News

By: Edward Patton

House Democrats and President Donald Trump struck an agreement to revise a new trade deal with Mexico and Canada, delivering a win for the president on a top legislative priority on December 10, 2019. House Speaker Nancy Pelosi, D-Calif., called the revised trade pact “a victory for America’s workers.”

Congress agreed to the U.S.-Mexico-Canada Agreement (USMCA), sometimes called NAFTA 2.0. The agreement updates the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations, for the 21st century. The new USMCA will support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America. The agreement is expected to be formally voted on before the end of the year.

The USMCA provides changes to Intellectual Property and Digital Trade protection. These changes would potentially liberalize financial services markets and facilitate a level playing field for U.S. financial institutions, investors and investments in financial institutions, and cross-border trade in financial services. Labor protection and new trade rules of origin will drive higher wages by requiring that 40-45 percent of cars and trucks be made by workers earning at least USD $16 per hour. The USMCA requires Mexico to change its laws to make it easier for workers to unionize.

The United States, Mexico, and Canada have agreed to stronger rules of origin that exceed those of both NAFTA 1.0 and the Trans-Pacific Partnership (TPP), including automobiles and automobile parts and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber. This deal exceeds NAFTA 1.0 and the TPP by establishing procedures that streamline certification and verification of rules of origin and that promote strong enforcement. This includes new cooperation and enforcement provisions that help to prevent duty evasion before it happens. The new rules will help ensure that only producers using sufficient and significant North American parts and materials receive preferential tariff benefits. For example, in the automotive industry, there are big changes in the rules of origin. The goal of the new deal is to have more car and truck parts made in North America. Soon, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

Finally, unlike NAFTA, the USMCA has a sunset provision meaning the terms of the agreement expire, or “sunset” after 16 years. The deal is also subject to a review every six years, at which point the U.S., Mexico, and Canada can decide to extend the USMCA.

The White House has yet to release a final copy of the USMCA, so not all of the details are known. This deal was first announced in September 2018 but House Democrats have demanded several changes since then. The latest full version of the text, which was released publicly in May, does not include changes negotiated in recent days. The effective date of the agreement is not known.

As we previously reported, we have been awaiting the final rule from the Department of Labor (DOL), raising the salary threshold for those eligible for overtime. Today, the DOL announced the new rule, raising the standard salary level from $455 per week to $684 per week ($35,568 for a full-year worker), which will make approximately 1.2 million more workers eligible for overtime. This new rule, which goes into effect January 1, 2020, will also allow employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level. Additional information about the new rule can be found here.

For questions regarding how the new overtime rule, job classifications, or wage and hour issues may impact your company, contact Mansour Gavin’s Labor and Employment Group.

John Monroe delivered a legal victory for the Queen of the Lakes Manufactured Home Community by taking on the Township of Berlin’s Zoning Board of Appeals in Erie County, Ohio. The manufactured home Community was seeking to expand their Community and as the Community was built before certain zoning changes, it had the status of “Non-Conforming Use.” As a Non-Conforming Use, the Community sought to expand into its “footprint” by adding 22 manufactured homesites. The Berlin Township Board of Zoning Appeals denied the plans for expansion.  Continue reading on the Ohio Manufactured Homes Association’s website.

The National Labor Relations Board (“NLRB”), in a 3-to-1 decision, dealt another setback for Unions and their efforts to improve membership by further eliminating the right of Unions to organize “mini-bargaining units” within a larger facility. This decision further enforces the NLRB’s decision in PCC Structurals, Inc. (2017) in which the Board re-enforced its rejection of the Obama Board’s decision in Specialty Healthcare (2011) which broadened the right of Unions and employees to organize smaller units within a larger facility. In the Court’s new decision, The Boeing Company, the Board clarified the “Community-of-Interest” standard enunciated in PCC Structurals by applying a three-step process for determining whether the proposed bargaining unit is appropriate. The Board determined that:

1.   The proposed unit must share an internal Community-of-Interest. That is, the employees share similar functions, share common supervision, and work in common work areas.

2.   The interests of those within the proposed unit and the shared and distinct interests of those excluded from the unit must be comparatively analyzed and weighed. In other words, instead of focusing on the smaller proposed unit, the focus now switches to whether the “excluded employees have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members.” Said another way, taken as a whole, are the differences between the proposed unit and the excluded unit significant enough to warrant approval of the proposed smaller unit?

3.   Where applicable, there should also be consideration of guidelines that the Board has already established for specific industries with regard to appropriate Union configurations (such as defense contractors).

Under the Obama Board, Unions which did not enjoy the support of a majority of a larger facility would often seek to organize smaller distinct units within a particular facility. This, in turn, would not only lead to a possible situation where the facility was both unionized and non-unionized but often was used as a means of leveraging Union support in other parts of the facility. However, as the Board has made clear in The Boeing Company decision and its earlier decision in Specialty Healthcare, that strategy has been significantly undercut.

For further information on the impact of these proposed rules, please contact members Mansour Gavin’s Labor and Employment Group.

1.     Eliminating “blocking charges” from postponing elections. For several years, employees and Unions petitioning for Union recognition often filed unfair labor practice charges shortly before Union elections in an effort to “block” the election until the charge had been completely resolved. The so-called blocking charge became a favorite weapon of Unions, particularly where Union support appeared to be shaky. Under the proposed rule, the NLRB will no longer postpone Union elections based merely on the filing of the charge. Instead, the new rule would permit the election to go forward and the results would be held in abeyance until the unfair labor practice was resolved. This would remove a potentially significant strategic advantage for Unions.

2.      Modified “Voluntary Recognition Bar.” Under the current rules, employers are free to voluntarily recognize Unions in the absence of an NLRB election and employees have no say in the outcome. This is called the Voluntary Recognition Bar. Under the proposed rule, employees are to be given notice of the proposed Voluntary Recognition and offered a 45-day open period for filing an election petition seeking a vote on whether or not to recognize the Union.

3.     “Pre-hire” Agreements in the Construction Industry. Under the current law, pre-hire collective bargaining agreements can be entered into without a showing of employee majority support for a Union and even before it has hired any employees. Under the proposed rule, the Board will now require actual evidence of employee majority support before it will approve a pre-hire agreement.

These proposed rules continue the NLRB’s effort to reconstruct itself into a more employer-friendly Board. This follows, for example, the Board’s decision in Cordúa Restaurants announced just last month permitting employers to require employees to sign mandatory arbitration agreements barring collective actions under the Fair Labor Standards Act even if in response to Section 7 (organizing) activity, which we discussed here.

For further information on the impact of these proposed rules, please contact members of the Mansour Gavin Labor and Employment Group.

Our attorneys are always ready, willing and able to meet and discuss any questions you may have. Learn more about Mansour Gavin’s Labor and Employment Group.

Tony Coyne will be a presenter at the Eminent Domain Institute’s program in Columbus, Ohio. The two-day conference will feature an overview of Eminent Domain Law and Policy, Mediation, Jury Selection, Trial Strategy, Quick-Takes and more. The Program will consist of attorneys, mediators, government officials, and appraisers to share their experience and knowledge on eminent domain topics. Tony, along with Michael Braunstein and Scott Phillips, are Co-Chairs of this Conference.

EVENT DETAILS: 

Eminent Domain Attorney-Appraiser Collaboration

When:     May 17-18, 2018

Location:    Renaissance Downtown – Columbus, OH

Tony Coyne is the firm’s President and a member of Mansour Gavin’s Real Estate and Land Use, Corporate and Business Law and Environmental Law practice groups where his practice is focused on business law, municipal law, zoning and planning, eminent domain, real property and litigation.

For more information about the Conference or to register click here.

By:  Josh Morrow

The long-awaited Ohio Supreme Court decision in Ohio Northern University v. Charles Construction Services, Inc., finally hit the books in the last quarter of 2018, sending a clear message to Ohio contractors that their commercial general liability (“CGL”) insurance policies likely will not cover damages caused by their subcontractors’ defective work.

Contractors were already made aware of their lack of CGL coverage for their own defective work, thanks to the Ohio Supreme Court’s ruling in the often discussed Westfield Ins. Co. v. Custom Agri. Sys., Inc. decision from 2012. However, the question arose in ONU as to whether the defective work of a contractor’s subcontractors could be considered an “occurrence” under the contractor’s CGL policy, thus deeming it a covered event. The Court held that the subcontractor’s defective work is not “fortuitous” and therefore not “accidental.” As such, the defective work was not a covered “occurrence” under the general contractor’s CGL policy.

The decision deviates from the position in the majority of states, which have found an event to be an “occurrence” pursuant to the general contractor’s CGL policy language. Time will tell as to how the Ohio legislature responds to the ONU decision, if at all. Until then, contractors should address the issue with their carrier and look to purchase a rider or other form of an endorsement to their current CGL policy in order to fill the gap in coverage.

Perhaps more importantly, contractors should also conduct thorough due diligence when selecting their subcontractors, ensuring only those subs who are qualified and reputable provide work. Significant and consistent on-site inspections should then follow once a subcontractor’s work commences.

While uncertainty remains as to the extent of the ripple effect caused by the ONU decision, one thing seems to be a given. The decision will impact Ohio contractors’ bottom line, as they will now be forced to address their subcontractors’ defective work purely out of their own pocket without the assistance of their carrier. Alternatively, contractor insurance premiums will likely rise in connection with any rider that may look to provide coverage for such work.  Contractors should consult with their insurance agents and lawyers regarding the impact of the decision, both short and long term.

By: Brendon Friesen

Copyright law immediately protects a creator’s original work once reduced from a mere idea to a “medium of expression” such as artwork, novels, photography and video. Among other rights, the creator has the exclusive right to copy it. While copyright exists at common law, if you want the full protection and remedies offered by the U.S. Copyright Act you must deposit your work with the Copyright Office and pay a fee. Many do not take that extra step to protect their original work.

The Supreme Court shook the copyright world on March 4, 2019 with its decision in Fourth Estate Public Benefit Corporation v Wall-Street.com. Justice Ruth Ginsberg issued the decision, finding that copyright owners must register their copyright with the U.S. Copyright Office before bringing a lawsuit to stop infringement. Prior to the Fourth Estate decision, Circuit Courts were split on the issue – some of which allowed copyright owners to apply for registration at the time of filing the lawsuit. The wait-and-see approach became common practice and, according to Justice Ginsberg, defeated the purpose of the Copyright Act and intent of Congress. The Court believed that forgiving the failure to register de-incentivized copyright owners to take the required steps to register their copyright at, or before, the time of publication. The decision, while perhaps consistent with the language of the Copyright Act, is problematic if you have not already taken steps to register your copyright. The current review period of the Copyright Office from submission to registration, assuming there are no problems faced in the process, can be months, not days or weeks. That is, the copyright owner must wait months to bring a lawsuit to stop an infringement.

What does this mean for you? That original work you created is always at risk of infringement. If you have not taken steps to register the copyright, given the Fourth Estate decision, you’ll be sitting on the sidelines before you can get in the game to defend your turf. All the while, the bad guys are cashing in on your hard work and just might get away with it for not more than a slap on the wrist. Also keep in mind that certain statutory damages, up to $150,000 for each violation plus attorney’s fees, are not available if the infringement occurred after publication and before your effective date of registration. So take that extra step and get your copyright registered with the U.S. Copyright Office.

By:  Jen Horn

When the European Union’s General Data Protection Regulation (GDPR) was introduced in May, one of the biggest questions was how the law was going to be enforced. The GDPR, which also applies to any U.S. company that handles the personal data of EU citizen, requires businesses to clearly state when they’re collecting personal data and ask for users’ consent in doing so. Many believe it will have implications for future data privacy rules in the United States as well. So far, it looks like the law is being taken seriously – regulators across the EU have already begun imposing fines.

Article 83 of the GDPR authorized data protection authorities (DPA) in EU member states to impose fines of up to approximately $22 million USD, or 2% of a company’s worldwide revenues, or, for serious violations, up to approximately $45 million USD, or 4% of a company’s worldwide revenues. However, Article 83 also required that fines had to be “effective, proportionate, and dissuasive.” The somewhat vague language left many companies wondering how large, exactly, the fines might be.

Their first example came in September, when the Austrian DPA fined the owner of a gambling shop because a camera at its front entrance also recorded footage of a public sidewalk. Interestingly, the Austrian DPA found this was a violation of the GDPR because it was considered a prohibited monitoring of public space. The fine, however, was approximately $5,000 USD plus legal costs, and the Austrian DPA acknowledged that the fine was meant to be “proportionate” to the violation.

A hospital in Portugal, however, was not quite as lucky. News was released in October that the unnamed hospital received a fine of approximately $455,000 USD for two separate violations. The first involved patient information that was found to be inappropriately available to non-medical staff; the second concerned the confidentiality and integrity of treatment systems. This is one of the highest fines imposed to date, and the hospital has stated it is appealing the penalty.

Most recently, a German chat platform was fined approximately $91,000 USD for a breach of user passwords that occurred in July. User information and passwords were stored in unencrypted plain text, and hackers managed to gain access to more than 800,000 email addresses and more than 1.5 million user names and passwords, some of which were later published on the Internet. Fortunately, the company’s handling of the event appears to have helped reduce the amount of its fine; the DPA report noted the company’s fast communication of the incident to its users, as well as its total cooperation with the DPA.

So what can this tell us about how the GDPR will be enforced? In sum, it appears that the law will be enforced fairly – but broadly. If a DPA is willing to impose a fine, however small, for a camera that captures too much of a public sidewalk, that’s a sign that the EU is serious about improving data privacy and security for consumers. Just as important, though, is that it also appears a company’s quick and comprehensive response to learning about an issue could lessen the amount of its fine.