The Pitfalls of Lawyer Advertising

By: Jarrad Wright

When the U.S. Supreme Court decided the seminal case of Bates v. State Bar of Arizona, 430 U.S. 350 (1977), that held that lawyer advertisements were protected by the First Amendment, it would have been hard to imagine our modern world where television, print and online advertisements from lawyers inundate audiences. Today, audiences routinely are exposed to lawyer advertisements in topics that range from taxes to personal injury to mass tort litigation, and everything else in between. The exponential growth of lawyer advertisements have also caused an equally expanding and changing array of restrictions on those advertisements from state legislatures, bar associations, and courts. This field is every changing and lawyers must tread carefully to ensure that they do not overstep their bounds.

Recently, in Recht v. Morrissey, 32 F.4th 398 (4th Cir. 2022), the Fourth Circuit Court of Appeals reversed the district court and upheld West Virginia’s new law restricting what can be said in lawyer advertisements involving pharmaceutical products. West Virginia and other states, including Texas and Tennessee have enacted various limitations on what can be and cannot be included when a lawyer advertises in cases involving prescription drugs. In the case of the West Virginia statute, advertisements were restricted from using the phrases “consumer alert” or “health alert”. In addition, the state statute limited the use of the word “recall”. Specifically, the statute only permits the use of the word “recall” in the pharmaceutical context when a product had actually been ordered recalled by a government agency or was being recalled by agreement between a manufacturer and a government agency. As such, the term cannot be used when addressing voluntary recalls. The purpose of the statute is to prevent consumer confusion as the average consumer may not be aware of such distinctions. Similarly, the statute prohibits lawyer advertisements to include the logo of a government agency to prevent consumers from believing that the law firm is endorsed by such an agency. Finally, the statute requires advertisements to contain a warning that people should not discontinue using prescribed medications without first consulting with a doctor.

While the district court granted summary judgment on the grounds that such consumer protections violate an attorney’s free speech rights under the First Amendment, the unanimous Fourth Circuit disagreed. The Fourth Circuit explained that the Supreme Court’s strict scrutiny standard is “improper when reviewing laws that regulate commercial speech” and that instead intermediate scrutiny applies to such commercial speech.  Intermediate scrutiny requires a determination that the expression is generally protected by the First Amendment, but “for commercial speech to come within that provision, it at least must concern lawful activity and not be misleading.”  Recht, 32 F.4th at 408 (quoting Central Hudson Gas & Elec. Corp. v. Public Ser. Comm’n of N.Y., 447 U.S. 557, 566 (1980)). Next, the court will look to whether a governmental interest is substantial.  If so, the question becomes “whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.” Id. Importantly, the government is not required to use the least restrictive means possible, but a court will consider their reasonableness. In Recht, the Fourth Circuit found that the restrictions were not unreasonable and that they advanced a significant government interest. As such, the restrictions on commercial speech where allowed.

Similar regulations in other jurisdictions are likely to spread in the pharmaceutical context and perhaps to other issues of public interest in which lawyers advertise. The historical trust the public has had in lawyers means that bar associations and legislatures will for the foreseeable future impose regulations and rules on lawyer’s commercial speech whenever there is a perception that the public’s trust could be compromised. Accordingly, it is important for firms to regularly check the current status of such regulations, statutes, and ethics opinions concerning each industry and in each jurisdiction that they operate. The rules concerning lawyer advertising have continued to evolve with communications.

The professionals at DiMuroGinsberg, P.C. have decades of experience advising clients about the changing legal ethics environment, including advertising issues. If you’d like to know more about this subject, contact Jarrad Wright at jwright@dimuro.com.

Gender Dysphoria May Be an ADA Disability

By: Jonathan R. Mook

The rights of transgender persons have become a hot button issue not only in schools and sports but in the workplace as well. Recently, the U.S. 4th Circuit Court of Appeals (whose rulings apply to employers in Virginia, Maryland, North Carolina, South Carolina, and West Virginia) weighed in on whether a transgender woman, who suffered from gender dysphoria, was protected under the Americans with Disabilities Act (ADA). With the decision, the 4th Circuit became the first appellate court in the country to rule that gender dysphoria may constitute an ADA disability.

Williams’ ADA lawsuit

Kesha Williams—who has gender dysphoria and was serving time in the Fairfax County, Virginia, jail—asked to obtain the hormones she had been prescribed to treat her disorder. The jail inquired whether she’d had genital surgery, and when it learned she had not, it moved her from the part of the jail for women to the part reserved for men. While housed with the male prisoners, she claimed she was harassed and denied consistent hormone treatment.

Williams filed suit in the U.S. District Court for the Eastern District of Virginia against Stacey Kincaid, in her capacity as Fairfax County Sheriff. In her lawsuit, Williams invoked the provisions of the ADA that prohibit state and local governments from discriminating against disabled individuals, including those who are incarcerated in local prisons or jails.

The district court dismissed Williams’ ADA claim, reasoning that her gender dysphoria constituted a “gender identity disorder not resulting from physical impairment,” which is specifically excluded from the statute’s protections. She appealed the dismissal of her lawsuit to the 4th Circuit, and a split three-judge panel reversed the lower court.

4th Circuit’s ruling

In a precedent-setting decision, the 4th Circuit became the first federal circuit court to hold that gender dysphoria is not excluded from the ADA’s protection. The majority opinion was written by Circuit Judge Diana Gribbin Motz and joined by Circuit Judge Pamela Harris. Circuit Judge A. Marvin Quattlebaum, Jr., dissented with respected to the majority’s analysis of Williams’ ADA claim.

In her opinion, Judge Motz noted that “gender dysphoria” is a mental condition first recognized by the American Psychiatric Association (APA) in 2013, long after the ADA was enacted into law with the exclusion for “gender identity disorders not resulting from physical impairment.” She also noted that gender dysphoria focuses on the clinically significant distress of transgender individuals, not on being transgender itself, which is the focus of gender identity disorder. Hence, she reasoned that “nothing in the ADA, then or now, compels the conclusion that gender dysphoria constitutes a ‘gender identity disorder’ excluded from ADA protection.”

Given the scientific advances in understanding the causes of gender dysphoria, Judge Motz also found that Williams had alleged sufficient facts “to render plausible the inference that her gender dysphoria ‘result[s] from physical impairments’” such as a hormone imbalance. It was significant that Williams had alleged the medical treatment for her gender dysphoria “consisted primarily of a hormone therapy,” and that she had received the medical treatment for 15 years.

Finally, Judge Motz’ majority opinion concluded that to interpret the ADA as foreclosing coverage of gender dysphoria could constitute discrimination against transgender persons as a class and raise “a serious constitutional question” about the violation of the equal protection clause of the Fourteen Amendment. As the majority’s opinion explained, “a transgender person’s medical needs are just as deserving of treatment and protection as anyone else’s.”

Accordingly, on these three separate and independent bases, the panel majority reversed the district court’s dismissal of Williams’ ADA claim and sent the matter back to the lower court for further proceedings.

Vigorous dissent

In his dissent, Circuit Judge Quattlebaum adopted an originalist interpretation of the statute and emphasized, “our focus must be on what gender identity disorders meant in 1990,” not on the APA’s updated definition from 2013.

Judge Quattlebaum reasoned that at the time the ADA was enacted, the meaning of gender identity disorders included gender dysphoria. Hence, “under basic principles of statutory construction,” he opined that Williams’ ADA claim should be dismissed. Williams v. Kincaid, 2022 U.S. App. LEXIS 22728 (4th Cir., Aug. 16, 2022).

Impact of Williams’ decision

Because the 4th Circuit’s Williams decision is the first federal circuit court ruling on whether gender dysphoria is excluded from ADA coverage, and because it answered “no,” the decision constitutes a landmark ruling in recognizing the legal rights of transgender individuals.

Although the 4th Circuit’s decision binds lower courts only within its jurisdiction, Williams certainly will be influential elsewhere and, undoubtedly, will be cited as the leading case in future litigation involving ADA coverage of transgender persons. Also, should other circuit courts disagree with the 4th Circuit majority’s analysis, the question of whether gender dysphoria comes within the ADA protections may well need to be answered definitively by the U.S. Supreme Court.

Addressing transgender issues

The Williams decision clearly signals that now is the time to start planning how best to address the myriad issues that will arise should gender dysphoria be generally recognized as constituting an ADA disability. Because the Act prohibits employers not only from terminating or refusing to hire a disabled individual but also bars discrimination in all aspects of the employment relationship and requires reasonable accommodation, you need to be attuned to the full panoply of rights transgender employees may have under the ADA.

Thus, employees with gender dysphoria may have the right under the ADA to use restrooms and locker rooms that correspond to their gender identity, as well as wearing uniforms or other clothing that matches their gender identity. Accommodations persons with gender dysphoria might seek also include leave for treatment of their disorder or a flexible work schedule.

You especially should be attuned to potential harassment of transgender employees because harassment based on a person’s disability violates the ADA. Finally, issues involving coverage for gender transition operations and other types of medical care have been percolating in the courts. If your employee health plan categorically excludes gender transition treatment for gender dysphoria, ADA claims may arise as well.

Confronting these issues may be fraught with controversy because the status of LGBTQ individuals in our society has become so politicized. Whatever stance you take in dealing with these matters likely will be the subject of scrutiny and debate. Accordingly, you are well advised to consult with experienced employment counsel to ensure that whatever decisions you make pass legal scrutiny.

 

Virginia adopts modest maternity benefits for employees

By: Jonathan R. Mook

Although many jurisdictions, including the District of Columbia and Maryland, have taken steps to mandate employers to provide paid leave, including maternity leave, Virginia has adopted a more modest approach with respect to paid leave following childbirth.

What is required
Virginia’s approach focuses on insurance companies and requires that their short-term disability (STD) policies include provisions for maternity leave coverage. Thus, for Virginia employers that choose to provide STD coverage, it now will include disability coverage that arises out of childbirth. More specifically, STD policies that were delivered or issued for delivery in the Commonwealth by an insurer on or after July 1, 2021, must provide a maternity benefit of at least 12 weeks following childbirth.

Not every employee who gives birth, however, will be entitled to the STD maternity benefit. That’s because the employee must meet the current definition of disability outlined in the employer’s STD plan. Additionally, some pre-existing condition limitations of the STD plan may apply to the new maternity benefit. For example, when an employee is within the pre-existing condition limitation of the employer’s STD plan, the maternity benefit won’t be available. An STD plan’s elimination period cannot be used, however, to reduce the mandatory 12-week maternity benefit.

Requesting information
Because STD policies vary depending upon the insurer, Virginia employers should request information from their STD carrier on changes in the policy language for the new maternity leave requirement. You also should ask the carrier whether it will require employees seeking maternity benefits to obtain medical documentation stating they are disabled and unable to return to work for up to 12 weeks.

Some insurance carriers may not require documentation, but if that’s the case, you likely will see an increase in the cost of your STD policies.

What employers should do
There are two important steps that Virginia employers should take in light of Virginia’s maternity disability requirement.

First, employers that have STD plans should contact their insurance carrier to make sure their plan, as well as all policy documents, are accurate and up to date and reflect the Virginia law requiring maternity benefits to be offered.

Second, you should review your current leave policies to make sure they reflect any STD benefits that are available to employees, including STD benefits for maternity leave following childbirth. Assuming you have STD benefits for your employees, make sure the duration of your leave plans conforms to the STD benefits available.

Bottom line
At the present time, employers across Virginia are competing to hire new employees as well as adopting policies to retain their existing workforce. Accordingly, don’t forget to let job applicants and existing employees know about any STD benefits for childbirth that now are available due to Virginia’s new law. This is a benefit that may well prove to be significant to both job applicants and employees alike.

So, You Think You Are Going to Be Sued? – Don’t Throw Anything Out

By: Jarrad Wright

As all business owners know, litigation can happen at any time and often where you least suspect it. While good planning and policies can reduce the chances of litigation, it is impossible to predict and prevent every possible scenario. What should you do when litigation becomes a real possibility? Besides calling able counsel, one of the first things a lawyer will tell clients to do is to preserve all documents potentially related to the matter. However, in today’s age of cloud computing, disposable devices, and social media, this can be harder than it sounds.

The duty to preserve documents begins when one reasonably anticipates litigation, and courts have imposed stiff sanctions, ranging from fines to adverse jury instructions, for failing to preserve documents. So, before litigation begins it is important to preserve everything for discovery. This includes paper files, emails, social media accounts, telephones, electronic documents, databases, and servers. While often seen as a business interruption because of the time and cost, preserving documents early on will assist your lawyers in getting ahead of discovery and in many instances becomes the key to preserving valuable communications that could win your case as well as preventing sanctions.

Many larger to middle sized companies have document preservation policies in place, but these policies are often absent in companies that do not have significant litigation experience. Whether or not a written policy exists, it is imperative for a company or individual to quickly determine where potentially relevant documents may be located and how to stop any automated procedures in place that could potentially delete or destroy those documents. Many information technology systems have automatic deletion mechanisms that need to be identified and stopped. Likewise, mundane tasks such as upgrading a smart phone can becoming a liability if the evidence is not properly preserved before getting that new phone. Knowing precisely what needs to be preserved is key and conversations with experienced counsel early in the process will help identify key witnesses and documents. Experienced litigation counsel can locate specialized experts to preserve complicated databases. That said, a business even before hiring counsel can improve its situation by taking issues directives to not delete emails and to preserve all handwritten notes. Remember that when the threat of litigation suddenly arises, taking active steps to put yourself or your business in the best position is necessary. If you’d like to discuss this further, contact Jarrad Wright at Jwright@dimuro.com.

DiMuroGinsberg, P.C. has decades of combined experience in handling document preservation and spoliation cases and is knowledgeable in all aspects of these matters.

“It’s Déjà Vu All Over Again”

By: M. Jarrad Wright

After the most recent special General Assembly session. Virginia employers, employees and citizens understanding of what will happen with Virginia’s marijuana and cannabis rules have no new clarity. As Yankees Hall of Famer Yogi Berra once said, “it’s déjà vu all over again.”

Weren’t We Supposed to Learn More About How Selling Pot Will Work?
On July 1, 2021 Virginia became the first state in the southern United States to permit recreational marijuana. While the legalization was permanent, the mechanisms setup by the General Assembly to regulate sales, to regulate licenses, and the taxing scheme is not permanent. Those provisions required reenactment from the legislature, but since that time the Commonwealth of Virginia has elected a new Republican Governor and a Republican House of Delegates. Going into the General Assembly session, there was a lot of discussion as to how a new marijuana market would be established including who would get licenses to manufacture, how the taxes would be allocated, and who would be prioritized to get dispensary licenses. At the end of the regular session, the Democrat controlled Senate had passed a bill but the Republican controlled House took no action. In effect, all of the negotiation and speculation was for naught, and Virginia companies and citizens were left where they started – guessing what the ultimate regulatory scheme would be.

What About the Changes To Cannabis Products?
Although procedurally different, a similar result has occurred with respect to cannabis products sold throughout Virginia that contain the chemical Delta-8. During the general session, the Republican House and the Democrat Senate actually came together and overwhelmingly passed a bill that redefined Delta-8 as marijuana, which would have made it illegal for non-licensed stores to sell Delta-8 products. The bill was the result of lawmakers’ concerns that children were being specifically targeted and marketed cannabis products. As such the bill began by banning the retail sale of products that depict or are in the shape of a human, animal or vehicle, as they may be appealing to children. After receiving the bill, Republican Governor Youngkin, proposed amendments to create two new intermediate misdemeanors for possession over the legal limit of one ounce. Initially, the Democrat Senate voted to reject the Governor’s proposed amendments with the new Republican Lieutenant Governor casting the tie breaking vote. However, later Senate re-voted and decided to send the bill back to committee. Therefore, despite originally being passed with overwhelming support, the cannabis bill is no longer moving forward at this time and the Virginians are back where they started the year.

Ok, So What Now?
For cannabis, it means that for the time being the Delta-8 products that are sold throughout the nation can still be sold in Virginia. That said, the legislature did originally pass the measure with overwhelming support, so some regulation next year should be expected even if it is just the shapes measure.

For marijuana, the current legalization of possession under one ounce remains but important regulatory and employment issues remain undecided. Basic questions about the ultimate legal resell market such as what taxes apply, who can grow and who can sell are unknown. The original marijuana legislation included a reenactment clause requiring the General Assembly to affirmative revote in favor of the regulatory and taxing rules. Legal marijuana sales are not scheduled to being until January 2024. Both sides have nominally said that they agree with such sales, but the divide on the way to do it is large. New General Assembly election will not occur until November 2023. So, it is possible that the General Assembly will wait to act until a new chamber is formed, but such a delay would not give the regulators and government officials on the ground enough time to meet the January 2024 deadline for retail sales.
Finally, there are a lot of important questions for Virginia employers that have not been answered. For example, the marijuana law as currently enacted does not address legal issues such as whether or not a work place in Virginia can be required to be drug-free or whether an employer can mandate drug testing. Under current law employers can maintain drug testing policies for marijuana, and current Virginia law generally allows employers latitude in setting policies that allow them to test and to fire employees for legal drug use outside of working hours. On a practical level, this can be difficult in a state where marijuana use is legal and since marijuana can be detected in the body for a long time after use. Virginia has a medical cannabis oil law that prohibits Virginia employers from discharging or disciplining employees for the lawful use outside of the workplace of medical cannabis oil “pursuant to a valid written certification issued by a practitioner for the treatment or to eliminate the symptoms of the employee’s diagnosed condition or disease.” But for marijuana there is not similar clear statement of law to guide employers.

Local Counsel: Your Secret Weapon Or The Critical Importance of Local Counsel

By: M. Jarrad Wright

Hiring local counsel should never be an afterthought in litigation. Local counsel should be more than an automatic stamp on pleadings and a means to an end of filing pleadings in a local court. Knowledgeable and capable local counsel can make a significant contribution to the successful outcome of a case. That’s because good local counsel can provide valuable insight into a judge’s inclinations, standing orders, prior decisions and memorandum opinions that may be relevant but hard to locate. Local guidance also can provide guidance on the local rules and the unwritten local practices that can make litigation proceed in a smoother fashion without last minute surprises.

This particularly is true in a jurisdiction like the Eastern District of Virginia, which has the distinction of being the fastest federal district court in the country. Commonly referred to as the “Rocket Docket,” the Eastern District of Virginia moves at a speed that is uncommon in litigation. For example, discovery motions, including complex and momentous discovery disputes, are fully briefed and argued in one week’s time. Experienced Rocket Docket local counsel will alert primary counsel to the deadlines and nuances in the local rules that dramatically speed up a case and, then, will work to ensure that nothing slips through the cracks as the rocket speeds along.

Retaining knowledgeable local counsel also is particularly important in Virginia state courts, where local rules may not be as robust, but where the quirks of local practice still exist. Having counsel knowledgeable about filing requirements and the court’s preferences can eliminate delays and other problems that prevent a successful presentation of a case.

Knowing local procedures, however, are not the only value that good local counsel offer. Local counsel can provide valuable intelligence on the jury pool because they live in the community and interact with the people there on a daily basis. Knowing where potential jurors live and how different communities feel is critical in jury selection. Indeed, even the most logical and straightforward case can be lost if the jury goes rogue. Knowing people, neighbors, and neighborhoods is a valuable insight that is often overlooked.

The attorneys at DiMuroGinsberg, P.C. have been practicing law in the northern Virginia area for decades and have a wealth of experience in litigating civil and criminal cases in state and federal courts in Virginia, including the Rocket Docket, both as primary and local counsel. If you are or will be litigating a case in Virginia, please feel free to contact us to learn more about the numerous ways in which DiMuroGinsberg may be able to assist you in the litigation.

Virginia Cracks Down on Employers Misclassifying Employees as Independent Contractors

As reported in an article by Jayna Genti in an earlier issue of DGRead, in 2019, then Virginia Governor Ralph Northam issued an Executive Order calling for an inter-agency task force to make recommendations on how to address the problem of companies in Virginia misclassifying their employees as independent contractors. During 2019-2020, legislation was introduced at the federal level and in at least 20 states to deal with this issue. The Virginia study results were issued in November 2020 and revealed that about 214,000 Virginia workers were misclassified as independent contractors, and this alone was costing the Commonwealth approximately $28 million in tax revenues each year.

Virginia’s New Law
In response to the task force’s recommendations, the Virginia General Assembly passed legislation in 2020 to deter companies from misclassifying their employee and penalizing those employers that have misclassified their workers. Then Governor Northam signed the legislation into law, which took effect January 1, 2021.

As set out in DGRead, the new Virginia misclassification law has some real teeth. Businesses that improperly treat their employees as independent contractors are now subject to a fine of up to $1,000 per worker for a first offense. Maximum fines will increase to $2,500 per misclassified individual for a second offense, and up to $5,000 per misclassified individual for a third or subsequent offense.

This legislation also carries the potential for companies violating this law being prohibited from being awarded public contracts. Employers that misclassify workers can be debarred for up to one year for a second offense and up to two years for a third offense. The legislation further requires the Virginia Department of Taxation to share information to help with enforcement.

Criminal Actions to Enforce the Law
To implement the new law, the Attorney General’s office set up a Worker’s Protection Unit to work with the Office of the State Inspector General, and the state first took action under the new legislation in October, 2021. The action was brought against building drywall subcontractors who were working on major construction projects in Virginia, including the building of the new Virginia General Assembly Building. Former Virginia Attorney General Mark Herring empaneled a multi-jurisdictional grand jury that returned charges against several companies, including GTO Drywall and Richmond Drywall Installers, for misclassifying workers as independent contractors rather than as employees allegedly in an effort to avoid paying taxes.

Each company was ultimately charged with ten counts of felony embezzlement. In December 2021, Richmond Drywall pled guilty to five counts of felony embezzlement and the other five counts were nolle prossed. In February, 2022 under the new administration, GTO Drywall pled guilty to five felony counts and the other five counts were similarly nolle prossed. Each company was eventually fined $2,500 for each guilty finding, plus court costs and restitution to the Virginia Department of Taxation for the unpaid taxes.

Civil Actions by Workers
But that is not where the enforcement efforts ended. Enforcement of the Virginia misclassification laws are not limited to the Commonwealth bringing a criminal action. Workers affected by their misclassification may bring a civil action for lost wages under federal and state law, which include penalties, such as trebling the damages if proven. In October 2020, laborers working for some of the same drywall subcontractors, and others, filed a class action in federal court claiming that they were improperly classified as independent contractors instead of as employees. They filed under the Virginia statute as well as the federal Fair Labor Standards Act (“FLSA”). See Moran, et. al. v. Agent Wall Sys., Inc. et. al., Civil Action 3:20-cv-00823- (E.D. Va. October 22, 2020). The laborers had been hired through various labor brokers, but claimed they should be considered employees of both the labor broker and the drywall subcontractor.

In December, 2020, a second group of laborers working for another subcontractor brought almost identical claims in Richmond federal court under the Virginia and the federal misclassification provisions. See Rosales, et. al. v. Capital Interior Contractors, Inc., et. al., Civil Action 3:20-cv-00916 (E.D.Va. December 1, 2020). The laborers claimed, among other things, that the subcontractor failed to pay them overtime constituting a violation of the Virginia Wage Payment Act, which would permit them to recover up to three times the amount of unpaid overtime. In January, 2022 the Rosales case settled. The defendant companies agreed to pay the Primary Group in the class action two times the amounts of alleged underpaid wages that Plaintiffs’ counsel had calculated for each participating class member, plus an additional $400 for each Plaintiff. In addition, defendants agreed to pay $86,000 for Plaintiffs’ attorney fees.

Making the Right Decision
As evidenced by the above referenced criminal and civil cases, the fallout for misclassifying an employee as an independent contractor can be substantial. Employers not only need to be concerned about federal laws prohibiting such practices; it is now clear that Virginia law similarly prohibits such practices. Wage and tax theft statutes are now in place in Virginia that are designed to compensate victims and incentivize employers’ compliance with lawful wage payment practices.

Determining whether a potential hire is an employee or an independent contractor is not always clear cut. Employers in Virginia should consult with experienced legal counsel in making their employment related decision as to how to properly classify their workers as employees or independent contractors. A wrong decision can result in criminal and civil liability.

Virginia Abandons ERA

By Jonathan R. Mook

Two years ago, the Democratically controlled Virginia General Assembly ratified the Equal Rights Amendment (ERA). In doing so, Virginia became not only the 38th state to endorse the amendment, but also the final one to satisfy the required 2/3 majority needed to amend the U.S. Constitution. Virginia’s ratification, however, did not necessarily mean that the ratification was effective. That’s because Congress established a 1982 deadline for the ERA’s ratification to occur.

Virginia Joins ERA Lawsuit
To clarify the matter, Virginia joined two other states (Nevada and Illinois) in filing suit in the U.S. District Court for the District of Columbia, contending that the deadline set by Congress wasn’t binding and seeking to compel the U.S. Archivist to certify the ERA as the 28th Amendment to the Constitution. The district court dismissed the lawsuit last year, but the states appealed the dismissal to the District of Columbia Circuit, where it presently is pending.

Last fall, however, a sea change occurred in Virginia’s political landscape when Republican Glenn Youngkin won the Governor’s race along with Republican Lieutenant Governor Winsome Earle-Sears and Republican Attorney General Jason Miyares. Significantly, in 2020, Attorney General Miyares had a been a member of the Virginia House of Delegates, and he had voted against ratification of the ERA.

Virginia Bales Out
Given Attorney General Miyares’ view, it should have come as no surprise that he now has asked the D.C. Circuit to dismiss Virginia as a party to the pending ERA lawsuit. Miyares’ position is that the district court correctly dismissed the lawsuit, and any further participation in the lawsuit would undermine the U.S. Constitution and its amendment process. Although the appeal is being pursued before the D.C. Circuit by the two remaining states, Virginia’s withdrawal from the case certainly is not a good omen for a positive outcome for the ERA. Instead, the likely outcome appears to be “RIP.”

Virginia’s New Battle Over Minimum Wage

Virginia’s General Assembly 2022 session is now well underway, and the election result’s impacts on businesses is beginning to take shape. While the legislature has focused in large part the politically charged debates regarding parents’ rights regarding masks in schools and the need for masks during the pandemic, there have been other business-oriented bills that have advanced that are equally contentious.

For example, the prior General Assembly, which was then controlled by the Democrats, voted to increase Virginia’s minimum in January 2022 to $11 per hour and voted for subsequent increases thereafter until 2024. In this session, Republican members of the House of Delegates, which is now controlled by the Republicans, introduced a bill to freeze any minimum wage increases at the current $11 per hour figure. That bill recently passed the House of Delegates. However, the Senate, which is controlled by the Democrats, recently rejected a similar bill and are expected to reject the bill from the House of Delegates. Similarly, in another example, when the Democrats controlled both chambers they passed legislation that allowed local governments to engage in collective bargaining with local unions, which had previously been banned for government entities. The new House of Delegates has passed a measure to effectively repeal such legislative, while the state Senate has blocked such legislation. In other words, divided government is now the norm in Virginia and dramatic policy swings are unlikely.

That said, Virginia businesses still need to carefully monitor developments. The Democrats have a one seat advantage in the Senate and cannot lose a single senator for any reason because the new Republican Lieutenant Governor Winsome Earle-Sears can break any ties in favor of the Republicans. The school masking issue is advancing in the Senate because of a few democrat cross over votes.

In many ways, the current environment in Virginia mirrors the larger national environment in the U.S. Senate in which the party nominally in charge has at times found that a divided Senate means exercising control is harder than party members think it should be. Indeed, the recent stroke suffered by New Mexico U.S. Senator Ben Ray Luján is forcing capital hill leadership to rearrange votes and could impact the timing of U.S. Supreme Court confirmation hearings.

For the time being, in Virginia, changes to the minimum wage law and collective bargaining are unlikely, but the close margins in the Generally Assembly means that sickness, death, or simply disagreement from one member could change results or control on any number of issues. Businesses and citizens should therefore carefully monitor the situation in Richmond between now and the next state elections in 2023.

General Assembly Guts 2021 Overtime Wage Act

In 2021, the Virginia General Assembly passed the Virginia Overtime Wage Act which expanded the state’s overtime requirements beyond those set forth in the federal Fair Labor Standards Act. This change in law increased the statute of limitations for bringing a claim, an important change in the calculation requirements for overtime pay, and new penalties for employers that do not pay the proper amount.

However, the recent elections resulted in a new General Assembly that has undone these recent changes. During the last legislative session, the House of Delegates and the State Senate both considered and adopted identical bills that effectively repelled the 2021 law. Thirty-two senators and fifty-eight house members from both parties agreed to essentially reinstate the old law.

What’s Changed?
If signed by the Governor, a large section of Virginia Code § 4.01-29.2 that provided for the enhanced employer liability will be stricken and instead, liability will only result from violations of the federal Fair Labor Standards Act. Likewise, the provision for the three-year statute of limitations has been removed in favor of the former two-year statute, and the overtime calculations has been reset to the same as those in the federal act. In addition, the new law has restored the good faith defense that is part of federal law and functions as an escape hatch for employers that make good faith mistakes by allowing courts not to award liquidated damages or an amount that exceeds the lost wages.

Power Of Elections
While other issues such as collective bargaining and minimum wage changes were rejected by the General Assembly, the reversal of this Overtime Wage Act in such as short span of time is a testament to the power of elections. Moreover, Virginia businesses will to have to re-evaluate their business practices again in short order, and employees with lost wage claims will find pursuit of those claims harder in the future.