No-Poaching Agreements Between Companies are Illegal and Take Money Out of the Pockets of Employees – by Ted Anderson

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Apple, Google, Intel and Adobe recently agreed to a $400 million settlement to be distributed among more than 64,000 employees who worked at those companies between 2005 and 2009. During that time, each of these companies agreed not to make cold calls to the employees of other companies, as well as other recruiting restrictions. The U.S. Department of Justice (DOJ) found that these agreements literally took money out of the pockets of the affected employees by suppressing employment opportunities and compensation values.

A class action lawsuit was also filed against the companies, which initially demanded approximately $3 billion in lost compensation and treble damages. As a result of the DOJ action, the ensuing civil lawsuit and pending settlement, employers around the country are on notice that restrictive no-poaching practices will most likely violate federal and state anti-trust laws and may lead to harsh consequences that include awards to employees of the amounts they would have made if not for the collusion, not to mention potential treble damages.

Some of the most well-known and powerful companies in the world are learning the hard way that businesses cannot collude to restrict the free market for skilled employees. The trouble for these companies began back in 2010, when the DOJ’s Antitrust Division filed a complaint in U.S. District Court alleging anti-trust violations of the Sherman Act, saying that the companies had reached “facially anticompetitive agreements” that “eliminated a significant form of competition … to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.” The DOJ found that the companies had in fact agreed not to cold call each others’ employees and had kept “do-not-call lists” to avoid such recruiting.

There is no doubt that these collusive agreements and practices harmed employees. One of the principal means by which many companies with skilled workers competitively recruit employees is to solicit them directly from other companies in the process referred to as cold calling, which is very effective at reaching the best and most satisfied employees regarding alternate career opportunities. Competition in the labor market results in better salaries, enhanced career opportunities and increased mobility for employees. On the flip side, collusive agreements not to solicit or hire certain employees reduce competition and lower salaries. In fact, these restrictive practices have much the same effect as price-fixing or agreements between companies not to compete for certain buyers, both of which are “per se” violations of the anti-trust laws.

After the DOJ investigation, the companies involved agreed to end their anticompetitive practices. However, the DOJ did not extract any compensation for the Apple, Google, Intel and Adobe employees, and so the civil lawsuit was filed to get them their just due. In the end, it appears that that lawsuit will cost the four companies hundreds of millions of dollars that will be distributed among the employees who were harmed by the aforementioned restrictive practices.

Unfortunately, this type of collusion that Apple, Google, et al, thought they could get away with is all too common and occurs in Texas as well as the Silicon Valley. And, if any companies in Texas engage in the same or similar practices in restraint of a free labor market, their employees would be equally harmed and equally entitled to compensation. For example, if large companies in the oil and gas industry agreed not to poach or solicit each other’s engineers and workers without a justifiable reason for doing so, then those workers may have a claim against the companies involved.

Kilgore & Kilgore is highly experienced in these matters and all aspects of employment law. If you have information that leads you to believe that your employment opportunities and compensation packages are being restricted due to collaboration among potential employers, or if you have any other questions regarding employment matters such as non-compete or non-solicitation agreements you may have signed, contact Kilgore & Kilgore today. Our Dallas employment attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com“>de*@ki********.comto set up a free review of the facts of your case with a Dallas employment lawyer.

Guardianship Grabs by Nursing Homes and Others Cheat Heirs of Inheritances

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Nursing homes are regularly using guardianship petitions as a means of bill collection. Other parties may also abuse the guardianship process to serve their own needs. A recent study of guardianship cases filed over a ten-year period indicated that 12 percent of such cases were brought by nursing homes. Interviews with veterans of the system and a review of guardianship court data conducted by researchers at Hunter College, at the request of the New York Times, show the practice has become routine, underscoring the growing power nursing homes wield over residents and families amid changes in the financing of long-term care. 1

A 2007 study funded by a grant from the Retirement Research Foundation states: “As of 2007, a total of 44 states have specific statutory provisions on public guardianship, whereas seven states include no such reference in their code.”

Seniors can have in place a power of attorney, a health care directive and a will, but all of that planning can be overturned by a guardianship established by a nursing home or other parties. Seniors should be aware of guardianship laws in their state, discuss with an attorney their plans for long-term care, and manage the transition from private pay to Medicaid.2

Guardianship can be a necessary and useful legal means of protecting the rights and assets of a loved one who has lost the ability to make important decisions. Unfortunately, guardianship laws are sometimes abused by persons wanting to protect and enrich their own interests rather than the person in a vulnerable position. This abuse can come from nursing homes, unscrupulous family members, friends, business partners, caregivers, and even persons connected with the court system. In virtually every case, the only way to fight such abuse is to have an experienced and effective attorney on your side who understands the laws relating to elder care and the legal system. Kilgore & Kilgore has attorneys with experience in protecting the elderly and the heirs when the inheritances were compromised by the actions of others.

Guardianship gives a person the legal right and duty to manage the personal and/or financial affairs of someone who is unable to do so for him or herself. In Texas, guardians are appointed by the court for persons who are proven to be “incapacitated.” Because any guardian appointed by a judge will have full control over all or some of the affairs of the incapacitated person (called a “ward”), the appointment process is not easy by design. It almost always requires an experienced attorney to act on behalf of the family member or other person who is requesting that a guardian be appointed.

In the vast majority of cases, guardianships do what they are designed to do: protect vulnerable persons from abuse, neglect and exploitation. Unfortunately, however, in some cases, persons with their own agendas try to use the guardianship laws for their own benefit. A recent report in the New York Times put the spotlight on nursing homes which abuse the guardianship process as a method of bill collecting. The nursing home may petition the court for a guardian to be appointed on behalf of someone in their care who has not paid what the nursing home claims to be the outstanding balance. By doing so, the nursing home initiates an expensive and stressful process that puts pressure on the person in its care to either pay the demanded amount or risk losing control of his or her personal finances.

Persons in Texas have been shown to abuse the guardianship process as well. In 2012, the San Antonio Current published its own exposé on guardianship abuse. The focus of this report was on a process in Texas called “court-initiated guardianships.” Under the laws governing this process, if a judge becomes aware of any person on whose behalf a guardian may need to be appointed, the judge is obligated to commence an investigation to determine whether doing so would be appropriate. If the investigation shows to the court’s satisfaction that a guardian should be named, then the judge may do so regardless of whether any family member has expressed a desire for a guardian to be appointed—and sometimes even over the objections of the person becoming the ward.

In theory, when choosing a guardian, the judge is required to follow a priority list provided by Texas law, but there are ways around this. For example, if the ward is an adult, then the law directs the judge to first look to whether the ward has already designated a guardian in the event of incapacity, and if not the judge looks to the spouse, the next of kin, and so on. However, there are many legal methods for a judge to disqualify a person from becoming a guardian. These include a determination that a person has a claim adverse to the ward’s assets, has engaged in notoriously bad conduct, lacks the ability or education to handle the ward’s affairs, or is otherwise found unsuitable by the court. So in reality, the judge can often overlook the stated wishes of the ward and the family in order to appoint an independent guardian.

Such an independent guardian sometimes acts in a manner detrimental to the ward and the family. Guardian fees, which can be extremely high, are paid directly out of the ward’s assets. Some independent guardians have even limited or excluded contact by family members with the ward. And the ward and his or her family have no control over the independent guardian’s use of the ward’s assets to pay disputed bills such as in the nursing home cases.

As you can see, whether you are in the unfortunate situation of needing to petition for guardianship of a loved one to protect the loved one’s interests, or need to contest a guardianship initiated by another person or the court, you will absolutely need an experienced attorney on your side. If you are in either of these situations, or have other issues relating to elder care abuse, contact Kilgore & Kilgore today. Our commercial litigation attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas commercial litigation lawyer.

1 New York Times, January 25, 1025, To Collect Debts, Nursing Homes Are Seizing Control Over Patients,http://www.nytimes.com/2015/01/26/nyregion/to-collect-debts-nursing-home-seizing-control-over-patients.html?_r=0

2 Senior Living Blog, January 27, 2015, by Don Taylor, Nursing Homes: Guardians of the Elderly,

http://www.bankrate.com/financing/senior-living/nursing-homes-guardians-of-elderly/

Retirement Claims – Pension Benefits from Multiple Employers No Longer Sacred

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Until recently, retirees entitled to pension benefits under retirement plans from multiple employers could rest assured that their benefits could not be cut by plan trustees unless plan assets were exhausted, mainly because ERISA (the federal Employee Retirement Income Security Act) made it illegal for trustees to do so. But in December 2014, all that changed. The provisions of a year-end bill called the Multiemployer Pension Reform Act of 2014, which was slipped into the $1.1 trillion Omnibus Spending Bill, allow trustees of at-risk plans to suspend benefits if they can show this would prolong the life of the plan.

Now there is a precedent for allowing retiree benefits to be cut. One question that remains to be answered is whether this will lead to a slippery slope of other solutions in the future. Let’s back up to how this happened.

Multiemployer pension plans typically cover a specific industry such as construction, trucking, mining and food retailing. They are collectively bargained, jointly funded by groups of employers, and administered by a board of trustees. According to the Department of Labor, there are 1,427 multiemployer defined benefit plans covering 10.5 million participants with $431 billion in assets. All of these plansare partially insured by the federal PBGC (the Pension Benefit Guaranty Corporation), which steps in if the plan’s assets are exhausted, although it guarantees benefits at a much lower level than the plans themselves provide.

The purported reason for the controversial Multiemployer Pension Reform Act of 2014 is that many multiemployer pension plans are in serious financial trouble, and they threaten to bring the PBGC down with them. An estimated 1.5 million persons were covered by plans in danger of failing over the next two decades, including the Teamsters’ Central States fund and the United Mine Workers of America fund. The plans in total are subject to an $8.3 billion deficit that is projected to hit nearly $49.6 billion by 2023. This puts at risk the PBGC, which is currently running a deficit in its multiemployer program of over$42.2 billion.

As a result of these troubling conditions, a coalition of multiemployer pension plan sponsors and some major unions developed and promoted a package of proposed reforms known as Solutions, Not Bailouts, and in essence this package became the Multiemployer Pension Reform Act of 2014.

The Act creates a new plan status known as critical and declining status for plans likely to become insolvent in the next 15 to 20 years. The trustees of plans meeting the requirements of this status can apply to the U.S. Treasury Department to suspend benefits for retirees and reduce accrued benefits for active workers. The trustees must demonstrate that they have taken all reasonable measures to forestall insolvency and that the proposed benefit suspension will ensure solvency. If these requirements are met, then the trustees mayreduce benefits, even for current retirees, to 110 percent of what the PBGC guarantee would offer. In addition to determining the size of the benefit reduction, plan trustees make the decision on how to allocate the cuts. For example, they can cut retirees’ benefits more than those of active workers. But benefits for disabled plan participants and retirees older than 80 are protected and reductions of benefits for people between age 75 and 80 have to be phased in.

The trustees, however, cannot cut benefits entirely by themselves. First, U.S. Department of Treasury officials have 225 days to approve a plan’s application for benefit reductions, which must show how cuts would affect all plan participants. In addition, plan participants must vote on proposed changes unless the plan poses a high degree of risk to the PBGC, defined as a claim of $1 billion or more. This would seem like a significant degree of protection. Buta majority of all workers and retirees in a plan – not just a majority of the ones who vote – is required to block cuts. And some argue the right of approval is an illusory protection for retirees.

Because the new provisions puts at risk retiree benefits which had previously been protected, many retiree groups and some unions are in staunch opposition to the new provision. They argue that other alternatives were not seriously considered and that retiree’s perspectives were given enough weight. Finally, they say, any new law that allows potential cuts in benefits should be phased in over time rather than taking effect immediately, so people can adequately plan for the future.

But the reforms had bipartisan support on Capitol Hill, as well as from many employer and labor trustees who were in search of permission to fix their endangered plans. Proponents argued that if a plan failed, the benefits would be cut anyway, so it made sense to give the trustees of at-risk plans a tool to stabilize their plan before it failed. Many also argued that this was a necessary step to shore up the PBGC.

If you are a retiree who expects his/her benefits from a multiemployer pension plan, contact Kilgore & Kilgore today. Our employment benefits attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas employment benefits lawyer.

Employee Rights at Work – Political Discussions in the Workplace

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Most employees believe they have a First Amendment right to free speech, and that allows them to discuss political issues whenever they want without restriction, including at work. But while employees do have some protected rights vis-a-vis their employers to discuss some political subjects, these rights are very restricted. First, it is important to remember that the First Amendment applies only to government restrictions on free speech. If you are not a public service employee, then your employer is not the government. So, unless another law gives you the protected right to speak about politics at work, your boss can prohibit you from doing so, or regulate how, when and where you do so. Your employer can fire you at will if you don’t comply with these company rules.

An employee’s right to discuss outside politics in the workplace is defined by the National Labor Relations Act (NLRA). This Act gives employees a narrow window of political subjects that can be discussed in the workplace, but such discussions must be related to workplace issues. Section 7 of the NLRA provides employees the right to engage in “concerted activities” for “mutual aid or protection” regarding specifically identified employment-related concerns. For example, promoting a candidate specifically because of his/her support for unions, increased minimum wage, safety in the workplace, immigration reform, etc. These discussions would fall within a worker’s rights under Section 7. But employees are still employees, and they are expected to first and foremost perform their jobs. So any political discussions or campaigning is restricted to non-working hours in non-working areas.

Section 7 does not protect purely political activity. If you want to wear t-shirts or buttons that support a candidate, or campaign for that candidate in any way, then whatever you wear or say must be specifically linked to the employment-related issue. And, if your employer has neutral policies governing the time, manner and place of the protected speech that is permitted under Section 7, then you have to abide by those rules, as well. Keep in mind that these protections under the NLRA apply to most private businesses, not just to unionized employers. But these rights apply only to non-supervisory employees, not to supervisors or managers.

In addition, federal regulations cut both ways regarding politics in the workplace. Some laws, regulations and rules may themselves restrict employee rights. For example, if an employee’s discussions involve race, national origin, sex, religion, age, sexual orientation or military status — especially when the subject is emotional and the conversation heated — they risk subjecting the employer to claims of discrimination, harassment and retaliation.

While few and far between,there are some states that outlaw some forms of discrimination against employees for engaging in some forms of political activities.

Under Section 276.001 of the Texas Elections Code, an employer cannot retaliate against an employee because the employee voted for a particular candidate or refused to reveal who the employee voted for. In fact, it is a third degree felony to do so. Retaliation includes harming, threatening to harm, or reducing an employee’s wages or another employee benefit. In addition, in Texas an employer cannot prevent or retaliate against an employee for voting, and must allow employees to vote during working hours unless the polls are open on an election day for at least two consecutive hours outside of the employee’s work time.

New York has an “off-duty conduct” statute which prohibits employer discrimination based on an employee’s “political” activities. Such activities include running for public office, campaigning for candidates or participating in political fundraising activities.

One other thing to keep in mind is that if you belong to a union, your contract may prohibit discrimination or retaliation by your employer against union workers based on their political activity, especially for activities outside of working hours and not on the business premises.

All in all, while it’s a given that many employees are going to discuss politics in one way or another at work, especially in the run-up to a heated election, it is also true that employers are recognized as having the right to reasonably regulate how, where and when these discussions take place, and regarding what subjects. Failure to understand this could cost you your job. And if it does there may be nothing you or the best employment lawyers can do about it.

Servicemember Rights: Providing a Tougher Shield for Soldiers – Regulation of Payday Loans is Slowly Expanding in Texas

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There is a long-running debate in Texas about whether government should regulate payday, auto-title and other similar short-term, high-interest loans. Thus far, the Texas state government has failed to impose any non-superficial regulation. Therefore until recently, Texas was considered one of the most lenient states for lenders offering these types of loan products. However, local government regulation of payday loans has begun to fill the void left by the state, and slowly but surely, some meaningful regulation and enforcement is creeping across Texas and impacting the payday loan industry.

In Texas, payday and auto-title lending is a $4 billion-a-year industry comprised of around 3,500 businesses. The state has imposed no limits on the size of a loan or the fees involved, and as a result, it has been reported that Texans get bigger loans and pay higher fees, on average, than consumers elsewhere.

A payday loan is a short-term loan that is typically due on the borrower’s next payday. The borrower is required to agree to a payment method within the lender’s control, such as writing a check for the full balance in advance, so the lender has an option of depositing the check when the loan comes due. Loan fees can be as high as $30 per $100 borrowed, and those fees result in annual percentage rates (APR) of almost 400 percent on many payday loans. Auto-title loans are similar, but are given in exchange for car titles as collateral.

Some payday lenders give borrowers the option to roll over their loans if they cannot afford to make the payment when it’s due. In fact, many lenders encourage this. Most often, the borrower pays yet another fee to delay paying back the loan. And if the loan is rolled over several times, the borrower could end up paying hundreds of dollars in fees and still owe the original amount borrowed. For example, the average auto-title borrower nationally renews a loan eight times and pays $2,142 in interest for $941 of credit, according to a 2013 Center for Responsible Lending report.

Critics of payday and auto-title loans say the lenders pinpoint desperate people and purposefully attempt to trap them in a cycle of debt in order to collect more and more fees. Here is a quote from a New York Times article dated September 27, 2014, “We have seen firsthand how lenders use loopholes in the rule to prey on members of the military,” Richard Cordray, director of Consumer Financial Protection Bureau, said in a statement. “They lurk right outside of military bases, offering loans that fall just beyond the parameters of the current rule.” (1)

Supporters of the industry say lenders offer needed capital to persons who have few options. In any event, it has been reported by the Center for Public Policy Priorities (2) that Texans spent $1.2 billion in payday and auto-title fees in 2012, and 35,000 cars in the state were repossessed by auto title lenders.

Thus far, the majority of the legislators in Austin appear to have sided with the payday loan industry. Advocacy groups and some legislators have argued for legislation, including annual percentage rate caps, but to no avail. Lawmakers did pass measures in 2011 requiring payday and auto-title lenders to be licensed by the state and to post a schedule of fees in a visible place, but more significant measures failed to pass in 2013. Payday lenders are still not subject at the state level to any of the types of regulatory oversight, licensing and consumer protections governing other Texas lenders.

But while payday loan regulation was languishing and then shot down in the statehouse, municipal governments including Houston, Dallas, San Antonio, Austin and El Paso were passing their own ordinances. And as of now, about 20 cities in Texas have adopted payday loan restrictions to protect borrowers.

Most of the municipal ordinances follow a model that doesn’t set a cap on interest rates, but rather limits the loans to 20 percent of a borrower’s gross monthly income. Auto title loans cannot exceed three percent of a consumer’s gross annual income or 70 percent of the vehicle’s retail value. In addition, under most ordinances, at least 25 percent of the principal must be paid upon a rollover. The ordinances of Houston and other Texas cities also place a limit on the number of installments and rollovers.

Payday loan companies sued several of these cities in an attempt to invalidate the local ordinances, but they lost an important case against the City of Dallas in a state appellate court. This has emboldened cities to begin enforcing their own payday loan regulations.

However, payday loan companies in Texas have always been very adept at determining exactly where the regulatory line is drawn and creating loan products that stay just within the rules. An example of this is how they have managed to work around federal restrictions on payday loans to military personnel. For example, the Military Lending Act of 2006 set a 36 percent interest rate cap on a range of high cost loan products. But the protection applied to a narrow sliver of loans, covering only loans for up to $2,000 that lasted for 91 days or fewer. It also covered auto title loans with terms no longer than 181 days. Some lenders simply altered their products to evade the restrictions. Some offered loans for just over $2,001, or for periods that were just over 181 days. (1)

It remains to be seen if these lenders will continue to do the same with the municipal regulations put in place by cities in Texas, or will directly challenge or even flout these laws. If they do offer products that are in violation of city ordinances, they may open themselves up to civil lawsuits by borrowers as well as suits brought by municipal government authorities.

Payday lenders have already been targeted by federal authorities, including the recently created Consumer Financial Protection Bureau, and we will discuss that in the second installment of this post.

(1) New York Times Business Section, September 27, 2014, by Jessica Silver-Greenberg NY Times – Tougher Shield for Soldiers Against Predatory Lenders
(2) Center for Public Policy Priorities, from a Report by the Office of Consumer Credit Commissioner, July 2013; Payday-Auto Fact Sheets