Rogers & Tartaro Business Litigation Blog : New York and Connecticut Business Litigation Lawyer & Attorney : Rogers & Tartaro Law Firm : Commercial Litigation : Westchester County NY, Fairfield County CT

The title of a recent Legal Blog Watch post highlighted bleak prospects for plaintiffs bringing employment cases in federal court: “Plaintiffs Win Only 15 Percent of Employment-Related Cases in Federal Court.” The study was by the American Constitution Society. LBW reports that in many instances, employment cases do not survive a summary judgment motion (a disposition without trial because there are no material facts in dispute). According to the study, prospects on appeal are also bleak.

Whether or not the numbers generated by this particular study are precisely accurate, we believe the study generally reflects reality. Our experience and perusal of cases in the federal reporters tends to confirm that it is tough (but not impossible) to win employment cases in federal court (or any court). 

LBW suggests there may now be a tendency to bring cases in state court or a resort to mediation. The success rate in state courts is not reported.

In our experience, many employment disputes are settled before a lawsuit is even filed and, then, many are settled before the litigation runs its course. Litigation is expensive win or lose. Negotiation, with or without mediation, may be just as important a factor reducing the cases brought in federal courts than forum shopping in state courts.  

• Email This
• Print
• Comments
• Trackbacks

The Connecticut Employment Law Blog, a favorite of mine, has recently posted an informative summary of the ADA Amendments Act of 2008 which, CELB reports, is due to be signed into law any day. The ADA is the Americans With Disabilities Act. The post is entitled “What Employers Need to Know About the ADA Amendments Act of 2008.” 

I will not duplicate the thoughtful summary and comments on CELB. However, I would like to add one point for our small business clients.

The general tendency of the amendments, as noted by CELB, is to shift litigation from threshold issues, such as whether the plaintiff is “disabled” to liability issues, such as whether the plaintiff actually was the victim of discrimination. I would add, however, that one threshold issue remains largely unchanged: whether the employer is covered under the ACT.

Coverage begins with 15 or more employees, which, of course, includes many small businesses. In addition, small businesses that think the ADA does not apply but employ independent contractors should be very careful. Whether an individual is an employee or independent contractor can depend on the specific facts and circumstances of each case. And, the independent contractor status can be challenged in litigation.

• Email This
• Print
• Comments (1)
• Trackbacks

We commented in an earlier post on a Wall Street Journal Law Blog report that a law firm was being audited by the United States Labor Department for giving “improper” advice to its client.

Now, Law.com, in a post by Mark Hamblett reports that the audit has been quietly dropped (“Labor Department Drops Green Card Audit of Nation’s Largest Immigration Law Firm”). 

It may come as a surprise that a government agency presumes to tell any law firm what advice it can give its client. As pointed out in the prior post, the immigration laws and regulations are complex and the Labor Department believed then that its interpretation of the regulation raised an appropriate issue. In any case, that interpretation has, for now, been dropped. 

• Email This
• Print
• Comments
• Trackbacks

A recent blog post suggesting that decreasing asset values present opportunities did not get my full appreciation until I put it together with an unrelated experience in an estate litigation case to draw a broader lesson.

The post was in the Utah Business, Real Estate and Estate Planning Blog, by Matt Fankhauser and entitled “A Silver Lining in Decreasing Asset Values.” The point was that decreasing asset values present opportunities for high net worth individuals. With gift and estate taxes not likely to go away, individuals can make gifts at a discount (that is, at depressed values) to take maximum advantage of lifetime gift tax exemptions and annual exclusions. 

While seemingly unrelated, the idea brought to mind my experiences with the parties in a will contest that was resolved only after years of litigation.

Valuable investment property had been in the family 35 years with the decedent refusing to allow it to be sold in her lifetime. One party in the will contest fought to gain control of that property intending to keep the property from being sold and as a family asset even longer. The estate also happened to include overseas properties that may have been owned by the decedent for 50-60 years.

In holding properties 35, 50, 60 years, the decedent (and other family members) exhibited a distinct long-term mindset. Since they intended to hold on to the assets for the long term, this family might very well consider a period of depressed values to be an opportune time to make tax-saving gifts.

More generally, a longer-term mindset, even in an uncertain economic environment, may identify opportunities that would otherwise be overlooked. That is as true of personal financial issues, such as estate and gift tax planning as it is of core business issues.

• Email This
• Print
• Comments
• Trackbacks

You will not be around to manage any litigation that might arise over your estate. 

That’s why we took notice of a recent New York Times article by David Cay Johnston which made an excellent case for informing your beneficiaries about the particulars of your estate plan. (“Learning to Share”). 

Essentially, the point of the article is that being up front about your plans may be difficult but will serve you well in the long run. Quoting Mitchell Gans, a law professor at Hofstra University, the Times points out the particular problem that occurs when the plan is not an equal distribution among the beneficiaries and the less favored beneficiaries react with anger:

Kids do get angry at being cut off, but if you say nothing their anger will be directed not at you, but at the favored child. You need to ask yourself, ‘Why should this kid be the target of the anger?’ Why would you do that to them?

I recommend the entire article. When we talk about the “long run” here, we are talking about a run so long that you are no longer there to smooth things over or straighten things out.

In our experience, estate and trust litigation is quite likely to occur where there is an unequal distribution and the beneficiaries do not find out about it until the will is offered for probate or a trustee takes charge after death has occurred. Estate and trust litigation tends to be especially bitter. We know of cases where the parties lose all perspective and dissipate large portions of the estate.  Most attorneys who practice in this field will have had similar experiences.   The majority of cases eventually settle but getting to a settlement can be a long, expensive effort.

We include trust and estate matters in the general category of “business litigation” (although many would not) because most of our small business clients do not create an artificial boundary between their business and their personal finances. And, it is possible to extract “better practices” from litigation developments for personal financial issues, such as estate matters, just as it is for business issues.

In this case, the Times article rightly suggests that the better practice, although difficult, is to communicate openly with your intended beneficiaries.

• Email This
• Print
• Comments
• Trackbacks

The Wall Street Journal Law Blog reports that the federal judge who rendered the Borat decision has been nominated for an appointment to the U.S. Second Circuit Court of Appeals. I doubt there was an actual connection. So, we congratulate the judge and move on to more thought-provoking aspects of the story and case. The post is “In Wake of Borat Ruling, Judge Preska Nominated to 2d Cir High Five.” The decision ishere.

The case was also reported in ABAJournal in a post by Martha Neil (“’Borat’ Filmmakers Win Legal Battle”).

I have not seen the movie. But, I’m not going to discuss the movie. I am going to discuss waivers, merger clauses and the importance of understanding and resolving the ambiguities in contracts before they are signed.   

In the Borat case, the claims against the producers for fraudulent inducement to participate in the movie were dismissed because the plaintiffs signed a contract that included a waiver of all claims. The court found that the waiver, for participation in a documentary-style film, was not ambiguous.

The determination that there was no ambiguity turned on the meaning of the term “documentary-style,” which described the movie. The Court emphasized that the operative word is “style.” Thus, the movie did not need to be an actual documentary. The plaintiffs’ argument that “documentary-style” is ambiguous was unavailing. The term “documentary-style,” according the Court, is a film “displaying the characteristics of a film that provides a factual record or report.”

The claim that the plaintiff-participants were fraudulently induced to enter into the film was defeated because each contract included a “merger clause.” The participants waived their reliance on promises or statements, other than any stated in the contract, by anyone involved with the film.

Although our small business clients may never be invited to participate in a “documentary-style” movie, they are invited to sign all kinds of contracts, all of the time. Thus, the Borat story has an element of universality: the parties to a contract will be presumed to have understood the contract terms. 

And, the Borat litigation story also reminds us to be acutely aware of the merger clause in a contract. The Borat contract waiver, as is commonly the case, explicitly stated that the plaintiffs relied on no representations other than those stated in the contract. Thus, when ambiguous terms are defined, clarified or explained, it is important that the definitions, clarifications and explanations be in writing so as to become an integral part of the contract.

• Email This
• Print
• Comments
• Trackbacks

In a New Jersey case reported by Debra Cassens Weiss in the ABAJournal, an appellate court decided that a hearing must be held even when the trial court thought that the cost of litigation would far exceed the amount in dispute (“Judge Who Refused Hearing on ‘Ridiculous’ Lawyer Dispute is Overturned’). The trial court had decided the case on papers rather than hold a hearing. The court had admonished the litigants, two former law partners, with the “ridiculous” comment quoted in the story title, referring to the unfortunate prospect of continuing litigation by “two very good, very competent professionals.” 

The appellate court decided that the court has an obligation to go forward with a hearing.

New Jersey law is not normally on our agenda but the story is interesting because of the reflection it provides of human nature, not because of the law. We do not know the back story in this case. Thus, we should be careful about forming any conclusions specific to these two litigants.

More generally, it is not unusual in our practice for clients to be prepared to expend far more to fight than the battle is worth. Sometimes, genuine principles are involved (or intangibles nor easily measurable in dollars) and there is nothing more to be done than to support the client and try hold down the expense. More often, it is a matter of counseling and trying to get the clients to take a more dispassionate view of the case.

Public funds, as well as the clients’ own funds are involved, if a way can’t be found to resolve the issues economically.

• Email This
• Print
• Comments
• Trackbacks

A  recent post by Bob Dennison in the Pennsylavania Litigation Blog used an intriguing analogy, plaintiff as architect and defendant as wrecker, to make a good point about effective litigation planning at the pleading stage (“A View From The Left Side of the “v” and the Importance of Pre-Pleading Planning to Receive Compensation”).

The essential point, I think, is that a well-pleaded case should be designed artfully at the planning stage. For example, pleading causes of action that are not covered by insurance, such as intentional torts, when  suing for negligence, may ultimately “take money off the table.” However, PALB makes the point artfully using the architect/wrecker analogy so rather than elaborate further, I will simply recommend that you read the post.

• Email This
• Print
• Comments
• Trackbacks

The Connecticut Employment Law Blog often has informative and interesting posts and one of its most recent by Daniel Schwartz reports that the EEOC has issued performance/conduct FAQ’s to help employers and employees understand the ADA (“EEOC Issues FAQs for Employees and Employers on Performance/Conduct Issues Under the ADA”). CELB also provides a link to the guidelines which is reproduced here.

The CELB post also provides some informative commentary.

The FAQs provide an important resource. The premise of our blog is that practices that avoid litigation, especially in employment, also have a positive impact on the effectiveness of the organization as a workplace and as a going concern. In addition to the specific guidelines and hypotheticals, employers and employees should note the overall pattern: well understood standards that are applied even-handedly help establish a semi-safe harbor from litigation and can’t hurt performance.

• Email This
• Print
• Comments
• Trackbacks

Our thanks to the Immigration Law Answers Blog   which, in a post by Robert A. Kraft brought to our attention the reversal of LPGA of its English-Only rule (“LPGA Reverses Decision On English-Only Golfers”). We commented on the rule in aprior post.

Actually, as we understood it, the rule was not an English-Only rule but a requirement that golfers speak English for their victory speech and to communicate with the media.

In any case, our take remains the same: in the interest of avoiding litigation and implementing effective management practices, businesses considering any similar rule should carefully and closely scrutinize the “business necessity” and be sure it is genuine.

• Email This
• Print
• Comments
• Trackbacks

We are happy to see that the New Jersey Employment Law Blog is back “on the air.”   Welcome back.

The first post on its return, by Frank Steinberg, involves a New Jersey case.  It provides management lesson as valid under New York or Connecticut law as for New Jersey (“Back to Work – And Read Those Contracts!”).

The arbitration clause of a contract was enforced against an employee who did not have a command of English. Although the outcome was favorable for the employer, a quote from NJELB, in the original bold face, sums up the lesson for employers:

If employees do not have the language skills and ask you to translate the agreement for them, do it thoroughly or you run the risk of having a court refuse to enforce your agreement.

We second the advice and go one step further: do not wait to be asked. The better management practice is to offer a translation if your employee’s command of English is limited to be sure that the employee can understand the contract terms. 

Image: Babylonian Contract-tablet, inscribed in the reign of Hammurabi.  Photograph by Messrs Mansell & Co.; Wikipedia Commons.

• Email This
• Print
• Comments
• Trackbacks

For our lawyer colleagues, it is no news that a case can be won or lost on a procedural issue. For our readers who are managers and business owners, here is an example of a case that can cause you to re-think that settlement offer you turned down.

New York Civil Law blog brought the case to our attention in a recent post (“The New York Court of Appeals Revisits Timing for Summary Judgment Motion”). The case was Crawford v. Liz Claiborne, Inc., 2007 N.Y. Slip Op. 08301, 45 A.D. 3d 284 (Sup. Ct. N.Y. Co.) . According to NYCL, the case is about to be heard by the Court of Appeals, the highest appellate court in New York.

A quick review of legal concepts for our nonlawyer readers: summary judgment is a very common procedure used to decide a case based on papers because there are no material issues for trial. Under New York procedural law, the motion requesting summary judgment must be made within 120 days after filing a “Note of Issue” which is essentially a paper certifying the case is ready for trial.

In this case, the local court had its own rule, which it is allowed to have under the law; the local rule (of Supreme Court, New York County) set a deadline of 60 days after the Note of Issue. And, the defendant made its summary judgment motion but missed the 60-day local deadline while making the 120-day statewide deadline.

A few complicating facts: The missed deadline was by only a few days. The plaintiff opposed the motion only on the procedural ground that it was untimely. The “local rule,” according to the dissenting opinion, was ambiguous because there was a local court rule, which changed around that time, as well as a part (individual judge's) rule and the scheduling order did not specify a date or which rule but said simply “per local rule.”

The trial court, apparently having determined it could overlook the missed 60-day deadline, decided the motion. Its decision was to dismiss the complaint. The Appellate Division, First Department (a New York intermediate appellate court), reversed and held that an “oversight” of the local rule is not the “good cause” (a satisfactory explanation for being late) necessary to consider the motion after the local deadline is missed. The appellate court, in an unusual move, also directed transfer of the case to another trial judge. 

For lawyers, this case presents an interesting and important procedural issue. 

For clients, this case is a classic, concrete reminder of the inherent uncertainties of litigation. The defendant has a victory. Whether or not that victory will stand or the case goes to trial will now depend on the Court of Appeals’ ruling on the strictly procedural issue involving the missed local time deadline. 

After all, what is the lawsuit about?  We've gotten to this point in the discussion without needing to mention it.  Actually, this is a discrimination case based on sexual orientation.  It almost doesn't matter because now the controversy centers on the procedural rule.

Better see if that settlement offer is still on the table.

Image: 60 Centre Street, NY, Supreme Court; from NY Supreme Court Website.

• Email This
• Print
• Comments
• Trackbacks

Last week, a story by Martha Neil in ABAJournal.com reported that the LPGA’s rule requiring English fluency is likely to be tested in court (“Court Battle Likely Over LPGA’s New English-Fluency Rule”). Legal issues always seem to be more interesting when they involve well-known entertainment or sports organizations. But, the same issues are often important to not-so-well-known organizations as well.

Our reader/client base being small and growing businesses, the question arises for them: should they consider a similar rule? I believe the essence of the issue was expressed by ABA Journal’s quotation of attorney Steven Jacobs who represents plaintiffs in suits contesting English-only rules in workplaces:

While it is permissible to require workers to speak English for reasons of safety or efficiency, such a rule can also be used to discriminate on the basis of national origin.

An LPGA representative is also quoted and states that LPGA not trying to control what language the LPGA players speak to other players or their caddies. Rather, LPGA’s requirement is that players be able to give a victory speech in English and speak to their playing partners and the media in English. While LPGA’s position might be challenged in court, please note that they at least have a business-related reason for their rule.

Small business owners and managers do not need to involve their businesses in protracted and expensive lawsuits while also needlessly restricting their pool of potentially productive employees or contractors. English-fluency rules may very well make sense and be entirely defensible in some situations. The obvious example that comes to mind is telephone customer service - - it seems reasonable that English-speaking customers be able to reach someone who speaks their language. 

I understand that there are people who feel strongly about both sides of the English-only issue and I don’t mean to challenge anyone’s convictions. However, if the goal is to implement management practices to avoid litigation, if possible, or effectively manage it if not, the “business reason” should be scrutinized closely before imposing a language requirement on employees and contractors.

Image: Green with two bunkers, taken by member or employee of U.S. Air Force, Wikipedia Commons.

• Email This
• Print
• Comments
• Trackbacks

Enjoy the Labor Day holiday.

We will be back later this week.

• Email This
• Print
• Comments
• Trackbacks