Vince Roldan’s article published on Law360 discusses two cases analyzing a trustee’s standing to pursue avoidance actions where creditors had been paid in full: Adelphia Recovery Trust v. Bank of America NA, 390 B.R. 80 (S.D.N.Y. 2008) and MC Asset Recovery LLC v. Commerzbank A.G., (In Re Mirant Corp.) (5th Cir. March 20, 2012). Roldan concludes that despite reaching different holdings, the two cases are reconcilable.
The full article can be accessed here.
Associate Jelena Darling recently wrote an article addressing the impact of ICANN’s “New gTLD Program” on brand owners’ trademark enforcement efforts. Darling argues that given the high costs of maintaining a gTLD registry and the impossibility of registering every potentially infringing gTLD, brand owners should resist filing applications to the Program and instead focus on ex post enforcement efforts.
Article can be found here.
Vince Roldan’s recent article published in Law360 discusses two bankruptcy cases, In re JER/Jameson Mezz Borrower II, 461 B.R. 293 (Bankr. D. Del. 2011),and In re General Growth Properties Inc., 409 B.R. 193 (Bankr. S.D.N.Y. 2009), which reinforce the importance of careful planning in Chapter 11 bankruptcy filing. In re General Growth encourages the filing of a Chapter 11 petition sooner rather than later, and In re JER reveals the risk and possible consequence of filing too late.
Full article available here.
A common misconception among non-union Employers is that they do not have to worry about or pay attention to the federal law known as the National Labor Relations Act (“NLRA”). This perception-that the NLRA only governs union-management interaction-is inaccurate, since the NLRA covers “Employers” engaged in interstate commerce, regardless of whether they are unionized, or the subject of a union organizing campaign.
More importantly, the NLRA protects employees-even employees who are not unionized-when the employees engage in “protected, concerted activity.” A simple definition of protected, concerted activity would be when two or more employees act together to improve their wages, hours or other terms and conditions of employment. The conduct of one employee can also be deemed both “protected” and “concerted” when the employee is acting on the authority of other employees, bringing group complaints to the employer’s attention, trying to induce group action, or seeking to prepare for group action.
The fact that non-union employees have rights under and are protected by the National Labor Relations Act will gain additional traction in the coming weeks and months. In late 2010, the National Labor Relations Board (“NLRB”), the federal agency responsible for enforcing the NLRA, issued a rule requiring employers to post notices informing employees of their rights under the NLRA. Despite a prolonged comment period, and litigation seeking to derail this rule, the rule is now set to go into effect on Monday April 30, 2012.
What does this new rule require? A summary of the more significant requirements is set forth below. All requirements, as well as the poster itself, can be found on the NLRB’s website.
1. All Employers “subject to the NLRA” are required to post this notice. Generally, the NLRB asserts jurisdiction over any Employer in the retail industry that has a gross annual volume of business of more than $500,000. With non-retail companies, the NLRB will exercise jurisdiction if the amount of goods sold or services provided out of state, or the amount of goods or services purchased from out of state, exceeds $50,000.
2. The Notice to be posted must be at least 11 x 17, and must be placed in conspicuous places where notices to employees concerning personnel rules or policies are customarily posted.
3. The Notice can be printed in English, but if 20% or more of the workforce does not speak English, the Notice must also be posted in the language spoken by those employees.
4. The Notice must also be posted electronically, on a company internet or intranet site, if the company customarily communicates with its employees regarding personnel rules and policies in that manner. The same rule for non-English speaking employees applies to electronic postings as well.
5. The Notice must inform employees of their rights under the NLRA. The rule describes this as including:
a. The right to organize a union to negotiate with the employer regarding wages, hours and other terms and conditions of employment
b. Form, join or assist a union
c. Bargain collectively through a chosen representative
d. Discuss wages, benefits and other terms and conditions of employment, or union organizing, with co-employees
e. Take action with one or more co-workers to improve wages, hours or working conditions
f. Strike and picket
g. Choose not to engage in any of these activities
6. The Notice must also inform employees about conduct taken by an Employer that would be deemed illegal, including:
a. Prohibiting employees from talking about or soliciting on behalf of a union during non-work time
b. Prohibiting employees from distributing union literature during non-work time, in non-work areas
c. Questioning employees about union support or activities in a manner that discourages employees from engaging in that activity
d. Take adverse action against an employee who joins or supports a union, engages in protected, concerted activity, or chooses not to join a union
e. Threaten to close a workplace if the employees join a union
f. Promise benefits or pay to encourage or discourage union support
g. Spy on or videotape peaceful union activities
This new rule has the potential to be a game-changer, in many respects. It was promulgated, according to the NLRB, due to a perception that employees, union and non-union alike, where unaware of their rights. In the non-union setting, this new rule may spark union organizational activity, particularly in geographic areas and workplace settings where it had been quiet or dormant in recent years. More importantly, it will provide likely invigorate non-union employees to take a more active role, both directly with their colleagues, and more openly on social media sites, opposing Employer rules, requirements and policies, including policies relating to compensation and benefits.
- Chris D’Angelo
In Episcopal Health Services Inc. v. Kurron Shares of America Inc., the New York State Appellate Division, First Department unanimously affirmed the lower court’s decision denying a petition to stay arbitration. Randy Sellier successfully argued that the arbitration clause was severable from the alleged invalid agreement, and thus enforceable, and that the validity of the agreement was a question for the arbitrator.
On February 8, partners Al Feliu and Chris D’Angelo spoke before the Entertainment, Arts & Sports Committee of the New York State Society of CPAs. The topic was entitled “Employment Law Issues In Connection With The Termination Of An Executive’s Employment.”
An important decision by the New York State Appellate Division, First Department, adopted a strict federal standard for the preservation of evidence and affirmed a significant sanction on a party which did not adhere to that standard. This decision affects anyone who does business in New York.
The First Department, which governs the county of Manhattan, held that a party which “reasonably anticipates litigation” must “suspend its routine document retention/destruction policy and put in place a litigation hold to ensure the preservation of documents”. Voom HD Holdings v. EchoStar Satellite LLC, 600292/08, 2010 NY Slip Op. 00658 (1st Dep’t January 31, 2012)(citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003).
In that case, EchoStar sent Voom a notice of breach of contract in June 2007, which Voom disputed. Over the next eight months, the parties unsuccessfully tried to negotiate a solution and EchoStar sent another two letters claiming that Voom had breached the contract.
The First Department held that EchoStar should have “reasonably anticipated litigation” when it sent Voom the first notice of breach letter in June 2007, even though litigation did not commence until February 2008. EchoStar did not preserve critical pre-litigation emails from 2007 and did not turn off its automatic deletion function until after the litigation began. These failures led to severe penalties imposed at trial.
Corporate counsel and management should be aware of this decision and issue a “litigation hold” when litigation is conceivably on the horizon. Waiting until the receipt of a summons to preserve data could be a costly mistake.
Partner Monica McCabe was honored today at a luncheon for New York State attorneys dedicating at least 50 hours a year to pro bono legal service.
Al Feliu, co-founder of Vandenberg & Feliu, recently wrote an article for the New York Law Journal on mentoring opportunities available for young lawyers through the Labor and Employment Law Section of the New York State Bar Association, of which Al is the Chair. A new mentoring program will be launched at the Section’s annual meeting on January 27, 2012, which will complement its New Lawyers Committee and Diversity Fellows Program.
The full article can be found here.
In a case raising novel legal questions about the nature of ownership on social networks, V&F won a partial motion to dismiss on behalf of a client whose employer claimed to own the client’s individual LinkedIn account connections post-employment.
Selected coverage in the tech and legal press found here and here.
On December 8, 2011, litigation partners Bob Bernstein and Jeffrey Gross, and associate Debra Levy won a unanimous $60.5 million jury verdict for our client, the Federal Deposit Insurance Corporation, in United States District Court for the District Court of Nevada in Las Vegas. In addition, the jury awarded our client 10 years worth of attorneys fees. The verdict was one of the largest jury verdicts in the FDIC’s history.
The case was originally brought in early 2002 by NetBank FSB, one of the first Internet banks in the United States, based in Atlanta, Georgia, which had purchased a series of subprime equipment lease pools in 1999 and 2000. The lease pools were supposed to be 100% insured against default by Safeco Insurance Company of America, now owned by Liberty Mutual. The subprime lease pools had been issued by Commercial Money Center, Inc. which, under the terms of the transactions, was required to make monthly payments to NetBank for 60 months.
CMC defaulted on the lease pools in December 2001, and Safeco took the position in early 2002 that it had been fraudulently induced by CMC to enter into the CMC lease bond program. NetBank then brought suit against Safeco for breach of contract and breach of fiduciary duty claims.
In September 2007, NetBank failed, the FDIC was appointed as the bank’s receiver, and Mr. Bernstein, who had been representing NetBank in the litigation, was hired to continue the representation on behalf of the FDIC as receiver to the bank.
After an eight day trial, the jury unanimously found in favor of the FDIC on both the breach of contract and breach of fiduciary duty claims, and awarded $60.5 million in compensatory damages plus attorneys fees dating back to the CMC default in December 2001. The jury deadlocked 7-1 on the issue of punitive damages and, as a result, the Court declared a mistrial on that issue only, which means that the issue of punitive damages will be tried before a new jury with all underlying factual issues decided in the FDIC’s favor.
The New York Wage Theft Protection Act (“WTPA”) was enacted in December 2010, with an effective date of April 2011. However, the full impact of the law will only begin to be felt in early 2012, when the requirement that all employees must be provided with annual notice regarding their regular and overtime rates, deductions and allowances, in compliance with the statutory directives, will become effective.
The statute’s name evokes images of the cartoon character Snidely Whiplash greedily rubbing his hands together as he hatches his next plot (in this case, to rob his employees of their hard-earned pay). Dudley Do-Right (who always entered riding his horse backwards) is the New York State legislature, which has determined that the best way to safeguard pay is to impose new and in some cases burdensome notice and record-keeping requirements on businesses in New York State.
The new requirements were initially directed toward new hires, but as of February 1, 2012, all current employees must receive annual notice regarding their regular and overtime rates, deductions and allowances. It is likely that many New York employers will be compelled to draft these notices in more than one language. All New York employers will be required to obtain acknowledgements from their employees that the annual notice was received. Failure to comply with these new notice and record-keeping rules will subject employers to far more stringent fines and penalties than previously set forth in the statute. This post will provide a quick refresher, briefly summarizing the law, its requirements, fines, penalties and damages.
Partner Michael Poster will serve as co-chair of the CMJ Entertainment Business Law Seminar on October 21, 2011 in New York City, which is sponsored by HSBC Private Bank, NYU Law School, Vandenberg & Feliu LLP, Holland & Knight LLP and Prager & Fenton. Full conference schedule and list of speakers can be found here.
This is the premier annual entertainment law event in New York, and Michael has co-chaired this event since 2006. Michael will also serve as moderator for a panel discussion on “Cloud Computing vs. File Sharing.”
The seminar draw attendees from around the region and across the country, ranging from general counsel of major labels and start-up entertainment companies, in-house counsel at trade organizations and private practice lawyers at firms large and small.
In addition, for the first time the seminar will offer CPE credits for accounting professionals and business managers, and will likely draw an even broader range of advisors and professionals from all aspects of the entertainment industry.
Partner Monica McCabe was named one of AVENUE magazine’s “Legal Elite” in the publication’s annual list of top lawyers in New York City. The listing appears in the October 2011 print issue of AVENUE and an excerpt can be found here. For a full listing, visit AVENUEinsider.
The September / October 2011 issue of German American Trade magazine features an article by partner John Ohman discussing copyright and trademark law in the United States from a business perspective. The full article can be found here.
Recent and forthcoming events, publications, speaking engagements, and discussion of legal developments by the attorneys of Vandenberg & Feliu, LLP.
