|
|
|
 |
 |
      |
 |
Fall, 2007
"New Tennessee Smoking Ban Takes Effect This Fall"As of October 1, under the "Non-Smoker Protection Act," Tennessee businesses must comply compliance with the state's new law barring smoking in all enclosed public places. The statute broadly defines an enclosed "public place" as any "area to which the public is invited," and includes places of employment, including employer-owned vehicles. An enclosed area is all space between a floor and ceiling which is bounded on all sides by solid walls or windows (excluding doorways) which extend from floor to ceiling. However, unenclosed public areas, such as an open-air sports facility, are not subject to the ban. Also, private residences and vehicles are exempted from the Act's coverage, unless they are used for "child care or day care," or for the "public transportation of children or as part of health care or day care transportation." The owner, operator, manager or other person in control of a facility must conspicuously post "no smoking" signs at every entrance to a facility at which smoking is banned. He or she must also inform smokers in violation of the Act of the smoking ban and the penalties, and must inform all existing employees and all prospective employees, upon application, of the smoking ban. Some exceptions to the ban exist: hotels and motels can set aside up to one-quarter of their rooms for smokers, if those rooms are contiguous and the business owner ensures that smoke from those rooms does not flow to other areas of the property. Nursing home and long-term care residents may also be permitted to smoke, consistent with the policies of an individual facility, again so long as smoke from their rooms does not flow to other areas of the facility (an infiltration ban). Another exception which applies only where an infiltration ban is in effect permits businesses with three or fewer employees to set aside a private smoking room. Also, an infiltration ban is required where smoking is permitted on an adjacent non-enclosed part of the property, such as an open-air patio or deck behind an otherwise enclosed restaurant, inside which smoking is banned. Retail tobacco stores which bar minors may also permit smoking, as may certain other tobacco-related businesses, and operators of commercial vehicles may smoke if they carry no passengers. Some of the more widely-publicized exceptions have stringent requirements which will likely prevent them from being widely utilized. The Act's exception for "age-restricted venues" is only applicable to bars or nightclubs (or other establishments) which permit no one (including employees) under the age of 21 to enter their premises and who "card" all persons who attempt to enter (or otherwise verify the ages of their employees). The new law also contains a narrow exception for "private clubs," a term defined by the Act, yet states that the exception is not applicable to any entity established solely for the purpose of avoiding compliance with the new smoking ban. The state's departments of health and labor are responsible for enforcing this new law. Illegal smokers face a $50 civil penalty, and a business owner, manager or person who "otherwise controls" the facility and who fails to enforce the ban faces civil penalties of up to a $500 fine for each day of violation. In the face of continued violations, ultimately, the state could seek an injunction to close a non-compliant business. Enactment of this new law has already spurred complaints and suggestions for modifications, and the legislature may revisit this statute in the future. Employers should also take care to prevent retaliation against smoking co-workers or the public, and at the same time must remain aware of the state's ban on discharging employees for their use of tobacco products outside of public places covered by the Act. For questions about compliance with this new law, contact one of the attorneys at Elliott Lawson & Minor. R. Lucas Hobbs Social Security Administration "No-Match Letters": What's an Employer to Do?The Social Security Administration (SSA) has been sending No-Match letters to employers since 1994. No-Match letters were largely ignored by employers, as there were neither repercussions for ignoring them nor benefits for taking any action thereon. However, recent changes in the No-Match letter program by SSA and the Department of Homeland Security (DHS) have led to significant debate and legal challenges. So, what's an employer to do at this point? History of the No-Match Letter. No-Match letters are responsive to Form W-2s filed by employers, and tell an employer that a name and Social Security number listed on a W-2 filed by the employer do not match SSA records. In 2006, the No-Match letters stated that the letter may have been the result of a spelling error, a name change, or an incomplete W-2. The letters also stated that receipt of the letter "does not imply that you or your employee intentionally gave the government wrong information about the employee's name or Social Security number. Nor does it make any statement about an employee's immigration status." Accordingly, employers usually shared the results with their employees but left it up to the employee to resolve the issue with SSA. Changes by DHS. In June, 2006, DHS proposed to treat receipt of a No-Match letter as evidence that could lead to a finding that the employer had "constructive knowledge" of an employee's unauthorized employment status, which could lead to stiff fines or other penalties for the employer. Additionally, DHS proposed to create a "safe-harbor" provision for employers, which created affirmative steps for an employer to follow upon receipt of a No-Match letter. Following those steps would preclude DHS from imposing constructive knowledge of the employee's status on the employer, and would provide a "safe harbor" from the stiff penalties imposed on employers who knowingly employ unauthorized aliens. DHS proposed the following steps for employers to create the "safe harbor": (1) the employer must check its own records for the source of the mismatch within 30 days; (2) if the discrepancy was not due to error in the employer's records, then the employer must request the employee to confirm his information and to resolve the discrepancy with SSA within 90 days; (3) if the employee couldn't resolve the issue with SSA in 90 days, the employer must require the employee to complete a new Form I-9, and the employer could not accept any documentation for the I-9 that contained the "mismatched" Social Security number. If the employee was unable to produce alternative documentation, the employer was left with the choice of terminating the employment or risking stiff penalties and heavy fines for unauthorized employment. This new safe harbor rule was adopted by DHS on Aug. 15, 2007 and was set to become effective on Sept. 14, 2007, just in time for SSA's No-Match letters for tax year 2006. SSA planned to include with its No-Match letters an explanation from DHS of the new rule, and a note that receipt of a No-Match letter may indicate that the name or Social Security number reported was false, or that the number was assigned to someone else. Criticism and Challenges to the New Rule. Immediately after DHS announced its adoption of the new rule, advocates for immigrants' rights, labor unions, and business owners banded together to protest the expected effect of the new rule. SSA announced that it had in its queue for the 2006 tax year approximately 140,000 No-Match letters, which listed almost 8 million employees. The legal implication of the revised No-Match letters was that these employees are potentially engaging in unauthorized employment. SSA admitted that the majority of those listings were due to simple record-keeping errors but noted that it would be unable to resolved all those errors within the 90-day period required by DHS's safe harbor rule. Employers would then face the unpalatable predicament of having to fire workers or risk penalties. A consortium of labor unions and business groups filed a case in federal court in California, asking the Court to temporarily prevent SSA from issuing the No-Match letters in its queue, while a challenge to the legality of DHS's new safe harbor rule is litigated. The Court issued a temporary restraining order, and SSA was not permitted to issue the No-Match letter as planned on September 14. On October 10, the Court determined that the plaintiffs were more likely than not to succeed in challenging the legality of the safe harbor rule, and the Court issued a preliminary injunction. The Court will next decide whether to permanently prohibit DHS from implementing its new rule. Until that decision, and as of the writing of this article, SSA is prohibited from sending out No-Match letters and DHS is prohibited from enforcing its new rule. While no one knows what the Court will decide, after the Court's ruling on the preliminary injunction, many believe that the Court will ultimately declare DHS's new safe harbor rule to be unlawful, but that the Court will allow SSA to re-institute its No-Match letter program under the old rules. Congressional action could occur at any time, however, and the decision may be taken out of the hands of the Court. What Happens Now? As an employer, you may take comfort in the fact that SSA is prohibited from issuing No-Match letters until the Court decides this question. Once the Court rules, however, SSA may be permitted to issue its No-Match letters. If you receive a No-Match letter, you should contact legal counsel at Elliott Lawson & Minor to discuss the proper response, based on the Court's ruling or other legal action. Dawn Figueiras New Tennessee Legislation Allows Certain Non-Competition Agreements For Health Care ProvidersEffective January 1, 2008, a new statute in Tennessee will allow non-compete agreements for health care providers in certain limited situations. The new legislation is an apparent response to the 2005 Tennessee Supreme Court case of Murfreesboro Medical Clinic, P.A. v. Udom, which held that physicians' covenants not to compete conflict with public policy and are therefore unenforceable. The Udom Case The Udom case involved a covenant not to compete contained in Dr. Udom's employment agreement with Murfreesboro Medical Clinic. The Court in Udom reiterated the well-established premise that covenants not to compete are disfavored as restraints of trade, but are enforceable "if there is a legitimate business interest to be protected and the time and territorial limitations are reasonable..." The Court also recited the factors determinative of reasonableness: "(1) the consideration supporting the covenant; (2) the threatened danger to the employer in the absence of the covenant; (3) the economic hardship imposed on the employee by the covenant; and (4) whether the covenant is inimical to the public interest." In the Udom case, the court focused on the public interest factor to declare Dr. Udom's non-compete agreement unenforceable. The Court stated that "[t]he right of a person to choose the physician that he or she believes is best able to provide treatment is so fundamental that we can not allow it to be denied because of an employer's restrictive covenant. ... Public policy considerations such as the right to freedom of choice in physicians, the right to continue an on-going relationship with a physician, and the benefits derived from having an increased number of physicians practicing in any given community all outweigh the business interests of an employer." The Court also noted that the Tennessee legislature had already addressed the issue of physician non-compete agreements in T.C.A. § 63-6-204. That statute allows covenants not to compete against physicians in two situations: "(1) when the employer is a hospital or an affiliate of a hospital, and (2) when the employer is a 'faculty practice plan' associated with a medical school." The Court therefore surmised that since the legislature allowed physician non-compete agreements in the limited circumstances addressed in T.C.A. § 63-6-204, that it did not intend to allow them in other situations. The New Legislation In an apparent response to the Udom case, on June 7, 2007 the legislature passed a new statute that specifically allows "health care provider" non-compete agreements, so long as they meet certain requirements. Governor Bredesen approved the new statute on June 21, 2007, and it will go into effect on January 1, 2008. The legislation applies to the following health care providers: podiatrists, chiropractors, dentists, physicians, optometrists, and psychologists. It specifically does not apply to "physicians who specialize in the practice of emergency medicine or radiology." In the new statute, a health care provider non-compete agreement set forth in an employment agreement is deemed reasonable if (1) the restriction is in writing signed by the health care provider and the employing or contracting entity; (2) the duration of the restriction is two years or less; and (3) the maximum allowable geographic restriction is the greater of (i) a ten mile radius from the primary practice site of the health care provider while employed or contracted or (ii) the county in which the primary practice of the health care provider is located while employed or contracted. If there is no geographic restriction stated in the agreement, an agreement is still reasonable if it only restricts the health care provider from "practicing his or her profession at any facility at which the employing or contracting entity provided services while the health care provider was employed or contracted with the employing or contracting entity." Even if all of those requirements are met, the legislation carves out an exception for established providers. That exception states that any aforementioned non-compete agreement "shall not be binding on a health care provider who has been employed by, or under contract with, the employing or contracting entity for as least six (6) years." Unlike the Udom case, the new legislation also addresses non-compete agreements contained in contracts to buy or sell a health care provider's practice. Those agreements have long been less disfavored than non-compete agreements in the employment context, because of the presumed equal bargaining power of the parties to the buy-sell agreement. The new legislation continues that trend, providing that a non-compete agreement in conjunction with the purchase or sale of a provider's practice is enforceable "provided the duration of the restriction and the allowable area of the restriction are reasonable under the circumstances." The statute provides that "[t]here shall be a rebuttable presumption that the duration and area of restriction agreed upon by the parties in such an agreement are reasonable." Eric W. Reecher
Elliott Lawson & Minor, P.C.
Copyright © 2012 by Elliott, Lawson & Minor P.C. All rights reserved. Disclaimer | Site Map |
|
 |
 |
