Government Law Department Publishes First Edition of The Capitol Mall Dispatch

Our quarterly newsletter will cover developments in the law that will be of interest to attorneys representing clients with matters involving state and local governments, to businesses subject to government regulation, to lawyers representing governments, and to policy-makers. We welcome your suggestions and comments. If you wish us to add your name to our distribution list, simply email your request to Jane Leonhardt.

Government Group Newsletter: The Capitol Mall Dispatch

Volume 1, First Quarter, 2010

LEGISLATURE CONVENES

The Legislative Assembly convened February 1, 2010. Here are summaries of a few significant bills.

Significant Legislation
A-Engrossed HB 3706: Insurance,Loans
Lenders currently are exempt from certain private lawsuits and from enforcement actions brought by the Attorney General under authority of the Unlawful Trade Practices Act (UTPA). HB 3706 extends the UTPA to “loans and extensions of credit.” If it becomes law, the bill will empower the Attorney General and Director of DCBS to promulgate administrative rules specifying particular forms of unfair or deceptive practices forbidden to lenders. The bill would also authorize individuals to enforce the UTPA via private
lawsuits against lenders.

A-Engrossed SB 1045: Credit Histories of Prospective Employees
With exceptions, the bill would make the use of an individual’s “credit history” for employment purposes an unlawful employment practice. The bill’s enforcement provisions allow an individual to file a complaint with the Bureau of Labor and Industries (BOLI) and to also bring a civil action in circuit court.

A-Engrossed SB 1060: Public Use of Waterways
The State of Oregon owns certain submerged and submersible lands. For a comprehensive examination of the rights and responsibilities of the public and private landowners in waterways, see formerAttorney General Hardy Myers’ formal opinion dated April 21, 2005 (OP 8281). As amended in the Senate, SB 1060 creates a Task Force to study the use by the public of waterways. On February 16, 2010, the Senate voted against the bill by a vote of 14 ayes and 16 nays.

HB 3698: State Financial Support for Small Business Development
Loans of up to $150,000, and outright grants capped at $50,000 per recipient, would be available to small businesses meeting specifi ed criteria. The funds, to administered by the Oregon Business Development Department, are to be drawn from a new state account called the Building Opportunities for Oregon
Small Business Today Account, or BOOST Account. The legislation directs the Department of Revenue to expand its income and corporate excise tax enforcement effort and to quarterly transfer the fruits of those efforts into the BOOST Account.

PUBLIC RECORDS LAW OFTEN INVOKED TO OBTAIN STATE AGENCY RECORDS

Oregon’s venerable Public Records Law, adopted in its modern form in 1973, establishes a presumption that all records used or created by state and local agencies will be disclosed to anyone upon request for any reason. A requester disappointed by the timelines or content of a state agency’s response may petition the Attorney General for an order requiring the agency to respond differently.

Harrang Long Gary Rudnick obtained by public records request copies of 70 Public Records Orders issued by the Oregon Department of Justice (DOJ) between January 4, 2009 and January 4, 2010. DOJ denied all but a few.

Petitioners whose petitions were denied by DOJ nevertheless often received all of the records they had requested from the state agency. For example, in 11 instances, it wasn’t necessary for DOJ to order the agency to yield the records because after the petitioner sought DOJ’s assistance, the custodian of the records delivered or promised to deliver the records as originally requested.

One individual filed ten of the 70 petitions on which DOJ ruled. Individuals whose affiliation couldn’t be determined from the petition filed 24 of the petitions. Inmates submitted 21 petitions. Lawyers making requests on behalf of clients were the next most numerous (15). Nine petitions were filed by reporters or editors.

DOJ cited specific confidentiality rules extrinsic to the Public Records Law in 16 of its orders. Of those cases, the majority involved autopsy records held by the State Medical Examiner or Department of Human Services records about children.

AGENCIES ENACT, PROPOSE RULES

State agencies usually have the power to enact administrative rules. Some are required to engage in rulemaking. Except in emergencies, agencies must conduct a public hearing and set a fi nal date for public comment before enforcing a proposed rule.

Comment Period Open

Waldo Lake. Prohibits motorboats and floatplanes on Waldo Lake. Oregon State Marine Board. 2/22/10 is the last date for public comment.

Apprenticeships. Multiple revisions to administrative rules for registered apprenticeship programs. Bureau of Labor and Industries. 3/17/10. Proposed changes affect investigative subpoena requirements, public records requests requirements, compliance review administration, and licensing procedures.

Utility Taxes. Revises rules implementing legislation requiring tax related adjustments to regulated utility company rates. Public Utility Commission. SB 408 (2005), codifi ed as ORS 757.268, adjusts utility rates for differences between the amount of taxes the utility estimated during rate making it would pay and the amount the utility actually paid. The proposed rules modify aspects of the adjustment procedure. 3/3/10

Tax Amnesty. Defines terms and articulates policy relating to the tax amnesty program. Department of Revenue. 2/22/10.

Triple Truck Trailers. Allows operation in Oregon of triple trailer combinations with single wide base tires in place of the current state four tire per single axle requirement. Department of Transportation. 2/22/10.

Comment Period Recently Closed

Liquor. Allow more flexibility in advertising a retail liquor store with prior Commission approval. Oregon Liquor Control Commission.

Protective Gear. Adopts federal amendments to standards for personal protective equipment in general industry, agriculture, maritime activities, and forest activities. Department of Consumer and Business Services, Oregon Occupational Safety and Health Division.

Lobbying. Amend registration and reporting guidelines to lobbyists and client/ employers they represent. Oregon Government Ethics Commission.

FACT BOX: CHARTER SCHOOLS

1. Governed by agreements between
School Districts and charter
schools.

2. The Oregon Department of
Education (ODE) lists 101 charter
schools operating in Oregon for
the 2009 – 2010 school year.

3. “Charters” – the written agreements
authorizing establishment of
public charter schools – are subject
to mandatory periodic renewal.

4. ODE reports that in October 2007,
11,592 students were enrolled in
public charter schools.

Sources: ODE website; ORS 338.065.

SUPREME COURT RULES ON ETHICS, LANDOWNER LIABILITY

State and federal courts shape policy by upholding or rejecting the constitutionality of statutes and by interpreting them. Here are some examples. Readers should consult their own attorneys before applying any of these cases to particular circumstances.

Vannatta et al v. OGEC, et al. Plaintiffs challenged the constitutionality of statutes restricting the receipt, offer, and solicitation of certain gifts or gifts of payment for entertainment purposes. The restrictions were part of the Legislature’s 2007 reform of the ethics code applicable to public servants. The Oregon Supreme Court analyzed each restriction in isolation from each of the others. It found that restrictions on the receipt of gifts were consistent with Article I, Section 8 (free expression) of the Oregon Constitution. In contrast, offering the same gift is constitutionally protected expression, according to the Court. The Court did not offer an opinion about the constitutionality of the third restriction – on solicitation of gifts – because the plaintiffs were not public officials who had themselves solicited any gift.

The net result of the case: lobbyists are constitutionally empowered to offer a gift or gift of payment for entertainment purposes to a public offi cial, even if that gift purports to be prohibited by ORS
244.025(2) and (3), but the public official cannot accept gifts that are prohibited by ORS 244.025(1) (gifts in excess of $50); ORS 244.025(4)(a) (payment of expenses for entertainment in any amount); or ORS 244.042(1) and (2) (honoraria in excess of $50).

Coleman v. Oregon Parks and Recreation Department, et al. Coleman paid
for a campsite at William M. Tugman State Park. He was injured when he rode off a bridge on a bike trail. He sued the State of Oregon. ORS 105.682(1) immunizes landowners from certain civil liabilities when they permit recreational users to enter their land. That immunity, however, is available only if the owner “makes no charge for permission to use the land[.]” ORS 105.688(2)(a). The majority held that the recreational immunity statute didn’t protect the State because the state had charged plaintiff a campsite fee. The three dissenting Justices concluded that “the legislature’s policy choice will be thwarted” by the majority’s interpretation of the statute. The dissent would have ruled that the State lost its immunity as to the campsite when it charged a camping fee, but not as to bike trails or other features of the park, all of which were open to bikers and hikers without any fee.

Connick v. Thompson. Federal law (Section1983) allows individuals to recover damages from public offi cials. In Connick, deputy district attorneys hid exculpatory evidence, thereby violating Thompson’s rights under the U.S. Constitution. A federal jury awarded Thompson $14 million in damages for the District Attorney’s failure to establish policies and procedures to avoid such violations. The District Attorney appealed that verdict to the United States Supreme Court. The District Attorney asserts that his subordinate’s misconduct was limited to a single instance and that one violation is an insufficient factual foundation for holding the violator’s employer liable under Section 1983. The U.S. Supreme Court will decide as soon as February 19, 2010 whether to accept the case.

BALLOTS TAKING SHAPE FOR PRIMARY, GENERAL ELECTIONS

The State’s electoral machinery is grinding out the shape of ballots Oregonians will cast in 2010 and 2012.

Rejected
IP 61: Amends Constitution: Requires voter approval of taxes and fees on motor vehicle use and motor vehicle fuel. Rejected by Secretary of State on advice from the Attorney General.

May 18, 2010 Primary Election
Number 402: Amends Constitution: Allows State To Issue Bonds To Match Voter Approved School District Bonds For School Capital Costs. Legislative referral/ HJR 13 (2009).

November 2, 2012 General Election
Initiative Number 1: Overrides voter-approved law barring use of dogs to hunt and pursue cougars for sport. The draft ballot title drew seven comments.

FACT BOX: PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS)

1. 116,715 Active Tier I/Tier II members on 12/31/08.

2. For all retirees from 1990-2008, the average annual retirement benefit equaled 55% of final average salary.

3. PERS retirees paid an estimated $110 million in state income tax in 2008.

4. Assuming OPERF grows by 8 percent annually, PERS’ Actuary projects that base employer contribution rates system-wide will rise above 23% of payroll by 2016 – and remain there at least through
2022. Lower investment returns would require higher rates.

5. Over the past five years, OPERF earned 4.55% on its regular account. Sources: PERS By The Numbers (2009); Report dated 1/29/2010 from Actuary to PERB; Oregon PERS Monthly Returns (Jan. 2010)

Sources: PERS By The Numbers (2009); Report dated 1/29/2010 from Actuary to PERB; Oregon PERS Monthly Returns (Jan. 2010)

Pete Shepherd, Editor Shareholder
Harrang Long Gary Rudnick is pleased to publish this edition of the firm’s Capitol Mall Dispatch. We hope that you enjoy learning about developments at the intersection of law and public policy.

We plan to make each edition interesting as well as informative. Our next issue will feature a brief essay by Lane Shetterly on a land use policy topic. Mr. Shetterly’s firm, Shetterly Irick & Ozias, recently entered into a strategic alliance with Harrang Long Gary Rudnick to enhance service to clients of each firm. Shetterly formerly served as a State Representative and as Director of the State Department of Land Conservation and Development.

Harrang Long Gary Rudnick P.C.
[email protected]
503-371-3330

2009 Oregon Employment Legislation Update

EMPLOYMENT ALERT

2009 OREGON EMPLOYMENT LEGISLATION UPDATE
At HARRANG LONG, our Labor and Employment Practice Group makes a point of identifying new legislation that may impact our clients and their businesses. The 2009 Oregon Legislature enacted many new labor and employment laws that affect Oregon employers. Unless otherwise specified, the effective date of new legislation is January 1, 2010.

We will soon be sending out registration information for breakfast meetings in Eugene and Portland to discuss these new laws. In the interim, if you have questions about how these new laws impact your business, please contact us and we will be happy to assist you.

Employee Rights and Protections

Religious Accommodation in the Workplace:
“Oregon Workplace Religious Freedom Act” (SB 786)
This new law requires employers to provide reasonable accommodation to employees for religious observance or practice, including wearing religious clothing, unless doing so would cause undue hardship to the employer. It also requires employers to allow employees to use vacation leave and other leave that is not restricted in its use for religious observance or practice.

BOLI plans to promulgate future regulations that will further define and explain employers’ obligations under this bill.

Americans with Disabilities Act Amendments:
Oregon Adopts Recent Federal ADA Amendments (SB 874)
This bill adopts the federal amendments to the Americans with Disabilities Act (ADAAA). For more information on the ADAAA, see the October 7, 2008 Employment Alert on our website //www.harrang.com/Newsroom/client_alerts.htm.

Domestic Violence Victims:
Reasonable Safety Accommodation and Non-Discrimination Against Victims of Domestic
Violence, Sexual Assault, or Stalking (SB 928)

Employers are now prohibited from refusing to hire, discharging, demoting, suspending, discriminating or retaliating against an otherwise qualified person or employee who is a victim of domestic violence, sexual assault or stalking. Employers must make “reasonable safety accommodation” for such persons, including transfer, reassignment, modified work schedules, unpaid leave, modification of the work area (such as the installation of locks) or the implementation of other safety procedures or adjustments. Prior to making the accommodation, the employer may require the employee to provide certification that he or she is a victim of domestic violence, sexual assault or stalking.

Oregon Military Family Leave Act of 2008:
Unpaid Leave for Military Spouse Before/During Deployment (HB 2744)
Effective upon passage on June 25, 2009

This new law requires employers with 25 or more employees to provide employees who are military spouses 14 days of unpaid leave, to be taken before the spouse’s deployment or when the spouse is on leave from deployment. For more information, see the July 21, 2009 Employment Alert on our website at //www.harrang.com/Newsroom/client_alerts.htm.

New Whistleblower Protections for Private Employees:
Prohibits Discrimination Against Whistleblowers (HB 3162)
This law prohibits a private employer from discriminating or retaliating against an employee who in good faith reports a violation of state or federal laws, rules or regulations. Aggrieved employees may file a complaint with BOLI or in civil court. Previously, these whistleblower protections only applied to public employment.

Protected Classes: Military Status
Prohibits Discrimination by Reason of “Military Status” (HB 3256)
Oregon law now includes “military status” in the list of protected classes in ORS 659A. The law makes an exception if the employer acts based on a bona fide occupational requirement reasonably necessary to the normal operation of the employer’s business, and the employer’s actions could not be avoided by making a reasonable accommodation of the person’s military status.

Other Miscellaneous Updates

Deletes Limit on Veteran’s Preference (HB 2510)
This legislation deletes the 15-year limit on a veteran’s use of preference for civil service positions.

Disciplinary Actions for Public Safety Officers (HB 2713)
This law makes current state statutes regarding police discipline applicable to public safety officers. It requires safeguards for investigations of public safety officers, including when interviews may take place and deadlines by which investigations must be completed. The Act and current statutes regarding discipline do not apply to public safety officers who are covered by collective bargaining agreements so long as the collective bargaining agreement provides for the procedures and safeguards provided by the Act and statutes.

Child Labor – Working Hours (HB 2826)
Previously, under Oregon law, minors under the age of 16 were only allowed to work between the hours of 7 a.m. and 6 p.m. This new law expands permissible work hours, allowing minors to work until 7 p.m., with an additional expansion until 9 p.m. between June 1 and Labor Day.

General Employment Law Updates

Prohibition on Cell Phone Use While Driving:
Amendments to Cell Phone Law (HB 2377)
This bill expands the prohibition on use of cell phones and text messaging devices to all drivers (not just those under 18). An exception excludes use by a person “operating a motor vehicle in the scope of the person’s employment if operation of the motor vehicle is necessary for the person’s job.” This should be viewed as a rather narrow exception. One of the most significant changes to existing law elevates cell phone usage while driving to a primary violation, allowing an officer to stop a person solely for being on the phone while driving. Previously, cell phone usage was a secondary violation and officers were required to have another primary reason to stop the driver.

For employers that already have policies prohibiting cell phone usage while driving for work purposes, now is a good time to remind employees of such policies. If you do not have a policy in place, we can assist you in drafting a policy appropriately tailored to your business operations.

“Employer Gag Bill” (SB 519)
This law effectively prohibits employers from holding mandatory meetings with employees to discuss religious or political matters, including the effect of unionization. It also provides an employee with a civil cause of action against an employer for violation of this law; the prevailing employee would be awarded treble damages, attorney fees and costs.

Increased Liability for Employers with Regard to Child Support Payments
Child Support Payments; Damages; Attorney’s Fees (SB 373)
ORS 25.372-.473 currently requires employers to withhold from wages any amounts specified in a child support order. Prior to SB 373, if an employer failed to withhold, withheld too much, or failed to send the money to the state, damages were limited to the amount withheld or which the employer failed to withhold, and a fine of $250 if the violation was willful or grossly negligent.

Effective January 1, 2010, a supported parent may now sue an employer for the amount the employer failed to withhold or pay, plus all damages resulting from the failure to withhold or pay. The employee obligated to pay the support may also sue the employer for all damages resulting from excess withholding, for all damages resulting from the employer’s failure to timely pay withheld amounts, and for any other damages suffered by the employee.

A successful plaintiff is also entitled to recover his/her attorney fees from the employer.

Increased Fees for Garnishing Wages (HB 3474)
This bill increases the fee an employer may withhold from wages for processing a garnishment from $1.00 per week to $2.00 per week for each week that wages are garnished.

Insurance: Coverage of Services by Marriage and Family Therapists (HB 2506)
This house bill requires insurers to cover services provided by marriage and family therapists if the plan already covers services provided by clinical social workers and nurse practitioners. Because many employer-provided plans currently exclude coverage for marriage counseling, this bill may result in new costs for employers.

Collection of Fees by BOLI (SB 60)
The Oregon Bureau of Labor and Industries (BOLI) has jurisdiction over wage claims and certain civil rights violations, which can result in judgments for wages or penalties owed to a complainant. Current law allows BOLI to refer an unpaid judgment against a respondent to the Department of Revenue or a private collection agency, but only permits recovery of collection fees charged to the respondent if a private collection agency is used. SB 60 amends ORS 652.390 to allow BOLI to recover from the respondent all collection fees incurred if BOLI refers collection to the Department of Revenue.

Eviction of Live-In Employees (HB 2962)
Current state law provides no clear procedure for the eviction employees who occupy a dwelling unit as a condition of employment. Section 1 of HB 2962 requires an employer to provide at least 24 hours’ written notice of the termination of employment prior to evicting a live-in employee and the employee’s dependents, unless a longer notice period is specified in a written employment contract. Section 2 of HB 2962 amends ORS 105.115 to make possession of the premises by the employee after expiration of the notice grounds for eviction. This bill does not, however, create a landlord/tenant relationship between the employer and employee.

Unemployment Compensation and Related Areas

Alternate Base Year Calculation (SB 462) (effective July 1, 2009)
This bill creates an alternate base year for the purposes of determining eligibility for unemployment insurance (UI) benefits for individuals who are not eligible for benefits under the current definition of “base year” in ORS 657.010(1). Under prior law, the base year was defined as the first four of the last five completed calendar quarters preceding the benefit year. The new law creates an alternative base year: the last four completed calendar quarters preceding the benefit year.

This bill is estimated to result in more than 6,000 additional claimants per year being eligible for benefits in the 2009-2011 biennium. By passing this bill, Oregon unlocked access to federal stimulus funds that will finance the measure.

Maximum Benefit Extension (HB 3140) (effective June 18, 2009)
House Bill 3140 extends the maximum amount of time in which qualified workers can receive Oregon Workshare unemployment compensation benefits from 26 weeks to 52 weeks. The Workshare program offers an alternative to layoffs by allowing employers to reduce an employee’s weekly hours of work while the employee receives a percentage of UI benefits equal to the percentage of the reduction in weekly hours of work.

Expanded Eligibility for Economically Distressed Workers (HB 3483) (effective July
28, 2009)

This bill allows workers who are eligible for unemployment, and who have been working at less than 110 percent of the state minimum wage during their entire base year, to remain eligible for UI benefits while receiving “economically distressed worker training” (as defined in the Act). Benefits may not be denied for refusing to accept work offered that is part-time or temporary and interferes with the training, if the work pays less than 110 percent of minimum wage.

Reopening Record of Appeals Hearing (HB 2202)
HB 2202 was passed to address a concern of conflict between state and federal law. To avoid loss of federal funds and potential federal unemployment taxes, the bill amends ORS 652.270 to allow the ALJ to reopen a hearing at the request of either party so long as (a) the party did not attend the hearing; (b) the non-appearance was beyond the control of the requesting party; and (c) the request is filed within 20 days after the issuance of the written decision.

Collective Bargaining

Retiree Medical Trusts, VEBAs, Health Reimbursement Arrangements (SB 821)
Effective upon passage on June 23, 2009
This law allows unions and public employers to agree to establish retiree medical trusts, voluntary employees’ beneficiary associations, health reimbursement agreements and other similar agreements regarding health care expenses.

Employee Rights Including Overtime in Donated Leave (HB 2298)
This law requires public employers that allow employees to donate paid leave to other employees that are members of the military (and have been activated for active duty) to include overtime (based on the average number of overtime hours work for the employee’s job class) in the “total compensation the employee would have received.” Because the donated leave plus the employee’s military salary may not exceed the “total compensation” the employee would have received in their civilian employment, inclusion of reasonably forecasted overtime hours in the “total compensation” allows such employees to receive a greater amount of donated leave.

Because military pay scales are often much lower than public employee salaries, members of the National Guard frequently experience financial hardships when called to active duty – this bill is designed to alleviate some of the hardship.

Collective Bargaining Public Employee Retirement System (PERS)

PERS Rollover Contributions (SB 399)
This bill allows an eligible member of PERS who participates in a deferred compensation plan to request, within 60 days of effective date of Act, that payment of all or part of deferred amount be paid to Public Employees Retirement Board for purpose of restoring forfeited creditable service, or acquiring retirement credit for probationary period of employment, or both. Previously, eligible PERS members could fill gaps in their PERS service by paying directly into the system. SB 399 permits such members to do so with pre-tax dollars from a deferred compensation plan or tax-sheltered annuity. However, this law does not become operative until September 1, 2011.

PERS Side Account Excess (HB 3401) (effective August 4, 2009)
This bill directs the PERS Board to seek a ruling from the IRS on whether the use of excess amounts in an employer’s side account established under ORS 238.229(2) to offset employer-paid contributions to the IAP would cause the PERS Plan to lose its tax qualified status under the Internal Revenue Code. If the IRS finds that practice acceptable, and the PERS Board determines that the employer’s side account exceeds what is necessary to fund the employer’s actuarial liabilities, then the employer can request the Board to apply the excess amounts to offset employer-paid contributions.

Reemployment of PERS Employees (SB 112) (effective June 18, 2009)
Senate Bill 112 allows members of PERS who have been retired for more than six months, and who elected to receive a lump sum payment or installment payments, to be reemployed by a public employer without repayment of a lump sum or installment amounts received by the member.

Notable Bills that Did Not Pass this Legislative Session:

Use of Accrued Vacation for OFLA Leave/Written Policy and Notice of Employee’s
Intent to Use Accrued Vacation (HB 2821)

In committee upon adjournment of Legislature
This bill would have amended ORS 659A.174 to prohibit a covered employer, subject to the terms of an agreement or collective bargaining agreement between the employer and employee, from requiring an employee to use accrued vacation time when taking family leave. Covered employers would have been required to provide employees with a policy regarding the procedures for taking family leave and for use of accrued vacation leave during a period of family leave. The bill would also have required employees to communicate their intent to use accrued vacation leave in conjunction with family leave.

Notice of Arbitration Agreement (HB 2903)
In committee upon adjournment of Legislature
This bill would have amended ORS 36.620 to shorten the time period by which an employer must notify an employee in writing that an arbitration agreement is required as a condition of employment. The bill would have required that employers provide this notice at least 72 hours prior to the first day of employment. However, because the bill did not pass, the law remains the same and employers are still required to provide this notice at least 2 weeks before the first day of employment.

Proposed Limit on Definition of “Supervisory Employees” (HB 2633)
In committee upon adjournment of Legislature
This law would have modified the definition of “supervisory employee” for purposes of PECBA, ORS 243.650, adding that a public employee who is prohibited from striking, “who merely assigns, transfers or directs the work of other employees but does not have the authority to impose economic discipline on those employees is not a supervisory employee.”

Omnibus Bill on Collective Bargaining (HB 2831)
Third reading failed on June 27, 2009
This bill would have modified the definition of “appropriate bargaining unit” to allow inclusion of temporary and seasonal employees; would have modified the definition of “supervisory employee” by providing that exercise of supervisory authority does not require the conclusion that an employee is a supervisory employee; would have prohibited a public employer from hiring permanent replacements for public employees engaging in a lawful strike; and would have allowed temporary replacements during a strike but would have required they be terminated when the union makes an unconditional offer on behalf of striking workers to return to work.

Labor and Employment Practice Group
HARRANG LONG GARY RUDNICK P.C.

* * *

Our firm’s Employment Alerts are intended to provide general information regarding recent changes and developments in the labor and employment area. These publications do not constitute legal advice, and the reader should consult legal counsel to determine how this information may apply to any specific situation.

2009 Federal Employment Legislation Update

EMPLOYMENT ALERT

2009 FEDERAL EMPLOYMENT LEGISLATION UPDATE
At HARRANG LONG, our Labor and Employment Practice Group makes a point of identifying new legislation that may affect our clients and their businesses. This alert describes selected changes in federal labor and employment laws enacted during 2009 that will impact Oregon employers.

We will soon be sending out registration information for breakfast meetings in Eugene and Portland to discuss these new laws. In the interim, if you have immediate questions about how these new laws might impact your business, please contact us and we will be happy to assist you.

“GINA” Update:
The Genetic Information Nondiscrimination Act is Now In Effect
The Genetic Information Nondiscrimination Act of 2008 (“GINA”), signed into law by President Bush on May 21, 2008, prohibits discrimination on the basis of genetic information with respect to health insurance and employment. Congress enacted GINA to address public concerns about the risk of losing access to health coverage or employment if insurers or employers possess an individual’s “genetic information.” Title II, which went into effect on November 21, 2009, prohibits genetic discrimination in employment.

What is “Genetic Information”?
GINA defines genetic information to include any information about the genetic testing of an individual or the individual’s family members, or the results of that testing. The definition is broad enough to include responses to family medical history inquiries. Genetic information does not include information about the sex or age of individuals or their family members, information that an individual currently has a disease or disorder or tests for alcohol or drug use.

Does GINA apply to my business?
Title II of GINA applies to all employers, both private and public, of 15 or more employees, including employment agencies, labor unions and joint labor-management training programs.

What practices are prohibited by GINA?
1. The use of genetic information in making decisions related to any terms, conditions or privileges of employment (such as hiring, firing, pay, promotion, layoff, and benefits).

2. Harassment of an applicant or employee because of his/her genetic information.

3. Retaliation against employees who have complained about genetic discrimination, filed a charge of discrimination or participated in an employment discrimination inquiry, investigation or lawsuit.

4. The intentional acquisition of genetic information about applicants, employees or their family members. This general prohibition is subject to certain exceptions. The acquisition of genetic information is not prohibited where it is:

▪ Inadvertently obtained (the so-called “water cooler” exception, such as where a coworker overhears an employee discussing his father’s illness);

▪ Received from an employee in support of a request for reasonable accommodation;

▪ Received as part of the certification process for FMLA leave; or

▪ Received in connection with a voluntary wellness program.

Confidentiality of Genetic Information
Employers subject to GINA that possess “genetic information” regarding an applicant or employee must treat it the same way as other medical information. Genetic information may not be disclosed to third parties, should be kept confidential and documents containing such information should be kept separate from other personnel information in a secure medical file. There are some exceptions to these confidentiality provisions which are described in detail on the EEOC’s website.

Remedies for Employer Violations of GINA
GINA provides the same remedies as Title VII of the Civil Rights Act of 1964. An applicant or employee who succeeds on a GINA claim may be awarded reinstatement, promotion or hiring, back pay, compensatory and punitive damages, and attorney’s fees and costs. The caps imposed on compensatory and punitive damages under Title VII also apply to GINA. Punitive damages are not available against public employers.

Further Guidance
The EEOC is developing proposed regulations for Title II of GINA. Employers should post the revised “EEO is the Law” poster which includes information about GINA. It is available without charge from the EEOC’s website (//www1.eeoc.gov/employers/poster.cfm).

FMLA Update:
New FMLA Regulations Effective January, 2009
The final version of the new Family and Medical Leave Act (FMLA) regulations went into effect on January 16, 2009. The final regulations interpret and implement two new military family leave entitlements for eligible family members, as well as update the regulations under the FMLA.

Our February 9, 2008 Employment Alert first addressed FMLA changes made by the National Defense Authorization Act, which amended the FMLA by adding the following two categories of unpaid leave for employees with family members serving in the military:

(1) Qualifying Exigency Leave: Eligible employees may take up to 12 weeks of FMLA leave to handle exigencies related to a family member’s active duty military service or call to active duty; and

(2) Covered Service Member Family Leave: Eligible employees may take up to 26 weeks of FMLA leave to care for a spouse, son, daughter, parent or next of kin who has a serious injury or illness incurred in the line of active duty. You can view our 2008 Employment Alert on this topic at
//www.harrang.com/Newsroom/client_alerts.htm.

While the Covered Service Member Family Leave provisions went into effect in 2008, the Qualifying Exigency Leave requirements became effective on January 16, 2009.

Under the new regulations, an eligible employee may take leave for one or more of the following “qualifying exigencies”: (1) short notice deployment, (2) military events and related activities, (3) childcare and school activities, (4) financial and legal arrangements, (5) counseling, (6) rest and recuperations, (7) post-deployment activities and (8) additional activities to address other events that arise out of the covered service member’s active duty or call to active duty status. The DOL has also provided a new optional form that employers may use for employees to self-certify that they have a qualifying exigency requiring them to take leave.

The new regulations clarify several points related to Covered Service Member Family Leave. The regulations define “next of kin” as the nearest blood relative other than the covered service member’s spouse, parent, son or daughter in the following order of priority: blood relatives who have been granted legal custody of the covered service member by court decree or statutory provisions, brothers and sisters, grandparents, aunts and uncles and first cousins, unless the covered service member has specifically designated in writing another blood relative as his/her nearest blood relative for purposes of covered service member leave.

Notably, the new regulations provide that eligible employees can take more than one 26-week leave if the leave is to care for a different covered service member or if the same covered service member has a subsequent injury or illness. However, an eligible employee cannot take more than 26 weeks of leave in any single 12-month period. The new regulations also include many updates and changes to the prior FMLA regulations. Highlights of the changes include:

Releases of FMLA Claims: The final regulations settle a dispute among courts regarding the employees’ ability to waive rights under the FMLA, stating that employees may voluntarily release their past FMLA claims without court or DOL approval. As a result, employers can safely include releases of past FMLA claims in severance and settlement agreements.

Employer Notice Obligations: The regulations clarify and increase employer notice obligations in order to better inform employees regarding their FMLA rights and responsibilities. For example, the new regulations require employers to provide employees with a general notice about the FMLA upon hire (which can be done through a handbook), an eligibility notice, a rights and responsibilities notice and a designation notice.

Employee Notice Requirements: Under the new regulations, an employee needing FMLA leave must follow the employer’s usual and customary call-in procedures for reporting an absence, unless there are unusual circumstances. This is a change from the prior regulations, which allowed some employees to provide notice to an employer of the need for FMLA leave up to two business days after an absence, even if they could have provided notice more quickly.

New Medical Certification Forms: The DOL has created several new medical certification forms, one for use in considering an employee’s own serious health condition, another for use when an employee requests leave to care for a family member with a serious health condition, and a new medical certification form for use in obtaining certification of covered service member leave.

Notification of Certification Deficiencies: The final regulations require employers to notify employees in writing if the employer determines that a medical certification is incomplete or insufficient. The employer must indicate what additional information is necessary and give the employee seven days to cure the deficiency. If an employee does not cure the deficiency, the employer may deny FMLA leave.

Clarification and Authentication of Medical Certification Forms: An employer may contact an employee’s health care provider for purposes of clarification and/or authentication of the medical certification after the employer has given the employee an opportunity to cure any deficiencies. An employer must use a health care provider, human resources professional, leave administrator or management official to make such contact and may not allow the employee’s direct supervisor to contact the health care provider. Employers may not ask health care providers for additional information beyond that required by the certification form. In addition, where the health care provider is covered by HIPAA, the employer must obtain a HIPAA authorization from the employee. However, if the employee refuses to provide the employer with authorization and does not otherwise clarify the certification, the employer may deny the FMLA leave if the certification form is unclear.

Prior Employment Counts for Eligibility: Employers must now count an employee’s non-consecutive prior service with the employer unless the break in service was for seven years or more.

Light Duty: Under the new regulations, time spent performing light duty work does not count against an employee’s FMLA leave entitlement. Also, the employee’s right to job restoration is on hold during the period of time the employee performs light duty. Further, if an employee is voluntarily performing a light duty assignment, the employee is not on FMLA leave. Note, however, that because most employees on FMLA leave concurrently take Oregon Family Leave (OFLA), and OFLA rules treat “light duty” more favorably for employees, these FMLA regulations may not necessarily apply to every light duty situation. You should contact legal counsel if you have questions about how FMLA and OFLA would apply in a specific light duty situation, as the
employer must apply the regulation that is most beneficial to the employee. Given the many changes under the new FMLA regulations, employers should take a close look at their FMLA policies and procedures to ensure compliance with the provisions of the new FMLA regulations and review other policies (e.g. call-in; attendance) that may be implicated by these changes. Employers should also review their FMLA forms to ensure that they comply with the new notice provisions.

ADA Update:
Final ADAAA Regulations Expected Mid-2010
The ADA Amendments Act (ADAAA) Notice of Proposed Rulemaking (NPRM) was published in the Federal Register on September 23, 2009 for a 60-day notice and comment period.

To view the NPRM, see //edocket.access.gpo.gov/2009/E9-22840.htm, and for more information, go to //www.eeoc.gov/ada/amendments_notice.html. After the comment period expired on November 23, 2009, the EEOC began the process of finalizing and publishing the revised regulations and interpretive guidance. The EEOC received more than 600 comments in response to its proposed regulations. According to the latest regulatory agenda, the EEOC anticipates the review will be complete – and final ADAAA regulations will be implemented – in July, 2010.

The regulations interpret the requirements of the ADAAA, which Congress passed in late 2008 to make it easier for employees and applicants who allege disability discrimination to establish that they are disabled as defined by the Americans with Disabilities Act (ADA).

The most significant changes in the proposed regulations include:

• Broadening of the term “disability”: The proposed regulations state that “disability” should be interpreted broadly and that the focus of an ADA case should be on whether discrimination occurred, not whether the individual is in fact “disabled” under the statute.

Specific types of physical and mental impairments would “consistently” qualify as disabilities under the ADA, such as deafness, blindness, missing limbs, cancer, cerebral palsy, epilepsy, HIV/AIDS, and severe mental disorders such as bipolar disorder or schizophrenia. Prior law and regulations required an individualized assessment of the impact of the impairment on the individual on a case by case basis.

• “Major life activities”: The proposed regulations provide two non-exhaustive lists of “major life activities.” The first list of activities includes caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others and working. The second list includes the major bodily functions listed in the ADAAA (functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions), and adds special sense organs, and skin, genitourinary, cardiovascular, hemic, lymphatic and musculoskeletal.

• Mitigating measures: The ameliorate effects of mitigating measures (other than ordinary eyeglasses or contact lenses) may not be considered in determining whether a person is “substantially limited in a major life activity.” Thus, for example, the person with diabetes whose condition is completely controlled by insulin or the person with epilepsy whose condition is completely controlled by seizure medication will be considered disabled if the condition, if untreated, would substantially limit a major life activity. Similarly, an individual who can hear normally with a hearing aid would also be considered disabled.

• Episodic Illnesses: Proposed regulations state that an impairment that is episodic or in remission is a “disability” if it would substantially limit a major life activity when active.

• Reasonable Accommodation: Proposed regulations clarify that both the positive and negative effects of mitigating measures can be considered when evaluating whether a reasonable accommodation is needed. If a disabled person uses a mitigating measure which eliminates the need for reasonable accommodation, then an employer will have no obligation to provide one.

• Major Life Activity of Working: Proposed regulations relax the standard for when an individual is substantially limited in the major life activity of “working.” Prior regulations used the concept of “a class or broad range of jobs.” Under the proposed regulations, an impairment substantially limits the major life activity of working when it substantially limits an individual’s ability to perform, or to meet the qualifications for a “type of work” (e.g., commercial truck driving, assembly line jobs, clerical jobs or law enforcement jobs).

• Regarded as Disabled: The proposed regulations also make a major change in who is disabled because they are “regarded as disabled.” It is no longer required that the employer perceive the individual to be substantially limited in a major life activity. Rather, it is enough if he or she is subject to an adverse employment action (e.g., failure to hire or termination) based on the employer’s belief that the employee suffers from an impairment that is not transitory (lasting less than 6 months) and minor.

Good news for employers – individuals covered only because they are “regarded as disabled” are not entitled to reasonable accommodation.

Employers’ Bottom Line:
Like the ADAAA, proposed regulations emphasize that the determination of whether an individual is disabled should not be the primary focus of ADA cases. Instead, the focus should be on whether prohibited discrimination has occurred. Thus, from a practical standpoint, employers in most situations will be better able to defend an ADA lawsuit by showing that they made a good faith effort to accommodate the employee, rather than by challenging the employee’s disability.

COBRA Update:
COBRA Premium Reduction Extended

The American Recovery and Reinvestment Act of 2009 as amended on December 19, 2009 provides for premium reductions for health benefits under COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the employer through a tax credit. To qualify, individuals must be involuntarily terminated from employment. The 2009 amendment extended the premium reduction eligibility period for two months – the benefit now applies to terminations that occur between September 1, 2008 and February 28, 2010. The
amendment also increased the maximum period for receiving the subsidy for an additional two months – from 9 to 15 months.

Other Updates for 2009:
Lilly Ledbetter Pay Act of 2009

On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act into law. This legislation will have a significant effect on pay discrimination claims based on all protected categories, including race, gender, age, ethnicity, disability, national origin and religion.

For more information on the Act, see our March 19, 2009 Employment Alert at //www.harrang.com/Newsroom/client_alerts.htm.

Labor and Employment Practice Group
HARRANG LONG GARY RUDNICK P.C.

* * *

Our firm’s Employment Alerts are intended to provide general information regarding recent changes and developments in the labor and employment area. These publications do not constitute legal advice, and the reader should consult legal counsel to determine how this information may apply to any specific situation.

John Witherspoon named “Rising Star”

John Witherspoon was named a “Rising Star” in the winter issue of Washington Law & PoliticsWashington Law and Politicspolls “Washington Super Lawyers” to identify the top up-and-coming lawyers in the state. The program honors those who are 40 years old or younger or who have been in practice for 10 years or less. John joined HLGR in November as an associate in our Business Department, he previously practiced in Spokane, WA.

Dave and Lynn Frohnmayer Honored for Years of Service

Dave Frohnmayer, Of Counsel, with Harrang Long Gary Rudnick P.C., has recently received multiple awards for his service to the community and the state of Oregon. Dave was honored at the 2009 Governors’ Gold Awards Dinner as a Governors’ Gold Award recipient. The recipients of the 2009 Governors’ Gold Awards represented a “sesquicentennial snapshot” of Oregon ingenuity and industry. The Architecture Foundation of Oregon (AFO) has also celebrated Dave’s service as they named him the AFO’s 2009 Honored Citizen. Dave and his wife, Lynn, were both honored for scientific leadership and innovation in Oregon by the Medical Research Foundation of Oregon (MRF). They received the MRF’s Mentor Award for their commitment to advancing knowledge of Fanconi anemia, for fostering collaboration between clinicians and basic researchers in the search for a cure and for providing support for families affected by the disease.

Five HLGR Attorneys Named in 2009 Super Lawyers List

We are proud to announce that Bill GarySusan MarmadukeFrank MoscatoJim Mountain, and Arden Olson have been selected as Super Lawyers in Oregon Super Lawyers magazine. The Super Lawyers selection is based on a statewide nomination process, review of resumes and peer evaluation by practice area.

New Health Security Breach Notification Rules

NEW HEALTH SECURITY BREACH NOTIFICATION RULES
Interim final rules implementing security breach notification requirements for personal health
data released by the Department of Health and Human Services (HHS) create new compliance
obligations. The new HHS rule became effective on September 23, 2009.

The HHS breach notification rule governs security breaches involving information maintained by
HIPAA-covered entities or business associates of HIPAA-covered entities. Business associates,
in particular, will want to familiarize themselves with the new requirements. The HHS rule
requires notification in the event of a breach involving unsecured data. The rule requires notice
to affected individuals within 60 calendar days following discovery of the breach and, in the
event that more than 500 individuals are affected, notice to the media.

Many entities that use or maintain personal health information have longstanding security
measures in place in order to comply with the HIPAA security rule. However, data that is
secured in accordance with the HIPAA security rule still may be breached in a manner that
would trigger the notification obligations required under the new rule. To the extent that the
HIPAA security rule and the HIPAA breach notification rule have some overlap, organizations
subject to each will need to undertake an individual analysis to ensure they comply with both.

The new rules suggest the ongoing importance of monitoring legal and regulatory developments
in this area to help ensure that compliance and risk-management procedures are current and
can be implemented in a timely manner. The rules, coupled with continuing increased privacy
regulations, emphasize the value of creating written incident-response policies to help
coordinate responses. HHS guidance and commentary make clear the value to all healthcare
businesses in planning for these issues as part of their compliance programs.

It appears likely that all organizations that use health-related data can expect increased
emphasis on privacy and data protection in their contracts and should be prepared accordingly.
As a practical matter, coupled with other recent changes to HIPAA, many organizations,
especially business associates, may choose to review their existing policies and compliance
programs as well as their risk management strategies for handling health-related data.

Harrang Long Gary Rudnick P.C.

Our firm’s Health Law Alerts are intended to provide general information regarding recent changes and developments in the health law area. These publications do not constitute legal advice, and the reader should consult legal counsel to determine how this information may apply to any specific situation.

Dave Frohnmayer Joins Harrang Long Gary Rudnick P.C.

Dave Frohnmayer, former University of Oregon President, joined Harrang Long Gary Rudnick P.C. as “of counsel” on September 15, 2009. At Harrang Long, Frohnmayer reunites with several colleagues from his three terms as Oregon Attorney General. His prior public service also includes three terms in the Oregon House of Representatives, legal adviser to the UO president and dean of the UO law school. Read the full press release below:

Dave Frohnmayer Joins Harrang Long

We are very pleased to announce that Dave Frohnmayer, former University of Oregon President, has become “of counsel” to Harrang Long. Frohnmayer retired as president June 30, 2009 after serving 15 years and raising in excess of $1 billion for the institution. He has rejoined the faculty and presently is on sabbatical leave.

In his “of counsel” role with the law firm, Frohnmayer will accept limited and select engagements in legal matters, public policy, leadership, organizational development and strategic consultation. “I have worked with many of the firm’s attorneys for decades in a wide variety of contexts,” Frohnmayer said. “I count them among the best I have ever known in the nation.”

At Harrang Long, Frohnmayer will reunite with several colleagues from his three terms (1981-1991) as Oregon Attorney General. His prior public service also includes three terms in the Oregon House of Representatives, legal adviser to the UO president and dean of the UO law school.“Dave Frohnmayer is a natural fit with our firm,” said firm president Jens Schmidt. “His constitutional scholarship, his knowledge of government, his extraordinary advocacy skills which produced numerous successful arguments in the United States Supreme Court, and his impressive leadership counseling will certainly benefit our clients and our colleagues.”

Frohnmayer, designated UO President Emeritus by the Oregon State Board of Higher Education in July 2009, will continue to teach undergraduates in the Clark Honors College at the University of Oregon during the winter and spring terms.

Nothing in this communication creates or is intended to create an attorney-client relationship with you, constitutes the provision of legal advice, or creates any legal duty to you. If you are seeking legal advice, you should first contact a member of the Closely Held Business Team with the understanding that any attorney-client relationship would be subsequently established by a specific written agreement with Harrang Long Gary Rudnick P.C. To maintain confidentiality, you should not forward any unsolicited information you deem to be confidential until after an attorney-client relationship has been established.

Article Published by Pete Shepherd in Oregon Law Review

The framers of Oregon’s constitution decided that our judges would be elected in direct popular elections. One hundred fifty-two years and many failed attempts to reverse that decision later, we’re still electing them. Why did the framers choose to elect instead of appoint judges? What light does a sesquicentennial perspective on history of judicial elections in Oregon shed on improvements that should be made in the election of judges? These are the key questions Pete Shepherd addresses in One Hundred Fifty Years of Electing Judges in Oregon: Will There be Fifty More?, an article published this month by the Oregon Law Review.