Many New York small businesses are turning to arbitration to solve disputes
Continue reading
Restrictive Covenants in New York Franchise Agreements: Strategic Use of Restrictive Covenants by Franchisors
New York franchise agreements typically contain restrictive covenants against competition, or a
Continue reading
Restrictive Covenants in New York Franchise Agreements: Strategic Use of Restrictive Covenants by Franchisors
New York franchise agreements typically contain restrictive covenants against competition, or a franchise non-compete clause. Such provisions are meant to prevent franchisees whom have rights to operate a business modeled on the franchise from engaging in activities like operating a business that competes with the franchisor following termination of the franchise relationship. Most franchise agreements have a limited restrictive covenant term. Restrictive covenants in franchise agreements serve a number of purposes, including: Protecting the franchisor’s goodwill; Protecting the franchisor’s confidential information; Ensuring loyalty to the franchise network; and Preventing former franchisees from becoming future competition. In-term Covenants & Post-term Covenants: Franchise agreements shall often include two kinds of restrictive covenants: “in-term covenants” and “post-term covenants.” In-term covenants limit what a franchisee can do during the term of the franchise agreement (for example, restricting the franchisee from operating a competing business within a certain geographical vicinity during the term of the
Continue readingTermination of New York Commercial Leases based on Violation of New York Law
New York landlords may terminate a commercial lease agreement based on a tenant utilizing a leased premise for a violation of New York or U.S. Federal Law. A recent NY court holding leads credence to the understanding that even a single violation of law related directly to the illegal use of a New York leased property can lead to the the ability of the NY landlord to immediately void the NY lease and seek eviction. New York Real Property Law Eviction for Illegal Use of Property New York Real Property Law Sec. 231(1) allows for a NY landlord to immediately evict a NY tenant for using the leased property, in New York, for an illegal trade or other illegal use of the prmises. Hayes & Simon attorneys suggest, also, having a clause in your New York commercial lease agreement noting that you have the right to evict a New York
Continue readingFinding an Efficient New York Business Lawyer for your NY Business
We here at Hayes & Simon obtain numerous emails and calls from potential clients in search of a New York business lawyer to act as part-time general counsel. The majority of these intakes come from referrals from present clients, referrals from other lawyers and some trickle in via this New York Law Blog and the Korean Law Blog. From our contacts, we believe that many smaller businesses in New York are having serious difficulties in finding attorneys in New York that are NY business savvy, have the ability to efficiently work for the client and/or have an inability to handle the specific issues the client is dealing with. This dismal situation seems to stem, primarily, from the high cost of top-notch legal services in NY and the lack of many top-notch New York lawyers working in the startup and growing business space. This reality is, only, partially true. Many great
Continue readingNew York Sexual Harassment Law Basics for New York City & State Employers
The #MeToo movement has motivated the State and City of New York to implement a battery of new sexual harassment laws applicable to all businesses in New York City and New York State. The new New York laws should motivate employers in New York to update NY employment rules, NY employment agreements (if applicable), NY non-disclosure agreements and the New York company’s sexual harassment policies & education programs. Major Changes to New York Sexual Harassment Laws Notification via a Poster of Employees of the Sexual Harassment Policy of New York City All New York City employers must prominently display an English and Spanish language poster notifying NY employees of their rights and obligations under NY law. The poster was created by the New York City Commission on Human Rights and can be obtained from the Commission. Notification via a Fact Sheet of Sexual Harassment Facts All employers in New York
Continue readingEnforcement of Foreign Judgments in New York Courts: Collecting debts based on foreign judgments in New York
Enforcement of a foreign judgment in a New York court should first proceed based on the type of foreign judgment and how you obtained the foreign judgment. The procedure requires an understanding of not only New York Law, but international law and treatises. The procedure should be performed by a New York attorney without experience in this area of law. If you are interested in enforcing a New York Judgment in a foreign court please see: Enforcement of New York Judgments Abroad. If you are interested in enforcing a New York judgment in Korea please see our sister blog at: Enforcing of Foreign Judgments in Korea. Recognition of judgments of foreign courts is not automatic in New York, a procedure in place must be followed prior to recognition of a foreign judgment in a New York court. The foreign judgment must first be authenticated in accordance with an Act of
Continue readingFranchises Available to Entrepreneurs in New York
If you are serious about investing in a franchised business it best to consider the three basic type of New York franchises, typical, in the New York market. The following are the major types of New York Franchises. Business Format Franchises: In business format franchises, a company expands by supplying independent business owners with an established business, including its name, products, rules and trademarks. The franchisor, generally, assists the independent owners in launching and running their businesses. In return, the business owners pay fees and royalties to the franchisor. In most cases, the franchisee also buys its business supplies from the franchiser or from approved vendors. Fast food restaurants are good examples of this type of franchise. Product Franchises: Also called a “trade name franchise.” Product franchises involve the sale and/ or manufacture of products. The business model covers the overall management of the sale of these products. A franchisor supplies
Continue readingBuying or Selling A Business in New York? Do Your “Due Diligence”
Before buying or selling a New Yorkbusiness, make sure you understand how to perform a “due diligence” for the business. This is essential for all businesses whether you are the buyer or a seller. A good motivated seller of a business will, usually, receive a better deal if pre-due diligence work is performed in order to satisfy the potential requests of a buyer – in a timely fashion. We often see a buyer questioning documents produced when the documents are not produced in a timely manner. Recently, I was approached by a prospective client about selling a small business, and I asked if she knew what performing a “due diligence” was. The blank stare on her face was all the answer I needed. Many small business owners have heard the term, but know nothing about what it means to properly carry out the due diligence process. “Due diligence” is a
Continue readingDraft A Clear Statement of Work in New York
When hiring a business or individual in connection with a project, it is important that all parties create and agree to a clear and precise Statement of Work. A Statement of Work (SOW) is a formal document entered into by parties involved in a project that specifies in clear understandable terms the work to be completed. A SOW should captures and defines the specific work to be performed for a client, deliverables, and a timeline that a vendor or contractor must execute – at a bare minimum. A SOW needs to contain the material terms of what needs to be done in as definitive and precise of a manner as possible. Generally, these are the three major types of SOWs: Design Based SOW – This type of SOW tells the supplier how to do the work. The statement of work defines buyer requirements that control the processes of the supplier.
Continue readingUnderstanding New York’s 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. Exceptions do exist. 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/co-op boards where members dispute a decision. These kinds of cases turn on the facts of a case. So it is important that
Continue readingNew York Age Discrimination Protection Basics
As part of our ongoing series of posts intended to familiarize you with New York and Federal laws you must follow if you are running a business in New York, it is important to understand the way the New York law protects employees from age discrimination. Age discrimination is, in short, 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. Employees are protected via multiple layers of laws and administrative bodies. Employees may be able to file an age discrimination suit at the U.S. federal, New York State and New York City level. Scope of New York Discrimination Claims New York age discrimination causes of action are 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
Continue readingFiring an Employee in NY? Exceptions to NY “At Will” Employee Law
If your New York business hires employees in NY, then it is essential that you know what hiring someone as an employee “at will” in New York is and what rights and protections at-will employees are afforded under New York At-Will Employment Law. New York is generally considered an “employment at will” state. This means that a private sector employer can hire and fire an employee at will (as the company pleases). The discharged NY employee will usually have little to no legal recourse and even when the firing is facially unreasonable. In short, the employee may be fired for any or even no reason (with the exceptions noted below). Exceptions to General New York At-Will Employment Rule Union Contract If the employee is a union member and employed under a union contract, then s/he is entitled to the protections written into the respective contract and/or collective bargaining agreement. Employee
Continue readingStarting A Nonprofit Corporation in New York
Here is a not-so-quick introduction of how to start a nonprofit corporation in New York. A 501(c)(3) organization, which are formed for religious, charitable, scientific, literary or educational purposes, is eligible for federal and New York state tax exemption. But before you can have a tax exempt organization, you need to create a non-profit organization in New York. Here is what you need to do to create a non-profit organization in New York. Creating a Non-profit Organization in New York Choose Directors Choose 3 initial directors over the age of 18, preferably people who live in New York. Select a Name Choose the name of your non-profit corporation that is distinguishable from the name of any other corporation. To assist you, New York’s Department of State has a business name search database of New York businesses to determine whether your name is available. Select the Address Determine the address and location
Continue reading
NY State and Federal Tax Exemption for your New York Nonprofit
Now that you created your New York nonprofit, let’s discuss how your New York nonprofit can apply for state and federal tax exemption. After your New York nonprofit has held its first organizing meeting, you will need the continued assistance of an experienced attorney to file documents with the federal government and New York State. By this point, you should have already consulted an attorney about the formation of your organization and hopefully the attorney made sure that you have created an entity that the IRS will find qualifies for tax exemption. IRS Form 1023 (Federal Nonprofit) For the federal government, you will need to complete and file IRS Form 1023, which is a long and detailed form that asks for extensive information about your New York nonprofit’s organization, history, finances, structure, governance policies, operations and more. The IRS Form 1023 should be accompanied by appropriate supporting documents that your
Continue readingNew York Non-Compete Agreements
The validity of a non-compete agreement in New York is measured in light of relevant principles and the particular facts and circumstances surrounding your business. Non-compete clauses are commonly found in employment agreements across many industries regardless of size or products / services offered. Non-compete agreements impose restrictions on future employment of employees. The validity of a specific non-compete clause is taken on a case-by-case basis via courts in New York. New York courts shall, generally, consider what is reasonable. Those non-compete agreements that are considered “reasonable” are agreements with: The non-compete clause is no broader than is required to protect the NY business’s legitimate business interests; The non-compete clause does not unduly burden the employee; The non-compete clause does not injure the public; The non-compete clause is not for an unreasonable duration of time; and The non-compete clause has a reasonable and limited geographic scope. If an employee to a
Continue readingGood New York Lawyers Beats Goliath Everyday In New York Courts
It can be daunting to think about suing anyone, let alone a huge department store like Macy’s. The same Macy’s that brings us Santa Claus and the opening of the holiday season with their annual Thanksgiving Day Parade televised nationally. The same Macy’s with department stores all over the United States. However, big guys can be beat in New York courts with the assistance of proactive, aggressive and nuanced New York lawyers. Now imagine if you are an immigrant with little command of English that was injured when you slipped and fell on a wet floor that Macy’s negligently failed to warn you about. Your life has been flipped upside down. You are in constant pain from your injuries, you lost your job and your mental outlook is in a downward spiral of fighting depression and anxiety. Because of all this the plaintiff was going through and the language barrier,
Continue readingInternational Divorces in New York Courts: Grounds for Divorce in New York
In New York, a divorce may be granted by a New York Family Court based on a mutual agreement of separation, an order of separation by a New York court, for “Fault” attributable to the other spouse or for No-Fault Grounds. A New York court may not grant a divorce in New York based on any other grounds, but the aforementioned New York grounds for divorce. Getting a divorce in New York does not need to be stressful or time consuming. Often the most important issue in handling a divorce is hiring a New York street-smart divorce attorney. We handle many international divorce matters in New York. Often our clients are foreign nationals married to New York residents or vice versa. These matters require, not only a New York family law attorney, but a New York attorney that understands international divorce requirements and the needs of resident aliens residing in New
Continue reading
New York Shareholder, Member and Partnership Business Disputes In NY: New York Business Disputes & Litigation Basics
New York Business Disputes We handle numerous shareholder and member disputes. The main reasons for these disputes are because of the lack of an adequate Shareholder, Operations or Partnership Agreement, the lack of due diligence or nefarious acts by a member, shareholder or controlling directors. Analyzing whether to file a lawsuit is, often, a matter of economics. A civil law suit at the court of first instance may take over a year. Your attorney in New York will need to file a complaint to in a NY court, file a reply to the defendant, depose witnesses, file pre-trial requests and make numerous appearances in court and at pre-trial conferences. The process is cumbersome, time consuming and of course will not be cheap. Thus, we, always, sit down with our clients and do a detailed cost-benefit analyses. Many New York law firms push to file a lawsuit for obvious reasons, however,
Continue readingWinding Up Your New York Business: Essential Steps to Business Closure in New York
If you are looking to close your New York business, these are some of the many essential steps you should take. In most cases you shall require a New York Bankruptcy lawyers to assist in the windup process: Vote to Close the New York Business No matter what form your NY business has taken, you must get all owners’ approval to close the business. In some forms, it is easier to do than others. For example, if your New York business is a sole proprietorship, you simply make the decision on your own. If it is a New York limited liability company or partnership, you and your partners must agree to dissolve the business based upon the rules set out in your organizing documents and the laws of the State of New York. Dissolve your Business with the New York Government If your New York business filed documents with any
Continue readingEnforcing Foreign Judgments in New York: Personal Jurisdiction Necessary?
The New York State Court, in a case of first impression held that in personam jurisdiction is not necessary to recognize and enforce judgments in New York from a foreign court. The case that decided the matter is Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting & Fin. Services Co., 36 Misc. 3d 389, 948 N.Y.S.2d 533 (Sup. Ct. 2012). The case is a case of first impression in New York and is a pivotal case that will, likely, lead to more cases like this case being heard in New York courts. The court, in this New York case, granted summary judgment in favor of the Abu Dhabi Bank and, thus, recognized the U.K. judgment. The facts of the case are typical in international judgment enforcement matters. The Abu Dhabi Bank is a company established in the United Arab Emirates. Saad Trading is a Saudi Arabian limited partnership. The
Continue readingFrustration of Purpose as a Tool to Avoid Contracts in New York: The BREXIT Fallout
We have clients that are supplying products to UK companies and UK companies that are being supplied products by U.S. companies. With the surprising outcome of the Brexit vote, the purpose of these agreements are now frustrated because, often, these products are used in finished products assembled in EU nations. This situation often arises in complex products. For example, a U.S. business has a piece of technology that is integrated into a British component. The British component is then further integrated into a finished product manufactured in Germany. The situation is not as rare as you think. We suggest an immediate review of your contracts. With the potential for UK companies to have decreases in sales, a fixed supply contact may be invalidated based on the Frustration of Purpose principle. Obviously, the opposite may also be true. A UK company may be unable to provide products (Impossibility Principle) or provide
Continue reading