LIEB BLOG

Legal Analysts

Wednesday, August 07, 2024

DOJ's Corporate Enforcement and Voluntary Self-Disclosure Policy

DOJ just launched the Corporate Whistleblower Awards Pilot Program to reveal and prosecute corporate crime. 


Companies should take advantage of Self-Disclosure to earn a presumption of a declination – avoidance of prosecution – by voluntarily notifying the DOJ of corporate misconduct initially reported to them by internal whistleblowers.


In order to qualify for a declination under the DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy, companies must self-report the business’s misbehavior unearthed internally within 120 days of that whistleblower report. Additionally, the company self-reporting must occur prior to the agency contacting them and the company must pay out the amount that would be forfeited, unlawfully obtained funds, as well as any victim compensation payments stemming from the corporate misconduct.


All employers should immediately update their internal policies to motivate corporate self-reporting and internal whistleblowing by workers.




Thursday, July 25, 2024

College Athletes Are Employees Due Minimum Wage

In ruling that College Athletes may be entitled to sue for unpaid compensable work and recover minimum wages, plus double damages called liquidated damages, and attorneys' fees, for the prior 2-years (3-years if violations were found to have been willful), the 3rd Circuit Court of Appeals, in Johnson v. NCAA, held "that college athletes may be employees under the FLSA when they (a) perform services for another party, (b) “necessarily and primarily for the [other party’s] benefit,” Tenn. Coal, 321 U.S. at 598, (c) under that party’s control or right of control, id., and (d) in return for “express” or “implied” compensation or “in-kind benefits,” Tony & Susan Alamo Found., 471 U.S. at 301 (quotation omitted)."


This is the biggest decision to impact college sports since the NCAA responded to the SCOTUS decision in NCAA v. Alston by allowing athletes to profit from their name, image, and likeness (NIL) with direct endorsement deals followed by the National Labor Relations Board (NLRB) taking the position that college athletes are employees for purposes of the National Labor Relations Act (NLRA) and forming unions / engaging in concerted activity. 


Yet, the biggest takeaway from Johnson v. NCAA isn't the newsworthy headline about college athletes, but instead, its analysis of what types of work must be paid, for everyone. 


Simply, the Circuit Court has instructed us that in most instances, "efforts that provide tangible benefits to identifiable institutions deserve compensation." In fact, the Circuit Court dispensed with the NCAA's nonsensical argument that the students were paid in other forms by receiving "increased discipline, a stronger work ethic, improved strategic thinking, time management, leadership, and goal setting skills, and a greater ability to work collaboratively" because those benefits "are all exactly the kinds of skills one would typically acquire in a work environment." In all, the Circuit instructed to always "look to the economic realities of the relationship," "upon the circumstances of the whole activity," when determining if a person is defined as an employee entitled to payment for work. Additionally, it is true that an employee must be promised or expect compensation for their work, but importantly, that compensation is not limited to money and can be instead, the receipt of in-kind benefits, where the promise or expectation can be implied and needn't be expressly stated / written. 


Johnson is a big win for unpaid workers everywhere in the US. 




Wednesday, July 24, 2024

NDAs May Violate Whistleblower Laws

Whistleblowers are not blocked from NDAs.


The Consumer Financial Protection Bureau (CFPB) released Consumer Financial Protection Circular 2024-04, which warns that NDAs may violate whistleblower laws if they do not have appropriate carve-outs. 


A provision of the Consumer Financial Protection Act (CFPA) safeguards whistleblowers from retaliation by financial firms for reporting financial misconduct that violates the CFPA.


The CFPB’s circular noted that companies may impose NDAs on employees for permissible reasons (such as the protection of sensitive trade secrets), but they need to explicitly afford employees the freedom to communicate or cooperate with law enforcement regarding internal misconduct could disincentive whistleblowing and violate federal whistleblower laws such as the CFPA.


To read the whole circular, click here.






Monday, July 22, 2024

Real Estate Lending Valuations Guidance

On July 18, 2024, the Consumer Financial Protection Bureau and 4 other government agencies issued guidance to financial institutions about Reconsiderations Of Value (ROVs) in the real estate lending process to avoid litigation for deficient valuations. 


ROVs are valuation reports, which includes reconsideration of appraisals, evaluations, and other means to determine the value of residential property. Specifically, ROVs are a response to a request for a follow-up valuation, after an initial valuation exists to gauge the value of real estate or loan collateral offered by a party seeking a loan. 


The guidance suggests policies and procedures for lenders to address information unconsidered in an initial valuation or identify flaws in an original valuation because accurate valuations of collateral are key to the lending process and avoiding litigation.  


A valuation may be deficient due to unlawful discrimination under both the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA). In fact, the guidance suggests that complaints of discrimination should be addressed by routing those complaints "to the appropriate compliance, legal, and appraisal review staff," in addition to processing the ROV. Such unlawful valuations can prevent the acquisition of loans lenders, blocking potential buyers from purchasing or refinancing homes. 


To read the entire guidance, click here




Tuesday, July 16, 2024

Guidance on AI Discrimination & Emerging Data in Insurance by NYS DFS

Welcome to the age of AI Discrimination Regs. Do you have an auditing program in place? 


On July 11th, 2024, the New York State Department of Financial Services (DFS) released Circular Letter No. 2024-7 about the expectations for insurers in NYS regarding the use of Emerging Consumer Data & Information Sources (ECDIS) & Artificial Intelligence Systems (AIS) in underwriting and pricing insurance policies.


The goal of these guidelines is to ensure that all insurers adopt & manage ECDIS, AIS, & other predictive models responsibly because these models come with potential systemic biases & reliability issues that could lead to unfair discrimination or adverse effects on vulnerable communities.


Keys:

  • Insurers must ensure that ECDIS & AIS complies with all relevant federal / state laws & regulations.
  • Use of these models should not result in unfair discrimination, which means that data sources or models do not rely on protected classes & do not produce unfairly discriminatory outcomes.
  • Use of ECDIS & AIS must be supported with generally accepted actuarial standards, demonstrating a clear, statistically significant relationship between variables used & risk.
  • Insurers must regularly test & document their methodologies to ensure compliance with anti-discrimination laws & to maintain transparency.
  • Effective governance frameworks should be established, with senior management & board oversight to manage the risks associated with these technologies.


DFS notes that transparency is crucial with ECDIS and AIS. Insurers must disclose to consumers whether these technologies are used in underwriting or pricing decisions & provide the specific data that influenced these decisions. 


When it comes to third-party vendors, insurers are responsible for understanding & ensuring compliance of any third-party tools, ECDIS, or AIS used. This includes having contracts that allow for audits & cooperation with regulatory inquiries.


If you'd like to read DFS's Circular Letter No. 2024-7 click here




Thursday, July 11, 2024

Foreclosure Help on the Way from CFPB

The Consumer Financial Protection Bureau (CFPB) proposed new rules on July 10, 2024 that would obligate large mortgage servicers to help homeowners/borrowers avoid foreclosure, expand access to borrowers seeking mortgage payment assistance, and strengthen communication between borrowers and servicers.


These rules would mandate servicers to do everything they can to provide payment assistance to borrowers before they can seek foreclosure while also speeding up servicers’ evaluations of borrowers’ eligibility for assistance by greenlighting such reviews once borrowers provide some documentation rather than requiring the submission of a complete application.


Further, the amendments would mandate prompt status updates on borrowers’ applications and require servicers to broadly construe what qualifies as a request for assistance.


The new provisions would also obligate servicers to communicate with borrowers in their preferred language in certain circumstances as well as to include guidance about how to obtain information about payment assistance in notices sent after missed payments.




Tuesday, July 02, 2024

New Law - Adult Survivors Act & Sex Offenses

On June 28, 2024, New York State Governor Kathy Hochul signed into law A6138, which clarifies that individuals bringing untimely or inadequately filed lawsuits for sexual offenses revived by the Adult Survivors Act (ASA) under three other laws are not required to file a notice of claim or notice of intention to file a claim beforehand when such suits are brought against the Government. 

While the ASA provided that sexual offenses claims can be revived even if the statute of limitations period passed or a notice of claim went unfiled, the ASA did not directly amend the specific laws such revived suits are brought under to eliminate these procedural hurdles. 

The Bill clarifies that individuals bringing procedurally flawed claims revived by the ASA under the Court of Claims Act, General Municipal Law, and Education Law, specifically, are not required to file a notice of claim or intention to file a notice of claim prior.

This clarification went into effect immediately and applies to lawsuits either pending on or brought after June 28, 2024.







Tuesday, June 18, 2024

Age Discrimination Law Explained: Protecting Older Workers with Attorney Andrew Lieb on Scripps News

In this interview with Scripps News, Attorney Andrew Lieb discusses the protections for older workers from discrimination under Federal and New York State laws. 

Key points include:

  • Individuals aged 40-69 are fully protected and cannot be forced out of their positions due to age.
  • Executives over 65 can be required to retire if they meet certain payment standards.
  • In New York, everyone 18 and older has these protections and more.
  • Companies can mandate physical or mental tests for employees if they are relevant to the job's essential functions and uniformly applied.


Monday, June 10, 2024

Clarifying Anti-Discrimination Protections in New York State

On June 6, 2024, the New York State Senate passed Bill S4467, to clarify the state’s anti-discrimination law, the New York State Human Rights Law (“NYSHRL”). 


Under the law, a plaintiff only needs to prove that unlawful motivation was a motivating factor and not "the sole motivating factor" or a "but-for cause" of the challenged treatment. 


This clarification allows mixed-motive claims to succeed by showing that discrimination was one motive driving a negative work-related decision. 


This Bill addresses an issue with age discrimination where it was unclear if New York mirrored the standard from federal law, the Age Discrimination in Employment Act, which requires sole motivating factor. Clearly, the legislature knows that all victims of discrimination in New York need to be treated the same with the same standards. 


This clarification will go into effect immediately once passed by the New York State Assembly and signed by the Governor. 


If you’d like to read more, click here




Monday, May 06, 2024

Addressing Ethnic and Age-Based Harassment: Understanding Your Legal Options

Discrimination in the workplace can take many forms, affecting employees' well-being and career progression. If you're facing or have observed discrimination based on a combination of ethnicity and age, it's important to recognize that such behavior not only undermines professional environments but also violates federal and state laws.


Example of Discrimination:

Consider Angela's experience—a Hispanic woman in her fifties working as a technician in a manufacturing plant. Despite her dedication and hard work, Angela was subjected to continuous ethnic and age-based harassment from her colleagues. This harassment created a toxic atmosphere, making it difficult for her to perform her duties effectively. Angela attempted to address the issue by reporting the harassment to her shift supervisor, who unfortunately failed to take the necessary steps to escalate the complaint to human resources. This neglect allowed the harassment to persist, severely affecting Angela’s work life and mental health.


Guidance from the EEOC:

The Equal Employment Opportunity Commission (EEOC) emphasizes that employers have a legal obligation to address harassment once they are aware of it, regardless of whether the complaint comes directly from the victim or a third party. The EEOC guidelines help to clarify that any indication of harassment should prompt an employer to investigate and take appropriate action. This includes situations where the harassment is not explicitly labeled as such but is evident through the conduct described, such as unwanted physical contact or derogatory comments.


Advice from Andrew Lieb, Managing Attorney at Lieb at Law, P.C.:

"Employers must take immediate and effective action to investigate any allegations of harassment. Simply having a policy is not enough; the policy must be enforced to protect employees and maintain a respectful workplace. Victims should not hesitate to seek legal redress when their concerns are dismissed or inadequately addressed by their employer because they have a right to be protected."


Taking Legal Action:

If you relate to Angela’s situation or witness similar discriminatory practices, it's crucial to know that you have legal options available. Reporting the issue within your organization is a critical first step. If the response is insufficient, contacting a legal professional can help you navigate the complexities of filing a formal complaint and pursuing further legal action.

For personalized legal guidance and to explore the full scope of your rights and options, reach out to Lieb at Law, P.C. Our dedicated team is committed to advocating for those affected by workplace discrimination and ensuring that they receive the justice and support they deserve.


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