Act 37: Permitting Hawaii Nonprofit Boards to Take Actions by Ballot and Electronic Voting, Use of Electronic Notice, and Conduct of Meeting by Teleconference

Business Impact: The purpose of Act 37 is really to modernize the way Hawaii nonprofit corporation boards operate and handle their affairs.  Basically, it allows nonprofit directors to use electronic communications technology to permit member actions by ballot, conduct voting, provide notice, and conduct meetings.

Specifics of the Law:  This new law amends parts of Chapter 414D of the Hawaii Revised Statutes, the Hawaii Nonprofit Corporations Act.  Specifically, the law adds in language that allows nonprofit board to take action through the use of electronic means.  Therefore, the law is permitting the use of email, fax, teleconferencing to make a lot of the formalities necessary to carry on a nonprofit corporation easier and at the discretion of the board.

Our Nonprofit Board has been Doing this Already does that Mean Our Past Decisions were Prohibited?

Probably not, as it was noted the way the law was written prior to this change did not specifically prohibit the use of communication technologies.  However, it was the wishes of the Hawaii State Government to provide some clarity and give assurances to nonprofit corporations that if they choose to operate in this manner than they are conforming to the law.  The only past acts that may be prohibited by your Board is if you did not comply with your own bylaws or did something that was a direct conflict of interest with the goals of the nonprofit.

However, every situation is unique and if you have concerns with the use of electronic communications in your board meetings, notices, or the conduct of balloting and voting you should seek an attorney for review and advice.

Reasonable Measures to Verify a Person’s Identity

Even with the new changes the fact that you can use electronic means to communicate should make your life easier, but the only caveat is that within the law it states that “[t]he corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of the Internet, teleconference, or other electronic transmission technology is a member or proxy of a member.”

Basically, only authorized people are allowed to vote and make decisions, and that would be the board of directors and officers.  If your nonprofit uses unreliable or unsecure methods of communication it would be difficult to say you took reasonable steps to verify a person’s identity when conducting a meeting.

Bottom line:  The changes in this law are meant to help nonprofit boards, especially ones with members across the islands, do their business with the security and ease of using electronic communication. However, with that being said you probably want to make sure your bylaws, articles of incorporation, and procedures are up-to-date and the way you conduct yourselves is legal.  Also you probably want to check your bylaws and make sure they do not prohibit specific types of technologies, as some types of nonprofits wanted to keep that face-to-face interaction required of meetings in the past.  Lastly, your notices and ballot measures are not simplified just because you are using email.  There are certain requirements that still need to be followed.  The means are easier, but the goal is to keep the substance the same.

Next law to be covered: For your coffee people to New Law in the Brief will be focusing on Act 49, which is meant to restrict the use of terms indicating geographic origin of Hawaii-grown coffee on coffee packaging.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Draw the Law” is a weekly short post where I try to visualize a legal concept.  It is designed to be helpful to the laymen and for a quick understanding.  For the next several posts I will be detailing organizing and operating a business.

What is Limited Liability?

Limited liability means that a business owner’s personal assets are not on the hook for financial obligations incurred by the business.  The business owner’s personal assets are “shielded” from those outstanding liabilities and in this way they are only at risk for what they invest into the business.  Therefore, an owner’s house, furniture, and personal bank account or not subject to the financial liabilities of their company if it goes under.

*In some states, the law makes shareholders liable for unpaid wages of the company’s employees.

How do I get this shield?

The limited liability shield is NOT automatic.  You will only receive this kind of protection from organizing a corporation, a limited liability company, or some time of limited liability partnership.  The formation and organization of your company is generally handled through an attorney that knows how to create and file the proper documentation with the state you are organizing in.

One Way Around the Shield: Personal Guaranty

Many sophisticated lenders, such as banks, already understand limited liability.  So when a bank lends money to small and new corporations it knows very well it cannot get its money back if the business has less assets than what the bank claims.  Its typical response to this is situation is to get the owner to sign a personal guaranty or some other form of personal obligation.  In this way, when the owner signs that document in their individual responsibility their personal assets can be gone after by the bank.

Despite this fact corporations and limited liability companies still remain viable options for a business owner seeking legitimacy and ways to raise funds for their endeavor.  If you are interested in starting a corporation or llc, and some of the ins and outs please contact an attorney.

See you on the next draw!

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Act 34: Protecting Gender Expression or Identity in the Workplace

Business Impact: Act 34 prohibits discrimination on the basis of gender identity or expression as a matter of public policy, specifically with regards to employment.  Basically, if you or the work environment you foster is insensitive to gender expression or identity of your employees, you may face enforcement action by the Hawaii Civil Rights Commission for discriminatory practices.  Discriminating against an employee expressing their preferred gender would be the same as discriminating against women, handicapped persons, or people of a certain race.

Specifics of the Law:  This new law amends two parts of Hawaii law, Section 368 and 378.  By amending Section 368, the law gives the Hawaii Civil Rights Commission (HCRC) the enforcement power over gender identity or expression discrimination cases.  In addition, by amending Section 378, the law aims to prevent discrimination in the workplace by making gender expression and identity a protected status similar to other categories, such as disability, race, age, and sexual orientation.

What Does “Gender Identity or Expression” Mean?

As you may already know the State already protects sexual orientation from discrimination.  You may think that sufficiently covers what is known as “gender identity or expression.”  However, that is not necessarily the case.

Sexual orientation is only describing one’s preference based on the gender of the partner.  In terms of gender expression and identity, a transgender person can have any sexual orientation.  Basically, the gender status is not the same as one sexual preference.  Gender identity is one’ internal feelings of being male or female or along those lines.  Gender expression represents all of the social and behavioral characteristics associated with femaleness or maleness.

Example

Consider a male truck driver wishing to make the transition to female.  Their appearance at work continues to be more and more feminine.  Other workers, due to the change, harass the transitioning worker.  The truck driver comes to you to discuss the harassment and gender transition.  If you suspend them for this action, then you would likely  face a visit from the HCRC for discriminating against your employee’s gender expression and identity.

Bottom line:  Is your company’s policies and procedures equipped to handle this change in the law?  Does your handbook reflect the changes?  Consider the following situations for reasonable accommodation or to prevent bias in the workplace:

  • Restrooms
  • Self-identification papers, check cards, etc . . .
  • Housing and facilities like locker/dress rooms
  • Dress code

There may be other situations that you may need to safeguard from gender expression or identity discrimination.  You should consider a legal review of your work policies, procedures, and handbooks.

Next law to be covered: Act 37, allowing non-profits to take actions by ballot and electronic voting, use of electronic notice, and conduct of meeting by teleconference. 

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Please check out my contributor article about how we can better serve justice in Hawaii and also follow Civil Beat.  They are a great civic investigative forum of news and insight into the daily beat of Hawaii.
The Links:

My article

Civil Beat Main Page

LATEST UPDATE (5/5/11 @ 5:01PM):

KHON2 also posted a little blip from me about Wrongful Termination and Actionline.  Click here to check it out.  I will be doing a post on a legislative update about some of the changes to employment law in a couple of days.  Notably, the protection of gender expression protection, labor trafficking, and domestic violence as a protected class.  HR you might want to take a peak!

In the meantime, prepare those landlord-tenant questions for tomorrow’s last day on Actionline from 11AM – 1PM.  Finally, if you did not get a chance to call in by topics remember the Young Lawyers Division will be putting up free legal clinics on Saturday from 10AM – 2PM.  For further information please check out this link.

For the rest of this week (May 2 – 6) the Young Lawyers Division (YLD) of the Hawaii State Bar Association will be volunteering at the phones of KHON2’s Actionline. We are covering the following topics on the following days from 11AM – 1PM:

  • Monday – Bankruptcy, Foreclosure & Consumer Protection
  • Tuesday – Divorce, Child Custody, Adoption, and Mediation
  • Wednesday -Employment Law/Wrongful Termination
  • Thursday -Elder Care/Elder Law
  • Friday – Landlord and Tenant Law in Hawaii

If you think you have a legal issue or concern, or even just a question, please feel free to call at 591-0222.  If you miss the topic you want to talk to a volunteer attorney about don’t forget the YLD will be putting on free legal clinics throughout the state this Saturday, May 7th, from 10AM – 2PM.  For further information click here.

Actionline Law Week is all pau!  Thank you for your calls and interests.  In addition, I personally would like to thank fellow attorney volunteers that gave up their lunch to field over a hundred calls this week to help people.  If you didn’t get a chance to call please check out the YLD’s Legal Clinics on May 7th, from 10AM – 2PM.

-RKH

From the beginning of my pursuit of a legal career I have been highly addicted to using social media to organize and set-up events.  I see no reason why lawyers should not embrace the the sharing of information in a medium that their clients readily use on a daily basis.  The number one complaint by many clients is lack of communication.  So long as we uphold and abide by the legal ethics that guide our profession we can use social media and technology in a thoughtful and meaningful life to better educate the public and our own profession.
Thus begins the journey of my career and blawg.

-RKH