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An arbitration agreement is a contract, in which two or more parties agree to settle a dispute outside of court.  Usually, an arbitration agreement is a clause in a larger contract. The arbitration clauses are often subjects to hotly disputed litigation, stemming from the vague verbiage and possible inconsistencies with other parts of the contract.  One of such issues – the admissibility of the “Wholly Groundless Exception” – was decided by the Supreme Court in January in the case of Henry Schein, Inc. v. Archer & White Sales, Inc , 586 U.S. __ (Jan. 8, 2019).  This is a tricky issue for those in the trucking industry who include arbitration clauses in their contracts with drivers.

What Is A Wholly Groundless Exception?

A “wholly groundless exception” was born out of the “delegation clauses” ordinarily found in arbitration agreements.  A delegation clause represents an agreement between parties that an arbitrator, not the court, will determine the threshold issues of enforceability of the arbitration clause and the scope of the arbitration agreement.  In other words, it is up to an arbitrator to decide whether, according to the contract or the rule of law, an issue may be decided by arbitration or needs to be determined by a judge.  These clauses were held to be valid by the Supreme Court in 2010 in Rent-A-Center, West, Inc. v. Jackson, 561 US 63 (2010). Since then, several circuits decided that this provision must be limited; thus creating a so-called “wholly groundless exception” to the delegation clause. This exception lets parties avoid compelling arbitration in cases where the claims are so obviously not within the scope of the agreement, that it would be a waste of time to go through arbitration before filing a lawsuit.

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Employee expense reimbursement is now required by law in Illinois, at least under certain circumstances, making the Land of Lincoln the ninth U.S. jurisdiction to statutorily impose such a requirement.   In doing so, Illinois joins the company of other states with similar rules.   Employers of all shapes and sizes should get up to speed on the new law, an amendment to the Illinois Wage Payment Collection Act that took effect on January 1, which requires employers to reimburse all “necessary expenditures” directly related to the employer’s services.

The new law (820 ILCS 115/9.5) defines “necessary” as “all reasonable expenditures … required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” This means that the employer must have either “authorized or required” the employee to purchase the product or service and must receive appropriate documentation within 30 days—unless the employer allows for a longer time frame.

Employers should have written expense reimbursement policies that lay out what they pay for and how much, along with what’s requested in terms of documentation; although if an employee cannot produce this documentation, such as a receipt, the employer must accept a “signed statement” from the employee instead.   This written policy can set caps for different categories of expenses and the employer does not need to reimburse more than the capped amount, provided the caps amount to more than “de minimis” reimbursement—a term the amendment does not define. In other words, the best guideline one can follow is: be reasonable, based on costs in your area.

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Estate plans should account for the disbursal of all assets, lest they become marooned in probate purgatory.  People are forgetting that they have digital assets that need to be accounted for.

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Protecting Your Digital Assets

Digital assets like cryptocurrency, social media accounts, e-commerce and online accounts need to be cared for just as much as conventional ones, so that family members are able to account for and access them as property, wealth and assets are transferred from one generation to the next.

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Chicago-Business-Lawyer-George-Bellas-300x177A Legal Guide to Holiday Parties

Alas, the holiday season is upon us!  It’s time to celebrate the successes of the prior year with a festive holiday party, where employees can let off steam, socialize and spread cheer.  So, who should you contact first? A caterer… or a DJ… or your friendly Chicago business lawyer?  Although it may not sound like the most fun way to kick off celebrations, calling your company’s lawyer to discuss legal guidelines and potential liability pitfalls may be a good idea.  We don’t mean to be scrooge and kill the fun, but times have changed.

To ensure that your holiday party is memorable for the right reasons, this guide may help understand some concerns are and how to avoid potentially troublesome situations.

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In late September, the social media behemoth Facebook told the World Wide Web that about 50 million accounts had suffered a security breach. Hackers had stolen password tokens for signing into Spotify, Instagram, Yelp and thousands of other third-party applications.

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Facebook Security Breach

Facebook automatically logged out the 50 million users directly affected and another 40 million who might have been implicated, and the company said that passwords weren’t compromised. But the incident serves as a warning to all who have multiple passwords across the various sites and accounts they use—in other words, virtually everyone in the First World, and certainly business owners—to take this opportunity to better manage account security.

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Few would argue that President Trump engages in what could be described colloquially as “rhetorical hyperbole” when logged on to his Twitter account.   But a recent court finding that dismissed a defamation suit filed against Trump by porn star Stormy Daniels, on the grounds that a tweet by the president could legally be described in those terms, rather than as potentially factual statements—defamation cases require that a statement be factually false—could have a significant effect on how libel law applies to social media going forward.

Daniels, whose real name is Stephanie Clifford, alleges that she and her daughter were threatened on the street in Las Vegas for agreeing to participate in an In Touch magazine article about her past relationship with the president. “Leave Trump alone. Forget the story,” she was allegedly told in May 2011.

Trumps-Stormy-Tweet-wasnt-defamation-300x199After Trump’s election, Daniels commissioned a sketch artist to create a rendering of the person who had threatened her, and she released the sketch publicly on April 17, 2017.  On the next day, a tweet from @RealDonaldTrump read, “A sketch years later about a nonexistent man. A total con job, playing the Fake News Media for fools (but they know it)!”

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Workers Classification – Employees or Independent Contractors

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Independent Contractor or Employee?

As a business owner or an employer, when you hire a new worker, you will be reintroduced to the question – should you classify the worker as an employee or an independent contractor?  In order to make this huge business decision, you need to fully understand the difference between an employee and an independent contractor and the importance of classifying them correctly.

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Generally speaking, illegal immigrants have the same protections under labor laws as American citizens, with some minor exceptions.

Minimum Wage Laws:  addition to federal laws, each state has its own minimum wage requirements; where federal and state laws differ, the higher wage applies.  Minimum wage laws apply to all workers the same, regardless of immigration status. Minimum wages in the U.S. are primarily set forth by the federal government, under the Fair Labor Standards Act (“FLSA”).  But virtually every state has its own minimum wage law as well.  Though the federal law trumps the state law, if state law mandates greater benefits, the employer must pay the higher rate.

Importantly, the FLSA makes no exception for illegal immigrants.  They’re therefore entitled the same benefits as American citizens.   Currently, the FLSA minimum wage is $7.25 per hour for non-exempt employees, and the New York minimum is the same. The minimum under Illinois law is $8.25.

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In case you missed it, on June 21 the Supreme Court of the United States passed a judgment that states were now allowed to impose taxes on online sales.  This overrules its previous decision to rule out tax collection on stores that did not have a physical presence in that state.

So what does this law means and how is this going to look for your online business?

Before we go further into the South Dakota vs. Wayfair Inc. ruling, it is important to be familiar with how sales tax on online purchases used to work until now. The previous verdict from 1992, also known as Quill Corp. vs. North Dakota ruling, set forth that online retail merchants only had to impose taxes on their online sales in states where they had a physical presence or a “nexus.”   This means that the customers were required to pay the tax on the purchase to their home state directly.

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self-driving-uber-300x165The recent deaths of a motorist and a pedestrian in separate incidents in California and Arizona, respectively, both of which are under National Transportation Safety Board investigation, raise the question of whether autonomous driving technology has become safe enough for day-to-day roadway use.

A man from Peninsula, California, died when his Tesla Model X, which data from the vehicle log showed was in autopilot mode at the time, crashed into a concrete barrier on Highway 101 in nearby Mountain View.

Other Tesla drivers reported similar experiences near this same reeway barrier and others, corroborating accounts of the overall unreliability of the autopilot system near such dividers. At least one Tesla owner who drove near the barrier in question posted several videos showing autopilot steering to the left—straight toward the divider.

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