Biden administration aims to limit non-compete agreements

By Janet A. Hendrick and Martin J. Lopez III

This article appeared as a Guest Column in The Journal Record on July 14, 2021.

attorneys Martin J. Lopez III and Janet A. Hendrick

Martin J. Lopez III and Janet A. Hendrick

On July 9, President Biden issued Promoting Competition in the American Economy, a sweeping policy-based executive order that purports to encourage innovation and competition in the American workplace. Earlier that day, the White House issued a press release addressing the initiatives, one of the most notable being a goal of “banning or limiting non-compete agreements and unnecessary, cumbersome occupational licensing requirements that impede economic mobility.”

Although non-competes and similar restrictive covenants are banned or limited in a handful of states, including Oklahoma, they remain alive and enforceable in most states, including Texas, as long as they meet certain requirements – generally that they are reasonable in time and territory and necessary to protect a legitimate business interest. A 2016 U.S. Department of the Treasury report cited data showing that 15% of workers without a four-year college degree were subject to non-competes, as were 14% of workers bringing home less than $40,000 per year. The Biden administration claims that “[c]ompetition in labor markets empowers workers to demand higher wages and greater dignity and respect in the workplace” and that “[r]oughly half of private-sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers.”

So, does the Biden administration’s executive order prohibit or limit non-competes? The short answer is “no” or at least “not yet.” The executive order creates the White House Competition Council and directs federal rulemaking authorities to consider competition-related issues. Specifically, the order asks the Federal Trade Commission to exercise its statutory rulemaking authority to curtail what it deems “the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”

President Biden’s recently confirmed FTC chair, Linda Khan, appears to be a zealous advocate of the goals of the executive order, at least as it relates to the use of non-compete agreements in the employment context. In a 2019 law journal article, she took the position that non-compete agreements “deter workers from switching employers, weakening workers’ credible threat of exit, and diminishing their bargaining power” and suggested that “the FTC might consider engaging in rulemaking on this issue.”

While such rulemaking is a possibility, it is unclear to what extent the FTC will address the issue. The administration will also certainly face multiple legal challenges by businesses, leading some to predict the FTC will approach this rulemaking cautiously.

Phillips Murrah’s Labor and Employment attorneys continue to monitor this development.


Janet Hendrick portrait

Janet Hendrick is a Director and member of the Firm’s Labor and Employment Practice Group.

For more information on this alert and its impact on your business, please call 469.485.7334 or email me.

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Executive order addresses cybersecurity

By Natalie M. McMahan

This article appeared as a Guest Column in The Journal Record on June 23, 2021.

Cybercriminals have held a number of industries hostage in recent months, and otherwise exploited companies’ vulnerabilities to profit directly from the stolen data. Most notably, ransomware attacks shut down meat producer JBS and the Colonial Pipeline. Other recent data breaches affected McDonald’s, Volkswagen, and approximately 100 companies using SolarWinds. Last month, the city of Tulsa suffered its own shutdown caused by a ransomware attack.

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

On May 12, the president issued an executive order outlining the administration’s plans to address “malicious cyber campaigns that threaten” both the public and private sectors. The Biden administration also created a new cybersecurity role on the National Security Council; Deputy National Security Advisor Anne Neuberger recently met with the National Association of Attorneys General to discuss the administration’s ransomware strategy. She has also engaged business leaders to work with the federal government in its efforts to elevate cybersecurity issues.

The cybersecurity executive order matters because it will push industry and those that do business with the federal government to implement heightened security protocols.

Here are some key takeaways from the executive order that may be aspirational but will certainly be influential:

  • Removing barriers to sharing threat information.
  • Modernizing cybersecurity, including the adoption of best practices.
  • Enhancing software supply chain security.
  • Establishing a cyber safety review board (similar to the National Transportation Safety Board).
  • Standardizing the government’s response to cybersecurity vulnerabilities and incidents.
  • Improving monitoring operations and alerts to identify and respond to cyber incidents.

If this order does not impact your business directly, it will certainly impact the commercial-off-the-shelf (COTS) software that your company uses, as the government is likely a user of the same product. In terms of cybersecurity, this is good news.

While all 50 states have passed legislation requiring notifying individuals in the event of a data breach that discloses their personal information, additional data privacy regulations primarily exist at the federal level and only apply to certain highly regulated industries, i.e. health and financial information. Several states have passed consumer data privacy laws that regulate how businesses collect data from customers. However, in the most recent legislative session, Oklahoma did not pass expanded privacy protections for customers.

Cybersecurity measures, outside of making required notifications in the event of a data breach, are not mandated by Oklahoma law or the Biden administration’s new executive order. However, the most compelling reason to implement and maintain cybersecurity measures is money. Breaches are expensive, consuming time and resources to remedy. The adage holds true that an ounce of prevention is worth a pound of cure.

Creating an information assurance plan for your business requires critically thinking about the confidentiality, integrity, and availability of both your network and the data stored on it for employees accessing from their workspace, or, as many of us have over the past year, from home.


For more information on how the information in this article may impact your business, please call 405.552.2437 or email Natalie M. McMahan.

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OSHA issues COVID-19 Emergency Temporary Standard for healthcare employers

OSHA-Temp-Standard-GraphicBy Janet A. Hendrick and Phoebe B. Mitchell

On June 10, 2021, the Occupational Safety and Health Administration (OSHA) issued its long-awaited Emergency Temporary Standard (ETS) regarding mandatory safety standards for COVID-19 for healthcare employers pursuant to President Biden’s January 21, 2021 Executive Order. The ETS outlines what healthcare employers must do to protect healthcare workers from COVID-19. OSHA also issued voluntary guidelines for employers outside of the healthcare sector.

The rule is designed to protect workers who face the highest risk of contracting COVID-19 in the workplace – namely, those working in healthcare settings where suspected or confirmed COVID-19 patients may be treated. This includes employees in hospitals, nursing homes, and assisted living facilities; emergency responders; home healthcare workers; and employees in outpatient care facilities. The ETS exempts fully vaccinated workers from masking, distancing, and barrier requirements in well-defined areas where there is no reasonable expectation that any person with COVID-19 will be present.

Here are the key requirements of the ETS:

  • Written COVID-19 Plan: Healthcare employers with more than 10 employees must develop and implement a written plan that designates a safety coordinator who has the authority to ensure compliance with the ETS. The plan must include a workplace-specific hazard assessment and involve non-managerial employees in the hazard assessment and plan development. Additionally, the plan must include policies and procedures to minimize the risk of transmission of COVID-19 between employees.
  • Patient Screening and Management: Employers must limit and monitor points of entry to settings where direct COVID-19 patient care is provided. Employers must also screen and triage patients, clients, other visitors and non-employees.
  • Personal Protective Equipment (PPE): Employers must provide and ensure that each employee wears a facemask when indoors or in a vehicle with other employees for work purposes. Employers must provide and ensure that each employee working directly with suspected or confirmed COVID-19 patients use respirators and other PPE to prevent exposure to the virus.
  • Social Distancing: Employers must keep people six feet apart when indoors.
  • Physical barriers: Employers must install cleanable or disposable barriers at each work location in non-patient care areas where employees are not separated by six feet.
  • Vaccination: Employers must provide reasonable time and paid leave for vaccination and vaccine side effects.
  • No Cost: All requirements of the ETS must be implemented at no cost to the employees.

The rule will take effect when it is published in the Federal Register and healthcare employers must comply with the majority of the guidelines 14 days after publication.

Phillips Murrah’s labor and employment attorneys continue to monitor developments regarding COVID-19 rules in the workplace to provide up-to-date advice to our clients.


Janet Hendrick portrait

Janet Hendrick is a Director and member of the Firm’s Labor and Employment Practice Group.

For more information on this alert and its impact on your business, please call 214.615.6391 or email me.

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Employment Law Update: EEOC’s Latest Guidance on COVID-19 Vaccines

By Janet A. Hendrick and Kim Beight Kelly

Covid vaccine imageOn May 28, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) published 21 updated FAQs supplementing its guidance on workplace COVID-19 vaccination policies.  This represents the EEOC’s first comprehensive update of its guidance regarding COVID-19 since December 2020, prior to large-scale vaccine availability.  Notably, the EEOC prepared this update prior to the CDC’s May 13, 2021 announcement that fully vaccinated individuals need not wear masks or socially distance in certain scenarios.  Nonetheless, the EEOC’s update provides much-anticipated guidance for employers that require or encourage employees to be vaccinated.  Key takeaways include the following:

  • Reasonable Accommodation.  Employers may generally require workers who physically enter the workplace to receive a COVID-19 vaccination, but the employer must reasonably accommodate employees who are unable or unwilling to receive a vaccine because of a disability or sincerely held religious belief, practice, or observance unless those accommodations pose an undue hardship on the employer. Employees need not cite specific laws to engage the employer in an interactive process to explore accommodations, but must let the employer know that he or she requires an exemption.  As a best practice, employers wishing to institute a mandatory vaccination policy should prepare their managers to appropriately handle exemption requests.
  • Disparate Impact. Though an employer may require employee vaccinations, it must bear in mind that even a seemingly neutral policy may be discriminatory in practice toward protected groups of employees who face greater barriers to vaccination.  Employers should be careful to administer their policies in a non-discriminatory manner and when in doubt, vet its policy with counsel before rollout.
  • Incentives. Employers may offer incentives to employees who receive vaccines.  But available incentives differ based on who administers the vaccine.  If an employer merely requests proof of vaccination, then there is no disability-related inquiry under the Americans with Disability Act (ADA) and the request is allowable.  If the employer itself administers the vaccine or arranges for a third party to administer it, then the incentive must not be so substantial as to be coercive.  This is because the required pre-vaccine medical screening questions are prohibited under the ADA unless voluntary; if the incentive is coercively substantial, then the screening questions will not be considered voluntary.  Until the EEOC offers more detailed guidance on incentives, employers must choose incentives based on their own judgment and risk tolerance level.  The most conservative practice would be to either keep incentives very simple (e.g. cash less than $100) or to steer clear of administering vaccines itself.
  • Confidentiality. Employers must keep employee medical information confidential. While requesting proof of vaccination is not a medical inquiry, employee information–such as a copy of a vaccination card–is medical information that an employer must maintain confidentially as it would any other medical-related documentation (e.g. in a separate file with limited accessibility).

We will continue to post updates on new COVID-19-related guidance from the EEOC and other federal and state agencies on our website. For more information, consult with a Phillips Murrah labor and employment attorney.


Janet Hendrick portrait

Janet Hendrick is a Director and member of the Firm’s Labor and Employment Practice Group.

For more information on this alert and its impact on your business, please call 214.615.6391 or email me.

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E-Discovery in a Post-COVID World

When it comes to e-discovery, savvy litigants and litigators who take the time to proactively tweak their practices now will be well-positioned for effective advocacy (and intact litigation budgets) in a post-COVID world.

By Kim Beight Kelly
Published in Texas Lawyer (June 08, 2021)

Kim Kelly Web

Kim Kelly is a civil litigator in Phillips Murrah’s Dallas office who represents individuals and corporations in both federal and state courts.

By now, we are all aware of the explosion of digital connectivity necessitated by the COVID-19 pandemic. While the pandemic will eventually end, changes like increased remote work and reliance on digital communication are likely here to stay.

These societal changes spell certain increase to our digital footprints and for litigants, changes to the discovery landscape for electronically stored information (ESI). As experienced litigants know, discovery of ESI (e-discovery) can be a budget-buster involving costly disputes, production, and even sanctions if a party neglects its obligations.

Oftentimes, these issues can be avoided with simple planning and effective communication with opposing parties. Post-COVID e-discovery is no different: revisiting standard e-discovery practices now can make all the difference in litigation expenses and outcomes in the years to come.

Prior to the pandemic, discoverable communications generally included text messages, emails, and social media messages and posts. As time goes on, lawsuits will increasingly involve events during which parties relied more heavily than normal on these traditional digital communications and perhaps integrated new technologies like Zoom, Slack, Microsoft Teams or other collaborative platforms. For litigants, this means: (1) an increase in the volume of potentially relevant ESI; and (2) additional non-traditional sources of ESI.

As with any emerging issue, it will take time for courts to issue meaningful guidance on how to preserve, produce and request ESI in a post-COVID world, particularly from these non-traditional data sources. In Texas, courts have historically taken a measured “common sense” approach to e-discovery. Proportionality is the name of the game; baseless, oppressive requests for ESI and boilerplate objections will not win the day. Parties are encouraged to work out e-discovery issues on their own and, if court intervention is necessary, must come prepared with real facts on which forms of ESI are available, and the benefit and expense of the ESI they seek to compel or resist.

With this background in mind, it is reasonable to conclude that post-COVID litigants should continue to prioritize knowledge of each party’s systems and available ESI from the outset of litigation. For example, before sending out discovery requests for ESI, a party should consider whether to first request specific information regarding an opposing party’s systems and practices to better tailor their substantive requests.

Given recent rapid changes in many workplaces, these types of requests might be appropriate even when the party or attorney used to be familiar with the producing party’s systems. Litigators should adopt the same attitude toward their own clients and ensure from the outset of litigation that they have up-to-date information on their systems and retention policies. Counsel may also consider whether to update form discovery requests, instructions and definitions to include, for example, Zoom recordings or chats, prior versions of collaborative documents, or communications on other platforms.

As with much in life, an ounce of e-discovery prevention is worth a pound of cure. Savvy litigants and litigators who take the time to proactively tweak their practices now will be well-positioned for effective advocacy (and intact litigation budgets) in a post-COVID world.


Reprinted with permission from the June 08, 2021 edition of Texas Lawyer© 2021 ALM Media Properties, LLC. All rights reserved.

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


For more information about this article, please call Kim Beight Kelly at 214.615.6372 or email her at kbkelly@phillipsmurrah.com.

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Oklahoma medical marijuana license holders could face custody issues

medical marijuana custody issues graphic

By Cassity B. Gies

On June 26, 2018, Oklahoma voters approved State Question 788, legalizing cultivation, use, and possession of medical marijuana. Almost three years after passing with 57% of voter support, our state struggles to manage the competing interests surrounding a legal concept colored with controversial opinions, long standing prejudices, and discriminatory undertones that linger in the air every bit as noticeable as the smell of marijuana smoke, itself.

Phillips Murrah family law attorney Cassity Giles

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

Far from a settled issue, the debate surrounding the medicinal value of the marijuana plant carries hundreds of years of societal and legal baggage, which complicates the implementation of Oklahoma’s newest industry.

Anticipating the gamut of opinions surrounding this controversial plant, anti-discrimination laws approved both by voters in the original ballot initiative and again by lawmakers in the Oklahoma Medical Marijuana Use and Patient Protection Act (more commonly known as the Unity Bill), aim to protect patients and license holders from foreseen prejudices. However, when bumping up against 120 years of court decisions regarding marijuana as a dangerous Schedule 1 drug, akin to the likes of heroin, frankly, the reality of our state’s anti-discrimination protections should make Oklahoma patient card holders, especially those with families and children, nervous.

The Oklahoma Public Health Code, 63 O.S. § 42(D), reads “No medical marijuana license holder may be denied custody of or visitation or parenting time with a minor, and there is no presumption of neglect or child endangerment for conduct allowed under this law unless the persons behavior creates an unreasonable danger to the safety of the minor.”

Our family law practice handles medicinal marijuana issues on a weekly basis now. The impact of holding a medical marijuana card varies according to every situation, and multiple factors affect the extent that a patient card can complicate a custody decision.

Judges vary in their attitudes towards medical marijuana. Some attribute its uses to the likes of any other legal prescription. Others take a stricter stance, opposing its use by any person providing care for children, regardless of prescription. Clients should be fully informed that marijuana consumption during these early years of implementing its legality can disadvantage a marijuana patient if he or she comes up against judicial disfavor.

I have heard attorneys openly warned from the bench that, regardless of how the law reads, any consumption of marijuana by a parent will be enough for that judge to presume the parent is under the influence while parenting a child, and therefore endangering the child. While this may seem to cut directly against 63 O.S. 42D, judges are ultimately charged with determining the best interests of children during custody decisions, and the deference awarded to their judicial determination provides wide latitude.

One straight-shooting guardian ad litem candidly told me that if their office learns a client has a marijuana card and that client resides in certain rural jurisdictions, the first piece of advice given to those parents is to surrender their prescription and forfeit their medical marijuana license because they will instantly be disfavored by the court.

The more moderate and more widely held attitude towards medicinal marijuana use and child custody decisions examines the facts of a case and looks for a nexus between a parties’ marijuana use and activity that threatens to harm the child. Is a parent exposing the child to marijuana? Is the child able to access it? Are the parents subjecting the child to secondhand exposure? Practicing in family law requires understanding that multiple global perceptions shape custody decisions and, as in all custody considerations, the specific facts at hand will affect the outcome of the case.

When a parent finds themselves googling “marijuana and child custody decisions,” litigation is already at an increased risk of conflict, and understanding that complication starts with understanding how to frame the divisive issues at hand and the rules of the Oklahoma Medical Marijuana Authority (OMMA). Attorneys in this field should know how to craft their case when marijuana issues are present, and, remarkably, this area of law often gets glanced over by attorneys declining to study this nuance.

It surprises me how few family law attorneys have studied the OMMA regulations and are admittingly unfamiliar with the impact that they have on child custody issues. A common example is Okla. Admin. Code § 310:681-5-17, amended last fall, authorizing non-licensed minors to enter a licensed cannabis premise when accompanied by a parent or legal guardian.

Besides a thorough knowledge of cannabis laws, many attorneys have yet to dive into the evidentiary nuances that arise in these cases. For example, drug testing has been accepted for years amongst courts as forensic evidence, but a good attorney knows the limits of these tests. When the purpose of a drug test is to provide forensic evidence in a court of law, shockingly, the FDA does not regulate or review the processes and procedures for drug testing facilities providing forensic results. This surprises people to hear and causes a good attorney to slow down and learn a little cannabis chemistry.

Having a relationship with experts who can support or discredit a disputed drug test can crucially benefit your client’s case. Most of our local courts require education in understanding the limitations of a drug test. Understanding laboratory inconsistencies, chain of custody arguments, and scholarly research illuminating faulty processes helps sort through blatantly false results which, disappointingly, circulate in courtrooms everywhere.

As soon as a prospective client shares that they hold a medicinal marijuana license, or that opposing party holds a license, the attorney should recognize this complication and advise their client of the additional work that could likely accompany their case. With the Oklahoma cannabis industry blazing ahead into what many people consider a twenty-first century land rush, the accompanying fallout affecting family law should not be taken lightly.


For more information on how the information in this article may impact you, please call 405.606.4744 or email Cassity B. Gies.

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UPDATE: U.S. Dept. of Labor withdraws independent contractor rule

Independent Contractor graphic image

By Michele C. Spillman

The United States Department of Labor is withdrawing its new rule regarding classification of workers as independent contractors under the Fair Labor Standards (FLSA) on May 6, 2021. According to DOL, the rule was “inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding precedent.”

Spillman portrait

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

The FLSA entitles employees, but not independent contractors (aka “freelancers,” “gig workers,” and “consultants”) to certain protections, such as 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.”

In January 2021, under the prior administration, DOL published a final rule titled “Independent Contractor Status Under the Fair Labor Standards Act” (the “Independent Contractor Rule”). The rule was set to take effect on March 8, 2021 and would have modified the “economic reality” test historically used by DOL 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].

The Independent Contractor Rule reaffirmed the “economic reality” test, but identified and explained 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.
  2. The worker’s opportunity for profit or loss based on initiative and/or investment.

DOL stated that the Independent Contractor Rule was withdrawn because its “prioritization of two ‘core factors’ for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring review of the totality of the circumstances related to the employment relationship.”

It seems unlikely DOL plans to adopt a new rule regarding worker classification. According to Jessica Looman, principal deputy administrator for the DOL Wage and Hour Division, “We are going back to the decades-old analysis and…really feel that this is the space where we can best protect workers.”

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.

RELATED STORIES:


For more information on how the information in this article may impact your business, please call 214.615.6365 or email Michele C. Spillman.

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United States Department of Labor launches Essential Workers, Essential Protections initiative

By Phoebe B. Mitchell

In another demonstration of its pro-worker agenda, President Biden’s Administration has launched a new webpage: Essential Protections During the COVID-19 Pandemic[1]. The webpage, created by the United States Department of Labor (DOL)’s Wage and Hour Division (WHD), is aimed at furthering the WHD’s goal of “protecting and enhancing the welfare of workers during the COVID-19 pandemic.”

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

Online trainings are among the many resources provided in the Essential Protections webpage. The training page, titled Essential Workers, Essential Protections,[2] states: “Workers in grocery stores, health care, delivery services, retail establishments, agriculture, and other essential industries have remained on the job despite many potential risks to their own health or that of their families. The Wage and Hour Division is committed to ensuring that these, and all workers, receive the workplace protections provided under the law.”

The Essential Protections During the COVID-19 Pandemic webpage includes a new Frequently Asked Questions platform which combines many existing articles the WHD has promulgated during the COVID-19 pandemic. The Frequently Asked Questions address many common issues facing employers and employees during the pandemic, including questions about pay under the Fair Labor Standards Act and employee leave under the Family and Medical Leave Act. Additionally, the platform touches upon the plethora of sub-topics affecting employees amid the pandemic, such as business closures, COVID-19 testing in the workplace, quarantining, and teleworking.

The WHD’s revamped website also includes a page entitled “How to File a Complaint.”[3] The page includes user-friendly information for potential claimants regarding the necessary steps to file a complaint, the investigative process, and the nearest WHD office.

The DOL’s renewed focus on worker rights means employers should be more vigilant than ever to comply with federal, state, and local employment laws. Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients regarding the DOL’s policies.


For more information about this article, please call Phoebe B. Mitchell at 405.606.4711 or email her at pbmitchell@phillipsmurrah.com.

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Gifting in 2021 is a case of ‘Use it or lose it’

By Jessica N. Cory

This article appeared as a Guest Column in The Oklahoman on April 27, 2021.

The federal government currently imposes a 40% tax on most lifetime gifts and transfers at death, with a few exceptions.

For example, taxpayers can make “annual exclusion gifts,” or transfers of $15,000 per person per year, to as many people as the transferring taxpayer desires, without incurring any gift tax or even having to file a gift tax return.

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.

Taxpayers also can make tax-free gratuitous payments for certain educational and medical expenses and can make tax-free (and tax-advantaged) transfers to charitable organizations.

In addition, taxpayers are also permitted to gift up to a set “unified credit amount” free of the gift or estate tax, whether the transfers are made during life or at death.

Under the Tax Cuts and Jobs Act of 2017 (the “TCJA”), the unified credit amount was temporarily doubled, greatly increasing the ability for individuals to engage in strategic planning and reduce their future taxable estates. For example, the unified credit amount is $11.7 million in 2021 (or $23.4 million for a married couple), up from $5.49 million in 2017. However, given the possibility of tax changes in 2021, it may be time to finalize some planning and lock-in at the current unified credit amount.

For many individuals, taking advantage of the current higher unified credit amount involves a tricky balance, navigating between transferring as much wealth as possible out of the individual’s taxable estate, while at the same time maintaining sufficient income and financial security.

One solution for this type of situation is a Spousal Lifetime Access Trust (or “SLAT”). With this type of trust, an individual establishes an irrevocable trust for the benefit of his or her spouse, and funds it with a completed gift, removing those assets from the individual’s estate and taking advantage of the current $11.7 million unified credit amount. The SLAT can be set up to allow the trustee to make income and principal distributions from the trust to the beneficiary-spouse during the spouse’s lifetime, providing the couple with a future income stream even after the gift is complete.

Because a SLAT offers the ability to make a gift now, using up some of the historically high unified credit amount while preserving access to income and principal, it is a valuable estate planning tool, especially in 2021.

However, SLATs are not without some potential pitfalls.

For example, if two spouses each want to set up a SLAT for the other, the trusts must be carefully drafted to avoid something known as the “reciprocal trust doctrine,” which the IRS can use to essentially unwind the couple’s planning and pull the trust assets back into their estates.

In addition, because a SLAT involves a completed gift to the beneficiary-spouse, the donor-spouse must give up all control over the property placed into trust, including in the event of a subsequent divorce or the death of the beneficiary-spouse. Accordingly, it is important to carefully weigh a number of considerations before funding a SLAT, including other gifting strategies that can effectively leverage the unified credit amount.

Minimizing future estate tax is only one component of a successful estate plan.  However, given the current legislative environment, it is a particularly important piece this year.

Under the tax plan that President Biden campaigned on, the unified credit amount would be reduced significantly, potentially back to 2009 levels, or $3 million. Accordingly, it makes sense to use up the unified credit now, before potentially losing it later this year or in 2022.


For more information on how the information in this article may impact your business, please call 405.552.2472 or email Jessica N. Cory.

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Virtual meetings increase public access

By C. Eric Davis

This article appeared as a Guest Column in The Journal Record on April 21, 2021.

As schools and businesses increasingly met virtually over the past year, so too did Oklahoma’s governmental bodies, including boards of education, city councils, and state commissions. Today, largely as a result of the pandemic, online governmental meetings are commonplace, available to anyone with access to the internet. This increased accessibility has made it easier for Oklahomans to participate in government at all levels, an outcome that is in keeping with Oklahoma’s laws designed to ensure governmental transparency.

attorney Eric Davis

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

In particular, Oklahoma’s Open Meeting Act requires public access to governmental meetings in order “to encourage and facilitate an informed citizenry’s understanding” of their government. The act requires that the meetings of all governmental boards and commissions be open to the public, and that advance notice of the time, place, and purpose of meetings be posted in advance. Prior to 2020, the Open Meeting Act mandated a majority of a public body’s members be physically present together to hold a meeting. However, amendments since March 2020 have given public bodies temporary flexibility to meet virtually, leading to an increased presence of meetings online, and thus increased public accessibility.

The recent amendments to the Open Meeting Act, however, have otherwise left the act’s preexisting requirements in place. For instance, meeting agendas must still be publicly posted in advance, votes of individual members must be recorded, and meeting minutes must be kept and made available. Moreover, meetings must continue to be accessible to all those who wish to attend. Thus, if a meeting is held via videoconference, those who wish to watch may not be excluded due to the online room’s capacity limits. Instead, accommodations must be made so that all those who wish to participate can.

Recognizing the benefits of online access to public meetings, Oklahoma lawmakers are now considering legislation that would mandate, to the extent practicable, that all public meetings include a livestream. Similar efforts to modernize open meeting laws are underway in states across the country.

Whether it be school redistricting or local zoning decisions, actions taken at public meetings affect all of us. If travel or time conflicts have deterred you from attending public meetings in the past, consider taking advantage of the increased access via the internet. As public engagement grows, so too will the diversity of viewpoints, providing public bodies with increased input and, perhaps, leading to more durable public policy.


For more information on how the information in this article may impact your business, please call 405.606.4757 or email C. Eric Davis.

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Employer tax considerations for remote work

international remote work graphic headerBy Jessica N. Cory

Over the last year, the COVID-19 pandemic resulted in a number of changes for employers, from navigating the PPP loan process to implementing new sick and family leave policies.  One major change has been a massive experiment in telecommuting, with the number of American workers working at least part-time from home more than doubling.  According to a recent Gallup poll,[1] over 50% of U.S. workers continue to report they are working remotely all or part of the time.  Moreover, of those working remote at least part of the time, approximately 44% reported they would prefer to stay remote even after COVID-19 is no longer a threat.  This interest in ongoing remote work possibilities is consistent with an earlier Pew Research Center survey, which found that among employed adults who say the responsibilities of their job can mostly be done from home, 54% would like to continue working from home after the coronavirus outbreak ends.[2]

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.

Given employee interest in continuing to telework, it is important for employers interested in offering remote work as a benefit to evaluate their policies now.  One important employer-side piece of a teleworking policy is potential tax exposure.  During the pandemic, many jurisdictions enacted policies, whether formally or through informal guidance, to prevent employers from becoming entangled in additional tax obligations as a result of employees temporarily teleworking away from an employer’s physical office as a result of COVID-19 restrictions.  Moving forward, however, many of these temporary reprieves have or will soon expire.  U.S. employers should thus carefully consider the tax implications of allowing an employee to work in other jurisdictions, whether in another state where the employer does not otherwise have a taxable presence or even internationally.

From a tax perspective, what should be considered in determining whether to allow employees to work remotely across state lines?

 If an employee wants to work remotely from another state, where an employer does not currently conduct business, an employer must carefully consider the potential tax consequences for both the employee and the employer.  For example, when it comes to the employee, there may be an impact on the employee’s take home pay if more than one state requires income tax withholding from the employee’s check.  This could arise in multiple situations, such as where an employee works part-time in the employer’s office in State A and part-time from home in State B, or where the employer’s home state has adopted a “convenience of the employer” test, which imposes income tax on remote-out-of-state employees where the employee is working for an office based in that state.[3]

From the employer’s perspective, permitting remote work across state lines may result in more than simply increased payroll tax compliance costs, from the withholding obligations that must be met in new states.  For instance, in each case, an employer must also consider whether merely having an employee teleworking from a particular state obligates the employer to register to do business in that state or even potentially creates sufficient economic nexus for a corporate income or business franchise type tax to apply to some portion of the employer’s income.

 Do similar considerations apply to an employee working remotely in an international jurisdiction?

International teleworking, similar to working across state lines, will involve a jurisdiction-specific tax analysis. However, an international remote work situation can be even more complicated, requiring an employer to look at multiple levels of authority, from tax treaties to the foreign country’s domestic laws.  Accordingly, employer policy should allow for a case-by-case evaluation of any proposed international remote work and make clear that the employee will be responsible for bearing the economic burden to the extent the company is required to withhold and remit foreign income taxes on his or her wages, or foreign social security type payments.

In considering a proposed international teleworking situation, there are two primary tax issues with which a company needs to concern itself:

  • Whether the employee’s presence in the foreign country creates an economic nexus between the company and the foreign country, sufficient for the foreign country to tax all or part of the company’s income
  • Whether the company be required to withhold and remit foreign income tax from the employee’s wages

To answer these questions, the first source of relevant authority would be a bilateral tax treaty between the United States and the foreign country, if any.  To the extent such a treaty exists, it should provide guidance on both of these issues. Otherwise, the answer will be found in the foreign country’s tax laws.

For example, under the Model Income Tax Treaty published by the Organization for Economic Cooperation and Development (OECD),[4] upon which many tax treaties are based, a company will be subject to tax in the foreign treaty-party country only if the employee’s presence in the country creates a “permanent establishment,” or “PE,” in that country.  For purposes of the Model Income Tax Treaty, a PE is defined as a “fixed place of business.”  Commentary to the treaty indicates that an employer’s home office can office can create a PE for the company, but whether it does so will be a facts and circumstances-based analysis.  Individual tax treaties and the domestic law of foreign countries may provide for harsher or more lenient treatment.

One factor that may prove particularly relevant is the duration of the proposed international remote work assignment.  For example, the analysis would be very different for an employee who wants to telework in a treaty country for several weeks while on vacation versus an employee that wants to relocate to a treaty country for months at a time. In the latter case, an analysis would also need to be made of the nature of the employee’s work, such as whether the employee has contracting or other decision-making authority on behalf of the company, leading to a stronger case being made for the company conducting business through the employee’s “home office.”

A tax treaty, where applicable, should also provide guidance on the second question, with respect to whether the teleworking employee will be subject to tax while in the foreign country, and thus whether an employer will have an obligation to withhold and remit foreign income taxes for that employee. Under many income tax treaties, including the Model Income Tax Treaty, an individual working in a treaty-party country will only become subject to tax in that country if he or she remains for more than 183 days.  Accordingly, employer policy could allow shorter stints abroad in a treaty country, but not stays over a set amount of days (for example, 160, to create a buffer before hitting the 183 day threshold).  By contrast, in a non-treaty jurisdiction, an employer could face a withholding obligation from day one.

 For employers looking to offer remote work as an ongoing benefit, the potential tax pitfalls described above should be viewed as important considerations, not a barrier to teleworking.  With proper planning and the adoption of well-though company policies, an employer may be well-placed to offer either domestic or international remote work as a benefit to its employees, potentially improving employee retention and productivity and providing the employer with a broader pool of employee candidates.  A qualified tax attorney can assist in providing the necessary guidance to employers looking to craft a remote work policy that would allow employees to work out of the employer’s home state.


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

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[1] L. Saad & A. Hickman, Majority of U.S. Workers Continue to Punch In Virtually, Gallup (Feb. 12, 2021), https://news.gallup.com/poll/329501/majority-workers-continue-punch-virtually.aspx.

[2] K. Parker, J. Menasce Horowitz, & R. Minkin, How the Coronavirus Outbreak Has – and Hasn’t – Changed the Way Americans Work, Pew Research Center (Dec. 9, 2020), https://www.pewresearch.org/social-trends/2020/12/09/how-the-coronavirus-outbreak-has-and-hasnt-changed-the-way-americans-work/.

[3] See, e.g., Arkansas Dep’t of Finance and Admin., Legal Opinion No. 20200203, imposing Arkansas income tax on a computer programmer working remotely for an Arkansas-based employer from Washington state (“Akransas Code Annotated § 26-51-202 levies the Arkansas income tax on the income received by a nonresident from an occupation carried on within Arkansas.  Your client is carrying on an occupation in the state of Arkansas, albeit from an out-of-state location.  Although your client performs her work duties in Washington state, those activities impact computer systems and computer users in Arkansas … Those activities constitute the conduct of an occupation in this state.”

[4] OECD, Model Tax Convention on Income and on Capital 2017 (Full Version) (Apr. 25, 2019), https://www.oecd.org/ctp/model-tax-convention-on-income-and-on-capital-full-version-9a5b369e-en.htm.

Department of Labor announces return of liquidated damages for wage and hour claims

By: Janet Hendrick and Phoebe Mitchell

On April 9, 2021, in Field Assistance Bulletin (FAB) No. 2021-2, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) announced it would return to its former policy of seeking liquidated damages from employers in pre-litigation investigations and settlements of wage and hour claims. This revived policy simultaneously rescinds the Trump Administration’s employer-friendly practice of refraining from pursuing liquidated damages in such matters.

Wage and Hour Division logoUnder the Fair Labor Standards Act (FLSA), violations of minimum wage or overtime requirements subject employers to liability for the unpaid minimum wages and overtime. But the FLSA also provides that employers may be liable for an equal amount in liquidated damages, sometimes referred to as “double damages.” 29 U.S.C. § 216(b). The Portal-to-Portal Act of 1947 amended the FLSA to add a safe harbor provision against liquidated damages for employers who act in good faith or who had reasonable grounds for believing the act or omission that resulted in liability was not a violation of the FLSA. 29 U.S.C. § 260.

The pro-employer Trump Administration’s WHD abstained from pursuing liquidated damages in certain scenarios, including when there was no evidence of bad faith on the part of the employer, or when the employer had no previous history of violations. The stated objective of this policy of abstention was to remove certain regulatory and enforcement obstacles to economic growth during America’s battle with COVID-19. In contrast, the Biden Administration’s FAB 2021-2 serves as reminder to employers of the new administration’s pro-worker agenda.

Now, under FAB 2021-2, the “WHD will return to pursing liquidated damages from employers found due in its pre litigation investigations provided that the Regional Solicitor (RSOL) or designee concurs with the liquidated damages request.”  This makes employer compliance with the FLSA more important than ever to avoid the possibility of an assessment of liquidated damages.

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

 


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 Employment Alert and its impact on your business, please call 405.235.4100 or email me.

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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.


Portrait of Byrona J. Maule

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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.

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

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SCOTUS declines to hear same-sex parent case

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By Janet A. Hendrick and Mark E. Hornbeek

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

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

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

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

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

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

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


Janet Hendrick

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

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

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Employers should prepare for COVID-19 vaccine in the workplace

By Phoebe B. Mitchell

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

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

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

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

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

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

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

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

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

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

May an Employer Terminate an Employee Who Refuses the Vaccine?

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

Who Pays for a Mandated COVID-19 Vaccine?

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

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


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

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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.


Martin J. Lopez portrait

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

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.


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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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[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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