Compliance September 9, 2005

Employer's 'Honest Error' Still Warrants Penalty Says Judge

September 9, 2005 (PLANSPONSOR.com) - Even though an employer's failure to provide COBRA notice to a former employee was an "oversight" or "honest error" according to the company, a judge still fined the employer $20 per day plus attorney's fees.
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Landau Uniforms, Inc. failed to provide COBRA notice to one of its former employees for over 13 months after his termination, according to an EBIA report.   The former employee sued in connection with his termination of employment and included a claim for statutory penalties under ERISA due to the notice failure.

In the case of Sluka v. Laundau Uniforms Inc., Landau argued that the employee provided no proof of damages, therefore the company should not be liable.   However, according to EBIA, the judge determined that the company had “the resources and the ability to follow important federal regulations, and should be held to its obligations.”

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Due to the fact it was an “honest error” and the employer had agreed to provide retroactive COBRA coverage, the judge did not enforce the maximum penalty allowable under ERISA of $110 per day.   However, in addition to the $20 per day in statutory damages awarded, the court awarded to the employee attorney’s fees that it said will be determined at trial, according to EBIA.

Compliance September 8, 2005

Schwarzenegger Shoots Down Same-Sex Marriage Bill

September 8, 2005 (PLANSPONSOR.com) - California Governor Arnold Schwarzenegger said he will veto the bill legalizing same-sex marriage "out of respect for the will of the people."
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The bill passed by a vote of 41-35 in the Assembly this week after a previous defeat in the Assembly in June (See  CA Legislature Approves Same-Sex Marriages ).   The Senate approved the bill earlier by a vote of 21-15.   The Associated Press points out that a veto override in California requires a two thirds vote in both the Assembly and Senate.

The AP reports that the governor’s press secretary Margita Thompson said in a statement that, in spite of his plan to veto the bill, Schwarzenegger still believes “gay couples are entitled to full protection under the law and should not be discriminated against based upon their relationship.”  

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Thompson also said the governor is proud of the fact that California provides “the most rigorous protections in the nation for domestic partners.”   California gives same-sex couples many of the rights and duties of marriage with the state as domestic partners.

But gay rights advocates said the governor had betrayed the bipartisan ideals that helped get him elected in the 2003 recall election, according to the AP.

Schwarzenegger has until October 9 to issue the veto.

While the same-sex issue has been gaining attention in California, the Massachusetts Attorney General ruled thata proposed ballot initiative that would ban same-sex marriages would be permitted under a section of the Massachusetts Constitution allowing voters to overturn court decisions.   The AP reports that this decision clears the way for conservative groups to begin gathering signatures and lobbying lawmakers to put the issue before voters in 2008.

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