Category: News

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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Recent Developments in the Law

Arbitration Clauses Are Voided.

In a series of recent cases, California and federal courts have weakened the presumption in favor of arbitration. As we noted in an accompanying article, arbitration has, for some years, been favored by courts and agreements to arbitrate strictly enforced. Many companies, following what we consider to be bad legal advice, have insisted on arbitration clauses in their various contracts on the mistaken idea that arbitration is quicker and cheaper than litigation. Companies have also often favored arbitration for the unstated reason that they believe arbitrators will favor companies they believe may send them more business and people with less influence will have less success before them, thus providing corporations a leg up in any dispute.

California and federal courts, recognizing this unstated and less than honorable truth, have, over the last several years, chipped away at the presumption of the enforceability of arbitration agreements, particularly with regard to consumers, employees and companies with little bargaining power in contract.

So, for example, an arbitration clause in a contract for an “extreme vacation” that involved mountain climbing, was found to be unenforceable because it was presented on a “take it or leave it basis” to the traveler and limited the damages to a refund of the money paid for the trip. As a result, his survivors were allowed to proceed in court with their claims. (Lhotka v. Geographic Expeditions, Inc.)
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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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Bold Plan Seeks to Wrest Control of Federal Land

New York Times By Keith Schneider – April 8, 1995

When it comes to outsiders, especially those wearing military uniforms and suits, the ranching and logging families of Otero County have always been a little suspicious.

But one newcomer, a Los Angeles lawyer whose monogrammed white shirts and splashy ties contrast with his clients’ dusty boots and jeans, has become something of a hero.
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1st Amendment Rights Coming Back On Campus

Investor’s Business Daily – May 16, 1994

At Occidental College in Los Angeles, “unwelcome jokes, invitations, comments and looks” no longer put a student at risk of suspension or expul­sion.

For John Howard, counsel and founder of a new Los Angeles-based nonprofit group, the Individual Rights Foundation, the mystery is that they ever did.

Howard, through IRF, last year persuaded the college not to expel fraternity Alpha Tau Omega for pub­lishing a ribald limerick in its newslet­ter.

That case is among some two dozen similar pro bono suits he has filed on behalf of students facing punishment by colleges and universities for crimes of expression.

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Campus Speech Wars: Waving the Tacky Shirt

Insight Article By Richard Miniter January 24, 1994

Summary: In the mid-1980s, collegians suddenly had to worry about being “politically correct:’ Since then, this ideal has wrapped its tentacles around campus debate, smothering free speech in the name of sensitivity. Now someone’s fighting back.

In 1991, Rep. Henry Hyde, an Il­linois Republican, sponsored leg­islation that would have made it easier for students at both public and private colleges to sue over First Amendment issues. The bill was in­tended to help students who felt their right to free speech had been stifled by “PC” crusaders – liberal activists who have managed to make “political correctness” the most pressing issue on American campuses. But Hyde could find only 25 cosponsors and the bill languished. The “PC backlash” went nowhere.
Indeed, since the PC wars began in the mid-1980s with skirmishes on the canon – should Plato or Sappho be required reading – college ad­ministrators have become hypersen­sitive to the needs of women and mi­norities. Perhaps as a consequence, arguments over what should be taught in the classroom have given way to acrimonious debate on civility – how to make students get along on campus.
Pressured by vocal groups espous­ing multiculturalism, both public and private universities have adopted speech codes directed at students and faculty. Intended at first to cur­tail incidents of “hate speech;’ usu­ally racial slurs, such codes have been extended to regulate all aspects of campus life – students have been asked to remove Confederate flags from their dorm rooms and forbidden from talking with outside journalists without permission.
Howard takes on speech codes.

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Sombrero Scrap

The Washington Post by Nat Hentoff January 1, 1994

At the Riverside campus of the University of California, a fraternity recently created and distributed a T-shirt that has unexpectedly made First Amendment history.

On the shirt is a drawing of a man watching the sunset. He is wearing a serape and a sombrero and holds a bottle. Also shown is a bare-chested man with a six-pack of beer in one hand and a bottle ·in the other. At the front of the drawing is a bar, Papas & Beer, much frequented by America.n college students crossing the border.

An inscription circling the drawing was taken from an anti-racist song by Bob Marley: “It doesn’t matter where you come from, as long as you know where you are going.”

Demanding that the fraternity, Phi Kappa Sigma, be punished was MEChA (the Movimienlo Estudiantil Chicano de Azllan). A spokesman charged that the shirt “dehumanizes- and promotes racist views of-Mexican people.” Not only was the shirt impermissibly offensive but, said MEChA, it was the very model of “fighting words” under the university’s code of community values because it could provoke’ violent reaction.
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