North America

Arnstein & Lehr Attorneys Win Rare Dismissal of Class-Action Lawsuit Against Beverage Company

Arnstein & Lehr attorney Joel B. Rothman

Joel B. Rothman

Arnstein & Lehr attorney Harley Storrings

Harley Storrings

Arnstein & Lehr attorneys won a rare dismissal of a class-action lawsuit filed in California against Celsius Holdings, a Boca Raton-based maker of functional beverages for health conscious consumers.

California courts are usually kind to class-action lawsuits, but a state court judge granted Arnstein & Lehr partner Joel Rothman’s motion to toss out three claims brought under California Legal Remedies Act and the state’s business and professions code for false and misleading advertising.

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Estate Planning Alert: Roth recharacterization may save tax — October 15, 2011 deadline nears

If you did a Roth IRA conversion in 2010, and the value of the Roth IRA has decreased since the date of that conversion, you may be able to recharacterize the Roth IRA to a traditional IRA before October 17, 2011.

Roth IRAs remain a very useful planning tool. However, recent drops in the stock market may cause you to reconsider a 2010 conversion to a Roth IRA. For example, if you converted a $100,000 traditional IRA to a Roth IRA in 2010, and that account is now worth $90,000, you are paying tax on $10,000 that you no longer own.

If you “recharacterize” the Roth IRA to a traditional IRA before the applicable deadline, you will not be required to pay the income tax on the 2010 Roth IRA conversion (or, if applicable, you will be entitled to a refund of the tax you already paid), and your IRA will be treated as a traditional IRA. In other words, by recharacterizing your Roth IRA, the Roth IRA conversion is undone. 

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Robert E. McKenzie writes Forbes blog post on new IRS worker reclassification program

Arnstein & Lehr Attorney Robert E. McKenzie

Robert E. McKenzie

Chicago Partner Robert E. McKenzie wrote a post for Forbes magazine’s online blog that appeared on Tuesday, September 29. Mr. McKenzie’s post discusses the IRS’ new Voluntary Classification Settlement Program (VCSP) for companies with misclassified workers. He discusses in the post the dangers of IRS examinations if an employer has been found to misclassify its workers, employer eligibility guidelines, VCSP agreements, applying for VCSP, and other considerations. To read the complete article, please click here.

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UNFAIR DISMISSAL

Without question, it is more common to hear of Wrongful Dismissal, than Unfair Dismissal. Perhaps this is more due to ignoranceof the law, than anything else.

Notably, Sections 34 and 35 of the Employment Act makes provisionthus:

34. Every employee shall have the right not to be unfairly dismissed, as providedin sections 35 to 40, by his employer.

35. Subject to sections 36 to 40, for the purposes of this Part, the question whether the dismissal of the employee was fair or unfair shall be determinedin accordance with the substantial merits of the case.

For the full article, please click here.

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McDonald Hopkins Law Firm Elects Four Members: Anne Owings Ford, Michael J. Kaczka, Jessica T. Lifshitz, and Owen P. Quinn

Cleveland, Ohio (October 3, 2011) – McDonald Hopkins LLC, a business advisory and advocacy law firm with offices in Chicago, Cleveland, Columbus, Detroit, Miami, and West Palm Beach,  announces the election of four attorneys to the firm’s membership.

Anne Owings Ford (Cleveland) – Member, Litigation

Michael J. Kaczka (Cleveland) – Member, Business Restructuring and Bankruptcy

Jessica T. Lifshitz (West Palm Beach) – Member, Business Law

Owen P. Quinn (Chicago) – Member, Litigation

“We are always gratified to see our attorneys advance in their careers,” said Carl J. Grassi, president of McDonald Hopkins. “All four of these professionals are talented lawyers who have demonstrated their meaningful value to our clients. They have contributed to the growth of our firm and I am confident they will continue to help us thrive. In addition to these promotions, we continue to recruit attorneys for our national practice groups.”

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"How recent oil and gas discoveries will impact Ohio businesses and landowners," Jeff Huntsberger interviewed by Smart Business Magazine

How recent oil and gas discoveries will impact Ohio businesses and landowners
Jeff Huntsberger interviewed by Smart Business Magazine

It was announced recently that the Utica Shale formation in Ohio is not only a source of natural gas, but oil as well. New technological advancements — especially in horizontal drilling techniques and the hydraulic fracturing of the shale (“fracking”) — along with the fact that the oil appears to be of high quality, is bringing drilling to Ohio a lot faster than originally thought.

“Drilling has been taking place in the Marcellus Shale in Pennsylvania and West Virginia for a while now,” says Jeffrey R. Huntsberger, a member of the Business Department and the Real Estate Practice Group at McDonald Hopkins LLC. “Geologists knew there was natural gas in Ohio’s Marcellus formations, but figured Ohio wouldn’t be as rich a source as Pennsylvania. All of that has changed now with the discoveries in the deeper Utica Shale formation. For example, the CEO of Chesapeake Energy Corp. recently said that his company expects to invest $10 billion per year in Ohio for the next couple of decades.”

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"Are you legally vulnerable?" Jim Boutrous and Jim Giszczak interviewed by Smart Business Magazine

Are you legally vulnerable?
Jim Boutrous and Jim Giszczak

A recent amendment to the Americans with Disabilities Act has lowered the threshold of who qualifies as disabled ? former distinctions are gone between a person with a disability who was recovering well and one who was not.

“The amendment has classified both as disabled under the statute,” says Jim Boutrous, attorney with McDonald Hopkins LLC in Detroit.

“Companies need to look at accommodation requests to see that if you are making an employment decision, you are doing it for legitimate bases, independent from the protected classification,” he says.

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"Check your multistate tax liabilities," Chuck Zellmer interviewed by Smart Business Magazine

Check your multistate tax liabilities
Chuck Zellmer

Governments are looking to find new sources of revenue to hold their heads above water during troubling economic times or just to generate more income, and they are becoming more active in tracking down multistate and even multilocal tax liabilities.

“The states are becoming more and more active in making certain that the taxes they can charge are indeed charging,” says Chuck Zellmer, attorney for McDonald Hopkins LLC.

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IRS Announces the Voluntary Classification Settlement Program

Arnstein & Lehr attorney E. Jason Tremblay

E. Jason Tremblay

On the heels of the U.S. Department of Labor’s announcement that it was going to share independent contractor misclassification information with the Internal Revenue Service (“IRS”), the IRS recently announced the implementation of the “Voluntary Classification Settlement Program” (“VCSP”). The VCSP is intended to encourage employers who have misclassified workers, for a relatively small payment to the IRS, to reclassify those workers as employees for federal employment tax purposes. In effect, this allows employers to avoid all but 10% of the past employment tax liability that the companies would have owed for prior years. The IRS will also not conduct employment tax audits of the companies for prior years with respect to the classification of the workers.

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DOL Set to Share Employee Misclassification Information with the IRS and States

Arnstein & Lehr attorney E. Jason Tremblay

E. Jason Tremblay

In what appears to be another example of cracking down on the improper use of independent contractors, the U.S. Department of Labor (“DOL”) recently announced it is entering into agreements with the IRS, as well as some state agencies (including Illinois state agencies), to share information regarding employers who have improperly classified employees. The DOL maintains that these arrangements are necessary to share information and coordinate law enforcement with the participants to end the practice of misclassifying employees. However, it is clear that this collaboration has as much to do with enhancing the inflow of tax revenues as it does with protecting employees.

What this practically means for businesses is that if the DOL determines that an independent contractor is misclassified, it can share that determination and evidence with, for example, the Illinois Department of Employment Security or other state agencies, which could very well lead to additional investigations, fines, fees and liability upon the business beyond those by IDOL. In light of this, every company with a business model based, in whole or in part, upon the use of independent contractors should prepare itself for this new enforcement activity and immediately consult with an employment attorney to perform an audit of those workers.

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