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UPDATE: Federal Judge Blocks Overtime Pay Rule Change

Acker + Associates P.C. Newsletter


Federal Judge Blocks Overtime Pay Rule Change

Santa’s sleigh screeched to a halt or Christmas came early–depending on whether you are an employee or employer.

Texas Federal Judge Amos L. Mazzant III has granted a nationwide preliminary injunction stating that the Department of Labor’s rule, which was suppose to go into effect this Thursday, is unlawful and exceeds the authority that the agency was delegated by Congress.

The rule would have more than doubled the required salary of manager and supervisor employees that are exempt from overtime pay.

The rule was an executive order signed by Obama and never went before Congress for consideration. An appeal of the injunction could mean that the fate of the rule is decided by a Trump administration or a Supreme Court with Trump appointees. Trump has previously indicated that he would like to see a delay in the implementation of the rule or a carve-out for small businesses.

Oh what fun it is to ride in a one horse open sleigh.

New Overtime Pay Rules

Acker + Associates P.C. Newsletter


New Overtime Pay Rules
Effective 12/1/16

Early holiday cheer for employees and perhaps some coal for employers.

If you are an employer, you may need to change how/what you pay your salaried employees.  If you are an employee, you may find a raise or reduced hours in your stocking.

Federal law permits employers to treat executive, administrative, and professional salaried employees as “exempt” from overtime requirements (such as paying one and a half times regular pay).

As of December 1, salaried employees who earn less than $913 per week ($47,476/yr.) must be paid overtime if working 40 or more hours per week.

For example, if you are an employer paying your manager $40,000 per year, you must either increase her salary to $47,476 or start paying her for overtime.

So you better watch out…I’m telling you why…an employee bringing a claim for failure to pay overtime would be entitled to not only the unpaid wages but recovery of attorney fees and a statutory penalty.

Please contact us if you have any questions or need help developing new compensation plans.

Better Watch Out… I’m Telling You Why

Acker + Associates P.C. Newsletter

 santa 2

Better Watch Out…
I’m Telling You Why

This week, A+A obtained a judgment from the Multnomah County Circuit Court extending liability to an owner for his company’s $450,000 business debt.

The dispute began with that all too familiar situation–someone owes you money, he hides behind his corporate veil, he liquidates his corporate accounts, and you cannot collect the debt.

In this dispute, between two former partners of a car dealership, we pierced the corporate veil and convinced a judge to hold the individual liable along with his company.  We also prevailed on our claim that the transfers out of his company were fraudulent.

As part of the judgment, we had the Court forbid the defendant from transferring money out of his accounts, to prevent the cat-and-mouse game of debt collection.  The defendant may bury his head in the snow and ignore the Court’s order.  If so, we have plowed the way for a contempt of court determination, an arrest warrant, and possible jail time.  Now that’s a naughty list to avoid.

On the other side of the snow bank, last month we successfully defended against an attempt to extract money from our client, a prominent local business.  A commercial contractor sought approximately $200,000 for alleged work performed on behalf of our client.  After a week-long jury trial in the other Milwaukie (Wisconsin), we were able to reduce/offset the claims to only a few thousand dollars.  Christmas does not come early, and you have to make Santa’s list if you expect a gift.

Portland Timbers as Champions of Major League Football…Soccer

As the Timbers hoist the top prize yesterday, the MLS Cup Trophy, Portland has cemented its position as Soccer City USA. Liam Ridgewell, Timber’s center back from England, calls the sport “football.” Why do us Americans use a different name?

Actually, the British were the first to use the word “soccer.” An Oxford student, Charles Wredford Brown, is credited with coining the name in 1863. British schoolboys liked to nickname everything and often added an “er” to such names. At the time, soccer and rugby were both commonly known as “association football” and “rugby football,” respectively. “Association football” became “soccer.” The “soc” was taken from “association” and an “er” was added. “Rugby” became “rugger.” Charles was asked if he would like to play a game of “rugger” and responded that he preferred “soccer.”

Rugby and soccer were originally sports for gentlemen, primarily played by the upper echelons of society. As they spread to the masses, “association rugby” did not catch-on and “association football” became known as just “football.” Other countries, such as the US, had meanwhile developed other popular sports that were being called “football,” and kept the prior name of “soccer” to avoid any confusion.

Congratulations Association Football City USA.

The End of Litigation

Apple’s announcement on Wednesday, of its latest version of gadgets, garnered the attention of the public.  However, a more significant technological advancement–at least in law–came today from the son of an attorney, Bill Gates. Microsoft has launched a new program that will essentially eliminate the need for litigation. No more juries, judges, or courtroom drama. Say hello to LOS (Legal Operating System).

How does it work? Whenever there is a legal dispute, the two parties simply enter their information into the system and LOS spits out a result. Years of development have gone into LOS, which allows it to handle, as boasted by Microsoft, any kind of dispute. Past cases and decisions for each separate jurisdiction have been entered into LOS, allowing it to access such and ensure consistent outcomes for future disputes.

The parties interface with “Ati,” a virtual person similar to Apple’s Siri. However, unlike Siri, Ati usually asks the questions. Ati will assist the user in obtaining helpful documents and electronic records. Ati may also want to “talk” with witnesses so that it can assess and process their information.

LOS, however, does not eliminate legal costs. You pay upfront. To begin a case in LOS, both parties must pay the full amount in dispute. At the conclusion of the case, LOS deposits any award into the account of the party it determines to have prevailed. LOS deducts and keeps a percentage from the award.

LOS is based on the premise that litigation can be reduced to a mechanical application of law to facts. However, this is not reality–at least in the present day. And, yes, for now, this blog is pure fiction. Maybe someday computer programmers will replace us lawyers.

Fighting for His Piece of the American Pie

Acker + Associates P.C. Newsletter


Fighting for His Piece of the American Pie:

A + A Obtains Jury Award for Green Cab Owner

Awelew Belete arrived in the United States in 1989 as a penniless refugee from Ethiopia. He and the other two current owners of Green Transportation Company immigrated together. They left behind their one-room house, which they shared with their respective families.

For his first seven years in the United States, Awelew worked sweeping floors in a warehouse in Portland. He worked 12-hour shifts, 7 days a week, so that he could earn money to support his family and himself. With his earnings, Awelew purchased a house. He also invested with several others in a taxi business that became known as Green Cab.

By 2007, Awelew was one of the three remaining owners of Green Cab. Over the years, Awelew grew concerned with and disputed the aggressive business decisions made by the other two members. He complained when company loans were obtained without his approval.

The other two members demanded that Awelew pledge his house as security for company refinancing purposes. Awelew requested copies of company financial records. Tensions flared between Awelew and the other two members.

The dispute culminated with a decision by the other two members, on December 23, 2013, to expel Awelew from the company. They claimed that Awelew’s conduct justified his expulsion from the company.

On behalf of Awelew, Acker + Associates filed suit in early 2014, claiming wrongful expulsion. Over a year later, and after a three-day jury trial, the jury awarded judgment in Awelew’s favor.

The jury determined that the expulsion of Awelew and the borrowing of money constituted a breach of the company’s operating agreement and the fiduciary duties owed to Awelew, and awarded him approximately a quarter of a million dollars. After the jury rendered its verdict, the judge gave Awelew a choice between receiving the jury’s monetary award or being deemed a one-third owner. Awelew selected the latter option, and the judge granted Awelew’s request for a declaration that he is still an owner of the company.

In a heartwarming victory, Acker + Associates helped Awelew reclaim his piece of the American pie.

Oregon’s “Gangapreneurs”

Acker + Associates P.C. Newsletter

 Pot Leaf


This November, Oregon voters passed Measure 91. The act permits recreational use of marijuana under Oregon law. Beginning on July 1, 2015, adults aged 21 or older may privately grow, possess, and use limited amounts of the plant and derived products.

The law also opens the door to future retail sales of marijuana at licensed shops. As with alcohol, the Oregon Liquor Control Commission (OLCC) is charged with regulating the industry. The OLCC’s public rulemaking process will establish comprehensive regulations to deal with issues involving sales to minors, advertising, product safety, and business licensing.

The OLCC will begin accepting license applications no later than January 4, 2016. Marijuana-related businesses will be categorized as Producers, Processors, Wholesalers, and Retailers, each with its own set of rules. Licenses will cost $1,000 per year. A single licensee may hold multiple licenses and license types.

Business opportunities abound for not just the retail sale of marijuana but for ancillary products and services. Commercial greenhouse pot production can require heating and cooling systems, carbon dioxide injections, grow lights, air ventilation and filtration, and hydroponic or irrigation systems. The product itself must be properly harvested, packaged, labeled, stored, and shipped.

The marijuana industry will undoubtedly mirror goods and services found in the alcohol industry. The new law allows the sale of marijuana paraphernalia, such as pot-growing kits. Colorado and Washington, which both legalized marijuana in 2012, have already seen businesses offering marijuana “tastings” and tours.

Federal law continues to list marijuana as a Schedule I controlled substance–a category that includes the “most dangerous drugs” like heroin. This fact adds substantial risk to marijuana-related business as most operations likely violate or cannot benefit from federal laws.

Under the Obama administration, the feds have informally stated that prosecuting businesses that are complying with strong state regulatory systems is not a priority. However, a shift to the right in politics could cast a haze over such policy.

Measure 91 creates numerous opportunities for budding “ganjapreneurs.” Please contact Acker + Associates for any legal assistance.

Bicycle-Riding Ebola Zombie Nurses?

Acker + Associates P.C. Newsletter


Ebola Law 101

10/24–Nurse Kaci Hickox returned to the United States from treating Ebola patients in Sierra Leone. Upon her arrival in New Jersey, she registered a temperature of 101. (Later her temperature was determined to be the normal 98.6.) Pursuant to New Jersey policy, Ms. Hickox was quarantined in a tent for the weekend.

10/27–Ms. Hickox was transported to her home in Maine (via two black SUVs with tinted windows).

10/30–Ms. Hickox went on a bicycle ride with her boyfriend and met with reporters, violating Maine’s quarantine policy.

10/30–A Maine judge signed a “temporary order” limiting Hickox’s movement.

Ms. Hickox claims that she has experienced no symptoms and that Maine’s policy is not medically or legally sound. (Her boyfriend claims that the government has “messed with the wrong redhead.”)

Does the government have the legal muscle to keep Ms. Hickox at home…and off her bike?

The federal government doesn’t mind her bicycle riding. Current CDC guidelines for healthcare workers only require self-monitoring and avoiding public transportation, as long as one remains symptom free. (See Ebola: The Power to Isolate for an analysis of the legal authority for federally mandated quarantines.)

However, Maine officials consider Ms. Hickox’s activities as violating its 21-day home quarantine for Ebola health workers returning from West Africa. Maine courts may interpret Maine law differently.

According to Maine law, a court may order confinement when needed to avoid a clear and immediate public health threat. Since Ms. Hickox is not showing any symptoms, and health authorities have indicated that Ebola is not contagious unless one is experiencing symptoms, the clear and immediate public health threat may prove a difficult standard to meet.

What about Oregon? Oregon law has a similar standard–clear and convincing evidence that confinement is necessary to prevent a serious risk to the health and safety of others. Confinement may occur before a court hearing, upon the determination that probable cause exists to believe that the individual requires immediate detention to avoid a clear and immediate danger to others.

Whether or not a court upholds Maine’s attempt to quarantine Ms. Hickox, she may create serious legal ramifications for herself in the event she did infect another with Ebola. At a minimum, her refusal to comply with the state quarantine policy may help another establish a civil negligence claim against her.

Regardless of whether you think of Ms. Hickox as a crusader, an egocentric, or a fiery red-head, we should all thank her. With Halloween upon us, she has provided a great costume idea–a bicycle-riding Ebola zombie nurse.

Happy Halloween!

EBOLA: The Power to Isolate

Acker + Associates P.C. Newsletter



Thomas Eric Duncan, the first patient diagnosed with Ebola in the United States has died in isolation at a Dallas hospital.  Mr. Duncan’s female companion, his 13-year-old son, and two others are currently quarantined in a four-bedroom home on a remote property.  They are prohibited from leaving under the threat of prosecution.

The White House has announced that additional screening will begin at five U.S. airports for travelers arriving from West Africa.  Such screening will include taking the temperatures of travelers.

In Spain, the first woman known to contract Ebola outside of West Africa, is quarantined in a hospital, as is her husband.  Their dog, Excalibur, was euthanized as a precaution despite protests from the owners and animal rights groups.

Does the U.S. government have the power to isolate and quarantine individuals it suspects of having Ebola?  What about the constitutional protections of due process, freedom from search and seizure, and freedom of assembly?

The Supreme Court has interpreted the Commerce Clause of the U.S. Constitution (Art. I, Sec. 8, Cl. 3) as providing power for the government to isolate and quarantine, regardless of other constitutional protections.  The legislature has codified broad power to enable the Secretary of State to prevent the introduction, transmission, and spread of communicable diseases in the United States.

Ebola can only be spread through blood or bodily fluids.  It is not airborne.  Containment should be achievable in societies with the necessary resources and coordination.  For instance, Nigeria, the most populous country in Africa, recently reported that it has contained the spread of the disease with its “contact tracing” system.

What happens if Ebola mutates and becomes airborne or another, more contagious disease appears?  What if the populace is simply led to believe that such a superbug exists?  With the power to quarantine and isolate, we could find ourselves living in a police state.  Maybe certain science fiction movies are not so far from our future reality.

Oregon Court Slams on Brake for “Independent Contractors”

Acker + Associates P.C. Newsletter



Avoiding employment issues by hiring independent contractors instead of employees?  Careful.

Last week the Oregon Court of Appeals ruled that, for the assessment of unemployment insurance tax, Broadway Cab’s drivers are employees.

Broadway Cab argued that its drivers are independent contractors and that it merely provides administrative services (such as dispatch, billing, and marketing).  The Court found that Broadway Cab’s drivers did not (1) maintain a separate work location, (2) routinely engage in advertising and marketing, or (3) have the authority to hire and fire others.

While the Court entertained Broadway Cab’s argument that driver-owned vehicles constitute work locations, the Court concluded that they are not separate from Broadway.  The Court noted Broadway requires its name on the vehicles, dictates vehicle color, and controls where inactive vehicles must park.

The Court found that the use of business cards by some drivers does not constitute routine advertising and marketing.  Also, the Court indicated that drivers must have the authority to hire and fire other drivers–as opposed to mechanics, CPAs, and other professionals.

The fact that drivers are paid directly by riders and pay a fixed weekly amount to Broadway Cab, regardless of what they make from riders, did not sway the Court.

On a national level, McDonald’s also recently found itself on the losing end of an employee versus independent contractor analysis.  The National Labor Relations Board (the federal agency with power to remedy unfair labor practices of private sector employers) announced on July 29, 2014 that the parent company can be held liable for the labor practices of its franchisees.  In other words, the NLRB supersized McDonald’s liability to include potential employment claims of franchisee employees.

[On a personal note, Oregon Appellate Judge Erica Hadlock, who wrote the opinion in Broadway Cab LLC v. Employment Department, was a classmate of mine at Cornell Law School and a colleague at a local law firm. -R.A.]