Punitive Damages Recoverable In Arbitration

In a case before the United States Supreme Court, it found that since the contract authorized arbitration under the National Association of Securities Dealers' Code of Arbitration and the Code states that arbitrators may award "damages and other relief," the arbitrators had authority to award punitive damages. The court came to this conclusion even though the contract was governed by New York law which does not authorize the award of punitive damages in arbitration.

Why This Is Important... Arbitration clauses must be carefully drafted. Even if the clause is silent on issues such as the award of punitive damages, such awards may be valid under the procedural rules that govern arbitration. If the parties want to eliminate the possibility of punitive damages, they should state that in the arbitration clause itself.

IRS Agrees To Decision Allowing Employment Tax Deduction

The IRS has announced that it will no longer take the position that accrued year-end wages are not deductible until they are paid. In a case before the Tax Court, an employer deducted year-end wages and employment taxes that were accrued in one year and paid in the following year. The IRS contended that although the wage accrual was proper, the accruing and deducting of the employment taxes was not because the legal obligation to pay the employment taxes was not fixed until January of the following year. The Tax Court held in favor of the employer.

Why This Is Important... This announcement clears the way for employers to deduct accrued employment taxes at year end, thus accelerating the deduction even though the taxes are not paid until the next year.

Dental Offices Ruled Places Of Public Accommodation

Two dentists refused to treat patients who were known or suspected to be HIV positive. Two patients filed discrimination complaints. The case went to New York's highest court. It ruled that the dental offices were "places of public accommodation" and therefore were subject to New York's discrimination law. The dentists can be liable for refusing to treat patients solely because they are infected with HIV.

Why This Is Important... The dentists had argued that they had a right to determine who they would serve. The court ruled that they did not have the right to deny service to people who are members of classes protected by discrimination laws.

Psychological Illness & The Americans With Disabilities Act

The EEOC has issued a guideline setting out the rules for when and how persons with psychological illnesses are required to be accommodated under the Americans With Disabilities Act. These rules will be used by agencies in discrimination cases to determine liability. Active Nicolai Law Group clients have received a copy of the guideline.

We are proud to announce the availibility of Employment Law Forms at our Website

Comments and requests for further information are invited by E-mail at niclawgrp@niclawgrp.com