Category: Articles

Just When You Thought You Were Safe

Hiring can be a grueling business, especially when you are looking for higher level or more skilled employees.  You review resumes.  You call references.  You Google applicants.  You conduct endless interviews.

Finally, you find just the right person.  Time to relax.  In the interests of space, throw away the resumes of those you didn’t hire. Get rid of your interview notes.  What do you need them for?

Wrong answer.

Just when you thought plaintiff’s lawyers could not come up with any more creative ways to lighten your wallet, along comes a particularly imaginative one who claims that you discriminated against one of the applicants you did not hire and he wants money.  Have to make a buck somehow. If the job doesn’t work out, sue the company that didn’t hire you.  Nice work if you can get it.
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The Best Defense

A company’s best defense against employee claims is a statement of firm and clearly articulated standards and rules.  Most businesspeople know that a good part of customer relations is the management of expectations.  The same is true of employee relations.  That is why it is critical that companies prepare, distribute and regularly update employee handbooks.  They are your best defense against employee claims.

Employee Handbook

California is an “at will” employment state which means that companies can terminate an employee’s employment for no reason.  Why, then, do we read of wrongful terminations lawsuits that end up in large judgments?  They arise, generally, because the company has not managed the employee’s expectations and has not taken the time emphasize the employee’s at will status. Such lawsuits can be maintained if the company has, by word and deed, led the employee to believe his employment is permanent and that he could rely on having a continuing, and long, career with the company.  (They can also arise when the employee is the beneficiary of an employment contract, but such contracts are typically extended only to top executives, so we need not address them here.)

Employee handbooks have been found by courts to be contracts between employer and employee and, as such, should spell out all of the terms of employment, such as vacation schedules and accruals, employee duties and rights, employee use of company equipment, hours, benefits and a host of rules that set forth the expectations on both sides.  It should specifically state that it is a contract and emphasize that employment is “at will”. The existence of a handbook will be very important if your company is ever the target of a claim by an employee.
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Freedom is Alway Right

Are we destined to rehash the same debates over and over? On winning the senate primary, Rand Paul walked off the stage and directly into his mouth, igniting a firestorm when he suggested that the Civil Rights Act of 1964 is unconstitutional and that he would not have supported it. Let’s put aside the fact that his reaction was the result of a cheap setup on the part of a radical leftist masquerading as a journalist. Let’s also put aside the boneheadedness of Paul’s staff’s having sent him right out of the box into the lion’s den. That, I take it, was simply the hubris of those who know they are a lot smarter than everyone else. Underestimating Rachel Maddow is a sure way to get shredded. And Paul was. We can even put aside the tone deafness of Paul’s reaction but what he did show is why you should never take legal advice from a doctor.

But what of his position on this issue? The Civil Rights Act of 1964 followed the Civil Rights Acts of 1957 and 1960, each more expansive than the last. With the exception of southern Democrats, conservatives, in general, supported all three of the acts, Barry Goldwater’s having voted for both the 1957 and 1960 versions. He supported most of the Act of 1964, as well. His opposition was to Sections II and VII, those having to do with public accommodations and employment.

His opposition was principled. It was not a reflection of racism. It was based on his view that the Constitution did not allow for federal micromanagement of interpersonal relations and private businesses. His was a strongly federalist view based on a firm understanding of and commitment to the Tenth Amendment, which reserves to the states all powers not specifically granted to the federal government by the Constitution. It was a correct view of the original constitutional paradigm that gave substantial autonomy to the states and recognized that state government is the primary seat of sovereignty in our constitutional federal system. It was also a correct view of constitutional limitations on federal power and the exclusive power of states to regulate internal state businesses. It is certainly an arguable position based on the state of Commerce Clause jurisprudence and one currently advanced with credibility by conservative lawyers and legal scholars.

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Litigation is among the most persistent problems in modern business. It is expensive and soul sapping. It diverts precious time and attention from profit making work to activities that merely drain resources. Sometimes it cannot be avoided. Sometimes companies get sued and have to defend themselves. Sometimes they fall victim to bad or dishonest business practices and must file suit to get whole.

When that happens, you need experienced litigators who have actually tried cases and are comfortable with going to trial. You need skilled strategists who can guide you through the system efficiently and successfully.

Recent years, though, have seen the creation and growth of alternatives to costly litigation. Hundreds of thousands of cases have been successfully resolved through mediation. It is a good system that enables people in dispute to find a negotiated settlement that saves them the cost and risks of litigation through trial. It is a tremendous business tool and it is important that you understand how it works, what it is intended to accomplish, its benefits and its limitations.

Mediation (sometimes called “alternative dispute resolution”) is often confused with arbitration. The two actually have little in common. Arbitration is simply litigation by other means without the protections that are built into the court process. It involves the development and presentation of evidence. It involves hearings, briefs and arguments of law. It requires something akin to a trial and, in the end, an arbitrator makes a decision. One side wins and the other loses.
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Do You Need In-House Counsel?

The law is mysterious, even to the most sophisticated CEO’s. It is sometimes illogical. It is often frustrating. It is always expensive.

When a company reaches a certain size, sooner or later the CEO is going to consider whether or not hiring an in-house lawyer makes sense. Sometimes it is prompted by concerns over the cost of outside legal service. More often it is triggered by frustration at artificial limitations imposed by law and the unpredictability of the legal system. Companies sometimes fall victim to frivolous lawsuits, suffering the apprehension of the threat they represent. This is compounded by the expense of having to defend when they should not have to. The company’s officers do not understand why it is so difficult to get rid of what is so obviously wrong as the ongoing expense continues to eat into the bottom line.
At some point, frustration at the law intersects with frustration at the cost of lawyers. That is when companies begin to wonder if they can get more personalized legal service at the same cost and start to think it might be a good idea to hire in house counsel.

These are the factors that often drive the decision to hire in-house counsel.
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In Full Howl

Last week, the Supreme Court eloquently reaffirmed the continuing vitality of the First Amendment. In doing so, it confirmed again our commitment to freedom of speech and the free exchange of ideas as the critical engine of American liberty.

In its opinion, the Court wrote:
“The First Amendment underwrites the freedom to experiment and to create in the realm of thought and speech.”
“The civic discourse belongs to the people, and the Government may not prescribe the means used to conduct it.”
“The First Amendment confirms the freedom to think for ourselves.”
“If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens for simply engaging in political speech.”
One might have thought such ideas quite uncontroversial.

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