Pre and Post Employment Documents that should be reviewed by an Attorney

The following are a non-exhaustive list of Michigan related employment documents that employees should consider having reviewed by an attorney before executing them. These types of documents normally involve pre and post-employment matters and can often involve intricate legal terms of art which the general lay person may not understand. Having an attorney review these legal documents to assist in the negotiating process, which may include proposing modifications and changes to the documents or to merely consult with the employee on what all the terms and conditions mean would be a wise decision for any lay person.

  • Restrictive Covenant Agreements:  Restrictive covenant agreements commonly involve a written document drafted by the company or their legal counsel which  normally encompass clauses pertaining to confidentiality, non-solicit, non-disclosure, trade secrets, innovations and non-compete and are commonly often required to be signed in conjunction with an offer of employment.  These types of agreements restrict an employee’s ability to do certain things while employed and after employment.
  • Employment Contracts:  Employment contracts are commonly found in areas involving highly compensated individuals or those who will hold upper management positions or who have professional degrees.
  • Severance Agreements:  Severance agreements are commonly offered at the time of separation of employment. Severance agreements will normally provide additional money to the employee in exchange for a release by the employee not to sue the employee for any reason involving their past employment with the company. Severance agreements may also include restrictive post-employment covenants.

Business Insurance

During my many years of legal practice in Michigan I have come across numerous situations where businesses lacked insurance coverage when they tried to file a claim with their insurance carrier and/or was denied coverage when a claim was filed because it was excluded from their policy. Many of the owners have asserted to me an “I didn’t know I didn’t have the coverage, my insurance agent never told me that my policy wouldn’t cover the type of claim involved or my insurance agent didn’t advise me that I needed additional coverage for certain types of potential claims.” In many instances, I have come to the realization and conclusion that the business owner merely didn’t want to pay for the additional coverage or didn’t think that type of coverage was needed. I always tell my business clients when they plan on purchasing business insurance they should review the policy in its entirety before signing on the dotted line, and to especially review and take notice of the area that usually is entitled “exclusions” from the policy. In many instances, and depending on your state’s insurance statute, an insurance agent must inform you of all coverages available to the business. Many insurance agencies and agents are now requiring you to fill out waiver forms if you do not wish to take certain additional coverages for your business so they can avoid potential malpractice claims. Depending on the type of industry a business is involved in may determine the type of extra or additional coverage the business should look into.  A business owner would be wise to spend time reading a property and casualty policy or any other business related policy in advance of binding coverage with the insurance carrier in order to verify what is covered and what is excluded from coverage.

Michigan Unemployment Misrepresentation and Fraud

Between 2013-2015 the Michigan Unemployment Agency assessed thousands of Michigan workers with claims of fraud pertaining to unemployment benefits. Although the state claims it was doing everything by the book, those who have filed suit against the state of Michigan and Michigan legislators have indicated that the problem with improper adjudications pertaining to unemployment matters started when the state switched over to a new computer system and laid off approximately 400 people in the process. Estimates indicate that approximately 60,000 filed claims during this period should be re-reviewed by in person unemployment adjudicators. A high percentage of the Michigan unemployment fraud cases brought before administrative law judges have been summarily dismissed on multiple grounds.

The law firm of Seth T. Seidell, has specialized in Michigan unemployment matters since 1998, including many cases involving misrepresentation and fraud. Although each case is unique based on its own facts, the Seidell law firm has been highly successful in winning many of those cases. If you believe that you have been mistakenly charged with fraud and/or misrepresentation by the Michigan unemployment agency, and whether or not your appeal period has run out, you may still be entitled to a review of your claim by a state administrative law judge or otherwise.   

National Labor Relations Board (“NLRB”) Scrutinizes Employer Handbook and Other Written Policy Language of Private Non-Union Employers

Section 7 of the National Labor Relations Act (“NLRA”) guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.” One of the great misconceptions in the business world is that the NLRA does not apply to private employers who are non-union. The NLRA applies to both union and non-union private sector employers and is regulated by the National Labor Relations Board (“NLRB”) as well as the federal courts. Generally, disputes in this area arise when a private non-union employee has been disciplined, suspended and/or terminated for violation of company policies and procedures which have been generally noted in employer handbooks.

Recent rulings of the NLRB include the following handbook provisions and/or written policies and procedures that were deemed unlawful under the NLRA:

  • Provisions defining “confidential information” as “personnel information, including, but not limited to, all personnel lists, rosters, personal information of co-workers” and “personnel information such as home phone numbers, cellphone numbers, addresses and email addresses.”
  • A blanket rule that bars employees involved in worker misconduct probes from discussing the proceedings with their colleagues.
  • Language that called for “courtesy” on the part of employees.
  • “At-Will” employment clause that states the employment relationship cannot be amended, modified or altered in any way.
  • A general policy that suggests that employees must first take a complaint through an open-door policy, dispute resolution or human resources and does not allow employees to complain to each other or outsiders (e.g. NLRB).
  • No-loitering rules after finishing a shift.
  • Statements that indicate that the employer is “non-union.”
  • Dissemination of information during non-work hours or in break rooms.
  • Requiring employees to represent a company in a “positive and professional manner” and to “avoid negative comments.”
  • Certain types of social media postings.

When it comes to employer handbooks and/or other written policies and procedures there is no substitute to having those documents reviewed periodically by trained professionals such as legal counsel.

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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Michigan Unemployment Hearings-Why Use Legal Counsel?

Why should you seek legal counsel at a Michigan Unemployment administrative hearing? Many times decisions made by the Michigan unemployment agency at the early stages of the claim process (e.g. determination/redetermination) are made incorrectly. Claimant’s wrongfully believe because they are denied unemployment benefits at the claim process stage their chances of winning on appeal are limited so they give up. In addition, the state of Michigan is issuing erroneous decisions in far greater numbers than ever before indicating that employees have committed fraud or misrepresentation. Fraud and misrepresentation cases can carry serious consequences if it is found that fraud or misrepresentation exists, including large penalties, interest, and possibly even leading to becoming a criminal matter.

Lawyer for Unemployment Hearing

The Seidell Law firm has a proven history of successfully representing employers and employees at Michigan unemployment hearings since 1998, including hearings involving misrepresentation and fraud, with over 500 hearings conducted.* (*Success of any case is directly related to all the facts and circumstances). Reasons why employees (claimants) should seek legal counsel for Michigan unemployment hearings, especially those involving fraud or misrepresentation, include:

  • Employees don’t understand the law or burden of proof requirements
  • Employees can’t anticipate issues that will come up
  • Employees aren’t well versed in the process, such as the presentation of relevant evidence, offering of testimony, and cross examining of witnesses

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Social Security Disability Appeal Representation-Michigan

Have you been denied social security disability benefits?

According to the Social Security Administration, some of the top reasons individuals are denied social security disability benefits upon application are as follows:

  • You have not had the disability long enough or it isn’t severe enough
  • Refusal to cooperate with Social Security, such as getting an independent medical exam
  • You don’t have up to date medical records or you have insufficient medical documentation
  • You don’t follow through with the appeal process after being denied at the application level
  • Even though you might have a physical or mental impairment, Social Security claims you can still work in your usual type of work or another type of work
  • The impairment resulted from an alcohol/drug addiction or conviction which may make you ineligible
  • You failed to follow a prescribed treatment
  • You returned to substantial work before the disability can be established

Social Security Disability statistics show that only 30-40% of individuals are successful at getting social security disability at the application phase. The approval rate increases approximately an additional 10% on claims that were denied but were submitted for reconsideration. However, social security disability claims approval (those denied after application or reconsideration of a denial) jumps dramatically at the administrative hearing level where the success rate, depending on the jurisdiction you are in, climbs to 50-60% overall. Our firm represents individuals in Michigan who have been denied social security benefits and have a pending hearing or are waiting for a hearing date to be provided before an administrative law judge. We only get paid if we WIN your social security disability claim appeal..

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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