Cream of the Crop 1/Cream of the Crop 1.iso/BUSINESS/SBA62.ARJ/FSBA.EXE/F410.SBE

Text File | 1992-04-30 | 36KB | 688 lines

@650 CHAP 9

          ┌───────────────────────────────────────────────┐
          │   EMERGING ECONOMIC TRENDS AND LEGAL ISSUES   │
          └───────────────────────────────────────────────┘


All businesses today, of every size and type, are being buffeted
by the ever-accelerating rate of change in the business, economic,
social and political environment in which they must operate.
Part of the reason, of course, is a hyperthyroid Congress, along
with 50 equally overzealous state legislatures and countless
government agencies who spew out reams of new laws and regulations
all year long, in ever greater volume....Which you, as a business
person, are expected to understand and apply, not to mention
simply knowing about the new laws' existence.

While we update this program regularly, four times a year, in order
to keep our users as much abreast of the constant ebb and flow of
tax, legal and other changes as possible, we still find each time
we revise it that large portions of the material have already been
rendered obsolete and useless by rapidly unfolding law changes and
other events that have transpired since our last update three months
earlier.

But we can't blame all of the disorienting changes that are
occurring on our lawmakers, because it seems that life in general
on this small planet is becoming more complex and unpredictable by
the day.

Accordingly, while we possess no crystal ball, the following
section is provided to give you, as a business owner, a brief
overview of some of the developing trends in the business
environment that have already arrived, or that appear to us to be
just over the horizon.  (We have already covered in this edition
the sweeping new rules that have been enacted under the Americans
with Disabilities Act -- rules that will be going into effect at
various dates in 1992, 1993 and 1994, so we refer you to the
appropriate portions of this program, or, for a deeper discussion
of those rapidly approaching deadlines, to Chapter 5 (Sec. 5.11)
of our book STARTING & OPERATING A BUSINESS IN @STATE.)

          ┌───────────────────────────────────────────────┐
          │THE CHANGING ECONOMIC ENVIRONMENT--AS WE SEE IT│
          └───────────────────────────────────────────────┘

Changes in the global economic structure, in the wake of the
collapse of communism and the Soviet Union and the shift toward
more efficient, free-market oriented economies in places as far
apart as Poland and Argentina (not to mention the vast changes
going on in Mexico and many of the other developing countries)
are creating a world that will soon look very different from the
one we have gotten accustomed to since 1945.  While most of us
may applaud many of the changes going on abroad, the net result
seems to be the creation of a far more competitive world, one
where U.S. businesses, even relatively small ones, are running
up against increasingly intense international competition, and
where many firms that never gave a thought to export markets
before may have to get involved in doing business overseas if
they wish to continue as viable operations in the globalized
economy.

Furthermore, even if your business is of a type or size that
seems to make foreign competition seem irrelevant, you are still
unlikely to completely elude its indirect effects, such as:

      .  Low labor rates abroad that are causing the
         permanent shutdown of many large and small U.S.
         manufacturers, who can no longer meet the
         competition from Japan, Mexico and elsewhere, or
         who move their operations overseas to places like
         Indonesia or Thailand, where wages are still low.
         This trend seems likely to continue, with a rippling
         effect throughout our economy, adversely affecting
         many of the small firms that either are suppliers to
         large U.S. manufacturers or whose service operations
         (restaurants, retail shops and the like) will be
         drastically affected as larger companies close plants
         and make massive, and in most cases permanent, layoffs
         of thousands of employees.  This is a rude fact of
         modern life of which almost anyone doing business in
         the so-called "Rust Belt" is already acutely aware,
         and which the recession that began in 1991 is rapidly
         introducing to the parts of the country that have
         heretofore escaped the brunt of the effects of
         increased foreign competition.

      .  To survive in the coming decade, small firms will
         increasingly need to streamline their operations,
         increase their flexibility (such as by using part-time
         and temporary personnel more, or outside contractors),
         become more efficient than ever, and, above all,
         increase the quality of the service they provide or
         the goods they produce.  Firms that continue to do
         "business as usual" in the 'Nineties are likely to go
         the way of the dinosaurs, passenger pigeons, and
         the buggy whip.

      .  Increasing automation, both here and abroad, is also
         likely to have a dramatic effect on employment and
         competitiveness in this country and throughout the
         world, spearheaded, as usual, by Japan, where whole
         factories already operate all night long in virtual
         darkness, with no one there to run them but a lone
         night watchman and hordes of whirring robots quietly
         running up and down the aisles, picking up finished
         items and dropping off parts for other robots to
         assemble.

         Automation has been a factor in replacing blue
         collar labor for decades now, but with the recent and
         continual explosion in computing power and sophisti-
         cation, vast numbers of middle managers and other
         white collar workers are being displaced.  With the
         advent of "expert systems" and "artificial intelli-
         gence" (such as this computer program) which are still
         in their infancy, but rapidly coming into their own, it
         is difficult to say whose job, if anyone's, will be
         safe in a few years.  Or whose business, for that matter.
         Anyone or anything may become obsolescent overnight in
         the new economic environment we are moving into.

         While the ability to replace workers with computers or
         computer-driven machinery may be very attractive, from
         a cost-savings standpoint, to the individual employer,
         its societal effects are hard to predict, and may prove
         to be very adverse to the overall business environment,
         or at least to large segments of business that fail to
         adapt rapidly enough.  Things are moving so fast right
         now in the field of information processing, that it is
         difficult to visualize how the world and our own economy
         may look even 5 or 6 years from now.  However, it seems
         clear that not everyone who is laid off can go to work
         flipping hamburgers at McDonald's -- and in Japan there
         are already drive-in fast food restaurants that have
         replaced the order-takers with smiling, friendly robots
         with voice-recognition capability, machines that take a
         customer's order over the intercom and fill it automat-
         ically, without need of a teenager.

       . Largely in response to ever-fiercer foreign competition,
         employer "downsizing" continues apace in 1991, up sharply
         from 1990.  According to an American Management Association
         survey for the year ending in June, 1991, 55.5% of the
         organizations polled engaged in downsizing and 60% of those
         firms had also made significant staff cutbacks in the
         previous year, suggesting that firms are now cutting even
         deeper and deeper.  The survey revealed that the cuts were
         heaviest on the Pacific Coast, averaging 12.6% of the
         workforce among firms reporting downsizing.  Middle manage-
         ment jobs, which are estimated to make up something like 5%
         to 8% of the total work force, accounted for over 16% of
         the jobs cut in the 1991 survey period.

      .  While much of this change seems frightening to business
         people, as well as to their employees, the hundreds of
         thousands, perhaps even millions, of skilled management
         and white collar workers who will be given their pink
         slips and severance packages by "downsizing" corporations
         over the next few years may also give rise to fantastic
         opportunities, as many of these people are likely to
         start their own, smaller businesses, due to the permanent
         disappearance of so many middle management or automatable
         jobs.  Many of them may even keep on working for their
         old firms, but as independent contractors, or outside
         consultants.  In addition to enriching the overall
         business environment by creating a major upsurge in the
         formation of new, small, and flexible business entities,
         firms that cater to the needs of other small businesses
         may find the coming decade to be one of explosive growth
         and unparalleled opportunity.

         One of the most predictable trends, which is already well
         under way, is the explosive growth in "telecommuting,"
         where more and more people work out of their homes,
         communicating with their clients or employers by use of
         personal computers, modems, faxes or multiple phone
         lines.  Already, some employers, like certain government
         agencies in Washington, D.C., are taking an intermediate
         step by setting up satellite telecommuting offices in
         suburban areas.  By going to these nearby satellite
         offices, equipped with computer workstations, many
         workers can avoid long and arduous commutes to downtown
         offices on most days, by instead piping their work product
         electronically to the main office.

         A 1991 survey by Link Resources Corporation, a research
         and consulting firm, showed telecommuting has become a
         major factor in the economy, almost overnight.  The
         survey estimated that company employees who work at home
         part- or full-time increased by 38% in 1991, over 1989,
         to 38.4 million individuals, most of whom are believed to
         be "telecommuting."  The survey apparently did not even
         take into account home-based businesses, which are also
         believed to be proliferating at truly startling rates.

There's an old saying that, "It's an ill wind that blows no one
some good."

The monumental changes in the marketplace that are already taking
place will surely create tremendous new business opportunities, as
well as problems, in the coming years.  These should include the
more obvious ones such as sales of more fax machines and other
equipment and supplies for home office use, as well as less obvious
opportunities like restaurants (other than pizza parlors) that
deliver meals to busy home workers, and doubtless many other novel
kinds of services and products -- things that no one has even dreamed
of yet.

                 ┌─────────────────────────────────┐
                 │     PENDING TAX LAW CHANGES     │
                 └─────────────────────────────────┘

The abrupt plunge in the U.S. economy in late 1991 and early 1992
is likely to lead to significant tax law changes in 1992,
particularly with a presidential election coming up in November,
as politicians try to jump start a flagging economy, or at least
do something, harmful or otherwise, to give voters the impression
that they are working to get us out of the economic doldrums.
Some of the major possible tax changes you should be looking out
for, which may have already passed by the time you read this,
would include the following:

      .  MANDATORY HEALTH CARE COVERAGE.  This is likely
         to be the biggest item on the entire legislative
         agenda in Congress this year, as the battle over
         what to do about the increasing inaccessibility of
         medical care to large segments of the population
         gets fought out on Capitol Hill.  Most of the
         legislative proposals that have been floating
         around Congress for the last year or two would
         involve a combination of:

              (1)  Requiring that most, or all employers,
                   provide some level of medical coverage for
                   their full-time employees; and

              (2)  Additional payroll taxes to finance the
                   cost of government-provided health care for
                   individuals outside of the work force.  In
                   some of the proposals, the employer would
                   be given a choice of paying a hefty tax for
                   national health insurance, or else providing
                   coverage for employees; other proposals
                   would require both, which could be a very
                   difficult financial burden for many small
                   businesses, even those that already provide
                   medical insurance for their employees.

         In a related issue, close to the hearts of all
         self-employed individuals, some of the proposals
         would also (finally!) put self-employed persons
         and S corporation shareholder-employees on the
         same footing as incorporated business owners, by
         increasing the deductible amount of medical insurance
         for such business owners from 25% of the amount
         incurred to 100%.

      .  CAPITAL GAINS TAX RELIEF.  The U.S. is one of the
         few countries that taxes capital gains at nearly the
         same rate as other income.  Many of the fastest
         growing economies in the world don't tax capital
         gains at all, and much of the available evidence
         indicates that reducing capital gains rates in the
         late 'Seventies and early 'Eighties had a remarkable
         effect on stimulating capital investment and boosting
         economic growth in this country (and that raising the
         capital gains rate in the late 'Eighties had the
         opposite effect).  Perhaps the message will finally
         seep through to Congress this year, and we may well
         see capital gains cuts if the recession gets severe
         enough to induce an adequate level of panic among our
         courageous elected representatives.  After all, their
         job security will be at stake in November, too.

      .  OTHER INCENTIVES.  Look for various other business
         tax incentives to be resurrected, such as restoring
         the investment tax credit, accelerated depreciation or
         new jobs credits.   Since the government has a history
         of taking such tax "gifts" back after a year or two,
         you may want to act fairly quickly to find out more
         about and take quick advantage of any such capital
         investment incentives as may be enacted, before they
         are taken away again.


         ┌─────────────────────────────────────────────────┐
         │OTHER LEGAL TRENDS AND NEW OR PENDING LEGISLATION│
         └─────────────────────────────────────────────────┘

SHARED WORK PROGRAMS

A program that has been adopted in a number of states, and which
appears to be growing in acceptance, is the "shared work" program
under state unemployment insurance laws.  Essentially, what the
shared work programs do is allow employees to collect full
unemployment benefits while still working a minimal number of
hours per week.  This not only benefits the employee, but can
also be very helpful in the case of an employer who, due to the
recession or other business difficulties, has to temporarily cut
back the hours it can employ workers for a period of time, until
business conditions improve.  In states where there is no such
program, it is often necessary to lay a worker off entirely for
him or her to collect unemployment benefits, which will usually
be more palatable to the worker than just working a few hours a
week and being ineligible for benefits.

Under the shared work programs, the employer can often retain a
good employee during a temporary slow period, while the employee
supplements his or her unemployment benefits with a modest amount
of wages from working part-time, which together may be sufficient
to keep the individual in question from taking a permanent
position elsewhere.  Then, if things improve in a few months,
you may be able to restore the cut-back employee to full-time
status again, rather than lose a good and already trained worker
to another company because of the temporary layoff.

These shared work programs make a lot of sense for everyone, so if
your firm is getting to a point where you are considering having
to lay off good employees whom you don't want to lose, be sure to
contact your local state unemployment office to find out if your
state has adopted such a program.  If so, you may be able to keep
the people on part-time until business picks up again.  Good
people are hard to find, and you don't want to lose them.


NEW CIVIL RIGHTS LAWS

The new federal Civil Rights Act of 1991 (CRA91), which immediate-
ly became effective upon enactment on November 29, 1991, is
certain to make life a lot more complicated for all covered
employers in the area of employment practices.

The new law's most controversial aspect will be in the "disparate
impact" cases, where a company's employment practices, although
not shown to be intentionally discriminatory, have a "disparate"
(unequal) impact on employment of protected groups.

For example, if a company is located in an area where 80% of the
population consists of Native Americans, but only 5% of its
employees are Native Americans, there may be grounds for a
"disparate impact" discrimination claim against the employer,
under prior civil rights law as well as these new CRA91
provisions, regardless of employer intent.

The huge difference that CRA91 will make in these "disparate
impact" cases is that under prior law, the Supreme Court has
held that the burden of proof is upon the employees who allege
discrimination, to identify a particular business practice of
the employer that resulted in the disparity.  Under the new
law, by contrast, the employees are relieved of this burden of
proof if they can simply show that the employer failed to select
an alternative employment practice (such as hiring quotas) that
would not have had a "disparate impact" -- that is, that would
not have had a negative impact on the minority or other protected
group.  Instead, the burden of proof in these cases is now
shifted to the employer to show that the challenged employment
practice (regarding hiring, promotions, pay, or other aspects of
employment) is "job-related for the position in question and
consistent with business necessity" (whatever the courts
ultimately decide that means).

It is the vagueness of this part of the new civil rights law that
President Bush initially expressed concerns over, arguing that
many firms would find it easier to simply adopt minority hiring
quotas than to attempt to prove the "business necessity" defense
in court.  There are no easy answers as to what policy a company
should adopt in this regard, but it does seem reasonably clear
that the only safe way to avoid discrimination suits under the
new law may be to adopt some sort of quota system, despite the
issues of unfairness and possible employee morale problems that
the use of hiring quotas sometimes entails.

CRA91 also considerably expands the monetary damages that can be
awarded in cases of intentional discrimination.  Before, an em-
ployer who lost such a discrimination suit was usually liable
only for back pay, front pay, lost benefits, attorney's fees and
court costs.  Now, under CRA91 (which may even be retroactive in
effect), compensatory damages may also be allowed in addition to
other monetary damages.  CRA91 also overrides a Supreme Court
case that had limited fees recoverable by a claimant for expert
witness fees to the flat $40 limit for "fact" witnesses.

In light of the foregoing changes in the Civil Rights Act of
1991, the odds, as well as the costs, of losing a discrimination
action have been increased significantly for employers, and the
new rules will make it much more attractive for plaintiffs to
file such suits, both for claims of intentional discrimination
and in "disparate impact" cases.  Employers can now expect a
great many more such claims to be filed, as a result.  Thus,
however fair you may feel your firm's employment practices are,
if you are a large enough firm (15 or more employees, generally)
to be subject to the Civil Rights Act, this may be a good
time to consult an attorney who is familiar with employment
discrimination matters to see what, if any, steps you may need
to take to protect your business from liability in this area,
since the amount of such litigation is going to expand
significantly.


SEXUAL HARASSMENT IN THE WORKPLACE

The Clarence Thomas-Anita Hill drama, which replaced afternoon
soap operas and kept millions of glassy-eyed Americans glued to
the television tubes in their living rooms for several days in
the fall of 1991, has brought the issue of sexual harassment to
a new and heightened level of awareness among the public.  While
sexual harassment as such is not mentioned anywhere in Title VII
of the federal Civil Rights Act, the Equal Employment Opportunity
Commission (EEOC) and the courts have long accepted such
harassment as being illegal and discriminatory.  In addition,
many states have adopted specific laws banning sexual harassment.

Because this is now such a highly topical issue, many employment
law experts expect an upsurge in litigation involving sexual
harassment claims, so it behooves you to take a fresh look at
your firm's policies regarding this subject.

For a discussion of the federal sexual harassment law and steps
you can take to protect your firm from being sued for failing to
take proper steps to prevent such acts from occurring, see the
index item (using the "INDX" Main Menu selection in this program)
on "SEXUAL HARASSMENT," or refer to Chapter 5.8 of our companion
book, STARTING & OPERATING A BUSINESS IN @STATE.


WRONGFUL TERMINATION OF EMPLOYEES

This is another area of growing importance in the area of the
relationship between employers and employees.  For a great many
years, it was generally the rule that an employer was free to
fire employees "at will," without needing any good reason to do
so, unless there was some sort of formal contractual arrangement
or collective bargaining agreement.  This situation has begun to
change in recent years, mainly as a result of a number of
revolutionary court decisions in California, holding employers
liable for damages for "wrongfully" discharging employees.
Initially, such cases tended to involve extreme and egregious
situations, where employers fired "whistle-blowing" employees
who threatened to report fraudulent activities of their employer,
secret dumping of toxic wastes, or the like.

However, as the legal concept of wrongful termination has grown
to be more accepted, and begun to spread to courts in states
other than California, the scope of what constitutes "wrongful
termination" has begun to expand, and at this point it is
difficult to say how far this new "right" will be extended in
the future.

One indicator that this idea is spreading is the recent approval,
by the National Conference of Commissioners on Uniform State
Laws, of a Model Employment Termination Act.  Under the Model
Act, which is intended to set up guidelines for state legislatures
to adopt, an employer would not be able to terminate an employee
without good cause if the employee has worked for the employer
for at least one year and for at least 20 hours a week during the
26 weeks prior to termination.  "Good cause" would mean:

      .  a reasonable basis for termination, in light of such
         factors as the employee's duties, responsibilities,
         conduct and job performance, or

      .  an employer's good faith exercise of a business
         judgment relation to economic or institutional goals.

While it is unclear, as yet, to what extent the states will rush
to adopt such legislation, or to what extent courts will expand
the concept of wrongful termination, but it seems fairly certain
that, in the future, employers are going to have to become in-
creasingly careful about documenting their reasons for firing any
employee.  The days when you, as an employer, could choose to
fire an employee just because you got up on the wrong side of the
bed in the morning may be coming to an end soon, at least in a
number of states.


PROPOSED STRIKER REPLACEMENT LAW

Another piece of legislation that was introduced in Congress in
1991 but which didn't pass was the Worker Replacement Act.  Since
it has strong AFL-CIO backing, it is by no means dead, and its
passage could be extremely damaging to small employers, so this
is a hot issue you may want to write or call your Congressman
about before it is too late. The legislation, as it was proposed
in 1991, would prohibit employers from permanently replacing
workers who go on strike, and thus would fundamentally alter the
balance between unions and employers that has been in effect
since New Deal days, tilting the balance strongly in favor of
unions.

The law, if passed, would require that an employer refrain from
hiring permanent replacement employees during a strike, and the
employer would have to give the strikers their jobs back when
they are ready to return to work after the strike is over.

At present, companies can fire workers who go on strike over
economic issues, such as wages, but not if the company refuses
to bargain in good faith with the union, or if the walkout stems
from other acts of the employer.  The proposed law would extend
the firing ban to strikes over economic issues, which are usually
the reasons for labor walkouts.  By extending this protection
only to unionized workers (as the House version of the bill, H.R.
55, would do), such a law would give unions tremendous clout in
organizing the workers of small companies, since they would be
able to offer a major advantage that is not available to non-
union workers.

Finally, the proposed legislation would permit any two workers of
a non-unionized small business to walk off a job in protest of
working conditions, in effect giving them the benefits of a union
without having to go through the process of a certification
election to establish a collective bargaining unit.  This
provision could also prove to be a major burden on small, non-
union employers.

Although this worrisome bill didn't get enacted in 1991, it is
almost certain to be on the front burner in 1992, an election
year.  If it passes, it will be a major blow against business in
general, and against small businesses, in particular, who have
usually been able to maintain good enough relationships with
their workers to avoid becoming unionized.


INCREASING IMPACT OF ENVIRONMENTAL LEGISLATION
ON SMALL BUSINESS

A recent article in the January, 1992 issue of the California
Lawyer reported that, despite hard economic times in the legal
profession lately, the demand for lawyers in the field of
environmental law is expanding beyond the capacity of many law
firms and companies to fill such legal positions.  While this
may be wonderful news for the legal profession, at a time when
even law firms have been forced to make significant layoffs, it
is most assuredly NOT good news for the typical small business.

The reason for all the new demand for environmental lawyers is
that this is an area of the law that is already beginning to
have a huge impact on the way many companies do business, and
seems clearly destined to exert an even greater impact in coming
years.

The Clean Air Act of 1991, for example, will have a dispropor-
tionately large effect on small businesses, particularly because
they are small, and because their economies of scale are not as
great; thus, they will tend to be hit much harder by the costs
of the new environmental restrictions.  All sorts of small firms,
such as bakers, dry cleaners, body shops, painters, service
stations, and printers are going to be required to purchase
expensive new technology and machinery to reduce emissions of air
pollutants, if they wish to remain in business, once the Clean
Air Act amendments go into full effect.

For example, gas stations will have to install expensive vapor-
recovery devices on each gas pump, which can cost about $30,000
for a typical gas station, plus incur significant ongoing
maintenance costs.  Some states, particularly California, which
have already required technology such as vapor-recovery devices
for a number of years, will be less impacted by many of the new
federal Clean Air Act provisions, but businesses operating in
extremely smoggy areas such as some parts of California,
Houston, Texas and elsewhere, will soon be subject to draconian
environmental rules, imposed by local government, if those
areas are to achieve compliance with federal clean air
standards in the next few years, as federal law requires
they must.

While it is beyond the scope of this program to go into great
detail on increasing environmental restrictions, readers
should be aware that almost every business in urban areas
of America may need to consult an environmental law specialist
at some time in the next few years.  Penalties for violations
tend to start at levels like $25,000 a day under many of the
environmental statutes, so this is an area where you can't
afford even a brief slip-up.

For a general overview of some of the major federal environmental
laws your business may be subject to already, in addition to the
latest Clean Air Act amendments mentioned here (some of which
won't go into effect for up to 20 years), refer to Chapter 9 of
our book, which is the companion to this software, STARTING AND
OPERATING A BUSINESS IN @STATE.)

(Note that we are now writing a major section on environmental
laws, from A to Z, including the 1991 Clean Air Act amendments,
which will appear soon in subsequent releases of this program.)


PROPOSED PATENT LAW CHANGES

In the U.S., for over two centuries, it has been the law that the
person who could prove that he or she was the first in time to INVENT
something was the person entitled to patent it, even if someone else
filed for the patent first.  However, this well-established rule of law
may be about to change, it appears, as we are under pressure from most
foreign countries to conform to their patent rules, which protect the
first person to FILE for the patent.  Bills have been introduced
recently in both the House and Senate that would make this revolution-
ary change in U.S. patent law if enacted, so that we, too, may soon be
on a "first to file" basis of granting patents.

If this new rule on patents becomes law, it will make it much more
important for legally unsophisticated inventors to be aware of the
"first to file" requirement, since they may no longer be able to
protect their patent rights simply by documenting evidence of when
they came up with their invention.  The ground rules may be about to
change, and if they do, inventors will have to learn that the only
safe way to protect their patent rights will be to file for a patent
as soon as legally and practically possible.  Ignorance of the basic
rule of the patent law will no longer be a luxury an inventor can
afford if this legislation passes.

For more information on patents, and on the pending legislation,
use the "INDX" or "KEY" menu selections on the Main Menu, under
the item listing for "PATENTS" or "COPYRIGHTS" or "TRADEMARKS".


STATE UNITARY TAXATION OF WORLDWIDE INCOME

If your firm does business overseas as well as in certain states
(particularly in California), you are undoubtedly already well
aware of the worldwide "unitary" method of taxing your firm's
worldwide profits in those states.  What you may not be aware of,
is that legislation is pending in Congress that would ban such
worldwide "unitary" taxation by the states.  If such legislation
passes, it may reduce state income and franchise taxes on a number
of international companies doing business in the states with such
laws.  If yours is such a company, doing business overseas as
well as in any such state, keep an eye out for news of any such
legislation passing, because it is possible that you may be able
to file for refunds of state taxes paid in prior years, if the
statutes of limitations for those years have not yet expired.
In short, you may need to move quickly if such legislation is
enacted in the Congress, to take full benefit of it.


VIDEO DISPLAY TERMINALS

Until recent years, "white collar" workplaces, or offices, gener-
ally created very little liability exposure for employers, with
regard to hazardous working conditions.  This, too, is beginning
to change.

In recent years, there have been an increasing number of lawsuits
filed by employees in connection with hazards of working long
hours on computers; and in late 1990, the city of San Francisco
adopted an ordinance that provides regulatory safeguards for
workers using video display terminals (VDTs) for four or more
hours per shift.  Apparently, Los Angeles and a number of other
city and state governments around the nation are now considering
similar laws or ordinances, since use of computers in the
workplace is now a universal phenomenon, and because a number of
threats to employees' health have arisen in connection with the
heavy use of computers.

These range from excessive exposure to radiation emitted by VDTs
to "carpal tunnel syndrome," a now common and debilitating nerve
entrapment disorder that can cause severe pain and weakness in
the wrist, as a result of too many hours spent repetitively
plunking away on a computer keyboard.

Laws regulating VDTs are likely to begin popping up all over the
country in the near future, and offices that don't pay attention
to ergonomics, the study of equipment design to reduce workplace
injuries, may well become sitting ducks for lawsuits or fines in
the near future.  While most legal claims by employees regarding
VDT usage have been imposed on workers' compensation insurers
thus far, employers may become directly liable if they partici-
pate actively in the design of computer systems or workstations
that allegedly caused the injury to an employee, or if new state
legislation removes such claims from the workers' compensation
system and places financial responsibility directly upon
employers.

@CODE: CA
Employers in San Francisco should be aware of the San Francisco
ordinance (Ordinance #4-5-90) that was passed in December of 1990,
regulating use of video display terminals (VDT's) in the workplace.
The ordinance contains safeguards designed to see that workers
using VDT's are provided adjustable workstations, routine breaks
and education and training on safe of usage of VDT's.  It applies
to employers located or doing business in San Francisco who have
at least 15 employees 20 weeks a year, and to those employees
expected to use a VDT four hours or more per shift.  A number of
municipalities in California and elswhere are said to be consider-
ing similar legislation.

@CODE:OF