www.beneschlaw.com

Business Basics Every CRNA Should Know

Oklahoma Association of Nurse AnesthetistsFall Meeting

River Spirit Casino and Resort

September 29-30, 2018

Mark J. Silberman, J.D.Partner

Benesch, Friedlander, Coplan & Aronoff LLP312.212.4952

MSilberman@BeneschLaw.com

Overview

• What is a Contract?• 30 Second Overview of:

– Employee v. Independent Contractor– At Will Employment

• Basics of Employment Contract• Non-Compete Clauses• Other types of Contracts?• Big Picture Considerations

What is a Contract?

• A written or verbal agreement that is intended to be enforceable by law.

• An agreement between two or more parties to perform a service, provide a product, or commit to an act, and is enforceable by law.

• An agreement between two parties that creates an obligation to perform (or not perform) a particular duty.

Contract Basics

• Day one of law school (contract basics):– Offer– Acceptance– Consideration

• Oral v. Written Contracts• When you combine the two?

Parole Evidence Rule: The “oral agreements” that accompany a written contract.

(it is often not accepted by Courts)

Day Two of Law School?

In order for a contract to be enforceable, it must contain: • An offer that specifically details exactly what will be provided.• Acceptance, which is the agreement by the other party to the offer

presented.• Consideration, money or something of interest being exchanged

between the parties.• Capacity of the parties in terms of age and mental ability. • The intent of both parties to carry out their promise.• Legally enforceable terms and conditions, also called object of the

contract.

What is the purpose of a contract?

• To define the rights and responsibilities of the parties to each other.

• To define each side’s reasonable expectations.• No one ever writes, reviews, or enters into a

contract expecting it to be necessary.• It is not most useful when things are going good,

but rather when things go bad…

What is an Employee?

Per the IRS and under common law rules:

Anyone who performs services for you is your employee:If you can control not only what will be done

but how, where, and when it will be done.

This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the

services are performed.

What is an Independent Contractor?

This can be difficult to define.

An independent contractor provides goods or services to another entity under terms specified in a contract or within a

verbal agreement.

The specifics come from the common law, the Fair Labor Standards Act, the Internal Revenue Code, and Court decisions.

Which you are often turns on control.

The IRS and common law focus on what level of control an employer has over a service or product or person:

– Does the employer define what is being done and how it will be accomplished?– Who supplies equipment, materials and tools?– Are all necessary materials supplied by the employer? – Can the worker be discharged at any time? – Can the worker choose whether or not to come to work without fear of losing

employment?– If the worker controls the hours, time, place, and work; – Whether the work is temporary or permanent;– The manner in which the work is compensated.

Does the employer define what is being done and how it will be

accomplished?• If the worker supplies his or her own equipment, materials and tools;• If all necessary materials are not supplied by the employer; • If the worker can be discharged at any time or can choose whether or

not to come to work without fear of losing employment;• If the worker controls the hours, time, place, and work; • Whether the work is temporary or permanent;• The manner in which the work is compensated.

Factors Suggesting Independent Contractor

• Not relying on the business as the sole source of income;• Regularly performing similar work for others;• Having an appropriate business established;• Working at your own pace as defined by an agreement;• Being ineligible for employer provided benefits;• Retaining control and independence over your assignments

and your schedule.

Why does anyone care?

TAXES

For the Employer

For proper independent contractors,you do not incur payroll taxes, social security, workers’

compensation insurance, etc.

You can control other expenses (pay per project, day rates, consulting fees, can avoid wage/hour minimum pay or overtime issues), and your potential for liability

is different.

For the Independent Contractor

You receive a 1099 instead of a W-2You are responsible for paying self-employment taxes (consult with an accountant!)You are losing certain benefits:

• social security• unemployment/workers’ compensation insurance• minimum wage / overtime (maybe)

In Conclusion

• Independent contractors are their own bosses. Their work is often defined by contracts (oral or written) and defines certain requirements.

• Employees rely on the business for steady income, give up an element of control and independence in exchange (often) for certain benefits and (hopefully) stability.

Employee At Will

You can discharge anEmployee for good cause,

bad cause, or no cause at all,so long as the reasoning

is not illegal.

Is an employment at will state

This means the employer/employee relationship is based on the free will of both parties, and it can also therefore be severed by either party at any time and for virtually any

reason.

Oklahoma

So… What would be illegal?

There are all sorts of exceptions and you need to do your homework

Being Against Public Policy: (e.g. retaliation); Implied Contract: (this would be fact specific); Implied Covenant of

Good Faith and Fair Dealing: (e.g. to avoid pension); Discrimination.

Don’t forget federal law, too!

One Important Warning!!

Employment matters (including employment contracts) are governed by Federal, State, (even local) laws.

People often take “a little” knowledge or grasp ahold of one particular fact, factor, or detail to guide themselves to a

predetermined result.

Almost every answer is intensively fact-sensitive.

Employment Contract Basics

Do I want a contract or employment at will?

Contract will define the terms of the employmentStart

PerformanceDuration

Termination

UNDERSTAND THE DIFFERENCE

Between a job description v. employment contract

A job description outlines your job duties, payment structure, role in the business, etc.

An employment contract creates legally binding duties and benefits for each side of the negotiation and should protect both

parties.

When entering into anemployment contract

Step 1:

PREPARE!

What should I be thinking about?

What do you want?What do you need?

What do THEY want?What do THEY need?What is reasonable?What is negotiable?

Answering these questions takes research.

What is non-negotiable?

NOTHING(EXCEPT THAT WHICH IS ILLEGAL)

(SORRY, I’M A LAWYER.)

What are my priorities?

• What is important v. what would be nice?

• What cannot I not live without?– 8 weeks of paid vacation is great until it is tied to a specific number

of hours that cannot be performed if you use it.

– There is little value to a company car if your salary is set so low you cannot pay for the gas.

What should you be thinking about?

• Compensation– Salary, bonus, overtime, incentives, etc.

• Benefits– Health, dental, life, family coverage (cost?);– Vacation, sick time, holidays;– Continuing education, professional memberships, licensure

(certification / recertification), reimbursement for costs (e.g., travel, materials).

Additional issues• Length of contract (longer is not always better)• Working environment

– Hours; safety; quality of care; training; duties.– Evaluation (method and consequences).– Who owns your records? Who submits bills?– Fraud.

• End of business relationship– Non-compete clauses;– Severance packages;– Vacation/sick time accrual and payment?

What special insight can you offer?

When most people are negotiating an employment contract, they are in a good

mood – they are excited about a new job –they like the people they are working for.

Don’t let that be you!

When the honeymoon is over

That is when contracts come into play.

A good contract protects your value:It can limit your liability;It can define your rights;

It will outline your responsibilities.

A bad contract:Is VERY expensive.

Most important issue

Clarity

Ambiguity is Bad(don’t let your lawyers be lawyers)

If what it means is important to you

Make sure it is clearly definedwithin the contract.

Important Points to Consider

• You do not have to agree to a term you are not comfortable with.

• You do not have to sign something you do not understand.• You do not have to take anyone’s word that something is

understood.• They do not have to hire you if they don’t like your conditions.

What Should Your Goal Be?

• My opinion – fairness should be your goal.• Employers will almost always have an upper hand. Believing

you are irreplaceable (even if you are) can create problems.• Protect yourself – get what you need and as much of what

you want as you can.• People often incorrectly think it is about winning.

It is a balancing act.

• You don’t want to start off on the wrong foot.• You don’t want to undervalue yourself.• You don’t want to agree to a “bad deal.”• You don’t want to leave value on the table.• You don’t want to negotiate yourself out of a great opportunity.

If it were easy, we wouldn’t be discussing it.

MOST IMPORTANT MESSAGE

Read your contract!You would be AMAZED

what is actually included in some contracts!

Remedies if a contract is breached?

• General damages: the damage that arose from the breach of the contract.

• Specific performance: not easy for employment… no one can make a CRNA administer anesthesia, can they?.

• Money damages: most common and painful.• Liquidated damages: agree beforehand what the damages will

be and set that amount.

Non-Compete Clauses

• We could do three day-long presentations on this subject alone.

• Every state has its own regulations.• Volumes have been written (and continue to be written) on the

subject.

Biggest Misconception?

People enter into non-compete clauses or other restrictive covenants believing they are not enforceable.

That is not always (or necessarily often) the case.

Some states do not allow them – others limit them – some are very liberal.

What is a non-compete clause?

• It restricts an employee from working:– in a particular field;– for a certain period of time;– within a certain geographic area.

Generally – when they are allowed – they will be upheld if they are reasonable in their scope, their time, their area. (legitimate business interest)

Broader principles

Enforced when an employer can demonstrate that the restriction is reasonable. Reasonableness is often measured by asking:

• Whether the employer has a legitimate protectable interest; and • Whether the covenants are reasonable in scope as to the time, geography and activity restricted.

What do I do when I’m asked to sign a non-compete clause?

– READ IT. UNDERSTAND IT.– CONSIDER ITS IMPACT.– CONSULT WITH AN ATTORNEY.– CAN IT BE LIMITED / MODIFIED?– IS IT A POTENTIAL NEGOTIATING TOOL?

More friendly advice:IF YOU HAVE NO INTENTION OF ABIDING BY IT, THINK VERY LONG AND HARD BEFORE SIGNING (OR JUST DON’T SIGN IT).

In general non-compete agreements are not permitted in Oklahoma. A broadly worded

contract that restrains a person from exercising a lawful profession, trade or business is void as a violation of Oklahoma public policy except as

provided by Oklahoma statute.

Oklahoma has Strong Opinions On Non-Compete Agreements

Alabama Code Title 8. Commercial Law and Consumer Protection § 8-1-190

Non-Solicitation of Customers?

A non-solicitation provision bars the employee from soliciting the business of the employer’s customers. The Oklahoma

Legislature created a third statutory exception to the general prohibition against contracts in restraint of trade. An

agreement prohibiting a former employee from directly soliciting the sale of goods and services from the “established customers of the former employer” is not a contract in restraint of trade and may be enforced in Oklahoma. Courts will likely

enforce such agreements only if the agreement includes a reasonable length of time as opposed to a permanent ban.

43

How about Non-Recruitment?

A nonrecruitment provision or anti-raiding provision bars the employee from recruiting the employer’s employees and

contractors for a subsequent or concurrent employer. Effective November 1, 2013, the Oklahoma

Legislature expanded the exception to the prohibition against restrictive employments contracts by authorizing employers or

businesses to prohibit its employees or independent contractors from soliciting its employees or independent

contractors to work for their new employer/business.

44

What if you violate a covenant not to compete (in a State where it is valid)?

If the employer cares, you will get sued.– Could seek an injunction;– Could seek monetary damages;– Could seek their attorneys’ fees if they win;– Certainly will have to hire a lawyer to defend you.

My friendly advice:Consult with a lawyer before you decide it is ok to violate.

What if a new employer steps in?

What are my options?

Agree to the new contract

Negotiate a new contract

Move on.

Offer an alternative solution

PREPARATION

Before you set out…

It is worthwhileto give thought

to what your priorities are

What do you want?

How do I figure out what I want?

Who are you up against?

Are you evenly matched?

If you are offering an alternative solution

Make sure youdo your homework

INSIGHT

It’s what’s going to make the difference between

What challenges are facing the employer?

What is keeping “them” up at night?

Knowing this answer can be very valuable…

What are you bringing to the Table?

Are you solving a problem?

Helping Avoid a Problem?

Creating Someone Else’s Problem?

Consequences of bad communication?

It can hurt…

You…

Those around you…

Your chanceAt success…

If you’re not solving a problem

Competing Interests Require Balancing

There is a fundamental difference between

Having an organized plan…

… and winging it.

What happens when it all comes together?

Don’t need me… But I’m here if you do!

Mark J. Silberman Partner Health Care Benesch, Friedlander, Coplan & Aronoff LLP 333 West Wacker Drive, Suite 1900 Chicago, IL 60606-2211 Ph: 312.212.4952 Cell: 773.318.4258 Fax: 877.357.4913 Email: MSilberman@beneschlaw.com www.beneschlaw.com

60

Disclaimer (Lawyers Love Disclaimers)

This presentation and handouts are for general information and do not include a full legal analysis of the matters

presented. They should not be construed or relied upon as legal advice or legal opinion on any specific facts or

circumstances.

61