NEWS Claims Against the Claims Handlers Under Large Deductible - PDF document

BUSINESS LAW T he S TaTe B ar of C alifornia • i SSue 2 2017 NEWS Claims Against the Claims Handlers Under Large Deductible Workers’ Compensation Insurance Policies Page 7 Commercially Reasonable Efforts: A Recent Delaware Supreme Court Holding Might Motivate Contract Drafters to Define the Term for Themselves Page 18

BUSINESS LAW NEWS EDITORIAL TEAM Editorial Board Editorial Advisory Board Kenneth W. Minesinger, Editor-in-Chief Neil J. Wertlieb Jerome A. Grossman, Co-Vice Chair Design and Coordination Everett L. Green, Co-Vice Chair Megan Lynch Sarah L. deDiego, ExCom Liaison, Primary Sublime Designs Media, LLC Peter M. Menard, ExCom Liaison, Secondary (415) 225-1046 Coleman J. F. Cannon, Associate Editor megan@sublimedesignsmedia.com Holly Estioko, Associate Editor www.sublimedesignsmedia.com Juan Carlos Moran, Associate Editor Section Administrator David M. Perl, Associate Editor David A. Saltzman, Associate Editor John Buelter The State Bar of California Suzanne L. Weakley, Associate Editor (415) 538-2341 Nina Whitehurst, Associate Editor John.Buelter@calbar.ca.gov April Frisby, Style Editor Marc Olson, Style Editor Executive Committee of the Business Law Section 2016–2017 Officers Members Advisors Chair Rachelle H. Cohen, Los Angeles Roland E. Brandel, San Francisco James P. Hill, San Diego Patrick N. Downes, Los Angeles Peter C. Bronson, Sacramento Vice Chairs Jennifer A. Duncan, Las Vegas, NV Peter Califano, San Francisco Curt C. Barwick, Aliso Viejo Tal S. Grinblat, Encino Robert V. Hawn, San Jose Sarah L. de Diego, Santa Monica Monique Jewett Brewster, San Jose Marie F. Hogan, San Francisco Uzzi O. Raanan, Los Angeles Peter M. Menard, Los Angeles Martha J. King, Encinitas Treasurers Elissa D. Miller, Los Angeles Jill C. Kovar, Irvine Diana D. Herman, San Francisco Corey R. Weber, Woodland Hills Charles McKee, Sherman Oaks Kristina A. Del Vecchio, Pasadena Dennis J. Wickham, San Diego Mark A. Moore, Irvine Secretary Donna T. Parkinson, Sacramento Cathryn S. Gawne, Menlo Park Paul J. Pascuzzi, Sacramento Immediate Past Chair Thomas R. Phinney, Sacramento Robert Harris, Santa Clara Mark E. Porter , San Francisco Steven J. Williamson, Sacramento Business Law News is distributed at no charge to members of the Business Law Section of the State Bar of California. The statements and opinions in Business Law News are those of the editors and contributors as applicable, and not necessarily those of the State Bar of California, the Business Law Section or any government body. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered and is made available with the understanding that the publisher is not engaged in rendering legal or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

BUSINESS LAW NEWS Table of Contents Executive Committee: Message from the Chair ....................................................................4 BLN Editorial Board: Message from the Editor .....................................................................6 Claims Against the Claims Handlers Under Large Deductible Workers’ Compensation Insurance Policies ....................................................................................................................7 By David A. Shaneyfelt The article deals with large-deductible workers' compensation policies and explains how these policies can be used by California employers to significantly reduce the amount they pay in premiums. Avoiding Labor Entanglements for Commission-Earning Employees in a Changing Legal Landscape ....................................................................................................................12 By Laura Reathaford and Benjamin Stockman While commission-based compensation has historically been popular, in their article “Avoiding Labor Entanglements for Commission-Earning Employees in a Changing Legal Landscape,” Laura Reathaford and Benjamin Stockman explore whether this popularity will wane in light of class action litigation and settlement agreements that have cost employers millions of dollars because of allegations that commission-based compensation plans violate wage and hour laws. This article not only outlines administrative and legal changes for employers who compensate employees on commission, but also searches for ways to minimize exposure. California Court of Appeal Reverses Previous Decision and Affirms the Use of Second Meal Period Waivers for Healthcare Employers ....................................................15 By Kevin D. Sullivan The author reviews meal period waivers in light of the recent California Court of Appeals decision in Garard . Commercially Reasonable Efforts: A Recent Delaware Supreme Court Holding Might Motivate Contract Drafters to Define the Term for Themselves .........................................18 By D. C. Toedt III Contract drafters often use the term "commercially reasonable efforts" in lieu of stating more precise standards of performance. In light of a recent Supreme Court of Delaware decision, this article advises drafters to consider defining the term themselves. How To Respond To IRS Notices ...................................................................................................22 By Robert W. Wood The author provides an overview to business lawyers on how to properly respond to IRS notices, along with common pitfalls.

Executive Committee: Message from the Chair Jim Hill T he Business Law Section (BLS, or the “Section”), entity. Those sections, with more than 60,000 lawyer and particularly its Executive Committee and its members (plus the CYLA with its 48,000 members), have advisors, many of whom are former Chairs of the Section, operated within the State Bar structure since the sections, have been laboring doubly hard this year for our 8,000- including the BLS, were created some forty years ago. plus BLS members, helping our fifteen BLS standing Upon separation, the new association of sections will be committees continue to produce timely publications, the largest voluntary association of lawyers in the nation education programs, and legislation comments and pro- after the venerable American Bar Association. posals. As importantly during this 40th anniversary year The reasons for the separation are summarized of the Section, we have been actively engaged in front- in Senate Bill 36’s legislative findings. Although line work with all sixteen sections of the State Bar and accurate, those findings only begin to tell the story of an the CYLA to ensure a thriving future for the BLS and the increasingly restrictive environment in which the sections other sections as we march toward separation from the had been forced to operate for many years. Some of the public agency State Bar and it undergoes restructuring relevant legislative findings are as follows: and reform in response to California Supreme Court and (g) Whereas the regulatory and non-regulatory legislative mandates. We have made much progress this functions of the State Bar of California are each year helping to gain support from State Bar leadership, as strengthened by a separation of governance, staff, well as necessary cooperation from other key stakehold- and budgets that enables the Board of Trustees of ers within the Legislature in drafting the enabling leg- the State Bar to focus on its primary mission of islation, and from the California Supreme Court, which public protection through regulatory oversight oversees the State Bar and, ultimately, all lawyers practic- while allowing and enhancing the ability ing in California. of the Sections of the State Bar to advance As I drafted this Chair’s Address, we received the public interest by providing educational amendments introduced on April 6 in the California programs and materials to members of the State Legislature to the State Bar “Dues Bill,” Senate Bill Bar and the public (including low- or no-cost 36, which, if adopted, will provide for a historic mandatory continuing legal education (MCLE)), reorganization of the State Bar of California . The proposing legislation, rule changes, regulations, bill restructures the public agency State Bar to allow and similar acts, and providing expertise and it to concentrate more effectively on its core public comments on pending, or proposed legislation, protection missions of admissions and discipline. The rule changes, regulations, and similar acts, and amendments, introduced by Senator Hannah-Beth advancing the competent and ethical practice of Jackson, Chair of the Senate Judiciary Committee, will law, thereby enhancing protection of the public transfer the sixteen sections, together with the California and access to justice for all. Young Lawyers Association, into a non-profit voluntary 4 Business Law News • The State Bar of California