Employee Benefits as Payroll Costs under the Paycheck Protection Program

Originally published by Haynes and Boone Benefits Group.

Businesses that received a loan under the Paycheck Protection Program (“PPP”) are eligible for forgiveness of that loan if, among other things, the loan proceeds are used to cover “payroll costs” incurred over the eight-week period after the loan is made. Payroll costs, capped at $100,000 on an annualized basis for each employee (i.e., $15,384 over the eight-week period), are broadly defined to include, among other things:

• Salary, wages, commissions, or tips;
• Employee benefits costs, such as for vacation or paid family or medical leave (other than wages for which a credit is received under the Families First Coronavirus Response Act), group health care costs, retirement plan contributions, and severance benefits; and
• State and local taxes assessed on employee compensation.

As of the date of this posting, no guidance has been issued by the IRS or the Department of Treasury to further clarify what specific items qualify as payroll costs. In the interim, employers should consider applying a common-sense approach when determining which expenses qualify as payroll costs by limiting such expenses to payments made in the normal course of the employer’s operations. For instance:

• Salary, wages, commissions, or tips should include regular compensation paid during the eight-week period, but likely will not include bonus payments or other equity or incentive compensation awards or payments made during that period;
• Group health care costs should include the premium costs of coverage (i.e., the employer’s portion of the premium, whether paid to an insurance company or assessed under a self-funded plan), but likely will not include claims submitted to a self-funded group health plan during the eight-week period;
• Retirement plan contributions should include employer matching, nondiscretionary, or profit sharing contributions made with respect to the eight-week period to the extent an employee has a right to the payment (whether under a qualified or nonqualified plan), but likely will not include (i) employer contributions that require the employee to remain employed with the employer on the last day of the plan year or (ii) accruals under a defined benefit plan; and
• Severance benefits should include payments scheduled for payment during the eight-week period but likely will not include payments that, by agreement or plan, were scheduled to be paid after the eight-week period that the employer unilaterally decides to accelerate into the eight-week period solely for the purpose of treating the payments as payroll costs.

Employers should carefully document what expenses they intend to treat as payroll costs for purposes of PPP loan forgiveness and be able to defend why such expenses fall into an eligible payroll cost category. In addition, we anticipate additional guidance will be issued, so employers should be ready to adjust the expenses they are treating as payroll costs to reflect any such guidance.

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Mediating in the Wake of COVID-19

Originally published by MehaffyWeber.

Written By Managing Shareholder Bob Black

One of the consequences of the current pandemic is a change in how we practice law and deliver legal services. Mediation is an example. We have gone from in person mediations to Blue jeans and Zoom virtual mediations. After 4800+ mediations, I embraced change about a month ago.

In researching videoconference options, I chose Zoom, the professional version. It is available at a low cost per month. I chose Zoom after reviewing the issues raised regarding confidentiality and network security. My assessment was that security issues exist for all videoconferencing methods and that Zoom had the most usable process right now. There will be rapid development in this area and my choice may change.

I like Zoom a great deal but do have some observations about it after conducting 18 Zoom mediations. Let me address security and confidentiality concerns first. Then I will share my observations about mediations conducted by videoconference.

Security and Confidentiality

I have had no issues with the Zoom system. Once parties are in their own breakrooms, confidentiality concerns are basically nonexistent absent an error by me as the host. For example, if the host places someone into a breakroom that does not belong there, it could be a problem. If it does happen, however, the host should quickly realize it and the people in the breakroom can see on their screens that someone is present who should not be. Removing that person involves a simple click of the mouse. Again, it has not yet happened to me. We are careful to provide the link to the videoconference only to pre-identified participants. That way, we know who should be present. Last second call-ins pose a problem and I do not admit them until I have verified they belong with one of the parties.

The more serious confidentiality issue is the available Record process. Mediations (including virtual mediations) should not be recorded. Some recordings violate various state laws anyway. The Record button is easy to hit. My advice is be sure to question the host – who is almost always the mediator – about whether the Record function is being used. Outside the mediation world, a recording may be needed and appropriate, but not in mediation. I tell the parties at the beginning there will be no recording. Separately, whenever I enter and leave a breakroom, I announce it. This helps ensure confidentiality throughout the process.

Mediation Observations

Videoconferencing is a “cooler” medium than more traditional mediations. Table-pounding theatrics come across poorly in videoconferences. I believe it favors a television news anchor approach. All mediations favor the prepared and virtual mediations are no exception. Learn to use the Share Screen feature to display photos and documents.

Opening Sessions are of very mixed utility in videoconferenced mediations. Your view of whether that is a good or bad thing depends on your view of opening sessions in general.

The pace of mediation is no different than in-person discussions. I try to move the process along but accept that videoconference discussions have their own pace.

I have had little problem so far with people disappearing from the mediation. However, people are beginning to step away for other business. It is frustrating at times. Of course, this is true of in person mediations as well. People have to remained engaged. And I quite enjoy “teleporting” from one room to the next.

People should dress for the occasion. A widow, for example, might see someone wearing a track suit and be offended. Also, everyone is curious about the visual background of participants. I advise a neutral background and suggest that one consider this in choosing where you sit. My favorite so far is the lawyer who was in some sort of massage chair that was shaking him vigorously. I had trouble understanding but perhaps it was because I was laughing.

Overall, I think in-person mediation is better in some types of cases but that Zoom mediation is quite effective in most. Below please find my Protocol for Virtual Mediations for your review. The American Arbitration Association has also issued “AAA Guidelines for Virtual ADR Proceedings” and it is very thoughtful. I have borrowed from those Guidelines and adapted them to mediation. If you are interested in the topic, I highly recommend the AAA Guidelines.

Protocol for Virtual Mediations

1. Any video conferencing platform must protect the confidential nature of the mediation process and must comply with all applicable rules governing mediations.
2. The platform should be easily navigable by the parties, recognizing the participants may not all be at the same technological level.
3. The host must be able to verify the identity of all participants to protect the process and those participating in it.
4. The platform must have a feature that permits the viewing of relevant documents.
5. The mediation may NOT be recorded.
6. If there is a platform failure or outage, teleconferencing will be used.
7. I believe Zoom (professional) best satisfies the criteria outlined above.

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Committee seeks public comments on two proposed ethics opinions

Originally published by Lowell Brown.

The Professional Ethics Committee for the State Bar of Texas is accepting public comments on two proposed ethics opinions through June 27.

• Proposed Opinion 20-2 (Revised) concerns whether a lawyer who represents a defendant in a criminal matter violates the Texas Disciplinary Rules of Professional Conduct if, after receiving tangible evidence from the lawyer’s client, the lawyer does not reveal the existence of the evidence until trial and refuses to allow the prosecuting attorney to inspect the evidence until the court orders the lawyer to do so.
• Proposed Opinion 20-4 deals with whether the Texas Disciplinary Rules of Professional Conduct allow a lawyer to use a nonlawyer employee to attract prospective clients to a booth in a public place operated by that nonlawyer employee.

Go to texasbar.com/pec to read the proposed opinions and provide comments.

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Braille Gift Cards and Title III

Originally published by William Goren.

 

It is hard to write on anything that doesn’t have something to do with Covid-19. However, ADA jurisprudence continues and a lot of it happens outside of Covid-19. That said, expect a tremendous amount of issues stemming from Covid-19. We will certainly be following those issues closely. Today, we will be talking about a case, Dominguez v. Banana Republic, LLC, out of the Southern District of New York where Judge Woods dismisses plaintiff’s claims that not offering braille gift cards violates title III of the ADA. As usual, the blog entry is divided into categories and they are: facts; court’s reasoning general/standing; court’s reasoning gift cards are not places of public accommodation; court’s reasoning no claim exists for Banana Republic failing to provide auxiliary aids and services; and thoughts/takeaways. As usual, the reader is free to focus on any or all of the categories.

 

I

Facts

 

In Dominguez v. Banana Republic, found here, Dominguez called Banana Republic’s customer service office to ask whether the store sold braille gift cards. An employee told him that the store did not. During the call, the employee did not offer plaintiff any alternative auxiliary aids or services. Later, plaintiff unsuccessfully attempted to locate accessible braille gift card for Banana Republic on his own. Plaintiff then sued Banana Republic under the ADA and the New York State Human Rights law. Plaintiff’s firm and another firm have brought several identical lawsuits like this, which the court was none too happy about.

 

II

 

Court’s Reasoning General/Standing

 

1. Proving up a claim of a violation of title III of the ADA means establishing that: 1) plaintiff is a person with a disability as defined by the ADA; 2) defendants own, lease, or operate a place of public accommodation; and 3) the defendant discriminated against the plaintiff within the meaning of the ADA.
2. Showing standing under title III of the ADA involves showing: 1) a past injury; 2) it is reasonable to infer that discriminatory treatment would continue; and 3) it is reasonable to infer, based upon the past frequency of plaintiff’s business and the proximity of defendant services to plaintiff’s home, that plaintiff intended to return to the subject location.
3. Plaintiff has alleged both a past injury and that discriminatory treatment was likely to continue because he was told that not only Banana Republic’s does not have any braille gift cards, but they had no plans to offer them in the future.
4. Plaintiff did not allege enough facts to plausibly plead that he intended to return to the place where he encountered the alleged discrimination for several reasons: 1) he did not profess any interest in procuring contemporary, affordable workwear; 2) he didn’t assert that he owned Banana Republic pieces already and wished to continue compiling a collection with the help of Banana Republic gift card; and 3) generic conclusory statements are not sufficient.
5. Cut and paste pleadings have their advantages in terms of the ability to turn them out quickly and often. However, their disadvantage is that they are too conclusory and fail to allege sufficient specific facts to show a real or immediate threat of injury in a specific situation.

III

 

Court’s Reasoning Gift Cards Are Not Places of Public Accommodations

 

1. Title III of the ADA regulates access to places of public accommodation and not to the type of merchandise a place of public accommodation sells.
2. Title III does not require provision of different goods or services. Rather, it just requires nondiscriminatory enjoyment of those that are provided. For example, a bookstore cannot prohibit a visually impaired person from entering the store, but the books themselves do not have to be available in both braille and in standard print.
3. Gift cards are a good under the dictionary term of the meaning and therefore, do not need to be made accessible under title III.
4. A retailer sells gift card to consumers in the same way as they sell any other product in its stores.
5. DOJ implementing regulations, 28 C.F.R. §36.307(a), says a title III entity does not have to alter its inventory to include accessible or special goods designed for person with disabilities.
6. The purpose of the ADA’s title III requirements to ensure accessibility to the goods offered by a public accommodation and not to change the nature or mix of goods that the public accommodation typically provides.
7. Gift cards are neither places nor public accommodations.
8. Gift cards are not public accommodation because gift cards fit into none of the categories of 42 U.S.C. §12181(7).
9. Gift cards are not places either. That is, Congress likely used the words place of public accommodation because it could find no other less cumbersome way to describe businesses offering particular goods or services covered in 42 U.S.C. §12181. While it is true that the Second Circuit allows for places of public accommodation to extend beyond physical spaces, it simply is impossible to come up with the conclusion that gift cards are a place. After all, gift cards do not sell or rent goods. Put differently, you can make a purchase with a gift card, but not on or in a gift card.
10. Courts have the responsibility of interpreting the actual text of laws that Congress enacts, and not with rewriting or expanding the scope of laws in the absence of the statutory text no matter how much one thinks it may advance remedial goals or represent congressional intent.

 

IV

 

Court’s Reasoning: No Claim Exists for Banana Republic Failing to Provide Auxiliary Aids and Services

 

1. 42 U.S.C. §12182(b)(2)(A)(iii) requires the providing of auxiliary aids and services by a title III covered entity unless doing so would result in the fundamental alteration of the goods, services, facility, privileges, advantages, or accommodations being offered or would result in an undue burden.
2. Auxiliary aids and services include, per 42 U.S.C. §12103(1)(B)-(D), qualified readers, tape text, modification of equipment or devices, or other effective methods of making visually delivered materials available to individuals with visual impairments.
3. With respect to title III, DOJ final implementing regulations, 28 C.F.R. §36.303(c)(1)(ii) make clear that it is the title III entity that gets to decide what auxiliary aid to offer. For example, a restaurant would not be required to provide menus in braille for patrons who are blind if the waiters in the restaurant are made available to read the menu. Similarly, a clothing boutique would not be required to have braille price tag if sales personnel provide price information orally upon request, and a bookstore would not be required to make available a sign language interpreter because effective communication can be conducted by notepad.
4. Plaintiff was not denied access to an auxiliary aid or service, much less one that effectively communicated information about Banana Republic’s gift cards.
5. In a footnote, the court notes that it is absurd to read the ADA as requiring a place of public accommodation to offer every single customer the help of all available auxiliary aids and services before the customer even after one.
6. Braille gift cards may or may not even be technologically possible because a braille gift card can only fit 55 to 70 braille characters. Braille is very big.
7. ADA and constitutional law integration arguments don’t work because gift cards are not cash and gift cards do not facially maximize a person’s employment, economic self-sufficiency, independence, or inclusion and integration into society.

 

IV

 

Thoughts/takeaways

 

1. The decision seems well reasoned, to me anyway.
2. Be careful about taking the example of using communication by notes with people who are Deaf, deaf, or hard of hearing. Especially with the Deaf (culturally deaf individuals), communication by notes back and forth especially where complex information is involved, is not likely to be effective as we saw in the case we discussed here. Also, depending upon context, it isn’t even something you would want to try.
3. Do we have a different case if instead of just asking for braille gift cards, the blind individual asked for some way to use gift cards in a way a person who is not blind could use them? For example, would there be some way for the blind individual to know that the gift card is from Banana Republic? Would there be some way for the blind individual to know how much is on their gift card? I suppose all of that is possible litigation down the road.
4. If a blind individual does call saying I would like a braille gift card. A better response might be we don’t offer that, but how can I be of help so that you can participate in that activity? Most people with disabilities are not looking to foment litigation. Respecting the individual with the disability goes a long way.
5. When it comes to the ADA, if on the plaintiff side, stay away from notice pleadings. Instead, be sure to allege enough facts to put the defendant on notice as to the specifics of the claim. Think of it as a hybrid of staying somewhere in the middle between notice pleading and fact-based pleadings.
6. While magic words aren’t required to request an accommodation, some kind of request for accommodation does have to be made.

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Stories of Recovery: A Rocky Road to Sobriety

Originally published by Guest Blogger.

Editor’s note: This post was originally published on June 29, 2018.

Editor’s note: TLAP offers confidential assistance for lawyers, law students, and judges with substance use or mental health issues. Call TLAP at 1-800-343-8527 (TLAP), text TLAP to 555888, or find more information at tlaphelps.org.

I started drinking in high school and immediately liked the way it made me feel. It made me smarter, better looking, cooler, and more athletic. I knew I was onto something good.

In college I joined a fraternity and drinking was just what we did. I respected the guys who drank hard. So I naturally began drinking more.

At this point in my life I didn’t see a problem. I didn’t have any severe consequences from my drinking, just lots of hangovers, some missed classes, and girls who thought I was an idiot. What I didn’t realize then was that I was drinking to change the way I felt inside.

In law school I took my studies seriously, but when Thursday afternoon rolled around, I drank with a purpose. I had switched to hard liquor by this point but still saw no problem because my drinking was “contained” to Thursday, Friday, and Saturday nights. Once out of law school I employed this same formula of drinking only on Thursday, Friday, and Saturday nights. But when I drank it was to get drunk.

I still didn’t see a problem with my drinking because I employed a “work hard, play hard” mentality. I told myself that hard-charging lawyers drank heavily. I embraced the image and partied on. I incorporated some moderate drug use into the mix, but alcohol was my thing.

Eventually my drinking spilled into Sundays, which made Monday mornings difficult.  Anything to put off the coming week of work and reality. Slowly I began to lose self-respect and self-worth, but I continued drinking. I thought journaling or charitable work would make me feel better—it didn’t.

During these days I always set out to get drunk when I drank. Friends and family members began expressing concern for me, which I casually brushed off. But at some point a few years before I quit drinking, I had the foggy notion that I should rein things in, to manage my drinking better. That thought was usually on Monday mornings when I was hungover. It was the thought that the next weekend I wouldn’t get so out of control. This was the first time I even thought about regulating my drinking, but at this point I was beyond human aid even though I didn’t know it.

Why couldn’t I regulate my drinking? I showed self-discipline in other areas of my life but had none where it concerned alcohol. Of course, once again I reasoned my way out of it—I’m single, I work hard, I haven’t had a DWI, I’m not hurting anyone but myself, etc. … Or I would try switching to beer or vodka rather than my drink of choice.

It didn’t matter what I did or what change I tried to make, I was still getting insanely drunk. Of course, by this time I was drinking every night, mostly to black out.

One Sunday afternoon I wrecked my car after drinking heavily on the golf course. Thankfully nobody was hurt, but I knew I was going to jail and that my drinking would finally result in a negative, tangible consequence. When the responding officer asked me how much I’d had to drink, I responded, “Way too much.” He felt sorry for me and gave me a ride home.

This incident had such a profound effect on me that I quit drinking—three years later. Any normal person would have had no trouble stopping or regulating his drinking, but I could do neither. What I didn’t understand then was that I was in the grip of a progressive disease, a disease that told me I didn’t have a disease: alcoholism.

The decline continued over the next three years. When I woke up on a Monday morning in June of 2011, I didn’t remember anything since the previous Thursday. I’d had enough. The four horsemen of terror, bewilderment, frustration, and despair were upon me. Physically I was wrecked but emotionally I was bankrupt. I knew I couldn’t stop this cycle on my own. Self-reliance had failed me.

A close friend had gotten sober about a year before, and I reached out to him. I went to a 30-day treatment center and admitted that I was an alcoholic. When I got out, my friend took me to a meeting. I continued going to meetings, met other alcoholics, got a sponsor, worked the steps, and worked with other alcoholics. Eventually my obsession to drink was removed.

I continue to do all of these things and, most importantly, I have a relationship with a higher power. That was seven years ago, and I’ve been sober since.

When I decided to try sobriety, I fully believed that life would be boring and monotonous. I’ve since learned that I have an appalling lack of perspective. In fact, my life is more fun than it’s ever been.

I live a full and useful life because I remain active in a program of recovery. I enjoy the practice of law rather than seeing it as a means to an end. Difficulties still happen, but that’s a part of life. I don’t have to pick up a drink or feel the way I felt that Monday morning in June 2011 ever again. And for that I am eternally grateful.

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COVID-19 Emergency! Where Are My Children? They have been taken By My EX!

Originally published by Nacol Law Firm.

We are now experiencing the worst Medical Pandemic in the USA since the Spanish Flu Pandemic of 1918. The COVID-19 Outbreak may be changing our American way of life for some time. Many families are in upheaval from fear of loved ones getting the virus, losing jobs, and not having food for their families. And in the middle of this situation you may be going through a family breakup, divorce, or just trying to Co-Parent your kids with your EX.

Now the “Never Want to Live Through It” Scenario may happen! Your kids are picked up by your Ex and they all disappear! Where are they? Are they in danger? When will I ever see my children again?

After you get over your shock, the main question you will ask is:
What can I do to get my children back?

On March 13, 2020, the Texas Supreme Court issued an emergency order that divorced / single parents should go by the originally published school and visitation schedule in their current decree. Since the last life-threatening pandemic in the United States was the Spanish Flu Pandemic of 1918, most divorce / single parent agreements do not include a pandemic clause! This emergency order was issued with the potential need of closing all courts, non-essential businesses and stay-at-home orders, Texas had to have an order in place to protect the children so that both parents could continue to care and protect them during the Pandemic.

If a custody agreement is in place with the court it is legally binding. If the runaway parent violates the agreement terms, he / she is in violation of the law and will likely face some serious legal consequences.

Many times, the runaway parent may take the children out of your area and may even cross state lines. This violation in your custody / visitation agreement could be considered parental kidnapping if the runaway parent moves over a state line without telling you the new residence of the child or without getting legal permission through the court to move or modify the custody order.

When the runaway parent and children are found, this is what could happen:

• Custody Arrangements may legally be changed by court orders. You will, in the most aggravated cases, most likely be awarded protective orders or custody with the runaway parent receiving supervised visitation or no contact with the child.
• The runaway parent may also face criminal charges and jail time.

At any time, this could happen to you!  If your legal position concerning custody and visitation with your children is in limbo, go secure a family law attorney and the help you need to protect your kids.

*If you were never married or divorced from the runaway parent, or if you have no legal court orders concerning or establishing custody and visitation rights in place, this could be a serious impediment in securing help to find your children.

After you get over your shock, the main question you will ask Is:
What can I do to get my children back?

• Think Clearly! You must respond quickly. Time is of the essence.
• Contact the police immediately. You need to tell them that the runaway parent may have taken the children without permission. Make sure that you have your certified legal court orders that pertain to your parental arrangement agreement concerning your children. It is important to be able to show the police the specific orders and how important it is to find the runaway parent and kids!
• Contact a family law attorney immediately. Texas Courts are dealing with many of these runaway situations and an experienced family law attorney can help you legally deal with finding your child in a timely fashion. After the runaway has occurred, there will be court intervention to prevent any further occurrences. Custody and supervised visitation issues will also need to be addressed. Texas Judges and Courts will not take a runaway situation lightly by an errant parent!

Click to open the Texas Supreme Court Emergency Order (pdf)

Nacol Law Firm P.C.
8144 Walnut Hill Lane, Suite 1190
Dallas TX, 75231
(972) 690-3333

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Preliminary Injunction, Affirmed.

Originally published by David Coale.

Realogy Holdings Corp. v. Jongeblood offers several practical tips about litigating a noncompetition agreement:

• Oral findings of fact at the hearing can satisfy the requirements of Fed. R. Civ. P. 52, when the “oral findings together with [the] written order nonetheless give us ‘a clear understanding of the factual basis for the decision’”;
• Testimony about confidential information given to the employee established the Texas-law requirements about adequate consideration for a noncompete, even when the employer did not make an express promise to do so at the time of contracting; abd
• After an unsuccessful appellate challenge to a preliminary injunction that enforces a noncompete, it can be appropriate to ask the trial court to “when determining the term of any injunction, to reweigh the equities . . . in light of the time that has passed during the pendency of th[e] appeal.”

No. 19-20864 (April 27, 2020).

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