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Tenants by the Entireties for Same Sex Couples?

Posted in Bankruptcy, Creditors' Rights

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Married couples have the additional advantage of being able to own property as tenants by the entirety in Florida and other select states.  Now that the Supreme Court has ruled that same-sex marriage is legal in all 50 states, same-sex married couples should be able to take advantage this type of property ownership only previously available to marriages between a man and a woman.  What does this mean and why is it relevant?  Stay tuned for my future blogs on this issue.

Supreme Court Says No More Stripping!…of Junior Liens in Chapter 7

Posted in Bankruptcy, Chapter 7, Creditors' Rights

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The Eleventh Circuit’s opinions in In re McNeal1, Bank of America v. Caulkett2 and Bank of America v. Toledo-Cardona3 put second mortgages in greater jeopardy for lenders when the Eleventh Circuit held that second-priority mortgage liens could be eliminated completely (i.e. “stripped off”) in chapter 7 bankruptcy cases where collateral is worth less than the amount of the first mortgage. On appeal of the Caulkett and Toledo-Cardona cases, the amici argued that affirmance of those decisions (http://business-finance-restructuring.weil.com/wp-content/uploads/2015/02/LSTA-Brief.pdf) could “ripple through the commercial loan market, impact the holders of junior liens, and dampen their appetite to lend on a junior basis.”

However, the Supreme Court’s ruling on June 1, 2015 in Bank of America, N.A. v. Caulkett, 135 S.Ct. 1995 (2015) (http://www.supremecourt.gov/opinions/14pdf/13-1421_p8k0.pdf), which will benefit lenders, declined to allow the two chapter 7 debtors, Caulkett and Toledo-Cardona, to rid themselves of second mortgages on their homes despite the fact that the first mortgages exceeded their home’s current value.  Specifically, the Supreme Court held that debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under 11 U.S.C. § 506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the creditor’s claim is both secured by a lien and allowed under 11 U.S.C. § 502.  For now, this decision provides a measure of relief for real estate lenders, avoiding the disorder and chaos real estate markets might have suffered if the Eleventh Circuit decisions had been affirmed and second-lien holders had little, if any, recourse on loans with severely diminished equity positions. For now the message is clear, Stop Stripping!…junior liens in chapter 7.

 

1477 Fed.Appx. 562, 2012 WL 1649853, at *1 (11th Cir. May 11, 2012)

2566 Fed.Appx. 897, (11th Cir. 2014)

3556 Fed.Appx. 911, (11th Cir. 2014)

Three in a Row – the EEOC Has Just Filed a Third Lawsuit Directed to Discrimination of a Transgender Employee

Posted in Labor & Employment

Following up on my earlier posts here and here, the Equal Employment Opportunity Commission (“EEOC”) has just filed a third lawsuit in which it charged an employer with sex discrimination of a transgender employee.

The EEOC said Friday it has filed suit against Minnesota-based Deluxe Financial Services Corporation charging it with violation of Title VII of the Civil Rights Act of 1964 for allegedly subjecting employee Britney Austin to sex discrimination.

The EEOC said that Ms. Austin had performed her duties satisfactorily in the financial services firm’s Phoenix office. The EEOC alleged that Deluxe refused to let her use the women’s restroom after she began to present at work as a woman and informed her supervisors she was transgender.  The EEOC also stated that supervisors and co-workers subjected Ms. Austin to a hostile work environment, including hurtful epithets and intentionally using the wrong gender pronouns to refer to her.

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Rayford O. Irvin, the district director for the EEOC’s Phoenix district office, said in a statement:  “A long-term, well-respected employee should not be rewarded for her years of dedicated service by being forced to face the indignity and danger of using a restroom inconsistent with her gender identity, simply because a company’s management subscribes to sex stereotypes and believes co-workers may feel uncomfortable. Employee and customer preferences based on stereotypes are not a legitimate reason to discriminate.”

What is the takeaway for employers?

  1. Update your policies and procedures.
  2. Recognize that the EEOC is focusing on discrimination and harassment that involves gender identity and therefore your nondiscrimination and harassment policies and procedures need to include, both in writing and in practice, a bar against discrimination/harassment based on gender identity.
  3. Bathroom policies, as I recently posted, the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) has recently issued guidance for employers regarding transgender bathroom access. Employers should follow that guidance (in this most recent case, bathroom access was an issue).

See my earlier post about OSHA’s bathroom access guide for transgender employees.

See my earlier post about Title VII protections for transgender employees.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims. You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Potty Police: OSHA Issues Transgender Bathroom Access Guidance

Posted in Labor & Employment

This past legislative session, Florida lawmakers put forth a bill which would have required transgender individuals to use the restroom of their assigned gender from birth.  The bill underwent several amendments since, as it was originally drafted, it would have criminalized what many consider normal behavior (i.e. a mother taking her male baby or toddler into a women’s room, or women using an empty men’s bathroom because the women’s restroom was too busy, etc.).  However, the bill died before the legislative session ended which left the bathroom bill in limbo.

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Now, this week, the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued guidance for employers regarding transgender bathroom access.  The four (4) page publication can be found here.

Most trans-gender individuals utilize bathrooms out in the public without problems.  But, in the workplace, transitioning or transgender employees may have been known by their prior gender.  And, in a large workplace it is not uncommon to have a couple of coworkers complain about the bathroom issue.  As a result, employers should be reviewing their policies and procedures and need to be paying attention to these issues.

  • Employers should provide convenient and unfettered bathroom access.  Requiring employees to travel to use a restroom or to limit their liquid intake is inappropriate and against OSHA regulations.
  • If possible, provide all employees with neutral sex or single sex toilet facilities (this is the private family care bathroom that is often available in public settings that is private and can be utilized by either gender).
  • Permit transgender employees to use the restroom for the gender they are presenting.
  • Management should communicate to all employees that a transgender employee or customer is permitted to utilize the bathroom that matches the gender they are presenting.
  • Employers should review their nondiscrimination policies and make sure that they include language prohibiting discrimination based on transgender and gender nonconformity.

 

See my earlier post about Title VII protections for transgender employees. 

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims. You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Construction Loan Lender Liability Recently Limited by Florida Appeals Court Ruling

Posted in Construction & Real Estate

Sacha Boegem is an experienced litigator in the West Palm Beach Fox Rothschild office.  He focuses his practice on a wide range of commercial litigation matters, including business disputes and torts, banking/financial services industry litigation, trust and estate litigation, and supplier-distributor litigation and advising.  Below is Sacha’s first post on the South Florida Trial Practice blog.  We welcome Sacha to the blog and look forward to future posts. For anyone with questions or comments regarding this post, you can reach you can contact Sacha at 561-804-4437 or sboegem@foxrothschild.com.

In an opinion released April 22, 2015 Florida’s First District Court of Appeals upheld a trial court’s ruling that Section 713.3471(2) of Florida’s Construction Lien Law precluded common law remedies.  See Jax Utilities Mgmt., Inc. v. Hancock Bank, No. 1D14-664, 2015 WL 1809322, at *5 (Fla. 1st DCA Apr. 22, 2015).  This section sets forth certain notice requirements that construction loan lenders must comply with if they make “a final determination, prior to the distribution of all funds available under a construction loan, that the lender will cease further advances pursuant to the loan.”  Fla. Stat. § 713.3471(2)(a).  The statute also provides that a lender has no liability if it complies with the statute, and provides a mechanism for determining damages if a lender fails to comply.  Fla. Stat. § 713.3471(2)(a) and (b).

As the First District Court of Appeal explained on this issue of first impression for a Florida appellate court, “the plain language of section 713.3471(2) evinces a legislative intent to displace the common law remedies and the statute is so repugnant to common law remedies that the two cannot coexist.”  In Jax Utilities, even though the record did not indicate that the lender had served proper notice under the statute, plaintiff Jax elected not to bring a statutory claim and instead sued the lender for equitable lien and unjust enrichment.  The trial court found that the statute precluded Jax’s common law claims and entered summary judgment for the lender, which the Court of Appeals upheld.

This opinion has not yet been released for publication in the permanent law reports and thus is still subject to revision or withdrawal.  Assuming it stands, however, the opinion potentially provides construction loan lenders with a way to avoid or have dismissed common law claims against them for their alleged failure to provide the statutorily-mandated notice, and limits their liability to the measure of damages provided for in the statute in instances where they are found to have violated the statute.

Beware! – Approach Chapter 11 Releases With Caution

Posted in Bankruptcy, Chapter 11, Creditors' Rights, Releases

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Chapter 11 plans routinely contain provisions either releasing, or enjoining litigation against, various stakeholders involved in the case, particularly where the plan contemplates an infusion of cash by those stakeholders.  With few exceptions, the provisions of a confirmed chapter 11 plan are binding upon all creditors, whether or not they vote in favor of the plan.  Accordingly, it is important for creditors to review Chapter 11 plan releases carefully.

In the rent case of Iberiabank v. Geisen (In re FFS Data, Inc.), 776 F.3d 1299 (11th Cir. 2015)(http://media.ca11.uscourts.gov/opinions/pub/files/201411473.pdf) the bank creditor made a pre-petition loan for $10.6 million (“Loan”) which was guaranteed by FFS Data, Inc. (“Corporate Debtor”) and its president (“Debtor’s President”).  Shortly prior to the Corporate Debtor’s bankruptcy, the borrower defaulted on the Loan.  The bank creditor agreed to forbearance against the borrower and the Debtor’s President to provide them with an opportunity to sell the real property securing the Loan and if the property sold, the bank creditor would be permitted to proceed with an action against the guarantors, including the Debtor’s President, for any deficiency.  The bank creditor filed a claim in the Corporate Debtor’s bankruptcy estate for $10.6 million.

The Corporate Debtor proposed a chapter 11 plan and among other concessions, the Debtor’s President contributed $750,000 to the bankruptcy estate and agreed to release more than $1 million of his claims against the bankruptcy estate.  In return, the proposed plan contained a broad release provision for the Corporate Debtor and the Debtor’s President.  The bank creditor did not object to the proposed plan, attend confirmation or appeal the confirmation order.  Thereafter, the creditor bank sued the Debtor’s President on his guaranty and the Debtor’s President responded that the Plan released him from his personal guaranty of the Loan.  The creditor bank sought to reopen the bankruptcy case and moved for a determination that its claims against the Debtor’s President were not released.  The bankruptcy court denied the creditor bank’s motion, the district court affirmed, and the bank creditor appealed.

The U.S. Court of Appeals for the Eleventh Circuit (“Court”) held that the lender’s claims against a bankruptcy debtor’s president, who had personally guaranteed a loan, were released by the general release incorporated in the Corporate Debtor’s confirmed chapter 11 plan of reorganization.  The Court determined that the release was not limited to claims against the Debtor’s President solely in his capacity as an officer and/or director of the Corporate Debtor.  Further, the Court further declined to adopt the Fifth Circuit’s requirement that a release of third-party guarantor be “sufficiently specific” in order to have res judicata effect, but notwithstanding, found that the release was sufficiently specific, as it identified the Debtor’s President and stated that it was a general release of all claims.

The lesson of this case is that Chapter 11 creditors should review releases very carefully, ensure that plan releases are limited to the Debtor’s obligations only, and where releases are broadly worded to include third-party obligors, file objections for non-consensual releases or where they believe clarification is needed on the scope of the release.

Breast Feeding Break Rules – Do They Extend to the Charitable?

Posted in Labor & Employment

I have previously posted on the break time rules for nursing moms.

Now, there is an interesting new case filed out in California by a woman who claims she was discriminated against after serving as a surrogate.  Mary Gonzales worked for a large hotel corporation.  She served as a surrogate for an infertile company.  When she returned to work, the hotel initially accommodated her need for breaks to pump breast milk.  After a time period, she stopped pumping milk for the child she gave birth to and instead started donating the milk to a milk bank.  When Ms. Gonzales started to donate her milk, Ms. Gonzales claimed that her managers forced her to use her lunch break rather than permit her to take breaks as needed to pump.

Ms. Gonzales claimed that she was discriminated against because her employer held impermissible stereotypes about legitimate motherhood. Her Complaint also included claims regarding her physical need for an accommodation (i.e. “clogged ducts, severe breast pain and soreness, blisters, and loss of sleep in order to express milk at night”).

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Ms. Gonzales brought her lawsuit under both the Federal Pregnancy Discrimination Act (“PDA”) and California’s Fair Employment and Housing Act.

Notably, Ms. Gonzales did not bring her lawsuit under the Fair Labor Standards Act (“FLSA”) which was amended by the Patient Protection and Affordable Care Act (“Affordable Care Act” also known as “Obamacare”) to provide additional protection and break requirements for expressing breast milk during the work day.  Ms. Gonzales’ counsel most likely recognized that she would not be covered under the FLSA since she was not expressing breast milk for her own child.

Whether or not Ms. Gonzales would be covered by the PDA is another question.  The PDA which amended Title VII does protect a lactating woman.  For example, an “employee must have the same freedom to address such lactation-related needs that she and her co-workers would have to address other similarly limiting medical conditions.  If an employer allows employees to change their schedules or use sick leave for routine doctor appointments and to address non-incapacitating medical conditions then it must allow female employees to change their schedules or use sick leave for lactation-related needs under similar circumstances.”

It will be interesting to see how the Court rules with regards to the PDA allegations.  One might argue that desiring to donate to a breast milk bank is akin to someone donating sperm or eggs out of an altruistic desire.  Should employers be required to make accommodations for sex based altruistic biological donations or is that something an employer can require an employee to address on his or her own time?

I’ll be following this case, so check back for the outcome.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

File Timely Returns!

Posted in Bankruptcy, Dischargeability, Taxes

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In the recent case of Coyle v. United States (In re Coyle), 524 B.R. 863 (Bankr. S.D. Fla. 2015)(http://www.flsb.uscourts.gov) the U.S. Bankruptcy Court for the Southern District of Florida (“Bankruptcy Court”) held that a debtor’s untimely Form 1040 for 2006 that was filed in 2010, after the Internal Revenue Service’s (“IRS”) assessment of her tax liability for 2006, was not an honest and good faith effort to comply with the tax laws, was not a “return”  as used in 11 U.S.C. §523(a)(1)(B).  Id. at 870.  Therefore, the debtor’s tax liability for 2006 was not dischargeable.  Id.  The Bankruptcy Court found that the test outlined in Beard v. Commissioner of Internal Revenue, 82 T.C. 766 (1984), aff’d, 793 F. 2d 139 (6th Cir. 1986) (“Beard”) for determination of whether a document submitted to the IRS by a taxpayer qualifies as a return should be applied with the issue being “whether, under the Beard test, a Form 1040 filed after an IRS assessment can never represent an ‘honest and reasonable attempt to satisfy the requirements of the tax law.’”  Id. at 868.  Citing Moroney v. U.S. (In re Moroney), 352 F. 3d 902, 906 (4th Cir. 2006), the Bankruptcy Court noted that “[t]he very essence of our system of taxation lies in the self-reporting and self-assessment of one’s tax liabilities”.  Id. at 869.  Accordingly, once “the IRS has completed the deficiency procedures and assessed a tax debt, it is too late for the taxpayer to satisfy his duty to report the amount already assessed and the form cannot function as a determination of the debt by the taxpayer.”  Id.

Florida Whistleblower Statute – Whistling Dixie if Federal Law Preempts

Posted in Banking, Labor & Employment

The United States Court of Appeals for the Eleventh Circuit, which governs Florida, recently found that Florida’s Whistleblower Statute is preempted by the National Bank Act.

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The Plaintiff in this matter was a former vice-president of U.S. Bank (a federally chartered bank).  Plaintiff had alleged that the bank violated a particular federal statute governing banking practices.  And, after the Plaintiff objected to this practice, he claimed that he was fired in retaliation.  The Plaintiff brought his claim pursuant to the Florida Whistleblower Act. U.S. Bank defended by, in part, pointing to a federal statute applicable to federally chartered banks that allowed a bank to dismiss its officers “at pleasure.”

Specifically, the bank argued that the federal statute that allowed the dismissal of the officer preempted the Florida Whistleblower Act which would have limited the bank’s ability to terminate Plaintiff’s employment.  The Federal district court agreed as did a split Eleventh Circuit.

“Preemption” means that under the Supremacy Clause of the United States Constitution, a state law that conflicts with federal law is without effect.  Federal law preempts state law when there is a significant conflict between federal and state law.  The relevant federal statute here allowed a federally-chartered bank to “dismiss such officers or any of them at pleasure.”  See 12 U.S.C. § 24.  The Court concluded that the Florida Whistleblower Act, which would have placed limits on the ability of a federally-chartered bank to terminate one of its officers, conflicted with federal law because it would have limited the freedom of action allowed to federally-chartered banks by federal law.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP. Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims. You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Sharing Employees Doesn’t Mean You Can Share Employee I-9 or E-Verify Information

Posted in Labor & Employment

Diane Geller (Fox Rothschild Labor & Employment partner in our West Palm Beach office) recently provided advice on how to work within the government rules that do not allow staffing firms to share I-9 and E-Verify information with third parties, including staffing customers.  You can read the article here.