Points of Business Interest - November 2005

November 2005
Points of Business Interest

Just the fax, ma'am

The Federal Communication Commission modified regulations under the Telephone Protection Act of 1991 effective on July 1, 2005, regarding transmitting faxes. Under the new rules, written consent from the receiver is required prior to transmitting faxes unless one of the following applies:

  • The sender and receiver have an established business relationship;
  • The receiver voluntary gives the sender the sender's fax number; or
  • The receiver's fax number is listed in a directory of website for public distribution.

We all have received unsolicited junk faxes, and the FCC is attempting to address that problem. Please make sure that you are not violating these new FCC rules in communicating via facsimile.

You Can't Unring a Bell: the Need to Ensure That Your Corporation Is Not Involuntarily Dissolved

We occasionally have clients who, for whatever reason, fail to file their annual report and pay the required fees and taxes. This results in the involuntary dissolution of the corporation.

For a period of five years thereafter, the corporation can be reinstated. Once the corporation is reinstated, Section 12.45 of the Business Corporation Act provides that the corporate existence is deemed to have continued without interruption, and will have the powers, duties and obligations as if it had not been dissolved, and all acts and proceedings of its officers, directors and shareholders that would have been legal but for the dissolution would be ratified and confirmed.

The problem is that elsewhere in the Act, directors and officers of a corporation are personally liable for carrying on the corporation's business after the corporation is dissolved. The courts have interpreted these provisions to mean that officers and directors can be personally liable, and that liability will not be transformed into a simple corporate liability if the corporation cannot pay the debts. Moreover, several cases have held that the officers and directors are personally liable if they have knowledge that the corporation was dissolved, and another held that the president of a corporation claiming ignorance should have known of the dissolution even if she did not.

The conclusion is simple: make sure that the annual report is timely filed and the taxes and fees are paid. Failure to do so could strip you of the corporate insulation from liability that is a primary reason for incorporating.

Go Forth and Sin No More; the Limits of an Individual's Religious Expression in the Workplace

It is increasingly popular in corporate America to focus on diversity in the workplace. This has taken many forms, including expanded benefits to "domestic partners", among other things. This creates the potential for discord in the workplace.

In a federal case last year, an employer placed posters explaining its workplace diversity policies in its building. These posters included references to sexual orientation. An employee, upset at this messages for religious reasons, put up his own posters in his own work cubicle condemning homosexuality. These posters were visible to other employees who passed the cubicle. The company removed the employee's posters on the basis that they can be offensive to other employees. The employee replaced the posters and refused to remove them; as a result, he was fired. The employee sued on the basis of religious discrimination, but the court dismissed the lawsuit.

On the flip side of the coin, an employer told an employee to attend a church of a different denomination than the employee's and played religious tapes at the worksite. When the employee attended employer's church wearing a short-sleeved dress, she was publicly labeled a "Jezebel" during this service. She successfully sued her employer for religious discrimination.

It is illegal to discriminate on the basis of religion. Freedom of religious expression, however, is not protected when it interferes with other employees' productivity or is reasonably viewed as offensive.