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FMG Law Blog Line

Archive for March, 2013

U.S. Unemployment Rate Edged Down in February 2013

Posted on: March 29th, 2013

By: Brad Adler

The U.S. Bureau of Labor Statistics recently reported that the U.S. unemployment rate fell to 7.7 percent in February, down slightly from 7.9 percent in January, 2013. Among the major groups, the unemployment rate for Caucasians declined in February to 6.8 percent while the rates for adult men (7.1 percent), adult women (7 percent), teenagers (25.1 percent), African-Americans (13.8 percent), and Hispanics (9.6 percent) showed little or no change.

While the unemployment rate has steadily declined since it hit 10 percent at the height of the “Great Recession” in late 2009, even the current rate is dramatically higher than, for instance, the employment rate in May 2007 (4.4 percent). While commentators debate the impact of unemployment on employment discrimination claims, the EEOC’s charge statistics seem to support a direct connection. In 2007, there were 82,792 EEOC Charges filed. Only three years later and the full impact of the Great Recession hitting employers and their workforce, EEOC charge filings swelled to 99,922. All of this is to say that, while the economy has rebounded (some say only modestly) since 2009/2010, employers need to be aware that the current unemployment rate can contribute to an increased sensitivity by employees and an environment that breeds EEOC Charges.

IMAGE Raises the Bar for Immigration Enforcement Practices

Posted on: March 29th, 2013

By: Kelly Morrison

In Georgia, the mandatory E-Verify date is creeping closer. As of July 1 of this year, every employer with 10 or more employees will be required to register and use the online program, which verifies employment eligibility information recorded on the Form I-9.

But E-Verify is only the tip of the compliance iceberg. While Washington debates the future of immigration compliance, Immigration and Customs Enforcement (ICE) is already moving beyond E-Verify, encouraging employers to implement a lengthy list of “best practices,” which it identifies with the acronym “IMAGE” (ICE Mutual Agreement Between Government and Employers). Cobb County recently made waves by agreeing to this voluntary partnership with ICE, and has considered proposals to extend the requirement to all its contractors.

In order to be IMAGE-certified, an employer must: (1) complete an IMAGE questionnaire through ICE; (2) enroll in E-Verify within 60 days; (3) establish a written hiring and employment eligibility policy that mandates an internal I-9 audit at least once per year; (4) submit to a Form I-9 inspection by ICE; and (5) review and sign a formal partnership agreement with ICE.

Although this program has been in existence since 2006, it is only now beginning to gain traction—mostly among employers whom ICE solicits to act as “industry leader” examples in implementing these recommended best practices. Most employers understandably find these suggestions onerous and will not rush to implement them. It is important to understand, however, that these “best practices” represent ICE’s view of the future of immigration compliance, and at least some of these measures are likely to be incorporated into future legislation.

ICE’s IMAGE program and best practice recommendations can be viewed here.

Minnesota High Court Rules that Additional Insured is not Covered in the Absence of Negligence of the Named Insured

Posted on: March 28th, 2013

By: Bart Gary

Many contracts, especially construction contracts, will contain a provision whereby one party, usually a subcontractor, agrees to add the other party to the contract, usually the general contractor, as an additional insured on the former’s insurance coverage. Where the additional insured has its own coverage, the question arises as to whether there are in effect multiple insurance coverages for the additional insured, and whether the named insured’s insurance policy must answer for claims against the additional insured.

The Supreme Court of Minnesota was confronted with a very unusual set of facts. A general contractor was an additional insured in the liability policy of its subcontractor. The general contractor directed the subcontractor where to install sheet piles; however, the subcontractor actually drove the piles and thereby damaged underground pipes. A jury had determined that the subcontractor was not negligent in damaging the pipes.  The general contractor nevertheless contended that it was covered under the subcontractor’s liability insurance policy as an additional insured.

The Court held that the additional insured endorsement in the subcontractor’s insurance policy is plainly for vicarious or derivative liability of the additional insured based upon the negligence of the principal, or named, insured. Vicarious liability arises where one party, for example an employer, is liable for the conduct of an employee by the relationship. Since the general contractor could be vicariously liable only if the subcontractor was liable, the jury’s exoneration of the subcontractor meant that the general contractor was not covered as an additional insured on the subcontractor’s policy. Eng’g. & Constr. Innovations, Inc. v. L.H. Bolduc Co., 825 N.W.2d 695 (Minn. 2013).

FDIC Publicizes Failed Bank Settlements

Posted on: March 28th, 2013

By: Kelly Morrison

In an apparent response to criticism for their lack of transparency, the FDIC has published dozens of settlement agreements arising out of the now 106 lawsuits the agency has filed against failed banks. The FDIC has indicated that it will post additional settlement information by March 31.

These settlement agreements provide valuable insight to both insurance carriers and former directors and officers sued in their individual capacities. For instance, an August 2012 settlement agreement between the FDIC and Heritage Community Bank reflects a payment of $3.15 million—exclusively funded by the Bank’s D&O insurer.  Conversely, an April 2012 settlement arising from the Corn Belt Bank and Trust Company litigation shows that the individual defendants paid $266,000 out of pocket, while the D&O insurer chipped in another $700,000.

Those interested in perusing these settlement agreements for valuable insights on current cases may locate them here.

Surgeons Leave Patients with Unexpected Surprises

Posted on: March 27th, 2013

By: Scott Rees

The article below discusses the surprisingly high frequency of surgical instruments left inside a patient’s body following surgery, and the costs involved. Those sponges become very expensive when they are accidentally left inside.

USA Today – “What Surgeons Leave Behind Costs Some Patients Dearly”