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President Trump has signed two new executive orders on October 9, 2019 to reduce government regulations without formal rule-making.  At the signing ceremony, he stated: "For many decades, federal agencies have been issuing thousands of pages of so-called guidance documents - a pernicious kind of regulation imposed by unaccountable bureaucrats in the form of commentary on how rules should be interpreted.  All too often, guidance documents are a back door for regulators to effectively change the laws and vastly expand their scope and reach."

One order, called "Promoting the Rule of Law Through Improved Agency Guidance Documents" requires agencies to post all of their guidance documents on a searchable website with the understanding that anything not posted is considered rescinded.  The other order, called "Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication" is an effort to prevent secret or unlawful interpretation of regulations and from unfair or unexpected penalties. 

The two orders would not prevent agencies from prosecuting various enforcement actions, but they state that violations of the law should be based on statutes and legally binding regulations.  It is unlikely that opinion letters will be affected because they are specifically authorized by the Administrative Procedure Act. 


Most readers are familiar with the fact that on August 7 of this year, ICE personnel arrested around 680 persons during raids of seven food processing plants in Mississippi.  On September 3, 2019, one of the plants raided, Koch Foods of Mississippi, LLC, filed a Motion to Suppress and Return of Property taken during the raids, contending that the raid was not legal, and that the "exclusionary rule" should bar the government's use of the information illegally seized during the raid.  The exclusionary rule applies as an application of the Fourth Amendment to the U.S. Constitution, which applies when government authorities exhibit deliberate, reckless, or grossly negligent disregard for Fourth Amendment rights in searches and seizures of a person's or entity's property.

The company's memorandum supporting its Motion basically contends that the affidavit supporting the search warrant did not contain any evidence that the company knowingly employed persons lacking sufficient work authorization.  The company cites law to the effect that when a challenged search is conducted pursuant to a warrant, the court must examine whether there is probable cause supporting the warrant, and whether the good-faith exception to the exclusionary rule applies even in the absence of probable cause.  The company contends under this analysis that the search warrant executed at the Morton plant was not obtained in good faith, and it was not objectively reasonable.  Instead, the affidavits leading to the warrant are founded on the presumption that certain deported persons had previously worked at the Morton processing plant, so that it should be assumed that the company must have known that they were hiring unauthorized workers.  The company's actions are probably in anticipation of possible penalties that ICE may charge after completing its audit of the facilities, and also an effort to restore the company's reputation in the community.


In case you haven’t heard, September 30, 2019 is the deadline for employers with more than 100 employees to file a new electronic form with the Equal Employment Opportunity Commission (EEOC) disclosing detailed pay data for 2017 and 2018.  EEOC has set up an electronic portal for these submissions, which must include detailed compensation data for 10 job categories, identifying employees by the same racial, ethnic and sex groupings used when submitting demographic data in earlier EEO-1 forms.

This comes amid ongoing litigation between an advocacy group and the EEOC, pursuant to an order from the D.C. District Court.  (The case has been appealed, but not stayed, which means that employers are expected to comply even as the appeal is pending.)  The push to collect pay data by demographic groupings, called “Component 2” of the EEO-1 form, originated in the Obama Administration: the Trump Administration put the Obama-era regulations on hold, but they was revived in a lawsuit, National Women’s Law Center, et al., v. Office of Management and Budget, et al.  The Court has ordered the EEOC to ensure Component 2 compliance at levels at least as good as those for the regular EEO-1 submissions by the September 30 deadline.  Interestingly, EEO-1 compliance levels run at about two-thirds of covered employers, and EEOC has always held the door open for filings for at least 11 months after the due date.  As of September 5, EEOC reported that only 13.4% of covered employers had submitted the Component 2 information.

Employers are legitimately concerned about the confidentiality of sensitive compensation data and worry that their information will be harvested by private attorneys seeking to file pay discrimination lawsuits.  We recommend that employers filing submissions use the “comment” box on the form to note that (1) the information provided is considered by the employer to be private, privileged and confidential, and is submitted subject to the EEOC’s assurance that it will not be disclosed; (2) the employer made its best efforts to gather information as required based upon dates set retroactively, and therefore the information provided is qualified due to various data-gathering issues; and (3) employees in the various pay “bands” do not perform equal work. 

The required form is 15 pages long and must be submitted electronically.  It’s not clear whether extensions will be granted, but some covered employers already have asked for hardship waivers.  And it’s not clear what the penalty for noncompliance would be: there’s only one reported case of an employer being fined for failing to timely submit the regular EEO-1 form, and that fine was just $100.

EEOC has prepared detailed guidance on how to complete the form, which may be viewed at https://eeoccomp2.norc.org/info. The Commission also is offering answers to employers’ frequently asked questions at: https://eeoccomp2.norc.org/faq.  A word of warning:  after the electronic report is submitted, the employer will not be able to access it.  If reports are due in future years, the employer will have to start from scratch.   To avoid having to re-invent the wheel, a prudent employer will take care to create and retain backup copies of all documentation submitted.

If the National Women’s Law Center case is reversed by the D.C. Circuit, the Component 2 requirement will go away, and employers who fail to file on time presumably will be excused.  But as of this writing, the court has ordered employers to file by September 30.  Further, on September 11, 2019, the EEOC announced that the filing of Component 2 may be a one-time event, as the EEOC states the burden to collect the data is higher than previously estimated and deserves additional examination before the Agency seeks White House approval for more pay reporting.  The previous pay collection requirement is set to expire after September 30, so there is additional temptation to employers to employers to file late or not at all.  Stay tuned!


This writer has experienced the "tester" issue in various ways readers will find quite interesting.  First, a "tester" is generally considered someone who seeks access or employment in a way designed solely to generate a legal case.  A number of years ago, and this writer represented a trucking employer at which an immigrant driver participated in a telephone interview.  The driver spoke with a heavy accent and "bated" the employer representative into questions about his accent and critical comments about his inability to communicate properly.  The driver applicant immediately filed a federal court lawsuit against the employer.  The employer did not want to bear the expenses of the litigation, and instructed this writer to attempt to immediately settle the case. 

After talking with the plaintiff driver over the telephone, who did not have counsel, it was obvious that the person was totally unreliable.  The circumstances were such that a face-to-face meeting with the driver was necessary to get the settlement release signed and then provide the settlement check to the driver. 

After getting the settlement agreement signed and paying the plaintiff driver applicant, the driver said that he had done this identical thing about 30 different times.  Actually, he made a living out of "setting up" employers in this manner, pocketing the proceeds, without even the need of an attorney to share the profit.

Fast forward a number of years, and this firm has had recent similar experiences involving a "tester" under the Americans with Disabilities Act (ADA).  In this situation, one of the firm's clients was sued by a woman who claimed that she had visited the client's shopping center and the parking, entrance, bathroom and other features of the shopping center did not comply with the public accommodation provisions of the ADA.  Wimberly & Lawson quickly found out that this female plaintiff was a named plaintiff in more than 100 lawsuits over the last couple of years.  In fact, published reports in the Atlanta newspapers indicated that the plaintiff's attorney filed several hundreds of lawsuits under the ADA, apparently sending around testers to seek violations.  The website of the attorney suggested that he pays his clients finders' fees to root out alleged ADA violations.

Some consider such tactics a fair fight for civil rights, while others contend that the tester tactics are an unethical attempt to get quick settlements from small employers who found it cheaper to pay plaintiffs' attorneys than to fight.  One such defendant who settled subsequently filed a class-action lawsuit targeting the plaintiffs' attorney, a business associate, and several of his clients as running an organized criminal campaign to squeeze largely minority-owned businesses with no real motive to make them more accessible to the disabled.  In at least one recent development in Florida, a federal judge sanctioned an attorney who had filed more than 650 ADA cases across the state.  The judge ordered the attorney to pay back settlements and pay other penalties. 

Employers should remember that the ADA public accommodation provisions applies to employers too, and not just other commercial establishments.  In fact, a number of recent lawsuits have been filed concerning inaccessible procedures for job applicants with disabilities.

For readers who consider such developments new, please remember that the use of "testers" has occurred for many years in the construction industry, where they are often referred to as "plants."  Such plants are typically union organizers or their agents and they seek employment with the goal of building NLRB charges or other litigation against the construction industry employer, sometimes as an effort to run the employer out of business.  This writer experienced one of those situations recently in the construction industry, whereby the union plants engaged in a work stoppage and baited the employer into firing them.  The NLRB found that the firings were illegal and ordered those employees reinstated with back pay.  Ultimately, a majority of the "strikers" returned to work, only to call a second strike.  As part of the NLRB compliance proceedings, the Board found that none of the strikers were due any back pay, apparently because they were employees of the union. 

The bottom line is that there are persons and entities that have a practice of "setting employers up" for various types of legal claims.


This newsletter in the past has published many articles about the Epic Systems Supreme Court ruling, which holds that employers may enter into individual arbitration agreements with employees requiring almost all disputes to go to individualized arbitration and waiving class and collective actions.  In a ruling on August 14, 2019, the NLRB broadened and clarified employer rights in this regard.  Cordua Restaurants, Inc., 368 NLRB No. 43. 

The NLRB addressed several important questions involving mandatory arbitration agreements following the Supreme Court's Epic Systems decision.  Specifically, the Board held:

  • Employers are not prohibited under the NLRA from informing employees that failing or refusing to sign a mandatory arbitration agreement will result in their discharge.
  • Employers are not prohibited under the NLRA from promulgating mandatory arbitration agreements in response to employees opting in to a collective action under the Fair Labor Standards Act or state wage-and-hour laws.
  • Employers are prohibited from taking adverse action against employees for engaging in concerted activity by filing a class or collective action, consistent with the Board's long-standing precedent.

What this means for employers:

  • Employers are allowed to condition employment on signing mandatory arbitration contracts.
  • Employers can warn workers that they will be fired if they fail or refuse to sign mandatory arbitration agreements.
  • Employers can require employees to sign mandatory arbitration pacts in response to workers opting into FLSA collective actions or class actions brought under state wage-and-hour laws. In those agreements, employees must agree that they will not opt into an existing collective action. This is a powerful weapon for an employer to wield in response to the filing of a collective action.

According to a 2018 study by the Economic Policy Institute, more than half of nonunion, private sector employers have mandatory arbitration procedures. However, these agreements are not "one size fits all." It is advisable to contact qualified counsel to craft an agreement that meets the needs of your particular business and workforce.


The National Labor Relations Board (NLRB) ruled on August 29, 2019 that employers do not violate the National Labor Relations Act (NLRA) solely by misclassifying employees as independent contractors.  The Board majority held that an employer's communication to its workers of its opinion that they are independent contractors does not, standing alone, violate the NLRA even if that opinion turns out to be mistaken.  According to the decision, such communication does not inherently threaten those employees with termination or other adverse action if they engage in activities protected by the NLRA, nor does it communicate that it would be futile for them to engage in such activities.  Velox Express, Inc., 368 NLRB No. 61. 

Editor's Note:  This NLRB ruling is critically important, as otherwise the contractor status of many entities across the country could have been put in doubt by the simple filing of a charge with the NLRB.  Instead, the NLRB decided that future legal battles about misclassification are to be decided in this context in other tribunals.

It should be noted that the outcome may have been different had the respondent in the case indicated to its workforce that union organizing or other protected concerted activities would be futile, or threatened purported independent contractors with reprisal for taking such actions.  The ruling left room for the finding of a violation in such circumstances, as all the Board did in the Velox case was to rule that an employer's communication of its position that its workers are independent contractors does not threaten reprisal or futility.  


On August 7, 2019, seven food processing plants in Mississippi were the subject of "raids" conducted by Immigration and Customs Enforcement (ICE).  The Secretary of the U.S. Department of Homeland Security said the raids had been planned for approximately a year.

How were these facilities selected?  Affidavits submitted by ICE in support of the warrant applications stated that, for years, temporarily detained undocumented workers - from as far as El Paso, Texas, and Yuma, Arizona -had employment cards from plants in Mississippi.  The presence of former detainees was supported by electronic ankle monitor readings, surveillance, and confidential informants.

The affidavits also revealed new approaches used by ICE on one or two of the companies that were particularly interesting in addition to the above.  At one of the plants, ICE checked the license plates in the parking lot and determined the owners of the vehicles.  ICE then compared the owners of the vehicles to the employees' names at the plant as determined by tax forms filed with the state.  They found very few employees at the plant that corresponded to the names of the owners of the vehicles, a factor ICE considers to indicate a lot of illegals.  Apparently, illegals tend to register their cars in their true names, but use fictitious names to seek employment.  In another approach, at one of the two plants ICE found that the company had selectively utilized E-Verify, apparently E-Verifying only those that were expected to pass the E-Verify system.  A further technique was not only to use audio, but also video recordings on informants, sometimes coming in and admitting to an HR hiring person that they would not pass the verification system, only to return a week or so later and talk to the same HR person utilizing a different fictitious name.  ICE agents analyzed employee rolls at a poultry company in Carthage, Mississippi, and found that numerous workers were using stolen identities, Social Security cards that didn't match their names, or numbers that reportedly belonged to dead people.

The critical question will be whether the employers knew that the individuals they were hiring were not authorized to work in the U.S.  Most large employers use the Federal government's E-Verify system, which is supposed to identify a worker's status.  But E-Verify is not 100% accurate.  The I-9 form that all employers must use to verify worker eligibility requires an employer to accept documentation offered by the employee and prohibits most further inquiry.  Poultry processors have been sued by the Federal government for seeking to verify documentation in some situations.  Good forgeries and false identities also can subvert the system. 

Many employers erroneously believe that using the government's E-Verify system protects them from fines.  That's not necessarily so, but it does raise the bar considerably for the prosecutor to show that the employer knowingly hired an unauthorized worker.  Another shortcoming of E-Verify is that it only works on new hires:  you can't go back and check the credentials of existing workers.

Why poultry processors, and why now?  There seems to be multiple factors at work within ICE.  First, ICE seems intent on tough enforcement and increasing deportation of illegal immigrants.  So far, the number of deportations during the Trump Administration lags far behind the numbers racked up during the Obama Administration.  On the other hand, many ICE officials across the country have been reassigned to duties along the Mexican border, making it more difficult for ICE to gather the personnel to conduct raids.  The demands on their workforce notwithstanding, ICE plainly made these unprecedented raids a priority.  Given the resources and preparation brought to bear on these raids, ICE may lack the resources to conduct many large raids in the near future.  Although he declined to speculate as to future plans, an ICE spokesperson did say they had no current plans to conduct similar raids in Georgia, which is the largest chicken processing state in the U.S.  However, the raids also indicate that ICE is ready to take on large scale operations and target specific industries and geographic areas. 

How does ICE select its targets?  An enforcement action usually begins with an ICE desk audit.  Sometimes an informant complains to ICE, or ICE may send in undercover agents to check out accusations.  At other times an illegal "ring" of fraudulent document providers is discovered primarily directing their activities toward a given facility or area.  Affidavits submitted in support of the Mississippi search warrants cited complaints, but also ankle monitor evidence showing that individuals previously detained and released, and lacking work authorization, had spent long hours at the plants. 

Recommendations:  There is no way to guarantee that your business will be beyond the reach of ICE, but there are steps you can take to minimize the risk:

  • Use E-Verify. It's not a guarantee, but it is certainly a step in the right direction.
  • Audit yourself. A periodic review of I-9s may bring anomalies to your attention before they come to ICE's attention. You can conduct an audit yourself or use outside help.  If you have legal counsel conduct your internal audit, the results are subject to the attorney-client privilege and you cannot be forced to disclose them.
  • Use what you learn. If the audit reveals a potential problem, contact the affected employee and give them an opportunity to make a correction.
  • Develop protocols to follow if an audit or raid occurs.
  • Issue a memo to all supervisors and managers informing them of the requirements of the immigration laws, directing them to report any knowledge of illegal status on the part of any worker to a designated management official.
  • When you receive evidence or reports of illegal status on the part of any worker, promptly conduct an internal investigation and keep an "immigration investigations log" of each incident and the conclusions.
  • Set up and follow a protocol upon receipt of a "Social Security mismatch" communication.
  • Confer with an attorney knowledgeable about the immigration laws upon receipt of an ICE I-9 audit letter, including how to respond to the audit, and how to respond to the results of the audit communicated by ICE.

If you are the subject of a raid:

  • Be polite to law enforcement officials but know your rights.
  • Call your lawyer.
  • Cooperate, but do not volunteer information. You will be awarded no points for being "nice."
  • Carefully review any warrant to understand its scope. The warrant should have a detailed description of when and where agents are going to search and what they may seize. You may need to limit your consent to their search depending on the terms of the warrant.  You do not have to let them search beyond the scope of the warrant. 
  • You do not have to answer ICE questions during a raid. Make a note of the questions and submit the answers later.

Seek advice of counsel as to whether you should consent to ICE agents speaking to your employees on the premises.  ICE can interview hourly employees privately, but a management representative (or counsel) may be present if they want to interview a manager.


The NLRB has been the most activist of the federal agencies in promoting deregulatory actions that benefit employee and management rights.  A part of the effort has been an attempt to undo the 92 precedents overturned by the Obama-Era NLRB.  But the Republican-majority NLRB is also aggressively pursuing tactics that make it more difficult for a future administration to overturn various reforms.  One of the avenues of such an approach is proposing changes through rule-making, as federal regulations are harder to undo in the future than an NLRB ruling which can be reversed by a future Board. 

On August 12, 2019, in a Notice of Proposed Rule-Making, NLRB is formally proposing three new rules:

1.         Blocking Charge Policy.  Currently, if a union has filed a petition for an election, but decides that the election is not likely to result in a union victory, it may file a so-called "blocking charge."  Under current NLRB policy, if an unfair labor practice charge is pending that might have merit, and is filed in the period before an NLRB election, the election is postponed under the "blocking charge" policy.  The same concept applies to a decertification election that attempts to vote an incumbent union out, and through such blocking charges the union can indefinitely postpone such a decertification election.

            Under the proposed new rule, elections would no longer be blocked by pending unfair labor practice charges, but the ballots would be impounded until the charges are resolved.  This measure would definitely improve employee and employer rights, and the Labor Act is supposed to protect such a right of free choice on the question of unionization. 

2.         Voluntary Recognition Bar.  In today's environment, unions often forego the NLRB election procedures to gain union recognition, and to gain the ability to start collecting union dues.  Instead, unions often try to attempt to get employers to agree to "voluntary" union recognition through a card-check procedure.  Under these procedures, if a union can get authorization cards signed by a majority of eligible employees, it is legal for the employer to recognize the union without a secret ballot NLRB election.  Some unions go to great lengths to coerce employers into agreeing to such measures, through pressure on the employer directly or through petitions to government bodies.  When an employer and union agree to such a measure, it is the employees that come up short due to a lack of free choice in a secret ballot election.                      

            Under the proposed new NLRB rule, employees would be notified when their employer has granted "voluntary recognition" to a union under Section 9(a).  Under current NLRB case law, employees have no right to decertify the union voluntarily recognized until a reasonable period of time has elapsed for the negotiation of a union collective bargaining agreement.  Under the proposed new rule, employees must not only receive notice of the recognition, but also be given a 45-day open period in which to file an election petition with the NLRB for a secret ballot election. 

3.         Section 9(a) Recognition in the Construction Industry.  There is a special rule in the construction industry known as the Construction Industry Proviso, which allows employers and union employers to "voluntarily" recognize unions without an election or even a card-check under Section 8(f).  This provision is unique to construction because of some special history there.  However, an election petition for decertification can be filed at any time under such a Section 8(f) relationship.  The unions often attempt to convert Section 8(f) relationships to Section 9(a) relationships, which can bar secret ballot election petitions by the NLRB during the term of a collective bargaining agreement.  But unions quickly found a way to get around the Section 8(f) requirements, by putting in tricky contract language converting a relationship to a Section 9(a) relationship.  Under the new proposed NLRB rule, to convert a Section 8(f) relationship into a Section 9(a) relationship, there would actually have to be positive evidence of majority employee support for union representation rather than tricky union contract language alone.

Another area the NLRB hopes to address in the near future concerns revisions to the NLRB's quickie election rule.


The Department of Labor (DOL) is struggling to finalize various proposed regulations at a faster pace due to two converging factors.  First, under the 1996 Congressional Review Act (CRA), rules finalized in the last year of an administration can be repealed if they have not gone into effect yet, and stayed in court while their validity is being challenged.  Under the CRA, any rule finalized in the last 60 legislative days of the congressional session can be vetoed within the first 60 days of the new Congress if a resolution is passed by both chambers and the President signs it into law.  Second, after the resignation of Alexander Acosta as Secretary of Labor, the new Acting Secretary, Patrick Pizzella, is known to be much more aggressive pursuing deregulation and pro-business initiatives.  Eugene Scalia has been nominated by President Trump as the new Secretary of Labor, but he is not expected to be confirmed until the fall.  Scalia is known to share Pizzella's enthusiasm for pursing pro-business regulatory reform, and Scalia and Pizzella have worked together in past administrations to do just that.

It may surprise readers to know that it takes 1-5 years to finalize a significant new federal rule.  The relevant agency must develop various documents supporting the new rule, allow for public comment, and particularly to follow closely the steps in the Administrative Procedure Act and other requirements of agency rule-making.  If the regulatory requirements are not met, a federal court can invalidate the federal rule and so careful planning is necessary.

Some 15 Obama-Era rules were invalidated using the CRA, and the same thing has happened to some of the current administration's regulatory proposals.

Publication of new proposed salary tests for the white-collar exemption is expected to be released any time now, and the DOL is pushing ahead on the joint employer rule and clarification of the "regular rate" for overtime purposes.  Another rule likely to move ahead in the near future is the "fluctuating work week" proposal, a rule giving employers the option to pay certain workers whose hours vary each week at half their regular rates, instead of time and a half for hours worked over 40.  While this rule currently exists, it is not always available to employers that compensate their employees with bonuses or other incentive-based pay. 


Many businesses have complained about federal agencies having too much power to interpret the laws they enforce.  For example, rather than amending the law or following the process to issue a new or revised regulation, agencies often issue fact sheets, operations handbooks, court briefs, and other statements and they ask the courts to follow the agencies' interpretations.  In a case called Auer v. Robbins in 1997, the Supreme Court had ruled that lower courts must defer to federal agencies' interpretations of their own rules.  The 1997 ruling was written by Justice Scalia, a staunch conservative, who later came to consider his opinion a mistake.  Since then, many thought that the Auer precedent would be overturned, but surprisingly it has survived, although in a weakened state, in a decision made by the U.S. Supreme Court in June 2019 in Kisor v. Wilkie

The majority 5-4 opinion indicates that an Auer deference should apply only when a regulation is "genuinely ambiguous," when an agency's interpretation is reasonable and when its approach stems from its "substantive expertise" and "fair and considerate judgment."  The Court says that deference is "rarely" warranted when an agency has changed its interpretation. 

The ruling will affect federal labor and employment agencies including the Labor Department, OSHA and the EEOC.  Their regulations are commonly involved in cases where their interpretations of regulations are major issues.  The bottom line is that the courts will be less willing in the future to defer to an agency's interpretations of its own regulations, and instead more inclined to interpret the regulation itself. 

It should be noted that there is another type of deference, cited in the famous case of Chevron v. Natural Resources Defense Council in 1984, in which courts are supposed to defer to an agency's interpretation of a statute which is ambiguous.  Chief Justice Roberts, who concurred with the more liberal members in Kisor, remarked that he does not see the Kisor decision as relating to the Chevron deference given to a statute, as opposed to an agency's interpretation of a regulation.


There is an important case pending before the Fifth Circuit U.S. Court of Appeals, dealing with whether ObamaCare will survive or instead be declared unconstitutional.  Last December, a Texas federal judge invalidated the entire law, after Congress in 2017 passed a law that reduced the penalty provisions to employees for being uninsured to $0.  It is argued that this leaves the ACA as a stand-alone command to buy an insurance product that the federal government deems suitable, but it does not raise any revenue, and thus cannot be considered the "tax" aspect that was necessary to sustain its constitutionality under an earlier Supreme Court ruling.  Two of the three judges on the appeals court indicated that they were dubious that without the mandatory provisions the law would be constitutional.  Even if portions of the law should be invalidated, however, other unrelated portions may remain, and in any event the issue is likely to eventually go back to the U.S. Supreme Court.

In a related development, the Administration announced on 6/13/19 a plan to let employees use special pre-tax health arrangements known as HRAs, which are funded by employers with pre-tax dollars, to buy individual insurance, including policies that do not comply with the ACA provisions.  The starting date for the plan is January 2020.  While the plan may expand coverage to another one million people previously uninsured, critics say the approach may encourage consumers to pull out of the ACA insurance pool.

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