2015 Firm Highlights

The following summarizes cases and/or legal matters handled by the Seidell Law firm for the year 2015. This list in non-exhaustive and does not represent all legal matters handled by the firm.

  • Represented and resolved multiple wrongful discharge cases on behalf of employees
  • Represented and resolved multiple employment related matters on behalf of employers
  • Resolved several unemployment fraud cases with favorable rulings to the employee
  • Resolved several administrative individual licensing matters before state government agencies
  • Drafted and/or reviewed multiple corporate employee handbooks, forms, policies and procedures
  • Handled multiple buy/sell transactions on behalf of the seller or buyer
  • Litigated and settled a breach of contract case between two companies involving failure to pay past due rent
  • Drafted and reviewed  business and employment contracts covering a wide range of industries
  • Represented employees and employers on issues before the EEOC, MDCR and wage and hour
  • Handled multiple federal trademark filings

Starting a Michigan Business-Things to Consider

There are many things to consider when starting a business in Michigan. Although the list below is non-exhaustive, these items, in addition to your business plan, pertain to areas covering the law, taxes and insurance. When working your business plan, you should also incorporate these items into your overall start-up costs.

  1. Business Entity Type:       Commonly, there are multiple business types, including: sole proprietorship (e.g. dba), partnerships, limited liability company and corporations. From a legal perspective, lawyers generally avoid the use of a sole proprietorship and partnerships as they drastically increase your personal liability. In addition, there will be certain tax implications and requirements depending on the entity you form.
  2. Business Legal Documents:         Many businesses that form either an LLC or corporation, especially when multiple owners are involved, will also need business related documents such as an operating agreement or bylaws, restrictive covenants, and a buy-sell agreement.
  3. Business Insurance:      There are multiple types of insurances available for each business and certain businesses may require specific insurance as it relates to their specific industry. A thorough discussion with a property and casualty independent insurance agent is a must when starting a business.
  4. Business License and Regulations:         Some types of businesses require a special license and/or require the owner to have a license (e.g doctor, lawyer, etc.). Further analysis should be conducted to determine what licenses you may need from a local, state and/or federal level before you conduct business. In addition, many types of businesses are regulated by local, state and federal laws and a thorough review of these laws should be conducted.
  5. Business Tax Registration.         You will want to determine, based on your business, whether or not you need to file for business related taxes with the state, especially if your business has employees and/or sales or use taxes. A thorough discussion with your CPA should be conducted. They can also assist you in getting your federal tax ID number with the IRS.
  6. Businesses with Employees.       If you plan on hiring employees you should consult with an employment attorney to discuss your legal requirements as an employer.

In closing, prior to starting any business you should consult with an experienced business attorney regarding any legal documents that are necessary, an experienced employment attorney if you plan on hiring employees, a CPA or accountant regarding tax matters and a property and casualty independent insurance agent for business related insurance. All three of these trusted advisors will be critical to your business success.

Human Resource Functions Critical To Any Business Operation

A human resource individual can be described as a person who “professionally” oversees the organization’s human resource management functions. This includes a wide spectrum of managing the entire employee-employer relationship, including outside forces that interact, and employment laws applicable to the workplace.

Employees are a businesses’ “most valuable asset!” Whether you have just one employee or many, the success of any business operation lies with its employees. Attracting and retaining employees is critical to any businesses’ operational success. Unfortunately, many business owners unwisely leave human resource functions to individuals who are not qualified in the area (e.g. receptionist, office manager, accounting, etc.), because the individual lacks the proper education, experience, or otherwise, which leaves the business operation vulnerable to employee litigation, increased turnover, and unhappy employees. Business operators should use a qualified individual to manage key internal human resource functions. There are three (3) key areas of human resource management which can be summed up into the following categories:

  • Employee Recruitment and Retention: includes by way of example, but not limitation creating organizational roles, interviewing, job descriptions, selection and placement, assessments, and background screening
  • Employee Retention and Engagement: includes by way of example, but not limitation on boarding of new employees, training and development, compensation and benefits, career and/or succession planning, performance management, and employee related issues
  • HR Policies, Procedures, and Law Compliance: includes by way of example, but not limitation, HR strategy, HR tools, HR policies (e.g. employee manuals and forms), compliance with local, state, or federal employment laws, HR training, education, and certifications.

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Employment Litigation

According to the US Department of Labor, the number of suits filed in federal courts concerning employment grievances has grown over 400 percent in the last two decades. In addition, the Equal Employment Opportunity commission has received on average  90,000 discrimination complaints from across the country per year. The expansion of federal and state discrimination laws over the last couple of decades, coupled with recent National Labor Relations Board rulings,  have dramatically increased employee rights in the workplace in the United States. As a result, administrative regulatory compliance in the workplace has imposed significant costs on employers. According to a study done by CNA, a large national insurance carrier, almost 75% of all litigation against corporations today involve employment disputes and, of those, over 40% of the claims filed against private employers involve employers between 15 and 100 employees. CNA’s study also indicated that nearly 25% of all litigation in federal courts involves employment disputes, and an even higher percentage in state courts, with the average defense costs (not settlements to employees or verdicts) being $100,000 per claim. Per US Labor statistics, for every dollar given to employees to resolve the dispute, an equal dollar is spent on attorneys.  According to the EEOC, the most frequent type of claims involve sexual harassment, race, disability,  sex and retaliation. In addition, state and federal wage and hour claims at both an administrative and judicial level has been on a significant rise.

Although not all encompassing, there are certain things  employers can do to minimize and/or protect themselves against potential employment law exposures.

  • Have legal counsel review corporate employment policies and procedures on a yearly basis.
  • Have legal counsel develop an employee manual and related forms which provide written guidance on workplace policies, procedures and rules and provide statutory notices to employees on employment related rights.
  • Have legal counsel review all corporate  layoffs and/or terminations before they happen.
  • Create internal corporate dispute resolutions systems/policies (e.g. open door policies and grievance procedures).
  • Using outside mediators during employment disputes.
  • Draft and implementing a binding employment arbitration agreement which avoids the court process.
  • Utilization of Severance Agreements during permanent layoffs and/or discharges.
  • Purchasing of  Employment Practices Liability Insurance (“EPLI”) coverage through an insurance agent.

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Restrictive Covenant Agreements-“Buyer Beware!”

Restrictive Covenant Agreements

 

            Restrictive covenant agreements are a useful tool for any business wanting to protect their interests and assets with current and past employees.  These types of agreements commonly involve matters concerning trade secrets, non-disclosure, non-solicitation, confidentiality, and non-competition clauses. Some of these types of agreements are stand alone or are a part of an employment contract or severance package. So long as reasonable, Michigan law allows for non-compete agreements in employment (See Michigan Antitrust Reform Act, MCL 445.774a). In general, restrictive covenant agreements attempt to restrict employees who are currently employed and after a separation of employment from doing something or not doing something that they otherwise may have had a legal right to do. The most common practice of employers is to provide a restrictive covenant agreement at the time of the offer of employment or hire, but, under current Michigan case law, employers can require employees to sign a restrictive covenant agreement after the employee has already been hired. Far too often, employees are too eager to take an offer of employment and/or want to continue their employment with a business and, unfortunately, employees do not spend enough time reviewing these restrictive covenant agreements, and, it’s not until they separate their employment with a business do they realize the quagmire they might be in, especially in cases involving non-competes. Before signing any of these types of agreements, individuals should seek legal counsel for advice.  .