Featured Articles

  • 26 Oct 2023 3:45 PM | Lynette Pitt (Administrator)

    by Nathan Hewitt, Hamlet Law
    Vice Chair, NCADA Paralegal Division

    The 2nd Annual NCADA Paralegal Seminar is scheduled for Thursday, December 14th, 2023. As we await this year's event, let's take a look at some key takeaways from the first seminar held last year from our all-star speakers!

    In the first segment, "The Rules of Engagement: Primer on Federal and State Court Rules," Bobbie Kullman of Amwins and Kellie Myers, Trial Court Administrator for Wake County, discussed important topics such as where to find applicable rules, the most frequently used rules, recent changes to rules, and how to find local rules and customs.

    Next was "Who's Who? How to Effectively and Efficiently Research Jurors," presented by Scott Addison of Lincoln Derr. Using the films The Judge and Runaway Jury, Addison presented ethical ways to research juror information, how to determine which information is relevant when selecting jurors, and the best formats for organizing juror information for the trial attorney.

    In "Social Media – Discovery, Ethics, Evidence & Sanctions," Damon Beaty of Veritext Legal Solutions presented on how advancements in technology have transformed the practice of law, blurring the lines of public and private identities. Beaty discussed ethical considerations, recent case precedents, and specific techniques and tools to identify and collect evidence from social media sources.

    Amy Smith shared her "Tips and Best Practices for Assisting with Document Review & Production" in the next segment, focusing on document collection, organization, standardization, review, and production from both parties and non-parties. She also discussed how to withhold privileged documents from production.

    Finally, Christie Herding of Pettey & Partrick, LLP, shared tips on "A Paralegal's Role in Trial Prep and Trial." Her presentation emphasized the importance of proper trial preparation, including assigning tasks, compiling case/trial notebooks and exhibits, reviewing local rules and procedures, predicting exhibits and witness testimonies, and preparing physical equipment and technology.

    As we reflect on the first NCADA Paralegal Seminar, we are thrilled to see the positive feedback from attendees. Here are some reviews from participants:

    • "All topics applied to my everyday duties as a paralegal. I appreciated the experience and expertise of the speakers."
    • "All the presenters gave us very useful, practical information. Thank you for putting together a great seminar."

    We are delighted to hear that the seminar resonated with paralegals and provided valuable insights. We believe that the 2023 Paralegal Seminar, scheduled for December 14th, will be even more insightful and beneficial. We encourage paralegals to attend again this year and take advantage of the opportunity to learn from experienced professionals in the field. Program details are forthcoming!

  • 25 Oct 2023 3:53 PM | Lynette Pitt (Administrator)

    By Kevin Smith, CS Disco

    Artificial intelligence has reached an inflection point. No one can deny its potential, but many fear its power. Key considerations around data security and privacy, the future of work, and government regulation will be paramount for business leaders as they evaluate AI adoption within their organizations.

    The harbinger of change, the launch of ChatGPT has led to a cultural phenomenon that has spurred a wealth of interest in developing AI. According to Swiss banking giant UBS, the generative AI application may have become one of the fastest-growing apps in history after it was estimated to have reached 100 million monthly active users. The introduction of this groundbreaking tool into the market combined with the growth of Large Language Model (LLM) solutions has provided enterprises with a new paradigm for how to evolve their day-to-day business processes, or at least the promise. This is a genie that is unlikely to go back in the bottle.

    Yet as business leaders and global organizations are eagerly seeking to accelerate their AI adoption efforts, concerns about the data security, privacy, and AI “hallucinations,” and regulatory compliance remain top of mind. As enterprises seek to leverage the strengths of AI, they must also mitigate its risks.

    Recently, there has been increasing scrutiny over how accurate and reliable ChatGPT’s intelligence is, adding another layer of complexity to the current AI boom. Intelligence might be the wrong way to think about what these models and derivative technologies do, but in this accelerated environment, it will be critical for organizations to carefully evaluate each new solution before integrating it into critical operations and processes.

    The State of AI

    While generative AI technology remains nascent, it’s poised to accelerate the maturity of capabilities around document parsing, code generation, and effective information extraction. Variations of AI are being adopted across industries, with the financial services sector leading the way due to the effectiveness of AI’s predictive algorithms in assessing, predicting and mitigating risks. Conversely, industries heavily reliant on non-quantifiable decision-making, such as marketing and manufacturing, have been much slower to embrace AI (Statista).

    So how does Gen AI become enterprise ready? Much has been written and spoken about in conferences and sales pitches about its promise to fundamentally disrupt the enterprise workforce. It is true that this represents a generational agent for change, but it is not quite ready… yet.

    OpenAI was sprung onto the world and the gears of imagination started spinning incredibly quickly due to getting a taste of this technology’s potential. But there are three core things every product person thinks about in terms of innovation: Product Market Fit - Does it do something really well in a way that has not been done before? Is it Secure - In today’s world there are many tests for this, including what happens with the data we share with these essentially OEM technologies. And lastly, have the innovators broken the context of the systems and tools used to do work or is the innovation elegantly embedded to enable management and quality control of the jobs they aim to support.

    Generative AI is excellent at using the information it was trained on and the context that was provided to produce stunning synthesis of information and generation of novel content, whether code, responsive prose or general information structure. We have tested dozens of LLMs on different legal jobs and leveraged experts to assess whether the product of the LLMs has proven to be sufficiently good at the job that the solution would be hired to do, answering legally relevant questions, organizing complex legal documents into addressable frameworks among other tasks. This is just one sector and a few examples, but great enterprise organizations are not trying to deploy generative AI to be mostly okay substitutes for human processes, meaning there is still a lot of work to ensure that there is product market fit for the solutions that leverage these technologies.

    There are other fit requirements that have not yet been met.. For example, if you need to leverage these technologies in a cost effective way to bring innovation to market and need high volumes of information processed performantly, then the current capacity limits of many LLMs may become an issue. GPU shortages have led to rationing for hungry LLMs as they try to keep up with demand and leave no user behind more than the next, which creates performance mismatches. A magical answer that needs to be submitted multiple times or that takes a rather long time to complete is not the magical experience that some expect.

    Can we trust it? Data Security, Privacy and Regulation

    Today, many of the Organizations without the appropriate safeguards can face immediate risks when using AI, as exemplified by the Samsung ChatGPT data leak. The inadvertent inclusion of company data to ChatGPT's training set highlights the need for careful consideration in deploying enterprise applications of ChatGPT and of AI in general. In a KPMG study, 81% of executive respondents considered cybersecurity as a primary concern with AI adoption, while 78% of executives saw data privacy as a primary concern. To avoid compromising privileged data, business leaders adopting AI technology for enterprise applications must establish appropriate guardrails for AI tools and for any data used in training sets.

    Fabrication of evidence presents another worrisome risk, including the proliferation of “deepfake” photographs and video imagery. However, as falsified evidence will likely spur greater forensics involvement in legal review, faked photographs can wreak havoc in other areas as well. Consider the impact of a faked photograph of the Pentagon shared on social media earlier this year that caused a drop in stock prices before the error was widely known.

    As AI manipulation becomes more sophisticated, businesses across all sectors must do their due diligence to conduct fact checks and verify their sources. In response to the rapid advancement of AI, the White House launched an initiative on “responsible AI”, addressing worker impact, employer use of surveillance technology, and regulatory standards. The evolving international regulatory landscape is something that enterprise adopters will need to keep a close eye on., as governments continue to standards and practices for protecting against anticipated data risks.

    Use Cases for Generative AI in Sensitive Industries

    Research from KPMG found that 65% of US executives believe generative AI and LLM solutions will have a very high impact on their organization in the next 3-5 years. However, 60% say that we are still potentially a few years away from actual implementation. While fullscale AI implementation may seem like a ways off, investing time and resources into understanding crucial business needs and capabilities will pay dividends in the long run.

    Today, we’re already seeing the potential for generative AI to dramatically impact business use cases within highly regulated industries such as finance, healthcare and legal. In finance, AI can improve accuracy in forecasting , reduce errors, lower operational costs, and optimize decision making for organizations able to invest the time and resources for development (Gartner). In healthcare, it can support synthetic data generation for drug development, diagnostics, administrative tasks, (Goldman Sachs) streamlined procurement of medical supplies, and clinical decision-making, with the caveat that trustworthiness and validation are crucial in this context.

    In the legal field, lawyers are cautious about AI adoption due to the importance of accuracy and data integrity during legal proceedings (Bloomberg Law). However, in the near future it will give lawyers powerful new capabilities they’ve never had before including comprehensive document parsing, code generation, information extraction, and improved natural language understanding, all of which will augment and optimize various workflows within the legal profession.

    Many of the vendors in this space have started to tune their terms and technologies to be able to meet some of the data security and privacy concerns, but not all. There are approaches that companies can take to mitigate these risks as we have where possible, but the maturity of many rushing to participate is still nascent.

    AI and the Future of Work - Management and Workflow

    According to research from Goldman Sachs, AI could potentially impact as many as 300 million jobs globally over the next five to ten years. While warnings of job replacement may seem dire, historically advancements in technology have led to the creation of new jobs, as saved time and labor free up human talents for more creative endeavors. The use of AI technology could enhance labor productivity and contribute to global GDP growth of up to s 7% over time. In the United States, office and administrative support jobs have the highest automation potential at 46%, followed by 44% for legal work and 37% for tasks in architecture and engineering. However, the impact of AI on jobs will vary across industries.

    If we look at jobs that can be impacted, one might suggest that the adoption is going to be as impactful as the management layer that exists to enable these technologies. Not all jobs have the same level of management requirements and as such different roles will be enterprise ready for Generative AI sooner than later. This means that if you are a marketing professional, you can obtain a draft of marketing collateral and then incorporate that into your normal human, word-based editing process before it is submitted for review, publication, etc. This is a standalone human process and requires very little integrated workflow. If you are a financial services firm using AI to analyze risk or provide investment recommendations, is it critical to be able to manage that information, but in provenance, accuracy and distribution (use) which requires generative AI implementation to be auditable in a system that can be easily managed.

    There has been much debate around generative AI and its ability to change and improve the cost of legal outcomes. This fails to understand the system (technical and human) that governs the pursuit of outcomes like Justice or legal advice. How generative AI is implemented within the workflow of legal professionals is critical so that it can be trusted, examined and scaled across a diverse set of topics and context.


    AI innovation stands at the threshold of immense possibilities, and has the potential to impact a myriad of aspects of society as we know it. While businesses may approach adoption cautiously, navigating risks and regulatory landscapes, the allure of gaining a competitive advantage will drive widespread adoption.

    As enterprise enthusiasm continues to skyrocket, it becomes essential to balance excitement with a healthy amount of skepticism and healthy evaluation. Embracing the power of AI and shaping the future requires careful consideration of its limitations, potential risks and ethical implications.

  • 26 Sep 2023 4:30 PM | Lynette Pitt (Administrator)

    by M. Duane Jones, Hedrick Gardner Kincheloe & Garofalo, LLP

    In the past four years, the Court of Appeals has issued two decisions which appear to negatively impact the exclusivity provision of the Industrial Commission.

    The exclusivity provision is the provision which grants the Industrial Commission exclusive jurisdiction over workplace injuries. Pursuant to the Workers’ Compensation Act enacted in 1929, all workplace injuries are adjudicated in the Industrial Commission, and the only remedies available to an injured employee are those remedies outlined in the Act.

    Our Supreme Court has explained that the Act “seeks to balance competing interests and implement trade-offs between the rights of employees and their employers. It provides for an injured employee's certain and sure recovery without having to prove employer negligence or face affirmative defenses such as contributory negligence and the fellow servant rule. In return the Act limits the amount of recovery available for work-related injuries and removes the employee's right to pursue potentially larger damages awards in civil actions.” Woodson v. Rowland, 407 S.E.2d 222, 227 (1991). The Act allows an employee to receive medical and indemnity benefits in a timely manner, but limits the avenues and extent of that recovery. This is the basis for the compromise.

    Historically, any negligence claims brought in our superior courts by an employee against his or her employer for negligence have been dismissed. The only exceptions to this rule are Woodson claims or Pleasant claims, which involve the employer or co-employee committing intentional torts. An employee has been allowed to sue their employer in civil court where the alleged negligence involved intentional misconduct by the employer “knowing it is substantially certain to cause serious injury or death to employees and an employee is injured or killed by that misconduct.” Woodson, 407 S.E.2d at 228 (emphasis added). Likewise, an employee has been allowed to sue their co-employee in civil court for willful, wanton and reckless negligence. Pleasant v. Johnson, 325 S.E.2d 244, 249 (1985).

    Recently, however, our Court of Appeals has allowed a claim for medical negligence and a claim for negligent retention or hiring to proceed in superior court without meeting the Woodson or Pleasant standard of an intentional tort. Jackson v. Timken, 828 S.E.2d 740 (2019); Marlow v. TCS, 887 S.E.2d 448 (2023). A similar error is present in both cases. The Court of Appeals has confused the jurisdictional test for the Industrial Commission with the compensability test that the Industrial Commission uses to adjudicate its claims to determine whether the employee is entitled to benefits. Furthermore, the Court has confused these tests with no regard to whether the employer or co-employee committed intentional torts.

    By confusing these two tests, and failing to analyze whether an intentional tort exists, the Court of Appeals is essentially establishing that if a particular claim is not compensable under the Act, the Industrial Commission lacks exclusive jurisdiction over the claim, and the employee may be able to proceed in superior courts. This conclusion cannot be the intent of our legislature in enacting the Act, nor is it consistent with a nearly century old collection of case law interpreting the Act.

    In order for a claim to be compensable under the Act, an employee must prove all three of the following elements: (1) the injury was caused by an accident; (2) the injury was sustained in the course of the employment; and (3) the injury arose out of the employment. Otherwise, the claim is not compensable, and the employee is not entitled to any benefits.

    In Jackson, the Court’s ultimate error is stated in the opening sentence: “Where an injury occurs in the course of one's employment but is not caused by an accident and does not arise out of the employment, that injury does not fall under the Workers’ Compensation Act, and the injured party may not be compensated thereunder.” Jackson, 828 S.E.2d at 741. The Court is correct in stating that an injury which is not caused by an accident or which does not arise out of the employment is not a compensable injury; however, the Court mistakenly concludes the lack of meeting any one of these elements renders the claim outside of the Act.

    The Court went on to conclude that if “the Industrial Commission lacks exclusive jurisdiction to hear a claim that occurs in the course of one's employment, a trial court does not err in asserting subject matter jurisdiction over that claim.” Id. The error of this reasoning is the Industrial Commission should never lack exclusive jurisdiction over an injury that occurs in the course of one’s employment, except under a Woodson or Pleasant exception.

    Similarly, in Marlow, our Court of Appeals stated that an action comes within the Act if all three elements are met. Marlow, 887 S.E.2d at 453. Again, this is not a proper application of the test. Coming within the Act and being compensable pursuant to the Act are not the same thing; yet, like Jackson, the Court implicitly concluded they are the same thing. The Marlow court acknowledged that the employer conceded elements one and two were met (the injury occurred as a result of an accident and in the course and scope of employment), but since the Court of Appeals determined the injury did not arise out of the employment, the Court determined there was no exclusive jurisdiction in the Industrial Commission, and the civil suit could proceed in superior court.

    However, once the Court determined the injury was sustained in the course of employment, the Court should have determined the Industrial Commission had exclusive jurisdiction, subject only to a Woodson or Pleasant exception. By combining the jurisdictional test with the compensability test, the Court of Appeals has ignored the any number of circumstances where an employee may be injured at work but is nonetheless not entitled to benefits under the Act.

    While the Court of Appeals in both cases referred to the exclusivity provision, the Court glossed over the meaning of the exclusivity provision and restricted the analysis of jurisdiction solely to the compensability question of whether or not the incident arose out of the employment. In doing so, the Court of Appeals is allowing the trial court to answer a question that has been reserved for the Industrial Commission to answer.

    If the compensability test is to be used to determine the jurisdiction of the Industrial Commission, then all three elements must be answered in the negative for the matter to be held to be outside of the Industrial Commission’s exclusive jurisdiction. Any other combination of negative or affirmative elements lands the claim within the exclusive jurisdiction of the Industrial Commission, and the compensability of the claim is to be determined by the Industrial Commission. Otherwise, the balance struck by the Act is replaced with imbalance, and the employer has lost all the benefits it traded, specifically an employee being prevented from pursuing civil actions, in exchange for an employee not having to prove negligence or face affirmative defenses.

  • 24 Aug 2023 11:06 AM | Lynette Pitt (Administrator)

    Ten Tips for New Lawyers
    Will Graebe, Claims Counsel & Relationship Manager
    Lawyers Mutual Liability Insurance Company of NC

    Whether you are new to the practice of law or a seasoned practitioner, these tips will aid you in managing your day-to-day practice, managing relationships with clients, colleagues, family, and yourself.  Here we highlight key tips from Will from the excellent paper he provided for a recent webinar.  Download the complete paper here.

    Ten Tips for New Lawyers from Day One

    1. Documenting Your Relationship with Clients and Prospective Clients  Documenting your relationship with a client is one of the most effective ways to avoid malpractice claims and ethics complaints. A good engagement letter can be the difference between a long, drawn-out legal malpractice case versus a simple one-page denial letter. When an arrangement or relationship between the lawyer and client is not reduced to writing, the lawyer and client may have very different recollections or understandings of what the lawyer was hired to do.

    2. Avoid Red Flag Clients   Another important risk management tool you have at your disposal is client selection. Good client selection will lead to interesting work, job satisfaction and revenue for your firm. Bad client selection can lead to malpractice claims, ethics complaints and billing nightmares. Red flag clients are far more likely to make claims and file grievances against their lawyers. 

    3. Dockets, Deadlines and Procrastination  The most frequent cause of legal malpractice claims is missed deadlines. These claims can arise from missed statutes of limitation, late tax filings, missed regulatory deadlines, late responses to discovery requests, or any other missed deadline that is either fatal to a client’s claim or causes some damage to the client. The reasons why lawyers miss deadlines are varied. Sometimes, the lawyer just doesn’t know the statute of limitations for the claim. This often happens where a lawyer attempts to handle an out-of-state matter and doesn’t realize the other state has a different statute of limitations than North Carolina for a particular matter. Other times, the lawyer fails to calendar the deadline or enters the wrong date. Most of these claims can be avoided with a good docket control and calendaring system.

    4. Own Your Mistakes But Don’t Fall on Your Sword  If you practice law long enough, you are bound to make a mistake while representing a client. Some mistakes are harmless and immaterial. Other mistakes may be fatal to your client’s case. In between those two extremes are mistakes that cause your client to suffer some negative consequences or create the possibility of negative consequences in the future. What is required of you when you make a mistake depends on the nature and severity of the error. Failure to make appropriate and timely disclosure of errors can result in adverse disciplinary, malpractice and coverage consequences.

    5. Take Care of Yourself  As lawyers, we don’t like to talk about our problems. We like to talk about other people’s problems. We’re really good at the latter and really bad at the former. We want people to think that we have it all together, that we don’t have any problems. If we are struggling with something emotionally or mentally, we certainly don’t need help from anyone else. What would people think? Would my adversaries think I’m weak and take advantage of that weakness? Would my clients lose confidence in my ability to handle their matter? This mentality, combined with the daily stress and pressure of practicing law, has resulted in high levels of anxiety, depression and alcohol abuse in our profession.

    Well-being and happiness are not prizes at the end of a road. They are not something that we strive for and get and then sit back and enjoy. Well-being is a journey—a lifestyle. It’s about designing a life that creates opportunities for joy and purpose and meaning. It’s about creating a state of mind that, when bad things happen, we can be present with that experience and then move forward. Mental health is much like physical health. To have either, we must be active participants. Sure, there is a genetic component to both physical and mental health. But neuroscience has shown us that we can rewire our brains for improved well-being. We have a choice. We can structure our lives to include some of the practices discussed above or we can let our genetics and circumstances limit what is possible.

    6. Communications and Client Relationships  What do you think is the number one complaint clients have about their lawyers? It is not lack of knowledge or competence. It is not even dissatisfaction with the outcome of a matter or the cost to the client. A BTI Consulting Group Survey indicates that failure to keep a client adequately informed is far and above the number one complaint clients have.

    Poor communication not only results in loss of business, but also increases the likelihood of malpractice claims, ethics complaints and poor reviews. Clients who feel seen and heard by their lawyers are far less likely to make such complaints. 

    7. Don’t Dabble Rule 1.1 of the Rules of Professional Conduct prohibits a lawyer from handling “a legal matter that the lawyer knows or should know he or she is not competent to handle without associating with a lawyer who is competent to handle the matter.” Handling matters for which you are not competent is known as dabbling, and it is one of the leading causes of malpractice claims.

    For new lawyers most new matters will involve some level of dabbling. Law school training may be sufficient for certain matters but does not provide the practical experience for handling many practice areas. That can only come from experience. If you’re in a law firm with other attorneys, you can rely on the experience of more experienced attorneys in the firm to mentor you through a case or matter. If you’re solo, you must find another solution. Here are a few suggestions for new lawyers: 

    1. Associating Counsel

    2. Educate Yourself 

    3. Use the Resources of Your Bar Association or Specific Practice Area Associations

    4. Get Involved in a Mentoring Program

    5. Call on Lawyers Mutual Claims Attorneys

    8. Watch for and Avoid Conflicts of Interest  Conflicts of interest account for many legal malpractice claims and ethics complaints. Sometimes, conflicts are obvious. Other times, a conflict can be subtle or might only become evident well into a representation. Every firm, regardless of size, should have conflict of interest policies and procedures in place to identify conflicts of interest before accepting representation. However, even with a conflict checking system in place, lawyers must still exercise good judgment in assessing conflicts and potential conflicts. Additionally, it is essential to understand the conflicts rules under Rules 1.7, 1.8 and 1.9 of the Rules of Professional Conduct.

    9. Take Time to Investigate and Develop Facts As law students, we spend three years learning about the law. We learn how to research cases, statutes and regulations and apply what we find to a given set of facts. However, we are taught very little about how to investigate the facts of a case. A frequent mistake made by new lawyers is failing to fully investigate, collect and develop the facts of a new matter or case. This is true in both litigation and transactional matters. Developing and investigating facts can be tedious and sometimes unpleasant. You may have to speak with parties or witnesses who really don’t want to talk to you. Or you might have a client who needs some prodding to give you all the facts. You must be persistent. Cases are often won or lost on a particular fact that would not have been discovered but for the lawyer’s persistence in digging for and collecting the facts. It can also mean the difference between filing a case within the statute of limitations or missing the statute. 

    10. Focus Less on Outcomes and More on the Journey Hopefully, you will have a long and fruitful career in the law. You will have good days and bad days. You will win some cases and lose some cases. You will have happy clients and disgruntled clients. Even the best lawyers lose sometimes and have unhappy clients during their career. Does that mean that they have failed? If you measure success by winning and pleasing others, then, yes, they have failed. Living life by this measure will create a life full of anxiety and disappointment. If your happiness and satisfaction are dependent on outcomes being what you need them to be, you will frequently come up short. Plus, sometimes what we see as bad ends up turning out to be good.

    But what if you measured success by something other than outcomes? What if you measured success by the actions that you took along the way? You will soon learn that, no matter what you do, you can lose a case or disappoint a client. The only thing that you have any real control over is your own actions. Have you zealously represented your client’s interests to the best of your ability? Have you acted ethically? If so, you can be pleased with whatever the outcome is. Practicing law is no different than anything else in life. We have far less control over results than we think we do. So, let go of the need for control and outcomes. Work hard and enjoy the satisfaction of knowing that you did your best. And if there are times when you don’t give it your best, give yourself some grace. Nobody is perfect, even though our clients sometimes think we should be.

    Download complete paper.

  • 21 Aug 2023 10:21 AM | Lynette Pitt (Administrator)

    Managing Divergent Opinions in the Life Care Plan
    Betsy Keesler, BSN, RN, CLCP
    InQuis Global

    Life care plans are often used in the forensic setting for personal injury cases. They serve as both a plan for future care and cost estimate for such needs. The subject of a life care plan is referred to as an evaluee. The life care plan is an educational tool for the evaluee and the trier of fact, written in understandable language that can be readily duplicated and realistically implemented.

    The most widely accepted definition of a life care plan is as follows:

    The life care plan is a dynamic document based upon published standards of practice, comprehensive assessment, data analysis, and research, which provides an organized, concise plan for current and future needs with associated costs for individuals who have experienced catastrophic injury or have chronic health care needs.” (International Conference on Life Care Planning and the International Academy of Life Care Planners. Adopted 1998, April.)

    The recommended services and items in a life care plan must have a solid medical and health care foundation. The life care plan outlines provisions to meet the biopsychosocial needs of the evaluee. The life care plan requires the input and expertise of multiple disciplines coming together to create one comprehensive plan tailored to the evaluee’s individualized needs. As such, the foundation of the life care plan is described as transdisciplinary in nature.

    In the forensic arena, there may be conflicting treatment opinions expressed throughout the course of life care plan development, as well as after the plan’s formal release. The life care planning Consensus and Majority Statements (2018) inform the life care planner of an obligation to “methodically handle divergent opinions.” (Consensus Statement #65). The Consensus Statements are derived from 17 years of past life care planning summits, with input from life care planning experts. They are a key part of life care planning methodology. Therefore, they provide reliable and trustworthy guidance on ways to compare recommendations.

    In addition, life care planning Consensus Statement #84 states the following:

    Review of evidence-based research, review of clinical practice guidelines, medical records, medical and multidisciplinary consultation and evaluation/assessment of evaluee/family are recognized as best practice sources that provide foundation for life care plans.”

    On closer inspection, there are typically five sources of information to support expert medical opinion:

    • The evaluee’s medical record
    • Evaluation/assessment of the evaluee/family
    • Consultation with treating and/or evaluating health care providers
    • Professional clinical practice guidelines
    • Evidence-based peer reviewed literature

    A thorough review of medical records is one starting point for gathering relevant health care data. Medical records represent the factual past history of treatments already received and, sometimes, the projected future health care needs as recommended by the treating provider(s). The medical records unveil which treatments were tolerated by the evaluee and led to favorable outcomes. Likewise, they also reveal which ones were considered or tried, but were not feasible to conduct. Also, medical records serve as a cross reference to life care planning recommendations.

    When permitted, the life care planner should conduct a formal evaluation and assessment of the evaluee. Likewise, a forensic medical expert, who may be relied upon to provide medical foundation, may also perform an in-person or telehealth medical evaluation as the basis for recommendations. The life care planner will likely need to speak with the evaluee’s treating and/or evaluating health care providers. With the analysis of medical records, the life care planner’s assessment of the evaluee, review of clinical practice guidelines, research and consultation with the treating and/or evaluating health care provider(s), there should be adequate medical foundation and individualized data established to begin formulating a life care plan.

    However, sometimes the forensic medical expert will rely solely upon medical treatment and diagnostic records, sans personal evaluation, to formulate an expert opinion regarding the future health care needs for the evaluee. As such, the medical expert opinion(s) issued may not agree with the current treatment plan in place, setting up a scenario for divergent medical opinions.

    Finally, the review and analysis of clinical guidelines and peer-reviewed literature is essential. Clinical practice guidelines are the gold standard outlining best practice. These statements, usually developed by medical organizations and academies, are intended to provide sound rationale to guide effective clinical treatments for individuals. In essence, clinical practice guidelines define the how to and the why in health care practice. Also, peer-reviewed literature is important to the life care plan. It represents expert scholarly research, work or ideas that have been critically scrutinized by other experts of the same field prior to acceptance for publication. Such a peer-reviewed process ensures the scientific quality and validity of the research.

    Regardless of whether the life care planner is creating or reviewing a plan, it is incumbent upon the individual to indicate where divergent medical opinions lie and how he/she plans to deal with the range of findings. Specific areas to consider when evaluating medical opinions include:

    • Is the rendering expert consultant and/or treater acting within his/her scope of practice?
    • Do the medical records give any indication of what treatments provided were beneficial and which ones were not suitable for the evaluee?
    • Do the medical records indicate what the treating provider was planning for the future?
    • Do the medical records give any indications the evaluee has reached maximum medical improvement and whether future care consists of conservative medical management moving forward or not?
    • Are the future care recommendations individualized for the evaluee?
    • Are the recommendations reasonable and attainable?
    • Can the evaluee actually implement the recommendations from where he/she lives?
    • Has the evaluee made any statements as to whether or not he/she intends to pursue the recommendations?
    • Do the clinical guidelines and standards of practice support the same recommendations given by the medical and/or health care professionals?
    • What medical information/opinions are discovered in deposition testimony?
    • Within deposition testimony, have any parties contradicted themselves or changed their opinions regarding future care needs?

    Consensus statement #75 asserts, “Life Care planning products and processes shall be transparent and consistent.” The life care planner, as an educator for the evaluee and the jury, should acknowledge when divergent opinions and contradictions exist. Such differing recommendations/opinions may dictate the need to provide more than one plan option in order to develop a reasonable, relevant, and appropriate life care plan individualized to the evaluee. If one recommendation is chosen over another, the life care planner should be prepared to explain the rationale for making such a decision. Moreover, the rational should follow accepted methodology, standards and consensus while being fully transparent and unbiased.

    In closing, it is the life care planner’s responsibility to present a life care plan containing feasible treatment and care options, in a transparent and understandable way, using the proper application of peer-reviewed methodology, standards and consensus. In the forensic arena, the life care planning process should aid the trier of fact in making informed and appropriate decisions.


    Cary, John, et al., 2023. “A Walk Through from Referral to Testimony: Methodology & Admissibility.” Journal of Life Care Planning, 21 (1), 69-84.

    Deutsch, Paul M., “Tenants of Life Care Planning.” Paul M. Deutsch & Associates, P.A. www.paulmdeutsch.com/LCP-tenets-of-life-care-planning.htm

    International Association of Rehabilitation Professionals & International Academy of Life Care Planners, 05/07/2019, “Transdisciplinary Position Statement.”

    International Association of Rehabilitation Professionals & International Academy of Life Care Planners, April 2022, “Code of Ethics.”

    Johnson, C; Pomeranz, J. & Stetten, N. 2018. “Consensus and Majority Statements Derived from Life Care Planning Summits Held in 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2015 and 2017 and updated via Delphi Study in 2018.” Journal of Life Care Planning, 16 (4), 15-18.

    Standards of Practice for Life Care Planners, Fourth Edition. 2022. International Association of Rehabilitation Professionals & International Academy of Life Care Planners.

    Weed R. O., Berens D.E., (editors). 2018. Life Care Planning and Case Management Handbook. (4th ed.). New York, NY: Routledge.


    Betsy Keesler earned a Diploma in Nursing from Presbyterian Hospital School of Nursing in 1987 where she was awarded Clinical Excellence in Pediatric Nursing upon graduation. Ms. Keesler subsequently completed a Bachelor of Science in Nursing during 1990 with receipt of High Distinction through George Mason University. In 2021, she completed 120-hours of post graduate training for life care planning through the Institute for Rehabilitation Education and Training (IRET). Ms. Keesler is a registered nurse (RN) and a certified life care planner (CLCP). She has worked in the hospital setting as a registered nurse (RN) for Pediatric and Neonatal Intensive Care Units and within the outpatient medical setting as a community health nurse. As a community health nurse, she coordinated and provided care for a large and diverse patient population within the school system. Also, Ms. Keesler was a nursing manager for the Adult Evaluation and Review Service within the Maryland Department of Health. Her clinical work through the public health department involved the coordination of medical and nursing services to support ongoing safe community living for persons with catastrophic diagnoses and chronic health conditions. Ms. Keesler has held numerous leadership positions throughout her nursing career and was the recipient of the Maryland Nurse of the Year award during 2009. She currently works full-time as a life care planner with Inquis Global, LLC.

  • 27 Jul 2023 3:42 PM | Lynette Pitt (Administrator)

    The Complications Associated with Third-Party Litigation Funding Indicate a Need for Legislative Action as Funding Continues to Unabatedly Increase

    Adam Peoples, Hall Booth & Smith, P.C. and Connor Wiseman, Summer Associate

    Third-party litigation funding is “an arrangement in which a funder that is not a party to a lawsuit agrees to provide nonrecourse funding to a litigant or law firm in exchange for an interest in the potential recovery in a lawsuit.”1  This method of funding has increased immensely in recent years and demand amongst litigators for such funding continues to grow. According to Westfleet Advisors (an advisor to lawyers and clients who are exploring litigation financing), new capital commitments from the litigation finance industry to law firms increased by 16% in 2022, which was the largest year-to-year growth rate Westfleet Advisors had ever reported since they began tracking in 2019.2   This growth is the result of 44 currently active funders with $13.5 billion in assets under management, with $3.2 billion in commitments to new deals coming in the last year.3 The commitments from funders are distributed to single matters as well as in a portfolio form where the litigation funder finances multiple cases belonging to a lawyer or law firm and receives a return on the invested capital either through individual settlements or through a group of cases.4  While litigation funding initially was allocated primarily in single-matter deals, portfolio funding has become more common since 2019 and currently represents 68% of new capital commitments, with each new deal averaging about $10.5 million (up from $8.5 million in 2021).5  Given the prevalence and depth of litigation funding, particularly in portfolio transactions, there are obvious concerns as to the integrity of litigation backed by third-party funders and the consequences of this rapidly popularizing funding model. These concerns include an overemphasis on profitability, ethical considerations and conflicts of interests, an impact on settlement dynamics, limited transparency and disclosure, insufficient regulation and monitoring, and a potential impact on access to justice.

    Portfolio funding makes litigation less risky for both funders and litigators given that funds can be spread across multiple cases. This decreased risk has the potential to encourage frivolous lawsuits driven by financial gain rather than merit. Not only would this needlessly overburden the court system in general, but defendants would also face an altered set of options. In essence, with the backing of litigation funding firms, plaintiffs would be enabled to pursue even highly dubious claims at trial. In this environment, defendants would be pressured to settle all but those most frivolous suits at amounts higher than the merits would traditionally justify.6 This disrupts established customs and expectations by driving up costs through inefficiencies and puts defendants in a comprised position regardless of guilt or innocence.7  Ultimately, in the case of insurance, premiums will rise to compensate for increased litigation costs, thereby negatively impacting unaffiliated consumers. While a counterargument to this assertion is that investors would be unlikely to invest in a frivolous lawsuit when recovery is contingent on success, the National Association of Mutual Insurance Companies argues that focusing solely on the probability of success “overlooks the fact that funding companies can negotiate for a larger share of any proceeds that result from a less-meritorious lawsuit, in the same way that investors are able to demand higher yields from the issuers of so-called junk bonds.” 8  It remains a worthwhile venture for funding companies to invest cases with low probabilities of success if there is a large enough damages figure due to the fact that, through the portfolio approach, the funding company is able to spread risk across lawsuits and therefore avoid instances of overexposure.9 Therefore, there is little reason to expect third-party litigation funding to decrease independently.

    While the threat of increasing frivolous lawsuits is problematic, perhaps of chief concern is a compromised attorney-client relationship as a result of third-party funding. Litigation funders are positioned to exert an undue influence on litigation strategy and potentially prioritize financial gain over the client’s best interests. This is possible because funders, unlike attorneys, do not owe a fiduciary duty to plaintiffs.10  An example of this may occur when a funding agreement allows the funder to decide when to settle, even if the plaintiff would rather proceed to trial.11  This dynamic could arise in any number of critical decisions relating to the direction of the lawsuit. Not only is the attorney-client relationship potentially compromised, but there is also the possibility of conflicts of interest and breaches of ethics. The money in portfolio funding by its definition is allocated to numerous different lawsuits. It follows that through the funding of multiple cases simultaneously, there could be conflicts of interest that involve conflicting parties or legal positions. This jeopardizes the integrity of the legal system and shifts the ultimate objective from justice to profit with no regard for congruence. Often, the court and defendant are unaware of a funding agreement, which prevents monitoring. Without transparency, there is little incentive for funders to behave ethically and there is relatively little chance of recourse. Further, the set of circumstances that results leads to the potential for portfolio funding to widen the gap between those who can afford access to justice and those who cannot, thereby perpetuating existing inequalities in the legal system. Portfolio funding may also lead funders and attorneys to prioritize cases with higher potential returns, potentially diverting resources away from cases with significant societal impact but lower financial prospects. Each of these issues is an indicator that additional regulatory attention needs to be given to third-party litigation funding.

    Given the multitude of potential issues with portfolio litigation funding and its ever-growing presence in litigation, the judicial system would be well served to pursue enhanced legislation regulating litigation funding, especially pertaining to the portfolio model. Transparency is a critical component in achieving this goal. In working towards transparency, Senator Grassley and Representative Issa introduced The Litigation Funding Transparency Act of 2021, which would “requir[e] mandatory disclosure of funding agreement in federal class action lawsuits and in federal multidistrict litigation proceedings.”12  Additionally, in December 2022, a coalition of state attorney generals issued a written call to action to the Department of Justice and Attorney General Merrick Garland, though no definitive action has been taken on the issue.13  Alternatively, efforts have been made to add a mandatory TPLF disclosure provision to Fed. R. Civ. P. 26(a)(1)(A).14  The effort has been led by the United States Chamber Institute for Legal Reform which has cited the following as reasons for the addition of the provision: “(1) alleged “mounting evidence” of funder control over litigation and settlement decisions; (2) growing use of TPLF arrangements as part of “all types of civil litigation” and increased funding amounts; and (3) the need to standardize and simplify TPLF disclosure approaches as part of a single disclosure rule.”15  As of May 8, a letter with 35 signatories (including American Property Casualty Insurance Association, the Association of Defense Trial Attorneys, the DRI Center for Law and Public Policy, and the National Association of Mutual Insurance Companies) was sent to the Advisory Committee reemphasizing the need for the added provision to Rule 26.16  The Advisory Committee will take the proposal under consideration, however, this provision has been proposed over the course of the past nine years to no avail.17  Ultimately, litigation funding has the potential to not only negatively disrupt the judicial system but also have a negative effect on the general public especially in the insurance marketplace where increased premiums could lessen affordability and accessibility to insurance for those who are wholly unaffiliated with litigation. Thus, more robust regulations and monitoring and enforcement of ethical standards in portfolio funding is necessary to promote justice and integrity in the legal system.


    1Third Party Litigation Financing:  Market Characteristics, Data, and Trends (Report to Congressional Requesters) UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE 1 (Dec. 2022), https://www.goa.gov/assets/gao-23-105210.pdf

    2The Westfleet Insider:  2022 Litigation Finance Report, WESTFLEET ADVISORTS 2 (2022), https://www.westfleetadvisors.com/wp-content/uploads/2023/02/WestfleetInsider-2022-Litigation-Finance-Market-Report.pdf.

    3Id.at 3.

    4What You Need to Know About Third Party Litigation Funding, U.S. CHAMBER OF COMMERCE INSTITUTE FOR LEGAL REFORM (Feb. 7, 2023), https://instituteforlegalreform.com/what-you-need-to-know-about-third-party-litigationfunding/#:~:text=Portfolio%20funding%20allows%20the%20litigation,thier%20risk%20over%20multiple%20cases.

    5WESTFLEEt ADVISORS supra note 2 at 5-6

    6Third-Party Litigation Funding:  Tipping the Scales of Justice for Profit (Prepared by NAMIC State and Policy Affairs Department) NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES (May 2011), https://www.namic.org/pdf/publicpolicy/1106_thirdpartylitigation.pdf






    12Tasha Williams, U.S. Study of 3rd-Party Litigation Funding Cites Market Growth, Scarce Transparency, INSURANCE INFORMATION INSTITUTE, (Mar. 23, 2023), https://www.iii.org/insuranceindustryblog/federal-study-of-third-party-litigation-funding-reveals-maturing-and-growing-markets-lack-of-transparence-and-scarce-regulation/.


    14Mark Popolizio, Several industry groups renew calls for a mandatory TPLF disclosure rule as part of the Federal Civil Rules of Procedure, Verisk (June 9, 2023), https://www.verisk.com/insurance/visualize/several-industry-groups-renew-calls-for-a-mandatory-tplf-disclosure-rule-as-part-of-the-federal-civil-rules-of-procedure/.




  • 25 Jul 2023 2:30 PM | Lynette Pitt (Administrator)

    Costing Evidence and Requirements for the Life Care Plan

    Ashley Kelly BSN, RN, CLCP


    A Life Care Plan is a dynamic and comprehensive document which outlines necessary care, treatment, services, equipment, and the associated costs for an individual who has experienced a catastrophic injury. The costs of the plan should, when medically necessary, span the individual’s lifespan to ensure appropriate care, treatment, and support to facilitate his or her quality of life with maximum independence. Guiding and authoritative requirements for the production of a Life Care Plan are delineated through Consensus and Majority Statements, last published in 2018 within the Journal of Life Care Planning. These statements specify proper methodology that should be utilized when researching and establishing costs for a Life Care Plan. Consensus was obtained through a Delphi study with active participation and involvement by a variety of life care planning organizations and professionals, and is applicable to all Life Care Planners, no matter their professional discipline or educational background.

    Specifically, Consensus Statement #85 states:

    “Best practices for identifying costs in life care plans include:

    a. Verifiable data from appropriately referenced sources

    b. Costs identified are geographically specific when appropriate and available.

    c. Non-discounted/market rate prices

    d. More than one cost estimate, when appropriate”

    (Johnson, Pomeranz, & Stetten, 2018, p. 17).

    For the purposes of this article, I will be utilizing Consensus Statement #85 as a guide and framework to identify proper practices and methodologies when developing the costs of a Life Care Plan. Each heading directly correlates to a portion of Consensus Statement #85.

    Life Care Plans should have verifiable data from appropriately referenced sources.

    Certain tools should be applied when developing the costs or charges for goods and services within a Life Care Plan. Medical databases that are published and statistically valid are regularly relied upon as a reference source by Life Care Planners for costing. Databases often used when developing a Life Care Plan are the American Hospital Directory, Context 4 Healthcare, FAIR Health, and the Physicians’ Fee Reference. When using these databases, appropriate medical coding should be used to obtain pricing. Medical coding systems are updated annually, and proper usage of such codes is necessary to create a Life Care Plan with valid and reliable costing.

    The following are the most commonly used coding systems and their abbreviations:

    • Current Procedure Terminology (CPT)
    • Healthcare Common Procedure Coding System (HCPCS)
    • International Classification of Diseases 10th Revision Clinical Modification (ICD-10-CM)
    • International Classification of Diseases 10th Revision Procedure Coding System (ICD-10-PCS)
    • Ambulatory Payment Classification (APC)
    • Medicare Severity-Diagnosis Related Group (MS-DRG)

    These coding systems serve different primary purposes. Maniha (2020) describes the following:

    “The ICD-10-CM represents the why (diagnosis) portion of the scenario. The CPT code represents the who (physician), what (the procedure) and/or the where (outpatient facility). The MS-DRGs represent where (inpatient facility). The ICD-10-PCS represents what (inpatient procedure), The Healthcare Common Procedure Coding System (HCPCS) includes what's included, for example equipment, supplies, orthotics, prosthetics, ambulances, devices, and some professional services” (p. 15).

    Also, it should be noted that when creating a Life Care Plan, these medical databases and the correct code for each item or service should be displayed within the plan. Based upon consensus requirements, costing resources must be transparent and consistent for the plan’s reliability and validity.

    Life Care Plans’ identified costs are geographically specific when appropriate and available.

    Life Care Plans should be individualized to the evaluee. Healthcare goods and service costs vary greatly from one geographic region to another. Therefore, Life Care Planners should apply geographically specific costing parameters when developing their plans. After selecting the appropriate medical code, the Life Care Planner should consider the likely geographic region in which the service, treatment, and/or care will be performed. Charges vary based upon geographic area and evolve over time. Depending on the specific resource used, a geographic adjustment factor (GAF) may need to be applied to the price to calculate the appropriate regional cost.

    Life Care Plans should provide non-discounted/market rate prices.

    Life Care Plans should be individualized to the needs of the evaluee without regard to funding sources. According to Deutsch & Sawyer (2004),

    “At no time during the plan development process should budgetary concerns influence care and rehabilitation recommendations. The life care plan was designed with the intention of citing all of the items and services made necessary by the onset of a disability/injury” (p. 5-6).

    With that being said, Life Care Planners are cautioned to use both the highest and the lowest costs for any item. The pricing for items and services should not be driven by referral sources or budgetary concerns, but rather the necessity of the specific items or services needed for the evaluee as a result of a catastrophic injury.

    The Life Care Planner should use costs that are Usual, Customary, and Reasonable (UCR). According to the American Medical Association the definition of UCR is as follows:

    “(a) ‘usual’ fee means that fee usually charged, for a given service, by an individual physician to his private patient (i.e., his own usual fee).

    (b) a fee is ‘customary’ when it is within the range of usual fees currently charged by physicians of similar training and experience, for the same service within the same specific and limited geographical area; and

    (c) a fee is ‘reasonable’ when it meets the above two criteria and is justifiable, considering the special circumstances of the particular case in question, without regard to payments that have been discounted under governmental or private plans”  

    (AMA Policy H-385.923, 2021).

    Usual, Customary and Reasonable (UCR) pricing typically falls between the 75th to 80th percentile ranges (Weed & Berens, 2018). Life Care Planners should not be using Medicare or other insurance pricing when creating a Life Care Plan, unless jurisdictional or legal venue issues require such to be provided.

    Life Care Plans can have more than one cost estimate, when appropriate.

    Other resources can be used in addition to medical databases for costing within a Life Care Plan. These additional geographically appropriate and valid resources should provide a range or data point to develop Usual, Customary, and Reasonable pricing for the plan. Direct contact with vendors and/or healthcare providers within the evaluee’s geographical region can be utilized for costing parameters within a Life Care Plan when appropriately documented. When making direct contact with these vendors and/or providers, it is important for the Life Care Planner to request non-discounted costs (i.e., not insurance or sliding scales charges). The evaluee’s recent medical billing records can be another appropriate source for costing information. Billing records from the evaluee’s current treatment providers, and the specific coding from his or her past care, can provide demonstrated data to help determine and/or confirm expected future costs.


    A consistent approach to identifying the costs of medical services and goods is essential to creating validity for a Life Care Plan. The plan should be individualized to the evaluee’s specific medical needs and contain appropriate UCR costs. Ultimately, accurate costing throughout a Life Care Plan is integral for supplying the appropriate care, treatment, services, and equipment, fundamentally promoting quality of life and independence for an evaluee following a catastrophic injury.

    About the Author

    Ashley Kelly was employed for 11 years at the Medical University of South Carolina in the High-Risk Obstetrics and Gynecology Unit after earning her nursing degree. In addition to caring for obstetric and gynecological patients in the hospital setting, Ms. Kelly was an educator for the MUSC Prenatal Wellness Clinic and received several nominations for the nationally recognized Daisy Award for Extraordinary Nurses. Ms. Kelly completed a 120-hour post-graduate training program in Life Care Planning through the Institute of Rehabilitation and Education Training. She is currently a partner, Certified Life Care Planner and Forensic Nurse Researcher at InQuis Global. She is presently in residency pursuing her Doctor of Nursing Practice (DNP), with a focus in Family Medicine. She received the Medical University Hospital Authority (MUHA) full academic scholarship for her Bachelor of Science in Nursing (BSN), and recently received the Nina Smith Scholarship during her doctoral program. Ms. Kelly is a Registered Nurse (RN), and a Board-Certified Life Care Planner (CLCP).


    Article Title/Date: “Consensus and Majority Statements Derived from Life Care Planning
    Summits Held in 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2015 and 2017 and Updated Via Delphi Study in 2018/2018”
    Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
    Publication Info: Volume 16, Issue #4, Pages 15-18

    Book Title/Date: Life Care Planning and Case Management Handbook (Fourth Edition)/2018
    Editors: Roger O. Weed & Debra E. Berens
    Publisher: Routledge

    Policy Statement: Definition of Usual Customary and Reasonable (Policy H-385.923)
    Publisher: American Medical Association (AMA)

    Book Title/Date: A Guide to Rehabilitation (Volume 1)/ 2004
    Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
    Publisher: AHAB Press

    Article Title/Date: “Components of a Cost/Charge Scenario as Utilized in the Life Care Plan”/2020
    Journal Title/Lead Author: Journal of Life Care Planning/Maniha, A.
    Publication Info: Volume 18, Issue #4, Pages 13-34

  • 21 Jun 2023 11:30 AM | Lynette Pitt (Administrator)

    By Jeremy Falcone and Derrick Foard, Ellis & Winters, LLP


    This has been a bad year for the Instapot, Bed Bath & Beyond, and the North Carolina Tarheels. But the non-compete provision may be the owner of the worst 2023.

    Non-compete provisions are used throughout the country to limit employees’ ability to take knowledge gained at one employer and deploy it with a competing company. By some estimates, almost 20% of the current United States’ workforce is subject to a non-compete agreement. More than a third of employees have been subject to a non-compete agreement at some point during their careers. The statistics show that these non-compete agreements have become a fairly standard occurrence within employment relationships.

    While other states, like California and Illinois, have statutorily prohibited non-compete agreements, North Carolina allows employers to enforce non-compete agreements. To be enforceable, the agreement meets a five-factor test. The non-compete must be in in writing; reasonable as to time and territory; made a part of the employment contract; based on valuable consideration; and designed to protect a legitimate business interest of the employer. See Copypro, Inc. v. Musgrove, 754 S.E.2d 188, 191-92 (N.C. Ct. App. 2014). The agreements also cannot violate North Carolina public policy. See Phelps Staffing, LLC v. C.T. Phelps, Inc., 226 N.C. App. 506, 509, 740 S.E.2d 923, 927 (2013)

    But 2023 has suggested that the non-compete levees may run dry, even in North Carolina.

    It was not February that made us shiver. Instead, in January 2023, the FTC proposed a new rule that would largely ban non-competes. The FTC described non-competes as “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition (Jan. 5, 2023). Non-competes, the FTC claims, violate section 5 of the Federal Trade Commission Act as an unfair method of competition.

    The FTC quotes some staggering figures, estimating that a non-compete ban would increase American wages by $300 billion per year.

    The FTC’s proposed rule would extend to independent contractors, employees, and even volunteers. It would prohibit (a) entering into or attempting to enter into a non-compete with a worker, (b) maintaining a noncompete with a worker, or (c) representing to a worker that the worker is subject to a noncompete (in certain circumstances). The FTC did leave a little wiggle room for employers, noting that the prohibition would not extend to “other types of employment restrictions,” presumably non-solicitation and confidentiality provisions. Id. However, the FTC cautioned that those other provisions would also be prohibited if they were “so broad in scope that they function as noncompetes.” Id.

    Fortunately, the courtroom will remain adjourned and no verdict will be returned in the short term. The FTC will not be voting on the proposed rule until April 2024, and it received a substantial number of public comments that will need to be reviewed prior to any implementation.

    As if that wasn’t bad enough, in May 2023, the General Counsel of the National Labor Relations Board (NLRB) offered up its whiskey to the FTC’s rye in a memorandum further criticizing non-compete agreements. (See Memorandum GC-23-08). While the NLRB general counsel does not make law, she does prosecute the National Labor Relations Act (NLRA) and the position can become law if and when the NLRB issues a decision or rule. So while the memorandum is not law, it provides a good idea of which direction the Chevy is heading.

    In the memorandum, the NLRB outlines its position that non-compete agreements interfere with employee rights under the NLRA.

    A 1935 law may seem like odd precedent to support the NLRB’s argument. The NLRA does not mention the word “non-compete,” as it was passed long before the heyday of non-competes.

    But the NRLB believes that non-compete agreements violate Section 7 of the NLRA. That provision protects the right to “self-organization, to form, join, or assist labor organizations.” Under the NRLA, it is unfair labor practice to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed” in Section 7.

    According to the NLRB, non-compete provisions affect these Section 7 rights by interfering with an employee’s ability to seek better working conditions by threatening to resign, actually resign, or seeking out employment with a competitor. Non-compete provisions also prevent employees from soliciting their co-workers to work for a local competitor.

    The NLRB did give lip service to some exceptions, noting that there may be some situations in which a legitimate business interest could justify the use of a non-compete agreement. But at the same time, the NLRB made clear that the church bells all were broken with any such exception:

    • A desire to avoid competition from a former employee? Not a legitimate business interest.
    • Retaining employees or protecting special investments in training employees? Not a legitimate business interest.
    • Protecting business interest in proprietary or trade secret information? Yes, a legitimate business interest—but not a legitimate business interest that justifies a non-compete provision.

    If the FTC rule and NLRB position eventually are enforced, what is left? Will the music be able to play?

    Perhaps as to the King and Queen, but not the jester. The NLRB does note that “provisions that clearly restrict only individuals’ managerial or ownership interests in a competing business” may be acceptable. This is because the NLRB does not apply to “supervisors” (those who have the authority to hire, fire, discipline, promote). Presumably, a non-compete agreement signed by a manager or front-line worker may be valid if the provision only prohibits the employee from work with a competing company as a manager or owner. Similarly, it may be the case that any non-compete for a supervisor would be acceptable (even if it limited front-line work at the new employer). But the memo is not clear on that point.

    But before we start singing dirges in the dark for the non-compete provisions, all hope may not be lost. In our highly-politicized environment, there is frequently a great run-up to significant change, followed by a quick district court opinion from a favorable jurisdiction that bars the change from taking place. For instance, in 2016, employers all over the country scrambled to get their policies for handling exempt and non-exempt status adjusted to meet the proposed requirements from the Obama administration. But a Texas district court issued an injunction, and the changes never took place.

    Even still, the levee may end up running dry here. The proposed FTC rule and NLRB memo suggest that employers should look away from non-compete agreements and rely more on narrowly-tailored non-solicitation and confidentiality provisions to attempt to prevent their trade secrets and know-how from being brought to a competitor. Certainly employers will now risk potential enforcement action by the NLRB for attempts to hold an employee to a non-compete. Equally as problematic, though, employers may also have difficulty getting courts to grant relief based on the general thrust of the law on these provisions. A state court reviewing a motion for a TRO or preliminary injunction may be disinclined to enter such an order in the face of such headwinds on non-compete provisions generally.

    So what is an employer left to do?

    First, employers should revisit their current restrictive covenant provisions. Non-compete provisions should be carefully reviewed and the risk of potential NLRB enforcement action should be considered.

    Next, employers should consider how they can use other restrictive covenant provisions and agreements to protect confidential information. Confidentiality provisions continue to be generally upheld, so employers can rely on these provisions to protect the most critical company information. Additionally, non-disclosure agreements are generally enforceable so long as they are reasonable in duration. Furthermore, a narrowly-tailored non-solicitation provision—particularly for important clients with whom the employee has closely worked—should be fair game.

    Finally, employers should look for ways to keep employees happy. Even before the FTC proposed rule and the NLRB memo, it was sometimes difficult to enforce a non-compete provision. The best defense against needing the provision is preventing the employee from leaving in the first place.

    And last, of course, grab some whiskey and rye and start singing, “This’ll be the day that I die.”

    Article feature of NCADA's Employment Law Practice Group.

  • 25 May 2023 10:03 AM | Deleted user

    by Derrick Bailey, Sumrell Sugg, P.A.

    Late last summer, the North Carolina Supreme Court published an opinion which touched on several immunity doctrines. In particular, the Court formally adopted legislative immunity as an individual capacity defense to State-based claims. In so doing, the Court drew not only from federal immunity doctrines, but also from doctrines unique to the State.

                A Small-Town Fire Department and a Local Election

    The underlying case involved allegations of fraud, a municipal election, and the discernment of a mayor’s functions during town council meetings. Since 1954, the Providence Volunteer Fire Department (“Providence”) provided fire suppression services for portions of the Town of Weddington and the surrounding areas. Through its years of service, Providence’s fire station began to deteriorate, and in 2013, Providence and Weddington began discussing ways to finance the necessary renovations.

    Coincidentally, 2013 was an election year, and several candidates, both for town council and for mayor, publicly spoke in favor of the renovations and on the need for Providence to continue providing fire suppression. William Deter, who was running for mayor, was such a candidate.

    In October 2013, while the election campaigns were still ongoing, Providence and Weddington entered into an agreement that, when framed in simplest terms, provided that Providence would sell the station to Weddington, which in turn would finance the necessary renovations and lease it back to Providence for one dollar per year. Weddington also agreed to pay Providence on a monthly basis, for a minimum period of 10 years, for the provision of fire suppression services.

    The agreement provided that it could only be terminated “for cause” which it defined as “the failure of either party to perform the material provisions of [the agreement] . . . include[ing], but not limited to, the failure to meet the required service level and transparency requirements[.]” The agreement additionally contained a liquidated damages clause which entitled Providence to $750,000.00 if Weddington terminated the agreement without cause. It further stated that Weddington would remain responsible for renovation costs if there was a contractual breach prior to the transfer of the station’s title.

    In November 2013, after the agreement between Providence and Weddington, Deter was elected as the Town’s mayor. Providence alleged that Deter campaigned, in part, by publicly advocating for the fire department’s continued existence while secretly conspiring with certain council candidates to find a way terminate the agreement for cause, upon election, so that the Town could gain title to the station without having to pay liquidated damages.

    Pursuant to the terms of the agreement, Providence transferred the fire station to Weddington via quitclaim deed on August 20, 2014. On April 28, 2015, following the results of a commissioned fire study, the town council voted to terminate the contract with Providence with the stated basis being Providence’s financial instability and inability to provide adequate assurances that it could meet its obligations under the contract. Mayor Deter did not cast a vote, but scheduled the meeting, called the vote, and allegedly encouraged the council members to terminate the agreement.

    Providence filed suit against Weddington and Deter on March 27, 2018, alleging, inter alia, that the defendants fraudulently induced it into executing the agreement and subsequent quitclaim deed.

    Deter moved to dismiss, asserting legislative, qualified, and public official immunity. On  November 27, 2018, the trial court denied Deter’s motion, holding that he was not entitled to immunity, at least at that early stage in the proceedings. Deter gave notice of interlocutory appeal given the substantial nature of the right associated with the immunity doctrines. On December 31, 2020, the Court of Appeals reversed, holding that Deter’s actions were legislative in nature and that he was entitled to the corresponding immunity. Providence petitioned the State Supreme Court for discretionary review, which it granted on August 10, 2021.

    The Court’s Analysis

    On August 22, 2022, the Supreme Court unanimously affirmed, adopting the Fourth Circuit’s legislative immunity test, which provides that an official is entitled to immunity if:  (1) he was acting in a legislative capacity at the time of the alleged incident; and (2) the acts were not illegal. Providence Volunteer Fire Dep’t, Inc. v. Town of Weddington, 382 N.C. 199, 220 (2022).


    The Court followed the federal courts’ analysis as to the first element, thereby concluding that immunity should not limited to members of the General Assembly, but rather, should extend to all regional and local legislators because their ‘“discretion should not be inhibited by judicial interference or distorted by the fear of personal liability[.]”’ Providence, 382 N.C. at 220 (quoting Bogan v. Scott-Harris, 523 U.S. 44, 52 (1998)). The Court similarly agreed that ‘“officials outside the legislative branch are entitled to legislative immunity when they perform legislative functions.”’ Id. at 221 (quoting Bogan, 523 U.S. at 55).

    During oral argument, however, the Court struggled with how to evaluate the second element as there was no authority clearly defining what constitutes an “illegal act” within the context of the test. Ultimately, the Court resolved this question by looking to Epps v. Duke Univ., 122 N.C. App. 198, 204-05 (1996), and incorporating the public official immunity standard, noting that an “official may, however, be held liable in his or her individual capacity if his or her actions were malicious, corrupt or outside the scope of his or her official duties, even if they were legislative in nature.” Providence, 382 N.C. at 220 (emphasis added).

    In adopting the public official immunity standard, the Court indirectly addressed a separate, unraised issue, namely whether there was legal authority to justify a State-based version of the doctrine. The issue was not directly before the Court as “Providence ha[d] not contended that [the Court] should refrain from recognizing the doctrine of legislative immunity.” Id.

    While there are a handful of State statutes that acknowledge the doctrine, there are none that authorize it. By contrast, federal legislative immunity is rooted in the Speech and Debate Clause of the United States Constitution, which provides that “Senators and Representatives shall . . . be privileged . . . for any Speech or Debate in either House[.]” U.S. Const. Art. I, § 6, Cl 1. The closest North Carolina has to a constitutional equivalent is found in Art. II, § 18, which states that “[a]ny member of either house may dissent from and protest against any act or resolve which he may think injurious to the public or to any individual” by having “the reasons for his dissent entered into [a] journal” that is to be made publicly available after the adjournment of the General Assembly. The Oxford Commentaries on the North Carolina Constitution, co-authored by Chief Justice Newby, explained that the purpose of this section was to create a public record and hold elected officials accountable to their constituents rather than insulate them. Hence, State-based legislative immunity did not have as strong a constitutional foundation as its federal counterpart.

    Instead of relying on express constitutional or statutory provisions, the Court invoked the familiar language of public official immunity; “a derivative of sovereign immunity,” Toomer v. Garrett, 155 N.C. App. 462, 481 (2002), and “an established principle of jurisprudence, resting on grounds of sound public policy[.]” Smith v. Hefner, 235 N.C. 1, 6 (1952). In so doing, the Court simultaneously resolved both the issue of the doctrine’s legitimacy and its own reservations regarding adoption of the Fourth Circuit’s test.

    Finally, while some of the conduct that Providence alleged gave rise to a claim of fraud occurred before Deter was elected, the Court was quick to note that it “would not have resulted in any injury to Providence in the absence of the legislative acts,” establishing that immunity is applicable if the alleged harm would not have occurred but for the legislative acts.  Providence, 382 N.C. at 221

    Key Takeaways

    In summary, State-based legislative immunity is not absolute, like its judicial or prosecutorial counterparts; but rather is more akin to, and subject to the same limitations as, public official immunity. That being said, the limited the scope of legislative immunity could, in certain circumstances, have the additional effect of eliminating a plaintiff’s ability to assert an alternative claim directly under the North Carolina Constitution because legislative immunity merely presents additional requirements to State torts rather than operating as a complete bar. See Debaun v. Kuszaj, 238 N.C. App. 36, 40 (2014). Moreover, the but-for standard extends to all levels of government, as long as the officials are engaged in ‘“quintessentially legislative”’ acts. Providence, 382 N.C. at 221 (quoting Bogan, 523 U.S. at 55).

  • 27 Apr 2023 10:59 AM | Deleted user

    By Robert Young, Trisha Barfield, and Jeffrey Harnden, Elon Law Student

    North Carolina courts generally adhere to the notice pleading standard set forth in Rule 8(a)(1) of NC Rules of Civil Procedure allowing leniency in the level of particularity required by a litigant’s pleading so long as the parties are placed on notice of the transactions and occurrences giving rise to the litigant’s claim. The general standard for notice pleading as it applies to tort law requires that a litigant allege that a tortfeasor’s acts fulfill each of the elements of a given tort. For example, a claim for common law negligence requires the plaintiff to allege a (1) a legal duty; (2) a breach of that legal duty; and (3) an injury proximately caused by the defendant’s breach of duty.

    Under the notice pleading standard, one would presume that a plaintiff’s negligence claim satisfies Rule 8(a)(1) through factual allegations evidencing that the defendant had a specified legal duty, breached the duty by an act or omission as described, and that the defendant’s breach of duty proximately caused a specified injury. Negligence claims are customarily pled this way in typical construction defect litigation, particularly when a contractor defendant brings counterclaims or third-party claims for indemnification and/or contribution against a subcontractor and/or manufacturer. After all, due to the often elusive nature of the true cause of construction defects, or the likelihood of multiple causes of a construction defect, it is difficult for a party to know and plead detailed facts at the early pleading stage. Prior to discovery, only the most obvious manufacturing defects would be known to the parties, and the exact methods and workmanship employed by a subcontractor may be completely unknown to the plaintiff, at least during the pleading stage. Given these practical issues, notice pleading seems an appropriate and reasonable standard.

    However, the Court of Appeals appears to have recently applied a heightened notice pleading standard to third-party claims for indemnity and contribution based on underlying negligence in Ascot Corp., LLC v. I&R Waterproofing, Inc., 2022-NCCOA-747, 881 S.E.2d 353, 358, ___N.C. App. ___ , ___ (N.C. Ct. App. November 15, 2022). In Ascot, the residential construction general contractor Ascot Corp. contracted with I&R Waterproofing to waterproof a basement by installing a TUFF-N-DRI barrier system manufactured by Tremco. Id. Ascot separately contracted with Tanglewood to landscape the property. Id. Approximately two years after construction, water intrusion was discovered in the basement and Ascot independently paid for the repair of the water intrusion. Id. Ascot filed suit to recover its costs against I&R asserting claims for breach of contract, breach of implied warranty of habitability and good workmanship, negligence, and unfair and deceptive trade practices. Id. Subsequently, I&R filed a third-party complaint against both the landscaper, Tanglewood, and Tremco, the manufacturer of the waterproofing barrier, asserting claims for “compensatory damages and contribution” should I&R be liable to Ascot. Id.

    I&R’s third-party complaint alleged that Tremco had a duty to manufacture the water barrier in the manner of a reasonably prudent manufacturer, that Tremco breached such a duty by negligently manufacturing the barrier, and that as direct and proximate result of Tremco’s negligence I&R had suffered damages. Id. On its face, it appears that I&R properly alleged negligence against Tremco to assert a common law indemnity and contribution claim per a notice pleading standard. However, the Court of Appeals affirmed the trial court’s dismissal of I&R’s common law indemnity claim for failure to state a claim. Specifically, the Court held:

    The allegations set forth in I&R's complaint, including all incorporated allegations, fail to allege facts sufficiently specific to give information of the particular acts complained of. I&R's general allegation that "Tremco was negligent in the production, design, manufacture, assembly, and/or inspection of the Tremco Barrier System, and in breach of its duties to I&R" was not sufficiently specific and thus does not set out the nature of I&R's demand sufficiently to enable Tremco to prepare its defense. Id. at 365.

    The Court relied on the same reasoning to affirm the dismissal of I&R’s contribution claim based on underlying negligence against Tremco. Id. The Court’s ruling appears to require more than mere notice pleading. Interestingly, the Court cited a case decided prior to the adoption of the Rules of Civil Procedure in affirming the dismissal. Id. The Court explained that “…a general allegation without such particularity does not set out the nature of plaintiff's demand sufficiently to enable the defendant to prepare his defense." Id. at 365, citing, Stamey v. Rutherfordton Elec. Membership Corp., 247 N.C. 640, 646, 101 S.E.2d 814, 819 (1958).

    In contrast, the Court held that I&R sufficiently pled negligence to support an indemnity implied in law claim against Tanglewood, the landscaper. Id. I&R alleged that Tanglewood failed to incorporate proper drainage mechanisms in violation of the NC Residential Code, failed to install pipe of a correct length, and failed to connect certain drainpipes. Id. I&R’s claim against Tremco may have survived a Rule 12(b)(6) motion if it included more detailed allegations about Tremco’s failures and/or omissions during the design or manufacturing process. In other words, it is simply not enough to allege a conclusory allegation of negligence even when incorporating other allegations, which may present challenges for the pleader when the specific facts giving rise to negligence are not apparent at the pleading stage.

    Attorneys asserting indemnity and contribution claims based on underlying negligence should read the Ascot case as a tale of caution. It is not certain whether it was only the phrasing of I&R’s claim against Tremco that led to dismissal, or whether the Court analyzed the claim relative to I&R’s more specifically pled underlying negligence against Tanglewood. Regardless, the lesson here remains that mere notice pleading pursuant to Rule 8(a)(1) may not be sufficient and pleading negligence to support indemnity and contribution claims in these cases requires more factual detail to enable a defendant to prepare his or her defense. As courts will certainly differ in considering the sufficiency of indemnity and contribution claims, attorneys should avoid pleading only legally-conclusory terms with a general incorporation of other allegations and include as much factual support as possible even when lacking knowledge of the full extent of the alleged transactions or occurrences. With these considerations in mind, attorneys can “waterproof” their pleadings from a dismissal of their claims.

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