Monthly Archives: February 2010

President Obama Backs Department of Labor Misclassification Fight

by Evan J. Spelfogel

February 2010

On February 1, 2010, President Barack Obama released his federal budget for the coming fiscal year, including $117 billion for the United States Department of Labor, of which $25 million was set aside expressly to help the DOL combat employee misclassification. This includes, specifically, identifying and litigating against employers that categorize workers as independent contractors when, in fact, they are employees, and that classify as exempt from overtime those employees who do not meet the requirements of the White Collar Exemptions under Part 541 of the Wage and Hour Regulations.

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BCUC Approves BC Hydro’s $825M Purchase of 1/3 of Waneta Dam

Following up on an earlier blog post, today, the British Columbia Utilities Commission approved BC Hydro’s request to purchase a 1/3 interest of the Waneta Dam from Teck Metals Ltd., calling it “in the public interest“. See the attached order from the BCUC.

The BCUC also determined that BC Hydro’s consultations with First Nations with respect to the Waneta Transaction were adequate and upheld the honour of the Crown. The BCUC’s reasons for the decision will be released at a later date.

When the transaction closes, the Waneta Dam, located in Trail, BC, will provide BC Hydro with access to 167MW of firm capacity and 890 GWh/year of energy. Adding the interest in the Waneta Dam will also help the Province meet its electricity self-sufficiency objectives.

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New York Appellate Division Revisits Post-Termination Payment Of Commissions

by Dean L. SilverbergJeffrey M. Landes and Anna A. Cohen

February 2010

The New York Appellate Division, First Judicial Department’s recent decision in Arbeeny v. Kennedy Executive Search, Inc., — N.Y.S.2d —-, 2010 WL 114948 (1st Dept. Jan. 14, 2010), serves as a valuable lesson to employers with commissioned employees. When drafting written commission agreements, as required by N.Y. Labor Law § 191(c), employers must ensure that they clearly define when a commission is considered “earned.” In Arbeeny, the Appellate Division reinforced the long-standing policy that once a commission is earned, it cannot be forfeited, even if the employee who earned the commission is no longer employed when the commission is payable and the commission agreement provides that commissions are only paid if the employee is still employed when the commissions are due to be paid.

In Arbeeny, the plaintiff was employed by Kennedy Executive Search (“KES”), an executive recruitment firm, as a Senior Executive Search Consultant. Plaintiff’s commission agreement provided that he was eligible “to earn commission compensation in respect of placements arranged by Employee on behalf of KES.” (Emphasis added.) According to the wording of arrangement, the commission was earned at the time it was arranged. Payment of the commissions was to be made in the calendar month following the month in which KES received payment from the client, provided KES recovered certain costs. The commission agreement also provided, “[n]o commission shall be due” in the event plaintiff “is not in the employ of KES at the date the commission payment would otherwise be made.”

KES terminated plaintiff’s employment in March 28, 2007. KES received payment from a client in March for a placement that plaintiff had arranged; however, pursuant to plaintiff’s commission agreement, plaintiff’s commission would have been payable in April, after plaintiff’s termination date. As plaintiff was no longer employed by KES when the commission was due, KES attempted to avoid a dispute with plaintiff by paying him a portion of the commission, but did not pay plaintiff the entire amount due. The court noted that after plaintiff’s termination, KES received other fees from placements also arranged by plaintiff; however, KES did not pay any further commissions to plaintiff.

Although the lower court dismissed plaintiff’s complaint with respect to his claim for unpaid commissions, noting that “the employment agreement expressly deprives plaintiff of post-termination commissions,” and there was “no allegation that [KES] failed to pay to [plaintiff] commissions for placements he finalized and for which fees were received prior to his termination,” the Appellate Division reversed this decision and found that plaintiff “has sufficiently stated a breach of contract claim for unpaid earned commissions that he ‘arranged’ prior to his termination.”

While Arbeeny does not prohibit employers from foreclosing the possibility of an employee earning a post-termination commission, to do so, employers should explicitly state that commissions only become earned by the employee if (i) the entire transaction is completed during the employee’s employment, and (ii) the employee remains employed by the company on the date the commissions are due to be paid. To ensure that existing commission agreements are enforceable in the manner intended by the employer, we recommend that employers consult with their Employment Law attorneys to review all commission agreements.

For more information about this Client Alert, please contact:

Dean L. Silverberg
New York
(212) 351-4642
Jeffrey M. Landes
New York
(212) 351-4601
Anna A. Cohen
New York
(212) 351-4922

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February 03, 2010 – Boston, MA
For more information contact: Jeanie Griggs
(617) 589-3895;

On January 26, Davis Malm attorney Paul L. Feldman participated in the “Zoning Practice: MCLE BasicsPlus” seminar. This seminar was designed for the practitioner who needs a solid understanding of zoning including the basics for both residential and commercial properties, handling issues that arise when special permits or variances are required, dealing with nonconforming uses and structures, and dealing with municipalities. Updated information on recent important legislative changes and important judicial changes were also discussed during the seminar. Mr. Feldman was part of a faculty comprised of experienced real estate experts.

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How Can You Telemarket? The OIG Adds a New Twist to DME Suppliers’ Telemarketing Prohibition

by Jana Kolarik Anderson and George B. Breen

February 2010

On January 13, 2010, the Office of Inspector General (“OIG”) revised and reissued its 2003 Special Fraud Alert regarding prohibited telemarketing conduct by durable medical equipment (“DME”) suppliers. There is a new twist.

Both the previous and new OIG Special Fraud Alert explains that DME suppliers are statutorily prohibited from making unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of a Medicare covered item, except in certain limited circumstances.[1] The OIG explained that the statute also prohibits payment to a supplier who “knowingly” submits a claim generated pursuant to a prohibited telephone solicitation and that such claims are false. Consequently, violators are potentially subject to criminal, civil and administrative penalties, including exclusion from the Federal health care programs.

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Vancouver’s Green Olympics

With the 2010 Winter Olympic Games set to leap out of the starting gate on February 12, we thought it would appropriate to highlight some of the initiatives that are helping make the 2010 Vancouver Games the “greenest” and most sustainable Olympic games ever.

As the Globe and Mail reported last week, in Whistler, BC, the sight of the alpine skiing and sliding events for the 2010 Winter Olympics, Innergex Renewable Energy Inc., is days away generating electricity from its $33 million 7.9 megawatt small-scale hydroelectric facility on Fitzsimmons Creek. Innergex signed a 40 year electricity purchase agreement with BC Hydro and the Fitzsimmons Creek Hydro Electric Project will generate an estimated 33,000 MWh annually of green electrons, enough to supply the two ski resorts at Whistler and Blackcomb.
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