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BMD Obtains Supreme Court Victory on Behalf of Sterilite of Ohio, LLC

Client Alert

Columbus, Ohio – On August 26, 2020, the Supreme Court of Ohio issued its opinion in Lunsford v. Sterilite of Ohio, LLC, Slip Op. No. 2020-Ohio-4193. The Supreme Court’s 4-3 decision reversed an Ohio Court of Appeals ruling that had reinstated a putative class action against Sterilite brought by a group of current and former employees claiming that Sterilite’s use of “direct observation” urinalysis screening violated their common law right to privacy.

BMD originally obtained dismissal of the case in the Stark County Court of Common Pleas, which was reversed by a decision of the Ohio Fifth District Court of Appeals in August 2018. Following the Fifth District’s adverse ruling, BMD successfully petitioned the Supreme Court of Ohio to accept jurisdiction and hear the case. BMD partner Daniel Rudary argued Sterilite’s appeal to the Supreme Court on January 28, 2020.

In its decision reversing the appellate court, the Supreme Court majority adopted BMD’s argument that the plaintiff employees consented to drug testing under the “direct observation” method when they voluntarily produced urine samples while being observed by a same-sex monitor in a designated restroom facility. The Supreme Court also reaffirmed Ohio’s long standing rule of employment-at-will, holding that because “Sterilite had the legal right to terminate appellees’ employment at any time, appellees’ argument that their consent was involuntary because of their fear of termination necessarily fails.”

BMD Litigation Member John Childs and Partner Daniel Rudary represented Sterilite before the Supreme Court of Ohio. Their brief to the Supreme Court can be read here, and Attorney Rudary’s January 28, 2020 oral argument can be viewed here.

See additional coverage on the decision in the ABA Journal and Bloomberg News.


HHS Revokes Public Comment Requirement on Certain Policy Changes

The U.S. Department of Health and Human Services (HHS) has revoked the Richardson Waiver, eliminating the requirement for public notice and comment on certain policy changes. This decision allows HHS to implement new policies more quickly, potentially affecting healthcare funding rules like Medicaid work requirements. While it speeds up policymaking, it also reduces opportunities for stakeholder input, raising concerns over transparency and unintended consequences for healthcare providers, states, and patients.

Don't Get Caught Dazed and Confused: Another Florida Court Weighs in on Employer Obligations to Accommodate Medical Marijuana Use

A Florida trial court ruled in Giambrone v. Hillsborough County that employers may need to accommodate off-duty medical marijuana use under the Florida Civil Rights Act (FCRA). This contrasts with prior rulings and raises new compliance challenges for employers. With the case on appeal, now is the time to review workplace drug policies.

Corporate Transparency Act to be Re-evaluated

Recent federal rulings have impacted the enforceability of the Corporate Transparency Act (CTA), which took effect on January 1, 2024. While reporting requirements were briefly reinstated, FinCEN has now paused enforcement and is reevaluating the CTA. Businesses are no longer required to submit reports until further guidance is issued. For updates and legal counsel, contact BMD Member Blake Gerney.

Ohio Recovery Housing Operators Beware: House Bill 58 Seeks to Make Major Changes

Ohio House Bill 58 proposes significant changes to recovery housing oversight, granting ADAMH Boards authority to inspect and investigate recovery residences. The bill also introduces a Certificate of Need (CON) program, requiring state approval for major facility changes. OMHAS will assess applications based on cost, quality, accessibility, and financial feasibility. The bill also establishes a recovery housing residence fund to support inspections. For more information, contact BMD attorneys Daphne Kackloudis or Jordan Burdick.

January 2025 Notice of Proposed Rulemaking Brings Notable Changes to HIPAA Security Rule

In January 2025, the U.S. Department of Health and Human Services proposed amendments to the HIPAA Security Rule, aiming to enhance cybersecurity for covered entities (CEs) and business associates (BAs). Key changes include mandatory compliance audits, workforce training, vulnerability scans, and risk assessments. Comments on the proposed rule are due by March 7, 2025.