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May 2020 Legal Report

Judicial Decisions

Human trafficking. Lisa Ricchio settled a lawsuit against a Massachusetts motel where she was held against her will for at least four days by a man who physically and sexually assaulted her.

Ricchio alleged that at least twice while she was trapped in June 2011, motel employees, including one of the owners, saw she was in trouble but did not help her. She sued the Shangri-La Motel and its owners under the Trafficking Victims Protection Act, claiming the owners financially benefitted from her captivity. According to the complaint, the owners were aware of the man’s trafficking-related actions.

After approximately five years, which included several dismissals and appeals, the parties settled with Ricchio for an undisclosed amount. This was the first time a hospitality facility was sued for its part in a trafficking crime in the United States in an attempt to hold the business liable for knowing or having the responsibility to be aware of the crime. (Lisa Ricchio v. Bijal, Inc. d/b/a Shangri-La Motel, et al., U.S. District Court District of Massachusetts, No. 1:15-cv-13519, 2019)

Hate crime. A U.S. federal jury found a Utah man guilty of committing hate crimes for attacking three men with a metal pole.

In November 2018, Alan Covington attacked the men in a tire store, shouting he wanted to “kill Mexicans.” After hitting at least two employees in the store and another person who tried to intervene in the attack, police apprehended Covington with the metal pole and a hatchet in his possession.

As of Security Management’s press time, a sentencing date was not set. Covington could receive up to life in prison and a fine of $250,000. (United States v. Alan Dale Covington, U.S. District Court for the District of Utah, No. 2:19-cr-00057-HCN-CMR, 2020)


United States

Supply chain. U.S. President Donald Trump signed legislation into law to protect communications systems from threats presented by untrustworthy suppliers.

The Secure and Trusted Communications Networks Act of 2019 (P.L. 116-124) is a bipartisan attempt to secure the U.S. telecommunications supply chain from malicious foreign interference. The law prevents federal subsidies from being used to purchase communications equipment or services that pose a national security risk. It also sets up a reimbursement program to replace communications equipment or services already installed that pose these risks.

U.S. telecommunications companies largely rely on materials manufactured by foreign companies, including those based in China. U.S. Representative Frank Pallone, Jr. (D-NJ), introduced the bill to address the threat this supply chain structure poses to American commercial and security interests.

“The existence of this equipment in American networks is a threat to the critical infrastructure components that we use every day,” Pallone said in a statement. “We simply cannot allow China, and other bad actors, to infiltrate our telecommunications systems, and that’s why we must help smaller carriers remove this suspect equipment from their networks.” Pallone, who chairs the House Committee on Energy and Commerce, was joined by Representatives Greg Walden (R-OR), Doris Matsui (D-CA), and Brett Guthrie (R-KY) in sponsoring the bill.


United Kingdom

5G. The United Kingdom will allow high-risk vendors that pose security and resilience risks to U.K. telecoms networks to supply some materials for the country’s new high-speed 5G wireless network.

These vendors will be barred from accessing critical network areas and limited to providing materials for only specific portions of the network, including antennas and base stations, which are not considered a threat to the wireless system’s integrity, according to a press release from the U.K. Department for Digital, Culture, Media, and Sport.

The United Kingdom will also prohibit contracts with high-risk vendors from exceeding 35 percent of the network’s market share. High-risk firms are also barred from providing technology or supplies to certain locations, for example military bases.

The decision means that Huawei, a controversial Chinese telecommunications company, will be allowed to supply some materials for Britain’s 5G network. Ciaran Martin, head of Britain’s National Cyber Security Centre, said Huawei’s technology does not present a security risk, because any potential security issues are manageable. Meanwhile U.S. officials allege the company not only maintains strong ties to the Chinese government but is effectively part of the state, and that Huawei’s access to countries’ networks could allow for intelligence sharing, according to the CIA and FBI. Huawei maintains that it is a private company.

United States

E-commerce. U.S. President Donald Trump authorized new rules to fight trafficking of counterfeit items, contraband, and pirated goods affecting e-commerce and online third-party platform businesses.

Executive Order 13904—Ensuring Safe and Lawful E-Commerce for United States Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights Holders—calls for U.S. government departments and agencies to address U.S. businesses involved in importing illegal goods.

Under the order, the U.S. Department of Homeland Security (DHS) is tasked with ensuring that liability for transporting counterfeit or stolen goods extends to importers and brand owners, as well as e-commerce platforms, government contractors who also serve as importers, and service providers in the global supply chain for services including warehouses, customs brokerages, and transportation.

Violators could be barred from participating in certain transactions with the U.S. federal government or from importing goods into the United States. The U.S. Department of Justice (DOJ) would also be alerted about any customs actions that violate the False Claims Act.

Other DHS measures incorporated into the executive order include increased scrutiny on import entries worth up to $800 and pursuing civil and criminal fines, penalties, and injunctions against third parties dealing in illicit goods.

As part of the order, the U.S. Postal Service will work with the U.S. State Department to extend importer of record requirements to international postal shipments, as well as monitor for international posts that fail to comply. The importer of record (the entity or individual responsible for entry documents required by the U.S. government) was previously the primary party that could be held liable for illegally importing goods. Under the executive order, that liability for enforcement now includes parties such as service providers, who can be held responsible for negligence or facilitating contraband or pirated goods.

The order is expected to slow down the entry of some counterfeit product shipments due to increased inspections and enforcement measures.

Child labor. The U.S. state of Massachusetts fined fast food chain Chipotle $1.4 million for approximately 13,000 instances where teenaged employees worked more than 48 hours per week, as well as too late on school nights.

The incidents occurred between 2015 and 2019 at more than 50 corporate-owned locations in Massachusetts, in violation of the state’s child labor laws. Chipotle was also fined for violating sick-time rules and failing to pay employees in a timely fashion.

As part of the settlement, Chipotle is required to put $500,000 towards a fund overseen by the Massachusetts Attorney General’s Office to educate people about child labor and enforcement laws, along with training and workforce development for young workers.

Elsewhere in the Courts

Disability discrimination. A senior living care facility will pay $2 million to settle a disability discrimination lawsuit. According to the U.S. Equal Employment Opportunity Commission, Prestige Care, Inc., Prestige Senior Living, LLC, and their affiliates failed to provide accommodations for disabled employees while on the job and fired employees with disabilities. These practices were in line with the companies’ “inflexible leave policies,” the suit said. Along with the financial award, the companies will retain an external equal employment opportunity monitor to review and revise their policies to ensure compliance with the Americans with Disabilities Act. (EEOC v. Prestige Care, Inc., et al., U.S. District Court Eastern District of California, No. 1:17-cv-01299-AWI-SAB, 2020)

Retaliation. The Global Ministries of the United Methodist Church, Inc., settled a retaliation discrimination suit with a $50,000 award. According to the lawsuit filed by the U.S. Equal Employment Opportunity Commission, Global Ministries fired its communications specialist and program area liaison Ivy Couch after she complained multiple times to Human Resources about race discrimination and retaliation. Aside from the monetary relief, the organization will also provide employment discrimination training, post notices on its anti-discrimination and anti-retaliation policies, and other reporting and monitoring requirements. (EEOC v. General Board of Global Ministries of the United Methodist Church, Inc., U.S. District Court Northern District of Georgia, No. 1:19-cv-2989-MHC-CMS, 2020)

Religious discrimination. The U.S. Supreme Court will not consider an appeal filed by a former Walgreens employee who claimed the company violated his religious rights as a Seventh-day Adventist observing the Sabbath (sundown on Friday to sundown on Saturday). Darrell Patterson alleged Walgreens did not sufficiently attempt to accommodate his request to not work on Saturdays. Walgreens claimed it accommodated Patterson until he was fired for failing to report to work for an urgent Saturday training session. The lower court’s ruling will be upheld, maintaining that Patterson’s demands to never work on a Saturday placed an “undue hardship” on the company. (Darrell Patterson v. Walgreen Co., U.S. Court of Appeals for the Eleventh Circuit, No. 16-16923, 2020)