1990 – Author of “The Pro Bono Debate and Suggestions for a Workable Program” for the Cleveland State Law Review

1996 – Co-author of “CERCLA Lender Liability Rule Codified”, Lender Counsel Group ALTA Annual Conventionandnbsp;

1997 – Co-author of “Amendment to CERCLA, RCRA Affects Lenders”, National Law Journalandnbsp;

The IRS has recently issued guidance regarding what constitutes an “involuntary termination” under the American Recovery and Reinvestment Act (ARRA). To quickly recap, the ARRA provides for a 65 percent reduction in the premium otherwise payable by certain involuntarily terminated individuals (involuntarily terminated from September 1, 2008, through December 31, 2009) and their families who elect Consolidated Omnibus Budget Reconciliation Act (“COBRA”) continuation health coverage.

The definition of “involuntary termination” for premium reduction purposes, however, had not previously been defined. The IRS guidance, reproduced in relevant part, states the following regarding “involuntary termination”:

  • In general, what circumstances constitute an involuntary termination for purposes of the definition of an assistance eligible individual?

    • In general, an involuntary termination means a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services. In addition, an employee-initiated termination from employment constitutes an involuntary termination from employment for purposes of the premium reduction if the termination from employment constitutes a termination for good reason due to employer action that causes a material negative change in the employment relationship for the employee. Involuntary termination is the involuntary termination of employment, not the involuntary termination of health coverage. Thus, qualifying events other than an involuntary termination, such as divorce or a dependent child ceasing to be a dependent child under the generally applicable requirements of the plan (such as loss of dependent status due to aging out of eligibility), are not involuntary terminations qualifying an individual for the premium reduction. The determination of whether a termination is involuntary is based on all the facts and circumstances.

  • Does an involuntary termination include a situation in which an employment contract expires and is not renewed?

    • An involuntary termination may include the employer’s failure to renew a contract at the time the contract expires, if the employee was willing and able to execute a new contract providing terms and conditions similar to those in the expiring contract and to continue providing the services.

  • Does an involuntary termination include the death of an employee or absence from work based upon illness or disability?

    • Involuntary termination does not include the death of an employee or absence from work due to illness or disability.

  • Does a “forced resignation” constitute an involuntary termination?

    • If a termination is designated as voluntary or as a resignation, but the facts and circumstances indicate that, absent such voluntary termination, the employer would have terminated the employee’s services, and that the employee had knowledge that the employee would be terminated, the termination is involuntary.

  • Does an involuntary termination include a lay-off period with a right of recall or a temporary furlough period?

    • Yes. An involuntary reduction to zero hours, such as a lay-off, furlough, or other suspension of employment, resulting in a loss of health coverage is an involuntary termination for purposes of the premium reduction.

  • Does an involuntary termination include a reduction in hours?

    • Generally no. If the reduction in hours is not a reduction to zero, the mere reduction in hours is not an involuntary termination. However, an employee’s voluntary termination in response to an employer-imposed reduction in hours may be an involuntary termination if the reduction in hours is a material negative change in the employment relationship for the employee.

  • Does an involuntary termination include the death of an employee or absence from work based upon illness or disability?

    • Involuntary termination does not include the death of an employee or absence from work due to illness or disability.

  • Does involuntary termination include an employer’s action to end an individual’s employment while the individual is absent from work due to illness or disability?

    • Yes. Involuntary termination occurs when the employer takes action to end the individual’s employment status (but mere absence from work due to illness or disability before the employer has taken action to end the individual’s employment status is not an involuntary termination).

  • Does an involuntary termination include retirement?

    • If the facts and circumstances indicate that, absent retirement, the employer would have terminated the employee’s services, and the employee had knowledge that the employee would be terminated, the retirement is an involuntary termination.

  • Does involuntary termination include involuntary termination for cause?

    • Yes. However, for purposes of Federal COBRA, if the termination of employment is due to gross misconduct of the employee, the termination is not a qualifying event and the employee and other family members losing health coverage by reason of the employee’s termination of employment are not eligible for COBRA continuation coverage.

  • Does an involuntary termination include a resignation as the result of a material change in the geographic location of employment for the employee?

    • Yes

  • Does an involuntary termination include a work stoppage as the result of a strike initiated by employees or their representatives?

    • No. However, a lockout initiated by the employer is an involuntary termination.

  • Does an involuntary termination include a termination elected by the employee in return for a severance package (a “buy-out”) where the employer indicates that after the offer period for the severance package, a certain number of remaining employees in the employee’s group will be terminated?

    • Yes.

Click hereandnbsp;to access this information directly on the IRS website.

If you have questions regarding this recent guidance or the COBRA provisions of the American Recovery and Reinvestment Act of 2009 in general, please feel free to contact one of theandnbsp;Labor and Employment Lawandnbsp;attorneys at Walter | Haverfield, LLP.

The information in this Client Advisory is a summary of often complex legal issues and may not cover all of the “fine points” of a specific situation or court jurisdiction. Accordingly, it is not intended to be legal advice, which should always be obtained in consultation with an attorney.

Byandnbsp;Mark S. Fuscoandnbsp;andandnbsp;Sara R. Cooper

Unfortunately, all other options have failed and your company is forced to file suit against an out-of-state vendor or customer. For a variety of reasons – not the least of which is cost – you would like to keep this lawsuit in state court rather than federal court. In fact, you have added a ‘forum selection clause’ to all of your contracts with vendors and customers requiring all disputes to be resolved in the county where your company is located, in accordance with Ohio law. Unfortunately, despite this seemingly clear provision, your lawsuit has been removed to federal court anyway and your ‘home team’ advantage wiped away.Why?

While Ohio law permits your company to specify where you want disputes to be heard, Federal law allows defendants to remove a lawsuit to federal court if the case was filed in a state court other than their home state and the amount at issue is more than $75,000. Defendants may waive their right to remove a case to federal court, but the waiver must be ‘clear and unequivocal.’ Unfortunately, this means that the forum selection clause you drafted may not be enough to keep your case from being removed to federal court.andnbsp;How clear does my company have to be?

The Sixth Circuit Court of Appeals has determined that a defendant has not ‘clearly and unequivocally’ waived the right to remove the case to a federal court if the language in a forum selection clause such as that noted above does not (a) mention the possibility of the case being removed to federal court or (b) specifically say that the defendant can remove the case to federal court in certain situations unless this right is waived, and require a waiver of this right. Ohio businesses relying on forum selection clauses that do not expressly mention this right and require a waiver may find themselves in federal court even though their contracts specify that disputes must be settled in state courts.andnbsp;So, what can my company do?

Review your contacts and agreements with out-of-state vendors or customers if you would like to keep your ‘home field’ advantage and make sure you are not subjecting your business to litigation in federal court.

Walter | Haverfield attorneys regularly assist businesses in reviewing their day-to-day corporate documents to make sure these documents are meeting the needs and expectations of the business. For more information on this or other business litigation issues, please contact the Walter | Haverfield attorney with whom you regularly work, or any of the attorneys in theandnbsp;Business Litigation Groupandnbsp;in our office.

The federal Credit Card Accountability, Responsibility and Disclosure Act of 2009 (“CARD Act”) imposes new regulations on gift certificates, store gift cards and general use pre-paid cards (“gift cards”) with respect to expiration dates, fees, and disclosures both on the gift card and prior to purchase. The CARD Act’s provisions, along with the related administrative rules enacted by the Federal Reserve, are scheduled to go into effect onandnbsp;August 22, 2010. However, with the recent passage of House Bill 5502, gift cards produced prior to April 1, 2010 will not have to comply with the “on-card” disclosures untilandnbsp;January 31, 2011, with some restrictions.

Merchants and other issuers of gift cards must be sure they are complying with all regulations for all gift cards offered after the August 22nd effective date. A general overview of the new regulations is provided below:

  • Expiration Dates.andnbsp;The underlying funds associated with a gift card may not expire sooner than five years after date of purchase or after date of last load, if it is a reloadable gift card. If the gift card’s underlying funds expire at any time, an expiration date must be placed on the gift card.
  • Dormancy, Inactivity, or Service Fees.andnbsp;Dormancy, inactivity and service fees mayandnbsp;onlyandnbsp;be charged once per month and only after there has been no use of the card for one year.
  • Disclosures. The Act requires disclosures both: (a) prior to the gift card purchase and (b) on the gift card itself, when there are expiration dates or fees associated with the gift card. The disclosures must provide specific information regarding the expiration dates and fees and must include a toll-free telephone number where consumers can obtain additional information. The disclosures must be “clear and conspicuous,” but there is no specific font requirement.
  • Loyalty, Award, and Promotional Cards. Gift cards issued through loyalty, award and promotional programs are exempt from the expiration date and other restrictions of the CARD Act. Nonetheless, disclosures must still be made on or with the gift card, including the fact that the gift card is for promotional or loyalty purposes, whether there is an expiration date or fees associated with the underlying funds, and a toll-free telephone number for information related to any fee.
    Loyalty, award and promotional programs are not specifically defined by the CARD Act. However, they can generally be thought of as a merchant “reward” to a customer, potential customer, or employee for purposes of marketing, such as:
    • Reward programs for purchases made from the merchant
    • Rebate programs
    • Sweepstakes or contests
    • Referral programs
  • General Exemptions. Gift cards that are issued only in paper form are exempt from the Act. However, this exemption does not apply to gift cards that are initially issued to the purchaser electronically (for example, by e-mail) and then printed on paper. Rather, the gift card mustandnbsp;originatein paper form. Also, gift cards that are not issued for a specific dollar amount are not subject to the Act, such as cards for a percentage discount (i.e., 10% off) or cards for a type of service (i.e., a one-night hotel stay). Likewise, gift cards that are redeemable for an admission to an event are not subject to the Act.

Note that the CARD Act preempts only those state laws which are less restrictive than and/or in conflict with the Act’s regulations. State laws which provide greater consumer protection than the Act remain effective. Thus, Ohio’s law prohibiting gift cards with less than a two-year expiration date is preempted by the Act’s five-year expiration date requirement. However, Ohio’s prohibition against dormancy fees within two years following issuance of a gift card remains effective and must be applied in conjunction with the Act’s prohibition against dormancy fees during periods of inactivity of less than one year.

This Client Alert is merely a general overview of the CARD Act’s complex regulations. We recommend that all current and contemplated gift card and promotional programs be reviewed in light of the specific provisions of the Act in order to avoid running afoul of these detailed federal regulations. Violations of the Act may result in criminal and civil liability.

The information in this Client Alert is a summary of often complex legal issues and may not cover all of the “fine points” of a specific situation. Accordingly, it is not intended to be legal advice, which should always be obtained in consultation with an attorney.andnbsp;William R. Hanna,andnbsp;Geoffrey S. Gossandnbsp;or Heather R. Baldwin Vlasuk ofandnbsp;Walter | Haverfield will be pleased to assist with any questions or concernsandnbsp;about this new development in the law.

Byandnbsp;R. Todd Hunt,andnbsp;William R. Hannaandnbsp;and Matthew J. Federico, Legal Extern,andnbsp;Thomas M. Cooley Law School

Last week, President Obama signed House Bill 3630 into law. This law extends payroll tax deductions and unemployment benefits, but there is also a provision that essentially mandates local government approval of applications for modifications of “an existing wireless tower or base station.” This section may put local governments in a difficult position with respect to wireless tower companies which have properties in their jurisdiction.

The law pushes aside a portion of Section 332(c)(7) of the federal Telecommunications Act, which granted local governments authority to control where cellular and wireless towers, antennas, and other related facilities can be located.

The new law states: “Notwithstanding [section 332(c)(7)] or any other provision of law, a state or local government may not deny, and shall approve, any eligible facility’s request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station.”

Wireless tower companies will undoubtedly see this language as a green light from the federal government to push local governments into approving applications they have filed to expand or reconfigure their facilities. However, the clarity of the new law leaves much to be desired. It does not forbid a local government from reviewing the application and it contains some ambiguities. It would be prudent, therefore, to review your community’s regulations in light of this federal mandate.

The year 2012 presents U.S. taxpayers with a gift planning dilemma. As the law stands today, and at least until December 31, 2012, every person may transfer up to $5,120,000 (“Estate Tax Exemption”) of assets to any one or more persons (excluding spouses) without incurring estate or gift tax obligations. For a married couple, that amount doubles, up to $10,240,000. This is in addition to the $13,000 that each person can gift annually to as many individuals as he or she desires ($26,000 for a married couple). The Estate Tax Exemption is reduced dollar for dollar for any annual gifts in excess of $13,000 ($26,000 for a married couple).

In addition, transfers to grandchildren and younger generations in trust are subject to a second layer of tax at the grandchild’s death, known as the generation-skipping tax. The generation-skipping tax system also exempts up to $5,120,000 of assets per transferor (also reduced for prior gifts exceeding $13,000 per year, per person to those who are in the grandchildren’s generation or younger).

President Obama’s proposed budget would reduce these amounts to $3.5 million ($7 million per couple). In addition, his budget would make dramatic changes to the use of unique planning opportunities offered by grantor trusts and grantor retained annuity trusts. It is highly likely that nothing will change before the November elections. After that, anything may happen – including nothing – which would take us back to the law as it was in 2001. This would reduce the $5,120,000 exemption to $1 million (with indexing, this is about $1,130,000). We have also been advised that even if these exemptions are reduced in 2013, taxpayers who take advantage of the higher exemption amount now will retain the full benefit of the current exemption, notwithstanding the fact that there may be a lower exemption at the time of their deaths.

For this reason, there is already a flurry of activity in the estate planning area for clients with significant wealth. Many are making outright gifts of significant amounts to children and grandchildren. Some are doing so using irrevocable trusts, in order to regulate distribution and protect trust assets from dissipation caused by divorce and creditor claims. People are living longer and the prospect of second marriages raises concerns for the senior generation. Trusts provide the grantor with the ability to preserve family wealth for the grantor’s bloodline.

Still others are employing leveraging transactions such as grantor trusts or grantor retained annuity trusts, which are specially crafted trusts that effectively increase lifetime gifting. Family limited liability companies continue to serve as valuable planning vehicles for both wealth transfer and asset protection. There are any number of powerful estate planning techniques that can be used to take advantage of the increased exemption in the most tax-efficient manner.

What if you cannot afford, though, to give up control of the wealth you transfer, but wish to lock in the $5,120,000 exemption? If you are married, one possibility is for each spouse to set up different trusts so that the other spouse has use of the gift during his or her lifetime and that, upon death, the property goes to the lineal descendants. If both spouses live to their “life expectancy” ages, the income and principal of the trust, within limits, will be fully available to the spouses making the transfer, for most of the rest of their lives. At the same time, the full exemption is used and the transfer could be exempt from estate taxation forever. Here is an example:

Rick and Leslie are married. Rick’s net worth is $20 million, consisting almost entirely of the value of the family business owned by Rick. Leslie’s net worth is $10 million, which includes the principal residence, a second home in California, about $4 million of investable assets and about $4 million of stock in the family business. Rick and Leslie expect their estates to pay an estate tax, at the death of the survivor, of at least $10 million. They want to take advantage of the current $5,120,000 per person exemption in 2012 and also remove appreciation in assets from their estates.

In February 2012, Rick established an irrevocable grantor trust. It provides that Leslie gets all of the income and principal, as needed, to support her lifestyle. Rick transferred his non-voting shares of the family business to the trust with a value of $5,120,000. A bank was selected as trustee.

In May 2012, Leslie decided to do something similar to Rick, except that her trust may, at the discretion of the trustee, accumulate income. In addition, the principal may be distributed to Rick, again at the discretion of the trustee, and his will contains a power of appointment which enables him to affect the relative ownership of shares of the trust by the next generation. One of Leslie’s trusted friends is the trustee.

Until the death of either Rick or Leslie, they will have the full benefit of the income and, potentially, the principal as needed from both trusts. When one dies, the survivor must be able to live without the income from 1/2 of the property, although life insurance can be purchased to protect against a premature death. In the alternative, certain limited powers of appointment may be used to prevent the loss of income on the first death.

There are also many other leveraged ways to take advantage of the current law. Do not be lulled into a false sense of security based upon the current $5,120,000 exemption. As noted above, we do not know what Congress will do, and there is a possibility that the exemption may revert to $1,130,000. Although no one can tell what will happen in the future, there are ways to lock in today’s law without giving up full control over the property you gift. For more information, please contact any of our Tax and Wealth Management Attorneys:

James Mackeyandnbsp;- 216-928-2921
Lacie O’Daireandnbsp;- 216-928-2901
Robert Horbalyandnbsp;- 216-928-2934

By Marc J. Blochandnbsp;and Elise C. Keating

The current National Labor Relations Board (NLRB) has been waiting for an appropriate case through which it can reverse the Bush-era decision inandnbsp;Register-Guard,andnbsp;which restricted the use of employer email systems for union activities. It appears that the NLRB may have found such a case inandnbsp;Roundy’s Inc. Therefore, sometime before the November presidential election, the NLRB is expected to issue a decision in that matter. While the case arose out of non-employee union members distributing handbills on Roundy’s property to its grocery store customers, we believe that the ruling has the potential to go beyond the distribution of paper bills to the use of employer email systems.

Labor lawyers are looking for the NLRB’s decision inandnbsp;Roundy’sandnbsp;to pick up where the earlier Clinton-era NLRB decision in theandnbsp;Sandusky Mall Co.andnbsp;action left off. Theandnbsp;Sandusky Mallandnbsp;decision held that an employer violated The National Labor Relations Act (Act) when it barred union access to its property while allowing access to non-union groups. This situation is similar to theandnbsp;Roundy’sandnbsp;matter because Roundy’s allowed groups like the Girl Scouts and the Red Cross to conduct activities at its grocery stores, but it ejected the union when the latter handed out pamphlets urging a boycott of Roundy’s store due to use of non-union labor and failure to pay the prevailing wage standard.

Though neitherandnbsp;Roundy’sandnbsp;norandnbsp;Sandusky Mallandnbsp;deal with employer email systems, it appears that the NLRB will use the upcoming decision inandnbsp;Roundy’sandnbsp;to expand the scope of “property” from the physical to the virtual. If the ruling comes down as anticipated, employers who, for example, allow the sale of Girl Scout cookies or publicize Red Cross blood drives through their email systems, must permit that same level of access to unions.

Theandnbsp;Register-Guardandnbsp;decision made a distinction between union and non-union groups, stating that unlawful discrimination meant “unequal treatment of equals” when it came to access of the employer’s email system. So, while employers could not permit one union access but not another, or allow access to only anti-union groups, they could freely permit access to non-union groups (like the aforementioned Red Cross and Girl Scouts) while denying that same access to unions.

Because there are no similar cases in the pipeline, we anticipate that the current NLRB will useandnbsp;Roundy’sandnbsp;as the vehicle to reverseandnbsp;Register-Guard,andnbsp;despite the fact that the case does not deal with email communication. The effect of this decision would be an opening of access to employer intra-office e-mail systems for union activities.

Consequently, if your company’s current policy is based on theandnbsp;Register-Guarddecision, restricting access to the employer’s email system, it would be prudent to take a look at company email policy to determine if revisions will need to be made. An updated client alert will be issued when theandnbsp;Roundy’sandnbsp;decision is published, along with advice on how employers should proceed in light of the decision. If you have any questions regarding the upcoming decision, please contact a member of Walter | Haverfield’s Labor and Employment Law Group.

Despite current market conditions that have caused the size of many other area law firms to remain stagnant or shrink, we are pleased to announce that Walter | Haverfield overall has grown by more than 20 percent in 2012 with a large percentage of the growth occurring in our Employment/Education Group. Since 2010, in fact, six attorneys have joined the group, making us one of the largest groups in the region to focus on employment and education law.

We see this as a major testament of our firm’s ability to differentiate itself in the market. At Walter | Haverfield, we pride ourselves in being able to offer high-quality and responsive legal services at competitive rates. The results speak for themselves, as in the past 12 months alone, we have brought on board 20 new school districts as clients.

Joining our Employment/Education Practice Group in 2012 is Christina Henegen Peer, who is a partner at the firm.

In response to a report from the Government Accountability Office (GAO) finding students with disabilities are not receiving an equal opportunity to participate in extracurricular athletics, the Office for Civil Rights (OCR) issued a “Dear Colleague” letter on January 25, 2013. The letter does not create new obligations, but reiterates and clarifies the responsibilities of public school districts under Section 504 of the Rehabilitation Act of 1973 (Section 504) with respect to extracurricular activities.

Under Section 504, public school districts must ensure that qualified students with disabilities are given an opportunity to benefit from a district’s extracurricular programs “equal to that of students without disabilities.” As a practical matter, this means:

  • Extracurricular programs can still require students to demonstrate a level of skill or ability to participate through a tryout process – provided thatandnbsp;allpotential team members are required to try out.
  • A qualified student with a disability must be given the opportunity to try out if he/she meets the criteria for doing so (e.g., has the required grade point average, etc.). Failure to allow a qualified student with a disability the opportunity to try out is discrimination and violates Section 504.
  • District personnel cannot act on generalizations and stereotypes about the capabilities of students with disabilities. OCR gives the example of a lacrosse coach who will not play a student with a learning disability because the coach feels the disability renders the student unable to deal with the pressures of an actual game.
  • Districts are required to provide “reasonable modifications” and provide necessary aids and services to qualified students with disabilities, unless the district can show that doing so would result in a “fundamental alteration” to the program or create a health or safety hazard for other students or the student with a disability.
    • A “fundamental alteration” either: a) alters an essential aspect of the activity or game so that it would be unacceptable even if it affected all competitors equally; or b) has a peripheral impact on the activity or game itself but could give the particular player with a disability an unfair advantage over others and, therefore, it fundamentally alters the character of the competition.
    • For example, widening the holes on a golf course would affect all players equally but would fundamentally alter the nature of the game.
  • Any rule promulgated by an extracurricular association, organization, club or league using school district property that renders a student ineligible to participate on the basis of disability is superseded by the district’s obligations under Section 504. Providing assistance to organizations that use discriminatory practices could constitute a Section 504 violation.

OCR recognizes that even if a district adheres to the guidance set forth above, there may still be circumstances where students with disabilities cannot participate in existing programs, even with reasonable modifications, aids and services. In these situations, OCR encourages districts to create additional extracurricular activities for those students. However, there is no requirement that school districts create additional extracurricular activities.

In response to the “Dear Colleague” letter, school districts should consider:

  • Reviewing current policies to ensure compliance with the guidance in the Dear Colleague letter and with Section 504 requirements generally.
  • Looking at how extracurricular programs operate in practice to ensure students with disabilities are indeed getting an equal opportunity to participate. A well-crafted policy serves no purpose if it is not being followed.
  • Educating school staff on the “equal opportunity” requirement of Section 504 and the danger of making decisions based on stereotypes rather than objective evidence.
  • Creating extracurricular activities for those students with disabilities who cannot participate in current programs. This could include discussions with nearby districts about forming regional teams.
  • Ensuring that no organizations receiving district assistance discriminate on the basis of disability and that these groups understand that receiving district assistance requires Section 504 compliance.

If your district has questions about the “Dear Colleague” letter or whether its policy and/or practices are compliant with Section 504, please contact a member of Walter | Haverfield’s Education Services Group.

Byandnbsp;David E. Schweighoefer andandnbsp;Lacie L. O’Daire

The laws requiring changes to health care and benefits provided by employers are either already in force or will be in force in the next year or two. The impact upon you and your business will be greatly dependent on the actions you take in 2013.

If you have fewer than 50 full-time employees (counting certain part-timers as full-time equivalents), then the new law does not affect you, except for changes that medical insurance companies will be making to all of their health plans which may impact your coverages and costs. However, if you do not currently provide health insurance, or it does not currently comply with new law requirements, you may choose to provide health insurance to your employees and receive tax credits from the federal government, through 2014, in order to reduce your costs. Regardless of what path a small employer chooses, however, the tax penalties and the requirement to offer health insurance will not apply to you. However, if you grow in the future and begin nearing that level of employment, there are some decisions which you will need to make, so it’s important to remain vigilant.

If you employ over 50 full-time employees, you need to pay attention and take immediate action. For this purpose, even if you don’t feel large, you are referred to as a “Large Employer” or an LE. If you are an LE and currently provide health insurance to your employees, you will be exempt from many of the new law requirements if you make no changes to your current plan. Your plan will be “grandfathered.” If you have a plan and you do not do any of the following, you can maintain your grandfathered status. The prohibited changes are:

  • You may not increase the employee cost over certain inflation-adjusted amounts, including co-pays, co-insurance and deductibles;
  • You may not reduce the employer contribution to the cost by more than 5%;
  • You may not significantly cut or reduce benefits; and
  • You may not add a new annual limit on benefits or tighten an existing annual limit (with at least one exception).

If you qualify as a grandfathered plan, you are exempt from some – but not all – of the new law requirements. You are exempt from the requirement to provide preventative care coverage, the additional patient protections in the selection of medical providers and in preauthorization, the requirement that premiums must not discriminate in favor of the highly-paid, the guaranteed coverage requirement, and the new non-discrimination rules on coverage under the plan for fully-insured plans.

However, even if you are grandfathered, you still must comply with the following requirements:

  • Extension of coverage to dependents (not spouses) up to age 26;
  • Elimination of lifetime and annual limits by 2014;
  • Elimination of pre-existing conditions exclusions;
  • Limits on rescissions of coverages in the case of fraud or intentional misrepresentations.

Therefore, you may find it important that you qualify to be grandfathered. We understand, though, that many insurers are telling their clients that they cannot be grandfathered, or that it will be too costly. If grandfathered status is important to you, we recommend that you shop carefully and be wary of some of the information which you are receiving. If you qualify as a grandfathered plan, be sure to avoid making the changes that are outlined above, since they could jeopardize your grandfathered status.

If you are an LE and do not have a grandfathered plan, your plan – beginning in 2014 – must meet all of the requirements set out above (there are 9, in case you are counting). If it does not, there are two sets of tax penalties that could potentially apply to you. In addition, even if you do comply, but at least one of your full-time employees seeks coverage from one of the exchanges, you could be subject to a penalty. One of these penalties is not onerous; in fact, some employers will choose to incur the penalty instead of paying for the coverage. The other could be quite onerous and needs your full attention.

There are a number of time-sensitive considerations that employers must monitor:

  • You could reduce the number of people who must be offered medical insurance under your health plan by strategically selecting a period of time – at least three months and not more than 12 months before 2014 – to test for full-time or part-time status. This is known as the “look-back” safe harbor.
  • A second consideration – if you are considering a merger, acquisition or re-structuring, and the principal purpose of the restructuring is to cover individuals under a grandfathered plan – is that the health plan you offer will lose its grandfathered status.

So what actions should be taken? Here are our recommendations:

  • Determine if you are an LE; if yes, go further;
  • Determine if you have a grandfathered plan, whether that is advantageous to you, and how to maintain grandfathered status;
  • If you are not, or will not, be grandfathered, then determine the cost of upgrading your current plan to meet the new law requirements; compare that with the penalty for not doing so and determine if you will comply;
  • If you are going to comply, then you still need to take steps to be sure that no employee who is offered comparable coverage goes to an exchange;
  • If you are not going to comply, determine how to pay the penalties;
  • Regardless of what action you take, you will have additional payroll reporting requirements; make sure that you understand and comply with them;
  • Check with your insurer to see if they are prepared to issue the new Statement of Benefits and Conditions; the format has been changed extensively, and all insurers must comply;
  • Review all notices to employees as they pertain to insurance plan changes well in advance of the new notice requirements, and remember to think of required board-level meetings or other decision-making processes that need to occur in time for proper notice of changes to employees.

The new law is extensive and there is no one-size-fits-all approach. Please contact us if we can assist you in making your decisions.

U.S. Department of Education Letter Requiring ABA to be Made Available

On September 5, 2013, the Office of Special Education Programs (OSEP) advised the director of the Ohio Department of Health (ODH) that the state must make Applied Behavioral Analysis (ABA) available as an early intervention service to any child considered a good candidate for that particular treatment. OSEP is requiring ODH to submit a written statement that it will make ABA available to children identified as appropriate recipients of the therapy, and to send a memorandum to all early intervention service programs to inform them of this requirement. The OSEP letter makes clear that there is no mandate to provide ABA services; however, ODH must include ABA therapy “in the non-exhaustive list of early intervention services that an IFSP can identify and the State will make available if identified as needed by the IFSP team under IDEA Part C.”

Ongoing Litigation Involving Availability of ABA Through Help Me Grow

OSEP’s letter comes in the midst of a federal court battle between parents of a boy with autism and the Clermont County Board of Developmental Disabilities (CCBDD), which administers the ODH’s Help Me Grow (HMG) program. The parents filed a complaint on behalf of their then 2-year-old son to have CCBDD provide him with ABA and immediately sought a court order to force CCBDD to continue their son’s private ABA program during the pendency of legal proceedings. Prior to the complaint, when the parents presented CCBDD with clinical recommendations that their son receive intensive ABA, CCBDD informed the parents that it does not provide ABA.

The court issued an order requiring CCBDD to develop a plan to provide the child with 40 hours of ABA per week based on a recommendation from the Cleveland Clinic Center for Autism.andnbsp;See Young v. State of Ohio, 113 LRP 2036 (S.D. Ohio 2013). The order is to remain in place until the child’s third birthday, when he will move to IDEA Part B and the school district of residence will be responsible for providing services. OSEP indicated in its letter that it will continue to monitor this litigation.

Implications for School Districts

While the OSEP letter only refers to IDEA Part C, the provision of extensive ABA therapy through HMG has implications for students transitioning to IDEA Part B services. If a child receives 40 hours of ABA under Part C, parents are likely to request a continuation of this level of service as the child moves to Part B preschool services. If data from the child’s early intervention ABA services demonstrates growth using this methodology, it may be difficult for districts to argue that a different methodology should be utilized when the child transitions to preschool.

Districts may also have difficulty arguing that a child who received 40 hours of ABA per week through HMG does not require this same level of support as a preschool student. This has implications for districts in terms of the length of the preschool program, staffing considerations, staff training and other logistical issues. Districts must also consider how to incorporate related services and other school activities that foster the development of social skills into the student’s day.

If your district has questions about the recent OSEP letter or whether its policy and/or practices are sufficient under IDEA, please contract a member of Walter | Haverfield’s Education Law Group.

Byandnbsp;Mark S. Fuscoandnbsp;andandnbsp;Sara Ravas Cooper

Effective October 16, 2013, two key provisions of the Federal Communications Commission’s (“FCC”) Telephone Consumer Protection Act (“TCPA”) are set to take effect.

First, one prior exception from liability under the TCPA for phone calls or text messages using an automatic telephone dialing system (“robocalls”) or a prerecorded message was for those calls or messages that were made with the recipient’s “prior express consent.” Under the new interpretation from the FCC of the prior consent exception, with limited exceptions, a business can invoke the prior express consent exception for autodialed or prerecorded calls to a cell phone or for prerecorded telemarketing calls to a residential line only if the called party has physically or electronically signed an agreement that clearly authorizes calls or texts to be made to their phone number by that particular sender. The burden is placed on the business to retain these consent records for at least four years.

Second, the other significant change to the TCPA rules is the elimination of the “established business relationship” (“EBR”) exception for prerecorded telemarketing calls to residences. Previously, businesses may have been able to avoid TCPA liability for prerecorded telemarketing calls that otherwise were prohibited by claiming that they had an EBR with the consumer by virtue of a previous purchase or other business interactions. The new regulations eliminate the EBR exception. Consequently, businesses are now required to obtain prior written consent for all prerecorded telemarketing to residential phone numbers – even those that are for previous customers. These consent records must also be kept for at least four years.

Notably, these changes areandnbsp;in addition toandnbsp;the modifications to the rule that went into effect on January 14, 2013. Since that time the rule has required that prerecorded telemarketing messages that could be answered by a live person must include an automated opt-out mechanism. This opt-out option must be announced at the outset of the call, made available throughout the duration of the call, automatically add the called party’s number to the caller’s do-not-call list and must immediately disconnect the call. For prerecorded telemarketing calls that are answered by an answering machine or voicemail, businesses must now ensure that the message contains a toll-free number that the consumer can call to be connected to an automated opt-out system.

In sum, the new changes in effect on October 16, 2013, will:

  • Require prior express written consentandnbsp;for telemarketing calls made to cell phones using an automatic telephone dialing system or a prerecorded message, but maintain the prior express consent requirement for non-telemarketing calls to cell phones;
  • Require prior express written consentandnbsp;for telemarketing calls made to residential landlines using a prerecorded message; and
  • Eliminate the EBR exception to the obligation to obtain consent for telemarketing calls made to residential landlines using a prerecorded message.

What Constitutes “Express Consent”?

The TCPA defines “prior express written consent” as a signed written agreement that contains a “clear and conspicuous” disclosure to the consumer that by signing the agreement, he or she authorizes the seller to call or text a designated phone number for telemarking purposes using an automatic telephone dialing system or an artificial or prerecorded voice. The agreement must also include a notice that the person signing is not required to sign the agreement “as a condition of purchasing any property, goods, or services.”

The required signature from a consumer may be obtained electronically by email, website form, text message, telephone keypress, or voice recording.

What Should Your Business Do?

The FCC, state Attorneys General, and private plaintiffs have the right to enforce consent requirements. Thus, compliance with these rules is very important. Prior to October 16, 2013, businesses should assess their calling and text messaging practices to first determine if they engage in telemarketing calls. The term “telemarketing” is defined as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.” Then, the business should determine the source of the numbers it calls and whether prior written consent exists for each number. Based on this assessment, businesses should adjust accordingly in order to comply with the impending change to the FCC’s rules as well as in an attempt to avoid potential liability to the extent possible.

On December 21, 2013, the Office for Exceptional Children (OEC) issued Memorandum 2013-1 which outlines changes to Ohio Administrative Code Section 3301-51-05(H)(4)(c). Pursuant to this Memorandum, and changes to theandnbsp;Operating Standards for Ohio Educational Agencies Serving Students with Disabilities, an IEP no longer serves as prior written notice – even if parents sign the document indicating their agreement. This is anandnbsp;immediate changeandnbsp;and districts must immediately begin issuing prior written notice afterandnbsp;all IEP meetingsandnbsp;where changes are made to the student’s IEP. This includes annual review meetings where a new IEP is developedandnbsp;andandnbsp;any meetings held during the term of the IEP where changes are made to the document. OEC will immediately begin enforcing compliance with this new requirement both in complaint investigations and monitoring activities.andnbsp;

What should districts do now?andnbsp;

  • Review all Board policies and internal procedures and make any changes necessary to reflect the new prior written notice requirement.
  • Provide notice toandnbsp;allandnbsp;special education staff members including supervisors, intervention specialists, school psychologists and related service providers about the change to the prior written notice requirement.
  • Provide notice to all building administrators regarding the change to the prior written notice requirements and information on how this will impact special education staff members.
  • Decide which staff members will be responsible for drafting and issuing prior written notice to parents following “routine” IEP meetings (i.e., meetings where there is no disagreement in any area and the PR-01 is only to notify parents of the change to the child’s free appropriate public education).
  • Decide which staff members will be responsible for drafting and issuing prior written notice to parents following “non-routine” IEP meetings (i.e., meetings where there is disagreement on one or more topics, even if parents ultimately sign the IEP indicating agreement).
  • Develop “standard” language for prior written notices to be issued after “routine” IEP meetings.
  • Provide training to all staff members who will be responsible for drafting and issuing prior written notice to parents following IEP meetings.

What are key elements for training?andnbsp;

  • Emphasize the importance of timely issuance of prior written notice – failure to issue prior written notice is a serious procedural error and will lead to adverse consequences for the district.
  • Teach staff members to recognize the difference between “routine” and “non-routine” IEP meetings and what this means with respect to the content of the prior written notice.
  • For “routine” meetings, reassure staff members that the prior written notice is not onerous to write and, in many cases, the district’s “standard” language can be utilized.
  • Train staff members to modify “standard” language when necessary to accurately reflect the discussions at the IEP meeting and changes to the IEP.
  • Remind staff members that there should not be any blanks or N/A notations on the PR-01 form – all questions must be answered.
  • Remind staff members to re-read the prior written notice to ensure that they have answered the question asked by the prior written notice form.

Other tips for compliance…andnbsp;

  • Designate individuals to review all prior written notices drafted by intervention specialists and related service providers to ensure compliance until staff members have had an opportunity to adjust to the new requirements.
  • After discontinuing the mandatory review, continue spot checking prior written notices to find and correct any errors.
  • Advise staff members of available resources if they have questions about whether a prior written notice is required or the content of the notice.

If you have specific questions regarding the content of a prior written notice or would like to schedule training for staff members, please contactandnbsp;Christina Peerandnbsp;or any other member of our Education Law Group.

Byandnbsp;Gary A. Zwickandnbsp;and Lacie L. O’Daire.

On December 30, 2013, the Internal Revenue Service issued its long-anticipated “Safe Harbor” guidance for transactions in which federal Historic Tax Credits are employed to raise capital for real estate redevelopment projects. The guidance was issued in the form of Revenue Procedure 2014-12. To access the full text of Revenue Procedure 2014-12, please follow the link at the bottom of this Client Alert.andnbsp;

The guidance was issued in response to requests for clarification of the IRS position taken in the case ofandnbsp;Historic Boardwalk Hall, LLC v. Commissioner, decided in 2012 by a federal court of appeals. Theandnbsp;Historic Boardwalkandnbsp;case had a chilling effect on pending and new projects which would utilize federal historic tax credits to aid in capital formation for redevelopment of historic structures. It has been anticipated that the guidance would bring stability and certainty to this segment of the real estate industry, which was thrown something of a curve ball in the 2012 decision.andnbsp;

Generally speaking, the IRS re-emphasized a key outgrowth ofandnbsp;Boardwalk Hallandnbsp;- HTC deal structures must ensure that “investors” (owners who are not developers or do not manage the project) share in both the upside and downside risk associated with the project. In IRS-speak, investors should have “a reasonably anticipated value commensurate with the Investor’s overall percentage interest.”andnbsp;

The guidance provides a road-map for HTC-structured transactions to utilize in the future. Among other things, the Safe Harbor guidelines: (i) provide clear minimum equity interest requirements for the developer/sponsor and the investor; (ii) define minimum investor contribution percentages and related timeframes as to when such contributions should be advanced; (iii) create categories of permissible and impermissible guarantees; and (iv) set forth a strict prohibition against developer/sponsor calls (as to the purchase of the investor’s interest).andnbsp;

The Safe Harbor applies to allocations of HTCs on or after December 30, 2013. If transactions which closed prior to this date meet the Safe Harbor guidelines, then the IRS will not challenge the later allocations of HTCs to the extent of the subject matter contained in the guidelines.andnbsp;

This Client Alert is intended to give only a brief overview of the Safe Harbor guidelines. There are other requirements not summarized above that will require detailed analysis for each transaction. It is too early to predict how investors, in particular, will seek to change the structure, pricing and other terms of Historic Tax Credit-related transactions given the guidance provided by the IRS, but deal changes seem likely. Please consult us to provide further advice.andnbsp;

The Sixth Circuit Court of Appeals, which has jurisdiction over Ohio, Michigan, Kentucky and Tennessee, recently issued an opinion finding that an employer may have discriminated against a pregnant employee who had a 50 pound lifting restriction when it refused to allow her to continue to work in a light duty job during her pregnancy.

The case involved a certified nursing assistant (CNA) who was employed by a nursing home in Michigan. After the employee became pregnant, her doctor imposed a 50 pound lifting restriction. When the employee reported for her scheduled shift one evening, she was escorted off the premises and advised she could apply for Family and Medical Leave. The employee, however, refused to use her Family and Medical Leave Act (FMLA) leave, preferring to save it until after the birth of her child. In response, the employer treated her as if she had “resigned,” explaining that it could not accommodate aandnbsp;non-work-relatedrestriction as part of its policy that provided light duty for employees who hadwork-relatedandnbsp;injuries.

In reversing the lower court’s decision granting summary judgment to the employer, the Sixth Circuit found that the employee had presented evidence that the employer treated other CNAs with similar lifting restrictions more favorably by assigning them to “light duty.” The Court noted that, although these employees differed because they had work-related medical conditions, they were still similarly situated in their ability to work because they were placed under similar lifting restrictions of up to 50 pounds. The Court also noted that supervisors allegedly made statements regarding the employee’s pregnancy and her ability to work. The Court, therefore, found that this employee had presented sufficient evidence to establish aandnbsp;prima facieandnbsp;case of pregnancy discrimination and therefore she could present her case to a jury. The Court, however, did affirm the dismissal of the employee’s claims under the FMLA and Americans With Disabilities Act (ADA).

Interestingly, the Court acknowledged that under ordinary circumstances, employees who were restricted because ofandnbsp;work-related injuriesandnbsp;would be inappropriate comparators under federal discrimination law because they are not similarly situated in all respects. The Court noted, however, that the Pregnancy Discrimination Act (PDA) altered the analysis for pregnancy discrimination claims. The Court held that while federal law “generally requires that a plaintiff demonstrate that an employee who receives more favorable treatment be similarly situated in all respects, the PDA requires only that the employee be similar in his or her ability or inability to work.”

This decision has ramifications for any employer who has a light duty policy for employees who have sustained work-related injuries. Basically, what the Court appears to be saying is that it may find a violation of the PDA if an employer discriminates in its treatment of an employee with a work-related restriction and a pregnant employee who has a similar restriction. The Court says that, as long as the two are similar inandnbsp;their ability or inabilityandnbsp;to work, they are similarly situated for proof purposes under the PDA. The Court did not, however, go so far as to rule that light duty policies for work-related conditions are,andnbsp;per se, unlawful.

While this case involved unique facts (i.e. the employee argued she could perform the essential functions of her job and employee alleged her supervisors made pregnancy related statements), employers should tread carefully when implementing light duty policies for work-related injuries only. As this case demonstrates, the potential for liability under the PDA and Americans with Disabilities Amendments Act (ADAAA) is great.

Sub. House Bill (H.B.) 289, passed by the Ohio House and now pending before the Senate, if enacted, will significantly change the statutory provisions for Joint Economic Development Zones (JEDZ or Zone) and would ultimately prohibit, as of January 1, 2015, the creation of new JEDZs, the renewal of existing JEDZs, and the substantial amendment of existing JEDZ contracts. H.B. 289 also places new, substantial requirements on JEDZs created or amended between the Bill’s effective date and December 31, 2014. Note, however, that this Bill will not impact Joint Economic Development Districts (JEDDs).

A JEDZ can be created through two statutory methods. The first method is the “municipal-only” method under Ohio Revised Code Section 715.69. The other method, deemed the “alternative method” and created under R.C. 715.691, allows municipalities and townships to create a JEDZ and levy an income tax in the Zone if one contracting party does not levy a municipal income tax. H.B. 289 is generally applicable to both methods of JEDZ creation, although there are a few distinctions discussed below.

Provisions Applicable After January 1, 2015

  • H.B. 289 terminates the authority of municipalities and townships to create new JEDZs or renew existing JEDZs after January 1, 2015.
  • The Bill also prohibits the contracting parties from substantially amending an existing JEDZ contract after the same date. The Bill defines a substantial amendment as any change to the JEDZ contract that increases the rate of income tax that may be imposed within the Zone, changes the purpose for which the income tax may be used, adds one or more contracting parties, or changes the area included within the Zone.

Provisions Applicable After the Bill’s Effective Date Through December 31, 2014

H.B. 289 also contains provisions applicable to JEDZs created or amended between the Bill’s effective date and December 31, 2014, which have lasting implications.

  • During this period, any new JEDZ contract created or substantially amended must include an economic development plan for the Zone set forth within the terms of the JEDZ contract, along with a schedule for the implementation of new or expanded services, facilities or improvements in the JEDZ, or surrounding area.
  • A seven-member joint economic development review council must be formed before the JEDZ contract, or substantial amendment thereto, is approved through legislative action of the contracting parties. The council will approve or disapprove the economic development plan, provide recommendations for better implementation of the plan, and evaluate the effectiveness of the JEDZ. If the council disapproves of the economic development plan, the JEDZ cannot be created. The council also prepares annual reports on the JEDZ. The county auditor of the county with the largest portion of the JEDZ territory serves as chairman of the council.
  • For alternative JEDZs under R.C. 715.691, the Bill requires that 50% of the revenue from income taxes imposed by a JEDZ be dedicated to the provision of new, expanded or additional services as specified in the economic development plan.
  • If the joint economic development review council determines in its annual report that the JEDZ contracting parties have not complied with the contract’s economic development plan or schedule for implementation of new, expanded or additional services, facilities or improvements, the Bill permits a private cause of action in common pleas court to terminate the municipal-only JEDZ or phase-out of the alternative JEDZ income tax.

On June 12, 2014, the Governor signed into law House Bill (HB) 264 that establishes care for students with diabetes in public schools and chartered nonpublic schools. Specifically, HB 264 requires that schools ensure that all diabetic students receive appropriate diabetes care in accordance with orders signed by their treating physician and with their Section 504 plan (if applicable). Some important aspects of HB 264 are as follows:

  • HB 264 authorizes a school nurse or, in the absence of a school nurse, a school employee trained in diabetes care as prescribed by HB 264, to administer diabetes medication.
  • HB 264 mandates that students with diabetes be allowed to attend their neighborhood schools (e.g., the school the child would attend if he/she did not have diabetes).
  • HB 264 requires schools to provide an information sheet to parents advising them that their child may be eligible for a Section 504 Plan no later than 14 days after receiving an order signed by a student’s physician regarding the student’s diagnosis. The Ohio Department of Education (ODE) is required to develop a Section 504 plan information sheet for schools to use. ODE is also required to adopt nationally recognized training guidelines for the training of school employees in caring for diabetic students.
  • HB 264 also mandates that training for employees regarding diabetes take place prior to the beginning of the school year or, as needed, within 14 days of the enrollment of a student with diabetes or within 14 days of being notified by a parent that a student has been diagnosed with diabetes. The training must be coordinated by the school nurse (or a licensed health care professional with expertise in diabetes).andnbsp;Not all staff is required to have training in diabetes care, but all school buildings that have a student(s) with diabetes must have a staff member who is trained.andnbsp;Accordingly, HB 264 allows school building principals to solicit volunteers by providing notices to employees stating: that the school is required to provide diabetes care to students with diabetes and is seeking employees who are willing to be trained to provide that care; a description of the task to be performed; that participation is voluntary and that the school can not take action against an employee who does not agree to provide care; that training will be provided by a licensed health care professional; that trained employees are immune from liability; and the name of the individual to contact if an employee is interested.
  • Schools are also authorized to provide to bus drivers responsible for the transportation of a diabetic student, and to all school employees who have primary responsibility for supervising a diabetic student, training in the recognition of hypoglycemia and hyperglycemia and actions to be taken in response to emergency situations.andnbsp;This training is separate and apart from the non-emergency training mentioned above.
  • HB 264 also allows students to provide their own diabetes care during regular school hours and at school-sponsored activities.andnbsp;Schools can not limit the areas in which such care can be administered; thus, a student can use any area of the school, including classrooms or private areas.
  • HB 264 requires that schools report to the ODE, no later than December 31, the number of students with diabetes enrolled in the school and the number of errors associated with the administration of diabetes medication during the previous school year.

Next Steps

Moving forward to the 2014-15 school year, school districts should:

  • Review (and revise if necessary) current medication administration policies to comport with the requirements of HB 264.
  • Solicit volunteers to be trained in diabetes care for each school building where diabetic students are in attendance and schedule training for them.
  • Review student building assignments to ensure that all students with diabetes are attending their neighborhood schools. If students are not attending their neighborhood schools and have been assigned to other buildings due to the availability of diabetes care, schools should contact parents to discuss whether they prefer to have the student continue in his/her current building or to return to his/her neighborhood school.andnbsp;All decisions regarding this issue should be documented in writing.
  • Stand ready to provide notices to parents/guardians of diabetic students regarding their rights under Section 504, and be ready to develop such plans as are necessary.

On June 25, 2014, the United States Supreme Court, inandnbsp;Riley v. California, issued a decision holding that, except under “exigent circumstances,” law enforcement officers may not search digital information on cell phones seized incident to arrest without a search warrant. Digital information includes, but is not limited to, photographs, call logs, email and text communications, contacts, and calendars.

“Exigent circumstances” which would allow warrantless searches include the need to prevent the imminent destruction of evidence in individual cases, to pursue a fleeing suspect, and to assist persons who are seriously injured or are threatened with imminent injury.

The Court’s decision noted that if law enforcement officers seize a cell phone in an unlocked state, the officer may disable the cell phone’s automatic-lock feature in order to prevent the cell phone from locking and encrypting data, under the principle which allows the officer to take reasonable steps to secure a scene to preserve evidence while awaiting a warrant.

The Court’s ruling does not impact a law enforcement officer’s ability to search the physical aspects of a cell phone to ensure it cannot be used as, and does not contain, a weapon.

U.S. Supreme Court May Clarify Employer’s Obligations to Accommodateandnbsp;

Pregnant Workers

On July 1, 2014, the U.S. Supreme Court agreed to review a former United Parcel Service, Inc. employee’s lawsuit alleging pregnancy discrimination and address her employer’s obligations to accommodate her. This case will give the U.S. Supreme Court a chance to clarify what obligations employers have, if any, to accommodate pregnant workers.

The Court agreed to review a decision by the Fourth Circuit Court of Appeals, in January 2013, which held that the Pregnancy Discrimination Act (“PDA”) does not require employers to provide pregnant workers with preferential treatment. Specifically, the Court of Appeals held that the PDA does not require employers to provide more favorable treatment to pregnant workers as compared to other “similarly situated” employees. The Court held that UPS did not have to offer the pregnant employee special accommodations so that she could continue working “light duty” during her pregnancy. As a result, the plaintiff was required to take an unpaid leave of absence. This case is somewhat unique because UPS had a policy that allowed light duty for disabled workers and those who sustained work-related injuries. The Plaintiff, however, did not qualify for light duty work under either of those policies.

Any guidance from the U.S. Supreme Court will be helpful in assisting employers on how to manage pregnant employees who have restrictions on their ability to perform their jobs during their pregnancies.

The Court will Address the Equal Employment Opportunity Commission’s Obligations to Conciliate Prior to Bringing a Lawsuit

The U.S. Supreme Court also agreed to consider “whether and to what extent may a court enforce the EEOC’s mandatory duty to conciliate discrimination claims before filing suit?” In this case, Mach Mining LLC requested the the Supreme Court resolve the conflict among the Circuit Courts of Appeals over whether the EEOC’s conciliation efforts may be reviewed by the courts and, if so, to determine the proper standard of review. Title VII, the federal law prohibiting discrimination based on protected status, requires the EEOC to engage in conciliation efforts before filing a lawsuit. Many employers have argued that the EEOC fails to engage in meaningful conciliation, often making a demand and refusing to negotiate or otherwise engage in discussions with respect to the demand.

The EEOC takes the position that its conciliation efforts during the administrative proceedings are not judicially reviewable and are not an affirmative defense available to employers against the agency when a lawsuit is filed. Employers generally take the position that the EEOC’s conciliation efforts are reviewable by the courts.

Both the EEOC and the employers are supportive of the U.S. Supreme Court’s consideration of this case, because both believe guidance on this issue is necessary.

If you have any questions regarding the issues addressed in this Client Alert, please contact a member of Walter | Haverfield’s Labor and Employment Services group.

Sub. House Bill (H.B.) 289 was enacted into law on June 5, 2014, and became immediately effective. The new law, which had been amended several times in Bill form, prohibits the formation of new alternative Joint Economic Development Zones (JEDZs) after January 1, 2015, and creates Municipal Utility Districts (MUDs) in place of “municipal-only” JEDZs. Existing “municipal-only” JEDZs are now known as MUDs. Note, however, that the new law does not impact Joint Economic Development Districts (JEDDs).

Under prior law, a JEDZ could be created through two statutory methods. The first method was the “municipal-only” method under Ohio Revised Code Section 715.69. The second method, under R.C. 715.691, deemed the “alternative method”, allowed both municipalities and townships to create a JEDZ and levy an income tax in the Zone.

The new law repeals R.C. 715.69, and the provisions for “municipal-only” JEDZs are essentially moved to a new R.C. 715.84, where these zones are labeled as Municipal Utility Districts. The law expressly provides that JEDZs created under R.C. 715.69 are to be now known as MUDs without any further action of the contracting parties.

Also, under the new law, the provisions for “alternative method” JEDZs are significantly amended. After January 1, 2015, municipalities and townships will not be able to create a new JEDZ, renew an existing JEDZ, or substantially amend an existing JEDZ. “Substantial amendment” is defined as any change to the JEDZ contract that increases the rate of income tax that may be imposed within the Zone, changes the purpose for which the income tax may be used, adds one or more contracting parties, or changes the area included within the Zone.

Between June 5, 2014 and December 31, 2014, any JEDZ created or amended must include an economic development plan for the Zone within the terms of the JEDZ contract, along with a schedule for the implementation of new or expanded services, facilities or improvements in the JEDZ or surrounding area. A seven-member joint economic development review council must be formed and give its approval before the JEDZ contract, or substantial amendment thereto, is approved by the contracting parties. The review council includes the county auditor, as chairman, as well as four business owner members from within the Zone. The law requires that 50% of the revenue from income taxes imposed by an alternative JEDZ be dedicated to the provision of new, expanded or additional services as specified in the economic development plan.

The Mid-Biennium Review bill was recently passed and presents changes to current laws related to public education. Among the numerous modifications implemented, major revisions include adjustments to teacher evaluations and new graduation requirements for the replacement of the Ohio Graduation Tests. These revisions will take effect as early as this fall, for the 2014-2015 school year.

Modified Standards for Teacher Evaluations and New Alternative Evaluation Structure

  • On June 12, 2014, HB 362 was signed into law and permits flexibility in the Ohio Teacher Evaluation System (OTES). The frequency of evaluations may now be reduced for any teacher who receives a rating of “accomplished” or “skilled” on their most recent evaluation. Teachers who receive a rating of “accomplished” may be evaluated once every 3 years, while teachers who receive a rating of “skilled” may be evaluated once every 2 years, as long as the teacher’s academic growth measure for the most recent year is average or higher. A credentialed evaluator must still conduct at least one observation and hold one conference with teachers in any year in which they have not been formally evaluated as a result of receiving a rating of “skilled” or “accomplished.” A school board may also elect not to evaluate teachers who were on leave for more than half of the school year or who have submitted notice of retirement.
  • Districts will now be able to choose between a new alternative teacher evaluation structure and the original structure. Under the new structure, teacher performance measures and student academic growth measures may account for 42.5 percent of each rating, while the remaining 15 percent may be attributed to student surveys, teacher self-evaluations, peer review evaluations or student portfolios.

College and Work-Ready Assessment System and New Graduation Requirements

Under HB 487, which was signed into law on June 16, 2014, the College and Work-Ready Assessment System will replace the Ohio Graduation Tests (OGTs), beginning with the 2014-2015 school year, for students who enter ninth grade for the first time on or after July 1, 2014. With the elimination of the OGTs, three new paths, together with the unchanged curriculum requirements, have been implemented in order for students to receive a high school diploma.andnbsp;
Students must satisfy one of the following paths:

  • Path 1: Students must take seven end-of-course exams (English Language Arts I and II, Physical Science, Algebra I, Geometry, American History and American Government). The student must attain a minimum cumulative performance score (set by the State Board) on these examinations. (Note: Students enrolled in an Advanced Placement, International Baccalaureate, or Advanced Standing Program must take the exams aligned to those courses in lieu of the Physical Science, American History, and American Government end-of-course exams. The State Board may also decide to include an Algebra II end-of-course exam in place of Algebra I, beginning with students entering ninth grade on or after July 1, 2016.)
  • Path 2: Students must earn a “remediation-free” score on a national college admission exam. All students will have the opportunity to take the exam their junior year. The district will be responsible for covering costs of administering the exam and the State will reimburse the district.
  • Path 3: Students must obtain either an industry-recognized credential or state-issued license for practice in a specific vocation while attaining a passing score (set by the State Board) on a nationally recognized job skills assessment.

Other Key Reforms to Current Policies

  • Third Grade Reading Guarantee: School districts that cannot furnish the number of teachers needed for the 2014-2015 or 2015-2016 school year, who satisfy one or more of the criteria to teach a third-grader who reads below grade level, are now permitted to submit an alternative staffing plan for that school year.
  • Opt-Out Curriculum Requirements: The terminal date of an exemption from the curriculum requirements for graduation is extended to July 1, 2016. Beginning with students who enter ninth grade for the first time on or after July 1, 2014, new curriculum requirements for exemption have been established. Students are required to complete 4 units of math, one of which must be probability and statistics, computer programming, applied mathematics, quantitative reasoning or any other course approved by the Department, using standards established by the Superintendent. Students must complete 5 elective units and 3 science units, which must include an inquiry-based lab experience engaging students in asking scientific questions and gathering and analyzing information. (Note: School districts must provide annual notification to the Department regarding the number of students who choose to qualify for graduation under the exemption.)
  • Extending Access to Career-Technical Education: School districts are now required to provide career-technical education to students in grades 7-12. (Note: A school district is permitted to obtain a waiver from the requirement to provide career-technical education to students in grades 7 and 8 if specified criteria are met.)
  • Parental Review Committees: School boards must now establish a parental advisory committee, or another method of review, to provide parents with the opportunity to review textbooks, reading lists, instructional materials, and academic curriculum used by the schools in the district.
  • Dropout Prevention: Beginning in the 2015-2016 school year, school districts are required to identify students at risk of dropping out of school and must develop a student success plan with the assistance of the student’s parent, guardian or custodian.
  • College Credit Plus Program (CCP): At the outset of the 2015-2016 school year, the CCP (formally called the Post-Secondary Enrollment Options Program) will govern arrangements in which a high school student enrolls in a college and, upon successful completion of coursework taken under the program, receives credit from the college. This program requires public high schools to develop, in consultation with a public partnering college, a 15-credit hour and a 30-credit hour model course pathway which must be published among the school’s official list of course offerings for the program. Public high schools will be required to provide information and counseling services, beginning in the sixth grade, to students and their parents before a student’s participation in the program is permitted. Public high schools must also implement a policy for awarding grades and ensure that the policy is equivalent to the schools’ policy for Advanced Placement, International Baccalaureate, and honors courses.
  • Released Time to Attend Religious Instruction: School boards are now permitted to adopt a policy authorizing students to attend released time courses in religious instruction, conducted by a private entity off school property, if specified criteria are met.

Next Steps

Entering the 2014-2015 school year, school districts should prepare for these changes by taking the following steps:

  • Review and revamp the OTES policy if the school district wishes to implement the new performance measure scale and change evaluation procedures for “accomplished” and “skilled” teachers.
  • Prepare to implement the College and Work-Ready Assessment System.
  • Prepare to submit an alternative teacher staffing plan if unable to furnish a sufficient number of third grade educators in accord with the Third Grade Reading Guarantee.
  • Be prepared for students to opt-out of curriculum requirements for graduation under new standards.
  • Prepare to offer students in grades 7-12 a career-technical education.
  • Create a parental advisory committee (or another method of review) for reviewing textbooks and academic curriculum within the school district.
  • Locate students at risk of dropping out of school and prepare to implement a student success plan.
  • Prepare for the replacement of the Post-Secondary Enrollment Options Program (PESO) with the College Credit Plus Program (CCP).
  • Determine whether policy will be adopted to authorize students to attend courses in religious instruction off school property.

If your school district has further questions about the recent Ohio legislation, please contact a member of Walter | Haverfield’s Education Services Group.

Byandnbsp;Stephen L. Byron,andnbsp;Aimee W. Lane,andnbsp;and Kalynne Proctor, Law Clerk

On July 1, 2014, the U.S. Supreme Court agreed to review First Amendment challenges brought by Good News Community Church, alleging that a sign ordinance in the town of Gilbert, Arizona violates the right to free speech. Members of the church displayed 17 signs in the area surrounding its place of worship, announcing the time and location of its services and inviting the community to attend. Following the placement of these signs, the church was informed by the town that it was in violation of the sign ordinance. The ordinance allows only 4 such signs, classified as Temporary Directional Signs, to be placed on the church’s property for up to 12 hours on the day services are held. The ordinance further restricted such signs by limiting their size and placement throughout the town.

The town imposes less restrictive regulations on other types of signs. Specifically, political signs can be larger in size, displayed for months on end, and are not limited in number. Ideological signs can be even larger in size, with no limitation on location or number of signs displayed, nor any limitations on how long the signs can be displayed.

The procedural history of this case is lengthy and complex. In a prior decision, the Court of Appeals concluded that the sign restrictions, including the distinctions among them, were content-neutral. Accepting this former decision as law of the case, the Court of Appeals ultimately held that the town’s different treatment of types of noncommercial temporary signs based on size, duration, and location is constitutional; the regulations are not content-based, and the restrictions are tailored to serve significant governmental interests, thus satisfying First Amendment requirements for content-neutral restrictions on speech.

The U.S. Supreme Court’s decision in this case could help clarify distinctions between “content-based” and “content-neutral” ordinances, an important factor under First Amendment analysis, and therefore may have a direct and significant impact on local governments nationwide. We will update you on any new development in this case that might impact your community.

If you have any questions regarding the issues addressed in this Client Alert, please contact a member of Walter | Haverfield’sandnbsp;Public Law Services group.

Now, ten years after Ohio legislature mandated the creation of the Educator Standards Board (ESB) and five years after it was charged with recommending a model evaluation system for teachers and principals, the Ohio Teacher Evaluation System (OTES) is in full swing. Ohio educators have exited the first school year of full implementation of OTES and the first year where ratings must inform personnel decisions is about to begin.

Getting to this stage has taken longer than some may have expected; however, in 2011teacher evaluation requirements were defined through House Bill 153 and school districts were required to revise their evaluation system to align with the State Board-approved OTES framework by July 2013.

Although OTES is a new system, the General Assembly continues to make significant modifications. It is important to understand the system’s initial requirements before delving into recent changes. The 2011 evaluation requirements included:

  • Evaluations annually for teachers holding a teaching license and providing student instruction at least 50% of time employed (exception for accomplished teachers: every two years if adopted by the district board of education);
  • Evaluations to be used in district policies and procedures for teacher retention, promotion, removal, and reduction in force;
  • Alignment with standards for teachers, resulting in ratings: accomplished, proficient, developing, or ineffective;
  • Multiple evaluation factors (50% teacher performance; 50% student academic growth measures);
  • At least two formal observations of 30+ minutes and classroom walkthroughs;
  • Each teacher to be provided a written report of his/her evaluation results; and
  • Provisions for professional development and allocation of financial resources for professional development.

Changes were made via House Bill 555, which became effective as of March 2013. House Bill 555 further defined Student Growth Measures. It also phased in the use of value-added progress, which is a statistical method that compares student achievement data from one year to the next. Value added progress is used to estimate the academic growth of students and assess the impact of the instruction. As of July 2014, for teachers who instruct only subjects with value-added data available, that data will account for the teacher’s entire student growth component. For teachers who teach only some subjects where value-added data is available, this data will be used proportionately to the teacher’ overall schedule.

OTES was modified again in June 2014 with Ohio’s Mid-Biennium Review–specifically House Bill 362. These revisions provide districts with some flexibility in evaluation regularity and offer an alternate student growth framework option. While an observation and conference must still be completed each year by an evaluator, the frequency of full evaluation is extended for a teacher rated accomplished (every three years) or skilled (every two years).

Districts may choose this frequency as long as the teacher’s student academic growth measure for the most recent year is average or above. A district may also opt to not evaluate a teacher who was on leave for at least 50% of the year or whom has submitted notice of retirement by December 1. If a district would rather not use the 50/50 framework (50% teacher performance and 50% student growth measure), it may choose to use the following alternate framework for teacher evaluation:

2013-2014 school year

Starting 2014-2015 school year

42.5% teacher performance measure

42.5% to 50% teacher performance measure

42.5% student academic growth measure

42.5% to 50% student academic growth measure [% equal to teacher performance]

15% from one of these components: student surveys, teacher self-evaluations, peer review evaluations, or student portfolios

Remainder from one of these components: student surveys, teacher self-evaluations, peer review evaluations, or student portfolios

** if using this framework the new choice component must be one from the ODE-approved instruments list


Areas for School Districts to be Mindful

As implementation of OTES continues, districts should monitor any new modifications from the Ohio Department of Education and keep in mind potential legal concerns, such as:

  1. Are your evaluators’ other responsibilities still being met while managing evaluation time demands? If not, how can you plan to continue to meet all responsibilities or reallocate where necessary?
  2. Are you using linkage of Value-Added data appropriately for the student growth measure? Remember, this may be more complicated for some, such as intervention specialists.
  3. Does your collective bargaining agreement include appropriate provisions for OTES? OTES provisions will prevail over any conflicting provisions entered into after September 29, 2011.
  4. The recent Mid-Biennium Review provided that some consequences from teacher evaluations will be delayed a year because new assessments will be administered during the 2014-2015 school year.
  5. Continue to sort through any staff confusion or misunderstandings as well as provide appropriate professional development for teachers and evaluators.

Everywhere you look lately, LGBT rights are making headlines. States as diverse as Wisconsin, Texas, Kentucky, Arizona and Kansas have been in the news for their legislative attempts to either increase or limit the rights of LGBT citizens.andnbsp;

At a national level, there have been some major changes regarding LGBT rights. Earlier this year, the U.S. government expanded the rights of same-sex spouses in the federal context, and last year a U.S. Supreme Court ruling struck down the 1996 Defense of Marriage Act (DOMA), which had blocked federal recognition of gay marriages. Regarding health insurance benefits, the U.S. Department of Health and Human Services announced on March 14, 2014, that, under the Affordable Care Act, insurance companies which offer benefits to opposite sex spouses must offer such benefits to same-sex spouses by Jan. 1, 2015.andnbsp;

In December 2013, a federal judge in Ohio ordered authorities to recognize gay marriages on death certificates, despite Ohio’s ban against same-sex marriages. In April 2014, another federal judge ruled that Ohio must recognize same-sex marriages performed in other states. Further, state lawmakers in Ohio recently withdrew legislation mimicking a controversial Arizona bill proposing to allow those who assert religious beliefs to refuse service to LGBT community members.andnbsp;

Despite this changing landscape, little has changed, to date, in federal or Ohio employment discrimination laws as it relates to LGBT employees in the private sector, as well as many parts of the public sector. There are signs, however, that this is changing.andnbsp;For instance, an employer with an Equal Employment Opportunity (EEO) statement or policy may consider including a statement prohibiting discrimination based upon sexual orientation or gender identity. Likewise for policies such as sexual harassment, workplace violence and anti-discrimination; andandnbsp;training employees, supervisors and subordinates alike (but in different training sessions) on the revised policies.andnbsp;

The federal government already prohibits employment discrimination against federal government employees based on sexual orientation only. In addition, President Barack Obama recently signed an executive order that prohibits job discrimination by federal contractors on the basis of sexual orientation and gender identity. And Congress has revived its attempt to pass the Employee Non-Discrimination Act, or ENDA, which would protect all employees (private and public sector) from job discrimination based on sexual orientation.andnbsp;

In Ohio, an executive order signed by Gov. John Kasich establishes an anti-discrimination policy in state government employment only. This order prohibits discrimination in the workplace on the basis of sexual orientation, but it does not include language prohibiting discrimination on the basis of gender identity.andnbsp;

In addition, at a municipal level, there are a dozen municipalities (including many of Ohio’s larger cities) that prohibit job discrimination based on sexual orientation and/or general identity in both private and public employment. These include the cities of Athens, Bowling Green, Canton, Cincinnati, Cleveland, Columbus, Coshocton, Dayton, Newark, Oxford and Toledo, as well as the Village of Yellow Springs.

There are five Ohio municipalities that prohibit discrimination based on sexual orientation and/or gender identity in public employment only: Akron, Cleveland Heights, Gahanna, Hamilton and Oberlin.

Legislative change definitely is coming. Regardless of when it comes, Ohio employers may want to start instituting changes in their company policies regarding LGBT employees.

Ways employers can address LGBT rights include:

learning what laws do currently apply. Employers should consult legal counsel to find out what laws apply;

Should you decide to get out in front of this issue and enact policies that exceed what is currently required by law, keep in mind that, by enacting these policies, you provide your employees with enforceable rights. Thus, be certain you are enacting reasonable policies and provide the proper training to managers and supervisors on the implementation and enforcement of the policies. And, as always, consult with legal counsel prior to making any formal changes.

Many Ohio employers have determined that discrimination of any kind can detract from employee morale, recruitment and retention, and, ultimately, productivity. As employers have discovered over time, the best business and employment decisions are based on objective metrics and operational needs.

Clients frequently seek legal advice when they are considering the start-up of a new venture or investing in an existing business. Challenging aspects of these deals include the tax issues that arise by virtue of different investors contributing different mixes of resources to the venture.

Consider that some clients are the idea people who hold a patent or copyright or perhaps just have an idea in the conceptual stage. Others will provide tangible capital needed for the new business in the form of cash, real estate, equipment, etc. Others may contribute knowledge or other assets, such as a customer base, industry know-how and experience, a great “Rolodex” of contacts, or even an existing business with goodwill value. Then there are the service providers–those who contribute no property or capital but who will bring the “sweat equity” needed to convert tangible and intangible property into profits.

All of these clients could incur tax burdens differently, depending somewhat on the form of entity being created in order to conduct the venture. Selections include different types of corporations, limited liability companies, limited partnerships, or perhaps no entity at all in certain situations. In planning the formation of the entity, each participant must be careful not to trigger immediate income tax liabilities when contributing the property or services.

Federal tax law contains many intricate and detailed provisions governing the tax treatment of receiving an ownership interest in a new venture. The rules differ somewhat depending on whether the venture is in the form of a corporation or an entity taxed as a partnership (which includes limited liability companies). However, certain general principles apply to both.

For example, if an investor is awarded an ownership interest by contributing only services to the venture (whether the services were already performed or are to be performed in the future), that person will probably have to include the value of the ownership interest in taxable income. This is rarely a desired result. This treatment differs dramatically from that of a person who contributes property to the venture, whether that property is tangible (real estate, equipment, cash) or intangible (intellectual property, patents, copyrights). Generally a contribution of property to a new venture, in exchange for an ownership interest, is a non-taxable event.

There are, of course, exceptions to these general rules, including a couple of common techniques for the “service partner” to avoid suffering immediate taxation on the receipt of the ownership interest. One way is to subject the ownership interest to a “substantial risk of forfeiture.” For example, the shareholder or partner in the venture may have to wait for a period of years until free control of the interest is granted. The ownership interest might be contingent on continued employment or the venture achieving certain profitability goals. If the contingencies are not met, the ownership interest might be subject to partial or total forfeiture. Until that restriction is lifted, the holder of the interest is not taxed on the value of the interest.

Another method to avoid immediate taxation applies to members of LLCs and partners of partnerships. The owner could receive a “profits interest” in the venture, rather than a full ownership interest. Immediate income taxation is avoided when receiving a profits-only interest. However, there is a trade-off in that the holder of the profits interest will not fully participate in distributions upon a capital event such as the complete sale of the business or liquidation of the venture.

Even further complications must be addressed when a restricted ownership interest is granted to a participant in the joint venture that is taxed as a flow-through entity (such as an S corporation or a partnership). During the restriction period, there is an issue of who is allocated income on the IRS Form K-1 from the venture. A recent U.S. Tax Court case addressed this issue where an individual executive received a 2% interest in a joint venture, conditioned on continued employment in the venture. The tax advisors of the venture prepared the partnership tax return for the first two years and issued a Form K-1 to the executive, causing him to pay personal income tax on 2% of the profits of the venture. He later contested this result, arguing that as a restricted owner he should not be allocated any profits during that period. The Tax Court agreed with the executive and concluded that, under federal tax law, he was not to be treated as a partner of the partnership for income tax purposes during the period when he could forfeit the ownership interest.

This discussion touches the surface of the types of tax issues that participants will face in the formation stage of a joint venture. There are more in-depth issues that will need analysis to ensure that each participant does not receive an unpleasant surprise when it comes time to report the tax results of the business ownership.

When a union begins to “organize” employees in your workplace, it must first determine which employees it wants in the “bargaining unit”: Production? Maintenance? Sales? Clerical? Shipping? Receiving? Some of the above? All of the above? However, whether or not the bargaining unit the union chooses is “appropriate” ultimately will be determined by the National Labor Relations Board (“NLRB” ).

Historically, the NLRB’s primary concern has been whether or not the employees chosen have substantial mutual interests in wages, hours, supervision and other terms and conditions of employment, known as a community of interest. Thus, in most industries unions have organized using a facility-wide (location specific) model. For example, at a delivery company all couriers on all shifts almost certainly would be in the same unit. Indeed, neither a union nor an employer would have had much chance of prevailing were it to argue that the couriers who handle airfreight packages should be in a separate unit from the couriers who handle ground packages or that each shift should be in a separate bargaining unit.

The underlying policy reason for nonproliferation of bargaining units is that to do otherwise would not make for good labor relations. For example, each separate bargaining unit could have its own contract with different work rules and benefits, its own expiration date, and be organized by any labor union in the land. However, the current activist NLRB has decided that such an arrangement would be a good thing and, in doing so, has demonstrated its pro-union bias yet again. In addition to the chaos mentioned above, organizing a larger group is more difficult for the union than organizing a smaller group. Using the courier company example again, meeting with and persuading 12 couriers, all of whom work the night shift, is less time-consuming than meeting with and persuading 70 couriers that work all three shifts.

The first NLRB decision that approved a “micro” unit was Specialty Healthcare. In that case, the nursing home and rehabilitation center had various employee groups, including nurses, nurse assistants, cafeteria workers, maintenance workers, housekeeping, laundry and social services/rehabilitation staff. Normally, an appropriate unit would have consisted of all of the above except the registered nurses, because professionals are treated differently. But the NLRB approved a micro unit of solely nursing assistants, creating the potential for the other small employee groups to organize separately.

Historically, healthcare cases such as Specialty Healthcare have been used to provide guidance only for other healthcare cases, so there was some sense that this doctrine would not spread beyond healthcare. But that proved not to be the case as just last month a “micro” unit was approved for a cosmetic and fragrance department in a retail store in Macy’s, Inc.

In that case the NLRB approved a micro unit consisting of only the cosmetic and fragrance department employees at the Macy’s store. Macy’s argued to no avail for a unit that included all sales floor personnel. The NLRB held that because the cosmetic department employees did not also work in other departments and their pay structure was substantially different from all other store employees, they alone constituted an appropriate unit. It is certainly possible under the logic of the Macy’s decision that it would be just as easy for the shoe salespersons just across the aisle from cosmetics, the jewelry department workers across the other aisle from fragrances, and any other micro unit in the store to be granted “unique” status with the department store. That means any one of these “micro” units can be separately organized as discussed above, and that anyone could strike and shut down the entire store. Is that good labor policy? Only for a Labor Board that is in thrall to organized labor.

But there is some good news. Only a week after the Macy’s decision, the NLRB dismissed a petition and, in doing so, outlined some useful restrictions that may limit the growth of “micro” units. The dismissal decision involved a petitioned-for unit of women’s shoes employees from the store’s Salon shoes and Contemporary shoes departments. Unlike in Macy’s, the union could not establish a community of interest specific to that group because the employer had not established a clear departmental differentiation as it had in Macy’s. The unit petitioned for in Bergdorf Goodman included some employees from a second department, Contemporary Sportswear, but excluded that department’s other sales associates, which the NLRB viewed as a departure from the Employer’s organizational structure.

However, in making the Bergdorf Goodman decision, the NLRB noted that it would likely have approved the unit had the following factors been present:

  • the petitioned-for employees shared a common supervisor;
  • there was significant personnel interchange between the two departments;
  • contact among the petitioned-for employees was not limited to storewide meeting attendance and incidental contact in the locker room, cafeteria, etc.; and
  • there were shared skills and training for the employees from the different departments.

Therefore, employers may look to the missing Bergdorf Goodman factors for guidance.

Implications for Employers and Employees

In the wake of these NLRB decisions, employers should be aware of “micro” bargaining units, their own employees’ movement to organize, and the potential impact on the work environment. Because it is now clearly possible for a small group of employees to be deemed a “micro” unit under the right conditions, employers may consider reevaluating their workplace structure, with consideration for:

  • cross-training employees
  • increasing interchange of employees among departments
  • integrating functions across job classifications
  • developing comparable or consistent pay structure and policies across departments
  • centralize supervision
  • limiting/eliminating barriers across departments and employees

Employers can take little solace in the fact that Macy’s is a retail industry case or that the Bergdorf case sought to delineate specific needed criteria. Clearly, an NLRB that could make the leap from healthcare to retail without pause will not hesitate under the right facts to expand this logic to all American industries.

To reach Attorney Englehart, call 216-928-2929 or e-mail

By John W. Waldeck, Jr. and Geoffrey S. Goss

People who frequently pass by the intersection of East 9th Street and Euclid Avenue have likely gotten used to seeing scaffolding on the Schofield Building. Despite tremendous commercial interest in the property, the most recent recession had stalled redevelopment of the historic structure.

Walter | Haverfield’s real estate team was called in on a referral to new client, CRM Companies, Inc., to help the project move forward. The client was specifically interested in leveraging the firm’s wealth of tax credit expertise, since the building had already qualified for federal Historic Tax Credits (HTCs) and was also awarded state HTCs.

Not only were our tax credit and real estate professionals able to render a tax opinion on the project and conduct a Safe Harbor analysis, but we also negotiated the necessary operating agreements and master lease, refining the master tenant structure. On behalf of our client, our team worked with the tax credit investor directly on these documents to bring about the desired investment result.

Construction and redevelopment of the Schofield Building continues to move forward to complement the other redevelopment initiatives occurring at or near that intersection. When completed, the long vacant building will be home to new retail space on the street level, a 122- room Kimpton Hotel and associated restaurant, and 54 market-rate apartments on the higher levels. The $45 million project is scheduled for completion by December 2015. Combined with the other work that the Walter | Haverfield real estate team has handled within that same block of East Ninth Street, over a two-year period the total investment within a one-block radius is estimated at more than $300 million.

Equally important as the dollar-value investment is the impact on the overall downtown revitalization effort. This marks the entrance of the Kimpton brand into the Cleveland market and the addition of more desperately needed hotel rooms to the central business district. The residential rental units will serve the still growing demand for downtown housing, as occupancy rates continue to run close to capacity. And finally, from the perspective of the many passersby, the Schofield Building’s beautiful facade which had been covered up for years, will be restored, creating an attractive landmark at one of downtown’s busiest intersections.

Read more about downtown Cleveland development.

To contact Attorney Waldeck, call 216-928-2914 or e-mail; to contact Attorney Goss, call 216-928-2973 or e-mail

Byandnbsp;Leslie G. Wolfe and John A. Heer

Wetlands are a major issue for almost anyone who owns commercial or industrial property – now more than ever thanks to the EPA’s new overly broad definition of what constitutes protected wetlands. A case in point involves a Walter | Haverfield client who owns a small piece of commercial property.

Several months before contacting us, the client had cleared and paved an area to provide more space for a tenant to park trucks on an adjacent parcel. At the time of the work, the client was unaware that there might be wetlands on the property.

Based on information supplied by an anonymous neighbor, the U.S. Army Corps of Engineers issued a violation notice to the client, alleging that material had been placed in the area illegally because it was on regulated wetlands without receiving prior authorization – a violation of federal law. The Corps’ letter presented two options for the client to remedy the violation. Under the first option, the client could remove the fill material, restore the area to pre-disturbance elevations and grades, and re-seed and mulch the disturbed area with an approved wetland seed mix. Alternatively, the client could apply for after-the-fact authorization for the prior filling.

Because the Corps took the position that half of the filled area contained broken asphalt, if the client chose to apply for after-the-fact authorization, it would be required to remove the broken asphalt and submit additional information for the permit, including a wetland delineation, drawings of the proposed project showing the areas to be filled from a top and side view, and a proposal for mitigation to offset wetland impacts.

The client’s objective was to take the path of least resistance and lowest cost to ensure the marketability of the property. Although the client originally sought to obtain a permit for the work that was already done, our environmental legal team advised that the more cost-effective and efficient response would be to remove the fill and restore the property.

Our attorneys worked with the client to reach an agreement with the Corps that the fill would be removed from the wetland areas. The Corps agreed to issue written approval for the proposed restoration plan. Under the plan, the client agreed to re-grade areas to their original depth; seed the area with an approved wetland seed mix; and dispose of the asphalt. About a week after the removal and restoration work was completed, the Corps issued its Acceptance of Restoration letter, confirming that the violation had been resolved.

Just a few of the lessons which can be learned from this case include:

  1. When performing any filling or earth moving, carefully consider the areas being filled or changed. The definitions of wetlands and other terms relevant for environmental regulation are very broad and might encompass areas which you might not think are regulated.
  2. If you are contacted by a regulating authority, especially based upon a citizen’s complaint, consider engaging legal counsel as soon as possible.

To reach Attorney Wolfe, call 216-928-2927 or e-mail

When a union begins to “organize” employees in your workplace, it must first determine which employees it wants in the “bargaining unit”: Production? Maintenance? Sales? Clerical? Shipping? Receiving? Some of the above? All of the above? However, whether or not the bargaining unit the union chooses is “appropriate” ultimately will be determined by the National Labor Relations Board (“NLRB” ).

Historically, the NLRB’s primary concern has been whether or not the employees chosen have substantial mutual interests in wages, hours, supervision and other terms and conditions of employment, known as a community of interest. Thus, in most industries unions have organized using a facility-wide (location specific) model. For example, at a delivery company all couriers on all shifts almost certainly would be in the same unit. Indeed, neither a union nor an employer would have had much chance of prevailing were it to argue that the couriers who handle airfreight packages should be in a separate unit from the couriers who handle ground packages or that each shift should be in a separate bargaining unit.

The underlying policy reason for nonproliferation of bargaining units is that to do otherwise would not make for good labor relations. For example, each separate bargaining unit could have its own contract with different work rules and benefits, its own expiration date, and be organized by any labor union in the land. However, the current activist NLRB has decided that such an arrangement would be a good thing and, in doing so, has demonstrated its pro-union bias yet again. In addition to the chaos mentioned above, organizing a larger group is more difficult for the union than organizing a smaller group. Using the courier company example again, meeting with and persuading 12 couriers, all of whom work the night shift, is less time-consuming than meeting with and persuading 70 couriers that work all three shifts.

The first NLRB decision that approved a “micro” unit was Specialty Healthcare. In that case, the nursing home and rehabilitation center had various employee groups, including nurses, nurse assistants, cafeteria workers, maintenance workers, housekeeping, laundry and social services/rehabilitation staff. Normally, an appropriate unit would have consisted of all of the above except the registered nurses, because professionals are treated differently. But the NLRB approved a micro unit of solely nursing assistants, creating the potential for the other small employee groups to organize separately.

Historically, healthcare cases such as Specialty Healthcare have been used to provide guidance only for other healthcare cases, so there was some sense that this doctrine would not spread beyond healthcare. But that proved not to be the case as just last month a “micro” unit was approved for a cosmetic and fragrance department in a retail store in Macy’s, Inc.

In that case the NLRB approved a micro unit consisting of only the cosmetic and fragrance department employees at the Macy’s store. Macy’s argued to no avail for a unit that included all sales floor personnel. The NLRB held that because the cosmetic department employees did not also work in other departments and their pay structure was substantially different from all other store employees, they alone constituted an appropriate unit. It is certainly possible under the logic of the Macy’s decision that it would be just as easy for the shoe salespersons just across the aisle from cosmetics, the jewelry department workers across the other aisle from fragrances, and any other micro unit in the store to be granted “unique” status with the department store. That means any one of these “micro” units can be separately organized as discussed above, and that anyone could strike and shut down the entire store. Is that good labor policy? Only for a Labor Board that is in thrall to organized labor.

But there is some good news. Only a week after the Macy’s decision, the NLRB dismissed a petition and, in doing so, outlined some useful restrictions that may limit the growth of “micro” units. The dismissal decision involved a petitioned-for unit of women’s shoes employees from the store’s Salon shoes and Contemporary shoes departments. Unlike in Macy’s, the union could not establish a community of interest specific to that group because the employer had not established a clear departmental differentiation as it had in Macy’s. The unit petitioned for in Bergdorf Goodman included some employees from a second department, Contemporary Sportswear, but excluded that department’s other sales associates, which the NLRB viewed as a departure from the Employer’s organizational structure.

However, in making the Bergdorf Goodman decision, the NLRB noted that it would likely have approved the unit had the following factors been present:

  • the petitioned-for employees shared a common supervisor;
  • there was significant personnel interchange between the two departments;
  • contact among the petitioned-for employees was not limited to storewide meeting attendance and incidental contact in the locker room, cafeteria, etc.; and
  • there were shared skills and training for the employees from the different departments.

Therefore, employers may look to the missing Bergdorf Goodman factors for guidance.

Implications for Employers and Employees

In the wake of these NLRB decisions, employers should be aware of “micro” bargaining units, their own employees’ movement to organize, and the potential impact on the work environment. Because it is now clearly possible for a small group of employees to be deemed a “micro” unit under the right conditions, employers may consider reevaluating their workplace structure, with consideration for:

  • cross-training employees
  • increasing interchange of employees among departments
  • integrating functions across job classifications
  • developing comparable or consistent pay structure and policies across departments
  • centralize supervision
  • limiting/eliminating barriers across departments and employees

Employers can take little solace in the fact that Macy’s is a retail industry case or that the Bergdorf case sought to delineate specific needed criteria. Clearly, an NLRB that could make the leap from healthcare to retail without pause will not hesitate under the right facts to expand this logic to all American industries.

Ever since Ohio’s Constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and has adjusted the Ohio minimum wage for 2015.

Effective January 1, 2015, Ohio’s minimum wage will increase $0.15 from $7.95 per hour toandnbsp;$8.10 per hourandnbsp;forandnbsp;regular hourly employees. The minimum wage forandnbsp;tipped employeesandnbsp;will increase $0.07 from $3.98 per hour toandnbsp;$4.05 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $297,000 or less per year after January 1, 2015 or to (ii) 14 and 15 year olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. Theandnbsp;federal minimum hourly wageandnbsp;is currentlyandnbsp;$7.25.

The new Poster is available byandnbsp;clicking here.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

Amazon warehouse workers will not be compensated for
time standing in security check lines

Should an employee be compensated for time spent on before- or after-work-related activities such as standing in a security line or waiting to punch in? This has been the subject of intense debate throughout the court system for some time.

However, a unanimous Supreme Court decision issued December 9 affecting workers at two warehouses in Nevada may have put to rest questions regarding what work-related activities are classified as “integral and indispensable” to the job function and, therefore, considered compensable under the Fair Labor Standards Act (FLSA).

In overturning a previous decision by the Court of Appeals for the Ninth Circuit Court of Appeals, the Supreme Court established that “an act is integral and indispensable to the principal activities that an employee is employed to perform – and thus compensable under the FLSA – if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

In the specific case of the Amazon warehouse employees who must stand in line after their shifts to undergo security screening designed to deter employee theft, it was determined that this task was neither a principal activity nor an integral part of their work assignments and, therefore, did not qualify for compensation under the FLSA. In making this decision, the Supreme Court confirmed that such security screenings are not different than many other after-hours tasks that employees must do, such as walking from the parking lot or waiting to punch in for work.

The ruling has been hailed as a major success for business as it may well have set a new standard for employers not having to pay employees for every activity they require them to do. It effectively sets a precedent that may help employers more effectively defend themselves against certain FLSA work-time claims. Employers, however, need to be mindful of state laws that regulate payment for these types of activities.

Had the Supreme Court decided in favor of the employees in this specific case, it could have set in motion numerous claims that would have required back pay for as many 400,00 workers amounting to more than $100 million.

It is interesting to note that the Amazon case was one of the few examples where the Department of Labor (DOL) even argued in favor of the employer.

While the Supreme Court ruling effectively limits the amount of compensable activities before and after working hours, employers should still consult with their legal counsel regarding fact-specific situations as they arise.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

On December 18, 2014, the Ohio Supreme Court issued an opinion overturning the Sixth District Court of Appeals decision which held that the City of Toledo’s administrative appeal process for traffic camera citations violated the exclusive jurisdiction of the municipal courts.

The Ohio Supreme Court specifically held that “Ohio municipalities have home-rule authority to establish administrative proceedings, including administrative hearings, related to civil enforcement of traffic ordinances, and that these administrative proceedings must be exhausted before offenders can pursue judicial remedies.”

The full text of the Slip Opinion inandnbsp;Walker v. Toledoandnbsp;can be foundandnbsp;here.

With more women in the workplace, pregnancy-related issues are an ever-growing reality for most employers. Whether a woman is already pregnant or is actively taking steps to become pregnant, she is protected by numerous federal laws, as well as differing state and local laws – all of which are constantly changing.

In 2014 the Equal Employment Opportunity Commission (EEOC) released new enforcement guidance under the Pregnancy Discrimination Act (PDA) addressing pregnancy discrimination in the workplace. Although these are guidelines only, they carry considerable weight since courts often defer to the EEOC’s interpretation of the law when deciding cases. As a result, it’s important that employers be aware of their new “obligations.”

Among other things, the EEOC guidelines state that employers must offer light duty to pregnant employees if they make light duty available to non-pregnant employees whose ability or inability to work is similar. That means that if employees who have been injured on the job have the right to work light duty, then light-duty work must also be offered to pregnant employees who are unable to perform their jobs for similar reasons. This issue is expected to be decided by the U.S. Supreme Court during the summer but, until then, it may be subject to varying interpretation.

The definition of pregnancy-related disability has also been expanded such that almost any condition related to a pregnancy could be considered a disability. Specific examples include: pelvic inflammation (may substantially limit ability to walk); pregnancy-related carpal tunnel syndrome (may affect ability to lift or perform manual tasks); disorders of the uterus or cervix (may necessitate certain physical restrictions to enable full-term pregnancy); pregnancy-related sciatica (may limit musculoskeletal functions); gestational diabetes (may limit endocrine functions); and preeclampsia (may affect cardiovascular/circulatory functions).

The new guidance further extends protection to employees who are still in the planning stages of becoming pregnant, including those who are undergoing fertility treatments or who have announced plans of becoming pregnant.

Like most things in this world, the EEOC’s guidelines are constantly changing. Savvy employers recognize that it is difficult to stay abreast of the most current guidelines without the added assistance from legal counsel who focus on employment issues. Before creating any new policies or enforcing existing policies that relate to a pregnant or would-be pregnant employee, employers should consult with counsel to ensure they are in line with the most current laws, guidelines and court decisions.

To contact Attorney Weisberg, call 216-928-2928 or e-mail

Progress continues to be made on the East End redevelopment of the former Goodyear Tire and Rubber Co. campus off East Market Street in Akron. In November, Phase I of the redevelopment initiative was completed with the opening of the Hilton Garden Inn, Akron’s first full-service hotel to be built in more than 20 years.

Next on the agenda is the completion of the renovation of Goodyear Hall, which formerly served as the home of the World of Rubber, Goodyear Gift Shop and company exhibit hall. In their place will be more than 120 upscale apartments, along with office and retail space. The expansive theatre that seats more than 1,000 people, as well as the facility’s large gymnasium, will remain largely intact.

None of this work would be possible without the support of a complex financing structure that relied heavily on historic and new market tax credits. Walter | Haverfield real estate attorneys were called upon to negotiate the financing so that favorable terms were reached for all of the investors, as well as the developer. Supplementing their expertise were the firm’s tax attorneys who provided the necessary counsel to ensure that the project qualified for tax credits and that the financing was in line with ever-changing tax guidelines.

Renovation work on the $37 million Goodyear Hall project, which has been described as a major catalyst for the redevelopment of downtown Akron, is expected to be completed in the second quarter. Plans for Phase III are already underway. Walter | Haverfield attorneys, who have been involved with the East End redevelopment since its inception, have already submitted the application for historic tax credits to help fund the massive renovation of the old million-square-foot Goodyear Headquarters.

In total, the revitalization project is valued at more than $200 million.

To reach Attorney Catanzarite, call 216-928-2981 or e-mailandnbsp;

Ohio firearms laws are complicated. A failure to know these laws can turn an encounter with a citizen, or a seemingly innocuous personnel policy, into a lawsuit with the municipality on the losing side.

Yet, with general rules that have exceptions, caveats that change depending upon who is carrying the firearm, a multitude of types of firearms, and differing regulations that apply to various locations where the firearm is being carried, law enforcement personnel and public entities have a lot to know in order to understand the law. We offer the following summation of Ohio firearms law and highlight two recent cases that demonstrate why public entities and law enforcement personnel must develop a sufficient understanding of Ohio’s firearms laws.

An Overview of Ohio Firearms Law

Ohio Revised Code § 9.68 declares that a person may own, possess, purchase, sell, transfer, transport, store or keep a firearm without license, permission, restriction or delay, except as limited by the United States Constitution, the Ohio Constitution, federal laws and state laws.

The law’s broad authorization means that a person’s rights to own, possess, sell, transfer, transport, store or keep a firearm in Ohio may only be limited when a federal or state law specifically imposes a restriction.

The law also provides that if a plaintiff prevails in an action against a political subdivision for a violation of the person’s rights to own, possess, sell, transfer, transport, store or keep a firearm, the political subdivision must pay the attorney fees of the person who challenged the ordinance, rule or regulation. Thus, if you are wrong in your analysis, your error may be very costly.

In Ohio, there is no law that makes it illegal to openly carry a firearm on public property. Thus, “open carry” is generally legal. Ohio law curtails this broad general rule by prohibiting certain persons from possessing firearms. If a person is a convicted felon, a mentally incompetent person, or a person who is under the influence of drugs or alcohol, that person is prohibited from carrying a firearm.

If a person wants to carry a concealed firearm, that person must comply with Ohio’s concealed carry laws. Generally, if the firearm is something other than a handgun, then a person cannot carry it concealed on his or her person. If the firearm is a handgun, however, a person may carry it concealed in compliance with Ohio’s concealed carry laws.

Ohio’s concealed carry laws permit license holders to carry handguns concealed on their person. Yet, even persons with a concealed carry license are prohibited from carrying concealed handguns in certain “forbidden carry zones,” including police stations, courthouses, school safety zones, and any state or local government buildings that are notandnbsp;primarily used as a shelter, restroom, parking facility for motor vehicles, or rest facility.

Ohio also regulates the proper handling of firearms in motor vehicles. Any person may transport or have firearms in a motor vehicle, so long as the firearm is unloaded and carried in a closed box; carried in a compartment that may be reached only by leaving the vehicle; carried in plain sight and secured in a rack made for that purpose; or, for larger firearms, carried in plain sight with the action open and the weapon stripped. Persons with concealed carry licenses may carry handguns on their persons while in their vehicles.

As with any complicated regulatory scheme, the devil is in the details. Public entities, generally, and, specifically, police officers must be careful to ensure that their actions do not infringe upon an individual’s rights or regulate a person’s actions in any manner not expressly permitted by federal or state law.

Case Study: Open Carry and the Fourth Amendment

The case of Northrup v. City of Toledo Police Div., demonstrates how the interplay between Ohio firearms law and the Fourth Amendment to the United States Constitution can lead to conflict between citizens and law enforcement.

In June of 2010, Shawn Northrup was on an evening stroll with his wife, daughter, grandson, and dog. He was lawfully carrying a handgun holstered on his hip in plain view. A concerned citizen saw Northrup openly carrying a handgun and called 9-1-1. Police were dispatched and the officer initiated an investigatory stop to determine whether Northrup had or was engaging in any criminal activity. During this stop, Northrup allegedly made a “furtive movement” towards his gun. The officer responded by handcuffing Northrup and placing him in the back seat of his cruiser. Northrup was cited for failure to disclose personal information. Ultimately, the City dropped the charges.

Northrup responded by suing the City. He alleged that the officer’s investigatory stop violated his Fourth Amendment right to be free from unconstitutional searches and seizures because the officer lacked reasonable suspicion to believe that he had committed a crime – after all, he was not breaking any law by openly carrying a firearm. The City defended the case by claiming that a 9-1-1 call stating that a man was openly carrying a firearm provides an officer with reasonable suspicion that a crime had or might occur and, as such, an investigatory stop was justified.

The Court rejected the City’s argument and issued a decision holding that an officer’s mere hunch that an individual openly carrying a firearm might have committed some crime does not give rise to the reasonable suspicion needed for an officer to conduct a legal investigatory stop without violating the Fourth Amendment.

The City of Toledo Police Division is appealing the Court’s decision to the United States Court of Appeals for the Sixth Circuit.

The tension between a person’s right to lawfully carry a firearm and an officer’s obligation to protect and serve can lead to conflict. Public entities must take steps to ensure that its officers are safe, educated, and well-prepared to address issues that may arise when dealing with persons carrying firearms.

Case Study: Codes of Student Conduct and Personnel Policies

In July 2014, Students for Concealed Carry Foundation sued The Ohio State University, alleging that the University’s Code of Student Conduct, Workplace Violence Policy, Office of Student Life Standards of Conduct, and Residence Hall Handbook, all unlawfully restrict the student, faculty, and staff’s right to carry firearms.

The Students for Concealed Carry Foundation case is still in the early stages of litigation. It may, however, be a harbinger of future litigation against public entities whose personnel policies or codes of conduct regulate firearms in a manner more restrictive than state and federal law. Public entities should review their personnel policies and codes of conduct to ensure no improper restrictions are present.


Whether responding to a concerned citizen, drafting a personnel policy, or creating a student code of conduct, law enforcement personnel and public entities must be informed about the nuances of Ohio firearms law. Consultation with legal counsel can mitigate exposure to future litigation.

To reach Attorney Chojnacki, call 216-781-1212 or e-mail

byandnbsp;William R. Hannaandnbsp;andandnbsp;Benjamin G. Chojnacki

On Wednesday, January 14, 2015, the United States Supreme Court issued a decision clarifying what information must be provided when denying an application for cell phone tower siting under the Telecommunications Act.andnbsp;T-Mobile South, LLC v. City of Roswell, Georgia, 574 U.S. ____ (2015).

The City Council of Roswell, Georgia held a public hearing to consider an application to build a cell phone tower on residential property, filed by T-Mobile South. During the hearing, several members of Council voiced concerns about the impacts of the proposed tower on the area. At the conclusion of the hearing, Council passed unanimously a motion to deny the application. Two days later, the City notified T-Mobile that the application was denied, and told T-Mobile that there would be minutes from the hearing. The minutes were published 26 days later. T-Mobile sued, alleging that the denial wasn’t supported by substantial evidence in the record. The District Court agreed with T-Mobile, but the Eleventh Circuit Court of Appeals reversed, finding that the City complied with law, because T-Mobile had received a written denial letter and had a transcript of the hearing (for which it had arranged). T-Mobile appealed this decision to the Supreme Court.

The Supreme Court held that the Telecommunications Act requires a municipality to provide written reasons for denying an application for cell phone tower siting. Although the municipality does not have to include its reasons in the letter notifying the applicant of the denial,andnbsp;T-Mobile Southandnbsp;requires the municipality to make such reasons available in writing “at essentially the same time” the denial is communicated to the applicant. The significance of the requirement for contemporaneous availability of the written reasons for denial is that an entity whose application is denied has 30 days from the date of denial to decide whether to seek judicial review, such that the 26 days between the denial in this case and the availability of the minutes explaining the reasons for the denial put the applicant in a difficult position.

Municipalities considering applications for cell phone tower siting need to review this opinion to ensure they are processing applications in compliance with Supreme Court precedent. If you have questions about the decision, or any other telecommunications issues, please contact one the attorneys in Walter | Haverfield LLP’sandnbsp;Telecommunications and Right-Of-Way Group.

In the wake of increasing complaints regarding bullying of students with disabilities, the U.S. Department of Education, Office of Civil Rights (OCR) released expanded guidance for schools (public, charter, and magnet) regarding responsibilities to prevent and address the bullying of students with disabilities. The OCR clarified that bullying may violate civil rights laws, including Section 504 of the Rehabilitation Act of 1973 and Title II of the Americans with Disabilities Act,andnbsp;even if the bullying was not based on the student’s disability. The OCR has also clarified thatandnbsp;bullying may interfere with the student’s receipt of a Free Appropriate Public Educationandnbsp;(FAPE) under Section 504 or the Individuals with Disabilities Education Act (IDEA). Districts must take steps to address both the bullying and the impact of bullying on the provision of FAPE.

When an allegation that a student with a disability was bullied arises, districts must: (1) investigate the allegation and implement the established anti-bullying policies;andnbsp;andandnbsp;(2) take additional steps to ensure the provision of FAPE. Specifically, the OCR guidance outlines several steps when a student with a disability is bullied:

  • Promptly determine if the student’s receipt of FAPE services may have been affected by the bullying (even if the bullying was not based on the student’s disability).
  • Determine if a Section 504 or IEP team meeting is needed (triggers for calling a meeting include changes in academic performance or behavior, such as grades suddenly declining, emotional outbursts, increased frequency or intensity of behavior, or an increase in missed service sessions).
  • Promptly convene the Section 504 team or IEP team to determine if (1) the student’s needs have changed due to the bullying, (2) the student’s receipt of services necessary for the provision of FAPE has been affected, and (3) if any additional services or changes are necessary to meet the student’s needs.
  • Implement changes determined by the Section 504 team or IEP team promptly.
  • Safeguard against the student having the burden to avoid or handle the bullying independently.
In response to this guidance, schools should:

  • Ensure that the school’s anti-bullying procedures are followed and that staff members are trained to implement strategies to support students and respond appropriately to allegations of bullying.
  • Conduct thorough and quick investigations when bullying, harassment, or intimidation is suspected for a student with a disability,andnbsp;even if the bullying, harassment or intimidation is not based upon the student’s disability.
  • Take prompt and reasonable steps to address any behavior of bullying, harassment, or intimidation, including the environment created by it, elimination of effects, and prevention of reoccurrence.
  • Identify procedures and train staff to ensure that the impact on the provision of FAPE is assessed in situations involving students with disabilities (including promptly convening the Section 504 or IEP team).
  • Ensure procedural safeguards for students with disabilities are followed in assessing the impact on the student’s needs and make any necessary changes to the IEP or Section 504 plan (i.e., services, placement, etc.).

The United States Department of Labor issued a Final Rule in February, revising the definition of a “spouse” under the Family and Medical Leave Act (“FMLA”), which extended the FMLA’s protections to married, same-sex couples. The rule is designed to implement changes required as a result of the United States Supreme Court decision inandnbsp;United States v. Windsor. In that case, the court struck down the Federal Defense of Marriage Act provision which restricted the definitions of “marriage” and “spouse” to opposite-sex marriages for purposes of federal law.

The new regulation allows legally married couples, opposite-sex and same-sex, to enjoy the rights provided by the FMLAandnbsp;regardless of the laws in the state in which the employee currently resides.andnbsp;Accordingly, as long as the employee is legally married in a location that allows for same-sex or common law marriages, the employee is married for purposes of the FMLA, even if the state in which the employee resides does not recognize same-sex marriages. The Final Rule also includes those employees in lawfully recognized same-sex and common law marriages which were entered into outside of the United States, as long as they could have been entered into in at least one state. The FMLA still does not apply to civil unions or domestic partnerships.

The Rule will become effective on March 27, 2015. Employers will therefore want to update their FMLA policies or at least notify decision-makers regarding this change. The new regulations will not only impact a spouse’s right to take care of his/her spouse, but a spouse’s right to take care of a child or “stepchild.”

Employers may request reasonable documentation of the marriage, which can be a statement from the employee or documentation from a court, but any such request should not interfere with an employee’s exercise of his or her FMLA rights. Generally, employers will already have such information in the personnel file along with an employee’s emergency contact, healthcare benefits or beneficiaries issues with respect to employee benefit plans. Employers should, however, be consistent in requesting documentation for same-sex and opposite-sex marriages.


  • Revise FMLA policies and FMLA forms to reflect that leave for legal, same-sex spouses is covered under the FMLA.
  • Ensure those administering FMLA leave are aware of and understand the change in the law.
  • Understand how the new definition may impact other benefit plans related to FMLA leave.

On March 25, 2015, the U.S. Supreme Court issued its decision in the Young v. United Parcel Service, Inc.andnbsp;case. Employers and employees alike were hopeful that the Court would provide much-needed guidance about when and how employers are required to accommodate pregnant workers, particularly with respect to providing light duty. While the Court provided some guidance, it did not resolve the issue directly and employers are still left with a difficult decision.

In theandnbsp;Young v. UPSandnbsp;case, Young, the female plaintiff, was a delivery truck driver for UPS when she became pregnant. Young’s physician placed her on light duty early on in her pregnancy due to a lifting restriction. UPS denied Young’s request to work light duty because the requirement that she be able to lift more than 20 lbs. was an essential function of her job. Young was, therefore, forced to remain on an unpaid leave of absence during her pregnancy. UPS, however, did have a policy that allowed employees who had work-related injuries to work light duty. UPS also provided light duty to other types of employees, such as those who have disabilities. Employees who did not fall into any of the exceptions were not eligible for light duty assignments. The lower courts concluded that UPS’s policy was lawful because the policy treated pregnant workers and non-pregnant workers alike.

Young’s lawyers argued that UPS’s policy providing light duty work for certain employees, but not for pregnant employees, violated the Pregnancy Discrimination Act (“PDA”). UPS argued that an employer may have a facially neutral policy so long as pregnant employees and non-pregnant employees are treated the same.

In deciding the case, the U.S. Supreme Court did not agree with either party. The Court confined its ruling to the issue of whether UPS’s actions constituted a violation of the PDA, which states in part that “women affected by pregnancy, child birth or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability to work.” The Court then created a new standard. Under the new standard, in order to establish a pregnancy discrimination claim, a pregnant worker needs to offer evidence that: (1) she is in a protected group (pregnant); (2) she requested an accommodation because of her pregnancy; (3) the employer refused the request for accommodation; and (4) the employer provided accommodations for others who are temporarily similarly unable to do their work. If the pregnant worker is able to provide this proof, the employer is obligated to show that it has a legitimate, non-discriminatory reason for denying accommodation. Legitimate reasons do not generally include cost or convenience. If the employer is able to produce such evidence, the employee has the obligation to demonstrate that the employer’s reason was a pretext for discrimination. What’s new is that, in proving pretext, the employee can argue that the workplace policy puts a “significant burden” on pregnant workers and that the employer’s legitimate, non-discriminatory reasons are not “sufficiently strong” to justify the burden. The Court further explained that a pregnant worker can “create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of non-pregnant workers while failing to accommodate a large percentage of pregnant workers.”

The Court ultimately found that there was a genuine dispute as to whether UPS provided more favorable treatment to at least some employees whose situation could not be reasonably distinguished from Young’s. The Court sent the case back to the lower court to consider the evidence, consistent with the Court’s new standard. And, while the Court did not give employers a definitive answer, the Court did reject the idea that an employer isandnbsp;necessarily requiredandnbsp;to provide light duty to a pregnant employee simply because it provides light duty to one set of employees, such as those injured on the job.

What should employers do now?andnbsp;Employers that have policies allowing for light duty for some employees should consider whether light duty should be made available for pregnant workers in similar circumstances. If an employer is not inclined to go this route, the employer should consider whether its policies impose a “significant burden” on pregnant workers and whether its legitimate, non-discriminatory reasons are sufficient to justify the burden. When making these decisions, employers should consider whether they are willing to litigate these issues to trial, as summary judgment will likely be more difficult to obtain under the Court’s new standard.

Another concern that complicates this issue for employers is the definition of disability under the Americans with Disabilities Act (“ADA”). Employers must be mindful that the definition of disability under the ADA may now be interpreted in many circumstances to include short-term impairments when related to what we otherwise consider healthy pregnancies. Many employers will have a duty toreasonablyandnbsp;accommodate pregnant employees under the ADA (as opposed to the PDA) by providing light duty. The bottom line is that, before employers refuse to provide pregnant employees with an accommodation such as light duty, they should consult with legal counsel.

On March 26, 2015, the U.S. District Court for the Northern District of Texas preliminarily enjoined the same-sex spouse rule promulgated under the Family and Medical Leave Act (“FMLA”), as a result of Texas, Arkansas, Louisiana, and Nebraska filing a lawsuit to enjoin enforcement of the Department of Labor’s (“DOL”) rule. The rule, effective March 27, 2015, allows legally married couples – including same-sex couples – to enjoy the rights provided by the FMLA, regardless of the laws in the state in which the employee currently resides. These states argued that the DOL exceeded its jurisdiction by forcing employers to look to the law in the state in which the marriage took place, rather than the law of the state in which the employee who is seeking FMLA leave resides.

The Court found that the final rule would require Texas agencies to recognize out-of-state same-sex marriages in violation of state law. The Court’s ruling essentially puts the rule on hold in these four states and, for now, prevents employees in same-sex marriages from receiving the benefits afforded heterosexual married couples under the FMLA. Employers in other states need to comply with the DOL’s rule unless or until a court in their jurisdiction rules likewise. One possible outcome of the Texas court’s ruling is that the DOL may opt not to enforce the new rule in other states until the issue is resolved by the courts. The DOL has requested that the court reconsider its decision. Oral argument is currently scheduled for later this month.

The purpose of this blog is not to provide advice to employers struggling to deal with the changes or lack of changes in the various employment-related government agencies. Rather, it is to complain that the National Labor Relations Board (NLRB) and the Department of Labor (DOL), specifically, the Fair Labor Standards Act (FLSA), are historic anachronisms.andnbsp;

The world and, more specifically, the workplace have changed so much since these government entities and their various regulations came into being. Consider the FLSA, for example.

Created in 1938, the Act was, at its most basic level, established to provide rules governing overtime pay in an industrial world. Today, this act covers more than 75 million workers who perform jobs that only existed in science fiction in the 1930s.andnbsp;

To say that the FLSA is a bit outdated is a serious understatement.

In March of this year, President Obama proposed changes to the FLSA that, among other things, would require overtime for several million currently exempt employees. While it is commendable that the President recognized the need to update the Act, the proposed changes fall abysmally short of bringing the Act in line with today’s workplace. In order for our nation to be competitive in a global market, we need workplace policies that are flexible and responsive. American businesses would greatly benefit from the elimination of vast segments of the outdated Act. Or, at minimum, numerous sections need to be brought up to 21st century standards and demands.

In contrast to the DOL, which has changed little since its inception, is the NLRB, an agency in search of a mission. Clearly, with unionization at a historic low point, the NLRB’s original mission has been eviscerated. It is beyond debate that private sector unionization has eroded from 35% to around 7% since WWII and that that erosion is a direct result of unions not properly responding to changes in the post-industrial workplace and workforce. Like the DOL, the NLRB mirrors that ostrich-like obliviousness.andnbsp;

On the one hand, management at most companies is much better in responding to employee needs and wants than it was 70-80 years ago. That means fewer disgruntled employees and less need for nanny-agencies like the DOL and NLRB. Adding to this reality is that the union movement and its workplace brethren have, for the most part, been unable to “live up” to expectations of workers. Anyone who expected the DOL and NLRB to have noted the changing workplace, workforce and unionization rates and respond appropriately is sorely disappointed.andnbsp;

Indeed, under the Obama Administration, the NLRB actually strengthened its hold over the workplace through a more expansive reading of workers’ rights as provided under Section 7 of the National Labor Relations Act (NLRA), which permits employees to engage in “protected and concerted” activities. As part of this expansion, the NLRB is now taking some very controversial actions related to employee handbooks and workplace rules — including its recent holdings that an employer has no right to expect its workers to act courteously and with civility.andnbsp;

For example, in a recent case the NLRB found that handbook provisions that prohibited “negativity and gossip” and required employees to act in a “positive and professional manner” were deemed illegal because they were somehow construed to be “limiting” employees’ rights (to act badly and unprofessional, I assume). In another recent case, a handbook provision that prohibited “discourteous or impolite” behavior was also found to violate employee rights.

The result of all this over-regulation is that employers need to be more careful than before and involve legal counsel to a greater degree when crafting nearly any employee policy or employee handbook, spending money that could be used to grow the business. Does the NLRB really have so little to do these days that it is spending its time and efforts in striking down policies that discourage disruptive employee behavior? And should such disruptive behavior occur, how then would this irrelevant agency deal with it?

Without a doubt, the mid-1930s are long gone. And it’s time that our various government agencies and governing bodies get a grasp on what is needed today to help American businesses thrive instead of crippling them with this sort of nonsense.

The Obama administration, after having basically ignored its labor constituency for five years, is now in a position to implement some broader pro-union strategies.

While the administration is using a multi-pronged approach in its attack on business, I want to concentrate on the more controversial initiatives that are being pursued by the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB).

Let’s start with the DOL’s increased focus on and investigation of “inequality of wages based on sex in the workplace” by the Office of Federal Contract Compliance Programs (OFCCP). While such alleged inequality bears investigation, it appears that the DOL has reached a predetermined conclusion, which, if successfully applied, will cost employers untold billions of dollars.

The second area of interest is the DOL’s rulemaking as it relates to two timely issues.

On the one hand, the DOL has signaled its intention to implement the controversial “persuader” rule in March. If this draconian rule is implemented in its current form, it will significantly diminish the types of union resistance activities by employers that normally occur during NLRB- sponsored union elections. Any pro-employer activity by lawyers in a union representation campaign would trigger DOL reporting requirements, which lawyers and their clients are loathe to follow and would amount to a “game changer” during union resistance campaigns.

Similarly, the DOL is refusing to issue any guidance regarding union-sponsored “work centers,” finding that they are not governed under current applicable National Labor Relations Act guidelines since a work center does not constitute a labor union because it is not “the employees’ bargaining representative and does not negotiate employment terms with employers.”andnbsp;

Finally, the third leg of the administration’s attack on business is found at the NLRB, which has recently taken a number of strongly pro-labor, anti-business actions. A case in point is its recent complaint against Wal-Mart for disciplining employees who are members of work centers for engaging in “partial” strike activity.andnbsp;

The case of national homebuilder D.R. Horton is another great example, as the NLRB is trying to come to grips with the rights of companies to enforce non-union employee arbitration agreements. Generally, the courts of appeal believe such activity by non-union companies is permitted but the NLRB believes that such clauses act to inhibit permitted union activity. The Fifth Circuit Court found against the NLRB’s position regarding its stand on non-union arbitration agreements. Nevertheless, the court granted the NLRB an additional time to decide if it wants to pursue this matter further. It seems likely that the current NLRB will try to get the Horton decision in front of the Supreme Court.

These efforts are on top of what the NLRB did last year when it determined that a smaller bargaining unit may be “carved out” from a larger overall employee unit in some instances. For example, employees in a cosmetic department of a large department store may, in fact, be considered a bargaining unit in and of itself to help facilitate organizing efforts.

In an additional move to support the languishing efforts of unions to organize, the NLRB also is expected to re-introduce its “ambush election rule.” The action, which met with resistance in 2013, will likely be resurrected in 2014 to expedite union elections in a manner that will arguably increase union victories by not giving employers sufficient time to present their side of the issue.

The nexus of all these matters is that the Obama administration, through its various departments and agencies, has taken it upon itself to go after some of the most successful companies in the country for purely philosophical reasons — i.e. success brings about inequality, whereas mediocrity does not. This argument, although not as bluntly stated, appeals to the media and the small group of uneducated employees that, for a variety of reasons, has not been able to participate in the tech revolution.andnbsp;

Consequently, it is clear that employers are in for a rough several years, unless the make-up of the Senate and the House changes, in which case there will be some pushback on a congressional level. With a gridlocked Congress unlikely to make much progress, however, it is obvious that the Obama Administration is seeking to accomplish its pro-labor agenda through the various government agencies that will be operating with a clear anti-employer bias.andnbsp;

With the number of union workers at an all-time low in this country, it should really come as no surprise that unions have resorted to more drastic, unconventional methods of recruitment. The use of worker centers to help recruit traditionally unorganized sectors of the workforce has caught the attention of not only the media, but also business leaders and even politicians across the country. As a result, the House Subcommittee on Health, Employment, Labor and Pensions has scheduled a hearing titled “The Future of Union Organizing”. The focus of the hearing is to discuss the impact of worker centers on the union movement.

If you haven’t already read one of the more than dozens of national newspaper stories focused on the latest union escapades, it’s good to start with an explanation: Worker centers are non-profit organizations that “provide” services for workers in construction, restaurants, retail, food processing, agricultural, landscaping and domestic professions. Although these worker centers are not officially affiliated with unions and, on the surface, appear to not have a lot in common with them, they have been in the spotlight recently and are credited with focusing attention on workers’ rights through such tactics as the highly publicized national one-day strike in the fast food industry in mid-September.

A primary advantage of worker centers is that they fall outside the scope of the National Labor Relations Act’s provisions that regulate, among other things, how and when unions can picket and can interact with employees and management. Clearly, the move by organized unions to work with worker centers signifies a willingness on the part of unions to utilize bold, new and strategic tactics to re-energize the union movement. However, by reaching out to such non-organized groups, it can also be seen as a last-ditch effort to breathe life into a languishing ideology.

Whether or not the “partnership” of unions and worker centers can truly be successful relies largely on economic realities. Traditionally, worker centers represent the bottom rung of the American labor force—the unskilled and minimum wage earners. Therefore, it is unrealistic to expect that their employers can absorb the type of wage increases being sought. Take the fast food industry, for example. While it is true that it is difficult, if not impossible, to support a family while making minimum wage, the companies employing these workers do not have the type of margins to support a major wage increase. In response to worker demands to make more money, these companies are more likely to automate their operations which, in the end, will actually decrease the number of workers employed.andnbsp;

Nevertheless, the work center approach is not intended to be just a labor union issue. Rather, it is part of a grander strategy to highlight perceived economic and social inequities in the American work force. The backdrop to this strategy is “raising” social awareness and, therefore, general worker disenchantment with their current working conditions—hence, call your local union organizer for help.

It is worth noting, however, that the union movement first got its start with a group of employees who had issues with their employers and continued to grow until they forced political and business leaders to focus on an underserved population. This, in many ways, is how and why worker centers operate.

Up until this point, however, the impact of the worker centers and their one-day strikes appears to have been minimal (although somewhat disruptive, as is typical for any group trying to start a “revolution”). But it is still very early to try to predict any end results. It is very likely, however, that tactics and initiatives will become less peaceful as time goes on.

While most legal and labor professionals are currently taking a wait-and-see approach, this is a good time to revisit hiring and employment practices and procedures. The best way for keeping the union away from your doors is to hire the right people, treat them fairly, allow them to move forward and, overall, give them dignity.andnbsp;

Without a doubt, these are certainly interesting and unprecedented times for labor.

Although Time made breastfeeding a hotly debated issue with its recent cover photo of a mom nursing her almost 4-year-old son, breastfeeding in the workplace has long presented a legal stumbling block for employers and employees alike. The dearth of laws directly applicable to the situation has fueled confusion; however, the increased focus on breastfeeding in general has spurred a move towards defining the legal rights and obligations related to breastfeeding in the workplace.andnbsp;

This is evidenced at the federal level by the 2010 Patient Protection and Affordable Care Act (PPACA), which contains a provision that requires employers covered by the Fair Labor Standards Act (FLSA) to provide both “reasonable breaks to mothers to express breast milk” and an appropriate area for the process. More recently, the proposed Breastfeeding Promotion Act of 2011 (BPA) seeks to protect breastfeeding women from being discriminated against in the workplace and to afford employees exempt from the FLSA, who are not protected under the PPACA, the right to a break and appropriate area to pump in the workplace.

Under the PPACA, breastfeeding employees must be provided “reasonable” breaks to pump. The reasonableness of the breaks is a question that will vary depending on the employer and employment context. As to the location for these breaks, Fact Sheet No. 73, issued by the Department of Labor, confirms that a bathroom is not a permissible break location. Rather, a functional space must be provided for the employee’s use; it need not be dedicated solely for that purpose, but it must be available to the employee when she needs it. According to the fact sheet, “A space temporarily created or converted into a space for expressing milk or made available when needed by the nursing mother is sufficient provided that the space is shielded from view and free from any intrusion from co-workers and the public.”andnbsp;

As long as the employee has been completely relieved of her employment duties, employers are not required to compensate an employee for these breaks, regardless of the break’s duration. However, if the employee wishes to utilize a compensated break that was already available to her and other employees for the purpose of pumping, the employer must compensate her the same way it compensates other employees.

One glaring omission under the PPACA, however, is that only employees who are not exempt from the FLSA’s overtime pay requirements (typically, hourly employees) are legally entitled to breaks to pump. An employer should consider whether other factors, such as employee morale and retention, might dictate that it extend the same opportunities to pump in the workplace to exempt employees.

It’s important to note that there is a hardship exemption from this provision for employers with fewer than 50 employees, if the employer can demonstrate that compliance would “impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business.” Employers should be cautious in determining that they are unable to comply with the PPACA’s requirements, however; they need to undertake a careful analysis as to whether the reasons they believe they cannot comply with the requirements will meet the undue hardship standard.andnbsp;

It is also important to note that employees must notify employers of their intent to take a break for the purpose of expressing milk. The Ohio Supreme Court has previously upheld an employer’s right to terminate an employee for taking an unauthorized break to pump because she failed to notify said employer of her intentions. Be careful, however, because the Supreme Court implied in that case that, if the issue was placed before it, it could find that Ohio law prohibits discrimination against lactating employees.andnbsp;

Before deciding to terminate a lactating employee for taking unscheduled breaks, employers should consider whether they permit other employees to take unscheduled breaks and, if so, for what reasons. A neutral and consistent disciplinary policy should be implemented and enforced. In addition, employers generally may require their breastfeeding employees to follow other rules applicable to all employees.

Time magazine’s recent cover, depicting a mother nursing her almost 4-year-old son, brought the subject of breastfeeding into the spotlight as water cooler debate across the globe.

The age-old issue of nursing mothers in the workplace, however, has long presented legal challenges and debate for both employers and employees alike.

Much of this debate, and the ensuing confusion, stems from the fact that very few employment regulations directly address nursing mothers. The increased focus on the benefits of breastfeeding in general, however, has spurred a move toward clearly defining the legal rights and obligations of breastfeeding mothers and their employers, including what accommodations need to be made for nursing mothers so that they can express their breast milk privately when they are at work.

Provisions in federal law

At the federal level, the 2010 Patient Protection and Affordable Care Act (PPACA) contains a provision that requires employers covered by the Fair Labor Standards Act (FLSA) to provide both “reasonable breaks to mothers to express breast milk” and an appropriate, private area for them to do so. The reasonableness of the breaks is a fact specific question that will vary depending on the employer and employment context. As to the location for these breaks, Fact Sheet #73, issued by the U.S. Department of Labor, confirms that a restroom is not a permissible break location.

Instead, the DOL fact sheet notes that employers must provide nursing mothers with a “space temporarily created or converted into a space for expressing milk or made available when needed” and that the space must be sufficiently “…shielded from view and free from any intrusion from co-workers and the public.”

Additionally, as long as the employee has been completely relieved of her employment duties, employers are not required to compensate an employee for these breaks, regardless of the break’s duration. But, if the employee wishes to use a compensated break already available to her and other employees for the purpose of pumping, the employer must compensate her the same way it compensates other employees.

Despite its clearly spelled out protections, the PPACA provision has one glaring omission: Only employees who are not exempt from the FLSA’s overtime pay requirements, typically hourly employees, are legally entitled to breaks to pump. Employers should consider other factors, such as employee morale and retention, when considering extending the same opportunities to pump in the workplace to exempt employees.

The 50 employee hardship exemption

Also note that there is a hardship exemption from this provision for employers with fewer than 50 employees, if the employer can demonstrate that compliance would “impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business.”

Caution is suggested when employers are determining that they are unable to comply with the PPACA’s requirements. A careful analysis as to whether the reasons they believe they cannot comply the requirements will meet the undue hardship standard is recommended before they make any final decision.

Additionally, bear in mind that employees must notify employers of their intent to take a break for the purpose of expressing milk and that there have been cases decided in favor of the employer’s right to terminate workers for taking such a pumping break without notification. The Ohio Supreme Court, for example, has previously upheld an employer’s right to terminate in such a case.

Before deciding to terminate a lactating employee for taking unscheduled breaks, employers need to review their break policy as a whole. Do they permit other employees to take unscheduled breaks? And, if so, for what reasons? A neutral and consistent disciplinary policy should be implemented and enforced company-wide. Employers also generally may require their breastfeeding employees to follow other rules applicable to all employees.

Proposed Breastfeeding Promotion Act

Employers need to be careful, however, and be aware of the laws surrounding lactating employees in their states because the Ohio Supreme Court implied in that case that, if the issue was placed before it, it could find that Ohio law prohibits discrimination against nursing mothers.

In fact, along that same line of thinking, the proposed Breastfeeding Promotion Act of 2011 (BPA), a proposed amendment of the Civil Rights Act of 1964, seeks to protect breastfeeding women from workplace discrimination. It also is designed to provide employees who are exempt from the Fair Labor Standards Act and who are not protected under the PPACA with the right to a have a break to pump breast milk in an appropriate location during working hours.

If passed, the BPA would broaden the category of employees entitled to federal protection for pumping in the workplace and would also broaden the protection afforded employees by specifically prohibiting discrimination, including discharge, based on pumping or otherwise expressing milk in the workplace.

Simply put, both of these federal measures clearly indicate that employers should have clearly defined policies and protocols in place for objectively and fairly dealing with breastfeeding employees. Always check with legal counsel before implementing or enforcing any policies that affect an employee who is breastfeeding or expressing milk during work hours or on work premises.

Susan Keating Anderson is a labor and employment attorney at Walter | Haverfield LLP in Cleveland. She provides general counsel to employers on a variety of workplace matters and HR issues, and has conducted numerous in-services to train employees and employers on best employment practices and procedures. In her practice, Susan has successfully defended employers against charges of discrimination, sexual harassment, wrongful discharge, defamation, and workplace privacy violations. Contact her at

Even several months into the new year, many local commercial real estate professionals still relish how successful 2014 was from a development perspective. Led by our own real estate practice group, law firms across Northeast Ohio stayed busy keeping up with the vast number of transactions, as new deals closed and existing projects progressed into their next phases of development.

As strong as 2014 was, 2015 is shaping up as strong, if not stronger. Regionally, there are numerous projects progressing through development, with particularly robust activity in downtown and midtown Cleveland, as well as Ohio City. In Akron, the East End project saw the completion of the Hilton Garden Inn in late 2014, and construction of the project’s Phase II is in full swing, with completion of the Goodyear Hall redevelopment expected in mid-2015.

One factor helping to drive continuing growth this year is the broad availability of commercial lending funds. Traditional and non-traditional lenders are aggressively pursuing solid commercial real estate investment opportunities. The recent entry of several out-of-town banks into the region will serve to better ensure competitive rates for good projects and qualified borrowers.

New sources of funding are also becoming available locally as more non-traditional lenders are looking to increase their commercial real estate portfolios after having witnessed the tremendous success of several major local projects such as The 9 and Uptown. In addition, these recent successes may cause the Central Business District to catch the interests of developers who typically focus on the suburbs but who are now more willing to take risks within the city limits. Downtown growth may also expand westward with the conversion of the West Shoreway to a more accessible boulevard—a project may begin later this year.

Another factor in the regional real estate market is the preparation for next year’s Republican National Convention. Many businesses are being “encouraged” to do things outside of their traditional comfort zones in order to accommodate the needs of the Convention. Many local law firms are already experiencing an uptick in business in reviewing the multitude of contracts and agreements governing space and other logistics relative to the Convention. Of special note is the no-build zone surrounding the core convention site, which may likely accelerate building in 2015, since no exterior construction work can be done around the time of the Convention in and around the downtown area.

The anticipation of higher interest rates may also accelerate the timing of projects and deal closing. Rates have been precariously low for several years, prompting many to speculate that a rise may be likely in the near term.

Developers and investors eager to take advantage of current low rates may look to both accelerate current projects, if possible, and convert variable rate financing agreements into longer term fixed-rate structures.

As has been the case in recent years, tax credit financing remains an integral piece in moving qualified projects forward. The extension of the New Markets Tax Credit program thru 2014 should provide a ready source of funding for projects this year, as well.

As rosy as the overall forecast appears, history has taught us to not count the money until the deal is completed and delivered. Thus, areas of concern to be aware of include:

  • Sustainability of high demand (and high occupancy rates) in downtown rental housing in order to fill units planned and under construction. While housing demand continues to be strong, the retail segment continues to lag. Without sufficient retail support, downtown housing may struggle over the long-term to retain the young professionals currently driving the residential building boom.
  • The challenge to occupy the glut of new hotel rooms coming online in 2015. While the Republican National Convention will fill these rooms (and more), questions remain whether there is sufficient and consistent demand to support this growth long-term.
  • The sense of optimism that has infiltrated much of the real estate industry has still not made its way to the full consumer population. Overall economic confidence needs to remain high to keep projects moving and adequately funded.

Despite these concerns, 2015 is already shaping up to be a positive and impactful year for developers, investors and law firms.

To reach Geoff, call 216-928-2973 or e-mail

School administrators today are challenged in creating policies and responding to an array of issues that few people would have anticipated as little as five years ago. Consider the challenge of dealing with transgender students.

Transgender is the term that legally describes students whose current gender identities are different from their assigned sex at birth. Although the number of cases involving transgender students is still low, our education law team receives a steady stream of inquiries from schools that are faced with an array of sensitive policy-making decisions around this topic.

The highly charged issue is characterized by strong emotions on both sides. Consider the student who was born male but who is now transitioning to become a female. The student and his parents insist he should be able to use the girls’ restroom. Legally, the United States Department of Education’s Office of Civil Rights has opined that this student has equal rights and access to the girls’ restroom and locker room. But imagine the reaction of the other parents who argue that the student, who still has male body parts and is, biologically speaking, still a boy, should, therefore, continue to use the boys’ restrooms and changing facilities.

Such issues are complex enough when encountered in the adult workforce, especially since there is currently no objective legal definition as to when someone has officially transitioned. They are complicated at the high school level by the high emotions that characterize most teens who are exploring sexuality issues.

The transgender debate has received so much attention that it forced the Ohio High School Athletic Association (OHSAA) to adopt a formal policy specific to it this past November. The issue has major implications for sports teams which could benefit from or be accused of cheating by having a transitioned boy on the girls’ team, for example.

The OHSAA policy states that transgender student athletes should have equal opportunity to participate in sports. It further reports that policies governing sports should be based on sound medical knowledge and scientific validity and developed in a way that preserves the medical privacy of transgender students. Under the policy, all requests from parents indicating a transgender student’s desire to participate on a sports team that is inconsistent with that student’s gender at birth must be submitted to the school in writing and approved by the Commissioner’s Office. In order to qualify, students must have completed a minimum period of hormone treatments and be able to prove by way of “sound medical evidence” that their physical characteristics, including muscle mass, do not dramatically differ from other teammates. All medical treatments must be monitored by a physician and regularly reviewed by the Commissioner’s Office. There is also an appeals process parents can follow if they disagree with the school’s decision.

But the headaches caused by the issue of transgender students don’t end on the sports field.

Since the issue is still relatively new, most school districts are handling these types of situations on-the-fly and on a case-by-case basis. Yet, it is important that policies be created and enforced consistently and uniformly so as to minimize negative media publicity and parent outrage, as well as the risk for discrimination or harassment lawsuits. As can be easily imagined, transgender students can often be the target of bullying by other students. As is true of any other case involving bullying, the school needs to respond quickly and consistently as part of its overall zero-tolerance policy.

It is difficult to address all of the potential discrimination issues in this one article. An especially sensitive issue involves uniform policies and dress codes. Consider the case of a boy wearing nail polish to school. Can he be disciplined by the school for such behavior? It depends on what’s written in the student handbook. Many schools have policies that generically “prohibit dress that interferes with or disrupts the educational environment.” But if nail polish is acceptable for some students and is not specifically prohibited by school policy, it would be ill-advised to proceed with any punitive action in this case. Remember that, even if an action appears unconventional and highly controversial, schools need to be careful in applying rules uniformly.

And how should name changes be handled? If a student who was called James all his life now wants to be called Jane, do you allow it or not? Currently, Ohio law does not expressly address this issue for schools. Thus, there is no one simple answer, because it all depends on what has been allowed in the past. If the school has allowed other kids to change their names–first or last name– for any reason, it is risky to deny a similar request from a transgender student. Other tricky name change issues involve students who have graduated and wish to have official student records changed to reflect a new name that matches their gender identity. Whether a district grants or denies these requests hinges on a number of factors, including past practice and whether the former student has legally changed his/her name. If a district elects not to allow a change to the former student’s records, it can still assist a former transgender student by providing a letter or other documentation that the name on the student’s transcript matches the name he/she was using while in high school.

In our constantly evolving world, it’s difficult for school districts to always anticipate the next big challenge. But the one rule you can rely on to help minimize risk is be consistent.

Few people would have imagined that the space that once housed a major bank could become the home to Cleveland central business district’s largest full-service supermarket. But with the opening of Heinen’s this past February in the renovated Cleveland Trust Building on East 9th Street in downtown Cleveland, history was made.

The renovation has been praised for its thoughtful use of space without detracting from the beauty and rich history of the Rotunda. Behind all the hoopla and praise for the 27,000-square-foot project, however, is a tremendous real estate success story–one that was only made possible after overcoming numerous legal and architectural challenges.

At the heart of the challenge was the fact that the space had to be renovated according to historic rehabilitation standards. The fact that a supermarket occupies such a space, which was redeveloped in compliance with such standards, only adds to the allure of the overall project.

Walking through the store today, it is easy to overlook the noteworthiness of all that was accomplished since the Rotunda was vacated in the 1990s following the merger of Ameritrust and Key Bank. Remembering that teller spaces once stood where fresh food is now displayed only begins to tell the story of the challenges surmounted.

The legal challenges began with the lease agreement between The Geis Companies (the developer) and Heinen’s as it had to be negotiated such that all space was created within the confines of stringent historic rehab standards. It was the responsibility of our firm’s real estate and tax experts to ensure that the lease obligated Heinen’s, in building out the space, to observe these standards so that the project would not be at risk of losing the historic tax credits that were largely responsible for making the project a reality.

The store’s floorplan is unlike any other Heinen’s location in its configuration. Not only is it considerably smaller in size, but it is built around and amongst elaborately decorated arches and columns, as well as the iconic bronze seal that had to remain intact in the center of the Rotunda floor. In some areas, the lower ceilings presented design challenges, as did the historic cast iron railings that had to stay in place.

The transformation from a bank lobby to a supermarket at one of downtown Cleveland’s busiest intersections may be one of Cleveland’s greatest adaptive re-use success stories. Thanks to the efforts and expertise of many different service professionals, the project was completed on-time and serves as one more piece of the giant puzzle that favorably positions downtown Cleveland as a preferred place to live, work and play.

To reach Jack, call 216-928-2914 or e-mail

With the enduring popularity of social media sites such as Facebook, Twitter, and Instagram, companies large and small are looking to connect with the social media market and use it to their marketing advantage. However, with social media marketing can come employment-related headaches that aren’t always anticipated.

So, here’s the scenario. You’ve assigned an employee the task of managing your company’s social media presence. The employee works to promote the company’s brand and products/services via company-owned and maintained blogs and websites as well as through third-party applications such as Twitter and Facebook. The social media campaign successfully garners numerous “friends” and “followers.” Everything is going gang busters… until the employee resigns unexpectedly or is terminated and you realize you are unable to access the social media sites managed by the employee.

So what exactly are the issues you need to think about when rolling out a social media campaign?

A significant issue a company could encounter when placing its social media marketing in the hands of an employee is lack of access. In too many situations, only one employee has the log-in information or the administrative rights to access and update social media content. Now, suddenly that employee is gone and so is access to the accounts, leaving the company vulnerable, at least until the IT department can re-route access (which may be no easy task if you are dealing with a third-party social media site such as Twitter). In addition to losing access, a disgruntled employee can cause a lot of damage while the company scrambles to take down a page, block access, or gain control of the account. In the meantime, the company’s reputation and valuable marketing asset–its “friends” and “followers”–may have been compromised.

It is imperative that, in any social media marketing campaign, senior managers or company owners have the log-in and passwords associated with all accounts. In addition to ensuring that someone in management has the necessary information to maintain and control the account, employers may be able to implement system settings that provide alert notifications when a password has been changed. Employee handbooks and policies also should carefully detail requirements for employees to disclose passwords and provide advance notification before changing any login information.

Another concern is content. Specific review protocols should be in place to ensure that inappropriate or confidential information is not posted or disseminated through social media. For instance, for employees who blog or post about company products, the Federal Trade Commission mandates that employees must disclose that they work for the company and cannot appear to be regular customers. Review procedures should also be in place to ensure that postings and content made on behalf of the company are in line with the company’s image, do not violate workplace policies such as confidentiality or discrimination policies, and do not open the door to potential company liability.

The bigger, potentially more expensive, issue is ownership. If ownership terms are not specifically spelled out in the employment contract, a dispute could arise as to whether or not the accounts and, more importantly, the “friends” and “followers” belong to the company or the person who cultivated them. The ownership issue is particularly blurred if the employee launches the company accounts using a database that he/she already cultivated prior to joining the company, or if, for instance, employees use personal Twitter handles–exclusively or in addition to the company handle–when communicating on behalf of the company.

Some general tips for employers looking to protect their social media assets include:

  • Specifically outline in the employment contract and policies who owns what.
  • Establish accounts using the company name in the handle or account name.
  • Require ongoing disclosure of all passwords and log-in information.
  • Review the terms of service of all third-party social media sites to ensure your ownership and access protocol is adequate to protect your interests.
  • Develop guidelines for social media content and oversight.
  • Implement internal technology systems and controls favorable to protecting your access and control of such sites.
  • Train your employees and supervisors who have social media-related responsibilities on the applicable policies and protocol.

As previously mentioned, this is a new area for many companies, as well as for the courts; however, the existence of clear policies and agreements setting forth the parties’ rights relative to social media often go a long way in resolving such disputes. In addition, it is always good to consult with experienced legal counsel to ensure such policies meet legal, as well as operational, concerns.

To reach Susan, call 216-928-2936 or e-mail

Byandnbsp;Stephen L. Byronandnbsp;andandnbsp;Aimee W. Lane.andnbsp;

The State of Ohio reached an $11.5 million settlement in its price-fixing lawsuit against road salt providers Cargill, Inc. and Morton Salt, Inc.

Under the terms of theandnbsp;settlement, public entities that purchased road salt from Cargill and/or Morton between July 1, 2008 and June 30, 2011 may be entitled to receive compensation for overpayment because of artificially high prices.

In order to determine eligibility, local governments were asked to submit aandnbsp;claim form, found on the Ohio Attorney General’s website, beforeandnbsp;August 7, 2015. The form requires public entities to provide information concerning their purchase of rock salt for each of the 2008, 2009, and 2010 seasons as well as some identification information.

If you have any questions about the settlement, the claim process, or any other public law issues, please contact one of the attorneys in Walter | Haverfield’sandnbsp;Public Law Services group.

Byandnbsp;Stephen L. Byron,andnbsp;Benjamin G. Chojnacki, andandnbsp;Ellen R. Kirtner, Lawandnbsp;Clerk.

Ohio Attorney General Mike DeWine announced yesterday that the State of Ohio has reached a settlement in its price-fixing lawsuit against road salt providers Cargill, Inc. and Morton Salt, Inc.

The lawsuit alleged that Cargill and Morton spent nearly a decade engaged in a conspiracy that caused state and local governments to pay an artificially high price for road salt. In exchange for dismissing the case, and without admitting any wrongdoing, Cargill and Morton have agreed to pay the State of Ohio $11.5 million.

The Attorney General will distribute this money among local governments, the Ohio Department of Transportation, and the Ohio Turnpike Commission.

Local governments will be asked to submit documentation to the Attorney General showing that they purchased road salt from either Cargill or Morton at any time from 2008 to 2010. To ensure prompt distribution of settlement funds, municipalities should gather all available documentation showing they purchased road salt from either Cargill or Morton at any time from 2008 to 2010, and wait for further instruction from the Attorney General.

If you have any questions about the settlement, or any other public law issues, please contact one of the attorneys in Walter | Haverfield’sandnbsp;public law group.

Byandnbsp;Stephen L. Byron,andnbsp;Aimee W. Lane, andandnbsp;Ellen R. Kirtner, Law Clerk

On Thursday, June 18, 2015, the United States Supreme Court announced its decision inandnbsp;Reed v. Town of Gilbert. Inandnbsp;Reed, the court held that a municipal ordinance in Gilbert, Arizona is in violation of the First Amendment. The ordinance allowed for varying restrictions on sign content based on the particular message on the sign. Although the ordinance did not directly regulate the messages on signs, the ordinance was held to be content-based because varying rules were imposed based on a sign’s message.

Good News Community Church challenged the Gilbert ordinance. The church had been cited twice under the ordinance for posting temporary signs which contained information about the time and location of the church’s services. The church posted more signs than were permitted under the ordinance, the signs were posted for a longer time than was permitted under the ordinance, and the signs failed to include the dates of events; all of these conditions violated the town’s sign ordinance.

The town’s ordinance had defined the church’s signs as “temporary directional” signs, which were one of the most tightly regulated types of signs under the ordinance. The ordinance limited the number, location, and length of time these signs could be displayed. The town imposed less stringent restrictions on other types of signs, such as political signs and ideological signs.

The U.S. Supreme Court reversed the Ninth Circuit Court of Appeals decision, which held that the ordinance was content-neutral, and thus constitutional. The Supreme Court held that while the ordinance did not place any limitations on the specific messages written on signs, it did regulate signs based upon the messages that were conveyed. For example: “temporary directional signs” are signs which direct the public to a “qualifying event” (such as a church service), “political signs” are signs “designed to influence the outcome of an election,” and “ideological signs” are signs “communicating a message or ideas.”

The majority opinion of the Court stated that local governments could still regulate signs via content-neutral ordinances to address safety concerns and aesthetics. For example, the town could limit size, building materials, lighting, moving parts, or the location of signs, provided that the limitations apply to all signs equally, and the extent of regulation did not depend upon the message that the sign conveyed.

A concurring opinion noted that the majority opinion, while correctly striking down the Gilbert regulations, had drawn a bright-line rule which would subject many local ordinances to “strict scrutiny,” and that it was unlikely those ordinances would survive that higher standard of review. This outcome would subject numerous reasonable regulations to fatal challenges.

The Court’s decision inandnbsp;Gilbertandnbsp;serves as a reminder that drafting and implementing lawful sign regulations is a difficult task. Communities should revisit their regulations to determine whether the laws on the books will subject them to a constitutional challenge.

If you have any questions regarding the issues addressed in this Client Alert, please contact a member of Walter | Haverfield’sandnbsp;Public Law Services group.

On June 30, 2015, the U.S. Department of Labor (“DOL”) finally issued the proposed rule which will expand overtime pay and reduce the group of employees who qualify for exemptions under the Fair Labor Standards Act (“FLSA”). You will recall that in order to qualify for a white-collar exemption under the FLSA, an employee must be paid a fixed salary that meets the minimum threshold and the employee’s primary duty must be the performance of exempt work.

The proposed rule more than doubles the salary threshold for the white-collar exemptions (executive, administrative, professional, outside sales, and computer) from $455.00 to $921.00 a week ($23,660 to $47,892 annually) with a plan to increase the $921.00 to $970.00 a week ($50,440 annually) in the final version. The thresholds would be automatically updated annually under the new rule. There is also a proposed increase in the annual exemption for highly-compensated employees, from $100,000 to $125,148, with a yearly increase thereafter that is tied to a percentile. As such, each year employers would need to modify their payrolls to ensure that employees are properly classified as exempt.

The proposed rule also addresses bonuses and incentive payments, commission payments, and exclusions for benefits.

While no specific changes are proposed, the DOL also stated that it is considering whether changes to the “duties” tests for the exemptions are needed. It is asking for comments on that issue as well.

The DOL’s rule is only a proposal at this time.andnbsp;The proposed rule was published in the Federal Register on Monday, July 6, 2015. The public, including all employers, may comment on the proposal for a period of 60 days. Comments must be filed by September 4, 2015. The DOL will then issue a final rule which is likely to include variations from the proposed rule. Keep in mind, the public may not have the opportunity to comment on these variations.


For now, employers should consider working with Chambers of Commerce, Human Resources and business organizations to review the rule and submit comments to make their concerns heard.

On August 27th, the National Labor Relations Board (NLRB) dramatically reinterpreted the “joint-employer” doctrine. Under the National Labor Relations Act (NLRA), “joint employers” are two separate employers that both control the terms and conditions of shared employees-shared in the sense that the employees are employed by an entity that provides temporary labor to work for another employer or with whom that employer subcontracts. Previously, the NLRB’s definition of “joint employer” required both employers to have direct and immediate control over the employee(s) in question. The NLRB has expanded the definition to include any employer that has the right of “actual control whether direct or indirect.”

In Browning-Ferris Industries of California, Inc., (“BFI”), BFI engaged a subcontractor to perform “sorting” work at a recycling facility. The employees were employed by another company, Leadpoint, but were indirectly governed by BFI’s rules and pay structures. The NLRB cited two examples in which BFI asked Leadpoint to terminate an employee for BFI rules violations. BFI did not participate in day-to-day labor relations with the Leadpoint employees, and did not participate in the hiring or general retention of those employees. Nevertheless, the NLRB held that BFI had overarching indirect control over Leadpoint’s employees and consequently should be required to participate in collective bargaining negotiations with a union representing the Leadpoint employees.

We expect this case to be appealed to a United States Circuit Court of Appeals and ultimately to the Supreme Court. We also expect Congress to attempt to amend the NLRA to make this definition unlawful. Nevertheless, unless and until this case is reversed, employers, whether currently organized or not, must be aware that the hiring of contingent workers to augment a regular work force will put them at risk of being found an “employer” of the temporary employees or the subcontractor’s employees. The consequences of that finding may include placing the employer under a duty to bargain and may impose shared liability for any unfair labor practice charges that are filed on behalf of those employees.

The NLRB made it quite clear that this new definition of “joint employer” will replace the prior definition immediately and each case will be decided on its own facts. Consequently, it is necessary that employers that subcontract any work or hire contingent/temporary employees review existing rules and policies regarding such employees.

This case does not directly apply to franchisor/franchisee relationships. However, in a case involving McDonald’s fast food restaurants the NLRB is currently considering whether or not franchisors and their franchisees should be considered joint employers. Browning-Ferris could portend the outcome of this case as well.

Contact: Marc J. Bloch

What we’ve learned from the Sony Hack of 2014

November 24, 2014 marked one of the most devastating cyberattacks on a private corporation to date. The attack, which infiltrated the highest levels of Sony Pictures Entertainment (SPE), illustrates not only how vulnerable most companies are to hacking, but provides a strong case for why companies need to invest more robustly in IT security.

It was a Monday morning. As SPE employees turned on their computers, the horror began. Monitors displayed the frightful image of a skeleton bathed in red light over decayed faces of SPE executives, accompanied by sounds of gunfire. The message was that the Guardians of Peace had hacked SPE’s computers and would release sensitive information if its orders were not obeyed.

SPE management was blindsided. More than half of SPE’s 1,555 servers and 3,262 of SPE’s personal computers were wiped of all stored data and operational capability. Within an hour, most of the destruction was done. Only then did SPE’s IT personnel learn that the attack had been ongoing for months before showing itself, stealing the data it then destroyed that fateful morning. They learned the hackers accessed a “confidential” current audit of SPE’s entire computer network that they used as a roadmap to destruction against SPE. More than 47,000 social security numbers, medical records, salary lists and documents detailing intra-office affairs and unreleased movie scripts were leaked to public file sharing or piracy websites for free viewing and downloading.

Less than a month later, the FBI announced that North Korea was behind the hack. Investigations revealed that the government had issued threats against SPE because of the film “The Interview,” which focused on a plot to kill the North Korean leader. Since then, SPE has completely re-engineered its cybersecurity system, including updated protocols, equipment, employee training and firewalls. SPE’s damage and losses, much of which are uninsured, may well exceed $80 million. Contrast this with the casual remark of SPE’s lead IT officer made prior to the hack: “I will not invest $10 million to avoid a possible $1 million loss.”

Reports of other severe hacks dominate news headlines. From April to September 2014, Home Depot suffered a cyberattack that compromised 56 million credit and debit card numbers and some 53 million customer email addresses. Two months later, Partners Healthcare fell victim to a phishing expedition that stole 3,300 patient personal files (Phishing is a method of obtaining sensitive information by email impersonation). In January 2015, Anthem Blue Cross-Blue Shield lost personal information for more than 80 million consumers.

Even the Federal government is not immune. In June of this year the U.S. Office of Personnel Management revealed that personal data had been stolen for more than four million federal current and former employees. In August, the Internal Revenue Service admitted that a February 2015 hack, which mined data until it was discovered in May, stole data on almost three times the number of taxpayers than originally disclosed.

And it’s not just the U.S. government and large corporations that are targeted. It has been estimated that 71% of cyberattacks occur at businesses with fewer than 100 employees. The cost of such attacks can be extreme. The 2015 average cost of a data breach in the U.S. is approximately $217 per compromised record–up nearly 6% from 2014.

In this day of the Internet of Things, product developers are of concern as in January 2015, the Federal Trade Commission weighed in on data security for new products. The automotive industry offers a prime example of this need to consider cybersecurity in product development. Fiat Chrysler Automobiles NV recently recalled 1.4 million vehicles after researchers in product hacking showed an ability to a control a Jeep’s transmission (cutting engine power to wheels), stereo volume, windshield washers and wipers, air-conditioning and GPS, as well as disabling brakes, from a basement laptop 10 miles away. A 2015 U.S. Senate Report details vulnerability through some 50 separate electronic control units in internal vehicle computer systems. Even the cutting-edge Tesla Model S proved vulnerable to cyberattack at the August 2015 DEF CON hacker conference.

The devastating impact of these actual hacks, the potential damages from known hacking experiments and the lessons learned are a warning bell for executives. Those who believe data breaches are rare, or will not happen to them, are fooling themselves. With hacks now as common as a winter cold, the question is no longer “if,” but “when.” Any organization with an IT system needs to be sensitive to the potential of being hacked, and proactively act to protect itself. Indeed, it is predicted that increased cybersecurity project spending will exceed all other IT projects in 2015.

Of course, no protection plan is foolproof and no cybersecurity system is failsafe. Simple anti-virus personal security programs no longer effectively prevent any virus or worm infiltration but do act to decrease vulnerability and increase damage control. However, likelihood of a breach and the resulting damages can be diminished by taking responsible steps to secure one’s IT system.

What can be done? Consider the old axiom that “The surest defense is offense.” Applied to cybersecurity, it means management adopting a proactive position throughout the company, including a vigorous protection and response program incorporating active employee training and careful password protection, including multi-factor system access identifiers.

Management should also develop an Incident Response Plan (IRP) before a breach occurs. While no IRP will perfectly anticipate all issues stemming from a particular breach, it provides management a prospective look at IT vulnerability and the steps necessary to respond when the breach occurs. The IRP should also address notifications to send to third parties and government entities and, likely, the public. There currently is no national standard in the U.S., although legislation is proposed before the 114th Congress (2015-16).

Finally, the IRP must contemplate how to assess damage from the hack–from productivity to reputation loss, as well as direct costs incurred as the result of the breach. Preservation of data, chains of custody and documentation must be preserved, tracked and stored in a secure base.

This is no minor task. Rather, a comprehensive IT and data audit must be undertaken as the organization develops its IRP. Due to the comprehensive nature of this effort, it is critical that key leaders of the entity be involved in the decision making process. General counsel, as well as outside counsel familiar with cybersecurity issues, should be involved in development of the cybersecurity planning at the outset and particularly in the IRP process. For publicly held companies, this also means assuring board involvement.

Cybersecurity’s intellectual property focus is on the protection of trade secrets–customer/patient databases; personal information of customers, employees and vendors; product or service research and development; competitive product formulas, recipes and designs, computer algorithms, computer codes and any other of the vast array of valuable corporate treasure on hand. Much of this is “Bet the Company” types of information if breached.

Business owners–small and large–need to think like the bad guys and determine what attackers might want most. It could be intellectual property, trade secrets, customer lists, customer credit card information or perhaps a means to gain entrance into a larger client or customer. Assuming security codes are clean, it might make sense to outsource security operations to further protect small businesses.

Most important in minimizing the impact of a breach is the purchase of cyber-risk insurance for after-the-fact protection. Such insurance covers liability for exposing confidential information, payments for notifying customers of the breach, and providing customers with appropriate credit monitoring services. Policyholders cannot simply think the purchase of such insurance without more will protect them. For instance, IT service provider vendors must be evaluated to assure they meet appropriate cybersecurity practice standards required by insurers.

The lessons of the North Korean hack on SPE and the other examples mentioned above should stand for a long time. Unfortunately, too many companies share the same vulnerabilities as SPE, including lax and shoddy cybersecurity procedures, as well as a lackadaisical approach to employee training in cybersecurity issues. Hopefully, though, this high-profile hack job serves to open the eyes of business owners and motivates them to take preventative action.

Contact: Craig A. Marvinney

Across the nation and in Northeast Ohio, claims of unlawful shootings and excessive force are making headlines in alarmingly increasing numbers, resulting in heightened scrutiny of police policies and protocols related to the training of law enforcement officers and the use of force. Suddenly, Mayors, Police Chiefs and other city officials are finding themselves having to spend more time addressing public relations issues arising from such allegations, which can very quickly make a police department the focus of local, state and national news, if not subject to a Department of Justice investigation.

Legally speaking, when a claim of excessive force is asserted, the priority is to minimize, if not negate entirely, a city’s financial liability. Beyond money, however, the police department’s credibility and goodwill with the local community are at stake. Without appropriate action before an allegation of excessive occurs, the result could be a complete public relations nightmare.

The key to avoiding such a nightmare is proper planning. When a claim of excessive force is made, there can be demands placed on the police department and City Hall from a number of sources: TV cameras will be running; families will be demanding answers; news organizations will be making public records requests; and unions will be demanding fair treatment of the officers involved. At that point, public officials are so inundated that there is very little time to do anything but react; proactively managing the situation becomes difficult, if not impossible, without appropriate measures having been put into place long before the allegation arose.

There are things that can be done, however, to prepare a City and police force for such allegations, including:

  • Designate an appropriate spokesperson–typically the Police Chief or Mayor–as well as other members of administration in the absence of the lead spokesperson, to address the media and other community leaders in the event an allegation occurs.
  • Create preliminary “template” messages that can be used in the immediate aftermath of a potential crisis event. These messages can be used to respond to the onslaught of media inquiries before there is time to fully investigate the incident. These messages should be housed in a convenient location where they can be quickly and easily accessed and, if necessary, revised to fit the particular situation.
  • Determine how communications with family members of alleged victims will be handled. Will they be handled by press release or in person and, if so, by whom? What could and should be said in various circumstances? For example, is it appropriate to express regret or not?
  • Determine if there is a need to hire an outside crisis communications firm or if resources exist in-house to handle specific situations. Do your homework on outside crisis communication firms so that you have an immediate contact to call when an event occurs.
  • Carefully consider manpower needs and determine how the department will promptly and accurately handle the potentially large number of public records requests, which often include requests for personnel records, training records, 911 recordings, dashcam videos, etc.
  • Consult legal counsel to determine what is required to be released immediately, what can be delayed from release, and what is wholly exempt from release under Ohio Public Records Law.
  • Review and maintain copies of any internal procedures and relevant collective bargaining agreement provisions relating to conducting internal investigations of law enforcement personnel.
  • Provide up-to-date training for all personnel on use of force and firearm proficiency, search and seizure procedures, and community relations. Document all such training.
  • Train your police officers to recognize situations that could result in an excessive force claim to ensure that officers accurately complete the police report and follow all departmental policies and procedures with the processing of the crime scene, as the handling of the incident by the department will be heavily scrutinized if an allegation of excessive force is made.
  • Create a venue for officers to confidentially report the conduct of other officers that does not meet the standards of the department. This is an especially sensitive issue given the “family” culture that permeates most police forces and creates a sense of needing to protect or cover for fellow officers.

Finally, consideration should be given to creating a joint task force to make recommendations if an excessive force allegation occurs. This task force should be comprised of public officials such as the Mayor, Safety-Service Director, Police Chief, and/or Council members, as well as the local union leadership and non-profit and private sector community leaders. It is important to create the task force before an allegation of excessive force is made to ensure that there is ample time to outline not only the scope of the authority of the task force, but also how the task force will implement that authority. The use of such a task force can be controversial, but if comprised of the right individuals, it can be effective in fostering and, if necessary, repairing the relationship between the police department and the community.

Locally, we don’t have to look far to see the real world impact of charges of excessive force. Cities such as Cleveland and Cincinnati are currently under increased scrutiny due to claims of unlawful shootings and excessive force. Even smaller cities and municipalities, however, can be subject to such claims as it only takes one incident to put a department in the spotlight. If that happens, a huge amount of time and resources will be required to address the immediate aftermath, but once the dust settles and things calm down, the ramifications of the allegation remain: lawsuits may be filed, criminal investigations and trials may occur, jobs may be lost, and reputations may be irreversibly damaged. Appropriate planning and training not only may minimize the impact if an excessive force allegation is made; they may prevent such an allegation from occurring in the first place.

Contact: Susan Keating Anderson

$225 million Orange Village mixed-use project enters initial phase

Despite numerous challenges, Walter | Haverfield client Fairmount Properties is now entering the first phase of development for its $225 million Pinecrest mixed-use real estate project in Orange Village. The vision for Pinecrest dates back to 2013 when Fairmount first started putting plans in place for the 58-acre project that will include 400,000 square feet of retail and restaurant space, 90 new apartments and 150,000 square feet of office space linked to a 120-room hotel and parking garage. The first phase of construction involving the demolition of 31 homes in Orange Village began in August of this year.

Pinecrest is far from being an ordinary commercial real estate project. Fairmount (with the help of the Walter | Haverfield real estate legal team) had to negotiate with more than 30 individual property owners who, until recently, called the area of the Pinecrest project their home. These properties, each with its unique set of difficulties, needed to be demolished to make room for the new shopping/lifestyle project.

Complicating matters was the fact that Orange Village has placed a number of restrictions on the project, including a “no poaching” restriction that limits the developer’s right to lease to certain retailers already doing business in the region. In addition, a 30-foot mound must be built to protect area homeowners from the noise and viewing restrictions created by Pinecrest.

Project financing was additionally complicated by the use of tax increment financing (better known as a TIF). In order to receive approval for the TIF, Fairmount had to negotiate with Orange Village and the local school district to cover the necessary funding for the project’s infrastructure.

Walter | Haverfield has served as lead counsel on the project since 2013, overseeing all of the leasing and most of the financing and joint venture work, as well as closing on the option agreements with the numerous property owners. At one point during the process, as many as 19 properties were closing on the same date. Negotiations with prospective tenants are ongoing.

The grand opening for Pinecrest is projected for the spring of 2017.

Contact: Kevin Patrick Murphy

Ever since the Ohio constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and determined that based on the consumer price index (CPI), Ohio’s minimum wage rates will stay the same in 2016.

Ohio’s minimum wage is currently $8.10 per hour for regular hourly employees. The minimum wage for tipped employees is $4.05 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $297,000 or less per year or (ii) 14- and 15-year-olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. The federal minimum hourly wage is currently $7.25.

The new poster is available by clicking here.

For more information on this or other employment law issues, please contact one of our employment lawyers.

The U.S. Department of Labor’s (DOL) new overtime rule for white collar exemptions is now expected to be published around July 2016, according to the DOL’s Fall 2015 Semi-Annual Regulatory Agenda. On June 30, 2015, the DOL issued its proposed overtime rule for white collar exemptions. Once the final rule is published, the compliance timeline for employers will begin.

The DOL’s proposed rule almost doubled the minimum salary amount required for employees to be exempt as an executive, administrative, or professional employee. The proposed rule recommended the salary threshold for the exemption be increased from the current $455/week or $23,660/year to $970/week or $50,440/year. Further, while the DOL did not propose any changes to the “duties” test in June, it did invite comments on that topic. As such, it would not be much of a surprise if changes are made in the final rule to the “duties” test as well.

It is expected that employers will have at least 60 days to comply once the final rule is published.

In late December 2015, Governor John Kasich signed a law that prohibits public employers, including townships, villages, municipal corporations, and public school districts, from asking questions about an applicant’s criminal background on their job applications. Under the new law, the Fair Hiring Act, public employers are permitted to conduct background checks, but they can only do so later in the application process. The law takes effect March 23, 2016.

Under the new law, public employers will not be allowed to ask applicants about past criminal convictions on written job applications. It is permissible, however, for a public employer to include a general statement on the written application regarding criminal offenses which may preclude employment under the law (e.g., disqualifying offenses in the public school setting). Further, public employers will have the opportunity to inquire about an applicant’s criminal background later in the process, and public employers will not be prohibited from taking an applicant’s criminal history into account when deciding whether to hire an employee. Public employers, however, will face increased scrutiny about the manner in which they use the criminal background check information when making decisions regarding employment. Thus, public employers might want to consider the Equal Employment Opportunity Commission’s guidance that any decisions based on an applicant’s background, should be job related and consistent with business necessity.

There is some speculation as to whether the law applies to municipal corporations under the Home Rule Amendment to the Ohio Constitution. The issue is whether the law addresses a “matter of local self-government.”

In addition, the new law includes an amendment to Ohio Civil Service Law. Public employers are now clearly prohibited from using a felony conviction against a current classified officer or employee unless the conviction occurs while the classified officer or employee is employed in the civil service. If, however, the classified officer or employee is convicted of a felony while employed in a classified position, the employee may be removed from his or her position.

The new law does not apply to private employers.

By Benjamin G. Chojnacki and Stephen L. Byron.andnbsp;

On January 26, 2016, the Ohio Supreme Court decided State ex rel. Cornerstone Developers, Ltd. v. Greene Cty. Bd. of Elections,
Slip Opinion No. 2016-Ohio-313. In the case, the Court ordered the
Greene County Board of Elections to remove a tax levy from the March
2016 ballot because the Sugarcreek Township Board of Trustees failed to
follow the statutory procedure for placing the question of a tax levy on
the ballot.

Chapter 5705 of the Ohio Revised Code establishes
the procedure for placing a statutory tax levy on the ballot. First, a
taxing authority must pass a “Resolution of Necessity” asking the county
auditor to certify the current tax valuation of the political
subdivision. After receiving the auditor’s certification, a taxing
authority must pass a separate “Resolution to Proceed” submitting the
question of the tax to the voters. The taxing authority must certify the
“Resolution to Proceed” to the county board of elections at least
ninety (90) days prior to an election.

Instead of following the
statutory procedure, Sugarcreek Township’s Board of Trustees passed
legislation making a finding that the taxes that ‘may be raised within
the 10 mill limitation will be insufficient’ and declared the necessity
for an additional levy. The Trustees transmitted this legislation to the
county board of elections and the tax levy was placed on the ballot.

Developers challenged the tax levy’s placement on the ballot because
the Board of Trustees failed to pass a Resolution to Proceed and failed
to certify such resolution to the county board of elections at least
ninety days prior to the election. The Ohio Supreme Court recognized
this to be a fatal flaw, and ordered the tax levy removed from the March
2016 ballot.

Cornerstone Developers
is significant because it demonstrates that omnibus tax levy
legislation is insufficient to satisfy Chapter 5705. Instead, a taxing
authority must pass both a “Resolution of Necessity” and a “Resolution
to Proceed,” then timely certify the “Resolution to Proceed” to the
county board of elections at least ninety (90) days prior to the

If you have questions about Cornerstone Developers,
or any other public law matters, please contact Benjamin G. Chojnacki,
Stephen L. Byron or any of the attorneys in Walter | Haverfield’s Public
Law Group.

On January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued guidance for businesses where two or more separate entities each have relationships with the same workers. The guidance addresses when businesses will be considered to be joint employers and, therefore, may be jointly liable for violations of the Fair Labor Standards Act (“FLSA”) which governs employer pay practices. The guidance also impacts the calculation of overtime because time worked for separate entities may be added together in order to determine the amount of hours an employee works each week, thus giving rise to potential overtime claims.

The guidance was issued in the form of an Administrator’s Interpretation (“AI”) of the law. While it does not have the force and effect of the law, it does reflect the WHD’s position on the issue. Moreover, courts often rely on the WHD’s interpretation when making rulings.

The WHD guidance addresses what it calls “horizontal” and “vertical” joint employment scenarios. WHD states that joint employment may exist when two or more employers each separately employ an employee and are sufficiently related to each other with respect to that employee. The WHD calls this type of joint employment horizontal joint employment. In this scenario, an employee may perform separate work for each employer. The focus is on the relationship between or among the two or more employers.

The second type of joint employment is what WHD refers to as a vertical joint employment. This occurs when an employee of one employer is also economically dependent on another employer. This type of joint employment typically occurs when a company has contracted for workers that are directly employed by another business. This type of relationship might be one between a contractor and general contractor or a staffing agency and the business for which it provides employees.

Defining a Horizontal Joint Employer Relationship

In determining whether there is a horizontal joint employer relationship, the guidance sets forth facts that may be relevant when analyzing the degree of the association between, and sharing of control by, potential joint employers. These factors are:

  • Who owns the potential joint employers (i.e., does one employer own part or all of the other or do they have common owners);
  • Do the potential joint employers have any overlapping officers, directors, executives, or managers;
  • Do the potential joint employers share control over operations (e.g., hiring, firing, payroll, advertising, overhead costs);
  • Are the potential joint employers’ operations intermingled (for example, is there one administrative operation for both employers, or does the same person schedule and pay the employees regardless of which employer they work for);
  • Does one potential joint employer supervise the work of the other;
  • Do the potential joint employers share supervisory authority for the employee;
  • Do the potential joint employers treat the employees as a pool of employees available to both of them;
  • Do the potential joint employers share clients or customers; and
  • Are there any agreements between the potential joint employers.

The guidance provides the following as an example of what it considers to be horizontal joint employment:

An employee is employed at two locations of the same restaurant brand. The two locations are operated by separate legal entities (Employer A and Employer B). The same individual is the majority owner of both Employer A and Employer B. The managers of each restaurant share the employee between the locations and jointly coordinate the scheduling of the employee’s hours. The two employers use the same payroll processor to pay the employee, and they share supervisory authority over the employee. WHD concludes that these facts are indicative of a horizontal joint relationship between Employers A and B.

Defining a Vertical Joint Employer Relationship

The focus in vertical joint employment cases is whether one employer is economically dependent on the other employer. The guidance suggests that when conducting a vertical joint employment analysis, WHD will rely on the economic realities test, which includes an analysis of multiple factors including the following:

  • Who directs, controls or supervises the work performed;
  • Who controls the employment conditions;
  • Whether there is a permanent or long-term relationship;
  • Whether the work is repetitive and rote (rote, repetitive and unskilled work indicates economic dependence);
  • Whether the employee’s work is an integral part of the potential joint employer’s business;
  • Whether the work is performed on the premises of the potential joint employer; and
  • Whether the potential joint employer performs administrative functions such as payroll and workers’ compensation insurance, providing necessary facilities and safety equipment, tools and materials.

WHD provides the following example of what it contends is a vertical joint employer relationship:

A laborer is employed by Company A, which is an independent subcontractor to Company B. Company A was engaged to provide drywall for the project. Company A hires and pays the laborer. Company B provides the training on the project, the necessary equipment and materials, workers’ compensation insurance, and is responsible for the health and safety of the worker. Company B also reserves the right to remove the worker from the project and both companies supervise the worker. WHD contends that these facts are indicative of a vertical joint employment relationship.

In addition to providing the guidance by way of the AI, WHD issued QandAs, diagrams, and new fact sheets [ Administrator’s Interpretation; Joint Employment AI Questions and Answers; Graphical Illustration of “Vertical” Joint Employment; Graphical Illustration of “Horizontal” Joint Employment; Fact Sheet-Joint Employment Under the FLSA and MSPA; Fact Sheet: Joint Employment and Primary and Secondary Employer Responsibilities Under the FMLA.] All of these items are available at the DOL website.

Employers Need to Carefully Consider Their Relationships or Face Consequences

The bottom line – businesses that are related in any manner need to take note of this important guidance. WHD has made very clear that joint employer relationships under the FLSA should be defined broadly. While the guidance issued by WHD does not have the force of law, courts often rely on WHD’s interpretation of the law when making decisions. Equally important is the signal that WHD intends to aggressively examine joint employment relationships when conducting investigations. A mistake in this area, intentional or not, may give rise to substantial economic and other consequences. There may be liability for joint employers for overtime, liquidated damages, penalties, attorneys’ fees, and even possible criminal charges.

On February 1, 2016, as employers wrapped up employee W-2s for the year, the U.S. Equal Employment Opportunity Commission (EEOC) published proposed additions to EEO-1 data reporting for employers. In a joint effort with the Department of Labor and Office of Federal Contract Compliance Program (OFCCP), the EEOC seeks to gather employee wage data to assist with prevention of pay discrimination and enforcement of anti-discrimination laws. According to the EEOC, the proposal is based on its work with the President’s National Equal Pay Task Force and recommendations from various studies, including a National Academy of Sciences report, an EEOC Pilot Study, and work groups.

Under federal law, the EEOC and OFCCP require data collection by many private employers and federal contractors, submitted annually through the EEO-1. Currently, certain employers are required to report employee data based on sex, seven race and ethnicity categories, and ten job categories. Among other things, the proposal seeks to require private employers, with 100 or more employees, to collect and report data on employee W-2 earnings and hours worked. Under the proposed rule, Employers would need to identify the number of employees by ethnicity, race and gender whose earnings fall within the twelve specific pay bands. This information would then be used for aggregated data for statistical analysis by the EEOC and OFCCP. The EEOC and OFCCP are hopeful that the data will aide in employer self-monitoring and voluntary compliance in addressing pay inequities.

The OFCCP previously sought to collect wage data from federal contractors under a 2014 proposal. Public comments on the 2014 proposal flagged a lack of agency coordination, the burden of compensation data reporting, as well as privacy and confidentiality concerns.

The EEOC and OFCCP claim that the proposed reporting would pose minimal burden on employers because the requested data is “pay data that employers maintain in the normal course of business,” referencing employees’ W-2s and hours worked. Employers, however, will likely view the proposed requirements in a different light. The EEOC claims that this new data collection should be relatively easy for employers to retrieve due to the availability of software, but that’s yet to be seen. And, employers typically do not keep track of hours worked for non-exempt employees. As such, it is not clear how such information would be reported. The proposal will also likely be viewed as excessively intrusive into private employers’ business information. Finally, employers may also have concerns about confidentiality.

Should the proposal result in a final enforceable rule, it would not go into effect until the 2017 EEO-1 reporting cycle. The proposal is available here for review and public comments until April 1, 2016.

It has been reported that on February 17, 2016, U.S. Solicitor of Labor, Patricia Smith, announced at an American Bar Association conference that the white-collar exemption regulations will be published in July 2016, with an effective date 60 days after publication. When the U.S. Department of Labor last revised the exemptions, which was in 2004, the regulations became effective 120 days after publication.

For more information on the proposed rule, see “Changes to Exemptions from Overtime Rules Expected in July 2016.”

For the first time since 1998, the EEOC released proposed guidance regarding workplace retaliation that would supersede the EEOC Compliance Manual, Volume II, Section 8: Retaliation. The guidance is intended to educate the public on how the EEOC approaches charges, determinations, and litigation considerations involving the most frequently alleged EEOC violation – retaliation. However, the guidance, which was published for public opinion on January 21, 2016, does not simply apply and explain current law. Rather, it essentially redefines retaliation and leaves open the door for increased retaliation lawsuits and unfavorable decisions for employers.

Workplace retaliation has historically revolved around adverse actions taken by an employer (or employment agency, or labor organization) against a covered individual because of the individual’s engagement in a protected activity. The proposed guidance continues to require protected activity and adverse action as two elements of a retaliation claim; however, the proposal expands the definition of protected activity, redefines adverse action, and virtually rewrites the standard for a causal connection between the two.

If the guidance is finalized unchanged, according to the EEOC, protected activity would encompass any activity that the employee subjectively believes is unlawful, as long as the employee’s belief is not “patently specious.” The definition also expands oppositional activity to include an individual who accompanies a coworker to make a complaint. The EEOC would also include participation activity, regardless of its truth or validity, as protected. For example, an employee would not have to have a reasonable, valid allegation, nor tell the truth during an EEOC investigation, to still retain protection and thus remain secure from employer disciplinary actions. The guidance even goes on to acknowledge its contradiction with many courts (including that of the Sixth Circuit, which covers Ohio), which do not include internal EEO investigations and harassment complaints as covered protected activity unless an EEOC charge is filed.

Reinforcing its historic opinion, the EEOC expands “adverse action” to include “any action that might well deter a reasonable person from engaging in protected activity.” This goes beyond work-related activities to encompass actions that have “no tangible effect on employment, or even an action that takes place exclusively outside of work.” Therefore, a retaliation claim could be made for employer action that, in fact, results in no harm whatsoever. The EEOC also adopts the “zone of interest” concept to allow for third parties to bring claims (i.e. an adverse action against an individual for a family member’s protected activity).

Perhaps most troubling for employers, this EEOC guidance goes beyond mere suggestion that direct evidence of a causal nexus between a protected activity and adverse action is no longer necessary. The guidance states that “a ‘convincing mosaic’ of circumstantial evidence that would support the inference of retaliatory animus” would be sufficient to demonstrate causal connection. For example, retaliatory conduct could be found years after protected complaint participation based on suspicious timing of the employer’s action, and even comparative evidence regarding treatment of other employees could be used to support an inference of retaliatory conduct. Also, retaliation would not have to be the sole cause of an adverse action, rendering a mixed motive defense useless.

The EEOC guidance also includes what it considers “best practices” for reduction of retaliatory conduct in the workplace.

If the EEOC guidance is finalized, employers should be attentive to its content and mindful in dealings with individuals who are involved in any “protected activity,” keeping in mind that “protected activity” will be construed broadly.

Earlier this month, the Internal Revenue Service (IRS) issued an alert to payroll and human resources professionals to be aware of a phishing email scheme that purports to be from company executives and requests personal information on employees. Several of our clients have been victimized by this scam.

Payroll and Human Resource Professionals should ensure the request for information is valid before sending any information via electronic mail. You can review the IRS alert here.

On March 14, 2016, the U.S. Department of Labor’s Wage and Hour Division sent its proposed final rule revising the overtime regulations to the Office of Management and Budget (OMB). This review typically takes between 30 and 90 days. Once the final rule clears OMB review, it will be published in the Federal Register. Based on this new timetable, it’s possible that the Final Rule could be effective as early as June 2016.

On March 28, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a 30-day notice in the Federal Register seeking public comment on proposed changes to Form I-9, Employment Eligibility Verification. The public may comment on the proposed changes for 30 days, until April 27, 2016. After the 30-day comment period ends, USCIS will consider public comments and make changes to Form I-9 which it deems appropriate. The Office of Management and Budget (OMB) will then review and approve the information collection. The revised I-9 Form will be posted on the USCIS website along with instructions.

USCIS further directed employers to continue using the current version of Form I-9 until USCIS posts the new form on its website.

According to USCIS, many of the proposed changes to Form I-9 were designed to reduce technical errors and help customers complete the form on their computers after they have downloaded it from the USCIS website. USCIS made revisions to the original proposed form after receiving comments during the 60-day notice period.

USCIS reports that key changes to the form include:

  • Validations on certain fields to ensure information is entered correctly
  • Additional spaces to enter multiple preparers and translators
  • Drop-down lists and calendars
  • Embedded instructions for completing each field
  • Buttons that will allow users to access the instructions electronically, print the form, and clear the form to start over
  • A dedicated area to enter additional information that employers are currently required to notate in the margins of the form
  • A quick-response matrix barcode, or QR code, which generates once the form is printed and can be used to streamline audit processes
  • A requirement that employees provide only other last names used in Section 1, rather than all other names used
  • Removal of the requirement that aliens authorized to work must provide both their Form I-94 number and foreign passport information in Section 1
  • The separation of instructions from the form, in keeping with USCIS practice
  • The addition of a Supplement in cases where more than one preparer or translator is used to complete Section 1

What employers should do now: Continue to use the I-9 Form on the USCIS website and watch for updates on the release of the revised I-9 Form in the coming months.

On May 2, 2016, the U.S. Equal Employment Opportunity Commission issued a new “Fact Sheet” on bathroom access rights for transgender employees. The agency warned employers that discrimination based on an employee’s transgender status is sex discrimination under federal law. The Fact Sheet reflects the EEOC’s position that employers are prohibited from preventing an employee from using a bathroom corresponding to the employee’s gender identity. The Fact Sheet further reflects the EEOC’s position that an employer may not condition the right to use a restroom corresponding to the employee’s gender identity on the employee undergoing, or providing proof of, surgery or any other medical procedure to demonstrate the employee’s gender. The EEOC also takes the position that an employer cannot restrict a transgender employee to a single-user bathroom unless the employer makes a single-user restroom available to all employees who might choose to use it.

While the EEOC’s Fact Sheet is not the law, it does provide employers with the EEOC’s position on this issue. As such, employers should be mindful when making decisions regarding use of restrooms and locker rooms.

You can read the EEOC Fact Sheet here.

In Tuesday’s much-anticipated decision, the Ohio Supreme Court held that an email exchange between a majority of board members may qualify as a meeting under Ohio’s Open Meeting Act. The plaintiff, a board member who conducted an independent inquiry into allegedly improper athletic expenditures, voted against a proposed board policy that would have limited similar future investigations. After a newspaper editorial praised the dissenting board member, his four colleagues collaborated on a formal response to the editorial, but did so by email and without his involvement. The board president submitted the final response to the paper, signing consent to its publication in his official capacity.

The plaintiff then sued the board and its individual members, alleging that the email collaboration violated the Open Meeting Act, which requires board meetings to be open to the public. In response, the board publicly ratified its previous response to the paper and denied any violations. Both the trial and appellate courts held against the plaintiff, finding that sporadic emails do not constitute a meeting, especially as no resolution was pending at the time.

The Ohio Supreme Court disagreed. A meeting, the Court explained, is any prearranged discussion and does not have to occur face to face. It can take place telephonically, by video conference, or electronically, by email, text, or tweet. Categorically excluding email communications from the Open Meetings Act, the Court emphasized, would subvert the Act’s purpose. Citing to case law from other states, the Court also noted that by ratifying its response, the board retroactively made the previous discussions a matter of public business under the law.

Aside from granting plaintiff permission to continue his suit, this decision also cautions Ohio board members to avoid prearranged public business discussions in any medium. Especially if the communications involve a quorum, the board risks violating Ohio law and should table the discussion until a formal session can be convened. Although the exact contours of this decision have yet to be clarified, for now it is better to be safe than sorry.

While Ohio has not addressed the issue yet, the nationwide trend of
affording protections to transgender students under Title IX of the
Education Amendments of 1972 continues. On April 19, 2016, the U.S.
Court of Appeals for the Fourth Circuit ruled on a transgender high
school boy’s motion for a preliminary injunction. See G.G.ex rel. Grimm v. Gloucester Cty. Sch. Bd.,
4th Cir. No. 15-2056, 2016 WL 1567467 (Apr. 19, 2016). The student
sought to use the boys’ restroom after his school district adopted a
policy requiring students to use the restroom or locker room of their
biological gender. The district also allowed the alternative of using a
private facility for individuals with gender identity issues. The
student had initially been permitted to use the boys’ restroom for
several weeks before this policy was implemented. After the policy was
implemented, the student was no longer permitted to use the boys’

The student sued the school board under the Equal
protection Clause and Title IX of the Education Amendments of 1972
(“Title IX”) challenging the school board’s policy. The student
requested a preliminary injunction which would permit him to use the
boys’ restroom during the pendency of the case. The school district
filed a motion to dismiss the lawsuit. The U.S. District Court for the
Eastern District of Virginia denied the injunction request and dismissed
the student’s Title IX claims. The student appealed to the U.S. Court
of Appeals for the Fourth Circuit.

In a 2-1 split decision, the
Fourth Circuit vacated and reversed the decision of the lower court and
remanded the case for further proceedings. The Fourth Circuit reasoned
that the statute allowing for gender specific restrooms is ambiguous as
it relates to transgender students. Consequently, the Department of
Education’s interpretation of Title IX, which treats students in a
manner consistent with their gender identity, is the standard that the
district court must apply. The case was remanded to the district court
with instructions to give deference to the Department of Education’s
interpretation. The school district has requested an en banc review of the decision.

this decision is not mandatory authority in Ohio, it continues a trend
toward protections for transgender students. In addition to
restroom/locker room issues, districts should be mindful of requests for
name changes (both in everyday practice and on official educational
records); athletic team participation; rooming arrangements for students
while on school sponsored trips; and gown color in graduation
ceremonies. Due to the increasing prevalence of issues regarding
transgender students, it is advisable for school districts to
proactively manage these situations to decrease the likelihood that they
result in discrimination complaints. The National School Boards
Association has published a frequently asked questions guide for school
districts which addresses a wide range of issues. School districts
should proceed carefully when addressing transgender issues given that
the legal standards in this area continue to evolve.

On Tuesday, the Ohio Supreme Court held that an email exchange between a majority of school board members may qualify as a meeting under Ohio’s Open Meetings Act. The plaintiff, a board member who conducted an independent investigation into alleged improper expenditures by two athletic directors within the school district, voted against a proposed board policy that would have limited similar future investigations. A newspaper editorial praised the plaintiff – the dissenting board member.

Once the editorial was published, and at the direction of the board president, plaintiff’s four other colleagues on the board and several district staff members collaborated on a formal response to the editorial. However, they did so by email and without plaintiff’s involvement. The board president submitted the final response to the paper, signing it in his official capacity.

The plaintiff then sued the board and its individual members, alleging that the email collaboration violated the Open Meetings Act, which requires board meetings to be open to the public. In response, the board publicly ratified its previous response to the paper and denied any violations. Both the trial and appellate courts held for the defendants, finding that sporadic emails do not constitute a meeting because there was no rule or resolution pending before the board.

The Ohio Supreme Court disagreed. The Court explained that the Open Meetings Act prohibits any private prearranged discussion of public business by a majority of the members of a public body regardless of whether the discussion occurs face to face, telephonically, by video conference, or electronically by email, text, tweet or other form of communication. The Court emphasized that categorically excluding email communications from the Open Meetings Act would subvert the Act’s purpose. The Court also noted that by ratifying its response to the paper, the board retroactively made the previous discussions a matter of public business under the law.

Aside from granting plaintiff the ability to proceed with his lawsuit, this decision also cautions public officials to avoid prearranged public business discussions in any medium, especially if the communications involve a quorum. By conducting such discussions, a public body risks violating the Open Meetings Act. Such discussions should wait until an open meeting can be convened.

If you have any questions about this decision, please contact a member of Walter | Haverfield’sandnbsp;Public Law group.

On April 26, 2016, the United States Department of Labor (DOL) issued a guide to assist employers required to comply with the Family and Medical Leave Act (FMLA). This guide is similar to the guide issued several years ago for employees. The guide is 76 pages long and is quite comprehensive. A copy of the guide is available here.

The guide is a good tool for employers and serves as notice as to how the DOL views certain issues arising under the FMLA. The guide includes seven chapters:

  1. Covered employers under the FMLA and their general notice obligations;
  2. When an employee needs FMLA leave;
  3. Qualifying reasons for leave;
  4. The certification process;
  5. Military family leave;
  6. During an employee’s FMLA leave; and
  7. FMLA prohibitions.

The guide also includes a section titled “Did you know?,” which addresses some of the more technical provisions of the FMLA.

While the guide may assist employers in understanding some of the complexities of the FMLA, it does not have the force of law. Rather, the guide is a reflection of the DOL’s position on particular issues. Accordingly, it is important to seek assistance from legal counsel to distinguish between the DOL’s position and the law.

The DOL also published a new FMLA poster which is available here. The new poster contains most of the same information published on the previous poster, although it is organized differently. Employers should post the new poster in a conspicuous place where employees and applicants for employment can see it.

On May 13, 2016, the United States Department of Education (“DOE”)
and the United States Department of Justice (“DOJ”) issued guidance to
educational institutions that receive federal financial assistance
regarding the rights of transgender students under Title IX. This
guidance comes on the heels of a decision by the Fourth Circuit Court of
Appeals regarding this issue.

joint Dear Colleague Letter and press release make clear that schools
are required to treat students in a manner consistent with the student’s
“gender identity.” Gender identity is defined in the Dear Colleague
Letter as “an individual’s internal sense of gender” and may differ from
the person’s sex assigned at birth. When a student, or parent, notify a
school that a student is transgender, even without a medical diagnosis,
treatment records, birth certificate, etc., the school is obligated to
treat the student consistent with the student’s gender identity.
The Dear Colleague Letter makes clear that it is the position of the
DOE and DOJ that gender identity is protected under Title IX of the
Education Amendments of 1972. Essentially, the student’s “gender
identity” equates to the student’s sex for Title IX purposes. Hence,
according to the DOE and DOJ, discrimination on the basis of gender
identity is prohibited by Title IX.

The Dear Colleague Letter
indicates that treating a student in a manner consistent with his/her
gender identity includes, but is not limited to, utilizing the name the student has selected
that is consistent with his/her gender identity. For example, if a
student’s gender identity is female, and the student adopts a female
name and asks to be addressed using the feminine pronoun, school
officials must comply with the student’s request. Failure to do so could
constitute sex-based harassment that is actionable under Title IX. Any
alleged harassment of a transgender student based on the student’s
gender identity must be handled under the district’s Title IX harassment

With respect to restrooms and locker rooms,
the Dear Colleague Letter states that a transgender student must be
permitted to use the restroom and/or locker room that corresponds with
the student’s gender identity. A school may not require a transgender
student to utilize a restroom or locker room that is inconsistent with
the student’s gender identity. Further, while a school district can
offer the use of a private restroom or locker room to all students,
mandating that a transgender student utilize this option would
constitute a violation of Title IX. The Dear Colleague Letter states “as
is consistently recognized in civil rights cases, the desire to
accommodate others’ discomfort cannot justify a policy that singles out
and disadvantages a particular class of students.”

The Dear Colleague Letter also addresses housing and overnight accommodations.
The guidance states that school districts must allow transgender
students to access housing consistent with their gender identity and may
not require transgender students to stay in single-occupancy
accommodations. Further, school districts may not disclose personal
information (e.g., the student’s transgender status) when such
disclosures are not required of other students. This guidance will
impact school districts with respect to school-sponsored overnight

The educational records
of transgender students are also addressed by the Dear Colleague
Letter. Although nothing in the Dear Colleague Letter mandates that
school districts amend a student’s educational records to reflect the
student’s gender identity, it does stress the importance of maintaining
the confidentiality of these records in accordance with FERPA.
Additionally, the Dear Colleague Letter clarifies that if an eligible
transgender student or the student’s parent request that the student’s
records be amended, the request must be handled in accordance with the
school district’s policy for amending or correcting educational records
pursuant to FERPA. If an eligible student or parent complains about the
school district’s handling of a request to amend or correct educational
records, the complaint must be handled under the district’s Title IX
grievance procedures.

The Dear Colleague Letter covers additional
topics such as athletics, single-sex schools, single-sex classes and
social fraternities/sororities. The guidance also references additional
resources to give schools and parents the “tools they need to protect
transgender students from peer harassment and to identify and address
unjust school policies.” Additionally, while the Dear Colleague Letter
does not endorse any specific policy regarding transgender students, it
references an extensive guidance document entitled Examples of Policies and Emerging Practices for Supporting Transgender Students. School districts are urged to review these policy options.

Dear Colleague Letter indicates that it “does not add requirements to
applicable law” but rather “provides information and examples to inform
recipients about how the Departments evaluate whether covered entities
are complying with their legal obligations.” However, some are viewing
this guidance as a significant departure from past interpretations of
Title IX. Subject to any further revisions or outcomes of potential
legal challenges, the guidance is the current position of the DOE and
DOJ. Failure to comply with the guidance in the Dear Colleague Letter
may result in the loss of federal financial funding.

The National
School Boards Association has published a frequently asked questions
guide for school districts which addresses a wide range of issues
relating to transgender students which will be updated in light of the
new guidance. School districts should continue to proceed carefully when
addressing transgender issues and give substantial consideration to
this new guidance given that the potential consequences can be extreme
(e.g. potential loss of federal funding, etc.). Stay tuned as the legal
developments in this area continue to evolve.

On May 11, 2016, nearly two hundred public employees and members of the business community gathered at Lorain County Community College to help the Ohio EPA explore ways to repurpose material dredged from Lake Erie’s harbors. The “Dredged Material: Make It Your Business – Digging up Ideas Workshop” included brainstorming sessions where participants debated new ideas for using dredged material and overcoming the financial, technical, and regulatory obstacles to such use.

Each year, 1.5 million cubic yards of material is dredged from the federal navigation channels along Ohio’s Lake Erie shoreline to allow the movement of commodities and vessels. Historically, dredged material, which is typically comprised of loose sand, clay, silt and soil particles, was treated as a waste and either disposed of in a specialized landfill or dumped in the open waters of Lake Erie. Due to the passage of Ohio Senate Bill 1 in 2015, however, open-lake disposal will be prohibited after July 1, 2020. This gives the Ohio EPA less than five years to find alternative environmentally-friendly ways to use, recycle, or otherwise dispose of the material.

At the May 11, 2016 workshop, Ohio EPA Director Craig Butler’s opening remarks made clear that protecting Lake Erie from contamination and over-sedimentation is a priority, but that finding alternate uses for dredged sediment poses a unique challenge. Governments and businesses already use the material for beach/near shore nourishment, habitat creation or restoration, landscaping, road construction, landfill cover, and brownfield and other land reclamation. Other industrial uses include making useful products such as topsoil, concrete and concrete-based goods, brick, block and other construction materials. The challenge is to find additional productive and economically beneficial ways to use the material.

The Ohio EPA is developing a regulatory program which is expected to include a business-friendly permitting process and incentives to encourage the use of dredged material. Once issued, the proposed rules will be subject to formal public comments and a hearing before being finalized. Interested parties are encouraged to participate in the rulemaking process.

As part of the State’s push to develop innovative uses for dredged sediment, grant money is being offered by the Ohio Lake Erie Commission for projects that develop business models for utilizing dredged material, removing economic barriers to such use, increasing public awareness and acceptance of the value and/or potential uses of dredged material, or developing processes for intercepting and capturing sediment to minimize the need for dredging. Grant applications must be submitted by June 10, 2016. If you would like further information regarding this funding opportunity or the use of dredged materials as a potential low cost substitute for fill material in construction projects or other applications, please contact Leslie G. Wolfe at (216) 928-2927 or

You can read more about the Ohio EPA’s Lake Erie Dredged Material Program here.

The U.S. Department of Labor Wage and Hour Division (DOL) published the highly anticipated final rule revising the overtime regulations today. The rule revises the regulations defining which white collar workers are eligible to receive overtime pay for hours worked over 40 in a workweek under the Fair Labor Standards Act (FLSA). The final rule, which increases the annual salary threshold for white collar workers from $23,660 to $47,476 or from $455 to $913 per week, is more than double the current minimum salary for the overtime exemption but is less than the anticipated increase, which was proposed to be $50,440 per year or $970 per week. As expected, the rule includes, for the first time, an automatic-escalator for the salary threshold to keep pace with inflation.

The final rule also sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to $134,004 – the annual equivalent of the 90th percentile of full-time salaried workers nationally. The DOL explained that this threshold “was designed to ease the burden on employers in identifying overtime eligible employees since it is more likely that workers earning above this high salary perform the types of job duties that would exempt them from overtime requirements.”

The final rule also establishes an “automatic-escalator,” which is a mechanism for the DOL to automatically update the salary and compensation levels of the rule every three years to maintain the levels at the 40th percentile of full-time salaried workers in the lowest income region of the country. The DOL states that the purpose of the escalator is to ensure that the rule continues to provide useful and effective tests for exemption. The three-year adjustments will occur on January 1, beginning in 2020.

The DOL, however, offered some relief for employers. The final rule does not include any changes to the duties test. The DOL also made it clear that employers may count bonuses and commissions toward as much as 10% of the salary threshold.

As we reported earlier, this is all part of President Obama’s agenda to raise wages and increase the number of employees eligible for overtime pay. It will surely have a considerable impact on employers and employees.

While it is expected that business groups will urge their legislators to defund or otherwise block the rule, employers should begin preparing now for the new rule if they haven’t already. The clock is ticking – employers will have until December 1, 2016 to comply with the new rule.

The DOL Fact Sheet addressing the new rule can be viewed here.

House Bill 523 legalizes medical marijuana in Ohio, but the substantial policy change has minor implications for Ohio employers, for now.

The legislation, signed by Governor Kasich on June 8, authorizes a licensed physician to recommend medical marijuana to an individual diagnosed with one or more of 20 qualifying conditions or diseases. An individual with a valid recommendation may legally consume medical marijuana dispensed as oil, edibles, and patches. Smoking and growing marijuana are prohibited under House Bill 523. Starting on September 6, 2016, the possession and authorized consumption of medical marijuana will not be prosecuted.

House Bill 523 establishes a Medical Marijuana Control Commission to regulate medical marijuana dispensaries, training and qualification of physicians, and the licensing of growers. Until Ohio’s dispensaries are up and running, Ohioans must travel to other states to obtain medical marijuana.

Effect on Employers

House Bill 523 minimally impacts Ohio employers. The legislation sets forth clear safeguards that allow employers to maintain drug-free workplace programs and reasonable human resources policies. The law does not distinguish between public or private employers. Ohio employers are protected by the following provisions of the law:

  • Employers are not required to permit or accommodate an employee’s use, possession, or distribution of medical marijuana;
  • House Bill 523 does not authorize an employee to sue his or her employer for an adverse employment action taken related to medical marijuana. Additionally, employers may refuse to hire, discharge, discipline, or otherwise take adverse employment action against an individual due to his or her use, possession, or distribution of medical marijuana;
  • Employers may establish or maintain a formal drug-free workplace program. An employer may still discharge an employee for just cause if the employee uses medical marijuana in violation of the employer’s drug-free workplace policy. Moreover, the employee will be ineligible for unemployment compensation if the termination resulted from a violation of the employer’s drug-free workplace policy;
  • The Administrator of Workers’ Compensation may still grant rebates and discounts on premium rates to employers that participate in a drug-free workplace program; and
  • An employer maintains the right to defend against workers’ compensation claims where use of medical marijuana contributes to or results in injury.

As employees begin to more openly use marijuana under Ohio’s medical marijuana law, issues arising under state and federal disability discrimination laws are likely to complicate decisions involving hiring, discipline, and discharge regarding use of marijuana under policies prohibiting drug use in the workplace. Consequently, employers may at some time in the future be required to accommodate the medical condition that underlies the medical marijuana use under the Americans with Disabilities Act (ADA) and Ohio’s anti-discrimination laws by allowing an employee to use medical marijuana in certain cases.

What should employers do now?

Employers should review and update their formal drug-free workplace programs and their human resources policies to specifically address medical marijuana. Employers now have the option, however, to treat medical marijuana similar to the way they treat the use of legally prescribed drugs.

Individuals may legally use medical marijuana in a few months. Employers should aim to revise their policies, or to at the very least contemplate how to manage employees’ medical marijuana use, before House Bill 523 takes effect. If you have any questions about revising your employment policies or about how the new legislation might affect you, please contact one of our employment attorneys for additional guidance.

The Equal Employment Opportunity Commission (EEOC) raised the penalty for employers who fail to properly post required workplace notices under Title VII, the Americans with Disabilities Act (ADA), and Genetic Information Non-Discrimination Act (GINA) from $210 per violation to $525 per violation, effective July 5, 2016.

Employers Must Post Notices Under Title VII, ADA, and GINA

Employers are required to post notices describing the relevant provisions of Title VII, the ADA, and GINA in a prominent and accessible place where notices to employees are usually posted. The notice requirement applies to employers with 15 or more employees, including educational institutions and state and local governments, as well as all federal contractors and subcontractors.

Increased Penalty Intended to Promote Compliance with Notice Requirement

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires the EEOC to adjust penalties consistent with inflation. Adjusting the 1964 penalty of $100 for inflation would result in an inflation-adjusted penalty of $765 for 2016. However, the EEOC may not increase the penalty by more than 150% in a year, which means the EEOC could only raise the penalty from $210 to $525 this year.

Expectations and Guidance for Employers

The new fee took effect on July 5, 2016 and the penalty does not apply to violations issued before July 5. Because the current penalty is lower than the inflation-adjusted penalty, employers can expect another significant penalty increase in 2017, and minor adjustments to the penalty each year following.

Employers should regularly review their postings to check that the postings are both current and properly placed to ensure compliance with the notice requirement.

In yet another development in the saga of transgender law in America’s public schools, the United States Supreme Court put a halt to a trial court order that would have allowed a transgender male student to use the boy’s restroom in a high school in Gloucester County, Virginia at the start of the upcoming school year. The Supreme Court blocked the trial court’s order in a 5-3 decision, which will preserve the status quo at the high school until the Gloucester County School Board seeks the Supreme Court’s review of the lower court’s order later in August. While the high court’s decision is a significant step in the transgender student’s case, it does not have legal effect on any other cases.

By way of history, this ruling resulted from the school board’s request that the Supreme Court stay the Virginia trial court’s order permitting the female-to-male transgender student to use the restroom of his choice. The trial court’s order came after the Fourth Circuit United States Court of Appeals held that the school district’s policy – which requires students to use the restroom that comports with their biological sex – ran afoul of a federal Department of Education directive providing that public schools could lose federal funding if they discriminate against transgender students. The Fourth Circuit’s ruling and the Virginia trial court’s order implicate the scope and application of Title IX of the Education Amendments of 1972, which prohibits discrimination in public schools on the basis of sex. At the heart of this dispute is whether Title IX also extends to gender identity discrimination.

In addition to the complicated legal questions involved in this case, the school, the student, and the community all face challenging issues – from the personal stigma of discrimination to the rights of parents to direct and control the public education of their children. Districts, therefore, should be extremely circumspect when transgender questions arise in the halls and classrooms of their schools. Indeed, a deliberate and cautious approach to transgender questions is all the more necessary, as this new area of law continues to play out and develop and in our public schools and courts.

On an ongoing basis, Walter | Haverfield continues to evaluate the range of legal services we offer our clients to identify complementary practice areas that provide added value and meet our clients’ ever-evolving needs. That’s why, in the past year alone, we have added four new practice areas—intellectual property (IP), public and structured finance, loan workouts/creditors’ rights, and liquor control law. These practices had been identified as high-demand areas by our existing and prospective clients.

The firm’s newest practice group—IP—was initially created as a result of the legal professionals of D. Peter Hochberg Co, LPA, joining the firm at the end of June. D. Peter Hochberg Co. is well recognized in the national and international IP markets, having served clients around the globe for more than 30 years. In addition to its long-standing trademark and patent business, which has been responsible for writing more than 1,500 patents over the years, the firm also provided counseling relative to copyright and trade secret licensing and litigation, as well as arbitration of major patent infringement cases. Peter will be the Chair of the International Patent Group at Walter | Haverfield. The full legal team, including Peter Hochberg and Sean Mellino, were part of the transition.

Also in late June, Walter | Haverfield successfully recruited the entire Cleveland-based IP group of Kegler Brown Hill and Ritter. Jamie Pingor, who was the director-in-charge of the Cleveland office, will head up the new IP group at Walter | Haverfield. Beyond his IP work, Pingor is a licensed patent attorney, and he also counsels clients on a variety of corporate transactions, including business formation and structuring.

Leading the firm’s new public and structured finance practice group is 30+-year veteran Irene MacDougall, who joined Walter | Haverfield in the spring.

In order to better serve Cleveland’s burgeoning hospitality industry, the firm also added a liquor control law practice group that is under the direction of new partner John Neal.

Kirk Roessler, who joined the firm last fall, will lead the new commercial loan originations and workouts team which also offers experience in creditor/debtor law.

Walter | Haverfield also attracted high-level legal talent to support its existing practice groups in the last year. A number of these additions were mentioned in our previous newsletter. Brand new to the firm’s corporate transactions team, however, is T. Ted Motheral, who focuses his practice on mergers and acquisitions, having handled a wide array of transactions valued between $200,000 and $350 million.

Combined with the attorneys who were brought on board to start the four new practice groups, there were a total of 24 new attorneys joining the firm in the past 12 months. This is the second time in the last four years that the firm has documented double-digit growth in its professional ranks.

We are honored to be able to recruit such exceptional lawyers. All of these attorneys are well recognized in their individual practice areas and will allow us to not only serve our existing clients better but also attract new clients. We are also pleased to be attracting younger attorneys that will support the continued growth and vitality of this firm well into the future.

Ralph can be reached by phone at 216-928-2908 or e-mail

“When Free Speech Collides with Policies,” also appeared in the September/October 2016 issue of Cities and Villages magazine.

Is a government employer permitted to discipline an employee for behavior it believes an employee has engaged in? What if that employer is mistaken about said behavior? And what happens when the behavior is potentially constitutionally protected political activity? Unfortunately, these are scenarios that occur more often than many people might believe.

A recent United States Supreme Court case—Heffernan v. City of Paterson, New Jersey—sheds some light on how the courts view these issues.

In 2005, Heffernan was a detective reporting to the Police Chief in the Paterson Police Department. The Chief and Heffernan’s direct supervisor were appointed to their positions by the incumbent Mayor who was facing a challenge for his reelection from Lawrence Spagnola. Although Spagnola and Heffernan were “good friends”, Heffernan was not involved with the re-election campaign.

As a favor to his bedridden mother, Heffernan went to a distribution point to pick up a larger Spagnola sign to replace a smaller one stolen from her yard. While there, Heffernan spoke with Spagnola’s campaign manager and staff. Other members of the Paterson police force saw Heffernan with the sign in hand and observed him talking with the campaign staff and, of course, the word spread quickly throughout the department.

Heffernan was demoted from detective to patrol officer the next day and assigned a “walking post,” clearly as punishment for what appeared to be “overt involvement” in Spagnola’s campaign. Since Heffernan was not involved in the campaign, but rather was picking up the sign for his mother, his supervisors made a factual mistake.

Heffernan sued the City in federal court claiming that his demotion was a violation of his First Amendment right to free speech and was in response to mistaken conduct. This raises multiple legal issues.

Generally, an employee cannot be subject to adverse employment action for supporting a particular political candidate. However, both the U.S. District Court and the Third Circuit Court of Appeals found that Heffernan was not deprived of his First Amendment right to free speech because he had not claimed to have engaged in any speech that could be protected and such action must be based on an “actual, rather than perceived exercise of constitutional rights.” Heffernan appealed the decision to the United States Supreme Court.

In reversing the Third Circuit Court of Appeals and remanding the case, the Supreme Court focused on the City’s reason for demoting Heffernan – the belief that he engaged “in political activity that the First Amendment protects.” The Court looked at the employer’s reason for the demotion, not the fact that the employer was wrong about the type of activity being engaged in by the employee. The employee’s unassailable assertion that he was not involved in the campaign and not actually exercising speech did not matter. Of importance to the Court was the fact that the employer thought the employee was engaged in protected political activity stating “the government’s reason for demoting Heffernan is what counts here.” The Court found that the demotion did deprive Heffernan of a right “secured by the Constitution.”

Justice Breyer, writing for the majority, noted that “[T]he discharge of one tells the others that they engage in protected activity at their peril.” The Court found that, if an employer thinks the employee has engaged in protected activity, whether or not the employer is correct or mistaken, can cause “the same kind, and degree, of constitutional harm.”

Since there was some evidence that the adverse employment action against Heffernan was based upon a “different and neutral policy prohibiting police officers from overt involvement in any political campaign,” the case was sent back to the lower court to decide the constitutionality of that policy and the employer’s actions.

As this case demonstrates, government employers should exercise caution in taking action against employees where First Amendment issues may be involved. Consultation with legal counsel prior to taking action where an employee’s First Amendment rights may be involved could avoid costly litigation down the road.

Sara Fagnilli can be reached at 216-928-2958 or e-mail

In May the Defend Trade Secrets Act (DTSA) took effect, expanding federal protection of trade secrets that are stolen or exposed by improper means. Trade secrets are defined as valuable, confidential information that provides a competitive advantage by not being generally known in the market. DTSA’s passage was welcomed by U.S. companies, which value their trade secrets in the trillions of dollars.

Sens. Orrin Hatch (R-UT) and Chris Coons (D-DE) co-sponsored the legislation, which passed the Senate unanimously and the House by an overwhelming vote of 410-2. Boeing, Johnson and Johnson, 3M, Google, and General Electric were among the many companies that lobbied for DTSA’s enactment. In signing the legislation, President Obama remarked that DTSA “allows us not only to go after folks who are stealing trade secrets through criminal actions, but also through civil actions, and hurt them where it counts in their pocketbook.” Notably, DTSA is intended to supplement, not displace, existing state laws designed to protect trade secrets.

DTSA authorizes trade secret owners to bring suit in federal court regardless of where the parties reside or how much money is at issue if a trade secret is acquired or exposed by improper means. Victimized trade secret owners may recover their actual loss plus additional damages based on the benefit the other party gained by stealing the secret, as well as attorney’s fees.

Additionally, DTSA provides a unique remedy allowing the court to seize property to prevent the dissemination of a trade secret when the accused is likely to destroy, move, hide, or otherwise make the material inaccessible. Under many state laws, a trade secret owner may recover stolen blueprints or demand the surrender of surreptitious photographs or recordings. But DTSA is unique because it allows a court to seize and hold property without prior notice to the accused party. In the event of a wrongful seizure, DTSA permits an injured party to recover lost profits, cost of materials, loss of good will, reasonable attorney’s fee, and punitive damages arising from a seizure conducted in bad faith.

In addition to various civil remedies, DTSA increases the criminal fine from a maximum of $5 million to the greater of $5 million or three times the value of the stolen trade secret. It also establishes trade secret theft as a predicate offense supporting a claim under the Racketeer Influenced and Corrupt Organizations (RICO) law. A successful RICO claim could result in an award of up to triple damages and 20 years in prison.

Like preexisting state laws, DTSA obligates the owner of a trade secret to take “reasonable measures” intended to guard the confidentiality of the trade secret. “Reasonable measures” is not defined in the statute but includes items such as a locked room, security guards, confidentiality agreements, and the like.

Lastly, under DTSA, individuals who report trade secret theft to a government official, or who disclose a trade secret in a complaint filed under seal, may be protected from civil and criminal liability. DTSA imposes an obligation on employers to notify employees, including contractors and consultants, of the immunity. The employer may provide the required notice in an agreement with the employee or by cross-referencing a policy that explains the immunity. If an employer fails to give notice of the immunity, then the employer may not recover punitive damages or attorney’s fees from the employee whistleblower in an action brought under DTSA.

Questions and concerns relative to trade secrets and their protection should be discussed with legal counsel experienced in trade secret law.

Darrell can be reached at 216-928-2896 or e-mail

By Christina Henagen Peer and Lisa H. Woloszynek

Amid national strain and debate surrounding gender identity–from boycotts of Target due to its transgender bathroom policy to state laws and city ordinances that are aimed to restrict restroom use to biological at birth gender–school districts find themselves thrown into this national debate. Guidance from courts and agencies continues to evolve, leaving school districts floundering amidst the controversy with a lack of adequate legal direction to help them balance the prohibition of discrimination against privacy and safety concerns for the student body and community.

The U.S. Department of Education Office of Civil Rights (OCR) enforces Title IX of the Education Amendments of 1972 (Title IX), which protects individuals from discrimination based on sex in education programs. However, the interpretation as to what constitutes sex discrimination in relation to transgender individuals is in dispute. With a lack of explicit protections within Ohio law, school districts are left to face uncertain decisions. So, for example, should a transgender boy use the designated boys’ restroom? Girls’ restroom? Another separate restroom available in the building? And ultimately, is separate really equal or does it lend itself to a sex discrimination claim? Title IX has been successfully used to address sexual and gender-based harassment in schools despite no expressed provision of prohibition on those grounds.

Settlement agreements have been made in connection with restroom conflicts (e.g. $75,000 from a school district in Doe v. Regional Sch. Unit 26) with a Maine court having issued an order prohibiting the district from “refusing access by transgender students to school restrooms that are consistent with their gender identities.” In another case, an Illinois school district attempted to defy the OCR which had required access to a girls’ locker room by a female transgender student. The school, instead, had attempted to provide a separate changing area—an action which led to OCR-initiated proceedings to revoke the district’s federal funding. Ultimately, however, a settlement was reached.

While Title IX does not provide direction for school districts to determine restroom use for transgender students, the Department of Education has indicated that Title IX instructs schools to treat transgender students consistent with their gender identities and not separate or treat them differently based on sex (e.g. gender-specific restrooms).

Recently, the U.S. Court of Appeals for the Fourth Circuit addressed a transgender high school boy’s motion for a preliminary injunction to use the boys’ restroom after his school district adopted a policy limiting restroom and locker room use to biological genders with an alternative private facility for individuals with gender identity issues. The student had initially been permitted to use the boys’ restroom for several weeks before this policy was implemented. The student sued the school board under the Equal protection Clause and Title IX of the Education Amendments of 1972 challenging the school board’s policy. The student requested a preliminary injunction which would permit him to use the boys’ restroom during the pendency of the case. The school district filed a motion to dismiss the lawsuit. The U.S. District Court for the Eastern District of Virginia denied the injunction request and dismissed the student’s Title IX claims. The student appealed to the U.S. Court of Appeals for the Fourth Circuit.

In a 2-1 split, The Court of Appeals remanded the case back to the District Court with instructions to give deference to the Department of Education’s interpretation of Title IX. The Court found that the section which allows for gender-specific restrooms is ambiguous as it relates to the application for transgender students and, therefore, the Department of Education’s interpretation of gender identity as an individual’s “sex” for purposes of Title IX is the applicable interpretation the District Court must apply. Following the Fourth Circuit’s ruling, a Virginia federal district court ordered the School Board to allow the transgender student to use the boy’s restroom.

The school district has filed an emergency motion with the United States Supreme Court asking the Court to delay the implementation of the federal district court injunction until the high court decides whether to review the case. As part of the motion, the school board’s attorneys argued that allowing the transgender student to use the boy’s bathroom could jeopardize the constitutional rights of parents. If the Supreme Court ultimately decides to the take the case for review, the Court may be faced with determining whether the prohibitions of sex discrimination encompass gender identity. At this point, the School Board plans to file a formal petition seeking the Supreme Court’s review of the matter later this summer.

While this case does not directly impact Ohio schools, if the Supreme Court takes up this issue, it would impact schools throughout the nation. The Fourth Circuit case continues a trend toward greater protections for transgender students. In addition to restroom/locker room issues, districts should be mindful of requests for name changes (both in everyday practice and on official educational records); athletic team participation; rooming arrangements for students while on school- sponsored trips; and gown color in graduation ceremonies.

Due to the increasing prevalence of issues regarding transgender students, it is advisable for school districts to proactively manage these situations to decrease the likelihood that they result in discrimination complaints. The National School Boards Association has published a guide with frequently asked questions to address a wide range of issues. School districts should proceed carefully when addressing transgender issues given that the legal standards in this area continue to evolve.

Christina can be reached at 216-928-2918 or and Lisa can be reached at 216-619-7835 or

Department of Labor Penalties Increasing with Inflation Adjustments

The Department of Labor (DOL) announced interim final rules on June 30, 2016, to adjust its civil penalties for inflation. Increased penalties became effective on August 1, 2016, and apply to violations that occurred after November 2, 2015.

Increase Aims to Advance the Effectiveness and Deterrent Effect of Civil Penalties

The DOL issued the final rules pursuant to the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. The DOL is required to increase its penalties to keep pace with inflation. The final rules establish initial adjustments to catch-up penalties that have not been adjusted in years or even decades. Starting in 2017, the DOL will adjust its penalties for inflation before January 15 each year.

The adjusted penalties are intended to effectively punish employers who do not comply with federal laws and to deter noncompliance. The DOL estimates the adjusted penalties could result in up to $140 million in additional penalties assessed annually against noncompliant employers.

Penalty Adjustments

The DOL’s final rules do not address every penalty assessed by the DOL. However, the majority of penalties assessed by the Employee Benefits Security Administration (EBSA), Mine Safety and Health Administration (MSHA), Occupational Safety and Health Administration (OSHA), Office of Workers’ Compensation Programs (OWCP), and Wage and Hour Division (WHD) are affected by the final rules.

A complete list of the adjusted penalties can be accessed here.

Among the increased penalties are the following:

  • OSHA Violations. OSHA’s maximum penalties increased by 78%. The penalties for “serious,” “other than serious,” and posting violations increased from $7,000 to $12,471. The minimum penalty for willful or repeated violations increased from $5,000 to $8,908 and the maximum penalty increased from $70,000 to $124,709.
  • Minimum Wage and Overtime. The penalty for willful violations of the Fair Labor Standards Act’s minimum wage and overtime provisions increased from $1,000 to $1,894 per violation.
  • Worker’s Compensation. Maximum penalties for violations of federal workers’ compensation laws more than doubled.
  • H-2B Guest Worker Program. The maximum penalty for violations of the H-2B guest worker program increased from $10,000 to $11,940 per violation.
  • ERISA Form 5500. The maximum penalty for failure to file a Form 5500 increased from $1,100 per day to $2,063 per day.
  • Notice of 401(k) Automatic Contributions. Failure to provide notice to participants of a 401(k) plan with an automatic contribution arrangement increased from a maximum penalty of $1,000 per day to a maximum of $1,632 per day.

Guidance for Employers

Many of the adjusted penalties reflect an increase in the maximum penalty the DOL could assess for a violation. Although the DOL has the discretion to impose penalties less than the maximum, noncompliant employers should expect to face increased penalties for violations occurring after November 2, 2015. Employers should review their wage and hour practices, I-9 verification policies, benefits compliance, and safety protocols to verify that they are following applicable federal laws.

By William R. Hanna, Aimee W. Lane, and Jessica Trivisonno

Legislation that will significantly expand the remedies available to requesters of public records will take effect on September 28, 2016. The effect on local governments responding to public records requests is not yet clear. S.B. 321 was passed unanimously on May 25, 2016.

Beginning September 28, 2016, individuals may dispute the delay or denial of a public records request in the Ohio Court of Claims. The Court of Claims process is the first of its kind in the nation and is intended to make the process of disputing public records request denials or delays simple and affordable.

New Court of Claims Dispute Resolution Process

An individual may file a complaint with the Court of Claims by filing the complaint on a form that will be available online starting on September 28th and paying a fee of $25. The complaint must be filed either in the Court of Claims or in the court of common pleas of the county where the public office from which records have been requested is located.

In most cases, the dispute will be referred to mediation. However, if the parties are unable to mediate the dispute to a resolution, a special master, currently former Assistant Attorney General Jeff Clark, will consider the dispute. Public offices must respond to the complaint within 10 business days from the date mediation is terminated. Each party may attach affidavits in support of its complaint or response, but may not conduct discovery. The special master will issue a report and a recommendation based on the relevant law at the time of filing.

If the special master’s recommendation is approved by the Court of Claims, then the recommendation becomes binding on the parties. Either party may object to the recommendation. Upon objection, the Court of Claims will reconsider the recommendation before making a final order. Either party may appeal the final order of the Court of Claims to the state appellate court of the county where the public office is located.

A prevailing complainant is entitled to receive copies of the public record, as well as recover the $25 filing fee and other costs associated with the action. Typically, the complainant may not recover attorney’s fees.

(Please see the chart below for a more detailed explanation of the Court of Claims process.)

Auditor and Ohio Attorney General Dispute Services Discontinued

Prior to the introduction of the new Court of Claims process, the Ohio Auditor and the Ohio Attorney General established services to address public records disputes. Neither dispute resolution service provided a legally binding decision to the parties, but both served as affordable alternatives to a mandamus action. The Ohio Attorney General and the Auditor have discontinued such services given the new Court of Claims process.

Mandamus Action Still Available, but Public Office Can Recover if Frivolous

Individuals are still afforded the option to dispute a public records denial or delay by filing a writ of mandamus to compel the public office to release the records. Such action is often expensive and time-intensive, but also allows the parties to engage in discovery.

Further, a court may compel the relator to pay the public office’s court costs, expenses, and reasonable attorney’s fees if the relator files a frivolous mandamus action.

Additional Changes to Ohio Public Records Law

S.B. 321 also made the following changes to Ohio’s public records law:

  • A relator may be awarded reasonable attorney’s fees if the court determines the public office acted in bad faith, but the law precludes discovery on the issue of bad faith.
  • If a writ is not issued and the court determines that the mandamus action was frivolous conduct, the court may award the public office all court costs, expenses, and reasonable attorney’s fees.
  • A relator may be awarded court costs if the records are provided in bad faith after the individual initiates a mandamus action, but before the court issues an order on the mandamus action. Prior law required awarding court costs to relator if the court orders the public office to comply with the public records law.
  • If a public office provides records on a free, accessible, searchable website, then the public office can limit the number of records it will digitally deliver to 10 records per month. However, a public office must provide records if not available online or if the requestor certifies that the records will be used for a non-commercial purpose. Prior law only limited the number of records transmitted by U.S. mail to 10 records per month.
  • Infrastructure records of a private entity may be exempt from disclosure. This exemption applies if the record is accompanied by a written statement affirming the expectation of protection from disclosure.
  • The defendant, counsel, or agent of a defendant in a criminal action making a request for public records related to the case must serve a copy of the request to the prosecutor, and the public records request is considered a demand for discovery pursuant to the Criminal Rules unless a contrary intent is indicated.
  • A private, non-profit institution of higher education shall not be held liable for any claim that arises due to disclosure of public records, including a breach of confidentiality claim, as a result of their disclosure of a public record.


Municipalities, school districts, and other entities subject to Ohio’s public records laws should expect individuals to utilize the new process to more readily dispute a denial or delay of a public records request. Entities subject to Ohio’s public records law should review their public records policy for consistency with the Ohio laws, and familiarize themselves with the new Court of Claims dispute resolution process and the complaint form when it goes live on September 28th.

If you have any questions about this change in the law, please contact a member of Walter | Haverfield’s Public Law group.

William R. Hanna and Aimee W. Lane are partners in the Public Law Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

By Christine T. Cossler and Lisa H. Woloszynek.

As the national debate regarding transgender students’ rights and school districts’ obligations rapidly evolves, the United States District Court for the Southern District of Ohio adds to the conflicting precedent. On September 26, 2016, Judge Marbley ordered the Highland Local School District (“District”) to treat 11 year-old “Jane Doe,” a biological male, “as the girl she is.” The Judge’s order requires the District to allow the student to use the girls’ restroom in the elementary school and refer to her by female pronouns and her female name. The crux of the issues involves transgender identity protections under the Equal Protection Clause and Title IX of the Education Amendments of 1972. In making his ruling, Judge Marbley rejected the privacy argument made by the District that the privacy rights of other students weighed against allowing Jane Doe to use the girls’ restroom.

The Highland Local decision is not binding on courts in Northeast Ohio, but, it is the first Ohio court decision addressing student transgender issues at the K-12 level and the decision does align with the approach espoused by the United States Department of Education (“DOE”) and Office for Civil Rights.

In recent months, courts have grappled with expanding transgender students’ rights, with requirements to treat students in a manner consistent with their gender identity and protect against gender identity discrimination. However, some contend that these federal laws do not extend to transgender identification. This controversy has extended up to the United States Supreme Court for potential consideration; meanwhile, the United States DOE and United States Department of Justice (“DOJ”) issued guidance for school districts to treat students in a manner consistent with the student’s gender identity, only to be met with a preliminary injunction to stop the enforcement of such federal guidance while the Northern District of Texas addresses eleven states’ challenges. Until Monday, Ohio courts had not weighed in on the issue.

In reference to the pending Texas lawsuit and its nationwide preliminary injunction, Judge Marbley reasoned that it was not applicable because Ohio was not a party to the Texas case and the Highland litigation was initiated prior to that lawsuit. This decision is in line with the DOE and DOJ guidance and adds to the trend toward transgender protections. Notably, Judge Marbley also granted the State of Ohio’s motion for leave to file an amicus curiae brief on behalf of the District. To highlight the importance of these issues and district obligations – more than $1 million of education funding is at stake for the District (the Highland District filed the lawsuit because it was potentially facing loss of federal funding in connection with its unwillingness to allow the 11-year old student to use the girls’ restroom).

Until this area of law begins to settle, it is advisable for Ohio school districts to keep these recent rulings in mind when addressing transgender student concerns and avoid actions that may be construed as gender identity discrimination. The Highland Local School District intends to appeal this injunction; therefore, more direction for Ohio school districts should be forthcoming.

Christine T. Cossler is a partner, andandnbsp;Lisa H. Woloszynek is an associate in the Education Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

A class action lawsuit dating back to 2004 has finally been settled involving the owners of property bordering Lake Erie in Ohio who filed against the State of Ohio (State), in conjunction with the Ohio Department of Natural Resources (ODNR). As part of the settlement, affected current and past landowners may qualify for reimbursement if they file the necessary claim form by October 12 of this year.

At the heart of the lawsuit was the State’s claim of public trust ownership up to the Ordinary High Water Mark (OHWM) of Lake Erie. It was back in 2011 that the Ohio Supreme Court weighed in with its opinion that the State’s title in trust to Lake Erie is actually the natural shoreline and not the OHWM. This led to years of litigation and fact finding between the various parties, resulting in the current settlement.

Although neither the State nor the ODNR have admitted any wrongdoing or legal liability in the case, the Plaintiffs and Defendants agreed to a settlement to avoid the additional costs and potential negative consequences of going to trial.

If you owned or co-owned property bordering Lake Erie (including Sandusky Bay and other areas previously determined to be a part of Lake Erie under Ohio Law) within the territorial boundaries of the State of Ohio, you are likely covered under this settlement agreement. Likewise, if you were a lessee under a submerged lands lease with ODNR between May 28, 1998 and May 20, 2015, that used OHWM as the boundary of the State’s public trust ownership, you are also likely covered and may qualify for compensation.

The Court in charge of this case has yet to approve the settlement. Assuming approval is granted and no appeals are filed, payments will be disbursed based on the terms of the Stipulation and the information you provide on the claim form. Payments will be calculated for each parcel of affected property and will be impacted by such considerations as length of frontage on Lake Erie, length of time you owned the property, alterations made to the property and the existence of rental payments, among others.

An official claim form must be received by October 12, 2016. Upon submitting a claim form, you will be bound by the terms of the settlement. You cannot receive a payment without submitting a claim form.

Full details of the settlement, along with a QandA, can be found at Or you can call 1-844-36-2770 for more information.

John W. Waldeck, Jr. is a partner in the Real Estate Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

By Christina Peer and Lisa H. Woloszynek

Under the Individuals with Disabilities Education Improvement Act (IDEIA), public schools must provide a free appropriate public education (FAPE) to students with disabilities. The degree of “educational benefit” a child must receive in order for the school district to have provided a FAPE has been a question that school districts across the country have grappled with for decades. But clarification is in sight as the United States Supreme Court will hear the case of Endrew F. v. Douglas County School District RE-1. The central issue in Endrew F. is defining the level of educational benefit a school district must confer on children with disabilities to provide them with the FAPE guaranteed by the IDEIA.

In 1982, the United States Supreme Court decided Rowley v. Hendrick Hudson School District and held that school districts are not required to maximize the potential of a child with a disability in order to provide FAPE. Rather, school districts are required to provide a program that is reasonably calculated to confer an educational benefit. In Rowley, the Court held that achievement of passing marks and advancement from grade to grade were indicators that FAPE had been conferred for a student educated in a regular education classroom setting. Unfortunately, the Court in Rowley did not address the level of “educational benefit” that must be conferred. This question is especially difficult in situations where students are not progressing successfully through school in a general education classroom. For example, what must a district demonstrate in order to prove that it provided an “educational benefit” to a student with autism or multiple disabilities who is being educated using a modified curriculum?

The appellate courts are not in agreement on their interpretation of what constitutes sufficient “educational benefit” in this type of circumstance and there are essentially two different standards. Some courts, including the Tenth Circuit in Endrew F., rely on a “merely more than de minimis” (i.e., just above trivial measurement) standard. This is in direct controversy with the Sixth Circuit (which includes Ohio) and the Third Circuit, which utilize the higher “meaningful educational benefit” standard. The “meaningful educational benefit” standard, as outlined by the Sixth Circuit Court in Deal v Hamilton County Board of Education, requires an analysis of the child’s capabilities and potential for learning to determine how much of an educational benefit must be provided to equate to meaningful, with an eventual goal of self-sufficiency where possible. The Deal Court also noted that “[i]n conducting this inquiry, courts should heed the congressional admonishment not to set unduly low expectations for disabled children.” The U.S. Solicitor General as well as Autism Speaks and the Public Interest Law Center are in favor of this heightened standard for the country and have weighed in with their input through amicus curiae briefs in Endrew F.

Endrew F.’s parents seek, through their Petition, to resolve this issue to “ensure that millions of children with disabilities receive a consistent level of education, while providing parents and educators much-needed guidance regarding their rights and obligation.” Ultimately, the United States Supreme Court could uphold either of the established standards or could create an entirely new standard for the provision of FAPE. Whatever the outcome, school districts and parents alike would be well served by a decision that includes concrete standards to be used when determining whether a program provided a FAPE.

Oral arguments in the Endrew F. case have not been scheduled, but are expected to be held next year.

Christina Peer is a partner, and Lisa H. Woloszynek is an associate in the Education Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

The national debate regarding transgender students’ rights and the obligations of school districts has developed rapidly this year. Courts across the country, including in Ohio, have issued varied decisions on these issues and the United States Department of Education (“DOE”) and the United States Department of Justice (“DOJ”) have issued controversial guidance. On October 28, 2016, the United States Supreme Court agreed to hear the recent Fourth Circuit Gloucester County School Board v. GG case, regarding bathroom use policy in relation to a transgender student. So, clarification on some of the issues facing districts may be on the horizon.

The Gloucester case began when a school district adopted a policy requiring students to use the restroom or locker room of the student’s biological gender. A transgender student had been permitted to use the boys’ restroom for several weeks before this policy, but that permission was terminated after the policy was implemented. The student subsequently sued the school board under the Equal Protection Clause and Title IX of the Education Amendments of 1972 (“Title IX”) challenging the school board’s policy, The student also sought an injunction to permit his use of the boys’ restroom.

As the case moved up through the courts, the U.S. District Court for the Eastern District of Virginia denied the injunction request and dismissed the student’s Title IX claims. However, in April, the U.S. Court of Appeals for the Fourth Circuit found that the District Court should have given deference to the DOE’s interpretation. Under the DOE’s interpretation, students should be allowed to use the restroom of the gender with which they identify. The Fourth Circuit reversed the District Court and remanded the case for further proceedings with instructions to give deference to the DOE’s interpretation. In reaching this conclusion, the Fourth Circuit relied on a 2015 opinion letter from the DOE’s Office for Civil Rights (Letter to Prince Jan. 7, 2015) which interpreted Title IX as to treat students in a manner consistent with their gender identity. In its decision and application of the DOE’s interpretation, the Fourth Circuit relied on a principle from a prior court decision, Auer v. Robbins, that courts should generally defer to an agency’s interpretation of its own regulation. The United States Supreme Court granted an emergency petition to stay the decision while the case continues. Thus, the school board’s policy remains in effect for the time being.

While this case revolves around a high-profile topic, the issue before the United States Supreme Court is quite technical. The Court will determine if Auer deference should extend to an unpublished agency letter and if the DOE’s regulatory and specific interpretation of Title IX (a funding recipient providing sex-separated facilities must “generally treat transgender students consistent with their gender identity”) should be given effect. The latter determination will have robust implications, especially in light of the DOE and DOJ’s 2016 published Dear Colleague Letter guidance, which many states are now challenging in court.

Several prior client alerts address the development of this topic. Please access them below for additional background information:

Ohio Court Weighs in on Transgender Student
U.S. Department of Education and Justice Weigh In on the Legal Developments Regarding Transgender Students
Legal Developments Regarding Transgender Students
The U.S. Supreme Court and Transgender Students

Lisa H. Woloszynek is an associate in the Education Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

Ever since Ohio’s Constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and determined that based on the consumer price index (CPI), Ohio’s minimum wage rates will slightly increase in 2017.

Ohio’s minimum wage is currently $8.10 per hour for regular hourly employees. The minimum wage for tipped employees is $4.05 per hour. Ohio’s minimum wage will increase to $8.15 per hour for regular hourly employees. The minimum wage for tipped employees will increase to $4.08 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $299,000 or less per year or to (ii) 14 and 15-year-olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. The federal minimum hourly wage is currently $7.25. In Cleveland, City Council voted to let voters decide in a special election whether or not to increase the minimum wage to $15.00 per hour. The $15.00 amount would be phased in over a period of time. The special election will be held May 2, 2017.

The new Poster is available by clicking here.

Patricia F. Weisberg is a partner in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

Yesterday evening, the Honorable Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction barring the Obama Administration’s implementation of new regulations regarding overtime eligibility for certain workers making less than $47,476 per year. Under the regulations promulgated by the United States Department of Labor in late May, the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the Fair Labor Standards Act’s overtime requirements was to be increased from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). These regulations were slated to take effect December 1, 2016.

Judge Mazzant’s ruling – which, by its terms, applies nationwide to all employers – is subject to appeal and the Department of Labor released a statement last night that the agency is reviewing its legal options. Regardless, both President-Elect Donald Trump and leadership for the incoming Republican-controlled Congress have previously signaled an intent to modify, or to completely scrap, the new overtime regulations in the coming legislative session.

As a practical matter, Judge Mazzant’s ruling leaves employers who have prepared, or were preparing, to comply with the new overtime rules in a bit of a lurch. In short, employers are best served to maintain the status quo until we have more regulatory certainty. We advise employers that have already re-classified affected employees as non-exempt, or bumped compensation to comply with the increased salary threshold, not to revert to prior practices (at least until legal wrangling over the new overtime regulations comes to a more final resolution). At the same time, we advise employers who have not yet implemented changes complying with the new rules to delay implementation pending the outcome of legal process.

FLSA exemption determinations are often fact-intensive, frequently carry practical implications for workplace dynamics, and are regularly the subject of litigation. Accordingly, we recommend that you consult with legal counsel on any significant change to your business’s or organization’s approach to wage and hour matters.

Walter | Haverfield will issue additional guidance as this story further develops. For more information on this or other employment law issues, please contact one of our Employment lawyers.

George J. Asimou is an associate in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

On November 29, 2016, the United States Environmental Protection Agency (EPA) announced the first ten chemicals it will prioritize for risk evaluation under the recent legislative amendments to the federal Toxic Substances Control Act of 1976 (TSCA). Asbestos has been included in EPA’s priority list. This portends that EPA may attempt to restrict or ban asbestos-containing products and/or their manufacture, importation, processing, or distribution in commerce through its authority under TSCA. Previous attempts by the agency to restrict or ban asbestos through rulemaking have been unsuccessful.

The issuance of the priority list was required by the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which was signed into law by President Obama on June 22, 2016. The Act made significant changes to TSCA and required EPA to publish a list of 10 priority chemicals by December 19, 2016. According to EPA, these ten chemicals were selected based on multiple factors, including their prevalence as environmental contaminants, their widespread use, especially in consumer products, and their perceived or known hazards.

The issuance of EPA’s priority list triggers the requirement that the agency complete a risk evaluation for each of the ten chemicals within three years. These evaluations will determine whether the chemicals present an unreasonable risk to humans and the environment. If an unreasonable risk is found, EPA must take action to mitigate that risk within two years.

In general, TSCA authorizes EPA to require reporting, record-keeping and testing requirements, and restrictions relating to chemical substances and/or mixtures. It does not apply to certain substances, such as food, drugs, cosmetics and pesticides, which are separately regulated. With the Lautenberg Act, EPA now has the power to require safety reviews of all chemicals in the marketplace. This is a fundamental shift in the requirements and approach for addressing chemical safety under TSCA. EPA has stated that the amendments to TSCA will allow the government to better protect public health and the environment.

The TSCA amendments focus on risks to human health and the environment. A new health-based safety standard of review has replaced the former cost-benefit standard. If EPA determines that a chemical such as asbestos poses an unreasonable risk, it must promulgate use standards, and could further impose additional restrictions or even a ban on the entry of the chemical into U.S. commerce. In 1989, EPA banned asbestos and attempted to phase out its use by rule, but the rule was overturned on the grounds that EPA failed to provide an adequate justification for the complete ban. Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991).

The other nine chemicals on EPA’s priority list are subject to the same process and potential restrictions or ban as asbestos. They are: 1,4-Dioxane, 1-Bromopropane, Carbon Tetrachloride, Cyclic Aliphatic Bromide Cluster, Methylene Chloride, N-methylpyrrolidone, Pigment Violet 29, Tetrachloroethylene, also known as perchloroethylene, and Trichloroethylene. Notably, bisphenal A (BPA), the ingredient in plastic bottles that many companies have ceased using due to public concerns, was not included on EPA’s list, suggesting that the agency does not consider BPA a significant threat to the public.

Additional chemicals will be designated later for evaluation, including a group of 90 chemicals identified by EPA under the TSCA amendments. For each risk evaluation that EPA completes, TSCA requires that EPA begin another. By the end of 2019, EPA must be performing 20 chemical risk evaluations at any given time.

Additional information on the priority chemicals can be found on EPA’s website here. For additional information or legal guidance, contact Leslie G. Wolfe at (216) 928-2927 or Leslie is an associate in Walter | Haverfield LLP’s Litigation Services Group.

It happens over and over again. Companies get close to making an acquisition but then there are all sorts of costly delays and complications because the company’s board of directors is raising concerns or didn’t have the information it needed, when it needed it, to make an informed decision on the transaction. Too often company leadership and members of the board do not have good communications when it comes to effectively consummating a merger or an acquisition.

Ensuring good communications and expedited decision-making happens long before a deal is brought to the table. Companies that have identified mergers and acquisitions as part of their overall growth initiatives need to develop strategies before the first deal is ever evaluated to make sure goals are aligned and expectations are managed. Otherwise, boards are often forced to make very reactive decisions without having the information they ultimately need. Too much or too little information can delay decisions or even terminate what could have been a very profitable transaction.

The following are tips to keep in mind to effectively involve your board of directors in the MandA process:

  • Develop written policies for identifying and evaluating potential deals to ensure that management and the board agree on how deals will be sourced, what factors will be weighed, what questions to ask of prospects, and how prospective acquisitions will fit into the overall corporate structure and strategy.
  • Recruit board members with pertinent MandA experience so they can guide the board in asking the right questions and making timely decisions.
  • Develop a list of questions that will be consistently asked when evaluating all prospects relative to projected income streams, potential risks and liabilities, breakdown of responsibilities and liabilities between the parties, and potential issues arising from the integration of the new facility or assets.
  • Create a formal process for learning from previous acquisitions and attempted acquisitions so that mistakes are not repeated.
  • Clearly define responsibilities of management vs. the board during the MandA process. Some boards are too involved, restricting management from doing its job. Others are too removed and only brought into the process shortly before the close of the transaction.

Board members today have more fiduciary responsibilities and are exposed to the potential for heightened scrutiny in terms of liability. It is in the best personal interests of the board members, as well as the best interests of the company, that boards have the right information at the right time to make the most fiscally responsible decisions.

Ted Motheral is a partner in the Corporate Transactions Group of the Cleveland-based law firm of Walter | Haverfield LLP.

As seen in Crain’s Cleveland Business on December 08, 2016.

So here it is…yet another article on how the unexpected Trump presidency will affect business.andnbsp; This time the focus is on organized labor.

I wrote multiple articles over the past few years about how an emboldened National Labor Relations Board (NLRB) grew its reach and power under the protection of the Obama Administration.andnbsp; Naturally, we would expect the pendulum to swing in the opposite direction with a Republican president and largely Republican Congress.andnbsp; But this is no ordinary Republican president.andnbsp; And, this is no ordinary time for the NLRB.

Unlike healthcare reform which could take literally years for President-elect Trump to unravel, the impact on labor could be felt almost immediately after he is sworn in.andnbsp; Why?andnbsp; Because the terms of two NLRB board members have already expired, which means President Trump will be able to fill two of the five board seats in the near-term, subject only to the approval of his Republican Congress.andnbsp; Since one member of the existing board is Republican, that will provide a Republican majority quickly.andnbsp; In addition, the terms of the remaining three board members will expire in three years which means that, even if Trump only survives one term, he will still be in a position to have completely overhauled the NLRB.

Perhaps the most significant issue to watch is the joint and/or single employer analysis that was formulated by the NLRB in the Browning Ferris subcontracting decision. Currently, the NLRB is litigating an extension of that doctrine in the highly publicized McDonalds case which is attempting to classify the franchisees and McDonalds as either a joint or single employer. This case will not be decided by the NLRB until 2017 at best, and by then the Board deciding it is not likely to have a liberal majority. Franchisees, businesses that employ subcontractors, and businesses that employ temporary workers should pay extra attention to this issue.

Given the depth and breadth of the NLRB’s aggressive, pro-union decisions under President Obama, there is no shortage of decisions and/or rules changes that are adverse to employer interests and that may be directly in the sights of a pro-management NLRB. Among them are: the “ambush election” doctrine; the “micro unit” decision;andnbsp; a plethora of NLRB’s rulings regarding employee handbooks; the breadth of arbitration clauses; post-contract-expiration decisions; whether graduate students are employees, and the definition of supervisors.

Like most things involving the Federal government, however, many of these reversals will take time and the true impact will occur slowly.andnbsp; Under President-Elect Trump, we could also see smaller budgets for the NLRB, Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).andnbsp; That would mean employees would be more likely to have to file suits against employers on their own without agency support where permitted.andnbsp; Consequently, we would expect that to lead to fewer frivolous cases being filed, which is good news for employers.andnbsp; In the meantime, we can only watch to see what will happen and be ready to respond to major changes.

Marc J. Bloch is a partner in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

As seen in the November 2016 issue of Properties magazine.

It was more than 18 months ago that the Ohio legislature approved the creation of designated outdoor refreshment areas throughout the state to help spur economic growth, but Cleveland is just now in the process of getting its first one in The Flats. Within these specially designated areas, the state’s open container laws do not apply, allowing customers to walk freely with open containers of beer, wine and spirits within the designated borders without fear of that criminal violation.

The creation of such outdoor refreshment areas could pay big dividends to developers who would be able to create destination locations unrestricted by existing open container liquor control laws. The concept is not unique to Ohio, as other states have similar designations under different names. One of the most famous areas in the country not subject to open container restrictions is Bourbon Street in New Orleans. While other destination points around Northeast Ohio are exploring the creation of an outdoor refreshment area, The Flats East Bank is the only one within City of Cleveland limits to have actually filed for an application. It was Middletown that had the state’s first designated area under the new legislation. Other close-to-home outdoor refreshment areas can be found in downtown Canton and Lorain.

A key challenge in creating additional outdoor refreshment areas is that developers cannot directly request them. Rather, the application must be made by the municipality. It is then up to the developer and municipality to create whatever mechanisms they see fit for governing how the outdoor refreshment area will function relative to days and hours of operation and other desirable restrictions.

Another challenge under the legislation sponsored by Senator Bill Seitz is the restriction as to where these areas can be located. In the original legislation, only municipalities with populations greater than 35,000 people could qualify for a single designation. That restriction has already been amended such that, effective April 2017, municipalities with fewer than 35,000 people may create an outdoor refreshment area, assuming they meet other minimum criteria. In municipalities with populations greater than 50,000 people (such as the City of Cleveland), the legislation allows for the creation of only two designated outdoor refreshment areas. In addition, there must be at least four establishments that currently hold liquor licenses within the boundaries being designated and those boundaries must be able to be clearly defined geographically.

Beyond these criteria, health and safety issues must also be addressed with responsibilities delineated amongst the municipality, the developer and the individual permit holders. The long-term success of these outdoor refreshment areas will ultimately depend on how responsibly they are operated. Few want the reputation of a Bourbon Street to be associated with Cleveland. For that reason, the Ohio legislation allows for the dissolution of a specific designated area.

To help avoid problems, the legislation leaves a great deal of flexibility for developers to work with the city to create, for instance, an Authority that would have regulatory powers to control conduct within the area. Although there have been no high-profile problems occurring to date within these outdoor refreshment areas, all parties need to work collaboratively and cautiously to ensure a successful and safe operation and avoid events that may result in public backlash.

Assuming that adequate controls are in place, the potential for outdoor refreshment areas is tremendous, especially if they are created in conjunction with a Community Entertainment District that allows for easier liquor permitting. With the combination of the two designations, a particular development would be extremely attractive to prospective renters and retailers and have a major competitive advantage in differentiating itself and drawing foot traffic. The options are nearly endless, as developers could work with their municipalities to write any number of terms into the legislation. For example, the parties could even choose to reserve these rights only for private ticketed events, as opposed to privileges available to the general public.

It is still very early in the process to conclude how successful designated outdoor refreshment areas will be in Ohio, but savvy developers should be watching the progress being made in this area and evaluating their options with experienced legal counsel to make sure they are leveraging their opportunities.

John N. Neal is a partner and chair of the Hospitality and Liquor Control group at Walter | Haverfield.

In State ex. rel. Cincinnati Enquirer, et al. v. Deters, Pros. Attorney,
released on December 20, 2016, the Ohio Supreme Court was faced with
several important issues raised by the use by police departments of
body-camera video. The Court determined that, assuming such video
constitutes a “public record,” public bodies are entitled to a
reasonable amount of time to review the video for needed redactions
before the video must be released. This case is a reminder that public
bodies must be prepared for the age of ubiquitous video, which is upon

Numerous Cincinnati media outlets requested body-camera video
from the Hamilton County Prosecutor’s Office. The body-camera video had
captured the shooting of a motorist by a University of Cincinnati police
officer subsequent to a traffic stop. Three of the media outlets had
not actually requested the body-camera video from the prosecutor’s
office, but had requested it from other sources (police departments).
The Court dismissed these claims because these relators had not
requested the video from the prosecutor’s office (the sole respondent in
the mandamus action).

In initially refusing to release the video,
the prosecutor’s office had asserted that body-camera video should not
be released because such release could jeopardize a fair trial. The
prosecutor’s office also argued that the videos could reveal
confidential investigatory techniques or procedures, and/or constituted
investigatory work-product. It was also argued that the videos were
either a confidential law-enforcement investigatory record or a
trial-preparation record, and therefore exempt from release. Ultimately,
because the video was released, the Court did not need to determine if
any of the asserted grounds for refusing to the release of the video was
valid. The Court assumed, without deciding the issue, that a
body-camera video is a public record.

Instead, the Court denied
the writ because the Court determined that, even if the requested
body-camera video is a public record, the purpose of a mandamus action
is to compel the release of records. Because the video had been released
by the prosecutor’s office two days after the action was filed, the
mandamus action had been rendered moot.

In addressing whether the
statutory penalty and legal fees should be paid to the relators, the
Court noted that “***the prosecutor was entitled to review the video to
determine whether any redaction was necessary and produced the
body-camera video six business days after it was initially received by
his office***.” The Court concluded this was a reasonable period of
time. Consequently, the relators were not entitled to statutory damages
or attorney fees.

Public bodies, and law enforcement agencies in
particular, should take note of this case and be prepared to respond to
public records requests for body-camera video. Public bodies may need to
redact portions of the video via pixelating or otherwise obscuring the
images of persons or things that are shown in the video. Alternatively,
the public body may need to be prepared to argue why the entire video
should not be released. A thorough review of both police body-camera
policy and public record policy is advisable to determine if the issues
raised by this case have been adequately addressed. It is also advisable
to develop a plan for redacting video as most police departments do not
have this capacity in-house.

Stephen Byron is a partner, and Susan Bungard is an associate in the firm’s Public Law Services group.

On December 7, 2016, the Ohio General Assembly passed Substitute Senate Bill 331 (SB 331), which significantly impacts a municipality’s ability to regulate the placement, construction, modification, and maintenance of “small cell” wireless facilities in the public right of way. As originally introduced, SB 331 only sought to regulate dog sales by pet stores and retailers. But as the Generally Assembly went into its lame duck session, additional provisions – completely unrelated to the original subject – were inserted into the legislation, including amendments to Ohio Revised Code Chapter 4939 intended to provide expedited access to municipal right-of-way (ROW) for small cell wireless providers. Governor Kasich signed the bill on December 19, 2016, and it will take effect in 90 days.

SB 331 requires licensed wireless providers and franchised cable operators to go through the motions of requesting consent to take the following actions in the ROW with respect to small cell wireless antennae and equipment (all of which are deemed “permitted uses” anywhere in the ROW regardless of any local zoning provision):

  • Attach an antenna system to an existing monopole, light pole, traffic signal, sign pole, or utility pole in the ROW (unless the utility pole is owned by a municipal electric utility); or replace or modify small cell antennae on such structure;
  • Locate small cell wireless equipment for multiple wireless service providers on an existing pole;
  • Replace or modify an existing antenna or associated equipment; or
  • Construct a new pole or modify or replace an existing pole associated with a small cell antenna or equipment.

Note that the municipality must act on the application within 90 days of receipt, and if it fails to do so, the request is deemed approved. The 90-day period may be tolled by agreement between the municipality and the applicant; by the municipality if the application is incomplete (but be careful to follow the additional timelines prescribed in R.C. 4939.035); or by the municipality for up to an additional 90 days in the case of an “extraordinary number” of wireless facilities contained in pending requests (multiple antennae and facilities may be requested simultaneously). Be aware, however, that the even more accelerated 60-day timeframe for action under Section 6409 of the federal Spectrum Act still applies to “eligible facilities requests” as defined therein (R.C. 4939.039). The amount a municipality can charge to process a “request for consent” may not exceed $250.00 per antennae or wireless facility.

In addition, SB 331 greatly restricts the scope of review for municipalities considering small cell requests. The legislation prohibits cities and villages from:

  • Applying zoning regulations to small cell wireless applications;
  • Evaluating the business decisions of the applicant, the need for the antenna or equipment, or the availability of alternative locations;
  • Precluding placement of equipment in a residential area or within a specific distance from a residence or other structure;
  • Demanding the removal of existing wireless support structures or equipment as a condition of approval of a new application;
  • Limiting the duration of any permit;
  • Imposing separation or spacing requirements between antennae and equipment;
  • Enacting any moratorium on the filing, consideration or approval of applications; or
  • Entering into exclusive arrangements for the right to attach to a municipal corporation’s poles or other delineated support structures.

With respect to the last item above, the bill goes so far as to require that a municipality may not refuse to provide access to its own wireless support structures, poles or facilities in the ROW, if a wireless provider wishes to use those structures or poles. For such use, a municipality may charge no more than $200 per year per attachment (to its own ROW poles and facilities) – regardless of whether this amount covers the municipality’s costs.

The telecommunications industry sought these changes, in part, to expedite approvals for the planned installation of small cell facilities needed to create faster, higher capacity 5G networks. These new ORC provisions go further than federal law in preempting local review. SB 331 offends principles of Home Rule and violates the single-subject rule. Further, it disregards a municipality’s ownership interest, on behalf of its residents and the public, in its ROW and its structures within the ROW. Nevertheless, Ohio cities and villages should review the revisions to ORC Chapter 4939 as well as existing federal law applicable to small cell wireless facilities. It is all but certain that Ohio municipalities will see a dramatic increase in the number of applications for small cell facilities, and they should understand their authority to review those applications, along with the limits of that authority.

William Hanna is a partner, and Brendan Healy is an associate in the firm’s Public Law Services Group.

As seen in the November 7-13, 2016 issue of Crain’s Cleveland Business.

Of all the unique assets that may be covered in the estate planning process, firearms perhaps present the most unique set of challenges and considerations. Owners of firearms need to make sure they disclose said ownership upfront in the planning process and seek counsel from an attorney who knows the right questions to ask. Important considerations include the type of firearm involved, its value, background on the beneficiary and location of the beneficiary.

There are multiple types of firearms and firearm accessories–each subject to different rules and regulations on the federal, state and local levels. While many of these issues may not arise until the individual dies and the estate or trust is being administered, they need to be considered when drafting the estate planning documents.

Firearms not subject to the National Firearms Act (NFA) are the most commonly owned and include hunting rifles and pistols, among others. Two primary issues could arise when attempting to transfer ownership of these types of firearms–either the beneficiary is disqualified from owning a firearm because of being a felon or the particular firearm may be illegal in the state where the beneficiary lives. In addition, consideration should be given to whether the firearms should pass through probate or be transferred into a trust upon death because of the laws regarding the transferring of firearms.

Of all firearms, Title II firearms create the most difficult estate planning issues. Title II firearms fall under the authority of NFA and include such firearms as sawed-off shot guns, silencers and machineguns. One strategy for passing on Title II firearms is to have a firearms trust own the firearms. If a firearms trust is not used, a new background check and registration paperwork must be filed for each firearm when it passes to a beneficiary. When an owner of NFA firearms passes away, his or her attorney must inform the trustee or executor as to who can possess the firearms during the administration process and where the firearms can be legally and properly stored. If the firearms are improperly transferred or possessed, an individual can be fined up to $250,000 and receive up to 10 years in prison.

Without a doubt, there are many issues that can arise from passing on firearms. But good communications early in the estate planning process with an attorney knowledgeable about special firearms considerations will help avoid problems later on.

Kevin McKinnis is an attorney in the tax and wealth practice group of Cleveland-based Walter | Haverfield LLP.

The ongoing debate regarding the responsibilities of public school districts with respect to transgender students has continued to be fueled by a new decision from the United States Court of Appeals for the Sixth Circuit. On December 15, 2016, the Sixth Circuit issued an Order in Board of Education of Highland Local School District v. United States Department of Education, et al., affirming the decision of the United States District Court for the Southern District of Ohio, which blocked that school district’s attempt to prevent a transgender student identifying as a female from using the girls’ restroom at her school. Both the lower court’s decision and the Sixth Circuit decisions in Highland align with the DOE interpretation of Title IX. Specifically, the DOE has provided that funding recipients must “generally treat transgender students consistent with their gender identity.”

The Highland Court, in a 2-1 decision, explained that “[t]he crux of this case is whether transgender students are entitled to restroom access for their identified gender rather than their biological gender at birth.” Noting that the law in the Sixth Circuit prohibits discrimination based on a person’s transgender status, the appellate court refused to grant the school district’s request to stay a preliminary injunction issued by the district court allowing the student to access the restroom of her identified gender. While Highland argued that such an allowance would result in irreparable harm, the Sixth Circuit disagreed.

The appellate court examined the student’s individual circumstances, along with broader public policy interests, in making this decision. The Sixth Circuit’s decision explained that the student, “a vulnerable eleven-year-old with special needs” would suffer significant harm if prevented from using the girls’ restroom. Specifically, the majority pointed to the student’s “personal circumstances—her young age, mental health history, and unique vulnerabilities—and her use of the girls’ restroom for over six weeks, which has greatly alleviated her distress, [to] differentiate her case from” the Gloucester matter. In Gloucester, the Supreme Court granted a Virginia school district’s request for a stay, where the issue involves a high school transgender student’s request to use the boys’ restroom.

In Highland, the court explained that “staying the injunction would disrupt the significant improvement in Doe’s health and well-being that has resulted from the injunction [and] further confuse a young girl with special needs who would no longer be allowed to use the girls’ restroom…” The dissent argued that the status quo should have remained in place until the U.S. Supreme Court has issued a decision regarding this issue, as “similar treatment of similar plaintiffs is the essence of equal justice under law.”

The Supreme Court is set to decide the Gloucester case in 2017. The decision in Gloucester should resolve the issue of whether courts must provide deference to the U.S. Department of Education’s (“DOE”) interpretation of Title IX. Specifically, the DOE has provided that funding recipients must “generally treat transgender students consistent with their gender identity” which could be different than the student’s sex at birth.

While we await the Supreme Court’s decision in Gloucester, school districts should take note that, although the Highland decision was limited to the specific facts in that case, decisions from the Sixth Circuit are binding authority in Ohio.

Sara Markouc is an associate in the Education Law Services Group of Walter | Haverfield LLP.

The Private Sector.

Just before Thanksgiving, in a unanimous decision, the federal Sixth Circuit Court of Appeals ruled that local governments can enact right-to-work laws that will apply to private sector businesses and organizations whose labor relations are covered by the National Labor Relations Act (“NLRA”). Right-to-Work is shorthand for a law or ordinance that prohibits private sector collective bargaining agreements from making the payment of money to a labor union a condition of employment. The decision, United Autoworkers Union v. Hardin County, Ky., is now the law in Ohio, Kentucky, Michigan and Tennessee – the states that constitute the Sixth Circuit. Prior to Hardin, the NLRA was interpreted to reserve that right to the state government itself. Organized labor waged a furious, but ultimately futile campaign against the Hardin County law.

Ohio is bordered by three states that already have statewide right-to-work laws – Indiana, Michigan and West Virginia – and by a fourth state, Kentucky, that many labor observers expect to adopt one soon. To make themselves more attractive to business, cities and counties near these states are likely to be among the first adopters of a Hardin-type law or ordinance.

The Wall Street Journal reports that a similar case is underway in Illinois, which is in the Seventh Circuit in the federal scheme. If that case ever gets to the Seventh Circuit, which is likely because the stakes include untold millions of dollars in lost revenue for private sector labor unions, the result could be two neighboring federal Circuits that allow local right-to-work laws. On the other hand, if the Seventh Circuit answers the question differently than the Sixth Circuit did, the matter could land in the U.S. Supreme Court.

The Public Sector.

Public sector labor relations – police, fire, EMS, teachers, etc. – are covered by state law and not the NLRA. Consequently, there are dozens of different public sector labor relations statutes. Most state collective bargaining laws require public employees who work under collective bargaining agreements to either join the union and pay the dues the union charges or to opt out of union membership and pay to the union a fair share fee instead of dues. Each union must calculate its fair share fee in advance. Ohio’s Collective Bargaining Act requires fair share.

Recently, the fair share requirement was challenged under the U.S. Constitution in a California case known as Friedrichs v. California Teachers Association. That case made it to the U.S. Supreme Court, but was heard after Justice Antonin Scalia died and resulted in a 4-4, no-decision tie. There are several similar public sector cases in the works, but they will likely take several years to reach the Supreme Court, if any one ever does. However, right-to-work currently is a hot topic in labor law and given the November election results, Ohio and many other states are expected to tackle it in both the public and private sectors. As of December, 2016, Republicans outnumber Democrats 64 to 34 in the Ohio Assembly, and 23 to 10 in the State Senate.

Fred Englehart is a senior counsel attorney with Walter | Haverfield’s Labor and Employment Law group.

As seen in Crain’s Cleveland Business on November 15, 2016

No one would argue that the Cleveland Indians had a great run this past season. Thanks to their qualifying for the World Series, images of Chief Wahoo deluged our television screens, our print media and our social media postings. Beneath the fanfare, however, are some very serious legal issues that could ultimately challenge the long-term use and value of the Indians icon.

The battle over the appropriateness of using Chief Wahoo has been raging for years now. In 2014, when the Washington Redskins lost a legal battle to protect the registration of its own mascot and Redskins name, the questions around the continued use of Chief Wahoo again came to the forefront. More recently, another legal battle began when a band called “The Slants” attempted to register the band’s name which was considered to be disparaging against persons of Asian descent.

At issue is a federal law that bars the registration of trademarks which consist of or comprise immoral, deceptive or scandalous matter or matter which may disparage individuals. With all of the current focus on the rights of American citizens, there are some in the legal field who argue that this law, which is part of the 1946 Lanham Trademark Act, violates Americans’ rights to free speech. This is one of the arguments being used by the Washington Redskins, who are attempting to overturn the 2014 decision issued by the Trademark Board of the United States Patent and Trademark Office (USPTO) which resulted in the Redskins’ trademark registrations being cancelled — even after decades of using the familiar icon and name. Similarly, THE SLANTS mark was denied registration by the USPTO, but this decision was reversed on appeal by a Federal Court. The Slants’ case is expected to be heard by the Supreme Court sometime in mid-2017.

In early 2016, a similar attempt to cancel a Chief Wahoo logo registration was filed with the USPTO by an organization called People Not Mascots, Inc. There are also, of course, numerous protests and negative publicity involving Chief Wahoo. The matter at the USPTO involving the Chief Wahoo registration is suspended until the Supreme Court makes a decision on THE SLANTS.

So what does all this mean for the Chief Wahoo trademark? With the notoriety of the ongoing dispute involving the Redskins’ trademarks and the more recent publicity around The Slants, there is certainly the possibility that the use of Chief Wahoo could be abated. Of course, at a time when Cleveland is playing in the World Series, most fans don’t want to think about their team without their beloved Chief Wahoo. Depending on how the Supreme Court decides in The Slants’ case, it is something worth considering—perhaps not right now but not-too-far into the future.

What would it mean if one were to successfully challenge the Chief Wahoo trademark registration? The effects would likely not be felt immediately. After all, the Indians have been widely using Chief Wahoo for decades. The loss of the registration would not mean they couldn’t continue using the logo. It is important to consider that trademarks are created as a result of use. However, without protection of the trademark by a federal registration, it may potentially be more difficult to justify the continued use of the trademark. Most organizations, whether they are manufacturers or sports teams, would agree that it’s not worthwhile to keep investing to build goodwill in something where there might be more difficulty to ensure sufficient protection.

Ultimately what will be the fate of our longstanding Chief Wahoo? Only time (and the courts) can tell. In the meantime, however, this situation provides some valuable lessons for entrepreneurs and corporations that have trademark assets worth protecting by registrations. For some organizations that couldn’t previously register a trademark that was seen as disparaging, offensive, immoral, or the like, they could potentially be able to secure a registration if the courts strike down the relevant provision of the federal law. If the court determines alternatively, then organizations that thought their controversial or offensive trademarks were protected could lose their registration, potentially making it more difficult to keep copycats at bay. In turn, it could be easier for organizations to challenge such offensive trademarks.

Organizations looking to create a new trademark should heed the current controversies, perhaps avoiding altogether a trademark that could be seen as offensive, and ultimately not registrable or easily challenged (not to mention the marketing issues surrounding such trademarks).

Whichever way the courts decide, the importance of registering a trademark cannot be overstated. Although a trademark can be created by adding a “TM” after the name or symbol with continued use, an official registration of that trademark makes it a legally protected asset across the country. Don’t make the mistake of leaving one of your company’s most valuable assets unprotected.

In the meantime, let’s celebrate a phenomenal season and look forward to an even more successful 2017 season!

Sean Mellino is a partner in the intellectual property practice group of Cleveland-based Walter | Haverfield LLP.

In its first significant action under the Frank R. Lautenberg Chemical Safety for the 21st Century Act of 2016, the U.S. Environmental Protection Agency (EPA) has issued a proposal to ban the manufacture, import, processing, distribution and commercial use of the chemical trichloroethylene (TCE) for aerosol degreasing and spot cleaning in dry cleaning facilities. The EPA’s proposal, issued December 7, 2016, also seeks to require manufacturers, processors and distributors, (not including retailers) to provide downstream notification of TCE use prohibitions throughout the supply chain and to keep limited records.

TCE, also known as tetrachloroethylene and perchloroethylene, is one of 10 chemicals the EPA has identified for priority risk assessment under the Lautenberg Act, which made significant changes to the Toxic Control Substances Act of 1976 (TSCA) and required the EPA to publish a list of 10 priority chemicals by December 19, 2016. According to the EPA, the 10 chemicals were selected based on multiple factors, including their prevalence as environmental contaminants, their widespread use (especially in consumer products), and their perceived or known hazards.

The finalization of the EPA’s priority list will start the clock running on the agency’s obligation to complete a risk evaluation for each of the 10 chemicals within three years. These evaluations will determine whether the chemicals present an unreasonable risk to humans and the environment. If an unreasonable risk is found, the EPA must take action to mitigate that risk within two years.

In general, TSCA authorizes the EPA to require reporting, record-keeping and testing and to issue restrictions relating to chemical substances and/or mixtures. It does not apply to certain substances, such as food, drugs, cosmetics and pesticides, which are separately regulated. With the Lautenberg Act, the EPA now has the power to require safety reviews of all chemicals in the marketplace. This is a fundamental shift in the requirements and approach for addressing chemical safety under TSCA. The EPA has stated that the amendments to TSCA will allow the government to better protect public health and the environment.

TCE is a liquid volatile organic compound (VOC) that has long been considered a probable human carcinogen. In 2014, the EPA completed a risk assessment for TCE which identified serious risks to workers and consumers associated with certain uses of TCE based on its potential to cause a range of adverse health effects. Because the TCE risk assessment was completed prior to the 2016 amendment of TSCA by the Lautenberg Act, the EPA already has authority to publish proposed and final rules covering certain specific uses of the chemical.

It is estimated that around 250 million pounds of TCE are produced or imported into the U.S. per year. Although the EPA’s current proposal is limited to banning TCE as an aerosol degreaser and spot remover in dry cleaning operations, the agency is evaluating whether TCE should be prohibited, in other uses, such as vapor degreasing. The agency is developing a separate proposed regulatory action to address those risks.

Although TSCA imposes most of its requirements on chemical manufacturers, importers and processors, owners and operators of properties and facilities that conduct aerosol degreasing or dry cleaning operations should pay close attention to the fast-changing regulatory landscape surrounding TCE and other toxic substances. By being aware of the types of risks they are exposed to and of significant developments in regulation and litigation, property owners can make better informed decisions about risk management, including decisions concerning lease provisions and environmental insurance protection.

Leslie Wolfe can be reached at 216-928-2927 or

It’s early in the year. Famco’s employees are looking to get their taxes done. Anticipated refunds will ease the pain from holiday excess. The small manufacturer’s CFO sighs in relief that the rush to complete the corporate W-2s is done. Down the hall, Famco’s controller opens an email from his CEO. Nothing out of the ordinary in how it looks, but its message is a bit odd. The CEO says she’s working on a significant project for tax purposes and needs all employee 2016 W-2s pronto in .pdf form. She’s a hard driver. The controller fears wasting her time if he raises questions, so he dutifully rolls all the W-2’s into one attachment and responds.

No questions asked–just obedience–even though he knows the CEO never works hands-on at this level. But, if that’s what she wants…

The next week, one of Famco’s sales managers stops by the CFO’s door complaining that he couldn’t file his taxes electronically. The IRS claimed to already have his return on file. He expects a substantial refund and is frustrated. The next day, Famco’s logistics coordinator emails the CFO asking about problems with the IRS refusing to accept tax returns.

Curious now, the CFO visits the IRS website. He sees an IRS Notice about false tax returns being filed by criminal elements claiming taxpayer refunds. The ruse is discovered when the taxpayer’s efforts to file electronically are rejected. The Notice warns this is now a common internet scam, “phishing”, where the scammer duplicates a corporate email style and uses what looks like a CEO’s email address as the originating email to a CFO or controller seeking employee W-2s. But the key to the scam is that the email’s return domain is almost imperceptibly varied. Instead of “”, it might be, “CEO@famcorp.rus” or some other slight, but significant, shift.

Famco’s CFO immediately calls his staff together. The controller mentions the CEO’s email and how he timely and duly responded, no questions asked. Copies of the relevant emails are produced. Indeed, the controller’s response with the W-2s was routed not to the CEO, but rather to the internet’s dark underbelly, putting all employee personal identifying information, “PII” (e.g., here: names, addresses, social security numbers and earnings), instantly in scammers’ hands. Sickened, the CFO takes this information to the CEO.

Famco has a serious, immediate problem, and the CEO is very concerned. Suddenly the entire cybersecurity of the company is in doubt. The company’s counsel must be involved. The Tech Support team verifies there was no breach of their firewalls or security in software or hardware. Costly and embarrassing employee notifications must be issued. But how? When?
Federal or state mandated public notification may be necessary. Risk scenarios have to be determined. Do law enforcement authorities need notification? Is that confidential? Board or even shareholder notification requirements may apply. Identity protection needs to be purchased for impacted people at the company’s expense. What about cyber-risk insurance coverage? Intercepted Famco employee refunds need recompense.

The list goes on. Even for a small company such an event can crush profits or worse, with remediation costs running deep into the thousands, tens of thousands of dollars or even more. Larger companies can expect remediation costs running into the millions of dollars as the number of those impacted skyrockets. Bad publicity, loss of goodwill and reputational damage just pile it on.

Some corporate leaders may scoff, “that will never happen to us!” In reality, the question is not “if”, but “when”. Thousands of upstanding companies, large and small, around the country were scammed like this in the past two years alone. Walter | Haverfield’s Cybersecurity Team received a number of client calls here as tax season unfolded last year. No doubt new scams are developing for 2017.

But this sort of phishing scam is avoidable if the company creates an atmosphere of 360-degree verification on trade secret, intellectual property, PII, and other confidential information. Had the controller simply verified the email request with the CFO or even the CEO, the entire disaster would have been avoided. A priority must be stressed within the company of verifying questionable or even routine-looking requests for such information up the chain of responsibility. Company policies need to be in place – with employees trained — requiring verification either in person, by phone, or by separate (not “reply”) email before response to such emails, regardless of the person purportedly seeking the information.

Although Famco is a fictitious name here, these incidents are as real as real can be. The time to “respond” to an incident is before the incident by putting the company’s response outline in place in advance of a breach. Only the scammer knows when that will happen. Experienced cybersecurity attorneys can assist in developing such policies and even more importantly can help create an Incident Response Plan or Cyber Incident Management Plan. If disaster strikes your company—whether or not you had adequate plans in place–make sure you have the right legal resources to help assist in getting through these problems efficiently, effectively and economically.

Craig Marvinney can be reached at 216-928-2889 or

Americans spend a lot of time at work. A recent study published by, in fact, suggests that the average American works almost 25 percent more hours than the average person in Europe. The raw numbers are about 258 more hours per year which averages out to about an hour more each week day. Comparing working life between countries in an apples-to-apples comparison can be tricky when considering the increasing frequency of remote work. Yet, most people would likely agree that Americans are putting in some real hours on the job.

With a new administration coming into office, there is plenty of speculation as to how workplace laws and regulations might change. While we’re all speculating, let’s consider a long gestating Republican initiative concerning work/life balance that just might become law during a Trump presidency—a re-introduction of compensatory time into private sector workplaces.

Compensatory Time (frequently referred to as comp time) is the practice of an employer providing future paid time off in lieu of immediately paying overtime wages for hours worked over 40 in a week. So, for example, if an employee classified as non-exempt under the Fair Labor Standards Act (FLSA) were to work 45 hours in a given work week, the employer and the employee could agree under a comp time scheme that the employee could bank 7.5 hours of paid leave time for future use. Public sector employers are likely familiar with comp time, as it is a common (and lawful) practice in the public sector. However, the FLSA currently only allows private employers to use comp time under very narrow and limited circumstances.

Congressional Republicans have been pushing the concept of making comp time schemes more broadly lawful for private sector employers for quite some time now. In 2013, the Working Families Flexibility Act was introduced and passed by the U.S. House of Representatives, before dying quietly in the U.S. Senate. The bill was re-introduced in the last Congress and, as the bill’s main proponents (in both the House and the Senate) will all return for the next Congress, it is likely to be re-introduced again. In addition, since President-Elect Trump’s nominee for Secretary of Labor, Andy Puzder (a fine Clevelander!), is a long-time advocate of FLSA reform and workforce flexibility, it is not unreasonable to believe a revamped Working Families Flexibility Act would be signed by President-Elect Trump.

The most recent version of the Working Families Flexibility Act placed a cap on comp time accrual at 160 hours a year. This is a lower cap than the FLSA currently imposes on public employers (240 hours for most public employees and up to 480 hours for safety and emergency forces). The latest iteration of the bill also required cash-out of unused comp time at year’s end. It is important to note that comp time arrangements (both currently for public employees and under the Working Families Flexibility Act’s proposed terms) must be voluntary, i.e. agreed-to ahead of time in writing either between employer and employee or between employer and a representative union.

Given that work/life balance is an enduring issue in the American workplace, employers should continue to evaluate policy tools by which employees can take a breather without unduly disrupting their employers’ operations.

Other (Less-Speculative) Wage and Hour Developments.

New FLSA Overtime Rules Remained Stalled: An injunction barring the implementation of new Department of Labor (DOL) regulations raising the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the FLSA’s overtime requirements has been appealed by the DOL to the U.S. Fifth Circuit Court of Appeals. The Fifth Circuit agreed to hear the DOL’s appeal on an expedited basis but not before the new Trump Administration takes office. Again, the recent nomination of Andy Puzder (an outspoken foe of the new overtime regulations) as Secretary of Labor strongly suggests that this appeal will be abandoned and that the regulations will never be implemented (at least in their current form).

Ohio Minimum Wage Increases in 2017: As we previously reported, as of January 1, 2017, Ohio’s minimum wage will increase to $8.15 per hour for regular hourly employees. The minimum wage for tipped employees will increase to $4.08 per hour. Ohio’s minimum wage is currently $8.10 per hour for regular hourly employees. The minimum wage for tipped employees is currently $4.05 per hour.

Cleveland Minimum Wage Ballot Initiative Blocked: As we also previously reported, Cleveland voters were to decide in a special election in May whether to incrementally increase the minimum wage for businesses operating in Cleveland to $15.00 an hour. However, Governor John Kasich signed a bill prohibiting municipalities from passing minimum wage ordinances different from the state’s minimum wage.

George Asimou can be reached at 216-928-2899 or

If your business has a trademark but hasn’t registered it, one of your most valuable assets could be at risk. A key challenge is that many businesses that use trademarks are not even aware that they can and should be registered.

A trademark is a word, phrase, symbol or design, or a combination of any of these that identifies and distinguishes the source of the goods of one party from those of others. Registration of trademarks offers multiple benefits, including the ability to use the registered mark (®) adjacent to the trademark to clearly indicate that it is valuable enough to be registered with and protected by the United States Patent and Trademark Office (USPTO). Registration also gives the trademark owner access to the federal courts throughout the U.S. and the ability to register the trademark with the U.S. Customs and Border Protection Bureau. Failure to register a trademark can enable third parties to use it or something that is confusingly similar to market their own products, thereby devaluing what could have been a significant asset for the business.

In some cases, businesses use trademarks without realizing that they are trademarks and that they could be registered. Trademarks can exist in many forms including, but not limited to: names of specific products or services; logos for the business or particular products or services; specific colors used with products; characters used in corporate ads, such as pictures of babies, novel creatures, borders, outlines, etc; or product trade dress, which refers to visual characteristics of a product
or its packaging. Without the protection of registration, these marketing assets could be used by another company–perhaps a direct competitor–without easy recourse.

Trademarks can be registered if they are not confusingly similar to other already registered trademarks and if they pass an opposition process which allows the public an opportunity to oppose any published mark believed to be damaging to the opposer. Owners of unregistered trademarks unfortunately would likely not even be aware of the publication of a competing mark for opposition.

An easy, inexpensive registration process

Registering a trademark with the USPTO is relatively easy and inexpensive. The first step is to contact an intellectual property (IP) attorney who practices trademark law to determine if the trademark can be registered. The attorney will conduct a search of trademarks filed and/or registered at the USPTO to determine if any are “confusingly similar” to the trademark under consideration. During this process, the attorney considers key features of the trademark, including its visual appearance and meaning, to determine if anything could be considered “confusingly similar.” The cost of a search is usually less than $1,000.

The attorney must also determine if the mark is “merely descriptive,” which means it is descriptive of the goods or services with which it is used. If the mark “fails” this test, the attorney may advise the client to select a different trademark. Otherwise, the attorney will proceed to prepare an application for filing. It’s important to note that the trademark must already be in use in interstate commerce or the owner must have a bona fide intent to use the trademark in commerce in order for an application to be successfully filed. As part of the application process, the attorney will designate the goods and/or services with which the trademark is to be used. Typically it’s better to use the goods and/or services that are designated in the classification manual of the USPTO, since this will reduce the government filing fee. Typical fees are approximately $275 per class. In most cases, especially when dealing with smaller businesses, the trademark is only filed in one class to minimize costs.

The application is filed electronically online with the USPTO for review by an examining attorney often for less than $1,500. Assuming the application passes the examination, the trademark is then published for opposition before the Trademark Trial and Appeal Board. In most cases, there is no opposition filed. In some cases, there may be an applicant using the same or similar trademark for different goods and services. In these cases, applicants could sign an agreement to not use the trademark on those goods or services of the opposer.

The total cost for registering a trademark (assuming little or no opposition) is typically less than $3,000, not including the government filing fee. This is a relatively small investment considering the long-term potential value of the trademark. The average approval process takes between one and two years.

Protecting trademarks abroad

It’s important to note that a U.S. trademark registration is only valid and enforceable in the U.S. Business owners who are concerned about possible trademark infringement by goods or services made, used or sold in other countries, possibly for import into the U.S., can apply for foreign trademark registrations which are also relatively simple and inexpensive. According to reciprocal trademark laws between the U.S. and most foreign countries, a U.S. trademark applicant can file a corresponding application in nearly any other country within six months of the U.S. filing date and still obtain the effective filing date of the U.S. application.

It is possible to file applications in groups of countries for a reduced filing fee. Most countries in Europe, for example, belong to the European United Intellectual Property Office (EUIPO), so an applicant can file a single application and obtain a registration that is enforceable in all member countries of the EUIPO. Considering that many products are made in China and sold in the U.S., it is very common for U.S. trademark owners to also file applications in China.

Considerations for licensing trademarks

Trademarks can be licensed to other businesses, especially in cases where the business of the trademark registrant cannot be marketed in a particular region or to different classes of goods. However, licensing agreements should always require the licensee to meet certain quality standards in order to maintain the value and integrity of the trademark. Licensors should regularly police the use of the trademark by licensees. A license without an accompanying quality and policing agreement is referred to as a naked license and could lead to an invalidation of the registration.

The value of trademark registrations in an effort to protect valuable trademarks cannot be over-emphasized. As this article has documented, the process for registering trademarks in the U.S. and abroad is relatively easy and inexpensive, hopefully making trademark registration a consideration for even the smallest of businesses.

Peter Hochberg is a partner in the Intellectual Property group at Walter | Haverfield. He can be reached at 216-928-2903 or

The Department of Homeland Security’s U.S. Citizenship and Immigration Services introduced a new version of the Form I-9, Employment Eligibility Verification. The new form can be accessed HERE.

Starting January 22, 2017, employers must use this new version of the Form I-9 in connection with all new hires in the United States. Section 3 of the new Form I-9 is also required to be used in the event a current employee authorized to work under a prior version of the Form I-9 must be re-verified after January 21, 2017. In such cases, simply append the new version’s Section 3 to the employee’s previously completed Form I-9.

No action is needed for current employees with properly completed Form I-9s not requiring re-verification of their work authorization.

The new version of the Form I-9 – which includes the marking “11/14/2016 N” in the footer at bottom left corner of the form – replaces a prior version marked at bottom left as “03/18/13 N.” The new and prior versions are in most ways identical. The chief difference is that the new version is intended to be easier to complete on a computer, featuring such “smart” features as drop down menus, hover messages, and real-time error indicators – in essence, all the tools that have long been available to consumers in everyday e-commerce. These innovations aside, the Form I-9 still needs to be printed out and signed in hard copy for recordkeeping purposes.

While technical compliance requires that the new version of the Form I-9 be used as of January 22, 2017, our recommendation is that employers start using the new version immediately.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

George J. Asimou is an associate in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

As seen in Crain’s Cleveland Business on January 14, 2017.

Closely held business owners know they someday need a succession plan, but most are focused on day-to-day operations and delay addressing the transition process. Company and family dynamics are unique to each situation, so there is no one-size-fits-all solution. Often, the hardest part is knowing where to start. The simplest way is to ask three critical, interrelated questions.

1. Who is involved?

Identify all existing stakeholders. Address which trusted stakeholders can continue operations. Those given management responsibility do not need to be the same people who take ownership.

Then identify (a) what additional training is needed to allow designated successors to run the business; (b) how to compensate successors to keep them incentivized; (c) what is needed to keep management personnel from being removed if they don’t control equity; and (d) a backup plan should preferred management exit the business.

If no one from the next generation can successfully take over, owners must search for outside talent or begin strategic planning required to prepare for a company sale to an unrelated buyer.

2. When to transition?

Most family owned business owners have identified a date (or age) when they want to walk away from day-to-day operations. Ask if current owners desire to remain involved in critical decisions going forward or if they want to exit without looking back.

Tax and estate planning may be required to ensure ownership transfer is completed in the most efficient manner. Consider if it is advantageous to transfer equity over time or implement a recapitalization to separate voting and economic interests.

Certain deferred compensation plans and insurance products are most useful when implemented in advance of retirement.andnbsp; Your transition structure will drive these transfer dates.

3. How to implement the plan?

Economics drives most succession plans. Do current owners plan to give the company away, or do they desire a buyout? Do the proposed future owners agree to assume financial responsibility and ensure their elders get paid?

Knowing exactly who expects to be paid and in what amounts allows planning to maximize payout and minimize taxes. The succession proposal should be communicated to all parties before drafting documents.

Once there is sufficient consensus from all participants, the formal succession plan should be created through corporate agreements and estate documentation.

Experienced financial, accounting and legal counsel can provide options and identify areas of concern. A good succession plan will eliminate lingering uncertainties and ensure your company’s long-term future.

Jacob Derenthal is a partner in the Corporate Transactions Group of Cleveland-based Walter | Haverfield LLP.

The Trump Administration made a significant move Wednesday night in the national debate regarding transgender students’ rights by withdrawing previously issued guidance from the United States Department of Education (“DOE”) and Department of Justice (“DOJ”) on the topic. The prior guidance from the DOE and DOJ, which was issued by the Obama administration in May 2016 (“May guidance”), interpreted Title IX as requiring treatment of students in a manner consistent with their gender identity. The May guidance provided examples of policies and practices to support transgender students, such as utilizing the name the student has selected, requiring access to restrooms, locker rooms, and overnight accommodations for school trips in accordance with the gender with which the student identifies.

Amidst significant backlash, numerous states sought to invalidate the May guidance through a federal lawsuit in Texas v. United States. The Trump Administration’s Dear Colleague letter which rescinded the May guidance referenced that lawsuit and further stated that the May guidance lacked a formal public vetting process, extensive legal analysis, and an explanation of how the position is consistent with Title IX language. The Trump Administration’s letter also stated that there are conflicting national court decisions and further noted the role States and local school districts should play in educational policy development.

While the May 2016 guidance has been rescinded in favor of State control over the issue, the Trump administration noted that transgender students should be protected from discrimination, bullying and harassment. In a press release, the U.S. Secretary of Education Betsy DeVos emphasized a federal mandate and moral obligation to protect all students and ensure a safe and trusted environment, in which to learn and thrive.

This rescission of the May 2016 guidance comes just weeks before the United States Supreme Court is set to hear oral arguments in Gloucester County School Board v. GG. The Court was set to review whether deference should extend to the DOE’s prior interpretation of Title IX in relation to gender identity. With this new development, the Supreme Court must choose whether or not it will address these questions now.

Finally, while the DOE and DOJ’s prior position has been rescinded by the Trump Administration, the recent decision of the federal Sixth Circuit Court of Appeals in Board of Education of Highland Local School District v. United States Department of Education, et al. remains in effect at the moment. The Highland Court affirmed the decision of the United States District Court for the Southern District of Ohio, which found that a transgender student should be allowed access to the restroom of the gender with which the student identified and should also be called by the pronoun of the gender with which the student identified. The Sixth Circuit Court of Appeals is binding on public school districts in Ohio, absent a contrary ruling from the United States Supreme Court. Thus, school districts should continue to watch for further developments and consult with legal counsel as issues arise.

Lisa Woloszynek is an associate in the Education Services group of Cleveland-based Walter | Haverfield LLP.

In last week’s high-profile decision, the Supreme Court permitted parents to skip the due process complaint procedures if their claims relate primarily to Section 504 of the Rehabilitation Act of 1973 (“Section 504”), rather than the Individuals with Disabilities Education Improvement Act (“IDEIA”). The IDEIA requires school districts to provide qualifying students with a free appropriate public education (“FAPE”) through specially-designed instruction and related services. Section 504, however, is a more general law prohibiting discrimination and obligating districts to provide equal access to public institutions to all persons with disabilities. In the past, courts have often required dissatisfied parents to exhaust the special education due process procedures, even if their claims related primarily to Section 504, and did not involve FAPE under the IDEIA. In Fry v. Napoleon, however, the Supreme Court rejected this approach and provided new parameters for claims appearing to relate to both laws.

This case features E.F., a middle school student with cerebral palsy and a service dog (a goldendoodle named Wonder). Because the dog helped E.F. with various needs throughout her day (opening doors, retrieving dropped items, etc.), E.F.’s parents wanted Wonder to accompany her to school on a full-time basis. The school refused, citing the one-on-one aide assigned to assist E.F. throughout the day as part of her IEP. After the Office for Civil Rights sided with the parents, the school agreed to allow the dog in school to provide E.F. with assistance during the day. E.F.’s parents, however, were concerned about potential resentment issues, and chose to move their child to a different district. The parents then sued in federal court, alleging that the district violated Section 504 and the Americans with Disabilities Act (“ADA”).

The lower courts dismissed this lawsuit, noting that – because any alleged harm to E.F. was generally education-related – the parents were first required to file an IDEIA due process complaint before suing in court. The Supreme Court, however, explained that if a lawsuit does not hinge on a FAPE analysis, the hearing officer cannot provide the requested relief, and a due process hearing is not proper – and not necessary.

In determining whether a complaint primarily addresses FAPE, the Court offered the following tests:

  • First, could the plaintiff bring the same claim if the problem took place at any public facility, not just a school?;
  • Next, could any adult at the school have brought the same claim?

Affirmative answers to these inquiries would indicate that the matter is not a true IDEIA claim, and that a due process hearing is unnecessary. The Court also suggested that starting the IDEIA due process, only to drop it later in favor of going to court, could indicate that the conflict was related to FAPE all along. In short, the Court sought to strike a balance between allowing parents to pursue their claims in federal courts and protecting school districts from FAPE complaints disguised as Section 504 allegations. In moving forward, school districts and their attorneys will need to carefully review parents’ claims and factual history before determining the best course of action.

Miriam Pearlmutter is an associate in the Education Services group of Cleveland-based Walter | Haverfield LLP.

On March 22, 2017, the United States Supreme Court, in the case of Endrew F. v. Douglas County School District RE-1, created a new standard for determining whether a student with a disability under the Individuals with Disabilities Education Improvement Act (IDEIA) has been provided with a free appropriate public education (FAPE). In Endrew F., the Court was asked to decide the degree of “educational benefit” a child must receive in order for the school district to have provided a FAPE. The lower court in Endrew F. used the “merely more than de minimus” standard that had been adopted by the Tenth Circuit Court of Appeals. The U.S. Supreme Court unanimously rejected this standard and instead held that in order “to meet its substantive obligation under the IDEIA, a school must offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.” Endrew F. ex rel. Joseph F. v. Douglas Cty. Sch. Dist. RE-1, No. 15-827, 2017 WL 1066260, at *1 (U.S. Mar. 22, 2017) (emphasis added).

In reaching this decision, the Court reasoned, “[i]t cannot be right that the IDEIA generally contemplates grade-level advancement for children with disabilities who are fully integrated in the regular classroom, but is satisfied with barely more than de minimis progress for children who are not.” Id. at *2. Notably, the Court did not reject or overrule Rowley v. Hendrick Hudson School District, the U.S. Supreme Court case that first established a standard for the provision of FAPE. Rather, the Endrew F. Court noted that Rowley “did not provide concrete guidance with respect to a child who is not fully integrated in the regular classroom and not able to achieve on grade level.” Id. The Court further explained that a child’s IEP need not “aim for grade-level advancement if that is not a reasonable prospect.” Id. However, that child’s “educational program must be appropriately ambitious in light of his circumstances, just as advancement from grade to grade is appropriately ambitious for most children in the regular classroom.” Id. The Court went on to state that every child should have the chance to meet challenging objectives.

In setting forth this new standard, the Court rejected the parents’ argument that the IDEIA requires school districts to provide children with disabilities with educational opportunities that are “substantially equal to the opportunities afforded to children without disabilities.” Id. The Court noted that this standard had been rejected by the Supreme Court in Rowley and that Congress has not materially changed the definition of FAPE since Rowley was decided. Consequently, the Court declined to adopt the higher standard advocated by the parents.

The standard adopted by the Endrew F. Court does not create a bright-line rule. Rather, “[t]he adequacy of a given IEP turns on the unique circumstances of the child for whom it was created.” Id. at *3. This standard appears to be similar to the heightened “meaningful educational benefit” standard, as outlined by the Sixth Circuit Court in Deal v Hamilton County Board of Education. Both Endrew F. and Deal require an analysis of the child’s capabilities and potential for learning to determine the appropriateness of the child’s IEP.

From a practical standpoint, the Endrew F. standard places renewed emphasis on the need for comprehensive evaluations (and reevaluations) of students with disabilities. Without this data, it will be difficult for a school district to demonstrate that a child’s progress is “appropriate in light of the child’s circumstances.” School districts must also continue to be mindful of the requirement that a student’s IEP goals must align with the needs set forth in the evaluation team report. Additionally, districts should continue to ensure that intervention specialists and related service providers collect data in accordance with each student’s IEP and reconvene IEP teams as necessary based on the data collected.

Christina Peer is a partner and the Chair of the Education Services group of Cleveland-based Walter | Haverfield LLP.

“Small Claims Recovery Increased to $6000 – Should Your Business Be Thinking Small?,” also appeared online in Crain’s Cleveland Business on April 3, 2017.

Late last year, Governor Kasich signed a law that doubled the maximum amount of money recoverable in small claims court, from $3,000 to $6,000. As with any new law, the increase in maximum recovery in small claims court has both positive and negative consequences on Ohio businesses.

On the plus side, one of the main purposes of this change was to permit businesses to recover debts, while avoiding the high cost and length of litigation often found in other courts. For example, in Cleveland Municipal Court, the filing fee for a complaint is $122, but a small claims complaint only costs $37 to file. Because there is typically no discovery, small claims cases tend to be resolved much more quickly. And, under Ohio law, a company can – subject to strict limits – be represented in small claims court by a non-lawyer. (Importantly, although a company may file and present its claim or defense, it cannot engage in cross-examination, argument, or other acts of advocacy without representation by an attorney. Think carefully before selecting this route.)

On the other hand, the new law also has the potential for negative effects. For example, businesses may see an uptick in cases being filed against them in small claims court. As there are no subject matter limitations in small claims court, these filings could include breach of contract and other business disputes, routine slip and falls, and others. Additionally, the monetary increase has the potential for an increase in meritless and frivolous filings. This is because potential plaintiffs now stand to recover twice as much as they could have previously.

Procedurally, the small claims process is fairly straightforward. First, a claim is filed. Typically, this is a single page form identifying the parties, stating the basis for the claim, and including the amount of money the plaintiff seeks to recover from the defendant. After the complaint is filed, the court will set the trial date, usually around 30 to 60 days after the complaint is filed. A party who is sued can counter-sue by filing a counterclaim at least seven days before the trial. Typically, there is no discovery. Witnesses can be compelled to appear by serving them with a subpoena.

On the date of the small claims trial, the parties appear, exchange any documents they want to present to the judge, and possibly discuss settlement. Absent a settlement, the presiding judge begins the trial and it is concluded in approximately 15 to 20 minutes.

In contrast, civil litigation in municipal or common pleas court is not as quick or simple. First, the complaint requires a written response from the defendant. Then, the court sets a status conference for the parties to meet, discuss the case, and set a trial date – which could be a year or more away. Next, written discovery is exchanged and depositions are taken. The legal fees and expenses resulting from this process can amount to an expenditure of time and money that is disproportionate to the value of the claim itself.

For example, before the law was changed, a business seeking to recover on an unpaid debt for $4,000 had to file in municipal court. Because a business cannot pursue a claim without legal representation, it had to make a decision whether it wanted to pursue the claim and pay an attorney or simply let it go. No longer does that business have to make such a determination due to the changes made by this law.

With the increase in the amount of recovery, now is a good opportunity for businesses to review their policies and procedures with respect to documenting losses. If an accident occurs, it is important to document what occurred, who are the witnesses, and take written statements and photographs. As time passes, employees come and go, memories fade and it becomes increasingly difficult to prosecute or mount a defense to a claim. For example, the time period to file a slip and fall case is two years and a breach of written contract is eight years. To that end, it is important to ensure that when the time does come to either present or defend a small claims lawsuit, that your business is in the best position to do so. In order to accomplish that, immediately contact your attorney and provide him/her with your claim or the small claims complaint and any supporting documents that you may have in your possession regarding the incident or business dispute.

Companies big and small can be dragged into small claims court, so do not believe that your company is immune from litigation. Many plaintiffs may consider small businesses as easy targets and try to focus their claims on those businesses. On the other hand, plaintiffs will just as likely target large businesses due to their erroneous belief that a small claims complaint will get lost in the day-to-day operations, no one will appear to defend the claim and an easy award of $6,000 can be obtained. Therefore, it is recommended that if a company is sued or wishes to pursue a small claims action, that it retains an attorney. Without an attorney and in the likely event that the opposing party appears, the company’s representative cannot question their claims or defenses. That will significantly hamper the company’s ability to prevail on its claim or defense.

With the increase in the amount of recovery to $6,000, the prospect of lengthy and expensive litigation becomes minimized. As such, companies should begin to consider and incorporate the strategies discussed into their business plans and start thinking small . . . small claims that is.

For additional information or legal guidance, contact David M. Kroh at (216) 619-7838 or

Social media exploded recently when a passenger aboard a United Airlines branded flight was forcibly removed from his seat by airport security, in part to make room for four airline employees who needed to be at the intended destination to crew another flight. (No doubt to the chagrin of United CEO Oscar Munoz because the fact that the flight was actually run by one of the airline’s regional affiliates, Republic Airlines, was lost on the general public.) This raises the question: When you pay for your airline ticket, do you have a legal right to a seat on the airplane?

It is a fact of life that airlines routinely overbook their flights. Put another way, they sell more tickets than there are available seats. Overselling inventory would not be acceptable in most other businesses but, not only is it common in the aviation industry, it is perfectly legal.

Surprisingly, however, the practice doesn’t usually result in a significant dust-up captured on video and shared across the Internet. According to the Federal Bureau of Transportation Statistics, in 2015 more than 613 million persons were boarded on flights run by the nation’s largest air carriers. Only 552,000 were denied boarding and, of those, only 46,000 were involuntarily denied boarding. (The rest were voluntarily “bumped,” meaning they took another flight and/or received compensation from the airline for their inconvenience.)

So, should you draw a line in the sand if you become one of the unlucky and are involuntarily denied boarding or are asked to leave an overbooked flight when other volunteers aren’t forthcoming?

First, federal regulations require that the carrier offer you compensation for a voluntary bump. There are no hard-and-fast rules about how much or what has to be offered as an incentive. According to “Fly Rights,” a pamphlet published by the Department of Transportation on the subject (available here), “Carriers can negotiate with their passengers for mutually acceptable compensation.” So if what’s being offered isn’t enough to interest you, don’t be afraid to ask for more.

Second, understand that even though you have paid for a ticket, you are not absolutely guaranteed a seat. Your rights will be governed by the airline’s Contract of Carriage, which does not assure you the availability of a seat, even if you have paid for the ticket. Instead, the airline reserves the right to decide who will be given priority as to seats. For example, United’s Contract of Carriage says that the priority of confirmed passengers “may be determined based on a passenger’s fare class, status of frequent flyer membership, and the time when the passenger presents him/herself for check-in without advanced seat assignment.”

Third, the Contract of Carriage probably limits your ability to recover compensation from the airline if you are involuntarily denied boarding. Again, under United’s contract, liability is limited to actual, proved damages, which cannot exceed $1350. You may be far better off bargaining for compensation than standing firm and trying to bring a claim later.

Finally, keep in mind that the Federal Aviation Regulations empower the pilot-in-command of an aircraft to determine whether any individual can be denied transportation on the basis of safety concerns. Such authority cannot be exercised with unfettered discretion. Rather, the decision to deplane a passenger must be reasonable and can be reviewed by a court if challenged. But it’s probably wise to think twice before refusing a directive from the pilot to deplane.

There’s little doubt that getting involuntarily bumped can disrupt travel plans and be distressing. No one wants to be forcibly deplaned. If this unfortunate situation befalls you, use your smartphone to check the contract of carriage and make sure that you are fully compensated, as is your right.

Darrell Clay is a partner in the Litigation services group of Cleveland-based Walter | Haverfield with a practice focused on aviation law, complex civil litigation, and white collar criminal defense. He is an instrument-rated commercial pilot.

Educational podcast provides insights on latest court cases and helps
guide school superintendents and administrators through quickly
changing regulatory landscape

To help school districts stay abreast of the latest court decisions and agency guidance and provide insights on best practices for handling today’s most complex issues, Walter | Haverfield education law attorneys Miriam Pearlmutter and Lisa Woloszynek have launched “Class Act: Updates in Education Law”, a podcast series covering an array of timely issues.

The legal challenges facing schools today are more numerous and complex than ever before. Transgender students, cyberbullying, social media protocols and a significant increase in the needs of special education students are just a few of the many issues facing schools of all sizes in both urban and rural settings. Add to that the rapidly changing rules and government regulations and it’s clear that school officials have more to handle than what already busy schedules can accommodate.

The “Class Act: Updates in Education Law” podcast, which is believed to be the first of its kind specifically targeting school districts, is just one more way that Walter | Haverfield is reaching out to enhance the understanding of the challenges schools face today. Walter | Haverfield’s education law attorneys also provide information to school districts through legal updates presented at a variety of local, statewide and national conferences. The “Class Act: Updates in Education Law” podcast series provides educators an opportunity to get legal updates from the comfort of their offices, homes or cars.

The first topics covered in the Class Act: Updates in Education Law podcast include Section 504 Plans and IEPs, transgender students, and religion in the classroom. “Class Act: Updates in Education Law” is available on iTunes and Stitcher, or you can link to the podcast from Walter | Haverfield’s website at

By Christine T. Cossler and Christina H. Peer.andnbsp;

Ohio Legislature passed House Bill 410 (H.B. 410) last December after
considering the legislation for over a year. The bill became law on
April 6, 2017. As of April 6, school districts must measure absences in
hours, rather than days, and must adhere to new laws regarding student
discipline. The new law substantially changes the truancy law for the
2017-2018 school year, and requires school districts to prepare and
implement policies that emphasize intervention strategies for
chronically absent students. Significant changes have also been made
with respect to student out-of-school suspensions.

Changes Effective on April 6, 2017

Truancy Terminology and Notice

new law eliminates the concept of “chronic truancy” and instead
categorizes all students with excessive absences as “habitually truant.”
Students are considered habitually truant when the student is absent
for at least:

  • 30 consecutive hours without a legitimate excuse (formerly 5 days);
  • 42 hours in one month without a legitimate excuse (formerly seven days);
  • 72 hours in one school year without a legitimate excuse (formerly 12 days);
  • 38 hours in one month regardless of excuse; or
  • 65 hours in one school year regardless of excuse.

districts must calculate absences by hours, rather than days, in
conformance with the new definition of habitual truancy. The school
district must send written notification to the parent or legal custodian
of any student who is absent, with or without legitimate excuse, for 38
hours in a month or for 65 hours in a year. The notice must be sent
within seven school days of the absence that triggers the habitual
truancy designation.

Make-up Work for Out-of-School Suspensions

a student is suspended for any misconduct, the new law provides that
the school board may, at its discretion, permit the student to complete
any assignments missed due to the suspension.

Suspension Carry-Over

suspensions for any misconduct may not carry-over to the next school
year, but may be converted into required community service or a similar
alternative consequence. The student must begin the community service or
alternative consequence during the first full week of summer break. If
the student fails to complete his or her service requirements, then the
school district may determine an appropriate next course of action, but
may not require the student to serve the remaining time of the
suspension in the following school year. This change does not impact a
school district’s ability to carry an expulsion forward into the next
school year.

Changes for 2017-2018 School Year

Truancy Discipline

on July 1, 2017, a school district may not suspend, expel, or remove a
student solely due to excessive absences, and therefore may no longer
include excessive truancy in its zero tolerance policy.

Truancy Intervention Policy

school district must establish or modify a policy to guide employees in
addressing student absences and the policy must include absence
intervention strategies. Under the new law, the intervention strategy
policy is required for all school districts. The policy should include, as applicable, intervention strategies such as:

  • Providing a truancy intervention plan for habitually truant students;
  • Providing counseling to habitually truant students;
  • Notifying and involving the student’s parent or legal custodian;
  • Notifying the department of motor vehicles and county juvenile judge of habitual truancy; and
  • Pursing legal action in the juvenile court system under certain circumstances.

the new law, habitually truant students whose absences are unexcused
must be assigned an absence intervention team. However, the law creates
an exception for districts with less than 5% chronic absenteeism as
reported on the district’s most recent state report card– those
districts are not required to assign habitually truant students to an
absence intervention team.

Absence Intervention Plan Team

required, the absence intervention team must consist of, at minimum,
two representatives from the school or district (at least one must know
the child) chosen by the superintendent or chief administrator of the
school, and the child’s parent or legal custodian, unless the parent or
legal custodian refuses to cooperate.

The team must be assigned to
the habitually truant student within ten school days after the
triggering absence. The team is required to develop an intervention plan
tailored to the student within fourteen school days after the team is
assigned. The school district must make reasonable efforts to provide a
written copy of the plan to the student’s parent or legal custodian
within seven school days after the plan is developed. The intervention
plan must explain that the attendance officer is required to file a
complaint with the juvenile court no later than 61 days after the
implementation of the plan if the student fails to comply with the plan.

the school district may choose to enroll the student in an appropriate
juvenile court’s alternative to adjudication instead of convening an
intervention plan team.

Reporting Requirements

in the 2017-2018 school year, the school district must report to the
Department of Education, as soon as practicable, when:

  • A student becomes habitually truant;
  • A habitually truant student violates a court order; and
  • A habitually truant student is provided an absence intervention plan.

the school district must make three good-faith attempts to entice
meaningful parental or custodial involvement in the intervention team
and, if the parent or custodian fails to become involved, the school
district must investigate whether failure to respond triggers mandatory
reporting to the child protective services.

Looking Ahead

districts should plan ahead for end of the year mischief by developing a
list of alternative consequences that can be imposed in lieu of
carrying suspension days into the following school year. School
districts should also determine consequences for students who fail to
complete the assigned community service of alternative consequence
during the summer of 2017.

School districts can expect a model
policy emphasizing preventive strategies and alternatives to suspension
or expulsion from the Ohio Board of Education no later than July 6,
2017. The new law also requires the Board of Education to develop
absence intervention training materials for teachers and staff no later
than October 6, 2017.

School districts should use the summer to reevaluate or adopt absence policies for the 2017-2018 school year.

Christine Cossler and Christina Peer are partners in the Education Services group of Cleveland-based Walter | Haverfield LLP.

Walter | Haverfield is pleased to welcome the following attorneys to the firm.

Edward F. Caja
joined Walter | Haverfield as an associate in 2016. Prior to
joining W|H he developed a well rounded aptitude for innovation counseling with
experience in various legal, business, and technical management positions across
many organizational roles from original engineering design and research,
extensive project and program management, and business unit leadership to patent
application preparation and prosecution. Recent legal experience includes
litigation assistance involving patents, trade secrets, business torts, and
unfair competition in numerous art fields. Patent prosecution experience
includes U.S. and international application in multiple technology areas such as
fluid systems, optics, mechanical, electro-mechanical, RFID-based data systems,
computing devices, computer and telecom systems and business methods.

Maria L. Cedroni’s intellectual property practice focuses on patent drafting and prosecution, trademarks, and patent litigation. Maria joined W|H as an associate in 2017. Prior to joining W|H she worked in a Boston area firm for almost 9 years and then a Cleveland firm for 3 years.

Kaitlin Corkran
, an associate in the firm’s Corporate Transactions group,
focuses her practice on a wide range of corporate and business matters,
including new business formation and development, mergers and acquisitions,
stockholder arrangements, and reorganizations. Kaitlin also counsels lenders and
borrowers in commercial finance transactions.

Brendan D. Healy
joined Walter | Haverfield LLP as an associate in 2016, and
is a member of the firm’s Public Law practice group. He has extensive experience
representing public entities throughout Ohio, including cities, villages,
townships, and government agencies. He has advised various municipal boards and
commissions, including Boards of Zoning Appeals, Planning Commissions, and Civil
Service Commissions. Additionally, he served as an Assistant Director of Law for
the City of Cleveland Heights, Ohio.

Patrick A. Hruby is an associate in Walter | Haverfield’s Corporate Transactions group, whose practice also expands into the Litigation Services group. Patrick’s experience includes representing banks and other commercial lenders, commercial property owners, creditors and debtors in the United States Bankruptcy Court, and bankruptcy trustees, among others.

Ellen R. Kirtner-LaFleur is an associate in the Real Estate group. Ellen focuses her practice on a range of commercial real estate matters, including the acquisition and disposition of commercial properties, retail leasing, and real estate finance.

DeMarcus E. Levy
is an associate in the firm’s Intellectual Property
practice group. He focuses on patent law with an emphasis on assistance with
patent prosecution in the electronic and mechanical arts. In addition to
preparing and prosecuting applications in the United States, he has assisted
with advising foreign clients on how to navigate U.S. patent law while keeping
claim language consistent across their international portfolios. Mr. Levy also
performs copyright and trademark prosecution.

William T. Raiff is an associate in the Real Estate group. He focuses his practice on commercial real estate matters and transactions including retail and residential leasing and the disposition and acquisition of commercial properties.

Cary A. Zimmerman
is also an associate in the firm’s Corporate Transactions
group. She represents public and private companies with their corporate and
securities transactions, including mergers and acquisitions, debt and equity
issuances, venture capital, angel investing, and corporate governance matters.
In addition to her Juris Doctor, Cary has a Master of Science in
Management-Finance, which informs her practice and enhances her value as a
business advisor.


We are pleased to announce that
Darrell Clay
who serves as vice-chair of our firm’s litigation services group, is now president of
the Cleveland Metropolitan Bar Association (CMBA).
Darrell, a 20-year member of the CMBA, was sworn in at the organization’s annual meeting on June 2.

In addition to helping
guide the operations of CMBA for the next 12 months, Darrell will direct the implementation of the organization’s
new strategic plan. Key objectives of the plan include strengthening membership by enhancing the overall value
proposition for members, promoting the organization as a go-to source for thought leadership in law and justice,
and repositioning the organization to be more relevant and appeal to changing demographics, including younger
members and sole practitioners. The organization is also actively working to improve diversity in the local
legal market.

Darrell has a long history of active participation in CMBA. Among other services, he served on the membership
(recruitment), bar admissions, and grievance committees. He is a Fellow of the Cleveland Metropolitan Bar
Foundation, as well as the Ohio State Bar Foundation. He has been a strong advocate of the Association and its
ongoing efforts to elevate the overall perception of lawyers and their varied contributions to the community.

During his remarks at the Annual Meeting, Darrell announced plans for CMBA to convene a summit in April 2018 to
mark the 50th anniversary of passage of the landmark Civil Rights Act of 1968, and the 150th anniversary of enactment
of the 14th Amendment, which guarantees equal protection under the law to all citizens.

With more than 5,500 members, CMBA is the largest local bar association in the State of Ohio. Its members are drawn
from all aspects of the legal profession, including private practice, in-house counsel, judges, government attorneys,
law students, paralegals, and business professionals. Its mission is to promote the rule of law, sustain and improve
the quality of and public trust in the administration of justice and the legal profession, and enhance Greater Cleveland
through member, civic and community service, and leadership.

According to Ralph Cascarilla, Walter | Haverfield’s managing partner, “Darrell is particularly well-suited to lead the
CMBA because of his outstanding leadership skills and ability to build consensus, in addition to being an excellent lawyer.”

Darrell has been with our firm since 1997. His practice focuses on complex civil and white collar criminal matters covering
a wide variety of subjects, including antitrust, construction, unfair competition, First Amendment, and other matters.
As an instrument-rated commercial pilot and airplane owner, Darrell also has an active aviation law practice. He has been
selected to Ohio Super Lawyers list for the past eight years in the areas of business litigation, criminal defense—white
collar, and aviation law and was named a Leading Lawyer by Inside Business in the area of antitrust law. He also serves on
the Supreme Court of Ohio’s Board of Commissioners on Character and Fitness. He is a 1994 magna cum laude graduate of Tulane
University School of Law, and holds Bachelor’s and Master’s degrees in political science from University of South Florida.
He can be reached at

Court decision clears registration path for “questionably offensive” trademarks;
could possibly negate challenges to use of Chief Wahoo logo

By Jamie Pingor and Kevin Soucek.

“Questionably Offensive Trademarks Cleared for U.S. Registration,” also appeared online in Crain’s Cleveland Business on July 12, 2017.

On June 19, 2017, the U.S. Supreme Court ruled that the disparagement clause violates the Free Speech Clause of the First Amendment. This decision emanates from the case involving the lead singer of the rock group called “The Slants” who sought federal registration of the mark “THE SLANTS”. The registration was originally denied by the United States Patent and Trademark Office (USPTO) because the name was determined to be offensive to particular ethnic groups that have been described as having slant-eyes.

At issue in this case is a provision that prohibits the registration of a trademark “which may disparage persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” Since the disparagement clause applies to marks that disparage the members of a racial or ethnic group, the U.S. Supreme Court had to decide whether the clause violates the Free Speech Clause of the First Amendment. As a result, the U.S. Supreme Court had to consider three arguments that would either eliminate any First Amendment protection or result in highly permissive rational-basis review.

The Government’s arguments were: (1) that trademarks are government speech, not private speech, (2) that trademarks are a form of government subsidy, and (3) that the constitutionality of the disparagement clause should be tested under a new “government-program” doctrine.

In short, the U.S. Supreme Court stated that: (1) Trademarks are private, not government, speech; (2) that just about every government service requires the expenditure of government funds; and (3) that the disparagement clause cannot be saved by analyzing it as a type of government program in which some content- and speaker-based restrictions are permitted.

The U.S. Supreme Court stated that it is unmistakable the Government has an interest in preventing speech expressing ideas that offend, but that this idea strikes at the heart of the First Amendment. The U.S. Supreme Court further stated that speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express “the thought that we hate.”

Therefore, the U.S. Supreme Court held that the disparagement clause violates the Free Speech Clause of the First Amendment.

Only time will tell how much of an effect this ruling will have on U.S. trademark registrations moving forward. Perhaps this ruling will offer plausible protection to sports teams that use logos which could be viewed as disparaging?

For example, the Cleveland Indians’ Chief Wahoo logo, which remains popular among fans, has been viewed, by some, as a disparaging depiction. The Chief Wahoo logo remains a registered trademark; and the registration was recently renewed in March 2016. Will this ruling encourage the continued registration of the Chief Wahoo logo? Will others continue to petition for Chief Wahoo’s removal from the sport of baseball? Nonetheless, what remains clear is that the USPTO is not permitted to prevent certain disparaging speech expressing ideas with regard to trademark registrations.

Jamie Pingor is a partner and Kevin Soucek is an associate in the Intellectual Property Services group of Cleveland-based Walter | Haverfield LLP.

On June 6, 2017, Acting Assistant Secretary for Civil Rights, Candice Jackson, issued instructions to the directors of the regional offices of the U.S. Department of Education’s Office of Civil Rights (OCR) regarding complaints involving transgender students. The instructions come in response to three events that have impacted transgender law in public schools: (1) the withdrawal of two guidance documents by the U.S. Departments of Education and Justice; (2) the dismissal of State of Texas v. United States; and (3) the remand of Gloucester County School Board v. G.G.

On February 22, 2017, the U.S. Departments of Education and Justice issued a letter withdrawing the statements of policy and guidance reflected in the May 13, 2016 “Dear Colleague Letter” (DCL) on the OCR’s enforcement of Title IX with respect to transgender students based on gender identity, as well as a related January 7, 2015 letter. On March 3, 2017, the U.S. District Court for the Northern District of Texas dismissed, without prejudice, State of Texas v. United States, a multi-state lawsuit challenging the May 2016 DCL, and dissolved the preliminary injunction that had restricted OCR’s enforcement of Title IX with respect to transgender individuals’ access to “intimate” facilities such as restrooms. Three days later, the U.S. Supreme Court vacated and remanded Gloucester County School Board v. G.G., a case involving Title IX as it relates to transgender students’ access to restrooms. The Court remanded the case to the U.S. Court of Appeals for the Fourth Circuit for further consideration in light of the letter issued by the Departments withdrawing the May 2016 DCL.

Because of these events, Jackson says that the OCR can no longer rely on the policies set forth in the May 2016 DCL or the January 2015 letter to a private individual as the sole basis for resolving a complaint. However, according to the February 2017 letter, “withdrawal of these guidance documents does not leave students without protections from discrimination, bullying, or harassment.” Instead, the OCR should rely on Title IX regulations, as interpreted in federal court decisions, and OCR guidance documents that remain in effect, in evaluating complaints of sex discrimination against individuals whether or not the individual is transgender. Further, Jackson says that the OCR may still assert subject matter jurisdiction over, and open for investigation, the following allegations if other jurisdictional requirements are met under the OCR’s Case Processing Manual (CPM):

  • Failure to promptly and equitably resolve a transgender student’s complaint of sex discrimination.
  • Failure to assess whether sexual harassment or gender-based harassment of a transgender student created a hostile environment.
  • Failure to take steps reasonably calculated to address sexual or gender-based harassment that creates a hostile environment.
  • Retaliation against a transgender student after concerns about possible sex discrimination were brought to the recipient’s attention.
  • Different treatment based on sex stereotyping.

In light of the above, the OCR asserts that it will approach each of these types of cases with great care and individualized attention before reaching a dismissal conclusion. OCR has emphasized that withdrawal of the May 2016 and January 2015 guidance documents does not leave students without protections, and the OCR remains committed to investigating all claims of discrimination, bullying and harassment against those who are most vulnerable in schools. However, at the present time, this area of the law remains very unsettled and school districts are cautioned to tread carefully when addressing issues related to the rights of transgender students. School districts should also be cognizant of state and local laws that may impact the rights of transgender students.

Christina Peer is a partner in the Education Services group of Cleveland-based Walter | Haverfield LLP.

On June 23, 2017, the U.S. Supreme Court issued its decision in the eminent domain case of Murr, et al. v. Wisconsin, et al., 582 U.S. ____ (2017). In Murr, the Court addressed whether two legally-distinct, but contiguous, commonly owned parcels should be treated as a single parcel in determining whether a regulatory taking has been effected. The Court rejected the different formalistic approaches suggested by the parties. Instead, the Court held that a multifactor test should be used that examines: (1) how state and federal law defines the property; (2) the physical characteristics of the property; and (3) the prospective value of the regulated land.

In Murr, the landowners were two brothers and two sisters who owned two adjacent lots along the St. Croix River in Troy, Wisconsin. The first lot, “Lot F,” was improved with a cabin. The second lot, “Lot E,” was vacant. The landowners planned to move the cabin to a different location on Lot F and sell Lot E to pay for the project. However, under state and county law a “merger provision” prevented the use or sale of adjacent lots under common ownership unless combined they had at least one acre of land suitable for development. The landowners in Murr had only 0.98 acres of buildable area due to the St. Croix River’s waterline and other topographical conditions. As such, the lots could not be used or sold separately under the law.

The landowners sought and were denied a variance from the county to allow the separate sale or use of the lots. Eventually, the landowners filed suit alleging that the “merger provision” under state and county law affected a regulatory taking by depriving them of all or practically all of the use of their property. The landowners lost at the state court level, and appealed to the U.S. Supreme Court.

In a 5-3 decision, the U.S. Supreme Court held that the landowners’ property should be evaluated as a single parcel, not as two separate and distinct parcels. The Court arrived at this conclusion by employing a multifactor test. The Court held that several factors should be considered, including (1) the treatment of the land under state and local law, (2) the physical characteristics of the land, and (3) the prospective value of the regulated land.

With respect to the first factor, the Court stated that a reasonable restriction (e.g., land use regulations, state and local law, etc.) predating a property owner’s acquisition of land is an objective factor that the property owner should reasonably consider in forming fair expectations about the property. Concerning the second factor, the Court looked at “the physical relationship of … distinguishable tracts, the parcel’s topography, and the surrounding human and ecological environment.” Finally, the third factor assesses “the value of the property under the challenged regulation, with special attention to the effect of [the] burdened land on the value of other holdings.”

Applying these factors, the Court held that the landowners’ lots should be evaluated as a single parcel. The Court considered the “merger provision” under state and local law and found that the property was subject to this law due to the landowners’ (or their predecessors’) voluntary act of bringing the property under common ownership. The Court considered the physical characteristics of the lots, specifically their rough terrain and narrow shape, and found that the facts supported treating the lots as a single parcel. Finally, the Court considered the prospective value that Lot E brings to Lot F. While state and local law prohibits the sale of the lots separately, the Court found there were benefits to using the lots jointly, such as increased privacy, recreational space, and the ability to locate improvements in their best location on the lots. Additionally, the Court found that the combined value of the lots ($698,300) exceeded their value as separate parcels (Lot E – $40,000; Lot F – $373,000).

After determining that “Lot E” and “Lot F” should be deemed a single property unit, the Court then determined whether a regulatory taking occurred. The Court found no regulatory taking because the landowners were able to make an economically viable use of the property as a residence and that the combined value of the lots decreased by less than 10 percent due to the challenged regulation (i.e, the “merger provision”). Additionally, the Court found that the merger provision was a reasonable land-use regulation, adopted as part of a combined federal, state and local effort, to protect and preserve the river and immediate properties.

While the outcome of this case is specific to its own facts and circumstances, when faced with a regulatory taking challenge involving multiple adjacent lots, local governments should make a reasonable effort to apply the multifactor test set forth in Murr to make the initial determination of what constitutes the property that is being regulated. This initial analysis will then assist local governments in determining the bigger question of whether the application of the regulation to the property constitutes a regulatory taking.

Aimee Lane is a partner, and Brendan Healy is an associate with Walter | Haverfield’s Public Law Group.

Employers across the nation may have thought they were done with changes to the overtime rule. Not so.

Way back last November, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction barring the Obama Administration’s nationwide implementation of new regulations that would have established a higher salary threshold for certain employees to be considered “exempt” from overtime requirements under the Fair Labor Standards Act (FLSA). Under the proposed regulations, the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the general requirement that employees be paid time and a half for all hours worked over 40 in a week would have been $47,476 per year. The injunction represented a reprieve for employers across the country, as the new salary threshold would have impacted the compensation of approximately four million workers.

Ten months, a decidedly significant sea-change in Washington, D.C., and two nominees for Labor Secretary later, the U.S. Department of Labor (DOL) has issued a Request for Information, asking employers, workers, and interests groups for feedback on what the salary threshold should be. A few things to keep in mind:

  • On August 31st, the federal case down in Texas concluded with Judge Amos Mazzant issuing a final ruling that, while the DOL had the statutory authority to set a salary floor for exempt status, the specific salary floor set by the Obama overtime rule was invalid. The DOL promptly abandoned its prior appeal of Mazzant’s earlier preliminary injunction – and the Texas case is now over.
  • The DOL will be collecting responses to the RFI through late September.
  • At his confirmation hearings in March, Secretary of Labor Alexander Acosta signaled his belief that, while the Obama overtime rule represented an excessive increase, some increase is warranted because the salary threshold was last updated in 2004 and “life does become more expensive over time.”
  • The RFI strongly suggests that the DOL is considering an inflation-based approach to raising the floor. According to the DOL’s CPI inflation calculator, an adjustment to the rule to account for inflation between 2004 and 2017 would result in a new threshold of somewhere between $30,000 and $33,000, depending on regional differences.

So, amidst all this uncertainty, employers are left in a lurch in terms of building and maintaining their compensation models. A few recommendations:

  • Employers are well-advised to determine to what extent they currently pay non-overtime eligible employees less than $33,000 a year.
  • Employers are also well-advised to start considering the impact of either increasing compensation for these employees to a new threshold (say, $33,000) or paying overtime to these employees for all hours over 40 worked in a week.
  • Many of the same considerations weighed by employers at the time of the Obama overtime rule’s introduction will still be relevant this time around; the only difference is that the Trump overtime rule will impact a smaller cohort of employees. A key consideration is the effect of a higher floor on the rest of the business’ compensation model. For example, if Peter, who was making $28,000 a year, receives a $5,000 raise to preserve his exempt status, what happens to Paul, who was making $33,000 a year for more skilled work? Additionally, should an employer decide instead to keep wages level and make a position overtime eligible, what will be the psychic effect on re-classified employees who may be angry that they now have to punch a time clock even though they have always been considered “white collar.”

Employers should realistically expect some increase in the salary floor for the FLSA’s executive, administrative and professional exemptions. Fortunately, given that both judicial and administrative processes will be ongoing until at least late 2017, employers have time to be thoughtful in their planning.

George can be reached at 216-928-2899 or

Chances are, if you see a large commercial real estate development project going up in the region, our real estate team was likely involved. We are fortunate to be partnering with some of the most reputable developers, owners and lenders in the real estate business to maintain a large book of business that’s having a major economic impact throughout Northeast Ohio and beyond.

Some of our higher visibility projects include Pinecrest in Orange Village, the Johnson Controls Hall of Fame Village in Canton, the Bowery and Goodyear East End Projects in Akron, the Link59 Project in MidTown, the IBM Building in Opportunity Corridor, the Columbus Avenue Project in Sandusky, the Playhouse Square Foundation Apartment Project in Downtown Cleveland, the Scranton Peninsula Project in the Flats, and the Church and State and Music Settlement Projects in Hingetown. These projects represent billions of dollars in development costs, some of which have already been expended and some that are yet to be spent over the next several years.

Here’s a quick snapshot of the progress being made at these noteworthy projects:

Pinecrest is well underway and slated to open in 2018. This upscale mixed-use district has captured tenants such as Whole Foods, REI, and Williams Sonoma, along with a Marriott AC Hotel and residential apartments. Our lawyers have represented the developer in every aspect of the project, from land acquisition to TIF to zoning, financing and leasing. It’s a truly inspiring project.

Our representation of developer Stu Lichter and Industrial Realty Group, the master developer of the Johnson Controls Hall of Fame Village, has been on the fast track since the inception of the project. It recently hit a milestone with completion of Phase 2 of the Tom Benson Hall of Fame Stadium which opened to rave reviews at the Hall of Fame Game between the Cowboys and Cardinals in August. Ground has broken for a 4-5 star Hilton Hotel-Curio Collection adjoining the Stadium and Center for Excellence. The Youth Field Complex has been busy, and our lawyers have been working on development of and financing for the balance of the project, including the organization of and related financing for the State’s first Tourism Development District.

The Bowery Project in Downtown Akron will be a mixed-use development financed in part with both Historic Tax Credits and New Market Tax Credits. This transformative project will also have a TIF aspect as part of its capital stack.

The Link59 Project in MidTown between East 59th and East 61st is under construction with a spec office building fronting on Euclid Avenue, a renovated office building on East 61st, and a new ground-up Dave’s Supermarket. A very complex capital stack has been assembled for the Dave’s project, including multiple NMTC allocations, grants and conventional loans. It will bring a full-service supermarket and new jobs to this food desert in an economically distressed part of the City.

The Columbus Avenue Project in Downtown Sandusky is a twinned HTC/NMTC transaction that will bring three older buildings to life and transition the City of Sandusky offices to the renovated buildings in Sandusky’s newly formed Historic District. Market rate apartments and ground-floor retail will also be part of the innovative development in a City which has not previously enjoyed the benefit of tax credit allocations and financing.

Massive and exciting is the only way to describe Playhouse Square Foundation’s announced market rate apartment project at E. 17th Street and Euclid Avenue across from the Connor Palace Theatre. At 34 stories, it will bring apartment living in the City to new heights, along with a new 550-space parking garage. Construction is slated to begin towards the end of 2017.

The announced sale of Forest City Realty Trust’s Scranton Peninsula property to a group of local investors is a harbinger of development to come for this prime piece of real estate that has been on the waiting list for decades. Our attorneys represented the developer group which acquired the property and will be a team member as plans move forward for the property.

Last but not least, the Hingetown area situated between Ohio City to the north and Gordon Square to the west continues on its rapid pace of development and redevelopment. Our real estate attorneys represent the joint venture which will construct the Church and State apartment project on the south side of Detroit Avenue between West 28th and 29th Streets. Our attorneys also represent The Music Settlement (TMS) in connection with its new Hingetown location in the mixed-use project being constructed by The Snaveley Group and other investors at the northwest corner of W. 25th Street and Detroit Avenue. TMS will take 19,000 sf. of space on the first floor of the building and open six early childhood classrooms, music instruction rooms, a music therapy room, a dance studio, and much more.

We thank our great clients for their vision and their work. We are proud to be team members with them in bringing these projects to life.

Jack can be reached at (216) 928-2914 or

Northeast Ohio’s vibrant commercial real estate industry has not only triggered a construction boom, but has resulted in greater volumes of construction and demolition debris (CandDD) that must either be recycled or landfilled. While most of this material is sent to disposal facilities licensed under Ohio law or to recyclers that run responsible, environmentally-friendly operations, some waste finds its way to illegal dump sites. These sites often collect and then abandon large volumes of waste material, creating nuisance conditions and leaving local communities and the state to bear the cost of cleanup.

The six-acre Arco dump in East Cleveland is one such site. It is considered one of the worst illegal dump sites in the state, and it sits in the middle of a residential neighborhood. Throughout this year, the Ohio EPA and Cuyahoga County have worked to clean up the site and hold the property owner accountable. The clean-up effort could cost as much as $6 million in state funds.

Thanks to new legislation signed by Governor Kasich in July, sites like the Arco dump may become less common and their owners easier to prosecute.

Amended Senate Bill 2 (S.B. 2) gives the Director of the Ohio Environmental Protection Agency (EPA) new authority to regulate CandDD recycling in Ohio. State regulators and the CandDD industry alike welcomed the passage of the bill. The new law is designed to encourage legitimate CandDD recycling while preventing the operation of illegal dumps.

As legal counsel to the Construction and Demolition Debris Association of Ohio (CDAO), an industry group representing CandDD landfill operators, Walter | Haverfield LLP played an integral role in drafting S.B. 2. This included submitting written comments and proposed language for the bill itself. We also participated in numerous Ohio EPA working group meetings on behalf of the CDAO and many of its member facilities who are also long-time firm clients.

CandDD is material resulting from the construction or demolition of man-made structures, such as houses, buildings or roadways. It includes non-hazardous materials such as brick, concrete, stone, glass, wall coverings, plaster, drywall, wood and roofing materials. Because CandDD is generally considered to be inert and poses little threat to the environment as compared to other wastes, Ohio regulates CandDD disposal separately from municipal and household solid waste.

Before S.B. 2 was passed, Ohio EPA had authority to license and regulate CandDD disposal facilities but not CandDD recyclers, even though many disposal facility operators had begun separating valuable recyclables for resale. The existing law did not prevent unlicensed operators from illegally collecting and storing mixed CandDD under the guise of recycling.

Ohio EPA now has the authority to develop regulations for CandDD recyclers (called “processing facilities”) to ensure that they will not create a nuisance, fire hazard, health hazard, or cause or contribute to air or water pollution. The new rules will include permit and licensing programs, plus requirements for the location, design, construction, operation, and closure of CandDD processing facilities. The rules may also cover the type of materials that can be recycled, how long they can be stored, and how much can be accumulated.

Most importantly, the new rules will require recyclers to establish financial assurance in case they go bankrupt or are otherwise unable to close properly. Ohio EPA’s newly-expanded legislative authority will allow greater control and oversight of the recycling industry to prevent future Arcos and safeguard public health, safety and the environment across Ohio.

Leslie can be reached at 216-928-2927 or

Let’s start with that oh-so-dreadful morning alarm on your iPhone®. That annoying sound forces you to get up from that oh-so-comfy Serta® mattress and sleepily walk to the kitchen to make that oh-so-delicious Starbucks® coffee.

It’s your morning routine. It’s a routine saturated by someone else’s intellectual property. That jingle on TV–trademarked. Your iPhone®–patented. The mattress– patented. Your Starbucks® coffee–trademarked. And let’s not forget that all-important coffee maker–also patented.

We have become a world cluttered with patents and trademarks–and for good reason. Without them, some of the most valuable business assets in this country would be left unprotected and vulnerable to misappropriation.

Trademarks refer to symbols, names or phrases that are legally registered to identify the source of a company’s product and/or service. A patent is a right granted by the government to inventors to exclude others from replicating and selling their products.

We, as consumers, observe and utilize numerous patents, trademarks and other kinds of intellectual property hundreds, if not thousands, of times a day. And they are becoming an increasingly larger part of our lives. According to the World Intellectual Property Organization’s statistical database, the number of patent filings in the U.S. jumped 45% from 2001 to 2015. In that same time period, trademark filings increased 51%.

Legal protection for intellectual property is a standard practice for many entrepreneurs and businesses. As a business owner, manager or entrepreneur, it should also become your priority.

Patents and trademarks are crucial to the success of your business and your business’s brand. They provide exclusive rights to a trade name and/or product innovation and offer protection against infringement of those rights.

Those rights also offer a competitive advantage in the marketplace. For example, a registered trademark on the name of your popular pasta sauce recipe means it can’t be replicated and sold by someone else. That’s critical to staying one step ahead of your competition and continuing to add value to your brand.

Without formal intellectual property protection, such as obtaining a patent or registering a trademark with the U.S. Trademark Office, your internet presence and online business are at risk. A competitor may use the name of your business for their business and optimize the capability of search engines to direct the online traffic to their site. That leaves you far behind in the shadows.

Therefore, it is advantageous to take the time to invest in protecting your most valuable assets. Our intellectual property attorneys have been helping to protect the brands and innovations of companies of all sizes for decades. We serve a broad base of clients who span the country and the world. Our depth of experience allows us to tackle even the most complex intellectual property issues while we focus on maximizing opportunity and revenue for our clients.

Jamie can be reached at (216) 928-2984 or


In another controversial move, the Office for Civil Rights (“OCR”) rescinded its previous guidance on sexual violence investigations.

In 2011, OCR issued a “Dear Colleague” letter, requiring universities and school districts to respond to sexual violence accusations with a specific protocol, both for investigations and decision-making. A 2014 question and answer document offered additional details about interim protective measures and confidentiality requirements. Among the more hotly-debated provisions, OCR directed educational institutions to use a “preponderance of the evidence” standard in determining whether the accusation was substantiated. Many universities, in particular, objected to these regulations, some even going so far as to challenge OCR’s noncompliance findings and standard resolution agreements.

On September 22, 2017, OCR rescinded the aforementioned guidance in a brief Dear Colleague letter. Although these previous directives may have been well-intentioned, explained OCR, they “have led to the deprivation of rights for many students – both accused students denied fair process and victims denied an adequate resolution of their complaints.” Asserting that schools faced a confusing and counterproductive set of mandates, OCR withdrew the aforementioned guidance and assured districts that it plans to develop a more fitting approach to sexual misconduct.

On the same day, OCR issued a document entitled “Questions and Answers on Campus Sexual Misconduct,” which provides additional details as to schools’ responsibilities in handling future sexual violence complaints. Citing Supreme Court law and sexual harassment guidance published in 2001, this QandA reiterates school districts’ obligations to respond when a hostile environment threatens a student’s participation. As was previously required, districts must still develop grievance procedures, implement interim measures, and conduct equitable investigations. The QandA, however, emphasizes that neither party should be restricted from discussing the investigation with others, and that both must receive written notice with sufficient details to prepare a response. Further, OCR now allows school districts to opt for informal resolutions – including mediation – provided that both parties voluntarily agree to forgo a full investigation and adjudication. Importantly, school districts may apply either the previous “preponderance of the evidence” standard or a “clear and convincing evidence” standard in reaching their factual conclusions. Finally, schools may allow appeals only for the responding party, if they so choose.

In light of these developments, school districts should review their policies and practices to determine whether any changes or clarifications are needed.

If you have any questions about this news alert, please contact a member of Walter | Haverfield’s Education Law Group.

Miriam M. Pearlmutter is an associate in Walter | Haverfield’s Education Services practice group.


The ability to rent out your property to travelers has never been easier with the advent of websites such as AirBnB, VRBO and HomeAway, among many others.

Through these sites, property owners are able to rent out a spare room, an apartment that’s rarely used, or a vacation home. However, as short-term rental options are becoming more common, cities across the country are responding in different ways. It is important for property owners to be aware of where their city stands.

Ranging from near-outright bans of the practice to embracing the concept, there appears to be no unified front. Many cities, including Cleveland, have largely remained silent on the regulation of short-term rentals. Their municipal codes do not yet expressly permit or prohibit them. Only time will tell as to which option proves to be the most successful.

Cities that choose to regulate short-term rentals often have a licensing requirement. Denver requires that property owners obtain both a lodger’s license and a short-term rental business license if they are looking to rent out their property. The fee is $50 for every two-year period for the lodger’s license and $25 each year for the short-term rental business license. New Orleans distinguishes between the nature and location of the rental property and requires a fee of $50 to $500 a year, depending on which license is required. Fort Lauderdale recently lowered its short-term rental fees by a significant amount. While a standard vacation registration application used to cost $750, it now only costs $350.

Some cities focus on location, density and time period requirements in regulating short-term rentals. Time period requirements can come in the form of the number of days a property can be rented out in a year or on a consecutive basis. The requirements also address the minimum amount of time for the rental.

For example, Chicago prohibits rentals of less than 10 hours. Palm Springs limits the number of consecutive days a home may be rented out to 28. New Orleans restricts the renting of houses to no more than 90 rental nights per license year and bans short-term rentals entirely in the French Quarter. Las Vegas only allows rentals that are at least 660 feet from each other and even forbids short-term rentals in certain large areas outside of the central city.

Many cities also make the distinction between “hosted” and “unhosted” stays. A hosted stay is similar to the nature of a bed-and-breakfast. It is an owner-occupied rental where a guest rents out a room in the host’s home while the host is also living there and in a sense, acting as a chaperone. An unhosted stay occurs when a renter is renting out the entire apartment or house, and the host is not present. It is similar to a hotel, although the host may not even be present in the same city where the home is being rented.

Certain cities have regulations that distinguish between these two types of stays.

For instance, Fort Lauderdale offers a lower renewal fee of $80 for properties that are hosted compared to the $160 renewal fee charged for those rental properties that are unhosted. Las Vegas distinguishes between hosted and unhosted stays in its permitting requirements. An owner-occupied property in a permitted district with fewer than three bedrooms, located at least 660 feet away from another rental, may simply obtain a conditional use verification.

However, if a rental property does not meet these requirements, the owner is required to obtain a special use permit, which requires notifying neighboring property owners and engaging in a two-part hearing process before the planning commission and city council.

For property owners, it is especially important to be aware of your city’s regulations on short-term rentals prior to beginning the rental process. Many cities that have regulations in place have sections on their municipal websites outlining these requirements. Whether it be a license requirement or a limit on the number of days you can rent out your property, it is important to know the potential limitations and how you can comply.

Emily S. O’Connor is an associate in Walter | Haverfield’s Real Estate Services practice group.

This article was published in Crain’s Cleveland Business on October 2, 2017.


The decision to legalize medical marijuana in Ohio represents an incredible business opportunity for Ohioans. But not everyone who applies for a medical marijuana processing or retail dispensing license in this highly competitive industry will be successful.

To succeed, one must have a sound business plan and enough lead time to properly execute it. Applicants will also need to be well capitalized with a strong (and patient) investor base. Keep in mind that traditional lenders, such as banks, have still not entered the arena because medical marijuana, while legal in the state of Ohio, is still considered illegal under federal law.

Applicants will also need to have identified and obtained local approval for a location (real estate) from which they will operate the marijuana processing or dispensary operations. This can be a difficult task because no medical marijuana processor or retail dispensary may be located within 500 feet of a school, church, public library, public playground, or public park.

The medical marijuana business is not for those who are risk-adverse, nor is it suited for procrastinators. The $10,000 processor application fee and the $5,000 retail dispensary fee are non-refundable. It takes time and a considerable amount of effort to prepare an application that will be seen by the state of Ohio as a viable candidate for a medical marijuana processing or dispensing license. Competition is expected to be fierce based on the number of applications that were received for the medical marijuana cultivation licenses earlier this year.

In addition to the non-refundable application fees, potential applicants can expect to incur legal and other advisory fees. The cost to bring in third-party advisors, however, will likely prove to be a wise investment as most applicants will need to rely on their expertise to help navigate the myriad restrictions and requirements.

With the large number of applicants expected, only the best applications will be considered. The state is looking for applicants who are well-capitalized, responsible and reliable, since license holders will be tasked with the responsibility to provide medicine to what is expected to be a large patient base in Ohio.

In order to assist would-be applicants to optimize their chances for securing a license or to help prospects determine whether it makes sense to pursue this one-of-a-kind business opportunity, Walter | Haverfield has teamed up with other cannabis industry professionals to host a free educational seminar on Thursday, Oct. 5. Among other things, the seminar will cover: important deadlines and requirements for application; zoning restrictions; risk management and insurance options; security requirements; tax consequences; and tips for raising the necessary capital.

This seminar provides an opportunity to connect with a wide array of professionals to get the answers you need before you make the decision to pursue a medical marijuana processing or dispensing license. You can register for the free seminar by visiting

Kevin Patrick Murphy is a partner and chair of Walter | Haverfield’s Corporate Transactions practice group.

This article was published in Crain’s Cleveland Business on October 3, 2017.


It was nearly a year ago that Crain’s published my blog post headlined, “Will Chief Wahoo be around for another World Series?” So here we are again in familiar territory.

The Cleveland Indians had another great season (even though the post-season was shorter than most of us had hoped) and sales of Indians-themed apparel and memorabilia are through the roof. Although the answer to that question is “yes, Chief Wahoo is still here,” the fate of the Chief Wahoo logo as a protected, registered trademark remains undecided.

Many may have thought the debate was over—at least from a legal perspective — after the Supreme Court ruled this past summer that disparaging trademarks (like the one for the band “The Slants” which was initially refused registration for being disparaging towards Asian-Americans) were protected under the First Amendment free speech principle and could not be denied registration on the basis of being disparaging.

The U.S. Trademark Act had originally recited that a trademark may be refused registration if it consisted of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, institutions, beliefs, or national symbols, or bring them into contempt or disrepute.

However, what remains to be decided is whether or not trademarks that are considered to be immoral or scandalous may be registered. In other words, this is yet another matter for the courts to decide, which means the Chief Wahoo logo could still be protected as a registered trademark. Or not.

Unfortunately (or fortunately, depending on which side you’re on), a decision in the challenge against the Chief Wahoo logo registration has been delayed pending the outcome of a case which involves the refusal to register a company’s FUCT brand of apparel, including clothing for children and infants.

FUCT has already been established as one of those provocative brands that seeks to differentiate itself and garner a loyal following through its strong, controversial graphics. But loyal following or not, the brand’s trademark registration has been refused for being scandalous and immoral. The decision is now under review by the Court of Appeals for the Federal Circuit.

Will scandalous or immoral trademarks eventually go the way of disparaging trademarks and be afforded protection as registered trademarks? Only time will tell. Should the Federal Circuit decide to allow the protection of scandalous/immoral trademarks, such as FUCT, we will likely see a significant uptick in the number of trademark applications being filed, including those for which registrations may have been previously denied.

There are, of course, many other factors to consider which can also affect whether or not such trademarks can be successfully registered. In the meantime, however, there are important lessons for business owners and would-be entrepreneurs to learn—and that is that the field of intellectual property (IP) law is constantly evolving. What can’t be registered today might be able to receive full legal protection in the future.

Beyond the legal ramifications is the reality that the court of public opinion can weigh heavily when it comes to the success of a brand. Remember back in the 1990s when the Washington Bullets changed the team name to the Washington Wizards to avoid potential negative publicity surrounding gun violence?

An important takeaway for business owners from all this controversy is that, unlike some other areas of law that don’t often see changes or court decisions, IP law is constantly evolving. So make sure you enter the registration battle with a knowledgeable professional well-versed in IP law to give your business the best chance of protecting some of its most valuable assets.

Ultimately, what does this mean for the Chief Wahoo logo? That still remains unclear. Even if those seeking to challenge the Chief Wahoo logo registration eventually strike out, perhaps we could still see a de-emphasis of the logo to appease any public opinion concerns. In this author’s opinion, a complete elimination of the Chief Wahoo logo is probably unlikely due to various other practical and legal factors, which are a topic for a different day (and blog post).

Sean F. Mellino is a partner in Walter | Haverfield’s Intellectual Property practice group.

This article was published in Crain’s Cleveland Business on October 16, 2017.


Max Rieker brings more than a decade of professional legal experience to Walter | Haverfield. With a focus on labor and employment issues, Rieker has successfully represented clients before various arbitrators, boards, commissions and trial and appellate courts throughout Ohio. He has extensive involvement in administrative investigations and prevailed in a variety of termination and employee discipline cases. He also has considerable experience in public sector collective bargaining as he represented clients in dozens of cases through the statutory fact-finding and conciliation process.

Named to the 2017 Ohio Rising Stars list, Rina Russo has significant experience representing employers in the negotiation of collective bargaining agreements as well as allegations of discrimination and harassment. She works with private and public sector employers in matters involving failure to accommodate, wage/hour violations and enforcement of restrictive covenants before federal and state courts and administrative agencies. Her litigation practice includes single plaintiff, class and collective actions.


In an about-face move, the Department of Justice issued a memo this month indicating that its interpretation of Title VII of the Civil Rights Act does not protect individuals on the basis of gender identity. Title VII is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin and religion.

Three years ago, the DOJ maintained the exact opposite policy – that the word “sex” in Title VII encompassed claims of discrimination based on an individual’s gender identity, including transgender status.

However, any assumption that you, as an employer, don’t need to hire a transgender applicant or think twice about an adverse employment action against a transgender employee is incorrect. Even though the DOJ has gone on the record indicating that gender identity is not a protected class, the Equal Employment Opportunity Commission (“EEOC”) continues to maintain that gender identity is a protected class under Title VII based on the inclusion of the word “sex” in the statute. The EEOC is a federal agency that investigates charges of discrimination and tries to settle charges with merit. If the charge is not settled, the EEOC has authority to file a lawsuit against the employer or can give the employee the right to sue the employer individually. In fact, the EEOC just filed suit under Title VII against a company in Colorado for rescinding a job offer to an applicant after the company learned of the applicant’s transgender status.

While some states have laws that prohibit discrimination on the basis of gender identity, Ohio currently does not. Given the uncertainty surrounding whether gender identity is protected under Title VII, employers may still want to consider the EEOC’s position. Since Title VII is unlikely to be amended anytime soon to clarify the issue, coverage of gender identity under Title VII will continue to be debated in the courts, with likely conflicting rulings for the foreseeable future.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.


The Drone Integration Pilot Program will allow state and local governments to propose local rules permitting otherwise prohibited uses of unmanned aerial systems (UAS, more commonly known as “drones”) in their jurisdictions.

The program was established by a presidential memorandum and signed by President Trump on October 25, 2017. Two weeks prior, self-declared drone stakeholders including Amazon, FedEx and GoPro sent a letter to the president urging him to create such a program. Many American companies experiment with innovative drone technology overseas and the memorandum points to America’s outdated regulatory framework as the reason.

The program intends to encourage innovation by permitting state and local governments to determine which drone activities may occur within their specific jurisdictions. If the state or local government’s proposed operations are approved by the U.S. Department of Transportation (DOT), then the jurisdiction (which could be as large as an entire state) will become a “drone innovation zone.”

Activities that may be permitted in an innovation zone include flights over people as well as flights that take place at night. They also include utilizing a drone beyond the pilot’s visual line of sight, flying it as high as 400 feet above ground level, and using it for package delivery. The DOT and the White House both issued statements encouraging local governments eager to participate in the program to work with a private sector partner in developing their proposal.

The DOT is required to launch the program no later than January 22, 2018. Proposals from state and local governments are to be evaluated on multiple factors, including:

  • the overall economic impact of the proposal
  • the jurisdiction’s commitment to safety concerns
  • involvement of local communities affected and their support of the proposal
  • diversity of the operations to be conducted in the jurisdiction
  • involvement of commercial entities in the proposal


The DOT must accept at least five proposals by July 22, 2018, but is not limited in the number of proposals it may select. State and local governments chosen to participate will be required to enter into agreements with the DOT regarding their drone innovation zone.

The program requires that the Federal Aviation Administration (FAA) issue waivers from federal regulations as necessary for the approved drone innovation zone. The issuance of waivers is intended to further the federal government’s goal of using state and local governments as a laboratory for the development of future federal guidelines and regulations.

Local governments interested in participating in the program, which is set to terminate October 25, 2020 or later, at the discretion of the DOT, should keep an eye out for additional guidance and begin identifying potential partners. Ohio has not yet indicated if it intends to submit a proposal to become a state-wide innovation zone, but such a proposal could significantly impact the state’s communities.

State and local governments may submit proposals to join the program for up to one year before the program is set to end.

Jessica Trivisonno is an attorney in our Public Law group. She can be reached at and 216.619.7870


Don’t miss a fast-paced, one-hour seminar given by Walter | Haverfield’s George Asimou titled “A year later…How the Trump administration has changed the LandE landscape.”

Asimou, an attorney in our Labor and Employment group, will speak at the Cleveland Society for Human Resource Management (SHRM) Legal Affairs Conference on December 1, 2017. The conference takes place at Baldwin Wallace University’s Strosacker Union.

Asimou, who represents public and private sector employers on a broad range of issues related to federal and state labor and employment laws, will address the following in his presentation:

    • Formal changes in workplace laws and regulation
    • Subtle shifts in enforcement priorities
    • Broader re-evaluation of the norms of working life in America
    • On-going re-balancing of federal and state regulatory power


For more information about the conference and to register, click here.

George can be reached at or 216.928.2899


It was the night of February 2, 2017 – a night that ended in tragedy for Tim Piazza. And it all started with alcohol at a Pennsylvania State University fraternity where Piazza was a pledge. Two days later, after prosecutors in the case say Piazza drank excessively at the fraternity during a hazing ritual, then tumbled down a flight of stairs, the sophomore engineering student died.

Hazing is at the core of Piazza’s case. It’s also the focus of similar cases at Louisiana State University and Florida State University, where two pledges have died this school year. In the Louisiana State case, eight fraternity brothers and two others face charges related to the death of 18-year-old Maxwell Gruver. Police say the suspects forced the Louisiana State freshman to drink himself to death.

And here in Ohio, hazing is why the Ohio State University terminated its band director three years ago. The former director sued, but later withdrew his case.

Hazing is defined as coercing another to do an act of initiation into an organization, which causes or creates a substantial risk of mental or physical harm to any person.

And statistics indicate that it may be more common than we think. According to the National Study of Student Hazing, 47% of high school students come to college already having experienced hazing. 55% of college students who participate in clubs, teams and organizations have witnessed the problem or become a victim.

Ohio is one of 44 states that has an anti-hazing law, which includes both civil and criminal statutes.

The state’s criminal statute states that no person may recklessly participate in hazing of another, and that no school administrator, teacher or employee may recklessly allow hazing to occur. Violation of the law is a fourth-degree misdemeanor, punishable by a jail term of up to 30 days and a fine of up to $250.

Ohio’s civil statute allows a victim to file suit against the perpetrators, the organization whose officials tolerated or authorized the hazing, or the officials themselves. The victim is permitted to seek damages for injury as well as mental and physical pain and suffering that results from the act.

While a school may be able to protect itself against any liability by showing that it actively enforced an anti-hazing policy at the time of the incident, a viable defense cannot be made that the plaintiff was negligent in the incident(s) or gave consent to be hazed.

It is highly recommended that boards of education review their anti-hazing policies to ensure that they are detailed enough to address incidents that happen to those who have been actively participating in an organization for some time and become a victim.

It is also important for school administrators to regularly train all teachers and staff on the definition of hazing, the respective state statutes and the district’s policies.

As for Piazza’s case, twelve fraternity brothers, along with the Beta Theta Pi fraternity chapter at Penn State, are now facing multiple charges, including hazing and furnishing alcohol to minors.

In response to the 19-year-old’s death, U.S. Rep. Marcia Fudge (D- OH) and Rep. Patrick Meehan (R-PA) introduced a bill earlier this year that would require universities to include acts of hazing in their annual crime reports required by federal law.

Kathy Perrico is a partner in Walter | Haverfield’s Education group.


With campaigning complete, ballots cast, and votes provisionally tabulated, it is time for campaign committees of local candidates to take down the yard signs and complete their post-election campaign finance reports.

Generally, Ohio law requires the campaign committees for candidates whose name appeared on the ballot to file a post-election campaign finance report no later than the close of business on the thirty-eighth day (38) after the general election. R.C. 3517.10(A)(2). This year, that deadline is 4:00 p.m. on December 15, 2017. It is important to note that the report must be received by the board of elections in the county where the elected position was sought by the close of business on December 15. Otherwise, the post-election campaign finance report is late. See 3517.11(A)(2)(a).

Failure to timely file a post-election campaign finance report may result in a referral to the Ohio Elections Commission, and may expose the candidate and/or the treasurer of the campaign committee to monetary penalties.

The post-election campaign report must account for all campaign contributions and expenditures properly made from the close of business on the last day reflected in the previously filed campaign finance statement, through the period ending seven days before the filing of the post-election statement. R.C. 3517.10(A)(2). Accordingly, candidates and campaign committees should promptly review their books to ensure that all contributions and expenditures are accounted for, and conclude a (hopefully) successful campaign by filing their post-election campaign finance reports no later than 4:00 p.m. on December 15.

Benjamin Chojnacki is an attorney in our Public Law group. He can be reached at and 216.619.7850.



“Fair share” union fees may very well be on their way out in the public sector. On September 28, 2017, the United States Supreme Court agreed to accept the case of Janus v. American Federation of State, County, and Municipal Employees (AFSCME). This case revisits the constitutionality of fair share fees being imposed upon an employee as a condition of employment.

The issue goes back to the seminal 1977 Supreme Court case of Abood v. Detroit Board of Education. In Abood, the unanimous court held that it was lawful for members of a bargaining unit – but who were NOT voluntary members of the applicable labor union – to be assessed a union fee as a condition of employment. The theory in Abood was that it is unjust to require unions to represent a minority of non-paying “free riders” within a bargaining unit who would then reap the benefit of the union negotiating and enforcing their labor contract. By law, unions are required to represent all members of a bargaining unit, including the processing of grievances for those who have not signed union membership cards.

Since Abood, both public sentiment and the opinion of justices have shifted. Many Supreme Court observers predicted that mandatory fair share fees to unions would be abolished with the early 2016 decision in Friedrichs v. California Teachers Association. That decision challenged fair share fees head-on based on First Amendment grounds.

However, the unexpected death of Justice Antonin Scalia a month before the Friedrichs decision was released resulted in a 4-4 deadlock. Therefore, the lower court decision to allow fair share fees was permitted to stand. Half of the justices in Friedrichs would have abolished fair share fees on the grounds that mandating any dues payments equates to mandating a worker’s speech.

Today, laws in 22 states, including Ohio, permit mandatory fair share fee payments from all those covered by a collective bargaining agreement, but who have opted not to join the union. There are currently about 11 million union employees in these 22 states. The other 28 states have “right to work” laws, which expressly prohibit requiring workers to join or financially support a labor union, unless those workers do so of their own volition.

The case now before the Supreme Court involves Mark Janus who is a child support specialist employed by the state of Illinois. He and a small group of others filed suit two years ago based on the same free speech arguments brought forth in Friedrichs. Janus objected to being required to pay $44 per month to AFSCME, which covers approximately 35,000 other state workers.

Many now view Janus v. AFSCME as the final blow to the 40-year-old Abood precedent. It is unlikely that Justices Roberts, Thomas, Alito and Kennedy will have had a change of heart on the same issue in the span of a year. It is highly likely that Justice Neil Gorsuch is poised to be the fifth vote necessary to strike down Abood. The Janus decision is due to be released in summer of 2018.

The practical impact of the likely outcome in Janus may not be felt immediately in the workplace. It has been estimated that as many as 30% of union members will cease paying union dues if the requirement is abolished. Consequently, an abolishment of fair share fee payments will ultimately weaken their ability to conduct business.

Unions are keenly aware of this dynamic. They will likely seek alternatives to existing and upcoming collective bargaining agreements in the short term in an attempt to contractually preserve fair share fees for as long of a period as possible.

Any questions on this topic can be directed to Max Rieker at 216-928-2972 or


It is with great sadness that we announce the passing of our longtime colleague and friend, Jim Mackey.

Jim, 67, died Wednesday, November 29, 2017.

“Jim’s contributions to our collective endeavors have been significant, and we will truly miss his spirit, tenacity and kindness,” said Ralph Cascarilla, Walter | Haverfield’s managing partner.

A partner in our Corporate Transactions and Tax and Wealth Management groups, Jim joined Walter | Haverfield in 2001. He was particularly experienced in helping entrepreneurs in business transactions. He was also well known for his skills as an estate planner for individuals and business owners, assisting them through the complex process of estate and gift taxes as well as property transfers.

In 2011, John Carroll University honored Jim as an alumni medal award recipient. It is the highest honor awarded annually by the alumni association for an individual’s accomplishments in his/her profession, personal life and community as well as his/her dedication to John Carroll University.

In 2008, the Ohio State Bar Association recognized Jim as an estate planning, trust and probate board certified specialist in an issue of its Ohio Lawyer magazine.

Outside of the office, Jim was an active volunteer and community leader. He served as president of John Carroll University’s National Alumni Association and was a member of the board of trustees and the Presidential Search Committee. He was also chairman of the university’s Tax Advisory and Planned Giving Counsel.

Prior to joining Walter | Haverfield, Jim worked for Chattman, Gaines and Stern, LPA for 25 years, where he served as a managing director and the firm’s chief financial officer.

Jim leaves behind a wife, three sons, a daughter and 11 grandchildren.


Following the seemingly endless accusations of sexual harassment in Hollywood, on Capitol Hill, and in corporate America, employers may wonder what they can do to get ahead of the next potential headline in 2018. While it may be impossible to eliminate all conceivable claims of harassment, employers can take some steps to help avoid liability by creating or strengthening anti-harassment programs.

First, employers should consider reviewing and updating current sexual harassment policies. In such policies, employers should clearly define what is considered harassment and indicate that it will not be tolerated. These policies should also provide a clear reporting mechanism for employees to report harassment. Employers should attempt to remove potential roadblocks to reporting, by providing several avenues to report harassment, including confidential reporting through a hotline or other means. Employers may also consider promulgating a description of the steps of an investigation when the employer is presented with a sexual harassment complaint.

Additionally, employers should make sure they have strong anti-retaliation policies for the reporting of sexual harassment claims. Having such a policy on the books will likely provide some employees the courage they need to come forward. Additionally, it is the law – retaliation against an employee for making a harassment complaint is a stand-alone violation of both federal and state civil rights laws. Once the policies are updated, employers should distribute the policies to their employees.

While Ohio maintains no law requiring employers to provide training to its employees on sexual harassment, the Ohio Civil Rights Commission’s administrative regulations [Ohio Adm. Code 4112-5-05(J)(6)] indicate that employers should take all necessary steps to prevent sexual harassment, including “raising the issue of, stating disapproval of, developing sanctions against and informing employees of their rights and how to raise the issue of sexual harassment.” Accordingly, employers should also consider implementing training programs for all employees. Managers and supervisors should be trained on what sexual harassment is, how to identify it, and how to handle specific complaints. They should also be trained to identify retaliation, even absent specific complaints. And with regards to rank and file employees, it’s important that they be trained on the definition of sexual harassment and the process in which to report harassment and retaliation in the organization.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.

Individuals and businesses have until February 15 to pay unreported or underreported tax liabilities and avoid penalties, reduce interest costs

Individuals and businesses that owe unreported or underreported tax liabilities as of May 1, 2017, have an opportunity to avoid all tax penalties and cut the interest they owe in half if they act by February 15, 2018. The special offer is part of the new tax amnesty program announced by the Ohio Department of Taxation in November. The program takes effect January 1, 2018, and only applies to tax liabilities that are unknown to the Department of Taxation.

Residents, as well as nonresidents of Ohio, are eligible as long as they have not already received a notice of assessment and are not currently under audit.

Types of taxes covered under the amnesty program include:

  • Individual income tax
  • School district income tax
  • Employer withholding tax
  • Employer withholding for school district income tax
  • Pass-through entity tax (primarily for out-of-state businesses)
  • Sales and use taxes
  • Commercial activity tax
  • Financial institutions tax
  • Tobacco and alcohol tax

In some cases, nonresidents and out-of-state businesses may not have been aware of their Ohio tax obligation. It’s important to note that most income, purchases or commercial transactions that originate in Ohio are subject to Ohio taxes. Such previously unknown liabilities are covered under the new amnesty program.


It’s a hot topic that is the focus of many attorney commercials and frequently makes news headlines across the state. They’re called firefighter cancer claims, and they can have significant financial impact for victims, attorneys and employers.

Earlier this year, state legislators amended the Ohio workers’ compensation law to allow current and retired firefighters suffering from various cancers to collect compensation benefits under certain circumstances. But there are exceptions to the rule, and municipalities, villages, townships and other employers of paid or volunteer firefighters should understand how the amendment affects them.

To be eligible for benefits, a firefighter must have been:

  • Working hazardous duty for at least six years. Defined as “duty performed under circumstances in which an accident could result in serious injury or death.”
  • Exposed to a known carcinogen while on duty.
  • Diagnosed with cancer by an appropriate medical provider.
  • First diagnosed, first received treatment, or first quit working due to the cancer on or after April 6, 2017.

The following circumstances can lead to the denial of benefits:

  • The firefighter is 70 years old or older.
  • The firefighter has not worked in the profession for more than 20 years.
  • The firefighter used or was exposed to cigarettes, tobacco products, or other conditions that would increase his/her risk of cancer.
  • The firefighter was not exposed to known and specific carcinogens.
  • The firefighter developed cancer before becoming a firefighter.

If the employer disputes the firefighter’s claim, the firefighter must prove that being
exposed to cancer-causing agents while working hazardous duty as a firefighter caused the diagnosis of cancer. Yet, a cancer diagnosis is not enough to prove a work-related claim. The employer may seek to demonstrate that non-work-related factors caused the firefighter’s cancer thereby resulting in the denial of the claim.

Employers should be cautious and use due diligence before certifying a firefighter cancer claim. If you have questions regarding cancer claims, contact Walter | Haverfield to determine whether it is causally related to the firefighter’s exposure to known and specific carcinogens while working hazardous duty for at least six years.

Margaret O’Bryon is an attorney at Walter | Haverfield who concentrates on workers’ compensation law as well as public and employment law. She can be reached at 440-652-1173 or


December 6, 2017 – Walter | Haverfield is pleased to announce that nine of its attorneys have been selected to the Ohio Super Lawyers list. An additional 11 attorneys have been selected to the Ohio Rising Stars list. The names of those honored are below.

Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. No more than 2.5 percent of lawyers in the state are recognized by the Ohio Rising Stars research team.

Super Lawyers is a rating service of lawyers from more than 70 practice areas who have attained peer recognition and professional achievement. The annual selections, for both Super Lawyers and Rising Stars, are made using a multiphase process that includes independent research, peer nominations and peer evaluations.

Our 2018 Ohio Super Lawyers Honorees: Our 2018 Ohio Rising Stars Honorees:
Ralph Cascarilla George Asimou
Darrell Clay Benjamin Chojnacki
Bonnie Finley Brendan Healy
Irene MacDougall Patrick Hruby
Crain Marvinney Joshua Hurtuk
Kevin Murphy Shelly LaSalvia
Charles Riehl Ted Motheral
John Waldeck, Jr. Jamie Price
Gary Zwick Rina Russo
andnbsp; Megan Zaidan
andnbsp; Peter Zawadski


The Ohio History Connection (previously the Ohio Historical Society) has just released an updated suggested record retention schedule for school districts. The template for this schedule can be accessed here.

School districts are not required to adopt new record retention schedules simply because an update has been released. However, the updated suggested schedule is significantly more detailed than the previous guidance provided by the Ohio History Connection. This level of detail, and the effort to better align the names and categories of records with those generated by school districts, should prove helpful to districts.

School districts are encouraged to review their current record retention schedule as well as the updated schedule. According to the Ohio History Connection, the retention periods on the schedule are required by statute or have been determined by best practice. However, each school district’s local records commission should review the suggested retention periods carefully with legal counsel to determine whether any adjustments should be made. The suggested retention periods can be edited based on the administrative, fiscal, legal and historical value of the records as determined by the commission. Additionally, school districts should note that a new record retention schedule will not be in effect until it is adopted and signed by the commission as well as by a representative from the state archives and the Ohio Auditor of State’s office. Finally, school districts should review their board policies to ensure that the policy is in alignment with the record retention schedule adopted by the commission.

Any questions on this topic can be directed to Christina Peer at 216-928-2918 or or any of the other attorneys in the Education Law group.