News (All) - Page 153 of 164 - Campolo, Middleton & McCormick, LLP

DOL Inspection Preparation for Employers

Posted: June 10th, 2013

Most employers know that the U.S. Department of Labor (DOL) oversees compliance with the Fair Labor Standards Act (FLSA) and other statutes that protect workers. What many employers may not be aware of, however, is that the DOL has the authority to conduct inspections of workplaces and bring enforcement actions against employers found to be in violation of the FLSA and related statutes
governing wage payments. Employers may be investigated, inspected, audited, or visited by the DOL Wage and Hour Division (“WHD”) without explanation. Most often, complaints prompt DOL visits, though the existence of a complaint is not always disclosed to the employer. It is critical for employers to prepare for and understand their rights during inspections, investigations and audits. The following highlights some key points to prepare you and your team for a U.S. Department of Labor investigation.

Pre-inspection preparation. Before a government investigation begins, there are preventive measures that employers should take.
a) Check current and past 1099’s going back several years to review job duties to ensure proper classification of independent contractors vs. employees.
b) Review timekeeping systems to ensure that non-exempt employees are being paid for all work performed (including overtime).
c) Ensure that all required payroll records and written policies and procedures are current, accurate and complaint and updated regularly, keeping on top of applicable laws and regulations.
d) Train managers with key concepts of Wage Hour Law (exempt vs. non exempt).
e) Familiarize all employees with the basics of overtime and record keeping under the FLSA.
f) Familiarize key employees with DOL inspection procedure and appoint an employee representative for WHD inspector interviews.
Opening Conference & Preliminary Inspection. The inspection begins with the arrival of the investigator who will likely identify him or herself. The investigator will either present their credentials or an employer may request them. The investigator will request to meet with the employer or representative. An opening conference is conducted, which is when the employer is informed of the purpose of the inspection and the investigation process is explained. Some tips:
a) Clarify the scope of the investigation. Know exactly what they are looking for and don’t provide more than what is asked.
b) Consider your option to demand a subpoena vs. consenting to an investigation.
c) Know that the DOL must give the employer 72 hours to respond to demands and conduct the investigation during reasonable hours not to interrupt normal business operations.
d) Expect the DOL to request and be prepared to provide copies of at least the previous three years of payroll records, and all written policies, practices and procedures (i.e. timekeeping requirements
and procedures).
e) It is not unreasonable to request additional time to prepare the requested documents, although not all investigators will comply with this request.
Document Production. The investigator may request records for examination. Records are
examined to determine of the amount of business transactions, interstate commerce participation, government contracts, the layout of the facility, and payroll and time records.
a) Label all documents produced with “Confidential and Proprietary,” and keep all trade secrets or confidential business information under cover sheets.
b) Make and keep duplicates of every record produced to the DOL.
c) Bates-stamp each produced document to better track and reference what was produced.
On-Site Inspections and Interviews. Investigators may conduct private employee interviews that may occur on the employee’s premises, at the employee’s home, by mail, or by telephone. Both former and present employees may be subject to investigation interviews.
a) During the investigation have a manager escort the WHD representative at all times while on site (except during interviews).
b) Track the activity of the WHD representative; subjects of his questions, written notes, etc.
c) Employers do not have the right to participate in non-exempt employee interviews, but do have the right to attend all management interviews.
d) Once DOL decides who they want to interview, schedule all interviews in advance and prepare employees.
e) Remember that you must never retaliate against employees for agreeing to be interviewed or because of anything they say during an interview.
Closing Conference. A closing conference is conducted at the end of the investigation with the employer. The investigator will inform the employer of standards violated, corrections to be made, abatement dates, and citations may be issued. If the DOL finds any violations: a)Copies of the citation will be provided by mail and employers must post citations where affected employees can view them.
b) Be prepared for follow up inspections to ensure corrections are made and citations are posted.
c) Request time to provide supplemental information to correct any factual errors that form the basis of a proposed violation.
d) In deciding wither to contest the DOL’s findings, consult counsel to review whether the alleged violations are accurate, if the penalties are excessive and if the finding exposes you to costly
compliance measures.

During more in-depth investigations, compliance officers may conduct preliminary investigations including looking into whether or not a complaint is valid, and checking on prior or current investigations for the same employer. Additionally, they may collect copies of prior inspection reports, inspector’s notes, interviews, signed statements, and information on previous complaints. An employer may provide a written position statement and request time to consult legal counsel. Investigators may also subpoena documents and witnesses.

6. Remedies for Violations. Depending on the violation, type of investigation, and who performed the investigation, remedies will vary. Financially, employers may be subject to the payment of back wages, civil money penalties, employee suits for recovery, and Secretary of Labor lawsuits brought on behalf of employees. Legally, employers may be subject to court injunctions brought by the Secretary of Labor, criminal penalties, and court injunctions that prohibit further violations. Certain statutes subject employers to the withholding of funds, administrative hearings, court actions, loss of federal contracts, and the declaration of ineligibility for future contracts. Protection will be provided to the employees who file complaints or provide information for the investigation. Charges of retaliation, and potentially criminal sanctions, may occur if employees are affected after an investigation.

7. Conclusion. Employers should be proactive as opposed to reactive in this area. They should conduct self-audits at least yearly to make sure they are in compliance with applicable laws enforced by the United States Department of Labor. Employers should also train their employees what to do if when an investigator shows up at the facility. Early planning and knowing how to respond to an inspection could
potentially save an employer thousands of dollars and protect the employer from criminal prosecution.

May 2013 Legal Brief – Firm Newsletter

Posted: May 30th, 2013

Second Circuit Holds that Appropriation Art Constitutes Fair Use

Posted: May 29th, 2013

Tags: intellectual property

In a recent decision, Cariou v. Prince¹, the Second Circuit held that 25 works of appropriation art that incorporated original copyrighted photographs constituted fair use under the Copyright Act, 17 U.S.C. § 107. Appropriation art is the “more of less direct taking over into a work of art a real object or even an existing work of art.”²

In this action, defendant Prince took Cariou’s photographs and incorporated them into 30 works. Images of the 30 works and the corresponding Cariou photographs used are available through the Second Circuit’s website:
http://www.ca2.uscourts.gov/11-1197apx.htm.

Cariou sued for copyright infringement and the district court granted Cariou summary judgment, holding that no reasonable jury could find Prince’s work to be fair use. The Second Circuit reversed in part, vacated in part and remanded for further proceedings.

The Second Circuit’s analysis focused on the four non-exclusive fair use factors provided in the Copyright Act: (i) the purpose and character of the use, including whether the use is commercial or for nonprofit educational purposes; (ii) the nature of the copyrighted work; (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (iv) the effect of the use upon the potential market for the value of the copyrighted work.

Under the first standard, the Second Circuit found that 25 of the 30 works were transformative because they “manifest an entirely different aesthetic from Cariou’s photographs.”³ The court focused on the differences between the two artists’ “composition, presentation, scale, color palette, and media.”

Under the second factor, the Second Circuit acknowledged that Cariou’s work was both creative and published, which weighted against a finding of fair use, but noted that this factor is of less importance where, as here, the work is used for a transformative purpose.⁴

Under the third factor, even though Prince used all or substantially all of Cariou’s photographs in some of his works, the Second Circuit held that this does not necessarily weigh against fair use because the copying of the entirely of a work is sometimes necessary to make a fair use of the image. In this case, Prince’s 25 works transformed Cariou’s photographs into “something new and different.”⁵

Lastly, under the fourth factor, the Second Circuit focused on whether the secondary work usurps the market of the original work. An alleged infringer usurps the market of the original work and its derivatives when the target audience and the nature of the infringing content are the same as the original. In this case, the Second Circuit found that Prince’s work appeals to “an entirely different sort of collector than Cariou’s” work and that this factor weighs in favor of Prince.⁶

With respect to five of the 30 works at issue, the Second Circuit remanded the case back to the district court for further proceedings.

¹ Cariou v. Prince, Case No. 11-CV-1197, 2013 WL 1760521 (2d Cir. April 25, 213).
² Cariou, 2013 WL 1760521, at *2.
³ Id. at *6.
⁴ Id. at *9.
⁵ Id. at *10.
⁶ Id. at *9.

July 21 – New York Civil Practice & Discovery Update CLE

Posted: May 28th, 2013

gavel freeimages.com Please join us on Thursday, July 21 for a complimentary CLE focusing on critical updates to the CPLR and court rules as well as recent case law that significantly impacts New York civil practice and discovery. Taught by two experienced litigators, CMM partners Scott Middleton and Patrick McCormick, the course will cover a wide variety of topics of interest to all who practice in New York State courts including deposition rules, subpoena standards, privilege issues, electronic evidence, and discovery hurdles facing every practitioner.

The application for New York accreditation of this course is currently pending.

A light dinner will be served.

Thursday, July 21, 2016

5:00 p.m. – 7:00 p.m.

Campolo, Middleton & McCormick, LLP
4175 Veterans Memorial Highway, Suite 400
Ronkonkoma, NY 11779

This seminar is free but registration is required. Please RSVP to Lauren Kanter-Lawrence, Esq., Director of Communications, at Lkanter@cmmllp.com or (631) 738-9100, extension 322.

I Left a Child Out of My Will. Now What?

Posted: May 28th, 2013

By: Martin Glass, Esq. email

Tags: estate planning

Is this a tragic scenario? Probably not, but it certainly represents what is an entirely avoidable estate planning consequence. Here’s the dilemma. Assume after having your first child, you do the smart, responsible thing — you draft a Last Will and Testament which sets forth your final wishes with regard to the distribution of your estate. Fast forward a couple years and say that your first child now has a sibling and that you unintentionally failed to accommodate for in your Will. OK, one last fast forward in time. Twenty-five years later, despite your best intentions and the daily grind always seemingly getting in the way, you find that you never quite got around to updating your Will to reflect your wishes regarding that later born child before you pass away. So much for the best laid plans.

Even though you love your children equally and probably want them to similarly share in your estate, will that actually happen? Will that later born child you omitted from your Will be disinherited because of your planning error, or will the law accommodate her somehow? These are scary questions. It’s my hope to not only calm your fears, but prompt you to action in order to avoid any unwanted estate planning consequences down the road.

If it’s not already abundantly clear, today I’m writing about the inheritance rights of children in New York, and specifically those that are left out of a parent’s estate plan (sometimes referred to pretermitted heirs). For better or worse, it’s more common than you might think that children are left out of a parent’s Will. The good news is that New York State recognizes that drafters sometimes make unintentional planning errors. The legislature has set in place certain rules to ensure that pretermitted children are not precluded from inheriting.

Under New York law, a child omitted from a Will is entitled to inherit the equivalent of his or her intestate share of the estate, which translates into that portion of the estate that he or she would have received had the parent died without a Will in the first place. The only caveat to this rule is that the parent must not have expressly disclaimed or disinherited the child. In New York, short of successfully contesting a Will, testamentary provisions that disinherit an adult child will typically stand. So while disinheriting a child can prove to be the death knell to his inheriting, a simple inadvertent omission won’t typically prove fatal to a child inheriting.

Could the confusion of this entire scenario have been avoided from the get go? Of course, and in particular, there are two ways it could have been achieved. The first method I offer is a simple alternative for those who don’t want to regularly revisit their wills. For anyone planning on having more than one child (and even those who aren’t), a qualified estate planning attorney knows the proper language to include in a Will to accommodate for the possibility of after born children. Consult with counsel and be sure he knows your plans/intentions so that the proper verbiage can be included in your Will. Although this does usually work, it is not my preferred method. It could easily cause resentment between the siblings-either because Mom didn’t love me enough to even bother updating her Will, or the classic, “Mom loved you best.”

The second method I offer is a bit harder to accomplish. As far as I’m concerned, Wills and Estate Plans occasionally need to be revisited and adjusted based on the present conditions of your life. Plain and simple, these adjustments are absolutely necessary as the circumstances in one’s life change, whether it be because of a new child, divorce, retirement, etc. In order to do your heirs justice and make sure that your wishes are carried out, update your Estate Plan as necessary. While it’s easy to be lazy and assume that your existing Will accomplishes all of your intended estate planning goals, don’t make assumptions. It might cost you a little bit extra to revisit your plan on occasion, but it could mean the difference between your wishes being carried out or not.

Study Finds the Roberts Supreme Court the Friendliest Court to Business in Decades

Posted: May 28th, 2013

The decisions of the current Supreme Court are the friendliest to business of any court since World War II, according to a recent study published in the Minnesota Law Review.

In “How Business Fares in the Supreme Court,” Lee Epstein, William M. Landes, and Richard A. Posner discuss their analysis of nearly 2,000 decisions from 1946 through 2011. The study considered cases with a business on only one side. A vote in favor of the business was considered a pro-business vote.

The authors concluded that five of the ten Supreme Court Justices who have been most favorable to business currently serve on the Court, and two of them, Chief Justice John G. Roberts, Jr. and Justice Samuel A. Alito, Jr., ranked at the top of the list of the 36 most pro-business Justices in the study. The study found that after Roberts and Alito were appointed to the Court, the other three conservative Justices became more business-friendly in their decisions. The authors surmise that “the three may not have been as interested in business as Roberts and Alito and decided to go along with them to forge a more solid conservative majority across a broad range of issues.”

In an article about the Minnesota study that appeared earlier this month in the New York Times (http://nyti.ms/19krzbQ), Adam Liptak highlighted two areas in which the Supreme Court has recently exercised its pro-business view: (1) by protecting companies from class action lawsuits, and (2) favoring arbitration to resolve business disputes.

In March, the Court dismissed an antitrust class action that Comcast subscribers brought against the company, finding that the plaintiffs were not sufficiently cohesive as a class to allow the suit to continue as a class action. In that decision, Comcast v. Behrend, the Court affirmed its 2011 decision in Wal-Mart v. Dukes, in which the Court threw out a sex discrimination class action brought by a million and a half female employees. As Liptak noted in his article, “[t]he decisions essentially required early scrutiny-by a judge, not a jury-of the ultimate legal question in high-stakes cases [i.e., which party should prevail], sometimes before all the relevant evidence has been gathered.” Business groups, which have sought to limit plaintiffs’ ability to bring class actions, applauded the decision.

The Supreme Court has also given businesses extra protection in the area of dispute resolution. In AT&T Mobility LLC v. Concepcion, the Court found that a form AT&T required its customers to sign requiring the resolution of disputes through arbitration rather than in court was a valid contract. As Liptak notes, this decision empowered businesses by allowing them to shield themselves from class actions by way of arbitration agreements.

According to the Minnesota study, the Roberts Court is far friendlier to businesses than any of its recent predecessors. This blog will trace decisions of import from the Roberts Court and analyze the impact of these decisions on business.

License is Required for Playing Music in Public Establishments

Posted: April 23rd, 2013

Tags: intellectual property

Business owners should be advised that a license is required for any public performance of music. Some owners are unknowingly playing music in their restaurants, bars, gyms, and storefronts from CDs, iPods, or MP3 players in violation of Copyright Laws.

What is needed are public performance rights — the right to play music that the general public will hear in one way or another. Public performance rights licenses are handled by two very large companies named ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music Incorporated). Each one handles a catalog of about 4,000,000 songs. Their fees depend upon the type of establishment, size, etc.

Further information on how to obtain a license from BMI and ASCAP can be found at:

www.bmi.com/licensing and www.ascap.com/licensing/generallicensing.aspx

The penalty for failing to obtain a license is a potential lawsuit for copyright infringement. Under the Copyright Law, the violator can be subject to sanctions, which can include an injunction and the copyright owner’s actual damages, as well as the infringer’s profits, or statutory damages of up to $30,000 for each copyrighted song performed without a license (up to $150,000 if the infringement is willful). The infringer can also be required to pay the copyright owners’ legal fees. The law further provides for criminal sanctions against those who willfully infringe on a copyright for commercial advantage or private gain.

Being caught without a license is a risk that some establishments are taking every day. The license fees, however, are nominal compared to the potential penalty, if caught. Although music may not be a major part of a business, any public establishments that plays or wishes to play music for their patrons should be aware of the license requirement.

Supreme Court Holds that the “First Sale” Doctrine Applies to Copies of Copyrighted Works Lawfully Made Abroad

Posted: April 21st, 2013

Copyrighted works imported into the United States from abroad are subject to the same “first-sale” rules as items purchased in the United States, according to a Supreme Court decision issued last month (Kirtsaeng v. John Wiley & Sons, Inc., No. 11-697).

Supap Kirtsaeng, a citizen of Thailand, came to the United States in 1997 to study mathematics at Cornell University and the University of Southern California. While working on his degrees, Kirtsaeng asked friends and family in Thailand to buy copies of foreign edition English language textbooks in Thailand, where they were sold at low prices, and mail them to him in the United States, where he then sold the books, reimbursed his family and friends, and kept the profit.

Publisher John Wiley & Sons commenced a copyright infringement lawsuit against Kirtsaeng in 2008, alleging that Kirtsaeng’s resale of the books infringed on Wiley’s exclusive right to distribute under §106(3) of the Copyright Act. Kirtsaeng countered that he had acquired the books legitimately and that the “first-sale” doctrine codified in §109(a) of the Copyright Act allowed him to resell or otherwise dispose of the imported books without permission from the copyright owner.

The first-sale doctrine is a limitation on the exclusive right of copyright owners to distribute copies of their work under the Copyright Act. The first-sale doctrine provides:

Notwithstanding the provisions of §106(3) [the section granting the owner exclusive distribution rights], the owner of a particular copy or phonorecord lawfully made under this title . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

Kirtsaeng’s defense, therefore, was that although §106(3) forbids distribution of a book without the copyright owner’s permission, once he lawfully obtained a copy, he was free to dispose of it as he wished. Essentially, that “first sale” in Thailand, Kirtsaeng argued, exhausted the copyright owner’s exclusive distribution right under §106(3).

However, the District Court sided with Wiley at trial, finding that the first-sale defense did not apply to “foreign-manufactured goods.” On appeal, the Second Circuit agreed, noting that the first sale doctrine applies only to “the owner of a particular copy . . lawfully made under this title.” According to the Second Circuit, works made abroad could not have been made “under this title” or under American law, and thus the first-sale doctrine was inapplicable.

But the Supreme Court rejected this argument last month, holding that the first-sale doctrine indeed applied to copies of copyrighted works lawfully made abroad. Writing for the majority, Justice Breyer noted that the phrase “lawfully made under this title” was not intended to exclude works made overseas. (The Court also observed that “geographical interpretations create more linguistic problems than they resolve.”) Instead, the Court focused on the serious consequences of upholding the Second Circuit’s analysis, such as preventing a buyer in the United States from selling or giving away copies of a foreign film or a dress made abroad, finding that this scenario could not possibly have been the legislative intent.

The Court’s decision in Kirtsaeng affirmatively settled a long ambiguous question as to whether the first-sale doctrine applied to copyrighted works manufactured abroad and imported into the United States. The Supreme Court had previously held in Quality King Distributors, Inc. v. L’Anza Research International, Inc., 523 U.S. 135 (1998) that the first-sale doctrine applied to works manufactured in the United States but first sold outside the United States, then imported back. But the Quality King court never resolved the issue ultimately decided in Kirtsaeng as to the more common situation in which copyrighted works manufactured abroad are then imported into the United States.

The Kirtsaeng decision may result in lower prices in the United States on copyrighted works such as books, because publishers can no longer use American copyright law as a basis to sell similar versions of the same work at greatly varying prices depending on the country. But, copyright owners may respond by localizing their offerings in particular markets so that, for example, the English language version of a textbook sold in Thailand would no longer serve as an adequate substitute for the American version of the same book. Others may rely more heavily on encoding products in region-specific formats, so that a DVD purchased in one country will not play on a player in another country. Undoubtedly, although long awaited, the Court’s decision will not be the last word on this issue.

Estate Planning: Does Your 18-Year-Old Need It?

Posted: April 19th, 2013

By: Martin Glass, Esq. email

Tags: estate planning

The quick answer to that question is “yes.” When your child turns 18 years of age, he is considered a legal adult. As such, he should have an estate plan. This includes a health proxy, power of attorney, and even a will or trust. While it is difficult for parents to think about this as being necessary, failure to take these measures can have unexpected or severe consequences. When your child reaches the age of maturity, HIPAA (Health Insurance Portability and Accountability Act) prevents even you, his parents, from obtaining confidential medical information. He needs to have communicated that he wishes for you to still be involved through HIPAA release documents. Additionally, if your child is unable to communicate his desires for his own medical care (or decisions regarding life support) you would need to be appointed as his health care proxy to make these decisions on his behalf. Otherwise, it could require years of litigation before you can make those types of decisions.

While it may be difficult to do, it is important that you discuss with your young adult their end-of-life wishes. You should know whether or not she wishes to be kept alive by heroic measures, even if it means she would not have a meaningful quality of life. As hard as it may be, you should even discuss with her other issues such as burial preferences, organ donations and cremation. Other important decisions, such as who may receive her important tangible property (her “stuff”) and her financial assets need to be worked out and documented as well.

It is important to note that not every person has the capacity to make decisions. In those cases you, as the parent, must now seek legal guardianship through the courts. You do not have the power to make medical and financial decisions on your child’s behalf without it. But even then, in a situation where your child still has the ability to state her preferences, goals, and objectives, and also supply input as to whom would make her decisions, her input should be considered, even if you are appointed as her guardian.

You should also be aware that often a parent or grandparent has given funds to a minor, and upon the age of 18, these funds are vested and are now owned by this young adult. In the unfortunate event that your child should predecease you, these assets may have to be probated and will pass to that person’s heirs-at-law. Assuming that they don’t have a spouse or child, in New York the next in line are his parents. In many situations, you have set up an estate plan for yourselves divesting assets in order to reduce your estate. This is typically done for estate tax or for asset protection purposes. The unplanned receipt of assets from your child could greatly impact your plan. A straightforward will, directing that the assets be left to individuals other than you, possibly siblings, or a charity, would alleviate this unintended problem.

So, whether it’s to make sure their wishes are being carried out or to further accomplish your planning goals, it may become important for your child to create an estate plan. This usually would simply be a straightforward will, power of attorney, health care proxy and living will. Of course, if your young adult has already accumulated some assets, his or her estate plan may be more complex and require the use of trusts. A qualified estate planning attorney would be able to help create the best plan of action.