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Earlier this year, the EEOC’s Phoenix District Office filed suit against Community Care Health Network, Inc., doing business as Matrix Medical Network in Arizona, alleging Matrix violated federal law. The EEOC’s suit alleges Matrix rescinded a job offer to Patricia Pogue after discovering Ms. Pogue was pregnant.
Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978, the (“PDA”), prohibits employment discrimination based on sex, including pregnancy. Acts of pregnancy discrimination may include:
The PDA, which applies to employers with 15 or more employees, protects employees who go on leave due to pregnancy, childbirth, or a related medical condition. Employers must hold an employee’s job open on the same basis as it does for other employees who go on leave.
According to the EEOC’s suit, Matrix offered Ms. Pogue a position as credentialing manager. After Ms. Pogue accepted the offer, she informed Matrix she was pregnant and would need maternity leave. Approximately one week later, Matrix asked Ms. Pogue why she did not disclose her pregnancy during the job interview. Matrix then rescinded the job offer.
The EEOC’s suit against Matrix seeks back wages, compensatory, and punitive damages for Ms. Pogue. Further, the EEOC is seeking a permanent injunction enjoining Matrix from engaging in any discriminatory practices based on a person’s sex, including pregnancy.
The EEOC has focused in on PDA discrimination cases during the past couple of years. The EEOC receives, on average, more than 3,500 charges of pregnancy discrimination each year. In 2017, the EEOC settled multiple pregnancy discrimination cases for a total amount of $15 million in monetary damages.
All employers, including medical practices, should institute and carry out policies and practices to prevent pregnancy discrimination in the workplace. Employers that would like more information about pregnancy discrimination, including advice on creating and implementing effective anti-discrimination policies, may contact the attorneys at Milligan Lawless for assistance.
Effective January 1, 2019, Arizona-based small employers will be required to provide continuation of employer-sponsored health plan benefits to qualifying former employees and their covered dependents. Currently, employers who employ at least 20 employees (as calculated by determining the number of employees employed on more than fifty percent of the employer’s typical business days in the previous calendar year) are required to offer continuing group coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA or “federal COBRA”). Arizona’s new law, referred to as a “mini-COBRA,” will apply to employers with at least one but not more than 20 employees during the preceding calendar year.
Under the law, former employees who elect to continue coverage will receive benefits at the group cost, including the employer’s contribution and administrative fee (capped at five percent of the premium). To be eligible for continued coverage under the new law, employees and their covered dependents must 1) be enrolled in a group medical insurance plan for a minimum of three months, 2) be ineligible for Medicare coverage, and 3) experience a “Qualifying Event” thereafter losing coverage. The law defines a “Qualifying Event” as follows: voluntary or involuntary termination of employment for a reason other than gross misconduct or reduction of hours required to quality for coverage;divorce or separation from the employee; death of the employee; the employee becomes eligible for Medicare coverage; a dependent child ceases to be a dependent child under the insurance plan; a retired former employee and his or her dependents lose coverage within one year before or after the employer files for bankruptcy.
Within 30 days of the occurrence of a Qualifying Event, mandated employers must provide written notification to an employee of his or her right to continue coverage(though the law considers a written notice timely if it is postmarked within 44 days of the Qualifying Event and mailed to the employee’s last known address).In the event that a covered dependent resides at a different address than the employee, the employer must deliver a separate written notice to the dependent. The written notice must inform the employee and his or her dependents of their right to continue coverage, the amount of the full cost of coverage (including the employer’s administrative fee), the process and deadlines for electing continuation of coverage, the dates and times for making payments, and the consequence for failure to pay in a timely manner (i.e., loss of coverage). For those employees and/or dependents receiving mini-COBRA coverage, employers are also required to provide at least 30 days advance notice of any changes to coverage (e.g., rates, plan, benefits,etc.).
To continue coverage, employees must provide written notification to the employer within 60 days of the date of the employer’s notice. After electing coverage, employees have 45 days to submit the initial premium to the employer. Mini-COBRA coverage terminates upon the earliest of the following events: 18 months following the commencement of coverage; the employee’s failure to timely pay premiums; the date on which the employee or a covered dependent becomes eligible for coverage under Medicare, Medicaid, or any other health benefit plan (with respect only to that person); the date on which an employer terminates coverage under the health benefit plan for all employees (the employee and covered dependents are eligible to participate in a replacement plan); or the date a dependent child would otherwise lose coverage under the terms of the health benefit plan due to age (with respect only to that dependent child). In the event that a covered dependent is deemed disabled at the time of the Qualifying Event, the dependent may be eligible for extended coverage.
Mini-COBRA Broken Down
Continued Coverage: Employees and their covered dependents receive continued employer-sponsored health plan benefits at the group cost.
Mandated Employers: Employers with at least one but no more than 20 employees during the preceding calendar year.
Eligible Employees: Employees must be covered under a group medical insurance plan for a minimum of three months; ineligible for Medicare coverage; experience a Qualifying Event.
Notification Requirements: Employer’s notice required within 30 days of the Qualifying Event. Separate notice required if a covered dependent resides at a different address.
Employer’s Administrative Fee: Capped at five percent.
Election of Coverage: Employees have 60 days from the date of employer’s notice to submit written notice of their desire to continue coverage. Initial premium is due within 45 days of electing coverage.
How Long Does Coverage Last: Generally 18 months, though coverage time may vary under certain circumstances.
Employers who would like more information about Arizona’s mini-COBRA law are encouraged to contact the attorneys at Milligan Lawless for assistance.
If you are a member or manager of an Arizona limited liability company (or professional limited liability company), your obligations may be significantly expanded under a law that begins to take effect as early as August of 2019. This article summarizes the impact of the new law relating to fiduciary duties of members and managers, and provides some thoughts as to how you can understand and manage those obligations.
Fiduciary Duties Defined
A fiduciary, in simple terms, is a person who owes to another person certain duties, such as good faith, trust, special confidence, and candor. In the business context, fiduciary duties help ensure that each officer, director or manager of a business is acting in a manner that is consistent with the company’s objectives and the interests of other owners. Under Arizona law directors and officers of corporations, and members of a partnership have long been deemed to owe fiduciary duties to the corporation or partnership. Until relatively recently, it had been unclear whether managers or members of Arizona LLCs owe fiduciary duties to the company and the other members. There had not been a statute addressing the issue, and Arizona case law had generally been interpreted so as not to impose fiduciary duties on LLC members unless the Operating Agreements imposes such duties on the members.
Imposition of Fiduciary Duties on Members or Managers of LLCs
On April 10, 2018, Arizona Governor Ducey signed the Arizona Limited Liability Company Act (ALLCA). ALLCA will apply to all Arizona LLCs formed after August 31, 2019; on August 31, 2020, Arizona’s current LLC law will expire, and ALLCA will apply to all Arizona LLCs, regardless of their date of formation. One notable change brought about by ALLCA is the imposition of fiduciary duties on members and managers of Arizona LLCs. Under ALLCA, fiduciary duties will be imposed on members and managers if: (1) the LLC does not have a written Operating Agreement, or (2) if the LLC has an Operating Agreement that is silent on the subject of fiduciary duties.
For Members in a Member-Managed LLC
Under ALLCA, members of a member-managed LLC will owe a duty of loyalty and a duty of care to the LLC and to the other members; in addition, the members will be obligated to act in a manner consistent with a contractual obligation of good faith and fair dealing. See A.R.S §29-3409.
For Managers in a Manager-Managed LLC
Similarly, a manager of a manager-managed LLC will owe the LLC and the members essentially the same duties of loyalty and care as the members in member-managed LLCs owe to the company and to one another. A manager must also discharge his or her duties and obligations under the ALLCA in a manner that is consistent with the obligation of good faith and fair dealing. In a manager-managed LLC, the members will not owe fiduciary duties to one another solely because they are members of the LLC; the existence and scope of any fiduciary duties of a member in a manager-managed LLC will depend on the extent to which the member controls or participates in the management of the company.
Eliminating or Altering Fiduciary Duties in the Operating Agreement
An Arizona LLC can depart from certain ALLCA provisions in the LLC’s Operating Agreement, and with the exception of a few items, the LLC’s Operating Agreement will supersede the provisions of the ALLCA. A.R.S. §29-3105; See A.R.S. §29-3409(F) and A.R.S. §29-3409(N). This means that certain of the duties imposed under the statute can be expanded, limited or eliminated by the Operating Agreement. The Operating Agreement cannot, however, eliminate the managers’ or members’ contractual obligation of good faith and fair dealing, or the duty to refrain from willful or intentional misconduct.
To ensure that any fiduciary duties imposed on you as a member or manager of an Arizona LLC are aligned with your interests as a member or manager, you should consider whether you want to be bound by the provisions of ALLCA relating to fiduciary duties. If you want to modify or eliminate those duties, to the extent permissible under ALLCA, please contact us or another legal adviser.
This article is made available for informational purposes only and is not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
 Arizona law recognizes an implied covenant of good faith and fair dealing in every contract; this covenant obligates parties to a contract to act in good faith, and in a manner that is consistent with fair dealing.
The law mandates that, beginning October 1, 2017, physicians must consult a prescription monitoring program (PMP) prior to prescribing an opioid analgesics or benzodiazepine in schedules II-IV.
Under the new regulations, Arizona health care institutions must establish and implement more comprehensive plans and procedures for prescribing or ordering an opioid or administering an opioid.
Physicians who prescribe opioids, and health care institutions licensed by Arizona’s Department of Health Services, should be aware of this new law, and new rule. If you have any questions regarding these new laws, or would like assistance with updating your policies and procedures to conform to these requirements, please feel free to contact Milligan Lawless.
 SB 1283 (2016), signed by Arizona Governor Doug Ducey in 2016 amended A. R. S. § 36-2606.
 9 AZ Adc. Ch.10, Ariz. Admin. Code R9-10-120.
In November 2016, Arizona voters passed a ballot initiative (Proposition 206) for a statewide sick time law and annual increases to the minimum wage. The new law, entitled the Fair Wages and Healthy Families Act, takes effect on July 1, 2017. The purpose of this article is to provide an overview of the law’s paid sick time requirements and the steps employers should be taking to ensure compliance with those requirements.
Take note that the following information is intended as a summary only. Employers are strongly encouraged to seek legal counsel should they have additional questions regarding the new law’s requirements. Additionally, employers should be aware that certain requirements may be subject to changes or further clarification as the courts and the Industrial Commission provide additional guidance on the new law.
What is Paid Sick Time?
The new law requires employers to provide paid sick time to all full-time, part-time, and temporary employees. Paid sick time, which must be compensated at the employee’s current pay rate, may be used for the following reasons:
The law broadly defines “family member” to include children and stepchildren of any age, parents and stepparents, spouses and domestic partners, grandparents, siblings, in-laws, and other individuals related by either blood or affinity whose close association with the employee is the equivalent of a family relationship.
What Arizona employers are subject to the paid sick time requirements?
Virtually all employers, including small businesses, are subject to the law’s requirements. State and federal employers are exempt.
How much sick time does the law provide employees?
Regardless of the size of the employer, employees must accrue paid sick time at the rate of no less than one hour for every 30 hours worked.
Employees working for employers with 15 or more employees are entitled to accrue and use up to a maximum of 40 hours of paid sick time per year.
Employees working for employers with less than 15 employees are entitled to accrue and use up to a maximum of 24 hours of paid sick time per year.
Accrual of paid sick time begins July 1, 2017. Employees may use paid sick time as soon as it is accrued; however, employers may require employees hired after July 1, 2017 to wait 90 calendar days after the start of employment before using accrued paid sick time.
What if an employer already provides paid time off to employees?
If employers already have policies that provide paid time off in an amount that meets or exceeds the law’s minimum requirements (and that can be used for the same purposes specified by the law), they are not required to provide additional paid sick time to employees.
Additionally, the law does not prohibit or discourage employers from implementing more generous paid leave policies, i.e., providing employees with paid time off above the law’s minimum requirements.
What if an employee has unused paid sick time at the end of the year?
The new law provides employers with two options regarding an employee’s accrued, unused paid sick time:
Regardless of what option an employer chooses, employees are still only entitled to use the amount of paid sick time required under the law (up to a maximum of 40 hours per year) unless the employer has provided a higher limit.
Employers are not required to pay an employee for any accrued, unused paid sick time upon termination of the employee’s employment. If the employee is rehired by the employer within nine months of the termination of employment, however, the employee’s previously-accrued paid sick time must be reinstated.
How does an employee request use of paid sick time?
Employees may submit requests to use paid sick time orally, in writing, electronically, or by any other means acceptable to the employer. When the need to use paid sick time is foreseeable, an employee must make a good faith effort to provide advance notice and should attempt to schedule such time in a manner that is not unduly burdensome to the employer’s operations. When the need to use paid sick time is not foreseeable, an employer may only require advance notice if it has previously given the employee a written policy outlining the procedures for providing advance notice.
Employers cannot require that employees find a replacement worker when requesting use of paid sick time.
Can employers require employees to document or discuss the details of a need to use paid sick time?
In the event that an employee uses paid sick time for three or more consecutive work days, employers may require reasonable documentation that the paid sick time was used for one of the reasons specified under the law.
Employers cannot require employees to specify the relevant health issue or the details of domestic violence, sexual violence, abuse, or stalking that gave rise to the need to use paid sick time.
Are employers required to give employees notice of their rights under the new law?
At the commencement of an employee’s employment or by July 1, 2017, whichever is later, employers must provide employees written notice of the following:
Industrial Commission Labor Department
800 West Washington Street
Phoenix, Arizona 85007
The notice should be posted alongside other required workplace notices/posters.
Are there other recordkeeping requirements?
Employers must provide employees with the following information either in or on an attachment to the employee’s paycheck:
What are the consequences for failing to comply with the law’s requirements?
The law prohibits discrimination and retaliation against employees who use or request paid sick time. Paid sick time counts as a protected absence and cannot lead to any disciplinary or adverse action against an employee. The law creates a rebuttable presumption that any adverse employment action taken within 90 days of an employee’s use of paid sick time is retaliatory. An employer must show by clear and convincing evidence that the adverse employment action was not in retaliation for the employee’s use of paid sick time.
Employers who fail to comply with the law’s requirements are subject to the following:
What should employers do to prepare for the new law?