AMM Blog

Welcome to the AMM Law Blog, a tool to help you keep up to date on current legal developments over the broad spectrum of our practice areas.  We welcome your comments and suggestions to create a dynamic forum that will be of interest to readers and participants.

A Power of Attorney: Why Should You Have One

Written by Stephanie M. Shortall Thursday, 02 November 2017 20:11

Whenever you discuss your estate planning with your attorney, you should be sure to discuss the preparation of a Durable Power of Attorney as well.  A Power of Attorney is a document that allows someone to act on your behalf when you are not present.  Although incapacity is typically the reason a Durable Power of Attorney is used, it can also be helpful to have in other circumstances.  If you are unavailable to act on your own behalf because of travel, deployment or temporarily living outside the area, your agent can handle many types of transactions for you.  A Power of Attorney is commonly used in real estate transactions where the Seller has already moved out of the area and needs to appoint someone else to sign documents on their behalf. 

A Durable Power of Attorney does not transfer assets to your agent or attorney-in-fact, but allows that person to act for you in most circumstances.  Without a Durable Power of Attorney, when someone becomes unable to handle their own affairs, the appointment of a guardian will likely become necessary.  A guardianship proceeding is conducted before the court in the County in which you reside and can be an expensive process that would take considerable time to accomplish.  This can lead to bills going unpaid, the inability to handle every day banking transactions and cause a major disruption for you and your family.  A Durable Power of Attorney, in most cases, can eliminate the need for a guardianship proceeding and allow your agent to handle financial transactions, real estate transactions and many other situations on your behalf. 

Together with a Will and Advanced Healthcare Directive, a Durable Power of Attorney is an important part of planning for your future.

By Patricia C. Collins

Reprinted with permission from the October 24th edition of the The Legal Intelligencer © 2017 ALM Media Properties, LLC. All rights reserved.Further duplication without permission is prohibited.


In Zuber v. Boscov’s, United States Court of Appeals for the Third Circuit, No. 16-3217, the Third Circuit reversed a decision of the Eastern District of Pennsylvania that dismissed an employee’s claims under the Family and Medical Leave Act (“FMLA”) and common law on the basis of a compromise and release agreement signed by the employee to settle his workers’ compensation claims. 

The timeline is important to the Court’s determination.  Zuber was injured at work on August 12, 2014.  He filed a workers’ compensation claim and went out on leave, returning to work on August 26, 2014.  His employment was terminated on September 10, 2014.  On April 8, 2015, Zuber signed a Compromise and Release Agreement to settle his workers’ compensation claims.  On July 9, 2015, Zuber filed his FMLA claims against Boscov’s.

Zuber’s Complaint alleged that Boscov’s interfered with his FMLA rights by failing to notify him of his rights and by failing to designate his leave as covered by the FMLA.  He also alleged that Boscov’s retaliated against him for exercising his rights under the FMLA and for asserting a workers’ compensation claim under Pennsylvania common law. 

Boscov’s moved to dismiss the Complaint on the basis of the Compromise and Release Agreement, and the Eastern District of Pennsylvania agreed.  The district court found that the Compromise and Release Agreement was a general release meant to waive all claims, including the FMLA and common law claims.  The district court opined that the release include “broad, all-encompassing language” relating to the work injury claim and its “sequela.”  Specifically, the district court noted that the use of the words “sequela whether know or unknown at this time” broadened the scope of the release.

In so doing, the district court relied on two cases:  Hoggard v. Catch, Inc., No. 12-4783, 2013 WL 3430885 (E.D. Pa. July 9, 2013)(Kelly, J.) and Canfield v. Movie Tavern, Inc., No. 1303484, 2013 WL 6506320 (E.D. Pa., Dec. 12, 2013)(Baylson, J.).  In Hoggard, the release in question recited that it “completely resolves all claims and issues arising out of the claimant’s injuries….”  The Hoggard court found that this language resulted in release of all employment claims against the employer which arose from the work injury, including wrongful termination claims.  In Canfield, the release in question recited that it released all “workers’ compensation claims….”  Because it was specifically limited to workers compensation claims, the Canfield court found that the release did not waive the employee’s employment law claims. 

In reversing the district court to find that the Zuber release did not release the employee’s FMLA and common law claims, the Third Circuit analyzed the phrase “sequela, whether known or unknown at this time.”  The Third Circuit found that the release was unambiguous of its face, and refused to review parol evidence.  The Third Circuit noted that the word “sequela” means “suit,” and that the language of the release thus was intended to waive his work injury claims and any “work injury claim” suit.  The modifier “its” before the word “sequela” renders the release limited to the workers’ compensation claim.  Further, the Court noted that the agreement to forfeit any damages claims was also modified by the phrase “work injury claims.” 

Interestingly, the Third Circuit also based its determination on the “structure” of the release.  Elsewhere in the document, the agreement recited that its purpose was to resolve the work injury claim, and that it was a release of the employee’s workers compensation claims.  Given this language, the Third Circuit reasoned, the release paragraph could not be read as a general release.  Accordingly, the Third Circuit held that Zuber did not waive his FMLA and common law claims.

The issue of the impact of Compromise and Release Agreements in the context of later wrongful termination claims is a common one.  The Third Circuit’s opinion, read with the opinions in Hoggard and Canfield, suggests that courts will meticulously review the agreement under general contract principles to determine whether there was a waiver of broader employment law claims.  The interesting thing about the Zuber opinion is that both the district court and the Third Circuit engaged in this meticulous review of the language and came up with a different answer. 

Likely, this results from the procedural posture of workers compensation claims.  Those claims proceed on a completely separate track than any statutory or common law termination claims, and the issues are narrow:  wage loss and medical expenses as a result of a work injury. Further, the workers compensation settlement is sometimes reached while the wrongful termination suit is pending.  An unintended result to a challenge to a Compromise and Release Agreement (for example, a finding that a release is limited where one party intended it as general) might result from the procedural posture of both cases, error, or lack of precision in drafting.  Courts will have to unravel imprecise language without reference to that context. 

The Zuber opinion highlights the importance of clarity and consistency in a release.  The issue of whether or not a release is a “general” release should be discussed, agreed to, and recited in the release.   In the context of settling workers’ compensation claims, this might require discussing with the client any common law or statutory employment claims, and, for the employer, a discussion regarding the possibility of future claims.  The opinion in Zuber reflects that it will be difficult to predict what a court will do with particular language in the agreement.  

Patricia Collins is a Partner with Antheil Maslow & MacMinn, LLP, based in Doylestown, PA. Her practice focuses primarily on commercial litigation, employment and health care law. To learn more about the firm or Patricia Collins, visit www.ammlaw.com.  

Employment Law Lessons from Harvey Weinstein

Written by Patricia Collins Friday, 13 October 2017 19:42

Harvey Weinstein’s conduct is irresponsible, atrocious and potentially criminal, but that’s not the point of this blog.  Instead, I would like to take the opportunity presented by Weinstein’s case (and the many others in the news this year) to talk about reporting and remediating workplace harassment. 

Weinstein is the next in a line of prominent men accused of decades of harassment.  It appears that at places like Fox and Miramax, and now Amazon, harassment by the boss was a feature of workplace culture.  How did responsible employers allow this to continue?  Did the women not complain?  Did the employer bury the accusation?  Didn’t anyone know?  There is some evidence that the answer to all of these questions is yes:  the women felt that they could not complain, the employer buried the accusations with financial settlements, and many knew and did not raise any red flags out of fear or intimidation. 

The other common theme in these cases is the kind of harassment that took place:  abuse of position, arrogance about complaints, “quid pro quo” promises, and intimidation. 

Employers should consider their policies and practices to ensure a workplace free from this conduct.  Serial harassers poison the culture of the workplace and hurt the bottom line.  A recent article in the Wall Street Journalnoted the impact on the workplace of “rude” employees.    Imagine the impact of intimidating, harassing executives who abuse their power?  If employers have a serial harasser in a leadership position, it is time to face the music and address the behavior.

Employees should have an easy means of complaining.  Policies should allow employees to “go around” the harassing superior in order to make the complaint, and the harasser should not be included in decision making regarding the complaint.  Employers should avoid overly formal complaint procedures or reliance on form over substance.  Employers should conduct professional, confidential investigations, and farm the investigation out to a third party if necessary. 

It is important to note that settlements are not a license to keep a harasser employed.  The employer still has knowledge of the harasser’s bad behavior, and steps should be taken to avoid repeated incidents.  Those steps might include termination of important employees. 

A common theme in these high-profile cases is that the conduct started (and thus the culture was created) in a “different time” when these workplace protections were not in place.  That’s absurd.  Title VII became law in 1964, and employers should pride themselves on operating a modern workplace, compliant with laws that have been on the books for decades. 

So, how modern is your workplace?  Do you have a serial harasser?  Are you burying complaints to protect an executive?  Do your employees have a safe, easy way to make complaints to an independent person?  AMM can help employer develop a common sense policy that protects your business and your employees. 
 
 

One Final Overtime Update…..

Written by Patricia Collins Friday, 06 October 2017 18:52

 

 …At least until there is another overtime update.

 Let’s review the history of these regulations.  Prior to leaving office, President Obama’s Department of Labor significantly revised the salary requirements in order for certain classifications of employees to qualify for exemptions from overtime pay under the Fair Labor and Standards Act (“FLSA”).  The DOL increased the salary minimum to qualify for an exemption from approximately $23,000 to approximately $47,000.  Small employers and nonprofits scrambled to find a way to comply with the new regulations by the compliance deadline of December 1, 2016.

 On November 22, 2016, the United States District Court for the Eastern District of Texas issued an injunction against the implementation of those rules.  Small employers and nonprofits breathed a sigh of relief and tabled their new policies and employee classification changes. 

 Between November 22, 2016 and August 31, 2017, much happened in the Eastern District of Texas and the Fifth Circuit.  Appeals were filed, extensions of time to file briefs were granted, and the Department of Labor, now led by President Donald Trump, revised its position on these rules.  President Obama’s DOL had argued that the new regulations were a proper exercise of DOL’s rule making, and the President’s executive, powers.  President Trump’s DOL argued that while the DOL and the President were within their rights to establish and revise a salary requirement, they would not defend this particular salary requirement.

 On August 31, 2017, the Eastern District of Texas agreed, essentially, with the Trump DOL.  The Court found that while the DOL is free to set and revise a salary requirement, this particular salary requirement was not enforceable. 

 The good news is that the salary requirement set by the Obama DOL was so high as to present a significant financial and operational burden for small employers and nonprofits, and this ruling eliminates that concern.  However, the ruling leaves this DOL, or any DOL, free to revisit the salary requirement.  In other words, we will all take this ride again sometime in the future. 

 Employers should continue to ensure compliance with the existing rules, and check back in with AMM for any future changes to the salary requirement. 

Earlier this year, amendments to Pennsylvania’s statutes governing partnerships and limited liability companies (often referred to as unincorporated entities or alternative entities) went into effect. I recently blogged about the “transferable interest” concept adopted by the Act. Today, in Part 2 of this series, I highlight another significant change brought about by Act 170: the clarification of the fiduciary and other duties owed in the context of an unincorporated entity. In general, there are three basic duties:

• Duty of loyalty: generally, a duty to avoid self-dealing, competing and usurping company or partnership opportunities
• Duty of care: a duty to refrain from gross negligence and recklessness
• Duty of good faith and fair dealing: a duty to deal fairly and consistently with the terms of the parties’ agreement and the purpose of the entity

In a general partnership, each partner owes the above duties to each of the other partners and to the entity.

In a limited partnership: (a) the general partner owes each of these duties to the limited partners and to the partnership; and (b) the limited partners owe only a duty of good faith and fair dealing to each other.

In a manager-managed LLC: (a) the manager owes these duties to the members and to the entity; and (b) the members owe a duty of good faith and fair dealing to each other. In a member-managed LLC, the members owe these duties to each other and the company.

Some of these duties may be modified by agreement of the parties. In their operating or partnership agreement, the parties may modify, but not eliminate, the duty of loyalty and the duty of care, as long as the modification is not “manifestly unreasonable.” This standard is not defined and is left to the courts to interpret, but in general the agreement cannot convert the relationship into a strictly arm’s length relationship. The duty of good faith and fair dealing may not be modified or removed, but the owners’ agreement can identify the standards by which this duty will be measured.

Clarifying its earlier rulings, the Court of Appeals for the Third Circuit (which includes Pennsylvania) has ruled that a single utterance of a racial slur at the workplace could support a claim for harassment.

In this case, two African-American males (plaintiffs) brought suit challenging their firing on the basis that their termination was discriminatory and racially motivated.

The employees specifically alleged that when they arrived at work on various occasions, an anonymous note was written on the sign-in sheets: “don’t be black on the right of way.” They also asserted that while they had more experience working on pipelines than the non-African-American workers, they were only permitted to clean the pipelines rather than work on them. Significantly, a supervisor of these two African-American employees used a severe racial slur to threaten firing if a specific project was not completed to his satisfaction.

The two employees reported this offensive language to a superior and two weeks later they were fired without explanation. After being rehired they were again terminated for “lack of work”.

The suit filed in federal District Court specifically alleged unlawful harassment, discrimination and retaliation. The District Court dismissed the harassment claim, holding that the facts in the complaint did not support a finding that the alleged harassment was “pervasive and regular”. The Court also dismissed the related claims of discrimination and retaliation.

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