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HR and Tax Newsletter-June 2003

A plan that provided that an employee could receive up to 52 weeks of salary for injury or disability was not an ERISA plan. Because benefits were paid out of the employer's general assets and because the employee received his normal compensation, the Eleventh Circuit concluded that the plan fell within the payroll plan exemption to ERISA.
Stern v. International Business Machine (11th Cir.)

The Florida Supreme Court has ruled that for covenants to compete entered into on or prior to July 1, 1996, a successor corporation can enforce non-compete agreements made by predecessor corporations even if the non-compete agreements did not expressly authorize assignments and in fact were not assigned. This rule applies if 100% of the predecessor company's stock is sold or the prior corporation was merged into the successor corporation.
Corporate Express Office Products v. Phillips.

The Supreme Court has held that six factors apply for purposes of determining whether shareholder/directors count as employees in determining whether the 15 employee threshold under the Americans with Disabilities Act is reached. The mere fact that the employer is a corporation does not mean that the shareholder/directors automatically count as employees. The relevant factors are : (1) whether the organization can hire or fire the individual or set the rules and regulations of the individual's work; (2) whether, and to the extent the organization supervises the individual; (3) whether the individual reports to someone higher in the organization; (4) whether, and if so, the extent the individual is able to influence the organization; (5) whether the parties intended that the individual be an employee, as expressed in written agreements and contractors, and (6) whether the individual shares in the profits, losses, and liabilities of the organization.
Clackamas Gastroenterology Associates P.C. v. Wells.