April 2010
Introducing the Precept Health Care Reform Resource Center
Precept Health Care Reform Resource Center provides publications, downloads, and links to help you understand and interpret the changes that will be taking place under the new health care reform laws.
Check out the three newest client alerts in the Health Care Reform Resource Center:
Supreme Court to Consider Whether Background Checks Violate Privacy Rights of Government Contract Employees
On March 8, 2010, the United States Supreme Court granted certiorari in NASA v. Nelson, agreeing to consider whether the National Aeronautics and Space Administration violated the constitutional rights of certain contract employees in non-sensitive positions by conducting extensive background checks on them.
Background
In 2005, NASA began requiring even “low-risk” contract employees to undergo a comprehensive background investigation that asks workers a variety of personal questions, including questions about conviction history and drug treatment.
A group of contract workers at NASA’s Jet Propulsion Laboratory, operated by the California Institute of Technology (Caltech) under a contract with the federal government, on behalf of a potential class of 9,000 employees, filed suit to enjoin the conducting of the background investigations. The employees claimed the background checks violated their constitutional right to informational privacy and that the questions were not reasonably tailored to their responsibilities and level of access to confidential government information.
The district court denied the employees’ motion for a preliminary injunction, but the Ninth Circuit Court of Appeals reversed, finding that the background checks had the potential to violate employees’ right to informational privacy and that certain questions posed to the employees and their references were not narrowly tailored to meet the government’s legitimate interests.
The Ninth Circuit also addressed the question of whether Caltech, as a private actor, could be held liable for constitutional violations that arise from the government-imposed background investigations. The court found that although there is a presumption that private conduct does not constitute government action, that presumption is rebutted when a sufficient nexus makes it fair to attribute liability to a private employer as a government actor. The Ninth Circuit found that Caltech could face liability because it did more than merely abide by the contract terms imposed by NASA. Although Caltech initially opposed NASA’s background checks, it later established a policy that employees who did not cooperate with the investigation and failed to obtain federal identification badges would be deemed to have resigned from Caltech (as opposed to merely being denied access to the Jet Propulsion Laboratory).
The Ninth Circuit noted that this decision raises serious questions as to whether Caltech became a willful and joint participant in NASA’s investigation program, creating a coercive environment in which employees must choose between their jobs or their constitutional rights.
The government petitioned the U.S. Supreme Court to review the Ninth Circuit’s decision. The petition was granted on March 8, 2010, and hearing is scheduled for the fall term.
While focused on constitutional issues, the decision in this case may nevertheless have broader significance insofar as the court addresses the appropriate scope of background checks, which are widely conducted by many employers. It will also have significance to government contractors to the extent it addresses the standard under which a contractor becomes an agent or arm of the state, subject to liability as a state-actor for violation of constitutionally-protected rights.
We will continue monitoring this case as it makes its way through the Supreme Court.
Note: The information in this Alert was provided to Precept by Proskauer Rose LLP. Proskauer is an international full-service law firm with over 60 employee benefits attorneys located in offices across the United States. The information in this article is not intended as legal advice nor is it intended to provide a comprehensive review of the legal matters discussed. For more information about Proskauer, please contact Peter Marathas at (617) 526-9704 or pmarathas@proskauer.com. ©2010 Proskauer Rose LLP. All rights reserved. Used with permission.
President Obama Announces Controversial Recess Appointments to NLRB and EEOC
On March 27, 2010, President Obama directly appointed individuals to the National Labor Relations Board and Equal Employment Opportunity Commission without awaiting Senate approval, as part of a group of “recess appointments.” Most notable among these recess appointments, which are valid until the end of 2011, is the appointment of Craig Becker, to the NLRB, which has been functioning with only two members since the end of 2007.
Mr. Becker is a former associate general counsel for the Service Employees International Union and the AFL-CIO. There has been strong Republican and business opposition to his appointment since it was first announced in April of 2009 due to what many consider “controversial and confrontational views” Mr. Becker has expressed in his writings. One of the most cited examples involves a 1993 law review article in which he wrote that employers should not be a party in any NLRB proceeding relating to union elections – eliminating their role in establishing appropriate bargaining units, determining eligible voters, and raising objections to union conduct during elections.
Although initially approved in committee, Mr. Becker’s nomination to the NLRB was blocked by Senate Republicans and two Democrats in February 2010. Indeed, all 41 Senate Republicans recently sent the President a letter urging him not to appoint Mr. Becker during the recess. The Republicans argued that Mr. Becker’s writings “indicate that he would use his position on the NLRB to institute far-reaching changes in labor law far exceeding the Board’s authority and bypassing the role of Congress.”
The President also appointed Mark Pearce to the NLRB, a union-side labor lawyer, but much less controversial choice. He did not, however, appoint a fifth member in what would traditionally be a Republican-designated spot. The president had nominated Brian Hayes, currently chief Republican Labor Counsel for the Senate HELP Committee, but unlike Messrs. Becker and Pearce, Mr. Hayes was not given a recess appointment. Now that the NLRB will have four members, it will be able to chip away at the backlog of over 210 cases that has developed over the last two years, while the NLRB only had two members. In particular, organized labor and other interest groups have identified some 40 decisions issued by previous Boards that they wish to have a new Board reconsider and perhaps reverse.
The President also appointed four individuals to various roles in the EEOC. The President appointed Democrat Jacqueline Berrien as Chair. He also appointed Democrat Chai Feldblum and Republican Vicki Lipnic as Commissioners and David Lopez as General Counsel. Berrien most recently served as Associate Director-Counsel of the NAACP Legal Defense and Educational Fund. Feldblum has been a Professor at the Georgetown University Law Center since 1991. Lipnic served as U.S. Assistant Secretary for Labor and Employment Standards from 2002 until 2009. Lopez worked as a Supervisory Trial Attorney at the EEOC’s District Office in Phoenix. With a full quorum of Commissioners, the EEOC will now be able to complete its regulatory process with respect to the Genetic Information Nondiscrimination Act, the ADA Amendments Act, and the recently issued proposed rules for the Age Discrimination in Employment Act.
Note
: The information in this Alert was provided to Precept by Proskauer Rose LLP. Proskauer is an international full-service law firm with over 60 employee benefits attorneys located in offices across the United States. The information in this article is not intended as legal advice nor is it intended to provide a comprehensive review of the legal matters discussed. For more information about Proskauer, please contact Peter Marathas at (617) 526-9704 or pmarathas@proskauer.com. ©2010 Proskauer Rose LLP. All rights reserved. Used with permission.
Doctor’s Orders: Generic Drugs: Safer than Brand Name
By Dr. Christopher H. Coulter, Chief Medical Officer, Precept
By now you probably know that generic medications cost less than brand name drugs, as much as 70% less. And you probably know that generic drugs are tested by the FDA to make sure they are as safe and effective as the brand name drugs. But did you know that when your doctor prescribes a new medication for you, you’re also safer if your doctor prescribes a generic medication than a brand name drug?
From the time a new drug is released to the public to the day its patent expires, the drug manufacturer has a strong incentive to sell as much of that drug as possible. That’s why you see so much advertising for drugs like Nexium (“the purple pill”), Lipitor, Avodart, and the like. Drug manufacturers also give free samples for physicians to dispense, so that once the sample is gone, you are stuck with a very expensive prescription.
But these new drugs were tested by only a few thousand people before they were approved. When they get released and advertised, they may be taken by millions. Uncommon side effects show up, and it becomes clear that some of these drugs are not safe. Some, like Baycol and Vioxx, get pulled from the market. FDA analysts have estimated that as many as 139,000 people suffered heart attacks caused by Vioxx. Others, like Avandia and Celebrex, have to put special warnings (“black box”) on their labels because of their health hazards.
The advantage of generics is that they have been on the market much longer than brand name drugs and many patients, often millions, have already taken the medication. The chances of finding unexpected rare complications are much lower, making the generic a safer choice.
There’s another reason why generics may be better. Because they are less expensive, people are more likely to take them as often as they are prescribed, especially for an ongoing medical condition like high blood pressure or high cholesterol.
That’s two good reasons to ask your doctor or pharmacist for generics.
