Seeing the bottom line awash with red ink yet again, Susie Sears reluctantly decided to shut down her family-owned Widgets-R-Us. Pressured by thinning margins, a weakening labor pool and increasing competition from foreign markets, Widgets-R-Us is leveraged to the hilt and profits are insufficient to pay even her secured debt. With no viable assets or business, there’s nothing to mortgage or to sell. How can Susie and her fellow company officers walk away without becoming personally liable?
Jim Duncey is more than just the majority owner of Duncey’s Caps, Inc. – he’s the face of the company, appearing on billboards, in television and radio ads, and on the home page of the company’s website. He is one of the most influential and recognizable business leaders in the city. On Saturday night Jim and his wife Diane attend a charity event at the toniest country club in town. With a little “liquid courage” Jim was the high bidder at the night’s live auction, which earned him respect (and envy) from those in attendance. On the way home Jim ran a stop sign and t-boned another vehicle. The driver of the other vehicle suffered serious injuries that would force her to spend several weeks in the hospital. Police investigating the accident gave Jim a field sobriety test, which he failed. Jim ended blowing a .12 BAC and was charged with DWI. The accident, along with Jim’s arrest, was the lead story on the Sunday news.
With the face of the company in legal and public relations trouble, Duncey’s board of directors called an emergency meeting to discuss the situation and consider options. What can they do?
Before Duncey’s Caps, Inc. hired Bud Dunop as its new human resources manager in 2018, all of Duncey’s human resources issues were handled by Dot Uris. One of Dot’s responsibilities was to have all new employees complete their new hire paperwork, which included an agreement for the employee and Duncey’s to arbitrate any employment-related disputes. The arbitration agreement included a signature block for Dot to sign on behalf of Duncey’s. Instead of signing each employee’s agreement, Dot just placed it in the employee’s file.
One day Don “Crash” Gordon broke his foot when he walked around the corner of the warehouse and stepped into a bucket that another Duncey’s employee placed on the floor. Crash filed a lawsuit against Duncey’s when it failed to cover his medical bills. Duncey’s attorney filed a motion to compel arbitration, attaching a copy of the arbitration agreement that Crash signed but Dot did not. Will Duncey’s be able to get this lawsuit sent to arbitration? Continue Reading Are Employers Required to Sign Employees’ Arbitration Agreements?
Duncey’s Caps, Inc. hired Bud Dunop as its new human resources manager for 2018. Bud quickly determined that Duncey’s needed a formal employee policy handbook. Included within the handbook was an arbitration agreement requiring employees to arbitrate all claims against Duncey’s relating to the employee’s employment.
Bud then held training and review sessions with all Duncey’s employees. At the end of each session, each Duncey’s employee was required to log into a computer with their own self-created password. Once logged in, the employee was given the opportunity to fully review the handbook and the arbitration agreement. The employee was then required to click a box stating that he or she “acknowledges” receiving and reviewing the handbook, and that by clicking the box they “agreed” to abide by the handbook and the arbitration agreement. The employee was then required to enter their initials and click “submit.”
A few weeks later, one of Duncey’s employees who electronically acknowledged the handbook was injured on the job. The employee filed a lawsuit. Will Duncey’s be able to get this lawsuit sent to arbitration? Continue Reading Are Your Employees’ Electronically-Signed Agreements Enforceable?
N. O. Smelz, owner of Smelz Rug and Carpet Cleaning, learns that Brite Bank has submitted a request for proposal to clean the carpets at their 15 branches in the DFW area. When Smelz reads the request he notices it includes a diversity provision that requires at least 10% of the total amount paid by Brite to go to a vendor, or a subcontractor, that is a minority-owned, woman-owned, veteran-owned, LGBT-owned, or disabled-owned business. Smelz is concerned because he doesn’t fall into any of those categories, and he doesn’t believe any of his long-time suppliers do either. But because his cleaning company has the best reputation around, Smelz submits his proposal anyway. Will Smelz get the contract? Continue Reading Supplier Diversity Policies
After setting up new locations in Texas, N. O. Smelz, owner of Smelz Rug Cleaning, obtained a hazardous waste permit from the Texas Commission on Environmental Quality for the disposal of the company’s cleaning chemicals after use. In addition to the permit, the TCEQ issued a compliance plan to Smelz. Because he was too busy managing the financial side of the company, N.O. delegated oversight and implementation of the compliance plan to Wright Handman. Compliance is running smoothly for about a year, but business is growing quickly and Handman doesn’t have time to train Rhule Brecker, a new carpet cleaning technician. In fact, Handman never trains Brecker. During Brecker’s second year on the job, Handman sees that Brecker is pouring the used cleaning chemicals into a storm drain on the street, which violates the compliance plan. Two weeks later, Smelz gets a notice from TCEQ that it believes Smelz is violating the compliance plan and that an investigation will be conducted. Brecker fesses up, and Handman also admits he didn’t train Brecker properly. TCEQ sues Smelz, Handman and Brecker for civil penalties of $50 per day for failing to properly implement the compliance plan. Are Handman and Brecker personally liable to the State?
Agreeing with Benjamin Franklin that there is nothing certain except death and taxes, Sketch Wood and his partner Minnie Brix, owners of Wood & Brix, and their 200 employees are certain that the new tax law will affect them, but they are a bit overwhelmed. Looking for an overview, Sketch asked his favorite non-tax lawyer to hit some of the high points of the first significant reform of the U.S. tax code since 1986. Continue Reading New Tax Law – Impacting Your Small Business and You
Frustrated with the high number of employees that did not show up for work in the fall and winter last year, Jim Duncey, the owner of Duncey’s Caps, Inc., issues a memo to all employees that they must provide proof that they got a flu vaccine shot by January 1, 2018 or they would be fired. Tommy Goinmyownway protests, saying that his religious beliefs prohibit him from getting vaccinations. New Year’s Day comes and Tommy is fired after he doesn’t provide the required proof. As he is escorted out of the plant Tommy threatens to sue Duncey’s for discrimination. Does he have a claim? Continue Reading Sticking it to Your Employees During Flu Season
Frazzled by the incessant demands for her company Acne Brick’s financial records from her husband’s divorce lawyer Ditcher Quick, company president Annie Acne was wondering what her next maneuver might be when her Information Technology officer walked into her office. The subpoena that he was holding demanded production of all Acne email communications between Annie and (i) her divorce lawyers and (ii) her attorney brother who helped her rearrange just a few things. Annie immediately called her attorney Elle O’Quent to ask, “Can Acne Brick be ordered to produce Annie’s emails from Acne’s computer?” Continue Reading Is Your Company Email to Santa Protected?
Board of directors member Y.I. Gnough, who is also president of Algae Company, is in a pickle. Although denying any knowledge of sexual harassment and misconduct by the company founder and deal-maker Iam Algae, three co-board members resigned fearing for their reputational and financial survival. Employees are fueling the rumors of women who complained of unwanted touching, sexual harassment and other over-the-line behavior. Even Algae’s former counsel discloses that several years ago the board and the company were told of three or four confidential settlements with women. Company investors suggest that Y.I. and fellow officers and directors breached their fiduciary duty. Should Y.I. be concerned about his pocketbook and his reputation?