Author: National Law Forum

A group of in-house attorneys developed the National Law Review on-line edition to create an easy to use resource to capture legal trends and news as they first start to emerge. We were looking for a better way to organize, vet and easily retrieve all the updates that were being sent to us on a daily basis.In the process, we’ve become one of the highest volume business law websites in the U.S. Today, the National Law Review’s seasoned editors screen and classify breaking news and analysis authored by recognized legal professionals and our own journalists. There is no log in to access the database and new articles are added hourly. The National Law Review revolutionized legal publication in 1888 and this cutting-edge tradition continues today.

Prevailing Antitrust Defendants Recover $367,000 in e-Discovery Costs

Posted yesterday at the National Law Review by Eric S. O’Connor  of  Sheppard Mullin – a recent case out of the Western District of PA – Race Tires America v. Hoosier Racing Tire Corp., where prevailing antitrust defendants were awarded  by the court $367,000 in e-discovery costs incurred by their vendor. 

Recently, prevailing antitrust defendants were awarded $367,000 in e-discovery costs incurred by their vendor. See Race Tires America v. Hoosier Racing Tire Corp., 2011 WL 1748620 (W.D. Pa. May 6, 2011). While the Court labeled the facts as “unique” and that its holding was limited, the Court’s opinion is very thorough and the facts may be familiar to many antitrust defendants.

In today’s age where the costs of e-discovery can run several hundred thousand dollars or more and outside vendors are routinely hired to help, this holding can be used as a shield and a sword. During discovery, a party can alert the other side that aggressive discovery requests and a demand for many electronic search terms is a major factor in awarding costs of e-discovery – if the responding party prevails. And, if a party should prevail, the potential for an award of the costs of e-discovery can be an additional bonus and/or leverage for any post-verdict resolution without appeal.

The facts are simple. Plaintiff Specialty Tires America (STA) brought antitrust claims against Hoosier Racing, its tire supplier competitor, and Dirt Motor Sports, Inc. d/b/a World Racing Group, a motorsports racing sanctioning body. STA claimed that a so-called “single tire rule” by various sanctioning bodies like Dirt Motor Sports, as well as the related exclusive supply contracts between some of these sanctioning bodies and Hoosier violated Section 1 and 2 of the Sherman Act and caused STA in excess of $80 million in damages. See Race Tires America v. Hoosier Racing Tire Corp., 614 F. 3d 57, 62-73 (3d Cir. 2010). The District Court granted summary judgment in favor of defendants finding that STA had failed to demonstrate antitrust injury, and the Third Circuit Court of Appeals affirmed. Id. at 83-84.

The normal rule that “costs — other than attorney’s fees — should be allowed to the prevailing party” (Fed. R. Civ. P. 54(d)(1)) creates a “strong presumption” that all costs authorized for payment will be awarded to the prevailing party, so long as the costs are enumerated in 28 U.S.C. § 1920, the general taxation-of-costs statute. As prevailing parties, the defendants each filed a Bill of Costs in which the majority of amounts requested were e-discovery costs. Plaintiff objected arguing that e-discovery costs were not taxable under 28 U.S.C. § 1920(4).


Section 1920(4) allows recovery of “[f]ees for exemplification and the costs of making copies … necessarily obtained for use in the case.” 28 U.S.C. § 1920(4). There are two statutory interpretation questions that have divided Courts. First, costs of electronic scanning of documents can be recoverable as “necessary” or unrecoverable as a mere “convenience.”

The other issue takes a few different forms, but focuses on whether the terms “exemplification” and “copying”, which originated in the world of paper, should be limited to physical preparation or rather updated to take into account changing technology and e-discovery. The Court discussed a litany of these cases. Some courts that have applied § 1920(4) to today’s e-discovery demands, have limited exemplification and copying to just the costs for scanning of documents, which is considered merely reproducing paper documents in electronic form, and refused to extend the statute to cover processing records, extracting data, and converting files. Courts are also divided on whether extracting, searching, and storing work by outside vendors are unrecoverable paralegal-like tasks, or whether such costs are recoverable because outside vendors provide highly technical and necessary services in the electronic age and which are not the type of services that paralegals are trained for or are capable of providing.

In this case, because the Court and the parties anticipated that discovery would be in the form of electronically stored information and because plaintiff aggressively pursued e-discovery (e.g., directing 273 discovery requests to one defendant and imposing over 442 search terms), defendants’ use of e-discovery vendors to retrieve and prepare e-discovery documents for production was recoverable as an indispensable part of the discovery process. The Court also found that the vendor’s fees were reasonable, especially because the costs were incurred by defendants when they did not know if they would prevail at trial.

The Court also denied the plaintiff’s request for a Special Master to assess the reasonableness of e-discovery costs incurred by the prevailing defendants as an unnecessary cost and delay.

Copyright © 2011, Sheppard Mullin Richter & Hampton LLP. 

2nd Social Media Legal Risk and Strategy Conference Jul 19-21 SanFrancisco

The National Law Review would like you all to know about the upcoming 2nd Social Media Legal Risk and Strategy Conference:  Minimizing Legal Risk for Corporations Engaged in Social Media July 19-21 in San Francisco, CA.  

Key Conference Topics Include:

  • Insights and updates on the changing legal landscape for social media
  • Practical strategies to develop robust and compliant social media strategies
  • The role and involvement of legal in the social media initiatives
  • Overcoming the various legal risk from IP, Employment Law to Privacy when organizations engage in social media engagement
  • Analyzing emerging trends and potential legal risk in social media

Key Conference Features Include:

  • Pre-Conference Workshop A (July 19th): Uncovering Current and Emerging Social Media Trends and Applications To Forecast and Minimize Potential Legal Liabilities
  • Pre-Conference Workshop B (July 19th): Monitoring And Tracking Online Activities To Mitigate Legal Risk
  • For More information and to Register Please Click Here:

Attendees are eligible to receive up to 20 CLE credits!

 

Can We Talk? Doing So Significantly Increases Early Allowance of Patent Applications

Posted this week at the National Law Review by James E. Bradley, Jeffrey S. Whittle, and Glenn M. Strapp of Bracewell & Giuliani LLP – a nice overview of the United States Patent Office (“Patent Office”) data which shows that by talking to a patent examiner prior to a first official action, an applicant is three (3) times more likely to get a first action allowance of a patent application.

Talking to patent examiners often helps advance the examination of a patent application.  Now United States Patent Office (“Patent Office”) data shows that by talking to a patent examiner prior to a first official action, an applicant is three (3) times more likely to get a first action allowance of a patent application. A newly expanded Patent Office program makes it easier to talk to the Examiner prior to initial examination.1 The heart of the program is an “Examiner Interview” that takes place before the examiner issues a first official action, which allows the examiner and patent applicant to discuss the application, identify allowable patent claims, and shave months or years off of the time from filing of an application to receipt of an issued patent.

The new program, officially called the Full First Action Interview Pilot Program, is not entirely new. The First Action Interview Pilot Program began in April, 2008, and this initial program transitioned into the Enhanced First Action Interview Pilot Program in October, 2009. Those programs were limited to patent applications in specific technologies, or “art units,” within the Patent Office.2  Under the new full program, patent applications in all art units are eligible, provided that the applications meet other specific requirements. Unlike the previous interview pilot programs, the full program does not limit eligibility to patent applications filed before a specific date.3 The full program, however, still is a pilot program and is scheduled to continue only until May 16, 2012.4 The one-year period will give the Patent Office time to collect more data on the benefits of the full program.

A brief summary of the patent prosecution process helps illustrate where the First Action Interview Program can reduce the patent prosecution time. In a conventional patent application cycle, the patent applicant submits an application to the Patent Office, and the application sits in a queue until the examiner evaluates the patentability of the claims. If the examiner considers one or more claims not to be patentable, the examiner issues a first official action. The applicant can respond by arguing the merits of the claims based on how the claims currently exist in the application or by amending the claims in the application to make them patentable. The examiner, in turn, can either allow the claims or issue a subsequent (non-final or final) official action. Under the best of circumstances, it can take months for the Patent Office to issue a subsequent official action, and the response from the applicant can take weeks or months. These delays associated with subsequent official actions can be reduced or eliminated by the First Action Interview Program.5

The heart of the First Action Interview Program is an interview between the applicant and the examiner in which the examiner and the applicant can talk about the application before the examiner issues the first official action. Participants in the earlier First Action Interview Programs have found the program beneficial because it gives the applicant the opportunity to resolve patentability issues one-on-one with the examiner at the beginning of the patent prosecution process.6 When the applicant and the examiner communicate, i.e., by talking one-on-one, before the first official action, much of the patent prosecution activity that would normally follow the first official action can be reduced. Statistics published by the Patent Office indicate that resolving issues before the first official action can lead to early allowance of the patent application. Indeed, under the First Action Interview Pilot Programs, approximately 34% of all applications were allowed on the merits on the first action, compared to about 11% of all applications not involved in the program.7

Existing Patent Office rules already allow an applicant to request an examiner interview before the first official action. Unfortunately, those interviews are granted at the examiner’s discretion, and the examiner may require the applicant to show why such an interview is justified. Under the First Action Interview Program, the interview is granted on a non-discretionary basis, provided the applicant follows specific procedures defined by the program. To qualify for the program, the applicant must file the request for interview before May 16, 2012 and meet each of the following requirements:

  1. The application must be a non-reissue, non-provisional utility application or an international application that has entered a national stage;
  2. The application must contain three or fewer independent claims and 20 or fewer total claims;
  3. The claims must be directed to a single invention;8
  4. The request for a first action interview must be filed electronically; and
  5. The request must be filed before a first official action on the merits.

If the application meets these requirements, the examiner will conduct the usual prior art search and issue a Pre-Interview Communication to the applicant. That communication will include citations to prior art references and an identification of any rejections of or objections to the claims. The applicant then has one month to schedule an interview with the examiner and submit any proposed amendments or remarks, or else file a request not to have the first action interview with the examiner. At the interview, the applicant and the examiner can talk about the prior art and try to identify the broadest allowable patent claims.  After the interview, the examiner will (hopefully) issue a Notice of Allowability or a First Action Interview Office Action. There is no additional fee required to participate in the First Action Interview Program. Therefore, it is a cost effective way to reduce the patent prosecution time by potentially reducing the time from the first official action to the issuance of the patent.

Because the Full First Action Interview Pilot Program is a pilot program and is scheduled to end on May 16, 2012, those interested in participating in the program should request an interview without delay.

___________________

1 “Full First Action Interview Pilot Program,” Kappos, David J., Director of the United States Patent and Trademark Office, May 6, 2011, available here(opens in a new window).
2 Art Units 1610, 1795, 2150, 2160, 2440, 2450, 2617, 2811-2815, 2818, 2822-2823, 2826, 2829, 2891-2895, 3671, 3672, 3673, 3676, 3677, 3679, 3735, 3736, 3737, 3777, 3768, 3739, 3762, 3766, and 3769. Date restrictions further limited eligible applications within these art units. Enhanced First Action Interview Pilot Program, available here.
3 The Enhanced First Action Interview Program, which ended April 1, 2011, was limited to applications filed before a specific date. The specific dates were different for each of the 19 eligible art units, and ranged from Aug. 1, 2006 and May 1, 2008. Id.
4 Applicants that apply and meet all requirements will be able to participate in the program regardless of whether the interview and first official action occur after the May 16, 2012 end-date of the program. See Frequently Asked Questions Regarding The First Action Interview (FAI) Pilot Program, available here(opens in a new window).
5 In 2010, Average First Action Pendency, the average time from filing a patent application until the first official action, was 25.7 months. The Average Total Pendency, the average time from filing until the application issued as a patent or abandoned, was 35.3 months.
http://www.uspto.gov/about/stratplan/ar/2010/mda_02_03.html
6 “Full First Action Interview Pilot Program,” Kappos, David J., Director of the United States Patent and Trademark Office, May 6, 2011, available here(opens in a new window).
7 USPTO Announces Full First Action Interview Pilot Program, May 16, 2011.
8 If the Examiner finds patent claims are directed to more than one invention and issues a restriction requirement, the Applicant must elect claims for a single invention without traverse. Failure to elect without traverse disqualifies the application from the First Action Interview Program.

© 2011 Bracewell & Giuliani LLP

Implementing Effective Litigation Holds

Posted this week at the National Law Review by Laura Broughton Russell and David L. Woodard of Poyner Spruill LLP – Important things for Employers to Consider about Litigation Holds:

Does your company have an established procedure for issuing timely litigation holds?  Recent court decisions make it clear that employers have a duty to preserve electronically stored information and paper documents they know or should know would be relevant to a current or threatened legal action.  The consequences for failing to do so can be severe.  Events which trigger an employer’s duty to preserve information/documents include, but are not limited to, the following:

  • Receiving notice that the employer is a party to a legal or an administrative proceeding, such as a charge of discrimination;
  • Receiving a letter threatening a claim on behalf of an applicant or current or former employee;
  • A verbal demand from an applicant or current or former employee relating to a legal claim;
  • Other “red flags” exist or a “totality of circumstances” indicate a claim is likely to be made by an  applicant or current or former employee.

A litigation hold notice is best made in writing,  It should instruct recipients to preserve and not destroy (or overwrite) electronically stored information and paper documents that are relevant to current or threatened litigation.

Although the litigation hold notice must be tailored to the facts of each particular situation, at a minimum, it should include the following:

  • Name of the matter or individual involved;
  • Warning of the importance of the hold and the consequences for not complying with it;
  • Direction not to alter or destroy information/documents;
  • Reason for the hold – e.g., legal action;
  • Reason the recipient (see below) is getting the hold notice;
  • Types of information included in the hold and the applicable time period.  (Information subject to the hold could include personnel files and other employment related documents, e-mail and other forms of correspondence and electronically stored information.)
  • Instructions for preserving information/documents;
  • Suspension of any routine document retention/destruction policy;

The hold notice should be issued to all employees reasonably likely to have information relevant to a claim – the “key players” in the matter.  There could also be instances in which outside vendors would also need to be issued a hold notice.

The employer’s IT department should help implement litigation holds, particularly with regard to documents housed or stored in e-mail accounts, or on computers, cell phones PDAs, or on flash drives, as well as with regard to taking control of backup tapes and stopping any automatic overwriting of electronic data.

Finally, employers should enforce litigation holds and, if a violation of the hold is discovered, take prompt action to remedy the violation if possible.  Steps also should be taken to ensure no further violations occur, such as taking disciplinary action up to termination.

Litigation hold notices must be tailored to the facts of each case and should be reviewed by counsel knowledgeable in this area.  If you have a question about litigation hold practices, Poyner Spruill attorneys are experienced in minimizing legal risks through the effective use of litigation holds and are available to assist employers with any of their needs.

© 2011 Poyner Spruill LLP. All rights reserved.

Which Employers Will Be Responsible For Health Coverage In 2014?

Recently posted at the National Law Review by Abby Natelson  of  Greenberg Traurig, LLP – provides more details about which employers will be responsible for providing healthcare coverage in 2014:

The new health care law, otherwise known as the Patient Protection and Affordable Care Act (PPACA), requires that, beginning after December 31, 2013, “applicable large employers” must provide affordable health coverage to their full-time employees.   Failure to do so may subject these employers to a shared responsibility payment, or an “assessable payment,” pursuant to Internal Revenue Code §4980H.

An “applicable large employer” is defined as “an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year.” A full-time employee with respect to a given month is defined as “an employee who is employed on average at least 30 hours of service per week.”

While these definitions may appear to be straightforward, the recent Notice issued by the Internal Revenue Service, together with the Department of Labor and the Department of Health and Human Services, indicates that the analysis is not so simple.

Notice 2011-36 was issued on May 2, 2011, seeking comments and providing suggested rules for interpreting and applying the meaning of “full-time employees” for purposes of IRC §4980H.

Notably, the Notice provides rules for determining whether an employer has “50 full-time employees,” which includes full-time equivalents. This means that, on a monthly basis, an employer must take the following steps to determine whether 50 full-time employees are employed:

1)                  Determine the number “full-time” employees. 
This group includes seasonal employees and all employees of a controlled group, an affiliated group, and a predecessor employer. This group does not include leased employees.

2)                  Determine the “full-time equivalents.”
This number is determined by aggregating the number of hours of service for all employees determined not to have a full-time status for the month, and then dividing these hours by 120.

At the end of a calendar year, the employer must add together the 12 monthly calculations, and divide the sum by 12 to get the average monthly full-time employees for the prior year. If the final number is 50 or more, the employer is an “applicable large employer.” 

For example, if a business employs 40 full-time employees with 40 hours of service per week and 20 part-time employees with an average of 20 hours of service per week, the employer will still be considered an “applicable large employer.”   This is because each month, the employer will have to add approximately 13.3 “full-time equivalents” (approximately 80 hours worked per month by each part-time employee, multiplied by 20 part-time employees, divided by 120) to the 40 full-time employees, bringing the total “full-time employees” for purposes of health coverage obligations to 53.3. As this example demonstrates, an employer that relies on part-time employees may still be subject to the shared responsibility provisions of the PPACA.

The Notice provides for an exception in the case of seasonal workers. This seasonal employees exception applies where an employer’s workforce exceeds 50 full-time employees for 120 days or less during a calendar year and the employees in excess of 50 were employed during those days as seasonal employees. In this case, the employer is not considered an “applicable large employer.”

Employers “not in existence during an entire preceding calendar year,” are not exempt from assessment payment liability pursuant to the Notice, and will be considered an applicable large employer if the employer reasonably expects to employ an average of at least 50 full-time employees on business days during the current calendar year.

The Notice also indicates the intent of the IRS, DOL, and HHS to allow employers to measure 130 hours of service per month to determine full-time status, rather than 30 hours of service per week. Further, the Notice includes a safe harbor for determining an employee’s full time status for future months based on the employee’s status as a full-time employee in prior months, which is intended to make administration of this rule for full-time employees easier.

In short, the proposed guidance set forth in Notice 2011-36 expands upon the inclusive definition of “full-time employees” set forth by the PPACA and reinforces the continuous burden imposed on employers to evaluate the “full-time” status of each of their employees.

©2011 Greenberg Traurig, LLP. All rights reserved.

Chief Judge Imposes Privilege Waiver Sanctions Against Defendant for Repeated Discovery Misconduct in DL v. District of Columbia

Recently posted at the National Law Review byMorgan, Lewis & Bockius LLP  an  overview / warning about discovery violations:  

Chief Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia sent a clear message to litigants last week: repeated discovery violations will not be tolerated and may subject the violator to harsh sanctions, including waiver of privilege. In his May 9 ruling in DL v. District of Columbia,[1]Judge Lamberth denied defendant District of Columbia’s (District’s) request for reconsideration of his April 7, 2011 order, which imposed privilege waiver sanctions with regard to all of the District’s as-yet unproduced email and ordered the District to produce all such email within one week after the close of trial.

The plaintiffs in this Individuals with Disabilities and Education Act (IDEA) case had been waiting almost six years for trial. Beginning on the first day of trial (April 6, 2011), however, the central issue in the case quickly became the District’s failure to timely meet its discovery obligations when the plaintiffs’ counsel informed the court that “document production from the District was still flooding into his office,” including the production of “thousands of e-mails just days before trial.” Indeed, the District intended to “continue to produce thousands of e-mails on a ‘rolling’ basis even after the trial concluded.” As the unproduced e-mails were from more than two years prior, no basis existed for such a lengthy delay in production, especially in a case in which discovery had been closed for more than two years. The court found the District’s explanation for its untimely rolling productions of email (which the District described as the result of a “supplemental search” that had been “ongoing for months”) completely unacceptable. The court especially noted the District’s failure to bring its delayed production to the court’s attention at either the pretrial conference or at any number of pretrial proceedings.

Among the District’s numerous discovery violations, the court highlighted the following:

  • Failure to timely produce relevant documents
  • Violation of multiple discovery orders
  • Failure to timely provide a privilege log
  • Failure to inform the court of any delays in production in order to request appropriate extensions

The court may have been more lenient had the District not requested and been granted an extension of its discovery deadlines from June 27, 2008 until October 14, 2008. The District, despite being recently sanctioned for discovery violations, failed to comply with several discovery milestones ordered by the court, including the submission of a privilege log. In addition, the District’s certification that it had completed its production was not only late, but also inaccurate since the District clearly had not yet completed its production. Furthermore, on September 22, 2010, the district court ordered both parties to supplement their discovery responses and document productions up until the date of the trial, an order that the was also violated by the District.

In its ruling, the court emphasized the District’s failure to (a) alert the court to the delayed production of email and (b) seek an appropriate extension.

“If at any point the District realized that it was behind, or for any other reason could not comply with this Court’s Orders, it should have informed the Court of the problem. . . . It could have said something at any of the multiple status conferences held in this case or at the pretrial conference. Instead, the District failed to produce documents for over two years, violated multiple Court Orders in the process, and instead of informing the Court of the situation at any point along the way, it simply sprung the news on the first day of trial.”

Further, the court stated that, absent entering a default judgment in the case, the order granting privilege waiver sanctions and compelling production of all remaining e-mail within one week of trial was the only realistic alternative.Otherwise, the parties would face extremely burdensome delays and increased litigation time and costs, which would also affect the court’s already overloaded trial docket. The court stated state that the District “should not be surprised that its misconduct has caught up with it.”

This case underscores the importance to companies involved in litigation of diligently complying with all discovery deadlines and promptly bringing to the court’s attention any delays in compliance. Failure to do so may result in severe sanctions, including privilege waivers.

[1]. Case No. 1:05-cv-01437-RCL (D.D.C. May 9, 2011). Plaintiffs in this class action suit sued their local school district, the District of Columbia, over the District’s failure to provide them with a free appropriate public education, as required by law.

Copyright © 2011 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

NLRB A 'Twitter Over Employers' Social Media Policies

Recently posed at the National Law Review by Laura M. Lawless Robertson of Greenberg Traurig, LLP – updates of the National Labor Relation Board’s (NLRB’s) recent recent scrutiny of  employer’s social media policies for compliance with the National Labor Relations Act (NLRA):  

The National Labor Relations Board’s (NLRB) recent scrutiny of social media policies for compliance with the National Labor Relations Act (NLRA) has alarmed many employers – including non-union employers. Two recent developments in this area add fuel to an already heated debate over employer actions based on employees’ use of social media.

The first case is Lee Enterprises, Inc. d/b/a Arizona Daily Star. The Daily Star newspaper did not have a social media policy, but urged its reporters to use social media, including Twitter, to disseminate information to the public. After deciding that its crime/public safety reporter had gone too far with his unprofessional, sexually inappropriate, and pro-violence tweets, including one in which he called the reporters on a local television station “stupid,” the newspaper’s managing editor admonished him to refrain from engaging in any further social media postings. The reporter was later terminated, after which he filed a charge with the NLRB, contending that his termination violated the NLRA.

The NLRB General Counsel’s Office acknowledged that, “in warning the Charging Party to cease his inappropriate tweets, and then discharging him for continuing to post inappropriate tweets, the Employer made statements that could be interpreted to prohibit activities protected by Section 7 [of the NLRA],” but nevertheless concluded that the newspaper terminated him for violating workplace policies and disregarding its repeated warnings to cease his unprofessional tweets. The General Counsel’s Office concluded that “it would not effectuate the purposes and policies of the [NLRA] to issue a complaint where the statements were directed to a single employee who was lawfully discharged,” and recommended dismissal of the charge.

If employers presumed, based on the Arizona Daily Star outcome, that the NLRB had backed down from its aggressive stance regarding employers’ social media policies, they would be mistaken. On May 9, 2011, the NLRB issued a complaint alleging that Hispanics United of Buffalo, a nonprofit social service agency, unlawfully discharged five employees who complained about their working conditions on their Facebook accounts. After one employee questioned how hard the staff worked to help the agency’s clients, several employees chimed in on her Facebook status, defending their job performance and blaming workload and staffing issues for any unmet client needs. After learning about the posts, Hispanics United fired all of the employees who participated in the flame war. The NLRB issued a complaint, alleging that the Facebook dialogue was protected concerted activity under the NLRA – a discussion among coworkers about the terms and conditions of their employment and undertaken for mutual aid and protection. The case is set for a hearing before an administrative law judge on June 22, 2011, absent settlement (which seems to be the trend in these sort of cases).

These two cases illustrate that employers may discipline employees for social media misconduct, such as disclosing confidential and proprietary information, engaging in “textual harassment,” or libeling competitors, but must scrupulously avoid instituting or enforcing social media policies that impinge on employees’ rights to discuss the terms and conditions of their employment, e.g., wages and working conditions. One thing is for certain…we haven’t heard the last of this topic from the NLRB.

©2011 Greenberg Traurig, LLP. All rights reserved.

Just JDs — Business Development Strategies for Lawyers – June 8th Chicago, IL

Looking for new ideas on how to grow your client base?  Trying to determine if social media is a time waister or a great way to reach new audiences or stay in touch with current business contacts? Looking for CLE Credits before the June 30th Illinois Deadline?  The National Law Review  would like to bring your attention to a unique opportunity designed for attorneys by the legal marketing authorities (LMA).  

Just JDs — Business Development Strategies for Lawyers is a one-day program is designed exclusively for lawyers at firms of all sizes who want to build their personal books of business or have responsibility for practice or firm business development efforts including marketing partners, marketing committee members and administrators.

LMA members: Refer attorneys from your firm and they can register at the member rate, a savings of $100.

Click Here For More Details & to Register Online Today
$395 for LMA members
$495 for nonmembers

Illinois Civil Union Law Requires Employer Action

Posted yesterday at the National Law Review by Thomas G. Hancuch and Jessica L. Winski of Vedder Price P.C. a great overview of the implications for employers in Illinois of the law recognizing civil unions which will be in effect June 1st:

The recently enacted Illinois law recognizing civil unions has implications for all Illinois employers.  The law becomes effective June 1, 2011.  Before that date, employers should review and update their policies and employee benefit programs that may be affected by the law.  This is true for both employers that provide domestic partner benefits and those that do not.

The Illinois Religious Freedom Protection and Civil Union Act ( the “Civil Union Act”) allows same-sex and opposite-sex couples to enter into a new form of legal relationship called a “civil union.”  Under the Act, persons entering into a civil union are entitled to the same legal protections, benefits, obligations and responsibilities as spouses under Illinois law.  The law provides a process for establishing a civil union and for dissolving one.

The Civil Union Act also contains a reciprocity provision under which Illinois will recognize as a civil union any same-sex marriage, civil union or other substantially similar legal relationship (other than a common law marriage) that was legally entered into in another jurisdiction.  Currently, five states (Connecticut, Iowa, Massachusetts, New Hampshire and Vermont) and the District of Columbia, as well as a number of foreign countries (including Canada) permit same-sex couples to marry.  Other states (including Oregon, Nevada, New Jersey and Washington) have laws similar to the new Illinois Civil Union Act recognizing civil unions or domestic partnerships.  Still other states (including Colorado, Maine, Maryland and Wisconsin) accord more limited legal recognition to such relationships.

Complicating matters, the federal Defense of Marriage Act provides that, for purposes of federal law,  “the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”  So, while civil union partners generally are to be treated the same as spouses under Illinois law once the Civil Union Act becomes effective later this year, it appears that they will not have the same rights or status as spouses under federal law.

Of course, employers operating in Illinois are subject to both Illinois and federal law.  Certain programs maintained by private-sector employers, such as bereavement leave, are governed exclusively by state law; others, such as retirement plans and flexible spending accounts, exclusively by federal law; and still others, such as insured health benefits plans (but not self-insured plans), by both federal and state law.  Unfortunately, this creates significant complexity for employers.

Illinois employers that currently offer domestic partner benefits should review their domestic partner benefit program in light of the Civil Union Act.  For example, the definition of “domestic partner” in the domestic partner benefits policy and the applicable benefit program documents and leave of absence and other policies may need to be revised to specifically encompass civil union partners.  In addition, consideration should be given to whether an affidavit attesting to the existence of a domestic partnership will continue to be regarded as sufficient, or if Illinois employees should be required to formalize the relationship as a civil union in order to receive domestic partner benefits.

Illinois employers that do not offer domestic partner benefits will need to review their benefit plans and leave of absence and other human resources policies that involve spouses of employees to determine the impact of the Civil Union Act.  For example, an employer with medical or dental insurance funded through a group insurance policy issued in Illinois will find that civil union partners will be eligible for coverage on the same terms as spouses beginning June 1, 2011, even though the employer may not want to provide such benefits.

© 2011 Vedder Price P.C.

Wage and Hour Headaches for Employers: The Department of Labor Has an App for That

Posted this week at the National Law Review  by Mitchell W. Quick, Brian P. Paul and Steven A. Nigh of Michael Best & Friedrich LLP – details for employers about the Department of Labor’s (DOL) new App to track wages and work hours….

The U.S. Department of Labor Wage & Hour Division (“WHD”) recently released a free application (“app”) for iPhone and iPod Touch that allows employees to track their wages and work hours. The “Timesheet” app allows employees to enter their hourly rate and hours worked for multiple employers. The app also lets employees record time spent on meal breaks and “other” breaks. Time can be recorded manually or by using the app’s embedded stopwatch. Timesheet calculates employee pay, including overtime, and lets employees export Timesheet data via e-mail in Microsoft Excel format. While the current version calculates pay based on an hourly rate, WHD is exploring the possibility of adding functions for commission pay, shift differentials and other methods of compensation in future versions, along with Android- and Blackberry-compatibility. The app currently is available in both English and Spanish.

Timesheet presents a number of challenges to employers. WHD perceives the app as an enforcement aid that contains potentially “invaluable” information about alleged hours worked. Timesheet also encourages employees to file claims by giving them contact information for both local and national wage and hour agencies.  Furthermore, employee complaints about pay for alleged “off-the-clock” work—such as voluntarily checking work e-mails when at home—may increase as such time can be easily recorded. Employees might also record any work issues raised during break time, raising the specter of employers having to treat that time as compensable “hours worked.” Finally, employees improperly classified as exempt and for whom the employer kept no time records would now have “documentation” to support their damage claims.

Fortunately, employers can take steps to protect themselves:

  • Keep accurate records. This obvious best practice has only become more important now that some employees may keep records of their own.
  • Require non-exempt employees to sign off on company time sheets. This will help ensure both sides agree on the number of hours worked, and can help wage and hour disagreements surface—and get resolved—sooner rather than later.
  • Audit exempt employees to make sure they are exempt. This is particularly true for employees for whom the company has limited time records
  • Update employee handbooks. Make sure employees know that they cannot falsify any company records, including time records. Also consider establishing a complaint process for employees to use when they are told not to report work time.
  • Do not retaliate against employees who keep their own time records. Retaliation claims are on the rise, and Timesheet is another possible pitfall for employers.

“Timesheet” should serve as a reminder of the importance of maintaining complete, accurate wage and hour records.

© MICHAEL BEST & FRIEDRICH LLP

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