Legal

summer-2019-dangers-of-paying-employees-improperly

MAYDAY, MAYDAY, ITS PAYDAY: The Dangers of Paying Employees Improperly

Much like the iceberg that sunk the Titanic, improperly classifying and paying employees has sunk its fair share of employers.  It seems like each week, or at least each month, employers are faced with a new law, regulation, or case interpretation which impacts the manner in which they have to pay employees. By way of […]

Much like the iceberg that sunk the Titanic, improperly classifying and paying employees has sunk its fair share of employers.  It seems like each week, or at least each month, employers are faced with a new law, regulation, or case interpretation which impacts the manner in which they have to pay employees.

By way of example, recently, the Pennsylvania Supreme Court heard argument in the matter of Chevalier v. Gen. Nutrition Centers, Inc., which pertains to an employer’s use of what is referred to as the “fluctuating workweek” and the potential significant difference between the federal and the Commonwealth’s interpretation of the law.  The federal Fair Labor Standards Act (FLSA) permits an employer to use the fluctuating workweek to pay an employee a fixed weekly salary for all hours worked, so long as the employer also pays an overtime premium equal to one-half of the employee’s regular hourly rate for hours worked in excess of forty (40) per week.  All states must adhere to the requirements of the FLSA.  States, however, are also permitted to implement their own wage and hour laws, and employers must follow whichever law is more beneficial to the employee.

In this regard, Pennsylvania has implemented the Pennsylvania Minimum Wage Act (PMWA), which mirrors the FLSA in most regards; however, it does include differing language as it pertains to the fluctuating workweek.  The PMWA is more “employee-friendly” because it requires employers to pay 1 and  imes the regular rate to employees for overtime worked rather than merely adding the “one-half” to such an amount as required by the FLSA.  As such, under the PMWA, an employer would be required to pay an employee more for the overtime hours worked than if the FLSA language applied. The foregoing is significant because employers are required to follow the law that is more beneficial to the employee, not the employer.  Depending on how the Pennsylvania Supreme Court rules, it may have a significant impact on an employer who uses a “fluctuating workweek” and may result in claims by employees for unpaid wages.

The fluctuating workweek is just one example of the potential pitfalls employers face when dealing with properly paying employees.  Given that it is summer, two other potential issues arise more often:  the use of independent contractors and unpaid interns.  Employers love using independent contractors because they do not have to pay overtime or payroll taxes.  Employers also love using unpaid interns because they are, well, unpaid.  In order for a worker to be classified as an independent contractor or an unpaid intern, however, they must meet specifically defined tests.  If they do not meet such tests, they have to be paid at least minimum wage and overtime for all hours worked over forty in a workweek.

So, who is an “independent contractor”?  As a general matter, for someone to be an independent contractor, the company cannot control the manner or means by which the individual performs the work.  By way of example, a company should not inform the worker how to do the work, what hours to do the work, or provide the tools to complete the job.  The company also should not provide the worker with any benefits that are provided to a regular employee, such as vacation time, health insurance, or a pension plan.  The worker should be free to work for other entities and should not spend the entirety of a workweek working for one company.  Further, the worker should have some potential liability with regard to the work being performed.  For example, if the company is not paid for work performed by the end client, the worker also does not get paid.

The foregoing is not an exhaustive list of factors which would be considered, but merely examples of what a court, or the Department of Labor, would review when determining if a company misclassified an employee as an independent contractor.  If such a determination is made, the company would be subjected to significant penalties and potential damages including attorneys’ fees and a twenty-five percent additional payment on the money due to a worker for unpaid wages.

Similarly, if a company misclassifies an employee as an unpaid intern, it could expose the company to similar damages and penalties.  In order to determine if an intern can be “unpaid,” a company should determine who is the primary beneficiary of the work being performed.  If the company is the “primary beneficiary,” then the internship must be paid.  If, on the other hand, the student is the “primary beneficiary,” then the internship may be unpaid.

In order to determine the “primary beneficiary”, a company can look to certain factors which include the following:  the intern clearly understands that there is no expectation of compensation; the internship provides training that would be similar to that which would be given in an educational environment; the internship is tied to the intern’s formal education program; the internship’s duration is limited; the intern’s work complements the work of paid employees; and the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Improper use of the fluctuating workweek, independent contractors, and unpaid interns are merely a few ways in which wage and hour issues can sink an employer.  It is imperative that an employer remains aware of all the changes and updates to the laws and regulations and properly pays its employees.  If an employer fails to do so, it will end up hitting an iceberg without a lifeboat.

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summer-2019-sex-trafficking

The Ugly Truth Sex Trafficking is Happening Here

The trafficking of humans for sexual exploitation sounds terrifyingly exotic; the plot in a Hollywood movie like Taken where beautiful women are abducted and sold to the highest bidder in an auction attended by the ultra-rich. In reality sex trafficking arrests are increasing in places like Allentown, Bethlehem, Easton, South Whitehall, Lower Macungie, Palmer and […]

The trafficking of humans for sexual exploitation sounds terrifyingly exotic; the plot in a Hollywood movie like Taken where beautiful women are abducted and sold to the highest bidder in an auction attended by the ultra-rich. In reality sex trafficking arrests are increasing in places like Allentown, Bethlehem, Easton, South Whitehall, Lower Macungie, Palmer and Bethlehem Townships. The victims are mostly young women from those same communities.

Today, sex trafficking takes place in your hometown. It happens at fake massage businesses, strip clubs, truck stops, hotels, and motels. It is made easy by online “escort” services and websites like skipthegames.com that allow the explicit advertisement of any and all sexual acts. One can browse through hundreds of “profiles,” many including X-rated images, each of which includes a list of the sexual acts the “escort” is willing to perform. So far these websites have been able to avoid the fate of backpage.com which served the same purpose until April 2018 when the Federal Government indicted several people connected to the site for facilitating prostitution.

This sex trafficking is brutal and humiliating. The victims are often children and young adults. The Hollywood imagery of Julia Roberts in Pretty Woman could not be less accurate. The overwhelming majority of women (and yes men also) being sold for sex have no choice in the matter. There is no “hooker with a heart of gold” story when a man pays $80 to have sex with a drug addicted teen in a motel room off Airport Road.

The truth is that most of these women are controlled by men; pimps or traffickers, who manipulate, exploit, control, extort, beat, and rape them. The pattern seen repeatedly in this business is a young woman, typically vulnerable, alone, and unsophisticated. Often overconfident in her ability to control the situation or the man who will exploit her. The pimp starts out as caring, protective, even charming. The promise of easy money, access to drugs, physical protection, and someone to take care of her is enticing to one unfamiliar with exploitation and violence. Often the victim is plied with drugs to the point of addiction. Opioids have become the favorite drug, especially fentanyl, because of how quickly the addiction is set and how long and torturously painful withdrawal can be. The need for the drug drives the women to acts they never would have previously considered. Refusal leads to withholding of the next fix and the pain of withdrawal. Physical assault and rape are constant threats against any woman who fails to follow the rules set down by her trafficker. Often degrading photos and videos of the women are used as a means extortion, with threats to release the images to family or more publicly on social media.

A woman trying to break free from this cycle fears the drug withdrawal, perhaps as much as she fears the rapes and beatings. Many who are in the control of a trafficker are also in fear of law enforcement due to their own criminal acts. The shame and humiliation threatened by the release of the videos and pictures often means returning to family is a fraught option they cannot face. Few believe they can escape safely.

While the ugliness of sex trafficking remains somewhat hidden, the damage it does affects the entire community. Illegal drug use and violence often accompany trafficking. The broken lives of the victims and their families cause a devasting ripple effect across generations. This is not just occurring in exotic locations. It is happening is Fogelsville, Hanover Township, Lehighton, Reading, and every local community.

The response is also occurring throughout our area. Local police and prosecutors work together, often with the Department of Homeland Security, to identify traffickers and prosecute them. Some high-profile cases have increased community awareness. A non-profit group Valley Against Sex Trafficking (VAST) has been working to end sexual exploitation and empower survivors of sex trafficking. Increased community awareness is part of the plan to eliminate human trafficking. One part of the solution is to shed light on the issue instead of allowing it to remain hidden or ignored. Resources are available locally and nationwide at www.thevast.org; 484.560.6836 and 1.888.373.7888.

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summer-2019-telemedicine

Telemedicine: Its Legal Challenges

The advent of internet-enabled technologies and the expansion of telecommunication services has made a new form of medicine possible, appropriately branded telemedicine. The simple definition of telemedicine is the use of electronic communications and software to provide clinical services to patients without an in-person visit. At this point, many of you have probably heard of […]

The advent of internet-enabled technologies and the expansion of telecommunication services has made a new form of medicine possible, appropriately branded telemedicine. The simple definition of telemedicine is the use of electronic communications and software to provide clinical services to patients without an in-person visit. At this point, many of you have probably heard of telemedicine. In fact, the idea is certainly not new. As far back as the 1950s hospital systems and medical centers attempted to share information and images via the phone. One of the first reported successes of this foray occurred in this state when two Pennsylvania health centers transmitted radiologic images over the phone.

Unlike telehealth, which is a broad term referring to any health services conducted with the aid of internet technologies, telemedicine specifically entails replacing the traditional doctor’s visit with a secure online interaction. There are two primary forms of telemedicine technologies, “synchronous” and “asynchronous.” “Synchronous” technology allows real-time communication between the patient at the “originating site” and the practitioner at the “distant site.” “Asynchronous” technology, also known as “store and forward,” refers to the transmission of medical information from the “originating site” to the “distant site” that the practitioner then reviews at a later time. Policymakers and physicians alike strongly prefer “synchronous” technology as having a live, interactive conference is much less likely to impact the quality of care.  Many of the existing insurance carriers that offer reimbursement for telemedicine services strictly prohibit “asynchronous” technology.

The popularization of telemedicine arose from its theorized diverse applications, especially its use for providing specialty care for remote patients who have previously lacked the availability and means to seek such care. Other applications include “follow-up” visits, remote chronic disease management, remote post-hospitalization care, preventative care support, school-based telehealth, and assisted living center support. “Follow-up” visits are often missed or rescheduled. Telemedicine eliminates this inefficiency and increases the convenience for the patient and provider. Utilizing telemedicine for chronic disease management decreases cost and allows patients to maintain better control over their health. Readmissions due to a lack of proficient post-hospitalization care can be significantly reduced by employing telemedicine to assess and advise patients whether to return to the hospital. Mental health and addiction treatment can benefit patients by ensuring they receive the immediate care and support they require. By instituting telemedicine in school systems, children can receive immediate diagnoses from practitioners without ever having to leave school. This diagnostic triaging can determine the severity of the child’s condition and thereby reduce the unnecessary and costly process of parent pickups and immediate emergency center care. Parents can be provided with instructions and reassurances all in a convenient, streamlined manner. Assisted living centers now have an avenue for less urgent issues that arise at night or on the weekend that forego hospitalization. On-call practitioners can now provide immediate care. With a multitude of applications and availability of technology telemedicine should be widely available; however, two hurdles, regulation and reimbursement, continue to block the way.

Though the idea is old, the adoption and practice of telemedicine are still in its infancy. Not only did the concept of telemedicine have to wait for the production of expensive and complex equipment capable of reliably connecting doctors to their patients, but it also had to wait for the adaptation of the legal and regulatory framework to support it. Much like the adoption of universal electronic medical records, the process to implement widespread access to telemedicine has been arduous. Even in this modern technological age, long after the necessary equipment and network infrastructure have been developed, legislatures have been slow to pass bills that specifically outline the regulations on telemedicine and the limitations on insurance carriers reimbursing practitioners.

The regulatory environment for telemedicine presents various key issues that state medical boards and legislatures have worked to define and resolve. Chiefly among those issues, online prescribing, physician-patient relationship, cross-state licensing, and patient consent for treatment have posed strenuous challenges. Online prescribing of medications via telemedicine, especially that of scheduled drugs, typically requires an initial in-person physical exam. How the physician-patient relationship is established for telemedicine differs from state to state. Some states require the first “new-patient” visit to be in person with subsequent “follow-up” visits allowed to be conducted through telemedicine. Other states allow the physician-patient relationship to be established entirely through telemedicine interaction. Each state has its own laws regarding patient consent for treatment, and some states do not require it at all. Traditionally, written consent is required, and some states maintain this requirement for telemedicine care. Other states have adopted the written consent to an interactive online form that ensures patients read and check each pertinent line item. Lastly, cross-state licensing, which allows practitioners to provide telemedicine care to a patient in a neighboring state in which the practitioner is not licensed, requires the cooperation of state medical boards to form working models. These models include reciprocity, licensure by endorsement, and mutual recognition. Reciprocity is the simplest model allowing practitioners to utilize their existing license in another state. Licensure by endorsement involves state boards granting licenses to practitioners who hold valid licenses in states with similar standards. Some endorsement states require the practitioner to attain additional qualifications. Mutual recognition involves the organization of a multi-state pact that forms a legal agreement to accept the policy and processes of each participant-state with efforts made to promote the “harmonization of standards.” Each of these issues has required significant consideration by policymakers to ensure that the quality of patient care does not decline as a result of telemedicine.

State-mandated reimbursement programs are vital to the survival of telemedicine. In each state, both private payer reimbursement and Medicaid & Medicare reimbursement require legislation. Private carriers almost universally exclude “asynchronous” telemedicine. They also have stringent requirements regarding the technological platforms utilized for the “appointment.” Third-party platforms, such as Skype are not permitted. Only platforms that are specifically designed for telemedicine are allowed. This ensures patient privacy and prevents connectivity-related issues. Reimbursement levels are also controlled by the state with most requiring the same level of reimbursement for telemedicine as for in-person visits. Medicaid has the same reimbursement protocols as Medicare for telemedicine. The only variation is that Medicaid offers lower reimbursement levels for certain types of care. Forty-eight states provide Medicaid reimbursement for “synchronous” telemedicine, the exceptions being Massachusetts and Rhode Island. The factors for telemedicine reimbursement that both private payers and Medicaid consider are the medical specialty type, the type of service provided, the “originating site,” and the “distant site.” The framework for telemedicine reimbursement undergoes consistent changes that adapt as the availability of care expands.

The General Assembly of Pennsylvania heard House Bill No. 15, which outlined the regulations for Pennsylvania telemedicine, in the 2019 session on March 5th. The bill includes guidelines for state licensure boards on how to regulate telemedicine. It discusses explicitly patient privacy and data security standards, which must comply with the Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health Act. Under the same section, the bill also considers model policies for the appropriate use of telemedicine technologies. Pennsylvania mandates that telemedicine care complies with the current health care regulations such as the establishment of the patient-provider relationship, consent for treatment, appropriate examinations, and maintaining electronic medical records. “Out-of-State health care providers” are only permitted to offer telemedicine care through a federally operated facility or in certain emergency cases. Lastly, the bill discusses the framework for reimbursement for both private payers and Medicaid. Currently, both Highmark and Independence Blue Cross offer coverage for telemedicine care in Pennsylvania; furthermore, Medicaid & Medicare reimbursement is supported outside of metropolitan statistical areas. All in all, general access to telemedicine care in Pennsylvania is expanding. As the need for medical services in multi-state remote areas grows, so too will telemedicine. With the expansion of telemedicine nationwide, we will continue to see an increased necessity for legal guidance to ensure the quality of patient care.

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summer-2019-employee-work-injury

Is My Employee’s Work Injury Legit? Red Flags A Claim May Be Bogus

Pennsylvania employees reported 174,216 work injuries in 2017.  This is an increase of more than 15,000 on-the-job injuries reported in 2016 when Pennsylvania employers and insurers paid out a whopping 3.1 BILLION to cover lost wages and medical treatment.    As this figure illustrates, the costs associated with employee injuries can be staggering and while […]

Pennsylvania employees reported 174,216 work injuries in 2017.  This is an increase of more than 15,000 on-the-job injuries reported in 2016 when Pennsylvania employers and insurers paid out a whopping 3.1 BILLION to cover lost wages and medical treatment.    As this figure illustrates, the costs associated with employee injuries can be staggering and while workers’ compensation is an unavoidable cost of doing business, how many injuries are not legitimate? How many accidents are phony or staged turning a pre-existing condition into a work-related liability?  It’s impossible to gauge the number of bogus claims or what impact they have on premiums, but business owners are not helpless.  Companies can take simple measures when conducting injury investigations to effectively uncover and stamp out bogus claims improving their bottom line.

It should be a no-brainer that all claims, no matter how big or small, must be investigated but many companies surprisingly have no formal procedure in place or their “investigation” is limited to completing a report which contains only basic information.   After all, isn’t it the responsibility of the claims professional to conduct the investigation? Yes and no.  While the insurer should do its own investigation, the devil is in the details and the most critical information can only come from the employer.  An excellent starting point, whether you’re a mom and pop shop or huge conglomerate, is to promptly gather all essential information and look for any red flags.   

Here’s a checklist to jumpstart the investigation.

  • New or recent hire.
  • Injury is reported while employee is working through a temporary agency.
  • Delay in reporting injury.
  • Injury allegedly happens on a Friday but is not reported until the following week.
  • Injury occurs prior to news of a layoff, strike or plant closure.
  • Injury reported after employee was fired or laid off.
  • Employee is disgruntled (i.e., denied vacation, demoted or passed over for a promotion, poor performance review, job dissatisfaction, conflict with co-worker(s)).
  • Recent discipline and termination imminent. 
  • Spike in absenteeism.
  • Injury coincides with change in personal circumstances (i.e., illness of spouse, pregnancy of employee/spouse, end of seasonal work or project, spouse relocation, separation/divorce, childcare issues, enrollment in college).
  • Injury reported before a planned retirement or vacation. 
  • Employee regularly uses FMLA leave or has history of STD or LTD claims. 
  • Employee has a history of work-related and/or personal injury claims.
  • Employee is self-employed on the side with no workers’ comp coverage. 
  • Rumors that accident outside of work.
  • Employee account of accident/injury does not make sense or has varied.
  • CCTV does not corroborate accident/injury.
  • Body part(s) allegedly hurt changes.        
  • Incident is unwitnessed or witnessed only by friend or relative.
  • Witness statements are contrary to employee account.     
  • Employee is uncooperative with investigation (i.e., refuses to sign Medical Authorization or limits to post-injury records, refuses to provide Statement, does not return calls).      
  • Refuses offers of modified work.
  • Insists treating with “own doctor” instead of panel provider.
  • Shows up at work utilizing “props” when not prescribed (i.e., back/neck/knee brace, arm sling, crutches/cane). 
  • Quickly hires attorney and asks about settlement. 

Employers must promptly relay any red flags to their claims professional since we are under a 21-day deadline from the employee’s first missed day of work to make a compensability determination or risk penalties.  This is only 15 business days.  Naturally, the presence of one or more red flags does not necessarily mean a claim is not legitimate and the totality of the circumstances must always be considered but identifying red flags early on has proven to be an effective way of weeding out bogus claims.        

Amy has been representing employers, insurers and third-party administrators in workers’ compensation matters for over 23 years.  If you have any questions or would like more information, Amy can be reached at aandrews@zatorlaw.com or 610-841-5863.

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2019-the-I-dos

The (I) Dos and Do Not’s of Pennsylvania Wedding Law

There are few periods of a romantic relationship as hectic as wedding planning. From the time she (or he) says yes, until you finally say, “I do,” you and your significant other will contractually commit to anything from a venue to an ice sculpture, and everything in between. Wedding planning is meant to be a […]

There are few periods of a romantic relationship as hectic as wedding planning. From the time she (or he) says yes, until you finally say, “I do,” you and your significant other will contractually commit to anything from a venue to an ice sculpture, and everything in between. Wedding planning is meant to be a time when lifelong dreams are made into realities and knowing what to look for in your wedding agreements can help those best-laid plans from turning into nightmare fuel.

While your significant other may beg to differ, there is nothing particularly special about the contracts you sign leading up to your wedding: to be enforceable they must comply with Pennsylvania contract law.  What does make the wedding contract unique what surrounds it – the pressure to get the perfect venue, the must-have photographer, or that florist you’ve been following on Pinterest for five years – and wedding vendors/venues can use this emotion to their advantage to get you to agree to terms you wouldn’t under any other circumstances.

Following these simple principles of contract law can help you know when to say “I do” or “I don’t”:

  1. Don’t get stuck with an Adhesion Contract – An Adhesion Contract is one that you sign without the value of a bargain, and often under duress. What does that mean? If a vendor or a venue says, you have to sign the contract as its written, take-it-or-leave-it, without giving you the ability to negotiate terms that are clearly written to benefit them; it may be an adhesion contract. This, combined with the first-come-first-served pressure of wedding planning, those one-sided contract provisions may be unenforceable.
  1. Gone with the windfall – For more than a century in Pennsylvania, it has been the law that a contract cannot be worth more cancelled than if completed. What does this mean for your wedding contracts? By way of example, a venue cannot arbitrarily charge you a penalty for cancelling your wedding just to deter you from cancelling.  In Pennsylvania, if you cancel your wedding, the wedding venue would only be entitled to the profit they could have reasonably expected to make on your event.
  1. Not so Non-Refundable Deposits – A rose by any other name may still smell as sweet, but a penalty by any other name is just as unenforceable. “Non-refundable deposits” are a great example of terms found in adhesion contracts, and are often penalties masquerading as damages clauses. Few wedding vendors/venues will let you book the date without putting money down, but just because you put money down doesn’t mean you can’t get it back.  If that “non-refundable” deposit isn’t reasonably calculated to anticipate the vender’s damages, it could be an unenforceable provision, and you may be able to get it back.
  1. If they don’t mitigate, you can litigate. Regardless of whether it’s written into your wedding contracts or not, if you cancel on a vendor/venue, they have a duty to take reasonable steps to “mitigate” their damages. This often means that they have to make some attempt to rebook the date.  Unlike damage provisions, the pressure is on you to show that they haven’t attempted to mitigate their damages.  The concept of mitigation works to protect you in several ways: first, if they rebook the date and make the same amount of profit, you could be off the hook, and second, if they rebook the date but make less profit than they would have if you had not cancelled, it could reduce what you owe.
  1. Know what you’re worth. While the language of a contract can be confusing, it’s important to read it through and understand what you’re obligations are. In Pennsylvania, contracts are limited to the words on the page. Just because you talked about using the venue’s in-house catering service, does not necessarily mean your contract obligates you to do it, or that the venue can reasonably expect the same when determining its damages.

It’s easy to get lost the sea of legal jargon that makes up the typical wedding contract, and that’s why it’s important to consult an attorney to help you navigate the storm. Often an ounce of prevention is worth a pound of cure, and a relatively small amount of money spent having an attorney review your wedding contracts prior to signing could save you thousands on the back end.

After all, who wants to bargain for the cancellation provision in your wedding contracts in front of your fiancé? Have a lawyer do it for you!

 

An attorney with Gross McGinley, Nicholas Sandercock provides counsel to individuals and businesses in litigation matters. Since planning his own wedding in Lehigh County, Nick has worked with individuals and wedding industry professionals to ensure they understand the contracts they are signing and any obligations and risks they may be assuming. Nick also counsels couples who feel a vendor or venue may not have fulfilled their obligations or is attempting to keep deposits/fees to which they are not entitled.

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2019-blended-families

Legal Considerations for Blended Families

Once you have navigated the highs and lows of wedding planning, you can begin your life as a married couple. In the last decade or so, there has been an uptick in blended families.  Some of this is due to traditional second marriages, but some are because individuals are choosing to have children without feeling […]

Once you have navigated the highs and lows of wedding planning, you can begin your life as a married couple. In the last decade or so, there has been an uptick in blended families.  Some of this is due to traditional second marriages, but some are because individuals are choosing to have children without feeling the need to get married. Whatever the reason, with this increase in blended families, the legal implications should be addressed.

What is a blended family? There is no legal definition of blended family, but the term has come to describe when two parties with children of their own marry and create a new family unit. With the creation of this new family unit, come additional considerations for all involved, for example:

Is there is custody order for the children?

While you may have married and created your new family unit, you cannot forget that the children involved have other parents as well. If there is a custody order, the child may very well have to travel back and forth for periods of custody. As a new step-parent, you may be responsible for some of this transportation, and with it, interaction with your spouse’s ex. It is in the best interest of all involved that all the adults develop some relationship with one another, which can be easier said than done. Remember, you not only will be sharing custodial time with another household, if you are doing it right, but you will also be at extracurricular and sporting events for the children as well.  Life is complicated. If you find yourself entering into a blended family, it is highly advisable to establish a formal custody agreement, so all the parties know their roles going into it. However, it is important to keep in mind that if you are a step-parent, there will be times you need to take a back seat and let the parents make the major decisions.

Finally, if there is a custody order in place, and the child at issue lives in your household, you will be precluded from relocating. As a new step-parent of a three-year child, it is important to know that you and your new spouse cannot move out of the county with the child (without the other parent’s permission or the court’s permission) for the next 15 years. That is quite the commitment.

Is there a child support order?

With or without a formal custody order, there may be a child support order. This means additional income is either coming in or going out of your new household unit. Developing a family budget is always important, but it becomes especially important in blended families. Each family may choose to treat child support coming in differently, and it is important to have those discussions in advance. It is just as important to address child support obligations your new family unit must pay out.

 

What about estate planning?

Finally, how does this all impact estate planning? A step-parent is not a legal next of kin for a step-child. Accordingly, it is very important to meet with an estate planning attorney to review your options and prepare all the necessary estate planning documents for your new blended family.

Attorney Kellie Rahl-Heffner of Gross McGinley, LLP provides counseling to families facing domestic issues including separation, divorce, child custody, and child support. Krahl-heffner@grossmcginley.com

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What is Workplace Harassment?

There is a lot of misunderstanding as to what “workplace harassment” is. Specifically, we need to ask, what illegal workplace harassment is. The reality is that there is a lot of harassment in the workplace that is perfectly legal. Stated otherwise: In “at will” states such as Pennsylvania you can harass an employee for no […]

There is a lot of misunderstanding as to what “workplace harassment” is. Specifically, we need to ask, what illegal workplace harassment is. The reality is that there is a lot of harassment in the workplace that is perfectly legal. Stated otherwise: In “at will” states such as Pennsylvania you can harass an employee for no reason or any reason except an illegal reason. What is illegal harassment, therefore?

Harassment in the workplace is sometimes called “a hostile work environment” and is properly characterized as a form of discrimination. It is this “discrimination” component which differentiates illegal harassment from harassment which is not covered by the law. Since illegal harassment or hostile work environment is linked to discrimination, it must, therefore, relate to a federal or state law making the discrimination at issue illegal. To discriminate means to treat unequally- but if I harass or even fire my secretary “unequally” and unfairly because she is a Cowboys fan and the other secretaries are Eagles fans, this type of unequal treatment is not actionable. What are the laws therefore upon which a harassment claim may be based? The main ones are the Civil Rights Act of 1964 and Civil Rights Act of 1991 (Title VII), which prohibits employment discrimination based on race, color, sex, religion and national origin; The ADEA, age discrimination act; and the ADA, which prohibits disability discrimination. Recently “sex” has been interpreted to include sexual preference and sexual orientation as well. In Pennsylvania, the PHRA mirrors the above federal protections in many ways.

What conduct constitutes harassment? Unlawful harassment based on the above laws is: a) offensive and unwelcome conduct; which is b) severe OR pervasive. In addition, retaliation for a person complaining, filing a Charge, reporting or participating in an investigation of harassment under the above laws, is prohibited. “Severe” can be one very serious incident, and “pervasive” can be a series of continuous less severe insults, threats, slurs, offensive statements and the like. No single factor will determine whether there is unlawful harassment or hostile work environment; however, the courts and the EEOC regulations have focused on whether the harassment “unreasonably interferes with the employees’ work performance.” Harassment itself is a harm punishable by the law without the need of economic damage such as from a demotion or firing.

When is an employer liable? The short answer is that an employer is most at risk for the acts of its supervisors. An employer is liable for the authorized acts of its supervising employees. This, however, provides an easy escape for employers who simply state that “harassment and discrimination are never authorized.” Accordingly, the Supreme Court in the 1998 cases of Farragher and Ellerth, stated that an employer is strictly liable for supervisor’s harassment if the harassment causes termination, failure to promote or hire or loss of wages-what is called a “tangible employment action.” For harassment, by non-supervisors, the employer is liable if it knew or should have known about the harassment and failed to take prompt and corrective remedial action. A defense for the employer is to show that the employee failed to take advantage of preventive or corrective opportunities provided by the employer.

What can employers do to prevent such claims? Employers can: 1. Prevent harassment by having appropriate and enforced policies and well trained and sensitive HR staff. Training and education of employees are critical. 2. Employers can conduct a proper and effective investigation of the allegations of harassment. The investigation must be thorough, non-retaliatory, prompt, effective and impartial.

To prevent illegal harassment there needs to be a clear understanding of what it is, how it is proven and the circumstances under which employers may be held liable. Whether an employer or employee, this area of the law is very complex and therefore consultation with experienced HR counsel at the earliest opportunity is critical.

 

For over 25 years Attorney Kounoupis has represented employees and sued most of the Fortune 500 corporations, insurance companies, as well as federal, state and county governments. If your top managers and executives have not yet secretly consulted with him, they probably will in the future.

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2019-getting-paid

Getting Paid When the Client Goes Bankrupt: It’s Possible

Whether you are a small business owner, an entrepreneur or a valued member of a team, no matter your profession or trade, getting paid for your work is the lynchpin of your endeavors. So, when that customer/client for whom you have worked tirelessly for weeks, months or even years does not let- on that he […]

Whether you are a small business owner, an entrepreneur or a valued member of a team, no matter your profession or trade, getting paid for your work is the lynchpin of your endeavors. So, when that customer/client for whom you have worked tirelessly for weeks, months or even years does not let- on that he or she is struggling financially, it can be a shock that your first indication of trouble is the notice of bankruptcy that you receive in the mail.

Rather than assume that your labor will bear no fruit, you should make an inquiry further into the particulars of the customer/client’s predicament to determine if you are able to get paid because you may be pleasantly surprised. Not everyone is eligible to file for protection from creditors under the United States Bankruptcy Code. Here are a few things you should look for if you have the unfortunate experience of being listed as a creditor in bankruptcy.

  1. The amount of the debtor’s debts: There are limits to the amount of debt that an individual can hold in order to be an eligible debtor. For instance, currently, individuals with unsecured debt in excess of $394,725.00, are generally precluded from filing bankruptcy. That is why you should examine the debtor’s entire bankruptcy petition. While you will receive only a one-page notice of bankruptcy, you should go to the United States Bankruptcy Court’s website to view the entire bankruptcy petition. If the debtor deb which exceeds the statutory limits, there are steps you can take to object to the petition.
  2. Whether the debtor filed bankruptcy previously: The availability of protection from creditors under the United States Bankruptcy Court is not unlimited. Once you receive notice that your customer/client has filed bankruptcy, you should check the records of the United States Bankruptcy Court to determine if the debtor has filed bankruptcy in the past which may render the person ineligible to be a debtor. While there are some exceptions, generally an individual can only obtain a discharge of debts once every eight years.
  3. Exemptions: The United States Bankruptcy Code provides the debtor with “a fresh start” by relieving the individual of his debts. In exchange for relief from his creditors, the debtor must surrender assets which Congress has deemed as unnecessary to “a fresh start.” Accordingly, there are limits on the kinds, and the amounts, of property which an individual can retain in a bankruptcy proceeding. For example, a debtor is permitted to obtain a limited amount of equity in a primary residence and a motor vehicle. Likewise, a debtor can retain some household goods. As a creditor in a bankruptcy proceeding, you should carefully scrutinize the petition to determine whether the debtor possesses non-exempt assets.
  4. Fraudulent Conduct: As noted above, the Congressional intent in the Bankruptcy Code is to provide “a fresh start” to an individual who has little, if any, prospect of satisfying his debts in the ordinary course of his affairs. To that end, the Bankruptcy Code mandates that the debtor file for relief from creditors in good faith. Where the individual has engaged in criminal, fraudulent, intentionally false and/or malicious conduct prior to filing bankruptcy, the individual may be denied a discharge of his debts. Assume that as a creditor you loaned money to the debtor in reliance upon the statements made, or documents produced, in a loan application which have turned out to be untrue, then you are in a position to object to the debtor obtain a discharge of the debt upon which the false information is based.
  5. Fraudulent Transfers: A person who transfers money or assets, or who makes purchases of certain goods, in the months leading up to the filing of bankruptcy may not be a good faith debtor. In these circumstances, with the assistance of the case trustee and the Bankruptcy Court, you may be able to recover the money or assets from the third-party transferee in order for a distribution to be made to creditors.

The preceding are just a few examples of protections which are built-into the United States Bankruptcy Code to protect creditors and which illustrates that upon your receipt of a notice that your customer/client has filed bankruptcy you still may get paid.

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CASPA the Friendly Law (For Contractors)

For more than twenty years the Contractor and Subcontractor Payment Act (CASPA) has been a law in Pennsylvania providing a tool for Contractors and Subcontractors to get paid. Conflict between Owners, Prime Contractors, Subcontractors, and subs of subs is a common occurrence in the realm of construction law. CASPA provides a powerful weapon for Contractors […]

For more than twenty years the Contractor and Subcontractor Payment Act (CASPA) has been a law in Pennsylvania providing a tool for Contractors and Subcontractors to get paid. Conflict between Owners, Prime Contractors, Subcontractors, and subs of subs is a common occurrence in the realm of construction law. CASPA provides a powerful weapon for Contractors and Subcontractors whose work is performed but who do not receive payment without a bona fide dispute. On the flip side, Owners of real estate who hire construction professionals need to be careful if there are disputes when it comes time to pay the bill.

Any time one person hires another and doesn’t pay, the unpaid party can bring a lawsuit seeking payment. CASPA has long provided unpaid Contractors with additional remedies above and beyond what is available to other claimants. It allows the unpaid party to seek not only the unpaid amounts but also a penalty equal to 1% per month of the amount unpaid, 1% interest per month, and attorney’s fees.

That is, taken together, CASPA adds a total of 24% per year to the principal amount owed to Contractors and Subcontractors. That is no small thing, and well in excess of the ordinary time value of money. Additionally, the ability of Contractors and Subcontractors to seek their attorney’s fees is a powerful remedy. Ordinarily, in the American legal system, each side pays their own attorney’s fees irrespective of who ultimately prevails in the litigation. Accounting for these costs usually provides defendants with leverage in negotiating how much they might ultimately pay. By providing this remedy, CASPA puts a thumb on the scales for unpaid Contractors in these negotiations.

That being said, CASPA also provides some protections for Owners to help prevent this leverage from being used unfairly. First, an Owner is permitted to withhold payment for a “deficiency item,” defined as

Construction work which has been performed but which the Owner, the Contractor, or the inspector will not certify as being completed according to the specifications of the construction contract. Where work is not yet completed or performed improperly, the Owner can withhold payment, provided that the Owner notifies the Contractor of the deficiency within fourteen days after receiving the invoice and pays for the completed portion of the work. CASPA also provides Contractors with similar protection as to claims made by their subs.

Although CASPA has been on the books since 1994, in 2018 it was expanded and strengthened. Pennsylvania Governor Tom Wolf signed a new law that overhauled CASPA and expands the remedies available to unpaid Contractors and Subcontractors. These changes became effective as of October 10, 2018.

One primary update is that CASPA’s protections expressly cannot be waived by contract. That is, even if an Owner has the leverage to insist that a Contractor waive its CASPA rights in a written contract, that provision would not be valid or enforceable. The Contractor could still pursue, for example, the interest, penalty, and attorney’s fees remedies for unpaid work.

An additional caveat in the updated CASPA is that a Contractor or Subcontractor is expressly authorized to stop performance until payment is received. An Owner is entitled to withhold payment if the work is deficient, but now the Owner is required to provide notice regarding the deficiency which allegedly justifies nonpayment within fourteen (14) calendar days of receipt of the disputed invoice. Owners will need to ensure that they observe this provision and provide prompt notice of deficient work along with an explanation of why they are withholding payment. An Owner who fails to provide written notice may waive their right to withhold payment for the deficient work.

The updated CASPA also deals with retainage. Retainage, sometimes called retention, is a common concept in the construction industry, where a portion of the contract price is consensually withheld until the work is substantially complete, to ensure that the Contractor or Subcontractor fulfills its obligations. Under CASPA, retainage is to be paid within thirty (30) days of final acceptance of work. If not, the unpaid Contractor can seek the same interest, penalty, and fees for non-payment mentioned above.

Where a Contractor or Subcontractor submits an invoice, which contains errors or some impropriety relating to the paperwork, CASPA imposes an affirmative duty to act on the Owner or Contractor receiving that invoice. They are required to give written notice within ten (10) working days of the error in the invoice. Once notice is received, the Owner or Contractor is still required to pay the invoice by the due date.

For public works projects, CASPA will not apply, and instead, the Pennsylvania Prompt Payment Act is applicable. CASPA also does not apply to residential construction, unless the project involves simultaneous construction of seven or more units.

As a result of these changes, Contractors, Subcontractors, Owners of real estate and real estate developers more generally will want to look over their contracts and evaluate how they deal with disputes over construction work. Everyone involved in the field will do well to pay careful attention to deadlines and act promptly to give notice of deficiency items.

As with any new law, there are important details in the amendments to CASPA for Owners, Contractors, Subcontractors, and subs of subs. If you are facing a legal challenge in a construction project, it is important to act promptly and document the situation to protect your legal interests. It is often better to consult legal counsel sooner rather than later in the process so that important rights are not lost. The lawyers at Fitzpatrick Lentz & Bubba, P.C. are always available and willing to help.

 

Joshua A. Gildea is a shareholder and attorney in the Fitzpatrick Lentz & Bubba’s Litigation Group. His practice includes commercial litigation, civil litigation, bankruptcy, complex commercial matters, landlord tenant and construction matters. He also practices in the area of intellectual property law. He can be reached at jgildea@flblaw.com or 610-797-9000.

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Trademarks: Identifiers of Source

A trademark is any distinctive symbol that is used to identify and distinguish a good or service of one seller or provider from the goods and services of others.  In short, trademarks are identifiers of source.  Although the primary legal justification for trademark rights is to protect consumers from source confusion, the recognition of trademark […]

A trademark is any distinctive symbol that is used to identify and distinguish a good or service of one seller or provider from the goods and services of others.  In short, trademarks are identifiers of source.  Although the primary legal justification for trademark rights is to protect consumers from source confusion, the recognition of trademark rights also serves the secondary economic benefit of permitting providers of goods and services to develop value in their brands.

Trademark rights and registration

In the United States, trademark rights are developed through appropriate use, even in the absence of a trademark registration issued by an individual state or the United States Patent and Trademark Office (“USPTO”).  These unregistered, “common law” rights are generally enforceable against “junior” third-party marks with which there is a likelihood of consumer confusion as to source, at a minimum within those geographic regions of the country in which the trademark owner has appropriately used the mark.

However, there are many benefits associated with obtaining a registration of a trademark from the USPTO, including but not limited to: nationwide rights and recognition of the mark; shifting of the burden of proof to a potential infringer on such issues as ownership, distinctiveness, and first use dates; having a record of the registration appear in the USPTO’s publicly-searchable database, making it more likely that a later-comer will discover the prior rights and refrain from adopting a mark that would be confusingly similar with the registered mark; and the right to use the registered trademark symbol ®, which often discourages others from adopting a too-similar mark.

Subject to some caveats, so long as a mark is used continuously, legal protection for that mark will not expire.  In fact, there are marks registered with the USPTO in the 19th Century that remain in force today.  Conversely, failure to properly use a mark for a period of time—typically three years—can lead to loss of rights in that mark and leave any trademark registration vulnerable to a cancellation proceeding.  A mark owner must also take reasonable steps to “police” confusingly-similar mark usage by a third party, or else the mark owner’s legal rights may be jeopardized.

Trademark searching and selection

Every consumer is aware of the ability of a word, logo, or slogan to serve as a source identifier, but trademark rights can also result—under appropriate circumstances—from distinctive and non-functional uses of sounds, colors, packaging, product configurations, and/or a good or service’s overall “look and feel.”  In theory, any perceptible symbol that is distinctive and non-functional with respect to an associated good or service can develop trademark rights as a source identifier if properly used.

Mark selection is a critical element of any brand development strategy.  To be registrable, a mark must first be distinctive, in that it is capable of distinguishing the good or service of one party from those of other parties.  Said another way, a mark is distinctive if the “likelihood of consumer confusion” question can be answered in the negative.  A registrable mark must also be devoid of any terms that might deceive consumers with respect to the geographic origin or other qualities of the associated good or service.  Last, but certainly not least, to be registrable a mark must not be “merely descriptive” or generic of the associated good or service or any characteristic thereof.  For example, the word “Apple” may not be able to function as a mark for apple juice or an apple orchard, but is capable of functioning as a strong mark for computers and smartphones.

Although there is no legal requirement to search the availability of a mark prior to its adoption in connection with a good or service, it is invariably sound business strategy to do so.  Trademark searches typically focus on two inquiries: (1) clearance, i.e., whether a mark can be adopted in connection with a particular good or service without subjecting a business to an accusation of infringement; and (2) registrability, i.e., the likelihood that a party will be able to obtain a registration for a mark in connection with a particular good or service, taking into consideration not only third-party trademark properties but also the distinctive nature of the selected mark.  A qualified professional may be necessary to help you confidently interpret the findings of any trademark search.

 


 

James J. Aquilina is an attorney and business counselor with extensive experience in all aspects of U.S. intellectual property law, including utility and design patent, trademark, and copyright law, with emphases on rights procurement, IP portfolio development and management, rights enforcement, and licensing.  He is a graduate of Rutgers University School of Engineering and the University of Pennsylvania Law School.  He can be reached by e-mail at jamesaquilina@designip.com.

The contents of this article are solely for educational purposes and do not constitute legal advice.  Any opinion provided in this article is solely that of the author and not that of his employer or any client thereof.

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