Tobacco Use Cessation Programs

Insurance coverage for “quit smoking” programs is now mandatory in Illinois by virtue of an amendment to the Illinois Insurance Code that went into effect earlier this year. That is, insurers who provide group accident and health insurance plans must now offer (for additional premium) coverage for the expense of participating in a “tobacco use cessation program.”

Tobacco use is the number one cause of preventable death and disease in Illinois, costing $4.1 billion annually in direct health care costs and another $4.35 billion in lost productivity. (See Public Act 097-0592)

Serving Our Seniors: Living Wills

Narrated by Bill Kurtis

FUNDAMENTAL DO'S AND DON'T'S OF THE HIRING PHASE

The hiring phase is complicated. Here are some of the basics of what may and may not be asked about and required during the hiring process.

Race, Sex, Age, Disability

Inquiries about race, gender, birthplace, religion, marital status and disability are prohibited with these exceptions. It is all right to identify the essential functions of the job and ask how the applicant would perform them, and also to ask whether the spouse of the applicant is an employee of the employer.

It is permissible to ask for the full name of the applicant and whether he or she has ever worked for the company under a different name, but impermssible to ask for a maiden name.

The applicant may be asked how long he or she has lived in the state or the city but not whether he/she owns or rents. The only question that can be asked about age is whether the applicant is at least 18 years old, and then only to determine whether the applicant is of legal age for employment.

A LEGITIMATE BUSINESS INTEREST ON THE PART OF AN EMPLOYER IS A PREREQUISITE FOR ENFORCEMENT OF A COVENANT NOT TO COMPETE AFTER ALL.

An employer who would enforce a covenant not to compete must establish that enforcement is necessary to protect a legitimate business interest. That has been the law in this State for a long time. But there had been some doubt about it since 2009, when the appellate court in Sangamon County held that all that mattered was that the covenant be reasonable in time and area. (Sunbelt Rentals Inc. v. Ehlers, 394 Ill.App.3d 421 (4th Dist. 2009)). The Illinois Supreme Court has just set the record straight about that. (Reliable Fire Equipment Company v. Arredondo et al., Docket No. 111871).

In so doing, the Court announced a totality-of-circumstances doctrine: The enforceability of a covenant not to compete must henceforth be determined on a case by case basis evaluating the totality of circumstances in the given case. The presence or absence of a legitimate business interest had hitherto turned on two questions: One, was there a misuse of confidential information? Two, was there a "near permanent" relationship between the employer and the customer?

The answer to both those questions was "no" when the Reliable Fire case was in the trial court (DuPage County) and the Appellate Court (Second District). So both of those courts refused to enforce the pertinent covenants not to compete.
Why, then, a different result in the Supreme Court? Because the Illinois Supreme Court may ignore its own precedents but our lower courts may not. Although there were no trade secrets and no "near permanent" customer relationships in the case, there was flagrant competition on the part of the defendants: While they were still in the employ of the plaintiff-employer, they were using company time and company resources to sell competing product to their employer's customers for their own account.

Employee or Independent Contractor?

by David McCarthy

As a rule an employer must withhold federal income tax, withhold and pay social security (FICA) and Medicare taxes, and pay unemployment tax (FUTA) on wage paid to an employee; but need not withhold or pay any federal taxes on payments to independent contractors.

The key to distinguishing an employee from an independent contractor is the degree or extent to which the employer has the right to control what will be done and how it will be done.

The price of guessing wrong can be a steep one.

One way to reduce or eliminate the risk is to ask the Internal Revenue Service for a determination. This is done by submitting IRS form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

Newsletter -- October 7, 2011

http://myemail.constantcontact.com/Newsletter-from-the-Law-Offices-of-David-McCarthy.html?soid=1102904774473&aid=gDjt5p6OIUA

The Pendulum Swings

by David McCarthy

Oliver Wendell Holmes
told us that the life of the law is not logic but experience.

Many years ago, when your correspondent was a newspaper reporter, elderly residents in the suburbs north of Chicago were prey to a home remodeling scheme that would start with an offer of a free inspection of the chimney of a house. Invariably a few bricks would be kicked loose. Then the ever-so-earnest contractor would report this disturbing find to the homeowner, collect a substantial advance to make the repairs, and vanish into the hills of Tennessee. That practice and others that gave home remodelers a bad name led to enactment of the Home Repair and Remodeling Act, yet another example of the law of unintended consequences.

The statute requires contracts in writing for repairs in excess of $1,000.00 and delivery of pamphlets full of warnings to the homeowner/ customer and details about their rights. Naturally, this reversed the dynamic, and with the help of case law, unscrupulous homeowners preyed upon contractors, obtaining lavish improvements to their homes and then stiffing the contractors on the grounds that the contract was unwritten or the pamphlet had not been delivered.

The pendulum recently started to swing back to equilibrium owing to an especially outrageous example of overreaching and some common sense in the Illinois General Assembly and the Illinois Supreme Court. A married couple hired a friend to convert a three-flat into a single-family home. The contract was unwritten, and it escalated from $187,000.00 to $500,000.00 as they added ever more improvements, refinements, and upgrades. They paid the first $65,000.00 but refused to pay a penny more till all the work was done. The contractor went in hock and borrowed $150,000.00 to finish the job. Did he do the work and do it right? You bet. Apart from a quibble over a $300.00 repair of flooring the homeowners approved all the work and then stiffed the contractor for more than $300,000.00.

The contractor sued the homeowners. They obtained dismissal of all counts in the trial court on the grounds that the statute had been violated. The appellate court saved one count that allowed the contractor to sue for the reasonable value of his services. The case reached the Illinois Supreme Court, and there all three counts of the contractor's claim were upheld, not least because of an amendment to the statute. A clause that declared it "unlawful" to make more than $1,000.00 in home repairs without a written contract was replaced by a clause which allowed a homeowner damaged by a violation of the statute to sue under the consumer fraud act.

The upshot: A couple of cherry pickers who thought that $65,000.00 and a lost friendship was a small price to pay for a $500,000.00 house got their comeuppance. There is no joy in saying this: One of the homeowners was an attorney with a practice in real estate.