In Ohio, a company has gotten into trouble because of a class action lawsuit in connection with employment disputes. According to the report, the U.S. Equal Employment Opportunity Commission filed the lawsuit against Presrite Corporation. The EEOC claimed that the company refuses to hire female applicants at all of their plants. The federal agency pointed out that those female employees who were hired at the company suffered harassment.
]]> Aside from these, the EEOC stated that Presrite Corporation failed to keep employee data and application data, which are considered federal law violations. Allegedly, the company failed to provide employment applications to individuals who were hired at the company. The EEOC also alleged that the Ohio company failed to produce complete and accurate data for all applicants.As a result, Presrite Corporation must pay $700,000 in compensatory damages in order to settle the class action lawsuit filed by the EEOC last 2011. A decree also requires the company to offer jobs for at least 40 females who were involved in the case. Over the next three years, the company will offer jobs to at least 40 women who were involved in the case, as stated in the consent decree. The decree also forbids Presrite Corporation from discriminating against females in recruitment or hiring.
The case above pointed out that gender discrimination still occurs. Gender discrimination may occur when an individual encounters unfair treatment in terms of salaries, promotion, benefits and hiring. If that is the case, applicants and employees may receive compensation, particularly if they believe that they have experienced discrimination. The compensation can be recovered through an employment dispute.
Source: HR.BLR.com, "Corporation to pay $700,000 to settle EEOC class action lawsuit," May 2, 2013
]]>Recently, Goodyear Tire and Rubber Co. and United Steelworkers of America were reportedly in the process of reviewing their employment contracts. The contract is due to expire on July 27, 2013. The negotiation may affect 8,000 tire workers at six plants across the country, including in Ohio. United Steelworkers are part of a labor union representing workers from different plants owned by Goodyear. The first negotiation ended recently and will resume this coming June. Both parties involved are in the process of evaluating their options and issues that need resolution.
]]> The condition of the economy and Goodyear's earnings are most likely the factors that will affect the new employment contract. The company's earnings in the first quarter of 2013 were lower when compared with January through March of 2012. The company's spokesman promised that their sides will review the issues that are important for both parties involved, such as flexibility, pensions, health care costs and productivity. These are also the issues being considered by the United Steelworkers. They also asserted that the workers just want to keep what they have and are not interested in gaining anything in addition to their jobs.Unions like United Steelworkers aim to handle and protect the rights of the employees in their workplaces. One of its purposes is to represent employees in collective bargaining with the employers regarding employment contracts.
When it comes to employment contracts, it is usually best for employees to face the situation with all of the right information about their rights. Doing this may help both sides to settle issues associated with employment disputes.
Source: Newobserver.com, "Goodyear, union begin contract talks for 6 plants," Thomas J. Sheeran, April 29, 2013
]]>In early April, one of the writers claimed that the company failed to compensate for the additional hours she had spent on each show. The writer claimed that she spent 12 to 32 hours on each show and feels that she should have been compensated. The Fashion Police writers filed complaints and are seeking payment of $1.5 million for unpaid overtime and regular hours.
]]> Additionally, the 12 writers want to become members of the Writers Guild. Members of the Writers Guild are forbidden to write for their respective employers under Working Rule 8, which states that writers under the Guild contract should not accept work from any employer, firm or corporation that does not co-sign the appropriate minimum basic agreements.Wages and job benefits are the two most significant employment-related concerns for every worker, regardless of whether they are working for a large company or working for minimum wage. Violations may range from unpaid overtime to working hours to working-off-the-clock without pay.
In this kind of situation, if the employees believe that their rights have been violated because of unpaid working hours, they may have a chance to recover the compensation through an employment dispute. Employment disputes may seek compensation for unpaid working hours, lost wages and other benefits. The assistance of an employment litigation legal professional may help unfairly paid employees achieve the best possible outcome.
Source: Huffingtonpost, "'Fashion Police' Strike: Writers Demand Unpaid Compensation From E! and Joan Rivers' Production Company," Apr. 17, 2013
]]>Another scary withdrawal liability case that imposes personal liability on the owner of the withdrawing company
This is another withdrawal liability case from the Seventh Circuit that imposes personal liability on the owner of the company withdrawing from a multi-employer pension fund. The withdrawing company, Nagy Ready Mix, Inc., owed $3.6 million of withdrawal liability to the Central States Pension Fund. The was no dispute that other businesses under "common control" with Ready Mix were jointly liable on that amount. The only question is whether Ready Mix's owner, Charles Nagy, was personally liable as well.
After the Messina Products decision in February 2013 (706 F3d 874), the fact that Charles Nagy owned the improved real estate from which Ready Mix did business established that Nagy was personally liable under 29 USC 1301(b)(1). Nagy's real estate operation was an unincorporated "trade or business" under common control with the withdrawing employer, so Nagy is personally liable. That was the result in Messina Products, and is one of the results here. If the owners of the withdrawing business also own the real estate from which the withdrawing company does business, those owners are very likely to be personally liable for the withdrawal liability amount.
This case also establishes that because Nagy worked as an independent contractor to an unrelated business, his work as an independent contractor (essentially as a sole proprietor) also qualified as an unincorporated "trade or business" that triggered personal liability. The fact that the work was for an unrelated business (a business that managed a country club) did not matter. Simply working in an unincorporated trade or business as an independent contractor (rather than as an employee) also triggered personal liability.
Under traditional corporate law, owners/shareholders do not have personal liability for the company's debts unless a plaintiff can "pierce the corporate veil." But withdrawal liability is a very different animal. This case, like Messina Products, establishes that there are a number of ways to pierce the veil when the subject is withdrawal liability under ERISA, which is a very scary prospect for the owners of companies that participate in multi-employer plans. Here's the link to the case -
http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2013/D04-22/C:11-3055:J:Sykes:aut:T:fnOp:N:1122323:S:0
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Reportedly, Exel Inc. has become controversial due to a wrongful termination lawsuit. According to the report, the lawsuit was filed on behalf of a 23-year-old Ohio man who was terminated in May 2012. Allegedly, the company where he formerly worked, Exel Inc., terminated him because of religious discrimination. The lawsuit seeks compensation for lost wages, benefits and other expenses. The worker has also requested reinstatement.
]]> Discrimination is prohibited in the workplace. As a matter of fact, there are a number of laws that protect employees from employment discrimination in terms of hiring, promotion, equal pay and discipline. One of those laws is Title VII of the Civil Rights Act of 1964, which does not allow employers to discriminate against employees because of race, nationality or gender orientation.The Civil Rights Act of 1964 also protects employees from being discriminated against due to religious beliefs. The law also requires employers to rationally accommodate or adjust to the religious practices of the worker. Reasonable religious accommodation can be made as long as it will not create undue hardship on the employer. This accommodation means that the employer can make further adjustments to the work environment, flexible schedules or voluntary swaps in order to permit the worker to practice his or her religion. If the employer fails to consider this accommodation, such circumstances can be deemed religious discrimination.
Discrimination, either by race or due to religious beliefs, can be a clear violation of the employment law. With this in mind, employees terminated due to discrimination may file a wrongful termination claim against the employers. The claim may entitle the worker to receive compensation for lost wages, benefits and other reasonable expenses.
Source: The Columbus Dispatch, "Suit says Muslim's firing was based on religious bias," Joanne Viviano, April 11, 2013
]]>The US Supreme Court will decide when the statute of limitations period begins in an ERISA disability case
Last week, the US Supreme Court granted cert in Heimeshoff v. Hartford Life Ins., an ERISA disability case. The question to be considered by the Supreme Court is when the statute of limitations accrues - in other words, when does the clock start ticking to file suit? The plaintiff was a Wal-Mart public relations manager who suffered a variety of ailments, including lupus and fibromyalgia. The plaintiff stopped working in June 2005 and her long-term disability claim was denied by Hartford in November 2007, resulting in a lawsuit that was filed in November 2010. Hartford's disability policy has an internal limitations period - limiting legal actions to those filed "within 3 years after written proof of loss is required to be furnished" to Hartford.
The District Court dismissed the case, concluding that because the proof of loss notice was due within 90 days of the date the plaintiff stopped working (90 days from June 2005), the plaintiff's claim was barred because the three-year limitation expired in September 2008. Even if the "accrual" date was three years from the last date the plaintiff's counsel submitted evidence requested by Hartford, that date - September 2007 - was more than three years before the lawsuit was filed.
In a summary order, the Second Circuit affirmed, concluding that starting the three-year statute of limitations period upon the submission of the proof of loss form was permissible. Hartford's "policy language is unambiguous and it does not offend the statute to have the limitations period begin to run before the claim accrues" (the issuance of the final denial letter denying the claim) (page 4).
The US Supreme Court will now consider when the clock starts ticking - the date the proof of loss form is due, the date the last evidence is submitted, the date of the denial letter, or some other date. Here's the link to the Second Circuit's decision -
http://www.ca2.uscourts.gov/decisions/isysquery/7ce79201-1a7a-438f-b4d5-59a0a1737388/1/doc/12-651_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/7ce79201-1a7a-438f-b4d5-59a0a1737388/1/hilite/
Here's the link to the Supreme Court's grant of cert -
http://www.supremecourt.gov/qp/12-00729qp.pdf
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In Opinion 2013-1, the Ohio Board of Commissioners on Grievances Discipline recently opined that:
A lawyer may practice in more than one firm at the same time if the practice otherwise complies with the Rules of Professional Conduct. A lawyer who engages in simultaneous practice in multiple firms must recognize the potential ethical issues connected with such practice. The lawyer has to be diligent in avoiding conflicts of interest, and imputation of conflicts will apply across all associated "firms." The lawyer is also required to scrupulously maintain client confidentiality and professional independence. As part of the lawyer's duty to refrain from false, misleading, or nonverifiable communications about the lawyer or the lawyer's services, the lawyer must inform his or her clients of all multiple firm associations***.
]]> Reviewing the association with multiple firms in the context of current rules and modern practice, the Board has identified at least six reasons for a withdrawal of its long-standing position in prior opinions:
· In 1995 the Ohio Supreme Court repealed the language of Gov.Bar R. III(3)(D) that prohibited a lawyer's involvement with multiple legal professional associations;
· Second, the Ohio Supreme Court adopted the Rules of Professional Conduct in 2007, and the Board has not considered practice in multiple firms since that time;
· The Board issued Advisory Opinion 2008-1, which allows lawyers to maintain multiple "of counsel" relationships with different firms. As stated in Opinion 2008‑1, lawyers who are "of counsel" are considered members of the firm for purposes of conflicts and division of fees;
· In Advisory Opinions from other jurisdictions, the prevailing view is that practice in multiple firms is permissible if it otherwise complies with the applicable rules of ethics;
· The definition of "firm" and "law firm" in the Rules is expansive, and denotes a lawyer or lawyers in a law partnership, professional corporation, sole proprietorship, or lawyers employed in legal aid or public defender organization, a legal services organization, or the legal department of a corporation or other organization.
In rendering Opinion 2013-1, the Board withdrew Opinion 89-35, and Opinions 97-2 and 99-7 were withdrawn in part.
For more information on this Opinion, or to address other legal ethics and professional responsibility matters in your law practice, contact Alvin Mathews at 614.460.1619 or at amathews@arnlaw.com.
]]>ESOPs and other ERISA plans with private company stock dodge the "fair value" accounting bullet - for now
The Financial Standards Accounting Board's Standards Update 2011-04 required significant additional disclosures regarding the determination of an asset's "fair value" if the asset was not publicly traded - what the accounting rules refer to as "Level 3" assets. The disclosures require examples such as multiples of earnings, sales, and other metrics to be disclosed in a chart. For ERISA plans with a single Level 3 asset to be valued - such as an ESOP with only private company stock - this accounting rule would allow anyone with a calculator to determine the sales and earnings of the underlying business being valued. Because ESOPs and every other ERISA plan with over 100 participants must have audited financials that are included with the publicly-filed 5500 forms, this rule threatened to turn every large ESOP, and every other ERISA plan with a single privately-held Level 3 asset, into a quasi-public company.
The ESOP community therefore asked the FSAB to review the rule as it applied to ESOPs. The link to that request is here -
http://esopassociationblog.files.wordpress.com/2013/02/fasb-letter-tea-esca-nceo-feb-2013.pdf
The FASB's April 10, 2013 meeting took up the request. The Handout for the meeting summarizes the issue - that the public's access to the 5500 forms, combined with the new disclosures, presents significant concern to private companies. Comments 10-12 were supportive of the expanded disclosure, especially Comment #11, which looks like it came from the DOL - it refers to wanting the expanded disclosures to determine "whether an investigation should be launched." Here's a link to the handout (starting on page 3) -
The FASB voted to explore either exempting or indefinitely postponing the rule as applied to "nonpublic employee benefits plans" regarding the "equity securities of the plan sponsor" - in other words, private company ESOPs. The issue will now be a FASB "project" subject to a public comment period, which is a positive, pro-ESOP development. The FASB's minutes are here -
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The employment contract of one football player may send a message to every employee in the United States and in Ohio working without pay and experiencing contract disputes. In this case, the contract rights of Darrelle Revis may have been violated by the New York Jets after they demanded that he attend voluntary workouts. Voluntary workouts are required and the team noted that players who skip the workouts may experience a consequence like salary deduction. Reports confirmed that Revis' employment contract today indicates that he is required to attend voluntary workout days, although there are those who believe that the Jets insistence on this is a principle and not really required. However, the Players Union negotiated with the NFL that players should not be legally required to show up.
]]> The same concept can be applied to other employees. Ohio employees may encounter the same situation when they are working outside of their designated hours. It may happen when one employer requires employees to perform work without pay. Such circumstances may be a possible violation of the employment contract of the employee because it is against the laws established by the Fair Labor Standards Act.Consequently, the FLSA notes that if an employer requires employees to work, the time spent will be considered working hours and should be included in their paychecks. Failing to do this may be treated as a violation of the law associated with employment contracts and wages in particular.
Many employees continue to perform work without pay for fear of the consequences from their employers. In a situation like this, the worker may file a contract dispute because working without pay is a clear violation of the employment law. Through dispute, the employee may recover the payment for the unpaid working hours. Whether the person is an employee in a local business or a high-profile athlete, the employment principles are the same and they both have the same rights, which need to be protected.
Source: espn.go.com, "Jets look petty in Revis dispute," Rich Cimini, April 7, 2013
]]>As a litigator, I look at every President's yearly budget like an opening offer at the start of mediation - it might be what you want, it might be a test balloon, it might be a number of things, but what it certainly is not is what the final solution will look like. It's a first offer, not the final offer, let alone the final agreement.
But if the "first offer" in President Obama's budget contains any insight for us in ERISA Group, it has two bad, "anti-retirement" provisions. The first is the one that made the news late last week - the proposed $3 million cap on tax-advantaged retirement accounts, such as the 401(k), IRAs, etc. It is being pitched as a way to prevent future Mitt Romneys from accumulating IRAs with over $100 million, but it has a number of serious problems for small business owners, and for retirement savings in general. Here's a link to a story from Time that nicely summarizes the numerous problems, both conceptually as well as practically, with the proposal -
http://business.time.com/2013/04/10/obamas-budget-would-cap-tax-advantaged-savings/
The second problem has not been widely reported, but appears to be another example of the Obama administration's hostile view toward ESOPs. The budget would eliminate the deduction at IRC S. 404(k) for dividends paid by C corporations to employer securities held by an ESOP. This provision of the tax code was added in 2002; the budget proposes repealing it. With tax reform now in the works, this proposal may be moot as a budget issue, but is likely an accurate reflection of what the Obama administration thinks about ESOPs; this is just the latest of a number of anti-ESOP proposals that have come from the administration. Here's a link to a story summarizing this proposal, and The ESOP Association's criticism -
http://www.plansponsor.com/NewsStory.aspx?id=6442492677
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Established in 1965 following the federal Civil Rights Act of 1964, the EEOC had two decades of success in addressing the workplace issues of discrimination and advancing the numbers of white women, blacks and Hispanics in private enterprise. Since the late 1980s, however, progress has stalled.
]]> Federal law forbids discrimination in employment by race, color, sexual orientation or religion. The EEOC also permits workers who experience discrimination to file a charge or lawsuit.The 1964 Civil Rights Act required private employers and large companies to collect and provide data on the numbers of employees categorized under nine categories such as race, color and gender to the federal government.
According to a 2012 report, only half of 1,672 cases of employment discrimination between 1988 and 2003 led to settlements and only one-third of those who filed won.
Some analysts believe it may be possible to get things moving again by using EEOC data and social media outlets to spread the news and apply pressure on discriminating employers.
One professional suggests the creation of a simple EEOC certificate -- the Equal Opportunity Employment Notification -- to inform people about a company's discriminatory practices by using such social media venues as Facebook and Twitter.
Employee awareness of workplace discrimination can lead to complaints against employers. Complaints may range from personnel issues to defamation and even discrimination inside the workplace. Employees who experience discrimination may be eligible for compensation, depending on the situation and state.
Source: The Atlantic, "A Simple, Legal Way to Help Stop Employment Discrimination," Philip Cohen, April 1, 2013
Additional resources used for information contained in post:
http://employment.findlaw.com/employment-discrimination/employment-discrimination-overview.html
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