Posted: July 6th, 2023
Event Date: October 25th, 2023
Save the date for CMM Cares Charity Masquerade Ball. The event will take place on October 25 at Flowerfield in St. James, NY. Mark your calendars and stay tuned for further details, as an unforgettable night awaits!
Posted: July 5th, 2023
Tags: labor & employment
New York City has joined a growing number of cities to ban discrimination based on height and weight.[1] In early May, the NYC Council passed Intro 209-A[2] (the “Bill”) in an effort to ban discrimination based on height and weight in employment, housing, and public accommodations. On May 26, 2023, Mayor Eric Adams signed the Bill into law, which will amend Section 8-101 of NYC’s Human Rights Law, adding height and weight to the list of characteristics the city has already protected against discrimination. The law will go into effect on November 22, 2023.
In the employment realm, the law bars employers from discriminating based on height or weight by (i) misrepresenting the availability of an employment opportunity, (ii) refusing to hire or employ an applicant, (iii) discharging a person, or (iv) discriminating against a person in compensation or in terms, conditions, or privileges of employment. Additionally, an employer may not circulate any application for employment which expresses any limitation based on height or weight, among other things.[3]
The law does carve out exceptions. Employers may consider the height or weight of an applicant when:[4]
Furthermore, even when no exception applies, an employer may still assert an affirmative defense that:[5]
With the law’s effective date rapidly approaching, NYC employers should revisit their anti-discrimination policies, as well as train their hiring teams on compliance with the new law. Please contact us with any questions you may have.
Thank you to Keith O’Brien for his writing and research assistance.
[1] Other cities include Binghamton, San Francisco and Washington D.C. Legislation to ban weight and height discrimination have also been introduced in states including New Jersey and Massachusetts.
[2] https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=5570369&GUID=DF289A07-73A5-4AFE-8932-7EA5D1FA6577&Options=&Search=
[3] Other things include age, race, national origin status, marital status, gender, etc. See note 2.
[4] See note 2.
[5] See note 2.
Posted: June 23rd, 2023
How do you define “persuasive”? How about: it took less than 10 minutes of deliberation for the jury to find in our client’s favor after CMM’s Scott Middleton presented the case at trial. Meagan Nolan assisted in the preparation leading up to trial which proved invaluable in terms of the eventual outcome.
CMM represented the defendant in a two-day jury trial involving a side swipe accident on the Long Island Expressway in which the plaintiff struck the passenger side of the defendant’s vehicle. Our client was a limousine company and the driver of the vehicle involved in the accident, which had picked up passengers in the Hamptons and was driving them home to Queens. Middleton argued that the plaintiff, represented by a national plaintiff’s personal injury law firm, was careless and negligent in operating her car by frequently changing lanes unnecessarily and speeding.
While the plaintiff’s injuries were not addressed at trial, she claimed to have sustained multiple herniated discs as well as a severe concussion. After failing conservative treatment, the plaintiff underwent a cervical discectomy and fusion, alleging the need for future medical care and expenses. Plaintiff alleged damages in excess of $3,000,000.
After the case was given to the jury, it took only 10 minutes for them to return a verdict in favor of CMM’s client. Pursuant to the terms of a previously negotiated high-low agreement, the defendant will pay the plaintiff $75,000 – a major savings over the $975,000 the plaintiff had demanded and the $200,000 our client initially offered to settle.
Learn more about CMM’s liability insurance practice here.
Posted: June 19th, 2023
Event Date: July 21st, 2023
Scott Middleton, CMM Senior Partner and East End Arts President of the Board of Directors, invites you to join East End Arts as they celebrate the season and continued efforts to “Unlock Creativity” and “Build Community” at the annual Summer Soiree on July 21, 2023.
The tented event hosted on the grounds of East End Arts’ creativity-infused campus overlooking the Peconic River features a selection of East End wines, beers, and cocktails, delicious bites from local purveyors, live entertainment (courtesy of EEA’s Art & Music Schools), select EEA Artist pieces for sale, a fabulous silent auction, and more.
Posted: June 16th, 2023
Tags: labor & employment
Since the 1996 decision In re Caremark International, the duty of oversight has been applied only to the directors of a corporation. The duty of oversight requires directors to make a good faith effort to ensure that an adequate internal corporate information and reporting system exists. This system is required so directors can “reach informed judgments concerning both the corporation’s compliance with law and its business performance.”[1]
Recently, the Delaware Court of Chancery (the “Court”) held for the first time that the concept of the “duty of oversight” applies not only to corporate directors, but to corporate officers as well. Additionally, the Court broadened a corporate officer’s “duty of loyalty” when it ruled that a corporate officer’s engagement in sexual harassment of employees itself violates the duty of loyalty. The holding raises issues that should prompt Delaware corporations to reconsider their reporting systems in place and protections available to their corporate officers.
In the case of In re McDonald’s Corp., the Court denied the motion of David Fairhurst, former McDonald’s executive vice president and global chief people officer, to dismiss a derivative[2] lawsuit against him brought by McDonald’s shareholders. The shareholders alleged that the former vice president violated his fiduciary duties by allowing a corporate culture to develop that condoned sexual harassment and misconduct. In his executive role, Fairhurst was accused of failing to put a stop to workplace harassment. The plaintiffs filed a long list of “red flags” that Fairhurst allegedly ignored or was responsible for, including an atmosphere that condoned male employees engaging in inappropriate behavior toward their female co-workers. He was also directly accused of sexually harassing female employees.
When analyzing a corporate officer’s duties to the corporation in this context, the Court held that the duty of oversight owed by officers is scrutinized under the same two-prong test used in Caremark that applies to directors. Specifically, officers “must make a good faith effort to ensure that information systems are in place so that officers receive relevant and timely information that they can provide to the directors.”[3] Further, officers “have a duty to address [red flags they identify] or report upward.”[4]
Applying the Caremark test, the Court held that the plaintiffs had a valid claim against Fairhurst because he breached his duty of oversight “by consciously ignoring red flags” of a culture congested with sexual harassment and misconduct.[5] The Court reasoned that officers are best situated to identify and address red flags or report them to the board of directors since their role as officers requires them to be involved with the day-to-day operations of the corporation. For “red flags” claims to be successfully pleaded against officers, the Court noted that a plaintiff must plead sufficient facts to support an inference that the officer not only knew of evidence of corporate misconduct, but also that the officer consciously failed to take action in response to such misconduct.[6]
Moreover, the Court held that an officer also violates the separate duty of loyalty when they engage in sexual harassment of employees. The Court explained that sexual harassment by a corporate officer is in furtherance of a private interest rather than “advancing the best interests of the company.[7] Sexual harassment is bad faith conduct, and thus disloyal conduct, with respect to their responsibilities as an officer of the corporation.Because harassment is per se not in the corporation’s best interests and disloyal conduct subjects the corporation to liability, it is a violation of the duty of loyalty and is actionable under the law.[8]
This decision demonstrates that Delaware courts continue to align the duties that are owed by corporate officers with those of directors. However, it also raises some questions about the scope of the additional duties imposed on officers of Delaware corporations. For instance, what if the corporation has a sufficient reporting and information system in place, but it failed to detect an officer embezzling money. Would the other officers be found to have violated their duty of oversight?
Although the trajectory of the case’s impact is unclear, Delaware corporations should consider how they assess risk monitoring, reporting, and compliance systems currently in place, as well as protections available to corporate officers, such as directors’ and officers’ liability insurance.
Please contact us with any questions.
Thank you to Keith O’Brien for his research and writing assistance.
[1] In re Caremark International Inc., 698 A.2d 959, 970 (Del. Ch. 1996).
[2] A derivative lawsuit refers to one or more shareholders bringing an action on behalf of the corporation against a third party, generally the officers or directors of the corporation, to remedy harm done to the corporation.
[3] In re McDonald’s Corp., No. 2021-0324 at 11* (Del. Ch. Jan. 26, 2023).
[4] Id. at *12.
[5] Id. at *27.
[6] Id. at *32.
[7] Id. at *28.
[8] Id. at *30.
Posted: June 15th, 2023
Campolo, Middleton & McCormick is proud to announce that Senior Partner Patrick McCormick has been elected and inducted as President-Elect of the Suffolk County Bar Association. As President-Elect, McCormick will continue to advocate for the legal community and represent the SCBA in the absence of the President.
This election is a noteworthy professional milestone for McCormick, who has previously served as First and Second Vice President, Secretary, and Treasurer of the SCBA Board of Directors, as well as Dean of the Suffolk Academy of Law. A proven leader in the community, this election highlights McCormick’s long-standing dedication to the SCBA. McCormick was sworn in at the SCBA’s 115th Annual Installation Dinner at Cold Spring Country Club on June 9th.
McCormick chairs the Appellate Practice at CMM, having built a reputation as a strategic and talented appellate attorney over three decades in the field. Representing clients in civil and criminal matters in both federal and state courts, he has argued numerous appeals, including at the New York State Court of Appeals, the state’s highest court. McCormick is also a respected trial attorney, litigating all types of complex commercial and real estate matters. He represents national commercial shopping centers, retailers, and publicly traded home builders in commercial and residential landlord-tenant matters. McCormick has been recognized by his peers with the Martindale-Hubbell AV Preeminent® rating for ethical standards and legal ability, the highest possible rating from the most recognized legal directory and resource.
Posted: May 31st, 2023
Campolo, Middleton & McCormick, LLP is celebrating Senior Partner Scott Middleton’s 10th anniversary of earning the AV Preeminent® rating from Martindale-Hubbell®. This rating is the highest possible rating for both ethical standards and legal ability from the most recognized and trusted legal directory and resource for 150 years. Ratings reflect the anonymous opinions of members of the bar and the judiciary, recognizing attorneys for both ethical standards and legal ability.
In a peer review, a judge reported, “He is a strong advocate, well prepared, and respected by the judiciary.” Another attorney wrote, “Scott is accountable, reliable and a terrific advocate. He is a credit to his profession.”
Middleton chairs the Municipal and Personal Injury practice groups at CMM. He handles all types of complex litigation including cases that have received local and national media coverage. Middleton also focuses on land use and zoning, for municipalities including the Villages of Poquott and North Haven. He has also held roles including Trustee, Mayor, Village Justice, and Attorney/Prosecutor.
Scott is a recognized supporter of the arts, particularly on the East End, serving as the President of the Board of Directors of East End Arts and supporting the Parrish Art Museum in addition to his membership on the Stony Brook University Intercollegiate Athletic Board.
Posted: May 30th, 2023
The Pregnant Workers Fairness Act was signed into law by the President in December 2022, and the Providing Urgent Maternal Protections for Nursing Mothers (“PUMP”) Act was adopted along with it. Recent federal publications have outlined some employer responsibilities with respect to each.
As of June 27, 2023, employers will have to provide pregnant employees with protections similar to those provided under the Americans with Disabilities Act (“ADA”). Employers with 15 or more employees will have to make reasonable accommodations, so long as there is no undue hardship on business operations, for known limitations related to pregnancy, childbirth, or related medical conditions. Like any request made under the ADA, an interactive process between the employer and employee must occur, and FAQs issued by the Equal Employment Opportunity Commission (“EEOC”) provide some guidance on what accommodations may be required, such as:
Additionally, a recent U.S. Department of Labor Wage and Hour Division bulletin[2] provides parameters related to the potential enforcement of the PUMP Act.
Specifically, the agency-directed guidance provides:
Employers with fewer than 50 U.S. employees may be exempt from these requirements if they can show an undue hardship in compliance (looking at expense, financial resources, nature, and structure of the employer’s business).
Of course, as with the enforcement of all employee rights, there can be no retaliation against an employee who engages in pumping activity or requests an accommodation related to pregnancy or childbirth.
New York State has its own laws related to employees’ rights during and after childbirth, with which employers in New York must comply, including the right to express breast milk with access to a specific, designated room for such.[4]
We are here to help. Please contact us with any questions.
[1] See: https://www.eeoc.gov/pregnancy-discrimination
[2] Field Assistance Bulletin No. 2023-02: www.dol.gov/sites/dolgov/files/WHD/fab/2023-2.pdf
[3] See: https://www.dol.gov/agencies/whd/posters/flsa.
[4] See: https://dol.ny.gov/system/files/documents/2023/03/ls702.pdf.
Posted: May 17th, 2023
Software applications that provide safety communications such as incident alerts and announcements have enabled schools and organizations to effectively handle emergency situations. Recently, CMM successfully facilitated a multi-million-dollar transaction for a software company specializing in developing this vital software for schools, healthcare facilities and various organizations. Vincent Costa structured the complex transaction as a spinoff and a merger. CMM formed a new corporation for the seller, spun off the hardware assets, and transferred all debt, equity, and options to the newly formed corporation. The existing corporation, which now only contained the purchased SaaS assets, was merged into a subsidiary of the buyer, which became the surviving entity. Consideration for the merger was paid in cash and rollover equity at closing and an earnout based on revenues for a three-year period moving forward.
Alan Sasserath, Managing Partner of Sasserath and Co., was an integral part of the team with respect to deal structure and tax advice. Paralegal Cailey McByrne’s efforts helped push the complicated deal to closing.
CMM has the experience to handle the most complex M&A transactions. Contact us today.
