Ninth Annual Utah Fall Employment Law Seminar - Mercer US

Ninth Annual Utah Fall Employment Law SeminarNOVEMBER 13, 2019 | SALT LAKE CITY

Agenda

9th Annual Utah Fall Employment Law SeminarWednesday, November 13, 2019 | 8:00 AM – 2:00 PM

The Tower at Rice-Eccles StadiumUniversity of Utah

451 South 1400 East, Level 6Salt Lake City

8:00 AM – 8:30 AM Check-in and Continental Breakfast8:30 AM – 8:35 AM Welcome

Jason D. Boren, Partner, Ballard SpahrKelly Esselman, Mountain States Health Leader, SLC Office Business Leader, Mercer

8:35 AM – 9:30 AM Employment Law Year in ReviewJason D. Boren, Partner, Ballard SpahrRebecca Brown, Principal, Employee Benefits Attorney Specializing in Health &Welfare, MercerSteven W. Suflas, Partner, Ballard Spahr

This presentation will review the past year's labor and employment law developments in the courts and agencies, focusing on those most significant for Utah-based employers. Topics may include:•Medical marijuana•Senate Bill 133 in Utah “oppressive conduct in a closely held corporation”•Medicare expansion•Wage and hour

9:30 AM – 10:30 AM Health Legislative & Regulatory UpdateRebecca Brown, Principal, Employee Benefits Attorney Specializing in Health &Welfare, Mercer

This session will review recent federal and state legislative and regulatory updates, as well as litigation, that impacts employer health plan and administration from both a fully-insured and self-funded perspective. Topics will include:• Federal legislative developments, including efforts to repeal the Cadillac tax• Federal regulatory developments, including updates regarding wellness programs,mental health parity, and

issues impacting coverage for transgender individuals• Emerging presidential candidate’s health policies• Litigation updates regarding the ACA and health plan administration• State paid leave laws

10:30 AM – 10:45 AM Break10:45 AM – 11:45 AM The Gathering Storm: What Employers Need to Know About Pay Equity

Agenda

Paul M. Droubay, Vice President, Western Governors UniversityDenise Keyser, Partner, Ballard SpahrKerry Norman, Head of Talent Management, CHG Healthcare

Recent legislation, proposed regulatory changes, and increased social pressure have made pay equity an even bigger issue for employers. In this session, we will hear from local HR professionals on how they are working through the data-reporting requirements, addressing the pay gaps within their company, and how they are developing best practices for their organization.

11:45 AM – 12:30 PM Performance Management and the Employee Experience Focused WorkplaceJason D. Boren, Partner, Ballard SpahrKelly Esselman, Mountain States Health Leader, SLC Office Business Leader,Mercer

The workplace is experiencing a major shift and entering a new chapter. Employers are increasingly putting their employees at the forefront, instead of solely focusing on output and numbers, leading to increased productivity and high morale. Workers are treating their jobs as consumers, placing high value on company perks. During this session, Mercer will share the results of its national employment survey and Ballard Spahr will respond on the potential legal risks involved with implementing new experiences as well as the rewarding benefits for doing so.

12:30 PM – 1:00 PM Lunch and Networking1:00 PM – 2:00 PM Five Keys to a Successful Diversity & Inclusion Program

Brian Pedrow, D&I Counseling Team and Labor and Employment PracticeLeader, Partner, Ballard SpahrVirginia Essandoh, Chief Diversity Officer, Ballard SpahrAngela Berg, Partner, North America D&I Consulting Practice Leader, MercerTiffiny Lipscomb, AVP of HR Operations, Intermountain Healthcare

Hear from our panel on what they believe is most important for an effective diversity and inclusion initiative.• Tone from the Top: Leaders who walk the talk• The Business Case: D&I not as a social statement but as a business imperative• Broad D&I Spectrum: Not just workforce issues, but procurement, community engagement, and the evolution of D&I• Fit Your Organization: Education, awareness, and courageous conversations• Measure, Measure, Measure

2:00 PM Closing RemarksJason D. Boren, Partner, Ballard SpahrKelly Esselman, Mountain States Health Leader, SLC Office Business Leader,Mercer

Speakers

Angela Berg Partner, Mercer [email protected]

Angela Berg leads Mercer’s North America D&I consulting practice. She’s passionate about helping global organizations successfully support the diversity, inclusion and wellbeing of their employees.

In her 19-year tenure at Mercer, Angela has partnered with some of Mercer’s largest clients across a broad range of industries, including tech, pharma, manufacturing and media and entertainment to: -Leverage data, analytics and research to develop effective D&I strategies and help organizations deliver the optimal mix of programs, policies and processes. -Facilitate senior leadership alignment and commitment. -Develop comprehensive change strategies for complex and diverse organizations with multiple stakeholders. -Create D&I communication strategies and campaigns aligned to the organization’s mission, values and culture.

Angela has also held various leadership roles in Mercer’s Career business, including North America Communication Practice Co-Leader and West Communication Practice Leader.

An early leader and member of Mercer’s Women@Mercer BRG, Angela has participated in numerous panels on gender balance and equality. She has also done extensive work with clients around women and financial wellness, which she has presented at Mercer’s first When Women Thrive conference in Washington, D.C. and other forums. Angela recently is also a member of the Leaders Council on the Women’s Business Collaborative where she sits on the C-Suite Committee, which seeks to increase female representation in senior leadership.

Jason D. Boren Partner, Ballard Spahr801.517.6827 [email protected]

Jason D. Boren is an experienced litigator at both the trial and appellate levels. His litigation practice focuses on complex civil and business litigation disputes involving a wide variety of matters including corporate governance and control, employment, real estate and construction, receivership litigation, intellectual property and false affiliation claims. Jason's employment practice includes representation of employers in actions involving age discrimination, sexual harassment, failure to accommodate, trade secrets, retaliation, FMLA, breach of non-solicitation, noncompetition and non-disclosure agreements, wrongful discharge, employment tort claims, including claims for defamation and emotional distress, and employee benefits and disputes arising under ERISA.

Speaker Profiles

Rebecca Brown, JD Principal, Mercer303.376.5961 [email protected]

Rebecca Brown is a Principal in Mercer’s nationwide Health & Benefits Regulatory Resources Group, the RRG, which is a group of attorneys and other compliance professionals focusing on health and welfare plan compliance issues. Rebecca also leads Mercer’s West Market RRG team and is a member of the Denver leadership team. Rebecca provides legal, regulatory and compliance support to Mercer’s clients and health and benefits consultants in Mercer’s Mountain States region, as well as nationwide. She consults on issues for clients of all sizes on all matters of health and welfare compliance, including ERISA, the Affordable Care Act, HIPAA, COBRA, MHPAEA, and the Tax Code.

Paul M. Droubay Vice President, Western Governors [email protected]

As Vice President of Total Rewards at Western Governor’s University, Paul Droubay knows how pay engages employees to do their best work. With more than 20 years of HR leadership experience, he’s obsessed with finding new ways to attract, retain, and motivate top talent through compensation and benefit programs. Throughout his career, Paul has worked with organizations across a wide range of industries – from insurance and non-profits to manufacturing and real estate. Paul serves on the Board for the United Way and holds degrees in Economics and Political Science from Roanoke College. Paul is from the Blue Ridge mountains of Virginia and is an avid birder and amateur astronomer.

Virginia G. Essandoh, J.D. Chief Diversity Officer, Ballard Spahr215.864.8192 [email protected]

Virginia G. Essandoh serves as the firm's Chief Diversity Officer. She sits on the Management Committee and Expanded Board and is responsible for overseeing, implementing, and providing strategic leadership to Ballard Spahr's diversity initiatives.

Working closely with the Diversity and Inclusion Council, Virginia advises and collaborates with firm management, including Department Chairs, Office Managing Partners, and administrative professionals to implement the firm's diversity and inclusion strategic goals and inspire the concepts of diversity and inclusion into firm culture. This ranges from high-level development of diversity-related recruitment, development and retention, and advancement for lawyers at all levels to client collaborations that advance diversity and inclusion in the profession as a whole.

Speaker Profiles

Virginia meets regularly with diverse attorneys to discuss development and advancement strategies and remains aware of issues that affect diverse attorneys. She also provides strategic guidance and tactical support to the firm's business resource groups, including Ballard Women, helping to develop business and encouraging the development and advancement of female lawyers.

Kelly Esselman Principal, Mercer801.533.3658 [email protected]

Kelly Esselman is a growth-oriented leader with over 25 years of experience in HR, sales, management and consulting. Kelly is currently the Business Leader for Mercer's Employee Health and Benefits team for the Mountain States Region comprising of Salt Lake City, Denver, Phoenix and Boise. In this role, she leads a team of 100 consultants. She is focused on creating deep and lasting relationships with clients and developing solutions that deliver impact to clients and their bottom lines.

Denise M. Keyser Partner, Ballard Spahr856.761.3442 [email protected]

Denise M. Keyser has more than 30 years of experience representing national, regional, and locally based businesses in labor and employment matters, including traditional labor law (such as collective bargaining and arbitrations), OSHA, ERISA, wage and hour, employment-at-will, wrongful discharge, discrimination, management training, executive compensation, and affirmative action.

Denise has handled numerous labor arbitrations on both disciplinary and contract interpretation issues. She has experience before a wide range of federal and state agencies, including the National Labor Relations Board and the Equal Employment Opportunity Commission. She has litigated the gamut of employment and labor law cases in both state and federal courts. In addition, she has worked closely with clients in strategic planning, policies and handbooks, implementing reductions in force and severance programs, resolving compliance issues, developing labor strategies, providing management training programs in response to issues such as #MeToo, and in day-to-day employment counseling.

Speaker Profiles

Tiffiny Lipscomb AVP HR Operations, Intermountain Healthcare801.442.2002 [email protected]

Tiffiny Lipscomb is currently the Human Resources Manager for Intermountain Medical Center with over 5,000 employees, 150 leaders, and a staff of 10 Human Resources Professionals. Tiffiny recently transferred from Riverton Hospital where she worked for six years as the Human Resources Manager with a dual role as Assistant Administrator. Previous roles include Human Resources Consultant for LDS Hospital, Intermountain Medical Center, Cottonwood Hospital and part of the start-up team for Intermountain Medical Group.

Kerry Norman Head of Talent Management, CHG Healthcare Services801.930.4378 [email protected]

Kerry Norman is Vice President and Senior Leader of the Talent Management group at CHG Healthcare in Salt Lake City. She leads the talent acquisition, learning and development, compensation, benefits, employee relations, people analytics and talent management technology teams. Prior to joining CHG in April of 2017, she spent 17 years at the Capital Group Companies in Los Angeles in a variety of HR leadership roles. Previously, she was a talent acquisition leader at FedEx where she focused on hiring for all operations in their western region. She started her career at Prudential Financial in their accelerated leadership development program.

Kerry holds a B.A. from Boston College in Economics and has participated in the executive leadership program at the Kellogg School of Management.

Brian D. Pedrow Partner, Ballard Spahr215.864.8108 [email protected]

Brian D. Pedrow leads the nationwide Labor and Employment Group. He represents employers and management in the full scope of matters related to employment, labor, and employee benefit disputes. Mr. Pedrow's practice includes all facets of employment-related litigation, such as discrimination, harassment, retaliation, breach of contract, and employment-based torts. He also has a significant practice representing benefit plans, fiduciaries, and plan sponsors in Employee Retirement Income Security Act (ERISA) litigation arising from benefits eligibility disputes, breach of fiduciary litigation, and interference with benefits claims. Mr. Pedrow's traditional labor practice includes both private and public sector labor negotiations, arbitrations, unfair labor practice charges, and related matters.

Speaker Profiles

Steven W. Suflas Partner, Ballard Spahr303.299.7326 [email protected]

Steven W. Suflas is the former Managing Partner of the Denver and New Jersey offices and a nationally recognized thought leader on labor and employment issues. He represents management in all phases of labor and employment matters — from preventative counseling and strategic guidance to collective bargaining, appearances before regulatory agencies, and litigation before courts and administrative agencies. He works closely with employers — both large and small, national, regional, and local — in responding to the daily challenges of the workplace.

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Utah Fall Employment Law SeminarNovember 13, 2019 | Salt Lake City

Ninth Annual Fall Employment Law Seminar

NOVEMBER 13, 2019| SALT LAKE CITY


2019 Employment Law Year in Review

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AGENDA

1. Utah Employment Cases

2. Tenth Circuit Cases

3. US Department of Labor: Wage & Hour

4. Salary History Bans

5. Supreme Court Decisions & On the Horizon

6. National Labor Relations Board

7. Sexual Stereotyping & LGBT Protection

8. New Utah Legislation

9. Health and Welfare Benefits Update

Utah Fall Employment Law SeminarNovember 13, 2019 | Salt Lake CityUtah Fall Employment Law SeminarNovember 13, 2019 | Salt Lake City

Utah Employment Cases

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Escort & Sexually Oriented Business Licenses

• Salt Lake City v. Kidd, 2019 UT 4

– Utah Supreme Court sided with the city, holding that licenses for sexually oriented business are only valid in the jurisdiction in which they are issued.

– Kidd had a license valid in Midvale but not SLC, and despite the Midvale and SLC licenses having the same criteria, the Court found that Kidd was still required to obtain a license for each jurisdiction her business extended to.


Confession of Judgment

• Bradburn v. Alarm Protection Technology LLC, 2019 UT 33.

– Utah Supreme Court held that state law allows for complete substitution of a plaintiff, and dismissed a claim brought by a former employee over unpaid wages.

– The employer executed a confession of judgment and substituted itself as plaintiff in the case and dismissed the suit.

– The Court found no error, and held that complete substitution was appropriate because the former employee no longer had any right to pursue his former claims.

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Workers’ Compensation

• Intercontinental Hotels Group v. Utah Labor Commission, 2019 UT 55.– Utah Supreme Court affirmed the award of WC benefits

finding that it was not error to conclude that claimant’s injuries arouse out of and in the course of her employment.

– Claimant tripped and fell in a parking lot while walking into work. The employer denied the claim under the going-and-coming rule.

– The Utah Labor Commission determined that the communal parking area where the injury occurred was part of the employer’s premises, and that claimant would not have been there if she wasn't obligated to report to work.


Termination to Avoid Payment

• Vander Veur v. Groove Entertainment Technologies, 2019 UT 64.

– Utah Supreme Court reversed the Court of Appeals and held that the implied covenant of good faith fair dealing may not be applied to contradict express contractual terms.

– Plaintiff claimed he was fired so the employer could avoid paying owed commissioned in violation of the implied covenant of good faith and fair dealing.

– The express terms provided that commissions were only due for contracts that had been installed and if Plaintiff was still employed; neither of which were the case with the claimed commissions.

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Employee Classification

• Zak v. Department of Workforce Services, 2019 UT App 43 (Utah Ct. App.).

– Day spa improperly classified workers as independent contractors, and employer was liable for unfurnished contributions to unemployment compensation fund.

– The Plaintiff could not establish that the workers were independently established in their own trade, occupation, profession or business providing similar services to those at issue and thus could not prove that the workers were properly classified as independent contractors.


Governmental Immunity & Wrongful Termination

• Conner v. Department of Commerce, 2019 UT App 91 (Utah Ct. App.).

– Plaintiff appealed the dismissal of her wrongful termination claim against the state and on the last day before trial, the state asserted governmental immunity to dismiss the appeal.

– The Court affirmed the district court’s granting of the State’s assertion of immunity because the statute upon which the claim was brought did not provide for a private right of action.

• Her claims were based in tort for which the State maintained immunity and while the Plaintiff argued that her claims should have been interpreted as raising a statutory enforcement claim, the statute upon which she attempted to rely does not provide a private right of action.

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Termination

• MacFarlane v. Career Service Review Office, 2019 UT App 133 (Utah Ct. App.).

– Plaintiff, a Peace Officer Standards and Training (“POST”) investigator, was fired after it was discovered that he lied about extramarital affairs, impeded an investigation into a police officer’s conduct, and had other performance and conduct issues.

– Plaintiff challenged his termination on the grounds that the decision to terminate was arbitrary.

– The Court upheld the Agency’s termination decision, finding substantial evidence that the Plaintiff was dishonest when initially questioned about the affairs and when impeding the investigation.


The Federal Courts

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FMLA Leave – Be Specific

• Simon v. City & Cty. Of Denver, 2019 U.S. Dist. LEXIS 28802 (10th Cir. Sep. 24, 2019).

– Simon was a police officer whose request for a specific amount of leave was denied by her employer.

– What she did not tell her employer, was that the request was for caring for her disabled mother on a trip to Portugal to attend the wedding of Simon’s sister (and the mother’s daughter).

– The failure to be straightforward in tying her leave to a likely FMLA qualifying reason led the District Court to enter summary judgment for the employer, and an affirmance from the Tenth Circuit.


FLSA & The Marijuana Industry

• Kenney v. Helix TCS, Inc., 939 F. 3d 1106 (10th Cir. 2019).

– In September, the Tenth Circuit held that the FLSA’s overtime provisions apply to employees engaged in states’ marijuana industries.

– The plaintiff worked as a security guard in Colorado’s recreational marijuana industry and claimed he was improperly classified as exempt and entitled to overtime compensation.

– The employer sought to dismiss the suit, arguing that the plaintiff was not subject to FMLA protection because he was working with an illegal schedule 1 drug under the federal Controlled Substances Act (“CSA”).

– The district court rejected that argument holding that employers were not exempt from the FLSA because their business does not comply with federal law.

– The Tenth Circuit affirmed and stated that no inherent conflict existed between the FLSA and CSA.

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Change in Role = Change in Status

• NLRB v. Wolf Creek Nuclear Operating Cop., 762 F. App’x461 (10th Cir. 2019).– Tenth Circuit enforced an order of the NLRB finding that certain

employees were non-managerial employees and thus had to be bargained with.

– These employees, known as buyers, purchase supplies and items for Wolf Creek, and were previously classified by the NLRB as managerial employees in 2000.

– However, changes to Wolf Creek’s procurement processes altered the roles of the employees reducing their discretion and independence in the course of their purchasing decisions for Wolf Creek.

– That change is what lead to the reversal and the determination that the employees were not managers and could be represented by the IBEW.


Independent Contractors

• Acosta v. Jani-King of Okla., Inc, 905 F.3d 1156 (10th

Cir. 2018).– DOL sued a janitorial company,

for misclassification of its workers as employees.

– Jani-King required all workers to work through franchise agreements.

– The District Court dismissed the case for failure to state a claim, asserting the FLSA only applied to “individuals”.

– The DOL appealed.

– 10th Circuit reversed and remanded the case, instructing the district court to look at the economic realities factors.

– It concluded that the label or structure of a relationship, e.g. corporate-franchisee, does not determine the status of a worker.

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Racial Dossier Not Discriminatory

• Sasser v. Salt Lake City Corp., 772 Fed. App’x 651 (10th Cir. 2019).– The Tenth Circuit declined to revive an African American Salt Lake City golf

course worker’s claims that he was refused a promotion because of his race.

– The Panel dismissed concerns that a member of the selection committee deciding on the promotion, and the Plaintiff’s boss, had compiled a race-based dossier on the Plaintiff. The selection committee member stated he created the dossier in case the Plaintiff ever “play[ed] the race card.”

– However, the Panel found that given the section criteria and process, even if certain committee members were racially-biased, it would not have cost the Plaintiff the promotion.

– The Panel also held that the only evidence of racial animus was the dossier, and found that the dossier was only a precautionary measure and not a symptom of invidious animus.


Massage School Full of Students Not Employees

• Nesbitt v. FCNH, Inc. et al., 908 F.3d 643 (10th Cir. 2018).– In a late 2018 decision, the Tenth Circuit held that massage therapy

students at a multi-state, for-profit vocational school are students, and not employees in response to a former student’s claims that she and the other students should have been paid minimum wage for the reduced cost massages they performed to meet clinical requirements to obtain a license.

– The district court applied the 6-factor test DOL test for determining whether a trainee is an employee, and four of the factors suggested that the students were not employees. The same result was reached under the totality of the circumstances and economic realities tests.

– On appeal the Tenth affirmed noting that the massages were providing a benefit to the students (advancement towards licensure) and that the students knew and understood there would be no compensation.

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Marijuana Still Illegal Above State Lines

• Siegel v. Administrator of the FAA, 916 F.3d 1107 (D.C. Cir. 2019).

– The D.C. Circuit unanimously upheld the revocation of a Utah pilot’s certificate after the pilot was forced to make an emergency landing in Kansas where it was discovered that he was transporting marijuana chocolate bars.

– The Panel rejected the Plaintiff’s arguments that several “mitigating factors” such as the chocolate bars being purchased in Colorado, should result in his certificate being reinstated.

– It made no difference that the chocolate bars were purchased in Colorado where they are legal, as marijuana is still illegal under federal law and in federal airspace.


US Department of Labor: Wage & Hour

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DOL Rulemaking

• Three DOL rulemaking processes:

– Overtime exemption – salary thresholds

– Overtime -- regular rate of pay

– Joint employers


Salary Thresholds

• DOL issued final rule on Tuesday, September 24, 2019.

• Adopted expected threshold of approximately $35,000 for salary basis test, and $107,432 for highly compensated exemption.

• No automatic escalator built into salary thresholds; no plan to revisit threshold every four years.

• Rule takes effect on January 1, 2020.

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Salary Thresholds

Category Existing Salary Threshold

March 2019 Proposed Salary Threshold

White Collar Exemption Salary

$455 per week or $23,660 per year

$684 per week or $35,568 per year*

HighlyCompensated

Threshold$100,000 per year $107,432 per year

Employers can include nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the salary level and permit certain year-end “catch up” payments.


Regular Rate

• On March 28, 2019, DOL announced rulemaking on “regular rate” of pay

• The proposed regular rate would clarify exclusion of several non-wage payments and perks:

- Wellness programs and gym memberships

- Employee discounts on retail goods and services

- Tuition programs and repayment of educational debt

- Discretionary bonuses

- Payments for unused leave (e.g., sick leave)

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Fluctuating Workweek

• New Proposed Rule on Fluctuating Workweek:

– On November 5, the DOL unveiled a new proposal that aims to provide employers more flexibility in calculating overtime pay for workers with inconsistent schedules.

– The proposal provides that employers who offer bonuses and premium payments based on productivity or the number of hours employees work should be able to use the “fluctuating workweek” method of calculating overtime under the FLSA.

– The proposal also seeks to clarify a burgeoning distinction in the courts: whether additional pay is “productivity-based” or “hours based” as the proposal provides that additional pay of any kind on top of fixed salary would be compatible with the fluctuating workweek method.


Joint Employment

• On April 1, 2019, DOL proposed a new joint employer standard:

Relevant Factors:

• Who hires/fires?

• Who supervises, schedules and controls working conditions?

• Who determines method and rate of pay?

• Who maintains employment records?

Irrelevant Factors:

• Economic dependence on potential joint employer.

• Special skill, initiative, judgment, or foresight.

• Opportunity for profit or loss based on managerial skill.

• Investment in equipment or materials required for work.

• Employment of helpers or assistants.

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Examples

• Office park that pays a janitorial service a fixed fee to clean the space after hours is NOT joint employer, even if it reserves right to supervise those workers.

• Country club that uses contract landscapers is a joint employer if it assigns tasks; gives them “periodic instructions during each workday,” and keeps intermittent records of their work.

• Hotel franchiser that gives franchisees sample job applications, employee handbooks, and other documents is NOT joint employer if it uses “industry-standard” licensing agreement that makes franchisee solely responsible for hiring and firing, setting pay rates, and supervising work.


NLRB: Joint Employment

• Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017):

– Board returned to direct control standard for determining joint employer status (attempting to overrule Browning Ferris).

– On February 9, 2018, NLRB Inspector General report found Member Emanuel should have been disqualified from participating in Hy-Brand. Decision was vacated.

• D.C. Circuit upheld Browning Ferris decision in December 2018, accepting common law right to control test.

• NLRB commenced rulemaking on issue. No final rule issued yet, but if adopted, rule would restore Hy-Brand standard.

• Today: Browning Ferris continues to be controlling case!

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Salary History Bans


Salary History Inquiries

• Several state and local governments have implemented prohibitions on making wage history inquiries as part of hiring process and use of this information in setting new hire compensation.

– Advocates say that employers set salaries for new hires based on previous pay, perpetuating past wage inequity.

– Critics say restrictions impede First Amendment free speech rights.

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Salary History Bans

Statewide Bans Local Bans

Alabama Albany County, NY

California Cincinnati, OH

Colorado Chicago, IL

Connecticut Kansas City, MO

Delaware New York City, NY

Hawaii Philadelphia, PA (on hold)

Illinois Salt Lake City, UT

Maine San Francisco, CA

Massachusetts Suffolk County, NY

New Jersey Toledo, OH

New York State Westchester County, NY

Oregon

Puerto Rico

Vermont

Washington

The above list does not include jurisdictions with bans applicable to public sector employers only.


Banning the Ban

• Some states are “banning the ban” by prohibiting by law local jurisdictions from passing salary history bans:

– Michigan: Effective June 24, 2018, prohibits local governments from regularly information employers request, require or exclude in the apoliation and interview process.

– Wisconsin: Effective April 18, 2018, local governments may not prohibit employers from soliciting salary history of prospective employees.

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Salt Lake City

• Salt Lake City’s Gender Pay Equity Policy

– Applies to city employers

– Prohibits pay decisions, including new hire pay determines, merit increases and promotional offers, based on gender.

– Individuals participating in a city hiring process are prohibited from asking applicants about their current or past salary history.

• Even if applicant voluntarily discloses their salary history, city employers cannot rely on such information as the basis for any salary offer made to that applicant.

– Provides for audits to evaluate gender pay equity.


The Supreme Court

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Data Privacy

• Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (June 24, 2019)– FOIA exemption for confidential information “both customarily and

actually treated as private by its owner and provided to the government under an assurance of privacy.”

• Businesses can better cloister their employee pay data and other private workforce information FOIA request.

– EEO-1 information is not disclosed through FOIA requests.

• But third parties can request the info from DOL Office of Federal Contract Compliance programs for employers who are also government contractors.


EEOC Exhaustion is Not Jurisdictional

Fort Bend County v. Davis, 130 S. Ct. 1853 (June 3, 2019).

• Ruling: Title VII’s administrative exhaustion requirement is not jurisdictional, but rather just one element of making a discrimination claim.

– Implication: The onus is on employers to promptly raise objections to get lawsuits tossed on that procedural ground or risk losing the defense.

– This includes cases in which a worker files an administrative charge but later adds other claims in a lawsuit that weren’t presented to the agency.

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Arbitration

• New Prime Inc. v. Oliveria, 139 S.Ct. 532 (Jan. 15, 2019).

– In January, the Supreme Court unanimously held that Section 1 of the Federal Arbitration Act (“FAA”) excludes from its coverage interstate truck drivers, even if classified as independent contractors.

• Further held that a court, not an arbitrator must determine, at the outset, whether Section 1 exclusion applies even when the agreement delegates questions of arbitrability to the arbitrator.

– Rejecting the company’s argument that because the truck drivers was not an employee, Section 1’s exemption relating to “contracts of employment” did not apply, the Court held that the statute was intended to coverall all relationships between workers and employers.


More on Arbitration

• Henry Schein Inc. v. Archer and White Sales Inc., 139 S. Ct. 524 (Jan. 8, 2019).

– Holding that where the parties expressly delegated authority to an arbitrator to determine arbitability, a court cannot act in place of the arbitrator.

– Reversed Fifth Circuit decision, finding the exception applied by that court as “wholly groundless.”

• Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (Apr. 24, 2019).

– Class arbitration is permissible only if the arbitration agreement expressly provides for such resolution.

– If an arbitration agreement governed by the FAA is not clear as to the parties’ intent to submit to class arbitration, class arbitration is not permitted.

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Equal Pay Act

• Yovino v. Rizo, 139 S. Ct. 706 (Feb. 25, 2019).

– The Ninth Circuit had rejected the defendant-employer’s argument that the “catch-all” exception to the Equal Pay Act included consideration of an employee’s prior salary.

– The Ninth Circuit held that consideration of prior salary, either alone or with other factors, could not justify a wage differential under the Equal Pay Act.

– However, after the decision, but before issuance of the Opinion, the author of the Opinion died.

– Without commenting on the underlying findings of the case, the Court determined that because the authoring judge was not active when the decision was issued, he was “without power” to participate in the en banc court’s decision at the time it was rendered. Solely on that basis the case was remanded.


ADEA Application

• Mount Lemmon Fire District v. Guido, 139 S. Ct. 22 (Nov. 6, 2018).– At-issue was whether small

public employers, less than 20 employees, are covered employers under the ADEA.

– The Court held that language of the ADEA illustrated Congress’ intent to include all state offices as employers, regardless of size.

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Agency Deference

• Kisor v. Wilkie, 139 S. Ct. 2400 (Jun. 26, 2019).

– Analyzing whether and when courts should grant a federal agency deference to interpret its own ambiguous rules and regulations, the Court held upheld, but narrowed what is known as Auer deference.

– The Court reasoned that agency deference is rooted in a presumption of congressional intent for the agency to play the primary role in resolving regulatory ambiguities.

– However, the Court also sought to “clarify” the scope of that deference.

– Deference cannot come into play unless the regulation is “truly ambiguous” and the interpretation is reasonable and the Court want as far as offering criteria to be considered when making those determinations

• Official position of the agency and implicate its substantive expertise


On the Horizon

• LGTBQ Cases

– Does Title VII extend to sexual orientation and gender identity?

• Benefits Disclosures

– Whether ERISA’s 3 year limitations period is tolled where an employee did not read the plan documents?

• Worker Bias Standards

– What is standard of proof for federal workers alleging age discrimination under the ADEA?

– Whether the ADEA allows applicants to being disparate impact claims?

– Does Section 1981 call for but-for causation?

• Working Time

– Is time spent by employees undergoing security checks when leaving the job site compensable?

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National Labor Relations Board


Boeing Decision & Employer Policies

• The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017)

Overturns Lutheran Heritage and creates a new test forworkplace policies, which considers:

1. the nature and extent of the potential impact on Section 7 rights and

2. the legitimate justification associated with the rule.

In Boeing, the Board upheld a policy prohibiting cameras in theworkplace without first demonstrating a business need andobtaining a permit.

Board found that the employer’s justifications—includingnational security concerns—outweighed the potential impact onprotected activity.

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Applying Boeing

• LA Specialty Produce Company, 368 NLRB No. 93 (Oct. 10, 2019).

– First time since Boeing was published the Board had opportunity to clarify and apply its analysis to facially neutral work rules.

• The first rule analyzed was a confidentiality rule prohibiting disclosure of client/vendor lists.

– Board stated it could not see how this rule would interfere with Section 7 rights as the rule applied only to the employer’s own proprietary records – no reasonable employee would find this rule to interfere.

• The second rule prohibited employees speaking to the media.

– Media contact is generally protected under the NLRA.

– However, the Board held that a reasonable employee would understand this rule only prevents speaking on behalf of the company and not speaking to the media generally.


Applying Boeing (Cont.)

• LA Specialty Produce Company, 368 NLRB No. 93 (Oct. 10, 2019).

– The Board strongly reiterated and confirmed that under Boeing, the burden is on the General counsel to prove that a facially neutral rule would be interpreted to potentially interfere with Section 7 rights.

– Even if it is a determined that a facially neutral rule would potentially interfere with NLRA rights, the Board will then balance the potential impact on those rights against the employer’s justification for the rule.

24


Sexual Stereotyping & LGBT Protections


Who’s Who?

• EEOC is five-member commissioner – with two vacancies.

• On July 3, 2019, President nominated U.S. Department of Labor official Keith Sonderling.

• In August 2019, Sharon Fast Gustafson was confirmed as General Counsel and Burrows was confirmed for another term.

Vacant Vacant

V. Lipnic (R)Term ending

7/1/20

C. Burrows (D)

Term ending 7/1/23

CHAIRJ. Dhillon (R)Term ending

7/1/22

25


Sex-based Stereotyping

• Parker v. Reema Consulting Services Inc., 915 F.3d297 (4th Cir. 2019)

– Employee’s claim that her employer helped spread rumor that she exchanged sex for a promotion may give rise to liability under Title VII.

– Implicates negative stereotypes about women in the workplace.

• Supreme Court has consistently held that prohibited discrimination encompasses adverse actions taken by employer based on employee’s failure to conform to stereotypical traits or norms.


LGBT Rights

• Battle continues over whether Title VII’s sex discrimination prohibition reaches sexual orientation and gender identity.

• EEOC says yes; DOJ says no ... leading to contradictory outcomes in federal courts.

• US Supreme Court agreed to hear three cases presenting the question:

– R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC

– Altitude Express, Inc. v. Zarda, U.S.

– Bostock v. Clayton County, Georgia.

• Oral argument held Oct. 8, 2019.

26


Defined Benefit Plans – Actuarial Tables

• In December 2018, plaintiffs sued U.S. Bank, Metlife, Pepsi and American Airlines, claiming defined benefit plans used outdated mortality tables to calculate annuity payments, causing the plaintiffs to lose vested retirement benefits.

– DuBuske, et al. v. PepsiCo, Inc., et al., 7:18-cv-11618 (S.D.N.Y. Dec. 12, 2018).

– Masten, et al. v. Metropolitan Life Insurance Company, et al., 1:18-cv-11229 (S.D.N.Y Dec. 3, 2018).

– Martinez Torres, et al. v. American Airlines, Inc., et al., 4:18-cv-00983 (N.D. Tex. Dec. 11, 2018).

– Smith, et al. v. U.S. Bancorp, et al., 0:18-cv-03405 (C.D. Minn. Dec. 14, 2018).

• The mortality tables were based on mortality data from the 1970sand 1980s, when people had shorter life expectancies.


Defined Benefit Plans – Actuarial Tables (cont.)

• ERISA and the Internal Revenue Code require that certain pension benefits be “actuarially equivalent” or calculated using “reasonable actuarial assumptions.”

• Plaintiffs requested the following relief:

– Re-calculation, correction and payment of benefits, using updated tables; and

– Disgorgement of profits earned on amounts wrongfully withheld.

27


Defined Benefit Plans – Actuarial Tables (cont.)

• Cases are in early stages of litigation. So far, plaintiffs have survived a motion to dismiss in one pending case.

– See Smith, et al. v. U.S. Bancorp, et al., 0:18-cv-03405 (C.D. Minn. Dec. 14, 2018).

• Other employers that use outdated tables could face significant liability if claims succeed or result in settlements.

• These lawsuits present a new area of legal exposure for employers that sponsor older pension plans with outdated actuarial tables.

• Cost of defending this claim could include expert actuarial witnesses, extended litigation and if successful, payment of additional benefits to thousands of participants.


Utah Statutes

28


Oppressive Corporate Conduct

• S.B. 113

– Creates a private cause of action for a shareholder of a closely held corporation who is injured by oppressive conduct.

• Termination of shareholder’s employment

• Limitation on the shareholder’s employment benefits that interfere with the distributions

– Oppressed shareholders may seek through private action against the corporation:

• Purchase of the shareholder’s shares at fair value from the corporation, an officer, a director, or the shareholder responsible for the oppressive conduct.


Restrictive Covenants/Judgement by Confession

• H.B. 199

– Amends provisions regarding the permissible duration of employment contracts containing a post-employment restrictive covenant for broadcast employees and limits enforcement of agreements to confess judgment.

– Removes the prior 4 year limit on such restrictive covenants and replaces it with a “reasonable duration” requirement.

– Voids agreements to confess judgement if the agreement is executed after May 14, 2019 and before a default giving rise to an action in which the judgement under the agreement is to be confessed.

29


Veteran’s Preference/Criminal History Questions

• S.B. 221

– Permits private employers to create a veterans employment preference policy which extends to the veteran’s spouse.

• H.B. 212

– Prohibits public employers from inquiring into an applicant’s expunged criminal history, except in limited circumstances.

– Allows applicants to answer questions regarding criminal history as if the expunged offense never occurred.


Emergency Service Volunteers

• H.B. 173

– Prohibits employers from terminating an employee solely for being an emergency services volunteer, or for being absent from or late to work, if the employee was responding to an emergency as an emergency services volunteer.

– Employers may request proof that the employee was in fact responding to an emergency.

– Any time form work missed is unpaid.

30


Amended Utah Medical Marijuana

• In September, Governor Herbert signed Utah’s revised medical cannabis law– Does away with state-run

dispensaries;

– Doubles the number of private cannabis pharmacy licenses; and

– Allows for home delivery

• With the amendments, Utah is still on track for its rollout of medical marijuana in March 2020.


Amended Utah Medical Marijuana

• Effect on employment laws?

– The amendments also provide that a court cannot consider the use of medical marijuana differently than the legal use of any prescribed medication that is a controlled substance.

– States and courts have struggled with applying medical marijuana use to employment laws and policies.

– Ensure polices and procedures are up to date and plans are in place.

31


Health & Welfare Benefits Update


Bipartisan Support in Congress for Key Measures

• Lower Health Care Costs Act (S1895)– Ends surprise medical bills

– Reduces prescription drug prices

– Improves transparency

– Improves exchange of health information

• Cadillac Tax

– House voted in favor of repeal

– Senate currently considering; lack of revenue offsets and other healthcare priorities are main hurdles

• PCORI Fee– May be reauthorized

• Watch Funding Bill

32


Executive Branch Continues Guidance & Enforcement Efforts

• ACA– Employer Shared Responsibility reporting enforcement continues

– Preventive care guidelines updated

– Initial Out of Pocket Maximum guidance regarding drug coupons released, then walked back

– New proposed Section 1557 nondiscrimination regulations issued, potentially impacting requirements for coverage of gender transition/confirmation services

• MHPAEA & HIPAA

– MHPAEA FAQs finalized; new HIPAA FAQs issued, focusing on apps

– HIPAA maximum penalties reduced

– MHPAEA & HIPAA enforcement continues

• Executive Orders– Remaining guidance related to 2017 Executive Order issued, creating Individual Coverage and

Excepted Benefit HRAs (ICHRAs and EBHRAs, respectively)

– 2019 Executive Order issued, expanding “preventive care” that qualifying HDHPs can provide for chronic conditions without interfering with HSA eligibility


Litigation: Never a Dull Moment

• Texas v. United States– Federal district court declares ACA unconstitutional

– Impact of ruling stayed

• State of New York v. United States Department of Labor

– Administration’s 2018 Association Health Plan regulations vacated

• AARP v. Yale– AARP alleges Yale’s wellness program is not “voluntary” under the ADA, even though $25/week

penalty is within now-vacated ADA wellness regulations

• Peterson v. UnitedHealth Group, Inc.– Eighth Circuit Court of Appeals holds that UnitedHealth Group’s use of cross-plan offsetting was

not permitted by plan documents

– DOL amicus brief argues that the practice violates ERISA

33


State Developments

• Paid Family & Medical Leave– States continue to enact new state programs

• State Individual Mandates

– Mandates include requirements for coverage and employer reporting

– California, Massachusetts, New Jersey, Rhode Island, Vermont, Washington D.C.


Questions

34


Health & Welfare Compliance Update


Agenda

1. PRESIDENTIAL CANDIDATE PROPOSALS

2. FEDERAL LEGISLATIVE UPDATE

3. ACA UPDATE

4. EXECUTIVE ORDERS

5. OTHER REGULATORY UPDATES

6. LITIGATION UPDATE

7. STATE UPDATE

35


Presidential Candidate Proposals


Health Policy in a Divided Congress

Democratic presidential candidates push for “Medicare for All.”

Sen. Bernie Sanders’ bill would enroll all US residents in single plan, eliminate employer-based coverage; estimated cost of $33 trillion.

Moderate Democrats want to expand Medicare, strengthen the ACA.

Biden plan would create public plan option, expand ACA subsidies.

Centrist lawmakers propose Medicare buy-in for older workers or early retirees, earlier eligibility for Medicare, and public plan option in individual market.Little Republican agreement on

what’s next if ACA struck down by courts.

Republicans say they would restore protections for preexisting conditions, but could the two parties agree on response in heat of presidential campaign?

36


Medicare-for-All• Key provisions:

– Cradle to grave Medicare coverage

– No out-of-pocket costs except modest Rx copays

– 100% coverage

• Employer, private coverage virtually eliminated

• Provider reimbursement tied to Medicare rates

• Total cost projected to be $32-40Tover 10 years

• Funded through potentiallysignificant fees and taxes paid byemployers

Sanders Warren

Sources: Current candidates are listed under their preferred reform approach and their stance on preserving private coverage as described on the campaign trail and on their websites. Candidate images are from their US Senate pages.


Key Questions in Creating a Medicare-for-All Single-Payer System

37


Medicare Buy-In (Ages 50-64)

• Current legislation would build on existing health care market and infrastructure

– Individuals ages 50-64 could buy into Medicare

– Current Medicare benefits and cost share

• Private coverage: Current sources continue, including employer-sponsored health plans

– Some employers may welcome new option for early retirees

• Provider reimbursement: Private and publicreimbursement rates continue


Public Plan Option

• Pending legislation would create a federal public plan option for individuals eligible to participate in ACA exchanges

– Employers could help finance exchange plan for employees

• Private coverage: Current sources continue, including employer-sponsored health plans

• Provider reimbursement: Private and public reimbursement rates continue

Bennet Biden Buttigieg Klobuchar Steyer Williamson YangSestak

Sources: Current candidates are listed under their preferred reform approach and their stance on preserving private coverage as described on the campaign trail and on their websites. Candidate images are from their US Senate/House webpages or official campaign websites.

38


Presidential Candidates Who Support the Continuation of Private Coverage

Source: Current candidates are listed under their preferred reform approach and their stance on preserving private coverage as described on the campaign trail and on their websites. Candidate images are from their US Senate/House webpages or official campaign websites.

Castro DelaneyBennet Biden Buttigieg

Klobuchar Steyer Williamson YangHarris

Gabbard

Messam

PR

ES

ER

VE

Sanders Warren

EL

IMIN

AT

E

SestakBookerU

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2020 Election Scenarios

• Democrats would have to win White House and Senate control to seriously consider Medicare-for-All.

• Even if that were to happen, intraparty differences, opposition from industry groups and policy challenges would make enactment unlikely.

Source: Election Risk Report 2020, Capital Alpha Partners, Oct. 9, 2019

TOP SCENARIO ODDS

39


Federal Legislative Update


Reform Package Heading to Senate VoteLower Health Care Costs Act (S1895)

Strong bipartisan support

End surprise medical bills

Faces battle over how to settle payment disputes with out-of-network providers.

Median contracted in-network rates vs. ‘baseball-style’ arbitration.

Preempts state law for self-funded ERISA plans.

Reduce prescription drug prices

Includes incremental reforms aimed at getting more generic drugs to market.

Bans spread-pricing by PBMs; requires passing rebates through to employers.

Improve transparency

Bans anti-tiering/steering clauses in contracts between providers, health plans.

Improve exchange of health information

Creates a nonprofit entity to create an all-payer claims database, combining de-identified claims from private plans (including self-funded), Medicare and states.

40


Proposals to Repeal ACA ‘Cadillac’ Tax

SENATE

Senate bill (S 684) has 61 bipartisan cosponsors but faces challenges.

Lack of revenue offsets and other health care priorities are main hurdles.

Repeal effort is part of a broader campaign to educate policymakers about the value of the employer-based health care system.

HOUSE

Middle Class Health Benefits Tax Repeal Act (HR 748) passed by vote of 419-6.

No “pay-fors” to offset $197 billion revenue loss over 10 years.

Another two-year delay may be in play as 2022 effective date nears.

Some senators don’t see urgency as employers push for action now.


Probable DevelopmentsACA PCORI FEE

• ACA created Patient-Centered Outcomes Research Institute to support clinical effectiveness research

– Funded in part by fees paid by certain health insurers and sponsors of self-insured health plans

• Fees applied to policy and plan years ending after October 1, 2012 and before October 1, 2019

– For calendar policy/plan years: 2012 through 2018

– 2018 plan or policy year is the last year for which PCORI fees apply

• PCORI could be re-authorized

– House and Senate negotiators are currently leaning towards a 10-year extension, perhaps with changes

– Timing of potential bill is unclear

41


ACA Update


Texas Federal Court Declares ACA InvalidAppeals Heard

COURT’S RULING

• A federal district court ruling (Texas v. U.S.) on December 14, 2018 agreed with 20 GOP-led states, declaring the ACA unconstitutional because:

– Congress’ reduction of the individual mandate to $0 as of January 1, 2019 means the individual mandate is unconstitutional

– Individual mandate can’t be severed from the ACA

• Trump administration (DOJ) initially argued that only certain parts of the ACA should be struck down

• Reversing course, administration indicated on March 25th that it supports the district court’s ruling that the entire law is unconstitutional

• Oral arguments heard by appeals court on July 9, 2019

EFFECTS OF RULING

• No immediate effect on the ACA, but the decision may eventually reach the US Supreme Court

• The decisions leaves lawmakers focused on protecting:

– Requirement of guaranteed issue,

– Prohibition on pre-existing condition exclusions, and

– Other insurance market reforms

• Employers should continue to comply with ACA – for example, employer shared-responsibility requirements, assessments, and reporting

42


Employer Shared ResponsibilityHow the payment works in 2020

No

You will not be subject to a shared responsibility payment.

1. Did you average 50 or more full-time and full-time equivalent employees in 2019?

(Aggregate ALE members)

2. Do you offer minimum essential coverage (MEC) to substantially all (95%) full-time employees (FTEs) and their dependent children (not spouses/domestic partners)?

(Disaggregate related members)

Annually, you will pay:

$2,570 x (total # FTEs – first 30 FTEs*)

Applies if at least one FTE receives tax-subsidized benefits for exchange coverage.

3. Does MEC offered to FTEs satisfy standards for both: (1) affordability (employee-only contribution for plan ≤ 9.78%** of an employer affordability safe harbor or employee’s household income), and (2) minimum value (60%)?

Annually, you will pay the lesser of:

$3,860 x FTEs receiving tax-subsidized benefits for exchange coverage

or

$2,570 x (total # FTEs – first 30 FTEs*)

You will not be subject to a shared responsibility payment.

$2,570 Non-Offering

Employer Payment

$3,860 Offering

Employer Payment

Yes

No

Yes

Yes

No

4. Do you have any FTEs to whom you do not offer MEC?

No

Yes

Notes

* Allocate the 30 FTEs across aggregated ALE members.

** For noncalendar year plans, use 9.86% until first day of plan year in 2020.


Ongoing ACA ESR Enforcement

• Applicable large employers (ALEs) remain subject to potential ESR assessments for failing to offer affordable, minimum-value coverage to full-time employees

• IRS continues to issue proposed assessments (Letter 226-J)

• Some employers have received IRS Letter 5699 about missing filings

• Good faith compliance relief extended again for incorrect or incomplete 2018 reports

• Penalties for late filings: $270/Form

• IRS beginning to issue proposed assessments for late filings

• Full repeal of employer reporting requirements unlikely

No indication IRS enforcement will slow down

2019 marks the fourth year of ACA reporting

43


IRS ESR Assessment Process

Employer responds to Letter 227

• Response required generally within 30 days of letter’s date

‒ Include payment, if agree

‒ Request preassessment conference with Office of Appeals, if disagree

4

IRS proposes assessment in Letter

226J• Letter includes:

− Preliminary calculation of amount owed

− Table itemizing proposed monthly assessment under Code Section 4980H(a) or (b)

− Employee premium tax credit listing (Form 14765)

1Employer responds

on Form 14764

• Response required generally within 30 days of letter’s date

− Request extension by phone

− Include payment, if agree

− Include signed statement of explanation, if disagree

2

Preassessment conference

• IRS Publication 5 includes information about appeal rights and preparing to protest IRS decision

5

IRS acknowledges employer response

with Letter 227

• IRS sends 1 of 5 versions

• Letter includes revised assessment, if any

3

IRS demands payment (if any) in Notice CP

220J• Notice sent if:

‒ IRS still determines that employer owes payment, or

‒ Employer fails to respond to either IRS letter

• Notice includes payment instructions

6


ACA Out-of-Pocket LimitsNon-grandfathered group health plans must limit annual in-network out-of-pocket costs for covered essential health benefits.

ACA OUT-OF-POCKET MAXIMUMS

2019 2020

Self-only $7,900 $8,150

Other-than-self-only $15,800 $16,300

REMINDERS

• HDHP OOP limits are different.

• The “embedded” OOP limit rule: Annual in-network OOPM for self-only coverage applies to each individual whether they are covered by a self-only plan or a plan that is other than self-only (e.g., family).

44


Drug Coupons and Out-of-Pocket CostsTemporary Non-Enforcement Policy

NEW RULE FROM 2020 NOTICE OF BENEFIT AND PAYMENT PARAMETERS

Amounts paid toward cost-sharing using any form of direct drug manufacturer support (e.g., a coupon or drug copay card) for brand drugs are not required to be counted toward a health plan’s annual out-of-pocket maximums where a generic drug is available and medically appropriate.

Effective for plans beginning on or after January 1, 2020.

Does the value of direct drug manufacturer support for brand drugs (particularly specialty drugs) have to be counted toward OOPM where a generic drug is not available?

AGENCY FAQ AND NON-ENFORCEMENT POLICY

DOL/IRS/HHS issued FAQ saying they won’t enforce the 2020 rule until further rules are published, likely the Notice of Benefit and Payment Parameters for 2021 expected in January or February 2020.

Acknowledged a conflict between compliance with the new rule and compliance with existing HSA eligibility rule that requires the exclusion of discounts when calculating out-of-pocket costs towards a HDHP deductible.

?


HSA and HDHP Limits

SELF-ONLY COVERAGE 2019 2020

Maximum tax-deductible HSA contribution $3,500 $3,550

HDHP minimum annual deductible $1,350 $1,400

HDHP out-of-pocket maximum $6,750 $6,900

FAMILY COVERAGE 2019 2020

Maximum tax-deductible HSA contribution $7,000 $7,100

HDHP minimum annual deductible $2,700 $2,800

HDHP out-of-pocket maximum $13,500 $13,800

CATCH-UP CONTRIBUTIONS 2019 2020

For individuals attaining age 55 by 12/31 until enrolled in Medicare

$1,000 $1,000

45


ACA-Mandated Preventive CareNon-Grandfathered Health Plans

PREVENTIVE SERVICES REQUIREMENT

• Non-grandfathered group health plans must provide in-network coverage of recommended preventive services on a first-dollar basis

• Coverage generally applies for plan years beginning on or after one year from date recommendation issued or updated– For example, 2018 recommendation would be effective January 1, 2020 for calendar-

year plans


ACA-Mandated Preventive CareNon-Grandfathered Health Plans (Continued)

NEW USPSTF RECOMMENDATION ISSUED

Skin cancer behavioral counseling for young adults, adolescents, children, and parents of young children

March 2018

Exercise interventions to prevent falls in community-dwelling adults 65 years or older who are at increased risk for falls

April 2018

Osteoporosis screening for women ages 65 years and older and postmenopausal women younger than 65 years who are at increased risk of osteoporosis, as determined by a formal clinical risk assessment tool

June 2018

Screening for cervical cancer with cervical cytology testing and/or high-risk human papillomavirus (hrHPV) testing every 3-5 years in women aged 21 to 65 years

August 2018

Offer or refer adults with a body mass index of 30 or higher to intensive, multicomponent behavioral interventions

September 2018

Unhealthy alcohol use screening and counseling for adults ages 18 or older, including pregnant women

November 2018

Perinatal depression counseling for pregnant and postpartum women February 2019

Preexposure prophylaxis (PrEP) medication for the prevention of HIV infection for persons who are at high risk of HIV acquisition

June 2019

46


ACA Section 1557 Proposed Changes

BACKGROUND

• ACA section 1557 prohibits certain health programs receiving federal assistance from discriminating on the basis of age, race, sex, disability, or national origin

• HHS rules issued in 2016 required these entities to provide notices of its non-discrimination policy, provide meaningful access to individuals by including taglines of language assistance in significant communications and develop grievance policies

• Discrimination on the basis of sex was interpreted to mean discrimination on the basis of gender identity, such that plans receiving federal assistance and excluding gender transition surgery and services may be in violation of the ACA

• Oct. 15th, 2019 district court vacated certain provisions of the final rule, including interpretation of “sex”

NEW PROPOSED RULES

• New proposed rules drop the gender identity interpretation, narrow the scope of entities subject to 1557, and reduce administrative requirements

• Proposed rules are being challenged and plans receiving federal assistance and excluding services for transgender individuals may be subject to state or federal civil rights scrutiny


Executive Orders

47


Fruits of 2017 Health Care Executive Order

2017 EXECUTIVE ORDER 13813

SHORT-TERM LIMITED

DURATION INSURANCE

ASSOCIATION HEALTH PLANS

HEALTH REIMBURSEMENT ARRANGEMENTS

(HRAs)


Health Reimbursement AccountsBackground

Pre-ACA

Employers can provide tax-free employer-funded accounts to employees to use for medical expenses, including premium reimbursement.

ACA

• HRAs are group health plans (GHPs).

• Many requirements for GHPs, including preventive care mandate and dollar limit prohibition.

• Stand-alone HRAs do not meet standards for GHPs.

• HRAs can be offered to active employees if integrated with group health coverage.

• Requires enrollment in group health coverage.

• Retiree-only HRAs can be offered as stand-alone arrangements.

Executive Order

• Trump issues EO instructing agencies (DOL/IRS/HHS) to find new ways to increase health coverage access.

• Calls on agencies to expand use and flexibility of HRAs.

New HRA Rules

• Rules proposed last fall allowed for HRA integration with individual coverage.

• Rules finalized in June and allow for HRAs to be integrated with individual

coverage and Medicare.

• Employers can also offer a new type of excepted benefit HRA.

• Effective Jan. 2020

48


Individual Coverage HRA (ICHRA)Overview

• May be offered only to certain classes of employees, some of which have minimum class size requirements

• To prevent adverse selection, cannot be offered alongside a traditional group health plan

– No choice between group health coverage and ICHRA

– Can be offered along side an FSA

• Qualifies as Minimum Essential Coverage (MEC) so can be used to satisfy Employer Shared Responsibility (ESR) requirements

• Class of employee determined within each common law employer consistent with ESR

New regulations permit “Individual Coverage HRAs” (“ICHRAs”) to reimburse individual policy premiums and Medicare, reversing rules under the prior administration


Individual Coverage HRAOverview (Continued)

• No limits on how much can be contributed to an ICHRA annually, or on how much may be carried over year-to-year

• IRS guidance provides a “location safe harbor” based on the employee’s primary site of employment and an “age-based safe harbor.”

‒ Household income could be determined under current affordability safe harbors (FPL, rate of pay, W-2).

• HRA offer creates special enrollment opportunity for individual coverage

• Must be offered on the “same terms” to employees within a class, except:

– Contribution amounts may vary based on

- Number of covered dependents

- Age, provided:

- Same maximum amount is available for all participants who are the same age, and

- Maximum amount for oldest participants cannot be more than three times maximum amount for youngest participants

– Proration for mid-year entry is permitted

– Employer may offer a choice of HSA-compatible HRA

49


Individual Coverage HRAReimbursements

• May reimburse employees for:

Individual health insurance premiums, except premiums for excepted benefits (e.g., stand-alone dental and vision policies),

Medicare Part A, Part B, Part C, Part D and Medicare supplemental premiums, and/or

Medical expenses incurred during a month in which the individual is enrolled in an individual policy or Medicare

– Advance substantiation of enrollment for the applicable month is required

• For individual policies sold outside public exchange employer may allow employees to make pre-tax contributions to pay balance of premium


Individual Coverage HRAPermissible Classes

• Full-time employees (as defined under Code Secs. 105 (35 hours) or 4980H (30 hours)

• Part-time employees (as defined under Code Secs. 105 (35 hours) or 4980H (30 hours)

• Seasonal employees (as defined under Code Secs. 105 (9 months) or 4980H (6 months)

• Salaried employees

• Non-salaried employees

• Employees whose primary site of employment is in the same insurance rating area

• Employees included in a unit of employees covered by a collective bargaining agreement

• Employees who have not satisfied an ACA-compliant waiting period

• Non-resident aliens with no U.S.-based income

• Staffing agency employees

• New hire sub-class

Permissible to combine classes

50


Individual Coverage HRAMinimum Class Size Requirement

• Applies only if a traditional group health plan is offered to one class and an individual coverage HRA is offered to one or more classes.

• Applies at the common law employer level, not at the controlled group level.

• Applies to those offered, not enrolled.

• Applies to classes of full-time, part-time, salaried and non-salaried employees, and employees whose primary site of employment is in the same rating area.

SIZE OF EMPLOYER MINIMUM CLASS SIZE

Employer with fewer than 100 employees 10 employees

Employer with 100 to 200 employees 10% of total number of employees

Employer with more than 200 employees 20 employees

INDIVIDUAL COVERAGE HRA – MINIMUM CLASS SIZE REQUIREMENT


Individual Coverage HRAAdministrative Requirements

Opt-Out Requirements

• Participants and dependents must be given opportunity to opt out of the ICHRA

• Balance must be forfeited upon termination of employment and dependents must be allowed to permanently opt-out

Notice

• Must be given at least 90 days before the beginning of each plan year

• For anyone not eligible 90 days before the plan year, must be given before coverage begins

• Model notice available

Other Laws

• HRA subject to ERISA

– Individual coverage not subject to ERISA as long as certain requirements are met

• COBRA applies to HRA but qualifying event is not cessation of individual coverage

• Offer of Individual Coverage HRA must be reported on Form 1095-C

• Actual enrollment also required on Form 1095-C unless relief provided

51


Excepted Benefit HRA (EBHRA)Overview

• Must offer with traditional major medical group health plan (but actual enrollment in group health plan not required).

• Must offer to all similarly situated employees.

• Subject to $1,800 annual limit (to be indexed annually).

• Can reimburse Section 213(d) expenses and premiums for COBRA, excepted benefits or short-term limited-duration insurance (not individual or group health coverage).

New regulations permit “Excepted Benefit HRAs” (“EBHRAs”) to reimburse medical expenses up to a limit, without satisfying “prior” integration guidance.


2019 Executive Order on Health Care Price and Quality Transparency

KEY GOALS

Require hospitals to post standard charge information.

Require health care providers, health insurance issuers and self-insured group health plans to provide expected out-of-pocket costs for items/services before patients receive care.

Expand predeductible coverage in HSA-qualifying HDHPs for medical care that helps maintain the health of individuals with chronic conditions.

Treat certain arrangements, potentially including direct primary care arrangements and health care sharing ministries, as eligible medical expenses.

Increase access to deidentified claims data from taxpayer-funded health care programs and group health plans for researchers, innovators, providers, and entrepreneurs. Provide this access while conforming to applicable laws and ensuring patient privacy and security.

Increase permitted health FSA carryover amount.

52


Expanded Predeductible Coverage for HSA/HDHP

BACKGROUND

• To make or receive HSA contributions individual must be covered under an HSA-qualifying HDHP and not have coverage that pays medical benefits (other than for preventive care) before minimum deductible is met.

• IRS Notice 2019-45 (July 17, 2019) expands list of permissible predeductible preventive care benefits.

KEY POINTS

• Plans are not required to provide predeductible coverage for these items.

• New items can only be covered predeductible if used to treat the specific illness indicated.

• List will be revisited every 5 to 10 years.

• Prior IRS guidance regarding permissible predeductible preventive care benefits still applies.

CONSIDERATIONS

• Although new guidance is effective immediately, plans may encounter operational challenges from vendors if looking to make changes to coverage mid-year.

• Are any items on the list already considered predeductible preventive care by the plan? Are there items from the list that you want to cover predeductible?

• Are there any items that the plan covers predeductible as preventive care that are not on the list or not covered specifically by earlier guidance? Should these items be reevaluated?

• New guidance may help make onsite clinics be more HSA-compatible.

• Implications for disease-management programs?


IRS Notice 2019-45: Expansion of Preventive Care Benefits for Chronic Conditions

PREVENTIVE CARE MEDICATION, SERVICE, OR DEVICE

FOR INDIVIDUALS DIAGNOSED WITH THESE CONDITIONS:

Inhaled corticosteroids Asthma

Peak flow meter Asthma

Insulin and other glucose lowering agents Diabetes

Retinopathy screening Diabetes

Glucometer Diabetes

Hemoglobin A1c testing Diabetes

Angiotensin Converting Enzyme (ACE) inhibitors Congestive heart failure, diabetes, and/or coronary artery disease

Beta-blockers Congestive heart failure and/or coronary artery disease

Low-density Lipoprotein (LDL) testing Heart disease

Statins Heart disease and/or diabetes

Blood pressure monitor Hypertension

Selective Serotonin Reuptake Inhibitors (SSRIs) Depression

International Normalized Ratio (INR) testing Liver disease and/or bleeding disorders

Anti-resorptive therapy Osteoporosis and/or osteopenia

53


Other Regulatory Updates


Focus on Mental Health Parity Compliance

• Final FAQs released September 5, 2019, largely following 2018 Proposed FAQs• 2019 FAQs emphasize that facially neutral NQTLs may still violate MHPAEA requirements if they

are applied differently in operation, remind plan administrators and insurers of the importance of including information specific to Mental Health / Substance Use Disorder benefits in SPDs/SBCs, and underscore the need to keep provider directories up-to-date

• Model disclosure form finalized without substantial revision or participants to request information about Mental Health / Substance Use Disorder benefits

• Increasing litigation over exclusions and treatment limits for ABA therapy for autism, residential substance use disorder treatment and wilderness therapy

54


Examples of Mental Health Parity Enforcement

• Self-funded plan imposed preauthorization requirement for all outpatient mental health and substance use and disorder benefits after 24 visits. Similar requirement did not apply to outpatient medical/surgical benefits. Plan removed requirements and re-adjudicated $20,075 in claims.

• Contradictory language in a self-funded plan’s Summary of Benefits, stating that the maximum lifetime benefit for treatment of alcohol misuse was unlimited and another provision stated that alcohol misuse benefits were limited to five years. Plan was required to remove 5-year limitations.

• In order for mental health or substance use disorder benefits to be payable, self-funded plan required measurable goals and continued progress toward functional behavior and termination of treatment. Continued coverage could be denied when positive response to treatment was not evident. These requirements did not apply to inpatient and outpatient medical/surgical benefits. Plan was required to remove the more stringent treatment limitations.


HIPAA Changes

H I P A A P R I V A C Y R U L E C H A N G E S E X P E C T E D

• Required most health plans to obtain HPIDs to use in HIPAA-covered transactions

• In 2014, HHS issued nonenforcement policy that remains in place

• Related rules requiring covered health plans to certify compliance with electronic transaction standards were withdrawn in 2017

• HHS final rule revoking the requirement issued Oct. 28th, effective Dec. 27, 2019

H E A L T H P L A N I D E N T I F I E R ( H P I D ) R U L E R E V O K E D

• HHS expected to propose new privacy rule to promote value-based and coordinated health care

• Focus on information-sharing for treatment and care coordination; may require covered entities to disclose PHI to other covered entities

• May remove requirement that providers obtain written acknowledgement of their privacy practices from patients

55


HIPAA Updates

R E C E N T F A Q S F O C U S O N A P P S

• HHS reiterates ability to enforce HIPAA directly against business associates, as well as group health plans

• 2018 tops prior years for amount of HIPAA penalties collected from enforcement actions: $29M, including $16M from 2015 Anthem breach

• Max penalties have changed

E N F O R C E M E N T C O N T I N U E S

• Once PHI is transferred to an app that is not a covered entity or business associate, the information is no longer subject to HIPAA

• If PHI is transmitted to an app developed for the covered entity or business associate, covered entity or business associate can be liable for app’s misuse of data

• If PHI is transmitted to an app notdeveloped for the covered entity or business associate at the participant’s direction, covered entity or business associate will not be liable for app’s misuse of data

• Covered entity or business associate cannot refuse to transfer PHI to an app at individual’s request


HIPAA Privacy and Security Penalties

Criminal Penalties Fines Imprisonment

Applicable to individual employees (not just the entity) –for “knowing misuse”

$50,000 - $250,000 1 – 10 years

HIPAA VIOLATIONS PENALTY

Civil Penalties Each violation All violations of an identical provision in a calendar yearMinimum Maximum

Due to unknowing violation $100 $50,000 $25,000

Due to reasonable cause but not willful neglect $1,000 $50,000 $100,000

Due to willful neglect that is timely corrected $10,000 $50,000 $250,000

Due to willful neglect if not timely corrected $50,000 $50,000 $1,500,000

56


Litigation Update


Association Health Plan UpdateF I N A L 2 0 1 8 R E G U L A T I O N S A L L O W E D M O R E G R O U P S T O B E C O M E A H P S

• Final rules allow small businesses, franchises, and "working owners" to form associations to offer large-group health plans exempt from the ACA's small-group and individual market requirements

– Employers can band together if they are in the same trade, industry, line of business, or geography

• Each AHP would have to have a formal organizational structure with a governing body and bylaws or similar indications of formality

– Employer members would have to directly or indirectly control the functions and activities of the association in form and operation

• 11 States + Washington D. C. sued, claiming that the DOL exceeded its statutory bounds in the final regulations

57


Association Health Plan Update

On March 28, 2019, U.S. District Court of District of Columbia agreed with plaintiffs, setting aside the portions of the regulations interpreting “employer” to include working owners and groups without a true commonality of interest.

Court stated the rules were “clearly an end-run around the [Affordable Care Act].” The court set aside these parts of the regulations and remanded the rule to the DOL.

DOL could opt to rescind the regulations altogether, revise them, or appeal the decision. FAQs issued April 2nd confirm that AHPs are still obligated to continue operations and are still governed by state insurance departments.

S T A T E O F N E W Y O R K V . U N I T E D S T A T E S D O L


New Wellness LitigationAARP v. Yale

COMPLAINTCurrent and former employees (members of two union groups, potentially over 5,000 individuals) allege the Yale Health Expectations Program (HEP) violates the ADA and GINA. More specifically, they allege that completion of the wellness program is not voluntary, and the program results in unlawful disclosure of genetic information.

YALE WELLNESS PROGRAM KEY CHARACTERISTICS (as alleged)• $25/week penalty if certain employees or their spouses fail to complete required health care services (e.g.,

mammograms, colonoscopies and screenings for diabetes) based on age banding, with the university's health care providers gaining access to the results. Employees identified by certain risk factors or diagnoses are also required to consult with a health coach at least three times per year.

• Compliant employee pays $0.00 for lowest-cost health plan ($852/month) while non-compliant employee pays $108.33/month ($25/week).

– Less than 30%, but significant? The complaint alleges that in New Haven, Connecticut, $1,300 is nearly equivalent to 5½ weeks’ worth of food, 4 months of utility costs, 1 month of housing, and 1 month of childcare.

• A HIPAA waiver was required to be completed in order to send testing results and claims data from HEP program vendor to health coaching vendor (not a HIPAA-covered entity). Even if waiver was not signed, personal health information was shared with health coaching vendor.

Meanwhile: EEOC may, but is not required to, issue new wellness regulations as a result of the AARP

v. EEOC case.

58


Cross-Plan Offsetting (Bulk Recovery)

Eighth Circuit Court of Appeals held that cross-plan offsetting was not permitted by the plan documents, and “approaches the line of what is permissible under ERISA.”

DOL amicus brief argued the practice – self-funded plan assets used to recoup insured plan overpayments – violates ERISA’s fiduciary duties and consent does not cure the prohibited self-dealing.

United has dropped its appeal to the Supreme Court.

M E T H O D F O R C O R R E C T I N G I N S U R A N C E O V E R P A Y M E N T S T O P R O V I D E R

Insurers withhold payments owed to medical providers for services rendered to specific patients.

Reductions are meant to offset overpayments the providers previously received on account of different patients who participate in other plans insured (or administered) by the same company.

P E T E R S O N V . U N I T E D H E A L T H G R O U P , I N C .


State Update

59


Paid Family & Medical LeaveNational Landscape

Currently, nine states, along with Washington, DC, and Puerto Rico, have enacted laws requiring paid leave for an employee’s own serious health condition or disability and — with the exception of Hawaii and Puerto Rico — for qualifying family or caregiving reasons.

CALIFORNIA

HAWAII (STD only)

NEW YORK

NEW JERSEY

RHODE ISLAND

WASHINGTON

WASHINGTON, DC

PUERTO RICO (STD ONLY)

CONNECTICUT

OREGON

MASSACHUSETTS


Paid Family & Medical LeaveNational Landscape

NEW PROGRAMS

JURISDICTION CONTRIBUTIONS BEGIN

BENEFITS BEGIN

PRIVATE PLAN OPTION

FUNDING

Connecticut January 2021 January 2022 Yes Employees

District of Columbia

April 2019 July 2020 No Employers

Massachusetts October 2019 January 2021 Yes Employees & employers

Oregon January 2022 January 2023 Yes Employees & employers

Washington January 2019 January 2020 Yes Employees & employers

60


JURISDICTION PAID FAMILY LEAVE DURATION

PAID MEDICAL OR DISABILITYLEAVE DURATION

PAID MILITARY CAREGIVER LEAVE

PAID SAFE LEAVE

TOTAL COMBINEDPAID LEAVE IN 12 MONTH (OR 52 WEEK) PERIOD

California 6 weeks* 52 weeks None None N/A

Connecticut 12 weeks 12 – 14 weeks 26 weeks 12 days 12 -14 weeks

District of Columbia 6 – 8 weeks 2 weeks None None 8 weeks

Massachusetts 12 weeks 20 weeks 26 weeks None 26 weeks

New Jersey 6 weeks** 26 weeks None 20 days N/A

New York 10 weeks*** 26 weeks None None 26 weeks

Oregon 12 weeks 12 – 14 weeks None 12 weeks 12 – 14 weeks

Rhode Island 4 weeks 30 weeks None None 30 weeks

Washington 12 weeks 12 – 14 weeks None None 16 – 18 weeks

*8 weeks for leave beginning on or after July 1, 2020.**12 weeks for leave beginning on or after July 1, 2020.***12 weeks for leave beginning on or after Jan. 1, 2021.

Paid Family & Medical LeaveLeave Duration


Paid Family & Medical LeaveFamily Members

FAMILY MEMBER DEFINED

FAMILY MEMBER

CA CT MA NY NJ OR RI DC WA FMLA

Spouse

Domestic partner X X

Parents

Child

Grandparent X

Grandchild X X X

Sibling X X X

Any individual related by blood

X X X X X X X

Any individualwhose close

association is like family

X X X X X X X

• Child can include biological, adoptive, foster, step-, legal ward, in loco parentis, and the child of a domestic partner.• Parent can include biological, adoptive, foster, step-, in-law, legal guardian, in loco parentis, and the parent of a domestic partner. “Parent”

for FMLA excludes in-laws and parents of domestic partners.

61


State Individual MandatesEffective Required Coverage Reporting

MA 2006 Minimum creditable coverage (MCC) must:• Cover 4 “core services” without any

financial or utilization limits: physician services, inpatient acute care, day surgery, and diagnostic procedures and tests

• Cover a specified “broad range of medical benefits” similar but not identical to ACA’s essential health benefits (EHBs)

• Comply with restrictions on in-network cost sharing (or all cost sharing if a plan doesn’t use a network)

• Employers that provide MCC (or their vendors) must distribute Form MA 1099-HC by January 31 to covered employees who reside in Massachusetts and report information to state Department of Revenue (DOR)

NJ 2019 • Affordability determinations and tax calculations will use ACA's income thresholds but replace the national average with NJ's average premium for bronze-level plans

• Adopts ACA standard for MEC• Regulators may add other MEC forms• Non NJ-compliant MEWAs are not MEC

• Same format used by the IRS will be used by NJ

• NJ system will accept IRS file, but information on non-residents may trigger privacy concerns

• Deadline for receiving 2019 forms extended to March 30, 2020

• Testing window open until September 1, 2019


State Individual MandatesEffective Required Coverage Reporting

VT 2020 • Adopts ACA definition of MEC• A working group may recommend adding

to or curtailing what qualifies as MEC under this state law

• Legislation doesn't specifically address reporting of Vermont residents' employer-based coverage

• Issue likely will be considered by the working group

D.C. 2019 • Generally mirrors the ACA individual mandate and MEC coverage standards

• Individuals will satisfy MEC requirement for any month enrolled in Immigrant Children's Program or certain MEWAs

• Plan supplying a copy of the ACA-required employer shared responsibility and MEC reports apparently will satisfy D.C. reporting duties

CA 2020 • Substantially mirrors ACA definition of MEC

• Must report MEC to the California Franchise Tax Board (FTB) by March 31, 2021

• Notices must go to covered individuals and their dependents by January 31, 2021

• Forms being developed

RI 2020 • Mirrors ACA definition of MEC • Plan supplying a copy of the ACA-required MEC reports apparently will satisfy RI reporting duties

62


QUESTIONS?


The Gathering Storm: What Employers Need to Know

About Pay Equity

63


Agenda

• Short Legal Overview

• Panel Discussion with Audience Questions


Pay Equity Key Considerations

Goal: Eliminate discrimination in compensation

Pay Equity is a key concern for executives across industries for many reasons:

Societal pressure

•Voluntary disclosures, e.g., Apple, Salesforce

•Celebrity activism, e.g., Patricia Arquette, Reese Witherspoon, Emma Watson

•Publicity, e.g., World Economic Forum, documentaries

Regulations

•State and local efforts push ahead

Business Strategy

•Employ diverse workforce to serve diverse customer base

•Maintain and enhance employee value proposition for employees who are empowered and expect fair pay

64


Types of Pay Equity Laws

Equal Pay Laws:

Salary History Inquiry Bans:

Wage Transparency

Laws:

• prohibit employers from paying employees differently for “equal,” “comparable” or “similar” work.

• restrict employers’ ability to ask about the salaries previously earned by applicants and, in many cases, preclude employers from relying on an individual’s prior salary to set compensation.

• prohibit employers from barring pay disclosures in the workplace and from retaliating against employees who discuss their pay with others.


Federal, State and Local Pay Equity Laws

65


Federal: The Equal Pay Act

• Prohibits paying employees of one sex less than those of the opposite sex “for equal work on jobs the performance of which requires equal skills, efforts and responsibility and which are performed under similar working conditions,” except where such payment is made because of:

A seniority system;

A merit system;

A system which measures earnings by quantity or quality of production; or

A differential based on any factor other than sex.


Federal: Pay Equity Up and Downs

• Trump administration rolls back or tries to halt pay equity initiatives.

• Paycheck Fairness Act (passed in the House in April 2019), would expand federal Equal Pay Act and the Fair Labor Standards Act.

– Stalled in the Senate.

• Athletics Fair Pay Act (introduced in the Senate on July 2019), would require equal pay and compensation for all Olympic and amateur athletes.

– Similar proposal in the House would prevent any federal funds from being used toward the 2026 World Cup until the U.S. Soccer Federation agrees to pay men’s and women’s national teams equally.

• On the campaign trail: Senator Kamala Harris was first to introduce an equal pay proposal:

– Require companies with 100 or more employees to obtain an “Equal Pay Certification” and prove they’re not paying women less than men for work of equal value or else face a fine.

66


State: #MeToo #PayMeToo

• New, stricter equal pay laws:– Since 2018: IL, NJ and WA have

passed new laws.

– Moving from “equal work” to “similar work.”

• Pay equity litigation uptick:– Primary industries: health, legal and

tech companies.

• EEOC pay data collection:– Specific 2017 & 2018 pay data was

due Sept. 30, 2019.

• Evaluating pay gaps:– Voluntary or mandatory disclosures

about pay (similar to the U.K.).


State & Local: Pay Equity Legislation

67


State & Local: Salary History Bans


Federal & State: Pay Transparency Rules

FEDERAL

• Applies to federal contractors/subcontractors • Barred from wage discussions• Barred from retaliating for such discussions• Required to update non-discrimination policies

to address pay transparency

STATE

• Some states have pay transparency laws that apply to employers beyond contractors.

• These states include: CA, DE, MD, NY, OR, and NE.

• In Utah, only the federal rule applies.

Don’t Forget: National Labor Relations Act

68


The Utah Perspective


Utah Statistics 2019 Wage gap between men and women by state, per dollar

69


Utah Wage Disparity

• Utah women make 69.8% of what Utah men make — a bigger gap than four years ago and a full 10 percentage points lower than the national average.– Even larger gap for women of color.

• Utah women working full-time make, on average, about $36,300 annually — about $16,000 less than men in Utah.


Utah State of Affairs

• Utah has a general employment discrimination law prohibiting wage discrimination based on sex or gender identity.

• No specific equal pay law.

• Various bills have been introduced in each of the last 3 years but none have gotten out of committee.

• Salt Lake City Equal Pay Policy for City employees. Adopted 2018.

70


Panel Discussion and Questions


Performance Management and the Employee Experience Focused

Workplace

71


MERCER GLOBAL TALENT TRENDS 2019

Co n n e c t i v i ty i n t h e Huma n

Age

USA


Building Brand Resonance

Do employees in the USA feel asense of belonging to their company?

Thriving employees are 4 times more likely to feel a primary sense of belonging to their company

To co-workers

To yourdepartment

To a function

To your clients

19%

16%

9%

8%

To your company

To a profession

To an industry

To your manager

16%

15%

9%

7%

Social personas and business personas are merging

© 2019 Mercer – USA Deck

PERCENTAGE INCREASE

Build

83%

Buy

53%

Borrow

41%

Automate

59%

72


What Makes a Difference

Thriving employees in USA work in an inclusive, flexible environment thatoffers a strong sense of purpose and valuable learning opportunities

Has a strong sense of purpose that resonates with their personal values4x Makes a positive societal impact2x

3xOffers them opportunities to develop their skills

2xFocuses on their health & well-being

Makes efforts to be intentionally diverse

2x Offers flexible work options2x

Helps them achieve their financial goals

6xEnsures equity in pay and promotion decisions

4x

AFFINITYPRIDE

PURPOSE

CAREER & WELL-BEING

COMPENSATION & BENEFITS

WORKPLACE / LIFESTYLE

They work for a company that…



What design changes is HR consideringgiven business & workforce shifts?

68% ofhigh-growth

organizations globally say they heavily

differentiate their TVP for unique groups

Compared to 47%of modest-growth companies globally

Top Four Talent & Reward Design Changes in the USA

42%

41%

40%

38%

30%

28%

28%

25%

Bottom Four

Improving our ability to acquire talent that is a better fit for our future model

Better matching of existing talent to opportunities

Re-organizing/re-structuring teams to address skill and behavior changes

Improving the representation and inclusion of diverse talent

Redesigning performance and succession processes for a more agile environment

Developing programs to engage gig workers

Redesigning compensation programs

Rewriting the talent value proposition


73


Challenges of the Employee Experience

• In the new world of Employee Experience

employers cannot ease up on or ignore legal

obligations.

– Legal compliance is the foundation of an

organization; rules are needed and they are

there to protect the employees and the

organization.

– If you don’t pay attention to the legal rules,

someone else will, e.g., EEOC, DOL, NLRB,

state agencies, etc.


Inclusive Benefits

74


Inclusive Benefits

Key health & wellness themes of companies focused on Diversity &

Inclusion

Family Status

LGBTQ

Community

Race / Ethnicity

Elder Employees

Differently Abled

Individuals

International Mobility

Veterans / Post-

Conflict / Refugees

Women’s Care


Infertility Benefit Example

(1) Gallup, Social Issues January 11, 2017

(2) LGBT Parenting in the United States by Gary J. Gates February 2013

(3) World Family Map 2015 (Child Trends & Social Trends Institute NY and Barcelona

(4) LGBT Parenting in the United States by Gary J. Gates February 2013

(5) Chandra, A., Copen, C.E., & Stephen, E.H. (2013). Infertility and Impaired Fecundity in the United States

Heterosexual Couple

• About 9% of men and about 11% of women of reproductive age in the United States have experienced fertility problems5

• In the US, women are delaying having their first child. 30% of women in the US have the first child 30+3

Single Individuals

• In the US, there is a positive attitude toward voluntary single motherhood

• 52% of adults, older than 18+, approved a single woman having a child by choice

LGBTQ Individuals

• In the US, 37% of LGBTQ adults (estimated 3 million) have had a child at some point in their lives 4

• In the US, 6 million children and adults have an LGBTQ parent 4

Maternity/Paternity

care

Infertility treatment

Fertility Services

Surrogacy

Adoption

75


Parental Leave

O F W O R K I N G M O T H E R S M A K E H E A L T H C A R E D E C I S I O N S F O R O T H E R S

4%

FEMALE LABOR FORCE PARTICIPATION INCREASES BY 0.6%

FOR EVERY ADDITIONAL

1 week OF PAID MATERNITY LEAVE

Support modern families

Support all caregivers

Provide adequate leave

- Luce CB, et al.“The Power of the Purse: Engaging Women Decision Makers for Healthy Outcomes,” Center for Talent Innovation, 2015.- Winegarden CR, Bracy PM. “Demographic Consequences of Maternal-Leave Programs in Industrial Countries: Evidence from Fixed-Effects Models,” Southern Economic Journal, Volume 61:4 (1995), pp. 1020–1035.- The Institute for Labour Market Policy Evaluation. “The Effects of Own and Spousal Parental Leave on Earnings,” working paper, 2010.

32%COMPARED TO61%

OF MEN

OF MILLENIAL W OMEN PLAN TO TAKE A BREAK FROM W ORK DUE TO THE BIRTH OF THEIR CHILDREN

6.7%FOR EVERY

1 month T H A T T H E FATHERS T A Y S O N L E A V E

A MOTHER’S SALARY INCREASES BY


Parental Leave – Potential Issues

• Cost of leave • Production costs• Must ensure policies are not discriminatory

76


Flexible Work Environment


Curating how, where, and when we work

22% had flexible

working request turned

down

33%Believe flex

working impacts career

prospects

• Hours and timing

• Discretion to change

• Location & abilityto vary

• Infrastructure

• Vary job content

• Ability to share or exchange

• Vary intensity

• Scale up or down

• Distributed beyond traditional workforce

• Automated

WHEN WHERE WHAT HOW WHO

Adaptive working through five lenses


Which statements are true with regards to flexible working?

82%

77%

69%

56%

46%

35%

Performance is managed on results

Colleagues are supportive of flexible working

Senior leaders are supportive of flexible working

The potential to work flexibly has been discussed with me

I’m empowered to take time off as long as I reach my goals

I’ve been offered training on how to make flexible working work

2018

70%

65%

60%

48%

37%

33%

77


Telework / Telecommuting Legal Issues

• DON’T Overlook Good Ole Fashion Discrimination

– Granting a non-traditional working arrangement to one employee but not another

may be discrimination.

• DON’T “wing it” or treat these as isolated, one-time events.

• DO establish standards – a policy – to communicate to all employees the

purpose of flexwork, how to request flexwork, the employer’s ability to change

or discontinue flexwork at will, whether certain jobs are or are not eligible.

– Always base flexwork on legitimate, objective business standards.

– Apply the policy objectively and non-discriminatorily.

– Use flexwork agreements with individual employees.



• Wage & Hour Issues

– Exempt workers vs. non-exempt workers.

– Accurately monitoring and reporting hours worked.

– What about “on-call”; rest & meal breaks.

– The schedule should be in compliance with state laws governing rest and meal break

requirements.

• Tax & Payroll Issues

– Telecommuting in the same or a different state?

– Consider state and local tax laws.

– Determine withholding obligations for a telecommuter.

– Determine whether the employer is subject to a withholding requirement, which could require the

employer to register with the appropriate state tax agency.

78



• ADA Accommodation

– The ADA allows employers to choose any effective accommodation, e.g., if an employee not

eligible for FMLA leave requests time off, an employer may be able to offer telework instead.

– Is telecommuting a reasonable accommodation? Sometimes. Maybe.

• Telecommuting is not a reasonable accommodation. EEOC v. Ford Motor Company, 782

F.3d 753 (6th Cir. 2015)

• Telecommuting can be a reasonable accommodation when the employee is able to perform

the job’s essential functions remotely and the request is for a finite period. Mosby-Meachem

v. Memphis Light, Gas & Water Division, 883 F. 3d 595 (6th Cir. 2018).

– Telecommuting can be a reasonable accommodation for workers where regular attendance isn’t

an essential job function. (Courts give weight to the employer’s judgment about whether regular

office attendance as an essential function.)



• FMLA

– Is the employee who works remotely eligible for FMLA? (worksite is the office to which they report and from which assignments are made).

– Is telecommuting an appropriate and lawful substitute for FMLA leave?

• Employers can offer telecommuting in conjunction with a reduced leave schedule, but may not require telecommuting in place of FMLA leave. (E.g., employee accepts telework arrangement in lieu of FMLA leave to care for her son.)

– Is telecommuting an appropriate and lawful means to accommodate and otherwise facilitate intermittent FMLA leave?

– Does telecommuting count against FMLA time?

• No. Time spent working from home can’t be FMLA leave.

– Don’t forget state FMLA laws.

79



• Privacy and Right of Access Issues

– A privacy right exists where an employee has a

reasonable expectation of privacy.

– In a telecommuting policy and/or agreement, ensure

that the expectation is unreasonable, including in

right of access to employee’s home worksite,

employer’s files and network data, and the

employer’s and the employee’s electronic devices.



• Zoning Laws– Does the city have zoning laws that limit or restrict the

operation of home businesses, or require a permit or license for a home business to operate?

– Will the employer or the telecommuting employee be responsible for obtaining and paying for the required home office permit or license?

80



• Workplace safety

– OSHA subjects work-related injuries occurring in a telecommuter’s home to OSHA recordkeeping

requirements.

• Workers’ Comp

– Does the worker injured at home qualify for workers’ comp?

– How can you show the injury did not occur within the course and scope of employment?

– Check your policy to see if it covers work-related injuries in a telecommuter’s home, both inside

and outside the home state.

• Tort Liability

– Who is liable for injuries to third parties and damage to property? (Check your liability insurance)


Curating Careers

81


What Employees Say is Important

Here you can see what employees globally rate as strong vs important in terms of career support

15

IMP

OR

TA

NC

E

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

PREVALENCE13 11 9 7 5 3 1

Access to career path information

Opportunity to grow

'Always on' learning

Knowledge of future-important / obsolete skills

Good sense of skills/skill gaps

Defined skills for career advancement

Future-focused training

Trusted colleague for career advice

Regular career conversations

Digital training support

Measures to fill open roles with internal talent

Career information outside my department

Short-term projects for skill building

Lateral moves

Some roles only open to select employees

What career support is provided to employees in the USA?

82%Training content aligned to future needs

80%Lateral moves for development purposes

79%A career portal with pathing information

74%Always-on learning opportunities



Curating The Learning Journey

Copyright © 2019 Mercer

How do I want to learn & grow? 77% are willing to put in the extra work to gain experience…

Tell me which skills will be most valuable

Future skills: digital literacy and creative thinking

Enable me to innovate and learn in my current role

More clarity on what skills are needed in the future

A better understanding of the talent/skills we have

A way to recognize skills and experiences (credentialing)

Employee View

HR View

51%

45%

30%

20%

New project/responsibility with noincrease in salary

Lateral move within the company (noincrease in title or responsibility)

Temporary outside role/secondment(with supplier, customer, etc)

Exchange vacation days forexperiences in other

departments/areas of the business

69% of employees want

their company to provide appropriate development

opportunities based on their level & aspirations

31% of employees

would prefer to receive a self-development budget to spend as they see fit

82


Performance Reviews

• In the world of the excellent employee experience, resist the temptation to give

a “feel good” review that ignores substandard performance, conduct, etc.

Employee experience tolerating poor performance and unacceptable

conduct!

• Not being truthful with employees about their performance is not an element of

the employee experience and hinders professional development

• Inaccurate reviews expose the company to liability.


Affinity

83


Brand Values: Focus on the Three Es

Executives are increasingly aware of consumer interest in ethical products and social responsibility

ETHICS

of companies in the USA are currently using some form of AI in HR processes

83%

EQUITY

Only 11% use analytics to measure the extent of pay inequities and just 6% use modeling to correct inequities

19% of employees give their company an “A” grade for equity in pay and promotion

36% of companies disclose equity info

EMPATHY

measure employee engagementat least twice a year

can identify the key drivers of engagement

54%

32%



Do affinity groups open the door for discrimination claims?

• Affinity groups, despite being focused on members of protected class, should still be open and inviting to all employees

• Employers should be cautious not to show preferential treatment towards certain affinity groups.

• Denying some affinity groups, while allowing others may result in discrimination allegations

• If managers, who are part of an affinity group with staff members, learn of discrimination, it effectively puts the employer on notice of these allegations

84


Affinity Groups & the National Labor Relations Act

• Depending on the purpose and mission of the group, an employer’s involvement may violate the National Labor Relations Act (NLRA)

• The NLRA defines a “labor organization” as:

– “[A]ny organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

• Section 8(a)(2) of the NLRA declares it is an unfair labor practice for an employer “to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.”


Questions

85


Five Keys to a Successful D&I Program


Your Panel

Brian D. Pedrow, EsquirePractice Leader, Labor & Employment

GroupBallard Spahr LLP1735 Market Street, 51st FloorPhiladelphia, PA 19103T 215.864.8108F [email protected]

86


Your Panel

Virginia G. EssandohChief Diversity OfficerBallard Spahr LLP1735 Market Street, 51st FloorPhiladelphia, PA 19103T 215.864.8192F [email protected]


Your Panel

Tiffiny LipscombAVP HR OperationsIntermountain Healthcare5121 S. Cottonwood St.Murray UT 84107T 801-442-2002tiffiny.lipscomb@imail.orgwww.intermountainhealthcare.org

87


Your Panel

Angela BergPartner and North America D&I

Consulting Practice LeaderMercer1301 Fifth Avenue, Suite 1900Seattle, WA 98101T 206-225-8327F [email protected]


AGENDA

• The Business Case

• Tone from the Top

• Stakeholder Spectrum

• Fit Your Organization

• Measure, Measure, Measure

88


The Business Case


Tone from the Top

89


Utah Pride Festival

Marc HarrisonPresident and CEO

Intermountain Healthcare

Tone from the Top


Stakeholder Spectrum

90


Fit Your Organization


Measure, Measure, Measure

91


Questions

Page 3Ballard Spahr Page 3

About Ballard Spahr

Our mission: to provide nothing less than excellence in every legal representation. Our client focus is absolute. We help clients achieve success as they define it. We respect and anticipate their needs, take action to keep them informed, and devise forward-thinking solutions to get the most favorable results.

Atlanta Las Vegas PhiladelphiaBaltimore Los Angeles PhoenixBoulder Minneapolis Salt Lake CityDelaware New Jersey Sioux FallsDenver New York Washington, DC

Ballard Spahr LLP is a national firm of more than 650 lawyers in 15 offices across the country. Our attorneys provide counseling and advocacy in more than 50 areas within business and transactions, finance, intellectual property, litigation, and real estate. We represent a diverse cross-section of clients, ranging from large public companies and privately held entities to government bodies and nonprofit organizations. Our practices span the financial, industrial, real estate, private equity, retail, and other sectors that are critical to growth in today’s marketplace.



Ballard Spahr LLP

Labor and Employment

Our attorneys work with clients to provide day-to-day counseling on labor and employment issues, take steps to avoid claims and litigation, and if workplace issues turn into disputes, we evaluate potential business impact to devise the next steps that will produce the best outcome for our clients. The scale of our nationwide practice is matched by the depth of its experience in the following areas.

Affirmative Action Plans and Federal Contractor Compliance

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has become increasingly active—and every company and organization that does business with the federal government is required to comply with its complex and changing array of laws and regulations. We can help.

Our attorneys guide clients of every size—from local or regional employers to national corporations—on the government’s affirmative action and equal opportunity requirements. We provide OFCCP audit support and assist in the development of Executive Order 11246, Veterans, and Individuals with Disabilities (Section 503) affirmative action plans (AAPs) for clients across the country.

We advise clients to take a thorough, proactive approach to developing Affirmative Action Plans (AAPs), which includes robust applicant and personnel tracking systems, action-oriented programs, personnel practice reviews, and adverse impact analyses. We work with employers to develop effective procedures for gathering employee data, analyze and organize that information to account for every contingency and regulatory guideline, and develop customized, defensible plans that will hold up under OFCCP review.

In addition, our team monitors the latest developments in the OFCCP regulatory and enforcement landscape, as well as relevant state and local requirements, to make sure our clients are prepared for both impending changes and emerging trends. We provide on-site training to in-house counsel and human resources personnel and, as mentionedpreviously, regularly publish e-mail legal alerts.

We represent clients across industries, including:

• Medical device manufacturing

• Pharmaceutical manufacturing

• Aerospace manufacturing

• Financial services

• Nonprofit

• Health care

• Consulting and professional services

• Investment research


Ballard Spahr LLP

Compliance Audits

A meticulous compliance audit, conducted by an attorney who understands the letter and nuance of employment law, is a critically important part of workplace management. The attorneys on our team have been helping clients across industry sectors to avoid risk for decades, including the reputational harm that can accompany an allegation of misconduct.

Our attorneys regularly conduct audits for employers on the full range of workplace matters to ensure compliance with state and federal employment laws. We also assist companies in conducting their own compliance audits and advise them on how to take proactive steps to avoid litigation and limit liability.

Our work includes the implementation of monitoring processes, plan analysis and drafting, and counseling on OFCCP audits. Should litigation arise, our deep team of employment litigators has a track record of successfully defending clients against a range of claims in courts across the country, as well as before administrative agencies and arbitration forums.

We advise on compliance with the following statutes and topics:

• ADA, FMLA, OSHA, and EEO compliance

• Affirmative action plans and federal contractorcompliance

• Attendance, vacation, holidays, and sick leave

• Conflicts of interest

• Discipline and termination

• Discrimination

• Diversity and inclusion

• Drug and alcohol testing

• Employment application process, including criminalbackground and credit checks

• Immigration, including form I-9 compliance

• Internal investigations

• Interviewing, hiring, and firing

• Performance evaluations

• Permissible use of email and the Internet

• Restrictive covenants

• Sexual and other prohibited harassment

• Wage and hour

• Workers’ compensation

• Workplace violence


Ballard Spahr LLP

Discrimination and Harassment

The number of workplace discrimination and harassment lawsuits has risen sharply over the past few years and the stakes for employers have never been higher. Ballard Spahr attorneys manage internal investigations, defend against misconduct claims, and work with clients to develop strategic plans that minimize damage and restore confidence.

Our employment litigators have experience defending companies and their employees against claims of discrimination, civil rights violations, defamation, harassment, and retaliation. We have represented clients from family-owned businesses to Fortune 100 companies and have a track record of success defending individual and class action lawsuits in state and federal court and in front of the Equal Employment Opportunity Commission (EEOC).

The team includes more than 20 female attorneys, including former prosecutors and lawyers who honed their considerable investigative skill at government enforcement agencies such as the EEOC and the U.S. Department of Education’s Office for Civil Rights.

We assist with issues arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and similar state anti-discrimination statutes, in state and federal court as well as in front of the EEOC.

Training is critical to risk avoidance. We use our knowledge gained from decades of experience litigating discrimination and harassment claims across the country to help employers identify risk and take preventive action. We work with business leaders and human resources professionals to objectively assess their workplaces and take the necessary steps to develop a culture that promotes inclusion, provides a clearly articulated structure for reporting allegations of misconduct, and supports a company’s reputation in the marketplace.

EEO-1 and VETS-4212 Reporting

We work with our clients on their approach to EEO-1 and VETS-4212 reporting to ensure that the relevant data has been reviewed and is sufficiently prepared for timely and accurate submission. We would notify our client of report filing due dates well in advance. Our team has counseled a national organization [American Red Cross] through the process of EEO-1 and VETS-4212 reporting, and we know what it takes to help large clients maintain compliance. Our team would provide ongoing consultation about how to compile the applicable data properly.

Employment Counseling

Preventive counseling is as necessary to employers as a skillful defense against employee and government claims and actions. We advise clients across the country on the full scope of employment issues.


Ballard Spahr LLP

In many cases, issues raised in the context of day-to-day counseling can result in a grievance, lawsuit, or other dispute. Our experience enables us to provide practical and accurate advice and to develop effective strategies to resolve the immediate issue, position the employer should a grievance or other adversarial proceeding result, and develop a planof action to address future issues.

We counsel employers in:

• Affirmative Action Plans and Federal ContractorCompliance

• Compliance audits

• Discrimination claims



• Sexual harassment

• Employment counseling

• Employment litigation and arbitration

• Executive compensation

• Health and welfare benefit plans

• ERISA, MEPPAA, and benefits litigation

• Executive agreements and compensation

Mergers and Other Transactions

• Employee Stock Ownership Plans

• Immigration

• Incentive compensation plans

• Labor/Management relations

• OSHA and workplace safety

• Policies, handbooks, and trainings

• Trade secrets, confidentiality, non-competition andnon-solicitation agreements and litigation


• Wage and hour audits, investigations, andclass/collective action litigation

• Workplace investigations

• Qualified and non-qualified retirement plans

Working alongside transactional lawyers, we identify and resolve workplace issues that may arise during asset sales, purchases, spinoffs, takeovers, and mergers. We examine pension liability; potential or pending employment litigation, administrative complaints, and investigations; employee privacy issues; labor organizing activities; and unfair labor practices. We also review employment agreements, noncompete and confidentiality provisions, employment policies and handbooks, and benefit plans, and we conduct internal audits to help clients evaluate their liability risks.

Workforce Reductions

From initial program development through implementation, we guide clients through the challenges of a reduction in force (RIF). Our attorneys assist clients with RIF programs and compliance with the federal Worker Adjustment and Retraining Notification Act (WARN) and similar state and local laws for both unionized and nonunionized


Ballard Spahr LLP

workforces in a variety of circumstances, including downsizings, work relocations, mergers, acquisitions, asset purchases, and plant closings.

Employment Litigation and Arbitration

Our labor and employment attorneys have significant experience in single- and multi-plaintiff, as well as class and collective action litigation, in state, federal, and appellate courts.

We defend employers in all forms of employment litigation, including:

• Discrimination, harassment, and retaliation claims based on every protected class (including age, race, gender,sexual orientation, disability, religion, and national origin) and arising under Title VII of the Civil Rights Act of 1964, the ADEA, the ADA, and similar state anti-discrimination statutes

• FMLA, USERRA, and various state and local leave laws

• Equal Pay Act

• Whistleblowing

• Employment at-will, wrongful discharge, and employment tort claims, including claims for defamation andemotional distress

• Employment and executive compensation agreements

• FLSA as well as individual state wage and hour claims and investigations

• Defense of employee benefits disputes arising under ERISA

• Employment-related class actions

• Noncompetition and confidentiality agreements

In addition to our representation in state, federal, and appellate courts, we have successfully represented clients against administrative charges before the:

• Equal Employment Opportunity Commission

• Department of Labor

• Office of Federal Contract Compliance Programs

• Occupational Safety and Health Administration

• National Labor Relations Board


Ballard Spahr LLP

ERISA, MEPPAA, and Benefits Litigation

Employers must be equipped to make informed decisions about benefit plans to prevent, and be prepared for, litigation. Our attorneys have extensive experience in evaluating and litigating disputes arising under the Employee Retirement Income Security Act (ERISA) and related federal and state laws.

Our clients include employers and other plan sponsors, employee benefit plans, trustees, plan administrators, and other plan fiduciaries in all aspects of employee benefits litigation, from class actions to individual claims.

We regularly assist in matters involving:

• Breaches of fiduciary duty, including cases involving employer stock investments

• Claims for benefits under retirement, health and welfare, and executive compensation arrangements

• Cutbacks in pension and retiree health and welfare benefits

• Cash balance pension plan conversions

• Multiemployer pension and welfare plan contributions and withdrawal liability

• ERISA Section 510 discrimination claims

• Disputes with service providers

Executive Agreements and Compensation

Enforceable agreements that meet the needs of the client’s business are imperative. We collaborate with clients to identify categories of business-critical information and other factors to draft agreements that reflect the client’s risk threshold. We also monitor legal developments to ensure that agreements are free of technical defects and can withstand legal challenge.

We counsel clients on the design and operation of nonqualified deferred compensation plans, including the extent to which plans are subject to restrictions set forth by Section 409A of the Internal Revenue Code, and if so, whether they comply. We advise on Section 409A correction principles for both form and operational failures, tax-reporting and constructive receipt issues, and the calculation of applicable taxes and penalties. We also represent employers in the administrative claims process and litigation involving nonqualified deferred compensation plans.

We advise publicly traded clients on executive compensation disclosure rules. This includes compliance with the SECs enhanced proxy disclosure rules, as well as additional disclosure obligations arising from Dodd-Frank, such as the“say-on-pay” and “say-on-frequency” rules.


Ballard Spahr LLP

Our attorneys regularly counsel compensation committees in all areas of executive compensation for both privately held and publicly traded companies. We do this as part of our general representation of the company or as special counsel to the compensation committee.

Incentive Compensation Plans

To help clients achieve organizational performance and retention goals while still maximizing flexibility for executives and directors, our lawyers routinely advise clients on the taxation of equity-based and cash-based incentive awards and programs.

Our work considers the impact of the Section 162(m) deduction limitation and the Section 280G golden parachute rules. We also advise on the compensation and tax implications of inbound and outbound multinational executive transfers.

We advise on the design and operation of equity-based and cash-based incentive arrangements, including executive level arrangements, such as:

• Stock (or similar equity) options

• Stock appreciation rights

• Restricted stock and restricted stock units

• Deferred stock awards

• Employee and agent stock purchase plans

• Long- and short-term-based and retention-based incentives

Labor/Management Relations

Ballard Spahr possesses formidable experience in the arena of traditional labor law. For decades, Ballard Spahr has represented private, public, and nonprofit employers in their dealings with unions and unionized workforces.

Our attorneys represent employers in collective bargaining negotiations, interest arbitrations, private and American Arbitration Association labor arbitrations, and unfair labor practice proceedings before the National Labor Relations Board (NLRB) and state labor boards. We also provide advice and counseling on National Labor Relations Act (NLRA) and state labor law compliance issues; the labor implications of mergers, acquisitions, and asset purchases; strike prevention and control; union campaigns; strategic expansions; and union-free training of management and supervisors.


Ballard Spahr LLP

We are familiar with the sensitive nature of complex labor relations issues and have the experience to bring about resolution. We forge positive relationships with organized labor, while at the same time aggressively advocating the legal positions necessary to achieve our clients’ goals.

Collective Bargaining and Arbitrations

Our team takes an aggressive yet practical approach in collective bargaining and interest arbitrations. In all cases, our strategy is driven by our clients’ business goals. Our approach to achieving success involves carefully developed and detailed strategies including preparation, alignment, relationships, commitment, creativity, and assessing the best alternative to a settlement.

We have a track record of success in handling:

• Wage freezes, signing bonuses excluded from base pay, and decreases in or freezing of longevity and salaryincrements

• Changes to health care for current employees, resulting in significant cost reductions for the employer

• Elimination or reduction of post-retirement health care benefits

• Programmatic overhauls designed to reduce absenteeism and overtime

• Preservation and expansion of managerial prerogatives for increased efficiency and fiscal health

• Retirement benefit cost controls

Arbitration of labor disputes is the core of a collective bargaining agreement, and awards can have a considerable impact on the collective bargaining relationship and can redefine a labor contract. We assist employers in every aspect of the labor arbitration process—in responding to grievances, deciding whether a case should be arbitrated, choosing an arbitrator, determining strategy, preparing the case, trying the case before the arbitrator, and filing briefs. As appropriate, we seek court enforcement of an arbitration award or petition to vacate an award. Our goal in labor arbitration is to achieve a successful result and to keep the process efficient for our clients.

Unfair Labor Practices

Ballard Spahr attorneys regularly represent clients before the NLRB and state labor relations boards in unfair labor practice cases. We have extensive experience representing clients in the full range of NLRB matters, including defending clients against allegations of discrimination based on union activities; allegations of interference with employees’ protected, concerted activities; and allegations of failure to bargain in good faith with a union.

Union-Organizing Attempts

Because we have represented management in hundreds of union-organizing attempts, we know how to help clients effectively manage these sensitive situations. We work with management to assess both the legal and campaign issues


Ballard Spahr LLP

and develop an effective strategy to help avoid a petition or respond if one is filed. If a petition is filed seeking a representation election, we advise on employer rights and responsibilities during the critical pre-election period, represent the employer in all labor board proceedings, and work closely with management to design and carry out an effective election campaign. We frequently litigate representation cases before the NLRB and the appellate courts, as well as post-election issues involving challenges to the results of an election. We are exceptionally knowledgeable regarding NLRB procedures and the boundaries of what employers and labor unions are permitted to do in organizing situations.

Decertification and Withdrawal of Union Recognition

We advise employers on their rights and responsibilities when decertification or withdrawal of recognition is appropriate and represent them before the NLRB in unfair labor practice proceedings that involve decertification and withdrawal of recognition.

Prevention and Control of Strikes and Picketing

We show clients how to prepare well in advance for a strike or lockout, as well as for any picketing. An effective strike plan addresses issues such as security, continuation of work, deliveries in and out of the facility, and many other factors. Our attorneys also are experienced in preparing injunction papers and securing injunctions to counter unlawful picketing so as to minimize disruption to the employer’s operations.

OSHA and Workplace Safety

A company’s workforce is a valuable asset. We advise on preventive measures as well as compliance considerations to minimize the risk of Occupational Safety and Health Administration (OSHA) citations, and we help clients to prepare for and respond to OSHA inspections.

We also work with clients to assess state-specific questions, since each state exempts certain industries from its plan and each has differing regulations on certain workplace safety issues. If an OSHA citation is issued, we represent clients in contests, settlement proceedings, administrative hearings, and court challenges to citations and penalties.

In cases where a fatality is involved, we consult on media relations, employee counseling, and issues involving criminal prosecution.

Pay Equity Analysis

In the last few years, many states and the Federal Government have issued regulations implementing pay equity and enforcing equal pay laws. Our team has developed a strategy to address the need for our clients to comply with these requirements. Ballard Spahr partners with a consultant to perform compensation regression analyses that account for


Ballard Spahr LLP

factors such as experience and education to determine whether pay gaps exist between women and men and between people of color and whites in similar positions. In our experience, it is advantageous to have legal counsel facilitate this project (including engagement of the consultant, if you prefer) to maximize the likelihood that the work product and/or discussions of such work product will fall under one or more privileges, such as the attorney-client privilege, work product doctrine, and/or critical self-analysis privilege. We would be able to advise our client regarding best practices in compensation and appropriate responses to the results of annual pay equity analyses. We have a close working relationship with Mercer and know they are well-regarded in this area, but we can certainly work with other consultants based on our client’s preferences. Ballard Spahr typically acts as liaison between the client and the consultant, facilitating the flow of information between the two, and participating in milestone telephone calls to discuss the analysis. We also offer strategic advice and counsel based on the outcome of the study.

Policies, Handbooks, and Trainings

Effective policies and practices serve as the best offense and defense against employee claims. Our attorneys advise clients on instituting and enforcing policies and procedures and steps to take when employees violate them.

We draft policies and procedures that eliminate ambiguity around employee expectations, limit employer liability from certain claims, and reaffirm an employer’s commitment to comply with state, federal, and local laws.

Our work in this area includes addressing issues involving:

• ADA, FMLA, OSHA, and EEO

• Affirmative action plans and federal contractorcompliance

• Attendance, vacation, holidays, and sick leave

• Conflicts of interest

• Discipline and termination

• Discrimination



• Employment application process, including criminalbackground and credit checks

• Immigration, including form I-9 compliance

• Internal investigations

• Interviewing, hiring, and termination

• Performance evaluations

• Permissible use of email and the internet


• Sexual and other prohibited harassment

• Wage and hour

• Workers’ compensation

• Workplace violence


Ballard Spahr LLP

Workplace Training

We regularly conduct interactive, on-site, and virtual training in group and individual settings for every segment of the workforce, from senior management to hourly staff. We often customize training programs to meet a client’s particular needs. Recent programs we have conducted address:

• Electronic communications

• Collaborative partnerships


• Employee benefits

• Employee handbooks

• Employment law changes under the Trumpadministration

• ADEA developments

• Anti-harassment and discrimination training foremployees

• Anti-harassment and discrimination training formanagers

• Hiring and firing

• Independent contractor misclassification

• Investigation tips and techniques for managers andsupervisors

Employment Agreements

• Leave as a reasonable accommodation andnavigating the interplay between the ADA and the FMLA

• Management basics

• Pay equity

• NLRB updates

• Political issues in the workplace

• Joint employment, temporary employment, andindependent contractors

• Social media in the workplace

• The ADA and FMLA for managers

• ADA accessibility

• The NLRA and the non-union workplace

• Wage and hour developments

• Wage and hour self-audits

• Workplace sexual harassment policies

We draft, review, and revise employment agreements to streamline hiring, firing, discipline, compensation, and benefits decisions and protect trade secrets, customer and vendor relationships, and other proprietary information.

Trade Secrets, Confidentiality, Non-Competition, and Non-Solicitation Agreements and Litigation

Employees and business consultants often possess confidential information that is critical to a company’s competitiveedge—and technology makes accessing that data even easier. We help employers protect, preserve, and recover their proprietary assets.


Ballard Spahr LLP

We represent clients across the country and in a range of industries in drafting confidentiality, non-competition, andnon-solicitation agreements to prevent and combat unfair competition. To protect clients from the damage former employees can set in motion, we draft restrictive covenants and enforce them through negotiation, arbitration, or preliminary and permanent injunctions in state and federal courts. We also represent employers who seek to invalidate overly broad restrictive covenants that apply to their new hires, and we have defended them against claims of tortious interference and unfair competition.

Wage and Hour Audits, Investigations, and Class/Collective Action Litigation

Wage and Hour

Our lawyers are highly experienced in a wide variety of wage and hour matters, including audits and claims under the FLSA, state minimum wage laws and state wage payment and collection laws, and before the Department of Labor, state administrative agencies, and federal courts. We advise on issues including exempt, nonexempt, or independent contractor classification; child labor regulations; recordkeeping requirements; payroll practices; bonuses and lump sum payments; and nontraditional compensation systems. We also defend single-plaintiff wage and hour litigation, FLSA collective actions, and class actions brought under state wage and hour laws.

Investigations

Workplace claims of harassment and discrimination, breach of confidentiality, financial loss, workplace injury, and loss of trade secrets are a few situations that can trigger an investigation, either internally or by an outside entity. We help clients prepare for, initiate, and complete internal investigations or, at their request, conduct the investigation ourselves. To identify policies and practices that create or increase exposure, we conduct legal vulnerability reviews and recommend appropriate action.

Class/Collective Action Litigation

When a class action is filed, the risks are high. We have successfully defended companies in many industries against class actions in a wide range of employment related matters, including minimum wage, overtime, ERISA, and related issues.


Employee Benefits and Executive Compensation

Our Employee Benefits and Executive Compensation Group assists a variety of clients with a wide range of needs, enabling us to develop a broad practice with strength across the many areas of benefits-related legal compliance.

Ballard Spahr has a world-class health care practice focused on the continually changing legal landscape of health benefit plans. A sizable number of our clients still sponsor defined benefit pension plans, and we are advising those clients on issues, including the merger and spin-off of pension plans, the correction of significant minimum funding failures, and the termination of billion-dollar pension plans.

We advise on ERISA and related federal and state laws governing benefits and compensation for clients ranging from publicly traded, Fortune 100 corporations to privately held and regional companies. Our attorneys focus on four major areas: executive compensation and incentive plans; qualified and non-qualified retirement plans; health and welfare benefit plans; and employee stock ownership plans (ESOPs).

• When clients wish to implement a new equity-based, cash-based incentive or deferred compensation program, weprovide guidance on documenting and implementing a program while avoiding significant tax traps and satisfying all shareholder disclosure requirements, including the stock exchange rules.

• When clients need assistance in solving a 401(k) or 403(b) compliance problem or have issues with a definedbenefit pension plan, we draw upon the experience of our attorneys who worked at the IRS and have decades of experience negotiating with federal agencies.

• When clients seek ideas on how to control the sharply increasing cost of providing employee and retiree healthbenefits or HIPAA compliance, we create and evaluate solutions based on our experience advising some of the largest and most sophisticated employee health plans in the nation.

We advise clients throughout the life span of an ESOP, from design and planning to compliance, implementation, financing, corporate governance, and merger and acquisition activities. Our national ESOP team facilitates the tax- favored transfer of employer stock to employees. We represent independent trustees, sellers, ESOP companies, and their employee owners in related legal and transactional matters.

In addition, we provide advice to employers that participate in multiemployer pension, retirement savings, health and welfare, and other types of benefit plans for their unionized workforce. In particular, we counsel clients on bargaining strategy involving multiemployer plan contribution obligations and withdrawal liability, including the impact of multiemployer plans that are in critical or endangered status or have adopted rehabilitation plans. We also represent employers in matters relating to delinquent contributions to multiemployer plans and the assessment and settlement of withdrawal liability.


Our team works closely with the firm's corporate lawyers to analyze the employee benefits and executive compensation implications of acquisitions, divestitures, and corporate reorganizations. We also advise plan sponsors, plan committees, investment funds, record keepers, and investment advisors on fiduciary and governance matters.

Diversity & Inclusion CounselingOur Diversity & Inclusion (D&I) team advises employers in a range of industries on the development, enhancement, and implementation of their D&I programs. As attorneys, we offer a perspective that blends D&I consulting and development with a sensitivityto important legal issues—including regulatory compliance, the interplay of equalemployment opportunity and affirmative action laws, reverse discrimination risks, and the role of D&I in potential discrimination litigation.

D&I is more than “the right thing to do.” It makes business sense. An effective D&I program can help an organization connect with communities, penetrate and capture the U.S. multicultural markets, attract top talent, and drive innovation. For this reason, organizations are embracing D&I as a key business strategy. In addition, organizations appearing before regulatory agencies or state and local governments seeking approval for a transaction often find that having robust D&I programs puts them in a stronger position.

Our D&I team performs assessments, develops D&I strategic plans, advises on existing programs, develops policies and communications materials, conducts training, and assists with the implementation of D&I programs. Our work touches on other areas as well, including board and internal governance entities, human resources and workforce issues, procurement and supplier diversity, and community engagement and philanthropy. When needed, we offer collaborative input from lawyers across the firm’s practice areas to provide advice on issues involving government relations, securities, labor and employment, employee benefits, non-profit governance, and investigations.

OUR SERVICES

We are well-versed in the regulatory compliance issues involved in workplace diversity issues. Publicly traded companies and financial institutions call on us to help them meet the regulatory expectations for D&I programs established by federal agencies under Section 342 of the Dodd-Frank Act.

These standards were issued jointly in 2015 by six federal agencies, including the Consumer Financial Protection Bureau, other federal banking agencies, and the U.S. Securities and Exchange Commission. They affect financial institutions, publicly traded companies, mortgage companies, and other entities regulated by the Dodd-Frank Act. The final standards envisioned that an entity will conduct an annual “self-assessment” of its diversity policies and practices in four areas, and the standards provide “assessment factors” for each. These entities are encouraged to provide the self-assessments to the regulating agency and to make this information public. We regularly participate in public programs alongside federal regulators and counsel clients on the design and implementation of D&I programs that meet or exceed the standards.

In addition, we offer services in:

• Program development

• Policy and procedure drafting

• Program audits and analysis

• Self-assessment checklists

• Strategic planning

LEADING BY EXAMPLE

• Employee and executive training

• Workforce goal and managementplan development

• Compensation and performancemanagement

• Scholarship development

• Supplier and vendor issues

• Website and corporate marketingmaterial review

• Philanthropy and communityoutreach programs

Ballard Spahr is recognized for its own successful and innovative D&I program, which is led by our internal Diversity Council of more than two dozen lawyers and our Chief Diversity Officer, Virginia Essandoh. Attorneys on our D&I team— including team leaders Brian D. Pedrow and Dee Spagnuolo—also serve on the firm’s Diversity Council, ensuring that they experience the rewards and challenges of developing and implementing a D&I program from the client’s perspective.

Our D&I initiative has made Ballard Spahr a stronger firm. Clients have told us that diversity is important to them, and we have seen first-hand that varied perspectives drive insightful counsel. That commitment to D&I is reflected in many ways, including through the active and direct support of firm leadership. Our D&I program encompasses many of the initiatives we advise our clients to consider, including leadership involvement and support, recruitment and outreachto diverse organizations and universities, onboarding and mentoring programs, supplier diversity, affinity groups, andpartnerships with clients and the communities we serve.

We also participate in legal industry and client industry initiatives to promote D&I. In 2016, the Mortgage Bankers Association awarded Ballard Spahr its first-ever Diversity and Inclusion Leadership Award for Organizational Diversity, which recognizes efforts to increase internal diversity and promote inclusion at all levels.

OUR TEAM

Led by Mr. Pedrow and Ms. Spagnuolo—partners at Ballard Spahr and recognized leaders in the area of D&I—the team closely follows developments involving the Dodd-Frank Act and other federal, state, and local laws. We also follow trends reported in mainstream media and legal journals and conduct business and industry intelligence that helps clients avoid risk and develop programs that set them apart from their competition. For the past nine years, we have worked closely with a publicly traded Fortune 50 company that is now ranked among the 30 best companies in the United States and was named to DiversityInc’s Top 20 list. Our clients include financial institutions, communications companies, technology corporations, manufacturing companies, and higher education institutions.

CO-LEADERS

Brian D. PedrowTel 215.864.8108 [email protected]

Dee SpagnuoloTel 215.864.8312 [email protected]

TEAM

Steven W. SuflasTel. 303.299.7326 [email protected]

Denise KeyserTel 856.761.3442 [email protected]

Keith A. GarlandTel 215.864.8262 [email protected]

Tara L. HummaTel 856.761.3408 [email protected]

Melanie J. VartabedianTel 801.517.6842 [email protected]

Olabisi Ladeji OkubadejoTel 410.528.5532 [email protected]

Shaina E. HicksTel 215.864.8613 [email protected]

Atlanta | Baltimore | Boulder | Delaware | Denver | Las Vegas | Los Angeles | Minneapolis | New Jersey | New York | Philadelphia | Phoenix Salt Lake City | Sioux Falls | Washington, DC | www.ballardspahr.com

Client Value and Innovation ProgramWe understand that the term value means different things to different clients. That is why we strive to understand each client’s goals and business objectives in order to provide efficient, innovative, and cost-effective solutions that meet their specific needs.

Ballard Spahr’s award winning Client Value and Innovation Program, which is led by Melissa Prince, our Chief Client Value and Innovation Officer, includes a team of professionals from several different administrative departments who are focused on delivering practical value-based pricing, matter management, process improvement, knowledge management, technology, and innovation strategies, and solutions designed to meet those needs.

Strategic Pricing

Our pricing and project management professionals use state-of-the art tools to gather and analyze information and evaluate the variables that drive cost. Then, we partner with clients to develop accurate cost-projections and customized pricing and value-based fee arrangements that align with their objectives and focus on results.

We assemble diverse teams that are lean and effective, characterized by the right blend of skills, clearly articulated responsibilities, and budgets and work plans that align with client priorities and utilize their in-house capabilities to maximum advantage.

Some of our clients prefer that we charge hourly rates, and we offer competitive rates that reflect our focus on efficiency and cost effectiveness. We also offer alternative fee arrangements and value-based pricing arrangements (AFAs) to help provide increased cost reductions and cost certainty in comparison to the traditional hourly pricing model. We have successfully implemented a variety of AFAs with many of our clients, and we tailor those AFAs to meet each client’s individual needs. Set forth below are examples of AFAs we have utilized with similarly situated clients:

• Fixed fees for individual matters or portfolios of matters

• Tiered fixed fees based on mutually agreed upon assumptions, such as level of complexity, (e.g.,routine, moderate, and complex matters)

• Fee collars with risk-sharing provisions

• Capped (not-to-exceed) fees

• Risk/reward structured arrangements, such as broken deal fees, success fees, hold backs, contingency fees, and otherperformance-based arrangements

• Other hybrid arrangements that are a combination of the AFAs and the risk/reward sharing arrangements identified above

To best develop price points for AFAs, we meet with our clients to define the scope of work, review comparable matters, and come up with pricing structures that are negotiated by the parties and revisited periodically to ensure the arrangements are satisfying expectations. This provides us with the opportunity to proactively address any concerns and make adjustments that may be warranted.

Matter Management and Efficiency

Clients expect that we will match their commitment to value and efficiency in the way we staff and manage their matters. That’s why we develop an internal budget for every engagement we undertake, even if our clients are not asking for one. Roles, tasks, and budget projections are clearly articulated in our work plans to promote transparency and accountability.

We monitor progress against work plans throughout the lifecycle of the engagement. Deviations can be addressed in the early stages, saving time, holding the line on cost, and avoiding unnecessary surprises. The Ballard360 tools give clients real-time access to progress reports, so they’re never in the dark about where things stand.

Ballard360

Ballard360 is a custom suite of proprietary technology that promotes client collaboration, provides greater transparency, increases cost predictability, and gives clients the information they need to keep things moving.

Since we developed Ballard360, the firm has been named one of the Most Innovative Law Firms for Business of Law and received two consecutive commendations for its innovative use of technology by the Financial Times. The firm was also recently identified by BTI Consulting as an innovation “Mover and Shaker” for our high level of client service, innovative approach to tackling client issues, and strategic use of technology, and it was a finalist for the American Lawyer Industry Awards for Best Law Firm/Client Team.

Our innovative tools in the Ballard360 suite include:

Ballard36ClientConnect

Ballard36ClientView

Ballard36DocBuilder

Ballard36CaseTracker

Ballard36ValueMatters

A customizable, secure, shared portal which allows clients to upload and share documents for review and collaboration while managing and tracking tasks.

A secure shared document library managed by legal teams working on a matter with clients.

A convenient, easy-to-use, document assembly tool that quickly and efficiently generates automated documents of exceptionally high quality saving clients time and money.

An internal case management tool that makes it easier to track and organize matter information and project status, down to the task.

An internal pricing and matter management application which provides real-time budget-to-actual information, tracks simple to complex fee arrangements, and generates budget threshold alerts in an easy to navigate dashboard.

For more information about the Client Value and Innovation Program or the Ballard360 technologies,

please reach out to Melissa Prince at [email protected] or 215.864.8140.


Diversity + Inclusion: A Core ValueDiversity is the natural result of an inclusive environment. Ballard Spahr is committed to creating a vibrant community where the needs, viewpoints, and contributions of people from all backgrounds are valued and integrated into every aspect of our firm.

ATTRACT AND HIRE

We aim to increase the presence of women, people of color, LGBTQ, and other underrepresented individuals in our firm and inthe legal profession.

• Our IL Diversity Fellowship Programs help us recruittalented, diverse summer associates in our offices across the country. A component of the Fellowship is our partnership with an in-house legal department to provide exposure to the corporate/in-house practice of law.

• We leverage our affinity-based networks to cast wide netsfor open positions and seek diverse candidate slates for open lateral positions.

• We host the Colorado Diverse Law Students Admitted WeekendReception to introduce students to the Denver legal community and encourage them to accept offers of law school admission.

• Our annual Resume Writing and Interview Skills Workshopfor Diverse First-Year Law Students in Atlanta, Denver, Philadelphia, Salt Lake City, and Washington, D.C., provides law students with advice on improving their resumes and practical tips on interviewing for a law firm position.

OUR BUSINESS RESOURCE GROUPS

• We provide a $25,000 Diversity Scholarship to a first-year law student at Arizona State University’s Sandra Day O’Connor School of Law. We hire a law student during the school year as part of the Maricopa County Bar Association Diversity Legal Writing Program. Through job shadowing, mentoring, internships, and lunch and learns, we expose hundreds of high school students to legal careers.

• Through our pipeline programs at Canyon SpringsLeadership & Law Academy in Las Vegas, Cristo Rey in Minneapolis, Constitution High School in Philadelphia, West High School in Salt Lake City, and South Mountain High School in Phoenix, we seek to expand the pipeline of minorities entering the profession.

• Ballard Women • Diverse Lawyers • Equality Ballard • Work-Life Integration

INVEST, RETAIN, AND ADVANCE

Ballard Spahr’s Diversity Council develops, promotes, and implements key initiatives to guide the firm toward its diversity and inclusion goals, and to collaborate with clients on diversity and inclusion issues of mutual interest.

• Partners on the Diversity Council provide ongoing careeradvice and mentoring sessions with diverse lawyers.The Chief Diversity Officer is on the firm’s Management Committee and Expanded Board and provides regular demographic reporting and strategy recommendations to firm leadership.

• Throughout the year, our offices host and participate in theArt of the Pitch program, where General Counsel and in-house lawyers partner with local law firms to afford diverse lawyers opportunities to develop the skills and techniques required to deliver an effective client pitch.

• Our Chief Diversity Officer works closely with lawyers,marketing and business development, and pricing professionals to propose the most efficient and diverse client teams. We assess and monitor work flow and work assignments to ensure fair and equitable utilization of lawyers on matters. We track and assess money spent with diverse suppliers and diverse co-counsel whom we partner with on client matters.

• We regularly host client events, including Continuing LegalEducation (CLE) programs for clients, lawyers, and staff that provide diversity and inclusion insights and training, highlight the diversity of our firm, and promote the skills and expertise of our lawyers.

• Our Business Resource Groups provide informalmentoring, internal networking, and professional development opportunities that support retention, advancement, and integration. Business Resource Group leaders personally welcome new diverse lawyers to the firm and look for ways to integrate them into the firm. Ballard Women hosts an annual Path to Partnership program featuring newly elevated woman partners.

• Firm leadership is committed to considering women,lawyers of color and LGBTQ lawyers for leadership and management roles and as part of client succession planning.

• INVEST, our sponsorship program is a tactical approachto recruiting, retaining, and advancing talent from diverse backgrounds. It provides career development opportunities to lawyers who have overcome significant obstacles in pursuit of a legal career, come from a disadvantaged background, or who are underrepresented at Am Law 200 law firms.

AWARDS AND RECOGNITION

• From 2011 to 2019, earned Gold Standard Certificationfrom the Women in Law Empowerment Forum (WILEF) for our success in providing professional opportunities and leadership roles to women attorneys.

• 66 percent of our 2019 partner class self-identify aswomen or lawyers of color

• Named a 2019 Working Mother Best Law Firm for Women

• Ballard Spahr is a signatory of The Business Statementfor Transgender Equality.

• 100 percent rating in the 2018 and 2019 editions of the Human Rights Campaign (HRC) Foundation’sCorporate Equality Index (CEI).

• Ballard Spahr has been ranked as one of the top 10law firms of its size for minority lawyers by Law360’s Diversity Snapshot.

• In 2019, The American Lawyer ranked Ballard Spahr15th among all major U.S. law firms for our percentage of female equity partners.

• The firm was ranked 11th for female attorneysamong comparably sized firms in the 2019 Law360 Glass Ceiling Report.

• Awarded the Mortgage Bankers Association’s firstDiversity and Inclusion Leadership Award for Organizational Diversity


A B O U T M E R C E R

At Mercer, we make a difference in the lives of more than 115 million people every day by advancing their health, wealth and careers. We’re in the business of creating more secure and rewarding futures for our clients and their employees — whether we’re designing affordable health plans, assuring income for retirement, or aligning workers with workforce needs. Using analysis and insights as catalysts for change, we anticipate and understand the individual impact of business decisions, now and in the future. We see people’s current and future needs through a lens of innovation, and our holistic view, specialized expertise, and deep analytical rigor underpin each and every idea and solution we offer. For more than 80 years, we’ve turned our insights into actions, enabling people around the globe to live, work, and retire well. At Mercer, we believe we Make Tomorrow, Today.

Mercer | 15 W South Temple, Suite 700, Salt Lake City, UT 84101 | +1 801 533 3600 | © 2019 Mercer Health & Benefits LLC.

H E A LT HH E A L T H & B E N E F I T SBy leveraging the collective influence of all our clients, we’ll work with you to create the positive change you want and need to see in the healthcare system—for the benefit of your company, your employees, and their families.

Our solutions are designed to empower employers to manage health & benefits costs, improve the quality and cost of care, and simplify the experience for everyone.

Strategy & Transformation

Health & Benefits Consulting

Center for Health Innovation

National Health Survey

Data, Technology & Analytics

Specialty Solutions

Health Management

Pharmacy Management

Life, Absence & Disability

Performance Audit

Legislation & Compliance

Digital Platform Strategy

Full Suite of Benefit Options

Voluntary Benefits

Benefits Administration

Online Enrollment

Contact Center Support

Employee Communication

Why Mercer?As a leader in health and benefits consulting, we partner closely with you to find new ways to solve your biggest employee health and wellness problems. Since 1945, our experienced consultants have been on the frontlines of healthcare transformation. We'll help you make the US healthcare system work harder for you.

2.3%Average 2+ year benefits cost increase vs. 6.6% national average1

15%Cost savings possible through Mercer Provider Network Innovations1

41%Decrease in healthcare costs for thriving employees when employers implement effective population health management solutions2

20:1Potential ROI fromMercer ManagedPharmacy Consulting3

1 Results vary by client2 HERO Scorecard in collaboration with Mercer, 2014; results may vary3 Results may vary


W E A LT HR E T I R E M E N T & I N V E S T M E N T S

Organizations are building more secure businesses. Not-for-profits are finding new ways to fulfill their mission and do more good in the world. Millions of people are now living a more secure future. Enhancing financial security in business and in life is what our work as a trusted advisor is all about.

Whether you are an employer, institutional investor, not-for-profit/endowment, financial intermediary, or family office, we can help you achieve growth in a complex world.

How can Mercer help?

Defined Contribution and Financial Wellness

Governance

Design

Administration

Advisory Services

Delegated Solutions

Not-for-Profit (Pavilion, a Mercer Practice)

Endowments and Foundations

Healthcare Organizations

Faith-based Entities

Wealth Manager Solutions

Investment Management

Asset Allocation

Multi-Manager Strategies

Defined Benefit

Pension Risk Management and Transfer

Investments

Actuarial Solutions

Administration

Why Mercer?As a leader in retirement and investment strategies, we offer a full spectrum of actuarial, administration, delegated, and investment services.

1,300+Investment professionals worldwide and 135 dedicated analysts1

#1Consultant by global Assets Under Advisement2

$11.7 Trillion Under advisement globally3

$241+BillionGlobal delegated Assets Under Management3

1 Information as of June 30, 20182 Pensions & Investments. Pension & investments Survey, November 27, 20173 Information as of December 31, 20174 Information as of March 31, 2018


“We need advanced RESEARCH AND TOOLS to help us make strategic decisions.”

“We’re looking for EXPERT ADVICE to help us uncover the right strategies.”

“We want to DELEGATE our plan so that we can focus on our core business.”

C A R E E RH E L P I N G Y O U B U I L D Y O U RW O R K F O R C E F O R T H E F U T U R EFor 16 consecutive years, Mercer has been ranked by Vault as the #1 human resources consulting firm in North America. Through digital tools, robust data and analytics, and skills-based workshops, our workforce strategy and HR consultants deliver the insights you need to prepare your organization for the future of work.

Talent Strategy

Combining human capital data, exclusive research and consulting, Mercer helps clients create a plan for the workforce ecosystem.

Diversity & Inclusion

Help clients build diverse workforces and inclusive workplaces through data and insights, world-class expertise and effective strategies.

Executive Compensation

We help organizations determine executive compensation plans that align with their strategic talent needs and relevant talent comparators.

Workforce Rewards

Attract, retain and motivate employees with an effective total rewards strategy. Employee compensation management planning, benchmarking, career frameworks and more with Mercer.

Workday Employee Communication

Get results-driven employee communication to support major HR initiatives like HRIS implementation, a new career structure, benefit changes and M&A activity from Mercer.

Talent Mobility

Optimize the value of international assignments with mobility data and support, including cost of living data, workflow management and cultural training solutions.

Workday Services

Mercer is more than a Workday implementation partner: we leverage our expertise, experience, intelligence, innovation and work ethic to create Workday enthusiasts.

HR Transformation

Enhance the effectiveness of your HR function with Mercer’s HR Transformation solutions: process redesign, role in change management, HRIS implementation, and more.


https://www.mercer.com/newsroom/vault-ranks-mercer-as-the-1-human-resources-consulting-firm-for-the-16th-year-in-a-row.html

M & A S E R V I C E SH U M A N R E S O U R C E C O N S U L T I N G ,A D V I S O R Y & T R A N S A C T I O N SThere’s a lot to consider as your company goes through an M&A. In a seller’s market, you close deals with less information and more risk than you may prefer. Deals might fail to deliver the value that was anticipated earlier on.

One common denominator drives deal value for a merger or acquisition: People. Don’t let your key talent slip through the cracks.

M&A Due Diligence

At Mercer, we’ve developed a comprehensive road map to guide buyers and sellers, whether private equity or corporate.

M&A PMO

Mercer’s M&A project management services can meet your organization’s exact needs, whether it’s blistering in- house resources or managing the entire project.

Post Merger Integration

Mercer’s post merger integration consultants can assist with your post-merger integration plan including risks, timing and objectives.

Why Mercer?

1,200+Deals annually in more than 140 countries both on the buy and sell sides for both strategic and/or financial integration

200+Dedicated M&A Consultants and 20,000 HR Technical Consultants worldwide

Across All Transaction Types– Pre-deal strategy– Due diligence– Integration or stand-up planning

and execution


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