Is It Time to Revise Severance Agreements and Employee Handbooks?

Is It Time to Revise Severance Agreements and Employee Handbooks?

The National Labor Relations Board (“NLRB”) returned to a longstanding precedent recently by holding that employers violate the National Labor Relations Act if they offer employees severance agreements that require employees to broadly waive their rights under the Act. This holding means that employers who use severance agreements should review them to make sure that the usual provisions that broadly require non-disparagement (the employee will not say anything negative about the employer, their products, etc.) and confidentiality are not overly broad. Employers should review their employee handbooks to check for similar overbreadth.

The severance agreement at issue in the case of McClaren Macomb contained overly broad non-disparagement and confidentiality clauses that the Board said tended to interfere with, restrain or coerce employees’ exercise of the Section 7 rights. Under Section 7, non-managerial and non-supervisor employees have the right to engage in concerted activity for mutual aid or protection. The Board held that non-disclosure provisions that contain a non-disparagement clause that advised the employees that they are prohibited from making statements that could disparage or harm the image of the employer and their officers, directors, employees, agents and representatives are unlawful. In addition, the confidentiality clause at issue advised employees that they are prohibited from disclosing the terms of the agreement to anyone except for a spouse or professional advisor, unless compelled by law to do so.

The ruling means that although severance agreements are not banned, they may need to be modified. Employers who use severance agreements should consider revising them to narrow the scope of non-disparagement and confidentiality provisions so that they pass muster under the Act. The general counsel for the NLRB has recently written that confidentiality clauses that are narrowly-tailored to restrict the dissemination of proprietary or trade secret information for a period of time based on legitimate business justifications may be lawful. However, confidentiality clauses that have a chilling effect that precludes employees from assisting others about workplace issues or from communicating with the NLRB, a union, legal forums, the media or other third parties are likely unlawful.

In Conclusion, What should the astute employer do in light of the most recent NLRB ruling? It is not necessary to abandon severance agreements altogether. Rather, an employer should review their severance agreement forms and employee handbooks to make sure that the provisions relating to confidentiality and non-disparagement are consistent with the new rulings of the NLRB.

Please contact one of our experienced employment attorneys for additional assistance in reviewing your policies.

Is Joint Representation a Good Idea?

Is Joint Representation a Good Idea?

It is common for a group of people to want one attorney to represent them all in a legal matter. Whether it is a married couple looking for estate planning representation or if it is two people who own a property together and are both looking to evict a tenant or sell the property.

Attorneys can be expensive, so from an economic standpoint, it can be financially beneficial to have one attorney rather than paying two or more attorneys to work with you.

This may seem like a great idea, but for an attorney, it may cause some tricky ethical problems. Attorneys are inclined to zealously advocate for their clients. This can be difficult when there is more than one client involved. If the individuals that are being represented by one attorney, do not agree on the right way forward there can be issues. The individuals may even decide they want different things throughout the process.

In this scenario, you can expect the attorney to request to be allowed to withdraw as counsel because the attorney will not be able to take any action when it is against what one of the clients wants. If client “A” wants to dismiss the case, but client “B” wants to keep going, the attorney will not be able to do either action without going against one of their wishes and will need to withdraw.

Another issue for people considering joint representation is that the attorney-client privilege applies to the group of clients. That means if there is anything client “A” is trying to keep secret from the client “B”, the Attorney will be allowed to tell client “B.” Moreover, the attorney likely has to tell client “B” in order to protect client “B’s” interest in the matter.

If you are considering having one attorney represent you and another person or other people, be sure you have thought about what happens if you all disagree. You may save money if things go as planned. But, you may still have to hire a separate attorney to represent you, if complications arise between you and the other clients.

If you find yourself in this situation, please contact one of our experienced attorneys.

U.S. Supreme Court Votes Unanimously On Tax Lien Case

U.S. Supreme Court Votes Unanimously On Tax Lien Case

There are many cases decided by the U.S. Supreme Court that receive scant attention from the public. Despite ideological divisions among the justices, it is not uncommon for the Court to vote 9-0 in case. In the case of Tyler v. Hennepin County, Minnesota, the Court issued a unanimous decision concerning the constitutionality of a tax lien foreclosure.

Geraldine Tyler owed $15,000 in unpaid real estate taxes on a condominium she owned in Hennepin County, Minnesota. The County seized the condomin and sold it for $40,000, keeping the $25,000 excess over what Tyler owed in unpaid taxes. Tyler argued the windfall to the County was unconstitutional in violation of the Takings Clause of the Fifth Amendment. The Takings Clause provides that “private property [shall not] be taken for public use, without just compensation.” U. S. Const., Amdt. 5. The question the Court concerned itself with was whether the surplus funds from the sale of the condominium are protected from uncompensated appropriation by the County. The Court’s analysis provided a history lesson in our English common law roots:

Parliament gave the Crown the power to seize and sell a taxpayer’s property to recover a tax debt, but dictated that any “Overplus” from the sale “be immediately restored to the Owner.” 4 W. & M., ch. 1, §12, in 3 Eng. Stat. at Large 488–489 (1692). As Blackstone explained, the common law demanded the same: If a tax collector seized a taxpayer’s property, he was “bound by an implied contract in law to restore [the property] on payment of the debt, duty, and expenses, before the time of sale; or, when sold, to render back the overplus.” 2 Commentaries on the Laws of England 453 (1771).

Ultimately, the Court held that “Tyler has plausibly alleged a taking under the Fifth Amendment,” reasoning that a “taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc [treasury] than she owed.” Wisconsin’s law on foreclosure of tax liens, Wis. Stat. § 75.521, is similar to the law that was challenged in Tyler. While the Wisconsin law is still on the books, a challenge to its constitutionality seems inevitable.

If you have any questions about tax liens or foreclosures, please discuss it with one of our experienced real estate or tax attorneys.

What is a Guardian Ad Litem?

What is a Guardian Ad Litem?

A Guardian ad litem (GAL) is an attorney who is appointed by the Court to represent the best interests of a minor child. If the parties are represented by counsel, the attorneys often give their recommendation to the Court about who they think would be a good fit as GAL. The GAL is required to have had specific training and/or extensive experience in order to qualify. The Wisconsin State Bar has regular basic trainings for GALs with other more advanced trainings for things such as investigating domestic violence. Some Wisconsin counties keep attorneys on contract throughout the year to serve as GALs in cases.

An important distinction to make is that the GAL does not represent the minor child. Only the minor
child’s “best interests.” The main difference here is that a GAL is not bound to do what the minor child
asks them to do. By contract, an advocate attorney is more bound to do what their client asks them to. See Wis. Stat. § 767.407(4) for more information on this. Instead, the wishes of the minor child are one of the factors that a GAL takes into account when making their recommendation to the Court.

When a GAL is appointed, the parties may be ordered to pay a deposit toward the GAL’s fees. It is
typical for both parties to be responsible for paying one-half of the fees. Different counties
require different down payments and allow GALs to charge different rates.Once the GAL is appointed and any required deposits are paid, they will begin theirinvestigation. They mostly focus on custody and placement issues. They will likely want tospeak with any lawyers on the case, both parties individually, the minor child and other people who have relevant information (i.e., teachers, day care providers, relatives, medical and other treatmentproviders, or child welfare agencies). The GAL may see a need for further professionals to get involvedand conduct investigations such as custody studies or psychological evaluations. Additionally, GALs arerequired by law to investigate and report to the Court if there is any evidence of domestic abuse.

The GAL will prepare an official report to the Court which outlines their recommendation, taking
into consideration any and all evidence of the issues that they believe would be used at a potential trial.

They will include a proposed placement schedule that is in the best interests of the child. The GAL may participate in any depositions or contested hearings which involve custody and placement. They can cross-examine the parties’ witnesses and even call their own witnesses to introduce evidence to the Court.

If a GAL has been appointed to your case, you will want to cooperate with their investigation. If you have an attorney, you will want your attorney to communicate regularly with the GAL to make sure they have everything they need to determine what is in the best interest of the minor child.

The Coporate Transparency Act Implications for Small Businesses

The Coporate Transparency Act Implications for Small Businesses

Do you own a small business? Are you a member of an LLC or a shareholder in a closely held company? (A closely held company has a limited number of shareholders and is often a private company that does not trade publicly). If so, you should be aware of the Corporate Transparency Act (CTA). This law was passed by Congress on January 1, 2021, because, according to the legislative history, “malign actors seek to conceal their ownership of corporations, limited liability companies, or other similar entities in the United States to facilitate illicit activity, including money laundering, the financing of terrorism, proliferation financing, serious tax fraud, human and drug trafficking, counterfeiting, piracy, securities fraud, financial fraud, and acts of foreign corruption, harming the national security interests of the United States and allies of the United States.”

The CTA requires the Financial Crimes Enforcement Network (FinCEN), an agency of the U.S. Department of the Treasury, to establish and maintain a database of beneficial owners of entities in the United States. Final regulations were issued on September 30, 2022, and the law will take effect on January 1, 2024. The law provides 23 exemptions from the new reporting requirements, mostly for already heavily regulated companies such as banks, insurance companies, publicly traded companies and credit unions. Typical charitable organizations that qualify under 501(c) of the Internal Revenue Code are also exempt. Most other entities, whether foreign or domestic, will need to report certain information about the beneficial owners and applicants of the entity unless they have at least 20 full-time employees, filed a United States income tax return in the previous year demonstrating $5 million in gross receipts or sales, and has an operating presence with a physical office within the United States.

For those entities that are not exempt, they will need to file applicable reports that include information about the person who formed the entity (known as the “applicant”) and each “beneficial owner” of the entity. A beneficial owner is someone who exercises substantial control over the entity or owns or controls not less than 25 percent of the ownership interest of the entity. By statute, minors, nominees (e.g. custodians), employees acting on behalf of a company, future owners through inheritance, and creditors are exempt from being listed as beneficial owners. The reporting company must report the full legal name, date of birth, current residential or business street address, and a unique identifying number with a copy of the underlying document (e.g. driver’s license number and copy of the driver’s license) for each beneficial owner and applicant. Alternatively, individuals may submit the required information directly to FinCEN and be issued a unique FinCEN identifier that can be used by the reporting company to identify the person.

Reporting requirements start January 1, 2024. Please make an appointment with one of our experienced business attorneys for any questions you have about whether your closely held business entity must report under the CTA.

For more information on this please follow this link. https://www.americanbar.org/groups/taxation/publications/abataxtimes_home/23win/23win-prp-graff-cta/

More Protections for Pregnant Workers

More Protections for Pregnant Workers

If you are an employer with pregnant employees, employees returning from parental leave, or employees who have had a child in the last two years, then please read on.

Effective on December 29, 2022, the Providing Urgent Maternal Protections for Nursing Mothers Act (also known as the “PUMP Act”) expanded protections for breastfeeding mothers. Effective in June 2023, the Pregnant Workers Fairness Act (“PWFA”) will provide new protections for pregnant employees.

The PWFA is a new law that requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship. The PWFA only applies to accommodations. Existing laws enforced by the Equal Employment Opportunity Commission (“EEOC”) and the Wisconsin Department of Workforce Development (“DWD”) already make it Illegal to fire or otherwise discriminate against workers on the basis of pregnancy, childbirth or related medical conditions.

The PWFA goes in to effect on June 27, 2023. Before then, the EEOC is required to issue regulations to carry out the law. This act requires employers to provide a temporary reasonable accommodation to workers with medical conditions related to pregnancy or childbirth, barring an undue hardship to the employer. Many lawmakers believe that the new law will close a gap, because present laws do not necessarily recognize pregnancy alone as a disability entitled to accommodations under the Americans with Disabilities Act (“ADA”). The act applies to employers with 15 or more employees.

The legislation is an attempt to provide “common-sense protections for pregnant workers, like extra bathroom breaks or a stool for workers who stand, so they can continue working while not putting extra strain ”on their bodies, said Sen. Bob Casey, D-Pa.

Under the PWFA Employers Cannot:

  • Require an employee to accept an accommodation without a discussion about the accommodation between the employee and the employer.
  • Deny a job or other employment opportunities to a qualified employee or applicant based on the person’s need for reasonable accommodations.
  • Require an employee to take leave if another reasonable accommodation can be provided that would let the employee keep working.
  • Retaliate against an individual for reporting or opposing unlawful discrimination under the PWFA or participating in a PWFA proceeding such as an investigation.
  • Interfere with any individual’s rights under the PWFA.

The PUMP Act expands workplace lactation accommodations to exempt (salaried) workers. It is effective immediately for companies with more than 50 Employees nationwide. The Affordable Care Act of 2010 requires that employers provide a reasonable time to express breastmilk, but it applies only to hourly employees.
Here are the primary features of the PUMP Act:

  • Applies to all employees—exempt and non-exempt—with the exception of certain airline employees.
  • Reasonable pumping breaks must be provided to breastfeeding employees for two years after a child’s birth.
  • An employer is not required to compensate non-exempt employees for pumping breaks as long as such employees are relieved of all work during that break. If the employee is not completely relieved of work duties during the entirety of the pump break, then the time must be compensated.
  • The location for pumping breaks must be somewhere other than a bathroom and must be private and free from intrusion.
  • If an employee believes her employer is violating the PUMP Act, the employee must provide notice and allow the employer ten days to Remedy the matter.

What does all of this mean for employers?
Now is the time for employers to take the following actions:

  • Updating existing personnel policies.
  • Train managers on the changes under the new laws.
  • Create a process, similar to the ADA, to create interactive dialogues for pregnancy-related limitations.

The PWFA and the PUMP Act expand the rights available to pregnant workers but use the guidance of present laws as a way to promote compliance by employers. Employers should review the new laws to ensure that they are integrating the new laws into their handbooks. If you have any questions about these new acts please call our office to speak with our experienced employment law attorney.