In general, the Internal Revenue Code allows for a deduction of reasonable and necessary expenses incurred in the production of taxable income. This may entitle you to a deduction of some of the legal fees paid in pursuit of post-separation support, alimony, taxable pension or annuity payments and other tax advice in connection with a divorce. You should consult with a tax professional for advice on whether or not your legal fee payments are deductable.
Over the holiday, the Court of Appeals issued a couple of employment-related decisions regarding situations that often come up.
Non-Compete Agreements/Competition with Former Employer
In Curry’s Transportation Services, Inc. v. Dotson et al., the Court of Appeals addressed the enforceability of a non-compete and competition with a former employee. Since I want to address two cases in this post, I’m going to give the cliff notes rather than dissect the whole case.
- Non-compete agreements are unenforceable if they are unnecessary to protect the business interest. CTS’s information did not require protection. Its customers were not confidential. It priced its service the exact same way all trucking companies price its service—rates were generally standardized across the industry. Business in the trucking industry is not dependent upon personal contacts and relationships or confidential information. CTS did not require most of its drivers to sign non-competes and/or confidentiality clauses. All these facts together led the court to find that the non-compete was unenforceable. Again, it was all the facts that led to the conclusion. Simply requiring employees to sign a non-compete will not make it enforceable. There must be a legitimate business interest that needs to be protected.
- Preparation to form a competing business is generally lawful unless an individualized harm to the former business beyond additional competition results from the preparation.
2. The Office Romance
- Respond appropriately to harassment/misconduct in the workplace. Davenport Cleaners knew what was happening in the workplace. It was aware of the name-calling between the two individuals. From the facts presented in this case, it appears that Davenport Cleaners did little to prevent/rectify the situation. When complaints are made (even if the employee does not “want to get the harasser in trouble”) take action. Investigate and discipline when necessary and as appropriate. Don’t let the problems get out of hand.
Happy New Year!
In the wake of domestic violence charges against NFL players and the public’s outrage at the NFL’s response as a business owner you may be thinking how you might respond when faced with an employee charged with domestic violence or an employee who is a victim of domestic violence. Or maybe you believe domestic violence does not affect your workforce.
According to an article published by the ABA, one out of every four women will be a victim of domestic violence. Additionally, almost 50% of employed victims of domestic violence report that they lost their jobs due to, at least in part, the domestic violence, and almost 50% of sexual assault survivors lose their jobs or are forced to quit their jobs. Two-thirds of employed victims reported that their abusers harass them at work and almost 50% either missed work or were prevented from working due to the abuser. Certainly domestic violence affects the workplace.
Employers should respond to the real potential of domestic violence in their workplace with leave policies, safety plans, and discipline policies that address such matters. Leave policies should be adapted to provide employees with the knowledge and understanding that leave will be permitted to address the effect of violence in an employees’ life. Likewise, since abusers have the tendency to harass the victim at work, employers should develop a safety plan that provides safety and protection to the employee during working hours, including restricted access, security, and police notification in extreme situations. On the flip-side, employers should be prepared to respond with appropriate discipline, including termination, when an employee is the perpetrator of domestic violence, particularly when crimes are committed using the employer’s resources or during working hours.
More than policies, however, an employer should train its human resources staff or managers to identify potential domestic violence victims and handle such issues that might arise. Employers should also inform employees that it takes domestic violence seriously by educating the employees on the policies and procedures that are available should domestic violence occur.
Mark Landa has been selected to be included in the 21st Edition of the The Best Lawyers in America for his work in the practice area of Environmental Law. Inclusion in Best Lawyers is based on a peer-review survey comprising more than 5.5 million confidential evaluations by top attorneys. Mark has been included in Best Lawyers every year for over a decade. Congratulations, Mark!
The 2014 session of the Iowa General Assembly brought a few changes to the public utilities law practice in Iowa. Lawmakers focused their utility related discourse on tax credits for renewable energy, renewable fuels and solar energy, purview of the Iowa Utilities Board, water service requirements, delinquent customer accounts, and notice requirements for underground facilities. Below is a summary of notable utility related bills passed by the Legislature and signed into law by Governor Terry Branstad.
WIND ENERGY/ COGENERATION TAX CREDIT: The production tax credit for wind energy and other renewable energy facilities was extended two years and the law, introduced as Senate File 2343, adds new eligible fuel sources for a cogeneration production tax credit, including methane gas, landfill gas and biogas.
RENEWABLE FUELS: Biodiesel and other renewable fuel producers can continue taking advantage of a renewable energy tax credit incentive that was previously set to expire in 2013 but is now extended through 2017. Senate File 2343 became new law and modifies the rate of the E-15 plus gasoline tax credit and provides a two cents per gallon refundable credit for the first 25 million gallons of biodiesel produced in any single biodiesel plant.
SOLAR: The total amount of solar tax credits available for residential and business installations increased from $1.5 million to $4.5 million under Senate File 2340. It also increases the maximum credit a taxpayer can claim of the federal credit available per project from 50 percent to 60 percent. The new law also increases the maximum amount of credit per project from $15,000 to $20,000 for businesses.
REGULATION OF TELECOMMUNICATIONS UTILITIES: Through Senate File 2195, Lawmakers updated certain Iowa Code sections to reflect today's deregulation of retail telephone rates. Nearly four years ago, the Iowa Utilities Board completed its gradual process of deregulating retail rates and the new bill removed code references to retail rate regulation that are now obsolete such as tariff filing requirements for retail rates, employee discounts for phone services, Board approval of rate schedules, and transferability of certificates for providing retail services. Now, telecommunications providers in Iowa are only required to file tariffs for wholesale services as specified by the IUB. The new law also authorizes the IUB to extend the time frame by 30 days for Board action regarding a formal allegation of monopoly, exclusive privilege or franchise against a local telephone exchange carrier.
RURAL WATER - House File 2192 clarified service territory matters for municipal and rural water providers. Under current law, a rural water district or association is prohibited from providing water services within two miles of a city and may file notice with the city if it intends to serve a new area within the two miles buffer. The new law requires the association to submit its water plan directly to the municipal water provider and the plan must include any area the association intends to serve within three years. The city has 75 days to respond to the notice and the new law allows the city to waive its right to serve areas or reserve its right to serve those areas later.
DISCONNECTION OF WATER SERVICES - Municipalities or city utilities and water service providers can now formalize joint efforts to address delinquent customer accounts. A water utility can enter an agreement with the city utility to disconnect service to a property if the customer account becomes delinquent and the water utility will not be liable for any damages as a result of the disconnect. The customer is responsible for all cost associated with discontinuing and reestablishing water service. The new law also provides that a city utility or city enterprise can file a law suit against the customer in district court for the cost of providing service as well as reasonable attorney fees.
IOWA ONE CALL - Iowa's owners and operators of underground facilities are required to participate in the Iowa One Call requirements established in 1983. House File 2408 modified notification requirements applicable to underground facility excavations. Currently, a notice is required to the Iowa One Call notification center at least 48 hours before digging. The new law provides that notices received after 5:00 p.m. shall be processed as being received at 8:00 a.m. the next business day and if locating and marking is done before the 48 hour window closes, the digging party can proceed with excavation once it is notified by Iowa One Call that the locating and marking is completed. Additionally, no digging shall take place within 25 feet of a natural gas transmission line or designated critical facility unless a representative of the operator of the line is present.
While 2014 saw the above changes in Iowa's utility related laws, it will be perhaps more interesting to see what changes will be proposed in the 2015 legislative session based on recent Iowa Supreme Court rulings regarding the definition of a utility and a Notice of Inquiry proceeding regarding distributed generation before the Iowa Utilities Board. These are exciting times in the utility industry, stay tuned.
Iowa is a "no fault" state. Generally, this means that the conduct of either party leading up to the divorce cannot be used as a factor in awarding a property settlement or alimony. The conduct of a party is; however, still relevant when it comes to issues such as child custody and visitation. With social networking on the rise, your on-line conduct is something that will likely be closely scrutinized by your soon-to-be ex-spouse. According to factslides.com, a third of all U.S. divorce filings in 2011 contained the word "facebook." If you are contemplating filing for divorce or if you are currently involved in litigation, it is a good idea to review your facebook page (or any other social networking sites) and remove any posts or photographs that could be negatively used as evidence against you.
On July 1, 2014, the United States Supreme Court granted certiorari in Young v. UPS, Inc. to decide “whether and in what circumstances, an employer that provides work accommodations to nonpregnant employees with work limitations must provide work accommodations to pregnant employees who are ‘similar in their ability or inability to work.’”
Young was a UPS “air driver” who became pregnant in 2006. An air driver is responsible for delivering letters and packages for immediate delivery. The letters and packages were typically light weight; however, Young’s job description required her to be able to lift up to 70 pounds unassisted and up to 150 pounds with assistance. Young’s doctor gave her a 20 pound lifting restriction during her pregnancy.
UPS disallowed Young from working due to the lifting restriction because (1) light duty was only offered to hose with on-the job injuries, ADA disabilities, or those who had lost DOT certification and (2) UPS policy did not permit Young to continue working as an air driver with a 20 pound limitation despite her claim that she rarely lifted anything heavier than that or could be accommodated otherwise. Young was able to return to work after her pregnancy.
Young brought an action against UPS claiming disability discrimination and pregnancy discrimination. The lower courts granted judgment in favor of UPS on both claims prior to trial. Young appealed the pregnancy discrimination claim to the U.S. Supreme Court. The Pregnancy Discrimination Act (PDA) requires employers to treat women affected by pregnancy, childbirth, or related medical conditions to be treated the same as other persons not so affected “but similar in their ability or inability to work”. Young argued that UPS’ policy in granting accommodations to those injured on-the-job, had ADA disabilities, and lost their DOT certification but not pregnant employees was a violation of the PDA because pregnant employees were not treated equally. In short, Young argues that if an employer accommodates any class of employee, it must likewise accommodate a pregnant employee.
Interestingly, the EEOC published Enforcement Guidance on Pregnancy Discrimination and Related Issues on July 14, 2014. The EEOC Guidance not only agrees with Young’s argument, it appears to base one of its examples on the Young facts:
Example 10: An employer has a policy or practice of providing light duty, subject to availability, for any employee who cannot perform one or more job duties for up to 90 days due to injury, illness, or a condition that would be a disability under the ADA. An employee requests a light duty assignment for a 20-pound lifting restriction related to her pregnancy. the employer denies the light duty request, claiming that pregnancy itself does not constitute an injury, illness, or disability, and that the employee has not provided any evidence that the restriction is the result of a pregnancy-related impairment that constitutes a disability under the ADA. The employer has violated the PDA because the employer’s policy treats pregnant employees differently from other employees similar in their ability or inability work.
It's easy to determine whose side the EEOC will be on in this fight.
It’s my opinion that Iowa law regarding accommodation for pregnant employees is clearer than the Pregnancy Discrimination Act, but doesn’t necessarily cover the Young circumstances. Iowa Code § 216.6(2) sets out the employer’s obligations for pregnancy and childbirth. Subsection b identifies that pregnancy, miscarriage, childbirth and the recovery from each is a temporary disability and should be treated like any other temporary disability for the purpose of leave. Because Iowa’s specific provisions regarding pregnancy and related conditions seems to apply only in circumstances necessitating leave, it would not necessarily require an employer to provide a light duty position to a pregnant employee.
The ruling in the Young case will have a great impact on Iowa employers and should be watched carefully.
The ruling in the Young case will have a great impact on Iowa employers and should be watched carefully.
Amanda James has joined Sullivan & Ward, P.C. as an associate attorney. Amanda graduated from Drake University Law School in 2008. Since that time, she has focused her practice on public utility and regulatory work. She will continue her work in these areas at Sullivan & Ward, P.C.
Sullivan & Ward, P.C.'s President and CEO, John T. Ward, was recently honored by the Iowa State Bar Association as a member of the "50 Year" class of 2014. John graduated from Drake University Law School in 1964 and has been with the firm ever since. Recently retired, Richard ("Rick") R. Chabot, was also honored. Rick graduated from the University of Minnesota School of Law in 1964 and joined Sullivan & Ward, P.C. in 1985. Congratulations to John and Rick on this notable accomplishment!
The Nebraska Supreme Court recently heard arguments in a same-sex divorce case involving two women legally married in Iowa. Nebraska does not recognize same-sex marriages because of a constitutional amendment that was approved by voters in 2000. So, the question before the Court, is whether or not the a Nebraska court can grant a divorce without acknowledging the marriage? An attorney for one of the parties argues that the U.S. Constitution's "full faith and credit" clause requires Nebraska to recognize the marriage. Given the large number of same sex-marriages that have occured in Iowa between non-Iowa residents since 2009, it will be interesting to see the outcome of this case.