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By: Lexis Practice Advisor Staff
THE U.S. SUPREME COURT IS expected to decide this term whether the collective-bargaining provisions of the National Labor Relations Act (NLRA) prohibit enforcement of agreements requiring employees to arbitrate claims against employers on an individual, rather than collective or class action, basis.
The high court in June granted three petitions for writ of certiorari to resolve a conflict among the federal circuit courts on the question. At issue is the National Labor Relations Board’s (NLRB) position, set forth in In re Horton, 357 NLRB No. 184 (January 2012), that the NLRA guarantees the right of employees to act collectively to address employment claims and that requiring employees to waive that right is a violation of the statute.
The U.S. Court of Appeals for the Seventh Circuit and the U.S. Court of Appeals for the Ninth Circuit have agreed with the NLRB’s stance, while the U.S. Court of Appeals for the Fifth Circuit has rejected the NLRB’s position.
The Department of Justice (DOJ) has weighed in on the issue, contending in an amicus curiae brief that the NLRB’s interpretation runs afoul of the presumption contained in the Federal Arbitration Act (FAA) that arbitration agreements are valid unless the FAA’s mandate has been overridden by congressional action or enforcement would vitiate a substantial federal right. “Neither of those justifications for non-enforcement is applicable here,” the DOJ said.
Dozens of amicus curiae briefs have been filed on both sides of the issue, with unions and employee groups supporting the NLRB’s position, and business groups, including the U.S. Chamber of Commerce, weighing in on the side of employers.
The three cases, which were consolidated for oral argument before the Supreme Court, are Ernst & Young LLP v. Stephen Morris, No. 16-300; NLRB v. Murphy Oil USA Inc., No. 16-307; and Epic Systems Corp. v. Lewis, No. 16-285.
A decision is expected by the end of the high court’s current term.
RESEARCH PATH: Labor and Employment > Employment Contracts > Waivers and Releases > Articles
By: Adapted from Benders Labor & Employment Bulletin, Volume 17, Issue 9
THE FEDERAL OFFICE OF Management and Budget (OMB) has directed the Equal Employment Opportunity Commission (EEOC) to stay the effectiveness of certain revisions to the EEOC’s EEO-1 form. The affected revisions, issued on Sept. 29, 2016, relate to new requests for data on wages and hours worked from employers with 100 or more employees and federal contractors with 50 or more employees.
The OMB noted that since the revised EEO- 1 form was approved, the EEOC released data file specifications for employers to use in submitting the form. However, the specifications were not contained in the original Federal Register notices seeking public comment on the revisions and were not outlined in the supporting statement for the collection of the information, the OMB said. “As a result,” the OMB said, “the public did not receive an opportunity to provide comment on the method of data submission to EEOC.”
In addition, the OMB stated that the burden estimates submitted by the EEOC did not account for the use of the data file specifications, “which may have changed the initial burden estimate.”
The stay is necessary, the OMB said, because of concerns “that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidential issues.” The OMB ordered the EEOC to submit a new information collection package for its review and to publish a notice in the Federal Register announcing the immediate stay of the wage and hours reporting requirements in the revised form. Employers may continue to use the previously approved EEO-1 form to meet their reporting obligations for FY 2017.
RESEARCH PATH: Labor & Employment > Employment Policies > Equal Employment Opportunity > Articles
AN EMPLOYEE WHO WAS TERMINATED FOR TESTING positive for the lawful use of medical marijuana can bring an action for handicap discrimination under state law, the Massachusetts Supreme Judicial Court has held.
Massachusetts law provides for lawful use of medical marijuana for “qualified patients” under an initiative petition passed by voters in 2012 (An Act for the Humanitarian Medical Use of Marijuana).
The court said that Cristina Barbuto meets the state antidiscrimination statute’s (ALM GL ch. 151B, § 1(16)) definition of “qualified handicapped person” by virtue of her diagnosis of Crohn’s disease, for which her physician prescribed medical marijuana.
Barbuto was hired by Advantage Sales and Marketing (ASM) in late summer 2014. She told her supervisor that a mandatory drug test would prove positive for marijuana, but she was assured that because her use was lawful under state law, the positive result would not be an issue. After the test came back positive, she was terminated for violation of the company’s drug policy. ASM acknowledged that Barbuto was protected by state law, but it cited federal law against marijuana use as the basis for its decision.
Barbuto filed suit in state court, asserting causes of action for handicap discrimination, invasion of privacy, and violation of the medical marijuana statute. ASM moved to dismiss the suit; the trial court dismissed all but the invasion of privacy claim. The Supreme Judicial Court granted Barbuto’s petition for direct appeal.
Reversing with respect to the handicap discrimination claim, the state high court held that Barbuto’s condition falls within the protection of the anti-discrimination statute and that because the use of medical marijuana is legal under Massachusetts law, ASM was required to provide a reasonable accommodation for Barbuto’s illness. However, the court said that its ruling does not necessarily mean a victory for Barbuto. Barbuto v. Advantage Sales and Marketing, LLC, 477 Mass. 456 (Mass. 2017).
“Our conclusion that an employee’s use of medical marijuana under these circumstances is not facially unreasonable as an accommodation for her handicap means that the dismissal of the counts alleging handicap discrimination must be reversed,” the court said. “But it does not necessarily mean that the employee will prevail in proving handicap discrimination. The defendant at summary judgment or trial may offer evidence to meet their burden to show that the plaintiff’s use of medical marijuana is not a reasonable accommodation because it would impose an undue hardship on the defendant’s business.”
The court affirmed the dismissal of Barbuto’s claim under the medical marijuana statute, however, finding that the statute did not create a private cause of action for employees. The court noted that the vast majority of states, along with the District of Columbia and Puerto Rico, have allowed limited possession of marijuana for medical treatment, making the issue of use of medical marijuana an issue that will continue to arise in the workplace.
RESEARCH PATH: Labor and Employment > Employment Policies > Safety and Health > Articles
By: Benders Labor & Employment Bulletin, Volume 17, Issue 9
THE OCCUPATIONAL SAFETY AND Health Administration’s (OSHA) electronic portal, the Injury Tracking Application (ITA), is now live for employers to file reports of workplace illnesses and injuries. OSHA’s electronic record-keeping rule, which applies to companies with 250 employees or more, requires employers to submit electronically the OSHA Form 300 (Log of Work-Related Injuries and Illnesses), OSHA Form 300A (Summary of Work-Related Injuries and Illnesses), and OSHA Form 301 (Injury and Illness Incident Report). These forms are available at https://www.osha.gov/ recordkeeping/RKforms.html.
Employers with 20–249 employees in industries with historically high rates of occupational injuries and illnesses must electronically submit the information from the OSHA Form 300A. These industries include construction, utilities, equipment rentals, and commercial machinery repair and maintenance, among others. Employers have three options for submitting their 300A data electronically: manually entering data into a web form, uploading a CSV file, or transmitting data electronically with an application programming interface.
RESEARCH PATH: Labor & Employment > Employment Policies > Safety & Health > Articles
By: Lexis Practice Advisor Journal Staff, Pratt’s Bank Law & Regulatory Report, Volume 51, No. 7
A GROUP OF LAWMAKERS FROM BOTH SIDES OF THE aisle have asked the heads of five federal agencies to work toward coordination of “efforts to harmonize and streamline the disparate cybersecurity regulatory regimes for the financial services sector” in order to better combat cybersecurity threats against financial institutions.
The letter, dated August 3 and signed by 38 members of Congress, was addressed to Janet Yellen, chairwoman of the Board of Governors of the Federal Reserve System; Keith Noreika, acting comptroller of the Office of the Comptroller of the Currency; Richard Corday, director of the Consumer Financial Protection Bureau; Jay Clayton, chairman of the Securities and Exchange Commission; and Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation.
“While good faith efforts are being made under the current approach to cybersecurity regulation,” the Congress members said, “the growing complexity of the regulatory landscape is creating duplicative standards and conflicting expectations that hinder the ability of institutions to effectively mitigate cyberattacks.”
Citing the recent Wanna Cry and Petya ransomware attacks, the lawmakers said that cyber attacks are “an increasing danger” to financial institutions. Coordination is necessary, they said, “in order to ensure that financial institutions can focus resources on the growing frequency and sophistication of cyber threats, rather than duplicative compliance, regulatory, and supervisory requirements.”
RESEARCH PATH: Finance > Financial Services Regulation > Financial Institution Activities > Articles
THE U.S. DEPARTMENT OF LABOR (DOL) HAS PROPOSED an 18-month expansion of the transition period leading up to effectiveness of the Best Interest Contract (BIC) and Principal Transactions exemptions to the DOL’s Fiduciary Rule. The proposal calls for extending the end of the period from January 1, 2018, to July 1, 2019.
The Fiduciary Rule refers to the designation of brokers, investment advisors, insurance agents, and other financial professionals as fiduciaries with respect to plans governed by the Employee Retirement Income Security Act (ERISA).
The proposal comes after a Request for Information published by the DOL in July seeking public input on new exemptions or changes to the rule and exemptions, as well as the advisability of extending the transition period.
At the same time, the DOL announced an enforcement policy related to the arbitration provision contained in the two exemptions. The arbitration provision makes the exemptions unavailable if a financial institution’s contract with a retirement investor includes a waiver or qualification of the retirement investor’s right to participate in a class action or other court action. The DOL’s policy comes after Acting U.S. Solicitor General Jeffrey B. Wall indicated, in an amicus brief filed in NLRB v. Murphy Oil USA Inc. (No. 16- 307, U.S. Sup.) currently pending before the U.S. Supreme Court, the federal government’s intention to refrain from defending the provisions as applied to arbitration agreements preventing investors from participating in class-action litigation.
RESEARCH PATH: Employee Benefits & Executive Compensation > Retirement Plans > ERISA and Fiduciary Compliance > Articles
IN TWO RULINGS ISSUED THE SAME DAY, A FEDERAL judge in Delaware has interpreted the patent venue statute’s “regular and established place of business” language as requiring that an infringement defendant be shown to do business “through a permanent and continuous presence” in a jurisdiction in order for venue to be proper in that jurisdiction.
The rulings by Chief U.S. Judge Leonard Stark of the District of Delaware come on the heels of the U.S. Supreme Court’s recent decision strictly interpreting the patent venue statute’s residence requirement. TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017).
In an 8-0 ruling, with Justice Neil Gorsuch not participating, the high court in TC Heartland reaffirmed its long-standing position that a domestic corporation “resides” only in its state of incorporation and must have “a regular and established place of business” in order for a patent infringement suit to be brought against it in any other jurisdiction. The court held that the more expansive interpretation of the term “resides” in the general venue statute is not applicable to the patent-specific venue statute.
In the first of the two cases, Judge Stark granted a motion to transfer to the U.S. District Court for the Southern District of Indiana an infringement suit brought by Boston Scientific Corp. against Cook Group Inc., its competitor in the medical device industry. Boston Scientific Corp., et al. v. Cook Group Inc. 2017 U.S. Dist. LEXIS 146126 (D. Del. Sept. 11, 2017).
Cook “appears to have no presence in Delaware whatsoever, let alone a permanent and continuous one,” the judge said, noting that the company has no physical facilities or employees in the state and that none of its “few contacts” with the state amount to a regular and established place of business.
In the second case, Judge Stark found that additional discovery is needed to determine whether generic drug manufacturer Mylan Pharmaceuticals Inc., a West Virginia corporation, has a sufficient presence in Delaware in order for venue to be proper in a suit brought by Bristol-Myers Squibb Co. alleging infringement of its patent for the blood thinner drug Eliquis. Bristol-Myers Squibb Co. v. Mylan Pharmaceutics Inc., 2017 U.S. Dist. LEXIS 146372 (D. Del. Sept. 11, 2017).
The judge noted that the “Mylan family of companies” has “a nationwide and global footprint” and that Mylan has had “more generic drug applications approved by the FDA over the last two years than any other company.” Further, he said, Mylan is a frequent litigant in the Delaware federal court, appearing in more than 100 cases there in the past 10 years. However, he said, there is insufficient evidence in the record to show that Mylan does not have a regular and established place of business in the state and ordered expedited discovery on the issue while the case continues to proceed.
RESEARCH PATH: Intellectual Property & Technology > Patents > Patent Litigation > Articles
By: Pratt’s Bank Law & Regulatory Report, Volume 51, No. 9
FIVE NATIONAL TRADE ASSOCIATIONS AND ALL 50 STATE bank associations are calling for the Consumer Financial Protection Bureau (CFPB) to delay implementation of the Home Mortgage Disclosure Act’s (HMDA) mandatory data collection requirements scheduled to take effect at the beginning of the new year.
Section 1094 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) amended HMDA and, among other things, expanded the scope of information relating to mortgage applications and loans that must be collected under HMDA, including the ages of loan applicants and mortgagors, information relating to the points and fees payable at origination, the difference between the annual percentage rate associated with the loan and benchmark rates for all loans, the term of any prepayment penalty, the value of the property to be pledged as collateral, the term of the loan and of any introductory interest rate for the loan, the presence of contract terms allowing non-amortizing payments, the application channel, and the credit scores of applicants and mortgagors.
In 2015, the CFPB finalized a rule expanding the data reporting requirements under HMDA. January 1, 2018, is the day of reckoning for complying with the rule.
In July 31 letters to the CFPB, the American Bankers Association, Consumer Bankers Association, Consumer Mortgage Coalition, Housing Policy Council of the Financial Services Roundtable, Mortgage Bankers Association, and the state bankers associations requested a one-year delay that would push mandatory reporting back to January 1, 2019.
To help ease the new reporting burden, the CFPB has published several compliance resources (including most recently in December 2015 and January 2017)—a fact that was acknowledged by the associations. However, the associations said, a delay in the compliance date is still needed.
“Although we greatly appreciate the CFPB’s work to facilitate implementation of this major data collection and reporting rule, the CFPB’s regulatory process and technological framework for this rule are still incomplete. Proposed amendments to the rule are not yet finalized. Moreover, the HMDA data reporting portals, geocoding tools, data validation, and rule edits are not yet issued. All of these items are needed to ensure compliant business process and systems changes by the effective date,” they said.
The associations also raised concerns about the protection of consumer financial data, noting that the CFPB has not yet determined what data will be made publicly available or how it will maintain the integrity of private financial information such as borrowers’ credit scores, debt-to-income ratios, and loan-tovalue ratios.
The associations further recommended that institutions be given the option to incorporate new data requirements into their data collection for 2018 on a voluntary basis.