New York Employers Must (Again) Provide Reproductive Health Notice of Rights in Employee Handbooks Following Second Circuit Ruling
New York employers are – once again – required to provide employees with notice regarding New York’s reproductive health decision making protections. The U.S. Court of Appeals for the Second Circuit vacated a lower court’s permanent injunction of a New York law that requires employers to include a notice in their employee handbooks regarding the State’s prohibition of discrimination based on reproductive health choices.
The handbook notice requirement stems from New York’s Reproductive Health Bias Law (Labor Law § 203-e) (the “Act”) which was enacted in November 2019 to “ensure that employees or their dependents are able to make their own reproductive health care decisions without incurring adverse employment consequences.” Under the Act, employers may not “discriminate nor take any retaliatory personnel action against an employee with respect to compensation, terms, conditions or privileges of employment because of or on the basis of the employee’s or dependent’s reproductive health decision making, including, but not limited to, a decision to use or access a particular drug, device or medical service.” The Act also prohibits employers from “accessing an employee’s personal information regarding the employee’s or the employee’s dependent’s reproductive health decision making, including, but not limited to, the decision to use or access a particular drug, device or medical service, without the employee’s prior informed affirmative written consent.” Relevant here, the Act requires that employers include in their handbooks a notice of employees’ rights and remedies under the Act.
Numerous religious organizations challenged the Act, including by arguing that the notice requirement violated their First Amendment rights. The U.S. District Court for the Northern District of New York issued a permanent injunction in 2022 halting enforcement of the Act’s notice requirement. On appeal, the Second Circuit disagreed with the district court’s reasoning and lifted the notice-related injunction. In finding the notice requirement lawful, the Second Circuit stated that the notice requirement “is similar to many other state and federal laws requiring workplace disclosures” and that while “the policy judgment that motivated [§ 203-e] may be ‘controversial’ in the same way that the policy judgments underlying Title VII, or minimum wage laws, are controversial . . . the existence and contents of [§ 203-e] – and an employer’s obligation to comply with it – is not itself controversial.” The Second Circuit further noted that the notice requirement in no way restricts employers from otherwise communicating their moral, political, or religious views (or even their disagreement with the provision) to their employees. The Second Circuit remanded the issue back to the district court for further analysis consistent with the appellate decision – thus, the litigation may not be over just yet.
Although the statute does not establish a clear penalty for an employer’s non-compliance with the notice provision (as opposed to the clearly stated employer penalties for engaging in discrimination/retaliation under the Act), New York employers are encouraged to revisit their employee handbooks to ensure compliance with the recent ruling.
Watch Out, Employers: Using Smart Devices in the Workplace May Not Be So Smart
What does the EEOC have to do with smart watches, rings, glasses, helmets and other devices that track bodily movement and other data? These devices, known as “wearables,” can track location, brain activity, heart rate, and other mental or physical information about the wearer, which has led some employers to require their employees to wear company-issued wearables. While the wearables may provide useful data, the EEOC recently warned employers to watch out for the dangers associated with them. A summary of the EEOC’s reported risks are identified below. You can find the full guidance here.
What to watch out for
Per the EEOC’s guidance, there are three categories of risk: collecting information, using information, and reasonable accommodations.
1. Collecting Information – Among other things, wearables collect information related to employees’ physical or mental condition (e.g., heart rate and blood pressure). The EEOC warned that collecting this type of information may pose risks under the Americans with Disabilities Act.
The EEOC considers tracking this sort of information as the equivalent of a disability-related inquiry, or even a medical examination under the ADA. Both inquiries and medical examinations for all employees (not just those with disabilities) are limited to situations where the inquiry or exam is job-related and consistent with business necessity or otherwise permitted by the ADA. The ADA allows inquiries and examinations for employees in the following circumstances:
When a federal, safety-related law or regulation allows for the inquiry or exam,
For certain public-safety related positions (e.g., police or firefighters), or
If the inquiry or exam is voluntary and part of the employer’s health program that is reasonably designed to promote health or prevent disease.
Outside of these three exceptions, the ADA prohibits disability-related inquiries and medical examinations. Also, if you are tracking this information, keep it confidential, just like you would any other medical information.
2. Using Information – Even if collection is permitted, employers must use caution when determining how to use the information. If an employer uses the information in a way that adversely effects employees due to a protected status, it could trigger anti-discrimination laws. A few cautionary examples from the guidance:
Using heart rate or other information to infer an employee is pregnant, then taking adverse action against her
Relying on wearable data, which is less accurate for individuals with dark skin, and making an adverse decision based on that data
Tracking an employee’s location, particularly when they are on a break or off work, and asking questions about their visits to medical facilities, which could elicit genetic information
Analyzing heart rate data to infer or predict menopause and refusing to promote employee because of sex, age, and/or disability
Increased tracking of employees who have previously reported allegations of discrimination or other protected activity
Employers need to be cautious about policies regarding mandated-wearable use. Requiring some, but not all, employees to wear these devices may trigger risks of discrimination under Title VII. If you plan to use these devices, you need human oversight and the employees monitoring the data must understand the device flaws, imperfections in the data, and potential ways of misusing the information.
3. Reasonable Accommodations – Even if an employer’s mandated-wearable requirement meets one of the above-listed exceptions, you may need to make reasonable accommodations if an employee meets the requirements for a religious exception or based on pregnancy or disability.
Takeaways
Technology in the workplace is ever-changing, and you need to stay informed about potential issues before you decide to use it. Do you need this information? If so, do you need it on all of your employees? Remember that if you don’t know about an employee’s protected status, you are less likely to be accused of basing a decision on it.
Before you implement (or continue using) mandated wearables, meet with your employment lawyer to work out a plan for implementation, follow-up, and continued policy monitoring for these devices. Also, check out our prior blog on AI in the workforce for additional tips on responsible use of technology in the workplace.
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FDA Issues New Recommendations on Use of AI for Medical Devices, Drugs, and Biologics
In its most recent effort to keep pace with advancing technology, the US Food and Drug Administration (FDA) recently issued two draft guidances on the use of artificial intelligence (AI) in the context of drugs, biologics, and medical devices.
Medical Device Guidance
The first draft guidance is entitled “Artificial Intelligence-Enabled Device Software Functions: Lifecycle Management and Marketing Submission Recommendations.” The guidance provides an overview of the type of documentation and information that companies will need to submit to the FDA to obtain medical device regulatory approval — part of the so-called “marketing submission” process. Among other things, the FDA advises that such documentation and information should include:
A description of the device inputs and outputs, including whether inputs are entered manually or automatically.
A description of how AI is used to achieve the device’s intended purpose.
A description of the device’s intended users, their characteristics, and the level and type of training they are expected to have and/or receive.
A description of the intended use environment (e.g., clinical setting, home setting).
A description of the degree of automation that the device provides in comparison to the workflow for the current standard of care.
A comprehensive risk assessment and risk management plan.
Data management information, including how data were collected, limitations of the dataset, and an explanation of how the data are representative of the intended use population.
A cybersecurity assessment, particularly focusing on those risks that may be unique to AI.
Guidance for Drugs and Biological Products
The second draft guidance issued this month is entitled “Considerations for the Use of Artificial Intelligence to Support Regulatory Decision-Making for Drug and Biological Products.” The guidance addresses considerations for the use of AI to support regulatory decision-making for drugs and biologics. Specifically, the draft guidance discusses the use of AI models to produce information or data to support regulatory decision-making regarding safety, effectiveness, or quality for these products. To that end, the FDA recommends utilizing the following seven-step process to establish and assess the credibility of an AI model output for a specific context of use (COU) based on model risk:
Step 1: Define the question of interest that will be addressed by the AI model.
Step 2: Define the COU for the AI model.
Step 3: Assess the AI model risk.
Step 4: Develop a plan to establish the credibility of AI model output within the COU.
Step 5: Execute the plan.
Step 6: Document the results of the credibility assessment plan and discuss deviations from the plan.
Step 7: Determine the adequacy of the AI model for the COU.
Each of these steps is discussed in detail in the draft guidance, with examples provided. The FDA states that this will provide a “risk-based credibility assessment framework” that will help manufacturers and other interested parties plan, gather, organize, and document information to establish the credibility of AI model outputs when the model is used to produce information or data intended to support regulatory decision-making.
Conclusion
The new guidances from the FDA provide further indication that the agency is closely scrutinizing the use of AI in and in connection with FDA-regulated medical devices, drugs, and biological products. To reduce the risk of unnecessary regulatory delays, companies seeking approval of FDA-regulated products should carefully review their regulatory submissions to ensure they align with the new AI guidance documents.
PFAS Personal Injury Lawsuits: Warning Bells for Users of PFAS
Two recent PFAS personal injury lawsuits have grabbed headlines, as the plaintiffs in the respective lawsuits allege that they developed cancer from public drinking water supplies that were contaminated with PFAS. These are not the only examples of such lawsuits, and while the cases to date target PFAS manufacturers, AFFF manufacturers, the cases are notable because of the allegations that drinking water caused the plaintiffs’ cancers and also, in one lawsuit, that one of the named defendants is a public water utility.
It is not farfetched to imagine a future in the not distant future where PFAS personal injuries expand the scope of defendants to include companies that used PFAS and discharged effluent into waterways that fed public water supplies. It is also not unrealistic to imagine water utilities brought into lawsuits such as the ones described in this article seeking contribution for alleged liability from upstream (literally) companies that discharged PFAS-containing effluent into waterways that the utility had no choice but to accept and send to customers for drinking water.
PFAS Personal Injury Lawsuits and Drinking Water
The two most recent lawsuits alleging cancer as a direct result of ingesting drinking water are Robert Stanfield v. 3M, et al filed in Martin County, Florida and Freeman and Barbara Thompson v. 3M, et al filed in the federal court for Washington state. Both are similar in nature in that they allege that their drinking water sources (private drinking wells in the Thompson case, and a public water supply in the Stanfield case) caused thyroid, prostate and other cancers. Both cases bring claims for compensation against various manufacturers of PFAS and AFFF (firefighting foam) manufacturers, with the Stanfield case adding the Martin County Utilities as a defendant to the lawsuit. In short, the lawsuits allege that the manufacturers of PFAS and AFFF knew of the potential harms to human health associated with PFAS, specifically from contamination to drinking water. The claim against the Martin Cunty Utilities alleges that the water utility knew of the presence and harms of PFAS in drinking water in 2016, yet continued to supply PFAS-contaminated drinking water to customers.
Current and Future Implications To Companies
The current lawsuits present interesting trends in the PFAS personal injury legal space, as they represent a growing trend of personal injury claims alleging drinking water as the cause. The cases are narrowly focused on PFAS manufacturers, AFFF makers, and in some instances, water utilities. This is a trend that will continue in the short term. However, companies must be aware that the future, in my view, the trajectory will look quite different. Plaintiffs will broaden the number of defendants they bring into lawsuits alleging injury from drinking water, to include companies that historically discharged or continue to discharge PFAS-containing effluent into waterways that ultimately feed into drinking water sources. With the ever-increasing reporting obligations for companies under federal and state regulations (including TRI and NPDES permit reporting requirements), the evidence that plaintiffs need to develop cases such as the ones that I predict will be easier to develop.
A head-in-the-sand approach to these issues is unwise for companies. Understandably, companies face significant business interruption issues every day that demand the “here and now” attention of its professionals. Of course, there is always the hope that the day never comes that the company will be brought into a PFAS lawsuit and it is difficult to provide a percent prediction that Board members crave before investing in risk deterrence programs. However, attorneys in the environmental law space and toxic torts space have seen trends like this before. One need not look any further than the asbestos litigation for support of the predicted trend I speak of. More pointedly, in the 1970s and 1980s, the asbestos litigation focused almost entirely on the suppliers of raw asbestos fiber and the companies that manufactured thermal insulation (seen as one of the products with the highest levels of potential exposure, akin to AFFF in the current PFAS litigation). Yet, today, the litigation focuses exclusively on a wide variety of industry and product types that used asbestos as one component of materials such as gaskets, electrical wire, floor tiles, and cosmetics. As the asbestos litigation evolved and a broader and broader net was cast, so too, i believe, will the course of PFAS litigation follow in the footsteps of asbestos litigation. It is for this reason that companies absolutely must prepare now for what is to come.
CMBG3 Law is following judicial, legislative, administrative, and scientific developments relating to PFAS. We represent companies of all sizes on PFAS compliance, litigation, and risk management issues, as well as consult with insurers and financial world firms on PFAS issues. We are recognized thought leaders on the subject of PFAS and are regularly contacted by media – including Bloomberg, Wall Street Journal, Washington Post – for our opinions on PFAS issues.
Federal Circuit Says Proper Orange Book-Listed Patent Must Claim Active Ingredient
In Teva Branded Pharmaceutical Products R&D, Inc. v. Amneal Pharmaceuticals of New York, LLC, the Federal Circuit jumped on the bandwagon of scrutinizing the types of patents that can be listed in the Food & Drug Administration (FDA) Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations), and decided that the “device” patents at issue were not properly listable. The decision follows recent action in this space by the Federal Trade Commission (FTC), including a general policy statement issued in late 2023, and challenges to more than 100 specific patent listings related to inhaler devices, multidose eyedrop bottles, and autoinjectors.
The Patents at Issue
The patents at issue were five patents Teva had listed in the Orange Book for its ProAir® HFA (albuterol sulfate) Inhalation Aerosol. The patents are described in the Federal Circuit opinion as relating to “improvements in the device parts of inhalers—specifically, the dose counter.” According to the Federal Circuit opinion, “None of the claims … explicitly require the presence of an active drug” as an element of the claimed product.
The ANDA Proceedings and Delisting Counterclaim
Amneal filed an Abbreviated New Drug Application (ANDA) seeking approval for a generic version of Teva’s ProAir® HFA product. Amneal’s ANDA included a paragraph IV certification against the Orange Book-listed patents at issue. After Teva sued for infringement, Amneal filed a counterclaim seeking delisting of the patents at issue. The district court agreed that the patents should not be listed in the Orange Book, but its delisting order was stayed pending Teva’s appeal to the Federal Circuit.
The Federal Circuit Opinion
The Federal Circuit opinion was authored by Judge Prost and joined by Judges Taranto and Hughes.
The Federal Circuit opinion includes a lengthy background section that touches on the origins of the Hatch-Waxman Act, basic principles of the ANDA framework, and statutory and regulatory provisions governing the listing of patents in the Orange Book. For those not familiar with Orange Book listings, it is important to understand that New Drug Application (NDA) holders are required to list certain patents in the Orange Book, but the FDA does not substantively review whether a patent submitted for listing meets the statutory and regulatory listing requirements. In effect, the listing process operates on an honor system, although ANDA filers can challenge Orange Book listings in a counterclaim in paragraph IV litigation as Amneal did here.
Prior to 2021, NDA holders were required to list “any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.” In 2021, the Orange Book Transparency Act (OBTA) was enacted to clarify the types of patents that could be listed and codify existing FDA guidance. As amended by the OBTA, an NDA holder must list:
… each patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use, or sale of the drug, and that—
(I) claims the drug for which the applicant submitted the application and is a drug substance (active ingredient) patent or a drug product (formulation or composition) patent; or
(II) claims a method of using such drug for which approval is sought or has been granted in the application.
The Federal Circuit opinion walks through a lengthy analysis to conclude that the patents at issue are not listable because they do not “claim[] the drug for which the applicant submitted the application,” which the court determined was the active ingredient (albuterol sulfate). At the end of its opinion, the court acknowledges but does not “adopt or reject” Amneal’s additional arguments that the patents are not listable because they are not “drug substance” or “drug product” patents under the OBTA.
The Federal Circuit rejected Teva’s arguments that a patent “claims the drug” if the NDA product infringes the claims, explaining in a nine-page analysis that “claiming” and “infringing” have distinct meanings. The court also rejected Teva’s arguments that a patent “claims the drug” if it claims any part of the NDA product, concluding after an eight-page analysis that just because a drug-device combination product was “approved with an NDA” does not mean every part of the product is a “drug.” Rather, according to the Federal Circuit, for drug-device combination products, “the drug for which the application was submitted and approved” is only “the part of the drug-device combination that made it regulatable as a drug in the first place,” i.e., “the active ingredient.”
Using the Definiteness Requirement as a Touchstone For Listability
The definiteness requirement of 35 USC § 112 requires the claims of a patent to “particularly point[] out and distinctly claim[] the subject matter which the inventor … regards as the invention.” Throughout its analysis, the Federal Circuit opinion invokes this definiteness requirement when interpreting the Orange Book listing requirement that the patent “claims the drug for which the applicant submitted the application.” For example, the court emphasizes:
[A] patent claims the drug when it particularly points out and distinctly claims the drug as the invention.
In rejecting Teva’s arguments that the patents would be listable if its claims were construed as requiring the presence of “an active drug,” the court reasoned:
[T]o claim something, a patent must particularly point out and distinctly claim what it purports to be the invention. See 35 U.S.C. § 112(b). And to qualify for listing, a patent must claim at least the active ingredient in the application and the approved drug product. …
In language that may open the door to Orange Book-listing scrutiny of generic claims, the court stated:
A claim requiring the presence of “an active drug” is far too broad to particularly point out and distinctly claim the drug approved in Teva’s NDA. Teva’s construction permits the presence of any active ingredient in any form. As a matter of law, Teva’s construction does not particularly point out and distinctly claim what was approved—the ProAir® HFA with albuterol sulfate as the active ingredient.
Taking Care With Orange Book Listings
In its policy statement, the FTC characterized improper Orange Book listings as potentially anti-competitive behavior, and “put market participants on notice that the FTC intends to scrutinize improper Orange Book listings to determine whether these constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act.” As noted in the Federal Circuit opinion, Amneal also filed antitrust counterclaims, alleging that the improper listings delayed FDA approval of its generic product. Thus, even though Judge Prost opined that “[t]he attractiveness of the thirty-month stay might arguably provide an NDA holder significant incentives to improperly list patents in the Orange Book,” there are good reasons for taking care with Orange Book Listings.
New Year’s Resolutions for Employment, Industrial Relations, and Work Health and Safety
A few New Year’s Resolutions from an employment, industrial relations and work health and safety perspective as we kick off 2025.
See how many of these can be completed or substantively advanced by the end of March 2025:
Payroll Compliance
Conduct or review your modern award mapping and classifications across the business. Ensure that all employees are receiving correct pay and entitlements under applicable industrial instruments and workplace laws. Criminal wage theft laws are now in place for intentional underpayments. Severe civil penalties also remain in place for underpayments which are not intentional in nature.
Preventing Sexual Harassment (Queensland)
Prepare, consult and implement a prevention plan to manage an identified risk to the health or safety of workers, or other persons, from sexual harassment and sex or gender-based harassment at work. This needs to underway from March 2025.
Positive Duty to Prevent Sexual Harassment (All Australian States and Territories)
Review current measures in place to prevent sexual harassment and sex or gender based harassment at work, generally. Are the measures effective? Does more need to be done to prevent such conduct? There is an expectation of ongoing positive and active attention to this important area.
Psychosocial Hazards and Risks
Review current risk assessments and ensure that psychosocial hazards and risks have been appropriately identified and recorded. Review control measures. Are the measures effective? Does more need to be done in this area?
Work Health and Safety
Review risk assessments holistically across the business. Are they up to date? Do they reflect current business operations and any changes to operations? Are control measures effective? Do they reflect applicable laws, standards, codes of practice and/or best practice? Do they need revision? Have workers been consulted with and trained on hazards, risks and control measures?
Board Briefings
If not already on the agenda, include the above key areas of importance into quarterly updates to the Board. Consider conducting board briefings / training on these matters periodically.
Contractor Classifications
Review each contractor engagement within the business against the new definition of employee. Is there a risk of misclassification or sham contracting (adopting a multi factor test)? Are practical arrangements for contractors in place to reduce this risk? Are opt out notices being used where appropriate? Misclassification or sham contracting can lead to severe consequences – including criminal and civil penalties for underpayments of minimum employment entitlements under applicable industrial instruments.
Industrial Relations Strategy
Review your present Industrial Relations strategy. Does it reflect best practice? Does it incorporate 2023/2024 changes to industrial relations laws?
With the range of criminal sanctions now expanded in the employment law, industrial relations and safety space, and the significant reform over the last year or two, there has never been a more important time to ensure a deliberate and focused plan to manage employment, industrial relations and work health and safety across every business in every industry. Not doing so could expose a company, its directors and other officers and other workplace participants.
Dirty Steel-Toe Boots, Episode 26: OSHA’s Role During President Trump’s Second Term [Podcast]
In this first episode of our Dirty Steel-Toe Boots podcast series for the year, Tampa shareholders Phillip Russell and Dee Anna Hays discuss anticipated changes and developments within the Occupational Safety and Health Administration (OSHA) during President Trump’s second term. Dee Anna and Phillip address the status of the proposed heat illness standard and walkaround rule, expected changes in OSHA leadership, and the potential impact that the incoming administration’s policies, regulatory adjustments, and enforcement strategies may have on workplace safety and health.
PFAS Sewer Sludge Risks Exist Says EPA…But Will It Matter After Today?
Last week, there was significant news in the PFAS realm when the EPA announced its long-awaited draft risk assessment with respect to PFOA and PFOS in sewer sludge from two popular methods of disposing of such sludge – landfilling and land application. Although the draft risk assessment is now set for public comment, the new EPA under the Trump administration will have to determine what to do with the risk assessment findings after the comment period ends. Options of course range from utilizing the risk assessment to create enforceable regulations to…..nothing at all. Given the push already for renewed efforts to create CERCLA exemptions for certain industries, including wastewater treatment facilities, my view is that while neither option on the ends of the possibility spectrum will be the resulting action of the new EPA, the EPA’s actions will not favor a rush to create regulations.
PFAS Sewer Sludge Risks
The EPA’s draft risk assessment finds that PFOA and PFOS from landfilling or land application of sewer sludge “…exceed the agency’s acceptable human health risk thresholds for some pasture farm, food crop farm, and reclamation scenarios when assuming that the land-applied sewage sludge contains 1 part per billion (ppb) of PFOA or PFOS.” EPA also found that “there may be human health risks associated with drinking contaminated groundwater sourced near a surface disposal site when sewage sludge containing 1 ppb of PFOA or sewage sludge containing 4 to 5 ppb of PFOS is disposed in an unlined or clay-lined surface disposal unit.” The EPA did caution that its findings were less conservative that it wished due in part to factoring in non-sludge exposures to PFOA / PFOS, and that its risk assessment did not take into consideration transformation of other PFAS chemicals into PFOA or PFOS.
Once published int he Federal Register, public comment will be open for 60 days.
Likely Action Stemming From Risk Assessment
The timing of the publication of the draft risk assessment if both critical and entirely deliberate. The new EPA will have to allow the public comment period to take its course, and at some point, may have to finalize the risk assessment. However, it is possible that the new EPA will seek ways to either stall doing so or release a statement that after considering public comment, it has decided that a less conservative PFOA / PFOS risk number is appropriate. The latter would in effect allow the EPA to go back to the drawing board in terms of conducting further assessment and comment periods.
I believe that this is precisely what the new administration will seek to do, primarily because of the likely related push to work out a CERCLA exemption carve out for the wastewater treatment industry. It makes little sense, after all, to finalize a risk assessment for sewer sludge, which would then have Clean Water Act and RCRA impacts and obligations for potential enforcement, if enforcement against the industries responsible for managing sewer sludge are to gain CERCLA exemptions.
Further, do not expect the new EPA to be in any rush whatsoever to finalize regulations related to PFOA / PFOS under either the Clean Water Act or RCRA based on the risk assessment, even if finalized in its current form. Even the Biden Administration’s EPA indicated that the risk assessment is but a first step in the process, and that is legally correct. EPA would need to undertake a cost/benefit analysis and feasibility assessment before it could successfully implement regulations under RCRA or the Clean Water Act. I would not expect the new EPA to be in any rush to finalize either assessment.
Looking Beyond Four Years
The longer term impact of the PFAS sewer sludge risk assessment, though, may be more impactful, but likely will be determined based on political party shifts. The draft risk assessment lays the foundation for sludge-related regulations. I believe that given the citizen awareness of the sludge land application issues, it will be difficult for the new EPA to simply ignore or entirely reject the risk assessment. It will have to take some action, but such action will not be rapid. Thus, if in 2029, we see another party shift with more interest in accelerating environmental and PFAS regulations, the foundational framework for what is needed will already be accomplished. I therefore believe that the sludge risk assessment’s legacy will not be felt prior to 2029, but at some point beyond that, it will become incredibly significant as an enforcement tool for the EPA against alleged polluters, as well as a civil litigation tool for plaintiffs’ attorneys seeking to bolster their lawsuits related to sludge contamination.
CMBG3 Law is following judicial, legislative, administrative, and scientific developments relating to PFAS. We represent companies of all sizes on PFAS compliance, litigation, and risk management issues, as well as consult with insurers and financial world firms on PFAS issues. We are recognized thought leaders on the subject of PFAS and are regularly contacted by media – including Bloomberg, Wall Street Journal, Washington Post – for our opinions on PFAS issues.
Maryland’s FAMLI Program, Part I: An Overview of The Law
In 2022, the Maryland General Assembly overrode Governor Larry Hogan’s veto to enact the law that created the Family and Medical Leave Insurance (FAMLI) program. Applicable to all employers with Maryland employees and starting July 1, 2026, the program will provide most employees in Maryland with twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave. Contributions from employers and employees to fund the program will begin July 1, 2025.
Quick Hits
Maryland’s Family and Medical Leave Insurance (FAMLI) program provides most Maryland employees with up to twelve weeks of paid leave, with some eligible for an additional twelve weeks, starting July 1, 2026, funded by contributions from both employers and employees beginning July 1, 2025.
The Maryland Department of Labor has released two sets of proposed regulations for the FAMLI program.
Under the FAMLI program, employees in Maryland will be eligible for paid leave for various family and medical reasons, and if they take leave for their own medical reasons, they will be eligible for an additional twelve weeks for parental bonding purposes.
There is much that employers may need to do to prepare. That preparation will depend on regulations issued by the Maryland Department of Labor (MDOL) to implement the law. Thus far, the MDOL has released two sets of proposed regulations, with more to come. The first set, released in October 2024, covers general provisions, contributions, equivalent-private insurance plans, and claims, while the second set, released on January 13, 2025, and currently open for public comment, covers dispute resolution. Part one of this multipart series explains the law, with parts two and three summarizing the proposed regulations, as well as employer concerns.
The law sets forth a general framework for the program, consisting of the following elements:
Leave Amount and Reasons for Leave
Effective July 1, 2026, all employees who have worked at least 680 hours in Maryland over the prior twelve months will be eligible to receive up to twelve weeks of paid leave for their own serious health condition, to care for a family member’s serious health condition, for parental bonding (including kinship care), to care for an injured or ill military servicemember who is next of kin, or for certain qualifying exigency reasons related to a servicemember’s active duty. If an employee has taken FAMLI leave for their own serious health condition, they may receive an additional twelve weeks for parental bonding purposes (and vice versa). The law requires employees to take leave in a minimum of four-hour increments.
Family members include the child of the employee or their spouse, the parent of the employee or their spouse, the employee’s spouse or domestic partner, and the employee’s grandparent, grandchild, or sibling. These include biological, adopted, foster, step, legal guardian, and in loco parentis relationships.
Contributions
The benefits will be administered through a state program, which will be funded through contributions from employers and employees, starting July 1, 2025. The rate of contribution will be determined annually by the Maryland secretary of labor, but is capped at 1.2 percent of an employee’s wages, up to the Social Security wage base (which will be $176,100 in 2025). The law splits contributions 50-50, unless the employer elects to make the employee share of the contribution as well. The law does not require small employers (those with fewer than fifteen employees) to submit the employer portion of the contribution (although employee contributions are still required), and the Maryland Department of Health will reimburse certain licensed/certified community health providers for up to the full amount of their share of the premium.
Employer Notice to Employees
The law requires covered employers to provide written notice to employees of their rights and duties under the law upon hire, annually, and within five days when leave is requested or when the employer knows leave may qualify.
Employee Notice to Employers
If the need for leave is foreseeable, the law requires employees to provide employers with at least thirty days’ written notice of their intention to take leave. If it is not foreseeable, they must provide notice as soon as practicable and generally comply with the employer’s absence-reporting requirements. If intermittent leave is required, the employee must make a reasonable effort to schedule the leave to not unduly disrupt business operations.
Employee Application for Benefits
Employees may apply for benefits up to sixty days before and sixty days after the anticipated start date of the leave, although the MDOL may waive the filing deadlines for good cause. Employers have five days to respond to an application.
Interaction With Other Benefits
FAMLI leave will run concurrently with federal Family and Medical Leave Act (FMLA) leave. Employers may not require employees to use vacation, sick leave, or other paid time off before or while receiving FAMLI benefits, although employers may permit employees to use such leave to bridge the difference between FAMLI benefits and full pay. However, if an employer provides paid leave specifically for purposes of parental bonding, family care, military leave, or disability, the employer may require employees to use such leave concurrently or coordinated with FAMLI leave. Employees receiving unemployment insurance benefits or workers’ compensation benefits (other than for a permanent partial disability) are not eligible for FAMLI benefits.
Job Protection and Health Benefits
During FAMLI leave, the law states that employers may discharge employees only for cause. They must otherwise be reinstated to their job, unless the employer determines that reinstatement will cause “substantial and grievous economic injury” to their operations and has notified the employee of that fact. In addition, the law requires employers to maintain the employee’s health benefits during FAMLI leave.
Private Employer Plans
Employers may establish their own plan or utilize a certified third-party insurance plan that meets or exceeds the rights, protections, and benefits provided to employees under the law. For such private employer plans to be valid, the MDOL, which is directed to establish “reasonable criteria” for such plans, must approve the plan.
Grassley Defends Constitutionality of False Claims Act’s Qui Tam Provisions in Amicus Brief
In an amicus brief filed on January 15, Senator Chuck Grassley (R-IA) urges the Eleventh Circuit to reverse a district court ruling which held that the False Claims Act’s qui tam provisions are unconstitutional.
Grassley, who authored the 1986 amendments which modernized the FCA, states that “the False Claims Act is our nation’s single greatest tool to fight waste, fraud and abuse” and calls the Middle District of Florida’s decision in Zafirov v. Florida Medical Associations a “flawed decision.”
In September, the Middle District of Florida dismissed whistleblower Claire Zafirov’s qui tam lawsuit on the grounds that the FCA’s qui tam provisions are unconstitutional as they violate the Appointments Clause of Article II of the Constitution.
In his brief, Grassley lays out the long-history of qui tam laws and details a number of qui tam provisions enacted by the First Congress. He criticizes the district court for discarding this history despite the Supreme Court’s heavy reliance on it in its decision in Vermont Agency of Nat. Res. v. United States ex rel. Stevens, which held that the FCA’s qui tam provisions do not violate Article III of the Constitution.
“The First Congress that enacted numerous statutes that featured qui tam provisions made clear that, at the time of the founding, the legislature believed that the limited rights granted relators fell within the Constitutional separation of powers many of them had personally fashioned,” Grassley’s brief states.
In the brief, Grassley also notes that “every court to have addressed the issue has concluded that the qui tam provision is in accordance with the Constitutional separation of powers.”
He further emphasizes the immense success of the FCA’s qui tam provisions in incentivizing whistleblowers to come forward and expose otherwise hard-to-detect frauds, deter would-be fraudsters, and protect the public from harm.
As Grassley notes in his brief, “the FCA is a resounding success, as Congress and the Executive Branch have both acknowledged.” According to newly released statistics from the Department of Justice (DOJ), since the FCA was modernized in 1986, qui tam lawsuits have resulted in over $55 billion in recoveries of taxpayer dollars.
Grassley’s brief joins a brief filed by the U.S. government in urging the Eleventh Circuit to reverse the district court ruling. In its brief, the government claims that the Stevens decision “makes clear that relators do not exercise Executive power when they sue under the Act… Rather, they are pursuing a private interest in the money they will obtain if their suit prevails.”
It further states that “the historical record.. suggests that all three branches of the early American government accepted qui tam statutes as an established feature of the legal system.”
During her Senate confirmation hearing on January 15, Senator Grassley asked Pam Bondi, nominee to be the Attorney General, if she would commit to defending the constitutionality of the FCA.
“I would defend the constitutionality of course of the False Claims Act,” Bondi stated. “The False Claims Act is so important, especially by what you said with whistleblowers.”
Michigan’s Earned Sick Time Act – Legislative Update
There are only 36 days before the Earned Sick Time Act (ESTA) takes effect on February 21, 2025. Presently, both the state House and Senate have introduced bills to amend the ESTA. The House acted quickly convening a committee to hear testimony on House Bill 4002 and proposed amendments to the minimum wage law (HB 4001). Varnum’s Labor and Employment team has been closing monitoring the progress of these amendments.
Varnum attorney Ashleigh Draft testified before the House Select Committee on Protecting Michigan Employees and Small Businesses in support of House Bill 4002. To date, the Senate has not yet convened a committee to discuss the Senate Bill. A summary of both the House and Senate bills follow:
House Bill (HB 4002)
The House Bill includes crucial amendments to make the Act more workable for both employees and employers, including:
Clarifies the definition of employees eligible for the benefits of the ESTA. Independent contractors, out of state employees, seasonal workers (working 25 weeks or less in a year), part-time employees (working 25 hours or less per week) and variable hour workers are not eligible for benefits under the Act.
Exempts small businesses (employers with less than 50 employees) from ESTA.
Employers may limit increment of use to 1 hour.
Retains the accrual method of 1 hour for every 30 hours worked, with usage capped at 72 hours per year, and limiting carryover to 72 hours.
Recognizes that employers that frontload 72 hours per year are in compliance with the Act and do not need to carryover time from one benefit year to the next.
Permits employers to provide a single PTO bank that can be used for all purposes including ESTA.
Allows employers to require employees to take ESTA time concurrently with FMLA, ADA or any other applicable law.
Senate Bill (SB 15)
The bill pending in the Senate proposes the following amendments:
Defines small business as an employer with fewer than 25 employees.
Allows small businesses to frontload 40 hours of paid and 30 hours of unpaid earned sick time at the beginning of the year.
Employers may limit increment of use to 1 hour.
Retains the accrual method of 1 hour for every 30 hours but permits frontloading of 72 hours as an alternative to the accrual method, while retaining the carryover from year to year.
The amount of accrued sick time that an employee may carry over from year to year may be limited to 144 hours if the employer pays the employee the value of the employee’s unused sick time before the end of the year. If the employer does not pay out the value of the employee’s unused sick time, carryover may be capped at 288 hours.
Charlotte E. Jolly contributed to this article
DOJ’s False Claims Act Recoveries Top $2.9 Billion in FY 2024, but Health Care Numbers Dip—What Could FY 2025 Hold for Health Care Enforcement?
On January 15, 2025, the U.S. Department of Justice (DOJ) issued a press release announcing its fiscal year (FY) 2024 False Claims Act (FCA) recoveries and reported that settlements and judgments exceeded $2.9 billion in 2024—up from $2.68 billion in FY 2023.
Recoveries from entities in the health care and life sciences industries continue to represent the lion’s share of the dollars. However, health care recoveries have dropped year over year, and 2024 saw a decrease in the number of cases pursued by the DOJ on its own. What does the future hold as we look forward to a new administration? History might provide some interesting guidance.
Overview of the Statistics
While the 423 FCA cases filed by the DOJ in FY 2024 represented a marked decrease from the 505 FCA cases filed the previous year, FY 2024 saw the highest number of qui tam actions filed in history. FY 2024, coincidentally, ended on the same day (September 30, 2024) that a Florida judge ruled in U.S. ex rel. Zafirov v. Florida Medical Associates that the qui tam provisions of the FCA were unconstitutional.
Qui tam relators, or whistleblowers, filed 979 suits in FY 2024, up from 713 in FY 2023 and eclipsing the prior record of 757 filings set in FY 2013.
Whistleblower and DOJ cases combined resulted in 558 settlements and judgments, on par with 566 last year.
Counting the $2.9 billion recovered in FY 2024, total recoveries under the FCA since the 1986 amendments now exceed $78 billion and have exceeded $2 billion annually for 16 consecutive years.
Health Care Statistics
While several of the health care statistics dipped slightly, recoveries from the health care sector remained steady at $1.68 billion (compared to $1.86 billion in FY 2023) and drove the overall FCA recovery figures.
While the FCA statistics show overall increases in total fraud recoveries and the number of cases filed by whistleblowers in FY 2024, the health care statistics portray a slightly different picture. While more health care cases were filed by relators in FY 2024 than in FY 2023, the number of cases brought by the DOJ, on its own, dropped by more than 10 percent compared to FY 2023. Other health care statistics that dropped in FY 2024 compared to FY 2023 included:
total health care fraud recoveries,
recoveries in cases pursued by the government,
recoveries in cases in which the government intervened, and
recoveries in cases where relators pursued matters on their own.
In DOJ’s press release announcing the FCA recoveries, the agency reaffirmed its commitment to enforcement in the health care sector, highlighting key recoveries in the following areas:
health care entities contributing to the opioid crisis;
providers billing federal health care programs for medically unnecessary services and substandard care;
cases alleging false claims in the Medicare Advantage program;
matters involving unlawful kickbacks and Stark Law violations;
pandemic-related fraud (including cases involving improper payments under the Paycheck Protection Program and alleged fraud affecting Medicare and other federal health care programs for services related to COVID-19 testing and treatment); and
cybersecurity enforcement and holding contractors accountable for compliance with applicable cybersecurity requirements (one example was a case against the Georgia Institute of Technology and Georgia Tech Research Corp., which we covered in an earlier blog post).
What to Expect in FY 2025
As a general matter, the FY 2024 statistics demonstrate that FCA enforcement continued to be a top DOJ priority, particularly within the health care sector.
As we look ahead to the incoming Trump administration, it is noteworthy that the first Trump administration saw almost 370 more health care FCA cases brought by relators than those filed during the Biden administration. The first Trump administration also saw the highest number of health care-related FCA cases brought in a single year by the DOJ. History would suggest a continued focus on health-care related FCA enforcement during President Trump’s second term.
Epstein Becker Green Attorney Ann W. Parks contributed to the preparation of this post.