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Monday, January 14, 2013

Start-up Business: When is the Best Time to Consult with a Lawyer?

If you are starting a new business, it is vital that you assemble your team of advisors immediately. Many entrepreneurs are short on cash during the start-up phase, and forego retaining legal counsel or other professional advisors in order to preserve capital for other aspects of the business venture. But this approach is usually penny-wise and pound-foolish. And many small business start-up lawyers are a lot more affordable than you think.


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Sunday, January 6, 2013

Are Criminal Background Checks Legal?

Why hire a person with a criminal record when, surely, there are applicants out there with unblemished records? In reality, however, the issue of job applicant criminal background checks is a complicated one.


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Wednesday, January 2, 2013

Choosing A Litigation Attorney

If circumstances require you to get involved in litigation, you may find the process of selecting an attorney to be overwhelming. There are, however, some steps you can take to make the selection process a bit easier.


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Monday, September 10, 2012

Welcome

This blog was started three years ago and since then, many new readers have joined. My initial comment expressed a hope that this forum would provide a means to communicate and share ideas as well as comments. That hope is just as valid today as it was in 2009. Following is what I wrote in the introductory posting and it still expresses my philosophy of what a lawyer is and should be. Thank you for reading this and my other postings.


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Monday, August 13, 2012

Employers and Immigration Compliance: What You Need to Know

The Immigration and Nationality Act (INA) makes it illegal for employers to knowingly hire undocumented workers and requires employers to verify each worker’s identity and eligibility by completing the I-9 Form. An employer’s failure to complete the I-9 Form can result in criminal and civil penalties.

The INA also protects individuals from employment discrimination based upon national origin, citizenship or immigration status. The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) enforces the INA’s anti-discrimination provisions.  Victims of discrimination may file a complaint with the OSC to seek back pay, reinstatement and other remedies.

With so much at stake and so many potential pitfalls, it is important for all employers to familiarize themselves with the requirements and implement policies and procedures to ensure compliance.

Employers are prohibited from:

  • Discriminating on the basis of citizenship or immigration status, with respect to hiring, firing, recruitment or referral. This rule applies to employers of four or more employees.
  • Discriminating on the basis of national origin, with respect to hiring, firing, recruitment or referral. This rule applies to employers of between three and 15 employees. Employers may not extend different treatment to different individuals based on their birth place, country of origin, native language, ancestry or because they may look or sound “foreign.”
  • Requesting more or different documents to verify a worker’s employment eligibility. An employer may not request different or additional documents for determination of citizenship or national origin than those documents specified on the I-9 Form.  Furthermore, an employer is not permitted to reject genuine-looking documents.
  • Retaliating against an individual who files charges with the OSC, cooperates with an investigation or contests an action that may be considered discriminatory or in violation of the INA.

To improve compliance in your employment procedures, consider implementing the following practices:

  • Refrain from using discriminatory language in job postings, such as “green card only” or “U.S. citizen only,” unless it is required by law or by a government contract.
  • In completing the I-9 Form, do not request specific documents over other permitted documents. Each employee is permitted to present any document from the list of acceptable documents stated on the form.
  • Refrain from selectively verifying work eligibility for only certain employees based on their citizenship status or national origin; whatever your policy, make sure it is applied consistently to all employees.
  • Avoid the appearance of discriminatory practices by verifying employment eligibility only after you have made a hiring decision, and give the employee three days to provide the required documentation.
  • Do not immediately terminate an employee if you receive a “no match” letter from the Social Security Administration. While such a letter may mean the individual is not authorized to work in the United States, it is also possible that there is a discrepancy in the record due to a clerical error or legal name change.
  • If you suspect that an employee is not legally eligible to work in this country, notify the employee and request valid employment eligibility documents before terminating or suspending employment.

 

 


Monday, August 6, 2012

Top 3 Real Estate Tips for Small Businesses

For the vast majority of small businesses, the company’s first and only real estate transaction is entering into a lease for commercial space. Whether you are considering office, manufacturing or retail space, the following three tips will help you navigate the negotiation process so you can avoid any unpleasant surprises or costly mistakes.

“Base Rent” is Not the Only Rent You Will Pay
Most prospective tenants focus their negotiation efforts on the “base rent,” the fixed monthly amount you will pay under the lease agreement. You may have negotiated a terrific deal on the base rent, but the transaction may not be the best value once other charges are factored in. For example, the majority of commercial lease agreements are “triple net,” meaning that the tenant also must pay for insurance, taxes and other operating expenses. When negotiating “triple net,” ensure you aren’t being charged for expenses that do not benefit your space, and that you are paying an amount that is in proportion to the space you utilize in the building. Another provision to watch for is “percentage rent,” in which a tenant pays a percentage of revenue in excess of a specific amount. This may not be a bad thing, as it provides the landlord with an incentive to help ensure your company is successful.

There’s No Such Thing as a “Form Lease”
Most commercial property owners and managers offer prospective tenants a pre-printed lease containing your name and various terms. They often present these documents and adamantly explain that it is the landlord’s “typical form lease.” This, however, does not mean you cannot negotiate. Review every provision in the agreement, bearing in mind that all terms are open for discussion and negotiation. Pay particular attention to the specific needs of your business that are not addressed in the “form lease.”

Note the Notice Requirements
Your lease agreement may contain many provisions that require you to send notification to the landlord under various circumstances. For example, if you wish to renew or terminate your lease at the end of the term, you will likely owe a notice to the landlord to that effect, and it may be due much earlier than you think – sometimes up to a year or more. Prepare a summary of the key notice requirements contained in your lease agreement, along with the due dates, and add key dates to your calendar to ensure you comply with all notice requirements and do not forfeit any rights under your lease agreement.
 

 

 


Sunday, July 15, 2012

Can You Be Fired for Having Bad Credit?

If you are feeling the pinch, you are not alone. Many Americans have experienced a decline in income, while expenses have continued to increase. Many have taken a significant hit to their credit scores and are considering bankruptcy. Others who are on the eve of foreclosure may be considering a bankruptcy filing to stop an imminent foreclosure sale.

Whatever the reasons, a common concern of many consumers who face mounting debt, or are considering filing bankruptcy, is whether such credit issues can affect their ability to obtain or keep a job or get a promotion. In short, no. Bankruptcy is a protected, fundamental right granted by the U.S. Congress to all Americans. Under federal law, employers are prohibited from discriminating against a worker because of a bankruptcy filing. Bankruptcy courts across the country have weighed in on this issue and have consistently upheld the anti-discrimination protections contained in the U.S. Bankruptcy Code.

Employees who have filed bankruptcy and are subsequently fired must prove that bankruptcy was the primary factor in the termination. If the employer can prove there were other reasons for the termination, the employee’s wrongful termination claim will fail. Similarly, it is a violation of the law to refuse to hire or fail to promote an employee solely on the basis of a bankruptcy filing.
 

 

 


Sunday, July 8, 2012

Just My Opinion

As we end our celebration of the 4th of July holiday for another year and head towards the fall elections, let's spend a moment reflecting on who we are and why we fight like siblings in a dysfunctional family.

In my opinion, we really are a cohesive nation but with diverse and passionate beliefs. We may argue, both reasonably and occasionally with more "volume" than common sense but in the end we pull together to get things done.

We are a people who spend each day trying to make this country just a little bit better for ourselves and our posterity. To paraphrase John F. Kennedy, at our best we do not look at things as they are and say "why", but instead looks at things as they should be and say "why not?".  We open our doors (sometimes not wide enough or fast enough) to people from all parts of the world and allow them to claim their piece of our dream. We do all of these things because we believe in ourselves and our ability to grow, improve, and always become better.

That, in my opinion is the real America exceptionalism.

 

 


Sunday, October 2, 2011

Avoid Piercing the Corporate Veil

Many business owners establish corporations to shield themselves from personal liability for business debts and protect their personal assets from creditors of the company. When established and maintained properly, a corporation is treated under the law as an independent entity, with many of the rights afforded to individuals. Such rights include the ability to own and transfer property, enter into contracts, obtain funding and to initiate legal action. A corporation is a separate, distinct entity, apart from its shareholders; as a result, only the corporation’s assets can be seized to pay judgments or satisfy other debts owed by the company.

However, business owners can lose the liability protection afforded by the corporate business structure through simple, common mistakes. Certain corporate formalities must be observed in order to preserve the corporation’s status as a separate entity apart from its owners. Failure to comply with these requirements may permit creditors to “pierce the corporate veil” and seek payment from the individual shareholders directly.

To ensure the corporate veil remains intact, the corporation must act like a separate and distinct entity, and the shareholders must treat it as such. If certain corporate formalities are not consistently observed, a court may find that the corporation is merely an “alter ego” of the individual owner(s), and the corporate structure may be “disregarded”. When this occurs, the corporate veil is pierced and the individual shareholders can be held personally liable for the debts of the company.

The most frequent mistake owners of small corporations make is commingling of assets. The corporation and the shareholders must treat themselves as separate entities. The corporation should have its own bank and credit card accounts. Business owners should clearly document and account for expenditures made from corporate accounts if they were for personal benefit. In other words, do not use the corporation's funds for other than legitimate company expenditures.

The second most frequent mistake is to forget to keep up-to-date corporate records. Often, business owners will engage in certain actions - such as buying or selling a building or taking out a loan to purchase machinery - without noting in the corporate minutes that such actions were approved by the corporation. The corporation’s financial and corporate records must be documented. Most states also require that the shareholders and the directors meet at least once per year. A record of these meetings, in the form of minutes or written resolutions must be properly executed and maintained by the company.

The benefits associated with the corporate structure are manifold. But, as is frequently the case, these benefits can be lost by failing to "play by the rules".


Thursday, February 18, 2010

Understanding Severance

Since the 1930s, employees have acquired more legal rights as federal and state governments enacted laws giving them the right to unionize and engage in collective bargaining, to receive a minimum wage and extra pay for overtime work, and to be protected from discrimination based on race, religion, gender, or disability. However, the employee protection laws have a serious gap; with the exception of the right to maintain health insurance coverage under the provisions of COBRA, employees do not have any rights to income after termination.

Labor laws in virtually all European countries - and many other countries around the world - specify that an employee is entitled to payment if he is involuntarily terminated. The few exceptions which exist concern termination for gross cause, usually defined as criminal acts or breaches of fiduciary duty.

In the U.S., however, legal protections covering severance are far more limited in scope. There are no provisions in the federal Fair Labor Standards Act that require compensation for severed workers.  As a general rule, employees who lose their jobs are not entitled to severance payments unless the terms of severance are spelled out in an employment contract. A limited exception exists in the Worker Adjustment and Retraining Notification Act (WARN), that provides for advanced notice or pay in lieu of notice under certain conditions. WARN does not cover all employers or most termination scenarios.

However, workers who have lost their jobs may be able to demand severance if the company has traditionally provided severance to terminated employees. While an employer is free to change policies (with certain limitations), if there has been a written policy or oral statement that terminated employees will receive severance, a strong case can be made that such a commitment constitutes a binding agreement.

For example, a client of mine was terminated due to a company restructuring. His employer had a history of providing two weeks of severance per year of service (a pattern of practice). However, my client was provided with only one week of severance per year of service, which the company justified as reasonable due to its financial condition. We challenged this on several grounds, including the fact that the company's President had stated six months earlier that company benefits would be continued despite the economic climate.  Ultimately, my client received the correct severance package.

Employers should review any statements regarding severance that can be found in employee handbooks.  Oral statements, written memos, and even casual emails should be analyzed to see if commitments have been made.

A written severance policy should be drafted. The policy should consider the following questions:

• Do we want to have any severance provisions? If so, how much severance should be offered? How should it be calculated (e.g.length of service? Rank in the company?)
• If severance is granted, which workers are eligible?  Only those working full time?  What about long-term part-time workers?
• How long does an employee have to be on the job to be eligible for severance?
• Is there a cap on the duration of severance?  For example, six months regardless of length of service?
• Will any severance compensation be paid out as a lump sum or over time?
• How do severance payments affect eligibility for unemployment insurance claims?

Terms of severance involve more than payment of wages or salaries for a specified time after termination. Severance policies should also cover payment for unused sick leave as well as other benefits. In some cases, the company may decide to offer outplacement services to a severed employee, including career counseling and assistance with resume preparation. Workers are often asked to sign an agreement not to sue for wrongful termination in return for receiving severance benefits.  Non-compete clauses may also be part of a severance agreement.

It is important for employers to retain experienced employment counsel when drafting severance provisions for employee handbooks or in crafting severance agreement language.


Monday, October 12, 2009

One Attorney's Opinion

“My attorney is a fighter. He always fights to the last dollar of my money!” (Anonymous)

From the first day of law school attorneys are trained to be zealous advocates. By nature, attorneys are competitive. We fight to win, to achieve our client’s goals by besting the other side. Frankly, our clients look to us to be the combatants in the ring, championing their cause and advancing their interests. Our clients want us to go after the other side without pity or remorse.
 
But are we really serving our client’s interests by aggressively litigating? Should our focus instead be on solving our client’s problems by other means? In other words, should we look for alternatives to fighting and resort to legal combat only as a last resort?
 
By asking the questions I am also supplying my answers. Now, I like a good fight. It starts the adrenaline flowing and enlivens the practice of law. In addition I have no objection to earning legal fees from litigation; they can be quite good. But sometimes I think I better serve my clients by counseling them regarding why litigation is not always the best approach to resolving their legal problem.
 
Obviously, the decision to litigate is fact dependent and sometimes litigation is undertaken to make a point rather than achieve a specific objective. However, too often clients authorize litigation without truly understanding both the monetary and the psychological costs involved.
 
I view my role as an attorney to be an advocate, a counselor and an advisor. The advocate role is well understood by clients. The counselor and advisor roles are not.  In my experience, a good counselor is one who can help the client look at alternative means to achieve the desired end. The advisor then evaluates the alternatives, provides the client with his or her professional advice on the best strategy to employ, and often guides the client to make the most appropriate decision. These roles are not as much fun – and may not be as financially rewarding to the attorney – but they go to the fundamental service we provide, which is to help our clients resolve their legal problems.
 
While we are taught to be zealous advocates, perhaps we serve our clients best when we serve them least. Litigation is not the first strategy and frequently not the best alternative.

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