Archive for December, 2011« Older Entries
Christopher R. Debski is an Associate with Roetzel & Andress, LPA which maintains 13 offices in Ohio, Florida, Illinois, New York and Washington, D.C. Mr. Debski focuses his practice in the area of workers’ compensation, and represents clients in the fields of construction, government, health care, manufacturing and retail.
Mr. Debski earned his B.A. from the University of Michigan and his J.D. from The University of Akron, School of Law.
An OSBA-certified Workers’ Compensation Specialist, Mr. Debski presented a “Workers’ Compensation Subrogation” program in September 2010. He is a member of the Akron Bar Association, Cleveland Metropolitan Bar Association, Ohio State Bar Association and the Self Insured Group of Ohio. Mr. Debski is admitted to practice law in the State of Ohio and U.S. District Court, Northern District of Ohio.
Contact Christopher R. Debski
Superior Court of Pennsylvania Holds That Dual Persona Doctrine Did Not Constitute a Valid Exception to Exclusivity Provision of Workers’ Compensation Act
Expert Article by Kevin Cooper
In Soto v Nabisco, Inc., et al., 2011 WL 5831369 (Pa.Super.), 2011 PA Super 249, released on November 21, 2011, the Superior Court of Pennsylvania upheld the decision of the Court of Common Pleas, Philadelphia County which dismissed Roque Soto’s third-party liability claim based upon the employer statutory immunity under the Pennsylvania Workers’ Compensation Act (WCA).
Mr. Soto began his employment with Nabisco at its Philadelphia Bakery sometime around 1999-2000. In July 2001, Nabisco merged into Kraft and ceased to exist as a separate company. Due to the merger, Soto became an employee of Kraft. On November 1, 2007, Soto injured his arm and hands while operating a Ritz Cracker Cutting Machine designed and built by Nabisco, but used exclusively by Kraft employees since the merger. There was no dispute between the parties that the accident occurred within the course and scope of Soto’s employment and caused amputation of his left arm and a de-gloving wound and avulsion injuries to his right hand.
After his injury, Soto filed a third-party tort claim against Kraft and various other entities claiming that under the “dual persona” doctrine, Pennsylvania’s WCA allows third-party tort recovery – although the employer is the ultimate payor – if the employer has a distinct and separate role that could subject it to liability for injuries to an employee. Soto defined Kraft’s “dual persona” nature as (1) his employer and (2) the successor in interest to Nabisco, the manufacturer of the defective machine that caused his injuries at work. Soto also maintained that Kraft’s position as successor in interest to Nabisco exposed Kraft to third-party liability in this context.
In its analysis of the case, the Superior Court noted that the only thing that changed in Soto’s employment situation was that his paycheck now came from Kraft instead of Nabisco. He continued to work in the same capacity at the same location. The Court found that the Ritz Cracker Cutting Machine was equipment Nabisco had manufactured specially for cutting Ritz crackers, it was used solely by Nabisco employees, and later used solely by Kraft employees; it was not available to the public at large. At no time was the special equipment sold to an outside company or put in the stream of commerce; it was merely transferred from Nabisco to Kraft by virtue of the merger.
Ultimately, in affirming the decision of the Court of Common Pleas, the Superior Court held as follows:
Were Pennsylvania courts to accept the “dual persona” doctrine as a valid exception to the exclusivity of the WCA, the doctrine would not apply in this case for the following reasons. If [Soto] had been injured while working for Nabisco, workers compensation would be his sole remedy; any third-party claim against Nabisco as the manufacturer of the equipment would fail. To allow [Soto] to sue Kraft, solely as the successor in interest to Nabisco, for third-party damages effectively enlarges [Soto’s] remedies as a result of the merger, in contravention of the “dual persona” doctrine, which was designed to preserve but not expand liability. If Nabisco as the employer would have no third-party liability beyond workers compensation, then Kraft as the successor employer should have no third-party liability under the circumstances of this case. Declining to apply the “dual persona” doctrine as an exception to the exclusivity of Pennsylvania’s WCA in the present context, we ensure the preservation but prevent the expansion of liabilities or remedies.
The Superior Court’s holding that the dual persona doctrine is inapplicable in cases where the plaintiff would not have been able to bring suit against the predecessor company even if a merger had never occurred is in accord with decisions by courts from Florida, Massachusetts, Michigan, and Washington, all of which are cited in the Court’s decision.
Roetzel & Andress will continue to provide further information and guidance to assist you as developments arise in this matter. If you should have any questions, please contact any of our offices to discuss this matter further with one of our workers’ compensation attorneys.
Expert Article by Emily Ciecka Wilcheck
The United States District Court for the Western District of New York inEEOC v. Sterling Jewelers Inc., W.D.N.Y., No. 1:11-mc-00028, 2011 WL 5282622, recently enforced a subpoena issued by the Equal Employment Opportunity Commission (EEOC) to Sterling Jewelers Inc. (doing business as Jared the Galleria of Jewelry) requesting information on the company’s policies barring employees from discussing their pay, as well as information on employees disciplined under such policies.
Diane Thielker, a former employee of Sterling, filed a charge of discrimination with the EEOC alleging that she was discriminated against in pay and promotions because of her age and gender. The EEOC sued Sterling on behalf of Ms. Thielker, alleging that Sterling engaged in unfair employment practices nationwide by maintaining a system for making promotions and compensation decisions that is excessively subjective and has a disparate impact on female sales employees.
As part of the investigation into her charge, Ms. Thielker provided the EEOC with a copy of a counseling report issued to her by Sterling. This counseling report stated in part as follows:
Any discussion regarding payroll need only to be made between said employee and mgr. Having inappropriate discussions only contribute to and fosters ill will amongst team members as well as being a direct violation of Sterlings [sic] code of conduct.
The report also included Ms. Thielker’s comments that she believed that she was being discriminated against based upon her gender due to the fact that the company paid male employees more than it paid female employees.
A few months after receiving a copy of the report, the EEOC served a subpoena upon Sterling requesting information on (1) the code of conduct referred to in the counseling report and any other policies prohibiting employees from discussing pay; (2) all disciplinary notices, reports, or warnings reflecting enforcement of Sterling’s policy prohibiting discussions of pay; and (3) information related to the individuals disciplined under such policy.
In upholding the EEOC’s right to enforcement of the subpoena, the court held that the nationwide scope of the information requested was relevant to the EEOC’s pattern or practice claims against Sterling, and legitimately arose from statements on the counseling report indicating that Sterling had a company-wide policy prohibiting discussions about pay. Significantly, the court further concluded that, even without the counseling report referencing such a policy, information regarding Sterling’s nationwide policies prohibiting discussions of pay is relevant to Thielker’s individual charge.
Emily Ciecka Wilcheck is an Associate with Roetzel & Andress, LPA which maintains 13 offices in Ohio, Florida, Illinois, New York and Washington, D.C. Ms. Wilcheck focuses her practice on employment litigation and general corporate litigation with a special emphasis on wrongful termination claims, restrictive covenants, trade secret violations and unfair competition/tortious interference matters. She has presented on various topics such as sexual harassment policies and enforcement, documenting the disciplinary process, terminations and hiring practices.
Ms. Wilcheck earned her B.B.A. magna cum laude from The University of Toledo, where she also earned her M.B.A. She received her J.D. cum laude from The University of Toledo, College of Law.
She is a member of the Ohio State Bar Association, the Toledo Women’s Bar Association and the Ohio Women’s Bar Association, where she served on the Supreme Court Judicial Ratings Committee (2010-2011). Ms. Wilcheck is admitted to practice law in the state of Ohio, U.S. Court of Appeals, Sixth Circuit and U.S. District Court, Northern District of Ohio.
Contact Emily Ciecka Wilcheck
An Initial Review of the Consumer Financial Protection Bureau’s First Supervision and Examination Manual
Expert Article by Richik Sarkar
On October 14, 2011, the Consumer Financial Protection Bureau (“CFPB”) issued its Supervision and Examination Manual – Version 1.0 (“the Manual”). It provides the first insight into the procedures the CFPB will use in examining the depository institutions and non-depository consumer financial services companies under its jurisdiction. The complete Manual can be found at http://www.consumerfinance.gov/guidance/supervision/manual/.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is responsible for enforcing “federal consumer financial law.” To that end, the Manual builds upon examination procedures for certain consumer financial laws, including, the Home Mortgage Disclosure Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. The Manual also details CFPB’s examination procedures for detecting unfair, deceptive, or abusive acts or practices and for assessing whether mortgage servicing complies with all applicable consumer laws.
The Manual is structured in three parts. Part I describes the supervision and examination process. Part II details the examination procedures. Part III consists of templates that the CFPB will use in examining the entities under its jurisdiction. Part II, the “Examination Procedures,” is a helpful guide for entities that are supervised by the CFPB, as it provides a “road map” of the factors upon which the CFPB will focus in compliance examinations.
Prior to examining large depository institutions and their affiliates, the CFPB will prepare a Risk Assessment that will be the foundation for an institution’s (and its affiliates’) custom Supervision Plan. A sample Risk Assessment is provided in Part III of the Manual. As explained in the Manual:
CFPB’s Risk Assessment is designed to evaluate on a consistent basis the extent of risk to consumers arising from the activities of a supervised entity or particular lines of business within it and to identify the sources of that risk. “Risk to consumers” for the purpose of the CFPB Risk Assessment is the potential for consumers to suffer economic loss or other legally-cognizable injury (e.g., invasion of privacy) from a violation of Federal consumer financial law. The risk assessment includes factors related particularly to the potential for unfair, deceptive or abusive practices, or discrimination. Two sets of factors interact to result in a finding that the overall risk in a business or entity is low, moderate, or high. The first set of factors relate to the inherent risk in the particular line of business or the entity overall. The second set of factors is the quality of controls that manage and mitigate that risk. The Risk Assessment also includes a judgment, based on current or recent information, about the expected change in the overall risk: decreasing, increasing, or unchanged.
Utilizing the Risk Assessment, the CFPB will prepare a unique Examination Scope Summary that will dictate how the CFPB will review an institution’s compliance with consumer financial laws.
The Manual includes many consumer financial law-specific sections that, among other things, provide background about the law, compliance guidelines, and specific examination procedures. For example, the Fair Credit Reporting Act section provides information related to obtaining consumer reports, sharing information among affiliates, disclosing information, etc. In addition, some sections include CFPB examination checklists; providing a useful guide for internal review of regulatory compliance.
The Manual makes explicit the CFPB’s expectation that every regulated entity will have an effective compliance management system adapted to its business strategy and operations. The CFPB will review and test the effectiveness of such compliance management systems, focusing on: (i) board and management oversight; (ii) the compliance program; (iii) responses to consumer complaints; and (iv) compliance audits. And the CFPB will review each of those elements to assess the overall quality of an entity’s compliance management system.
The CFPB requests comments on the Manual, so institutions should consider reviewing the examination procedures and providing comments to improve the Manual.
Used in conjunction with the advice of legal counsel, the Manual will be a useful resource for developing CFPB compliant policies and procedures and will better prepare entities under the CFPB’s jurisdiction for future examinations.
Expert Article by Deborah McMurray
In Part 1 of “The secret to becoming a rainmaker,” I shared the one thing that I think makes the greatest difference in lawyers who are effective business developers. Here is an excerpt of that post:
This post isn’t about telling you how to sell. It’s about me finally articulating the one attribute that stands out among all others – the one attribute that enables lawyers, regardless of practice area, industry strength, personality type, communication style, law firm or law school credentials, to consistently and effectively develop client relationships that pay off.
Here it is: Stop thinking about yourself.
The “Secret to Becoming a Rainmaker – Part 1″ was that easy. Now here is Part 2.
Remember the old product/service project triangle: “good – fast – cheap: pick any two” -? In another back-of-the-napkin, Pinot Noir-fueled discussion last Thursday with client and friend,Mark Shank, we discussed a “Triangle of Success” for lawyers (all professionals, really – anyone who sells their brain power and experience – including marketers and business development folks). The traditional “pick any two” doesn’t work for professionals who want to fast-forward their careers.
The “Triangle of Success” principle is nearly as simple as “Stop thinking about yourself.” For the highest level of success in the formative years of your career, professionals must equally embrace each side of the triangle. The three legs of the triangle are:
- Relationship development
- Reputation management
- Service delivery
What we see here is an equilateral Triangle of Success. When one’s career takes off, it’s natural to adjust the focus of the triangle – perhaps, as we learned in 10th grade geometry class, to an isosceles triangle, where you invest more heavily in two sides that are of equal length, with a third side that is shorter. Another option is where all three sides are of unequal length, as illustrated in a scalene triangle. But – for your success trajectory to continue throughout your career, you must invest something in all three areas.
Professionals who are especially technically proficient in their subject matter dismiss relationship development as too “touchy-feely.” They often don’t respect those whose greatest proficiency is establishing rapport and trust among prospects and clients. This group struggles to recognize that without clients, no law firm would exist.
Certain lawyers build their reputations through credentialing activities, such as speaking, publishing, blogging or tweeting. They are known for being experts in an area, but they are sometimes not regarded for their exceptional service delivery. Other practicing professionals may regard this group as “self-promoters,” spending too much time on credentialing and not enough on clocking billable hours.
And the final triangle-leg is made up of those who are strong legal practitioners, who are the happiest when they are closed in their offices tackling a client’s issue. This group often relies on others to bring in the work – and they would feel challenged by having to give a speech or develop lasting, meaningful relationships with people who could be clients.
The need for balance is obvious, but too many professionals are – (I’m going to say it) – slackers in the areas that sit just outside their comfort zone. Investing in the Triangle of Success takes commitment early in your career, similar to the discipline we have when it comes to exercise or eating right. Don’t just invest in the areas that are easy for you – equally invest in all three.
When you’ve attained a level of success, you can adjust your investment so that it is tailored to what you enjoy most.
Strengthening Your Compliance Program in China through Employment Building Blocks – From Onboarding to Termination
Expert Article by Ananda Martin & Lesli Ligorner
For multinational corporations operating in the People’s Republic of China (“PRC”), employment considerations play a key role in the design of a robust anti-corruption compliance program. From onboarding to termination, having the right contractual protections and corporate policies in place can greatly reduce the risk of corruption-related issues and increase the ability to investigate and discipline employees who run afoul of the company’s code of conduct.
Getting it Right at the Beginning: Considerations for Onboarding
Because China does not recognize at-will employment arrangements, disciplining and terminating employees can be especially challenging. It is therefore crucial that PRC-based employers build contractual provisions into employment agreements that give them maximum flexibility in the event that an employee becomes involved in a corruption-related matter. From a contractual perspective, this means setting forth clear grounds for termination for violations of anti-corruption law under both PRC and international law. It also means providing Chinese language versions of all key employment documents, including the employment agreement, the employee handbook and the code of conduct or other documents outlining the company’s anticorruption policies. From a policy standpoint, the “tone at the top” – and in the middle – must send a clear message that bribery is inconsistent with company culture and must be supported by protocols and written materials such as an employee handbook that sets clear guidelines with respect to high risk expenditures such as gifts, travel and entertainment. Intake procedures for new employees should ensure that employees have a working knowledge of company policies and know whom to turn to with questions or concerns.
Getting it Right in the Middle: Monitoring and Internal Investigations
Some companies stop there, but a truly robust compliance program includes ongoing training, monitoring and strategic “stress testing” of sensitive areas such as relationships with third parties and government officials. Accounting, legal and human resources departments should work together to formulate coordinated approaches to perennial China challenges such as business expense reimbursements and handling of official invoices or fapiao.
In the event that an internal investigation becomes necessary, companies must be careful to comply with PRC rules governing employee data privacy. Best practices include building prospective language into employment agreements that permit an employer to search, copy and transmit employee communications on company computers and other electronic devices. Employers should also consider providing employees with company-issued cell phones and personal digital assistants to ensure that they can access all relevant data on those devices.
Getting it Right at the End: Considerations for Termination
As previously mentioned, China lacks the concept of at-will employment and imposes a number of obligations and restrictions on the employment relationship. Chief among these is the requirement that, in the event of an employment dispute, both parties submit to mandatory arbitration whose outcome, in practice, is heavily weighted in favor of employees. Many employers seek to avoid this process through a negotiated settlement. If allegations of bribery are driving the termination, management should consider the potential for misuse (or the appearance of misuse) of severance payments.
If arbitration is unavoidable, many employers will want to keep the content of such proceedings confidential. A pre-negotiated confidentiality agreement or similar language in the employment agreement is much easier to secure at the beginning of the employment relationship than at the end. Employers should be prepared for retaliation from employees slated for termination and have in place solid whistleblower protocols to investigate any allegations that arise from disgruntled workers.
Through proactive planning at the intersection of employment and anti-corruption law, PRC- based multinationals can bolster their compliance program and mitigate some of the risks attendant to doing business in this challenging environment.
For more information about the topics discussed in this [Client Alert], please listen to K. Lesli Ligorner’s talk on “Strengthening Your China Compliance Program through Employment Building Blocks: From Onboarding to Termination,” presented on September 9, 2011 as part of the American Bar Association International Anticorruption Committee’s programming.