by Mark DiMaio

The 9th Annual Vision Coalition Conference took place on Monday, November 14th at the University of Delaware’s John Clayton Center.  The conference brings together school leaders, educators, elected officials, non-profits and business leaders to focus on improving Delaware’s education system. This year’s meeting theme centered on working to “close the achievement gap” for the state’s disadvantaged and special needs children.

Keynote Speaker, Paul Reville, a Harvard University professor, focused his remarks on addressing persistent achievement gaps especially for students who face hurdles to learning. Professor Reville theme of “all means all” asked stakeholders to focus on policies that ensure that every student can access a quality education.
During the conference, attendees participated in small-group discussions on how Delaware can to a better job of connecting schools to government agencies and nonprofits that provide services linking students and families to health care, language training, shelter and food.  Many Delaware teachers are left to assist their student personal issues while still trying to teach. Other discussions concentrated on the state’s decades-old school funding system and the need for increased funding for schools serving students in poverty and English-language learners. There was also the realization that continued tight state budgets with a projected revenue shortfall could limit state funding to address additional student needs.

Dr. Dan Rich, University of Delaware Professor of Public Policy, was awarded the Order of the First State by Governor Jack Markell.  Professor Rich received the award for his tireless work to improve education for all Delaware students and service to his fellow Delawareans.

by Mark DiMaio

Last Friday, I had the pleasure of attending the Delaware Manufacturing Extension Partnership (DEMEP) program on Supply Chain Optimization Leadership. It’s a national program developed by the Manufacturing Extension Partnership network. The program focused on understanding the advantages of incorporating a strategic approach to supply chain management, and how it can provide a positive impact on local economies. Today’s manufacturers need to be more agile, flexible, and responsive to external pressures. Competition between companies has given way to competition between supply chains. The DEMEP Supply Chain Optimization program provided a road map for companies to focus on improved collaboration and supply chain integration. I learned that the enemies of supply chain effectiveness are: the destabilizing effects of dependency; forecast inaccuracy; variation; and lack of supply chain visibility.

The program provided a working session to better understand supply chain fundamentals and the strategic implications of a poorly functioning supply chain, as well as gained insight to supply chain system dynamics. The main take away was that a lack of understanding and communication within your supply chain will drive higher inventory levels and lower levels of service. Developing a sound supply chain risk management strategy that includes strong partner collaboration will drive supply chain optimization. Rustyn Stoops, Executive Director for DEMEP, put it best, “Eliminating the four walls of your business and looking at your business as the entire Supply Chain, while improving communication and collaboration along that same Supply Chain, has the opportunity to yield some incredible results.”

by James DeChene

This week, 21 states and over 50 business groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers and the National Retail Federation, filed multiple lawsuits against the Department of Labor. All were seeking to overturn regulations that would change how millions of Americans are compensated for their labor by making them eligible to receive overtime pay.

Specifically, the salary threshold for exempt executive, administrative, and professional employees will increase to $47,476 per year (or $913/week), meaning that salaried employees earning less than this amount, regardless of job duties, must be compensated for overtime work.

Both lawsuits said the Department abused its authority by increasing the salary threshold so drastically, and failed to account for regional variations in the cost of living. In addition, the lawsuits claim the Department of Labor violated federal law by indexing the salary threshold to the 40th percentile of income, with automatic increases every three years.
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It is currently unclear as to whether the lawsuits will force the Department of Labor to delay implementation of these pending regulations. However, the Eastern Texas District where the lawsuit was filed is known as a “rocket docket” court where cases move along quickly. The State Chamber of Commerce will keep you informed with updates as they happen.

​by James DeChene

There are many competitive Delaware primaries in most of the races this year and it is unclear (as of now) who will win.  Up and down the state, and in both parties, on September 13th the outcomes will shape the narrative for the November general election and beyond.  In January there will be a new member of Congress, a new Governor and Lt. Governor, an inducted 149th General Assembly and many important county and local positions will be filled such as County Executive and City of Wilmington Mayor.
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A reminder email will be sent to Chamber members highlighting which races have primaries and inwhich races the Chamber’s PAC has contributed to a candidate.  Remember—it is important for the business community to vote and be actively involved in the legislative and regulatory process.  Laws and regulations are created and promulgated that have direct impact on your business and how it operates.  This election season is the time for your voice to be heard by those who are asking for your vote to represent you in Washington, Dover, your county and in your town—make sure you take the time to make an informed decision on who you want to be your voice.

​by Will Alger, Systems Analyst, Diamond Technologies

If you go to Microsoft’s website, it reads “Beginning January 12, 2016, only the most current version of Internet Explorer (IE) available for a supported…” Then, you look over at the ‘What does this mean?’ section and it says “It means you should take action.”

What does that really mean for you, the employee?

You should ensure that your IE is updated to IE 11. Failure to do so will do a few things.

1. You may be unable to access applications that you need to access to do your job; but inversely, upgrading without validating your business systems with your IT department can cause the same issue for applications that will not work on IE 11.
2. Your computer will be more vulnerable to viruses, malware, and other attacks that can compromise your data when using an old version of IE.

If you continue to read, it says “Internet Explorer 11 is the last version of Internet Explorer.” That was not a typo; IE is saying goodbye. If you are a Windows 10 user, you may have met the new browser, Microsoft Edge. That is the future of Internet browsing on Windows… Or is it?
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Does this open the opportunity for Google to take over? In the latest survey of preferred browsers or is Microsoft Edge going to offer something that will bring everyone back to them? Chrome is preferred by 68% of computer users, while IE is at 6.3% That is yet to be seen…

By James DeChene

In a front page Wall Street Journal article, Delaware’s continued status as the premier corporate friendly location is called into question.  The article highlights two specific provisions, fee-shifting and appraisal arbitrage, as the primary stumbling blocks to Delaware’s long standing reputation.  Legislation on fee-shifting, authorized by a state Supreme Court decision last year, was passed in order to reverse the Court’s decision that would have curtailed shareholder derivative litigation in the state by requiring the losing party to cover the attorney’s fees and costs for both sides. In addition, the article outlined the proposal of new language that would change the rate of interest paid to shareholders until their appraisal case is decided. Shareholders now accrue 5.75 percent in annual interest on the deal price while waiting the years it takes to decide an appraisal case. There are those that feel that the rate is too high and limits the downside for hedge funds, encouraging them to exercise appraisal rights. Currently, if the court decides that the amount paid in the merger was fair and the hedge fund receives nothing extra, it still receives the interest. The proposed language permits companies to pay the amount of the merger price they do not dispute and then pay interest only on the amount of any difference if the court determines a higher value, but again, this language is not expected to be voted on by the General Assembly until 2016.At the end of the day, the takeaway from the article is that:

1. Other states are working to enact provisions making them more business friendly in an attempt to lure companies away from Delaware
2. The General Assembly needs to work to protect Delaware’s brand—corporate fees make up 26% of the state’s budget.  After all, as quoted in the article on how other’s states are ramping up their efforts to attract businesses, “You look at Delaware and say, ‘why does it have to be that way’? We have 50 states,” said state Rep. Jon Echols, the Oklahoma Republican who co-sponsored that state’s bill.
3. Delaware’s judicial system will become more and more important as time goes on.  As a practical matter only our judges can decide whether the referenced Dole and Ancestry cases come down on the side of “wheat” or “chaff”.    What I can say is that the below examples seem to show that our Courts are clearly sensitized to the issues and are demonstrating that they tread carefully on a case by case basis based on the facts of the case.

Here’s a blog posting (via Reuters) highlighting two cases last week where Vice Chancellors Laster and Noble sent pretty clear messages around so-called “disclosure only” settlements. These rulings are illustrative of the Delaware judiciary’s deep concerns about awarding legal fees in cases where little to nothing of substance is achieved for either the corporation or its shareholders.  Two other recent cases further illustrate the Court of Chancery’s ability to sort out cases on their merits:

• Last week’s dismissal (via National Law Journal) of a derivative lawsuit against GM’s directors related to faulty ignition switches (Vice Chancellor Glasscock)

• The Ramtron Int’l appraisal case (via Mondaq) where the appraised price came in below the deal price (Vice Chancellor Parsons)
  

The referenced bill on fee-shifting/forum selection created a vehicle allowing companies to ensure that Delaware is the venue for their internal corporate disputes and it’s altogether appropriate that the business world watch carefully to see if the State’s judges fairly and actively filter out weak cases brought to Delaware. No doubt there will be many strong cases where litigants (and their counsel) will be well rewarded  — but each of the above rulings show that Delaware’s courts are well equipped to combat meritless litigation and mindful of a responsibility to separate the wheat from the chaff.

By James DeChene

As previously reported in 2014, the General Assembly passed a bill (HB 295) that created new rules for businesses for how they handle consumer’s personal data (name, social security number, address, credit card info, etc.). Stemming from a news report out of Philadelphia of an identity theft conducted with documentation found in a trash can outside of a business, this bill directed all businesses in Delaware to properly erase or destroy any and all data that falls under this category.

The State Chamber worked with the bill sponsor, Rep. Stephanie Bolden, to ease the onus placed on businesses including language involving “reasonable steps” to destroy the data, and also sets the standard for bringing a lawsuit as requiring a “reckless or intentional” violation by the business. Going further in the 148th Session, another bill was introduced (HB 18) that clarified that these provisions only affect those companies that do business in Delaware, not all businesses either registered only here, or those that conduct business with Delawareans, such as a wood carver from Vermont selling to a Delaware resident.