Compliance March 16, 2006

New York Lawyers Lose Fight for Partner Award Share

March 16, 2006 (PLANSPONSOR.com) - Four New York lawyers have lost their battle for a slice of a $3.2 million class action fee received by their firm after a New York judge ruled they were not equity partners and did not deserve a portion of the money.
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Manhattan Supreme Court Justice Richard Lowe decided that attorneys Joan Harnes, John Harnes, H. Adam Prussin and Gregory Keller had no legitimate call on a share of the award garnered by the firm’s sole equity partner Sidney Silverman. In the absence of a written partnership agreement, their badges of partnership were outweighed by other evidence indicating they were mere employees, Lowe ruled.

“The fact that a person has always been listed in a company’s payroll books as an employee tends to establish that he is not a partner,” Lowe wrote in Silverman v. Keller, 601913/04.

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According to a New York Law Journal news report, the Silverman firm dissolved in 2000, with Harnes and Keller leaving one year earlier to start their own firm. But Keller took over two class action representations the Silverman firm had shared with another lawyer who died in 1999.

Silverman was to have received a percentage of the fees on both cases and he sued in 2004 after the $542,614 he was due on the second case was withheld. The defendants countersued that they were due a share in the $3.2 million fee Silverman received in 2002 on a case begun in 1998.

Lowe also noted the testimony of the firm’s accountant, who said Silverman alone secured firm loans, made capital contributions and otherwise funded the firm’s operations. The accountant also said he generally treated the defendants as employees at tax time, issuing them W-2 forms.

Benefits March 15, 2006

Ford to Charge for Spousal Health Coverage

March 15, 2006 (PLANSPONSOR.com) - In its continued effort to reduce health care costs, Ford Motor Company has announced it will charge for health insurance and dental coverage for worker's spouses or same-sex domestic partners that are eligible for non-Ford health insurance.
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On June 1, workers will begin paying $110 a month for health insurance and $11 a month for dental benefits for their spouses or same-sex domestic partners who have access to other coverage, the Detroit News reports.

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According to the Detroit News, additional changes that will be implemented as of June 1 include:

  • Active salaried workers who opt for the Ford Medical Plan will continue to avoid monthly premiums, but their annual deductibles will increase by nearly 17%.
  • Workers who select an alternative health plan will see their monthly premiums go up 30 percent on average, while their annual deductibles will rise 33%.
  • Ford will cap health care spending for retirees and their surviving spouses at the average 2006 level. After that, any increases in insurance premiums will have to be paid entirely by the retirees or their survivors.

Ford spent $3.5 billion on health care expenses in 2005, compared with $3.1 billion the previous year, according to the Associated Press. The automaker has not projected how much it expects to spend on health care this year.

Recently a federal judge gave tentative approval to Ford’s retiree health-care concessions deal with the United Auto Workers (See Judge Approves Ford Retiree Health Pact ).

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