Uncertainty Regarding the Department of Labor’s Salary and Overtime Regulations

A federal district court in Texas has delayed the enforcement of the Department of Labor’s changes in overtime regulations.

In May 2016, the Department of Labor published a final rule that has caused a fury of scrambling amongst employers, in both the public and private sectors, to review their employee’s salary levels and exempt statuses. This final rule relates back to the Fair Labor Standards Act (“FLSA” or the “Act”), enacted in 1938, which set minimum wages and provided for overtime pay for hours worked above 40 in a week. Section 213(a)(1) of the Act, however, exempted overtime provisions for any employee employed in a bona fide executive, administrative, or professional capacity. This is known today as the “EAP” or “white collar” exemption. The Act also gave the Department of Labor regulatory authority to “define and delimit” those exemptions.

The current regulations concerning the white collar exempt status, promulgated in 2004, required an employee to meet three criteria. First, an employee must be paid on a salary basis (the “salary-basis test”). Second, an employee must be paid at least the minimum salary level established by the regulations (the “salary-level test”). And third, an employee must perform executive, administrative, or professional duties (the “duties test”). See “It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016” for more information on the current regulations.

The final rule, previously scheduled to be enforced December 1, 2016, revamped the white-collar exemption by increasing the salary-level test from $23,660 to $47,476. Any employee earning less than the new amount, but still paid on a salary basis and meeting the duties test, would be entitled to overtime pay at one and one-half times the employee’s regular rate of pay for all hours worked above 40 in a week.

Employers had a few options to become compliment with the final rule and avoid paying overtime, most popular were: Continue reading »

New Requirements for Health Care Providers Under Missouri’s Health Care Cost and Transparency Act

On May 25, 2016, Missouri Senate Bill 608 was passed by the Missouri House and Senate.  The Bill adds new requirements to the provision known as the “Health Care Cost and Transparency Act.” Beginning July 1, 2017, the new law requires all licensed health care providers, facilities, and imaging centers to provide an estimate on the cost of a particular health care service or procedure within three business days of a written request from the patient, along with a medical treatment plan from the patient’s health care provider. The estimate must only include those services within the direct control of the health care provider and the amount that will be charged to a patient if all of the charges are paid in full by the patient, without a public or private third-party paying for any portion of the charge. Further, these provisions do not apply to charges for hospital emergency departments.

If health care providers provide publicly available links to the estimated costs or post such costs on a publicly available website, they are not required to provide cost estimates to patients upon written request.

Beginning also July 1, 2017, hospitals will be required to make publicly available the amount that would be charged, without discounts, for each of the 100 most prevalent diagnosis-related groups, as defined by Medicare. Continue reading »

Hurry Up! We Have a Plane to Catch! The Effects of Time Pressure on Negotiation and Mediation

Not surprisingly, there is both anecdotal and empirical evidence that time constraints affect behavior generally.  It is also, therefore, not surprising that high time pressure (hereinafter “HTP”) probably affects both parties and mediators in mediation.

I recently ran across this question, and found particularly interesting (though not recent) articles by social science researchers which could assist both parties and mediators in their participation in mediation sessions.

In “Time Pressure in Negotiation and Mediation,” a 1993 article, Professors Peter Carnevale, Kathleen O’Connor and Christopher McCusker, then professors in the Department of Psychology, University of Illinois (“Carnevale, et al.”), reviewed the scientific research to that date on HTP in negotiation generally, and mediation in particular, to identify common themes, interesting questions, possible outcomes of differing HTPs and resulting behaviors.  It is only possible here to review possible conclusions of (not the methods of) the research and suggest actions to be taken accordingly by mediation participants to benefit their outcomes.  [This article was one of 18 chapters in a larger volume entitled “Time Pressure and Stress in Human Judgment and Decision Making” (Plenum Press 1993). The article, as did the other chapters, discussed the effect of HTP in negotiation generally; it then discussed the effects of such pressure on mediation in particular.]

The authors initially noted that the three strategies primarily used in mediation are: Continue reading »

HIPAA Non-Compliance Results in Largest Single-Entity Settlement to Date

On August 4, 2016, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) entered into a settlement agreement with Advocate Health Care Center (Advocate) in which Advocate agreed to pay $5.5 million to settle multiple violations of the Health Insurance Portability and Accountability Act (HIPAA).  This is the largest HIPAA settlement against a single entity to date, and according to OCR, is due to the severity of the violations and the length of time that those violations continued.

According to OCR’s press release, OCR began its investigation of Advocate in 2013, after Advocate submitted three breach notification reports relating to three separate instances of breach of unsecured electronic protected health information (ePHI).  The combined breaches resulted in unsecured access to over four million patients’ information. Continue reading »

Your Restaurant is Failing – Now What?

Restaurants fail for a variety of reasons, from failure to watch costs to failure to develop the right menu to a nearby construction project eliminating most of your on-street parking.  If you followed the tips in my previous article, you should have some money to rely on going forward.

If your financial problems are operational or managerial, one of the things you can do at this late stage is to hire a consultant to help you tweak your menu, streamline your operations, or take any of a number of additional steps to bring you back to profitability.  This is the time to be humble, rather than arrogant – ask for help!  You should also consult with a bankruptcy lawyer at this point.  That does not mean you are necessarily going to file bankruptcy, but an attorney knowledgeable in this area can tell you what to expect if different scenarios unfold. Unanswered ‘end-game’ questions will add to your stress and divert you from your primary mission of saving your restaurant. You can learn a lot of useful information for not a lot of money, and gain some peace of mind as well.

A bankruptcy attorney also can help with your current problems. For instance, the attorney can negotiate with the landlord, either to reduce the rent or give back some space.  He can negotiate with your lender and your suppliers to negotiate better terms, or a temporary break in your monthly payments. Continue reading »

Opening a Restaurant: Plan for Success – and Failure, Too

Failure is a topic most restaurateurs would prefer to avoid when setting up a new venture, when their heads are full with visions of success. However, the restaurant business is tough, and problems can arise due to circumstances both within and outside of your control.

A great time to protect yourself from potentially devastating problems is now, while you are setting up your business and you can plan calmly.

In this post, I will discuss several of the initial legal steps you can take to prepare for a potential failure.  In my next post, I will turn to the ramifications of failure and what actions you can take at that time.

First, consult an attorney to prepare your initial legal documents.  There are many issues of which you may be unaware, or that you may not know how to resolve. You need to choose an appropriate legal structure and learn about human resource issues. Especially if you have a partner, you will want to deal with buyout issues, succession issues and how to handle deadlocks if multiple owners are unable to reach decisions on major issues.  As they say, an ounce of prevention is worth a pound of cure. Continue reading »

Eighth Circuit Interprets Missouri Law: Non-Compete Agreements May Be Transferred to Subsequent Employer

In Symphony Diagnostic No. 1, Inc. d/b/a/ MobilexUSA v. Greenbaum, the Eighth Circuit Court of Appeals recently addressed the question of whether a successor company in Missouri may enforce a predecessor company’s non-compete agreements in situations where the successor company purchases the predecessor company’s assets. Missouri law already provides that assignment is allowed in situations where there is an acquisition of stock.  Alexander & Alexander, Inc. v. Koelz, 722 S.W. 2d 311, 312 (Mo. Ct. App. 1986).

In MobilexUSA v. Greenbaum, Kimberly Greenbaum and Josephine Tabanag worked for Ozark Mobile Imaging as X-ray technicians.  Both employees signed non-compete agreements.  The non-compete agreement prohibited the employees from “directly or indirectly engaging in the mobile diagnostic business in any manner” for two years after their employment terminated and within a specified 100-mile radius geographical area.

In December 2012, Mobilex acquired Ozark Mobile Imaging through an Asset Purchase Agreement.  Mobilex offered Greenbaum and Tabanag employment, but they both refused.  In January 2013, they each accepted new positions as mobile X-ray technicians at Biotech X-ray, Mobilex’s competitor. Continue reading »

Short-term Rentals Via Internet Outlets: Three Tips for Homeowner & Condominium Association Boards

Community associations continue to struggle with the emergence of the “sharing economy” issues raised by AirBnB, VRBO and other online outlets (see CNN Money article: Why everyone is cracking down on Airbnb).

When addressing these issues, condominium, townhome, and neighborhood association boards should consider the following steps as a proactive approach to maintaining their desired community environment:

1. Be vigilant. The good news is that you are only a few mouse clicks away from finding out whether your owners are making short term or transient leases. Nearly all of these sharing economy services are online and searchable by location. Additionally, urge other residents to keep an eye out for new faces on a regular basis.

2. Know the rules. Does your association prohibit short term leasing or lodging? Is permission required to rent? Do tenants have access to all common areas?  The answers to these questions should all be found in your governing document, the declaration or indenture and possibly in your rules and regulations as well. Know the rules of the game and consider whether they should be updated or amended to address emerging issues.

Continue reading »

Eighth Circuit Rejects Obesity as an Impairment Under the ADA: Morriss v. BNSF Railway Company

The Americans with Disabilities Act Amendments Act of 2008 (ADAAA) was enacted for the purpose of broadening the scope of the American with Disabilities Act (ADA). The ADAAA expanded the definitions of “major life activities” and “substantially limits,” while also increasing protection for those who are “regarded as” having a disability.  Over the years, the ADAAA has been criticized for being too broad.  However, three circuits have now rejected the idea that obesity, without an underlying physiological disorder or condition, is a disability under the ADA.

In Morriss v. BNSF Ry. Co, Case No. 14-3858 (8th Cir. April 5, 2016), the Eighth Circuit Court of Appeals affirmed a Nebraska district court’s decision, ruling that for obesity to constitute an “impairment” under the ADA, one must prove that the obesity is the result of a physiological disorder or condition.

In March 2011, Melvin Morriss, applied for a machinist position with BNSF Railway Company (“BNSF”). Morriss was extended an offer of employment contingent on a satisfactory medical review.  A subsequent physical examination indicated that Morriss was 5’10”, 285 pounds, with a BMI of 40.9. BNSF’s policy was to not hire obese (defined as having a BMI of 40 or higher) applicants for safety sensitive positions. Therefore, Morriss was notified that he would not qualify for the safety sensitive machinist position due to his obesity. Continue reading »

Best Practices for Avoiding Misleading Browsewrap and Clickwrap Agreements in Cyberspace

Visiting a website and merely viewing its contents can bind you to an internet “Terms and Conditions” or “Terms of Use” (“browsewrap” or “clickwrap”) contract.

Website owners, as technology providers, have a dilemma as they wish to facilitate business in the most efficient way. Maintaining the integrity of their software by controlling the scope of the limited software license they are offering is essential to protecting their copyrighted technology.

Given website owners are offering their services to the world, a pressing concern is a disgruntled website user who sues via a class action in the user’s home state. The issue for the courts is how many dispute resolution pre-existing legal rights a website owner can remove through its browsewrap contract, often called “Terms and Conditions,” if the website user receives little to no notice of its existence or has no knowledge that such a notice refers to a binding contract.

If you look carefully at a website you frequently use, you are likely to see various notices in capital letters in highlighted colors referencing that your use of the website is an automatic agreement to the website policies of privacy and terms and conditions. You may not know that this means you are binding yourself to a contract. If you do click on that bothersome notice link, you will most likely notice a nonnegotiable contract that contains a choice of law, agreement to arbitrate, and/or class action waiver. Given the limited attention span of a website user, most users will not click on the link. This is especially true if the website owner has buried the notice at the very end of the page, made it as inconspicuous as possible, and does not require any action to proceed with using the website. Continue reading »