Limitations of the Texas Citizens Participation Act

Originally published in Texas Lawyer on Jan. 05, 2021.

Logo Texas LawyerThe Texas Citizens Participation Act (TCPA), commonly referred to as the Texas Anti-SLAPP statute, provides litigants a valuable tool: an early opportunity to move to dismiss a lawsuit that infringes on their First Amendment rights, and if successful, an award of attorney fees.

By Laurel L. Baker |

 The Texas Citizens Participation Act (TCPA), commonly referred to as the Texas Anti-SLAPP statute, serves as a constitutional safeguard protecting the “rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect[s] the rights of a person to file meritorious lawsuits for demonstrable injury.” In other words, the statute provides litigants a valuable tool: an early opportunity to move to dismiss a lawsuit that infringes on their First Amendment rights, and, if successful, an award of attorney fees.

Although the Texas Supreme Court has previously described the TCPA as “casting a wide net,” recent changes to the statute’s language, in effect since Sept. 1, 2019, have significantly narrowed its application:

  • Prior to the amendments, a litigant could file a motion to dismiss under the TCPA if the “legal action is based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association.” The amended statute omits the “relates to” language.
  • The amendments limit “right of association” to matters “relating to a governmental proceeding or a matter of public concern.”
  • The amended statute defines a “matter of public concern” as a statement or activity regarding a public official, public figure, or other person who has drawn substantial public attention due to the person’s official acts, fame, notoriety or celebrity; a matter of political, social or other interest to the community, or; a subject of concern to the public.

Although not an exhaustive list of the amendments to the TCPA, these changes are likely to be the most litigated, as evidenced by the Dallas Court of Appeals recent decision in Vaughn-Riley v. Patterson.

In Patterson, the Dallas Court of Appeals was asked to interpret the changes to the TCPA and determine whether the statute applies to claims related to alleged defamatory statements made by an actor, Terri Vaughn. Vaughn argued that her statements fell within the purview of the TCPA because they “concerned the quality and timeliness of the public performance of a theatrical work authored and produced by a limited purpose public figure and marketed to the public in Texas, Louisiana, and Oklahoma.” The appeals court, ultimately unpersuaded by Vaughn’s argument, focused on the amended definition of a “matter of public concern” and held that the statements were “not based on or in response to” Vaughn’s exercise of the right to free speech or right of association.  In the court’s view, “Vaughn’s actions and communications regarding one isolated performance that did not go on as scheduled is simply not a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public.”

In light of the 2019 amendments to the TCPA and the resulting opinion in Patterson, the intent of the legislature and Texas courts could not ring louder—to rein in the circumstances to which the TCPA would apply. While the statute previously served as a frequently used sword in litigation, we will likely see courts less likely to apply it to cases in which the statute’s application to the facts is not “black and white.”


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Laurel L. Baker is a litigation attorney at the law firm of Phillips Murrah. Her primary practice focus is on commercial and business litigation matters representing both plaintiffs and defendants disputes involving banking, corporate governance, contracts, mergers and acquisitions, employment, and other business issues. Baker received her J.D. from the SMU Dedman School of Law and was a Dean’s Scholarship Recipient. She is also a member of the Junior League of Dallas, through which she volunteers in the community.


Reprinted with permission from the January 5, 2021 edition of the Texas Lawyer © 2021 ALM Media Properties, LLC. All rights reserved.

Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 – reprints@alm.com.

Employee or independent contractor? DOL finalizes new rule

By Michele C. Spillman

The United States Department of Labor announced a new final rule on January 6, 2021 regarding classification of workers as independent contractors under the federal Fair Labor Standards Act (FLSA).  “Streamlining and clarifying the test to identify independent contractors will reduce worker misclassification, reduce litigation, increase efficiency, and increase job satisfaction and flexibility,” said DOL Wage and Hour Division Administrator Cheryl Stanton.  The rule takes effect on March 8, 2021, absent action by the new administration (more on that below).

The FLSA entitles employees, but not independent contractors (aka “freelancers,” “gig workers,” and “consultants”), to certain protections, such a minimum wage and overtime requirements. Classification of workers has long been a confusing issue for employers because neither the FLSA nor its regulations define “employee” or “independent contractor.”

contract gig workerDOL has historically used the “economic reality” test to determine whether a worker is an employee or independent contractor. Under the economic reality test, “[I]n the application of the FLSA an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves.” Department of Labor. (2008).  Employment Relationship Under the Fair Labor Standards Act [Fact Sheet 13].

In applying the economic reality test, DOL relied on six factors developed by the U.S. Supreme Court. But these factors often proved difficult to apply and led to conflicting results across various employers and industries, making worker classification a moving target and a hotly debated issue.

The new rule reaffirms the “economic reality” test, but identifies and explains two “core factors” that are most probative to the question of whether a worker is in business for herself (an independent contractor) or someone else (an employee): (1) the worker’s nature and degree of control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment.

DOL identified three other factors that “may serve as additional guideposts in the analysis, particularly when the two core factors do not point to the same classification”: (1) the amount of skill required for the work; (2) the degree of permanence of the working relationship between the worker and the potential employer; and (3) whether the work is part of an integrated unit of production.

Despite this clarification, worker classification remains a very fact-specific inquiry. As DOL cautions, “the actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible.”

Whether the final rule will become effective as planned remains a question. President-Elect Biden has pledged to combat worker misclassification, and many predict he will freeze the rule when he takes office on January 20, 2021.

We will continue to post updates on new guidance from DOL and other federal agencies on our website.  For more information, consult with a Phillips Murrah labor and employment attorney.


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With a background in both commercial litigation and labor and employment law, Michele offers clients comprehensive solutions to meet their business goals.

For more information on how this DOL guidance may impact your business, please call 214.615.6365 or email Michele C. Spillman. Click HERE to visit her profile page.

For ongoing coverage of information related to COVID-19, please visit our COVID-19 Resource Center.  

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Sign of the Times: Department of Labor publishes guidance on electronic postings and telemedicine visits in light of pandemic changes

By Janet A. Hendrick

Janet Hendrick

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

Recognizing ongoing changes the COVID-19 pandemic has brought to the way we work and receive medical treatment, the Wage and Hour Division of the United States Department of Labor issued employer guidance on December 29, 2020 on two issues:  electronic posting of required employment law notices and when a televisit with a health care provider counts as an in-person visit under the Family and Medical Leave Act. DOL’s guidance comes in the form of Field Assistance Bulletins, which provide guidance to the Wage and Hour Division field staff.

Field Assistance Bulletin No. 2020-7:  Electronic Statutory Postings

DOL published this guidance in response to “questions from employers regarding the use of email or postings on an internet or intranet website, including shared network drive or file system, to provide employees with required notices of their statutory rights.”  The bulletin provides guidance as to when these forms of electronic notice satisfy the notice requirements of the Fair Labor Standards Act, the Family and Medical Leave Act, the Employee Polygraph Protection Act, and the Service Contract Act.  DOL’s general view is that electronic postings should supplement, but not replace, physical postings in most cases.

Electronic communications graphicFirst, if a statute requires the posting of a notice “at all times,” DOL will only consider electronic posting an acceptable substitute where (1) all employees work exclusively remotely, (2) all employees ordinarily receive information from the employer electronically, and (3) all employees have access to the electronic posting at all times.  For employers that have both remote and on-site employees, the employer may supplement physical postings with electronic postings and in fact the DOL “would encourage both methods of posting.”

Second, if a statute, such as the Service Contract Act, permits employers to meet notice requirements by delivery of individual notices to each employee, an employer satisfies this requirement by emailing notices, but only if the employee customarily receives information from the employer electronically.  Otherwise, the employer must send a physical notice to satisfy the notice requirement.

Third, any electronic notice must be as effective as a physical, hard-copy posting to meet statutory requirements.  This means employees must be able to readily see a copy of the posting, which DOL says will “depend on the facts.”  At a minimum, DOL requires that the employees are capable of accessing the posting without having to request permission to view a file or access a computer.  DOL will not consider an employer to have complied with a posting requirement if:

  • The employer does not customarily post employee notices electronically;
  • The employer has not taken steps to inform employees where and how to access the notice electronically;
  • The employer posts the notice on an unknown or little-known electronic location, which DOL equates to “hiding the notice, similar to posting a hard-copy notice in an inconspicuous place, such as a custodial closet or little-visited basement”; or
  • The employees cannot easily determine which electronic posting applies to them and their worksite.

Following the general guidance, the bulletin provides further guidance specific to each relevant statute, with examples of when DOL will consider electronic postings compliant with the relevant statutory requirement.

Field Assistance Bulletin No. 2020-8:  Telemedicine and Serious Health Conditions under the FMLA

DOL’s Wage and Hour Division issued a frequently asked question (FAQ #12) in response to the COVID-19 pandemic that states “Until December 31, 2020, the WHD will consider telemedicine visits to be in-person visits . . ., for purposes of establishing a serious health condition under the FMLA.  To be considered an in-person visit, the telemedicine visit must include an examination, evaluation, or treatment by a health care provider; be performed by video conference; and be permitted and accepted by state licensing authorities.”  Bulletin 2020-8 provides guidance to DOL staff regarding telemedicine visits past December 31, 2020.

As a reminder, under the FMLA, eligible employees may take leave for their own or a family member’s “serious health condition.” A “serious health condition” requires either inpatient (overnight) care or “continuing treatment,” which in turn includes “examinations to determine if a serious health condition exists and evaluations of the condition.”  FMLA regulations provide that “treatment by a health care provider means an in-person visit to a health care provider,” and does not include a phone call, letter, email, or text message.”

Noting the rapid acceleration of telemedicine during the COVID-19 pandemic, and the Wage and Hour Division’s “experience . . . that health care providers are now often using telemedicine to deliver examinations, evaluations, and other healthcare services that would previously have been provided only in an office setting,” the bulletin states that “WHD will consider a telemedicine visit with a health care provider as an in-person visit,” provided certain criteria are met.

To be considered an in-person visit, the visit must include:

  • An examination, evaluation, or treatment by a health care provider;
  • Be permitted and accepted by state licensing authorities; and
  • Generally, be performed by video conference.

Phone calls, letters, emails, or text messages remain insufficient, alone, to satisfy the in-person visit requirement.

We will continue to post updates on new guidance from DOL and other federal agencies on our website.


For more information on how this DOL guidance may impact your business, please call 214.615.6391 or email Janet A. Hendrick.

For ongoing coverage of information related to COVID-19, please visit our COVID-19 Resource Center.  

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SCOTUS declines to hear same-sex parent case

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By Janet A. Hendrick and Mark E. Hornbeek

On December 14, 2020, the United States Supreme Court declined to review the Seventh Circuit Court of Appeals’ decision requiring the State of Indiana to list two females on the birth certificate of a child of a lesbian couple who was conceived by in-vitro fertilization. Ashlee and Ruby Henderson brought suit against the Indiana State Health Commissioner claiming that the State’s practice of listing only the birth mother and her husband, if any, violated their rights to equal protection under the United States Constitution. Indiana argued that forcing it to identify both women as parents would prevent the State from treating the sperm donor as a parent, while providing parental rights to an individual who provided neither the sperm nor the egg.

Same sex parents graphicThe trial court ruled in favor of the couple and ordered Indiana to treat same-sex couples the same as opposite-sex couples with regard to parentage on birth certificates. Indiana appealed, and the appeals court upheld the trial court’s decision. Indiana then filed a petition of certiorari asking the Supreme Court to hear the case.

Court-watchers have monitored this case, waiting to see if the Supreme Court’s 6-3 conservative majority, given the addition of new Justice Amy Coney Barrett, would take this opportunity to roll back rights of same-sex couples as established by the Court’s 2015 decision in Obergefell v. Hodges, legalizing same-sex marriage, and confirmed by the Court’s 2017 decision in Pavan v. Smith, which requires the government to provide the same rights to all couples with respect to parentage on birth certificates, regardless of the parents’ genders.

Many observers have been particularly interested whether Justice Coney Barrett, who has been critical of same-sex marriage, will seek to disturb Obergefell and Pavan and whether this case would present the opportunity for her to do so.

Once a party has appealed a lower court’s decision to the Supreme Court, it requires the vote of four justices before the Court will grant certiorari agreeing to hear the case. While we know that the Court denied certiorari, neither the margin of the vote, nor the vote cast by any individual justice, is publicly revealed, so we cannot know how any particular justice, including Justice Coney Barrett, voted. At least six justices, including at least three of the justices typically considered to be conservative, voted against hearing Indiana’s appeal.

The Court’s refusal to take this case may be a signal that the current Supreme Court is not interested in reversing or narrowing the rights established by its recent opinions. The value of the Court’s denial of certiorari in Box, however, is somewhat limited, as the denial does not necessarily indicate that the majority of justices agree with the lower court’s ruling. Rather, refusal to take the case means that fewer than four justices felt this particular case was worth review.  Because the Court refused to hear the case, it will not issue an opinion either confirming or upsetting the rights of same-sex couples or set any new precedent that would bind future courts.

As a result, the Seventh Circuit’s Box decision will continue to guide courts, at least within that court’s jurisdiction, which includes Wisconsin, Illinois, and Indiana. While other appellate courts will undoubtedly consider the Seventh Circuit’s opinion when faced with similar cases, it is possible that another court may reach a conflicting conclusion.  While the Supreme Court’s decision not to consider Box may signal some stability of same-sex rights, the door remains open for future challenges.


Janet Hendrick

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

For more information on this article, please call 214.615.6391 or email Janet A. Hendrick.

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Employers should prepare for COVID-19 vaccine in the workplace

By Phoebe B. Mitchell

On December 11, 2020, the United States Food and Drug Administration (FDA) issued its first emergency use authorization (EUA) for the COVID-19 vaccine, which allows Pfizer-BioNTech, the manufacturer of the vaccine, to distribute the vaccine throughout the United States. This encouraging step for the United States in its fight against COVID-19 also raises several important questions for employers as the vaccine becomes more broadly available.

Covid vaccine imageWhile we wait for both full FDA approval and the United States Equal Employment Opportunity Commission’s (EEOC) anticipated employer guidance on the vaccine, we recommend that employers prepare now to address the legal issues that arise when the vaccine is accessible to the American workforce.

May Employers Mandate the COVID-19 Vaccine as a Condition of Employment?

Even though the EEOC has not yet issued formal guidance, the EEOC has stated that an employee who has COVID-19 or symptoms of COVID-19 poses a “direct threat” to the health and safety of the workplace. This means that a person with COVID-19 or symptoms of COVID-19 poses a significant risk of substantial harm to himself or others. The EEOC continues to use this standard to allow employers to exclude employees who have contracted COVID-19 or who are showing symptoms of COVID-19 from the workplace.

Until the FDA fully approves the COVID-19 vaccine, and the EEOC issues formal guidance regarding the vaccine in the workplace, employers should strongly encourage, rather than require, their employees to take the COVID-19 vaccine. After full FDA approval and guidance from the EEOC, we expect employers will be able to mandate that their employees take the COVID-19 vaccine as a condition of employment, subject to possible exceptions under the Americans with Disabilities Act and Title VII. In fact, mandatory flu vaccines are already common in the health care field, and many health care employers require their employees to take the flu shot each year or forfeit employment.

What Happens When An Employee Refuses the COVID-19 Vaccine?

If an employer requires the COVID-19 vaccine for all its employees, there are situations in which an employee’s refusal will require additional analysis to determine if the employee should be exempted from the mandate, including (1) where the refusing employee is a qualified individual with a disability, as defined by the Americans with Disabilities Act (ADA), (2) where the employee’s refusal is due to their sincerely held religious belief, and (3) where the refusing individual is subject to a collective bargaining agreement.

First, qualified employees under the ADA whose disability puts them at higher risk for an adverse reaction to the vaccine may be able to refuse the COVID-19 vaccine as a reasonable accommodation.  If an employee requests a reasonable accommodation in the form of refusing to take the COVID-19 vaccine, the ADA requires an employer engage in the interactive process with the employee to determine if the requested accommodation is reasonable and/or creates undue hardship on the employer. Because the EEOC has made clear that COVID-19 meets its “direct threat” standard, it is possible that, even with a qualified disability under the ADA, an employee cannot safely perform his or her job without the COVID-19 vaccine. Thus, COVID-19’s classification as a “direct threat” will unquestionably impact the interactive process for reasonable accommodations.

Next, under Title VII of the Civil Rights Act of 1964, which protects employees from religious discrimination, an employee may refuse to take the COVID-19 vaccine based on a sincerely held religious belief. The sincerely held belief must be religious, rather than political or philosophical. An employer who receives a request from an employee to refuse the vaccine based on religious reasons has the right to inquire further to determine whether the belief is truly a sincerely held religious belief. Even where an employee refuses a vaccine based on a sincerely held religious belief, courts recognize that an employer may lawfully refuse such an accommodation where it would cause the employer an undue hardship. For example,  courts have held that the spread of influenza, which could be caused by an employee’s failure to take the flu shot, constitutes a safety risk to a health care employer’s workforce and patients, thus posing an “undue hardship” on the health care employer. As a result of this reasoning, employers in fields where transmission of COVID-19 is highly likely may be able to terminate an employee for refusing to take the COVID-19 vaccine, even if the refusal is based in a sincerely held religious belief.

Lastly, if an employee is a party to a collective bargaining agreement, the employer should negotiate the mandatory vaccination provision with the employee’s union. Incorporation of the employer’s vaccination policy into the CBA will help ensure compliance and could avoid disputes.

May an Employer Terminate an Employee Who Refuses the Vaccine?

In order to terminate an employee who refuses the COVID-19 vaccine, an employer must have a uniformly applied policy regarding its mandate of the COVID-19 vaccine as a condition of employment. Thus, under a uniformly applied policy, employers may lawfully terminate an employee who has not requested a reasonable accommodation on the basis of a disability, refused on the basis of a sincerely held religious belief or who is not subject to a collective bargaining agreement for refusing the COVID-19 vaccine.  But as discussed above, even termination of an employee who requests accommodation because of a disability or religious belief may be lawful depending on the circumstances.  Employers should remember the importance of individually analyzing each situation.

Who Pays for a Mandated COVID-19 Vaccine?

If an employer mandates that its employees take the COVID-19 vaccine as a condition of employment, it is a best practice, and in the employer’s best interest, for the employer to pay the cost of the vaccine.

As always, it is imperative that employers uniformly apply policies to all employees. This information is subject to change based on further guidance regarding the COVID-19 vaccine in the workplace. Employers should consult with their employment counsel for additional guidance on addressing concerns about the COVID-19 vaccine in the workplace. Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients.


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For more information on this alert and its impact on your business, please call 405.606.4711 or email me.

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Phillips Murrah partners with KGOU to launch Paying it Forward non-profit campaign

Phillips Murrah Paying It Forward Header Graphic

Phillips Murrah Presents: Paying It Forward

Amplifying the message of one non-profit each month for a year

[Paying It Forward] Starting in December, Phillips Murrah is partnering with Oklahoma NPR radio station KGOU to sponsor broadcast announcements that shine a light on a selected non-profit organization each month. Our aim is to amplify each beneficiary organizations’ needs and goals, and to help increase awareness, drive volunteer quality and quantity, assist in fundraising support, and improve capacity to deliver service to the community.

Our beneficiary in January is Positive Tomorrows, an organization that is critical to the wellbeing of our community. The need to address homelessness in our community, especially related to children and education, is of paramount importance. #PIFOKC


January Beneficiary

Positive Tomorrows

positive tomorrows logo

Positive Tomorrows’ mission is to partner with homeless families to educate their children and create pathways to success. As the only private school in America devoted solely to educating homeless children, Positive Tomorrows is leading the charge in developing a comprehensive educational system built to bring students up to grade level, academically and socially, so they can successfully rejoin the public school system.

Their work focuses on three areas: reducing barriers, supporting families and providing a robust education. Those three objectives lead to students who are equipped and empowered to break inter-generational cycles of poverty and homelessness.

Contact Positive Tomorrows: WEBSITE DONATEFACEBOOKTWITTER

See related article: Phillips Murrah Director Nikki Jones Edwards helps break ground on new Positive Tomorrows facility


Previous Beneficiaries

December 2020: Regional Food Bank of Oklahoma

Law360’s 2020 Glass Ceiling Report: Phillips Murrah ranked for gender diversity

Phillips Murrah is proud to announce that our Firm is ranked in Law360’s 2020 Glass Ceiling Report.

Phillips Murrah Glass Ceiling Report visual

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Each year, Law360 surveys participating law firms in various size categories and ranks their percentage of female attorneys and female equity partners. They publish their findings in the Glass Ceiling Report. For the 2020 GCR, Phillips Murrah is ranked 12th in the nation for firms of 100 attorneys or less.

Click on the graphic on this page to examine details of Law360’s findings about Phillips Murrah. The full story and an interactive data graphic is HERE. The numbers used by Law360 were collected on their survey in April 2020.

“We’re pleased to receive this recognition for Phillips Murrah and its culture, which rewards talent, skill, and work ethic, and affords equal opportunities to all,” said Candace Williams Lisle, Phillips Murrah Director and Chair of our Firm’s Diversity, Equity and Inclusion Committee. “Not only is Phillips Murrah a leader in the percentage of women attorneys, but more importantly, in women who have a seat at the table as equity partners and firm leaders. Our goal is not simply diversity – but equity and inclusion as well. We’re fortunate that the pool of legal talent in our region includes so many accomplished women, and that so many practice law with us at Phillips Murrah.”

Law360 Ceiling Smashers 2020 graphic

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Phillips Murrah is also featured in a Law360 article titled “These Firms Have The Most Women In Equity Partnerships,” which names our Firm among those that have the highest representation of women equity partners.

“Here are this year’s Ceiling Smashers — the top 10 firms in each law firm size category that are outpacing their peers as the legal industry works towards closing the gender gap in its top ranks.” – Law360

Phillips Murrah has a long history of elevating attorneys based on skill and talent, and we continue to lead, both locally and nationally, in our number of women attorneys and equity partners.

However, according to Law360, progress has not been easy in the overall legal industry.

“While law firms continue to tout efforts to close the gender gap in their ranks, parity is still a distant goal, our annual survey shows. Law360’s Glass Ceiling Report indicates only incremental growth in the number of female lawyers in private practice. Female attorneys remain underrepresented at U.S. law firms, particularly at the highest levels.” – Law360

Law 360 wrote that they see the Glass Ceiling Report as the beginning of a conversation that they hope will expand as they develop new ways of examining gender diversity in the profession and evaluate the data that is the most relevant to answering the difficult questions. As they continue to collect and analyze data, they also welcome your comments here.


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Phillips Murrah recognized as Champion of Justice Law Firm by Texas Access to Justice Commission

The Texas Access to Justice Commission announced Phillips Murrah is among the recipients of their Champion of Justice Law Firm Award. The Commission presents the awards to attorneys and law firms who champion and support the important work of Texas legal aid and pro bono providers.

Phillips Murrah is recognized via our Texas office, located in Dallas.

Texas Access to Justice Champion of Justice Law Firm

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About The Texas Access to Justice Commission:

The Supreme Court of Texas created the Texas Access to Justice Commission in 2001 with the mandate of expanding access to justice for low-income Texans. Because there are a variety of challenges to access to justice in Texas, the Commission’s work is necessarily multi-faceted. These are our primary areas of focus:

  • Policy Initiatives: By promoting policies that remove barriers to our judicial system, the Commission works to create a framework for equitable access to justice.

  • Resource Development: Through ongoing fundraising efforts and a strong partnership with the State Legislature, the Commission works to secure funding and other resources for legal aid across Texas.

  • Awareness and Education: By educating the legal community about access to justice issues and the importance of pro bono work, and by training legal aid lawyers to effectively advocate for their clients, the Commission seeks to expand and enhance the delivery of legal aid and pro bono services across Texas.

To contact Phillips Murrah’s Dallas office, email or call:

Janet A. Hendrick photoJanet A. Hendrick
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jahendrick@phillipsmurrah.com
214.615.6391
3710 Rawlins Street
Suite 1420
Dallas, TX 75219


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Employee or independent contractor? Department of Labor issues new proposed “Five-Factor Test”

By Phoebe B. Mitchell

In the past several years, employers have struggled to determine whether some workers should be classified as employees or as independent contractors. The difference is significant, as employees are entitled to many benefits that independent contractors are not, including overtime for those not exempt under the federal Fair Labor Standards Act (FLSA). As a result, worker misclassification is a costly mistake employers want to avoid.

DOL proposal contracting

U.S. Department of Labor proposes new rules on who is considered an employee and who is considered an independent contractor.

This week, the United States Department of Labor (DOL) issued its anticipated proposed rule regarding classification of workers as independent contractors. According to Secretary of Labor Eugene Scalia, the proposed rule will “make it easier to identify employees covered by the [FLSA], while respecting the decision other workers make to pursue the freedom and entrepreneurialism associated with being an independent contractor.” DOL is accepting comments on the proposed rule for 30 days.

The new rule includes a five-factor test that considers the “economic reality” of the relationship between workers and their employers.

Among the five factors, the DOL made clear that two “core” factors are key:

  1. Control a worker has over their work
  2. The worker’s potential for profit or loss

Both factors help determine if a worker is economically dependent on someone else’s business, or alternatively, if the worker is in business for him or herself.

The nature and degree of the individual’s control over the work

This first core factor examines a worker’s ability to personally control his or her work. For example, a worker is an independent contractor if the worker, as opposed to the company, exercises substantial control over key aspects of performance of work.  A worker exercises substantial control over performance of work by setting his or her own schedule or selecting his or her own projects. Further, the worker exercises substantial control over key aspects of performance of work if the worker has the ability to do work for other employers, including the employer’s competitors.

On the other hand, a worker is properly classified as an employee if the employer, as opposed to the worker, exercises substantial control over key aspects of the performance of the work. For example, if the employer controls the worker’s schedule or workload, or directly or indirectly requires the worker to work exclusively for the employer, the worker should be classified as an employee.

The individual’s opportunity for profit or loss

This second core factor examines a worker’s personal opportunity for profit or loss. If the worker’s profit or loss opportunity is closely tethered to the work he or she performs, the worker is likely an independent contractor. In other words, a worker is a true independent contractor if the individual has the opportunity to earn profits or incur losses based on his or her own exercise of initiative, or management of his or her investment in helpers, equipment, or material to further the work.

Alternatively, an employee does not have as much personal opportunity for profit or loss. A worker who is unable to affect his or her earnings or is only able to do so by working more hours or more efficiently is properly classified as an employee.

Three other factors

The proposed rule includes three other factors:

  1. The amount of skill required for the work
  2. The degree of permanence of the working relationship between the worker and the potential employer
  3. Whether the work is part of an integrated unit of production.

For example, if a worker has specialized training that the employer does not provide, and the work relationship is by design definite in duration, the worker should be classified as an independent contractor. On the other hand, an employee depends on the employer to equip him or her with the skills or training necessary to perform the job, the work relationship is, by design, indefinite in duration or continuous, and the worker’s work is a component of the employer’s integrated production process for a good or a service. Lastly, the actual practice of an employer is more relevant than what may be contractually or theoretically possible in determining a worker’s classification as either an independent contractor or employee.

While these three factors are important, according to DOL, if the two “core” factors point to the same finding, “their combined weight is substantially likely to outweigh the combined weight of the other factors that may point toward the opposite classification.”

The complete proposed rule is available at: https://www.dol.gov/sites/dolgov/files/WHD/flsa/IC_NPRM_092220.pdf.

Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients regarding the DOL’s new rules.


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For more information on this alert and its impact on your business, please call 405.606.4711 or email me.

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Phillips Murrah attorneys remember Ruth Bader Ginsburg at OKC candlelight vigil

Phillips Murrah attorneys attend RBG vigil in OKC

From left: Nikki Jones Edwards, Cathy L. Campbell, Charlotte Hanna, Rev. Lori Walke and Lauren Barghols Hanna.

Tuesday night, Oklahomans gathered at the state capitol to mourn the death of Supreme Court Justice Ruth Bader Ginsburg, an American legal, cultural and feminist icon and, as described by Chief Justice John Roberts, a justice of historic stature and a cherished colleague.

Among those who gathered were Phillips Murrah attorneys Nikki Jones Edwards, Cathy L. Campbell and Lauren Barghols Hanna, joined by (see photo) Cathy’s granddaughter and Lauren’s daughter, Charlotte, and Rev. Lori Walke, Associate Minister at Mayflower Congregational United Church of Christ.

“Justice Ginsburg famously declared that ‘Women belong in all places where decisions are being made,’” said Hanna, who practices employment law at Phillips Murrah. “In 1956, she was one of only nine women in her 500-person law school class. Today, thanks to the tireless efforts of Justice Ginsburg and other fierce advocates for equality, almost half of Phillips Murrah partners and two-thirds of our Executive Committee are women. We owe a great debt to Justice Ginsburg and the other women attorneys who paved the road, and we must now continue her efforts to ensure ‘justice for all.’”

The event, A Candlelight Vigil in Remembrance of Ruth Bader Ginsburg, was organized by The Oklahoma Women’s Coalition to honor and remember Justice Ginsburg, who died Friday at the age of 87. Video of the speakers at the vigil are available here.

“We deeply mourn the loss of Supreme Court Justice Ruth Bader Ginsburg. Our country has lost a champion of women’s rights and progress for all Americans. Our thoughts are with her loved ones and all whose lives were shaped and touched by her unwavering commitment to justice,” OWC posted to their Facebook page.

After 13 years on the U.S Court of Appeals, President Bill Clinton appointed Justice Ginsburg to the U.S. Supreme Court in 1993. Over the following 27 years, she earned a reputation for being the High Court’s liberal leader and a steadfast advocate for equality. As stated in an achievement.org profile called “Ruth Bader Ginsburg – Pioneer of Gender Equality”:

“On the high court, Justice Ginsburg was often called on to rule in cases regarding the rights of women and issues of gender equality. In 1996, she joined the majority in United States v. Virginia, ruling that the state could not continue to operate an all-male educational institution (the Virginia Military Institute) with taxpayer dollars. She also joined in the majority opinion in Stenberg v. Carhart (2000), striking down a Nebraska law banning so-called ‘partial birth’ abortions. She dissented vehemently in Ledbetter v. Goodyear Tire (2007), in which an Alabama woman sued unsuccessfully for back pay to compensate for the years in which she had been paid substantially less than junior male colleagues performing the same job. The U.S. Congress would later address the issue of pay equity through legislation known as the Lily Ledbetter Fair Pay Act of 2009.”

Late in Ginsburg’s life, she also became a cultural and social media icon. According to the New York Times, “a law student, Shana Knizhnik, anointed her the Notorious R.B.G., a play on the name of the Notorious B.I.G., a famous rapper who was Brooklyn-born, like the justice. Soon the name, and Justice Ginsburg’s image — her expression serene yet severe, a frilly lace collar adorning her black judicial robe, her eyes framed by oversize glasses and a gold crown perched at a rakish angle on her head — became an internet sensation.”

In a 2015 television interview, Ginsburg was asked how she would like to be remembered, to which she replied: “Someone who used whatever talent she had to do her work to the very best of her ability, and to help repair tears in her society – to make things a little better through the use of whatever ability she has. To do something, as my colleague David Souter would say, outside myself, because I’ve gotten much more satisfaction for the things that I’ve done for which I was not paid.”


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Clients seek lower costs for legal services

[VALUE] Clients, including in-house legal departments, are understandably focusing on lowering their legal expenses. They are looking to mid-market law firms like Phillips Murrah to achieve it.

Phillips Murrah presents Blocks for Bucks donation to Thunder Cares Foundation for 2020 season

As with the previous three years, the end of the season coincides with Phillips Murrah’s Blocks for Bucks donation to the Thunder Cares Foundation. This season, Phillips Murrah is donating $18,700.

Breaking News: IRS issues guidance on Trump’s payroll tax deferral order

On Friday, August 28, 2020, the IRS and Treasury issued guidance implementing President Trump’s order to defer collection of some payroll taxes amid the coronavirus pandemic.

Phillips Murrah attorney Jessica Cory

Jessica N. Cory represents businesses and individuals in a wide range of transactional matters, with an emphasis on tax planning.

On August 8, 2020, President Trump issued a Presidential Memoranda, commonly known as an Executive Order (the “Order”), to defer the withholding, deposit, and payment of certain payroll taxes on wages paid from September 1, 2020 through the end of the calendar year.   The Order applies to any employee whose pretax compensation is less than $4,000 per biweekly pay period (or $104,000 per year, on an annualized basis).  The Order permits the employers of these eligible employees to temporarily suspend the 6.2% Social Security tax typically withheld from employees’ paychecks.

The Order has raised a number of questions for employers and payroll companies considering whether to implement the deferral.  For example, the National Payroll Reporting Consortium (“NPRC”) recently raised concerns about whether sufficient time is available to implement a deferral option by September 1, given the substantial programming changes that such an option would require. Because payroll systems are typically designed to use a single Social Security tax rate for the full year, for all employees, it may be challenging to change a reporting system to apply a different tax rate for part of the year, beginning mid-quarter, for only certain employees of certain employers.

In addition to practical challenges relating to implementation, the Order also raises liability concerns for both employees and employers, who are dually liable for unpaid payroll taxes under the Internal Revenue Code. Under Code Section 7508A, the Secretary of the Treasury can delay tax payments for up to a year during a presidentially-declared disaster, but no authority exists to authorize forgiveness of those deferred amounts. Accordingly, employees, employers, or both could be held liable for any deferred payroll taxes after the deferral period ends. This could represent a substantial burden. For example, for an employee earning $50,000 per year, the deferral would allow the employee to take home an additional $119 per paycheck during the deferral period. But, without Congressional action to authorize forgiveness of the deferred taxes, that employee—or his or her employer—would be facing a $1,073 tax liability in January.

Based on guidance released today from the Treasury Department in Notice 2020-65, employers who opt into the deferral program will be required to collect the deferred taxes ratably from their employees during a four month repayment period beginning on January 1, 2021, through increased withholding. Accordingly, during the repayment period, employers will be required to withhold 12.4% from their employees’ paychecks, rather than the normal 6.2%, to repay the payroll tax liability accumulated from September to December. The guidance does not indicate how an employer should collect the deferred taxes from an employee who terminates his or her employment prior to the end of the repayment period but indicates that employers may make other “arrangements … to collect the total [deferred tax amount] from the employee,” if necessary.

The guidance offered on Friday indicates that the Treasury intends to put the onus of repayment on the employer, with the employer potentially subject to interest, penalties, and additions to tax beginning on May 1, 2021, if the employer is unable to collect the accrued tax liability from its employees. Accordingly, given the voluntary nature of the deferral, the potential liability involved, and the costs and complexity associated with upgrading their payroll systems to accommodate the deferral, employers have a strong incentive to opt out and continue withholding for now.

To the extent an employer does want to participate in the tax deferral, the employer should consider establishing a procedure to allow eligible employees to opt in to the deferral. This procedure should require any employee opting in to provide the employer with a written and signed statement that:

  1. Acknowledges that any deferred taxes will come due in 2021.
  2. Authorizes the employer to withhold tax at a double rate, consistent with the guidance provided in Treasury Notice 2020-65, for those pay periods falling in the four-month repayment period.
  3. Agrees that in the event the employee’s employment is terminated prior to the end of the repayment period, for any reason, the employer can set off any remaining amount owed to the employee by the amount of outstanding deferred taxes, that the employee will be liable for any remaining amount, and the employee will reimburse the employer for any associated liability, including penalties and interest, as necessary.

Employers who decide to establish such an opt-in procedure should consult with counsel to ensure compliance with state labor laws.


For more information on this alert and its impact on your business, please call 405.552.2472 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Teleworking and an Employer’s Woes of Record Keeping

Portrait of Byrona J. Maule

Click to visit Byrona J. Maule’s profile page.

In this era of Covid-19, many employees who have never had the opportunity to telework are now, out of necessity, teleworking.  This creates many challenges for employers – and none is more important than the employer’s obligation to exercise reasonable diligence in tracking teleworking employees’ hours of work.

The Wage and Hour Division of the United States Department of Labor (WHD) issued Field Assistance Bulletin 2020-5 (FAB 2020-5) today on the employer’s obligation to track a teleworking employee’s hours of work pursuant to the Fair Labor Standards Act (FLSA).

FAB 2020-5 acknowledges the employers’ obligation to pay its employees for all hours worked – even if the work was not requested, if the employer “suffered or permitted” the employee to work.  This includes work performed at home.  If an employer knows or has reason to believe that an employee is performing work, the employer must count those hours as hours worked.  An employers’ knowledge may be either actual or constructive.

Employers may exercise reasonable diligence in tracking an employee’s teleworking hours by having a reasonable reporting procedure for unscheduled time and then compensating employees’ for all reported hours.  An employer may not prevent or discourage employees to accurately report all hours the employee works. If the employee fails to use the reasonable procedure “the employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours.”  If an employee fails to report unscheduled hours worked through the employer’s established procedure, the employer is generally not required to investigate further to uncover unreported hours worked.

FAB 2020-5 explores when an employer has “reason to believe that an employee is performing work.”  An employer has actual knowledge of the employees’ regularly scheduled hours, and an employer may have actual knowledge of hours worked, through employee reports or other notifications.  An employer has constructive knowledge if the employer should have acquired knowledge of such hours through reasonable diligence.  Reasonable diligence is defined as what the employer should have known – NOT what the employer could have known.  “Though an employer may have access to non-payroll records of employees’ activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours, reasonable diligence generally does not require the employer to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported.”  Examples given of impractical efforts included in FAB 2020-5 included sifting through CAD records and phone records to determine if an employee was working unreported hours. However, Bulletin 2020-5 does not give a definitive rule that an employer never has to consult records outside of timekeeping records, noting it depends on the circumstances, and there may be instances where an employer’s non-timekeeping records may be relevant to issue of constructive knowledge of an employee’s unreported work hours.

In order for an employer to leverage the most protection from an employee seeking wages for unreported hours, an employer should:

  1. Have a reasonable policy/procedure setting forth clearly that an employee is to report all hours worked, whether scheduled or unscheduled.
  2. The employer should not discourage an employee from utilizing the procedure.
  3. The employer should train on the policy, or otherwise assure that employees are aware of the procedure, and when to use the procedure.

If an employer undertakes these steps, and an employee fails to utilize the procedure to report unscheduled hours worked, the employer’s failure to pay for the unreported hours worked should not be a violation of the FLSA.


For more information on this alert and its impact on your business, please call 405.552.2453 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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New York Federal Court invalidates department of labor FFCRA regulations creating potential nationwide ramifications

Courthouse in lower ManhattanBy Phoebe B. Mitchell

On August 3, 2020, the United States District Court for the Southern District of New York invalidated multiple Department of Labor (DOL) regulations interpreting the Families First Coronavirus Response Act (FFCRA), Congress’ response to the COVID-19 pandemic.  The FFCRA provides paid leave to employees unable to work during the coronavirus crisis. Congress charged the DOL with issuing FFCRA regulations, with the final regulations being published on April 1, 2020 (85 Fed. Reg. 19,326) (“Final Rule”). Shortly after, the State of New York sued the DOL, claiming it exceeded its statutory authority and unlawfully denied leave to eligible employees.  The Southern District of New York agreed with the State of New York, voiding four FFRCA regulations:

1) “Work-availability” requirement

2) Definition of “health care provider”

3) Intermittent leave

4) Documentation requirements

“Work-Availability” Requirement

The two major provisions of the FFCRA, the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA), apply to employees who are unable to work due to the COVID-19 pandemic. However, the DOL’s final rule implementing the FFCRA excludes employees who are unable to work because their employers do not have work for them.

The court stated that this limitation is “hugely consequential” for employees whose employers have temporarily shut down due to the pandemic, and thus, have no work for their employees. By invalidating this DOL regulation, the court held the DOL cannot require that employees actually be working in order to take FFCRA leave. In turn, this could subject employers, including employers who were forced to temporarily cease operations due to state or local orders, to claims by furloughed or laid-off employees.

Definition of “Health Care Provider”

Under the FFCRA, an employer may elect to exclude “health care providers” from leave benefits. Thus, the DOL’s definition of “health care provider” could have large ramification for many employers. In its final rule, the DOL defined “health care provider” as:

“anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions”

and

“any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility  where that individual’s services support the operation of the facility, [and] anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.”

Final Rule at 19,351 (§ 826.25).

The court noted, and the DOL conceded, that this expansive definition, in practice, could include even an English professor, librarian or cafeteria manager at a university with a medical school. Thus, the court held that this definition could not stand. In so deciding, the court reasoned that even employees with “no nexus whatsoever” to healthcare services would be exempt from FFCRA leave.

Intermittent Leave

The DOL’s Final Rule significantly limited intermittent leave under the FFCRA. Intermittent leave means leave taken in separate periods of time, rather than one continuous period. Under the rule, an employee could only use intermittent leave if: (1) the employee and employer agree to the use of intermittent leave; and (2) the use is limited to the employee’s need to care for a child whose school or place of care is closed, or where child care is unavailable.

The court agreed that intermittent leave should not be allowed in situations where the employee is at high risk for spreading the virus to other employees. For example, if an employee is showing symptoms of COVID-19, or caring for a family member showing symptoms of COVID-19, the employee should not be allowed to take intermittent leave, but rather must take continuous paid sick leave until that leave is exhausted or the employee no longer has a reason to be on leave.

However, the court disagreed with the DOL’s interpretation that the employer and employee must agree to the use of intermittent leave. The court held that the regulation “utterly fails to explain why employer consent is required” for an employee to take intermittent leave. Thus, the court ruled that an employer’s consent is not required for an employee to take intermittent leave under the FFCRA.

Documentation Requirement

The DOL’s Final Rule requires employees to submit documentation to their employer prior to taking leave indicating the reason for leave, the duration of the requested leave, and, when applicable, the authority for the isolation or quarantine order qualifying them for leave.

In contrast, the FFCRA states that an employer may require an employee taking leave under the EPSLA to provide reasonable documentation after the employee’s first day of leave. Further, the statute provides that an employee taking leave under EFMLA must provide the employer with notice of leave as is practicable under the circumstances.

The New York court held that, due to the specific notice requirements set out in the statute, the DOL exceeded its authority in requiring that an employee provide documentation before taking leave. Striking down this regulation, however, did not affect the FFCRA’s original notice requirements mandating documentation after an employee takes leave under the statute.

While this decision came from a federal New York court, it could have nationwide ramifications. The decision could prompt the DOL to issue new regulations, which, of course, would be implemented across the United States. Alternatively, the DOL could choose to appeal the decision. Currently, it is unclear if this decision will be applied retroactively. As always, but especially In light of this decision, employers must be vigilant when making decisions regarding employee leave under the FFCRA.

Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients during the current COVID-19 pandemic.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.


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For more information on this alert and its impact on your business, please call 405.606.4711 or email me.

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Blocks for Bucks continues with NBA Bubble Season Restart

Phillips Murrah Blocks for Bucks 2020

It was here, then it was gone. Now, it’s back again! On Saturday, Aug. 1, 2020, the Oklahoma City Thunder basketball season resumes in Orlando. FL. The Thunder are paired against the team we were supposed to play twenty weeks ago, when the season was abruptly, unceremoniously shut down due to the COVID-19 virus.

OKC Thunder cancelled seasonWith the tip-off against the Utah Jazz at 2:30 p.m., so resumes Phillips Murrah’s Blocks for Bucks partnership with the Thunder Cares Foundation. The rest of the season will be played in what is being characterized as “The Bubble,” which is an isolation zone set up for the NBA in Orlando’s Disney property with strict protocols designed to keep players and the teams’ supporting staff safe from exposure to coronavirus.

What is Blocks for Bucks?

Starting in 2017, Phillips Murrah first partnered with the Thunder to recognize our home team’s on-court accomplishments in blocking shots and turn our Firm’s support into dollars that will help make our community a better place. Through Blocks for Bucks, Phillips Murrah has been donating $100 to The Thunder Cares Foundation for each blocked shot that the Thunder forces at home games during the regular season.

Phillips Murrah 2018-2019 Oklahoma City Thunder Blocks for Bucks donation check

Phillips Murrah Directors G. Calvin Sharpe, Marc Edwards and Nikki Edwards present the 2018-2019 season Blocks for Bucks donation check for $20,600 to Christine Berney, OKC Thunder Vice President, Community Relations

As the 2019-2020 season resumes, the Phillips Murrah Blocks for Bucks count is at 160, which equates to $16,000 raised so far for Thunder Cares. The current blocks count and video highlights can be found at the Oklahoma City Thunder website.

Typically, Phillips Murrah presents a check at half-court in the Chesapeake Arena during the final home game of the season. Last year’s final amount totaled $20,600.

Thunder Cares helps support the team’s community outreach projects, including Thunder-themed basketball courts in parks, schools and community centers across Oklahoma, as well as learning labs and activity rooms at organizations like the Boys and Girls Club of Oklahoma CountyCity Rescue Mission and Positive Tomorrows.

Phillips Murrah is proud of our partnership with the Thunder Organization, and we – like all Thunder fans – are more than ready for the season to continue. Good luck, stay safe and Thunder Up!

ALERT: Supreme Court ruling impacts property and title rights across large portion of Oklahoma

SCOTUS Ruling graphicToday, the Supreme Court ruled nearly half of the State of Oklahoma is an Indian Reservation.

From a New York Times article:

  • The 5-to-4 decision, potentially one of the most consequential legal victories for Native Americans in decades, could have far-reaching implications for the 1.8 million people who live across what is now deemed “Indian Country” by the high court.
  • Justice Neil M. Gorsuch said that Congress had granted the Creek a reservation, and that the United States needed to abide by its promises.

The outcome could have far-reaching implications for the State of Oklahoma and its citizens as it relates to property rights and land titles, taxation, and other matters involving tribal affairs.


To discuss how this may affect your business, contact Zac Bradt at the contact information below:

Zachary K. Bradt, Director
Phillips Murrah P.C.
EMAIL: zkbradt@phillipsmurrah.com
PHONE: 405.552.2447

Phillips Murrah

Texas Lawyer: Mid-Market Strategy to Achieve Cost Reductions that Clients Seek

On June 14, 2020, Mark E. Golman a Director in Phillips Murrah’s Dallas office, wrote the following article that was published in the Analysis section of ALM/Law.com’s publication, Texas Lawyer:

Mid-Market Strategy to Achieve Cost Reductions that Clients Seek

Legal industry surveys demonstrate the complexity of defining “value” in the legal industry. The exact meaning depends on who you ask, when you ask, and the nature of the circumstances. Fundamentally, the quality of provided services represents one significant indicator of value. However, clients view the cost of those services as an important component of value, which has specific and increasing importance during our current challenging economic times.

Mark Golman portrait image

Mark E. Golman helps clients achieve their strategic objectives and reduce risk in the areas of corporate law, finance and bankruptcy. Mark represents clients in the purchase and sale of businesses and assets, including purchases out of bankruptcy proceedings, financings and contract negotiations.

Informed by strategies that date back to the Great Recession of the previous decade, clients are understandably focusing on lowering their legal expenses and looking to mid-market law firms to achieve it. Simply put, it is a win-win – clients find more attractive billing rates by shifting Big Law work to mid-market firms, and mid-market firms are increasingly in a strong competitive position.

Prior to the pandemic crisis, our firm devised a strategy whereby major-market clients can achieve desired cost reductions while retaining the quality of a top-tier firm: location, location, location. Phillips Murrah is a 34-year-old firm headquartered in Oklahoma City. Two years ago, the firm opened its Dallas office to not only expand its footprint, but to also pass along substantial cost savings opportunities to clients as a result of lower comparative overhead costs.

As a result of this model, clients in Texas and across the country receive services from experienced shareholders whose billing rates are usually lower than those of first-year associates at large firms. Providing more experience at a lower billing rate improves efficiency and enhances value for our clients.

Of our more than 75 attorneys, six practice full-time from the Dallas office. Additionally, several of our Oklahoma City attorneys who previously practiced in Texas bring additional relationships and synergies to the firm. With Dallas as a prime example, we deliver a breadth and depth of service offerings as well as experienced attorneys at what amounts to bargain rates.

Since Phillips Murrah opened our Dallas office, more than half of our Oklahoma lawyers have worked on relationships managed by a Texas lawyer while each member of our Dallas office has worked on relationships managed from Oklahoma City. The collaborative opportunities provided by this low-overhead geography is accentuated by Oklahoma City being as close or closer to Dallas as Austin and Houston.

This strategy allows us to offer the best of both worlds to clients in Texas and beyond: top-tier legal services at a reasonable cost.

Mark E. Golman, a Phillips Murrah Shareholder, helps clients achieve their strategic objectives and reduce risk in the areas of corporate law, finance and bankruptcy. Mark represents clients in the purchase and sale of businesses and assets, including purchases out of bankruptcy proceedings, financings and contract negotiations.


Learn more HERE.

To contact Mark E. Golman, you can EMAIL or call 214.434.1919.

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Reprinted with permission from the June 14, 2020 edition of the Texas Lawyer © 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

Supreme Court Rules Title VII Protects Gay and Transgender Employees

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

Earlier this morning, the United States Supreme Court issued a landmark ruling that an employer who fires or otherwise discriminates against an employee for being gay or transgender violates Title VII of the Civil Rights Act of 1964.

In Bostock v. Clayton County, Georgia, the Supreme Court heard three cases in which employers had fired long-term employees simply for being gay or transgender.  A Georgia county employee was fired for “conduct unbecoming” an employee after he joined a gay recreational softball league.  A funeral home terminated an employee who presented as a male when she was hired, after the employee advised her manager that she planned to “live and work full-time as a woman.”  A skydiving company fired a skydiving instructor days after he advised a customer that he was gay.

In a 6-3 decision, the Supreme Court held that Title VII’s prohibition against discrimination “because of sex” prevents an employer from taking any adverse actions against employees on the basis of gender, sexual identity, or sexual expression.  Justice Gorsuch, author of the majority opinion, unequivocally declared that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.  Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”

The Bostock opinion considers an employer with two employees, both of whom are attracted to men.  The employees are materially identical in all respects, except that one is a man and the other is a woman.  If the employer fires the male employee because he is attracted to men, the employer necessarily is discriminating against him for the traits or actions it tolerates in the female employee.  Similarly, if an employer fires a transgender person because she was identified as male at birth but now identifies as a female, the employer is firing the individual for displaying traits or actions it would otherwise tolerate in an employee identified as female at birth.  Employers cannot discipline employees for being “insufficiently feminine” or “insufficiently masculine” without violating Title VII.

Title VII of the Civil Rights Act outlawed discrimination in the workplace on the basis of race, color, religion, sex, or national origin.  The Supreme Court noted that the legislators who adopted the Act in 1964 may not have anticipated this particular outcome, but that those same legislators may also not have anticipated that the Act would ultimately prohibit discrimination on the basis of motherhood, prohibit sexual harassment of female employees, and—eventually–prohibit sexual harassment of male employees to the same extent as female employees.  But, as Justice Gorsuch noted, the phrase “because of…sex” is clear and unambiguous; thus, the “limits of the drafters’ imagination supply no reason to ignore the law’s demands.”

Today, the Supreme Court clarified that “[a]n individual’s homosexuality or transgender status is not relevant to employment decisions” and that “[a]n employer who fires an individual merely for being gay or transgender defies the law.”

See the United States Supreme Court opinion HERE.


Phillips Murrah stands ready to assist employers in ensuring that employee handbooks and hiring and disciplinary practices are fully compliant with Title VII and all relevant employment laws.

Contact us by EMAIL or call 405.235.4100.

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Phillips Murrah PPE donation to OU Medicine follow-up

As part of Phillips Murrah’s efforts to assist in the Oklahoma City community’s response to the COVID-19 pandemic, our Firm once again partnered with NPR radio station KGOU. In addition to supporting KGOU’s ongoing work, Phillips Murrah raised $3000 for OU Medicine to assist in acquiring personal protective equipment (PPE) for front-line medical workers, as part of May’s #GivingTuesdayNow pledge drive.

On Wednesday, our Firm presented the donation to Anne Clouse, Chief Development Officer for OU Medicine. Due to COVID-19-related restrictions, Phillips Murrah Director Catherine L. Campbell and Healthcare practice leader Mary Holloway Richard presented a six-foot-wide check, designed with appropriate social distancing in mind.

Phillips Murrah OU Medicine PPF Check Presentation

Phillips Murrah Director Catherine L. Campbell (l) and Healthcare practice leader Mary Holloway Richard (r) presented a six-foot check to OU Medicine, designed with appropriate social distancing in mind.

“We are deeply grateful to Phillips Murrah for their generous gift to support OU Medicine’s COVID-19 response,” said Clouse. “Their donation will help support our healthcare workers taking care of patients on the frontline. What a kind a thoughtful gesture.”

“Phillips Murrah has long had a strong relationship with healthcare facilities and providers throughout our state,” said Richard, who represents institutional and non-institutional providers of health services. “We are proud to support the heroic efforts of OU Medicine and those on the front line ministering to all Oklahomans.”

“There is a certain element of good humor related to this giant, social-distancing presentation check, which Cathy and Mary safely presented to Anne in a parking lot on the downtown OU Medicine complex.” said Dave Rhea, Phillips Murrah Marketing Director. “However, supporting OU Medicine as they battle this virus is a very serious matter, and we are grateful to be able to help.”

#GivingTuesdayNow was a global day of giving and unity as an emergency response to the unprecedented need caused by COVID-19.

Promotional graphic for KGOU GivingTuesNow 2

RELATED LINKS:

#GivingTuesdayNow: Phillips Murrah partners with KGOU to support OU Medicine PPE
Phillips Murrah partners with KGOU and Regional Food Bank to provide 20,000 meals

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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SB 1928: Key changes to ABLE laws make curbside sales and delivery of alcohol permanent

By Phillips Murrah Attorneys Ellen K. Spiropoulos and Justin G. Bates

In response to the outbreak of the novel coronavirus, and in keeping with the sweeping changes to modernize Oklahoma’s liquor laws effective in October 2018, the ABLE Commission temporarily authorized curbside and delivery of beer, wine and spirits by liquor stores, beer and wine by grocery and convenience stores, and by restaurants holding the appropriate licenses.

Phillips Murrah attorney Ellen SpiropoulosLauren Hanna

Ellen assists local and national businesses in the restaurant, entertainment and hospitality industries with obtaining applicable operating licenses and permits for food and alcoholic beverage service, as well as any related compliance or enforcement issues.

The passage of Senate Bill 1928 in the last days of the session, which became law this week, effectively made the ABLE Commission’s previous directives about curbside sales and delivery of alcohol permanent. The key changes to the alcohol laws now expand sales for ABLE licensees effective immediately under the following conditions:

  • Liquor stores can sell beer, wine and spirits in sealed, original containers via curbside and delivery.
  • Grocery and convenience stores can sell beer and wine (up to 15% alcohol by volume) in sealed, original containers via curbside and delivery.
  • Restaurants, bars and clubs can sell beer and wine in closed packages via curbside and delivery.
  • Small brewers and small farm wineries may sell curbside-only alcoholic beverages produced by the brewery or winery in sealed, original containers.
  • Payment can be made by cash, check, transportable credit card devices and advance online payment methods.
  • Curbside sales and all deliveries must be made by ABLE-licensed and trained employees of the business.
  • No third-party services can be used for any deliveries.

Some states already permit third-party delivery sales from liquor stores, as well as drive-thru and to-go sales of alcoholic beverages from restaurants. As a result of restaurant dining closures and the need for social distancing, several more states are, at least temporarily, expanding alcohol delivery options and sales of cocktails to-go. The Oklahoma legislature was not willing to go that far.

Nevertheless, the actions taken by the ABLE Commission since March, and the bills passed with overwhelming majorities by the Oklahoma House and Senate this session, are continuing advances in the modernization of Oklahoma’s liquor laws.

It is hard to believe that less than two years ago, Oklahoma still had dry counties and only 3.2 beer in grocery and convenience stores. We have come a long way and there is no telling where the trail will end. Cheers!


For more information on this alert and its impact on your business, please contact:

Ellen Keough Spiropoulos is an Of Counsel attorney at Phillips Murrah who assists local and national businesses in the restaurant, entertainment and hospitality industries with obtaining applicable operating licenses and permits for food and alcoholic beverage service, as well as any related compliance or enforcement issues. Contact her by phone, 405.552.2422 or by email.

Justin G. Bates is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters. Contact him by phone, 405.552.2471 or by email.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Returning to Work – A Post-Pandemic Workplace Safety Guide

By Phillips Murrah Attorneys Janet Hendrick and Phoebe Mitchell

As stay-at-home orders have begun to expire in recent weeks, more than half of the states – including Oklahoma and Texas – have lifted restrictions on businesses. With many Americans returning to work after months at home due to the COVID-19 virus pandemic, employers should be aware of claims relating to workplace reentry. Employers can anticipate novel causes of action, including lawsuits alleging a failure to provide a safe workplace.

Phillips Murrah Director Janet Hendrick portrait

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

For example, in New York, nurses’ unions have filed multiple lawsuits against the state, claiming “grossly inadequate” protections against the virus in the workplace. These suits likely mark a trend, as employees may attempt to hold their employers liable for lost work, hospitalizations, and even deaths caused by COVID-19, especially where employees may have contracted the virus in the workplace.

The Occupational Safety and Health Administration (OSHA), the federal agency charged with regulating workplace safety, has not issued new guidance relating to airborne diseases in response to the coronavirus pandemic. Instead, the agency has relied on its “general duty” clause, which mandates that employers provide a place of employment “free from recognized hazards that are causing or likely to cause death or serious physical harm” to their employees.  This simply means that employers have a general duty to provide a safe working environment for their employees.

On April 10, 2020, OSHA did issue new guidance regarding recording cases of COVID-19 in the workplace. Under the Occupational Safety and Health Act, employers must record instances of illnesses contracted in the workplace, or “occupational illnesses.” OSHA’s new guidance provides that COVID-19 is a recordable illness, and employers will be responsible for recording cases of COVID-19 in the workplace if three criteria are met:  (1) the case is a “confirmed case” of COVID-19 as defined by the CDC; (2) the case is “work-related” as defined by 29 C.F.R. § 1904.5; and (3) the case involves one or more of the general recording criteria set forth in 29 C.F.R. § 1904.7.

Phillips Murrah attorney Phoebe B. Mitchell portrait

Phoebe B. Mitchell is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

(1) “Confirmed case”

The CDC defines a confirmed case of COVID-19 as “an individual with at least one respiratory specimen that tested positive for SARS-CoV-2, the virus that causes COVID-19.”

(2) “Work-related”

As defined by OSHA regulations, a case is “work-related” if “an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness.”

(3) General recording criteria

As defined by OSHA regulations, a case meets one or more of the general recording criteria if it results in any of the following: “death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness.” Further, the case also meets the general recording criteria if it “involves a significant injury or illness diagnosed by a physician or other licensed health care professional, even if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness.”

Because of community transmission of COVID-19, the guidance states that the only employers who must make the above work-relatedness determinations with relation to cases of COVID-19 in the workplace are the healthcare industry, emergency response organizations (which includes emergency medical, firefighting and law enforcement services), and correctional institutions. OSHA will not require other employers to make these same work-relatedness determinations, unless there is objective evidence that a COVID-19 case may be work-related, and the evidence was readily available to the employer. The guidance is intended to help employers focus on implementation of good hygiene practices and mitigation of COVID-19’s effects in the workplace, rather than forcing employers to make difficult work-relatedness decisions where there has been community spread.

Based on this OSHA guidance and the inevitable surge of litigation in the post-pandemic US, employers should act now to both protect their employees and minimize potential liability.

Before employees return to the workplace, employers should:

1) Create and implement concrete polices and guidelines regarding workplace hygiene, social distancing, face covering usage and reporting of symptoms

2) Monitor employees to ensure compliance with new COVID-19 policies

3) Encourage employees to stay home if they are sick

4) Allow at-risk employees to work from home where possible

5) Allow employees to return to work in phases where possible

6) Close off common areas in the workplace, such as break rooms, in an effort to encourage social distancing

 


For more information on this alert and its impact on your business, please call:

Janet Hendrick is a Shareholder in the Dallas office of Phillips Murrah who specializes in advising and representing employers. (click name for profile page) Contact her by phone, 214.615.6391 or by email.

Phoebe Mitchell is an Associate in the Oklahoma City office of the firm. (click name for profile page) Contact her by phone, 405.606.4711, or by email.

Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients during the current COVID-19 pandemic. Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Affidavit of Support Implications in Divorce in Marriage-Based Immigration

By Cassity B. Gies &  Sajani “Ann” Zachariah
This article originally appeared in the FEB 2020 Oklahoma Bar Journal.

Being the spouse of a United States citizen is the most common way to attain lawful permanent resident status, informally referred to as “getting a green card.” Each year, the United States Citizen and Immigration Services (USCIS) admits more lawful permanent resident statuses through marriage than any other major type of admission. (1) In a country where nearly half of all marriages end in divorce, (2) couples using marriage as grounds for obtaining a green card face special issues during their divorce and even after. Because Oklahoma has one of the highest divorce rates in the country, with as many as two out of every three marriages ending in dissolution, (3) family lawyers should be especially aware of the implications that come through marriage-based immigration.

Phillips Murrah family law attorney Cassity Giles

Cassity practices family law including divorce and separation, custody, and child support issues.

When a principal applicant for lawful permanent resident status seeks to immigrate using their spouse as a sponsor, the sponsoring spouse must submit, amongst a host of other things, an Affidavit of Support. (4) The affidavit is required to show that the immigrant will have adequate means of financial support and will not become a public charge. (5) Form I-864, an Affidavit of Support, is a legally enforceable contract between the federal government and the sponsoring spouse. (6) A sponsoring spouse accepts legal responsibility for financially supporting their alien spouse until they either become a United States citizen, die or are credited with 40 quarters of work (approximately 10 years). Divorce does not end that financial obligation. (7)

Three obligations arise for an I-864 sponsor:

1) the sponsor must reimburse the government for means-tested benefits received by the beneficiary over the obligatory 10-year period;

2) the sponsor must maintain the immigrant spouse at 125% above the federal poverty or at 100% of the federal poverty level for the household if the sponsor is an active military member; and

3) the sponsor must report any change in address to the attorney general and the state in which the sponsored alien lives during the period that the affidavit is enforceable. (8)

Signing an Affidavit of Support puts a sponsor in privity with both the beneficiary spouse and also with the federal government. If at any point before citizenship is granted or the 10 years pass, the beneficiary spouse receives means-tested public assistance from a federal, state or local agency, that agency can legally sue the sponsor and require him to repay the money that the agency provided to the beneficiary. (9) The term “means-tested public benefits” include food stamps, Medicaid, Supplemental Social Security Income (SSI), Temporary Assistance for Needy Families (TANF) and the State Child Health Insurance Program. (10) This area of immigration practice has seen a lot of discussion lately, with recent memorandums released by the Trump Administration criticizing governmental agencies for not properly enforcing reimbursement. (11)

In addition to the privity between the United States and the sponsor, the signor of an Affidavit of Support also obliges themself to the beneficiary and pledges to maintain the spouse at 125% above the federal poverty line. The current federal poverty line for a single household is $12,490, (12) and 125% of that amount results in a promise to maintain the beneficiary at an annual income of $15,612.50.

Several interesting arguments can be crafted by an attorney who is aware of the implications of an Affidavit of Support. Oklahoma courts, albeit in unreported case law, recognize the Affidavit of Support as a cause of action, independent of divorce that can be brought by the beneficiary ex-spouse. (13) Oklahoma case law presently offers no precedent utilizing the Affidavit of Support as a consideration for spousal support awards in divorce proceedings, how-ever, divorce attorneys in other states successfully argue it as both grounds for spousal support or, alternatively, as a separate support obligation apart from the divorce itself.

In Erler v. Erler, a California court order granted separate enforcement of the I-864 pledge of support despite the divorce judgment not recognizing it due to a premarital contract. There, the Turkish ex-wife succeeded in an appellate action to enforce the I-864 obligation. (14)

Thus, under federal law, neither a divorce judgment nor a premarital agreement may terminate an obligation of support. Rather, as the Seventh Circuit has recognized, “[t] he right of support conferred by federal law exists apart from what-ever rights [a sponsored immigrant] might or might not have under [state] divorce law.” We therefore hold that the district court correctly determined that Yashar has a continuing obligation to support Ayla. (15)

Enforcing the obligation as part of an award for spousal support was recognized in Motlagh v. Motlagh. (16) During a divorce, initiated by the sponsoring spouse, the lower court concluded that the I-864 affidavit was not an obligation to pay defendant 125% of the federal poverty line and that the husband was only obliged to act as a “safety net.” This decision was reversed by the court of appeals, holding that the husband was required to satisfy his support obligation by paying whatever amount was necessary for the beneficiary spouse to reach the 125% mark, permitting consideration of all income sources that the beneficiary receives. The court explained that this could be achieved either through a spousal support order arising from the divorce proceedings or a separate I-864 support obligation enforcement action.

Other courts, however, go the opposite direction, finding the I-864 inadequate as grounds for spousal support. In 2014, an Intermediate Washington State Appeals Court shot down the Motlagh argument reasoning that the state’s statutory factors listed for consideration in awards of spousal support do not include an I-864 obligation. (17)

Creative lawyering in this area could help forge a new argument for Oklahoma clients seeking spousal support as more attorneys become aware of the ongoing obligations that the I-864 creates. The argument could also be used to defend against spousal support by pointing out that the obliging spouse will continue to face liability from federal agencies on behalf of any assistance his ex-spouse receives during whatever time remains under the 10-year pledge.

As the Oklahoma immigrant community continues growing, these family law arguments are likely to develop and grow as well, highlighting how many hats a divorce lawyer wears every day as we answer questions ranging from immigration policies to tax concerns. Knowing all these legal issues while balancing a client’s emotional stress during one of the hardest times of their lives makes for a well-rounded and well-in-formed family law practice.

ABOUT THE AUTHORS

Cassity B. Gies, associate attorney at Phillips Murrah, is passionate about family law. Her practice focuses on family law including divorce and separation, custody and child support issues. Her experience in immigration, domestic abuse, and employment law provide a comprehensive understanding of collateral matters relating to family law. She graduated summa cum laude from the OCU School of Law in 2019 as a Hatton W. Sumners scholar and represented her graduating class as the William Conger Distinguished Student.

Sajani “Ann” Zachariah immigrated to the United States in 1984 at 5 years old. She graduated from the OCU School of Law in 2011, joining Mazaheri Law Firm in 2012. She practices family law and immigration law, two areas in which she has personal experience.

 


ENDNOTES

    1. Persons Obtaining Lawful Permanent Resident Status By Type And Major Class Of Admission: Fiscal Year, U.S. Dept. Homeland Sec., 2014 to 2016, www.dhs.gov/immigration-statistics/yearbook/2016/table6, (last visited Sept. 16, 2019).
    2. Joshua A Krisch, “Mapping Americans’ Divorce Risk By State Paints an Unnerving Picture,” Fatherly, (June 7, 2018), www.fatherly. com/health-science/american-divorce-rate-state/.
    3. Id.
    4. I-485, Application to Register Permanent Residence or Adjust Status, U.S. Citizenship & Immigration Serv., www.uscis.gov/i-485, (last visited Sept. 16, 2019).
    5. Affidavit of Support, U.S. Citizenship & Immigration Serv., www.uscis.gov/greencard/affidavit-support (last visited Sept. 16, 2019).
    6. Id.
    7. Id.
    8. 8 U.S.C. §1183(a) (2009).
    9. Form I-864P, 2019 HHS Poverty Guidelines for Affidavit of Support, U.S. Citizenship & Immigration Serv., www.uscis.gov/i-864p (last visited Sept. 17, 2019).
    10. Id.
    11. Memorandum on Enforcing the Legal Responsibilities of Sponsors of Aliens, 2019 Daily Comp. Pres. Doc 201900334 (May 23, 2019).
    12. Poverty Guidelines, U.S. Dep’t Health & Human Serv., aspe.hhs.gov/poverty-guidelines (last visited Sept. 18, 2019).
    13. See Schwartz v. Schwartz, No. 04-CV-00770, 2005 WL 1242171.
    14. Erler v. Erler, 824 F.3d 1173, 1177 (9th Cir. 2016).
    15. Id.
    16. 100 N.E. 3d 937, 944 (Ohio App. 2d Dist.2017).
    17. In re Marriage of Khan, 332 P.3d 1016,

 

 

 

 

 

 

[UPDATE] SBA, Treasury extended the safe harbor repayment date for PPP loans

In its most recent update to the list of frequently asked questions (FAQs), the Small Business Administration (SBA) and Treasury Department extended the safe harbor repayment date for loans under the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The PPP application form requires borrowers to certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” In an effort to address this vague requirement, the SBA and Treasury issued guidance on April 23, 2020 specifying that, while the CARES Act suspends the requirement that borrowers be unable to obtain credit elsewhere, applicants must still certify in good faith that their PPP loan request is necessary. Specifically, FAQ 31 directs borrowers to consider current business activity and the ability to access other sources of liquidity.

The guidance initially provided a safe harbor provision that a borrower who applied for a loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed to have made the certification in good faith. The update issued on May 5, 2020 extends the repayment date for the safe harbor to May 14, 2020. According to FAQ 43, borrowers are not required to apply for the extension. FAQ 43 also states that the SBA will provide additional guidance on how it will review the certification.

Link to FAQs:  https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf


Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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SBA, Treasury update PPP reg guidance for laid-off employee forgiveness exclusion

The Small Business Administration and Treasury continue to issue guidance regarding the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The most recent update to the list of frequently asked questions (FAQs) addresses whether a borrower’s loan forgiveness amount will be reduced if one of the borrower’s employees turns down an offer to be rehired.

According FAQ 40, laid-off employees will be excluded from the forgiveness reduction calculation so long as the borrower made a good faith, written offer of rehire and the employee’s rejection of the offer is documented. The FAQ specifies that the offer must have been for the same salary/wages and the same number of hours. It also notes that employees who reject offers of re-employment may forfeit eligibility for unemployment compensation.

Link to FAQs:  https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf


Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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PM Director Kathy Terry featured in article about liability related to workplace reopening

Phillips Murrah Director Kathy Terry is featured as a source in a Journal Record article regarding liability that companies may face as Oklahoma begins to re-open as directed by Governor Stitt.

Kathryn Terry portrait

The emphasis of Kathryn D. Terry’s litigation practice is in the areas of insurance coverage, labor and employment law and civil rights defense. She also represents corporations in complex litigation matters.

From the story:

As thousands of businesses reopen their doors amid the COVID-19 crisis, they’ll be facing a new type of risk that could be even more devastating to them than a pandemic.

Oklahoma businesses could face lawsuits filed by customers claiming they contracted COVID-19 while in their restaurants, bars or showrooms, forcing court cases that could cost tens of thousands of dollars in legal fees.

“We’re going to see the lawsuits. Lots of lawsuits,” said Kathryn Terry, an attorney with Oklahoma City law firm Phillips Murrah.

The issue may be the latest tragic tranche to unfold in the coronavirus saga that has seen more than 60,000 U.S. deaths and millions of people out of work. Some say the legal fallout could continue long after the disease is a distant memory.

Terry said COVID-19 tort claims against businesses are not likely to be successful. Plaintiffs would have to clear a high bar to prove they contracted the virus from a specific business or from a specific person.

For businesses that are following government guidelines and operating safely, an unfavorable judgment is not necessarily the biggest risk. Their main concern is the legal fees they could face trying to defend themselves. For small businesses, the cost could be devastating.

Terry estimates fees in a COVID-19 liability case could range from $35,000 to $50,000.

You may contact Kathy at 405.552.2452 or by email at kdterry@phillipsmurrah.com.

Read the full story here: https://journalrecord.com/2020/04/30/legal-protection-lots-of-lawsuits-loom-as-oklahoma-businesses-prepare-to-reopen/

Business risk related to independent contractor unemployment claims under CARES Act

COVID-19 Contractor benefits header
In response to the COVID-19 national emergency, Congress has taken the extraordinary measure to allow independent contractors, gig-workers, and self-employed individuals access to unemployment insurance benefits for which they are generally ineligible. This article is geared towards businesses that regularly use independent contractors who may file claims for unemployment insurance benefits—discussing the risks involved and how businesses can mitigate those risks.

Martin J. Lopez portrait

Martin J. Lopez III is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Background Regarding Relevant CARES Act Provisions

On March 27, 2020 President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Among other provisions, the CARES Act significantly expands the availability of unemployment insurance benefits to include workers affected by the COVID-19 national public health emergency who would not otherwise qualify for such benefits—including independent contractors. This increased accessibility to unemployment insurance benefits theoretically provides an avenue for a state unemployment agency to find an independent contractor applicant to be an employee. Such a finding introduces the risk of the state unemployment agency assessing unpaid employment and payroll taxes for those a business previously treated as independent contractors. Tangentially, such a finding could serve to establish or bolster independent contractors’ claims in wage and hour litigation.

To qualify as a “covered individual” under the Pandemic Unemployment Assistance (“PUA”) provisions of the CARES Act, a self-employed individual must self-certify that she is self-employed, is seeking part-time employment, and does not have sufficient work history or otherwise would not qualify for unemployment benefits under another state unemployment program. Further, the self-employed individual must certify that she is otherwise able to work and is available for work within the meaning of applicable state law, but is “unemployed, partially unemployed or unable or unavailable to work” because of one of the following COVID-19 related reasons:

  • The individual has been diagnosed with COVID-19 and is seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or member of the individual’s household who has been diagnosed with COVID-19;
  • A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work;
  • The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;
  • The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The individual was scheduled to commence employment and does not have a job as a direct result of the COVID-19 public health emergency;
  • The individual has become the breadwinner or major support for a household has died as a direct result of COVID-19;
  • The individual has to quit his or her job as a direct result of the COVID-19 public health emergency;
  • The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.

If the individual meets the above criterion, she is a “covered individual” and is eligible for unemployment assistance authorized by the PUA provisions of the CARES Act. Such assistance was available beginning January 27, 2020 and provides for up to thirty-nine (39) weeks of unemployment benefits extending through December 31, 2020. Covered individuals’ unemployment benefits are calculated state-by-state, according to each state’s conventional unemployment compensation system. In addition, under the PUA provisions of the CARES Act, covered individuals may receive an additional $600 for each week of unemployment until July 31, 2020.

What Businesses Can Do to Protect Themselves

To counteract the risks discussed above, I recommend a business implement the following best practices when responding to a claim of unemployment by an independent contractor:

  • respond proactively to unemployment claim notices for independent contractors;
  • state clearly in the response that the relevant individual-claimants were independent contractors and not employees of the business;
  • affirmatively state that each independent contractor claimant was an independent contractor to whom the business occasionally (or routinely) provided work, but that it is unable to provide the same volume (or any) work to the individual at present because of the COVID-19 national emergency;
  • specify in the response that the individual’s eligibility for unemployment benefits must be entirely predicated on the PUA provisions of the CARES Act allowing for independent contractor participation in the program; and
  • provide the claimant’s independent contractor agreement to the state unemployment agency.

In providing this information and documentation to the state unemployment agency, the business will be able to demonstrate its independent contractor relationship with the individual. Together with the fact that these individuals’ eligibility to receive unemployment income rests exclusively on relevant CARES Act provisions, the business should be well-positioned to avoid the typical risks that can result from a successful unemployment claim by an independent contractor.


For more information on this alert and its impact on your business, please call 405.552.2418 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Horse Management Facilities: Mitigating risk during COVID-19

On March 25, 2020, Governor Stitt amended the Fourth Amended Executive Order 2020-07 (EO 2020-07) via a memorandum designating horse management facilities as critical infrastructure businesses.   With the critical infrastructure designation, it is imperative that horse management facilities now work to mitigate risks associated with operating during the COVID-19 pandemic.  Facilities must balance public health order compliance, horse owner expectations with safety while taking care of the horses stabled on their property.  The following outlines several proactive steps horse management facilities can take to manage risk while operating during the COVID-19 pandemic.

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Mary Westman is an attorney with Phillips Murrah. She also has an MBA, is a Morgan horse breeder and a registered nurse.  A native of West Virginia, she now lives with her husband, David, in Norman, Oklahoma. Click photo to visit Mary’s profile page.

First, implement best practice strategies designed to assist horse management facilities to continue to care and keep horses during a public health emergency and at the same time, protect the health of horse owners and barn workers.  Horse facilities are accustomed to biosecurity measures implemented to prevent the spread of contagious diseases among the horses on their property, but the COVID-19 outbreak presents unique challenges.  Biosecurity strategies designed to protect horses may not be enough to protect the humans who come onto the property.  To provide much needed direction to address this gap, on March 24, 2020, the Kentucky Department of Agriculture published guidelines for “Farm, Veterinary and Other Equine Activities.”

These guidelines incorporate the White House “Coronavirus Guidelines for America” and urge that the CDC website be monitored frequently for updates on best practices in mitigating the spread of the coronavirus among humans. In addition, the guidance includes best practice strategies for managing the daily care and keep of horses, cleaning equipment and surfaces, as well as managing communication, employees and medical procedures. Lastly, horse facilities should implement a schedule for horse owners to visit the facility with the aim of decreasing the number of people on the property so that proper social distancing can be accomplished.

Second, incorporate best practices for COVID-19 mitigation into barn rules and disseminate them to your clients, vendors and employees.  Utilizing email, social media and other forms of electronic communication will support social distancing efforts and model best practice.  Posting barn rules in prominent locations throughout the facility will also serve to disseminate important health and safety rules.

Next, review and revise your stable liability waiver to include illnesses contracted from communicable disease.  To begin, if you are an equine professional or own an equine facility, it is important to understand that “Oklahoma Livestock Activities Liability Limitation Act” (the Act) does not provide unlimited protection from liability.  The Act can be broken down into three parts.  First, the Act provides liability protection from “injuries” resulting from the “inherent risks of livestock activities.”  Second, the Act provides protection when the equine professional is acting in good faith, and third, the Act provides protection when the equine professional acts consistent with recognized industry standards.  You should understand the Act provides liability protection from “injuries” but does not reference “illness.”  Moreover, the Act specifically does not limit liability from death resulting from the “inherent risks of livestock activities.”

Additionally, reliance on liability insurance policies is a risky approach.  Most homeowner policies will not cover equine related operations absent a care, custody and control rider (CCC rider).  Unfortunately, even a with a CCC rider, or even a separate commercial general liability policy, may be of no use during pandemics.  In fact, such insurance policies generally exclude illnesses contracted from communicable disease. To determine if your liability insurance policy covers illness contracted from communicable disease, contact your insurance agent.

Since we have established the Act does not provide unlimited liability protection and most liability insurance policies exclude illness contracted from communicable disease, do you need a written liability release?  Simply put, yes.  As mentioned above, liability protection is limited, and the Act specifically carves out certain events that would not be protected by the statute.  According to Oklahoma law, parties can agree, in writing, to extend the limitation of liability.

Most equine facilities utilize written liability releases, but will these releases achieve complete protection particularly in the context of a communicable disease such as COVID-19?  Well, it depends.  In a 2012 Oklahoma case, Brown v. Beets, a trial court dismissed a personal injury negligence claim related to an injury from a horse kick because the riding participant had signed a liability release.  However, on appeal, Oklahoma Court of Civil Appeals reversed the trial court decision.  The appeals court found a dispute as to whether or not the trail ride leader had used reasonable effort to determine the ability of the riders and whether or not the trail ride leader had followed industry standards. This case would seem to imply that if an equine professional fails to determine the ability of the potential rider/participant, fails to match to the right horse based on the rider/participant’s ability, and fails to adhere to industry standards, a liability release may not be effective in limiting liability.  In light of this Court decision and with regard to operating during the COVID-19 outbreak, it is critical that horse management facilities implement and adhere to best practices (such as the COVID-19 guidelines referenced above) to ensure that properly drafted stable liability waivers will give maximum liability protection.

Also, because a liability release or waiver is a contract, principles of contract law apply.  Liability releases should be clear and definite.  We also know that Oklahoma law requires the liability release to be in writing, and of course, a minor cannot sign a liability release form.  A parent, ideally both parents, or guardian(s) must sign a liability release when a minor engages in an equine activity.  The question of whether the release should include a helmet requirement is a topic for another article.

The take-a-way here is a stable liability release or waiver is necessary to fill in gaps related to the Act but may not completely release you from liability if you are otherwise negligent or fail to follow industry standards to include the standards related to combating COVID-19.  Liability releases could also prove to be ineffective for other reasons for example lack of specificity or clarity.

In conclusion, as of March 25, 2020, Oklahoma designated horse management facilities as critical infrastructure businesses.  With this designation comes the responsibility to continue to care and keep horses during a public health emergency and at the same time, protect the health of horse owners and barn workers.  Horse management facilities can proactively take steps to manage risk while operating during the COVID-19 pandemic such as implementing best practice guidelines for preventing the spread of COVID-19; communicating barn rules; and implementing stable liability waivers that include a waiver of liability for illnesses contracted from communicable diseases. We will get through this current crisis, but we must learn, adapt and implement best practices for future situations.


For more information on this alert and its impact on your business, please call 405.237.8737 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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FAQs: Impact of Covid-19 On Commercial Real Estate

2020 Coronavirus Guidance header 2

By Phillips Murrah Directors Sally A. Hasenfratz and Bobby Dolatabadi, and the Real Estate Practice Group 

The impact of COVID-19 on the commercial real estate industry is unprecedented. We have been asked a broad range of questions as a result of the pandemic, some of which include:

What if a tenant cannot pay rent?

Many landlords and tenants are seeking counsel about what happens if a commercial tenant cannot pay rent. Some considerations include:

Are commercial transactions being closed?

  • Many commercial purchase and sale transactions have reached a screeching halt, with buyers terminating agreements and lenders having underwriting concerns. Often buyers are terminating during an inspection period where they are entitled to a return of earnest money. In instances where an inspection period is not available or has expired, buyers are looking for conditions precedent to closing, such as a material adverse change, which would excuse performance. Otherwise, on a unilateral termination, buyers may face a loss of earnest money or trigger a default under the agreement.
  • For some transactions that appear to be moving forward, there remains uncertainty as to whether the County recording offices will be open at the time of closing for the filing of deeds, loan instruments, and other closing documents. Accordingly, parties should consult with their title companies and underwriters in order to determine if and how the title company will facilitate a closing in the event of a shutdown of the recording office.  Also paramount will be issues relating to “gap coverage” as a result of potential delays between closing and recording documents, as well as use of online remote notaries and other logistics for closings.
  • Most purchase and sale agreements contemplate a specific list of closing deliveries for each party, together with a “catch-all” requiring such other documents as are reasonably requested by the other party and/or title company. In light of the uncertainties regarding whether a recording office will be open or shut-down on the closing date, title companies may require new, additional indemnities and covenants from the parties at closing in order to achieve closing, which documents may prohibit, for instance, a seller (whom still may appear in the real estate records as the fee owner) from executing any other conveyances concerning the property. Parties should consider expanding the “catch-all” clause accordingly.
  • For transactions that are teetering, sellers and buyers should consider agreeing to extend the inspection period or the time to close to let the pandemic subside prior to any such closing. Any such extensions should be in writing.
  • In lieu of closing or extending, buyers may move to the sidelines, waiting for values to decline and proceeding after the pandemic is resolved.

How are lenders and borrowers handling the consequences of the pandemic?

  • Bank regulators have provided guidance encouraging financial institutions to cooperate with customers dealing with the adverse economic effects of COVID-19.
  • For borrowers unable to make debt service, we are seeing short-term accommodations, such as interest only or reduced payments for 3 months, with full payments continuing after that time.
  • Should the pandemic prove to have more long-term effects, we would expect to see forbearance agreements, workouts and bankruptcies. Time will tell whether these more drastic measures will be necessary. If so, the tax consequences of these arrangements should not be ignored.
  • Prior to exploring any of these options, it is prudent to thoroughly review all loan documents, with emphasis on restrictions on transfer, default, notice and cure and force majeure provisions.
  • For non-recourse loans, documents should be thoroughly reviewed so as not to inadvertently trigger recourse liability. For example some non-recourse loans have “bad boy” carve-outs which trigger full or partial recourse liability to borrowers and guarantors where a borrower (i) admits in writing the inability to pay its debts as they come due; or (ii) makes a “transfer” which is not permitted by the loan documents. A “transfer” is often broadly defined as including making amendments to lease agreements without the lender’s consent. Accordingly, borrowers should exercise caution in taking actions to renegotiate loan documents or compromise lease obligations, which in certain circumstances, could trigger recourse liability.

Are Force Majeure clauses available to delay or terminate performance obligations?

  • Force Majeure clauses are contractual clauses that extend or in some instances terminate performance obligations when “acts of god” or other named events prevent or delay a party’s ability to perform their obligations. Force Majeure clauses appear in many, but not all, types of real estate contracts and such clauses are limited to the exact language, which may not be standard from agreement-to-agreement and in most cases don’t appear broad enough to include the current pandemic situation. For example, Force Majeure clauses are typically not in short-term agreements such as purchase and sale agreements, but may be included in loan agreements, leases, construction agreements and the like.
  • Each Force Majeure clause should be carefully reviewed to determine whether it applies in this situation and if so, whether any notices need to be given to the parties under the agreement.
  • Use of Force Majeure clauses in the future should be considered, with expressly including references to epidemics, pandemics or other health related crises beyond the control of the parties.

What else should be considered in light of the pandemic?

  • Business interruption insurance policies should be reviewed to determine whether there may be coverage.
  • For property management, responsibility should be evaluated to identify whether there are special duties to maintain health and cleanliness.

For more information on how the COVID-19 pandemic may affect your business, please contact:

Portrait of Sally A. Hasenfratz

 

Sally A. Hasenfratz
Director
405.552.2431
EMAIL

 

 

Portrait of Bobby Dolatabadi

 

Bobby Dolatabadi
Director
405.606.4742
EMAIL

 

 


Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Q&A about SBA Loans related to the newly passed CARES Act

2020 Coronavirus Guidance header 2

By Attorneys Alison J. Cross & Kara K. Laster

CARES Act: SBA Loans Q&A

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Small business owners, in particular, are anxious to receive relief under the Act. The Small Business Administration (SBA) is implementing regulations regarding the historic legislation. Even though the program is to kick off April 3, some details reportedly remain to be worked out and finalized. Below is a summary of what we know, currently:

What types of SBA loans are available to businesses related to COVID-19?

The CARES Act expanded both the SBA’s existing loan program under Section 7(a) of the Small Business Act, referred to as the Paycheck Protection Program (“PPP Loans”), as well as its Economic Injury Disaster Loan Program (“EIDL Loans”).

Can a business apply for both types of loans?

Yes, but only under very limited circumstances:

  • A recipient of an EIDL Loan made between January 31, 2020 and June 30, 2020 is eligible for a PPP loan during the covered period.
  • The funds from a PPP Loan cannot be used for the same purpose as another SBA loan.

What other relief can a business get under the CARES Act?

Businesses may also receive an Emergency Economic Injury Grant of $10,000 provided within three days of application for an EIDL Loan and no requirement to repay the advance even if the EIDL Loan is ultimately declined.

Paycheck Protection Program

When can I apply for a PPP Loan?

Small businesses and sole proprietorships may apply beginning April 3, 2020, while independent contractors and self-employed individuals may apply beginning April 10, 2020. Businesses should apply as soon as possible because there is a funding cap. The deadline to apply for a loan is June 30, 2020.

Where can I apply?

Any SBA-certified lender can make a loan. Additionally, any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating can make a loan.

Who is eligible for a PPP Loan?

Businesses (a) with no more than 500 employees per physical location, (b) that were operational prior to February 15, 2020, and (c) that had employees on payroll and paid wages and payroll taxes are eligible.

How is the loan amount determined?

Businesses may receive the lesser of (a) 2.5 times the average monthly payroll costs during the prior year or (b) $10,000,000.

What line item expenses are included in monthly payroll costs?

Each of the following is a line item expense included in the calculation of payroll:

  • Salaries, wages, commissions, vacation and sick pay (not to exceed $100,000 per employee) and exclusive of qualified sick or family leave
  • Group health insurance
  • Retirement benefit costs
  • State/local taxes on employee compensation
  • Self-employed income (and subcontractors) not to exceed $100,000 per year

How can PPP loan funds be used?

Businesses may use the loans for payroll costs, health care, interest on mortgage payments, rent, utilities, and interest on any other debt.

What do I need to show when I apply?

Businesses must certify that (a) the uncertain economic conditions make the loan necessary to support ongoing operations, (b) the funds will be used to retain workers and maintain payroll, or make mortgage payments, lease payments, and utility payments, (c) the business does not have an application pending for a loan under Section 7(a) for the same purpose, and (d) that the business has not received funds under Section 7(a) between February 15, 2020 and December 31, 2020 that would be duplicative.

What do I need to apply?

Businesses will need to submit a Paycheck Protection Program loan application along with payroll documentation to an approved lender.  The application can be accessed HERE.

 What are the terms of the loan?

  • There are no personal or collateral guarantee requirements, as well as no prepayment penalty. Payment obligations are deferred for six months to one year.
  • There is no requirement that a business try to obtain funds from other sources.
  • Maximum interest rate and term loan to be finalized.

 Can the loans be forgiven?

Yes, but only certain payments made during the first eight weeks of the loan are eligible for forgiveness. The funds must be used for payroll costs, excluding employees who have an annual salary over $100,000. Additionally, funds used for interest on debt obligations and rent and utilities in place before February 15, 2020 may be forgiven. The amount forgiven will decrease in proportion to a reduction in the number of employees as well as a reduction in compensation in excess of 25% for employees making less than $100,000 annually. Lenders must respond to a request for forgiveness within 60 days.

Am I still eligible for forgiveness if I already laid off my employees?

If a business rehires employees who were laid off by June 30, 2020, it still qualifies for forgiveness.

Can a business receive both an employee retention tax credit and a PPP loan? 

No.

Economic Injury Disaster Loan Program

Who is eligible for an EIDL loan? 

Businesses with no more than 500 employees in existence as of January 31, 2020 who have suffered substantial economic injury from COVID-19 are eligible.

How is the loan amount determined?

Businesses may receive up to $2,000,000 with interest rates of 3.75% for small businesses and 2.75% for nonprofits. Loan amounts are based on actual economic injury.

How can EIDL loan funds be used?

Businesses may use the loans for working capital.

Who makes the loans?

Applications for EIDL Loans should be submitted directly to the SBA.

Will someone need to guarantee the loan? 

No, so long as it is made before December 31, 2020 and loan is $200,000 or less.

Mid-Sized Businesses

What if my business has more than 500 employees?

The CARES Act also provides relief to businesses with between 500 and 10,000 employees. These mid-sized businesses are eligible for direct loans under the Emergency Relief and Taxpayer protections part of the CARES Act.

What do I need to show to receive this type of loan?

Businesses must certify that (a) the uncertain economic conditions make the loan necessary to support ongoing operations, (b) the funds will be used to retain at least 90% of the workforce at full compensation and benefits until September 30, 2020, (c) the business will restore not less than 90% of the workforce that existed as of February 1, 2020 with compensation and benefits no later than four months after the termination of the public health emergency, (d) the business has significant operations and employees in the United States, (e) the business is not a debtor in a bankruptcy proceeding, (f) the business is incorporated in the United States, (g) the business will not pay dividends or repurchase any equity security while the loan is outstanding, (h) the business will not outsource jobs for the term of the loan and for two years after repaying the loan, (i) the business will not abrogate existing collective bargaining agreements for the term of the loan and for two years after repaying the loan, and, finally, that (j) the business will remain neutral in any union organizing effort for the term of the loan.

What are the terms of the loan?

The maximum interest rate is 2%. No payments due for at least six months after a direct loan is made.

Can the loans be forgiven?

No. Unlike PPP loans, direct loans under this program may not be forgiven.


For more information on how to navigate the process of obtaining an SBA loan, please contact:

IN DALLAS

Phillips Murrah attorney Alison Cross

 

Alison J. Cross
Director
214.613.0585
ajcross@phillipsmurrah.com

 

IN OKLAHOMA CITY

Phillips Murrah attorney Kara Laster

 

Kara K. Laster
Attorney
405.606.4762
kklaster@phillipsmurrah.com

 


Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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