• Absorbent Boom - length of must be at least enough to completely surround the largest vessel in your facility;
• Absorbent Pads - most suppliers ship in quantities of a hundred and refer to them as a bale. One bale is considered to be a standard amount for stocking and re-stocking a spill kit;
• Absorbent Granules - absorbent materials in granulated form are readily available in the form of kitty litter. However, commercial materials are easily obtained and are more effective. Usually one bag (20-25 lbs) is normally sufficient.
• Rubber Gloves - disposable rubber gloves are sufficient for deploying and adjusting absorbent materials. However, durable rubber gloves that are solvent resistant are preferred, particularly in the removal and proper disposal of used materials;
• Plastic Bags - Heavy duty industrial-strength, minimum of 44 gallon in size. Package of 25-30 is a minimum to facilitate double-bagging when necessary.

• Date of training;
• Specific subject (i.e., Spill Respond, Emergency Response, etc.);
• Legible, signed entry of all attending the training session;
• Length of the training session, including any drills, audio-video presentations;
• Name & title of person presenting the materials and conducting the training, with a signature;
• Attachments: All handouts, copies of materials utilized to formulate the training syllabus.

• Initial training session, which will the most critical to garnering credibility and making a mission statement;
• Timely review and update of procedure, most desirably on a scheduled basis, and;
• Insuring that all newly hired and additional personnel that may be involved in your Response Plan receive introductory training, which will include documentation of such training via memorandum or log entry.

CALIFORNIA LEGISLATURE TO TACKLE "VESSEL OPERATOR CERTIFICATION"
by Bill Krauss, The Apex Group
Even though the deadline for bill introduction is a few weeks off, if the early indications are correct, it will be a very busy year for the Legislature. To begin with, the Governor and the leadership of both houses have proposals to dramatically expand healthcare coverage in California. It is very likely this single issue will dominate the Legislative Session. The Governor has stated that he wants all Californians to have healthcare coverage. To get there he proposes to pay for it in some very controversial ways. Among the options is an "assessment" on doctors and hospitals and a payroll "assessment" on businesses. He is not calling them "taxes" as that would require a 2/3 vote of the Legislature. Preventing the cost from becoming "taxes" is critical for the Administration as a "tax" would give the Republicans leverage in the debate, who are historically opposed to tax increases and larger government. It is estimated his proposal will cost $12-14 billion. And if history is any indication, when government makes a cost predication, one can safely double that number.

Specific to the boating industry, it is fair to say that each year we are faced with a myriad of bills, along with the usual budget issues relating to the Department of Boating and Waterways. While each year there are bills that are significant to some segment of the industry, bills that can affect the entire boating community are less common. As examples, it was about 9 years ago a bill was introduced that would have made two-stroke engines illegal (it was defeated). Just a couple years later there was another bill that would have allowed local jurisdictions to ban personal watercrafts; it too did not become law. It took until last year to see another such far-reaching bill when the vessel registration fee was increased.

We are again facing a bill that is of statewide significance. Since late last year, we have been working with the rest of the boating interests on a proposal that will require boaters to get "certified" to operate a vessel. This issue has been considered a couple times in recent years, but for various reasons each time the bill was not successful. This time the entire industry is working together to craft a proposal that is acceptable to everyone.

To date there have been several meetings and we are very close to a consensus. Our goal is to craft a bill that the entire boating community can support. Because each interest group has a slightly different perspective on how such a program should work, it has taken commitment from all sides to find common ground. I am glad to report that everyone involved has been working very hard toward that end.

While the final details have yet to be worked out, there are several elements that have been agreed to that will not likely change. The first and most important element is that this is NOT a license, but a certificate that indicates the requirement has been met. Another key element is that the certificate is good for life. We have also agreed that it should be phased in over time and that Coast-Guard licensed operators are exempt. There are many other elements that are part of the program, but because discussions are underway it might be misleading if we gave too many details. Suffice it to say that we are attempting to create an easy, streamlined process that will improve knowledge of boating and hopefully bring more individuals into boating as a result.

CLIENT ALERT
by Larry Levy, Employment Relations Management Consultant
I recently visited with the newly appointed State Labor Commissioner who oversees the interpretation and enforcement of all California's wage and hour laws. The meeting was attended by both defense and plaintiff employment attorneys where the focus was the employer's obligation to enforce the meal and rest periods for the non-exempt employee. The Labor Commissioner stated that in the future his offices will rigorously enforce the employer's obligation to PROVIDE and ENFORCE the meal period obligations. Coincidental to this meeting, I reviewed a case filed by several unionized UPS drivers whose argument was that it was the employer's responsibility to rigorously enforce the meal period breaks (not just provide them). Suggesting to employees that they take the meal period was not considered sufficient. Guess what? The drivers won. As a result I want to go over the basics so that there is no confusion or misunderstanding what you have to do.

These laws apply only to your non-exempt workers whose compensation is driven by their hours of work. It is a misnomer to call them hourly since you may have non-exempt workers who are paid a salary. Typically, non-exempt workers represent 90% of your work force. They are the carpenters, plumbers, electricians, dental assistants, inside sales personnel, dock workers, mechanics, clerks, receptionists, bookkeepers, service technicians and accountants that you employee. These laws do not apply to your exempt workers represented by managers, supervisors, estimators, controllers, engineers, and associate doctors.

The meal period laws state that a non-exempt employee is entitled to a minimum of a thirty minute meal break for every five hours of work. It is left up to you as to whether the meal period is paid or unpaid and typically, it is unpaid. The meal period may be waived upon mutual consent if the employee works only six hours or less each workday. Incidentally, the meal period may be longer than thirty minutes.

Meal breaks may be un-paid only if:

• They are at least thirty minutes long;
• The employee is relieved of all duty; and
• The employee is free to leave the premises

• The actual time the employee started work;
• The time the meal break started;
• The time the meal break ended; and
• The time the employee stopped work for the day

• Is permitted only when the nature of the work prevents an employee from being relieved of all duty;
• Must be agreed to in writing and signed by both the employee and employer;
• Must be paid; and
• May be revoked at any time in writing by the employee.

LEGAL CORNER
by Mark Holmes, McKasson, Klein & Holmes LLP
Dagnone - An Analysis Of "Best Practices" That Marina, Yard And Storage Facilities Should Use In Dealing With Their Customers

I hope everybody had a great 2006, and an even better 2007. In years past, I have commented on recent cases and developments in this column. In 2007, want to use newly decided cases to talk not only about the legal framework applicable to marine owners and operators, I also want to talk a bit more about "best practices" owners and operators can employ to: (1) stay out of lawsuits as much as possible; and (2) keep the time and expense of any litigations they become involved in to a minimum.

With this in mind, let's examine the recent case of Insurance Company of New Hampshire v. Dagnone, a case about marina that followed a good practice of refusing to provide service to a vessel until its owner signed a contract - but let the owner keep his vessel on the premises until he finally did - and then a huge winter storm hit.

The Background Facts That Led To The Lawsuit
In early November 2003, a yacht owner, Dagnone, telephoned Hinckley Yacht Services ("Hinckley") to make arrangements to have his yacht delivered to the Hinckley marina in Portsmouth, Rhode Island, and then to be hauled out for dry storage for the winter season of 2003-2004. As is common in the marine industry, Hinckley required a signed contract and partial payment before it would haul out Dagnone's boat.

James Kerr, Hinckley's operations manager started a file on Dagnone on the date of their first conversation sometime in October or November 2003, and told Dagnone he would need to sign a contract before the boat could be hauled out. According to Kerr, Dagnone stated that his "partner" would be bringing the boat up and that his "partner" would sign the contract.

Dagnone did not deliver his yacht to Hinckley until Saturday, November 22, 2003. Kerr estimated this was about two weeks after his initial conversation with Dagnone. Ted Beaumont, a local captain hired by Dagnone, moved the boat to Hinckley so Hinckley could winterize it.

Beaumont left the boat on Hinckley's work dock, and, at the direction of Hinckley employees, left the keys in it. He did not sign any contract when he left the boat at the work dock.

On November 22, 2003, Hinckley faxed a copy of the contract to Dagnone. Between November 22, 2003 and December 6, 2003 - or a period of about two weeks -- Beaumont returned to Hinckley on three occasions to see whether the yacht had been out-hauled so that he could complete the winterization of the vessel. On each occasion, he saw that the boat remained where he had left it on Hinckley's work dock. On his third trip to the Hinckley facility, Beaumont asked why the yacht had not yet been hauled out. He was informed by Kerr that the boat had not been hauled out because there was no signed contract.

Finally, on December 3, 2003, Dagnone faxed a signed copy of the contract and a copy of a check for partial payment to Hinckley. Also on December 3, Kerr told Dagnone that the boat would be hauled out by December 10 if the contract was signed and payment was made. Dagnone's yacht was placed in the queue of boats to be hauled out after Dagnone's conversation with Kerr on December 3. Hinckley did not receive the signed contract and Dagnone's check until December 10, 2003.

As early as December 4, the National Weather Service forecast for the Narragansett Bay area predicted a storm with sustained winds of 25-35 knots for December 6 and 7. On Friday, December 5, the forecast also predicted gusts up to 45 knots on the night of December 6 into the morning of December 7.

On December 5, 2003, Hinckley personnel moved Dagnone's yacht from the work dock where Beaumont had left it to slip # A-10, a dock area that was more protected than the work dock. Kerr testified that the boat was moved in order "to protect it, put it in a safer location." The yacht was secured with Dagnone's lines, which all parties agreed were in good condition before the storm.

On Saturday, December 6, and Sunday, December 7, a "Nor'easter" hit the Narragansett Bay area and the Hinckley facility. Despite Hinckley's efforts to secure the boats in the marina, the storm damaged 15 boats moored at the docks in the marina. The yard itself sustained damage in the form of broken joints in the docks, bent cleats, a broken cleat, and damaged piling rollers. Dagnone's boat was among the boats damaged in the storm. According to Kerr, all of Dagnone's dock lines broke and a cleat was bent and partially tom out of the dock, causing Dagnone's boat to drift to B-dock where it hit two other boats. The damage Dagnone's boat sustained was assessed by Hinckley at $38,327.

Naturally, Dagnone sued Hinckley to recover for the damage to his yacht. One of the issues at trial in the lawsuit was whether Hinckley was negligent in failing to adequately safeguard the yacht while it was in Hinckley's. Luckily, after a full, expensive and (almost certainly) nerve-racking trial, Hinckley was exonerated.

Lessons To Be Learned From Dagnone
What emerges from Dagnone is an important "best practice" that marinas and boat yards should employ in dealing with their customers - getting their customers to sign their agreements before providing services or mooring space. Dagnone demonstrates, however, that allowing the customer to leave a vessel on the premises for any length of time before the customer complies with the marina's or yard's contractual and financial requirements can be fraught with peril, and possible liability.

The Best Of Practices
A marina or yard insisting that its customers sign a contract and pay deposits before providing services is clearly a good practice.

The justifications for such a practice are obvious. When the customer signs a well-drafted contract, the marina or boat yard's liability exposure can be drastically reduced, if not eliminated completely, through exculpatory clauses - waivers; releases or limitations of liability; agreements to indemnify; and insurance clauses.

By contrast, well-drafted contracts can also reduce the marina or boat yard's financial exposure for unpaid bills if they contain clauses requiring security deposits and allowing for recovery of interest and attorney's fees and costs. Arbitration clauses can also reduce the costs of litigation.

Consequently, requiring that customers sign a marina's and boat yard's contracts before providing services is a practice all marinas and boat yards should adopt.

The Not-So Best Practice - Letting The Vessel Stay On The Premises While Waiting For The Customer To Comply With The Marina's Or Yard's Pre-Service Requirements

The practice that got Hinckley in trouble in Dagnone was allowing the vessel to be "dropped off" at the premises while the marina waited for the vessel owner to sign the contract and provide the required deposit. This is a risky practice for two reasons:

First, just as in Dagnone, the vessel often sits for days, if not weeks, in the marina or at the yard, taking up a work slip or a space in the yard - for free. Because the owner has not yet signed an agreement that allows the marina to charge slip rent or "lay days," it can be difficult for the marina or yard operator to recover for these "delay days." Consequently, marinas and yards end up providing free mooring or storage space simply because the customer fails to comply with the necessary requirements.

Second, just a in Dagnone, a vessel present in the marina or yard for any length of time before the customer signs the requisite well-drafted contract is a huge liability risk. Before the marina or yard obtains a signed contract, the marina faces potential liability for any and all damage to the vessel, or its complete loss in the event it sinks or burns, without the benefit of any exculpatory clauses, and without even knowing whether the vessel is even insured!

Consequently, while it is a good practice to have customers sign agreements and pay deposits before service is provided, it is also a good practice to ensure that the customer does these things before the owner can leave the vessel in the marina or yard.

In short, all marinas and yards should ensure that no vessel owner is allowed to leave a vessel on the premises, regardless whether the customer or some agent of the customer brings it there, without signing the required contracts and paying the requisite deposits.

If a vessel owner shows up with the vessel and wants to leave it, the marina and yard personnel should be trained to ensure that the owner is immediately escorted to the office to sign the requisite contracts and pay the required deposits. Should the owner refuse to do so - or say he or she will take care of it later -- marina or yard personnel should be trained to refuse to allow the owner to leave the vessel on the premises.

In the event the vessel owner hires a captain or some other person to deliver the vessel, and the captain or third party insists he or she is unable to enter into any agreements on behalf of the owner, or is unable or disinclined to pay the requisite deposits, the marina and yard personnel should be told that the vessel cannot be left on the premises, at least not until the contract is signed and/or the deposit paid.

In situations involving "captains" or other third person attempting to drop off the vessel, these persons will frequently appear in the marina or yard office and attempt to "negotiate" the "drop off" of the vessel based on the promise - that either the person or the absent vessel owner (by telephone) will make that the contract will be signed and the deposit provided. Again, marinas and yards should stand their ground and insist that these requirements be met before the vessel can be "dropped off."

Insisting that the vessel leave the marina or yard until the owner complies with contractual and financial requirements may seem a bit harsh to some. In truth, it is not. It is simply a firm but responsible way of dealing with customers who either fail or intentionally refuse to honor otherwise reasonable requirements.

Importantly, as most operators know from experience, the number of vessel owners who attempt to "drop off" without complying with the marina or yard requirements actually comprises a very small percentage of customers.

It is, however, this small percentage of "drop off artists" who clutter up the work slips and the yard with their vessels - at great cost to the marina or yard operator -- until the owner finally complies with the requirements. It is also these same "artists" who bring lawsuits when something happens to their vessel; or the "artists'" insurance carriers do so after paying off the vessel owner.

The foregoing is demonstrated in the Dagnone case, where of the 15 vessels damaged by a severe storm, only the "drop off artist" brought the lawsuit -- all the rest who had signed the marina's agreement no doubt has insurance carriers who either realized or were advised that a lawsuit against the marina was not possible, or at least advisable, because of the defenses contained in the contracts the vessel owners had signed. As a result, it was only Dagnone who brought suit, the one who failed to sign the contract after his vessel had been damaged.

In summary, marinas and boat yards should institute very clear practices that require customers to not only sign contracts and pay deposits before service or space can be provided, but also require customers to satisfy these requirements before the customers are allowed to leave the vessel on the premises.


MORE ON HEALTH SAVINGS ACCOUNTS
by Gary Duquette, Employer Benefits
HSA'S, (Health Savings Accounts) are gaining in popularity and acceptance. There still seems to be some confusion about what they are and how they work.

It is important to remember there are two separate elements. Element one is the actual savings account. Money contributed to this account is tax deductible and money taken out of this account to pay "IRS approved" medical expenses come out Tax free! In order to be able to put money into this account, it is necessary that you have an HSA compatible Health Plan. The health plan may be purchased as an individual or by employers for their employees. The savings may be in the ABC Bank and the insurance may be purchased from the XYZ insurance company. They are totally separate. There are maximum allowable contributions to the savings element and the insurance element also has minimums and maximum as to deductibles and maximum out of pocket risk to the insured.

Rules have changed for 2007 but basically they are:

For the insurance element:

• The minimum deductibles have been increase to $1,100.00 for an individual and $2,200.00 for family coverage.
• The maximum out of pocket maximums increase to $5,500.00 for an individual and $11,000.00 for a family

• Individual maximum contribution has been increased to $2,850.00 and the family maximum is $5,620.00. For those over age 55 the catch up has been increased to $800.00. These amounts are NOT limited by the deductible on the health insurance plan. So a person 56 with a $1,500.00 deductible health plan can contribute $3,650.00 to their account. As long as the plan is continued through 2008, they can make the full savings contribution for 2007 regardless of the month in 2007 the health insurance plan is established.

• Use an application that contains a waiver granting the employer permission to contact the employee's former employers
• Prepare a form that lists the questions you want answered with a space to write the answers.
• Confirm with the applicant the names and phone numbers of previous employers.
• Tell the applicant that you must have the opportunity to talk with at least four of his/her previous employers before a job offer is extended. If the applicant does not cooperate there is no job offer.
• Develop an approach or script to put the former employer at ease; refrain from using the word "reference". Mention areas of commonality.
• Stay away from the human resources department; they are frightened of slander and defamation law suits and will not tell you anything.
• Call early in the morning (before 7:00 A.M.), during the lunch hour or after the close of business (after 6:00 P.M.).
• Do not call the applicant's current employer unless the applicant has given you written permission.
• Offer to send the former employer a release or a copy of the job application with the waiver attached.
• Be cautious about the rehire question. If they answer no that could be construed as a form of defamation.
• Begin the conversation by introducing yourself and asking for their help.
• If she/he does not have the time to talk schedule a telephonic appointment at some future date.
• If you encounter resistance offer one of the following:
  1. Have the applicant sign a release
  2. Send them a copy of the job application with the signed waiver
  3. Remind them that it is not illegal to furnish an employment reference as long as 1) the information is factual, 2) the person on the phone has personal knowledge of the applicant's performance and 3) the information is not provided in a malicious manner.
  4. Ask them if there is someone else in the organization that can help you.
• Have the job applicant provide you with copies of:
  1. 1. Past performance evaluations
  2. Citations of merit
  3. Professional licenses
  4. Undergraduate, graduate and law school classes and the grades they received
  5. Newspaper articles in which they were featured
  6. Awards they received
• Do not send the former employer a fax or e-mail with your request. You are giving them time to find an excuse not to talk to you.
• Listen carefully for the verbal clues from the former employer, e.g., periods of silence, sarcasm, long pauses, throat-clearing, hesitancy, humor, and anger.
• Probe when you hear shallow responses; politely ask for more details; repeat their response as you heard it; and ask direct questions.

• When the new hire will handle money, checks or any liquid assets
• When the new hire will be going into private residences
• When the new hire will be working with children under the age of 18
• When the new hire will be driving a company vehicle
• When the new hire will be working with your clients assets
• When the new hire will be working alone
• When the new hire is a man working alone with women only and vice a versa.

• Increased inspections at California Department of Food and Agriculture border stations
• Dive surveys of the Lower Colorado River to determine the extent of infestation
• Training and deployment of survey teams to inspect other California water bodies
• Public information and education efforts are underway, especially for boaters

• Ruin your engine by blocking the cooling system -causing overheating
• Increase drag on the bottom of your boat, reducing speed and wasting fuel
• Jam steering equipment on boats
• Require scraping and repainting of boat bottoms
• Colonize all underwater substrates such as boat ramps, docks, lines and other underwater surfaces requiring constant cleaning
• Reduce fish populations