The New York Law Blog: August 2016
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Wednesday, August 31, 2016

Visas For A Temporary Visit To The United States - U.S. Immigration Law Basics

NY Business Law, NY Family Law, Immigration, Temporary Visas
Generally, U.S. Immigration Law can get very complicated. Depending upon the nature and duration of a given visit, knowing the basics about the various types of Temporary Visas to the U.S. available will make the Visa application process easier to navigate.

A Temporary Visa, also called a Non-Immigrant Visa, can come in many different forms. Each type of Temporary Visa to the United States has different criteria that must be fulfilled. For just about all Temporary Visas, the applicant must show a plan to return to the applicant's home country once the Visa expires. Depending on the type, other Visas may require proof of ties to home of origin, such as proof of residence. Obviously, the legal intent of most Visa applicants is for the applicant's time in the U.S. not to be permanent.

Different types of Temporary Visas include:
  • F-1 Visa: Also known as a "Student Visa," the applicant for this Visa is required to show proof that s/he is enrolled in a government-recognized educational institution within the country. 
  • TN Visa: The non-immigrant NAFTA Professional (TN) Visa allows citizens from Canada and Mexico to work in the United States for U.S. or foreign employers.
  • E-2 Visa: This kind of Visa allows individuals to enter and work inside the U.S based on a "substantial" investment s/he will control while in the country.
  • B1/B2 Visa: These Visas are known as "Visitor for Business" / "Visitor For Pleasure" Visas. Typically, the individual wishing to visit the U.S. for three months or less need not even apply for this kind of Visa. 
  • K-3 / IR-1 / CR-1 Visas: These Visas are used for relatives of non-immigrant spouses and immigrant spouses to enter the country. 
  • H1B Visa: This is a Non-Immigrant Visa that allows domestic companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as in architecture, engineering, mathematics, other sciences, and medicine. Recent news stories link these types of Visas to supermodels. See this recent article about supermodels obtaining H1B Visas
Needless to say, this list is not exhaustive of what Visas are available for coming to the U.S. To learn more about what types of Temporary Visas are available to visit the U.S., please check the U.S. Department of State's Directory of Visas for immigrants and non-immigrants.

When applying for a Visa, check eligibility requirements straight away. However, keep in mind that determining an applicant's eligibility for a Visa is not a cut-and-dry matter. Many circumstances could make an applicant ineligible for any kind of Visa. Examples of factors that will disqualify an applicant include whether the applicant has committed a serious crime or stayed in the U.S. without a Visa. However, for each category of ineligibility, a "waiver" may be available.

This not only makes Visa applications that much more complicated to manage, but it also highlights the need to retain an attorney to manage your application for you.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, August 30, 2016

FAA: (Some) Small Businesses Can Start Using Drones

NY Legal News, Commercial Drones
New federal regulations take effect that will allow commercial uses of drones.

The rules created by the Federal Aviation Administration (FAA) cover unmanned aircraft weighing less than 55 pounds flown for "routine non-hobbyist use."  The rules govern simple uses of drones for tasks like surveying property, real estate site inspections and photography.  The rules do not (yet) allow use of drones for deliveries and shipping, which require autonomous technology.

Among the new FAA rules are the following:
  • All drones have to remain in Visual Line-Of-Sight (VLOS) of the pilot. The remote pilot in command and the person manipulating the flight controls must remain within VLOS of the visual observer.

  • No first-person-view cameras;

  • Operation is only allowed during daylight hours. Twilight flying is permitted if the drone has anti-collision lights;

  • Maximum ground speed of 100 mph; 

  • Maximum altitude of 400 feet; and

  • Pilots must be over 16 years old and must obtain a "remote pilot airman certificate" issued by the FAA.  To obtain the certificate, applicants must take an aeronautical knowledge test at an FAA-approved facility and pass a background check.
Vehicles will also need to register with the FAA, which expects as many as 600,000 drones will be in use commercially during the next year.

What do these new regulations mean for small business?  These regulations clear the way for new industry and enhanced tools in existing industries. Other industries can benefit from commercial drones like farmers tending large fields, oil and gas firms that can investigate pipelines or security companies using drones to patrol (but they would need to apply for a waiver to operate after dark). Even media companies may start employing drones for on-site coverage.  Finally, the inevitable momentum towards use of drones for delivery services seems to be a matter of "when," not "if" it will happen.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, August 29, 2016

New York City Forcing Certain Employers To Sign "Labor Peace" Agreements

NY Employment Law, NYC
New York City is trying to force certain employers to sign "labor peace" agreements with unions.

Last month, NYC Mayor Bill de Blasio issued an executive order requiring property developers receiving at least $1 million in “financial assistance” to require any large retail and food service tenants on the premises to accept “labor peace" agreements.

These so-called "labor peace" agreements would prohibit the companies on these premises from opposing the union organization of employees. These kinds of agreements already exist in the state's Public Authorities Law, which requires hotels, convention center operators and certain contractors to negotiate a "labor peace" agreement with corresponding labor organizations.

The law applies specifically to all "retail or food establishments" on the premises of any "city development project" that is expected to be larger than 100,000 sq. ft, that (a) sells goods, food, or drinks, (b) that employs, or will employ 10 or more workers and (c) occupies, or will occupy, over 15,000 gross sq. ft. on the premises.

The executive order defines "financial assistance" as discretionary assistance for the improvement or development of real property, economic development, job retention and growth, or other similar purposes provided either (a) by the city, or (b) indirectly by a city economic development entity. This includes:
  • cash payments or grants; 
  • bond financing; 
  • tax abatements or exemptions; 
  • tax increment financing; 
  • filing fee waivers; and
  • energy cost reductions, 
"Financial assistance" does not include non-discretionary, or "as-of-right" assistance or benefits given any person based on state or local legislation.

The executive order also defines a "city development project" as those projects subject to an agreement between a developer and the NYC Department of Housing Preservation and Development or a "city economic development entity" (such as a local development corporation, not-for-profit corporation, or a public benefit corporation or like entity that provides discretionary economic development benefits) where the property developer receives, or is expected to receive, at least one million dollars of "financial assistance" form the sources described above.

The order applies only prospectively from July 14 and does not apply retroactively to any existing businesses where this executive order would apply or for any ongoing development projects started prior to that date.

In our opinion, this order is yet another obstacle for business development in New York City and another win for organized labor. First, developers that have to follow this executive order may have difficulty in attracting "anchor" businesses who would otherwise lease newly-developed large spaces if not for this requirement.

Additionally, the executive order may face a challenge, as we can foresee details in the federal labor laws, such as the National Labor Relations Act and subsequent decisions from the National Labor Relations Board, preempting this executive order. For example, according to some sources critical of these types of agreements,"labor peace" required employers to waive certain federally-protected rights in order to avoid future labor disruption.

We will continue to monitor issues surrounding these controversial agreements.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, August 26, 2016

Suing Overseas Companies In New York - Understanding The "Long Arm" Statute

NY Civil Procedure, Long Arm Statute
A recent decision highlights the importance of understanding New York's "Long-Arm" Statute when considering to sue an overseas business.

A New York court ruled that a flight attendant claiming that a defectively designed jump seat on an Airbus made in France caused her injury on a flight from Boston to Washington D.C. could not sue for damages in New York because she had failed to fulfill the requirements of New York's "long arm" statute contained in CPLR 302(a).

To sue an entity in New York under the "long arm" statute, you must be able to prove that the other party:
  1. transacts any business within the state or contracts anywhere to supply goods or services in the state;  or

  2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act;  or

  3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce;  or

  4. owns, uses or possesses any real property situated within the state.
When determining if a party "transacts business" in New York, it is necessary to establish that the defendant’s activities within New York are purposeful and that there is a substantial relationship, or "nexus" between the transaction of business and the claim asserted.  Facts that would establish such a "nexus" are:
  • whether the defendant has an on-going contractual relationship with a New York plaintiff; 

  • whether the contract at issue was negotiated or executed in New York and whether, after executing the contract, the defendant visited New York for the purpose of meeting the parties to the contract regarding the relationship; 

  • the choice-of-law clause in the contract; 

  • whether the contract required the defendant to send notices and payments into the forum state or subjected them to supervision by a corporation in the forum state. 
Airbus argued that it leased this particular aircraft to the flight attendant's employer, United, in France and that therefore the flight attendant could not establish a "substantial nexus" between the business Airbus transacts in New York and the flight attendant's injuries.

The judge agreed, holding that the flight attendant, who failed to allege where her cause of action arose "failed to demonstrate any relationship between her alleged injuries and the state of New York."

This raises an important lesson for potential litigants dealing with potential out-of-state defendants. Whether your claim involves personal injury, contracts or any other business concerns, it is critical that you review all relevant New York contacts and the factors we noted here before commencing litigation to ensure that you can obtain jurisdiction over that party before filing anything.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, August 25, 2016

Employment Law News: NLRB Judge Says Chipotle Is Liable For Labor Violation For Enforcing "Unlawful" Social Media Policy

Emp[loyment Law, NLRB recent decisions
This week, the National Labor Relations Board (NLRB) ruled this week that Chipotle Mexican Grill had an "unlawful" social media policy that violated the National Labor Relations Act (NLRA). 

According to published reports which detail the facts of this particular case, the dispute stems from charges filed on the worker's behalf by the Pennsylvania Workers Organizing Committee regarding Chipotle's social media policy and allegations that the employee was wrongfully terminated.  Apparently, Chipotle sought to enforce an "oudated" social media policy that  was not lawful under the NLRA. This policy had already been replaced, but supervisors sought to enforce the older policy against an employee who made postings on Twitter criticizing his employer about adverse working conditions.  

Since the outdated policy is what prompted Chipotle to act, the NLRB found that Chipotle was liable for violations that occurred resulting from enforcing that improper policy. 

According to the NLRB's website, the NLRA protects the rights of employees to act together to address conditions at work, and includes certain work-related conversations conducted on social media, such as Facebook and Twitter. This protection extends to employees engaged in "protected concerted activity,"such as discussing terms and conditions of employment with fellow employees.

If accepted by the full board, the ruling orders Chipotle to stop prohibiting employees from placing posts on social media about their wages and terms of employment and order that the employee be re-hired with back pay.

So what can you and your business take away from this?  

The first lesson is rather obvious: keep key employees informed of what changes are made to company policies, especially those charged with enforcing those policies.  Chipotle suffered from a breakdown in communication between policy-makers and supervisors, which was then passed down the chain to the aggrieved employee.  Communication is key. 

Second, social media can be a tremendous tool to grow your business, your brand and your visibility because it has changed the way people communicate. But like any tool, it can be abused or misused.  Your business should develop a social media policy that meets the NLRA's standards, balances the rights of your employees and protects your company, its intellectual property and its brand goodwill. 

Take a look at what other companies have successfully developed as a basis to understand what works. Then, consult an attorney to create a tailor-made policy that will integrate into your company's policies. 
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Wednesday, August 24, 2016

Three Tips To Negotiating The Best Royalty Agreement

Royalty Agreement, Licensing Agreement
When negotiating the use of your property, patent or process in exchange for royalties, these three basic tips are key to prioritize while commencing negotiations.

This week, we discussed some lessons learned from the recent news that the famed Broadway troupe Blue Man Group has been sued over a dispute over royalties brought by a composer as an example of how not to handle setting up a royalty agreement.  Here, we'll discuss factors to keep in mind while negotiating a royalties agreement so you can (hopefully) avoid problems.  
  1. Words Matter.  Definitions, requirements and terms do not always mean what you think they mean.  That is why you should include a section defining material terms in your agreement. These definitions can be crucial, and must be discussed with your attorneys so that the final document is clear and concise. 

  2. Dollars and sense.  Obviously, financial terms of agreement are the most meaningful to everyone. Typically, royalties are calculated by multiplying "net" sales by the royalty percentage agreed upon by the parties.  But, who is is to say how "net" sales are calculated? Watch out for unclear payment terms - what you think you are going to get may not be the same as what you actually get. This all depends on what is considered "gross" and "net" revenue, what payments are "guaranteed", what are the costs of conducting business, who will bear those costs. If you leave the negotiation without a clear understanding of what these terms are, then you are setting yourself up for failure and a possible trip to the court house.

  3. Protect Your Brand.  While terms may differ depending upon the industry, licensed products or property should meet a certain minimum level of quality agreed upon by the parties.  If you are licensing a brand, you do not want your brand represented in a deficient way.  Set up periodic checks for quality control to make sure brand and product meet your standards, and set up consequences when they fail to make the grade.
Unless you, are an experienced negotiator, you should hire an attorney to manage these agreements in order to minimize your risk now and in the future. 
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, August 23, 2016

What NYC Businesses Can Learn From The Blue Man Group Royalties Dispute

NY Business Law, NY Contract Law
There are lessons to be learned by fledgling NYC businesses from the recent legal battle over royalties between Blue Man Group and a collaborator.

If you are a New Yorker, or a tourist visiting New York City, then you probably know of Blue Man Group, a troupe of street artists that have grown into a global brand that has entertain millions annually. Recently, a collaborator and songwriter has sued them for breach of a royalty agreement.  

Ian Pai's lawsuit contends that the parties agreed he was entitled to a fixed percentage of box office revenue from performances allocated into a "pool" for composer royalties for 20 songs used in the original Blue Man Group show. Pai alleges that, over time, he noticed a significant decrease in the percentage allocated to the royalty pool and that he is entitled to more money for his songs.

Royalties are paid to legal owners of intellectual property, such as music used in musical compositions and performances.  Often, the amount of payment is based on sales. For instance, when a record label distributes a song either by CD or online, a royalty payment is due as compensation to the owner of the property, patent, copyrighted work or franchise by those who wish to use  it to generate revenue. In most cases, royalties are legally binding.

Mr. Pai also alleged that there exists an "industry standard," or a criteria generally accepted within the field of song writing followed by the members therein, for royalties not lower than 6 percent.  We believe Mr. Pai is referencing commonly-accepted arrangements for Broadway shows.

Essentially, a royalty agreement is much like other business agreements bound by the fundamental principles of contract law.  However, its applications have a wide range and are an often overlooked tool that small businesses can use to leverage intellectual property. From the situation in the news with Blue Man Group over rights to a song, to multi-million dollar franchise agreements for use of a brand's intellectual property, NYC small business owners should become familiar with licensing and leverage property for profit.

But, there's another lesson to learn from this situation.  It appears, given the statement regarding "industry standards," that there may not be a written agreement between the parties in place in this case.  This is a common mistake when friends enter into a business arrangement - always reduce your agreements into a written document to protect everyone involved.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, August 22, 2016

Proposed Change to NYC Hiring Practices Intended To Tackle Wage Inequity

NY Employment Law, NYC Gender Wage Gap
Courtesy:  New York Times
A proposed change to local law seeks to make certain customary hiring practices illegal for employers in New York City.

This week, the NYC Office of Public Advocate introduced proposed legislation that would make it illegal for employers to inquire into a job applicant's wage history during the hiring process.  The bill would prohibit New York City employers or employment agencies from asking about an applicant's salary history or searching publicly available records or reports for the same. New York City employers would also be prohibited from relying on any such information in determining the compensation package at any stage in the employment process unless the applicant disclosed information willingly and without prompting.  The proposed new law would not apply to any actions taken by an employer in following any federal, state or local law.

Similar legislation recently passed in Massachusetts.  Indeed, the issue has become a hot political topic, with groups advocating that New York state take up federal and state measures to bridge the wage gap.

The proposed law is based on policy recommendations from a wage equity report from NYC Public Advocate Letitia James that found women in New York City face a "significant wage gap" across industrial sectors that is worse than the national average.

What does this mean for businesses employing workers in New York City?  Nothing, at the moment, because this bill is winding its way through the New York City Council and will not take effect until 120 days after the law would be adopted.  But, we would recommend that businesses in New York City change their evaluation of prospective hires to conform with this new proposed law and to focus on references and verifiable information (like experience, certifications, etc.) in assessing the value of a future hire.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, August 19, 2016

COBRA: Basic Definitions And Applicability For Small Businesses

NY Employment Law, NY Health benefits
To conclude our series of federal laws that every small business owner must know, we discuss an employer's obligation to provide health insurance under the law.

(For other stories in this series, you can read our posts about best practices to avoid age discrimination New York's new laws involving family and medical leave and federal and state protection of employees with disabilities.)

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employees and their families are protected should they lose employer-sponsored health benefits. In general, most employers with 20 or more "employees" sponsoring health plans on more than 50 percent of its typical business days in the previous calendar year must offer each "qualified beneficiary" who would otherwise lose coverage under the plan because of a "qualifying event" an opportunity to elect continuation of the coverage received immediately before the qualifying event.

The definition written above can seem complicated at first because it contains terms, phrases and exceptions (like those above written in bold) that determine whether the law is applicable, what plans may be available. Employers should familiarize themselves with the basic meanings within the law:

  • Most "employers" are subject to the law.  COBRA broadly defines an "employer" as a “person for whom services are performed” and include those with common ownership or part of a controlled group as defined further in the law. 

  • All common law "employees" of the employer are counted when determining if an employer is subject to COBRA. Part-time employees may count as a fraction of a full-time employee. Self-employed individuals, independent contractors and their employees and directors of corporations are not counted towards this legal threshold, which is 20 employees.

  • Generally, a "qualified beneficiary" is any individual who, on the day before a "qualifying event," was covered under a group health plan maintained by the employer either as the covered employee, the spouse of the covered employee, or the dependent child of the covered employee. As with any law, exceptions may apply. 

  • A "qualifying event" is any one of the following events which would result in loss of health insurance coverage: 
  1. the death of the covered employee;
  2. the termination of a covered employee's employment for reasons other than gross misconduct; 
  3. a reduction in a covered employee's hours; 
  4. the divorce or legal separation of a covered employee and spouse; 
  5. a covered employee becoming entitled to benefits under Medicare; 
  6. a dependent child ceasing to be a dependent child of the covered employee under the terms of the group health plan; and
  7. with respect to certain retirees and their dependents, chapter 11 bankruptcy proceedings of an employer.
The general rule is that group health plans are subject to COBRA, but there is a two-prong test to determine if the law applies. First, the arrangement must provide medical care. The second prong is that the arrangement must be maintained or established by an employer. Examples of group health plans subject to COBRA include HMOs, self-insured medical reimbursement plans, employee assistance programs, and others.

There are several group health plan exceptions to COBRA, which do not apply to:
  • Health plans sponsored by the federal government, as there are other laws that require similar continuation of coverage;
  • Certain plans sponsored by churches, or church-related organizations;
  • Small-employer plans maintained by an employer that normally employed fewer than 20 employees on at least 50 percent of its typical business days during the preceding calendar year.
Small businesses should understand the penalties should it fail to provide insurance coverage - or even notice of benefits under COBRA - include fines, penalties and exposure to liability in court for statutory penalties. To minimize your business's exposure to these penalties, it is important that you understand the basic obligations your business has under this legislative scheme and that you consult with the right legal and insurance professionals who will help your business determine your compliance with COBRA.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, August 18, 2016

Legal Protection For Employees With Disabilities In New York

As part of our ongoing series of postings bringing awareness to certain laws every New York business owner must know, we bring your attention to laws that protect employees with disabilities.

(For other stories in this series, you can read our posts about best practices to avoid age discrimination and New York's new laws involving family and medical leave.)

While many employers are not familiar with the Americans with Disabilities Act as providing accommodation for third parties with disabilities, many fail to recognize that the law also provides employee protection.  The law, as amended by the ADA Amendments Act, protects employees from job discrimination based on (1) physical or mental disability, (2) recorded history of disability or impairment or (3) a substantial impairment that limits a major life activity (defined in the law as hearing, seeing, speaking, walking, breathing and many other manual tasks), which is meant to be defined broadly.

Having a disability covers only half of the standard.  Employees making a discrimination claim based upon ADA must also be qualified to perform the essential functions or duties of the job up to the employer's requirements for the job, and be able to perform the essential functions of the job with or without reasonable accommodation.

"Reasonable accommodation" means actions taken which permit an employee, prospective employee or member with a disability to perform in a reasonable manner the activities involved in the job or occupation sought or held. Examples of reasonable accommodations include:
  • modified equipment or devices;
  • adjusted work schedules;
  • re-assignment;
  • modified training and policies; 
  • support services for people with impaired vision or hearing; and
  • making the workplace readily accessible to and usable.
Reasonable accommodations do not impose an undue hardship on the business from which action is requested.

Depending upon the industry your business is engaged, ADA issues may arise.  For example, the food services industry requires high standards of cleanliness and prohibits some workers with communicable diseases that can be transmitted through food.  While ADA prohibits businesses from asking applicants about medical issues and requiring a medical examination, after a business makes a conditional job offer, businesses may then ask about an applicant's health and require a medical exam, so long as the business treats all applicants in the same job category the same.  But keep in mind that this example highlights the fact that employers can only inquire about a worker's health if the inquiry is related to the job and necessary for the conduct of the business.

Every business should establish an ADA policy that is known to all employees and job applicants. This policy can be adopted with guidance from the Equal Employment Opportunity Commission, which provides a great guide for small businesses, by looking at sample policies or by consulting an attorney that can create policies tailor made for your business.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Wednesday, August 17, 2016

Business Compliance Basics: Age Discrimination Protection In New York

ADEA Age Discrimination, New YorkAs part of our ongoing series of posts intended to familiarize you with laws you must follow if you are running a business in New York, it is important to understand the way the law protects employees from age discrimination.  

Age discrimination is when an employer makes employment or management decisions based on an employee's age and not on his or her job performance, skills or qualifications. There are multiple layers of protection from the federal, state and local levels in New York. 

Age discrimination is not limited to hiring and firing. Claims for age discrimination can be based on age bias within the workplace, like passing over employees for promotion, failure to provide necessary training programs, distribution of "valuable" work to younger employees and other decisions within the operations of the business that are discriminatory. Age discrimination can take many forms - a resistance to new processes, and a lack of aptitude for new technology are typically "code" for such behavior.

At the federal level, the law protects workers age 40 or older from age discrimination. If you work or apply for work at a company with 20 or more employees, the Age Discrimination in Employment Act (ADEA) generally prohibit employers from basing decisions on hiring and firing on age.  Companies should note that employees can bring claims under ADEA not only for glaringly obvious terminations and decisions based upon age, but also neutral factors that resulted in a disproportionately high impact on older workers. 

At the state and local levels, both the State of New York and New York City have passed human rights laws that take ADEA a step further. In New York, if you work or apply for work at a company that employs only 4 or more employees, employers are prohibited from basing employment decisions on age unless age is truly necessary for the specific position.  

So what is an employer to do?  Especially in tough economic times, it is important to have an efficient and effective workforce. Employers considering workforce restructuring should weigh the risks of incurring employee claims and other potential liability from incorporating neutral means of determining workplace performance.  Evaluation must include whether the selection of these individuals can be justified by business necessity, or in the case of older workers, by reasonable factors other than age.  

So long as your business bases employment decisions upon objective measures and methods, you should stay relatively clear of the pitfalls of age discrimination.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, August 16, 2016

NY's Family Leave Law: What It Means For NY Small Businesses

NY Small Business, NY Family Leave Act, NY employment law, NY small business
NY became the 5th state to mandate family leave in April, 2016
Earlier this year, New York enacted the NY Family Leave Law, which mandates NY businesses, including small businesses, to provide family leave for most employees.

This article is part of our ongoing series of reviewing laws that NY small business owners must follow. 

Under the new law, your NY business must offer both full-time and part-time employees who have been employed for a minimum of 6 months up to 12 weeks paid time off if they are (a) new parents (including adoptive parents), (b) individuals who need to take care of a family member with a serious medical condition or to (c) individuals with a need to relieve family pressures after a spouse, domestic partner, child or parent has been called to active military service.

The new law applies to every kind of business.  There is no exception for NY small businesses.

Starting on January 1, 2018, eligible employees can get up to eight weeks at 50 percent of their weekly pay, as computed by the NYS Department of Labor.  Annual increases occur until 2021, where eligible employees can get up to 12 weeks at 67 percent of their weekly pay.

An eligible employee may take the paid family leave to care for a new child anytime within the first 12 months after the child's birth or placement for adoption or foster care.  For care of a seriously ill relative, employees will be able to take their paid leave time intermittently in increments of one full day or one fifth of the weekly benefit.  The law also guarantees job protection and continuation of health care benefits.

If you are an employer, especially a small business in New York, you need to prepare for the commercial and financial impacts of this law sooner rather than later. Your business is about to absorb additional employment costs, decreased productivity and increased administrative costs.  You will need to amend internal policies and handbooks to reflect these changes.  And, you have less than a year to begin preparations.

Now is the time to consult with an attorney to start preparing for the additional burdens imposed by NY's Family Leave Law.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, August 15, 2016

Basic Business Compliance: Federal Laws That NY Businesses Must Follow

Federal Compliance, Employment Law
Don't roll the dice with your business!
Depending upon certain factors, every New York business must comply with federal laws governing employment and liability to third parties.  This week, we are going to look at three federal laws that you need to know and ensure that your business follows.

We have already discussed the recent changes to New York law as it pertains to Pregnancy Discrimination Act (PDA) / Family Medical Leave Act (FMLA). PDA prohibits discrimination on the basis of pregnancy, childbirth and other related medical issues by businesses with 15 or more employees. This does not just include the legally mandated time-off for family and medical leave, which we will address shortly. On a larger scope, FMLA grants job-protections and unpaid leave to certain workers in companies with at least 50 employees working within 75 miles of the work site. We encourage you to check out how the law has changed in New York

ADA / ADA Amendments Act: The ADA Amendments Act (ADAAA) provides certain protections for workers with disabilities, but only applies if your company has fifteen or more employees. That being said, your business must be ADA-compliant regardless of how many people you employ because it applies to accommodations for customers. If your New York small business services customers on-site, then you must provide ramps and other accommodations for customers using wheel chairs or other devices when they are entering or exiting your place of business.

Age Discrimination in Employment Act: The Age Discrimination in Employment Act prohibits employers from discriminating against people age 40 or older in hiring, firing, layoffs, wages and benefits.

Consolidated Omnibus Budget Reconciliation Act: COBRA gives workers and their families who lose their health insurance benefits the right to choose to continue with those benefits provided by their group health plan under certain limited circumstances such as job loss, reduction in hours worked, job transitioning, death, and other life events.

Now that you have had a taste of what is to come, check back daily for in-depth analysis of these laws that business owners in New York must understand and follow.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, August 12, 2016

Business Management Basics: Understanding The Business Judgment Rule

NY Business Law
If you are starting a business, you shouldn't worry that you will be subject to a lawsuit if things don’t work out, because, in New York, there is a legal concept called the "business judgment rule."

Officers and directors of start-up corporations are responsible for managing and directing the business's affairs. As the business grows, so does the level of responsibility for officers and directors.

Under the "business judgment rule," officers and directors of a corporation are immune from liability to the corporation for losses resulting from corporate decision making within their authority that were made in good faith and decided with reasonable skill and prudence. This is significant because the recovery of any successful claim against the company will be limited to the company's assets only.

In my experience, matters where I would argue that the "business judgment rule" come up in the context of small businesses where there is a dispute between stakeholders and in homeowner's associations and condominium or co-op boards where members dispute a decision. These kinds of cases turn on the facts of a case. So it is important that you are clear and upfront about your situation with your attorney.

Because of the significance of this responsibility, courts in New York give a lot of deference to the decisions the directors and officers must make to operate a business.  In many cases, the decision-maker will be shielded from personal liability for a business decision reasonably made in good faith because the court does not want to frustrate the entrepreneurial spirit or to discourage people from taking management roles in growing businesses and professional endeavors.

However, the business judgment rule is not a license to act within the business for your own self-interest or to make unreasonable decisions. Officers and directors will not be shielded from liability for reckless decisions made by officers and directors, including those decisions that take business opportunities from the business for personal gain.

In the end, the law demands officers and directors of businesses act responsibly and prudently - not perfectly.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, August 11, 2016

Report: NY's Daily Fantasy Sports Law Contains Major Flaw

NY, DFS, FanDuel, DraftKings
In following up on an earlier story we wrote about the waiting game set up by the New York State government for daily fantasy sports, we are happy to report that DFS businesses like FanDuel and DraftKings are back open for business in New York.

NY Gov. Andrew Cuomo signed a bill into law allowing fantasy sports operators to apply for a license in the state.  The law also makes provisions for operators to serve the market almost immediately via a temporary permit.

And this is where a controversy may still be brewing.

According to DFS advocates, the NY State Gaming Commission erred in implementing the law because DraftKings and FanDuel agreed to cease operating was in order to ensure that they would be eligible for a license.

According to Legal Sports Report, the application itself states that a DFS operator is eligible if it makes available an interactive fantasy sports platform offering contests to persons located in New York State who have also offered such a platform prior to November 10, 2015, and requires evidence of the same.

With the new law taking effect, smaller DFS businesses now have a significant barrier to entering the New York market, mainly because this language within the application makes prior operations a necessity to obtain the license. Smaller operators that may have avoided the New York market waiting for the legal dust-up to settle are, as the law is written, excluded from the market.  The application as written also stops new operators not in existence prior to November of 2015 from operating in New York.

Regardless of whether this was an unintentional error in drafting or an intentional exclusion of legitimate businesses that are not being punished for following the existing law, the application language will be an issue that will probably be played out in the court of public opinion and, possibly, in New York courts.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Wednesday, August 10, 2016

Legal Debate: Can A Hashtag Be Registered As A Trademark?

Trademark Law, New York
Talking to a colleague today, we both came upon an interesting legal question: is a social media hashtag a trademark that one can register?

For those who are not familiar with hashtags, it is a word or phrase preceded by a "#" that accompanies text. Hashtags are used to categorize the content of a social media posting on Facebook, Twitter and other platforms, group content together and make social media postings searchable. Businesses use hashtags to promote product and engage audiences throughout social media. Social media platforms have even developed a stream of revenue by allowing businesses and individual to "promote" hashtags and receive preferential listing on their websites.

The emergence of social media hashtags has had a huge impact in social media marketing. It is a great way to communicate social media messages, build brand loyalty and associate identifying characteristics with a brand and its audience. According to the International Trademark Association, over 600 federal trademark applications have been submitted to the United States Patent and Trademark Office (USPTO) for hashtag marks.

However, the law remains murky on what exactly a hashtag is.  The USPTO's rules recognizes that a term containing a "#" may be a trademark "if it functions as an identifier of the source of the applicant's goods or services." However, those same USPTO rules will not allow registration of hashtags consisting solely of descriptive or generic wording for goods or services.

To further complicate matters, a federal district court in California recently found that hashtags are not trademarks.  In the matter of Eksouzian v. Albanese, the California district court held that hashtags are “merely descriptive devices, not trademarks, unitary or otherwise” and “merely a functional tool [and] not an actual trademark.”

The decision seems to directly conflict with the USPTO rules and pose an interesting, and possibly costly, conundrum for businesses.  This decision seemingly invalidates the USPTO rules on hashtags without even addressing the rules themselves. Those owners that have successfully registered hashtags may be once again in danger of losing the investment in goodwill that the registration provided.  It remains to be seen what other courts will do when faced with the same or similar issue.

For now, the International Trademark association recommends that businesses take steps to protect their brands on social media, including consider registering "only the underlying word or phrase without the hash symbol or the term 'hashtag'" to clarify its functions as a source identifier. Another tip to follow is to not include any trade name or primary brand in a hashtag so you avoid the "trap" used in the Ekouzian case.

We here at IPG will be monitoring developments in this area of the law with great interest.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, August 9, 2016

Business Management Basics: Investment Money Is For The Business, Not Strip Clubs

Skully, Fraud, Lawsuit
A recent lawsuit makes allegations that, if true, shows what not to do if your New York startup business obtains any investment funding.

According to Business Insider, Marcus and Mitch Weller, the brothers who founded Skully, a company looking to design next-generation "augmented reality" motorcycle helmets that raised millions in crowd-sourced funds, allegedly used those company funds for personal purposes instead of its intended use of creating a marketable and profitable business.

If you believe the allegations, the brothers Weller may have a bit of explaining to do:
The lawsuit goes on to list 19 examples of the reportedly false expenses, including:
  • Rent for a personal apartment in the Marina district of San Francisco, then the subsequent moving and painting expenses when they moved to the Dogpatch

  • Restaurant meals and personal groceries charged to the company AMEX card

  • A payout of $80,000 to an unnamed cofounder, which was recorded as a trip to China

  • A $13,000 Mai Tai and Extreme Tech Challenge in Las Vegas

  • A Lamborghini rental during a personal vacation

  • A "world tour" trip that included $2,000 for limos in Florida, $2,000 for a strip club, and $2,345 worth of paintings from Hawaii.
A notice on the company's Indiegogo page now alerts those customers who preordered the $1,450 helmet that they'll have to go through bankruptcy court to try to reclaim any money.
Skully's board of directors forced the brothers out mid-July, and it was reported this week on Friday, that the company's shutting down entirely. This leaves a huge legal mess to clean, as Skully raised 2.5 million dollars - not to mention over $11 million in venture capital money that must be addressed.

If true, the Weller brothers breached a fundamental duty in business - the fiduciary duty of care.  It is a legal principle that directors and officers of a corporation must act in the same manner as a reasonably prudent person in their position would in making all decisions in their capacities as corporate fiduciaries.  Part of that duty is the responsible use of corporate funds - which does not include personal uses like vacation rentals and keeping good financial records that reflect actual corporate expenditures - and accountability to investors and creditors.

Take this story as a cautionary tale: starting a business is a serious matter.  If you are lucky enough to obtain investment financing and crowd-sourced money, account for every single penny and recognize your responsibility to investors, creditors and your fellow management and ownership.  In the long run, you can all earn money together that you can then use for all the lush, extravagant things you wish.
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 *Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, August 8, 2016

FDA Cracking Down on Underage Sale of Electronic Smoking Devices

FDA, electronic smoking devices
Small businesses that sell electronic smoking devices like vape pens and e-cigarettes will now have to treat them as "tobacco products" thanks to new FDA regulations intended to crack down on underage sales of these items.  

This week, a earlier ruling from the U.S. Food and Drug Administration (FDA) goes into effect which prohibits the sale of vape pens, e-cigarettes and other electronic smoking devices to consumers under 18 years of age. For small business retailers, this means the sale of e-cigarettes is no different from the sale of cigars and other traditional cigarettes, meaning they must verify a consumer’s age using a valid photo ID.  Adults under the age of 26 must show a photo identification to buy them.

The FDA will also require manufacturers to register with it and place warning labels on all product packaging.

The regulation is intended to immediately impact the use of these products by young users.  According to the Centers for Disease Control and Prevention use of electronic smoking devices among teens tripled in a year. Another recent study found that vapor from e-cigarettes contains 31 harmful chemicals, including potential carcinogens.

Until the introduction of these regulations, the electronic smoking device market has been a virtual "wild west" industry.  Products were virtually unchecked, including those that included the sale of vials of liquid nicotine, with little or no quality check. 

Small retail businesses will immediately take notice of the new rules for selling these devices, including corner stores and smoke shops that are prevalent throughout New York City.  It is unclear if or when any state inspection policy will begin for enforcement of these regulations, but the best advice for any small business selling these products is to self-regulate these sales before incurring any possible penalties.   
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, August 5, 2016

Developing News: New NLRB Labor Rules Negatively Impact U.S. Franchises

Franchise Law, NLRB
Revised federal rules from the National Labor Relations Board that give employees more leverage in settling workplace disputes are negatively impacting franchisers and franchisees, leaving them with higher costs and forcing them to scale back plans for future expansion.

The new policy adopted by the National Labor Relations Board (NLRB) broadens the circumstances in which two businesses can be deemed as employers of the same pool of workers. This means trouble for fast-food, construction and other industries reliant on contract workers and employees of franchisees, who will now be exposure to increased labor disputes before the NLRB, which adjudicates workplace disputes and oversees union-organizing. The intention behind the NLRB's revision is to ensure workers can unionize and collectively bargain with businesses that help control their fates.

As things stand now, the NLRB will review "test cases" in the franchising industry to further define what critics have called a vague and overly-broad standard, but it appears that the NLRB will, to some extent, hold some businesses that have an active involvement in determining the terms and conditions of a person's employment and the work performed responsible for workers' grievances and disputes - even if the business is not the worker's direct employer.

The same would apply for franchise workers and union laborers, among others. For example, a fast-food employee trained under the guidance of the franchiser but paid by the franchise could potentially bring labor claims against both businesses.

The effects of these new rules also go beyond the franchise market. Commercial property owners that hire building management companies may be responsible for a person hired by that company who becomes  injured due to an unsafe working condition, even if the building owner does not sign his / her check.

What does this mean for franchises? It means that franchisers may be pulled into labor disputes involving workers employed by franchisees, and may have to pay back wages to workers fired for, among other things, protesting low pay or trying to join a union. Franchisers could also be swept into collective-bargaining talks alongside store owners, even though the franchisees retain total control over the workers at the stores.

This also mean that franchisees could lose their independence to hire, fire and manage workers. Or, the opposite may apply, as franchisers may scale back on worker training and other guidance out of fear of exposure to these new rules.

It's a regulatory no-man's-land because no one yet knows what would determine who is in "control" of a worker's employment.  Stay tuned for further developments.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, August 4, 2016

International Business News: Business Groups Sue Over U.S. Crackdown on Corporate Inversions

U.S. Treasury Department Sued Over Corporate Inversion Regulations
Two business groups have sued the Obama administration over the government's crackdown on U.S. companies moving abroad to reduce their tax burden.

The process is known as a corporate inversion. Also called a tax inversion, a corporate inversion is the practice of a corporation relocating its legal domicile to a nation with lower taxes like Ireland, Britain and Canada, while retaining its material operations in its higher-tax country of origin. Such a process is legal, but has drawn criticism from some politicians who say U.S. companies that do them are avoiding their tax obligations. Inverting U.S. companies usually leave their core U.S. operations intact domestically, but transfer their legal tax domiciles abroad to the country of the acquired company. 

In April, the U.S. Treasury Department unveiled a package of rules intended to discourage inversions, and were specifically aimed at transactions involving non-U.S. companies. In creating these new rules, the U.S. Treasury Department stated that the corporate inversion process is "not consistent with the purposes" of federal law because it allows"a foreign company to bulk up" on U.S. assets and then enter into another inversion.

The new rules stopped Ireland-based Allergan Plc, which has grown through a series of acquisitions, from completing a planned a $160 billion combination with Pfizer - the largest inversion ever attempted. Allergan and Pfizer are not parties to the lawsuit though both are either directly or indirectly associated with the Texas Association of Business.

The recently-filed matter by the U.S. Chamber of Commerce and the Texas Association of Business in Texas federal court is the first in the nation to claim that a recent regulation promulgated by the U.S. Treasury Department in April exceeded the Department's authority and, essentially, re-wrote the law. According to the lawsuit, the claimants alleged that the U.S. Treasury Department's regulatory scheme violated the Administrative Procedure Act because it lacked authority to act, its rules were arbitrary and capricious, and the Treasury did not permit public notice and comment.

Specifically, the claimants are challenging a three-year limit on foreign companies from acquiring U.S. assets in an attempt to avoid ownership thresholds for a subsequent inversion.

We here at IPG take international business concerns seriously, and will be monitoring this matter closely so that we can advise our clients on developing issues.  
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Wednesday, August 3, 2016

Business Formation Basics: Filing a DBA Name In New York

NY Business Law
If you want to conduct business under a trade name that is different from the name used to form your New York business, then you need to file a DBA, or a "doing business as" name, in New York. 

DBAs are useful for a number of reasons. They allow a business to open a bank account under a different name. They also allow a business to build a brand or product in a name other than the legal name of the business itself. 

Perhaps the most well-known example of a company using a "DBA" is Doctor's Associates Inc., which is doing business under the well-known brand "Subway." As the story goes, Doctor's Associates Inc., which derives its name from the principal owner's initial goal to earn enough money to pay for medical school tuition, was created for the operations of the "Subway" restaurants as the franchise expanded.

There are different requirements for different entities wishing to create a DBA. Corporations, limited partnerships, and limited liability companies in New York must file a Certificate of Assumed Name that complies with Section 130 of the General Business Law. Other entities, such as general partnerships, sole proprietorships, and limited liability partnerships, must file an Assumed Name Certificate with the county clerk in every county within the state in which it conducts or transacts business.

Setting up a DBA in New York has certain conditions. First, the chosen DBA name must not already be in use. Second, the chosen DBA name cannot use words such as "Incorporated," "Corporation," "Limited," and other words that can be found here.

Filing a DBA is relatively easy, so long as you follow the instructions and file the proper form.  But, as with most filings with any government entity, it is always best to consult an attorney to help you wade through the particulars. 
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, August 2, 2016

International Law News: Supreme Court Extends RICO Law To Cover Acts By Domestic Organizations Overseas

RJR Nabisco v. EC Decision
The Supreme Court determined in RJR Nabisco v. European Community that the Racketeer Influenced and Corrupt Organizations Act (RICO) — a statute created to fight organized crime across the country, can be applied to prosecute criminal acts outside of the United States and, in some cases, even create a private right of action.  

Enacted in 1970, RICO is the federal racketeering statute that makes controlling certain "enterprises," such as a corporation or other less formal association of persons or other entities a crime when one can prove a pattern of criminal behavior. RICO has been the centerpiece of the government's efforts to combat organized crime, labor unions and other conspiratorial entities. It is also used to prosecute all manner of entities, including corporations, engaged in various forms of criminal conduct. RICO also includes a private right of action where parties injured in person or property by actions resulting in violations can bring a civil action that may include treble damages. 

In this recently-decided matter, the European Community sued in the Eastern District of New York claiming that RJR Nabisco was working with organized criminal groups in South America and Europe, including, among other claims, a scheme to launder drug money. 

After opposing decisions at the trial and appellate levels, the U.S. Supreme Court issued a writ of certiorari to determine whether the RICO statute applied to actions that occur outside of the United States. It held that RICO can, under certain circumstances (detailed in the opinion) apply to conduct that occurs outside of the United States. This actually adds extended reach for prosecutors to use in making RICO cases criminal. However, the decision also limits the ability of private RICO plaintiffs to pursue their civil claims if they can’t prove a domestic injury, which means that the European Community has no recourse.  

Why does this matter to businesses? Because this is the second decision from the U.S. Supreme Court addressing business practices internationally, including whether warrants apply to property held outside of the country, which we discussed earlier this year. It is also important because the decision is a significant expansion of federal law across borders. The decision reduces the likelihood that the federal government will have to deal with foreign policy problems raised in subsequent litigation while at the same time confirms the federal government’s ability to bring a RICO lawsuit against a domestic business for criminality involving foreign conduct.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.