BOWERS HARRISON, LLP

Social Media for Business- Protecting Your Company

admin — Tue, 21 Feb 2012 15:58:36 +0000

On March 27, 2012, Bowers Harrison partner, Cory Kuhlenschmidt, will present a seminar on how social media has presented problems for business owners. This seminar will review the requirements for a social media policy, and how such a policy can help employers avoid violating laws and guidelines under the Federal Trade Commission and under the National Labor Relations Act. The seminar will be held at the Southwest ISBDC Event Center, 318 Main Street, 4th Floor, Evansville, IN 47708-1456. You can register for the seminar at this website.

Tax Incentives for Business Investment, Job Creation and Job Retention

admin — Tue, 21 Feb 2012 15:46:01 +0000

On February 23, 2012, Bowers Harrison partner, Mark Miller, and Greg Wathen, President & CEO of the Economic Development Coalition of Southwest Indiana, will discuss tax abatement as an economic growth tool. Tax abatement is a tool used by local government to attract private investment and job creation by exempting all or a portion of the new or increased assessed value resulting from new investment from the property tax roll. There will also be discussion of other local and state incentives for business investment. The seminar will be held at the Southwest ISBDC offices, 318 Main Street, 4th Floor, Evansville, IN 47708-1456. You can register for the seminar at the ISBDC website.

Anatomy of a Jury Trial Seminar

admin — Mon, 30 Jan 2012 14:36:46 +0000

Bowers Harrison partner, Cory Kuhlenschmidt, will participate in an Evansville Bar Association seminar, Anatomy of a Jury Trial With Judge Young (Featuring Live Stream Jury Deliberations). The seminar will be held on March 7, 2012, from 8:30 – 4:30 at the Federal Courtroom in Evansville, Indiana. This will be a live mock jury trial with US District Court Judge Rick Young presiding and Mr. Kuhlenschmidt and other local attorneys trying the case. Please contact Cory Kuhlenschmidt or the Evansville Bar Association for more information.

SB 18 COULD CHANGE HOW LONG A NONCUSTODIAL PARENT PAYS CHILD SUPPORT

admin — Fri, 27 Jan 2012 18:34:04 +0000

Presently, pending in the Indiana Senate, SB18 if passed could affect the duration of a noncustodial parent's child support obligation. SB18 provides that the duty to support a child, which does not include educational needs support, ceases when a child becomes 19 years of age, or until age 21 if the child is enrolled in and has not yet graduated from secondary school. Current law provides that the duty to support a child ceases when a child becomes 21 years of age. Thus SB18 would reduce the age to which a noncustodial parent must pay child support.

SB18 would also allow a child who is receiving child support under an order to file a petition for educational needs until the child is 21 years of age under an order issued before July 1, 2012 and 19 years of age under an order issued before June 30, 2012.

If this bill is passed into law, it will reduce the age to which a noncustodial parent has a duty to pay child support. It would also grant the child the ability to file a petition for an educational needs order which the present law does not allow. Finally, it is important to note, that SB 18 if passed would not change the requirement to emancipate a child.

Our family law department will continue to monitor this proposed bill and its progress through the Indiana Legislature. If you have questions on this issue or any other Family Law and Adoption issues, please contact the author, Katie Worman.

HB 1252 COULD CHANGE HOW AND WHEN POTENTIAL CLIENTS FILE FOR DISSOLUTION OF MARRIAGE

admin — Fri, 27 Jan 2012 14:43:44 +0000

Presently, pending in the Indiana House, HB1252 could affect how and when potential clients file for divorce. HB1252 provides that a parent of a minor child may not commence a proceeding for dissolution of marriage against the other parent of the child before the earlier of: (1) 120 days after a parent files with a court a notice of intent to dissolve a marriage is both parents have completed within 3 years before commencing a proceeding for dissolution of marriage, a divorce education program approved by the Department of Child Services ("DCS"); or (2) 300 days after a parent files with a court a notice of intent to dissolve a marriage if one or both parents of the child do not complete a divorce education program. Although there are exceptions to the notice requirement in the proposed bill, these are limited.

If this bill is passed into law, it will greatly affect how and when potential clients with minor children file for dissolution of marriage. It will impose additional requirements such as the notice of intent to dissolve marriage and divorce education program prior to filing. The proposed law will also stall a court's authority to grant provisional relief. Additionally, this law if passed could allow for a party to hide or transfer assets after receiving the notice but prior to the dissolution filing because a party could not request a mutual restraining order until the dissolution has been filed.

Family law practitioners throughout the state including Bowers Harrison, LLP attorneys in our family law department will continue to monitor this proposed bill and its progress through the Indiana Legislature. If you have questions on this issue or any other Family Law and Adoption issues, please contact the author, Katie Worman.

How Best Can An Employer Protect Itself for Expensive Specialized Training When The Employee Leaves Employment After Being Trained?

diane — Thu, 19 Jan 2012 17:23:51 +0000

How Best Can An Employer Protect Itself For Expensive Specialized Training When The Employee Leaves Employment After Being Trained?

Employers frequently expend a lot of time and money providing specialty training to certain employees, which is over and above their normal hire orientation, and on-the-job training that all employees receive. This extra specialty training may include internal and/or external courses or extensive training for a highly specialized job. The specialized training resources spent are well worth it when employees remain on the job. However, when they resign their job for any reason, especially to work for a competitor, employers want to know how to legally recover the training costs.

Case Review

Many employers have signed agreements requiring employees to work for a certain period or repay the specialty training courses, but these cases must have carefully worded language to avoid falling into the category of a “penalty,” a conflict with the Fair Labor Standards Act (FLSA) or a violation of other laws preventing employers from withholding money from the employee’s paycheck.

For example, consider the recent decision in Kenneth Hassey v. City of Oakland, tried in the First Appellate District in California (Alameda County Super. Ct. No. 2001-027607, 2008), where the City sued Hassey after he was trained to be a police officer, left his job prior to working for the five years specified in the agreement, and refused to repay the City the cost of training. Pursuant to his non-payment and in response to the lawsuit, Hassey filed a cross complaint claiming that the repayment provision was a violation of the FLSA at 29 U.S.C. §§201-219 (FLSA) and California laws.

When Hassey was hired, he signed a “conditional offer,” including a “Training Cost Repayment Plan”, where he agreed to repay $8,000 if he did not work for the Police Department for five years. When Hassey resigned his job, the City withheld part of his final paycheck as partial repayment for the debt. After Hassey refused to pay the remaining debt, the City sued him for the rest of the amount owed.

The court upheld the agreement requiring Hassey to repay his debt, but concluded that the City could not collect any of the debt from his final paycheck. The court also held the repayment requirement was not an unlawful covenant not to compete.

________________________________________________________________________

The court upheld the agreement requiring Hassey to repay his debt, and concluded that the City could not collect any of the debt from his final paycheck. The court also held the repayment requirement was not an unlawful covenant not to compete.

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Avoiding Unenforceable Repayment Clauses

There are five key points to remember when writing a repayment agreement, as follows:

Avoid writing language into the agreement, where the reason for repayment is a breach of contract. It is more difficult to collect a “penalty” for a breach of contract, than to get repayment for a genuine, detailed cost specification that will be treated as a “loan”.

Include a breakdown of the costs incurred in training, per the following example:

ITEMIZED COST OF TRAINING

Listed below are the costs for instruction and transportation in XYZ’s Specialized Training Program to become a ___(job title)___ and any other reimbursable expenses related to training costs to be a (job title)_______.

1. Instruction Time—(Detail)

2. Travel Expense—(Detail)

3. Any and all other costs applicable—(Detail)

I have read and understand the above listed costs for my training and agree to repayment of the total listed.

_______________________________ _______________

Employee Date

Be realistic and reasonable when calculating the amount owed and write language into the agreement labeling the training repayment as a “loan for value reimburse-ment” covering the specialized training. Determine various losses that could occur for various types of breaches of such agreement. For example, the individual might be fired, become physically unable to work or quit because this job is not right for him/her.

Consider pro-rating the payment for the amount of time worked after receiving specialty training, which is the specific training that could be included in a “Repayment Loan and Value Reimbursement”. This would be applicable to someone who received specialized training over and above orientation and on-the-job training done for all employees; i.e., expensive specialty courses for engineers learning an advanced company function in extended training or external courses, or a registered nurse receiving intensive training to work in open heart surgery. This agreement would become enforceable if the employee triggered the agreement’s provisions by going to work for a competitor, leaving the job for another line of work, or simply quitting work before the repayment work period was done.

________________________________________________________________________

Consider pro-rating the payment for the amount of time worked after receiving specialty training. If someone received specialized training, over and above the orientation and on-the-job training done for all employees, which is the specialty training that could be included in a “Repayment Loan and Value Reimbursement”. The agreement would be applicable if the employee triggered the agreement’s provisions by going to work for a competitor, leaving the job for another line of work, or simply quitting work before the repayment work period was done.

________________________________________________________________________

Stay away from labeling the specialized training as "on-the-job" training as this smacks of simply the regular training that all employees receive.

Constructing the Agreement

In addition to having the individual sign the document which details the “Itemized Cost of Specialized Training,” a “Memorandum of Agreement” is advisable.

Employers have a strong desire to limit training for individuals who are not motivated to keep working for the employer, or those who leave after being tempted by a better offer from the competitor. That is why the agreement should cover all of the major issues detailed in this article.

Probably, the greatest concern is that a highly trained employee will reveal trade secrets or proprietary information gleaned from the advanced knowledge provided by the employer. Thus, protection of trade secrets and proprietary information is essential, as well as a non-compete clause to prevent highly trained employees from using your training to work for a competitor, where the former employee may work to recruit former clients and co-workers, or utilize specialty documents and lists against the employer who provided the specialty training and access to privileged proprietary information.

Accordingly, employers should strongly consider combining the “Value Reimbursement/Resignation Agreement” with Trade Secrets and Non-Compete clauses. Clearly spell out each portion of the document, so that the relevant employees will better understand what they read and realize what they are agreeing to do. Tailor the individual agreement to be applicable to different groups of employees and/or different purposes for an entire job classification.

_______________________________________________________________________

Employers should strongly consider combining the “Value Reimbursement/Resignation Agreement” with Trade Secrets and Non-Compete clauses.

________________________________________________________________________

Clearly, the difficult part is how to calculate the reimbursement cost. Therefore, when calculating the cost in an attached schedule, be diligent in itemizing each cost and detailing why a particular sum has been included in the schedule.

Be sure to exclude reimbursement generally available to all employees (such as those already provided for in the employee handbook); who meet certain requirements like full-time work. Examples of these exclusions would be an Educational Assistance Program, a college course reimbursement program which may require some relationship to the job and/or completion with a passing grade prior to reimbursement, and the normal cost of travel that is reimbursed for business-related car mileage or travel costs.

Finally, there is no certain period of time that an employee must work to repay the loan for specialized training. The requirement for reimbursement could be longer than one (1) year for such reasons as the cost of this specialty training, or the level of clearance for the individual to access trade secrets and proprietary information imparted during specialty training. However, if this agreement is litigated, the court will expect the employer to pro-rate the loan in proportion to the time actually worked/not worked.

Editorial Comment: The reason for any re-payment for specialized training cannot be termed a "penalty" as a court will have a problem with enforcing such a penalty. That is why the agreement is termed, “Value/Reimbursement Agreement,” wherein the specialized training costs are defined as a "loan" requiring repayment in accord with the terms of the agreement. It is also prudent to include an at-will employment clause, so that this agreement is not a contract of employment for a specified time. Further, it is important to add a clause stating that individuals signing this agreement will not solicit co-workers to leave employment, if they quit their jobs or are terminated from employment.

A sample agreement that includes pertinent clauses is, as follows:

Sample Memorandum Of Agreement For Recovering the Cost For Specialized Training

I, ____________________________, understand and agree that in consideration of my employment by XYZ, Inc. (XYZ) and the specialized training that I will receive in the XYZ Specialized Training Program in the area of _________________ that I will reimburse XYZ for all reasonable costs and expenses relating to my training in the XYZ Specialized Training Program and such costs will be treated as a loan to become a(n) _(job title/level___)_, subject to the following terms and conditions:

Value Reimbursement/ Resignation

In the event that I voluntarily resign from XYZ during the one (1) year period after my completion of the Specialized Training Program required to become a _(job title/level___)_, I agree to repay all of the costs and expenses incurred by XYZ on a pro-rated basis as follows:

For each month I am employed after completion of the Specialized Training Program, the amount owed to XYZ will be reduced by 1/12 of the training and travel costs that I have received in the XYZ Specialized Training Program.

I understand and agree that the costs and expenses incurred by XYZ for my specialized training in its Specialized Training Program is $___________ and that I will repay this amount pursuant to the terms and conditions set out above, and in the attached “Itemized Cost of Training”. The “Itemized Cost of Training” is attached to this Memorandum of Agreement and marked Exhibit “A” and is incorporated in this Memorandum of Agreement as if fully set out herein.

This cost of training will not include any approved educational courses or training not given by XYZ, but taken pursuant to the company’s Educational Assistance Program set out in the Employee’s Policy Manual.

The cost of travel will not include any approved ordinary and customary mileage /travel reimbursement that is approved and provided for and taken pursuant to XYZ’s Mileage/ Travel Reimbursement Policies set out in the Employee’s Policy Manual.

Employment At-Will

This employment shall be on an at-will basis, and not for any definite employment term., i.e. either XYZ or I may terminate this employment relationship at any time, for any reason, with or without notice.

I understand and agree that this Memorandum of Agreement does not constitute a contract of employment and I understand that this Memorandum of Agreement does not grant me any rights, privileges or benefits from XYZ, nor does it require XYZ to offer me a regular position as a __(job title/ level_),or change my at-will status of employment.

I understand that if I successfully complete the XYZ’s Specialized Training Program required to be a __(job title/ level_), that this agreement does not alter any other terms or conditions of my employment with XYZ as set forth in its Employee’s Policy Manual.

Trade Secrets and Non-Compete

In the course of my employment with XYZ, I understand that I am likely to become familiar with secret or confidential information of XYZ and the financial, credit, and marketing needs of XYZ’s customers that use XYZ services, including but not limited to (here insert the general type of confidential information, trade secrets that are being protected) confidential information of XYZ’s financial condition, pricing, and marketing information, financial credit and pricing information of XYZ’s customers, XYZ’s trade secrets and other information of a confidential nature that is required to be maintained for XYZ’s continued success of its business.

I agree that for the term of my employment and for a period of one(1) year, after termination of my employment for any reason, with or without cause, I will not directly or indirectly compete by engaging in any business work for any competitor of XYZ, Inc. in the sales territory I have serviced and within a 50-mile radius of an office/plant of XYZ, and Employee agrees not to contact any then current client/ customer of XYZ for the purpose of selling or servicing (insert company product or service). I agree not to contact such client/ customers individually or give out confidential information of such customer/ client needs on behalf of any other person, firm, company or corporation.

Non-Solicitation of Employees

Further, I agree that I will not during the term of my employment and for a term of one (1) year after termination of my employment, either solely or jointly with others, solicit, contact or entice any of XYZ’s current employees with the purpose of persuading such employees to terminate their employment with XYZ to work for another Employer with a similar business interest.

Use of Trade Secret/ Proprietary Information

I shall not divulge to any person or competitor of XYZ any secret or proprietary information of XYZ, including any of the above-listed confidential, secret proprietary information during the term of my employment with XYZ and for a term of one (1) year thereafter, unless XYZ gives its consent in writing in each instance or unless I am compelled to disclose this information by a governmental, administrative, or court process.

I understand that if it becomes necessary for XYZ to enforce this Memorandum of Agreement and a decision is entered against me, I will pay all costs and expenses incurred by XYZ including reasonable attorney’s fees.

Arrange appropriate signature lines as needed.

Illinois Home Repair and Remodeling Act

admin — Thu, 29 Sep 2011 14:04:57 +0000

If you are a contractor doing work in Illinois in structures primarily used as residences for an amount above $500, you need to be aware that the Illinois legislature has amended its Home Repair and Remodeling Act in four substantive areas. Please note that these provisions are not applicable to original construction or structures with more than six residential units. A copy of the new law is available here.

First, a contractor is prohibited from advertising or promising to pay or rebate all or any portion of an insurance deductible originally paid by the consumer. Second, a contractor cannot allow an out of area contractor to use its business name or license. Third, the amendment to the law allows the client to cancel a written contract to be paid from the proceeds of a property and casualty insurance policy. Cancellation is allowed before midnight on the earlier of the fifth business day after the insured has received written notice from the insurer that any part of the claim or contract is not a covered loss under the insurance policy or the 30th business day after receipt of a properly executed proof of loss by the insurer from the insured. Lastly, a contractor will be imposed a $250 civil penalty for a roofing contractor for failing to put the licensing number and licensee's name on its commercial vehicles. The issued penalty can be avoided if corrected prior to the hearing or the civil penalty.

These changes will become effective January 1, 2012. Please contact Jimmy Gentry if you have any questions about these amendments or the Illinois Home Repair and Remodeling Act in general.

Constitution Day 2011

admin — Mon, 26 Sep 2011 20:11:12 +0000

Bowers Harrison attorneys, Mark E. Miller and Katherine Worman, led a discussion of constitutional law issues for the 2011 Constitution Day at the University of Evansville on September 21, 2011. Students and faculty of the University, as well as members of the general public, were in attendance. Constitution Day commemorates the formation and signing of the U.S. Constitution by thirty-nine brave men on September 17, 1787, recognizing all who, are born in the U.S. or by naturalization, have become citizens.

Mr. Miller and Ms. Worman presented a discussion of SNYDER v. PHELPS ET AL. and DISTRICT OF COLUMBIA ET AL. v. HELLER. In the Phelps case, the U.S. Supreme Court held that the First Amendment provided a shield for the Westboro Baptist Church from tort liability for its picketing at a military funeral. In the Heller case, the U.S. Supreme Court held that the Second Amendment protects an individual right to possess a firearm unconnected with service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home. The discussion focused on the tension between popular views on the limits of acceptable speech and gun rights and the extent of the protections afforded those rights by the Constitution.

Joint Matrimonial Trusts

admin — Tue, 19 Jul 2011 16:02:16 +0000

Indiana real property law has been changing rapidly over the last couple of years. Several new concepts have been added. One authorizes the use of “transfer on death deeds” to transfer real property interests at death to named beneficiaries. This topic was discussed in an earlier article on this website.

Another new concept is the “joint matrimonial trust.” Pursuant to a new statutory provision which took effect in mid-2010, it is now possible for married couples to transfer real property into either one joint or two separate revocable trusts and still enjoy the protection from foreclosure by the creditors of only one of the spouses that they would otherwise have if they continued to own the property as tenants by the entireties. A couple must specifically elect this treatment. This is done by either including a statement to that effect in the deed transferring the property into the trust or by a separate written statement recorded in the county where the real estate is situated.

This new provision makes it much safer for married couples to place real property into trusts prior to death. Couples might wish to do this for any number of reasons, not the least of which would be to avoid probate.

Couples should consider electing joint matrimonial trust status if they are contemplating transferring real estate into a new trust or have an existing trust which contains real estate.

If you have any questions regarding this topic or any other estate planning issues, please contact the author, David E. Gray.

H-1B Cap Update as of July 1, 2011

admin — Tue, 19 Jul 2011 15:43:05 +0000

The most recent numbers provided by the U.S. Citizenship and Immigration Service (USCIS) regarding the FY 2012 H-1B cap indicate as of July 1, 2011 the following number of H-1B visa petitions had been filed with the USCIS:

H-1B Regular Cap 20,500 (65,000 cap)
H-1B Master’s Exemption 12,800 (20,000 cap)

These are the number of petitions that USCIS has accepted for the applicable cap. It includes cases that have been approved or are still pending. It does not include petitions that have been denied. This cap relates to fiscal year 2012 which begins October 1, 2011 and therefore applies to H-1B applicant with an employment start date on or after October 1, 2012. H-1B applications can be filed now for employees with start dates on or after October 1, 2011.

Not all H-1B nonimmigrants are subject to the annual cap. Up to 6,800 visas are set aside from the cap of 65,000 during each fiscal year for the H-1B1 program under legislation implementing the U.S.-Chile and U.S.-Singapore Free Trade Agreements. Unused numbers in this pool are made available for H-1B use for the following fiscal year. For more information on the cap and H-1B visa applications please see my prior post H-IB Visa Availability Update.

Applications should be filed as soon as possible in order to avoid being shut down by the annual cap for the H-1B program. The H-1B application procedure is a complicated process. Bowers Harrison, LLP is prepared to assist you with H-1B visa applications and any other immigration issues.

If you have any questions regarding H-1B visas or any other immigration issues, please contact the author, Christopher L. Lucas.