Florida Employment Law Blog : Florida Employment Lawyer & Attorney : Epstein Becker Green Law Firm : Immigration, Discrimination, Labor, FLSA : Serving Miami, Fort Lauderdale, Florida

Just yesterday the U.S. Department of Labor released a Fact Sheet explaining the March, 2010 amendment to the Fair Labor Standards Act  that requires employers to provide breaks for nursing mothers.  The DOL's guidance is helpful because I have had several clients ask me about this law in recent months.  Some states already had laws like this, but Florida was not one of them.

The law requires employers to provide "reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child's birth each time such employee has need to express the milk."  Employers must provide the breaks "as frequently as needed", and must give the employee a private place, other than a bathroom, to take the breaks.  The breaks need to be of "reasonable" length.  The employer does not have to pay the employee for the break time, unless the employer already provides compensated breaks, and the employee uses one of those breaks to express breast milk.

A couple of interesting points:  (1) the law applies only to non-exempt employees, and not to exempt employees; and, (2) employers with under 50 employees are not subject to the law "if compliance with the provision would impose an undue hardship."

This amendment will probably not lead to much litigation, but employers need to be aware that it is out there. 

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My partner Richard Tuschman has blogged extensively on this site about the unusually high number of Fair Labor Standards Act lawsuits Florida employers face.  The state leads the nation in these suits.  Clients often ask why that is so, and in response I usually give credit to the enterprising plaintiff's bar here, especially in South Florida.  Disgruntled ex-employees often consult with plaintiff's employment lawyers about bringing some type of wrongful termination suit, but the lawyers often end up advising that the clients file FLSA overtime suits instead, because the lawyers know that employers often settle these cases early to avoid mounting legal fees. 

Of course, that is not the only way plaintiff's employment lawyers get FLSA cases.  Some rely upon their contacts within the bar and local community to investigate and build cases against large employers.  Because these cases can be filed as "collective actions", with numerous plaintiffs in one case, large employers are especially vulnerable to these suits.

A recent case out of a federal court in Minnesota illustrates the lengths that plaintiff's employment attorneys will go to build their cases, and the trouble they can get into by going too far.  The plaintiff's law firm at issue there, Halunen and Associates, sued Target Corporation for allegedly misclassifying some of its executives as exempt.   One of the named plaintiffs, Linda Gifford, had come to the law firm with complaints of employment discrimination and retaliation, but the lawyers thought that an FLSA claim had more merit. 

The lawyers investigated the claim for several months before bringing suit.  During that investigatory period, the firm was approached by another employee of the same company, this time an executive that the Court refers to as "Jane Doe".  Doe worked in a sensitive position with the company, and was privy to confidential and attorney-client privileged information.  Like Gifford, Doe came to the firm with questions related to the potential termination of her employment.  The firm, however, was also interested in Doe's knowledge of the issues relating to the potential FLSA suit it was investigating, and obtained  information from Doe to use to support that suit.

After the firm filed the FLSA suit, the company got wind of the conversations between the firm and Doe about the FLSA issues, and moved to disqualify the firm from representing the FLSA plaintiffs.  The Court granted the motion because the firm had "pushed ethical boundaries when it chose to represent Doe while simultaneously investigating" the FLSA suit.  The Court reasoned that Doe had disclosed confidential and attorney-client privileged information to the firm, and that allowing the firm to continue litigating the case "potentially undermines public confidence in the legal profession."

I, of course, have no information about this case other than what is contained in the Court's Order.  But, I think the lesson here for employers (and their attorneys) is to think long and hard about how the plaintiff's employment firms they are litigating against obtained the case in the first place.  If you do a little bit of digging, you might learn that the plaintiff's firm knows a lot more about your operation than you think, or than they should. 

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When settling employment-related lawsuits, employers want peace as quickly, inexpensively, and painlessly as possible. This usually means the following:  (1) employers want to resolve the case as quickly as possible, incurring a minimum of defense fees; (2) they want to settle for as little as possible, and typically do not care how the settlement is divided between plaintiff and his counsel; (3) if the settlement involves a large sum of money, employers often want to pay in installments over time; (4) employers want to continue to deny liability, and avoid any feature of the settlement that could be construed as an admission of liability; and (5) employers want to ensure that the settlement is confidential, and that the plaintiff is not free to encourage other employees or formers to sue. 

The settlement of FLSA lawsuits is no different in these respects. However, Judge Merryday’s Dees opinion runs counter to several items on the employer’s settlement wish list. 

First, Dees addresses the issue of attorney’s fees in the following way: If the parties reach agreement on the plaintiff’s recovery before the plaintiff’s attorney’s fees are considered, then the court will typically approve the settlement without separately considering the fee to be paid to the plaintiff’s counsel.  Otherwise, the settlement may reflect a conflict of interest between the plaintiff and his counsel, and the court will determine the plaintiff’s attorney’s reasonable fee using a lodestar approach. 

But in practice, reaching agreement on the plaintiff’s recovery, without also considering the plaintiff’s attorney’s fee, is difficult. Employers’ representatives typically have authority to settle the entire case for a given number. From the employer’s perspective, reaching agreement on the plaintiff’s recovery, without considering the plaintiff’s fees, leaves too much uncertainty; if the fees are too high, then the settlement is unacceptable. The alternative - litigating the attorney’s fee issue separately - is time-consuming and expensive. Thus, in most FLSA cases (in my experience, at least), the parties negotiate the plaintiff’s recovery and the fees at the same time, and it is up to the plaintiff’s attorney to justify his fees under a lodestar approach if the court questions the fee portion. But Dees suggests that such an approach is likely to be tainted by a conflict of interest between the plaintiff and his attorney, and that judicial scrutiny of the plaintiff’s fee award will be appropriate. Judicial scrutiny generally means delay, the potential for additional litigation, and increased fees on both sides. 

For example, in Shannon v. Saab Training USA, LLC, Case No. 6:08-cv-803-Orl-19DAB (M.D. Fla. June 22, 2009), the magistrate judge concluded that the attorney’s fee provision in an FLSA settlement was too high and recommended that the district court revise the settlement agreement and reallocate the total settlement number, so as to provide more to the plaintiffs and less to their counsel. Judge Fawsett concluded that the court did not have the power to rewrite the settlement agreement. Therefore, Judge Fawsett rejected the settlement agreement. The parties were effectively forced to restructure their settlement and submit it for approval. Judge Conway issued a similar order in Rodriguez v. Fuji Sushi, Inc., No. 6:08-cv-1869-Orl-22KRS (M.D. Fla. May 22, 2009). 

The parties may attempt to avoid judicial scrutiny in cases involving no compromise, i.e. where the plaintiff is paid his entire claim and relinquishes nothing else of value. In such a case, Judge Merryday writes in Dees that “the district court should approve the settlement and dismiss the case (if the employer has paid) or enter judgment for the employee (if the employer has not paid).” But even here, the employer may be faced with a choice between two undesirable options: pay the plaintiff in full before the settlement is approved, or have judgment entered against the employer. The first option may be undesirable because the employer may prefer to pay the plaintiff and his counsel in installments over time.  In addition, employers and their counsel generally are wary of paying settlement proceeds before court approval, even if court approval appears likely. The other option, a judgment, is something most employers seek to avoid because it can be viewed as an admission or judicial finding of liability in future cases. 

Judge Merryday’s rejection of confidentiality provisions in FLSA settlements, as well as filings under seal, and in camera inspection of settlement agreements, is also unfortunate from the employer’s perspective, and may actually serve to discourage settlements. As Judge Merryday recognizes in Dees, “the employer worries that compromise with an employee who has vindicated a valuable FLSA right will inform and encourage other employees, who will vindicate their FLSA rights (or who will wrongly, but expensively for the employer, conclude that additional wages are due).” Of course, there is already a vehicle by which a plaintiff can inform and encourage other employees to vindicate their FLSA rights: a collective action. If a collective action is inappropriate, it is likely because the plaintiff’s claim is dubious or unique. Employers who are required to make their settlements of such FLSA claims a matter of public record may choose to litigate rather than settle. Employers generally believe, with good reason, that settling lawsuits in the public record is likely to make them a target for future lawsuits.

The Dees opinion also leaves some questions unanswered. For example, what happens if the judge finds that other factors weigh in favor of a rejection of a compromise settlement? In Dees, Judge Merryday states that such factors include:

the presence of other employees situated similarly to the claimant, a likelihood that the claimant’s circumstance will recur, a history of FLSA non-compliance by the same employer or others in the same industry or geographic region, or the requirement for a mature record and pointed determination of the governing factual or legal issue to further the development of the law either in general or in an industry or a workplace.

If the court determines that one or more of these factors are present, will the court reject the proposed settlement and require the parties to litigate the case? Will the court certify the case as a collective action even if the parties have not requested certification, so as to afford potential relief to similarly situated employees? I have never heard of a court taking either of these actions. (If you have, please let me know). But if courts follow Judge Merryday’s opinion in Dees, we may see such a case in the near future. And in that event, the settlement of FLSA cases will have become substantially more difficult than they already are. 

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In Dees v. Hydradry, Case No. 8:09-cv-1405-T-23TBM (M.D. Fla., April 19, 2010), U.S. District Judge Steven Merryday issued a 29 page opinion that addresses the key issues pertaining to the settlement of FLSA cases in the Eleventh Circuit. The opinion is remarkable not only for its length and scholarly tone, but because, if followed by other district courts, it could make settlement of FLSA cases much more difficult in the Eleventh Circuit.

In this first of two posts, I summarize the Dees decision. In the second post, I will offer some thoughts on the impact Dees may have in FLSA cases in the Eleventh Circuit, and identify some questions that Dees leaves unanswered.

(Unwanted) Judicial Scrutiny

Judge Merryday issued his Dees decision four months after the parties filed a one paragraph Joint Stipulation of Dismissal with Prejudice. The parties represented in their stipulation that

The Defendant has agreed to pay Plaintiff for all overtime owed in full, without compromise. ($550 in Actual Damages, $550 in Liquidated Damages). Defendant agreed to separately pay Plaintiff attorney's fees and costs of $2,900 ($1,900 in attorney's fees; $1,000 in costs).  As such, no judicial scrutiny is needed. See Mackenzie v. Kindred Hosps. East, LLC, 276 F.Supp 2d. 1211, 1217 (MD.Fla. 2003).”

But judicial scrutiny is exactly what the parties got. Judge Merryday begins his opinion by noting that although the FLSA prohibits agreements that curtail an employee’s FLSA rights, the FLSA is silent as to whether an employee can compromise a claim for unpaid wages. Reviewing the Supreme Court’s decisions in Brooklyn Savings Bank v. O'Neil, 324 U.S. 697 (1945) and D.A. Schulte v. Gangi, 328 U.S. 108, 114 (1946), Judge Merryday concludes that these decisions, “[a]lthough prohibiting purely private compromise …. leave unanswered whether an employee may compromise a claim with supervision by the district court.”

That question was answered by the Eleventh Circuit in Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). As noted by Judge Merryday:

The Eleventh Circuit held that the FLSA permits an employee only two avenues for compromising an FLSA claim. First, an employee may accept a compromise supervised by the Department of Labor. By accepting the compromise, the employee waives the right to sue for the unpaid wages. Second, if an employee sues for back wages under the FLSA, the parties may present a proposed compromise to the district court, which “may enter a stipulated judgment after scrutinizing the settlement for fairness…. [A]n employee may compromise a claim if the district court determines that the compromise “is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”

Judge Merryday endorses the reasoning of Lynn’s Food Stores by opining that “leaving an FLSA settlement to wholly private resolution conduces inevitably to mischief”: 

An employer who pays less than the minimum wage or who pays no overtime has no incremental incentive to comply voluntarily with the FLSA, if, after an employee complains, the employer privately compromises the claim for a discount -- an amount less than the full amount owed under the FLSA (plus, with savvy negotiation, a confidentiality agreement to preclude the spread to other employees of information about the FLSA). If approval is required, the discount might become unavailable and the undiscounted principal owed the employee might increase (for example, as a result of liquidated damages or a more refined damage computation), both of which unhappy prospects conduce to voluntary compliance by the employer. The Eleventh Circuit in Lynn's Food and perforce this district court proceed on the logical and salutary premise that the FLSA, a statute famously designed to preempt in certain particulars the possibility of private agreement, remains immune to the unsupervised intrusion of a private agreement.

Absent DOL or court approval, Judge Merryday notes, the release of a compromised FLSA claim remains unenforceable. The employer remains liable for the unpaid wages, and the employee may sue to recover any wages (or liquidated damages) compromised by the parties’ private agreement.

What does a Compromise Mean?

What does it mean to say an FLSA claim has been compromised? In Mackenzie, 276 F.Supp 2d. at 1211, the employer made an offer of judgment for full relief. After determining that a collective action was inappropriate, the magistrate judge determined that the offer fully compensated the plaintiff on his FLSA claim, and therefore recommended entry of judgment in favor of the employee for the amount of the employer's offer of judgment. 

Judge Merryday was the district judge in Mackenzie, and he adopted the magistrate’s recommendation. But in Dees he notes that if the parties' agreement includes any additional term – “such as the forbearance of a valuable right of the employee, including perhaps one of the employee's FLSA rights, or the exchange of another valuable consideration of any kind” – the claim has been compromised and MacKenzie is inapplicable:

To the extent that the employee receives a full wage but relinquishes something else of value, the agreement (even if exhibited to the court as a stipulation for “full compensation” or an offer of judgment) involves a “compromise,” and Lynn's Food requires judicial approval of the compromise.

Scrutinizing a Settlement for Fairness

Judge Merryday then analyzes how a court should scrutinize a settlement for fairness. First, “the court should consider whether the compromise is fair and reasonable to the employee (factors ‘internal’ to the compromise).” Next, “the court should inquire whether the compromise otherwise impermissibly frustrates implementation of the FLSA (factors ‘external’ to the compromise).” Only if both factors are met should the court approve the settlement.

With respect to “internal” factors, Judge Merryday focuses on four issues. First, the district court must examine the nature of the dispute, and determine whether the employer is “extract[ing] a disproportionate discount on FLSA wages in exchange for an attenuated defense to payment.” 

Second, the court must ensure that the parties’ settlement agreement does not contain a confidentiality provision because, according to Judge Merryday, such provisions frustrate the purposes of the FLSA, by:  (1) empowering an employer to retaliate against an employee for exercising FLSA rights; (2) effecting a judicial confiscation of the employee's right to be free from retaliation for asserting FLSA rights; and, (3) transferring to the wronged employee a duty to pay his fellow employees for the FLSA wages unlawfully withheld by the employer.

Third, the court must ensure that the employee is not waiving FLSA rights prospectively.  For example, the employee may not stipulate that he is an exempt employee.

Fourth, the court must “review . . . the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement.” Judge Merryday quotes with approval Judge Presnell’s opinion in Bonetti v. Embarq Management Co., __ F. Supp. 2d __, 2009 WL 2371407 (M.D. Fla. Aug. 4, 2009):

[T]he best way to insure that no conflict has tainted the settlement is for the parties to reach agreement as to the plaintiff's recovery before the fees of the plaintiff's counsel are considered. If these matters are addressed independently and seriatim, there is no reason to assume that the lawyer's fee has influenced the reasonableness of the plaintiff's settlement.

In sum, if the parties submit a proposed FLSA settlement that (1) constitutes a compromise of the plaintiff's claims; (2) makes full and adequate disclosure of the terms of settlement, including the factors and reasons considered in reaching same and justifying the compromise of the plaintiff's claims; and (3) represents that the plaintiff's attorneys' fee was agreed upon separately and without regard to the amount paid to the plaintiff, then, unless the settlement does not appear reasonable on its face or there is reason to believe that the plaintiff's recovery was adversely affected by the amount of fees paid to his attorney, the Court will approve the settlement without separately considering the reasonableness of the fee to be paid to plaintiff's counsel. However, if the parties can only agree as to the amount to be paid to the plaintiff, the Court will continue the practice of determining a reasonable fee using the lodestar approach.

With respect to external factors, Judge Merryday lists several factors that may militate in favor of rejecting a proposed compromise, including:

[T]he presence of other employees situated similarly to the claimant, a likelihood that the claimant's circumstance will recur, a history of FLSA non-compliance by the same employer or others in the same industry or geographic region, or the requirement for a mature record and a pointed determination of the governing factual or legal issue to further the development of the law either in general or in an industry or in a workplace.

Filing Under Seal, In Camera Inspections, and Fairness Hearings

Judge Merryday then addresses the practices of filing settlements under seal, or having the court review them in camera, or having fairness hearings that do not include the admission of the agreement into the record. Judge Merryday concludes that all these practices are inimical to the public’s right of access to a judicial proceeding, and also “thwart[] Congress's intent both to advance employees' awareness of their FLSA rights and to ensure pervasive implementation of the FLSA in the workplace.” Thus, concludes Judge Merryday, “the parties must file the settlement agreement in the public docket.”

Rejection of Stipulation of Dismissal

Turning finally to the stipulation of dismissal filed by the parties in Dees, Judge Merryday rejects the stipulation and orders the parties to request approval of their settlement by : (1) filing their settlement; (2) describing "the bona fide dispute or disputes resolved by the compromise and confirm[ing] that the filed agreement includes every term and condition of the parties' resolution (in other words, confirm the absence of any ‘side deal’)”; and (3) demonstrating the reasonableness of the proposed attorney's fee using the lodestar approach, or representing that the parties agreed to the plaintiff's attorney's fee separately and without regard to the amount paid to settle the plaintiff's FLSA claim.

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An employee claiming whistleblower protection under the Sarbanes-Oxley Act must have actually believed that his company’s conduct was illegal in order to state a claim under the Act, according to a recent decision by the Eleventh Circuit Court of Appeals, Gale v. U.S. Department of Labor, Case No. 08-14232 (11^th Cir., June 25, 2010).

The case arose when Michael Gale was terminated from his employment at World Financial Group (“WFG”). Gale filed a whistleblower complaint with the Occupational Safety and Health Administration, which enforces the SOX whistleblower provisions. Gale alleged that he was terminated because he opposed decisions made by company officers relating to waste and misuse of corporate funds, and because he raised concerns regarding the alleged violation of SEC rules and regulations. 

Under SOX, a publicly traded company and its officers are prohibited from discharging an employee for providing information to a supervisory authority about conduct that the employee “reasonably believes” constitutes a violation of federal laws against mail fraud, wire fraud, bank fraud, securities fraud, any SEC rule or regulation, or any provision of federal law relating to fraud against shareholders. 18 U.S.C. § 1514A(a)(1). 

OSHA dismissed Gale’s complaint on the grounds that WFG was not a covered employer.  Gale appealed the decision to an administrative law judge of the Department of Labor, who allowed pre-hearing depositions. During his deposition, Gale testified that he was “uncomfortable” with some of the practices he observed and “expressed reservations” about them, but that he did not actually believe the company was engaging in illegal or fraudulent activities. The ALJ recommended that WFG’s motion for summary decision be granted on the grounds that Gale could not prove that he reasonably believed WFG’s practices were illegal or fraudulent. The Administrative Review Board agreed with the ALJ and granted WFG’s motion. Gale appealed the ARB's decision to the Eleventh Circuit. 

The question presented in Gale was what “reasonably believes” means. In answering this question, the Eleventh Circuit joined several other federal circuit courts in holding that the term encompasses both a subjective and an objective component. That is, the employee must actually believe that the employer’s conduct was illegal, and his belief must be objectively reasonable under a “reasonable person” standard.  The court noted that it has employed the same standard in the context of other retaliation statutes such as Title VII. 

Because Gale did not actually believe his employer’s conduct was illegal, the Eleventh Circuit affirmed the ALJ’s summary decision in favor of WFG. The court did not have to reach the question of whether a reasonable person would have believed WFG’s practices were illegal or fraudulent. 

For employers in the Eleventh Circuit, Gale is a reminder of the importance of both components of a retaliation case. Whether a belief is “objectively reasonable” is often a difficult question, and one that may not be amenable to a summary judgment motion. But where an employer is fortunate enough to obtain an admission from a plaintiff that she did not actually believe her employer’s conduct was illegal – or in the case of a Title VII sexual harassment case, that she did not actually perceive the harassment as sufficiently severe or pervasive to alter the terms and conditions of her employment – defending a retaliation case becomes a piece of cake. 

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On May 26, 2010, the Hilton Naples signed an agreement with U.S. Immigration and Customs Enforcement (ICE) to participate in the voluntary IMAGE program. This is the first company in the city of Naples, Florida to sign up for the IMAGE program. IMAGE, or ICE Mutual Agreement between Government and Employers, is a government initiative designed to improve employer self-compliance. Employers participating in IMAGE must submit first to a Form I-9 audit by ICE and verify all of their employees' social security numbers through the Social Security Number Verification System (SSNVS). Employers are also obligated to  sign up for E-Verify, conduct I-9 audits semiannually using a neutral party, ensure that only trained employees complete Form I-9 and use E-Verify, set protocols for responding to no-match letters, and much more. Employers using E-Verify must sign a Memorandum of Understanding or MOU which requires them to allow ICE (DHS) and SSA or their authorized agents or designees to "make periodic visits" to the employer.

IMAGE is NOT a “safe harbor” for employers. ICE has not indicated that IMAGE “partners” will not be subject to enforcement actions. Moreover, E-Verify participants have been subject to worksite enforcement actions. Given ICE’s inspection powers under IMAGE an employer should seriously consider the consequences of implementing these practices.

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That's  the title of an excellent Miami Herald article by reporter Cindy Goodman in which I was quoted this morning.   Cindy attended a seminar that my partner Kevin Vance and I gave recently at the City Club in Miami.  We discussed the pros and cons of telecommuting, and also the employment law issues that employers should be aware of before agreeing, or refusing to agree, to a telecommuting arrangement with an employee or group of employees.  Does a request by a disabled employee to work remotely constitute a reasonable accommodation that the employer must agree to to comply with the Americans with Disabilities Act? When is time spent at home waiting for an assignment considered compensable working time under the Fair Labor Standards Act? Is it the employer's responsibility to ensure that the telecommuter is working in a safe environment?  Is an employer responsible for an injury that an employee suffers at home while working?  What should an employer's telecommuting policy say?  These are complex questions that I cannot  answer in a blog post, but if you were unable to attend the seminar, and have specific questions, feel free to email me. 

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Please join me for this seminar, which my partner Kevin Vance and I will be presenting on May 12.  I hope to see you there.

Employment Law Strategies  for a Telecommuting Workforce: A Win-Win for Employees and Employers   When:  Wednesday, May 12, 2010 Registration: 8:15-8:30 Presentation: 8:30-10:15 Q&A: 10:15-10:30 Where:    The Miami City Club  Wachovia Financial Center 200 South Biscayne Blvd. 55th Floor Miami, Florida   Presented by EpsteinBeckerGreen Attorneys: Richard D. Tuschman Kevin E. Vance     As the economy begins to improve, you could be in danger of losing valuable talent. If you have staff members who commute long-distance, they may be seeking employment closer to home, or they may be lured away by employers that offer flexible scheduling and offsite work arrangements. The Telework Coalition estimates that more than 45 million U.S. workers now telecommute at least once a week. Unfurtunately, with a remote workforce comes a whole new array of HR headaches, from litigation and safety risks to security and wage and hour issues.     At this briefing you will learn how to reduce your organization's legal risks while using telecommuting as a way  to keep your star performers. Employment law attorneys experienced in advising employers on managing offsite employees will cover: Examples of effective telecommuting policies Wage and hour concerns, including tips for managing nonexempt employees in telework arrangements.  - What should your policy contain and not contain? - How should employers define telecommuting? - How does a telecommuting policy mesh with federal      overtime requirements? - What should your policy say about employer- vs. employee-owned equipment? - What about proprietary information? - What about guidelines regarding reimbursement for expenses incurred by telecommuting workers?   Safety issues: - What about ergonomic compliance and other safety concerns? - How should accidents and injuries be reported? - Should employers inspect home offices? What about liability insurance? Security concerns when employees have access to sensitive information from home Discrimination issues to consider when deciding which employees should be allowed to telecommute Disability issues, including how employers can use telecomuting to comply with the Americans with Disabilities Act Supervisory issues, including the importance of keeping the lines of communication open when some employees work offsite We hope you will join us for this timely and informative briefing.   View Speaker Biographies    To register, please click here        If you have any question about this briefing, please contact  Anneliese Garcia, (305) 579-3200 or agarcia@ebglaw.com.     About EBG: Founded in 1973, EpsteinBeckerGreen is a law firm with approximately 350 lawyers practicing in offices in Atlanta, Boston, Chicago, Houston, Los Angeles, Miami, New York, Newark, San Francisco, Stamford and Washington D.C. The Firm’s size, diversity, and as a founding member of the International Lawyers Network (ILN), allow its attorneys to address the needs of both small entrepreneurial ventures and large multinational corporations on a worldwide basis. EpsteinBeckerGreen continues to build and expand its capabilities as a law firm focused on five core practices: Business Law, Health Care and Life Sciences, Labor and Employment, Litigation and Real Estate. For more information on EpsteinBeckerGreen, please visit www.ebglaw.com. For more than three decades, the EpsteinBeckerGreen seminar series has introduced senior executives, general counsel and human resources professionals to cutting-edge issues in nearly every area of business touched by law.

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The following EBG client should be of interest to all Florida employers

By Joan A. Disler, Gretchen Harders, and Ray Kaplan

Background

As we reported in our Client Alert of December 24, 2009 ("UPDATE: Cobra Subsidy: What it Means for Employers Now"), President Obama signed into law the Department of Defense Appropriations Act, 2010 (the "Defense Appropriations Act"), which, among other things, extended and expanded certain provisions of the American Recovery and Reinvestment Act of 2009 ("ARRA") pertaining to premium assistance for benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). The Defense Appropriations Act extended the COBRA premium subsidy for assistance-eligible individuals who became eligible for COBRA from the period that began September 1, 2008, and ended on December 31, 2009, to the period that ended on February 28, 2010.

As we also reported in our Client Alert of March 8, 2010 ("UPDATE – COBRA Subsidy: New Extension Through March 31, 2010"), President Obama signed into law the Temporary Extension Act of 2010 (the "Temporary Extension Act"). The Temporary Extension Act extended the 15-month COBRA premium subsidy for eligible individuals who were involuntarily terminated from employment through March 31, 2010. The Temporary Extension Act also expanded the application of the premium subsidy to individuals who had a reduction of hours of employment (occurring from September 1, 2008, through March 31, 2010), followed by an involuntary termination that occurred on or after March 2, 2010, and before April 1, 2010.

COBRA Subsidy Extension

On April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010 (the "Continuing Extension Act"). The Continuing Extension Act extends the 15-month COBRA premium subsidy program for eligible individuals who were involuntarily terminated from employment through May 31, 2010. This extension also applies to individuals who had a reduction of hours of employment (occurring from September 1, 2008, through May 31, 2010) followed by an involuntarily termination that occurs on or after March 2, 2010, and before June 1, 2010. Under the Continuing Extension Act, group health plans and their administrators will need to provide eligible individuals who were involuntarily terminated on or after April 1, 2010, and prior to April 15, 2010, with revised COBRA notices and election forms. It would appear that these revised COBRA notices and election forms must be provided no later than sixty (60) days from the date of enactment (which appears to be June 14, 2010), and those individuals will have an additional sixty (60) days to make an election.

The Department of Labor Employee Benefits Security Administration has updated the introduction on its COBRA Web page (www.dol.gov/ebsa/COBRA.html) to reflect the Continuing Extension Act and presumably is in the process of updating the fact sheet, frequently asked questions and other materials.

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