OSHA Releases COVID-19 Vaccine ETS Requiring Vaccination for Employers with 100 or More Employees

On November 4, OSHA released its COVID-19 vaccine ETS (Emergency Temporary Standard), requiring many employers to implement COVID-19 mandates for vaccination and testing.  While legal challenges are expected, it is critical for employers to understand the requirements, develop polices, and be prepared to comply. 

The ETS applies to all private employers with 100 or more employees, but does not apply to employees who work from home, work in a location where no other individuals are present, or who work exclusively outdoors.  Covered employers will have until January 4 to ensure that their work forces are vaccinated.  But most other requirements of the ETS must be implemented by December 5.  Employees who are not vaccinated must submit to weekly coronavirus testing and mask wearing while in the workplace.  It is up to employers to decide whether employees can opt out of vaccination through the weekly testing.  However, employers are not required to provide or pay for testing, unless required by a union contract or other local law.  Employers are also required to provide up to four hours of paid time off to be vaccinated, as well as sick leave to recover from vaccine side effects. 

Employers will need to plan for employees claiming religious and medical exemptions. 

 When an employer is on notice that an employee holds a sincere religious belief, practice, or observance preventing the employee from obtaining a COVID-19 vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship.  This includes accommodation requests from employees preferring an alternative version or specific brand of COVID-19 vaccine available to the employee.   

A medical exemption would require a note from the employee’s doctor. 

 Erickson | Sederstrom’s experienced employment and labor law attorneys are ready to help manage these COVID-19 vaccination issues in the workplace.  Please do not hesitate to contact one of our attorneys.  Erickson|Sederstrom’s employment law attorneys can be reached at (402)397-2200.

Nebraska Supreme Court Clarifies the Common Fund Doctrine

The common fund doctrine is a long held common law principle that allows recovery of reasonable attorney fees when legal services are used to recover money to which multiple people share an interest. The doctrine is typically applied where an insurance company makes a payment to its insured to cover certain out-of-pocket expenses. Then, when the insured files suit against the responsible party and recovers these out-of-pocket expenses, the insurance company has a right to recoup its earlier payments made pursuant to the policy, less the fees that the insured incurred to make that recovery.

While the doctrine has been around for decades, there still remain some gray areas in its application. One such gray area is whether the doctrine applies to an insurer's subrogation claim for medical payments under Neb. Rev. Stat. § 44-3,128.01. The Nebraska Supreme Court recently addressed that gray area and has provided some clarity.

In Hauptman O’Brien v. Auto-Owners Ins. Co., the insurer argued that an insurer who makes medical payments under an automobile liability policy is entitled to full reimbursement upon settlement of the case, without reduction for the attorney fees of the insured's lawyers. The basis for this argument was the insurer's position that § 44-3,128.01 preempts the common fund doctrine because the statute and doctrine were inconsistent and incompatible. The Court disagreed.

Applying rules of statutory construction, the Court found that is silent as to recovery of reasonable attorney fees under the common fund doctrine, and that by giving the insurer the right to recover medical payments in subrogation, the legislature did not necessarily rule out a reduction for attorney fees under the common fund doctrine. The Court decided that the legislature's silence in this regard meant that the common fund doctrine applies to allow for a reduction to account for attorney fees where a law firm secured a common fund in a pretrial settlement. The insurer was thus entitled to recover its $1,000 medical payment, less the 1/3 ($333) fee, to which the insured's counsel was entitled.

Thanks to law clerk Ross Serena for assistance in drafting this article. Matt Reilly and Erickson | Sederstrom’s litigation attorneys are ready to assist with a range of civil disputes and can be reached at 402-397-2200.

Homestead Exemption & Transfer on Death Deeds

In Chambers v. Bringenberg, a recent matter of first impression, the Nebraska Supreme Court reversed the decision of the district court and held that a transfer on death (“TOD”) deed did not fall under the plain language of a statute governing homestead conveyances. See Chambers v. Bringenberg, 309 Neb. 888 (2021).  Therefore, in the case where a homestead was owned by one spouse, the TOD deed executed by the owner-spouse did not require the non-owner spouse to execute or acknowledge the deed for it to be valid. 

This case arose when a surviving husband, David Chambers, brought an action challenging a TOD deed executed by his wife, Eleanor Chambers, before her death. On February 8, 2018, Eleanor recorded a TOD deed for a home she purchased solely in her name and chose her daughter, Angie, as the designated beneficiary. At this time, David neither executed nor acknowledged the TOD deed.

In contending the transfer to Angie was invalid, David relied on Nebraska Revised Statute § 40-104, also known as the homestead statute, which provides that the “homestead of a married person cannot be conveyed or encumbered unless the instrument by which it is conveyed or encumbered is executed and acknowledged by both spouses.” Neb. Rev. Stat. § 40-104 (emphasis added). David argued he was the rightful owner of the home because he did not execute or acknowledge Eleanor’s TOD deed.

The district court found in favor of David on this issue, reasoning that Eleanor’s TOD deed was void because Eleanor was a “married person” who lived at the home in question, and it was therefore “the homestead of a married person” subject to the homestead statute. Accordingly, the district court found the TOD deed was invalid because David did not execute and acknowledge the deed as required under the homestead statute.

In reversing the district court’s decision, the Nebraska Supreme Court considered, as an issue of first impression, whether § 40-104, the homestead statute, applied to TOD deeds.

In its analysis, the court first noted that under the Nebraska Uniform Real Property Transfer on Death Act (“TODA”), a transfer of property through a TOD deed “is effective at the transferor’s death” and “[n]othing in the TODA expressly contemplates any circumstance under which the TOD deed of a married grantor must contain the spouse’s execution and acknowledgment in order to be valid.” Id. at 906. Additionally, the conveyance statutes that are incorporated by reference into the TODA make no reference to homestead protections.

The court acknowledged that “even when both spouses have a homestead interest in the real estate,” it has never previously held “that a spouse cannot validly devise an ownership interest in homestead property without the other spouse executing and acknowledging the will.” Id. at 912. However, the court found that the requirement under the homestead statute did not apply to TOD deeds because, under the plain language of the statute, the words “convey,” “grant,” and “encumbrance” all connotate that the instrument has an inter-vivos effect, where the transfer is made during one’s life. In contrast, the language in the TODA describes a “transfer” between a “transferor” and a “beneficiary” and is the language of a devise, or the passing of title of real estate upon death.

Based on the foregoing, the court ultimately held a TOD deed does not fall under the plain language of the homestead statute because “[w]hat occurs upon a transferor’s death to property that is the subject of a TOD deed is not a conveyance or an encumbrance, but a devise.” Therefore, David’s execution and acknowledgment of Eleanor’s TOD deed was not necessary.

Call Erickson | Sederstrom’s estate planning attorneys with questions on TOD deeds, wills or trusts, or related matters at 402-397-2200 and ask for Andrew Huettner, Dan Dittman, or Michelle Daniels.

Why Everyone Needs A Comprehensive Estate Plan

You have likely already made a diligent effort to choose a knowledgeable financial advisor and create a sound financial plan, whether that means starting a college savings fund for your children or saving for retirement. However, more than likely, the financial plan you built with your financial advisor does not necessarily consider what you want to happen in the event of your incapacity or upon your death.  So, what happens to a Nebraska resident that does not have these important estate planning documents?  

The state of Nebraska, in its generosity, creates a “will” on your behalf, and the laws of intestacy dictate who gets what. But what does Nebraska law really say? Well, that all depends on your then living heirs and the total value of your estate. For example, if you are a married person with no children, Nebraska law says the first $100,000.00 plus one-half of your remaining assets go to your surviving spouse, and the balance of your assets go to your parents. For a married person with children, Nebraska law says the first $100,000.00 plus one-half of your remaining assets go to your surviving spouse, and the balance of your assets get distributed equally amongst your children, so long as all your children are also children of your surviving spouse. 

If these state laws surprise you, or if they do not reflect the plan you envisioned, do not let the State of Nebraska dictate these things for you.  Be diligent in your planning and consider executing these very important documents, not only for yourself, but also for your loved ones. 

When it comes to estate planning, most people are familiar with the concept of a Will. However, in addition to a Will, there are many other essential documents that you should consider, and we will discuss each in greater detail below.  

Last Will and Testament. What comes as a surprise to many is the fact that a Will is much more than just an instrument detailing who you want to inherit your property. A Will is a legally enforceable document stating the “who, what, and when” upon your death. In a Will, you will consider things such as: 

1. How your estate will be distributed;

2. Whether you want to include any bequests to specific individuals or charities, or in the alternative, whether there are individuals you would like to disinherit;

3. Who you want to take care of your minor children, if any;

4. At what age or ages you want your children to receive their inheritance and whether you want to set conditions for asset distribution;

5. Who you want to wind up your affairs and handle your property after death; and

6. Where you want your property to go in the event you die without any living descendants (i.e. children, grandchildren, etc.)

 Power of Attorney. Although this document may take many forms, all Power of Attorney documents allow another person to make decisions on your behalf during your lifetime. Giving a person you trust a power of attorney gives them the ability to advocate for your medical needs or make necessary legal and financial decisions for you.

 An agent under a Durable Power of Attorney for Financial Affairs (“Financial DPA”) is appointed by you to act on your behalf regarding your property, business, and financial affairs, among other things. Your agent is legally permitted to perform acts that you designate, whether that be limited powers, or all powers to the fullest extent allowed under the law.  An example of such powers includes simple tasks, such as paying bills and depositing checks, or more complicated tasks, such as managing your real estate, investments, or business interests. Unless expressly stated in the document, the agent may act even while you, the principal, have capacity.

 Should you not have a Financial DPA in force in the event of an incapacity, it is very possible that your family will need to petition the court and ask a judge to establish a conservatorship for you. In addition to being labor intensive, court proceedings are also costly and typically require the assistance of an attorney.  Oftentimes, the situation that calls for a conservatorship also requires immediate action. Of course, as with all fiduciary appointments, who you name as your agent needs thoughtful consideration, such as whether the person is capable of managing your assets, can be diligent when carrying out actions, and fully understands your wishes.  Furthermore, you must consider who you want to serve as a back-up in the event the primary agent is unable or unwilling to fulfill the role.

 An agent under a Health Care Durable Power of Attorney (“Health Care DPA”) is appointed to make health care decisions for you in the event you are unable to make health care decisions for yourself. If you want the agent to have authority regarding life-sustaining treatment, the authority must be expressly stated in the Health Care DPA.  In the alternative, you may choose to execute a Living Will and expressly state your wishes to refuse life-sustaining treatment.  You may also express your wishes regarding organ donation within the Health Care DPA. 

 If you have questions regarding the aforementioned documents, or are interested in more information about Trusts (which is another highly sought-after method of estate transfer), please reach out to any of Erickson & Sederstrom’s highly knowledgeable and experienced estate planning attorneys at (402) 397-2200.

Erickson | Sederstrom represented at the Trucking Industry Defense Association’s annual meeting

Erickson | Sederstrom partner Matthew D. Quandt recently attended TIDA’s Annual Seminar in Philadelphia, PA.  The Trucking Industry Defense Association (TIDA) is a nonprofit association that is devoted to sharing knowledge/resources for defense of the trucking industry and committed to reducing the cost of claims and lawsuits. This year’s seminar featured presentations regarding the state of the industry, accident reconstruction experts, orthopedic experts, fraudulent claims, fleet management, jury psychology, and more.

 From the initial accident investigation, following a rapid response team call in the middle of the night, to pre-suit negotiations and litigation of catastrophic injury and wrongful death cases through discovery and trial, Matt handles all aspects of trucking and transportation litigation. He is committed to making sure his clients are comfortable with the litigation process and emphasizes early resolution of all claims in an efficient, cost-effective manner whenever possible.

Long-Haul COVID-19 Illness May Qualify as a Disability Under the Americans with Disabilities Act

Although most people with COVID-19 recover within weeks, some continue to experience symptoms months or longer following initial infection or may experience new or recurring symptoms at a later time. This condition is referred to as “long COVID” and those who suffer from this condition are often referred to as “long-haulers.” 

Due to the rise of long COVID as a significant health issue, the Office for Civil Rights of the Department of Health and Human Services (“HHS”) and the Civil Rights Division of the Department of Justice (“DOJ”) collaborated to develop guidance about whether individuals suffering from long COVID are considered to have a disability entitling them to protection under Titles II and III of the Americans with Disabilities Act (“ADA”) (which apply to governments and public accommodations), the Rehabilitation Act, and the Patient Protection and Affordable Care Act (“ACA”), all of which protect individuals with disabilities from discrimination. While the guidance is not directly applicable under Title I of the ADA, which governs private employers, it is nonetheless instructive and provides best practices for private employers. 

According to the Centers for Disease Control and Prevention (“CDC”), people with long COVID have a range of new or ongoing symptoms that can last weeks or months after infection with the virus that causes COVID-19 and that can worsen with physical or mental activity. Examples of symptoms of long COVID include but are not limited to: 

·  Difficulty breathing or shortness of breath

·  Tiredness or fatigue

·  Difficulty thinking or concentrating (sometimes referred to as “brain fog”)

·  Cough

·  Chest or stomach pain

·  Headache

·  Fast-beating or pounding heart (also known as heart palpitations)

·  Joint or muscle pain

·  Sleep problems

·  Fever

·  Dizziness on standing (lightheadedness)

·  Mood changes

·  Change in smell or taste 

Long COVID may qualify as a disability under the ADA, the Rehabilitation Act, and the ACA if the symptoms or condition constitute a “physical or mental” impairment that “substantially limits” one or more major life activities. 

Major life activities are a broad category, including things such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, writing, communicating, interacting with others, and working. The term also includes the operation of a major bodily function, such as the functions of the immune system, cardiovascular system, neurological system, circulatory system, or the operation of an organ. The impairment does not need to prevent or significantly restrict an individual from performing a major life activity to “substantially limit” the major life activity and the limitations do not need to be severe, permanent, or long-term to qualify as a disability. Indeed, in a joint statement issued July 26, 2021, the DOJ and HHS said “substantially limits” should be interpreted broadly and should not demand extensive analysis, and provided the following examples of situations in which a COVID-19 long-hauler might be substantially limited in a major life activity: 

·         A person with long COVID who has lung damage that causes shortness of breath, fatigue, and related effects is substantially limited in respiratory function, among other major life activities. 

• A person with long COVID who has symptoms of intestinal pain, vomiting, and nausea that have lingered for months is substantially limited in gastrointestinal function, among other major life activities.

• A person with long COVID who experiences memory lapses and “brain fog” is substantially limited in brain function, concentrating, and/or thinking. 

However, long COVID is not always a disability. An individualized assessment is necessary to determine whether a person’s long COVID condition or any of its symptoms substantially limits a major life activity. When long COVID does qualify as a disability, those suffering from long COVID are entitled to protections and certain accommodations under the above laws, which may include leave, part-time work and/or job restructuring. People with severe COVID-19 symptoms that last for months may also be covered by the Family and Medical Leave Act (“FMLA”) in addition to the ADA, while those who recover quickly may not be covered by the ADA but might be protected by the FMLA. 

If you are an employee or employer seeking guidance on whether long COVID qualifies as a disability, and the scope of the laws’ coverage and application, the employment attorneys at Erickson | Sederstrom can assist you.

Nebraska Delta-8 THC and CBD Retailers Beware

On the heels of the boom in cannabidiol (“CBD”) sales, many Nebraska CBD retailers have recently been marketing and selling products containing Delta-8 tetrahydrocannabinol (“Delta-8 THC”), which is an isomer of Delta-9 tetrahydrocannabinol (“Delta-9 THC”). Delta-9 THC is the common compound in marijuana that provides euphoric effects to it users.  Marijuana plants and other products containing Delta-9 THC in concentrations high enough to provide users with any such effects are generally illegal under federal and Nebraska law.  Delta-8 THC provides a euphoric effect similar to Delta-9 THC, but milder, and due to a loophole in the federal and Nebraska law, as further discussed below, products containing Delta-8 THC are arguably legal in Nebraska and many other states.   

The Delta-8 THC market was born when producers began looking for ways to turn extra CBD extracted from hemp into something else profitable. Using a chemical synthetization process, they were able to produce Delta-8 THC from CBD, and incorporate Delta-8 THC into products that could be marketed as a legal recreational drug in many states.

Under the Nebraska Hemp Farming Act (the “Nebraska Hemp Act”), “Hemp” is legal in Nebraska and removed from the Nebraska Controlled Substances Act.  Hemp is defined as “the plant Cannabis sativa L. and any part of such plant, including the viable seeds of such plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 % on a dry weight basis” (emphasis added) . Thus, as long hemp derivative products (such as CBD and Delta-8 THC) do not contain Delta-9 THC in excess of 0.3%, a plain reading of the statute indicates that Delta-8 THC and products containing Delta-8 THC would be classified as Hemp, and are legal in Nebraska.  Many other states have similar industrial hemp statutes that purport to make Delta-8 THC products legal in the same manner. 

Under the federal 2018 Farm Bill (the “Farm Bill”), “Hemp” was removed from the federal Controlled Substances Act.  In addition, under the Farm Bill, the definition of Hemp is the same as it is under the Nebraska Hemp Act, meaning that Delta-8 THC products that do not contain Delta-9 THC in excess of 0.3% are legal under federal law. 

However, despite the purported legality of Delta-8 THC under Nebraska and federal law, Nebraska retailers face a myriad of risks.  In 2020, the Drug Enforcement Agency (“DEA”) issued an Interim Final Rule that stated, in part, that “all synthetically derived tetrahydrocannabinols [regardless of THC content] remain schedule I controlled substances.”  There is some debate over whether Delta-8 THC is “synthetically derived,” but there appears to be a conflict between this DEA Rule and the Farm Bill.  In any event, Delta-8 THC retailers face risk of DEA enforcement for the possession, distribution, or transportation of products containing Delta-8 THC.   In addition, the Food and Drug Administration (“FDA”) retains authority to regulate products that contain cannabis or cannabis derivatives under the federal Food, Drug and Cosmetic Act.  Currently, Delta-8 THC products do not appear to be prohibited by FDA regulations. However, the FDA recently issued a consumer update warning of the dangers of Delta-8 THC products, including contamination concerns from potentially unsafe manufacturing methods.  Thus, Delta-8 retailers also risk that the FDA may take steps to ban or more tightly regulate these products.

At the state level, the tide appears to be shifting, as more states are closing the legal loophole that purports to make Delta-8 THC legal under laws similar to the Nebraska Hemp Act. For example, Colorado (which allows recreational marijuana use) has banned Delta-8 THC since May 2021, and Texas recently did the same in October 2021.  As of the date of this article, sixteen other states have restricted or banned Delta-8 THC. In Nebraska, Governor Rickett’s office has generally taken a negative position towards cannabis and its derivative products, and Governor Ricketts recently asked the state Attorney General to review the legality of Delta-8 THC.  Recall that prior to the enactment of the Nebraska Hemp Act, certain Nebraska sellers of CBD products were raided and charged with criminal drug trafficking offenses. The Nebraska Supreme Court eventually found in favor of the sellers, but only after years of the defendants expending extensive legal fees. Nebraska Delta-8 THC retailers could face a similar situation.

There is also the risk that Delta-8 THC retailers may inadvertently possess and/or sell products containing Delta-9 THC in amounts greater than 0.3%, in which event they would be subject to potential felonies under the Nebraska Controlled Substances Act.  Thus, such retailers are advised to take as many steps as possible to confirm that its Delta-8 THC products fall within the definition of Hemp under Nebraska law, and don’t contain Delta-9 THC in amounts greater than 0.3%.

Persons considering entering the Delta-8 THC market should carefully consider these risks, and be prepared to handle the effects of a Delta-8 THC ban or restriction under Nebraska or federal law. If you have any questions about Delta-8 THC or other cannabis issues, attorneys at Erickson | Sederstrom can assist you. Attorneys Shay Garvin or Andrew Collins can be reached (402) 397-2200.

Late Paycheck or Unpaid or Withheld Wages? Nebraska Laws Might Be on Your Side

Nebraska Revised Statute §§ 48-1228 to 48-1234 constitute the Nebraska Wage Payment and Collection Act. The Act applies to employees and a broad range of employers, including the state or any individual or entity that employs anyone in Nebraska as an employee. It defines wages as compensation for labor or services, including fringe benefits, when previously agreed to and conditions stipulated have been met by the employee, whether such wages are on a time, task, fee, commission, or other basis. Wages include earned but unused vacation leave. And wages include commissions on all orders delivered or on file with the employer at the time of an employee’s separation, unless the employer and employee agreed otherwise in an employment contract.

Fringe benefits include sick and vacation leave plans, disability income protection plans, retirement, pension or profit-sharing plans, health and accident benefit plans, and any other employee benefit plans or benefit programs regardless of whether the employee participates in such plans or programs.

The substance of the Act is its requirement that an employer designate and timely pay employees on regular paydays, and that an employer must pay a terminated employee all unpaid wages on the next regular payday or within two weeks of termination, whichever is sooner. See § 48-1230. If the wages consist of commissions, the employer must pay the employee any earned commissions on the next regular payday following receipt of payment for the goods or services on which the commissions were based. See § 48-1230.01.

The enforcement mechanism in the Act is it authorization of employee lawsuits for unpaid wages in § 48-1231. As an incentive to bring wage claims, which may consist of only a couple of week’s wages in some instances, the Nebraska Legislature has authorized awards of attorney’s fees to employees who prevail in court. If the employee prevails and he or she has employed an attorney to do so, the must award attorney’s fees in an amount not less than 25% of the unpaid wages. Courts can award more if they determine a higher fee is justified; 25% is the minimum required by the statute. In addition, if the case is appealed, and the employee wins on appeal, the employee can recover a 25% attorney’s fee for the appeal, as well. An employee cannot recover fees if the employer had tendered the unpaid wages within thirty days of the regular payday when they were due. 

If the employee prevails in the lawsuit, damages are equal to the wages owed. If nonpayment of wages is found to have been willful, then an employer may be held liable for twice the amount of unpaid wages (though the employee only recovers the amount of wages and the "doubled" amount is remitted to the Nebraska State Treasurer because it amounts to punitive damages, which may not be retained by private parties under the Nebraska constitution). 

The potential for the "double" damages and attorney’s fees can transform a wage claim seeking a couple weeks of unpaid wages into a much larger liability for employers who do not tread carefully. 

Whether you are an employee who is owed wages by his or her employer, or an employer dealing with wage issues, attorneys at Erickson | Sederstrom can assist you. Attorneys Bonnie Boryca or Paul Heimann can be reached (402) 397-2200.

A “Verdict” is not a “Judgment" for Purposes of Nebraska's Post Judgment Interest Statute, and it is Error to Grant Post Judgment Interest Until Certifying the Final Judgment

The recent Nebraska Supreme Court case of VKGS v. Planet Bingo, et.al., 309 Neb. 950, ___ N.W.2d ___ (2021) addressed proper application of Nebraska’s post judgment interest statute and the propriety of bifurcating issues at trial.   

Planet Bingo, LLC, (Planet Bingo) owns an electronic gaming software called EPIC.  EPIC was developed in the late 1990’s by Planet Bingo’s wholly owned subsidiary, Melange Computer Services, Inc. (Melange).  VKGS, LLC, (VKGS) and Planet Bingo, competitors in the bingo hall gaming industry, sued each other for breach of contract.  Although they were competitors, Planet Bingo and VKGS maintained a contractual business relationship from approximately 2003 through 2012, which as of 2005 was protected by an extensive confidentiality provision drafted by VKGS.   

In 2011, Planet Bingo sued VKGS for breach of contract for VKGS’s misuse of Planet Bingo’s confidential information -- by taking confidential EPIC information to develop its own competing software program called OMNI. VKGS in turn alleged that Planet Bingo breached contractual obligations and tortiously interfered with business relations by using pricing information and disparagement to influence customers. Two separate jury trials ensued. 

A jury trial commenced in August 2018 on both parties’ claims.  About halfway through the trial VKGS attempted to offer a Canadian Patent application that contained some description of EPIC’s source code.  VKGS claimed that this public discourse of confidential information precluded Planet Bingo’s misuse of confidential information as a matter of law.   But VKGS did not have a certified copy of the patent application and failed to otherwise authenticate it at trial.  VKGS did not disclose the patent application as a trial exhibit.  The district court sustained Planet Bingo’s objections and did not receive the exhibit into evidence. 

Furthermore, the existence of the patent application raised issues about whether Planet Bingo could proceed with its case in chief.  Thus, VKGS moved to dismiss Planet Bingo’s misuse claim.  Because VKGS had not yet rested its case in chief, and because Planet Bingo had not yet presented evidence on its claims, the court instead bifurcated VKGS’s and Planet Bingo’s claims and proceeded on the VKGS claims only.  About a year later, in June 2019, Planet Bingo’s claims were tried to a separate jury.   

In the trial on VKGS’ claims, the jury found Planet Bingo liable for $558,405. In the second trial on Planet Bingo’s claims, the jury found VKGS liable for $2,990,000.  After the second trial, the court offset the verdicts and entered one judgment in Planet Bingo’s favor, but also awarded VKGS post judgment interest on its 2019 verdict while still offsetting VKGS’ award.   

VKGS appealed the court’s order bifurcating VKGS’ and Planet Bingo’s claims and also appealed the court’s decision to exclude the patent application from evidence in the first trial (the patent application was eventually received into evidence during the second trial of Planet Bingo’s claims).  Planet Bingo cross appealed claiming that the court erred in awarding VKGS post-judgment interest on its verdict because the “verdict” was not a judgment for purposes of the post-judgment intertest statute.  

As to the patent application, the Nebraska Supreme Court held that VKGS failed to authenticate the exhibit.  Also, in noting that authentication is a condition precedent to a document’s admission into evidence the court said  “Neb. Rev. Stat. § 27-901(1) (Reissue 2016) does not impose a high hurdle for authentication or identification of proffered evidence as a condition precedent to admissibility. ”  Instead, authentication “may be satisfied by testimony that a matter is what it is claimed to be, and proper authentication may also be attained by evidence of appearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances, sufficient to support a finding that the matter in question is what it is claimed to be. ”  In fact, the Court noted that certified public records are self-authenticating under Neb. Rev. Stat. § 27-902(4) (Reissue 2016) but VKGS failed to even offer a certified copy of the application. 

As to the bifurcation issue, the Court held bifurcation of a trial may be appropriate where “separate proceedings will do justice, avoid prejudice, and further the convenience of the parties and the court.”   Additionally, the Court reaffirmed that trial courts have the inherent power over the general conduct of a trial and a decision to bifurcate will not be overturned absent an abuse of discretion.  The Court held that no abuse of discretion occurred because the unauthenticated patent application was not properly offered in VKGS’ case in chief because its contents were irrelevant to VKGS’ tortious interference claim.  Also, the potential effect of the application on Planet Bingo’s claims was a sufficient reason to bifurcate the trial. Thus, the Court dismissed VKGS’ appeal.  

As to post judgment interest, Court agreed with Planet Bingo that VKGS’ trial verdict was not a “judgment’ for purposes of post judgment interest and that the lower court erred in awarding VKGS post judgment interest.  Instead, the Court held that the two competing verdicts were required to be offset and interest could only accrue on the final judgement entered after the verdicts were offset.  Thus, the Court reversed the trial court’s award of post judgment interest on VKGS’ verdict and held “Final judgment in this case occurred after all of the parties’ claims were adjudicated and both jury verdicts were accepted by the district court. As post judgment interest accrues only on judgments, and [Neb. Rev. Stat.] § 25-1316 contemplates only one ‘judgment,’ the district court erred in awarding VKGS post judgment interest when interest had not begun to accrue on VKGS’ claim and Planet Bingo’s claim exceeded VKGS’ claim.”

E|S Attorney Pat Guinan Does it Again.

Congrats to our attorney Patrick Guinan on another appeal win, this time in front of the United States Court of Appeals for the Eighth Circuit. The court upheld the lower court’s entry of summary judgment completely in favor of certain defendants, including one represented by Erickson & Sedestrom. The opinion can be found here: https://www.ca8.uscourts.gov/todays-opinions (Pals v. Weekly et al).

Eighth Circuit Denies Relief for Female Employee Who Was Paid Less for Doing More

In Perry v. Zoetis, the United States Court of Appeals for the Eighth Circuit upheld the United States District Court for the District of Nebraska’s decision finding that a female employee was not discriminated against for receiving less compensation than her male co-workers when she voluntarily chose to complete tasks that were not required of her. See Perry v. Zoetis, LLC, No. 20-2232, 2021 WL 3435535 (8th Cir. Aug. 6, 2021).

Barbara Perry, a former employee of Zoetis, LLC, became upset upon discovering she was making less money than her male co-workers. Perry met with the company’s human resource manager and requested a raise, arguing she was performing more job duties and receiving less compensation than her male co-workers. Soon after her requests were denied, Perry quit her job and brought suit against Zoetis under the Nebraska Equal Pay Act (“NEPA”) and the Nebraska Fair Employment Practices Act (“NFEPA”), alleging she was discriminated against because she received less compensation for performing more duties than her male peers.

When bringing a claim under NEPA, a plaintiff must establish that they completed equal work on jobs requiring equal skill, effort, and responsibility. When comparing Perry’s position to those of her higher-paid, male co-workers, the facts revealed that the male co-workers’ positions required different skills and responsibilities than Perry’s. Perry argued she completed the same duties as her male co-workers, but the record showed such duties were not required of her; rather, she volunteered to take on those extra tasks.

The court stated that “[w]hile Perry’s work ethic is laudable, the fact that she was not paid more for the extra tasks, or for her skill in completing them, is not proof of sex discrimination.” Perry needed to provide evidence that showed she was doing equal work requiring equal responsibility, which she failed to do since her position did not require her to take on the additional duties of her co-workers.

For similar reasons, Perry’s claim under the NFEPA was also rejected. Perry could not meet her burden to prove that she was treated differently than male employees who were “similarly situated” because the male co-workers had different duties and responsibilities.

The Eighth Circuit further relied on facts showing that one male co-worker earned more than Perry because new employee rates were based on differing levels of responsibility, education, and related experience. Another male co-worker earned more than Perry because Zoetis has an internal policy to keep an employee’s pay rate the same when transferring the employee from a different department. Ultimately, Perry failed to provide evidence that Zoetis “offered a phony excuse” for the disparate treatment in pay, and she was denied relief.

Bonnie Boryca is an employment and litigation attorney with Erickson & Sederstrom, PC in Omaha, Nebraska. She was assisted in the above article by law clerk Alison Clark, who will be joining the firm in 2022 as an associate. Bonnie can be reached at 402-397-2200 or boryca@eslaw.com.

SBA Removes Loan Necessity Review for Certain PPP Loans

The United States Small Business Association (“SBA”) will no longer require loan necessity review for Payment Protection Program loans of $2 million or more and any open requests for additional information regarding the loan necessity review can be closed.

 The loan necessity review required completion of the Loan Necessity Questionnaire (SBA Form 3509 for for-profit borrowers and SBA Form 3510 for not-for-profit borrowers) which led to a lawsuit by the Associated General Contractors of America against to the SBA that challenged the legality of the forms.

The changes are effective immediately and the SBA will issue guidance on this issue which will provide more details.

No Recovery for Alleged Demotion of Military Servicemember Upon Return from Deployment

A former Union Pacific employee wasn’t entitled to judgment as a matter of law (i.e., a ruling in his favor) or attorneys’ fees after a job change following his return from military deployment, the U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently decided, reversing the lower court’s opinion.

Facts

Rodolfo Quiles began working for Union Pacific as a general manager of safety analysis in 2014. He supervised other employees and received “D-band” level compensation. With A-band pay being the lowest, his salary slotted him just below E-band (or executive-level) compensation.

Quiles served in the U.S. Marine Corps Reserve and left Union Pacific in 2015 for voluntary deployment. While deployed, the company underwent a reduction in force (RIF), which eliminated all general manager titles, reclassifying many of them as directors instead. In addition, the company:

·         Adjusted the general director position to require five years of field experience; and

·         Hired a new employee for the position of general director of safety analysis, who Quiles believed was intended to be his replacement.

After the deployment, Quiles returned to work at Union Pacific under a new role as director of safety analysis. Although he received the same benefits and his compensation remained at the D-band level, he viewed the new job as a demotion. He claimed he was given less responsibility and status than in his previous position as general manager.

Quiles didn’t qualify for the general director job because he lacked the five years of field experience necessary to meet the new requirement for the position.

Unhappy with the new job title, Quiles became insubordinate, and his work performance declined, leading to his termination from Union Pacific in 2016. He then sued the company claiming it violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by effectively demoting him during his military leave.

How USERRA works

Under USERRA, military servicemembers are entitled to reemployment when they return from service that doesn’t exceed five years. Upon returning to work, they’re entitled to return to a job based on the “escalator position” principle, which places them in the job they “would have attained with reasonable certainty if not for the absence due to uniformed service.” The principle covers pay, benefits, seniority, and other job perks they would have attained if not for the period of service.

There are exceptions to the rule. You don’t have to reemploy a servicemember if:

·         The company’s circumstances “have so changed as to make such reemployment impossible or unreasonable”;

·         Employment would “impose an undue hardship” on your company; or

·         The servicemember’s previous employment was “for a brief, nonrecurrent period” with no reasonable expectation it would continue for a significant length of time.

The district court ruled in Quiles’ favor, finding Union Pacific demoted him upon his return in violation of USERRA and awarding attorneys’ fees. The case proceeded to trial on the remaining claims, and the jury returned a verdict in the employer’s favor, concluding Quiles was fired for cause and not entitled to any damages.

8th Circuit’s ruling

After the favorable jury verdict, Union Pacific appealed the district court’s grant of judgment as a matter of law and award of attorneys’ fees to Quiles. In reversing the lower court’s decision, the 8th Circuit held it was impossible to reemploy him to his previous position because:

·         It had been eliminated; and

·         A reasonable jury could find “Union Pacific attempted to fit Quiles into an appropriate job within the corporation’s reorganized structure upon his return from deployment” in accordance with the escalator-position principle and for which he was qualified.

Because Quiles wasn’t entitled to judgment as a matter of law, the court further held he didn’t qualify as a prevailing party for purposes of attorneys’ fees. Quiles v. Union Pac. R.R. Co., Inc., No. 19-3489 (8th Cir., July 6, 2021).

Bottom line

You should take care in responding to servicemembers’ requests for leave and be aware of USERRA’s strict requirements. When in doubt, call your employment law attorney.

Bonnie Boryca is one of Erickson Sederstrom’s employment attorneys and can be reached at boryca@eslaw.com or 402-397-2200. This article was written with assistance of law clerk Ali Clark, who will be joining the firm as an associate in the fall of 2022.

The Trademark Filing Process

Trademarks are important pieces to many businesses. They are how people associate a business with a particular service or product. While there are certain common law protections provided to trademark holders even if they do not file with the United States Patent and Trademark Office (“USPTO”), filing with the USPTO provides the most protection for a mark. This will serve as a general outline of the process for filing trademark applications with the USPTO. 

Identifying the Mark and Goods and/or Services Provided

The first step is to identify the mark you wish to protect. This could be a design mark (ie. a logo), a wordmark (ie. a word or phrase), or both. The key is to determine how you are using or plan on using the mark and identifying whether certain colors or fonts are going to be integral portions of your mark. Another key thing to identify is what goods and/or services are going to be provided in connection with the mark. This aids in the review of existing marks and is required in the application process.

Reviewing Existing Marks

Once you have identified your mark, you should review USPTO records to determine whether there are any existing registered marks that will create issues for your application. The most common would be a mark that creates a “likelihood of confusion.” The determination of whether there is a likelihood of confusion involves an analysis of numerous factors, including the similarity of the marks, the similarity of goods and/or services, and the geographic proximity of where the goods and/or services are provided.

Use in Commerce

The next step is to determine whether you are, or will soon be, using the mark in commerce. A “use in commerce” is a public-facing use, such as use in advertising, on a website, or on packaging for a product. This determination drives which type of application will be filed with the USPTO.

Which application to file

Whether your mark is being used in commerce will guide which application needs to be filed with the USPTO. A Section 1(a) application is used when the mark is being used in commerce. A Section 1(b) application is used when the mark has not been used in commerce. There are various other types of applications but Section 1(a) and Section 1(b) applications are the most common.

Application Timeline

Section 1(a)

After filing a Section 1(a) application, the USPTO reviews the application and the applicant receives a response in approximately three months. The response is typically one of two types: an office action or a notice of publication.

An office action is a letter from the USPTO identifying issues with the application that must be addressed before the mark can be registered. These range from administrative issues such as disclaimers as to certain portions of the mark or adjusting descriptions of the marks or the goods and/or services, to likelihood of confusion refusals.

If an office action is issued and the applicant decides to continue to pursue registration, the applicant has 6 months from the date the office action was issued to file a response. If an applicant does not respond within 6 months, the application will be abandoned. If a response is filed, within 1-2 months the USPTO will either approve the mark for publication or issue a final letter which an applicant can appeal.

Once an application is approved for publication, the mark will be published in the Trademark Official Gazette, allowing others to oppose the registration and, if no one opposes, the mark will be officially registered with the USPTO in approximately 3 months.

Section 1(b)

A Section 1(b) application follows a similar pattern to the Section 1(a) application except for one key distinction: once the application is approved and the mark is published for opposition, the applicant has 6 months to file either a Statement of Use showing the mark being used in commerce or an extension, which provides an additional 6 months for the applicant to start using the mark in commerce. An applicant can file up to 5 separate 6 month extensions.

Post Registration Maintenance

Once your mark is officially registered, there are certain filings that need to be done between the 5th and 6th year after registration, between the 9th and 10th year, and then every 10 years thereafter to show that you are still using the mark.

 The trademark filing process is lengthy with various nuances throughout. If you have a mark that you believe could be registered with the USPTO, Erickson | Sederstrom has attorneys that can assist with this process from start to finish or anywhere in between

No Double Liability to Amputee for Loss of Foot and Toes in Workers’ Compensation Matter

In a recent decision, the Nebraska Supreme Court considered whether the discontinuance of temporary partial disability benefits triggered the payment of permanent partial disability payments in a Workers’ Compensation case involving an employee who endured an amputation below his knee as a result of a work-related injury. 

In Melton v. City of Holdrege, Mr. Benjamin Melton (“Employee”) was employed by the City of Holdrege (“City”) as a journey-man lineman where he sustained a work-related injury resulting in an amputation of his left leg just below the knee.  309 Neb. 385, 386-87 (2021).  Thereafter, Employee obtained a prosthesis; however, he endured issues with the prosthesis including shrinking, swelling, sweating, and obtaining a good fit.  Just over six years later, Employer provided City medical documentation from his physician indicating he reached maximum medical improvement (“MMI”).  City paid Employee permanent partial disability benefits for a one hundred percent loss of his foot and an additional five percent loss to his leg upon receipt of such documentation. 

The trial court waded through conflicting evidence concerning Employee’s impairment rating and when Employee reached MMI.  It was determined Employee’s amputation below the knee entitled him to statutory benefits for 150 weeks under Neb. Rev. Stat. Ann. § 48-121(3).  The trial court reasoned that Employee had not lost all functional use of his left leg, but his loss of thigh strength and atrophy combined with his knee pain reduced the function of his leg beyond the loss of his foot.  Employee suffered a twenty percent loss of function to his leg, entitling him to forty-three weeks of disability benefits.  Employee was awarded a combined total of 193 weeks of compensation, rejecting Employee’s argument that he was entitled to an award for the loss of each toe on his left foot in addition to the loss of that foot.   

On appeal, Employee argued the trial court (1) failed to evaluate loss of use of his leg without the prosthesis attached when determining his impairment; (2) should have awarded him compensation for the total loss of use of his leg; and (3) erred in failing to award him consecutive disability benefits for a total loss of all his toes, his foot, and use of his left leg.   

The Nebraska Supreme Court held the trial court did not err in failing to evaluate Employee’s loss of use of his leg without his prosthesis attached since Employee did not lose all functional use of his left leg.  The court reasoned Employee, without his prosthesis, could pick his left leg up waist high, crawl up stairs, climb ladders, and navigate uneven terrain by crawling, scooting, or sliding.  Accordingly, the trial court was not in error in determining Employee’s loss based on the use of his prosthesis.   

To bolster his argument in favor of an award for a total loss of use for his left leg, Employee turned to the practical intents and purposes test, which derived from Pennsylvania, and was cited in Jacob v. Columbia Ins. Group, a Nebraska Court of Appeals case.  2 Neb. App. 473, (1994).  In essence, the test has been used to determine whether a disability to a claimant’s body renders such a body part to serve “no real purpose.”  Applied in Melton, Employee argued he sustained a 100 percent loss of use of his left leg.  However, the court held Employee’s left leg could not be rendered “useless” because he retained enough strength in his left leg to successfully use the prosthetic device by being able to bend his knee and support weight on the residual limb.  Therefore, although Employee’s leg was not useless, Employee suffered an additional twenty percent loss of function in his leg that went beyond what would have otherwise been expected after amputation of his left leg below the knee.   

Finally, Employee asserted he was entitled to consecutive amounts of disability benefits for the loss of his five toes, the loss of his left foot, and the total loss of his left leg under Neb. Rev. Stat. Ann. § 48-121(3).  However, the court directed Employee to the four corners of the law and held § 48-121(3) explicitly stated a below-the-knee amputation was the equivalent of a loss of a foot and did not equate to the loss of one’s entire leg.  The court turned to the policy behind the law and reasoned a party may not have double recovery for a single injury.  Accordingly, Employee’s loss of his leg below-the-knee would obviously include the loss of his toes under § 48-121(3) since the legislature limited the loss to the foot.   

Ultimately, the court upheld the trial court’s determinations that Employee did not suffer a total loss of use of his leg because it appropriately compensated Employee for the functional loss of his leg that was not already accounted for in the compensation for the loss of his foot.  Further, the court upheld the trial court’s award of loss of use benefits for the leg and refused to extend double recovery to Employee.   

This article was prepared by Erickson Sederstrom’s law clerks Alison Clark and Rob Toth under the direction of employment attorney Bonnie Boryca, who can be reached at 402-397-2200.

Duty to Bargain on Residency of Officer in CBA between Police Union and City of York?

In Fraternal Order of Police v. City of York, the Nebraska Supreme Court considered whether the City of York’s failure to reach an agreement with the Fraternal Order of Police (FOP) regarding a requirement of residency in York County to obtain a promotion at the York Police Department was a prohibited labor practice.  309 Neb. 359 (2021).  The Court found that although it was not specifically mentioned in the collective bargaining agreement, the residency requirement was within the ‘compass’ of the agreement, and therefore no further bargaining on the issue was needed. Id. at 374.

The FOP is a labor organization/union that serves the purpose of dealing with public employers (here, the City of York Police Department) concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.  Id. at 361.  On January 9, 2019, the FOP entered a collective bargaining agreement with the City of York that gave the York Police Department the right to determine, establish, and implement policies for employee promotions.  Id. at 362.  The agreement made no specific mention of the Department’s right to require officers to reside in York County to be promoted.  Id.

After the Department directed an officer to sign an agreement requiring him to obtain residency in York County upon being promoted to sergeant, the FOP claimed such a requirement was not bargained for in their agreement with the City of York.  Id. at 364. The union then demanded bargaining of the residency requirement, alleging that it was a mandatory subject of bargaining under the Industrial Relations Act (IRA).  Id.  The City declined to bargain, and the FOP filed their petition before Nebraska’s Commission of Industrial Relations (CIR).  Id. at 366. 

At trial, the parties stipulated that the residency requirement for promotion was a mandatory subject of bargaining.  Id. at 363.  However, the CIR dismissed the claim holding that the matter was addressed by the collective bargaining agreement between the City of York and the FOP, and therefore the parties had no further obligation to bargain the issue.  Id. at 369.

The Nebraska Supreme Court affirmed the CIR’s decision, further noting that while broad and vague statements that employers “may do whatever they please” are insufficient to establish that all topics are covered by a collective bargaining agreement, such an agreement does not need to specifically mention every subject in order for it to be covered by the agreement.  Id. at 373.

This article was drafted by Erickson Sederstrom’s law clerk, Joe Johnson, with assistance and supervision of our employment law attorney Bonnie M. Boryca. She can be reached at 402-397-2200 or boryca@eslaw.com.

Travel by Private Aircraft

For economic and health reasons, it seems that business and personal travel by private aircraft is at an all-time high. While the appeal of this form of travel tempts many people, passengers should be aware that there is more to private flying than showing up at an airport with bags in hand. Safety, legal and financial considerations must also be taken into account. Navigating through these considerations requires a level of experience and sophistication that is often beyond the typical traveler’s reach. Accordingly, it is imperative for individuals and businesses wishing to travel on private aircraft to assemble the right team before embarking on a venture into the wild blue yonder.

 Most often, flying a non-owned, private aircraft is accomplished through “dry leasing” an airplane from an owner who wishes to offset operational costs. In short, this means that the lessee directly hires the flight crew and is ultimately responsible for initiating, conducting and terminating any given flight. Collectively, these responsibilities are defined as exercising “operational control.” And although a written dry lease will usually be drafted to define the rights and responsibilities of the parties, the Federal Aviation Administration (“FAA”) makes it clear that even more important than what’s in a written dry lease is how the aircraft is operated. Specifically, the FAA released an Advisory Circular, 91-37B, meant to give lessees information in order to recognize and avoid agreements where operational control is not clearly maintained by the lessee. 

Using AC91-37B as the gold standard, the FAA has increased its enforcement efforts against parties entering into “sham dry leases.” Such leases are meant to give the appearance of a true dry lease; however, the intent of the parties may be to evade FAA scrutiny over the safe operation of air travel that might otherwise fall under commercial air travel. Where the FAA suspects sham dry leases and/or illegal commercial charter operations, the FAA has the authority to investigate and penalize violators through civil, and sometimes criminal penalties. Additionally, the FAA can suspend or revoke certificates of involved flight crew members. Hence, it’s not just lessors and lessees who should be concerned about compliance with FAA regulations when private air travel is concerned. 

At Erickson|Sederstrom, our aviation group has the tools to help clients involved in private air travel. From consulting to acquisition and operation, we can guide you through this complex area of law safely and effectively. Call today to see how we can help.

COVID-19 Impacts Ordinary Course Defense When Defending Preference Claims

As a business owner or manager, it is frustrating to receive a bankruptcy preference demand letter.  Unless you want to pay the preference demand, you have little choice but to undertake a defense.  Unfortunately, the business disruptions caused by the COVID-19 pandemic have further complicated the legal landscape surrounding defense of preference claims.  The purpose of this article is to briefly summarize preference procedures, explain the COVID pandemic impact regarding preferences, and discuss some general strategies for businesses responding to or defending against preference claims.

I.                     Preference Process

Transfers made by a business within 90 days of it filing a bankruptcy petition under the Bankruptcy Code are potentially subject to a preference action.  In many cases, such transfers consist of payment for goods or services received by the bankrupt party in the months prior to filing its bankruptcy petition.  The preference statutes are intended to prevent the bankrupt party from preferentially transferring assets to favored parties or individuals before the bankruptcy is filed, to the detriment of other creditors, during the time leading up to the bankruptcy (when the business is likely insolvent). 

Bankruptcy trustees and debtors-in-possession have the right to seek the return into the bankruptcy estate of preferentially transferred assets or funds, so the assets can be allocated and distributed as part of the orderly bankruptcy process.  11 U.S.C. § 547(c)(2).  Typically, a preference claim begins with a demand letter being sent to the party who received the funds, demanding that payment be made back to the bankruptcy estate.  If the preference claim is not resolved based upon the demand letter, the matter may progress to an adversary proceeding, a lawsuit within the bankruptcy case for recovery of the alleged preference funds.

The most common defense against preference claims is that the transfer at issue to the bankrupt party was made “in the ordinary course” of business.  Proving the “ordinary course’ defense requires the party defending against the preference claim to show:  (A) the transfer was made in the ordinary course of business or financial affairs of the debtor and the transferee or (B) the transfer was made according to ordinary business terms.  11 U.S.C. § 547(c)(2).  (A) requires a subjective comparison of the historical transactions between this debtor and this creditor.  (B) requires an objective comparison with other transactions between parties in the same industry.  Either way, the question is whether the alleged preferential transfer was “ordinary”. 

II.                   COVID Impact

With the impact of COVID-19 since early 2020, very little has been “ordinary” about how many, or even most, businesses or industries have functioned.  This lack of normality makes it more difficult to present and prove the “ordinary course” defense.  When a course of dealing between the debtor and creditor, or even an entire industry, has been disrupted due to impacts of COVID-19, parties defending against preference actions need to think creatively.  Referring back to the business relationship between debtor and creditor preceding the 90 day preference period might not provide much value, if that time frame was influenced by COVID-19 effects. 

 III.                 Defense Perspective

When defending against preference claims, creditors preparing a defense need to take a broader look than in the past and be prepared to present extensive evidentiary support.  Developing and presenting an effective defense requires the assistance of experienced counsel to identify the best way to identify and present supporting evidence.

Questions for the creditor to evaluate include:

What relationship did this debtor and this creditor have prior to COVID-19 impacts and what changed?  How can these separate periods be quantified?  When was the last time their business relationship was “ordinary”?  If the transfer that is the subject of the preference claim was affected by COVID-19, what still makes it “ordinary”?

Was this transfer “ordinary” pursuant to a broader analysis of industry practices?  How can the industry be redefined to show what is “ordinary”?

As discussed above, defending against preference claims requires a solid understanding of relevant bankruptcy law, and effective application of bankruptcy law to the current business environment.  Erickson|Sederstrom’s bankruptcy attorneys are ready to help if your business needs to defend against a preference demand. 

New Nebraska Law Protects Culture-Specific Hairstyles

Recently enacted into law, Legislative Bill (LB) 451 amends the Nebraska Fair Employment Practices Act (NFEPA) to expand the definition of “race” to include protection against discrimination for characteristics such as skin color, hair texture, and protective hairstyles. Governor Pete Ricketts signed the legislation on May 5, and it will take effect 90 days after the current legislative session adjourns. Let’s examine the new amendment.

What new legislation covers

LB 451, introduced by Senator Terrell McKinney of Omaha, passed the legislature by a 40-4 vote (with five senators not voting) on April 29. The intent was to protect individuals against race discrimination based on characteristics associated with race, culture, and personhood, including natural and protective hairstyles. The law defines “protective hairstyles” to include braids, locks, and twists.

In legislative hearings and floor debate, the bill’s supporters claimed employers have forced some employees to straighten or trim their hair or cut off braids and dreadlocks to maintain their employment. Under the new law, employers can’t discriminate or base employment decisions on an individual’s culture-specific hair texture or hairstyle.

You’ll still be able to maintain bona fide health and safety standards that regulate characteristics associated with race and culture-specific hairstyles, however, if you can show:

·         A safety policy or grooming standard is necessary to guarantee employees’ health or safety;

·         You adopted the standard for nondiscriminatory reasons;

·         It’s applied equally; and

·         You’ve engaged in good-faith efforts to reasonably accommodate a particular applicant or employee with regard to the required standard.

For employers in most industries, however, it will likely be very difficult to establish a need for an exception to the standard.

Finally, the new law contains an exception for the Nebraska State Patrol, county sheriff’s departments, and various other law enforcement agencies as well as the Nebraska National Guard, which may continue to impose their own dress and grooming standards.

What happens next

The Nebraska Legislature is expected to end its session in very late May or early June. Therefore, the new law will go into effect sometime around September 1, 2021.

It’s too early to project the law’s full impact or the number of new employment discrimination claims it will likely generate. We may have to wait a few years to see how the claims are processed and interpreted by the Nebraska Equal Opportunity Commission and the courts. Of course, we’ll provide updates as necessary.

Attorneys Mark Schorr, Bonnie Boryca, and Heather Veik lead Erickson Sederstrom’s labor and employment group and can be reached at (402) 397-2200.