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Mandela – Master Negotiator

Posted: March 27th, 2014

By: Joe Campolo, Esq. email

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Nelson Mandela was the “greatest negotiator of the twentieth century,” wrote Harvard Law School Professor and Program on Negotiation Chair Robert H. Mnookin in his book,Bargaining with the Devil, When to Negotiate, When to Fight. In Lessons from a Master Negotiator: Nelson Mandela, published in Harvard Law School’s Negotiation Briefings, dealmakers worldwide can learn from the South African anti-apartheid revolutionary, politician, philanthropist and “master negotiator” and his legacy in South African history.

The article suggests that by listening, observing, and caring enough to learn about the grievances and worries of those we interact with, we can best respond to their core, intense and very personal needs. Which can then help to soften the resistance those people have regarding the issues that matter most to us. This skill is often referred to as emotional intelligence, described as the ability to accurately read our counterparts’ emotions, manage our own feelings, and successfully mediate conflict.

The Master Negotiator article examines Mandela’s negotiation style and gives a background on how the late statesman and activist dismantled apartheid in South Africa. Read more below:

Some people learn to negotiate on the job, in a classroom, or in a therapist’s office. In Nelson Mandela’s case, according to Bill Keller’s New York Times obituary of the legendary South African, who died on December 5 of last year, “prison taught him to be a master negotiator.”

Soon after his arrival at South Africa’s brutal Robben Island prison for a life sentence, Keller writes, Mandela “assumed a kind of command.” He befriended many of his white captors, whom he introduced to visitors as “my guard of honor.” He tried to persuade younger political inmates to analyze their opponents’ strengths rather than plunging headlong into conflict. During his 27 years of imprisonment, Mandela deeply absorbed the value of patience, discipline and empathy.

Mandela may have honed many of his negotiation skills in prison, but he was a born dealmaker. Those of us in realms less challenging than apartheid-era South Africa can learn from his beliefs, decisions and actions.

In the late 1940s Mandela became active in the African National Congress, a well-established South African political organisation dedicated to securing full citizenship for blacks. As he rose through the ranks and gained influence, Mandela began to question the ANC’s reliance on peaceful protest to make headway. Without vetting his views with ANC leadership, he publicly spoke out in favor of armed resistance, only to be censured for diverging from the organization’s policy.

Decades later Mandela took a similar approach when making a much more fateful break with the ANC’s party line. In 1985, 23 years into his imprisonment, numerous signs — including international pressure, a devastating trade boycott and growing violence between protesters and the police — suggested that the apartheid regime was weakening.

The ANC had taken the stance that it would not negotiate with the South African government. Mandela himself had personally rejected the possibility of negotiation in numerous public statements, once saying, “Only free men can negotiate.” The government took a similarly hard line against negotiation with the ANC, believing that to do so would signal weakness.

Both sides insisted that it would not negotiate unless the other made significant concessions beforehand. Given the entrenched stalemate, it was remarkable that Mandela decided to try to launch negotiations between the ANC and the government. Even more strikingly, he did so without any authority to speak on behalf of the ANC, which was run as a collective.

Leading from behind

Believing that his fellow ANC leaders would disagree with his decision, Mandela covertly sent a letter to Kobie Coetsee, South Africa’s minister of justice, in which he offered to meet secretly to discuss the possibility of negotiations. Coetsee eventually agreed, and the two men launched clandestine talks that laid the groundwork for a democratic, post-apartheid South Africa.

For most of us, secretly moving forward with a negotiation against the wishes of our superiors and colleagues would be a risky, even foolish move. Business negotiators typically must secure buy-in from others in their organization before breaking from past practice.

For such contexts, however, Mandela — who was raised by a prominent tribal chief — offers another useful shepherding metaphor. As a result of the long hours he spent in childhood listening to the consensus-building conversations of the tribal council, Mandela observed that the chief “stays behind the flock, letting the most nimble go ahead, whereupon the others follow, not realizing they are being led from behind.”

This quotation suggests the value of lobbying others in support of your cause, then letting them make your argument to other reluctant parties. Mandela’s stealth overtures remind us that those who see clearly what others cannot may have a responsibility to use their powers of persuasion to win over naysayers – or to act without them when necessary.

One noteworthy quality of Mandela’s was his ability to negotiate calmly with his enemies at the same time that he was absorbed in a passionate, all-consuming struggle against them.

Even as Mandela largely succeeded in regulating his own emotions, his keen sense of empathy enabled him to identify ways to capitalize on the emotions of his counterparts and adversaries.

Emotional intelligence is likely to be a valuable skill for negotiators, allowing us to accurately read our counterparts’ emotions, manage our own feelings and successfully mediate conflict. To cultivate these skills, spend time listening to and observing your fellow negotiators, making note of their insecurities and grievances. Doing so should enable you to address their core concerns, which could have the effect of softening their positions on the issues that matter most to you.

As illustrated by his eventual willingness to negotiate with the apartheid government, Mandela was at heart a pragmatist rather than an ideologue. His decision to initiate negotiations from prison may serve as the most prominent example of his willingness to change his positions in the service of his greater goals.

Not negotiating with an enemy on moral grounds can be a legitimate decision. Because our moral judgments tend to be based on intuition, however, instead of on reason, they can be dangerous traps. When we take a hard-line stance without thoroughly analyzing the likely costs and benefits of negotiating, we risk allowing our principles to get in the way of the greater good. Wise negotiators follow Mandela’s example and rationally consider whether or not to negotiate

http://www.pon.harvard.edu/category/publication-archives/negotiation-monthly-archives/

Can You Revoke An Irrevocable Trust?

Posted: March 27th, 2014

By: Martin Glass, Esq. email

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The simple, knee-jerk answer to that question should be no, as that’s the point of an irrevocable trust. But, believe it or not, if you said that, you’d be wrong. There are actually several different ways to revoke an irrevocable trust. It’s not a simple procedure, but there are certain times that it makes sense to get rid of it and start over.One such time would be when a trust was set up 10 or 15 years before. Given the changes in the income and estate tax laws, the trust may be more trouble and expense than it’s worth. Worse, a trust set up to save taxes might even increase them.

The common situation involves a bypass or credit shelter trust. In an old-style typical estate plan, when the first spouse dies, say the husband, assets equal to his exemption from federal estate and gift taxes are placed in this trust. The surviving spouse has access to the earnings and if need be the principal, but at her death the trust assets bypass her estate and go straight to the kids. The point is to preserve the husband’s exemption from estate tax. It made sense for a lot of families when the amount exempt from federal estate tax was $675,000 per person in 2001 or even $2 million in 2008.

But in December 2010 Congress temporarily upped the exemption to $5 million and in January 2011 made that exemption permanent and indexed for inflation. (It’s up to $5.34 million for 2014.) Furthermore, since 2011, spouses have been able to inherit each other’s unused exemptions. So, now a couple can actually shield a combined $10.68 million from federal estate tax without a bypass trust. But, with the trust in place, when the husband died, a much greater amount of assets ended up going into it than desired, possibly even leaving the surviving wife with very little.

What if your spouse died years ago? Inheriting a spouse’s exemption isn’t retroactive and had to be taken when he died. But if your own assets, combined with what’s in the trust, are below $5.34 million, your family might save income tax by getting rid of the trust. For one thing, when you die, the tax basis of your directly owned assets (but not those in the trust) get “stepped up” to their current market value, meaning heirs can sell immediately without owing any capital gains tax. For another, if you leave earnings accumulating in the trust, it can cost extra taxes. Undistributed trust income is taxed at the highest individual income tax rate, which is over 40%. By contrast, any income from assets you own directly would only pay a max of 28%.

So, how do we get rid of this type of trust? Most bypass trusts actually allow the trustee to distribute the assets to the surviving spouse. The trustee normally wouldn’t want to do this as it puts all the assets back into the spouse’s estate. A trustee can also terminate a trust if it’s relatively small ($100,000 or less) or if it’s uneconomical to maintain it ($5,000 annual trustee fees on a $200,000 trust) or, in legalese, if it doesn’t serve a “material purpose” of the creator. If the trustee won’t go along, you would have to petition a judge to terminate the trust.

But be careful. Before you decide to take apart your bypass trust, consider whether it’s needed to shield your family from New York State estate taxes (New York only has a $1 million exemption), or to protect the money from going to creditors or a new spouse. Also, if a trust is actually sitting with a capital loss (say it was funded with a residence before the housing market crashed), there might be a tax benefit to keeping it intact.

The other good time for an “irrevocable” trust to be revoked is in the case when a Medicaid qualified trust was set up but the grantor (or grantor’s spouse) needs nursing care before the five year look-back has expired. The Department of Social Services would tell you that the grantor is not eligible for Medicaid and that there will be a penalty period because of the transfer of assets into the trust. In order to get rid of that penalty period, the grantor needs to get the assets back into his name and then do something else with the assets to qualify for Medicaid.

This time the trust is actually revoked by statute (specifically NYS E.P.T.L. 7-1.9(a)). But in order to accomplish this “all persons beneficially interested in trust property” have to agree to revoke the trust. This is easier said than done. If there are minors as contingent beneficiaries, or if a grantor or trustee has died, the task then becomes almost impossible. The court will appoint a temporary guardian for the minors to make sure their interests are protected. It’s rare that the guardian would then agree to revoke the trust as it’s almost never in the minor’s best interest to do so. If a trustee has died and the successor has taken his or her place, they may not want to do what the grantor would like and revoke the trust. Worse, if one of the grantors has died, the trust then truly becomes irrevocable as it is now impossible for all of the persons to agree.

So, can you revoke an irrevocable trust? Yes, but it is difficult to do and should only be attempted after careful consideration. You don’t want to end up worse off than when you had the trust.

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.

Women in the Law: Historic Firsts in New York State and Suffolk County

Posted: March 10th, 2014

Suffolk County Historical Society (SCHS), through the cooperation of the Suffolk County Court Administrative Judge Randall Hinrichs, is pleased to announce that SCHS will be celebrating women from New York State who have left an indelible mark on the court system. A Photography Portrait Exhibition will be displayed at Touro Law Center in honor of Women’s History Month. This exhibition was created by the Suffolk County Judicial Women in the Courts and the Suffolk County Historical Society.

An opening reception will be held at Touro Law Center
Monday, March 10, 2014, 5:30-7:30 PM
225 Eastview Dr., Central Islip, NY

Honorees represented with images and biographies include:
· Hon. Judith Kaye – First Woman appointed to the N.Y.S Court of Appeals; First Woman chief Judge of the N.Y.S Court of Appeals
· Hon. Gail Prudenti – First Woman Presiding Justice, Appellate Division, 2nd Department *
· Hon. Birdie Amsterdam – First Woman elected to N.Y.S. Supreme Court
· Hon. Jane M. Bolin – First African-American Woman Judge in both N.Y.S. and the United States
· Sonia Sotomayor – First Latina Supreme Court Justice in the United States
· Kate Stoneman, Esq. – First Woman to pass the N.Y.S. Bar
· Charlotte Smallwood, Esq. – First Woman District Attorney elected in N.Y.S.
· Hon. Ruth Bader Ginsberg – First N.Y.S. Woman appointed to the U.S. Supreme Court
· Hon. Syrena Stackpole – First N.Y.S. Woman elected to public office*
· Judith Lewis Meggesto, Esq. – First female Native-American attorney in N.Y.S.

Suffolk County Firsts*:
· Christine Malafi, Esq. – First female Suffolk County Attorney *
· Hon. Catherine T. England – First female president of the Suffolk County Bar Association; First female justice to sit in Suffolk
County Supreme Court; First female judge to sit in Suffolk County Family Court.*
· Hon. Anne Mead – First female District Court judge in Suffolk County.*
· Hon. Mary M. Werner – First female District Administrative Judge in Suffolk County.*
· Valerie S. Manzo, Esq. – Co-founder and first president of Suffolk County Women’s Bar Association.*
· Rita Adler, Esq. – First female Assistant District Attorney in Suffolk County *
· Marguerite A. Smith, Esq. – First female Native-American attorney in Suffolk County (Shinnecock Nation.) *
· Patricia E. Salkin, Esq. – First female law school Dean in Suffolk County *

Subtenant’s Liability for Holding Over After Termination of Its Sublease

Posted: March 9th, 2014

By Patrick McCormick

Who is responsible for the damages that result when a commercial sub-tenant holds over past the expiration of its term causing the tenant to incur damages under its lease? In what appears to be a case of first impression in the Second Department,

in PHH Mtge. Corp. v. Ferro, Kuba, Mangano, Sklyar, Gacovino Lake, P.C.1 the Appellate Division has confirmed that, with appropriate lease clauses, the sub-tenant is liable for the damages incurred by the tenant resulting from the sub-tenant’s failure timely to vacate the premises it occupied.

The facts in PHH are simple enough: Owner/Landlord leased certain premises to Tenant. Tenant sublet the entire premises to PHH. PHH then sub-sublet a portion of the premises to Sub-subtenant Ferro Kuba. The rent Ferro Kuba was obligated to pay to PHH was about one-half the amount of rent paid by PHH to the Tenant and about one-quarter the amount of rent paid by the Tenant to the Landlord. The Master Lease between the Landlord and the Tenant provided for holdover damages to be paid to the Landlord in the amount of one and one-half the amount of base rent for each month of the holdover. The Sublease between the Tenant and PHH and the Sub-sublease between PHH and Ferro Kuba each incorporated by reference all the terms of the Master Lease, which included the holdover damages clause.

The Master Lease, the Sublease and the Sub-sublease terms ended; Ferro Kuba failed to vacate the premises it occupied and held over for 25 days thus precluding PHH and, in turn, the Tenant, from tendering vacant possession of the entire demised premises to the Landlord. The Landlord sought holdover damages from Tenant who in turn sought those damages from PHH. PHH paid $60,489.17 in holdover damages and sought to recover those damages from Ferro Kuba. When Ferro Kuba refused to reimburse PHH for the damages it caused, PHH commenced an action in Supreme Court, Suffolk County, which ultimately denied PHH’s motion for summary judgment.

The Appellate Division, Second Department reversed and granted PHH judgment on liability and remitted the matter to Supreme Court “for a determination of the amount of the plaintiff’s liquidated damages, interest, and counsel fees pursuant to the terms of the master lease and sub-sublease.” The Appellate Division based its determination on the terms of the master lease and sub-sublease finding specifically that “As a sub-subtenant, the defendant had expressly agreed to be bound by all of the provisions and restriction in the master lease for the premises, which included the payment of liquidated damages in the event of a holdover occupancy of part or all of the premises. Therefore, based upon the provisions of the master lease and the sub-sublease, the defendant is liable for holdover damages for the entire leasehold premises during the period at issue.”

In response to Ferro Kuba’s claim that Landlord could have rented the vacant portion of the premises and that landlord may have accepted a surrender of a portion of the premises, the Appellate Division held, “In this regard, a lessor is under no duty to rearrange its leasing of space in a commercial building to mitigate the damages caused by a subtenant who holds over.”

This case points out that, from the tenant’s perspective, it is critical that any sublease incorporate relevant terms, especially those under which tenant may be found liable for damages, to ensure the tenant has a viable remedy against the subtenant for damages caused by its holding over. When representing the subtenant, counsel needs to make sure that, in the face of such “incorporation by reference” clauses, the subtenant is made aware of the potential exposure.

1 113 A.D.3d 831, 979 N.Y.S.2d 536 (2d Dep’t 2014).

March 2014: Crossfit Liability: Protecting your Business

Posted: March 9th, 2014

By Scott Middleton, Esq.

In addition to being an attorney here on Long Island, I’m an avid CrossFit Athlete and have been participating in CrossFit for over 18 months now. The benefits from this type of fitness regime have had a tremendous impact on me: overall better fitness and nutrition, coupled with a sense of camaraderie among fellow CrossFitters and especially in one’s own gym. It has helped me both personally and professionally.

With the rising popularity of CrossFit here on Long Island and across the country it’s important to understand the risks to gyms and fitness centers that host these high intensity exercises. As a business owner or operator it is imperative to know how to protect yourself. Therefore, the question becomes how a CrossFit business can protect itself and its employees from potential lawsuits.

In New York, General Obligations Law §5 – 326 was enacted to prevent amusement parks and recreational facilities from enforcing exculpatory clauses printed on admission tickets or membership applications.

The cases that followed the enactment of §5 – 326 have focused on several factors to determine whether a facility is instructional or recreational, including: the organization’s name, its certificate of incorporation, its statement of purpose and whether the money charged is tuition or a fee for use of the facility. If training sessions are instructional in nature but are ancillary to the recreational activities offered by the facility, GOL §5 – 326 will apply in the waiver/release will be unenforceable as it will be considered to be against public policy.

Anyone who participates in a CrossFit, at a reputable facility knows that most offer rather strenuous but free introductory class. These are generally small and under the instruction of the coach/trainer. This is followed by the “on-ramp” where would be cross-fitters are introduced to many of the basic exercises, under the supervision and close instructional scrutiny of a trainer. Once you “graduate” from the “on-ramp” you’re ready (or maybe not) for regular CrossFit classes. During the short but grueling workouts, coaches are present to instruct on both basic and complex exercises. They continuously critique and teach.

The common thread here is that instruction is present throughout all aspects of CrossFit. The level of involvement of the coaches/trainers in continually correcting movements during the workout creates an atmosphere that is instructional and cannot be considered to be recreational or an ancillary service of a recreational facility. Thus, New York’s General Obligations Law §5 – 326 would not apply to CrossFit facilities and the waiver is completely enforceable. This affords CrossFit gyms a level of protection not present in “big box” gyms.

As a courtesy, I’d happily review your waivers to avoid making unnecessary mistakes in their enforceability.

NYC Earned Sick Time Act Goes into Effect April 1, 2014

Posted: March 9th, 2014

Effective April 1, 2014, private sector New York City employers with five or more employees must provide paid sick time to all employees who work at least 80 hours in a calendar year.1

Accrual and Use
Mayor Bill de Blasio signed the City Council’s expanded sick leave bill earlier this year. The New York City Earned Sick Time Act (the “Act”) provides that these private sector employees will now earn up to 40 hours of paid sick time per year, accruing at a rate of one hour for every 30 hours worked. The Act covers both full-time and parttime workers.

Employees may use sick time for three purposes:

  1. The employee’s mental or physical illness, injury or health condition or need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or need for preventive medical care; and/or
  2. Care of a family member2 who needs medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or who needs preventive medical care; and/or
  3. Closure of the employee’s place of business by order of a public official due to a public health emergency or such employee’s need to care for a child whose school or childcare provider has been closed by order of a public official due to a public health emergency.

Employees will begin accruing sick time at the start of employment or on April 1, 2014, whichever is later, but cannot begin using the sick time until July 30, 2014 or 120 days after the start of employment, whichever is later.

Unused sick time carries over to the following year, but the Act does not require employers to offer more than 40 hours of paid sick time to an employee per year. The Act does not require any payment to employees for accrued but unused sick time.

Notice and Documentation by Employees
An employer may require reasonable notice from the employee of the need to use sick time. When the need to use sick time is foreseeable, an employee may be required to provide notice of up to seven days; when the need is unforeseeable, an employee may be required to provide notice to the employer as soon as is practicable. An employer may require documentation signed by a licensed health care provider, but only for absences of three or more consecutive work days. The Act restricts employers from seeking information about the nature of the illness or absence.

Employer Obligations
Employers who provide sick leave must provide a Notice to new employees when they begin employment and to existing employees by May 1, 2014. (A copy of the Notice prepared by the New York City Department of Consumer Affairs can be accessed at http://www.nyc.gov/html/dca/downloads/pdf/Mand atoryNotice.pdf.) The Notice describes the accrual and use of sick time, defines the employer’s “calendar year,” and advises employees of their right to be free from retaliation for using sick time and the right to file a complaint with the Department of Consumer Affairs in connection with violations of the Act.  in English and any other primary language spoken by the employee, if the Department has posted a form in that language on its website (the Department plans to provide the Notice in Spanish, Chinese, French-Creole, Italian, Korean, and Russian).

Employers must maintain sick-time compliance records for at least three years.

Next Steps
Employers with New York City locations who already offer paid leave that can be used as sick time should evaluate their existing policies and update them to comply with the Act’s requirements. Those employers whose existing policies do not comply with the Act must draft new policies that meet the minimum requirements of the Act.

Please contact us with questions and for guidance in ensuring your company’s policies comply with the new legislation.

1 The Act does not cover independent contractors, work-study students, government employees, and certain hourly physical, speech, and occupational therapists. In addition, union agreements in certain industries may opt their workers out of the Act. Domestic workers are also subject to different regulations.

2 A “family member” is defined as an employee’s child, spouse, domestic partner, parent, sibling, grandchild or grandparent, or the child or parent of an employee’s spouse or domestic partner.

“Dumb Starbucks” – Is this Coffee Shop an Art Gallery?

Posted: February 27th, 2014

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A new coffee shop mocking Starbucks opened in Los Angeles in early February and quickly gained nationwide attention. The store looks identical to the typical Starbucks, but with the exception of the word “dumb” prefixed to the title and menu items.

Dumb Starbucks is not affiliated with Starbucks Corporation, and the company claims that their use of Starbucks’ trademark and logos is “fair use” because it is “making fun” of Starbucks.

The store’s FAQ sheet states the following:

Is this a Starbucks?
No. Dumb Starbucks is not affiliated in any way with Starbucks Corporation. We are simply using their name and logo for marketing purposes.
How is that legal?
Short answer – parody law.
Can you elaborate?
Of course. By adding the word “dumb,” we are technically “making fun” of Starbucks, which allows us to use their trademarks under a law known as “fair use.” Fair use is a doctrine that permits the use of copyrighted material in a parodical work without permission from the rights holder. It’s the same law that allows Weird Al Yankovic to use the music from Michael Jackson’s “Beat It” in his parody song “Eat It.”
So this is a real business?
Yes it is. Although we are a fully functioning coffee shop, for legal reasons Dumb Starbucks needs to be categorized as a work of parody art. So, in the eyes of the law, our “coffee shop” is actually an art gallery and the “coffee” you’re buying is considered the art. But that’s for our lawyers to worry about. All you need to do is enjoy our delicious coffee.
Are you saying Starbucks is dumb?
Not at all. In fact, we love Starbucks and look up to them as role models. Unfortunately, the only way to use their intellectual property under fair use is if we are making fun of them. So, the “dumb” comes out of necessity, not enmity.https://twitter.com/benpankonin/status/432554620515131392/photo/1

A spokesperson for Starbucks stated that “while we appreciate the humor, they cannot use our name, which is a protected trademark.”

Dumb Starbucks’ defense is debatable. A trademark is a symbol that is used “to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” 15 U.S.C. § 1127. Trademark fair use allows a non-owner of a mark to “nominatively” name and display the mark for the purpose of talking about it, in comparative advertising and for parody.

Here, Dumb Starbucks uses the exact Starbucks name and logo, but with the addition of “Dumb” in the prefix. However, the protected name and logo are used on numerous items throughout the store. Further, Starbucks’ designs, such as the store’s overall look, can also be protected as a trade dress under the Lanham Act. Dumb Starbucks resembles an actual Starbucks and its overall feel. Even the same cups and aprons are used. Therefore, it is debatable whether a consumer will confuse Dumb Starbucks’ marks for Starbucks’ protected marks.

Dumb Starbucks’ defense, however, may never be fully litigated. Despite Dumb Starbucks’ claim that it is an art gallery and not subject to permits, health inspectors disagreed and recently shut down the store. This store may have been just a social media experiment brought about by Nathan Fielder, the person behind Dumb Starbucks and host of the Comedy Central show “Nathan For You.” Fielder is known for his social media experiments and this may have been one of them. As demonstrated by the media attention it generated, Fielder may have achieved his purpose. While it is uncertain whether Dumb Starbucks will be revived, this case remains puzzling and a debate within the intellectual property community.

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.