BizLawBuz …. The Power of Know

This past weekend we received at our home a booklet of coupons from a national supermarket chain. No big deal; we get them all the time. But this one was different. This particular circular pitched only environmentally friendly products offered by this particular chain.

In a couple of days my wife and I are flying to Denver to attend our daughter-in-law’s graduation from a local college. She will be graduating with a degree in “sustainable design”; a course of study that didn’t even exist all that many years ago.

Beginning some time last year, I began to notice continuing legal education courses being offered on such topics as “Environmental Issues for Business Lawyers” and “Green Building and Sustainable Development.”

So what do these three seemingly unconnected observations have in common? Simply that “green” is everywhere. Terms like “eco-friendly’, “global warming/climate change”, “renewable energy”, “sustainable design” and “carbon footprint” have become part of our daily lexicon. A few years ago we could feel good about ourselves if we separated the glass from the paper and metal in our curbside recycle bins. Unfortunately (or, perhaps I should say, fortunately) that’s not enough anymore, and never will be again.

So what does any of this have to do with the practice of law you might ask? The answer is “more than any of us can possibly imagine.” A recent presenter at a seminar I attended referred to the legal implications of the environmental movement as a “rapidly approaching legal tsunami.” Local, state and federal governments (the United States and globally) are rushing to enact mandates that require the use of newly developed and evolving technologies to meet standards that are constantly evolving. Even without mandatory regulatory compliance, everyone just seems to want to do what’s right for the environment.

An example of just the tip of this iceberg (from a legal perspective) can be found in an article in the March/April 2009 edition of “GreenSource-The Magazine of Sustainable Design” titled “Searching For Clarity Amid Green Certifications.” The article quotes Scot Case, executive director of the EcoLogo Program, one of the oldest North American environmental product-labeling programs, as saying: “There are more than 400 environmental labels floating around…and some are completely meaningless.” The article points out the problems with environmental claims made by some in the building products industry seeking to capitalize on the newfound environmental awareness and contains a guide to sort through the “chaos of competing certification programs.”

From a legal standpoint, the potential for abuse is staggering. Assume, for example, that your city council mandates (or, at least, strongly encourages) that the addition you want to make to your building must meet certain standards for sustainable design. You contract with a builder who holds himself out as knowledgeable and competent in the field of sustainable design. You later find out that whatever certification he or she had, was not credible. You also find out that the certifications attached to the building components and systems were meaningless, as a result of which, you can’t meet the regulatory standards. In the process, you have already vastly exceeded your budget.

And, what about just plain defrauding consumers with baseless eco-friendly claims? Well-meaning people who just want to do the right thing for the environment, being taken advantage of by unscrupulous manufacturers and advertisers; seems to give new meaning to the doctrine of “caveat emptor.”

The attorneys at Wright Penning & Beamer are dedicated to helping our clients in every sector of our practice, work through this constantly evolving maze. We are seeking out and taking advantage of learning opportunities and are forming networks with experts, all with the goal of giving our clients the answers they need and the best possible representation in dealing with the legal aspects of “green.”

“It’s Not That Easy Being Green.” Near as I have been able to find out, those words were first sung by Kermit the Frog in an episode of Sesame Street dating back to approximately 1969. Kermit seems to have been a prophet.

Duane L. Reynolds

The IRS has clarified some of the key issues surrounding the COBRA subsidy that is offered to eligible former employees under the federal stimulus package. Note that eligible employees include those who voluntarily took severance packages (and thus were not necessarily “terminated” by the employer) rather than face termination or a significant reduction in hours or wages.

Dirk A. Beamer

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An excerpt from Society for Human Resource Management:
Read entire article and comments about IRS Clarifies COBRA Subsidy Rules

4/2/2009
By Edward I. Leeds and Clifford J. Schoner

In a notice published March 31, 2009, the Internal Revenue Service addressed a range of significant issues arising from the new COBRA subsidy rules, which were introduced by the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA provides that certain individuals who have the right to continue group health coverage because of an involuntary termination that occurred (or occurs) between Sept. 1, 2008, and Dec. 31, 2009, may qualify for up to nine months of assistance in paying for that coverage.

The notice provides guidance on several key subjects, including the following:
Involuntary termination of employment. The notice provides that an involuntary termination of employment includes not only situations where an employer discharges an employee who is willing and able to work, but when the employer’s material adverse actions give the employee good reason to terminate employment. For example, when an employee accepts a severance package rather than face the prospect of an announced reduction in force or when an employee quits rather than accept a position with significantly reduced hours, the termination of employment will be considered involuntary for purposes of the COBRA subsidy.

The guidance addresses a few specific situations. For example, layoffs (that reduce an employee’s work hours to zero) and lockouts initiated by the employer will be considered involuntary terminations of employment. Strikes initiated by employees or their representatives will not.

Calculation of premium reduction. The notice makes it clear that the subsidy will be based on the amount that the assistance-eligible individual would otherwise have to pay for continuation coverage. Thus, if an employer offers a severance package that requires an individual to pay only $200 for COBRA coverage for six months and the cost without that severance package would be $1,000, the individual may pay only $70 (35 percent of $200) for the first six months of continuation coverage, $350 (35 percent of $1,000) for the next three months, and $1,000 per month after that (assuming the individual continues to qualify for the subsidy throughout the nine-month period).

In light of these requirements, some employers, especially those contemplating material reductions in force, may consider how they design their severance packages.

Other topics. The notice provides additional guidance on who qualifies for the subsidy, when the subsidy begins and ends, what rules apply to those who have a second chance to elect COBRA continuation coverage, and other relevant matters.

Edward I. Leeds and Clifford J. Schoner are attorneys in Ballard Spahr’s Philadelphia office. For more information about this article, contact Brian M. Pinheiro at 215.864.8511 or pinheiro@ballardspahr.com, Edward I. Leeds at 215.864.8419 or leeds@ballardspahr.com, Clifford J. Schoner at 215.864.8626 or schonerc@ballardspahr.com, or any member of the firm’s Employee Benefits and Executive Compensation Group. © 2009 Ballard Spahr Andrews & Ingersoll, LLP. All Rights Reserved.
Please Note: This article should not be construed as legal advice.