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Cypen & Cypen
OCTOBER 8, 2009

Stephen H. Cypen, Esq., Editor

1.            SURVEY SHOWS RISE IN EMPLOYEE CONFIDENCE:   Employees may think the worst is over, as several key measures of employee confidence appear to be rising, according to the third-quarter Employment Confidence Survey.  In the third quarter, employees reported fewer layoffs and actions that reduced employee compensation at their companies than in the prior two quarters, and employees revealed high rates of confidence and optimism related to future layoffs, pay/bonuses, company outlook and their ability to get rehired.  But, employers take note:  should the economy and unemployment rates return to pre-recession levels, employees reveal they expect far more than the status quo, which could have significant implications on company bottom lines, employee morale and turnover: 

  • 57% expect a raise, bonus or promotion 
  • 35% expect hiring freeze to be lifted or more employees to be hired in their department 
  • 24% expect previously reduced health benefits and perks to be restored 
  • 19% expect to look for a new job

The quarterly survey measures four key indicators of employee confidence in the areas of job security, salary expectations, rehire probability and company outlook.  In addition, the survey tracks recent employer actions, as well as concessions employees are willing to take to keep their jobs. 

 2. NEW RULES PROTECT PATIENTS’ GENETIC INFORMATION:  Individuals’ genetic information will have greater protections through new regulations issued by the U.S. Departments of Health and Human Services, Labor and the Treasury.  The interim final rule will help ensure that genetic information is not used adversely in determining health care coverage, and will encourage more individuals to participate in genetic testing, which can help better identify and prevent certain illnesses.  The interim final rule with request for comments and the notice of proposed rulemaking implement Title I of the Genetic Information Nondiscrimination Act of 2008.  Under GINA and the interim final rule, group health plans and issuers in the group market cannot: increase premiums for the group based on results of one enrollee's genetic information; deny enrollment; impose preexisting condition exclusions; or do other forms of underwriting based on genetic information.  In the individual health insurance market, GINA prohibits issuers from using genetic information to deny coverage, raise premiums or impose pre-existing condition exclusions.  Further, under GINA and the new interim final regulations, group health plans and health insurance issuers in both the group and individual markets cannot request, require or buy genetic information for underwriting purposes or prior to and in connection with enrollment.  Finally, plans and issuers are generally prohibited from asking individuals or family members to undergo a genetic test.  The proposed rule modifies the HIPAA Privacy Rule pursuant to GINA Title I to clarify that genetic information is health information and to prohibit use and disclosure of genetic information by covered health plans for eligibility determinations, premium computations, applications of any pre-existing condition exclusions and any other activities related to  creation, renewal or replacement of a contract of health insurance or health benefits.  Readers can view the regulations at Pl.pdf  

 3. VERMONT STATUTES IMPOSED INDIVIDUAL LIABILITY AGAINST EMPLOYEES FOR DISCRIMINATION:  Payne appealed from a superior court order granting summary judgment to Cline on her claims, ruling he was not personally liable to Payne for acts of discrimination and retaliation under the Vermont Fair Employment Practices Act and Workers’ Compensation Act.  The central issues on appeal to the Vermont Supreme Court were whether the acts provided a right of action against a coemployee or supervisor in an individual capacity, rather than imposing direct and vicarious liability only on employers for unlawful discrimination by their supervisors and employees.  The lower court concluded that the acts provide a right of action against employers alone, and not against individual employees or supervisors.  The Vermont high court reversed.  Under the Vermont Fair Employment Practices Act, the term employer refers to any individual and any agent of such employer.  Although the court’s construction of VFEPA, patterned on Title VII of the federal Civil Rights Act, is often guided by federal courts’ interpretation of Title VII, here the court departed therefrom because the federal analysis was particularly unpersuasive.  VFEPA, unlike Title VII, does not limit its remedies to relief typically available just from employers rather than individuals working for the same company.  And as under VFEPA, the Workers’ Compensation Act allows an employee to be sued as an individual -- consistent with the state legislature’s approach to personal liability for violation of  VFEPA.  Payne v. U.S. Airways, Inc., Case No. 2008-128 (VT, September 25, 2009). 

 4. IN EQUITABLE DISTRIBUTION, EX-SPOUSE’S SICK LEAVE/VACATION SHOULD BE PRESENT-VALUED IN ACCORDANCE WITH EMPLOYMENT AGREEMENT:  The former husband appealed a final judgment of dissolution of marriage wherein the trial court equitably distributed various assets, particularly based upon valuations of his accrued sick leave and unused vacation time.  Because the trial court erred in its valuation of the former-husband's such benefits, the appellate court reversed and remanded for entry of an amended final judgment only as to those assets.  The former wife suggested that unused sick leave be valued by taking into account all of the former husband's accrued sick leave, while the former husband argued that the method set forth in his employment contract had to be precisely followed without any variation in order to achieve a proper valuation of his unused sick leave and vacation time.  He also argued that, because he did not currently have the right to collect it, vacation time was not subject to immediate payout and it was speculative to assume that he might have that amount of credit at time he left his employment at some point in the future and thus it was not reasonable to expect him to finance a current payout to the former wife of something he might not ever receive.   He made the same argument as to sick leave banked at time of filing the petition, as payout for such sick leave was only available at retirement and there was no meaningful way to predict such value.  (The differences between the methods of valuation were significant:  A total of $67,000 using the wife’s method versus $18,000 using the husband’s.)  However, because the former husband's employment contract provides guidance on the valuation method for both sick leave and vacation time, it cannot be said that a present valuation would be so speculative so as to be arbitrary.  The appellate court concluded that it was in the best interest of the parties to utilize the method of present valuation set forth in the employment contract and equitably to distribute assets now as opposed to waiting until the former husband terminated employment.   (It seems that the court could have done the math, and directed a specific number; our best guess is the number is about $40,000.)  Dye v. Dye, 34 Fla. L. Weekly D2017 (Fla. 2d DCA, October 2, 2009). 

 5. PREPAID COLLEGE SAVINGS PLANS MIGHT NOT COVER EVERYTHING:   In the last two decades, more than a million families around the country have invested in state funds that pledged to cover cost of attending their state’s public colleges and universities, regardless of how much tuition increased.  But in the last year, according to the New York Times, the stock market slump and rising college costs have combined to drive all but two of the nation’s 18 such funds, known as prepaid college savings plans, into the red, jeopardizing those pledges.  The funds were first proposed 23 years ago in Michigan as a fail-safe investment tool.  They were quickly adopted by other states after 1996, when Congress allowed them to be tax-deferred under Section 529 of the Internal Revenue Code.  In 2001, Congress expanded the law to make all qualified educational disbursements tax-free.  As a result, the 529 prepaid funds -- not to be confused with 529 college savings plans that do not promise a specific return -- grew into financial powerhouses, even though 7 of the 18 funds have closed to new investments over the years.  All 18 state prepaid plans differ slightly, but most sell contracts or tuition credits that establish how much someone will pay in now to receive the certain return in the future based on projected in-state public university tuition.  If, in the end, students decide not to go to a state school, they can use the money at other schools, although the amount is likely to fall short of the full cost of tuition.  Between them, the 18 state funds serve nearly 1.6 million families and hold $23.8 Billion in assets, ranging from Tennessee’s $80 Million fund serving 9,700 families to Florida’s massive $8.7 Billion fund serving 850,000 families.  All of funds except Florida’s and Colorado’s now have an actuarial deficit, meaning they do not have enough money to pay all of their future college tuition obligations.  Most are only  80 percent to 90 percent funded.  Even Florida’s program could be in for tough times.  The state has avoided trouble because 90 percent of its assets are in fixed income investments, unlike other funds with as high as 70 percent of assets in the stock market, and it has enjoyed very low tuition increases.  But, for the first time, the Florida Legislature  has allowed public universities to raise tuition by up to 15 percent a year for the next five years -- much greater than the 6.5 percent average the fund has counted on in the last two decades.  Clearly, Florida will not be able to keep up with 15 percent tuition inflation, based upon its current asset allocation. 

 6. TEN DATING RULES THAT CAN ALSO HELP YOU IN A JOB INTERVIEW:   In this economic climate, job seekers have to bring their "A" game to every interview.  If you botch your initial encounter with a recruiter or human resources director, you might not get another opportunity for months, if at all.  Surprisingly, rules for succeeding in the dating world and in the job market have more in common than you might think.  By reviewing some basic dating protocol, anyone can improve prospects of landing his dream job: 

  • Dating Rule #1:  Look Your Best.  In the dating world, appearance counts.  Research shows that men decide within the first five minutes whether they want to date a woman again.  A Harvard Business School study found that the decision not to hire happens in the first few seconds of an interview.
  • Dating Rule #2:  Display Confidence.  Looks are not everything.  However, poise is critical in job interviews.  Display it by how you dress, carry yourself, meet the interviewer's eye, shake the interviewer's hand, speak, smile and answer questions. 
  • Dating Rule # 3: Be Interested and Enthusiastic.  Dates go more smoothly when you are genuinely interested and enthusiastic about your partner, asking questions and listening intently to their answers.  In an interview, the successful candidate displays informed interest in the specific company where he is interviewing and the position for which he is being considered.
  • Dating Rule #4: Be a Mensch.  Mensch is Yiddish for someone who is good, kind, decent and honorable.  On the job, a mensch works hard at his own tasks, but is also willing to work late or on weekends to get the job done, and does so with a smile. 
  • Dating Rule #5: Play it Cool.  Even if you have not been on a date since seventh grade, you have to play it cool when you are out with the opposite sex.  Nothing turns off a prospective suitor like desperation.  If you show you will take any job, the interviewer may fear you will leave as soon as a better opportunity comes along. 
  • Dating Rule #6: Don't Badmouth the Ex.  Whether you are reeling from a bad breakup or recently divorced, it is never a good idea to malign your ex to new romantic prospects.  Similarly, one of the cardinal rules of interviewing is never to badmouth your former employers, even if invited to do so by the interviewer. 
  • Dating Rule #7: Be Prepared.  In the era of Google, LinkedIn and other social networking sites, you can learn much about your date before you meet.  Researching the company and the people with whom you will be interviewing beforehand will also help you shine on a job interview. 
  • Dating Rule # 8:  Develop Your Elevator Pitch and then Some.  On the singles scene, it is helpful to develop an "elevator pitch," a short, memorable statement about yourself that takes the time of an average elevator ride to deliver.  Developing your elevator pitch will also help you sell yourself in a job interview.  
  • Dating Rule # 9: Practice Answering Tough Questions.  On dates, you will be asked hard questions, like why your last relationship or marriage ended, why your kid is in drug rehab or what your career goals are.  On a job interview, the interviewer will also probe.  He might wonder why you were laid off or why you had so many jobs in so few years. 
  • Dating Rule #10:  Mind Your Manners.  On a date, nothing can kill the mood faster than someone who is rude to the wait staff, arrives late, has bad table manners, texts during the meal, makes ethnic/racial jokes or makes an etiquette gaffe during the date.  The same goes for a job interview.  Bad manners should be the last thing between you and the perfect interview. 

The author is managing director of an employment firm that focuses on placing attorneys with corporations and universities. 

 7. AN OLD FARMER’S ADVICE:  Sometimes you get, and sometimes you get got.

 8.            IDIOSYNCRASIES OF OUR LANGUAGE:  How do they get deer to cross the road only at those yellow road signs? 

 9. QUOTE OF THE WEEK:  “There are no rewards or punishments -- only consequences.”  William Inge

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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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