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In the News: Attorney Stephen E. Imm joins Businesswise on WVXU to discuss Labor and Employment Law issues

Author By Stephen E. ImmPosted on
Attorney Stephen E. Imm

Our firm has long enjoyed a fruitful relationship with Tom Cooney and Crystal Faulkner at Mountjoy Chilton Medley, accountants in Cincinnati.  Tom and Crystal are husband and wife and  also hosts of a weekly radio program on 91.7 radio, WVXU aimed at helping business owners smartly and safely grow their business — Businesswise.

Finney Law Firm attorney Stephen E. Imm is to be featured on the program next week, and we encourage you to listen in.  He will be discussing Ohio labor and employment law issues, from the perspective of an employer.  The show times are Monday the 5th and Tuesday the 6th at 7:30 AM.

Also, plan on making Businesswise a part of your weekly listening to sharpen your business knowledge.  Thanks to Tom and Crystal for continuing to make us a part of their business lives!

 

 

Commercial leases: Here’s a valuable tenant tip: Ask for an early termination option

Author By Christopher P. FinneyPosted on

In commercial tenant space, whether office, warehouse, manufacturing or retail, landlords typically want three-, five- or seven-year lease terms.  And this is reasonable given the cost of tenant build-out, Realtor commissions and the demands of their mortgage lenders.  It also is relatively standard in the marketplace.

However, a tenant will rightfully reason that they can’t anticipate their space needs for a year much less over a seven-year period of time.  The company might need to relocate, be bought out or go out of business,  the principal could die or become disabled, or the tenant’s business model could change substantially.

One concession I recommend that tenants request in a commercial lease is an early-termination option.  By having the right to walk away from a lease, it gives enormous flexibility and power to a tenant.  Recently, a landlord explained to me that he is glad to offer this tenant concession.

Typically, a termination option is not free.  Here are typical issues a landlord will want to discuss:

  • The lease termination option might not kick in until some period into the lease, say after the first year.
  • The landlord will want generous advance notice provisions, say three to six months to allow him to advertise and market the premises for re-letting to a new tenant.
  • An early termination fee of anywhere from three months to one year of base rent and CAM charges.
  • A reimbursement of Realtor fees paid (many times paid up front, but calculated on the entire lease term value).
  • A reimbursement of tenant improvement costs.

So often I am consulted after the fact by a tenant who wants “out” of their lease on a document we were not asked to help negotiate, and the tenant is in a real spot.  Sometimes in that circumstance the landlord is digging in his heels wanting the full rent and CAM amounts for the entire lease period — and they may well be entitled to that.

But if only the tenant had asked for this simple concession on the front end — when he had negotiating power — his life would be simpler and his finances richer.

__________

If you want to speak with our commercial leasing attorneys, ask for Issac T. Heintz, Eli N. Krafte-Jacobs or Christopher P. Finney.

Public lnterest law: Cincinnati Enquirer sues to open “Lois Lerner” confidentiality hearing before Judge Michael Barrett

Author By Christopher P. FinneyPosted on

On Friday, the Cincinnati Enquirer and USA Today wrote about our case, NorCal Tea Party v. IRS, the only nationally-certified class action challenging the IRS’ and Lois Lerner’s targeting of Tea Party groups for extraordinary review in their non-profit applications.

The new development in that long-running case is that Lois Lerner and her chief lieutenant, Holly Paz, seek to have their deposition testimony sealed, and indeed all pleadings relating to the sealing sealed as well. (You will remember that Lois Lerner pled the 5th before Congress and refused to testify about the scandal, and her role therein.) Indeed, Judge Barrett has ordered a sealed hearing on those motions for this Friday.  You may read all about that here.

Well, today, the Gannett GP Media, Inc., the parent company of USA Today and the Cincinnati Enquirer, filed a motion to intervene in the case for the purpose of forcing open the pleadings, the deposition transcripts and the hearing.

Read about that here.

The Enquirer’s Motion is here and their tendered Memorandum in Opposition to the Lerner/Paz motions is here.

In our firm’s relentless pursuit of public interest law, we consider this issue, and this case, to be among the most consequential matters we have addressed.

Ohio employment law: Can Sexual Harassment be Committed by Non-employees?

Author By Stephen E. ImmPosted on
Unless you’ve been living under a rock for the last 30 years (in which case you probably aren’t reading my blog posts anyway), you know that “sexual harassment” is illegal in the workplace. What that means to most people is that employers have to make sure their employees do not commit sexual harassment against one another, and have to stop it when they find out it is occurring or has occurred.
 
What many employers and employees don’t know is that employers can be held liable for the harassment of their employees by people who are not employees of the company at all. This includes people like vendors, customers, and contractors who may visit the workplace, or who otherwise might have contact with employees.
 
Employees may be “harassed” by these categories of people just as easily as by fellow employees. The harassment may take place in person, by phone, or over email or text messages. It may occur on the employer’s premises or off. And employers are just as much at risk for liability in these situations as they are in the (more common) situation of a co-worker or supervisor harassing an employee.
 
The way to look at this is that the employer’s obligation is to protect its employees from illegal harassment whenever and wherever they are working – not just when they are on the employer’s property, and not just when they are around their co-workers.
 
Smart employers will have clear and effective sexual harassment policies that inform employees how to report any harassment they experience, regardless of where it occurs or from whom. All the same principles apply to non-employee harassment that apply to co-worker harassment. The employer has the same duty to provide a clear reporting procedure, to investigate reports of harassment promptly, and to take effective remedial action where warranted. In the case of harassment by an outside party, this may mean terminating your relationship with that party, or barring certain representatives of a vendor or customer from having contact with the harassed employee, or from visiting your place of employment.
 
If you believe you have experienced sexual harassment in your employment from someone who is not a co-worker, or if you are an employer wanting to make sure you and your employees are appropriately protected, be sure to contact competent legal counsel right away.

 

Ohio real estate law: A slip between closing and recording? It does happen.

Author By Christopher P. FinneyPosted on

As attorneys, especially in a smaller city like Cincinnati, we can be tempted to trust one another, especially experienced real estate practitioners as to the timing of recording of instruments.  But that trust can be misplaced, as many times between the “closing” and “recording” things go awry.

Roundtable closings

In Ohio, particularly southwest Ohio and for residential properties, round-table closings are common.  For clients from other parts of the country, this can seem like a quaint (and legally dangerous) custom.

The buyer, seller, lender, and Realtors all gather in a room with a title agent to sign and exchange documents and funds.  This ceremony is a “closing” and there occurs the formal payment of the purchase price, funding of the loan and the delivery of the deed.

Escrowed closings

This can differ from closings more common in other parts of the country where the seller places in escrow the deed, the buyer places in escrow the note and mortgage and the lender and buyer pay the sums to the escrow agent.  (Escrowed closings are not unheard of in the Cincinnati marketplace, especially for commercial transaction or corporate executives whose schedule will not allow them to attend a closing in person.)

In this setting, the title agent holds both the escrowed funds from the buyer and the lender, and the deed and mortgage for recording.  Then, he records the instruments and checks the title to assure that “all is clear” before disbursing funds.

The “gap”

Thus, with an escrowed closing, there is no “gap” between funding the recording.  The funds are not released until after recording and title updating showing no intervening liens or deeds.

However, with a roundtable closing, the funds are released to the seller at the closing table, and the deed and mortgage may not be recorded for hours or days.  In the meantime, in theory if not in practice, a deed, easement, mortgage or involuntary lien (such as a tax lien, a judgment lien or a mechanics lien) could be recorded against the real estate.

Since Ohio is a largely race/notice state as to the order of recordation of instruments (whoever records first without actual notice of someone else’s interest in the property “wins” the contest for priority), the later-recorded deed or mortgage would lose priority to an instrument intervening beforehand.

This is a large potential risk in terms of losing value for the buyer or lender.  The total value of the real estate can be lost as a result of such a priority issue.

This timeframe between closing (or the last title update) and the recordation of the title instruments is known in the real estate industry as the “gap.”

Insuring the gap

So, the issue for a buyer should be: Who is taking the risk for the gap?  It goes without saying that a seller delivering a warranty deed is promising to deliver good title to the buyer.  But what if the seller is a crook, bankrupt, deceased or simply un-findable after the closing?

Well, (a) if a buyer purchases an owner’s policy of title insurance, (b) specifically requests that the title company insure the “gap,” and (c) that “gap” coverage is issued at the closing table, then the buyer will be protected from losses from an intervening instrument.  If all three circumstance are not present, then the buyer is going to bear this risk and have claims solely against the seller for breach of warranty covenants.

Real-life experience

We recently were approached by a buyer from a round-table closing on a residential property.  It took the title agent six days after the closing to record the deed.  In the intervening timeframe, the seller gave a deed to a second buyer.  (Sure, this was entirely fraudulent conduct by the seller, but nothing should surprise us anymore.)  That second buyer’s deed went on before the deed of the first buyer.  The first buyer even purchased an owner’s policy of title insurance, meaning at the closing he obtained a “commitment” for a title insurance policy.  But that commitment did not contain “gap” coverage language, rather the policy was conditioned upon the instruments being recorded without loss of priority.

Conclusion

That particular matter is still in litigation, but, win or lose, this story highlights the grave risk of closing a transaction by roundtable closing, and failing to ask for and obtain affirmative “gap” coverage. This admonition applies equally in residential and commercial transactions.

Finally, this ties in with our earlier admonitions: (a) buy title insurance (Why title insurance?) and (b) Don’t just buy a title insurance policy; read the policy, on our Ivy Pointe Title blog.  While it would be nice to tell clients that protecting their interest is as simple as buying an owner’s policy of title insurance, it is not.  The buyer must read and understand the exceptions to coverage and also ask for “gap” coverage.  Otherwise, he retains significant risks of partial or total title failure.

 

Ohio employment law: Today’s NYT writes about non-compete agreements

Author By Christopher P. FinneyPosted on

The need for non-compete agreements certainly looks different from the perspective of being an employee versus being an employer, but no one can doubt both the recent proliferation of and significant career impacts of non-compete agreements.

Today’s New York Times offers an important and detailed perspective on the decision to sign such documents.  Read it here: Signing Away the Right to a New Job

Think carefully about signing such documents.

Finney Law Firm attorney Stephen E. Imm practices extensively in the area of both enforcing and defeating non-compete covenants and writes here about the law in Ohio relating to their enforcement: Non-Compete Agreements: Are they enforceable in Ohio?

Let us know how we can help with your labor or employment issue.

Ohio real estate law: Treble damages available for “recklessly” damaging another’s trees or other vegetation

Author By Christopher P. FinneyPosted on

A powerful statute exists in Ohio for damage to trees and vegetation on the property of another.

Indeed, while one commonly would think that such a litigation tool would only be available to those injuring trees, the statute broadly covers damage to a “vine, bush, shrub, sapling, tree, or crop.”

Revised Code Section 901.51 provides, very simply:

No person, without privilege to do so, shall recklessly cut down, destroy, girdle, or otherwise injure a vine, bush, shrub, sapling, tree, or crop standing or growing on the land of another or upon public land.

In addition to the penalty provided in section 901.99 of the Revised Code, whoever violates this section is liable in treble damages for the injury caused.

Thus, any “reckless” damage to another’s vegetation of virtually any type or size can result in damages three times the value of the property damaged.

The referenced Revised Code Section 901.99 then also places criminal penalties for so damaging the vegetation on the property of another, making it a a misdemeanor of the fourth degree.

 

Ohio employment law: Are Arbitration Agreements Good for Employers and Bad for Employees?

Author By Stephen E. ImmPosted on

In the last 20 years or so, it has become more and more common for employers to require employees to enter into arbitration agreements. These are documents or policies that are designed to protect employers from having to defend lawsuits in court. They provide that if any legal disputes arise between the employer and the employee, before or after the employment relationship ends, they will be submitted to an arbitrator for decision, instead of to a judge or jury.

Employers have tended to favor these agreements for several reasons. First, the idea is that arbitration takes less time and is more streamlined than a court case, and therefore costs much less in attorney fees. Secondly, it is generally believed that arbitrators are likely to me more “employer friendly” than juries. Thirdly, there is believed to be less chance of a really “eye popping” damage award from an arbitrator than from a jury.

There is some validity to each of these considerations. And employee advocates have resisted arbitration agreements where they can, primarily because they prefer that their employee clients receive jury trials, and they view juries as more sympathetic to employee rights. There is some truth to this.

Employers should be aware that, In order for an arbitration agreement to be enforceable, it has to meet certain requirements:

1.  It has to really be an “agreement.” In other words, it should be a written document signed by the employee. Merely having an arbitration “policy” that the employee does not formally agree to may be unenforceable.

2.  It must allow the employee to recover the same remedies available at law. An agreement that limits the employee’s recovery, such as by prohibiting certain types of damages, may not be enforced.

3.  It can’t make it too expensive for the employee to pursue arbitration. If the costs of arbitrating are far more expensive to the employee than the filing fees charged by a court, a court is less likely to enforce the agreement.

This last point has caused some employers to re-think the wisdom of requiring employees to sign arbitration agreements. The cost of paying an arbitrator for his or her service can be a five-figure expense. If the employer has to bear that expense alone – as it may have to do in order for its arbitration agreement to be enforceable – suddenly arbitration may not seem like a much less expensive alternative to a court proceeding.

Additionally, many sets of arbitration rules that apply in employment cases – such as those of the American Arbitration Association – have expanded the “discovery” (depositions, interrogations, etc.) permitted before an arbitration hearing. This is designed to make sure the employee has a fair opportunity to develop evidence to support his or her case, but it also makes the process longer and more expensive – again, more like a court proceeding.

Whether you are an employer or an employee, if you have questions about whether arbitration agreements are a good idea, or about whether a particular agreement is enforceable, please give us a call.

Appellate advocacy: Some wisdom from a former U.S. Solicitor General

Author By Christopher P. FinneyPosted on
Robert H. Jackson, the only man to serve in all three roles as U.S. Attorney General, U.S. Solicitor General, and U.S. Supreme Court Justice

The Solicitor General of the United States is the attorney for the government who presents briefs and oral arguments before the U.S. Supreme Court.  The person who holds this position, thus, makes more frequent — and more important — appellate arguments than just about anyone.

Often, the U.S. Solicitor General is later appointed to the United States Supreme Court, the earlier job being both a proving ground for that important position, and a place from which the holder can become known to the President of the United States, who makes such appointments.

Thus, I got a chuckle out of this quote from former Solicitor General Robert H. Jackson, who himself was appointed to the U.S. Supreme Court by President President Theodore Roosevelt.  (As a side historical note, Jackson is the only man to have held all three jobs as U.S. Attorney General, U.S. Solicitor General and Supreme Court Justice.)

“I used to say that, as Solicitor General, I made three arguments of every case. First came the one that I planned–as I thought, logical, coherent, complete. Second was the one actually presented–interrupted, incoherent, disjointed, disappointing. The third was the utterly devastating argument that I thought of after going to bed that night.”

This is, of course, precisely what appellate advocacy is like.

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