Posted by Nissenbaum Law Group at 11:08 AM in Consumer Protection Law | Permalink | Comments (0) | TrackBack (0)
Intellectual Property: Trademark Rights: We have previously discussed the fact that the mere registration of a business with the State, or the registration of the business name with the State is insufficient to insulate business owners from individual liability. However, the other common misconception about these filings is that they protect the business name that is registered. It is critical that business owners understand the limitations of the protection that is offered by State registrations.
In New Jersey, registration of a corporate entity will protect that entity’s precise name from being registered by another company in New Jersey. There are a few important things to note here. First, it does not prevent another company from registering that name in another state. Second, it does not prevent another company from making minor changes to the name (i.e., the spelling) in order to register their entity in the State. And finally, the registration of a business entity does not necessarily prevent another party from using that name; all that would be prevented is the third party’s registration of the name. The rights at issue are really trademark rights, which are addressed by the law separately from corporate formation rights.
Some businesses prepare state trademark filings. However, it is important to note that this too has limitations. First and foremost the filing only applies to New Jersey, and only protects against infringement in New Jersey. Next, the state registrations generally operate as individual databases, so there is nothing stopping someone from registering the same or similar trademark, or using i, in a neighboring state.
The best way to protect a business name is to use it in interstate commerce (i.e., across state lines) and to obtain a Federal trademark registration through the United States Patent and Trademark Office. The Federal filing will provide additional remedies to a trademark owner in the event that the mark is used in a way that is likely to confuse consumers anywhere in the United States (and perhaps even beyond with some of the International Treaties that are in place). This is particularly important in the Internet age, where businesses generally have at least a regional or national presence and are not so localized. For example, if a business owner has a New Jersey-registered trademark, and they learn that a competitor is using the mark in Pennsylvania in an infringing manner, the State registration will not help the enforcement efforts. The mark owner would be limited to pursuing its claim under common law theories and would be unable to avail itself of the benefits and protections of a federally registered trademark.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 06:18 AM in Intellectual Property | Permalink | Comments (0) | TrackBack (0)
Business Law: Corporate Formations: On this blog, we have previously discussed the fact that registering a business name with the State may be insufficient to adequately protect the corporate owners from individual liability. (Please see Simply Registering a Company Name is Insufficient to Avail Business Owners of the Protections of the Corporate Shield). The logical next step for a business owner would be to move beyond the sole proprietorship model and register the business with the State.
However, it is important to keep in mind that this too may not be sufficient. Establishing a corporate presence, whether in the form of a limited liability company, limited partnership or a corporation, is important in order to create a liability shield that will help insulate the business owners’ individual assets. There are various ways of piercing this veil and creditors may nevertheless be able to try to access those individual assets.
One way of doing this is for a creditor to argue that the corporation is really a sham, and not operating as a true organization. Rather, the argument would be that the individual owner of the company is really acting in his individual capacity, rather than through a separate legal entity. One of the ways in which this attack is made would be by showing that the requisite corporate formalities were not attended to.
In this regard, simply forming the company with the state and obtaining a tax identification number may be insufficient. Instead, a business owner should do everything possible to bolster the corporate shield and to prove that the corporation has an operation and existence that is separate and apart from the individual owner(s). This is particularly important for small businesses and entrepreneurs.
The best way to start this is to have all of the appropriate corporate documents put in place. If the company is a limited liability company, it should have, at a minimum, a signed operating agreement, meeting minutes, organizational resolutions and a ledger of its members. Similarly, a corporation should have, at a minimum, bylaws, a shareholder’s agreement, meeting minutes, organizational resolutions, issued stock certificates and maintain a ledger of those distributions. All of these documents need to be signed and issued, and not just exist in blank form.
In addition, both types of organizations should have annual and special meetings and should have those meetings memorialized in the corporate form. This may sound silly if the business is owned by just one person, but that is precisely the situation in which it is even more important to attend to these formalities. This is because where there is just one or two owners, the argument can be more easily made that they are really acting in their individual capacities. Thus, even a sole-owner should ensure that he is, from a legal perspective, operating the business in accordance with corporate formalities to help enhance the valuable corporate shield.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 06:17 PM in Business Law | Permalink | Comments (0) | TrackBack (0)
Employment Law: The United States District Court for the District of New Jersey, recently issued one of the first opinions to examine the application of the newly enacted Lilly Ledbetter Fair Pay Act of 2009 (“FPA”). In Gilmore v. Macy’s Retail Holdings, 2009 WL 305045 (D.N.J.) the Court indicated that the FPA applied to the plaintiff’s Title VII discrimination claim, but did not apply to the plaintiff’s claims under the New Jersey Law Against Discrimination.
The FPA amended Title VII’s provisions concerning when the statute of limitations accrues. As amended, Title VII now provides that “an unlawful employment practice occurs, with respect to discrimination in compensation, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including time wages, benefits, or other compensation is paid, resulting in whole or in part from a decision or other practice.” 42 U.S.C. 2000e-5(e)(3)(A).
In other words, as the New Jersey District Court noted, the FPA clarified when the period to file a claim commences by expressly permitting “a victim of discrimination in compensation who files a timely EEOC charge as to at least one instance of pay discrimination to recover back pay for a pay discrimination that occurred during the two years preceding the filing of the charge if such preceding discrimination is ‘similar or related to’ the practice that is the subject of the timely-filed charge.”
In Gilmore, Ms. Gilmore, the plaintiff, filed suit against her employer alleging discrimination on the basis of racial discrimination. She filed a complaint with the Equal Employment Opportunities Commission on July 7, 2005. The basis of her complaint was that she was not fairly promoted within her retail employer to departments that would have provided her with better commission opportunities, and therefore better pay. She claimed that such failures on the part of Macy’s were a result of racial discrimination.
The Court noted that since Ms. Gilmore’s discrimination claim involved an unlawful employment practice relating to compensation, the FPA, signed into law by President Obama January 29, 2009, was triggered. The law, which expressly applies retroactively to May 28, 2007, was designed to redress the Supreme Court decision of May 29th of that year, in which the Court had limited the time period as to when the triggering event occurs.
The Gilmore Court examined the legislative intent behind the FPA and specifically noted that Congress, in propounding the FPA stated that the Supreme Court decision “undermine[d] … [statutory protections against discrimination] by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions . . .” Congress specifically noted that the Supreme Court decision demonstrated an impracticable approach, “ignoring the reality of wage discrimination.”
Interestingly, the Gilmore Court did note its opinion that the FPA does not apply to a claim made under the New Jersey Law Against Discrimination (NJLAD), but rather, is limited to the plaintiff’s Title VII claim. Its rationale was that NJLAD applies a different statute of limitations to its claims that are distinct from the timing that an EEOC charge is made.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 06:37 PM in Employment Law | Permalink | Comments (0) | TrackBack (0)
Employment Law: The New Jersey Appellate Division recently handed down an important decision interpreting the statute of limitations in work discrimination claims. In Toto v. Princeton Township, 2009 WL 88499 (N.J. Super.A.D. 2009), the Court held that the statute of limitations for the plaintiff’s hostile work environment claim ran from the time that he commenced his medical leave, rather than from his date of termination. Toto, the plaintiff, alleged that he suffered from disabilities such as a speech impediment and Attention Deficit Hyperactivity Disorder. He brought suit against his former employer, Princeton Township, based on allegations that he was “verbally taunted and teased” by co-workers; subjected to sexual harassment; that the Township failed to remedy such conduct; and that the Township failed to make reasonable accommodations for him, pursuant to New Jersey’s Law Against Discrimination.
Mr. Toto allegedly was involved in a confrontation with two co-workers January 9, 2002 and left his work for medical leave on January 11, 2002, and never returned. In July, 2002, the Township issued correspondence to Mr. Toto inquiring as to whether he was going to return to work and indicating to him that if he did not, he would be terminated upon the expiration of his medical leave. As a result, Mr. Toto was terminated on July 19, 2002.
The plaintiff’s claims consisted of (1) a failure to accommodate and (2) hostile work environment. The plaintiff’s "failure to accommodate" claim allegedly arose in the time during his medical leave. However, the Court determined that the hostile work environment only could arise out of acts that Mr. Toto was subjected to while he was at work. A hostile work environment claim is subject to a two year statute of limitations in New Jersey. In other words, to assert a claim, a plaintiff must commence legal action within two years from the date that the claim arose.
The Toto Court specifically held that for hostile work environment claims, the “statute of limitations began to run when plaintiff left the workplace because this is the date the last act of harassment could have occurred. . . . Because plaintiff was last physically at the work site more than two years before this action was commenced, the claim is barred by the statute of limitations.”
As a result, Mr. Toto’s claim for hostile work environment was dismissed in whole. The Toto case emphasizes the non-waning application of the Courts of the statute of limitations. Regardless of how sympathetic a claim might be, if the time has run, the claim will be barred. Accordingly, it is critical that potential plaintiffs consult counsel immediately to ensure that they have evaluated all potential claims that might be sought and have accounted for the statute of limitations that apply to each.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 10:39 AM in Employment Law | Permalink | Comments (0) | TrackBack (0)
Business Law: Recognizing the current economic condition of the Country generally, and the State of New Jersey in particular, the New Jersey Legislature passed, and the Governor signed into law, in December, legislation aimed at encouraging people and companies to invest in New Jersey businesses. The InvestNJ Business Grant Program Act (the “Act”) provides a grant to eligible businesses that make capital investments in the State. The grant is calculated as seven percent (7%) of the capital investment made, but may not exceed $1 million to any one grantee. Moreover, the sum of all of the capital investment grants given by the state are not to exceed $70 million.
For purposes of the Act, a capital investment is an expense of at least $5,000 incurred for “the direct use and operation of a business for (1) the site preparation and construction, renovation, improvement, equipping of, or obtaining and installing fixtures and machinery, apparatus or equipment in, a newly constructed, renovated or improved building, structure, facility, or improvement to real property; and (2) obtaining and installing fixtures and machinery, apparatus or equipment in a building, structure or facility.” To be eligible to receive the InvestNJ grant, the grantee must be a business that (a) operated for at least two years before the grant application was submitted; and (b) employed at least five full-time employees. Moreover, the grant needs to have been made between the effective date of the Act, December 9, 2008 and January 1, 2011.
To receive the grant, the business must submit an application, in the form provided by the CEO of the New Jersey Economic Development Authority before January 1, 2011. Another feature of the Act provides incentives to New Jersey businesses to add employment opportunities within the State. Specifically, the Act provides for the provision of a grant to businesses that (a) operate continuously in New Jersey for at least two years prior to filing the application; (b) employ at least five full-time employees; (c) add a position created in New Jersey after December 1, 2008 and before January 1, 2011 for a period of at least one year; and (d) had a “net increase” in employment of eligible positions within that time period. For purposes of this provision, an “eligible position” is defined by the Act as a full time position where the individual’s payment is subject to New Jersey tax withholding, and for which the business provides employee health benefits under its group plan. The law specifically excludes positions for consultants or independent contractors. Again, a business looking to receive a grant for its new hiring, in accordance with this Act, needs to submit an application by January 1, 2011. The grant to be provided is $3,000.00 for each eligible position, but one business may not receive more than $500,000.00 in grants for creating new eligible positions. Moreover, the total amount of grants issued for the creation of new positions is not to exceed $50 million.
Business owners, entities looking to establish businesses in New Jersey, and potential buyers and sellers of New Jersey businesses should all be aware of the financial incentives being offered by the State for investing in New Jersey businesses.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 12:43 PM in Business Law | Permalink | Comments (0) | TrackBack (0)
Employment Law: As part of the 2008 Legislative Session, the New Jersey legislature passed, and Governor Corzine signed, a law which provides treble damages (triple the amount of actual damages) for sales representatives who are not paid earned sales commissions within thirty (30) days of termination of their services.
Under the law, a “sales representative” is defined as “an independent sales company or other person, other than an employee, who contracts with a principal to solicit orders and who is compensated, in whole or in part, by commission.” Thus, the penalties imposed by the bill do not apply to individual sales representatives providing services pursuant to an employment contract, but rather apply to those representatives providing services on an independent contractor basis. Moreover, a person who places orders or purchases goods exclusively for his own account for resale will not be deemed to be a “sales representative” for purposes of the bill.
In light of the obligations imposed by this law, individuals and business entities should be aware that they may be subject to increased damages if they retain sales representatives on an independent contractor basis and fail to timely pay those individuals’ commissions. In addition to timely payments during the course of the agreement, the principal would be required to pay all commissions earned by the representative within thirty (30) days of the termination of the agreement for any reason.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
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Posted by Nissenbaum Law Group at 05:33 PM in Employment Law | Permalink | Comments (0) | TrackBack (0)
Employment Law: The New Jersey legislature recently enacted historic legislation which will allow all New Jersey employees to take up to six weeks of partially paid leave to care for sick family members, newborns or newly adopted children.
Under the New Jersey Paid Family Leave Act, a “family member” is defined as a child, spouse, domestic partner or civil union partner, or the parent of a spouse, domestic partner or civil union partner. Employees seeking benefits under the law may take either continuous or intermittent leave, up to a total of 42 days in any 12-month period. With respect to newborns and newly adopted children, parents may take leave at any time within the first year after the birth or adoption of the child, provided that the leave is completed within the first 12-month period.
Leave under the Paid Family Leave Act will run concurrently to any leave taken by an employee under the Federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA). However, while both the FMLA and the NJFLA require covered employers to reinstate employees taking leave under those acts, the Paid Family Leave Act does not impose the same requirement. Accordingly, employees taking leave under the Act may not be able to return to the same or a comparable position once their leave ends. In other words, if an employee is only eligible for leave under the Paid Family Leave Act, his job is not protected. However, if the employee is eligible for the paid leave as well as leave under either the FMLA or NJFLA, although the terms run concurrently, the employee would still be entitled to reinstatement of his job under the latter statutes.
Employees taking leave under the new law will be eligible to receive 2/3 of their salary, up to a maximum of $524 per week. The program will be funded entirely by employee contributions in the form of payroll deductions, which the legislature estimates will amount to approximately $33 a year for New Jersey workers. These payroll deductions will begin on January 1, 2009, however, the benefits afforded under the Act will not be available to employees until July 1, 2009.
It is notable, that this law is differs from the Federal and State Family Leave Acts in that the Paid Family Leave Act applies to all employers, regardless of size. Accordingly, even employees of small companies can avail themselves of the benefits of this Act; in fact, it is arguably aimed as such small business employees. Accordingly, it is important that all New Jersey employers understand the new law and its requirements. Without limitation, as of January 1, 2009, all employers need to remember commence withholding the application deductions from employee payroll.
Comments/Questions: ljm@gdnlaw.com
© 2009 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 06:50 PM in Employment Law | Permalink | Comments (0) | TrackBack (0)
Employment Law: Under New Jersey law, an employee does not have a reasonable expectation of privacy in the content stored on his work computer. This is true notwithstanding the fact that the employee may have created confidential passwords to preclude third parties from accessing the computer. This was the ruling of the New Jersey Appellate Division in the August 2008 decision in State v. M.A., 402 N.J. Super 353 (App. Div. 2008).
In State v. M.A., during the course of working as a bookkeeper, the defendant employee stole money from his employer company. Upon the employer discovering the employee’s theft, the employee was terminated. Subsequently, the employer reported the theft to the police and consented to the search of the employee’s work computers to obtain evidence of the employee’s theft. The employee was subsequently prosecuted. At trial, the employee sought to suppress the information obtained from the computers on the basis that the search of the computers without his permission was impermissible. Specifically, the employee asserted that he had a reasonable expectation of privacy in this information because he had, among other things, created confidential passwords precluding access from third parties.
The Appellate Division, however, found that the search of the employee’s work computers was valid because the employer, in its capacity as owner of the computers, consented to the search. The Court noted that the employee never requested that the computers be provided to him. Therefore, even if he had tried to claim an ownership interest in them, the Court determined that the employee had abandoned them. Accordingly, he no longer retained any reasonable expectation of privacy in them. Again, this was despite the fact that the employee had tried to block third party access. In other words, setting up passwords and other obstacles may be insufficient to establish a privacy invasion.
So employees beware of what you store on your workplace computers. Regardless of what passwords and other security initiatives you take to preclude access of any information stored on the computers, the consent of the employer may be all that is necessary for a search to be conducted with respect to these computers.
Moreover, employers should also take this as a reminder to clearly articulate employee’s privacy expectations. It is strongly recommended the company’s adopt an employee manual or other policy document that clearly states that employees should not expect to have any privacy rights in their workplace computers, other company equipment or otherwise. While these Court here did not require such a policy statement required to allow the “invasion,” it would certainly be a useful weapon in an employer’s arsenal. In other words, such a policy would help to make it clear that any purported employee expectation of privacy was unreasonable because of the employer’s clear statements to the contrary.
Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 09:47 AM in Employment Law | Permalink
In accordance with general principles of law, rescission of a contract is generally allowed only in narrow situations, such as where a party is fraudulently induced into entering into the contract. Rescission may also be permitted where there is a willful, material and substantial breach of the contract which essentially defeats the purpose of the contract.
In the employment context, a court may be inclined to rescind an employment contract where an employee misrepresents certain aspects of his employment history in order to secure a position. However, before a court will rescind a contract on this basis, the employer is usually required show that he relied on the employee’s oral or written misrepresentations, and that such reliance was reasonable.
In one such case, National Medical Health Card Systems, Inc. v. Fallarino, the Supreme Court of New York found that the employee’s misstatements as to his prior employment could not serve as a basis for his termination. In that case, the employer only realized that the employee had made misrepresentations in his resume after the employee had already been terminated. Nonetheless, the Court held that the employer’s reliance on the employee’s misrepresentations was not reasonable. Specifically, the Court found that the employer failed to exercise due diligence in investigating the employee’s background despite that it had an ample opportunity to do so and that information about the employee’s prior employment was readily available. In fact, the Court noted that during the interview, the hiring coordinator focused on only one of the employee’s prior positions, which happened to be legitimate, and did not inquire into his other prior experience. In addition, and although the employee had provided more than one reference, the employer’s agent contacted only one of the references provided. Accordingly, the Court found that the employment contract could not be rescinded because the employee did not defraud the employer.
Employers beware—the mere fact that an employee made false statements about his employment history does not necessarily mean that a court would hold him liable for fraud, justifying the rescission of the employment contract. Rather, the courts place a burden on the employer to exercise due diligence in evaluating an employee’s credentials.
Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com
Posted by Nissenbaum Law Group at 11:21 AM in Employment Law | Permalink