When To Call Your Lawyer:

A Seminar for Business Owners & Executives

Presented By: Stefanie R. McNamara, Esq.

Rikki L. Field, Esq.

Annmarie Simeone, Esq.

Andrea S. Glaser, Esq.

Margaret Raymond-Flood, Esq.

Melinda Fellner Bramwit, Esq.

The material provided herein is for informational purposes only and is not intended as legal advice or counsel.

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seminar at the end of the 2

Contract Trouble Spots

Presented By: Stefanie R. McNamara, Esq.

Indemnification

• Contractual Risk Allocation • Scope – typically acceptable – Breach of Agreement – Misrepresentation – Fault – negligence or willful misconduct • Survival • Limits on Liability – Caps and deductibles • Mutual or Unilateral 4

Warranty

• Scope – What is the warranty?

– Narrow - Meets specs – Broad - Fit for purpose intended • Time Frame • Standards – Services – Products/Goods • Remedy 5

Ownership Of Intellectual Property

• What do you own?

– Pre-existing IP – Newly developed IP • What do they own?

• Joint ownership?

• Don’t just give it away!

6

Assignment

• Have a third party perform the contract • Do you need the ability to assign the contract?

• Are you willing to grant the other party the right to assign the contract?

• Any issues with assignment to a competitor?

7

Term And Termination

• Automatic or Evergreen renewal?

• Right to terminate without cause or for convenience • Other rights to terminate needed?

– Force Majeure Event – Increase in price of materials – Breach 8

Restrictions

• Necessary?

• Confidentiality • Non-Solicitation • Non-Compete 9

When Commercial Tenants Should Call Their Lawyer

Presented By: Rikki L. Field, Esq.

Preliminary Comments

• Rights and obligations determined primarily by contract • Most statutory protections available to residential tenants not applicable to commercial tenants,

e.g.

Anti-Eviction Laws and Security Deposit Rights 11

Space Is Too Big Or Small

• Assignment (transfer of entire interest in Lease for the balance of lease term) • Sublease (lease of a portion of leased premises for all or part of remaining lease term) – Tenant becomes sublandlord to subtenant 12

Landlord’s Consent

• Check your lease • Typically, landlord’s consent is required in order to assign lease or sublease leased premises • Some leases provided “Landlord’s consent shall not be unreasonably withheld” 13

What Is “Reasonable”?

• Landlord may only consider matters that are related to ownership or operation of the particular property – Financial solvency of proposed subtenant – Nature and suitability of proposed subtenant’s business for premises and area – Subtenant’s guarantee 14

What Is “Unreasonable”?

• Matters that are not related to ownership or operation of the particular property – Proposed subtenant is a tenant in another building owned by Landlord – Desiring higher rents 15

Other Provisions

• Some leases give Landlord right to recapture • Some leases give Landlord right to all or part of any increase in rent • Usually, tenant remains liable after assignment and/or sublease 16

Landlord Is Refinancing Or Selling Property

• Refinance/Sale of Property – Lender or Buyer may require Tenant Estoppel Letter – Lender may require confirmation that Lease be subordinate to mortgage – Lender may require Landlord to conditionally assign rents 17

Tenant Estoppel Certificate

• Most leases require Tenant to provide certified statement regarding lease within 10 days of Landlord’s request – Both a Lender and a Buyer will want Tenant to verify information regarding the lease terms and Landlord’s/Seller’s compliance with lease obligations 18

Tenant Estoppel Certificate

• Tenant should: – Read Estoppel Certificate carefully – Complete blank sections – Cross-out or change as needed • Estoppel Certificate is binding on Tenant and can prevent Tenant from raising issue later if not noted here 19

Subordination, Non Disturbance And Attornment

• Lender may require that all leases be subordinate to lien of mortgage • Lease may already provide that it is subordinate to all present and future mortgages or require that Tenant subordinate Lease upon demand 20

Subordination And Attornment

• Subordination – Lease is subordinate to Mortgage and may be terminated through foreclosure • Attornment – If Lease is not terminated through foreclosure, tenant shall recognize new owner as landlord under the lease for remaining term 21

Non-Disturbance

• Lease may provide that Tenant’s subordination is subject to Lender’s agreement “not to disturb” • Non-Disturbance agreement – So long as Tenant is not in default, Lender agrees not to terminate lease; lease continues in accordance with its terms 22

Assignment Of Rents

• Rents as Collateral for Loan – In addition to a mortgage, Landlord may have pledged rents as collateral for Loan – If Landlord defaults, Lender may serve notice on tenant to pay rents to Lender – Assignment of Leases should contain authorization to Tenant to pay rents to Lender without liability 23

Defaults

• Holding Over – At end of lease term, if Tenant doesn’t vacate and Landlord accepts, lease by law converts to a month-to-month tenancy – If Tenant doesn’t vacate after notice from Landlord, Tenant liable for double rent (unless Lease provides otherwise) 24

Defaults

• Landlord’s Lien – Landlord has a statutory lien on Tenant’s equipment and other personality for unpaid rent – Landlord’s lien has priority for up to amount equal to 6 months’ rent 25

Damages

• Duty to Mitigate – Commercial landlord must make reasonable efforts to mitigate damages after a tenant breaches lease – Reasonable efforts include listing with a broker and advertising space 26

Damages

• Measure of Damages – Even if a landlord acts unreasonably in failing to mitigate damages, landlord may still recover difference between lease rent rate and the fair market rental value at time of default in a declining market 27

Conclusion

• Lease is a contract – In the first instance, check your lease • Consult with an attorney – There may be laws that override your lease • The best time to consult with an attorney, however, is before you sign your lease 28

Tips On Workplace Investigations Presented By: Annmarie Simeone, Esq.

Employer’s Duties

• Employer has a duty to investigate all complaints of harassment and take prompt remedial action reasonably calculated to end that harassment 30

• • •

The Investigation Is Important For Several Reasons:

• Demonstrates company’s adherence to, and enforcement of, its anti-harassment policies Potentially minimizes legal liability When well done, it can prevent litigation If litigation cannot be avoided, the investigation may provide a defense to claims 31

• • • • • •

Consideration #1 Who Should Investigate?

To maximize the chance of an effective investigation, the designated individual should be: An objective fact-finder Trained and knowledgeable regarding harassment law Trained in investigative techniques Familiar with company policies, practices, and structure Outside the involved parties’ line of management.

Credible to employees 32

• • •

Consideration #2 Confidentiality

Employers cannot promise absolute confidentiality Nothing can be “off-the-record” or “in confidence only” Instead, pledge to limit discussion only to those individuals who must be contacted in order to investigate and resolve the situation 33

Consideration #3 No Retaliation

• Employer can and should make a promise of no retaliation • Employees complaining of harassment are exercising a legal right; as with any other legal rights, employees should not be adversely affected by advising the employer of alleged harassment (even if it is later concluded that the allegation was unfounded) 34

• •

Consideration #4 Protect Complainant

Employer should take steps to insure complainant is not subjected to harassment during pendency of investigation Possible Options: 1. Placing one or more involved parties on PAID leave of absence 2. Transferring alleged harasser (not complainant, as this may later be seen as retaliation) 3. Modify reporting structure 35

Consideration #5 Who Should Receive Complaint?

• • • • Supervisor or other individuals who are or should be identified in anti-harassment policy Human Resources Managers 1.

2.

Anyone who could potentially receive a complaint should: Know to bring complaint to the designated individual in company Not conduct investigation him/herself or without the knowledge of upper management 36

Consideration #6 Planning The Investigation

A.

1.

2.

3.

4.

Preliminary Issues i.

ii.

Act promptly 24 hour goal Within a few days if time is needed to identify investigator i.

ii.

Use 2 investigators if possible Insure objectivity Facilitates investigation Create confidential file i.

ii.

iii.

May still be discoverable Segregate key documents Segregate privileged information Conduct interviews privately 37

Planning The Investigation (cont’d)

B. Gather the Facts 1. Collect and review relevant documents i.

Complaint ii. Notes of interviews iii. Harassment policies 2. Interview the victim 3. Interview alleged harasser 4. Interview witnesses 38

Planning The Investigation (cont’d)

C. Evaluate the Facts and Make a Decision 1.

2.

View facts from reasonable person’s perspective Distinguish between “unwelcome” and “voluntary” conduct 3. Draw up a thorough and even-handed report 39

Post-Investigation Steps

A. Report results of the investigation to the complainant B. Take appropriate corrective action. Depending on severity of conduct, option include: 1. Written warning 2. Mandatory training 3. Suspensions 4. Termination 40

When To Call Your Lawyer:

A Seminar for Business Owners & Executives

10 Minute Break

Protecting Your Intellectual Property

Presented By: Andrea S. Glaser, Esq.

Intellectual Property Overview

• “Intellectual Property” broadly refers to creations of the human mind • Intellectual property rights give creators property rights over their creations • Patents – Inventions – a product or process that provides a new way to do something or offers a new technical solution to a problem • Trademark versus Copyright 43

Trademark

• Basics • Trademark search • Applying for a trademark – www.uspto.gov

– Office Actions – Oppositions – Consent agreements 44

Trademark (cont’d)

• International registration • Fees • Common law rights 45

Copyright

• Basics • Applying for a copyright – www.copyright.gov

• Fees 46

Enforcement

• Consequences of non-enforcement • Demand letters – sending them and responding to them • Lawsuit for trademark or copyright infringement 47

Infringement

• Trademark Infringement – Standard of proof – Damages • Injunctions • Monetary relief • Treble damages • Attorneys’ fees and costs • Copyright Infringement – Standard of proof – Damages • Actual damages and profits • Statutory damages – up to $150,000

per act of infringement!

• Possible criminal charges • Attorneys’ fees and costs 48

Other issues

• Domain names – Domain Name Dispute Resolution • Cybersquatting • Licensing 49

E-Discovery What Does It Mean To You?

Presented By: Margaret Raymond-Flood, Esq.

Where Do You Find Electronically Stored Information (ESI)?

• Laptops/Desktops • Servers • Phone Systems (VoIP) • Printers & Copiers • PDA’s/Cell Phones • CD’s/DVD’s • USB Thumb Drives 51

What Other Devices Contain ESI?

52

What does it mean to you?

• Documentary and other evidence has been lost before, but the presence of electronically stored information (“ESI”) heightens the risks: – Greater volume of evidence to manage – Need to deal with inadvertent and planned destruction – New formats and storage locations 53

The Corporate Enterprise Network

54

Early Cases

• • •

Zubulake v. UBS Warburg

– Adverse inference instruction for failure to preserve electronic evidence contributes to $29.3 million initial jury award

Coleman Holdings, Inc. v. Morgan Stanley Co.

– Adverse inference instruction for failure to preserve and produce electronic evidence leads to $2.58 billion damage award

(reversed) U.S. v. Philip Morris USA Inc.

– $2.75 million sanction for spoliation of electronic documents 55

New Jersey State And Federal Court Rules Were Recently Amended

• To expressly include ESI stored in any medium • To permit the requesting party to designate the form in which ESI is to be produced 56

What Does It Mean To You?

• Preservation obligation attaches once “triggers” surface: – Statutory – Sarbanes, HIPAA, SEC, IRS, NJ Public Utility Act, etc. – Notice of a lawsuit – Litigation that is “

reasonably anticipated

” • Attorney and client must preserve ESI 57

What Does It Mean To You?

• Assess and understand company’s information management • Meta data is potentially discoverable; sound recordings are also to be considered as potentially discoverable • Attorney and client must work to identify: – Key custodians – Relevant ESI on the client’s system – Locations of data storage devices 58

What Does It Mean To You?

• Notify employees of obligations to preserve ESI • Consider offices in other geographic locations • Formulate a cost-effective strategy for reviewing and managing ESI • Suspend automated document destruction policies, and place “hold” on key ESI 59

What Does It Mean To You?

• Issue appropriate litigation “holds” • Litigation “holds” must be: – Communicated in writing – Issued by someone with authority – Tailored to identify purpose of the hold – Specific in detailing which data should be maintained and why – Periodically confirmed 60

What Can You Do To Prepare?

• Discuss ESI retention plan and protocol • BE PROACTIVE! DON’T WAIT FOR A CRISIS!

• Discuss your data systems and preservation issues • Consider hiring outside vendors to assist in facilitating production of or access to ESI • Implement procedures to ensure compliance • Discuss the “reasonable accessibility” of ESI • Must make these efforts a “high priority” • Assemble team of corporate representatives 61

Safe Harbor

• Court rules provide that generally no sanctions may be imposed if information that had been electronically stored was lost as the result of routine and good-faith operation of the electronic information system – “Routine” defined as “the ways in which such systems are generally designed, programmed, and implemented to meet the party’s technical and business needs” – “Good-faith” identified as steps taken to “comply with a court order in the case or party agreement requiring preservation of specific [ESI]” 62

What Does This Mean To You?

• Creates duty to help ensure that relevant data is not inadvertently destroyed • Good-faith steps to preserve may require suspension of document destruction systems • Offers limited “safe harbor” protection against sanctions • Sanctions: Monetary, bar evidence, adverse inference, dismissal of claim/defenses 63

What Does This Mean To You?

• Inventory, categorize, and catalog data storage locations and document types • Develop document destruction schedules based on business need • Damage control: immediately notify attorney of improper destruction;

DON’T WAIT TO BE ASKED! BE PROACTIVE!

64

Call Your Attorney To Develop “Best Practices”

• Define policies with unanimous employee adoption • Categorize information, and file it according to the corporate retention policy • Dispose of data when it reaches the end of its retention policy • Avoid policies that do not align with reality 65

It Is What It Is: Tax For 2008

Presented By: Melinda Fellner Bramwit, Esq.

So What Is It?

• Current tax climate • Views of new president • Stock market • Capital gains vs. ordinary income 67

It Is . . . A Planning Opportunity

• S Corporations • Do you have built in gains?

– Take advantage of “Taxable Income Limitation” 68

It Is . . . A Planning Opportunity

• S Corporations • Do you have passive income issues?

– Dividend – Election to distribute before AAA 69

It Is . . . A Planning Opportunity

• C Corporation – Closely held - pay out a dividend – Thinking of selling? 70

It Is . . . A Planning Opportunity

• Lower market = lower values • Consider getting an appraisal for a family business – Gifting 71

It Is . . . A Benefit Through 2008

• Through 2008 – Section 179 benefit – Section 168 “bonus depreciation” 72

It Is . . . A Tax Credit Or Deduction You May Not Know About

• Everyone likes a credit or a deduction – Comparison • Domestic Production Activities Deduction • Research and Development Credit 73

It Is . . . A Tax Credit Or Deduction You May Not Know About

• Business Incentives – Disabled Access Credit – Work Opportunity Credit – General Business Credit 74

Questions & Answers

Thank you for coming!