Posted on

US Department of Labor Announces Emergency COVID-19 Employer Requirements

NEWS RELEASE

Today, the United States Department of Labor issued a press release announcing an emergency temporary standard to protect workers from coronavirus.

These requirements are intended to implement the COVID-19 vaccine directive announced by President Biden and will apply to employers with 100 or more employees.

The standards will require companies subject to the rules to ensure that:

  • Each vaccinated employee provides proof (type and date) of vaccination status (e.g., immunization record from a health care provider or pharmacy; CDC Covid-19 vaccination card; immunization records from a governmental authority; or other official documentation);
  • Employees who are not vaccinated must produce a negative COVID-19 test at least weekly and wear a mask (face covering) in the workplace;
  • An employee who is vaccinated but unable to provide documentary proof, must provide the employer with a written, signed and dated statement attesting to the fact they were successfully and properly vaccinated; and
  • Employees are given paid time off in order to obtain a Covid-19 vaccination and, if necessary, sick leave to recover from any side effects.

There are also separate rules requiring every staff member in health facilities that receive Medicare and Medicaid reimbursements to be vaccinated and health workers and federal contractors  have until January 4, 2022 to obtain either their second dose of the Pfizer/BioNTech or Modernavaccine or a single dose of the Johnson & Johnson vaccine.

The new rules do not require employers to provide or pay for tests, unless a collective bargaining agreement that applies to the employer requires them to do so.

The standards were published in the US Federal Register this morning and you can read a copy or download the regulations in PDF form here: COVID-19 Vaccination and Testing; Emergency Temporary Standard.

As always, if you have questions or want more information about this or any other Legal Bytes posting, don’t hesitate to contact me, Joe Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

 

Posted on

California Consumer Privacy Act (CCPA)

Although amended twice (September 13th and October 11th of 2018) after its initial passage by the California State Legislature and being signed into law by Governor Jerry Brown in June of 2018, the California Consumer Privacy Act (California Civil Code Section 1798.100) (“CCPA”) becomes effective with the new year (January 1, 2020).

Although it is intended to protect and afford California residents with certain rights (in some areas, greater or somewhat different than the European Union’s General Data Protection Directive 2016/679), it affects non-profit entities that do business in California, and that collect personal information of consumers and either has annual gross revenues over $25 million OR buys or sells personal data of 50,000 or more consumers/households OR earns over half its annual revenue from selling consumer personal information.

If your organization fits into any of those categories, you are required to establish, put into place and maintain reasonable security procedures and practices to protect consumer data and to afford California residents the right to know what personal data is being collected about them; to know whether and to whom the consumer’s personal data is sold or disclosed; to refuse to permit the sale of their personal data; to access their personal information; and to ask you to delete personal information collected from them.  The law also prohibits discrimination against any consumer for exercising any of their privacy rights under the CCPA.

While many business have been busily amending their agreements with suppliers, service providers and likely have been presented updated and revised contracts with “CCPA” amendments in order to ensure those in the chain of collection, storage, handling, distribution and use are in compliance, if you do any business in or with California residents, don’t forget to update your privacy policies and any terms of use that apply to your websites, e-commerce and online/mobile presence generally.  Those sites, even those that do not require any registration or input directly from consumers, almost certainly will be collecting information that is covered by the broad definition of “personal information” under the CCPA.

If you would like to know more about the CCPA or have any questions about this post, don’t hesitate to contact me Joe Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

 

Posted on

Now That the FCC Has Acted . . . .

In case you missed it (see my previous Legal Bytes post Inter Net Neutrality), the International Law Office was kind enough to post an adapted version of the article in its IT & Internet Newsletter.   If you are not already a subscriber to ILO, you can read a PDF version of my post, Internet Neutrality, right here.  Now that the FCC has rolled back the Obama-era regulations, the battle continues to rage over whether that is good or bad for the Internet, the economy, innovation and each of the groups aligned on one side or the other of this fray.

Note for you historical buffs – the Internet was made available to commercial enterprises in 1981.  By 1984, “.com” had overtaken .gov, .mil and .edu as the largest URL suffix and it wasn’t until recently, during the FCC’s tenure under President Obama, that new regulations regarding neutrality were implemented.  I know, I know, times have changed – but be mindful that someone far wiser than I noted: “Those who cannot remember the past are condemned to repeat it.“

Posted on

What is an “Ad” These Days?

–  Joseph I. Rosenbaum

On Friday, December 8, 2017, I had the privilege of presenting a seminar, hosted by Lawline, entitled “Augmented, Native and Interactive: The New World of Digital & Mobil Advertising.”  This was broadcast live on the Web and recorded for subsequent on demand viewing and was my second presentation at Lawline.  The first “Online & Mobile Digital Interactive Advertising: Video Games, Branded Entertainment, Native Advertising and Beyond” remains available as a web-based, on demand offering at Lawline.

This seminar provided an update on many of the concepts and principles discussed in the first program, including some basic principles of advertising law that applies in both the traditional and digital/mobile environment and provided updated information on game advertising – both advertising the game and in-game advertising – as well native advertising and guidance from the Federal Trade Commission.  This recent session also delved into a number of digital and mobile advertising issues that were not part of the first presentation, such as celebrity endorsements, bloggers, experts & consumer testimonials in social media, augmented reality and advertising in virtual worlds, programmatic buying and the current tensions in the industry concerning transparency and relationships between advertisers and integrated agencies.  You can view the slide images of my presentation “The New World of Digital & Mobil Advertising” and, of course, you can view the recorded session which is available exclusively through Lawline.

As always, if you need assistance or require any additional information, feel free to contact me, Joe Rosenbaum, at Rimon, P.C.

Posted on

Global Social Media Handbook

I am proud to be among the 22 legal professionals, including 7 of my colleagues at Rimon, who contributed and co-authored a new book entitled Handbook on Global Social Media Law for Business Lawyers, published by ABA Publishing. This comprehensive work, sponsored by the Business Law Section of the American Bar Association, was co-edited by Valerie Surgenor, a partner in the Glasgow, Scotland, law firm MacRoberts LLP and John Isaza, my friend and partner here at Rimon, P.C.   Although principally focused on the United States, there are contributions from foreign lawyers in key regions around the world, including Canada, the European Union, Australia, Russia and Asia.

The Handbook deals with national and international law principles and emerging issues related to social media law, ethics, compliance and governance, including cybersecurity, cyber terrorism and risk management in a social media environment (e.g., hacking, corporate espionage, data loss and data breach); intellectual property issues in social media;  defamation, “fake news” and social media;  implementation of a social media crisis plan; use of social media as a tool in recruitment of employees and the privacy implications to employers;  promotional, endorsement and social media disclosure guidelines promulgated by the Federal Trade Commission in the US; and recent trends in UK and European social media legislation and regulation.  There is a separate chapter that discusses information and records management within the context of social media.

If you are interested, you can order a copy directly from the ABA (Handbook on Global Social Media Law for Business Lawyers) and of course, if you need more information or want to discuss your particular requirements with knowledgeable and experienced professionals, feel free to reach out to me, Joe Rosenbaum, or to any of the lawyers at Rimon with whom you work with regularly.

 

Posted on

First Joint Consultations May Foreshadow Effectiveness of Privacy Shield

–  Stephen Díaz, Partner, Rimon, P.C. &  Claudio Palmieri, Of  Counsel Rimon, P.C. (Principal, Studio Legale Palmieri –Rimôn Italia)

On October 6, 2015, the Court of Justice of the European Union invalidated the so-called “Safe Harbor” that previously governed data transfers between the U.S. and the EU (Case C-362/14 – Maximillian Schrems v. Data Protection Commissioner, 6 October 2015).

As you already know if you read our Legal Bytes’ posting in May concerning the US-EU Data Transfer Privacy Shield, personal data cannot be transferred to from the EU to a non-European Union/European Economic Area country, unless that country can ensure “adequate levels of protection” for such personal data. While the European Commission had identified a number of countries that met the ‘adequate protection’ test, the United States was not one of them and without the Safe Harbor understandings, transatlantic exchanges of data – both for commercial and national security reasons – were at risk of being non-compliant with EU regulations!  In an attempt to temporarily address the data transfer issues, the EU and the U.S. proposed a new framework for exchanges of personal data for commercial purposes, known as the EU-U.S. Privacy Shield (“Privacy Shield”) which was formally launched on July 12, 2016.

Further complicating matters, a new EU General Data Protection Regulation (GDPR) comes into effect on May 25, 2018.    In furtherance of a formal and more permanent agreement under the Privacy Shield and in contemplation of the new regulations, representatives of the U.S. and the EU have announced they will meet in Washington, DC during the week of September 18, 2017, for the first Annual Review of the Privacy Shield.  In advance of the meeting, the EU’s official Working Group (WP 29) sent the European Commission their recommendations and consistent with previous pronouncements, they believe the meeting should focus on enforcement of rights and obligations, as well as changes in U.S. law since the adoption of the Privacy Shield.  WP29 recommended discussions focus on these issue and that any formal agreement must deal with both commercial, as well as law enforcement and national security access.

These concerns and considerations are explored in more detail in our full Client Alert: No Certainty in Future of Privacy Shield as Transatlantic Consultations Set to Begin and it is clear that the September consultations may well be an indication of whether the Privacy Shield will prove an adequate regulatory regime for the transatlantic transfer of personal data and whether meaningful progress is likely in the current environment.

If you would like more information, a better understanding or need guidance regarding compliance with these regulations, contact Stephen Díaz Gavin, a Rimon Law Partner based in Washington, DC or Claudio Palmieri is of counsel to Rimon, P.C. and the principal of Studio Legale Palmieri –Rimôn Italia in Rome, Italy. Of course you can always contact me, Joe Rosenbaum, or any of the lawyers at Rimon with whom you regularly work.

 

Posted on

OFAC Targets Sports & Entertainment Figures

– Jill Williamson, Partner, Rimon, P.C.

On August 9, 2017, the Office of Foreign Assets Control (OFAC) at the U.S. Treasury Department, issued a Press  Release and identified Mexican national Raul Flores Hernandez and the Flores Drug Trafficking Organization (Flores DTO) as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act, also known as the Kingpin Act. OFAC also designated a large number of individuals and 42 entities for involvement with, and acting as fronts for, Raul Flores Hernandez.

Many of these individual and entities are in the sports and entertainment industries, including  professional soccer player, Rafael Marquez Alvarez (Rafa Marquez), Mexican singer Julio Cesar Alvarez Montelongo (Julion Alvarez), Mexican Soccer Club Club Deportivo Morumbi and the Grand Casino Guadalajara.

As of the issuance date of these designations, no U.S. persons, companies, nor any individuals in the US, are allowed to conduct transactions with these individuals or entities.  Penalties under the Kingpin Act can run as high as $10MM per violation, with individual violators subject to imprisonment for up to 30 years.  Even civil penalties for inadvertent violations can run over $1M per violation.  It is worth noting that OFAC violations are based on strict liability.

If you would like more information, a better understanding or need guidance regarding compliance with these regulations, contact Jill M. Williamson, a Rimon Law Partner based in Washington, DC. Of course you can always contact me, Joe Rosenbaum, or any of the lawyers at Rimon with whom you regularly work.

Posted on

A Cryptocurrency by Any Other Name May Still Smell Like a Security

– Dror Futter, Partner, Rimon, P.C.

Although the U.S. Securities and Exchange Commission (SEC) has been studying blockchain and cryptocurrencies since 2013, until its recent pronouncement, the SEC had been silent with respect with respect to its regulatory authority with respect to Initial Coin Offerings. An Initial Coin Offering (“ICO”) is a company’s release of its own cryptocurrency in exchange for tokens of a pre-existing cryptocurrency (e.g., bitcoins and in rare instances, a fiat currency – currency backed by the issuing government such as Dollars or Euro). The ICO issuing company effectively ‘sells’ a pre-defined number of coins or crypto-tokens to purchasers.

The surge in ICO’s has been so dramatic, that in 2017 ICO’s surpassed venture capital as the primary source for funding blockchain ventures and recent news reports suggest that funds raised through an ICO were “crowding out” venture investors. Most ICO’s in the United States have been conducted without registration under U.S. securities laws. Typically, the issuer simply provides potential investors with a “White Paper” outlining how they intend to use the money raised by the ICO.  To put it charitably, the quality and detail of these White Papers varies widely.

The similarity between the term “Initial Coin Offering” and “Initial Public Offering” or IPO is more than coincidental and these similarities have now prompted the SEC to issue its first pronouncements on the subject of ICO regulation under the securities laws and on July 25, 2017, the SEC did just that and issued the following three documents:
• An SEC Report of Investigation;
• A Press Release about the report; and
• Guidance to Purchasers of Digital Tokens

The issue the SEC has been grappling with is the application of the definition of a “security” to the tokens being issued in an ICO.  In a 1946 Supreme Court case Securities and Exchange Commission v. Howey Co., the U.S. Supreme Court identified four criteria (which have evolved a bit since that decision) that need to be present for an investment contract, within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, to be a security.  They are: (1) the investment of money or other consideration, (2) In a common enterprise (although there is a split over how “commonality” should defined), (3) where investors expect a profit, and (4) any returns to the investors are derived solely from efforts of the promoters (issuers) or other third parties. The Court noted that the facts and circumstances of each case will determine whether an instrument is a security, even if it does not technically fall within the narrow criteria of their specific decision.

In short, the SEC press release stated:
• Tokens offered and sold by “The DAO” (the case that had been investigated) were securities, subject to the federal securities laws;
• Issuers of blockchain technology-based securities must register offers and sales unless a valid exemption applies;
• Those participating in unregistered offerings may be liable for securities law violations; and
• Securities exchanges enabling trading in these securities must register unless an exemption applies.

The SEC’s documents are silent on so-called “utility tokens” or “service tokens” – tokens that allow the purchaser to obtain a service (e.g., data storage; online games) and it is likely we will hear more from the SEC in future, since their press release contained a clear warning the securities laws and regulations apply to ICO’s. Although not all tokens sold in an ICO will automatically be considered a security, there remains significant uncertainty and most knowledgeable attorneys in this arena have already been advising their clients to avail themselves of the exemptions to the registration requirements (e.g., Reg D, Reg A+ or Crowdfunding under the JOBS Act).

This is an extremely complex and challenging (and evolving) area of the law and regulation and you can read the entire Client Alert: Casting Light Over Recent Events Concerning the SEC’s views on ICOs, Cryptocurrencies, Tokens, Securities and their Legal Repercussions.  Of course, if you want to know even more or need guidance, you should contact Dror Futter directly and you can always contact me, Joe Rosenbaum, or any of the attorneys at Rimon Law with whom you regularly work.

Posted on

Marketing Hedge Funds – Why “Fiduciary” Matters

–  by  Thomas M. White

The Department of Labor (“DOL”) recently adopted a rule expanding the definition of who may be a fiduciary under ERISA.  Significant because ERISA-covered plans control enormous pools of capital and ERISA fiduciaries are prohibited from engaging in self-dealing transactions.  The new rule, which went into effect on June 9, 2017, affects how investments in hedge funds will be marketed to ERISA-covered plans and IRAs.

If a person makes a “recommendation” regarding an investment or investment management and receives a fee from a plan, a plan participant, a fiduciary, an IRA or an owner of an IRA that person will be considered a fiduciary and that definition applies even if the underlying assets are not “plan assets” within the meaning of the DOL’s Plan Asset Regulation.  If this sounds confusing, appreciate there is litigation currently pending regarding whether the DOL’s rule applies to IRAs or their owners.

Probably the most critical determination will be whether a “recommendation” has been made for purposes of this new rule.  A “recommendation” involves the purchase, holding, managing or sale of securities and is “a communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action.”  In fact, a series of communications may result in a “recommendation,” even if each individual communications may not rise to that level.  Although general communications are not, advice based on individual characteristics of a potential investor are likely “recommendations.”

There are a number of regulatory exemptions, such as recommendations made to a “sophisticated” adviser or investor or if an adviser offers advice to an independent plan or IRA fiduciary in an arm’s-length transaction and the adviser reasonably believes the independent fiduciary is a qualified financial institution (e.g., a bank, insurance company or a broker-dealer) or if the recipient of the information manages at least $50 million in assets regardless of whether those assets are plan assets.

Why does all this matter.  Make a presentation covering the general features of a specific hedge fund to a meeting room packed with potential investors and investment advisers.  After the formal presentation concludes, an audience member comes over to the presenter, describes himself as an IRA owner and his particular circumstances – a discussion ensues.  If the speaker isn’t careful about what is said, and a fee may be earned by the hedge fund it may be a problem.  There are other examples too numerous to describe here.

To minimize the likelihood they will be considered fiduciaries under the new rule, hedge funds should determine if they want to market to IRAs, small plans and individuals who have investment discretion over the investments in their profit sharing and 401(k) accounts.  Marketing materials should be reviewed to determine if they need to be modified to avoid a problem.  Even subscription agreements should make it clear the potential investor is not a small plan or an IRA unless it is being advised by an investment professional who fits under the exemption. Marketing professionals should be trained as to what they may and may not say and written reports describing conversations and communications with potential investors should be retained.

If you want to read more about the potential application of this new rule you can read the entire Rimon Client Alert or contact Tom White directly.  Mr. White specializes in the full scope of human resources management, such as Employee Benefits and Executive Compensation, Healthcare, and Employment Law.

Posted on

US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs

– Melinda Fellner Bramwit, Partner, Rimon, P.C.

Changes to US Treasury Regulations Under Section 6038 of the Internal Revenue Code could affect filings for single member LLCs owned by non-US individuals or entities.

Many non-resident individuals and non-resident entities maintain title to real estate and other assets in single member limited liability companies incorporated under state law in the United States, for a variety of reasons.  Under Federal tax law, such an entity is disregarded for tax purposes unless the owner elects otherwise.  From a corporate perspective, these limited liability companies can be used to harness assets in an entity separate from the owner, providing a layer of corporate protection and perhaps anonymity for the ultimate owner.  These entities are also reasonably simple to form and maintain.

Changes to U.S. Treasury Regulations effective December 13, 2016, throw a wrinkle into the use of this malleable entity in some circumstances, which can be managed with some planning.

These changes require that a non-resident owning 100% of a United States limited liability company (“LLC”) file a Form 5472, an information return, when certain transactions occur between certain parties (“related” parties) and the LLC.

The following example from the regulations illustrates a scenario where this filing would be triggered:

In year 1, F, a foreign corporation forms and contributes assets to US-LLC, a U.S. limited liability company that is a disregarded entity for US Federal tax purposes.  In year 2, F contributes funds to US-LLC, and in year 3, US-LLC makes a payment to F.

Under the modified regulations, F’s payment to US-LLC as well as US-LLC’s payment back to F are both reportable transactions for which a Form 5472 would be required with respect to US-LLC.

This is a simple, yet common situation which triggers the filing requirement. It is important to note that this requirement is applicable to tax years of entities beginning on or after January 1, 2017 and ending on or after December 13, 2017 (Note: This is not a typo. The date is the 13th, not the 31st).  As such, there is a window of opportunity for tax planning to avoid the requirement of this form and if you want to know more or need help, don’t hesitate to contact me, Melinda Fellner Bramwit, a partner here at Rimon, P.C.

Of course, if you need assistance, you may always contact me, Joe Rosenbaum, or any of the lawyers with whom you routinely work at Rimon Law.