NewsOK Q&A: Child support payments based on several variables

Robert K. Campbell’s legal practice is focused in the area of family law, specifically concentrated in matters of divorce, legal separation and custody issues.

In this article, Oklahoma City Attorney Robert K. Campbell answers questions about the basics of arranging and handling child support.

Who pays child support in a divorce proceeding?

Oklahoma law requires both parents to provide financial support for their children during a divorce. That being said, typically it is one parent paying the other parent. There are, however, situations wherein neither parent may owe the other parent child support.

How is the amount of child support calculated?

The child support amount is calculated based upon the Oklahoma Child Support Guidelines. The Oklahoma Child Support Guidelines will calculate the child support obligation of each parent.

What does the Oklahoma child support calculation take into consideration when determining the amount of child support?

There are several variables that go into the Oklahoma Child Support Guideline calculation. The primary variables determine the base child support amount consist of the parties’ gross monthly income, the number of minor children of the parties, and the number of overnights each parent has with the children. There are other variables that can be taken into consideration. A common example of these are health insurance premiums and child care costs.

What is considered gross income for child support purposes?

Oklahoma’s definition of gross income is broad and intended to include earned income and passive income. Gross income consists of wages, salaries, tips, commissions, bonuses, etc. Passive income can include dividends, pensions, rent, interest income, trust income, gifts, gambling winnings, lottery winnings, etc.

If both parents agree, can the child support agreement differ from the Oklahoma Child Support Guidelines calculations?

Typically, an agreed amount other than the guidelines will likely be approved if it is in the best interest of the minor child and the amount of support indicated by the guidelines is unjust or inappropriate under the circumstances; both parties are represented by counsel and have agreed to a different amount; or one party is represented by counsel and the deviation benefits the unrepresented party.

How long does a parent have to pay child support?

In Oklahoma, the law typically provides that a child is entitled to support by the parents until the child reaches the age of 18, or graduates high school, whichever occurs later; however, it shall not extend beyond the age of 20. There are certain situations where the law may provide support to an adult child with a disability beyond the age of majority. If you are paying support for more than one child, your payment amount does not drop automatically when one child no longer qualifies for support. You must take affirmative steps to recalculate future support for the remaining child or children and ask the court to enter a revised support order. When the last child no longer qualifies for child support, the support obligation ends if there is no past due support owed.

Can child support be modified?

Yes. In Oklahoma, either parent may request a modification of the amount of child support based upon a “material change in circumstances.” The increase or decrease in either parent’s income may constitute a material change in circumstances warranting a modification.

What happens if a parent who is ordered to pay child support fails to pay?

The parent who fails or refuses to pay their child support obligation can be cited for indirect contempt of court, which if found guilty can result in a $500 fine and/or up to six months in jail. Additionally, state licenses can be revoked, suspended or not renewed.

 

Robert K. Campbell is a family law attorney with Phillips Murrah.

Gavel to Gavel: Employers should examine paid parental leave policies

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on July 18, 2019.


Phillips Murrah litigation attorney Hillary Clifton discusses holiday legal hazards.

Hilary Hudson Clifton is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters. Click photo to visit her attorney profile.

By Phillips Murrah Attorney Hilary Hudson Clifton

The notorious absence of any federally mandated paid family leave in the United States was a significant issue during the 2016 presidential election. Recent legislative proposals indicate that the issue will only gain steam through 2020 and beyond. Paid family leave is not a partisan issue, as demonstrated by legislators on both sides of the aisle introducing bills in 2019, including Marco Rubio and Kirsten Gillibrand.

With parental leave policies under particular scrutiny, it is a good idea for employers to examine their existing policies. As it looks ever more likely that paid leave will be federally mandated in the not-too-distant future, now might be the right time for employers without a paid leave policy to consider implementing one.

Though some states have passed laws requiring paid family leave benefits, Oklahoma is not among them, and employers in Oklahoma currently offering paid leave to new parents do so voluntarily. Still, employers could find themselves in legal trouble if their policies impermissibly distinguish between different classes of parents. For example, while it might be tempting to offer a certain period of paid maternity leave to a mother, and a different period of paternity leave to a father, employers must be careful to draft policies that do not discriminate on the basis of sex, sexual orientation, and other potentially protected categories.

Paid leave to care for a new child, sometimes referred to as bonding time, should apply equally to all new parents, including biological mothers and fathers, adoptive parents, and same-sex couples. However, with biological mothers requiring medical attention and recovery time related to pregnancy and childbirth, it is not discriminatory to offer biological mothers an additional period of paid leave, provided the policy specifies that such leave is for the mother’s medical/physical needs.

Increasingly, employers around the country are opting for generous leave policies to attract and retain qualified employees. In that regard, employers considering a policy that offers a birth mother significant paid leave for recovery but little time for bonding and childcare might consider whether such a policy could encourage fathers or adoptive parents to look elsewhere for job opportunities.

With no federal or state mandate in Oklahoma, there remains room for any employer to adopt a policy in line with its particular needs and preferences. That said, well-intentioned employers should take measures to avoid inadvertent discrimination in their policies.

Hilary H. Clifton is a litigation attorney with the law firm of Phillips Murrah.

Potts: How to determine whether to hold or terminate an oil and gas lease

Morgen Potts Attorney

Morgen Potts is an attorney in the Energy & Natural Resources Practice Group. She represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

When a landowner leases property to an energy company, the lease agreement typically contains a held-by-production provision, also known as a habendum clause. In Oklahoma, habendum clauses in oil and gas leases establish that after the primary lease term has ended, the lease shall remain in force as long as the land is capable of producing a minimum amount of oil or gas. But how do courts decide whether to hold or end such a lease?

Habendum clauses typically describe the lease term as, “from the date hereof and as long thereafter as oil or gas … is produced from said land.” When the term “produced” is used in a “thereafter” provision of the habendum clause, it has been determined by courts to mean production in “paying quantities.”

However, “paying quantities” is not determined by a specific dollar amount. Rather, it is defined as an amount of production sufficient to yield a profit to the lessee beyond lifting expenses, which include costs of operating the pumps, gross production taxes and electricity.

To determine whether a lease is commercially producing and, therefore, may be held by production, there are four factors that courts take into account: the accounting period, revenue during that period, expenses during that period, and equitable considerations.

The accounting period chosen for any production analysis varies and is determined by examining facts and circumstances specific to the lease. Accounting periods can make or break a case when trying to ascertain whether there was production in paying quantities. Thus, to reflect the production status, it is crucial to determine a sufficient amount of time that would provide information that would allow a “reasonable and prudent operator” to decide whether to continue or cease operation.

For example, in Hoyt v. Continental Oil Co., the accounting period was 14 months. In Smith v. Marshall Oil Corp., the accounting period was 35 months.

Once an accounting period is established, all revenue generated by the lease during that period is considered. Next, lifting expenses are considered and compared against revenue to see which is greater. However, this consideration does not include overriding royalties, overhead, and depreciation.

Lastly, if the lease is unprofitable, the court will examine any equitable considerations to determine if any justify maintaining the lease. These considerations are very specific to the circumstances of the lease that may affect profitability, which could include market conditions, changes in public policy, pipeline access, and conflict resolution activity.

If, after examining all factors, it is determined that the lease is returning a profit over lifting expenses, the lease will not be vulnerable to termination and shall be allowed to continue beyond the primary lease term.

Morgen D. Potts is an attorney with Phillips Murrah in the Energy and Natural Resources Practice Group.

NewsOK Q&A: Deadline Monday for pharmacies’ annual inventory of controlled dangerous substances

attorney Martin J Lopez III

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.

In this article, Oklahoma City Attorney Martin J. Lopez III discusses requirements pharmacies must abide by when submitting inventories and the consequences they may face if they neglect to do so.

There seems to be increasing regulation of pharmacies in recent years, and this has been heightened by the responses to the opioid crisis. What are the various inventory requirements of the Oklahoma State Board of Pharmacy (OSBP)?

According to state regulation, and because of the dangerous propensities of these controlled medications, OSBP requires pharmacies to perform inventories much like any retailer, although there are some distinctions based upon the nature of the pharmacy’s product. The regulation, Oklahoma Administrative Code 535:15-3-10, sets forth four distinct circumstances where inventories must be performed: The first is an annual inventory of controlled dangerous substances (“CDS”). Most relevant for all pharmacies at this particular time, the OSBP requires an inventory of all CDS be performed between May 1 and July 1 of each year; this annual inventory must be included with the pharmacy’s annual license renewal application. This annual license renewal application must be in writing, must contain the names of the pharmacy’s owners and shall provide any other information deemed relevant by the board — including the CDS inventory. Inventory is required for a Change of Ownership or a change of the Pharmacist-in-Charge (PIC) and must be sent to the board within 10 days. The OSBP requires the inventory include the new manager’s name and registration number and recommends that it include the outgoing manager’s name, registration number, and current place of employment. The OSBP further recommends that both the incoming and outgoing managers sign the inventory. Inventory also may be triggered by circumstances such as theft. In the case of suspected loss, theft, or other event, the OSBP may require an inventory be performed and sent to the board within ten days of the completion of the inventory. Inventory is also required when a pharmacy closes and must be sent to the board within 10 days of the pharmacy’s closing.

What is a controlled dangerous substance for the purposes of the annual inventory to be performed between May 1 and July 1?

Generally, a CDS is a drug, substance or immediate precursor (a substance that serves as a chemical intermediary to manufacture a controlled dangerous substance) in Schedules I through V of the Oklahoma Uniform Controlled Dangerous Substance Act, found at Title 63, Sections 2-203 through 2-212 of the Oklahoma Statutes; these Schedules range from those with high potential for abuse and no accepted medical use (includes many “street” drugs like heroin) to those with low potential for abuse and which are accepted for medical use (such as pseudoephedrine—such as brands commonly known as Sudafed PE and Allegra D.

What happens if a pharmacy misses or fails to complete an inventory or doesn’t perform or submit the inventory on time? For example, what happens if a pharmacy doesn’t perform inventories of its controlled dangerous substances between May 1 and July 1?

If a pharmacy fails to comply with the annual CDS inventory, both the PIC and the pharmacy itself are deemed to have violated the administrative code. A violation of the administrative code amounts to a violation of the Oklahoma Pharmacy Act, over which the OSBP may take a number of actions, including a reprimand, probation, suspension, permanent revocation of a pharmacy’s license, or other disciplinary action in its discretion; the OSPB also can levy fines up to $3,000.

Martin J. Lopez III is an attorney with Phillips Murrah law firm.

Possible Relief for FMLA Administration Pain Points

By Janet A. Hendrick and Matt Andrus
June 24, 2019

It’s no secret that employers have found administration of leave under the Family and Medical Leave Act to be a significant pain point. Relief, however, may be on the way.

In a spring regulatory agenda notice, the U.S. Department of Labor announced that it is considering making some changes to the FMLA. The Department has asked the public for feedback on how to:

“(a) better protect and suit the needs of workers; and (b) reduce the administrative and compliance burdens on employers.”

Although DOL has released no specifics, many believe that the White House’s labor policy adviser, James Sherk, will be the driving force behind any upcoming changes.  Sherk’s earlier outspokenness about the shortcomings of the FMLA provides good insight into his thoughts about what needs to change.

In his 2007 Heritage Foundation report, Sherk outlined his views on employee FMLA abuse. His report portends changes could be on the horizon that will:

  • narrow the definition of what constitutes “a serious health condition;”
  • provide more power to employers to investigate an employee’s condition;
  • allow employers to require workers to take leave in half-day, rather than smaller, increments; and
  • allow employers to count FMLA leave against attendance bonus policies.

What changes could mean for employers

If Sherk really is the man behind the plan, employers may get the relief they seek.

First, limiting the definition of “a serious health condition” should make it more difficult for employees to abuse the FMLA. In his report, Sherk highlighted several instances where “irresponsible” employees were taking advantage of the current vague definition by calling routine colds, stress, or even an injured toe a “serious health condition”—even when the condition has no impact on the employee’s ability to perform job duties. This would also help to lessen the burden on other employees who are required to pick up the slack when co-workers abuse FMLA.

Second, providing employers with more power to investigate employees’ conditions would resolve the communication barrier between employers, employees, and health care providers when issues surrounding the complex and lengthy paperwork arise—satisfying the goal of reducing administrative burdens.

Third, allowing employers to require workers to take leave in half-day increments would decrease the heavy administrative burden of tracking an employee’s leave in minute increments. Rather than tracking the 12-weeks of allowed FMLA leave a minute at a time, a more manageable tracking unit of half-day increments would make what once was a monumental task for employers more manageable.

Finally, allowing employers to count FMLA leave against attendance bonus policies would both help employees with favorable attendance not feel cheated when those with spotty attendance are nonetheless rewarded and incentivize employees not to abuse FMLA. The DOL has found that because an employer may not punish an employee for using FMLA, even workers who miss 50 days a year due to FMLA leave can still be eligible for a perfect attendance bonus, diluting the incentive these bonuses are intended to provide. Correcting this would allow employees with excellent attendance to reap due awards and hit FMLA abusers where it hurts—their bank account.

Conclusion

While employers will have to wait for definite answers as to what changes, if any, we will see, the good news is that it appears that employer concerns about FMLA abuse are not falling on deaf ears. In the meantime, employers should continue to monitor the situation and hope that relief is on the way.


Janet Hendrick Profile portrait

Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick, who represents and counsels employers on issues including proper classification, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

Matt Andrus is a second-year law student at Oklahoma City University and works as a law clerk for Phillips Murrah during Summer 2019.

NewsOK Q&A: Federal income tax challenges for medical marijuana businesses in Oklahoma

Jessica Cory web

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

In this article, Oklahoma City Attorney Jessica N. Cory explores the conflict between federal and state law as it pertains to medical marijuana businesses.

What is the primary federal tax issue for Oklahoma medical marijuana businesses?

Jessica Cory, attorney with Phillips Murrah law firm answers: The primary tax issue for Oklahoma medical marijuana businesses stems from the conflicting treatment of the marijuana industry under federal and state law. Although the approval of State Question 788 last summer legalized the use, growth and sale of medical marijuana for state purposes, marijuana remains an illegal drug under the federal Controlled Substances Act. Special tax provisions apply to penalize anything deemed illegal drug trafficking under federal law, including licensed medical marijuana businesses.

What are the specific federal tax burdens a medical marijuana business will face?

Internal Revenue Code Section 280E represents the biggest tax challenge for medical marijuana businesses. Generally, the Internal Revenue Code allows a taxpayer to take a deduction for all “ordinary and necessary” business expenses paid or incurred during the taxable year. Congress has created an exception to this rule in certain instances, however.

One such exception is Code Section 280E, which prohibits a taxpayer engaged in the business of “trafficking in controlled substances” from taking a deduction for ordinary business expenses. Because the federal Controlled Substances Act defines marijuana as a Schedule I drug, Code Section 280E severely limits the types of deductions available to a medical marijuana business.

Although Code Section 280E prevents a marijuana business from taking normal business deductions, it does not bar a business from offsetting its gross receipts with its cost of goods sold (“COGS”). This means a business can at least reduce its potential taxable income by its direct costs of production. However, the Internal Revenue Code has issued guidance strictly limiting the types of costs a taxpayer engaging in a marijuana business can allocate to COGS, to prevent an end-run around Code Section 280E.

Case law supports this narrower interpretation of COGS for the marijuana industry, including prohibiting resellers of marijuana from including any indirect costs — costs other than the price paid for inventory plus any transportation or other necessary acquisition costs — in COGS.

Is there anything marijuana business owners can do to minimize their federal tax burden?

Yes, a tax professional can help marijuana businesses develop strategies for minimizing the impact of Code Section 280E. For example, a tax adviser can help a business differentiate between COGS and business deductions to take full advantage of the COGS offset allowed under federal law. In addition, a tax professional may be able to help a company structure its business to separate out its different activities to avoid having Code Section 280E apply too broadly. It is also essential for marijuana businesses to keep careful records, particularly if the business also engages in additional activities unrelated to growing, processing or selling marijuana.

Has there been any effort in Congress to fix the disparity in treatment under federal and state law?

Members of Congress have repeatedly introduced legislation to exempt marijuana businesses lawfully operating under state law from the parameters of Section 280E. For example, the Strengthening the Tenth Amendment through Entrusting States (“STATES”) Act, which would amend the Controlled Substances Act to protect people operating within the bounds of state cannabis laws, was recently reintroduced. Unfortunately, despite bipartisan support and the backing of several 2020 presidential candidates, the odds are not in favor of passage at this time.

Jessica Cory is an attorney with Phillips Murrah law firm.

Gavel to Gavel: Who should define the terms of an oil and gas lease?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on May 30, 2019.


Molly Tipton

Molly Tipton is an attorney in the Energy & Natural Resources Practice Group. She represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

By Phillips Murrah Attorney Molly E. Tipton

Whose job is it to determine which expenses can be deducted from royalty payments under the terms of an oil and gas lease? Is it the lessee or the operator? People argue both positions and all parties desire clarity in who bears this burden.

Unfortunately, there are many interpretations of the differing forms of deductions language in leases, and the courts have not had the opportunity to make a decision. Many operators have recently requested input from the lessee on royalty valuation, but some lessees may balk at this idea because current practice typically provides that the operator cuts the checks.

Pursuant to 52 O.S. § 570.8(A), a working interest owner in a gas well shall furnish to the operator the name, address, royalty interest, taxpayer identification number, and payment status of royalty interest owners for whom they hold a lease. While this language does not place the burden on the working interest owner to tell the operator how royalty proceeds should be valued under the terms of the lease, it is understandable that an operator wishes for input from the lessee, as they are a party to the lease.

However, when an operator asks a lessee to determine how royalty proceeds should be valued under the terms of the lease, the lessee may fear liability to the royalty interest owner in the event that the operator is paying the royalty contrary to how the lessor interprets the terms of the lease.

The lessee should take comfort in the language in 52 O.S. § 570.9(D), which states that any working interest owner that pays or causes to be paid royalty proceeds for gas production in accordance with the Production Revenue Standards Act valued according to the terms of such working interest owner’s lease shall be relieved of all liability to the royalty interest owners for any further payment of proceeds from such production.

The valuation of royalties will affect both the royalty owner and the lessee, and without any guidance from the courts, there is no definitive answer as to who should define the exact terms of the lease. One can understand why neither the operator, nor the lessee, wants the burden of defining the lease terms, as they affect royalty deductions. Only time will tell whose job it is after all.

NewsOK Q&A: #MeToo movement reaches merger transactions

Erica K. Halley

Erica K. Halley represents individuals and businesses in a broad range of transactional matters.

In this article, Oklahoma City Attorney Erica K. Halley discusses the “#MeToo” movement and the Weinstein Clause as they relate to requirements in buying and selling companies.

What is the #MeToo movement and how did it start?

In October 2017, The New York Times published an article detailing decades of sexual misconduct by film producer Harvey Weinstein. The scandal ultimately left Weinstein disgraced, his film studio bankrupt and victims of sexual harassment and assault emboldened. The #MeToo movement ensued, wherein victims tweeted (or otherwise went public with) their experiences, which highlighted the prevalence of such misconduct in the workplace. As a result, the chickens have come home to roost for many predators in power. This means, among many other things, companies must adapt and prepare for the potential PR and legal nightmare that necessarily follows misconduct allegations against employees, particularly those having influence over compensation, promotions/demotions and workplace culture. One way we see the #MeToo movement in the doldrums of corporate paperwork is through what is becoming known as the “Weinstein Clause” in merger and acquisition agreements.

What is a Weinstein Clause?

When a company is sold or merged, the selling company is typically required to make a litany of representations to the buyer concerning the status of the selling company. A Weinstein Clause is a representation made by the selling company where the seller promises that none of the selling company’s employees is the subject of allegations of sexual misconduct. In its broadest form, a seller represents that no allegations of sexual harassment or misconduct have been made to the company against any individual in his or her capacity as an employee of the company or any of its affiliates. Usually, if a seller makes a false representation, the buyer can sue the seller for all damages resulting from the breach.

How do sellers negotiate Weinstein Clauses in M&A transactions?

Just like any representation in an M&A (merger and acquisition) transaction, sellers will try to limit the scope of the representation by adding knowledge qualifiers (ex: to the seller’s knowledge, there are no sexual harassment or misconduct allegations), defining or reducing the look-back period (ex: the seller represents that there have been no allegations in the past five years) and minimizing the number or type of employees subject to such allegations (ex: the seller represents that there have been no allegations against executive level employees). In addition, the lawyers on both sides will probably spend time negotiating the definitions of “sexual harassment” and/or “sexual misconduct,” as such terms are open to interpretation and, therefore, ambiguity. After the representation itself is determined, if the seller is aware of any such allegations, the seller will try to negotiate an exception to the representation and describe the allegations on a schedule attached to the agreement. In this case, the seller is essentially saying, “except for that one time, which buyer is going to overlook, there have been no allegations of sexual harassment/misconduct.”

Why should people care?

The Weinstein Clause itself will probably not have a noticeable impact on the viability or essential terms of M&A transactions. And most people will probably never lose sleep over how broadly or narrowly any Weinstein Clause is negotiated. However, everyone is affected by companies (some more directly than others), and most companies are led by individuals who have power and influence over other employees. The emergence of the Weinstein Clause is indicative of a broader social change. The Weinstein Clause provides evidence that sexual harassment and misconduct by such individuals is not tolerated, safe and respectful company cultures matter, and victims of sexual harassment and misconduct ought to be protected.

 

Published: 5/7/19; by Paula Burkes
Original article: https://newsok.com/article/5630647/metoo-movement-reaches-merger-transactions

Schovanec: Oklahoma Supreme Court ruling on noneconomic damages could have profound impact

Attorney Ashley Schovanec Web

Ashley M. Schovanec is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

On Tuesday, the Oklahoma Supreme Court ruled Oklahoma’s statutory cap on noneconomic damages violates the Oklahoma Constitution because it singles out for different treatment less than the entire class of similarly situated persons who may sue to recover for bodily injury.

In plain terms, the court found the statute is a “special law” that limits a living plaintiff’s right to recover noneconomic damages to no more than $350,000 and cannot be reconciled with the provision of the Oklahoma Constitution that expressly forbids any statutory damages limitation for injuries resulting in death.

Oklahoma’s statutory cap provides that in any civil action arising from claimed bodily injury, the trier of fact may award a plaintiff for noneconomic loss no more than $350,000, regardless of the number of parties against whom the action is brought or the number of actions brought—unless the claimed bodily injury is the result of more than mere negligence (i.e. reckless disregard for the rights of others, gross negligence, fraud, intentional injury, or malice).

The statute defines noneconomic damages as “nonpecuniary harm that arises from a bodily injury that is the subject of a civil action” and includes damages for, among other things, pain and suffering, loss of consortium, companionship, mental anguish, etc.

In Beason v. I.E. Miller Services, Incorporated, an employee was injured while operating a crane in his employment with I.E. Miller Services. As a result of his injuries, the employee underwent two amputations on parts of his arm. The employee and his wife sued I.E. Miller in a personal injury action. The matter went to trial in Oklahoma County and the jury awarded the employee and his wife a combined total of $15 million – $6 million of which was allocated as noneconomic damages. Applying the statutory cap, the district court reduced the jury verdict to $9.7 million, as the noneconomic damages to plaintiffs was lowered to $700,000, or $350,000 per person. On appeal to the Oklahoma Supreme Court, plaintiffs challenged the damages cap.

The Oklahoma Supreme Court held the statutory damages cap is unconstitutional for one reason: the statue purports to limit recovery for pain and suffering in cases where the plaintiff survives the injury-causing event, while persons who die from the injury-causing event face no such limitation under Oklahoma Constitution Article 23, section 7 (“The right of action to recover damages for injuries resulting in death shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation . . . . ”).

The court explained that “[b]y forbidding limits on recovery for injuries resulting in death, the people have left it to juries to determine the amount of compensation for pain and suffering in such cases, and no good reason exists for the Legislature to provide a different rule for the same detriment simply because the victim survives the harm-causing event.”

Moving forward, the court noted that if the people of Oklahoma believe the jury system and judicial review are no longer effective in deciding compensation in private personal injury cases, then constitutional amendment is the proper way to make such a change, “not a special law.”

The impact of the Oklahoma Supreme Court’s decision in Beason is profound.

Now, after Beason, with the statutory damages cap removed, an unemployed, catastrophically injured plaintiff, and a defendant, may be looking at a substantially different recovery and exposure.  Consequently, and somewhat counter-intuitively, because the risk of large verdicts just went up, cases may settle earlier because of the uncertainty associated with leaving a damages calculation up to a jury.

Ashley M. Schovanec is a litigation attorney with the law firm of Phillips Murrah.

Supreme Court Holds Employees May Not Arbitrate Class Claims Unless Arbitration Agreement Unambiguously Provides for Class Arbitration

By Janet A. Hendrick
April 24, 2019

It’s been a big week in employment law at the Supreme Court.  Earlier this week, the Court agreed to hear three cases, Bostock v. Clayton County, Georgia, Altitude Express, Inc. v. Zarda, and R.G. & G.R. Harris Funeral Homes v. EEOC, to decide whether Title VII’s prohibition against discrimination “because of sex” protects LGBTQ employees.  Today, in Lamps Plus, Inc. v. Varela, the Court held that a party to an arbitration agreement may arbitrate only individual claims, rather than class claims, unless the arbitration agreement explicitly and unambiguously provides for class arbitration.

In a 5-4 vote, the Court overturned the Ninth Circuit Court of Appeals’ decision that the arbitration agreement between Lamps Plus and employee Frank Varela allowed him to bring class claims in arbitration even though the arbitration agreement was ambiguous on this point. Varela filed suit in a California federal court on behalf of a putative class of employees after approximately 1,300 employees’ tax information was disclosed as part of a phishing scam.  Because Varela had signed an arbitration agreement at the time of hire, Lamps Plus moved to compel arbitration.  The arbitration agreement was ambiguous on the issue of whether a party may pursue class claims in arbitration. The district court granted Lamps Plus’ motion and sent the case to arbitration, but allowed Varela to pursue his claims on a classwide basis in arbitration.  Lamps Plus appealed to the Ninth Circuit, which acknowledged the arbitration agreement was ambiguous, construed the ambiguity against Lamps Plus as the drafter of the agreement, and affirmed the district court’s decision.  Lamps Plus appealed to the Supreme Court.

Chief Justice Roberts wrote the opinion, joined by Justices Thomas, Alito, Gorsuch, and Kavanaugh.  The primary question before the Court was “whether, consistent with the [Federal Arbitration Act, which governed the arbitration agreement], an ambiguous agreement can provide the necessary ‘contractual basis’ for compelling class arbitration.”  The majority answered this question in the negative, pointing out that arbitration on a classwide basis “undermines the most important benefits of” traditional individualized arbitration.  In its 2010 decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the Court held that a court may not compel arbitration on a classwide basis when the arbitration agreement is silent on the availability of class arbitration.  In Lamps Plus, the majority held that “[l]ike silence, ambiguity does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to ‘sacrifice[] the principal advantage of arbitration,” which is the individualized form of arbitration envisioned by the Federal Arbitration Act.  After all, ultimately, “[a]rbitration is strictly a matter of consent” between the parties.

Today’s decision continues the pro-arbitration trend from the Supreme Court over the past few years and comes nearly a year after Epic Systems Corp. v. Lewis, in which the Court upheld the use of class action waivers in arbitration agreements between employers and employees.


Janet Hendrick Profile portrait

Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick, who represents and counsels employers on issues including proper classification, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

NewsOK Q&A: Medical practice support can be costly to suppliers, others

Mary Holloway

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

In this article, Oklahoma City Healthcare Attorney Mary Holloway Richard discusses the “Anti-Kickback Statute” and potential, federal violations of the statute as it relates to providers in the healthcare industry.

What is the authority for the federal government to oversee providers’ relationships with durable medical equipment (DME) and device suppliers and drug companies, such as educational programs that would seem to benefit the patient? How active is that oversight?

The Anti-Kickback Statute (AKS) prohibits remuneration to induce referrals or use of products reimbursement by Medicare, Medicaid or other federal healthcare programs. The federal government, through its investigators and prosecutors, pursue civil remedies including fines for remuneration considered as kickbacks. Remuneration may be cash of in-kind contributions. Under the AKS both civil and criminal charges may result from an investigation by the federal government. Federal policy is designed to prevent relationships that purportedly “lead to excessive or unnecessary treatment,” drive up health care costs and inhibit free market competition. The kickback prohibition applies to all sources of referrals, even patients. For example, where the Medicare and Medicaid programs require patients to pay copays for services, you generally are required to collect that money from your patients. Routinely waiving these copays could implicate the AKS and you may not advertise that you will forgive copayments. However, providers are free to waive a copayment if the provider makes an individual determination that the patient cannot afford to pay or if reasonable collection efforts fail. In addition, providing free or discounted services to uninsured people is not prohibited. The beneficiary inducement statute (42 U.S.C. § 1320a-7a (a) (5)) also imposes civil monetary penalties on physicians who offer remuneration to Medicare and Medicaid beneficiaries to influence them to use their services.

Is the federal government even active in investigating and prosecuting under the AKS?

Yes. The Office of the Inspector General, counsel for the Department of Health and Human Services (HHS), estimated in 2018 that for every $1 spent on investigating health care fraud, $4 is recouped. The government has investigated, prosecuted and settled claims with many types of providers and continues to do so. The government does not need to prove patient harm or financial loss to the programs to show that a physician violated the AKS. A physician can be guilty of violating the AKS even if the physician actually rendered a medically necessary service. Taking money or gifts from drug or device companies or DME suppliers is not justified by arguing that providers would have prescribed that drug or ordered that wheelchair even without a kickback. An example of unlawful activities comes from the Covidien case. A supplier of vein ablation products in California and Florida, Covidien recently settled its claims with the federal government that it offered or provided free to medical practices, or at discounted rates, practice development assistance, lunch-and-learns, dinners with physicians, and market development support, such as vein screening activities designed to recruit new patients to the practices — all provided free of charge or at discounted rates. This virtually uncompensated support, according to the Department of Justice, was designed to induce the use of certain items or services, leading to excessive and unnecessary treatments and driving up health care costs for everyone.

Are there any clear guidelines for physicians and other providers?

HHS has published guidelines for providers, such as “A Roadmap for New Physicians-Avoiding Medicare and Medicaid Fraud and Abuse,” which I routinely provide to new physicians, advanced-practice nurses and other providers. Failure to follow the guidelines can be costly. For example, the outcome of the Covidien investigation was a civil settlement agreement for violation of the AKS in the amount of $17,477,947, with additional payments in excess of $2 million by the company to the states of California and Florida for claims paid by their Medicaid programs.

How are violations of the AKS usually discovered?

Violations of the AKS are often discovered through “qui tam” actions brought by employees of the practice group or those with knowledge of its practices known as “whistleblowers” or “relators.” To avoid vulnerability to qui tam actions providers are advised to adopt and implement robust compliance policies, including training providers and other personnel regarding behavior that may constitute risk under a federal regulatory analysis. It is also advisable to have operating agreements of the practice’s legal entity and written agreements reviewed by counsel in order to shift legal liability where possible.

 

Published: 4/19/19; by Paula Burkes
Original article: https://newsok.com/article/5629122/medical-practice-support-can-be-costly-to-suppliers-others

Gavel to Gavel: Gender parity and the rise of women in the boardroom

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on April 18, 2019.


Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

By Phillips Murrah Attorney Kendra M. Norman

It should come as no shock that, although women make up just over half of the U.S. population, they are underrepresented in corporate executive management, as well as in the boardrooms of public companies in the U.S. This is often due to stereotypes that characterize female leaders as abrasive, aggressive and emotional. This disparate societal perception rewards certain characteristics in men while condemning them in women, which damages women striving for leadership roles.

A 2016 Catalyst report found that in the U.S., women made up only 21.2% of the S&P 500 board seats.

A recent push for diversity on corporate boards of directors may change the gender lines of corporate culture. For example, California is the first state to statutorily require female representation on boards of directors.

In 2018, roughly 25% of California-based companies had no female directors on their board. In October, Gov. Jerry Brown signed a law requiring all public companies having principal executive offices in the state to have at least one woman on the board by the end of 2019. By the end of 2021, any California public company with five directors must have a minimum of two female directors, and those with six or more directors must include at least three women. The law imposes a $100,000 fine for a first-time violation and a $300,000 fine for subsequent violations.

California follows several European countries, including Germany, France, Norway, and Sweden, which have implemented quotas and fines to increase female representation in the boardroom. Additionally, shareholder advisory firms such as Institutional Shareholder Services and Glass, Lewis & Co. are now using gender diversity as a factor for shareholder vote recommendations.

While a government-mandated requirement may not be the ultimate solution, it could accelerate the achievement of gender parity.

Such a change in gender representation is likely to benefit companies, as gender and culture diversity results in diverse perspectives, which is likely to improve a company’s performance. It will also create less gender discrimination in recruitment, promotion, and retention.

While Oklahoma continuously ranks in the bottom of states for women when it comes to the income gap, workplace environment, education, and health, Oklahoma ranks 20th with respect to the executive positions gap, according to a recent 2018 WalletHub study. While there is much room for improvement, there may be hope for Oklahoma in achieving executive gender parity.

NewsOK Q&A: Doing business by email can cause legal concerns

A. Michelle Campney

As a litigation attorney, A. Michelle Campney represents companies in a wide range of business litigation matters with an emphasis on the construction industry.

In this article, Oklahoma City Attorney A. Michelle Campney discusses email practices that could be considered in legal matters.

What are the general legal concerns regarding conducting business through email?

It is estimated that there will be almost 3 billion email users by the end of this year, with an average of 128 business emails sent and received per person, per day. Often, only passively mentioned in employee handbooks and with little to no training during onboarding, employers and employees adopt varied practices for email use. The sheer volume of emails creates logistical problems for businesses (e.g., server space, data protection), but it can also create legal issues when exchanges can bind companies or reveal confidential, privileged or personal information.

How can emails bind someone until they actually sign an agreement?

Does the party you are working with know that you require hard copy agreement with handwritten signatures? If not, and if the email contains all the material terms and the facts, and circumstances surrounding that show that you were conducting the transaction electronically, then you could have an enforceable agreement under the Oklahoma Uniform Electronic Transactions Act (“UETA”).

But no one actually signed the agreement, so how can it be enforceable?

Not all agreements have to be signed to be enforceable, and specifically under the UETA, a signature only need be “attributable to a person if it was the act of the person.” Furthermore, an electronic signature under the act is “determined from the context and surrounding circumstances at the time of its creation, execution, or adoption … .” While Oklahoma does not have any case law on the issue, a Texas court found a simple “Thank you, Clyde” typed above the signature block was sufficient for a signature. Parks v. Seybold (Tex. App.—Dallas, 2015). Additionally, some courts (including those in Texas) broadly interpret the signature requirement to include an automatically generated signature block.

What are other potential concerns for email?

Let’s say that your company is involved in litigation regarding a contractual dispute. Most attorneys ask that all communications, including email communications, regarding the issue be turned over during the discovery process. While the communication may not ultimately be admissible in court, if there are emails between employees discussing the dispute and the surrounding facts and circumstances, those will generally have to be turned over to the other side. Additionally, if certain individuals are involved then you may have to turn over all emails regarding that person. Thus, if any mentions of any disciplinary action regarding that person or even your own personal feelings about the person are on email those may have to be turned over. While the emails may not ultimately impact your case, they could embarrass your company.

Are there any practices or policies that would help alleviate the concerns surrounding email?

While policies and procedures will be specific to each type of business and its standard practices, at the most basic level, having a robust email use policy will set a good foundation and, if properly drafted, help educate your employees on what to do and not to do. One important thing to remember is that email will only continue to grow as a means of communication. Setting good groundwork for how it is to be used in your company may help prevent issues down the road.

 

Published: 4/11/19; by Paula Burkes
Original article: https://newsok.com/article/5628396/doing-business-by-email-can-cause-legal-concerns

Lopez: A bitter pill – medical malpractice liability for new resident physicians

attorney Martin J Lopez III

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.

Medical school residency match day. It’s a chaotic, stressful revelation at which fourth-year medical students find out where they will spend the next few years of their lives as residents – newly minted physicians becoming experts in their respective fields.

While becoming a resident physician is undoubtedly an exciting next step in the process, it inherently comes with daunting new realities – a plethora of health care regulatory compliance issues, constantly developing reimbursement requirements, and medical malpractice liability. This short article focuses on minimizing the risk of negligence-based malpractice lawsuits.

While no practicing physician is immune from being sued, common-sense measures have proven effective in avoiding malpractice claims. And, although a resident physician’s liability is generally covered by the residency program, there remains ample reason to mitigate liability risk – notably, to avoid the stress, time, and hassle that comes with litigation.

Most obviously, physicians should provide the best medical care to their patients they possibly can. Lawsuits for medical malpractice involve determining whether the physician has met the standard of care owed to the patient; if she provided the best care she could have, she has positioned herself well from the outset.

Essential to providing a high level of care to the patient is communication about that care to the patient. Medical malpractice lawsuits often involve allegations of poor communication that may be rooted in a failure to convey respect, inadequate listening skills, and the use of technical medical jargon rather than patient-friendly language.

In a fast-paced environment with numerous patients to attend to, it’s understandably easy to use verbal medical shortcuts for efficiency’s sake; however, using patient-friendly language creates a stronger connection with patients, makes for well-informed patients, and may also manage patient expectations about treatment, diagnosis, and prognosis.

When a patient is dissatisfied, the physician should carefully listen and try to understand the basis for the concern or frustration and engage in meaningful dialogue about the issue. By making this concerted effort to proactively communicate and resolve issues, physicians affirm their commitments both to the patients and to a quality practice where people are treated with respect.

Another important aspect of mitigating liability risk is thorough detailed documentation in the medical record. Careful documentation is the foundation for quality and coordinated patient care, defending malpractice claims, and even for reimbursement issues by government programs – such as Medicare and Medicaid – and commercial insurers.

Proper documentation should include, but certainly isn’t limited to: details of discussions with patients, the physician’s thought and decision-making processes, results of laboratory tests and other ancillary services, proposed courses of treatment (including the impact of doing nothing), the bases for any physician recommendations, and communication of alternatives to the patient. In so carefully documenting, the physician establishes medical necessity for her services and creates admissible evidence in the event litigation arises out of the treatment.

While it may create extra work for physicians, taking the steps outlined in this article offers the benefits of more meaningful communication with patients, increases patient satisfaction, facilitates coordinated care with other providers on the patient’s behalf, and reduces the risk of malpractice lawsuit liability. Establishing these habits early in a medical career will undoubtedly offer great long-term rewards.

Martin J. Lopez III is a litigation attorney with the Oklahoma City law firm of Phillips Murrah.

What happens when a general contractor files for bankruptcy?

Image for general contractor bankruptcy

If you are a subcontractor or owner on a project where the general contractor has declared bankruptcy, you should act quickly to ensure, to the extent possible, that your rights are protected.

First, whether you are a subcontractor or owner, examine your contract and realize that termination due to bankruptcy is likely unavailable. Once an individual or corporation files bankruptcy, a provision called the “automatic stay” comes into play, which allows the individual or corporation filing bankruptcy to avoid creditors’ demands while organizing for the coming proceedings. Thus, generally, a contract with a general contractor cannot be terminated unless the bankruptcy court lifts the automatic stay.

Second, if you are a subcontractor, you should contact the surety (if the project is bonded) or the owner (if it is a private, unbonded project) to make sure that the owner or surety has a formal written claim from you that shows what has been paid, what invoices were submitted but not yet paid, and the balance to finish. Make sure that the owner or surety, as the case may be, is also aware of any submitted changed orders that may be going through the approval process. Note that lien rights are unaffected by a general contractor’s bankruptcy, as liens are against the owner and not the general contractor.

Third, if you are a subcontractor, your automatic reaction may be to stop or slow work. However, simply pulling from the job may not be the best option in all circumstances. General contractors can still enforce their rights for performance under the subcontract, and you do not want to be dealing with a breach claim at the same time as trying to receive payment for work performed but unpaid. However, if a general contractor decides to enforce his or her rights to performance, the general contractor will have to pay you for that work. To ensure payment, joint checks from the owner may need to be negotiated. In either event, slowing work while working with the general contractor, owner, or surety may be the best option to preserve all rights and make sure you do not incur additional costs or obligations.

Fourth, if you are an owner and the project is bonded with a performance or payment bond, you will want to make sure you are in close communication with the bonding company. Additionally, you will want to make sure the surety is paying claims so you are not faced with lien claims by unpaid subcontractors or suppliers.

In conclusion, the key point is to communicate up and down the chain. Owners need to know what claims are outstanding and who was working on the projects so they can protect their rights and move forward with the project. Similarly, and for the same reasons, subcontractors need to let owners and the surety, if applicable, know that they have outstanding unpaid bills and receive guidance on how to proceed. While this article addresses certain considerations after bankruptcy is declared, owners and subcontractors should consider contacting legal counsel to make sure they are protected while moving the project forward and to protect their rights in the bankruptcy proceedings.


Sam Newton portrait

If you are concerned about how this issue affects your business, contact Samuel D. Newton, who represents and counsels clients in Oklahoma and Texas on construction law issues, including contract review and negotiation, bond and lien claims, and other construction matters. Sam can be reached at 405.606.4711 or at sdnewton@phillipsmurrah.com.

Click here to view Sam’s Attorney Profile page.

 

Data breach still compliance concern for health care providers

cyber breach artworkHIPAA concerns, established in 1996 and evolving ever since, continue to be a very real compliance concern for healthcare providers. As an example, last year HHS collected $28.7 million from providers of healthcare services and payors for responses to data breaches that HHS considered inadequate.

According to Modern Healthcare, this is $5.2 million over the prior high for settlement and penalties reported in 2016.  The data for 2018 may be skewed by the $16 million settlement by Anthem for a breach involving approximately 79 million people. That breach occurred in 2015, and the settlement was record-setting for the Office of Civil Rights.

Changes being discussed by HHS include the possibility of sharing a percentage of civil monetary penalties or monetary settlements with affected individuals; revisions to HIPAA rules that facilitate the additional information demanded by coordinated care, outcome-focused care and value-based payments; and reconciliation of behavioral health care’s 42 CFR Part 2 rules with HIPAA.


Mary Holloway Richard portrait

Mary Holloway Richard

If you are concerned about how this issue affects your business or practice, contact Mary Holloway Richard, who represents and counsels clients on issues including healthcare compliance, health services contracting, reimbursement audits and appeals, OIG investigations, and regulatory and corporate matters. 

Mary can be reached at 405.552.2403 or at mhrichard@phillipsmurrah.com.

Click here to view Mary’s Attorney Profile page.

Gavel to Gavel: The uphill battle faced by creditors in bankruptcy

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on March 7, 2019.


Gretchen Latham Web

Gretchen M. Latham’s practice focuses on representing creditors in foreclosure, bankruptcy, collection and replevin cases.

By Phillips Murrah Attorney Gretchen M. Latham

Bankruptcy is a debtor’s remedy, meaning many of the rules and regulations are more favorable to debtors than to creditors. To even the playing field a bit, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005.

Several of its provisions were put in place to provide assurances to creditors that the system is fair and impartial. Of note, those that file must now undergo credit counseling both prior to filing and prior to receiving a bankruptcy discharge.

Also of significance are the changes to the Bankruptcy Code regarding what chapter of case a debtor is eligible to file. Prior to enactment of BAPCPA, many creditors were missing out on substantial payments because most debtors elected to file a Chapter 7 case, which acts as a total liquidation of debts, other than debts that are reaffirmed. The result was that most unsecured creditors were losing out on repayment of their entire outstanding balance.

With BAPCPA, debtors are no longer free to decide what type of case to file. Rather, a complex mathematical computation is performed prior to filing, and if the results show a debtor has funds available to repay a portion of their unsecured debt, that debtor may be required to file a Chapter 13 case.

Chapter 13 is similar to debt consolidation, in that the debtor proposes a plan of repayment to all creditors, to include paying back a percentage of unsecured debt. The result is that unsecured creditors, such as credit card companies and medical providers, receive some payment.

A creditor is also permitted to file an objection to the proposed repayment plan. The most common objections are to the interest rate and value of secured claims. There are other bases for objecting, including that plan is not feasible or that the case was filed as a delay tactic.

Aside from having a statutory basis for objecting, a creditor must also adhere to the Bankruptcy Court’s local rules when objecting to avoid the risk of an improperly filed objection.

While bankruptcy is still a very viable option for those with overwhelming debt, the arena is now viewed as being much more equal. Creditors have many tools at their disposal when a consumer files bankruptcy and should take full advantage of those tools to maximize repayment where possible.

NewsOK Q&A: Some qualifications necessary to conduct businesses in other states

Travis Harrison

Travis E. Harrison is a transactional attorney who represents individuals and both privately-held and public companies in a wide range of transactional matters.

In this article, Oklahoma City Attorney Travis E. Harrison discusses practical legal issues related to out-of-state business practices.

When is a corporation, limited liability company or other registered legal entity “transacting business” in another jurisdiction?

A legal entity required to be registered under the laws of one state must be cognizant of whether its structure or business activities constitute “transacting business” in another state. For example, a corporation formed under the laws of Oklahoma might provide services or buy and sell real estate in Texas. If Texas law defines this activity as “transacting business,” then the corporation should take the required steps to qualify to do business in Texas — as the failure to do so may result in unforeseeable fines or other consequences. Each state establishes its own variations on what activities by a foreign (out-of-state) business constitute doing business in that state. As a practical matter, a business that has a strong presence or engages in successive transactions in another state is likely “transacting business” and will need to take the appropriate steps to qualify in that state.

What are the consequences of failing to qualify to do business in another state?

Similar to the issue of what activities constitute “transacting business” in another state, the ramifications for failing to qualify to do business are a creature of state statute and vary by jurisdiction. However, the most common legal consequences for failing to qualify are fines and the inability to utilize that state’s court system to bring a lawsuit. For example, assume the previously mentioned corporation formed under the laws of Oklahoma fails to qualify to do business in Texas even though it meets Texas’ criteria for “transacting business.” If the Oklahoma corporation files a breach of contract action in Texas, then its case may be dismissed because it failed to qualify to do business in Texas. This pitfall is especially problematic if the corporation is jurisdictionally restrained from bringing the lawsuit in Oklahoma because of other procedural issues.

How does a business qualify to do business in a state other than its state of formation?

As mentioned above, a business should be cognizant of whether its operations in other states require it to qualify to do business in those states. Generally, a business qualifies by filing a certificate with information about the business and its good standing and paying the respective filing fee with the state’s secretary of state (or other designated office). Additionally, a business should ensure that it complies with the other state’s applicable tax requirements for foreign businesses. In Oklahoma, for example, a foreign corporation’s failure to pay annual franchise taxes may subject it to unnecessary penalties.

 

Published: 2/21/19; by Paula Burkes
Original article: https://newsok.com/article/5623523/some-qualifications-necessary-to-conduct-businesses-in-other-states

Federal income tax challenges for medical marijuana businesses in Oklahoma

Attorney Jessica N. Cory

Jessica N. Cory advises clients regarding corporate and general business matters, including choice of entity, formation, tax-free reorganizations, acquisitions and dispositions and tax planning.

By Phillips Murrah attorney Jessica N. Cory

On June 26, Oklahoma voters approved State Question 788, which legalizes the use, growth, and sale of marijuana in the state for medicinal purposes.  In addition to providing rules for individual use of medical marijuana, the approval of SQ 788 also created a number of opportunities for new related businesses, such as retailers or dispensaries, commercial growers and processors. However, although licensed medical marijuana businesses are now legal under Oklahoma state law, conflicting federal law creates a number of challenges for business owners, particularly with respect to federal income tax law.

Generally, the Internal Revenue Code allows a taxpayer to take a deduction for all “ordinary and necessary” business expenses paid or incurred during the taxable year.  Congress has created an exception to this rule in certain instances, however.  One such exception is Internal Revenue Code Section 280E, which prohibits a taxpayer engaged in the business of “trafficking in controlled substances” from taking a deduction for ordinary business expenses.  For purposes of this provision, a controlled substance is any Schedule I or Schedule II drug under the federal Controlled Substances Act, which includes marijuana.  Although taxpayers have argued that Code Section 280E should not apply to businesses operating legally under state law, courts have repeatedly rejected this argument, concluding that any business buying or selling marijuana regularly is subject to the restrictions of Code Section 280E until Congress chooses to amend the Internal Revenue Code.

Although Code Section 280E’s bar on deductions represents a significant obstacle for medical marijuana business owners, several exceptions help reduce the burden on these taxpayers.  For example, although a medical marijuana business cannot deduct expenses in the same way as other taxpayers, it is entitled to offset its gross receipts with its cost of goods sold (“COGS”), although the Internal Revenue Service has issued guidance strictly limiting what types of costs a taxpayer engaging in a marijuana business can allocate to COGS.  Caselaw supports this narrower interpretation of COGS, including prohibiting resellers of marijuana from including any indirect costs – costs other than the price paid for inventory plus any transportation or other necessary acquisition costs – in COGS.

Another important exception to Code Section 280E is the separate business rule recognized by the Tax Court in an early medical marijuana case.  Under this rule, although Section 280E may preclude a taxpayer from taking any deductions relating to its medical marijuana sales, it can still deduct its expenses for any separate, non-trafficking trade or business.  Accordingly, it is extremely important for a marijuana business to keep careful records of any other businesses it may also operate, unrelated to growing, processing, or selling marijuana.

Members of Congress have repeatedly introduced legislation to exempt marijuana businesses lawfully operating under state law from the parameters of Section 280E.  Until this type of legislation is enacted, however, federal tax law will remain a potential minefield for any unwary medical marijuana businesses.  It is therefore important for businesses opening under SQ 788 to seek out an experienced accountant or tax lawyer to discuss the best way to structure their business to comply with federal tax law while minimizing their tax burden.


If you would like to know more about how this affects your business, contact Jessica N. Cory at 405.552.2472 or jncory@phillipsmurrah.com.

NewsOK Q&A: Anyone can take part in utility rate cases

Eric Davis

Eric Davis is an attorney in the Firm’s Clean Energy Practice Group and the Government Relations and Compliance Practice Group. He represents clients in a range of regulatory and energy matters.

In this article, Oklahoma City Attorney C. Eric Davis discusses the process utility companies must go through to request rate increases and how different parties can participate.

Q: Oklahoma’s two largest electric utilities have rate cases ongoing at the Corporation Commission. How does the rate case process work?

A: In Oklahoma, investor-owned electric companies are “rate-regulated” by the Oklahoma Corporation Commission. Regulating the rates of investor-owned utilities is necessary based on their monopoly status, i.e., customers generally can’t choose among other competing utilities for the same service. As a result, companies like Oklahoma Gas and Electric Co. and Public Service of Oklahoma must seek approval from the three elected Corporation Commissioners before increasing rates. When a utility requests a rate increase, the resulting procedure is referred to as a “rate case.” A rate case is a formal, evidence-based, court-like process, open to the public. In a rate case, the commission determines the amount of revenue a company reasonably needs to operate, and then decides how best to allocate any increase (or decrease) among the company’s customers. This allocation process involves dividing customers into classes (such as residential, commercial, industrial, municipal, public schools), and even subclasses, and then, ideally, assigning rates across classes in an equitable manner.

Q: What types of issues exist in OG&E’s and PSO’s current rate cases?

A: Primary drivers in any rate case include the utility’s operational costs, costs associated with plant investments, and the utility’s right to earn a fair profit. On the generation side, national trends evidence a shift toward renewable and natural gas resources, and conflicts abound concerning how utilities should deal with their existing fleets, including coal plants. In its current rate case, OG&E has requested about $54 million annually to recover the cost of retrofitting its Sooner coal plant to reduce air pollution. Meanwhile, historically low load growth and other market trends are causing electric utilities to reconsider the manner in which they obtain rate increases from the commission. In PSO’s ongoing rate case, the company is proposing a “performance-based rate plan,” in which its earnings would be subject to more frequent, annual reviews, allowing for periodic rate adjustments. Such annual reviews, while occurring with more regularity, would be structured differently and allow for less in-depth analysis than a traditional rate case. However, PSO has proposed a backstop, stating it would file a full-blown rate case after three years.

Q: Who may participate in rate cases?

A: Anyone can take part in a rate case, whether by emailing public comment to the commission, or formally intervening as a party. Formal parties have the right to issue discovery, present witnesses, and cross-examine witnesses of other parties, including the utility’s witnesses. Common parties include the commission’s staff, the attorney general, large industrial customers, AARP, and the Department of Defense. Intervening parties may aim to influence utility policies, or ensure the utility’s costs are reasonable. Parties also may advocate on behalf of particular customer classes during the rate design process, ensuring costs are fairly apportioned among customers.

 

Published: 2/6/19; by Paula Burkes
Original article: https://newsok.com/article/5622090/qa-by-c-eric-davis-anyone-can-take-part-in-utility-rate-cases

NewsOK Q&A: IP assignment agreement is key to invention ownership

Phillips Murrah Patent Attorney Cody J. Cooper

Cody Cooper is a Patent Attorney in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property, patent, trademark and copyright matters. His practice also includes commercial litigation.

In this article, Oklahoma City Patent Attorney Cody J. Cooper discusses the rights inventors have when inventing under the employment of someone else.

Q: When an employee invents something during the course of his or her employment, who owns the invention?

A: The employee owns the invention. Inventors’ exclusive right to their inventions is specifically written into the United States Constitution and, as such, courts have generally interpreted ownership of inventions to favor individuals, except in very narrow circumstances.

Q: How can an employer assure ownership when an employee conceives of an invention on the job?

A: The employer must have employees sign an intellectual property (IP) assignment agreement. Because the general rule is that an inventor owns the rights, courts strictly interpret IP assignment agreements. Recent case law has instructed employers that how you draft the assignment agreement is equally as important as having an agreement in the first place. In fact, the Federal Circuit recently determined, in Advance Video Technologies LLC v. HTC Corporation Inc., that an IP assignment must include language saying the employee “assigns” — present tense, not future tense — their employer all IP rights. The small difference in language had a tremendous impact on the employer’s ability to sue another company for patent infringement.

Q: Should IP assignment agreements only be used by businesses in manufacturing, research or product development?

A: No. I would suggest any company consider having its employees sign an IP assignment agreement if the company expects employees to create work or inventions to which the company would expect to have rights and expects to protect it through application for apply for a trademark, patent, copyright or other appropriate protection to keep others from using it without permission.

Q: What are some other employer considerations regarding IP assignment agreements?

A: Make sure that your employees sign IP assignments before they begin working for you, and make sure that you consult an attorney on the drafting of the IP assignment to ensure that it complies with current law and effectively assigns the IP rights you are seeking to protect.

Q: What if an employer has employees who’ve already created inventions that the employer presumed the company owned but doesn’t have an IP assignment in place? Can the company enter into an IP assignment agreement retroactively?

A: If this is the case, the invention is owned by the employee, and the employer likely has no rights to the invention. Nevertheless, the employer and employee can still enter into a IP assignment agreement, but there must be some sort of consideration (exchange in value) passed between the parties. The law makes clear that it is not enough for the employer to say that the consideration the employee is receiving is that they get to keep their job — there must be something more passing to the employee for their assignment of their invention (i.e. money, stock, etc.).

 

Published: 1/30/19; by Paula Burkes
Original article: https://newsok.com/article/5621521/qa-with-cody-j-cooper-ip-assignment-agreement-is-key-to-invention-ownership

 

Not a Trump Card? Shuttle Drivers are Independent Contractors Under NLRB Test Emphasizing Entrepreneurial Opportunity

By Janet A. Hendrick
January 28, 2019

Focusing on “entrepreneurial opportunity” available to shared-ride drivers, the Republican-majority National Labor Relations Board handed employers a victory on January 25, 2019 by holding that Dallas-Fort Worth area SuperShuttle drivers are independent contractors, rather than employees who may unionize. The decision, which overturns a 2014 decision that favored workers, will make it easier to classify workers as independent contractors, but has no effect on state or federal wage and hour laws.

In SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338 (Case 16–RC–010963), by a 3-1 party-line vote, the employer-friendly Board continued with its reversal of Obama-era decisions that favored employees.  The case arose when the union sought to represent a unit of shuttle drivers, including about 90 franchisees.  In August 2010, the Board’s Acting Regional Director found the franchisees were independent contractors, not employees, and dismissed the union’s petition for representation. The union appealed and last week’s decision was the final nail in the coffin for the union.

The decision is a good overview of how the NLRB analyzes whether a worker is an employee, who may unionize, or an independent contractor, who may not. The Board applies a 10-factor test (which differs from other agency tests, such as the IRS 20-factor test), none of which is controlling:

  1. Extent of control by the company over the detail of the work;
  2. Whether the worker is engaged in a distinct occupation or business;
  3. The kind of occupation and whether the work is usually performed with or without supervision;
  4. Required skill in the particular worker’s occupation;
  5. Whether the company or the worker supplies the tools and place of work for the worker;
  6. The worker’s length of tenure with the company;
  7. Whether the worker is paid by time or by job;
  8. Whether the work performed by the worker is part of the regular business of the company;
  9. Whether the parties believe they are in an employer-employee relationship; and
  10. Whether the principal is or is not in the business.

There is no “bright-line rule” and no “shorthand formula” for determining whether a worker is an employee or not, and the total factual context must be assessed and weighed.

The SuperShuttle Board returned to the traditional common-law test for determining independent contractor status and overruled the Obama Board’s 2014 decision in FedEx Home Delivery (361 NLRB 610) (“FedEx II”), which the federal court of appeals for the D.C. Circuit vacated.  In FedEx II, the NLRB held that FedEx drivers were employees, declining to adopt an earlier court decision that involved the same parties and held that the drivers were independent contractors.  That earlier decision viewed the common-law factors “through the lens of entrepreneurial opportunity,” rather than focusing on “an employer’s right to exercise control” over the workers’ job performance.  The Board in SuperShuttle found the FedEx Board “impermissibly altered the common-law test” to one of “economic dependency,” a test Congress specifically rejected.

Noting that the NLRB has long considered entrepreneurial opportunity as part of the independent contractor analysis, the SuperShuttle Board analyzed the common-law factors to find in favor of SuperShuttle, shutting down the union’s efforts to represent the drivers.  The key factors in the Board’s decision were:

  • The franchisees’ significant initial investment in their business by purchasing or leasing the primary instrumentalities for their work—a van (as well as gas, tolls, and repairs) and the dispatching system–and execution of an agreement with SuperShuttle (Unit Franchising Agreement), which states in bold capital letters “FRANCHISEE IS NOT AN EMPLOYEE OF EITHER SUPERSHUTTLE OR THE CITY LICENCEE”;
  • The franchisees’ almost unfettered opportunity to meet or exceed their overhead, as they have total control over how much they work, when, and where and they keep all fares they collect;
  • Analogy of the shuttle drivers to taxi drivers, whom Board precedent holds are independent contractors, largely because they retain all fares they collect and the cab companies lack control over the manner and means by which the drivers conduct business;
  • The franchisees’ agreement to indemnify SuperShuttle against all claims relating to their actions, greatly lessening SuperShuttle’s motivation to control the franchisees’ actions;
  • Although the franchisees are subject to several requirements, including dress and grooming standards and van inspections, these requirements are imposed by state-run DFW Airport, not SuperShuttle;
  • The franchisees’ near-absolute autonomy in performing their work;
  • SuperShuttle does not provide benefits, sick leave, vacation, or holiday pay to the franchisees, or withhold taxes or payroll deductions;
  • Five of the franchisees are corporations.

Although some of the factors indicated employee status (such as no particular skill/specialized training and the fact that the drivers’ work is an integral part of SuperShuttle’s business), the NLRB found that none of these outweighed the factors supporting independent contractor status.

The SuperShuttle Board explained that entrepreneurial opportunity is not “a trump card” in the independent contractor analysis, but rather a “prism” through which to evaluate the 10 common-law factors “when the specific factual circumstances of the case make such an evaluation appropriate.”  So, where a qualitative evaluation of common-law factors shows significant opportunity for economic gain and significant risk of loss, the worker is likely an independent contractor and not permitted to unionize.

Although the SuperShuttle decision is without doubt a victory for employers, employers should remember the decision is not binding on other agencies, such as the Department of Labor, which enforces federal wage and hour laws.


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Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick,who represents and counsels employers on issues including proper classification, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

ALERT: Colorado lawsuit asserts oil and gas forced pooling is unconstitutional

Broomfield News screengrab

Click image for source article.

January 25, 2019

A new case filed in federal court in Colorado challenges the process of force pooling certain mineral owners and working interest owners.

From a Broomfield News article:

  • The suit, dated Jan. 22, names Gov. Jared Polis and Jeffrey Robbins, acting director of the commission, as defendants. It seeks to temporarily halt the process and challenges the constitutionality of the forced pooling provision of the Colorado Oil and Gas Act.
  • The complaint, filed with U. S. District Court, challenges the statute on constitutional grounds, including arguments that the law violates mineral owners’ rights to contract, equal protection, freedom of association and due process, among others.

The outcome could have a substantial impact on oil and gas operators in Colorado and beyond.

Oil and gas companies will want to monitor this case moving forward and consider the potential impact it could have on their ongoing operations involving pooled acreage.

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

Zachary K. Bradt, Director
Phillips Murrah P.C.
405.552.2447

Phillips Murrah

Gavel to Gavel: IP agreement is key to invention ownership

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Jan. 24, 2019.


Cody Cooper

Cody Cooper is a Patent Attorney in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property, patent, trademark and copyright matters. His practice also includes commercial litigation.

By Phillips Murrah Attorney Cody J. Cooper

Let’s say an employee invents something during the course of his or her employment. Who owns the invention? There is a common misconception that the employer always owns the rights to the invention. However, that is incorrect. The correct answer is that typically the employee owns it.

Inventors’ exclusive right to their inventions is specifically written into the U.S. Constitution and, as such, courts have generally interpreted ownership of inventions to favor the inventors. While there are some narrow exceptions, the general rule is that an inventor owns the rights regardless of how that invention arose.

If an employer wants ownership of inventions created by employees, the employer must have employees sign an intellectual property assignment agreement. In such a scenario, employers should be aware that courts strictly interpret IP assignment agreements. Recent case law has instructed employers that how you draft the assignment agreement is equally as important as having an agreement in the first place.

For example, the Federal Circuit recently determined, in Advance Video Technologies v. HTC Corporation Inc., that the language “will assign” in an IP assignment is insufficient to actually assign an employee’s interest in an invention to the employer. The court opined that “will assign” is simply a promise to do something in the future.

Instead, the court inferred that an IP assignment must include language saying the employee “assigns” – present tense – their IP rights. The small difference in language had a tremendous impact on the employer’s standing to sue another company for patent infringement.

If employees have already created inventions that the employer presumed the company owns but doesn’t have an IP assignment in place, the invention is likely owned by the employee and the employer probably has no rights to the invention. Nevertheless, the employer and employee can still enter into an IP assignment agreement.

However, in this scenario there must be an exchange-of-value, i.e. consideration. The law makes clear that it is not enough for the employer to say that the consideration passed to the employee is the employee’s continued employment. There must be something more passing to the employees for their assignment of their invention, like money, stock or some other exchange of value, for it to be effective.

Supreme Court Holds Independent Contractor Drivers Subject to Exemption from Arbitration

In a unanimous opinion (except for Justice Kavanaugh, who was recused from the case) expected to have broad implications for the transportation industry, the Supreme Court delivered a blow to employers that seek to arbitrate claims filed by drivers and other transportation workers classified as independent contractors.

SCOTUS opinion link

CLICK IMAGE TO VIEW OPINION.

The high court affirmed a decision from the First Circuit Court of Appeals that an exemption in the Federal Arbitration Act for interstate transportation workers applies to all workers, whether classified as employees or independent contractors.  The employer, New Prime Inc., an interstate trucking company, sought to compel arbitration of claims by one of its drivers, Dominic Oliveira, who filed a class action in federal court alleging New Prime violated the Fair Labor Standards Act by denying its drivers lawful wages.

After the district court and the First Circuit sided with the driver, New Prime petitioned the Supreme Court to overturn the First Circuit’s May 2017 ruling that the term “contracts of employment” in the Section 1 exemption of the FAA includes not only employees, but also independent contractors.  New Prime’s broad arbitration agreement included a “delegation clause” that gave an arbitrator authority to decide whether the parties’ dispute is subject to arbitration.

The Supreme Court nonetheless agreed with the First Circuit that a court, rather than an arbitrator, should determine whether the contract in question is within the coverage of the FAA, citing the Court’s 1967 Prima Paint decision. Turning to the interpretation of “contracts of employment” in the FAA exemption, the Court employed the “ordinary meaning” analysis of the statute’s language to conclude the term is not limited to employees because at the time Congress enacted the FAA in 1925, “contract of employment” described “any contract for the performance of work by workers.”  Justice Ginsburg filed a short concurring opinion.


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Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick, who regularly represents employers in court and arbitration, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

Religious accommodations at work

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on December 13, 2018.


Janet Hendrick Profile portrait
Janet A. Hendrick

By Phillips Murrah Director Janet A. Hendrick

Disability is the most common and well-known basis for workplace accommodation. Although less common, requests for religious accommodations for an employee’s sincerely held religious beliefs or practices, required by Title VII of the Civil Rights Act of 1964, are on the rise. Here is an overview of what employers should know about religious accommodations.

Under Title VII, “religion” is not limited to traditional, organized religions. Sincerely held religious beliefs are also included, even if not part of a formal church or sect, and even if held by a small number of people. One court found that a belief system known as Onionhead, the motto of which is “peel it-feel it-heal it,” is a religion, looking to the Equal Employment Opportunity Commission’s definition, which includes “moral or ethical beliefs as to what is right and wrong.” In contrast, another court ruled that the Church of the Flying Spaghetti Monster, members of which are known as Pastafarians, is not.

Upon request or notice, an employer must engage in an interactive process with the employee and accommodate the employee’s religious beliefs or practices unless it would pose an undue hardship on the employer. The burden is on the employee to prove notice was provided to the employer. Mere knowledge by the employer does not generally trigger an accommodation obligation.

To establish an undue hardship, an employer must provide specific and credible evidence of the expense or hardship the exception would cause. Hypothetical hardships without support will not suffice. A “slippery slope” argument – that accommodating one employee will encourage others to request a policy exception – rarely succeeds.

Although it is an easier standard to meet than the undue hardship exception to a disability accommodation under the Americans with Disabilities Act, there is no bright-line rule and each case will be different. Examples of burdens that are more than minimal are jeopardizing safety or health, more than a minimal cost, and violating a seniority system.

The two most common religious accommodations are schedule changes and exceptions to dress and grooming codes. Examples are an employee who is unable to work Saturdays because his religion prohibits working on his Sabbath, a female Muslim employee whose religion requires her to wear a hijab, or a male employee who is prohibited by his religion from shaving his beard.

Janet A. Hendrick is an employment attorney who works in Phillips Murrah’s Dallas office.

Texas Appeals Court Sends Noncompete Dispute to Arbitration

Non compete agreement

Reversing a decision that an employee’s lawsuit to declare her noncompete agreement void was not subject to arbitration, the First Court of Appeals in Houston held yesterday that the lawsuit fell within the scope of the parties’ arbitration agreement. Sue Ann Lopez was a sales representative for IPFS Corporation, which provides insurance premium financing, before she left to work for a competitor.

When IPFS threatened to sue her for breaching a non-solicitation agreement, Lopez filed a declaratory judgment action to have the non-solicitation covenant declared void.  Since Lopez had signed an arbitration agreement, IPFS filed a motion to move the lawsuit to arbitration.  Lopez opposed that motion, arguing that her claim was not a “legal claim” subject to arbitration, because she was seeking equitable relief.  The trial court sided with Lopez and denied IPFS’ motion to compel arbitration and IPFS appealed.

The issue on appeal was whether Lopez’s claim fell within the scope of the arbitration agreement. The appeals court emphasized that the arbitration agreement, which was governed by the Federal Arbitration Act, included a broad scope of covered claims and only three exclusions:  claims for workers’ compensation or unemployment benefits; claims for temporary equitable relief; and administrative proceedings before the U.S. Equal Employment Opportunity Commission.  Because Lopez did not bring any of these excluded claims, the Houston appeals court easily found in favor of arbitration, reversed the trial court, and remanded for dismissal and entry of an order moving the case to arbitration.

This Texas decision is another reminder of the strong policy in favor of enforcing arbitration agreements and finding claims subject to arbitration absent an express intention to exclude them.


Janet Hendrick Profile portrait

Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick, who regularly handles Texas noncompete matters in court and arbitration, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

Accidents, disagreements and liabilities – a festive sampling of holiday legal hazards

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on November 21, 2018.


Phillips Murrah litigation attorney Hillary Clifton discusses holiday legal hazards.

Hilary Hudson Clifton is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters. Click photo to visit her attorney profile.

As we find ourselves in the midst of another holiday season, it’s a good time to contemplate the joys this time of year brings. For many, that list includes extra time with loved ones, hearty food and cozy pajamas.

Hopefully, holiday-specific “legal woes” are less likely to come to mind. Nevertheless, holidays often have their own unique histories of legal issues that few would equate with the brotherly love and fa-la-la-falderal we expect during this “most wonderful time of the year.”

By this time, those who opened their homes and businesses on Halloween hopefully avoided any incidents associated with the spookier part of the season, like haunted house trip-and-falls or home-made cotton-ball sheep costume fires (see Ferlito v. Johnson & Johnson Products, Inc.).

Premises liability, however, remains a major concern for retailers preparing for the onslaught of holiday shoppers. Though most Black Friday retail giants are now well-acquainted with the safety risks associated with enormous sales and even bigger crowds, smaller retailers should be sure to beef up their safety protocol and brush up on premises liability concepts to keep the shopping season incident-free.

In addition to civil liability, failure to adequately cope with Black Friday madness can result in a business being cited by the Occupational Safety and Health Administration, whose “Crowd Management Safety Guidelines for Retailers” can be found online.

Less tangible injuries to intellectual property rights will often arise in connection with holiday-themed entertainment. One case that has been in the news recently involves the Netflix series The Chilling Adventures of Sabrina (which puts a darker twist on Sabrina the Teenage Witch), and The Satanic Temple’s claim that a statue featured in the show of the goat-headed Baphomet infringes on the Temple’s copyright of its own monument.

There’s also a fair chance that your favorite Christmas carol continues to generate income as someone’s intellectual property – and that someone would like to keep it that way (think the listless bachelor played by Hugh Grant in About A Boy). Of course, many holiday favorites, like Deck the Halls and Silent Night, have become part of the public domain and are perfect for spreading Christmas cheer. Others, like Frosty the Snowman, are still protected by copyright and require a license for public performances.

Finally, if you have any particularly overzealous family members, you might turn the threat of intellectual property litigation to your advantage, by cautioning that their makeshift mistletoe hats infringe on the “mistletoe supporting headband” patented in 1983 or the “Kiss Me” holiday cap patented in 1999.

Though I wouldn’t recommend Grinch-ing up your holiday parties by casually chatting about all the ways one might get sued before the new year, we should all keep in mind that no season is immune from the unfortunate reality of accidents, disagreements and liabilities – no matter how sincere our sentiments of peace on earth and good will toward man.

Highly litigated common law marriage still recognized in Oklahoma

I heard a song the other day by Pistol Annies called “Got My Name Changed Back.” The lyrics include the line, “it takes a judge to get married, takes a judge to get divorced.”

Oklahoma family law attorney Robert K. Campbell discusses common law marriage.

Robert K. Campbell’s legal practice is focused in the area of family law, specifically concentrated in matters of divorce, legal separation and custody issues. Click photo to visit his attorney profile.

Well, if you live in Oklahoma, only half of these lyrics is correct. Oklahoma is one of only eleven states that currently recognize common law marriages.

Unlike a traditional marriage, entering into a common law marriage does not require a judge or minister, a marriage license or a marriage certificate. A common law marriage is formed when the minds of the parties meet in consent at the same time. The only requirements are that two people, who are capable of entering into a marriage, agree to become spouses and thereafter maintain the marital relationship.

People often tell me that they have been living with their significant other for so many years, and they ask if that makes them common law married. Typically, if you are simply living together, you probably are not common law married.

Elements of a common law marriage include:

  • An actual and mutual agreement to be spouses
  • A permanent relationship
  • An exclusive relationship
  • Cohabitation as spouses
  • Holding themselves out to the public as married

The concept of being common law married seems simple enough, yet it is a highly litigated area in divorce and probate matters. You never know what piece of evidence will convince a court that a couple is either common law married or not.

To establish the existence or non-existence of a common law marriage, the evidence can include, but is not limited to, tax returns, holiday and anniversary cards, deeds, insurance forms, rings, family holiday pictures, social media posts, name tags and estate planning documents.

Tax returns, in particular, are very helpful pieces of evidence, because whether the parties file as a married couple or as single persons, they are attesting to their marital status to the government under penalty of perjury.

Finally, it is important to know how to dissolve a common law marriage. While Oklahoma recognizes common law marriage, there is no such thing as a common law divorce. If you are common law married, then as the Pistol Annies’ song correctly states, “it takes a judge to get divorced.”


This article is also published as a Q&A in the Oklahoman, published on 11/21/18 by Paula Burkes
Original article: https://newsok.com/article/5615630/common-law-marriage-highly-litigated-in-divorce-probate-matters

 

ALERT: Austin Court of Appeals: Austin Paid Sick Leave Unconstitutional

November 16, 2018

Today, the Austin Court of Appeals held that the Austin paid sick leave ordinance, which would require private employers to provide an hour of paid sick leave to employees for every 30 hours worked beginning on the first day of employment, violates the Texas Constitution because it is preempted by the Texas Minimum Wage Act.

The City of Austin enacted the ordinance in February 2018.  A group of employers and business associations filed a declaratory judgment action seeking injunctive relief and the district court denied a temporary injunction.  The appeals court reversed and remanded to the district court to issue the requested temporary injunction, prohibiting the City from enforcing the ordinance, and for further proceedings.

Although there may be more paid leave legislation on the horizon, for now private Texas employers have no obligation to provide paid sick leave.

Janet A. Hendrick, Director
Phillips Murrah P.C. – Dallas
214.615.6391

Phillips Murrah