Spring/Summer 2015 - BGD Magazine - Bingham Greenebaum Doll LLP

M AG A ZIN E The Quarterly Magazine of Bingham Greenebaum Doll LLP

WHAT DO RECENT NLRB DECISIONS MEAN FOR EMPLOYERS?

Indiana Cold Beer Battle Continues

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What Happens To Your

Digital Presence After You Die?

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Electronic Data Breach Planning SPRING 2015 Services may/will be performed by others.

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This is an advertisement. Services may/will be performed by others. BGD MAGAZINE Spring 2015

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FI R M L E T T E R S P R I N G 20 15

C O N T E N T S S P R I N G 20 15

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t Bingham Greenebaum Doll, we remain dedicated to providing value to our clients and advancing their success because to us, clients are trusted, long-term partners. This means staying current not just in our field, but in our clients’ fields as well, so that we’re able make timely and informed decisions when it comes to helping them meet their business goals. In this issue of BGD Magazine, we continue to provide information to help you make apprised choices for you and your business. Shortly following the midterm elections last November, the National Labor Relations Board moved forward with another round of changes to the laws governing labor unions. In our cover story, William J. Kishman and Aleksandr “Sasha” Litvinov examine these new rules, which are meant to drive more workforces toward unionization, and their impact all employers regardless of whether their workforces are unionized or not. As the battle between liquor stores and grocery/convenience stores carries on, what do the next twelve months, and the courts, have in store for the Hoosier state’s liquor laws? Phillip Fowler provides an update on the latest in the Indiana debate over the sale of cold beer. Wealth Management and Family Law Team Leader James Reed delves into what happens to your online presence after you die, highlights the importance of including digital assets in estate planning and suggests a few ways for you and your estate planning attorney to include these in your overall planning. There is no doubt that electronic data breaches are a hot topic. The widely-reported recent breaches of customer data are a prime example and chilling reminder that businesses, no matter the amount of security measures put in place, are at risk of an electronic data breach. To help reduce this increased liability, April A. Wimberg shares several tips to help businesses be proactive in trying to manage risk in the event a data breach occurs. Nathan A. Seger also discusses why your college student is at risk unless he/she has taken the simple yet necessary step of signing an advance directive that will carry out his/her wishes if he/she is unable to make his/ her own health care decisions. We want to make sure you have the insight necessary to continue to be successful. As always, we welcome your feedback. Please contact us with comments or suggestions for future editions of BGD Magazine.

Electronic Data Breach Planning Four tips for reducing liability risk

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A College Parent's Guide on Advance Medical Directives Don't miss this critical step before sending your kid off to college

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What Happens to Your Online Presence When You Die?

What Do Recent NLRB Decisions Mean for Employers?

Hint: Your "digital assets" don’t go with you

What to know about the new "quickie election" and email rules

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The Beer Battle Continues The heated debate over cold beer and Sunday sales goes to the next level

BGD SHORTS

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Court Decision Clears Way for Broader Use of Postnuptial Agreements

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USPTO Relaxes Guidelines on Biochemical Inventions

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Brackets For Good Brings Fundraising Madness to Indianapolis and Louisville

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Recent Supreme Court Rulings Effect on Patent Trolls

William J. Kaiser, Jr. [email protected] Bingham Greenebaum Doll LLP

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BGD MAGAZINE Spring 2015

This is an advertisement.

Services may/will be performed by others.


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01010111011000010 10101011111000000 11010110101011000 00010101010111110 00000110101101010 11000111001010011 01010111011000010 10101011111000000 11010110101011000 by April A. Wimberg, Attorney, 00010101010111110 4 Tips for Reducing Liability Risk Bingham Greenebaum Doll LLP 00000110101101010 11000111001010011 01010111011000010 There is no doubt that electronic data breaches 10101011111000000 4 Tips for Reducing Your Company’s are a hot topic. The widely-reported recent 11010110101011000 Electronic Data Breach Liability breaches of customer data are prime examples 00010101010111110 and chilling reminders that businesses, no matter Planning for and proactively adopting 00000110101101010 the amount of security measures put in place, preventative measures in the event of an 11000111001010011 are at risk of an electronic data breach. Indeed, electronic data breach is the most important as nearly every state has passed its own set of thing you can do to protect against potential 01010111011000010 unique electronic data breach laws, electronic liability. Being prepared can save you time, 10101011111000000 data breaches are becoming a much larger likely a significant amount of money, and any 11010110101011000 liability concern for companies, in terms of both reputational harm associated with the data 00010101010111110 financial and reputational harm. Because of this breach. 00000110101101010 increased liability, businesses should be proactive While the type and amount of data a company in trying to manage risk in the event a data collects or has access to will lead to varying 11000111001010011 breach occurs. plans, the following are some general tips that all 01010111011000010 businesses should keep in mind when devising a 10101011111000000 What is a Data Breach? data breach contingency plan: 11010110101011000 In general, a data breach occurs when there is an 00010101010111110 unauthorized disclosure of personal information. #1: Know what type of information is There is no model rule for what constitutes a 00000110101101010 electronically stored. breach of someone’s personal information and 11000111001010011 If a breach occurs, the information compromised each state can define what constitutes personal 01010111011000010 may not be considered “personal information” information. under certain state laws. In addition, many state 10101011111000000 In Kentucky, personal information is defined laws do not require action or impose liability if 11010110101011000 as a person’s name coupled with a social security compromised data is encrypted. Further, take number, driver’s license number, or credit/debit 00010101010111110 a hard look at the personal information you card or account number and passcode. However, 00000110101101010 are collecting and determine whether such some states define personal information much 11000111001010011 information is necessary to serve and know your more broadly. For example, Texas defines customer. If the answer is no, not collecting that 01010111011000010 personal information as any “sensitive” data would reduce your liability, as well as save 10101011111000000 information. valuable server or cloud space for more useful A data breach is commonly thought of 11010110101011000 information. in a context of computer hacking, however, 00010101010111110 data breaches can occur in a number of more 00000110101101010 #2: Know where and how that innocuous ways. In fact, most statutes are 11000111001010011 information is stored. defined so broadly that a data breach occurs in 01010111011000010 the event of something as simple as an employee Most businesses use “clouds” to store their data losing his/her mobile phone if the device on a remote server. Clouds offer different types 10101011111000000 contains personal information of a customer. As of data storage, services and security levels. Be 11010110101011000 such, most companies today, no matter their size, aware that many cloud vendors actually rely 00010101010111110 are at risk for a data breach. on subcontractors to hold their customers’ 00000110101101010 11000111001010011 01010111011000010

ELECTRONIC DATA BREACH PLANNING

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information. In many cases, these subcontractors are located overseas making any attempt to seek indemnification for a breach very difficult and expensive. Look into the services and tools your company uses to store customer data and determine if they have the correct security protocols in place to protect your customers’ information and your liability.

#3: Have a plan and be ready to react quickly.

Have your notification template in place to communicate and know who is making that communication if a data breach occurs. Figuring out what should be done and communicated and who should lead this charge should occur before a breach occurs. Not having a plan of action will delay a reaction and likely lead to increased liability and reputational harm.

#4: Test your systems and your plan.

A data breach does not have to mean that you breached the duty of care to your customers. Showing that you are using the best in class systems to prevent a breach and that you test your systems for a breach in a consistent manner will assist in showing that you are meeting your duty of care owed to your customers. Not only will the steps above help in limiting any liability your company may face if a data breach occurs, but it will also likely allow you to identify potential gaps in your data security, therefore, preventing a breach from occurring. Data breaches are inevitable these days, which is why having a well-defined incident response plan and team in place is important.

If you believe customer data has been compromised,

you should contact an attorney immediately to help you understand what legal duties you may have to notify customers and further protect their information. As stated above, having a plan and reacting quickly can help reduce any liability that may be caused by the breach.


Is My Company at Risk for an Electronic Data Breach? While the news has focused on large electronic data breaches of major retailers, electronic data breaches of a smaller scale are much more common. Even more problematic may be the reputational loss of consumer trust and confidence resulting from an electronic data breach. Any business or organization that electronically collects and/or stores personal information is susceptible to a breach. Consider the following five questions: 1. Do you have customers’ or potential customers’ information stored electronically? 2. Do you store or transmit electronic files with customers’ information? 3. Do you have client information stored on a cloud or with a third party vendor? 4. Do you process credit card transactions? 5. Do you have wireless networks in your office? If you answered yes to the first question, you are at risk of an electronic data breach. Answering yes to any of the questions that follow the first question greatly increases your risk for a data breach.


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A College Parent’s Guide to

ADVANCE MEDICAL DIRECTIVES

What are the Benefits of an Advance Medical Directive?

By Nathan A. Seger, Attorney, Bingham Greenebaum Doll LLP

Your child has made it through high school and is preparing for college. She has registered for freshman classes, spoken to her soon-to-be roommate and purchased a few books for the upcoming fall semester. As the parent, you have assisted her with various applications, made campus visits and purchased a variety of items to help her settle in quickly to campus life. From your perspective, she is essentially prepared to start the college experience. Almost undoubtedly, however, you have likely not considered encouraging her to execute an advance medical directive. This is an important conversation to have because your student is at risk unless she has taken the simple yet necessary step of signing an advance directive that will carry out her wishes if she is unable to make her own health care decisions.

Therefore, you, as the parent of your 18-year-old college student, are given no legal priority over that of your child’s adult sibling. However, in some states, those decisions may be limited to withholding or withdrawing treatment. They may not give the necessary authority to protect a patient. In other states, the law gives doctors the power to decide for patients if there are conflicts among those on the list. Most parents are shocked to learn that health care privacy laws also may restrict their access to health care information about their 18-yearold child without written authorization. Parents who have overseen all aspects of their child’s medical care since birth are now unable to get a doctor to speak with them because, legally, their children are adults and are protected by federal privacy laws. A well drafted advanced health care directive not only appoints you to make health care decisions for your student, but also provides you authorization to access otherwise protected, An advance medical directive, also known private health care information and records. as a living will and health care representative Consequently, issues arise when there are appointment, is a legal document in which your disagreements among family members as to the child specifies what medical actions should be proper health care decisions, and where a child’s taken for her health if she is no longer able to adult siblings arrive or contact a medical facility make decisions for herself because of illness or incapacity. It also names who will be responsible before a parent is able. Despite your status as parent, the doctors and medical personnel have for your child’s medical-related decisions. full authority to follow the direction of an adult The Indiana Health Care Consent Act (and sibling of your child without first consulting you. varying acts of other states) provides a list of This issue and others can be avoided in most individuals who can make health care decisions cases by simply having your 18-year-old child for you if you become unable to make your own execute an advance medical directive naming you including, among others, a parent and an adult sibling. The list, however, provides no “priority of as his or her health care attorney in fact. authority” among the potential decision makers.

What is an Advance Medical Directive?

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To best ensure quick contact, have your child list your phone numbers (in addition to your name) on her advance medical directive and then provide copies of such to the school’s medical Consider the additional benefits of having your facility and any nearby hospitals which generally child execute an advance medical directive. admit students from your child’s school. Such entities should have policies in place for keeping a record of advance medical directives. By doing • You will be authorized to make medical this, you will be facilitating and helping medical decisions for your college student, if she/he is providers get in contact with you in an efficient incapacitated; and quick manner, at times when efficiency and timeliness can make a substantial difference. • You will be contacted promptly by medical staff The process of advising a child of the should a medical situation arise; importance of advance medical directives can • You will help ensure that there will be no issues be difficult because the reality of incapacity of mind and death seems remote and can create arising from disagreement about the proper an uneasy feeling; however, the conversation is health care decisions among family members; important, and can lead to clarity and efficiency and in times when doctors, nurses, medical providers • You will be able to have a constructive and families need it most. Hopefully, you and conversation with your student regarding her/ your student will never need to use these his medical treatment preferences. documents, but if you do, you will all be glad you have them.

As named health care attorney in fact:

BGD SHORT

Court Decision Clears Way for Broader Use of Postnuptial Agreements A recent decision by the Indiana Court of Appeals makes postnuptial agreements a more attractive option for married couples who, while considering filing for divorce, decide to reconcile instead. Premarital agreements have long been recognized by Indiana statute as a means by which couples can determine a division of their property, and other issues, in the event of a subsequent divorce. However, with no corresponding statute addressing postnuptial agreements, the potential validity and enforceability of them has existed under a cloud of uncertainty. That cloud has substantially lifted with the recent decision in Hall v. Hall. In the Hall case, the Indiana Court of Appeals


held that postnuptial agreements are valid and enforceable contracts if they are entered into for the purpose of extending a marriage that was otherwise facing divorce. In these cases of reconciliation, the postnuptial agreement is then valid and enforceable in the event of a later divorce. In light of this important legal development, a married couple facing divorce now has an important new tool available to save their marriage, and they are no longer forced to decide between the two options of divorce, or remaining married on their original terms. - Michael Kohlhaas, Attorney, Bingham Greenebaum Doll LLP


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BEER BATTLE CONTINUES

The appeal is still pending. The Federal Court heard oral argument on the appeal on Jan. 7, 2015, and a decision is expected in the next few months. The history of beer sales in Indiana shows a constantly changing regulatory environment. Coming out of Prohibition, only confectionary stores were allowed to sell cold beer. That practice ended when the General Assembly passed a law prohibiting cold beer sales in 1941. It wasn’t until 1953 that liquor stores were able sell warm beer. A 1963 decision by Indiana Alcoholic Beverage Commission granted liquor stores in metropolitan areas the right to sell cold beer. These changes were eventually codified into statute in 1979. The saga of Indiana’s liquor laws saw another interesting twist recently when legislation

Challenge to Indiana’s Restrictions on the Sale of Cold Beer and Sunday Alcohol Sales Goes to the Next Level By Phillip Fowler, Attorney, Bingham Greenebaum Doll LLP

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BGD SHORT

USPTO Relaxes Guidelines on Biochemical Inventions

COLD

Regarding the equal protection claims, Young found that the State’s interest in limiting the sale of alcohol, especially to minors, justifies the restrictions on cold beer sales. Indiana’s Attorney General, Greg Zoeller, opposed the lawsuit and said that if the law is to be changed, it should happen through the legislative process, not the courts. The fight is not over. On July 15, 2014, the Indiana Petroleum Marketers and Convenience Store Association announced it was appealing Judge Young’s ruling to the next level, the Federal Court of Appeals for the Seventh Circuit, located in Chicago. “Our members and the public understand Indiana’s alcohol laws lack commonsense and we are asking the state and federal courts to put an end to this,” said IPCA Executive Director Scot Imus. “It is clear the monopoly liquor stores have limits consumer choice and hurts the growth of our state’s economy.”

WARM

Both consumers and business owners continue to deal with confusing laws and regulations in Indiana regarding the sale of cold beer. Under current Indiana law, convenience, grocery and pharmacy stores are only allowed to sell beer warm, while liquor stores are allowed to sell beer cold. The owners of those businesses (and, perhaps, many of their customers) want to change that, which led to the filing of a lawsuit in Federal Court in Indianapolis. In Indiana Petroleum Marketers and Convenience Store Association et al v. Huskey et al, a group representing convenience stores is suing to have a portion of Indiana’s alcoholic beverage laws ruled unconstitutional. Specifically, they argue (among other things) that Indiana’s alcohol laws violate the “Equal Protection” and “Privileges and Immunities” provisions of the U.S. Constitution by treating grocery stores and convenience stores differently than other permit holders (like liquor stores) by not letting the beer dealer permit holders to sell cold beer, and that the law violates the “Due Process” Clause of the Fourteenth Amendment to the U.S. Constitution because it is too vague as to the meaning of “cooled” beer. The United States District Court for the Southern District of Indiana conducted a twoday hearing on this lawsuit in February 2014, and in June issued a ruling rejecting those arguments. Regarding the plaintiffs’ contention that the cold beer law is vague, Chief Judge Richard Young referred to the low number of citations from the Indiana State Excise Police as proof that the stores know what the law permits.

was introduced in the Indiana House of Representatives that would have legalized Sunday sales of alcoholic beverages. There appeared to be support for the repeal of the Prohibition era ban, but before it could be voted on the proposed bill was amended to add new restrictions on the sale of liquor by grocery stores, such as requiring that hard liquor had to be kept behind a counter (as opposed to being displayed in aisles). These changes effectively killed the bill. Over time, laws change for a variety of reasons, including changing social beliefs, political landscapes and practical experiences. Will Indiana’s liquor laws continue to change, either through the courts or the political process? Stay tuned.


Since the Supreme Court’s Myriad decision of 2013, inventors and patent owners have struggled with trying to protect inventions that were suddenly declared patent-ineligible laws of nature or natural phenomena. In December 2014, the United States Patent and Trademark Office (“USPTO”) formally released a new set of guidelines for judging patent eligibility. These guidelines replace earlier guidelines released in March 2014. U.S. patent law states that a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Courts have long recognized three judiciallycreated exceptions to these broad categories of patent-eligible subject matter, namely, “laws of nature, natural phenomena, and abstract ideas.” Unfortunately, these three exceptions are not clearly defined. The new guidelines provide additional clarity regarding the exception for “natural phenomena.” The USPTO notes that a combination of naturally occurring products may be patent eligible if the combined product has markedly different characteristics than what


exists in nature. In the biological and chemical fields, changes in chemical structure, physical form or chemical/physical properties of a product, as compared to the product’s natural counterpart, can demonstrate markedly different characteristics. While these new guidelines may provide some clarity and comfort to those in the biological and chemical fields regarding patent eligibility, those in the software field have received little additional guidance. Case law remains unsettled on the proper method for determining whether software constitutes a patent-ineligible abstract idea. It is suggested that software developers use extra effort to provide a broad, thorough and detailed specification in any patent application. As the law changes and hopefully clarifies, and further guidance is issued by the USPTO, it may be necessary to amend the claims in the application to adapt to the changes. A strong specification will help ensure that support is available for any amendments which may become necessary. - Brian W. Chellgren, Attorney, Bingham Greenebaum Doll LLP


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addresses and any other identifying attribute. This list includes much more than your Facebook page and Twitter accounts; it should detail login information for every online account you’ve ever created, no matter how seemingly inconsequential – from Amazon and PayPal accounts to publication subscriptions and online banking accounts. If you have a password security “lock box,” include the key code on this list as well. This document should be kept with your most important documents in a secure place. Next, make sure that those trusted individuals that you would involve in estate planning know where to find all important documents and online presence information. Just like you would make sure the person named as your executor, personal representative, or trustee in your will and planning documents knows where to find those key documents in the event of your death. Keep in mind that estate and wealth planning attorneys will typically solicit information

What Happens to

YOUR ONLINE PRESENCE WHEN YOU DIE?

regarding your online presence during the planning process. The attorney will also have fireproof and secure storage.

What happens to your online presence when you die?

If you are not proactive about incorporating digital assets into your estate planning, your digital assets could be a target for virtual hijacking or exploitation. Consider specifically giving your executor or personal representative the authority to deal with your online presence, such as closing out accounts, terminating links, capturing or preserving “digital assets” stored in the cloud, obtaining funds held in online accounts, just as your representative would do with your non-virtual assets. These assets may be just as important to your loved ones as the more traditional assets.

By James Reed, Attorney, Bingham Greenebaum Doll LLP BGD SHORT Many of my clients are surprised by just how invested they really are in the online world and by the serious consideration it is given when we discuss estate and wealth planning. It is not just our social network that gets us online; we bank, invest, pay bills, buy and sell items, amass and store photos and videos, cultivate huge libraries of music and literature, too. Some clients also maintain blogs and websites, both personally and as part of their business. So, what happens to your online presence when you die? Should you and your estate planning attorney include “digital assets” in your overall planning? Below are a few items to consider when including digital assets in estate planning.

Why include “digital assets” in your estate planning?

As more and more of our lives play out across a screen, incorporating digital assets into your estate planning is useful and responsible. It will provide you with a complete view and

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understanding of your digital presence, and will likely help those left to manage your estate that may not be aware of your digital presence. The most challenging issues executors and/or family members face are often connected to wrangling a loved one’s online presence and assets. Furthermore, failure to recognize the importance of managing and prioritizing your digital presence could lead to identity issues and headaches for loved ones down the road – especially when financial or identifying information is involved. Without proper action, our digital selves remain alive – and potentially accessible to those with shady intentions – even after we’re gone.

How can you and your estate planning attorney include “digital assets” in your overall planning?

The first step in dealing with your online presence is to make a list of all online accounts. This master list should include passwords, usernames, screen names, handles, web


Brackets For Good Brings Fundraising Madness to Indianapolis and Louisville Brackets For Good welcomed BGD to the 2015 tournaments as both a Title Sponsor in Louisville and Divisional Sponsor in Indianapolis. We were thrilled to show our support of the organizations through our sponsorship in both cities. Brackets For Good created a way to leverage the energy and excitement during the month of March into something that can benefit the community at large. The 64 participating charities competed for the $10,000 grand prize in each city. One hundred percent of the donations raised through the web-based competitive giving tournament went to the participating nonprofit organizations. We look forward to seeing the positive impact it will make in our communities for years to come. Thanks to everyone who helped make the inaugural tournament in Louisville and the returning tournament in Indianapolis a success.


INDIANAPOLIS WINNER

The Humane Society for Hamilton County

LOUISVILLE WINNER

Families For Effective Autism Treatment (FEAT) of Louisville The 2015 tournament raised a total of $824,308 (Indianapolis: $571,383; Louisville: $252,925) BGD raised a total of $8,562 for Brackets For Good during the tourney! BGD MAGAZINE Spring 2015

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WHAT DO RECENT NLRB DECISIONS MEAN FOR EMPLOYERS?

than they otherwise could after first ‘coming out of the woodwork’ with an initial showing of support. Previously, it could take unions 60 days or longer to obtain elections after making their initial filings; now, unions can obtain elections within three to four weeks of announcing that they are attempting to organize a workforce.

How Should Employers Respond to These New Election and Email Rules?

Given these new rules, how can employers prepare for unionization? The first step comes before a union organizing campaign begins. Kishman explained that it is important for employers to be proactive against organizational efforts because once the campaign begins it becomes much more difficult to stop, pointing out that if an election occurs, there is a 65 percent success rate of the union to be recognized. “Even more crucial than preparing for a union organizing campaign is to lay the groundwork before the campaign begins, and an attorney can help with that,” said Kishman. This groundwork focuses first on creating a work environment that is satisfactory to employees without unions. Employers should consider providing competitive wages and benefits to employees.

An Interview with William J. Kishman and Aleksandr "Sasha" Litvinov

Shortly following the midterm elections last November, the National Labor Relations Board (NLRB) granted labor unions several more favorable changes to the law. Most of these changes will impact employers who do not have a unionized workforce. “These changes are going to primarily affect employers without unions right now. There are changes that will affect unionized employers, but most of the changes are types that will help unions organize new workplaces,” said William J. Kishman, an attorney in the firm’s Labor and Employment practice group who represents management parties in matters involving employees and labor unions. Employers in retail and service industries, in logistics and manufacturing are expected to be impacted most according to Kishman. “If you are an employer and not sure if you are at risk, you should look to see what is happening to your competitors in the same industry or area,” he explained. “That can give you a good idea of whether or how unions might target you.” In one major change (see Purple Communications, Inc.), the NLRB held that certain union and non-union employees have a presumptive right to use their employers’ email systems to discuss union organizing, workplace protests and other similar activities. Under this rule, if an employer allows an employee to use its email system to perform his

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or her job, the employer must also allow the employee to use the email system to communicate with coworkers about workplace grievances, union organizing, strikes and similar matters with very few limitations. Although this new rule does not necessarily allow employees to do this during “working time,” employers will need to exercise significant care on a practical level in order to enforce such limits without violating federal labor law, said Kishman. The NLRB also issued its final “quickie election” rules, which require employers to disclose employees’ personal email addresses to labor unions during election campaigns. Among other things, these new rules will help unions obtain elections much sooner



“Employers who provide substantially lower wages than their competitors are low hanging fruit for union organizers,” he said. It’s also important for employees to feel that the company listens to them. “Employers should consider maintaining, or in some cases creating, an open door policy. An employer can help protect itself by implementing a lawful procedure to solicit employees’ input about working conditions, which may make employees less likely to turn to unions or protected concerted activities to express themselves,” he said. Finally, employers should exhibit consistent treatment of employees by having wellestablished rules that govern conduct and discipline. Part of this includes training supervisors to enforce those conduct expectations. At the same time, employers should train supervisors on how to lawfully respond to union organizing activities. “Training supervisors on human resources functions, like employee treatment, is very important,” said Aleksandr "Sasha" Litvinov, an attorney also in the firm’s Labor and Employment practice group who focuses his practice in labor and employment litigation, arbitration and labor management relations. “It’s also important to train them on how to respond to union behaviors like strikes, walkouts, picketing, soliciting co-workers and distributing written literature. This should be done proactively, because again, once the union campaign has begun, it can be very difficult to train supervisors in a short time frame,” he said. “Because of the “quickie election” rules, nonunionized employers will have even less time to prepare written materials, train their supervisors about what they can and cannot do or say, and otherwise determine how to respond to and defeat a union organizing campaign. Thus, now more than ever, employers need to be prepared in advance with a comprehensive union avoidance plan,” he said. Litvinov also pointed out that there are nuanced rules on what a company can and cannot do before, during and after a union organizing campaign.


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“There are many ways that employers can accidentally take “problematic steps” that get them into trouble with the law, leaving them with legal fees associated with defending unfair labor charges. This is one reason why seeking legal counsel is recommended,” he said. Further, if an employer violates the law in certain respects, it can give a union certain advantages during an organizing campaign. “Fortunately, there are steps employers can take to minimize the burdens these rules create, and avoid giving labor unions another significant advantage. The best response will depend on the employer’s business needs, including how the employer needs to communicate with employees and what means it has available to do so,” said Kishman. In certain circumstances an employer may be able to negate the Purple Communications rule by communicating with employees through an “intranet” or internal website that only the employer can control, as opposed to mass emails.

An employer also may want to consider:

employers will need to take several additional steps in most cases to avoid a situation where they prevail on a grievance but then have to litigate the ULP issue separately.

Under this new standard, the NLRB generally will “defer” to an arbitrator’s decision only if the employer shows that: 1. The employer and employee (though the union) agreed to allow the arbitrator to decide the ULP issue; 2. The employer and employee actually presented the ULP issue to the arbitrator (instead of just the underlying facts);

4. The NLRB precedent reasonably supports the arbitration decision. (As with most issues, the NLRB reserved great discretion as to when an arbitrator's decision is “reasonable.”)

Altogether, as the NLRB continues to change the rules in ways that benefit labor unions, it remains important for employers to update their policies and procedures accordingly. As with most of the NLRB’s other new rules, employers can minimize the burdens they experience by responding prudently.

BGD SHORT

What Other NLRB Decisions Should Employers Know About?


Although the General Counsel’s decision is far from the final word on the matter, employers in potentially affected industries should ensure they remain apprised on the subject.

3. The arbitrator actually considered the ULP issue; and

“Ultimately, this decision means that • Limiting which employees can use the unionized employers should take specific steps in advance in order to avoid effectively giving a employer’s email system for work; union-represented employee a ‘second bite at the • Require employees to include disclaimer apple’ on a ULP charge,” said Kishman. language in any non-business emails they “A unionized employer should determine its send; or strategy to ensure it can obtain deferrals over grievances by working closely with counsel. Take • Remind employees that the employer is affirmative steps now and prepare in advance monitoring their emails (without going so far in order to ensure you can benefit from deferral as to conduct unlawful “surveillance” under standard in the same way that you used to,” he federal labor law). said. This would involve, among other steps, improving your ability to ensure a union does not bar an arbitrator from deciding a related ULP issue. In a decision that will be critical for unionized Finally, the NLRB General Counsel followed employers, the NLRB changed the longstanding through with a previously announced decision standard for when it will defer to arbitration that could dramatically expand ‘joint employer’ decisions in cases where employees have filed liability. both grievances and unfair labor practice charges The NLRB General Counsel announced last involving the same conduct. July that he planned to issue unfair labor practice Most unionized employers know that unions complaints against McDonald’s USA LLC based and employees often file grievances and ULP on alleged events concerning franchisees and charges at the same time, even though both arise their employees. In December 2014, the General from the same underlying events, because this Counsel issued those complaints. can improve their leverage, among other strategic “This issue is still the subject of litigation,” benefits. The NLRB’s decision means that explained Kishman. “However, if the General

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Counsel succeeds in expanding the applicable joint employer standard, this would have major consequences for franchisors and franchisees, as well as businesses that either provide or utilize contracting/subcontracting, temporary employment services or similar arrangements.” This expanded standard will likely affect employers in two different ways according to Kishman. “First, it would make it easier for the NLRB to find one business entity liable for the activities of another that violate federal labor laws. Second, it potentially could help unions organize employees across different franchises subcontractors,” he said.


Recent Supreme Court Rulings Effect on Patent Trolls There have been recent efforts in Congress and state legislatures to address the issue of so-called patent trolls, also known as patent assertion entities. At least three of the six patent-related decisions by the Supreme Court of the United States in 2014 have been widely regarded as impacting patent troll activity and may help curb these unwanted lawsuits in a manner that does not have the adverse consequences associated with many of the legislative efforts. Patent trolls (PAEs) are generally regarded as businesses that do not make products covered by the patent, but instead acquire patents and assert these patents against companies that make or sell products. PAEs frequently generate income by suing large numbers of small businesses with little means to fight expensive patent infringement suits, resulting in the small businesses settling the case for smaller amounts, and, thereby, supplying the PAE with a revenue stream. The Supreme Court case appearing to have the largest potential impact on PAEs is Alice Corp. Pty. Ltd. v. CLS Bank Int’l. In Alice, the Court unanimously invalidated a patent for the computer-implementation of an abstract idea.


Since much of the outcry concerning patent trolls involves the assertion of computer-related patents, this opinion was thought to have substantial potential for curbing PAE activity. Two cases, Highmark Inc. v. Allcare Health Mgmt. Sys. and Octane Fitness, LLC v. ICON Health & Fitness, Inc. were generally directed at the ability of District courts to impose penalties on marginally valid patent cases. As a result of these decisions, it is expected that District courts will have wider latitude in awarding attorney fees against patent trolls. Since the ability to broadly define this unwanted activity and pass a new law without adversely impacting good actors, such as universities, is proving difficult, it may be better for courts to use these Supreme Court rulings on a case-by-case to help curb this unwanted behavior before enacting sweeping reform that could have adverse consequences. The first version of this story was originally published in Indiana Lawyer, a publication of IBJ Media. - Douglas Gallagher, Attorney, Bingham Greenebaum Doll LLP


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