Compliance Stuff

It’s said that an ant can carry fifty times its own weight. That’s nothing. A recent decision out of the U.S. Court of Appeals for the Fifth Circuit provides a compelling reminder to policyholders and their counsel: Even the smallest word in an insurance policy—and even the  placement of a punctuation mark —can carry tremendous weight . In fact, it can alter the meaning of an entire insurance policy. In  Paloma Resources, L.L.C. v. Axis Insurance Co. , the court vacated summary judgment in favor of the insurer based on the placement of a single word— “the” —in an exclusion clause. The decision reaffirms the bedrock principle in insurance policy interpretation that where a policy purports to bar coverage for an insured’s claim, it must do so in an unambiguous and clear manner . When a policy exclusion is unclear, courts will construe the provision in favor of coverage for the policyholder. Paloma’s Claim: A Trade Secrets Lawsuit, a Settlement and a Denial of Coverage In 2017,...

On October 18, 2024, the Federal Trade Commission (“FTC”) gave notice that it would appeal a Texas federal court’s decision halting its non-compete rule (the “Rule”) from taking effect as to all employers nationwide. The appeal sets the stage for a decision by the conservative Fifth Circuit, which has become a key battleground for challenges to federal rules.  In August, in  Ryan LLC v. Federal Trade Commission , No. 3:24-cv-00986-E (N.D.Tex.), the United States District Court for the Northern District of Texas  enjoined enforcement  of the Rule nationwide, preventing it from taking effect as intended on September 4, 2024. T he court found that the FTC lacked authority to issue the Rule under the FTC Act, and that the near-complete ban on noncompetes imposed by the Rule was arbitrary and capricious.  On similar grounds, the Florida federal court in  Properties of the Villages Inc. v. Federal Trade Commission,  No. 5:24-cv-00316 (M.D.Fla), issued ...

  Takeaway:   This case highlights the importance of engaging in a detailed interactive process with employees when handling accommodation requests. The U.S. Court of Appeals for the District of Columbia Circuit decided that an employer could not require an employee with a disability to accept telework as a reasonable accommodation when the employee would rather work in person at the office. The plaintiff worked as an economist in the U.S. Environmental Protection Agency’s (EPA’s) Office of Science & Technology. He long experienced severe allergies that resulted in bleeding, itchy skin, rashes, face and arm swelling, and difficulty breathing, seeing, walking, and sleeping . For about 10 years, he worked in a private office at the EPA. After an office reshuffling in 2007, he worked from home for months before being moved to a cubicle. At that time, he sued, claiming that the EPA failed to accommodate his allergies . He lost that claim for failure to provide requested medic...