Blog

Last Will and Testament & Living Wills

When it comes to Estate Planning, many clients are confused as to whether they need both a Last Will and Testament and a Living Will. While the two documents may sound similar, they serve completely different purposes. So, what are the differences? Last Will and Testament The Last Will and Testament is a document that states your wishes about what happens to your possessions and dependents upon your death. It allows you to name the individual you wish serve as the executor of your estate – a person sometimes also referred to as a Personal Representative of the estate. That person will be responsible for administering your wishes through the probate process and working with the court to distribute your property after paying off any outstanding debts. A Last Will and Testament may also be used to name a guardian for your minor children in the event both parents pass away. The form of a Last Will and Testament is regulated by Florida Statute 732.502. The statute requires the document to be in writing and executed by you as the person making the Will (subject to certain limited exceptions) and must be signed in the presence of two witnesses. In order to be a self-proving Will (a Will which is easier to submit to the courts), a Notary Public should attest to both the signatures of the witnesses and your signature as the person making the Will. Living Will A Living Will is sometimes also referred to as an Advance Directive. It is a legal document that provides your personal written instructions regarding acceptable medical treatments if you are unable to otherwise communicate your intentions at the time of medical need. These instructions can include considerations such as whether or not you wish to be kept alive by artificial means

READ MORE

LESSONS IN LIABILITY – Shareholder Liability

This is the second article in Legalstandard.com’s new series entitled “LESSONS IN LIABLITY – HOW FLORIDA BUSINESSES CAN AVOID COSTLY LAWSUITS.” LegalStandard.com’s LESSONS IN LIABILITY series is designed to promote LegalStandard.com’s goal of keeping its clients “in compliance and out of the courtroom.” This article will discuss potential liability to shareholders of Florida corporations. Generally, under Florida law, shareholders have no liability to the corporation, its employees, or its creditors. Obviously, this is the major reason why Florida small business owners incorporate their businesses. However, this protection is not absolute and is often misunderstood by shareholders of Florida’s closely-held corporations. For example, a very common pitfall is personal liability through a personal guaranty signed in connection with a corporation’s account vendor, franchisor or a commercial lease. Additionally, shareholders may be personally liable for certain torts and statutory violations. This article will examine a few of these sources of potential personal liability. PIERCING THE CORPORATE VEIL Shareholders of Florida corporations should be aware that Florida courts recognize a legal doctrine called “piercing the corporate veil.” Under this common law doctrine, Florida courts will disregard the corporate form and impute the liabilities of the corporation as liabilities of the shareholder. While Florida courts are generally reluctant to pierce the corporate veil, some Florida courts have allowed a corporation’s creditor to pierce the corporation veil and tax the corporation’s shareholders with personal responsibly for the corporation’s debts. Notably, creditors have successfully pierced the corporate veil when the creditor has been able to prove the shareholder has used the corporate form for an “improper purpose.” See Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114 (Fla. 1984). More specifically, if a creditor can prove the following bad faith elements, the shareholder may be personally liable for the corporation’s debts: (1) the shareholder dominated and

READ MORE

LESSONS IN LIABILITY – Contract Liability

This is the first article of a new series from LegalStandard.com entitled “LESSONS IN LIABILITY – HOW FLORIDA BUSINESSES CAN AVOID COSTLY LAWSUITS.” This series is designed to promote LegalStandard.com’s goal of keeping its clients “in compliance and out of the courtroom.” Even though America’s judicial system is the most advanced in the world, very rarely is a civil lawsuit a smart financial investment for a small to mid-sized business due to the extreme legal costs and time constraints associated with prosecuting or defending a lawsuit. The first area of potential liability every business faces in Florida is contract liability. Contracts are essential to business and form the backbone of any successful business relationship. Regardless of whether agreements are sealed by a handshake or a twenty-page written contract, business agreements allow the parties to operate with a level of certainty regarding what they can expect from their owners, employees, suppliers, customers and anyone else they have a contract with. Unfortunately, contracts also provide the potential for significant liability if they are found to be unenforceable of if you knowingly, or worse, unknowingly breach a contract without understanding the consequences of your actions. Many contracts also include choice of law, venue selection and attorney fee shifting clauses that can substantially limit your ability to litigate a breach of contract claim. These types of clauses can make the potential liability for contract breaches even more severe and, potentially, devastating for a small business. Contracts in General To form a contract in Florida, there needs to be: (1) an offer to do or not do something in the future; (2) consideration provided in exchange for the performance of the other party (consideration must have some sort of value and cannot be a gift); and (3) verbal or written acceptance of the proposed terms

READ MORE

Update – Franchisor Liability as Joint-Employer

As recent as April of this year, the Department of Labor (DOL) issued an opinion on what constitutes Joint Employer infractions. There a four relevant factors to consider when presented with a Joint-Employer issue according to this Notice of Proposed Rule-Making: The extent to which the franchisor has the ability to hire and/or terminate the employee, The amount of control the franchisor exercises over the employee’s schedule and conditions under which the employee works, If the franchisor determines how much the franchisee is paid and how often, and Where and by whom the employee files are kept. The DOL believes this to be probative to the actual issues courts are presented: what is the actual involvement of the Franchisor in the Franchisee’s employment practices and thus what is their liability in the employment of their individual agents? This proposed rule creates clearer guidance on topics including if Franchisor-provided training materials not being enough to create a joint-employer situation. Should this rule be adopted, it would not carry the weight of law, but would provide guidance to the interpretation of the FLSA and joint-employer issues. If you are considering franchising, be proactive about understanding your joint-employer liability and contact LegalStandard.com today to get your answers. You can contact us at (800) 670-8051 or email us your inquiry to Support@LegalStandard.com . In case you missed it: Franchisor Liability As a Joint-Employer Franchisors have a valid interest in protecting the brand they have worked hard to create. they accomplish this by requiring uniformity from their franchisees and exercising control over certain aspects of their franchisees’ operations. This includes control over the location and look of their franchisees’ places of business, the products and services offered by their franchisees and how intellectual property is utilized and protected by their franchisees. Franchisors also exercise control

READ MORE

Concerns Over Franchisors’ Use of Surveillance Video

Franchisors have utilized technology for many years to build and maintain their brands. Franchisors have used point-of-sale technology to track their customers’ buying trends, banking technology to streamline their franchisees’ payment of royalties, and social media to maximize their marketing efforts.  Most, if not all, of these uses have proven to be successful and have benefitted everyone in the franchise system, including the franchisor, franchisees and their customers.  However, a recent trend of using video surveillance is causing some to ask whether franchisors are going too far. Specifically, franchisors in recent years have started requesting that surveillance cameras be installed in their franchisees’ places of business so they can monitor the actions of employees and customers.  While there are certain potential benefits that can be derived from this use of surveillance, there are also many concerns that should be considered and addressed before any surveillance plan is implemented. Basis for Surveillance Requests Franchisors are making these requests for surveillance pursuant to provisions commonly found in franchise agreements that require the franchisees to conduct their business in accordance with the then-current standards set forth by the franchisor.  These standards are usually found in the operations manual that can modified as often as the franchisor deems necessary.  These provisions allow for franchisors to continually improve their brand and the operations of their franchisees while maintaining the necessary continuity between locations. These provisions are, or should be, concerning to franchisees because they are requiring compliance with standards that are unknown to the franchisee at the time the franchise agreement is executed.  Franchisees commonly oppose new requirements to the extent they constitute material changes and/or are costly to implement.  However, these provisions are generally enforceable to the extent the franchisor can demonstrate a reasonable basis for the new standard and the change furthers a

READ MORE

Intellectual Property Disputes Between Employers and Employees

The creation and development of intellectual property can be an exciting and profitable process.  Unfortunately, disputes often arise regarding the ownership of intellectual property when the intellectual property is created while the inventor is employed by someone else.  Intellectual property can be extremely valuable and, in this situation, both the employee and employer can have an expectation of ownership. The general or default rule is that employers own the intellectual property created by their employees during the scope of their employment, while the employees own the intellectual property created outside of the scope of their employment, even if these creations were created during the time of employment.  As with most “general” or “default” rules, there are exceptions and numerous factors that must be considered in determining ownership. The most important factor that must be considered regarding intellectual property ownership is the type of intellectual property at issue. Copyrights:  Pursuant to the federal Copyright Act, ownership of a copyright initially vests with the author unless the work falls within the statutory definition of a “work made for hire.”  A “work made for hire” automatically is owned by the employer.  If a copyright does not qualify as a “work made for hire,” an employer must obtain a written assignment signed by the author to acquire legal ownership. Trademark:  Trademark ownership is dependent upon who first uses the mark pursuant to federal law.  Conception without use does not establish an ownership right.  If a trademark is created during the course of employment, the employer must still establish that it was the first to use the mark to identify its goods or services, or that an employee’s use of the mark is on behalf of or for the benefit of the employer.  Common law trademarks may arise by usage in commerce, but ownership may

READ MORE

Franchisor Liability As a Joint-Employer

Franchisors have a valid interest in protecting the brand they have worked hard to create. they accomplish this by requiring uniformity from their franchisees and exercising control over certain aspects of their franchisees’ operations. This includes control over the location and look of their franchisees’ places of business, the products and services offered by their franchisees and how intellectual property is utilized and protected by their franchisees. Franchisors also exercise control over their franchisees’ “employees by dictating minimum employment standards, the type of training that is required for employees and the clothing or uniforms employees must wear. Unfortunately, this control over their franchisees’ employees can sometimes create liability for franchisors when employees sue the franchisees for violations of Title VII, the Fair Labor Standards Act or other labor laws. It is becoming increasingly common that employees are also suing the franchisor claiming the franchisor is liable because they acted as a joint-employer based upon the amount of control they exercised over their franchisees’ employees. This joint-employer claim creates a second, deep pocket for them to pursue. Background of Joint-Employer Liability The current standard for determining whether an individual or entity is a joint-employer was set forth in the National Labor Relations Board (the “NLRB”)’s 2015 decision in the Browning-Ferris Industries matter. Specifically, the NLRB held the primary inquiry for determining joint-employer status is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees, regardless of whether the control is in fact ever exercised. In December 2017, the NLRB established a more employer-friendly standard in the Hy-Brand Industrial Contractors, Ltd. matter that required the purported joint-employer to actually exercise joint control over essential employment terms, rather than just reserving the right to exercise such control. This control had to be “direct and immediate”

READ MORE

Employee Handbook Prep 101

Employment Handbooks for Small Businesses (less than 50 Employees) An employment handbook – if done right, provides a small businesswith legal protections and can be used to demonstrate legal compliance. Without an employment handbook, a small business misses legal protections and opens itself to liability and legal expenses (even for frivolous claims) that far exceed the time and costs associated with ensuring a well-drafted employment handbook is in place. A well-drafted handbook means the handbook is current with laws and legal protections, which constantly evolve with new laws and court decisions.   Are Employment Handbooks Legally Required for Small Businesses? There may not be a law that expressly states that a small business (or large business for that matter) is legally required to have an employment handbook, but without an employment handbook – there may be a presumption that your company is not in legal compliance. And, worst yet, your small business is missing out on legal protections and the right to enforce your lawful rights and expectations with regard to employees. So, the better question is the following: Is your small company in a much better position (legal or business) with an employment handbook? Yes…if done right! Here’s a simple example. If a disgruntled employee threatens to sue your small business for being wrongfully terminated – having employment handbook policy expectations in place and showing the employee failed to meet such written handbook expectations – can stop a potential lawsuit in its tracks. Beyond the legal issues, an employment handbook also helps employees understand your company expectations and policies, which is a great tool for a better workforce. What’s Addressed in the Employment Handbook? It depends on your business. Generally speaking, an employment handbook summarizes employment rules, policies, and expectations of the small business and addresses many legal compliance

READ MORE

Papa John’s–Franchise Lessons To Be Learned

By now everyone has heard about the public feud between Papa John’s Pizza and the company’s famous founder and former CEO and Chairman, John Schnatter. The problems started in November 2017 when Schnatter blamed the NFL and how it was handling the players’ National Anthem protests for declining pizza sales. Two months later Schnatter voluntarily stepped down as CEO, but remained as the company’s Chairman. Then in May 2018, Schnatter reportedly used a racial slur during a conference call which resulted in Schnatter stepping down as Chairman. In July 2018, Papa John’s announced it was removing Schnatter and his likeness from all marketing efforts, including commercials, pizza boxes and the company’s logo. That same month, Papa John’s evicted Schnatter from the company’s headquarters and requested that he stop making any media appearances on behalf of the company. In response, Schnatter stated that he regretted resigning as CEO in 2017 and that his alleged racial slur was taken out of context. Schnatter further stated that Papa John’s new management was trying to push him out of the company and he sued Papa John’s to obtain documents relating to his ousting. Schnatter then took out a full-page ad in the company’s hometown newspaper in Louisville, Kentucky, directing employees to a website he launched called savepapajohns.com where he criticized the company’s new leadership. Schnatter wrote on his website that “the Board wants to silence me…so this is my website and my way to talk to you.” He added “Papa John’s is our life work and we will all get through this together somehow, some way.” Schnatter even posted many of the legal documents from his legal fight with the company on his site. Schnatter claims that employees and they accomplish this by requiring uniformity from their franchisees are rallying around him. However, other

READ MORE

Waning Support for Non-Compete Agreements in Florida?

The State of Florida has been a longstanding proponent of noncompete agreements. In 1996 the Florida legislature enacted the current non-compete statute, 542.335 Florida Statutes, which governs all noncompete agreements entered into after July 1, 1996. Due to some of the extreme provisions in this statute, Florida is considered to be one of the most “employer-friendly” states in the country. Florida’s statute expressly provides that noncompete agreements will be enforced as long as “such contracts are reasonable in time, area, and line of business,” and the employer is able to prove “the existence of one or more legitimate business interests justifying the restrictive covenant” and the “contractually specified restraint is reasonably necessary to protect the legitimate interest.” While these provisions are common and reasonable, the statute also includes more extreme provisions that are, without question, designed to protect employers. Specifically, the statute precludes a court from considering any “individualized economic hardship that might be caused to the person against whom enforcement is sought.” Additionally, the statute precludes any contract provision that “requires the court to construe a restrictive covenant narrowly, against the restraint or the drafter of the contract.” Criticism of Florida’s Noncompete Statute by Other States While Florida is considered to be very “employer-friendly,” other states such as California, Illinois and New York are on the other side of the spectrum and are considered to be very “pro-employee.” In fact, noncompete agreements are actually precluded in California except when they are executed in connection with the sale of a business. Courts in these states, as well as Alabama and Georgia, have been especially critical of the more extreme provisions in Florida’s noncompete statute. Courts in these states have gone as far as refusing to enforce choice of law provisions in employment contracts that require the application of Florida law

READ MORE