The United States Senate recently passed a landmark bill that gives workers substantially more protection in cases where they allege that they were victims of sexual assault or harassment in the workplace. This vote comes on the heels of the House of Representative’s prior overwhelming approval of it (335-97), and President Biden has indicated his strong support for the bill. Employers, therefore, should now start to think about the ramifications this bill will have in their workplaces and on their employment contracts with the approximately 60 million employees who may be affected by this new law.

Specifically, this bill – which is a milestone in the #MeToo movement – allows employees to bring their harassment claims in the courts instead of in private arbitration settings which have historically favored employers. Proponents of the bill argued that employment contracts that required these types of claims to be solely brought in secret arbitrations instead of in the courts had a chilling effect on employees coming forward to report harassment. It also resulted in a culture where serious allegations of misconduct never saw the light of day in a courtroom or by a jury, but were instead heard by private arbitrators in closed proceedings. But, by making it illegal for employment contracts to require arbitration for these types of claims, the bill is expected to result in a substantial increase of lawsuits against employers.

Finally, not only does the bill prohibit employers from inserting mandatory arbitration clauses for these types of claims in future contracts, it retroactively makes existing arbitration clauses illegal and unenforceable. Laws rarely have retroactive effect, so Congress’s decision to make these prohibitions retroactive shows how groundbreaking this bill is and the significant effects it will have on workers and employers. If employers have not done so already, they should immediately assess the impact this bill will have on their existing and future employment contracts with their employees and make any necessary adjustments to ensure compliance.

If you have questions and would like further information, please contact PLDO Partner Brian J. Lamoureux at 401-824-5100 or email bjl@pldolaw.com. Attorney Lamoureux is a member of the firm’s litigation, employment, and cybersecurity teams.

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TREASURY FINAL RULE PROVIDES MORE FLEXIBILITY TO LOCAL GOVERNMENTS IN THE USE OF AMERICAN RESCUE PLAN FUNDS

In January 2022, the U.S. Department of Treasury issued the long-awaited Final Rule (FR) for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), which is a part of the American Rescue Plan. The SLFRF permits $350 billion to be allocated nationally—from which the State of Rhode Island will receive approximately $1.1 billion and local municipalities will be sharing about $542 million. Importantly, the funds must be used for costs incurred on or after March 3, 2021, the funds must be obligated by December 31, 2024, and the funds must be expended by December 26, 2026.

The FR includes key changes and clarifications from the Interim Final Rule (IFR) and will take effect on April 1, 2022. However, recipients of the funds may begin following the FR immediately if they so choose. While the FR provides additional flexibility and clarity, it is crucial that government officials continue to utilize these funds properly, as there are still restrictions on the use of the funds. PLDO Partner Allan W. Fung discusses the eligible uses of the funds in his latest advisory, Treasury Final Rule Provides More Flexibility to Local Governments in the Use of American Rescue Plan Funds.

For more information about the SLFRF program, contact Attorney Fung, please call 401-824-5100 or email afung@pldolaw.com.

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In order for an investor to determine and validate that a company is worth making an investment, they must go through a process called “due diligence.” Due diligence is a crucial exercise of care that all investors should take before investing in a business. Legal due diligence is performed by lawyers; however, equally important is the due diligence performed by the investor prior to signing an agreement.

The process of conducting due diligence is a structured approach to carefully examining every part of a business, essentially putting potential deal partners under the microscope in order to verify all of the relevant facts about the company, including corporate governance, management, key employees, financial stability, risk factors, as well as the potential for future growth and profitability. The purpose of this exercise is to find out everything that a reasonable person should know before actually making the investment.

For more information on the process, structure and management of due diligence, read PLDO Managing Principal Gary R. Pannone’s advisory Managing the Due Diligence Process for Investors and Entrepreneurs. To contact Attorney Pannone, please call 401-824-5100 or email gpannone@pldolaw.com.

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The short-term rental industry is a booming industry in Rhode Island, particularly in coastal cities such as Newport and Narragansett. In fact, Airbnb announced in December of 2021 that their hosts in Rhode Island have earned $210 million since 2010. However, with the industry’s growth, it was inevitable that the short-term rental market will become more regulated.

On January 4, 2022, a new law was enacted in Rhode Island creating a mandatory registration program for short term rentals that are listed for rent through housing platforms such as Airbnb and VRBO. This law was initially passed by the General Assembly on July 1, 2021, but Governor Dan McKee vetoed the legislation. The General Assembly then overrode the veto, enacting the law by codifying amendments to Rhode Island General Laws §42-63.1-14. Under this new legislation, “[a]ny short-term rental property listed for rent on the website of any third-party hosting platform that conducts business in Rhode Island” is now required to be registered with the Rhode Island Department of Business Regulation (“DBR”). When registering the short-term rental owner is required to provide:

1. The principal place of business of the owner, or if outside the state, the agent for service of process or property manager for the owner;
   
2. The phone number of the owner of the property and/or property manager;
   
3. The email address of the property owner and/or property manager;
   
4. The address of the rental property;
   
5. The number of rooms for rent at the property;
   
6. Whether the registrant rents or owns; and,
   
7. Intended use (entire space, private room or shared space).

This information will be stored in an online database created by DBR. Any short-term rental property that fails to register will be fined $250 for the first 30 days of noncompliance, $500 for 60 days of noncompliance, and $1,000 for more than 60 days of noncompliance.

It appears that the reasoning behind this legislation is to ensure short-term rental owners are complying with tax and safety regulations and that the owner’s contact information will be accessible for emergencies. This is not a new concept, as many towns and cities, including Newport, Narragansett, and Portsmouth, have already required short-term rental owners to register on the municipal level.

For assistance in navigating this new regulation in the short-term rental market, please contact Attorney Katherine B. Dunn at 401-824-5100 or kdunn@pldolaw.com.

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STAY INFORMED – PLDO COVID-19 RESOURCE LIBRARY

PLDO’s team of attorneys continue to add updates and advisories regarding the pandemic and its impact on families, businesses and organizations. To access our COVID-19 Resource Library, click here.

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