Risk of Identity Theft from Cyberattack Constitutes Sufficient Injury to Sustain Lawsuit

With cyberattacks seemingly happening with greater frequency, the risk of identity theft for many individuals has grown significantly. However, is the risk of identity theft (as opposed to actually identity theft) after a cyberattack sufficient to sustain a lawsuit for damages? In Attias v. Carefirst, Inc. , 865 F.3d 620 (D.C. Cir. 2017), the United States Court of Appeals for the District of Columbia Circuit ruled that the threat of identity theft may be sufficient to establish standing and sustain a lawsuit for damages against the company that was hacked in the cyberattack.

CareFirst and its subsidiaries provide health insurance coverage to approximately 1 million individuals in the District of Columbia, Maryland, and Virginia. In June 2014, a hacker breached 22 CareFirst computers and accessed a database containing personal information of CareFirst customers, including customer names, addresses, subscriber identification numbers, and social security numbers. CareFirst did not discover the breach until April 2015 and did not disclose it to its customers until May 2015. Seven CareFirst customers filed a class action complaint against CareFirst and its subsidiaries in federal court in the District of Columbia alleging breach of contract, negligence, and violations of various state consumer protection statutes, among other claims. The district court dismissed the lawsuit for lack of standing, finding that the alleged injury – increased risk of identity theft resulting from the data breach – was too speculative. The plaintiffs appealed.

After addressing some procedural issues, the appellate court turned to the question of whether the plaintiffs had alleged a sufficient injury to satisfy the “injury-in-fact” requirement for standing under Article III of the Constitution. To this end, a plaintiff must show that he/she has suffered an “injury-in-fact” that is “fairly traceable” to the defendant’s actions and that is “likely to be redressed” by the relief the plaintiff seeks. After reviewing some prior decisions by the United States Supreme Court, the D.C. Circuit explained that a plaintiff may establish standing by satisfying either the “certainly impending” test or the “substantial risk” test. The court then focused on the “substantial risk” test and cited a number of its previous decisions where it ruled that plaintiffs had alleged a “substantial risk” of future injury sufficient to establish standing. The “proper way to analyze an increased-risk-of-harm claim [in the D.C. Circuit] is to consider the ultimate alleged harm . . . as the concrete and particularized injury and then to determine whether the increased risk of such harm makes injury to an individual citizen sufficiently ‘imminent’ for standing purposes.” The court stated that there is no doubt that identify theft constitutes a concrete and particularized injury, but the question before it was whether the plaintiffs alleged that they faced a substantial risk of identity theft as a result of CareFirst’s alleged negligence in connection with the cyberattack.

The court noted that the plaintiffs had alleged CareFirst collected and stored personal identifying information, including personal health information and other sensitive information such as patient credit card and social security numbers, and this information was accessed during the cyberattack on CareFirst. The plaintiffs further alleged that identity thieves could use the information they obtained from CareFirst to open new financial accounts, incur charges in another person’s name, and commit various other acts of financial misconduct. Other potential harm described in the complaint included “medical identity theft,” which can lead to improper medical care, depletion of insurance, ineligibility of health or life insurance, and disqualification from certain jobs. Based on these and other related allegations, the court found that the complaint “plausibly alleges that the CareFirst data breach exposed customers’ social security and credit card numbers.” The court further noted that, based on “experience and common sense,” the plaintiffs “face a substantial risk of identity theft if their social security numbers and credit card numbers were accessed by a network intruder.” Citing to a decision by the United States Court of Appeals for the Seventh Circuit, the court further found that the risk of harm was substantial in that “[w]hy else would hackers break into a . . . database and steal consumers’ private information? Presumably, the purpose of the hack is, sooner or later, to make fraudulent charges or assume those consumers’ identities.”

The court then noted that simply alleging an injury alone is not enough to establish standing; the plaintiffs must allege a “fairly traceable [injury] to the challenged conduct of the defendant.” CareFirst argued that the plaintiffs’ injuries were “fairly traceable” only to the identity thieves, which the court acknowledged was somewhat correct and that CareFirst’s failure to secure its customers’ data was one step removed from the causal chain. The D.C. Circuit explained, however, that “Article III standing does not require that the defendant be the most immediate cause, or even a proximate cause, of the plaintiffs’ injuries; it requires only that those injuries be ‘fairly traceable’ to the defendant.” The court then “assume[d], for purposes of the standing analysis, that [the] plaintiffs will prevail on the merits of their claim that CareFirst failed to properly secure their data and thereby subjected them to a substantial risk of identity theft . . . [and, thus, it had] little difficulty concluding that [the plaintiffs’] injury in fact is fairly traceable to CareFirst.”

Lastly, the court found that the plaintiffs satisfied the last element for standing, which is that their injury must likely be redressed with a favorable decision by the court. To this end, the plaintiffs alleged that they had incurred costs to mitigate or avoid the harm of identity theft, such as identity theft protection and monitoring and conducting damage assessments. Thus, the plaintiffs could potentially recoup monetary damages.

With increasing reports of cyberattacks, including the recent report of such an attack on Experian, we are likely to see more and more lawsuits filed against companies that have been hacked. The decision in Attias illustrates how such claims can survive early dismissal from challenges to Article III standing. Companies face substantial exposure to these claims and, thus, should be taking appropriate technological, insurance, and legal precautions to prevent and mitigate against these risks.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Two Courts Recognize Causes of Action under State Law When an Employee is Terminated from Employment for Medicinal Use of Marijuana

With many states now authorizing individuals to use marijuana for medicinal purposes, companies are confronting situations where they must decide whether to continue employing individuals who have been prescribed marijuana for medical purposes and fail drug tests or terminate the employment of such individuals. Based on two recent court decisions (one from a state court in Massachusetts and one from a federal court in Connecticut), companies may face potential liability if they choose to terminate the employment of such employees.

In Barbuto v. Advantage Sales & Marketing, LLC , 477 Mass. 456, 78 N.E.3d 37 (2017), the Supreme Judicial Court of Massachusetts for Suffolk County held that an employee may state a claim for handicap discrimination under G.L.c. 151B, § 4(16), when the employee has been terminated for testing positive for marijuana and the marijuana is prescribed for medicinal purposes. In Barbuto , Christina Barbuto suffered from Crohn’s disease and irritable bowel syndrome and, as a result, she had difficulty maintaining a healthy weight. Barbuto’s doctor had prescribed marijuana to help her with her medical conditions. She used the marijuana in small quantities at home, typically in the evening and two or three times a week. Once she started taking marijuana, she was able to maintain a healthy weight. When she was offered an entry-level position at Advantage Sales & Marketing (“ASM”), she was required to take a drug test. She advised the company of her medical marijuana use and the supervisor told her that it “should not be a problem.” Barbuto failed the drug test and her employment was terminated as a result, even though she had not reported to work in an intoxicated state. She filed a charge of discrimination with the Massachusetts Commission Against Discrimination and subsequently filed suit in Massachusetts Superior Court, which the court dismissed (with the exception of the invasion of privacy claim) in response to a motion to dismiss. Barbuto appealed.

The appellate court noted that G.L.c. 151B, § 4(16) states it is unlawful for an employer to terminate an employee’s employment or refuse to hire an individual because of the individual’s handicap if the person is qualified to perform the essential functions of the position with reasonable accommodation, unless the employer can demonstrate the accommodation required would impose an undue hardship on the employer’s business. The court found that Barbuto qualified as a handicapped individual in light of her Crohn’s disease and in light of her allegation that she was qualified to perform the essential functions of the position with a reasonable accommodation, with the accommodation being a waiver of the company’s policy barring employment by any person who tests positive for marijuana. ASM argued that she failed to state a claim, however, because (1) the only accommodation Barbuto sought – her continued use of medicinal marijuana – was a federal crime, which is unreasonable on its face, and/or (2) even if she were a qualified handicapped person, she was terminated from employment for failing a drug test, not due to her handicap.

With respect to ASM’s first argument, the court explained that ASM still had a duty to engage in the interactive process under Massachusetts law to determine whether there were alternative accommodations that would not violate federal policy. If there was no viable alternative, ASM had the burden to prove under Massachusetts law that use of medicinal marijuana would cause an undue burden on its business in order to justify refusing to make an exception to its policy against marijuana use. The court noted that refusal to engage in the interactive process alone is sufficient to support a claim of discrimination under Massachusetts law, provided that there is a reasonable accommodation available to enable the claimant to be a “qualified handicapped person.” Aside from the interactive process violation, the court rejected ASM’s argument that use of marijuana is per se unreasonable because the Massachusetts statute authorizing the use of medicinal marijuana makes the use of marijuana no different than using any other prescribed medication and, where marijuana is the most effective medication for treating a debilitating condition, an exception to a company policy prohibiting the use of marijuana is reasonable on its face. The court bolstered this conclusion by noting that the marijuana act stated that no patient shall be denied “any right or privilege” on the basis of the patient’s marijuana use. The court further noted that ASM’s argument about federal policy was not proper because, under federal policy, only Barbuto risked punishment for using marijuana, and the company did not.

The court also rejected ASM’s second argument, comparing the company’s policy prohibiting marijuana use to a policy prohibiting any medication and terminating a diabetic employee for taking insulin. The court explained that an employee taking marijuana consistent with a doctor’s prescription is comparable to an employee taking any other medication in response to a doctor’s prescription and applying the policy prohibiting marijuana use effectively denies a handicapped employee from utilizing a reasonable accommodation to perform his/her job.

The court went on to comment that by allowing Barbuto’s claim to survive dismissal at this stage did not mean that she would prevail at trial or even at summary judgment. For example, the court noted that the employer might be able to demonstrate that continued use of marijuana would impair the employee’s job performance or pose a significant safety risk that is unacceptable. Similarly, the court noted that an undue hardship may be established if, for example, the employer can show the employee’s marijuana use would violate the company’s contractual or statutory obligations. Lastly, the court went on to find that the marijuana statute did not include a private right of action for employment discrimination and the employee’s statutory remedy for discrimination in this instance would be based only on statute prohibiting handicapped discrimination.

In Noffsinger v. SSC Niantic Operating Co. LLC , No. 3:16-CV-01938(JAM), 2017 WL 3401260 (D. Conn. Aug. 8, 2017), the United States District Court for the District of Connecticut similarly ruled that an employee may not be discriminated against for using medicinal marijuana, but this court analyzed whether federal law preempts the Connecticut law that prohibits employers from firing or refusing to hire individuals who use marijuana for medicinal purposes. The general fact pattern in Noffsinger is similar to that in Barbuto in that the employee who used medicinal marijuana failed a drug test and her job offer was rescinded as a result.

In Noffsinger , the company argued that the Controlled Substances Act, Americans with Disabilities Act, and Food, Drug and Cosmetic Act all invalidate Connecticut’s Palliative Use of Marijuana Act (“PUMA”), which protects individuals from termination or being denied job offers for using medicinal marijuana. Specifically, SSC Niantic Operating Company (“SSC”) argued that “obstacle preemption” applied, meaning that PUMA “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The fact that there is tension between federal and state law is not sufficient to establish obstacle preemption; rather, there must be an actual conflict and it must be a “sharp one” with an overriding federal purpose and objective. The court proceeded to conduct an in-depth analysis of each of the federal statutes and ultimately concluded that no conflict existed to justify federal preemption. Therefore, the court ruled that Katelin Noffsinger stated a claim upon which relief could be granted and denied SSC’s motion to dismiss with respect to Noffsinger’s claim under PUMA (the court’s analysis with respect to the other counts is beyond the scope of this post).

The decisions in Barbuto and Noffsinger are significant because they may be the start of a trend among courts to recognize causes of action that protect employees from adverse employment actions for using medicinal marijuana. Indeed, for many years, companies generally have been able to rely on the fact that it is against federal law to use marijuana and, therefore, they did not have to tolerate its use by employees. While circumstances may arise where medicinal marijuana use may not be protected, such as when an employee’s job duties include driving a company vehicle and the marijuana impairs the employee’s ability to drive, employers are going to have to handle situations involving medicinal marijuana on a case by case basis while monitoring developments in this area of the law, as these outcomes will continue to be driven by state law.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Fourth Circuit Analyzes What Constitutes an Equivalent Position for FMLA Purposes

In Waag v. Sotera Def. Sols., Inc. , 857 F.3d 179 (4th Cir. 2017), the United States Court of Appeals for the Fourth Circuit ruled an employee who takes leave under the Family Medical Leave Act (“FMLA”) does not have an absolute right to return to his/her original position and as long as the employee is reinstated to an “equivalent” position. The court’s decision in Waag illustrates that determining what constitutes an “equivalent” position can be a fact intensive analysis and it sheds light on what employers should consider when reinstating an employee to a different position than the one he/she had before taking FMLA leave.

In September 2012, Sotera Defense Solutions, Inc. (“Sotera”), was selected as a non-exclusive prime contractor for the Software and System Engineering Services Next Generation (“NexGen”) program to provide warfighting software solutions and support to the United States Army at the Aberdeen Proving Ground in Maryland. In early October 2012, Gary Waag (“Waag”) was asked to become the Program Manager (“PM”) for Sotera’s NexGen work because he had experience managing indefinite delivery/indefinite quantity (“IDIQ”) contracts. Since the PM position was focused mainly on marketing and business development, Waag’s salary was not directly billable to the government and, instead, it was paid out of Sotera’s overhead costs.

On October 17, 2012, Waag sustained a severe hand injury and took medical leave under the FMLA. Sotera appointed another employee to be the new NexGen PM because Waag was unable to return to work until mid-December or early January 2013. When Waag returned from leave in late December 2012, he was assigned to work at Sotera’s new Electronic Warfare Program (“EWP”), which involved modeling and simulation. Waag had experience in these areas and spent most of his time in January 2013 on the EWP Management Trainer proposal, which involved a $70-80 million contract. The proposal was submitted in February 2013.

Shortly after Waag began his medical leave, the federal government implemented substantial budget cuts under its federal budget sequestration program. As a result, Sotera received substantially less work from the federal government and missed its 2012 revenue goal by $110 million. In turn, Sotera needed to cut $2.3 million from its overhead costs and it achieved that by laying off some of its employees. Sotera laid off “employees who were not performing work directly billable to the government, and ‘who were assigned to less important strategic priorities.”’ Waag was among the employees laid off in February 2013.

Waag filed suit in federal court in Virginia claiming “Sotera violated his FMLA rights (1) by failing to restore Waag ‘to the same position’ after he returned from medical leave, (2) by failing to restore him to a ‘bona fide equivalent position,’ and (3) by ‘terminating his employment.’” The district court granted Sotera’s motion for summary judgment. Waag appealed.

To support his first argument, Waag relied on 29 C.F.R. § 825.214, which provides:

On return from FMLA leave, an employee is entitled to be returned to the same position the employee held when leave commenced, or to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment. An employee is entitled to such reinstatement even if the employee has been replaced or his or her position has been restructured to accommodate the employee’s absence.

In response to Waag’s argument that he was not reinstated to his original position, the Fourth Circuit explained the “[FMLA’s] restoration provision does not indicate a preference for restoring covered employees to their pre-leave positions over ‘equivalent’ positions, and it does not require an employer to hold open an employee’s original position while that employee is on leave.” The Fourth Circuit also rejected Waag’s reliance on § 825.214, stating the regulation is consistent with the FMLA because “[t]he phrase ‘such reinstatement’ refers to the reinstatement mentioned in the previous sentence of the regulation—reinstatement ‘to the same position the employee held when leave commenced,” or reinstatement ‘to an equivalent position.’” (emphasis in original).

With respect to Waag’s second argument about not being reinstated to an equivalent position, the Fourth Circuit explained, “[t]he equivalency requirement . . . does not extend to de minimus, intangible, or unreasonable aspects of the job.” The Fourth Court reiterated the district court’s findings that Waag’s salary for both jobs was $189,000, he was eligible for bonuses in both positions, his worksite was the same as before, his title was “Senior Director” for both positions, and he reported to a Sotera Vice President in both positions. In trying to show that the positions were not equivalent, Waag pointed to a “47-item Action List” that indicated numerous job duties of the NexGen PM position were not related to business development. The Fourth Circuit disagreed, stating “these duties were conditional [and] Waag would have performed them only after Sotera had successfully bid for a NexGen task order.” However, because “the government did not award any NexGen task orders until early 2014, these were not duties that Waag was performing before taking medical leave or could have performed after returning from leave.” Waag also pointed to a number of other alleged differences between the positions that the court found unpersuasive. The Fourth Circuit also commented that “[t]o the extent Waag complains about a loss of prestige, such a difference is de minimis and would not prevent Waag’s post-leave position from being considered equivalent to his original one.” Under these circumstances, the Fourth Circuit found “no reasonable factfinder could conclude that Sotera failed to place Waag in ‘an equivalent position’ or that the difference between the two jobs were more than merely de minimus.”

The Fourth Circuit also rejected Waag’s third argument that his FMLA rights were violated because Sotera restored him to a “sham position [under 29 C.F.R. § 825.216(a)(1)], created to make it appear that Waag had been restored to an equivalent position but that in actuality was slated for elimination.” The Fourth Circuit concluded “no reasonable juror would believe . . . that Wagg was put in a short-term sham job to cover Sotera’s decision to fire Waag when he returned from leave.”

Lastly, the Fourth Circuit rejected Waag’s retaliation claim because “Sotera established a legitimate non-discriminatory reason for terminating Waag[,]” namely that “the ‘financial hardship’ resulting from government sequestration forced Sotera to lay off numerous employees, of which Waag was one.” The Fourth Circuit explained even though “close temporal proximity” between Waag’s medical leave and him being laid off “may suffice to demonstrate causation[,]” for a retaliation claim, Waag “still ‘bears the burden of establishing that Soterra’s proffered explanation is pretext for FMLA retaliation.” The Fourth Circuit found “no genuine issue of material fact ‘such that a reasonable factfinder could conclude the adverse employment action was taken for an impressable reason, i.e. retaliation.”

The Fourth Circuit’s decision in Waag is important for a few reasons. First, it dispels a common misconception about the FMLA that companies must restore employees to the same position after they return from FMLA leave. Companies have the option to restore an employee returning from FMLA leave to the same positon or an equivalent position. Second, Waag illustrates how determining what constitutes an “equivalent” position under the FMLA can be a fact intensive analysis and it sheds light on what companies should consider when reinstating an employee to a different position than the one he/she occupied before taking FMLA leave.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Court Finds LinkedIn Posts Likely Violated Non-Solicitation Provisions of Employment Agreement

Many court decisions have found that communications on social media did not constitute improper solicitations, but the United States District Court for the District of Minnesota recently found in Mobile Mini, Inc. v. Vevea , Civil No. 17-1684 (JRT/KMM), 2017 WL 3172712 (D. Minn. July 25, 2017), that two LinkedIn posts by a former employee likely constituted solicitations in violation of her employment agreement with her former employer. While the court’s conclusion in this regard is significant, so is the court’s commentary on the significance of social media “status updates.”

Starting in March 2013, Liz Vevea was employed as a Sales Representative by Mobile Mini, Inc., a portable storage business. Vevea signed a Confidentiality, Non-Solicitation, Non-Compete and Inventions Agreement (the “Agreement”), which provided that Vevea would (1) “not work in the Portable Storage Business at a location within fifty miles of Mobile Mini’s Lino Lakes office for six months[;]” (2) “not make any Portable Storage Business sales to Company Customers for nine months[;]” [and] (3) “not directly or indirectly solicit Company Customers for the purpose of making portable storage sales.” The Agreement defined Company Customers as “any past, present, or prospective [Mobile Mini] customer . . . with whom or which [Vevea] had [Mobile Mini] business related contact . . . at any time during the one (1) year period before [Vevea’s] employment [ended] . . . or about whom or which [Vevea] learned confidential information during that one (1) year period.” In November 2016, Vevea resigned from Mobile Mini and, less than six months later, she began working for a direct competitor of Mobile Mini’s, Logistics Services, Inc. (“LSI”), within 50 miles of Mobile Mini’s Lino Lakes office. Shortly after starting employment with LSI, Vevea began working in for Citi-Cargo & Storage, Inc. (“Citi-Cargo”), another direct competitor of Mobile Mini that is owned by the same parent company as LSI.

About six months after resigning from employment with Mobile Mini, Vevea updated her LinkedIn profile to reflect her new employment with Citi-Cargo. The post stated the following:

I’m excited to have joined the Citi-Cargo Sales Team! We lease and sell clean, safe, and solid storage containers and offices. We are locally owned and operated, with local live voice answer. We offer same day delivery to the Metro, and have consistent rental rates with true monthly billing. Give me a call today for a quote. [phone number included].

The post included photos of Citi-Cargo’s portable containers. Almost one week later, Vevea also posted on LinkedIn: “Call me today for a storage container quote from the cleanest, newest, safest and best container fleet in the State of Minnesota. Let’s connect! [phone number listed].

Mini Mobile sued LSI and Citi-Cargo, alleging breach of contract and tortious interference with contractual relations. Mini Mobile filed a motion for a temporary restraining order and/or a preliminary injunction, while the defendants filed a motion to dismiss for lack of subject matter jurisdiction. This post will focus on the motion for injunctive relief and the court’s analysis under Delaware law whether Mini Mobile was likely to win on the merits.

In determining the likelihood that Mini Mobile would prevail on the merits, the court noted that the Agreement likely was enforceable and then focused on the two LinkedIn posts that formed the basis of Mini Mobile’s claim. The court found that the two posts were “not mere status updates announcing Vevea’s new position and contact information” and, citing opinions issued by a federal court in Ohio and state trial court in Massachusetts, noted that, if the posts were “mere status updates,” they likely would not constitute breaches of the Agreement. The court proceeded to explain that the language of Vevea’s posts demonstrate that her “purpose was to entice members of Vevea’s network to call her for the purpose of making sales in her new position at Citi-Cargo.” In reaching this conclusion, the court also considered a declaration provided by a Mini Mobile Branch Manager who stated that, when he and Vevea had worked together, they “discussed using LinkedIn as a marketing tool, to advertise Mini Mobile’s products and services” and Vevea did in fact use LinkedIn for that purpose while she was employed by Mini Mobile. The court further found that Vevea’s network of LinkedIn contacts likely included at least one, if not many, Company Customers. For these reasons, the court found that Mini Mobile likely would prevail on the merits. The court also found that Mini Mobile likely would suffer irreparable harm in the absence of a preliminary injunction and the balance of the equities and public interest also favored issuing the injunction.

Ultimately, the court granted Mini Mobile a preliminary injunction that required Vevea to remove any LinkedIn posts that advertised Citi-Cargo products or services or that requested viewers contact her about such products or services. Vevea also was enjoined from creating any new similar posts on LinkedIn or any other form of social media for the duration of the non-solicitation period to the extent that the Vevea’s network on the social media forum included at least one Company Customer, but Vevea was permitted to post “status updates” that included her place of employment and contact information.

The court’s decision in Mini Mobile is significant because it illustrates how LinkedIn can be used to violate a non-solicitation agreement. Although no communication in this case targeted a specific individual or group of individuals, Vevea used LinkedIn to reach a wide audience and sell the services of her current employer to customers of her former employer (which the court assumed at least some of which were included in her network). Mini Mobile also is significant for its analysis of “mere status updates.” Although Vevea did not use LinkedIn to post only a “status update” with her new contact information, the court specifically noted that such an update would not constitute an improper solicitation. This conclusion, however, downplays the utility of social media. While the court assumed that at least some of Vevea’s contacts were among the customers she used to service for her former employer, the court’s conclusion that a mere “status update” would not constitute an improper solicitation fails to acknowledge why someone in Vevea’s position would include such a status update on his/her LinkedIn profile – to encourage customers and potential customers in the individual’s network to contact the employee to conduct business. Companies should continue to monitor this area of the law and consult with counsel when developing policies, practices, and agreements to address these issues. For more information on these issues, you can review this article and a post here about a recent decision that reached a different conclusion.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Family Awarded Settlement in Tragic Medical Misdiagnosis Case

Unfortunately, many cases of medical misdiagnoses are often fought posthumously after a patient succumbs to the disease that a doctor failed to diagnose. Such a case was brought to us after a dermatology physician assistant (PA) failed to diagnose and treat a malignant melanoma on the patient’s scalp. Tragically, the skin cancer became metastatic and, eventually, fatal.

Evidence

It was revealed throughout the course of discovery that the PA who had treated the patient had not received any training in the field of dermatology outside of on-the-job shadowing of the practice’s dermatologists. Without the tools or knowledge to make a skin cancer diagnosis, the PA failed to catch the melanoma before it metastasized and led to the patient’s death.

Settlement

With clear evidence that the PA’s lack of training contributed to the death of the patient, the medical malpractice team at Hyatt & Weber was able to help the family of the patient receive the financial compensation they deserved. The case was settled in favor of our client for an amount of over $500,000.

If a missed diagnosis led to suffering or death of you or a loved one, you could be due financial compensation. If you are suspicious of medical malpractice and you’re ready to take legal action, call Hyatt & Weber at (410) 384-4316.

Court Invalidates Proposed Rule Raising Salary Level of Exempt Employees under FLSA

In Nevada v. United States Department of Labor , 227 F. Supp. 3d 696 (E.D. Tex. 2017), the United States District Court for the Eastern District of Texas ruled the final rule issued by the United States Department of Labor (“DOL”) during the Obama Administration that sought to increase the salary of exempt employees under the Fair Labor Standards Act (“FLSA”) from $455 per week to $913 per week exceeded DOL’s authority and, thus, was invalid.

By way of background, shortly before the effective date of the new regulation, 22 states, led by the State of Nevada, filed a lawsuit against DOL challenging the final rule, claiming it unlawfully regulated the states. The Plano Chamber of Commerce, among others representing the interests of businesses, filed their own lawsuit also claiming the final rule was invalid. The two lawsuits were consolidated in the Eastern District of Texas. On November 22, 2016, the court issued a preliminary injunction (written about here ), preventing the new regulation that sought to change the salary level of exempt employees from taking effect on December 1, 2016. Prior to the preliminary injunction, the business plaintiffs had moved for expedited summary judgment on the validity of the final rule, and the state plaintiffs later joined in that motion.

In granting the business (and state) plaintiffs summary judgment, the court examined the plain meaning of the FLSA. In this regard, it noted that the executive, administrative, and professional exemptions (collectively referred to as the “EAP Exemption”) by their plain meaning consider the exempt status of an individual based on his/her performance of “bona fide” exempt job duties. The court then noted that the FLSA authorizes DOL to define or set limits on the reach of the EAP Exemption, but the FLSA did not authorize DOL to define the reach of the EAP Exemption with “a salary-level test that will effectively eliminate the duties test as prescribed by Section 213(a)(1)” of the FLSA. The court also noted that DOL does not “have the authority to categorically exclude those who perform [EAP Exempt] duties based on salary level alone.” The court found that because the final rule more than doubled the minimum salary previously used to identify exempt employees, “[t]his significant increase would essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level.” “As a result, entire categories of previously exempt employees who perform ‘bona fide [EAP Exempt]’ duties would now [not] qualify for the EAP exemption based on salary alone.” This is not what Congress intended according to the court and, therefore, the final rule is not entitled to deference for enforceability under the Chevron test (the test established by the United States Supreme Court in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984).

It is unclear at this point whether the federal government will appeal the court’s decision. If the government does not appeal, the salary test that has long been in effect will continue to govern exempt status determinations for the foreseeable future, as it appears unlikely that this Administration will seek to increase the exempt salary level to a more modest amount. Even if the government were to appeal the decision, businesses will be able to continue to operate under the “old” paradigm for the foreseeable future, as the preliminary injunction has been in effect for nearly one year and it will be a long time before the appellate court were to issue a ruling. Thus, it appears that there will be no new salary test for businesses to apply to determine the exempt status of employees under the FLSA for the foreseeable future.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Court Finds Invitation to Connect on LinkedIn Did Not Violate Non-Solicitation Agreement

The use of social media as a networking platform continues to be an evolving area of law as it relates to compliance with non-compete and non-solicitation agreements. In Bankers Life and Casualty Company v. American Senior Benefits, LLC , — N.E.3d –, No. 1-16-0687, 2017 IL App (1st) 160687 (Ill. App. Ct. Aug. 7, 2017), the First Judicial District of the Appellate Court of Illinois held that an employee’s invitations to connect with former colleagues on LinkedIn were not improper solicitations in violation of his employment agreement.

Bankers Life and Casualty Company (“Bankers Life”) hired Gregory Gelineau in 2004 and had him sign an employment agreement in 2006 stating in relevant part that, during his employment and for a period of 24 months after, he would not “personally or through the efforts of others, induce or attempt to induce: (a) any agent, branch sales manager, field vice president, employee, consultant, or other similar representative of the Company to curtail, resign, or sever a relationship with the [C]ompany; (b) any agent, branch sales manager, field vice president or employee of the Company to contract with or sell insurance business with any company not affiliated with the [C]ompany, or (c) any policyholder of the [C]ompany to relinquish, surrender, or lapse any policy issued by the [C]ompany.” Gelineau’s employment with Bankers Life ended on or about January 15, 2015, and he went to work for American Senior Benefits (“ASB”), a competitor of Bankers Life. Once employed by ASB, Gelineau sent requests on LinkedIn to connect with at least three Bankers Life employees (Richard Connors, Sally Levesque, and Russell Dolan) who worked in the Warwick, Rhode Island office. According to Bankers Life, when those employees clicked on Gelineau’s profile, they would see a job posting for ASB.

Bankers Life filed suit against Gelineau, ASB, and various individuals, alleging breach of contract. The trial court granted summary judgment for Gelineau and ASB. Bankers Life appealed.

The appellate court reviewed some cases where courts were asked to decide whether communications via social media constituted improper solicitations in violation of employment agreements. Several of the cases the court examined are analyzed in this article addressing the interplay of social media and the protection of customer lists as trade secrets. The court ultimately concluded that the invitations Gelineau sent the employees were “generic emails that invited recipients to form a professional connection.” The court found that the “generic emails” were merely “request[s] to form a professional networking connection” and they “did not contain any discussion of Bankers Life, no mention of ASB, no suggestion that the recipient view a job description on Gelineau’s profile page, and no solicitation to leave their place of employment and join ASB.” The court further commented that any further steps involving views of Gelineau’s profile page or job postings on this profile page “were all actions for which Gelineau could not be held responsible.” For these reasons and others, the court affirmed the grant of summary judgment against Bankers Life.

The court’s decision in Bankers Life is significant because it constitutes another court decision among a relatively small, but increasing, number of court decisions that has found an invitation to connect via social media does not constitute a solicitation in violation of a non-compete/non-solicitation agreement. In reaching this conclusion, the court seemed to follow the line of reasoning in one of the opinions it cited and relied on, where the court had commented that “it is the substance of the message conveyed, and not the medium through which it is transmitted, that determines whether a communication is a solicitation.” While there is logic to that statement, it also oversimplifies the power of social media. As noted in another court decision and blog post here , social media is “revolutionizing modern marketing” and can be “a powerful tool to build . . . professional networks.” Indeed, when looking at the facts in Bankers Life , the court essentially absolved Gelineau of any responsibility for the employees viewing the job post on his profile page. Such a conclusion fails to appreciate the power of social media – by connecting with these employees and having them view the job posting on his profile page, Gelineau did exactly what one wants to achieve professionally when building a network, which is to get one’s contacts and other people’s contacts to view professional related posts on one’s profile page. This continues to be an evolving area of law that should be monitored closely and addressed in consultation with counsel.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.

Medical Diagnostic Errors: Mistake or Malpractice?

It is part of human nature to make mistakes; they happen often and to all of us. Unfortunately, sometimes our mistakes can have life-threatening effects on another person. When a doctor makes a mistake, oftentimes it is one that cannot be fixed.

When a doctor’s medical diagnostic error results in further suffering or death, that mistake is considered malpractice. Diagnostic errors can come in many forms and severities. The three most common diagnostic errors are misdiagnosis, missed diagnosis and delayed diagnosis.

Misdiagnosis

A misdiagnosis means that a doctor gave a diagnosis and began treatment, but the diagnosis was wrong. The actual illness was not diagnosed and went untreated, leading to a worsening of the condition or death.

Missed Diagnosis

Instead of starting treatment for the wrong condition, a missed diagnosis means there was no treatment at all because the doctor failed to find anything to treat. The condition was ignored, the patient was given a clean bill of health, and the condition later worsened as a result.

Delayed Diagnosis

In a case of delayed diagnosis, a patient may see a doctor about a condition or illness when they first feel symptoms, but the doctor does not discover the cause of the symptoms until it is too late to be successfully treated.

What to Do If You Suspect a Diagnostic Error

If a doctor made a medical diagnostic error that led to the worsening of a condition or death for you or a loved one, you may be due financial compensation. Don’t hesitate. Consult an attorney to see if you have a case.

We at Hyatt & Weber handle many cases of medical diagnostic errors and will make it our mission to get you the compensation that you deserve. Contact our office at (410) 384-4316 to learn more about how we can help.

Hyatt & Weber Sponsors Developer Panel

Hyatt & Weber was pleased to support the BWI Business Partnership’s signature breakfast on September 6th with our multi-media co-sponsor, Bignell Watkins Hasser. It was a full house at the BWI Airport Marriott as the Partnership welcomed panelists from St. John Properties, Inc., The Cordish Companies, Merritt Properties, LLC, and BWI Thurgood Marshall Airport (BWI) for the first local developer panel focused on the BWI region.

Hyatt & Weber attorney Steven Hyatt and marketing director Alice Simons attended the sold-out event with over 200 local businesses from Baltimore, Anne Arundel, Howard and surrounding counties. Attorneys and staff attend breakfast each month to hear some of the top names in the Maryland region speak at the Signature Breakfast Series. Past speakers have been from industries ranging from local government, large businesses and well known sport teams. Hyatt & Weber is pleased to be members of the Partnership.

For more information about the BWI Business Partnership, please visit their website .

When is a Facebook Friend a “Friend” Versus an “Acquaintance”?

In Law Offices of Herssein and Herssein, P.A. v. United Services Automobile Association , No. 3D17-1421, 2017 WL 3611661 (Fla, Dist. Ct. App. Aug. 23, 2017), the Third District Court of Appeal for the State of Florida was asked to decide whether a judge presiding over a case who was “friends” on Facebook with an attorney representing a potential witness and party in the same case should recuse himself. The court concluded that recusal was not required. What was even more interesting, however, was the court’s analysis of the nature of relationships online involving social media.

In this case, the Herssein law firm sued its former client, USAA, for breach of contract and fraud. In the litigation, the law firm accused a former USAA executive of witness tampering and indicated he was a potential witness and defendant. In response to the allegations, USAA retained an ex-circuit court judge, Israel Reyes, to represent the executive. Reyes, however, was “friends” on Facebook with the judge presiding over the matter, which raised concerns for the Herssein law firm about the judge’s impartiality and they sought to disqualify the judge from presiding over the case.

The standard for disqualification of a judge in Florida is whether “the facts alleged (which must be taken as true) would prompt a reasonably prudent person to fear that he could not get a fair and impartial trial.” The court started its analysis by noting that an allegation of mere “friendship” between a judge and attorney is not legally sufficient to justify disqualification under Florida law. Despite this baseline as a starting point, the court acknowledged that under certain circumstances the relationship between a judge and lawyer may warrant disqualification, citing as an example a case where the judge and prosecutor were “friends” on Facebook.

The court examined a number of cases where the issue of recusal was addressed in light of social media activity. One case in particular noted that the term “friend” on Facebook was a “term of art,” explaining:

A number of words or phrases could more aptly describe the concept, including acquaintance and, sometimes, virtual stranger. A Facebook friendship does not necessarily signify the existence of a close relationship. Other than the public nature of the internet, there is no difference between a Facebook “friend” and any other friendship a judge might have. [A prior court decision]’s logic would require disqualification in cases involving an acquaintance of a judge. Particularly in smaller counties, where everyone in the legal community knows each other, this requirement is unworkable and unnecessary. Requiring disqualification in such cases does not reflect the true nature of a Facebook friendship and casts a large net in an effort to catch a minnow.

The court in Herssein agreed with this prior court’s decision in that “[a] Facebook friendship does not necessarily signify the existence of a close relationship.” The court reached this conclusion for three reasons. First, citing cases from Kentucky and Tennessee, the court noted that some people have thousands of Facebook “friends” (the relevant party in one case had nearly 2,000 “friends” and, in the other case, one person had over 1,500 “friends” while another person had more than 4,900 “friends”). Second, the court concluded that “Facebook members often cannot recall every person they have accepted as ‘friends’ or who have accepted them as ‘friends.’” To support this conclusion, the court cited as an example a case from Pennsylvania where a student who had over 1,000 “friends” did not even know he was “friends” on Facebook with another student he was accused of assaulting. Third, the court found that many Facebook “friends” are selected based on Facebook’s data-mining technology, as opposed to personal interactions. In this regard, the court found that Facebook data-mines a member’s current list of “friends,” uploaded contacts from smart phones and computers, emails, names tagged in uploaded photographs, internet groups, networks such as schools and employers, and other publicly and privately available information, which is then analyzed by Facebook’s proprietary algorithms to predict associations and suggest to the member “people you may know” as potential “friends.” While the court acknowledged that these data-mining efforts are “revolutionizing modern marketing and national security systems” and can be “a powerful tool to build personal and professional networks,” they have “nothing to do with close or intimate friendships of the sort that would require recusal.”

The court acknowledged that some Facebook “friends” certainly constitute friends in “the classic sense” where there is particular affection and loyalty. The court also determined that many Facebook “friends” do not constitute friends in that classic sense, concluding that most Facebook “friends” “probably” are a “casual friend; an acquaintance, and old classmate, a person with whom the member shares a hobby; a ‘friend of a friend;’ or even a local celebrity like a coach.”

“Because a ‘friend’ on a social networking website is not necessarily a friend in the traditional sense of the word, [the court] h[e]ld that the mere fact that a judge is a Facebook ‘friend’ with a lawyer for a potential party or witness, without more, does not provide a basis for a well-grounded fear that the judge cannot be impartial or that the judge is under the influence of the Facebook ‘friend.’” The court further noted that its conclusion conflicts with the court’s opinion in Domville v. State , 103 So. 3d 184 (Fla, Dist. Ct. App. 2012).

The court’s decision in Herssein is significant because it gave some legal definition to what constitutes a Facebook “friend.” For lawyers and judges, this case bears particular significance. In this regard, the mere connection between an attorney, party, or witness and a presiding judge does not alone warrant recusal, but it does potentially open a line of inquiry into the nature of the relationship. On a broader scale, it is unclear whether the definitions and conclusions from this case will influence the evolving area of law concerning social media’s effects on the legal protections afforded to customer lists as trade secrets, which is discussed in this article – published and posted last year.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

DISCLAIMER: This Blog/Website is for educational purposes and to provide readers with general information about developments in the law. This Blog/Website is not intended and should not be relied on for legal advice. This Blog/Website does not constitute an advertisement for legal services and it does not endorse, promote, or recommend the products, services, or websites of any third party. Reading, reviewing, or any other use of this Blog/Website does not create an attorney-client relationship between the reader and the firm or any attorney at the firm.