Monthly Archives: March 2012

Supreme Court Hears PPACA Mandate Oral Argument

The U.S. Supreme Court today held its second of three days of oral argument regarding the Patient Protection and Affordable Care Act, or PPACA.

This morning the Court heard arguments on the most visible issue: the constitutionality of the so-called “individual mandate” requiring most Americans to purchase health insurance. Early reports seem to indicate that several justices, including the often tiebreaker Justice Kennedy, were skeptical of the law’s constitutionality during oral argument.

The Court will hear one more day of argument tomorrow on separate issues. It is anticipated to release its opinion sometime this summer.

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Federal Court Orders Arbitration

In a ruling released this week, a federal trial judge in Richmond has ordered the parties to an ADA lawsuit to binding arbitration and dismissed the suit.

When the plaintiff was hired, she signed an employment application agreeing to binding arbitration of any and all claims related to her employment. The application also required the parties to split the fees equally. After being sued under the ADA, the employer, a law firm, requested arbitration.

The plaintiff argued it would be prohibitively expensive to pay for half the arbitration, which she estimated to be around $37,500. She also objected that she needed broader discovery to best pursue her claim.

The court rejected both arguments. First, the employer offered to pay all the resulting arbitration costs, mooting her first argument. Second, with regards to the limited discovery inherent in arbitration, the judge ruled that by agreeing to arbitration the plaintiff limited her own right to discovery and was now bound.

In the end, the signed employment application requiring binding arbitration was sufficient to compel arbitration and dismiss the complaint.

The $3 Million Decimal Point

Bloomberg reports that J.P. Morgan is defending a lawsuit in London over a misplaced decimal. The offending punctuation mistake: offering a mid-level trader an employment agreement (in the South African currency rand) for about $3,100,000, a number the bank says should have been $310,000.

The employee accepted the agreement, but refused to work after realizing J.P. Morgan was only going to pay him 10% of what he anticipated.

He is now unemployed, and has sued the bank for the difference.

Webcast on Fiduciary Responsibilities

The Department of Labor’s Employee Benefits Security Administration is offering a series of two webcasts on Tuesday, March 27, and Wednesday, March 28, both from 1:00 to 2:30, on the topic of ERISA fiduciary duties. Both are free.

Perhaps one of the most sweeping and complicated issues in ERISA, plan sponsors’ fiduciary obligations cover selecting and monitoringservice providers, ensuring only reasonable fees are paid for services, diversifying and prudently selecting investments, reporting and disclosing the proper information to governmental agencies and participants, updating and following plan documents and ERISA requirements, avoiding prohibited transactions, and other important issues.

The first day will cover basic fiduciary responsibilities, prohibited transactions, and exemptions. The second day will cover reporting, disclosure, and voluntary correction programs.

The link to register, along with more information, is here.

No Facebook Password, No Job?

In a growing trend, more employers are exceeding typical interview questions and getting into something more telling: Facebook.

The USA Today reports on the surge. Instead of the traditional background-check process of asking for references, some employers are asking interviewees for their Facebook login and password on the spot. Others have required applicants to log on their Facebook accounts during an interview, or accept a friend request from the company’s human resources officer.

This tactic has prompted proposed legislation in several states, and may violate Facebook’s terms of service, but the Department of Justice says it has no intention of interfering with the process. So for now it appears to be fair game in Virginia.

Discriminatory Severance Packages Under Title VII

In a ruling of first impression, the Fourth Circuit held last week that providing discriminatory severance packages can create a cause of action under Title VII.

In Gerner v. County of Chesterfield (opinion), the plaintiff, a former female employee, alleged the County offered her a severance package less-favorable than those offered to similarly situated males. The district court dismissed the case, ruling that the severance package was not a contractual right of employment and therefore a discriminatory severance offer could not constitute an adverse employment action under Title VII.

The Fourth Circuit disagreed, ruling that offering discriminatory severance packages is, in fact, an adverse employment action. It remanded the case back to the trial court.

Don’t Forget About the Small Business Health Care Tax Credit

With the considerable news surrounding the implementation of, and challenges to, the Patient Protection and Affordable Care Act (PPACA), the small business tax credit has gotten lost in the shuffle.

The IRS has revamped a website aimed at helping small businesses determine whether they’re eligible for the credit and claim it. The credits, which are limited to employers with fewer than 25 full-time equivalents whose average salary is less than $50,000, are already available, and are set to increase in 2014. In addition to the credit, which may be carried forward if the business owes no tax, employers may still deduct the excess of the premiums over the credit as a business expense.

The website is here.