Babcock Business Advisor
March 29, 2004 - Vol. 1 No. 009

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A Hole in the Corporate Veil?

Earlier this month in Alvis v. CIT Group Equipment Financing, Inc., 03-1364 (La. App. 3 Cir. 3/3/04); 2004 La. App. LEXIS 477, the Louisiana Third Circuit held an action against a corporate officer may be maintained when the plaintiffs' petition alleges the corporate officer committed fraud.

In the case, the plaintiffs purchased what they thought to be a new log skidder.  After the purchase, the plaintiffs discovered the log skidder was actually six years old and filed suit against the corporate officer individually. 

The corporate officer filed an exception of no cause of action.  The trial court granted the exception reasoning the law does not impose liability on a corporate officer for his actions in transacting business for the corporation.  The Third Circuit reversed and held in limited circumstances, such as fraud, an action against a corporate officer may be maintained even when his actions were in the course and scope of his employment.  

For more information on this case, please visit this site.

Be Careful What You Ask For...

One of the most common question we get by employers who have a labor intensive workforce is, "Can I ask ________ in an interview?"  Here are some of the most common questions and answers:

May an employer ask questions about an applicant's prior occupational injuries or workers' compensation claims?

This gets a limited "Yes" answer in that such questions may be asked only after the employer has made a conditional offer of employment and only if these questions are asked of all entering employees in the job category.

May an employer require a medical examination of an applicant to obtain information about the existence or nature of prior occupational injuries?

This is another qualified "Yes," since such an examination could be required but only after a conditional offer of employment has been made and only if all entering employees in the same job category are required to undergo a medical examination. Follow-up examinations based exclusively on findings from initial medical information may be required of specific employees.

May an employer obtain information about an applicant's prior occupational injuries or workers' compensation claims from a third party?

At no time may an employer request information about an applicant from a third party (for example, a previous employer) that it could not lawfully get from the applicant.

May an employer refuse to hire a person with a disability simply because of the assumption that the applicant poses some increased risk of occupational injury and subsequently of increased workers' compensation costs?

Unless the employer can show that such an individual poses a direct threat, such a refusal would violate the intent of the ADA to eliminate stereotyping because of disability. A potential health or safety risk is not enough to justify failure to hire here. There must actually be a direct-threat level of risk involved, that is, a significant risk to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation. Even if Louisiana law might permit or require exclusion of such an individual, the ADA supersedes it.

Want more info about Babcock Law Firm? Visit www.babcockfirm.com

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