Blog with ARD&H

Legal Drama

2012-01-24T10:22:00.001-05:00

It’s a New Year with new seasons of our favorite TV shows. Too bad the legal dramas haven’t resolved to use realism in their scripts.

The Good Wife just gets worse and worse. In one episode, a divorce lawyer framed a client’s husband to look like he was cheating. If that weren’t enough, the firm lied about having a copy of a signed document from the divorce case. After a frantic search, the lead divorce attorney surprised the rest of the firm by magically producing the document in the 11th hour to present to opposing counsel.

In the following week’s episode, the law firm took tens of thousands of dollars in fees…by cashier’s check rather than cash. Any lawyer knows that the cashier’s check is the equivalent of cash and must be reported.

We then have the client who is being hounded for representing an unknown business owner and refusing to tell our heroes who his client is. He bases this refusal on attorney-client privilege. Of course, he has the same privilege with his lawyers and they could not have revealed the information. AND, as it turns out, he was lying. He actually was one of the three clients.

As usual, they make the judge look like a jerk.

Then, we have the state’s attorney co-opting a law firm employee to steal information (or the whole file), which she turns it over to the prosecutors. Part of the basis is that “the good wife” forged a signature which is a felony for which she could be disbarred.

Of course, she would have to be prosecuted by her husband. The employee turns over the file to hurt the partner who is being investigated-who actually did nothing wrong, except for introducing a bookie to his judge friends. That’s their problem not his.

If that weren’t enough, this show also makes the federal agents look like jerks and puts them down-primarily for being efficient.

I took a break from blogging about The Good Wife because the drama, in many ways, outweighed the legalities-but no more. Sadly, even the drama parts (i.e. relationships) have gotten silly.

Stay tuned for my next blog about the new TV version of The Firm. Let’s hope it doesn’t disgrace Grisham’s classic legal thriller.

Attention Employers: NLRB postpones effective date...

2012-01-20T08:32:00.001-05:00

The National Labor Relations Board (NLRB) has again postponed the effective date for the “Notification of Employee Rights Under the National Labor Relations Act” (Requirement). The Requirement was originally to become effective on November 14, 2011; however, the effective date was pushed back to January 31, 2012, and again to April 30, 2012 because of ongoing litigation regarding the constitutionality of the Act.

Under the Requirement, the vast majority of employers must conspicuously hang posters in the workplace to notify employees of their rights under the National Labor Relations Act (NLRA). Specifically, these posters provide employees with information about: their rights to organize or join a union, bargain collectively, or discuss wages or other benefits with co-workers, and provide examples of conduct which is illegal for employers and unions to engage in. The purpose of the Requirement is to make employees aware of the protections that may be available to them under the NLRA.

What Should an Employer Do With This Information?

Nothing yet. If the Requirement becomes effective on April 30^th, make sure you hang an 11 x 17 copy of the poster in a place where you customarily post notices to employees and otherwise comply with the Requirement.

Even if the court strikes down the Requirement, you should review your employee handbook or employment practices to ensure compliance with the NLRA, including creating a social media policy. The NLRB has recently used the NLRA to reinstate employees in several cases in which employees were fired for posting negative comments about their jobs/employers because the posting of such comments was held to be protected activity under the NLRA. Make sure any such policy carefully defines what is and what is not allowed under the NLRA.

What Will Happen to Employers Who Don’t Hang the Poster?

The NLRB does not independently audit workplaces to determine whether employers have complied with the Requirement nor does it initiate enforcement actions against non-compliant employers. However, an employee, union or other person can file an unfair labor practice (ULP) charge against an employer in violation of the Requirement. The NLRB has indicated that it may be willing to give an employer who fails to properly display the poster the benefit of the doubt (and assume that the employer was unaware of the Requirement) provided the employer immediately complies with NLRA. On the other hand, if the NLRB determines that an employer “knowingly and willfully” failed to display the poster, such failure can be considered evidence of an unlawful motive, which may lead to an enforcement action to correct an unfair labor practice. If the employer is found to have committed an unfair labor practice in violation of the NLRA, the employer may be ordered to cease and desist from such unfair labor practice and to take such affirmative action to remedy the unfair labor practice. Remedies may include, paying litigation costs, attorneys’ fees, and union expenses

The notification poster may be downloaded in 26 different languages from http://www.nlrb.gov/poster for free.

How to Stay Off the Naughty List at the Holiday Party

2011-12-15T17:13:00.004-05:00

     Despite the altruistic intentions employers typically have for throwing holiday office parties, the combination of alcohol, coworkers and holiday cheer can have harmful effects on office morale. Rather than providing a venue to thank employees for their contributions and celebrate the season, these parties can end up in tears, misunderstandings, and even worse: lawsuits!

     To set a tone of temperance, remind your employees that normal work rules and standards apply to holiday parties (regardless of whether the party is on or off company property). Send out an office e-mail refreshing everyone’s memories of the importance of good behavior and include a gentle reminder of the office discrimination and harassment policies.

     Here is a top-five list of items to bring to your employees’ attention:

1. Lay off the eggnog (and other spirits of the season). It should go without saying, but it doesn’t. Despite stories around the water cooler of the last year’s holiday foibles, it’s almost inevitable that there is “that guy” who repeats the same mistakes from the year before. Don’t be “that guy”.

     If you’re going to serve alcohol, hold parties outside of the office, thereby shifting the responsibility of serving the alcohol to those with a liquor license and professional bartenders. Also, consider placing a limit on the amount of alcohol served (i.e. provide each guest with a limited number of “drink tickets”.

     Some people lose their inhibitions when they drink. This is not necessarily a bad thing if a drink gives you the courage to sing karaoke; however, sexual harassment by coworkers is at an all-time high at holiday parties. Unless your company has an employer liability lawsuit on its holiday wish list, keep your drinking and comments in moderation.

     Note to Employers: Designate a few managers/supervisors (to refrain from drinking and) to watch for over-consumption/inappropriate behavior. Stop serving alcohol well before the party ends, if there is a bar. Use the money saved on drinks towards a taxi service for your employees. Don’t encourage employees to drink too much (i.e. no drinking games). Also, be sure to serve food and leave out the mistletoe.

     Injuries occurring to employees at the party may be compensable through workers’ compensation and an employer may have liability for injuries caused by an inebriated employee leaving the party.

2. Don’t dress for the party as if you are auditioning for the: “What Not to Wear: Office Holiday Party” episode. Nightclub attire does not an office party attire make. You know how much your co-workers love to gossip so don’t give them anything to talk about. Avoid revealing or overly flashy attire.

     Note to Employers: In reminding employees that “work policies” apply, it might be best to indicate that the office dress code is similarly in effect at the party.

3. Don’t play hooky without a good reason. Even if the party is “optional” it is a good opportunity to make a good (or bad) impression on your coworkers. Don’t skip it if you can help it.

     Note to Employers: It might seem counterintuitive, but make attendance voluntary, not mandatory. This can encourage attendance by making the party seem like a reward rather than a burden; and some people are just not comfortable in these types of settings.

4. Don’t add people to the guest list. Unless an invitation otherwise specifies, office parties are for employees only.

     Note to employers: Consider inviting spouses, significant others or guests: they may help keep potentially unruly employees in check.

5. Don’t stay too long: Although it’s good to be enthusiastic in boosting intra-office morale, your enthusiasm shouldn’t involve closing out the bar! No need to ditch the party within minutes of your arrival, but at the same time, don’t overstay your welcome, especially if you’re overstaying your welcome at the bar!

Voluntary Classification Settlement Program

2011-10-04T09:00:00.002-04:00

The IRS has announced the Voluntary Classification Settlement Program (VCSP) which will allow employers to voluntarily reclassify as employees workers previously classified as independent contractors. An employer can reclassify all of its workers as employees or only certain subsets of workers as employees.

An employer is eligible for the program if the employer:

Has consistently treated the workers as independent contractors;
Has filed all required Forms 1099 for the workers for the previous three years;
Is not currently under audit by the IRS, U.S. Department of Labor, Maryland Department of Labor Licensing and Regulation or other such state agency; however, an employer who was previously audited by such an agency is eligible if the employer complied with the results of the previous audit.

In return for voluntarily reclassifying its workers, the IRS will cap the employer’s employment tax liability at 10 percent of the employment tax liability that would have been due on compensation paid to the workers, but the employer will not be liable for any interest and penalties on the liability; and will not be subject to an employment tax audit with respect to the worker classification of the workers for prior years.

To participate in the VCSP an employer must agree to extend the 3-year period of limitations on assessment of employment taxes for 3 additional years, for periods beginning in the first, second and third calendar years beginning after the date on which the employer has agreed under the VCSP to begin treating the workers as employees.

Adopt an Adult?

2011-06-07T13:47:00.000-04:00

Have you ever thought of adopting an adult for inheritance purposes? This is a question both for lawyers and non-lawyers. Most people are not aware that you can adopt an adult in Maryland. It can be a valuable tool for estate planning and inheritance purposes. Although the overwhelming numbers of adoption proceedings involve minors, Maryland law provides that an individual of any age may be adopted.

There are good reasons to adopt an adult as part of a thoughtful and effective estate plan. First, persons who are adopted, even as adults, are generally treated the same as natural-born children of those who adopt them. An adult who inherits from an unrelated decedent must pay a 10 percent Maryland inheritance tax on the assets inherited.

However, adult adoptees, just like natural-born children, are not subject to the state inheritance tax when inheriting from their adoptive parents. Second, if someone dies intestate (without a Will) and without a spouse, his/her assets will be distributed equally among his children, whether adopted or natural born. Third, an adult adoption virtually ensures that the adoptee will inherit from the adoptee’s adoptive parents, because the likelihood of a successful court challenge to the adoptee’s status is significantly diminished following adoption.

During this past legislative session, the Maryland General Assembly considered legislation to legalize same-sex marriage. If that legislation had been enacted, then (presumably) the same-sex couples would receive the same tax benefits as heterosexual married couples do in Maryland. Upon the death of one partner in a same-sex marriage, if his/her estate was left to a spouse, there would have been no Maryland inheritance tax assessed, as the unlimited marital exemption would apply.

Because the legislation did not pass, the 10 percent Maryland inheritance tax referenced above is still in effect. Therefore, if a partner in a same-sex relationship dies leaving the estate to a partner, the entire estate will be subject to a 10 percent Maryland inheritance tax.

While an adult adoption may make sense in the context of domestic partners who want to insure that their partner inherits, there are other sound reasons for an adult adoption, as in the case of those who are childless but want to take advantage of provisions of a trust made by their parents or grandparents.

One of the goals of Maryland adoption laws, which became effective in 1947, was to give adopted children the same status as natural children. This also applies to adult adoptees. Maryland law now provides that unless a Will clearly indicates otherwise, the use of the word “child, “descendant, “heir” or “issue” or any equivalent term includes an adopted individual, whether the Will was signed before or after the decree of adoption was entered.

Maryland law also provides that the legal effect of an adoption of an individual who is an adult is the same as that of the adoption of a minor. Among other things, that also means that an adult adoptee (as with all adoptees) loses the statutory right, in the absence of a Will, to inherit from his/her birth parents. However, the birth parents still can leave their estate through their Wills to their natural-born child, even when adopted by another.

Until the Maryland legislature approves same sex-marriage, adult adoption is one method to avoid the onerous 10 percent inheritance tax.

A Funny Thing Happened on the Way to the Draft

2011-05-03T08:15:00.005-04:00

As if trying to determine whether the Carolina Panthers should select Heisman Trophy winner Cam Newton with the first pick in the 2011 NFL Draft were not enough!

Last week, with the Draft looming in the background, Federal District Court Judge Susan Richard Nelson granted the NFL Players’ request for a preliminary injunction compelling the League to end the lock-out. Judge Nelson then denied the League’s request that her ruling be stayed. The League immediately appealed, and as the Denver Broncos were preparing to make their second-round selection, it was announced that the Eight Circuit Court of Appeals had issued a temporary stay of Judge Nelson’s ruling, effectively putting the lock-out back in place. If you are confused, you are not alone.

For now, let’s start with the basics. What is an “injunction” and what is a “stay?” Simply put, an injunction is a court order which compels a party to either do something or, alternatively, to stop doing something. In this case, Judge Nelson’s Order compelled the NFL to end the lock-out; but that is not the end of the story. As you may know, any court decision can be appealed. Judge Nelson’s order granting an injunction and compelling the League to end the lock-out is no different and, as expected, the League immediately appealed.

So what happens to football while the case makes its way through the appellate courts? That, sports fans, is where the “stay” comes in. A stay is a court order which preserves the status quo during the course of an appeal. Think of a death penalty case, for example, where the condemned defendant sits in prison (very much alive, with the death sentence stayed) while the appeal is heard. In the case of the lock-out, however, Judge Nelson refused to stay her ruling while the NFL appealed, and for a few short hours the lock-out was lifted.

However, the decision to deny the stay, like any other court order is also appealable. As the Denver Broncos prepared to select UCLA Free Safety Rahim Moore with the 45^th overall selection, we learned that the Eight Circuit Court of Appeals had issued an order granting the League’s request for a temporary stay, thus preserving the status quo of the lock-out.

– At least for now. A ruling on the permanent stay is expected later this week.

David B. Applefeld, Esq.

NFL LABOR STRIKE

2011-03-29T09:20:00.000-04:00

In case you have not heard, there is not an NFL labor strike.

Rather, on March 11, 2011, the “collective bargaining agreement” between NFL owners and the NFL Players' Association (NFLPA) expired, resulting in a “decertification” of the NFL NFLPA and a “lock-out” by owners. In the likely event that your copy of Madden NFL 2011 did not come with a Black’s Law Dictionary, keep reading this Blog to understand what all this means.

“Collective bargaining” is a process by which a group of workers (the players) negotiate with their employer (the NFL owners) with the goal of reaching an agreement or contract which governs their conditions of employment. If an agreement is reached, the parties refer to their contract as a “collective bargaining agreement.”

Employees are often represented in these negotiations by labor organizations such as the NFLPA. Collective bargaining agreements typically last for only a specified duration and, upon expiration, must be re-negotiated. Here, the collective bargaining agreement expired, which means that there is no current contract between the NFL players and owners.

“Decertification” is a process whereby a union stops acting as the bargaining representative for a group of employees (in this case the players), and permits the employees to negotiate with management directly. Theoretically, this forces the employer to negotiate with each employee or player individually, and opens the door for employees to file individual claims against management (i.e. Peyton Manning’s anti-trust suit – a topic for later discussion).

Finally, a “lock-out” is not a strike. In fact, it is just the opposite. A lock-out occurs when an employer closes its business and refuses to allow its employees to come to work until they agree to its terms. A lockout is invoked to put pressure on the employees or their union to accept management’s last offer because employees are not paid during a lock-out. Because the NFL owners have “locked-out” the players, there can be no off-season workouts at the teams’ facilities.

For now, there is no agreement, and NFL fans may have to stick to Madden’s game or turn to college gridiron to get their football fix.

What do Cleveland, Detroit, Jacksonville and Houston have in common?

2011-02-17T11:53:00.000-05:00

If you guessed the weather, you are obviously wrong. No, these four cities hold the distinction of being home to the only current NFL franchises which have never played in a Super Bowl.

According to a lawsuit filed in Dallas last week, however, there is apparently something far worse than being a lifelong Browns’ fan. On Feb. 9, 2011, a federal lawsuit was filed in Dallas on behalf of a group of irate, ticket holding fans who arrived at the “Big Game,” only to discover that the NFL had deemed their temporary seating to be unsafe.

As such, several fans were turned away at the gates and were forced to watch their team compete on television. The claim, which targets the NFL, the Dallas Cowboys and others, alleges breach of contract, fraud and deceptive sales practices, was filed as a class action lawsuit.

A class action lawsuit is a lawsuit brought by one or more named plaintiffs who allege that they have suffered the same injury as that suffered by a large number of other parties who make up the plaintiff class. The purpose of a class action lawsuit is to avoid the time and expense of having multiple lawsuits brought by different people, all with the same claim and a common injury.

Class action lawsuits are divided into phases. Initially, the court determines whether the class should be certified. In doing so, the court must examine several factors such as the size of the potential class, whether the named plaintiffs have made claims which are typical of those possessed by the class and whether the named plaintiffs have suffered a common injury as that alleged to have been suffered by the class.

If the class is certified, the litigation will proceed with the named plaintiffs representing the interests of the class. Plaintiffs in a class action lawsuit may be either individuals or businesses. The cause of the common injury can be from any number of sources, such as a defective product, statutory violations, securities fraud, or, as the Dallas class asserts, the denial of the ability to watch your team win (or lose), the Super Bowl.

Southland

2011-01-27T17:02:00.000-05:00

Straying a bit from legal shows but staying close to the genre, I also try to catch Southland. This “cop” show is well acted and goes through several different plotlines each week covering both uniformed patrol officers and plainclothes detectives.

I was a little disturbed, however, by some issues that were raised in the last episode. One of the patrol officers, a rookie who is a main character and clearly supposed to be a viewer’s favorite, violated all sorts of procedures by contriving a traffic stop to harass and threaten a man who he believed (mistakenly, it turns out) had sexually molested his mother. When the man files a complaint with the precinct commander, the commander obligingly covers up for the patrolman and tells him not to do such a thing again.

In the same episode, the patrolman and his partner respond to a robbery at an Asian food carry-out in which the owner’s daughter was apparently punched. While there, our hero sees an illegal weapon in the owner’s desk drawer. The officer is about to take the gun (but not charge the owner), when the owner begs him to let him keep the gun – until he can get a fully licensed one – for protection against robbery in the interim.

The officer complies, but orders him to get a legal gun within two weeks. Sure enough, by the end of the episode, a young man whom several witnesses claim was merely asking to use the bathroom in the carryout is shot dead by the owner who claimed he was a robber. Our hero’s partner says to the hero,” it’s too bad we didn’t see that gun when we were in here before.” Our hero looks chagrined.

Meanwhile, another of the main characters, a detective applies for a security job, despite the fact that he has applied for full disability from his police job. This is forbidden and, if he is really disabled, he could not perform the job. He is told he is lucky, receiving only a notation in his file with no action being taken against him.

One has to wonder if these shows and others (a recent episode of Hawaii 5-0 comes to mind wherein our heroes stole $10 million to save a colleague from being killed) are attempting to set a different moral standard for law enforcement officers than for the rest of society.

Each of the instances specified above are at least civil wrongs, derelictions of duty or crimes, yet the shows manipulate us to root for the bad guys - who are really the good guys – who are fighting the bad guys.

Is this really the message the TV industry wants to send? Is this really how we want our police to act?

Estate and Gift Tax

2011-01-18T08:12:00.001-05:00

On Dec. 10, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (“2010 Act”). This sweeping legislation addressed many aspects of taxation, including the estate and gift tax rules.

For starters, it stipulated that the estates of persons who died in 2010 can elect not to have any federal estate tax apply. Or, they can elect to have a federal estate tax apply, but with a $5 million federal estate tax exemption and a maximum federal estate tax of 35 percent.

If you elect to not have the federal estate tax apply, then the basis in the assets passing from the decedents to the heirs would be a carry-over basis. That is, whatever Mom paid for the stock continues to be the basis of the stock in the hands of her heirs. If Mom bought IBM stock at $5 per share, and if IBM stock is trading at $148 per share when the heir sells it, then the heir would have to recognize $138 of capital gains on every share of stock that she sold.

Although the capital gains tax rate is less than the federal estate tax rate, this still could generate a significant amount of income tax to be paid by the beneficiary. However, if Mom’s estate chooses to be subject to the federal estate tax in 2010, then the basis in the assets inherited by the heirs is the fair market value at the date of Mom’s death. If Mom died when the IBM stock was trading at $148 per share and the heir sells the stock when it is trading at $158 per share, then the heir only would have to recognize capital gains on $10 per share.

Deciding whether to elect to have the federal estate tax apply for persons dying in 2010 requires a determination of how much capital gains tax might be assessed, as well as how much federal estate tax might be assessed. This becomes a very complex analysis.

The 2010 Act further provides that for the years, 2011 and 2012, there is a federal estate tax with a $5 million federal estate tax exemption at a maximum 35 percent tax rate. If the estates of people dying in 2011 and 2012 are less than $5 million, then there will be no federal estate tax to pay.

The 2010 Act terminates as of Dec. 31, 2012. For those dying in 2013, the rules from 2001 will go back into effect: a $1 million federal estate and gift tax exemption and a maximum tax rate of 55 percent. My guess is that Congress will struggle with its next short-term fix toward the end of 2012. We will keep you informed.

Legal Drama Blog

2011-01-14T14:45:00.002-05:00

Well the holiday rerun season is over and we are back to new shows. The Good Wife continues to be a great drama, but absolutely lacks an understanding of the legal process. In the latest episode, the “firm” proposed representing both the son of a rich client and his girlfriend in a drug possession count.

Our heroine allowed the children to make statements (I saw no Miranda warnings), after which they were both promptly charged with murder. Our favorite law firm then proposed that they still could represent both the young man and his girlfriend on the murder charges EVEN AFTER the prosecutor made an offer. The first defendant would cooperate and only get three months in jail, while the other one would get 25 years. Our heroes saw no conflict in this.

Ultimately, the prosecutor, who had been fired by the law firm and is out to avenge his firing (and is permanently assigned to cases against or law firm – another conflict?), convinced the young woman and her mother to get a separate lawyer. He did this by pointing out that the boy’s father was a big contributor to the States Attorney’s election campaign and she better make a deal fast.

This show has great acting, but screams for a technical advisor.

LEGAL DRAMA BLOG

2010-12-16T12:37:00.002-05:00

Many of us like to watch a good TV show, play, movie or other drama about the law. Over the past several years, I have noticed that most of these have absolutely glaring inaccuracies about the legal issues discussed in the show.

It used to be that each show or movie had technical advisers to make sure they got things right. Either they don’t use them anymore or the standards have gotten lax. We thought it would be entertaining to periodically comment upon some of the more glaring errors as they occur.

The Good Wife is one of the best dramas on TV. It has a wonderful cast led by Julianna Margulies and Chris Noth with several excellent supporting players. Unfortunately, the writers can’t get the law right.

Michael J. Fox guest starred a few weeks ago and gave an extraordinary performance. However, the episode focused on a law firm that settled a class action with no court approval, nor any of the niceties of how a class action works, for an amount that turned out to be tens of millions of dollars less than the defense had authority for. This did not make our heroes look very good.

In terms of veracity, the Dec. 14 episode was even more galling. The firm was fighting to save a possibly innocent man from execution. The Seventh Circuit Clerk phoned our protagonist, the second-year associate portrayed by Margulies, at her home asking for an addendum to the brief she filed the night before. This prompted the firm and Legal Aid to scramble to present a new argument or produce new evidence to convince the judges to stay the execution.

With hours to go, they mobilized forces to get an expert witness to recant his testimony, which was a significant factor in the jury convicting the defendant. So far, so good. There also was a sub-issue of the institution running out of the correct barbiturate with which to start the lethal injection process.

Drama heightened, BUT then we have our protagonist sitting on her bed at home with her chief investigator (whose murky past is still a mystery) drinking beer and dishing about her love life. This was with six hours to go before the execution, when every other lawyer in the firm was working his/her butt off.

The Seventh Circuit Judge (one of three on the panel) later phones Margulies’ character, looking for her to say that the defendant is innocent. He asks if she has spoken to the expert who changed his testimony. She had not but, at the urging of the investigator, she lies to the judge and says that she had. Will she be brought before the Grievance Commission in future episodes for this infraction -don’t bet on it.

This is a great drama. Week in and week out there is fine acting and with intriguing storylines – many “ripped from the headlines.” But why, oh why, can’t they bother to get the law right? It would make for even more compelling stories.

Posted by Andrew Radding, who frequently analyzes white collar criminal issues for broadcast and print media.