Digest 01.09.2020: District of Columbia Attorney General Hits Two Employers for $500,000 over Alleged Wage Theft

Cozen in the News

Cozen O’Connor’s State Attorneys General Group Identifies Current Best Practices for Data Security According to FTC and State Attorneys General

  • Ann-Marie Luciano and Jawaria Gilani published an article in the January 8, 2020 edition of Cybersecurity Law Report that analyzes multiple Federal Trade Commission (“FTC”) and state AG settlements relating to data breaches and provides insights into what regulators view as reasonable and sufficient data security practices.
  • The article identifies eight best practices relating to access control, threat awareness, and advanced technical security measures that companies can implement to increase their data security and reduce the risk that regulators will find fault in the reasonableness of such practices.

Labor & Employment

District of Columbia Attorney General Hits Two Employers for $500,000 over Alleged Wage Theft

  • District of Columbia AG Karl Racine reached a settlement with construction company Rock Spring Contracting, LLC (“Rock Spring”) and separately obtained summary judgment against the now-defunct home healthcare company J.D. Nursing and Management Services, Inc. and its former CEO (“J.D. Nursing”), each resolving allegations of wage theft in violation of DC’s wage-and-hour laws.
  • According to the AG’s office, Rock Spring allegedly misclassified 75 drywall workers as independent contractors instead of employees, and failed to pay overtime and sick pay. The complaint against J.D. Nursing alleged that the company failed to pay wages to 26 employees, each of whom worked for an average of over 150 hours without pay.
  • Under the terms of the settlement with Rock Spring, the company must pay over $55,000 in restitution to its workers and $225,000 in penalties to DC. It must also implement new policies and procedures to ensure that it complies with DC’s labor and employment laws. Under the terms of the judgment against J.D. Nursing, the company must pay nearly $195,000 in stolen wages and treble damages to its employees and $22,050 in penalties to DC.

Consumer Protection

New Mexico Attorney General Enters the Talcum Powder Wars

  • New Mexico AG Hector Balderas, following the footsteps of a number of private lawsuits, has sued talcum powder manufacturer Johnson & Johnson and related companies (collectively “J&J”) for allegedly misleading consumers about the safety of talcum powder in violation of New Mexico’s Unfair Practices Act, Medicare Fraud Act, and Fraud Against Taxpayers Act.
  • The complaint alleges, among other things, that J&J wrongfully marketed, sold and promoted its talcum products to consumers and healthcare providers as safe even though it had known for decades that these products contained asbestos and that asbestos was a carcinogen.
  • The complaint seeks declaratory and injunctive relief, as well as restitution, punitive damages, and civil penalties.

Oregon Attorney General Drops the Hammer on CenturyLink for Allegedly Misleading Sales Tactics and Surprise Bills

  • Oregon AG Ellen Rosenblum settled with international telecommunications company CenturyLink, Inc. and related companies (collectively “CenturyLink”) to resolve allegations of deceptive advertising and billing practices in violation of Oregon’s Unlawful Trade Practices Act.
  • According to the AG’s office, among other things, CenturyLink allegedly misled consumers in its advertising, billed consumers for amounts other than they were promised, billed for services that were either disconnected or not installed, and sent multiple bills for the same month for different amounts.
  • Under the terms of the Assurance of Voluntary Compliance, among other things, CenturyLink is required to disclose all charges, fees, and material terms in its sales materials in a conspicuous manner. It must also stop charging the Internet Cost Recovery Fee or the Broadband Cost Recovery Fee, and allow current customers to transition to another plan that does not charge these fees within 30 days without charging an early termination fee. In addition, CenturyLink will pay $4 million, including $3.35 million to the state and $672,000 in direct refunds to Oregon consumers.
  • As previously reported, CenturyLink reached a similar settlement with Washington AG Bob Ferguson in December 2019.

For-Profit Colleges

For-Profit Colleges Beware; Massachusetts Is on Patrol

  • Massachusetts AG Maura Healey settled with for-profit education company Bay State College, Inc. (“Bay State”) to resolve allegations of misleading marketing to prospective students in violation of the AG’s For-Profit School Regulations.
  • According to the AG’s office, among other things, Bay State allegedly failed to make certain required disclosures to prospective students in a timely manner and failed to provide accurate job placement rates to them.
  • According to the AG’s office, under the terms of the settlement, Bay State will pay $700,000 to the AG’s office to provide relief to eligible students and will discharge $400,000 in student debts owed to the school.

Health Care

21 Democratic Attorneys General Seek Supreme Court Review of ACA Case

  • Twenty-one Democratic AGs, including New York AG Letitia James, petitioned the U.S. Supreme Court for an expedited review of a recent decision by the U.S. Court of Appeals for the Fifth Circuit in Texas v. U.S., which affirmed a district court’s ruling finding the individual mandate of the Affordable Care Act (“ACA”) unconstitutional.
  • According to the petition, because the Fifth Circuit did not rule on the validity of the rest of the ACA, its decision causes uncertainty that may harm the health of patients and disrupt the healthcare market. The petition also argued that expedited review is warranted because many stakeholders, including states, patients, healthcare providers, employers, and pharmaceutical companies, have come to rely on the ACA.
  • The petition asked the Supreme Court to resolve the case by the end of the court’s current term in June.


Vaping Isn’t Going to Be Quite So Tasty Anymore

  • The Federal Food and Drug Agency (“FDA”) announced its finalized enforcement policy regarding flavored e-cigarette products, prioritizing enforcement against unauthorized e-cigarette products with flavors like fruit and mint, which allegedly appeal to under-age users.
  • Under the FDA’s policy, which is designed to discourage youth vaping, companies risk FDA enforcement actions if they do not cease to manufacture, distribute or sell unauthorized e-cigarette products with flavors other than menthol and tobacco by February 1, 2020.
  • The FDA emphasized that its new enforcement policy is not a ban on flavored e-cigarette products and that the FDA could approve such products after reviewing a properly submitted application as set forth in the Tobacco Control Act.