Offit Kurman Blogs

Intellectual Property

AI-Generated Works Dilemma: Balancing AI Terms of Service With Contractual Obligations

Like any emerging technology, AI is entangled with legal issues. These legal issues may not make for compelling entertainment, but they are important in shaping the use and potential of AI. The Legal Intelligencer Pop culture generally depicts artificial intelligence (AI) in extremes, from benevolent helpers like Rosie the Robot from “The Jetsons” to malevolent entities bent on humanity’s destruction, like HAL 9000 from 2001 or SkyNet from “The Terminator” movies. While these depictions make for captivating entertainment, they are far from the reality of today’s AI. Like any emerging technology, AI is entangled with legal issues. These legal issues may not make for compelling entertainment, but they are important in shaping the use and potential of AI. While no member of the Jetson household had to accept terms of service before instructing Rosie the Robot, contracts—terms of service—governing the use of AI, such as Dall-E and Midjourney, carry significant implications that users and their counsel should understand. This is especially true when creators utilize AI to generate works and designs for clients. For example, consider the scenario where a furniture store commissions a design firm to create a unique carpeting design that can be used to manufacture carpets to be sold at the store. Looking to expedite the creation of the design, the designer inputs a prompt to their chosen AI tool, which promptly generates a design. Let’s use this scenario as the starting point to explore some pertinent questions. Ownership of AI-Generated Designs Under U.S. copyright law, ownership of designs typically resides with the creator unless they assign their rights to their client in writing (copyright assignments must be in writing; see 17 U.S.C. Section 204). In this case, though, there is another layer. Who owns the work created by the AI? To answer that question, one must turn to the AI’s terms of service. Midjourney’s terms of service state that “User owns all assets they create with the services to the fullest extent possible under applicable law.” (see “Terms of Service,” visited March 9, 2024). Similarly, Dall-E’s terms of service state that “as between you and OpenAI, and to the extent permitted by applicable law, you retain your ownership rights in Input and own the output. We hereby assign to you all our right, title, and interest, if any, in and to output” (see “Terms of Use,” visited March 9, 2024). While such terms may resolve the issue in many cases, they fall short here because the assignment may not have much value. The Copyright Office has determined that copyright in AI-generated work can only be registered if there is a sufficient level of human involvement, although the specific level of involvement remains unclear [see Thaler v. Perlmutter, No. CV 22-1564 (BAH) (D.D.C. Aug. 18, 2023)]. While this ruling may not directly affect the question of ownership, it significantly impacts the enforceability of rights in AI-generated works. AI-Generated Designs Are Not Exclusive When clients hire a designer to create a carpeting design, they often seek an exclusive, original design distinct from designs used by others. In the traditional situation without AI involvement, the contract between the designer and the client typically states that the design will be exclusive to the client, even if the client does not own the copyright in the design. While Midjourney and Dall-E’s terms of service state that the user owns all rights in the AI-generated work, they also contain language giving the AI the right to use that output. Thus, Midjourney’s terms of service state that: by using the services, You grant to Midjourney, its successors, and assigns a perpetual, worldwide, non-exclusive, sublicensable no-charge, royalty-free, irrevocable copyright license to reproduce, prepare derivative works of, publicly display, publicly perform, sublicense, and distribute text and image prompts You input into the services, as well as any assets produced by You through the service. This license survives termination of this agreement by any party, for any reason. Dall-E’s terms of service are slightly less explicit, stating, “We may use content to provide, maintain, develop, and improve our services, comply with applicable law, enforce our terms and policies, and keep our services safe.” The meaning of both provisions is the same: any work created by the AI will be incorporated back into the system and utilized to generate new works in response to new user prompts. While Midjourney offers a potential solution, if users pay a subscription fee, this option only requires Midjourney to use its best efforts to refrain from publishing any output. This scenario raises multiple questions for our carpet designer. If the contract requires exclusivity for the design, AI utilization would seemingly breach this provision. Dall-E’s terms of service acknowledge the potential dissemination of designs to others, noting that “due to the nature of our services and artificial intelligence generally, output may not be unique and other users may receive similar output from our services.” This makes it very difficult, if not impossible, for designers utilizing AI to assure clients of design exclusivity. Further, the Copyright Office’s stance on copyright in AI-generated works means that neither the designer nor the client could sue a third party for infringement if that third party used a design incorporating elements of the AI-generated design. A lawsuit for copyright infringement cannot be brought without a copyright registration, as the U.S. Supreme Court ruled in Fourth Estate v. Wall-Street.com, 586 U.S. ___,  139 S. Ct. 881 (2019). However, as discussed above, the Copyright Office generally does not issue registrations for AI-generated works. What If the AI-Generated Design Infringes on Someone Else’s Work? A standard agreement between a designer and their client typically includes a warranty and representation that the design will be original and noninfringing. However, can a designer who uses AI to create a design genuinely make such a representation? At best, it appears challenging to assert a complete absence of infringement. More than contractual breaches are at stake. The designer’s reputation could be on the line, too, if it becomes known that AI was used to create a design that unintentionally infringed upon another’s work. Taking this a step further, multiple lawsuits are pending alleging copyright infringement because the AI involved in these cases was trained using copyrighted materials. Assuming these allegations are true, it is possible that in response to a designer’s prompt, an AI could generate a work incorporating elements of someone else’s copyrighted material or the entirety of someone else’s material, potentially leading to copyright infringement liability for the designer. The designer could also be liable to those involved in manufacturing the carpet for the store and possible wholesale partners, making the consequences for the designer that much worse. While no such cases have yet emerged in the United States, multiple AI companies have offered to indemnify users against claims of copyright infringement (see “OpenAI offers to indemnify ChatGPT customers for copyright infringement,” visited March 9, 2024). However, the value of such indemnification offers may be limited, especially if the AI companies are flooded with requests and cannot afford to indemnify all users. Furthermore, it remains unclear whether such indemnification from the AI companies would extend to the designer’s client in cases of resale. Although their interests are likely aligned, clients may prefer assurance that their interests will be actively defended. Additionally, the indemnification offered by the AI companies may not cover claims for breach of contract by the client against the designer, leaving the designer potentially liable to their client. Conclusion If Rosie the Robot had to grapple with these contract issues, completing her assigned tasks might have become more challenging (perhaps imposing legal requirements on SkyNet could have prevented its homicidal tendencies). The reality is that we must consider these legal provisions, which can carry significant consequences for AI users, most of whom likely overlook them. One solution is to avoid using AI altogether when creating designs, but this seems increasingly unrealistic with each passing day. Rather, contractual language may have to be updated to account for AI and how it functions. However, this adaptation will require time, and likely involve legal disputes. In the meantime, it’s crucial for all parties, including designers, to recognize the risks associated with using AI. Reprinted with permission from the April 16, 2024, edition of The Legal Intelligencer © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

May 1, 2024

Labor and Employment

FTC's Final Rule: Understanding the Ban on Non-Compete Clauses

On April 23, 2024, the United States Federal Trade Commission (FTC) announced its final rule on non-competition clauses, voting 3-2 to adopt the final regulations, known as the “Non-Compete Clause Rule.” This rule marks a significant milestone, establishing a comprehensive ban on non-compete agreements. The decision comes fifteen months after the FTC released its proposed rule in January 2023. The final rule will not take effect until 120 days after publication in the Federal Register, and lawsuits have already been brought challenging the authority of the FTC to issue such a broad rule. Nonetheless, it is crucial for employers to understand the broad requirements, the exceptions, and how to protect legitimate business interests in the wake of the FTC’s rule.   The rule applies to all businesses and individuals within the FTC’s jurisdiction, which covers all types of companies in nearly all industries. However, certain entities fall outside the FTC’s jurisdiction and, therefore, are exempt from the ban. These include banks, savings and loan institutions, federal credit unions, common carriers, air carriers, and certain non-profits. The rule restricts businesses and individuals from including non-competition language in future employment agreements, policies, handbooks, or websites for their workers. Additionally, it extends to non-solicitation and confidentiality agreements that function as de facto non-competition agreements. Importantly, this prohibition applies to all workers (not just “employees”), including independent contractors, interns, externs, volunteers, apprentices, and others. According to the rule’s preamble, “it is an unfair method of competition—and therefore a violation of section 5—for employers to, inter alia, enter into non-compete clauses with workers on or after the final rule’s effective date.” Once the rule takes effect, agreements and policies containing non-compete language will become unenforceable, with the only exception being for “Senior Executives.” The rule defines “Senior Executives” as a worker earning more than $151,164 annually and holding a “policy-making position.” Compensation can include salary, commissions, performance bonuses, and any other agreed-upon forms of compensation, excluding benefits or board and lodging. If the individual only worked part of the year, their earned compensation can be annualized to determine whether they meet the threshold. Policy-making positions include the president, CEO, or individuals with authority to make company-wide policy decisions. While “Senior Executives” will not have their non-competes retroactively voided like other workers, the rule prohibits covered businesses and individuals from entering into such agreements with future workers, even if they qualify as “Senior Executives.” Once in effect, the rule will also require businesses and individuals to notify workers of the ban and rescind existing non-competes (except those with senior executives). Model language for an appropriate notice can be accessed at Noncompete Rule | Federal Trade Commission (ftc.gov). Consequently, the bulk of existing restrictions will become unenforceable upon the rule’s enactment. The FTC anticipates the rule will increase employee earnings by at least $400 billion over the next decade. While the rule fundamentally prohibits all non-compete agreements between businesses and their workers, exceptions exist for non-competes between businesses and between the seller and buyer of a company. Specifically, the FTC’s rule prohibits anything that restricts, penalizes, or prevents a worker from pursuing a different job or starting a business after leaving their current job. That includes: Prohibitive terms and conditions expressly saying that a worker cannot get another job, such as with a competitor or embark on a business venture; Terms and conditions mandating financial penalties for workers who get another job or start a business; or Terms and conditions that aren’t labeled as non-competes but are so restrictive that they effectively prevent a worker from getting a new job or starting a business. This may include overly broad confidentiality clauses, which could potentially violate the National Labor Relations Act, Employers are advised to seek guidance from experienced employment counsel to ensure compliance. As noted at the outset, given the extremely broad nature of the rule, legal challenges are anticipated, potentially leading to further delays or permanently preventing the rule’s enactment. We will continue monitoring developments and providing updates accordingly. In the meantime, employers are encouraged to take advantage of this period by: Evaluating and analyzing existing agreements to ensure certain protections are in place in anticipation of the rule’s implementation; and Consulting with trusted legal counsel to devise a communication strategy regarding the notice requirement for impacted workers, ensuring effectiveness and compliance with legal standards. If you have any questions or need assistance with navigating these changes, please reach out to Gabriel Celii and Sarah Goodman

April 25, 2024

Ask Sarah: Navigating Sexual Harassment Complaints- Best Practices for Employers

Dear Sarah, I’ve recently been informed about a troubling situation involving ongoing sexual harassment within our organization. It appears that this behavior has occurred for several months, yet this is the first time it has been brought to my attention. The incidents range from inappropriate actions in the office to unwelcome advances at company-sponsored events and unsolicited messages outside of working hours. This is a serious issue that requires immediate attention. What should my organization do in response to this complaint? Can we really be liable for behaviors outside the workplace, such as at a bar? — HR Rep Unsure of How to Handle Sexual Harassment Investigations in the Wake of the #MeToo movement Good to hear from you, though I’m sorry it is under these circumstances. Conducting a thorough workplace investigation is paramount here. These are serious allegations; employees expect accountability, and the employer is responsible for ensuring a fair and transparent process. Regarding your question about liability for incidents outside of the workplace, such as those occurring at a bar, it's essential to understand that sexual harassment is by no means confined to the workplace. Put another way, it is not required for the harasser to be in the process of rendering his or her job duties at the time the harassment takes place; as long as an employment relationship exists at the time of the conduct, the employer may be liable. While the situation may seem complex, addressing all instances of harassment, regardless of where they occur, is imperative to avoid legal consequences. Failure to do so could leave the organization vulnerable to legal consequences. Below, I've outlined key steps for conducting a comprehensive investigation. Conduct Timely Investigations: Addressing workplace issues and complaints promptly is essential. Offering multiple reporting avenues to ensure the complainant feels comfortable coming forward and encouraging open communication can help mitigate reporting delays. Create an Investigation Plan: Developing a clear plan that outlines the complaint’s nature, investigation scope, and the involved participants is crucial. Consider whether the investigation will be privileged and designate the investigator. This ensures focus and efficiency, allowing flexibility if needed while maintaining the structure for a complete investigation. Determine the Investigation Scope: Clearly defining the goals of the investigation, such as ensuring fairness and reaching a resolution, is essential. Specify the scope by detailing the specific questions the investigation aims to address, maintaining focus and clarity. Avoid legal inquiries (i.e., was the complainant subject to a hostile work environment) and instead focus on factual aspects, such as determining if the complainant received unwelcome advances from a supervisor at the company holiday party. Gather and Preserve Relevant Documents: Collecting and maintaining relevant documentation throughout the investigation process is vital. This includes policies, witness statements, and any other pertinent information. Before interviewing any witnesses, the investigator should begin to gather, assemble, and review relevant documents that will eventually form the investigation file. Continuously update the investigation file as new documents become available. During witness interviews, take detailed notes, documenting observations and conversations with clear and descriptive language. Details such as body language and specific incidents should be included to provide a comprehensive overview. Finalize the Investigation File: Whether conveying the investigation findings through a written report or informal communication, it is crucial to ensure that all parties involved receive the information. There are some instances where a written report may not be wise; you should consult with counsel before determining how to conclude the investigation. Additionally, preserving the investigation file separately from personnel records ensures accessibility and confidentiality. It is also essential to securely store relevant communications, notes, and documents in a central repository. By following these steps and maintaining transparency throughout the process, the employer can uphold the integrity of its organization and provide a sense of fairness to all involved parties. If you have any further questions or concerns about conducting internal investigations, please don't hesitate to reach out. Blog Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. Consult a qualified attorney for advice on specific legal issues. 

April 24, 2024

Intellectual Property

Elevating Your Brand: Insights from Bridgerton's Licensing Success

When Bridgerton returns, its influence won’t be confined to the small screen. Now, thanks to a licensing arrangement with Ruggables, you can bring the elegance of Bridgerton into your home. Known for their diverse collaborations with iconic brands like Star Wars, Architectural Digest, Keith Haring, and Jonathan Adler, Ruggables has extended the Bridgerton aesthetic to your home. Since February, Bridgerton rugs have adorned homes, adding a touch of sophistication reminiscent of the beloved period drama. And the collaboration doesn’t stop there – a partnership with Bath & Body Works brought Bridgerton-inspired scents into personal care this past March. Given Bridgerton’s immense popularity, its expansion beyond the small screen should come as no surprise. In fact, it is following a path well-worn by other entertainment giants: licensing. Licensing can be a powerful tool for expanding a brand’s footprint, yet it carries significant risks. While a well-executed licensing program, such as the one that accompanied the release of last summer’s Barbie release, can create the illusion of ubiquity and fuel a seemingly insatiable demand for branded merchandise, it’s essential to recognize that success in licensing is not easily achieved. Behind every triumph lies diligent effort and meticulous planning. The initial step involves figuring out which products seamlessly complement the brand. Bridgerton’s meticulous attention to detail and well-appointed sets, such as Danbury House or Aubrey Hall, coupled with the buzz surrounding the show’s aesthetic, make a collaboration with Ruggable an ideal choice. This partnership effortlessly extends the visual appeal of the show into the homes of its audience. Next up is the crucial step of ensuring that the brand to be licensed is protected, which involves filing trademark applications to protect the mark associated with the goods slated for licensing. Notably, Netflix owns a U.S. trademark registration for BRIDGERTON covering entertainment services. It has a pending application covering an array of goods and services (e.g., cosmetics, electronic devices, jewelry, handbags, home linens, dishware, clothing, toys, and food). However, it is worth noting that rugs are notably absent from this coverage. One of the most critical parts of licensing is finding a partner you can trust (such as Ruggable, which boasts licensing arrangements with other major brands, likely facilitating its collaboration with Bridgerton). Why? Through licensing, you are giving up some control over your brand. It’s imperative to have confidence that your partner will exercise the same care about your brand as you do and that they will work hard to make the license successful. Plus, ensuring they fulfill their obligations under the license, such as making timely payments and adhering to ethical standards like avoiding child labor, is crucial. Remember, your licensing partners are a reflection of your brand; any missteps on their part could tarnish your reputation, especially in the eyes of discerning observers like Lady Whisteldown. Of course, no one has a crystal ball, and unforeseen events can create issues. That is precisely why a well-drafted license agreement is essential to any licensing effort. This agreement should comprehensively outline all the pertinent business terms, including territory, duration, channels of trade, licensed products, royalty rates, and more. Additionally, it should have mechanisms for termination, should such action become necessary. If, for some reason, the license arrangement does not work out, it is the terms of the license agreement that will control the parties’ relationship moving forward. From a brand owner’s point of view, the quality control provisions within a license agreement hold paramount importance. There are several compelling reasons for this. Firstly, the brand owner’s primary objective is to uphold the brand’s reputation by ensuring that licensed products maintain high-quality standards and reflect the brand’s core values. Consequently, license agreements often grant brand owners the authority to approve prototypes and production items. It's imperative for brand owners to promptly provide approvals to avoid disrupting marketing plans. Secondly, failure to exercise quality control could result in what is known as “naked licensing,” which can result in the potential forfeiture of their trademark rights. While a good quality control provision in the license agreement serves as a preventative measure to a naked license situation, the brand owner’s active monitoring of product quality is essential. After all, consumers seeing a brand on a product will assume that the product meets certain standards of quality. And as you know, dear reader, Queen Charlotte can be exacting. This year’s diamond of the licensing season could well be the rug collaboration. If you are seeking to elevate your brand to new heights of success in the upcoming season, I’m here to provide professional guidance in crafting and executing a dynamic licensing program. Let’s work together to ensure your brand shines brighter than ever before in the competitive world of licensing.

April 23, 2024

Family Law

Navigating Passover Travel Challenges in Divorced Families

Passover, a joyous celebration of freedom and renewal, often inspires many Jews to embark on journeys to extravagant Passover programs spanning from Miami to Israel. However, for divorced individuals, these once familiar programs of familiarity and comfort during marriage may now remain unvisited. Travel, particularly concerning custody arrangements, can present complex challenges. Concerns such as international travel or transportation methods may arise, highlighting the importance of a clear understanding of legal rights and obligations. For divorced parents, understanding their legal rights and obligations regarding custody and travel is essential. This often involves establishing a clear custody agreement that outlines each parent's rights and responsibilities concerning the children. In cases of travel disputes or concerns, seeking legal guidance or mediation is often necessary for a resolution. International travel with children adds further complexity due to issues such as passport and visa requirements as well as the potential risk of parental abduction. Many countries have specific laws and procedures to prevent such incidents, often mandating consent from both parents of international travel.  Given the current global climate, with rising antisemitism adding further uncertainty, divorced parents may hold drastically different views on international Passover travel. Effective communication and cooperation between parents are vital, especially when decisions about travel and the well-being of their children are at stake. Open dialogue and a willingness to compromise can help avoid conflicts and prioritize the children's needs.  Navigating divorce-related issues, custody arrangements, and travel requires careful consideration of the legal framework and the best interests of the children. Consulting with legal professionals focusing on family law can provide invaluable guidance and support. If you have any questions or need assistance, please feel free to reach out for a consultation.  Wishing you and your loved ones a Happy Passover.

April 22, 2024

Commercial Litigation

Suing Someone? Five Crucial Factors to Consider Before Proceeding

So, you think you can sue. Maybe you had a contract, and the other side breached it. Or maybe someone owes you money, and you’re ready to go after them. Not so fast. Starting a lawsuit is a big step, and there are many considerations you and your attorney should discuss before you proceed. Here are five crucial things to know and understand before suing someone. Sketch Out a Cost-Benefit Analysis: Lawsuits are expensive. If you’re looking to go after someone for a few thousand dollars, you might want to reconsider it. Attorneys’ fees, court costs, and other expenses quickly add up, and there are no guarantees of success. While the desire for restitution may be strong, avoid rushing into litigation that could potentially worsen your financial position. Assess The Likelihood of Collecting (If You Win): Sometimes, your case is only as good as your adversary’s financial resources. If the other side is going to file for bankruptcy, then it’s likely that even if you win your case, you wouldn’t be able to collect. If bankruptcy is not a possibility and you find yourself among numerous creditors seeking repayment, the probability of receiving the full amount owed to you is notably diminished. Evaluate Your Opponent: If you’re going against a small company or individual, that’s one thing. But if you’re taking on a large corporation, you should assume that they will hire lawyers, pay them well, and make the case a battle of resources. If the amount you’re owed is high enough, this may not be a deterrent, but be prepared to devote a substantial number of resources to the fight. Distinguish Principle from Damages: Many of the most contentious lawsuits are not even that valuable in terms of their outcome. Often, they stem from disputes over what the parties see as right versus wrong or a desire to “send a message” to the other side rather than a clear goal of obtaining damages. There are better ways to achieve these goals than going through the court system. Most lawsuits end in money changing hands rather than the court ordering parties to abide by principles. Although it may be difficult, take a step back from the dispute. Analyze whether there was actual harm for which you can pursue damages. If the dispute primarily revolves around principle, it’s important to reconsider whether a lawsuit will accomplish what you want. Act Quickly: One thing is certain: regardless of the validity of your claims against the opposing party, the clock is ticking. The statute of limitations governing the time frame for filing such claims is running. Once you are out of time to file your claim, you forfeit your opportunity to file your claim. Courts do not make exceptions for late claims, regardless of the circumstances. In conclusion, the decision to pursue legal action through a lawsuit should not be taken lightly. Numerous critical factors must be carefully considered before proceeding, from the financial implications to the likelihood of a successful outcome and collection. As an experienced litigation attorney, I’ve seen firsthand how lawsuits can have significant and far-reaching consequences for the parties involved and their relationships. That’s why it’s essential to approach this decision thoughtfully and in close consultation with legal counsel. Remember, the goal is not to discourage you from seeking justice or the rightful resolution of a dispute. Rather, it's to ensure you make an informed decision that aligns with your best interests and doesn't leave you in a worse position than when you started.

April 17, 2024

Family Law

International Assets and Divorce

The division of international assets during a divorce can be complex due to differing laws and regulations in each country. The process of dividing international assets in a divorce typically involves the following steps: Identification of Assets: Both parties must disclose all international assets, including property, bank accounts, investments, and other assets held abroad. Valuation: The assets must be valued to determine their worth. This can be challenging when dealing with assets in different currencies and markets. Jurisdictional Issues: Different countries have different laws governing divorce and property division. The legal jurisdiction of the assets (i.e., which country's laws apply) needs to be determined. Property Division: Depending on the laws of the jurisdiction, international assets may be divided according to community property or equitable distribution principles. This may include splitting the assets equally or fairly between the parties. Currency Conversion: When assets are in different currencies, they may need to be converted to a common currency for division. Legal Proceedings: Divorcing couples may need to work with legal professionals in multiple countries to resolve issues related to international assets. Enforcement: Once a division agreement is reached, ensuring the enforcement of the agreement across different countries can be complicated. Legal processes may vary by country. Tax Implications: Dividing international assets may have tax consequences in different jurisdictions. Consulting tax professionals familiar with international tax laws is important. Settlements: In some cases, couples may reach a settlement agreement that includes international assets. This can simplify the process and avoid potential conflicts. If you are going through a divorce involving international assets, it's important to seek legal advice from professionals with experience in international divorce and property division.

April 16, 2024

Family Law

Essential Components of a Parenting Plan During Divorce

Divorce can be a challenging experience for families, especially when children are involved. One of the most important aspects of a divorce involving children is the creation of a parenting plan. A parenting plan, also known as a child custody agreement, outlines how parents will share responsibilities and time with their children after a divorce. Crafting a comprehensive and effective parenting plan can help reduce conflict and provide stability for the children. Here are the essential components to include in a parenting plan during a divorce: Custody Arrangements Physical Custody: Specifies where the child will primarily reside and the schedule for the child's time with each parent. Legal Custody: Determines which parent (or both) will have the authority to make major decisions regarding the child’s upbringing, such as education, healthcare, and religious upbringing. Visitation Schedule Establish a clear schedule for when the child will spend time with each parent, including regular visitation days, holidays, and special occasions such as birthdays. Include details on pick-up and drop-off times and locations to avoid misunderstandings. Communication Outline expectations for communication between the child and each parent, including phone calls, video chats, or other forms of contact. Specify how parents will communicate with each other about the child, including preferred methods (e.g., email, text) and frequency. Dispute Resolution Include a process for resolving disputes between parents, such as mediation, counseling, or another neutral third party. Avoid vague language and provide clear steps for conflict resolution to minimize misunderstandings. Child Support and Financial Provisions Specify the amount and frequency of child support payments, as well as how expenses such as medical care, education, extracurricular activities, and other significant costs will be divided. Address the child's insurance needs, including health, dental, and vision coverage. Education and Healthcare Address each parent's involvement in the child's education, including school-related decisions and participation in school activities. Specify how healthcare decisions will be made, including the choice of doctors and medical treatments. Travel and Relocation Define any restrictions on travel with the child, including requirements for notifying the other parent and obtaining consent for trips. Include provisions for what happens if one parent wants to relocate with the child, such as notice periods and mediation. Review and Modification Establish a process for reviewing and modifying the parenting plan as the child grows and circumstances change. Specify how often the plan will be reviewed (e.g., annually) and under what circumstances modifications can be made. Safety and Well-Being Address any concerns about the child's safety, including provisions for supervised visitation if necessary. Include guidelines for both parents regarding any substance abuse issues, criminal activity, or mental health concerns. Miscellaneous Provisions Consider including clauses for other aspects such as religious upbringing, participation in extracurricular activities, and access to the child's records (e.g., school, medical). Ensure the plan is as detailed as possible to avoid ambiguity and potential disputes. A well-thought-out parenting plan can provide a roadmap for co-parenting after divorce and help ensure the child's best interests are prioritized. Consulting with legal and family professionals can help parents create a comprehensive plan that suits their family's unique needs.

April 16, 2024

Construction

Show Me the Money: The Importance of Owner's Proof of Financing

Lack of project financing can be a very unpleasant surprise for a contractor (and all players on the project). In a volatile environment — where project costs are increasing and borrowed money, credit, and leverage are increasingly difficult to obtain — what are some approaches for a contractor to address and reduce these risks upfront or during the project? The best time to address project financing concerns is at the beginning, during preconstruction, and certainly before work has broken ground. Many contractors are hesitant to probe and inquire about project finances. If, however, there is any concern about whether the project will be adequately funded, it is best to ask for the necessary information directly. Representing that it is standard practice and policy may help reduce tension on disclosure of the information. An open and honest discussion on the financing not only ensures that the project does not stall but also is reasonable because a contractor’s role in confirming the project costs, schedule, setting contingencies, experience and reputation, and qualifying the trades is a key component to the owner’s discussions with the bank to obtain financing. It makes sense that if the owner is reliant on the contractor to help obtain the financing, then, likewise, the contractor should have the ability to confirm that the financing is sufficient, too. At the start of the relationship, the contractor can communicate to the owner that it expects to receive satisfactory proof of financing that might include any of the following: Commitment letter from bank/lender or equivalent term sheet or written confirmation from a lending committee at the bank. Oral conversations with the bank/lender to confirm financing. Documentation confirming loan amount, terms for the loan and disbursements, and a commitment to a loan closing date. Documentation of disbursements, such as disbursement agreements or a disbursement summary. If the owner is self-financing the project, it is reasonable to ask that funds be set aside for the project. This could be done with the bank (or a third party) and a statement showing proof of funds. It is also reasonable to ask for financial statements, credit reports, and bank strength ratings, especially if it is self-financed by an unfamiliar owner. Depending on the circumstances, further information might be necessary, including details of the owner’s budget for the project. Such details should be set forth in the owner’s pro forma or related documents. The documents should identify proper contingencies, reserves, and budgets to cover the various issues that can arise with the owner’s land development, design, and construction. Including clauses in the prime contract that address financing issues is also useful. The contract should include a clause that entitles the contractor to request additional proof of funding or even the right to engage in direct discussions with any lender or bank. The clause should also express that the contractor has the right to suspend work in the event of slow payments or indications of problems with the owner’s financing on the project. Contractors should also pay particularly close attention to the ownership entity of the land/project. First, the owner should provide adequate information to confirm the record owner of the real estate. If the owner of the real estate is an unknown company or is a “single shot” LLC used for holding the real estate (often indicated by its name, which uses the property address, such as, for example, 35 Main Street, LLC), then, the contractor should realize that the LLC owner of the property likely has no other assets other than the project property itself. In these “single-shot” scenarios, a mechanics’ lien right is the best approach to lack of payment because it attaches to the property itself, and, other than the property, the LLC may have limited or no other assets. Also, it is best to obtain the information of the LLC owners (members) if possible because the financials of a single-shot LLC are only as strong as the loan and members backing the LLC. If the contracting party is not the record owner, that creates a few additional wrinkles that must be addressed for both proof of financing and also mechanics’ lien rights. A last point for consideration: Sureties often require disclosure of project finances. One tactic is to bond the project with a surety, which has some benefits aside from this discussion, and use the surety as the reason for all the financial questions. This shifts any tension from the contractor to a third-party surety. Handling problems with project financing can be a thorny situation at any point in a project. The best practice is to have sound internal protocols and trusted counsel for troubleshooting. Offit Kurman construction attorneys are available to advise and counsel contractors, construction managers, design-builders, design professionals, subcontractors, and developers on construction contracts, risk, and project disputes.

April 16, 2024

Labor and Employment

In the Know Series - Labor & Employment Law Changes – Federal

Stay Ahead of the Curve with Key Insights from Our L&E Team Now that the first quarter is behind us, employers across the nation must navigate changes in federal labor and employment regulations. Our team has compiled a comprehensive overview of the latest updates at the federal level, providing insights to help you stay compliant and proactive in managing your workforce. While not updates to the law, notable issues are below: With increased scrutiny on the ERC, the Service is starting to send out letters denying the credit. We anticipate it will send letters to employers who deserve the credit. Misdirected payroll tax deposits by payroll companies have increased, particularly where the payroll company handles payroll for related companies. Because they involve payroll taxes, the Service is particularly aggressive in its collection efforts. The quicker the client lets us know, the easier (and quicker) it is to resolve.  ACA Issues: companies are receiving deficiency notices for failure to provide MEC. Most notices now are for the 2020 tax year. It is important for employers to understand that Treas. Reg. § 54-4980H-5((e)(2)(ii) does not define whether an offer of coverage is affordable. It simply provides a safe harbor. IRC § 36B(c)(2)(C)(i) determines whether an employer’s offer of coverage is affordable, which means even if coverage does not meet the safe harbor, it still may be affordable, so the employer avoids a penalty. We have obtained penalty abatements for several clients on this issue. Employer-Sponsored Healthcare Plans - The Next ERISA Fiduciary Duty Battlefield: With the issuance of much awaited final regulations, DOL has made clear that ERISA fiduciary duties apply with equal force to health and welfare benefit plans. Plaintiffs’ lawyers are actively looking for plaintiffs who are participants in employer-sponsored plans, particularly following the recent court decision regarding Johnson & Johnson’s healthcare plan.  As in many areas, the best offense is a strong defense, which begins with companies implementing a health and welfare benefits committee to take a much more active role in the selection and negotiation of health plan benefits and documenting this process   We have guided many clients on how to organize and structure health and welfare benefit committees.

April 15, 2024

Commercial Litigation

Protecting Real Estate Rights - Filing a Lis Pendens in Virginia

In the realm of real estate litigation, securing or defending your interests during a pending legal action is paramount. One tool often utilized is the filing of a lis pendens, a Latin term meaning "suit pending." In Virginia, the lis pendens memorandum serves as a notice to prospective buyers, lenders, or interested parties that a property is subject to a claim involved in litigation. How to file a lis pendens in Virginia: Initiate Legal Action concerning an interest in Real Property: First, a legal action concerning the specific real property must be filed. Common legal actions include claims related to ownership, title defects, construction, or other property interests. Importantly, a party cannot file a lis pendens memorandum unless the action on which the lis pendens is based seeks to establish an interest by the filing party or to enforce a zoning ordinance.  Code § 8.01-268. Draft the lis pendens memorandum: Once a legal action is filed, the claimant must draft the lis pendens memorandum and include the following information:the title of the pending legal action the general object of the legal action the court where the legal action is pending the amount of the claim asserted by the plaintiff a description of the real property the name of the person whose estate is intended to be affected by the lis pendens a description of the alleged zoning violation (only in actions to enforce a zoning ordinance) Recording with the Circuit Court Clerk: Once drafted, the lis pendens memorandum must be recorded with the Circuit Court Clerk in the jurisdiction where the property is located. Recording ensures that the memorandum becomes part of the public record and is accessible to anyone conducting due diligence on the property. Maintaining Compliance: Claimants must adhere to all statutory requirements and deadlines associated with filing a lis pendens in Virginia. Failure to comply with these requirements could result in the lis pendens being deemed invalid or ineffective. Why File a Lis Pendens? Preservation of Property Rights: Filing a lis pendens in Virginia allows claimants to preserve their rights and interests in real property during the pendency of litigation. The lis pendens is a publicly recorded document that provides notice to potential buyers, lenders, or claimants and can prevent unauthorized transactions or encumbrances on the property. Protection Against Conveyances: Lis pendens acts as a safeguard against possible fraudulent or voluntary conveyances of property during pending litigation. By alerting third parties to the existence of pending litigation concerning real property, claimants can deter individuals from attempting to transfer or encumber the property in bad faith. Enhanced Negotiating Position: The presence of a lis pendens can strengthen a claimant's negotiating position during settlement discussions. Interested parties may be more inclined to reach a favorable resolution, knowing that the property's status is subject to ongoing litigation. Public Notice: Filing a lis pendens provides public notice of the legal action, thereby reducing the risk of subsequent purchasers or lenders claiming ignorance of the litigation. This transparency promotes fairness and protects the interests of all parties involved. Conclusion Filing a lis pendens serves as a vital tool for claimants seeking to protect their rights and interests in real property during the course of litigation. By following the prescribed process and understanding the strategic advantages of filing a lis pendens, claimants can effectively assert their claims and mitigate the risk of adverse actions against the property. If you or your organization have a real estate-related claim, consulting with a trusted attorney in your area is critical. While outcomes cannot be guaranteed and past performance cannot assure future success, Offit Kurman litigator Anders Sleight | Offit Kurman is available to evaluate your specific situation.

April 11, 2024

Labor and Employment

Ask Sarah: Handling Extended Employee Absences Effectively

Dear Sarah: Help! I have an employee who has been out of work for twenty weeks. He has an “expected” return to work date, but we have not received anything definitive. Because of his absence, business is suffering, and I need to find someone to take over his job duties. What am I legally permitted to do here!? — Frustrated & Confused HR Rep Believe it or not, encountering this issue is not uncommon. When an employee requests additional time off beyond their twelve-week Family Medical Leave Act (FMLA) entitlement (assuming FMLA applies to that employer), it often leaves employers feeling perplexed. Accommodating a disabled employee under the Americans with Disabilities Act (ADA) can pose significant challenges for employers. If the employee's limitations prevent them from fulfilling essential job duties, granting an unpaid leave of absence may be deemed a reasonable accommodation. However, relying solely on unpaid leave creates staffing challenges for employers. Nonetheless, if other alternative accommodations are not feasible, unpaid leave should be considered an option. Reasonable accommodations for a qualified individual with a disability — defined as someone who, with or without reasonable accommodation, can perform the essential functions of their job — may involve various measures, including:   Eliminating non-essential job duties Modifying job processes Providing supportive aids to assist the employee Adjusting schedules to accommodate needs Offering light duty positions if available Facilitating transfers to open positions Granting an unpaid leave of absence, among other options While an employer is not obligated to provide the exact accommodation requested by an employee, it is required to provide a reasonable accommodation that enables the employee to effectively perform essential job functions. If implementing the only feasible reasonable accommodation would result in substantial difficulty or expense for the employer or fundamentally alter the nature of the job, it may be deemed an undue hardship, exempting the employer from providing it. The threshold for defining undue hardship may vary based on the employer's size and resources, but meeting this standard can be particularly challenging in certain circumstances. The Equal Employment Opportunity Commission's (EEOC) ADA guidance suggests that considering unpaid leave as a reasonable accommodation is wise for employers. While EEOC guidance lacks the weight of law, courts often find it persuasive due to the agency's role in ADA enforcement. The duration of leave an employer must grant is not explicitly defined and should be assessed on a case-by-case basis. The EEOC and numerous federal courts assert that an indefinite leave of absence without a reasonable estimate of the return-to-work timeframe may constitute an undue hardship and is not mandatory. However, situations where an employee's medical provider recommends an extended absence before the employee returns to the job pose challenging and context-specific questions influenced by factors such as the nature of the employer's business, the employee's role, and the anticipated duration of absence. While definitive answers may not exist for every scenario, if the requested leave has a defined duration and supporting medical documentation suggests it will enable the employee to return to work, employers retain the right to deny it if granting the leave would unduly burden the business. Furthermore, even if a specific leave initially seems manageable, circumstances may change over time, emphasizing the importance of requiring thorough documentation throughout the leave period. For example, requesting a note from the treating physician specifying an estimated return-to-work date and asking the medical provider to opine on the medical rationale for the leave may help make the leave process more transparent and facilitate the employee's return. Additionally, gathering this information could help employers apply the undue hardship analysis in a manner that is advantageous to its operations. Handling successive leave requests cautiously and seeking consultation before making decisions are crucial practices to uphold. In conclusion, navigating extended employee leaves beyond the FMLA entitlement can be daunting for employers, especially when accommodating disabled employees under the ADA. While unpaid leave may be a reasonable accommodation, it can pose operational challenges. Employers must explore alternative accommodations while considering undue hardship factors, such as significant difficulty or expense. The EEOC's guidance on unpaid leave underscores its importance as a potential accommodation, albeit without a specified duration. However, indefinite leaves without a return-to-work timeframe may constitute undue hardship. Employers should carefully assess each situation, document medical rationales, and seek legal advice to make informed decisions. If you're facing similar HR dilemmas or need legal guidance on employment matters, don't hesitate to contact me for assistance. Reach out today to ensure compliance with ADA regulations and protect your business's interests. Blog Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. Consult a qualified attorney for advice on specific legal issues. 

April 10, 2024

Family Law

Credit Card Chaos: Safeguarding Your Credit in Separation

Often spouses share joint credit cards during their marriage, or one spouse may be added as an authorized user on the other’s credit card. However, upon separation, one party may continue using the card, leading to significant debt accumulation.  When considering divorce or separation, paying prompt special attention to the status of your credit accounts is crucial. Determine if the accounts are joint or individual. If there are any individual accounts, check if your spouse is an authorized user. Please consult an attorney about closing joint accounts or converting them to individual ones before canceling any authorized user cards. Additionally, it is essential to run a credit report to identify all accounts in your name or jointly. Often, one spouse may be unaware that their credit is linked to the other spouse’s accounts. In many divorce cases, parties and their attorneys will reach an agreement as to who is responsible for which credit card debt or arrange to pay off specific debts from marital assets before or after the finalization of the divorce. However, what if one party fails to abide by the agreement? In the case of a joint account, failure to pay by one party would adversely impact both parties’ credit scores. While the innocent spouse can bring the offending spouse back to court for violating the order, there is no court remedy to repair a credit score. Avoid leaving any loose ends in your divorce proceedings. Ensure all joint accounts are closed and paid off before the divorce is finalized or transferred into the responsible party’s name. Don’t solely rely on your spouse’s agreement to pay off the debt. Secure funds from another asset, if possible, to settle the account promptly and ensure your name is removed from the account as soon as possible. When considering divorce or separation, consult with an experienced family law attorney such as Megan Smith and Emily Ingall about closing joint accounts or converting them to individual accounts before canceling any authorized user cards. Should you have any questions, don't hesitate to contact Megan and Emily for guidance.

April 9, 2024

Real Estate

Legal Considerations for Warehouse Leases in the Transportation and Shipping Industries

Warehouse leases are integral to the operations of businesses within the transportation and shipping industries, providing essential storage hubs for goods in transit. Navigating the legal landscape surrounding warehouse leases requires careful consideration of various factors to protect the interests of both landlords and tenants. From mitigating liability concerns to ensuring regulatory compliance, here are essential legal considerations to address when entering into warehouse lease agreements. 1. Lease Terms and Conditions Warehouse leases should comprehensively outline the terms and conditions of occupancy to ensure clarity and protect the interests of all parties involved. These terms should include, but not be limited to, the duration of the lease, permitted use of the space, rental rates, payment terms, options for renewal, restrictions on alterations, obligations regarding maintenance and repairs, termination rights, and provisions for parking arrangements.    When evaluating your space requirements, consider factors like storage capacity, loading and unloading requirements, and any unique features needed for your operations. Make sure that the lease contains an adequate and clear description and depiction of the space. This becomes especially critical for new construction leases when the square footage of the space can only be estimated at the time of lease signing. In such cases, the lease should reserve a right for you to measure and confirm the square footage upon delivery of possession by the landlord and should define the method of measurement to be used.  2. Build-Out / Tenant Improvements It is imperative at the outset to have clear guidance for the initial build-out of your space, including who is responsible for what, who pays for what, and the sequence in which the build-out must occur to ensure timely delivery of the space. The governmental approvals required for such build-out and determining the parties’ obligations to secure such approvals are of significant importance. The timeframe to obtain any necessary approvals will factor into negotiating the rent commencement date. Moreover, make sure to negotiate and have the lease explicitly state who shall own such alterations and any requirements for restoring the space to its original condition at the expiration of the lease. 3. Liability and Insurance Determining liability for loss, damage, or theft of goods stored in the warehouse is crucial. The lease should outline insurance requirements for both parties, including general liability insurance and property insurance. Provisions should also address indemnification obligations to protect against legal claims arising from warehouse operations or landlord negligence. 4. Casualty and Condemnation Accidents and other forces of nature happen, and when they do, both parties generally want the space to be restored as soon as possible. You should consider rent abatement and termination rights dependent upon the timeframe for restoration. Events of condemnation (eminent domain), while not terribly common, do happen, and the lease should not be silent about what happens when they do. 5. Maintenance and Repairs Establishing clear maintenance and repair responsibilities guidelines is crucial for preventing disputes between landlords and tenants. The lease should specify which party is responsible for maintaining the warehouse’s structural integrity, along with overseeing essential systems such as HVAC, plumbing, and electrical. Additionally, it should outline provisions for emergency repairs and articulate the process for addressing maintenance concerns. By defining these responsibilities upfront, both parties can mitigate potential conflicts and ensure the smooth operation of the leased premises. The lease structure will determine whether you are required to pay additional rent for property taxes, insurance, and maintenance expenses. Under a triple net lease, the costs of owning and operating the building are passed through to you. To safeguard your interests, limits should be imposed on potential increases in the amounts of operating expenses over the term of the lease, certain costs should be excluded from being passed through to you, and you should have audit rights. These measures ensure transparency and protect you from unforeseen financial burdens, enhancing the overall fairness and sustainability of the lease agreement. 6. Compliance with Regulations Warehouse operations are subject to various regulations at the local, state, and federal levels, including zoning laws, building codes, and environmental regulations. Not only should the lease require compliance with applicable laws and regulations, with provisions for audits, permits, and certifications as necessary, but you should also perform due diligence prior to lease execution to ensure you do not inherit landlord’s or a prior tenant’s liability.  7. Security Measures Security plays a paramount role in warehouse operations to protect valuable inventory from potential theft or damage. A comprehensive lease agreement should address security measures such as surveillance systems, access controls, and fencing. Landlords may also have obligations to provide adequate lighting and secure entry points to the premises. 8. Subleasing and Assignment You should seek flexibility to sublease or assign your lease rights to third parties. The lease should outline the process for obtaining landlord consent for subleasing or assignment, including any conditions and restrictions to such consent and any exceptions from requiring such consent. At the lease negotiation stage, you should consider the potential for a future sale or merger of your business, in which case flexibility of assignment of your lease rights is particularly important. 9. Termination and Default The lease should include provisions for termination and default, specifying circumstances under which either party can terminate the lease. This may consist of failure to pay rent, breach of lease terms, or insolvency. In addition, the lease should include clear guidelines for notice periods, cure periods, and remedies in the case of default to protect the interests of both parties. From your perspective, you will want to ensure you receive notice of any alleged event of default and an adequate opportunity to cure before the landlord can exercise remedies. Conversely, the landlord will want to ensure that it has events of default that can be triggered automatically or quickly, as well as enforceable remedies. 10. Dispute Resolution Mechanisms Despite efforts to prevent conflicts, disputes may arise between landlords and tenants during the lease term. The lease should include mechanisms for resolving disputes, such as mediation, arbitration, or litigation. Clear procedures for dispute resolution help expedite resolution and minimize disruptions to warehouse operations. Addressing these legal considerations in warehouse leases is essential for protecting the interests of landlords and tenants in the transportation and shipping industries. By clearly defining rights, responsibilities, and obligations upfront, you can minimize legal risks and disruptions in the operation of your business, ensure compliance with regulations, and maintain a positive landlord-tenant relationship throughout the lease term. For personalized assistance in tailoring your warehouse lease to suit your specific needs and circumstances, please feel free to contact Faith Miros or Mark Wendaur. We are here to help you navigate the complexities of warehouse leasing with expertise and care.

April 9, 2024

Labor and Employment

In the Know Series - Labor & Employment Law Changes in California

Stay Ahead of the Curve with Key Insights from Our L&E Team Now that the first quarter is behind us, all California employers should ensure that they are aware of and are in compliance with the new 2024 California employment laws. Our team has compiled a concise overview of these changes to keep you informed and prepared for compliance. The west coast was fairly active this year and the following are the major changes in the law: Effective January 1, 2024: State-mandated sick leave increases to 5 days. If the client has PTO, the analysis may be a math problem. Also, remember that several California cities have their own sick leave laws that require more than 5 days of sick leave. All employers, regardless of size, must allow up to 5 days of reproductive loss leave (for failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction). This is in addition to family medical leave. The state has codified the fact that non-competes are void, with the exception of the sale of goodwill when a business is sold as set forth in Business and Professions Code § 16601. One new statute states they are void regardless of where signed (even outside the state). Another statute requires employers with employees who have signed non-competes to notify them by February 14, 2024, that the non-compete provision is void. Marijuana use becomes a protected basis under the Fair Employment and Housing Act. Employees cannot use or be under the influence at work, but an applicant cannot be denied employment if they test positive for marijuana. The regulations regarding criminal background checks were revised requiring the employer to conduct a detailed individualized assessment before denying an applicant employment. The minimum wage is increasing to $16.00/hour on January 1, 2024, which means exempt employees need to earn a minimum of $66,560 annually and $5,546.67 monthly in order to be exempt. Effective April 1, 2024 The minimum wage for fast food workers rises to $20/hour. Effective July 1, 2024: All employers will be required to have a workplace violence plan. Similar to an Injury & Illness Prevention program if you are familiar with those plans – in other words, it needs to be in writing, employees need to be trained and it will take some effort to be in compliance.

April 5, 2024

Intellectual Property

Navigating Trademark Complexities: Meta’s Brazilian Setback

Meta Platforms Inc., the behemoth that owns Facebook, Instagram, Threads and others, recently faced a court in Brazil that prohibited the company from using the Meta trademark in the country. A digital transformation consultancy has held a registered trademark for Meta in Brazil since 1990, resulting in Meta Platforms being blocked from using the trademark. The refusal in Brazil demonstrates the challenges inherent in global branding. For one thing, searching for the availability of trademarks worldwide is prohibitively expensive for many businesses. Of course, Meta is a deep-pocketed company that likely researched the availability of this trademark far and wide before announcing their decision to change their name from Facebook in October 2021. However, for reasons unknown, the company went forward with the rebrand, even though this obstacle existed in one of the largest countries in the world. Of course, we do not know what Meta’s team of lawyers advised, but regardless, the company finds itself in an unfortunate situation, unable to use META in Brazil. This scenario is not limited to international borders; it can also occur within the United States. A trademark registration, which can be obtained if a business uses a trademark in more than one state, provides nationwide rights and protections against later users. But what happens when one company adopts a brand that is already used in a part of the United States? The junior user may need to select one trademark to use in one part of the country and a different one for the rest of the country. Such is the case with the ice cream brand Dreyer’s, which people in the eastern half of the U.S. know as Edy’s. When Dreyer’s came along, there was already a well-known brand of ice cream sold in supermarkets called Breyers. Photo courtesy of Laura Winston Photo courtesy of Laura Winston Another instance is Hellmann’s mayonnaise, known as Best Foods mayonnaise west of the Rocky Mountains. The U.S. Patent and Trademark Office may grant what is known as a “concurrent use registration,” which carves out the territories in which each party has the rights derived from mark registration. This is an exception that challenges the principle that a trademark registration provides nationwide rights. Whether your business is going global or you are considering expanding within the United States, it is best to consult with an attorney who can advise you about the best ways to protect and expand your trademark rights. If you have any questions, please feel free to reach out.

April 4, 2024

Family Law

Unleashing Your Inner Barbie: Embracing Independence after Divorce

While some may view the Barbie Movie as nothing more than a whimsical, kitschy movie based on the famous Mattel doll. However, when viewed through the lens of Ms. Greta Gerwig, the film’s director, the film illuminates Barbie’s journey of self-discovery as Barbie learns how to stand on her own two legs, both literally and figuratively, realizing that she does not need a “Ken” to define herself. Thus, she asserts her independence and defines herself on her own terms, free from the constraints of societal norms and expectations. In marriages, women often grapple with identity issues, feeling like their sense of self has been replaced by their role as a wife or mother. A common cause for divorce is a spouse’s desire and need to rediscover their identity. In post-divorce life, many women face the challenge of discovering who they are, what skills and resources they will need to navigate an independent life, where they fit into society, and, most importantly, how to successfully and meaningfully live life without their “Ken.” Progressing forward post-divorce is more challenging for more women than men since many must remain financially connected to their “Ken” through spousal and child support payments. Closure becomes more elusive, hindering pursuing new opportunities and nurturing personal growth. Whether you want to be a Teacher Barbie, an Attorney Barbie, a Nurse Barbie, or a Real Estate Agent Barbie, it is important, post-divorce, to surrender to your imagination and rely on your matrimonial attorney. They should not only have the experience to navigate you through the financial intricacies of divorce but also demonstrate empathy for your post-divorce journey. Recognize that finding your best Barbie may require additional support, such as a competent financial planner to help you manage assets, a therapist to boost self-esteem and confidence, or a vocational coach to aid in re-entering the workforce. Trust in this collaborative approach to empower yourself and pave the way for a fulfilling post-divorce life. In a poignant moment near the movie’s end, Barbie reflects, “I don’t think I have an ending.” Ruth Handler, the creator of Barbie (or rather her ghost, as portrayed by Rhea Perlman), affirms that this lack of conclusion was intentional. “That was always the point,” she explains to Barbie, “I created you so you wouldn’t have an ending.” Like Barbie’s story, divorce is not an end but a new beginning. It’s your narrative to shape, filled with choices and the occasional misstep. Embrace your journey, forgive yourself for any missteps, and remember to draw strength from your inner Barbie whenever doubt creeps in. In the journey of life, divorce marks not an ending but a beginning – an opportunity to redefine yourself and craft your own narrative. As you navigate this new chapter, our legal team is here to provide the support and guidance you need to empower yourself and embrace your future with confidence. Reach out to us today to take the first step towards reclaiming your independence and authoring your own story. Remember, you’re not alone – let us help you channel your inner Barbie and write the next chapter of your life. NOTE: BARBIE is a registered trademark of MATTEL, INC.

April 3, 2024

Business

Shipment Success: The Importance of Pre-Contract Qualification in Fulfillment Centers

Shipping fulfillment centers play a pivotal role in the third-party logistics ecosystem. These businesses are uniquely positioned as both a warehouse to store products sold on e-commerce sites and a service provider responsible for packing and shipping such products once ordered. This dual role creates unique liabilities and responsibilities for each of these two functions. Appropriate customer and vendor screening is important to complete these functions. Warehouse Liability and Issues When a shipping fulfillment center receives customer products for storage and subsequent shipment, it is critical to understand what the products are, together with the creditworthiness of the fulfillment center’s customer. Product considerations may include: What products require a temperature-controlled environment? Do the products contain regulated materials that require special handling and storage? What is the packaging of these products when delivered to the fulfillment center warehouse? Additionally, assessing the customer’s creditworthiness upfront helps address accounts receivable issues and prevents scenarios where aging customer inventory occupies valuable rack space due to non-payment or bankruptcy. Each of these considerations is tied to some aspect of liability and whether the fulfillment center must take special steps to mitigate any such liability. This may include incorporating special charges for mitigation efforts into the service agreement with the customer. Packing and Shipping Concerns Similarly, the fulfillment center’s packing and shipping side must understand the customer’s desired packaging requests and shipping procedures. For example: Does the shipped product contain unique characteristics requiring special packaging materials? Are special freight charges likely to apply? Is the fulfillment center provided with the shipping materials, or is this item being sourced from a third party? Each of these factors will affect the workflow of the fulfillment center team. Pre-Contract Qualification of Customers With the above issues in mind, the fulfillment center must assess whether the customer is a good fit for their business or otherwise contract around any concerns or issues. This decision-making process (and subsequent contract negotiation) will help mitigate issues such as damage to other customer products, unforeseen expenses incurred to the fulfillment center’s detriment, delayed shipping issues, or rack space occupied by defunct customers. Implementing a comprehensive customer screening process will help drive better customer interactions and warehouse efficiency while ensuring that you engage with reliable and legitimate parties. Here is a structured approach that your warehouse can implement to evaluate potential customers: 1. Authorization to Do Business; Background Checks Documentation Check: Require potential customers to provide official business registration documents from the appropriate governmental body in their state (or, when dealing with international companies, their country of origin). This verifies their legal existence and is an easy way to confirm whether this customer sells legitimate products accepted by the market. Be cautious of any company unable to provide such documentation, as they may be either undercapitalized or operating as “fly-by-night” entities selling defective or non-compliant products until the market rejects them. Such companies are prone to leaving fulfillment centers with unpaid invoices and obsolete inventory occupying valuable fulfillment center rack space. Verification with Authorities: Cross-check the provided documents with relevant authorities or utilize online government databases specifically designed for business verification. Background Check: If the account is a significant size, consider a background check to ensure the company has a history of legitimate business operations and payment history. This can include checking for any legal issues or past bankruptcies. References: In addition to conducting background checks, consider requesting financial references from banks and other companies that have done business with the potential customer. This provides valuable insights into their financial integrity and payment track record. This is also an important step when negotiating contract terms because the fulfillment center can assert a security interest in the products being stored. Therefore, it is crucial to identify existing lienholders and assess whether they are considering legal action against the customer. 2. Proper Licensing Licensing Verification: Ask for copies of relevant licenses if the products use special materials that require specialized care. This same consideration should be given when hiring vendors to handle specialized products. This step is crucial for ensuring compliance with industry regulations and standards, as well as your applicable insurance policies. Compliance Checks: Conduct or request audits on compliance with industry-specific regulations and standards. This might include environmental, safety, and other operational standards relevant to the logistics sector. Implementing the Process Once you develop a screening and qualification process for customers, implementing that process into your daily workflows is essential. The best way to implement such screening is by creating a digital or paper-based checklist to be reviewed when accepting new customer inquiries. The process should also be continuous. Customers can change over time, so annual or bi-annual compliance and background checks can help proactively identify payment issues before they begin. Establish a structured procedure for periodic customer re-evaluation to ensure ongoing compliance with your standards. Lastly, be sure to maintain detailed records of all checks and verifications carried out. These records serve as vital documentation for audits, compliance checks, and resolving any potential disputes with the customer or third parties. Conclusion Implementing these measures will significantly reduce the risk associated with onboarding new customers. Warehouse space is critical for fulfillment center operations, and one of the quickest ways to endanger profits is to have this space occupied by delinquent customer accounts. Remember, the depth of the screening should be proportional to the potential risk and impact the customer might have on the fulfillment center’s business operations. For assistance implementing a customer screening process or addressing specific concerns in contracts, feel free to reach out to Mark Wendaur or Faith Miros.

April 2, 2024

Commercial Litigation

Five Things to Know About Hiring a Litigator

Did you get sued for the first time? Then you’ve got litigation on your hands. Litigation is just another word for a court case. Choosing an attorney to represent you in that litigation is tricky — and very important. Here are five things to know about hiring a litigator: 1. Hire Within Your Budget Most attorneys in the New York City area have higher billable rates. This is common across the country — legal services cost more in larger cities. But just because most attorneys have higher billable rates doesn’t mean you can’t afford high-quality representation. Make sure you know your attorney’s billable rate and ask about budgeting for your case. For example: What is your estimated budget for each stage of the case? What can we do to keep costs low in the case? Who will work on my case, and what is each person’s billable rate? 2. Experience vs. Titles Titles vary from firm to firm. What ultimately matters is the experience. An associate at a midsize firm might have more experience than someone who opened their own practice straight out of law school. On top of that, a midsize firm gives you the best of both worlds with experienced associates and significant resources at their disposal — but not at big law firm rates. 3. Seek a Clear Communicator Make sure your attorney tells you what the options are for your case — in detail and in language that you understand. Litigation is stressful, emotional, and expensive. If communication isn’t clear from the outset, it is likely to only add more stress, confusion, and frustration to your case — which may last for months or even years. Many attorneys have poor bedside manners. The term “legalese” exists for a reason. The law can be complex and dense — it’s your lawyer’s role to communicate to you clearly what’s happening. You shouldn’t feel talked down to. If your attorney is an effective communicator, you will receive updates about your case in clear and understandable language, confidently discuss each component of your case, and strategize together about how best to move forward. 4. Hire a Litigator, Not an Attorney Even though all attorneys are admitted to practice law, they’re not all the same. Litigation is a specialty. It requires being familiar with the court rules. More than that, it means having expertise in using the tools available to give you an edge in the case. Find a litigator who knows how to practice in the court your case is in. Even then, litigation is a wide-ranging area with many specialties. Make sure you ask about that attorney’s experience in your case’s area. For example: Have they worked on a case in this area before? What are some of the strategies that work well for this type of case? Do other attorneys in their firm have experience in this area? 5. Act Quickly As soon as a case starts, so do the deadlines. If you delay taking action for too long, the deadlines will pass, and your attorney will have to try to undo the damage by asking the court to give you another chance to make things right. All of this work is likely to result in additional costs and time. It is imperative to move quickly. Reach out to schedule a consultation right away so that you can best protect yourself.

April 2, 2024

Commercial Litigation

Protecting Your Business: Understanding ADA Website Accessibility Lawsuits in New York

Did you receive a complaint alleging that your company’s website violates New York’s equivalent of the Americans with Disabilities Act? Does the complaint allege the website violates New York State Human Rights Law and New York City Human Rights Law? By an individual claiming they tried to purchase goods on your website but could not do so due to accessibility issues? You are far from alone. Court dockets are ballooning in New York with these cases. With the right strategy, you can maximize your chances of greatly reducing the exposure you face and potentially securing the dismissal of the case without paying the other side a dime. Here are five things to know about your case: 1. Your Website Actually May Have Accessibility Issues There are many technical requirements for making your website accessible. It is important to work with a trusted vendor to bring your website into compliance, but that alone won’t cause the lawsuit to be dismissed. 2. Still, the Plaintiff Must Be Able to Prove the Impairment or Disability Even though your website may have been inaccessible to those with an impairment or disability, the plaintiff who sued you still must be able to prove that they are impaired or disabled. The phase of the lawsuit where you can dig into that proof is the discovery phase, and with the right strategy, you may be able to resolve the case during that phase and not have to proceed to trial. 3. A Fast-Paced, Active Approach Tends to Work Best The law firms that file these cases file a lot of them. Managing such a high volume of cases takes time and effort. With so many cases, their attorneys prefer to attack those cases where the other side is asleep at the wheel. Don’t show complacency. Instead, bring the fight to them and put them on their heels. 4. Don’t Expect Immediate Results Depending on which court your case is in, you may be facing a court with a lengthy process to bring your case to its close. The court may take its time to move your case along, and there are ways to nudge it to the next step. Maintaining that proactive approach is best, but be ready for the case to likely last a minimum of several months. 5. Be Ready to Negotiate Settlement talks can happen at any stage of the case. Don’t assume that the first offer you receive will be one you’re ready to take. Often, the attorneys for the other side are anxious to settle the case and will be open to significant negotiation. If you just received a complaint about your website, it is imperative that you act quickly. As soon as a lawsuit starts, so do the deadlines. You don’t want to miss a deadline—especially in this type of case where the other side is waiting for you to slip up. 

March 15, 2024

Family Law

Shareholder Agreements in Divorce: A Legal Perspective

Divorce proceedings can often involve complex financial negotiations, particularly when business interests are involved. When spouses who are shareholders in a company decide to part ways, it can raise a host of challenging issues regarding the disposition of shares, control of the business, and the future direction of the company. In such cases, understanding shareholder agreements becomes crucial, as they often dictate how shares can be transferred, sold, or retained in the event of a divorce. Shareholder agreements are legal documents that outline the rights and obligations of shareholders in a company. These agreements typically address a wide range of matters, including the transfer of shares, the appointment of directors, voting rights, and dispute resolution mechanisms. While shareholder agreements vary widely depending on the specific needs and circumstances of the shareholders and the company, they often contain provisions that address what happens in the event of a shareholder’s divorce. One common provision found in shareholder agreements is a buy-sell agreement, also known as a buyout agreement. A buy-sell agreement is a contractual arrangement between shareholders that governs the sale and purchase of shares under certain circumstances, such as death, disability, retirement, or divorce. In the context of divorce, a buy-sell agreement may specify that the shares owned by a divorcing shareholder must be sold to the remaining shareholders or to the company itself at a predetermined price or according to a specified valuation method. Another important consideration in the context of divorce is the issue of control and management of the business. In closely-held companies, where a small number of shareholders typically control the company, the transfer of shares as a result of divorce can have significant implications for corporate governance. Shareholder agreements often include provisions that address voting rights and the composition of the board of directors, which can become relevant in the event of a divorce. In some cases, spouses may be parties to a shareholder agreement together or may have entered into a separate agreement that governs their ownership interests in the company. In either scenario, the terms of the shareholder agreement will play a central role in determining how shares are treated in the divorce process. For example, if the shareholder agreement contains provisions restricting the transfer of shares or giving other shareholders a right of first refusal, those provisions will generally need to be respected in the divorce proceedings. However, it’s important to note that while shareholder agreements can provide valuable guidance and structure in the event of a divorce, they are not necessarily binding on the court. In some jurisdictions, the court does not have the authority to transfer title of shares from one spouse to another.  However, if the parties enter into an agreement to transfer shares from one spouse to the other, the shareholder agreement becomes the governing instrument on effectuating the transfer. Ultimately, navigating shareholder agreements in the context of divorce requires careful attention to both the terms of the agreement itself and the applicable family law.  Consulting with experienced legal counsel who can provide guidance on both corporate and family law issues can be essential in ensuring that the interests of all parties are protected and that the divorce process proceeds as smoothly as possible. By understanding the implications of shareholder agreements and how they intersect with divorce law, shareholders can better position themselves to protect their interests and preserve the value of their investments in the company.

March 14, 2024

Construction

A Primer on Preliminary Notice of Mechanics' Liens

Most contractors, subcontractors, and suppliers know that lien claims have strict deadlines, typically measured from the last date of work. But did you know that some states also require preliminary notice of lien rights upfront, at the first time of furnishing labor or materials? In 2017, Pennsylvania created an online registry known as the Construction Notices Directory that allows owners to register private projects that exceed $1.5 million. If a project is registered, all subcontractors and suppliers must file a Notice of Furnishing within 45 days of first providing labor or materials to the project; otherwise, the lien right will be lost. Recently, more owners have been registering projects. Thus, prompting the questions: Do other states have similar early notice requirements for preserving lien claims? And what steps should be taken in Pennsylvania when dealing with the Directory? Other States' Lien Claim Process and Notice Requirements Pennsylvania’s requirement for a preliminary notice at the start of work (only when a project is registered on the Directory) is atypical in the Mid-Atlantic. Neither Maryland, Delaware, the District of Columbia, nor New Jersey require any similar preliminary notice at the start of work. The only other Mid-Atlantic state with a similar requirement is Virginia, which requires a preliminary notice to be issued within 30 days of commencing work on a one- or two-family residential dwelling if the owner has identified a Mechanics’ Lien Agent in the building permit. Preliminary notices at the commencement of work are more prevalent in other regions of the country; for example, California requires a preliminary notice to be issued within 20 days of first furnishing labor or material to the project. The point is that while preliminary notice requirements are atypical in the Mid-Atlantic, they are required in other parts of the country. It has become more popular for owners to utilize the Pennsylvania Construction Notices Directory. Thus, it is best to stay current on preliminary notice requirements if working in multiple jurisdictions. Practical Tips for Handling Pennsylvania's Construction Notices Directory If a prime contractor works directly with the owner, recognize that it is ultimately the owner’s choice on whether to register the project. If the owner elects to register the project, a Notice of Commencement is filed on the Directory, and that document should become part of the Contract Documents. The best practice is to also identify in the special conditions of the contract the Directory listing. The Notice of Commencement must be posted at the project site. Additionally, statutorily mandated language must be included in all contracts that provide notice that a failure to file a Notice of Furnishing will result in a waiver of the lien claim. The notice of furnishing is only required to be filed by subcontractors and suppliers. For subcontractors, closely review the Contract Documents to identify any indication of the project being registered. It is also recommended to include in internal standard processes that the Directory be searched at the time of signing the subcontract and also at the time of commencing work. The Notice of Furnishing can be filed prior to starting work; thus, there is no need to wait or delay in properly filing the document. Properly noticing mechanics’ lien claims and preserving rights can be a complicated area of construction law. The best practice is to have sound internal protocols and trusted counsel for troubleshooting. Offit Kurman construction attorneys are available to advise and counsel contractors, construction managers, design-builders, design professionals, subcontractors, developers, and design professionals on construction contracts, risk, and project disputes.

March 14, 2024

Immigration Law

Unlocking Opportunities: Navigating National Interest Waivers (NIW) for STEM Professionals

As we explore the maze of U.S. immigration law, we come across a provision that makes it easier to bring exceptional professionals with special skills to the U.S. Through this provision, the National Interest Waiver (or NIW), individuals may be able to secure permanent more easily and faster than the traditional labor certification process for those in STEM fields (Science, Technology, Engineering, Mathematics), this provision may be the perfect fit. What is a National Interest Waiver? The National Interest Waiver is a unique provision within the U.S. employment-based immigration system, offering a streamlined route to permanent residency for individuals who can demonstrate their work's national importance. This waiver enables eligible applicants, including STEM degree holders, to bypass the labor certification process and job offer requirements. STEM Professionals and National Interest Waivers: Why should STEM degree-holders pursue the NIW? STEM degree holders are particularly well-positioned to benefit from the National Interest Waiver due to the inherent value of their contributions to the U.S. economy and society. Here's how STEM professionals can leverage the NIW: In-Demand Skills: STEM fields are consistently identified as high-priority areas by the U.S. government due to the demand for skills that drive technological innovation, research, and development. National Economic Growth: STEM professionals often contribute directly to economic growth by advancing cutting-edge research, developing new technologies, and fostering innovation, all of which align with the national interest. Job Flexibility: The NIW offers STEM professionals greater flexibility in their career choices, as it eliminates the need for a specific job offer from a U.S. employer. This flexibility allows individuals to pursue opportunities that align with their expertise and passion. Expedited Permanent Residency: With the NIW, STEM professionals can benefit from an expedited path to permanent residency, bypassing the lengthy labor certification process that is typically required for employment-based green cards. How to Qualify While the benefits are clear, it's essential for STEM professionals seeking a National Interest Waiver to meet specific criteria, including showcasing exceptional abilities or skills, demonstrating the potential to benefit the nation, and establishing the national interest in waiving the job offer and labor certification requirements. Applicants must hold a U.S. advanced degree (or foreign equivalent) followed by five years of professional experience. Those demonstrating exceptional ability must demonstrate that they have ten years of professional experience. Exploring the Specific Criteria for National Interest Waivers The National Interest Waiver (NIW) serves as a valuable pathway for individuals with exceptional abilities or skills, including STEM professionals, to obtain permanent residency in the United States. To qualify for an NIW, applicants must satisfy specific criteria established by the U.S. Citizenship and Immigration Services (USCIS). Let's dive into the details of these criteria: Exceptional Abilities or Skills: NIW applicants must demonstrate extraordinary abilities or skills in their respective fields. This can be evidenced through a combination of factors, including: Recognition and Awards: Receipt of major awards or prizes in the field. Publications: Authorship of scholarly articles, publications, or books in esteemed journals or platforms. Patents: Ownership or co-ownership of patents in the field. Significant Contributions: Evidence of significant contributions to the field, such as groundbreaking research or innovations. Critical Impact on the Field: Applicants must showcase the significance of their work and its impact on advancing the field. This can be demonstrated through:Citations and References: High citation counts and references to the applicant's work by peers and experts in the field. Research Collaborations: Participation in collaborative research projects with prominent institutions or researchers. Technical Contributions: Development of technologies, methodologies, or solutions that have had a substantial impact on the field. National Interest: The heart of the NIW application lies in demonstrating the national interest served by waiving the job offer and labor certification requirements. This involves:Economic Impact: Showing how the applicant's work directly contributes to economic growth, job creation, or competitiveness in critical sectors of the U.S. economy. Healthcare Advancements: Demonstrating contributions to healthcare innovations, treatments, or technologies that benefit the nation's public health. Environmental Sustainability: Highlighting efforts to address environmental challenges or promote sustainability practices that align with national priorities. National Security: Illustrating contributions to national security through research, technological advancements, or expertise in strategic areas. Comparative Assessment: Applicants must provide evidence that their contributions are unique and cannot be easily replicated by U.S. workers. This may include:Expert Testimonials: Letters of support from experts in the field affirming the applicant's exceptional abilities and the importance of their work, as well as documentation of at least ten years of full-time experience in the occupation. Market Demand: Demonstrating demand for the applicant's specialized skills or expertise in the U.S. job market. Navigating Education Requirements for National Interest Waivers In addition to showcasing exceptional abilities or skills and making significant contributions to their field, applicants for the National Interest Waiver (NIW) must meet specific education requirements as mandated by the U.S. Citizenship and Immigration Services (USCIS). Here's a detailed breakdown of the specific educational criteria for NIW eligibility: Advanced Degree or Equivalent: To qualify for an NIW, applicants are typically required to hold an advanced degree or its equivalent in a relevant field. This includes: Bachelor’s Degree or Master's Degree: Many NIW applicants possess a master's degree or higher in a field such as science, technology, engineering, mathematics (STEM), or a related discipline. A master's degree demonstrates a high level of expertise and specialization in the applicant's area of focus. Doctoral Degree (Ph.D.): Applicants with a doctoral degree, such as a Ph.D., are particularly well-suited for NIW eligibility due to the depth of knowledge and expertise gained through advanced research and academic study. Professional Degree: In some cases, applicants with professional degrees, such as a Doctor of Medicine (M.D.) or Doctor of Jurisprudence (J.D.), may also be eligible for an NIW if their work significantly benefits the nation and aligns with the national interest criteria. Field of Specialization: The applicant's advanced degree must be directly relevant to their area of expertise and the work they intend to pursue in the United States. USCIS evaluates whether the applicant's educational background aligns with the national interest served by waiving the job offer and labor certification requirements. Equivalency Evaluation (if applicable): For applicants educated outside the United States or with degrees from non-U.S. institutions, USCIS may require an equivalency evaluation to determine the degree's comparability to a U.S. degree. This evaluation ensures that the applicant's education meets the necessary standards for NIW eligibility and demonstrates the required level of academic achievement. Demonstrated Impact of Education: NIW applicants must provide evidence of how their advanced education and academic achievements have contributed to their exceptional abilities or skills and their potential to benefit the nation. This may include:Research and Publications: Highlighting academic research, publications, or thesis work that showcases the applicant's expertise and contributions to the field. Advanced Training or Specialization: Demonstrating advanced training, specialized coursework, or academic achievements that have enhanced the applicant's skills and knowledge in their area of specialization. Academic Awards or Honors: Providing evidence of academic awards, honors, or scholarships received in recognition of the applicant's educational achievements and contributions to the field. The National Interest Waiver (NIW) does not just expedite the immigration process of persons of extraordinary ability but also acknowledges that professionals in science, technology, engineering, and mathematics (STEM) are significant contributors to America’s future. In this era of innovation and technological advancement, the NIW becomes a means through which holders of STEM degrees can add value to the country while still being able to seek permanent residency. In an effort to influence their careers in the U.S. permanently, the National Interest Waiver (NIW) offers STEM professionals a chance to navigate through immigration intricacies with dexterity and intentionality.

March 13, 2024