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Mary Siceloff, Author at Weintraub Tobin - Page 46 of 180

Welcome to the Weintraub Resources section. Here, you can find our Blogs, Videos, and Podcasts, in which Weintraub attorneys regularly provide insights and updates on legal developments. You can also find upcoming Weintraub Events, as well as firm and client News.


Further SBA Guidance on Necessity Certification for PPP Loans

Small Business Administration (SBA) guidance published on May 13, 2020 adds clarity to the “necessity” certification that borrowers were required to make when applying for Paycheck Protection Program (PPP) loans.  According to this guidance, borrowers that received PPP loans of less than $2 million will be deemed to have made the necessity certification in good faith.  As to borrowers with loans greater than $2 million, if the SBA notifies the borrower that the SBA has determined that the borrower lacked an adequate basis for the necessity certification, the borrower will be able to avoid enforcement action by repaying the loan.

Background

Every PPP loan application requires that the borrower certify that current “economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”  In April 2020, Treasury Secretary Steven Mnuchin and the SBA announced that the SBA would audit select PPP loans, including all loans in excess of $2 million.  These audits will include an examination of whether the aforementioned necessity certification was made in good faith.  Our previous post on this topic is available here.

SBA Guidance

Borrowers are likely to find the following two portions of the May 13 guidance especially significant:

Safe harbor for <$2 million borrowers: “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”

Notice-and-cure opportunity for other borrowers: “SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.”

Our Observations

As the necessity certification is rather subjective, many PPP borrowers were rightfully concerned over potential second-guessing by the SBA.  Borrowers with loans of less than $2 million should take comfort in this new guidance.  PPP borrowers with loans of $2 million or more can avoid enforcement actions by repaying loans in the event of an audit.  However, because the funds will likely be spent prior to an audit, larger borrowers must still consider the prospect of a review of whether the loans were “necessary” and factor that into their spending plans.  These borrowers would also be well advised to document their company’s need for liquidity and the impact of Covid-19 on their industries in general.  As a final note, borrowers should be advised that the May 13 SBA guidance does not bind other federal agencies.

California Continues to Work With Counties for the Slow Re-Opening of the State

This is a follow up to our previous blog regarding California’s gradual entry into Stage 2 of the State’s re-opening plan – termed the “Resilience Roadmap.”  As Governor Newsom announced on Tuesday, May 13, 2020, counties are able to, and are, submitting their attestations to the State to speed up the reopening of certain businesses within their counties.  As such, the gradual reopening of businesses in Stage 2 is a fluid and rapidly evolving process driven not only by the State’s decisions on what businesses can and cannot reopen (on a modified basis) at this time, but also on what counties are doing to help move the process along for their businesses.  However, it is important to note, that the State has made very clear that if counties have more restrictive shelter-in-place orders in place, they may continue to enforce them even if the State’s order is modified to reduce certain restrictions.

The evolving re-opening plan around the State is being regularly updated on the State’s website.  Because the updates are happening in real time, it is important for businesses to regularly check the California Department of Public Health’s website to determine the current status of the State and county orders that apply to their business location(s). The website can be found here: https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Local-Variance-Attestations.aspx

The Labor and Employment attorneys at Weintraub Tobin continue to wish you and your family good health during these challenging times. If we can assist you with your employment law needs, please reach out to any one of us.

EEOC Again Updates its Guidance & FAQ’s Regarding COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws

The EEOC has updated its COVID-19 Guidance once again by adding a number of new FAQs to address issues related to the anticipated re-entry into the workplace.  The new FAQs discuss things like: an employer’s right to screen employees before entering the workplace to avoid a “direct threat” to the health and safety of employees; documentation to support an employee’s request for an accommodation; and “undue hardship” considerations when denying an accommodation based on the impact of COVID-19 on the business.  Below is a list of the updated/new FAQs.  The complete EEOC’s Guidance and FAQs can be found here.

A.6. May an employer administer a COVID-19 test (a test to detect the presence of the COVID-19 virus) before permitting employees to enter the workplace? (4/23/20)

The ADA requires that any mandatory medical test of employees be “job related and consistent with business necessity.” Applying this standard to the current circumstances of the COVID-19 pandemic, employers may take steps to determine if employees entering the workplace have COVID-19 because an individual with the virus will pose a direct threat to the health of others. Therefore an employer may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus.

Consistent with the ADA standard, employers should ensure that the tests are accurate and reliable. For example, employers may review guidance from the U.S. Food and Drug Administration about what may or may not be considered safe and accurate testing, as well as guidance from CDC or other public health authorities, and check for updates. Employers may wish to consider the incidence of false-positives or false-negatives associated with a particular test. Finally, note that accurate testing only reveals if the virus is currently present; a negative test does not mean the employee will not acquire the virus later.

Governor Newsom Announces the Gradual Beginning of Stage 2 of California’s Re-Opening Plan

On May 7, 2020, Governor Newsom announced the plan to gradually move into Stage 2 of the State’s Re-opening Plan beginning May 8, 2020.  In addition to the Governor’s announcement in his press conference, the California Department of Public Health issued industry-specific guidance and checklists for phased reopening under the State’s “Resilience Roadmap.”

Under the current State Shelter-in-Place Order, only essential businesses and workplaces are permitted to be open.  However, the State says that as of May 8, 2020, the following businesses can open with modifications:

  • Curbside retail, including but not limited to: Bookstores, jewelry stores, toy stores, clothing stores, shoe stores, home and furnishing stores, sporting goods stores, antique stores, music stores, florists. Note: this will be phased in, starting first with curbside pickup and delivery only until further notice.
  • Supply chains supporting the above businesses, in manufacturing and logistics sectors.

Although there is no specific date provided yet, the State says that the following businesses can open later in Stage 2:

  • Destination retail, including shopping malls and swap meets.
  • Personal services, limited to: car washes, pet grooming, tanning facilities, and landscape gardening.
  • Office-based businesses (telework remains strongly encouraged).
  • Dine-in restaurants (other facility amenities, like bars or gaming areas, are not permitted).
  • Schools and childcare facilities.
  • Outdoor museums and open gallery spaces.

Regardless of when a business is permitted to open (with modifications), the State is requiring all facilities to first perform a detailed risk assessment and implement a site-specific protection plan.

Finally, Governor Newsom and the Department of Public Health recognize that some communities may be able to move through Stage 2 faster and thus are implementing a system in which the counties can certify that they have made greater progress in meeting readiness criteria established by the California Department of Public Health. More information about this State-county system is expected to be released by the State on May 12, 2020.

For more information about the latest developments on the phased-reopening of California via the State’s Resilience Roadmap, go to https://covid19.ca.gov/roadmap/#guidance.

The Labor and Employment attorneys at Weintraub Tobin continue to wish you and your family good health during these unsettling times.  If we can assist you in any of your employment law needs, feel free to reach out to one of us.

California Employers Likely Immune To Employee COVID-19 Lawsuits, But More Susceptible To COVID-19 Workers-Compensation Claims

Recent news reports, like this one from the Los Angeles Times, indicate that Congress is hotly debating a proposed law to immunize employers from lawsuits alleging that their workers contracted COVID-19 illness on the job.  While business owners in California may suffer headaches or congestion from other types of lawsuits related to COVID-19 in the workplace, exposure to employee lawsuits of this kind is probably not a feverish worry.

That is because, with very few exceptions, California employees who suffer a work-related injury or illness cannot sue their employer in civil court.  Instead, such employees must pursue relief through a workers-compensation claim.

Even though there probably won’t be a rash of employee lawsuits related to COVID-19, California employers should anticipate an increase in workers-compensation claims related to that coronavirus.  Such claims typically would assert that an employee was exposed to the contagion on the job and became ill, unable to work, and in need of medical attention and treatment.

Indeed, California Gov. Gavin Newsom this week mandated a presumption that an employee’s COVID-19-related illness is work-related under certain circumstances.  In Executive Order N-62-20, signed on May 6, 2020, Gov. Newsom directed that “[a]ny COVID-19-related illness of an employee shall be presumed to arise out of … the employment for purposes of awarding workers’ compensation benefits if [specified] requirements are satisfied.”

Under that executive order, the presumption only arises if the employee tested positive for, or was diagnosed by a qualified physician as having, COVID-19 within 14 days after performing work directed by the employer at the employee’s place of employment.  The presumption does not arise if the employee worked from home during that timeframe, or if he or she was otherwise not on the job on or after March 19, 2020.

Just because such a presumption arises, that does not mean the source of the employee’s infection is beyond dispute.  On the contrary the executive order confirms that the presumption “is disputable and may be controverted by other evidence.”  Moreover, if “an employee has paid sick leave benefits specifically available in response to COVID-19, those benefits [must] be used and exhausted before any [workers-compensation] temporary disability benefits … are due and payable.”

Of course, employees who file such claims may also allege that their illness was caused by the employer’s serious and willful misconduct.  If a worker were to succeed on such a claim, it could result in the “amount of compensation otherwise recoverable [being] increased [by] one-half” under section 4553 of the California Labor Code.

To prevail on such a claim, the infected employee would have to prove that the employer maliciously (not just negligently) engaged in such misconduct.  Simply opening up for business after the government said it was ok to do so, by itself, almost surely wouldn’t amount to serious and willful misconduct – but opening sooner than that might.  Employers also may face greater risk of liability under such a claim if they maliciously (not just carelessly) fail to provide necessary protective gear or enforce social-distancing or sanitary guidelines.

Therefore, absent some unanticipated development, any presumed action that Congress may take in passing a federal law to shield employers from such lawsuits probably won’t have much of an impact in the Golden State.  Still, employers here should be mindful of the new presumption that an employee’s COVID-19 infection may be an industrial illness covered by workers-compensation laws.  To inoculate against potential claims that a COVID-19 infection was caused by serious and willful misconduct, California employers should consult with competent legal counsel to prepare for reopening their business in the coming weeks and months.

SCOTUS Considers Whether Adding a Top-Level Domain Makes a Generic Term a Protectable Trademark

On Monday, May 4, 2020, the Supreme Court of the United States heard oral argument in United States Patent and Trademark Office v. Booking.com, B.V.  For the first time in the history of the Court, the argument was live streamed via multiple outlets, including CNN, enabling us trademark junkies to listen to the argument in real time. Although it was surely an unfamiliar circumstance for the Court and its litigants, the hearing was mostly without issue. Returning to the case at issue, in USPTO v. Booking.com, the Court addressed whether a business can create a registrable trademark by adding a generic top-level domain name like “.com” to an otherwise unprotectable generic term. Specifically, the Supreme Court addressed whether BOOKING.COM is entitled to trademark registration.

The dispute arose in 2012 when Booking.com sought to register BOOKING.COM as a service mark for its online reservation services. The USPTO’s examining attorney determined that “booking” is generic for hotel reservation services, relying upon dictionary definitions of “booking” and “.com” and the use of “booking” by various other third parties who offer similar services. The examining attorney ultimately refused registration arguing that combining a generic term like “booking” with “.com” simply communicates to consumers that the business offers its services online.

Booking.com sought review of the refusal in the U.S. District Court for the Eastern District of Virginia (“District Court”). The District Court agreed with the USPTO that “booking” is generic for the services provided, but unlike the USPTO, the District Court found that combining “booking” with “.com” results in a term that is descriptive, not generic. Because descriptive, unlike generic, marks are entitled to protection if the user can establish the existence of secondary meaning, the District Court considered evidence to determine if consumers recognize BOOKING.COM as a source of services rather than a type of services. After considering survey evidence and evidence of extensive advertising expenditures proffered by Booking.com, the District Court held that that BOOKING.COM is entitled to trademark protection. The decision was affirmed by the Fourth Circuit Court of Appeals. The USPTO petitioned and the Supreme Court granted certiorari.

In short, the USPTO has two arguments. First, it argues that the matter is controlled by Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598, a pre-Lanham Act case from 1888. The USPTO argues that under Goodyear, Booking.com could not add a “corporate identifier” such as “Company” to a generic term to create a protectable trademark, and as such, it cannot simply add “.com” to a generic term to do so. According to the USPTO, the addition of “.com” to a generic term is nothing more than an identifier indicating that the company’s services are provided online. Second, the USPTO argues that the Fourth Circuit’s decision would permit businesses to monopolize language by registering generic terms as domain names, and then using those trademark rights to preclude competitors from referring to their products by the generic term.

On the other hand, Booking.com argues that Goodyear was superseded by the Lanham Act in 1946. Booking.com argues that, as amended in 1984, the Lanham Act requires courts and the USPTO to determine the primary significance of the mark to the relevant public when analyzing whether a trademark has become generic. Booking.com contends the same test should apply when analyzing whether a term is generic or descriptive, and that consumer surveys are the best way to assess primary significance. Accordingly, because Booking.com’s survey evidence indicates that the public recognizes BOOKING.COM as a trademark rather than a category of service, the mark should be deemed descriptive rather than generic. Therefore, Booking.com reasoned that, because Booking.com established secondary meaning in BOOKING.COM, the mark is entitled to registration, the Court should affirm the Fourth Circuit’s decision.

As usual, the Court had difficult questions for both sides during oral argument, with Justice Thomas even breaking his year-long silence to make inquiries to both parties. In my opinion, the Court had more difficult and troubling questions for the USPTO, but it would be inaccurate to say that the Court wasn’t concerned with the potential monopolistic advantages that could come with its affirmation of the Fourth Circuit’s decision. If I had to guess, I think the Court will affirm the decision, but I will write about the Court’s opinion when it is issued.

Webinar: Staffing Your Restaurant for Reopening

Attorneys Lukas Clary and Shauna Correia are presenting a webinar hosted by the California Restaurant Association to help restaurant owners prepare for reopening.

As restaurants look forward to how their businesses will operate with limited service or hours, they will need to evaluate staffing needs and determine essential employees, as well as understand rights and risk factors for reassigning employees’ duties, reducing employee hours or wages, bringing back furloughed employees, or laying off or continuing to furlough employees.

Date/Time:
Friday, May 8
9:30 AM – 10:30 AM PST

This webinar is a no-cost event and is available for both CRA members and nonmembers to attend.

Registration:
For more information or to register, please click here.

Emergency Paid Sick Leave Now Available for Employees of Large Employers in California’s Food Supply Sector

  • When: May 8, 2020
  • Where: Webinar

In response to the COVID-19 pandemic, the federal government recently passed emergency legislation making up to two weeks of paid sick leave benefits available to employees who are forced to miss work for reasons relating to COVID-19. We previously blogged about the paid sick leave made available under the Families First Coronavirus Response Act (“FFCRA”) here and here. The FFCRA’s paid sick leave, however, is not available to employees of large employers, defined as those with at least 500 employees. California has now stepped up to fill that gap for employees in the food supply sector who work for these larger employers.

On April 16, 2020, Governor Gavin Newsom signed Executive Order N-51-20, which provides two weeks of paid sick leave to food supply sector employees who are unable to work due to any of the following:

  • A quarantine or isolation order in place by the federal, state, or local government related to COVID-19;
  • Being advised by a healthcare provider to self-quarantine due to COVID-19 concerns;
  • Being prohibited by a hiring entity from working due to COVID-19 concerns.

The order applies to “Food Sector Workers,” which includes farmworkers, agricultural workers, workers who can, freeze, preserve, or harvest food, grocery store and restaurant workers, and delivery drivers. The leave is available to any of the above workers who perform work for a “hiring entity,” which is defined as any entity that has 500 or more employees in the United States.

The Order provides up to 80 hours of paid sick leave for any workers who an employer considers to be full time or those who worked or were scheduled to worker at least 40 hours per week, on average, in the two weeks preceding the date the worker began using the sick leave. In turn, part-time employees are entitled to take up to the average number of hours they are normally scheduled to work over two weeks. If a part-time worker has a variable schedule, they are entitled to take up to 14 times the amount of daily hours they averaged over the preceding 6 months.

The leave is available to all qualifying workers immediately upon either oral or written request. Sick leave hours must be paid at the higher of the workers’ regular rate of pay, the state minimum wage, or the local minimum wage where the worker performs work, but in no event will a worker be entitled to more than $511 per day or an aggregate cap of $5,110.

The intent of the Order is to fill the gap left under the FFCRA that provides similar paid sick leave only to employees of employers with fewer than 500 workers, rather than to provide additional leave to employees who already qualify.  The amount of paid sick leave available, and the floors and caps on the amount of pay are identical to those set forth in the FFCRA’s paid sick leave. In addition, employers are not required to provide additional leave under the Order to those employees who are already entitled to equivalent paid sick leave under the FFCRA or as a discretionary benefit from the employer.

There is, however, one key distinction between the FFCRA leave and the paid sick leave available under Executive Order N-51-20. Whereas employers are entitled to a dollar-for-dollar tax credit for all sick leave paid under the FFCRA, no such tax credit language was included in the State Order. Unless further legislation is passed covering this discrepancy, large employers paying sick leave under this Order will not be reimbursed for it from the State.

In addition to making the sick leave available, employers must post notice to employees of their leave rights under the Order. The Labor Commissioner’s office has created a notice for this purpose, a copy of which can be found here.  Finally, in addition to the paid sick leave discussed above, the Order requires that all food sector workers be permitted to wash their hands every 30 minutes and additionally as needed. Should any employer fail to comply with the order, employees may file complaints with the Labor Commissioner.

California employers should continue to monitor our blog for future updates concerning employment developments as a result of the COVID-19 pandemic. We also advise employers to seek legal advice to determine whether Executive Order N-51-20 applies to their business, and if so, what steps to take to ensure compliance.