Welcome to our Summer 2012 edition of the Golan & Christie Newsletter. In this issue you will find several insightful and informative articles pertaining to some noteworthy current events:

As we all know, “ObamaCare” was recently upheld by the Supreme Court. Ashley Orler has written an article that explains how employers’ obligations to their employees will subsequently change.

Patent laws, and the manner in which patents are filed, have recently undergone significant changes. Beverly Berneman’s article discusses some of the changes and their effect on inventors.

If you use unpaid interns, be aware of the financial and legal risks involved.Our quarterly update “Employment Law Alerts” discusses the recent trend in lawsuits being brought by employees who worked as unpaid interns.

I hope that you will find reading this Newsletter a welcome break from our record heat. Enjoy the rest of your summer and stay cool.

-Stephen L. Golan
 Managing Partner

The Patient Protection and Affordable Care Act, commonly known as “ObamaCare,” remains intact even after the Supreme Court considered the constitutionality of some of its key provisions.

Hotly debated both before and since its passage in 2010, there likely will be more legal challenges, rules, and regulations before most of ObamaCare’s requirements for employers take effect in 2014. But as the law stands now, the significant obligations for employers under ObamaCare are summarized below.

Overview of Impact on Employers

ObamaCare’s impact on employers is largely dependent on the number of employees, whether the company offers employer-sponsored healthcare plans and, if so, the comprehensiveness of coverage offered. ObamaCare’s impact on employers with less than “50 full-time equivalent employees” (defined below) appears minimal at this time. On the other hand, employers that have more than “50 full-time equivalent employees” (defined below) may have to pay substantial penalties if they don’t comply with ObamaCare. If they haven’t done so already, larger employers should start analyzing their obligations under ObamaCare so that they are prepared by 2014.

The Exchange

By January 1, 2014, ObamaCare requires states to set-up a marketplace that will offer certain employers and individuals a choice of healthcare plans that meet coverage standards. This marketplace is referred to as an “exchange.” Only citizens and legal residents who are not eligible for Medicare, Medicaid, or an employer-sponsored healthcare plan that meets certain standards are able to participate in the exchange. Certain employees may qualify to enroll in a healthcare plan through an exchange instead of the employer-sponsored healthcare plan even though the employer-sponsored healthcare plan meets coverage standards. If the employee chooses a plan through an exchange instead of the employer-sponsored plan, the employer must issue a “free-choice voucher” to the employee equal to the amount the employer would have paid under the employer’s plan. An employer will not receive a penalty for employees who are provided a voucher. Beginning on March 1, 2013, all employers are required to provide to their employees information about the exchange in writing. The Secretary for the Department of Health and Human Services will issue regulations detailing the information employers are to provide in the notice.

Automatic Enrollment

Employers who employ more than 200 full- time employees and offer an employer-sponsored healthcare plan must automatically enroll employees into the plan unless an employee opts out of the coverage. The effective date of this requirement has not yet been set.

Only “Large” Employers are Subject to Penalties

ObamaCare does not require employers to provide health insurance to its employees. It does penalize certain employers for not providing a healthcare plan that meets coverage standards. Employers who employ less than “50 full-time equivalent employees” will not face any penalties under ObamaCare. The number of “full-time equivalent employees” is determined by adding the number of employees who work 30 or more hours per week (excluding some seasonal employees) plus a percentage of parttime employees.

Beginning on January 1, 2014, “large” employers – those that employ more than “50 full-time equivalent employees” – will be penalized if one or more of their full-time employees obtain health insurance coverage through an exchange. To determine if employees obtain coverage through an exchange, only full-time employees who work more than 30 hours per week or more will be considered. If a part-time worker obtains coverage through an exchange, the employer will not have to pay a penalty for that worker.

The Penalties

If a large employer does not have an employer-sponsored healthcare plan, the employer will have to pay an annual penalty of $2,000 for every full-time employee who obtains coverage through the exchange. Importantly, an employer will not have to pay a penalty for the first 30 full-time employees who obtain coverage through the exchange. This penalty will be adjusted annually to reflect growth in the national insurance premium costs.

If a large employer does have an employer-sponsored healthcare plan but the plan does not meet certain standards, the employer will have to pay an annual penalty of $3,000 for each full-time employee who obtains coverage through the exchange. Specifically, an employer-sponsored healthcare plan is insufficient if (1) the employee’s required contribution toward the plan premium for self-only coverage exceeds 9.5% of his or her household income, or (2) the plan pays for less than 60% of covered healthcare expenses. Again, the employer will not be penalized for the first 30 full-time employees who obtain coverage through the exchange.

Determining Employers’ Liability Under ObamaCare

Employers should count their number of “full-time equivalent employees” to determine if ObamaCare’s penalties may be applicable to them. If employers determine that they may be subject to penalties, they should consult with their accountants, attorneys, and, if applicable, health insurance providers, to weigh their potential for liability under ObamaCare with their business needs and goals.

The Leahy-Smith America Invents Act (AIA), which goes into effect on September 16, 2012, changes many of the ways in which an inventor can obtain a patent in the United States. The best way to learn about the impact of the AIA is to compare key provisions of patent law before and after the AIA.

Priority Rules:

Before: The U.S. was a “first to invent” jurisdiction. In other words, it did not matter when you filed your patent application as long as you were the first to invent it. This created a lot of litigation. Inventors had to keep copious lab notes just in case they had to prove the time-line of their inventions. Even then, the outcome was far from assured.

After: The U.S. will become a “first to file” jurisdiction. The change will apply to patent applications filed on or after March 16, 2013. This change brings the U.S. in line with the patent laws of most of the developed nations in the world.

Disputes Regarding Priority:

Before: Disputes between two inventors over which one was the first inventor were determined by an interference proceeding in the U.S. Patent and Trademark Office (USPTO).

After: Interference proceedings have been eliminated and replaced with a “derivation proceeding.” The derivation proceeding will allow a later applicant to challenge the priority of the invention. It must be instituted within one year of the first publication of the claimed invention and can have any of the following results: (1) A refusal to the issuance of claims in a pending patent application; (2) Cancellation of claims if a patent has issued; and (3) Correction of the inventorship in an application.

Prior Art:

Before: Prior art was limited to prior art in the United States.

After: Prior art will include information available or an activity occurring before the effective filing date of the patent application, anywhere in the world. This does not apply to publications by the inventor within one year of the application. The law also notably expands prior art to include foreign offers for sale and public uses.

Conclusion:

There are many more changes that include increased filing fees, patent prosecution and resolution of disputes. Having a patent can greatly increase the value of a business, so inventors should pay careful attention to the changes in the law. If you have been working on an invention, contact Beverly Berneman to help you determine if you have an invention that is worth protecting and consult with you on how to proceed.

With summer temperatures upon us, the Occupational Health and Safety Administration (OSHA) has a public awareness campaign to prevent workplace injuries related to heat. OSHA does not have a specific standard for working in heat, but, under federal law, employers have a duty to protect workers from serious hazards in the workplace, including heat-related hazards.

OSHA recommends that any employer with workers in outdoor environments: (1) provide training about the hazards leading to heat stress and how to prevent them; (2) provide a lot of cool water to workers close to the work area (At least one pint of water per hour is needed); (3) schedule frequent rest periods with water breaks in shaded or air-conditioned areas; (4) routinely check workers who are at risk of heat stress due to protective clothing and high temperature; and (5) consider protective clothing that is cooling.

Workers new to outdoor jobs are generally most at risk for heat-related illnesses. In almost half of the 25 incidents of heat-related illness investigated by OSHA in 2005, the worker involved was on their first day of work and in 80% of the cases the worker involved had only been on the job for four or fewer days.

There may be a new trend in lawsuits being brought by employees who worked as unpaid interns.

According to an article on Time.com on May 2, 2012, three interns are currently suing the high-profile companies where they had unpaid internships: Hearst Corporation (which owns Harpers Bazaar), The Charlie Rose Show and Fox Searchlight. As the article explains, “[Even] before the trio of lawsuits, the Department of Labor announced that it was cracking down on unpaid internships by ramping up efforts to educate future interns about their rights and informing employers about federal law.”

Under the federal Fair Labor Standards Act (FLSA), in order to legally employ a worker in an unpaid internship, all six of the following factors must be satisfied:

1. The internship must be similar to training that would be given in an educational environment;
2. The internship must be for the benefit of the intern;
3. The intern does not displace regular employees;
4. The employer derives no immediate advantage from the intern;
5. The intern is not entitled to a job at the end of the internship; and
6. The intern understands that he or she is not entitled to wages.

These six factors are not new (in fact, they’ve been around since the 1930’s), but according to Time.com, lawsuits by unpaid interns have been rare, “likely because former interns are worried that they’ll be ostracized in an industry in which they’re trying to work.” The three lawsuits filed in the last year seem to suggest that has changed. Employers should look at their internship and volunteer programs to avoid problems. Failure to properly classify unpaid interns can have a substantial cost, including unpaid wages for all hours worked (both straight time and overtime), unpaid employment taxes, and attorneys’ fees.

Contact Laura A. Balson or Margaret A. Gisch to learn more about these new developments regarding rules impacting employees.

Golan & Christie is pleased to announce a new addition to our extended family:

Ryan Clark Kuether joined us on Wednesday, July 18, 2012, weighing 7 pounds, 14 ounces and measuring 20 inches long.

Ryan is the third child of Golan & Christie paralegal Jason Kuether and his wife, Jenny. He joins big sisters Ava and Noelle. We wish the entire Kuether family much health and happiness.