Corporate Representatives Depositions: How to Defend Against Them

Witness swearing on the bible telling the truthIn the December 5, 2016 blog, we discussed what corporate representative depositions (“CRD”) are and why they are used.  This blog addresses defense tactics and the conduct of CRDs.

As previously noted, the party requesting the CRD is required to identify with reasonable particularity each of the subject areas for questioning.  The corporation can object to the deposition notice when the subjects are so broad or vague that it is impossible to identify a witness.  Language such as “including, but not limited to” can be struck from a deposition notice for noncompliance with the reasonable particularity requirement.  Notices can also be objected to because the information requested is irrelevant, privileged, confidential or a trade secret.  Most courts expect the attorneys to confer before filing motions objecting to the deposition notice.

Some CRDs include deposition dates that are immediately after the lawsuit is filed.  The goal is to obtain testimony before the corporation has had time to obtain all of the responsive information.  An early deposition places the corporation in the position of using the “information is not available” response, followed by attempts by plaintiff’s counsel to obtain sanctions against an unprepared corporation.  If consulting with plaintiff’s counsel over the date is unsuccessful, obtaining a protective order should be requested.

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NLRB Sacks Long Term Care Facility’s Attempt to Avoid Class Actions

Class Action conceptIn Service Employees International Union v. Montecito Heights Healthcare & Wellness Centre, LP, Case No. 31-CA-129747, the NLRB ruled that a skilled nursing facility’s arbitration provision in its alternative dispute resolution (“ADR”) policy requiring its unionized employees to waive their right to bring class actions or to act concertedly violated federal labor law.  If you are non-unionized, do not stop reading here because this ruling has the potential of being applied to non-union workplaces.

The nursing facility’s ADR policy expressly prohibited “employees from joining a class action or representative action.”

Relying on precedent promulgated by the NLRB in Murphy Oil USA, Inc., 361 NLRB No. 72 (2014), enf. denied, 808 F.3d 2013 (5th Cir. Oct. 26, 2015), Judge Raymond P. Green held that the nursing facility violated Section 8(a)(1) of the National Labor Relations Act (“Act”) by maintaining a policy intended to require its employees to waive their right to bring or join a class action regarding their wages, hours, and terms and conditions of employment.  Judge Green explained that he was “bound to follow Board precedent irrespective of contrary opinions by circuit courts, unless and until the Supreme Court makes a definitive ruling on the subject matter in dispute.”  In other words, Judge Green did not want to run afoul of NLRB precedent.

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Corporate Representative Depositions: What They Are and Why They Are Used

Witness swearing on the bible telling the truthCorporate representative depositions (“CRD”) are creatures of federal and state rules permitting parties to lawsuits to take depositions of corporations, associations, organizations and government agencies.  They have been used for decades in products liability cases, but are relative newcomers in long term care litigation. In this section of a two-part blog, I will address the technical aspects of CRDs.  The second blog will cover defending against and conduct of CRDs.

When a party to a lawsuit wants to take a CRD, it sends a deposition notice to the corporation stating that it wants to take the corporation’s deposition.  The notice must set forth, with particularity, the subject areas for questioning.  The corporation is required to identify people who it will offer to testify on each subject area.  The individuals testifying can be anyone who consents to testify on behalf of the corporation.  The person does not have to be the most knowledgeable on the subject, but the corporation must prepare the person to answer the questions.  The witness must testify on all matters known or reasonably available to the corporation.

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Getting in the Crosshairs of the Fair Housing Act

Senioren essen Lunch im PflegeheimThe dining room has been the cornerstone of family life in America for generations. It was Ronald Reagan who once noted, “All great change in America begins at the dinner table.”  Many continuing care retirement communities (CCRC) are finding that the balance between maintaining the quintessential dining room experience for their residents and following the Fair Housing Act (FHA) obligations imposed on assisted and independent living facilities to be a daunting task.  In this article, I review the importance of FHA compliance in dining room policies at CCRC facilities.

Common area dining rooms are often the most popular gathering locations in a CCRC and also the most common areas where policies, enacted with the best intentions, are likely to give rise to claims of discrimination arising under the FHA.  The Civil Rights Act of 1968 includes the FHA, which prohibits discrimination in housing-related practices based on race, color, religion, national origin, sex, familial status and disability.  The FHA’s broad definition of disability includes mental and physical impairments common to CCRC facility residents.  Discrimination based on a disability includes the refusal by the facility to make reasonable accommodations to policies, programs, or services that would allow residents to use and enjoy the facility, including the common areas. 

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You Snooze, You Lose: What an Employer Should First Do When Notified of a Legal Action

woman uses magnifying glass to check contractIt is never pleasant to receive notice of a legal proceeding against you, and employers often wait until the last minute to deal with it, or do worse by trying to eliminate relevant evidence.  Employers are reluctant to hire lawyers early because they believe it will be expensive and complicated. So, what should an employer do after it receives notice of a legal action?  Do the three Ps:  hire a Professional, Preserve evidence, and conduct a Preliminary Investigation.

Hire a Professional

Should an employer hire an attorney if it receives a lawsuit complaint or other notice of a claim? Absolutely, and right away (though, if an employer has applicable liability insurance, then it should place its insurer on notice of the claim and work with the appointed defense lawyer; this article focuses on self-insured employers and employers with high deductibles or self-insured retentions) .  In California, corporate employers must hire lawyers to defend lawsuits, so there is no choice.  Individuals who are employers (e.g., sole proprietorships) may defend themselves in court, but this strategy won’t likely end well. Many employers usually don’t know whether or what information is harmful or helpful and sometimes don’t know what information should be confidential. Your innocent phone call with the opposing attorney (without your lawyer) could result in unnecessary or inadvertent disclosure of harmful information to the other side. Hiring an experienced employment lawyer will reduce or eliminate these risks.

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Reducing The Risks of Employment Claims Relating to Long-Term Care Facilities: Part 1 – Preventing Lawsuits

Employers often believe there is no way to avoid employee claims and lawsuits, so they do nothing at all to prevent them. Or, employers, especially small employers, try to avoid any conflicts with employees and take a hands-off approach to managing employees for fear of causing a claim or lawsuit.  Unfortunately, these passive approaches are not stemming claims, especially in California.   As reported by the California Chamber of Commerce, employment claims and suits are on the rise, with wage and hour class action suits and retaliation claims leading the charge. Understanding the ever changing federal, state, and local laws affecting the employment relationship is critical to avoiding and reducing these costly suits. While nothing can prevent an employee from suing, the “do nothing approach” typically increases the probability, difficulty, and expense of employee lawsuits. But, employers can take some simple steps to reduce the risks of employment claims.

First, employers need to document the employment relationship. This means having clear and written discrimination, harassment, and retaliation policies that are not simply posted in a break room.  Documenting that the employer is telling its employees about these policies and that employees are hearing them is essential. Documentation could be as simple as content-specific sign-in sheets at mandatory training meetings and keeping copies of the training materials. It also means writing up accurate employee evaluations, documenting warnings and disciplinary events, and memorializing review of the evaluations and disciplinary measures with the employee. And, obtain the employees signature on evaluation and warnings/discipline documents.

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CMS’ Prohibition of Pre-Dispute Arbitration Agreements for Skilled Nursing Facilities Leaves No Gaps in Its Mandate

business partnersThe Centers for Medicare and Medicaid Services (CMS) regulations that become effective on November 28, 2016 include prohibiting skilled nursing facilities from including arbitration agreements in the resident admission process. The new regulation prohibits pre-dispute arbitration agreements in the skilled nursing setting. However, this regulation permits entering into such agreements once a dispute exists, implying that the parties may already be adversarial and potentially unwilling to arbitrate. This regulation does not include assisted or independent living facilities, which CMS does not regulate. The lingering question is whether it covers disputes with residents who are not Medicare or Medicaid beneficiaries.

This new regulation was challenged during the comment period based on the Federal Arbitration Act’s pre-emption of laws that target and nullify arbitration clauses for reasons unrelated to contractual validity.  The FAA provides that arbitration clauses shall be “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The United States Supreme Court has upheld the FAA pre-emption for decades, including in the context of long term care facilities. In Marmet Health Care Center, Inc. v. Brown, 132 S. Ct.1201(2012), the Court held that a West Virginia public policy against pre-dispute arbitration agreements was in violation of the FAA and could not be enforced.

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Guardianship Petitions by Long Term Care Facilities

Power of attorneyThis blog post explains how long term care facilities (LTCFs) can consider utilizing guardianship and conservatorship petitions for problematic situations where a resident has named an agent under a power of attorney (POA), and the agent fails to pay the resident’s bills, thus jeopardizing the resident’s wellbeing.

Independent living facilities, assisted living facilities, and nursing homes traditionally take steps to ensure that residents have enacted financial POAs, as well as healthcare POAs, upon admittance. What happens when an agent named under a POA fails to make payments for the resident’s stay at the LTCF? The LTCF can sue the resident, a personal guarantor, and/or the agent under the POA, to collect the delinquent sums. Or, it could be more proactive by filing a petition with the court to either revoke the POA or the authority of the agent under the POA, and to appoint a guardian and/or conservator to make decisions about the resident’s finances, place of residence, etc.

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Be Careful What You Print in Your Newsletters and Include on Your Websites

newspaperInfringements of the Copyright Act (“Act”) related to playing music was covered in a May 17 LTC Counsel blog post, and this post will cover infringements of the Act through written materials.  Many long term care (“LTC”) facilities use websites and newsletters to inform on activities and perspectives of residents and staff.  These vehicles are often used to reproduce poems or stories intended to inspire and console residents and their families.  LTC facilities can run into problems with the Act when the content of their websites and newsletters contain original literary works.

The Act protects original works of authorship, including literary works.  17 U.S. Code §102.  Literary works are defined as works “expressed in words,” such as books, periodicals, and manuscripts.  17 U.S. Code §101.  The owners of copyrights in literary works have the exclusive right to reproduce, distribute copies by sale or other ownership transfer, perform or display copyrighted work publicly and create derivative works of the literary work.  17 U.S. Code §106.  For LTC facilities, this may mean that including an inspirational poem or story in a newsletter is a violation of the original author’s copyright.

Authors of original literary works employ agencies to search the Internet and other publication sources for any reference to or use of their original literary works.  When they find a use in violation of their rights under the Act, they send cease and desist letters demanding, with a threat of litigation, that the reproduction of the literary work be removed from the Internet or from a newsletter.  They may also demand payment of a license fee to use the literary work.  To avoid this scenario, facilities may contact authors or their agents in advance and seek permission to reprint the original work in a newsletter or on the facility’s website with proper recognition of the author.  If permission is granted, the facility should memorialize that permission in a written document.  Further, permission for use may still come with a demand for payment of a license fee.  If the facility engages in a license arrangement, that agreement should be memorialized in a contract.

The author cannot sue for copyright infringement when the original work was not pre-registered or registered with the Copyright Office of the Library of Congress.  However, when the Copyright Office rejects the literary work as not copyrightable, the author can maintain a claim for copyright infringement and the issue of whether the work is copyrightable will be litigated.  17 U.S.C. §411.  The recovery for an infringement includes either the copyright owner’s actual sales losses plus profits of the infringer or statutory damages from $750.00 to $30,000, per literary work.  Willful violations include additional awards up to $150,000.  If the court finds the infringer was unaware and had no reason to believe the Act was violated, the court may reduce an award to no less than $200.  17 U.S.C. §§504, 505.

The Act specifically prohibits monetary awards in lawsuits where the literary work was preregistered with the Copyright Office before the copyright infringement and the effective date of registration is the shorter of 3 months after publication of the work or one month after the author learns of the infringement.  This limitation on recovery applies only to unpublished works for which the infringement occurred prior to copyright registration and to published works where infringement occurred after the first publication and before a registration occurring over three months after publication.  17 U.S.C. §412.

In the event a LTC facility wishes to include in its newsletters or website original works of authorship that are protected under the Copyright Act, the facility must comply with the Act and obtain permission for the use.  It makes sense to obtain advance approval before investing in a publication that must be destroyed after contact from an author or an author’s agent.  Additionally, facilities should be very careful about website content and the origin of the information posted.

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Risky Business In California: Drug Testing Of Long-Term Care Workers

Drug test blank form with test kit and urine,focus on paperThere may be no more vulnerable segment in our society than residents in long-term care (“LTC”) facilities – the aged, the physically disabled, the mentally and emotionally hurting. Not coincidentally, there may be no more powerful a group with the capacity to harm than those who care for LTC patients. Statistics don’t lie. According to the Office of Inspector General of the U.S. Department of Health and Human Services, 25% of Medicare patients in nursing homes suffered preventable injuries from 2008 to 2012. And, as reported by USA Today, “more than 100,000 doctors, nurses, medical technicians and healthcare aids are abusing or dependent on prescriptions drugs in a given year, putting patients at risk.” Makes sense then to drug test LTC workers and to have a comprehensive statutory or regulatory testing scheme, especially in California where about 350,000 patients reside in LTC facilities each year, as counted by the California Association of Health Facilities.

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