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New York’s bill in support of regulated compensated gestational surrogacy — the Child-Parent Security Act (CPSA) — had the vocal support of Governor Andrew Cuomo, passed the State Senate, and likely had the votes in the House. But it never made it to the floor before the legislative session ended last week. What the heck happened?!

Some Background.

New York is one of the few states in the country that legally prevents a woman from carrying a hopeful parent’s or couple’s embryo to birth, and receiving compensation for her nine months of intense effort and … labor. Other jurisdictions that had previously banned the practice have since changed course in the last few years — including New Jersey, Washington State, and D.C. In the meantime, New York continues to be one of the few surprising holdouts, with an outdated law based on outdated notions and outdated technology.

As previously discussed in my column, while gestational surrogacy is a big part of the New York bill, the CPSA includes other key protections for parents hoping to conceive using assisted reproductive technology. For example, it fixes the state’s legal loophole that allows sperm donors who donated to a single parent to seek legal rights to the resulting child! And vice-versa, it closes the loophole that currently allows single parents to seek child support from a donor. So these were improvements all around.

New York’s ban stems from the disastrous Baby M case in the 1980s. That case occurred in next door New Jersey, where a woman agreed to be inseminated and carry the resulting child for another couple. This type of arrangement is generally referred to as “traditional,” or “genetic surrogacy.” In the Baby M Case, the genetic surrogate changed her mind about giving up the baby, and fled the state with child. Both New Jersey and New York quickly over-corrected and outlawed all compensated surrogacy. Since then, genetic surrogacy has largely been abandoned across the U.S., while gestational surrogacy — where the surrogate is not genetically related to the child she carries — has flourished. Note that the CPSA only aims to legalize gestational surrogacy, not genetic surrogacy, the type found in the Baby M Case. Last year, New Jersey (ground zero for Baby M) recognized that the times and medical practices have changed, and reversed its position by passing supportive gestational surrogacy legislation.

So Close! 

The momentum for the bill was building, and supporters believed that the CPSA had a good shot at becoming law this year. So, what pulled the brakes? I spoke with Denise Seidelman, a prominent New York adoption and surrogacy attorney, and part of a coalition in support of the CPSA. Seidelman shared her experience advocating for the bill. “It was one the most profoundly inspiring, and also intensely disappointing experiences. Emotions were running high on both sides of the issue.”

Seidelman explained her view on some of the factors that led to this not being the CPSA’s year. For one, she noted that the author of the original New York surrogacy ban (from 30 years ago), Helene Weinstein, is still a current member of the Assembly, and she is outspoken in her position, perhaps colored by her experiences of a generation ago.

Seidelman felt another factor in this year’s failure was the timing of a letter by Gloria Steinem, famed author and feminist, against the CPSA. Steinem’s letter was disappointing, and really a bit shocking for those familiar with how surrogacy works. Her letter referred to a 1998 NY Task Force report that came out against surrogacy, with no mention of a more recent and more relevant 2017 NY Task Force report in support of gestational surrogacy, with measured regulation. Unfortunately, Steinem spoke not from firsthand knowledge of the recent experiences of women who choose to be gestational carriers for others, but from a perspective that has long since gone by the wayside.

The letter described how the bill would risk the well-being of the marginalized women in the state — those in conditions of poverty. However, as pointed out in the rebuttal letter written by RESOLVE, the national infertility association, of the women who raise their hands to be surrogates, only about 5 percent are determined to be medically qualified, and are able to move forward. And one of the requirements is that they are financially stable. Additionally, the 2017 Task Force report found that the women who are acting as surrogates are not the marginalized of society, but those not reliant on compensation that may be received from acting as a gestational surrogate. Steinem’s letter is an imagination of the Handmaid’s Tale, but ignores the current reality of what surrogacy is, and how it works.

While Steinem has no doubt historically been a force for good for women (and we are grateful!), the world is a changing place. Seidelman and others urged Steinem  — and will urge her again — to look closer into surrogacy, how it really works now, and to meet the women volunteering to help others experience parenthood. She is unlikely to find the trafficked, exploited women she imagines.

Next Year. 

To end on a positive note, Seidelman explained that her disappointment that the CPSA didn’t make it across the finish line is offset by the overall huge steps the CPSA has made. While this year might not have been the year, with the increased education and understanding for lawmakers, 2020 is looking good.

Ellen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

This website has previously discussed the phenomenon of “stealth layoffs” within the legal community.  For those of you who do not follow Above the Law as closely as I have for the past decade, a stealth layoff is when a firm wants to get rid of an attorney, but they do not fire them in the traditional sense.  Rather, they tell the attorney that their days are numbered and then give the attorney some time (usually several months) to find a new job.  The firm typically provides the attorney ample leeway to go to job interviews, and supervisors usually do not tell prospective employers about the nature of the attorney’s departure.

Sometimes, attorneys subject to stealth layoffs do not find jobs so quickly and need to be terminated in the traditional way.  However, many times attorneys are able to secure employment without being fired, and both parties gain something from the arrangement.  The attorney gets to secure other employment and not blemish their career with the embarrassment and negativity associated with being terminated.  The firm also gets to maintain its reputation, and usually does not need to provide severance payments to the departing attorney.  However, there are certain situations in which it is actually better to get fired than to be stealth laid off from a firm.

Believe it or not, there are sometimes many financial benefits to being fired in the traditional sense at some firms.  Most Biglaw shops pay sizable amounts in severance to departing attorneys, in part to help attorneys during their career transition, and mostly to decrease their legal exposure in case an attorney wants to sue the firm.  Although the amount of severance varies from firm to firm, many Biglaw shops typically provide three to six months of salary as severance, and this can be a substantial amount of money.

If attorneys are able to find a job shortly after being laid off from a shop that offers this type of severance, they can devote their severance to purposes other than merely paying for living expenses.  This is especially true if you work in a state that pays unemployment benefits even if someone is receiving severance.  Indeed, if someone gets a job quickly, and devotes the lion’s share of their severance payments to student debt repayment, they could effectively pay off a sizable amount of their student loans.  If the job market is strong, and it is easier to find a new job, the severance offered by many firms can offer a substantial windfall that is often not obtainable by being stealth laid off.

In addition, being stealth laid off can be a worse experience than being laid off in the traditional sense.  I have never been stealth laid off myself, but I have some friends who have, and they have told me how negative the experience can be.  One colleague of mine described feeling like “the walking dead” around the office as a result of being stealth laid off.  Going to work is a rough experience for these folks, since it can be embarrassing and frustrating to interact with colleagues responsible for the stealth layoff.  In addition, setting a discrete time by which an attorney needs to find a new job can create an impending sense of doom.

Of course, being laid off in the traditional sense is no picnic.  Indeed, not having something to do with your time while searching for new work can be a lonely and depressing experience.  I am sure many of us (especially veterans of the Great Recession) know someone who has struggled with the tribulations of being laid off from a firm.

However, as previously mentioned, most attorneys in Biglaw receive considerable severance after being terminated.  In addition, being laid off in the traditional sense means that an attorney can use their time however they wish.  I am sure that everyone has heard the term “funemployment” at some point or another, and being laid off in the traditional sense, with an income stream from severance, can be a positive experience.  I personally know people who have traveled, pursued passions, and made other positive uses of their time after being laid off from firms.  Again, this experience varies greatly from person to person, but being stealth laid off typically binds an attorney to continue billing for a firm, whereas being terminated outright allows attorneys more time to do as they please.

Furthermore, being stealth laid off sometimes does not guarantee that an attorney will have an easier time finding employment than if they are terminated outright.  If someone is laid off in a mass reduction in force (of the type covered many times on this website), people might understand that attorneys were let go not for performance issues, but because of financial troubles.  However, if a firm lets people go through stealth layoffs, and prospective employers discern this fact, then it appears as if the attorney was terminated because of poor work performance.  People within the legal industry are fully familiar with stealth layoffs, and if hiring partners catch wind of someone being stealth laid off, this might put that attorney at a greater disadvantage than someone who is subject to a larger, public reduction in force.

In the end, stealth layoffs are common within the legal industry, and it is typically understood that this process offers benefits to both attorneys and firms alike.  However, under certain circumstances, it is actually better to be terminated outright than subject to a stealth layoff.

Jordan Rothman is the Managing Attorney of The Rothman Law Firm, a New Jersey and New York litigation boutique. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jrothman@rothmanlawyer.com.

A few days ago, a group of wealthy Americans wrote an open letter to the 2020 presidential candidates asking that they and their peers — 0.1 percent of the richest Americans — be subject to a wealth tax. The letter cites Senator Elizabeth Warren’s campaign proposal: a 2 cent per dollar tax on assets after a $50 million exemption and an additional 1 cent on the dollar tax on assets over $1 billion.

They claim that the revenue from the tax would be used to fight climate change, expand health care, provide student loan debt relief, and modernize infrastructure to name a few.

Finally, they claim that the majority of Americans support a wealth tax for the financially well off. Of course people will support a tax that they don’t have to pay.

These calls to “tax us more” are nothing new. Every so often, usually before an election, a faction of the ultra-wealthy for whatever reason thinks their group does not pay enough taxes. Some believe they are being enlightened and altruistic. Others suspect they are suffering some kind of wealth or privilege guilt.

Critics say that these statements are illusory and even condescending. If these people care so much about the deficit and inequality, they should be the first to contribute to the public fisc. They can do this either by artificially inflating their tax bill or making a donation to the Federal Bureau of the Fiscal Service. According to the bureau’s website, for the last three years, the average yearly donation totaled $2.69 million. This is not a lot considering that the federal government received $3.38 trillion dollars in revenue during the 2018 fiscal year. From that perspective, the yearly donations are not enough to cover the daily accrued interest of the federal debt. It’s like going to a Kickstarter page and donating a measly $1 in exchange for a simple “Thank You” email.

I’m not going to opine on whether a wealth tax will work. Instead, I want to highlight some of the issues I had with this letter.

First, they might regret this if the wrong people are in charge of the government. While the authors claim that the letter is nonpartisan, it is very likely they are reaching out to the Democratic presidential candidates as they are more likely to implement a wealth tax. They also claim to be more receptive to addressing climate change and wealth inequality. But let’s suppose the Republicans sweep the 2020 elections and proposes their own version of a wealth tax. Would the authors support it then? Will they agree with the conservatives’ approach and interpretations to everything they addressed in their letter?

Second, there might be more effective ways to accomplish the author’s goals. Look, it is great to want to improve health care and fight climate change and wealth inequality. Few people would disagree although reasonable minds can differ on how to do it.

There are many non-profit organizations that exist to improve the environment or to provide free or low-cost health care. Some of them could face financial problems if their donor base erodes due to a recession or some other unexpected event. The authors can use their fortunes and connections to either help new or existing organizations have a steady donor base. Or they can set up new organizations in an underserved area.

As the presidential candidates prepare their agendas, the wealth tax will be one topic up for debate. The open letter indicates that there is at least some support from unlikely allies. But will their peers agree with them? Will there be a feasible way to value taxable wealth when the ultra-wealthy are likely to own all kinds of assets? Is it better to encourage the wealthy to invest in the private sector or non-profits instead? And will it create any distortions in economic behavior? These are the questions I hope will be answered as the presidential race continues.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

* After being subpoenaed, former special counsel Robert Mueller has agreed to testify in open hearings before the House Judiciary and Intelligence Committees on July 17. How rare that someone would actually comply with a Congressional subpoena these days! [Washington Post]

* “What are they hiding? Tell Joe Biden. Trump released his list. Why won’t you?” In case you missed it, a conservative legal advocacy group plans to spend big money on national ads demanding that 2020 Democratic presidential candidates release a shortlist of their potential Supreme Court nominees. [POLITICO]

* Harvard Law’s Pipeline Parity Project, a group that’s working to end mandatory arbitration among Biglaw firms, is going national. Now known as the People’s Parity Project, the group has expanded its mission and hopes to form chapters at least six other law school campuses. [Law.com]

* “It is time to do away with the stigmatization of women who challenge discrimination and harassment in their workplaces.” Three of the four women who were previously proceeding anonymously in their gender bias case against Jones Day have come forward to reveal their names. [Big Law Business]

* The latest high-dollar addition to the Yankees is Mike Mellis, formerly the top lawyer at Major League Baseball, who will slide into home as the Bronx Bombers’ executive vice president and chief counsel. [New York Law Journal]

* Timothy Thornton, CEO of 150-lawyer Greensfelder Hemker & Gale, RIP. [American Lawyer]

Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Emmerson Mnangagwa

Mnangagwa, who replaced longtime leader Robert Mugabe after an army coup in November 2017, is trying to attract investment and lift growth after a litany of failed economic interventions under his predecessor.

His government said on Monday the country’s interim RTGS dollar would be the only legal tender, ending a decade during which multiple currencies including the U.S. dollar had been accepted in shops.

But the surprise manner in which the latest currency reform was announced, and Zimbabwe’s track record of printing money to plug holes in its public finances, mean many people do not believe it will succeed.

With inflation close to 100% last month and desperate levels of unemployment, Zimbabweans are impatient for progress. Unions are threatening strikes if the government does not overturn its policy.

“It has always been clear that for our economy to truly take off, we need our own currency,” Mnangagwa said in a statement.

“While the multi-currency regime helped stabilise the economy, it did not give us control of monetary policy and left us at the mercy of U.S. dollar pricing which has been a root cause of inflation.”

In the capital Harare, major grocery and fast food chains appeared to heed the directive to stop accepting foreign currencies, but some informal traders selling clothes, car parts and electronics vowed to defy the new rules.

“If I stop taking U.S. dollars, how am I going to replace my stock? I have not seen anyone who got U.S. dollars from the bank in a long time,” said a clothes seller who only wished to give his first name, Thomas.

PROTEST THREAT

The RTGS firmed slightly on the black market on Tuesday, but exchange rates were quoted in a wide range, between 7 and 11 to the U.S. dollar compared with between 11 and 12 on Monday, reflecting uncertainty about how the reform would pan out.

Traders attributed the generally firmer rate to tight availability of the RTGS a day after the central bank hiked its overnight lending rate to 50% from 15% and announced plans to try to curtail RTGS liquidity.

Zimbabwe introduced the RTGS as a transitional unit in February as a step towards relaunching the Zimbabwean dollar.

The Zimbabwe Stock Exchange’s industrial index fell 0.7% on Tuesday, breaking a sustained rally. Volumes were thinner, with shares worth 4.3 million RTGS traded on Tuesday, down from 32 million RTGS on Monday.

One sign Zimbabweans are distrustful of the RTGS is that it is weaker on the black market than on the official interbank market, where it trades around 6 to the dollar.

Analysts are sceptical that Zimbabweans and local firms will sell foreign currency to buy RTGS, as the government wants them to, unless they are forced.

They point out that Zimbabwe has few foreign-currency reserves with which to defend the RTGS.

The country’s largest labour body and the main opposition party, the MDC Alliance, sharply criticised the decision to switch to using the RTGS as the country’s sole currency.

“If the government does not reverse this ruinous policy immediately and announce U.S. dollar salary payments, we will immediately mobilise workers for mass action,” Zimbabwe Congress of Trade Unions (ZCTU) president Peter Mutasa told reporters.

The ZCTU – which groups teachers, factory workers, mine workers, farmhands and others – led protests against a 150% fuel price increase in January, triggering a violent crackdown by the army and police that left at least 12 people dead, according to rights groups.

The MDC’s head of policy and research, Tapiwa Mashakada, said the currency reform would exacerbate widespread shortages of critical goods.

“The wheels have finally come off as the Zimbabwe government has been cornered and forced to involuntarily de-dollarise without a plan,” Mashakada said. “At present Zimbabwe cannot afford a paper currency which has no economic value.”

Post published in: Business