fbpx

Can a City or Town be Held Responsible for the Actions of its Snowplow Drivers?

Posted: April 2nd, 2021

By: Scott Middleton, Esq. email

Tags: ,

Spring is finally here, and now that the last of the snow from the recent snowstorms has melted after being piled high, we can finally see the grass again. Although snowplows may be in hibernation until next year, you may wonder: did any municipalities face liability for snowplow accidents during this past messy winter? While rare, snowplow accidents happen. But can a municipality be held responsible for the actions of its driver/employee? The answer is generally, not very often. 

In most instances a snowplow operator “actually engaged in work on the highway” is exempt from the rules of the road and may only be held liable for damages caused by an act done and reckless disregard for the safety of others.[1] The claimant/plaintiff must establish that the “operator acted in conscious disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow.” This type of municipal law makes it difficult to prove an accident was the operator’s fault.

In this case, an employee of the Village of Great Neck Estates was operating a Village-owned snowplow. While in reverse, the snowplow was involved in an accident with a pedestrian walking in the street. The plaintiff later sued the employee and the Village for personal injuries. The court held that the employee did not act with “reckless disregard for the safety of others” since the employee testified that he had the beeping alert of the snowplow activated, was traveling at a low speed, and had the snowplow lights on. Additionally, the employee testified that he was looking in the snowplow’s mirrors while traveling backward but did not see the pedestrian behind the snowplow. In this instance, the plaintiff was unable to prove that the operator acted in “conscious disregard of a known or obvious risk.”

Contrast those facts with the long resolved Neddo case from 1949, where an automobile collided with a snow scraper on a highway in New York.[2] In this case, the state was ultimately found liable for failing to have proper lighting on a snow scraper. Likewise, in the 1982 Cherico case, New York City was held liable after a car accident when a snowplow-equipped truck caused an accumulation of ice and snow to fly over a guard rail and smash a driver’s windshield.[3] In that case, an engineer testified that that the snowplow operator did not follow the proper method of snow removal, which would have been to push the snow off the roadway onto the right shoulder instead of into the center.

If a municipality is served with a Notice of Claim for a vehicular accident involving a snowplow, it should be treated like any other claim and forwarded to the insurance carrier or third-party adjuster. Realize, however, that only in rare circumstances will a municipality be held responsible for the actions of its snowplow operators.

At CMM, we know that navigating municipal law on your own can be a challenge. If we can be of any assistance or you need a municipal law attorney on your side, please feel free to contact us at (631) 738-9100


[1] Kaffash v. Village of Great Neck Estates, 190 A.D.3d 709 (2d Dep’t 2021).

[2] Neddo v. State of New York, 300 N.Y. 533 (1949).

[3] Cherico v. City of New York, 88 A.D.2d 889 (1st Dep’t 1982).

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

To Post or Not to Post? Social Media and the Workplace

Posted: March 22nd, 2021

By: Vincent Costa, Esq. email

Tags:

Many people believe that the First Amendment grants them the right of unrestricted free speech, including on social media. But employees are often surprised to learn that the First Amendment protects specifically from government intrusion on free speech – it does not apply to intrusion on free speech by private employers. So, can an employer place limits on what an employee posts on their personal social media accounts? Read on to learn about the sometimes-complicated relationship between social media and the workplace.

Social Media Posts and Policies

New York is an at-will employment state, which means that an employee can be fired at any time without warning or reason.[1] Some states, however – including New York – protect employees (both public and private) from being fired due to their political or recreational activities outside of work (including social media posts). But the law has exceptions, including that it does not protect employees’ off-duty conduct that creates a material conflict of interest related to the employer’s business interest.[2]

To protect a company’s business interest, the company may create a social media policy regarding what employees cannot do on social media. Such a policy would allow an employer to fire an employee if they breach the policy, as long as the policy provisions do not violate the National Labor Relations Act (“NLRA”). Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”[3] Federal law also protects an employee’s right to engage in not only union activity, but “protected concerted” activity as well.

The National Labor Relations Board (“NLRB”) states that using social media can be a form of “protected concerted” activity. An employee has the right to address work-related issues and share information about pay, benefits, and working conditions with coworkers on Facebook, Twitter, and other social media platforms. However, some aspects of work are not “protected concerted” activity. Such activity is not protected if an employee says things about their employer that are egregiously offensive or knowingly and deliberately false, or if an employee publicly disparages their employer’s products or services without relating such complaints to any labor controversy.[4]

Recent NLRB Decisions

In a 2017 case, the NLRB created a two-step process called the “Boeing Test” (named for Boeing as a party to the case) for evaluating whether facially lawful workplace policies (such as a social media policy) unlawfully interfere with employees’ rights.[5] Step one is to determine whether the workplace policy reasonably interferes with the employees’ rights under Section 7 of the NLRA. If the policy does interfere, then the next step is to determine the employer’s justifications for the policy and balance those justifications against the interference with the employees’ rights.

The NLRB used the “Boeing Test” in a 2020 case, Bemis Company. In this case, the NLRB upheld a company’s social media policy.[6] Specifically, the NLRB found that the policy, when read in its entirety, “makes clear that to safeguard the reputation and interests of the company, employees referring to the company on social media must be respectful and professional, must not disclose proprietary information, must respect their coworkers, and must not harass, disrupt, or interfere with another person’s work or create an intimidating, offensive, or hostile work environment.”[7]

Specific Issues for Public Employees

Unlike private employees, public employees do have a limited First Amendment free speech protection. Yet this only applies when all three of the following criteria are met:

  1. They are speaking as a private citizen;
  2. Their speech pertains to a matter of public concern, such as a social, political, or community matter; and
  3. Their interest in speaking freely outweighs the public employer’s interest in efficiently fulfilling its public services.

If all these criteria are not met, a public employee can be legally fired for their social media posts. For example, a police officer, who is employed by the government, can be fired for making controversial posts related to racial and social issues because the police officer’s interest in speaking freely does not outweigh the department’s interest in efficiently fulfilling its public service.

Whether you are an employee facing pushback from your employer regarding social media or an employer considering a social media policy, please contact us for guidance.


[1] An employer in New York, whether public or private, cannot fire an employee due to an act of illegal retaliation or discrimination based on race, creed, national origin, age, disability, gender, sexual orientation, marital status, political or recreational activities outside of work, legal use of consumable products outside of work, membership in a union, or making a complaint to the employer. See NYS Human Rights Law; NYS Labor Law Section 201-d; NYS Labor Law Section 215.

[2] NYS Labor Law Section 201-D.

[3] Codified as 29 U.S.C. § 157; Interfering with Employee Rights, NLRB, https://www.nlrb.gov/about-nlrb/rights-we-protect/the-law/interfering-with-employee-rights-section-7-8a1 (last visited Mar. 18, 2021).

[4] Social Media, NLRB, https://www.nlrb.gov/about-nlrb/rights-we-protect/the-law/employees/social-media-0 (last visited Mar. 18, 2021).

[5] Boeing Co., 365 NLRB No. 154 (2017)

[6] Bemis Co., 370 NLRB No. 7 (Aug. 7, 2020)

[7] Id.

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

Professional Fundraiser Contracts in New York

Posted: March 2nd, 2021

By: Christine Malafi, Esq. email

Tags: ,

New York is one of the leading bases for charitable nonprofits nationally. Two million New York taxpayers reported giving $42.5 billion to charities in 2017.[1] Raising money has its own costs, however. Many charities use professional for-profit fundraisers as outside contractors to increase donations. Fundraisers play a crucial role in educating the public about and furthering a charity’s mission. Whether you are part of a nonprofit organization seeking to outsource fundraising, or a fundraiser for charities yourself, read on to learn about fundraising contracts and the costs and regulations related to fundraising in New York.

Giving by the Numbers

The New York Attorney General’s Charities Bureau is responsible for supervising charitable organizations to protect donors and beneficiaries of those charities from unscrupulous practices in the solicitation and management of charitable assets. Fundraising professionals who contact donors in the state are required by New York law to register annually and file fundraising contracts with the Attorney General’s Office. Depending on the nature of the activities, financial reports may also have to be filed. Additionally, the Association of Fundraising Professionals publishes a Code of Ethical Standards to foster and promote high ethical behavior in the fundraising profession.[2]

The Charities Bureau publishes an annual report called Pennies for Charity, which identifies trends in the charitable sector and shows the amounts retained by the actual charities, as opposed to professional fundraisers. The 2020 report includes data from 824 fundraising campaigns conducted in 2019 by professional fundraisers in New York; those campaigns raised over 1.2 billion dollars, but not all that money went to charities, or their intended beneficiaries.

More than $364 million was retained by professional fundraisers, while charities received $918 million (28% to 72% of funds raised, respectively). In 31% of campaigns, charities received less than 50% of funds raised. In 17% of campaigns, expenses exceeded revenue, which cost charities about $17 million. Since 2016, the percent of funds given to fundraisers has decreased from 33% to 28%.

Fundraising Contracts

Professional fundraisers are hired for many reasons, including due to inadequate staff available to raise funds and insufficient expertise to conduct fundraising campaigns. Further, retaining a professional fundraiser may be a means by which to get more people involved in a cause or mission. No matter the reason for hiring a professional fundraiser, it is important to learn about the fundraiser’s prior experience, reporting, and ethics before signing a fundraising contract.

To make the success of a fundraising campaign more probable, and to assist in avoiding problems that may result from hiring an inexperienced, non-compliant fundraiser, an organization should:

  • Check to make sure it is properly registered with the Charities Bureau and is current in its annual financial filings
  • Check with the Charities Bureau to see if the fundraiser is registered and has filed the required contracts and financial reports
  • Find out which other charities the fundraiser represented
  • Request copies of the fundraiser’s contracts with other charities and copies of the fundraiser’s financial reports
  • Ask the fundraiser for a list of references and contact those charities where the fundraiser worked

New York law requires that all fundraising contracts must be in writing and include no less than provisions as follows:

  • Within five days of receipt, all funds solicited by a fundraiser must be deposited in a bank account exclusively controlled by the charity
  • The charity has the right to cancel without penalty within fifteen days after the fundraiser has filed with the Attorney General
  • Descriptions of the services to be provided by the fundraiser and the financial terms of the contract must be clear
  • Names, addresses, and registration numbers of both parties

Other areas relevant to the engagement should be addressed as well. Like any business contract, the terms of the fundraising agreement must be drafted, reviewed, discussed, and negotiated completely before signing.

Whether you are a professional fundraiser or are considering hiring a professional fundraiser, please contact us for guidance.

Thank you to Daniel Axelrod for his research and writing assistance with this article.


[1] 2017 is the most recent year available to find tax return statistics.

[2] See https://afpglobal.org/ethicsmain/standards-guidelines (visited 3/2/2021). Specifically, it provides, in part, that members shall not accept compensation or enter into a contract that is based on a percentage of contributions, not accept finder’s fees or contingent fees, be permitted to accept performance-based compensation, and neither offer nor accept payments for the purpose of influencing the selection of products or services.

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

New Policies Allowing Legal Surrogacy in New York

Posted: February 24th, 2021

By: Christine Malafi, Esq. email

Tags: ,

Many people are surprised to find out that before February 15, 2021, surrogacy was not legally permitted in New York. Surrogacy has just become legal under New York State’s Child-Parent Security Act, which has New York join every other state (except Louisiana and Michigan) in legalizing surrogacy. The Act legalizes and regulates contracts related to gestational surrogacy in New York, and requires that surrogacy contracts contain no less than the following items:

  • Compensation: The base compensation and additional expenses for the surrogate must be placed in escrow with an independent agent.
  • Custody: The surrogate must agree to the embryo transfer and to give birth to the child. Additionally, both the surrogate and their spouse, if applicable, agree to concede legal custody to the intended parents immediately upon birth of the child.
  • Intended Parent Requirements: At least one intended parent must be a US citizen or lawful permanent resident and must have been a New York State resident for at least six months.
  • Legal Counsel: Both the surrogate and intended parents must be represented throughout the contractual process by independent legal counsel.
  • Medical Expenses: The intended parents must cover the medical expenses of the surrogate and child.
  • Surrogate Requirements:  The surrogate must be US citizen or lawful permanent resident; at least 21 years of age; have successfully completed a medical evaluation; must not have previously provided the egg used to conceive a child; and must give informed consent.
  • Will: A will designating a guardian for the child must be executed.

Additionally, the statute includes the Surrogate’s Bill of Rights that includes a list of the surrogate’s substantive rights. These rights, which cannot be waived, include the right to:

  • make all health and welfare decisions regarding the pregnancy
  • independent legal counsel, of their own choosing, paid for by the intended parents
  • a health insurance policy paid for by the intended parents throughout the duration of the pregnancy and extending one year after the pregnancy
  • obtain counseling and disability insurance paid for by the intended parents
  • a life insurance policy paid for by the intended parents that takes effect prior to treatment and extends for one year after the pregnancy
  • walk away from an agreement prior to pregnancy without penalty

Other subjects which should be addressed in the agreement include:

  • Conception: How conception will occur (i.e. whose gametes will be used, are the embryos to be fresh or frozen, how many embryos will be transferred per attempt, and how many attempts will the parties make).
  • Death: What occurs if the intended parents die or become seriously disabled during the surrogacy process (how should the gestational carrier proceed)?
  • Governing Law: Indicate the specific state whose laws will govern the surrogacy arrangement and if a dispute arises, how will it be handled (i.e. in which court will the action commence or will there be mediation before a court action).
  • Parental Rights: Clearly define how the parentage will be addressed (i.e. how will the intended parents be established as the legal parents and how the gestational carrier will be relieved of all rights regarding the child).
  • Payment of Expenses: Spell out the methods and types of payments associated with surrogacy. 
  • Termination of Pregnancy: Parties must agree on the possibility of termination of pregnancy. This is allowed when the pregnancy puts the carrier’s life in danger, but the contract should provide remedies when the carrier aborts (or refuses to abort) contrary to the wishes of the intended parents.

These topics are not an exhaustive list, and before any medical processes can begin, the entire contract must be finalized, even if the parents already have a friendly relationship with their intended surrogate.

Surrogacy agreements clearly involve the most important family decisions one could make. Although surrogacy is inherently a personal decision between loved ones, surrogacy agreements are still complex business contracts that must be given substantial thought. Like any business contract, the terms of the surrogacy agreement must be drafted, reviewed, discussed, and negotiated.

Whether you are considering expanding your family via gestational surrogacy, or are interested in becoming a surrogate, please contact us for guidance.

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

Business Unusual 2020 Inspirational Video Montage

Posted: October 29th, 2020

This spring, Joe Campolo and Peter Klein launched a weekly webinar to help lead the business community through the pandemic by sharing insight with industry experts, nonprofit leaders, elected officials, and business owners about how to move forward most productively. Check out this uplifting video featuring highlights from Business Unusual’s 2020 season. Thank you to all our guests and viewers for an unforgettable and positive experience!

Find your favorite episode here.

Guest Spotlight: Jim Wrynn of NAM (National Arbitration and Mediation)

Posted: October 13th, 2020

By: Lauren Kanter-Lawrence, Esq. email

In 2020, the court system has faced unprecedented challenges from the pandemic and associated budget cuts. Business disputes, however, continue on – and with would-be litigants facing uncertain waits in the court system for their most pressing issues, Alternative Dispute Resolution (ADR) has taken on new importance.

We sat down (virtually) with Jim Wrynn, Chief Commercial Officer and a Hearing Officer at NAM (National Arbitration and Mediation), to discuss ADR, how NAM has filled a critical void left by the pandemic, and how his unique background informs his approach to cases. Read the Q&A to learn more.

Q: How do you explain ADR to non-lawyers?

Alternative Dispute Resolution (ADR) is any method for settling disputes without litigation. It is an alternative to the court system and is increasingly being utilized in disputes that would otherwise result in litigation, including commercial/business transactions, labor and employment matters, insurance disputes, matrimonial actions, and personal injury claims. Arbitration and Mediation are two of the most common forms.

  • Mediation is a private, collaborative process whereby the Mediator (a neutral third person) works with the parties to come to a mutually agreeable resolution.
  • Arbitration is like an informal trial where one or more persons (the “arbitrator,” “arbiter,” or “arbitral/arbitration tribunal”) hears evidence and arguments from each side of the dispute and issues an arbitration award which is legally binding and enforceable by the courts.

A major benefit of ADR is that the process is flexible – parties have the freedom to choose their own Arbitrator/Mediator with the requisite subject matter experience and can choose the procedural and discovery rules that may apply to their dispute. The procedure is much quicker than litigation, is significantly less expensive, is confidential, allows all parties to be heard, and is more likely to preserve existing relationships (business and/or social).

Q: When might ADR be a good choice for a particular dispute?

When:

  • liability is apparent, but the parties cannot agree on damages;
  • there are coverage issues that must be resolved;
  • the parties cannot agree upon apportionment of damages;
  • privacy/confidentiality is an issue;
  • litigating would incur significant time and expense;
  • the parties are concerned with preserving their existing relationship; or
  • when the parties must because the agreement requires it.

Q: The pandemic has severely limited court operations, and the recent announcement of a judicial hiring freeze suggests that these limitations will not be fully resolved for some time. How has NAM filled the void?

For almost 30 years, we have seen a significant increase in the use of ADR as opposed to formal court proceedings. Recent months have seen this shift rapidly accelerate due to the unprecedented impact of the pandemic. Accelerating even faster is the use of remote (or virtual) videoconferencing that enable the parties and counsel to proceed with Mediation/Arbitration in a way that protects them from the virus.

NAM has been way ahead of the curve in its ability to integrate technology and case conferencing. We have been conducting hearings and conferences via videoconferencing for over 25 years. Since mid-March alone, NAM has successfully conducted thousands of hearings remotely without any technological or security issues.

Q: How does virtual mediation compare to in-person mediation? Do you think in-person will resume post-COVID or is virtual mediation a satisfactory substitute?

Frankly, the conversion from mostly in-person to virtual hearings has been seamless for us, and the parties and counsel are finding it quicker and more cost-effective. For example,

  • clients do not have to pay the cost (time and expense) of the attorney, witness and/or party travel expenses;
  • the hearing itself is more efficient (it starts as soon as you log on – no more waiting for parties/witnesses to arrive and everyone present in the room to begin) and the parties lose minimal time from their respective businesses/professions (not having to travel); and
  • parties don’t have to worry about many hurdles that can lengthen or delay settlement (bad weather, traffic delays, flight cancellations, poor health, etc.)

In addition, the Mediator/Arbitrator can speak to all parties and counsel together or separate them into break-out rooms. We are also finding that there is much more eye contact with the parties and counsel virtually, where faces are very visible on the screen, than there would be if all were present in the same room sitting around a large conference room table.

Participants are now familiar and comfortable with Virtual ADR and the benefits it provides, but time will tell as to the degree participants will continue to utilize this format post-Covid.

Q: What sets NAM apart from other ADR services?

First and foremost is the quality of our roster of neutrals. NAM offers a nationwide panel of more than 2,600 top-tier former judges and experienced legal practitioners that are each uniquely qualified to resolve these disputes. NAM has two of the top three neutrals in the U.S. based on the National Law Journal and consistently ranks in the top three of the Corporate Counsel Best of Surveys.  Eight of the top 10 mediators and seven of Top 10 arbitrators were NAM neutrals based on the New York Law Best of Survey and others are working their way up the list. 

We continue to expand the roster to include even more distinguished neutrals. We recently added the Honorable David B. Saxe of the NYS Appellate Division, First Department, to our panel. Justice Saxe is one of the most honored and respected members of New York’s legal community, and I have no doubt that he will soon be joining many of our other neutrals on these lists in the future.

Another reason is NAM’s superior case administration – we have an experienced team of case managers with the skill set and experience to handle all aspects and nuances involved in the administration of the individual dispute or with a specific ADR program.

Other reasons include: our focus on technology – being at the forefront of videoconferencing over the past 25 years is paramount. We also offer unparalleled flexibility – we have tremendous expertise in the customization and implementation of numerous innovative ADR programs and initiatives. In addition, NAM has constantly demonstrated industry leadership. It has been a true pioneer in the field of ADR and, as a result, has been repeatedly recognized as a leader in the field by the legal community.

Q: Talk about your own background as Superintendent of the NYS Insurance Department and how that experience has shaped your work at NAM.

In addition to my role as Superintendent of the NYS Insurance Department, my background includes more than 35 years of experience as an attorney, regulator, executive, strategic advisor, board member, and expert witness in the insurance field. These experiences have made me somewhat uniquely qualified to serve as both Chief Commercial Officer (where I help develop NAM’s overall strategic policy), and as a Hearing Officer (primarily in the Insurance/Reinsurance field).

For the first 25 years of my career, I was a trial attorney and, coincidently, handled many mediations and arbitrations with NAM, so I am familiar with them as both a client and an executive. Since that time, I have been involved with thousands of claims from a number of different viewpoints in my various roles with the NYS Insurance Fund, the NYS Department of Insurance, and the NYS Department of Financial Services, and as a regulatory attorney, expert witness, and strategic advisor.

As a result,  I do not approach the dispute from only one vantage point, as many neutrals do, but I understand the perspective of all parties, their counsel, the impacted business owners, the insurance carrier, and even the regulator, since I have worn hats in each of these capacities.

Learn more about NAM here.

CMM attorneys have helped countless clients reach successful resolutions through both litigation and ADR. Contact us today to discuss the best path forward for your employment, business divorce, personal injury, or other disputes.

“Pink Tax” Ban Takes Effect in New York

Posted: October 5th, 2020

By: Christine Malafi, Esq. email

Tags:

Business owners: to avoid civil penalties, be sure to review your pricing model on goods and services to confirm you’re adhering to recently passed legislation. As of September 30, 2020, New York State has banned the “pink tax,” a reform passed as part of the 2021 New York State Budget.1

The “pink tax” describes a practice by retailers, manufacturers, and service providers to charge different prices for “substantially similar” consumer goods or services that are marketed to different genders. The law is in response to instances in which women are charged more, and pay more, for the same goods or services offered to men.2

“Substantially similar goods” are defined by the State as goods that exhibit little difference in the materials used in production, intended use, functional design and features, and brand. “Substantially similar services” is defined as two services that exhibit little difference in the amount of time delivering, difficulty, and cost in providing the service. The State uses the following as examples of prohibited pricing:

  • a store selling a toy in blue for $5.00 and the identical toy in pink for $10.00, or
  • a dry cleaner that charges a higher price to dry clean a woman’s dress suit than a man’s dress suit.  

To combat discriminatory practices, the law empowers consumers to request and receive a written price list for standard services to ensure any such difference is not discriminatory.

To avoid potential liability, businesses should make sure that any price difference is based upon:

  • The amount of time it took to manufacture such goods or provide such services
  • The difficulty in manufacturing such goods or offering such services
  • The cost incurred in manufacturing such goods or offering such services
  • The labor used in manufacturing such goods or providing such services
  • The materials used in manufacturing such goods or providing such services 
  • Any other gender-neutral reason for having increased the cost of such goods or services   

The New York State Division of Consumer Protection will handle all complaints, and violations may result in an order to stop such sales, along with restitution to consumers, up to a $250 fine for the first violation, and up to $500 fine for any subsequent violations. Consumer restitution, while in and of itself is not a high cost, could lead to potential class action lawsuits.

Businesses should protect against violations of the “Pink Tax” prohibition to avoid the appearance of discriminatory practices and potential liabilities which may result. If you have questions or need assistance, please contact us at (631)-738-9100 or fill out our form here.

[1] Senate Bill S2679

[2] A Study of Gender Pricing in New York City

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

Business Divorce: Negotiating with Your Business Partner

Posted: August 4th, 2020

By: Joe Campolo, Esq. email

Published In: HIA-LI Reporter

Tags:

Negotiating in the Time of COVID

As a business lawyer, I’m used to receiving frantic calls at all hours about any number of business issues, from the mundane to the bizarre. But over the past eight weeks, as PPP has run out and many business owners and CEOs are facing seemingly insurmountable challenges, these calls have overwhelmingly focused on one topic: business divorce.

Due to the prolonged economic disruption of COVID-19, the reality is that many business partnerships will disband. Whether you’re buying out a partner, want to sell your interest, or close up shop and move on, the goal is to do so in a way that maximizes the value of the hard work you’ve put into the business. Since I’ve been spending my days navigating these issues with clients, I’m sharing some tips here to help you negotiate with your business partner to part ways as productively as possible.

1. Recognize that “it’s not personal, it’s strictly business”

This tip from The Godfather is also known as “get your head in the right place.” When you’ve built a business with someone, separating the emotion from business decisions is extremely difficult, especially when it comes to splitting up. But it’s critical to try. The decision to “break up” is likely one of the most important of your life, and you can’t make sound decisions if you view the economic realities as a personal affront. Talk through your feelings with someone you trust – scream if you have to – but take the emotions out of the decision-making process as best you can.

2. Use a trusted advisor as a sounding board.

Of course, you’ll need legal counsel to draw up the documents memorializing the business divorce. But before you get there – and to help keep your emotions in check – bounce ideas off someone you trust. This can be a business advisor, such as a lawyer, accountant, financial advisor, or even a business mentor, or someone you can confide in with personal matters, such as a therapist, friend, or family member. As a business owner, you live and breathe your business – sometimes so deeply that seeing the big picture can be difficult. Using a trusted advisor can help keep you focused and consider scenarios you wouldn’t have otherwise thought about.

3. Empathize.

Take the time to consider your business partner’s interests and positions. Being able to empathize with the other party’s perspective is critical to achieving a good result. By suppressing your automatic reaction of anger or fear, you can better understand what he or she is seeking. (Remember, empathy isn’t sympathy. The key is to demonstrate that you understand how the person feels, but you’re not necessarily agreeing with it.) This understanding puts you in a much stronger negotiation position as you’ll be better able to craft win-not lose solutions.

4. Start at the end.

What resolution do you envision? Rather than preparing a negotiation script in which you’re just reacting (i.e., “If she says this, I’ll respond with this”), picture your ideal scenario, and work backwards to see what it will take to get there. Do you want your business partner to sell you her shares? Consider what her take will be on how much blood, sweat, and tears she’s put in over the years (not how much you think she’s put in) and consider ways to respond to that. Perhaps you can provide value to her in ways other than an inflated buyout price – loan forgiveness, equipment, and so forth. By starting at your desired result and pressing rewind, you’ll make more progress than if you simply script out a response to your adversary’s anticipated comments. That strategy won’t get you anywhere.

As a business lawyer and experienced negotiator who has spent my career helping business owners navigate these issues, I know firsthand that business divorces are high-stakes negotiations peppered with emotions and stress. But don’t let fear prevent you from pursuing what you want. The business environment we find ourselves in today is unprecedented, but may be just the opportunity you need to move forward.

Found this article helpful? Learn more negotiation tips here or contact us to learn more about our business divorce experience.

CMM Success Spotlight: Realtor Patty Brunn

Posted: August 4th, 2020

After more than 10 years of dedicated service at Campolo, Middleton & McCormick, Patty Brunn has turned her passion for real estate into a successful new career. As a Licensed Real Estate Salesperson, Patty now works with residential buyers and sellers across Suffolk, Nassau, and Queens, helping clients sell their homes for top dollar or find their new dream homes.

CMM clients remember Patty as a knowledgeable, service-oriented paralegal. She joined CMM in 2008 as one of the firm’s first hires, starting in the litigation department and eventually working with the firm’s real estate team, where she found her passion. “Communicating with clients regularly and guiding them through the real estate process was always one of my pleasures,” Patty says. “I enjoy helping people, so getting them to the finish line as stress-free as possible always brought me joy.”

Patty spent several years in CMM’s Bridgehampton office, helping to build our presence and reputation on the East End. While working full-time, she studied for and received her Real Estate Salesperson license in January 2019, pursuing real estate on the side, but staying focused on her work at CMM.

While COVID-19 has caused unprecedented economic disruption and challenges, Patty – true to her nature – decided to view the pandemic as an opportunity. With the Long Island residential real estate market rapidly heating up as people look to relocate, Patty decided to focus on her real estate career full-time. She’s now affiliated with Nappa Realty in Massapequa, where she uses the customer service skills she honed at CMM to help her real estate clients maximize the value of their investments and start new chapters in their lives.

“Patty has always been a tremendously hard worker, a good listener, and client-oriented – all required traits for a successful real estate salesperson,” said CMM Managing Partner Joe Campolo. “My own family has already used Patty to sell a home and she did an amazing job. We miss her at the firm, but are extraordinarily proud of her, and will happily recommend her to our network.”

To get in touch with Patty, email pattybrunnrealtor@gmail.com or call 631-704-5015.