins to subside in some parts of the United States (the “Re-Opening Recommendations”).[1]  In a sense, the Re-Opening Recommendations are the bookend to the guidance CMS provided on March 18, 2020 recommending that Hospitals discontinue the provision of non-emergent and elective medical services and treatments during the COVID-19 outbreak.[2]  In each case, the guidance provided by CMS is neither legally mandated nor enforceable.  Instead, the guidance merely provides a framework or frame of reference for use by Hospitals as they consider these decisions.

Federal Court Halts Wetland Permitting – Nationwide Permit 12 (Utility Activities)

Pipeline companies, utilities, engineers, builders and land developers, and other construction companies that rely on Nationwide Permit (NWP) 12 for utility line and trenching activities in and around potential wetland areas will need to carefully re-evaluate their ability to conduct work under this general permitting tool.  This is because on April 15, 2020, a federal district court vacated NWP 12 and determined that the U.S. Army Corps of Engineers (USACE) had not adequately considered impacts in issuing the 2017 permit under the federal Endangered Species Act.  As a result of this court ruling, pipeline and utility infrastructure projects that rely on NWP 12 may be impacted.

OSHA Sends Mixed Signals on Enforcement Related to COVID-19 and Employer Obligations

Over the past week, OSHA has issued three separate enforcement-related guidance memos to its regional offices and field staff regarding how and when to bring enforcement actions against employers for failing to protect worker health and safety amidst the COVID-19 pandemic. The first guidance covers workplace reporting and recording of injury and illnesses associated with exposure to COVID-19, while the other two OSHA guidance documents provide a roadmap to employers on how the agency will enforce violations of the OSH Act.

Public Health and Social Services Emergency Fund Payments

Many healthcare providers received an unanticipated cash infusion on or around April 10, 2020 (“Emergency Fund Payment”).  Accompanying the payments was a list of terms and conditions attached to the funds.  The U.S. Department of Health and Human Services (HHS) has stated that forms and additional information will be forthcoming; but in the meantime, the only available guidance is a letter to providers and the list of terms and conditions.

Summary of Recent Agency Activity on Employment-Related COVID-19 Issues

Last week (April 4-12), several federal agencies issued updated guidance for employers on issues relating to COVID-19, including:

EPA Issues Interim Guidance for Managing COVID-19 Impacts at Superfund, RCRA, and Other Remediation Projects

Following on the March 19 internal memorandum from the Office of Land and Emergency Management (available here), and the March 26 COVID-19 Enforcement Discretion Policy from the Office of Enforcement and Compliance Assurance (see here for the Policy and Spencer Fane’s earlier alert), EPA today (April 10) issued guidance on field decisions for parties managing cleanups under CERCLA, RCRA, and other remediation programs. EPA’s interim guidance is available here.

State Disaster Management Plans Impact Hospital Response to COVID-19 Outbreak

One of the most heavily-debated legal and ethical issues to arise during the current COVID-19 outbreak is what methodology a hospital should use to allocate ventilators when the number of patients who need a ventilator exceeds the hospital’s supply of ventilators.  Even more heavily discussed is whether a hospital should disconnect a patient from a ventilator against the wishes of the patient and his/her family in order to use that ventilator for another patient with a statistically greater chance of survival.

EEOC Updates COVID-19 Guidance

On April 9, the Equal Employment Opportunity Commission (“EEOC”) updated its guidance for employers entitled “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” found here. Previously issued guidance explained that employers may, under pandemic conditions, ask employees about whether they are experiencing certain symptoms. The EEOC further stated that employers may also implement other measures to protect against spread of COVID-19 due to the novel coronavirus in the workplace. The guidance further noted that if employers do receive health information from employees, the information must be maintained confidentially, and consistent with other requirements under the Americans with Disabilities Act (the “ADA”).

The CARES Act and Substance Use Disorder Records: Confidentiality Updates

Section 3221 of the CARES Act, signed into law on March 27, 2020, sets the stage for HHS to make significant changes to 42 C.F.R. Part 2, governing the confidentiality of Substance Use Disorder (“SUD”) records. Under the Act, HHS has 12 months to work with appropriate Federal agencies to make revisions to 42 C.F.R. Part 2 consistent with Section 3221’s mandates.

When a Phase I ESA is Not Enough to Claim the Superfund BFPP Defense

On March 30, 2020, the federal district court for the Southern District of Indiana weighed in on what it really takes for a property owner to claim the bona fide prospective purchaser (BFPP) defense to Superfund liability based on a Phase I Environmental Site Assessment (ESA). And in so doing, the court gave additional support to those of us who pay attention to not just whether a Phase I ESA report does or does not find a Recognized Environmental Condition (REC) at a property, but also when and how the environmental professional (EP) reached his or her conclusions.

Understanding the Cyber and Privacy Risks Of Zoom and Tips For Using It More Securely

By now everyone has now heard of — and likely used — Zoom for staying connected during the COVID-19 pandemic. In what may have been a brilliant strategy to gain market share during adverse times, Zoom offered its videoconferencing service for free to schools, organizations, businesses, and individuals as a means of staying connected while the world is exercising social distancing and it seems as if everyone is now using Zoom.

Summary of Tax Provisions of the CARES ACT Passed on March 27, 2020

Below is a summary of the individual and business tax provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, signed by President Trump on March 27, 2020. For provisions relating to retirement plans, please click here for a summary by Spencer Fane’s Employee Benefits Group.

Title Insurance Issues Relating to COVID-19: Lender Recommendations

This memorandum is in regard to some of the changes we are seeing in the title insurance industry due to COVID-19. While the issues and impact may vary slightly by county and by title company, this memorandum addresses the following three (3) recurring concerns:

  • Delays in recording and delay affidavits;
  • The requirement of a gap indemnity agreement to be signed at closing; and
  • Exceptions to title related to COVID-19.

Prohibition on Beneficiary Inducements Hinders Rural Hospital Efforts to Aid Communities During COVID-19 Outbreak

During times of national or local crisis, people often look to the pillars of their communities, local employers, charities and other publicly-supported institutions, to provide much needed resources and stability.  In many rural communities, the local hospital fits into all three categories being one of the largest (if not they largest) local employer, charity and publicly-supported institution in the community (other than the local government).  As a result, people often look to hospitals during times of crisis, not just for healthcare services but also for the other resources needed in their lives (e.g., food, housing, financial assistance, etc.).

It’s Time to Establish (or Re-Constitute) an Ethics Committee

With the potential of scarce resources resulting from the COVID-19 virus, rural hospitals should consider taking immediate action to establish or reconstitute a hospital ethics committee. Although relatively common in large urban hospitals, in our experience ethics committees are relatively rare in rural hospitals. In rural settings, “typical” ethics issues such as end-of-life decisions are often resolved through informal interactions among patients, families, physicians, and administration. However, the COVID-19 pandemic is likely to (if it has not already) raise not-so-typical issues for hospitals that will require a more structured approach. It is likely that hospitals will face issues never before considered about how to ethically apportion scarce resources such as masks, gowns, respirators, ICU beds, and ventilators.

Employee Benefits in the Age of COVID-19: Brief Answers to Some Common Health Plan Questions

As we are all now intimately aware, the coronavirus pandemic has changed the nature of the workplace, and all of the benefits, rights, and responsibilities arising out of employment.  We are operating under a new set of rules, and those rules are changing daily.  Employers’ efforts to manage their workforce in order to maintain fiscal viability while protecting the health of employees also affect benefits.  The cascading effect of these factors raises many thorny benefits questions.  We will summarize – and attempt to answer – a few of those questions here (based on the legal landscape as of March 31, 2020).

“CARES” Act and Defined Benefit Plans

The CARES Act signed by President Trump on March 27, 2020, includes relief for defined contribution plans, but defined benefit plans also received some relief.  In addition, the IRS issued guidance that includes an extension for employers to adopt a pre-approved defined benefit plan.  And, employers should remember their option to decrease the age at which employees may request an in-service withdrawal from defined benefit plans.

New Blanket Waivers of the Stark Law During COVID-19 Outbreak

On March 30, 2020, Alex M. Azar II, the Secretary of the Department of Health and Human Services, under the authority given to him under Section 1135(b) of the Social Security Act (42 U.S.C. §1320b-5)[1], issued a series of waivers of the Stark Law (42 U.S.C. §1395nn).[2] Unlike the case-by-case waivers of the Stark Law that Secretary Azar previously gave the Centers for Medicare and Medicaid Services (“CMS”) authority to issue to individual designated health services providers based on their specific request[3], the Stark Law waivers issued by the Secretary on March 30 apply to all designated health services providers.  As a result, these Stark Law waivers are referred to as blanket waivers.

Minnesota Pollution Control Agency Announces Regulatory Flexibility Amidst COVID-19 Impact

The Minnesota Pollution Control Agency (“MPCA”) has announced a process for regulated entities seeking regulatory flexibility that may have an unavoidable noncompliance situation that is directly due to an impact from the COVID-19 Peacetime Emergency, declared by Governor Walz in Emergency Executive Order 20-01.

Coronavirus Aid, Relief, and Economic Security Act: What Small Businesses and Lenders Need to Know

Summary

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) is the largest financial assistance legislation ever enacted, and was signed into law on March 27, 2020.  It allocates $2 trillion for businesses, individuals, federal agencies, and state and local governments, and was designed to distribute capital quickly and broadly.

COVID-19 Emergency Paid Sick Leave and Family Medical Leave: Updated Department of Labor FAQs

The Department of Labor (the “DOL”) issued FAQs regarding the Families First Coronavirus Response Act (the “FFCRA”) and has updated its FAQs multiple times by adding questions to the same document.  The FAQs can be found here. The most recent update occurred on March 28, 2020 and addressed many of employers’ questions that were initially left unanswered in the FFCRA and the initial FAQs.

“CARES” Act Requires Immediate Decisions by Retirement Plan Sponsors

A third round of relief from the coronavirus pandemic has made its way through the Senate and House and has been signed by President Trump. The Coronavirus Aid, Relief and Economic Security (or “CARES”) Act provides over $2 trillion in relief for businesses and individuals. It also offers new avenues for defined contribution retirement plan participants to withdraw funds from their accounts in order to pay COVID-19-related expenses, if their employer elects to open those avenues. Some of the largest 401(k) and 403(b) plan record keepers are forcing employers to make that choice on just a few days’ notice.

COVID-19 Emergency Paid Sick Leave and Family Medical Leave: An updated notice and more from Department of Labor

As of Friday, March 27, the Department of Labor has issued an updated notice on its website, as well as responses to additional questions about the Families First Coronavirus Response Act (the “Act”). The new notice can be found here: FFCRA Poster.[1]  The updated notice clarifies that employees may have a total of up to 12 weeks of leave, paid at 2/3 of pay, to care for a child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons.

Investment Adviser COVID-19 Reporting and Filing Exemption

In recognition of the challenges that SEC-registered investment advisers are facing as a result of COVID-19, the Securities and Exchange Commission issued an Order on March 25, 2020, that provides temporary exemptions from certain reporting and disclosure requirements under the Investment Advisers Act of 1940.  The relief applies to filing and delivery obligations due on or after March 13, 2020, through June 30, 2020.

COVID-19 Impacts on Environmental Issues in Kansas – KDHE Bureau of Environmental Remediation Issues Guidance

Consistent with Governor Kelly’s March 17, 2020, directive, the Kansas Department of Health and Environment (KDHE) offices are closed for the two weeks between March 23 and April 3, 2020, as part of the state’s response to COVID-19.  KDHE continues its essential functions and the Bureau of Environmental Remediation (BER) has provided several updates for the regulated community.  The agency has indicated it is uncertain that mail will be logged in daily and parties should expect some delay in communications. Electronic communications are preferred where possible.

Environmental Compliance Challenges Due to COVID-19 – EPA Announces Temporary Enforcement Policy in Response to Pandemic

Today the Environmental Protection Agency’s Enforcement and Compliance Assurance Program announced a temporary policy regarding EPA enforcement of environmental legal obligations during the COVID-19 pandemic.  The policy is available here and is retroactive to March 13, 2020.  EPA makes clear that the policy is temporary and the agency will give seven days’ notice before terminating the policy.

Federal and State Income Tax Filing and Payment Extensions Affecting Individuals In Response to COVID-19 Crisis

Updated: April 14, 2020

Federal and State Income Tax Filing and Payment Extensions Affecting Individuals In Response to COVID-19 Crisis

Federal, state, and local governments have extended income tax filing and payment deadlines in response to the COVID-19 crisis. The extensions which affect individuals (including entities from which individuals may receive distributions or Forms K-1) are summarized below. This summary does not include provisions applicable to employers.

Be Proactive and Prepared Regarding Existing Loans

Banks must be proactive and prepared to assist their borrowers in the uncertain times ahead.  Here are several recommendations as to the things your bank can be doing to be proactive and prepared with respect to your loan portfolio.

Missouri Department of Natural Resources Announces Flexibility in Response to COVID-19 Outbreak

At a Wednesday, March 25, conference Missouri Department of Natural Resources (MDNR) division director Ed Galbraith said MDNR will take a flexible approach to enforcing environmental requirements during the COVID-19 outbreak. Galbraith also said that MDNR has discontinued environmental inspections for the time being and that he understands EPA Region 7 has done so, as well.  MDNR is conducting certain field work, however.   

COVID-19 Emergency Paid Sick Leave and Family Medical Leave: Updates from Department of Labor

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Act”). We outlined the key provisions of this law here. Since the publication of our original article, the Department of Labor Wage and Hour Division, which will enforce the new law, has published updated guidance about the new law. The Department has now clarified that the law will officially take effect on April 1, 2020, and applies to leave taken between April 1, 2020 and December 31, 2020.  The new law also requires that employers post notice regarding the new law, and a model notice has been published. It can be found here.

Missouri, Kansas, Illinois, and Communities Issue COVID-19 Orders to Require Social Distancing and to Stay at Home (Sometimes)

Over the weekend and Monday morning, Missouri and the major local jurisdictions that comprise the St. Louis and Kansas City metropolitan areas issued emergency orders directing business and individual responses to the COVID-19 (coronavirus) outbreak by imposing social distancing requirements. Kansas had issued a statewide order on March 17, and Illinois had issued a statewide order on Friday, March 20.  Generally speaking, these orders close schools except for distance learning, ban activities inside bars and restaurants, ban social gatherings of more than 10 people, and encourage social distancing. The Illinois state order and many of the city and county orders require businesses and organizations to close their workplaces and workers to stay home unless they are deemed “essential” or qualify for another exemption.  Some businesses have been obtaining favorable determinations that they are “essential” from their local jurisdictions on a case-by-case basis.  Grounds for exemptions can include food manufacturing and processing, manufacturing and supply chain services for other essential businesses, construction, services to help businesses comply with laws, and many others.

COVID-19: Commercial Leasing – Landlord and Tenant Rights

As we navigate through choppy and sometimes uncharted waters during the coronavirus pandemic, commercial tenants and landlords are experiencing their own challenges. Many businesses are subject to governmental shutdown orders or restrictions on their ability to operate in the manner that was their normal before the pandemic. Some commercial tenants and landlords may be experiencing financial difficulties which impact their ability to pay rent or mortgage payments, respectively. Below are some issues that tenants and landlords should be considering in the current economic climate. It must be noted that although specific options might vary across states/jurisdictions, these common themes should be considered.

COVID-19 Emergency Paid Sick Leave and Family Medical Leave: Key Provisions

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act, which goes into effect no later than April 2, 2020.  The new law imposes sweeping new emergency paid leave and expanded family medical leave requirements for employers nationwide.  Here is a summary of the key provisions affecting employers:

ERISA Fiduciaries Must Monitor Market Turbulence

The recent turmoil in the financial markets, while troubling for individual investors, also has potentially significant implications for ERISA fiduciaries. Individuals and committees who have investment authority over plan assets should reevaluate their portfolios in light of these developments.  Circumstances may not require a change in investment strategy, but ERISA’s prudence requirement requires fiduciaries to give immediate, thoughtful consideration to how those circumstances have changed.

Coronavirus is a Recordable Illness According to OSHA

According to recent OSHA guidance, COVID-19 (i.e., the coronavirus) is subject to the agency’s Injury and Illness Recordkeeping and Reporting Requirements at 29 CFR 1904.  This means that employers who are subject to the OSHA recordkeeping and reporting rules must include and log employee illnesses related to the coronavirus when an employee is infected on the job.  So while the common cold and Flu are exempt from work-related exposures, the coronavirus is not.

Missouri Department of Natural Resources Struggles to Secure Hazardous Waste Program Funding

The Missouri Department of Natural Resources faces a potential funding shortfall for Missouri’s Hazardous Waste Program following the General Assembly’s March 4 disapproval of a stopgap funding measure. On that date, the Missouri House of Representatives adopted Senate Concurrent Resolution 38 disapproving an increase in Hazardous Waste Program fees previously passed by the Missouri Hazardous Waste Management Commission. The Missouri Senate had passed SCR 38 on February 24. Accordingly, the fee increases will not take effect.

NLRB Issues Final Joint Employer Rule

The National Labor Relations Board (“NLRB”) has updated its joint employment rule (the “Final Rule”).  The Final Rule, which will be published in the February 26, 2020 Federal Register effectively overturns the joint-employer standard established in the 2015 Browning-Ferris Industries decision, which expanded the definition of joint employer based on indirect or limited control.  NLRB Chairman John Ring explained that “[t]his [F]inal [R]ule gives our joint-employer standard the clarity, stability, and predictability that is essential to any successful labor-management relationship and vital to our national economy.”    

Facilities Must Comply with New Release Reporting Rule for Accidental Releases Issued by Chemical Safety Board

Companies and facilities that experience an accidental release have a new regulation to consider for releases of regulated substances or extremely hazardous substances.  On February 21, 2020, the U.S. Chemical Safety and Hazard Investigation Board (CSB) issued its new final rule governing reporting of accidental releases subject to the Board’s investigatory jurisdiction.  The new rule requires the owner or operator of a stationary source to report to the CSB any accidental release resulting in a fatality, serious injury (defined as resulting in death or inpatient hospitalization), or substantial property damages (defined as damage of $1,000,000 or more).  A copy of the rule in today’s Federal Register is available here.

Estate Plan Updates Under the New SECURE Act

You may have heard that the federal appropriations bill enacted into law by Congress and the President in the final weeks of 2019 includes changes to the federal tax code that may affect your qualified retirement plan (such as a 401(k)) or IRA (sometimes called “retirement assets” in this letter).  Those changes, often referred to as the “SECURE Act,” may affect you during your lifetime, but may also affect the way in which those retirement assets may be distributed to your beneficiaries after your death.  Significantly, the SECURE Act may impact the timing and amount of tax paid by those beneficiaries on distributions of the retirement assets, as well as your ability to protect the retirement assets from the beneficiaries’ creditors, and ultimately may affect the value of those retirement assets in the hands of the beneficiaries.

SECURE ACT – Defined Benefit Plans

The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE” Act) has broad implications for retirement plans.   Although the Act’s primary focus is on defined contribution plans, several provisions of the Act and its sister legislation apply only to defined benefit plans.

This is the fourth in a series of articles describing key provisions of the legislation.  Our focus in this article is on the provisions applicable to defined benefit plans – in-service withdrawals, required minimum distributions, and nondiscrimination testing relief.

SECURE ACT – Provisions Unique to
403(b) Plans, Governmental 457(b) Plans, and IRAs

On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act).   The SECURE Act represents the most significant retirement legislation in more than a decade (i.e., since the Pension Protection Act of 2006).

This is the third in a series of articles describing key provisions of the SECURE Act.  Our focus in this article is on the provisions that are unique to Section 403(b) tax-sheltered annuity plans, governmental Section 457(b) plans, and Individual Retirement Accounts/Annuities (IRAs).  Many of the SECURE Act provisions that are broadly applicable to retirement plans (such as the increase in the age at which required minimum distributions must begin, and the new rules curtailing the ability to “stretch” post-death minimum distributions under defined contribution plans over the life expectancy of the participant’s designated beneficiary) also apply to 403(b) plans, 457(b) plans, and IRAs.  Because we addressed those provisions in the second article in this series, we will not do so again here.

Form CRS – A Reminder

The deadline by which SEC-registered investment advisers and SEC-registered broker-dealers are required to file Form CRS with the SEC and deliver the Form to retail investors is quickly approaching.  Firms registered with the SEC prior to June 30, 2020, must file the Form with the SEC no later than June 30, 2020.  In addition, firms are also required to deliver their Form CRS to new and prospective retail investors.  For retail investors who already have a brokerage or advisory account, Form CRS must be provided by July 30, 2020.

Spencer Fane LLP Victorious In Ninth Circuit Case Challenging Collection Letters For Time-Barred Debts

Josh Dickinson (Omaha) and Kersten Holzhueter (Kansas City) recently obtained a victory for a debt buyer in the Ninth Circuit Court of Appeals.  In Barry Stimpson v. Midland Funding, LLC, the plaintiff alleged that a letter seeking to collect on a time-barred debt violated the Fair Debt Collection Practices Act.  The letter offered a discount to resolve the debt and contained this language to explain that the debt could not be enforced in court: “The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau.”

DC Federal Court Limits Former OCR Guidance on Medical Record Fees

The DC Federal District Court issued an opinion in Ciox Health, LLC v. Azar, et al., Case No. 18-CV-00040 (D.D.C. January 23, 2020) that reverses portions of guidance issued by the Office for Civil Rights (“OCR”) in 2016 related to the fees that a healthcare provider may charge for medical records that are requested by a patient and directed to a third party.  The original HIPAA Privacy Rule included provisions that a “covered entity” (1) must provide patients the right to access his or her protected health information (“PHI”) within a designated record set and (2) could only charge a reasonable cost-based fee for such access. In 2009, the HITECH Act amended HIPAA to provide that a patient could request that the patient’s access to PHI maintained in an electronic health record (“EHR”) be directed to a third party.  In 2013, the Omnibus Rule further broadened the third party directive and allowed patients to make this third party directive for access to PHI contained in any format.  Lastly, in 2016, OCR issued guidance that applied the fee limitation from the original HIPAA Privacy Rule to situations in which the patient directs the PHI to a third party.

SECURE Act – Broad Implications for Retirement Plans

On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act). The SECURE Act amounts to the most significant retirement legislation in more than a decade.  Our focus in this article is on the legislation’s effect on retirement plans generally, including provisions broadly applicable to defined contribution, defined benefit, 401(k), 403(b), and certain 457(b) plans.

Waters of the United States (WOTUS) Revised Definition Significantly Reduces Waters Subject to Federal Jurisdiction

On January 23, 2020, the Environmental Protection Agency (EPA) and the Department of the Army (Corps) finalized anticipated revisions to the Navigable Waters Protection Rule defining the scope of waters subject to federal regulation under the Clean Water Act.  The revisions follow the dictates of President Trump’s February 28, 2017 Executive Order 13778: “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.”

SECURE Act Generates Changes and Opportunities for Retirement Plans

In the waning days of 2019, President Trump signed into law the most significant retirement legislation in more than a decade.  The Setting Every Community Up for Retirement Enhancement – or “SECURE” – Act includes far-reaching changes that affect qualified retirement plans, 403(b) and 457(b) plans, IRAs, and other employee benefits.  In a series of articles, we will describe key provisions of the Act.  Our first article provides an overview of the Act’s key provisions and their effective dates.  Some of the changes under the SECURE Act are effective immediately, while others are effective for plan or tax years beginning on or after January 1, 2020.  Although the Act generally provides sufficient time to amend plan documents, employers must modify certain aspects of plan administration (and potentially financial planning decisions) now to align with the SECURE Act’s more immediate requirements.

Proposal to Repeal Colorado’s Taxpayer Bill of Rights (“TABOR”) Heading to the Ballot in November 2020

The Second Trip to the Colorado Supreme Court

No other state has a provision in its constitution like the Colorado Taxpayer Bill of Rights (“TABOR”).  The TABOR measure amended Article X of the state’s constitution and restricts tax revenues and spending at all levels of government.  The provision prevents tax increases without voter approval and prohibits state and local government from spending revenues collected under existing tax rates without voter approval if revenues grow faster that the rate of inflation and population growth.  Tax revenues in excess of the TABOR limit must be refunded to taxpayers.  The impact of the provision has been significant.  Since 1992, tax authorities have refunded over $2 billion to the taxpayers.

Chemical Safety Board Proposes 4-Hour Release Reporting Rule

On December 11, the U.S. Chemical Safety and Hazard Investigation Board (CSB) proposed a rule requiring that companies swiftly provide the CSB notice of accidental chemical releases sufficient to trigger a CSB investigation, to help the CSB make deployment decisions and to more rapidly respond to release incidents.

New Ozone Classification Will Impact Permitting Along The Front Range in Colorado

New “Serious” Classification for Nonattainment For Ozone

On December 16, 2019, the U.S. Environmental Protection Agency (EPA) announced a final rule to reclassify the Denver Metro/North Front Range ozone nonattainment area from Moderate to Serious nonattainment under the Clean Air Act.  The area covered embraces all of Adams, Arapahoe, Boulder, Denver, Douglas, and Jefferson counties as well as the southern portions of Larimer and Weld counties.

Landmark Decision Re: Climate Change and Allegations of Securities Fraud

Trial Court Absolves ExxonMobil

On December 10, 2019, following twelve days of trial and testimony, Judge Barry R. Ostrager of the Supreme Court of the State of New York, New York County, denied the State of New York’s claims that ExxonMobil engaged in securities fraud by either violating the Martin Act or Executive Law  63(12).  New York had claimed that ExxonMobil failed to make proper public disclosures related to how ExxonMobil accounted for past, present and future climate change risks.

IRS Again Grants ACA-Reporting Relief (Plus a Limited Bonus)

In Notice 2019-63, the IRS has granted health insurers and large employers 30 more days to issue the appropriate 2019 ACA-reporting forms to their insureds and full-time employees.  Rather than January 31, 2020, these Forms 1095-B and 1095-C will now be due by March 2, 2020.  The IRS has also extended the “good-faith” standard for compliance with these reporting rules.  Finally, in view of the zeroing out of the penalty for failing to comply with the ACA’s individual mandate, insurers and large employers will now have an additional compliance option.

Fluctuating Laws: DOL Announces Proposed Fluctuating Workweek Regulations

On November 5, 2019, the Department of Labor (“DOL”) published a proposal to revise regulations governing the fluctuating workweek method of calculating overtime pay under the Fair Labor Standards Act (“FLSA”). This method of calculating overtime may apply if certain conditions are met. These conditions include that the employees paid under this method work fluctuating hours, and they and their employers agree that the employees are paid fixed salary for all hours worked plus an overtime premium. There are very specific requirements for utilizing this method, but utilizing the method in a compliant manner can be complicated due to the need to calculate the regular rate of pay for every week in which the employee works more than 40 hours. Additionally, some state laws prohibit use of this method.

Environmental Audit Privilege and Immunity Now Available to Oklahoma Facilities

The Oklahoma Environmental, Health and Safety Audit Privilege Act is now effective as of November 1, 2019, and available to manufacturers and industrial businesses  in Oklahoma that undertake voluntary environmental audits, such as those companies involved in aircraft manufacturing, chemicals, oil and gas processing, plastics, cement, food and meat processing, and paper products .  Oklahoma is the 30th state, by EPA’s count, to enact an audit program, providing privilege and enforcement benefits to parties that voluntarily undertake an environmental audit, disclose the findings and conduct corrective actions.

2020 Inflation Adjustments

Following announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need in order to administer their benefit plans for 2020.  The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2020 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of our 2020 limits card is available upon request.  To obtain one or more copies, please contact any member of our Employee Benefits Group.  You also can contact the Spencer Fane Marketing Department at 816-474-8100 or marketing@spencerfane.com.

OSHA Issues Enforcement Directives Targeting a Variety of Industry and Manufacturers

Effective October 1, 2019, Region VII OSHA (Kansas, Missouri, Nebraska, and Iowa) announced a combination of Regional Emphasis Programs, along with state-led local emphasis programs.

Department of Labor Proposes New Safe Harbor for Electronic Disclosures

The U.S. Department of Labor (DOL) has proposed a  new “safe harbor” rule to allow retirement plan disclosures to be posted online (assuming certain notice requirements are satisfied) to reduce printing and mailing expenses for plan sponsors and to make the disclosures more readily accessible and useful for plan participants.

Colorado Oil and Gas Health Risk Study

Short-term risks of exposure can include headaches, dizziness, and respiratory, skin and eye irritation

Building on an earlier assessment released in February 2017, the Colorado Department of Public Health and Environmental released a state-funded study on October 17, 2019 titled:  “Human Health Risk Assessment for Oil & Gas Operations in Colorado.”  A peer-reviewed article summarizing the study was published in the Journal of the Air and Waste Management Association.

Has Proposition 65 Gone Too Far? Warning Requirements for Food Products Challenged

Companies nationwide that sell foods containing the chemical acrylamide to California consumers may find their regulatory burden lightened in the future.  On October 7, 2019, the California Chamber of Commerce (CalChamber) filed suit against the California Attorney General in the Eastern District of California to prevent the state from enforcing Proposition 65 warning requirements for foods containing acrylamide.  CalChamber’s Complaint asks the court to declare that the Proposition 65 requirement of carcinogen warnings for foods containing acrylamide constitutes false and misleading compelled speech in violation of the First Amendment, arguing that acrylamide in food has not been shown to be a human carcinogen.  The Complaint also seeks an order prohibiting the State of California and private citizen enforcers from enforcing Proposition 65 warning requirements for foods containing acrylamide.

Citizens Sue to Prevent Colorado Oil and Gas Commission From Issuing Oil and Gas Permits

A Court Order Halting Agency Actions Would Prevent Any Oil and Gas Permitting for Months While the Commission Promulgates Revised Regulations  

 On October 8, 2019, a citizens group based in Broomfield, Colorado, filed suit in Denver District Court requesting a Court order for an immediate stay of all actions by the Colorado Oil and Gas Conservation Commission (“COGCC”) involving “permitting of any drilling, pooling, and spacing units until the COGCC rulemaking is completed.”

DOL Issues Opinion Letter on FMLA Leave and IEP Meetings

The U.S. Department of Labor/Wage and Hour Division has continued its practice of issuing opinion letters. It recently issued an opinion letter that addresses the question of whether an employee may take FMLA leave to attend a Committee on Special Education (“CSE”) meeting to discuss a child’s Individualized Education Program (“IEP”). See DOL Opinion Letter FMLA2019-2-A.

Agency Developments at the Department of Labor: The Fair Labor Standards Act

In the summer of 2019, the Department of Labor (“DOL”) made headlines when Secretary of Labor Alexander Acosta resigned. President Trump then nominated Eugene Scalia for the position, and Mr. Scalia was sworn in as Secretary of Labor on September 30. In recent months, the Senate also confirmed Cheryl Stanton as Administrator of the Wage and Hour Division.

OSHA Announces Change to Process of Prioritizing and Evaluating Inspections

On October 1, 2019, OSHA implemented a new OSHA Weighting System to guide its prioritization and evaluation of workplace safety inspections for fiscal year 2020. Under OSHA’s outgoing enforcement weighting system, initiated in fiscal year 2015, OSHA heavily based its prioritization and evaluation of inspections on the time taken to complete an inspection.

IRS Finalizes Hardship Distribution Rules

The IRS has issued final regulations modifying and clarifying the rules for in-service hardship distributions from 401(k) and 403(b) plans.  The final regulations are substantially similar to the proposed regulations issued in November of 2018, but they contain a few changes of which plan sponsors should be aware.

DOL Releases Final New Overtime Rules – Effective January 1, 2020

On September 24, 2019, the Department of Labor (“DOL”) issued the final rule (the “New OT Rules”) that updates and revises the regulations which govern the exemptions from minimum wage and overtime pay requirements under the Fair Labor Standards Act (“FLSA”). Employers should carefully review the New OT Rules and the explanatory commentary. See Final Rule Announcement. The New OT Rules are set to become effective on January 1, 2020.

Considering a “Split-Day Plan” to Minimize Overtime Liability? Proceed With Caution.

A recent Minnesota Supreme Court opinion demonstrates why employers should proceed with caution if they are considering whether to implement “split-day plans” or any other complicated pay practices that are seemingly authorized by the federal wage and hour laws. See In re Minnesota Living Assistance, Inc. d/b/a Baywood Home Care, Case No. A17-1821, 2019 WL 4456081 (Minn. 2019). Specifically, the Minnesota Supreme Court concluded that the employer was liable for $1.1 million dollars in back pay and liquidated damages because it violated the Minnesota Fair Labor Standards Act (“MFLSA”) by failing to pay employees overtime following implementation of a split-day plan.

Implementing Individual Arbitration Agreements Does Not Violate NLRA, Even If Done After Collective Action is Filed

As previously discussed on Spencer Fane Human Resource Solutions, an employer can lawfully require its employees to sign individual arbitration agreements with class action waivers as a term and condition of their employment. See Employee Class Action Waivers Held Enforceable (May 22, 2018).  However, even if individual arbitration agreements with class action waivers are not, as a general rule, unlawful under the National Labor Relations Act (“NLRA”), can an employer require its employees to sign such an agreement after a collective or class action lawsuit has already been filed against it? The National Labor Relations Board (the “Board”) recently said yes in Cordúa Restaurants, Inc., Case 16-CA-160901 (August 14, 2019).

CCPA, It’s Not Just Alphabet Soup

Our previous article “Does the CCPA Apply to My Company?”[i] outlined some questions to help determine if your company is included in the definition of business for the CCPA. Here, we give a brief overview of the law and discuss both its potential effects and enforcement.

An Uncashed Check is Taxable

The IRS issued Revenue Ruling 2019-19 to describe the tax and reporting treatment of uncashed distribution checks from tax-qualified retirement plans.  The ruling describes a situation in which a plan is required to make a distribution and the participant receives the distribution check, but does not cash it.  The ruling makes clear that, regardless of why the participant does not cash the check (or even if the participant cashes the check in a later year), the distribution is subject to applicable tax withholding and reporting in the year in which the distribution is made.  In addition, the participant must include the distribution in his or her gross income for that same year.

EPA Proposes Restrictions to State Water Quality Certifications

A proposed rule issued August 9th appears to move in a different direction from the approach to cooperative federalism promoted by recent EPA initiatives.  EPA’s new Water Quality Certification rule seeks to restrict the authority of states and authorized tribal agencies – at least with respect to certain actions under the Clean Water Act. This is a rule to watch for utilities and businesses seeking licenses from the Federal Energy Regulatory Commission, and for developers who need Clean Water Act Section 404 permits from the Army Corps of Engineers.

Colorado Mining Operations Face Temporary Cessation Roadblock

Case of First Impression Overturns Mined Land Reclamation Board Ruling

On July 25, 2019, the Colorado Court of Appeals reversed a ruling of the Colorado Mined Land Reclamation Board (“MLRB” or “agency”) which had authorized a second period of temporary cessation for a uranium mine.  The Court in Information Network for Responsible Mining, Earthworks, and Sheep Mountain Alliance v. Colorado Mined Land Reclamation Board was asked to determine if the agency properly authorized a “second period of temporary cessation” which would allow the mining permit issued by the MLRB to remain in effect.

The Role of States in Environmental Enforcement – EPA Issues Final Policy Outlining State Responsibility

Continuing its focus on cooperative federalism under the current Administration, EPA issued its final policy on Enhancing Effective Partnerships Between the EPA and the States in Civil Enforcement and Compliance Assurance Work on July 11, 2019.  EPA’s guidance memorandum follows review of comments from the draft policy published in May 2019 and replaces the January 2018 interim guidance on enhancing partnerships.  EPA’s final policy expands and clarifies earlier direction on communication planning between EPA and its state counterparts with authorized or delegated programs under various federal statutes such as the federal Clean Air Act, Clean Water Act, and RCRA.

Takings Claims in Federal Court

Affected by a local government just compensation action? Your remedies have now changed significantly. The Supreme Court on June 21, 2019 overturned 35 years of precedent. In Knick v. Township of Scott, Pennsylvania the Court held that you can now take your federal takings claims pursuant to 42 U.S.C. § 1983 directly to federal court without exhausting state court remedies.

Minnesota Employers: Don’t be Caught Off Guard

All companies and organizations with Minnesota-based employees must update their employment policies and practices due to recent state law changes going into effect on July 1, 2019.  These updates are necessary due to the Minnesota Legislature’s passage of a law imposing new recordkeeping and notice requirements intended to protect all employees working in Minnesota.  These new requirements are catching many employers off guard due to the lack of publicity for the new law and the short period to achieve compliance.

SEC Adopts Rulemaking Package – “Solely Incidental” Broker-Dealer Exclusion

On June 5, 2019, the Securities and Exchange Commission adopted a rulemaking package that applies to investment advisers and broker-dealers.

This is the fourth in a series of articles describing the SEC’s rulemaking package.  This article addresses the SEC’s Interpretation of the “Solely Incidental” Broker-Dealer Exclusion.  That exclusion allows broker-dealers to provide certain advisory services without becoming subject to regulation as investment advisers under the Advisers Act, as long as those services are “solely incidental” to the broker-dealers’ core business.  The SEC’s new interpretation of this exclusion provides some helpful guidance for broker-dealers and dually-registered firms.

SEC Adopts Rulemaking Package – Form CRS

On June 5, 2019, the Securities and Exchange Commission adopted a rulemaking package that applies to investment advisers and broker-dealers.  These rules include a new set of disclosure requirements to address retail investor confusion over brokerage and investment advisory services.

This is the third in a series of articles describing the SEC’s rulemaking package.  This article provides an overview of the Form CRS – Relationship Summary portion of the package.

Missouri Proposes to Reduce Reporting Timeframe for Start-Up, Shutdown, and Malfunction Conditions

Facilities that own and operate air emissions sources in the State of Missouri, such as manufacturing plants, chemical plants, and similar industrial air sources, will want to take note of recent proposed changes to the notification obligations involving certain excess emission events.

SEC Adopts Rulemaking Package – Investment Adviser Standard of Conduct

On June 5, 2019, the Securities and Exchange Commission adopted a rulemaking package that applies to investment advisers and broker-dealers.  In a series of four articles, Spencer Fane LLP outlines the SEC’s rulemaking package.  Our first article summarized “Regulation Best Interest” a new standard of conduct governing broker-dealers.  In this second article, we describe the SEC’s interpretation of the standard of conduct that applies to investment advisers when they engage with their clients.

SEC Adopts Rulemaking Package – Regulation Best Interest

On June 5, 2019, the Securities and Exchange Commission adopted a rulemaking package that is applicable to investment advisers and broker-dealers.  The package includes two final rules and two interpretations – Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, Form CRS – Relationship Summary, and Solely Incidental Broker-Dealer Exclusion Interpretation.  The Regulation Best Interest and Form CRS requirements are effective 60 days after they are published in the Federal Register, with a transition period for compliance that ends on June 30, 2020.  The SEC’s interpretations are effective immediately upon publication in the Federal Register.  In a series of four articles, Spencer Fane LLP outlines the SEC’s rulemaking package.  This first article describes the Regulation Best Interest portion of the SEC’s package.

SCOTUS Holds that Title VII’s Charge-Filing Procedures Are Subject to Waiver

On June 3, 2019, the Supreme Court held that filing a charge of discrimination is not a “jurisdictional” prerequisite to filing suit under Title VII of the Civil Rights Act of 1964. See Fort Bend County v. Davis, Slip Op. No. 18-525 (June 3, 2019).  Although this case deals with what sounds like an obscure legal issue, it is of great practical importance to employers. In short, it means that employers defending against claims of discrimination under Title VII must diligently assert all procedural defenses they may have as early as possible. Otherwise, a failure to assert a defense may allow the plaintiff-employee’s claim to go forward, even if the employee has not technically complied with Title VII’s mandatory charge-filing procedures.

One Key Takeaway from $3 Million Penalty by HHS for Exposing 300,000 Patient Records

The United States Department of Health and Human Services reached an agreement with Touchstone Medical Imaging in which Touchstone agreed to pay $3 million and adopt a corrective action plan in the wake of its data breach that exposed over 300,000 patients’ protected health information.

Supreme Court Sheds Light on Class Arbitrations

The Supreme Court has further closed the window for employees to pursue class-wide claims against their employers in arbitration.  In 2010 the Supreme Court ruled a court may not compel arbitration on a class-wide basis when the arbitration agreement is “silent” on the issue.  Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010).  Nine years later, presented with an arbitration agreement that, instead of silent, was “ambiguous” regarding the availability of class arbitration, the high court has again demonstrated its preference for individual arbitration.  In Lamps Plus, Inc. v. Varela, Case No. 17-988 (slip opinion April 24, 2019), the Court held that ambiguity cannot provide the basis for finding consent to participate in class arbitration.

Fish and Wildlife Proposes Downgrading American Burying Beetle Status From “Endangered” to “Threatened”

After years of studies, Congressional pressure, and on-the-ground experience with the American Burying Beetle, the U.S. Fish and Wildlife Service proposed downgrading the beetle’s status from “Endangered” to “Threatened.” In addition to this move, Fish and Wildlife has proposed a rule that would tailor protections that are necessary for the beetle to recover under section 4(d) of the Endangered Species Act.

DOL Publishes Proposal Interpreting Joint Employer Status

On April 1, 2019, the Department of Labor (“DOL”) published its third proposal in 30 days to revise regulations interpreting the Fair Labor Standards Act (“FLSA”). The April 1 proposed rule would revise and clarify the test for when multiple employers (known as “joint employment”) can be held responsible for wages under the FLSA. The notice and full text of the rule can be found here.

Structuring Physician Relationships After Forest Park

If a relationship with physicians or other referral sources has been structured to carve out Medicare and Medicaid patients to avoid triggering Anti-Kickback Statute requirements, it is time to review the compliance of the relationship.

Dating Application Triggers National Security Concerns

You read it correctly:  The United States Government has deemed an online dating application to be a national security concern. The dating application Grindr has earned notoriety for being the gay equivalent to Tinder (a dating “hook up” application for straight people). Grindr has gained remarkable success. The application boasts of having 27 million registered users as well as an average of 3.3 million daily users.

DOL Publishes Proposals Interpreting “Regular Rate of Pay” in Overtime Regulations

Under the Fair Labor Standards Act (FLSA), employers must generally pay non-exempt employees overtime at a rate of one and one half times the “regular rate” of pay when they work more than forty hours in a workweek. Overtime cannot be properly calculated unless the employer knows what to include in the regular rate.  As benefits, bonuses, reimbursements and other elements of compensation have evolved, greater ambiguity has developed in determining what is included in and excluded from the regular rate.  On March 29, 2019, the Department of Labor (“DOL”) published a proposal (found here) to clarify and update several regulations that interpret the regular rate of pay requirement.

Does the CCPA Apply to My Company?

Late last year California passed the California Consumer Privacy Act of 2018 (“CCPA”) aimed at granting certain rights and protections to California consumers and also imposing obligations and limitations on businesses in an effort to provide consumers more control over their personal information. The CCPA becomes effective January 1, 2020, and companies across the nation are marking their calendars in anticipation of privacy practice changes reminiscent of those ushered in by the European Union’s GDPR last year. Although the CCPA is often compared to the GDPR, the two privacy laws are different and compliance with one does not ensure compliance with the other. In undertaking compliance measures, the initial inquiry companies should analyze is the question of whether the CCPA applies to the company.

Department of the Interior amends Greater Sage-Grouse Management Plans

The Department of the Interior recently announced six new Records of Decision that amend Resource Management Plans for the Greater Sage-Grouse.

Maintaining Compliance with Substance Use Disorder Information

Does your organization provide substance use treatment services or receive information from a treatment program that identifies an individual as having a substance use disorder?  If so, your organization may be subject to 42 C.F.R. Part 2 and may have obligations to amend contractual provisions to maintain compliance.

New FMLA and FLSA Opinion Letters Issued by DOL on Key Topics

On March 14, 2019, the U.S. Department of Labor/Wage and Hour Division continued its practice under the Trump Administration of issuing Opinion letters by releasing three new ones – its first Opinion letters of 2019.  One of the newly-released Opinion letters relates to the Family and Medical Leave Act (“FMLA”), and two of them involve the Fair Labor Standards Act (“FLSA”).

ABA Explains Lawyers’ Ethical Obligations for Data Security and Data Breach

Lawyers, like others in business, must comply with the data security and data breach notification laws of the 50 states that are applicable to their practices. But, according to the American Bar Association, their obligations do not end there. On October 17, 2018, the ABA issued Ethics Opinion 483 titled Lawyers’ Ethical Obligations After an Electronic Data Breach or Cyberattack

DOL Publishes Proposal on New White-Collar Exemption Regulations

On March 7, 2019, the Department of Labor (“DOL”) published a long-awaited proposal for revising the regulations relating to the white-collar exemptions from overtime and minimum wage under the Fair Labor Standards Act (“FLSA”). In the Notice of Proposed Rulemaking (“NPRM”), DOL has proposed increasing the threshold salary amount for certain white-collar exemptions from its current $455 per week (or $23,660 per year) to $679 per week, or ($35,308 per year). In 2015, DOL had proposed increasing this threshold to over $47,000 per year ($913 per week). As we reported here, that proposal was blocked by a federal court in Texas in late 2016.

Army Corps Seeks to Accelerate Wetlands Permitting with New Mitigation Bank Guidance

Mitigation bank credits may become more readily available to builders, developers and other permittees following new guidance issued in late February.  The U.S. Army Corps of Engineers issued Regulatory Guidance Letter 19-01, developed in collaboration with the U.S. Environmental Protection Agency, on February 22, 2019. (Available here)

Revisit Privacy Notices for the New Year

Consumer-facing privacy notices carry legal consequences and a carefully drafted privacy notice may function to save a company in data privacy litigation or regulatory actions. Accordingly, several reasons exist for companies to frequently revisit privacy notices.

The Supreme Court Remands the Ninth Circuit’s Pay Bias Decision Due To Judge Reinhardt’s Death

On February 25, 2019, the United States Supreme Court vacated a decision previously decided by the full Ninth Circuit because it was filed after Judge Stephen Reinhardt, who authored the opinion, died. In the case, Rizo v. Yovino, the Ninth Circuit held that employers could not rely upon an employee’s prior salary as a “factor other than sex” in defending against a claim under the Equal Pay Act. We discussed the Ninth Circuit’s decision here. Notably, the Ninth Circuit was the only federal circuit court to decide that employers could never rely upon salary history as a factor other than sex. All eleven judges (including Judge Reinhart) in the Ninth Circuit had agreed that prior law should be overturned, and that the employer’s utilization of salary history alone to set salaries was impermissible.

Yahoo! Data Breach Settlement Increases Risk for Companies’ Directors and Officers

The recent Yahoo! settlement marks a substantial step in data breach shareholder derivative litigation that increases the risk for officers and directors of companies that have a data breach. On January 9, 2019, Yahoo! Agreed to pay a total of $29 million to its shareholders to settle a lawsuit against several former directors and officers alleging that their poor management of the company led to the data breaches which substantially impacted the company’s value.

Illinois: Land of 12 Million Biometric Privacy Regulators

The Supreme Court of Illinois recently held that every Illinois citizen has a private right of action to enforce violations of the Illinois Biometric Information Privacy Act (“BIPA”) without alleging or showing actual harm. Businesses collecting, using and storing the biometric data of Illinois consumers take notice:  there are over 12 million regulators with the power to enforce this law against you. But don’t worry too much, the state’s high court promises that “Compliance should not be difficult.”

Texas Businesses Must Implement and Maintain Reasonable Cybersecurity Safeguards According to State Attorney General

Texas law requires businesses to implement and maintain reasonable cybersecurity, which they should do so with a written program for managing cyber risk and protecting sensitive customer information. This warning came from the state’s Attorney General following his office’s $1.5 Million settlement with Neiman Marcus over its 2013 data breach.

Cyber Hygiene Checklist

“[T]he relevant inquiry here is a cost-benefit analysis, that considers a number of relevant factors, including the probability and expected size of reasonably unavoidable harms to consumers given a certain level of cybersecurity and the costs to consumers that would arise from investment in stronger cybersecurity.”
– FTC v. Wyndham, (3rd Cir. Aug. 24, 2015)

Pennsylvania Employers Have a Duty to Safeguard Employees’ Data, Says High Court

Late last year, the Supreme Court of Pennsylvania ruled that employers have a legal duty to safeguard employee’s sensitive personal information stored on an internet-accessible computer system and that the state’s economic loss doctrine allowed the plaintiffs in Dittman to recover for purely monetary damages. 

Missouri Low-Income Housing Tax Credit Outlook – 2019 Legislative Update

The Missouri Housing Development Commission Board (“MHDC Board”) failed to authorize state low-income housing tax credits (“MO LIHTC”) in 2018 due in large part to the political position and maneuverings of former Missouri Governor Eric Greitens.  The MHDC Board is composed of the Governor, Lt. Governor, Treasurer, Attorney General, and six commissioners appointed by the Governor.  For much of 2018 the MHDC Board lacked a quorum which led to the delay in issuing a Qualified Allocation Plan (“QAP”).  While current Missouri Governor Mike Parsons voted against not allocating MO LIHTC in 2018 he also acknowledged a position supporting reforms and has been consistent on that message though specifics have not been publicly provided.

Protect Your Company Against W-2 Business Email Compromise Attacks During Tax Season

The most likely “cyber attack” that your company will face will come in the form of an email. One of the most common forms of email attack is the business email compromise (BEC) and the most popular time of the year for the W-2 version of BEC is right now — tax season.

Cyber Incident Response Checklist

“Firms must adopt written policies to protect their clients’ private information . . . they need to anticipate potential cybersecurity events and have clear procedures in place rather than waiting to react once a breach occurs.”
– S.E.C. v. R.T. Jones Capital Equities Mgt.

A Phase I ESA Gone Awry Leads to Millions in Cleanup Liabilities — a Cautionary Tale for Property Transactions

Lenders, borrowers, purchasers, sellers, and even contractors sometimes get annoyed with environmental lawyers when we insist on reviewing Phase I Environmental Site Assessment (ESA) draft reports, looking at the underlying regulatory files, checking title reports, real property records, and contract terms, counting days to make sure that the Phase I report is not stale or expired at closing, and documenting which parties do, should, or do not have reliance rights under that report.   

Colorado lawsuit claims “forced pooling” in oil and gas development is unconstitutional. Is this the next step to try to ban the industry?

On January 23, 2019, Wildgrass Oil and Gas Committee (reportedly an anti-fracking group but also an organization that includes mineral owners in the Wildgrass subdivision in Broomfield, Colorado), filed suit in federal court in Denver challenging, on federal constitutional grounds, that portion of the Colorado Oil and Gas Conservation Act (C.R.S. 34-60-116) (the “Act”) that allows the Commission to “force pool” the development of oil and gas resources.

2017 Tax Cuts and Jobs Act Breathes New Life Into Old Trick For Dealing With Participant Loans in Corporate Transactions

One of the more difficult issues in corporate transactions that are structured as asset purchases is how to deal with outstanding participant loans.  In the typical asset purchase scenario – where the purchaser does not assume sponsorship of, or accept a transfer of assets from, the seller’s retirement plan – employees of the seller who become employed by the asset purchaser generally incur a termination of employment with the seller, and therefore a distributable event under the seller’s 401(k) plan.  If a participant has an outstanding loan at the time of the asset sale, then unless the distribution is paid in a direct rollover to another employer plan that is willing to accept a rollover of a participant loan, the participant must either (i) pay off the loan before taking the distribution, or (ii) incur a potentially taxable “plan-loan offset” (where the participant’s account balance is reduced, or offset, by the outstanding loan balance).

Monitoring the Deregulatory Track Record of the Trump Administration

There are several online resources available to track the regulatory activities of the current federal administration, including various federal government agency websites.  The two sites which I and others often turn to for comprehensive and easy-to-use online access for tracking the current state of federal deregulatory efforts are the sites produced and maintained by the law schools at Harvard College and New York University.

FAA Not Applicable to Contracts with Transportation Workers, Even If They Are Independent Contractors

In New Prime, Inc. v. Oliveira, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) does not apply to contracts with independent contractors in the transportation industry. This decision is very important for transportation companies because, to the extent a contract with any transportation worker contains a mandatory arbitration provision, the arbitration provision is not covered by, and is no longer enforceable under, the FAA.

EDPB Guidance on GDPR’s Jurisdictional Scope

For many U.S. organizations, figuring out whether – and to what extent – Europe’s General Data Protection Regulation (“GDPR”) applies to your operations has caused a lot of headaches. Do you have an “establishment in the [European] Union”? Are you “offering…goods and services…to…data subjects in the Union”? Are you “monitoring” the behavior of data subjects in the Union? How will these terms be interpreted and enforced?

Why Amending Your Estate Plan Could Create Significant Income Tax Savings

There are many reasons to have an attorney review your estate plan every few years.  This is especially important for couples with estate plans that included estate tax planning provisions before the federal estate tax exemption significantly increased over the last decade.  Due to the dramatic rise in the estate tax exemption, many couples who no longer face estate taxes should amend their estate plans to take advantage of future income tax savings. 

Colorado Oil and Gas Development – State Supreme Court Upholds COGCC Decision in Martinez Case

In a unanimous decision which resolved more than five years of dispute, the Colorado Supreme Court on January 14, 2019 upheld the decision of the Colorado Oil and Gas Commission (COGCC) which had refused to engage in rulemaking proposed by environmental groups. Led by the so-called teenage activist Xiuhtezcatl (pronounced Shoe-Tez-Caht) Martinez, the activists proposed a rule that would have conditioned all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment.  Responding to the rulemaking petition which was originally submitted in 2013, the COGCC said the rulemaking was beyond its statutory authority; on appeal, the district court agreed with the agency; and then the Court of Appeals, in a split decision, reversed. 

New South Carolina Insurance Data Security Act

South Carolina has recently enacted a new insurance data security law entitled the South Carolina Insurance Data Security Act. The new legislation generally applies to licensees (any person licensed, authorized to operate, or registered, or required to be licensed, authorized, or registered, under the insurance laws of South Carolina) with ten or more employees or independent contractors.

2018-2019 NCAAF Assistant Coaches Salary Database

Spencer Fane LLP attorneys Bob Lattinville and Roger Denny were recently published in USA Today as instrumental contributors to the publication’s annual release of NCAAF assistant coach salaries. USA Today collaborates with the Spencer Fane sports practice duo to prepare the compensation survey, which you can read here.

Cyber Resolutions for the New Year

As we enter 2019, social media is flooded with resolutions for self-improvement, let us propose a few:

New Year, New Minimum Wage

As of January 1, 2019, the minimum wage increased in over 20 states. Employers with workers in Arizona, Colorado, and Florida should note the following rates that are effective January 1:

Arizona – $11.00
Colorado – $11.10
Florida – $8.46

Missouri Minimum Wage Set to Increase Starting January 1, 2019

On November 6, 2018, Missouri voters overwhelmingly voted in favor of amending the Missouri Minimum Wage Law (“MMWL”) to increase the state-wide minimum wage. Therefore, effective January 1, 2019, the Missouri minimum wage rate will increase to $8.60 per hour and will keep increasing each successive year until 2023 when the increases will stop at the target minimum wage rate of $12.00 per hour. Employers must begin the process of budgeting for and implementing these changes ahead of the effective date of the first increase. Employers should also be aware of the non-wage-rate related changes that the law implements. However, the wage increases do not apply to “public employers.”

Missouri’s Medical Marijuana Amendment Creates New Issues for Missouri Employers

On November 6, 2018, Missouri’s voters approved a medical marijuana ballot initiative, Amendment 2, while rejecting two competing medical marijuana initiatives on the ballot.  This constitutional amendment empowers doctors to authorize patients to buy medical marijuana for the treatment of a variety of conditions. It likewise provides that dispensaries may sell marijuana for medicinal purposes.  Amendment 2 does not cover recreational use of marijuana, which is currently allowed in nine states.  Missouri is the 31st state to legalize medical marijuana. While Amendment 2 authorizes use of marijuana for medicinal purposes, this is not a “free pass” for employees.  Amendment 2 does not allow employees to use marijuana while working, on the employer’s premises, or to work while impaired by marijuana use that occurred prior to the employee’s work shift.  With that said, the passage of Amendment 2 will likely create multiple issues of varying complexity for Missouri’s employers for years to come, including:

IRS (Finally) Answers Questions re: 2019 Hardship Distributions

On November 9, 2018, the IRS issued proposed amendments to the regulations under Code Section 401(k) that describe the circumstances under which participants may take an in-service distribution of elective deferrals (and contributions subject to similar withdrawal restrictions, such as QMACs, QNECs and safe-harbor contributions) on account of financial hardship. The proposed amendments to the regulations reflect several statutory changes to 401(k) plans since the Pension Protection Act of 2006, including the recent changes (that are scheduled to apply to hardship distributions in plan years beginning after December 31, 2018) under the Bipartisan Budget Act (“BBA”) of 2018. Most importantly, the amendments answer several questions that plan sponsors and plan administrators have had with respect to both the BBA and the Tax Cuts and Jobs Act (“TCJA”) of 2017, and provide some much-needed transition relief for hardship distributions made in 2019.

Mount Lemmon Fire Dist. v. Guido: The ADEA Applies To All State and Local Government Employers

On November 6, 2018, the United States Supreme Court unanimously held (8-0) that the Age Discrimination in Employment Act (“ADEA”) extends to all small state and local government employers, not only public entities with twenty or more employees.  

Missouri Legalizes Medical Marijuana – Implications for Banks

On November 6, 2018, Missourians voted to amend the Missouri constitution to allow the use of marijuana for medical purposes. Amendment 2 allows the use of marijuana for ten medical conditions and imposes a four percent tax on the retail sale of marijuana, with the funds to be used for the health care needs of military veterans. Missouri joins over 30 other states in legalizing marijuana in some form. Despite Missouri’s and other states’ laws, the manufacture, distribution, and dispensing of marijuana remains illegal at the federal level under the Controlled Substances Act. Banks and other financial institutions must navigate this conflict between state and federal law with limited guidance from regulators.

Notice – Colorado Changes to Data Privacy Laws

Three major changes to Colorado data privacy laws became effective September 1, 2018.  These affect virtually all business collecting personally identifying information (PII)[1] from Colorado residents:

OSHA Announces Site-Specific Targeting Program to Focus Inspection Priorities at Establishments with High Injury and Illness Rates

Beginning October 16, 2018, employers with high injury and illness rates can expect more frequent OSHA inspections in connection with the resurrection of the agency’s Site-Specific Targeting (SST) Program.  OSHA will use the SST Program to prioritize employer facilities and establishments for health and safety inspections in the coming year.

2019 Inflation Adjustments

Following announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2019. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2019 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of the 2019 limits card is available upon request. To obtain one or more copies, please contact any member of our Employee Benefits Group. You also can contact the Spencer Fane Marketing Department at 816-474-8100 or marketing@spencerfane.com.

Updated Tools for Your HIPAA Toolkit: Medical Record Fees

A Missouri federal court granted a motion to dismiss this week in a case against a provider and medical record processing company.  In the case, a patient alleged that a “search and retrieval” fee imposed in response to a patients request for access to medical records violated the Missouri Merchandizing Practices Act.  In dismissing the claim, the court only addressed Missouri law as the allegations did not involve alleged violations of HIPAA.  The outcome in this Missouri case is similar to the outcome in an unrelated  Tennessee case against the same medical records company that was dismissed earlier this summer.  The Tennessee case alleged multiple violations of Tennessee law relating to the fees imposed for access to medical records, using HIPAA as the standard for medical records fees.  In dismissing the case, the Tennessee court found that neither HIPAA nor Tennessee law provide a private cause of action for excessive medical record fees.  The Tennessee case is pending appeal.

Corporate Entity Formation Is Not Dispositive on “Employee” Status Under the FLSA

The Tenth Circuit Court of Appeals recently provided an important reminder to employers about the pitfalls that can occur when attempting to determine whether workers are employees or independent contractors. The court held that individual workers who personally perform janitorial cleaning services could be found to be employees under the Fair Labor Standards Act (“FLSA”), even if those workers have formed corporate entities and entered into franchise agreements with a franchisor See Acosta v. Jani-King of Okla., Inc., Case No. 17-6179, 2018 WL 4762748 (10th Cir. Oct. 3, 2018).  The holding in Jani-King  emphasizes the principle that forms and labels are not the deciding factor in determining whether a worker is considered an “employee” for FLSA purposes. Under current law, administrative agencies and/or the courts will make a determination as to “employee” status under the FLSA by examining the totality of the circumstances in light of the factors stated in the “economic realities test.”

Updated Tools for Your HIPAA Toolkit: Security Risk Assessment

In the wake of the record setting $16 Million dollar settlement and resolution agreement with Anthem, Inc, the Office for Civil Rights (OCR) and Office of the National Coordinator for Health Information Technology (ONC) released a new version of their Security Risk Assessment tool.  The new tool and recent settlement agreement renew the emphasis of OCR on the performance of HIPAA Security Risk Assessments by covered entities and their business associates.  

2018 NCAAF Coaches Salary Database

Spencer Fane LLP attorneys Bob Lattinville and Roger Denny were recently published in USA Today as instrumental contributors to the publication’s annual release of NCAAF coach salaries. USA Today collaborates with the Spencer Fane sports practice duo to prepare the compensation survey, which you can read here.

Innovations in Arizona’s New LLC Law

After a long 25-year tenure, Arizona’s Limited Liability Company Act will be retiring soon, to be updated by a comprehensive new law, signed by Governor Ducey this last legislative session. I had the distinct pleasure of working alongside a small group of Arizona business lawyers over the past handful of years in drafting the new LLC law.

New EPA Guidance Proposed on Clean Air Act Single Source Determinations – Industrial Air Emission Sources May Benefit

On September 5, 2018, EPA issued a draft guidance document announcing a shift of the term “adjacent” in the context of the Clean Air Act’s New Source Review (NSR) and title V operating permit programs which may benefit industrial air sources. This interpretation would focus EPA’s attention on physical proximity of facilities when making source determinations, rejecting EPA’s past practice of considering “functional interrelatedness.”

Fair Credit Reporting Act – New Summary of Consumer Rights Forms Now Required

All entities and individuals required to provide “consumers” with a notice of rights pursuant to Fair Credit Reporting Act (“FCRA”) section 609 are now required to use the updated summary of rights forms authored by the Consumer Financial Protection Bureau (“CFPB”). See Interim Final Rule (83 FR 47027). Companies that use background check reports for employment purposes are subject to this rule.

New Wage and Hour Opinion Letters Provide Guidance to Employers

On August 28, 2018, the U.S. Department of Labor, Wage and Hour Division issued six new Opinion letters. Four of these opinion letters relate to the Fair Labor Standards Act (“FLSA”), and two of the letters involve the Family and Medical Leave Act (“FMLA”). As we noted in April (WHD Opinion Letters), Secretary of Labor Alex Acosta announced in 2017 that the agency would soon re-start the practice of issuing opinion letters, which the Obama Administration had discontinued. The new opinion letters are summarized below.

IRS Updates Required Tax Notice to Address Plan Loan Offsets and Other Law Changes

The IRS has updated the model notice (sometimes referred to as the “402(f) Notice” or “Special Tax Notice”) that is required to be provided to participants before they receive an “eligible rollover distribution” from a qualified 401(a) plan, a 403(b) tax-sheltered annuity, or a governmental 457(b) plan.  Notice 2018-74, which was published on September 18, 2018, modifies the prior safe-harbor explanations (model notices) that were published in 2014. Like the 2014 guidance, the 2018 Notice includes two separate “model” notices that are deemed to satisfy the requirements of Code Section 402(f):  one for distributions that are not from a designated Roth account, and one for distributions from a designated Roth account. The 2018 Notice also includes an appendix that can be used to modify (rather than replace) existing safe-harbor 402(f) notices. 

Changes to Missouri’s Public Sector Labor Law Impacts Employers, Unions, and Employees

A new law, making it easier for Missouri public employees to opt out of both union membership and paycheck deductions funding political advocacy work, goes into effect on August 28, 2018. The new law, a victory for public sector employers, effectively enacts “right-to-work” protections for public sector employers, despite the fact that voters rejected right-to-work generally for the state of Missouri (see Missouri Right to Work is Overwhelmingly Rejected by Voters, Spencer Fane HR Solutions August 15, 2018). Therefore, public sector employers should review the new law and determine what steps need to be taken in order to comply with it upon the forthcoming effective date. (See Full Text of Law Here).

Another court rules that contractual consent to be called using an ATDS cannot be unilaterally revoked

The Telephone Consumer Protection Act,  47 U.S.C. § 227 (TCPA),  makes it unlawful for any person, absent the “prior express consent of the called party,” to make non-emergency calls using any Automated Telephone Dialing System (ATDS) to any telephone number assigned to a cellular telephone service. Anyone who violates the TCPA may be liable for “actual monetary loss” or $500 in damages for each violation, whichever is greater.

Air Quality – Colorado to Join 13 States That Have Adopted California’s LEV Requirements

On August 16, the Colorado Air Quality Control Commission set a hearing to consider establishing a new Regulation Number 20 to adopt specific provisions of the California low emission vehicle (LEV) rule for model year 2022 and newer light and medium duty vehicles. The Division’s proposed rule will not include a Zero Emissions Vehicle (ZEV) mandate and has no impact on heavy-duty vehicles or non-road (construction and agricultural) equipment.

Missouri Right to Work is Overwhelmingly Rejected by Voters

By a greater than two to one margin, Missouri voters rejected the Right to Work Act passed early in the legislative session.  The law was supported and signed by former Missouri Governor Greitens.  With strong local and national union backing and a ton of dollars, the unions led the effort first to get the issue on the ballot with more than 300,000 petition signatures and then to defeat the measure soundly at the polls. 

Phase I Environmental Site Assessments: What You Need to Know to Close Your Deal

As someone who frequently helps businesses buy and sell commercial and industrial properties, I frequently encounter misunderstandings about Phase I Environmental Site Assessments (ESAs) and their role in a property transaction. Although not an exhaustive list, these 10 items are among the most important you should know about for your next property transaction.

Oil and Gas Development Would Be Blocked on 85% of Non-Federal Land in Colorado

A recent analysis by the Colorado Oil and Gas Conservation Commission (“COGCC”) shows that increasing the current regulatory setback of 500 feet to the 2500-foot setback proposed in Initiative # 97 would prevent oil and gas development on 85% of the non-federal land surface in the state. 

Upcoming Proposition 65 Changes May Catch Companies Without Warning

All companies in supply chains for products sold in California need to be aware of the law known as California’s Proposition 65. This is especially true because significant changes to Proposition 65 requirements go into effect on August 30, 2018, increasing potential liability.

Colorado Orders Safety Fixes at Orphaned Oil and Gas Wells

On Wednesday, July 18, 2018, Governor Hickenlooper of Colorado issued an Executive Order directing the Colorado Oil and Gas Commission (COGCC) to act to “plug, remediate, and reclaim” orphaned oil and gas wells and sites.  Of the over 50,000 oil and gas wells in the state, the COGCC is currently tracking 262 orphaned wells and 373 associated well sites that require remediation and reclamation. 

DOL Rescinds Persuader Rule

On July 17, 2018, the Department of Labor (“DOL”) officially abandoned the “Persuader Rule” by filing a notice of rescission in the Federal Register. The rescission is expected to become effective on or about August 17, 2018 (i.e. 30 days after the rescission notice is published in the Federal Register). This rescission gives employers and certain legal service providers more certainty as to whether their business dealings are subject to the reporting requirements of the Labor Management Reporting and Disclosure Act (“LMRDA”).

The Data Breach Tide is Shifting Toward Proactive Security Obligations

When an organization faces a security incident, it is thrown into a complicated analysis of forty-seven state breach notification laws.  With the laws based on the residence of the affected consumer, consideration must be given to the variances in the definition of a breach that triggers notification; the content, timing, and manner of notification; additional regulatory, credit agency, or media communications; and potential litigation or enforcement.  Thus, the states in which an organization provides goods or services and collects personal information can have a significant impact on obligations following a security incident.

U.S. Will Produce More Crude Oil Than Any Other Country in 2019, According to EIA

The U.S. is projected to produce more crude oil than any other nation, including Saudi Arabia and Russia.  The July 10, 2018 forecast from the U.S. Energy Information Administration (EIA) predicts that, in 2019, U.S. crude oil production will grow to 11.8 million barrels a day.

New Colorado Consumer Data Privacy Law Impacts Governmental Entities

On May 29, 2018, Colorado Governor John Hickenlooper signed House Bill 18-1128 (the “Consumer Privacy Law”) which expanded protections of consumer data and placed additional requirements on covered and governmental entities that maintain, own, or license personal identifiable information.  The Consumer Privacy Law’s new requirements will take effect on September 1, 2018.

The Consumer Privacy Law has unique requirements for covered entities and governmental entities.  A general discussion of how the law impacts governmental entities follows.

Janus v. AFSCME – Mandatory Agency Fees Unconstitutional for Public Sector Unions

On June 27, 2018, the Supreme Court of the United States issued what may be one of its most impactful decisions of the 2017/2018 term in Janus v. American Federation of State County and Municipal Employees, Council 31, Case No. 16–1466.  In its opinion, found here, the Court held that laws requiring public sector workers who are not union members to pay union dues would be compelled speech in violation of the First Amendment. This decision reverses nearly forty years of federal precedent, and declares unconstitutional a host of state laws which allow such fee arrangements. It also has significant implications for the manner in which public sector unions collect their dues.

Cyber Liability Insurance for Employee Benefit Plans: Hackers and Malware and Phishing – Oh My!

Cyberattacks have managed to invade all walks of life, and employee benefit plans are no exception.  When a plan is attacked, the fallout can be overwhelmingly expensive and burdensome to correct.  Many plan sponsors are purchasing cyber liability insurance coverage to supplement their data security measures.  Understanding those policies – and their exclusions – is important for sponsors who are exploring such coverage.

Federal Court Halts EPA’s Waters of the United States (WOTUS) Rule in 11 States

On June 11, 2018, the U.S. District Court of the Southern District of Georgia issued a preliminary injunction preventing implementation of the U.S. Environmental Protection Agency’s 2015 Waters of the United States (WOTUS) rule in 11 states including Georgia, Alabama, Florida, Indiana, Kansas, Kentucky, North Carolina, South Carolina, Utah, West Virginia and Wisconsin.  The court held that if the WOTUS rule became effective the states would suffer irreparable harm in both a “loss of sovereignty and unrecoverable monetary losses.” 

The Masterpiece Cakeshop Decision – Bakery Owner Wins, But on Narrow Grounds

On June 4, 2018, the Supreme Court of the United States issued its highly anticipated decision in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, Case No. 16-111. In its opinion, found here, the Court vacated an administrative order entered by the Colorado Civil Rights Commission (“CCRC” or the “Commission”) against the bakery, which had refused to sell custom wedding cakes to same-sex couples on the grounds that doing so would violate the owner’s sincerely held religious beliefs. The Court made it clear that judges and administrative officials violate a litigant’s constitutional rights if they engage in conduct that displays hostility toward a particular set of religious beliefs. But the majority opinion left many questions unanswered. It remains to be seen if a business owner may refuse to do business with a prospective customer because of the customer’s sexual orientation when the refusal is based on a sincerely held religious belief.

The Responsibility of Regulation Relief Within the Economic Growth, Regulatory Relief and Consumer Protection Act

Matt outlines the potential risks and benefits of the Economic Growth, Regulatory Relief and Consumer Protection Act., which was introduced by a bi-partisan group of 23 senators with the primary intent of reducing regulatory burdens for smaller financial institutions. Published in The Show-Me Banker and In Touch.

“As Is” Clause Held to Preclude Claim Arising From Seller’s Oral Representations That Damaged Parts on an Aircraft Were Repairable

The significance of “as is” language in an aircraft sales agreement is demonstrated again in a recent decision of the Federal District Court for the Northern District of Texas.  In Red River Aircraft Leasing, LLC v. JetBrokers, Inc., the aircraft buyer had learned of hail damage to an aircraft during the course of negotiations, but was assured by the seller that the damaged parts were repairable.  Of course, after taking possession of the aircraft, the buyer learned that the parts in question were not repairable, and proceeded to sue the seller on a theory of negligent misspresentation.  The Federal Court, however, ruled that because the buyer had accepted the aircraft “as is” and “with all faults” in its purchase agreement, it would be unable to establish that it relied on the seller’s statement in buying the aircraft.  The court therefore entered a summary judgment for the seller, leaving the buyer without a remedy.

Insurance Benefits – Unreasonable Delay and Denial. Supreme Court of Colorado Decides Three Cases Against Insurance Companies.

In a trio of case opinions issued on May 29, 2018, – all written by Chief Justice Nancy Rice who will retire in June – the Colorado Supreme Court ruled against the arguments of insurance companies. 

A “Top-Hat” Plan Primer

Federal Appellate Court Decision Highlights Importance of “Firestone” Language

In a recent decision, the Sixth U.S. Circuit Court of Appeals resolved an important question in a way that should put administrators of ERISA plans in a far stronger position vis-à-vis claimants who disagree with the administrators’ plan interpretations.  Essentially, the court in Clemons v. Norton Healthcare Retirement Plan held that the contract-interpretation doctrine of “contra proferentum” has no application once a court has determined that a plan document grants the administrator the type of broad discretion approved by the U.S. Supreme Court in its 1989 Firestone decision.

Employee Class Action Waivers Held Enforceable

On May 21st, the United States Supreme Court held that the National Labor Relations Act (“NLRA”) does not prohibit employers from requiring workers to agree, as a term and condition of their employment, that they waive the right to bring class or collective actions, and will individually arbitrate employment-related legal claims.  Epic Sys. Corp. v. Lewis, U.S., Case No. 16-285 (Slip Opinion, May 21, 2018). This decision resolves a high profile conflict, in which the National Labor Relations Board and some federal courts had found that the NLRA prohibits enforcement of arbitration agreements containing class action waivers. The Court’s decision makes clear that the NLRA does not prevent the enforcement of an arbitration agreement that is otherwise valid under the Federal Arbitration Act (“FAA”). 

Health Plans’ Anti-Assignment Clauses Upheld by Two More Federal Appellate Courts

Over the past two months, the United States Court of Appeals for both the Ninth Circuit and the Third Circuit have upheld “anti-assignment” clauses in ERISA-governed health plan documents.  These holdings – which adopt the same position previously taken by the First, Second, Fifth, Tenth, and Eleventh circuits – are a blow to healthcare providers that attempt to bring suits against employer-sponsored health plans (or the insurance companies funding benefits under those plans) as “assignees” of individual plan participants. 

NLRB Restored to Employer-Friendly Three Republican/ Two Democrat Composition

Relief for employers under the Trump Administration continues, following the U.S. Senate’s narrow confirmation of John Ring, former Morgan Lewis & Bockius LLP attorney, to the National Labor Relations Board on April 11, 2018.  The 50-48 Senate vote returned the five-member board to an employer-friendly composition of three Republicans and two Democrats and alleviates the log jam of the 2-2 split created when Board Member Phillip Miscimarra stepped down. On April 13, Ring became Chair of the Board, replacing Marvin Kaplan as Chair. Kaplan remains a member of the Board. 

Loosened Maximum Distance Requirements for APRNs in Missouri

Effective Thursday, April 26, the Missouri Board of Registration for the Healing Arts (MBHA) and the Missouri Board of Nursing (MBN) loosened the regulatory requirements which dictate the maximum distance between the location at which an Advance Practice Registered Nurse (APRN) practices and the location at which his/her collaborating physician practices.

U.S. Supreme Court Rules That Inter Partes Review Challenges On Patent Validity Before the U.S. Patent and Trademark Office Are Constitutional

Your business may at some point find itself in the unfortunate position of facing an allegation that it is infringing another’s patent.  The situation can be even more aggravating if you believe that the subject patent is obvious or not novel and therefore wrongfully issued.  You can defend against an allegation of patent infringement by challenging the validity of the patent in a civil suit before a court of law.  A patent carries a presumption of validity, which can only be overcome by clear and convincing evidence.  That places a high burden on you to invalidate the patent in the lawsuit.

2017-18 Autonomy 5 Athletics Directors’ Compensation Survey

We reviewed all forms of compensation for the athletics directors at member institutions in the Autonomy 5 Conferences. We analyzed these employment agreements and related documents (the, “Contracts”), which were obtained in partnership with USAToday, and created a sortable database of primary compensation (click here to view the FBS Athletic Director Database, the “Database”).

The SEC’s Fiduciary Proposal – Form CRS

On April 18, the Securities and Exchange Commission issued a proposal package that includes two new rules and one interpretative release.  The package consists of three components – Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary.   According to the SEC, the proposal is intended to balance investor protections and regulatory requirements with investor access and choice.  Each component of the proposal is available for public comment for 90 days after publication in the Federal Register.

In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts on broker-dealers and investment advisers.  This third article describes the Form CRS – Relationship Summary portion of the SEC’s fiduciary proposal.

The SEC’s Fiduciary Proposal – Investment Adviser Standard of Conduct

The Securities and Exchange Commission voted on April 18 to issue a proposal package that includes two new rules and one interpretative release.  According to the SEC, each component of the proposal – Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary – is intended to enhance investor protections and regulatory clarity while maintaining investor access and choice.  Each part of the SEC’s proposal is available for public comment for 90 days after publication in the Federal Register.

In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts to broker-dealers and investment advisers.  This second article describes the Investment Adviser Standard of Conduct Interpretation.

City of Springfield Receives Approval to Designate 3 Areas as “Qualified Opportunity Zones”

Missouri Governor Eric Greitens and U.S. Senator Roy Blunt (R-MO) recently announced the selection of 161 census tracts receiving designation as “qualified opportunity zones,” including ten census tracts located in the City of Springfield[1]. The ten census tracts receiving designation in Springfield are concentrated in three distinct areas of the city: center city, north Springfield, and a portion of central Springfield.  The qualified opportunity zones program was adopted as part of the recent tax reform legislation and is designed to spur economic and infrastructure growth in areas with high poverty and low job growth.

The SEC’s Fiduciary Proposal – Regulation Best Interest

In an open meeting on April 18, the Securities and Exchange Commission voted four to one to issue two new rules and one interpretative release that are intended to provide investor protections and regulatory clarity, as well as investor access and choice.  Specifically, the SEC issued Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary.  Each component of the SEC’s proposal is available for public comment for 90 days after publication in the Federal Register.  In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts on broker-dealers and investment advisers.  This first article describes the Regulation Best Interest portion of the SEC’s fiduciary proposal.

Intermediate Sanctions Tax: For Athletics Directors It’s Personal

The recent enactment of the Tax Cuts and Jobs Act has drawn attention from all corners of the intercollegiate athletics industry. 

Ramifications for Missouri Physicians of Enhanced Mo HealthNet OPI Program

Effective March 1, 2018, the Missouri Department of Social Services (“MDSS”) – Mo HealthNet Division (“Mo HealthNet”) began working collaboratively with the Missouri Department of Mental Health and the Missouri Department of Health and Senior Services to enhance the Mo HealthNet Opioid Prescription Intervention (“OPI”) Program. 

New WHD Opinion Letters Provide Guidance to Employers

Last week, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued three new opinion letters for the first time since 2010.  The Obama administration had ceased the practice of issuing opinion letters – which answer specific questions from employers or other parties – in favor of general administrative interpretations.  Last June, Secretary of Labor Alex Acosta announced that he was reinstating the practice of issuing opinion letters for the Trump administration.  This announcement was praised by businesses and employment lawyers because the opinion letters apply the law to a specific set of facts and represent official statements of agency policy.  In addition to the new letters, WHD republished 17 letters the Obama administration rescinded following their original publication late in the Bush administration.

Equal Pay Act: Ninth Circuit Says Prior Salary Not Job-Related

On April 9, the full Ninth Circuit held that employers may not rely on an employee’s prior salary as a “factor other than sex” in defending against a claim under the Equal Pay Act. Rizo v. Yovino, No. 16-15372 (9th Cir. April 9, 2018) (found here). In making this determination, the court phrased the question before it concisely, asking “can an employer justify a wage differential between male and female employees by relying on prior salary?” The answer: a resounding “no.” The court further stated that the “text, history and purpose of the Equal Pay Act” do not allow an employer to rely on an employee’s prior salary to justify a wage disparity. Id. 

Air Emissions From Oil and Gas Wells Health Risks Analyzed – More Study Needed

About the only thing that stakeholders agree on is that the risk assessment saga in Colorado means one thing – more study is needed. On March 27, 2018, the latest in a series of health risk studies was published by the Colorado School of Public Health at the University of Colorado Medical Campus. Using air emissions data taken from within the 500 foot regulatory setback requirement for homes near wells, the study concludes that people living in close proximity to oil and gas wells are subject to an increased risk of developing cancer.

The Superfund Petroleum Exclusion – Alive and Well in the Ninth Circuit

In an unpublished opinion on March 21, 2018, the Ninth Circuit Court of Appeals affirmed the trial court’s dismissal of a lawsuit citing the application of CERCLA’s petroleum exclusion. The Court held that the site investigation at a former gas station did NOT identify anything other than petroleum or fractions thereof. Consequently, the Plaintiff did not plausibly allege any CERCLA “hazardous substances” were present at the site. The case was dismissed.

Congress Enacts Redevelopment-Friendly Changes to the Superfund Law, and Tenants and State and Local Governments Gain Clarity on How to Avoid Cleanup Liability

On March 23, 2018, the President signed into law the BUILD Act of 2018, which significantly clarifies the potential scope of cleanup liability for tenants and state and local governments under the federal Superfund law.  Now, a tenant at an industrial or manufacturing site can, under appropriate circumstances, claim the “bona fide prospective purchaser” (BFPP) defense to Superfund liability and escape what would otherwise be strict, joint, and several owner/operator liability when leasing previously-contaminated property. 

EPA Will Revise Emission Standards For Cars and Light Trucks for Model Years 2022-2025

On April 2, 2018, the EPA announced the results of its updated Midterm Evaluation (MTE) determination related to greenhouse gas (GHG) emissions standards for cars and light trucks for model years 2022-2025. The agency stated that the current standards are not appropriate, and that it will work with the National Highway Traffic Safety Administration to set a notice and comment rulemaking to set new standards.

Hazardous Waste Generators, Transporters, and TSDFs Should Plan Now for EPA’s 2018 e-Manifest System

Authorized by Congress in 2012, the EPA’s Electronic Manifest System (e-Manifest) will become effective on June 30, 2018.  When they register, generators, transporters, and receivers of hazardous wastes will be able to use this system to facilitate the electronic transmission of the uniform hazardous waste manifest form.  States must adopt the provisions of the final rule in order to enforce them under state law and to maintain manifest program consistency.

Chapter 9 – More than just Orange County and Detroit

A Chapter 9 bankruptcy offers protection to a financially-distressed municipality so that it may develop a plan for addressing its debts. A product of the Great Depression, bankruptcy protection for municipalities was first enacted in 1934.  However, the Supreme Court held the act unconstitutional as an improper interference with the sovereignty of states. See Ashton v. Cameron County Water Improvement Dist. No. 1, 298 U.S. 513 (1936). Congress subsequently passed a revised Municipal Bankruptcy Act in 1937, which was eventually upheld by the Supreme Court. See United States v. Bekins, 304 U.S. 27 (1938).

Colorado Court of Appeals Upholds Warrantless Inspections at Oil and Gas Sites

On March 22, 2018, the Colorado Court of Appeals held that the Colorado Oil and Gas Conservation Commission’s authority to undertake unannounced, warrantless inspections (i.e., administrative searches) at oil and gas sites does NOT violate the U.S. or Colorado constitutions.

Here We Go Again… Fifth Circuit Strikes Down DOL’s Fiduciary Rule

In a significant blow to the Department of Labor’s controversial regulation re-defining what constitutes an investment-advice fiduciary, a split three-judge panel of the Fifth Circuit Court of Appeals ruled on March 15 that the DOL exceeded its authority when creating the rule.  The 2-1 decision of the appellate court strikes down the regulation and its associated prohibited transaction exemptions in their entirety.  (Chamber of Commerce v. U.S. Dept. of Labor (5th Cir. March 15, 2018)).  In its wake, the court’s decision leaves even more of the confusion that has plagued the DOL’s 2016 rulemaking.

Changes to Chapter 12 Bankruptcy May Increase Farmers’ Ability to Reorganize in Bankruptcy

Farmers attempting to reorganize under Chapter 12 of the Bankruptcy Code may propose selling land as a means of generating cash to pay creditors. This sale creates a large capital gains tax, as the cost basis for the land is likely low. That capital gains tax has priority over general unsecured creditors, and the farmer needs to pay that capital gains tax in full to get a Chapter 12 plan confirmed.

DOL Announces “PAID” Program

On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (DOL) announced that it will soon launch a nationwide pilot program for employers to self-report potential overtime and minimum wage violations. The pilot program is called the Payroll Audit Independent Determination (PAID) program. The primary objective of PAID, according to the agency, is to “improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.” Many details are not yet available, but the DOL has announced the broad outlines of the program, which are available here:  https://www.dol.gov/whd/paid/#1

New Chapter 14 Bankruptcy Code Recommended by the United States Treasury Department

Would Handle Liquidation of Failing Financial Firms and Limit the Use of Orderly Liquidation Funds as Established in the Dodd-Frank Act

In February 2018, the United States Treasury Department issued the Orderly Liquidation Authority and Bankruptcy Reform Report (the “Report”) advocating for the enhancement of the Bankruptcy Code, specifically as it applies to financial institutions.  This report is in stark opposition to the CHOICE Act proposed by a conservative group of lawmakers in the U.S. House of Representatives that seeks to undo much of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and fully repeal the orderly liquidation authority (“OLA”) established in Dodd-Frank.

Investment Advisers and Conflicts Of Interest

The Department of Labor and the Securities and Exchange Commission have expressed concerns regarding potential conflicts of interest that investment advisers do not explicitly disclosed.  Thus, plan fiduciaries may not be aware of such conflicts when they engage and monitor their plan’s investment consultant.  These concerns were recently highlighted when the SEC launched an initiative in connection with investment advisers’ selection or recommendation of a higher-cost mutual fund share class for their clients when a lower-cost share class of the same fund is available.  The SEC’s initiative reminds plan fiduciaries of the importance of obtaining appropriate information to fulfill their fiduciary obligations when engaging and monitoring investment advisers.

Colorado Legislation Could Halt Oil and Gas Production

House Bill 1071, if enacted as written, will obviate the need for the Colorado Supreme Court to resolve the dilemma caused by the Colorado Court of Appeals opinion in the Martinez case.   As described in earlier Spencer Fane posts, that appellate decision effectively elevated the protection of public health and the environment over the interests of mineral rights owners and developers.  The issue before the Colorado Supreme Court is whether the current statute dictates that the Colorado Oil & Gas Conservation Commission (COGCC) implement a statutorily directed balancing act without giving priority to any particular interest.

Supreme Court Adopts Restrictive Minority View of Section 546(e) Safe Harbor Regarding Certain Securities Payments

On February 27, 2018, a unanimous Supreme Court held in Merit Management Group, LP v. FTI Consulting, Inc. (link here) that an otherwise-avoidable transfer is not subject to the safe harbor in Section 546(e) (which provides, in relevant part, a trustee may not avoid a transfer that is a “settlement payment . . . made by or to (or for the benefit of) a . . . financial institution” or that “is a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract”) of the Bankruptcy Code merely because funds flow through covered financial entities.  Rather, the availability of the Section 546(e) safe harbor depends on the particular transfer sought to be avoided.

SEC Launches Share Class Selection Disclosure Initiative

The Securities and Exchange Commission recently announced a temporary program for investment advisers who may have inadequately disclosed potential conflicts of interest related to their selection or recommendation of mutual fund share classes. Participation in the program, however, is not without its drawbacks.

Congress Eases Restrictions on Hardship Withdrawals

Buried in Sections 41113 and 41114 of the recent Bipartisan Budget Act of 2018 are provisions designed to facilitate hardship withdrawals from 401(k) and 403(b) plans.  Because these provisions take effect for plan years beginning after December 31, 2018, sponsors of these plans will want to consider whether to broaden their hardship withdrawal provisions – or even add such provisions.

Tax Cuts and Jobs Act – Modified Rules for UBTI

For many years tax exempt organizations and retirement plan trusts have been permitted to avoid tax on income generated by unrelated trades or businesses they hold by netting the gains, losses, and deductions among those trades or businesses.  The Tax Cuts and Jobs Act modifies those rules, increasing the likelihood that such entities must report, and pay tax on, UBTI.

Tougher Oil & Gas Rules in Colorado Set to Take Effect

On February 13, 2018, the Colorado Oil and Gas Conservation Commission approved new rules to require the industry to track the location of oil and gas pipelines. The new rules stem from an explosion in Firestone, Colorado caused by a leaking pipeline that destroyed a house and killed two people on April 17, 2017. That disaster triggered a massive public outcry, directives from the Governor, and now significant revisions to state regulations. 

Large Arizona Jury Award Reversed Because of Timely Raised Procedural Defense

The Arizona Court of Appeals recently reversed a jury’s award of $375,000 in damages to a former police officer for the City of Surprise. In Peterson v. City of Surprise, No. 1 CA-CV 16-0415 (Feb. 6, 2018), the court held that the employee, who claimed she was constructively discharged in retaliation for reporting sexual harassment, was precluded from bringing the case in court because she had failed to file a charge of discrimination within 180 days after she left her employment. As the court stated, the employee specifically “crafted her claim against the City to allege not constructive discharge caused by ‘firsthand’ discrimination, but constructive discharge caused by illegal retaliation under the [Arizona Employment Protection Act].” A claim of illegal retaliation is one that contends that the employer’s actions were wrongful in response to a report of discrimination, not wrongful because of the discrimination itself. The court held that there was no difference between the claim of retaliation and the harassment claims for purposes of the filing deadline.

Colorado Supreme Court Will Address Oil and Gas Development in its Review of the Martinez Case

On January 29, 2018 the Colorado Supreme Court agreed to hear the appeal of the Martinez case.  The state’s high court will decide whether, in the agency’s review of oil and gas permit applications, the Colorado Oil and Gas Conservation Commission (“COGCC”) must elevate “public health and the environment” over other factors identified in the agency’s organic statute.

City of KCMO Adopts Ban The Box Ordinance for All “Employers”

On February 2, 2018, the City of Kansas City Missouri (“KCMO” or “the City”) adopted a “Ban The Box” ordinance that applies to private employers. The KCMO “Criminal Records in Employment” ordinance enacts a new section, Section 38-104. The ordinance becomes effective on June 9, 2018.  Before this ordinance, private employers located in KCMO were encouraged, but not required, to limit the extent to which they based employment-decisions on an applicant’s criminal history. The new Section 38-104 clearly and unambiguously places limitations on the extent to which all private employers located in KCMO can take an applicant or current employee’s criminal history into account when making employment decisions. (The City has applied a similar rule to its own employment procedures since 2013.). Employers with locations in KCMO should carefully review the ordinance and seek guidance from legal counsel in determining whether, how and when to make inquiries regarding criminal history.

EPA Asks States to the Take the Lead in Environmental Enforcement

Recently, EPA issued an Interim OECA Guidance on EPA and state roles on managing enforcement and compliance assistance.  See, Interim OECA Guidance on Enhancing Regional—State Planning and Communication on Compliance Assurance Work in Authorized States. While EPA is seeking to emphasize cooperative federalism in modifying the emphasis of the 1986 revised policy on state/EPA enforcement agreements, as provided in the first footnote of the Guidance, the policy issued on January 22, 2018, appears to make the states the primary enforcer of environmental laws and provides a secondary role for EPA in that regard.

New Disability Claims and Appeals Procedures Finally Take Effect

When the Department of Labor (“DOL”) delayed by 90 days the date by which ERISA plans were required to comply with a set of disability claims and appeals regulations issued in the waning days of the Obama Administration, we predicted that a further delay – or even a complete withdrawal – of the regulations could be in the works.  As it turns out, we were wrong.  Instead, the DOL announced in early January that the regulations will become fully applicable on April 1st – and without change.

The Bankruptcy Venue Reform Act of 2018

In January 2018, Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced a bill that would require corporate debtors to file for bankruptcy protection in the district in which their principal assets or principal place of business is located. In other words, the Bankruptcy Venue Reform Act of 2018 would eliminate a corporate debtor’s ability to commence a case in its state of incorporation if the state of incorporation is neither the debtor’s principal place of business nor the location of its principal assets. Moreover, the bill would do away with the so-called “Affiliate Rule” that allows corporate debtors to file in any district where an affiliate has a pending bankruptcy case. If signed into law, the act would also put an end to protracted, expensive battles over venue: judges would be required to make a decision on a venue transfer request within fourteen days of the objecting party’s request.

Tax Cuts and Jobs Act – New Rules for Retirement Plans and IRAs

Although the main feature of the Tax Cuts and Jobs Act is a significant reduction in the corporate federal income tax rate, the Act also makes a number of significant changes to the rules governing employer-sponsored retirement plans and individual retirement accounts.  From plan loans to hardship withdrawals and Roth recharacterizations, employers should make sure that they understand how these new rules might affect them.

Tax Cuts and Jobs Act – Affordable Care Act Changes

Although the recent Tax Cuts and Jobs Act eliminates the ACA individual mandate, the employer mandate, ACA benefit mandates, and ACA reporting requirements remain in effect.  Thus, employers should continue to be mindful of and comply with their obligations under the ACA.

EPA and OSHA Increase Civil Penalties

In January 2018, both EPA and OSHA increased civil penalties for new enforcement cases.  These increases are required by the Federal Civil Penalty Inflation Adjustment Act of 2015 (Inflationary Adjustment Act), which directs federal agencies to annually adjust civil penalties for inflation by January 15 of each new calendar year in order to “maintain the deterrent effect of civil penalties by translating originally enacted statutory civil penalty amounts to today’s dollars.” 83 Fed. Reg. 1190, at 1191 (January 10, 2018).

Tax Cuts and Jobs Act – New Executive Compensation Rules

This is the second in a series of articles by which the Spencer Fane LLP Employee Benefits Practice Team will explain key changes made in the employee benefits area by the Tax Cuts and Jobs Act (Public Law 115-97), which was signed into law on December 22, 2017.  In addition to establishing new rules for transportation fringe benefits (see our first article in this series), the Act makes a number of changes that may affect how employers structure their executive compensation programs.  This article describes the Act’s impact on for-profit employers, and outlines options that those employers should consider for their compensation arrangements.

Limited Liability Company Interests as Collateral: Remedies on Default

Various business formations and financial transactions utilize alternative entity forms, such as limited liability companies (“LLC”), limited partnerships, master limited partnerships, limited liability partnerships, limited liability limited partnerships—you get the idea. In turn, commercial borrowers may offer—and lenders may request—interests in such entities as collateral. This blog post focuses on LLC membership interests (“LLC Interests”) as collateral.

By The Numbers: FBS Assistant Football Coach Contracts

In partnership with USA Today we collected and analyzed employment agreements for assistant football coaches at public Football Bowl Subdivision (FBS) colleges and universities (the, “Sample Set”).

Bankruptcy Rule Changes: What You Need to Know

Nearly every year, there are changes to the Federal Rules of Bankruptcy Procedure. 2017 was no exception, and new rules went into effect on December 1, 2017. Creditors should be aware of the new timeframe for filing claims and new relief that can be sought in Chapter 12 and Chapter 13 plans. Below is a summary of some of the new rule changes.

Pass Through Deduction in New Tax Bill Unlikely to Slow Trend Toward Industry Consolidation

The Tax Cuts and Jobs Act of 2017 signed into law on December 22, 2017 by President Trump added a new deduction for noncorporate taxpayers (i.e. S corporations, partnerships, sole proprietorships, and trusts) who have qualified business income.  This deduction, found in section 199A of the Internal Revenue Code, is also referred to as the “business pass-through income deduction.” 

The FLSA & Unpaid Internship Programs: DOL Adopts “Primary Beneficiary” Test

On January 5, 2018, the U.S. Department of Labor (“DOL”) clarified its position regarding paid and unpaid internships. They will now use the “primary beneficiary” test for determining “whether interns are employees” under the Fair Labor Standards Act (“FLSA”). The agency has issued a revised Fact Sheet called “Internship Programs under the Fair Labor Standards Act.”

How The New Excise Tax Impacts Coach Compensation

Heralded by some as the most significant overhaul of the Internal Revenue Code (IRC) in decades, the bill (now awaiting the President’s signature before becoming law) formerly known as “The Tax Cuts and Jobs Act” – its title removed pursuant to a special budget rule – could significantly impact the business of college athletics.

Tax Cuts and Jobs Act – New Tax Rules For Transportation Fringe Benefits

Although the recent Tax Cuts and Jobs Act largely retains the favorable tax treatment afforded employees who receive employer-provided transportation assistance, it denies employers any tax deduction for providing these tax-favored benefits. Moreover, tax-exempt employers will now be subject to unrelated business income tax on such benefits. Because the new rules took effect as of January 1, 2018, employers currently sponsoring such programs should promptly evaluate their options.

It’s a Three-Peat: ACA-Reporting Deadline Extended Once Again

The Affordable Care Act (“ACA”) imposed reporting requirements on health coverage providers (including self-funded employer plans) and “applicable large employers” (those with 50 or more full-time employees). For health coverage provided during both 2015 and 2016, the IRS extended the deadline for issuing certain of the required reporting forms. In Notice 2018-06, the IRS has now granted a similar extension with respect to reporting health coverage provided during calendar-year 2017.

Is Fluoridated Drinking Water a Risk? A Federal Court Allows Citizen Suit to Proceed Against EPA Concerning TSCA Oversight

A citizens group cleared the first major hurdle to obtaining a declaratory judgment compelling the U.S. Environmental Protection Agency to consider whether to regulate the fluoridation of drinking water supplies under Toxic Substances Control Act (TSCA)’s Section 6(a) when a federal judge denied the EPA’s motion to dismiss the citizen group’s petition for such a declaration. Consequently, the citizen suit will proceed in evaluating whether EPA must initiate proceedings to decide if it should issue a rule under Section 6 to impose regulatory controls on fluoridation of drinking water.

IRS Issuing Employer Play-or-Pay Notices

Although the GOP tax reform bill reduces to zero the penalty for failing to comply with the Affordable Care Act’s individual coverage mandate, it does nothing to alleviate the employer ACA mandate.  Coincidentally, the IRS has just started issuing notices of potential penalty assessments under that employer mandate (commonly known as the “play-or-pay” provision).

These notices take the form of a “Letter 226J” (this notation appears in the footer of each page), and the Letter makes crystal clear the amount of the potential penalty assessment (which can be substantial).  This dollar amount appears in bold on the second line of the Letter’s text.

It’s Not Too Late to Complete OSHA Electronic Reporting

December 15, 2017, was the deadline for employers to electronically submit information from work-related injuries and illnesses under OSHA’s Electronic Reporting Rule. Nevertheless, OSHA announced on December 18, 2017, that it will continue accepting electronic submittals until midnight on December 31, 2017.

NLRB Issues Two Landmark Decisions: Return to Original Joint-Employer Standard & New Handbook Policy Review Standard

On December 14, 2017, the National Labor Relations Board (the “Board”) issued two landmark decisions. Both are of note because they directly and substantively address two issues that have vexed employers for a number of years: (1) When can two separate and distinct corporate entities be treated as joint-employers for NLRA purposes? and (2) When is a work rule or handbook policy unlawfully overbroad under the NLRA?

DOL Proposes Rescission of Regulations that Restrict Tip Pooling

On December 5th, 2017, the U.S. Department of Labor, Wage and Hour Division will publish a Notice of Proposed Rulemaking (“NPRM”) and a request for comments on tipping regulations issued pursuant to the Fair Labor Standards Act (“FLSA”). The NPRM will propose that the tip pooling regulations issued by the DOL in 2011, which placed restrictions on employers’ ability to implement tip pooling arrangements, should be rescinded.

New Age Harassment: When Will the Next Shoe Drop? What to Do When You Learn One of YOUR Employees Might Be on the Naughty List.

Who will be next? After Matt Lauer, Garrison Keiller, and Russell Simmons each faced assertions of inappropriate conduct in the last week, the “who’s next” question predominates pop culture and the daily news cycle. In the wake of numerous sexual harassment accusations unfolding across Hollywood and corporate America, sexual harassment has become one of the hottest topics in today’s news. While claims of sexual harassment in the workplace are nothing new, the almost daily media coverage of so many high-profile claims will likely result in an increase in reports of sexual harassment allegations for many employers in the immediate future.

Fiduciary Rule – Status Quo until July 1, 2019

On November 29, 2017, the Department of Labor granted an extension of the transition period for the Fiduciary Rule’s Best Interest Contact Exemption and Principal Transaction Exemption, and delayed the applicability date of the amendments to Prohibited Transaction Exemption 84-24. The new transition period will end on July 1, 2019, rather than January 1, 2018. The Department also extended the temporary enforcement policy in Field Assistance Bulletin 2017-02 to July 1, 2019. Thus, financial institutions and advisers impacted by the Fiduciary Rule and related exemptions remain subject to the same requirements as they have been since June 9, 2017, when the Fiduciary Rule and the Impartial Conduct Standards became applicable.

Deadline for OSHA Electronic Reporting Rule Delayed Until December 15, 2017

OSHA has delayed the December 1, 2017, deadline for the Electronic Reporting Rule until December 15, 2017.  This rule requires a wide range of establishments to electronically submit injury and illness information from their OSHA Forms 300A.  The deadline extension was announced via a November 24, 2017, OSHA notice in the Federal Register.

EPA and Corps of Engineers Take Another Step to Roll Back “Waters of the United States” Definition and Issue a New Proposed Rule

The United States Environmental Protection Agency and United States Army Corps of Engineers last week took another step toward rolling back their 2015 proposed definition of “waters of the United States” (WOTUS). On November 22, 2017, the agencies published in the Federal Register a new proposed regulation to delay the effective date of the 2015 WOTUS rule until two years from the date of final action on the new proposal. The agencies seek comments until December 13, 2017, on their new November 22 proposal, so stakeholders who wish to comment have limited time to do so.

Deadline for OSHA Electronic Reporting Rule Fast Approaching

Employers have until December 1, 2017, to electronically submit injury and illness information from their 2016 Summary of Work-Related Injuries and Illnesses (Form 300A) under OSHA’s 2016 Improve Tracking of Workplace Injuries and Illnesses Rule (“Electronic Reporting Rule” or “the Rule”).

Trump Administration EPA to Focus Criminal Enforcement on Significant and Egregious Violators, Citing 1994 “Devaney Memorandum”

A high-ranking Environmental Protection Agency (EPA) enforcement official in the Trump Administration recently cited a 1994 memorandum by Earl Devaney, then Director of EPA’s Office of Criminal Enforcement, as presenting guiding principles to select cases for criminal enforcement of environmental violations. The January 12, 1994, memorandum, “Exercise of Enforcement Discretion,” is often referred to as the “Devaney Memorandum,” and it is available at this link:  https://www.epa.gov/sites/production/files/documents/exercise.pdf. This may signal that criminal enforcement of environmental laws under the Trump Administration will be limited to situations in which there has been significant actual or threatened environmental harm and truly culpable conduct.

Major Department Chain’s Improper Disposal of Household Goods and Consumer Products Results in Significant RCRA Penalty from EPA

On October 25, 2017, the EPA announced that it had reached a settlement with Macy’s Retail Holding, Inc. (Macy’s) in connection with alleged violations of RCRA associated with retail goods and items that were improperly disposed of at department store locations. Under the settlement with EPA, Macy’s agrees to correct the violations, develop a training program for its retailers, conduct third-party audits of eleven of its largest facilities, pay $375,000 in civil penalties, and comply with other requirements within one year.

GOP Tax Bill Contains Benefits Surprises

Despite rumors to the contrary, the tax bill introduced into the House of Representatives by the Republican Party leadership would do nothing to restrict employees’ ability to make pre-tax deferrals to 401(k), 403(b), or 457(b) plans. Trial balloons had suggested that pre-tax deferrals might be limited to only half of the overall annual deferral limit (or even less), with any remaining deferrals made only on a “Roth” (after-tax) basis. But at least for now, “Rothification” appears to be dead.

What the House bill would do, however, is perhaps even more surprising. A slew of tax-favored fringe benefits would be eliminated. And nonqualified deferred compensation as we now know it would be entirely transformed. Incredibly enough, most of these changes would take effect as of January 1, 2018 – less than two months after the bill’s introduction.

EPA Administrator Directs EPA to Cease its “Sue and Settle” Practice

On October 16, 2017, EPA Administrator Pruitt issued a directive, requiring EPA to immediately cease a practice known as “sue and settle,” in response to concerns that EPA has lately been defending against suits brought by environmental organizations with insufficient vigor.  The “sue and settle” concept is not defined in relation to a specific political party or view of environmental protection.  Rather, it is the concept that political parties in power sometimes half-heartedly defend against lawsuits, when the relief sought by such suits is actually favored by the party in power.

2018 Inflation Adjustments

Following announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2018. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2018 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of the 2018 limits card is available upon request. To obtain one or more copies, please contact any member of our Employee Benefits Group. You also can contact the Spencer Fane Marketing Department at 816.474.8100 or marketing@spencerfane.com.

Administration Proposes Delay of Disability Claims and Appeals Procedures

The Department of Labor has proposed a 90-day delay in the applicability of disability claims and appeals regulations that were finalized in the waning days of the Obama Administration. Rather than applying to claims filed on or after January 1, 2018, the regulations would now apply to claims filed on or after April 1, 2018. Moreover, it seems likely that a further delay – or even a complete withdrawal – of the regulations could be in the works.

Bifurcated Distribution Options Made Easier

Earlier this year, the IRS issued Notice 2017-44. This Notice provides model amendments that plan sponsors may use to amend qualified defined benefit plans to offer a bifurcated distribution option. Because the IRS has terminated its determination letter program (except in limited circumstances), plan sponsors may find the model language helpful as they consider design changes to their defined benefit plans for 2018.

The Tivol Decision – Must An Employer Challenge The Issuance of an MCHR Right-To-Sue Letter By Filing A Writ of Mandamus?

The Missouri Supreme Court recently issued an opinion that clarifies when it is appropriate to challenge the issuance of a Missouri Commission on Human Rights (“MCHR”) right-to-sue letter.

Mistaken Use In Sales Contract Of Spec Sheet For A Different Aircraft Is Held To Void Buyer’s Purchase Obligation

The importance of selecting the correct specification sheet is driven home in a recent decision of the Federal District Court for the Western District of New York.

OSHA Issues New Guidance on Process Safety Management

OSHA recently published a guidance document to help petroleum refineries comply with OSHA’s Process Safety Management (PSM) standard, 29 CFR 1910.119, distilling lessons learned by OSHA over the past ten years from the Petroleum Refinery PSM National Emphasis Program (NEP).  The OSHA guidance serves as a road map for process safety professionals to understand specific areas that OSHA will focus on during a PSM audit and areas most likely for OSHA to find gaps in PSM programs.

Cyber-attacks – A Universal Issue

The Federal Bureau of Investigation has cautioned organizations, regardless of industry, that cyber-attacks continue to increase and evolve. Cyber-attacks often target digital files containing sensitive and proprietary data. Thus, the operational, financial and reputational impact caused by cyber-attacks to an organization, either directly or through its service providers, can be significant.

To illustrate the widespread acknowledgement across industries of the importance of cybersecurity, this article describes: 1) best practices identified by the Securities and Exchange Commission Office of Compliance Inspections and Examinations for designing cybersecurity programs, and 2) guidance issued by the Department of Health and Human Services Office for Civil Rights under the Health Insurance Portability and Accountability Act for responding to cyber-attacks.

The Ins and Outs of Opt-out Incentives

As annual open enrollment season approaches, many employers may be evaluating ways in which to control rising health plan costs. One strategy frequently considered is a financial incentive for employees to waive or opt out of the employer-sponsored group health coverage. Although such “cash-in-lieu” or “opt-out” arrangements have long been common, they raise potential problems under the Affordable Care Act (“ACA”), as well as a number of other federal laws.

Ninth Circuit: Seller is not liable for calls made by telemarketer in violation of the Telephone Consumer Protection Act

In a recent decision that may affect any company that sells products or services using telemarketers, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s grant of summary judgment in Jones v. Royal Admin. Servs., Inc. in favor of a product seller, holding the seller was not vicariously liable for calls made by a telemarketer in violation of the Telephone Consumer Protection Act[1] (TCPA) because the telemarketer was an independent contractor.

Eleventh Circuit: Consumers may “partially revoke” consent to be called by automatic dialing systems

In a new decision that may have important implications for telemarketers and others using automatic dialing systems, the United States Court of Appeals for the Eleventh Circuit held in the case of Schweitzer v. Comenity Bank that the Telephone Consumer Protection Act (TCPA) allows a consumer to partially revoke his or her consent to receive automated telemarketing calls.

FBS Athletic Directors’ Compensation Survey

We reviewed all forms of compensation for the athletic directors at National Collegiate Athletic Association member institutions of the Football Bowl Subdivision (“FBS”).

What property owners need to know about new registration requirements

Missouri Governor Greitens recently signed into law, RSMO §347.048, a new registration requirement affecting limited liability companies (LLCs) that own and either rent or lease real property, or own vacant real property, located in Kansas City, Missouri or Independence, Missouri.

Federal Court Says EPA Too Stringent on Recycling and Reclamation of Hazardous Secondary Materials

Companies that beneficially reuse hazardous secondary materials by recycling or reclaiming those materials rather than discarding them as hazardous waste need to be aware of a new federal court ruling that may provide additional flexibility in the reuse and recycling of those materials. In its July 7, 2017, opinion in Am. Petroleum Inst. v. EPA, No. 09-1038, slip op. (D.C. July 7, 2017), the U.S. Court of Appeals for the District of Columbia struck down two key elements of the EPA’s 2015 Final Rule aimed at revising EPA’s “Definition of Solid Waste”: Factor 4 of the legitimacy test (i.e., “toxics along for the ride”) and, in pertinent part, the Verified Recycler Exclusion pertaining to reclamation under RCRA.

Major Changes to Missouri Human Rights Act Signed Into Law by Governor Greitens

On Friday, June 30, 2017, Missouri Governor Eric Greitens signed Senate Bill 43 into law. The Bill implements significant changes to the Missouri Human Rights Act (“MHRA”) and will likely have a significant impact on the litigation of MHRA claims. When he signed the legislation, Governor Greitens touted Senate Bill 43 for bringing Missouri law in closer alignment with the standards under federal law and 38 other states’ laws.

CERCLA Due Diligence Requirements Revised to Reflect Updated Phase I Standard for Forested and Rural Land

Purchasers of rural and forested land need to be aware of a recent change in EPA’s environmental due diligence rules. On June 20, 2017, EPA published a Direct Final Rule in the Federal Register, amending the All Appropriate Inquiries (AAI) Rule, 40 CFR Part 312, to reflect 2016 updates to ASTM E2247, a standard for Phase I investigations on rural and forested land.

Sale of New Aircraft With Used Engine Supports Claim of Fraud

The Texas Court of Appeals in Dallas ruled this week that a buyer purchasing a new aircraft from the manufacturer made a submissible case of fraud against the seller when it introduced evidence that one of the aircraft engines had previously been used on another aircraft, and that this fact had not been fully disclosed to the buyer.

7th Circuit Holds That Title VII’s Prohibition on Sex Discrimination Includes A Prohibition on Sexual Orientation Discrimination

On April 4, 2017, the en banc Seventh Circuit Court of Appeals overruled its own precedent and became the first Circuit to hold that discrimination on the basis of sexual orientation can constitute unlawful sex discrimination under Title VII.

Requirements for Arizona employers to stay in compliance with new paid sick leave law

In November, 2016, voters in the State of Arizona adopted Proposition 206, known as The Fair Wages and Healthy Families Initiative. As of July 1, 2017, all employers in Arizona must provide employees with paid sick leave.

The Second Circuit issues potentially impactful ruling on revocation of consent to be called under the Telephone Consumer Protection Act when that consent is given as bargained-for consideration for a binding contract

Congress enacted the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., (TCPA) to protect consumers from “[u]nrestricted telemarketing, which it determined to be “an intrusive invasion of privacy.” The TCPA prohibits, among other conduct, telephone calls to residential phone lines or cell phones using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.

Subsurface Intrusion now a Factor for NPL Listings According to New EPA Final Rule

On May 22, 2017, EPA finalized a new rule establishing subsurface intrusion as a new component of the Hazard Ranking System (HRS), the principal mechanism for placing contaminated sites on the National Priorities List (NPL).

Denver Post Supports AG’s Appeal of Martinez Case to Colorado Supreme Court

As stated here in an earlier post, the Martinez decision, if upheld by the Supreme Court, has major implications for all fossil fuel as well as hardrock mineral development in the state of Colorado.

When is a seller liable for illegal calls made by a third party telemarketer? Fleshing out vicarious liability under the Telephone Consumer Protection Act

Using a telemarketer to market goods or services can be extremely costly to the seller if the telemarketer conducts its business in a manner that violates the Telephone Consumer Protection Act (TCPA). Penalties for violations of the TCPA range from $500 to $1,500 per call. And with call or text campaigns that may reach thousands of recipients, or even millions – the potential liability can be astronomical. It should be no surprise TCPA class action lawsuits are flourishing.

By the Numbers: 2016-2017 Autonomy 5 Men’s Basketball Assistant Coach Contracts

AthleticDirectorU has teamed with Spencer Fane to provide unprecedented insight into coaching contracts and salaries. Tonight is the first in a series aimed to provide context and clarity.

The Fiduciary Rule is Alive

According to U.S. Labor Secretary Alexander Acosta, the Department of Labor’s Fiduciary Rule will become effective on June 9th. As discussed in our May 9th article, the Rule’s expanded definition of “fiduciary” will apply, and advisers and financial institutions providing investment advice as fiduciaries must comply with the Rule’s “impartial conduct” standards, beginning on June 9, 2017. At this time, the full scope of the Fiduciary Rule and its related prohibited transaction exemptions will be applicable on January 1, 2018.

Treatment of “Collateral” Employees Under Retirement Plans

It is common for employers to contract with one or more third parties (sometimes referred to as “leasing companies”) to provide individuals to perform services for the employer. Various issues may arise regarding the treatment of such individuals under a retirement plan maintained by the employer.

The Future of Oil and Gas Development in Colorado – Appeal by Attorney General of the Martinez Case Raises the Stakes

On May 18, 2017, the Colorado Attorney General filed an appeal with the Colorado Supreme Court seeking to overturn the recent 2-1 decision of the Colorado Court of Appeals which arguably conflicts with the long-standing interpretations embraced by the Colorado Oil and Gas Conservation Commission (“OGCC”) related to its organic statute.

EPA Administrator Consolidates Authority to Select Costly CERCLA Remedies

EPA Administrator Scott Pruitt recently redelegated to the EPA Administrator the authority to select $50 million plus site cleanup remedies under CERCLA Records of Decision or RODs. Some years ago, such authority had been delegated to the Regional Administrators in each EPA Region.

Oklahoma – New Law Requires the Losing Party to Pay Attorney Fees

HB 1470, signed into law last week, does away with the “American Rule,” which impacts which party is responsible for attorney fees at the conclusion of a lawsuit. Set to go into effect in November 2017, the new law requires the court to award attorney fees to the prevailing party – paid for by the non-prevailing party.

Federal Court in Missouri holds technical failure to comply with the FCC’s TCPA opt-out notice requirements on fax advertisements does not confer standing on recipient who consented to receive the faxes

The FCC’s TCPA “opt-out” notice requirements for sending solicited faxes continues to be weakened.

DOL’s Fiduciary Rule Countdown

For investment advisers and financial institutions, the countdown to compliance with the Department of Labor’s new “conflict of interest” rule ends on June 9, 2017. The Department of Labor (“DOL”) issued a final rule on April 7, 2017, that delays the original applicability date of its conflict of interest regulation (the “Fiduciary Rule”) and its related prohibited transaction exemptions for 60 days, creating a “Transition Period” that starts on June 9, 2017, and ends on December 31, 2017.

St. Louis City Minimum Wage Set To Increase to $10 Per Hour

Today, the Circuit Court for the City of St. Louis, Missouri lifted an injunction that had blocked a St. Louis City ordinance increasing the minimum wage for St. Louis City businesses. This action came after the Missouri Supreme Court ruled that state law did not prohibit the higher local minimum wage.

Shopping for Cyber Insurance? Initial Lessons Learned from the Courts

The burgeoning multi-billion dollar cyber insurance market is expected to continue its 25%+ annual growth over the next few years. Despite this dramatic growth, the market is plagued with uncertainty over the meaning of key policy terms and scope of coverage. The lack of both uniformity in cyber policy language and judicial guidance interpreting policy language prevent companies from confidently assessing their loss exposure in the event of a major data breach.

DOL Fiduciary Rule Enforcement – Confusion and Disruption Relief

The Department of Labor (“DOL”) has proposed to delay for 60 days the “applicability date” of the Fiduciary Rule (“Rule”), and the new and revised prohibited transaction exemptions related to the Rule. The proposed delay has created confusion within the financial services industry because it is not certain that a final rule implementing the delay can be published (and become effective) before the Rule’s April 10th applicability date. In response to the confusion, the DOL issued Field Assistance Bulletin 2017-01 (“Bulletin”) announcing a temporary enforcement policy that assures advisers and financial institutions that the DOL will not seek to enforce the Rule or the related prohibited transaction exemptions in the event the Rule becomes applicable before it is officially delayed.

IRS Clarifies Permissible Substantiation Procedures for Hardship Withdrawals

In recent years, sponsors and administrators of 401(k) and 403(b) plans have received conflicting advice on the steps they should take to substantiate an employee’s entitlement to an in-service withdrawal on account of financial hardship. For instance, an April 2015 IRS newsletter seemed to require that plan sponsors obtain and retain documentary proof of an employee’s entitlement to a hardship withdrawal. However, two recent internal IRS memos outline a permissible approach to this substantiation requirement that need not involve conditioning a hardship withdrawal on an employee’s provision of supporting documents. Plan sponsors should thus consider this new alternative.

Stormwater Runoff from Construction Activities Subject to New EPA 2017 General Permit

Construction companies, general contractors, developers, and property owners involved in land clearance and disturbance activities will want to take note of the new Stormwater Construction General Permit (“Construction General Permit”) issued by the United States Environmental Protection Agency (“EPA”) on February 17, 2017. As with earlier Construction General Permits, the 2017 permit applies to land clearance and disturbance activities greater that one acre and requires site operators to comply with best management practices (“BMPs”), effluent limits, and other permit requirements, including developing a Stormwater Pollution Prevention Plan (“SWPPP”).

The EEOC’s Proposed Enforcement Guidance on Unlawful Harassment

The Equal Employment Opportunity Commission (EEOC) has issued proposed enforcement guidance on unlawful harassment (the “Proposed Guidance”). The Proposed Guidance is intended to be a follow-up to the EEOC’s Select Task Force on the Study of Harassment in the Workplace in 2016 (“2016 Harassment Study”). The Proposed Guidance provides a detailed explanation of the EEOC’s position on the three components of a hostile work environment claim: 1) covered bases and causation; 2) hostile work environment threshold; and 3) liability.

SEC Issues Robo-Adviser Guidance

The increased popularity of automated digital investment advisory programs (often called “robo-advisers”) has drawn the attention of the Securities and Exchange Commission (“SEC”). On February 23, 2017, the SEC’s Division of Investment Management issued Guidance Update No. 2017-02 (the “Update”). That Update provides guidance to robo-advisers as they seek to satisfy their disclosure, suitability, and compliance obligations under the Investment Advisers Act of 1940 (“Advisers Act”). On the same day, the SEC’s Office of Investor Education and Advocacy issued an Investor Bulletin to educate investors about robo-adviser programs.

DOL Proposes 60-Day Delay for Fiduciary Rule

After nearly a month of regulatory machinations and behind-the-scenes lobbying, the Department of Labor has released a proposed rule that would delay the “applicability date” of its recently enacted “conflict of interest” (or “fiduciary”) regulation (the “Fiduciary Rule”). The 60-day delay in the applicability of the Fiduciary Rule would have only an indirect effect on employers, but is of great interest to investment advisors and other service providers.

IRS Extends Deadline for Providing Small-Employer HRA Notices

As explained in our December 19, 2016, article, the 21st Century Cures Act allows small employers (those that are not subject to the Affordable Care Act’s “play-or-pay” requirements because they have fewer than 50 full-time employees, including full-time equivalents) to offer their employees a premium reimbursement arrangement that would otherwise violate the ACA. By establishing a “qualified small employer health reimbursement arrangement” (or “QSEHRA”), such an employer may subsidize its employees’ purchase of individual health insurance coverage. In its recent Notice 2017-20, the IRS has granted these employers additional time to comply with the QSEHRA notification requirement.

Steps for Employers to Avoid Violating the Fair Credit Reporting Act

The federal Fair Credit Reporting Act (“FCRA”) outlines a strict procedure that employers must follow when they obtain criminal background reports, credit histories, and other background reports on employees and applicants from a third party which is engaged in the business of preparing such reports. All such reports are called “consumer reports” under FCRA.

IRS: No More Closing Agreements Under FICA “Special Timing Rule”

A recent IRS Chief Counsel Memorandum (AM 2017-01) raises the stakes for employers that fail to apply the proper FICA taxation rules to nonqualified deferred compensation. An option previously available to those employers has been taken off the table. Under this option – which required a formal “Closing Agreement” with the IRS – both employer and employee FICA taxes could be minimized by voluntarily paying those taxes for years as to which IRS assessments were otherwise barred under the Tax Code’s three-year statute of limitations. Without this correction option, employers have an even greater incentive to apply the proper FICA taxation rules to their deferred compensation arrangements.

Right to Work Enacted in Missouri

Governor Greitens signed the Missouri Right to Work Bill on February 6, 2017. See Missouri Senate Bill 19. It becomes effective on August 28, 2017 and applies to any new collective bargaining agreements or renewals, extensions, amendments, or modifications after the effective date.

Trump Orders DOL to “Reconsider” Fiduciary Rule

On Friday, February, 3, 2017, President Trump issued a Memorandum directing the Secretary of Labor to “re-examine” the Department of Labor’s final regulation defining “fiduciary” investment advice (sometimes referred to as the “Fiduciary Rule” or the “Conflict of Interest Rule”), and to consider whether the Rule should be revised or rescinded. The Rule, which significantly expands the circumstances under which an individual becomes a “fiduciary” by reason of providing investment advice for a fee, was finalized in April of 2016, and technically became effective last July, but was drafted such that its provisions generally do not become “applicable” to financial advisers until April 10, 2017.

EPA and OSHA Increase Civil Penalties – Days Before New Administration

In January 2017, both EPA and OSHA increased civil penalties for new enforcement cases. While the increases became effective just days before the new Administration took office, the increases are a result of Congressional action in 2015 to annually adjust civil penalties for inflation by January 15 of each new calendar year.

DOL Disability Regulations and the Impact on ERISA Plans

The Department of Labor has issued final regulations under Section 503 of ERISA that purport to enhance the disability benefit claims and appeals process for plan participants. These regulations amend the DOL’s disability claims procedure regulations issued in 2002. The new regulations generally affect the procedures for filing disability benefit claims, providing notice of adverse benefit determinations, and appealing adverse benefit determinations.

OSHA Releases “Recommended Practices” for Anti-Retaliation Programs

The Occupational Safety and Health Administration (“OSHA”) recently released so-called “recommended practices” directed at employers who may be covered by any of the 22 whistleblower protection statutes enforced by OSHA. While these “recommended practices” are not mandatory, they are provided by OSHA to assist employers in creating workplaces free from retaliation.

Summary of the Guidance Issued by ICBA on ADA Accessibility for Websites

The Independent Community Bankers of America (“ICBA”) reached out to the Department of Justice (“DOJ”) asking for guidance regarding whether the DOJ will adopt the standards in the World Wide Web Consortium’s Web Content Accessibility Guidelines (“WCAG”). The DOJ stated that although it has not yet adopted the WCAG standards, it is leaning toward adopting the standards. Furthermore, the DOJ stated that in its view, ADA requirements to provide accessible technology is an “already-existing obligation” and compliance is expected unless a business can prove an undue burden.

SEC Guidance Update and the DOL’s Fiduciary Rule

In December, the Division of Investment Management of the Securities and Exchange Commission issued Guidance Update No. 2016-06. The Update provides disclosure and procedural guidance to address potential issues for mutual funds responding to the Department of Labor’s adoption of the Conflict of Interest Rule. To address concerns by financial intermediaries that variations in mutual fund sales loads may violate the Rule, Funds are exploring various options, including changing fee structures and creating new share classes. Such changes may impact fiduciary decisions regarding a plan’s investments and compensation arrangements.

Amending College Coach Contracts: Let Prudence Not Panic Be Your Guide

Coach Corso’s familiar caution invites consideration of the velocity with which the contracts of his former college football coach colleagues are being renegotiated.

Governor Greitens Orders Review of Every Missouri Regulation

On January 10, 2017, Missouri Governor Eric Greitens signed Executive Order 17-03 (the “Order”). Among other things, the Order compels all state agencies to review each and every Missouri regulation appearing in the Code of State Regulations that falls within their jurisdiction.

Cures Act Allows for Small-Employer HRAs

Before leaving DC for the winter holidays, Congress and President Obama agreed on a provision granting small employers a bit of relief from the Affordable Care Act. Tucked at the very end of the 21st Century Cures Act is a provision allowing certain small employers to offer their employees a health reimbursement arrangement (“HRA”) that need not be “integrated” with a group health plan. Employees may then use their employer’s pre-tax contributions to such an HRA to pay premiums under individual health insurance policies.

White Collar Update: The Supreme Court Weighs In On Bank Fraud

With Monday’s decision in Shaw v. U.S., the Supreme Court cleared up any ambiguity regarding who is protected by the bank fraud statute (18 U.S.C. §1344) and, along the way, continued to encourage federal prosecutors to rely on the powerful and far-reaching bank fraud statute. In saying that fraud against a customer is fraud against a bank, the decision continues the Court’s strong support of the statute and intolerance for technical, loophole-seeking defenses.

EPA Issues Final Hazardous Waste Generator Improvements Rule

On November 28, 2016, EPA published the final version of the Hazardous Waste Generator Improvements Rule (the Rule) in the Federal Register. Promulgated under the Resource Conservation and Recovery Act (RCRA), the Rule updates EPA’s regulations governing generators of hazardous waste, most of which EPA promulgated in the 1980s. The Rule significantly revises the hazardous waste generator requirements.

Court Halts New Overtime Rules on Nationwide Basis

Just as employers across the nation were bracing for the new rules governing white-collar exemptions to the overtime laws (“the New OT Rules”), a federal district court in Texas blocked the Department of Labor from implementing them. The New OT Rules—which drastically increased the minimum salary threshold for employees classified as exempt under the executive, administrative and professional employee exemptions—were set to take effect on December 1, 2016.

ACA-Reporting Deadline Extended by 30 Days

The Affordable Care Act (“ACA”) imposed additional reporting requirements on health coverage providers (including self-funded employer plans) and “applicable large employers” (those with 50 or more full-time employees). In Notice 2016-70, the IRS has granted coverage providers and employers 30 more days to issue the appropriate ACA-reporting forms to their insureds and full-time employees for coverage provided during 2016. Rather than January 31, 2017, these Forms 1095-B and 1095-C will now be due by March 2, 2017. In addition, the IRS has extended by one year the period of “good-faith compliance” with these reporting rules. As of now, however, the IRS has not extended the deadline for coverage providers and employers to transmit these ACA-reporting forms to the IRS.

DOL’s Persuader Rule Permanently Enjoined on a Nation-wide Basis by Texas District Court – May Be Sign of Things to Come for Other DOL Regulations

On November 16, 2016, the United States District Court for the Northern District of Texas (Lubbock Division) entered an order holding that the Department of Labor’s Persuader Advice Exemption Rule is unlawful and should be set aside pursuant to 5 U.S.C. § 706(2). The Persuader Rule regulations are now subject to a permanent nation-wide injunction and the DOL will be prohibited from enforcing the regulations unless and until the district court’s order is revised or reversed on appeal.

Getting Ready for the Presidential Election – Voting Leave Law

With the Presidential Election just days away, employers need to be ready to accommodate workers who may want or need to leave during the workday to cast their votes. The purpose of this blog post is to help employers prepare for the anticipated surge of political activity by providing a summary of the voting leave laws for the states of Arkansas, Colorado, Illinois, Iowa, Kansas, Missouri, Oklahoma and Texas.

2017 Inflation Adjustments

Following recent announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2017. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2017 limits card.

Certificate of Airworthiness Ineffective When Noncompliance with FAR is Present

In Munich v. Columbia Basin Helicopter, Inc., the U.S. District Court for the District of Oregon found that a contract term requiring delivery of an airworthiness certificate by the seller may be breached even when a certificate is provided at the time of delivery.

Washington Decision Rejects Seller’s Reliance on Boilerplate Warranty Disclaimer

The Seattle seller of a used aircraft discovered that its use of an “as is” clause in its general disclaimer of warranties did not suffice to exonerate it from the consequences of delivering an unairworthy aircraft, even after the buyer’s conditional acceptance of the aircraft.

EPA Issues Guidance Encouraging Greener Cleanup Activities

On August 2, EPA issued a guidance document encouraging parties to opt for “greener cleanup activities” when conducting CERCLA response actions, to reduce the environmental costs associated with these cleanups. The guidance document defines “greener cleanup activities” as “practices or technologies that reduce or mitigate the environmental impacts of CERCLA removal and remedial actions, while meeting regulatory and other cleanup requirements.” Examples include generating renewable energy on-site, using energy-efficient equipment, and choosing land management methods that do not require mowing. The guidance document builds on EPA’s 2009 Principles for Greener Cleanups, a general statement of intention to manage CERCLA cleanups in a more environmentally sustainable manner.

Retail and Consumer Product Hazardous Waste – Update on Reverse Distribution and Aerosol Cans by EPA

On September 12, 2016, EPA issued its “Strategy for Addressing the Retail Sector under RCRA’s Regulatory Framework.” The strategy document sets forth three actions the agency is expected to finalize in the short-term to help ease the RCRA burden on managing retail and consumer products that may trigger RCRA hazardous waste characteristics or RCRA listings once a decision to discard is made.

A New Type of Student Union – the NLRB’s decision in Columbia University

In its August 23, 2016 decision in Columbia Univ., 364 N.L.R.B. No. 90 (2016), the National Labor Relations Board (the “Board”) ruled that graduate students working as teaching and research assistants at private universities qualify as employees for collective bargaining purposes under the National Labor Relations Act (“NLRA”) and thereby paved the way for graduate students to join or form unions. Depending on the size of the academic institution, the unionization of graduate employees could pose not only a significant financial burden but also a disruption to the completion of academic programs. This type of student union may be one that not all campuses are ready for.

EEOC’s Revised EEO-1 Rule Seeks to Identify Equal Pay Discrimination

Companies should consider examining the extent to which there may be pay disparities in their workforce. Current events and the EEOC’s revised EEO-1 Rule suggests that all regulatory agencies will be taking a much closer look at corporate pay practices in an attempt to try and root out unintentional bias that is identifiable through inexplicable differences in pay between men and women (as well as between other protected categories).

Avoiding Cleanup Liability for Industrial and Commercial Properties Under New Kansas Law

Effective July 1, 2016, buyers of industrial and commercial properties in Kansas may qualify for a Certificate of Environmental Liability Release (CELR) under the state’s new Contaminated Property Redevelopment Act. This liability release for pre-existing contamination is important for prospective purchasers of industrial and commercial properties by helping to facilitate those transactions and allow the buyer to avoid state cleanup responsibility. But not only buyers benefit, as sellers can also demonstrate a framework that allows the transaction to proceed and maximize the property value without the buyer or seller taking on unnecessary risk if the proper steps to obtain the CELR are followed.

New 50(d) guidance

The Internal Revenue Service (IRS) has recently issued temporary regulations with respect to income inclusion rules under Section 50(d) of the Internal Revenue Code (the Code). Guidance on Section 50(d) has been anticipated primarily in the historic tax credit (HTC) arena, due to its implications for the pass-through of tax credits under a master tenant structure.

A federal district court in Missouri rejects an FDCPA claim based on the legal theory that post-judgment interest in Missouri nontort cases must be specifically awarded in the judgment to be collectable

We are pleased to report a victory in the Eastern District of Missouri in an FDCPA case concerning the collection of statutory post-judgment interest on an unpaid Missouri state court judgment.

Supreme Court Refuses to Enforce the DOL’s FLSA Regulation on Car Dealership Service Advisors

On June 20, 2016, the Supreme Court of the United States held that the Department of Labor’s (“DOL”) 2011 regulation classifying “service advisors” as eligible for overtime pay under the Fair Labor Standards Act (“FLSA”) was not enforceable.

Document Retention Policy for Banks

Document retention sounds like a boring topic until you realize that your bank can be subject to huge monetary damages and possible regulatory action if it doesn’t handle document retention correctly. In the old days, banks could simply keep every document forever to be on the safe side. That isn’t a practical alternative in today’s environment. Nowadays, retaining documents after their useful date can actually harm the bank.

Injunctive Relief Summary

This summary covers (i) the types of injunctive relief, and when it is obtained; and (ii) what is necessary to obtain injunctive relief.

OSHA Reporting Rules Discourage Use of Mandatory Post-Accident Drug Testing

On May 12, 2016, OSHA published the final version of new reporting rules intended to “Improve Tracking of Workplace Injuries and Illnesses.”

Internal Investigations – Best Practices

Organizations conduct internal investigations when confronted with significant legal and financial risks. A successful internal investigation follows recognized best practices. Spencer Fane LLP presents this best practices information to inside counsel. It is based on Spencer Fane’s experience in conducting internal investigations, and on case law, ethics rules and the experience of other law firms. We believe this is a valuable resource that will support inside counsel’s oversight and decisions in internal investigations.

DOL Issues New, More Expansive, Interpretation of Persuader Rule

In March of this year, the Office of Labor-Management Standards (“OLMS”) issued new regulations regarding the Persuader Rule. See 29 CFR Parts 405 and 406. The new regulations, which become fully effective on July 1, 2016, require employers and their law firms or consultants to comply with federal reporting and disclosure requirements if they engage in certain labor relations advisory activities.

IRS Issues Long-Awaited Guidance Regarding (Nonqualified) Deferred Compensation Arrangements of Governmental and Tax-Exempt Employers

Deferred compensation arrangements that are not “tax-favored” retirement plans under Code Sections 401(a), 403(b), or (in the case of a governmental employer) 457(b) are generally referred to as “nonqualified” plans. So long as a nonqualified plan is “unfunded” (meaning the amounts deferred remain the property of the employer, and subject to the employer’s general creditors, until paid), the amounts deferred are generally not taxable until they are “paid or otherwise made available” to the employee.

EEOC Releases Sample ADA Notice for Employee Wellness Programs

In our June 2, 2016, article summarizing final wellness program regulations issued by the EEOC under Title I of the Americans with Disabilities Act (“ADA”), we noted the EEOC’s promise to post on its website a sample notice by which employers could satisfy the ADA’s notification requirements. The EEOC has today posted such a sample notice, along with a series of FAQs shedding further light on the notification requirement. Although employers are not required to use this sample notice, they should make sure that their notice covers all the points addressed in the EEOC sample.

New EEOC Guidance on Employee Wellness Programs

Final regulations issued by the Equal Employment Opportunity Commission (“EEOC”) under both the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) will require modifications to many employee wellness programs. These modifications may include the deletion of certain questions from health risk assessments, additional employee notification requirements, and a reduction in the incentives used to discourage tobacco usage. Although certain aspects of these regulations will not apply until the first day of the 2017 plan year, others are already in effect.

Who’s a Fiduciary Now? Understanding the Department of Labor’s New Definition

The sky isn’t falling, but in a very real sense the retirement world is changing. After months of angst from many in the industry and boisterous posturing by members of Congress, on April 8, 2016, the Department of Labor released a final regulation that more broadly defines who is an “investment-advice” fiduciary for purposes of ERISA and the Internal Revenue Code.

Volume 7A, MISSOURI PRACTICE SERIES, Business Organizations in Missouri (West 1991)

The multivolume Legal Forms is the most extensive collection of Missouri forms and analysis available in the state. The forms are annotated, well-indexed, and cross-referenced to simplify drafting, and are accompanied by commentary, analysis, and drafting tips. The collection covers all major areas of business practice, including:

  • Real estate transactions
  • Leases
  • Building and construction agreements
  • Estate planning
  • Business organizations
  • Much more

Department of Labor Releases New Overtime Rules

The long anticipated DOL overtime rules have been issued. On May 18, 2016, the Department of Labor released the Final Rule governing the “white-collar exemptions” to the Fair Labor Standards Act’s (“FLSA”) overtime pay requirements. These long-awaited regulations will have substantial implications for most employers. The final rule is set to become effective on December 1, 2016.

Closing on Sale and Acceptance of Aircraft with Bill of Sale Specifying “As Is” Delivery Waives Contract Provisions Requiring Seller to Correct Discrepancies and Deliver an Airworthy Aircraft

The aircraft buyer in Wedderburn Corporation v. Jetcraft Corporation learned the hard way that a contract term calling for delivery of an airworthy aircraft with discrepancies repaired would not protect the buyer under all circumstances.

DOL Releases Final Regulation Defining Investment Fiduciaries

After years of effort, the Department of Labor released final rules on April 6, 2016, that will substantially alter the way investment advice is provided to ERISA plans, their participants, and even non-ERISA IRAs.

CJR “To-Do-List”

With the effective date for the Comprehensive Care for Joint Replacement (“CJR”) program now upon us, we wanted to take a moment to highlight key steps that affected hospitals should be pursuing if they wish to realize the benefits of – or at a minimum, avoid potential adverse consequences of – this new payment model.

Supreme Court Allows Representative Evidence to Establish Liability in a FLSA Collective Action

Federal Rule of Civil Procedure 23(b)(3) requires that, before a class is certified, a district court must find that questions of law or fact common to class members predominate over questions affecting only individual members.” In a recent decision by the Supreme Court, the majority explained that “[i]n a case where representative evidence is relevant in proving a plaintiff’s individual claim, that evidence cannot be deemed improper because the claim is brought on behalf of a class.” Tyson Foods, Inc. v. Bouaphakeo, et al., No. 14-1146, 2016 WL 1092414 (S. Ct. 2016).

New OSHA Silica Dust Rule to Impact Over 675,000 Workplaces, Biggest Impact on Construction Industry

On March 25, 2016, 81 Fed. Reg. 16286, OSHA issued a new final rulemaking to reduce silica dust exposure that will directly affect more than 2 million construction workers who drill, cut, crush, or grind silica-containing materials such as concrete and stone, and 300,000 workers in general industry operations such as brick manufacturing, foundries, and hydraulic fracturing. OSHA explains that silica dust exposure occurs in common workplace operations involving cutting, sawing, drilling, and crushing of concrete, brick, block, rock, and stone products (such as construction tasks), and operations using sand products (such as in glass manufacturing, foundries, sand blasting, and hydraulic fracturing).

EPA to Focus on RMP Chemical Accident Prevention and Safety, Issues Proposed Rule and Will Increase Enforcement

Businesses that store and use flammable and toxic chemicals that are regulated under EPA’s Risk Management Plan (RMP) Program at 40 CFR Part 68 need to be aware of recent actions by the U.S. Environmental Protection Agency aimed at curtailing chemical accidents and releases through new proposed regulations and also enforcement. Facilities potentially subject to EPA’s initiatives include chemical plants and refineries, POTWs that use chlorine as a disinfectant, as well as those companies that use and store bulk anhydrous ammonia as an industrial refrigerant (dairy operations, food and pharmaceutical manufacturing, cold storage warehousing) or as fertilizer (agricultural cooperatives, fertilizer distribution).

You Can Run But You Can’t Hide: HIPAA Audits are Coming

On March 21, 2016, the HHS Office for Civil Rights (OCR) announced that it has begun “Phase 2” of audits of covered entities and their business associates for compliance with the HIPAA Privacy, Security and Breach Notification Rules (“HIPAA Rules”). Phase 1 was limited to a pilot program designed to develop a standard set of audit protocols.

Environmental Enforcement and Crimes – EPA and DOJ Announce New Initiatives and How They Affect You

On February 18, 2016, the U.S. Environmental Protection Agency announced its new National Enforcement Initiatives aimed at protecting public health and national pollution challenges for FY 2017-2019. These new initiatives, coupled with other recent significant announcements by the U.S. Department of Justice regarding a new emphasis for individual accountability for corporate malfeasance (“Yates Memo”) along with an expanded focus on DOJ’s and OSHA’s worker endangerment initiative, underscore a new paradigm shift for businesses and individuals in how EPA and the DOJ intend to enforce the nation’s environmental, health and safety (“EHS”) laws over the coming years.

EEOC Now Releasing Position Statements to Charging Parties

When an employee or former employee files a charge of discrimination against their employer, the EEOC has the authority to investigate. As part of the investigation, the EEOC asks the employer to submit a position statement explaining its side of the story.

Yet Another Data Sheriff In Town: CFPB Issues Its First Data Security Enforcement Action

On March 2, 2016, the CFPB finalized a Consent Order with Dwolla, an online payment platform, for violations of the CFPA.  It is the CFPB’s first enforcement action related to data privacy and security.  It is notable because Dwolla appears to have become an enforcement target due solely to its robust claims about security, and not due to any data breach.  It also places obligations on Dwolla’s Board to become responsible for data privacy and security in the company.

EU-US “Privacy Shield” Disclosed to the Public

The past week has seen two key developments in EU-US data privacy relations — the US enacted the Judicial Redress Act into law, and EU and US officials published the proposed EU-US Privacy Shield protocol for transatlantic data transfers.  While the Privacy Shield still has a gauntlet of EU bureaucracy to navigate, companies that relied on Safe Harbor should begin to plan now to comply with the robust new requirements of Privacy Shield, or implement other measures to satisfy the EU Privacy Directive to import EU data to the US.

A Tidal Wave of Meaningful Use Audits Hits the Midwest – 5 Steps to Take Now

The Centers for Medicare and Medicaid Services (“CMS”) provided over $20 billion in Meaningful Use incentive payments to hospitals and eligible professionals who attested to compliance with the EHR Incentive Program (the “Program”).

OSHA to Focus Enforcement at Manufacturing Facilities in Kansas, Missouri, and Nebraska

Earlier this month, OSHA Region VII announced that it was launching a new Region-wide Local Emphasis Program in Kansas, Missouri, and Nebraska designed to address certain industries viewed by OSHA as high-hazard manufacturing industries because the injury and illness rates exceed the average for the private sector.

EPA Releases National Enforcement Initiatives

Beginning October 1, 2016, the U.S. Environmental Protection Agency (EPA) will target its enforcement efforts in seven different focused areas, including three areas designed to protect water quality, two initiatives aimed at reducing toxic air pollutants and reducing air pollution, an initiative to reduce accidental chemical releases from industrial facilities, and an enforcement initiative geared at energy extraction activities.

Providers Need to Take the “Necessary Steps” for HIPAA Compliance

On February 3, 2016, the U.S. Department of Health and Human Services issued a statement and released the opinion of the Administrative Law Judge who found in favor of the Office of Civil Rights (“OCR”) determining that a home health agency, Lincare, Inc. (“Lincare”) violated the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule requiring Lincare, to pay $239,800 in civil money penalties. All covered entities should review the opinion and the OCR’s comments and begin taking any and all “necessary steps” to ensure HIPAA compliance and to make certain protected health information is adequately protected.

Three Key Take-Aways from CMS’ Final Rule on Reporting and Returning Overpayments

In the Centers for Medicare & Medicaid Services’ (“CMS”) Reporting and Return of Overpayments Final Rule, published February 11, 2016 (“Final Rule”), CMS has clarified some outstanding questions faced by healthcare providers and suppliers who may have received overpayments from the Medicare program.

President Obama Goes Big on Privacy and Cybersecurity

As part of a massive new initiative, Obama establishes the Federal Privacy Council and a national commission on cybersecurity

Making Contractor-Financing Work

Contractor-financed infrastructure projects can help the public sector tackle one of its most significant challenges. During the Great Recession, municipalities often opted to defer infrastructure maintenance and improvement projects to curtail budget shortfalls. Not surprisingly, the long-term useful life of neglected infrastructure suffered due to these fiscal constraints.

EU announces “Privacy Shield” agreement to replace Safe Harbor transatlantic data pact

  • U.S. organizations wishing to import data from EU subjects will be subject to much more “robust” privacy protocols
  • Final approval still faces hurdles

EEOC Seeks Additional Pay Information from Large Employers

In a nutshell – Last week, the EEOC unveiled its proposal to seek increased amounts of data from large employers in a stated effort to “combat the persistent gender gap in employee compensation.” Practically, the proposal revises the EEO-1 form. The EEOC’s proposed changes to the EEO-1 form will require all employers with 100 or more employees to submit the new EEO-1 form and provide substantial information regarding pay ranges and hours worked as well as salary data by race, gender and ethnicity.

HIPAA Hodgepodge

After more than ten years, HIPAA is still a hot topic. Here is a rundown of recent developments.

You’ve (Still) Got to Be Kidding: Supreme Court Holds ERISA Plan Participants May Ignore Reimbursement Provisions If They Spend the Money Fast Enough

The Supreme Court has handed down its latest in a long line of decisions on enforcing the reimbursement provisions of self-funded ERISA welfare plans. As evidenced by the Court’s lopsided 8-1 decision, the result in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan will not surprise those familiar with the law in this area. But as indicated by Justice Ginsburg’s indignant dissent, plan sponsors may find the decision downright bizarre. After all, it tells participants who double-recover for medical benefits paid by their employer’s health plan that they’re off the hook – if they spend the money fast enough.

DOL Guidance on Joint-Employer Standard Raises a Red Flag for Businesses

On Wednesday, January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (WHD) released an administrator’s interpretation that is intended to provide guidance to employers on the WHD’s position on the joint-employer standard under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

Another Court Rejects EEOC Position on ADA and Wellness Programs

Following the lead of Seff v. Broward County, another federal court has disagreed with the EEOC on the scope of an ADA exemption for employee benefit plans. In EEOC v. Flambeau, Inc., the court held that this benefit-plan “safe harbor” could be used to justify a wellness program that included both a health risk assessment and a biometric screening.

EPA Revamps Voluntary Self-Disclosure Audit Policy

Businesses and companies seeking to qualify for penalty mitigation and relief by submitting voluntary self-disclosures under EPA’s Audit Policy need to be aware of significant changes and modifications that took effect in December 2015.

IRS Extends ACA-Reporting Deadlines

In a belated Christmas present, the IRS on December 28th extended the deadlines for large employers and health insurers to comply with certain reporting requirements imposed by the Affordable Care Act (“ACA”).  Notice 2016-4 grants an additional two months to provide statements to employees, and an additional three months to transmit those statements to the IRS.

Criminal Prosecution of Worker Safety Violations – New DOJ Initiative to Increase Criminal Enforcement of OSHA Matters

On December 17, 2015, the U.S. Department of Justice (DOJ) announced a major new initiative to increase the number of criminal charges in worker endangerment and worker safety cases. Although the DOJ and the Occupational Safety and Health Administration (OSHA) have had a worker endangerment initiative for a number of years, the new changes are intended to bolster the likelihood and number of criminal prosecutions which historically have languished, according to DOJ, due to the OSH Act’s misdemeanor criminal provisions.

Manufacturer’s Corner: A Word on Warranties of Future Performance

Courts sometimes have trouble determining whether a warranty explicitly extends to future performance.  A recent case provides refreshing clarity on the issue.

Proposed Extension of New Markets Tax Credit

Despite increased optimism in Congress’s ability to pass this year an extenders bill which would make certain temporary tax provisions permanent, House Ways and Means Committee Chairman Kevin Brady, R-Texas, has prepared a two-year “fallback” bill. The proposed bill contains provisions pertaining to both the low-income housing tax credit (LIHTC) and new markets tax credit (NMTC).

How to Remove a General Partner from a Real Estate Partnership

Default is an unfortunate reality in any partnership.  Though no one enters a partnership expecting the other party to default on its obligations, it poses a risk that must be properly addressed to mitigate the limited partner’s risk before the partnership is ever established.  This article will address the rights and remedies available to the limited partner when the general partner has failed to live up to its commitments, and the procedures that should be followed in obtaining relief.

IRS Issues Guidance for Integrated HRAs

In a recent Chief Counsel Advice (CCA 201547006), the IRS has provided guidance for employers wishing to offer health reimbursement arrangements (“HRAs”) that both (1) provide reimbursements on a tax-free basis, and (2) satisfy the “market reform” requirements of the Affordable Care Act (“ACA”). In particular, this CCA focuses on HRAs (and similar “employer payment plans”) that reimburse employees for medical premiums paid for coverage under a health plan maintained by a spouse’s employer.

Prohibited Transactions: Co-investments Involving Qualified Retirement Plans

Under both ERISA and the Internal Revenue Code, certain transactions involving qualified retirement plans and “disqualified persons” or “parties in interest” (such as a plan trustees) are prohibited. One example of a “prohibited transaction” involves a plan fiduciary (e.g., plan trustee) using plan assets to purchase property for his own benefit or as an indirect loan because he cannot afford the purchase without the plan assets (ERISA § 406).

Sexual Orientation Discrimination Claims Not Available Under MHRA, But Availability of Sex Stereotyping Claims Still an Open Question

On October 27, 2015, the Missouri Court of Appeals for the Western District issued an opinion holding that sexual orientation was not a protected category under the Missouri Human Rights Act (“MHRA”) and, as a result, the plaintiff’s sexual orientation discrimination claim was not cognizable under Missouri law. See Pittman v. Cook Paper Recycling Corp., 2015 WL 6468372 (Mo. App. W.D. Oct. 27, 2015). However, Judge Gabbert wrote a lengthy dissenting opinion and the majority opinion identified but declined to reach the question of whether a claim for sexual orientation discrimination would be actionable under the MHRA if the claim is framed as a claim for unlawful sex-based stereotyping.

Manufacturer’s Corner: Climate Change and Consumer Protection Statutes

A new theory of securities fraud may prove important (and dangerous) to manufacturers.

Manufacturer’s Corner: Highlighting Some Important Distinctions Between UCC Article 2 and CISG

If you’re like many manufacturers who sell internationally, your standard terms and conditions provide that the UN Convention on Contracts for the International Sale of Goods (“CISG”) does not apply to your transaction.  But, maybe they don’t, or maybe your disclaimer is ineffective (it happens a lot).  In those instances, it’s important to understand where CISG differs from Article 2 of the Uniform Commercial Code, which typically covers sales of goods within the United States.

Manufacturer’s Corner: Delivery Terms Have Important Tax Implications for Missouri Manufacturers

Today’s column is prompted by a recent decision by the Supreme Court of Missouri, in which the Court denied a Missouri manufacturer a sales tax refund.

Contract with Foreign Buyer Calling for Delivery in Airworthy Condition may Imply Compliance with Airworthiness Standards of Foreign Nation

In a recent decision in Daiichi Koku Co. v. J.E. Aero, Inc., the U.S. District Court for the Northern District of Illinois considered a claim in which the plaintiff, a Japanese air carrier, had entered into an Aircraft Purchase Agreement to acquire a used aircraft from an Illinois broker.

Use-It-Or-Lose-It Vacation Policies in Colorado – The Colorado Department of Labor’s New Stance

Historically in Colorado, employers could safely implement use-it-or-lose-it vacation policies without fear of consequences from the Colorado Department of Labor (“CDOL”). Those days are officially over. Effective January 1, 2015, the CDOL assumed new enforcement authority with respect to claim for nonpayment of wages or compensation. Pursuant to that authority, the CDOL issued limited guidance this week with respect to use-it-or-lose-it vacation policies. That guidance indicates that employers can no longer implement use-it-or-lose-it vacation policies without consequences.

2016 Inflation Adjustments

Following recent announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2016. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of this card.

Spencer Fane Team Secures Court Order Striking St. Louis Minimum Wage Increase

On October 14, 2015, a St. Louis judge declared the city’s planned minimum wage increase invalid because it conflicts with the state minimum wage, currently set at $7.65 per hour. In August, the City of St. Louis passed an ordinance that would have eventually raised the minimum wage to $11.00 per hour by 2018. The first increase to $8.25 per hour was set to take effect on October 15, 2015.

Safe Harbor Under Siege – Is This The End For The EU-U.S. Safe Harbor?

The EU-U.S. Safe Harbor Framework (“Safe Harbor”) has provided companies on both sides of the Atlantic an efficient means to transfer personal information to and from the EU and the U.S. Recently, however, the Safe Harbor has come under attack. EU officials have opined that modern U.S. policy has eroded protections afforded under the Safe Harbor, resulting in the Safe Harbor no longer offering “adequate” protection as required by the EU Data Protection Directive 95/46/EC (“EU Directive”). Most recently, and perhaps the most concerning, is the opinion from Advocate General Yves Bot of the European Court of Justice (“ECJ”), whereby Bot recommended the Safe Harbor be declared invalid.

New Trademark Office Program Helps You Preserve Your Trademark Registration as Technologies Evolve

Starting September 1, the U. S. Patent and Trademark Office (USPTO) has instituted a pilot program to help you preserve your trademark registration if new technology replaces the format under which the underlying goods or services identified under the registration are offered for sale or provided to consumers.

4th Cir. Says It Is Unlawful to Fire Managers That Reasonably Refuse to Take Company’s Side During Internal Investigations

In DeMasters v. Carilion Clinic, the Fourth Circuit Court of Appeals clarifies what constitutes protected oppositional activities under Title VII and refuses to extend the FLSA’s “manager rule” to Title VII retaliation claims. This case serves as an important reminder to employers that managers relaying information about harassing conduct are protected by Title VII and cannot be disciplined for disagreeing with how the company is handling a particular complaint.

The Netflix Approach to HR – Could It Work for Your Company?

Here is a little food for thought for the week. As I’m sure many of you have read, Netflix has received much praise (and some criticism alike) for its approach to company culture, talent management, and HR issues.

A federal district court in California denies class certification to a nationwide putative TCPA class of consumers against a debt collector who allegedly made more than 500 million prohibited calls

The United States District Court for the Southern District of California recently issued an order denying class certification to a nationwide putative class of consumers against The CBE Group, Inc. (“CBE”), which alleged that CBE made over 500 million calls to these consumers’ cell phones without their prior express consent in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”).  Blair, et al. v. The CBE Group, Inc., No. 3:13-cv-00134-MMA-WVG (S.D. Cal. August 26, 2015).

The NLRB Redefines the Standard for Joint Employer Status

On August 27, 2015, the National Labor Relations Board (the “Board”) issued its opinion in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, and FRP-II, LLC d/b/a Leadpoint Business Services, and Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, 362 NLRB No. 186 (August 27, 2015), which overturned longstanding precedent regarding the standard for determining if a joint employer relationship exists.  

The Sixth Circuit sheds light on meaning of “prior express consent” under the TCPA in a case involving hundreds of calls to a debtor’s cellphone by a creditor using an autodialer

One thing that telemarketers and other companies that communicate with their customers by calling their customer’s cellphones crave is clarity under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.  The Sixth Circuit recently shed some light on the meaning of “prior express consent” under the TCPA in connection with calls by a creditor to its debtor’s cellphone in the case of Hill v. Homeward Residential, Inc., No. 14-4168 (6th Cir. August 21, 2015).

The Eleventh Circuit rules that Capital One is not a debt collector under the FDCPA with respect to defaulted credit card debt it acquired from HSBC

In the case of Davidson v. Capital One Bank (USA), N.A., No. 14-14200 (August 21, 2015), the Eleventh Circuit had occasion to decide whether a bank that collects on defaulted debt it acquired from another bank is a “debt collector” under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p.

Manufacturer’s Corner: Conflict Mineral Reporting Requirement Still Illegal

On August 18, 2015, the D.C. Circuit Court of Appeals, sitting en banc, upheld its prior order striking a portion of the SEC’s conflict mineral rule.

The DOL Announces Guidance on Wage and Hour Misclassification – Employees vs Independent Contractors

The Department of Labor recently released new guidance (Administrator’s Interpretation No. 2015-1) on how it will decide whether a worker is properly classified as an employee or an independent contractor. Although the factors discussed in the Administrator’s Interpretation are not new, the DOL’s broad reading of the term “employee” under the Fair Labor Standards Act and the heightened focus on the “economic realities” of the business relationship between the worker and the purported employer indicate that wage and hour misclassification will be an enforcement priority for the DOL going forward.

The EEOC Weighs In on Sexual Orientation and Title VII

On July 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) issued a 3-2 decision finding that under Title VII, sex discrimination includes actions based on sexual orientation. The decision involved an appeal from a Federal Aviation Administration (“FAA”) dismissal of a sexual orientation discrimination complaint. The issue before the EEOC was whether a complaint alleging discrimination based on sexual orientation in violation of Title VII lies within the EEOC’s jurisdiction. Apparently buoyed by the U.S. Supreme Court’s recent decision on same sex marriage, the EEOC unequivocally answered that question with a resounding “Yes.”

Have you revised your Reg E disclosures to take advantage of the recent changes in Kansas Law?

Effective July 1, 2015, a Kansas bank can reduce its liability for fraudulent electronic fund transfers on a consumer account by revising its Reg E disclosures.

Certain Mid-Sized Employers May Have Even MORE Time to Comply with the ACA’s Play-or-Pay Rules

Thanks to a special transition rule, employers with 50 to 99 full-time employees (including full-time equivalents) are generally shielded from the Affordable Care Act’s “play-or-pay” penalties until January 1, 2016. Moreover, in a wrinkle that is easily overlooked, any such “mid-sized” employer that already sponsors a health plan operating on a non-calendar-year basis has even more time to comply with these rules.

Manufacturer’s Corner: The Danger of Conditioning Your Sale on the Buyer’s Acceptance of Your Terms

If you review the terms and conditions given by many manufacturers in their invoices (including, probably, yours), you likely will find a provision that says something to the effect of “we agree to sell you this product if, and only if, you agree to each of these terms and conditions.”  It’s a common term, and there’s a good reason for it: it can counteract standard form language in the buyer’s purchase order that you don’t like.

Using Alack’s “Magic Word” in Exculpatory Contract Provisions

There is almost never such a thing as a magic word anymore.  In medieval England, people would recite things three times to get magical protection (“third time’s the charm”).  Similarly, in the earliest days of the law, parties would write contracts “under seal” that protected them, regardless of whether the contract was otherwise valid.  That is what a magic word does; it protects you just by being there.  Today, the law hates magic words; courts constantly dig into the hidden meaning behind material terms and the intent and understanding of the parties who use them.  Because there is almost never such a thing as a magic word these days, when one does occur business owners would do well to take note.

Supreme Court Upholds Limit On Royalties To Life Of Patent, But Other Strategies Exist To Extend Life Of Compensation

A patent issued under the U.S. Patent Laws has a finite life, which is 20 years from the date of filing.  A strategy to monetize a patent through licensing must take into consideration that finite life span because after the 20 year patent term, the underlying invention falls into the public domain.  A patent holder may not continue to receive license royalties after the patent’s expiration, as long ago decided by the U.S. Supreme Court in Brulotte v. Thys Co., 379 U. S. 29 (1964).

EPA’s Air Rules Must Consider Costs, Says U.S. Supreme Court

On June 29, 2015, the United States Supreme Court announced its decision in Michigan v. Environmental Protection Agency, holding that EPA unreasonably interpreted a provision of the Clean Air Act regarding the regulation of power plants under the EPA’s Mercury and Air Toxics Standard (MATS) (also referred to as the Utility MACT).

White Collars May Turn Blue: Prepare for New Rules on Overtime Eligibility

Responding to a call by President Obama last year, the U.S. Department of Labor this week issued a proposal to update the regulations governing which employees qualify for the “white collar” exemptions to federal minimum wage and overtime pay requirements. Currently those exemptions – for executive, administrative and professional employees – require the workers to meet job duties-related tests and receive a salary of at least $455 per week, or $23,660 annually. Certain computer and outside sales employees are also exempted.

Same-Sex Marriage Ruling Impacts Benefit Plans (Again)

On Friday, June 26, 2015, the Supreme Court published its ruling in Obergefell v. Hodges, holding (by a 5 to 4 margin) that the Fourteenth Amendment requires a state to license marriages between two people of the same sex, and to recognize any such marriage that is lawfully licensed and performed out-of-state. As a result, all (remaining) state laws or constitutional amendments banning same-sex marriage are now invalid.

Manufacturer’s Corner: Breach of Warranty Claims and CGL Coverage

A court recently held that a CGL insurer owed a duty to defend its insured accused of breaching express and implied warranties.

Supreme Court Upholds Affordable Care Act Subsidies

The Supreme Court announced today that it has upheld Affordable Care Act (“ACA”) subsidies for insurance purchased on federally-facilitated exchanges. By a 6 to 3 vote, the Court concluded that the statute allows for subsidies on any exchange created under the ACA. The decision in King v. Burwell may come as a disappointment to some who hoped that the subsidies would be struck down and that the entire ACA would unravel in the aftermath.

The Supreme Court Enters Decision in King v. Burwell

This morning, the U.S. Supreme Court entered the much anticipated decision in King v. Burwell.  In a 6-3 decision, the Supreme Court held that the subsidies “are available to individuals in States that have a Federal Exchange.”

EPA Issues Final Vapor Intrusion Guidance and Declares EPA, not OSHA, in Charge of Indoor Air Quality at the Workplace

At long last, after operating under the draft Vapor Intrusion Guidance of 2002 for almost 13 years, EPA finally issued final vapor intrusion guidances on June 11, 2015, a specific guidance for petroleum vapor intrusion at leaking underground storage tank sites, and a more general technical guide for assessing and mitigating the vapor intrusion pathway at chlorinated solvent sites. (Technical Guide). In response to criticism that EPA did not subject the guidances to the public scrutiny of the administrative rule-making process, EPA allowed for a longer public comment period than is customary for guidances. Additionally, both vapor intrusion guidances were the subject of extensive discussions between EPA, various sister agencies, private industry, environmentalists, and the White House.

Fano Authors ‘Tips to Avoid Discrimination Lawsuits’ in Bloomberg BNA

Spencer Fane Partner Ron Fano recently authored an article in the June 12th edition of Bloomberg BNA’s Corporate Law & Accountability Report this past week, offering advice on the prevention of discrimination lawsuits, which can be both costly and damaging to a company’s reputation.

Manufacturer’s Corner: Manufacturer Gets Second Chance Following Unsuccessful Litigation With Supplier

This is a story about a U.S. manufacturer who got into a dispute with its Chinese supplier. 

Clarity for Colorado Employers: Colorado Supreme Court Decides that Marijuana Use is Not a “Lawful” Off-Duty Activity in Colorado

The Colorado Supreme Court has now heard and decided a case (Coats v. Dish Network) critical to Colorado employers in terms of whether the legalization of marijuana in Colorado mandates an exception to zero tolerance drug policies. The Court decided in favor of the employer, ruling that marijuana use, at least for medicinal purposes, is not a lawful off-duty activity for purposes of receiving protection under Colorado’s lawful activities statute even though state law has legalized the use of marijuana for medicinal and recreational purposes. As a result, employers may continue to maintain and enforce zero tolerance policies that include marijuana within their scope.

Home Builder’s Stormwater Violations at Construction Sites Result in $1 Million Enforcement Settlement

A residential home builder, Garden Homes, has agreed to resolve alleged stormwater violations with the EPA and U.S. Department of Justice, according to a June 8, 2015, Federal Register Notice. The settlement involves a civil penalty of $225,000 and a Supplemental Environmental Project valued at $780,000 involving the acquisition of 108 acres of land for preservation.

Warehouse and Distribution Center Fined $3 Million for Anhydrous Ammonia Releases from its Industrial Refrigeration System

On June 2, 2015, the U.S. EPA and DOJ announced a $3 million dollar settlement with Millard Refrigerated Services, a company specializing in refrigeration and distribution services to retail, food service, and food distribution companies. The settlement resolves alleged violations of the EPA’s Risk Management Program, the Clean Air Act’s General Duty Clause, and CERCLA and EPCRA release reporting requirements stemming from three releases of the industrial refrigerant anhydrous ammonia from the facility’s Mobile Marine Terminal in Alabama. Among the release incidents was an August 2010 release involving hospitalization and medical treatment of individuals who were offsite working on decontaminating ships in response to the 2010 oil spill in the Gulf of Mexico.

Kansas City Passes Ordinance Requiring Building Owners to Disclose Energy and Water Usage

On June 4, 2015, by a 12-1 vote, the City Council of Kansas City, Missouri, passed the Energy Empowerment Ordinance (No. 150299) that will require building owners to disclose energy and water usage.

Western District of Missouri Bankruptcy Court Finds No FDCPA Violation for Proof of Claim Filed on Time-Barred Debt

Recently, several courts across the country have considered whether filing a proof of claim on debt that is barred by the statute of limitations violates the Fair Debt Collection Practices Act (“FDCPA”). The increased attention on this issue was sparked by the Eleventh Circuit’s decision in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014). The Eleventh Circuit held that filing a proof of claim on debt that is barred by the applicable statute of limitations violates the FDCPA. After the Eleventh Circuit’s decision, many other courts have decided the issue, and the results of these cases have been mixed. Last week, the Bankruptcy Court for the Western District of Missouri weighed in, and it found that there was no violation of the FDCPA. Dunaway v. LVNV Funding, LLC, No. 14-04132-drd, Adv. No. 14-4132, Doc. 29 (Bankr. W.D. Mo. May 19, 2015).

“Practically Speaking” the OIG Releases Compliance Guidance for Health Care Boards

A little over a month ago the Office of Inspector General, U.S. Department of Health and Human Services (“OIG”), in collaboration with a number of other independent health care organizations, issued what it deemed to be “practical guidance for health care governing boards on compliance oversight.” This document is intended to assist governing boards in carrying out their compliance program oversight function under the applicable health care laws, rules and regulations.

Application of Equal Credit Opportunity Act’s Notice Provisions to Delinquent Borrowers

A California court recently found that delinquent borrowers may bring a claim under the Equal Credit Opportunity Act (“ECOA”) when a lender does not respond to an application for a loan modification within thirty days. MacDonald v. Wells Fargo Bank, N.A., No. 14-cv-04970 (N.D. Cal. Apr. 24, 2015).

New Rule Issued by EPA and the Army Corps of Engineers Expands Federal Jurisdiction over Waters and Wetlands

On May 27, 2015, EPA and the Corps of Engineers released a final rule that expands federal jurisdiction under the Clean Water Act. The rule expands on existing law by asserting jurisdiction by rule over all tributaries to traditional navigable waters, without regard to the quantity or timing of flow.  Tributaries are defined in the rule as “waters that are characterized by the presence of physical indicators of flow – bed and banks and ordinary high water marks – and that contribute flow directly or indirectly to a traditional navigable water, an interstate water, or the territorial seas”.

Manufacturer’s Corner: FTC Announces Nothing

In 2011, the FTC requested public comment regarding its interpretations, rules, and guides issued under the Magnuson-Moss Warranty Act.  After four years of hard work, the FTC today issued a press release headlined “FTC Will Keep Consumer Product Warranty Rules in Current Form with Some Modifications.”

EEOC Begins Roll-Out of Digital Charge System. Going Forward, Administrative Filings Submitted Through Online Web Portal.

The EEOC recently announced that it will begin communicating with employers through an online Digital Charge System rather than regular mail and e-mail. The EEOC receives roughly 90,000 charges of discrimination per year. The proposed purpose of the “ACT Digital” pilot program is to ease the administrative burden of handling those charges and to reduce the use of paper submissions and files.

Can a Rule 68 offer of judgment that offers complete relief to the named plaintiff in a putative class action moot the entire case? While federal courts continue to reach different conclusions, the Supreme Court may finally weigh in

One tactic often used with varying degrees of success to thwart putative class actions brought under various federal statutes is to file an early offer of judgment under Rule 68 that provides the named plaintiff or plaintiffs complete relief in an effort to moot the putative class claims at the inception of a class case.

It’s Unanimous: The Fiduciary Duty to Monitor Has Teeth

The United States Supreme Court gave considerable comfort to defined contribution plan participants – and their lawyers – who sue plan fiduciaries for failing to keep track of plan investment options. In a unanimous decision handed down on May 18, 2015, the Court held in Tibble v. Edison International that ERISA fiduciaries have a “continuing duty” to monitor investment options, and that plan participants have six years from the date of an alleged violation of that duty to file a lawsuit against the plan’s fiduciaries. This ruling significantly undercuts the utility of a statute of limitations defense that had been successfully deployed by plan fiduciaries in previous cases, and creates fertile ground for more litigation.

Missouri LIHTC Update: MHDC Weighs Domestic Violence and LIHTC Concentration Proposals

Recently, Missouri Treasurer Clint Zweifel urged the MHDC to use its LIHTC allocation to help combat affordable housing issues that are exacerbated among victims of domestic violence.

Manufacturer’s Corner: Eighth Circuit Offers Expansive View of Economic Loss Doctrine

If you regularly read this column, you know that one of the things we spend a lot of time discussing is working appropriate protections into your contracts.  Plaintiffs’ attorneys understand that, and often try to work around those protections by restyling breach of contract or breach of warranty actions as tort claims – that is, claims for negligence or fraud or the like.

Courts May Review EEOC Conciliation Efforts, According to Supreme Court

In an employer friendly decision, last week the U.S. Supreme Court ruled unanimously that courts may review whether the Equal Employment Opportunity Commission (EEOC) has satisfied its duty to attempt pre-suit conciliation.

Snail Mail: A whale of a fail that will make your borrowers bail, your lending business flail, and leave you on the rail.

With the upcoming regulatory changes going into effect on August 1st, it is more important than ever for mortgage lenders and title companies to have an electronic disclosure system to handle the disclosure requirements promulgated by the new regulations.

What does it mean to be an “Additional Insured?”

The answer lies in the details of the underlying contract and the details of the underlying insurance policy. Today more and more companies are focusing on risk transfer mechanisms within the contracts they have with their vendors, suppliers, contractors and sub-contractors.

Think You Can Avoid RESPA by focusing on construction and land loans? Think again, August 1st is coming!

The Real Estate Settlement Procedures Act (“RESPA,” implemented by Regulation X) and the Truth-In-Lending Act (“TILA,” implemented by Regulation Z) have long been a bane for mortgage lenders as they attempt to interpret the statutes associated with each law and apply them to real-world lending.

Manufacturer’s Corner: Warranties of Future Performance

File this one under “does your warranty really say what you think it says?”

A federal district in Pennsylvania dismisses a putative FDCPA class action based on the filing a proof a claim on a time-barred debt in a Chapter 13 bankruptcy

I recently wrote about a decision from a federal district court in Alabama that sidestepped the Eleventh Circuit’s Crawford decision by finding that the Bankruptcy Code (the “Code”) and the Fair Debt Collection Practices Act (“FDCPA”) were in irreconcilable conflict, and the FDCPA gave way to the Code on the question of whether the mere act of filing a proof of claim on a stale debt in a Chapter 13 bankruptcy violated the FDCPA.

Fracking Claims Get Their Day in Court as Lone Pine Orders Axed in Colorado

Lone Pine orders have become an increasingly common case management tool employed by trial courts to help streamline proceedings for defendants and the court while maintaining equity for the plaintiffs. Lone Pine orders are most often used in cases involving complex issues and multiple plaintiffs, but are becoming more widely employed in a greater variety of cases.

EEOC Proposes ADA Rules on Wellness Program Incentives

The EEOC has issued proposed regulations providing guidance on the extent to which the ADA permits employers to offer incentives to employees to promote participation in wellness programs that are employee health programs. The new guidance is similar, but not identical, to the rules governing incentives for health-contingent wellness programs under HIPAA. Employers should review their wellness programs to ensure compliance with both laws.

Manufacturer’s Corner: The “Ambush Election” Rule Is In Effect

Beware union organizers loitering around your premises!

Want immediate judicial review of a Corps of Engineers’ wetlands jurisdictional determination? Pick a property within the Eighth Circuit (Minnesota, Iowa, Missouri, Arkansas, North Dakota, South Dakota and Nebraska)

On April 10, 2015, the U.S. Court of Appeals for the Eighth Circuit gave a northwestern Minnesota peat mining operation something the company wanted very much — judicial review of a wetlands jurisdictional decision issued by the U.S. Army Corps of Engineers. Hawkes Co., Inc., et. al v. U.S. Army Corps of Engineers, slip op. No. 13-3067 (8th Cir. April 10, 2015). In so doing, the Eighth Circuit built on the U.S. Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012), which had made Clean Water Act administrative orders subject to court scrutiny, and continued the Eighth Circuit’s focus on curtailing what it sees as government agency overreaching, as recently expressed in Iowa League of Cities v. EPA, 711 F.3d 844, 868 (8th Cir. 2013).

Labor and Employment in Nebraska – A Guide to Employment Laws, Regulations, and Practices (Matthew Bender)

Josh Dickinson and Brian Peterson, authors of treatise concerning Nebraska law on labor and employment.

New Rule Accelerating Union Organizing Takes Effect April 14th

A new NLRB rule, known by pro-business critics as the “ambush election rule,” takes effect on Tuesday, April 14th. The rule makes it easier for unions to organize unrepresented employees through a dramatically shorter time period between the union’s filing of a representation petition and the election. Congress passed a resolution to block the rule in March, but in another victory for labor organizations, President Obama vetoed the Congressional measure.

Missouri is Utilizing Historic Tax Credits to Revitalize Downtown Kansas City

Over the last fifteen years, you may have observed significant construction and rehabilitation of commercial and residential real estate in downtown Kansas City. To finance many of these projects, developers utilize both Federal and Missouri Historic Tax Credits (HTCs).

EPA Revises its Supplemental Environmental Project – SEP Policy

On March 10, 2015, EPA issued a new revised 2015 Update to its Supplemental Environmental Project (SEP) Policy, thereby superseding prior SEP policies.

IRS Eases Correction Rules for Missed Elective Deferrals

The IRS has just given sponsors of 401(k) and 403(b) plans a number of additional options for correcting a failure to honor an employee’s election to defer a portion of his or her pay. These new options, as announced in Revenue Procedure 2015-28, will be particularly helpful to sponsors of plans that provide for automatic enrollment (including those with an automatic escalation feature).

Federal Judge in California brings down the curtain on a FCRA class action against Paramount Pictures

Class actions alleging technical violations of the Fair Credit Reporting Act (FCRA) against employers who obtain consumer reports on job applicants are all the rage, generating large settlements and headlines (at least in legal circles).

IRS to Plan Sponsors: You Must Retain Documentation for Loans and Hardship Withdrawals

Most sponsors of defined contribution plans rely on a third-party administrator (a “TPA”) to handle participant loans and hardship withdrawals—typically through the TPA’s website. However, in guidance issued last week, the IRS cautions that the sponsor—not the TPA or the participant—is responsible for maintaining documents proving that those transactions comply with the law.

Promoting LIHTC Allocation Beyond Traditional Low-Income Areas: MHDC Proposal and Supreme Court Case Potentially at Odds

While the Missouri Housing Development Commission (“MHDC”) considers a proposal to encourage LIHTC allocations away from areas with high concentrations of low-income housing, the Supreme Court of the United States is considering depriving plaintiffs an important tool used for enforcement of the Fair Housing Act—which may have the effect of discouraging allocating agencies from diminishing high concentrations of low-income housing.

Manufacturer’s Corner: Warranty Disclaimers By Intermediate Sellers

If you’re like many manufacturers, you have no dealings with the end user of your product.  Rather, you sell to a distributor or other intermediate seller, who then sells your product to the end user.  We have previously discussed disclaiming your implied warranties against your intermediate buyer and whether that disclaimer travels “downstream” to the end user, but we haven’t addressed whether a disclaimer made by the intermediary can protect you in a suit by the end user if, say, you failed to disclaim your implied warranties yourself or if for some reason they are not effective against the end user.

The bona fide error defense to FDCPA claims is alive and well in the Eleventh Circuit

In the case of Isaac, et al. v. RMB, Inc., et al., No. 14-11560 (11th Cir. March 17, 2015), the Eleventh Circuit recently upheld summary judgment in favor of a debt collector based on the affirmative defense of bona fide error.  The case presents a good opportunity to see what type of evidence is needed to prevail on the defense.

Another Court Enforces DOL’s Electronic SPD Rules

At some point, as electronic communication becomes the norm – and as paper virtually disappears from the workplace – we will surely see a softening of the conditions imposed by the Department of Labor (“DOL”) on the electronic distribution of summary plan descriptions (“SPDs”). But a recent decision by a New York federal court confirms that we are not yet at that point.

Young v. UPS – An Important Case on Pregnancy Discrimination

On March 25, 2015 the United States Supreme Court issued its opinion in Young v. United States Parcel Service. This is an important case because it clarifies what constitutes unlawful discrimination under the Pregnancy Discrimination Act (“PDA”). Employers should carefully review this case and ensure that they are not inadvertently discriminating against pregnant employees by refusing to accommodate their temporary physical restrictions.

Proceeds from Insurance Settlement Outside the Scope of Article 9

The Bankruptcy Appellate Panel for the First Circuit recently held that a creditor holding a perfected security interest in accounts and payment intangibles did not have a perfected security interest in the proceeds of an insurance settlement.

Manufacturer’s Corner: The Interplay Between Limited Remedies and Damages Limitations

I previously have urged you to limit the remedies available under your express warranty (e.g. to repair or replacement), and to disclaim liability for incidental and consequential damages.  Here, we’ll discuss a common argument made by people who want to render your efforts meaningless.

Supreme Court Issues Opinion on TILA Rescission Rights

We previously provided an update on developments concerning the right of rescission granted under the Truth in Lending Act (“TILA”). The United States Supreme Court recently issued a consumer-friendly decision regarding the rescission process.

Pat Whalen Publishes Data Breach Notification Article in BankNews

Spencer Fane Chairman Pat Whalen was featured as a guest author in this month’s issue of BankNews magazine providing insights and updates on the protocol for handling data breach notifications. The article, titled “When to Send a Data Breach Notification,” discusses the laws surrounding security breaches and the responsibility of companies to determine when notification of customers is both necessary and required by law.

Top 10 Things You Need to Know About Phase I Environmental Site Assessments

In a recent Midwest Real Estate News guest column, Spencer Fane Partner Andrew Brought shared his knowledge and insight on Phase I Environmental Site Assessments (ESAs) with readers. The article outlines the role and common misconceptions of environmental site assessments in property transactions and provides 10 important facts on ESAs as well as their impact on buyers and sellers involved in real estate transactions.

A federal district court sidesteps Crawford in dismissing claim for FDCPA violation based on filing a proof of claim on a time-barred debt in a Chapter 13 bankruptcy

In a 2014 decision rued by debt collectors everywhere, the Eleventh Circuit in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014) ruled that filing a proof of claim to collect a time-barred debt in a Chapter 13 bankruptcy violated the Fair Debt Collection Practices Act

Policy Update: FMLA Rights Extended to Same-Sex Spouses

The U.S. Department of Labor’s (DOL) new rule broadening the definition “spouse” under the Family and Medical Leave Act (FMLA) to provide legally married same-sex couples the same rights under the law as married opposite-sex couples becomes effective on March 27, 2015.

Davidson v. Henkel: A Rather Taxing Decision

A recent decision by a Michigan federal trial court serves as a warning to employers that their failure to shield participants in nonqualified deferred compensation plans from adverse tax consequences may subject the employers to unanticipated liability. Although this decision (in Davidson v. Henkel Corporation) involved FICA taxation, the court’s reasoning would seem to apply equally to the 20% penalty tax and interest assessments triggered by a violation of Code Section 409A.

Manufacturer’s Corner: Just What Is the “Ordinary Use” for a Product Anyway?

For this installment, we turn to an aspect of the implied warranty of merchantability that has not gotten its fair share of attention here: what is “the ordinary purpose” for which your product is used?  It seems like a simple question, but it can be deceptively tricky.

Supreme Court Makes It Easier for Administrative Agencies to Change “Interpretive Rules”

Last week, the Supreme Court of the United States held that Interpretive Rules issued by administrative agencies do not have to undergo the notice-and-comment rulemaking procedures of the Administrative Procedure Act (“APA”) even if they contradict or substantially change previously issued Interpretive Rules. Perez v. Mortgage Bankers Association, et al., —S.Ct.—, 2015 WL 998535 (Mar. 9, 2015). Specifically, the Court held that the Department of Labor was allowed to change its position on whether mortgage-loan officers were exempt from the overtime provisions of the FLSA even though (1) it did not follow the APA’s notice-and-comment rules prior to changing its position and (2) it had taken the exact opposite position just four year earlier.

Manufacturer’s Corner: Merchants, Battles of the Forms, and Forum-Selection Clauses

If you read this column with any regularity, it will not surprise you that I was thrilled to read this introduction to a recent court opinion: “The motions to dismiss in this case present a difficult legal issue, as if a civil procedure professor and a Uniform Commercial Code professor conspired on a law school exam question[.]”

Anthem Security Breach May Require Plan Sponsor Action

The well-publicized cyber-attack on Anthem, Inc.’s information technology system may require employers to take prompt action to protect the rights of their health plan participants. Although neither the scope nor the cause of the security breach has yet been determined, the attack has been described as both “massive” and “sophisticated.”

No Missouri Use Tax Due When Aircraft is Purchased for Immediate Lease to a Missouri Common Carrier

In its recent ruling in Five Delta Alpha, LLC v. Director of Revenue, the Missouri Supreme Court has ruled that an aircraft transfer is exempt from Missouri use tax under the “sale or resale” exemption even when the aircraft is leased rather than sold to a Missouri common carrier.

CFPB Proposes Changes to Increase Mortgage Lending in Rural Markets

The Consumer Financial Protection Bureau recently proposed amendments to regulations that would broaden the definition of “small creditor” in an attempt to increase mortgage lending to rural and underserved markets. Currently, small creditors are able to make loans with slightly less restriction than larger creditors. The proposed changes would make this exemption available to a greater number of creditors.

Potential Liability for Quoting LIBOR Rates

In drafting loan documents, banks frequently cite to an index rate as the source of the interest rate governing a particular loan. One of the most commonly cited rates is LIBOR.

Next Generation Compliance—EPA Strategy to Delegate Enforcement to Third Parties?

In a recent January 2015 Memorandum to EPA’s Regional Enforcement Managers from Cynthia Giles, EPA Assistant Administrator for Enforcement, EPA is touting its Next Generation Compliance strategy as “an integrated strategy” intended to “bring together the best thinking from inside and outside EPA.” 

IRS Grants Limited Transition Relief to Small-Employer Premium Reimbursement Arrangements

In a series of notices and FAQs, the IRS has clearly enunciated its view that an employer’s reimbursement of an employee’s premiums for individual health insurance violates certain provisions of the Affordable Care Act (“ACA”). While reiterating this key point, Notice 2015-17 does grant a limited period of relief for smaller employers. Nonetheless, even those employers should be working toward a June 30 deadline to comply with these ACA constraints.

Illinois court rules that engineering firm that prepared and recorded plat for new subdivision is not entitled to a mechanic’s lien

An Illinois appellate court recently had an opportunity to decide whether an engineering firm hired to plat undeveloped land for a new subdivision was entitled to file and enforce a mechanic’s lien after the firm was not paid in full for its work.

Manufacturer’s Corner: The West Coast Port Labor Dispute and You

Manufacturer’s Corner. So, there’s a big shipping backlog forming out west while port owners and the longshoremen work a few things out.  How’s that affecting your supply contracts?

Home mortgage lenders hire law firm to send 88,937 collection letters to defaulted borrowers: Borrowers allege this violated the FDCPA and a federal judge certifies the class

In Lori Jo Vincent, et al. v. The Money Store, Inc. et al, No. 03 cv 2876 (S.D.N.Y.  February 2, 2015), the United States District Court for the Southern District of New York certified a class of home mortgage borrowers who defaulted on their loans and received uniform “breach letters” from a law firm sent on behalf of the defendant mortgage servicing company and the defendant lenders. 

“Home Care Rule” Called Into Doubt by Federal Courts

A recent district court opinion invalidated the Department of Labor–Wage and Hour Division’s “Home Care Rule,” a regulation slated to become effective this year that would alter the scope of an exemption from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime provisions. Health care employers that provide in-home care or in-home medical services to individual customers should watch this case closely. Whether the Home Care Rule is valid and enforceable will have major implications for the viability of many home care businesses.

New NLRB “Quickie” Election Rules – To Become Effective April 14, 2015

In December of 2014, the National Labor Relations Board (“NLRB”) issued new regulations that govern how union representation elections will be conducted. The new rules are set to become effective on April 14, 2015.  Although the U.S. Chamber of Commerce and business groups are challenging the new regulations, Employers should pay careful attention to the new rules because the rules will  require Employers to act much more quickly and to be proactive when responding to a union organizing campaign and subsequent election. This blog post highlights key aspects of the new rules.

Alter Ego and Joint Venture Theories Permitted Under Montreal Convention

The Montreal Convention provides that carriers are liable for damages when a passenger is injured or killed on an international flight. When a carrier lacks the assets to cover these damages, however, claimants may have no recourse unless liability under the Convention may be applied against other parties. A recent ruling by the U.S. District Court for the Southern District of Florida has endorsed a theory for expanded liability in a noteworthy decision.

IRS Now Accepting “Cycle E” Determination-Letter Applications

The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle E” of the determination-letter program. These include plans sponsored by employers having either a “5” or “0” as the last digit of their employer identification number, as well as governmental plans that elected not to file during Cycle C.

Manufacturer’s Corner: Disclaiming Implied Warranties to Remote Purchasers

As I’ve noted before in these columns, an implied warranty disclaimer is an essential part of your terms and conditions.  But giving an effective disclaimer is sometimes easier said than done, especially when you do not sell your product directly to the end user, but rather through a wholesaler, retailer, or other intermediary.

Manufacturer’s Corner: President Proposes New Federal Data Breach Notification Law

Shortly before issuing his State of the Union address, President Obama released a proposed federal law mandating notification to individuals whose personal information is compromised in certain data breaches.  Not long ago, I wouldn’t have written about this issue in a Manufacturer’s Corner column, but since I recently decided that the Internet of Things will expose manufacturers to litigation over data privacy, it seems appropriate.

A Sham, a Waste? EPA’s New Recycling and Hazardous Waste Rules Finalized

Last week, on January 13, 2015, EPA issued its new “Definition of Solid Waste” Final Rule in the Federal Register at 80 Fed. Reg. 1694. This new rulemaking will have significant impacts regarding how secondary hazardous materials are recycled and exempted from the hazardous waste regulations. Unless challenged (and by all accounts it appears at least certain aspects may be litigated based on initial comments by various industrial sectors) the rule becomes effective on July 13, 2015, where EPA is the authorized implementing agency (Iowa, Alaska, American Samoa, and Puerto Rico and the U.S. Virgin Islands). Because RCRA is a federally delegated program, other states will have to adopt the more stringent aspects of the rule discussed below.

Unfair Competition: Righting Wrongs

If you’re in business, chances are you’ve experienced unfair marketing tactics by one or more of your competitors. Such tactics may include false or misleading advertising or representations concerning the nature or quality of the competitor’s products or services. Or, they may consist of false or misleading statements about what you sell.
You need not stand by while your competition engages in such underhanded tactics.

Is a communication between a debt collector and a credit reporting agency a communication “in connection with the collection of any debt” for purposes of the FDCPA?

In a case in which the Eighth Circuit found against a debtor on her claim against a collection agency based on the FDCPA, the court nevertheless adopted a standard followed by other circuits in defining when a communication is “…in connection with the collection of any debt” for purposes of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seqSarah McIvor v. Credit Control Services, Inc., No. 14-1164 (December 4, 2014).

The Sixth Circuit rules that making an offer to settle a valid but time-barred debt may give rise to an FDCPA violation.

In a case that will likely cause debt collectors seeking to collect time-barred obligations grave concern, the Sixth Circuit recently ruled that making an offer to settle a time-barred debt at a discount could mislead an unsophisticated consumer to believe the debt could be enforced in court in violation of the Fair Debt Collection Practices Act.  Buchanan v. Northland Group, Inc., No. 13-2523 (January 13, 2015).

Manufacturer’s Corner: New Law Exempts Non-Financial End Users From Margin Requirements For Uncleared Swaps

Here is good news for a certain subset of Manufacturer’s Corner readers.

Commercial Receivership Bill Introduced to Missouri Senate

On January 12, 2015, the Missouri Commercial Receivership Act was introduced to the Missouri Senate as SB 216.

Manufacturer’s Corner: A Word on Consumer Class Actions

This is not a litigation column, but I’m a trial attorney, so litigation is always on my mind.  I’ve been hearing a lot of chatter lately about consumer class actions.  Specifically: what must a putative consumer class do to show that the class members are ascertainable – that is, that the court and the lawyers and the class members can figure out who is in the class and who is not.

Updated Proposed Federal 30-day “Shot Clock” For Data Breach Notification

As we wrote yesterday, President Obama has called for legislation (the Personal Data Protection and Privacy Act) that will require notice of a data breach within 30 days of discovery by your company.

Proposed Federal 30-day “Shot Clock” For Data Breach Notification

In November we discussed the standards in place for whether and when a consumer must be notified of a data breach. The current answer is that almost all states have laws requiring notification, but the format and timing of the notification vary from state to state.

Manufacturer’s Corner: Don’t Fall For Your Own “No Oral Modification” Clause

Here’s a thing that probably appears in your standard terms and conditions: “This agreement cannot be modified or rescinded, except in writing signed by an authorized agent of [your company].”  You can go ahead and check.  It’s probably down toward the bottom, above the miscellaneous provisions like choice of law.

Court Rejects Claim That Fractional-Share Owner Holds An Interest In Operator’s Entire Fleet

The bankruptcy of fractional-share operator Avantair triggered a dispute regarding exactly what property its fractional-share owners held. Like other fractional-share operators, Avantair operated a fleet of airplanes, selling fractional shares in each of them to individual participants.

Contract Language Calling For Sale “As Is” Prevails Over Airworthiness Provision When Prepurchase Inspection Fails To Note Condition Compromising Airworthiness

The aircraft buyer in McMahan Jets, LLC v. Roadlink Transportation, Inc. discovered that a contract term calling for delivery of the aircraft “in airworthy condition” was not sufficient to protect it from aircraft discrepancies found after the buyer’s prepurchase inspection and acceptance of the aircraft.

Banks: The Forgotten Victim of a Data Breach

Data breaches have become a phenomenon of late—with news seemingly breaking everyday on the latest victim and the potential harm to consumers. Often overlooked, however, is the impact that each new data breach has on banks.

New OSHA Reporting and Recordkeeping Rules Take Effect

On January 1, 2015, new OSHA regulations took effect that broaden the scope of work-related injuries that employers must now report to OSHA.

Don’t Forget About HIPAA When Addressing Data Security

Among the many data security and breach laws that exist, covered health care providers and health plans must also contend with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

No Good Deed…: Allowing Part-Time Employees to Make Health FSA Contributions May Trigger ACA Penalties

When it comes to health coverage, many employers draw a distinction between full-time and part-time employees. To be eligible to enroll in the employer’s health plan, an employee must work a minimum number of hours per pay period. But many of those same employers then allow even part-time employees to contribute to a health flexible spending account (“health FSA”). After all, doing so costs the employer nothing (and even saves a modest amount in employment taxes), and why not at least give those employees an opportunity to pay some of their medical expenses on a pre-tax basis? Unfortunately, this paternalistic approach may now subject an employer to substantial daily penalties under the Affordable Care Act (“ACA”).

Manufacturer’s Corner: The Importance of Notice Provisions

An easily-overlooked portion of a contract for the sale of goods is the one that addresses what notice the buyer must give the seller in the event the goods do not conform to contract specifications or warranties.  These provisions warrant your close attention, however, because they can be outcome-determinative in the event of litigation over the alleged non-conformity.

New OSHA Reporting Rules to Become Effective Jan. 1, 2015

The Occupational Safety and Health Administration (OSHA) will celebrate 2015 by implementing new regulations relating to an employer’s duty to report work-related fatalities, injuries, and illnesses. The new regulations go into effect on January 1, 2015 for all workplaces that fall under federal OSHA jurisdiction.

Rip Van Winkle Awakens! – The NLRB Overturns Register-Guard

In their dissent to the National Labor Relations Board’s Register-Guard decision, Board Members Liebman and Walsh classically stated that “the NLRB has become the ‘Rip Van Winkle of administrative agencies. Only a Board that has been asleep for the past 20 years could . . . contend, as the majority does, that an e-mail system is a piece of communications equipment to be treated just as the law treats bulletin boards, telephones, and pieces of scrap paper.” See 351 NLRB 1110, 1121 (2007). After a seven year slumber, the Board has awoken and is attempting to get with the times. See Purple Commc’ns, Inc., 361 NLRB No. 126 (2014). A 3-2 majority of the Board adopted the logic of Liebman and Walsh’s dissent and overruled what many believed to be a canonical case on the balance between employees’ Section 7 rights and employers’ property rights.

Changing laws keep Missouri business on its toes

Psychologist William Frederick Book wrote a person should learn to adjust to the conditions they have to endure, but also try to prepare for and control those conditions so that they are as favorable as possible. The same is true in business.

5 tips for procuring a cyber insurance policy

Cyber attacks are not only increasingly prominent, but are also increasingly costly. The financial impact of a data breach averages $10 million per occurrence. Data breach insurance coverage may help ameliorate these financial consequences and constitutes a vital part of a comprehensive data security strategy.

Manufacturer’s Corner: Missouri Supreme Court Limits Scope of Manufacturers’ Sales and Use Tax Exemption

Here is a troubling new case from the Missouri Supreme Court.  And I don’t mean troubling in the abstract sense of “oh maybe there could be liability down the road if you don’t do this,” which is pretty much the bread and butter of this column.  I mean troubling in the “you may have already botched this, so you better pull out the books and call the accountants and lawyers” sense.

Legislation Introduced to Limit Operation Choke Point

Missouri Representative Blaine Luetkemeyer recently introduced legislation to the U.S. House of Representatives seeking to require the Federal Reserve and FDIC to provide a material reason to support any order to terminate a banking relationship.

Employers Must Wait for A More Permanent Immigration Solution

On November 20, 2014 President Obama announced that he would take executive action to further immigration reform amid Congressional gridlock. However, it is criti