The Justice Department Criminal Division recently released guidance on what it considers when deciding how a corporation’s compliance program factors into its investigation and the ultimate decision as to whether to bring charges, negotiate pleas or enter into other agreements with corporations under investigation. The Evaluation of Corporate Compliance Programs, released on April 30, 2019, is an expansion of the 2017 guidance document issued by the Criminal Division Fraud Section.

Prosecutors Must Ask Three Fundamental Questions

Prosecutors will ask three fundamental questions to determine if a corporation’s compliance program was effective at the time of the offense and at the time of charging:

1. Is the compliance program well-designed?
2. Is the compliance program being implemented effectively?
3. Does the compliance program work in practice?

Is Your Compliance Program Well-Designed?

An Effective Compliance Program Identifies Specific Risks

An effective compliance program will be tailored to the specific risks affecting the company under investigation. Prosecutors will ask if the company identified its own “high-risk” areas, as well as the degree to which the program dedicates resources to monitor these areas. Even a well designed program might not catch every event. Therefore, another important factor is when an event is uncovered, are the lessons learned incorporated into the compliance program going forward?

Train Your Employees

Prosecutors will analyze how thoroughly and effectively a company has trained its employees on its compliance program. Companies should use real-life experiential training scenarios and case studies during employee training. Employees must know when, where and how to report suspected misconduct. Then, once an incident is reported, how does the company identify which complaints merit further investigation? What access is given to the individual investigating the complaint? Is this an employee or an independent outside agency? A well-designed compliance program will also make it clear that no employee retaliation will be tolerated.

Third-Party Risk

Just as you should be monitoring your employees, it is just as (if not more) important to take your third-party vendors into consideration when assessing high-level risks. Your company should be mitigating these risks by using appropriate contracts and agreements for outside work, and doing regular due diligence and compliance training for third-party vendors.

Is Your Compliance Program Being Implemented Effectively?

Prosecutors will analyse if your compliance program is being implemented effectively. A company can spend countless hours developing a compliance program that looks and sounds great, but if, after the initial introduction to employees, it gets forgotten or completely ignored, then prosecutors will not look favorably on your company’s efforts. A successful compliance program must be woven into the fabric of the day-to-day culture from the top down.

Does Your Compliance Program Work in Practice?

The final question prosecutors will ask is whether the compliance program actually works in practice. Prosecutors will look into : (1) Was investigation into the misconduct conducted in a timely manner? (2) Has the company completed a root cause analysis? (3) Can the program be tested in order to improve? Again, evolution is key here. Does your program have to be perfect? No, no risk will ever be 100% mitigated. However, a program that works in practice needs to have the ability to be updated built into its core.

Take Away

As you can see, the DOJ has shared valuable insight into what prosecutors look for when evaluating compliance programs. This is extremely valuable and companies should take advantage of this intel and honestly self-assess whether its program measures up. Companies that have well-thought-out and designed plans that are capable of evolving will fare better before the Criminal Division than those who do not. If you have any questions regarding your program or compliance in general, or any other aspect of your business, please feel free to contact us at Danziger Shapiro, P.C.
This entry is presented for informational purposes only and is not intended to constitute legal advice.

Last month a federal judge sitting in the Eastern District of Pennsylvania ruled that the recently enacted prohibition against asking job applicants their wage history violated the first amendment. The Philadelphia City Council enacted the ordinance to level the playing field with respect to the wage gap between men and woman. For a discussion surrounding the history and specific components of this law, please click here for my earlier post.

Philadelphia’s Wage History Law

Philadelphia’s Wage History Law had two main components- an inquiry provision and a reliance provision. The Court held that the inquiry provision is the prong that violated the First Amendment. Specifically, the Court held that there is no legitimate reason that would prevent an employer from asking an employee what he or she earned at their previous job. For this reason, the Ordinance’s restriction on freedom of speech violated the First Amendment It is worth noting that the second prong of the Ordinance, the reliance provision did not violate the terms of the First Amendment. Specifically Judge Goldberg wrote, “I conclude that the city’s inquiry provision violates the First Amendment. Although the ordinance represents a significant positive attempt to address the wage gap, the First Amendment compels me to enjoin implementation of the inquiry provision. The reliance provision, however, does not offend the First Amendment and remains intact. I commend the city for pursuing a novel method of attempting to reduce the wage gap, but am bound by the First Amendment’s exacting requirements for speech restrictions.” To read this Opinion click here.

The take away is that the employment landscape changes almost on a daily basis and this is just another reason why it makes sense to have an attorney take a look at your employee handbook to make sure it is up to date. Douglas Leavitt is an attorney with Danziger Shapiro and focuses his practice on guiding business with their daily operational needs. Please feel free to contact him or any of the other attorneys at Danziger Shapiro to discuss how this new change will affect your business or any other issue you may have that concerns you and your business.

This entry is presented for informational purposes only and does not constitute legal advice.

Last month the Department of Labor’s Wage and Hour Division officially rejected the 6-part test it had been using to determine if an employer who had an unpaid intern was violating the Fair Labor Standards Act (FLSA). Going forward the DOL will employ a “primary beneficiary” test which is designed to focus on the specific economic realities between the employer and intern. The new test affords the DOL more flexibility in its analysis with one factor not being any more or less important than another factor.

Primary Beneficiary Test

The primary beneficiary test requires the Courts and DOL to look at the following seven factors:

• The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
• The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
• The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
• The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
• The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
• The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
• The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Click here for an excellent summary of the new “Primary beneficiary Test” provided by the DOL.

Improperly Classified as Unpaid Employee

If the employer improperly classifies an intern as an unpaid employee, then the employee will be entitiled to minimum wage and overtime wages to the extent applicapble under the FLSA. An employer really needs to consider who is the primary beneficiary of the relationship and whether or not it is really just trying to get free labor. Attorneys will take these cases on a contingent basis because of the fee shifting provisions under the FLSA. If you are still not concerned consider this through a broader lens. What if this ocurrs in a large corporation that for years has been using unpaid interns but had improperly classified them as interns and not employees? On a class wide basis, combined with attorneys’ fees, the stakes are much larger.

What this means for Employers

As we have said in the past, Employers should every once in a while conduct a wage and hour audit and make sure that the audit applies to its “unpaid interns” as well. This means not only should an employer review its wage and hour policies, but also understand how it works in the actual workplace.

Douglas Leavitt is an attorney with Danziger Shapiro and focuses his practice on guiding businesses with their daily operational needs. Please feel free to contact him or any of the other attorneys at Danziger Shapiro to discuss a business compliance issue or other concerns you have that affects you and your business.

This entry is presented for informational purposes only and does not constitute legal advice.

This week I reviewed three Non-Disclosure Agreements and was surprised when two of the NDAs were silent regarding employee solicitation. Working with clients over the years I have found that in virtually every successful company, it is almost always the employees, along with the technology, that are among the most valuable assets that need protection. Yet in the deals my clients were exploring, these valuable assets were not protected, or at least would not have been protected had my clients not shared the NDA with me before signing. First however, I want to take a step back and discuss why the NDA (also called a Confidentiality Agreement) is used, and identify common NDA scenarios.

Protect Confidential Information

There are many situations where a business will need to share confidential information with employees, another business, potential investors or consultants. Confidential information frequently includes trade secrets, formulas, data, customer pricing and the like. However, when confidential information is shared, it must be also be protected. This means that confidential information is shared in a controlled manner such that the receiving party cannot use the information to its competitive advantage without the consent of the disclosing party. For Example, if a competitor is considering whether it wants to acquire your business or make an investment and in its review of the information you provide your competitor will gain insight into how you produce similar products cheaper. Without any protections in place, what would stop your competitor from using this information for its own competitive advantage? Your sources and methods must be protected. This is accomplished through a carefully drafted Non-Disclosure Agreement.

Common Non-Disclosure Agreement Situations

A Non-Disclosure Agreement is commonly used when:

• Sharing financial information, key vendors and other information to potential equity investors or prospective buyers of your business.
• Allowing employees access to confidential and proprietary information – Click here for a recent example of where a Teva employee violated the terms of her confidentiality agreement.
• Presentations of new products to potential customers.
• Your vendors have access to your sensitive information.
• Your clients may require the other businesses you engage (your subcontractors or professionals retained by you) with be bound by NDAs similar to the one between you and your client.

Employees as a Protected Asset

Turning back to what surprised me, two of the NDAs I reviewed this week failed to treat employees as protected assets. Employees are perhaps one of, if not the, most valuable asset to any organization. “Your company is only as good as your employees”, is not an uncommon sentiment shared by many of the top organizations around the world. Why would you not protect them? How does this come into play you ask? Simply stated, the investor that is considering making a sizable investment into your tech company will want not only to review your work papers, but also discuss them with your key employees. How does this technology work? What are the hidden dangers? What are the challenges? How do you plan to overcome these challenges? What happens if the prospective investor decides that he doesn’t want to invest in your business but makes a job offer to your key employee? This can be disastrous. Thus, an NDA must protect your employees through an appropriate non-solicitation clause.

Other NDA Considerations

There are many other concepts that need to be considered before you sign an NDA as well. For example, the definition of “Confidential Information”, term limits, key contacts, prior knowledge, disclosures to authorities, injunctive relief and document destruction come to mind. These considerations are just as important as protecting your employees through non-solicitation clauses. If you have any questions regarding a NDA that has been placed before you, or want to develop an NDA for future use, or any other aspect of your business, please feel free to contact us at Danziger Shapiro, P.C.
This entry is presented for informational purposes only and is not intended to constitute legal advice.

The American Rule

In the United States, each party is responsible for its own legal fees. This is known as the “American Rule.” In other countries, the U.K. for example, the loosing party is responsible for the winner’s legal fees. This critical difference in approach to the general legal framework explains why litigation in the United States runs amuck as compared to our British counterparts. New Jersey however has an oft forgotten procedural rule that when used properly turns the “American Rule” on its head and effectively makes the losing party pay for the winner’s attorney fees if certain conditions are met.

Attorney Fees in NJ

A Typical Situation

In NJ, litigants are responsible for their own attorney fees and costs associated with their own case. Therefore, every plaintiff has presumably made an economic analysis before filing his case that the costs (legal fees, costs of litigation ) associated with bringing the lawsuit are much less than the anticipated upside of winning his case. Similarly, the defendant has also made a determination that the cost of settling the case is too high when compared to the cost of prevailing on the merits of the case. In other words, it will be cheaper in the long run to pay my attorney and successfully defend the case than to just pay the plaintiff what he or she is asking. But what if each party had to consider paying the legal fees and costs of the other?

How the Offer of Judgment changes everything

In NJ if a litigant serves an Offer of Judgment on an opposing party for a specific monetary amount and the other party refuses, the refusing party may be responsible for all of the other party’s legal fees and costs incurred after the Offer of Judgment was made. Let’s take a closer look.

• Timing and Manner of Making and Accepting Offer — Any party may serve on the other party an Offer of Judgment so long as it is served at least 20 days before the actual trial date. The offer is not valid unless it is for a specific dollar amount. In addition, the issues set forth in the case must only be monetary in nature. If this is not the case, the Offer of Judgment rule does not apply. Acceptance of an Offer is made by filing an Notice of Acceptance with the court. This must be done on or before the 10th day before the actual trial date or another Offer is made. If a party makes another Offer, the previous Offer is deemed withdrawn. The making of a counter-offer by an adverse party does not make the initial Offer deemed withdrawn.
• Consequences of Not Accepting Claimant’s Offer — If the Offer of a claimant is not accepted and the claimant obtains a monetary judgment at trial that is 120% of the Offer that was NOT accepted, then the Claimant is entitled to, in addition to the monetary award he or she won at trial: all reasonable litigation expenses incurred after the offer was made plus interest at the rate of 8% per anum and all reasonable attorney’s fees incurred in connection with collecting on the judgment.
  • Example — Claimant makes an offer of $1,000 and the offer is rejected. If the plaintiff is awarded the sum of $1,200 or greater, the defendant will be responsible for the plaintiffs attorney fees, interest and costs of collection as set forth above.
• Consequences of Not Accepting Offer Made By Party Not a Claimant — If a party who is not a claimant makes an offer (the defendant for example) that is not accepted and is deemed to be “favorable” under the Offer of Judgment rules, then the party not a claimant is entitled to all of the remedies the claimant is entitled to as set forth above. A favorable outcome is defined as an amount that is 80% of the Offer or less.
  • Example — Defendant makes an offer of $1,000 and the offer is rejected. If the plaintiff only receives an award of $800 or less, the plaintiff , even though he may have “won” the case, will still be responsible for paying the plaintiff’s legal fees.

Take Away

The take away here is that the Offer of Judgment Rule was designed to force litigants to take realistic looks at their cases and properly evaluate what they are worth. The failure to do this if an Offer is made can be disastrous when you factor in not only attorneys’ fees but the costs of experts as well. Judges have very limited, if any, discretion if this rule is invoked. If invoked, fees and costs must be awarded if made timely. The only discretion is that the attorney fees must be reasonable. Please feel free to call any of the attorneys with Danziger Shapiro, P.C. to discuss your case and other issues affecting you or your company.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

If you are reading this then one of two things have probably happened. You have a business relationship with another person or entity that is taking advantage of you and you need to change it immediately. You were just served with a complaint that provides a response deadline. In either scenario, you should hire a lawyer to protect your interests. But when do you this? How do you do this? Do you even know any lawyers? What if I choose the wrong lawyer? How do I hire the right lawyer? Lawyers are intimidating and jerks (so I have been told). These questions and statements are very common when I meet clients for the first time. Knowing this, I have always wanted to prepare a cheat sheet that clients can refer to help them navigate the very unfamiliar process of how to hire a lawyer.

Step 1. Be proactive – Start Your Search and Do Not Wait to Hire Your Lawyer

If you were served with a complaint and do not respond before the indicated deadline, the plaintiff (the person who filed the complaint) can ask the Court to enter a default judgment against you. Do not wait until the last day to reach out to hire an attorney. It is always a better strategy to meet with an attorney (or with several attorneys) as soon as possible so you can see if you can work together. The quicker you start your attorney search, the quicker you will hire an attorney. Do not wait. This only leaves you with less time to choose the best lawyer for you. So, where do you begin?

1. Do you know any attorneys in your family? If you do, ask them if they know anyone who you should hire for your specific situation.
2. Ask your friends for recommendations. Your friends are tremendous sources of credible information. They will tell you who they like and also just as important, who they did not like. Most of our clients in fact come from the recommendations of friends and family members, current clients, and believe it or not, the families of my children’s friends.
3. Google. There is nothing wrong with going online and doing your own research to see who you should hire. Even if you receive recommendations, go online and see if there are any reviews. Be sure to check both the firm’s website and its presence of Facebook. See if there any online reviews, positive or negative. Has the attorney written many articles? Check if there is a blog. In today’s online society, there is a tremendous amount of information that can be learned before you even meet face to face.

Step 2. The Initial Consultation

Now that you have selected the attorney you want to meet, you need to schedule a consultation. Chances are you will wind up talking to the attorney’s assistant. Pay close attention to how you are treated. At this point you are both learning about each other. While your lawyer and his/her staff should always be polite, it is a very bad sign if the person you are talking with is rude at the very beginning of the relationship. The initial meeting should also be free – while many attorneys charge for the initial meeting, in my humble opinion this is a mistake. This is an opportunity for both sides to meet each other and find out whether they can work together. In addition, I have found that if the initial meeting is not a billed event, my client’s relax and I find out more information. Understanding a client’s case from the outset is preferable and only possible if my clients are comfortable.

Documents

Please make sure to bring all the relevant documents with you to the meeting. While your lawyer’s assistant may not be able to give you answers to legal questions, ask him or her what documents you need to bring to the meeting. It is an even better sign if she asks you what documents you have – in addition to the complaint. This is a sign of an actively engaged staff that cares about everyone’s time. If you come to the meeting to discuss a complaint concerning a partnership dispute, the meeting will be more valuable to everyone involved if the complaint and partnership agreement was in front of everyone. Many times I have been in an initial client meeting but the potential client has forgotten the agreement. All is not lost in these situations but it is certainly a better use of everyone’s time if the right documents are brought to the initial meeting.

Confirm who will be handling your case and communication

Please remember that this is your case and your livelihood is at stake. Do not be shy. Specifically ask who will be handling your case? You do not want to meet with one attorney but have your case handled by a different attorney. Will the attorney who is handling your case be the same attorney who actually goes to court? Make sure the lawyer you retain is the lawyer who will be working on your case. The day to day prep work for a case involves a different skill set from a trial attorney. Trial attorneys regularly appear in court. Litigation attorneys prepare cases for the trial attorneys. Find out who you are working with and what skill set they have. Also, how will the attorney communicate with you. Email, phone calls? What documents will be sent to you? Will you be included on strategic decisions? Do not be a pacifist. This is your case. Be an active participant but don’t get in the way either. Listen to your lawyer and recognize that he or she has traveled this path before. Do not confuse your Google search for a law degree and actual experience!

Experience

Experience counts. Treat this as your time to interview the attorney. Don’t be shy. Has the attorney handled this type of case before. When was the last time they were in court? What is their typical litigation strategy? This is a trick question. There should not be a typical strategy. Beware of a scorched earth approach. While this sounds good up front, we are going to war etc…. the only certainty is increased legal costs. Of course there always is a time and place for everything and sometimes scorched earth tactics are necessary (for example injunctive relief) . However, just filing preliminary objections to a complaint because you can is often times a waste of money.

Billing, Costs and the Retainer

Make sure you find out the billing arrangements before you hire your attorney. How does the attorney bill? Hourly, contingency or flat fee? You will find most attorneys will not take a commercial litigation case on a contingency basis except in exceptional circumstances. Find out what the hourly rate is for each attorney who will be working on your case. How often will bills be sent? Monthly, every two months? What happens when two attorneys meet to talk about your case? In most cases, if two attorneys each bill $400 an hour you will be charged $800 if they talk for one hour. I take a different approach. I run my law firm as a small business where you are renting my time. If I need to meet with my colleague for an hour to discuss your case, you will pay for my time but not my colleagues. However, if we are both working on a part of your case in order to meet a deadline, then you will be billed for both of our time but merely having interoffice meetings -you will never be double billed.

Be sure to ask about costs. Will the attorney you hire pass along his costs? Typical costs that attorneys pass onto clients are copy and postage charges, overnight fed ex charges, computer assisted research charges. These are hidden profit centers for law firms. These extras can add up and you need to know how they are being handled before you hire your attorney. Along the lines discussed above, I run my firm like a small business and view this as my overhead. I keep my costs in house and do not pass them along to my clients. There are always exceptions (for example overnight mail to 5 locations) but for the most part if I have to do computer research or overnight something this will not be passed on to you. And when I take you to lunch, you will NEVER see the lunch as an expense on your bill!! Don’t laugh, this happens. Costs that are passed on are filing fees, services charges, depositions costs. Direct out of pocket charges directly related to your case.

You also need to understand what a retainer is and how it works. There is a distinction between the retainer agreement and the retainer amount. The retainer agreement is a written contract between you and the attorney you choose to hire. It usually takes the form of a letter that you sign at the bottom that you agree to be bound by the terms set forth in the letter. Occasionally the letter will incorporate other terms set forth in an enclosed form document titled “Terms and Conditions.” The retainer amount is how much money you agree to pay up front that the attorney will bill against at the end of the month. This money is held in a separate account from the attorney’s business operating account. If the agreed upon retainer is $5,000 and you were billed 2 hours at $500 per hour the attorney will take $1,000 from your retainer account and the going forward balance will be $4,000. It is also important to understand what happens to the retainer when it is exhausted or used up. Are you required to replenish it? Are you required to bring it back to the initial agreed upon amount at the beginning of every month? This is known as an evergreen retainer. Or does the attorney move away from the retainer and just go to monthly billing? This is the approach I like to take. It demonstrates trust and a willingness to work with the client. Of course if this path is chosen, do not be surprised if a retainer is reinstated if you fall behind. Also retainers are commonly reinstated right before trial and to cover deposition and transcript costs. If you would like to review a few sample retainer agreements from the PA Bar Association, please click here.

Closing Thoughts

I hope these thoughts are helpful and provide insight into the process of how to retain a lawyer. If I could just pick one closing thought to remember it would be, don’t be shy. If you think about it, this is your case and if you are not shy about it you will want certain information answered so you can make an informed decision. In a pinch however, you can always keep this folded in your pocket. If you have any questions regarding this post, or perhaps want to talk about your case, please feel free to call me, Douglas Leavitt. I am one of the attorneys at Danziger Shapiro, P.C. and I would be happy to discuss your case with you.

This entry is presented for informational purposes only and does not constitute legal advice.

A recent court decision from the Philadelphia Courts should cause anyone with a commercial lease to review their contracts. The issue in this case required the court to determine if a confession of judgment clause in a commercial lease was enforceable. The Court ruled the confession of judgment clause was not enforceable against the tenant because the landlord did not strictly follow the statute. As a result, the Court struck down the confessed judgment. While not ground breaking in and of itself, the opinion serves as a reminder that a court will closely scrutinize all confessions of judgment. You can read the court’s decision by clicking here. Before we look closer at the court’s decision, a basic understanding of what a confession of judgement is and why it is so powerful is required.

What is a confession of judgment?

A confession of judgment clause is usually found in most commercial lending transactions and commercial leases. In a nutshell, a confession of judgment clause flips our notion of due process on it head. A confession of judgment clause authorizes the attorney for the bank or landlord to appear for the borrower or tenant without any notice and enter a judgment for a specific amount of money (or for possession of the premises in a lease situation). Think about this for a second. The first pleading your lender serves is the paper that informs you a judgment was entered against you. Game over. Or is it?

Courts Disfavor Confessions of Judgment – Deprivation of Due Process

Courts generally disfavor confessions of judgment because they deprive defendants from their constitutional due process rights. More to the point, it takes away the right to have your day in court. There is no due process with a confessed judgment. As a result, a court strictly scrutinizes a confession of judgment clause to make sure sure all of the required steps are followed by the parties to the contract. However, if all of the rules are followed, two parties can contract away the right to notice and a hearing before the entry of a judgment.

Confession of Judgment Basic Requirements

Conspicuous Location Required

The confession of judgment is one of the most powerful clauses that exist in a commercial contract. As a result, courts routinely examine not only the words of the confession of judgment, but also location and font style of the confession text. To pass judicial scrutiny, a properly drafted confession of judgment must be in a conspicuous location. In other words, a confession of judgement cannot be buried among the terms of the contract. The clause must be set apart and stand out. Courts look for confession clauses that are in bold case, all caps, and have a prominently titled heading. Practice Point: Look carefully at your contract, whether you are just signing or it has been in effect for awhile. If the confession clause is “hidden” in any way, it may not be enforceable. Contact our firm or other legal counsel to take a look.

Information and Procedural Requirements

A complaint must contain the information set forth by Rule 2952 of the PA Rules of Civil Procedure. If your complaint does not contain this information, the court will not enforce your confessed judgment. At a minimum, the complaint must include the following information and follow the below procedural requirements :

• The name and last known address of all parties
• A copy of the document that authorizes the confession – also known as the warrant of attorney
• A statement that judgment has not been entered in another jurisdiction
• A statement that the judgment is not being entered against a person in a consumer credit transaction
• A statement that an event of default has occurred and demand has been made as required by warrant
• Itemization of amount due
• Required signatures and verification
• Comply with New Power of Attorney Act (discussed below)

While there are other requirement and procedural hurdles, this list gives you a flavor of what is involved.

Why the Court Struck Confessed Judgment

In this case, the Philadelphia judge struck the confessed judgment because it was not conspicuous. The Court found the confession to be buried, hidden and was written in small font. The amendment also failed to specifically set forth the confession clause itself. Rather, the amendment just referred to the terms set forth in the original lease. While this will successfully incorporate most terms, it will not incorporate a confession of judgment clause. This Court held that the lessee’s signature on the amendment did not bear a direct relation to the warrant of attorney. The warrant of attorney was in the original lease and not in the amendment. As a result, the confessed judgment was struck open. The Court’s logic makes sense. If the confession clause is not on the lease amendment itself, can it be a knowing waiver? If it was not a knowing waiver, it was hidden and not conspicuous.

New PA Power of Attorney Act

Earlier this year we pointed out that PA’s power of attorney law underwent significant changes. Click here to read the earlier post on this blog. It is important that the warrant of attorney contains the necessary agent disclaimer language so it does not violate Section 5601.3(b) of the new act. This section requires that an agent must take action only for the benefit of his/her principal. In the context of a warrant of attorney, we all can agree that entering a judgment against your principal is clearly not in the best interest of your principal.

Confession of Judgment

The practical take away is that a confession of judgment and your commercial lease in general may not be all that it seems. If your lease contains a confession of judgment, the landlord is required to follow rules regarding not only the specific wording of the clause, but also to the exact placement as well. Failure to take both aspects of the confession into account could make their confession clause vulnerable in litigation. Doug Leavitt and the attorneys at Danziger Shapiro, P.C. are available to assist you in connection with preparing or reviewing your transactions documents. Please call us for a consultation to discuss your concerns. We look forward to hearing from you.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

In practice however, the episode shows an entirely different contractor who is not licensed in North Carolina. A scaled down and subpar version of the original plans was completed.

The homeowners have since filed a lawsuit in Durham County Superior Court asserting claims for breach of contract and deceptive trade practices. The lawsuit contends that the work completed was shoddy and left the home “irreparably damaged”, with holes in the floor, low grade supplies, windows painted shut and more. It also questions why payments were not distributed as agreed to in the original contract as well as Big Coat TV’s use of unlicensed professionals. Instead of the couple paying for their renovation with a licensed contractor and having it filmed for a television program, they essentially paid for a set to be built that benefits the show and its advertisers that leaves this family with a potentially uninhabitable home.

Pennsylvania has similar laws in place to protect the owners of real estate from poor construction. When the quality of the workmanship differs from what was promised under the contract to such an extent as alleged in complaint against the Love It or List It show on HGTV, you have in addition to claims for breach of contract a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law – also known as UDAP. What is great about UDAP from a plaintiff’s point of view is that if you are successful, a judge, in his or her discretion, may award up to three times the amount of damages sustained plus reasonable attorneys’ fees. This last part is a great hammer to use in negotiations.

While at first glance you may ask yourself what does this have to do with me because I am not on a TV show or I am a commercial landlord. The answer to both is plenty. First, whether you are a residential or commercial land owner, make sure your contractor is properly licensed to do business in your state. Second, make sure the construction agreement is clear on what is to be done and by whom. Stated differently, make sure your contractor is either not using subcontractors or if it is, make sure you know what subcontractors it is using. Third, never get ahead in payments. Be wary of the contractor that asks for money upfront to buy the materials for your project. If the contractor does not have sufficient funds available, you might find yourself funding the costs associated with the contractors’ prior project. Sounds crazy but this is a very common occurrence. And finally, be present and observe what is happening during the project. Once the walls go up and the studs are covered, you no longer know what has or has not been done. While this may not be practical for you due to either time, location or cost of the project, perhaps it might make sense to consider retaining a construction manager to oversee the project and make sure it is completed timely, on budget and according to the specifications set forth in the plan.

The attorneys at Danziger Shapiro, P.C. are available to assist you in connection with your residential or commercial real estate project. Whether it is in reviewing or creating transaction documents that will enable you to acquire, develop or improve real estate or bring a lawsuit against your contractors for faulty construction, Danziger Shapiro has done this before and can help you today.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

The Act starts off by identifying five distinct circumstances when personal property remaining on leased premises may be deemed abandoned.

(1) The tenant has vacated the unit following the termination of a written lease.

(2) An eviction order or order for possession in favor of the landlord has been entered and the tenant has vacated the unit and removed substantially all personal property.

(3) An eviction order or order for possession in favor of the landlord has been executed.

(4) The tenant has provided the landlord with written notice of a forwarding address and has vacated the unit and removed substantially all personal property.

(5) The tenant has vacated the unit without communicating an intent to return, the rent is more than fifteen days past due and, subsequent to those events, the landlord has posted notice of the tenant’s rights regarding the property.

If any of the five (5) situations described above applies, the property will be deemed abandoned. Before a landlord may remove or dispose of abandoned property, the landlord must provide written notice of the tenant’s rights regarding the property. The written notice will look very similar to this:

“Personal property remaining at [address] is now considered to have been abandoned. Within 10 days of the postmark date of this notice, you must retrieve any items you wish to keep or contact [name of landlord] at [telephone number and address] to request that the property be retained or stored. If you request that we store your abandoned property, we will do so for up to 30 days from the postmark date of this notice at a place of our choosing, and you will be responsible for costs of storage.”

Under the Act, the landlord is required to exercise ordinary care in handling and securing the tenant’s property. In addition, the Act requires that landlords provide tenants with reasonable access to retrieve their property.

These are the basic rules of the game. If a landlord violates these rules, the Act provides that the tenant is entitled to treble damages and attorneys’ fees. Additionally, to the extent there is an inconsistency between the Act and the terms of a written lease, the terms of the written lease control. With any law, there are always exceptions and this Act is no different. For example, there is a different notice period if a protection from abuse order is in effect. If the tenant has died the Act does not apply at all and disposition of the personal property owned by the decedent will be governed by the laws and jurisdiction of the Orphans’ Court.

The take away here if you are a landlord is really quite simple. If you don’t like any of the definitions of abandoned property or the manner in which you are required to store it and how costs will be allocated-change it. The Act gives you this right so modify your lease to set forth how you want to deal with this issue. If you have any questions regarding this or any other aspect affecting your real estate portfolio, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and does not constitute legal advice.

From an officer or director’s point of view in light of the Yates Memo, they need to take a critical review of the indemnity provisions that are currently in place. By this I mean, what is their employer’s obligations to them if the officers, directors or even high level employees are accused of corporate wrongdoing by either an outside entity like the Justice Department, a disgruntled shareholder in the form of a derivative lawsuit, or perhaps even an internal company investigation? Hiring an independent lawyer to protect your interest in any of these situations is expensive so it is better if the company will pay your legal expenses and even better if your company will advance your legal expenses. Click here for a blog entry I wrote two months ago that explains why it is important to have your own lawyer represent you during these investigations.

To determine what your company will or will not indemnify requires a review of the company’s by-laws. Additional places indemnity provisions can be found are in an employment agreement and not surprisingly, an indemnity agreement. The best protection for an officer or director is actually to have a separate indemnity agreement. Too often I see my clients come to me with their problems but say, “I am not worried, I have indemnification. Look at the by-laws I brought.” Don’t get me wrong, this is a good start, but that is all it is. Do the by-laws require indemnification or is it permissive and require a vote of the board of directors? Even if it is required, are legal fees advanced or only paid after you are found not to have violated your fiduciary duties? Even if the by-laws state it is required and legal fees are to be advanced, what is the process for advancing legal fees? Will the company and its insurance carrier be able to hide behind a convoluted process to delay payments? Does the employer have the ability to restrict your choice of counsel? As you can see there are a myriad of issues even when it seems clear. Even if you have D&O Insurance, keep in mind that the carrier’s policy has exclusions. For example, a typical D&O policy will not cover attorneys’ fee in an internal corporate investigation. Also, D&O policies change year to year as companies are always shopping for better prices so what coverage you have in year one may not be what you have in year two and beyond. However, a well drafted indemnity agreement will require the company to cover all expenses, including legal, incurred in connection with your position as an officer or director of the company to the fullest extent permitted by law and will not change in scope from year to year. These are big differences.

The takeaway – As an employee or an employer review your by-laws, employment agreements and D&O policies and indemnity agreements if you have them. Perhaps it is time to change your by-laws to make what once was permissive indemnification to mandatory? Alternatively, perhaps you only want to offer mandatory indemnification to certain individuals so indemnification agreements are the better approach? If you are an employee, you may want to negotiate for additional protections when the opportunity arises. Whatever course of action you decide, please feel free to call one of the attorneys with Danziger Shapiro, P.C. to discuss this and other governance issue affecting you or your company.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

The SEC tried to argue that because the smartphone was not the defendant’s personal property but rather the property of his employer, combined with the fact that the documents the SEC were interested in reviewing were company records, the employee was more akin to a custodian of records. Based upon this, the SEC argued that compelling the employee to produce his passcode was not a communication subject to the Fifth Amendment. The Court did not buy into the SEC’s argument.

The Court stated that the SEC’s reliance on the underlying documents was misplaced. The application of the Fifth Amendment does not turn on the nature or character of the underlying documents but rather on the production of the documents themselves. In this case, the production of the documents required testimony (in that he needed to provide the password) and could not be characterized by a “physical act”. The Court stated that where an act requires the use of the contents of a person’s mind or personal thought process… it cannot be “fairly characterized as a physical act”. Based on this, the Court held that the Fifth Amendment was properly invoked to preclude the defendant from being ordered to provide his passcode to his company smartphone.

Query how this holding would apply if the passcode had been a fingerprint ID scan? Smartphones, IPads and similar electronic devices have this security option (touch ID technology) as well. Swiping a thumb print in not the same as one’s “thought process” and would not require testimony. Applying the Court’s logic in the instant case seems to suggest that this Court would compel the defendant to produce the sought after records and not allow the invocation of the Fifth Amendment. However, this seems out of sync with the history behind the Fifth Amendment. Unfortunately what I think didn’t stop a court in Virginia last November from deciding just that. Namely, a finger swipe for a password was not entitled to protection by the Fifth Amendment. Time will tell what different courts will decide as technology advances. If you have any questions, please feel free to call one of the attorneys with Danziger Shapiro, P.C. to discuss this and other self-incrimination Fifth Amendment concerns in greater detail.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

The grand jury is a group of individuals as a collective legal body whose function is to determine if criminal charges (an indictment) should be brought against a particular person or entity. Federal grand juries are comprised of between 16-23 individuals. What happens in a grand jury is kept secret. This is done for two purposes. First, it encourages witnesses to talk freely. Second, if the grand jury decides not to indict, the potential defendant’s reputation is not harmed. There is no judge in a grand jury and thus it is more relaxed than a typical court room. The prosecutor will explain the law to the grand jury and present witness testimony and exhibits for the jury to consider. The rules of evidence that pertain to the introduction of exhibits and testimony are relaxed at this stage and the grand jury has the ability to see and hear much more than what a typical jury would be allowed to consider. The prosecutor is able to compel individuals to give testimony at the grand jury by serving a subpoena-an Order of the Court that compels the individual to appear and testify. Remember, the grand jury does not decide guilt, but only if the prosecutor should bring the criminal charges in the first instance. The jury in a criminal trial is different group of individuals from the grand jury and the jury trial typically does not have the ability to consider everything the grand jury did.

TARGET

There are three different types or classifications of grand jury witnesses: Target – Subject- Witness. If you receive a letter in the mail from the Department of Justice (DOJ) that you are a target, you have been formally notified by the DOJ that they intend to call you before a federal grand jury to testify regarding criminal activity the DOJ believes you participated in. You need to immediately contact a white collar criminal defense attorney. This is very serious and you need to take immediate steps and take action to protect yourself. Chances are the government has been investigating the criminal activity at issue and you for months and possibly years. The absolute worst thing you can do is pick up the telephone and call the DOJ believing you can explain to them why this is a mistake. Please resist the urge to pick up the phone and call them! Most likely, anything you say to the U.S. Attorney will be used against you and you are more likely to hurt your case than help. Contact a white collar criminal defense attorney and follow their directives.

Below is a sample target letter taken right from the U.S. Attorneys’ Criminal Resource Manual:

This letter is supplied to a witness scheduled to appear before the federal Grand Jury in order to provide helpful background information about the Grand Jury. The Grand Jury consists of from sixteen to twenty-three persons from the District of ___. It is their responsibility to inquire into federal crimes which may have been committed in this District.

As a Grand Jury witness you will be asked to testify and answer questions, and to produce records and documents. Only the members of the Grand Jury, attorneys for the United States and a stenographer are permitted in the Grand Jury room while you testify.

We advise you that the Grand Jury is conducting an investigation of possible violations of federal criminal laws involving, but not necessarily limited to _______*. You are advised that the destruction or alteration of any document required to be produced before the grand jury constitutes serious violation of federal law, including but not limited to Obstruction of Justice.

You are advised that you are a target of the Grand Jury’s investigation. You may refuse to answer any question if a truthful answer to the question would tend to incriminate you. Anything that you do or say may be used against you in a subsequent legal proceeding. If you have retained counsel, who represents you personally, the Grand Jury will permit you a reasonable opportunity to step outside the Grand Jury room and confer with counsel if you desire.

Cordially,

If you receive the “target” letter the U.S. Attorney believes that there is substantial evidence linking you to a crime. However, with skillful lawyering it is not inevitable that the receipt of a target letter results with your indictment.

TARGET versus SUBJECT

If you are the subject of a grand jury investigation you have been identified by the U.S. Attorney as someone who has information that would be helpful to the U.S. Attorneys’ investigation. One’s status may change from “subject” to “target” during an investigation so do not take it lightly if you are called before a grand jury to testify as a subject. A quick way to elevate your status from subject to target is to destroy evidence or lie to the U.S. Attorney. This is what is referred to as obstruction of justice and will not help you in any way.

WITNESS

The third category is that of a “witness”. A witness is someone who the government believes has helpful information but did not do anything wrong. Think of the person walking on the sidewalk and sees a bank robber leaving the bank. While in all likelihood you will be fine, but you don’t want to have something you say misinterpreted.

If you are the target, subject or witness of a grand jury investigation, please call our offices. The attorneys at Danziger Shapiro, P.C. will be happy to discuss the grand jury process with you and explain what options you have going forward. Call us and do not make the mistake of contacting or meeting the U.S. Attorney without your attorney present. We will not charge you for our initial meeting and want to help.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

If you find yourself in the situation where you are about to be interviewed in connection with a company investigation you need to ask yourself two questions. Do I need a lawyer? Who pays? If you truly played no role in what the company is investigating you don’t need a lawyer. However, if you are a key insider who has information that will shed important details on what transpired you certainly would want to retain your own lawyer. There are many reasons why and I will address them below.

First, consider that earlier this year the Department of Justice set forth a Memorandum that identified that it would go after the individuals responsible for corporate wrongdoing and work its way inward towards the corporate hub. In addition, Justice conditioned any corporate cooperation credit that a corporation could hope to receive would be conditioned upon the disclosure of all corporate wrongdoings and all of the individuals that performed them. Think about this for a second. If the company you are working for is the subject of an investigation and wants in effect what is leniency in its “corporate sentence,” it must turn you over to Justice.

Second, before any interview begins, you must understand that the lawyer is NOT YOUR LAWYER. The lawyer is the company lawyer and therefore there is no guarantee that what you say will remain confidential. To avoid an employee raising an allegation that the interviewing attorney has a conflict of interest because the employee believed that the attorney was also representing him, all interviews begin with the Upjohn Warning.

The Upjohn Warning originated from a case before the United States Supreme Court. The Court found that while there is an attorney client privilege covering communications between counsel and the employee, the privilege belongs to the employer and not the employee. Therefore, the employees or key insiders always run the risk that the company will waive the privilege and share the results of the interview with government investigators and/or prosecutors. In fact, based upon the recent DOJ Memo discussed above, you can almost be certain that what you say will be turned over to the appropriate authorities.

In 2009 the ABA White Collar Crime Committee produced a sample Upjohn Warning. It reads as follows:

I am a lawyer for or from Corporation A. I represent only Corporation A, and I do not represent you personally.

I am conducting this interview to gather facts in order to provide legal advice for Corporation A. This interview is part of an investigation to determine the facts and circumstances of X in order to advise Corporation A how best to proceed.

Your communications with me are protected by the attorney-client privilege. But the attorney–client privilege belongs solely to Corporation A, not you. That means that Corporation A alone may elect to waive the attorney-client privilege and reveal our discussion to third parties. Corporation A alone may decide to waive the privilege and disclose this discussion to such third parties as federal or state agencies, at its sole discretion, and without notifying you.

In order for this discussion to be subject to the privilege, it must be kept in confidence. In other words, with the exception of your own attorney, you may not disclose the substance of this interview to any third party, including other employees or anyone outside of the company. You may discuss the facts of what happened but you may not discuss this discussion.

Do you have any questions?

Are you willing to proceed?

Now, very simply put, if you are a key employee and receive this warning placed in front of you and are asked to sign it, don’t you think you might want your own attorney present during this interview?

Obviously retaining your own independent lawyer can be expensive. However, in certain instances the company may or even be required to advance you the attorneys’ fees you incur. For instance, the company by-laws might require the advancement of your legal fees if you are an officer or director subject to repayment if it is found that you committed fraud. Other times such advancement of legal fees might be required under your employment agreement. Understandably it is certainly better to have an advancement of legal fees subject to repayment rather than a reimbursement of legal fees after a determination that you did not commit fraud. Whether or not you have one outcome or the other may very well depend on if you had competent counsel assisting you at the times these documents were created.

There are countless more issues to consider that are beyond the scope of this short article. If you should find yourself in the situation where you are going to be interviewed in connection with a company investigation, please feel free to call us at Danziger Shapiro, P.C. We would be happy to discuss your situation and develop a plan to minimize your exposure.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

This short conversation raises two of the most common mistakes made by early stage companies when they try and raise money. First, a company may not offer or sell its securities to third parties unless the securities have first been registered with both the SEC or there is an exemption from registration that applies. If you don’t make the required filings, you are exposing yourself to serious consequences that include not only an investor’s right to rescission (get their money back) but also fines, penalties and criminal actions against you on an individual basis. Most start-up or early stage companies can avoid this by making the appropriate filing under Section 4(2) of the Securities Act of 1993 and the corresponding safe harbor provisions under Regulation D. There are also corresponding state law security filings too under state “Blue Sky” laws. The point here is that the security laws are complicated and you should not play “security lawyer.”

The second problem mentioned in the scenario described above is that my friend paid a finders’ fee to an unregistered broker-dealer. If the “consultant” was a registered broker-dealer and my friend otherwise made the appropriate Reg D filings he would have been fine. However, by providing compensation to an unregistered broker-dealer, my friend was also violating Section 29 of the Exchange Act which also provides for among other things, the right of rescission. Paying finders’ fees to unregistered broker-dealers has been a recent hot topic for the SEC and the Reg D form filing was updated in 2008 to specifically request information directly to this point (See Item 12 of Form D).

The take away here is that raising capital requires compliance with complicated securities laws. Entrepreneurs can avoid running into these issues by focusing on what they know best, their company, and allowing their lawyers to assist them so they do not make mistakes that are all too common in the capital raising world. If you have any questions regarding this or any other aspect affecting your business, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

While this may be common practice stateside to grant a favor to a valuable customer by employing his son or daughter, to do so when a foreign official is involved violates the FCPA. The FCPA does not allow a company to influence a foreign official by giving the official “anything of value”. Value is broadly defined and includes cash, gifts, favors and apparently, internships too. While at first blush, this may seem to be a “small favor”. However, the FCPA does not distinguish between “small” or “large” favors only that anything of value were given. In addition, the broadly written FCPA covers any “department, agency or instrumentality” of a foreign government. The foreign wealth fund identified above fell under the “agency or instrumentality” rubric because it was controlled by a foreign government notwithstanding that it operated like any other investment company.

Once again this shows the importance that it is not enough just to have Code of Conduct Policy or an Anti-Corruption Policy without the proper training of the right people in your organization. Training needs to focus not only on the basics but also on the hidden dangers. For example, do changes to the employment application process need to be made? Should an applicant certify that he or she has not been employed as a foreign official or that they do not have a relative or a close personal friend who is a foreign official? If the answer to the foregoing is yes, a strong anti-corruption policy will flag the applicant for further in house review (or legal department) to make the correct determination. This is not a question of discrimination against certain applicants but rather that the correct questions or sensitivities are being looked into so your company does not run afoul of the FCPA. In any event, the point is that your employees need to be trained to look between the trees and make the right determinations when a more nuanced review is needed. The cost of failing to do this is too high and the SEC is bringing the heat.

If you have any questions regarding this entry or the FCPA in general, please feel free to contact us at Danziger Shapiro. We will be happy to discuss your concerns and assist you with this or any other matter affecting your business.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

Under Pennsylvania tort law, libel is defined as “a maliciously written or printed publication which tends to blacken a person’s reputation or expose him to public hatred, contempt or ridicule, or injure him in his business or profession.” Specifically, in an action for libel a plaintiff in Pennsylvania has the burden of proving each of the following:

1. The defamatory character of the communication;
2. Its publication (communicated to a third person) by the defendant;
3. Its application to the plaintiff;
4. The understanding by the recipient of its defamatory meaning;
5. The understanding by the recipient of the communication as intended to be applied to the plaintiff;
6. Special harm resulting to the plaintiff from its publication; and
7. Abuse of a conditionally privileged communication.

I don’t want to get into the intricacies regarding each above element and corresponding defenses and privileges (for example, truth is an absolute defense to any defamation claim or that defamatory statements are allowed in company employee reports). However, I think it is important to recognize that the Judge in this contractor case merely applied the tried and true law of defamation of character in written form and found that the customer defamed her contractor. The mere fact that her “opinion” was posted online did not relieve her of any responsibility for not violating the laws of libel.

In his ruling, the Judge said that her post was “opinion and protected speech,” but several of her comments crossed the line from opinion to libel. “Terms such as ‘scam,’ ‘con artist’ and ‘robs’ imply actions approaching criminal wrongdoing rather than someone who failed to live up to the terms of an agreement,” the Judge said.. While I am sure this case will be appealed, the take away here is be sure not to cross the line when you post anything online. Your opinion is protected free speech but if you go too far, you may be held responsible for your actions. From a business owner perspective, have someone regularly review Yelp and FaceBook and other online forums to see if anyone is posting reviews that might damage your reputation. However, remember that if a review is negative does not mean it is defamation if it is couched as an opinion instead of as a fact.

If you have any questions regarding this topic or any other issue affecting your business, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and does not constitute legal advice

In this case, the New Jersey Appellate Court refused to enforce the mandatory arbitration provision in the employee handbook and stated in part, “the plain language in the handbook the defendant drafted shows, with unmistakable clarity, that Employer did not intend the handbook to create a binding agreement”. The Court went on to state “The employee handbook cannot be a binding agreement with respect to the arbitration provision, and an unenforceable document merely containing “management guidelines” for the rest of its provisions.” Click here to read a copy of this opinion.

In addition to the wording of the handbook being one of the main reasons the Court refused to enforce the arbitration provision, the Court also set forth other “problems” with the handbook that should serve as a guide to HR and in-house legal departments so their handbooks don’t suffer the same fate.

The arbitration waiver must spell out the rights that are being waived. Courts look closely when the constitutional right to bring an employment matter in court is being waived by an employee. Does the waiver spell out the rights being waived? Does the employee understand that he or she is giving up the right to have the case heard by a jury or whether this covers discrimination and other types of claims?

Additionally, there is the matter of the procedure set up by the employer being sufficient to show that the employee unmistakably agreed to arbitrate. Email consent is not enough – where the employee just clicks or agrees that he or she has received a copy of the handbook. Get the employee’s signature to show the employee agreed to the mandatory arbitration provision – assuming you have cured the other issues set forth above.

This case has broad reaching implications and not just in New Jersey. The provisions that caused this failure are common boilerplate protective provisions that are found in most employer handbooks (even if it was drafted by counsel) and therefore makes this cautionary tale relevant to every employer. I also believe this provision will may apply to covenants not to compete and non-solicitation agreements to the extent they too are set forth in employee handbooks and not in separate employment agreements signed by the employee. Be careful however, because merely placing such an agreement in front of your already employed employees to rectify the handbook issue will not work. While the reasons why are beyond the scope of this post, please click here to review an earlier post that addresses these issues.

If you have any questions regarding this employment issue or any other matter affecting your business, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and does not constitute legal advice.

In contract law, when party fails to perform according to the terms of the agreement it is viewed as a breach of contract. However, sometimes there are justifiable reasons that will allow or excuse a party from performing according to the terms of their agreement. For example, when Hurricane Sandy destroyed most of the hotels along the Jersey Shore, these hotels were excused from liability based upon their failure to provide accommodations or being able to host wedding receptions. In essence, an act of God may be interpreted as a defense for failure to perform based upon impossibility or impracticality. So I ponder, is the Pope being in Philly the ultimate Act of God defense.

If you have any questions regarding your legal obligations under a contract you are a party to or any other issue affecting your business, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and does not constitute legal advice.

So what is EMV technology and how does it work? Have you ever noticed on your new credit card that there is shiny silver square? This is a computer chip and it produces a code that EMV compliant credit card terminals must receive in order to authorize the trasaction. You will no longer “swipe” your card but rather insert it into the terminal. The code will be constantly changing making fraud much harder to occur. In addition, some issuers will also require a PIN to confirm the transaction as well. If either your credit card or the merchant’s terminal is not EMV compliant, the card, for now, will work as before by the swipe method. The only thing that has changed is the potential shift of liability. This is not new technology. Europe has been using this technology for years. For more information on EMV technology, click here.

While it makes sense for brick and mortar stores to switch to EMV compliant terminals it is less clear for on-line retailers. Right now major credit card companies are using two different systems for EMV online technology. MasterCard uses its “Chip Authentication Program” or CAP and Visa offers its “Dynamic Passcode Authentication” or DPA. It is very similar to the choice between VHS and Betamax all over again. Which technology will prevail is anyone’s guess at this point. In the meantime, it’s best to understand what’s out there and make an informed decision for your business’ individual needs.

If you have any questions regarding this or any other aspect affecting your business, please feel free to contact us at Danziger Shapiro.

This entry is presented for informational purposes only and does not constitute legal advice.

The Pennsylvania Superior Court was faced with a hospital appealing the order of the trial court to produce minutes of a board meeting where there was a discussion of the malpractice claim that was the subject of the lawsuit. The hospital claimed that its lawyer was present to render legal advice. However, in its response to the production requests, the hospital failed to provide information sufficient to establish if the attorneys were there merely as board members or as legal advisors. Based on this, the trial court ordered production of the minutes. The appellate court reversed the trial court’s decision and gave the hospital another chance to properly invoke privilege for each document it claimed was privileged. The Court specifically stated that it was necessary to identify the attorney by name so that a determination could be made relative to whether the attorney was there as a board member or attorney. If an attorney is there only in the capacity as a board member then the privilege does not apply.

The take away from this case is that when attorneys are present at board meetings it is critical that the minutes document the capacity in which the lawyers are present. Minutes should specifically identify attorneys who are present for the purpose of rendering legal advice. The minutes should also identify when information is being conveyed to obtain legal advice. In this way, even if the entirety of the minutes cannot be claimed as privileged, then a portion of the minutes can still be redacted.

The attorneys at Danziger Shapiro are well versed with how to properly document board meetings and understand that minutes drafted today might be the subject of discovery in tomorrow’s litigation. Please feel free to contact us to discuss this or any other issue concerning corporate governance or pending litigation that might be troubling you.

This entry is presented for informational purposes only and does not constitute legal advice.