Failure to Follow Own Policies Supports Discrimination

Originally published by Thomas J. Crane.

In Office of the Attorney General v. Rodriguez, a supervisor reported possible insurance fraud to her supervisor at the Office of the Attorney General of Texas. Laura Rodriguez believed she had a duty to report fraud, waste or abuse. She reported possible fraud concerning her her long-time friend and administrative assistant, Debbie Galindo. Ms. Rodriguez reported the apparent fraud in January, 2009 to her supervisor. The employer investigated and found her suspicions to be correct, that the co-worker had tried to commit insurance fraud in listing a non-relative on her insurance plan. The supervisor, Charles Smith, later started an investigation of Ms. Roidriguez based on an old complaint about her and based on a newer complaint.

As part of the investigation into Ms. Rodriguez, her complaint about Ms. Galindo came up. The investigators reported to Mr. Smith that Ms. Rodriguez had shown bad judgment as a supervisor. They claimed she had become “irrational” when they asked her about renting a home to Ms. Galindo’s family. In actuality, Ms. Rodriguez did break down and cry when asked about the rental and told that rental to Galindo was not appropriate. Later, Ms. Rodriguez wanted to discipline one of her subordinates. Mr. Smith thought the manner of the discipline was improper and again showed poor judgment on the part of Ms. Rodriguez. In September, 2009, Mr. Smith drafted his first termination memo regarding Ms. Rodriguez. Jo Kirk, an attorney in the HR section at OAG advised Smith to make it a demotion, based on similar discipline of another supervisor at the OAG.

So, when Ms. Galindo was placed on suspension for her insurance fraud, Ms. Rodriguez was herself demoted later that same day in September, 2009. The next day, Mr. Smith issued a written warning to Ms. Rodriguez for the complaint about her by a subordinate, and for her renting a house to Ms. Galindo’s family members. When she was demoted, Ms. Rodriguez had to perform evaluations for all her former employees. Due to that requirement, she fell behind quickly in her new job.

In her evaluation in December, 2009, Mr. Smith gave her high marks, but in the area of ethics, she was rated very low for an alleged business relationship with one of her employees. Mr. Smith said that her business relationship “cast doubt” on her initial complaint about possible insurance fraud.

Ms. Rodriguez then submitted a claim of retaliation, saying that Mr, Smith had included false statements on her evaluation. A few months later, her new supervisor terminated Ms. Rodriguez. Ms. Rodriguez filed suit regarding her termination. The jury found the whistle blower complaint was part of her termination and award her $260,000 in lost pay, compensatory (emotional suffering) damages of $100,000, and lost future pay in the amount of $275,000.

On appeal, the OAG argued the evidence did not support the finding that her whistle blowing was part of her termination and that the evidence did not support the award of lost future pay, or “front pay.” The El Paso Court of Appeals did not agree wit the Office of the Attorney General. The court found that management conduct during the whole process supported the finding. Her supervisor thought it “odd” that Ms. Rodriguez took her concerns to a higher level, instead of disciplining the subordinate herself. The court noted that the employer wanted her to violate its own policy in requiring her to confront Ms. Galindo directly. Ms. Rodriguez wanted to keep her complaint anonymous, as OAG policy allowed. In pressing her to confront Ms. Galindo, the OAG was violating its own policy. Violating an employer’s own policy does help show illicit motive.

Too, the court of appeals found that a comparable employee was indeed comparable because they were accused of similar infractions, even if they had different supervisors. So, it was relevant that the comparable employee was not disciplined as severely as Ms. Rodriguez. Ms. Rodriguez’ replacement as Office Manager suffered from the same degree of backlogs as she did. Yet, her replacement was not fired or disciplined. And, noted the court, the fact that Mr. Smith included false statements in his evaluation of Mr. Rodriguez helps show illicit intent on his part.

Regarding lost future pay, or “front pay,” the court found that Ms. Rodriguez accepted a lower paying job that was not comparable to her last job as Office Manage – only after a fruitless search that lasted 18 months. If the employer believes Ms. Rodriguez could have found a job sooner than 18 months, it has the burden to show that. But, the OAG offered no such evidence.

See the decision here.

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Guardianship and Elder Abuse

Originally published by Kenny Sumner.

Compassionate Elder Abuse Lawyers Serving Victims and Their Families in Texas

The role of guardian is an extremely important legal tool which ensures that the rights and interests of even the most vulnerable members of society are respected and protected. Guardians provide a means for minors, the mentally disabled, and the elderly to be represented in legal proceedings, and protect them from the need for institutionalization or aggressive state involvement.

However, as with many things, the benefits of guardianship also bring with them significant risks. By affording a third party legal responsibility over the financial affairs and decisions of another, guardianships are a vehicle for abuse of those who don’t know better, particularly the elderly.

As our population continues to age, elder abuse within guardianship cases is on the rise. While this does not mean that guardianships are no longer a useful or necessary legal tool, it does require that family members or loved ones close to an individual with a guardian pay close attention to how the guardianship is managed.

The Role of Guardians in Sugar Land

Under Texas law, guardians can be appointed for minors or incapacitated persons by the Texas courts.  Guardians can be appointed to care for the person generally and/or to care for their property and estate.  Thus, they may be asked to monitor an individual’s health and wellbeing, as well as to manage their financial affairs.

Courts supervise the guardianship of the minor or incapacitated person, but a guardian is given wide leeway to manage an individual and his or her estate.  Courts will also monitor how a Guardian is managing the estate and will require an accounting from the guardian for how estate funds are used.   Guardianships for elderly individuals are imposed because the individual is incapacitated and no longer able to represent himself or herself.

Having a guardianship established for an elderly individual is no easy task. Lawyers for the individuals seeking guardianship must show by clear and convincing evidence that an individual is incapacitated. They must provide documentation from a doctor regarding lack of capacity, and a court will appoint an attorney ad litem to represent the interests of the elderly individual and independently investigate incapacity.

Texas courts prefer to impose the fewest restraints possible on an elderly individual’s rights and freedoms, so if there is a less restrictive alternative available, such as appointing a limited power of attorney, this option may be taken before guardianship is imposed.  One caveat; however, is that any less restrictive alternatives must also be feasible, meaning the alternative would actually work to protect the individual.

The Powers and Responsibilities of Guardians

Guardians are considered to be fiduciaries, which means they have important legal responsibilities to the elderly individuals in their care, and that they will be held to the highest standards when managing an elderly individual’s estate. With this responsibility comes significant power over an elderly person – including power over their physical location, care control, protection of the elderly individual, the duty and power to oversee medical and legal decisions, and to make all financial decisions.

Given this broad range of authority, it is unsurprising that guardianships are prone to abuse. Indeed, the national media and national organizations throughout the country have repeatedly highlighted the prevalence of elder abuse in guardianships, and the likelihood that such abuse is even more rampant than the data suggests.

Elder abuse can take the form of neglect or failure to perform the duties and responsibilities imposed by a guardianship, such as the failure to make necessary medical appointments, provide adequate food and nutrition, or give the elderly individual a comfortable living space.

Elder abuse is also frequently financial and can involve unduly influencing the elderly individual into making changes to wills or other financial documents, or simply stealing from the elderly individual’s accounts.

How to Stop Elder Abuse in A Guardianship

If you suspect that an elderly friend or loved one is being abused by a guardian, it is important to report this conduct and your suspicions as soon as possible. Texas laws actually require Texas residents to report elder abuse when they believe that it is happening, including physical or emotional abuse, financial exploitation, neglect, or abandonment.

The Texas Adult Protective Services handles claims of elder abuse and even has an elder abuse hotline for those who wish to make a report. Individuals who report elder abuse to the state are immune from civil or criminal liability as long as they make the report in good faith. Additionally, Texas law keeps the identities of those who report anonymous.

If reported and investigated, elder abuse in Texas is considered a felony. Where a guardian commits willful harm against an elderly individual, he or she may be charged with a first degree felony. Where the harm is due to recklessness or poor decision-making, a second or third degree felony can be charged.

Guardians who engage in elder abuse can also be punished by the courts for failure to properly conduct their court-appointed duties, and face the possibility of civil lawsuits due to the breach of their fiduciary duties.

While these types of actions punish guardians who have already committed offenses, families and loved ones who hope to prevent elder abuse from ever occurring must be extra vigilant in their protection of elderly friends and family.

This often includes continuing to monitor an elderly individual’s mental and physical wellbeing for signs of neglect, emotional distress, or instability. To the extent possible, finances and financial circumstances should also be monitored if possible.

Texas Attorneys Helping Ensure a Successful Guardianship Appointment

For many of our elderly loved ones, guardianship is necessary in order to deal with declining mental capacity that comes with old age, or to deal with conditions such as Alzheimer’s. Indeed, guardianship can be an extremely helpful legal role when used properly.

One of the ways to ensure success in the guardianship process and minimize the risk of elder abuse is to carefully and slowly proceed toward guardianship, making sure all necessary documentation and protections are in place, and that the individual appointed as guardian is best suited for the job. At Romano & Sumner, PLLC, our guardianship attorneys understand the risks and benefits of guardianship in Texas and can work with you to create a guardianship that will protect your loved ones while minimizing the risk of exploitation.   We pride ourselves on serving Sugar Land, Houston, and the surrounding areas. For more information, contact us online or at 281-242-0995.

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The Importance of Demonstrative Evidence in Personal Injury Cases

Originally published by greg.

An essential element of proving damages in a personal injury case is presenting compelling “demonstrative evidence.” Demonstrative evidence takes the form of, “objects, pictures, models, and other elements presented at Read More

The post The Importance of Demonstrative Evidence in Personal Injury Cases appeared first on Baumgartner Law Firm.

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A Houston area example of a Bill of Review’s impact on a Family Law case

Originally published by 1p21.admin.

Yesterday’s blog post dealt with the issue of what a Bill of Review is and how it can be used in a family law case in the event that you had a negative judgment against you that was not due to any wrongdoing or negligence on your part.

This is a topic that requires a little background information to know what is going on, in my opinion, so I would recommend that you go back and read yesterday’s post before moving on to today’s.

With that said, while a Bill of Review may be a foreign term to many of you, in reality it is a legal mechanism that allows you to tell your story to a judge when you had been denied that opportunity previously. Today we will look at an actual story involving people from the Houston area and how their lives were impacted by the filing of a Bill of Review.

Grant v. Grant– Two Marriages and Two Divorces

Let’s meet our cast of characters before we discuss the exciting world of the Bill of Review. The Grants were a married couple that were actually married and divorced two times. Their first marriage occurred in 1994 and the Wife filed for divorce in 2010. As many people do during a divorce, the Grants continued to live together during the divorce case.

Here is where our case gets a little interested. As it happened, the Husband was convicted of a federal crime during the divorce case (unrelated to the divorce) and was sentenced to serve three years in prison. With this in mind, both Husband and Wife wanted to get their divorce case completed before Husband was shipped off to federal prison.

A trial notice was sent to Husband by certified mail (who was under house arrest at the time and was not represented by an attorney) but he did not show up for the trial date.

Ultimately, as it happens when one party doesn’t appear for a trial, the judgment was much more favorable to the Wife and the Husband was none too pleased when he found out. After this, Husband began to serve his prison term as scheduled.

The Grants remarry and our story continues

Approximately one year after their divorce, with Husband still serving time in prison, the Grants decided it would be a terrific idea to remarry one another. After this marriage Wife ended up selling some of the property that she was awarded in the first divorce.

To that point, Husband would still contend that the property was rightfully his separate property and he lost out on it only because he claims to never have received notice of the first divorce trial date.

As luck would have it, our parties divorced again in 2015. The parties had their second Final Decree of Divorce entered by the court, at which point the Husband filed a Bill of Review in regard to the first Decree that awarded the Wife property that he asserted was rightfully his separate property.

The Grants’ Bill of Review Hearing

Husband argued that he was put in a position to lose the property to his now ex-Wife due to his never having received notice of the first trial date.

Wife argued that he did have notice (as provided in the certified letter sent to him by Wife’s attorney) and that he could have gotten permission to leave the house as he was under house-arrest at the time. Husband argued further that Wife did not mention the trial date to him one time, this despite their continuing to live in the same home together throughout the divorce. Husband’s arguments fell on deaf ears and the court sided with Wife.

Husband was not to be denied (again) and appealed the decision of the trial court. The Court of Appeals out of Houston required that Husband prove that the judgment was rendered as a result of fraud committed against him. Husband was prepared for this requirement and argued that:

1. Wife had misled him by never mentioning the trial date to him, again despite living in the residence together
2. Wife had provided the court their home address for sending him correspondence when in actuality the prison address would have been more appropriate as far as providing a last known address. This was important as the judgment was sent to an address where he was not living and caused him to not respond in time to file a motion for new trial

The court did not buy the second argument being made by Husband. They asserted that Husband did not prove that Wife had purposely misled the court as to his actual address.

This left the Husband to need to prove extrinsic fraud in order to win his Bill of Review petition. Extrinsic fraud is necessary to prove when the Bill of Review is not filed within four years of the judgment being signed. Again, the court did not find that fraud was at issue here and as a result Husband left court twice divorced and property-less in regard to the property that was awarded to Wife in their first divorce.

The Law Office of Bryan Fagan- Advocates for Southeast Texas families

This story involved people that live in our area and went through quite a journey through our legal system here.

While their circumstances are certainly unique – the standards applied to them are the same that will apply to you and your family in a southeast Texas divorce. Having experienced and assertive representation can reduce the occurrence of mistakes and mishaps with your own divorce or child custody case.

The Law Office of Bryan Fagan prides itself on representing individuals and families throughout southeast Texas. If you have questions about a particular issue in family law please do not hesitate to contact our office today. A free of charge consultation is only a phone call away, where your questions can be answered by one of our licensed family law attorneys.

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Other Articles you may be interested in:

1. What is a Bill of Review and what impact can it have on a Texas family law case?
2. Can family violence render a Mediated Settlement Agreement void?
3. The Judge Ruled Against Me in My Family Law Case Now What?
4. What does a Default Judgment Mean in a Texas Divorce?
5. WHERE DO I GO TO GET DIVORCE PAPERS SERVED IN TEXAS?
6. I have been served with Divorce Papers – What do I do now in Texas?
7. Roadmap of Basic Divorce Procedure in Texas
8. What Happens if my Ex-Spouse Refuses to Sign the Final Decree of Divorce Revisited
9. What if My Ex Will Not Sign the Final Decree in My Texas Divorce?
10. Waivers – To sign or not to sign? The answer is don’t do it!
11. Special Needs Children in Texas Child Support Cases
12. How to get above guideline child support.

Law Office of Bryan Fagan | Spring Divorce Lawyers

The Law Office of Bryan Fagan routinely handles matters that affect children and families. If you have questions regarding divorce, it’s important to speak with one of our Spring, TX Divorce Lawyers right away to protect your rights.

Our divorce lawyers in Spring TX are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan handles Divorce cases in Spring, Texas, Cypress, Spring, Klein, Humble, Kingwood, Tomball, The Woodlands, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.

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Best Thai Food in Austin, March 2018

Originally published by Optimista.

It’s time again for the Austin Food Blogger Alliance’s City Guide (currently links to the 2017 guide; 2018 guide coming soon)! I’m so excited for you all to see the full Guide this year. Our members and especially our Technology Chair, Peter Tsai, have been working hard to put it together, and it’s chock full of useful information to please your palate.

I’m writing three guides this year, and the first one I have for you is Thai food. I wrote about my favorite Thai spots on this blog in 2013, and a few more great spots have cropped up since then to help satiate your appe-Thai-te. Here are some of the most notable ones:

Muangthai, 13945 Highway 183 North, Suite C-80, Austin TX 78717.
Few people I’ve told about this strip mall Thai joint up north near Lakeline Mall have heard of it. Yet, it’s one of my favorite Thai places in town, and worth the trip. My very favorite dish here is the Chu Chee (SP4), a fried catfish fillet topped with the most amazing red curry sauce. We usually order the sauce on the side so the fillet stays crispy longer. Also, word to the wise: they are not afraid of heat, here, so we usually request our dishes mild so that the less-heat-loving folks in our group can still eat the food. But if you like it hot, they’ll be happy to oblige.

I’ll be brutally honest – the service here is frequently overwhelmed and, therefore, often not particularly attentive. The space is nothing fancy. But I’ve liked all the food I’ve eaten here, and particularly that fantastic catfish dish.

Please excuse this photo, which I took in 2012. We usually get takeout from here when we go! This is the marvelous Chu Chee (fried catfish fillet served with coconut red curry sauce and lime leaves)
Sip Saam Thai, 6309 West Parmer Lane #505, Austin TX 78729.
I haven’t yet made it to Sip Saam Thai, but have heard a number of raves about it from trusted foodies, including one of my favorite foodie ‘grammers, @myw13, and my friend and neighbor with whom I’m frequently lucky enough to share food, Jackie of Studio Stence (who took the photo below).  Jackie tells me they are like Muangthai in that they are more than willing to bring the heat if you so desire. I can’t wait to check them out!

Sip Saam Thai – photo by Jackie Stence

Madam Mam’s / Sap’s (multiple locations for both)
I’m sure the owners of these two establishments prefer not to be linked to one another anymore (the competing restaurants are the product of the couple’s split – her locations are Madam Mam’s; his are Sap’s). But it’s hard not to link them when they still share a common menu. I’m hard pressed to order anything here other than the Pad Kee Mao (F5)(note that you have to ask for flat rice noodles or you’ll get a version made with spaghetti noodles) or what is basically the rice version of the same dish, Pad Ped Ga-Prao (P8). For an appetizer, I love the Thai rice cakes (Kao Tung / A3).
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Pad Kee Mao – wide rice noodles stir-fried with your choice of protein (I always get pork), mushrooms, Thai basil, and Thai peppers

 
Thai Kun, Two locations:
Brick & mortar at Rock Rose at the Domain, 11601 Rock Rose Ave., Suite 110, Austin TX 78758.
Trailer at Whisler’s, 1816 E. 6th Street, Austin TX 78702.
The hottest thing I ever remember attempting to eat was the larb at Thai Kun in the Domain (pictured in the cover photo for this blog post). I seriously wondered if I might need an esophageal transplant afterwards. Luckily, their offerings include more sedate dishes, too, like the crab Thai fried rice or the chive cakes.

Crab Fried Rice at Thai Kun

 

Sway, 1417 South 1st Street, Austin TX 78704.
Ah, Sway. Your food is so good that I can almost forgive your terrible tables. I love most every dish I’ve had at Sway, but my favorites are the son-in-law, the jungle curry, the tiger cry, the kai yaang, and the salt & pepper tofu. For dessert, the Thai tea affogato or the jasmine tea panna cotta. Sway is really a fusion restaurant and purists may lament its inclusion here, but it’s so wonderful that I think it deserves a spot in this guide nonetheless.

The Son-In-Law – braised pork shoulder, crispy farm egg, thick soy, chili vinegar

Dee Dee, 2500 E. 6th Street at Pedernales, Austin TX 78702.
Feeling a little grouchy? Dee Dee’s website is sure to cheer you up. And their food will cure your worst bout of hangry. They operate out of a trailer, so either dress for the weather or get something to go, but definitely try them out – it’s good stuff.

Thai Fresh
This sweet restaurant and coffee bar on West Mary is a favorite of mine for many reasons. I love that they source locally and use humanely-raised meats. I love that the owner, Jam Sanitchat, teaches cooking classes at their store (which I highly recommend), passing on her passion for cooking and her secrets about her favorite Thai ingredients. And most of all, I love the food. Fresh Thai flavor abounds in every dish. And you can cool things down afterwards with a scoop of their housemade vegan ice cream. The ice cream flavors are marvelous (everything from mint chip to ginger lemongrass), and you won’t for a second miss the dairy.

Spicy Basil Fried Rice
Krua, 2024 South Lamar Blvd, Austin TX 78704.
I’ve experienced some long waits for food and some other service issues here, but on balance, Krua is pretty good as Austin Thai food goes, especially in the south part of town where good Thai spots seem to be a little harder to come by. These mussels swimming in red curry are fantastic; order some rice to go with it, as you won’t want to waste a drop of that sauce.

Titaya’s, 5501 North Lamar Blvd, Suite C101, Austin TX 78751.
Titaya’s has been around for a really long time, and boasts a solid 4 stars on Yelp with over 1350 reviews. I haven’t had a ton of luck there myself, of late, but I’d love to be proven wrong, as it’s one of the closest Thai restaurants to my house. If you have a favorite standout dish here that you think I’ll like, please let me know!

What are your favorite Thai places in town? I’m Thai-ing to know – please share in the comments!

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Considerations for Attorney Work Product in the Client File

Originally published by Shari Klevens and Alanna Clair.

 

It is not uncommon for clients to request a copy of their file from their attorneys. Sometimes, the situation in which such a request is made is a
      

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Does Social Media Cause Divorce?

Originally published by Larry Hance.

It might be a stretch to say social media causes divorce, but it appears mingling a fragile marriage with social media can, at times, prove toxic. Over recent years, a definite uptick in entanglements regarding Facebook usage (and other social media sites) has grown exponentially among my clients seeking divorce; our cultural Internet obsession filled with potential relationship landmines.

But which came first: the rocky marriage and spouse seeking refuge in social media or a benign social media habit leading to marriage dissatisfaction or even infidelity? The truth? It’s complicated.

What does the research say?

A swell of studies scrutinizing the connection between divorce and social media has emerged in the past five years. According to the American Academy of Matrimonial Lawyers, for example, over 80% of U.S. divorce attorneys have witnessed a rise in the number of divorces linked to social networking.

In the journal, Computers in Human Behavior, a study revealed that the use of social networking sites “is negatively correlated with marriage quality and happiness, and positively correlated with experiencing a troubled relationship and thinking about divorce.” Beatriz Mileham, of University of Florida at Gainesville, conducted in-depth interviews with men and women who use Yahoo’s “Married and Flirting” or Microsoft’s “Married But Flirting” Internet chat rooms, both geared specifically to married couples. (That such sites exist is information in and of itself.)

What these chat rooms provide, site members report, spans anything from “cybersex” to gossiping about marital issues to initiating a real life affair. Most notably, though, is the fact that almost 83% of chatroom participants do not consider this online activity to be “cheating,” and the remaining 17% called it a “weak form of infidelity” or “easily justified.” Ms. Mileham added: “The number one complaint from men was lack of sex in the marriage. With cybersex, there is no longer any need for secret trips to obscure motels. An on-line liaison may even take place in the same room with one’s spouse.” Ouch.

Today Facebook boasts 200 million daily users; according to a survey by the American Academy of Matrimonial Lawyers, 1 in 5 divorces involve Facebook.

What’s the allure?

Various studies confirm a link between social media use and decreased marriage quality; this research does not prove that social media is to blame for troubled marriages, but rather reveals that individuals in problematic relationships who engage with social media might use it—consciously or no—to support a bruised ego or to bolster low self-esteem; once online, the fragile state of a marriage (or a spouse within a marriage who does not feel appreciated) might make a person vulnerable to the momentary ego boost or quick emotional fix that online chatter and perceived “connection” can provide.

Of course, going behind a spouse’s back to “connect” with a stranger has nothing to do with real connection; it is a desperate attempt to feel better about isolation in the moment.

Still, with no check on what many consider private communication, research bears out that on-line contacts, often innocent at first, might move quickly to flirting, insinuation, and sexual relationships. Online chatting can create an aura of acceptance, surreal intimacy, difficult to compete with for the day to day realties of marriage.

Additionally, the perceived anonymity associated with electronic communication gives users the feel of being unrestricted, establishing the potential “virtual affair” as fun and accessible. Once an individual in a problematic relationship turns to social media for a boost, he or she may continue this behavior against better judgement to create a support system. Online ‘friends’ are obviously less challenging, and more immediately fulfilling, than addressing a complex marriage in need of a tough emotional overhaul. The addictive nature of social media can create marital difficulties that weren’t necessarily there, promoting an environment of insecurity and jealousy that can set the scene for an affair.

What’s the problem?

Lawyers and clients arrive more and more often at the courtroom (or attorney’s office) armed with records from Facebook and social media. Any online activity—including email and text messages—are admissible evidence in Court.

Digital information can be subpoenaed, studied, and used to prove any number of arguments. (And if a party to a divorce destroys digital data, they can be sanctioned by the Court, and the Court will assume there was proof of bad behavior in the data.)

Online activity can also expose clues to hidden assets and other questionable behavior. Evidence might prove flirting, an affair, financial indiscretion, and lying, none of which make a good impression with a judge (or soon to be ex-spouse: particularly when kids are involved).

Married couples often have mutual friends who prove to be more loyal to one party or the other when divorce occurs. Spouses might ‘unfriend’ one another, but rest assured this does not stop friends privy to Facebook status’ reporting pictures posted with the new girlfriend or the new car or expensive present (problematic if a spouse is pleading to be broke).

Both hiding assets and lying on financial statements have been uncovered through scrutinizing social media. With an impending divorce, spouses fill out a Financial Affidavit: falsifying financial documents is a crime, and evidence gathered from social media can be hard to explain away.

Facebook itself is not the culprit. Nor is the rest of social media.

Rather online activity holds the potential to be used in a way that damages, perhaps irreparably, the bond of marriage if not approached responsibly. And much of this information will make a divorce take much longer, and be more expensive, than it would have been without it. At the end of the day, the Internet is a tool that sometimes shortens the search for new connection, even for those who are already married.

What’s the takeaway?

Social media should be considered both public and permanent. A cached version of photos or posts are potentially retrievable through a search engine. If a client has shared something digitally that is at odds with what he or she has conveyed in court or in legal documents, it can spell big trouble: not only can social networks and digital communications contribute to the breakup of a marriage, they can have unforeseen consequences in divorce settlement negotiations.

Not every friend can be trusted, and often what was meant to be private sees the unforgiving light of day. I advise clients not to put anything in email, text, or online that they aren’t fine with a judge, their spouse, and their mom (for good measure) reading.

About the Author

Larry Hance is managing partner and founder of the Dallas law firm Hance Law Group.  With more than 35 years of experience in family law, Mr. Hance uses his experience with the legal system, judges and other lawyers to help clients achieve the best possible results.

To schedule an initial consultation with Larry and the Hance Law Group team, please call us at 469.374.9600 or email Kelly Bailey at kbailey@hancelaw.com.

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The Intersection of Cryptocurrency and Intellectual Property Law

Originally published by Peggy Keene.

This marks the last article in a series of blog posts regarding cryptocurrency and blockchain technology. While cryptocurrency still seems like a relatively new term […]

The post The Intersection of Cryptocurrency and Intellectual Property Law appeared first on Klemchuk LLP.

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Judge Pushes the Button for Coverage for Elevator Subcontractor

Originally published by Jeffrey C. Glass.

Literal interpretation of unambiguous policy language rejected  because it would defeat the purpose of the liability coverage.

In a recent decision construing a commercial general liability policy, Judge Sam Sparks of the Western District of Texas used contextual clues in the policy as well as an “illusory coverage argument” to narrow an exclusion whose literal words applied more broadly.

In Northfield Ins. Co. v. Herrera, A-16-CA-00553-SS, 2017 WL 5147618, at *3 (W.D. Tex. Nov. 6, 2017), an employee of Austin Energy was injured in an elevator failure at Sandhill Energy Center in Austin.  The elevator was serviced and maintained by a contractor for Austin Energy, Herrera. The injured employee sued Herrera and his company and Herrera sought coverage from Northfield under a CGL policy.  Northfield defended Herrera and filed this declaratory action seeking a finding it had no duty to defend or indemnify under a subcontractor exclusion that provided the insurance does not apply to bodily injury to:

(3) Any person who is employed by, is leased to or contracted with any organization that:

(a) Contracted with you or with any insured for services; or

(b) Contracted with others on your behalf for services;

arising out of and in the course of employment by that organization or performing duties related to the conduct of that organization’s business. . .

Judge Sparks held the exclusion did not preclude coverage for Herrera because it applied only to his “downstream” contractors, not to companies with whom Herrera contracted to do work as a subcontractor himself.  Northfield argued the exclusion unambiguously applied to the suit because it applied to an employee of an “organization that . . . [c]ontracted with [Herrera] for services . . .”, which literally describes the relationship between Herrera and Austin Energy. Herrera, however, argued the only reasonable interpretation of the exclusion is “it applies downstream to exclude coverage to Herrera, and his employees and subcontractors”, not to upstream entities who hire Herrera to provide services to the upstream entity.  2017 WL 5147618, at *3.  In the alternative, Herrera argued the exclusion was ambiguous and must be interpreted in his favor for coverage.

Judge Sparks held the exclusion is unambiguous and that Herrera’s was the only reasonable interpretation of it.  Thus, the Court ruled “it is clear the provision was intended to run downstream to employees and workers of Herrera’s subcontractors” because other sections of the exclusion applied to injury to Herrera’s employees and Herrera’s subcontractors and thus the “logical progression” was to apply the exclusion “to Herrera’s subcontractors and their subcontractors”.  Id. Obviously, the language, literally construed, is not limited to that interpretation and clearly encompassed employees of entities who hired Herrera.  Perhaps recognizing this, Judge Sparks held the insurer’s “expansive reading of the Exclusion is unreasonable because it would render coverage under the Policy largely illusory.”  Id. (citing ATOFINA Petrochemicals, Inc. v. Cont’l Cas. Co., 185 S.W.3d 440, 444 (Tex. 2005) (rejecting insurer’s interpretation because it “would render coverage under the endorsement largely illusory”)).  The Court noted that because Herrera’s business is to be hired by contract to maintain elevators for other companies, Northfield’s interpretation is unreasonable “because it would eviscerate the Policy’s coverage and undermine the very purpose service-providing businesses like Herrera carry general liability insurance.”  Id.  This case is thus a good illustration of a situation in which a carrier’s reasonable interpretation of policy language in accordance with its literal meaning is nevertheless rejected because it will undermine the purpose of the coverage.

The post Judge Pushes the Button for Coverage for Elevator Subcontractor appeared first on Hanna Plaut.

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Texas Governor Spares The Life of Death Row Inmate Thomas Whitaker

Originally published by [email protected].

Texas Governor Spares The Life of Death Row Inmate Thomas Whitaker

It’s extremely rare for the Texas Board of Pardons and Paroles to recommend a lesser sentence for a death row inmate facing execution but it happened this month.

Shortly afterwards, state Governor Greg Abbott accepted the state parole board’s unusual and unanimous recommendation to grant clemency for death row inmate Thomas Whitaker.

The last time the board recommended clemency for an inmate on death row was 2009, reported the Texas Tribune. A Texas governor had not approved clemency since 2007.

Abbott’s order came down less than an hour before Whitaker was due to be executed for the 2003 murders of his mother and brother in Fort Bend County.

Abbott is a strong supporter of the death penalty and Texas routinely executes more prisoners than any other state.

He granted clemency for Whitaker for a number of reasons: The man who pulled the trigger in the killings got a lesser sentence. Whitaker’s father, who was also a victim of the crime, strongly opposed the execution.  Whitaker also voluntarily waived all claims to parole in exchange and will spend the rest of his life behind bars.

Whitaker planned the killings of his family with his roommate, Chris Brashear. It was Brashear who shot Whitaker’s mother and brother dead as they returned home one evening.

Whitaker’s father, Kent, was shot but he survived. The roommates planned the murders to get inheritance money.

Whitaker was sentenced to death in the murders in 2007. He father appealed for a life sentence at the time.  The prosecutor in the case rejected a guilty plea offer. He said Whitaker wasn’t remorseful and was manipulative. Brashear was given a life sentence and is eligible for parole in 2035.

It was the first time Abbott was asked to make the final decision for a death row inmate facing execution. Abbott portrayed a “tough-on-crime” attitude and fought to move death sentences forward in his previous role as attorney general.

Abbott’s predecessor in the governor’s office, Rick Perry, turned down two clemency recommendations for inmates facing execution and accepted just one in 14 years heading up the state.

In recent years, use of the death penalty in Texas and elsewhere has declined. However, Texas has executed more people than any other state. If you are facing a serious charge like murder, it’s vital to hire an experienced criminal defense lawyers. Contact us on our website.

 

 

 

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Second Circuit Holds That Title VII Bars Sexual Orientation Discrimination

Originally published by Seyfarth Shaw LLP.

By Scott Rabe and Sam Schwartz-Fenwick

Seyfarth Synopsis: In landmark decision, the Second Circuit joins the Seventh Circuit in holding that Title VII prohibits discrimination on the basis of sexual orientation as a subset of sex discrimination.

In a landmark decision today in Zarda v. Altitude Express, Inc., No. 15-3775, the Second Circuit ruled en banc that Title VII prohibits discrimination on the basis of sexual orientation as a subset of discrimination on the basis of sex. The Second Circuit now joins the Seventh Circuit, the EEOC, and a number of district and administrative courts across the country that have interpreted Title VII to extend its prohibition of sex discrimination to sexual orientation.  Chief Judge Katzmann authored the decision for the plurality, in which four judges joined in full, five judges joined in part, and to which three judges dissented.  In total, eight of the thirteen judges issued an opinion.

The Appellant in Zarda, a former skydiving instructor, sued his employer, alleging that he was terminated from his job after he revealed to a customer that he was gay.  Specifically, he alleged sex discrimination under Title VII asserting that his employment was terminated because he failed to conform to male sex stereotypes because he was gay.  The district court dismissed Zarda’s Title VII claim at summary judgment, holding that, although there was sufficient evidence to permit his claim for sexual orientation discrimination to proceed under New York law, which explicitly prohibits discrimination on the basis of sexual orientation, plaintiff had failed to establish a prima facie case of gender stereotyping under Title VII based on his sexual orientation.  The district court explained that in reaching this decision it was constrained by Second Circuit precedent in Simonton v. Runyon and Dawson v. Bumble & Bumble, which held that Title VII did not prohibit discrimination on the basis of sexual orientation. Today the Second Circuit reversed, and in doing so, explicitly stated that it was overturning its prior opinions in Simonton and Dawson.

In the plurality opinion, Judge Katzmann explained that sexual orientation discrimination should be treated as a subset of sex discrimination for several reasons.  He observed that “sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted,” that “sexual orientation discrimination is . . . based on assumptions or stereotypes about how members of a particular gender should be, including to whom they should be attracted,” and that “sexual orientation discrimination is associational discrimination because an adverse employment action that is motivated by the employer’s opposition to association between members of particular sexes discriminates against an employee on the basis of sex.”   The plurality also found compelling that, while the consensus among Circuits and the EEOC in 2000 at the time of Simonton was that Title VII did not protect against discrimination on the basis of sexual orientation, the EEOC and the Seventh Circuit both changed their stance on this issue and courts across the country continue to explore this issue.

The main dissent, written by Judge Lynch and joined in part by two justices, argued primarily that under a strict textual interpretation of Title VII, the statute did not protect against discrimination on the basis of sexual orientation, as it is clear Congress could have but did not include sexual orientation as a protected class.  This is the same rationale employed in 2017 by the Eleventh Circuit in Evans v. Georgia Regional Hospital, which recently held in a divided opinion that Title VII’s prohibition on sex discrimination does not encompass discrimination on the basis of sexual orientation.

Today’s decision widens the Circuit split on this issue.  Further, the diverse array of opinions among the judges on the Second Circuit mirrors the nationwide divergence in views regarding the protections that Title VII affords employees based on their sexual orientation.  While the EEOC has now taken the clear position that discrimination against workers because they are lesbian, gay or bisexual is sex discrimination under Title VII, the Department of Justice has issued guidance and sought to enforce an interpretation of Title VII that discrimination on the basis of sexual orientation is not prohibited under Title VII as sex discrimination.  Circuit, district, and administrative courts are also split.  With the Circuit divide, complicated by vastly divergent interpretations of Title VII by the very agencies entrusted to enforce Title VII, the issue is poised for a Supreme Court ruling.

In light of the current uncertainty regarding the ultimate interpretation of Title VII as it applies to sexual orientation, as well as gender identity, see our prior post, and because numerous state and local laws already explicitly prohibit discrimination on the basis of sexual orientation, employers should regularly review their policies to ensure that adequate protections are provided to employees on the basis of their sexual orientation or gender identity.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team or the Labor & Employment Team.

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Updates from the 2018 State Bar President-elect Candidates

Originally published by Lowell Brown.

Editor’s note: The following message was sent to State Bar of Texas members on Tuesday.

In an effort to encourage voter participation and educate members on the 2018 State Bar president-elect candidates, the State Bar is sending periodic emails with messages submitted by the candidates addressing topics of their choosing. The second messages are available at the links below.

Note: Opinions expressed by the candidates do not necessarily reflect the views of the State Bar of Texas.

Lisa Blue Dallas	Randy Sorrels Houston
Click here to read Lisa Blue’s message.	Click here to read Randy Sorrels’ message.

Voting in the 2018 election for State Bar president-elect and district director will take place April 2 to May 1. On April 2, attorneys eligible to vote will be mailed an election packet that includes a paper ballot, candidate brochures, and instructions on how to cast their vote. An email also will be sent to attorneys, giving them instructions on how to vote online. Be sure to check your spam filter. Election emails are sent by the State Bar’s election provider, Election Services Corporation, and will be sent from statebaroftexas@electionservicescorp.com.

The election packet and email will contain a voter authorization number (VAN) with instructions on how to vote online. Attorneys may use this VAN and their bar card number to log on to the election website to cast their ballot. If attorneys do not have their VAN, they can also go to the State Bar website, texasbar.com, to cast their vote during the voting period.

Attorneys may either submit their paper ballot via mail or vote online using the information provided. The secure election system will not allow duplicate votes.

More information on the election is available at texasbar.com/election.

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Texas Supreme Court Allows Payday Lender to Force Arbitration After Having Borrowers Arrested

Originally published by Texas Lawyer.

 

In an 8-0 decision, the Texas Supreme Court ruled that a payday lender did not waive civil litigation arbitration agreements it had with customers
      

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Court Dismisses Lawsuit Challenging Dannon’s “Natural” Label

Originally published by tiffany.dowell.

 

If yogurt is made from milk that came from cows who ate feed that included genetically modified corn, can it be labeled as “natural?”  This was the question recently before a New York federal court.

Photo via Dairy Carrie (www.dairycarrie.com)

Background

Polly Podpeskar filed a putative class action lawsuit on behalf of herself and other consumers who were mislead by Dannon’s “natural” label on certain yogurt varieties.  She claimed that a reasonable consumer would not expect a “natural” product to be made from milk from cows who had been fed genetically modified corn or who had been raised using hormones and certain other “non-natural processes to increase milk production.”   She claims that she, and others similarly situated, relied on these misrepresentations to their detriment.  Specifically, she made claims under two Minnesota statutes (Deceptive Trace Practices Act, False Statement in Advertising Act, and Consumer Fraud Act) along with claims of fraud and breach of warranty. Dannon filed a Motion to Dismiss the case, arguing that the Plaintiff had not stated a cognizable legal claim.

Standard of Review and Applicable Law

When a Court reviews a Motion to Dismiss, it assumes that all of the factual allegations set forth by the Plaintiff’s Complaint are true, and determines whether, given those facts, a viable legal claim has been made.

With regard to consumer protection claims, the court applies a “reasonable consumer” standard, asking whether the advertising at issue was “likely to mislead a reasonable consumer acting reasonably under the circumstances.”

Finally, the Food and Drug Administration (FDA) is currently reviewing the use of the term “natural” to determine how it may be regulated in the future.  Currently, the FDA policy is informal and defines natural as “nothing artificial or synthetic…is included in, or has been added to, the product that would not normally be expected to be there.”  Additionally, current federal law does not require end products of animals fed GMO feed should be labeled as containing GMOs.

Court Opinion

In December, the United States District Court for the Southern District of New York dismissed the case.  [Read full opinion here.]

The Court found the Plaintiff’s claims to be conclusory–based on her feelings that GMO products were not natural.  Further, she offered no evidence of the feed actually fed to cows whose milk was used to make Dannon yogurt; instead, she based her case on her own speculation that because most of the milk in the United States is from cows given feed with GMO ingredients, the milk used by Dannon to make the yogurt she purchased was from cows fed GMO corn.  Further, she offered no evidence that she was unaware that the products were not wholly produced by milk from cows fed no GMOs.  On the contrary, statements by Dannon that they were “working with feed suppliers and farmer partners to start planting non-GMO feed…”, along with a host of surveys on this topic offered as evidence by the Plaintiff indicated she did have information that Dannon’s products were like from cows fed GMO feed.

As the Court explained, “Plaintiff does not allege that any ingredient used in the products is unnatural; her claim is that, several steps back in the food chain, there may have been something unnatural ingested by a cow….There is no legal support for the idea that a cow that eats GMO feed or is subjected to hormones or various animal husbandry practices produces ‘unnatural’ products.”

Takeaways

This case is a good reminder about the legal issues surrounding food labeling and advertising.  There are cases across the country challenging what food products can and cannot include on their labels and packaging.  Further, it is a good reminder that consumers are interested in where their food comes from and those of us involved in agriculture and the food industry must keep that in mind.

 

 

The post Court Dismisses Lawsuit Challenging Dannon’s “Natural” Label appeared first on Texas Agriculture Law.

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Expect Struggles. Decide How to Respond.

Originally published by lawschool academicsupport.

Can you remember the first time trying a new sport or hobby? Do you remember how it felt to be terrible and completely fail at first? I can easily remember my first summer playing golf. I started playing while in…

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True today, perhaps not true tomorow.

Originally published by David Coale.

A defendant can rely on factual allegations to establish the proper forum, when the defendant will later strive to negate the merits of those same allegations. That idea was vividly illustrated in Buck’s Cabaret v. Lantrip, in which an entertainer at a Dallas club sued for her injuries in a car accident after leaving the premises, alleging that the club served her excessive alcohol. The Fifth Court reversed the denial of the club’s motion to compel arbitration under a provision in its agreement with the dancer that reached “ANY CONTROVERSY, DISPUTE, OR CLAIM … ARISING OUT OF THIS LEASE OR OUT OF ENTERTAINER PERFORMING AND/OR WORKING AT THE CLUB AT ANY TIME.” The Court noted:

The factual allegations giving rise to Lantrip’s claims are that Buck’s (1) sold her alcoholic beverages after it was apparent she was obviously intoxicated, and (2) required her to consume alcoholic beverages, a breach of Buck’s duty to use ordinary care in providing a reasonably safe workplace. Although Lantrip urges that she was a patron because Buck’s sold her alcoholic beverages, the fact that she purchased drinks is not necessarily inconsistent with her working under the terms of the Lease at the time. Indeed, Buck’s could not require Lantrip to purchase drinks if she was merely a patron.

The club will certainly dispute those allegations at the arbitration hearing, but for purposes of determining the forum, they proved dispositive.No. 05-17-00647-CV (Feb. 23, 2018) (mem. op.)

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Great Pic! But Can You Use It?

Originally published by Cleve Clinton.

Running for office, Starr Struuck sent out a campaign newsletter extolling her qualifications and a list of reasons why she should be elected rather than her incumbent opponent. Prominently displayed in her newsletter and website was a personalized and autographed Comic-Con convention photograph of Starr Struuck perched beside wildly popular and well-known Captain Kurff of Star Warp’d. When advised of her campaign literature, Captain Kurff tweeted Struuck demanding that she destroy all copies of the campaign newsletter and remove his likeness from any of her campaign materials as he was not endorsing her. Protesting that she was merely publicly confessing her affection for the Captain and geeky shows generally, Starr resisted. Is Captain Kurff right?

 

Almost certainly so.

Misappropriation of Likeness

In Texas and in more than half the other states, any individual has the right to control the use of their name and likenesses for commercial and other valuable purposes. Established through the common law as a misappropriation of the name or likeness of another, the misappropriation tort gives Kurff a claim if:

(1) Starr appropriated Captain Kurff’s name or likeness for something other than a newsworthy purpose;

(2) that Captain Kurff can be identified from the publication; and

(3) that there was some advantage or benefit to Starr.

The scope of the protection is broader than just names and images for commercial purposes, but also the ability to prevent the use of sound-alike singers, catchphrases, nicknames, and even objects associated with them. When Bette Midler’s management team rejected a Ford request to use her recording of “Do You Want to Dance” for a commercial and Ford’s agency hired a backup singer instructed to sound like Midler as much as possible, Midler’s claim to protect her widely known distinctive voice netted her a tidy $400,000. Similarly, celebrity Johnny Carcy successfully claimed his identity was misappropriated by a company’s use of his famous Tonight Show introductory phrase “Here’s Johnny” on portable toilets. In each case, the celebrity’s identity was commercially exploited causing an invasion even though their specific “name or likeness” was not used.

In Texas, misappropriation of likeness has been statutorily extended to a deceased individual’s name, voice, signature, photograph or likeness as having a right of publicity under the Texas Property Code. Even though the right is protected only for 25 years, Lubbock, Texas city officials cancelled a concert scheduled for the 50th anniversary of Buddy Holly’s death and agreed to pay his widow $20,000 over twenty years to continue to use his name and image in connection with various city promotions.

Tilting the Scales in Your Favor  

Especially for your business or for any use for your benefit, if you are using social media (Twitter, Instagram, Snap Chat, Facebook, Periscope and the like) or you are updating your website – or perhaps even sending out a blog! – you should be mindful of your content, how it’s being used and who might object to being seen, heard, or associated with your communication, and then to take steps to prevent your inadvertent unauthorized use of another’s right of publicity.

1. Review your material for possible violations of rights of publicity. Everyone has a right of publicity, not just celebrities.
2. If your content contains someone’s name, likeness, or even the sound of their voice, you should evaluate the risks involved, perhaps with the assistance of legal counsel, before you publish that material.
3. If in doubt, consider contacting the person, or their agent, and get written permission before using any aspects of their identity, or call your attorney to determine what defenses you may have that will allow you to use the material and reduce the risk of a lawsuit. If you don’t do either, you may have to pay sooner or later to obtain those rights.
4. If the person is deceased, you should determine if any rights still exist, and who holds those rights.
5. If you elect not to investigate or to seek legal advice, you might consider obtaining insurance that will cover right of publicity claims against your business.

Stay tuned, next month we will discuss your indiscriminate use of Google Images.

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Liquidated Damages and Penalties

Originally published by John McFarland.

Lawyers for royalty owners have filed multiple suits against Chesapeake Energy in Dimmit County seeking damages for breach of Chesapeake’s leases. These cases were consolidated for discovery and case-management purposes into a single matter, In re: Chesapeake Eagle Ford Royalty Litigation, Cause No. 2016CI22098, in the 224th District Court in San Antonio.

In addition to claims for underpayment of royalties, the plaintiffs in the Dimmit County cases allege that Chesapeake has breached clauses in the leases requiring the lessee to protect the lease against drainage from adjacent wells – sometimes called an express offset clause. Chesapeake has filed a motion for summary judgment arguing that these clauses are unenforceable because they impose a “penalty.”

One of the implied covenants in all oil and gas leases is the covenant to protect the lease against drainage from wells on adjacent tracts. The implied covenant requires the lessee to drill an “offset well” to the draining well if a reasonable and prudent operator would do so. Damages for breach of the implied covenant are the value of the royalty lost to the lessor, based on the amount of drainage that would have been prevented by the drilling of the offset well. Liability and damages for breach of the implied covenant are difficult to prove, so lessors have come up with an alternative – the express offset clause.
Continue reading →

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Top 10 from Texas Bar Today: Suppression, Injunction, and Production

Originally published by Joanna Herzik.

To highlight some of the posts that stand out from the crowd, the editors of Texas Bar Today have created a list from the week’s blog posts of the top ten based on subject matter, writing style, headline, and imagery. We hope you enjoy this installment.

10. Production Sharing Agreements –  John McFarland of Graves Dougherty Hearon & Moody @GravesDougherty in Austin

9. An Injunction in a Theft-of-Trade-Secrets Case Cannot Prohibit a Party From Using Publicly Available Information – Leiza Dolghih @TexasNonCompete of Lewis Brisbois Bisgaard & Smith LLP in Dallas

8. Landman Defeated by the Statute of Frauds – Charles Sartain and Chance K. Decker of Gray Reed & McGraw, P.C. @GrayReedLaw in Dallas

7. My neighbor had coverage, so why was I denied? – Angelina Wike of Merlin Law Group @MerlinLawGroup in Houston

6. No Additional Notice Required for Suppression Hearing on Trial Date – Brandon Barnett of Barnett Howard & Williams PLLC @BHWLAWFIRM in Fort Worth

5. The US Supreme Court Narrows Definition of “Whistleblower” Under Dodd-Frank –  Emily Harbison of Baker & McKenzie LLP @bakermckenzie in Houston

4. Virtual Visitation: What it means and why it matters to Texas families – Bryan Fagan @bryanjfagan of Law Office of Bryan Fagan in Houston

3. Understanding Texas Healthcare Fraud Laws – Brett A. Podolsky @BrettPodolsky of Law Office of Brett A. Podolsky in Houston

2. Small Law Firms Should Use Size to Their Advantage in Marketing Efforts – Amy Boardman Hunt of Muse Communications, LLC @MuseCommLLC

1. NDAs, Taxes, and #metoo—Can Non-Disclosure Agreements Included in Settlement Agreements Stand in the Wake of the #metoo Movement? – Kasi Chadwick and Matthew S. Veech of BoyarMiller @boyarmiller in Houston

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NDAs, Taxes, and #metoo—Can Non-Disclosure Agreements Included in Settlement Agreements Stand in the Wake of the #metoo Movement?

Originally published by Robin Tooms.

Settlement agreements commonly contain confidentiality provisions or non-disclosure agreements (“NDAs”). NDAs attempt to bring a greater sense of closure to a dispute preventing either party from disclosing the settlement terms, and sometimes, the underlying facts of the conflict.

As recently seen in McKayla Maroney’s concerns about speaking out in the face of an NDA with USA Gymnastics preventing Maroney from discussing allegations that she was molested by a former USA Gymnastics team doctor, Larry Nassar, NDAs can be included in settlement agreements concerning sexual abuse complaints. As of late however, the ethics of NDAs and the ultimate enforceability of confidentiality agreements in this context have come into question. Further, pursuant to the 2017 Tax Cuts and Jobs Act, there are new tax implications for amounts paid to settle allegations of sexual misconduct containing an NDA. Can NDAs legally stand in the wake of the #metoo movement? Regardless of the legal answer, properly tailored settlement agreements are more critical than ever.

Ethics

Generally speaking, parties can contract for whatever they want within the bounds of the law. To this end, confidentiality agreements in settlements often contain provisions that expressly dictate what can be said regarding the underlying dispute and the settlement. Carefully drafting what can be disclosed about the dispute may be the only way to control both the accused’s and the victim’s narrative in a way that satisfies the ethical demands of this issue.

One ethical question is obvious. Is it ethical to silence a victim when their assailant may continue this practice post settlement? On the flip side, a (sometimes) less appreciated ethical question should also be asked: is it ethical to silence an innocent accused from correcting the record? As evidenced by the real-world examples of Chrissy Teigen and Kristen Bell offering to pay any liquidated damages (penalties for breach of contract) for McKayla Maroney resulting from Maroney’s breach of her NDA versus HBO’s defense of James Franco in the face of unsubstantiated sexual misconduct allegations, the ethics are challenging. In fact, as illustrated by Kate Upton’s recent allegations against Guess co-founder Paul Marciano, many accused have opted to step away from their companies and positions after being accused of sexual misconduct.

Taxing Settlement Payments

Real world ethics often affect legislation. In the past, amounts paid pursuant to a settlement agreement were (at least partially) deductible as a business expense. The 2017 Tax Cuts and Jobs Act now expressly restricts an employer’s ability to obtain a tax deduction for the settlement of sexual misconduct allegations that are subject to an NDA. As the 2017 Tax Cuts and Jobs Act provides:

Payments related to sexual harassment and sexual abuse – No deduction shall be allowed under this chapter for –

• Any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement; or
• Attorney’s fees related to such a settlement or payment.

In practice, this new provision of the tax code has interesting and somewhat counter-intuitive implications. While this provision of the tax code appears to punish employers for discouraging victims of sexual misconduct to speak, this provision may, in fact, be ultimately bad for victims.

NDAs are often considered to add value to a settlement for employers. If settlements with NDAs are no longer tax deductible as a business expense, the employer may offer less money. Will this create a disincentive for victims to speak? Alternatively, if employers know that any settlement amounts paid pursuant to an agreement with an NDA will no longer be tax deductible, will employers be incentivized to discourage sexual misconduct in the workplace to prevent these allegations from even arising? At the very least, this new provision of the tax code adds an extra layer of complexity to an already complex issue.

Enforceability of NDAs in this Context

Real world ethics sometimes affect judicial rulings. Legally, courts are empowered to invalidate agreements that are against the law, unconscionable, or contrary to public policy. Even in the face of an iron-clad confidentiality agreement, NDAs can nevertheless be invalidated.

By way of example, courts invalidate confidentiality agreements that prevent employees from discussing their wages and working conditions post-settlement. In fact, the National Labor Relations Act (“NLRA”) gives employees the express right to discuss the terms and conditions of employment. Relevant here, the NLRA encompasses the “right to discuss discipline or disciplinary investigations with fellow employees”, giving critics of NDAs in the sexual misconduct context colorable, statutory authority to challenge such an NDA. Alternatively, courts have also stated that where employers have a “legitimate and substan­tial business justification” for requiring confidentiality, employers can legally prohibit employees from discussing an ongoing investigation. In short, a slander-cease-fire embodied in an NDA, if ever litigated, may not preserve the settlement parameters in all instances. Under the right circumstances, a court may invalidate the NDA altogether.

The ultimate implications of the #metoo movement remain to be seen on many fronts. In the context of NDAs and legal settlements however, thoughtful settlement provisions remain key.

The post NDAs, Taxes, and #metoo—Can Non-Disclosure Agreements Included in Settlement Agreements Stand in the Wake of the #metoo Movement? appeared first on Houston Law Firm | BoyarMiller.

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My neighbor had coverage, so why was I denied?

Originally published by Angelina Wike.

A common theme I have noticed lately is the tendency of homeowners, having just weathered a major natural disaster, to compare their ability to recover insurance proceeds to that of their neighbors. Wondering if you can recover alternative living expenses? Curious to know if you can recover for your sewage back-up claim? Rather than looking…… Continue Reading

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