Employee Manuals May Be Employment Contracts

The Massachusetts Supreme Court has decided that an employee manual may be a contract which gives employees rights above and beyond those of at-will employees. The Court made this decision because the employment manual in question did not say it was designed only to provide general guidance or that management reserved the right to unilaterally change its provisions. Also important was the fact that the manual did not state that workers were at-will employees who could be discharged without cause.

Why This Is Important... The Massachusetts court has been slow to expand employee rights. This decision makes it clear that employee manuals must be drafted with great care. Failure to do so could result in exposure to breach of contract and wrongful termination claims.

Tax Consequences Of Converting A Partnership To An LLC

According to an Internal Revenue Service Revised Ruling converting an interest in a domestic partnership into an interest in a domestic limited liability company or "LLC" classified as a partnership has the same tax consequences as a partnership to partnership conversion.

Why This Is Important... This ruling makes it clear that conversion from a domestic partnership to an LLC means no recognition of gains or losses on the conversion. This allows conversion to a form which limits partner liability without tax consequences.

Classification Of Chemical As Hazardous Left To EPA

In a suit to recover the cost of removing ferric ferrocyanide ("FFC") released by the defendant's corporate predecessor, the Court of Appeals ruled that it was up to the EPA and not the courts to decide whether FFC was a hazardous substance under the Comprehensive Environmental Response, Compensation, and Liability Act.

Why This Is Important... Since the EPA determines whether a chemical is a hazardous substance, additional liability cannot be created in a lawsuit by the court.

Court Defines "Employer" For Title VII

A court dismissed a discrimination case saying the company was not an "employer" under Title VII because it did not have fifteen or more employees working on each working day of twenty or more calendar weeks in the current or preceding calendar year. The Court of Appeals reversed finding that the statute does not require the plaintiff to prove that fifteen or more employees actually worked on each working day. The plaintiff only had to show that fifteen or more employees were on the defendant's payroll on each day of the period.

Why This Is Important... This decision makes it easier for plaintiffs to prove that a company is an "employer" under Title VII. Employers should not carry people who are not actively employed as employees since that may trigger coverage.