On April 26, 2012, the California Fourth Appellate District in San Diego ruled that the anti-retaliation provision of the Reporting by School Employees of Improper Governmental Activities Act does not exempt management employees from liability, where those employees act in a supervisory capacity when they retaliate (Hartnett v Crosier).
Rodger Hartnett worked as a claims coordinator in the San Diego County Office of Education's risk management department. He was discharged for incompetence, insubordination, and dishonesty. He believed that he was actually fired in retaliation for disclosing that several colleagues referred the Education Office's legal business to friends and family in exchange for unlawful benefits, including discounted personal legal services. So, he sued them individually for retaliation in violation of Education Code §44113(a). He also sought punitive damages and attorney fees under Education Code §44114(c).
This Act bars "an employee" from using his or her official position to retaliate against "any person" to deter the person from making a disclosure of wrongdoing covered by the Act, which includes public expenditures.
At issue was whether the individual defendants were "employees" such that the statute prohibited their alleged retaliatory acts and permitted a civil action against them. "Employee" means a person employed by a public school employer except, among others, management employees. Management employees are those with significant responsibilities for formulating policies or administering programs.
The individuals prevailed initially, when a judge concluded the Act did not apply to them because they were management employees.
Jack's business relationship with his only client turns personal while Olivia struggles to find any clients at all.
In this episode of Leap Year, newly laid-off Jack, Aaron, Derek, Olivia and Bryn are recruited to participate in a mysterious business contest with a $500,000 prize.
As Jack, Bryn, Olivia, Derek and Aaron face uncertainty about their future, Gemini Corp CEO, Andy Corvell (Craig Bierko) calls an all-hands meeting. With lay-offs looming, tensions rise and the group wonders, if they do get fired — what's next?
Hiscox Presents: A Big Series About Small Business
Season Two of Hiscox's award-winning small business series Leap Year begins on June 18, 2012. Take the time now to start catching up on Season One. In this episode, rumored layoffs overshadow Aaron's surprise 30th birthday party as Jack tries to convince his friends and fellow coworkers Olivia and, Aaron's brother, Derek that being laid-off could be an entrepreneurial blessing in disguise.
As seen in the chart below, the number of bank failures in 2011 dropped from the highs of 2010 and 2009.
But the number of bank failures in 2011 is still significantly greater than the relatively low numbers prior to 2008. In recent years, the Federal Deposit Insurance Corporation (FDIC) has authorized suits in connection with 54 failed institutions, naming 469 individuals for Directors and Officers (D&O) liability with damage claims of at least $8 billion. This includes 27 filed D&O lawsuits naming 222 former directors and officers. However, the FDIC doesn’t file an action against the directors and officers of a bank just because the bank fails. In fact, the FDIC only brought claims against the directors and officers of 24% of the bank failures from 1985 to 1992.
Statute Of Limitations
When they act as a receiver, the FDIC has three years from the time a bank is closed to file suits for tort claims and six years to file breach-of-contract claims. If there is a longer statute of limitations permitted in a specific state, the longer statute is followed. Prior to bringing an action, the FDIC conducts an investigation into the causes of the failure. The investigations are generally completed within the first 18 months following the closure of the institution.
The FDIC will often seek a settlement prior to filing the claim in order to manage expenses. Available assets and potential insurance proceeds are considered when the FDIC contemplates filing suit and seeking damages.
|FDIC Suits||Authorized D&O Defendants||Damage Claims ($ millions)*|
|Authorized in 2009||11||$366|
|Authorized in 2010||98||$2,123|
|Authorized in 2011||264||$5,110|
|Authorized in Q1 2012||96||$401.1|
* Losses typically exceed these amounts and may result in higher damage claims in filed lawsuits. Recovery on these claims is dependent upon available recovery sources, such as insurance and personal assets, and competing claims. http://www.fdic.gov/bank/individual/failed/pls/index.html
For many families, life insurance death benefits have become one of the four major asset classes in their financial portfolios.
Unfortunately, life insurance has been treated as a stagnant asset — once purchased, it is only given cursory reviews.
For the affluent family, this is not only ineffective, but also financially imprudent.
A portfolio of life insurance assets needs a fiduciary level review. Families deploy capital into their life insurance strategies and have the expectation of strong future performance.
As with other family financial assets, many factors contribute to the opportunity for "better or worse than expected" performance.
In the absence of regularly scheduled reviews, an under-performing policy may go undetected, and to a point where "rehabilitation" of that policy becomes problematic.
Creating the opportunity for better performance lies in the professional management of the life insurance portfolio and a planned review strategy.
Successful life insurance portfolios are managed to the specific goals and expectations of the client family.
These are found in the family's insurance policy statement, which outlines what the family expects to accomplish with their life insurance. This is of particular importance when life insurance policies are owned in a trust vehicle. Trustees have a duty to exercise prudent fiduciary responsibility in managing the assets of the trust. This includes understanding and evaluating life insurance assets.
Unfortunately, a large number of trustees (particularly in the family and friends arena) do not have stated guidelines and procedures for managing and maintaining life insurance assets.
This not only leads to under-performing policies, but also missed opportunities to increase death benefits, reduce premiums and improve overall performance of the life insurance assets.
A worker working in an underground hole at a construction site in Milpitas, California was the victim of an accident where soil and loose dirt piled on top of him. The man was essentially buried alive. Co-workers who were on the scene witnessed this tragic death but were unable to help him.1
The police of Milpitas and Cal/OSHA are currently investigating this shoring accident. Did Milpitas and the company train their workers on trenching and shoring standards, as required by OSHA? Was this accident preventable? Was it an act of negligence? The employer of the deceased worker is now eligible for numerous fines, as well as the atrocity of killing a worker onsite.
Do the workers at your site understand the best practices and codes required by the Occupational Safety & Health Administration to do their job safely? If they were injured, would you be able to prove that your company did everything to prevent that injury from happening? Are you assured that your company is completing all necessary protocols to prevent an injury from occurring? Would your company be able to stand up in court should a worker get injured? And is your company doing everything to prevent the injury and possible death of somebody working for your company?
There are many aspects to these questions and many preventative measures to maintain at every worksite. This is the first of several articles that will divulge ways to avoid workers compensation costs, and more importantly, the death of somebody in the workplace.
Risk managers often point to something called the Safety Pyramid to understand and explain workplace injuries. This is a triangle-shaped diagram that shows the amount of incidents that usually coincide with negligible acts. The theory is that if one fatality occurs (representing the top of the pyramid), there are numerous injuries (as shown in the bottom of the pyramid) that can be prevented.
These preventable injuries include lost time from work, near-misses and at-risk behaviors. Even if your company has not suffered a death or had an employee miss work due to injury, there are still factors that may prove your company to be at risk of fines. In addition a worker can complain to the Occupational Safety & Health Administration and other governmental bodies about workplace conditions which can put a company at risk.
One factor that is addressed by every OSHA visit is whether workers have been trained to perform their jobs safely. It is important to educate all workers to comply with regulatory standards. This may mean training workers in lockout/tagout procedures, or something as simple as sexual harassment laws. In any industry, there are regulations in place by OSHA, HIIPA, DOT, EEOC, and other governmental bodies that apply rules and regulations that your company must abide by according to law. Knowing the regulations that are pertinent to your workplace and training all workers exposed to potential hazards is essential for any company.
Yesterday, in a case that affects virtually every California employer, the state Supreme Court published its eagerly anticipated decision in Brinker Restaurant Corporation v. Superior Court. Brinker, which owns Chili's and Romano's Macaroni Grills, was sued by a proposed class of hourly employees who claimed that restaurant managers pressured them to skip their breaks by failing to adequately staff the restaurants or by threatening to cut or change their hours.
The case finally resolves a fundamental question of whether an employer must simply "provide" non-exempt employees with a meal period in which they are relieved of all work duties, or whether management must go the next step and "ensure" that everyone actually ceases all work. The court's ruling favors employers on this point. But, while the business community applauded (even cheered) the result, the court still allowed a large group of non union workers to sue as a class for damages for what they allege was widespread coercive practices that prevented them from taking their legally mandated 10-minute rest periods.
Meal And Rest Break Fundamentals
Employers are required to provide every non exempt worker with a 30-minute meal period each work day. A second meal break applies after the employee works ten hours that day. Meal periods are considered "on duty" and compensable work time unless employees are relieved of all duty and are permitted to leave the work premises. On-duty meal periods, however, are only permissible when (1) the nature of the work prevents an employee from being relieved of all duty (such as a solo security guard), and (2) the employer and employee have agreed in writing to an on-the-job meal period.
Every non exempt employee is also entitled to take two 10-minute rest periods (one every four hours). The rest period should run at least 10 consecutive minutes for each four-hour work period or major fraction thereof (any period longer than two hours is considered a major fraction of four hours). The rest period must be compensated.
Missed Meal And Break Periods Carry Significant Penalties
Labor Code §226.7 assesses a penalty of one hour of pay at the employee's regular rate for each work day that the meal or rest period isn't taken. This is called a "premium payment."
Because of these significant penalties, and the potential for recovering "reasonable" attorneys' fees, California employers faced a barrage of class action lawsuits and individual claims by employees seeking penalties and other damages for allegedly skipping meal and/or rest periods. Often, the employees claimed that company policies either failed to "provide" for these mandated rest and meal periods at all or were haphazardly enforced. Still others claimed their supervisors flagrantly violated the rules by urging them to work through their breaks or outright refusing to let them leave their workstations at specified breaks during their shifts.
When it comes to complying with government mandates, most of us wait until the last minute. Renewing our driver's license and paying taxes are two examples that come easily to mind. So if we live in states like Missouri, Kansas, Georgia and New Jersey, we might be inclined to wait the required 21 to 30 days to report a workers' compensation claim.
That would be a mistake.
Increased Claim Costs
Many people don't realize that with every passing day, the cost of a non-reported injury goes higher and higher. In a 2001 study titled First Report of Injury: Impact on Claims Cost, Anne Engleman and Patrick Vice found that with each week of not reporting a claim, the expenses increase dramatically.
The following table shows the increase in claim expenses compared to reporting within one week.
|Reporting (Lag) Time||Expense Increase|
Let's put real numbers to that. According to the Workers' Compensation Insurance Rating Bureau of California, the average cost of a workers' comp indemnity claim in California for 2010 was $65,000. Here's what happens to that claim for each week you delay reporting it:
|Reporting (Lag) Time||Cost Of Claim Due To Delay|
I don't know about you, but saving over $11,000 by reporting an injury within seven days instead of 14 is well worth it.