With each new year, many employers resolve to review their employee handbooks. For 2014, employers should add paid time off policies to their lists of handbook policies in need of review – particularly in light of a recent decision by the Louisiana First Circuit Court of Appeal, Davis v. St. Francisville Country Manor, L.L.C., —So.3d—, 2013 WL 5872030 (La. App. 1 Cir. 11/1/13).

In Davis, a former employee sued her former employer seeking compensation for her unused “paid days off.” The employer claimed it did not need to compensate her for the paid days off because it was a “mere gratuity” and not “vacation.” The court considered whether the former employee’s accumulated paid days off constituted earned, payable “wages” within the meaning of the Louisiana Wage Payment Act, or whether the paid days off were in the nature of a “mere gratuity.” The Louisiana Wage Payment Act, La. R.S. 23:631, et seq., requires the prompt payment of “the amount then due under the terms of employment” (earned “wages”) upon an employee’s discharge or resignation. Failure to pay “the amount then due under the terms of employment” within the statutory period can result in penalties and attorney’s fees being assessed against the employer. The statute also specifically addresses vacation pay and the requirement to timely pay a departing employee her accrued but unused vacation. Vacation pay is considered an amount due only if the employee is eligible and has not otherwise been compensated for that time.

The Davis court found the difference between paid vacation time and paid days off to be “a matter of semantics” and ruled in the employee’s favor. Employers should review their existing paid time off policies and understand their obligations under the Louisiana Wage Payment Act in light of this ruling.

It took one of the newly-minted judges on the Eastern District bench to finally adopt a working definition for the types of “perils of the sea” that Jones Act seaman are exposed to when analyzing the second prong of the Chandris, Inc. v. Latsis, 515 U.S. 346 (1995) test. That test requires the plaintiff, claiming to be a Jones Act seaman, to “demonstrate a connection to a vessel in navigation (or to an identifiable group of such vessels) that is substantial in terms of both its duration and its nature.” Id. at 368. The two prongs of Chandris are: (1) the plaintiff must show that his duties contribute to the function of the vessel or the accomplishment of its mission, and (2) the plaintiff must demonstrate a connection to a vessel (or an identifiable group of vessels) in navigation.

In Duet v. Am. Comm’l Lines, LLC, No. 12-3025, 2013 WL 1682988 (E.D. La. April 17, 2013), Judge Jane Triche Milazzo, in denying remand, found that a plaintiff who was injured while working aboard the defendant’s vessel was not a Jones Act seaman. Duet, a mechanic, was assigned by his employer to work at a barge repair facility owned and operated by ACL Transportation Services, LLC. The facility consisted of “a number of barges tied together and moored to the riverbank in order to create a stationary work platform (the “floating dock”),” that extended 1-2 miles along the river. The barges serviced by the facility remain in the river but are moored to the floating dock. ACL also owns and operates several smaller push boats to help move the barges in and out of the facility, as well as shift the barges within the floating dock itself. Duet was not assigned to any specific vessel, but performed his mechanic duties on barges and push boats alike. He only boarded the push boats as necessary to complete his work on those boats or to be transported to the more remote locations within the facility that required his work. However, when necessary to reposition barges at the floating dock to facilitate repairs, he would occasionally work as a deckhand, and on two occasions had left the facility by boat to assist in sea trials and help save a sinking vessel. Duet was injured while working aboard one of the vessels and sued several defendants and his employer, alleging to be a Jones Act seaman.

Continue Reading Eastern District of Louisiana Adopts Definition for “Perils of the Sea” for Seaman Status Analysis

On December 9, 2013, the Occupational Safety and Health Administration (“OSHA”) requested comments concerning potential changes to its Process Safety Management (“PSM”) program that could have a significant impact on oil field operations. See 78 Fed. Reg. 73756 (Dec. 9, 2013). Among the many “modernizations” of the PSM standard, OSHA is seeking comment on the elimination of exemptions that directly affect oil field operations. Current exemptions of concern include:

  • atmospheric storage tanks;
  • oil-and-gas production facilities; and
  • oil-and-gas well drilling and servicing.

PSM applies to “a process which involves a Category 1 flammable gas (as defined in 1910.1200(c)) or a flammable liquid with a flashpoint below 100 °F (37.8 °C) on site in one location, in a quantity of 10,000 pounds (4535.9 kg).” 29 CFR 1910.119(a)(ii). The addition of atmospheric storage tanks is significant as a tank as small as 35 Barrels of crude oil will cause the “process” to exceed the 10,000 pound threshold. As a consequence, other process equipment that contains less than 10,000 pounds of flammable materials that is connected to the tank (via piping) may also become subject to PSM requirements.

Continue Reading OSHA Considers Expanded Oversight in the Oil Patch

Pursuant to 28 U.S.C. § 1333, federal courts have original subject matter jurisdiction over general maritime law claims. However, 28 U.S.C. § 1333(1), commonly known as the “savings to suitors clause,” preserves a plaintiff’s right to instead file a general maritime law action in state court. Until recently, a defendant sued in state court for a general maritime law claim could not remove the case to federal court unless an independent basis of subject matter jurisdiction existed (such as diversity). See Tennessee Gas Pipeline v. Houston Cas. Ins. Co., 87 F. 3d 150 (5th Cir. 1996). As explained below, several district courts have concluded that recent revisions to the removal statute, 28 U.S.C. § 1441, have changed this rule and now allow general maritime law claims to be removed to federal court without an independent basis of subject matter jurisdiction.

The basis for the U.S. Fifth Circuit’s prohibition against removal of a general maritime law claim unless an alternative basis of subject matter existed was the provision contained in the then-current version of 28 U.S.C. § 1441(b) which stated that “any civil action of which the district courts have original jurisdiction founded on a claim or right under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties.” The U.S. Fifth Circuit concluded that this portion of the then-current version of 28 U.S.C. § 1441(b) – combined with the U.S. Supreme Court’s holding in Romero v. International Terminal Operating Co., 358 U.S. 354 (1959), that general maritime law claims do not “arise under the Constitution, laws, or treaties of the United States” – precluded the removal of general maritime law claims unless an independent basis of subject matter jurisdiction existed.

Continue Reading Because of Revisions to 28 U.S.C. Section 1441, Several District Courts Have Concluded That General Maritime Law Claims Can Be Removed to Federal Court Without an Independent Basis of Subject Matter Jurisdiction

In its most recent decision regarding Longshore and Harbor Workers’ Compensation Act (LHWCA) coverage, namely New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs, 718 F.3d 384 (5th Cir. 2013) (en banc), the United States Fifth Circuit Court of Appeals defined “adjoining” as used in the LHWCA to mean “bordering on or contiguous with navigable waters.” In doing so, the Court expressly overruled its own precedent found in Texports Stevedore Co. v. Winchester, 632 F.2d 504 (5th Cir. 1980) (en banc), and the Court adopted the interpretation of the statutory language proffered by the Fourth Circuit Court of Appeals in Sidwell v. Express Container Services, Inc., 71 F.3d 1134 (4th Cir. 1995).

Continue Reading The Fifth Circuit’s Latest Longshore and Harbor Workers’ Compensation Ruling

In cases where punitive damages have been claimed and could potentially be awarded defendants should be aware of whether, and to what extent, their wealth and financial data is subject to discovery. Louisiana courts seem to be in agreement that when punitive or exemplary damages are claimed, a defendant’s financial status is discoverable since such information is relevant to the subject matter of the action. See Lacoste v. Crochet, 99-0602 (La. App. 4 Cir. 1/5/00), 751 So.2d 998, 1005. However, it is not clear as to the extent to which a party may conduct discovery into the wealth and financial matters of a defendant when dealing with a potentially viable punitive damages claim.

Continue Reading Limiting Discovery in the Punitive Damages Context

After considerable delay and much anticipation by the municipal finance community, the Securities and Exchange Commission (the “SEC”) recently approved a final rule defining municipal advisors for purposes of the Dodd-Frank Act (the “Act”). The SEC had previously noted that, in the wake of the last financial crisis, a number of municipalities suffered significant losses from complex derivatives and other financial transactions that had been entered into after receiving advice from municipal advisors who were largely unregulated and thus not required to comply with any particular standard of conduct or meet any particular training requirements or disclose potential conflicts of interest. To address this issue, the Act created a new regulatory regime that is intended to protect municipalities and investors in the municipal securities market. To that end, the Act requires that the Municipal Securities Rulemaking Board (the “MSRB”) regulate municipal advisors who advise state and local governments and other political subdivisions on financial products and services. A person is considered to be an advisor if that person provides advice “to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues; or undertakes a solicitation of a municipal entity or obligated person.” Importantly, certain persons who had initially been included in the proposed rule are now excluded from the final rule, including public officials and employees, underwriters not providing advice regarding investment of proceeds or derivatives, registered investment advisors, attorneys, engineers, banks, accountants, certain independent registered advisors, and certain swap dealers.

In other news, the Internal Revenue Service (the “IRS”) has issued two proposed regulations relating to tax exempt bond arbitrage restrictions. Major changes in the first proposed regulation include revisions to the definition and standards for determining the issue price of a bond issue, simplified rules relating to interest rate swaps and qualified hedges, and the creation of a safe harbor for long-term working capital financing. The second proposed regulation addresses recovery of overpayment of arbitrage rebate. The IRS is accepting comments on the proposed new regulations through December 13, 2013.

The Louisiana State Board of Medical Examiners (the “Board”) published proposed rules and regulations governing the practice of polysomnography and the licensure of polysomnography technologists and technicians.  The Board will accept comments on the proposed rules until 4 p.m. on October 21, 2013.

An individual who does not hold a current license as a polysomnograhic technologist or a permit as a polysomnographic technician is prohibited from engaging in the practice of polysomnographic technology in Louisiana.  However, the prohibition does not apply to anyone who is: acting under a license issued by any licensing agency of the state of Louisiana whose scope of practice includes polysomnography; employed as a polysomnograhic technologist by the U.S. Government when acting exclusively within the course and scope of employment; licensed by the Board to practice respiratory therapy; or pursing a course of study in a CAAHEP accredited polysomnograhic technology education program while acting within the course of study.

Polysomnographic technology is the allied health specialty practiced under the direction and supervision of a physician involving the attended monitoring and testing of individuals suffering from any sleep disorder as classified in the International Classification of Sleep Disorders.  Procedures are conducted only upon written prescription or verbal order of a physician, which is based on the physician’s clinical evaluation of the patient, and under his direction and supervision.  A polysomnographic technologist is an allied health professional who possesses a current license issued by the Board to practice polysomnographic technology to perform both diagnostic and therapeutic polysomnograms under the direction and supervision of a physician.  A polysomnographic technician is an allied health professional who possesses a current permit issued by the Board to practice polysomnographic technology under the direct supervision of a physician or qualified allied health professional currently licensed by the Board whose scope of practice includes polysomnography.  A supervising physician is a qualified physician who provides direction and supervision to an individual who is licensed or direct supervision to an individual who holds a permit, to practice polysomnographic technology in Louisiana.

Continue Reading Louisiana State Board of Medical Examiners Releases Proposed Rules Governing the Practice of Polysomnography

The Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“HHS”) has issued a report criticizing the Centers for Medicare and Medicaid (“CMS”) and its Recovery Audit Contractor (“RAC”) Program. In a report issued on September 4, 2013, the OIG determined that CMS need to take corrective action on reimbursement program vulnerabilities, had not addressed fraud referrals form its RAC auditors, and had not provided sufficient oversight of RAC performance.

In Report OIE-04-11-00680, the OIG reported that although CMS took corrective action in 2010 and 2011 in response to program vulnerabilities, deficiencies nevertheless continue. For example, CMS apparently did not take action to address six RAC referrals for potential fraud.  The OIG also reported that when comparing performance evaluation metrics with RAC contract performance requirements, CMS oversight of the RAC’s performance is not as effective as it should be.

According to the OIG, RAC auditors identified half of all claims they reviewed in 2010 and 2011 as having been improperly paid.  CMS defines any specific issue associated with more than $500,000 in improper payments as a “vulnerability”.  CMS is supposed to develop corrective action plans to address vulnerabilities and is to keep an action plan open until each vulnerability is corrected.    One example of corrective action is provider education.

As of June 2012, CMS had not taken action on 18 of 46 vulnerabilities.  As of this same time, CMS had not evaluated the effectiveness of its correction actions on 28 of 46 vulnerabilities.   Additionally, as of November 2012, CMS has not taken action to address the six fraud referrals that had been made by RAC auditors in 2010 and 2011.

Although most of the RAC-identified overpayments were made to hospitals, all health care providers should be vigilant in ensuring adequate documentation, proper code selection, and the ability to defend the medical necessity of items and services provided to Medicare beneficiaries.

September 23, 2013 is the effective date of new HIPAA Regulations that address many changes, such as:

  • Changes to Business Associate Rules
  • Changes to Investigations, Compliance Reviews and Civil Monetary Penalties
  • Mandatory Restriction on Disclosure of Protected Health Information to Health Plans in Some Cases of Cash Payment for Items and / or Services
  • Risk Assessment and Break Notification
  • Changes to Provider’s Notice of Privacy Practices
  • Changes Regarding Marketing and Fundraising

On Wednesday, September 18 from 5:30 – 7:30 pm at Juban’s Restaurant, the Kean Miller Health Law Team will discuss these changes and how they may affect your practice, agency or company.

RSVP to rsvp@keanmiller.com or 225.389.3753.

View the invitation here.