Back to the Basics - No retaliation claim if no protected activity

Retaliation claims are among the most numerous types of employee claims processed through the Equal Employment Opportunity Commission and state EEO agencies. Central to these claims are whether an employee engaged in protected activity and how the employer responded to it. A recent Eighth Circuit case involving Nebraska law on retaliation is exemplary. 

In Walker v. First Care Mgmt. Grp., LLC, the United States Court of Appeals for the Eighth Circuit held that employees’ conduct in response to a facility resident’s abuse upon another facility resident did not constitute protected conduct to support a retaliation claim under Nebraska law.  27 F.4th 600 (8th Cir. 2022). 

Two caregivers employed by a retirement community witnessed a resident sexually assaulting other residents several times.  Per company policy, employees had to report resident abuse immediately, by reporting any incident to a supervisor, completing an incident report, and making a note in the resident’s chart.  The two employees claimed they reported observing the abuse, but on at least one occasion, they waited to make their report until day after the incident. 

The Nebraska Department of Health and Human Services (“DHHS”) responded to an anonymous complaint about the resident’s abuse and made an unannounced site visit of the facility.  Shortly after, a retirement community manager claimed she was unaware of the abuse that led DHHS to the facility.  Several employees stated the manager must have been aware of the abuse because the employees reported such abuse.  Upon completion of the visit and a staff meeting, the two caregiver employees were terminated. 

The employees filed suit alleging, among other claims, unlawful retaliation after engaging in a protected activity.  The retirement community moved in the District Court for summary judgment, which was granted, resulting in a judgment against the employees and dismissing their claims.  The employees appealed. 

On appeal, the Eighth Circuit considered whether the lower court erred in granting the retirement community’s motion for summary judgment.  Under Nebraska law, an employer may not discriminate against an employee who opposed or refused to carry out any unlawful action of the employer.  Neb. Rev. Stat. § 48-1114(1)(c).  In other words, employees claiming retaliation must demonstrate that they opposed an unlawful practice of their employer. 

The two employees alleged engaging in the following activities: the report made to DHHS, internal complaints to supervisors about the abuse, and confronting a manager about her alleged ignorance of their report of abuse.  However, none of these acts were found to have opposed unlawful activity of the retirement community. Nor did they amount to acts of refusing to carry out an unlawful action. Thus, there was no protected activity on which to base a retaliation claim.  Accordingly, the Eighth Circuit upheld the summary judgment because the employees’ conduct in response to the abuse of the facility resident did not constitute protected conduct under Nebraska law. 

Obviously, the facts of the case suggest egregious acts of abuse. However, a retaliation claim is closely focused on the activities of employees and the response of the employer. Any time an issue arises, employers are cautioned to involve their attorneys at an early stage to avoid or minimize potential claims of retaliation and to appropriately respond to abuse, to complaints, or to protected activity of employees.

Thanks to Rob Toth, current law clerk and joining E|S as an associate attorney in the fall of 2022, for assistance in preparing this article.

Bonnie Boryca and E|S employment attorneys can be reached at 402-397-2200.

Law or equity – whether a jury decides the claim in light of the equitable ‘clean up’ doctrine

In Schmid v. Simmons, the Nebraska Supreme Court held that the common law “clean up” doctrine is still good law, discussed when a party is entitled to a jury trial on civil disputes, and clarified how a litigants may waive the right to jury trial on legal claims.  311 Neb. 48 (2022).   

The Nebraska Constitution guarantees the right to trial by jury. However, on civil matters, which are generally disputes about money or other non-criminal matters, the state Constitution allows the Legislature to modify this right to allow juries less than 12 to decide matters in courts inferior to the District Courts, and, in such cases, the decision may be rendered by five-sixths majority of the jury.  Neb. Const. art. I, § 6.

 Litigants still have a right to seek a jury trial on legal claims—those involving disputes over specific real or personal property and money damages—but not on equitable claims, which may be tried “to the bench” without a jury.  Whether a claim is legal or equitable rests upon the “main object” of the claim, which is shown by the issue the lawsuit seeks to resolve.  

 Under the “clean up” doctrine, a court may determine equitable issues and then “clean up” other legal issues in the case, even where a defendant asserts a legal claim as a defense or counterclaim.  The purpose of this doctrine is to preserve judicial efficiency by allowing the same court to hear and determine all disputed issues in a single lawsuit. 

Applied to the facts, the Court found proper the district court’s decision to resolve plaintiff’s equitable claims (quiet title, declaratory judgment, LLC accounting, and judicial dissolution) and then “clean up” defendant’s amended counterclaims seeking damages for breach of contract, a legal claim.  Because the District Court retained jurisdiction to quiet title and determine rights of LLC members, and because the parties agreed the matter before the court was equitable, the District Court correctly applied the “clean up” to resolve any remaining legal claims all equitable claims were decided.  

The Court further clarified the manner in which parties may waive the right to trial by jury on a breach of contract action, or with the court’s agreement in other actions, finding that waiver could be accomplished in three ways: (1) by consent of a party where the other party fails to appear, (2) by written consent delivered to the clerk of court, or (3) by oral consent in open court on the record.  Neb. Rev. Stat. § 25-1126.

 E|S attorneys are experts in civil trials, whether to a jury or to a judge, whether in equity or common law. Bonnie Boryca and E|S litigators can be reached at 402-397-2200. 

Thanks to E|S law clerk Ross Serena for contributing to the above article.

Medicinal Cannabis in Nebraska May be Coming Soon

A registered ballot question committee, Nebraskans for Medical Marijuana, has been working to gather signatures to place two initiatives on the Nebraska ballot in November later this year.   If these initiatives are added to the ballot, and confirmed by a majority of voters, they would serve to legalize the possession and use of cannabis for medicinal purposes in Nebraska.

The legalization of cannabis for medicinal purposes would be a significant departure from Nebraska’s historic stance against it.  While the Nebraska Hemp Farming Act was passed in 2019, the intent of this legislation was to legalize industrial hemp in Nebraska, and not the use of cannabis for any of its psychoactive properties (for medicinal use or otherwise).  In addition, several medicinal cannabis bills have been proposed and failed in the unicameral in the past few years.  Also, in 2020, a medicinal cannabis measure that would have been on the 2020 ballot was invalidated by the Nebraska Supreme Court after a determination that the initiative violated Nebraska’s single subject rule.  

However, the tide may be changing.  Many former cannabis opponents have recently appeared to alter their stance on medicinal cannabis.  For example, in January 2022, former State Senator Mike Groene, who had previously been outspoken against the subject, sponsored LB1275, which would legalize cannabis use for a limited number of medical conditions and authorize a defined number of dispensaries to operate in the state. In addition, Governor Ricketts (who appeared in an ad as recently as December 2021 advocating against medicinal cannabis) recently stated that he was “open to learning more about [LB1275]”.   Advocates for medicinal cannabis in Nebraska believe that these shifting viewpoints are evidence that cannabis opponents believe they can no longer keep the public sentiment on the issue at bay, and such opponents would rather control medicinal cannabis through legislation instead of a voter approved constitutional amendment.

In anticipation of medicinal cannabis becoming a reality in Nebraska, potential cultivators, processors, retailers, and other participants have already begun making plans for this possible new market.Since cannabis that is used to treat medical conditions is currently illegal under federal law (making transportation across state lines illegal), such cannabis is typically grown and processed in the state where it will be sold.In Nebraska, legal medical cannabis would likely result in the construction and/or leasing of large-scale cultivation and processing facilities where medicinal cannabis goods would be grown and produced, as well as new markets for the transportation, storage, and retail sale of such goods.We are currently advising clients on a multitude of issues related to these new markets, including banking, leasing, and transportation. If you have any questions about cannabis issues, the attorneys at Erickson | Sederstrom can assist you. Attorneys Shay Garvin or Andrew Collins can be reached (402) 397-2200.

Nebraska Updates Vaccine Mandate Legislation

On February 25, 2022, the Nebraska Legislature passed LB 906, which addresses COVID-19 vaccine mandates implemented by Nebraska employers.  It allows for certain exceptions for employees who complete a form prepared by the Nebraska Department of Health and Human Services for medical or religious objections, and also permits employers to require wearing of masks and periodic testing at employer expense.  The bill has an emergency clause which means that as soon as it is signed by the Governor, it becomes fully effective.  The details of this new legislation are set out below.

The new COVID-19 vaccine mandate legislation applies to all private Nebraska employers regardless of size, as well as the State of Nebraska, government agencies and all political subdivisions.  However, it should be emphasized that Nebraska employers in the healthcare industry are already subject to the Federal vaccine mandate applicable to healthcare employers, which will take precedence over the new Nebraska COVID-19 legislation.  It should also be emphasized that LB 906 only applies to COVID-19 vaccinations, and no other employer mandated vaccinations. 

The new law does not apply to the United States and other Federal agencies, Indian tribes, and bona fide private membership clubs exempt from taxes under the Internal Revenue Code.

It requires the Nebraska Department of Health and Human Services to develop a vaccine exemption form for individual employees to submit to claim an exemption from receiving a COVID-19 vaccine.  The form is required to contain two separate potential declarations:  (1) that a certified healthcare practitioner has provided the individual with a signed written statement that receiving a COVID-19 vaccine is medically “contraindicated for the individual”, or that “medical necessity” requires the individual to delay receiving a COVID-19 vaccination; or (2) receiving a COVID-19 vaccine would conflict with the individual’s “sincerely held religious belief, practice, or observance.”

Once this new law takes effect, any Nebraska employer that requires applicants or employees to be vaccinated against COVID-19 must allow for an exemption to the COVID-19 vaccine requirement for any individual who provides the employer with the completed vaccine exemption form, and for any individual claiming the exemption based upon the statement of a healthcare practitioner, a copy of the health practitioner’s signed written statement.

Nebraska employers may require any employee granted an exemption under this new law to be periodically tested for COVID-19 at the employer’s expense, and to wear and use masks or other personal protective equipment provided by the employer.

This differs substantially from recently proposed Federal vaccine mandate legislation as well as the current Federal vaccine mandate applicable to healthcare employers.  Specifically, other vaccine mandates and proposed legislation provide(d) that an employee seeking to avoid the vaccination mandate and be granted an exception would assume the cost of periodic testing in order to be exempt from the vaccination requirement.  Nebraska employers who desire to exercise their right to mandate COVID-19 vaccinations are now faced with bearing a considerable cost of periodic testing for employees who submit the exemption form.  Business organizations and the Chambers of Commerce were opposed to this provision, but were unsuccessful in keeping it out of the final version of LB 906. 

Given that the COVID-19 outbreak is waning, and with much of the population already vaccinated, or immune due to having had COVID, this Legislation may just be a solution in search of a problem.  However, the Legislation passed by a vote of 37-5, with 5 abstentions, so there was obviously a strong feeling among the majority of Senators in the Nebraska Legislature that a law limiting employer COVID-19 vaccine mandates was required at this time.

It will be interesting to see how this new law develops, and how many Nebraska employers determine that they will either implement or continue an existing COVID-19 vaccination requirement.  Employers in the healthcare industry are still covered by the Federal vaccine mandate applicable to healthcare organizations. 

One interesting aspect is the fact that any employee who seeks to declare a religious exemption must simply fill in the form stating that receiving a COVID-19 vaccination would conflict with their “sincerely held religious belief, practice or observance.”  There is no threshold requirement to establish such beliefs, which differs considerably from the law in the area of religious discrimination in employment, which requires that any individual seeking to assert a religious discrimination claim establish or prove that they are actually a member of a particular religion, and an active participant in the particular religion’s practices and activities.  For purposes of the new law on COVID-19 vaccinations in Nebraska, it is clear that an employee seeking an exemption must simply fill out the form and include that particular section in seeking an exemption.

As noted above, LB 906 has an emergency clause, so it will go into effect as soon as it is signed by the Governor, which will likely be early in the week of February 28th.  Therefore, any Nebraska employer that currently has a COVID-19 vaccination mandate or is considering implementing one, should take immediate steps to comply with this new Nebraska law.

E|S Successful Before Nebraska Supreme Court In Construction Site Accident Case

In Porter v. Knife River, Inc., the Nebraska Supreme Court affirmed the district court for Thurston County’s grant of summary judgment to D.P. Sawyer, Inc., a traffic control and highway striping company. 310 Neb. 946 (2022).  Erickson | Sederstrom’s attorneys aided in the summary judgment and appeal process. 

In the case, the administrator of decedent’s estate sued D.P. Sawyer, along with several other construction contractors, alleging negligent maintenance of a construction site.  The administrator’s claim arose when an Omaha Tribal Police officer bypassed warning signals and road barricades along a highway closed for construction.  The officer then tragically collided with a large crane parked on the closed highway.  The administrator argued the contractors were liable for negligence because the crane was left on the highway without adequate illumination, barricades, or other traffic control, which allegedly caused decedent’s death. 

E|S attorneys argued defendants were entitled to summary judgment because the administrator failed to prove a prima facie case of negligence and that the decedent assumed the risk of harm involved when he bypassed the road barricades.  The Honorable John E. Samson, District Judge, agreed, granting summary judgment in favor of the defendants.  The administrator appealed.

The Nebraska Supreme Court affirmed the district court’s grant of summary judgment, determining that barricades placed at the termini of a closed highway need not absolutely prevent entrance to the construction area.  Highway contractors are not statutorily required to place additional signals at the termini of a closed highway notifying drivers that the highway utilizes dangerous machinery and may contain potential defects.  This is because warning signals and barricades at the termini thereof already give drivers notice that the highway is under construction and the condition of the highway itself shows that it is under various stages of completion. 

Accordingly, the Nebraska Supreme Court upheld the district court's order granting summary judgment because they offered evidence showing they exercised ordinary care under Nebraska law. 

Erickson | Sederstrom’s experienced litigation group has a long history of success in defending claims arising out of construction projects, vehicle accidents, and all types of injury accidents.  Ross M. Serena or E|S’s litigation attorneys can be reached at 402-397-2200.

Thanks to E|S law clerk Rob Toth for his assistance in preparing the above analysis!

Arbitration versus Litigation

The terms ‘arbitration’ and ‘litigation’ are often paired off against each other. When or if a dispute arises, we recommend knowing the general differences and similarities between these procedures.  

Litigation is a lawsuit filed in a court of law. People may be self-represented, but more often, attorneys represent their clients in moving through the phases of litigation. Phases include filing a complaint (or petition, depending on the court and type of issues involved), answer, discovery, motions, and may eventually involve a trial to a judge or jury.

 Arbitration is like litigation in that it is a process to resolve a dispute between two or more parties. It is a private means of resolving disputes. Arbitration may occur non-publicly. It usually takes place when parties have agreed in advance, through a written contract, to arbitrate future disputes on a specified subject matter, in lieu of bringing a lawsuit in court. The arbitrators are paid by the parties to assist in resolving the matter. Pros of arbitration can be that it moves more quickly, can be less expensive, and results in a final resolution earlier.  A major con for some is that there is no means of appeal or review after an arbitrator enters an award. The exception to that would require showing deceit or fraud or major errors in the fairness of the process, within very limited circumstances.

 More and more, large employers may require new employees to enter arbitration agreements in the onboarding process at start of employment. They will often cover possible future employment-related disputes. Employees should think carefully about rights they give up doing so. Employers should think carefully about how to draft these kinds of agreements and about how to present them to employees for their review and agreement. Courts and policy makers in our legislatures continue to consider how, whether, and to what extent these kinds of arbitration contracts should be enforced.

 If you are faced with arbitration in lieu of litigation, or are considering entering an agreement to arbitrate claims, or would like to craft a valid arbitration clause for your business, an attorney may be able to help. An experienced attorney can ensure your rights are fully addressed and you are fully informed about what you give up and what you gain in arbitration versus litigation.

 Bonnie Boryca and Erickson | Sederstrom, PC’s team of attorneys are well-versed in these issues. 

Partner Matt Quandt granted summary judgment in Sarpy County

Matt represented the City of Springfield, Nebraska regarding a single-vehicle injury accident that occurred within city limits. Plaintiff sued the City alleging:

• Improper intersection control under the Manual on Uniform Traffic Control Devices;

• Failing to reasonably place a “Stop” or “Yield” sign at the uncontrolled “T” intersection;

• Failing to place visible traffic control devices at an intersection with inadequate sight distance (Clear Sight Triangle) for uncontrolled approaching vehicles;

• Inadequate guidance for motorists approaching the uncontrolled “T” intersection;

• In constructing a retaining wall in excess of six feet high when the Defendant knew, or in the exercise of reasonable care should have known that said retaining wall would be unreasonably dangerous and/or present a hazard for members of the public;

• In constructing a retaining wall in excess of six feet high without providing a barrier at the top of said retaining wall to deter pedestrians, bikers and motorists from falling over the edge of the retaining wall when the Defendant knew or in the exercise of reasonable care should have known that said retaining wall would be unreasonably dangerous and/or present a hazard for members of the public;

• In failing to warn members of the public of the existence of the retaining wall hazardous drop off in excess of six feet;

• Violation of city ordinance regarding retaining wall height;

• Failing to provide a forgiving roadside suitable for the safe recovery and control of errant vehicles leaving the street.

Plaintiff claimed over $135,000 in medical bills, past and future lost wages, and permanent injury and disability.

With the help of Creighton law clerk Ali Clark, Matt filed a Motion for Summary Judgment. They argued that the City has discretionary function immunity, the purpose of which is to "prevent judicial 'second-guessing' of legislative and administrative decision grounded in social, economic, and political policy through the medium of an action in tort," and that Plaintiff was the sole proximate cause of the accident. After full briefing and oral arguments, Hon. George A. Thompson agreed and held:

• Defendant has sovereign immunity under the Political Subdivision Tort Claims Act; and

• Defendant was not the proximate cause of the accident.

The District Court of Sarpy County granted Defendant’s Motion for Summary Judgment and dismissed Plaintiff’s Complaint with prejudice.

Erickson | Sederstrom’s experienced litigation group is well-versed in defending claims brought under the Political Subdivision Tort Claims Act. Don’t hesitate to contact us with any litigation needs.

Trucking Accidents, Brokers, and Federal Preemption

In catastrophic trucking accidents, plaintiffs don't just limit their claims to the driver. More commonly, they try to sue the motor carrier, shipper, broker(s), etc. However, recent federal court rulings provide some insight and strategy for dismissing claims against brokers.

In Gillum v. High Standard, LLC, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020), Scott Gillum was hit by a tractor-trailer and sued the driver, the motor carriers involved in hiring and training the driver, and the freight broker that selected the motor carriers. The freight broker, which Gillum accused of negligently hiring the motor carriers, moved to dismiss under the argument that federal law completely preempts state common law negligence claims against a freight broker. The federal district court agreed, concluding that the Federal Aviation Administration Authorization Act (FAAAA) completely preempts simple and gross negligence claims related to a freight broker’s services.

There was a split amongst courts that previously addressed this issue. The court considered the existing authority, looked at the plain language of the pertinent federal statutes, the limited statutory exceptions, Congressional intent, etc. The court held that “the FAAAA completely preempts Plaintiff's negligence claims . . . where that negligence ‘relates to’ the services the broker provides.”2020 WL 444371 at *7.

In essence, Plaintiff claims that [the broker] was negligent in arranging for the transportation of property between motor carriers. These allegations “go to the core of what it means to be a careful broker.” Krauss, 2018 WL 2063839, at *5 (holding FAAAA completely preempted claim against freight broker under negligent hiring theory because careless selection of a carrier is a core service of a freight broker); see also Georgia Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857 (N.D. Ill. Oct. 26, 2017) (“While the services of a freight broker do not include the actual transportation of property, they are focused on arranging how others will transport the property; these services, therefore, fall within the scope of the FAAAA preemption.”).

. . .

The Court finds most persuasive the line of cases that have held negligence claims against freight brokers are preempted under the FAAAA because “[e]nforcing state negligence laws that would have a direct and substantial impact on the way in which freight brokers hire and oversee transportation companies would hinder” the objective of the FAAAA in deregulating the shipping and transportation industry.

. . .

Plaintiff's claims against [the freight broker], therefore, seek to enforce a duty of care related to how Defendant arranged for the transportation of property between [the motor carriers], which—Plaintiff admits—are the very “services” Defendant provides as a federally-licensed freight broker. Such a claim “falls squarely within the preemption of the FAAAA.” Creagan, 354 F. Supp. 3d at 813.

. . .

Such a holding comports with the impetus behind the FAAAA's preemption provision because, in essence, Plaintiff is seeking “to reshape the level of service a broker must provide in selecting a motor carrier to transport property.” Miller v. C.H. Robinson Worldwide, No. 17-cv-408, 2018 WL 5981840, at *4 (D. Nevada Nov. 14, 2018), appeal docketed, No. 19-15981 (9th Cir. May 7, 2019). To avoid negligence liability, a broker like Defendant would need to inspect each motor carrier's background and the ways in which the motor carrier investigates, hires, and trains its own drivers, and “such additional inspection would result in state law being used to, at the least indirectly, regulate the provision of broker services by creating a standard of best practices, and ultimately contravening Congress's deregulatory objectives in enacting the FAAAA.” Id. (citing Rowe, 552 U.S. at 370).

Gillum, 2020 WL 444371 at *4, 5, 6.

Erickson | Sederstrom was recently involved in a similar case. The Southern District of Iowa held:

Plaintiffs’ negligence claim against NTC Logistics relates directly to NTC Logistics’ services as a broker and their arrangement of the transportation of property. Thus, the [Federal Aviation Administration Authorization Act] preempts it. Further, the FAAA’s safety regulation authority exception does not apply to Plaintiffs’ claim because the claim does not constitute a regulation of motor vehicles. Because Plaintiff’s claim against NTC Logistics falls under preemption provision of the FAAA and the safety regulatory exception to preemption does not apply, Plaintiffs fail to state a claim upon which relief may be granted.

Eugene Flanagan v. BNSF Railway Co. et al, No. 1:21-cv-00014-RGE-HCA (S.D. Iowa Nov. 19, 2021).

There is still a divide among some federal district courts, but current trends seem to be giving freight brokers detailed and persuasive preemption opinions to use for dismissal.

Matt Quandt is a member of Erickson | Sederstrom’s experienced litigation group. His practice concentrates on catastrophic trucking accidents. Mr. Quandt is a member of TIDA (the Trucking Industry Defense Association) and offers rapid response services. He is licensed in state and federal courts in Nebraska, Iowa, Missouri, and Kansas.

Lingering Provisions of The CARES ACT That May Impact Iowa and Nebraska Landlords

In March of 2020 the Coronavirus Aid, Relief and Economic Securities Act (“CARES Act”) was signed into law. The moratorium thereunder originally had a sunset date of July 25, 2020. Congress chose not to extend this deadline, and when the CDC tried to do so by administrative order, the Supreme Court of the United States invalidated it. See Alabama Association of Realtors v. Department of Health and Human Services, 21A23 (Aug. 26, 2021). However, certain portions of the CARES Act did not include any such sunset dates and will continue to impact Nebraska and Iowa landlord until Congress legislatively puts an end to them.

Nebraska and Iowa Landlords should be advised that their normal pre-pandemic practices for recovery of unpaid rents and evictions based upon the same may now be affected by provisions of the CARES Act found in section 4024. If a tenant resides within any of the “covered property” defined under subsection 4024(2), then a landlord will need to provide a thirty (30) day notice before any writ of restitution can be executed and the tenant evicted. “[C]overed property” [under the CARES Act] means any property that—

(A) participates in—

(i) a covered housing program (as defined in section 41411(a) of the Violence Against Women Act of 1994 (34 U.S.C. 12 12491(a))); or

(ii) the rural housing voucher program under section 542 of the Housing Act of 1949 (42 U.S.C. 1490r); or

(B) has a—

(i) Federally backed mortgage loan; or

(ii) Federally backed multifamily mortgage loan.

See Public Law No. 116-136, § 4024(2). Even though it does not affect every landlord and tenant situation, this definition is broad enough to implicate a great number of them.

However, courts across Nebraska and Iowa have interpreted the application of these rules differently when “covered property” is implicated. Some allow for normal notices and cure periods for non-payment provided for by state statute (3 days in Iowa and 7 days in Nebraska; see Iowa Code Ann §562A.27; see also Neb.Rev.Stat. §76-1431), but then delay the issuance of a writ of restitution until thirty (30) days from the original notice, while others require actual service of a thirty (30) day notice for a landlord to avoid having to start the entire process over again. Therefore, it is important that Nebraska and Iowa Landlords obtain proper advice before instituting these actions in this current landscape in to avoid confusion, delay or added expense.

2022-2023 Occupation Tax Report

The 2022-2023 Occupation Tax Reports (“OTRs”) are now due for all domestic and foreign Nebraska corporations. OTRs are biennial reports that must be filed with the Nebraska Secretary of State by March 1, 2022. If the report is not filed, along with the applicable fee, by April 15, 2022, the entity will be administratively dissolved by the Nebraska Secretary of State.

The OTRs may be filed online at the Nebraska Secretary of State website or by mail. The Secretary of State has begun mailing out reminder cards to the registered agent for each domestic and foreign Nebraska corporation. If you have not received your notice, make sure your records are up to date with the Nebraska Secretary of State.

If you would like assistance in filing your OTR or with updating your records with the Nebraska Secretary of State, the corporate attorneys at Erickson Sederstrom can provide you with the help you need to assure that your entity remains active and in good standing with the State of Nebraska.

Supreme Court Blocks Employer Vaccine Mandate but Allows Health Care Mandate

On January 13, the United States Supreme Court, in a 6-3 decision, ruled that the OSHA ETS (Emergency Temporary Standard), requiring private employers with 100 or more employees to impose vaccine and testing mandates, is unlawful and exceeds OSHA’s authority. The Supreme Court allowed a vaccine mandate for health care facilities that accept Medicare or Medicaid payments to remain in effect.

In an unsigned opinion, the Court said “Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly.” “Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category,” the court wrote. Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented. “In the face of a still-raging pandemic, this Court tells the agency charged with protecting worker safety that it may not do so in all the workplaces needed,” their dissent said.

Separately, the Court issued an opinion addressing the administration’s vaccination rules for health-care workers. A 5-4 majority upheld the health care worker vaccination rules. In another unsigned opinion, the Court said “We agree with the Government that the Secretary’s rule falls within the authorities that Congress has conferred upon him.” Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett filed a dissent.

Following the decision, the Biden administration encouraged employers to voluntarily enact COVID-19 vaccination and testing requirements.

Erickson | Sederstrom’s experienced employment and labor law attorneys are ready to help manage 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.

Removing Minority or Legacy Shareholders the Right Way

The best practice for dealing with minority shareholders is a well thought out buy-sell agreement which includes simple to follow and execute buy-out or redemption provisions.  But what if your small business (for example a multigenerational agribusiness or family farm) has legacy shareholders who are not subject to a buy-sell agreement?  Even worse, what if those shareholders are irrational, create conflict and/or are not contributing in a meaningful way to the business?  Most state corporate statutes (including Nebraska) contain a simple solution by allowing a squeeze-out maneuver through the creation of fractional shares (i.e. script) which in turn allows the corporation to simply cancel the minority shareholder’s shares in exchange for tendering cash equal to the fair value of their stock.  This can be a win-win for family and small businesses because it allows the business to move forward without having to deal with issues created by the presence of the minority shareholder and also provides a fair mechanism for valuing the shares of minority shareholders when their position is liquidated.  You should consult with an experienced attorney about the ins and outs of executing this maneuver if you want to remove a minority shareholder.  Often a simple letter from your counsel to the minority shareholder’s counsel is all that is needed to resolve your disputes with the minority shareholder.

December 20 Update Regarding Vaccine Mandates

Erickson|Sederstrom provides this update regarding the status of various vaccine mandates issued by the Biden administration.  These mandates have been the subject of court challenges with varying results.  It continues to be crucial for employers to remain up to date regarding the current status of vaccination requirements that affect their businesses, as the litigation will continue to move through the courts, leading to unpredictable outcomes until final resolution is reached, likely in the Supreme Court of the United States. 

In a key development, an injunction against enforcement of the large business mandate was lifted on December 17.

Large Business Mandate

Businesses with 100 or more workers must require employees to be vaccinated.  Unvaccinated employees must be tested weekly and wear masks while working.  The rule contains exceptions for employees who work alone or mostly outdoors.

This rule had been enjoined nationwide.  On Dec. 17, a three-judge panel of the 6th U.S. Circuit Court of Appeals allowed the mandate, lifting the injunction against enforcement.  Multiple cases from across the country had been consolidated into the 6th Circuit, which was selected at random through a court lottery system.

OSHA has announced that it will not issue employer citations before Jan. 10 for its vaccination mandate or before Feb. 9 for its testing requirement.

Health Care Worker Mandate

A wide range of health care providers that receive federal Medicare or Medicaid funding were to require workers to receive the first dose of a COVID-19 vaccine by Dec. 6 and be fully vaccinated by Jan. 4. The rule would affect more than 17 million workers in thousands of health care facilities and home health care providers.

The rule is enjoined in Nebraska and adjoining states.  A Missouri-based federal judge issued an injunction Nov. 29 barring the rule from enforcement in 10 states that had originally sued in federal court in Missouri.  There are injunctions in place in some other states based on separate lawsuits. 

The Biden administration is appealing these court rulings in separate appellate courts.  At this point, the cases have not been consolidated into any one federal appellate court. 

Federal Contractor Mandate

Contractors and subcontractors for the federal government are required to comply with federal workplace safety requirements, which require that new, renewed, or extended contracts include a clause requiring employees to be fully vaccinated Jan. 18.  There are limited exceptions for medical or religions reasons.

A federal judge in Georgia issued an injunction December 7 prohibiting enforcement of the requirement for contractors.  The ruling applies nationwide.  An appeal is expected.

Nebraska Still Allows Structured Avoidance of Capital Gains Taxes (Even to Family Members)

Every Nebraskan business owner (or their trust) should be aware that they are entitled to claim a one-time capital gains exemption from the sale of their stock.  The exemption is seemingly not available when there are less than five shareholders and at least two of those shareholders who are not related to each other – but not so fast.  Artful drafting of sale documents would allow the placement of strawmen shareholders to meet these requirements which would create substantial tax savings for a just a few additional pages of paperwork.  Normally this sort of structuring is a no-no under normal tax rules.  But not in Nebraska.  The Nebraska Supreme court in 2016 interpreted the statute to allow this sort of structuring and the Legislature has not yet acted to update the statute to prevent this practice.  Nebraska business owners should consult their accountants and deal counsel to make sure that if this benefit is available to them that their documents are drafted in a way that takes advantage of the statute as interpreted by the Supreme Court. 

Nebraska Employees Terminated for Refusing to Receive a COVID-19 Vaccination Pursuant to An Employer Instituted Vaccine Requirement Eligible for Unemployment Compensation

The Nebraska Department of Labor (NDOL) recently issued a guidance memorandum regarding unemployment benefit eligibility for employees terminated for refusing to receive a COVID-19 vaccination.  The guidance memorandum posted very quietly on the NDOL website is advisory in nature, but is binding on the NDOL, including its claims examiners and appeals tribunal, and Administrative Law Judges, unless or until amended by the NDOL.  Let’s examine the new guidance to determine its full effect on Nebraska employers.

Background.

The guidance memorandum posted in late November, 2021 is intended to provide individuals and Nebraska employers with an understanding of how the NDOL will interpret the definition of “misconduct” as applied under the Nebraska Employment Security Law to determine a separated employee’s eligibility for unemployment compensation benefits.  It has become settled law in Nebraska that, when an employee is involuntarily terminated from employment, the employee is eligible for unemployment compensation benefits unless the reason for the termination amounts to “misconduct”.  Misconduct is defined under the Nebraska Employment Security Law as conduct “not in the best interests of the employer.”  As a practical matter, employees terminated for unsatisfactory performance are not disqualified from receipt of unemployment compensation benefits, and there must be some clear violation of a critical employer interest, policy or rule to constitute misconduct.  Employees found to have engaged in misconduct that is gross, flagrant, willful or unlawful receive a more lengthy disqualification for eligibility for unemployment compensation benefits. 

New Guidance.

The NDOL’s recent guidance implements the following rule to be followed within the agency in employee separations due to the employee’s refusal to receive a COVID-19 vaccination.

“For all individuals who began work for an employer prior to an employer instituting a COVID-19 vaccine requirement:

--  an individual who is discharged from employment for refusing to receive a vaccination against Covid-19, shall be deemed to have been discharged for reasons other than misconduct and not be disqualified for unemployment benefits on account of such discharge; and

--  impact to an employer’s experience account will be determined under Neb. Rev. Stat. § 48-652.”

In short, the guidance indicates that employees who are already employed when the employer implements a new COVID-19 vaccination mandate will receive unemployment compensation benefits, and those benefits will be applied against the employer’s unemployment compensation tax account.  Since the guidance is expressly limited only to those employees who became employed prior to the employer-instituted vaccination requirement, any employee accepting employment with an employer when the COVID-19 vaccination requirement has already been instituted, and who then refused to get a vaccination, would be subject to disqualification from receipt of unemployment compensation benefits due to violation of a known policy, i.e., conduct not in the best interests of the employer.

As a practical matter, however, it is not likely that any applicant who is going to refuse a COVID-19 vaccination in order to comply with the employer’s mandate would accept such employment in the first place, and it is not likely that this will become a major issue. 

Moreover, the recently issued COVID-19 vaccination requirements at the federal level are not currently being implemented or enforced, as the OSHA mandate covering private employers with more than 100 employees, the CMS rule requiring mandatory COVID-19 vaccinations for healthcare workers, and the federal mandate for all employees of employers with federal contracts, have all now been blocked by Federal Courts with the result that all implementation and potential enforcement has been terminated at the federal level for the time being. 

The NDOL apparently felt that this guidance memorandum and advisory was necessary since some employers are implementing COVID-19 vaccination mandates on their own.  Indeed, in issuing the guidance, the NDOL expressly recognized that under Nebraska law employers may institute COVID-19 vaccination requirements, while also expressly recognizing that Nebraskans have individual responsibility and personal freedom of their healthcare decisions and that the decision to receive a COVID-19 vaccination is a personal choice involving medical, religious, and other personal factors.  Based on these statements and the recognition that requirements may be issued by employers regarding COVID-19 vaccinations which may not have existed at the time individual employment was accepted, apparently caused the NDOL to believe that a policy guidance pronouncement was in order.

Time will tell how these issues will play out in Nebraska and at the federal level, and we will keep you updated on any further developments in this area.

Erickson | Sederstrom PC’s employment attorneys are well-versed in the COVID-19 pandemic-related changes in the legal and HR landscape. They can be reached 402-397-2200.

Holiday Party Tips for Employers

The end of the year brings various obligations for employers and also opportunities to spread holiday cheer to employees, whether through end-of-year bonuses, holiday time off from work, or, as discussed here, employer-hosted holiday parties.

Examples of disputes with employers arising out of holiday parties are not hard to find. Holiday parties can give rise to claims, sometimes more than other environments because of the festive atmosphere that encourage one to “eat, [drink,] and be [too] merry.” The following tips are offered to help avoid troublesome situations that could give rise to a claim.

Be open to all viewpoints in hosting your party.

When planning and inviting employees to your holiday party, it is a good idea to call it just that, a holiday party, rather than tying the event to a particular holiday, like Christmas or Chanukah. The purpose of doing so is to ensure that employees of all religions and backgrounds are equally encouraged to participate in the out-of-office event. Even if supervisors are aware that a particular employee’s beliefs prevent him or her from celebrating, everyone should be welcomed to attend.

But don’t make attendance at holiday events mandatory.

With that said, everyone should be welcomed to attend, but no one should be required to attend. If attendance is mandatory, then the party may be considered work-time, in which an employer has to pay wages for non-exempt employees. Also, employees who do not celebrate holidays should not be required to attend and celebrate. Numerous cases have been litigated against employers in which an employee alleged she was required to participate in a holiday event that was contrary to her religious beliefs. Encourage employees to come, but do not require that they do.

Consider how to restrict excess consumption of alcohol.

Many problems that arise at out-of-office events, whether harassment or injuries, stem from over-indulgence of alcohol. A proactive employer should think about how to limit excessive drinking by employees, both to protect employees and to protect itself from potential liability.

For catered events or parties held at event centers, it can be a good idea to have a cash bar, rather than an open bar. Another way to try to limit excess consumption is to ask bartenders to be aware of who they are serving and decline to serve anyone who appears inebriated.

Also, serve appetizers, dinner, and dessert if you intend to have alcohol available throughout the evening. Employers may also want to have taxis or shuttles available for employees who need assistance getting home at the end of the evening. A party held over an extended lunch hour can also discourage excessive drinking and may be appreciated by employees who often have multiple family, church or other events to attend in the evenings during the holiday season.

Review policies with employees in advance of any party.

Your anti-harassment, dress code and other employee conduct policies apply to an out-of-office holiday event. It is a good idea to review these with employees a couple of weeks in advance of an event, by way of e-mail or memorandum summarizing the relevant policies.

Another idea to avoid inappropriate attire at parties is to hold the party right after business hours. This can encourage employees to come in their ordinary work attire, which can be a reminder that conduct at the party reflects on their professional lives.

Check your insurance coverage.

Good to do any time of year, but particularly when planning any large scale event for employees, is checking in with your insurer on the scope of your coverage. Does your policy contain exclusions for off-site events, or attendance-optional events held after hours? Does serving alcohol trigger any exclusion? Always best to be prepared.

Be vigilant and ask your team leaders to set a good example of conduct.

While you surely want everyone to spread the holiday cheer, consider asking your team leaders or supervisors to keep any eye on their teams at the party. If your business’s leaders set a good example at the party, other employees are likely to act professionally and still have fun.

Have fun!

And, of course, encourage everyone to have a good time. End of year celebrations can be a great way to encourage team building and boost morale for a great start to the New Year. 

Bonnie Boryca is an employment law attorney at Erickson | Sederstrom, PC. She can be reached at (402) 397-2200.

Court Blocks COVID-19 Vaccination Mandate for Health Care Workers

On November 29, 2021, U.S. District Judge Matthew Schelp of the Eastern District of Missouri issued an Order granting a preliminary injunction against implementation of a federal government mandate for health care workers to receive COVID-19 vaccinations.  Judge Schelp’s order was issued in a lawsuit brought against the federal government by Nebraska and nine other states (Alaska, Arkansas, Iowa, Kansas, Missouri, New Hampshire, North Dakota, South Dakota, and Wyoming).  The Order applies to health care workers in these ten states.

The vaccine mandate was issued by the federal Centers for Medicare and Medicaid (CMS) earlier in November and applies to all Medicare and Medicaid certified medical providers.  Judge Schelp concluded that CMS had issued the mandate improperly and had to get approval from Congress. 

The preliminary injunction will remain in place unless and until there is a further court order modifying or removing the injunction.  It is anticipated that the federal government will appeal Judge Schelp’s Order.

Employers should consult with counsel to obtain further information and guidance about the most current circumstances.  Erickson|Sederstrom’s employment law attorneys are available to assist.

Don’t Forget the Basics Estate Planning is About People

Estate planning attorneys and clients are once again awaiting possible sweeping changes in estate taxation. Will the cherished step-up in cost basis of capital assets go away? Will unrealized capital gains be recognized at death? What will the exclusion amounts be for federal estate tax? At the moment, answers are murky at best.

These are undoubtedly big changes being considered by Congress. But what can a client do in the meantime? The answer is simple: mind to the basic building blocks of your estate plan. The basics aren’t sexy. But they are crucial elements to your plan. This is the first in a series of articles which will examine the crucial but often overlooked decisions that make or break an estate plan.

What is the first essential building block of an estate plan? Is it the power of attorney? The last will? Maybe a trust? These are all good tools, but in the end, they are just ink on paper. Estate plans are not self-executing. We rely on people to carry them out. Your will may direct that a certain piece of property be given to so and so, but it takes a living, breathing person to secure, safeguard, account for, and physically deliver that property to the intended beneficiary. Thus, the selection and ongoing review of these critical players in your estate plan deserves careful consideration.

The challenge is that people and relationships change, often quickly. Our skills, temperaments, and relationships with others are constantly in flux. The person you entrusted five years ago to oversee your estate or serve as your power of attorney may now be unsuitable for a host of reasons that you could not have foreseen.

To address this, I recommend that my clients critically review their estate plan each year with a special focus on the people they’ve chosen to serve in these roles. I encourage them to ask themselves the following questions:

o Are the people I’ve appointed as my children’s guardian, my trustee, executor, or agents under my power of attorney still the best choices to ensure my wishes are carried out? Are any of them experiencing health issues, marriage problems, addiction issues, or other major life distractions that they were not experiencing when I first named them as a fiduciary? Do I still trust these individuals as I once did?

o What natural skills do each of these individuals exhibit? Who in my life exhibits the key characteristics of a fiduciary, namely trustworthiness, organization, and accountability?

o Do the people I’ve currently nominated to serve as fiduciaries reflect outdated or faulty notions? For example, did I nominate my son to be my Power of Attorney only because he lives in close proximity to me when another child of mine who lives far away might actually be better suited? Or, did I nominate my oldest daughter to serve as my Successor Trustee because I was afraid of hurting her feelings?

o Whom do I really trust to make personal medical decisions for me if I am incapacitated?

o Have I given enough consideration to the alternate fiduciaries who may be called upon if my first choice is unable to serve?

o What are my children’s relationships like with each other? Are they harmonious? Contentious? If I elevate one of my children to administer my estate at my death or be my primary medical decision maker, will it lead to unnecessary strife or litigation?

These can be messy questions indeed. Don’t breeze past the identification of the proper people to carry out your estate plan or protect you in the case of an incapacity. Talk with your attorney, review whom you have selected to fill these roles, and make appropriate changes as necessary. It’s worth a modest invoice from your attorney to ensure the people with the right skills and temperament are in place.

Please contact E|S trust and estate attorneys with questions on how to approach your own comprehensive estate plan to fit your needs.

MLB Team Sued for Trademark Infringement by Roller Derby Team

Major League Baseball’s Cleveland Indians organization has been sued by the Cleveland Guardians, a local roller derby team, for trademark infringement. Earlier in 2021, the Indians announced their intent to transition from the Cleveland Indians to the Cleveland Guardians beginning with the 2022 season. The Cleveland Guardians filed suit to protect their trademark rights in the name. You can read the Associated Press’s reporting on the matter here.  

Trademarks and other intellectual property are becoming increasingly important assets in today’s business landscape, especially in our digital, online world. The business law and intellectual property lawyers at Erickson | Sederstrom can help you understand the contours of protecting, managing and exploiting your intellectual property assets, and, when necessary, assist you through the dispute process relating to infringement or other issues.

This post was created by Andrew Collins and Blake Schneiderwind, corporate and business attorneys at Erickson | Sederstrom, P.C., who can be reached at 402-397-2200.

Mandatory Vaccination and Testing Requirements for Private Employers with Over 100 Employees

• OSHA issued its Emergency Temporary Standard (ETS) regarding Covid-19 vaccination and testing requirements on November 4, 2021. 

• The OSHA ETS will take effect immediately, but most requirements do not kick in until January 4, 2022, or thirty (60) days after the date the ETS was published in the Federal Register.  By January 4, 2022, employers will be required to comply with the vaccination requirements. 

• After sixty (60) days, employers must comply with all testing requirements for those employees who have not become fully vaccinated.   

• This new vaccination and testing mandate will apply to all employers with more than 100 employees, and to all federal contractors. 

• It will not apply to employees who either work at home or work outdoors. 

• Covered employers will have two options, the first being to mandate that all employees not working at home or outdoors must be fully vaccinated by January 4, 2022. 

• There is an exemption to the vaccination requirement for those employees who are entitled to a reasonable accommodation due to a sincerely held religious belief, i.e., active practice of a recognized religion and a valid religious objection. 

• An exemption will also be provided for any employee who has valid medical certification from a licensed healthcare provider that the employee should not receive the vaccination either because of a specific medical condition or disability.   

• Under the vaccination requirement, employees must provide proof of vaccination either through a CDC Vaccination Record Card, or other medical records of immunizations received, documentation from a certified pharmacy, or other source. 

• The vaccination must be one of the FDA approved vaccinations, i.e., Pfizer, Moderna or Johnson & Johnson. 

• Any employee who refuses to be vaccinated will have an alternative method of compliance with the mandate by wearing a mask at all times when they are not either in a personal office with the door closed, or eating or drinking, in combination with providing proof of a valid negative SARS test for Covid every seven (7) days. 

• There is no requirement that employers pay for the regular testing. 

• The OSHA ETS requires that all employers provide up to four (4) hours of paid time off for employees to get vaccinated, including travel time, as well as provision of reasonable paid time off to recover from any illness or side effects as a result of receiving the vaccination.   

• Any employee who has tested positive for Covid-19 in a SARS test or otherwise diagnosed with Covid by a licensed health practitioner will not be subject to testing for a period of ninety (90) days following any such positive diagnosis, due to the high incidence of false positives for ninety (90) days after a Covid infection. 

• All employers are required to establish a written policy concerning the mandatory vaccination requirement, and an alternative policy outlining the only exemptions the Mandatory Vaccination Requirement which allows employees to avoid the vaccination mandate by wearing a mask at all times in the workplace, unless in a private office with the door closed or eating, drinking, etc., and provision of proof of regular negative tests for Covid-19 every seven (7) days. 

• Covered employers found to be in violation may be fined up to $13,653 for each violation, and any covered employer found to have willfully or repetitively violate the standards may be fined up to $136,532.

 Our labor and employment law experts at Erickson | Sederstrom, P.C., LLO, can assist you with development of the required policies and on-going compliance with this new OSHA ETS Mandate.