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The Maryland General Assembly passed a law that takes effect January 1, 2007, and affects all Maryland employers. The new law prohibits employers from printing employee social security numbers on paychecks and other documents related to pay information. |
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It is, however, acceptable to use the last four digits of the employee’s social security number to identify the employee on paychecks and other personnel documents. Companies should begin compliance with this law now so that by January 1, 2007, they are in full compliance. |
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The Pension Protection Act of 2006 (the “PPA”) was signed into law on August 17th. Designed primarily to ensure the stability of pension plans in a time when many company’s pension plans are failing, the PPA contains the most comprehensive pension plan reforms in the past 30 years. Employers with pension plans must take action now to ensure that their plans are in compliance with the PPA. |
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The PPA also contains many significant changes that affect charitable and retirement planning, including: (1) allowing an income tax free gift of up to $100,000 from an IRA directly to a charitable organization; and (2) allowing a distribution from a deceased person’s eligible retirement plan to a non-spouse beneficiary to be rolled over into an IRA. Please contact Maurice Offit at (301) 575-0308 if you are interested in hearing more about how you can take advantage of the PPA’s charitable and retirement planning provisions. |
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Disclaimer: This newsletter is published by the
law firm Offit Kurman, P.A. It is not intended to
provide legal advice or opinion. Such advice may only be given when related to specific
fact situations. © Offit Kurman, P.A. All rights reserved. |
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BUSINESS & REAL
ESTATE GROUP |
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JESSE D. DELANOY
BERNARD S. DENICK
DAVID K. McRAE
MICHAEL N. MERCURIO
THEODORE A. OFFIT
ANDREW R. POLOTT
DAVID A. RAHNIS
GLENN D. SOLOMON
STUART H. SORKIN
RICHARD C. STERRN
JONATHAN R. WACHS |
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LABOR, EMPLOYMENT
& LITIGATION GROUP |
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ALEX M. ALLMAN
LAURA L. RUBENSTEIN
SCOTT V. KAMINS
HOWARD K. KURMAN
BRIAN A. LOFFREDO
TIMOTHY C. LYNCH
RICHARD D. MIRSKY
TIMOTHY M. MONAHAN
ERIC PELLETIER
MILLER J. POPPLETON
STEFANIE M. STEIN |
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ESTATES & ASSET
PROTECTION GROUP |
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MARY ROSE E. COOK
RAJIV K. GOEL
BRIAN W. LYNN
MAURICE OFFIT
WILLIAM M. ONORATO, JR.
STEVEN E. SHANE |
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| HEALTH CARE GROUP |
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| STEPHEN H. KAUFMAN |
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| CONSTRUCTION GROUP |
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MAX S. STADFELD
CHARLES YUMKAS |
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| Commercial Ligitation: Practical Business Advice |
Businesses as either plaintiffs or defendants often recognize – in hindsight – that certain actions or amendments of deals could have avoided, or significantly impacted in their favor, the litigation. Businesses quickly learn the effect that litigation can have on a company’s operations, finances, and ability to focus on its goals and customers. The purpose of this article is to highlight some of the issues that frequently arise in commercial litigation that can be prospectively addressed and, hopefully, help you avoid litigation altogether.
1. NON-COMPETITION AND NON-SOLICITATION AGREEMENTS – Employee non-competition and non-solicitation agreements (otherwise known as restrictive covenant agreements) are valid in Maryland and many other states, and can be an important and useful tool for a business. Such agreements are common in many sales and technology sectors, particularly where an employee leaves one employer with the first employer’s customer list, joins a competitor, and then uses the first employer’s customer list to make sales for the competitor. Similarly, employees experienced with specialized technology could severely damage a business if permitted to work for a competitor in the same field. These agreements can act as an incentive for employees to remain with a company and regulate their actions if they leave. Every business should examine: (1) whether these agreements should be in place if they are not already, and (2) whether the agreements currently in place sufficiently protect the employer while also remaining fair to the employees.
2. ARBITRATION AGREEMENTS – Arbitration can be quicker and less costly than litigation, and, in general, businesses should consider including arbitration clauses in their commercial agreements. It is important to understand that arbitration is not inexpensive, and, without employing contractual limits, may be as lengthy and involved as litigation in the courts. Consequently, businesses should draft their arbitration clauses very carefully, and consider including language regarding: (1) the forum, (2) the payment of fees (including attorneys’ fees) and costs, including whether the losing party must pay, (3) the number of arbitrators and the method for choosing them, and (4) the location of the arbitration. The American Arbitration Association (“AAA”) is commonly identified as the source for initiating arbitration, and is useful because it provides a known and reliable structure. A well drafted provision includes an option allowing the parties to agree on another structure, which is useful in circumstances when the default method may not be the right fit.
3. SPECIFIC DISCLAIMER PROVISIONS – Most corporate transaction documents include representation and warranty provisions, and also an integration provision making the written document the entire agreement between the parties. Recently, Maryland courts have held that a “general” integration clause does not bar a fraud claim, but a “specific disclaimer” can bar a fraud claim that is contradicted by specific contractual representations and disclaimers. A fraud claim brought years after a transaction can be disastrous. Fraud claims are often employed in the context of contractual disputes to circumvent statutes of limitations. Often, sellers sued for fraud must pay for their defense and any judgment out of pocket. Specific disclaimers might help avoid, or at least make much more difficult, such a fraud claim.
4. INSURANCE POLICIES – Businesses should annually review and update their insurance policies, including analyzing whether additional policies should be purchased. For example, most current property insurance policies contain so-called “mold exclusions.” Businesses should inquire as to the cost for coverage of such claims. It may be very expensive; however, mold cases are heavily reliant on expert witnesses, and the costs for defending such a claim could easily cover the insurance premium for a few years. Another type of insurance that should be considered is Employee Practices Liability Insurance (EPLI) to cover discrimination and harassment claims. Too often the investigation into these types of policies begins after a lawsuit is filed. Also, be certain that you understand your policy, including the notice provisions and whether each policy is an occurrence based or claims-made policy.
5. REVIEW AND PROTECT INTELLECTUAL PROPERTY AND TRADE SECRETS – Businesses should constantly analyze the intellectual property they own and how to protect it. If confidential or proprietary information is shared or misappropriated, businesses should move quickly to address such misuse, including filing for an injunction. In addition to patent, trademark and copyright protection, company information may also be covered by the Maryland Uniform Trade Secrets Act. A “trade secret” is defined, generally, as a formula, pattern, compilation, program, device, method, technique, or process, that (1) derives independent economic value not generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. This can be a valuable enforcement tool when faced with a potential misuse of information by a former employee or competitor.
With careful planning, forethought and consideration of the topics discussed above, some lawsuits can be avoided, or the outcome or effect of any litigation significantly altered. For more information, contact Timothy M. Monahan at 301.575.0337.
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| Offit Kurman: A Growing Firm |
Last Fall 2005, Offit Kurman opened our Maple Lawn, Maryland office in Howard County. As a result of our continued growth, we recently expanded our office space to accommodate our entire Labor, Employment & Litigation Group and our Estates & Asset Protection Group. The following five experienced attorneys have also joined our firm.
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Stefanie M. Stein is an Associate in the firm’s Litigation Group. Ms. Stein has experience in trial and appellate litigation, personal injury litigation and property damage disputes. |
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Brian A. Loffredo is an Associate in the firm’s Litigation Group.
Mr. Loffredo practices primarily in the area of complex civil litigation. |
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Scott V. Kamins is a Partner in the firm’s Labor & Employment Group where he focuses his practice in the areas of labor law, employment litigation and drafting non-competition agreements and employment contracts. |
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David K. McRae is a Partner in the firm’s Business & Real Estate Group. Mr. McRae focuses his practice on transactional, real estate, and business law. |
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Brian W. Lynn is an Associate in the firm’s Estates & Asset Protection Group. Mr. Lynn’s practice focuses on estate administration and on the tax-efficient transfer of wealth to successive generations and to charities. |
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| Offit Kurman Happenings |
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Representing a foreign corporation in the purchase of a systems’ integration business and its related subsidiaries. |
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Ongoing representation of a government contacting business involved in IT operations management, security and surveillance for a variety of military and civilian agencies and its acquisition of related companies.
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Assisted clients with the conversion of an abandoned Baltimore City commercial property into a townhouse-style three-unit lateral condominium and the conversion of an office building into an office condominium while concurrently negotiating and closing on the sale of the upper two stories. Currently, assisting a client with the conversion of its commercial building in Salisbury into an office/residential condominium, reserving the client’s development right to construct additional stories in the air space above the building.
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Resolved a dispute between two competitors involving claims of trademark infringement, trademark dilution, cybersquatting and state unfair competition involving the interplay between trademark rights and Internet domain name registration rights. |
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Represented client in negotiating a lease with the State of Maryland for the construction and leasing of facility to be located within the eastside court house complex of Baltimore City and the financing in connection therewith. |
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Developed a creative bridge financing proposal involving the purchase and temporary ownership of certain tracts of real property by the bridge lender in exchange for the bridge lender receiving, among other things, equity points in the completed projects. |
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Assisted a client with a $30 million real estate purchase transaction structured as a 3-year phased acquisition of the limited liability holding the contractual right to acquire and develop the underlying land. |
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Represented client in the acquisition, financing and preliminary development of scattered sites in Arizona and Virginia for the treatment of persons suffering from Alzheimer’s disease. |
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Resolved an intellectual property case on behalf of a large franchisee against a former employee for a dispute concerning customized software copyright and license rights. |
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Prepared an executive stock bonus plan for the issuance of restricted stock to certain senior employees including terms of repurchase and disposition of shares. Also, designed a stock appreciation rights plan and a stock option plan for an architectural firm to incentivize junior associates. |
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Resolved a personal injury claim alleging exposure to mold in an apartment unit owned by a client, including insurance coverage issues relating to the claim. |
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