This year, the US Supreme Court will get a chance to say whether federal civil rights law protects gay and transgender employees from discrimination, and California courts will grapple with recent changes making it harder for Golden State businesses to label workers as independent contractors. McDermott’s Michael Sheehan looked at these and other cases to watch in 2020 in a recent article for Law360.
Originally published by Law360, January 2020
A decision in Texas v. United States was issued by a divided three-judge panel of the US Court of Appeals for the Fifth Circuit on December 18, 2019. This case presented once again the question whether the Affordable Care Act (ACA) is constitutional and sustainable, and questions of severability remain for the near future.
This month, Assembly Bill 5 (A.B. 5) was signed into California law. A.B. 5 codifies the “ABC Test”—used to determine if a worker is an independent contractor—which is broader, harsher and more inclusive than the common law test with which most businesses are familiar.
A.B. 5 appears to be the death knell of convenience for retaining contractors in the Golden State, as well as the advent of a new wave of wage and hour litigation.
DOJ’s focus on individual accountability is particularly important with respect to telemedicine. Telemedicine is a burgeoning field, with a projected market increase of 18% annually over the next six years, reaching $103 billion in 2024. In light of this recent surge in profitability, DOJ has begun paying extra attention to telemedicine, with at least one recent HHS-OIG report asserting that more than one-third of all telemedicine claims are improper.
When California’s Dynamex decision rolled out the “ABC test”, it placed the burden on the employer to prove independent contractor (IC) status. In a presentation at the Employment and Employee Benefits Forum in California, McDermott’s lawyers discussed the implications of Dynamex, as it applies to various types of employers as well as those using staffing companies. Additionally, they cover Dynamex’s impact on worker classification and employee benefits plans, particularly under ERISA.
Lastly, they provide best practices that employers can do now to prevent litigation.
Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC both recently issued their annual proxy voting guideline updates. As revised, these guidelines have important implications for companies preparing for the 2019 proxy season.
by Joseph S. Adams, Brett R. Johnson and Todd A. Solomon
On February 7, 2012, the U.S. Court of Appeals for the Ninth Circuit found California’s Proposition 8, which amended the California Constitution to ban same-sex marriage, to be unconstitutional because it violated the Equal Protection Clause of the U.S. Constitution. Supporters of Proposition 8 have vowed to appeal the ruling to the Supreme Court of the United States, and it is unclear whether the entire Ninth Circuit might agree to hear the case en banc.
The lower court had previously held Proposition 8 unconstitutional for two separate reasons: (1) it impermissibly deprived same-sex couples of the fundamental right to marry guaranteed by the Due Process Clause of the U.S. Constitution, and (2) it violated the Equal Protection Clause of the U.S. Constitution because it excluded same-sex couples from state-sponsored marriage while allowing opposite-sex couples to marry. The Ninth Circuit affirmed the lower court, but narrowly tailored its decision to facts specific to California. Because same-sex couples had previously been granted the right to marry and Proposition 8 eliminated that right, the Ninth Circuit limited the question before it to whether California had a legitimate reason to take away same-sex couples’ right to the official status of “marriage,” rather than the substitute label of “domestic partnership.” The Ninth Circuit found no such legitimate reason, stating “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in California, and to officially reclassify their relationships and families as inferior to those of opposite-sex couples.”
Because the Ninth Circuit’s decision was focused on facts specific to California, the ultimate legal effect of the ruling is likely to be limited to California.
For now, same-sex marriage in California continues to be on hold because the Ninth Circuit affirmed the lower court’s stay pending further appeal. By keeping the stay in place, same-sex marriages will not resume in California until the appeal process runs its course (or until a court lifts the stay). As a result, the immediate effect of the decision on employee benefits is to maintain the status quo. While additional same-sex marriages cannot yet take place, California does recognize the approximately 18,000 same-sex marriages performed in 2008 before Proposition 8 was passed. Further, couples in California can still enter into spousal-equivalent domestic partnerships, meaning employers may have several different types of same-sex relationships to address in their employee benefit arrangements. Employers should keep an eye on further developments in California as litigation surrounding Proposition 8 winds its way through the appeal process. If and when same-sex marriages resume in California, employers will need to carefully review their employee benefit plans and programs to determine what changes are necessary or desirable.
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