Summary: Winter 2007

Summary

Winter, 2007

ILLINOIS DISPOSITION OF REMAINS ACT

The Illinois Disposition of Remains Act (Act), effective January 1, 2006, seeks to solve some of the problems and confusion that existed in Illinois law over the right of an individual to control the disposition of his or her remains. While prior Illinois law had a number a ways that an individual could provide for the disposition of his or her remains, each allowed for the possibility of family disputes after death.

Prior to the effective date of the Act, an individual could provide directions for the disposition of their remains by:

• will;
• prepaid funeral burial contract;
• valid Illinois Power of Attorney for Health Care with a power to direct the disposition of remains; or
• cremation authorization form under the Crematory Regulation Act.

The Act now allows an individual to complete, sign, and have notarized a simple form. With this form a person can provide written directions for the disposition, including cremation, of his or her remains upon death. The form also allows the person to designate an agent to direct the disposition of his or her remains. The designated agent must also sign the form and the agent’s authority to act is not effective until the agent signs the form.

A person who wishes to be cremated has two options under the Act. The first option allows the person to designate a survivor or survivors who may cancel the cremation and select alternate arrangements. The second option provides that no survivor or survivors may cancel the cremation.

If a decedent has neither left written directions pursuant to the Act, nor appointed an agent to direct the disposition, the Act clarifies the priority of individuals who have the right to control the disposition and who are liable for the reasonable costs of the disposition. These include:

1. Executor or Legal Representative acting in accordance with the decedent’s will;
2. decedent’s spouse at time of decedent’s death;
3. majority of adult competent children of the decedent;
4. surviving competent parents of the decedent;
5. surviving competent adult person or persons in the next degrees of kindred to the decedent.

We recommend that any client who wishes to specifically direct the disposition of his or her remains execute an Appointment of Agent to Control Disposition of Remains Form.

FMLA ISSUES IN HEALTH CARE PLANS

During 2006 the Department of Labor issued several opinion letters reiterating its position that employers cannot reduce benefits or discontinue contributions to health care plans when an employee takes a qualifying leave of absence pursuant to the Family and Medical Leave Act (“FMLA”).

In one opinion letter, the Department of Labor addressed an issue concerning an employer who paid contributions into a cafeteria plan. Under the plan, employees could allot contributions to a variety of benefits, including group health insurance. The Department of Labor states that, "Employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment to group health insurance (including dental) premiums paid by the [employer] in the same amount as paid prior to the start of FMLA leave." The Department of Labor further stated that even though the FMLA does not mandate the continuation of contributions for other benefits such as disability or life insurance, the employee must be able to resume coverage immediately in the same manner and at the same levels that were provided prior to the employee's FMLA leave period.

Another opinion letter involved an employer that provided on-site lodging for managers of its storage facilities. Due to the nature of its operations, the employer required a "resident manager" on leave for a non-FMLA reason to vacate the employer-provided housing. The employer also required managers on FMLA leave to vacate the housing, but provided a restoration right to return to the housing once the employee's leave period was over. The Department of Labor agreed that the employer's policy would not violate the prohibitions of 29 U.S.C. § 2615(a) and the FMLA regulations, if the employer uniformly treated employees on leave for non-FMLA and FMLA reasons the same.

In another opinion letter concerning multi-employer benefit plans, the Department of Labor said that the FMLA regulations require that employers continue to pay contributions to multi-employer health plans "unless the plan contains an explicit FMLA provision for maintaining coverage such as through pooled contributions by all employers party to the plan." This is true even if the collective bargaining agreement only requires that the employer pay contributions to the health insurance plan based on an employee's paid hours. Only in certain circumstances, such as if FMLA leave time causes the employee's total work hours to fall below the level of hours required under the collective bargaining agreement, may an employer forego insurance coverage to the employee. The practical result is that employers must continue to pay contributions unless the plan provides for some other method of coverage during an employee’s FMLA leave, so that an employee’s health insurance coverage continues under the same conditions as prior to the employee’s leave.

Opinions issued by the Department of Labor are exclusively limited to the facts and circumstances as provided. Consequently, the letters should not be relied upon as legal advice. For further information, you can access the DOL’s website at http://www.dol.gov. Please contact us regarding your specific needs.

RESOLVING A CONFLICT BETWEEN A CONSTRUCTION BOND AND THE BOND ACT

Seeking to resolve a conflict between the language in the Public Construction Bond Act, which required suits to enforce the bond to occur within six months after the last labor or service was performed, and the language in the bond itself, which required a suit to be brought within one year of the last labor or service, an Illinois Appellate Court in Carroll Seating Company v. Verdico, decided on December 21, 2006, that the language in the bond controlled.

The appellate court determined that while the Bond Act set minimum requirements, the parties could negotiate more favorable terms as long as the more favorable terms met the Act’s minimum requirements. The court specifically rejected the argument that the claim filing provisions in the Act were mandatory and, like other Illinois courts, found that, due to the Act’s remedial nature, parties to a public works bond are free to contract for protection in excess of that offered by the Act.

HOW DOES AN EMPLOYER HAVE TO TREAT AN EMPLOYEE WHO HAS MADE A CLAIM OF DISCRIMINATION AGAINST IT?

Very carefully!

Last year, the United States Supreme Court unanimously determined that actions taken against an employee who has asserted rights under one of the civil rights’ laws need not be “job related” to constitute unlawful retaliation. This will place a substantial additional burden on employers to be sure that such individuals are not subject to retaliation.

The case decided by the Supreme Court involved a female employee who complained, internally, about sexual harassment by her immediate supervisor. The employer disciplined the supervisor, but then changed the employee’s work assignment. The change in assignment did not involve a change in pay, a demotion or any change other than to go from one of the most desirable jobs in the department to a less desirable job.

The employee filed a complaint with the EEOC claiming that the reassignment was unlawful gender discrimination and retaliation for her filing an internal complaint. Soon thereafter she was suspended, without pay, for insubordination. The employer eventually determined that the suspension was not appropriate, reinstated the employee, and awarded her back pay. The suspension led to the employee filing a second EEOC complaint.

The Court needed to choose between two standards used by various Federal Courts of Appeal. One standard said an employer’s
action is retaliation only if the action caused material change in the terms of employment, such as termination or demotion. The other standard said that an employer’s action is retaliation if the action would be sufficient to dissuade a reasonable worker from making or supporting a charge of discrimination.

The Supreme Court adopted the second standard, which had already been the law for employers located in the 7th Circuit, that any action by an employer that would dissuade a reasonable employee in similar circumstances from pursuing a charge of discrimination is retaliation.

Recent experience has shown that the number of charges containing a retaliation claim before the enforcement agencies is increasing. Since the retaliation claim is independent of the underlying discrimination claim, even if it is determined that the discrimination was not valid, any action taken against the employee might be grounds for a retaliation claim.

When an employee first asserts rights under any of the discrimination laws, the employer must be sure to instruct all its supervisory employees to treat the individual no differently than any other employee. The filing of the original claim of discrimination must not affect the way the employer or any of its employees treat the individual.

A LOOK AT POSTDATED CHECKS

What happens when a postdated check is cashed before the date on the check?

The situation is not uncommon, a check with a future date is delivered in payment of an obligation. The drawer of the check assumes that the recipient will not deposit or cash the check until after the date. The goal is often to delay payment until a time when there are sufficient funds in the account to cover the check. The Uniform Commercial Code expressly permits such checks.

If, however, the check recipient does not wait, but deposits the check into bank account and the maker’s bank pays the amount before the date on the check, does the maker have a valid claim that the amount was wrongfully paid by the bank. The maker’s argument is that the bank cannot properly be said to have paid as directed by its customer since the bank was not directed to pay the check until after the check date.

Unfortunately, except in one special situation, this is not the law. In response to banks’ processing checks automatically, the Uniform Commercial Code was amended to deal with these matters since the check date is seldom included in the encoded data on the check. Thus, in automatic processing, the date on a check is never checked. As a result, a postdated check submitted for collection is going to be paid and, in the normal course, the bank will be protected by applicable law.

What is the one special situation? The same section of the UCC that protects the bank gives the customer the right to give notice to the bank of the postdating. In the notice the customer must describe the check with “reasonable certainty.” The notice must also be given to and received by the bank so that the bank has enough time and information to act on the notice. This notice process is similar to the process for stopping payment on a check and governed by the same rules.

If the bank received proper notice from its customer under these standards, the bank will be liable for damages for the loss. The loss may include damages for dishonor of subsequent checks.

What does this mean for the customer? If the check is postdated only a few days, it will likely be impossible for the customer to give effective notice to the bank. If the postdating is for a longer period then the customer needs to contact their bank to determine the appropriate procedures.

WE WELCOME

Since our last issue two new attorneys have joined the firm, Ryan M. Holmes in our Estate Planning and Probate area and William M. Kinney in our ERISA area.

BEFORE WE GO

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NOW THE FINE PRINT
Summary is intended to provide to our clients and friends only general information, which information may not be suited to your particular circumstances. Please consult with us about your specific needs.

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© 2007 Lewis, Overbeck & Furman, LLP