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Employers Brace For New Ergonomics Rule
On November 13, 2000 the Occupational Safety and Health Administration (OSHA) implemented the much debated ergonomics rule. How will this affect workers’ compensation programs and what should employers, carriers, and third party administrators know? This article will summarize the key provisions of the rule as they relate to workers’ compensation. (more…)
New Jersey Courts have always had broad powers to enforce alimony and child support obligations. Unfortunately, when arrearages accrue over time, many such Orders cannot be enforced because there are insufficient assets and/or income to pay those arrearages. On the other hand, if any assets and/or income can be located, then the Courts will use whatever authority is available to them to collect the unpaid support. Taking this concept one step further, in the first published case of its kind in the State of New Jersey, an Ocean County trial court recently granted a former wife priority status to collect unpaid child support and alimony arrearages from a minority interest held by her former husband in a limited liability company (LLC).
In the Ocean County case, the parties were divorced in 2004 after twenty-one years of marriage. Under the parties’ Marital Settlement Agreement, the former husband agreed to pay the former wife alimony and child support. By 2012, he had accrued more than $110,000 in unpaid support. The former wife applied to the Court seeking a judgment against the former husband for the support arrearages. The former husband had no significant assets other than a ten percent interest in a company which owned a valuable piece of commercial real estate. The commercial property generated a substantial amount of rental income and was allegedly about to be sold. As a result, the former wife not only asked the Court for a judgment representing the support arrearages but she also asked to be issued a writ of execution that would allow her to intercept the former husband’s receipt of income and/or sale proceeds in the event that the property was sold. Citing both general creditor-debtor and family law statutes and Court Rules, the Court granted the former wife’s request for a writ of execution to the extent of her former husband’s ten percent interest in the LLC. In its decision, the Court emphasized that the writ of execution would place the former wife before other creditors of the former husband by giving her priority status. This, in turn, was justified by the public policy of the State of New Jersey to enforce support orders.
In summary, by giving the former wife priority status, this case re-emphasized the rights of those who are owed support and by affirming the former wife’s right to execute against a mere ten percent interest in the LLC, it broadened the field of potential sources from which a former spouse who is owed support can collect arrearages.
Most couples who experience parenting disagreements while going through a divorce or dissolution are able to work out their differences with enough time and some assistance. In some cases, however, parents have a great deal of difficulty agreeing when it comes to issues involving their children; these cases are referred to as “high conflict” cases. Parenting Coordinators assist parents in high conflict cases by resolving parenting disagreements when the parents are unable to do so and by helping them learn how to resolve their conflicts so that they can eventually work together without the involvement of the Parenting Coordinator. (more…)
Yesterday, following the release of our blog regarding Emancipation in the State of New Jersey, the Appellate Division released a reported decision in a case in which a young adult asked to be emancipated from her parents at age eighteen over the objections of her father. This, of course, is the opposite scenario from the typical emancipation case in which a parent asks to emancipate the child, either because that child is beyond the sphere of the parent’s influence or because the parent does not believe that he or she should have to continue to pay child support and/or contribute towards the child’s higher education for other reasons.
In the decision released yesterday, the parties’ daughter, Sharon, testified that she wished to be emancipated because her father was trying to control her choice of college. Sharon acknowledged that if the Court emancipated her, her parents would not be legally compelled to pay for her college or post-college studies (she wishes to attend medical school after college). Although her mother supported Sharon’s emancipation request, her father argued strenuously against it, stating that Sharon is too young and inexperienced to be taking such a step. Put another way, Sharon’s father argued that she is not outside the sphere of her parents’ influence.
The Appellate Division noted that this was a case of first impression, meaning that no other decision has been published in the State of New Jersey in which a young adult has asked to be emancipated from her parents over an objection by one of the parents. Distinguishing it from the opposite cases, in which the parent seeks to emancipate the child, the Court upheld Sharon’s right to become emancipated. The decision was premised upon the trial court’s finding, after a trial, that Sharon “presented as a mature, articulate, intelligent, self-composed and confident adult, who is very focused and thoughtful in her desire for independence and her contemplated path in life.” In light of these findings about Sharon, the Court held that her father’s intentions, even if they were good intentions, were irrelevant. Thus, we now have three emancipation concepts: emancipation, un-emancipation and reverse emancipation.
At the end of the decision, the Appellate Court quoted the Declaration of Independence and wished Sharon well “as she begins her new journey in life.”
In New Jersey, there is no magic age at which a child will be deemed emancipated. Emancipation has been defined by the New Jersey Supreme Court as “the act by which a parent relinquishes the right to custody and is relieved of the duty to support a child.” While the age of majority in New Jersey is eighteen, eighteen does not represent the age at which a parent no longer has a duty to support their child. Put another way, a child is emancipated when they have moved beyond the sphere of influence and responsibility by the parent and obtains an independent status.
There are certain circumstances that will generally automatically emancipate a child. For example, if a child gets married or enters the armed forces, they are generally considered to be emancipated. In addition, there are certain circumstances in which a child will generally not be automatically emancipated. For example, if a child is 18 and is a full time student enrolled in a post-high school education program, then that child will normally not be considered emancipated. This is true whether a child attends a community college, a university or a trade school. This is also true whether or not a child lives on campus, in off-campus housing, or commutes to school while residing with a parent. Additionally, if a child attends a graduate school program, often they will not be considered emancipated.
In addition, once emancipated, some young adults may become “unemancipated.” On June 2012, the New Jersey Appellate Court issued a decision in which they reiterated the principle that a child can become “unemancipated.” While this opinion was not published, meaning it can not be cited as setting a precedent, it can be used as guidance. In that case, the trial court “unemancipated” a previously emancipated young adult. The “unemancipation” was made at the request of the mother in her application for child support and college contribution from the father. The Appellate Court found that just because a child was emancipated does not mean that the child could not be “unemancipated” for purposes of receiving support in the form of college contribution. The Court reasoned that a brief hiatus between high school and college is becoming commonplace today and to stop a child from seeking contribution from their parents after such a hiatus would be unfair.
It is important to remember that every case is different and the Court will look at each family’s individual circumstances when determining whether a child should be emancipated or “unemancipated.”
In almost all cases, one parent pays child support to the other parent after a separation, a divorce or a dissolution. In some of those cases, the child support is paid pursuant to the New Jersey State Child Support Guidelines and in other cases, the child support is calculated by applying ten statutory factors. The statutory factors in non-Guidelines cases can be found in the Child Support Section of this Blog.
In New Jersey, parents of children who attend college are legally obligated to contribute towards the costs of college. In most cases, they are also legally obligated to continue paying child support, although not necessarily in the same amount when the child lives at school. In fact, the New Jersey State Child Support Guidelines specifically do not apply to child support orders when a child lives away from home, even if the prior child support payments were paid in accordance with the Guidelines. This is because the assumptions which underlie the Guidelines no longer apply when the child resides on campus and participates in a school sponsored room and board program.
While this has always been the law in New Jersey, a very recent decision of the New Jersey Appellate Court held that because “there is no presumption that a child’s required support lessens because he or she attends college,” each case must turn on its own facts and circumstances. The Court cited several reasons why the move to college does not automatically mean that the need for child support decreases. First, although it is true that room and board costs at home may decrease, the same costs will be incurred at college. Second, there will be new costs which the child has not previously incurred, such as registration fees, lab costs, books, computer costs and the like. Third, there is a continuing need to maintain the fixed costs of the child’s home for his or her return during school breaks and vacations. Fourth, some expenses remain no matter where the child lives. These include transportation, furniture, clothing, personal care items, telephone charges, insurances, entertainment and spending money. Thus, although the Guidelines will no longer apply in the determination of the amount of child support to be paid on behalf of a college student who lives away from home, that does not mean that there is not a continuing need for and a commensurate obligation to pay child support. Although not explicitly stated, it has also been the law in the State of New Jersey that children must apply for all available loans, grants, scholarships and work-study opportunities. Although these are increasingly difficult to obtain, the availability and receipt of financial assistance will also have to be considered in the overall decision regarding the continued need for child support to cover the child’s expenses.
The Appellate Court noted the obvious concern that the higher the child support award, the fewer funds will be available for college. It also noted that in some cases it may make more sense for some of the child support to be paid directly to the student. In the Appellate Court opinion, the lower courts are directed to apply the same list of statutory factors as are applied to non-Guidelines support cases, as well as the other facts and circumstances particular to each case, in determining whether child support should continue to be paid, and in what amount, when a child leaves for college. The Court also recognized that in the absence of an agreement between the parents, there may be a need for a plenary hearing to determine the parties’ respective incomes, the child’s needs, the child’s contribution or other materially disputed items.
In the case of Marra v. Ryder Transportation Resources, A-5724-10T4 (App. Div. July 2, 2012), the Appellate Division affirmed a holding that the employer was solely responsible for total disability stemming from a groin injury that occurred 15 years ago. (more…)
For parties who wish to resolve their divorce outside of Court but cannot reach a settlement on their own or with the assistance of a mediator, arbitration provides a viable alternative. The arbitrator, who is typically an attorney or a former judge, makes either a non-binding or a binding determination as to how the case should be resolved. The determination is based upon the information the parties present to the arbitrator in much the same fashion as the parties would present evidence and testimony to a Judge during trial. Parties who select arbitration have the freedom to select the arbitrator, set their own schedule, and conduct the proceedings in private as opposed to a public courtroom.
Although the arbitration process is less formal than a courtroom trial, the process is still regulated by certain procedural rules that are collectively known as the Uniform Arbitration Act. Typically, the parties each have an attorney represent them throughout the process. The first step in the process is for the attorneys to agree to an arbitrator or multiple arbitrators to serve as a panel. If the parties have a prior agreement to proceed with arbitration, the Act states that the parties must follow the method set forth in their agreement regarding how the arbitrator will be selected. If the parties do not have a prior agreement or if the method in the agreement fails, the parties may apply to the Court to appoint an arbitrator.
Once an arbitrator is selected or appointed, the Act provides the arbitrator with the discretion to conduct the arbitration in “such manner as the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding.” The arbitrator has the authority to hold conferences with the parties, issue subpoenas for witnesses and the production of records, and permit depositions and discovery. The Act states that the extent of the discovery exchange between the parties is determined by the arbitrator after taking into account the needs of the parties and the “desirability of making the proceeding fair, expeditious, and cost effective.” This provides the arbitrator with the freedom to conduct the proceedings as he/she sees fit.
After the arbitrator hears the testimony of the parties and their witnesses and reviews the submitted evidence, the arbitrator makes a determination on all outstanding issues in the case. As stated previously, arbitration can be either binding or non-binding as agreed to by the parties before it begins. The parties can also agree to submit all issues to the arbitrator or just one specific issue, e.g. alimony. The Act requires the arbitrator to make a record of the decision, to authenticate it, and to provide notice of the final decision to the parties. After the parties receive notice of the decision, their attorneys may file a summary action with the Court for an order confirming the arbitrator’s decision. The order is docketed and enforceable as if the matter had been resolved through the Court system.
The length of the arbitration process will vary depending on the circumstances of each case and the amount of discovery and witnesses that are needed, but arbitration will almost always provide a faster resolution than if the parties waited for a trial, conducted the trial and then waited for the decision to be issued by a Judge. While the less formal atmosphere and faster track is appealing, it is important to remember that arbitration also requires a certain degree of cooperation between parties in order to select an arbitrator and determine which issues to submit to arbitration. Not all cases are suitable for arbitration, and it is important to discuss the decision with your attorney before agreeing to proceed with arbitration.
The Judge of Compensation and Appellate Division found that the employee was entitled to no benefits based on his violation of the New Jersey Fraud Act
In Johnnie Jackson v. Township of Montclair, A-2212-11T2 (App. Div. July 5, 2012), the claimant injured his knee while moving large boxes of books at the Montclair Public Library on August 4, 2008. (more…)
Employee stock options are considered marital assets that are subject to equitable distribution. These include both vested and unvested stock options. Even stock options awarded shortly after the divorce complaint was filed are considered subject to equitable distribution if they were awarded as a result of efforts expended during the marriage. On the other hand, if the options were awarded shortly after the marriage ended but are incentives for future performance (i.e. to keep the employee spouse at the company) then they are not eligible for equitable distribution.
The issue as to whether stock options obtained after the divorce complaint was filed were awarded for past performance or for future performance is often an issue in divorce cases. Usually the documents granting the options do not spell out the reason(s) for the award, which must then be inferred from the nature of the employment and the other facts of the case.
The speculative nature of a stock option’s value makes it one of the most difficult assets to value at the time of the divorce. This is because it is impossible to predict the exact future value of the stock at the time the option will be exercised, which may be years later; in fact, there is no guarantee that the option will be worth anything at all at the time that it becomes exercisable.
There are two methods for equitably distributing stock options. The first, and by far less common, method is the Present Value Method which utilizes a mathematical formula to try to calculate the present value of the stock options. The most widely accepted present value formula is the Black-Scholes formula which combines a variety of factors, such as the exercise price of the stock, the share price on the valuation date, the length of time until maturity, interest rates and a standard deviation formula to account for the volatility of the share price.
The Present Value Method allows the parties to divide the value of the stock option(s) at the time of the divorce, with the non-employee spouse receiving monetary compensation (or an equivalent offset of assets) for his/her share of the other party’s stock options. The benefit of using the Present Value Method is the finality of the distribution of the stock options at the time of the divorce. The downside is the cost of having the options valued as well as the speculative nature of the Present Value Method as it applies to stock options. In fact, some state courts have held that the speculative nature of stock options makes them unsuitable for present value calculations.
The more common approach to dividing stock options is the Deferred Distribution Method. Using this method, the parties’ Marital Settlement Agreement or the Final Judgment of Divorce contains language which imposes a “Constructive Trust” over the non-employee spouse’s share of the stock options. The Constructive Trust requires the employee spouse to hold the options for the benefit of the non-employee spouse. The employee spouse holds on to the options until they vest, are exercisable (if unvested and/or non-exercisable at the time of the divorce) and non-employee spouse directs the employee spouse to exercise them. It is important that there be language in the Agreement requiring the employee spouse to notify the non-employee spouse prior to the options lapsing. Once the options are exercised, the employee spouse sells the stock and gives the sale proceeds to the non-employee spouse after the payment of taxes at the employee spouse’s tax rate.
