Voting by E-Mail

E-mail can save us from meetings, round robin telephone calls, faxes and conference calls. It’s especially time saving when we want to avoid the traditional meeting for something that seems so simple or mundane. We avoid getting in the car driving to a meeting just to say “I move that we approve the carpet cleaning contract.” That’s silly when you could just send out an e-mail and ask for everyone’s vote.

It might read: “Is everyone OK with Bob’s carpet cleaning bid? We can get a really good deal if we sign with him today. Let me know ASAP.” You get a quick response and business is accomplished right from your desk, or your smartphone. There’s just one problem. It’s illegal. No, I don’t mean you’ll get arrested. I mean that voting by e-mail isn’t enforceable. Let’s say you are the President (or committee chair) of a local charity, chamber or foundation, and you send out that carpet cleaning e-mail. A majority of your board (committee) members approve without comment. You sign the contract.

Your regular meeting comes up the next week, and a couple of the members (who were on vacation when the e-mail went out) arrive with information about Bob the carpet cleaner. While he’s inexpensive, he’s also a convicted felon and he’s been known to say some pretty unflattering things about your organization. More importantly, a board member’s uncle is in the business and made a major contribution last year. Let’s give the contract to uncle Vinnie, they say; and before you know it, Vinnie is hired. But you already signed the contract in reliance on that e-mail.

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The New “Red Flags” Rule for Healthcare Providers

Identity theft is rampant in today’s society. As many as ten million individuals per year become victims of identity theft and the number of medical identity theft cases are on the rise. In response to this growing problem, several federal agencies jointly promulgated regulations that require certain entities to implement a plan to detect, prevent, and correct identity theft. The “Red Flags Rule” applies to various types of entities, including most healthcare providers. Thus, entities ranging from a small doctor’s office to a hospital must be in compliance with the new Red Flags Rule by the date on which the Federal Trade Commission (“FTC”) will begin enforcing the Rule.   After that date, an entity may be penalized up to $3,500 per violation. Thus, healthcare providers need to take steps to comply, including creating an Identity Theft Prevention Program.

Before understanding the Rule, a healthcare provider must determine whether it is subject to the Rule in the first place. Under the Red Flags Rule, any “creditor” that offers or maintains one or more “covered accounts” is required to develop and implement a written Identity Theft Prevention Program. A “creditor” is defined as any person who regularly extends, renews, or continues credit. Healthcare providers will be considered a “creditor” if they regularly bill patients after the completion of services, allow payment plans after services have been rendered, or aid patients in obtaining credit from other sources (see note).

Under the Rule, a “covered account” is defined as (1) an account a creditor offers or maintains that involves or is designed to permit multiple payments or transactions, and (2) any other account the creditor offers or maintains for which there is a reasonably foreseeable risk of identity theft. The second portion of the definition is very broad and may include records that an entity may not recognize as a “covered account.” For healthcare providers, this definition of “covered account” generally encompasses patient and employee records. Thus, the vast majority of healthcare providers are subject to the Red Flags Rule and must comply.

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The New Security Breach Notification Rule

On August 24, 2009, the Department of Health and Human Services (“HHS”) published in the Federal Register interim final regulations and accompanying commentary with regard to breach notification requirements for unsecured protected health information (“PHI”) under the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”).

This HHS publication triggers two key deadlines, one commencing September 23, 2009, when employers and health care providers (“covered entities”) will be required to comply with the Act’s security breach notification requirements; and, the other, is February 22, 2010, the 180 day enforcement grace period announced by HHS. Accordingly, during this 180 day grace period, covered entities need to digest the new requirements, revise existing HIPAA policies and procedures and develop new ones, put in place a security incident response plan, train employees, confer with business associates about security breach response and negotiate modifications to existing business associate agreements. Employers and health care providers who discover a security breach after that date and fail to provide the required notices may be targeted for an enforcement action.

A security breach notification will only apply to “unsecured PHI”. PHI that is not encrypted or completely destroyed is considered “unsecured” by HHS. The only way, generally, that HHS has said that PHI would be considered “secured” is if it encrypted or completely destroyed. If that is the case, then the covered entity does not need to develop internal procedures for notification of security breaches. In any event, those practices should review their existing Notice of Privacy Practices to update it with respect to the new notification rule.

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Missouri Shared Work Program

A Unique Opportunity to Reduce Employee Hours While Still Qualifying Them for Unemployment

In a struggling economy, employers have to make difficult decisions pertaining to their businesses and employees. Faced with “hopefully” temporary losses in business, many employers are forced to terminate employees losing their experience and knowledge. On the other hand, if the employer elects to reduce hours, the employees receive lesser pay and are ineligible to collect unemployment benefits.

Fortunately, employers do have a unique alternative under the Missouri Employment Security Law whereby they can retain their hourly workforce and reduce hours while at the same time allowing their employees to receive a proportional supplement of unemployment benefits. This article applies only to such programs that involve hourly-paid employees.

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10 Ways for Companies to Stay Union Free With or Without the Passage of the Employee Free Choice Act

The Employee Free Choice Act (EFCA), in its present form, would result in three sweeping changes to labor law. First, the EFCA allows unions to more easily organize employees by eliminating the secret ballot in a National Labor Relations Board election. Instead, the union would merely present signed cards supporting unionization (authorization cards) of 50 percent plus one of the targeted work units to the National Labor Relations Board. The company would then be required to recognize the union as the collective bargaining agent and bargain with the union.

Secondly, the EFCA forces companies to reach an agreement with the union within 90 days of the National Labor Relations Board certification of the union or either party can demand mediation. If an agreement is not reached at the mediation table within 30 days, the contract is referred to binding arbitration and the arbitration results will then be binding on both parties for two years.

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HR/Legal FLSA Overview-Drilling Down and Through The Department of Labor Exempt Regulations—What Favorable Changes Are You Still Not Using?

The Fair Labor Standards Act was passed in response to the Great Depression. An important piece of New Deal legislation, the Act was concerned primarily with providing a minimum subsistence wage and protection against oppressive working hours. Congress passed overtime legislation to advance three goals: a shorter work week, compensation for overworked employees, and work spreading (sharing). The white collar exemptions essentially served as a line drawing tool between those workers in need of statutory protection and those whose skills, pay and position offered them sufficient bargaining power to protect themselves.

In the agrarian and manufacturing-oriented economy of the 1930’s and 1940’s, white collar workers had clearly defined decision-making responsibilities, were closer to management and were paid better than today. In such an economy, white collar workers were middle class in income, outlook, attitude and life.

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Amendments to Rules 144 and 145– A Source of Additional Revenues?

Rules 144 and 145, since 1990 providing a method for sales of restricted and control securities, were amended by the Securities and Exchange Commission (“SEC”) effective February 15, 2008.

Reasons for Expanding Rule 144 Business.

As discussed below, the amendments to Rules 144 and 145, on balance, significantly reduce requirements for sellers and broker-dealers in processing sales of “control” and “restricted” securities in Rule 144 transactions. As amended, the Rule 144 restrictions no longer apply to the sale of debt securities. Prior to amendment, the primary task for the broker-dealer was preparation (for the customer) of Form 144 both in transactions for affiliates and for non-affiliates. After amendment, the requirement to file Form 144 for non-affiliates has been eliminated. Also, prior to amendment, the broker-dealer had to assure that sales, even by non-affiliates, met the limitations (discussed below) on volume of securities sold and manner of sale. As amended, however, those limitations no longer apply to non-affiliate sales. The amendments should make the process of sale of control and restricted securities easier and less fraught with danger for the small broker-dealer processing the transaction.

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Amendments to FMLA Extend New Leave Rights to Family Members of Military Personnel

Within the last several days, President Bush signed the National Defense Authorization Act, which included amendments which expanded the coverage of the Family and Medical Leave Act (“FMLA”). These changes provide job-protected unpaid leave to covered workers to care for family members who are injured or become ill while serving in the armed forces, and when reservists are called to active duty in a “qualifying exigency” (a term which is likely to be defined under future regulations to be issued by the Department of Labor, but which clearly includes service in Iraq and Afghanistan). Because the law did not have a specific effective date, it is effective immediately.

Wounded Service Members

Under the FMLA amendments, an eligible employee who is the spouse, child, parent or next of kin of a service man or woman is entitled to a total of up to 26 weeks of unpaid leave to care for the servicemember if he or she is receiving medical care for, or recuperating from, a serious injury or illness suffered while serving in the military. The term “next of kin” has not previously been used in FMLA and is undefined by the statute. Exactly who qualifies as a “next of kin” is likely to be defined under new regulations to be issued by the Department of Labor (“DOL”). A serious injury or illness is one that renders a servicemember medically unfit to perform his or her military duties. The 26 weeks of leave can only be taken during a single 12-month period (i.e., can not be taken in successive years due to the same injury or illness). Leave may be taken intermittently. The employer must allow the employee to take leave in increments as small as the shortest period of time that the employer regularly tracks in its payroll system (e.g., if a time clock is utilized by an employer, the increment can be measured in minutes). If a husband and wife are employed by the same employer, they may be limited to taking a total of 26 weeks of unpaid leave between them.

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Kicking the Habit and Getting Fit Helps Employers’ Bottom Lines

Employee costs are the bottom line

The fact is that employee costs, and curbing those costs, are the “bottom line” for most employers. For years, employers have been struggling to control and minimize the rising costs of health care for their employees. Employers are increasingly forced to transfer health care costs to their employees through higher premiums, copayments and deductibles. Only in the past few years have employers realized that they can assist their employees in improving their overall wellness, while at the same time potentially reducing the employers’ health care costs. The methods that employers have begun experimenting with include implementing wellness programs, offering health risk assessments, and education.

Hard, Cruel Facts

Since 2000 U.S. healthcare cost increases have exceeded the overall inflation rate by a factor of two to five times. (National Coalition on Healthcare, Economic Cost Fact Sheets.)

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Holy Moses, Batman! They’ve Stolen Our Private Placement Exemptions!

The Basic Requirements: Early History

Any sale of a security to a Missouri resident must either be registered with the U.S. Securities and Exchange Commission (“SEC”) and the Missouri Securities Commission, or have at least one specific provable exemption from each of those two requirements.

In 1953, the U.S. Supreme Court ruled that the “private offering” exemption of §4(2) of the Securities Act of 1933 (the “1933 Act”) required that the issuer prove that all “offerees” (not only purchasers) had sufficient investment sophistication and financial well-being (hereinafter “investment suitability”) to establish that they did not “need the protection of registration” under the 1933 Act. SEC v. Ralston Purina, 346 U.S. 119 (1953) But because of the illusory definition of “offerees” as including possibly every person who learned of an offering (not just those receiving an “offer” in the contract sense), the availability and thus the usefulness of the private offering exemption of Section 4(2), was thereafter seriously curtailed.

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