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Law Firms Continue March On Stock Market As Taylor Rose MW Explores Float

Top 60 UK law firm Taylor Rose MW is eyeing a 2022 float, its boss says, as  an “arms race” continues in the legal sector.

An initial public offering is “an active consideration” for the firm, chief executive Adrian Jaggard told Financial News.

“We are actively looking at third-party investment to continue our growth journey,” he said. “To continue that journey, or to do it justice, we are looking at our options in terms of investment. The obvious is debt or equity, both are under consideration at the moment and that includes an IPO.”

Jaggard said the firm was looking for investment within the next 12 months, and said it was a “possibility” that the firm could be publicly traded by this time next year.

Taylor Rose is being advised by broker Arden Partners, which acted on the float of law firm Ince in 2017. It is also working with financial public relations agency SEC Newgate, which boasts of its “award-winning capital markets team” on its website.

Consumer law firm Taylor Rose snapped up struggling rival McMillan Williams in May 2020 in a pre-pack administration deal.

Jaggard said the firm generated revenue of £70m and earnings before interest, taxes, depreciation, and amortisation “north of £8m” in the year ended 30 September.

That revenue figure would have put the firm within the top 60 largest law firms in the UK last year, according to The Lawyer magazine’s rankings for 2019-20.

The firm has around 500 employees and 350 fee-earning consultants, a spokesperson said.

Its consultants are self-employed lawyers who retain an average of 70% of their billings, with the remainder taken by the firm. The firm said its consultants division had more than doubled its headcount in the last year and was increasing that number by 15-20 lawyers per month.

The move comes as law firms across the City eye up going public in a bid to expand in a fiercely competitive market. Up to a third of law firms are considering floating in the next 12-18 months, according to a recent survey from litigation funder Harbour.

London litigation powerhouse Mishcon de Reya said in April that it had appointed JPMorgan to advise on a float that could value the firm at up to £750m.

Personal injury firm Irwin Mitchell is also working on a listing with Rothschild, according to Sky News, that could value the firm at £500m.

A spokesperson for Irwin Mitchell said: “We have taken no decision to introduce external investment and our balance sheet remains strong.”

The listed legal model in England is still a nascent one, with Birmingham-headquartered firm Gateley’s 2015 float the first in the sector after the Legal Services Act 2007 allowed non-lawyer ownership of law firms in England and Wales for the first time.

Keystone, Knights, Rosenblatt, Ince and DWF have all since floated in London.

Jaggard said part of the rationale for the firm seeking outside funding was to invest in technology.

“There is an arms race going on with technology and systems,” he said. “There is a lot of opportunity to improve efficiency, improve risk control and improve interfaces and communications with the clients.”

“When clients are dealing with their lawyer, they are not benchmarking us against other lawyers, they are benchmarking us against interfaces with banks, insurers and customer services from John Lewis. There is an opportunity for us as an industry to up our game there,” he added.

Jaggard said the firm was also looking to grow through mergers and acquisitions and said the firm was in “early stage talks with one or two firms”.

Major Western Region Leasing Markets Predictions and Updates

A panel of commercial real estate leasing experts shared their predictions and updates for major Western region markets at the 14th Annual View From the Top. Panelists included Jeffrey Welch, Executive Vice President of CBRE; Christopher T. Roeder, Executive Managing Director of JLL; David Sternberg, Executive Vice President of Northern California & Mountain Regions of Brookfield Properties; and David Abbot, Executive Vice President of Colliers. The panel was moderated by Allen Matkins partner Tony Natsis.

The panelists agreed that the number one priority at the moment is getting people back to work in the office—a sentiment also shared by tenants and property owners. Overall, the outlook remains positive in the leasing market.

LOS ANGELES

Los Angeles saw the second-lowest occupancy in the country during the COVID-19 pandemic. The massive 235 million square foot market has seen rents increase in five of the last six quarters despite the fact that the city has been shut down for the last 18 months and vacancy rates are as high as 40%. Driving the rent increases are 12 million square feet of new space scooped up by the tech industry.

There have been pockets of activity in Culver City, Burbank, and Hollywood mostly related to the booming techtainment industry in the area. Demand for entertainment has remained high, increasing the need for soundstages and the like.

In contrast, the downtown Los Angeles market has been stagnant, as the companies that traditionally occupy those spaces have stayed home. These finance, real estate, and insurance companies continue to perform well, but there is some speculation that they will need less space after the pandemic ends.

Across all markets in the Los Angeles area, concessions are at all-time highs. There is no indication that these concessions will fall or rental rates will drop in some of the less popular areas. Moving forward, landlords and tenants are looking for flexibility and efficiency. Flexibility is key, as tenants may not know exactly what they need until they get everyone back in the office and are able to see how they want to use their space.

SAN FRANCISCO

San Francisco was significantly impacted by the COVID-19 pandemic as the city shut down. Occupancy rates and public transportation ridership were the lowest in the country. Vacancies reached 20%. With a high density of office space in the downtown area, commercial activity in the city appeared flat. Behind the scenes, business continued from home offices and living rooms. A tremendous amount of wealth generation continued, unemployment rates remained low, and companies in the region continued to hire employees.

The best subleases in the area are moving again, and many of the current subleases will expire in the next three years. Priorities in the city include getting people back to work in the office, and that requires making workers feel safe and comfortable outside their homes. As tech companies begin to return to work, the abundant supply of sublease space should dissipate.

Highlights in the Bay Area include 5M, a mixed-use development in downtown San Francisco. The building will be 100% leased before the end of 2021, and tours have significantly picked up now that people have the ability to physically walk through the facility and see the health and wellness attributes. Progress on Pier 70 continues, and a lot of the infrastructure has been completed, making it possible for people to walk the grounds.

SEATTLE

The leasing market in Seattle has seen an uptick in demand for sublease and new-to-market tenants in the last two to three months. Notably, some sublease space is coming off the market as landlords anticipate companies returning to work in the coming months. Key players in the area include tech companies, as well as life sciences companies gaining momentum.

Bellevue was a bright spot during the pandemic due to Amazon’s expansion in the area. However, the company has been a disruptor in the space. Much of the current construction work downtown is related to Amazon projects, and the company also had incentivized tenants to move before their leases ended, with plans to take over those spaces.

In the South Lake Union area, projects originally constructed as office space have been pivoted to the life sciences. This includes Cascadian and Dexter Yard, which are now targeting tech and life science companies. This trend may continue and lower the amount of office space in the area.

The Puget Sound area should see a robust end-of-the-year. Executive transitions at Amazon and the potential election of a business-savvy mayor are factors that could affect growth in the region.

Article By

Anton N. Natsis
Allen Matkins Leck Gamble Mallory & Natsis LLP

Connecticut’s Paid Family and Medical Leave Program’s Applications Are Now Open

In a press conference on December 1, 2021, Governor Ned Lamont, along with Connecticut Paid Leave Authority Chief Executive Officer Andrea Barton Reeves, announced that the Connecticut Paid Leave Authority is now accepting applications for Connecticut residents who want to participate in the state’s new paid family and medical leave program. Approved applicants will be eligible to receive benefits beginning January 1, 2022.

The Connecticut Paid Leave Authority expects 1,000 – 1,500 applications per day, and indicated the Connecticut Paid Leave Authority is prepared to handle that level of applications.

In its Human Resouces Toolkit, the Connecticut Leave Authority outlines the “process when a worker tells you they’re applying for CT paid leave.”

How Do Employees Apply for Leave?

The Connecticut Paid Leave Authority is partnering with the Connecticut Paid Leave Authority’s benefits administrator to oversee the administration of paid leave benefits claims. Employees may submit applications via the Connecticut Paid Leave Authority’s online portal, telephone, fax, mail, or email. Employees have 15 days from the initiation of a claim to provide all requested documentation and should, according to the state, know their approval status five days after completing the required paperwork.

Employees must notify their employers or their human resources departments at least 30 days prior to the start of leave for foreseen circumstances, and as soon as is practicable for unforeseen circumstances.

Employer’s Role in Application Process

As part of the paid leave application process, employees will need to ask their employers to complete an employment verification form. Employers must complete the employment verification form and return it to the Connecticut Paid Leave Authority’s benefits administrator within 10 days. Employers are also required to notify employees that they may be eligible for Connecticut paid leave benefits whenever they notify their employers of their intent to take leave.

If the Connecticut Paid Leave Authority denies an employee’s claim, the employer is not responsible for filing any documents on the employee’s behalf. Employees may file a request for reconsideration with the Connecticut Paid Leave Authority’s benefits administrator within 10 days of a denial.

Employers may require workers to use vacation days or paid time off before they receive Connecticut paid leave benefits; however, employers must allow employees to retain up to 2 weeks of paid time off while on Connecticut family and medical leave.

Payment

The state will make approved claim payments to employees two weeks in arrears either via a stored value card or by direct deposit. The Connecticut Paid Leave Authority will not issue paper checks.

Article by:
Nicole S. Mulé
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Nominations Closed – 2021 Global Awards

Nominations for the upcoming Leaders in Law – 2021 Global Awards have now closed. All winners are currently being notified, with the publication set to be published in October.

The Awards publication will be distributed to our 129,789 subscribed readers, placed on our website permanently & promoted across all our social media channels.

Congratulations to all Winners on your success!

Regards,

Leaders in Law Team

Fenwick launches D.C. office with Freshfields, Dechert partners

(Reuters) – Weeks after hiring an antitrust partner away from Skadden, Arps, Slate, Meagher & Flom in Washington, D.C., Fenwick & West on Tuesday announced it was formally setting up shop in the nation’s capital with a new pair of regulatory-focused hires.

Thomas Ensign and Melissa Duffy have joined the Silicon Valley-founded firm’s new Washington, D.C. office as partners, where they’ll work alongside former Skadden counsel Steven Albertson. All three have joined Fenwick’s regulatory group. Ensign is a former Freshfields Bruckhaus Deringer partner, while Duffy was a partner at Dechert.

It’s the third office Fenwick has launched within the past five years, and it’s a reflection of how Fenwick’s technology and life sciences clients are facing greater regulatory scrutiny, firm chair Richard Dickson said.

“Our clients need increasingly sophisticated regulatory advice,” Dickson said.

Other law firms have been taking similar steps. Gibson, Dunn & Crutcher, Jenner & Block, Latham & Watkins, Mayer Brown, Shearman & Sterling, and Wilson Sonsini Goodrich & Rosati have added Justice Department and FTC alumni in recent months in anticipation of greater scrutiny from the Biden administration.

Dickson said Fenwick will grow its presence in Washington, but there is no set goal for the number of lawyers that will be based there.

Dickson also held open the possibility of expanding into other markets where there is a strong presence of technology and life sciences clients. Fenwick counts companies like Cisco Systems Inc, Electronic Arts Inc, Facebook Inc and Intuit Inc as clients.

“Technology and life sciences are not as concentrated in places like Silicon Valley as it once was,” Dickson said. “As that grows, we’ll grow along with it.”

The firm has profited from its focus on technology and life sciences clients. Last year, Fenwick’s revenue rose by 15% to $543 million while profits per equity partner grew more than 31% to $2.84 million, The American Lawyer reported in February.

That focus has been “the wind at our sails for our growth,” Dickson said. “Our clients have done very well over the last several years, and we’ve done very well alongside them.”

Ensign specializes in antitrust matters. His profile on Freshfields’ website said he advised on the London Stock Exchange’s $27 billion acquisition of Refinitiv from Thomson Reuters and Blackstone, a deal that closed earlier this year.

Ensign also worked on Intel Corp’s $16.7 billion acquisition of semiconductor manufacturing company Altera Corp, according to Freshfields.

Duffy is a five-year veteran of Dechert, where she advised clients on international trade issues, including trade controls and national security rules for cross-border transactions.

Representatives for Freshfields and Dechert wished Ensign and Duffy well, respectively.

Leaders in Law – Global Awards 2021 – Nominations

We would like to thank you for all of your nominations for the Leaders in Law Global Awards 2021. 

We are currently finalising our awards but if you would still like to be considered for an award please contact info@leaders-in-law.com or visit our nominations page:

https://www.leaders-in-law.com//nominations/

Winning applicants will be featured in our exclusive Global Awards 2021 Magazine, recieve a crystal trophy and our signature logos for marketing purposes:

Global Award Winner Logo LB

Global Award Winner Logo DB

Good Luck to all and Stay Safe,

The Leaders in Law Team

HHS Office for Civil Rights Enforcement Update

Right of Access Initiative

The Office for Civil Rights (“OCR”) continues to vigorously enforce an individual’s right to access their medical records.  OCR recently announced the nineteenth settlement as part of their Right of Access Initiative.

In 2019 OCR announced that it planned to focus its enforcement efforts on ensuring that patients receive their medical records in a timely manner consistent with the format and fee requirements set forth under the HIPAA Privacy Rule.  Since that time, OCR has entered into nineteen settlements ranging from $5,000 to $200,000, including several settlements involving solo providers, to address entities’ failure to provide patients access to their medical records.  OCR has announced five of those settlements since January, despite the change in administration, which typically results in a pause in settlement cases for at least a few months until the new leadership is brought up to speed.

As part of the most recent settlement, the Diabetes, Endocrinology & Lipidology Center, Inc. (“DELC”), a West Virginia-based practice providing treatment for endocrine disorders, agreed to take corrective actions and pay $5,000 after failing to provide a mother access to her minor child’s medical records.  According to OCR, the mother requested the records in July 2019, but DELC did not provide them until May 2021, almost two years after the mother made the initial request and well beyond the 30-day period required under HIPAA.  Similar to other settlements under the Right of Access Initiative, DELC also agreed to a Corrective Action Plan (“CAP”) with a two-year monitoring period that requires it to take the following actions:

  • Review and revise its policies and procedures related to an individual’s access to PHI;
  • Provide annual training and training materials to all workforce members concerning an individual’s access to PHI; and
  • Submit a list of requests for access to PHI received by DELC every ninety days during the term of the CAP.

Based on OCR’s continued focus on enforcement of an individual’s right of access, entities should prioritize responding to access requests in a compliant manner and address any access-related issues that are brought to their attention immediately.

Recent Security Rule Settlements

In addition to the Right of Access Initiative settlements, OCR has entered into two additional settlements to resolve potential violations of the HIPAA Security Rule during the past several months.  In May, OCR announced that Peachstate Health Management, LLC, dba AEON Clinical Laboratories (“Peachstate”), a Georgia lab certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), agreed to pay $25,000 to OCR.  OCR initiated a review of Peachstate’s HIPAA compliance in December 2017 as a result of OCR’s review of Peachstate’s parent company, related to a breach experienced by the parent company.  OCR’s investigation of Peachstate found systemic noncompliance with the HIPAA Security Rule, including failures to conduct an enterprise-wide risk analysis, implement risk management and audit controls, and document HIPAA Security Rule policies and procedures.  In addition to paying $25,000 to settle the case, Peachstate agreed to a relatively robust CAP, which included engaging an independent monitor and a three-year monitoring period.

In January, Excellus Health Plan, Inc. (“Excellus”), a health plan based in New York, agreed to pay $5.1 million related to a breach affecting over 9.3 million people.  Excellus reported that cyber-attackers gained access to its information systems on or before December 23, 2013 until May 11, 2015.  OCR’s investigation determined that Excellus failed to conduct an enterprise-wide risk analysis, and implement risk management, information system activity review and access controls.

In addition to the HIPAA Security Rule’s risk analysis and risk management implementation specifications, entities continue to struggle with information system activity review.  We recommend ensuring that your organization regularly reviews records of information system activity, such as audit logs and access reports, for any unusual activity that may identify security incidents.

Recognized Security Practices

At the beginning of January 2021, the previous administration signed into law H.R. 7898, which amends the Health Information Technology for Economic and Clinical Health (“HITECH”) Act to require HHS to consider covered entities’ and business associates’ implementation of “recognized security practices,” when imposing fines or penalties under the HIPAA Security Rule.

Although HHS has not undertaken a formal rulemaking process, and the statute has not yet been implemented, OCR has begun requesting the following evidence of entities’ implementation of “recognized security practices” as part of ongoing investigations:

  • Policies and procedures related to the implementation of “recognized security practices”;
  • Completed project plans or similar documentation showing the dates of implementation of “recognized security practices”;
  • Documentation explaining how “recognized security practices” are implemented (e.g., the scope of implementation throughout the entity);
  • Names of any individual responsible for ensuring “recognized security practices” are implemented by the entity’s workforce members;
  • Training materials provided to workforce members regarding “recognized security practices” and the dates of such training; and
  • Documentation showing whether the “recognized security practices” were developed under:
    • Section 2(c)(15) of the National Institute of Standards and Technology (“NIST”) Act;
    • Section 405(d) of the Cybersecurity Act of 2015; and/or
    • Other programs and processes addressing cybersecurity that are developed, recognized, or promulgated through regulations under other statutory authorities.

While it is still unclear what HHS considers “recognized security practices,” it seems likely that implementation of any of the following security standards would arguably satisfy the Act’s documentation requirements: NIST Special Publications Guidance, Health Industry Cybersecurity Practices: Managing Threats and Protecting Patients Guidance, and any additional programs that address specific legal requirements.

Article By

Abby E. Bonjean

Polsinelli PC

Italian employees and green certification. Better to summarise

Can the Italian employer request the green pass from employees?

Better to summarise the current heterogeneous and unclear scenario.

First of all, there is a guideline on vaccination.

The competent doctor is the key person, the only one entitled to process the health data of the workers and to verify their suitability for the specific job (Privacy Guarantor June 13, 2021; Legislative Decree no. 81/2008).

It is therefore the competent doctor who, having assessed the specific company situation, identifies vaccination as necessary or not and, consequently, the employee as suitable or not.

The employer only has to ensure that employees are not assigned to the specific job task without the prescribed suitability judgment.

It is therefore difficult to think differently on the subject of green certifications.

Both in terms of employment and labor law and privacy.

The situation exposed would lead to the exclusion of the possibility for the employer to request the green pass directly from its employees, overcoming the passage of the competent doctor.

And by reasoning, on the contrary, on the new DL 105/2021, we come to the same conclusion.

The related art. 3 introduces art. 9bis in Legislative Decree 52/2021, imposing from August 6th, 2021, in the white area, the need for the green certification for access to the following services and activities:

  • restaurant consumption at the table indoors
  • shows open to the public, sporting events and competitions
  • museums, other cultural institutes and places and exhibitions
  • swimming pools, swimming centers, gyms, team sports, wellness centers, even within accommodation facilities, limited to indoor activities
  • festivals and fairs, conferences and congresses
  • spas, theme and amusement parks
  • cultural centers, social and recreational centers, limited to indoor activities and with the exclusion of educational centers for children, including summer centers, and related catering activities
  • gaming rooms, betting rooms, bingo halls and casinos
  • public competitions

The owners or managers of these services and activities must verify, guaranteeing the protection of personal data, the presence of the green certification.

The provision, in hindsight, says nothing about the employees of these activities and services.

With a view to consistency, having the Legislator identified the presence of the green certification for users as necessary for these activities and services, it seems difficult to say otherwise for workers.

This reinforces (in part) the above reasoning which leads to the exclusion of the employer from requesting the green certification directly from workers, as well as for the vaccine, without going to the competent doctor.

In this context, there are those who, increasingly, with a reasonable foundation, identify the solution to the problem in collective bargaining.

The Italian law would already assign to collective bargaining the right to intervene on the vaccination obligation and, consequently, on the green pass.

Through a collective agreement, in respect and protection of workers, the exposed criticalities could be overcome, jointly identifying the need for a vaccine or green pass, lightening the workload and, above all, the responsibility of the competent doctors.

Thailand’s Online Dispute Resolution Platform for Intellectual Property

Thailand’s Department of Intellectual Property (DIP) officially launched its online dispute resolution services (ODR) for intellectual property cases in January 2021. The ODR platform was developed through cooperation between the DIP and the Thailand Arbitration Center (THAC) under the Memorandum of Understanding re: Development of Online Dispute Resolution Procedures between DIP and THAC signed on 7 December 2020.

The ODR platform, facilitated by THAC, operates under the name “Talk DD” and is accessible via https://odr.thac.or.th/auth/login, THAC’s login page. This online platform can be used for cases related to copyright, patent and trademark infringements. The ODR/Talk DD platform aims to facilitate and support out-of-court dispute resolutions, as well as decrease the number of cases filed to the Intellectual Property and International Trade Court.

The Deputy Prime Minister and Minister of Commerce, Jurin Laksanawisit, stated that the new system: allows cases to be filed online, thus enabling settlement sessions via online chats and video conferences; and allows fully online formal settlement processes to be achieved faster, facilitating more convenient agreements with less chance of confrontation between the two sides, and at a lower cost.

It is claimed that “Talk DD” is both easy to access and use. Mr. Vuttikrai Leewiraphan, Director General of the Department of Intellectual Property, said: “The operation reflects the efficiency in utilising technology to improve the quality of services for a more convenient and faster process, which can be completed regardless of timing or location. It will reduce travel expenses and administration expenses because it can be wholly operated electronically. It also reduces the number of lawsuits; this aligns with the purpose of the mediation process for intellectual property disputes.”

The first dispute request was submitted on the Talk DD Platform on 8 January 2021. After the parties agreed to the ODR process, the DIP acted as the intermediary for both parties to negotiate. On 11 January 2021, the dispute was resolved and the parties signed a memorandum of agreement to settle the dispute.

This first online dispute resolution case via Talk DD only took two working days to reach settlement. This is significantly faster compared to the traditional mediation and settlement process of the DIP. It also eliminates the time spent for paper submission of request forms, dispatchment of negotiation invitation letters and arrangement of negotiation meetings at the DIP. Under the traditional process, it would generally take at least approximately 45 days for the parties to meet, discuss and resolve the dispute.

However, it should be noted that in order to use the Talk DD platform/service, the user must create an account on the platform. Once an account has been set up, a request for an online mediation on the Talk DD platform can be submitted without charge. In such regard, the claimant needs to fill-in basic information regarding the dispute, including the e-mail address of the other party for the invitation to the online mediation proceedings. Once the parties both agree to the online proceedings and sign the confidentiality agreement for the ODR, the process will be commenced entirely through the online system, e.g. making appointments, negotiating via chat rooms, video conferences, and drafting and signing a settlement agreement. Although English is available, it does not completely reflect the information stipulated in Thai and therefore the Talk DD platform currently seems to be limited to Thai nationals.

Supreme Court: Philadelphia Ordinance Unconstitutionally Burdened Religious Exercise

The U.S. Supreme Court has found that Philadelphia’s ordinance requiring a private foster care agency to certify same-sex couples as foster parents burdened the agency’s religious exercise in violation of the Free Exercise Clause of the First Amendment. Fulton et al. v. City of Philadelphia, Pennsylvania et al., No. 19-123 (June 17, 2021).

Justice John Roberts, writing for the Court, found that Philadelphia unconstitutionally burdened the religious exercise of Catholic Social Services (CSS) — a private foster care agency in Philadelphia — by “forcing it to either curtail its mission or to certify same-sex couples as foster parents in violation of its religious beliefs.”

The Court’s decision primarily focused on whether Philadelphia’s Fair Practices Ordinance was both neutral and generally applicable and, therefore, constitutional, even if it incidentally burdened religion. For employers, however, the Court’s decision that CSS’s actions were not subject to the public accommodation provisions of Philadelphia’s Fair Practices Ordinance presents significant implications in cases alleging discrimination in places of public accommodation. The scope of this decision is limited in its application to the private sector.

Supreme Court Decision

The Court ruled that the contractual terms in contracts offered to private foster care agencies by Philadelphia forbidding discrimination on the basis of sexual orientation were not neutral and generally applicable. This ruling was based on a key exception in Philadelphia’s Fair Practices Ordinance granting the Commissioner of the Department of Human Services the authority to make individual exceptions to its general prohibition on discrimination based upon sexual orientation — “in his/her sole discretion.” Justice Roberts reasoned, “No matter the level of deference we extend to the City, the inclusion of a formal system of entirely discretionary exceptions in section 3.21 renders the contractual nondiscrimination requirement not generally applicable.”

The Court also ruled that CSS’s refusal to certify same-sex couples did not constitute an “Unlawful Public Accommodations Practice[]” in violation of Philadelphia’s Fair Practices Ordinance, which prohibits “deny[ing] or interfer[ing] with the public accommodation opportunities of an individual or otherwise discriminat[ing] based on his or her race, ethnicity, color, sex, sexual orientation,” among other protected categories. The Court explained that the decision whether or not to certify foster parents for adoptions was not a service “made available to the public” because it “involves a customized and selective assessment that bears little resemblance to staying in a hotel, eating at a restaurant, or riding a bus.” Justice Roberts noted, “[T]he ‘common theme’ is that a public accommodation must ‘provide a benefit to the general public allowing individual members of the general public to avail themselves of that benefit if they so desire.’” Therefore, because of the personalized nature of evaluating and selecting foster parents for adoption, CSS’s certification process was not the type of public service that Philadelphia’s Fair Practices Ordinance was intended to cover, the Court said.

Finally, the Court rejected Philadelphia’s various justifications for its non-discrimination requirements in its contracts with foster care agencies. This included the City’s stated interest in “the equal treatment of prospective foster parents and foster children.” The Court acknowledged that “this interest is a weighty one,” but could not justify denying CSS an exception for its religious exercise in this case, while making such exceptions available to others in the Commissioner’s “sole discretion” under the Fair Practices Ordinance.

Concurring Opinions

In three separate concurring opinions, the justices questioned the scope and impact of the majority’s decision, though endorsing its holding. Justice Amy Coney Barrett’s concurrence (joined all or in part by Justices Brett Kavanaugh and Stephen Breyer) questioned what standard would apply if the Court were, in a future case, to overrule Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U.S. 872 (1990), which set the standard that neutral and generally applicable laws do not violate the First Amendment’s Free Exercise Clause. However, Justice Barrett noted the Court need not find a replacement for Smith now, as Smith did not apply in the present dispute, because the contract at issue was neither neutral nor generally applicable. As the CSS contract gave the government the right to make discretionary exemptions from its non-discrimination rule, the law was subject to strict scrutiny, instead of the Smith standard.

In another concurrence, Justice Alito (joined by Justices Clarence Thomas and Neil Gorsuch) reasoned that the majority should have ruled on the constitutionality of Smith, and strongly suggested that Smith should be overruled, because of its perceived failure to sufficiently protect the free exercise of religion, as well as failing to provide a clear-cut standard.

In a separate concurrence, Justice Gorsuch (joined by Justices Samuel Alito and Thomas) agreed that the Court should have ruled on the constitutionality of Smith, and recounted the past cases in which the Court’s decision not to address Smith’s constitutionality led to a perceived lack of predictability and prolonged lower court litigation.

Implications

For organizations with a religious-based mission, the Court’s ruling represents an expansion of their ability to dictate the terms on which they offer their services to the public. State and federal government agencies may want to re-evaluate and re-consider their current contracts with private entities. Employers who contract with state or federal government should examine closely the existing terms and conditions of their arrangements, as well as understand what exceptions, if any, are available under relevant state or federal law.

The implications of the Court’s interpretation of the public accommodation provision under Philadelphia’s ordinance on future public accommodation disputes remains to be seen.

(Summer law clerk Nicholas Bonelli contributed significantly to this article.)