What is the CAN SPAM Act?

 

 

The CAN SPAM act is an acronym for Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and is a measure to impose penalties and regulate “spam” email messages.  This Act defines federal authority over companies that “spam” and prevents states from forming additional laws and private citizens from seeking redress from spammers.  The intention of the law is to protect consumers and maintain the efficiency of email as a form of communication.

 

 

Why is there federal authority in the CAN-SPAM Act?

 

 

The CAN-SPAM Act is designed to help companies that do want to use commercial emailing service comply with only one set of regulations, rather than regulations that vary from state to state.  The Federal Trade Commission is required to ensure compliance with this act and report to Congress on its effectiveness while recommending changes.  Due to the interstate nature of spam and the occasional difficulty of tracking the locations of senders, enforcement can be difficult.  This is why there are added provisions that require commercial emails to provide verified addresses of the establishment sending the email.

 

 

What must businesses do to comply with CAN-SPAM?

 

 

The Federal Trade Commission offers simple guidelines for compliance for regulation.  

 

 

These include:

 

 

1. Accurate header information so as to identify the establishment that sent the message.

 

 

2. Non-deceptive and accurate subject lines

 

 

3. The email must in one way or another identify itself as an advertisement

 

 

4. Include an address, which can be a physical location or a post office box

 

 

5. Include opt-out information if consumers decide they no longer want to receive emails

 

 

6. Follow proper guidelines for opting out (see below)

 

 

7. Ensure that third parties advertising on your behalf comply with regulations as you can be held liable for their actions.

 

 

What is affirmative consent?

 

 

Affirmative consent, as defined by the law, describes a situation where the recipient has consented to receive the message or agreed with another enterprise to share his or her email address with the other party that has sent the email.  One that has an affirmative relationship with the sender but forwards or sends the email to another may be engaging in a violation if the forwarding party is paid or compensated by the original sender. 

 

 

What are the distinctions made in the CAN-SPAM Act?

 

 

This law, when forcing compliance on businesses, defines a “primary purpose” for the email.  If the email is commercial in nature, then it must comply with regulations.  If the email is transactional or relational in nature, then the business need not comply with set regulations.  If the email is mixed purpose, the transaction and relational content must be the focus of the email, otherwise it will be classified as commercial content.  Transactional emails include commercial transaction confirmation, warranty information, changes to the commercial relationship (such as membership or subscriptions) and good delivery.

 

 

How do consumers opt out of commercial emails?

 

 

Businesses that send commercial emails must have a clearly labeled and defined process for letting consumers opt out of future emails.  The process to opt out must either be instant or cause the consumer to visit only one webpage.  Opt out processes that are more complicated or require the consumer to provide more personal information are expressly forbidden.  This request must be honored within 10 days.  The consumer’s email address is placed on a “suppression list” which prevents emails from that business from being sent there again in the future, as per provisions of the CAN-SPAM Act.  This list may not be distributed or sold to third parties under penalty of law.

 

 

What are provisions to the CAN-SPAM Act that are helpful to spammers?

 

 

The CAN-SPAM Act does not require the e-mailer to obtain permission before sending commercial email.  States cannot set stricter laws on spam email and private citizens are not allowed to bring suit against spammers.

 

 

What are the penalties for violating this Act?

 

 

In addition to laws government deceptive advertising, there are penalties of up to $16,000 for non-compliance with the provisions of the CAN-SPAM Act.  Additionally, there are misdemeanor criminal penalties for using others’ computers to send spam via Trojan viruses and other means, falsifying information to obtain domain name, using open relays to mass email and engaging in dictionary attacks.  Dictionary attacks are the random generation of email addresses from random letters and numbers to reach a potentially valid email address.  Additionally, consumers can take violators to small claims court and collect $1 minimum for each spam message received.

 

 

What are rules governing mobile phone SMS spam?

 

 

A company can be in violation of CAM-SPAM if they send commercial text messages to consumers that do not opt into or affirm that they want the messages.  SMS spam is rare in the United States due to limitations on the number of messages that can be sent at a time and the fact that consumers are usually charged for receiving messages.  Businesses that do violate this rule however, can be subject to class-action litigation, initiated by the government.

 

 

What are rules governing explicit content?

 

 

For emails that contain sexual content, the nature of the content, with the words “SEXUALLY EXPLICIT” must appear in the subject line.  No graphic content must be visual when the email is open, only links to the content or content placed at the bottom of the email, requiring the recipient to scroll down.  This rule does not apply if the recipient has an affirmative relationship with the sender agreeing in advance to receive explicit emails from the sender.

 

 

Has the CAN-SPAM Act been effective?

 

 

This Act, due to a lack of enforcement and compliance is not responsible for the decrease in spam.  Rather, improved filtering technology in email clients prevents a significant amount of spam from reach consumer’s email inboxes.  Reports in PC World indicated that at most, 1% of spam emails complied with CAN-SPAM.  Meanwhile, almost 90% of emails are spam and there is no way to regulate “spam bots” or automatic email senders from outside the United States.

 

 

Several companies that do not comply with commercial email regulations have been taken to court, usually successfully and order to forfeit some or all of the earning from their crime in addition to charges of fraud and in some cases, conspiracy and money laundering.

 

 

Due to widespread non-compliance, creating a national registry of emails that cannot be spammed is unlikely as the addresses cannot be verified, there are millions of email addresses in the United States and there exists a large risk of leaked information aiding rather than hampering spam senders.

 

 

How does this law affect states?

 

 

These regulations prevent states from enforcing their own laws on spam to avoid redundancy and frivolous lawsuits.

 

 

“This chapter supersedes any statute, regulation, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.“

 

 

Source: 

 

https://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business

 

 

 

 

 

 

 

What is the Federal Arbitration Act?

 

 

The Federal Arbitration Act is a United States Federal Statute that provides for judicial facilitation for private dispute resolutions enacted through arbitration. The Federal Arbitration Act applies in both federal and state courts—it is a federal law that is upheld by all states. The statute is applied when a transaction is contemplated by both parties involved in interstate commerce and is predicated on the exercise of the United States Commerce Clause—a law granted to Congress in the United States Constitution.

 

 

Found at 9 U.S.C Section 1, the Federal Arbitration Act was formally enacted in 1925. The law provides for a contractually-based mandatory arbitration; the act results in the award of arbitration entered by a panel or arbitrator as opposed to judgments filed by courts of law.  

 

 

The Federal Arbitration Act requires that in instances where both parties agree to arbitration, they must do so in lieu of filing a court hearing. In an arbitration hearing, both parties formally give up the right to file appeals on substantive grounds in a court setting. Once an arbitration award is entered by a penal or arbitrator, the filing must be confirmed in a coordinating court setting. Once the award is confirmed, it is then reduced to an enforceable judgment, which will be enforced by the winning party, like any other legal judgment. 

 

 

According to the Federal Arbitration Act, awards must be confirmed within one year of the filing. Any objection to the award, in turn, must be challenged by the losing party within three months of the delivery of judgment. Arbitration agreements may be entered in a prospective manner, meaning the agreement is made in advance of any actual dispute. Furthermore, the agreement may be entered by either disputing party once a conflict arises. 

 

 

 

The Gramm–Leach–Bliley Act of 1999, sometimes referred to as the Financial Services Modernization Act, is an act created by the 106th U.S. Congress. The Gramm–Leach–Bliley Act was signed into law Bill Clinton, which repealed sections of the 1933 Glass–Steagall. This opened up the market among security companies, insurance companies, ad banking companies. The former Glass–Steagall Act did not allow any single institution from performing as any sort of combination of an insurance company, commercial bank, or an investment bank.

The Gramm Leach Bliley Act of 1999 allowed securities firms, insurance companies, commercial banks, and investment banks, to consolidate if desired. The Gramm Leach Bliley Act of 1999 was passed to legalize mergers between these organizations on a permanent basis. The Gramm Leach Bliley Act of 1999 also repealed the Glass–Steagall Act’s conflict regarding interest prohibitions against simultaneous service by an employee, director, or an  officer of a securities firm as an employee, director, or an officer of any member bank.

The banking industry had wanted to repeal the 1933 Glass–Steagall Act since around the 1980s. The Congressional Research Service created a report in 1987 that researched the cases for and against keeping the Glass–Steagall act.

Separate versions of the Gramm Leach Bliley Act of 1999 were introduced to the Senate by Phil Gramm, and by Jim Leach in the House. Representative Thomas J. Bliley, Jr., the House Commerce Committee’s Chairman, was the third legislator associated to the Act. The House approved its version of the Act on July 1, 1999 with a bipartisan vote of 343-86, two months after the Senate’s version of the bill had passed with a 54–44 vote which essentially followed party lines.

When both chambers could not decide on a joint version of the Gramm Leach Bliley Act of 1999, the House voted (241-132) on July 30 to tell the House’s negotiators to work to pass a law that ensured that consumers could enjoy financial and medical privacy along with strong competition and non-discriminatory and equal access to the economic opportunities and financial services in their communities.

The bill was then moved to a conference committee between the two chambers to figure out the differences between the House and Senate versions of the bill. Democrats agreed to support it once Republicans agreed to address certain concerns about privacy in the bill and also strengthen provisions regarding the anti-redlining Community Reinvestment Act. The conference committee worked to finish making changes to the bill and on November 4, the final bill, which resolved the differences between the two versions, was passed in the Senate with a 90-8 vote and in the House with a 362-57. The passed bill was then signed into law by President Bill Clinton on November 12, 1999 as the Gramm Leach Bliley Act of 1999.

Many of the largest brokerages, insurance companies, and banks wanted the Gramm–Leach–Bliley Act to pass at the time. The justification for this was that individuals will typically put more money into various investments when the economy is healthy and strong, but if the economy is poor and weak, these potential investors will place the majority of their money into savings accounts. With the Gramm–Leach–Bliley Act, these investors could be able both save and invest without using different financial institutions, allowing the institution to thrive in both bad and good economic times.

Before the Gramm–Leach–Bliley Act, the majority of financial services companies already offered both investment and saving opportunities to their clients. Furthermore, before the Gramm–Leach–Bliley Act passed, there were a variety of relaxations found in the Glass–Steagall Act. An example of this was a few years before, commercial Banks could pursue investment banking, and banks could begin insurance and stock brokerages. Insurance underwriting was the single operation that was not allowed, which was rarely done even after passing the Gramm Leach Bliley Act of 1999. 

A lot of consolidation and merging happened in the financial services industry subsequently, but not to the extent that some had expected. For example, retail banks typically do not buy insurance underwriters, since they look for more profitable businesses such as insurance brokerages where they sell products from other insurance companies. Retail banks did not quickly package insurance and investment products in a way that was convincing and appealing to consumers. 

Brokerage companies also had a hard time finding a way into banking, because these organizations are not known for having large branches and back shop footprints. More recently, banks have started a trend of buying other banks, but they still have less success integrating with other organizations such as insurance or investment companies. Many of these banks have gone beyond their normal scope and tried getting into investment banking, but many have found it difficult to easily package these products with their banking services, without having to resort to concerning tie-ins that can be the cause of scandals.

In order for the Gramm-Leach-Bliley Act to successfully pass, an amendment was made to the bill which stated that mergers could not be cleared to go ahead if any of the involved financial holding institutions, or any affiliates thereof, received a rating that was less than satisfactory at the most recent CRA exam. This mean that any merger could only go on ahead if it had received the strict approval of the necessary regulatory bodies that were in charge for the Community Reinvestment Act. This was a very controversial issue, and Presidential Clinton’s administration stressed that it any legislation that tried to scale back minority-lending requirements would get vetoed.

The Gramm-Leach-Bliley Act did not get rid of restrictions that were placed by the Bank Holding Company Act which stopped financial institutions and banks from owning any non-financial companies. The Act conversely prohibited corporations that were outside of the finance or banking industry from trying to enter commercial or retail banking. 

Some restrictions have been kept in the Gramm Leach Bliley Act of 1999 in order to maintain some level of separation between the commercial and investment banking functions of a company. The majority of the debate surrounding financial privacy is centered specifically on preventing or allowing the insurance, banking, or brokerage divisions of a company from functioning and working together.

When looking at compliance, the main rules under the Gramm-Leach-Bliley Act are the Financial Privacy Rule. This rule governs the disclosure and collection of personal financial information of customers by financial institutions. The rule also applies to corporations, regardless of if they are financial organizations, who obtain such data. A second major rule is the Safeguards Rule, which requires all financial companies to create, apply and uphold protections to defend customer information. The Safeguards Rule does not only apply financial companies that collect data from their own consumers, but also to appraisers, credit reporting agencies, mortgage brokers, and other financial institutions that obtain customer info from other financial companies.

The Financial Privacy Rule involves having financial institutions provide each customer with a privacy notice given at the time the company establishes a customer relationship and annually after that. The privacy notice has to explain what information is collected about the consumer, how that information gets used, who or where it gets shared with, and how the company protects the information.

The notice also must point out the right of the consumer to opt out of the data being given to unaffiliated parties according to the regulations of the Fair Credit Reporting Act. If the privacy policy changes at any time, the consumer has to be notified for acceptance of the changes. Each time a privacy notice is reconstructed, the customer has the right to choose to opt out. Any unaffiliated parties that receive nonpublic data are accountable to the consumer’s acceptance terms under the original agreement. Ultimately, this rule creates a privacy policy agreement between the consumer and the company that protects of the consumer’s nonpublic personal information.

The Safeguards Rule makes financial institutions responsible for developing and writing an information security plan that discusses how the institution is equipped for protecting client’s personal information and how they plan to continue doing so. This plan must designate at least one employee who will manage safeguards, construct risk management on all departments that handle the information, create a program to secure information and have it monitored and tested, and change any safeguards that are needed in order to be up to regulation.

The purpose of the rule is to protecting the institution’s clients. It forces financial companies to closely examine how they deal with a client’s private data and perform risk analysis on these processes. Because of this, all financial institutions must make an effort to some extent in order to correctly follow the Gramm Leach Bliley Act of 1999.

 

 

The below list documents a general outline for each section of the Federal Arbitration Act: 

 

 

• Section 1: Federal Arbitration Act Text regarding Maritime Transactions and Commerce:

 

o The first section of the Federal Arbitration Act defines Maritime Transactions and Commerce and the regulations that go into arbitration for such business relations. The Federal Arbitration Act Text regards maritime transaction that may yield arbitration as any means of charter parties, agreements relating to wharfage, supplies furnished to repair vessels, collisions or bills of lading water

 

 

• Section 2: Federal Arbitration Act Text regarding the validity and enforcement of agreements to arbitrate:

 

o This portion of the Federal Arbitration Act provides a written provision for any maritime transaction or contract involving commerce to settle through arbitration or any conflict that results thereafter. Arbitration is permitted for any breach of contract, including the refusal to perform all or any part of the agreement

 

 

• Section 3: Federal Arbitration Act Text regarding Stay of Proceedings:

 

o States that any suit or proceeding must be brought in a United States court upon any issue referable to a panel or arbitrator under an agreement in writing for such arbitration efforts. 

 

 

• Section 4: Federal Arbitration Act Text states that failure to arbitrate under agreement requires the filing of petition to the specific court the holds jurisdiction for order to compel the arbitration. 

 

 

• Section 5: Federal Arbitration Act Text regarding the appointment of arbitrators:

 

o States that if the agreement names or appoints an arbitrator the course of action to choose the individual must be followed. If no method is provided in the agreement, the court will designate and subsequently appoint an arbitrator to hear the case. 

 

 

• Section 6: Federal Arbitration Act Text Regarding Application heard as a motion

 

o Any application to the court is made and heard in the manner provided by law for hearing motions

 

 

• Section 7: Federal Arbitration Act Text Regarding rules for witnesses, fees and compelling attendance:

 

o The arbitrator may summon (in writing) any individual to attend as a witness if the individual can provide a testimony, book, document or record that is regarded as material evidence in the case. The fees associated for attendance are the same as all United States courts. 

 

 

• Section 8: Federal Arbitration Act Text regarding libel and seizure:

 

o The aggrieved party may begin their proceeding by libel and seizure of a vessel or property of the other party according to the course of admiralty proceedings. The court then has jurisdiction to direct the parties to proceed in arbitration and shall retain jurisdiction to enter its decree.

 

 

• Section 9: Federal Arbitration Act Text regarding awards, confirmation and jurisdiction:

 

o If both parties both agree that a judgment shall be entered upon the award then at any time within one year after the award either party may apply to the court for an order confirming the award. If a court is not specified in the agreement, then the request will be filed with the United States court located in the district where the award was granted.

 

 

• Section 10: Federal Arbitration Text regarding Vacation, rehearing

 

 

• Section 11: Federal Arbitration Text regarding modification for grounds and order

 

 

• Section 12: Federal Arbitration Text regarding the notice of motions to modify or vacate:

 

o The notice of a motion to modify, correct or vacate an award must be served to the losing party (or his attorney) within three months from the judgment or delivery of the award. 

 

 

The last section of the Federal Arbitration Act describes the appeal process.

 

 

Federal Arbitration Act Text:

 

 

9 U.S.C. § 1. "Maritime transactions" and "commerce" defined; exceptions to operation of title

 

 

"Maritime transactions," as herein defined, means charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce wh"''commerce", as herein defined, means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation, but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.

 

 

9 U.S.C. § 2. Validity, irrevocability, and enforcement of agreements to arbitrate

 

 

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

 

 

9 U.S.C. § 3. Stay of proceedings where issue therein referable to arbitration

 

 

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

 

 

9 U.S.C. § 4. Failure to arbitrate under agreement; petition to United States court having jurisdiction for order to compel arbitration; notice and service thereof; hearing and determination

 

 

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. Five days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure. The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or issues to a jury in the manner provided by the Federal Rules of Civil Procedure, or may specially call a jury for that purpose. If the jury find that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury find that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

 

 

9 U.S.C. § 5. Appointment of arbitrators or umpire

 

 

If in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein; and unless otherwise provided in the agreement the arbitration shall be by a single arbitrator.

 

 

9 U.S.C. § 6. Application heard as motion

 

 

Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided.

 

 

9 U.S.C. § 7. Witnesses before arbitrators; fees; compelling attendance

 

 

The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case. The fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts. Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court; if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States.

 

 

9 U.S.C. § 8. Proceedings begun by libel in admiralty and seizure of vessel or property

 

 

If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then, notwithstanding anything herein to the contrary, the party claiming to be aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or other property of the other party according to the usual course of admiralty proceedings, and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction to enter its decree upon the award.

 

 

9 U.S.C. § 9. Award of arbitrators; confirmation; jurisdiction; procedure

 

 

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the court shall have jurisdiction of such party as though he had appeared generally in the proceeding. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court.

 

 

9 U.S.C. § 10. Same; vacation; grounds; rehearing

 

 

• (a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration –

 

o (1) Where the award was procured by corruption, fraud, or undue means.

 

o (2) Where there was evident partiality or corruption in the arbitrators, or either of them.

 

o (3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.

 

o (4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

 

o (5) Where an award is vacated and the time within which the agreement required the award to be made has not expired the court may, in its discretion, direct a rehearing by the arbitrators.

 

 

• (b) The United States district court for the district wherein an award was made that was issued pursuant to section 580 of title 5 may make an order vacating the award upon the application of a person, other than a party to the arbitration, who is adversely affected or aggrieved by the award, if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572 of title 5

 

 

9 U.S.C. § 11. Same; modification or correction; grounds; order

In either of the following cases the United States court in and for the district wherein the award was made may make an order modifying or correcting the award upon the application of any party to the arbitration –

 

 

• (a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.

 

 

• (b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.

 

 

• (c) Where the award is imperfect in matter of form not affecting the merits of the controversy. The order may modify and correct the award, so as to effect the intent thereof and promote justice between the parties.

 

 

9 U.S.C. § 12. Notice of motions to vacate or modify; service; stay of proceedings

Notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court. For the purposes of the motion any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceedings of the adverse party to enforce the award.

 

 

9 U.S.C. § 13. Papers filed with order on motions; judgment; docketing; force and effect; enforcement

The party moving for an order confirming, modifying, or correcting an award shall, at the time such order is filed with the clerk for the entry of judgment thereon, also file the following papers with the clerk:

 

 

• (a) The agreement; the selection or appointment, if any, of an additional arbitrator or umpire; and each written extension of the time, if any, within which to make the award.

 

 

• (b) The award.

 

 

• (c) Each notice, affidavit, or other paper used upon an application to confirm, modify, or correct the award, and a copy of each order of the court upon such an application. 

 

 

The judgment shall be docketed as if it was rendered in an action. 

 

 

The judgment so entered shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered.

 

 

9 U.S.C. § 14. Contracts not affected

 

This title shall not apply to contracts made prior to January 1, 1926.

 

 

9 U.S.C. § 15. Inapplicability of the Act of State doctrine

 

Enforcement of arbitral agreements, confirmation of arbitral awards, and execution upon judgments based on orders confirming such awards shall not be refused on the basis of the Act of State doctrine

 

 

9 U.S.C. § 16. Appeals

 

 

• (a) An appeal may be taken from –

 

o (1) an order –

 

 (A) refusing a stay of any action under section 3 of this title,

 

 (B) denying a petition under section 4 of this title to order arbitration to proceed,

 

 (C) denying an application under section 206 of this title to compel arbitration,

 

 (D) confirming or denying confirmation of an award or partial award, or

 

 (E) modifying, correcting, or vacating an award;

 

o (2) an interlocutory order granting, continuing, or modifying an injunction against an arbitration that is subject to this title; or

 

o (3) a final decision with respect to an arbitration that is 

 

 

subject to this title.

 

 

• (b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order –

 

o (1) granting a stay of any action under section 3 of this title;

 

o (2) directing arbitration to proceed under section 4 of this title;

 

o (3) compelling arbitration under section 206f this title; or

 

o (4) refusing to enjoin an arbitration that is subject to this title

 

 

 

 

 

ECONOMIC OPPORTUNITY ACT TEXT

 

 

What is Economic Opportunity Act of 1964?

 

 

Enacted by President Lyndon B. Johnson in August of 1964, the Economic Opportunity Act was a fundamental law of Johnson’s War on Poverty. Implemented by the Office of Economic Opportunity, the legislation included a variety of social programs to promote education, general welfare and health for the impoverished in America. Although the majority of the provisions of the Economic Opportunity Act of 1964 have since been rolled back, weakened or modified, its core programs (Job Corps and Head Start) remain intact. 

 

 

The philosophy behind the Economic Opportunity Act did not focus on wealth distribution, but instead, the belief that government must provide impoverished people with opportunities to earn a respectable wage and maintain their families in a comfortable setting. President Johnson identified the constitutional basis for the Economic Opportunity Act of 1964 by stating Congress’ responsibility to provide for the general welfare of American citizens. 

 

 

Why was the Economic Opportunity Act Created?

 

 

The 1960s represented a period of great reform. During this time, poverty was rising due to the widening of the wealth gap and an assortment of other economic factors. The President’s Council of Economic Adviser’, in 1964, issued a report that focused solely on the problem of poverty in the United States. This report included statistics that revealed–in the greatest time of prosperity in the nation—that nearly 20% of American families were poor (incomes under $3,000 for a family of four). The report also revealed that over 50% of non-whites were living in poverty. 

 

 

In January of 1964, President Johnson and his cabinet developed a bill to curb increasing poverty in the United States. The provisions and the newly-found programs (explained below) of the Economic Opportunity Act were funded by Congress on the final day of the 1964 Congressional session–$800 million was delivered to the programs for the fiscal year of 1965. 

 

 

Foundation of the Economic Opportunity Act:

 

 

The Economic Opportunity Act employed two mechanisms to provide welfare to the impoverished. First, the Economic opportunity Act of 1964, established eleven federal programs that were run by the Office of Economic Opportunity—the programs are listed below:

 

 

• Job Corps: The creation of the Economic Opportunity Act of 1964 gave way to the establishment of Job Corps, which provides basic education, work and training resources in residential centers for young students, between the ages of sixteen and twenty-one

 

 

• Neighborhood Youth Corps: The creation of the Economic Opportunity Act of 1964 established the Neighborhood Youth Corps, which provides training and employment opportunities for young men and women, between 16 and 21 years of age, who come from impoverished families and communities. 

 

 

• Work Study Programs: Central programs created by the Economic Opportunity Act, these programs provide grants to institutions of higher education (colleges and universities) for part-time employment of young students from low-income families. Candidates for these work study programs need the employment to earn money for their pursuit of education.

 

 

• Adult Basic Education: Provides grants to educational agencies (on the local level) for programs of instruction for individuals over the age of 18. Individuals who utilize this program of the Economic Opportunity Act struggle with the English language (candidates possess marginal reading and writing capabilities which serve as an impediment to employment).

 

 

• Urban and Rural Community Action: Provides technical and financial assistance to public and private nonprofit groups for the development of community action programs that yield a maximum feasible participation of the impoverished. These groups are created to give promise of progress towards the mass elimination of poverty in the United States.

 

 

• Voluntary Assistance for Needy Children: The creation of the Economic Opportunity Act of 1964 gave way to the establishment of the Voluntary Assistance for Needy Children campaign, which established a coordination and information center to encourage voluntary assistance for needy youths. 

 

 

• Financial Assistance to Rural Families: Another fundamental aspect of the Economic Opportunity Act of 1964; the Loans to Rural Families program provides financing of micro-loans (under $2,500) to low income rural families for the sole purpose of increasing their disposable income

 

 

• Work Experience: The creation of the Economic Opportunity Act of 1964 established the Work Experience program, which provides financing for pilot, demonstration and experimental projects for the purpose of expanding opportunities for work experience and necessary training of individuals who are unable to support their families. 

 

 

• Assistance for Migrant Agricultural Employees: provides assistance to state and local governments, as well as nonprofit agencies or individuals aligned with operating programs that assist migratory workers and their families with securing housing, education and resources to support their children. This program also provides sanitation help for those in need.

 

 

• Employment and Investment Incentives: Another critical aspect of the Economic Opportunity Act of 1964, this program provides loans (under $25,000) to single borrowers to create small businesses and innovate the market

 

 

• Volunteers in Service to America (VISTA Program): This program of the Economic Opportunity Act of 1964 recruits, selects, refers and trains volunteers to all local and state agencies, as well as nonprofit organizations, throughout the United States. The volunteers supplied by the VISTA program are required to perform duties to combat poverty in the United States.

 

 

In addition to creating and implementing the above programs, the Economic Opportunity Act of 1964 empowered the Director of the Office of Economic Opportunity to coordinate anti-poverty efforts of all government agencies. This provision of the Act was deemed necessary by Johnson, who was tired of the government’s inability to mitigate the social costs that arise due to poverty. 

 

 

This provision (the second mechanism of the Act) of the Economic Opportunity Act of 1964 directed government agencies to establish an Economic Opportunity Council–which was chaired by the director of the OEO and composed of various members of Johnson’s cabinet—to consult with various officials in effectively carrying out the above programs and functions. 

 

 

 The Economic Opportunity Act’s Impact:

 

 

From the onset of its passing, Republicans (and many Southern Democrats) attempted to dismantle the Economic Opportunity Act of 1964 and transfer the operating programs to various government departments and agencies. Congress eventually repealed the Act in 1981; however, a number of the programs established by the act have survived to present day. The majority of historians and political enthusiasts who debate the reasons for the OEO’s failure point to circuitous government actions—the flow of funds needed to support the programs were not properly handled. Additionally, the core vision of the Economic Opportunity Act was to rid all Americans of poverty. This goal, which is incredible ambitious in general, was not met with calculated means. There was no provision for the employment of adult men, there was no coordination between programs and lastly, commitment to the objective often took a backseat to international conflicts or other macro-economic incidences. 

 

 

 

The economy consists of the system of an area or country regarding its capital, labor, land resources, manufacturing, distribution, trade, and the consumption of services and goods in that specific area. The economy can also be thought of as the network of services and goods are exchanged in accordance to supply and demand between participants by either barter or a form of exchange with a given credit or debit amount defined within the network. All occupations, economic agents, professions, and economic activities, contribute in some way to the economy. Saving, investing, and consumption are the main variable components of the economy and are used to determine market equilibrium.

A specific economy is the result of its development that includes social and historical organization, its geography, ecology, and natural resource endowment, as well as its technological evolution. These points create the content, context, and set up the parameters and conditions in which an economy functions.

Because of the growing importance and influence of the financial sector in more modern times, the economy is often looked at by politicians and analysts to as the portion of the economy that deals with the production of goods and services as well as the portion of the economy that looks at selling and buying on the financial markets. Both of these can be measured in many different ways. Some of the helpful indicative values used when looking at the economy include:

• Balance of Trade

• Consumer spending

• Exchange Rate

• GDP

• GDP per capita

• GNP

• Gross domestic product

• Interest Rate

• National Debt

• Rate of Inflation

• Stock Market

• Unemployment

A Small Business for Sale is defined as a commercial endeavor whose purchase is made available to the public. When businesses are offered for sale, the owner is looking to legally transfer ownership to the purchasing party. 

Typically, the purchase of a small business for sale will take the form of one of the following:

• Stock Purchase: The buyer purchases a portion or all of the seller’s stocks. A seller of a small business will prefer this method because the buyer assumes his or her debts and liabilities.

• Asset Purchase: The buyer purchases a portion or all of the seller’s assets. A stock purchase is favored by buyers because they secure the assets attached to businesses for sale—including all of its inventory and equipment—without assuming the seller’s debts and liabilities.

• Merger: Occurs when two combines agglomerate to form a single, new entity. This method is liked—depending on the circumstances—by both the buyer and seller because a merger entails a tax-free exchange of stock in the new company for stock of the previous entity. 

Regardless of the purchase, the transaction will be structured with the following steps:

• Businesses for sale will require a pre-negotiation meeting between the buyer and seller

• A small business for sale will require preliminary negotiations before an affirmed figure can be reached

• The buyers and sellers must draft a formal contract that establishes the agreement to purchase and a pre-closing review

• Closing

During the pre-negotiation process, the buyer and seller of the small business will review fundamental aspects before an agreement can be reached. During this phase, the seller will establish the minimum price he or she is willing to accept for the business and the buyer will establish the maximum price he or she is willing to pay. 

The pre-negotiation process for businesses for sale will also include an evaluation of how the value of the business was calculated. After this is confirmed, the two sides will inspect the seller’s financial condition, including a review of the entity’s balance sheets, profit and loss statements and income/expense balances. 

During the initial phase, the parties will be required to discuss and agree on several matters, including:

• Necessary documents that were not examined during the pre-negotiation phase, such as federal and state income tax returns, property/equipment leases and employment contracts. 

• Is the approval of the board or shareholders necessary to finalize the sale?

• Is government approval required? Is a certificate of good standing (indicates that a business for sale was properly formed and authorized to conduct business) necessary?

• Will any employees be retained by the owner of the small business for sale? If so, the buyer will have to draft new employment contracts; if not, the seller will have to provide compensation to those employees.

• Are there any contracts which require third-party approval before the purchaser can assume control over them?

After this review, a letter of intent is typically constructed. This document will show that the buyer and seller are serious about the engagement. The letter of intent affirms the agreement; however, they are typically instituted as non-binding contracts. That being said, portions of the LOI may be enforceable; a letter of intent should contain the following information:

• The length of time the buyer and seller are willing to keep the deal open

• A guarantee by the purchaser not to disclose confidential information ( such as trade secrets and customer lists) to third parties or the public—this is known as a confidentiality agreement

• A guarantee by the seller not to negotiate with other prospective buyers for a certain period of time.

When the two parties assent to the above stipulations and issues, the formal agreement and pre-closing period can commence.

A final agreement is the culmination of the aforementioned negotiation periods. The agreement must contain all the details of the transaction: the sales price, when ownership will be transferred, etc. Typically the agreement will be produced in several drafts—it is not legally affirmed until it is signed by both parties. 

During the pre-closing period, the following details must be discussed and reviewed:

• Both parties must count and inspect all inventory associated with respect to businesses for sale

• Both parties must inspect all leases, contracts and loans—these must be assigned to the buyer of the small business for sale

• A bill of sale for assets must be constructed if the goods are being sold

• The parties should arrange for escrow—a third party will hold the funds used for purchase until all conditions of the sale have been met

The closing period denotes the completion of the deal. During this time, both parties should review the following:

• Make sure all documents are signed and notarized where required

• For the buyer: disburse the proceeds by paying the underlying creditors, government (for unpaid sales taxes), the escrow agent (if applicable) and the remaining balance to the seller. 

• Record all documents (deeds, titles and certificates) for record keeping.

A Small Business for Sale may exist in a variety of classifications with regard to the status of the business subsequent to the sale; while one Small Business for Sale may be sold in the form of an idea or a business plan, another Small Business for Sale may be in an operational state immediately after purchase:

 ‘Startup’ Small Businesses for Sale are considered to be a commercial endeavor available for purchase, whose availability occurs during the earliest stages of business development; this can range from mere business plans outlining a business structure to commercial activities within their premature organization

‘Turnkey’ Small Businesses for Sale are defined as a commercial endeavor available for purchase in a state of operation, which typically will not require startup costs or developmental administration; the term ‘Turnkey’ spawns from the notion that the purchaser of this Small Business for Sale will have the ability to initiate the operation of the business immediately after purchase:

The Fair Work Act of 2009, which is comprised of regulations set forth by the United States Department of Labor (DOL), states that a Small Business for Sale is classified as a business – or commercial activity – available for purchase within which the following classifications apply:

A Small Business for Sale will typically be privately owned

A Small Business for Sale will typically have an employee base not exceeding 15 individuals

A Small Business for Sale will typically render and incur a profit margin and earnings reports that are substantially smaller than those belonging to middle and larger sized businesses

Subsequent to purchase, a Small Business for sale is subject to applicable taxation requirements, which include employees, provide benefits, and liabilities undertaken by the Small Business:

IRS Form 8829: This form is used in order to claim any expenses that are incurred as a result of operating a self-employed Small Business for Sale subsequent to its purchase; typically, this form is specific to online-based Small Business conducted from one’s home or residence

IRS Form 1040: This form is a standard form used for filing taxes applicable to a Small Business for Sale subsequent to purchase; line 30 on this particular form entitled ‘Schedule C’ allows the owner of an small business purchased in order to substantiate profits or losses as a result of operating an online-based small business within the realm of self-employment

Schedule C – EZ: Subsequent to purchase, a Small Business for sale employed to operate from a residential base of operation – reporting business expenses not exceeding $50,000 – will be required to satisfy this tax form

Human resources is a broad term used to describe the individuals who comprise the workforce of a business entity—this definition is also attached to the term “human capital”. More specifically, human resources (commonly simplified to HR) is the name of the function within a business entity charged with the responsibility for implementing policies and strategies relating to the management of individuals (the human resources). 

A business entity’s HR management model attempts to maximize return on investment regarding the organization’s human capital. The HR management strategy, while attempting to streamline the function of individual employees, also attempts to minimize financial risk. 

A human resources manager will seek to achieve these goals by aligning the supply of qualified and skilled individuals and the capabilities of the entity’s current workforce, with the organization’s future business plans and requirements to achieve an efficient return on investment. 

To ensure these objectives are achieved, the human resources department will implement an organization’s human resources requirements, taking into account all laws (federal, state and local labor) and regulations which regulate the entity. 

A human resources department may develop policies, systems and standards that implement the department’s basic strategy in a variety of arenas. The following roles are typical for a human resources department in a wide range of industries and business models:

• An HR department will maintain awareness concerning compliance with local, state and federal labor laws.

• An HR department will recruit, interview, select and board resources—including the processing of new employees

• The human resources department is responsible for all employee record-keeping and confidentiality functions

• The human resources department will help with the organizational design and development of the business entity

• The human resources department will oversee performance, conduct and behavior of the entity’s employees

• The HR department will process new employee applications, payroll and employee benefits

• The HR department will institute and oversee training and development of new/current employees—this process is referred to as “learning management”

• The HR department will bolster employee motivation and the morale of the workforce—these functions aim to augment employee loyalty and retention

The implementation of the above policies may directly managed by a company’s HR department, or the functions may be indirectly supervised by managers or third party organizations. 

A human resources department is a fundamental component of employee well-being in any organization, no matter the industry or the size of the entity. Responsibilities of the HR department include all of the above and issues concerning hiring, firing and complying with state and federal tax laws. Furthermore, a company’s HR department is integral part of the organization’s risk assessment department. Aside from complying with local, state and federal labor laws, the human resources department will engage in safety inspection, dispute resolution and the filing of workers’ compensation—all rules and regulations that govern a particular business organization will be affirmed through the delivery of an employee handbook, which of course, is constructed by an HR department. 

Self employment refers to working for one’s self; a self-employed person works for him or herself instead of an employer. A self-employed individual’s income is attained through trade or business that the person operates personally. The business of a self-employed person is personalized; the business is the individual’s primary source of income.

The terms “self-employment” and “business owner”, although universally linked, are by no means identical in meaning. A business owner is not required to be active or hands-on with the daily operations of his or her company, whereas a self-employed individual must utilize an aggressive and hands-on approach to secure income. 

The United States Government views self-employment as a form of rudimentary entrepreneurship. Because a self-employed person is extremely active in the day-to-day operations of the business, most entity’s run and operated by a self-employed person are extremely small and niche-based. 

In the United States, an individual is considered self-employed (for tax purposes) if that person is actively operating a business as an independent contractor, a sole proprietorship, as a member of a limited liability company (only if it does not elect itself to be treated as a corporation) or as a member partnership. In addition to its tax classification, a self-employed individual must pay Medicare and Social Security taxes, as a result of the Self-Employment Contributions Act. 

In the United States, the self-employment tax is typically set at a flat-rate equivalent to the combined contributions of the employer and his or her employee under the FICA model. The self-employment tax is currently set at 15.30% (The 2010 Tax Relief Act reduced this figure to 13.3%, but the rate will increase back to 15.3% at the start of 2012); this rate consists of two parts: 12.4% is based on the self-employed individual’s social security responsibility and 2.9% is applied to the Medicare tax.

The social security aspect of the self-employment tax, in a hypothetical fashion, can be deducted by 50% against the individual’s self-employment income. Because of this deduction, only 92.35% of self-employment income is taxed at the 15.3% rate, deriving an effective tax rate of approximately 14.1%. However, this tax deduction will be terminated if the individual’s self-employment income exceeds $105,577 (this figure may change year-to-year, since the whole applicable amount of approximately $97, 5000 will be taxable at the 15.30%. 

A self-employed individual will typically declare more deductions than an ordinary worker. Equipment, travel, uniforms, car use, cell-phone use etc., can be deduced as self-employment business expenses. Self-employed persons are required to report their business income (or losses) on IRS Form 1040 within Schedule C. Self-employment taxes are calculated on Schedule SE of IRS Form 1040. Self-employment estimated taxes must be fulfilled quarterly through the use of IRS Form 1040-ES if the individual’s estimated tax liability exceeds $1,000.

A self-employed individual is not permitted to contribute to a tradition business-run 401K plan. That being said, self-employment enables an individual to save for retirement in a variety of forms, including the Simplified Employee Pension Plan IRA (25% of their income can be contributed or approximately $50,000 per year) or the Self-Employed 401k or SE 401k. 

A short term loan is a form of financing that is attached with a quick repayment schedule—short-term loans may have a maturation period as short as 90 days. The fulfillment of the loan is dependent on the amount of financing; however, all short-term loans possess maturity dates that are significantly shorter than regular loans. 

The repayment schedule associated with the financing is the distinctive characteristic of short-term loans. Unlike regular loans, which commonly have repayment schedules of 30 years, a short-term loan must be repaid in a much shorter timespan (between 90 days and fifteen years) or immediately after the borrower achieves satisfies his initiative for securing the short-term loan. For example, when a business secures a loan to keep afloat while awaiting customer pay for a service, a lender would expect repayment as soon as the company receives pay from their clients or customers. In contrast, a short-term business loan delivered to a company for inventory shortfalls would be repaid as soon as the inventory is sold off. 

Short-term loans are provided to businesses or individuals in need of quick financing—the funds are utilized to satisfy a payment, off-set a loss or to relieve a cash deficit problem. As a result, all initiatives tied to this loan schedule are used to alleviate shortcomings in the short-run; short-term loans are not used for long-term financing needs.  

The primary benefit of these loans is that they are immediately delivered, enabling the borrower to operate with increased liquidity. Moreover, because of their brief repayment schedules, short-term loans do not require serious commitment—the borrower is not indebted to the lender for a significant period of time.

Fast business loans are appropriate for both existing and new businesses. In regards to new businesses, banks or lending institutions will grant short-term business loans over regular loans because they are less risk—short-term loans provide less money at higher interest rates. Before short-term loans are granted, a lender will review the company’s cash-flow history and payment track record. Typically, short-term business loans are unsecured; they do not contain collateral and the bank relies solely on the borrower’s credit history and credit score.

The primary negative aspect associated with short-term loans is that this method of financing is more susceptible to default. This increased vulnerability results because of the loan’s conditions: short term loans have higher interest rates, shorter repayment dates and higher penalties if a default is realized. 

Short-term business loans are dependent on your credit history and the repay capability of your business—these variables will affect the conditions (interest rate, repayment date and associated fees) attached to your short-term loan. 

Short-term business loans can stretch as far as 15 years; however, lenders are likely to giver shorter term loans to new or unproven businesses. Short-term loans are typically used to pay off the business’s emergency financial obligations.