The world is in economic free-fall these days. Markets go up and down, seemingly governed only by the irrational fears and hopes of those who invest in it. Companies, public and private, are laying off workers, in part, because of actual financial loss and inability to pay and, in part, because they fear that they will not be able to pay in the future. In short, it's madness out there.
Not surprisingly, I have been overwhelmed lately by clients who want to consider moving on to greener pastures or just to change scenery. Some consult me because they want to, others because they have to. In any event, I've been spending a lot of time lately looking at employment agreements hastily executed in better times and in consideration for the promise of a good paycheck and fat benefits that have that now evaporated or are in real danger of being drastically curtailed. As a result, a lot of people want out of their current situation. Who can blame them?
Many of the agreements I have reviewed lately contain provisions known as "covenants not to compete" and "non-solicitation covenants." I have briefly touched on these subjects before, but in the last few weeks I have been confronted with these provisions so many times, I thought it was worth mentioning again. In Florida, we have a general policy against laws or rules that restrict or prohibit competition. We are a free market, after all. That said, there are valid commercial reasons why certain employers are allowed to restrict employee competition. Typically, it involves customers or trade secrets.
I'll explain what I mean. Say, you are a chemist for ABC Chemicals. You have an employment agreement that contains a covenant not to compete with ABC Chemicals if you leave the company. Why? Because, as an ABC employee, you will get to see all the copyrighted, patented and trademarked formulas and information. Those things have special, distinct and unique commercial value in the marketplace and would be most useful to a competitor of ABC. So, the theory goes, by having a non-competition and non-solicitation provision in your employment agreement, a competitor will not be tempted to poach you and bring you in so it can use you to divulge all of ABC's secrets. In that regard, such provisions are meant to foster competition by ensuring that companies have protection over their trade secrets.
You should know that non-competition and non-solicitation provisions are enforceable to a point. You cannot be prohibited from competing forever or globally. The law requires that the restriction be reasonable in time and in geographic scope. You should also know that, if you go to work for a competitor, your employer can sue to prevent you from continuing to work.
So, please, before leaving your current job, check your employment agreement (if you have one) and confirm what the scope of your rights and restrictions are.
Wednesday, April 8, 2009
Thursday, April 2, 2009
What If It Doesn't Say Anything?
Switching gears again, I got a question from someone about the contract termination and renewal issue I wrote about the other day. Of course, my blog entry addressed what does and doesn't happen in those situations where you have a contract that's for a set period of time - a week, a month, two years, etc. - and what happens when that time expires. Well, what if you have an agreement that doesn't have any such time period?
Florida law says that you, then, have a contract terminable at will, a specific term of art meaning either party can end the agreement any time. Now, be careful and don't take what I say too literally here. It does not mean that if you have a company providing janitorial services to a 500 room hotel under a contract with no end date that you can or should just terminate it on Tuesday and stop sending cleaning staff over on Wednesday. The law also requires some level of reasonableness between parties when dealing with each other and you have to be sure that you are not putting the other party in a position to claim you damaged it/her/him by virtue of your termination.
I'm sure this sounds a little off coming from the guy who has been telling you from the beginning that we value freedom of contract and that the law does not save people from bad deals. While this is true, you also cannot exercise your rights in a way that will ruin your contract partner, put it/her/him out of business or damage public welfare. I know, I know. It's like a zen. Just when you think you've got the answer to something and know where you stand in the universe.....
P.S. It's probably not as drastic as the example I gave above because most agreements usually contain a provision that termination has to be effected by giving notice followed by some period of time to wind down the relationship. These provisions are put in place to avoid exactly the scenario I described above. Have a good day.
Florida law says that you, then, have a contract terminable at will, a specific term of art meaning either party can end the agreement any time. Now, be careful and don't take what I say too literally here. It does not mean that if you have a company providing janitorial services to a 500 room hotel under a contract with no end date that you can or should just terminate it on Tuesday and stop sending cleaning staff over on Wednesday. The law also requires some level of reasonableness between parties when dealing with each other and you have to be sure that you are not putting the other party in a position to claim you damaged it/her/him by virtue of your termination.
I'm sure this sounds a little off coming from the guy who has been telling you from the beginning that we value freedom of contract and that the law does not save people from bad deals. While this is true, you also cannot exercise your rights in a way that will ruin your contract partner, put it/her/him out of business or damage public welfare. I know, I know. It's like a zen. Just when you think you've got the answer to something and know where you stand in the universe.....
P.S. It's probably not as drastic as the example I gave above because most agreements usually contain a provision that termination has to be effected by giving notice followed by some period of time to wind down the relationship. These provisions are put in place to avoid exactly the scenario I described above. Have a good day.
Tuesday, March 31, 2009
I Will It!
As you may or may not know, I am prohibited from giving actual legal advice on this blog or use it as a form of direct advertising ("Have you been injured in an accident?"). There are some specific rules promulgated by the Florida Bar that I am bound to follow on these subjects. It does not mean, however, that you should not send me your questions or ideas because they have, to date, given rise to about half of these blog entries over the last year. (Translation: I want to discuss the stuff that matters to you. The stuff I care about I can look up.)
That said, this most recent entry is in response to a direct request that I discuss wills and testamentary instruments. Specifically, I was asked to remind everyone that, regardless of age, you would be wise to have an appropriate plan in place for your assets, burial, insurance proceeds and mortgage in the event your entry in the Red Bull Flugtag event doesn't actually fly and you meet an early and embarrassing demise in front of hundreds of others who thought the Wright brothers' original flying machine could have been improved upon with a little crepe paper and a catchy name.
Karen, my friend who submitted the request, is right. Apparently, 2009 has sparked an interest in many about the protection of their assets and how to dispose of them in the event of death. Let me first tell you that everyone has a different set of circumstances concerning disposition upon death, so what may work for your parents, neighbors or best friend, may not be an appropriate solution for you. You need to carefully consider what you want to happen to your stuff should you no longer be here. I can tell you that there are many fine estate planning attorneys out there who can put your vision on paper and make it happen when you are gone. You don't need to know anything about the law. You just need to decide what you want.
Once you have done this, talk to someone who knows this field. Please do not end up buying form wills at Office Depot or the bookstore. In case you didn't go to law school, let me remind you that the law in every state is not the same. I know, I know. You're saying, passing something on after I die is the same no matter where I am. No, it isn't. For instance, in Florida, we are the ONLY state left that still has what is called "strict distribution" (don't ask) of assets. Other states have other methods. You want to be sure that your collection of Rubik's Cubes goes to your brother Boris and not your sister Ophelia? Then, you would be wise to plan for this contingency appropriately.
Also, an estate planner can appropriately advise you how to pass assets outside of a will or your estate. They can advise on the setting up of trusts and other vehicles that, should you disappear while sailing solo around the world, there will be little tax consequence or disruption. In other words, you may not always need a will. By placing everything in a will, you may actually be making things more complicated and expensive than they need to be. By writing your own will using the Ubiquitous Law Form Company's form will, you will definitely making things harder on those you leave behind. Don't do it, unless your goal is to be a pain from the Great Beyond.
That said, this most recent entry is in response to a direct request that I discuss wills and testamentary instruments. Specifically, I was asked to remind everyone that, regardless of age, you would be wise to have an appropriate plan in place for your assets, burial, insurance proceeds and mortgage in the event your entry in the Red Bull Flugtag event doesn't actually fly and you meet an early and embarrassing demise in front of hundreds of others who thought the Wright brothers' original flying machine could have been improved upon with a little crepe paper and a catchy name.
Karen, my friend who submitted the request, is right. Apparently, 2009 has sparked an interest in many about the protection of their assets and how to dispose of them in the event of death. Let me first tell you that everyone has a different set of circumstances concerning disposition upon death, so what may work for your parents, neighbors or best friend, may not be an appropriate solution for you. You need to carefully consider what you want to happen to your stuff should you no longer be here. I can tell you that there are many fine estate planning attorneys out there who can put your vision on paper and make it happen when you are gone. You don't need to know anything about the law. You just need to decide what you want.
Once you have done this, talk to someone who knows this field. Please do not end up buying form wills at Office Depot or the bookstore. In case you didn't go to law school, let me remind you that the law in every state is not the same. I know, I know. You're saying, passing something on after I die is the same no matter where I am. No, it isn't. For instance, in Florida, we are the ONLY state left that still has what is called "strict distribution" (don't ask) of assets. Other states have other methods. You want to be sure that your collection of Rubik's Cubes goes to your brother Boris and not your sister Ophelia? Then, you would be wise to plan for this contingency appropriately.
Also, an estate planner can appropriately advise you how to pass assets outside of a will or your estate. They can advise on the setting up of trusts and other vehicles that, should you disappear while sailing solo around the world, there will be little tax consequence or disruption. In other words, you may not always need a will. By placing everything in a will, you may actually be making things more complicated and expensive than they need to be. By writing your own will using the Ubiquitous Law Form Company's form will, you will definitely making things harder on those you leave behind. Don't do it, unless your goal is to be a pain from the Great Beyond.
Tuesday, March 24, 2009
Renewal
It's officially Spring (in Florida that's the end of the season we call "Hot" and the beginning of the season we call "Really Hot"). Spring is a time for renewal - and that's what I promised you - renewal of contracts, that is.
Many of our written agreements are for a fixed term, meaning that they are in force for a certain number of days, weeks or years. Sometimes they renew themselves and sometimes they just expire. How do you know? Well, the contract should say so. If it says nothing, the law says the contract just expires.
Well, what if it expires and you want or need it to be extended? Here's where the pitfalls are. because working in uncharted territory causes problems. Negotiate the extension or renewal of the contract BEFORE IT EXPIRES. If the contract is done on June 30, get a renewal of the contract or the new contract in place before June 30. For those of you not good with deadlines, keep in mind that having your first discussion about renewal with your contractual party on May 28 is not a good idea.
If you start getting into renewal after the contract expiration, two things will happen: 1) you will be flying without a net; and 2) you will pay me a lot of money if things don't work out. What do I mean? Well, if your contract expires and you continue on with your business relationship while negotiating a new deal, there will usually be questions about what happens during that lag time between the original contract and the renewal or new deal. This often ends up being a subject of intense negotiation and sometimes it turns into litigation. If it turns into litigation, then we will spend a lot of time and money trying to figure out what was intended during the negotiation process. There will be issues about past performance and how it impacts the relationship even in the face of the express language of the agreement. Why? Because you no longer have a contract and your course of dealing with someone may become the basis for a deal that does not mirror the actual contract you made.
Example- you have a contract to sell widgets in 1000 unit lots, which are to be paid for in 90 days. Over the course of time, you and your contractual partner end up selling lots of 1,200 and payments is made on average of 113 days. After your contract expires and you find yourself without a new one, you could be deemed to have a relationship with your contractual partner for the sale of 1,200 widgets payable every 113 days.
So, here's the short version - contracts that provide for renewal periods renew themselves without negotiation. Those that don't can be renewed, but I urge you to get on it well before the expiration date. Fun, right?
Many of our written agreements are for a fixed term, meaning that they are in force for a certain number of days, weeks or years. Sometimes they renew themselves and sometimes they just expire. How do you know? Well, the contract should say so. If it says nothing, the law says the contract just expires.
Well, what if it expires and you want or need it to be extended? Here's where the pitfalls are. because working in uncharted territory causes problems. Negotiate the extension or renewal of the contract BEFORE IT EXPIRES. If the contract is done on June 30, get a renewal of the contract or the new contract in place before June 30. For those of you not good with deadlines, keep in mind that having your first discussion about renewal with your contractual party on May 28 is not a good idea.
If you start getting into renewal after the contract expiration, two things will happen: 1) you will be flying without a net; and 2) you will pay me a lot of money if things don't work out. What do I mean? Well, if your contract expires and you continue on with your business relationship while negotiating a new deal, there will usually be questions about what happens during that lag time between the original contract and the renewal or new deal. This often ends up being a subject of intense negotiation and sometimes it turns into litigation. If it turns into litigation, then we will spend a lot of time and money trying to figure out what was intended during the negotiation process. There will be issues about past performance and how it impacts the relationship even in the face of the express language of the agreement. Why? Because you no longer have a contract and your course of dealing with someone may become the basis for a deal that does not mirror the actual contract you made.
Example- you have a contract to sell widgets in 1000 unit lots, which are to be paid for in 90 days. Over the course of time, you and your contractual partner end up selling lots of 1,200 and payments is made on average of 113 days. After your contract expires and you find yourself without a new one, you could be deemed to have a relationship with your contractual partner for the sale of 1,200 widgets payable every 113 days.
So, here's the short version - contracts that provide for renewal periods renew themselves without negotiation. Those that don't can be renewed, but I urge you to get on it well before the expiration date. Fun, right?
Tuesday, March 17, 2009
It's Called Policy For A Reason
I'm back! I didn't actually go anywhere, I've just been busy trying to meet client demands and deadlines. In trying times, you don't want to alienate the hands that feed you.
So, now that I've got three matters where this has come up, I figured it was time to share it with you. Policies. If you've been following along the last few months, you know that I've discussed company policy manuals and keeping them updated. What's in there matters and it often governs your rights and obligations as an employee or a manager.
But, what if you have an employment agreement? Many of us do (I do, for instance) and it spells out the exact terms of our job situation. Does the employment agreement trump a policy? It certainly does. If it didn't, your contract would be meaningless.
Suppose, for instance, you sign an employment agreement to work as a salesman. In your contract you are given 8% commission on the sales you make. Let us also suppose that the world economy takes a dive and your employer finds itself in a situation of declining revenue and needs to cut corners. Your employer cannot create a new corporate policy and place it in the policy manual that changes all sales commission rates from 8% to 6% (or any other number, for that matter).
Contracts are meant to lend predictability to our commercial transactions. If we remove that predictability, we are disserving the purpose of the agreement and commercial relations, generally. You know, the whole ripples on the water concept.
An employment contract is a bargained for situation and to allow policies to trump those bargained for items places unilateral and complete control of the employment situation in the hands of the employer. It also makes putting together the employment agreement a complete waste of time. As my contracts professor used to say, we don't like that.
Tomorrow- contract renewal.
So, now that I've got three matters where this has come up, I figured it was time to share it with you. Policies. If you've been following along the last few months, you know that I've discussed company policy manuals and keeping them updated. What's in there matters and it often governs your rights and obligations as an employee or a manager.
But, what if you have an employment agreement? Many of us do (I do, for instance) and it spells out the exact terms of our job situation. Does the employment agreement trump a policy? It certainly does. If it didn't, your contract would be meaningless.
Suppose, for instance, you sign an employment agreement to work as a salesman. In your contract you are given 8% commission on the sales you make. Let us also suppose that the world economy takes a dive and your employer finds itself in a situation of declining revenue and needs to cut corners. Your employer cannot create a new corporate policy and place it in the policy manual that changes all sales commission rates from 8% to 6% (or any other number, for that matter).
Contracts are meant to lend predictability to our commercial transactions. If we remove that predictability, we are disserving the purpose of the agreement and commercial relations, generally. You know, the whole ripples on the water concept.
An employment contract is a bargained for situation and to allow policies to trump those bargained for items places unilateral and complete control of the employment situation in the hands of the employer. It also makes putting together the employment agreement a complete waste of time. As my contracts professor used to say, we don't like that.
Tomorrow- contract renewal.
Thursday, March 5, 2009
Aliens - not the ones from outer space
In case you hadn't noticed, Miami is a land of foreigners. Being born here, I sometimes feel like a stranger in a strange land. Everyone is from somewhere else - and usually very far away where there is a different language, different customs, senses of family, community and beliefs.
The law is not blind to the presence of what are know, quite stupidly, as "aliens." I could go into the whole etymology of why people are referred to aliens, but that's for the online dictionary to handle (Oxford online, by the way, has a particularly good history). Anyhow...
Not surprisingly, the laws on our books distinguish between those who are here legally and those who are not. Both sets of people impact us and our rights, as well as their own. If you are a foreigner, you should be glad to know that the law expressly and unequivocally provides that no trade or profession can be denied to you simply by virtue of the fact that you are not a U.S. citizen. That's §455.10 Fla. Stat. for any of you doubters out there.
By contrast, the law also provides that there are civil and criminal penalties applicable to those persons who hire "aliens" not here legally. It says, in pertinent part:
"It shall be unlawful for any person knowingly to employ, hire, recruit, or refer, either for herself or himself or on behalf of another, for private or public employment within the state, an alien who is not duly authorized to work by the immigration laws or the Attorney General of the United States. "
So, as you can see, it applies both to public and private employers. It also says that your first violation is a civil fine, then it becomes a criminal misdemeanor for a repeat offender. It gets better. After that, you start getting charged for each illegal immigrant as a separate offense.
As an employer, you are charged with confirming the legality of your employees' immigration and citizenship status. If you have any doubts about a particular employee's status, you should speak with the employee and contact a lawyer knowledgeable about immigration matters.
Take heed, lest some of your favorite staffers end up deported and you end up in the pokey.
The law is not blind to the presence of what are know, quite stupidly, as "aliens." I could go into the whole etymology of why people are referred to aliens, but that's for the online dictionary to handle (Oxford online, by the way, has a particularly good history). Anyhow...
Not surprisingly, the laws on our books distinguish between those who are here legally and those who are not. Both sets of people impact us and our rights, as well as their own. If you are a foreigner, you should be glad to know that the law expressly and unequivocally provides that no trade or profession can be denied to you simply by virtue of the fact that you are not a U.S. citizen. That's §455.10 Fla. Stat. for any of you doubters out there.
By contrast, the law also provides that there are civil and criminal penalties applicable to those persons who hire "aliens" not here legally. It says, in pertinent part:
"It shall be unlawful for any person knowingly to employ, hire, recruit, or refer, either for herself or himself or on behalf of another, for private or public employment within the state, an alien who is not duly authorized to work by the immigration laws or the Attorney General of the United States. "
So, as you can see, it applies both to public and private employers. It also says that your first violation is a civil fine, then it becomes a criminal misdemeanor for a repeat offender. It gets better. After that, you start getting charged for each illegal immigrant as a separate offense.
As an employer, you are charged with confirming the legality of your employees' immigration and citizenship status. If you have any doubts about a particular employee's status, you should speak with the employee and contact a lawyer knowledgeable about immigration matters.
Take heed, lest some of your favorite staffers end up deported and you end up in the pokey.
Friday, February 27, 2009
No wonder I hardly go to trial.....
When I was in law school, the only type of lawyer I was interested in being was a litigator. I wanted to go to court, I wanted to take depositions, I wanted to try cases. Well, civil practice tends to be broader than all that and, as fate would have it, I got to law school right after the 80s and at a time that the legal system was trying to invent ways to combat the excesses of the prior decade. All hail the advent of mediation and arbitration!
I've written about both of these procedures before (you can check out the earlier postings on www.kaijacobs.blogspot.com - I even posted a pretty picture of Miami just before a hurricane for effect), so don't get nervous that I've run out of material and I'm going to start repeating myself. To the contrary, I'm about to let you know that there is yet another mechanism becoming popular that's designed to settle cases and limit my courtroom time - mediation while your case is on appeal.
In both state and federal courts, there are mechanisms now in place to ensure that you attend mediation both at the trial level and if you find your case on appeal. Mediation on appeal has all of the great advantages that clients like - it forces open and frank discussion about the issues, it requires negotiation to see if there is a bottom line result that ends a lawsuit, it cuts down on attorneys' fees and costs if successful, it puts litigation behind the parties and it could save everyone months or years of time. This is a great invention for you litigants. It's a forced opportunity to come out of your shell and try to get to an end result.
It also means that I have to take off my advocate hat and put on my negotiator hat. It fits weirdly, but I'm getting used to it.
Have a great weekend everyone.
I've written about both of these procedures before (you can check out the earlier postings on www.kaijacobs.blogspot.com - I even posted a pretty picture of Miami just before a hurricane for effect), so don't get nervous that I've run out of material and I'm going to start repeating myself. To the contrary, I'm about to let you know that there is yet another mechanism becoming popular that's designed to settle cases and limit my courtroom time - mediation while your case is on appeal.
In both state and federal courts, there are mechanisms now in place to ensure that you attend mediation both at the trial level and if you find your case on appeal. Mediation on appeal has all of the great advantages that clients like - it forces open and frank discussion about the issues, it requires negotiation to see if there is a bottom line result that ends a lawsuit, it cuts down on attorneys' fees and costs if successful, it puts litigation behind the parties and it could save everyone months or years of time. This is a great invention for you litigants. It's a forced opportunity to come out of your shell and try to get to an end result.
It also means that I have to take off my advocate hat and put on my negotiator hat. It fits weirdly, but I'm getting used to it.
Have a great weekend everyone.
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