Employer Alert: OSHA Emergency Temporary Standard is Imminent

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By Angela M. Buchanan

Last June, OSHA adopted an emergency temporary standard (“ETS”)—29 C.F.R. Part 1910, Subpart U, 86 Fed. Reg. 32376 (June 21, 2021)—that set forth numerous requirements for healthcare employers aimed at combatting the spread of COVID-19. On September 9, 2021, as part of his COVID Action Plan, President Biden directed OSHA to issue a new and broader ETS requiring all private employers with 100 or more workers to mandate COVID-19 vaccination or a weekly test for all employees. Since that time, OSHA has been working towards meeting President Biden’s directive, and, on October 12, 2021, OSHA sent a draft ETS requiring either vaccination or weekly testing of workers for employers with 100 or more employees to the White House’s regulatory office for approval. The White House is expected to review and approve the new ETS quickly.

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Angela M. Buchanan is a litigator who primarily focuses her practice on complex commercial litigation and disputes.

According to Ann Rosenthal, Senior Advisor at OSHA, the ETS will be published “in the coming weeks.” If the new ETS is like the healthcare ETS in its implementation schedule, the new standard will take effect shortly after its publication in the Federal Register. By way of comparison, the healthcare ETS has some provisions that became mandatory 15 days after publication, while compliance with others was required a month after publication. 29 C.F.R. § 1910.502(s)(2). The ETS can remain in effect for six months.

Violations of the new ETS would likely be considered either “serious” or “willful.” The current maximum penalty for a “serious” violation is $13,653 per violation. The current maximum penalty for a “willful” violation is $136,532. 29 C.F.R. § 1903.15(d), 86 Fed. Reg. 2964 (Jan. 14, 2021).

Preemptively, Governor Abbott responded to the expected ETS on October 11, 2021 by issuing Executive Order GA-40, stating that no entity in Texas can “compel” any individual, including any employee or consumer, to receive a COVID-19 vaccination who objects “for any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.”  The order establishes a maximum criminal penalty of $1,000.

Governor Abbot’s Order highlights the fact that the new ETS is likely to be challenged.  States, companies, and others will like challenge the ETS on the grounds that the required prerequisites for OSHA issuing an ETS are not met. Specifically, to make an ETS, OSHA must determine (A) that employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards, and (B) that such emergency standard is necessary to protect employees from such danger.” 29 U.S.C. § 655(c)(1). In the ten times OSHA has issued an ETS, the courts have fully vacated or stayed the ETS in four cases and partially vacated the ETS in one case.

Whether or not the ETS is eventually challenged, Companies still need to prepare for the new ETS mandates by proactively reviewing and updating their COVID-19 vaccination policies.  Phillips Murrah’s Labor and Employment attorneys regularly advise employers on complex issues relating to COVID-19 vaccination polices and OSHA standards.

For more information about how the information in this article may impact your business, please call 469.485.7341 or email By Angela M. Buchanan.

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FinCEN crackdown on shell companies to begin in January

financial crime graphicBy Laurie L. Schweinle

On Jan. 1, Congress passed the National Defense Authorization Act for Fiscal Year 2021, which included the Corporate Transparency Act (CTA). CTA is a new provision intended to eliminate the use of shell companies commonly employed by criminal enterprises to launder money, finance terrorism, and otherwise engage in criminal acts.

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Laurie L. Schweinle is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Effective Jan. 1, 2022, the CTA requires “reporting companies” to provide certain information to the U.S. Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN. A “reporting company” is defined under the CTA as a corporation, limited liability company, or other similar entity formed pursuant to state or tribal law or formed pursuant to the law of a foreign country and registered to do business in the United States. The reporting companies must report “beneficial ownership” information to FinCEN. Subject to several exceptions, a “beneficial owner” is an individual natural person who directly or indirectly exercises substantial control over an entity or owns or controls 25% or more of the entity.

Beneficial ownership information includes the individual’s name, date of birth, current address, and a unique identification number, which may be a passport or driver’s license number. The information is required to be maintained by the secretary of the Treasury in a nonpublic database only accessible by authorized users, such as law enforcement with a warrant or financial institutions with appropriate permission.

The CTA is intended to target entities typically used as shell companies, such as small LLCs or those formed under the umbrella of a large company. The law excludes reporting requirements for other entities, such as publicly traded companies and many financial services institutions, because existing reporting requirements already provide for ownership transparency.

Entities formed prior to the effective date of the regulations will have two years to provide beneficial ownership information. Entities formed after the regulations go into effect must provide the required information at the time of formation or registration. Additionally, FinCEN must be updated within one year of any changes.

Because violators of the CTA will be subject to civil and criminal penalties, entities should monitor when these regulations go into effect and review them carefully to ensure compliance. Entities may also want to consider developing a strategy to ensure future compliance. Without regulations in place, there are still many unknowns, but the effects of the CTA are certain to impact both foreign and domestic businesses in a significant manner.

This article originally appeared in The Journal Record’s Gavel to Gavel column. View it HERE.

For more information about how the information in this article may impact your business, please call 405.606.4728 or email Laurie L. Schweinle.

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Continuation of Pandemic-Related Remote Work as an ADA Accommodation: Lessons from the EEOC’s First Lawsuit

EEOC lawsuit graphicBy Janet Hendrick

Employers can glean valuable takeaways from the EEOC’s recent lawsuit against a facility management company, the EEOC’s first case alleging disability discrimination for an employer’s refusal to allow an employee to continue to work from home following pandemic-related remote work.  On September 7, 2021, the EEOC filed suit in federal court in Atlanta against ISS Facility Services, Inc. alleging that it unlawfully denied Ronisha Moncrief’s request for remote work as a reasonable accommodation under the Americans with Disabilities Act.  Moncrief, a health and safety manager for the company who has a pulmonary condition, sought treatment after she became sick at work.  Her doctor recommended that she work from home and take frequent breaks while working.  Around this time, due to the COVID-19 pandemic, ISS implemented rotating staff schedules, so that Moncrief and others worked from home four days a week.

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

In June 2020, ISS required all staff to return to the facility five days a week. When Moncrief requested continued work from home as a disability accommodation, ISS denied her request.  According to the lawsuit, and of critical importance, other health and safety managers were allowed to continue working from home. A month later, Moncrief’s supervisor recommended that Moncrief be terminated due to performance issues and ISS terminated Moncrief shortly after. According to the lawsuit, and again of critical importance, Moncrief had not previously been informed that her performance warranted termination.  Although the EEOC attempted conciliation of Moncrief’s charge of discrimination, that failed and the EEOC filed the lawsuit.

Although the lawsuit is in very early stages, here are some valuable takeaways for employers:

  1. Promptly address and document performance issues
    •  One glaring issue in this case, assuming the allegations are true, is that Moncrief claims to have been unaware that her performance could land her on the chopping block. Be sure your managers are managing.  This requires addressing performance issues in a timely manner, including documenting the issues and communicating the issues and possible repercussions to the employee.  Managers frequently ignore performance issues or sugar-coat communications, leading to terminated employees claiming they never had a chance to improve. Timely documentation of performance issues serves as key evidence for employers accused of not adequately informing an employee of possible termination.
  1. Assess accommodation requests on a case-by-case basis
    • The EEOC has repeatedly cautioned employers to avoid a “one-size-fits-all” blanket approach to disability accommodations. Instead, employers are expected to conduct an individualized analysis of each accommodation request. Further, in light of the ISS Facility lawsuit, denials of remote work requests may garner heightened scrutiny, particularly if the employee at issue has worked remotely for a “trial period” during the pandemic.
  1. Treat similarly situated employees consistently
    • When it comes to disability accommodations, employers who treat employees in the same or similar positions inconsistently create unnecessary legal risk.
    • If an employer allows one employee to work from home but denies remote work to another employee with the same or a similar position, the employer better be ready to explain the disparity There may be justification for the different treatment, but it gives an appearance of an unjustified denial of an accommodation.
  1. Ensure job descriptions are updated and robust
    • Job descriptions tend to be among the lowest priorities for often-harried human resources professionals. But accurate (i.e., updated), robust job descriptions can be some of the best evidence an employer can offer if an employee challenges that a task is not an “essential” job function. This is often a key issue in disability discrimination cases, as the employee must be able to perform all “essential job functions” with or without a “reasonable accommodation” to come with the protection of the ADA as a “qualified individual with a disability.” Courts routinely defer to an employer’s judgment as to whether a job function is “essential” and often rely on a written job description.
    • Employers who take the time and resources to periodically review and update job descriptions can reap the benefits if facing this type of challenge. Bonus points for including such nontraditional requirements as reliable, predictable attendance and regular attendance at the assigned office or work facility, as long as the employer can back these up as truly “essential” if challenged.

Phillips Murrah’s Labor and Employment attorneys regularly advise employers on complex issues relating to ADA accommodations and performance management and can help strengthen job descriptions and other key employment documents.

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

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Biden orders private companies and healthcare institutions to mandate employee vaccines


By Lauren Barghols Hanna

Yesterday afternoon, President Biden announced a series of executive actions and new federal rules to increase the number of vaccinated American workers. Noting that COVID-19 has killed more than 650,000 in the last 18 months, President Biden announced several expected executive orders and a forthcoming emergency OSHA rule. The expected rule will mandate that all companies with more than 100 workers require their employees to either be fully vaccinated or submit to weekly COVID-19 screening tests. By executive order, President Biden will mandate vaccines for health care workers, federal employees and federal contractors. If federal employees refuse vaccination without a valid medical reason or sincerely-held religious belief, they may be subject to disciplinary action, up to and including termination of employment.

President Biden vowed to “protect vaccinated workers from unvaccinated co-workers” and to “reduce the spread of COVID-19 by increasing the share of the workforce that is vaccinated in businesses all across America.” Until President Biden’s September 9th speech, he had appeared hesitant to enact federally-mandated vaccine requirements–instead relying on individual corporate vaccine incentive programs to encourage vaccine compliance. In his speech, President Biden conveyed the urgent importance of corporate and federal vaccine mandates to increase individual employee vaccination rates. His new orders are likely motivated by the rapid spread of the COVID-19 delta variant, the FDA’s recent full approval of the Pfizer-BioNTech COVID-19 vaccine, and the effort to achieve critical herd immunity to ensure continued economic recovery and minimize the likelihood of incubating potentially-severe variants among the unvaccinated population.

To ensure larger employers enact “vaccination or weekly testing” policies, President Biden ordered the Occupational Safety and Health Administration (OSHA) to draft a rule requiring even private employers with 100 employees or more to enact such policies to maintain critical OSHA compliance. OSHA has indicated that it intends to take enforcement action against private companies that do not comply with the vaccine mandate, with potential fines of up to $14,000 per violation.

Regardless of the number of employees, private hospitals and other healthcare institutions that accept Medicare and Medicaid reimbursements also will be required to enact similar mandatory vaccine policies, along with other federal contractors and federal agencies. In addition to these orders, President Biden also encouraged state governors to mandate vaccinations and/or weekly testing for entertainment venues, and private and public schools to “make sure we are keeping students safe.”

Across all industries, approximately two-thirds of America’s workforce will be impacted by one or more of President Biden’s orders and requested rules related to mandated COVID vaccinations and/or regular screening tests.

Phillips Murrah will continue to monitor the publications of these promised orders and provide additional implementation guidance as it becomes available.

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Lauren Barghols Hanna is an attorney in Phillips Murrah’s Labor & Employment Practice Group.

For more information on this alert and its impact on your business, please call 405.606.4732 or email me.

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Notice to Oklahoma landlords: The door to residential evictions is now open

Eviction notice graphicBy Ashley M. Schovanec

For the past seventeen months, many Oklahoma landlords were prevented from evicting tenants for the nonpayment of rent due to various federal eviction moratoriums. Thanks to a recent decision by the U.S. Supreme Court, the latest eviction moratorium has now been declared unlawful and landlords are free to move forward with evictions based on the nonpayment of rent.

Attorney Ashley Schovanec Web

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

Congress initially declared a moratorium on evictions at the beginning of the coronavirus pandemic in March 2020. Following the lapse of the first moratorium in July 2020, the Director of the Centers for Disease Control and Prevention (CDC) imposed a series of the CDC’s own nationwide eviction moratoriums. As authority to promulgate the moratorium, the CDC relied on §361(a) of the Public Health Service Act, which is a statute originally passed in 1944 and a provision that has rarely been invoked except in the context of quarantining infected individuals and prohibiting the import or sale of animals known to transmit disease. The stated purpose of the CDC’s halt on residential evictions was to help slow the spread of COVID-19. The justification was that housing stability helps protect public health in that homelessness increases the likelihood of individuals moving into congregate settings, such as homeless shelters.

The CDC’s moratoriums applied to only certain evictions – those based on the nonpayment of rent. In order for a tenant to invoke the protections provided by the CDC, a tenant was required to provide the landlord with a CDC declaration form affirming that tenant was in financial need as a result of the pandemic. The last CDC moratorium expired on July 31, 2021. Thereafter, the Biden administration implemented yet another moratorium, which was set to expire on October 3, 2021 but was derailed by the U.S. Supreme Court on August 26, 2021.

In Alabama Association of Realtors v. Department of Health and Human Services et al., the U.S. Supreme Court ruled that the CDC exceeded its authority in imposing nationwide eviction moratoriums. The per curium opinion criticized the CDC’s reliance “on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination” and found that “[i]t strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.” The Supreme Court concluded its opinion, “[i]f a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.”

Now that the Supreme Court has declared unlawful the latest nationwide eviction moratorium, it is up to states and localities to impose eviction restrictions. New York, California and the city of Boston have imposed restrictions of their own to protect renters from eviction. As of now, there are no eviction constraints in the state of Oklahoma. This means the door is now open for Oklahoma landlords to file evictions to remove tenants who were previously shielded by the federal eviction moratoriums. Landlords may now file suit against tenants to collect past due rent, including all unpaid rent payments that accumulated during the federal eviction moratoriums.

The impact of the Supreme Court’s decision in Alabama Association of Realtors is significant for both landlords and tenants. If you are a landlord or tenant seeking guidance in navigating evictions in light of recent changes to the law, please call 405-552-2470 or email Ashley M. Schovanec.

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Q&A: Understanding divorce from start to finish

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By Molly E. Tipton

Q: My spouse and I want to get a divorce, does it matter who files first?

There is no hypothetical race to the court house in order to be the first spouse to file in a divorce proceeding. The filing party is referred to as the “Petitioner” and the responding party is referred to as the “Respondent.”

Molly Tipton portrait

Molly E. Tipton’s legal practice is focused on domestic and family law, including divorce, legal separation, prenuptial agreements, support alimony, child custody, visitation, child support issues, guardianships, and paternity, for clients ranging from high-net worth individuals to simple uncontested divorces.

In a divorce proceeding, both parties start the case on equal footing, and there is no advantage to being the filing party or the responding party. However, if you have concerns that your spouse is beginning to accumulate new debts, which would be marital, or is beginning to open new bank accounts and moving money, or changing the beneficiaries to life insurance policies, then filing for divorce will put in place the Automatic Temporary Injunction (the “ATI”).

The ATI prevents a spouse from damaging tangible property, withdrawing funds from retirement or joint checking or savings accounts, or modifying or canceling any insurance policies, among other things. The ATI is reciprocal such that both spouses are enjoined from violating it.

Q: What kinds of issues can I expect to discuss with an attorney in a divorce proceeding?

There are five main issues in a divorce proceeding that are almost always present: child custody, child visitation, child support, support alimony, and property division.

  • Custody can be awarded to the parents as either joint or sole custodians, or a hybrid, where the parties are awarded joint custody with one parent being the final decision maker. Custody does not necessarily mean that a child is in one parent’s care, custody is the decision-making authority of each parent. Joint custodial parents must work together to make decisions regarding important life decisions for the minor children, such as religion, schooling, and health and medical decisions, to name a few. A sole custodial parent may make these decisions unilaterally.
  • Child visitation is the schedule that will dictate when the parents will exercise their custodial time with the minor children.
  • Child support is ordered in every case involving minor children. Base child support is based upon the parties’ gross monthly income, the number of overnight visits awarded to each parent and can be calculated using the Oklahoma Child Support calculator.
  • Support alimony is not as simple as child support because there is no calculator, however, support alimony is based upon one party’s need and the other party’s ability to pay and each parties’ respective monthly income and monthly budget is a consideration for payment of support.
  • As for property division, almost all assets and debts accumulated during the marriage are marital, unless there is a valid, enforceable prenuptial agreement in place. All assets and debts deemed to be marital are subject to equitable division.

Q: What are all of the steps in a divorce?

First, a Petition for Dissolution of Marriage is filed, and often times it is accompanied by an Application for Temporary Orders. Once the Respondent has been served via certified mail or via process server, the Respondent has 20 days to file a response.

A hearing on the Petitioner’s Application for Temporary Orders may be set at the time of filing, however, counsel for the parties may work together to come up with an Agreed Temporary Order and then the parties may strike a hearing on temporary orders.

Once the temporary orders are in place, each side will conduct discovery, which includes Interrogatories, Requests for Production of Documents, Requests for Admission, and occasionally depositions of the parties or parties’ experts. Discovery allows for each side to have a clear idea of where each party stands regarding all issues mentioned above.

Once discovery is completed, the parties may either works toward a settlement or attend mediation, where the parties may end up with a Decree of Dissolution of Marriage, an Agreement Incident to Dissolution of Marriage, and a Joint Custody Plan.

If mediation is unsuccessful, then the parties may proceed to trial for a resolution on the all of the issues or any of the issues not resolved at mediation.

For more information about how the information in this article may impact your business, please call 405.606.4735 or email Molly E. Tipton.

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Is this the end of non-compete clauses in America?

Non-compete agreement document for filling and signing on desk stockBy Janet A. Hendrick and Angela M. Buchanan

Janet Hendrick and Angela Buchanan portraits

Janet A. Hendrick and Angela M. Buchanan

For decades, non-compete clauses and other restrictive covenants have protected American businesses from unfair competition by preventing departing employees from working for a direct competitor for a specified time and within a specified geographical area.  Today, non-competes are still a useful tool, but their effectiveness depends on whether the covenant is narrowly tailored to legitimate business interests and, because state law governs enforceability, whether the relevant jurisdiction allows employers to enforce the covenants.

Although most states allow enforcement of reasonable non-competes, the increasing trend is to limit or ban their use.  In California, North Dakota, the District of Columbia, and Oklahoma, non-competes are either entirely or largely unenforceable as against public policy. Other states, including Maine, Maryland, New Hampshire, Rhode Island, and Washington, have banned non-compete agreements for low-wage workers.

This year, non-compete agreements have faced new obstacles in several jurisdictions. In May, Oregon passed legislation to curtail the use of non-competes so that they may only be enforced if the employee earns more than $100,533/year, the restricted period does not exceed 12 months, and the employer agrees in writing to provide the greater of (i) 50% of the employee’s compensation at the time of termination or (ii) $100,533 annually during the restricted period.  Nevada passed Assembly Bill 47 in May, which significantly increases Nevada’s restrictions on non-compete agreements.  The new Nevada law, which is effective October 1, 2021, voids non-compete agreements for hourly employees. The Nevada law also prevents employers from restricting employees from working for a customer if the employee did not solicit the customers for the former employer, the customer voluntarily left the employer, and the employee generally complies with the non-compete agreement. To give the new law teeth, it allows an employee who successfully challenges a non-compete to recover attorneys’ fees and costs. Following on the heels of Oregon and Nevada, Illinois passed legislation in June that prohibits non-compete clauses for employees earning less than $75,000/year and bans non-solicitation agreements, which restrict which customers an employee can call on, for employees earning less than $45,000/year.  Both of these salary thresholds will increase annually. The governor of Illinois is expected to sign the new prohibitive legislation so that the law will go into effect on January 1, 2022.

Like these states, the federal government has also taken steps to limit the use of non-competes. In July, President Biden issued the Promoting Competition in the American Economy Order, which asks the Federal Trade Commission to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”  Although the Order does not change current law, it is a clear sign that non-competes will face extra scrutiny and may eventually be limited under federal law.

Considering the continuing wave of non-compete reform, employers, particularly those that operate in multiple states, should monitor developments in the relevant states and carefully consider choice of law and forum selection clauses for agreements. The Labor & Employment attorneys of Phillips Murrah have substantial experience in negotiating, drafting, and litigating issues relating to employment agreements and restrictive covenants.  If you would like additional information, please reach out to the firm.

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

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Janet Hendrick is a Shareholder and a 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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As Dallas businesses scramble to comply with murky mask mandate, Governor files court challenge

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By Janet A. Hendrick

On the heels of Dallas County Judge Tonya Parker’s August 10, 2021 temporary restraining order nullifying Governor Abbott’s July 2021 prohibition on mask mandates within Dallas County, Dallas County Judge Clay Jenkins issued an order mandating masks for many Dallas employers effective August 12, 2021.  In addition to requiring universal indoor masking for all Dallas County public schools and childcare centers, and in buildings owned or operated by Dallas County, and encouraging masks in all public indoor spaces, the order requires “all commercial entities in Dallas County providing goods or services directly to the public” to develop, implement, and post a health and safety policy. The policy must include at a minimum universal indoor masking for all employees and visitors to the entity’s premises or other facilities and may also include other mitigating measures designed to control and reduce the transmission of COVID-19, such as temperature checks or health screenings. Businesses that fail to comply within three days risk fines of up to $1,000 per violation.

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

Although the language regarding “commercial entities” appears to be limited to only those businesses that provide “goods or services directly to the public,” the FAQs on the Dallas County website broadly state that “[b]usinesses operating in Dallas County must develop a Health and Safety Policy and this policy must mandate that all employees and visitors wear a mask while on any property owned or operated by the business.”

Lack of clarity in Judge Jenkins’ order means businesses within Dallas County must decide whether to comply, even if they do not arguably provide goods or services directly to the public, or risk fines. The most risk-averse route for Dallas County businesses is to (1) mandate masks for all employees and visitors, and (2) prepare a health and safety plan that includes the mask mandate and any other transmission-mitigating measures the business chooses to include.  Employers that choose this path should post the health and safety plan prominently near the entrance to their premises before midnight on August 14, 2021 to avoid the possibility of a fine for noncompliance.

Just hours after Judge Jenkins’ issued his order, Texas Governor Greg Abbott and Attorney General Ken Paxton filed a mandamus petition with the Dallas Court of Appeals to strike down the order.  A hearing is set for August 24, 2021 before Judge Parker, at which point she will decide whether to turn the temporary restraining order into a temporary injunction pending a trial.

We will continue to monitor developments regarding the Dallas County order and are available to discuss its implications and requirements.

  • To contact Janet A. Hendrick, please call 469.485.7334 or email.
  • To contact Michele C. Spillman, please call 469.485.7342 or email.

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Bankruptcy filings broke pattern in 2020, fell during pandemic onset

By Clayton D. Ketter

This article appeared as a Guest Column in The Oklahoman on August 9, 2021.

When the COVID-19 pandemic began, it was impossible to predict how the disruptions would affect the economy.

Clayton Ketter portrait

Clayton D. Ketter is a Director and the Firm’s Litigation Practice Group Leader. Clay has extensive experience in financial restructurings and bankruptcy matters.

Whole industries, such as restaurants, beauty salons, and tourism, were shuttered or significantly curtailed. Many individuals found themselves suddenly without a job, while others were forced to significantly change the way that they worked. As the pandemic took hold, it was difficult not to believe the pandemic would cause a significant recession.

Historically, when the unemployment rate jumps, bankruptcy filings also increase.

For example, in June 2008, Oklahoma had an unemployment rate of 3.9% and 11,224 total bankruptcy filings across Oklahoma’s three federal districts. One year later, in June 2009, as a national recession took hold, Oklahoma’s unemployment rate had risen to 6.3%, while bankruptcy filings in Oklahoma had increased by over 25% to 14,209.

Based on past experience, one would anticipate that the job losses resulting from the COVID-19 pandemic would similarly result in a rise in bankruptcy filings.

In June 2019, Oklahoma’s unemployment rate was just 3%. One year later, in June 2020, the employment rate had shot up to 8.2%. Yet, despite the considerable increase in unemployed Oklahomans, bankruptcy filings actually declined. Specifically, in 2019, Oklahoma’s three federal districts saw a combined total of 9,552 bankruptcy filings. In 2020, the number of bankruptcy filings actually fell by over 20%, to 7,484.

This decrease likely can be attributed to the billions of dollars in government assistance that was extended to businesses and individuals in the form of payroll loans and unemployment benefits. In addition, moratoriums on evictions and foreclosures certainly allowed many individuals to avoid having to seek bankruptcy protection.

Many of those assistance programs and moratoriums are beginning to end.

As they do, it will be interesting to see whether bankruptcy filings start to increase, which would indicate that the stimulus programs only delayed the financial collapse.

In Oklahoma, at least, there is some indication that the programs allowed many to avoid a bankruptcy altogether, as Oklahoma’s unemployment rate has been consistently falling, sitting at just 3.7% as of June 2021.

So far this year, bankruptcy filings have not increased, sitting at just 1,416 total filings for the first quarter of 2021.

It will likely take at least another year before the true consequences of the pandemic on Oklahoma’s economy can be fully assessed. However, there is at least evidence for being hopeful that things were not nearly as bad as everyone had feared.

For more information on how the information in this article may impact your business, please call 405.606.4792 or email Clayton D. Ketter.

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Texas Small Businesses Beware: New Laws Expand Liability for Sexual Harassment Claims

sexual harassment graphic 2By Janet A. Hendrick and Laurel L. Baker

Janet Hendrick and Laurel Baker portraits

Janet A. Hendrick and Laurel L. Baker

September 1, 2021 marks the beginning of a new era for sexual harassment claims against employers in Texas. Texas is notorious for protecting its pro-employer policies, but recent legislation goes against the grain to make all businesses, regardless of size, subject to liability for sexual harassment claims.

  1. Senate Bill 45 Broadens Definition of “Employer” and Scope of Liability

Senate Bill 45, signed by Governor Greg Abbott on May 30, 2021, adds Section 21.141 to the Texas Labor Code to define “employer” as “a person who (A) employs one or more employees; or (B) acts directly in the interests of an employer in relation to an employee.” Currently, only employers with fifteen or more employees can be sued for sex harassment, under either federal or Texas law, but the new Texas law will subject all employers doing business in Texas, regardless of size, to these claims. Additionally, the law expands liability to individuals, such as officers, directors, and other employees, so an employee claiming sex harassment can sue not just the employer, but these individuals.

  1. Senate Bill 45 Requires Employers to Act Immediately

Historically, employers subject to sex harassment claims can avoid liability by taking prompt remedial action when an employee alleges sex harassment.  The new Texas law changes this standard, requiring employers to take “immediate and appropriate corrective action.”  What exactly this standard will require remains to be seen, as Texas courts will no doubt face interpreting the standard for years to come.

  1. House Bill 21 Lengthens the Statute of Limitations for Employees to File Claim

Under current Texas law, an employee has 180 days to file a sexual harassment claim with the Texas Workforce Commission. House Bill 21, signed by Governor Abbott on June 9, 2021, extends this period to 300 days for claims based on conduct that occurred on or after September 1, 2021. The 180-day period will still apply to other discrimination claims, including discrimination based on sex, race, color, disability, national origin, or religion.

Although it is yet to be determined exactly how these changes will be interpreted and applied, it is imperative that all employers—regardless of size—be proactive to ensure they are taking measures to minimize liability for sexual harassment claims. Three important steps are (1) robust policies, that allow reporting through multiple avenues, (2) manager training, and (3) swift action to investigate claims. Phillips Murrah has extensive experience investigating and defending sex harassment claims and working with employers to make sure their training, policies and procedures protect their businesses. For assistance, contact your Phillips Murrah labor and employment lawyer.

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

Janet Hendrick portrait

Janet Hendrick is a Shareholder and a 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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Biden DOL Rescinds Trump Administration’s Joint Employer Rule

By Janet A. Hendrick and Phoebe B. Mitchell

On July 29, 2021, the Department of Labor (DOL) rescinded the Trump Administration’s joint employer rule under the Fair Labor Standards Act (FLSA). This pro-worker change makes it more likely that an employer will be considered a “joint employer” and liable for another employer’s actions under the FLSA.

portraits of attorneys Janet Hendrick and Phoebe Mitchell

Janet A. Hendrick and Phoebe B. Mitchell

In its press release, the DOL explained the importance of the joint employer rule: “Under the FLSA, an employee can have more than one employer for the work they perform. Joint employment applies when – for the purposes of minimum wage and overtime requirements – the department considers two separate companies to be a worker’s employer for the same work. For example, a joint employer relationship could occur where a hotel contracts with a staffing agency to provide cleaning staff, which the hotel directly controls. If the agency and the hotel are joint employers, they are both responsible for worker protections.”

Under the previous rule, the DOL would consider four factors to determine whether a company is a joint employer: whether the company (1) hires and fires the employee; (2) supervises and controls employees’ work schedules or conditions of employment to a substantial degree; (3) determines employees’ rate and method of payment; and (4) obtains employment records.

The DOL stated that this former rule “included a description of joint employment contrary to statutory language and Congressional intent.” The new rule states that rescinded rule “intertwined the horizontal joint employment provision with the vertical joint employment provisions,” while the new final rule asserts that horizontal and vertical joint employment are separate concepts.

Under the new rule, horizontal joint employment exists where an employee is separately employed by and works separate hours in a workweek for more than one employer, and the employers are “sufficiently associated with or related to each other with respect to the employee.”

joint employer rule graphic 2

Vertical joint employment exists where “an employee has an employment relationship with one employer (typically a staffing agency, subcontractor, labor provider, or other intermediary employer),” another employer is “receiving the benefit of the employee’s labor,” and “the economic realities show that the employee is economically dependent on, and thus employed by,” the other employer.

joint employer rule graphic 1

The new rule goes into effect on September 28, 2021.

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.

Janet Hendrick portrait

Janet Hendrick is a Shareholder and a 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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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 Shareholder and a 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.


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.

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

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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

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

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

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Understanding tribal legal systems increasingly important

By Hilary Hudson Clifton

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

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

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

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

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

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

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

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Kanye Family Law Lessons – Digging for Gold in Oklahoma

By Robert K. Campbell

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

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

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

Attorney Robert Campbell

Robert K. Campbell’s legal practice is focused in the area of family law, specifically concentrated in matters of divorce, legal separation and custody issues. He represents clients by providing steady, thoughtful and resourceful counsel to advise them through significant family and life transitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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OSHA issues updated guidance on workplace COVID-19 prevention programs

By Lauren Symcox Voth

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

Stock image of industrial worker wearing a mask

(Adobe Stock)

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

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

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

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

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

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

Attorney Lauren Symcox Voth

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

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

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LLCs often struggle to qualify for diversity jurisdiction

By Justin G. Bates

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

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

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

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

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

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

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

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

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

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

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Limitations of the Texas Citizens Participation Act

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

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

By Laurel L. Baker |

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

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

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

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

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

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

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

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

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

Employee or independent contractor? DOL finalizes new rule

By Michele C. Spillman

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

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

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

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

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

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

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

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

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

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

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

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

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