Mansour Gavin, Author at Mansour Gavin LPA

By: Jeffrey M. Embleton

On June 27, 2016, U.S. District Judge Sam R. Cummings issued a nationwide injunction blocking enforcement of the Union Persuader Rule which was to take effect on July 1, 2016. This Rule would have required employers and management law firms and consultants to publically report payments for certain advice and consultation that was protected from disclosure for over a half century under the Advice Exemption. Many business and legal organizations, including the American Bar Association, vigorously objected to this new rule because they claimed it would create ethical and confidentiality issues for lawyers and companies required to disclose lawyers’ advice. In fact, several law firms have announced they would no longer provide union avoidance training or advice based on the new disclosure rules. This recent decision marks the second ruling in less than a week by two separate federal district courts. Last week, the U.S. District Court in Minnesota refused to enjoin enforcement of the new rule although the court did find that the plaintiffs (an association of various law firms) were likely to succeed, “in their claim that portions of the new rule conflict with the (Labor-Management Reporting and Disclosure Act of 1959 (LMRDA)).”

The district court in Texas went considerably further, however, when it issued a nationwide injunction blocking enforcement of the new rule.

What the Court said…

In its 90-page opinion, the court spent the first 30 pages detailing the evidence that was presented, including eight witnesses presented on behalf of the consortium of business groups and a number of exhibits. Interestingly, the Department of Labor chose not to call any witnesses or introduce any evidence. The witnesses included practicing lawyers, a former Board Member from the National Labor Relations Board, the former President of the American Bar Association and other specialists. The court specifically referenced the American Bar Association’s lengthy opposition to the proposed Persuader Rule and pointed to the ABA’s discussion on the conundrum that lawyers would be faced with in deciding whether to disclose the “advice” given to its employer/clients or choose not to give any advice at all. The court also noted that the estimates of the cost of compliance in the first year alone ranged from $7.5 billion to $10.6 billion with annualized costs thereafter of $4.3 billion to $6.5 billion, far in excess of the $826,000 calculated by the Department of Labor. Finally, it concluded that the new Persuader Rule failed on several legal grounds because, the Court found, it is likely that:

-DOL lacked statutory authority to promulgate and enforce the new Advice Exemption Interpretation of the Persuader Rule;

-The new rule is arbitrary, capricious and an abuse of discretion;

-The new rule violates free speech and association rights protected by the First Amendment of the United States Constitution;

-The new rule is unconstitutionally vague in violation of the Due Process Clause of the Fifth Amendment of the U.S. Constitution;

-The new rule violates the Regulatory Flexibility Act; and

-The plaintiff associations have shown the substantial threat of irreparable harm.

The court thus concluded that a nationwide injunction requiring enforcement of the new rule was appropriate and that such preliminary injunction would stay in place until further order of the court or final resolution of the merits of the case.

What Does This Mean for Employers and Law Firms?

Many law firms and employers were faced with a decision as to whether to enter into new engagement letters before July 1^st covering activities that were to be regulated under the new Persuader Rule or, as some law firms decided, to simply get out of the business of providing advice and strategy on union avoidance. Fortunately, the district court’s order removes that immediate deadline although it is expected that this case will be appealed to the Federal Court of Appeals. Thus, it is likely we have not heard the last of this particular case or the challenge over the validity of the new Persuader Rule. Additionally, there is one more case pending in the U.S. District Court in Arkansas and we are awaiting a ruling from the court which may come very soon.

Employers and practitioners are encouraged to keep a close eye on the court challenges. It may be prudent to move forward and enter into engagement letters specific to union avoidance training and advice out of an abundance of caution although it is unlikely that the DOL will seek to enforce the rule in light of the district court’s ruling in Texas until legal challenges are complete. We will continue to keep our readers advised as further developments occur.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney

All of us at Mansour Gavin LPA watched the NBA playoffs hoping that maybe, just maybe, this was Cleveland’s year. We hosted Cavaliers dress down days to benefit charities, employed various good luck charms like lucky suits to ensure a win, and had plenty of water cooler discussions about the previous night’s games. And when the 2016 NBA Champion Cleveland Cavaliers hosted their victory parade and rally last Wednesday, June 22nd, we had an amazing bird’s eye view of the festivities from our office. The pictures above were taken at 8:30 a.m., 11:00 a.m., and when LeBron (finally) came through around 2:30 p.m. Bonus points if you can find him in the crowd!

The female attorneys of Mansour Gavin LPA hosted their second annual Women’s Night Out on Tuesday, June 21st, at Merwin’s Wharf in the Flats. Attendees enjoyed drinks and hors d’oeuvres from the Cleveland Metroparks restaurant, and listened to Saana Julien, CEO, Public Square Programming and Operations, speak about her experiences getting Public Square ready for its grand opening and plans for the future of the location. Many thanks to those who joined us, and we hope to see you back next year!

Mansour Gavin LPA President Tony Coyne, a member of the firm’s Real Estate and Land Use practice group, was recently named an Alumni of the Year by Cleveland-Marshall College of Law’s Alumni Association. Coyne, along with co-honoree, Tucker Ellis Partner Carter Strang, were recognized at the annual CMLAA Luncheon. Tony’s involvement with the City of Cleveland and Planning Commission, as well as all of his work as chairman of the Group Plan Commission, which spearheaded the redevelopment of Public Square, were highlighted as examples of his community involvement. Congrats, Tony, on a well-deserved award!

By: Brendon P. Friesen

OVERVIEW

On June 8, 2016, Governor John Kasich signed into law House Bill 523, legalizing the use of medical marijuana. As such, Ohio is the 25th state to legalize the drug for medicinal purposes. HB 523 permits the medicinal use of marijuana for the treatment of a list of 21 diseases including AIDS, Alzheimer’s, cancer, Crohn’s disease, epilepsy, fibromyalgia, glaucoma, MS, and chronic and severe, or intractable pain.

It remains illegal for physicians to prescribe the drug, but they may legally recommend the treatment of a patient with medical marijuana for the permitted conditions if the physician completes a comprehensive training program. Patients may use vapor, edible, topical, tincture and other similar products to administer the cannabis. Recreational use, smoking marijuana and home grown plants remain illegal.

WHAT ENTREPRENEURS SHOULD KNOW

It is important to understand the law and start thinking about how it may be regulated in the future. If more recent adoptive states, like Oregon and Washington, are any indication of the teething problems that can arise in a new program, then Ohio businesses are sure to experience some of the same issues without adequate planning and legal strategy.

The Department of Commerce (DOC) and the State Board of Pharmacy (Board), at the direction of an Advisory Committee, are charged with creating and administering the rules, regulations and licensing for medical marijuana business and use. The DOC and the Board will likely adopt rules, regulations and licensing by September 2017 and start processing applications shortly thereafter. Fifteen percent of licenses must be issued to minority owned businesses, if application numbers reach that level.

The DOC will regulate growers and processors and the Board will regulate retailers and patients. While vertical integration was prohibited in prior versions of the bill, HB 523 permits “seed to sale” enterprises, spanning cultivation to retail. And there are important procedures for the dispensing of medical marijuana, such as packaging and labeling requirements. Maximum tetrahydrocannabinol (THC) levels in plants and extracts are also regulated.

Local municipalities and township can limit, or prohibit, the number of licensed retail dispensaries. The question remains whether non-participating municipalities may share in the tax revenue. There are also radius restrictions for businesses in proximity to schools, churches, public libraries, public playgrounds, or public parks.

And keep in mind that the marijuana business remains illegal on the federal level, giving financial institutions cause for concern when doing business with those in the industry. HB 523 decriminalizes in Ohio the involvement of financial institutions, however. Different state tax treatment of the marijuana business is not yet clear, but it remains problematic under federal tax law which deems the business illegal. That is, marijuana businesses are not permitted to claim normal business tax deductions and credits on their federal tax filings. Some states, like Washington and Colorado, have taxation on marijuana products separate from ordinary sales tax.

WHAT EMPLOYERS SHOULD KNOW

The law contains important provisions for employers as well. Although the bill legalizes medical marijuana, so far there is nothing prohibiting adverse employment action due to an employee’s use of medical marijuana. Further, if an employee’s medicinal use violates their employer’s Drug-Free Workplace Program or similar policy, generally any discharge of that employee will be considered for just cause. Further, there is a rebuttable presumption that an employee is ineligible for workers’ compensation if the use of marijuana was the proximate cause of the injury, regardless of whether the use is recommended by the person’s physician. However, the law is untested as it relates to a challenge under the Americans with Disabilities Act and other employment discrimination laws.

There are so many details of the marijuana business that are yet to be written into law for regulatory and guidance purposes. Because of the timing requirements in HB 523 and the practical and logistical difficulties of the licensing process, dispensaries will not likely be operational in Ohio until mid to late 2018. Growers and processers will likely begin operating in early 2018. However, the time to start developing your business strategy is now.

For more information on the medical marijuana industry and related legal strategy please contact our Business and Corporate Services Group. For employment related concerns, please contact our Labor and Employment Practice Group.

LEGAL DISCLAIMER

On June 2, 2016, the Equal Employment Opportunity Commission issued a Final Rule increasing the penalty to employers for violations of the notice-posting requirements of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, and the Genetic Information Non-Discrimination Act from $210 per violation to $525. The last increase was in 2014, from $110 to $210. Employers can expect annual increases hereafter. Per the Final Rule, periodic inflation adjustments are required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency to issue regulations not later than July 1, 2016, and not later than January 15 of every year thereafter, adjusting for inflation the maximum civil penalty that may be imposed pursuant to each of the agency’s statutes, in order to maintain the remedial impact of civil monetary penalties and promote compliance with the law.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

The Cuyahoga County Court of Common Pleas recently reversed a decision rendered by the City of Cleveland Board of Zoning Appeals which had denied a zoning permit to construct a McDonald’s restaurant in Ohio City on Lorain Avenue. The Court agreed with McDonald’s, represented by Bruce Rinker of Mansour Gavin, who successfully argued that the City’s action was clearly arbitrary and unconstitutional.

The City Planning Commission had initially denied the application, “reasoning” that the proposed development would have an adverse impact on nearby pedestrian-oriented retail uses due to a presumed increase in vehicular traffic. One year and three costly traffic analyses later (spec’d by the City’s own experts) comprehensive evidence refuted those fears. Nor was it lost on the court that officials cynically disregarded the evidence anyway.

Despite strident political opposition voiced by neighboring witnesses who crowded into both the Planning Commission and BZA hearings, the Court found that no evidence existed to show that the project would adversely impact the pedestrian-oriented character of the neighborhood. In fact, the Court held that compelling evidence proved just the opposite. Finding that the City’s zoning code had merely been used as a pretext to deny expressly-permitted uses–where neither a variance nor any other use condition was required–the Court reversed the Board’s decision. Pointedly, the Court warned that the City’s three and one-half year stranglehold on the property was plainly unconstitutional.

For more information, please contact Mansour Gavin’s Real Estate and Land Use Practice Group.

LEGAL DISCLAIMER

Further Limitations Recognized in Employer Intentional Tort Claims

An Ohio appellate court recently affirmed a more restrictive definition of an “equipment safety guard” in the context of an intentional tort suit in McQuillen v. Feecorp Industrial Services. Ohio’s Intentional Tort Statute, Ohio Revised Code section 2745.01, allows an employee to recover economic and noneconomic damages by showing the employer committed a tortious act with the intent to injure or with the belief that the injury was substantially certain to occur. “Substantially certain” is defined as a specific or deliberate intent to cause injury. R.C. § 2745.01(B). A rebuttable presumption is created in favor of the employee if the employer deliberately removed an equipment safety guard or deliberately misrepresented a toxic or hazardous substance. R.C. § 2745.01(C). The legislature has not defined an “equipment safety guard” or “deliberate removal” for purposes of R.C. § 2745.01(C). Ohio Courts, interpreting the statute, have continually limited the meaning of an “equipment safety guard”, which has in turn restricted employee’s recovery in employer intentional tort claims.

The Ohio Supreme Court adopted the Sixth Appellate District’s definition of an “equipment safety guard” as a “device that is designed to shield the operator from exposure to or injury by a dangerous aspect of the equipment.” Fickle v. Conversion Technologies International. In a subsequent decision, Hewitt v. L.E. Myers Co., the Court further elaborated that any generic safety-related item will not be considered as an “equipment safety guard.”

Following that decision, the Fifth Appellate District, in Beary v. Larry Murphy Dump Truck Serv., Inc., narrowly construed the definition of an “equipment safety guard” when it determined that a backup alarm on a Bobcat loader vehicle, which was not properly sounding, was not an “equipment safety guard” for purposes of R.C. § 2745.01(C). “While the backup alarm may make the skid street safer, it does not shield the operator or a bystander from exposure to or injury by a dangerous aspect of the skid steer.”

Recently, the Fifth Appellate District, in McQuillen v. Feecorp Industrial Services, once again further limited the definition of an “equipment safety guard.” The court analyzed whether a lanyard-assisted “safety T” (a device that can be installed onto a vacuum hose at a point within 50 feet of the opening that would allow a user to automatically shut off the hose) was an “equipment safety guard.” The court compared the “safety T” to a remote cut-off switch, which is often found connected to various types of industrial machines. The court found that the mere existence of the “safety T” does not shield the operating employee from injury but rather, the operating employee’s action to engage the “safety T” is what provides a safety shield. The court held that the “safety T” in question did not constitute an “equipment safety guard” and therefore, plaintiff was unable to establish a rebuttable presumption of an intentional tort.

It is worth noting that Judge Hoffman’s dissenting opinion in McQuillen identifies that the appellate court’s interpretation of an “equipment safety guard” was “overly restrictive” that the use of the term “shield” is a verb, not a noun and “to shield” means “to protect from.” Following this reasoning, Judge Hoffman stated that the operating employee’s “need to take a proactive step to engage the safety T on an as-needed basis does nothing to detract from its intended purpose to shield the operator from injury.”

Despite these additional restrictions that Ohio Courts have recognized in employer intentional torts, employers should still take precaution to guard against the possibility of these claims. Employers should train their employees about the importance of safety guards and the dangers of toxic and hazardous substances, as well as have a system in place to inspect all equipment to ensure that safety guards are in the proper place.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

In Steak ‘n Shake, Inc. v. Warren Cty. Bd. of Revision, the Ohio Supreme Court explained proper appraisal methodology when using leased properties as comparable sales in valuing unleased, owner-occupied properties. On appeal, Steak ‘n Shake — the owner-occupier — asked the Court to review the County’s appraiser’s failure to adjust his comparable sales to account for the fact that the comparables were all subject to long-term leases.

Reversing the BTA and remanding the case for further proceedings, the Court recognized that leases generally enhance the value of real estate. Thus, “sale prices of leased properties generally must be adjusted when determining the value of comparable unleased properties” like the Steak ‘n Shake property. The Court noted the County’s appraisal failed to “remove the effect that long-term leases would have” and recognized that “[s]ince the property at issue was unencumbered by a lease, it would likely have sold for less.” The Court also rejected the County’s argument that Steak ‘n Shake fell within the special-purpose doctrine, which is generally applied to distinctive yet highly useful structures being used for the unique purpose for which they were built (think Wal-Mart) in order to prevent an owner from escaping full property tax liability. In other words, buildings such as the Steak ‘n Shake are readily saleable on the open market for other purposes.

If you own unleased property and are seeking a property tax reduction, be cognizant of improper appraisal methodology in competing appraisals. For more information on this and other real estate matters, please contact Mansour Gavin’s Real Estate and Land Use Practice Group.

LEGAL DISCLAIMER

By: Edward O. Patton

Suppliers and importers of overseas goods should take immediate notice of a new federal law, the Trade Facilitation and Trade Enforcement Act of 2015, which went into effect in March. Trade Facilitation and Trade Enforcement Act of 2015 now officially prohibits the importation of goods produced by forced labor or child labor, closing an 86 year old loophole and reauthorizing the Customs and Border Protection Agency to seize any imports suspected of being produced by forced labor. The timing of the Trade Act coincide with changes to the Federal Acquisition Regulations and DFARS that greatly strengthen anti –trafficking prohibitions and compliance requirements.

What Does the New Trade Law Prohibit?

The Trade Law prohibits importing into the U.S. goods that are produced, manufactured, or mined by forced, indentured, or convict laborers. The Trade Law effectively ends the loophole that previously existed under the U.S. Tariff Act of 1930 which previously permitted, if consumer demand exceeded domestic production, the importing of goods made with forced labor. Because demand in many sectors of the U.S. economy often exceeded domestic production, this loophole often permitted the importing of such goods. However, with the 2015 Act now in effect, this loophole was closed and now goods can be seized.

Changes to the Federal Acquisition Regulations and DFARS that greatly strengthen anti –trafficking prohibitions require that contractors and subcontractors supplying the Federal government have anti trafficking compliance programs.

Who Does the Law Apply To?

All importations into the U.S. and to any company that is a subcontractor or supplier to a Federal contract.

What Does This Mean for Importers of Overseas Goods?

The 2015 Trade Law places more pressure on suppliers and importers to scrutinize their supply chains and develop compliance systems to ensure forced indentured, or convict laborers are not producing their imports. The law also allows any interested party to request the U.S. Customs and Border Protection to investigate imports to determine if they were produced with forced labor in a foreign country. Interested parties will likely turn to the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor and Executive Order 13126 to identify potential goods when making their requests. Goods found to be produced, in whole or in part, with forced labor can be excluded and/or seized. Further, such a finding can compel the investigation of the importer itself.

What does this mean for Suppliers to Federal Contracts?

All Federal contractors and subcontractors are prohibited from engaging in trafficking activities and are required to implement and certify compliance to a formal compliance plan. A plan must include procedures for preventing agents and subcontractors from engaging in trafficking in person and for monitoring, detecting and terminating those who engage in the prohibited activities.

What Should Suppliers and Importers Do to Comply?

With these changes in mind, it is very important that importers and suppliers to Federal contracts or contractors work to limit the risks under federal law. As a result of the new legislation, companies should implement a policy and/or compliance plan to meet the revised laws because of Federal Contract “flow down” provisions which require compliance at all levels of a Federal contract or subcontractor regardless of dollar values so that even lower tier contractors require compliance. Companies should implement a screening program to deter their supply chain from engaging in the prohibited conduct.

For more information on this matter and how to best limit such risks and ensure compliance with the 2015 Act, please contact Mansour Gavin’s Corporate and Business Services Group.

LEGAL DISCLAIMER

Texas Federal Judge Blocks Enforcement of Union Persuader Rule