By Erin Dougherty Foley and Craig B. Simonsen

Seyfarth Synopsis: Employer is caught by WHD investigator instructing its employees to lie during interviews, and provides falsified records, containing whited-out and edited time records, in order to conform to the Federal Labor Standards Act standards.

In a recent opinion, the Tenth Circuit ruled that a restaurant chain instructed its employees to lie during interviews, and provided falsified “whited-out” and “edited” employee time records, impeding a Department of Labor investigation, and found that the violation was willful (Perez v. El Tequila, LLC, No. 16-5002 (10th Cir., February 7, 2017).

This case provides a rather stunning look at what, as an employer, you don’t want to do during an official government workplace investigation. In this case the employer edited and changed time records, and then he lied about it, and then directed his employees to lie about it. The Court found that “the records Mr. Aguirre provided during the … Investigation, known as middle sheets, were based on his false summaries of how many hours employees worked, rather than actual clock-in and clock-out times…. Mr. Aguirre withheld [the actual] time sheets during the … Investigation, and many time entries had been “whited-out” and edited to conform with the Federal Labor Standards Act (FLSA).”

In addition, “employees revealed that Mr. Aguirre instructed them to lie in their interviews during the … Investigation.” Subsequently,  “employees told the WHD investigator that they had been working from 60 to 70 hours per week and were paid a salary…. They said the time sheets were not accurate, and ‘that they were forced to sign’ them.” During the litigation, Mr. Aguirre admitted that the time sheets and middle sheets were not correct, and that he “told his employees what to say in their interviews.”

In its post-trial motion, the government argued that the owner willfully violated the FLSA by: (1) falsifying payroll records, (2) withholding records requested by the WHD investigator, (3) lying to the WHD investigator and instructing his employees to lie, (4) recklessly disregarding his duty to determine whether it was violating the FLSA, (5) recklessly disregarding FLSA requirements, (6) and recklessly disregarding his duty to keep accurate records.

The Court concluded that the “evidence indicates that Mr. Aguirre took affirmative steps to create the appearance that El Tequila complied with the FLSA, including adjusting records to suggest that workers were properly paid, withholding documents, misrepresenting how employees were paid, and instructing employees to do the same. A reasonable jury could not conclude El Tequila’s violations were negligent” but willful.

In light of this Circuit Court opinion, employers may wish to consider the ramifications of this case as they analyze their management systems, policies, procedures, and training systems. While this is an extreme case, to the extent that FLSA rules apply to your operations, make sure that all employees understand the requirements, and are following company policies and procedures to ensure FLSA compliance. (And don’t lie during a government agency’s interview – they really, really, don’t like that!)

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

 

By Ashley Laken

Seyfarth Synopsis: NLRB affirms ALJ’s ruling finding that a union member’s criticisms on Facebook of the union that represented him were protected by the NLRA.

On February 7, 2017, in Laborers’ International Union of North America, Local Union No. 91, 365 NLRB No. 28, the National Labor Relations Board affirmed an NLRB administrative law judge’s ruling that found that the Laborer’s International Union of North America Local 91 violated the National Labor Relations Act by punishing one of its members for criticizing the union’s business manager on Facebook. We had previously blogged about the ALJ’s earlier decision.

The member’s Facebook posts criticized the union’s business manager for allowing a local politician to become a journeyman without first going through the union’s five year apprenticeship program, and the union punished the member by fining him $5,000, suspending his union membership for two years, and taking him off of its out-of-work referral list.

In finding that the union’s actions were unlawful, the Board observed that it is “elementary” that an employee’s right to engage in intraunion activities opposing the current leadership of his union is concerted activity protected by Section 7 of the NLRA, and therefore found that the member had engaged in protected concerted activity by posting his criticisms of the union’s business manager on Facebook.

The Board then examined whether the union’s interests outweighed the member’s Section 7 rights, and found that they did not. The Board reasoned that the member’s Section 7 right to press the union to change its policies outweighed the union’s vague claim that its reputation was damaged. The Board ordered the union to make the member whole for any loss of earnings he suffered as a result of the unlawful action taken against him, including backpay with interest compounded daily and his search-for-work expenses.

The decision highlights that not only are employee criticisms of their employers potentially protected by Section 7, employee criticisms of the labor unions that represent them may also be protected by Section 7.

For more information on this or any related topic please contact the author, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

 

By Marshall B. Babson, Katherine Mendez, and Bryan Bienias

Seyfarth Synopsis: Several organizations are planning nationwide strikes and boycott activities on February 16-17 to oppose Trump Administration and Republican policies. Employers impacted by these activities should be mindful of employees’ rights before responding.

Several labor and activist groups are calling for national general strikes and boycotts this week to protest policies enacted and proposed by the new Trump Administration and the Republican Congress.

Thursday, February 16: A Day Without Immigrants. The first action, “A Day Without Immigrants,” is currently scheduled for this Thursday, February 16.  The campaign, promoted in Spanish and English, has been spread through Facebook, fliers, and word of mouth and calls on immigrants and their supporters “not to go to work, open businesses, shop, eat in restaurants, buy gas, go to classes, or send children to school.” While the campaign originally focused on the Washington D.C. area, the campaign is expected to spread nationwide. A similar action in Milwaukee, Wisconsin this past Monday, February 13 drew thousands of protesters.

Friday, February 17: National General Strike. Then, on Friday, February 17, a group called Strike4Democracy has called for a national general strike and plans on “over 100 strike actions across the United States, and beyond.” The campaign calls for participants to forgo work on Friday and, instead “plan or take part in an event in your community” and “occupy public space with positive messages of resistance and solidarity.”

The organizers do not plan on stopping there. They intend to use Friday’s national general strike to “build towards a series of mass strikes,” with another mass strike planned on March 8, 2017, another on May 1, 2017 (May Day), and “a heightening resistance throughout the summer.”

So, what does this mean for employers?

While these general strikes and those planned for the future could wreak havoc on an employer’s operations — as employees fail to report to work or leave shifts early — the National Labor Relations Act provides protection for employees who engage in political advocacy that relates specifically to job concerns and to other workplace issues.

Employers have the right to enforce “neutrally applied work rules” to restrict employees from leaving work for political activities unrelated to workplace concerns. As discussed above, whether an employee’s actions are protected or unprotected turns on whether the employee’s absence relates to activity directed at “terms and conditions of employment” which the employer controls or to workplace concerns that affect all employees. If the absence is due to political activity totally unrelated to workplace concerns, employees could be subject to discipline, although discipline is not necessarily the prudent course to take.

Given the myriad issues to be addressed in these strikes, from immigration reform to minimum wage laws to worker’s rights, employers may be hard pressed to show that employees who participate in these strikes in lieu of working have engaged in unprotected activity. Employers could find themselves in further “hot water” with the NLRB if they discipline employees for absenteeism or tardiness related to the employees’ political activities.

If your company is affected by any of the strike activity this week or in the months ahead, contact the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

By Andrew S. Boutros and Craig B. Simonsen

Seyfarth Synopsis: Federal whistleblower laws collide with the in-house attorney-client privilege. The trial round goes to the whistleblower.  The expected appellate round still has not been fought.

In a February 7, 2017 jury verdict, the plaintiff, Sanford S. Wadler, the former General Counsel of Bio-Rad Laboratories, Inc., was awarded $7.29 million for compensatory and punitive damages in a case alleging Sarbanes-Oxley and Dodd-Frank Acts whistleblower retaliation – Foreign Corrupt Practices Act (FCPA) claims, in the United States District Court for the Northern District of California.  It is exceedingly rare for a general counsel of a public company to be a whistleblower, much less file a lawsuit, take it to trial, and be awarded anti-retaliation whistleblower fees.

Whether unique in its own facts or a watershed case that will serve as a precursor for more to come, the case will surely be studied for both its impact and implications. And, given the high stakes, it is expected that the legal saga will continue on appeal.  If it does, until the Ninth Circuit Court of Appeals rules on whether federal whistleblower laws preempt state ethics and privilege rules, it is unclear whether Wadler’s victory will stand the test of time.

With that: Law360 notes that “the case’s turning point came in late December, when U.S. Magistrate Judge Joseph C. Spero ruled that the Sarbanes-Oxley Act’s whistleblower protections preempt attorney-client privilege, thus allowing Wadler to use otherwise privileged information as evidence in the case. ” (Emphasis in the original.)  The ruling bucked a Second Circuit decision from 2013 that found that the former General Counsel of Unilab, which was later acquired by Quest Diagnostics, could not bring a qui tam whistleblower suit against Quest under the False Claims Act because “the allegations relied on privileged information,” amounting to a finding that “privilege took precedent over whistleblower protections,” as noted by Law360. See United States ex rel. Fair Lab. Practices Assoc. v. Quest Diagnostics Inc., 734 F.3d 154 (2d Cir. 2013).

Wadler, who had worked at Bio-Rad for some 25 years, specifically alleged that “after learning of his employer Bio-Rad Laboratories, Inc.’s involvement in extensive bribery occurring in Russia, Thailand, and Vietnam, [he] investigated evidence of similar violations of the FCPA in China, where corruption is notoriously endemic.” According to Wadler’s Complaint, key Bio-Rad officers and directors wanted him to “turn a blind eye to this misconduct or sweep it under the rug, but he refused. Instead, and following his mandatory duties under federal securities laws as the Company’s chief legal officer, Wadler investigated this potential criminal activity and reported it up the ladder.” Wadler v. Bio-Rad Laboratories, Inc., et al., No. 15-cv-02356-JCS, Complaint, p. 1.

Wadler’s above-the-fold Complaint allegations went even further: “When Wadler began to believe that the conspiracy to violate the FCPA went all the way to the top of the corporate hierarchy, he reported his concerns to the Company’s audit committee. Then, just shortly before Bio-Rad was scheduled to present to the SEC and DOJ regarding the Company’s investigation into potential FCPA violations, the Company fired Wadler precisely because he refused to be complicit in its wrongdoing.” Complaint, p. 1.

Law360 observed that the unique role of the general counsel came up prominently during the nearly three-week trial, as Bio-Rad defended its termination of Wadler. “The company argued that his incompetence had led him to misconstrue normal business practices as FCPA violations. One board member testified that when Wadler had raised FCPA concerns with the board, his initial reaction that Wadler had made a courageous move gave way to a belief that Wadler’s suspicions actually stemmed from a misunderstanding of the FCPA. Others testified that Wadler wasn’t a team player.” Even Bio-Rad’s outside counsel testified as a defense witness against Wadler.  But that strand of argument was met by another, this one raised by Wadler, as noted by Law360:  That the role of the general counsel is “that of a generalist who is trained to spot issues and call in specialized experts when necessary” and that an attorney’s duty is to “bring attention to legal risks even when management doesn’t want to hear about them.”

Although a plaintiff’s victory at trial is a critical statement to legal observers and practitioners on both sides of the “v” in a whistleblower claim, the legal battle over Wadler’s allegations and treatment is far from over. With competing precedent out of the Second Circuit, Bio-Rad is surely expected to appeal the jury’s verdict and ask the Ninth Circuit to toss out the verdict and either dismiss the case entirely or return the case to the district court for a retrial.  How the Ninth Circuit will rule remains to be seen, but the legal saga is sure to continue until then and the state of the law on whistleblower preemption can hardly be viewed as settled.

Those with questions about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Seyfarth Shaw’s White Collar, Internal Investigations, and False Claims Team, Securities Litigation Team, or Whistleblower Team.

By Minh Vu

Seyfarth Synopsis:  An executive order from President Trump will likely halt the Justice Department’s public accommodations website rulemaking.

President Obama’s Department of Justice (DOJ) had stated that proposed regulations for public accommodations websites would be issued in 2018—eight years after the agency began its rulemaking process.  The likelihood of such a proposed regulation being issued now is virtually non-existent.

Among the flurry of executive orders President Trump signed this week was one entitled “Reducing Regulation and Controlling Regulatory Costs”.  This EO virtually obliterates any chance that the DOJ will issue any website regulations for public accommodations websites during Trump’s Administration.

The EO directs all federal agencies to:

  • Identify at least two existing regulations to be repealed for each new regulation;
  • Ensure that the total incremental cost of all new regulations, including repealed regulations, to be finalized in 2017 be “no greater than zero;”
  • Offset any new incremental costs associated with new regulations by eliminating existing costs associated with at least two prior regulations.

The EO exempts regulations relating to: (1) military, national security, or foreign affairs functions of the United States; and (2) agency organization, management, or personnel.  It also vests the Director of the Office of Management and Budget with the authority to grant additional exemptions.  The stated purpose of this EO is to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations”.  We therefore assume that the EO would not apply to regulations applicable to state and local governments that the DOJ has been working on and could issue under Title II of the ADA.  It is unclear what, if any, impact this EO may have on the Title II regulatory effort.

While our prediction may seem dire, we cannot fathom what two regulations the DOJ would repeal to make way for new public accommodations website regulations and offset their associated cost.  Though some may think that businesses are better off with no regulations on this subject, we disagree.  The current tsunami of lawsuits and demand letters about allegedly inaccessible websites is the result of uncertainly and absence of regulations that impose reasonable rules that provide adequate time for businesses to comply.  This is one issue upon which virtually all who practice in this space – on the legal, technological, or advocacy side – agree.

Edited by Kristina Launey.

By Annette Tyman and Michael L. Childers

Seyfarth Synopsis: Federal Contractors should immediately update the Disability Self-ID Form to include the new expiration date.  The OFCCP is allowing a 10-day grace period, until February 10th to update the form.

Last week we updated contractors on OMB’s renewal of the disability self-identification form (see post here).  Note that there were no substantive changes to the form and that the only change was an update to the effective date from January 31, 2017 until January 31, 2020. Since that update, we have learned that the OFCCP is expecting contractors to “immediately” take steps to update the form to reflect the new effective date.  For those contractors who need additional time to update the expiration date, the National Office has implemented a 10-day “grace period.” For unexplained reasons, the OFCCP has not publicized this deadline on its website. Nonetheless, contractors should take immediate steps to update the disability self-ID form with the new effective date and implement the change by February 10th.

To ensure the updated form is in use, contractors should take the following steps: 

  • Update online application systems to ensure that they are displaying the self-ID form with the new effective date.
  • Update new hire onboarding systems to ensure that these materials include the updated form, including updating paper copies that may be utilized.
  • Ensure that the updated form is used in interim reminders to employees of their option to update their disability status.
  • Ensure that the updated form is used in any resurvey of the workforce.
  • For those contractors who are currently subject to a compliance review, ensure that you can demonstrate that you have implemented the updated form or readily show the steps that  you have taken to transition to the updated form.

The new form can be located using the following link:

https://www.dol.gov/ofccp/regs/compliance/sec503/Self_ID_Forms/VoluntarySelf-ID_CC-305_ENG_JRF_QA_508c.pdf

Seyfarth Shaw’s OFCCP and Affirmative Action Compliance team leads the legal industry in thought leadership, affirmative action plan preparation, compliance review representation and employer advocacy on issues relating to contractor compliance.  We have a long track record of experience and we are ready to help assist with all of your affirmative action compliance needs.

By Bryan Bienias

Seyfarth Synopsis: The Court of Appeals for the First Circuit reversed the NLRB, holding that the Board lacked substantial evidence to find that the hospital group unfairly preferred nonunion workers when filling nonunion positions.

The National Labor Relations Board may not invalidate employment policies that accomplish legitimate goals in a nondiscriminatory manner “merely because the Board might see other ways to do it.” Such was the message the U.S. Court of Appeals for the First Circuit delivered to the Board last week in Southcoast Hospitals Group v. NLRB, No. 15-2146 (1st Cir. 2017).

The Court ruled that the Board lacked substantial evidence in finding that the hospital group discriminated against union members by giving nonunion workers a hiring preference for nonunion positions. The union’s contract granted union employees a similar preference when applying for union positions. According to Southcoast, the policy was intended to “level the playing field” and stave off staffing complaints by its nonunion workforce.

The Board argued that the policy tilted the playing field too far in favor of nonunion employees, claiming the number of nonunion positions “pales in comparison” to the number of positions covered by the union hiring policy and that nonunion hiring preference covered two facilities, as opposed to the single facility covered by the union policy.

This was not enough, the Court ruled. While the Court acknowledged that the nonunion policy covered more positions than the union hiring policy, union workers were not disproportionately harmed, given that the ratio of covered positions to covered employees was substantially the same under both policies. Likewise, nonunion employees had to compete with workers from two hospitals, as opposed to union workers’ need to compete only with workers from one hospital.

The Court also noted that the Board ignored other aspects of the hiring policies that still leave union members at a comparative advantage, namely that union seniority trumps qualifications for open union positions, while Southcoast is required to choose “the best qualified” candidate for a nonunion position, regardless of seniority.

Employer Takeaway

Employers must often walk a fine line in order to apply different policies to union and nonunion employees in a non-discriminatory manner. However, as the Court in Southcoast makes clear, this does not handcuff employers from attempting to “level the playing field” by giving certain advantages to nonunion employees, so long as the policy does not disproportionately harm union employees and is supported by a legitimate and substantial business justification.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

By Jason E. Burritt

Seyfarth Synopsis: In light of recent events related to the most recent Executive Order banning travel to the United States for nationals from certain countries, please continue reading for more detailed information regarding this Executive Order and what employers may wish to consider in response. 

On Friday, January 27, President Trump signed an Executive Order that suspended travel into the United States for nationals from certain designated countries, specifically Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen. This suspension in travel is already in place.  If nationals from these countries, including those who are lawful permanent residents (i.e. green card holders), are currently present in the United States, they can remain here lawfully but should not travel outside the U.S. at this time.

This suspension will remain in place for at least 90 days — until April 27, 2017 — during which time the Department of Homeland Security (“DHS”) must assess and identify any countries that do not currently provide adequate information to enable proper screening of nationals from those countries; the affected countries would thereafter have 60 days within which to begin providing the necessary information. Presumably, if a country failed to adequately provide the requested information, the travel ban would then become indefinite.

The Executive Order does not clearly define the circumstances under which an individual is considered to be “from a designated” country. However, the language and subsequent actions by Customs and Border Protection (“CBP”) at the border suggests that the travel ban will apply to nationals from the seven countries, and may include lawful permanent residents.

Following actions by CBP, several lawsuits have been filed and subsequent rulings have been made, starting with an emergency ruling issued in Brooklyn, New York on January 28, 2017. As of this writing, at least four temporary restraining orders (“TROs”) are in place, each with varying specificity and reach.  We have highlighted the key points of the three most prominent orders below:

  • Massachusetts – On Sunday, January 29, 2017, U.S. District Judge Allison Burroughs and Magistrate Judge Judith G. Dein of the U.S. District Court of Massachusetts issued a seven-day stay on removal, detainment and additional screening. Perhaps the most far reaching order to date, the TRO is in effect for seven days and applies to lawful permanent residents, citizens, visa holders, approved refugees, and other individuals from the identified countries subject to the Executive Order. The ruling also (1) limits secondary inspection screening; (2) bars DHS from detaining or removing foreign nationals who would otherwise be legally authorized to enter the U.S. in the absence of the Executive Order with approved refugees applications, immigrant and nonimmigrant visas; (3) requires CBP to notify airlines that individuals on flights to Logan Airport will not be detained or returned based solely on the basis of the Executive Order.
  • New York- On Saturday, January 28, 2017, Judge Ann M. Donnelly of the U.S. District Court in Brooklyn enjoined and restrained DHS from “removing individuals with refugee applications . . . , holders of valid immigrant and non-immigrant visas, and other individuals . . . legally authorized to enter the United States.” The Court orders the U.S. Marshal for the Eastern District of New York to enforce the ruling. While the ruling blocks removal of the individuals, it does not order the release of any segment of the affected population.
  • Virginia – On Saturday, January 28, 2017, U.S. District Court Judge Leinie Brinkeman for the Eastern District of Virginia issued an order blocking removal of lawful permanent residents detained at Dulles International Airport. The order remains in effect for seven days and does not require release of lawful permanent residents, but does require that all lawful permanent residents detained at Dulles International Airport be given access to lawyers.

The President’s Executive Order is not the first time in the post-9/11 era that the U.S. has focused on citizens of particular nations to try and identify and eliminate potential threats to homeland security. In 2002, the George W. Bush administration created a program of special vetting of foreign citizens, known as the National Security Entry-Exit Registration System (“NSEERS”), to record and monitor the arrival, stay, and departure of certain foreign citizens from the very same seven countries named in the most recent Executive Order.

NSEERS, however, was far broader. It also applied to categories of foreign citizens from several other countries, namely, Afghanistan, Algeria, Bahrain, Bangladesh, Egypt, Eritrea, Indonesia, Jordan, Kuwait, Lebanon, Morocco, North Korea, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia, and United Arab Emirates. DHS suspended NSEERS in 2011, however, and President Obama formally terminated it on December 22, 2016.

Given this history, as a precautionary measure, U.S. lawful permanent residents and foreign nationals from countries not included in President Trump’s Executive Order but included in the NSEERS list of countries should consider postponing all non-emergency travel from, and accelerating their return travel to the United States.  In addition, employers of U.S. lawful permanent residents and foreign nationals who are from Afghanistan, Algeria, Bahrain, Bangladesh, Egypt, Eritrea, Indonesia, Jordan, Kuwait, Lebanon, Morocco, North Korea, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia, and United Arab Emirates, should consider (a) canceling all trips abroad for these employees, and (b) instructing them to return as soon as possible to the United States.

In light of these developments, and in response to the rapidly changing immigration climate, employers should strongly consider the following actions:

  • Advise any foreign national employees from the seven designated countries listed above — this includes U.S. lawful permanent residents who are nationals from these countries — to avoid travel outside of the United States. If a U.S. lawful permanent resident from these countries is currently outside of the U.S., s/he should seek to return as soon as possible.
  • Advise any affected individuals from the seven designated countries, other than lawful permanent residents, who are currently outside of the United States that they should not return to the U.S. at this time. Seyfarth Shaw attorneys have first-hand knowledge of individuals being detained upon arrival to the United States.
  • Consider advising U.S. lawful permanent residents and foreign national employees from countries not included in the Executive Order but included in NSEERS to postpone non-emergency international travel.
  • Identify all employees currently holding any nonimmigrant visa status (this includes L-2s, H-4s, and TNs) and consider sponsoring these employees for H-1B status under the April 1 H-1B lottery.
  • Advise caution to all foreign national employees who may be traveling internationally to renew a visa at a United States consular post. Individuals who are employed, or who hold academic degrees, in a field that appears on the government’s Technology Alert List, should delay their visa appointments at U.S. consular posts in order to avoid potentially lengthy administrative processing or related screening delays.  Click here for more information on the Department of State’s Technology Alert List.
  • For any affected employees who have current green card priority dates and are able to file Adjustment of Status applications, file the applications as soon as possible.

Please bear in mind, however, that each employer’s and affected employee’s situation may present special circumstances that may warrant consideration of an alternative approach in lieu of the recommended strategy above.

We will continue to monitor the situation and will reach out with additional details as they become available.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Counseling & Solutions Team.

 

By Lorie E. Almon, Gerald L. Maatman, Jr., Ian H. Morrison

Seyfarth Synopsis:  As we face a new year, Seyfarth is pleased to offer strategic guidance through our 13th Annual Workplace Class Action Litigation Report.

Across all varieties of workplace litigation, class action dynamics increasingly have been shaped and influenced by recent rulings in the U.S. Supreme Court. This past year the Supreme Court issued several key decisions on complex employment litigation issues and accepted more cases for review that are posed for rulings this coming year. Some decisions may be viewed as hostile to the expansive use of Rule 23, while others are hospitable and strengthen the availability of class actions against employers.   In our workplace class action webinar, highlights from the Report will outline a number of key trends for employers in 2017, including:

  • The implications and fall-out from the Supreme Court’s key decisions on complex employment litigation and class action issues of 2016, and discussion of the cases accepted for review that are posed for rulings in 2017.
  • Lessons to be learned from the monetary value of the top employment-related class action settlements and why they declined significantly in 2016 after they reached all-time highs in 2014 and 2015.
  • The background on why more favorable class certification rulings for the plaintiffs’ bar were issued in 2016 than in past years.
  • How the private plaintiffs’ bar is likely to “fill the void” after the Trump inauguration and increase the number of wage & hour lawsuit filings in 2017, following case filing statistics reflecting that wage & hour litigation filings decreased over the past year for the first time in a decade.
  • Why there were more conditional certification and decertification decisions in the wage & hour space than in any other area of workplace class action litigation.
  • The dynamics behind the U.S. Department of Labor and Equal Employment Opportunity Commission’s continued aggressive litigation approaches in 2016 and what is in store for government enforcement litigation under the Trump Administration.

REGISTER

If you have any questions, please contact, events@seyfarth.com. *CLE Credit for this webinar has been awarded in the following states: CA, IL, NJ and NY. CLE Credit is pending for GA, TX and VA. Please note that in order to receive full credit for attending this webinar, the registrant must be present for the entire session.

By Benjamin J. Conley, Shad C. Fagerland, and Joy Sellstrom

Seyfarth Synopsis: Within hours of his inauguration, President Trump issued an Executive Order labeled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”.  As described in greater detail below, the immediate impact of this executive order is uncertain and affected parties would be best advised to await further guidance before reacting to the order. 

Executive Order and Impact

The Executive Order directs regulatory agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

The Order’s broad directive could be viewed in many ways as an extension of the President’s campaign promises to minimize the burden of ACA regulations pending the law’s ultimate repeal.

In some respects, the Order sows greater confusion than it provides clarification. Notably, unanswered questions include:

  • Does this directive imply a complete or partial enforcement hiatus?
  • Was the absence of reference to employers/businesses intentional or inadvertent?
  • How quickly can the relevant agencies (notably, HHS, IRS and DOL) react to this directive with more meaningful guidance, considering many of the incoming heads of those agencies will not be confirmed for several weeks?
  • Does the Order provide any relief to employers who are preparing Form 1094/1095-C tax filing forms due in roughly one month?

In the absence of more explicit agency guidance or Congressional action, the Order, in and of itself, does not appear to offer any specific relief from penalties to employers, individuals or other affected parties. So employers who decide to disregard existing agency guidance proceed at their own risk based on certain presumptions.

With regard to the most pressing issue for many employers — Form 1094/1095-C filing — we recommend that until official guidance from the IRS indicates otherwise, employers should assume that the current filing deadline continues to apply.

The Order may pave the way for future agency actions, such as non-enforcement policies, filing extensions, hardship waivers, etc. It is difficult to anticipate precisely what form such actions may take, but agencies are generally bound by the terms of the governing statute as well as the final regulations published through the notice-and-comment rulemaking process.  That said, there is precedent for use of discretion to announce a delay in enforcement (e.g., the unilateral delay of enforcement of the “employer mandate” from 2014 to 2015).

Patient Freedom Act of 2017

Earlier today, Senators Susan Collins (R-Maine) and Bill Cassidy (R-Louisiana) introduced one of what will likely be many “replacement” options for the Affordable Care Act. Sens. Collins and Cassidy were undoubtedly attempting to quell some of the concerns expressed both inside and outside of the Republican party that repealing (in whole or in part) the ACA without a replacement could have practical and political implications.

The details of the Patient Freedom Act are not yet immediately available, but the press briefing indicated states would be provided greater choice in implementing healthcare reform, generally through allowing states to choose among the following alternatives:

  • Retain the ACA
  • Create a new alternative
  • Adopt the Patient Freedom Act’s plan (which generally involves greater use of health savings accounts and automatic enrollment into a health policy with opt-out rights).

Seyfarth Shaw will continue to monitor developments and provide updates as more information becomes available.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Employee Benefits & Executive Compensation Team, Workplace Counseling & Solutions Team, or Workplace Policies and Handbooks Team.