The number of whistleblower complaints is on the rise, according to the 2014 Annual Report to Congress on the Dodd-Frank Whistleblower Program, and defending against them can be costly and disrupt business operations. Taking appropriate steps in response to internal complaints can go a long way toward minimizing the risk that the issue becomes an external dispute at OSHA or in court.
Understanding the Objectives A prompt investigation and an understanding of the objectives of the investigation are paramount. Employers should decide, for example, whether the goal is to create a ...
On May 5, 2015, the Eleventh Circuit Court of Appeals ruled in Wiersum v. U.S. Bank, N.A. (pdf) that the National Bank Act (“NBA”), 12 U.S.C. §24 (Fifth), preempted a bank officer’s state law whistleblower claim that he was wrongfully terminated for opposing the bank’s alleged unlawful conduct. This was a first-impression issue for the Eleventh Circuit, and the majority concluded that the state law claim was preempted because it directly conflicted with the power Congress vested in federally chartered banks to dismiss officers “at pleasure.”
Wiersum, a former Vice ...
As the economy becomes increasingly globalized, it is important for financial services industry employers to maintain their competitive edge by developing a robust toolkit of cross-border capabilities. The ability to transfer managers, executives, and other key personnel to the United States expeditiously for short-term or long-term projects or assignments is a growing business necessity. Fortunately, U.S. immigration law contains nonimmigrant (temporary) and immigrant (permanent) visa classifications specifically for managers and executives, and provides a ...
By Aime Dempsey and John F. Fullerton III
For financial services industry employers that participate in arbitrations administered by FINRA, the composition of the arbitration panel may have as much, or more, of an impact on the outcome of the dispute than the facts or the law. This is because FINRA arbitrators are not bound to follow case precedent or strictly apply principals of law and can render awards based on their own notions of “fairness” or “justice.” The important process of selecting an acceptable arbitration panel, however, can be opaque, as the information that ...
To register for this complimentary webinar, please click here.
I’d like to recommend an upcoming complimentary webinar, “EEOC Wellness Regulations – What Do They Mean for Employer-Sponsored Programs? (April 22, 2015, 12:00 p.m. EDT) presented by my Epstein Becker Green colleagues Frank C. Morris, Jr. and Adam C. Solander.
Below is a description of the webinar:
On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its long-awaited proposed regulations governing employer-provided wellness programs under the American’s with ...
My colleagues Frank C. Morris, Jr., Adam C. Solander, and August Emil Huelle co-authored a Health Care and Life Sciences Client Alert concerning the EEOC’s proposed amendments to its ADA regulations and it is a topic of interest to many of our readers.
Following is an excerpt:
On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its highly anticipated proposed regulations (to be published in the Federal Register on April 20, 2015, for notice and comment) setting forth the EEOC’s interpretation of the term “voluntary” as to the ...
My colleague Peter Steinmeyer published a post on the Trade Secrets and Noncompete Blog that will be of interest to many of our readers: “Chicago District Judge Issues Primer On Declaratory Judgment Actions Regarding The Enforceability Of Non-Compete Agreements.”
Following is an excerpt:
Last week, Chicago district judge Charles Kocoras dismissed a declaratory judgment action challenging the enforceability of a facially broad form non-compete agreement signed by all employees of the Jimmy John’s sandwich chain. Judge Kocoras held that the dispute was not judiciable ...
One day before the U.S. Department of Labor’s Family & Medical Leave Act (“FMLA”) same-sex spouse final rule took effect on March 27, 2015, the U.S. District Court for the Northern District of Texas ordered a preliminary injunction in Texas v. U.S., staying the application of the Final Rule for the states of Texas, Arkansas, Louisiana, and Nebraska. This ruling directly impacts employers within the financial industry who are located or have employees living in these four states.
Background
In United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense ...
It is important for financial services employers not to lose sight of the fact that the National Labor Relations Act applies to their non-supervisory workforce even though most employees in the industry are not unionized. This means that employee handbooks and similar policies must comport with the statute to the extent that they govern the non-supervisory workforce. In connection with these considerations, my colleagues Steven M. Swirsky and Adam C. Abrahms published a Management Memo blog post that will be of interest to many of our readers: “NLRB Issues Critical ...
Our colleagues Adam C. Solander, August Emil Huelle, Stuart M. Gerson, René Y. Quashie, Amy F. Lerman, Frank C. Morris, Jr., Kevin J. Ryan, and Griffin W. Mulcahey contributed to Epstein Becker Green’s recent issue of Take 5 newsletter. In this special edition, we address important health care issues confronting financial services employers:
On January 26, 2015, in an issue of first impression at the appellate level, the United States Court of Appeals for the Fourth Circuit held that a federal catch-all four year statute of limitations applies to whistleblower retaliation claims filed in federal court under Section 806 of the Sarbanes-Oxley Act (SOX), rather than a two-year statute of limitations applicable to cases alleging fraud under the securities laws. In addition, the Fourth Circuit joined the Fifth and Tenth Circuits in holding that emotional distress damages are available to successful ...
While 2014 was certainly a noteworthy year under Title III of the Americans with Disabilities Act (“Title III”), July 26, 2015, will mark the 25th anniversary of the ADA (“25th Anniversary”), an event that will almost certainly be celebrated with significant developments impacting the scope of Title III’s coverage. The U.S. Department of Justice (“DOJ”), charged with regulating Title III, is expected to advance and finalize regulations affecting a variety of industries, including, in some instances, financial services. Additionally, it would be reasonable to ...
Prosecutions of employees taking proprietary software with them when they leave financial services firms is on an upswing.
Our colleagues Peter Altieri and James Flynn at Epstein Becker Green address this in their post “Leave the Source Code Behind,” on the Trade Secrets & Noncompete Blog.
Following is an excerpt:
U.S. Attorneys in many jurisdictions are more willingly stepping into the fray between financial services firms and their former employees who have misappropriated trade secret information. In a recently reported case out of the Northern District of Illinois, two ...
Yesterday, the Supreme Court decided Department of Homeland Security v. MacLean. MacLean was a Transportation Security Administration (TSA) employee who, without authorization, disclosed to a reporter the otherwise unpublicized termination of missions related to hijack prevention. He claimed he was disclosing a matter related to public safety. He was fired pursuant to regulations promulgated under the Homeland Security Act, 116 Stat. 2135. That Act provides that the TSA “shall prescribe regulations prohibiting the disclosure of information . . . if the ...
Yesterday, the Supreme Court decided Department of Homeland Security v. MacLean. MacLean was a Transportation Security Administration (TSA) employee who, without authorization, disclosed to a reporter the otherwise unpublicized termination of missions related to hijack prevention. He claimed he was disclosing a matter related to public safety. He was fired pursuant to regulations promulgated under the Homeland Security Act, 116 Stat. 2135. That Act provides that the TSA “shall prescribe regulations prohibiting the disclosure of information . . . if the ...
- H-1B Nonimmigrant Season Opens on April 1, 2015, for Fiscal Year 2016
- President Obama Issues Executive Order on Immigration
- States Sue to Enjoin the Executive Order
- Federal Court in the District of Columbia Allows Worker Challenge to OPT Program
- DOS Issues New J-1 Rules for 2015
- DOS Issues January 2015 Visa Bulletin
Our colleague August Emil Huelle at Epstein Becker Green has an Employee Benefits Insight Blog post that will be of interest to many of our readers: “Legislation Introduced to Change Full-Time Employee Definition under the Affordable Care Act.”
Following is an excerpt:
On January 7, 2015, U.S. Senators Susan Collins (R-ME) and Joe Donnelly (D–IN) along with Lisa Murkowski (R-AK) and Joe Manchin (D-WV) introduced the Forty Hours is Full Time Act, legislation that would amend the definition of a “full-time employee” under the Affordable Care Act to an employee who works an ...
Our colleague Steven Swirsky at Epstein Becker Green wrote an advisory on an NLRB ruling that affects all employers: "NLRB Holds That Employees Have the Right to Use Company Email Systems for Union Organizing - Union and Non-Union Employers Are All Affected." Following is an excerpt:
In its Purple Communications, Inc., decision, the National Labor Relations Board (“NLRB” or “Board”) has ruled that “employee use of email for statutorily protected communications on nonworking time must presumptively be permitted” by employers that provide employees with access to ...
My colleague Lee T. Polk authored Epstein Becker Green’s recent issue of its Take 5 newsletter. This Take 5 features five considerations suggesting the advantages of employee benefit plans as programs that are beneficial to both employers and employees.
- Tax Aspects of Qualified Retirement Plans Can Save Money For Both Employers and Employees
- The Benefits of a Contractual Claims Limitation Period
- The Benefits of a Contractual Venue Selection Clause
- The Standard of Judicial Review in the Context of Top Hat Plan Benefit Disputes
- Fiduciary Exception to the Attorney-Client ...
Last week, the U.S. Securities and Exchange Commission’s Office of the Whistleblower, created in 2011 pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, released its mandated report to Congress on operations for Fiscal Year 2014, ending on September 30, 2014. A number of interesting facts, statistics and developments were reported. Here is a selection of particularly relevant highlights:
- FY 2014 was the most active year yet in terms of whistleblower awards. The SEC has made awards to 14 whistleblowers since inception of the program, including 9 in ...
To register for this webinar, please click here.
Please join us on Tuesday, December 16, 2014 at 1:00 p.m. EST as we review developments in 2014 and what employers should expect and prepare for in 2015.
During this one hour webinar, we will discuss:
- Recent decisions regarding what constitutes adequate consideration for a non-compete
- The trend toward criminal prosecution of trade secret theft, especially in the international context
- Interesting decisions determining choice-of-law issues
- New and pending state and federal legislation
This webinar is hosted by Epstein Becker Green ...
When the Supreme Court held in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), that the Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery, many employers in the financial services industry, if they had not done so already, strengthened the language of their mandatory arbitration provisions and policies to include explicit class action and class arbitration waivers. ...
While by most accounts the current term of the Supreme Court is generally uninteresting, lacking anything that the popular media deem to be a blockbuster (the media’s choice being same-sex marriage or Affordable Care Act cases), the docket is heavily weighted towards labor and employment cases that potentially affect employers in all industries including retail, health care, financial services, hospitality, and manufacturing. In chronological order of argument they are as follows.
The Court already has heard argument in Integrity Staffing Solutions ...
The Ebola virus disease (“Ebola”) has become a worldwide threat, which, among many other effects, has forced employers to think about how to protect their employees. Employers also must consider how Ebola might impact employment policies and procedures, including, but not limited to, those addressing attendance, leaves of absence, discipline, and medical testing.
My colleagues Susan Gross Sholinsky; Frank C. Morris, Jr.;William J. Milani; Steven M. Swirsky; Nancy L. Gunzenhauser; and Maxine Adams have written a comprehensive Act Now advisory ...
One of many changes wrought by passage of the Dodd-Frank Act is that employers cannot compel potential whistleblowers to report known or suspected unlawful activity to the company before reporting such information to the Securities Exchange Commission (SEC). Employees are eligible for a bounty award from the SEC even if they do not first – or ever – report internally. The SEC’s position is that mandatory internal reporting could discourage at least some potential whistleblowers. Consistent with that position, SEC Whistleblower Rule 21F–17 provides:
No person may take ...
By Kenneth DiGia and Lauri F. Rasnick
FINRA just issued a reminder regarding its views on confidentiality provisions and confidentiality stipulations.
Settlement Agreements
In Regulatory Notice 14-40, FINRA follows up on its prior Notice to Members 04-44, in which it had cautioned firms about the use of certain provisions in settlement agreements that impede, or have the potential to impede, FINRA investigations and the enforcement of FINRA actions. Specifically, FINRA had addressed settlement agreement provisions which limited, prohibited or discouraged employees from ...
At the Firm’s 33rd Annual Labor and Employment Client Briefing, Lauri Rasnick and John Fullerton spoke on the financial services industry panel about the impact of increased compliance obligations on the employment relationship and developments in the areas of applicant screening, whistleblower complaints, internal investigations, and diversity and inclusion.
Here are a few takeaways from that session:
- Eleven states have enacted legislation prohibiting the use of consumer credit reports in making employment decisions. There has been a dramatic increase in state and ...
by Michael Kun
We’re very pleased to announce that a brand-new version of our free, first-of-its-kind app, the Wage & Hour Guide for Employers, is now available for Apple, Android, and BlackBerry devices. The new app takes advantage of a software-as-a-service programming platform developed by Panvista Mobile.
Our newest version of the app is not only available to users of a variety of devices, but it offers simpler, faster, and more useful ways for employers to locate wage and hour information at the touch of a fingertip. As new issues are constantly emerging in this area, we’re ...
Our colleague Lauri F. Rasnick put together “Five Documents That Financial Services Employers Should Revisit Now” in this month’s Take 5 newsletter. Below is an excerpt:
With summer here, including its long days and blazing heat, many thoughts may turn to beaches, sunshine, and lazy afternoons. The summer may also be a good time for employers—especially those in the financial services sector—to take stock of some of their more important employment documents. In light of recent developments, this month's Take 5 discusses five employment documents worth ...
Epstein Becker Green and The ERISA Industry Committee (ERIC) have released a new issue of the Benefits Litigation Update.
Featured articles include:
Recent Supreme Court Decisions Revise Rules for Stock Drop Cases
By: Debra Davis, The ERISA Industry Committee
Hobby Lobby and the Questions Left Unanswered
By: John Houston Pope
Post-Amara Landscape Continues to Evolve
By: Scott J. Macey, The ERISA Industry Committee
Supreme Court to Decide Whether A Failed Class Action May Extend
Deadline to Bring Follow-on Claims By Individual Plaintiffs
By: John Houston Pope and Debra Davis
Our colleague Stuart Gerson of Epstein Becker Green has a new post on the Supreme Court’s recent decisions: “Divided Supreme Court Issues Decisions on Harris and Hobby Lobby.”
Following is an excerpt:
As expected, the last day of the Supreme Court’s term proved to be an incendiary one with the recent spirit of Court unanimity broken by two 5-4 decisions in highly-controversial cases. The media and various interest groups already are reporting the results and, as often is the case in cause-oriented litigation, they are not entirely accurate in their analyses of either ...
By Marisa S. Ratinoff and Amy B. Messigian
One of the main battlegrounds between employers and employees relates to the ability of employers to preclude class actions by way of arbitration agreements containing class action waivers. In California, the seminal case of Gentry v. Superior Court (“Gentry”) has had the practical effect of invalidating class action waivers in employment arbitration agreements since 2007. Gentry held that an employment class action waiver was unenforceable as a matter of California public policy if the class action waiver would “undermine the ...
By John F. Fullerton III and Jason Kaufman
In its recent decision in Santoro v. Accenture Federal Services, LLC [pdf], the Fourth Circuit Court of Appeals has joined the Fifth Circuit [pdf] in narrowly interpreting the prohibition against predispute arbitration agreements in the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) -- and employers can breathe a further sigh of relief.
Dodd-Frank amended the Sarbanes-Oxley Act (“SOX”) to, among other things, prohibit agreements requiring predispute arbitration of SOX claims (see 18 ...
Guest Post By Charles Diamond and Lynnann Whitbeck, Alvarez & Marsal
A substantial amount of litigation is being brought against companies, both public and private, because of “glass-ceilings” allegedly found within firms. More recently, the financial services industry has been a target of glass ceiling allegations and a number of other discriminatory employer practices against legally protected groups. Nationally, the U.S. Equal Employment Opportunity Commission (“EEOC”) has implemented a Strategic Enforcement Plan through 2016 to reduce and deter ...
Noncompliance with the Americans with Disabilities Act just became costlier. Pursuant to an inflation-adjustment formula, on March 28, 2014 the Department of Justice (“DOJ”) issued a final rule raising the civil monetary penalties assessed or enforced by the Civil Rights Division, including those assessed under Title III of the ADA (“Title III”).
Title III prohibits public accommodations from discriminating against disabled individuals with respect to access to goods, services, programs and facilities, and (with limited exceptions) requires ...
By John F. Fullerton III and Jason Kaufman
Almost four years after it was enacted in 2010, the full impact of the Dodd Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) on the enforceability of predispute arbitration agreements is not completely clear. Some whistleblower retaliation claims are still subject to mandatory arbitration agreements, while others plainly are not, depending upon when the arbitration agreement was executed, the statute under which the claim is brought, and the jurisdiction in which the employer and employee find themselves.
Our colleague Lauri Rasnick, a Member of the Firm at Epstein Becker Green, wrote a Law360 article titled "Drafting Customer Nonsolicitation Provisions in NY." (Read the full version – subscription required.)
Following is an excerpt:
A recent New York Appellate Division First Department decision, TBA Global LLC v. Proscenium Events LLC, et al., Index Nos. 10948, 651171/12, (1st Dept Feb. 5, 2014), may not answer all questions about drafting enforceable nonsolicitation provisions, but it does shed some light on the current state of New York law.
The Lower Court Decision
The case ...
In a complimentary webinar on February 20 (1:00 p.m. ET), our colleagues Frank C. Morris, Jr., and Adam C. Solander will review the ongoing impact of the Affordable Care Act (ACA) on employers and their group health plans.
The Treasury Department and the Internal Revenue Service recently issued highly anticipated final regulations implementing the employer shared responsibility provisions of the ACA, also known as the employer mandate. The rules make several important changes in response to comments on the original proposed regulations issued in December 2012 and provide ...
- H-1B Nonimmigrant Season Opens on April 1, 2014, for Fiscal Year 2015
- H-1B Petition Amendments May Be Required Due to Changed Job Location
- DOL's Administrative Review Board Applies "Bona Fide Termination" Rule to E-3 Worker
- Infosys Pays Record $34 Million in Settlement
- New York Federal District Court Awards Undocumented Immigrants FLSA Damages
- California Passes "Immigrant Friendly" Legislation
- OCAHO Provides ...
My colleague Jason Kaufman and I put together “Five Hot Topics for Financial Services Industry Employers” in this month’s Take 5 newsletter. Below is an excerpt:
The economy may be improving, but challenges remain for employers in the financial services industry. From ever-increasing whistleblower claims to new diversity and inclusion regulations and recent IRS determinations affecting bonus payments, financial services industry employers will have to navigate a number of new developments and potential pitfalls in 2014. Here are five issues to keep an eye on in the new ...
By David Jacobs and Amy B. Messigian
We would like to call your attention to a significant change to the whistleblower statute in California that went into effect on January 1. The statute, Cal. Lab. Code section 1102.5, has been substantially expanded beyond its prior form to now protect employees from retaliation for making internal complaints or even potential complaints about suspected violations of federal, state or local law.
California previously protected employees from retaliation for reporting reasonably suspected violations of state or federal laws to a ...
Our colleague Frank C. Morris, Jr., at Epstein Becker Green wrote the December issue of Take 5, with five key action items for employers in 2014. Following is an excerpt:
It's December, and human resources professionals and law departments are reflecting on the issues addressed in 2013 and giving thanks for incident-free holiday parties. But the big question is this: What issues should get priority attention for 2014 as part of a proactive approach to workplace issues and limiting potential employment and labor law claims? This month's Take 5 provides a "Top 5" list of action items to ...
Our colleague Jang H. Im recently published an article, "The $34 Million Question: What All IT Consulting Companies Should Learn from the Infosys Settlement," pointing out key lessons that all companies, including financial services employers may learn from InfoSys’ immigration issues with the U.S. Department of Justice and the precautionary measures employers should take.
The article is broken down as follows:
1) Beware the Whistleblower
2) Do Not Neglect the Legal Limits on the B-1 Visa Classification
3) Follow the H-1B Requirements Even After Approval
4) Follow the I-9 ...
With my colleagues Peter Stein and Dean Singewald II, I recently coauthored an advisory for employers in the financial services industry: Dodd-Frank Standards Proposed for Assessing Diversity Policies and Practices of Covered Entities in the Financial Services Industry.
Following is an excerpt:
Six federal agencies ("Agencies") subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Act") issued much-anticipated jointly proposed standards in accordance with Section 342 of the Act for assessing the diversity policies and practices of the ...
The Dodd-Frank Act created a comprehensive whistleblowing program by amending the Securities Exchange Act of 1934 to include Section 21F, entitled “Securities Whistleblower Incentives and Protection,” and establishing the “Office of the Whistleblower” to enforce its provisions. Individuals who voluntarily provide the SEC with original information that leads to a successful SEC enforcement action resulting in monetary sanctions greater than $1 million are entitled to an award of between 10 and 30 percent of the total sanctions collected. According ...
At the Firm’s 32nd Annual Client Briefing held yesterday, I spoke on the financial services industry panel about the Dodd-Frank bounty program and the whistleblower anti-retaliation provisions of both the Dodd-Frank and Sarbanes-Oxley Acts. Here are a few takeaways from that session:
- There have been at least three reported awards from the SEC to anonymous tipsters under the Dodd-Frank bounty program, the most recent of which, earlier this month, was an award of $14 million to a whistleblower whose information led to the recovery of “substantial ...
By: Andrew J. Sommer
San Francisco has just become the first municipality in the country to pass a law providing working parents and caregivers the “right to request” flexible or predictable work schedules. The law, which will take effect on January 1, 2014, applies to employers with 20 or more employees within the City of San Francisco. Known as the Family Friendly Workplace Ordinance, the new law allows San Francisco-based employees, after completing six months of employment, to request a flexible or predictable working arrangement so that they can assist with caregiving ...
A New York federal district court has become the second court to hold that the Dodd-Frank anti-retaliation provision, 15 U.S.C. § 78u-6(h)(1)(a), which prohibits retaliation against a whistleblower who makes disclosures required or protected by the Sarbanes-Oxley Act, among other laws, does not apply extraterritorially. In Meng-Lin Liu v. Siemens A.G. (pdf), a judge of the Southern District of New York, consistent with a decision earlier this year by a Texas district court, held that a Taiwanese compliance officer working for a Chinese subsidiary of a ...
Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") requires certain public companies to disclose how the compensation of the company's chief executive officer ("CEO") compares to the compensation of employees generally. The disclosure must include (i) the CEO's annual total compensation, (ii) the median of the annual total compensation of all employees other than the CEO, and (iii) the ratio of (i) over (ii).
Like many of Dodd-Frank's requirements, disclosure of the CEO pay ratio was not required until implementing regulations were ...
We’d like to recommend an upcoming complimentary webinar, “Addressing and Responding to Workplace Violence and Active Shooter Scenarios to Protect Your Employees” (Oct. 2, 2:00 p.m. EDT), by our Epstein Becker Green colleagues Kara M. Maciel, Susan Gross Sholinsky, and Christopher M. Locke, with Daniel Hess and Lynne Cripe of The KonTerra Group, an employee assistance program provider that regularly counsels employees undergoing stressful life events that can lead to violence.
Below is their description of the event:
Violence in the workplace can range from bullying ...
We recommend this recent post on the Hospitality Labor and Employment Law blog: “IRS Releases Proposed Rules on Employer's Information Reporting Requirements Under the Employer Mandate of the Affordable Care Act,” by Kara Maciel, Adam Solander, and Brandon Ge, our colleagues at Epstein Becker Green.
Following is an excerpt:
On September 5, 2013, the Internal Revenue Service (“IRS”) released two proposed rules to implement important reporting requirements under the Patient Protection and Affordable Care Act (“ACA”), which will help determine penalties under the ...
A recent article in Bloomberg BNA's Health Insurance Report will be of interest to financial services employers: "ACA's Employer 'Pay or Play' Mandate Delayed - What Now for Employers?" by Frank C. Morris, Jr., and Adam C. Solander, colleagues of ours, based in Epstein Becker Green's Washington, DC, office.
Following is an excerpt:
The past few weeks have changed the way that most employers will prepare for the employer ‘‘shared responsibility'' provisions of the Affordable Care Act (ACA). Over the past year or so, employers have scrambled to understand their obligations with ...
Our Epstein Becker Green colleague Stuart M. Gerson recently commented in an article titled "4th Circuit Upholds ACA's Employer Mandate, Says Insurance Regulation Within Commerce," by Mary Anne Pazanowski, in Bloomberg BNA's Health Care Daily Report.
Following is an excerpt:
A unanimous U.S. Court of Appeals for the Fourth Circuit July 11 declared the Affordable Care Act's employer mandate a valid exercise of Congress's power to regulate commerce under the U.S. Constitution's Commerce Clause (Liberty University Inc. v. Lew, 4th Cir., No. 10-2347, 7/11/13).
In an opinion ...
Our colleagues Kara Maciel, Frank C. Morris Jr., Elizabeth Bradley, and Adam Solander have posted a client advisory on the recent ACA employer mandate delay, exploring the ramifications and unresolved issues that employers should consider. Following is an excerpt:
In reaction to employers' concerns about the many difficulties posed in efforts to comply with the Employer Mandate provisions of the Affordable Care Act ("ACA"), the Obama administration ("Administration") announced late yesterday that it is delaying the implementation of the penalty provisions and other ...
By: Elizabeth Bradley, Kara M. Maciel & Adam Solander
In breaking news, the Obama Administration has now acknowledged the significant regulatory burdens that the January 1, 2014 deadline under the Affordable Care Act would place on employers. Based on reports, the ACA Employer Mandate has been delayed to 2015! We understand that regulatory guidance will be forthcoming this week.
This is welcome news to employers across the country who have been struggling with compliance efforts under the ACA.
Stay tuned to this blog and www.ebglaw.com for additional information.
Our colleague Amy B. Messigian at Epstein Becker Green recently posted “Supreme Court Decision Sets High Bar for Establishing Retaliation Claims Under Title VII” on the Health Employment and Labor blog, and we think financial services employers will be interested.
Following is an excerpt:
In University of Texas Southwestern Medical Center v. Nassar, one of two employment-related opinions issued on Monday by the Supreme Court, a narrow majority held that a retaliation claim brought under Title VII of the Civil Rights Act of 1964 must be proved according to a strict but for
Our colleague Julie Saker Schlegel at Epstein Becker Green recently posted “Supreme Court Holds That Only Employees Who Have Authority to Take Tangible Employment Actions Constitute Supervisors for the Purpose of Vicarious Liability Under Title VII” on the Retail Labor and Employment Law blog, and we think financial services employers will be interested. Following is an excerpt:
In a 5-4 decision the dissent termed “decidedly employer-friendly,” the Supreme Court held on June 24, 2013 that only employees who have been empowered by the employer to take tangible ...
By: James P. Flynn
The New Jersey Legislature was overwhelmingly in favor of a measure that would have barred employers from obtaining social media IDs and other social media related information from employees and applicants. Click here for A2878 as passed. But Governor Chris Christie vetoed A-2878 because it would frustrate a business’s ability “to safeguard its business assets and proprietary information” and potentially conflict with regulatory requirements on businesses in regulated industries such as finance and healthcare. Click here for the Governor's Veto ...
By Gretchen Harders and Michelle Capezza
On May 8, 2013, the Employee Benefits Security Administration of the Department of Labor (the “DOL”) issued Technical Release 2013-02 (the “Release”) providing important guidance under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) with regard to the requirement that employers provide notices to their employees of the existence of the Health Insurance Marketplace, generally referred to previously as the Exchange. These ...
For the benefit of our readers, we have excerpted two issues from our April 2013 Immigration Alert of relevance for employers in the financial services industry:
USCIS Reports That H-1B Cap Is Reached in First Week
On April 8, 2013, U.S. Citizenship and Immigration Services (“USCIS”) announced that it had received sufficient H-1B petitions to reach the annual quota for fiscal 2014. As most H-1B employers know, the quota is 65,000 for regular H-1B petitions, plus another 20,000 for H-1B petitions filed for foreign nationals (“FNs”) who have obtained a master’s (or higher ...
We’re happy to announce that Epstein Becker Green’s Whistleblowing & Compliance Law Blog has joined our blog. Readers of both blogs will benefit from our coverage of whistleblowing and compliance law, in addition to the financial services employment law topics our readers have come to expect.
This combination represents the addition of more than 40 posts dating back to April 2010, with a focus on Dodd-Frank, Sarbanes-Oxley, the False Claims Act, and whistleblowing-related topics.
In addition, we welcome Allen B. Roberts as a primary contributor to the Financial Services ...
The April 2013 issue of Take 5 was written by David W. Garland, Chair of Epstein Becker Green's Labor and Employment Steering Committee and a Member of the Firm in the New York and Newark offices.
In it, he summarizes five recent labor and employment actions that employers should consider:
- EEOC Releases Letter Addressing Wellness Programs and Reasonable Accommodation Obligations
- Paying Interns May Not Be Enough to Stave Off Wage and Hour Claims
- House Committee Votes Out Bill Prohibiting NLRB from Acting Without a Quorum
- New York City Human Rights Law Expanded to Prohibit ...
It is common practice for financial services companies, through in-house or outside legal counsel, to send letters to former employees upon the employee’s resignation in an effort to remind the employee about his or her post-employment contractual obligations to the company, whether through a non-competition agreement, or non-solicitation / non-disclosure restrictive covenants. A recent court decision affirms that companies and their counsel are shielded from liability for defamation that may arise from the publication of those letters due to the absolute privilege ...
Allen B. Roberts, a Member of Firm in the Labor and Employment practice and co-chair of the firm’s Whistleblowing and Compliance Subpractice Group, in the New York office, wrote an article titled “Impact: Employers Brace for Change – Top 5 Issues Facing Businesses, as appeared in Insurance Advocate.”
Following is an excerpt:
By popular account, the Affordable Care Act (“ACA”) would preserve the base of insureds and extend health insurance coverage to as many as another 32 million Americans. That estimate could be wrong if ACA disrupts patterns and experience of spouse ...
The Second Circuit has given class action waivers another shot in the arm. In Parisi v. Goldman, Sachs & Co. (pdf), plaintiff argued that because she had agreed to arbitrate statutory employment discrimination claims against her employer, but could not proceed in a class-wide arbitration, she must be permitted to pursue her Title VII pattern-or-practice sex discrimination claim as a class action plaintiff in court; otherwise, her arbitration agreement would constitute an impermissible waiver of a substantive statutory right. The Court firmly ...
The scenario of a group departure to a competitor is one that arises time and again in the financial services industry, from trading desks to private wealth management teams. These cause significant concern and anxiety for the employer from whom the employees depart, but also some concern and risk for the hiring employer. Often the teams quit all at once, but sometimes, in an attempt to avoid claims of violations of fiduciary duties or non-poaching clauses, teams have the junior members resign first and the senior members follow later. Our colleagues at the Trade Secrets & Noncompete ...
On March 5, 2013, the U.S. Second Circuit Court of Appeals clarified the burden-shifting framework applicable to whistleblower retaliation claims under Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A. In Bechtel v. Administrative Review Board et al., (pdf), the Court issued a decision, consistent with prior decisions of several other Circuits, that affirmed the burden of proof standard applied by the Administrative Review Board (ARB) in its decision, which affirmed an administrative law judge’s (ALJ) decision that had dismissed the ...
By: John F. Fullerton III and Matthew J. Tronzano
Mandatory class action waivers may have received an important seal of approval as the result of a recent decision arising in the financial services industry. On February 21, 2013, a Financial Industry Regulatory Authority (FINRA) disciplinary hearing panel permitted Charles Schwab & Company, Inc. to maintain its predispute arbitration provision in its customer agreement that includes a class action waiver (pdf). With this development, now may be the time for firms to evaluate and consider class action waivers in their arbitration ...
Epstein Becker Green is pleased to announce the availability of a Wage and Hour Division Investigation Checklist, which provides financial services employers with valuable information about wage and hour investigations and audits conducted by the U.S. Department of Labor (DOL). Like EBG’s first-of-its kind Wage and Hour App, which provides detailed information about federal and state laws, the Checklist is a free resource offered by EBG.
The Checklist provides step-by-step guidance on the following issues: preparation before a Wage and Hour Division investigation of the ...
By: Lauri F. Rasnick
At our October 2012 client briefing we discussed the new attitude of the National Labor Relations Board (“NLRB”) and the fact that non-unionized employers were not immune from the provisions of the National Labor Relations Act (“NLRA”). The NLRA has been increasingly applied in non-union workplaces. And most recently, it has found its way into the financial services industry. In a recent NLRB administrative law judge’s decision, provisions contained in a mortgage banker’s employment agreement were found violative of the NLRA. The provisions at ...
by Maxine H. Neuhauser and Amy E. Hatcher
On January 7, 2013, the New Jersey Department of Labor and Workforce Development (the “Department”) published in the New Jersey Register proposed new rules and notification language to implement a recently enacted law intended to fight gender inequity and bias in the workplace. The notice of proposal is available for downloading here.
The law, which became effective on November 19, 2012, requires every employer in New Jersey with 50 or more employees to post a notice advising employees of their right to be free from gender inequity or bias ...
In less than a year, financial services employers employing at least 50 full-time employees will be subject to the Employer Shared Responsibility provisions. Under these provisions, if financial services employers do not offer health coverage or do not offer affordable health coverage that provides a minimum level of value to their full-time employees, they may be subject to a tax penalty under the proposed regulations just issued by the Internal Revenue Service.
During this program, Epstein Becker Green practitioners will:
- Review the basics of the Employer Shared ...
On Tuesday, December 18, Epstein Becker Green attorneys Gretchen Harders, Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “What Employers Need to Know Now!” as the second webinar in a series on the New ACA Implementation Regulations: Employer Impact.
The webinar included:
- ACA implementation timeline
- Structure of the law and basic concepts affecting financial services employers
- Critical employer decision making and planning for 2014
- Alternative plan design options available to financial services employers
The webinar recording and ...
FINRA is contemplating a new rule that would require brokers transferring firms to inform clients about their signing bonuses or other compensation they are receiving in connection with their moves. The potential rule, which is now out for public comment, is being considered to protect customers. By mandating disclosure of the money offered in connection with a move, the client can consider the true motivation behind the move and whether it is in the client’s best interest to transfer all of his or her business. Indeed, many firms luring over brokers offer ...
Please join Epstein Becker Green’s Health Care & Life Sciences, Employee Benefits, and Labor & Employment practitioners as we continue to review the Affordable Care Act and its ongoing impact on financial services employers and their group health plans and programs.
Since the Presidential election, The U.S. Department of Health and Human Services is moving quickly to implement the Affordable Care Act. Rules have been released in the past few weeks concerning participation in federal exchanges, discrimination based on pre-existing conditions, essential health benefit ...
by Allen B. Roberts, Frank C. Morris, Jr., and Michael J. Slocum
In what has been reported to be the first decision permitting a retaliation claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) to survive dismissal, the U.S. District Court for the District of Connecticut (“Court”) has adopted a broad view of who qualifies as a “whistleblower” under that law. The Court rejected an employer’s request for a literal construction of Dodd-Frank’s definition and protection of whistleblowers, and instead relied upon what it saw as an ambiguity in the statutory language to endorse the Security and Exchange Commission’s (“SEC” or “Commission”) Final Rule implementing the whistleblower provisions of Dodd-Frank (“Final Rule”) that liberally expands protections to individuals who do not fit within the statutory definition of “whistleblowers.” In Kramer v. Trans-Lux Corp., 11-cv-01424 (D. Conn. Sept. 25, 2012), the Court declined to dismiss the lawsuit of an employee who claimed a “reasonable belief” of a “possible” securities law violation governed by the Sarbanes-Oxley Act but did not follow explicit statutory procedures for reporting it.
Kramer’s broad interpretation of Dodd-Frank’s whistleblower protection provisions may not carry the day upon review by a Circuit Court of Appeals and in other district courts, but for now, it can be anticipated that employees claiming retaliation under Dodd-Frank will point to Kramer (and to two other supportive district court cases that themselves did not advance for other reasons) in an effort to survive motions to dismiss.
Kramer Claimed That He Was Fired in Retaliation for Disclosing Alleged Violations of Trans-Lux’s Employee Pension Plan to the Company’s Board and the SEC
Richard Kramer had been the Vice President of Human Resources and Administration of Trans-Lux Corp. (“Trans-Lux”) for nearly two decades. Among his responsibilities were managing his employer’s relationship with the firm, overseeing the company’s ERISA-governed employee pension plan, ensuring compliance with applicable laws and regulations, and serving as plan fiduciary.
According to Kramer’s lawsuit, starting in March 2011, he began to voice a number of alleged concerns regarding composition of the pension plan committee, potential conflicts of interest in the administration of plan investment funds, and required approval and filing of plan amendments and reports. After raising his concerns with the CFO to whom he reported and the CEO, Kramer notified the audit committee of Trans-Lux’s board of directors in May 2011, and followed that with a letter to the SEC. Kramer claims that he began receiving letters of reprimand within hours of sending his communication to the audit committee and that a loss of support and stripping of job responsibilities followed. In July 2011, Trans-Lux announced that July 22, 2011, would be the last day of employment for all human resources personnel, including Kramer.
Kramer sued under, among other statutes, Dodd-Frank’s whistleblower protection provisions, codified at 15 U.S.C. § 78u-6, alleging that he had been terminated in retaliation for reporting his concerns about the company’s pension plan.
by Jeffrey M. Landes, William J. Milani, Susan Gross Sholinsky, Dean L. Silverberg, Anna A. Cohen, and Jennifer A. Goldman
New York State has finally codified its position on permissible deductions from employees’ wages. On November 6, 2012, an amendment to New York’s Labor Law (“Labor Law”) will take effect. The amendment expands the list of employee wage deductions that New York employers may lawfully make, so long as the employee authorizes such deductions.
On September 7, 2012, Governor Andrew Cuomo signed into law the legislation that he introduced, which amends Labor ...
by Allen B. Roberts, Stuart M. Gerson, Frank C. Morris, Jr., and Michael J. Slocum
Our previous postings have noted the progression of decisions during the past two years by the U.S. Department of Labor (“DOL”) Administrative Review Board (“ARB”) that have liberally expanded substantive provisions of whistleblower statutes under its jurisdiction. Now, the ARB has enabled whistleblowers to maintain their administrative complaints and survive dismissal in circumstances where recital of the factual bases of their claims would be fatally deficient if filed in federal ...
by Allen B. Roberts, Frank C. Morris, Jr., Stuart M. Gerson, and Michael J. Slocum
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) extended Sarbanes-Oxley’s whistleblower protection provision beyond employees of publicly-traded companies to reach the employees of their privately-held subsidiaries as well. Reasoning that this extension was “a clarification of Congress’s intent with respect to the Sarbanes-Oxley whistleblower provision,” a federal court held that the extension applies retroactively to cover ...
by Frank C. Morris, Jr., and Allen B. Roberts
The U.S. Department of Labor (“DOL”) Administrative Review Board (“ARB”) has sounded an alarm that needs to be heard by accounting firms, law firms, and other consultants, advisors, and providers of services to publicly traded companies. With its recent decision in Spinner v. David Landau & Associates, LLC, ARB Case Nos. 10-111, 10-115 (May 31, 2012), the ARB continued its expansion of whistleblower protection, holding that Sarbanes-Oxley (“SOX”) whistleblower protections extend to employees of privately held ...
by Allen B. Roberts and Michael J. Slocum
Global whistleblowers cannot look to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) for protection against retaliation, according to a recent federal court decision. Taking an important step towards clarifying the reach of Dodd-Frank, and potentially impacting other statutes having similar provisions, the court ruled that the “Anti-Retaliation Provision” protecting whistleblowers under Dodd-Frank does not apply outside the territorial United States. Asadi v. G.E. Energy (USA ...
by Frank C. Morris, Jr., and Allen B. Roberts
The U.S. Department of Labor (“DOL”) Administrative Review Board (“ARB”) has sounded an alarm that needs to be heard by accounting firms, law firms, and other consultants, advisors, and providers of services to publicly traded companies. With its recent decision in Spinner v. David Landau & Associates, LLC, ARB Case Nos. 10-111, 10-115 (May 31, 2012), the ARB continued its expansion of whistleblower protection, holding that Sarbanes-Oxley (“SOX”) whistleblower protections extend to employees of privately held ...
Guest post by Kara Maciel
In a settlement that all financial service companies should be aware of, Century Heritage FCU, recently resolved a class action lawsuit concerning the accessibility features of its automatic teller machines (“ATMs”). Under the Americans with Disabilities Act (“ADA”), banks, credit unions and financial service companies must make their ATMs accessible for individuals with disabilities. In the settlement, Century Heritage agreed to update its ATMs within 90 days to offer accommodations for blind and visually impaired customers. The credit ...
By: William J. Milani and Anna Kolontyrsky
The Eastern District of New York has rejected a claim for relief under the New York State Human Rights Law (“NYSHRL”) brought by a job applicant who alleged that a bank unlawfully discriminated against her based on her criminal history. In Smith v. Bank of America Corp. (subscription required), Smith, who worked as a temporary employee at Bank of America, was encouraged by her supervisor to apply for full-time employment. Before doing so, she informed her supervisor that she had been arrested and charged with a misdemeanor but that the ...
As a direct result of the financial crisis, an increasing number of states have enacted or are considering statutes that prohibit or restrict employers from obtaining and using credit reports for making hiring and other employment decisions. Eight states have now passed such legislation - California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Washington and Vermont. Similar legislation is pending in many other states - including New Jersey and New York - and bills have been introduced at the federal level as well. In most states that have ...
Before the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”) was enacted, whistleblower claims by registered representatives, including those arising pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) were subject to mandatory arbitration at FINRA. See FINRA Notice 12-21 (PDF). Dodd Frank changed that. Dodd Frank specifically amended SOX to provide that “[n]o dispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section.” In addition, SOX was also amended to ...
By: William J. Milani and Anna Kolontyrsky
The New York Court of Appeals has rejected a wrongful discharge cause of action brought by a hedge fund compliance officer who claimed that he was terminated for questioning a series of personal stock trades by the company’s president. Sullivan v. Harnisch, No. 82 (N.Y. May 8, 2012) (PDF)
Sullivan, who was the Chief Compliance Officer, Executive Vice President, Treasurer, Secretary and Chief Operating Officer of the hedge fund, was terminated after confronting the hedge fund's president about stock trades that Sullivan believed ...
On May 16, I co-hosted a small roundtable discussion here at the firm entitled “Employee Misclassification Issues in the Financial Services Industry: Preventive Maintenance and Proactive Strategies.” The topics included proper application of the administrative exemption from federal and state overtime laws; the nettlesome employee v. independent contractor question; and contingent workforce issues. In attendance was a healthy mix of in-house employment counsel, human resources professionals, management consultants and outside counsel. ...
By: Dena L. Narbaitz
This is the fourth in our series of posts on practice and procedure in employment-related arbitrations before FINRA. Check back often for future posts, subscribe by e-mail (see the sidebar), or follow @FSemployer on Twitter so you don’t miss any updates!
The FINRA Code of Arbitration Procedure provides for a simplified arbitration process in both employment and customer disputes if the dollar amount in controversy is below a certain threshold. The SEC recently approved FINRA’s proposal to raise the dollar limit eligible for simplified arbitration ...
On May 9, 2012, the Second Circuit held that Title VII’s “participation clause,” prohibiting an employer from retaliating against any employee who participates in an investigation “under” Title VII, requires participation in a formal investigation involving the Equal Employment Opportunity Commission (“EEOC”) – participating in purely internal investigations, conducted pursuant to the employer’s own policies and procedures, is not sufficient to trigger the statutory protections. Townsend v. Benjamin Enterprises, Inc., No. 09-0197.
The Second ...
Guest Post By: Kenneth J. Kelly and Diana Costantino Gomprecht
It is not uncommon for international financial institutions to face the conundrum of being required to provide documents and information for litigations in the United States that would violate privacy laws in their home country or where their affiliates are located. The most common issues arise in connection with discovery requests that seek information prohibited by the European Union (“EU”) Data Protection Directive (Directive 95/46/EC) (PDF) that restricts the transfer and processing of broadly ...
The Administrative Review Board (“ARB”) on April 27, 2012 held that where an employer charged with retaliation under the AIR21 Statute can point to evidence of misconduct by a whistleblower which would have justified termination, but which was acquired after the termination had already occurred, that evidence may be used to limit the period for which back pay damages are recoverable. Clemmons v. Ameristar Airways, Inc., ARB Case No. 08-067. The ARB remanded the matter to the Office of Administrative Law Judges (“OALJ”) to clarify whether the employer must prove that it ...
By: Anna Kolontyrsky and Jeffrey Landes
As summer internship season approaches, financial service employers should confirm that their internship programs comply with all relevant laws, including the requirements of the Fair Labor Standards Act (“FLSA”) and applicable state laws. Ascribing the term “intern” to a college or postgraduate student working for an employer for a short duration during the summer months does not automatically exempt the employer from federal and state minimum wage and overtime requirements. Unless the position meets certain statutory and ...
This is the third in our series of posts on practice and procedure in employment-related arbitrations before FINRA. Check back often for future posts, subscribe by e-mail (see the sidebar), or follow @FSemployer on Twitter so you don’t miss any updates!
Once upon a time, it was mandatory under Form U4 that registered representatives file any statutory claims of discrimination (such as age, gender, or race discrimination) in arbitration rather than in court. A well known Supreme Court case decided in 1991, Gilmer v. Interstate/Johnson Lane Corp.
This is the second in our series of posts on practice and procedure in employment-related arbitrations before FINRA. Check back often for future posts, subscribe by e-mail (see the sidebar), or follow @FSemployer on Twitter so you don’t miss any updates!
As a general rule, it is more common to read about employers who have been sued in court by a former employee attempting to compel the claims into arbitration than an employer trying to compel arbitration claims to be filed in court. Yet, under the occasionally overlooked FINRA Rule 13803, employers who ...
Michelle Capezza, our colleague at Epstein Becker Green, recently posted a useful summary of the JOBS Act, and we recommend it to our readers in the financial services industry. See below for an excerpt and link.
On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act, or JOBS Act. In light of the sharp decline in the number of companies entering the U.S. capital markets through IPOs over the last ten years, Congress recognized a need for this legislation since small companies are critical to economic growth and job creation. To promote growth and ...
By: Allen B. Roberts and Frank C. Morris, Jr.
Continuing its trend from 2011, the Department of Labor (DOL) Administrative Review Board (ARB) seems intent on extending whistleblower protection under the Sarbanes-Oxley Act of 2002 (SOX) beyond allegations of securities fraud – even where that means reversal of its own administrative law judges who believe they are applying the law as Congress intended and consistent with ARB precedent. For now, whistleblowers and their attorneys can expect a more hospitable reception in this administrative forum for innovative claims alleging that adverse employment actions have occurred in reprisal for activity claimed to be covered by SOX Section 806.
The ARB’s March 28, 2012 decision in Zinn v. American Commercial Lines Inc. (pdf) builds from the groundbreaking May 2011 holding in Sylvester v. Paraxel, Int’l LLC that “a reasonable belief about a violation of any rule or regulation of the Securities and Exchange Commission could encompass a situation in which the violation, if committed, is completely devoid of any type of fraud,” and a whistleblower need not prove fraud to win a retaliation claim. Zinn, at 8. Further, even if the whistleblower’s belief is mistaken, and no actual violation of the law has occurred, whistleblower protections are available and will be enforced. Id. at 10.
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