Labor and Employment
Office Romance: Navigating Workplace Relationships and Managing Legal Risks
Dear Sarah, Two of my employees have started dating, and I’m worried it might affect their work or lead to complaints from others. Should we have a formal policy on workplace relationships? Are we even allowed to have such a policy? Yours in keeping it professional this Valentine’s Day (and beyond), The HR Cupid The HR Cupid, I can understand your concern. Office relationships, while not uncommon, can quickly become a tricky issue for employers to manage. Whether it's gossip, a drop in productivity, or potential legal claims, workplace romances can create significant risks for both employees and the company. The good news is, with a clear policy and proactive approach, you can mitigate these risks while still allowing employees to navigate their personal lives in a professional manner. Can You Have a Policy on Workplace Relationships? Yes, you absolutely can have a policy on workplace romances. In fact, it’s strongly recommended that employers do so. While outright banning office relationships is typically unreasonable (and likely unenforceable), a policy that establishes clear expectations for conduct can help mitigate potential risks. The reality is that office romances can open the door to several issues, including sexual harassment, retaliation, favoritism, and even workplace violence in extreme cases. These risks can lead to significant legal liabilities if not managed carefully. A thoughtful, well-drafted policy can go a long way in helping you prevent problems before they arise. What Are the Risks of Office Relationships? There are a number of risks to consider when office romance enters the picture: Sexual Harassment Claims: One of the most common legal risks of office romances is sexual harassment. These claims often arise when one employee feels their personal space or boundaries are violated by a romantic advance, particularly in relationships between supervisors and subordinates. Even consensual relationships can lead to claims if other employees perceive favoritism or if the relationship sours. Public displays of affection, or a sudden shift in the dynamics between employees, can also create uncomfortable work environments and lead to hostile work environment claims. Retaliation: If an employee rebuffs unwanted advances or ends a relationship, retaliation can become a concern. For example, an employee might claim that they were treated unfairly or passed over for promotions as a result of rejecting or ending a romantic relationship. Retaliation claims are often rooted in employees feeling that they were punished for not engaging in or maintaining a relationship. Favoritism and Conflicts of Interest: Relationships between supervisors and subordinates carry the risk of favoritism claims. Employees may feel that the romantic couple is receiving special treatment, whether in terms of assignments, promotions, or performance reviews. Even if favoritism is not actually occurring, the perception of bias can cause significant issues with morale and productivity. Workplace Violence: While rare, workplace violence stemming from a failed romance or unrequited affection is a very real possibility. Employers are responsible for maintaining a safe work environment, and if a situation involving a breakup or unreturned advances escalates into violence, the company could be held liable if they failed to manage the risks. How Can Employers Minimize Risk? There are several steps employers can take to reduce the risks associated with office relationships: Bar Romance Between Supervisors and Subordinates: Relationships between supervisors and subordinates are among the riskiest for sexual harassment claims and can lead to serious conflicts of interest. Many employers choose to prohibit these types of relationships or require the employee in the supervisory role to disclose the relationship so that any necessary adjustments can be made. A direct reporting relationship between a supervisor and their partner could create significant problems, and it’s often best to ensure that there is no overlap in their work responsibilities. Implement a “Love Contract”: A “love contract” is an agreement between two employees in a romantic relationship that affirms their relationship is consensual and not a form of sexual harassment. It can also include a reminder that the employees are expected to maintain a professional demeanor while at work. While not a guaranteed shield against legal action, it can provide a level of transparency and reduce the risk of future claims. Ensure Access to Sexual Harassment Training and Reporting Channels: One of the most effective ways to minimize the risk of sexual harassment claims is to provide ongoing sexual harassment training for all employees. This training should clearly define inappropriate behaviors, outline reporting procedures, and reassure employees that complaints will be taken seriously. Additionally, offering multiple, accessible reporting channels (such as anonymous hotlines or online forms) can help ensure that employees feel safe reporting any issues before they escalate. Communication and Monitoring Policies: In today’s digital age, communication often takes place via email, company chat systems, or even social media. Employers should make it clear that digital communications within the workplace are monitored and that harassment can take place through these channels as well. Having a policy that outlines acceptable use of company technology can act as a deterrent and ensure employees understand the expectations for professional conduct online. What Should Employers Do When Things Go Wrong? If a workplace romance goes sour, the situation can quickly escalate. The best defense for an employer is to ensure that all preventative measures—policies, training, and monitoring—are in place and adhered to. Courts will look at whether an employer has taken reasonable steps to address potential issues and mitigate risks. If a claim is filed, employers who have documented their policies, communicated expectations clearly, and enforced those policies will be in a better position to defend themselves. Additionally, any documentation related to the relationship (such as the disclosure of the relationship or a signed love contract) can be useful in protecting the company’s interests. Final Thoughts: Office Romance, Yes—But With Caution While you can’t stop love from blooming in the workplace, you can take steps to ensure that it doesn’t create legal or professional problems. By implementing a clear policy on workplace relationships, providing sexual harassment training, and setting expectations around professional behavior, you can manage the risks and allow your employees to balance their personal and professional lives effectively.
February 14, 2025
Commercial Litigation
Lenders Must Act Fast to Recover Funds in Fraudulent Loan Schemes
Lenders get into a groove with originating loans with existing and new borrowers. So often, the closing comes and goes, and the monthly payments commence without any trouble. But then a borrower comes along who seeks to defraud the lender. If the closing goes through, with the lender transferring out the funds and the funds making their way into the borrower’s account, the lender then faces significant challenges in getting that money back. The timing of the lender’s discovery of the fraud usually determines the odds of the lender clawing back the funds. With any luck, the lender will discover the fraud when it goes to record the documents with the local property records office and finds that the borrower had misrepresented that they would provide the lender with the first priority lien on the property and, in fact, had already obtained mortgages securing the property. Regardless of how quickly the lender learns of the fraud, it is crucial that the lender take immediate action. In New York and New Jersey, the lender may consider filing a complaint and order to show cause seeking to stop the borrower from transferring the funds out of their possession. These types of lawsuits require moving fast and detailing the fraud to the extent that the lender can. Keeping complete and accurate records for each loan is crucial. For instance, when it comes time to go before a judge and show where the fraud occurred, central to that are the loan documents in which the borrower made the misrepresentations to the lender. Without proof of those misrepresentations, it becomes very difficult to convince a court that fraud has occurred and unlikely that a court would effectively freeze the borrower’s assets. Occasionally, the title insurance company may extend coverage to these types of incidents, but there is no guarantee of coverage. Also, the title insurance company’s decision on whether coverage exists may take some time. That time can be very valuable for the lender to go after the borrower and may be the difference between recovering the funds or the borrower moving the funds out of the lender’s reach. A lender acting quickly in these situations is also important because if the borrower has defrauded this lender, the borrower has probably defrauded other lenders—and those other lenders may already be chasing down their funds. That borrower may have already transferred the funds out to hard-to-reach accounts, spent the money, or even thrown a wrench in the process by filing bankruptcy. Lenders that learn of the fraud hire counsel and act within hours, rather than days or weeks, maximize their chances for success.
February 13, 2025
Family Law
New York Takes a Progressive Step with Uncontested Joint Divorce
On January 31, 2025, the Chief Administrative Judge of the State of New York announced an inventive pilot program designed to change how the court system processes divorces, introducing the concept of "uncontested joint divorce" to simplify the divorce process for New Yorkers. While uncontested divorces have been available to New Yorkers since 2010, this new route to divorce allows eligible couples to file and sign their divorce papers together, neither party taking the role of “plaintiff” or “defendant.” It is targeted at reducing the emotional and financial burdens often associated with traditional divorce proceedings. Unlike the traditional divorce process, where one spouse typically initiates the proceedings by alleging one or more of the statutory reasons for ending the marriage, joint divorce recognizes that couples can maturely agree to end their marriage without assigning blame, consenting to a joint divorce on the uncontested divorce basis of the “irretrievable breakdown” in the marital relationship for a period of at least six months (otherwise known as a “no-fault” divorce). To qualify for a joint divorce, both spouses must mutually consent to the divorce and agree on all terms relevant to their particular marital elements, including property division, child custody, parenting time, and support arrangements. Couples can submit a single petition outlining their settlement, which can lead to quicker resolution times compared to traditional divorces and forestall needless tension as they navigate and acclimate themselves (and their family) to their new status as a divorced couple. This program presents various advantages for couples seeking to dissolve their marriages amicably. Not only does it hope to foster a positive environment for negotiation, but it also acknowledges the emotional strain of divorce and seeks to aid in promoting healing over conflict. For couples with children, the joint divorce framework can pave the way for healthier co-parenting arrangements by encouraging collaboration and mutual respect. By prioritizing the well-being of children, parents can establish a supportive foundation for their post-divorce relationship. To provide fairness and promote healthy communication, the program encourages couples to engage in mediation or counseling services before finalizing their joint petition. This step aims to ensure that both parties fully understand the implications of their decisions and maintain a constructive dialogue. By eliminating contentious litigation, joint divorce aims to reduce legal fees for couples. Since the need for prolonged court battles is minimized, couples can save money and allocate resources more effectively. And though the joint divorce process is designed to be cooperative, the court’s ultimate involvement will not be diminished inasmuch as the courts will still examine every submitted agreement for compliance with state laws and to ensure that agreements are fair, reasonable, not overreaching, and in the best interests of any children involved. The courts can and will reject agreements that do not comply with the legal and equitable requirements of New York’s laws. This new program represents a significant positive shift in New York's approach to processing divorces. It reflects changing societal attitudes toward marriage, divorce, and conflict resolution. As more couples prioritize cooperation and transparency, this reform may lead to a cultural shift in how divorce is perceived and managed. As couples embrace this new paradigm, it is essential for those considering divorce to stay informed about their rights and options under this law. Consulting with experienced family law attorneys can help ensure that all agreements are legally sound and that the best interests of all parties involved, particularly children, are upheld.
February 12, 2025
Estates and Trusts
Not Realizing the True Value of “Stuff”
This is Part 6 in a Series of the Top 10 Mistakes Made When Planning for Art and Other Collectibles: A Guide for Professionals and Their Clients. For federal estate and gift tax purposes, transfers are valued at the “fair market value” of the asset on the date of transfer. One of the more common estate tax audit issues is the failure to properly report the value of items of tangible personal property on a decedent’s Form 706. Similarly, failing to properly account for the value of tangible personal property transferred by inter vivos gift may result in the audit of a client’s Form 709. Despite their upfront cost, in order to identify the true value of art and collectible assets, clients should obtain professional periodic appraisals. Appraisals serve many functions, including estate and gift tax reporting, such as establishing value for insurance purposes, establishing bidding parameters for assets at auction, obtaining loans with tangible personal property serving as collateral, and planning for future gifts. For tax purposes, fair market value is defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts.” Although the most persuasive indication of fair market value is an actual contemporaneous sale of the property in question, in the absence of such a sale, an appraisal is typically required to establish the taxable value of the asset subject to transfer. Under current regulations, a reported gift of tangible personal property that exceeds $5000 in value must be substantiated by a qualified appraisal conducted by a qualified appraiser. The Pension Protection Act of 2006 (the “Pension Act”) established new requirements for what it means to have a “qualified appraisal” for tax reporting purposes. A qualified appraisal must contain a declaration that the appraiser (i) understands that a substantial or gross valuation misstatement resulting from an appraisal of the value of the property that the appraiser knows, or reasonably should have known, would be used in connection with a return or claim for refund, may subject the appraiser to a civil penalty, and (ii) understands that an intentionally false or fraudulent overstatement of the value of the appraised property may subject the appraiser to civil penalty for aiding and abetting an understatement of tax liability. A qualified appraisal of tangible personal property must contain the following: a detailed description of the property; the physical condition of the property; the date or expected date of the contribution; the terms of any agreement or understanding entered into or expected to be , entered into by or on behalf of the client that relates to the use, sale or other disposition of the property, including any restrictions on the use or disposition or reservations of rights conferred on anyone other than the donee and any earmarks for particular use; the name, address and taxpayer id number of the appraiser; a detailed description of the appraiser’s educational background and qualifications; the date on which the property was valued; the appraised fair market value of the property; the method of valuation used to determine the fair market value; the specific basis for the valuation; and a description of the fee arrangement between the client and the appraiser. A qualified appraisal is prepared by a qualified appraiser defined as an individual who: has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in the regulations; regularly performs appraisals for pay; and meets other requirements that the IRS has prescribed in the regulations. An individual cannot be a qualified appraiser with respect to any specific appraisal unless she: demonstrates verifiable and passing professional or college level education and experience or earned a recognized appraiser designation from a generally recognized professional trade or appraiser organization or as part of an employee apprenticeship program or educational program; and the education and experience is in valuing the property type being appraised. In addition, the appraiser must make the following declaration: “I understand that my appraisal will be used in connection with a return or claim for a refund. I also understand that, if there is a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund that is based on my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been at any time in the three-year period ending on the date of the appraisal barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U.S.C. 330(c).” If the appraisal or the appraiser does not meet all of the above requirements, the resulting valuation report will not be considered as any evidence of value, and the IRS will conduct its own appraisal to determine the fair market value of the asset subject to transfer. In certain instances, providing the IRS with an appraisal that adheres to all of the requirements of the Pension Act may not help with avoiding an estate or gift tax audit, but provides a powerful bargaining tool. For example, regardless of the asset composition of the remainder of the estate, if a decedent dies owning artwork that has a claimed value of $50,000 or more, the appraisal will be subjected to consideration by the IRS Art Advisory Panel, comprised of a body of art industry experts who review and evaluate the acceptability of artwork appraisals submitted by taxpayers in support of claimed fair market value. When a qualified appraisal is submitted, you and your client may find that the IRS is more willing to compromise on valuation issues.
February 11, 2025
Estates and Trusts
Protecting Your Family and Future: Essential Estate Planning for the LGBTQ+ Family
Estate planning is a critical part of securing the future for any family, and for LGBTQ+ individuals, it is particularly important given the legal complexities and challenges that may arise in the current political climate. There have been several legal shifts that affect LGBTQ+ families’ rights and protections, which makes it even more essential for LGBTQ+ families to ensure their estates are properly considered, planned, and protected. Below is a simple checklist of estate planning documents that LGBTQ+ families must consider to safeguard their interests, particularly during a time of legal uncertainty and inequitable policies: Last Will and Testament When one thinks of an estate plan, a will is what likely comes to mind: it is considered a fundamental estate planning document. A will directs how a person's property, whether real or personal, should be distributed after death. For LGBTQ+ individuals, a will is especially important because, without one, state laws dictate who inherits your estate and in what proportion. With only limited exceptions, state laws do not recognize non-biological family members, such as a partner or even a registered domestic partner: close friends who are more like family are not recognized in any state. A will provides clarity to ensure that your relationships and wishes are honored, regardless of your family makeup. Why a will matters for LGBTQ+ individuals: If you have a partner but are not legally married, or if you want to leave property or assets to a close friend or chosen family member, a will ensures that these individuals are recognized as your beneficiaries. It also allows you to name the person you choose to oversee the distribution of your assets. While many states require that your biological family is informed of your death and provided a copy of your will, most courts are fiercely protective of directives in a will. As a result, documenting those wishes is imperative to ensure your wishes are carried out in the way that you desire. Without a properly executed will, most states simply distribute assets to your biological family members. Healthcare Directives Advanced healthcare directives such as a healthcare proxy and living will specify both the person you wish to speak for you in a healthcare setting and the type of care you would want (or refuse) in the event you cannot articulate those wishes. The health care proxy appoints an agent who knows you, understands your wishes, will communicate those wishes, and advocate for your rights in a health care setting. The living will outlines the type of care you want including memorializing your preferences for medical treatment or discontinuance of treatment. A living will sets forth whether you want life-sustaining treatment and how you would like to be treated in end-of-life scenarios. Why healthcare directives matter for LGBTQ+ families and individuals: In the event of incapacitation, biological family members may not always know or respect your wishes, particularly if your biological family does not support your identity, lifestyle, or relationships. Naming a healthcare proxy and having a living will in place ensures that your healthcare decisions are in line with your desires, even if your family disagrees or is uninvolved in your life. Without a healthcare proxy, a family member (who may not understand or accept your relationships) may gain control over your medical decisions. Without documentation, most states allow your next of kin to make these decisions, potentially preventing your partner from being involved in your care. Nominating your partner or chosen friend provides them with the legal authority to make decisions consistent with your wishes. Durable Power of Attorney A durable power of attorney (POA) allows you to designate someone, referred to as an agent, to manage your financial matters upon your incapacity. A POA can be tailored to the specific powers you wish to bestow upon your agent. For example, your agent can access your bank accounts, pay your bills, apply for public benefits, and manage investments on your behalf. Why a durable power of attorney matters for LGBTQ+ individuals: LGBTQ+ couples are not recognized as legal next of kin unless they are legally married and, therefore, will face complications if their relationship is not legally formalized, as most financial institutions are unable to speak with others without authority. This is especially essential if partners financially depend on one another but have separate financial accounts; without a POA in place, your partner cannot access your finances in the event of your incapacity. Having a POA ensures that your partner, rather than a biological family member who may not be involved in your life or support your relationship, has the authority to handle your finances, if necessary. Trust A trust is a key estate planning tool that allows you to manage your assets efficiently during your life and distribute your assets after your death without the necessity of probate (which is required with a Last Will and Testament). A trust also allows you to appoint a successor trustee, a person in charge of your trust assets if you can no longer manage your own trust assets. There are different types of trusts that can accomplish many goals within an estate plan, but the common theme is that assets funded in a trust avoid probate, a lengthy and expensive court process. In addition to avoiding probate, trusts do not have to be authenticated by a court or shared with your biological family members, as is the case with a Last Will and Testament. Why a trust matters for LGBTQ+ individuals: A trust can ensure that assets are passed on according to your wishes, even in cases where state inheritance laws might not recognize your partner or chosen family. Trusts can also be structured to provide for specific needs, such as the care of a dependent partner or a loved one, long after you die. Importantly, trusts are much more difficult to contest than wills, thus ensuring that estranged biological family members will not be able to easily upend your carefully constructed estate plan if they do not agree with your choices or your relationships. A trust is also a private document that others cannot access in the same way as a Last Will and Testament, which is a public document that is published in court. Beneficiary Designations Beneficiary designations ensure that your assets pass directly to your loved ones without going through probate. A beneficiary designation can be made on bank accounts, brokerage accounts, insurance policies, and retirement accounts. Relationships can change over time, and therefore, beneficiary designations should be reviewed and updated regularly to reflect your current wishes. Why beneficiary designations matter for LGBTQ+ individuals: If you have a domestic partner or chosen family members, it is crucial to ensure that your beneficiary designations align with your intentions. In most cases, financial institutions will not recognize a domestic partner or non-biological family members unless you have explicitly named them as beneficiaries on your financial accounts and policies. Beneficiary designations are also private and financial institutions are not at liberty to disclose those named as beneficiaries on your accounts after your death. Letter of Intent While not legally binding, a letter of intent can provide your loved ones with important details and intentions regarding why you constructed your estate plan the way that you did. For example, if you decide to disinherit a biological family member from an estate distribution, the reason for the exclusion can be articulated in the letter in a way that cannot be explained in the estate planning document itself. Why a letter of intent matters for LGBTQ+ individuals: If your estate plan is one that leaves out next of kin or biological family members, a letter of intent can provide further proof of your wishes related to your estate distribution. Letters of intent can also ensure that your funeral or memorial service reflects the way you wish to be remembered, celebrating your identity and your values. Letters of intent can also be entered into a court proceeding as evidence in an estate contest to further outline your rationale for the disinheritance of estranged family members. Guardianship Documents for Children It is vital for any parent to document guardianship of their minor child in the event of the parent’s death. Documenting a guardianship designation ensures that upon your passing, your children will be cared for by the person or the people you designate, not the person that a court may choose. Why guardianship documents for children matter for LGBTQ+ individuals: If you are an LGBTQ+ parent, establishing guardianship is incredibly important, especially if you are not biologically related to your child. In some cases, your biological family members may challenge your partner's ability to care for your children upon your death, particularly if you are in a non-married partnership. Establishing guardianship and memorializing your choice of guardian for your minor children provides clarity, protects your partner’s rights to care for your children, and safeguards the sanctity of your family structure. Estate planning is a crucial step for every individual, but it takes on an added level of importance for LGBTQ+ individuals, especially during times of legal uncertainty and political turmoil. With the right documents in place, you can be confident that your wishes will be respected and that your loved ones are protected, regardless of legal challenges or changes in administration. Estate planning empowers you to take control and secure the rights of your partner, your children, and your chosen family.
February 11, 2025
Immigration Law
What to Expect in the 2025 H-1B Season
The 2025 H-1B Cap Season is upon us, along with a new administration. There will likely be numerous changes at United States Citizenship and Immigration Services (USCIS) regarding policy and regulation, but in the immediate term, let’s take a look at the upcoming H-1B lottery and what we can expect. Increased Application Fee The filing fee for H-1B lottery applications has increased significantly for this cap season, jumping to $215 per application. USCIS increased fees across the board last year and has provided a fee calculator to assist petitioners and applicants: Calculate Your Fees | USCIS. Site Visits and Increased Compliance Recent rule changes at USCIS have expanded compliance requirements for H-1B employers. While site visits have long been a part of the H-1B program, the increase in third-party worksites and remote work has prompted USCIS to adjust enforcement accordingly. Additionally, worksite inspections and stricter enforcement of immigration rules are expected to increase under the new administration. Don’t Forget the H-1B for Entrepreneurs Individuals who own more than 50% of the sponsoring H-1B business can now qualify for H-1B status. These new petitions are limited to an initial 18-month validity period but represent a significant opportunity for entrepreneurs who previously would have missed out on the H-1B lottery. Revisions to H-1B Specialty Occupations Regulatory updates to the definition of “specialty occupation” have been implemented by USCIS, tightening key qualification areas related to the proposed position and the employee’s education. Specifically: Positions requiring a general or nonspecific degree will no longer qualify for H-1B purposes. Individuals with a general degree must demonstrate how their coursework directly relates to their proposed position. Employers must justify how each accepted degree is directly related to the role when multiple degree fields are listed as acceptable qualifications. These changes add complexity to certain occupations and underscore the importance of seeking legal advice early in the H-1B lottery process. Expect the Unexpected With a new administration taking the reins, significant changes to legal immigration policies are likely in the coming months and years. While there may not be enough time to implement major changes before this year’s H-1B lottery, we could see slowdowns in USCIS processing and potential disruptions in visa issuance.
February 10, 2025
Commercial Litigation
Virginia Sees Surge in Civil Lawsuits in 2024: How to Avoid Collection and Eviction Litigation
Civil lawsuit filings in Virginia's General District Courts increased more than 6% in 2024. The biggest increase? Warrants in debt (collection lawsuits) increased by 27%. A warrant in debt is a civil lawsuit to pursue recovery of money damages, usually due to unpaid debts and accounts receivable. Except for personal injury or wrongful death claims, Warrants in Debt are limited to a maximum recovery of $25,000. By contrast, unlawful detainer filings decreased by 8%. An unlawful detainer is an eviction lawsuit to pursue and obtain possession of real property (real estate) and unpaid rental charges, if applicable. There is no limit to the rental charges that can be pursued in an unlawful detainer filing. Virginia’s Circuit Court civil filings increased modestly by 4% compared to 2023. Virginia Circuit Courts generally hear civil and commercial claims involving controversies of more than $25,000, along with family law, probate and estate claims, and real estate title claims, among other matters. Full data on 2024 legal filings from the Supreme Court of Virginia can be found here: 2024 Virginia General District Court filing data & 2024 Virginia Circuit Court filing data. Landlords, tenants, property managers, lenders, creditors, and consumers in Virginia can take proactive steps to prevent costly litigation. Understanding your rights and obligations can minimize financial risks and avoid lawsuits related to unpaid debts or evictions. Establish Clear Agreements For landlords and creditors, well-drafted lease and loan agreements help prevent disputes. These should clearly define: Payment terms, due dates, and penalties for nonpayment. Responsibilities for property maintenance (landlords) and interest rates (creditors). Legal remedies in case of default. Tenants and consumers should carefully review contracts before signing and seek clarification on any unclear terms. Maintain Open Communication Early communication can prevent minor issues from escalating. If you are a tenant, customer, or consumer behind on payments, consider: Informing landlords or creditors of financial difficulties. Requesting a payment plan, forbearance, or temporary extension. Keep records of all communications and agreements. Landlords and creditors should consider offering reasonable repayment options where feasible, as these are more efficient than litigation. Follow Legal Collection and Eviction Procedures Virginia law requires strict compliance with applicable eviction and collection procedures before pursuing eviction or debt collection lawsuits: Landlords must issue a proper notice of lease violation to tenants depending on the grounds sought for eviction. Creditors generally should send a formal demand letter before pursuing legal action. Utilize Mediation and Alternative Solutions Mediation can be a cost-effective way to resolve disputes without court involvement. Courts often encourage, but normally do not mandate, negotiations between parties to explore mutually beneficial solutions. Understand the Legal Process and Consequences If legal action becomes necessary: Landlords must file an Unlawful Detainer for eviction, attend a court hearing, and obtain a Writ of Eviction if a judgment is granted. Creditors must file a warrant in debt or other applicable lawsuits and obtain a court judgment before pursuing wage garnishment or other collection means. Tenants and consumers should respond promptly to court notices to avoid default judgments. Seek Legal Guidance When Needed Landlords, tenants, creditors, and debtors facing complex legal issues should consult an attorney to ensure compliance with Virginia law and protect their rights. By taking these proactive steps, all parties can reduce the risk of eviction and collection lawsuits, fostering more stable financial and housing relationships.
February 7, 2025
Family Law
Defending Women from Gender Ideology an Individual’s Sex Is Not a Simple Matter
On January 20, 2025, President Donald Trump issued the executive order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” This directive mandates that all federal agencies recognize only two biological sexes -- male and female -- defined at conception. It requires the replacement of the term “gender” with “sex” in official documents and policies and prohibits the use of gender-affirming language and practices within federal operations. Additionally, the order restricts the use of federal funds for gender-affirming care and disallows self-selection of gender on government-issued identification, such as passports and visas. The executive order’s strict binary definition of sex may conflict with existing anti-discrimination laws that have been interpreted to protect individuals based on gender identity. Notably, the Supreme Court’s decision in Bostock v. Clayton County (2020) held that discrimination based on gender identity or sexual orientation constitutes sex discrimination under Title VII of the Civil Rights Act of 1964. By mandating a binary understanding of sex, the order could undermine these protections, leading to potential legal challenges. The order rescinds previous directives that promoted diversity, equity, and inclusion (DEI) within federal agencies and among federal contractors. This includes the revocation of Executive Order 11246, which had prohibited discrimination by federal contractors and required affirmative action to ensure equal employment opportunities. The removal of these protections may lead to increased discrimination claims and legal disputes concerning employment practices. By prohibiting self-selection of gender on federal identification documents, the order may create conflicts with state policies that recognize non-binary or transgender identities. This inconsistency could lead to legal challenges regarding the recognition of gender identity across different jurisdictions and the potential violation of individual rights to privacy and equal protection under the law. The prohibition of federal funding for gender-affirming care, including within federal prisons, raises legal concerns related to the Eighth Amendment’s prohibition against cruel and unusual punishment. Denying necessary medical care to transgender individuals in federal custody could result in litigation alleging deliberate indifference to serious medical needs. Civil rights organizations, including the American Civil Liberties Union (ACLU), have signaled intentions to challenge the executive order in court. Legal arguments are likely to focus on conflicts with established anti-discrimination laws, constitutional protections under the Equal Protection Clause, and precedents set by the Supreme Court affirming the rights of transgender individuals. President Trump’s executive order represents a significant shift in federal policy regarding the recognition of sex and gender. Its implementation is poised to have far-reaching legal implications, particularly concerning anti-discrimination protections, federal employment practices, identification policies, and access to medical care. As legal challenges emerge, courts will play a crucial role in determining the order’s alignment with existing laws and constitutional principles.
February 6, 2025
Labor and Employment
Sports Betting in the Workplace: Ensuring the Super Bowl and March Madness Don't Cause Legal Madness and Super Problems
Dear Sarah, My employees want to do a fantasy football league. I don’t really care as long as it doesn’t mess with their work. Is there any reason I need to worry about this, or can I just let them go at it? – Janet "I’m Not the HR Police" from Accounting It’s the season for sports betting excitement, with the Super Bowl upon us and March Madness just around the corner. Your employees are likely buzzing with talk of squares, brackets, and maybe even some secret side bets. While these friendly competitions can boost morale and foster camaraderie (especially for remote or hybrid teams), there are some legal considerations to keep in mind. Because as much fun as a bracket challenge can be, sports betting could land you in a legal bind if you're not careful. Is Workplace Sports Betting Legal? Thirty-eight states and Washington D.C. have legalized sports betting in some form since the U.S. Supreme Court struck down the federal ban in 2018. But here’s the kicker: the regulations vary widely. Some states have specific exceptions that allow for “social gambling,” meaning office pools can be permissible if they meet certain conditions, like ensuring no one running the pool profits. The rules on what qualifies as a “social” game and what constitutes “illegal” gambling can be murky, and those rules are still evolving. For instance, New York introduced a bill in 2023 to specifically legalize Super Bowl squares. Gambling and unlicensed sports betting, including office pools, are prohibited in many states and under the Interstate Wire Act of 1961 (IWA) and the Uniform Internet Gambling Enforcement Act of 2006 (UIGEA). The IWA makes it illegal for anyone in the U.S. to place or receive wagers on any sporting event or contest that involves interstate or foreign commerce. The UIGEA criminalizes the act of accepting funds for unlawful internet gambling, specifically by those "engaged in the business of betting or wagering." With the rise of remote and hybrid work setups, there's an increased risk that office pools could cross state lines, triggering the laws of multiple states and federal gambling regulations., So while you might think it’s just a friendly office competition, the law might say otherwise in certain jurisdictions. Understanding Which State Laws Apply Modern companies are no longer limited to hiring people from the state in which they are based, and remote-first businesses often have employees spread across multiple states with differing legal stances on sports betting. In most cases, the laws that govern sports betting are determined by where employees are physically located. If an employee is based in a state where sports betting is illegal, they may be restricted from participating in sports betting activities, regardless of whether the company itself operates in a jurisdiction where betting is legal. Companies with large, distributed teams need to have systems in place to track the physical location of employees and assess legal requirements accordingly. This is where working with a payroll provider, human resources tools, or compliance experts can be incredibly valuable in staying informed about location-based regulations. The rise of fully remote and hybrid work models has made this issue even more complex. For companies with employees working remotely from different states, where the employee is physically working from at any given time becomes key. For example, if an employee works from a state where sports betting is illegal, they may not be permitted to place bets, even if they are working for a company based in a state where the activity is allowed. If a company is headquartered in a state where sports betting is legal, but some employees are working remotely from states where it’s banned, the company may need to consider how to handle internal policies and even provide guidance about prohibited activities. Consider Non-Monetary Alternatives: Prizes Don’t Have to Be Cash The risk of violating gambling laws can be reduced significantly when the pool doesn’t involve money. You could opt for fun, non-cash prizes like extra time off, a team lunch, or even just bragging rights. These types of prizes keep things light and engaging without the potential legal risks associated with monetary rewards Maintain Productivity Amidst the Madness Between filling out brackets and selecting squares, productivity could take a hit. If employees are sneaking off to check scores, make sure you set expectations about what’s acceptable during work hours. Some companies have implemented policies where pools and betting activities are restricted to non-work hours, or at least during designated breaks. This helps mitigate the negative impact on productivity and keeps employees engaged without the legal headaches. Mitigate Common Risks with Written Policies A well-drafted company policy on sports betting can help minimize legal risk and clarify the boundaries for employees. A “no betting” policy or a policy that outlines clear, specific rules for office pools is a great start. An effective company policy on sports betting should touch on: Participation: Restrict participation to employees in states where it’s legal and clarify eligibility criteria. Emphasize that participation should always be voluntary to respect those who choose to opt out for personal, religious, or addiction-related reasons. Profits and Prizes: To avoid crossing into illegal territory, ensure that the person running the pool isn’t taking a cut of the money. This is a common rule in states that allow office pools: the organizer must not profit in any way. Be sure to also comply with any local laws that limit or restrict prize money. If your pool will offer non-monetary prizes, outline them in your policy. Procedures and Expectations: Prohibit employees from using work devices or company time to organize or manage pools. Encourage participation during breaks or outside of work hours. You should also establish procedures to address any potential complaints or violations that may arise to ensure fairness and transparency. Takeaway Where legal, office sports betting pools can be a great way to build morale and camaraderie, but they require careful planning to comply with the law. With the proper planning and compliance with the relevant laws, you can foster a fun and compliant workplace environment that avoids unnecessary risks.
February 5, 2025
Immigration Law
What is an H1B and Who Should Know About It?
H1B – Specialty Occupation The H-1B nonimmigrant visa allows companies and other employers in the United States to temporarily employ foreign workers for up to six years in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent. H-1B specialty occupations may include fields such as architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts. Who Needs to Know About H1B visas? The H1B is a very popular visa category as it can be very useful for a large number of potential applicants. So, who can benefit from this flexible employment-based visa? Students completing their studies in F1 status who are graduating with a bachelor’s or advanced degree are designed to be the typical H1B applicants. Specific provisions exist to assist the transition from OPT to H1B. Students who have multiple years of OPT ahead of them should also look carefully at the H1B visa as it is still a lottery, and they should maximize their attempts to make the lottery; Individuals with other nonimmigrant visas that don’t allow for employment (H4 dependents, etc.) or are running out of validity period (L1B, etc.). Professionals who are working in a status that ties them to a specific employer such as L1 visa holders or E visa holders. Professionals who are abroad – there is no geographic limit on H1B lottery submissions. Individuals who need a visa status that provides “dual intent” to allow them to easily pursue an employment-based green card in the United States. H1B Cap and the Lottery The number of new H1B Nonimmigrant visas is limited by law to 65,000 a year, and they must be submitted before April 1 for jobs that begin October 1 of that same year. In addition, there are an extra 20,000 H1B visas available for beneficiaries who hold a US master’s degree. When there is anticipated demand for more than the 85,000 available H1B visas, the USCIS is required to conduct a lottery for the selection of H1B visas. The current H1B lottery takes place in multiple stages. Initially a lottery for H1B applicants who hold US master’s degrees is conducted. Then, the remaining US master’s degree applicants are added to the larger applicant pool, and a lottery for the remaining 65,000 available visas is conducted. Finally, a lottery is conducted in the summer for any unused H1B visas. This process is conducted electronically, and selected applicants are informed very quickly if they have made the H1B Cap. Cap Exempt Employers H-1B workers who are petitioned for or employed at an institution of higher education or its affiliated or related nonprofit entities, a nonprofit research organization, or a government research organization are not subject to the H1B cap. These H1B petitions may be filed at any time and are not subject to the lottery rules. Key Aspects of H1B Petitions Employers should be informed about all the aspects of H1B nonimmigrant workers as regulations cover their placement, pay, and qualifications. As discussed, H1B workers must hold at least a bachelor’s degree, and they must also be employed in a position that at least requires the equivalent of a bachelor’s degree. The definition of specialty occupation is complex and requires careful review. Dependents of H1B visa holders can also obtain H4 status. However, H4 status does not by itself allow for work authorization. Only the spouses of H1B visa holders with an approved Immigrant Worker Petition that is subject to backlogs in obtaining permanent residence can apply for work authorization in H4 status. Fees H1B Petitions require filing fees to be paid to the Department of Homeland Security. The US immigration service is fee-based and relies entirely on these fees to provide its services. The fees for H1B petitions are complex and they can be significant. Below, please find the current breakdown of H1B petition filing fees; there is also an optional additional premium processing fee should that service be available for the H1B Cap. Below is a list of the current fees with a higher range provided for employers that have more than 25 employees: H1B Registration fee, to participate in the lottery: $210 Base Nonimmigrant petition filing fee: $460 - $780 Asylum program fee: $300 - $600 Fraud prevention and detection fee for all new H1B Petitions: $500 AICWA Fee (Imposed by the American Competitiveness and Workforce Improvement Act of 1998): $750 – for employers with 1 to 25 full-time employees $1500 – for employers with 26 or more full-time equivalent employees Public Law 114-113 Fee, only applicable for employers with 50 or more employees and more than 50% of employees are working under H1B or L1 status: $4,000 Premium Processing Fee, guarantees a response from USCIS on a petition in 15 days: $2,805 The Labor Condition Application H1B petitions must be accompanied by a certified Labor Condition Application from the Department of Labor. This application includes certain attestations, a violation of which can result in fines, bars on sponsoring nonimmigrant or immigrant petitions, and other sanctions to the employer. The application requires the employer to attest that it will comply with the following labor requirements: The employer/agent will pay the H-1B worker a wage that no less than the wage paid to similarly qualified workers or, if greater, the prevailing wage for the position in the geographic area in which the H-1B worker will be working. The employer/agent will provide working conditions that will not adversely affect other similarly employed workers. At the time of the labor condition application, there is no strike or lockout at the place of employment. Notice of the filing of the labor condition application with the DOL has been given to the union bargaining representative or has been posted at the place of employment. Prevailing Wages Pursuant to the Labor Condition Application, the H1B employer must offer to pay the actual wage or the prevailing wage level for the H1B occupational classification in the proposed area of employment, whichever is greater, based on the best information available. For example, a prevailing wage for a computer engineer could be a lower figure in a specific region, but if all similarly placed employees in the company are paid a higher figure that wage must be offered to the H1B worker. Accordingly, the prevailing wage must equal the average of the rate of wages paid to other workers similarly employed in the area of intended employment. Employers must be careful in identifying the specific wage ranges and areas of employment. Material Changes Matter US Citizenship and Immigration Services and Department of Labor regulations of H1B workers are strict and complex, with fines and penalties abound for the unwary. H1B employers must abide by the material terms of the H1B petition that they submit. Changes to job title, job duties, job location, salary, benefits, and any other material changes can have significant consequences. For example, H1B workers cannot be “benched,” and significant penalties can be incurred for violations. Compliance The H1B program has been subject to significant oversight in recent years, and that trend is only set to continue. Current regulations have increased the statutory authority for work site visits and compliance with the terms of H1B vias and the Labor Condition Application. Employers and H1B workers need to be aware that compliance is a key part of the H1B program and should be prepared for potential site visits.
February 5, 2025
Estates and Trusts
Not Hiring a Qualified Appraiser and Realizing the True Value of Art and Collectibles
This is Part 5 in a Series of the Top 10 Mistakes Made When Planning for Art and Other Collectibles: A Guide for Professionals and Their Clients. For federal estate and gift tax purposes, transfers are valued at the “fair market value” of the asset on the date of transfer. One of the more common estate tax audit issues is the failure to properly report the value of items of tangible personal property on a decedent’s federal estate tax return. Similarly, failing to properly account for the value of tangible personal property transferred by inter vivos gift may result in the audit of a federal gift tax return. Despite the upfront cost, professional periodic appraisals should be obtained to identify the true value of art and collectible assets. Appraisals serve many functions, in addition to those relating to estate and gift tax reporting, such as establishing value for insurance purposes, establishing bidding parameters for assets at auction, obtaining loans with tangible personal property serving as collateral, and planning for future gifts. For tax purposes, fair market value is defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts.” Although the most persuasive indication of fair market value is an actual contemporaneous sale of the property in question, in the absence of such a sale, an appraisal is typically required to establish the taxable value of the asset subject to transfer. Under current regulations, a reported gift of tangible personal property that exceeds $5000 in value must be substantiated by a qualified appraisal conducted by a qualified appraiser. The Pension Protection Act of 2006 (the “Pension Act”) established new requirements for what it means to have a “qualified appraisal” for tax reporting purposes. A qualified appraisal must contain a declaration that the appraiser understands that a substantial or gross valuation misstatement resulting from an appraisal of the value of the property that the appraiser knows, or reasonably should have known, would be used in connection with a return or claim for refund, may subject the appraiser to a civil penalty, and understands that an intentionally false or fraudulent overstatement of the value of the appraised property may subject the appraiser to civil penalty for aiding and abetting an understatement of tax liability. A qualified appraisal of tangible personal property must contain the following: A detailed description of the property. The physical condition of the property; The date or expected date of the contribution. The terms of any agreement or understanding entered into or expected to be, entered into by or on behalf of the client that relates to the use, sale or other disposition of the property, including any restrictions on the use or disposition or reservations of rights conferred on anyone other than the donee and any earmarks for particular use. The name, address and taxpayer identification number of the appraiser. A detailed description of the appraiser’s educational background and qualifications The date on which the property was valued. The appraised fair market value of the property. The method of valuation used to determine the fair market value. The specific basis for the valuation. A description of the fee arrangement between the client and the appraiser. A qualified appraisal is prepared by a qualified appraiser defined as an individual who: Has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in the regulations Regularly performs appraisals for pay. Meets other requirements that the IRS has prescribed in the regulations. An individual cannot be a qualified appraiser with respect to any specific appraisal unless she demonstrates verifiable and passing professional or college-level education and experience or earned a recognized appraiser designation from a generally recognized professional trade or appraiser organization as part of an employee apprenticeship program or educational program as well as the education and experience in valuing the property type being appraised. If the appraisal or the appraiser does not meet all the above requirements, the resulting valuation report will not be considered as any evidence of value, and the IRS will conduct its own appraisal to determine the fair market value of the asset subject to transfer. In certain instances, providing the IRS with an appraisal that adheres to all the requirements of the Pension Protection Act may not help with avoiding an estate or gift tax audit, but provides a powerful bargaining tool. For example, regardless of the asset composition of the remainder of the estate, if a decedent dies owning artwork that has a claimed value of $50,000 or more, the appraisal will be subjected to consideration by the IRS Art Advisory Panel, comprised of a body of art industry experts who review and evaluate the acceptability of artwork appraisals submitted by taxpayers in support of claimed fair market value. When a qualified appraisal is submitted, you and your client may find that the IRS is more willing to compromise on valuation issues.
February 4, 2025
Labor and Employment
It Ends with Us, But Continues in Court: Blake Lively and Justin Baldoni's Legal Battle
The film “It Ends With Us” was a massive hit in 2024, grossing $350 million globally. Yet, the drama surrounding the film has shifted from the big screen to the courtroom, with a series of legal battles between its stars, Blake Lively and Justin Baldoni, that have captivated both the public and legal observers alike. In the ongoing legal battle between actors Blake Lively and Justin Baldoni, a federal judge has stepped in to try and quell the increasingly public war of words. At a hearing in Manhattan on February 3, 2025, Judge Lewis J. Liman ordered both legal teams to limit their out-of-court commentary, citing a New York rule (Rule 3.8) designed to prevent public statements that could prejudice legal proceedings. This intervention comes as the public has been parsing footage of a scene at issue in Lively’s lawsuit, recently released alongside a statement from Baldoni’s attorney. Baldoni’s team has also launched a website where users can access court documents related to the film's production. The lawsuits present conflicting accounts of events on the set of "It Ends With Us," an adaptation of a novel about domestic abuse, in which Lively plays the heroine and Baldoni her abusive partner. Lively’s suit accuses Baldoni and Wayfarer Studios CEO Jamey Heath of sexual harassment, including entering her trailer uninvited while she was undressed or breastfeeding, improvising unwanted kisses, and discussing his “previous pornography addiction.” She claims that after raising objections, Wayfarer launched a “retaliation campaign” against her. Baldoni’s suit denies these accusations, claiming all trailer entries were consensual, kissing scenes were not improvised, and the discussion of his past addiction was contextualized. He accuses Lively, her husband Ryan Reynolds, and her publicist of defamation and extortion, claiming she sought to “extract concessions and creative control” of the movie. He further alleges that he was the victim of her attempts to damage his reputation. The hearing was the first court appearance by the lawyers since Lively filed her initial complaint in California in December, followed by a New York Times report on her accusations. Baldoni has since sued the Times for libel, claiming the article omitted key information. The Times has stated they will vigorously defend their reporting. Judge Liman, acknowledging the extensive public record of the accusations, emphasized that the court proceedings, not public pronouncements, will ultimately determine the facts of the case. Neither Lively nor Baldoni was present at the hearing. Initial Allegations On December 20, 2024, Blake Lively filed a formal complaint with the California Civil Rights Department, accusing director and co-star Justin Baldoni, producer Jamey Heath, and Wayfarer Studios of sexual harassment and creating a toxic work environment. It seems that behind the movie magic was a not-so-glamorous reality. Lively’s complaint lays out a series of troubling incidents, including Baldoni allegedly ignoring intimacy protocols, improvising unapproved physical contact (like, biting Lively’s lower lip during a scene), and inserting controversial sexual content into the film without consent. Meanwhile, producer Heath is accused of showing Lively an unsolicited nude video of his wife giving birth. From a legal standpoint, these allegations—if proven true—could present serious violations under California’s Fair Employment and Housing Act (FEHA). FEHA protects workers from discrimination, harassment, and retaliation, and sexual harassment is a particularly serious violation that could expose the production company and individuals involved to significant liability. In Lively’s case, the allegations regarding unsolicited physical contact and the lack of consent for intimate scenes could amount to unlawful sexual harassment in the workplace. These types of cases are taken very seriously in California, where the state’s strict sexual harassment laws are designed to prevent such behavior and ensure that victims have legal recourse. The real complexity in these claims lies in proving the behavior was pervasive and unwelcome. Given that these events allegedly took place during production and involved multiple key players—director Baldoni and producer Heath—it will be important for Lively to provide evidence of the repeated and pervasive nature of the harassment to make her case. The New York Times published an article about the allegations the very next day, also hinting at deeper tensions, including a campaign allegedly aimed at destroying Lively’s reputation. Baldoni Fires Back with Defamation by Implication Claim Ten days later, Baldoni fired back and sued the New York Times for defamation on December 31, 2024[i]. Baldoni claims the publication’s story about the sexual harassment allegations against him was part of a broader “smear campaign” orchestrated to undermine him. This counters Lively’s claims; Baldoni accuses Lively of damaging his reputation through false reporting. Baldoni’s lawsuit presents an interesting legal angle, focusing on defamation by implication. According to his complaint, the New York Times article contained damaging content that painted him in a false light. While the article never directly accused him of sexual harassment, Baldoni contends that the context and tone of the reporting led readers to infer his guilt. Defamation by implication occurs when the publication or communication indirectly suggests false information that harms a person’s reputation. Baldoni argues that the story—by highlighting Lively’s allegations without providing his side—implicitly presented him as the perpetrator. Moreover, Baldoni also seeks to address the “damage to his career” caused by these articles, which is a standard claim in defamation suits (i.e., the plaintiff is claiming that the defamatory statements harmed their reputation and resulted in professional or financial loss). He’s not just asking for retraction or correction; he’s pursuing actual damages (compensation for the real losses suffered as a result of the defamation) and possibly punitive damages (additional financial penalties aimed at punishing the defendant if the reporting was done with reckless disregard for the truth or malicious intent). Baldoni has also claimed that Lively was actively working against him throughout production, asserting that she "berated" him on set and attempted to undermine his creative control. The lawsuit further alleges that Lively edited the film’s final cut without his approval and attempted to block him from attending the premiere. Baldoni claims that Lively’s actions amounted to a "pattern of vindictiveness" designed to ruin his professional standing. This part of Baldoni’s claim—focused on the editing of the film and his exclusion from the premiere—could potentially lead to a breach of contract or tortious interference claim. A breach of contract claim would suggest that terms agreed upon in a legal agreement were violated, while tortious interference occurs when someone intentionally disrupts the relationship or contractual agreement between parties, potentially leading to significant financial damages and reputational harm. Film directors often have the final say on creative decisions, so Lively’s interference could be viewed as overstepping and damaging to Baldoni’s reputation in the film industry. Additionally, Baldoni claims that Lively, along with her husband Ryan Reynolds, leveraged their Hollywood clout to push for his removal from the film's production, including allegedly pressuring William Morris Entertainment to drop him as a client. If true, this could form the basis for a tortious interference claim. In such a claim, one party would argue that another intentionally interfered with their contractual relationships or business dealings. This can be tricky to prove, as it requires showing that the interference was unjustified and intentional. Lively Escalates Her Complaint into a Federal Lawsuit On the same day as Baldoni filed his lawsuit against the New York Times in Los Angeles, Lively formalized her California Civil Rights Department complaint into a federal lawsuit[ii] in New York. According to Lively’s lawsuit, Baldoni, Heath, and a crisis PR expert named Melissa Nathan tried to bury Lively’s reputation by manipulating social media, planting negative stories, and leveraging crisis communications to protect Baldoni’s public image. Lively claims that this campaign included texts from Nathan and Baldoni discussing how to “bury” people and target women in the public eye. The lawsuit alleges that even the big money folks at Wayfarer Studios, including co-founder Steve Sarowitz, were involved in the plot. From a legal perspective, if Lively’s claims about the smear campaign are proven, this could be a strong case for defamation and tortious interference. Defamation requires showing that false statements were made about a person, which harmed their reputation. In this case, the alleged "burying" of Lively through negative media manipulation would likely involve defamatory statements, whether directly or indirectly implied. Tortious interference claims, on the other hand, focus on one party intentionally damaging another’s business or reputation by improper means. If Lively can demonstrate that Baldoni and his team used these tactics intentionally to damage her career, there could be significant legal repercussions for all involved. However, the challenge for Lively will be proving that these negative media tactics were both intentional and defamatory, rather than part of a broader public relations strategy designed to mitigate the fallout from the initial complaints. PR teams are often hired to clean up a reputation, but if they cross the line into deceptive practices or actively seek to harm someone's reputation, they may have legal exposure. The decision to file the lawsuit in New York—despite the initial complaint being lodged in California—appears to be a strategic move regarding forum selection. California might offer more protections under its state laws, but New York law allows for quicker and more direct access to the courts, enabling Lively and her legal team to bypass some procedural hurdles and go straight to litigation. Additionally, the New York venue may offer a broader legal framework by incorporating both federal and state claims, and it could potentially provide a more favorable jurisdiction for Lively's case, particularly considering that much of the case's events occurred in New York. Lively’s complaint included demands for a jury trial. Baldoni Also Sues Lively in the Southern District of New York Adding another layer to the legal battle, Baldoni and Wayfarer Studios filed a lawsuit[iii] against Lively, Reynolds, and publicist Leslie Sloane on January 16, 2025, seeking a staggering $400 million in damages. This suit, filed in the federal District Court for the Southern District of New York, expands upon the existing claims, alleging civil extortion, defamation, and a series of contract-related violations. This lawsuit reinforces the argument that the conflict originated from a creative struggle. It alleges that Lively gradually increased her influence, demanding creative control beyond the typical scope of an actor's role. This included taking over wardrobe decisions, rewriting scenes, creating her own film cut, and ultimately demanding Baldoni's exclusion from promotional activities. The lawsuit vehemently denies any sexual harassment or inappropriate behavior by Baldoni, Heath, or any member of the production team. Instead, it accuses Lively and Reynolds of engaging in "extortionate threats" to damage Baldoni's reputation. Baldoni amended his complaint on January 31, 2025, just days before the scheduled initial pretrial conference. In the amended filing, which now includes the New York Times as a defendant, Baldoni alleges that metadata on the New York Times' website reveals the paper had access to Lively's civil rights complaint at least 11 days prior to their bombshell December 21st report. That report, titled "'We Can Bury Anyone': Inside a Hollywood Smear Machine," accused Baldoni and his publicists of orchestrating a campaign to damage Lively's reputation, seemingly in retaliation for her complaints of sexual harassment on set. This new information regarding the Times' prior knowledge of the complaint raises questions about the timing and context of their reporting. Furthermore, the amended lawsuit includes new claims regarding Ryan Reynolds' portrayal of the character Nicepool in "Deadpool & Wolverine," with Baldoni accusing Reynolds of using the character to mock and bully him. The amended filing includes claims for civil extortion, defamation, false light invasion of privacy, breach of implied covenant of good faith and fair dealing, intentional interference with contractual relations, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, promissory fraud, and breach of implied-in-fact contract. Leaked Footage, Gag Order Request, and Website Launch On January 21, 2025, Justin Baldoni's legal team dropped a bombshell: a 10-minute video from the "It Ends With Us" set. This move, intended to counter Blake Lively's sexual harassment allegations, captures intimate moments, including a rehearsal of a romantic dance with Lively. While Baldoni claims the footage exonerates him, Lively's team argues it actually supports her claims, pointing to specific scenes as evidence of inappropriate behavior. In a dramatic escalation, Lively and Reynolds filed a motion for a gag order against Baldoni's lawyer, Bryan Freedman. They accuse Freedman of a relentless media campaign, including inflammatory statements and potential leaks, aimed at swaying public opinion and prejudicing the jury pool. This, they allege, is a continuation of the alleged retaliation orchestrated by Baldoni and his team since Lively first spoke out. Additionally, a day after amending his New York complaint on January 31, 2025, Baldoni’s legal team launched a website, featuring the amended complaint and a detailed timeline of events. Given the proximity of the launch to the pre-trial conference, this may have been a preemptive move by Baldoni to circumvent any potential gag order. By publishing the information online, Baldoni may be attempting to solidify his narrative in the public eye and potentially undermine the basis for a gag order. Case Consolidation and Trial Date Set In a major update from New York, federal judge Lewis J. Liman has scheduled a trial date for March 9, 2026, marking the next chapter in this high-profile legal battle. The trial, which will address the complex claims of sexual harassment, defamation, and contract violations, is now set to proceed after Liman moved the initial conference from mid-February to next week. The court is also preparing for discussions on pretrial publicity and attorney conduct, with both sides expected to present concerns over the impact of public statements and potential jury bias. This adjustment follows a filing by Lively’s legal team, which alleges that Baldoni’s attorney is attempting to influence potential jurors. Specifically, Lively’s lawyers claim that Baldoni’s legal team has been actively working to harm Lively’s career by launching a website that selectively releases documents and communications between the two stars. According to Lively’s legal representatives, the goal of this strategy is to sway public opinion and turn prospective jurors against her before the trial even begins. As the New York case gains momentum, another legal front has emerged in Texas. Lively has filed a request in a Texas court to depose a man she claims played a central role in turning online sentiment against her during the film’s release and promotion. This new legal move adds further complexity to the already tangled web of lawsuits, as Lively seeks to identify and address those responsible for the negative publicity she alleges was orchestrated to damage her public image during the film's promotional campaign. As the legal battle intensifies on both coasts, all eyes will be on the actions of the court and the legal strategies of both Lively and Baldoni as they prepare for what promises to be a protracted and high-profile trial. The Legal Implications Moving Forward Judge Liman's January 27th decision to consolidate the Lively and Baldoni cases in the Southern District of New York marks a new, and potentially decisive, phase in their legal battle. This procedural move streamlines the trial process, focusing the complex factual and legal issues into a single proceeding, while simultaneously raising the stakes considerably for both parties. Consolidation not only avoids duplicative litigation but also presents a unified narrative to the court, forcing both sides to confront the totality of the allegations and defenses. While it remains to be seen whether Judge Liman will also consolidate Baldoni's separate, and arguably related, suit against the New York Times, the fact that the Times is now a defendant in the consolidated case suggests this is highly probable. This joinder could significantly broaden the scope of discovery and potentially introduce thorny First Amendment issues regarding journalistic privilege and fair report. The outcome of these lawsuits carries significant implications for the entertainment industry, potentially shaping the landscape of workplace conduct and media scrutiny. If Lively's claims of sexual harassment and retaliation are substantiated, particularly given the high-profile nature of the case, it could establish a crucial precedent for worker protections in Hollywood, especially for women navigating the pervasive power imbalances. This could embolden others to come forward and trigger a wave of policy changes regarding reporting and investigating harassment claims. Conversely, Baldoni's claims of defamation and tortious interference, if successful, could raise important questions about the often blurry line between personal and professional conduct on set, potentially chilling the willingness of individuals to report misconduct for fear of legal reprisal. This aspect of the litigation touches upon the delicate balance between free speech and reputational harm, an area of law ripe for development in the context of the #MeToo era. As the litigation unfolds, the entertainment industry will be watching closely. It will be interesting to see how the courts navigate these complex issues of proof and credibility, particularly regarding allegations of harassment and retaliation, which often rely on circumstantial evidence. The case also presents a fascinating interplay between traditional defamation law and the evolving standards for media reporting on sensitive matters, particularly in the context of ongoing investigations and public accusations. Furthermore, the potential long-term effects on industry dynamics, including the power of public opinion and social media pressure, are significant. Regardless of the outcome, this litigation is likely to leave a lasting mark on Hollywood and beyond. [i] Wayfarer Studios LLC v. New York Times, 24STCV34662 (Ca. Sup. Ct. Dec. 31, 2024) [ii] Lively v. Wayfarer Studios LLC, 1:24-cv-10049, (S.D.N.Y.) [iii] Wayfarer Studios LLC v. Lively, 1:25-cv-00449, (S.D.N.Y.)
February 4, 2025
Franchise Law
Virginia Bill That Would Ban Franchise Non-Competes Advances in State Senate
Virginia Senate Bill 798, introduced by former in-home senior care franchisee Sen. Chris Head, was passed unanimously by the Virginia Senate on January 17, 2025. The bill would amend Virginia's Retail Franchising Law to require franchise agreements for a Virginia location to be governed by the laws of Virginia. It would make it illegal to offer or enter into such a franchise agreement “that restricts the right of a franchisee to engage in the business of offering, selling, or distributing goods or services at retail after termination or expiration of the franchise agreement.” It will be heard in a Virginia House of Delegates Labor & Commerce Committee, likely sometime during February 2025. Why it Matters: Covenants not to compete are hallmarks of franchising. Some argue that they are necessary to protect a franchisor’s confidential and proprietary information from misuse by former franchisees to the detriment of both the franchisor and its remaining franchisees. Many franchisees think such provisions restrict their ability to hold a franchisor accountable, since the non-compete traps franchisees in the relationship with little recourse to advocate for their benefit. Very few states have outlawed post-termination or expiration covenants not to compete in franchise agreements. California is well-known for its law that makes non-competes unlawful in most contracts, including employment and franchise agreements, unless the covenant is given in the context of selling a business as a going concern. Illinois restricts the ability of a franchisor to enforce a non-compete following the expiration of a franchise agreement unless the franchisor has offered the franchisee the right to renew. Indiana restricts the duration and scope of acceptable post-relationship non-competes. But to this author’s knowledge, no state’s law, even California’s, is as far-reaching in restricting post-relationship competitive restrictions in franchise relationships as the Virginia bill. What to Do if the Bill Passes: If a franchisee seeks to break away from the franchisor during the term of the franchise agreement, the franchisor did not violate applicable franchise sales law, that the franchisee has the option to rescind the franchise, and the franchisor fulfilled its material obligations under the franchise agreement, then the franchisor should have a claim for lost future profits for the franchisee abandoning the franchise without cause. If Virginia passes this bill into law, it will be important for franchisors selling in Virginia to ensure that their standard franchise agreement clearly states that the franchisor has the right to collect such damages. As to the expiration of the franchise, traditionally, most franchisees have had the option to continue the franchise relationship at expiration if they sign the franchisor’s “then-current form of franchise agreement.” The problem has been that franchise agreements have often become more one-sided for the franchisor, particularly as a system matures, and if there is a non-compete applicable upon non-renewal then the franchisee has little ability to negotiate more favorable terms at “renewal.” The bill, if enacted, would dramatically change that dynamic at expiration. One provision that franchisors might consider adding to their agreements is an option for the franchisor to purchase the business as a going concern at expiration, if the franchisee does not accept the franchisor’s offer of a new agreement at least 90 days prior to expiration. The provision would require the franchisor to pay the fair market value of the franchised business, including goodwill attributable to local use of the trademarks, and also require the franchisee to agree to provisions that are customary in a business purchase and sale agreement. Covenants not to compete, after sale of a business for value, are customary and should be enforceable following such an arms-length sale, notwithstanding the language of the Virginia bill. Another approach that may be helpful to franchisors is to define all customer information collected or obtained by the Franchisee during the franchise relationship as proprietary to the franchise system and forbid the use of that information subsequent to the end of the franchise relationship. Such a provision should state that the Franchisee has a license to use the customer data during the relationship, and that license (and the local goodwill with those customers) is an asset that the Franchised Business that the Franchisee may sell to a new franchisee as part of an approved transfer. Such a provision, particularly with franchisees who are new to the system and the industry, may enable the franchisor to stop a former franchisee from using the customer data under trade secret laws, notwithstanding the bill discussed above. Such a restriction would make it less attractive for the franchisee to leave the system. However, such a provision could also have negative ramifications for the franchisor if it is sued by a franchisee’s customer. The details of each such provision, and others to protect truly proprietary and unique assets of a franchise system, require careful consideration and customized drafting. However, if Virginia enacts this bill into law, then it would join a select group of states that have tilted the playing field in favor of veteran franchisees, and franchisors will need to consult with experienced counsel who understands the ramifications of contract provisions.
January 31, 2025
Estates and Trusts
The Impact of Transgender Executive Order on New York Residents
On January 20th, President Trump issued an executive order entitled “Defending Women from Gender Ideology Extremism and Restoring Biological Trust to the Federal Government.” The executive order included provisions for the limitation of two gender markers – male and female -- on United States passports. The passport gender marker limitation is not retroactive but will only apply to issuing new passports and renewing existing passports. The order would force changes to federal documents, including new and renewed passports, visas, and Global Entry cards, and would require trans inmates to be removed from areas in federal prisons that align with their gender identity. It also rescinds the Biden-era executive order that allowed trans individuals to serve in the military. Almost immediately after the announcement, transgender advocacy organizations began receiving frantic calls from members of the transgender community, fearing that the executive order could lead to the inability to change identification documents to conform to one’s gender identity, as well as fears of physical harm. New York is one of several states that have enshrined the protection of gender identity in its constitution. Substantial pushback on the executive order is anticipated at the federal and state levels. If you are a member of the trans community and were born in New York City and/or the State of New York, you should still be able to change your name and state-issued identity documents to properly align with your gender identity. If you have not already done so, you should start the process of changing your legal name and state-issued identification documents. Various organizations, including A4TE and Lambda Legal, offer assistance with these processes. Along with your state-issued identification documents, you should make sure that your estate planning documents, including wills, trusts, powers of attorney, health care proxies, and designations of agents for the disposition of your remains, are in order and properly reflect your gender identification. Selecting the proper agents who will fulfill your wishes with respect to your health care and bodily remains is equally important.
January 30, 2025
Immigration Law
What to Do if ICE Shows Up at Your Workplace
ICE Enforcement Actions The Trump administration has immediately followed through on campaign priorities of aggressive immigration enforcement. The agency in charge of immigration enforcement is the U.S. Immigration and Customs Enforcement agency, otherwise known as ICE. We have seen an expansion of federal deportation actions and the removal of protections for areas previously considered safe spaces from agency actions. ICE enforcement actions can now occur in places of worship, schools, and courthouses. ICE agents can and will detain large numbers of individuals in a single action to determine their immigration status. Finally, the passage of the Laken Rily Act means that convictions of relatively minor crimes, such as shoplifting, could lead to indefinite detention for immigrants. ICE Actions and Deportation Warrants All people living in the United States, including individuals here without status, have certain specific rights protected by the Constitution. Key considerations of ICE enforcement actions are as follows: An ICE deportation warrant is not the same as a search warrant. If the ICE warrant is the only document ICE can show to justify their presence, they cannot legally enter a premises without agreement. You can and should ask for a search warrant signed by a judge and review it outside the premises. Warrants must be facially correct, including the individual’s correct name and address, as well as the Judge’s full name. Worksite Enforcement Given the current increase in ICE enforcement actions, it is clear that there will be additional forms of worksite actions specifically related to legal immigration compliance. These actions may be conducted by U.S. Citizenship and Immigration agents from the Fraud Detection and National Security Directorate, Department of Homeland Security (DHS) Homeland Security Investigators, and/or ICE agents. These actions are described as “worksite enforcement” and cover enforcement of various immigration laws, including but not limited to I-9 compliance, immigration fraud, and compliance under the H1B and L1 visa programs. Typically, these actions are large-scale enforcement actions with warrants, but they can also consist of a smaller team of agents following up on a business that sponsored a single individual. Paperwork compliance is critical for employers, and ensuring I-9 compliance is recommended for all employers. A heavily recommended first step is to conduct I-9 audits. One key consideration is that worksite enforcement actions are in person, and accordingly, it is critical that employers brief team members about how to interact with agents. Finally, these actions are not necessarily entirely immigration-related, and compliance with employment laws generally will be reviewed as well. So, what are the best practices moving forward in another age of enhanced compliance by the DHS? Our five tips would be: Standardize processes for hiring and verification, including immigration compliance, to have a robust compliance program for all hires moving forward. Review I-9 compliance, potentially including an audit of I-9s. Consider moving to E-Verify for compliance purposes. Have a plan in place for federal agents showing up. Designate a point of contact and ensure they are familiar with organizational rights and obligations. Keep informed. Keeping up to date on changes in immigration and enforcement policies is key. We have seen changes to passport issuance for transgender U.S. citizens, as well as the threat of travel bans and further disruption and delay for immigration processes. Courthouse Enforcement Regarding the courthouse memorandum, ICE has been told to generally avoid non-criminal courts for enforcement. Still, such guidance is not binding, and heightened vigilance at all courthouses is recommended for clients. This action is similar to the prior Trump administration’s enforcement priorities. Detainee Locator After apprehension by ICE, it is often exceedingly difficult for employers or loved ones to find an individual detained by ICE. Sometimes detainees may be sent to the side of state or to a different state entirely for processing. ICE does have a robust detainee locator system that can assist in finding individuals caught up in enforcement actions: https://locator.ice.gov/odls/#/search. Resources Please find attached a quick guide produced by the American Immigration Lawyers Association for individuals questioned or detained by ICE. Additional Resources: Protecting The American People Against Invasion – The White House Interim Guidance: Civil Immigration Enforcement Actions in or near Courthouses Misguided Laken Riley Act Does Nothing to Fix the Problems That Plague Our Immigration System | American Immigration Council DOJ threatens to prosecute local officials over immigration: NPR
January 30, 2025
Business
Startup Success Starts with Governance Documents and Clear Ownership Rules
If you are launching a new business without proper governance documents, you’re risking financial loss and business owner disputes. Every business owner needs properly drafted governance documents. This cannot be overstated. It’s exciting to launch a new business, but failing to properly document the business relationship between owners is a major pitfall. It is not uncommon for attorneys to have witnessed this firsthand, numerous times, and it almost always results in financial loss or dispute. An episode on Acquiring Minds podcast provides a powerful example of the troubles you can face without these governance documents (jump to the 51-minute mark to hear why). Learn how to safeguard your venture from the outset. Assuming a business is structured as an LLC, an operating agreement sets the governance foundation and prevents many avoidable disputes. Key Provisions to Consider Equity Vesting Schedule: For startups and emerging companies, it’s critical to protect the company from premature departures. Implementing a vesting schedule keeps everyone incentivized for the long haul, ensuring commitment and stability. Dispute Resolution: Conflict is inevitable. Whether it’s a disagreement over strategy or management style, a clear dispute resolution mechanism (such as mediation or arbitration) can help resolve disputes without causing a full breakdown of the business. In the Acquiring Minds podcast example, a "shotgun clause" would have been helpful. This is a buyout mechanism that also doubles as a form of dispute resolution. These tools work together to protect the business during critical decision-making moments. Equity Buyout Terms: Define how ownership interests can be bought or sold to ensure fairness while protecting the business from being forced into unwelcome arrangements. Important terms include shotgun clauses, puts, and call options. Decision-Making Processes: Specify how major business decisions will be made. This includes setting voting thresholds and identifying areas that require unanimous consent. It’s also important to establish early on whether someone will hold a majority stake in the company. Even a 1–2% difference in ownership can make a significant impact. Exit Strategies: Plan for the future by outlining provisions for dissolution, sale, or succession. For instance, drag-along rights protect majority shareholders in a sale, while tag-along rights safeguard minority interests. These provisions ensure smooth transitions and clarity for all parties. Don’t Rely on A Handshake A handshake may start a partnership, but only a well-drafted operating agreement can protect it. Having robust governance documents isn’t just a best-practice, it’s essential for protecting your venture and ensuring long-term success. Don’t overlook the importance of partnering with experienced legal professionals to get it right.
January 29, 2025
Estates and Trusts
Not Maintaining an Up-to-Date Inventory of Art and Collectibles for Estate Planning
This is Part 4 in a Series of the Top 10 Mistakes Made When Planning for Art and Other Collectibles: A Guide for Professionals and Their Clients. A well-organized inventory is essential for effectively managing and planning the distribution of collectibles, including art. Clients may struggle to track their assets without an inventory, making future distribution and estate planning significantly more challenging. Maintaining an inventory can be as simple as using a basic spreadsheet or, for larger collections, leveraging specialized inventory management software. Regardless of the method, a comprehensive inventory should include: Size, materials, and description of items, as well as photographs of each individual item. A system for recording purchases and sales, including transaction dates and parties involved. Documentation of loans and gifts, specifying recipients and terms, as well as the location of items. Records of appraisals and insurance coverage. Logs of damages and losses. Keeping an up-to-date inventory also helps track each item's provenance, which is critical for authentication and valuation, particularly in the event of a sale. Maintaining an inventory of copyrights is just as important for clients who are also artists or creators. These intellectual property rights may have been licensed for specific periods or may require a distinct distribution plan separate from the original works upon the artist’s passing. Ensuring these details are well-documented can prevent legal complications and preserve the creator’s legacy.
January 28, 2025
Los Angeles Wildfire Legal Resource Center
Supporting Wildfire Victims: Isabel Conrath's Dedication to Community Recovery
When disaster strikes, the strength and resilience of a community often shine through the actions of those determined to help. Isabel Conrath, an associate in Offit Kurman’s Estates and Trusts West Practice Group, has exemplified this spirit by stepping forward to assist victims of the devastating Palisades and Eaton fires. Isabel, a graduate of Pepperdine University Caruso School of Law, was deeply involved in the school’s Clinical Education Program. Her ongoing commitment to serving others drove her to volunteer with Pepperdine’s Disaster Relief Clinic in Malibu, supporting wildfire victims with the legal challenges they face in the wake of such tragedy. “When the devastating Palisades and Eaton fires broke out earlier this month, I knew that I wanted to use my role as an attorney to help those impacted in any way possible,” Isabel shared. “This work included listening to their stories and helping them navigate insurance claims and secure disaster relief benefits.” Her efforts have provided more than just legal assistance; they have also offered hope and comfort to individuals facing unimaginable losses. For Isabel, the most rewarding aspect of this work has been witnessing the resilience of the wildfire victims and the strength of the community coming together in times of need. “Seeing the difference a small piece of my time can make—hopefully restoring some small sense of hope—is exactly why I chose to become an attorney,” Isabel reflected. While the work has been fulfilling, it is not without its challenges. Isabel admits that witnessing the emotional and financial toll on members of her community has been heartbreaking. “This is especially difficult to witness knowing that I am unable to alleviate many of the concerns they have in that moment,” she said. To those affected by the wildfires, Isabel offers a heartfelt message of compassion and solidarity: “I want to express my deepest sympathy for the hardships caused by the recent wildfires. The physical and emotional toll of losing so much, so quickly, is unimaginable. Please know that your community is here for you, and Los Angeles County will rebuild!”
January 24, 2025
Real Estate
Will 2025 Bring Greater Equity Investment and Debt Financing in NJ? NJ Aspire 3.0 aspires to do just that.
On January 23, 2025, Governor Phil Murphy enacted significant amendments to the New Jersey Aspire Program by signing Senate Bill 1323/Assembly Bill 2076 into law. The amendments, collectively referred to as “NJ Aspire 3.0” are designed to enhance the program’s effectiveness in stimulating redevelopment projects across New Jersey. The key revisions in NJ Aspire 3.0 concern project award amounts, eligibility periods, tax credits, eligible project expenses, and occupancy requirements. Increased Project Award Amounts: Award amounts for eligible projects have been increased to bridge financing gaps more effectively, aiming to attract greater equity investments and facilitate debt financing for redevelopment projects. Reduced Eligibility Periods: The maximum eligibility period for most projects has been reduced from 15 years to 10 years. For projects located in Government Restricted Municipalities (“GRMs”), this period is further reduced to five years. Under the prior law, only Trenton, Atlantic City, and Paterson were considered GRMs. NJ Aspire 3.0 adds Camden, East Orange, and New Brunswick to the list of GRMs. The adjusted eligibility periods aim to encourage more timely project completion and quicker utilization of the program benefits. Carry Forward Tax Credits: Purchasers of tax credits can now carry forward unused credits for up to five years, providing greater flexibility in tax planning. State Buyback of Unused Tax Credits: The state will now buy back unused tax credits and tax credit transfer certificates at 85% of their value, providing a safety net for developers who are unable to utilize or sell their credits. This is an increase from the 75% floor provided by the previous law. Proration of Tax Credits: The obligation to prorate tax credit awards has been eliminated, a change that applies retroactively to the inception of the New Jersey Aspire Program. Eligible Project Expenses: Projects in GRMs are now permitted to include land acquisition costs as eligible project expenses, capped at 20% of the total eligible project costs. Occupancy Requirements: The previous mandate for a 60% occupancy rate has been removed for residential developers and commences in the 4th year of the eligibility period for commercial developers. This eases the compliance burden for residential developers and provides commercial developers with additional time to achieve necessary occupancy levels. These legislative updates are anticipated to make the New Jersey Aspire Program a more robust tool for closing financing gaps in redevelopment projects, thereby attracting greater equity investments and facilitating debt financing. NJ Aspire 3.0 has the potential to significantly enhance opportunities for real estate developers and investors by incentivizing economic growth and community revitalization across New Jersey. By offering targeted incentives for real estate development projects, the program aims to attract private investment, support the creation of mixed-use, commercial, and residential spaces, and stimulate job creation, particularly in underserved or high-priority areas. By doing so, NJ Aspire 3.0 aims to enhance the state’s economic competitiveness and foster equitable and sustainable growth. Understanding the legal nuances of eligibility and compliance is critical, ensuring developers and investors maximize the program’s advantages while adhering to its requirements. Developers and investors in New Jersey’s redevelopment sector should review these changes carefully to understand the new opportunities and requirements.
January 24, 2025
Estates and Trusts
Equal Shares, Unequal Outcomes: Estate Planning Strategies for Parents and their Qualified Retirement Accounts
Typically, a parent wishes to treat their children equally in their estate plan and presumes they will achieve this goal by dividing all their assets into equal shares upon their death. Accordingly, they will designate their children as equal beneficiaries of their qualified retirement accounts, such as traditional IRAs and Roth IRAs. However, doing so without considering the individual circumstances of their children may be less tax efficient and may ultimately result in one child receiving more assets after the payment of taxes than their siblings. Traditional IRAs vs. Roth IRAs: Key Differences A traditional IRA is funded on a pre-tax basis, with the income taxes on any appreciation deferred until assets are withdrawn from the account. Traditional IRAs are subject to requirement minimum distributions (RMDs) when the account holder attains the age of 73. A RMD is the minimum amount that must be withdrawn from the IRA each year. Contributions to a Roth IRA, on the other hand, are made with after-tax dollars, and the distributions are withdrawn tax-free. In addition, there is no RMD requirement for a Roth IRA during the lifetime of the account holder. The Ten-Year Rule When the account holder dies, most beneficiaries must take distributions pursuant to the “ten-year rule,” which requires that the beneficiary withdraw the account assets in full within ten years from the date of death of the original account holder. During this withdrawal period, the beneficiary must take RMDs in each year that the inherited account is open. As these withdrawals are made, the beneficiary must pay the deferred taxes based on their individual income tax bracket. Notably, withdrawals from a Roth IRA account remain income-tax free to the beneficiary, and are not subject to the RMD requirement. Tax Benefits for Eligible Designated Beneficiaries (EDBs) A beneficiary that is deemed an “eligible designated beneficiary” (“EDB”) is not subject to the ten-year rule and may take distributions from the inherited account over their lifetime. Thus, the account assets may continue to appreciate tax deferred over a significantly longer period of time. EDBs include beneficiaries that are not more than ten years younger than the original account holder, surviving spouses, beneficiaries that are deemed disabled or chronically ill, and minor beneficiaries.[1]. It will be inherently more tax efficient for a parent to name an EDB as a beneficiary of their qualified account because of the extended withdrawal period the beneficiary will have to take distributions from the account. Therefore, if a parent has two or more children, one of whom is deemed an EDB, and names each of them as an equal beneficiary of their IRA account, the child who is an EDB will ultimately receive significantly more assets than their siblings because the assets in the account will have significantly more time to appreciate tax-deferred. In addition, because of the extended withdrawal period, the beneficiary has more flexibility in choosing when to take distributions from the account to avoid getting bumped into a higher marginal income tax bracket. Accordingly, if the parent wishes that each of their children receive as nearly equal shares of their assets as possible, and one or more of their children are deemed EDBs, it may be better to provide a greater share of their qualified accounts to the EDB beneficiaries, and the non-EDB beneficiaries with a greater share of their other estate assets. Case Study: Tax Efficiency and Equalizing Shares What if the account holder does not have any beneficiaries who will be deemed an EDB? Even then, the account holder should still consider their children's individual income tax circumstances. Suppose the account holder is single with a Roth IRA with $1,000,000 in assets and a traditional IRA with $2,000,000 in assets. The account holder has two children: Alex, who is a stockbroker, and Jamie, who is a public school teacher. We can presume that Alex has more taxable income than Jamie and that Alex has a higher earning potential in their career. If Alex and Jamie were named equal beneficiaries of the traditional IRA, it is likely that the distributions from the account would bump Jamie into a higher income tax bracket in the years that they are received, thus generating more income tax liability. Alex’s distributions are almost certain to be taxed at a higher marginal rate than Jamie's. If Alex and Jamie are named equal designated beneficiaries of the Roth IRA, the distributions would be tax-free in the year that they are received, leaving their respective income tax brackets unaffected. Therefore, naming Jamie as a primary beneficiary of the traditional IRA, where distributions will be taxed at a lower tax bracket, and designating Alex as the primary beneficiary of the Roth IRA is likely more tax efficient and most likely to ultimately result in each child receiving equal shares of the assets after payment of income taxes. As this example illustrates, naming each child as an equal beneficiary of a qualified account may not result in equal distributions after the payment of taxes, frustrating the intentions of a well-meaning parent. Therefore, careful consideration must always be given to the individual circumstances of an account holder’s intended beneficiaries. [1] Minor beneficiaries become subject to the ten-year rule once they attain the age of 18.
January 23, 2025
Commercial Litigation
Five Things to Take into Consideration When Negotiating and Settling a Case
Settling a case is hard. Negotiating the terms and coming to an agreement can take weeks or months. But once the parties agree to the general terms of a settlement (e.g., the amount of money changing hands and the timing of the settlement payment), there are a number of other considerations for putting the settlement agreement in writing. Here are five things to know when you are negotiating to settle your case: You Can Protect Your Privacy Even though the documents filed in the lawsuit will remain public, the settlement details don’t have to be public. One effective tactic is to separate the settlement agreement from the “stipulation of discontinuance.” This allows the terms in the settlement agreement to remain private, with the only document being filed with the court simply stating that the parties have agreed to discontinue the case. You Can Set the Rules for After the Lawsuit A settlement agreement can also be useful for clarifying what the parties can and cannot do after the lawsuit. Often, parties agree to include a provision in the settlement agreement requiring the parties to keep the settlement terms confidential and not to disclose those terms to anyone. Some parties may even agree to a non-disparagement provision, requiring them to refrain from saying anything negative about each other. Although these are provisions that often can be overlooked when negotiating a settlement, they can help to permanently put the dispute to rest and assist the parties with moving past the lawsuit. Plan for What Happens if Someone Breaches the Agreement You may be feeling optimistic that you are finally settling your case. Not so fast. Contemplate what may happen if something still goes wrong: what if the settlement payment doesn’t come through? Or what if someone breaches some other part of the agreement? The settlement agreement should provide a roadmap for what happens next. You may want to include whether the breach of the agreement goes back to the court you were in or whether the dispute goes to arbitration. You also may want to have a provision stating that if the other side breaches the agreement, you are entitled to additional damages and that the other side has to compensate you for your attorneys’ fees. Including these terms in the agreement can save you resources and avoid the frustration of going back to court if the other side breaches. Don’t Overcomplicate It Lawsuits are stressful. Don’t add to that stress by making the settlement more complicated than it needs to be. Include the terms you need to wrap up the case and exclude those other terms that often don’t apply to your case or that you don’t need. Prioritize being clear with the terms you include, as sometimes a settlement agreement can go on for dozens of pages when just a fraction of that can suffice. Once You Sign, the Settlement is Final Before you sign a settlement agreement, make sure you understand each piece of the agreement. If you don’t understand some portion of the agreement, you may be taking on obligations you don’t know about or waiving rights that leave you worse off. Settling a case requires careful attention to detail, and drafting a settlement agreement that clearly reflects the parties’ intentions is critical to avoiding future disputes. By addressing these key considerations in your negotiations, you can ensure the settlement process is effective and that your interests are protected.
January 22, 2025
Estates and Trusts
The Hidden Cost of Failing to Plan
The Top 10 Mistakes Made When Planning for Art and Other Collectibles: A Guide for Professionals and Their Clients Mistake #3: The Hidden Cost of Failing to Plan Art and collectibles, while beautiful and culturally significant, can pose significant estate planning challenges. At the time of death, these assets are subject to estate taxes based on their fair market value. Without proper planning, federal and state estate taxes—combined with the costs of selling the assets—could erode over 50% of a collection’s value. Art, as an alternative investment, began emerging in the 1970’s and has only boomed as a result of digitalization. Art as a profitable investment now consistently outperforms other asset classes such as the FTSE 100 and S&P 100. According to 12 Wall Street Journal article, "The Art of Passing Along Art," highlights an unexpected problem faced by many collectors, particularly those who acquired their art in the 1950s and 1960s. These octogenarian collectors are discovering that their art collections have appreciated significantly more than their liquid assets. As a result, their estates often lack sufficient liquidity to cover estate tax obligations. For example, consider a New York estate with $40 million in liquid assets and $100 million in art. That New York estate will potentially incur a $63.5 million tax bill, forcing the executor to sell some or all of the art within nine months to satisfy the obligation. Such rushed sales often lead to undervalued transactions, significantly reducing the collection's realized value. In extreme cases, the entire collection might be sold for a fraction of its worth simply to meet the estate's federal and state tax liabilities. Strategic Solutions for Collectors Fortunately, there are various strategies to reduce the estate tax burden on art and collectibles. These include: Charitable Contributions: Using art to fulfill philanthropic goals can provide both estate tax relief and personal fulfillment. Lifetime Gifting: Strategic gifting of art during the collector's lifetime can shift value outside the taxable estate. Estate-Freezing Techniques: These methods help move highly appreciated (or soon-to-appreciate) assets out of the taxable estate. Moving the Collection out of state: Using limited liability companies and other entities can eliminate the potential for state estate taxes by changing the location of the assets. When considering these options, it’s essential to evaluate whether the collection holds more value as a cohesive whole or as individual pieces. Each strategy should be tailored to the collector's goals, ensuring that both financial and sentimental value are preserved for future generations. Make sure you speak with a trusted estate planner who specializes in planning for large collections of art and other intangible assets.
January 21, 2025
Estates and Trusts
Ethical Wills: The Heart of Your Estate Plan
When most people think of estate planning, Trusts and Last Wills and Testaments usually come to mind. I have spent my career espousing the essential tools for ensuring an efficient transfer of assets from one generation to the next, planning for taxes and incapacity, and outlining health care desires. However, the standard estate plan does not capture something equally valuable: the values, lessons, and hopes that many wish to document for their loved ones. That is where an ethical will comes in. Ethical wills, also known as “Letters of Intent, or “Legacy Letters” are non-legal documents that convey the intangibles like morals, beliefs, and reflections on your life - both the highs and the lows. What is an Ethical Will? A traditional Last Will and Testament or a trust directs how your tangible assets will be distributed upon your death. An ethical will instead can serve as heartfelt advice and guidance to your loved ones and future generations. While it is not legally binding, an ethical will can be deeply personal and meaningful. Ethical wills are not new. In fact, there is mention of an ethical will in the Book of Genesis in the Bible and they were traditionally recited orally to family members. It was not until the Middle Ages when they were recorded in writing with the hope that the message would be preserved and shared with future generations. Do you need an Ethical Will? The short answer is no. But considering the fact that in creating a traditional estate plan, most put significant time, thought, and energy into who should inherit and in what proportion, it likely would be appreciated and helpful to share your reasoning behind how you came to those decisions, or what you hope the beneficiary might consider when living their lives and using what you left to them. Content of an Ethical Will: Values: Leaving your worldly goods, your home, and other financial assets to the next generation is certainly important, but your ethical will might explain to your beneficiaries the values that you lived by that enabled you to acquire those assets. It can provide a platform for you to share with your beneficiaries your principles, your beliefs, and the lessons learned in doing so. Strengthening Family Connections: The event or ceremony of sharing your ethical will together can be a truly powerful experience for a family. A document containing stories, anecdotes, and your successes and failures can help family members feel connected to your story and to each other during your life or long after your death. Clarifying Intentions: Sadly, the decisions and bequests made in a traditional will or trust can be misunderstood and lead to conflict within a family – having the opposite effect that you intended. An ethical will provides you with the opportunity to explain your reasoning behind the content of your legal estate planning documents, reducing the likelihood of misunderstandings or hurt feelings. Providing Comfort and Guidance: An ethical will should be a sort of love letter to your family in which you provide words of encouragement, share the joy you felt with your loved ones, and impart wisdom and advice for their future reference. For those with religious beliefs, many choose to share how faith served as a touchstone if a parent or loved one is no longer here. Ethical wills can also provide a great source of comfort and strength during times of grief. Get started: The best part of an ethical will is that you don’t need to hire a lawyer to start. Reflect on Your Life. Consider the experiences that shaped you over the course of your life. What life lessons do you think are worth sharing with your loved ones for years to come? Tell them to “take that risk” because it served you well. Do you have hopes for your loved ones for their lives? Now is the time to share those hopes for their higher education, or creating a family in the future. Is there something specific that you want to be remembered for? If so, convey what that is and why it’s important to you. Be Honest and Authentic. This is not a formal legal document; you should write in your own voice. The whole point of an ethical will is to be heartfelt and a reflection of you. Get personal and write it as though you are having the most heartfelt conversation with your loved ones. Do not be concerned with form, grammar, or the legality of it all. It’s ok to be vulnerable and share your failures and your regrets. Nothing is Forever. Let’s face it, things change and because of that, you can always revise and update your ethical will. Just as I tell clients that legal wills and estate plans should be updated, your ethical will should also be updated. Relationships, net worth, health, values, and perspective are not permanent. Do not be afraid to reconsider and revise. Sharing is Caring. In most cases the ‘reading of a will’ is only something made for TV. With an ethical will, the choice is yours: you may decide that you want your ethical will read prior to revealing the contents of your legal will to set the stage for how your assets are to be distributed, or choose to share your ethical will during your life. Whether it is something left behind to be read after your death, or if you prefer gathering your family together to foster a discussion about legacy and lessons, there are no rules how you share. Combining an Ethical Will with Traditional Estate Planning. While an ethical will is not a substitute for a legal will or trust, it certainly can complement your estate plan by adding an emotional, encouraging, loving, and sometimes spiritual dimension. Work with your estate planning attorney to ensure your proper legal documents are updated and in place and consider crafting an ethical will to share with your lawyer so that they can better understand what is important to you and how to help you accomplish your goals. Creating an estate planning does not just have to be about the legality of moving assets from one generation to the next, it can be much more. Including an ethical will in your plan may ensure that your lessons, love, and legacy are preserved for future generations.
January 21, 2025
Labor and Employment
Better Call Sarah: Political Speech in the Workplace
Dear Sarah, Help! After this last election, it seems everyone at the office has something to say about politics, and I’m caught between my mission to keep the peace and the very real risk of stifling free speech. Is there a way I can manage these heated political discussions without turning our office into a debate club or accidentally infringing on anyone's rights? Sincerely, Politically Puzzled in HR Dear Politically Puzzled in HR, Political discussions at work intersect with various labor and employment laws, including anti-discrimination regulations, the National Labor Relations Act (NLRA), state laws on mandatory meetings[1], and voting leave policies. Political conversations can also give rise to claims of discrimination, harassment, or retaliation under federal, state, and local anti-discrimination laws. By being mindful of both your right as an employer to set boundaries on political expression and employees’ rights in this area, you can comply with the law and maintain a positive workplace culture. Misconceptions About Free Speech in Private Workplaces Many people assume that the First Amendment guarantees unlimited free speech rights in all workplaces, but it actually applies mainly to government regulation, not to private employers. This means that, generally, private companies have broad discretion to manage political speech at work. However, federal laws like the National Labor Relations Act (NLRA) and anti-discrimination statutes create important limits on this authority. Protected Activities Under the National Labor Relations Act (NLRA) The NLRA, for instance, protects employees—even in non-union settings—when they engage in “concerted activities” related to workplace conditions, such as discussions about pay or safety. If political discussions are directly related to these issues, they may also fall under protected activity. Employers should take care in addressing such conversations, especially as recent guidance from the National Labor Relations Board (NLRB) suggests that protected discussions may now include social justice or other political topics related to employee rights. Risks of Political Speech Leading to Discrimination Claims Even though political views themselves are generally not protected under anti-discrimination laws, discussions that touch on protected characteristics (e.g., race, gender, national origin) may lead to complaints of harassment or discrimination. For example, political debates on topics like immigration or reproductive rights could be seen as targeting certain groups, creating a hostile work environment. Employers should handle any related issues consistently and fairly to prevent claims of biased or discriminatory treatment. State and Local Laws Offering Additional Protections Additionally, some states have laws that prevent employers from disciplining or restricting employees based on their political affiliations, views, or party associations. In some cases, state protections extend beyond traditional political speech to cover social justice advocacy and other issues. Employers must also be aware that state and local laws often provide greater protections for employees than federal laws. For example, some states offer protections similar to First Amendment rights for private employees. Employers should also be familiar with the differences between federal EEO laws and state-level EEO regulations to ensure compliance. Developing Clear and Inclusive Policies Employers should develop clear, effective policies that align with legitimate business interests while minimizing ambiguity around what political activities and expressions are allowed. The policy must consider activities and communications protected under the NLRA as well as relevant state and local laws. To reduce the risk of discrimination, harassment, or bullying claims, employers may want to discourage supervisors from engaging in political discussions with subordinates, as supervisors are not protected by the NLRA. However, these policies must also be carefully crafted to comply with state-specific laws. Additionally, employers should consider implementing a social media policy to set clear expectations for online behavior. Political statements—especially on social media or in public spaces—can have a direct impact on your company’s reputation. Public backlash can arise if an employee, visibly linked to the organization, expresses controversial views. In today’s digital landscape, social media posts are just as influential as in-person comments, so it’s essential to handle online expression carefully. Many states protect employees’ privacy, meaning employers generally cannot demand access to personal social media accounts. If disciplinary action is needed, verify that any content was publicly accessible and relevant to workplace conduct to avoid legal risks. A policy on social media use, drafted in line with state and federal regulations, can help clarify expectations for how employees express their views online. Managing Off-Duty Conduct Employers should be mindful of employees’ rights to engage in political expression outside of work. In California, Colorado, New York, and North Dakota, laws protect employees from adverse actions based on lawful political activities conducted outside of work hours. Employers should exercise caution when considering disciplinary actions for off-duty conduct to avoid violating state-specific protections. Fostering a Respectful and Inclusive Workplace Culture Addressing political speech in the workplace requires a careful balance. A comprehensive, consistently applied policy that values respect and inclusivity can help maintain a positive work environment while respecting employees’ rights. By fostering a respectful culture, employers can reduce potential conflicts and support a productive, harmonious workplace. In the current polarized climate, taking proactive steps to handle political speech thoughtfully can strengthen workplace morale and protect the company from legal risks, ensuring a fair, respectful environment for all. [1]Mandatory employer-sponsored or so-called “captive audience” meetings are those an employer convenes during working hours to educate employees on certain topics, particularly the employer’s views on unionization. Although the NLRB has yet to issue a formal ruling on this issue, it is anticipated that the agency may take a strong stance against these types of meetings.
January 17, 2025
Estates and Trusts
Maryland’s 2025 Budget Proposal: Changes to Estate Taxes and What They Mean for Estate Planning
Recent Maryland proposed budget cause for close estate planning review before the sunset of the federal Tax Cuts and Jobs Act. This week, Maryland Governor Wes Moore released his proposed 2025 budget to the public and submitted House Bill 352 to the Maryland Assembly for review and approval. The proposed changes in the budget have a significant impact on estate planning, especially as it relates to Maryland’s death taxes. Maryland is the sole state in the union that assesses both an estate and inheritance tax against the estates of resident decedents. The governor’s budget proposed abolishing Maryland’s Collateral Inheritance Tax on probate and non-probate transfers and inter vivos gifts made within two years of the date of death. The proposed budget does not abolish Maryland’s Estate Tax, but significantly reduces the exemption amount. Maryland’s current estate tax exemption is $5,000,000 per individual and $10,000,000 per married couple. The newly proposed budget would reduce the estate tax exemption by more than half to $2,000,000 per individual and $4,000,000 per married couple. Under the terms of the budget, the changes to Maryland’s Estate Tax exemption will go into effect in July 2025. Should the proposed budget and changes go into effect, many Marylanders will need to take a renewed look at their estate planning to mitigate the impacts of the changes to the new state estate tax threshold.
January 17, 2025
Adopting the Moving Van Approach
The Top 10 Mistakes Made When Planning for Art and Other Collectibles: A Guide for Professionals and Their Clients Mistake #2: Adopting the Moving Van Approach When it comes to estate taxes, the Internal Revenue Service (IRS) expects all tangible personal property to be properly reported on Schedule F of Form 706. This includes any valuable assets such as art collections, antiques, or other collectibles owned by the decedent. Failing to report or undervaluing these items is a common audit trigger and can turn what might have been a clean estate tax return into a costly investigation. But what happens when a client suggests they intend to "make their valuable art collection disappear" to avoid estate tax inclusion? A Word of Caution No Statute of Limitations on Tax Fraud Tax fraud—including estate tax fraud—is not bound by a statute of limitations. If an art collection or other personal property goes unreported on Form 706, the IRS retains the authority to pursue unpaid taxes, interest, and penalties indefinitely. Moreover, these liabilities can extend to the decedent’s heirs, potentially creating financial and legal challenges for the next generation. Impact on Provenance and Marketability Beyond tax considerations, failing to accurately value and report an art collection can undermine its provenance. Provenance—the documented history of ownership—is critical for determining an item's authenticity and value in the marketplace. Without proper documentation, including accurate estate tax filings, selling items at their fair market value can become difficult, if not impossible. Practical Advice It's essential to educate clients on the long-term consequences of attempting to sidestep estate tax obligations. Transparency and compliance not only minimize audit risks but also preserve the integrity and marketability of valuable collections for future transactions. By taking a proactive and informed approach, you can guide clients toward strategies that align with both their financial goals and legal responsibilities.
January 15, 2025
Construction
How Should Construction Contracts Approach Potential Tariffs?
As an initial primer: tariffs typically work as a tax, charged on goods purchased and imported to the United States from a foreign country. The tariff is charged as a percentage on the price paid for the foreign good. Tariffs are collected at the ports where the goods enter the country. Typically, the tax is paid by the importer directly to the US Customs and Border Protection Service. And, typically, the tax is required to be paid to release the good from the port, although there are some methods to slightly adjust that timing by satisfying certain conditions. A tariff on construction materials would likely result in additional costs for the project. Intuitively, a tax on the imported materials simply causes the goods to cost more. Also, tariffs on imported goods might cause increased demand for specific alternatively sourced materials (whether that be domestic or non-tariffed foreign sources), which then leads to increased costs for those alternative sources. As a general rule of thumb, and reflected in most standard construction contracts, the contractor is responsible for providing the labor and materials for the construction project at the agreed upon contracted price, and the contractor is not entitled to any adjustment to the price on the basis of changes in taxes or laws, unless there is a contract clause specifically affording such relief. For example, the AIA A201-2017 section 3.6 General Conditions provides that the contractor is responsible for all taxes on the work. In most standard contracts, there is no specific clause that affords the contractor relief or adjustments in the event of changes in taxes, laws, or tariffs. Depending on the specific contract, perhaps one could argue that a tariff is an unforeseeable event beyond the control of the contractor; however, most contract clauses would afford limited or no relief, typically an extension of time at best, but not compensation. An example of this difficulty is the force majeure clause that might exist in a contract. Under most contracts, tariffs are not specifically identified in the force majeure clause, and most force majeure clauses provide an extension of time as the remedy and do not afford additional compensation to cover the costs. Some contractors might be tempted to argue that relief should be afforded under the doctrine of commercial impracticability. That too, is a difficult path. Commercial impracticability sometimes affords relief to a contractor when circumstances on a project have changed so drastically that the performance of the contract is commercially impractical. Theoretically, if a tariff increased the costs so astronomically to make the job financially impossible, there could be an argument under the doctrine. But these circumstances are relatively rare, and courts are rather critical of this argument. On public federal projects, an argument could be made that a contractor is entitled to equitable relief and an adjustment to the contract price under FAR 52-229.3, which provides for an equitable adjustment for new taxes that arise during a project. It is unclear, however, whether this argument would succeed, because it is uncertain whether a tariff constitutes a new tax under FAR 52-229.3. There is a dearth of decisional law on this point, and a 2022 Armed Services Board of Contract Appeals decision rejected this argument. Thus, a tariff on construction materials is likely to increase the costs, and there is no obvious straightforward right to relief in most default contracts. A contractor should consider negotiating a specific clause to address the cost item. A list of potential approaches, including specific negotiated clauses, including the following: Price escalator clauses for either tariffs or specified categories of materials; Contingencies or allowances for materials of concern or tariff costs; Greater flexibility for substitutes or alternatives to allow for sourcing of differing materials; Segregated pricing by agreement for time-and-material budgets for carved-out scope packages that might be more volatile; Prompt procurement, buy-out administration, and warehousing of goods in advance to avoid potential volatility on specified goods; Value-engineering during the preconstruction phase to identify different materials; Increased buffers in the contract price to account for the risk of potential tariff impositions. When negotiating and drafting custom contract clauses to address risk on projects, or if litigating claims for equitable adjustments or change orders, best practice is to consult with trusted, experienced counsel that is knowledgeable on the intricacies of construction law. Offit Kurman construction attorneys are available to advise and counsel contractors, owners and developers, construction managers, design-builders, design professionals, subcontractors, and suppliers on construction contracts, risk, and project disputes.
January 14, 2025
Family Law
Why Divorce Lawyers Are Busy After the Holidays
The holiday season, with its emphasis on family gatherings, goodwill, and celebration, might seem like an unlikely time to consider divorce. However, for many couples, the stress and emotional intensity of the holidays often bring underlying marital issues to the forefront. As a result, divorce lawyers frequently see a surge in inquiries and new cases at the start of the new year, making January a peak season for divorce consultations and filings. The "New Year, New Start" Mentality For some individuals, the beginning of a new year represents a fresh start. This "New Year, New You" mindset often leads people to reevaluate their lives, including their relationships. Couples who have been struggling may view January as an opportunity to break free from an unhappy marriage and start anew. Holiday Stress Magnifies Marital Strains The holiday season is a time of high expectations. Families aim to create perfect celebrations, but the financial pressures, packed schedules, and family dynamics can amplify tensions in already strained relationships. Disagreements over money, parenting, or extended family obligations may come to a head, leaving one or both partners feeling that divorce is the only solution. Staying Together "For the Kids" Many parents delay divorce proceedings until after the holidays to avoid disrupting their children’s celebrations. They prioritize giving their kids one last holiday season as a united family, even if the marriage is irreparably broken. Once the holiday decorations are packed away, these couples often proceed with reaching out to divorce attorneys. The Role of Social Media and Comparison During the holidays, social media feeds are flooded with images of seemingly happy families enjoying picture-perfect moments. For individuals in struggling marriages, these posts can deepen feelings of dissatisfaction and loneliness. The stark contrast between their reality and the idealized versions of others’ lives may push them toward seeking a divorce. Preparing for the Surge Divorce lawyers and family law firms are well aware of the post-holiday uptick in divorce cases. Many firms use December to prepare for the influx, ensuring that their teams are ready to handle consultations, paperwork, and court filings. Some even offer informational sessions or promotional campaigns in January to assist potential clients during this challenging time. Moving Forward For those considering divorce after the holidays, it’s important to approach the process thoughtfully. Consulting with an experienced divorce lawyer is a critical first step in understanding your rights and options. Additionally, seeking support from therapists or counselors can help individuals and families navigate the emotional complexities of divorce. While the start of a new year can be a difficult time for couples ending their marriage, it also represents an opportunity for growth and a chance to create a more fulfilling future. Divorce, while challenging, can ultimately lead to a healthier and happier life for all involved.
January 13, 2025
Estates and Trusts
Prudent Investing in Uncertain Economic Conditions
The Prudent Investor Rule is a legal principal that requires fiduciaries to act in the best interests of a beneficiary and exercise reasonable care, skill, and caution when making investment decisions, which was codified in Maryland in 1994 by Md. Estates & Trusts §15-114. The Rule applies to fiduciaries, including trust companies, investment managers or advisors, and individual trustees who make a valid §15-114(g) election to be governed by the statutory standards for investing and includes fiduciary assets under management, including trusts, guardianships, and custodians. Under the Rule, a fiduciary must consider the best interests of the beneficiary in diversifying investments and investing and managing assets as part of an overall investment strategy. In doing so, the fiduciary may take into consideration the general economic conditions at the time. Any regime change in government brings a degree of economic uncertainty to market conditions. Currently, the market is experiencing uncertainty due to the US presidential election, a number of rising geopolitical tensions, natural disasters, and uncertainty surrounding economic policy and regulatory framework that could impact investment and spending decisions. Under the Prudent Investor Rule, a fiduciary is authorized to invest and manage assets to incorporate both risk and return objectives and to pursue an investment strategy that considers both the production of income and the safety of capital, utilizing a portfolio theory of investing. The directive to fiduciaries to diversify investments is intended to mitigate risk to the beneficiary of investment decisions made by the fiduciary. For Trustees and other fiduciaries, reliance on the advice and guidance of knowledgeable, experienced, and informed advisors is never more important than in the face of uncertain economic conditions.
January 13, 2025
Intellectual Property
Branding the Produce Aisle: Appealing to Consumer Tastes
Brands are taking over the produce aisle at the grocery store. They have already conquered the cereal aisle, the soda aisle, the chips aisle, and the cookie aisle (my favorite). While there have always been produce brands (Chiquita ® bananas or Dole pineapple), branded fruits and vegetables are proliferating. Newly branded fruits include the Elefante Green Gold pineapple, the Pink Elephant mango, and Cotton Candy grapes. The question is, why is there such a push to put stickers with a brand name on fruits and vegetables? Product Recognition and Differentiation From a legal point of view, product recognition and differentiation is the main reason to adopt a brand name. A brand name helps consumers identify a product, and helps that product stand out from other similar products. Which item are you more likely to remember—an apple or a Jazz apple? A banana or a Chiquita banana? It is possible for branding to be so successful that the brand name loses its ability to differentiate products. This is what happened to brands like aspirin and escalator, and it is something that brands like Xerox and Google fight against. Avoiding consumer confusion—or making sure that a brand name differentiates one party’s goods or services from another’s —is the whole point of trademark law. If consumers can distinguish one party’s brand from another’s, then there is no trademark infringement. If consumers think that the brands are related or associated with each other, then there is infringement. This is why the infringement analysis generally looks beyond the marks being used and the goods or services they are used on to other factors, such as price point, where the goods or services are being sold, and whether there was an intent to confuse consumers. Brand Loyalty Strong, dependable brands can encourage brand loyalty (repeat business). If you buy Cotton Candy grapes and love the way they taste, you are more likely to purchase them again with the expectation that you will be able to experience that great taste again. A negative experience, though, can cause a consumer to search for another brand of product. Brand loyalty can be a powerful driver of business. Think about it. How many times have you gone to the store and purchased something because you (or someone you know) used it before and it worked well? Sometimes brand loyalty is the result of an emotional connection to a brand. Perhaps you remember a brand from your childhood, or interacted with that brand when you were a child. Maybe you had a certain brand of drink with lunch in elementary school, or you remember your grandfather giving you a particular type of candy when you would visit. It could even be that you remember liking the advertising for a product when you were younger. This is one of the reasons why people often try to “revive” defunct brands, a practice that raises all sorts of questions about the ownership of the brand and the goodwill associated with it. Branded Items Seem More Exclusive The fashion industry has long since learned that branding can make a product seem more exclusive. One reason is that branded items can command a higher price. The store brand is almost always less expensive than the branded equivalent, whether in the grocery store or the department store. In some cases, the fruits are considered luxury items. This can be because they are genetically engineered, like Del Monte’s Pinkglow pineapple, which has white flesh, an edible core and low acidity, or the Cotton Candy grape, which is sweeter than a usual grape and tastes like cotton candy. In other cases, it is because small quantities are grown. To protect the names of these new fruits, growers seek trademark protection. After spending years to develop the fruits themselves (intentionally bred varieties of fruit trees and nut trees can be protected by a plant patent in the U.S., and genes, traits, methods, and plant parts can be protected by a U.S. utility patent), there is little reason not to protect the brand name, especially since that is what customers will ask for at the grocery store. Currently there are issued registrations or pending trademark applications for the following: COTTON CANDY, for grapes (Reg. No. 4109691) ELEFANTE GREEN GOLD, for pineapples (Reg. No. 7492189) PINKGLOW, for pineapples (Reg. No. 6330579) RUBYGLOW, for pineapples (Reg. No. 7507675) , for melons (Reg. No. 7154543) Branding is Everywhere It shouldn’t really be much of a surprise that brands are coming to the produce aisle. Branded items have been coming home with us from stores for a long time, and various factors drive the success and longevity of a brand. Without protection, though, a brand’s prospects for longevity are diminished and the brand is subject to appropriation or misuse by others. Trademark protection can help ensure the continued vitality of any brand, whether that brand appears on the most fashionable catwalks, in movie theaters, in a stadium, or in the grocery store.
January 8, 2025
Page 13 of 35
About the Blog
Receive timely content, newsletters and event information delivered to your inbox.
