DID YOU SIGN A NON-COMPETE AGREEMENT?

By Mauro Viskovic, Esq.
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These days, more and more companies are requiring their employees to sign restrictive covenant agreements.  These are agreements that are designed to protect a business’s legitimate interests and assets from being misappropriated or improperly utilized by a former employee.  Such agreements often contain non-competition provisions, which may provide that an employee is prohibited from working with a competitor of the employer or starting a competitive business during employment and for a period after his or her employment ends. 

Non-compete restrictions are common in the context of physician employment contracts, which are discussed here:  https://weisszarett.com/2020/06/01/understanding-physician-employment-contracts-3/.  In addition, in recent years, the NYS Attorney General’s office has investigated suspected misuse of noncompetes for rank-and-file employees, and has reached agreements with employers to stop using non-competes for employees who do not have access to trade secrets or confidential information.

New York resident individuals who have signed non-compete agreements and are transitioning between employers or starting a new business venture must analyze the extent of the applicable non-compete restrictions and whether such restrictions may be enforceable under New York law.  In addition, the prospective employers or business partners of such individuals must be equally diligent regarding those non-compete restrictions.

New York courts have noted that there are powerful public policies weighing against depriving people of their ability to earn a living, but have also held that non-competition agreements are enforceable so long as they meet an overriding limitation of reasonableness. For a non-compete restriction to be deemed reasonable under New York law, it must meet each of the following three conditions:

1.        The restriction is required for the protection of the legitimate interest of the employer;

2.        The restriction does not impose undue hardship on the employee;

3.        The restriction is reasonable in time period and geographic scope; and

3.        The restriction is not injurious to the public.

In addition to the above items, former employers seeking to enforce a non-compete agreement will need to evidence that the employee was given consideration, i.e., something of value, in exchange for agreeing to the non-compete restriction.  Examples of consideration include new employment, a promotion, garden leave payments, a raise or any form of bonus compensation.  Continuing employment (“sign this or you’re fired”) is also valid form of consideration for at-will employees.  The value of consideration given to the employee will influence any determination of the reasonableness of the non-compete restriction.  

In that regard, an additional critical issue is the skill set of the employee.  New York courts will generally uphold a non-compete restriction against a former employee whose services are “unique or extraordinary”.  To meet that standard, it would need to be shown that the services are irreplaceable or that the loss of services would cause irreparable injury to the employer.   

Geography, duration and scope are important factors for establishing the reasonableness of the non-compete restriction.  None of those factors, however, should be reviewed independently.  For example, a New York court upheld an unlimited non-compete restriction in a case where the restraint was limited to only a small geographic area.  The scope of the restriction, however, generally cannot be overbroad, such as the restricting of employment in an entire major industry without regard to the specific type of services provided by the individual.

Employees in transition, along with their future prospective employers or business partners, should carefully assess any applicable non-compete agreements with a qualified attorney to minimize or avoid any potential liability.  Each situation is unique and will merit its own considerations in evaluating the reasonableness of the non-compete restriction.

Weiss Zarett provides legal counsel and solutions to businesses and individuals for a broad variety of corporate law and employment law matters. If you need guidance with a matter concerning a current or prospective non-compete agreement, please email Mauro Viskovic, Esq. at mviskovic@weisszarett.com or call us at (516) 627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care and financial services industries, including corporate and transactional matters, employment, civil and administrative litigation, regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

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EEOC TO RESUME DATA COLLECTION APRIL 26, 2021

By Carla Hogan, Esq.
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The Equal Employment Opportunity Commission (“EEOC”) enforces federal laws applicable generally to employers with 15 or more employees (age discrimination requires 20 employees) and prohibits discriminating against a job applicant or employee because of an employee’s protected characteristics such as race, gender and age, among others.  The laws apply to all work activities such as hiring, promotion, wages and benefits and firing.

On March 29, 2021, EEOC announced it will resume collecting work force data from private employers. The deadline for submitting 2019 and 2020 EEO-1 component data will be Monday, July 19, 2021. Public employers also have to submit, but at a later date.

Work place data is summary pay data that provides EEOC wage information broken down by race, ethnicity and gender.  It is used by EEOC to help identify pay trends, inform investigations and focus resources.  It is human resource summary data, not individual pay dat., The goal is to help identify and evaluate pay disparities.

The collection had been suspended last year due to COVID.  Therefore, employers are being given 12 weeks (rather than ten weeks) to enter their data into the EEOC’s portal because it is a two year collection.  This obligation to produce and file the data through their portal is incumbent upon employers with 100 or more employees and federal contractors with 50 plus employees.

Employers can obtain more information at https:/EEOCdata.org. You should receive an email from the EEOC beginning March 29, 2021.  When collection begins, there are resources available at that website to help employers with their filings.  

Weiss Zarett Brofman Sonnenklar & Levy, P.C provides legal counsel and solutions to businesses and individuals for a broad variety employment law matters. If you need guidance with a matter concerning a current or prospective employment issue, including matters relating to discrimination, please email Carla Hogan, Esq. at 518-527-9981 or call us at (516) 627-7000.

Weiss Zarett is a Long Island law firm with an Albany, New York presence, providing a wide array of legal services to the members of the health care and financial services industries, including corporate and transactional matters, employment maters, civil and administrative litigation, regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

HHS Exercises Discretion and Declines to Enforce HIPAA Privacy Rules for Use of Web-Based COVID-19 Vaccine Appointment Scheduling Platforms

By Seth A. Nadel, Esq.
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On January 19, 2021, the U.S. Department of Health and Human Services (HHS) issued a notification that the Office of Civil Rights (OCR), the entity responsible for enforcement of HIPAA privacy rules, would exercise its discretion and decline to impose penalties against certain covered entities or their business associates with respect to the use of online scheduling applications to schedule individual patient appointments to receive a COVID-19 vaccination. 

Per the notification, OCR recognizes that certain covered health care providers or their business associates have chosen to use web-based scheduling applications (“WBSA’s”) to schedule patients in connection with large-scale COVID-19 vaccination efforts. These WSBA’s are “non public facing,” in that they are not viewable by the public and are only intended to be viewed by the patient, provider and scheduling entity. WSBA’s and the companies which provide them, by their very nature, are also considered “business associates” of the HIPAA-covered healthcare entities which use their platforms.

Generally, the HIPAA Privacy Rules allow a covered entity to share Protected Health Information (PHI) with a business associate, but only pursuant to a written business associate agreement (BAA) or in accordance with pre-existing federal regulations established by HHS. However, recognizing the public need to schedule large numbers of COVID-19 vaccine appointments within  a short period of time, OCR has opted not to impose penalties for noncompliance with these regulatory requirements when either covered entities or their business associates are, in good faith, using WSBA’s to schedule such appointments.

As to the requirement of good faith, the notification outlines the recommended and reasonable safeguards that these entities should employ in their use of WSBA’s, which mirror the general requirements for the handling of HIPAA-protected information. These include: (1) using and disclosing only the minimum PHI necessary for the purpose of scheduling; (2) use of encryption technology; (3) enabling maximum privacy settings on the scheduling software; (4) ensuring that storage of PHI is only temporary; and (5) ensuring that WBSA vendors do not disclose PHI to any third party in a manner which is inconsistent with HIPAA rules.

HHS explicitly states that “[failure] to implement recommended reasonable safeguards above will not, in itself, cause OCR to determine that a covered health care provider or its business associate failed to act in good faith” for the purposes of the notification. However, from a practical compliance standpoint, a covered entity or business associate should still take tangible steps to implement reasonable safeguards, such that they may more easily be able to show good faith efforts in meeting OCR’s requirements should they later be required to do so. HHS also encourages covered health care providers to use WBSA’s which explicitly represent that they support compliance with applicable HIPAA rules.

It should be noted that the scope of the notification does not extend to appointment scheduling technology that links directly to a covered entity’s EHR system. The notification likewise does not extend to any activities other than the scheduling of COVID-19 vaccinations, including other activities related to COVID-19 vaccination or treatment in any other respect. This includes determining an individual’s eligibility for receiving a COVID-19 or screening a patient for COVID-19 prior to an appointment. The notification also does not extend to activities undertaken without any reasonable safeguards in place, underlining the importance of documenting that at least some manner of safeguarding is implemented.

Although announced in late-January, the notification is retroactive to December 11, 2020, and will remain in effect until the expiration of the public emergency declaration, or until HHS determines in its discretion that the public emergency no longer exists. A copy of HHS’s notification may be found here.

Weiss Zarett has assisted numerous physicians and health-related businesses in connection with concerns regarding HIPAA compliance and other regulatory issues. If you have questions about any such issues, please reach out to Seth A. Nadel, Esq. at snadel@weisszarett.com or 516-627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

Parentage Proceedings Under the Child Parent Security Act

By Jessica Woodrow, Esq.
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This is the fourth installment in the four-part series 

The Child-Parent Security Act: Embarking on the Surrogacy Journey

The Child Parent Security Act is poised to impact thousands of New Yorkers seeking to start or grow families through third party reproduction. Set to take effect February 15, 2021, the CPSA sets forth clear legal procedures for obtaining a judgment of parentage for children born through sperm, egg or embryo donation and/or with the assistance of a gestational carrier. In addition to being neutral with respect to gender and marital-status, parentage under the CPSA is determined by the intention to parent rather than by genetic connection. The CPSA also permits cryopreserved embryos created by spouses or partners to enter into an agreement transferring sole dispositional control of the embryo(s) to one party and absolving the former spouse of parental responsibility.

While the CPSA also addresses parentage of children conceived through assisted reproduction (i.e., where there is a gestating intended parent and no surrogate), its most detailed provisions address the parentage of children born through surrogacy arrangements. The following information is helpful understanding the requirements under New York’s surrogacy law to secure legal parentage of children born through third-party reproduction.

An overview of parentage proceedings under the CPSA.

Once the surrogate becomes pregnant, the CPSA sets forth procedures for securing a Judgement of Parentage. Ideally, the parties should file a petition in the 2nd trimester for a prebirth order so that the baby is the legal child of the intended parents at birth. Since intended parents and surrogates may not live close to one another, it is important to select the county where the petition will be filed ahead of time and memorialize decisions related to travel and attendance at the birth in the surrogacy agreement; the petition may be filed in any county where the parent or surrogate resided any time after the surrogacy agreement was executed, or where the child was born or resides.

The surrogate and the intended parents must be named parties to the petition. The parties’ attorneys must certify that the surrogacy agreement meets all the requirements set forth under the applicable provisions of the Family Court Act, as described above, including compliance with as-yet unpromulgated requirements established by the commissioner of health. The petition must also include a statement from all parties that they knowingly and voluntarily entered into the surrogacy agreement and that they are jointly requesting that a judgment of parentage be entered. 

If the court finds that the agreement is substantially in compliance with the statute and that the required statements are true, it must enter a judgment of parentage. The self-executing nature of the petition means that once filed, the court has little discretion to deny a petition if all statutory requirements are met. Since the petition is essentially confirming an existing parental relationship, as opposed to transferring parentage, the court may not require parents to submit to a home study or any other requirement typically associated with adoption proceedings.

The judgment of parentage declares that, upon the birth of the child, the intended parent(s) is/are the only legal parents of the child, and that neither the surrogate, the surrogate’s spouse, nor any donor is a legal parent of the child. The judgment also orders the surrogate and/or the surrogate’s spouse to transfer the child to the intended parents if this has not already occurred, and orders the intended parent(s) to assume responsibility for the maintenance and support of the child immediately upon birth. Upon receipt of the judgment, the local registrar must report the parentage to the appropriate department of health and issue an original birth certificate.

Embryo Disposition and Posthumous Conception.

Embryo disposition agreements between former spouses or partners are permissible under the CPSA. Cryopreserved embryos are treated similarly to marital property and are divided at the time a marriage is dissolved; they may also be divided by written agreement between unmarried partners. Prior to the passage of the CPSA, New York did not provide a path for releasing a former spouse or partner from parental obligations, even if the former spouse or partner did not object to the other’s use of the embryo for conception. With the passage of the CPSA, former spouses or partners with joint dispositional control of cryopreserved embryos may enter into a written agreement to transfer sole dispositional control to the intended parent. The parties must be represented by independent counsel, and spouses may only enter into the agreement after they are divorced. Upon execution of the dispositional agreement, a spouse or partner who transfers legal rights and dispositional control of a cryopreserved embryo is not a parent of any child conceived from that embryo, unless the agreement states that he or she consents to be a parent and such consent is not timely withdrawn prior to transfer of the embryo.

Where a consenting intended parent who provided genetic material dies before the transfer of eggs, sperm, or embryos, the deceased may nevertheless be recognized as the child’s parent for the purpose of granting the child the deceased’s benefits, provided that the record complies with the estates, powers and trusts law. However, even if the deceased signed a record consenting to be a parent by assisted reproduction, he or she will not be recognized as a parent of the resulting child unless the deceased specifically consented to be a parent of the child if assisted reproduction were to occur after death.

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For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Jessica Woodrow is an Associate Attorney in the litigation and administrative proceedings practice group, handling matters involving all aspects of civil litigation with a primary practice focus on healthcare law. Ms. Woodrow has spent years studying the intersection of contract law and reproductive technology, and she is excited to be among the first practitioners in New York to assist clients in pursuing their dreams of starting or growing a family through surrogacy. She can be reached at jwoodrow@weisszarett.com or 516-627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

New York’s Novel Surrogate’s Bill of Rights Provides Unprecedented Protection for Gestational Surrogates

By Jessica Woodrow, Esq.
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This is the third installment in the four-part series 

The Child-Parent Security Act: Embarking on the Surrogacy Journey

Beginning on February 15, 2021, New Yorkers will be able to legally enter into compensated gestational surrogacy arrangements for the first time. One of the last holdout states in the country, New York legislators resisted surrogacy for years, largely out of concerns surrounding the economic disparity between surrogates and the typical intended parent(s), and the risk of exploitation. With the passage of the Child Parent Security Act, New York’s standout new surrogacy law includes the first-in-the-nation Surrogates’ Bill of Rights, codifying the strongest set of protections under any parentage statute in the country.

At the time of the consult, the surrogacy matching program must provide all parties to a surrogacy agreement with written notice of the Surrogate’s Bill of Rights (“SBR”), as set forth under the newly added Article 5-C Part 6 of the Family Court Act. The SBR effectively codifies a set of best practices, affording the surrogate robust rights with respect to health care decision-making, independent legal counsel, health insurance, medical care, life insurance, and behavioral and mental health counseling. With few exceptions, these costs must be covered by the intended parents.

Health care decisions. 

The surrogate has the right to make all health and welfare decisions regarding themself and their pregnancy, including but not limited to whether to consent to a cesarean section or multiple embryo transfer, choice of health care provider(s), whether to terminate or continue the pregnancy, and whether to reduce or retain the number of fetuses or embryos they are carrying.

While the SBR explicitly provides that the surrogate is entitled to make decisions regarding her health and welfare, including whether and when to terminate the pregnancy, questions remain as to the intended parents’ financial obligations if the surrogate declines a request by the intended parent(s) request to terminate or not to terminate. This topic should be considered carefully and memorialized in the agreement.

Independent legal counsel. 

While it is widely accepted that the surrogate is entitled to independent counsel, whether the attorneys must all be licensed in New York was somewhat contentious. Ultimately, it was determined that the parties’ attorneys must be licensed in New York and may not be affiliated, either with one another or with the licensed and registered surrogacy program that matched the intended parent(s) with the surrogate. The SBR also requires the intended parent(s) to pay the surrogate’s legal fees.

Health insurance. 

After the parties are screened by the surrogacy program and a successful match is identified, but before the surrogacy agreement is negotiated, an insurance review must be conducted to ensure there are no exclusions. The surrogate has the right to comprehensive health insurance covering preconception care, prenatal care, major medical treatments, hospitalization, and behavioral health care, not only for the duration of the pregnancy but for one year after the birth of the child, a stillbirth, a miscarriage, or termination of the pregnancy. The cost of all required health insurance coverage must be paid for by the intended parent(s), including all co-payments, deductibles, and any other out-of-pocket medical costs associated with the pregnancy; this includes all unreimbursed expenses, including appeals should coverage be denied for required care at any time while the agreement is in effect. Coverage should be in place at the time of the embryo transfer and may only be waived by the surrogate if the surrogate is not receiving compensation. The insurance coverage requirement may be complicated further as insurance carriers begin offering surrogacy-specific plans.

While the above protections guarantee the surrogate’s right to no-cost health care associated with the pregnancy, the SBR does not address pro-rata sharing of costs where the surrogate’s existing health insurance is more comprehensive than the statute requires, or where an existing policy covers individuals other than the surrogate. For example, a surrogate and the surrogate’s spouse and/or children may be covered under a family plan, the cost of which far exceeds the coverage requirements enumerated in the SBR. Under these circumstances, the attorneys for the parties must carefully negotiate fair and reasonable terms that conform to the statute without rendering the surrogacy arrangement financially untenable for the intended parents.

Mental health counseling. 

The surrogate has the right to obtain a comprehensive health insurance policy that covers behavioral health care and will cover the cost of psychological counseling to address any issues resulting from the surrogate’s participation in the surrogacy arrangement. As with the required health insurance policy, the cost of the counseling coverage must be paid for by the intended parent(s).

Life insurance. 

The surrogate has a right to be provided with a life insurance policy that takes effect prior to the surrogate’s taking any medication or commencing treatment to further embryo transfer. The policy must provide a minimum benefit of $750,000 and must extend throughout the duration of the expected pregnancy and for twelve months after the birth of the child, a stillbirth, a miscarriage, or termination of the pregnancy. The surrogate may choose the beneficiary and the policy must be paid for by the intended parent(s).

___________________________

For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Jessica Woodrow is an Associate Attorney in the litigation and administrative proceedings practice group, handling matters involving all aspects of civil litigation with a primary practice focus on healthcare law. Ms. Woodrow has spent years studying the intersection of contract law and reproductive technology, and she is excited to be among the first practitioners in New York to assist clients in pursuing their dreams of starting or growing a family through surrogacy. She can be reached at jwoodrow@weisszarett.com or 516-627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.