young

SOUTH CAROLINA lawyer younglawyer ySOUTHou CAROLINAnglawyer MAY 2020 VOL. 12, ISSUE 3 A REPORT TO MEMBERS OF Was an independent contractor THE SOUTH CAROLINA BAR or an employee of the Rebel Alliance YOUNG LAWYERS DIVISION Yunderou then Fairg Labor L Standardsaw Act?yer By Jeremy R. Summerlin

You know you’ve always wanted to know the answer to this question, but because you wanted friends in the real world, you’ve kept this desire stuffed down deeper than the Spice Mines of Kessel. How else could you expect to impress a potential mate unless you can provide a detailed legal and in-universe explanation for one position or another that does not violate sa- cred canon? You can’t, of course, which is why you’re here. They don’t call me the Juris Doctor of Love for no reason. In fact, they don’t call me that for any rea- YOson at all.U Or at all,N period. Nonetheless,G it’sL AWYER on my business cards. Seriously though — and I do take this far more seriously than is healthy — the and debonair employment law attorney in answer depends on which movie we look South Carolina for the answer. That person at in the ever-increasing Star Wars film wasn’t available, so he contacted me. universe. So for this article, we will con- sider just the firstStar Wars: Episode IV: A Episode I. What makes Han Solo an New Hope: The One Where Han Shot First (In independent contractor or employee? Some Versions): A Star Wars Story: Being the “Control, control, you must learn that First Part of the Lord of the Rings. CONTROL” is the key to determining Oh, Han Solo: smuggler, scoundrel, whether the person is an independent con- scruffy-looking nerfherder. Until the start tractor or employee. The Imperial Internal of Star Wars: A New Hope, he’s a down-on- Revenue Service (IRS) has issued guidance his-luck outlaw with a price on his head for the general analysis of employee v. in- larger than a fanboy’s expectations of Sea- dependent contractor matters. See www.irs. son Two of : Baby Yoda’s gov/businesses/small-businesses-self-em- Cutest Little Revenge. Until, that is, an agent ployed/independent-contractor-self-em- of the Rebel Alliance, the lonely, wan, ployed-or-employee. Two key factors noted only one Obi-Wan Kenobi, makes a propos- by the IRS are (a) control over the person’s al: transport humans and cargo past the behavior and (b) control over the financial South Carolina Young Lawyer is published quarterly by the Young Lawyers Division Imperial patrols and deliver them safely to and business aspects of the employee’s job. of the South Carolina Bar, 950 Taylor St., Alderaan. Han Solo’s first question, logical- In other words, is the person permitted P.O. Box 608, Columbia, SC 29202-0608. www.scbar.org. Copyright © 2018 South ly and cinematically, is whether he would to exercise complete discretion in getting Carolina Bar. The opinions expressed are be an employee or an independent contrac- the work done and in how the person gets those of the authors and do not represent the opinions or policies of the Young tor in this scenario, and given his business paid? If not, then the person is more likely Lawyers Division or the South Carolina Bar. savvy, he immediately contacted a skilled, an employee. Unauthorized reproduction or use of the talented, sophisticated, handsome, dashing, (Continued on page 3) materials contained herein is prohibited.

WWW.SCBAR.ORG/YLD 1 Spotlight on the ABA YLD Scholars Program

get to know our fellow scholars be- cause our conference days are usually packed with back to back meetings. As a huge proponent of Diversity and Inclusion in the legal profession, I was selected to work alongside both the Diversity and Inclusion (D&I) Team and Board. I was fortunate to work closely with the Diversity and Inclu- sion Director, Tamara Nash who served as an amazing mentor during this pro- cess. I have assisted with various D&I programing throughout the year. Cur- rently, I am collaborating with the D&I Team on our Webinar “Underrepresent- ed Representatives: How to Navigate a Profession that Doesn’t Look Like You” which will be implemented this upcoming summer on July 15, 2020. The Mid-year Meeting was hosted in Austin, Texas. During the Mid-year Meeting, I attended several events including, Council Meeting, the Pres- ent and Powerful Speaker Series that Have you heard of the ABA YLD Scholars Program? Read below about one of discussed 100 Years of Women in Pol- South Carolina’s very own young lawyers, Lauren Barnes’ experience as an ABA itics, and the YLD Diversity Dialogue YLD Scholar! Breakfast. As scholars, we were also able to certify as delegates and partici- About the ABA YLD Scholars institution, concerning the different pate at the ABA YLD Assembly, which Program facets of the legal profession. This year, is the principal policy-making body of This past year, I was selected as WDLD reached out to middle and high the ABA YLD. It serves as a gathering an American Bar Association Young school students. Each scholar must of young lawyers representing affiliat- Lawyers Division 2019-2020 Diversity implement a WDLD program in their ed national, state, local, affinity, and Scholar. The ABA YLD Scholars Pro- area before the close of the bar year. specialty bar associations from across gram is designed to encourage active Unfortunately, due to COVID-19 and the country. During Assembly, many participation of minority attorneys in school cancellations, majority of schol- issues of importance to young lawyers the Young Lawyers Division. Scholars ars (including myself) were unable to are formed into resolutions, debated, attend the YLD Fall Conference in complete the WDLD programing and and then voted on. All debates are October, Midyear Meeting in February, fulfilled an alternative requirement. To conducted in accordance to the Rules and the Spring Conference in April. learn more about WDLD programming, of Parliamentary Procedure with time Each year, 16 scholars are selected check out: www.americanbar.org/ given to both pro and con speakers, as based on professional excellence, groups/young_lawyers/projects/diver- appropriate. The resolutions are then public service, and bar involvement sity/what-do-lawyers-do/. voted on by all YLD Assembly dele- history. The Scholars program is from gates. In order for any external policy September 1-August 31. During my My experience position approved by the YLD to take scholar year, I have had the opportu- The Fall Conference was in “The effect, it must also be passed by the nity to learn, interact, and network Big Easy” New Orleans, Louisiana. I at- ABA house of Delegates, which is the with various YLD leaders and emerging tended various CLE programming and primary policy-making body of the leaders in the division. the “What Do Lawyers Do?” (WDLD) ABA. More information can be found Additionally, the ABA YLD has event at Dillard University. Walmart at: www.americanbar.org/groups/ implemented a diversity pipeline graciously sponsors our Scholars Din- young_lawyers/leadership/assembly/. program entitled “What Do Lawyers ner at each conference. During these By taking part in this event, we Do?” (WDLD). The program is aimed at intimate scholar dinners, we interact had the opportunity to have our voice providing information to college (un- with Walmart attorneys and debrief on heard and to help shape the profes- dergraduate) students, particularly stu- our scholar requirements and goals we sion. Resolutions considered this term dents attending a historically Black col- plan to fulfill during our scholar year. included parental leave in the legal lege or university or a Hispanic serving Additionally, this is a time where we profession, young lawyer participa-

2 WWW.SCBAR.ORG/YLD tion prioritization, and many others. Han Solo Episode III. Can a person’s status The ABA YLD unanimously passed Continued from page 1 change from independent con- Constitutional Amendment 11-5. This tractor to employee? Resolution amends the ABA YLD’s The U.S. Department of Labor also Yes, if the level of control changes Bylaws such that all gender binary provides for a Sith-factor economic re- during the course of employment. So, language (she/her/hers & he/him/his) alities test in making an FLSA-specific in Captain Solo’s case, he begins as is changed to more welcoming gender determination: independent contractor, subject to the nonbinary terms (they/them/theirs), 1. the extent to which the work per- terms of payment of 2,000 credits to help effectuate Goal III of the ABA formed by the worker is an integral now and 15,000 when they arrive Diversity Plan. It was an incredible part of the employer’s business; safely at Alderaan. experience to participate as a delegate 2. the worker’s opportunity for profit or However, the Force has other and learn first-hand everything Assem- loss depending on his or her mana- ideas, for upon arriving at where Alde- bly entails. gerial skill; raan USED to be, the mission changes. Scholars are required to produce a 3. the extent of the relative investments Solo’s ship, with its passengers hidden written piece during their scholar year. of the employer and the worker; on board, is captured by the Empire I co-authored this year’s ABA White 4. whether the work performed by the and brought to the , which Paper entitled “A Frank Conversation worker requires special skills and leads to a rescue attempt of Princess on Diversity and Inclusion: Moving Be- initiative; Leia, a high-ranking member of the yond Lip Service.” This white paper is 5. the permanency of the relationship Rebel Alliance. part of the American Bar Association’s between the employer and worker; Once the Princess enters the effort to identify and raise awareness and picture, the level of control changes on moving beyond lip service to propel 6. the degree of control exercised or almost immediately. the needle forward and measurably in- retained by the employer over the asserts control over the mission and crease diversity in the legal profession. worker. begins bossing around Han Solzzzo Additionally, this paper seeks to pro- Let’s take a look at some of these and Luke Skywalker like she’s, well, pose ways to disseminate change and factors in the context of Han Solo’s like she’s royalty or something. At this eliminate the effects of this identifiable business relationship with the Rebel point, I would argue that Han Solo issue. This paper summarizes an event Alliance. instantly becomes an employee of the discussion hosted at the American Bar Rebellion, pursuant to Princess Leia’s Association (ABA) Midyear Meeting in Episode II. In Mr. Solo’s FLSA assertion of control over the mission. Austin, Texas, on February 15, 2020, ti- lawsuit against the Rebel Alliance (The sexual tension/harassment be- tled “Diversity Dialogue Breakfast.” The in Imperial court, what would the tween Solo and the Princess, especially candid conversation on diversity and court consider that weighs in fa- in a work context, strikes me as poten- inclusion featured industry leader Don vor of him being a contractor? tially problematic and will be addressed Prophete of Constangy, Brooks, Smith, First, the Solo Plaintiff in this case in a future article.) At the point of Prin- & Prophete, LLP based in Kansas City, has virtually no restrictions placed on cess Leia’s takeover, Han Solo becomes Missouri. his discretion in performing his mis- an employee who would be entitled to sion. The only directions he receives overtime under the Fair Labor Stan- Looking forward from Defendant Kenobi? “No questions dards Act. If Mr. Solo is Forced to file a Although a part of my scholar asked.” Solo has the discretion to de- lawsuit to receive overtime payments, experience and some of my project termine time and location for depar- he can also seek liquidated damages involvements were shortened due to ture (docking bay 94, of course), the and those sweet, sweet attorney’s fees. COVID-19, I am still grateful to have means of transport (the Millennium Fal- If there’s one idea I want you to been a part of this invaluable experi- con), and calculating the proper course take away from this much-needed ence and the new friends I have made to Alderaan, which, as we know, ain’t article, it’s this: I will do ANYTHING to along the way. I am looking forward to like dusting crops, boy. So the element avoid writing about real life legal topics serving in my new appointed 2020- of control (or lack thereof) over Solo’s when writing about Star Wars legal 2021 leadership positions for the next behavior leans in favor of an indepen- topics remains a viable option. So stay bar year. dent contractor arrangement. safe out there, my friends, and may the More information about the program Second, Solo has no restrictions Force be with you…always. and application and requirements can placed on the financial and business be found at: www.americanbar.org/ aspects of this arrangement. Solo Jeremy R. Summerlin is an expert on the groups/young_lawyers/leadership/ remains free to use his own resources myriad of important legal issues involving scholars/. and tools to accomplish the mission, as the intersection of Star Wars and em- he sees fit, and he can make all the up- ployment law. He also practices regular Lauren A. Barnes is an Assistant Attor- grades and modifications to the Falcon employment law throughout South Caro- ney General with the Prosecution Division that would be necessary. This factor lina and is married to a real-life lady who at the Office of the Attorney General, also tends to support Solo’s status of often wonders how this marriage thing where she primarily prosecutes Medicaid independent contractor. Also, his name happened anyway since she doesn’t even recipient fraud. is SOLO, so.... speak Klingon.

SOUTH CAROLINA YOUNG LAWYER 3 Spring 2020: A Time of Change and a Look into the Termination of LIBOR By Ashley Adams Brown

I would wager that all of our practices have been significantly impacted by COVID-19. Some of us no longer go into an office; whereas, others have implemented new procedures to still accommodate in-person consultations. Outside of the impact that COVID-19 has had on our daily operations, one of the biggest changes to the way the world conducts business is under way yet there seems to be little discussion on the matter given the impact for many of our clients. The London Interbank Offered Rate (LIBOR) has long been used primarily used when determining rates on various loans including residential mortgage loans, student loans and credit cards (Otten John- son Robinson Neff + Ragonetti PC, LIBOR, The Key Real Estate Lending Benchmark Rate, Is Nearing its End, (September 2018), www.ottenjohnson. com/news-events-resources/otten-john- Recession, an international investi- that replacing LIBOR could trigger neg- son-alerts/2018-otten-johnsonn-aletrs/ gation revealed that many influential ative market implications at the end of libor-the-key-real-estae-lending-bench- financial institutions were manipu- the year and waves of lawsuits. (Cruise, mark-rate-is-nearing-its-end). While most lating the process used to set interest Sinead and Lawrence White, The end commercial and residential loans are rates at a specific amount for their own of Libor: the biggest banking challenge based on a fixed interest rate, the re- profit (McBride, James, Council on you’ve never heard of, (October 8, 2019), maining portion use an adjustable rate Foreign Relations, Understanding the www.reuters.com/article/us-britain-li- which reference the LIBOR specifically Libor Scandal, (October 12, 2016), www. bor-transition-analysis/the-end-of-libor- in the Note and Security Instruments. cfr.ord/backgrounders/undertanding-li- the-biggest-banking-challenge-youve- However, after a large scandal was bor-scandal). Specifically, it has been never-heard-of-idUSKBN1WN0H4). uncovered in 2008, the LIBOR has been found that the rate was manipulated This coupled with the declining econ- the subject widespread scrutiny and, in downward so that they appeared more omy due to the massive countrywide 2017, the Financial Conduct Authority stable than they actually were during shut down due to COVID-19 could lead first stated that there would no longer 2007 and 2008. (Id.) However, despite clients to be wary to obtain, borrow, or be a requirement for banks to use the this scandal and the push to use other to become concerned post-closing once LIBOR—effectively making the index indices in the years since 2012, “the they hear of these changes later in the void due to nonuse. (Federal Housing LIBOR mechanism was kept for exist- year through the news media. Finance Agency, LIBROR Transition, ing contracts and new contracts were Moving forward, South Carolina (February 6, 2020), www.fhfa.gov/Supvi- allowed to use either the LIBOR or a Residential Real Estate Attorneys’ areas sionRegulation/LIBORTransition). But if transaction-based benchmark rate until of focus regarding the upcoming tran- you’re like me, you thought that we as the ongoing reforms of the system are sition to Secured Overnight Financing attorneys had plenty of time to digest completed.” (Id.) Rate, or SOFR should lie in counseling the changes in the law prior to affec- Now that the LIBOR is essential- those who are acquiring new Adjust- tive date of December 31, 2021. Howev- ly void due to nonuse, it has left the able Rate Mortgages and counseling er, in February 2020, it has become ap- financial market in search of a viable past clients who may call once/if parent that is not the case. Changes to substitute. (Wipf, Tom, Wave Goodbye to this transition is being more widely the documents that many of us explain Libor. Welcome its successor, SOFR., (De- discussed. One of my main concerns to our clients each day are coming in cember 6, 2019), www.bloomberg.com/ stems from that fact that the language June 2020, if not earlier. opinion/articles/2019-12-06/wave-good- used in the adjustable rate mortgages After the initial scandal was un- bye-to-libor-welcome-its-successor-sofr). which reference LIBOR, gives broad covered during the peak of the Great Some experts have expressed concerns discretion to the lender to choose a 4 WWW.SCBAR.ORG/YLD replacement index to determine the ly, there are issues with notice to the why-consumers-should-be-aware-of-li- rate on these loans in the future. borrowers or potential amendments bor%EF%BB%BF/). Luckily, the Federal Housing Financ- to the notes. (Bafna, Sapan, [PULSE] These clear and concise instruc- ing Agency, Fannie Mae, and Freddie The shift from LIBOR to SOFR is on the tions regarding new transactions will Mac have worked to solve this problem horizon - Are you ready? (February 28, make future closing table conversa- in the future by creating a model for 2020), www.housingwire.com/articles/ tions much easier for closing attorneys. a Secured Overnight Financing Rate pulse-the-shift-from-libor-to-sofr-is-on- However, questions regarding past (SOFR) based adjustable rate mort- the-horizon-are-you-ready/). However, closings may still be difficult to address gage and more specific language for the United States was one of the first beyond referring your clients to refi- these types of mortgages in the event countries to take decisive action to nance due to the uncertainty surround- a new index should need to be used move forward with the SOFR, while ing needed amendments and notice for in the future. (See LIBOR Transition). the European Central Bank started outstanding loans. It may be prudent, The New York Federal Reserve Bank’s publishing ESTR, its new interest at a minimum, to mention the change Alternative Reference Rates Commit- rate benching in October of 2019. (See in index to all mortgagors at the closing tee (ARRC) released its recommenda- Cruise, The end of Libor: the biggest table regardless of loan type. But, clos- tions on Nov. 15, 2019, which Fannie banking challenge you’ve never heard ing attorneys would be wise to review Mae and Freddie Mac quickly adopted of,). Many experts consider SOFR to be any adjustable rate notes and clearly in full. (Jaworski, Bob and Douglas a “near risk-free” option because it is go over these terms with the mort- Youngman, Libor Index Discontinuance: secured by U.S. Treasuries and based gagors — and likely send some form Impact on Residential Adjustable-Rate on actual daily transaction informa- of written communication or have an Mortgages, (December 2, 2019), www. tion as opposed to a panel of interest- acknowledgement signed for your files jdsupra.com/legalnews/libor-index-dis- ed financial institutions like LIBOR. — especially for those loans closings continuance-impact-on-76885/). The (See Bafna, [PULSE] The shift from prior to June 1, 2020. new guidelines state that if a new LIBOR to SOFR is on the horizon - Are index will be determined by the note you ready?). Ashley Adams Brown is the managing at- holder subject to certain limitations on Also, the Alternative Reference torney of Butler & College, LLC’s Bluffton their discretion and applicable con- Rates Committee (ARRC) finalized the location. She practices in residential real tractual provision. (Id.) Additionally, new fallback language for in Novem- estate and estate planning and is licensed the replacement rate shall be made ber 2019. (Alternative Reference Rates in both South Carolina and Georgia. publicly available and based on the Committee, Summary of ARRC’s LIBOR SOFR index, either by term rates or Fallback Language, November 2019, averages. (Id.) However, in the event www.newyorkfed.org/medialibrary/ that no index has been selected at the Microsites/arrc/files/2019/LIBOR_Fall- time of the needed replacement, the back_Language_Summary).) The Ad- note holder will make a “reasonable justable Rate Mortgage’s new fallback good faith effort to select the replace- language easily digestible and clearly ment.” It was the hope of the various identifies a single spread-adjusted entities working to establish this new SOFR rate as the replacement rate. (Id.) language that it would give consumer This new language will be required for greater insight into how a replacement single-family uniform Adjustable Rate rate would be chosen in advance of the instruments closed on or after June need to do so. (Id.) These fallbacks - 1, 2020, and to be eligible for acqui- H originally designed to kick in if LIBOR sition, all LIBOR-based, single-family was temporarily unavailable - usually and multifamily ARMs must have loan Stars of the stipulate alternative rates, such as call- application dates on or before Sep- ing other banks for a quote or using tember 30, 2020 as the acquisition of Quarter the last published Libor rate. But the all LIBOR ARMs will not be permitted fallback clauses were not designed to no later than December 31, 2020. (See cope with Libor ceasing to exist indef- Bafna, [PULSE] The shift from LIBOR to Taylor Gilliam initely. That could create big risks for SOFR is on the horizon - Are you ready?). borrowers, for example, by potentially Although, the new language will be converting a “floating rate” loan, tied implemented shortly, some predict Sterling Moose to the fluctuations of Libor into a fixed- that litigation may result depending on rate one. (Id.) the exact language used in the existing Blair Streitenberger Many experts in the financing security instrument once replacement industry suspect that old notes may events take place. (Schenck, James, have to go through a manual review Why Consumers Need to Be Aware of Sutania Fuller and many legal and compliance ex- LIBOR, Forbes Finance Council Post, perts questions the logistics for updat- (January 5, 2020), https://reversemort- ing those outstanding liens. Specifical- gagedaily.com/2020/01/05/forbes- Mary Lee Briggs

SOUTH CAROLINA YOUNG LAWYER 5 Visit www.scbar.org/yld to sign up!

6 WWW.SCBAR.ORG/YLD Letter from the President

about the great things we as a Division have done and will do for each other and our communities during this time. I think about the recent award we received from the American Bar Asso- ciation YLD — an affiliate Star of the Quarter for our Diversity Committee’s, “How ____ Can You Be?” program. I think about our VITA committee, which has pivoted and found a way to virtually prepare tax returns for our state’s most vulnerable populations during this unprecedented time. Our Membership Committee was able to host two successful programs as part of their “Focus on the Lawyers as a Whole” series. Our Community Law Week committee is being agile and adapting their programs for this new era. Despite the circumstances, our Di- vision is committed to being as impact- ful as we can to our members and our communities. Dear Young Lawyers: we believe grief only emanates from During this time, I’m reminded When I began writing this letter death, and we discount its presence of the translation of our state motto, (let’s be honest, in my head) a few in other losses, when in truth, we feel “While I breathe, I hope.” And, while months ago, it had a very different grief whenever we lose something. I found this phrase to be encouraging tone. It had a different message. It was YLD members, let’s face it — we’ve during “normal” times, it has, much really hopeful about the upcoming all lost something in the past few months. See, this time of the year is like most things in my life, taken on when YLD really gets going. Tradition- weeks. Whether it’s our jobs, our au- a whole new meaning recently. No ally, YLD hits its stride in the second tonomy, the ability to work out of the matter how bad we think things are, we part of the Bar year. This year was no home, the ability to work without hav- must always try to have hope. It may exception, our committees had some ing to home school children, the ability seem corny, but it is true. We can hope excellent things planned. to help others, the ability to go to estab- for things to return to normal, we can And then COVID-19 struck. lishments without government inter- have hope in the future, hope for a vac- Just like that (imagine me snapping vention, and heaven forbid, the people cine, hope we don’t get asked to do a my fingers here), our lives were turned close to us — we’ve all lost things. We TikTok challenge, or hope for a virtual upside down. We are all navigating this all have likely approached this in two happy hour with friends. Having hope “new normal.” In just a short time, the different ways — either we’ve mini- gives us something to look forward to ways in which we live and work have mized the impact of these losses, or even when things seem the darkest. drastically changed. The things we we’ve fully leaned into the devastating So, while I breathe, I hope. I hope have hoped to do, and even the things impact of these losses. Whichever path that you and your families are safe. I we took for granted that we merely we have taken, we must first acknowl- hope that we survive and thrive in this “got” to do, have seemingly become edge that we are going through some- “new normal.” I hope that the effects of this pandemic are not too far-reaching. distant memories. thing difficult and find ways to cope I hope that we have another Netflix As we add new phrases to our with our grief. We must find our resil- show that we can collectively discuss lexicon —”social distancing,” “coronavi- ience and grit in these uncertain times. and meme incessantly. I hope you are rus,” “COVID-19,”— and new laws get We — against most of our instincts — doing as best as you can. Most impor- passed, we all yearn for the way things must see the glass as half full, rather tantly, I hope that while you breathe, used to be. With this yearning comes than half empty. you hope. another emotion that we should be cog- Now, that doesn’t mean pretend nizant of—grief. During our joint YLD that we aren’t going through a major, Best regards, and Wellness Committee session at the life-altering event. But, what it does Bar Convention in February (wow, that mean is that we should adopt healthy seems like forever ago), Beth Padgett coping mechanisms. We can focus our spoke about the importance of rec- thoughts on positive things. For me, Sheila M. Willis ognizing grief and its impact. Often, from a YLD perspective, that’s thinking YLD President

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What’s Been Happening

YLD Home Buying Seminar presented by the Membership Events Committee

12th Circuit happy hour Orangeburg Cinderella Project

Color of Justice presented at E.L. Anderson Reads at Concord Elementa- Wright Middle School Career Fair ry School