Regardless of who you supported in the recent Presidential election, one thing both candidates agreed on was that the Fair Labor Standards Act, or FLSA, is not going away. The FLSA is a Depression-era law that has seen relatively little change in nearly 90 years. It created a federal minimum wage and required that most employees be paid overtime of 1.5 times their regular hourly rate when an employee works more than 40 hours in a workweek. So why, after so many years, do employers regularly trip up on this law, sometimes costing them in the hundreds of thousands of dollars?
In the ever-emerging business interruption coverage world, Superior Court Judge Orlando F. Hudson Jr., a North Carolina Judge, ruled that Cincinnati Insurance Company owes a group of restaurants coverage for losses which flowed from a North Carolina mandated COVID-19 shutdown, in the matter of North State Deli LLC et al. v. The Cincinnati Insurance Co., 20-CVS-02569, in the State of North Carolina General Court of Justice for the County of Durham. This ruling appears to be the first decision to hold that a government-ordered shutdown to contain the virus caused a “physical loss.”
In previous blog posts (Recent COVID-19 Business Interruption Decision is a Win for Insurers and What You Need to Know About COVID-19 and Business Interruption Insurance Coverage), I have set forth that these cases are being fought on the issue of whether there is a “physical loss” which would trigger coverage under many business policies. Judge Hudson Jr. stated that the term direct physical loss includes an:
inability to utilize…something in the real, material or bodily world, resulting from a given cause.”
In sum, physical damage or alteration is not needed to trigger the coverage.
With Election Day rapidly approaching, campaigning has become fierce. From President Donald Trump and Joe Biden down to Congressional, State Legislature and local candidates, everyone is blasting out their “message.” One way politicians like to get their messages across is by music. Snippets of songs create earworms that voters begin to associate with certain candidates — so why wouldn’t a candidate use music in their messaging, especially anthemic songs like Bruce Springsteen’s “Born in the USA,” Neil Young’s “Rockin’ In the Free World,” or Tom Petty’s “I Won’t Back Down”?
While candidates love the association a song gives voters, often the artists do not. Every election cycle contains at least a few artist/politician disputes over use of music. How is this controlled and who has the right to control when and by whom music is used politically?
Copyright protects original expressions reduced to tangible form. This includes music, both recorded and written, lyrics, and the song composition or arrangement. For a given piece of music, there may be several different copyright owners — the songwriter may own the lyrics, the composer may own the score, a record label or publisher may own the recorded version of a song. Copyright gives the owner of the expression the right to control copying, distribution and even use of copyrighted material in particular circumstances.
How does this play in to political marketing and who controls the use of songs?
On July 1, 2020, an Ingham Michigan Judge dismissed a claim of first impression, ruling in favor of an insurer’s decision to deny business interruption coverage due to the finding that the insured business owner did not suffer a direct physical loss under the policy.
Similar to many lawsuits on this uniquely 2020 issue, the case (Gavrilides Management Company v. Michigan Insurance Company) focused on whether there was a “direct physical loss of or damage to the insured’s property” which would trigger the coverage for business interruption. This particular claim centered on a business owners’ two restaurants in Lansing Michigan in the amount of $650,000.
The insurer argued that the business interruption coverage kicks in by an occurrence that actually alters or damages the property, which apparently did not occur. The claimant argued that non-destructive losses are also covered by the policy. Continue Reading Recent COVID-19 Business Interruption Decision is a Win for Insurers
Trademark scams, as detailed in our earlier post here, are back with a vengeance. Because of the nature of these scams and the potential cost of falling for them, we felt it was time to address this topic again.
How Trademark Scams Work
Federal trademark applications and trademark registrations are public records. The United States Patent and Trademark Office maintains a searchable database of currently existing and expired trademarks. Among other information in the database is the name and address of the owner of a trademark application or registration, USPTO Serial and Registration Numbers, registration dates and even visual images of trademarks.
Scammers can obtain this information directly off the USPTO website and enter it into documents that look “official” and emanate from such “official” entities as World Trademark Register, United States Trademark Compliance Office, Patent & Trademark Bureau, United States Trademark Registration Office, and WTP Trademark Service.
The coronavirus has impacted more than an individual’s health and well-being. In the wake of this global pandemic, many businesses have been impacted — whether it be from an order from local or state government or because it has been directly hit with employees or customers who were diagnosed with COVID-19.
Businesses have had to grapple with the distinction between “essential” and “non-essential” and alter their budget to purchase PPE and other sanitary items. Projections for revenue for 2020 were obliterated in the process leaving business owners with difficult decisions in terms of whether it is worthwhile to remain open in a limited capacity, temporary closure, furloughs, layoffs, bankruptcy, or in some cases going out of business. The Payroll Protection Program instituted by the Federal Government has provided a temporary salve, however, in many cases business losses continue in big and small ways.
Business Interruption Insurance
The natural offshoot of this business and economic disruption for businesses is whether their business insurance coverage, for which its owners paid premiums month in and month out, ‘owe’ for business income lost, and additional expenses, due to a viral pandemic such as to COVID-19.
Multiple insurers are facing federal class action lawsuits for denying business interruption claims. Further, claims by business owners for business disruption losses have increased exponentially. This post endeavors to examine some of the issues that will be at the forefront for business owners, and carriers, as it pertains to COVID-19.
An injured worker may seek to establish compensability of the contraction of COVID-19 under two legal theories:
- Exposure; and,
- Occupational disease.
Pursuant to Florida Statutes §440.02(1), an injury or disease:
caused by exposure to a toxic substance is generally not an injury or accident arising out of employment.”
Although this section has not been utilized in the context of a virus, it is assumed, for the purposes of this discussion, that the virus is considered a toxic substance.
Taxpayers have until today (July 15) to request an extension to file their 2019 federal tax return. If an extension is approved, taxpayers could have until October 15 to file, but any taxes owed are due by July 15.
Common Tax Return Errors
The IRS has noted the following common tax return errors:
- Missing or inaccurate Social Security numbers
- Math errors
- Inaccurate filing status
- Incorrect calculation of credits or deductions
- Unsigned returns
- Filing with an expired individual taxpayer identification number
The IRS highly encourages taxpayers to use the e-file or IRS Free File system. The IRS software will formulate calculations, flag common errors, and prompt taxpayers for missing information, all of which ultimately reduces tax return errors. A tax return containing errors can delay refunds.
What if I can’t pay my tax bill?
In one of the most significant Supreme Court cases for Florida employers in many years, the U.S. Supreme Court held by a 6-3 margin that Title VII of the Civil Rights Act of 1964 (commonly known as “Title VII”) protects gay and transgender individuals from discrimination in the workplace. In the anxiously anticipated decision, which is a consolidation of three cases, the Court held in Bostock v. Clayton County, Georgia, that Title VII’s prohibition against discrimination on the basis of sex includes discrimination because of an individual’s sexual orientation and gender identity. While the decision only addresses traditional claims of discrimination (plaintiffs were all fired from their jobs), employers should expect that the ruling will extend to claims of harassment as well. If you are a Florida employer, this decision likely means that you need to update, review, and discuss your employment policies with your employees.
Until recently, the lower courts that had ruled on the issue routinely held that Title VII’s protections did not extend to discrimination against individuals who had adverse actions taken against them merely because they were gay or transgender. In fact, one of the consolidated cases came from the Eleventh Circuit, which had cited a long-standing lower court precedent in rejecting the claim of a gay male who was fired from his job in Georgia solely because his employer learned that he was gay. Florida is part of the Eleventh Circuit, and so gays were not protected under Title VII’s coverage in Florida until today.
June 4 Update
House Bill H.R. 7010 passed the Senate and is now on its way to the President to sign. In addition to amendments relating to the PPP loan program, the bill provides that the deferral of employment taxes is now available even for taxpayers who have PPP loans that re forgiven under the CARES Act. This will allow taxpayers who obtain PPP loans and intend to apply for loan forgiveness to also defer the applicable employment taxes.
On May 13, 2020, the Small Business Administration (“SBA”) issued anxiously awaited guidance outlining the agency’s perspective on the good faith certifications made by Paycheck Protection Program (“PPP”) applicants. (See, PPP Frequently Asked Questions, #46).
PPP recipients of loans less than $2 million found relief in the SBA’s statement that it would deem those recipients to have made the certification in good faith.
For those with PPP loans at or above $2 million, the SBA will require the recipient to adequately support its certification. If the recipient fails to do so, the SBA indicated it will seek repayment of the loan in full, but the agency will not pursue administrative enforcement or refer the matter to other agencies.