That seems a relatively straightforward requirement.  However, as the tenant in the recent case of Avocet Industrial Estates LLP v Merol Limited and Tudor Rose International Limited [2011]EWHC 3422 (Ch) has found to its cost, that is not necessarily so.

Under the terms of the lease, interest was payable at 4% p.a. above NatWest base rate on any sums which were not duly paid, from the date the payment was due until the date of payment. More…

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provide employees with a number of key protections when the organisation in which they work is transferred from one owner (the transferor) to another (the transferee). First, TUPE provides for the automatic transfer to the transferee of the employees’ employment on the same terms and conditions as before (Regulation 4(1) of TUPE) and variations to the employees’ contracts are generally void, even if the employees agree to them (Regulation 4(4) of TUPE). Secondly, the transferee will inherit most employment-related liabilities (Regulation 4(2) of TUPE). Thirdly, any dismissal that is connected with the transfer is automatically unfair, unless it is for an “economic, technical or organisational change entailing changes in the workforce” (Regulation 7 of TUPE). Fourthly, employees have the right to be informed about the transfer and consulted about any changes envisaged by the transferee post-transfer (Regulation 13 of TUPE). More…

Social media offers agencies numerous possible revenue streams, including license fees for the use of their proprietary technology and service fees for community management of various social media outlets. In order for firms to fully reap the benefits of social media, however, they must protect their rights in contractual negotiations with their clients. Agencies also need to familiarize themselves with the legal landscape in order to avoid regulatory pitfalls. Below, l address six key areas of concern. More…

The Seventh Circuit has ruled that pharmaceutical sales representatives are covered by the Administrative exemption to the FLSA because “the core function of the representatives’ duties, the physician office visits,” requires significant discretion and independent judgment. While other courts have applied a case specific analysis to determine the applicability of the Administrative exemption in this context, the Seventh Circuit’s analysis appears to be applicable to virtually all sales representatives in the pharmaceutical industry. Indeed, without separate analyses, the Court of Appeals dismissed two distinct class actions (against Eli Lilly and Abbott Laboratories) in one fell swoop.

The exempt status of pharmaceutical sales representatives is a hotly litigated issue because pharmaceutical sales representatives do not actually consummate sales. Thus, the Second Circuit Court of Appeals has held that they are not covered by the Outside Sales exemption. Conversely, the Ninth Circuit Court of Appeals has held that, in the context of the industry, “common sense” shows that these sales representatives fall within the terms of the Outside Sales exemption. The United States Supreme Court has granted the plaintiffs’ petition to review the Ninth Circuit ruling, and is poised to resolve the conflict regarding the Outside Sales exemption.

In the event that the Outside Sales exemption is held to be inapplicable to pharmaceutical sales representatives, employers will have to rely on the Administrative exemption if they wish to defend the exempt status of their sales representatives. That defense, however, has met with mixed results.

For example, the Second Circuit Court of Appeals in In re Novartis Wage & Hour Litigation, concluded that Novartis sales representatives did not have enough independent discretion to qualify for the Administrative exemption. Conversely, in Smith v. Johnson & Johnson, the Third Circuit Court of Appeals found that the named plaintiff formulated and implemented strategies for her territory, and thus exercised sufficient independent discretion to qualify for the Administrative exemption.

The Seventh Circuit took up this issue through a consolidated opinion on two collective actions, Schaefer-LaRose v. Eli Lilly & Co. and Jirak et al. v. Abbott Laboratories Inc.  The Court of Appeals first concluded that the sales reps did “administrative” work directly related to the general business operations of their employers because “[t]he representatives before us are the public face of their employer to the most important decision-maker regarding use of their companies’ products, the prescribing physicians.”

The Seventh Circuit went on to evaluate whether the pharmaceutical sales representatives used independent discretion in “the core function of the representatives’ duties, the physician office visits.”  The Court of Appeals briefly addressed the related tasks performed outside the presence of the physicians, which it said “manifest a substantial measure of judgment.” The Seventh Circuit noted that sales representatives exercised discretion because they could choose “to see physicians not on their call plans or non-physicians who may influence prescribing patterns,” were expected to propose “comprehensive visit plans for the territories” and spent “the vast majority of their time entirely unsupervised.”

While these considerations were relevant, the Seventh Circuit placed greater emphasis on the sales representatives’ face-to-face meetings with physicians. The Court stated that “these physician interactions [are] the critical function of the job and the place in which discretion is most evident.” The Court of Appeals explained that “[i]n speaking to individual physicians, the representatives must tailor their messages to respond to the circumstances, whether those be the time or attention constraints from the physician or the concerns and objections that are voiced during a particular or previous visit.” The Seventh Circuit further noted that “[t]he representative who is unable to tailor the conversation to the time and circumstances, or to engage the physician in an intelligent conversation, is understandably not an effective representative to the professional community whose estimation of the company is key to its success.”

For those reasons, the Seventh Circuit held that the FLSA’s administrative exemption applied to pharmaceutical sales representatives (and that the applicability of the Outside Sales exemption was therefore moot). Accordingly, the Seventh Circuit Court of Appeals affirmed the summary judgment in favor of Eli Lilly and reversed the summary judgment against Abbott Laboratories.

In recent years, the Equal Employment Opportunity Commission (EEOC) has taken the aggressive approach of expanding charges it receives from one or a few individuals into larger-scale class actions in federal courts.  Last week, in EEOC v. United Road Towing, Inc., the U.S. District Court for the Northern District of Illinois declined to challenge the adequacy of the EEOC’s administrative practices, thus giving ammunition to the EEOC to continue its approach of widening litigation involving alleged discrimination.

In that case, the employer, URT, argued that the EEOC had failed to satisfy its pre-lawsuit obligations regarding charges initially brought by two disabled employees under the Americans with Disabilities Act claiming unlawful denial of reasonable accommodation, termination of employment, and refusal to rehire.  Specifically, URT contended that the EEOC added 17 plaintiffs during discovery whose claims it had failed to investigate during its administrative investigation and that its conciliation efforts were deficient because it did not disclose the number or identities of the other purported class members.

In denying URT’s motion, Judge Castillo took a hands-off approach to judicial review of the EEOC’s administrative practices.  He wrote that the court could not undertake an evaluation of the EEOC’s investigatory practices because doing so would stray from the validity and merit of the actual claims.  As to conciliation, Judge Castillo concluded that the EEOC’s determination letter stating that a class of members had been subjected to violations and its identification of those violations were sufficient triggering of and engagement in conciliation, even without including the specific names and quantity of purported members.

Although other courts have reached different conclusions faced with similar facts, this ruling emboldens the EEOC to continue to decline or neglect to investigate the experiences of each purported class member to the same extent it investigates those of named charging parties.  Moreover, it means the EEOC has authority for continuing its pre-lawsuit practice of pointing to little specificity and vague details in support of requested monetary relief during conciliation.

Hospitality employers should understand that class actions – whether privately or agency-initiated, whether in the discrimination or wage-hour context – continue to be an epidemic from which they should protect themselves to the fullest extent possible.  While it is not possible for employers to ensure that disabled employees will never file charges, developing and following policies that engage in the interactive process and constructively discuss the possibility of reasonable accommodations is vital to minimizing the possibility of having to defend against would-be class actions.  Similarly, in order to reduce the possibility of facing class action lawsuits on other bases, hospitality employers should regularly monitor their policies, pay rates, benefits, and other company practices to ensure that they are consistently and uniformly applied to similarly situated employees.

The 30 year-old employee joined the company as a wool sorter, a job that did not involve any working with machinery.

The following month he was told to clean debris from the trays of a machine that untangles woollen fibres – despite the fact he had no training or experience for handling machines at the factory.

As he attempted to carry out the task, his hand was dragged into the unguarded machine and became stuck. His glove was shredded and he started to lose feeling in his hand, before eventually managing to pull it free.

The worker’s hand was badly cut leaving him with scarring from the tip of his right index finger to mid-forearm; tendon, nerve and vein damage resulting in the loss of movement to two fingers; and loss of webbing between two fingers.

HSE found the employee had no experience or training in the use of machinery and had been given none by the company. Also, there had been no measures to protect workers against access to dangerous moving parts and no system of safe work to follow when cleaning machinery.

The company pleaded guilty to breaching Section 2(1) of the Health and Safety at Work etc Act 1974 and was fined £5,000 and ordered to pay £2,897.35 in costs.

Eight UK workers were killed as a result of incidents involving contact with moving machinery during 2010/11, and more than 1,000 others were seriously injured.

Mr Loughton is asking more big employers to give foster carers the same rights to flexible working and time off, as to any other parent. He wants more employers to follow in the footsteps of Tesco and O2, which have introduced “foster family friendly” policies.

These include allowing them to take five days off for pre-approval training; flexible working to help foster children settle in at home; shift swapping schemes to help foster carers juggle commitments; and having the same access to emergency compassionate leave as any parents with their own children do.

According to Mr Loughton, the government will make this easier with the forthcoming Children and Families Bill, which will expand flexible working and shared parental leave.

We anticipate that the pace of H-1B submissions will quicken now because, among other reasons, foreign students working in F-1 Optional Practical Training status are receiving degrees and this allows their employers to sponsor them for the H-1B classification. For this reason, we strongly advise employers to identify and file immediately any petitions subject to the H-1B Cap. This also includes L-1B employees who may need to switch to H-1B status to extend their authorized stay due to delays in the green card process. Any foreign national candidates who do not make it under the 2013 H-1B Cap may not be able to start work, or continue working, until October 1, 2013–or later!

For more information, or if you have questions regarding how this might affect you, your employees, or your organization, please contact one of the following members of the Immigration Law Group at Epstein Becker Green:

The controversy among the courts over whether the Absolute Priority Rule contained in § 1129(b)(2)(B)(ii) applies in individual chapter 11 cases.  The Ninth Circuit Bankruptcy Appellate Panel has now entered the fray with its opinion in In re Friedman, 2012 WL 911545 (9^th Cir. BAP March 19, 2012), finding that it doesn’t.  The Bankruptcy Court for the Southern District of Texas in In re Lively, 2012 WL 959286 (Bankr. S.D. Tex. March 21, 2012), found that it does apply and in noting the stark differences of opinion on the issue has certified the question for a direct appeal to the United States Court of Appeals for the Fifth Circuit.

Both courts concurred starting out that the statute should be interpreted according to its plain language.  However, they disagreed on what the plain language of the statute was. 

Three provisions of the Bankruptcy Code played a role in both courts’ analysis:  §§ 541, 1115 and 1129.  The courts agreed on the plain language of § 541 and its inclusion of property in an individual chapter 11 debtor’s estate as of the commencement of the case, but disagreed in their interpretations of the plain language of §§ 1115 and 1129.

Section 1115 of the Code adds to the estate of an individual chapter 11 debtor by providing as follows:

“(a) In a case in which the debtor is an individual, property of the estate includes, in addition to the property specified in section 541—

(1)    All property of the kind specified in section 541 that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13, whichever occurs first; and

(2)    Earnings from services performed by the debtor after the commencement of the case but before the case is closed, dismissed or converted to a case under chapter 7, 12, or 13, whichever occurs first.”

Section 1129(b)(2)(B)(ii) provides with respect to a “cram down” confirmation against a dissenting class of unsecured creditors who will be paid less than one hundred percent of their allowed claims, that a court may still confirm the plan if “the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property, except that in a case in which the debtor is an individual, the debtor may retain property included in the estate under section 1115, subject to the requirements of subsection (a)(14) of this section.

The courts digressed on their interpretation of § 1129(b)(2)(B)(ii) and whether, for purposes of confirmation, the phrase “property included in the estate under section 1115” referred to all property described in § 541 and that property added to the estate in § 1115(a), or whether the phrase referred only to that property added to the estate under § 1115(a).  Under the first interpretation (the “broad” interpretation), an individual debtor may obtain a cram down confirmation of a plan that pays creditors the debtor’s projected disposable income during the life of the plan, but less than the full amount creditors are owed, and still retain his or her pre-petition and post-petition assets.  Under the second interpretation (the “narrow” interpretation), an individual debtor may receive a cram down confirmation of such a plan only by divesting himself or herself of all pre-petition non-exempt assets and may only keep his or her assets acquired post-petition.

The Ninth Circuit BAP in Friedman adopted the broad interpretation, concluding that the Absolute Priority Rule does not apply to individual chapter 11 debtors.[1]  The court reasoned that using a broad interpretation of § 1115, along with the Code’s requirement that an individual chapter 11 debtor pay over his projected disposable income for the life of the plan and the delay of the issuance of the debtor’s discharge until all plan payments furthered the policies of the Code for the rehabilitiation of debtors in a way that enabled creditors to maximize payments on their debts.  The Ninth Circuit BAP found it illogical to interpret § 1129(b)(2)(B)(ii) in a way that would remove the debtor’s means of producing disposable income.  For example, in Friedman, the debtors’ real property assets were foreclosed on by secured creditors during the case, their personal property assets were mainly exempt, and their means for paying creditors was through their work for a limited liability company of which the debtors were the sole members.  Requiring the debtors to give up their ownership in this limited liability company in order to obtain confirmation would, in fact, have required removal of the debtors’ sole means to provide payment to creditors.

The Bankruptcy Court in Lively came to the opposite conclusion, agreeing with those courts which have adopted the narrow approach, concluding that an individual chapter 11 debtor must give up all pre-petition assets in order to obtain confirmation under § 1129(b)(2)(B)(ii) of a plan that pays creditors less than the full amount of their claims.[2]  The Bankruptcy Court in Lively held that the language of § 1119(b)(2)(B)(ii) was unambiguous in providing that only that property added by § 1115(a) could be retained by a debtor in a cram down context.  The court reasoned that the broad interpretation of the statute, which already allows an individual debtor to retain the economic benefits received during the life of the plan, through either increases in income or economizing on his or her living expenses, went too far in the balancing of the relative policies of rehabilitation of debtors and maximization of return to creditors.

The courts came to opposite conclusions, even though both analyzed the statute under its “plain” language.  Creditors with claims against individual debtors should stayed tuned for further opinions on this issue.