What’s Happening Now – Technology, Small Business, Contracts – June 2013

Technology News

Health Care, Privacy and Mobile Apps. New smartphone apps make it easier to collect more and more personal information from consumers, including health care related data. The National Telecommunications and Information Agency (“NTIA”), which is part of the Department of Commerce, has started a process to develop a “code of conduct” related to mobile application transparency to protect personal data privacy. According to a recent Mobile Privacy Report, the FTC recommends that app developers have a privacy policy which is easily accessible through app stores. In addition, a bill was introduced by The Honorable Hank Johnson of Georgia on May 9, 2013, entitled the “Application Privacy, Protection & Security Act of 2013” or “APPS Act of 2013” which is intended “[t]o Provide for greater transparency in and user control over the treatment of data collected by mobile applications and to enhance the security of such data” and is now being considered in Congress. The bill’s discussion draft recommends that if an app collects personal data, the user must agree to the product’s terms and conditions. Specifically, “[b]efore a mobile application collects personal data about a user of the application, the developer of the application shall – (A) provide the user with notice of the terms and conditions governing the collection, use, storage, and sharing of the personal data; and (B) obtain the consent of the user to such terms and conditions.” Rep. Johnson has demonstrated a keen interest in privacy. Please see his press release regarding the National Security Agency’s telephone surveillance program.

Gayton Law can help you develop a privacy policy, whether you are an app developer or otherwise collect personal information from customers through your website.

Small Business News

Employee Benefits and the Affordable Care Act. Employers have until October 1, 2013 to notify employees about health care coverage options available through the “Health Insurance Marketplace” established under the Patient Protection and Affordable Care Act commonly called the “Affordable Care Act.” The new Fair Labor Standards Act (“FLSA”) Section 18B requires such notice. The requirements are detailed, but in general, the notice to employees must at minimum inform the employee of 1) the existence of the Marketplace; 2) whether the employer plan’s share of the total allowed benefit costs provided under the plan is less than 60% of such costs which may make the employee eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and 3) the possibility that the employee may lose the employer contribution to any health benefits plan offered by the employer if the employee purchases a qualified health plan through the Marketplace.

Please note that the law requires that the notice “must be provided in writing in a manner calculated to be understood by the average employee.” Gayton Law can help you draft an appropriate notice in compliance with the law.

Contracting News

Employment Applications. The Americans with Disabilities Act says that employers are not permitted to ask an applicant medical questions until the employer has offered a conditional offer of employment. In a recent case, decided on March 29, 2013, a 3rd Circuit Court said that because an employee made false statements on an employment application regarding drug use, an employer had legitimate and non-discriminatory grounds to fire the employee. Reilly v. Lehigh Valley Hospital, No. 12-2078, (3rd Cir. March 29, 2013). In this case, the former employee, Robert Reilly, brought a lawsuit against his former employer, Lehigh Valley Hospital (“LVH”) asserting that it violated the ADA by disclosing his medical records to the human resources (“HR”) department. Reilly was employed by LVH as a part-time Security Officer. When he was offered the job, he completed and signed an employee health information form as part of the hiring process. The form included two alcoholism and drug addiction questions. In addition to answering “no” to these questions, there was a note on the form indicating that Reilly denied drug/alcohol addiction. The form also said that falsifying information “could result in withdrawal of the employment offer or if subsequently discovered termination of [his] employment.” When Reilly was admitted to the hospital to receive treatment for a work-related injury, he disclosed to the treating doctor that he had a history of drug use and that he was a recovering drug addict. This information was included in a clinical report which was submitted to LVH’s HR department. He was fired for falsifying his employment form. Reilly brought a lawsuit against LVH for violating the ADA and a corresponding Pennsylvania law. The District Court granted summary judgment in favor of LVH regarding Reilly’s claims that LVH’s firing was discriminatory. The District Court determined that LVH’s decision to terminate Reilly was founded on a non-discriminatory reason – falsifying information on the employment form – and, and therefore, permissible. Reilly appealed the District Court’s decision to the United States Court of Appeals for the Third Circuit claiming that the District Court erred in its decision. The Third Circuit determined that the District Court did not err and affirmed its decision.

This case was decided in the Third Circuit and would not be applicable in any other jurisdiction. However, this case is instructive for purposes of advising employers that they should ensure that their employment-related forms are not discriminatory or in violation of the ADA. Please contact Gayton Law with any questions about employment application forms and employee-related documents.

Recent Publications

The “Guide to Creating and Protecting Fictional Characters” by Cynthia Gayton was released in May 2013 and is now available on Kindle. Here is an excerpt:

“This is an exciting time to be a creative in any enterprise. You can develop stories, illustrate and publish your work with great speed and minimal expense. Doing things on your own is both liberating and inhibiting. Yes, you can do it all – from start to finish, the product, distribution, display, advertising and promotion are all controlled by you. On the other hand, it could be a problem that all these things are controlled by you. Do you have the skills necessary to bring your product to market, including the knowledge to protect your creations?”

In March 2012, Kendall-Hunt publishers released the 9th edition of Legal Aspects of Engineering by Cynthia Gayton. This book is used in several engineering courses and is a useful reference for anyone interested in contracting, intellectual property, engineering practice, and other general legal issues.

Thank you for reading!

The information contained in this post is for general guidance on matters of general interest only. The application and impact of laws can vary widely based on specific facts. The information contained in this newsletter should not be construed as a substitute for consultation with professional advisors. Certain links in this post connect to other websites maintained by third parties over whom Gayton Law has no control. Gayton Law makes no representations as to the accuracy or any other aspect of information contained in other websites.

© 2013 Gayton Law


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