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HR Matters
HR Matters - April 2007 - Volume XI, Issue 120
April 27, 2007
LABOR & EMPLOYMENT NEWS
Employer Not Responsible for Former Employee's Criminal Activity. A customer sued the owner of a moving company for “negligent hiring” and “negligent retention” when one of the owner’s former employees, with four accomplices, dragged the customer from his house, bound him and his wife, stole valuables from his house, and then drove away with his car. The former employee had been involved in moving the customer, but the moving company had fired him two months before the robbery. The former employee’s brother worked for the moving company at the time of the robbery, but had not participated in moving the customer. The customer alleged that the moving company failed to exercise reasonable care in hiring and retaining the former employee and his brother. In Ohio, an employer can be, in certain circumstances, held liable for harm caused by an employee where the employer chooses to employ a person who has a past history of criminal, tortious, or otherwise dangerous conduct about which the employer knew or could have discovered through reasonable investigation. In this case, the former employee had been fired two months before the robbery, and it was not foreseeable that the former employee would rob a customer; therefore, the court held the moving company was not liable. (Abrams v. Worthington)
Termination for Complaining to Customer Was Not Retaliation. A federal district court recently held that an employer, who terminated an employee for complaining to a customer about not getting overtime pay, did not violate the Fair Labor Standard Act’s anti-retaliation provisions. The employee had a five-year history of constantly complaining that he was entitled to overtime pay for hours he worked in excess of forty hours per week. In response to the employee’s repeated complaints about overtime pay, the employer informed him that he was an exempt employee. After the employer instructed the employee to stop complaining about the issue, the employee began complaining to a customer, a government contractor, by emailing and calling the customer. When the employer learned about the complaints to the customer, it terminated the employee. The employee then filed a retaliation lawsuit. In ruling for the employer, the court noted that the employee’s complaints to the customer were “unreasonable” and that the employee’s actions “went too far.” (Burns v. Blackhawk Management Corp.)
IMMIGRATION NEWS
H-1B Cap Reached, But Other Visa Options Available. The U.S. Citizen and Immigration Services announced recently that the 65,000 cap on H-1B visas was reached on the very first day applications could be filed for fiscal year 2008. Exempt from the 65,000 cap are 20,000 visas available for foreign nationals with a Masters Degree or higher from a university in the U.S., and that cap has not yet been reached. In addition, other options include:
- H-1B1 visas for Chile and Singapore Nationals (cap applies, but not always used);
- TN visas for Citizens of Mexico and Canada;
- L-1 visas for Executives or Managers of foreign companies with a qualifying corporate relationship to a U.S. company;
- E-1 and E-2 visas for Investors; and
- E-3 visas for Australian Nationals.
Should your human resources needs involve non-U.S. workers, call us and we will be happy to discuss these options with you.
WORKPLACE HEALTH & SAFETY NEWS
Workers’ Compensation Claimant Entitled to Benefits from Date of MRI. An Ohio Court of Appeals recently held that a claimant was entitled to temporary total disability benefits (“TTD”) from the date he had a MRI, which was the first evidence of what was eventually ruled an additional allowed condition. The claimant injured his foot in November 2000 and received TTD. In April of 2003, claimant reached “maximum medical improvement” for his initially allowed conditions, and his TTD was terminated. On September 6, 2003, a MRI revealed a disc herniation. In September of 2004, a Staff Hearing Officer (“SHO”) amended the claim based on the MRI and awarded TTD commencing July 7, 2004. The claimant appealed for an earlier start date for his TTD. The court ordered the Industrial Commission to amend the SHO order to start TTD as of September 6, 2003 because it was undeniable that the herniation existed as early as that date. (State ex. rel. Whitt v. AMD Fabricators, Inc.)
EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION
Final 409A Regulation Issued – Nonqualified Plans Required to be Amended. The Treasury released final 409A regulations this month. Internal Revenue Code §409A applies to the deferral of compensation whether the deferral occurs through a non-qualified plan, employment agreement, stock option plan, severance plan, bonus plan or other arrangement - written or unwritten - that involves the deferral of compensation. These types of plans will need to be reviewed for compliance with the new rules, and likely need amending. The final regulations are voluminous, but generally follow the rules provided in the proposed regulations issued in September 2005. However, the final regulations do include some revisions and additional guidance in response to comments provided on the proposed regulations. The final regulations apply beginning January 1, 2008. Until then, employers remain subject to the current “good faith compliance” standard. All programs that are subject to Section 409A will have to be amended, to the extent necessary, to come into compliance with the requirements by December 31, 2007. The transition rules that permit changes in existing distribution elections will also expire on December 31, 2007. We will be discussing the specifics of key changes in these regulations in future editions of HR Matters . In the meantime, we suggest you contact a benefits attorney if you have not yet had your existing compensation plans, policies and agreements reviewed for 409A implications.
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.