16th Annual Porzio Employment Law Forum Slide Deck

October 1, 2024

pbnlaw.com

16th Annual

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October 1, 2024 David L. Disler & Rahool Patel

pbnlaw.com

16th Annual

Game of Codes The Battle Over Artificial Intelligence

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Are You Already Using AI? 1.

Google Maps/Waze to suggest a destination route

2.

Use Facial recognition to unlock your phone or online account

3.

Watch a video, listen to music, or streaming recommendation on Spotify/YouTube/Disney+/Netflix

4.

Submit a Google search suggestion

5.

Use Grammarly to suggest writing corrections

6.

Ask Alexa or Siri to tell you the weather or answer a question

7.

Use Siri, Gmail, or Outlook to predict the next word you’re writing

8.

Scroll upon Instagram/Snap/Facebook/LinkedIn recommended links

9.

Use Google or Apple photos for recognition, or touch-up editing

10.

Any translation apps or resources

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What is Generative AI?

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Countless Possibilities: Use Cases Content Creation Generate personalized marketing content, including product descriptions, social media posts, and email campaigns tailored to specific customer segments.

Design and Creativity, Brainstorming Generally

Language Translation and Summarization

Use AI to create designs, logos, and artwork for branding or product development, assisting graphic designers in generating new ideas or iterations.

Language Translation and Automatically translate and summarize documents, emails, or web content into different languages, facilitating global communication and understanding.

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Countless Possibilities: Use Cases Financial and Consumer Forecasting

Personalized Product Design

Chatbots and Customer Service

Use productive analytics to analyze financial data and generate forecasts for better investment decisions or risk management.

Assist in designing customizable products by generating multiple iterations based on user preferences and requirements.

Develop AI-powered chatbots capable of engaging with customers, answering queries, and providing support 24/7, improving customer service experiences.

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Countless Possibilities: Use Cases Search Engine Optimization

Back Office Automation

Video and Image Generation

Recommendation Systems

Enhances aspects such as content optimization, keyword research, and improve user experience. Machine learning algorithms can analyze vast amounts of data to identify patters and trends helping marketers to refine strategies. AI-driven tools can even provide personalized content recommendations.

Automation of routine processes, such as email campaigns, social media scheduling, and performance tracking.

This empowers marketers to focus on strategy and creativity while AI handles repetitive operational tasks.

Create synthetic images or videos for advertising, virtual try-ons for fashion, or editing and enhancing visual content.

Utilize generative AI to build recommendation engines for personalized product recommendations or content suggestions based on user behavior and preferences.

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Prompt Engineering

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Concerns

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Concerns

Accuracy •

Information provided by generative AI may not be accurate.

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Be aware of hallucinations.

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Always verify and check information prior to finalizing.

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Concerns

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Concerns

Data Privacy and Security Generative AI may collect or retain data •

This includes during conversations and information in the prompts

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Using sensitive data for AI training could lead to data breaches or privacy violations

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Concerns Data Privacy and Security •

May use Generative AI to create templates or initial drafts without identifiable information.

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Personally Identifiable Information should be included manually after template generated.

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Concerns Bias •

Learn from human-generated datasets.

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Absorb the biases present in the text, perpetuating stereotypes and discriminations.

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Concerns Bias •

In 2014, Amazon attempted to automate its hiring process by building algorithm to identify top talent.

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Similar to how it rates products, Amazon’s hiring tool used artificial intelligence to give job candidates scores ranging from one to five stars.

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Concerns Bias •

Part of the algorithm used resumes submitted to the company over a 10-year period.

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Since most came from men, the algorithm began to favor men.

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For example, it penalized resumes that included the word “women’s,” as in “women’s chess club captain.”

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Concerns

Unforeseen Consequences •

Potential unforeseen outcomes or unintended consequences arising from the use of generative AI, impacting business operations or reputation.

•

Failing to adhere to regulations and standards, especially in highly regulated industries such as healthcare or finance.

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Concerns Unforeseen Consequences •

Overreliance on AI systems may lead to decreased human involvement, impacting skill development and human judgment.

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Difficulty in understanding or explaining how AIgenerated outputs are created, leading to challenges in accountability and transparency.

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Policy Considerations

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Policy Considerations

• Prepare a workplace policy governing the use of Generative AI for employees.

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Steps to Create a Generative AI Policy

• Establish a team of relevant personnel.

• The team should include collaboration from legal, IT, and business teams.

• Team must align business objectives, while addressing ethical, legal, and operational considerations.

• Take Inventory of Use Cases: Aggregate and assess what’s working, what’s not.

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Steps to Create a Generative AI Policy

Set Clear Objectives • Define the goals and objectives for using generative AI within the business, outlining what the AI should achieve and how it aligns with broader business strategies.

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Steps to Create a Generative AI Policy

Set Clear Objectives Include a clear list of authorized and intended uses.

• Examples: •

Draft emails, letters, memorandums or presentations

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Conducting research

•

Creating marketing materials

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Steps to Create a Generative AI Policy

Risk Management •

Implement risk management protocols to mitigate potential risks associated with AI, including bias detection and mitigation strategies.

•

Vet any proposed AI, test for performance in a real-world context. Think “mock trial” and pilot programs.

•

Assess your organization’s risk comfort level. None of this is without risk.

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Steps to Create a Generative AI Policy

Risk Management • Company should retain right to monitor employee’s use of AI

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Steps to Create a Generative AI Policy

Risk Management • Require employees review all AI inputs and outputs before use. This should include: •

Ensuring they don’t contain offensive or discriminatory material

•

Do not contain personal or confidential information

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Information is accurate

•

A general understanding of the provided information’s provenance, quality, appropriateness, and relevancy.

Using a representative data set?

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Steps to Create a Generative AI Policy

Monitoring and Evaluation • Establish mechanisms for continuous monitoring, evaluation, and auditing of AI systems to ensure they operate as intended and adhere to established policies.

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Steps to Create a Generative AI Policy

Accountability and Responsibility • Define roles and responsibilities for individuals involved in implementing and overseeing AI systems, ensuring clear accountability.

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Steps to Create a Generative AI Policy

Adaptability and Updates • Recognize the evolving nature of AI technologies and the need to update policies regularly to address new challenges and opportunities.

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Steps to Create a Generative AI Policy

Training and Awareness • Provide training and awareness programs to employees, ensuring they understand AI's capabilities, limitations, and ethical considerations.

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Steps to Create a Generative AI Policy

Training and Awareness Training should include: 1.

Explanation of the policy

2.

How to use generative AI

3.

Appropriate uses under the policy

4.

Explanation of policy violations and consequences

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Powerful Tool

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Powerful Tool

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Generative AI was used to create this presentation.

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All material was reviewed, and corrections were made where appropriate.

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Questions?

Rahool Patel

pbnlaw.com

David L. Disler

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October 1, 2024 Alfred R. Brunetti & Brian Giardina

pbnlaw.com

16th Annual

Whose Data Is It Anyway?

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What is Data?  Facts  Numbers  Dates/Times  “Personal Data” is any information linked or linkable to an identifiable person 41

What is Data Privacy?  The use and governance of Personal Data Concept based upon autonomy and having control over your personal information; how it is collected and how it is used or disseminated Rights given to Data Subjects Obligations placed upon Businesses Attendant Risk Management 42

Where a Personal Data Can Come From 1. Applicants and New Hires – submitting data

2.Existing Employee – updating data

3. HR Departments – managing data

4. Payroll Systems – accessing data systems

Employee personal data

Now What?

5. Benefits Systems – evaluating data 43

Data Privacy Laws: Expanding Coverage ≈ 45% of the U.S. Population ≈ 70% of World Population

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California Consumer Privacy Act (CCPA)  Applies to Employment and B2B contexts

 CCPA regulations in effect; updated final regulations in progress

 Effective January 1, 2020, expanded & amended 20+ times

 California Privacy Protection Agency (CPPA)

 Applies to for-profit businesses that do business in CA and collect and control CA residents’ Personal Information, with certain triggers

 Civil penalties up to $2,500 for each violation or $7,500 for each intentional & other types of violations  Limited private right of action when consumers’ unencrypted and nonredacted personal information is exposed after a data breach

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NJDPA: Scope  Controllers that conduct business in NJ or produce products or service targeted to NJ residents  For profit and non-profit entities alike  100,000 consumers or 25,000 consumer (if revenue or discount from sale of personal data)  NJDPA does not include any form of revenue threshold for applicability so even businesses with relatively low revenues may be in scope

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NJDPA: Exemptions  NJ government entities (or of any political subdivision of New Jersey)  Financial institutions and affiliates or data subject to the GrammLeach-Bliley Act (GLBA) [entity level & subject level exemption]  Protected health information (PHI) collected by a HIPAA covered entity [subject level exemption]  Insurance institutions [entity level]  Data subject to the Fair Credit Reporting Act (FCRA) [subject level exemption]  BUT, does not include a common exemption for educational data or data processed by non-profits or higher education institutions 47

NJDPA: Consumer Rights 

The NJDPA gives consumers the following rights :     

The right to confirm whether a controller is processing personal data and to access that data; The right to correct inaccuracies in the personal data; The right to delete personal data; The right to obtain a portable copy of personal data; and The right to opt out of the processing of data for purposes of targeted advertising, the sale of personal data, or, in certain circumstances, profiling 48

NJDPA: Organization Obligations        

Transparency / Purpose Limitation Specify purpose of processing (e.g. Privacy Notice requirement) Minimization (adequate, relevant, reasonably necessary) Administrative + Technical + Physical data security practices Need consumer Consent to process Sensitive Data Cannot process personal data of a known child (u13) unless COPPA Cannot discriminate (for exercising rights or for effect) Respond to a verified Data Subject Requests within 45 days

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Targeted Advertising  Targeted Advertising = displaying advertisements where the advertisement is selected based on personal data obtained or inferred from that consumer’s activities over time and across nonaffiliated Internet web sites or online applications to predict such consumer’s preferences or interests  Enforcement Example (from California): Sephora  Alleged to violate the CCPA by:  deceptively allowing third parties to track consumer information online in exchange for targeted advertisements  Failing to process visitor request to opt-out of sale via a Global Privacy Control setting  Failed to cure after notice 50

Spectrum of Sensitive Data Categories Sensitive Data in the NJDPA: Personal data revealing…    

     

Racial or ethnic origin Religious beliefs Mental or physical health condition, treatment or diagnosis Financial information (account no., account log-in, financial account or credit or debit card number + access info to permit access) Sex life or orientation Citizenship or immigration status Transgender / non-binary status Genetic or biometric data that may be processed for the purpose of uniquely identifying an individual; Personal data from a known child Precise geolocation

YELLOW = makes NJDPA special

Financial

Religion

Health

Geolocation Sexuality Child

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Issues to Consider When Thinking Global: The Growing Network of International Privacy Laws

WHERE ARE OUR DATA SUBJECTS LOCATED?

WHERE DO WE OPERATE?

WHERE ARE OUR EMPLOYEES AND CONTRACTORS LOCATED?

WHAT’S THE TERRITORIAL REACH OF FOREIGN PRIVACY AND DATA SECURITY LAWS? 52

Federal Trade Commission (FTC) FTC protects consumers from unfair or deceptive trade practices FTC promulgates regulations, enforces privacy laws, and takes action against companies to protect consumers when such companies:  Fail to implement and maintain reasonable data security measures  Fail to comply with industry standards  Do not comply with a privacy policy/statement/notice  Use personal information in a manner not disclosed in a privacy statement  Fail to properly secure personal data  Collect, use/process, share, or sell personal data in violation of data privacy rights 53

FTC and HHS/OCR recent statements on privacy and data governance…

“Companies have a responsibility to secure data they maintain and to delete data they no longer need.” – February 2024, Blackbaud settlement “Protecting consumers’ sensitive health data is a high priority for the FTC.” – April 2024, HBNR changes announced “You should fully understand where all electronic protected health information exists across your organization - from software, to connected devices, legacy systems, and elsewhere across your network.” – February 2022, OCR Director Lisa Pinto 54

Protecting Your Business: Know Your Data  Data Mapping and Inventorying 

Undertake a data mapping exercise to understand the types of data the organization processes and maintains, the purposes for which the data is used, and whether all data is needed

 Data is likely being collected on your Website 



Does your organization utilize cookies or other trackers on its website(s)?

Does your business allow others to place cookies or other trackers there?

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Protecting Your Business: Know Your Processes  Do you know what Personal Data you have?  Do you know how Personal Data is being used or shared?  What are your Service Providers / Vendors / Affiliates doing with Personal Data?  If your organization sells personal data to third parties or processes personal data for targeted advertising or profiling purposes, such activities must be disclosed in the privacy notice and consumers must be afforded opportunity to opt-out  Review business relationships with third-party data processors to understand the role of each party and potential requirements

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Considerations for Business  Proactive Prevention versus Reactive Remediation  Leverage existing compliance infrastructure to adopt a proactive approach to data governance  Is Personal Data being processed for legitimate and lawful business purposes in accordance with policies, SOPs and applicable law?

 Consider what tools are already in place  Policies related to how data is collected, used, and handled?  Is the company already acting transparently?  Notices and consents collected and maintained (consent management platforms)  Vendor Contract and Practices Management 57

Integrating Privacy into (or creating) a Compliance Framework

Policies/Procedures

• • • •

External-Facing Privacy Policy Internal Data Privacy Compliance Policy Data Breach Response Policy/SOP IT Security Policy

Trainings

• •

General Privacy Trainings for all Personnel Targeted Trainings for Select Groups/Personnel

Contracts/Notices/Consents/ Authorizations

• • • •

Data Processing Agreements/Addenda Contract Language Opt-In/Opt-Out Language Notices, Authorizations, and Consents

Monitoring and Auditing

•

Develop regular cadence of oversight into processes and compliance efforts

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Website Evidence Collection Report

Questions?

Brian Giardina

pbnlaw.com

Alfred R. Brunetti

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October 1, 2024 Daniel S. Makoski & Deirdre R. Wheatley-Liss

pbnlaw.com

16th Annual

Orange is the New Tax Navigating State Taxation, Health Savings Accounts, Business Succession Planning, and the Corporate Transparency Act

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Agenda

 Overview of State Taxation of Remote Workers  Triple Tax Benefit of Health Savings Accounts (HSAs)  Essentials of Business Succession Planning  Implications of the Corporate Transparency Act

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State Taxation of Remote Workers

 Impact of Remote Work on State Taxation o Increased remote work post-pandemic: Complex state tax implications. o Residency and Tax Obligations 

NJ residents taxed on worldwide income (N.J.S.A. 54A:2-1).



Remote workers’ income from other states: Potential double taxation.

o Nexus Considerations 

NJ's economic nexus: Tax authority without physical presence (N.J.S.A. 54:10A-2).

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Multi-State Compliance Strategies  Navigating Multi-State Tax Obligations o Consistent Policies for Remote Workers  

Clear guidelines on work locations to manage tax liabilities.

Tracking where employees work.

o Payroll and Withholding Tax Considerations  

NJ rules on withholding: Employers must withhold NJ income tax for NJ residents (N.J.A.C. 18:35-7.3).

Reciprocal agreements with PA: Residents pay income tax only in their state of residence (N.J.S.A. 54A:917).

o Managing Audits and State Tax Disputes   

Prepare for audits with thorough records.

Consider voluntary disclosure agreements (VDAs) for past liabilities.

Some states will report their audit findings to other states.

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Chart 1: Tax Implications for Remote Workers Residing and Working in PA, NY, CA, and FL for a New Jersey Company State

PA

NY

CA

FL

State Income Tax Rate

3.07%

4.5% - 8.82% (progressive)

1% - 13.3% (progressive)

0%

Credit for Taxes Paid Potential Double Taxation by NJ to NJ Taxation

No

No

No

No

Not applicable

Not applicable

Not applicable

Not applicable

Additional Considerations

None

- PA residents working fully remotely in PA are only subject to PA income tax.

- Reciprocal agreement simplifies filing, but NJ doesn’t tax PA remote work.

None

- NY residents working fully remotely in NY are taxed only by NY. - No NJ tax liability unless work is physically performed in NJ.

None

- CA residents are subject to CA income tax only.

- High CA tax rates apply to all income earned while residing in CA.

None

- FL residents have no state income tax liability.

- NJ does not tax income unless work is physically performed in NJ.

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Chart 2: Tax Implications for Workers Residing in PA or NY and Working in a NJ Office 2x a Week

State

State Income Tax Taxation by NJ Rate

PA

3.07%

NY

4.5% - 8.82% (progressive)

Yes

Yes

Credit for Taxes Paid to NJ

Yes

Yes

Potential Double Taxation

Low

Medium

Additional Considerations

- PA residents owe tax on NJ-sourced income.

- PA provides credit for NJ taxes, typically avoiding double taxation.

- NY residents owe tax on NJ-sourced income.

- NY provides credit, but differences in tax rates may lead to partial double taxation.

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Chart 3: Tax Implications for Residents of CA or FL Working in NJ 1 Week a Month for 10 Months of the Year State State Income Tax Rate Taxation by NJ

CA

FL

1% - 13.3% (progressive)

0%

Yes

Yes

Credit for Taxes Paid to NJ

Yes

Not applicable (no state tax in FL)

Potential Double Taxation

Additional Considerations

High

- CA residents owe CA tax on worldwide income, including NJ-sourced income.

- CA provides a credit for NJ taxes, but higher CA rates may result in additional taxes owed to CA.

None

- FL residents owe no state tax, but NJ taxes the income earned while working in NJ. - No double taxation since FL has no state income tax.

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Understanding Health Savings Accounts (HSAs)  What Are Health Savings Accounts? o Eligibility Criteria 

Must be enrolled in HDHP, not in Medicare, and not a dependent.

o Contribution Limits 

2024: $3,650 for individuals; $7,300 for families (IRC §223).

o Investment Options 

Funds can be invested and grow tax-free.

o Tax Treatment 

Contributions tax-deductible, earnings tax-free, withdrawals for medical expenses tax-free.

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The Triple Tax Benefit of HSAs Triple Tax Benefits of Health Savings Accounts (HSAs) for NJ Employees Tax Benefit

Explanation

Details

Contributions deductible from federal gross income (IRC §223(b)(7)).

- Contributions to an HSA are made with pre-tax dollars, reducing your taxable income on the federal level.

- For 2024, the contribution limit is $4,150 for individuals and $8,300 for families.

- Note: NJ does not follow federal rules for HSA tax benefits, so contributions are not deductible for NJ state income tax purposes.

Tax-Free Growth

Investment earnings accumulate tax-free (IRC §223(f)).

- The funds in an HSA can be invested in a variety of options (e.g., mutual funds, stocks, bonds), and the earnings grow tax-free.

- Unlike traditional investment accounts, there’s no tax on dividends, interest, or capital gains within the HSA account.

Tax-Free Withdrawals

Withdrawals for qualified medical expenses are tax-free (IRC §223(f)(1)).

- Funds withdrawn for qualified medical expenses are completely tax-free, including both the contributions and any investment earnings.

- Qualified expenses include medical, dental, vision, and prescription costs.

Retirement Planning

HSAs as an additional retirement account; unused funds roll over annually.

- HSAs are a powerful retirement planning tool because funds never expire; they roll over year after year.

- After age 65, HSA funds can be withdrawn for non-medical expenses without penalty, though regular income tax applies to those withdrawals.

Tax-Free Contributions

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The Importance of Business Succession Planning

 Ensuring Business Continuity and Legacy o Identifying Potential Successors 

Evaluate readiness and capability of successors.

o Structuring Buy-Sell Agreements 

Legal agreements on how a partner’s share may be reassigned.



Funding via life insurance for liquidity.

o Valuation of Business Interests 

Accurate valuation is critical for tax obligations (IRC §2031).

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Third Party Succession Planning Type

Owner Dies Without a Plan

Description Business ownership and control pass according to state laws or will, often leading to liquidation or sale.

Pros

Cons

Tax Considerations

- Simplifies decision-making for heirs.

- Uncertain outcomes.

- May result in higher estate taxes.

- Avoids upfront planning costs.

- Potential forced liquidation.

- Business may be subject to probate, delaying distribution.

- Provides clear exit strategy.

Buy-Sell Agreements

Legal agreement between owners that outlines the terms for a buyout if an owner leaves or dies.

- Missed tax planning opportunities.

- Requires ongoing funding (e.g., - Funded by life insurance, which is insurance). generally tax-free.

- Possible family disputes.

- Establishes business continuity.

- Can be complex to negotiate and maintain.

- May have capital gains implications.

- Can set a fair market value.

Employee Equity Grants

Employees receive ownership stakes, usually through stock options or profit-sharing plans.

- Can lock in valuation for estate tax purposes.

- Aligns employee and business interests.

- Dilutes existing ownership.

- May trigger immediate tax liabilities for employees.

- Can incentivize long-term commitment.

- Requires careful planning to avoid tax complications for employees.

- Capital gains treatment if stock is held long-term.

- Can reduce overall estate value if used in succession planning.

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Family Succession Planning Type

Owner Dies Without a Plan

Description

Pros

Cons

- Simplifies decision-making for - Uncertain outcomes. heirs.

Business ownership and control pass according to state laws or - Avoids upfront planning costs.

- Potential forced liquidation. will, often leading to disputes or liquidation.

- Possible family disputes.

Tax Considerations - May result in higher estate taxes.

- Business may be subject to probate, delaying distribution.

- Missed tax planning opportunities.

- Complex and expensive to set up - Transfers can utilize lifetime gift - Protects assets from creditors. and maintain. tax exemptions.

Trusts

Business assets are transferred into a trust, managed by trustees for the benefit of heirs.

- Provides for structured, longterm control.

- Requires careful selection of trustees.

- Generation-skipping transfer tax (GSTT) may apply if grandchildren are beneficiaries.

- Can reduce estate taxes.

Family Buy-Sell Agreements

Agreement among family members on the terms and conditions for buying out an owner’s interest.

- Trusts can help reduce estate tax liability.

- Preserves family control.

- Requires agreement among all family members.

- Can set a clear valuation for estate tax purposes.

- Establishes clear terms for succession.

- May create tension if terms are perceived as unfair.

- Life insurance funding is generally tax-free.

- Can be funded with insurance.

- Potential capital gains tax on sale of shares.

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Overview of the Corporate Transparency Act

 Enhancing Corporate Transparency o Beneficial Ownership Reporting 

Mandatory reporting to FinCEN for certain entities (31 U.S.C. §5336).



Beneficial owner: 25% ownership or substantial control.

o Implications for Private Businesses 

Reporting applies to corporations, LLCs, and similar entities; certain exemptions.

o Compliance Deadlines 

Existing entities: Report by Jan 1, 2025; new entities: Within 30 days of formation.

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Practical Steps for Compliance

 Compliance with the Corporate Transparency Act o Identifying Beneficial Owners 

Processes for gathering and verifying ownership information.



Ongoing monitoring and updates to records.

o Updating Corporate Records 

Integrate compliance into corporate governance.



Regular updates to reflect ownership/control changes.

o Legal and Operational Challenges 

Challenges in identifying and reporting beneficial owners for complex structures.



Seek legal counsel to mitigate non-compliance risks.

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Questions?

Deirdre R. Wheatley-Liss

pbnlaw.com

Daniel S. Makoski

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October 1, 2024

pbnlaw.com

16th Annual

Lisa N. Brown & Janelle Edwards-Stewart 77

Janelle Edwards-Stewart, Esq.

Lisa N. Brown, Esq.

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The Headlines

Zoom Cuts DEI Team as Companies Retreat on Diversity Initiatives DEI backlash: Stay up-to-date on the latest legal and corporate challenges

Lowe’s ends some DEI policies, adding to trend Utah lawmaker blames 'diversity' for Baltimore bridge collapse Ford becomes the latest company to scale back its diversity and inclusion policies

As diversity, equity and inclusion comes under legal attack, companies quietly alter their programs 81

The Real Story

DEI efforts “advance our business objectives . . .”

David Cordani, CEO Cigna Group

DEI is “aligned with shareholder value and improved financial performance.”

Ryan Lance, Chairman ConocoPhillips

Remains “committed to creating a global corporate environment where all people . . . have equal access to opportunities and advancement.”

“It is good for business;

it’s morally right; we’re quite good at it; we’re successful.”

Jamie Dimon, Chairman and CEO JPMorgan Chase

Tim Murphy, CAO Mastercard

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De Piero v. Pennsylvania State University (2024)

 Forced to adopt race-based grading system  Forced to attend anti-racism workshops  Forced to endure pervasive negative racial rhetoric 83

General Program Guidance Do’s  Ensure that diversity initiatives include nonracial points of diversity e.g., gender, disability, veteran status, and other lifeexperiences  Shift language to embrace “all-inclusive multiculturalism” and use inclusive language that highlights the benefits of DEI for all groups  Diversify decision-making groups and ensure equitable processes across all stages of employment  Implement privacy measures in feedback collection to ensure honest responses, without fear of identification

Don’ts  Use race-based offerings or exclusions  Use rhetoric that may alienate certain groups  Enforce strict numerical criteria tied to protected group membership  Neglect to assess programs for unintended disparate impact(s)

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Success

Dima Ghawi Finance Executive Merryll Lynch

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Questions?

Lisa N. Brown

pbnlaw.com

Janelle Edwards-Stewart

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October 1, 2024 Richard H. Bauch / Beau W. Huch / Patricia C. Morgan / Thomas J. Reilly / Kerri A. Wright

pbnlaw.com

16th Annual

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Starring

Richard H. Bauch Beau W. Huch Patricia C. Morgan

Thomas J. Reilly

Kerri A. Wright

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US Supreme Court declares lateral transfers that cause “some harm” to be unlawful under federal law

US Supreme Court declares lateral transfers that cause “some harm” to be unlawful under federal law

Muldrow v. City of St. Louis  Plain clothes police officer was transferred to a ‘less prestigious’ position  Lateral position  Same rank and same pay / different duties and different hours  ‘Some harm’ is enough to trigger liability  Raises many questions 91

Texas District Court Halts FTC Ban on Non-Compete Agreements

Texas District Court Halts FTC Ban on Non-Compete Agreements What Happened?  Federal Trade Commission ban on non-competes was set to begin on September 4, 2024  Texas District Court issues injunction with nationwide effect  Appeal to the 5th Circuit likely What now?  Cautiously continue lawful practices with respect to non-compete agreements, subject to state restrictions Questions?  Contact your attorney 93

You Don’t Discriminate. But Does Your A.I.?

Mobley v. Workday, Inc. (N.D. Cal. 2024)  Can A.I. job screening tools unwittingly discriminate against certain job applicants?  What are the employer’s responsibilities to protect against this potential discrimination?  Intentional vs. disparate impact discrimination.

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In Studio with Beau W. Huch

New Jersey’s Budding Industry

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Home Depot v. NLRB NLRB precludes employer from enforcing dress code for customer-facing employee who wrote “Black Lives Matter” initials on company-supplied apron*  Can employers always enforce employee dress code policies?  Doesn’t protected concerted activity require that at least two employees act in concert?  How can employers increase their chances of enforcing their dress code policies?  Should we expect further incursion of political and social justice issues into the workplace? *Home Depot, USA, 373 NLRB No. 25 (February 21, 2024) 99

Have You Received an Accommodation Request Without Realizing it?

Yannick v. Kroger Co. of Mich. (6th Cir. 2024)  No “magic words” necessary for accommodation request under the ADA.  Context is critical.  Training managers to spot requests will be key.  Reach out to counsel when there are close calls.

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Jones v. Georgia Ports Authority

Jones v. Georgia Ports Authority

 Written policy regarding return to work  Strict adherence to policy

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Questions?

Richard H. Bauch

Beau W. Huch

Patricia C. Morgan

Thomas J. Reilly

Kerri A. Wright

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October 1, 2024 Weston J. Kulick & David M. Schloss

pbnlaw.com

16th Annual

(Not) The OfficeEmployer Considerations for Workplace Outings Weston J. Kulick David M. Schloss 106

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Opportunities and Risks Opportunities

Risks

 Boosts Employee Morale & Engagement

 Requires Investment of Time and Money

 Enhanced Teamwork, Camaraderie & Communications

 Possibility of Alienation or Unease among Certain Employees

 Stronger Bonds

 May Heighten Tension within the Team

 Encourage Creativity  Employee’s Exhibit Bad Behavior  Increased Productivity  Builds Trust  Helps Create a Positive Workplace Culture

 Accidents, Injuries, or Property Damage  Alcohol, Alcohol, Alcohol 108

Legal Considerations Liability for Accidents and Injuries

Mandatory Attendance

Compensation for Hourly Staff

Alcohol

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Mandatory Attendance • Can you require it?

• Should you require it?

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Compensation for Hourly Employees

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Liability for Accidents and Injuries

“Our company made the ‘Company BBQ’ mandatory, and they held it at a park, we had one guy tear his ACL while playing flag football and another got bit by a stray dog . . . both claimed workers' comp”

YouTube Comment

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Dealing with Inappropriate Behavior  Discrimination

 Harassment

 Company Policy 113

 Dazzling the Boss to Curry Favor and Promotion  Making a Dangerous Activity Seem Obligatory  ‘Mandatory’ Fun

Where Did It All Go Wrong?

 Discrimination by Gender Assumptions  Creating Tension and Hostility between Team Members  Risks to the Health & Safety of Employees  Leaders not Participating in Team Activities

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How Would You Handle?

Mandatory Fun

Too Much to Drink

Sexual Harassment

The boss schedules a workplace outing full of fun teambuilding activities such as paintball, escape rooms, or scavenger hunts and does so on a Saturday afternoon in the fall. Of course, the outing is optional, and virtually all employees attended.

The boss schedules a team bowling tournament at a local venue and offers an open bar to all those who join in the fun. One employee has a bit too much fun and face plants on lane 7.

The Regional VP of sales arranges a pool party for all his sales reps and district managers. The alcohol flows and one district manager is seen hitting on a female sales rep and another must be carried back to his hotel room at the end of the evening.

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Questions?

David M. Schloss

pbnlaw.com

Weston J. Kulick

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October 1, 2024 Sal M. Anderton & Melanie D. Lipomanis

pbnlaw.com

16th Annual

A DAY IN THE LIFE: Starring

Workplace Injuries and

Workers’ Compensation Claims Rated R - Required watching for workers’ comp. compliance

Directed by Sal Anderton Produced by Melanie Lipomanis 118

What is Worker’s Compensation?

The Worker’s Compensation program was created as a social safety net through legislation to provide medical treatment, wage replacement, and permanent disability compensation to employees who suffer jobrelated injuries or illnesses, as well as death benefits to dependents of workers who have died as a result of their employment.

Employers are required by law to carry worker’s compensation insurance for employees.

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What is Covered?  Any work-related injury or illness that occurred in the course of the employee performing his/her duties or while on the employer’s premises for the benefit of the employer.  Any injury or illness caused by the negligence of the employer or a coworker (see exceptions to the exclusive remedy)

 Non-work related medical conditions or diseases that are not caused by nor exacerbated from working conditions.

Examples:  Kidney failure  Heart disease /attack (sometimes)  Diabetes  Appendicitis  Cancer (sometimes)  Mental Illness (sometimes)

 Occupational Illness  Death

 Special note for law enforcement, public safety, and medical emergency workers

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What WC Benefits are Available?  Medical All necessary and reasonable medical treatment, prescriptions, and hospitalization services related to the work injury  Temporary Total Disability Injured workers disabled for seven or more days, may be eligible to receive benefits at a rate of 70% of their average weekly wage.  Lump Sum Compensation  Permanent Partial Disability  Permanent Total Disability  Death Benefits

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Who Does WC Cover?

The injured Detective?

The Injured Prosecutor?

The Judge?

The Witness?

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Exclusive Remedy Provision  Workers’ compensation is a no-fault benefit ‘without regard to the negligence of the employer,’ and generally bars an employee from seeking damages for pain and suffering in court.  The only exception to the exclusive remedy is where the employee can prove (1) an employer’s act or omission was an intentional wrong, and (2) the wrongful behavior caused the employee’s work-related injury or illness.

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Special Episodes in Workers’ Comp. Cases Whether workers’ compensation is applicable to an employee’s injury often depends on special attending factors of • Where …

• When …

• How … and • Why … the injury occurred 124

Commuting and Traveling

However, if the job duties require the employee to travel, any injury that occurs while traveling in the course of employment is workrelated and subject to workers’ compensation laws.

Employees are only covered while they are performing duties for the employer.

Therefore, workers who are injured during their commute to or from work and home are usually ineligible.

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Employer Premises Rule

An employee's employment begins when they arrive at the employer's place of work to begin scheduled work and ends when they leave the employer's premises.

The employer's premises includes any property that the employer owns or controls.

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Mental and Psychological Conditions New Jersey's workers' compensation law covers mental and psychological conditions that arise from work-related events, including depression, anxiety, and post-traumatic stress disorder (PTSD). To qualify for benefits, the condition must be severe enough to interfere with the employee's ability to perform their job.

There must be sufficient medical evidence that the condition was objectively work-related to be eligible for coverage.

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Horseplay and Skylarking A certain amount of horseplay is to be expected in any workplace and is generally always covered by WC

Unless the employer can show that the horseplay constituted a major deviation from the employee’s work duties 128

Workplace Fighting / Assaults Workplace injuries caused by physical violence are covered under Workers’ compensation laws if the dispute giving rise to the physical altercation is work related.

Altercations arising from purely personal disputes are not covered.

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Employer-Sponsored Events

If an employer requires employees to attend an event and an injury occurs, the injury is compensable.

However, there is a gray area where attendance to the event is not mandatory.

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Off-Duty Employees on Employer Premises Exception to the Employer Premises Rule An employee who is on the premises, not for the benefit of the employer but for their own benefit, and is free of all duties, is not covered by WC for any injury they suffer.

Again, the employer's premises includes any property that the employer owns or controls.

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Moonlighting Employees Generally, workers’ compensation benefits are tied to the job the employee was working when he or she was injured.

This is true even if the injuries prevent the employee from working both jobs.

No Double Feature Roles 132

Employees Under the Influence

Employers can challenge eligibility for worker’s compensation benefits if they can show 2 things:

The injured employee was intoxicated at the time of the injury (with blood or urine analysis)

And the intoxication was the sole cause of the injury 133

Pre-existing Conditions The Second Injury Fund makes benefit payments to injured workers who are totally and permanently disabled as a result of work-related injuries combined with pre-existing disabilities.

The Fund was established to encourage employers to hire disabled workers. The employer only pays for the work-related aspect of the total disability award.

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Workers from a Temp Agency The remedy for a temporary worker assigned through an agency is usually covered by workers’ compensation with the placement agency.

The agency normally contracts with its client to cover workers’ compensation claims of the employees it places with the client.

Always Check your Temp Agency Contract 135

Medical Care – Who Chooses?

The employer and their insurer have the right to select the doctor(s) an employee will see after a workplace injury However, if the employee objects with the care given, they can obtain a second opinion and petition to change treatment plans and care providers 136

Getting Employees Back To Work Light Duty Employers may inquire with the treating physician if light duty is appropriate for transitioning the employee back to work early.

If the employee refuses light duty, they can lose their WC temporary disability benefits.

Fitness for Duty Certification All employers should require medical certification that the employee is medically fit to perform duties that the employer has identified in a written job description.

Second Opinions Employers may require a second medical opinion, with a provider of its choosing, if it questions the accuracy of a prior opinion regarding the employee’s condition.

Point of No Return Once a doctor has certified an employee has reached maximum medical improvement (MMI), if they still cannot perform the essential duties of job they may lawfully be discharged.

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It is unlawful for an employer to terminate or retaliate against an employee for making a workers’ compensation claim.

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Employer’s Best Practices Communicate with Broker Brokers can be an indispensable partner in helping to ensure full compliance and reduce WC costs through audits, assessments and return to work programs

Conduct Year-end Audits

Worksite Safety Assessment

Return to Work Programs

Ensure the employer is being assessed on accurate payroll records so it is not overpaying in mandated WC insurance premiums

These can be arranged through the Broker to address common workplace hazards and reduce WC claims

Programs designed to return employees to work as soon as possible in some capacity (light duty, reduced hours, etc.) have better outcomes overall

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pbnlaw.com

Questions?

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Questions?

Melanie D. Lipomanis

pbnlaw.com

Sal M. Anderton

141

October 1, 2024 Vito A. Gagliardi, Jr. & Rachel E. Fairley

pbnlaw.com

16th Annual

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Hostile Work Environment

1. Would not have occurred but for the employee’s protected characteristic (i.e., sex, sexual orientation, gender, race);

3. A reasonable person in the same protected category would believe the conduct changed the conditions of employment; and

2. The harassment was severe or pervasive;

4. The conduct has changed the “conditions of employment” and rendered the “working environment hostile or abusive” 144

I’m Not Listening!

Formal Policy Only employers who promulgate and support an active anti-harassment policy are entitled to protection under the law Formal Notice Informal notice of a complaint is sufficient for notice

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It Only Takes One Time • A single derogatory comment directed against a subordinate employee by a supervisor can create a hostile work environment • Racial epithets are particularly egregious • Who makes the comment matters; the higher up, the more pervasive

Is Pervasive Persuasive?

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Discriminatory Comments

Are You Even Offended?

Inappropriate comments based on a protected classes can be the basis for a Hostile Work Environment claim, even if the comment is not made to, or in front of, a person in that protected class

Workplace Civility Not intended to mean or suggest a “civility code” in the workplace “where only language fit for polite society will be tolerated”

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Questions?

Rachel E. Fairley

pbnlaw.com

Vito A. Gagliardi Jr.

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Scan the QR code to access the Employment Law Forum 2024 event page to complete the evaluation form and view the slide deck, upcoming events, and additional resources!

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October 1, 2024

pbnlaw.com

16th Annual

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