Sue Maslow has been named Vice Chair of the ABA Subcommittee of the Business Law Section Drafting Human Rights Protections in Supply Contracts. Ms. Maslow, a highly experienced business and transactional attorney, and a founding partner of the firm, is well versed in this rapidly developing and evolving area of the law. A number of high profile cases in recent years have illustrated the potential for serious financial and reputational consequences to multinational companies who disregard initiatives in the United Kingdom, France, the Netherlands and California, and fail to consider and understand the relevance of anti-forced labor and minor labor laws in their international transactions.
Attention Employers: Working Families Flexibility Act Contemplates Changes to FLSA Overtime Rules
Written by Patricia Collins
By Patricia Collins, Esquire
On May 2, 2017, the House passed the Working Families Flexibility Act. The purpose of the Act is to give employees flexibility in how they choose to be paid for overtime: in wages or in compensatory time off. The Act crystallizes a tension I see often in my representation of employers.
Presently, the Fair Labor Standards Act (“FLSA”) requires employers to pay nonexempt employees overtime compensation for work hours in excess of 40 in a workweek. Employers cannot compensate employees for those overtime hours in compensatory time off (“comp time”). Such a policy violates the FLSA, exposing the employer to liability for the unpaid overtime hours as well as penalties and attorney’s fees.
The FLSA prohibition against payment in comp time is intended to protect employees from abusive overtime demands by employers. The statutory obligation to pay additional wages for hours over forty in a workweek, so the argument goes, forces the employer to base the decision to require overtime hours on business and financial considerations. The FLSA’s ban on comp time legislates a policy determination that offering comp time will not protect employees from abusive demands by employers.
Republicans this week argued otherwise. They argue that permitting employees to take comp time rather than payment for overtime work gives employees flexibility. Democrats who opposed the bill countered that the Act’s provision allowing employers the final say does not adequately protect employees.
Practically, the Act sits at the tipping point of many competing considerations: employers want to establish policies that comply with the law, protect the business, and benefit employees. Employees want flexibility, but they also need to be paid for their work. The reality is that banked comp time can be a liability for employers because there are jobs for which attendance is extremely important, and unscheduled or unpredictable time is off is sometimes expensive or interferes with the progress of work. Further, employees might not be free to use that comp time in the manner they would like if it interferes with the employer’s business. Most employers offer paid time off in a set amount, in order to create predictability as to an employee’s attendance. While this proposed rule might create flexibility and reduce overtime costs, I do wonder whether it is really a savings in the long run.
It will be interesting to see how the Senate balances these concerns, and whether employers will create policies that allow comp time. The bill now goes to the Senate – no word yet on whether they will vote on it. Stay tuned!
Saturday, May 6th, you can support Bucks County Opportunity Council, a great local organization whose mission is to reduce poverty and partner with our community to promote economic self-sufficiency. Antheil Maslow & MacMinn are proud to sponsor this event, please consider attending and supporting this very effective organization and the work they do.
Changing Lives - Frolic on the Farm
A benefit to move people from poverty to self-sufficiency
May 6, 2017 - 6 pm to 10 pm
Glen Oaks Farm
6871 Upper York Road, New Hope, PA 18963
To purchase tickets - Changing Lives
For more information about the event, contact Joe Cuozzo at 215-345-8175 x 204 or jcuozzo@bcoc.org.
Pennsylvania Superior Court Looks Favorably on Disfavored Restrictive Covenant
Written by Patricia Collins
By Patricia Collins
Reprinted with permission from the February 28th edition of the The Legal Intelligencer © 2017 ALM Media Properties, LLC. All rights reserved.Further duplication without permission is prohibited
The Pennsylvania Superior Court, in Metalico Pittsburgh v. Newman, et al (No. 354 WDA 2016, April 19, 2017), dealt a blow to employees attempting to avoid the application of a non-solicitation covenant.
In Metalico, two employees, Newman and Medred, executed employment agreements containing a covenant not to solicit customers, suppliers and employees during the “Post-Employment Period.” The Post-Employment Period varied depending upon the manner of the termination of employment, and commenced upon the last day of employment with Metalico. At the end of the three-year period, Metalico terminated the employment agreements, but continued to retain Newman and Medred as “at-will” employees, and recited new compensation and other terms of employment. These terms differed from those contained in the employment agreement. Newman and Medred were terminated one year later. Metalico filed suit against Newman and Medred, alleging that they were violating the non-solicitation covenant in their subsequent employment.
On the eve of a preliminary injunction hearing, Newman and Medred filed a Motion for Partial Summary Judgment, arguing that the employment agreements containing the non-solicitation covenants had terminated, and therefore the non-solicitation provisions no longer applied. They argued that the agreement to continue as “at-will” employees acted as a novation of the employment agreement.
The trial court agreed with Newman and Medred, and granted their motion for partial summary judgment. But the Superior Court did not agree. Instead, the Superior Court found that the covenant remained in place pursuant to a survival provision in the employment agreement. That provision stated that if employment under the agreement “expires,” the agreement continues in effect “as is necessary or appropriate to enforce” the non-solicitation covenant.
The trial court found that upon converting Newman’s and Medred’s status to “at will” employees, the parties had stated new terms for the employment relationship going forward. In so doing, the parties did not recite that the non-solicitation provision would stay in place. The failure to continue the compensation and benefits provided in the employment agreement, in the trial court’s view, invalidated the non-solicitation covenant. The trial court justly noted: “Metalico cannot claim the benefits of its bargain while denying its employees the same.”
The Superior Court disagreed, noting that because the survival language was included in the employment agreement, it constituted the bargained-for benefit for the employees. The Superior Court rejected any argument that there was a failure of consideration, because failure of consideration only applies if the consideration was never received – the employees here did receive three years of the promised compensation and benefits under the agreement. The Superior Court refused to find that the parties to the employment agreement intended to terminate and extinguish the previous agreement, thus extinguishing the non-solicitation covenant as well. In so doing, the Superior Court relied upon Boyce v. Smith-Edwards-Dunlap Co., 580 A.2d 1382 (Pa. Super. 1990). However, the Boyce case dealt with the use of the restrictive covenant as a defense to a claim raised by the employee.
It is well-settled that restrictive covenants in employment agreements are disfavored under Pennsylvania law. Courts, including the Superior Court, have refused to enforce such agreements on technicalities. For example, in Socko v. Mid-Atlantic Systems of CPA, Inc., 99 A.3d 928 (Pa. Super. 2014), the Superior Court refused to enforce a covenant not to compete in an employment agreement entered into after the commencement of employment and not accompanied by any beneficial change in the employee’s status, but which recited that it was signed “under seal” under the Uniform Written Obligations Act. The Court found that a seal does not provide adequate consideration to enforce a restrictive covenant. Instead, the Superior Court noted, there must be “actual valuable consideration.” The holding in Socko left employment law practitioners and litigators with the belief that there are no “gotchas” when it comes to restrictive covenants.
Metalico appears to change that. Metalico voluntarily agreed to let the employment agreement terminate and to continue employment on an “at-will” basis. This change of status benefits Metalico, leaving it free to terminate the employees or change their compensation and benefits at will (thus the name) and without concern about the terms of a written agreement. The employees lost these protections. The practical result of the Superior Court’s holding is that the employees lost the protections of the agreement, but retained their post-employment obligations. This is inconsistent with Pennsylvania’s historical animosity towards these restrictive covenants, and appears to truly represent a “gotcha” for these employees.
Metalico expands the universe of enforceable restrictive covenants. This is not an uncommon fact pattern, and one which might have given an employer’s attorney pause prior to filing for a preliminary injunction in the past. The holding could have the impact of reducing the care required in drafting, terminating and enforcing disfavored restrictive covenants, and eliminating some of the defenses available to employees seeking to avoid the covenant. Interestingly, nowhere in the opinion does the Superior Court recite the oft-cited language that such covenants are disfavored in the law. It will be interesting to see if the Supreme Court takes the opportunity to do so on appeal.
Patricia Collins is a Partner with Antheil Maslow & MacMinn, LLP, based in Doylestown, PA. Her practice focuses primarily on commercial litigation, employment and health care law. To learn more about the firm or Patricia Collins, visit www.ammlaw.com.
Lisa Gaier will be honored by the YWCA Bucks County as a 2017 "Woman Who Makes a Difference" at the organization's 26th Annual Awards Celebration on May 11th. Ms. Gaier is being recognized for her many personal, professional and volunteer activities which improve the lives of others and make Bucks County a great place to live.
Lisa Gaier practices in the firm’s Family Law and Estates and Trusts groups. In her Domestic Relations practice, Ms. Gaier advises clients on a variety of issues, including divorce, adoption, child support, alimony/spousal support, equitable distribution and child custody matters. As part of the Estates and Trusts group, Lisa is involved with estate planning including the drafting of Wills, Trusts, Powers of Attorney, and Living Wills, as well as assisting with estate administration and Orphans’ Court matters, with a particular emphasis on guardianships.”
Jessica Pritchard, a Partner of the firm, and chair of the Family Law practice group, will be presenting two upcoming continuing legal educations programs.
On April 18th Ms. Pritchard will be a presenter for the Bucks County Bar Association program entitled “Evidence for Family Lawyers”. The program focuses on the appropriate manner to introduce documentary evidence to support a case in family court. Ms. Pritchard’s co-presenters are Daniel Keane, Esquire and the Honorable Raymond F. McHugh, Bucks County Court of Common Pleas. Jessica Pritchard Chairs the firm’s Family Law Department
On Wednesday, April 19th, Ms. Pritchard will be a presenter at the Pennsylvania Bar Institute Family Law Institute at the CLE Conference Center in Philadelphia. Her program will include guidelines for support, custody, and protection from abuse geared specifically to the lawyer whose practice does not focus primarily on family law. She will offer insights and practical tips to assist clients and strategies to identify pitfalls in these areas of practice.
Jessica Pritchard focuses her practice exclusively in the area of family law, where she handles all phases of the negotiation and litigation of domestic relations cases, including divorce, child custody, child support, alimony/spousal support, equitable distribution, and prenuptial and postnuptial agreements.
Antheil Maslow & MacMinn is proud to be a sponsor of the Pearl S. Buck Woman of Influence Award dinner and ceremony on Thursday, May 4, 2017. The Woman of Influence Award recognizes a woman who, like Pearl S. Buck, has distinguished herself in devotion to family, career and humanitarian causes. This year, the award honors Pamela Varkony, a dynamic teacher, speaker, freelance columnist and author who inspires audiences around the globe through her passion for improving the lives of others.
Susan Maslow, a founder of the firm, serves on the event committee for Pearl S. Buck International, an organization that provides opportunities to explore and appreciate other cultures, builds better lives for children around the globe and promotes the legacy of Pearl S. Buck by preserving her National Historic Landmark home.
Ms. Maslow is a business attorney who concentrates her practice primarily in general corporate transactional work and finance documentation in the areas of business transactions, private finance, real estate, contracts, and non-profit law. She is a member of ABA Subcommittee of the Business Law Section Drafting Human Rights Protections in Supply Contracts
Anti-forced Labor Initiatives and Benchmarking a Supply Chain Compliance Program
Written by Susan Maslow
Or
Avoiding Bad Press, Brand Impairment and Costly Litigation
Reprinted with permission from the February 28th edition of the The Legal Intelligencer © 2017 ALM Media Properties, LLC. All rights reserved.Further duplication without permission is prohibited
A significant amount of press surrounded the US Department of Justice (DOJ) one year trial pilot program on April 5, 2016 and the earlier September 29, 2015 “Yates Memo”, instructing companies to self-disclose possible violations of the Foreign Corrupt Practices Act (FCPA) and fully cooperate with the DOJ. What has not been as broadly made known is that, a few days later, the U.S. Customs and Border Protection (CBP) establish a Trade Enforcement Task Force within its Office of Trade to focus on issues related to enforcement of antidumping and countervailing duty laws and interdiction of imported products using forced labor.
Antidumping and countervailing duties are historic tariffs imposed on foreign imports priced below fair market value to ensure a level playing field for domestic producers. The interdiction of products using forced labor stems from The Trade Facilitation and Trade Enforcement Act of 2015(TFTEA), enacted in February 2016. TFTEA eliminates an earlier “consumptive demand” exemption, meaning that goods made with indentured, child, or other forced labor are no longer allowed in the US just to meet US demand. With this change, CBP will no longer be legally required to weigh demand considerations when processing information concerning forced labor. CBP will be updating its regulations to clarify the TFTEA amendment but, since March 10, 2016, CBP started training personnel and has executed several withhold/release orders related to goods made by convict or forced labor using a Department of Labor (DOL) list of foreign-made products for which the DOL “has a reasonable basis to believe might have been mined, produced or manufactured” by forced or indentured labor. The CBP has also established within its Office of Trade a Trade Remedy Law Enforcement Division and seems intent on taking action.
On March 30th, Jessica A. Pritchard, a Partner of Antheil Maslow & MacMinn, LLP and President-Elect Bucks County Bar Association appeared on Pennsylvania Cable Network ("PCN") providing commentary on the Superior Court of Pennsylvania’s en banc session. En banc sessions are cases heard before a larger panel of the Superior Court (normally a three judge panel). Not all requests for a rehearing en banc are granted. Often, an appeals court will not take the time to rehear a case en banc unless the case includes a question of major importance (like how to interpret a new law), or the smaller panel’s opinion appears to contradict state law or precedent. The cases were originally presented before the en banc panel on March 21, 2017. Ms. Pritchard was selected as a case commentator to provide viewers with relevant background information pertaining to each case. The commentators enhance the educational aspect of the coverage by making the process more accessible to viewers.
Ms. Pritchard focuses her practice exclusively in the area of family law, where she handles all phases of the negotiation and litigation of domestic relations cases, including divorce, child custody, child support, alimony/spousal support, equitable distribution, and prenuptial and postnuptial agreements.
Elizabeth Fineman will be a panelist at an April 6th Strafford Live webinar, "Divorce Cases: Uncovering Critical Information in Tax Returns and Financial Statements". The panel will focus on appropriate discovery methods to obtain information, explain how to get the most out of your analysis of tax returns and financial documents, and outline best approaches for using financial experts.
Elizabeth concentrates her practice on domestic relations matters and handles a variety of issues, including divorce, child support, alimony/spousal support, marital taxation, equitable distribution and child custody matters. She has handled many high-income support cases involving an intricate knowledge of both family law and complex financial issues. Additionally, Elizabeth has handled several appellate court matters representing her clients’ interests in the Superior Court of Pennsylvania.