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THREE SUPERLAWYERS NAMED FROM TROUTMAN SANDERS' RALEIGH OFFICE
RALEIGH, NORTH CAROLINA (January 31, 2006) . . . Troutman Sanders LLP is pleased to announce that three of the law firm's partners, Gary S. Parsons, Patricia P. Kerner, and Ashley H. Story, have been recognized by their peers and named "SuperLawyers" in North Carolina.

The SuperLawyer distinction is awarded by the publishers of Law and Politics based on a survey of lawyers throughout the state.

Mr. Parsons and Ms. Kerner are both recognized for their expertise in Civil Defense Litigation and Mr. Story is recognized for his expertise involving Real Estate Transactions. Mr. Parsons was named one of the Top 100 SuperLawyers in North Carolina and Ms. Kerner was named as one of the Top 50 Female SuperLawyers in the state.

Mr. Parsons and Ms. Kerner have recently joined Ashley Story at Troutman Sanders's Raleigh office. They joined Troutman Sanders from the law firm of Bailey & Dixon LLP in Raleigh, North Carolina.

Gary S. Parsons handles litigation matters in state and federal courts. His main areas of practice include civil litigation, appellate practice, products liability, insurance coverage and practices litigation. He has handled a broad array of trials and appeals of civil actions and has defended manufacturers in many types of claims concerning automotive, vaccine, swimming pool products, pharmaceutical, asbestos and much more.

In a January 2005 poll conducted by Business North Carolina magazine, Mr. Parsons was voted the top Litigation Attorney in North Carolina. He is also listed in the 2006 edition of The Best Lawyers in America in the fields of Commercial Litigation, Legal Malpractice Law, and Personal Injury Litigation. Mr. Parsons has been active in lecturing throughout his accomplished career and has actively participated in numerous seminars. He is a graduate of North Carolina State University and earned his J.D. from the University of North Carolina in 1977.

Patricia P. Kerner has a strong background in areas of administrative law and civil litigation. Ms. Kerner's expertise and practice has focused on areas involving products liability and personal injury actions, attorney malpractice claims and insurance coverage disputes. She has represented a wide variety of clients that include cities and towns. She has also represented drug manufacturers, attorneys, police officers, pool product manufacturers, insurers, businesses and the North Carolina Board of Registration for Professional Engineers and Land Surveyors.

Ms. Kerner is listed in the 2004, 2005 and 2006 edition of The Best Lawyers in America. In 1985-1987 she was the law clerk to Chief Judge R. A. Hedrick of the North Carolina Court of Appeals. She is a graduate of Wake Forest University and earned her J.D. from the University of North Carolina in 1985.

Ashley H. Story is the Managing Partner of the firm's Raleigh office. His practice includes the development, construction, acquisition and sale of commercial property, land use workouts and bankruptcy. He has represented multiple large real estate developers, secured special and conditional use permits, counseled a national retailer in the acquisition and development of over 50 new locations and expansion in North Carolina and has been the debtor's counsel for successful Chapter 11 reorganizations including restaurant chains, healthcare provider, a regional shopping mall and apartment complexes.

Mr. Story is a graduate of Wake Forest University, and earned his J.D. from Campbell University in 1982. He also has a degree from Emory University, LL.M Taxation, and The London School of Economics and Political Science, LL.M in 2000.

Troutman Sanders LLP, founded in 1897, is an international law firm with over 600 attorneys serving clients from offices in Atlanta, Hong Kong, London, New York, Norfolk, Raleigh, Richmond, Tysons Corner, Virginia Beach and Washington, D.C. The full-service firm provides advice and counsel in over 30 legal practice areas and is committed to delivering professional service throughout all its locations.

01-31-2006

Thelen Reid Scores Another Big Win for All California Employers in Meal and Rest Period Case
For the second time in just six months, Thelen Reid & Priest LLP has won a major appellate victory benefiting all California employers. In Mills, et al. v. Bed Bath & Beyond Inc. (January 27, 2006) 2006 WL 198588, the California Court of Appeal, Second District unanimously held that the payment for meal and rest period violations mandated by Labor Code Section 226.7 is a penalty and not a wage. This ruling serves to reduce the statute of limitations for meal and rest period violations from four years to one year, and protects employers from the additional penalties and liabilities applicable to wage violations. In fact, the Mills decision may reduce the staggering liabilities presented to California employers in meal and rest period class actions by 90% or more.

California’s Meal and Rest Period Rules
The California Labor Code and Industrial Welfare Commission Wage Orders impose off duty meal and rest period requirements on most California employers. See Cal. Lab. Code § 512, and Sections 11 and 12 of IWC Wages Orders. Under these rules, a non-exempt employee working an eight hour shift is generally entitled to take two 10 minute off duty rest breaks and a 30 minute off duty meal period, while an employee working a 12 hour shift is generally entitled to take three 10 minute rest breaks and two 30 minute meal periods. These meal and rest period rules have existed for decades; however, prior to 2001 there was no statutory remedy for a violation of the rules.

In 2000 the Legislature passed AB 2509, thereby enacting Section 226.7 effective January 1, 2001. Section 226.7 states that if an employer fails to provide a mandated off duty meal or rest period, it “shall pay the employee one additional hour of pay at the employee’s regular rate of compensation” for every day on which a violation occurs. See Cal. Lab. Code § 226.7 (emphasis added).

The “Penalty” vs. “Wage” Controversy
Over the past two years, more than 100 wage and hour class actions have been filed in California courts claiming class wide meal and rest period violations. These cases have been brought against small and large employers alike, and typically seek to recover millions to tens of millions of dollars in alleged liabilities. The enormous and very real potential liabilities presented by these cases is illustrated by the recent (December 2005) Alameda County Superior Court jury verdict of $172 million against Wal-Mart Stores, Inc. in a meal and rest period class action. To maximize potential recoveries, the plaintiffs’ class action bar have argued that the “one additional hour of pay” required by Section 226.7 is a supplemental wage. Based on this characterization, the plaintiffs’ bar have advocated that a four year statute of limitations applies to meal and rest period violations. They also have argued that the many additional remedies applicable to “wage” violations serve to multiply the potential liabilities for meal and rest period infractions well beyond the “one hour of pay” mandated by Section 226.7. Indeed, the Wal-Mart verdict included an award of $115 million in punitive damages—a remedy that is unavailable under California law where the underlying claim is for a penalty and not a wage.

In contrast, defense counsel have argued on behalf of employers that the payment required by Section 226.7 is a penalty and not a wage. Since the statute of limitations applicable to penalty claims is one year, and since the additional remedies applicable to any failure to pay wages do not apply to penalties, the financial significance of the “penalty” vs. “wage” debate is both obvious and substantial.

Conflicting Decisions on the “Penalty” vs. “Wage” Issue
In the past six weeks, three California Courts of Appeal have weighed in on the “penalty” vs. “wage” issue. On December 2, 2005, the First District Court of Appeal held that the Section 226.7 payment is a penalty and not a wage, and that a one year statute of limitations applies to meal and rest period claims. Murphy, et al. v. Kenneth Cole Productions, Inc. (2005) 134 Cal.App.4th 728. On January 20, 2006, the Fourth District Court of Appeal reached the opposite conclusion, holding that Section 226.7 mandates payment of a penalty in the form of a supplemental wage payment, and that the applicable statute of limitations is as long as four years. National Steel and Shipbuilding Company, et al. v. Superior Court, (January 20, 2006) 2006 WL 147520. And last year a federal District Court also concluded in a published decision that the Section 226.7 payment is a wage. Tomlinson, et al. v. Indymac Bank (C.D.Cal. 2005) 359 F.Supp2d 891. The California Labor Commissioner also has taken conflicting positions with respect to the “penalty” vs. “wage” issue. Despite first expressing the view that the Section 226.7 payment is a wage, the Labor Commissioner issued a press release in December 2004 concluding that the payment is a penalty, and announcing an intent to promulgate formal regulations to that effect. This announcement set off a storm of public controversy over the Labor Commissioner’s political agenda and independence, and provoked threats from various labor unions and employee interest groups to mount legal challenges to the Labor Commissioner’s proposed rulemaking. Last year the Labor Commission affirmed its position on the “penalty” vs. “wage” issue in a precedent decision victory that was also obtained by Thelen Reid & Priest LLP. In Hartwig v. Orchard Commercial, Inc., DLSE Case No. 12-56901RB, the Labor Commissioner unequivocally stated that the Section 226.7 payment is a penalty and not a wage.This area of law was further complicated last August when the California Assembly passed Assembly Concurrent Resolution No. 43 (“ACR No. 43”). Through ACR No. 43, the Assembly sought to declare what the Legislature intended when it enacted Section 226.7 more than five years earlier in 2000. Interestingly, although a majority of the current Assembly’s members agreed that the Section 226.7 payment was intended to be a wage, only two of those members were in the Legislature in 2000, and both of them voted against ACR No. 43.

All of this has created a state of uncertainty that has compelled many employers to settle cases they might otherwise have fought, and to do so for much more than they might otherwise have agreed to pay.

The Mills Decision and Its Significance to California Employers
The Mills court unanimously rejected the proposition that the Section 226.7 payment is a wage and not a penalty. The court arrived at this conclusion based on Thelen’s arguments regarding the characteristics of a penalty under California law, the legislative history to Section 226.7 and the legal insignificance of ACR No. 43.

The Mills court first concluded that although Section 226.7 appears to mandate a penalty payment, the statute is not unambiguous. Consequently, the court reviewed the legislative history underlying Section 226.7. That history confirms an intent by the Legislature to impose a penalty on employers who violate their meal and rest period obligations. Moreover, in the view of the Mills court, the Labor Code’s definition of “wages” and settled California law regarding the characteristics of a penalty further support the conclusion that the Section 226.7 payment is a penalty. As the court stated:

“[W]ages are fundamentally ‘compensation for services rendered’ . . . . The payments that become due under Section 226.7 for missed breaks do not compensate an employee for additional services rendered. To the contrary, Section 226.7 payments are fixed sums that become due . . . regardless of the amount of time wrongly worked during a break period . . . . The failure of Section 226.7 to correlate the payment due to any additional labor performed by an employee undermines any argument the payment is a wage.”

In reaching this holding, the Mills court expressly rejected the reasoning of the National Steel and Tomlinson cases, and held ACR No. 43 to be unpersuasive and unentitled to any deference.

The practical importance of the Mills and Murphy decisions is to reduce by 90% or more the exposure of California employers who now face or may later be the target of class litigation involving alleged meal and rest period violations. This huge reduction in the financial stakes of such litigation may result in a decline in new filings in this area, and will certainly motivate many employers to fight cases they might otherwise have settled. Either way, it’s a win/win situation for all California employers.

That said, the conflicting decision in National Steel may require (absent decertification) the last chapter in this story to be written by the California Supreme Court. A petition for review has already been filed with the Supreme Court in Murphy.

The Mills Defense Team
Bed Bath & Beyond Inc. has been ably represented in the Mills case by a Thelen Reid class action team comprised of partners Thomas E. Hill and Linda S. Husar, and senior associate David N. Buffington. This is Mr. Hill’s second appellate win in a wage and hour case of first impression this year. He also was lead counsel for Pacific Gas & Electric Company in Conley, et al. v. PG&E (2005) 131 Cal.App.4th 260. In that case, the California Court of Appeal, First District unanimously upheld an employer’s right to debit the vacation leave banks of exempt employees for partial day absences without invalidating the overtime exempt status of those employees. A contrary decision would have destroyed the exempt status of hundreds of thousands of California employees, and exposed California employers to more than a billion dollars in unanticipated overtime liabilities.

Thelen Reid’s Class Action Defense Expertise
Thelen Reid enjoys a national reputation for preeminence in the area of wage and hour and employee benefits class action defense. We litigate these types of cases for some of the largest employers in the country, and we do so with intelligence, tenacity, and efficiency. Most importantly, we consistently succeed in achieving our clients’ stated defense goals. We believe in personal accountability, timely communication, early and candid case assessments, and cost-effective advocacy. We view each case as an opportunity to prove our commitment to these beliefs, and to deliver on our stated promise.


01-31-2006

SCHIFF HARDIN LLP WELCOMES WILLIAM POSTNER AS OF COUNSEL IN THE NEW YORK CITY OFFICE
NEW YORK CITY - Schiff Hardin LLP has added William Postner as of counsel in the Construction Law Group in the New York City office. He joins the firm from Postner & Rubin, where he was a founding partner. Earlier, from 1970 to 1979, he was a partner at the firm of Max E. Greenberg, Trayman, Cantor, Reiss & Blasky, after starting his career as an associate at the Max E. Greenberg law firm in 1964.

Mr. Postner has been involved in many facets of construction contract law, representing owners, design-builders, contractors, construction managers, subcontractors, suppliers, architects, engineers and sureties. He has negotiated and drafted contracts on behalf of those parties, prepared, negotiated and mediated claims, and prosecuted and defended suits before arbitration tribunals, administrative agencies, and state and federal courts. He also has served as an expert witness in construction related litigation.

Mr. Postner has lectured for the American Bar Association, New York State Bar Association, various law schools, engineering societies, contractor associations, and other professional organizations on construction contract documents and claims, competitive bidding, changes and changed conditions, dispute resolution, the engineer as an expert witness, architects' and engineers' liability, suretyship. and construction insurance. Mr. Postner has served as a Special Master in the Supreme Court of the State of New York, County of New York.

He is the author of "The Ball's in My Court (Because I Drafted the Contract) and I'm the Referee (or Chief Executioner)," a section in Construction Law & Risk Management: Case Notes and Articles, Ardent Publications, 2003 and co-author of the New York Construction Law Manual, Shepard's/McGraw-Hill, 1992, republished by West Publishing 1998, Supplement, 2005 and "Fixing the Failure and Settling the Dispute," a chapter in Construction Failures, Wiley Law Publications, 1989.

He is a member of the American College of Construction Lawyers (Board of Governors 2000-2002), the American Arbitration Association Construction Industry Panel of Arbitrators, the New York State Bar Association (Torts, Insurance and Compensation Law, Commercial and Federal Litigation and Trial Lawyers Sections) and the American Bar Association (Tort, Trial and Insurance Practice and Litigation Sections and the Forum on the Construction Industry).

Mr. Postner is ranked in the second band of leading individuals practicing construction law in New York by Chambers USA with the comment that he "has a stellar reputation and is named by many as 'one of the pillars of the industry.'" He also is listed among New York's leading construction lawyers by the International Who's Who of Construction Lawyers and The Best Lawyers in America, and he was named as one of the New York area's best construction lawyers by New York magazine. He has a Martindale-Hubbell AV rating.

Mr. Postner received his undergraduate degree (B.A., 1960) from Fordham University and his law degree (LL.B., 1964) from the New York University School of Law. He is admitted to practice in New York, as well as before the U.S. District Courts for the Eastern and Southern Districts of New York and the District of Vermont, the U.S. Court of Appeals for the Second Circuit, the U.S. Court of Federal Claims, and the U.S. Supreme Court.

01-31-2006

Tomorrow's Business Radio Show - January 2006 Summaries
Tune into Washington’s WGMS, 103.5 FM for lively “Pepper Moments,” with each guest every Tuesday and Wednesday at 3:20 p.m and Thursday and Friday at 1:20 p.m. Visit www.wgms.com to hear a full audio version (archived) of the program, to read a summary and view a photo of each guest. Visit www.tomorrowsbusinessradio.com for a listing and summary of all past guests.

“Pepper Moments” can be heard on WBIS 1190 AM six days a week ( Monday through Saturdays) at 7:32 a.m. and 8:32 a.m. Each show is archived for one week on WBIS at www.wbis1190.com.

01-31-2006

Partner Karla Sanchez Named to Crain's New York Business's "40 Under Forty"
Karla Sanchez has been named to Crain's New York Business's Annual List of "'40 Under Forty' - New York's Rising Stars." Karla is one of 15 women (and the only female attorney) to be included. Other honorees include a medical researcher, a magazine editor, a choreographer and business executives in fields including finance, design and real estate.

01-31-2006

Boston Chamber of Commerce Names Mintz Levin Attorney Deborah Daccord as One of Boston's Future Leaders
Boston, MA - Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC announced that Deborah Daccord, a partner in the firm's Health Section, has been selected as a Boston Future Leader by the Boston Chamber of Commerce for her pro bono legal work, community service and professional skills. Ms. Daccord has made numerous contributions to the Boston community including youth mentoring and providing pro bono legal services to organizations that assist young people in need.

Ms. Daccord was one of the earliest law apprentice teachers of Citizen Schools, an after-school apprenticeship program for middle school students. Over the past nine years, she has taught the legal apprenticeship many times, as well as served as a writing coach and mentor to the students.

"Deb has shown a tireless commitment to bettering the lives of Boston's young people," said Andrew R. Urban, Co-Managing Member of Mintz Levin. "She is both an inspiration and a wonderful example of how one person can bring about positive change. There is certainly no one more deserving of this recognition by the Chamber than Deb."

As part of Mintz Levin's pro bono program, Ms. Daccord has worked with such programs as an alternative middle school for court-involved youth - a school of last resort. Ms. Daccord helped the founders of this school form a charitable organization, obtain tax-exempt status, as well as guide it through space-leasing issues, fund-raising and board development.

Ms. Daccord has also been active in Mintz Levin's Domestic Violence Project. For many years, she represented women seeking restraining orders against abusive partners. In connection with that work, she also served on the Brookline Domestic Violence Roundtable, where she spearheaded a subcommittee that successfully drafted a domestic violence policy for town employees.

Ms. Daccord is also active in community development projects, including a project at a church in Jamaica Plain where she is closely involved in the planning, development and construction of a nursery school space that will serve as a new home for a bilingual day care center for the Jamaica Plain community.

Boston's Future Leaders is a program established by the Boston Chamber of Commerce to enhance personal leadership and professional skills; provide networking opportunities; education about public policy issues that impact local businesses; and provide an increased ability to add value to its members' organizations and to the Greater Boston Business community as they advance in their professional positions.

Ms. Daccord received her A.B., cum laude, from Harvard College (1992), and her J.D., cum laude, from Harvard Law School (1995).

Mintz Levin is an AmLaw 100 law firm with offices in the US and the UK. The firm has exceptional depth in a broad range of practice areas, but our clients recognize that what sets us apart from other law firms is our industry focus. By truly understanding business drivers and industry trends, we are able to provide our clients with more than just legal advice. We provide legal solutions to our clients' business issues. Since 1933, our lawyers have represented entrepreneurs, emerging growth companies, government agencies, and leaders in primary industries that include Life Sciences/Biotechnology; Technology & Communications; Financial Services & Insurance; Healthcare; Real Estate, Hospitality & Construction; and Retail & Consumer Products. Our practical knowledge combined with our industry expertise enables us to provide our clients with enterprise legal advice that gives their business a competitive advantage in the marketplace.





01-31-2006

Mintz Levin Counsels Former CEO and President of John Hancock Life Insurance Company in Deal to Form Financial and Estate Planning Firm
Boston, MA - Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. today announced that it has represented James M. Benson, former Chief Executive Officer and President of John Hancock Life Insurance Company, in his negotiations with Clark Consulting, Inc., a leading public executive compensation and benefits company, to establish a new venture, Clark Benson, LLC.

Clark Benson, LLC will concentrate on financial planning, wealth transfer and employee benefits, and will be headed by Mr. Benson as its President. The company will focus on the high-net-worth market, offering estate planning and key person life insurance. Its distributor structure will offer its partners two business models: an acquisition model and an affiliate model. Winsor Way Associates, Inc., a company affiliated with Mr. Benson, will hold a 25% ownership stake in the new company. Clark Consulting will hold a 75% ownership stake in the new company and will provide working capital.

Mintz Levin attorneys R. Robert Popeo, Bram Shapiro, Robert Gault and Rahul Kalke, with assistance from attorneys David Halpert, Thomas Greene, Kevin Walsh and Travis Blais, counseled Mr. Benson during the transaction.

Mintz Levin is an AmLaw 100 law firm with offices in the US and the UK. The firm has exceptional depth in a broad range of practice areas, but our clients recognize that what sets us apart from other law firms is our industry focus. By truly understanding business drivers and industry trends, we are able to provide our clients with more than just legal advice. We provide legal solutions to our clients' business issues. Since 1933, our lawyers have represented entrepreneurs, emerging growth companies, government agencies, and leaders in primary industries that include Life Sciences/Biotechnology; Technology & Communications; Financial Services & Insurance; Healthcare; Real Estate, Hospitality & Construction; and Retail & Consumer Products. Our practical knowledge combined with our industry expertise enables us to provide our clients with enterprise legal advice that gives their business a competitive advantage in the marketplace.

01-31-2006

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