USDOL seeks to overturn two proposed FLSA rules: Independent Contractor Rule and Joint Employer Rule

USDOL header employee classification graphicBy Byrona J. Maule and Phoebe B. Mitchell

In January, the United States Department of Labor (DOL) issued a notice of proposed rulemaking regarding the classification of independent contractors. Now, just months into President Biden’s term, his administration seeks to overturn both this proposed rule and the DOL’s final rule regarding joint employers.

Independent Contractor

The proposed independent contractor rule, discussed at length here, significantly changed the legal analysis involved for employers deciding how to classify their employees. In stating its intention to rescind the new independent contractor rule, the DOL stated that the new “economic reality test,” which is not used by courts or the department, is not supported by longstanding case law or the text of the Fair Labor Standards Act (FLSA). Further, the DOL commented that the new rule minimizes the traditional factors utilized by courts in classifying workers, making it less likely to establish that a worker is an employee under the FLSA. Worker classification is an important issue for employers as it determines which workers are entitled to benefits and the overtime protections under the FLSA.

The DOL did not provide guidance on a replacement for the proposed rule. President Biden has stated his support for a uniform independent contractor test modeled after California’s “ABC” test. The “ABC” test considers a worker to be an employee unless their employer establishes all three of the following:

  1. The worker is free from control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  2. The worker performs work that is outside of the “usual course” of the hiring entity’s business; and
  3. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the type of work performed for the company.

Joint Employer

The DOL’s joint employer rule clarified an employee’s joint employer status, such as when an employee performs work for his or her employer that simultaneously benefits another individual or entity. The rule, which took effect on March 16, 2020, was subsequently challenged by 17 states and the District of Columbia in a lawsuit filed in the Southern District of New York. The lawsuit claimed that the new joint employer rule violated the Administrative Procedure Act. The Southern District of New York agreed, holding that the new rule was contrary to the FLSA.

The March 16, 2020 final rule included several elements that were not consistent with the DOL’s prior joint employer rule, including:

  • a four-factor balancing test to determine when a person is acting directly or indirectly in the interest of an employer in relation to the employee;
  • a provision that an employee’s economic dependence on a potential joint employer does not determine whether it is a joint employer; and
  • a provision that an employer’s franchisor, brand and supply, or similar business model and certain contractual agreements or business practices do not make joint employer status under the FSLA more or less likely.

Jessica Looman, the DOL Wage and Hour Division Principal Deputy Administrator stated that “The Wage and Hour Division’s mission is to protect and respect the rights of workers. Rescinding these rules would strengthen protections for workers, including essential front-line workers who have done so much during these challenging times.”

The DOL is seeking public input until April 12, 2021 on its proposal to rescind these two rules.

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


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

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Understanding tribal legal systems increasingly important

By Hilary Hudson Clifton

This article appeared as a Guest Column in The Journal Record on March 11, 2021.

The Cherokee Nation Supreme Court recently ruled that the words “by blood” must be removed from the tribe’s constitution – a decision intended to afford full citizenship rights to descendants of individuals formerly enslaved by members of the tribe, known as Freedmen. The opinion is one of many recent examples demonstrating how Oklahoma’s intricate and often ugly history has led to the unique cultural and legal landscape in the state today. Practitioners need to be aware of both the history and trends to successfully guide clients.

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.

Of course, the most notable piece of news from Indian Country in Oklahoma over the past year has been the U.S. Supreme Court decision in McGirt v. Oklahoma, which ruled that a large portion of eastern Oklahoma remains a reservation for the Creek Nation because it was never disestablished by Congress.

While McGirt’s implications are beyond the scope of this article, the Cherokee Nation’s recent citizenship opinion highlights an equally interesting facet of Oklahoma’s legal environment: Autonomous tribal court systems operate within the state, which gives rise to numerous jurisdictional issues. One likely effect of McGirt is that tribes will take an increasingly prominent role in negotiating and even regulating commercial activities across larger areas in Oklahoma. Those doing business with tribal nations may be asked to consent to tribal jurisdiction in certain circumstances. Accordingly, having at least a baseline understanding of tribal court systems, procedure, and bar requirements is becoming increasingly important.

In 1979, there were four Courts of Indian Offenses (“CFR Courts”) operated by the U.S. Department of the Interior Bureau of Indian Affairs. These courts hear matters over which tribes that have not established court systems have jurisdiction. As tribes established their own justice systems, the CFR courts have been deactivated. Today, of Oklahoma’s 39 federally recognized tribes, 22 currently have their own judicial systems, so only two CFR Courts serving 13 tribes currently exist. The Southern Plains Region CFR court hears matters on behalf of the Fort Sill Apache Tribe, the Kiowa Indian Tribe, and the Caddo Nation, among others, and the Eastern Oklahoma Region CFR Court hears matters on behalf of five tribes, including the Eastern Shawnee Tribe and the Ottawa Tribe. The history of the CFR courts in Oklahoma illustrates a distinct trend toward tribal self-governance, one that will continue to shape how Oklahoma residents, Native and non-Native, engage with the multiple justice systems operating in the state.


For more information on how the information in this article may impact your business, please call 405.606.4730 or email Hilary Hudson Clifton.

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Kanye Family Law Lessons – Digging for Gold in Oklahoma

By Robert K. Campbell

Music has permeated our society since the beginning of time. Artists have touched on all topics, such as politics, religion, social matters, etc. In 2005, Kanye West had a number-one hit song with “Gold Digger.” Urban Dictionary defines the term “gold digger” as “someone who only likes people because of how much money they have, or because of the items they own.”

In this article, I will discuss some of the lyrics and how West’s sentiments would apply based upon Oklahoma laws. For purposes of this article, any gender specificity as it relates to the term “gold digger” should be disregarded, as the term is gender neutral. After all, anyone can dig for gold. I am not, however, suggesting explicitly, implicitly, or in any other manner, that either Kim Kardashian West or Kanye West is a gold digger.

The first lines in verse two of the song begin: Eighteen years, eighteen years / She got one of your kids, got you for eighteen years

Attorney Robert Campbell

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. He represents clients by providing steady, thoughtful and resourceful counsel to advise them through significant family and life transitions.

This is mostly a true statement. Oklahoma law requires both parents to provide financial support for their children during a divorce, or in situations where the parents were never married. Typically, one parent pays the other parent child support. Child support is generally owed until the minor child reaches the age of 18 or graduates high school, whichever is later. Considering the lyrics above, if you have a child, you will be obligated to pay child support until at least the age of 18, so, the above lyrics are, in essence, correct.

“Gold Digger” lyrics go on to state: I know somebody payin’ child support for one of his kids / His baby mama car and crib is bigger than his … She was supposed to buy your shorty Tyco with your money / She went to the doctor, got lipo with your money

This sentiment is often a complaint that the child support payor makes about paying child support. The argument is that the payor pays the other parent monthly child support, and the payor does not know how the support is being spent by the other parent.

In Oklahoma, a child support obligation assumes that all families incur certain child-rearing expenses comprised of housing, food, transportation, basic public educational expenses, clothing, and entertainment. Absent a binding and enforceable agreement between the parents, there is no requirement that the child support funds be used for any specific purpose. In other words, yes, it could happen that a parent pays child support and the other parent uses it for a car, home, or whatever else they wish.

In a dramatic twist of events, “Gold Digger” lyrics include lines that state: Eighteen years, eighteen years / And on the 18th birthday he found out it wasn’t his?

Imagine believing you are the parent of your child, to then find out after 18 years that the child was not yours after all. This can and has happened. There is a published opinion in Oklahoma touching on this very point.

In Miller v. Miller, 1998 OK 24, Mr. Miller sued his ex-wife and her parents for damages for inducing him to marry his ex-wife and knowingly misrepresenting to him that she was pregnant with his child. Mr. Miller sued his ex-wife under the theories of fraud, intentional infliction of emotional distress, and that his ex-wife was unjustly enriched equal to the amount of child support he paid his ex-spouse per month.

The Oklahoma Supreme Court held that Mr. Miller had a viable claim for fraud and intentional infliction of emotional distress, but not for unjust enrichment for the child support he paid his ex-wife. To avoid such a situation, if there is any question or doubt that you are the father of a child, then genetic testing can be performed to establish your parentage, or lack thereof, to hopefully avoid the situation described above.

To side-step the mishaps that West sings about in “Gold Digger,” he attempts to provide his listeners with some words of wisdom. “Gold Digger” contains the lyrics: Holla, “We want prenup! We want prenup!” / It’s something that you need to have / ‘Cause when she leave yo’ ass, she gon’ leave with half

While these lyrics are not bad advice, the part about leaving you with half without a “prenup” is not always true. In Oklahoma, the courts divide the marital estate equitably, which does not always mean equally. However, in most circumstances, the Court attempts to divide the marital estate equally, but there may be circumstances that warrant a disproportionate division.

Oklahoma does recognize and enforce a valid prenuptial agreement. However, at this time, it does not recognize a post-nuptial agreement. Thus, if you want to determine how your estate will be divided upon death or divorce, you must execute a prenuptial agreement prior to marriage.

Additionally, while a prenuptial agreement can allow a couple to determine matters related to the division of their estate and support alimony, it cannot be used to determine custody, visitation, and child support. Issues related to children are always subject to the Court’s determination and what is in the best interest of the children.

And remember, as I stated earlier in the article: Now, I ain’t saying she a gold digger


For more information about this article or any other Family Law inquiries, please call Robert K. Campbell at 405.606.4797 or email him at rkcampbell@phillipsmurrah.com.

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OSHA issues updated guidance on workplace COVID-19 prevention programs

By Lauren Symcox Voth

The Occupational Safety and Health Administration (“OSHA”) published updated COVID-19 guidance for businesses on Friday, Jan. 29, 2021. The guidance, Protecting Workers:  Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace, (“Guidance”) outlines obligations for employers to comply with OSHA’s General Duty Clause during the pandemic and draws on previously published OSHA and Centers for Disease Control guidance.[1]  OSHA emphasizes the need for employers’ to plan and prepare to protect employees in the workplace from COVID-19.  The Guidance states that it does not create any new legal requirements for employers, but instead provides more detail on “existing mandatory safety and health standards.”  OSHA implies the Guidance may be used for purposes of enforcing employer compliance with COVID-19 prevention programs.

Stock image of industrial worker wearing a mask

(Adobe Stock)

OSHA recommends employers include employees in the development of company prevention programs.  OSHA takes a stronger stance on masking requirements for employees and anyone entering the workplace, physical distancing of employees and non-employees, installing barriers to protect employees, and improved ventilation to prevent the spread of COVID-19 in buildings.

OSHA considers the following to be essential to an effective COVID-19 prevention program.  Many of these elements have been in place for employers for several months.  Companies can benefit from documenting these elements to ensure a cohesive and complete COVID-19 prevention program.  A comprehensive COVID-19 Prevention Program should address the following elements:

  1. Assignment of a workplace coordinator, centralizing responsibility and communication from the company to employees regarding COVID-19 issues.
  2. A Company assessment of hazards in order to identify where and how workers might be exposed in the workplace.
  3. Identify the combination of measures that will limit the spread of COVID-19 in the workplace, which includes prioritizing what controls are most effective and least effective. For example, sending home people with a known exposure, physical distancing, improving ventilation, and cleaning routines.  The Guidance states face coverings should include “at least two layers of tightly woven fabric” and “Employers should provide face coverings to workers at no cost”.
  4. Consider protections for workers at higher risk for severe illness through supportive policies and practices. This element may overlap with an employer’s federal obligations under the Americans with Disabilities Act, Family Medical Leave Act, or state statutory obligations for accommodating disabled employees to protect them from the risk of contracting COVID-19.
  5. Establish a system for communicating effectively with workers in a language they understand. This includes communicating to employees about COVID-19 hazards and a method for employers to receive communications from employees, without fear of reprisal or discrimination.  The communication plan should allow employees to report illness, exposures, hazards, and closures related to COVID-19.
  6. Educate and train workers on company COVID-19 policies and procedures using accessible formats and in a language employees understand. This includes education on COVID-19, prevention policies, and making sure employees understand their rights to a safe and healthful work environment.
  7. Instruct workers who are infected or have potential exposure to stay home, isolate or quarantine to prevent or reduce the risk of spreading COVID-19. OSHA states that absences to prevent or reduce the spread of COVID-19 should be non-punitive.
  8. Minimize the negative impact of quarantine and isolation on workers. OSHA believes this can be achieved by employers permitting remote work or allowing employees to work in areas isolated from others.  OSHA also encourages implementation, or allowing the use of, paid sick leave policies for time off work.  In some states employees may be entitled to COVID-19 related leave.  Although the paid leave requirements in the Families First Coronavirus Response Act expired on December 31, 2020, employers may continue these leave policies and can find more information here [insert link to PM article].  Employers should continue to watch for further changes in federal and state paid leave requirements in 2021.
  9. Isolate, send home and encourage medical attention for employees who show symptoms.
  10. Perform enhanced cleaning and disinfection after people with suspected or confirmed COVID-19 have been in the facility. This may include closing areas, opening doors or windows, waiting to clean, and using disinfectants appropriate to clean COVID-19.
  11. Provide state and local guidance on screening and testing.
  12. Record and report COVID-19 infections and deaths on the company’s Form 300 logs according to OSHA standards. Outbreaks should also be reported to the local health department for contact tracing.  Employers are also prohibited from retaliating or discriminating against employees who speak out about unsafe working conditions or report infection or exposure to COVID-19 in the workplace.
  13. Implement protections from retaliation and set up an anonymous process for workers to voice concerns about COVID-19-related hazards.
  14. Make a COVID-19 vaccine or vaccination series available at no cost to all eligible employees.
  15. Employers should not distinguish between workers who are vaccinated and those who are not. This means that vaccinated employees must still comply with all COVID-19 protective policies including but not limited to physical distancing, masking, and other steps necessary to limit transmission.
  16. Apply all other applicable OSHA standards and requirements (i.e. respiratory protection, sanitation, etc.) to ensure that the company provides a safe and healthful work environment free from recognized hazards that can cause serious physical harm or death.

The Guidance provides additional detail for implementing these essential elements to a COVID-19 prevention program, including procedures for isolating infected or potentially infected employees, physical distancing guidelines, physical barrier guidelines, face coverings, cleaning and ventilation improvements.

This OSHA Guidance is likely the first of many updates to COVID-19 prevention procedures for employers in 2021.  Employers should review the full Guidance for more information on COVID-19 prevention programs and keep watch for more information from OSHA, the U.S. Department of Labor, and the Equal Employment Opportunity Commission regarding employer obligations.

[1] The General Duty Clause requires employers to provide employees with a work environment “free from recognized hazards that are causing or likely to cause death or serious physical harm.”  OSH Act of 1970, §5(a).


Attorney Lauren Symcox Voth

For more information on this alert and its impact on your business, please call 405.606.4740 or email me.

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

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LLCs often struggle to qualify for diversity jurisdiction

By Justin G. Bates

This article appeared as a Guest Column in The Journal Record on Jan. 27, 2021.

LLCs have quickly become the dominant legal entity of the 21st century for various reasons. Like any business entity, LLCs frequently find themselves involved in litigation. When a dispute reaches its boiling point, many businesses prefer to litigate in federal court because of, among other advantages, rigid deadlines and the assurance of a highly qualified presiding judge.

Justin G. Bates is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

However, LLCs often struggle to qualify for access to the federal judicial system via “diversity jurisdiction,” which requires the citizenship of the plaintiff and defendant to be completely diverse. In other words, no plaintiff can be from the same state as any defendant.

Existing case law deems an LLC a citizen of every state in which its members reside, and likewise for a partnership. By contrast, a corporation is a dual citizen of both: (1) its state of incorporation; and (2) its principal place of business.

For an LLC to qualify for diversity jurisdiction, federal courts require a nuanced member-by-member analysis. For a single-member or “mom and pop” LLC, determining citizenship is simple. However, larger LLCs pose complex and time-consuming difficulties. Larger LLCs often have dozens of members, including corporations, individuals, partnerships, and even other LLCs.

In such a situation, the citizenship of all entities must be determined, including any sub-entities that may have partners or members of their own, who, in turn, may have additional partners or members. The exercise is theoretically endless, and, more practically, expensive and burdensome. The more members there are, the greater the odds that complete diversity will not exist.

As a practical example, if an Oklahoma individual, invoking diversity jurisdiction, wishes to sue an LLC in federal court, and the LLC has one member who is a citizen of Oklahoma, the court will dismiss the lawsuit for lack of subject matter jurisdiction. Relatedly, if an LLC is sued and wishes to remove the case to federal court, it too must ensure that its members (and their member’s members) are completely diverse from the plaintiff.

Organizing a company as an LLC provides many advantages, and LLCs continue to represent the lion’s share of business entities incorporated in the 21st century. However, any business that anticipates finding itself in federal court should consider the issues discussed above, which can operate to their benefit (or detriment).


For more information on how the information in this article may impact your business, please call 405.552.2471 or email Justin G. Bates.

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Limitations of the Texas Citizens Participation Act

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

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

By Laurel L. Baker |

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

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

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

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

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

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


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


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

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

Employee or independent contractor? DOL finalizes new rule

By Michele C. Spillman

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

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

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

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

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

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

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

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

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


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

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

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

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

By Janet A. Hendrick

Janet Hendrick

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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Employment Law Update: EEOC Issues Guidance Regarding COVID-19 Vaccine in the Workplace

By Phoebe B. Mitchell

On December 16, 2020, the EEOC published its highly anticipated guidance regarding the COVID-19 vaccine in the workplace. The guidance addresses employment law issues related to the vaccine under the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, and Title II of the Genetic Information Nondiscrimination Act (GINA).

Covid vaccine imageThe new guidance provides instruction for employers regarding situations where an employee indicates that he or she is unable to take the vaccine due to a disability. First, the employer should determine if the unvaccinated employee poses a “direct threat” to the workplace, meaning that the employee poses a “significant risk of substantial harm to the health and safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.”

Employers should conduct an “individualized assessment” of the following four factors to determine whether a “direct threat” exists:

  1. Duration of the risk
  2. Nature and severity of the potential harm
  3. Likelihood that potential harm will occur
  4. Eminence of potential harm

Recall, however, that the EEOC has already classified COVID-19 as a “direct threat” in the workplace. Thus, it is unclear going forward how the EEOC will apply its previous “direct threat” determination to an employer-mandated vaccine requirement. Until additional clarifying information is published by the EEOC, employers should individually analyze each employee’s request for a reasonable accommodation using the above factors.

If a reasonable accommodation exists that would eliminate the risk that the unvaccinated employee poses a direct threat to the workplace, and the reasonable accommodation does not cause undue hardship on the employer, the employer should allow the unvaccinated individual to continue working, utilizing the reasonable accommodation. However, if an employer can show that the unvaccinated employee poses a “direct threat,” and the employer cannot provide a reasonable accommodation absent undue hardship, the employer may exclude the employee from the workplace. Exclusion from the workplace does not automatically mean an employer may terminate the unvaccinated employee. The EEOC guidance specifically states that allowing an employee to perform current work remotely is an acceptable reasonable accommodation for an unvaccinated employee.

The EEOC guidance also reminds employers of the importance of frontline supervisor training:

“Managers and supervisors responsible for communicating with employees about compliance with the employer’s vaccination requirement should know how to recognize an accommodation request from an employee with a disability and know to whom the request should be referred for consideration.”

Employers whose managers and supervisors lack training on the proper response to reasonable accommodation requests may expose themselves to liability under the ADA. Further, the guidance cautions employers that disclosing information regarding reasonable accommodations or disabilities to anyone without a need to know violates the ADA.

Moreover, the guidance makes clear that pre-vaccination medical screening questions will likely elicit information about a disability from the patient. Thus, if an employer or a third-party contractor of the employer asks the pre-vaccination medical screening questions, the questions will be considered “disability-related” under the ADA. Therefore, employers must show that these disability-related screening questions are “job-related and consistent with business necessity.” To achieve this, an employer must have a reasonable belief, based on objective evidence, that an employee who does not answer the questions and thus is not vaccinated will pose a direct threat to the health and safety of himself or others.

Additionally, the guidance clarified that, under Title VII, employers must provide a reasonable accommodation for employees who refuse the vaccine based on a sincerely held religious belief, practice or observance, unless the reasonable accommodation would cause an “undue hardship” on the employer. An “undue hardship” means anything more than a “de minimis” cost or burden on the employer. If the employer has an objective basis for questioning the religious nature or the sincerity of a belief, practice or observance, the employer may request additional information from the employee. If there is no reasonable accommodation available, an employer may lawfully exclude an employee who refuses the vaccine based on a sincerely held religious belief. Again, exclusion from the workplace does not mean an employer may automatically terminate the employee. As always, employers must determine if the employee has other rights under the Equal Opportunity Employment laws or other federal, state or local authorities.

Lastly, the guidance made clear that requiring the vaccine itself does not constitute a “medical examination under the ADA or implicate Title II of GINA. Employers should consult with their employment counsel for additional guidance on addressing concerns about the COVID-19 vaccine in the workplace. Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients.


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SCOTUS declines to hear same-sex parent case

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By Janet A. Hendrick and Mark E. Hornbeek

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

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

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

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

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

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

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


Janet Hendrick

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

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

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Employers should prepare for COVID-19 vaccine in the workplace

By Phoebe B. Mitchell

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

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

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

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

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

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

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

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

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

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

May an Employer Terminate an Employee Who Refuses the Vaccine?

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

Who Pays for a Mandated COVID-19 Vaccine?

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

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


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Richard, healthcare counsel to review Stark Law, Anti-Kickback Statute final rules

By Phillips Murrah Healthcare Attorney Mary Holloway Richard

Oklahoma Opioid Decision by Phillips Murrah healthcare attorney 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.

Final Rules have been issued for both the Stark Law (“Stark”) and the Anti-Kickback Statute (“AKS”).  Healthcare providers and their counsel have been awaiting these new rules for some time now.  In the days ahead, Phillips Murrah healthcare counsel will be studying the 627 pages of the Stark Final Rules and the 1,000 pages of the AKS Final Rules in order to advise our clients with regard to these changes.

Stark: 

The Final Rules for Stark establish new and permanent exceptions for value-based arrangements which will apply broadly to care provided for all patients and not just Medicare patients.  Stark will continue to act to limit overutilization of services, fraud and other abuse in the healthcare industry but will offer increased flexibility for current strategies and activities to encourage value-based arrangements, coordination and improvement of care which are both reasonable and beneficial to patients.

AKS: 

The Final Rule includes seven new safe harbors and modifications of four existing safe harbors.  In addition, there is a new exception for Civil Monetary Penalties Act for Beneficiary Inducements.  Of interest to counsel for both physicians and hospitals is the Final Rule’s clarification of Fair Market (“FMV”) as related to physician compensation.  FMV has been a continued troublesome of scrutiny and debate by all participants in the healthcare industry.  Also significant for many healthcare clients are the modifications and clarification of provisions related to cyber security and digital technology.

COVID-19 Update: Okla. Gov. Stitt issues new restrictions, U.S. DOL updates face mask FAQs

By Phoebe Mitchell and Martin Lopez III

COVID-19 Update: Oklahoma Governor Kevin Stitt Issues New Restrictions

Against the backdrop of surging numbers of COVID-19 cases in Oklahoma, Governor Stitt recently announced the Seventh Amended Executive Order 2020-20. In addition to the protective measures afforded by the previous iterations of the Executive Order, this newest version adds restrictions to restaurants and bars and institutes a mask mandate for those in government-owned buildings.

Face Coverings at WorkEffective November 17, 2020, restaurants and bars across the state of Oklahoma are required to institute proper social distancing measures. Specifically, restaurants and bars are now required to ensure a minimum of six (6) feet of separation between parties or groups at different tables, booths, or bar tops, unless the tables are separated by properly sanitized glass or plexiglass. In addition, Effective November 19, 2020, food or beverages of any kind shall not be sold, dispensed, or served for on-premises consumption after 11:00 p.m. daily. This new restriction does not affect a restaurant’s ability to operate via drive-thru windows or by curbside pickup after the 11:00 p.m. cutoff. Sales and service of food and non-alcoholic beverages may resume at 5:00 a.m. the next day, and the sale and service of alcoholic beverages for on-premises consumption may resume at 8:00am.

Effective November 17, 2020, all persons on property owned or leased by the State of Oklahoma—including both state employees and visitors to the property—are required to wear a mask or similar facial covering. Notable exceptions to this mask mandate are children under the age of ten (10), when a person is alone in an enclosed space, when an individual has a bona fide religious objections to wearing a mask or facial covering, and when an individual is eating or drinking.

U.S. Department of Labor Updates Frequently Asked Questions Regarding Cloth Face Coverings at Work

On the heels of the Centers for Disease Control and Prevention’s (CDC) recently issued scientific brief regarding the use of cloth masks to control the spread of COVID-19, the United States Department of Labor (DOL) updated its Frequently Asked Questions regarding the same issue.

The CDC’s scientific brief states that masks are principally intended to reduce the spread of the virus from asymptomatic or presymptomatic infected wearers who may not know they can infect others with COVID-19. This type of protection is called “source control.” Additionally, masks help to reduce inhalation of the virus by the wearer, protection dubbed “filtration for personal protection.” Thus, based on these findings, the CDC recommends community use of non-valved multi-layer cloth masks.

Even still, the Occupational Safety and Health Administration (OSHA) stated that “not enough information is available to determine whether a particular cloth face covering provides sufficient protection from the hazard of COVID-19 to be personal protective equipment (PPE) under OSHA’s standard.” Thus, at this time, OSHA does not consider cloth face coverings to be PPE. OSHA’s update is consistent with the CDC’s scientific brief, which states more research is needed to ascertain the exact protective effects of cloth masks.

OSHA still strongly encourages employees to wear face coverings at work, especially when in close contact with others, in order to reduce the spread of COVID-19.


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

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

Martin Lopez III is an Associate in the Oklahoma City office of the firm. (click name for profile page) Contact him by phone, 4405.552.2418, or by email.

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

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Vicarious liability – Physicians can take steps to minimize risk

The following column was originally published in The Journal Record on October 5, 2020.


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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.

By Phillips Murrah Attorney Martin J. Lopez III

Between 2003 and 2020, the number of certified physician assistants practicing in the United States increased by over 220%. Set against this landscape of PA’s increasing role in health care, supervising physicians must be especially mindful of their responsibilities.

According to the Oklahoma’s Physician Assistant Act, a PA may practice medicine and prescribe drugs and medical supplies only under the supervision and direction of a state-licensed physician. The OPAA requires that the supervisory relationship be articulated and agreed upon by means of a practice agreement, which accounts for protocols and the scope of practice, as well as the PA’s education, training, skills and experience.

For physicians already juggling a busy patient caseload and bearing the responsibility of supervision and delegation of decision-making authority for up to four PAs at once, it is not uncommon for them to abrogate this responsibility by taking a hands-off or passive approach to this working relationship. However, they must be aware that the governing statute establishes that “at all times, a physician assistant shall be considered an agent of the delegating physician.”

This is known in the law as establishing vicarious liability. While no reported case in Oklahoma has actually held a physician vicariously liable for the acts or omissions of a PA, the statutory language creates the possibility of the extension of PA liability to the supervising physician.

While supervising physicians need not be physically present nor consulted in each instance of PA patient care, they must be readily available through telecommunication and appropriately participate in services provided by the PA. The statute specifically notes the supervising physician must:

  • Be responsible for the formulation or approval of all orders and protocols that direct the delivery of services provided by a PA, and periodically review such orders and protocols.
  • Regularly review the services provided by the PA and any problems or complications encountered.
  • Review a sample of outpatient medical records at a site specified in the practice agreement.
  • While the OPAA sets forth the scope of physician supervision of a PA and participation in a PA’s practice, there are a number of steps that can be taken to minimize physician risks of vicarious liability:
  • Pay careful attention to credentials and qualifications during the PA hiring process.
  • Ensure that the practice agreement includes a listing of the PA’s scope-of-practice responsibilities, and the requirements and limitations of the physician’s delegation authority.
  • Specify aspects of care that require prior physician consultation or approval.
  • Include language setting out the manner in which the record review requirement will be met by the PA and physician.

Once the PA begins practice, the supervising physician is advised to actively monitor the PA to ensure compliance with the practice agreement and that the PA provides patient care in a manner that does not exceed the PA’s level of skill and competence. Likewise, the physician should foster an environment in which the PA’s consultation with the physician is not perfunctory, but is actively encouraged to a meaningful extent to further the care rendered to the patient.

As with so many issues in health care today, risk is based not only upon regulatory language but also upon an analysis of the facts. Potential vicarious liability risk is mitigated by beginning with a practice agreement that takes all of these requirements and concerns into account.

Martin J. Lopez is an attorney at the law form of Phillips Murrah.

Proactive tech considerations in the era of the virtual workplace

The following column was originally published in The Oklahoman on October 4, 2020.


Hilary Hudson Clifton Web

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 H. Clifton

As thousands of workers continue to clock in remotely each day, many businesses are still learning the ins-and-outs of the virtual collaboration platforms their employees are using.

Microsoft Teams, Slack, Google Docs, BlueJeans, Trello, and, of course, the ubiquitous Zoom, are only a few of the programs that have recently evolved from helpful but perhaps underutilized tech tools, to vital aspects of daily operations.

In the rush to adapt to these new realities, however, savvy businesses should be deliberate when selecting and utilizing virtual collaboration tools.

Though only time can play out the range of virtual workplace conduct that might cause headaches for businesses and employers, cautionary tales are emerging. For example, one doctoral student at Stockton University in New Jersey found himself facing potential disciplinary action after using an image of President Trump as his screen background during a class being held via Zoom.

Though his apparent political statement was likely intentional, it’s not difficult to imagine how one might make an inadvertent statement — political or otherwise — via a video conference background.

A controversial book on a bookshelf or a political poster hanging in a home office might become pertinent, for example, in an employee’s suit against a supervisor, or a family photograph of a luxury vacation might raise questions in a collection lawsuit.

In addition, long before the pandemic, businesses have been grappling with managing, storing, and retrieving vast quantities of electronic data.

In the age of telework, the built-in chat functionalities found in many applications allow users to forego traditional email and participate in fast-paced conversation threads that can promote informality and create huge quantities of data that might be mined by opposing parties in litigation.

Video conferencing platforms also often include a “chat” functionality, allowing participants to send private and/or public messages to one another during the course of a meeting, with those chats potentially, and potentially unbeknownst to the participants, becoming part of a memorialized “transcript” following the meeting.

Fortunately, many applications already have built-in features to deal with some of these concerns.

Zoom users can brush up on how to control private “chat” capabilities by visiting the support section of their website. For fans of Microsoft Teams, Microsoft has a page devoted to mining group chats for discoverable content.

To be truly proactive, however, businesses relying heavily on telework should consider implementing an express telework policy that covers the use of video conferencing and other collaboration platforms.

Employers could include policies stating whether video conferences will be recorded, or requiring that employees use a neutral background during business-related conferences (to make marketing lemonade out of pandemic lemons, many companies have created their own branded Zoom backgrounds).

Additionally, having a policy in place that specifies which programs employees are permitted to use for work-related communications can help streamline the retention and retrieval of important data. Though continuing to do business in the midst of Covid-19 can feel like an overwhelming minefield of uncertainties, proactive businesses can nevertheless adapt and thrive by taking control of their virtual workplaces.

Hilary H. Clifton is an attorney at the law firm of Phillips Murrah.

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

By Phoebe B. Mitchell

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

DOL proposal contracting

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

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

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

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

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

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

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

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

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

The individual’s opportunity for profit or loss

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

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

Three other factors

The proposed rule includes three other factors:

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

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

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

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

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


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

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Clients seek lower costs for legal services

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

Force majeure clauses and COVID-19

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on September 17, 2020.


By Phillips Murrah Attorney Kendra M. Norman

Kendra Norman Web

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

Force majeure clauses are common clauses in contracts that allocate risk between parties and release a party from liability or obligations during unforeseeable or unpredictable events that are out of the party’s reasonable control.

These events can generally be referred to as acts of God or can be specifically listed in the agreement, often including events like war, strikes, riots or government actions. However, it should be noted that there is not a specific set of events that come under the definition of “acts of God” – this often depends on the context of the contract and the jurisdiction.

Force majeure clauses are ever-evolving and the language used has been influenced by events around us. Before 9/11, most force majeure clauses didn’t include terrorism as a force majeure event. This spurred litigation between parties regarding whether terrorism was an act of God that should be covered by the force majeure clause to excuse performance. Now, terrorism and terrorist attacks are often specifically set forth in force majeure clauses.

The conversation about force majeure clauses now revolves around whether the COVID-19 pandemic qualifies as an act of God and how this will affect contracts. As always, this depends on the type of contract, the language set forth in the contract, the context of the contract, the intent of the parties, and the governing law of the contract. Therefore, this determination is highly fact-specific and depends on several factors.

It is possible that COVID-19 could be considered an act of God in some contracts, or it could fall under force majeure clauses that contain specific references to disasters, national emergencies, government regulations or generally acts beyond the control of the parties. With the extraordinary potential consequences from COVID-19 yet to be determined, businesses should begin ascertaining whether their material contracts contain force majeure provisions and how such provisions may affect their rights and responsibilities going forward. However, given the widespread impact of COVID-19, it is possible that parties may be more likely to negotiate amendments to agreements that have been impacted by COVID-19 rather than forcing parties to rely on and litigate force majeure clauses.

Nevertheless, going forward, those entering into contracts should consider whether adding more specific terms such as epidemic, pandemic or infectious disease as force majeure events will be advantageous for them in the future.

Kendra Norman is an attorney with the law firm of Phillips Murrah.


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

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

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

Phillips Murrah attorney Jessica Cory

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

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

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

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

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

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

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

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

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


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

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U.S. Dept. of Labor releases paid leave guidance for employees with children returning to school

Janet Hendrick

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

The U.S. Department of Labor issued additional guidance on Thursday, Aug. 28 regarding employees taking paid leave under the FFCRA. This update from the DOL comes soon after the United States District Court for the Southern District of New York issued an opinion invalidating four DOL regulations interpreting the FFCRA: (1) the “work-availability” requirement; (2) the definition of a “health care provider”; (3) the intermittent leave regulation; and (4) the documentation requirements.[1] Thus, the new guidance indicates that the DOL will follow and has adopted the New York Federal Court’s opinion.

For employees who have children returning or who have returned to school, DOL added the following three Families First Coronavirus Response Act Questions and Answers to help employers and employees understand under which circumstances employees may take paid leave of work.

  • My child’s school is operating on an alternate day (or other hybrid-attendance) basis. The school is open each day, but students alternate between days attending school in person and days participating in remote learning. They are permitted to attend  school only on their allotted in-person attendance days. May I take paid leave under the FFCRA in these circumstances? (added 08/27/2020)

Yes, you are eligible to take paid leave under the FFCRA on days when your child is not permitted to attend school in person and must instead engage in remote learning, as long as you need the leave to actually care for your child during that time and only if no other suitable person is available to do so. For purposes of the FFCRA and its implementing regulations, the school is effectively “closed” to your child on days that he or she cannot attend in person. You may take paid leave under the FFCRA on each of your child’s remote-learning days.

  • My child’s school is giving me a choice between having my child attend in person or participate in a remote learning program for the fall. I signed up for the remote learning alternative because, for example, I worry that my child might contract COVID-19 and bring it home to the family. Since my child will be at home, may I take paid leave under the FFCRA in these circumstances? (added 08/27/2020)

No, you are not eligible to take paid leave under the FFCRA because your child’s school is not “closed” due to COVID–19 related reasons; it is open for your child to attend. FFCRA leave is not available to take care of a child whose school is open for in-person attendance. If your child is home not because his or her school is closed, but because you have chosen for the child to remain home, you are not entitled to FFCRA paid leave. However, if, because of COVID-19, your child is under a quarantine order or has been advised by a health care provider to self-isolate or self-quarantine, you may be eligible to take paid leave to care for him or her. See FAQ 63.

Also, as explained more fully in FAQ 98, if your child’s school is operating on an alternate day (or other hybrid-attendance) basis, you may be eligible to take paid leave under the FFCRA on each of your child’s remote-learning days because the school is effectively “closed” to your child on those days.

  • My child’s school is beginning the school year under a remote learning program out of concern for COVID-19, but has announced it will continue to evaluate local circumstances and make a decision about reopening for in-person attendance later in the school year. May I take paid leave under the FFCRA in these circumstances? (added 08/27/2020)

Yes, you are eligible to take paid leave under the FFCRA while your child’s school remains closed. If your child’s school reopens, the availability of paid leave under the FFCRA will depend on the particulars of the school’s operations. See FAQ 98 and 99.

These changes show that employer compliance with the New York Federal Court opinion is crucial – even for employers outside of that jurisdiction. The DOL could continue to release new guidance based on other Federal Court decisions examining FFCRA regulations.

[1] State of New York v. United States Dep’t of Labor, 20-CV-3020 (S.D.N.Y. 2020). A copy of the opinion is located at: https://www.fmlainsights.com/wp-content/uploads/sites/813/2020/08/State-of-NY-v.-USDOL.pdf.


For more information on this article and its impact on your business, please call 214.615.6391 or email Janet A. Hendrick.

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

Stay informed with COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Teleworking and an Employer’s Woes of Record Keeping

Portrait of Byrona J. Maule

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

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

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

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

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

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

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

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

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


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

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

Courthouse in lower ManhattanBy Phoebe B. Mitchell

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

1) “Work-availability” requirement

2) Definition of “health care provider”

3) Intermittent leave

4) Documentation requirements

“Work-Availability” Requirement

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

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

Definition of “Health Care Provider”

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

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

and

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

Final Rule at 19,351 (§ 826.25).

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

Intermittent Leave

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

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

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

Documentation Requirement

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

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

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

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

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

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


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

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Does COVID-19 constitute a material adverse effect?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on August 6, 2020.


In addition to a vast human toll, COVID-19 has wreaked havoc on businesses, markets and supply chains. With infections still spreading, businesses have suffered cash and liquidity constraints and anticipate such suffering to continue.

The pandemic also presents unique risks to parties in acquisition agreements, such as risks concerning the financial viability of the target company. Parties often address these risks by including material adverse effects, or MAE, clauses.

Generally speaking, an MAE is an event, circumstance, change or effect that presents a material threat to the business of the target company. MAE clauses account for this possibility and allocate risk among the parties.

Such clauses are frequently used as conditions to closing and qualifiers to the seller’s representations. If the target company suffers an MAE as defined in the agreement, the clause allows the buyer to unilaterally terminate the deal without being considered in breach of contract. The seller can qualify representations made about the condition of the target company, making it more difficult for a buyer to assert a breach. Also, exclusions to the definition of an MAE are identified, such as industrywide market conditions.

One increasingly common issue is whether COVID-19 constitutes an MAE. The following questions may help determine the answer and assist parties in the negotiation stages:

  • Are there MAE exclusions such as epidemics, pandemics and natural disasters?
  • Has COVID-19 resulted in unique issues for the target company that are disproportionate to other companies in the same industry?
  • Is the buyer obligated to use certain efforts to close the deal notwithstanding events that affect the financial condition of the target company?
  • What other limitations apply to an MAE? For example, can events only occurring after executing the agreement qualify as an MAE?
  • Have the parties contractually shifted the burden to the seller to prove that an MAE has not occurred?

While these questions may provide guidance on the issue, establishing whether an MAE has occurred is a highly fact-intensive issue that depends on the unique circumstances involved and the specific language used in the acquisition agreement. It should also be noted that buyers have faced a significant burden in court to show that any event meets the criteria of an MAE. As more parties litigate the issue, the courts will play an important role in establishing precedent that will shape how parties negotiate acquisition agreements.

 

What is the status of evictions and foreclosures in Oklahoma amidst the COVID 19 pandemic?

By Gretchen M. Latham

In March 2020, the State Supreme Court entered an Order extending statutory deadlines, which included an extension of any answer deadline on pending civil cases. For foreclosure actions, that means many borrowers were given additional time to reply to a Petition in Foreclosure.

However, even though the State Supreme Court subsequently entered additional COVID 19 related orders, the deadline extension has now expired, and some lenders are resuming the foreclosure process. The same is true for eviction matters, which were not put on hold, but rather, the landlord was required to state whether the action at issue was subject to the CARES Act, which covered certain types of transactions.

Gretchen Latham Web

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

The result of these events is that landlords and lenders are likely to begin resuming both evictions and foreclosures, but they should do so only if allowed under existing law and recent legislation.  The need to check on current status of legislation is becoming even more important, as lawmakers in Washington are looking to extend federal employment benefits and the moratorium on evictions.  The situation is ever-changing, and having a complete knowledge of the law is advisable before beginning any eviction or foreclosure.

This is especially true given the short timeline for evictions in Oklahoma. While many landlords opt to undertake these actions on their own – and are permitted to do so – now more than ever it is critical to be fully aware of the changing legal landscape and the uncertainty of when, or if, COVID 19 will be brought to a manageable level. Landlords are wise to be fully aware of their options when the hard decision to evict must be made.

The same is true for foreclosures, where lenders may be required to include a statement as to whether the mortgage loan in question is subject to the CARES Act and may have to provide the Court with additional information when seeking judgment.  For many loans, foreclosures were placed on hold for a period of time. However, this is not true of all loans and is not in place in every state. The differences between what one state has done vs. the choice of a different state can be confusing to lenders, making it essential for lenders to maintain contact with their attorney regarding the status of foreclosures in any given state.

For Oklahoma, some foreclosures are proceeding on schedule now that the extension of statutory answer deadlines has expired.  For lenders that have not yet resumed foreclosures actions in the Sooner State, the time has come to readjust the lawsuit timeline.

Lenders and landlords are wise to sit down with an attorney to talk over their options when these hard foreclosure and eviction decisions must be made.


To discuss your options, contact Gretchen Latham at the contact information below:

Gretchen M. Latham, Attorney
Phillips Murrah P.C.
EMAIL: gmlatham@phillipsmurrah.com
PHONE: 405.606.4774

Phillips Murrah

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

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Equine Estate Planning: What if your horses outlive you?

The following column was originally published in OklahomaHorses Magazine’s July/August 2020 issue.


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 is not an easy topic of discussion, but as a horse owner, it is important to consider the care of your horses after your passing. To ensure proper care and management, it is imperative to make equine-specific prior arrangements as a part of your estate planning.

Careful planning and sound legal advice are central to ensuring the well-being of your horses after your life. Why be so diligent and thorough? The best answer may be to consider what could happen if a horse owner does not take the time and put in the energy to plan appropriately.

In the wrong circumstances, a horse’s fate is up in the air. Without specific guidance and resources set forth in an estate plan, a beneficiary may be surprised by what it takes to appropriately care for a horse or multiple horses. If the beneficiary has little knowledge or interest in caring for them, the horses may not be provided for in the way you desire.

While any estate plan is specific to the particular needs and desires of the person doing the planning, when it comes to planning for horses there are two general considerations with which to begin. First, leave a responsible person in charge with the required knowledge to care for your horse and an ability to make good decisions. Second, carefully specify and plan for the outcome you want for your horses.

 

WHO WILL TAKE OWNERSHIP?

There are several options when considering how to provide for your horses after your death. You may opt to allow your personal representative or trustee to sell them, or leave them in the care of an individual or entity as a beneficiary. If you choose to leave your horses to a beneficiary, you should choose a trusted, capable person who values your horses at a level with which you are comfortable.

It is advisable to consider whether the beneficiary has the resources to care for them. Are they able to cover associated costs, or are you prepared to provide funds? Based on the age of and your intentions for the horses, how much funding should you provide? Are you leaving land and facilities to the beneficiary, or are they in the position to provide the horses with a proper living condition? Over time, how might the beneficiary’s circumstances change that could affect the horses’ future? These are all important factors that you should discuss with your attorney, and finding the right person to trust with such responsibility is an important personal decision.

When planning, gather specific information that the beneficiary will need, such as the health history of all horses, your veterinarian’s name, and costs associated with temporary and permanent care, as well as setting aside required funds, if necessary. Even if your estate plan calls for the horses to be sold, it may be some time before the sale can occur. In the interim, an effective estate plan will take this into account. All aspects need to be well thought out, clear, and specific to protect the horses’ quality of life.

 

WILL OR TRUST?

Another critical decision is how you should structure the equine-related portion of your estate planning. Generally speaking, there are two vehicles for planning an estate that ensure the intensions of the decedent: a will and a trust.

With respect to a will, it is important to note that the estate will probably be required to go through the probate process to verify the legality of the will and ensure distribution according to the decedent’s intentions. Probate is a public, costly and time-consuming court processes that often takes up to nine months to several years, depending on the complexity of the estate and whether any family members challenge the validity of the will.

While probate assets are tied up during administration, the will’s executor has a fiduciary responsibility to care for the estate’s assets, including proper care for the horses. Unless the beneficiary of the horses and the executor are the same person, this could be problematic. Additionally, a will takes effect only upon death, which leaves in question what would happen if you become ill or incapacitated.

A living trust, also known as a revocable trust, is a popular alternative for numerous reasons, including the flexibility and privacy it offers. A living trust can be established for your benefit during your lifetime and provide for the disposition of your assets, including your horses, upon your death. You can specify the beneficiaries who will receive your horses after your death, and money can be set aside in a trust account to fund their care. Additionally, the trust may provide directions for your horses if you become ill or incapacitated, and your horses can be transferred by the successor trustee according to your wishes immediately upon death, avoiding a public probate and related costs and court delays.

Importantly, a living trust must be fully funded to avoid probate. You must transfer your assets to it and change the titles of assets to the name of the trust. A trust and its trustee cannot control any assets that are not transferred to the trust, so it is important to make sure the necessary assets are in the trust and not owned in your personal name.

When funding a trust for the future benefit of your horses, consider that when the trust runs out of money, the financial requirements fall to the beneficiary who becomes the caregiver. If they are unwilling or unable to care for them, the outcome may not be what you had originally intended.

 

PET TRUST

In some states, including Oklahoma, a pet trust may be included in a living trust, or as a stand-alone trust. In 2010, Oklahoma Governor Brad Henry signed HB 1641, which validates trusts for the care of domestic pets. Under such an arrangement, rather than your horse being considered an estate asset within a living trust, you can create a trust where your horses are the initial beneficiary for the rest of their lives.

In a pet trust, a trustee is assigned and compensated for the caregiving and must adhere to accounting requirements. You must also assign a separate trust enforcer to ensure the trustee is abiding by the obligations set forth in the trust. Additionally, you must name a remainder beneficiary. After the horses have passed away or the obligations of the trust are otherwise met, any leftover funds are distributed to the remainder beneficiary or beneficiaries under the guidance of the trust.

This type of trust is beneficial to horse owners, in particular, to ensure the beneficiary will have the financial ability to give the horses the care and treatment that you desire. If a caring and responsible trustee lacks the resources to care for the horses, such a trust will eliminate this issue.

Properly planning for the well-being of your horses in the event that they outlive you is a complicated investment in time, energy and money, but for horse lovers, it is all well-spent. An attorney can help you by drawing up the legal documents stating your intentions to ensure your equine interests are handled in the way you intend.

Kendra M. Norman is an attorney at Phillips Murrah who represents clients in a broad range of transactional matters, including estate planning and business succession.

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

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

From a New York Times article:

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

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


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

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

Phillips Murrah

Efficiency programs help reduce energy load, costs

The following column was originally published in The Journal Record on June 30, 2020.


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.

By Phillips Murrah Attorney C. Eric Davis

Summer’s here. That means warmer weather – and higher electric bills. However, there are ways to reduce your energy usage and save money. And chances are your utility company already has programs in place to help you do it.

If you’re unfamiliar with these programs, you’re not alone. Most people don’t think to turn to their electric company to learn how to use less energy. But in fact, utilities across the state, including Oklahoma’s two largest, have a variety of programs to help consumers avoid energy waste and lower their bills. Despite their effectiveness, many customers are unaware of these programs, and this knowledge gap was a topic of discussion at a recent multi-day Town Hall held by statewide nonprofit The Oklahoma Academy. The conclusions from the Town Hall were subsequently announced at a press conference with elected officials.

At the press conference, The Oklahoma Academy released recommendations concerning the state’s energy future. These included increasing Oklahomans’ awareness of energy efficiency and demand response programs that are designed to avoid energy waste or shift energy usage to times when the grid is less strained. The aim of the programs is to reduce utilities’ overall electricity demand, which has several benefits. One, it reduces the need, thus expense, for utilities to build additional generation plants and power lines. As a result, associated environmental impacts are reduced and customers’ electricity bills decrease. Moreover, dollar for dollar, experts consider these programs to be among the most cost-effective investments for utilities to serve their load.

So, what types of programs are available? Depending on your utility, you may be eligible to have an energy efficiency consultant visit your home, have your HVAC system tuned up, or even have your home weatherized. Likewise, specialized energy efficiency and demand response programs may be available to commercial and industrial customers, such as rebates for upgrading to more efficient heating, cooling, and lighting systems, or lower rates for customers who shift energy usage to periods when the electric system has more capacity.

Because the costs of these services may be spread among all customers, many times there is no additional cost for those taking advantage of them. So, take the advice of The Oklahoma Academy and explore what programs are out there. You can save money, help the environment, and give the grid a break.

Eric Davis is an attorney at Phillips Murrah and a member of The Oklahoma Academy. Davis also participated in The Oklahoma Academy’s town hall on Oklahoma’s energy future.

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

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

Mid-Market Strategy to Achieve Cost Reductions that Clients Seek

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

Mark Golman portrait image

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

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

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

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

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

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

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

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


Learn more HERE.

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

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

Supreme Court Rules Title VII Protects Gay and Transgender Employees

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

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

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

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

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

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

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

See the United States Supreme Court opinion HERE.


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

Contact us by EMAIL or call 405.235.4100.

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

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

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

Phillips Murrah attorney Ellen SpiropoulosLauren Hanna

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

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

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

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

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

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


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

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

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

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

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