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BMD Obtains Supreme Court Victory on Behalf of Sterilite of Ohio, LLC

Client Alert
August 28, 2020

Columbus, Ohio – On August 26, 2020, the Supreme Court of Ohio issued its opinion in Lunsford v. Sterilite of Ohio, LLC, Slip Op. No. 2020-Ohio-4193. The Supreme Court’s 4-3 decision reversed an Ohio Court of Appeals ruling that had reinstated a putative class action against Sterilite brought by a group of current and former employees claiming that Sterilite’s use of “direct observation” urinalysis screening violated their common law right to privacy.

BMD originally obtained dismissal of the case in the Stark County Court of Common Pleas, which was reversed by a decision of the Ohio Fifth District Court of Appeals in August 2018. Following the Fifth District’s adverse ruling, BMD successfully petitioned the Supreme Court of Ohio to accept jurisdiction and hear the case. BMD partner Daniel Rudary argued Sterilite’s appeal to the Supreme Court on January 28, 2020.

In its decision reversing the appellate court, the Supreme Court majority adopted BMD’s argument that the plaintiff employees consented to drug testing under the “direct observation” method when they voluntarily produced urine samples while being observed by a same-sex monitor in a designated restroom facility. The Supreme Court also reaffirmed Ohio’s long standing rule of employment-at-will, holding that because “Sterilite had the legal right to terminate appellees’ employment at any time, appellees’ argument that their consent was involuntary because of their fear of termination necessarily fails.”

BMD Litigation Member John Childs and Partner Daniel Rudary represented Sterilite before the Supreme Court of Ohio. Their brief to the Supreme Court can be read here, and Attorney Rudary’s January 28, 2020 oral argument can be viewed here.

See additional coverage on the decision in the ABA Journal and Bloomberg News.

BMDBrennan Manna DiamondOhio Supreme CourtSterilite of Ohioputative class actionOhio Court of Appealsdirect observationcommon law right to privacyemployment-at-willJohn ChildsDaniel J. RudaryLitigationEmployement Law
Client Alert

HIPAA Business Associate Agreements: Why These Contracts Matter

January 27, 2021No one loves drafting, reading or negotiating HIPAA Business Associate Agreements (BAAs). Yet many of us need to do so, and some of us do so daily. They are often boring, dense and technical, but BAAs are important from both a legal and a business perspective, and they deserve our attention. Failure to enter a BAA when one is required can constitute a HIPAA violation that results in substantial liability, as demonstrated by certain recent Department of Health & Human Services (HHS) settlements.1 A business associate who makes a disclosure that is not authorized by the applicable BAA or required by law can be subject to civil and, in some cases, criminal penalties. Further, parties are often presented with BAAs that contain onerous one-sided indemnification and other provisions that can be devasting to an organization in the event of a HIPAA breach. The significance of a BAA is often not fully understood by the parties until something goes wrong (e.g., a HIPAA security incident or breach, an Office of Civil Rights (OCR) audit or a fracture in the relationship between the parties) and, at that point, there is limited opportunity to mitigate legal and business risk. Ideally, attention should be given at the commencement of the business associate relationship, when the parties are able, to thoughtfully addressing regulatory requirements, planning and preparing for potential adverse events and appropriately allocating risk among the parties. As with most healthcare regulatory compliance initiatives, a proactive approach with respect to BAAs is preferable. This article provides a broad overview of certain BAA requirements and some practical negotiating tips for the parties involved.Client Alert

“I’m Out Of Here!” Now What?

January 27, 2021We all know that the healthcare industry is experiencing a wave of integration. This trend has been evident for many years. Fewer physicians are willing to assume the legal, financial and other business risks associated with owning their own practices. More and more physicians, including anesthesiologists, are becoming employed by large physician groups, health systems and national providers. This shift necessarily involves not only entry into new employment arrangements but also the termination of existing relationships. And those terminations are often governed by written employment agreements, state and federal healthcare laws and employer benefit plans and other policies and procedures. Before pursuing their next opportunity, physicians should pause for a moment and first attend to the arrangement that they are leaving. Departing physicians need to understand their legal rights and obligations when leaving their current employment relationships in order to avoid unintended consequences and detrimental missteps along the way. Here are a few words of practical advice for physicians contemplating an exit from their current employment arrangements.Client Alert

Investment Training for the Second and Third Generations

January 19, 2021Consider this scenario. Mom and Dad started the business from the ground up. Over the decades it has expanded into a money-making machine. They are able to sell the business and it results in a multimillion-dollar payday for their labors. The excess money has allowed Mom and Dad to invest with various financial advising firms, several fund management groups, and directly with new startups and joint ventures. Their experience has made them savvy investors, with a detailed understanding of how much to invest, when, and where. They cannot justify formation of a full family office with dedicated investors to manage the funds, but Mom and Dad have set up a trust fund for the children to allow these investments to continue to grow over the years. Eventually, Mom and Dad pass. Their children enjoy the fruits of their labors, and, by the time the grandchildren are adults, Mom and Dad's savvy investments are gone.Client Alert

Provider Relief Funds – Continued Confusion Regarding Reporting Requirements and Lost Revenues

January 15, 2021In Fall 2020, HHS issued multiple rounds of guidance and FAQs regarding the reporting requirements for the Provider Relief Funds, the most recently published notice being November 2, 2020 and December 11, 2020. Specifically, the reporting portal for the use of the funds in 2020 was scheduled to open on January 15, 2021. Although there was much speculation as to whether this would occur. And, as of the date of this article, the portal was not opened.Client Alert

Ohio S.B. 310 Loosens Practice Barrier for Advanced Practice Providers

January 14, 2021S.B. 310, signed by Ohio Governor DeWine and effective from December 29, 2020 until May 1, 2021, provides flexibility regarding the regulatorily mandated supervision and collaboration agreements for physician assistants, certified nurse-midwives, clinical nurse specialists and certified nurse practitioners working in a hospital or other health care facility. Originally drafted as a bill to distribute federal COVID funding to local subdivisions, the healthcare related provisions were added to help relieve some of the stresses hospitals and other healthcare facilities are facing during the COVID-19 pandemic.
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