Have Pen, Will Travel

We often hear about the most dramatic court cases, or those involving high profile persons or extremely large amounts of money. But a colleague recently blogged about how transactional work from a conventional attorney can be high drama, too. It’s always refreshing to receive this sort of recognition (or redemption).

Those of you who are old enough may remember the popular television show, “Have Gun Will Travel.” The main character, known only as Paladin, was paid a hefty fee to settle problems without violence when possible, but excelled when forced to fight. "Trekkies" may be aware that most (if not all) episodes were written by Gene Roddenberry. the creator of “Star Trek.”

I recall one particular episode of the show about a woman who hired Paladin to represent her. She married a miner after spending only one evening with him. He left all his worldly possessions to her in a will in his own handwriting, and died. He had no other heirs. A partner challenged the will. Paladin, although not a lawyer, got the judge to agree to a jury of only three, who happened to be elderly miners themselves. He presented to them the story of how his client gave a lonely old man one wonderful evening of companionship and respect (no snickering here – this was the 1950’s). The jury agreed the will was valid.

The “attorney as hired gun” can be a pejorative, negative metaphor. It’s important to bear in mind that Paladin, who often exhibited his education and breadth of knowledge, only resorted to combat as a last resort. In that sense I like to think we are modern-day Paladins. We may not carry derringers under our belts, but we do consider ourselves well-read, highly prepared, and ready to take on the bad guys, armed with knowledge and experience – and resorting to ritualized combat (litigation) only as a last resort.

 

 

The paladins, sometimes known as the Twelve Peers, were the foremost warriors of Charlemagne's court.  photo courtesy Wikipedia

Build a Better Mousetrap - or a Safer Hot Dog

Last week, we posted about confidentiality agreements, referencing a recent case involving English muffins.

Now hot dogs are the hot topic.

The American Academy of Pediatrics released a policy statement this month, reporting that hot dogs cause about 17 percent of food-related asphyxiations in children. The Academy is proposing that hot dogs be redesigned to prevent choking.

For those caregivers who do not cut their children’s food into safe-sized pieces, or heed choking warnings, this is a life-saving solution. However, according to Eric Hummel of Hummel Brothers Meat Products in New Haven, Connecticut, “it would be virtually impossible to make [a hot dog] in really any other shape.” If it could have been done, it probably would have by now.

But if a food scientist did discover how to bypass the grinding-emulsifier-casing process, the new design would undoubtedly involve confidential, proprietary information. Yes, anyone can try to duplicate a new shape. But the process for producing the shape could be proprietary and subject to confidentiality agreements or to other protections for intellectual property.

In the meantime, Mr. Hummel recommends that families with young children purchase skinless hot dogs in the thinnest form.

There are other solutions for small children: alternative foods like eggs, sliced turkey, whole grains…. But, being lawyers and not dietitians, we have to leave the matter to individual adults to decide, including those who "relish" their hot dogs.

Never Tell Tales out of School (or secret recipes from work)

One of America’s most closely guarded secrets sits in an undisclosed location in Louisville, locked away in a safe. Very few people know its location, let alone the information contained in that vault. The select few who do know are obligated to strict confidentiality by contract. The information contained therein are not military codes or emergency instructions. It’s Colonel Harland Sanders’ secret formula for his Kentucky Fried Chicken.

A recent Law.com post reported the case of Bimbo Bakeries USA Inc. v. Botticella. Mr. Botticella was one of a handful of executives who knew the secret “nooks and crannies” formula for Thomas’ English Muffins. Botticella had surreptitiously accepted a position at rival Hostess. Bimbo Bakeries (the company that makes the muffins) successfully sought an injunction to block Botticella from joining Hostess and possibly exposing their trade secrets.

In our practice, we frequently get asked about non-compete and non-disclosure agreements. Often a client will ask: Why me? Some employees can’t believe that they acquired any knowledge so critical to their employer that it justifies stringent intellectual property restrictions . Well the answer is: There are plenty of things can be highly confidential and proprietary, even the nooks and crannies of a muffin or the recipe for the coating on fried chicken. More commonly, the concern is about customer lists, unique methodologies or technical information.

Frank Steinberg of the New Jersey Employment Law Blog explains inevitable disclosure as a doctrine of trade secret law that proceeds from the premise that an ex-employee of one company who knows trade secrets, and takes a job with a competitor, simply will not will not be able to keep his mouth shut in his new job.

Dan Schwartz of the Connecticut Employment Blog commented on the muffin case with both humor and insight. He notes that the judge concluded, in the case of Mr. Botticella, that the disclosure of trade secrets would be inevitable.  Dan suggests that employers who seek to use the doctrine of “inevitable disclosure” should realize the limits of the doctrine, and use it carefully and sparingly.

All these gentlemen should be on the lookout for Todd Wilbur. The former journalist has a website and series of success books called “Top Secret Recipes: creating original clone recipes of America’s Favorite Foods.” We don’t know whether he found out the true secrets or did some “reverse engineering” in order to get close. Can you tell?
 

photo courtesy Wikimedia

Social Media Policies at Work

The other night I was watching an episode of “The Office.” The company of the title, Dundler Mifflin, had recently been acquired by a large corporation. Much to the horror of the DM employees, the new company sent an IT manager in to remove access to any questionable websites and social networking arenas, including Twitter and Facebook.

Apparently this is not just material for television. According to the National Law Journal, more than half of surveyed companies said they prohibit employees from visiting sites such as Twitter, Facebook and MySpace. In fact, the article says, 76 percent of companies are actually blocking employees' use of social networking.

It stands to reason that employers can prohibit activities not related to their work. Legally, employers have the right to institute such policies. However, company policy about such things should be done in a way that doesn’t humiliate employees or create resentment. After all, social media is here to stay, and can actually benefit companies. As Daniel Schwartz of the Connecticut Employment Law Blog says, developing a social media policy and practice should be part of many companies' overall strategy.

A Canadian woman might have fared better with these regulations in place. A recent Law.com post reported that the woman is fighting an insurance company's decision to cut her benefits after an insurance agent found photos of her vacationing, at a bar and at a party.

She posted them on Facebook.

Ladies (and Men) Who Lunch: Congratulations to Ridgefield Chamber

Bev and I had the pleasure of attending the Ridgefield Chamber of Commerce Inaugural Luncheon today.  The beautiful Le Chateau restaurant was filled with town leaders, service providers, business owners, and local government officials.  It was a dynamic, optimistic environment which reinforced the “small town, big possibilities” feeling of Ridgefield.   

Amongst the speakers was Mike Critelli, former CEO of Pitney Bowes.  The Ridgefield Patch describes Mr. Critelli, who is now retired, as “a widely sought-after business leader and public speaker because of his engaging stories and insightful lessons on business.”  He left us with some interesting ideas on how each of us can grow our business, even in a challenging economy. 

 Our congratulations and gratitude to Chamber of Commerce Executive Director Marion Roth, her staff, and the Board for keeping the Chamber an important, relevant, and amenable part of Ridgefield.  

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Yes, Virginia, there is an Estate Tax

According to Investment News, Virginia became the first state to pass a law requiring that estates be treated as if it is still 2009 -- unless Congress acts first.

Why would Virginia do that? Many wills include formulas that are based on the existence of an estate tax. This article points out how the formulas can distort the intentions expressed in someone’s will - - to the extent of leaving one’s children nothing instead of $3.5 million.

Of course the issue does not apply at all to most estates because they are too small to be taxed in the first place. There was no tax on small estates in 2009, and there is none in 2010.

In our practice, for estates that might have been taxable, we have been using “disclaimer” provisions that allow a surviving spouse to decide whether tax-minimizing steps are necessary. The “disclaimer” technique is not a cure-all for an uncertain tax environment, but it works in many cases.

It would be better if Congress simply decided to end the uncertainty and pass some kind of estate tax law.

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Does Conan Have Contract Conflicts?

The New York Times recently ran an informative article about NBC’s late night television woes. Low ratings and pressure from affiliates have made NBC move Jay Leno from 10 pm to 11:35 pm, thereby bumping Conan O’Brien’s The Tonight Show to 12:05 am (actually, wouldn’t that be tomorrow?)

Mr. O’Brien issued a respectful but witty statement expressing his thoughts and disappointment. He also remarked on the speculation that a rival network is wooing him. But the Times suggests that O'Brien's contract with NBC includes a non-compete clause that could prevent him from jumping to another network.

Time to call in the lawyers.

As an attorney, I don’t practice in entertainment law but I find the story raises some interesting general contract issues. Of course, the terms of the contract are not public, so I can only draw some general inferences. Mr. O’Brien signed a contract with NBC to take over The Tonight Show. According to the Times, although the contract did not specifically state that the show will begin at 11:30 pm, for 60 years it has immediately followed the local nightly news. In order for O'Brien to extricate himself from the contract, he would have to show that the time change constitutes a breach. Or, he could leave and possibly breach the contract.

The article states that NBC executives are confident they have not breached Mr. O’Brien’s contract, since he still will be the host of The Tonight Show.

What does this story teach us about contracts? First, a decision to breach a contract is usually a business decision, not a moral one. But, if a contract is enforceable, the breach is going to cost. The question is whether the cost of the breach is greater than the cost of faithfully carrying out the contract.

Secondly, a contractual right provides certain protections. But, it doesn’t protect individuals or a management team from sabotaging their own interests. As I’ve told clients numerous times, it may seem attractive to play “hardball,” but it’s not always the best alternative.

A case in point is the subplot mentioned in the article concerning the Fox network. I’m curious as to whether Fox, which, according to the article, has the contractual right to impose a new late-night program on its affiliates, would actually enforce its contractual right if that action jeopardized its long-term relationship with the affiliates. Those "Seinfeld" re-runs are reportedly very lucrative.

Finally, aggrieved employees should follow Mr. O’Brien’s example and take the high road. Don’t burn any bridges or publicly lash out at those you believe wronged you.

Incidentally, another Celebrity vs. Network case was put to bed today. The AP reports that New York's top court rejected Dan Rather's bid to reinstate his $70 million breach-of-contract lawsuit against CBS. Apparently, the court ruled that since he was paid, there was no breach of contract.

Order in the Court (Appointments)

For the record, I’m not a big fan of Justice Antonin Scalia. But he certainly is provocative, as the Wall Street Journal Law Blog pointed out recently.

According to the Journal post, Justice Scalia is concerned that there aren’t more people with varying professional backgrounds being nominated to the Supreme Court. At the time of his nomination, there were three justices with no prior judicial experience. Today there are none. An AP story quotes Justice Scalia as saying, “Every aspect of your career broadens your outlook and gives insights that you wouldn’t have in some other aspect of the legal practice.”

The Justice raises a good question: should the judges of the highest courts (he talks about US Supreme but the question could apply to the highest state court) be exclusively judges, or should there be a mix of backgrounds?

Ironically, in the debate over the last Supreme Court appointment (Justice Sonia Sotomayor) there seemed to be a big issue over whether the law should be followed closely or informed by the judge’s background. Many seemed to be against the application of non-legal insights into a legal decision. Now, none other than Justice Scalia implies that background matters.

Here’s my take: In principle, a variety of backgrounds would be best. But, the highest courts almost exclusively decide questions of law, not questions of fact. Thus, if the role of the justices is to tell us “what the law is,” should that be done by a non-lawyer of any background? Also, wouldn’t a non-lawyer become even more dependent on his or her law clerks (lawyers) than the lawyer-judges already are?

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Reversal of Fortune: The Estate Tax Law Update

As of January 1, the federal estate tax went away for a year. Under current law, it’s scheduled to return at a higher rate next year. Personally, I’m surprised that Congress allowed the estate tax law to lapse, and I'm curious to see the ramifications.

According to the Wall Street Journal, families facing end-of-life decisions in the immediate future are finding that the change is making one of life's most trying episodes only more complex. Beneficiaries stand to inherit a lot more for a death this year than a death after December 31, 2010. The ethical dilemma is clearly significant.

Of course, what Congress giveth, Congress can taketh away. As discussed in the Journal article, the repeal of the federal estate tax is accompanied by reinstatement of the capital gains tax on property passing to beneficiaries.  Previously, when property passed to beneficiaries, the property received a “step up” in basis, wiping out the capital gains tax. The net result is that many estates, including smaller estates, will be taxed anyway but it just won’t be called an estate tax.

The Journal says that the uncertainties of the new tax law (will it be changed? will it be retroactive?) are “forcing family legal advisers to craft various provisional financial-planning strategies that can be undone later if the rules do change.” According to the article, at least one person has added the prospect of euthanasia to his estate-planning mix.  That might be a little extreme.

For a more conventional planning environment, we look forward to some kind of retroactive resolution.
                                                                

For Auld Lang Syne...

As the last days of December wind down, it is traditional to look back on the past year’s triumphs and tribulations.

Fortunately, Law.com has compiled The Top 'Top-10' Lists of 2009, including Law Central’s list of the weirdest cases of 2009. The case of the man who was prosecuted for dialing 911 when his local Burger King ran out of lemonade proves that sometimes justice really is served (no pun intended).

Thanks to the Blog Herald for giving us top legal issues to look forward to in the coming year.

Closer to home, our own town of Ridgefield enjoyed an interesting year. Several real estate transactions occurred on Main Street, with tenants moving in, moving out, or just moving across the street. First Selectman Rudy Marconi declared his consideration of a run for governor.

We wish all of our neighbors, friends and clients a happy, healthy and prosperous New Year.