Legal Updates

Aftershocks from D.C.’s "Labor Law Earthquake" Likely to be Felt Throughout the U.S. Hospitality Industry

By:  Kara M. Maciel and Mark M. Trapp

On August 23, 2011 the Washington D.C. area experienced a 5.9 magnitude earthquake. A week later, a “labor law earthquake” of far greater magnitude had its epicenter in a federal agency in D.C. In the coming weeks and months, its aftershocks will be felt by unprepared employers, particularly those operating hotels, restaurants, spas and clubs in the hospitality industry.

In an opinion that America’s largest private sector labor union called a“monumental victor[y] … for unions,” the National Labor Relations Board (“NLRB” or “Board”) upended decades of precedent and placed virtually all employers at risk of organizing by so-called “micro unions.” The decision, Specialty Healthcare and Rehabilitation Center, 357 NLRB No. 83 (Aug. 26, 2011), was made public on August 30, 2011.

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Doing Business in Portugal

With 10 centuries of history, our country is located in the intersection of Europe, America and Africa.

As the legacy of the former Empire, Portuguese language is the 5th most spoken in the world, being spread over the 5 continents, notably in Brazil, Angola, Mozambique, Cape Verde, São Tomé e Princípe, Guiné Bissau, Macau and East Timor.

Lisbon is the capital of a territory that comprises the mainland and the Atlantic archipelagos of the Azores and Madeira, surrounded by one of the largest maritimal areas of the world.

For the full guide to doing business in Portugal, please click here.

 

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Updated – HHS Publishes Health Insurance Premium Rate Review Final Rule, Amends Rule to Include Policies Sold Through Associations, and Lists States with Effective Rate Review Programs

EBG Introduces Interactive National Rate Review Scorecard

by Jesse M. Caplan and Lynn Shapiro Snyder

Shortly after the September 1st effective date for the Centers for Medicare & Medicaid Services (CMS) Rate Review Regulations, the U.S. Department of Health and Human Services published an Amendment to the Final Rule that revises the definitions of “Individual Market” and “Small Group Market” to include insurance policies sold to individuals and small groups through associations, whether or not the applicable state includes association coverage in its own definitions of the individual and small group markets. CMS also recently added two more states to the list of states with “effective rate review programs” covering both the individual and small group insurance markets.

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NLRB Continues its Mission to Revamp Labor Law: Modifies standard for determining appropriate bargaining units in non-acute health care facilities

In our January 10, 2011 Alert, Inch by Inch, Row by Row–NLRB Looks to Facilitate Organizing in Non-Acute Health Care Facilities, we advised you that the National Labor Relations Board was re-evaluating how it determines an appropriate bargaining unit in non-acute health care facilities.   In Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (Member Hayes dissenting…again), the Board found that Certified Nursing Assistants (CNAs) may comprise an appropriate bargaining unit without including other nonprofessional employees.  In doing so, the Board overruled Park Manor Care Center, Inc., 305 NLRB 872, 875 (1991) as “obsolete.”

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Update on the Confusion in Illinois Non-Compete Law

Illinois’ appellate courts are divided into five districts. Illinois’ lower (or trial) courts typically follow the decisions of the appellate district in which they are located. Unfortunately for employees and employers alike, those districts currently disagree about the appropriate standard for enforcing non-compete agreements. As a result, the enforceability of non-compete agreements in Illinois currently depends in part on where a lawsuit is filed.

The most recent appellate case that added to this confusion was the Illinois Court of Appeals for the Second District’s December 2010 opinion in Reliable Fire Equipment Company v. Arredondo, which we blogged about here. However, earlier this year, the Illinois Supreme Court granted leave to appeal in that case so that it could resolve the disagreement in the various appellate districts. Oral argument in that case has now been set for September 22, 2011. As a result, we may be one step closer to resolving the current confusion in Illinois non-compete law. Stay tuned.

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Divide by three – APRA turns twelve prudential standards into four

Divide by three – APRA turns twelve prudential standards into four

By Greg Moss, Gadens Lawyers, Sydney

Following its December 2010 consultation package, the Australian Prudential Regulation Authority (APRA) has released four prudential standards, intended to consolidate 12 existing standards across the authorised deposit-taking, general insurance and life insurance industries. read more

 

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Advertising Alert: IS THIS THE END OF PREMIUM TEXT MESSAGING GAMES?

More than four years after lawsuits were filed against Fox Broadcasting, NBC, and other parties claiming that sweepstakes promoted on the TV shows “Deal Or No Deal” and “American Idol” were illegal under California and Massachusetts law, the parties have reached a tentative settlement.

The settlement, scheduled for a preliminary hearing in federal district court in California on September 19, provides that the defendants will:

1)  refund all premium text message charges paid by class members – potentially millions of people – who submit valid claims,

For the full alert, please click here.

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HEALTH REFORM: CMS Innovation Center Announces Four Models in Bundled Payments for Care Improvement Initiative

On August 23, 2011, the Centers for Medicare & Medicaid Services (“CMS”) Innovation Center announced a new initiative to encourage health care providers to better coordinate patient care.[1] The Bundled Payments for Care Improvement Initiative (“Bundled Payments Initiative”) seeks to align the financial incentives among hospitals, physicians, and non-physician practitioners through the use of a single negotiated payment for all services provided during an episode of care. The use of a bundled payment is expected to encourage hospitals, doctors, and other specialists to coordinate in treating a patient’s specific condition during a single hospital stay and recovery.

This is one of several new initiatives from the CMS Innovation Center intended to change the existing Medicare payment structure from one that pays for the quantity of care to one that pays for the quality of care. Participation in the Bundled Payments Initiative may serve as a first step for forming partnerships to improve care coordination and encourage participants to move into initiatives aimed at improving population health.

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Practical Reminder: If You Want to Be Able to Toll Your Restrictive Covenants, It’s Best to Say So

Restrictive covenant agreements often contain “tolling” provisions which extend the duration of the covenants by the time of any violation. Sometimes, employers do not include tolling provisions in their restrictive covenant agreements, but nevertheless subsequently request that a court use its discretion to extend the duration of those covenants by the time of a violation anyways. A recent opinion from the United States Court of Appeals for the First Circuit highlights the danger in not including a tolling provision in a restrictive covenant agreement.

In EMC Corporation v. Arturi, __ F.3d __ (1st Cir. Aug. 26, 2011), EMC requested a preliminary injunction prohibiting its former employee from using its confidential information, from competing with EMC, and from soliciting EMC customers. The trial court issued a preliminary injunction prohibiting the disclosure of confidential information. However, the trial court refused to issue an injunction prohibiting the former employee from competing or soliciting EMC’s customers because the one-year time periods in those restrictive covenants had already elapsed and there was no tolling provision to extend them. On appeal, the First Circuit affirmed the trial court’s refusal to extend the non-compete and non-solicit provisions absent a tolling provision. The court explained that under the governing Massachusetts law, “when the period of restraint has expired, even when the delay was substantially caused by the time consumed in legal appeals, specific relief is inappropriate and the injured party is left to his damages remedy.” The First Circuit also specifically pointed out that “EMC could have contracted…for tolling the term of the restriction during litigation, or for a period of restriction to commence upon preliminary finding of breach. But it did not.”

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Immigration Update

By:  Robert S. Groban, Jr.

Many of our hospitality clients are revisiting immigration requirements to see if there are any advantages that they have overlooked. One overlooked advantage is the USCIS’s E-Verify system. Employers know that the IRCA requires them to satisfy the Form I-9 requirements.  Many have found this difficult to implement and have been the targets of worksite enforcement operations by U.S. Immigration and Customs Enforcement (“ICE”) that are costly to defend and often result in significant fines. Traditionally, many hospitality employers have looked at the E-Verify system as something to be avoided due to the time required to learn how to use it and the number of potential employees that the system would prevent them from hiring. 

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