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IP | IQ: Bad Faith Filings in China and the Impacts of the New Amendments

Melvin Mei, Trade Mark Attorney, discusses the amendments to Chinese Trade Mark law and the impacts on the region.

In November 2019, amendments to Chinese Trade Mark law came into effect around bad faith filings, which continue to be a problem in China.

Melvin Mei, one of Rouse’ trade mark experts in Shanghai reflects on the practical implications of these amendments. He explores the underlying reasons for the large numbers of bad faith filings, the first to file system and what steps brand owners can take to protect themselves. Melvin also discusses the actions which authorities have been taking since the enactment of this amendment on trade mark agencies.

 

L&E News Alert: Alabama Unemployment (UI) Fraud and Abuse

Introduction

The Alabama Department of Labor (“ADOL’) is working closely with the U.S. Department of Labor and various other state and federal law enforcement agencies around the country to share information regarding the unprecedented rise in unemployment insurance fraud. As a response, the ADOL is encouraging employers to advise their employees to take reasonable measures to protect personal information, establish PIN and passwords that are difficult for an outside person or computer to generate, and be vigilant in identifying any suspicious activity related to unemployment claims.

Indicators of Fraudulent Activity

The ADOL encourages employers to be vigilant in recognizing the various indicators of fraudulent activity and advising their employees accordingly. For example, receipt of mail from the ADOL notifying an employee of a claim in their name when they have not filed an unemployment claim is an early indicator of fraudulent activity. In addition, receiving an IRS Form 1099-G stating an employee has income from unemployment when they have not filed an unemployment claim is an indicator of fraudulent activity. If an employee filed for benefits, receipt of this form is to be expected as benefits are taxable income in most states. However, in some cases, this could be the first indication that a fraudulent claim has been made. Text messages from the ADOL asking an employee to verify their unemployment account is also an indication of fraudulent activity. Employees should be advised that the ADOL does not use text messages to correspond with claimants. Lastly, employers receiving claim notices on employees who do not exist or who never terminated employment with said employer is an indicator of fraudulent activity. If an employer or employee suspects any of the aforementioned indicators of fraudulent activity, they are asked to report it to the ADOL.

Reporting 1099-G Fraud

Employers should provide a gateway for employees to report fraudulent activity. For example, an employer may advise its employees to report to its HR Department if an employee receives an IRS Form 1099-G for fraudulent benefits. In addition, an employee should then be directed to  report the fraud to the State Workforce Agency  and to the Federal Trade Commission (“FTC”) at https://identitytheft.gov/. The FTC provides employees with a personalized recovery plan and can walk an employee through each step of the recovery process. Employees should also report the identity theft to the IRS. This allows employees to avoid paying taxes on the fraudulent income.

Reporting Fraud to ADOL

If your employee suspects fraudulent activity, they should be advised to report it to the ADOL at www.labor.alabama.gov. The ADOL conducts various types of fraud and abuse investigations on unemployment claims to ensure the accuracy of benefit payments. The ADOL allows an employee to report the following: (1) Report that they suspect someone has used their social security number to work or claim UI benefits, including those who have received a 1099-G but did not receive unemployment benefits; (2) Report any suspected UI benefit fraud and abuse; and (3) Report that they suspect an employee or employees receiving UI after returning to work, or of receiving PPP funds that may impact the individual’s eligibility for UI benefits.

Conclusion

Unemployment fraud is a national issue and the ADOL is working diligently to encourage employers to take reasonable measures to protect their employees in advising them to protect personal information and report any suspicion of unemployment fraud or abuse. We will continue to assess any developments implemented by the ADOL to protect the identities of employees. We are available if you have any questions.

Washington Joins Chorus of States with Major Environmental Justice Laws

Washington State has joined a growing number of states that have adopted keystone environmental justice laws. On May 17, 2021, Governor Jay Inslee signed the Healthy Environment for All (HEAL) Act, E2SSB 5141, into law.

The new law recognizes that many communities experience disproportionately greater environmental health impacts as a result of multiple social, economic, and environmental stressors. Its principal objectives are to reduce and eliminate these disparities and to “remedy the effects of past disparate treatment of overburdened communities and vulnerable populations.” The law builds on recommendations in a 2020 report prepared by a state-funded environmental justice task force.[1] Over the next several years, the legislation will inject environmental justice considerations into state administrative agency actions. These considerations are likely to affect a range of agency activities and initiatives from grant programs and rulemaking to project approvals and enforcement cases.[2] 

Key Takeaways

Several state agencies, including the Department of Ecology, will be required by the law to:

  • Adopt environmental justice principles into their strategic planning and budgeting and funding decisions.
  • Develop and implement a community engagement plan with a focus on empowering overburdened communities and vulnerable populations, and on considering them in agency decision-making.
  • Consult with Indian tribes on decisions affecting tribal rights and lands and when carrying out certain agency environmental justice obligations.
  • Develop metrics and reports for tracking progress toward environmental justice goals.[3] 

For members of the regulated community, the most salient aspect of the law likely will be environmental justice assessment requirements. By July 1, 2023, covered state agencies must develop a process for conducting environmental justice assessments for “significant agency actions.” Based on these assessments, the agencies must seek “to reduce or eliminate the environmental harms and maximize the environmental benefits created by the significant agency action on overburdened communities and vulnerable populations” to the extent “feasible and consistent with the underlying statute being implemented.” Even if the law does not expand agency authority, these assessments are likely to influence regulatory requirements and, ultimately, how the agencies administer and enforce their programs.

Environmental Justice, Overburdened Communities, and Other Critical Concepts

At the heart of the law are several foundational concepts with which environmental attorneys and their clients should become familiar. The first, naturally, is “environmental justice,” defined as:

the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, rules, and policies. Environmental justice includes addressing disproportionate environmental and health impacts in all laws, rules, and policies with environmental impacts by prioritizing vulnerable populations and overburdened communities, the equitable distribution of resources and benefits, and eliminating harm.

Although derived in part from an EPA definition that addresses the procedural aspects of environmental regulation, the state’s definition incorporates outcome-based components.

The law also includes other definitions to assist with identifying relevant environmental benefits and harms, as well as the communities experiencing the disproportionate environmental and health burdens that the law seeks to remedy. For example, “overburdened communities” are “a geographic area where vulnerable populations face combined, multiple environmental harms and health impacts, and includes, but is not limited to, highly impacted communities ….”

A critical piece of the state’s environmental justice program will be an “environmental health disparities map,” which the Department of Health is charged with maintaining.[4] The map must use up-to-date information and data to identify “cumulative environmental health impacts and overburdened communities.” The map is likely to play a primary role in efforts to implement the state’s environmental justice initiatives by identifying relevant communities and impacts.[5]

Environmental Justice Assessments

The scope, methods, and applicability of agency environmental justice assessments for significant agency actions will be shaped over the next several years by each agency, an interagency workgroup, and a soon-to-be established environmental justice council.[6] A “significant agency action” is defined broadly as an “action that may cause environmental harm or may affect the equitable distribution of environmental benefits to an overburdened community or a vulnerable population.” As a starting point, the law identifies certain rulemaking, large capital and transportation projects, and agency legislation requests as significant agency actions. But, after considering guidance from the environmental justice council and interagency workgroup, agencies can define additional agency actions that would trigger environmental justice assessments.

Similarly, the content of the environmental justice assessments will be clarified through agency action over the next couple of years. As a baseline, the law requires the assessments to:

  • “Where applicable, utilize cumulative environmental health impact analysis … that considers the effects of the proposed action.”
  • Identify “overburdened communities and vulnerable populations who are expected to be affected … and the potential environmental and health impacts.”
  • Identify impacts to tribal rights and resources.
  • Consider community input and describe how environmental justice communities may become involved in the development of the action.
  • Identify “options … to reduce, mitigate, or eliminate identified probable impacts on overburdened communities and vulnerable populations, or provide a justification” for not addressing those impacts.

The law reigns in the potential scope of environmental justice assessments by specifying that they should resemble the familiar State Environmental Policy Act checklists that agencies use to evaluate environmental impacts for countless projects. The law also states that the checklist is not intended to be “a comprehensive or an exhaustive examination of all potential impacts” and does not require “novel quantitative or economic analysis” of the proposed agency action.

Pending the outcome of the assessments, agencies then must attempt to minimize or avoid “environmental harm” and “maximize the environmental benefits” for “overburdened communities and vulnerable populations.” The law specifies several “methods” that the agencies must consider “consistent with agency authority, mission, and mandates,” including, among others:

  • Eliminating “disparate impact of environmental harms.”
  • Reducing cumulative health impacts.
  • Providing for “equitable participation and meaningful engagement” of impacted communities in the development of the agency action.
  • “Prioritizing equitable distribution of resources and benefits.”
  • Providing “positive workforce and job outcomes.”
  • “Modifying substantive regulatory or policy requirements.”

The law contemplates that “other mitigation techniques” will be developed by the agencies as well based on input from a range of sources, such as the environmental justice council and “representatives of overburdened communities and vulnerable populations.”

The environmental justice assessment process also will provide grounds for challenging agency actions.  Future agency determinations about what constitutes a significant agency action will be particularly important in determining the extent to which these challenges are premised on environmental justice issues.

Conclusion

The Healthy Environment for All Act will spur additional action to address environmental justice issues in Washington. To date, state agencies have incorporated some environmental justice principles into programmatic planning and funding decisions. The new law will shape agency actions across a spectrum of areas. During the legislative process, the potentially more far-reaching mandates of earlier bill versions were watered down. However, as agencies take steps to implement the law over the next several years, members of the regulated community – particularly, those that interact with the Department of Ecology – should anticipate that environmental justice principles will increasingly affect general regulatory requirements and are likely to play a more substantial role in facility-specific enforcement, permitting, and compliance issues. Businesses located in overburdened communities and/or vulnerable populations, in particular, should be prepared to track implementation efforts to determine proactively how environmental justice factors could affect their operations.


[1] The Environmental Justice Task Force was required to provide a report to the Governor and the legislature by October 31, 2020, with recommendations for incorporating environmental justice principles into state agency actions. The task force was funded through a budget proviso for the Department of Health in ESB 1109.

[2] In addition to the HEAL Act, the Washington State legislature recently passed E2SSB 5126, a greenhouse gas “cap and invest” law, which includes significant environmental justice provisions. The environmental justice provisions in that legislation will be evaluated in a separate news alert.

[3] State agencies that are not required to comply with the environmental justice law may choose to do so.

[4] The Department of Health has already developed an initial version of the map. It incorporates measures such as diesel emissions, ozone, and proximity to hazardous waste sites and their relationship to communities experiencing higher rates of poverty and certain health issues, like cardiovascular disease.

[5] By November 2022, the Washington State Institute for Public Policy, a non-partisan public research group, must evaluate the “measures and methods” in the environmental health disparities map and issue a report on its findings.

[6] The environmental justice council will have several non-binding functions: providing a public forum for hearing and learning about environmental justice concerns; and developing guidance on agency environmental justice implementation, environmental justice assessments, and health disparities mapping; evaluating agency progress in applying guidance from the council; and developing recommendations for additional legislative action to address environmental justice issues. The advisory council will include 14 members appointed by the Governor. The interagency workgroup will offer technical assistance and information-sharing services to advance agency implementation and evaluation of the environmental justice requirements and will share information about specific agency functions and activities to support the council’s guidance and assessment responsibilities.

Article by

Stacey Sublett Halliday
Julius M. Redd
Allyn L. Stern
Augustus E. Winkes
Beveridge & Diamond PC

Environmental Justice and Why You Should Care

“Environmental Justice” is the concept that all people – regardless of race, color, national origin, or income – should receive fair treatment and have meaningful involvement with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. Environmental justice has been discussed in concept since President Clinton issued an Executive Order on the subject in the mid-1990s, but until recently that concept has rarely been translated into any real-world impact. Now, the Biden Administration has signaled an intention to implement principles of Environmental Justice across a wide swath of federal actions. Recent developments, including a decision by the Fourth Circuit and action taken by the City of Chicago in response to a request from the Environmental Protection Agency (“EPA”) Administrator Michael Regan, suggest that Environmental Justice will in fact be a central focus for environmental engagement going forward.

In January, President Biden issued an Executive Order that created the White House Environmental Justice Interagency Council (the “Council”). The Council is notable because it expands the purview of Environmental Justice concerns beyond just EPA. The Council includes the Attorney General and the Secretaries of Agriculture, Commerce, Defense, Energy, Health and Human Services, Housing and Urban Development, Interior, Labor, and Transportation. Previously, EPA spearheaded the oversight and incorporation of Environmental Justice into its agency actions only. The expanded scope of oversight and enforcement of Environmental Justice metrics beyond just EPA suggests that we will now see Environmental Justice principles implemented in projects, initiatives, and enforcement actions across all of these federal agencies. The Executive Order directs the Council to develop “a strategy to address current and historic environmental injustice,” to develop clear performance metrics for federal agencies to ensure accountability, and to publish performance scorecards on its implementation publically.

Perhaps even more relevant, acting chief of EPA’s enforcement office, Lawrence Starfield, recently issued an internal memorandum directing EPA regulators to increase oversight of locations in areas that raise Environmental Justice concerns.

Both developments harken an increased focus on Environmental Justice with real world impacts to facility management, ongoing remediation and enforcement matters, and risk management in merger and acquisition due diligence.

Environmental Justice Metrics

In employing Environmental Justice principles, agencies are to measure a specific population’s exposure to pollution.1 This can be measured by analyzing factors such as proximity to emission sources, any unique exposure pathways, any physical infrastructure that may exacerbate the issue (such as housing conditions or water infrastructure), and/or the potential for multiple or cumulative exposures across these various factors. In addition, Environmental Justice principles include allowing a meaningful opportunity for communities to participate in decisions that will affect their environment and/or health. Whether an agency provided a meaningful opportunity to participate can be measured by the distribution, frequency, and translation of notices relating to the decision in question, and the mechanisms for providing and incorporating public comment(s) into the final decision. Moreover, federal agencies must consider Environmental Justice in any National Environmental Policy Act (“NEPA”) analysis. EPA developed the EJSCREEN tool to show where current Environmental Justice communities are located. We note that the Biden Administration recently announced that it will be developing a new Climate and Economic Justice Screening Tool to identify additional communities threatened by the cumulative impacts of the multiple stresses of climate change, economic and racial inequality, and multi-source environmental pollution.

Implications for Industry

The new emphasis on Environmental Justice signals that facility owners and operators can expect and should anticipate a number of changes in the coming months related to enhanced regulatory scrutiny of certain sites, changes in enforcement and enforcement terms, increased facility inspections from governmental agencies, and an increased demand for monitoring, notification, and community engagement. In addition, companies can expect increased scrutiny during or before notice and comment on federal projects, infrastructure projects, or major construction, including permitting decisions, which could result in potential delays. Parties engaged in ongoing or anticipated cleanups can also expect increased scrutiny on final cleanup remedies at cleanup sites, which could result in more notice and comment opportunities and, again, potential delays and increased costs.

Enhanced Scrutiny

The key takeaway from the Biden Administration’s Environmental Justice initiatives is that the federal government will pay much closer attention to locations where Environmental Justice is a concern. For example, it may be more difficult to obtain siting permits or apply for or renew environmental permits including air permits and wastewater permits. Moreover, transactions involving locations in Environmental Justice communities may include additional terms that account for the risks of purchasing, developing, or operating on a site that will be scrutinized by EPA and the DOJ, not to mention all of the other agencies involved in the Council. Companies considering transactions or developments that involve owning or operating a facility should consider adding Environmental Justice concerns to their diligence reviews.

Enforcement

The Biden Administration’s focus on Environmental Justice also includes directing the Department of Justice (“DOJ”) to enforce violations that impact disadvantaged communities more vigorously. President Biden issued a Plan to Secure Environmental Justice and Equitable Economic Opportunity in which the President directs that cases of environmental pollution be pursued to the “fullest extent permitted by law.” The Plan also stated that President Biden will pursue additional legislation to hold corporate executives personally accountable for violations of environmental law, including the possibility of incarceration. The DOJ’s Office of Environmental Justice will coordinate with state attorneys general to focus on protecting disadvantaged communities.

In addition, the Starfield memo states that a “critical goal” of EPA’s enforcement program going forward will be to obtain injunctive relief that remediates pollution and addresses past harm to communities. This is critically important because it signals that agencies will not only look to make facilities compliant with stricter standards going forward, but they will also seek to hold companies accountable for past practices as well. As a result, paying attention to Environmental Justice concerns that may be applicable during M&A diligence may well help mitigate risk.

Increased Facility Inspections

Starfield’s directive further notes that facilities in “overburdened communities” should be subjected to increased inspections. Since the Council includes a number of agencies, facility owners and operators can expect that, in addition to inspections from EPA, inspections related to other federal agencies such as Health and Human Services or the Department of Labor may now include Environmental Justice considerations. The regulated community may want to update its facility compliance and prepare responsible personnel for the likelihood of ramped-up inspections. Moreover, companies intending to acquire or dispose of assets or businesses should not wait until a transaction to review and understand the risks attendant to Environmental Justice in the near future.

Community Engagement, Monitoring, and Notification

President Biden’s Executive Order mandates new monitoring for frontline and fenceline communities, which are areas immediately adjacent to a facility that are impacted by the noise, odors, chemical emissions, traffic, and/or parking related to a facility. President Biden also directed EPA to create a community notification program, which will require that industries producing hazardous and toxic chemicals engage directly with the community where they are located to ensure residents have real-time knowledge of any toxic release. This program will also incorporate community engagement in any remediation plans related to toxic releases. Further, Starfield’s directive states that agencies should engage with environmental justice communities about the facilities that are near them, what types of pollution are in the area, and what enforcement activities are underway.

Permitting

A recent federal court decision and a request sent by EPA Administrator Michael Regan may provide insight regarding how Environmental Justice concerns will affect project permitting. In Friends of Buckingham v. State Air Pollution Control Bd., 947 F.3d 68 (4th Cir. 2020), the Court of Appeals for the Fourth Circuit remanded a minor source construction permit issued by the State of Virginia authorizing construction of a compressor station for the proposed Atlantic Coast Pipeline. The Fourth Circuit held that the state’s determination that emissions would comply with applicable ambient air quality standards was insufficient in light of the Environmental Justice community located in the project area, and that the state should have assessed the risk of the project’s emissions to the specific community adjacent to the project.

More recently, on May 7th, 2021, Chicago Mayor Lori Lightfoot directed the Chicago Department of Public Health to suspend consideration of an application to expand a metal recycling plant on the city’s Southeast Side. Mayor Lightfoot’s action occurred after EPA Administrator Regan sent a letter to the City, recommending that review of the permit be suspended until a Health Impact Analysis (“HIA”) could be prepared and shared with the public, and offering the City assistance from Region 5 in gathering information necessary to prepare that HIA.

More than a Catchphrase

In sum, companies with facilities located in Environmental Justice communities should expect heightened scrutiny under the Environmental Justice initiatives set forth by the new Administration moving forward, and any company that owns or operates a facility should pay particular attention to Environmental Justice metrics. Companies might consider incorporating Environmental Justice metrics into existing facility compliance reviews as well as future planning and diligence related to potential acquisitions, divestitures, or facility expansion plans.

Article by;

Hillary N. Vedvig
Gary S. Rovner
Foley & Lardner LLP

Singapore jostles with London for top arbitration spot

Singapore now rivals London as the most popular seat for international arbitration, with Hong Kong coming a close second, a global survey has found.

A study by international firm White & Case, in partnership with Queen Mary University of London, has revealed that the popularity of Asian arbitral hubs has grown significantly in the past five years. Asked to select their preferred seats, 54% of respondents chose London and Singapore – the latter making the top spot for the first time. Meanwhile, half of the 1,200 respondents picked Hong Kong.

In 2015, Singapore garnered just 19% of the votes, while Hong Kong was picked by 22% of arbitration users.

According to the report, the increases enjoyed by Asian seats ‘may correlate with a relative reduction in the percentage of respondents who included traditionally dominant European seats, such as London, Paris and Geneva, in their answers.

‘London was selected by 64% of respondents in 2018, making it the most selected that year, but it dropped to 54% in this edition of the survey. Paris fell even further, from its second place showing in 2018, with 53% of respondents including it in their selections, to fourth place this year, as a seat of choice for 35% of respondents.’

The report also revealed a lack of enthusiasm for remote proceedings among arbitration users. While just 16% of respondents said they would ‘postpone the hearing until it could be held in person’, only 8% would actively prefer to hold substantive hearings remotely rather than in-person or using a mix of in-person and virtual formats.

The survey found a significant preference for international arbitration in conjunction with alternative dispute resolution (ADR) as opposed to on a stand-alone basis. This follows a trend over recent years.

 

James Coles Authors Unique Intellectual Property Book

The American Bar Association (ABA) has published a unique book from Densborn Blachly attorney James Coles. The book, “Drafting and Negotiating Intellectual Property Transactions,” provides practical insight into drafting and negotiating transactions with intellectual property provisions.

“I started this book because I could not find one book devoted explicitly to the subject matter I was teaching in the law course I designed,” Coles said. “It is very gratifying that the American Bar Association saw the critical need to have it published for the entire law community.”

Coles has been practicing law for nearly 50 years and has spent the last 15 years teaching “Intellectual Property Transactions & Licensing” at the IU Robert H. McKinney School of Law on the campus of Indiana University-Purdue University Indianapolis. The course he designed is unique because its approach is practical instead of case-study based like many law courses. His peer-reviewed book takes the same approach and has already received positive reviews.

“Jim’s vast experience in this field could fill volumes, and we are thrilled he can share this knowledge to educate future generations of attorneys,” said Densborn Blachly Managing Partner David Blachly. “With its unique focus, the book makes a great reference for any lawyer practicing intellectual property law.”

Coles is a leader in advising local, national and international businesses on all types of technology and intellectual property legal issues, including patent, trademark, copyright, trade secret, intellectual property transactions and intellectual property litigation. He has extensive knowledge in drafting and negotiating agreements with intellectual property issues and resolving disputes involving technology and intellectual property matters. He helps clients assess their intellectual property assets through consulting services and develop strategies for protecting and exploiting those assets.

“Drafting and Negotiating Intellectual Property Transactions” is available now on the ABA website at https://www.americanbar.org/products/inv/book/411364913/.

New Article 82-1 of the French Code de procédure civile

Article 82-1 of the French Code de procédure civil and challenge of the competence of the new judicial tribunal (tribunal judiciaire)

Decree n°2019-1333 dated 11 December 2019 (Article 2) has this year introduced a new Article 82-1 in the French Code de procédure civile, which is said to simplify incompetence exceptions (heading of the Section 2 of the said decree : the simplification of incompetence exceptions).

This new Article 82-1 came into force on 1 January 2020 and establishes a new derogatory scheme creating a possibility to challenge the competence of the judicial tribunal. The judicial tribunal was recently created with the merger of the TGI (Tribunal de Grande Instance) and the TI (Tribunal d’Instance), such jurisdictions dealing with civil matters. Due to the coronavirus Covid-19 sanitary crisis, legal practitioners did not really have the time to test this new regime.

As a general rule (Article 74 of the French Code de procédure civile), an incompetence exception has to be raised in limine litis, that is to say, at the first hearing, before any discussions on the ground of the case, and by way of principle, before the same judge ruling on the case. On the contrary, and by way of derogation, the new scheme sets up a possibility to raise an incompetence exception, before the first hearing, either the parties or the judge raising it. If trigged, the parties or their lawyers are informed right away by any means giving fixed date (date certaine). In this perspective, the file is transmitted to the registry (greffe) of the judicial tribunal, which in turn, transfers the case to a designated judge. The competence of this newly appointed judge may also be challenged, by him or the parties, during a period of 3 months, by the transfer of the case to the President of the judicial tribunal. According to the new regulation, the President of the judicial tribunal has to transfer the case to a new appointed judge, and such a decision cannot be challenged. However, the competence of this new appointed juge may be challenged before this new judge by the parties, and the decision ruling on the competence may be appealled within a period of 15 days, as of the date of the notification of the decision.

The President of the judicial tribunal appears to be the keystone of the scheme, which is in line with the role usually attributed to him, as already in charge for example of summary proceedings (e.g. référé). The fixed date (date certaine) and the 3 months timeframe appear to be crucial, and purport to avoid endless discussions on the competence.

However, and surprisingly, this new scheme creates a very sophisiticated legal architecture, not to mention the potential right to call the case before the French Cour de cassation (Supreme Court). In such a context, these new rules may unfortunately be used to artificially challenge a procedure and lenghten it. An author has recently described this mecanism as a potential Trojan Horse, allowing dilatory procedures (Katia Bennadji, Dalloz actualité, 22 July 2020, « L’article 82-1 du Code de procédure civile : cheval de Troie au service de manœuvres dilatoires »). This remains true to a certain extent, as this new Article 82-1 has been introduced in a context where, on the contrary, a lot of other procedural rules are aimed at streamlining the procedure e.g. concentration of the legal means (concentration des moyens), estoppel or prohibition of dilatory procedures.

In a constant movement, the French Cour de cassation draws the outlines of the concentration of the legal means principle. The French Cour de cassation (C. cass. civ. 2, 11 April 2019, n°17-31785), recently stated that the plaintiff, before any rulling on the case, has to expose all the legal means considered as the ground for the claim. This means that, in a same instance, an overruled legal claim cannot be raised again in connection with another ground based on the same object, as the one on which the tribunal has already definitly stated. According to this case law, the rule of the concentration of the legal means, uses the same underpined concept as the fin de non-recevoir (i.e. res judicata pro veritate habetur), but is not an exception procedure as rather deals with the ground of the case. It remains to be seen however how this case law and all the case law hereof, will be used by legal practioners to limit the import of this new Article 82-1. In this perspective, it is reasonnable to think that they may wish to use the concentration of the legal means principle, also in connection with procedure exceptions, such as incompetence.

In addition, the estoppel theorie, albeit originally English law concept, is now part of the French legal system. In a considerably important decison, the French Cour de cassation, recognised and introduced into French law, this anglo-saxon concept (C. cass. Ass. Plen., 27 February 2009 (n°07-19.841)) and considers it as a fin de non-recevoir (i.e. a legal mean aiming at having declared the claim of the other party as not recevable). In this respect, the French Cour de cassation has stated that actions of the same nature based on the same conventions, opposing the same parties may give rise to a sanction, provided that a party kept contradicting itself, at the expenses of others. More specifically, the French Cour de cassation, Civ. 2, dated 15 March 2018 (n°17-21.991) reitereted this position, ruling that « (…) the principle according to which no one may contradict itself at the expenses of others, sanctions the procedural attitude consisting, for a party, during a same instance, to adopt contrary or incompatible positions leading the adversary in error as to its intentions ». Thus, it is reasonnable to think that legal practioners will use, inter alia, the estoppel theory to limit the possibility to use incompetence exceptions. In addition, even if the contradiction may occur in the same instance, it cannot be excluded that a judge may wish to streamline the procedure and prevent a party from utilising incompetence exceptions several times, in a same context.

A judge would also have the possibility to use article 32-1 of the French Code de procédure civile, which states that a person acting in justice in a dilatory manner may be convicted to a civil fine up to 3.000 euros, without prejudice of dammages that would be claimed. In that event, the amount related to the civil fine is paid to the French Trésor Public.

To remain in the real trend of the procedure regulation, i.e. constant equilibrium between defense rights and efficiency of the legal system, judges and legal practioners are in the position to put forward a strict construction of Article 82-1 of the French Code de procédure civile. Constructions rules are clear in this respect : exceptions or derogations have to be interpreted strictly, and the scheme created is created by way of exception. This means that each time a lawyer would invoke a competence exception on the basis of this new Article 82-1, the judge would have to conduct a teleological construction, in the view of maintining a sufficient level of efficiency of the procedure, especially in a context where (i) ECHR (European Convention of Human Rights) already imposes an effective recourse in every steps of the procedure and (ii) numerous litigations deal with international matters, allowing the parties to raise incompetence exceptions, also on the ground of judicial international private law.

Up to date as of 22 July 2020.

 

CCWC and Hogan Lovells: Our Shared Vision

As part of our commitment to being a leader in diversity and inclusion, we are proud to announce the beginning of a partnership between Hogan Lovells and Corporate Counsel Women of Color (CCWC).

The nonprofit organization provides a support network to in-house women of color attorneys, promotes career advancement and success at all levels within corporations, and promotes all aspects of global diversity in the legal profession and workplace. We look forward to working with CCWC as part of our shared vision to support the leadership and professional development of women of color in the legal industry.

Please watch the video below to learn more about this partnership.

COVID-19: managing the risk of contamination in the workplace

While the World Health Organisation has just declared the COVID-19 epidemic a “pandemic”, with the virus had reached nearly 130,000 people since December 2019, managing the risk of the virus spreading in the workplace has become a major issue for every employer. Following the announcement of multiple cases in Luxembourg and the decision of one Luxembourg bank to require employees to take holiday leave in the event of contamination, it seems more important than ever to remind ourselves of the rights and obligations of employers in the current scenario.

What are the employers’ obligations?

According to the Luxembourg Labour Code, employers have a legal obligation to ensure the safety and health of their employees in all work-related aspects. More particularly, as part of their responsibilities, employers shall take all necessary measures for the protection of the safety and health of employees, including actions for prevention of occupational hazards, information and training, as well as the establishment of the necessary organisational means. In general, employers must avoid risks and take precautions against possible risk factors, plan risk prevention and eliminate hazards or, at least, reduce them as much as possible.
In concrete terms, employers must take all the necessary preventive measures to protect employees and prevent the spread of the virus, such as:

  • display pictograms in the premises explaining basic hygiene procedures (e.g. regular hand washing, avoiding physical contact, avoiding travel in high-risk areas, sneeze or cough into a tissue );
  • reinforce hygiene measures (provision of masks, soaps and alcohol-based solutions for hand disinfection, etc.);
  • encourage teleworking where possible;
  • limit employees’ business travel and use alternatives solutions such as video-conference, phone calls, etc.;
  • postpone organized social events;
  • inform employees about the evolution of the situation in Luxembourg;
  • etc.

The means put in place by the employer should thus be aimed at (i) researching the virus’ origins and (ii) containing and delaying its spread.
In any case, employers shall keep themselves informed of the official recommendations published by the Ministry of Health, and liaise with their occupational health service in case of doubt.

Can an employee refuse to work or to carry out an assignment for safety reasons?

The Labour Code provides that in the event of serious, immediate and unavoidable danger, an employee can choose to leave or refuse to go to his/her workplace. There is no specific procedure to follow: it is sufficient for the employee to inform his/her employer orally or, preferably, in writing. In such event, the employee shall not suffer any harm/be subject to any sanction. A dismissal in violation of this prohibition of sanctions would be automatically deemed abusive.
If the employer has not taken the necessary steps to isolate employees exposed to the virus, an employee may, therefore, exercise his/her withdrawal right, either because he/she has been in a risk area or because he/she has been in contact with a colleague who has been in a risk area. Similarly, if the employer does not offer repatriation to an employee working in a risk area, the employee can again exercise his/her right to withdraw by ending the assignment. This right may also be exercised by an employee in the event that his/her employer asks him/her to go to a risk zone for an assignment.
As mentioned above, the employee’s withdrawal right can only be exercised in the event of serious, immediate and unavoidable danger. Consequently, an employee cannot refuse to attend work simply for fear of the COVID-19; similarly, an employee cannot refuse a business trip to an area that is not considered to be at risk. In such circumstances, the employee’s refusal could be subject to disciplinary action up to, and including dismissal.

Can the employer refuse to approve vacation for an employee who intends to privately go to areas at risk of COVID-19?

Under Luxembourg law, the employer may only refuse to grant leave in limited cases:

  • for operational purposes;
  • because of the justified wishes of other employees;
  • because of the employee’s unjustified absences, when they exceed 10% of the time during which he/she would normally have been required to work.
  • Luxembourg law does not allow the employer to deny leave to an employee for health and safety reasons. In any case, the employer cannot interfere in the private life of its employees.

In accordance with its obligation to ensure safety and health in all work-related aspects, the employer may, at most, recommend to the employee not to travel to the specific place. If the employee nevertheless travels to a high-risk area, the employee may be refused access to the workplace if the health and safety of others employees are seriously at risk, and in order to avoid spreading the virus in the company.

Does the employee have an obligation to inform the employer of possible exposure to the virus?

The Labour Code provides that it is the responsibility of each employee to take care, according to his/her possibilities, of his/her own safety and health and that of other persons affected by his/her acts or omissions at work, in accordance with his/her training and the instructions of the employer. In particular, employees must immediately report to the employer and/or the designated employees and the safety and health representatives, any work situation which they have reasonable cause to believe presents a serious and immediate danger to safety and health, as well as any deficiencies found in the protection system.
In light of the above, and on the basis of the principles of good faith and loyalty inherent in all employment relationships, employees should, therefore, inform their employer of any possible exposure to the virus (e.g. travel to an affected area, contact with a person returning from an affected region, etc.) so that the employer can take all the necessary measures in accordance with its obligation to ensure safety and health at work.

What can the employer do in case an employee is showing symptoms or is coming back from a high-risk area?

First of all, as the employer is responsible for ensuring safety and health in the workplace, and pursuant to the Labour Code, the employer may request employees showing symptoms or coming back from a high-risk area to perform a medical examination in order to ensure that the employee is fit for work. Such medical examination should be carried out by an occupational doctor of the company and at the employer’s expense, and may only be requested if the employer has serious indications of the existence of a risk for safety and health at work.
Where the health and safety of other employees are at stake, the employer may also refuse employee access to the workplace. However, the risk justifying the refusal of access to the workplace must be serious and justified; otherwise, the refusal of the employer could be regarded as discrimination.
Finally, the employer may encourage the implementation of telework for employees whose nature of work allows it, in order to avoid any risk of infection or spread of the virus.
According to the Ministry of Economy, employers could even impose telework in a preventive manner. The employer and the employee would then have to enter into an amendment to the employment contract, allowing the use of telework for reasons objectively motivated by precautionary measures in the context of the fight against COVID-19.
In any case, the employer shall cover the costs directly linked to telework, especially costs in relation to telecommunication. The employer shall also provide their teleworkers with appropriate technical support and is responsible for any cost related to the damage or loss of equipment and data used by the teleworker.
Where the nature of the employee’s job does not allow telework, the employer may exempt the employee from work where there is a risk for health and safety in the workplace.
In any case, the employer shall continue to pay its employees’ salaries. In addition, the employer may, under no circumstances, require the employee to stay at home by taking days off.

How to deal with a sick employee or with an employee stuck abroad due to restriction measures?

In case of sickness or quarantine instructed by a doctor, the employee will receive a medical certificate and the absence will be treated as normal sickness absence (i.e. cost is either borne by the employer or social security depending on whether the 77-day threshold has been reached).
However, if an employee is absent and stuck abroad due to restrictive measures implemented in connection with the prevention of the spread of COVID-19 (e.g. quarantine on a cruise ship, cancellation of flights, etc.), and if the employee is not sick, this absence will not be treated as normal sickness absence.
In such a situation, the employer and the employee may agree that the employee will work remotely, if practically possible. In this case, the employer must continue to pay the salary of the employee.
In any case, absences due to cases of “force majeure” or causes beyond the employee’s control, which have made it impossible for the employee to request prior authorisation, shall not be considered as unjustified absences and shall be assimilated to actual working days. In this respect, the employer shall continue to pay the employee’s salary.
However, if an employee is stuck abroad following his decision to go to a high-risk area despite his employer’s warnings, it could then be considered that there is an impossible performance of the employment contract due to the employee’s gross negligence and that in this case the employer could be justified in not paying the employee’s salary.

Should the employer grant an employee’s request to telework in order to care for children who are temporarily not allowed to attend their school?

An employer has no legal obligation to accept a telework request. Should the child of an employee be infected with COVID-19, placed in quarantine or temporarily unable to attend school, the employee will have to apply for leave.
However, where the child of an employee has potentially been in contact with a person who may be infected with the virus or who has stayed in a risk area, it is in the employer’s interest to permit teleworking as a preventive measure.
draft Grand-Ducal regulation has recently been adopted, providing for the possibility of a right to family leave for parents whose children have been placed in quarantine by the doctor of the Health Directorate, in particular in order to limit the spread of infectious diseases and more specifically of the COVID-19.

How can redundancies be avoided in the event of a decline in the activity of the business due to the propagation of the COVID-19?

In order to protect jobs and prevent redundancies, the Labour Code allows businesses, under certain conditions, to resort to various short-time working schemes depending on the nature of the difficulties encountered.
In this respect, the Labour Code provides that in the event of partial or total interruption of the operation of the undertaking due to losses of a “force majeure” nature occurring independently of the will of the employer and the employees, a subsidy may be granted to the employer who, instead of proceeding to dismissals, undertakes to maintain the employment contracts of its employees and to pay them a compensatory wage allowance.
In the event of an agreement, the Employment Fund (Fonds pour l’emploi) covers 80 % of the salaries normally received by the employees (which is capped at 250 % of the minimum wage for an unskilled worker) during the non-work periods with a maximum of 1.022 hours per employee and per year.
The Luxembourg authorities have recently recognized that this short-time working scheme in cases of “force majeure” may apply in principle to all economic sectors as long as the causes invoked are directly related to COVID-19 (e.g. drop in demand from customers or users, employees absences due to external decisions, the company can no longer operate at normal speed, etc.).

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