Roth: The potential of offshore wind production

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 16, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The potential of offshore wind production

There have been so many exciting clean energy topics to cover lately that I want to circle back to one that was announced in late summer.

We know onshore wind development costs continue to decrease, but as Seb Henbest from Bloomberg New Energy Finance indicated, (hinting at that group’s National Energy Outlook report) offshore wind costs are expected to fall even more rapidly than those of onshore wind. The in-depth report considers factors that will shape the sector to 2040.

This prediction is all the more likely thanks, at least in part, to U.S. Sens. Tom Carper, D-Del., and Susan Collins, R-Maine, along with 10 of their colleagues from states all across the nation, who have introduced a bill that will encourage the development of offshore wind.

The legislation, if passed, would incentivize developers using a 30 percent investment tax credit redeemable for the first 3,000 megawatts placed into service. In an environment where incentives are being swiped from our local wind developers, it is refreshing to see a group of our nation’s representatives, diverse in both their geography and political affiliations, propose such a productive industry expansion bill.

The lawmakers suggest that volume of energy capacity would require the development of 600 wind turbines. Emphasizing the critical role the tax credit would play, the bill proposes to incentivize the first 3,000 megawatts, rather than a specific cutting off the credit on a specified date. The legislation defines “offshore facilities” broadly, including any facility located in the inland navigable waters of the United States, such as the Great Lakes, or in coastal waters including the territorial seas of the United States.

What makes this exciting is that while there is the potential to power the entire east coast with offshore, as with all burgeoning technology, costs are high. But as Europe has demonstrated, a little incentive goes a long way. The result: increased investment combines with advances in technology which lead to rapid declines in cost. It is a proverbial win-win. Or, as the authors of this new legislation called it, a “win-win-win” (domestically-produced, renewable power, cleaner air, and more American jobs).

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: Certificate of need laws can bridle behavioral, other care

From NewsOK / by Paula Burkes
Published: October 12, 2017
Click to see full story – Certificate of need laws can bridle behavioral, other care

Click to see Mary Holloway Richard’s attorney profile

Mary Richard is recognized as one of the pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Q: What are Certificate of Need (CON) laws and what is the status of CON in Oklahoma?

A: The history of CON laws is an interesting one. Federal law required CON for facilities that received federal funds to construct facilities. By 1978, unique CON statutes were passed in 36 states. Although the federal mandate was repealed in 1987, many states still have CON laws in place. The CON system was intended by Congress as one mechanism for controlling health care costs by controlling development. The idea was that unnecessary beds or services would drive up the costs and miss system efficiencies and economies of scale. Development was broadly defined to include activities ranging from new development, acquisitions, mergers, management agreements, leases, stock purchases and changes in ownership via foreclosure. The Oklahoma legislature repealed CON laws in all areas except for psychiatric and chemical dependency services and long-term care.

Q: What are current requirements for developing long-term care and behavioral health services in Oklahoma under these statutory schemes?

A: For long-term care, the Oklahoma law provides for development of long-term care services in a “ … planned orderly economical manner consistent with and appropriate to services needed by people in various (parts of Oklahoma) ….” Development must match or reflect the need demonstrated in the CON application as evaluated by the state Department of Health. The statutes also enumerate the powers of the Department of Health with regard to long-term care facilities, and services. The law applies to long-term care facilities including nursing homes, specialized facilities such as long-term acute care and skilled nursing facilities and the nursing component of continuity of care and life care communities. For psychiatric and chemical dependency service facilities, the process is outlined in the statutes and includes application requirements, findings by the state Board of Health, providing bases for the board’s decision, the opportunity for appeal of the board’s decision and an explanation of potential penalties for failure to comply.

Q: Some writers and consultants in the health care industry contend that these laws no longer serve the purposes for which they were created by legislatures or fail to achieve the ostensible objectives. Is this fair criticism?

A: All segments of the health care industry are highly regulated. There is a good argument to be made that business decisions in the health care space are guided by reimbursement, the impact of effectiveness and outcome metrics, and classic business principles such as market share and that, while the original ideas supporting the CON effort may have been sound, the system now provides an additional hurdle and expenses in two areas of significant needs in our state — services to the elderly and others requiring long-term care and to those suffering with behavioral health diagnoses. More specifically, Oklahoma’s CON rules apply only to hospitals so that development for treatment facilities not considered “hospitals” by the Oklahoma Department of Health are not covered by the CON procedures and limitations. The result is that addiction treatment facilities providing services, including beds, only require approval of the Oklahoma Department of Mental Health and Substance Abuse Services, which does not have its own CON process and can be developed without hindrance.

Q: Is there interest among Oklahoma lawmakers to repeal the last vestiges of CON law in Oklahoma?

A: Although this issue has come up in the last several years, it has not been successful. No such legislation was proposed in the first regular session of this legislative term, which ended in May. In terms of the status of CON laws in the nation, as of 2016, 14 states had discontinued their certificate of need requirements and 34 continued with some remnant of the CON system.

Roth: Energy policies should communicate Oklahoma is open for business

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 9, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Energy policies should communicate Oklahoma is open for business

Oklahoma wind’s positive impacts on our state are well-documented: more than $12.3 billion invested, more than 8,000 home-grown jobs and $22 million paid annually to farmers and ranchers in the form of land-lease payments, in addition to myriad other benefits. What’s more, wind energy is infinite, and its reliability has helped steady electricity costs and lower utility bills for citizens statewide.

As special session marches on, there’s no doubt our state legislators have their work cut out for them – we’ve got a historic budget hole to fill. However, we must be careful not to make decisions in a panic today that will permanently damage our state’s long-term economic health.

When other industries were forced into hiring freezes, wind energy was hiring. When drought struck Oklahoma’s farmlands, wind energy was there to supplement farmers’ and ranchers’ incomes with land-lease payments. When rural schools started suffering without resources, wind energy companies hand-delivered school supplies. Additionally, the industry is projected to pay in excess of $1.2 billion in property taxes through 2043 directly funding public schools.

However, with stakes high at the state Capitol, anti-wind special interests, lobbyists and some legislators are targeting wind energy yet again, calling for punitive measures that would place an unfair burden on this industry, even after wind energy has given up every industry-specific tax incentive. It’s important Oklahomans and our elected officials know the truth so they can protect themselves from rampant misinformation about an industry that’s invested so much in our state.

The latest threat from the anti-wind lobby surrounds Oklahoma’s manufacturing sales tax exemption, which enables any company operating in Oklahoma that applies for a specific permit the opportunity to take advantage of this exemption to offset its operation costs for purchases of machinery and equipment, energy and tangible personal property used in design, development and manufacturing. These special interests want to single out wind energy and keep them from claiming this exemption, even while all other manufacturing industries – including other members of the energy industry – are still able to participate. It just doesn’t make sense.

Exemptions like these are common and proven tools for attracting outside business investment and keeping existing business investment in a given area. Energy projects across the spectrum are known for being very capital-intensive, and often millions have been spent and countless jobs created before oil and gas companies start drilling or wind companies install turbines.

Punitively removing one industry from this exemption’s benefit only stands to drive wind energy investment to friendlier states, taking their jobs, landowner payments and taxes with them. And the risk of losing investments to neighboring states is real. Developers warn me that such a repeal would be a self-defeating step, as dollars leave the state. It is estimated that wind in Oklahoma would then be 30-50 percent more expensive than in Texas, Kansas and Nebraska. Further, Oklahoma will miss out on new investment opportunities with our Southwest Power Pool expanding to include Colorado and Wyoming, as the SPP buys electricity on low price alone. Now is not the time to drive energy investment out of Oklahoma.

We must start thinking long-term, showing diverse industries that Oklahoma is open for business. As our elected officials gather next week for special session, I’ll be calling my legislators asking them to support wind energy and keep wind investing in Oklahoma. I hope you’ll join me.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Sharp spike in EEOC lawsuits

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on October 5, 2017.


Byrona J. Maule is a Director and litigation attorney as well as Co-Chair of the Firm’s Labor & Employment practice group. She represents executives and companies in a wide range of business and litigation matters with a strong emphasis on employment matters.

By Phillips Murrah Director Byrona J. Maule

Fall is a time of change. But this fall, the transition from summer isn’t the only change we’re experiencing. This fall has also brought extraordinary action from the Equal Employment Opportunity Commission. Starting in July, the EEOC has filed a flurry of federal lawsuits against both private and public employers.

In July 2017, the EEOC filed 20 lawsuits, compared to eight in July 2016, according to EEOC.gov’s announcements. At first, I thought this was some type of anomaly, but it continued into August 2017 with another 20 lawsuits filed, compared to eight last August. In September, they filed a whopping 69 lawsuits, as opposed to 22 in September 2016. To date, the EEOC has filed 241 lawsuits in 2017, compared to 86 in all of 2016. With three months left in 2017, there is no reason to believe the rest of 2017 will trend any differently.

Other changes in the EEOC’s activity include an inclination to file suit against an employer in a single plaintiff case, as opposed to lawsuits in which the outcome would have a broad impact on society. The EEOC’s 2012-2016 Strategic Plan emphasized using litigation mechanisms to identify and attack discriminatory policies and other instances of systemic discrimination. This emphasis seems to have waned.

Considering the life cycle of an EEOC lawsuit from charge to the EEOC’s decision to file a lawsuit takes multiple years, this sharp spike in the number of merit lawsuits being filed does not indicate that workplace behavior has drastically changed in recent months. Rather, the change appears to be in the decision-making process of the EEOC when deciding if it is going to file a lawsuit and what types of lawsuits the EEOC pursues. In one recent case involving Home Depot, the EEOC filed charges despite the company’s position it had reached agreement with the EEOC on the major terms of a settlement.

What does it all mean? It is difficult to know at this point. The real significance for employers is there are significantly more lawsuits being brought by the EEOC in 2017 than at any time between 2012 and 2016. Employers need to be very aware of this, and approach EEOC charges with increased attention.

Byrona J. Maule is a partner and co-chair of the labor and employment practice group at Oklahoma City-based law firm Phillips Murrah.

Roth: National Clean Energy Week

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 2, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

National Clean Energy Week

Friday marked the end of the inaugural National Clean Energy Week. The brainchild of several energy groups and associations, the idea is to give clean energy the attention it deserves.

I, for one, am happy to oblige. Imagine this: You electrify your house with rooftop solar panels, perhaps those are backed by a Tesla home battery that provides a charge to your electric vehicle while you sleep, your geothermal system heats and cools your home using heat from the Earth’s core, and water for a hot shower comes thanks to a solar water heater.

Where any of this technology fails to provide the power you need, the local utility provides wind power and when that is intermittent, it is backed by the cleanest of the fossil fuels, natural gas. All of this is quite achievable, especially in Oklahoma, and we should all consider these innovative and renewable energies, even after the close of National Clean Energy Week.

As you ponder that, consider these recent highlights from each major renewable energy source that power our lives – wind, solar, geothermal, electric vehicles.

Wind: A newly introduced U.S. Senate bill would create a new investment tax credit to kick-start offshore wind. I look forward to following and discussing this in the future. Here in Oklahoma, the exciting news to keep your eye on has to be Public Service Co. of Oklahoma’s announcement of the Wind Catcher project that would provide PSO and SWEPCO’s areas with 2,000 megawatts of wind from the Oklahoma Panhandle.

Solar: As discussed last week, the holding pattern continues as the entire solar industry awaits the outcome of the International Trade Commission tariff case. Solar has made huge strides in the past few years and it is widely believed that it will overtake wind in the next decade or so. American jobs in solar grew at a 25-percent pace over last year to 260,077 today. The growth projections for solar energy (and solar jobs) are pretty striking since today the total U.S. installed solar capacity is around 40 gigawatts, while wind sits at approximately 82 gigawatts.

Geothermal: The science and mechanics of this source is tried and true. The perpetual heat that can be pumped using geothermal systems within “about 33,000 feet of Earth’s surface contains 50,000 times more energy than all the oil and natural gas resources in the world.” Geothermal has wide application from residential backyards to large power plants. Ask anyone who has a system installed and prepare to be shocked at how low their utility bills are all year long.

Electric Vehicles: Dyson, the company that made us enjoy vacuuming again, just announced it will join the EV industry with plans to have its version available in 2020. If Dyson remains true to its brand, the car is sure to be simple and sleek.

Move over, Elon Musk? But seriously, Tesla continues to keep us in awe, this time with a touch-screen in place of traditionally built-in dashboard controls in the new Model 3. That one starts at $35,000 and gets 220 miles of range, and may finally be in range for more consumers. Moreover, if you do not want a Tesla, there are 12 other EV choices in America today. The projections are that by 2040 more than one-third of all vehicles will be electric or plug-in hybrids.

So while it is clear that clean energy is becoming a daily thing every year going forward, the first Clean Energy Week has just concluded, but really, it has just begun.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: Feds paid $60 million in ‘improper’ Medicare payments last year

From NewsOK / by Paula Burkes
Published: September 29, 2017
Click to see full story – Feds paid $60 million in ‘improper’ Medicare payments last year

Click to see Mary Holloway Richard’s attorney profile

Mary Richard is recognized as one of the pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Q: In 2016 the federal government paid out $60 million in “improper payments” to Medicare and Medicare Advantage plans. What are improper payments?

A: The prohibition against improper payments applies to Medicare and to the Medicare Advantage plans which stand in the place of Parts A and B but offer more choices to patients in the private insurance market. Most are HMOs, PPOs and private fee-for-service plans. “Improper payments” refers to both underpayments and overpayments. The most common payment problems are traced to insufficient documentation of the care provided. Other problems are no documentation, failure to establish medical necessity and incorrect coding. Regulators tell us that the objective is to understanding the ordering practitioner’s reasoning in evaluating and diagnosing a patient, in considering alternative course of action and in selecting a specific treatment plan with the patient. Just as physicians have been trained to document robust informed consent, they are now being called upon to document their thought processes as a way of demonstrating the legitimacy of the treatment.

Q: What action can the federal government take once an improper payment has been identified by the Center for Medicare and Medicaid Services (CMS)?

A: The CMS is part of the Department of Health and Human Services and it has an investigative arm known as the Office of the Inspector General (OIG), which is the most robust of all federal agencies’ legal and investigative arms. The OIG can investigate a provider and refer the matter to the Department of Justice to bring a criminal or civil action against the provider that can result in repayments, penalties and even incarceration. Such actions also ultimately can result in exclusion from federal payment programs and even loss of the provider’s clinical license to practice. A demand for repayment can be based on an extrapolation of a statistical sample of a provider’s claims submission and payment history.

Q: How can providers avoid making claims that result in improper payments? Are there certain kinds of providers who are at the greatest risk for coding errors?

A: In the face of this regulatory environment, providers would do well to engage in periodic preventive spot audits of their medical records documentation, coding and billing activity. Billing regulations are increasingly complex and require advanced training not only of the practitioner, but also of his or her staff, billing company and supporting professionals such as accountants and attorneys. Continuing education, coding seminars and the like are the order of the day for persons with these responsibilities.

Q: What’s the potential impact of these billing errors on patients and on providers?

A: Improper documentation can be a result of mistakes, faulty documentation or fraud. Some documentation shortcomings can be traced back to the provider’s original training or education. Others relate to the electronic records formatting, which some experts argue fosters copying responses rather than creating medical record entries for each patient. Ideally, eliminating unnecessary claims benefits the health care system financially and so ultimately benefits the patient. However, in my experience, “false claims” often represent a failure on the business side of a medical practice or facility operations in a situation where quality services were actually performed. But once characterized as an overpayment, the amount paid by the Medicare contractor must be returned despite the fact that quality services were provided.

Roth: When ‘America First’ meets American solar energy

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on September 25, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

When ‘America First’ meets American solar energy

The plot thickens in the Suniva and SolarWorld case before the International Trade Commission.

On Friday, the U.S. International Trade Commission ruled that imported solar panels and modules are causing serious injury to U.S. manufacturers, giving the president the final say about tariffs in this high-profile case that could unravel the American solar industry.

Parties on both sides claimed that a vote in favor (or one against) could devastate the rooftop solar industry.

Section 201 of the 1974 Trade Act refers to global safeguard investigations and is an infrequently used measure that allows a petition to be filed when domestic manufacturers assert serious injury to their industry due to an influx of foreign imports. After an investigation and finding of injury, the act authorizes the president to intervene.

U.S. solar crystalline silicon photovoltaic manufacturers Suniva and SolarWorld have declared that competition from cheap imports is adversely affecting the industry here in America. The companies cite their recent bankruptcy filing and the failure of other solar manufacturers across the country in recent years as their proof.

But the industry’s trade group, Solar Energy Industries Association, also suggests that as many as 88,000 U.S. jobs – many of them solar manufacturers and installers – could be lost if the imported panels face higher tariffs, and thus were to raise the cost to Americans for solar energy. What’s more, while each has a presence in the U.S., Suniva and SolarWorld are both foreign-owned companies arguing for the American market.

So why does it matter? Power generated by solar energy has increased significantly as a viable option due in part to how cheap solar energy is becoming. This fast-moving downward cost trajectory is due to significant improvements in the technologies and also less-expensive, imported panels. It follows naturally that cheaper imports have allowed the installation side of the industry to flourish as the investments make more sense for individuals and companies to install solar on their homes and businesses. If the petitioners are granted the increased tariffs, the cost of solar panels is projected to more than double.

A remedy hearing will be held at which the commission will issue recommendations to the president. The act empowers the president to deal with those recommendations as he sees fit, including the liberty to make them more severe, less so, or not implement them at all. This fact has solar industry stakeholders paying close attention given the president’s repeated threats to increase tariffs on Chinese imports both as a way to improve U.S. manufacturing, and to bolster the coal industry by diminishing renewable energies strong growth in America.

It will be November before we know what the proposed remedy will look like. Stay tuned to see if Chinese solar panels prove to be the “tariff silver platter” the president has been requesting. While punishing cheaper imports may be an “America First” argument for manufacturers, in this instance it appears it could be the opposite effect for American consumers.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: Data security, cyber threats are everyone’s concern

From NewsOK / by Paula Burkes
Published: September 20, 2017
Click to see full story – Data security, cyber threats are everyone’s concern

Click to see Fred Leibrock’s attorney profile

Fred A. Leibrock is an experienced trial lawyer who has tried dozens of jury trials and has served as lead counsel in a number of significant cases involving complex, multi-jurisdiction issues.

Q: With the recent breach of Equifax, it seems that vulnerability to identity fraud is everywhere. Are there measures I can take on behalf of my company and employees to minimize risk?

A: Act now and seek professional technical assistance. Hire the right technical person or firm to help you test your systems, assess your vulnerabilities and implement your protection and recovery plans. The question isn’t whether someone will try to steal your data, but when. You need to be ready.

Q: From a legal standpoint, if my company’s data is breached, can my company be held liable for harm to employees or customers whose information may have been compromised?

A: Yes. Although this is a rapidly emerging area of the law, as a general rule an entity that is negligent in safeguarding confidential customer or employee data can be held liable as a result of a breach, or as a result of disregarding legal notice requirements after the breach. The principal question on the issue of liability is whether the entity took reasonable steps before the breach to protect the data, and after the breach to protect and notify the customers or employees. What’s reasonable is a moving target that must be determined on a case-by-case basis. However, there are few legitimate excuses in this day and age for a company to not take significant affirmative steps to safeguard electronic data.

Q: What are some of the bigger mistakes that companies make when it comes to protecting their data?

A: According to the Federal Trade Commission, the principal unreasonable practices that result in data breaches include weak password policies, lack of encryption, broad dissemination of administrative passwords, and lack of security between systems with sensitive data and other computers inside and outside the network.

Q: What measures can I take to protect my company from a data breach?

A: Engage in advance planning. To reduce the risks of a data breach, follow the recommendations of the National Institute for Standards & Technology by planning ahead of a breach to: identify the components of your systems and their vulnerabilities; protect the components from penetration; detect latent threats that may have already penetrated your systems; respond to a breach and recover from a breach. Also, train your employees to be alert to cybersecurity risks.

Q: It seems like all businesses rely on digital data transfer, whether it’s using file transfer services or sending sensitive documents through email. How do I continue to take advantage of these conveniences and still secure my information?

A: Avoid unnecessary risks. There are a million affordable products on the market that allow you to encrypt stored data and data in transmission. Use them and be willing to pay for data protection. If you must transmit sensitive data over an unsecure network, at a minimum encrypt it with a strong password before transmitting it.

Roth: Time to reap benefits of hydrogen

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on September 11, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Time to reap benefits of hydrogen

A previous column considered hydrogen’s increased use primarily in fuel cell vehicles, but there are some exciting advancements for hydrogen’s potential use in utilities.

Innovation requires effort and capital, so augmenting the research that expands the applicability of hydrogen is key. Hydrogen is not just for NASA’s rockets or, worse yet, even for North Korea’s crazy rocket testing. Hydrogen is used all over the world to fuel public buses, material-handling vehicles like forklifts, and as mentioned, fuel cell vehicles. Hydrogen can help solve energy problems in the future, but the research needs continued funding.

Promisingly, several corporations are leading the charge, as well as great work by the National Renewable Energy Laboratories.

I open with a reference to NREL, which is known as a neutral organization, owned by the U.S. government and funded by the U.S. Department of Energy, but run by a private contractor, because, as always, there is another side to hydrogen’s uptick: the side against it.

First as a refresher, some high points of hydrogen’s potential as a fuel. It can be stored indefinitely and transported easily, which makes it a viable solution to the intermittency issues posed by some renewable energy. Timeless storage and ease of transport also make hydrogen fuel cells more efficient and longer-lasting than lithium-ion battery technology, which is currently experiencing a zenith.

Tesla co-founder Elon Musk is quoted saying hydrogen as fuel “is incredibly dumb,” but comparing hydrogen cell-fueled to purely electric vehicles at this point would be to undermine its potential – the technology just isn’t as developed yet. When we were all carrying (and impressed by the capabilities of) PDAs, it is a great thing that Steve Jobs and Steve Wozniak proceeded with the technology that would give us iPhones, though at the time, it probably seemed far-fetched.

Other naysayers cite a lack of infrastructure. The counterargument to this has to be: Were there cellphone charging stations inside airports in 2010? Demand can produce the infrastructure, although its growth may be incremental.

I prefer the old adage “rising tides lift all boats.” Obviously, the future of hydrogen cell-powered vehicles is yet to be seen, but it is exciting to think of yet another clean energy option, which Oklahoma can strongly contribute. It’s also interesting to think, as Motley Fool recently stated, that investing in certain hydrogen fuel cell stocks today is likely akin to buying Amazon stock in 1997 ($5,000 then, worth $1M now). Please consult your own investment expert before following that advice.

But nonetheless, if since the 1970s NASA could use hydrogen to fuel its space shuttle and also allow the crew to safely drink the byproduct of that fuel, then isn’t it high-time the rest of us reap some of the benefits of abundant hydrogen here on Earth?

Major global companies like Royal Dutch Shell, Total SA and Toyota have formed a hydrogen council of 13 energy, transport and industrial companies to consult with public policymakers about the promise of hydrogen. They have committed nearly 11 billion euros in hydrogen-related products within the next five years and are betting that batteries are not the only way that hydrogen can help reduce pollution in cars, homes, utilities and businesses. That type of push may just be what hydrogen needs to get off the ground.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: Forced pooling in mineral land leasing has upsides, downsides

From NewsOK / by Paula Burkes
Published: August 31, 2017
Click to see full story – Forced pooling in mineral land leasing has upsides, downsides

Click to see Melissa Gardner’s attorney profile

Melissa Gardner is a Director who practices in the Energy & Natural Resources Practice Group.

Q: If you’re approached about leasing minerals, do you have options?

A: You do have options. However, none of those options include avoiding leasing your minerals. In Oklahoma, the development of minerals is a compelling state interest. Therefore, if you refuse to lease your minerals, you will be subject to forced pooling. Forced pooling of minerals is similar, in many ways, to acquiring property via eminent domain. However, in this context, it’s a private company acquiring the minerals for a period of time to develop a spacing unit. Because such acquisition is a “taking,” it’s in a much more limited form than leasing the same minerals.

Q: Why would the state allow companies to “take” individuals’ minerals?

A: If an individual in the middle of a spacing unit refused to negotiate or lease their minerals to an operator, their “holdout” would prevent the surrounding mineral owners from developing their assets. This, combined with the aforementioned state interest of developing oil and gas in our state, has led courts and the Legislature to determine it’s in everyone’s best interest to ensure production.

Q: What are the pros and cons of leasing versus being made subject to a forced pooling order?

A: If you choose to sign a lease, you will have the ability to negotiate more of the specifics of the usage of your minerals. You are in a position to get the oil and gas companies to agree to some conditions and special provisions. If you are subject to a forced pooling (as managed by the Oklahoma Corporation Commission), you’re not in a position to negotiate these details.

Second, you can negotiate bonus and royalty costs. If you are subject to a forced pooling order, you’re given three options, being a combination of the prevailing prices in the surrounding areas, with no option to negotiate those prices. In the alternative, if you allow yourself to be subject to the OCC forced pooling order, the applicant is given a shorter time within which it has to commence operations. The average lease is valid for three to five years, whereas the average pooling order is valid for six months to a year, both of which extend after production has been initiated. This keeps your minerals under contract for a shorter period of time.

Additionally, the minerals only are forced pooled as to certain, limited geological formations. If a well is drilled and producing from those zones, your minerals are still open and unleased as to other, non-pooled zones. In the alternative, most leases cover all depths or, at a minimum, from the surface to a certain depth below the surface. Finally, forced pooling orders expire at the end of production. If a producing well is drilled during the first year of a five-year lease and only produces for two years, the lease remains valid, and your minerals remain unmarketable for re-lease, for an additional three years.

Roth: Sun shines as energy option in state

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 28, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Sun shines as energy option in state

Keeping with last week’s solar theme, I recently ran across an Aug. 28, 1982 news article by M.J. Van Deventer that highlighted another bright spot in the booming solar industry 35 years ago in Oklahoma. The article highlighted local, women-run businesses and gave a fascinating insight into these energy pioneers working in the burgeoning solar industry.

“(The Oklahoma Solar Energy Industries) Association records listed 15 member businesses one year ago, and none had female executives. Today, the association counts 45 state corporations involved with solar. Of the total, at least 15 include women in top executive or management positions.”

How about that? Thirty-five years ago, Oklahoma had a nascent, but women-led thriving solar energy industry. This pleasantly surprising realization made me proud of 1982 Oklahoma. And naturally, I wanted to know the history.

In 1978, Congress passed the Public Utility Regulatory Policy Act, or PURPA. Initially, PURPA provided independent energy producers interconnection rights to the electric grid. This general concept is known today as utility deregulation, with the nearest example in Texas.

PURPA also required utilities to buy electric power from such private qualifying facilities at an avoided cost rate. Avoided cost is the marginal cost for a public utility to produce one more unit of power. These developments provided a market for utility-scale applications of photovoltaic electricity and other solar electricity systems as it paid the equivalent to what it would have otherwise cost the utility to generate or purchase that power themselves. Further, utilities had to provide backup electricity – at a fair rate – to customers who choose to utilize residential rooftop PV systems. These concepts were premised on ideas of customer-friendly competition.

However, there is more to how Oklahoma’s initial solar industry began to grow. Passed the same day as PURPA, the Energy Tax Act, part of the National Energy Act, had the goal of shifting away from traditional energy dependency toward energy conservation.

It was a response to unstable geopolitical events, namely the 1973 oil crisis and other events. The ETA provided tax credits to homeowners who installed renewables such as solar, wind, or geothermal. The act also incentivized the production and purchase of fuel-efficient vehicles.

This began a trend that spanned the country and saw individuals investing in safe, reliable, renewable energy. And as you know, some of these concepts have waned, while others have flourished.

So where is Oklahoma’s solar industry today? In addition to geopolitical rifts, U.S. politics played a large role in this story. Suffice it to say, these incentives left the White House not long after President Carter due to the Reagan administration’s position that renewables should be left to the free market. And famously, the new administration even removed the solar panels that had been installed atop the White House. Over the coming years, the change in policy and attitudes also blunted efforts here at home.

Today, most observers believe that the second coming of solar energy will thrive no matter who occupies the White House, mainly because solar economics have improved enormously. The price of panels, coupled with the rising prices of electricity, create a comparative opportunity for a quicker payback.

Oklahoma’s energy blessings of affordable and abundant natural gas, and even cheaper wind energy, make Oklahoma’s price for electricity (10.53 cents per kilowatt-hour) one of the lowest in the country (the American average is 13.22 cents), thanks in large measure to our utilities’ cost-conscious efforts and cheaper fuel.

This mixed blessing may mean a slower payback for a rooftop installation, compared with a California resident (19.39 cents), but today’s technology and our state’s solar ratings and libertarian tendencies mean that as an energy option, the sun is definitely shining again.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Amendment sharpens valuable tool

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on August 24, 2017.


Hilary A. Hudson is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

By Phillips Murrah Attorney Hilary A. Hudson

The Oklahoma Open Records Act, Okla. Stat. tit. 51, § 24A.1, et seq, has been in place since 1985, but its value as a tool for discovering information related to private parties can still go overlooked. A recent amendment to the act, which goes into effect on Nov. 1, further strengthens the measure, demonstrating the ongoing utility of citizen open records requests.

Often discussed in the context of government transparency, the Oklahoma Open Records Act also provides an avenue for litigators and potential litigants to obtain reliable information about private parties through relatively discreet and non-adversarial channels. Often, information like license and permit applications, safety inspection results, and communications between businesses and government employees are fair game to those who think to ask.

A generally straightforward measure, the act requires all public bodies and public officials to make their records available for inspection or copying. No formal written request is required, as the act requires public bodies to have a designated record custodian available at all times to release records during regular business hours.

The recent amendment to the act, passed via Senate Bill 191, further advances the act’s policy of speedy disclosure. The amendment requires any delay in providing access to records to be limited solely to the time required for preparing the requested documents and the avoidance of excessive disruptions of the public body’s essential functions, and states that simple records requests cannot be delayed pending the completion of more complex requests. These changes send a clear message that the act mandates not just transparency, but efficient and responsive transparency.

In litigation, discovery disputes are common and commonly reviled by judges and attorneys alike. The records custodian responding to your request, on the other hand, likely has no ax to grind. If a government agency might have the information you seek, try picking up the phone and finding out how helpful your local government employees can be. Keep in mind, however, as the act states, “persons who submit information to public bodies have no right to keep this information from public access.” For private parties divulging information to the government for business purposes, that’s a knife that cuts both ways.

Hilary A. Hudson is an attorney at Phillips Murrah and a member of the firm’s Litigation Practice Group.

Phillips Murrah Attorneys talk tech at the Firm’s AM@PM Breakfast Forum

From left: Phillips Murrah Attorneys Fred A. Leibrock, Cody J. Cooper, Kathryn D. Terry and Byrona J. Maule

On Tuesday, Aug. 22, Phillips Murrah hosted a technology-related panel discussion called “Real Risks in the Virtual World,” as a part of their AM@PM Breakfast Forum series.

  • The panel was moderated by Director Juston R. Givens.
  • Director and Phillips Murrah CIO Fred A. Leibrock discussed data security and breach avoidance practices.
  • Director Kathryn D. Terry offered real-world, rapid-response lessons from having represented a client that fell victim to a large-scale phishing scam.
  • Patent Attorney Cody J. Cooper discussed data mapping and preservation considerations related to litigation holds.
  • Director Byrona J. Maule outlined risks and benefits for employers related to “bring your own device” policies.

The well-attended panel discussion event was held at Vast on the 50th floor of the Devon Tower.

For more information about AM@PM Breakfast Forum, go to phillipsmurrah.com/AM-at-PM.

 

 

Roth: The great American solar eclipse

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 21, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The great American solar eclipse

As we prepare for the solar eclipse on Monday, here are some facts and ideas I found to be worthwhile.

First, a solar eclipse is when the moon completely obscures the bright light of the sun, revealing its fainter corona. And a fainter corona is not a light beer, just FYI.

While solar eclipses occur once or twice a year somewhere on the planet, what is rare and exciting is “totality.” The diameter of the sun is about 400 times the size of the moon. And on average the sun is about 400 times farther away. As a result of this coincidence, we get spectacular, and very coincidental solar eclipses.

Since the sun is a perpetual series of thermonuclear explosions, definitely heed the warnings not to look directly at it. Hence the reason for UV-blocking solar glasses or if you have them, welding goggles. Although it will be darker before, during and immediately after the eclipse, it is still not safe to look at the sun directly or with a telescope.

There are safe glasses available in stores or online, but be careful because there are reports of some inferior or fake glasses being sold places too. Amazon discovered that many being sold on its site were not certified. As such, Amazon sent warning emails and offered refunds to purchasers with no merchandise return necessary. Be sure yours are certified by NASA and the American Astronomical Society.

There is so much information about the eclipse. Forbes’ 5 Things Not to Do During Totality included a reminder to be in the moment and enjoy not just the eclipse, but the rest of the sky, the birds, the darkness, and so on.

While we are enjoying the view, wildlife is known to be confused by the darkness eclipses create – some nocturnal fauna may even emerge mistaking it for nighttime.

Royal Caribbean ran with the comic coincidence idea by booking Bonnie Tyler to sing her famous 1983 song Total Eclipse of the Heart on its Total Eclipse Cruise during the eclipse. The song has been cut down precisely not to exceed the length of the eclipse. Wow, good job Carnival. I bet the song is busy on iTunes too.

Those of us forced to miss Ms. Tyler’s performance and who are not trekking north on Monday can relish this cosmic coincidence at the Myriad Gardens in Oklahoma City – oklahomacitybotanicalgardens.com.

Also, if you are curious to learn more, there are many other places to explore.

But please don’t miss this extraordinary opportunity to see a total eclipse of the sun cross the continental United States.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Energy industry provides help for public schools

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 14, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Energy industry provides help for public schools

School bells begin to ring across the state this month amid severe budget shortfalls. But there is hope yet, as schoolchildren receive inspiration, edification, and subsidization from the energy industry.

Back in 2011, Gov. Mary Fallin’s Oklahoma First Energy Plan listed a number of challenges faced by schools in the state. Among them: K-12 math and science programs are failing to inspire or prepare students to pursue science, technology, engineering, and mathematical careers; and classrooms are growing, but education resources have been strained to keep up in a tight budget environment. And as you probably know, state-level education funding has even been strained much harder since then.

But thankfully, local support remains strong for education and so too do local resources in many areas of the state, thanks to local investments like Oklahoma’s wind energy industry. Data commissioned by the State Chamber reported, “[i]mportantly, the increased revenue provided to school districts containing wind energy projects benefits not only those districts, but districts across the state as well. The calculation of state aid to local school districts takes into account a number of the district’s revenue sources. If, after those sources are tallied, the district’s projected per-pupil revenue exceeds 150 percent of the projected state average per pupil revenue, the amount of state aid supplied to that district is reduced proportionately. This means more state funds are available for the support of all Oklahoma schools.”

Put another, more direct way, when a wind project is located in a rural part of Oklahoma, that massive investment allows those schools to get an increase in local funding, which in turn reduces their need for state funding, which can then help those districts where wind energy projects aren’t located. A win-win.

In Minco ad valorem tax revenue paid by local wind developers helped provide for a new high school. It also makes up about 10 percent of the school’s budget. Even more recently, Okarche was able to construct a new gym, elementary school and agriculture and technology building, rather than deciding between those projects.

Oklahoma has enormous potential for another infusion of local investment benefiting local schools, in the form of solar energy. Solar panels on schools are becoming increasingly popular and affordable. Across the country school solar projects continue to pop up and offer not only reduced energy bills, but serve as unique teaching tools that inspire the next generation of inventors, scientists, engineers, entrepreneurs, and so on. Additionally, the projects have data collection systems which provide teachers with innovative lesson plans and students with interesting data to analyze.

Other Oklahoma energy industry leaders in the state offer direct support to schools, too.

Oil and gas producers not only pay business personal ad valorem taxes at the local level, industry leaders like Devon, Chesapeake, and OG&E provide cash and educational programs directly to schools.

One interesting project is Devon’s Science Giants grant, which delivers resources to educators who have applied with an idea to help spark students’ interest in science, technology, and engineering. These types of company engagements and generosity are fueling and inspiring Oklahoma’s young minds. And we should be grateful for it.

Oklahoma’s diverse energy landscape can benefit so many. From solar panels on schools, to natural gas-powered school buses, to significant local revenue from wind farms, my hope is that our energy leaders will continue to educate, support, and inspire our youth at the local level, and that our energy horizon continues to broaden for every Oklahoman’s sake.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Overshooting our planet Earth

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 7, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Overshooting our planet Earth

As of Aug. 2, we earthlings consumed more natural resources than Earth can renew throughout the entire calendar year. Eight months and a day into 2017 and we have tipped past the point of sustaining ourselves as a species. This day each year has become known as Earth Overshoot Day and it has been occurring five days sooner each year.

According to the Global Footprint Network, an international research organization, “we use more ecological resources and services than nature can regenerate through overfishing, overharvesting forests, and emitting more carbon dioxide into the atmosphere than forests can sequester.”

And while sounding the alarm, GFN also offers some practical, real-world (pun intended) global ideas for improving our planet’s sustainability, in four main categories: food, cities, population and energy.

All human beings require food to survive and sadly too many are faced with too little, and even here in Oklahoma food scarcity is a serious threat to many people. While it is estimated that food demand makes up 26 percent of the global ecological footprint, two major issues help understand what drives this challenge.

First, food production is rife with inefficiencies and animal calories are significantly more resource-intensive to produce than plant calories, and so countries like China are actively working to reduce meat consumption by 50 percent per person by 2030.

Food waste is also a causative issue, with almost 33 percent of all food produced worldwide being wasted or lost. Here in the United States, an estimated 40 percent of all food goes to waste and there are efforts underway via UN Sustainable Development Goal 12 to halve the per capita global food waste at both the consumer and retail levels by 2030. These objectives would move the Overshoot Day back 11 days if successful.

Energy is certainly something we Oklahomans know a good deal about and we do so because we are that rare donor as a state, meaning we produce more forms of energy than we consume. But our individual footprints are still an area of concern when you consider the broader effect. And even though the current American president has indicated his intention to remove the federal U.S. government from the 2015 Paris Accord on Climate, 99 percent of the rest of the world remains committed.

As it relates to energy, this nearly unanimous consensus centers around decarbonizing the world economy, which is not welcome news if you are in the energy production business and your product contains large amounts of carbon. But if you are in, or moving toward, low- and no-carbon energies, your horizon is looking brighter based upon the UN Sustainable Development Goal 7 for Affordable and Clean Energy and its stated promise. Goal 7 calls for increasing the share of renewable energy in the world’s energy mix by 2030, reduces the carbon component of humanity’s footprint by 50 percent and would move back the Overshoot Day by 89 days, almost three months. This goal alone, as detailed in the Paris Accord on Climate, would make the Earth three months more sustainable in just the next 13 years.

It’s perhaps because of this enormous potential that last month 19 nations of the world’s largest economies recommitted themselves, in a joint statement of the G20, to the accord and the goals within it. For there is always one thing we earthlings share in common and that’s the reality this third planet from the sun is the only place in the universe known to harbor life.

Moreover, if you are curious about your own ecological footprint, that specific date in which you and your habits shot past the Earth’s renew point, you can download your own footprint calculator at www.footprintcalculator.org.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

U.S. Department of Labor Requests Public Input on Overtime Regulations

07/25/17

The U.S. Department of Labor announced today that they will publish a Request for Information for the overtime rule on Wednesday, July 26.

In the news release, USDOL announced:

“The RFI is an opportunity for the public to provide information that will aid the department in formulating a proposal to revise these regulations which define and delimit exemptions from the Fair Labor Standards Act’s minimum wage and overtime requirements for certain employees.

“The RFI solicits feedback on questions related to the salary level test, the duties test, varying cost-of-living across different parts of the U.S., inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests.”

In the RFI, the USDOL said that gathering public input will greatly aid in the development of a Notice of Proposed Rulemaking and help the department to move forward with rulemaking in a timely manner.

“The nature of the questions makes it clear that the current Administration and Secretary of Labor want additional input on these questions, and want to give due consideration to the impact these regulations will have on all employers,” said Byrona Maule, Director and Co-Chair of Phillips Murrah’s Labor & Employment Practice Group. “Replies to these questions are one of the key ways that the Administration can gauge how the regulation will impact companies.”

The public will have a 60-day public comment period from the date the RFI is published in the Federal Register.

  • For a sneak peak at the questions, which will be published in the Federal Register tomorrow, click here.
  • To view instructions on submitting public comments contained in the RFI document, which you can view here.
  • Comments may also be submitted electronically at http://www.regulations.gov.

 

Roth: What the H?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 24, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

What the H?

Those early, and perhaps forgotten, lessons from middle school chemistry class of the periodic table may be coming around again as America and the world explore new fuel sources for our future.

Hydrogen, that chemical element with the symbol H and the atomic number of 1, is the lightest element on the periodic table. It has the lowest density of all gases, which makes it attractive as a fuel source, plus it is the most abundant chemical substance in the entire universe known to man, with NASA estimating its abundance at 75 percent of known particles.

Because of this abundance and this weight advantage for travel, some see hydrogen gas as the clean fuel of the future – generated from water and returning to water when it is oxidized.

Yet hydrogen has been put to good use for centuries, having been first artificially created in early 16th-century industrial application of acids to metals. Today, its uses can be found across industries as it:

  • Is used to make ammonia for fertilizer (the Haber process).
  • Is used to make cyclohexane and methanol, which are intermediates in the production of plastics and pharmaceuticals.
  • Helps remove sulfur from fuels in oil refining.
  • Filler for balloons; and previously for “airships” until the Hindenburg caught fire.
  • Compressed hydrogen is the fuel for hydrogen-powered vehicles.

This last use is growing faster than any other is and many think the positive attributes of H mean it has a very promising future in a carbon-constrained future world. As the simplest element in existence, by weight, it has the highest energy content of any fuel. It is not found on Earth as a gas, because it is lighter than air, so it rises into the atmosphere; thus, it must be manufactured.

The U.S. produces about 9 million tons per year. It is associated with other elements such as water, coal and petroleum. Since it is generated from water and returns to water when it is oxidized, it is a low-polluting fuel. It can be shipped by pipeline, sometimes cheaper than electricity over wires, which again adds to its allure as a fuel.

Hydrogen must be separated from other compounds due to it not being naturally found on Earth existing by itself. There are two ways to accomplish this: electrolysis (water splitting) and steam reforming, with the latter being the less expensive, commonly seen in industries to separate hydrogen from carbon atoms in natural gas, which consists primarily of methane, which unfortunately does emit greenhouse gases.

Electrolysis on the other hand, emits no greenhouse gases, but is still very expensive today. The process splits water into its basic elements through an electric current. Experimental methods include photo-electrolysis and biomass gasification.

The U.S. Department of Energy has some interesting ideas for a future hydrogen energy infrastructure across America. The hydrogen is compressed up to pipeline pressure and then fed into a transmission pipeline. The pipeline transports the hydrogen to a compressed gas terminal where the hydrogen is loaded into compressed gas tube trailers. A truck delivers the tube trailers to a station where the hydrogen is further compressed, stored, and dispensed to fuel cell vehicles for consumers or business.

Fuel cell vehicles, also known as FCV, look like conventional vehicles, but use innovative technologies with fuel cells instead of gasoline tanks or electric vehicle batteries. Similar to a compressed natural gas vehicle’s “vessel,” the heart of the FCV is the fuel cell stack. The stack converts hydrogen gas stored onboard with oxygen from the air into electricity, which powers the vehicle’s electric motor. The fuel cell market is in its infancy but poised for growth as Toyota’s 2015 rollout of the Mirai joins Hyundai’s FCV Tucson as the only commercially available today. They refuel in five minutes and drive approximately 300 miles. Unfortunately, there are very few hydrogen-dispensing pumps, although California is making good headway.

And before you jump to this new, albeit exciting fuel source vehicle, please know that today South Carolina and California are the closest fuel locations to Oklahoma. But the times, they are a changin’ – come H or high water.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Dry heat and the heat index

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 17, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Dry heat and the heat index

Friends have tried to convince me for years that 110-plus degrees in Arizona’s summer is fine because it’s a “dry heat.” I’ve scoffed for years because the only dry heat I feel familiar with is my oven, which is not an inviting idea at all. But now that we Oklahomans are into a scorcher of a summer here, I am beginning to think those dry-heat believers may be onto something because I’m learning the heat index is a real thing. And it can feel miserable.

Bear with me for a bit while I describe the discomfort we feel when we our body can’t cool itself down because the atmosphere’s moisture content works against us. I hope you are reading this inside somewhere in an air-conditioned space.

According to the National Weather Service, the heat index is what the temperature feels like to our bodies when the air temperature is combined with relative humidity. That is the apparent temperature. The index effect can work against the body’s natural methods of sweating or perspiring to cool itself off, as the sweat is unable to evaporate because relative humidity, or atmospheric moisture content, is high. This humid reality, in turn, causes the human body to actually feel warmer than the air temperature alone.

Conversely, there are times when relative humidity can be so low that the apparent temperature actually feels lower than the air temperature. But I’m not sure that has ever occurred in sunny, humid Oklahoma.

And there are serious reasons to monitor the heat index, especially if you spend a lot of time outside during the summer months or you’ve lived long enough to witness a lot of summers. Heat stroke and similar risks can occur to people of all ages:

• Caution: 80-90 degrees: Fatigue possible with prolonged exposure or physical activity.

• Extreme Caution: 90 to 103 degrees: Heat stroke, heat cramps, or heat exhaustion possible with prolonged exposure or physical activity.

• Danger: 103 to 124 degrees: Heat cramps or heat exhaustion likely, and heat stroke possible with prolonged exposure or physical activity.

• Extreme Danger: 125 degrees or higher: Heat stroke highly likely.

Local news outlets certainly cover the expected heat indices each day, but if you are inclined to monitor it yourself, the National Oceanic and Atmospheric Administration has a great monitor and calculator available on its website at www.wpc.ncep.noaa.gov/html/heatindex.shtml.

And while you are there you may also read its scientific determination that the United States has so far this year experienced the second hottest year-to-date on record and a warmer-than-average June.

So please be safe during these grueling hot and humid months in Oklahoma. While we definitely need more rain in most every areas of our great state, it’s hard to pray for rain and dry heat in the same breath.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

In consideration of a living inheritance

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on July 13, 2017.


Robert O’Bannon is a Director and member of the Firm’s Tax, Trusts and Estate Planning, Energy and Natural Resources, and Corporate Law Practice Groups. He represents individuals and both privately held and public companies in a wide range of transactional matters.

By Phillips Murrah Director Robert O. O’Bannon

When parents are in the financial position to give money or assets to their adult children, there are benefits for the donor and the child.

Rather than a parent holding on to wealth until after death, gifting allows them to share it with heirs when they likely need it most. At the same time, this decision can reduce the tax liability on an estate transfer at death.

The beneficiaries of such gifting are generally in their 40s and typically experiencing their most financially challenging decade. They often have children of their own who are in high school or entering college. Other financial obligations typically include a hefty home mortgage, medical costs associated with middle age and the challenges associated with their own inevitable retirement.

For wealthy, retirement-aged people, it is easy to acknowledge that their adult children and vicariously, their grandchildren, will likely benefit more from gifting at this stage of life rather than waiting until the event of death, at which point the adult children are generally more self-sufficient.

For those transferring wealth to the next generation, holding on to a larger estate flies in the face of limiting the tax liability. For example, upon death in 2017, estates worth more than $5,490,000 are taxed at 40 percent (for married couples, $10.98 million).

Gifting, or transferring either money or assets to someone else without receiving something of equal value in return, is available in various forms, including pre-loading college 529 accounts. Additionally, paying for medical, dental and tuition expenses do not count toward gifting limits as long as the provider is paid directly.

An individual may transfer assets to anyone free of gift tax in the amount of $14,000 per year. In this case, a married couple may gift up to $28,000 per individual. For a couple with two married children and four grandchildren, that would total $224,000.

There are numerous exceptions to the general rules of gift and estate taxation, which can be easily explained by your tax and/or estate planning attorney.

Robert O’Bannon is a director at Phillips Murrah and member of the firm’s Tax, Trusts and Estate Planning, Energy and Natural Resources, and Corporate Law Practice Groups.

Roth: When power attacks science

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 10, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

When power attacks science

What do Okemah, Oklahoma, today’s EPA and Galileo have in common? Life lessons about the resilience of science across the history of humankind, even when those in power would attack it for political gain. Allow me to explain.

The Woody Guthrie Folk Festival, in Guthrie’s hometown of Okemah, is set for another music celebration July 12- 16, as it’s always scheduled around his July 14 birthday. Begun in 1998, WoodyFest continues to attract world-renowned folk and rock music performers, including an artist who caught my ear named Ellis Paul. Paul attended that first year and continues to visit each year. His music is a folk-pop style that can be provocative and his lyrics have stayed with me since I first heard them, including his song Did Galileo Pray?

The song tells the story of Galileo Galilei, the famed 17th-century astronomer attacked by religious leaders for his role in the scientific revolution of the day, including telescopic confirmation of the phases of Venus, the moons of Jupiter and sunspots. He was tried in the Roman Inquisition in 1615 and found “vehemently suspect of heresy” for contradicting scriptures, and he was forced to spend the rest of his life under house arrest.

Singer Ellis Paul’s lyrics ask:

When he looked into a starry sky upon Jupiter, with its cold moons making their weary rounds.

Did he know that the Pope would claim that he ran with Lucifer and a prison cell could be where he’d lay his head down?

Was he wearing a thorny crown? When he plotted the motion of planets, was Mercury in retrograde?

But he found the truth when a lie was what was demanded. When the judges asked him pointedly he was a’ trembling that day.

Chorus:

Did Galileo pray?

And the song wraps with:

Don’t shoot the messenger, when the postman brings you truth today.

I think of this song often for its ironical question of a scientist accused of heresy because his scientifically proven research refuted the positions of those in power at the time. Lately, I’ve thought of this song daily as I read headlines about the current Trump Environmental Protection Agency purging scientists and going after those whose careers have focused on climate science and its proven research.

The EPA is apparently now being stacked with climate-change skeptics and just this month EPA Administrator Scott Pruitt announced, to a lobbying group of coal industry executives no less, that he was convening a “red team-blue team” exercise to challenge mainstream climate science and the enormous consensus that exists across the globe.

So the agency charged with protecting our country’s environment and public health is now pushing its own inquisition and bragging about it to the most polluting industry known to man.

And sadly while efforts to undermine scientific consensus, or at least to delay the response to the dangers of a changing climate, for some rehashed debate about whose fault it is, science just marches on. Proven scientific theories contain facts, which are observations that have been repeatedly confirmed and are, for all practical purposes, accepted as true. And simply put, science doesn’t care if you believe it or not.

But to deny it only risks the lives of those people who politicians have sworn an oath to protect. Guthrie’s famed guitar, which strummed his populist, pro-people messages, had an inscription that read: “This machine kills fascists.” Today it might state that science outlives them too.

So please always remember, this Land is your Land, this Land is my Land … and This Land was made for you and me. We should all protect it as the only land we have, no matter how those in power choose to attack it for political gain.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: A gathering green trend for Oklahoma

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 3, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

A gathering green trend for Oklahoma

For decades Oklahoma’s largest cities have focused more on infrastructure issues like roads, bridges and jails, at the expense of parks, sidewalks and trails. Nevertheless, the latter investments are becoming new again and Oklahoma’s urban dwellers and visitors will soon see and feel the effects of quality-of-life improvements for healthier outdoor living.

In Tulsa, the generous George Kaiser Family Foundation is leading the effort to revitalize and reshape the River Parks areas along the Arkansas River by connecting three adjacent parcels into the existing park system for a world-class experience. A Gathering Place for Tulsa will transform nearly 100 acres of Tulsa’s waterfront into a blend of activities, nature, gathering and community in the great outdoors and within several anchor destinations like a lodge, a museum, an adventure playground, a mist mountain, gardens, sport courts and a large lawn for concerts and relaxation. Truly something for everyone to enjoy, thanks to the generosity of corporate and philanthropic Tulsans.

Phase one’s 66 acres is expected to open in late 2017 and with an estimated 1 million visitors a year will prove the importance of these types of investments to the social, cultural, economic and environmental vibrancy of a community.

On Thursday, Mayor Mick Cornett and Oklahoma City leaders broke ground on Scissortail Park, the newly named 68-acre park expected to revitalize a once-blighted residential and commercial area south of the downtown’s business core. The 37-acre upper park is underway to be opened in early 2019, including a lake, boathouse, great lawn, stage, gardens and playgrounds. The lower park, just south of Skydance Bridge and sculpture along Interstate 40, will come later and includes some environmental improvements and a transformation inviting outdoor activity and healthy, daily living for citizens and visitors. This MAPS 3-funded park will be joined by a new convention center, high-rise hotel and a mix of retail, residential and commercial uses, and will remake the feel and function of downtown Oklahoma City for generations to come.

Roadways will always be important investments and so too is the health and happiness of those citizens who would commute upon them. Soon these green living investments will pivot Oklahoma’s two largest cities toward a tomorrow where more people can actually get out of their cars near the urban core, walk from their offices, relax a little and breathe some clean outdoor air on a daily basis. This is a trend I hope continues for all Oklahomans.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

The Wrong Claim – Defining boundaries to Burk tort actions

Complaints of wrongful termination by employees have been heard in courtrooms across the nation for as long as there has been a legal venue in which to bring and defend such claims. It can be argued that the nature of the employer-employee relationship has been evolving ever since.

In Oklahoma, the employer-employee relationship is characterized by the employment-at-will doctrine. This means that either the employer or employee may end the employment relationship at any time for any reason, barring some exceptions. Exceptions for the employer include retaliatory termination, basing the decision to terminate on the employee’s race, gender, religion, national origin and other prior-identified protected classes, and whether the employee is hired under the conditions of a specific contractual agreement that lays out conditions for termination.

In the above exceptions, there are adequate remedies available through various employment and anti-discrimination laws. However, over time, there has been an evolution of claims that exist outside of this framework, where there existed no adequate legal remedies.

In 1989, the Oklahoma Supreme Court began chipping away at the employment-at-will doctrine in a landmark case known as Burk v. Kmart Corp. The Court recognized a new actionable tort claim that established an exception to the at-will termination rule in a narrow class of cases, which was subsequently referred to as a Burk tort.

“An at-will employee may have an actionable tort claim if his discharge is ‘contrary to a clear mandate of public policy as articulated by constitutional, statutory or decisional law,’” the Court held.

Burk or not Burk?

Outside of law firm offices, legislative chambers and courtrooms, the term “Burk tort” is not very remarkable. Yet, for decades, the questions of which entities can be sued for which alleged employment violations, and which legal remedies are appropriate for the matters at hand, have been and continue to be vigorously argued.

In a recent case brought before the U.S. District Court for the Western District of Oklahoma, Phillips Murrah Director Byrona J. Maule, arguing for the Defense, was granted dismissal of a wrongful termination claim brought under the Burk tort framework. This particular, seemingly obscure motion to dismiss is important because, had it not been successful, the claim could have altered current Oklahoma employment law by expanding the Burk tort into a new area.

In this recent case, the Plaintiff asserted that the Oklahoma Occupational Safety & Health Standards Act (OOSHSA) established a clear mandate of public policy that was allegedly violated by his employer, a privately owned company in Oklahoma City. However, as pointed out by Maule, in 1984, the Oklahoma legislature specifically removed private employers from the purview of OOSHSA, effectively limiting its public policy statement to only apply to public employers. Therefore, because the OOSHSA Act does not articulate a public policy with regard to a private employer, it could not support a Burk tort claim. The Court further found the federal OSHA statutes did not establish an Oklahoma public policy, and therefore did not articulate a public policy on which a Burk tort claim could be founded.

The Order handed down by the U.S. District Court for the Western District of Oklahoma quoted Griffin v. Mullinix, 1997 OK 120:

“See Griffin, at 179 (“[I]n 1984, the state legislature fundamentally changed the existing Occupational Safety & Health Standards Act, removing private employers from the definition under the Act … [T]he legislature’s decision to limit application of the Act to public employers limited the entire Occupational Safety & Health Standards Act, including the public policy statement. Therefore, [w]e find that an Act, which at one time applied broadly to all employers and now applies to public employers only, is not an adequate basis upon which to premise the private tort action of a private employee.”).

The Defendant’s Motion to Dismiss was granted, and a subsequent Plaintiff’s Motion to Amend Complaint was denied, based on the Plaintiff’s failure to state a claim against the Defendant upon which relief can be granted. Since the Defendant is a privately-owned company, OOSHA did not articulate a public policy that supported a Burk tort claim.

Department of Labor files overtime exemption brief with Fifth Circuit

In a brief filed with the Fifth Circuit of the Federal Court of Appeals, USDOL seeks to preserve salary level in determining overtime exemption status.

 

On Friday, June 30, the United States Department of Labor filed a brief with the Fifth U.S. Circuit Court of Appeals in New Orleans seeking to preserve a minimum salary requirement as a part of a three-part test to determine which workers are exempt from Fair Labor Standards Act (FLSA) minimum wage and overtime pay protections.

The three-part test, referred to as EAP, (executive, administrative, professional) relates to whether a worker is:

  1. Paid on a salary basis
  2. Earns a specified salary level
  3. Satisfies a duties test

The brief filed Friday concerns the second part.

The brief was filed in the case of Nevada v. DOL , 5th Cir., No. 16-41606 by the State of Oklahoma and 20 other states questioning whether the DOL under President Obama had the authority to set the annual salary threshold at $47,476, just over double the amount previously set in 2004 by the Bush Administration.

The Trump Administration brief asks the court to uphold DOL’s legal authority to set the salary threshold, but does not address the appropriate salary level, stating that the court should “simply lift the cloud” created by litigation questioning the Department’s authority to establish any salary level test.

“Instead, the department soon will publish a request for information seeking public input on several questions that will aid in the development of a proposal,” the agency stated it its brief.

To view the brief, click this link.

 


Sign up for our Employment E-Alert mailing list

* indicates required






USDOL Reinstates Wage & Hour Opinion Letters

The U.S. Department of Labor announced today that they will reinstate the issuance of opinion letters, which had been replaced in 2010 by issuance of USDOL general guidance. This action allows the USDOL’s Wage and Hour Division to use opinion letters as one of its methods for providing guidance to covered employers and employees.

Opinion letters are official opinions written by the Wage and Hour Division (WHD) of how to apply rules related to the Fair Labor Standards Act and other statutes in specific circumstances presented by an employer, employee or other entity seeking clarity. Opinion letters had been the general practice for seeking clarity since the Fair Labor Standards Act’s inception in 1938.

“By using the opinion letters, laws can be interpreted differently without the need of going through the administrative process,” explains Byrona J. Maule, Phillips Murrah Director and Co-Chair of the Firm’s Labor and Employment Practice Group.

This comes on the heels of the action taken by USDOL earlier this month, which withdrew two Obama-era guidance letters that sought to clarify worker classifications regarding independent contractors and joint employment.

U.S. Secretary of Labor Alexander Acosta in today’s release:

“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes. The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

USDOL also announced a website portal whereby those seeking clarity can search for existing guidance or submit a request for an opinion letter. Today’s release explained: “The webpage explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.”

Employers should be vigilant in reviewing the opinion letters issued by the USDOL for trends and reversals of prior legal positions.

Visit this link to view currently published opinion letters: Wage and Hour Division (WHD) Opinion Letters – Fair Labor Standards Act

 


Subscribe to our mailing list

* indicates required






Roth: Yellowstone grizzlies scratched from endangered list

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 26, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Yellowstone grizzlies scratched from endangered list

How many Yellowstone grizzly bears is enough? Well, it might appear that 700 is the number, based upon the Interior Department’s announcement this past week to remove the animal from the endangered species protection. Seven hundred is today’s estimated population, having rebounded from fewer than 150 at its low point. For 42 years, the Endangered Species Act has provided protection for these animals to repopulate the remote areas in and around Yellowstone Park, mostly concentrated in parts of Montana, Idaho, Washington and Wyoming. Once having ranged from Alaska to Mexico and as far east as the Hudson Bay, the grizzly bear has a much smaller range today and that is especially true for the Yellowstone grizzly.

The Endangered Species Act of 1973, signed by President Nixon, is an environmental law passed to protect imperiled species from extinction and the ecosystems upon which those species depend. The act was America’s effort to carry out the Convention on International Trade in Endangered Species of Wild Fauna and Flora. With its primary goal to prevent the extinction of imperiled plants and animals, the act’s second goal is to recover and maintain those populations by removing or lessening threats to their survival.

This act does allow for “delisting” or “downlisting” a species, based upon several factors. To delist, the threats must have been eliminated or controlled, population size and growth of the species are considered and the stability of the habitat is determined. To downlist, similar analysis occurs and concludes that some of the threats have been controlled and the population has met recovery objectives, allowing the species protection level to go from “endangered” to “threatened.”

The Endangered Species Act, written by scientists and lawyers working together, has been affirmed by courts over the course of its existence. This solid legal standing has allowed the law to be effective and successful in its missions, although many believe it could be stronger.

Species with increased population size since being placed on the endangered list include: American bald eagle (increased from 417 in 1963 to over 11,000 pairs in 2007 when it was delisted); whooping crane (increased from 54 to over 450 from 1967 to 2005); gray wolf (population increases confirmed although accurate numbers are hard to estimate); and red wolf (increased from 17 in 1980 to over 250 in the last decade).

Nonetheless, the act of “delisting” a species is controversial and is rare. Over the history of the act, while most delisting has occurred because of recovery of the species, about 20 percent of the delisting has occurred because of actual extinction.

And as it relates to today’s Yellowstone grizzly bears, their fate may now fall to the wildlife management practices of the respective states they call home. However, the federal authorities will still get to monitor the state management practices for five years and if the population falls below 600 in that time, special actions will trigger to reduce hunting and restrict other activities attributable to the bears’ deaths.

It is my hope that if you are lucky enough to be in the backcountry around Yellowstone and encounter a Yellowstone grizzly bear, that the only thing you will shoot is your camera. Whether “listed” or not, some American treasures deserve to remain living trophies for all generations to enjoy.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Global decline of coal

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 19, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Global decline of coal

The global consumption numbers are in for 2016 and coal production and consumption hit a 35-year low in the United States and had an even deeper slide around the world.

After peaking in the U.S. in 2007, consumption of this traditional fossil fuel has slid by nearly one-third since. And the decline seems to be picking up speed. The first quarter of 2016 saw the lowest quarterly production since 1981, with the steepest quarter-over-quarter drop in nearly 30 years.

Many of America’s utilities have been moving away from coal in power generation. In 2008, about one-half of our electricity was coal-powered. Today’s its about 30 percent due in large part to cheaper, abundant, clean natural gas and the greater deployment of cheap and clean renewable energy sources.

The U.S. Department of Energy recently estimated an annual coal export decline of 12 percent in 2017, as the decline now appears global as well. Worldwide consumption dropped for the second consecutive year, by 1.6 percent last year, to its 2004 levels, as electricity remained flat and coal continued to be displaced by cleaner fuels. Even China, the largest coal consumer in the world, finished 2016 with a drop in its coal use for the third year in row. And since China has the distinction of being the world’s largest polluter today, compared with our country as the largest polluter over history, China is aggressively moving away from coal to other technologies like wind and solar.

And America is helping to lead that trend too. Just this past week Bloomberg’s New Energy Finance Outlook estimated that solar technologies will rival the cost of new coal plants in America and Germany by 2021. It also estimated that solar will soon be cost-competitive in quick-growing markets like India and China. This scenario is called “China’s tipping point” and suggests that once that happens, coal’s days will only further dwindle. And the reality is that once China has forever lessened its coal appetite, the demand curve for coal will likely never recover here or abroad.

Let’s hope we too have migrated toward cleaner energy options that are abundant in Oklahoma and America like natural gas, wind and soon solar.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: What happens in Vegas…

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 12, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

What happens in Vegas…

It’s been said that “What happens in Vegas, stays in Vegas,” yet Las Vegas and Nevada are making news that is worth talking about for Oklahoma and elsewhere.

In this new era of state-led environmental leadership, one state is getting its renewable energy policies back on track – Nevada. Already a longtime environmental leader, Nevada was in the top 20 when Forbes published its list of the greenest states back in 2007. In 2016, the Mandalay Bay Convention Center in Las Vegas became the largest rooftop solar installation in the U.S.

This session, Nevada lawmakers voted-in several solar-friendly measures: one that will bring back net-metering at 95 percent of retail rate (net-metering is a mechanism whereby distributed generation customers are paid for the excess power their systems place back on to the grid), and another bill that directs the state’s public utility to plan for expansion of electric vehicles and infrastructure, begin accounting for the costs of carbon emissions, and to look into energy storage opportunities.

Nevada made big green news last year when MGM Resorts International and Wynn Resorts, two of the largest customers of the state’s public utility – the Berkshire Hathaway-owned NV Energy – were permitted to pay exit fees of more than $127 million to cease obtaining power from the public utility in order to pursue sourcing power on their own from renewable energies. This opportunity to source power from a third party was the result of a 2001 law that promoted new power generation in the state at that time.

News of the approved exit fees was even more noteworthy since one of the first applications for autonomy from the public utility came from Nevada technology company Switch, but was denied. That company eventually forged a deal whereby NV Energy would provide the 100 percent renewable energy Switch sought to attain.

It is exciting to see successful free-market environmentalism. The bold moves of these giant companies are illustrative of what I discussed last week, which is to say states and businesses, and not the federal government, have the power, influence, and desire to design and construct our energy and environmental landscape. And that is important as much of “corporate America” is moving toward self-styled energy options to control their operating costs and improve their brand’s environmental reputation.

Providing some semblance of hope for Oklahoma after a legislative session that was not kind to our state’s renewable energy blessings is that Nevada’s bright future comes after a recent dark past. In late 2015, despite a recent report that indicated solar consumers give more to the grid than they cost, the Nevada Public Utility Commission voted unanimously to remove the state’s net metering policy, leaving customers who had invested in solar infrastructure no longer being paid for energy they placed onto the grid.

Oklahoma is familiar with the proverbial pulling-the-rug-out laws. The distributed generation surcharge bill – Senate Bill 1456 – was passed in 2014 and created a lot of market uncertainty for Oklahomans and the rooftop solar industry. Since its passage, Oklahoma’s regulated utilities have been unsuccessful in their efforts to add a new surcharge as the Oklahoma Corporation Commission has rightly analyzed the evidence and determined that rooftop solar is in fact not being subsidized by non-rooftop customers. In fact, the evidence revealed the opposite. Now it’s time for the Oklahoma Legislature to follow the lead of states like Nevada and allow Oklahomans the legal right to earn the true value of the energy they create for the greater grid and the greater good.

Good news for Nevadans: Tesla and solar installer Sunrun indicate these new policies will allow them to resume operations in the state after having recently departed due to industry-threatening policies. Also, you might be interested to know that the iconic Welcome to Fabulous Las Vegas Nevada sign is itself actually powered by solar energy. Now that is welcome news.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

USDOL withdraws 2015 and 2016 informal guidance on joint employment and independent contractors

On Wednesday, June 7, 2017, the U.S. Department of Labor’s Office of Public Affairs announced the withdrawal of recent guidance regarding joint employment and independent contractors.

OPA News Release:
June 7, 2017 [link] WASHINGTON – U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

The Administrator Interpretation Letters – Fair Labor Standards Act, which have been withdrawn are:

  • FLSA 2015-1: “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors”
  • FLSA 2016-1: “Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act”

What does this mean for employers?

For employers, this means:

  • Joint employment and independent contractor status are no longer reviewed by the DOL under these previous Administrator’s Interpretations
  • Employees no longer have FLSA 2015-1 and FLSA 2016-1 to cite before the courts.

However, the Administrator’s Interpretations relied upon case law, statutes and regulations that are still good law.  Further, how the courts define joint employment and identify misclassified independent contractors has not changed because the common law, statutes and regulations are still in effect.

The definition of joint employment may depend on the state and federal Circuit Court where the employer is located. Independent contractor status is also defined by the FLSA, common law, statutes, and regulations as well as state law. Some states may have a different standard for independent contractors and joint employment.

Employers should consult with their attorney regarding questions about classifying independent contractors, joint employment and state laws that may vary. Although the removal of the DOL Administrator’s Interpretations is not a change in the law, it may indicate a change in DOL enforcement in these two areas. Stayed tuned for more information or changes from the DOL.

U.S. House of Representatives passes Working Families Flexibility Act of 2017

Last month, the United States House of Representatives passed H.R. 1180, which states that private sector employees shall be given the option of receiving paid time off, known as compensatory time, in lieu of monetary compensation known as overtime pay. The Act, known as the “Working Families Flexibility Act of 2017,” amends the Fair Labor Standards Act of 1938, which established overtime pay, among other employee rights.

The comp time option allows for one and a half hours off for every hour worked beyond 40 hours in a week. In order to be eligible for the compensatory option, an employee must have been employed by the employer for at least one consecutive year, during which time the employee must have worked at least 1,000 hours.

Other stipulations in H.R. 1180 include:

  • Regarding labor unions or other forms of organized labor, compensatory time is provided to members only in accordance with collective bargaining agreements.
  • Employers may not make the compensatory time option a condition for employment.
  • Maximum accrual of compensatory time is limited to 160 hours.
  • Compensatory time that is not used by the employee by the end of the calendar year, or an alternative 12-month period, must be paid in overtime by the employer within 31 days of the end of such 12-month period.
  • If an employee acquires in excess of 80 hours of compensatory time, the employer may provide monetary compensation at any time after giving the employee at least a 30-day notice.
  • Employers who opt to provide compensatory time may discontinue the option after giving employees a 30-day notice.
  • An employee may give notice of withdrawal from any compensatory time agreement at any time, and the employer must provide monetary compensation for unused time within 30 days of receiving notice.
  • An employer providing compensatory time is prohibited from actions that “directly or indirectly intimidate, threaten or coerce any employee” in any attempt to interfere with an employee’s rights to choose or use compensatory time.
  • The employee may use accrued compensatory time within a reasonable amount of time after a request is made as long as it does not unduly disrupt the operations of the employer.
  • Upon termination, any unused compensatory time accrued by the employee will be considered unpaid overtime compensation.

H.R. 1180 passed the House vote, 229-197. It now must also pass a Senate vote, which may prove to be an uphill battle, as similar bills have historically died in the Senate.

Should the H.R. 1180 pass the Senate, an Employer should immediately revise its leave and overtime policies to implement the option of comp time in lieu of overtime compensation, with special attention given to how the employee will notify the Employer of the employee’s desire to receive the comp time in lieu of overtime compensation, when and how the comp time will be taken, and what would “unduly disrupt the operations” of the Employer’s specific company.

Click here to view details of the Working Families Flexibility Act of 2017 on the U.S. House of Representatives website.