Employers Beware: “Ban the Box” Law To Take Effect January 14th

1 Aug

Do you do criminal background checks before hiring someone?  Does your job application form ask if the applicant has ever been convicted of a crime?

The law is changing on this topic and such conduct may soon be prohibited. The US EEOC takes the position it is illegal race discrimination to refuse to hire anyone who has a criminal conviction because the EEOC says this disproportionately screens out black applicants. The EEOC says the employer has to look at the individual circumstances of each applicant, including when the conviction occurred, what the crime was, whether it would affect job performance, etc.

The Minnesota Legislature has recently passed a law popularly known as “Ban the Box” which says an employer may not ask on a job application form whether the applicant has a criminal record. It takes effect 1/1/14. The employer may ask about criminal convictions after the applicant has been selected for an interview or before a conditional offer of employment is made.

This article is written by Mark Ohnstad.  Mark practices law in the area of litigation at Thomsen & Nybeck, P.A.  Mark concentrates his practice in the areas of General Civil Litigation, Commercial Litigation, Insurance Litigation, Employment Law, Personal Injury and Family Law.  Mark has over 30 years experience at the state and federal levels in representing businesses and individuals in a range of subject areas.  Mark’s experience includes numerous trials, arbitrations, and mediations.  Mark distinguishes himself with the careful analysis and knowledge he brings to each case.

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Contracting Diseases: Mishaps in contract drafting, limitation of liability edition

1 Aug

One of the problems I regularly encounter with new clients is that they have come to me too late to do the most good. This frequently happens in the area of drafting contracts relating to their business or project. Many people say they want a “simple” contract, or they think they know what they’re signing, or that they trust the other party to the deal, so they don’t need to overthink what they’re doing. A recent decision by a Federal Court in Indiana demonstrates how costly this kind of “penny-wise” thinking can be.

SAMS Hotel Group, LLC set out to build a new hotel. Unfortunately, the architecture firm the company retained to provide the design work for the project apparently did not employ or even consult with a registered professional structural engineer for the project. The county building officials later found structural design defects, which resulted in the condemnation of the structure and its ultimate demolition before the hotel ever opened its doors to the public.

SAMS sued its architect, Environs, Inc. The trial court held that Environs breached the applicable standard of care by failing to involve a structural engineer and for failing to timely inspect the project during construction. SAMS proved damages in the amount of $4.2 million.

Now the story turns truly tragic for the developer. Environs incorporated a clause in its contract with SAMS that sought to limit its liability:

The Owner [SAMS] agrees that to the fullest extent permitted by law, Environs/Architects/Planners, Inc. total liability to [SAMS] shall not exceed the amount of the total lump sum fee due to negligence, errors, omissions, strict liability, breach of contract, or breach of warranty.

SAMS, as the “Owner” under the applicable contract, paid Environs a lump sum fee of $70,000. The court enforced this limitation of liability provision and held that SAMS could recover only $70,000 of its $4.2 million loss, even though the source of Environs’ liability arose out of negligence rather than a breach of the parties’ contract. The United States Court of Appeals for the Seventh Circuit affirmed the trial court’s ruling. It noted, under Indiana law, that sophisticated parties aren’t entitled to protection from even the apparently unfair terms of the contracts they sign:

[T]he general rule of freedom of contract includes the freedom to make a bad bargain.

Parties are free to enter into any kind of contract they like, but just know that if you assume you are sophisticated enough not to need a lawyer’s assistance with your contract, the court just might agree with you and hold you to what you signed.

The complete order of the Federal District Court for the Southern District of Indiana can be read here.

The complete opinion of the Seventh Circuit Court of Appeals can be read here.

Matt Drewes contributed this article. Matt is a Shareholder with Thomsen Nybeck.  He is the head of the firm’s eight-member Community Association Representation Group and the firm’s Creditors’ Remedies Group, and practices in the areas of business and real estate litigation and transactions, employment law, construction litigation, community association law, debtor/creditor law, and insurance. He has been included in the annual list of Minnesota’s Rising Stars for several years, and has been quoted in print publications such as the Minneapolis StarTribune, Minnesota Lawyer, Habitat Magazine, and on various websites including Yahoo!Finance.com, Bankrate.com, MSN.com, HOALeader.com, and elsewhere on issues involving construction litigation, community associations, and real property issues. He can be reached at mdrewes@tn-law.com or by phone at 952.835.7000.

No Business is too Small to Need Corporate Counsel

30 Jul

All businesses, big or small, should have “corporate counsel”.   While it is not necessary for most business to maintain in-house counsel, as their needs are irregular, it is unwise to utilize an attorney only when a dispute arises.

There are numerous reasons why a business or business owner who waits until a problem has arisen before contacting an attorney is at a distinct disadvantage.  This author has addressed this, and a variety of inter-related issues, in more detail in the full article, which you can find here: No Business is too Small to Need Corporate Counsel.  The full article addresses common misconceptions and failures made by a business in some of the following scenarios:

1)     Self-help business formation, filing Articles without an attorney and failing to have proper entity structure or formalities;

2)      Overlooking the importance of member/shareholder transfer restrictions and the value of a “Buy-Sell Agreement”;

3)     Failing to establish the rights, responsibilities and obligations of each owner/member, resulting in costly disputes; and

4)     Failing to maintain the “veil” between corporate and personal liability.

If you are a business owner, or you know a business owner, you should read the full version of this article, and forward it to anyone who you may believe would benefit from reading it.  Should you need to speak with an attorney, information about Brad Boyd and the Thomsen Nybeck firm can be found here: http://www.tn-law.com/Attorneys/Brad-J-Boyd.shtml.

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This blog entry is written by Brad Boyd, a Shareholder at Thomsen Nybeck.  Brad’s practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law.  Brad provides legal advice, guidance, and representation related to risk management in a wide variety of real estate and business law matters.  Brad has worked with a wide array of small and mid-size businesses through all stages of the business life-cycle, from formation, to ongoing operation, to shareholder disputes, work-outs, and sale or dissolution.

Changes in PTO Legislation

30 Jul

Effective August 1, 2013, employees of employers with 21 or more employees working in at least one location may use sick leave benefits for absences due to illness of or injury to the employee’s child, adult child, spouse, sibling, parent, grandparent or stepparent for reasonable periods of time that the employee’s absence may be necessary, in accordance with the same terms upon which the employee is able to use sick leave benefits for the employee’s own illness or injury. A “child” includes a stepchild and a biological, adopted or foster child.

This blog entry is written by Bill Sjoholm, a shareholder at Thomsen Nybeck. Bill is a senior trial lawyer in the litigation section of Thomsen & Nybeck and the head of the firm’s Litigation Practice group. He concentrates his practice in the areas of employment law, commercial law, plaintiffs’ personal injury, community association law, and general civil litigation. In addition to practicing before the state and federal courts, Bill has been active in pro bono activities, including serving on the Minnesota State Bar Association Civil Litigation Governing Council, the Board of Directors for Central Minnesota Legal Services, the Lawyer Referral Oversight Committee and the Volunteer Lawyer’s Network.

One Car. Two Sisters. Both Arrested for DWI. Wait, what?!

3 Jul

Two sisters in Florida were recently arrested for DWI. At the same time. While driving the same car. Yes, you read that correctly. So, how did these sisters manage to pull this off? Well, the youngest one – 18 years old – was allegedly zig-zagging down a highway, which attracted the attention of a local police officer. When the officer pulled up behind the vehicle, he turned on his lights and siren. Abruptly, the vehicle stopped in the middle of the road. Then, the sisters changed seats by hopping over one another inside the vehicle. Needless to say, the officer had no trouble noticing the switcheroo occurred. The consequence is that the older sister – 24 years old – was now behind the wheel. And even though she didn’t drive the vehicle anywhere, she was in control of the vehicle while under the influence of alcohol. Thus, both sisters were arrested and charged with DWIs – coincidentally enough, they both blew .12.

The key fact leading to the arrest and charge of the older sister is that she was in physical control of the vehicle. In Minnesota, physical control is defined as:

Being in a position to exercise dominion or control over the vehicle. Thus, a person is in physical control of a vehicle if he has the means to initiate any movement of that vehicle and he is in close proximity to the operating controls of the vehicle, and this is true whether the vehicle can be driven on the highway at that point or not.

Minnesota courts have extended this definition to include vehicles that are parked and even when a person is outside the vehicle. In these extenuating circumstances, courts will look to the surrounding facts to determine whether the defendant was in physical control, such as whether the keys are in the ignition, whether the car is running, and if other individuals are in or outside the vehicle.

As in previous years, you can expect local law officials will be doing DWI patrol this Fourth of July weekend. So, if part of your celebration over this holiday weekend involves enjoying a few adult beverages, keep in mind that the switcheroo does not work! Have a safe, enjoyable, and responsible Fourth of July!

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This blog entry is written by James Gempeler, an associate at Thomsen Nybeck. James practices in the litigation area of the firm with a focus on criminal defense, general civil litigation, construction litigation, and is a prosecutor for the Metropolitan Airports Commission.

Right to Remain Silent – And That Silence Will Be Used Against You

24 Jun

The right to remain silent is not an absolute right. It’s a misperception held by many that the right to remain silent – and for that silence not to be used against you – is always the case, no matter the setting. But, the United States Supreme Court forcefully reminded us that this is not the case in the Salinas v. Texas decision it issued earlier this week.

In Salinas, the defendant agreed to accompany the officers to the police station, where he was subject to questioning for an hour. Key to the case is that the defendant was never in custody – i.e. he was free to leave at any time – and, as a result, he was never given the Miranda warning we are all familiar with (you have the right to remain silent, etc…). The defendant answered most of the officers’ questions during the hour. But when they asked him whether his shotgun would match the shell casings removed at the scene, he fell silent, looked down, and shuffled his feet. After a few moments of silence, the officers asked different questions, which he again then answered. The defendant was ultimately convicted based, in part, on this silence. His silence was, in fact, used against him.

The Supreme Court was faced with the following issue: whether the prosecution may use evidence that a defendant asserted the privilege against self-incrimination during a police interview when the defendant was not in custody.

In holding that the prosecution may rely upon the defendant’s silence as an inference of his guilt, the Supreme Court held that a defendant must explicitly invoke his Fifth Amendment privilege against self-incrimination. Because the defendant was free to leave and was not even read the Miranda warning, “simply standing mute” is not enough to invoke the Fifth Amendment privilege against self-incrimination. It is not self-executing and can only be recognized in this setting when the defendant explicitly invokes it.

All is not lost, though, because the Court recognized that this rule does not apply – even in the same circumstances – when government coerces the forfeiture of the Fifth Amendment privilege. The Court’s few examples of when this might occur are not clear; but, the overriding principle is that coercion occurs when the government action denies the defendants free choice to admit, deny, or to refuse to answer.

So what does this case mean going forward? The most obvious implication is that the prosecution will use all available evidence (and inferences from the same) to obtain a conviction. But, you’d expect that out of them – otherwise, they aren’t doing their job.

Instead, it shows that defendants need to be careful about what they say and do not say during the police investigation. Most defense attorneys advise defendants to politely decline answering police questions during the investigation stages – i.e. before they are placed into custody. After all, what’s being said is most often only aiding the state’s case against you. But, now, a savvy prosecutor could attempt to use that silence against you if you were not in-custody, unless you explicitly invoke your Fifth Amendment privilege against self-incrimination. This means that must say the magic words – something along the lines of: “I’m invoking my Fifth Amendment privilege against self-incrimination.” To best protect yourself, identify Fifth Amendment by name, not just your privilege against self-incrimination.

Salinas has paved the way for prosecutors to get creative with what is said and not said by the defendant before being placed into custody. It’s important to make sure you have defense counsel to help combat this.  

This blog entry is written by James Gempeler, an associate at Thomsen Nybeck. James practices in the litigation area of the firm with a focus on general civil litigation, construction litigation, criminal defense, and is a prosecutor for the Metropolitan Airports Commission.

Matt Drewes Quoted in Recent Article at HOALeader.com: Does Your Architectural Committee Have the Right or Responsibility to Enforce Local Laws?

6 Jun

Matt Drewes recently contributed quotes for the following articles published at www.hoaleader.com, a national web-based publication focused on homeowners association and condominium board members and association management professionals:

  • Does Your HOA’s ARC Have to Enforce Local Laws? Discussion Forum Follow-up; published April, 2013 at HOALeader.com
    • Publisher: Plain-English Media, LLC (quoting Matthew A. Drewes); Read it now.

Matt is a Shareholder with Thomsen Nybeck.  He is the head of the firm’s eight-member Community Association Representation Group and the firm’s Creditors’ Remedies Group, and practices in the areas of business and real estate litigation and transactions, employment law, construction litigation, community association law, debtor/creditor law and insurance. He has been included in the annual list of Minnesota’s Rising Stars for several years, and has been quoted in the Minneapolis StarTribune, Minnesota Lawyer, Habitat Magazine, and on various websites including Yahoo!Finance.com, Bankrate.com, MSN.com, and elsewhere on issues involving construction litigation, community associations and real property issues. He can be reached at mdrewes@tn-law.com or by phone at 952.835.7000.

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