HAMBLETT & KERRIGAN P.A.

Assets Inherited After the Filing of Divorce Are Subject to Division By the Divorce Court

2011-12-26T12:52:00.001-05:00

Under New Hampshire law, assets inherited by one party are part of the marital estate and subject to the divorce court's jurisdiction to divide upon divorce. All property acquired up through and including the date of divorce is part of the marital estate and subject to division. This is true even for assets that are inherited after separation and the filing of a divorce petition. In one case, a Marital Master divided assets inherited by one party, eight months after the filing of the petition for divorce. The New Hampshire Supreme Court upheld the Marital Master's division.

Whether the divorce court will divide the inheritance and to what extent depends on a variety of factors, including but not limited to the age of the parties, the length of the marriage, the overall value of the marital estate, each spouses' contribution during the marriage, each spouses likelihood of acquiring income and assets after the divorce, the health of the parties, etc.

If you have any questions regarding whether an inheritance is subject to division, please contact an attorney at Hamblett and Kerrigan for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

CHILD SUPPORT CALCULATIONS MAY NOT INCLUDE ALL TAXABLE INCOME OF A SUBCHAPTER S CORPORATION

2011-12-26T12:46:00.001-05:00

While the Child Support Guidelines are intended to make the calculation of child support simple and easy, this calculation is often difficult when one or both parties are shareholders of a Subchapter S Corporation. To the casual and uninformed observer, one may surmise incorrectly that the parties’ taxable income from the S Corporation is income to be used in calculating child support. On the contrary, merely because an item is considered taxable income by the Internal Revenue Service does not mean that that item qualifies as gross income for child support purposes. The New Hampshire Supreme Court has explained that how the federal income tax statutes define income, it is of little relevance to New Hampshire’s interpretation of gross income under the Child Support Guidelines. In fact, the New Hampshire Supreme Court has found that income tax returns are an unreliable guide to the income available for child support purposes. Taxable income of a Subchapter S Corporation which is attributable to a shareholder does not reflect the actual income received as a cash distribution. The mere fact that a business expense is not deductible for tax purposes does not make that money that was used for the business expense available to the obligor for child support purposes.

Accordingly, in order to decide what income is available for the child support calculation, a careful examination must be made of all the income and expenses of the Subchapter S Corporation and explained to the Court to derive at a fair and just child support order.

If you have any questions regarding the calculation of child support, please contact an attorney at Hamblett & Kerrigan, P.A. for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Piercing the Corporate Veil

2011-12-26T12:40:00.000-05:00

Many small contract claims are litigated before the local district courts which are now part of the circuit court system in New Hampshire. The local district courts can hear non-jury trial if the controversy is $25,000 or less. However the district courts do not have jurisdiction to hear general equitable cases. They can only hear cases on an equity basis for which they have specific statutory authorities, such as landlord / tenant eviction actions.

The New Hampshire Supreme Court recently addressed in a contract action that the district court could not pierce the corporate veil of a corporate defendant to get to the individual who owned the shares in that corporation. Piercing of a corporate veil is an equitable remedy the Courts use when the reality is that the corporation is the alter ego of the individual and he is using it for his own purposes. The piercing of the corporate veil leaves the debt owed by the corporation as an obligation of the shareholder.

On December 14, 2011, in the case of Holloway Automotive Group v. Goran Lucic, the Court specifically reversed the Manchester District Court’s decision finding Mr. Lucic personally liable for his corporation’s breach of contract finding that the district court lacked jurisdiction to hear the equitable request for piercing the corporate veil to get to Mr. Lucic individually liable for the corporation’s breach of contract. The jurisdiction for such a claim would be exclusive to the New Hampshire superior courts. Therefore, if you are considering a smaller monetary court claim and are looking to hold the individual shareholder of a corporation or member of a limited liability company personally liable, this case states that the district court cannot rule on that claim and it must be brought in the superior court.

J. DANIEL MARR IS A DIRECTOR AND SHAREHOLDER AT HAMBLETT & KERRIGAN, P.A. WHOSE LEGAL PRACTICE INCLUDES COUNSELING BUSINESSES AND BUSINESS PERSONS INCLUDING PROFESSIONALS ON A VARIETY OF LEGAL ISSUES AND ADVOCATING ON THEIR BEHALF. ATTORNEY MARR IS LICENSED AND PRACTICES IN BOTH NEW HAMPSHIRE AND MASSACHUSETTS. ATTORNEY MARR CAN BE REACHED AT: dmarr@nashualaw.com.

To read additional Business Litigation Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

BOUNDARY DISPUTE CLAIMS

2011-12-26T12:32:00.000-05:00

Boundary disputes can be difficult between residential neighbors or commercial property owners. Working with a surveyor, along with having a good grasp of the law of adverse possession and prescriptive easement can be of great benefit in resolving such matters amicably or if necessary through court intervention. I have represented individuals making claims as adverse possessors and in other matters as record owners. Some cases were resolved through settlement and others that I tried to conclusion with one having gone to the New Hampshire Supreme Court to be resolved in my client’s favor. The disputed properties have included residential, commercial, and lake front properties which while not large enough to put a house on but are sufficient to allow the owner to apply for a mooring or a seasonal dock on the lake.

I would invite inquiries to me related to adverse possession or prescriptive easement cases whether you are considering bringing such a claim, defending against a claim, or establishing your record ownership rights to property for which you believe the user of the property will ultimately claim adverse possession or prescriptive easement.

J. DANIEL MARR IS A DIRECTOR AND SHAREHOLDER AT HAMBLETT & KERRIGAN, P.A. WHOSE LEGAL PRACTICE INCLUDES COUNSELING BUSINESSES AND BUSINESS PERSONS INCLUDING PROFESSIONALS ON A VARIETY OF LEGAL ISSUES AND ADVOCATING ON THEIR BEHALF. ATTORNEY MARR IS LICENSED AND PRACTICES IN BOTH NEW HAMPSHIRE AND MASSACHUSETTS. ATTORNEY MARR CAN BE REACHED AT: dmarr@nashualaw.com

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Crowdfunding

2011-12-26T12:21:00.000-05:00

Crowdfunding

A New Way to Fund Your Company?

Collecting small sums of money from the general public over the Internet is not a new phenomenon. Crowdfunding or Crowdsourcing has been around for a few years. In the past the majority of the Crowdfunding sites catered to one time creative events, or were used by charities to raise money. Two examples of this type of site are Kickstarter and IndieGoGo.

Generally, equity interests in businesses in return for a capital investment to help businesses operate and grow are registerable under the Securities Act of 1933 ("1933 Act"), unless the security or the transaction is exempt. Crowdfunding, by its definition, does not fall within the current exemptions available under the 1933 Act. The main obstacle is that the offer to invest cannot be circulated to the general public; it must be offered only to a select group of potential sophisticated investors. When a company uses a website, however, anyone with Internet access would have the opportunity to invest.

This all may change with the recent passage by the House of Representatives of the Entrepreneur Access to Capital Act (HR 2930). The bill, authored by Patrick McHenry of North Carolina has the backing of both parties as well as the White House.

The bill provides for a funding exemption from the Securities and Exchange registration requirements for certain offerings with some limitations.

(A) the aggregate amount sold within the previous 12-month period in reliance upon this exemption is:

(i) $1,000,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, or less; or

(ii) if the issuer provides potential investors with audited financial statements, $2,000,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, or less.

(B) the aggregate amount sold to any investor in reliance on this exemption within the previous 12-month period does not exceed the lesser of:

(i) $10,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics; and

(ii) 10 percent of such investor's annual income.

Senator Scott Brown of Massachusetts introduced a separate bill in the Senate on November 9th of this year with some small differences. His bill places lower thresholds on investment as one way to mitigate potential fraud.

Both bills bear watching. While Crowdfunding would provide another source of equity funding for small businesses, there are several potential drawbacks for entrepreneurs. Unlike contributions to one-off projects in which donors have no say in implementation, equity investors want, and are entitled to, some influence in the direction a business takes. Having hundreds of equity investors means you will be answering to hundreds of bosses. That's time-consuming and costly to administer. Moreover, startups that accept equity Crowdfunding can expect to have difficulty raising additional funds from venture capital firms and other sophisticated investors if they have hundreds of small, less knowledgeable backers.

However, with the potential enactment of either bill or a combination thereof, this may still become an alternative way to fund your start-up company.

If you have any questions or would like additional information on this issue or other corporate challenges, please contact Paul D. Creme.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

To read additional Business Organization, Formation & Governance Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

The Role Of A Private Investigator In Adultery Cases

2011-12-07T16:19:00.000-05:00

In order to establish an adultery case in New Hampshire, there are several elements which are required to be proven. Two of these elements require proofthat the cheating spouse had both the desire and opportunity to have sexual intercourse with a person of the opposite sex who is not his/her spouse. Many times, the private investigator plays an integral role in proving these two elements. The private investigator's surveillance can be very effective in establishing to the trial judge or marital master of the existence of an adulterous relationship, especially when there is video of the surveillance. It is hard for the cheating spouse to deny video proof of exchange of affection such as kissing and hand holding with a member of the opposite sex. Further, video surveillance of the adulterous spouse being alone with the paramour in a private or secluded location such as a hotel room, motel room, parked vehicle or other private areas is often powerful evidence of the existence of an adulterous relationship.

Please contact Attorney Kevin Rauseo if you have any questions regarding adultery in your divorce case and/or using a private investigator in establishing an adultery case.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

The American with Disabilities Act

2011-11-01T16:01:00.000-04:00

The American with Disabilities Act

Under the American with Disabilities Act (“ADA”), employees are protected from discrimination based upon a disability. A disability is a physical or mental impairment that substantially limits one or more of the individual’s major activities. It could also be a record of such an impairment or being regarded as having such an impairment. Just having a physical or mental impairment is not enough to afford protection. The employee must show that the impairment substantially limits a major life activity.

On October 21, 2011 the First Circuit Court of Appeals ruled that an employee with epilepsy had not shown that he was disabled and therefore entitled to protections under the ADA. The appeal was in the case of Pedro L. Ramos-Echevarria v. Pichis Hotel and Convention Center, et al. While the appeal was from the United States District Court for the District of Puerto Rico, that Appeals Court also hears appeals from New Hampshire and Massachusetts federal trial courts. Therefore, this decision is legal precedent for Massachusetts and New Hampshire employers and employees alike.

In that case, Ramos claimed, among other things, that he was discriminated against during his work at Pichis by not being promoted or offered a full-time position after having been initially hired as a part-time kitchen assistant. Ramos suffers from epilepsy for which he takes medication to control his condition. On average, Ramos experiences between 9 to 16 focal seizures, which he refers to as episodes, each week. During a typical episode, Ramos sees an aura before his body begins convulsing for about 8 to 15 seconds. He does not lose consciousness, but his cognitive abilities are, however, impaired during the episode and sometimes for a short time afterwards.

Ramos worked for Pichis as a part time kitchen assistant since 1999 assisting the chef with food preparation, and he was able to show some evidence that Pichis may have denied him a promotion for full-time employment based upon his epilepsy. The federal trial court in Puerto Rico and the First Circuit Court of Appeals focused their decision as to whether or not his particular epilepsy rose to a level of a disability to be protected under the ADA and they determined that it was not and therefore Pichis was granted summary judgment and the case will not go to trial.

The Court first noted that establishing a disability under the ADA is an individualized inquiry. Therefore, this case does not stand for the proposition that epilepsy is not a disability under the ADA. It depends on the effect of that epilepsy on the individual after taking proper medication.

Ramos claimed that his epilepsy substantially limited him from performing a major activity; that being working. Other than showing that he had to stop working temporarily when he had an episode, Ramos introduced no evidence showing how his illness affected his ability to work. While he produced a medical certificate from a doctor indicating that he could not perform certain activities such as driving, climbing without protection, and using certain instruments, he is not required to engage in any of those tasks during the course of his job as a kitchen assistant. Further, the Court noted that driving and climbing are not major activities under the ADA and the inability to do so due to an impairment would not constitute a disability. The Court noted that in Ramos’ deposition when he was asked whether his medical condition significantly affected his work, he stated it did not, but he had to stop for a moment and go back to the activity he was engaged in again. He also acknowledged that he never applied for social security disability benefits because he feels capable of working. He had not claimed that Pichis regarded him as being disabled but only that he was disabled or had a record of disability. Had he, in fact, claimed that Pichis regarded him as being disabled and argued that while his impairment was not a disability, Pichis failed to promote him to a full time position because they erroneously regarded his epilepsy as something that substantially limited his work, then he would have had to prove that Pichis believed Ramos’ impairment was greater than it was which would still be a difficult burden for Ramos.

Since the Court ultimately found, based upon the record, there was no genuine issue of fact that Ramos’ impairment rose to the level of a disability under the ADA, the Court did not address whether Pichis discriminated against Ramos based upon his epilepsy and upheld the dismissal of the case and therefore Ramos does not have a chance to go to trial on his ADA claims.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Termination of Employment of a Subordinate and Legal Liability

2011-11-01T15:52:00.001-04:00

Termination of Employment of a Subordinate and Legal Liability

An employee who has the responsibility of terminating the employment of a subordinate rarely can be held legally liable to the terminated employee. This issue was addressed in the September 30, 2011 decision of the New Hampshire federal court in John Balsamo v. UNH. John Balsamo (hereinafter “Balsamo”) began working at UNH as a general maintenance technician in August 2006. Approximately one year later, on September 21, 2007, Balsamo notified his superior at the housing office that he would be out of work for approximately two weeks because of a pre-existing knee injury. Four days later Balsamo attended a meeting with his superiors and during the meeting he was confronted with allegations that he had engaged in improper sexual behavior and made several sexually explicit and racially offensive remarks. Balsamo admitted that he made some of the statements, but denied the remainder of the allegations. His superiors informed Balsamo that the allegations against him had been made by co-workers, but they refused to identify his accusers. They declined Balsamo’s request for them to hear from other co-workers who could confirm that he was “neither a sexual deviant nor a racist.”

On September 26, 2007, Balsamo’s superiors called him and read him a letter terminating his employment. The letter stated that Balsamo had engaged in repeated and unwelcome conduct constituting discriminatory harassment contrary to UNH’s standards of performance and conduct. The letter further told Balsamo he could challenge the termination in the UNH grievance process. The process went forward in a hearing on December 13, 2007 and on January 2, 2008 Balsamo received a letter informing him that the Review Panel upheld Balsamo’s employment termination.

Balsamo then filed a complaint in the New Hampshire superior court on September 13, 2010 against UNH and its employees involved in firing him. The case was then removed to the New Hampshire federal court. Balsamo’s claims included state law claims for breach of contract, breach of duty of good faith and fair dealing, wrongful discharge, and intentional interference with contractual relations.

The defendants filed a Motion for Judgment on the pleading. The Court granted it as to some claims leaving the other claims still susceptible to a motion for summary judgment after the facts were properly developed in discovery. First, the Court noted that Balsamo could not bring a claim against his superiors based upon breach of contract or a breach of duty of good faith and fair dealing as to a contract in that if he had a contract it was with UNH and not with his superiors. The Court let the breach of contract claim against UNH continue for now based upon its employment policies for notice and fair grievance process.

Under New Hampshire law, every contract contains an implied covenant of good faith, performance, and fair dealing. For such a claim, Balsamo would have had to make allegations that are separate and distinct from his underlining breach of contract claim or it would be considered redundant and covered under his separate breach of contract claim. Balsamo made no allegations in his complaint as to what duties were implied in the contract of UNH. Therefore that claim was dismissed.

As to the wrongful discharge claim against UNH, Balsamo would have had to allege facts showing that his termination was motivated by bad faith, retaliation, or malice and that he was terminated for performing an act that public policy would encourage or refuse to do something that public policy would condemn. Balsamo acknowledged he had no wrongful discharge claim against the individual defendants so that claim against them was dismissed. In Balsamo’s complaint he did not include non-conclusory factual allegations that UNH acted in bad faith, malice, or retaliation. Therefore, the wrongful discharge claim was dismissed.

Balsamo also alleged intentional interference with an employment contract against the individual defendants. Evidently, this is where Balsamo expected that he would be able to hold onto the individual defendants in the lawsuit by making such an allegation. However, to prove intentional interference with a contractual relationship in New Hampshire, Balsamo would have had to show that he had a contractual relationship with UNH, that the individual defendants knew of this relationship and intentionally and improperly interfered with the contractual relationship, and that Balsamo was damaged by such interference.

The law distinguishes between those who are acting as a representative of one of the contracting parties rather than individuals who are outside the contract. UNH employees could not be deemed to be a third party for an interference claim if those employees were acting within the scope of their employment when they engaged in the conduct that gives rise to the claim. Balsamo did not allege facts in his complaint that those individual defendants brought forth allegations against him and ultimately terminated his employment by acting outside the scope of their employment. Therefore, the Court dismissed that claim as well.

One of the more important points to take from this case is that as a supervisor or officer of a company, your decision to participate in the employment termination of a subordinate should not give rise to legal liability to you individually so long as you act in good faith and without malice. Notwithstanding the foregoing, the ultimate decision-makers in the company should review any employment termination with their employment counsel to discuss the propriety of the employment termination and the strategy and process in moving forward with effectuating that employment termination.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett and Kerrigan Home Page, Click Here.

NEW SUPREME COURT OPINION ADOPTS RULE FOR EXTINGUISHING AN EASEMENT

2011-11-01T15:42:00.000-04:00

NEW SUPREME COURT OPINION ADOPTS RULE FOR EXTINGUISHING AN EASEMENT

On September 20, 2011, the New Hampshire Supreme Court in the case of Boissy v. Chevion adopted a new rule with regard to when an easement can be extinguished. An easement allows the owner of one parcel of land to come onto another parcel of land to do a specific thing. For example, an easement can be to cross over another piece of land to access a road or to go onto a piece of land to access a well. In Chevion, the Supreme Court held that when the purpose of an easement becomes impossible to fulfill, the easement terminates. Under the facts of that particular case, the defendants were given an easement to draw water from a particular well located on the plaintiff’s property. The well had been abandoned for 28 years and could not be located. Under those facts, the trial court held, and the Supreme Court affirmed, that the easement could not be accomplished and was therefore extinguished.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

To read additional Real Estate Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Let an Experienced Divorce Attorney Assist You In Your Time of Need

2011-10-03T16:51:00.000-04:00

Let an Experienced Divorce Attorney Assist You In Your Time of Need

Divorce is an emotional time when concerns over finances and children often lead to acrimony and severe conflict. Given the amount of emotions that permeates most divorce cases, it is important that you retain an experienced attorney who can assist you through the difficult process. Attorney Kevin Rauseo has significant experience in assisting clients with complicated issues such as child custody, evaluations of businesses, evaluating income of self-employed individuals, cases involving inheritance and gifted property, alimony disputes, child support, supervised visitation/parenting time, adultery, substance abuse, domestic violence, stock and stock options, restricted stock, and many other divorce/family law issues. Attorney Rauseo strives to resolve divorce cases outside of court, as he believes the parties and litigants are better served with resolving the differences amongst themselves. However, Attorney Rauseo has significant trial experience for those cases where the opposing spouse is making unreasonable and unrealistic demands. Attorney Rauseo has successfully tried many cases in Massachusetts and New Hampshire on important family law issues.

Attorney Rauseo also has experience in handling divorce/family law matters before the New Hampshire Supreme Court.

Please contact Attorney Rauseo to discuss how he may assist you with your divorce/family law issues.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

NEW ESTATE TAX EXEMTPION PORTABILITY RULE REQUIRES FILING OF ESTATE TAX RETURN

2011-10-03T16:34:00.000-04:00

NEW ESTATE TAX EXEMTPION PORTABILITY RULE REQUIRES FILING OF ESTATE TAX RETURN

In December of 2010, the long-awaited “fix” to the uncertainty as to the future of the estate tax was resolved (at least for 2011 and 2012). The estate tax exemption was set at $5million and the concept of “portability” was added to the Internal Revenue Code. Portability allows the transfer of any unused estate tax exemption of a decedent to his or her surviving spouse, thereby allowing a married couple to exclude up to $10million from the federal estate tax.

On September 29, 2011 the IRS announced that for married individuals dying after 2010 an estate tax return must be filed to pass along their unused estate tax exclusion amount to their surviving spouse. The only way to make the election is by timely filing an estate tax return on Form 706. As Form 706 is currently drafted, there are no special boxes to check or statements needed to make the election.

The IRS expects that most estates of people who are married will want to make the portability election, even those who are not required to file an estate tax return. The first estate tax returns for estates eligible to make the portability election (because the date of death is after Dec. 31, 2010) are due as early as Monday, Oct. 3, 2011 (nine months after the date of death). Estates that are unable to timely file a tax return may file for an automatic six-month extension of time to file, however, the extension request is due by the original due date of the estate tax return.

Joseph W. Kenny is a director and shareholder of Hamblett & Kerrigan, P.A. and practices in the areas of estate planning and taxation. He is also a Certified Public Accountant with certification as a Personal Financial Specialist. You can reach Attorney Kenny by email at jkenny@hamker.com.

To read additional Estate & Trust Planning & Administration Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Finding a Middle Ground in Child Custody Disputes

2011-09-27T16:13:00.001-04:00

Finding a Middle Ground in Child Custody Disputes

A big source of contention in many child custody cases is the exchange location. Parents often disagree as to where the exchanges shall take place, as some parents feel that they do more of the commuting than the other parent. The attached link to MeetWays.com is a resource which allows the parties to find the halfway point between the parties' residences and/or place of employment to make sure that the both parents are sharing equally in the commuting responsibilities for exchanges. The link is as follows: http://www.meetways.com/.

If you have any questions regarding child custody (parental rights and responsibilities) issues, please contact Attorney Kevin Rauseo at Hamblett and Kerrigan, PA.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Massachusetts Seeks to Overhaul Alimony System

2011-09-27T16:06:00.000-04:00

Massachusetts Seeks to Overhaul Alimony System

Both Houses of the Massachusetts Legislature recently passed new legislation which would significantly overhaul alimony issued by Massachusetts courts. The bill now awaits the signature of Governor Duval Patrick.

Under the legislation, the courts would be limited in issuing alimony orders depending on the length of the marriage. By way of example, if a marriage is five years or less, alimony would be no more than one-half the length of the marriage. Similarly, in marriage of between six and ten years, alimony would last no more than 60% of the length of the marriage. More importantly, for a person who is ordered to pay alimony under an order issued prior to the passing of the legislation, the legislation allows them to petition the court to reexamine the order under the new law. However, the legislation will not go into effect unless it is signed by Governor Patrick.

If you have any questions regarding alimony, please contact Attorney Kevin Rauseo for more information.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

A Better Way To Avoid the Delays of the Divorce Court

2011-09-27T16:00:00.000-04:00

A Better Way To Avoid the Delays of the Divorce Court

For many years, divorcing families have faced significant delays in the traditional divorce process. With recent budget cuts, the delays divorcing families face in the court system have grown significantly. It can take up to three to four months before the court holds a Temporary Hearing to address the issue of finances and parenting issues (child custody) for the newly divorcing couple. This oftentimes leads to family turmoil and chaos when the parties are not able to agree on these critically important issues, leading to further animosity and strife and hindering the parties' chances for an amicable divorce. Further, from the filing of a divorce petition through any appeal, the traditional divorce process can take up to four to five years to reach its conclusion, leaving the divorcing couple and the children in a state of emotional turmoil and financial chaos without the opportunity to move forward. This long of a divorce process causes significant harm to the family, especially the children.

With these significant delays, many more people are recognizing that a divorce utilizing the collaborative law process is a Better Way to a New Beginning. A collaborative divorce has many benefits over the traditional divorce process, one of which is avoiding the significant delays that are preeminent in the court system. Collaborative law allows the parties to control the pace of the process and to work as quickly and/or as slowly as needed. When issues of great financial concern and/or parenting issues ( child custody issues) occur, the collaborative process allows for the parties to address the issues swiftly to avoid any short-term or long-term damage. Further, while some collaborative cases may take a significant period of time, many collaborative divorces are resolved much sooner than a divorce brought in the court system. For this reason, Collaborative Law is a Better Way to a New Beginning.

Please contact Attorney Kevin Rauseo with any questions regarding how a collaborative divorce could work in creating a new beginning for your family.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Web Site Privacy Policies and Terms of Use

2011-09-27T15:52:00.000-04:00

Web Site Privacy Policies and Terms of Use

Your company has decided to establish a presence on the internet and you and other company employees have worked diligently on the graphics and have made sure that the site is attractive and functional.

Before you go live, there is one more thing to think about and that is; the language at the bottom of the page. We have all seen it and may or may not have paid much attention to it; but you need to do so. It is time to draft the privacy policy provisions as well as the terms of use.

The content of both the privacy policy and the terms of use are determined by the purpose of the site. Is it advertising and merely a supplement to your overall advertising program and thus solely informational or will the site be used to transact business?

If you are using the site to transact business will your company compile customer information? Will the site be restricted to members only? Will the site be restricted to persons over the age of 18, or will it be directed to minors? Will there be contests, games, quizzes and/or other interactive activities?

The answers to these questions and more will not only drive the design of your company’s site, but the terms of use and privacy policies you will need to post. Also, you may require all users to formally accept these policies prior to allowing full access to the site.

Regardless of the nature of the site, there are some basic requirements for every site if the site will be used for purposes other than advertising.

Your company will have to explain what information you are collecting and what you will do with the collected information. If the site is for members only, you will need to clearly spell out the terms of membership and allow members to opt out if they no longer wish to be members. If you are allowing access to minors, or are actually encouraging such access, it would be wise to not only have a disclaimer as to use, but in addition you may want to make parents aware of such use by asking for a separate form of consent.

The terms of use will almost entirely be determined by the nature of the site, but if the site is in any way selling goods and/or services then your company must always include all the standard disclaimers of warranty and limitations of liability that would be found in any contract for the sale of goods and services.

There are other standard requirements such as proper copyrights notices and a clear recognition of trade-marks and trade-names, especially if you are using another entity’s marks with their permission and jurisdictional language.

The terms of use provisions and privacy policies are not a one size fits all company document. Only with a clear understanding of the nature of the site and the transactions that will occur can these two documents be properly drafted. We at Hamblett & Kerrigan, PA can provide the necessary expertise to make sure that your company is properly protected.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

To read additional Business Organization, Formation & Governance Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

When do I need a lawyer?

2011-09-09T11:07:00.000-04:00

When do I need a lawyer?

As a general law practice, we assist individuals and businesses every day. Our lawyers specialize in many areas of law, and are here to provide you services and advice. Our legal expertise and professional judgment will assist you when making important decisions throughout the legal process.

Oftentimes, legal advice is best sought as a preventive measure. Whether you are coordinating personal affairs or business matters, Hamblett and Kerrigan will help you navigate the legal challenges and confusions with confidence and comfort.

Families and individuals commonly consult attorneys regarding will, estate matters, retirement planning, or even advice on a closely help corporation and generational transfers. Speaking with an attorney about your personal situation will safeguard against potential losses that could be avoided with better planning. Business should be aware of the many areas of law possibly affecting their future. Hamblett and Kerrigan assist businesses at every stage of development, from initial startup and managing growth concerns, to issues relating to the sale, merger, or dissolution of the business. We also offer counseling and negotiation services to assist with business dispute resolution.

Individuals also consult with attorneys during the most traumatic events in their life, whether it be the breakup of a family unit or whether you or a loved one sustain serious personal injury. Hamblett and Kerrigan have the resources and experience to provide you with high-quality legal representation in even the most difficult and complex legal matters. Our attorneys have extensive experience in resolving these matters, whether it be through settlement or trial.
Legal planning is a great way to avoid negative situations and avoid potential financial loss in the future, unfortunately, you may still face situations which you are unfamiliar with your rights. In this instance consulting a lawyer is a great first step. Whether you have been in an accident or involved in a contractual or employment dispute or face a divorce or custody challenge, we will understand the problems and work to reach an equitable and quick resolution.
Allow Hamblett and Kerrigan to be there, by your side, to give you a legal advantage.

Non-Competition and Non-Solicitation Agreements

2011-09-09T11:01:00.000-04:00

Non-Competition and Non-Solicitation Agreements

In order to protect an employer’s confidential information and good will, it may have certain employees sign a non-competition and non-solicitation agreement. These agreements in addition to prohibiting former employees from using confidential information will, for a time period usually ranging between six months to two years after the employment ceases, prohibit the former employee from either competing with the company or soliciting the company’s customers. When a former employee who has signed such a non-competition or non-solicitation agreement breaches it, the employer can, in addition to seeking monetary damages for the breach, seek a court to force the employee to live up to his bargain through an injunction.

A decision from the First Circuit Court of Appeals which hears appeals from both Massachusetts and New Hampshire federal trial courts addressed what happens when the court rules on the injunction request after the time period for non-competition and non-solicitation has passed. On August 26, 2011, the First Circuit Court of Appeals ruled that EMC Corporations’ injunction request against its former employee, Christopher Blotto, was appropriately approved by the federal trial court prohibiting Blotto’s use of EMC’s confidential business information obtained in that the prohibition lasted for as long as the information remained confidential. The federal trial court was also correct in denying an injunction against Blotto to prohibit him from competing with EMC or soliciting its customers because the one-year period prohibiting competition and soliciting in the agreement passed before any injunction could issue. The agreement between Blotto and EMC had no provision for extending that one-year period during the period Blotto was breaching the agreement. Therefore, the Court determined it could not grant an injunction to prohibit Blotto from doing something that he was no longer prohibited from doing; competing or soliciting customers. As to the prior breaches during the one-year period, the Court found that Blotto could be held liable for damages.

From a practical standpoint, EMC, a business and technology consulting firm, could have concern with a damage claim against Blotto in that not only would it have to show that Blotto’s breach of the agreement caused it to lose business revenue but would have to prove EMC’s probable profit generated from the lost business, after EMC’s variable costs that would have been associated with that loss of business such as its commissions, expenses, and for wages paid to employees to do the consulting work. In pretrial discovery, Blotto could be entitled to certain otherwise confidential financial information from EMC so as to determine what the actual damages would be. Obviously EMC, if now in competition with Blotto, would be legitimately concerned about showing Blotto the markup between what is charged to a customer and what is paid to a consultant, the cost structure, bidding strategy, or other confidential financial or business terms. For that reason, sometimes a damage claim can be a less attractive option for these non-competition cases. Some employers choose to provide a liquidated damage provision for non-competition and if enforceable that could be a good option for the employer.

For an employer to consider what terms they wish to put into a non-competition and non-solicitation agreement, they should consult with their legal counsel to not only determine what terms would most likely be enforceable and obtain the most leverage against a former employee who may consider breaching the agreement, but also the practical effect of insisting that current employees sign those agreements. The courts generally have no problem enforcing confidentiality agreements stating that a former employee cannot use confidential business information and if any employee complains about signing such an agreement, the loss of that employee may be no real loss. However, courts will narrowly construe employee non-competition and non-solicitation agreements and enforce them only to the extent necessary to protect the legitimate business interests of the former employee. Good employees may also be lost over a non-competition and non-solicitation agreements and the employer therefore has to carefully think through the cost and benefit of such agreements in its particular circumstances. One size does not fit all.

J. Daniel Marr is a director and shareholder at Hamblett & Kerrigan, P.A. whose legal practice includes counseling businesses and business persons including professionals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at: dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Med Pay and Health Benefits Do Not Constitute an Impermissible Double Recovery

2011-09-06T12:12:00.000-04:00

Med Pay and Health Benefits Do Not Constitute an Impermissible Double Recovery

In Massachusetts, many automobile insurance policies have medical payments coverage (hereinafter referred to as "Med Pay") when PIP is exhausted or is not applicable to the accident, your automobile insurance will pay for the medical bills and expenses incurred as a result of an automobile accident from the Med Pay portion of the policy. In a recent case before the Massachusetts Supreme Judicial Court, the state's highest court decided that an auto insurer must pay the policy holder the cost of a medical bill, even if the medical bill was covered under the policy holder's health insurance. By way of example, a policy holder is injured in an automobile accident and incurs $1,000.00 in medical bills related to the accident. Under the Supreme Judicial Court ruling, the auto insurer would pay the policy holder the $1,000.00 for the medical bills, even if the policy holder's health insurance carrier has already paid the billunder its policy. The Court reasoned that unless the auto insurance policy restricts the payment, there is no prohibition on receiving the double recovery as the policy holder paid for this benefit and should receive it according to the terms of the insurance policy.

If you have any questions regarding insurance coverage as a result of an automobile accident please contact an attorney at Hamblett and Kerrigan for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Personal Injury and Worker’s Compensation Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

COURT DELAYS MAKE THE COLLABORATIVE PROCESS A BETTER OPTION

2011-08-15T12:41:00.000-04:00

COURT DELAYS MAKE THE COLLABORATIVE PROCESS A BETTER OPTION

With states forced to slash budgets, including court budgets, the delays in the judiciary system are getting increasingly worse. Delays are causing havoc to families who are often left without solutions to their real problems, creating further conflict and strife to an already emotional situation. In New Hampshire, it can takes courts several months before they will schedule an initial hearing and then take several more months to issue an order from the hearing. The lack of court funds is resulting in a decreased number of judges and marital masters as well as court staff and personnel. These cuts are resulting in delayed hearing and trial dates. For example, a trial in the New Hampshire court system could take two years from the date the divorce petition is filed, which could be extended another two to three years if an appeal is filed with the New Hampshire Supreme Court. The delays in the Massachusetts court system are even greater. The net result is that the cost of litigating a case increases greatly and provides much more uncertainty for the litigants and their family.

The collaborative process offers a much better solution than the traditional court system and often results in resolutions much quicker than the court system will allow. The collaborative process is unique in that it allows the parties to schedule meetings and conferences on their own schedule as the situation dictates. For example, when financial emergencies develop in the collaborative process, the parties are better able to address them through conferences and meetings that can be scheduled promptly as the situation needs. This often results in less stress and conflict between the parties and results in a better resolution for the family.

Please contact Kevin Rauseo at Hamblett and Kerrigan, PA for more information regarding the collaborative process.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Providing Employees Reasonable Accommodations Under Disability Employment

2011-08-15T12:26:00.000-04:00

Providing Employees Reasonable Accommodations Under Disability Employment

Balancing the safety of impaired employees with providing reasonable accommodations under disability employment law can be difficult for employers as illustrated in the Massachusetts court case of Nicole Cyr v. United Parcel Service. In that case on June 16, 2011, the federal trial judge denied summary judgment for UPS finding as triable issues whether Cyr was discriminated against based upon her disability and whether UPS failed to provide a reasonable accommodation for her disability. The Court agreed with UPS that Cyr could not go forward with her claim that UPS retaliated against her for raising her disability issues.

In 2000, Cyr began work with UPS as a field support technician. Field support technicians respond to customer calls about computer related issues. Some of the work is in the office and some involve travel for repairs and delivery of computer equipment. Four years later, Cyr was diagnosed with multiple sclerosis. UPS made certain accommodations for her including changing her office building location closer to her home so she would have less driving distance and when requested, moved her office down onto the first floor so that she would not have to walk stairs. After several managers were replaced, UPS determined that she could not do the essential functions of her job because it required the ability to lift 70 pounds and to climb stairs repeatedly.

From August 2007 through May 2008, Cyr was on disability and was sent notifications of job openings on a bi-weekly basis. On June 4, 2008, Cyr resigned and this suit followed with disability claims under Massachusetts law and under the Americans With Disabilities Act. While UPS argued she could not perform the essential functions of her job, the fact that they had made accommodations through previous managers belied that argument and the Court found that a reasonable jury could find in Cyr’s favor against UPS both on her disability discrimination claim and failure to accommodate claim.

While UPS asserted that Cyr did not have any medical evidence that her impairment was to the level of a disability, the Court noted that an impairment that is episodic, such as multiple sclerosis, is a disability if it would substantially limit a major life activity which would include walking, standing, lifting, and working. While Cyr did not have substantial medical documentation as to her disability, she provided a great deal of testimony as to her limitations from which the Court ruled a jury could find that she was disabled. Cyr had also claimed she had been retaliated against yet she submitted no evidence that UPS had acted in malice or retaliation for her bringing the claim. The evidence actually indicated that they were concerned for her safety when they told her she could no longer do the job. While such a subjective safety concern does not get an employer out of the obligation to reasonably accommodate a disabled employee, proof that the reasons for adverse employment actions were safety motivated rather than in retaliation for raising the disability claim was enough to defeat a retaliation claim.

All in all, this case appeared to be a difficult one for an employer. Wherein there had already been a workable accommodation provided by former managers, it is difficult for an employer to contend that same accommodation is no longer workable particularly when those decisions are being made by new managers in that the only difference a jury may see is the potential discriminatory animus of the new managers. This is certainly not to say that UPS will not be able to present evidence to show Cyr was unable to perform her job functions with or without a reasonable accommodation, yet it is likely that Cyr’s counsel will be pointing out at trial the prior accommodations that UPS and Cyr lived with as evidence that those were reasonable accommodations that UPS could continue to live with.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Wage and Benefit Confidentiality

2011-07-06T11:21:00.000-04:00

WAGE AND BENEFIT CONFIDENTIALITY

Employers generally cannot prohibit employees from discussing their wages and benefits among themselves or with current or potential union representatives. This is the case even if the employer is not a union shop. This point was the subject of a decision from the First Circuit Court of Appeals on June 22, 2011 in the case of National Labor Relations Board v. Northeastern Land Services, Ltd, d/b/a as The NLS Group. The First Circuit Court of Appeals hears appeals from the federal Massachusetts and New Hampshire Courts and therefore its rulings are an important precedent for both Massachusetts and New Hampshire employers and employees alike.

NLS is a temporary employment agency located in East Providence, Rhode Island that supplies its employees to its clients in the natural gas and telecommunications industry. NLS pays its employees directly, and bills their clients for their services. As such, NLS thought it important to have a confidentiality clause where employees would not share with the client what they are being paid in that the mark up between the labor cost and the client cost was proprietary information of NLS. Towards that end, NLS created a temporary employment contract with its employees that stated in relevant part:

“Employee . . . understands that the terms of this employment, including compensation, are confidential to Employee and the NLS Group. Disclosure of these terms to other parties may constitute grounds for dismissal.”

Dupuy was employed by NLS as a right-of-way agent for the acquisition of land rights by clients. At one point, Dupuy was working for one of NLS’ clients, El Paso Energy. Dupuy had issues with delayed paychecks, the timing of being paid for expenses, as well as his per-day reimbursement for computer usage. Dupuy contacted El Paso’s representative to complain about how he was being paid by NLS. NLS found him to be disruptive, but ultimately acknowledged that it fired him for breaching the confidentiality provision of his temporary employment contract. Dupuy filed an unfair labor practice complaint alleging NLS violated the National Labor Relations Act by maintaining and enforcing an unlawful confidentiality clause in its employment contract that discouraged employees from engaging in protected concerted activities and by terminating Dupuy’s employment for violating the terms of that clause.

While the Court ultimately found NLS’ reasoning for the confidentiality provision was to protect its proprietary information on bidding strategies with its clients, it supported the National Labor Relation Board’s decision ordering a rescission of that contract provision and a reinstatement of Dupuy’s employment.

The National Labor Relations Board, in enforcing the National Labor Relations Act, seeks to protect employees’ rights to engage in concerted activities for the purpose of collective bargaining or mutual aid or protection. That includes talking amongst each other and possible potential union representatives about their compensation and other benefits. While those rights do not include the right to talk to clients about how much they are being paid, the Board is concerned as to whether or not an overly broad confidentiality clause would discourage employees from talking amongst each other or union representatives. The confidentiality clause in this case, in part, stated disclosure of these terms to other parties may constitute grounds for dismissal. NLS had the option of providing a more narrow confidentiality clause which expressly stated that discussion of their wages or benefits with clients of this temporary employment agency was prohibited. Had NLS had such a more narrowly written confidentiality clause, there could very well have been a different result and Dupuy may have lost his unfair labor practice claim.

For employers, this case is instructive that even if you are not a union shop, you cannot force employees not speak about their wages and benefits with their fellow employees. If you are seeking to prohibit employees from talking about their wages and benefits to clients or the general public, it is best to speak with your employment counsel to ensure that the written confidentiality clause or policy created clearly does not forbid the employees’ right to discuss amongst themselves the wages and benefits for purposes of concerted activity with management. For employees, this case is instructive that just because you have a right, it does not mean you should always use it. In certain occupations, professionalism will discourage sharing with other employees how much you make in that you may cause a rift between you and your fellow employees or with management. While you may have legal rights, in the above case, Dupuy was fired in October 2001 and this decision did not come out until June 2011. Many employees would determine that a decade of litigation, and the costs associated therewith, is not worth the outcome.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

A MILITARY PENSION IS AN ASSET, NOT INCOME

2011-06-13T11:51:00.000-04:00

A MILITARY PENSION IS AN ASSET, NOT INCOME

In the decision of Casey v. Casey, the Massachusetts Appeals Court decided that a military pension is a marital asset subject to division. Because the pension is an asset, the Appeals Court further held that the monthly pension payments shall not be considered as income for child support and alimony purposes.

If you have any questions regarding the division of assets, the calculation of child support and/or alimony, please contact an attorney at Hamblett and Kerrigan for more information.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Announcement

2011-06-13T11:16:00.000-04:00

Announcement:

Hamblett and Kerrigan is pleased to announce that Kevin Rauseo is now a member of the International Academy of Collaborative Professionals. For more information regarding the collaborative law process, please contact Attorney Rauseo. Additionally, please feel free to view the IACP website.

The "Cat's Paw Theory" of Liability

2011-06-02T15:48:00.000-04:00

The "Cat's Paw Theory" of Liability

The cat’s paw theory of liability is gaining ground in employment discrimination cases, as noted in a March 1, 2011 United States Supreme Court decision. The theory was developed from a fable made famous by La Fontaine in which a monkey convinces an unwitting cat to pull chestnuts from a hot fire. The cat keeps pulling chestnuts from the fire one by one burning his paw in the process and the monkey eagerly gobbles them up leaving none for the cat. Today the cat’s paw theory of liability refers to one used by another to accomplish his purposes. A Human Resource Manager should understand that if she makes a decision to fire someone based upon the facts provided to her from another employee, if that employee had a discriminatory bias, the employer can be liable for an employment discrimination case even though the Human Resource Manager had no such bias. Therefore, if the Human Resource Manager takes those statements at face value without doing her own investigation and as a result fires an employee, the fired employee may have a valid employment discrimination claims against the employer.

Such was the case of Staub v. Proctor Hospital. In that case, Staub was employed as an angiograpy technician by Proctor Hospital while being a member of the United States Army Reserve. Both his immediate supervisor and that supervisor’s supervisor were hostile to his military obligations. Proctor’s Vice President of Human Resource, after having complaints from those supervisors, fired Staub and he filed a claim under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) which forbids an employer to deny reemployment, retention in employment, promotion, or any benefit of employment based upon a person’s membership in or obligation to perform services in a uniformed service and provides liability of an employer if that person’s uniformed service membership is a motivating factor in the employer’s action.

The jury found Proctor liable at trial and awarded Staub damages, but the Seventh Circuit Court of Appeals reversed holding that Proctor Hospital was entitled to judgment as a matter of law because the decision maker, the Vice President of Human Resources, had relied on more than the two supervisors’ advice in making her decision. The Supreme Court found that under the cat’s paw theory of liability that since the supervisors were hostile to Staub’s military obligations, Proctor Hospital is liable under the USERRA because that hostility towards Staub’s obligations was a motivating factor in the decision to fire him. From the Supreme Court decision, it appears there might have been a different result had the Vice President of Human Resources not taken at face value the supervisors’ comments, but did her own investigation.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Racial Employment Discrimination

2011-06-02T15:39:00.000-04:00

Racial Employment Discrimination

On March 21, 2011, the United States Court of Appeals for the First Circuit Court rendered a decision which emphasizes the importance of employees subjected to harassment by co-workers to report such abuses to their boss and the importance of that boss to investigate, and, when appropriate, discipline the harassers. This Court hears appeals from the federal courts within the New England states and therefore this decision is an important one for both New Hampshire and Massachusetts employers and employees.

In the case of Arthur Ray Wilson v. Moulison North Corporation, the Court agreed with the Maine Federal District Court’s granting of summary judgment in favor of the employer finding that it could not be found liable for racial discrimination. The facts as alleged by Arthur Ray Wilson were found not to create a genuine issue of material fact upon which Wilson could receive damages from his previous employer. Moulison is a Maine based electrical utility contractor specializing in the installation and repair of large lighting systems such as for airport runway illumination. Ken Moulison is the owner and chief executive. Wilson, an African American, began working for Moulison on May 22, 2006. He was assigned to a project at the Portland Jetport where he labored alongside William Stineford, Dale Small, and Ryan Polley (all white males). Polley had the most seniority and functioned as the lead worker and allotted daily work assignments when the supervisor, Bill Rowe, was elsewhere.

Moulison had an anti-harassment policy which in part directed employees to report harassment either to a supervisor or to Ken Moulison and provided Ken Moulison’s telephone number. Wilson states that in late May Stineford referred to him as “Aunt Jemima” and when Wilson objected Stineford stated that was “how he talked to other niggers.” He also referred to their digging in hard dirt to being “nigger work.” When Polley learned of this, he asked Stineford and Small to refrain from such expressions and as a further precaution assigned Stineford and Small to work in a different area, thus temporarily separating them from Wilson. Unfortunately, Stineford continued his racial slurs of Wilson and on June 5, 2006, Wilson called Ken Moulison to complain. The next day Moulison visited the site, investigated, and found the accusations as true and thereafter became irate and berated Stineford and Small, making it clear that such misconduct was unacceptable and stated they both had “a foot out the door” and further incidents of harassment, no matter how minor, would result in their immediate termination. Before leaving the job site, Ken Moulison apologized to Wilson for the offensive behavior of his fellow co-workers and told Wilson report any further problems to him without delay. Ken Moulison also indicated to Wilson that he should talk to Polley about any further incidents, but it was quite clear Wilson understood that he was to report any further incidents to Ken Moulison. Wilson not only had Ken Moulison’s telephone number, but Ken Moulison frequently visited the job site and in August Wilson was reassigned to the airport project in Manchester, New Hampshire. While there, he had numerous opportunities to speak with Ken Moulison, however, since the June conversation, Wilson made no indications that there was any further harassment.

On September 28, 2006, Wilson injured his back while working and went out on disability and thereafter sued the company for discrimination. Wilson claimed that after his contact with Ken Moulison in June the harassment had continued which the company failed to prevent. The company replied that no complaint was made. Wilson stated that he made a complaint to Polley, but never to Ken Moulison. Wilson further stated that the initial disciplinary action Ken Moulison took against Wilson’s fellow co-workers in June was insufficient. The Court noted that firing a worker for racial slurs is not always necessary and Ken Moulison’s strong warnings to Wilson’s co-workers of what would happen with further racial slurs, including that they would be fired, was sufficient. The Court further found that Polley was not a supervisor and therefore Wilson did not comply with the company’s anti-harassment policy or with Ken Moulison’s own directions after their June conversation that Wilson should notify Ken Moulison directly of any further harassment. Therefore, the company did not have notice of any further harassment of which to take action upon. Ultimately, the Court agreed with the Maine Federal District Court that Wilson had no trial worthy claim against his former employer.

Employers cannot tolerate harassment among co-workers. Upon notice of a claim of same, the employer must perform a prompt investigation and if it finds that a co-worker has discriminated against a fellow co-worker, it must take remedial action. However, as this decision confirms, the employer need not panic and decide that all incidents of harassment by a co-worker require a firing. Other disciplinary action such as a warning is often appropriate, albeit, it is generally best for such a warning to be in writing. The company should also seek counsel from an employment lawyer to determine how best to handle the investigation and, if appropriate, discipline the offending workers.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Limitations to Employer Liability

2011-06-02T15:36:00.000-04:00

LIMITATIONS TO EMPLOYER LIABILITY

A recent Massachusetts decision emphasizes that an employee's abusive and mean boss does not always equate to legal liability to the employer. In the case of Anthony McCarty v. Verizon New England, Inc. and Jeffrey Romano, Anthony McCarty, a service technician for Verizon brought a Massachusetts state court lawsuit alleging claims of intentional and negligent infliction of emotional distress based upon the alleged abusive behavior of his direct supervisor, Jeffrey Romano. While the ultimate decision on March 25, 2011 dealt with an assessment of attorney's fees against one of the attorneys representing McCarty, the history of this case provides the best lesson.

First, McCarty had claimed in his state court litigation that Verizon's and Romano's conduct were abusive, yet Verizon asserted their rights were clearly established under a collective bargaining agreement between McCarty's union, being the International Brotherhood of Electrical Workers, and Verizon. That assertion permitted Verizon to remove the state court litigation to federal court citing the preemptive effect of the Labor Management Relations Act and the collective bargaining agreement. Particularly, the collective bargaining agreement contained a "Management Rights" clause which provided that, other than the limited by the agreement, Verizon had the exclusive right to manage its business, including right to determine the methods and means of operations. Under the authority of that clause, Verizon established a safety management program called Verizon Practices. Among its other provisions, Verizon Practices required local managers to conduct unannounced worksite visits, particularly targeting underperforming workers like McCarty.

On August 30, 2006 Verizon terminated McCarty for violating its Code of Business Conduct, specifically for operating a company motor vehicle while under the influence of a class A substance and crashing his Verizon truck into a Jersey barrier. Later that fall, McCarty filed a worker's compensation claim for injuries he claimed to have sustained in that accident. That worker's compensation claim was denied, and McCarty three years later filed another worker's compensation claim for the same injury as well as this state court action that was removed to federal court. Ultimately one of McCarty's attorneys was sanctioned for meritless conduct because under the worker's compensation statute, an employee's exclusive remedy for work-related injuries is generally the worker's compensation scheme and if you lose under the worker's compensation process you still can't bring a claim for emotional distress caused by your boss. The same is true for both New Hampshire and Massachusetts employees. While McCarty's claim of abusive conduct by his boss seemed to be stunningly frivolous, wherein he got fired for driving a company truck into a Jersey barrier while under the influence of a class A substance, it is a reminder that: a union member's state law claims may be able to be removed to a federal court; and the exclusivity remedies under the worker's compensation statute for work-related injuries may prevent such claims.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Collaborative Practice as an Alternative to Traditional Divorce

2011-05-20T15:14:00.001-04:00

Collaborative Practice as an Alternative to Traditional Divorce

If you are considering utilizing collaborative practice as an alternative to the traditional divorce process, please review the attached link for an informative video from the International Academy of Collaborative Professionals here.

If you have any further questions regarding the collaborative process, please contact an attorney at Hamblett and Kerrigan for more information.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Alimony in New Hampshire

2011-05-11T12:42:00.000-04:00

Alimony in New Hampshire

Under New Hampshire law, the court's power to award alimony is derived solely from statute. A court has no independent ability to make an alimony award, but, instead, must follow the statutory provisions as enacted by the state legislature. In accordance with the relevant statutory provisions, a court must find, prior to making an alimony award, that one party has a need for support and the other party has the ability to pay. When a person requesting alimony has sufficient income to meet his or her expenses, it is inappropriate for the court to make an alimony award, even if the award is minimal. Even if the requesting party does not have sufficient income, but has the ability to make income sufficient to cover his or her expenses, the court may not award alimony. Further, while the court may consider marital fault in awarding alimony, the court may not use alimony to punish a spouse for his or her conduct during the marriage. Unlike child support, there are no guidelines for the issuance for the amount of alimony. Instead, the amount of alimony is determined bases upon the court's findings consistent with the alimony statute.

If you have any questions regarding your entitlement to alimony or your obligation to pay alimony, please contact an attorney at Hamblett and Kerrigan for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com .

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

A Black Box For Cars

2011-05-11T12:37:00.000-04:00

A Black Box for Cars

Speed is often a crucial factor in determining liability in automobile accident cases, whether you are attempting to impose liability on a person who hit you or defending a claim of negligence by someone whom you hit. Traditionally, the issue of speed was often proven by testimony of persons involved in the accident and sometimes by eye witness testimony or accident reconstruction experts. However, with the advancement of technology, many automobiles are equipped with a "black box" or other device which records crucial data such as speed immediately prior to an accident. Securing this information may often times be the critical difference in pursuing or defending an automobile liability case. Accordingly, it is important that immediately following an accident that you take steps to secure and preserve the information contained in the black box. There are various ways that this information can be protected, including placing the other party immediately upon notice to preserve the information contained in the black box or other device. If the opposing party does not preserve the information after receiving notice, then his or her failure to do so may result in civil liability or other sanctions.

If you have any questions regarding automobile accidents, please contact an attorney at Hamblett and Kerrigan for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Personal Injury Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Racial Employment Discrimination

2011-04-07T14:17:00.001-04:00

Racial Employment Discrimination

Collaborative Law - A Better Way To a New Beginning

2011-03-15T10:55:00.000-04:00

A divorce can be one of the most difficult and painful experiences a person can suffer in his or her life. The end of a marriage can bring uncertainty, financial insecurity and feelings of loss of a once valued relationship. However, divorce is not only an end but a new beginning. In most cases, divorce is terminating a dysfunctional and unhealthy relationship and provides the parties the opportunity to free themselves from the unhealthy relationship and find happiness once again.

When a divorcing couple chose to end their relationship through the court system, often times the parties predominantly focus on the end of the marriage and give very little attention to the new beginning. This is because the court process is an adversarial system which pits the spouses against each other. Many times the parties focus is to beat his or her spouse and to punish him or her for any of the hard feelings that had arisen during the relationship. This often results in long and expensive court proceedings. To further exacerbate the situation, the hard feelings that develop during the marriage are only heightened during the divorce process which often time leads to further hard feelings and prolonged litigation. In cases where the parties have children, these hard feelings may carry over after the divorce and impact their ability to co-parent, which results in further litigation after the divorce on issues of support, parenting rights and responsibilities, college education, et cetera. Often, parents spend the rest of their kids' minority in court fighting over issues which often times have little to do about the kids and more to do about their ill feelings towards their former spouse.

Collaborative law is a solution to the traditional litigation process as it not only addresses the end of the marriage but focuses on both parties' new beginning. Under the collaborative law process, the parties and their attorneys each commit to work together to resolve the matter in a way that is fair and just to both parties and agree that they will avoid using the court system to resolve their differences. The collaborative process helps the parties learn techniques and the tools they will need not only to resolve their differences in the end of their marriage but also to resolve any issues that may arise post-divorce. As such, the collaborative process often builds agreements which stand the test of time and may result in fewer post-divorce court proceedings.

Unlike the traditional process through the court system, the collaborative process is non-adversarial as the parties commit to work with each other in a respectful and fair manner. The parties are also encouraged during the process to resolve any hard feelings and resentment that may have built up during the marriage and to remove them as obstacles to both the settlement process as well as the future dealings post-divorce. As such, the collaborative process often results in a less acrimonious and confrontational end to their relationship and focuses on creating a new beginning for both parties and the entire family. This is especially important where the parties have minor children.

Please contact an attorney at Hamblett and Kerrigan to discuss the collaborative process in greater detail.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

The Impact of Cell Phone Records on Adultery Cases in New Hampshire

2011-03-15T10:47:00.000-04:00

Contrary to many people's impressions, New Hampshire law does not require proving adultery by photographic or videotape evidence. If this were so, adultery cases would be virtually non-existent. Instead, New Hampshire law recognizes that circumstantial evidence often times provides credible, reliable facts for a court to determine whether the marriage was irretrievably broken down due to adultery.

Accordingly, the law only requires that the person alleging adultery to prove that his or her spouse had the opportunity and the desire for the affair. Cell phone records are often instrumental in establishing that the cheating spouse had the desire for an affair. Cell phone records often establish the desire of the spouse by showing contact with an individual for long durations and during unusual hours. By way of example, a husband who is contacting another woman at 2:00 am is probably good evidence that the husband is in a romantic relationship with that woman. Similarly, a wife who is contacting another man every day on her way to work and on her way home from work is good evidence that the other man is more than just a friend. Cell phone records are often supported by other evidence such as e-mails and text messages that would support the proof of desire.

If you have any questions regarding any divorce, whether it be on adultery or other grounds, please contact one of the qualified attorneys at Hamblett and Kerrigan for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

To read additional Family & Divorce Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Written Employment Agreements

2011-03-14T16:24:00.000-04:00

WRITTEN EMPLOYMENT AGREEMENTS

Written unambiguous agreements between employers and employees are generally enforced based upon their specific terms, irrespective of whether the employer or employee claim they orally agreed to something other than what is in the written agreement. This issue was addressed by the United States Court of Appeals for the First Circuit in the February 18, 2011 case of Anthony Artuso v. Vertex Pharmaceuticals, Inc. That court hears appeals from both the Massachusetts and New Hampshire federal trial courts.

Vertex is based out of Massachusetts and recruited Artuso, a high-level executive from a rival offering him restrictive stock shares, stock options, and a bonus in addition to his regular compensation. The agreement specified that Artuso would serve as an at-will employee with the title of Vice President for Strategic Planning. The written agreement had an integration clause, which expressly stated that it would constitute the complete agreement between Artuso and Vertex regarding employment matters and will supersede all prior written or oral agreements or understandings on these matters.

Vertex terminated the employment of Artuso asserting that it was part of reorganization. As a result, he was not able to exercise certain stock options, which could only be exercised during continued employment, and he did not receive a bonus for the year he was terminated. The stock agreement which incorporated by reference the stock and option plan thereby also incorporated a continued employment clause of the stock and option plan. The court found that incorporation by reference in an agreement is a common tool in drafting contracts and employing that technique does not in and of itself create any ambiguity in the contract. In other words, as long as the employee has access to a certain plan referenced in an agreement, the employer would be well within its rights to incorporate by reference that plan whether it be a stock option plan, detailed defined pension plan, or expressly defined bonus or sales commission plan. As a result, Artuso lost his claim that he was entitled to stock options because the stock and option plan literally stated that you had to be employed in order to exercise the stock options.

Artuso further argued that because his employment agreement provided him an entitlement to a prorated bonus the year upon which he became employed with the company that he was also entitled to a prorated bonus on the year that he left the company. The agreement states: “if you commence your employment prior to November 1 of a calendar year you will [be] eligible to participate in the bonus plan for that year on a pro-rated basis”. Therefore no prorated bonus was due. Anthony Artuso argued that the implied covenant of good faith and fair dealing prevented Vertex from terminating the at-will employment of Artuso so close to the time in which he would obtain his bonus. The court did note that implicit in all contracts, including contracts for employment at-will, there is the implied covenant of good faith and fair dealing. While an employer has the right to discharge an at-will employee, the discharged employee may recover unpaid compensation if the employee was terminated in bad faith and the compensation is clearly connected to work already performed. This implied covenant serves to preclude an employer from taking unfair financial advantage. Unfortunately for Artuso, he did not sufficiently allege bad faith factual evidence in his complaint as to the reason for his discharge and the defendant had stated that it was part of a reorganization. Further, the bonus itself was found to be created at the discretion of the board of directors. The breach of implied covenant of good faith and fair dealing claim was dismissed.

J. DANIEL MARR IS A DIRECTOR AND SHAREHOLDER AT HAMBLETT & KERRIGAN, P.A. WHOSE LEGAL PRACTICE INCLUDES COUNSELING BUSINESSES AND BUSINESS PERSONS INCLUDING PROFESSIONALS ON A VARIETY OF LEGAL ISSUES AND ADVOCATING ON THEIR BEHALF. ATTORNEY MARR IS LICENSED AND PRACTICES IN BOTH NEW HAMPSHIRE AND MASSACHUSETTS. ATTORNEY MARR CAN BE REACHED AT: dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

IRS REFUND APP FOR YOUR SMARTPHONE

2011-03-02T10:48:00.001-05:00

The Internal Revenue Service is keeping current with consumer technology. Recently they unveiled a smartphone application that lets taxpayers check on their status of their tax refund.

"This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it," said IRS Commissioner Doug Shulman. "As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information. This phone app is a first step for us. We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers."

The new app, called IRS2Go gives taxpayers a convenient way of checking on their federal refund. It can be downloaded at the Android Marketplace and the Apple App Store.

In order to check on the status of your federal refund through the new phone app you will need a few basic pieces of information. First, your Social Security number, which will be masked and encrypted for security purposes. Next, the filing status you used on your tax return. Finally, the amount of the refund you expect from your 2010 tax return.

If you e-filed your tax return, the phone app will work within about 72 hours after you receive an e-mail acknowledgement saying the IRS received your tax return. If you filed using a paper tax return, you will need to wait three to four weeks before you can check on your refund status.

Phone app users can also enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.

Taxpayers can also sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs. For more information on IRS2Go and other new media products, visit www.IRS.gov.

Joseph W. Kenny is a director and shareholder of Hamblett & Kerrigan, P.A. and practices in the areas of estate planning and taxation. He is also a Certified Public Accountant with certification as a Personal Financial Specialist. You can reach Attorney Kenny by email at jkenny@hamker.com.

To read additional Estate & Trust Planning & Administration Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

WORKPLACE FREEDOM OF SPEECH

2011-03-02T10:25:00.000-05:00

Employees of private employers may legitimately lose their job for exercising what they believe is their free speech at the work place. This point was illustrated in the New Hampshire federal court decision of John R. Griffin, Jr. v. Margaret Garrison. In that case, Griffin filed a lawsuit against Garrison as a New Hampshire Department of Employment Security employee in that he was angry that she determined his unemployment benefits should be denied, even though her initial determination was over ruled by the Department and Griffin received the sought-after unemployment benefits. Griffin was employed at Speare Memorial Hospital as a radiology technician from May 30, 2003 until May 19, 2009 when the Hospital fired him for comments to a patient about President Obama, Manchester being Obamaland, and that he was stocking up on food, artillery, bullets, and ammo in case something happened. Griffin had been warned in the past and, in fact had received two suspensions without pay, for similar inappropriate and nonprofessional comments he had made. The comments attributed to Griffin could not be restricted by the government yet private employers can restrict such comments in the work place.

While in the Griffin v. Garrison 14-page decision, the Court discussed in detail why a successful claim by Griffin could not be raised against state employee Garrison, the following quote from the Court is the most useful to both private employers and employees alike: “Griffin believes the hospital terminated his employment as a consequence of his having engaged in protected ‘political speech’ (i.e., his comments about “Obamaland” and stocking up on food, weapons, and ammunition). Plainly, he has no First Amendment claim against the hospital, since it was not acting under color of state law when it discharged him.” Private employees should take heed that espousing your political views while at work can result in adverse employment action. Notwithstanding the above, of course, private employers should exercise discretion in firing employees for political speech. However, in situations described in the Griffin v. Garrison case where Griffin as a radiology technician decided to share his views with patients, after having been suspended in the past for similar conduct, the Hospital was more than justified to fire Griffin.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Massachusetts Noncompetition Agreements

2011-03-02T10:12:00.001-05:00

Last month, State Senator William Brownsberger reintroduced the bill, called "An Act Relative to Noncompetition Agreements."

Like its predecessor, if this bill becomes law, it will severely restrict the enforcement of noncompetition agreements in Massachusetts. Unlike the previous version of the bill this version does not restrict noncompetition agreements to employees who earn more than $75,000 a year, and it does not include a presumption that to be enforceable, the noncompetition agreement if presented to an employee, after the commencement of employment, requires payment of at least 10% of the employee's salary at the time of execution.

The bill still has much in common with last year's proposed bill:

1) It generally limits noncompetition agreements to a period of no more than one year;

2) The bill requires "fair and reasonable" compensation for noncompetition agreements entered during the course of employment (i.e., continued employment is not enough);

3) It mandates that, where "reasonably feasible," employers must give candidates advance notice that signing a noncompetition agreement is a condition of employment; and

4) The bill continues to make an employer's decision to seek judicial enforcement a risky decision. Unless the restriction is presumptively reasonable both is time and geographic scope the employer may be assessed for the cost of the employee's legal fees in defending an enforcement action initiated by the employer.

As currently written, the new law, if enacted, would apply only to noncompetition agreements entered into on or after January 1, 2012; therefore, the avoiding the need to rewrite and re-execute all existing, but noncompliant, noncompetition agreements.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

To read additional Business Organization, Formation & Governance Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Annual Reports

2011-03-02T10:08:00.001-05:00

It is that time of year again, the time to file your company’s annual report with the New Hampshire Secretary of State’s office. The deadline of April 1st seems a ways off, but it can sneak up of you. The filing of an annual report is required of all corporations and limited liability companies whether you company is domestic company or foreign company properly certified to do business in the state.

The Secretary of State’s web site http://www.sos.nh.gov/corporate allows you the option of completing the form on-line with a credit card payment, or printing the form and mailing it in with a check.

At the same time you are going through the exercise of filing of the Annual Report, the process offers you the chance to make sure all company documents are current and complete. For instance, it makes sense for corporations to have an annual meeting at the same time as the completion of the form. This can accomplished by an actual meeting or by the written consent of the shareholders and directors.

You may wish to review your company’s bylaws or in the case of a limited liability company, your operating agreement, to make sure that both documents still meet the company’s current requirements and accurately represent the state of the company.

It may also be a good time to evaluate ownership issues, shareholder agreements or any estate planning issues that need to be addressed.

As your company changes and grows over time, the documents drafted at the time of formation may no longer be adequate. Just like you house and your car, annual maintenance makes sense.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

To read additional Business Organization, Formation & Governance Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Confidentiality

2011-03-02T10:02:00.001-05:00

At the beginning of the new year, some workers are considering making a move to a new employer and as part of that consideration should assess their obligations to protect confidential information of their former employee including information they have obtained from their former employer’s computer network.

A recent New Hampshire federal court case addresses a dispute between a worker and his former employer over information the worker had obtained from the company’s computer network. In the case of Nucor Steel Marion, Inc. v. Frederick Mauer, IV, the Court dismissed claims by Nucor against its former employee Frederick Mauer for violation of the federal Computer Fraud and Abuse Act, yet left remaining state law claims of misappropriation of trade secrets, breach of duty of loyalty, and unfair and deceptive trade practices and conversion to be addressed at another day.

In the foregoing case, Mauer had been employed from June 1, 2005 until his resignation on March 21, 2010 as an outside sales representative for Nucor; a manufacturer of steel products. On August 6, 2010, Mauer became employed by one of Nucor’s competitors; Gregory Industries. Nucor alleged that Mauer was in conflict with a Confidentiality Agreement he signed as well as his common law obligations to his employer in obtaining and keeping information from Nucor’s computer network. The Court, in reviewing the Complaint of Nucor, found that it failed to allege sufficient details of how Mauer was unauthorized while as an employee in accessing the computer network to obtain data. The Court found that the failure of Nucor to make any allegation that Mauer used confidential information against Nucor’s interest was fatal to its Computer Fraud and Abuse Act claim leaving remaining the state law claims to be addressed later.

While the decision on December 7, 2010 was a victory in a skirmish between Mauer and Nucor, the war rages on. Mauer was asked by Nucor to turn over his personal computer so that they could determine whether or not he kept any confidential information and Mauer had refused resulting in Nucor suing Mauer leaving them both in a lawsuit that will be costly both in time and legal expenses.

For workers considering making a move to a direct competitor, they should first review with their attorney any post-employment obligations they have to their former employer including their confidentiality provisions and any non-compete or non-solicitation agreements. If the worker, after obtaining legal counsel, determines that his agreements with his former employer do not prohibit him from working for a direct competitor, he should still make sure that he does not keep or use any confidential or proprietary information of his former employer in his new job.

For employers considering a new hire from a competitor who offers confidential or proprietary information from its former employer, that employer, in addition to refusing to receive that information, should not hire that person in that he has proven that he is willing to steal when it suits his purposes.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com.

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Social Gatherings

2011-03-02T09:58:00.001-05:00

As the end of 2010 approaches, many of us will attend social gatherings with fellow workers, whether it is a company holiday party or informal get-together. Such gatherings are an opportunity to get to know your fellow workers in a more casual setting, not a time to get drunk, pry into others’ personal lives, tell dirty jokes or disparage co-workers. Most workers are at-will employees so they can be fired with or without notice, with or without cause. There are exceptions to this rule, but your boss not liking you because of your behavior can be a legally valid reason for you to be fired. Even if you are at a private party and you believe your boss should have no right to fire you for actions or statements outside of the office, none of us would like to be in a position of being out of a job and analyzing that claim with a lawyer.

At these social gatherings you should, while keeping friendly, stay clear of any suggestion of romantic intentions to a co-worker in that the fallout can range from awkwardness in working with that individual in the future to becoming the target of a sexual harassment claim. Furthermore, subordinates who have a romantic interest in their supervisors should also consider that there is legal precedent that if a supervisor fires a subordinate because of their prior romantic relationship this may not be illegal sexual harassment. The reasoning is that the firing was not because the subordinate spurned her boss’ sexual advances, but because the two of them can no longer work together as a result of the failed romantic relationship. In such circumstances, if one of the workers needs to go, frequently the company will fire the subordinate considering the supervisor as more critical to the company’s operation. The legal issue then may be whether the romantic relationship was truly voluntary or was the result of the subordinate being pressured into the relationship by her boss. Avoiding this legal mine field is best for the supervisor, subordinate, and company and therefore many companies establish non-fraternization policies prohibiting romantic relations at a minimum between subordinates and their supervisors.

“‘Tis the season to be jolly”, but still professional at company social gatherings with your co-workers. Being friendly, but also professional at such gatherings enhances your job security.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

To read additional Employment Articles, Click Here.

To return to the Legal Articles Home Page, Click Here.

To return to the Hamblett & Kerrigan Home Page, Click Here.

Defamation Against Employer

2010-11-18T10:44:00.005-05:00

A recent decision from the New Hampshire federal court dismissing a lawsuit brought by a professor against the University of New Hampshire illustrates that an employer’s public disparagement of an employee does not always give the employee the right to pursue a defamation claim against the employer. John Collins, a tenured professor at the University of New Hampshire, filed a civil action against UNH arising out of an incident that occurred on the UNH campus which led to Collins’ arrest on June 29, 2007 for disorderly conduct and stalking.

Collins was the Chair of the Department of Biochemistry and Molecular Biology in the College of Life Science and Agriculture at UNH. Collins did not get along with another professor in that department; Stacia Sower or her lab technician Bernadine Schultz. On the morning of June 28, 2007, Collins received a parking ticket for parking in the loading zone adjacent to Rudman Hall in excess of a 30-minute time limit. Suspecting Sower or Schultz of reporting the violation, he went to Sower’s office, but she was not there. Collins went to the elevator to go to his office and there were two individuals waiting to enter the elevator; Schultz and a graduate student. An exchange occurred between Collins and Schultz where Schultz, noticing Collins seemed upset, encouraged him to share his feelings and “let them out.” Collins responded in a tirade of epithets directly towards Sower including stating “I could kill the …” loudly several times and he kicked a large trash can in apparent anger.

After his outburst, Collins stated sarcastically “there, I feel much better.” As a result of that outburst, Collins was arrested and removed from his position at UNH. After the criminal charges were dropped and he was reinstated, he sued UNH for a variety of claims; one of which was for defamation for two statements made publicly by UNH representatives. The first statement was a press release stating that because of the criminal charges against Collins, UNH had placed him on administrative leave, and he would remain on leave pending review of the circumstances. That statement also included a phone number for UNH Deputy Chief of Police. The second statement was an instruction to the Department’s faculty that in the event Collins was on campus during the pendency of his ban they “should avoid contact with him and immediately notify the UNH Police Department.”

A legal claim of defamation requires proof that the defendant failed to exercise reasonable care in publishing, without a valid privilege, a false and defamatory statement of fact about the plaintiff to a third party. In this case, as to the first statement, UNH made statements of fact, but they were all true and therefore there could be no defamation claim. As to the second statement, while there were no facts contained in the statement, Collins argued that if read in context it implies that he was armed and dangerous. The Court found that there was no evidence that the second statement would suggest that he was armed, but perhaps that he was dangerous. Given his own admission of his outburst with Schultz, UNH has exercised reasonable care in implying that Collins was, in fact, dangerous. Therefore, judgment was granted in favor of UNH and Collins does not get to go forward with his request by jury.

Defamation suits by an employee against an employer are often wrought with difficulties. First, as noted in this case, all public disparaging comments made an employer against an employee are not actionable; only false factual allegations are actionable. Second, employees who have been disparaged by their employer should carefully analyze whether they want to put their reputation at issue in a public trial since a defendant in a defamation lawsuit may be able to bring up other conduct or characteristics of the plaintiff which caused others to already think less of him without regard to the alleged defamation. These lawsuits are expensive in time, money, and emotions for both sides.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

To read additional Employment Articles, Click Here.
To return to the Legal Articles Home Page, Click Here.
To return to the Hamblett & Kerrigan Home Page, Click Here.

Chester Lopez Honored

2010-08-12T10:31:00.001-04:00

Chester Lopez of Hamblett & Kerrigan has been recognized by The Best Lawyers in America® as one of the nation’s top lawyers in Corporate Law for 2011. Attorney Lopez is one of a distinguished group of attorneys who have been listed in Best Lawyers since its inception. The Best Lawyers in America is the definitive guide to legal excellence in the United States and lists only select attorneys, like Attorney Lopez, who have been selected through a rigorous peer-review survey.

Mr. Lopez is a senior attorney at Hamblett & Kerrigan and devotes a substantial portion of his practice to counseling in the areas of corporate, limited liability companies and general business law. His emphasis is on small and family business enterprises, not-for-profit and religious organizations, professional practices, health care law, and the purchase and sale of business and professional organizations. You can reach Attorney Lopez at clopez@hamker.com

Massachusetts Supreme Court Changes the Rules

2010-08-12T10:29:00.001-04:00

On July 26, 2010, the Massachusetts Supreme Judicial Court issued a landmark ruling abolishing an antiquated restriction on damages received from snow and ice cases. Prior to this ruling a victim who slipped and fell on snow and ice could only recover against the landowner if the victim proved that there was an “unnatural accumulation” of snow and ice. Recognizing that the unnatural accumulation rule was unjust, the Supreme Judicial Court abolished that standard and will apply a new standard for all slip and falls on snow and ice. Under this new standard, a property owner who knows or reasonably should know of a dangerous condition on his or her property has a duty to use reasonable care to protect visitors from injury.

If you or a loved one has been injured as a result of a dangerous condition on someone’s property, please contact a personal injury attorney at Hamblett & Kerrigan for a free consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. He is a member of the Collaborative Law Alliance of New Hampshire. You can reach Attorney Rauseo at krauseo@nashualaw.com.

Protected Classes

2010-08-05T09:38:00.000-04:00

New job assignments given to an employee often do not result in that employee having any rights to sue the employer. This point was illustrated in the New Hampshire Supreme Court decision of Mara Sabinson v. Trustees of Dartmouth College.

In February 2008, I wrote about Mara Sabinson’s journey through the federal court system attempting to prove employment discrimination against Dartmouth College. Fortunately for Dartmouth College, the state and federal employment laws prohibit adverse employment actions being taken against employees based upon their protected class yet do not provide protection merely because the employee happens to be a part of a protected class. Sabinson had filed suit against Dartmouth College in federal court alleging discrimination based upon her age, gender and religion, retaliation, breach of contract, wrongful discharge and demotion. The evidence revealed that while Sabinson was over 40, a female and Jewish, it was her bad behavior that was the cause of any adverse action taken against her, not any of those protected classes. The federal court dismissed the wrongful discharge claim and granted Dartmouth’s Motion for Summary Judgment on the remaining claims other than the contract claim, which it declined to consider leaving that claim for the state courts. Sabinson thereafter proceeded forward with a breach of contract claim in the state court against Dartmouth, and the state Superior Court granted summary judgment in favor of Dartmouth.

In part, Sabinson relied upon an agreement that stated that disciplinary actions against faculty members for unsatisfactory service may be effected by the College only for adequate cause. Under the agreement, such disciplinary actions include termination of employment, involuntary leave from the College duties, “or any other major changes in conditions of employment that diverge from the ordinary agreements.” In this case, Sabinson did not like the idea of teaching different courses and stated that it was “a major change” thereby requiring Dartmouth to have adequate cause for such actions. Sabinson was neither terminated nor placed on involuntary leave but assigned to teach writing courses. On June 30, the New Hampshire Supreme Court found that as a matter of law the reassignment was not “a major change”. Sabinson further argued that she had a specific “assignment (to teach certain courses) as of the beginning of the academic year of July 1, 2005” but Dartmouth breached that agreement when, following her EEOC complaint, she was assigned to three first year writing courses. The Court noted, among other things, that Sabinson cited no authority for the proposition that a tenured professor has a contractual right to teach specific courses. The Court cited a legal decision out of Maryland that stated that faculty members must adapt their schedules to conform to the needs of the department and the capabilities of other faculty members as no faculty member has a vested right in any course.

In conclusion, the New Hampshire Supreme Court agreed with the Superior Court’s Summary Judgment on the contract claim, which should hopefully finally end Sabison’s legal claims against Dartmouth College.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Employment Discrimination

2010-07-22T09:33:00.001-04:00

For a worker to have a claim for employment discrimination, he must be able to show that his employer’s discrimination caused him to suffer a materially adverse action which must be more disruptive than mere inconveniences or an alteration in job responsibilities. This point was illustrated in the case of Angel David Morales-Vallellanes v. John E. Potter, United States Post Master General decided by the First Circuit Court of Appeals on May 11, 2010. While that case was an appeal from the Puerto Rico Federal trial court, the First Circuit Court of Appeals is also the federal appellate court for New Hampshire and Massachusetts so its legal precedent is, likewise, binding on New Hampshire and Massachusetts employers and workers.

Morales-Vallellanes (hereinafter “Morales”) began his employment with the United Postal Service in 1988 as a distribution clerk. In 1995, he bid for and obtained a position of distribution and window clerk. In this capacity, Morales typically performed back-office distribution duties, which included business reply, express mail, and postage due functions, and was trained for and was able to perform window duties.

Morales had three claims of which he was allowed to go to trial upon. The first is that Morales alleges that the office’s coffee and lunch break policy was not enforced equally and in a non-discriminatory manner in that female workers were often permitted to take longer breaks than the policy provided. As a result of his complaint, his supervisor required all employees to clock in and out each time they took a break thereby uniformly enforcing the policy. However, Morales stated that the supervisor’s announcement of that new enforcement in front of all the workers made it clear that Morales caused the change. The second complaint was that female workers were awarded his duties and responsibilities when he was temporarily given the window clerk duty rather than the distribution duties. The third complaint by Morales was that when he was seeking an alternative job position that had the desired Saturday and Sunday off, whereas he had Sunday and Monday off, he claimed that they retaliated by changing that desired posted position to a Thursday and Sunday off so that he, along with all others who were interested in that position, would no longer have the opportunity to bid for a position that had a Saturday and Sunday off. The Court found that all of Morales’ claims were insufficient to establish a materially adverse action that could result in monetary damages against the Postal Service under Title VII. As to the coffee and lunch break policy enforcement, the Court noted that Morales was not treated differently than other workers in the application of the policy as a result of his complaint. While prior to that enforcement, Morales had previously received a letter of warning for taking an extended coffee break where female workers had not been given such warnings, that letter of warning was removed from his file five days later. The Court found that if an employer writes a warning and thereafter removes the warning upon determining that it was not justified under the circumstances, that employer should not be liable for an employment discrimination claim.

Secondly, as to Morales having to perform window duties, those duties were part of his job description. It was a minor disruption in the task Morales preferred to perform. Lastly, as to the change in the job posting requirements of making the days off for that posted job being from the desired Saturdays and Sundays to Thursday and Sundays, this change of the days off associated with the new posting does not affect Morales any more than it affected any other eligible bidders. If he got the post, he would be subject to having Thursdays and Sundays off like any other eligible successful bidder. If he did not get the post, he would still have his Sundays and Mondays off.

In summary, the Court has made it clear that to create a monetary damage claim, you must show a materially adverse action was taken against the worker.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Kevin Rauseo has joined the Collaborative Law Alliance of New Hampshire

2010-07-01T08:59:00.000-04:00

Hamblett and Kerrigan is pleased to announce that Attorney Kevin Rauseo, having completed the required training, has joined the Collaborative Law Alliance of New Hampshire.

Collaborative law is a new dispute resolution model and an effective way of resolving marital disputes in a respectful manner. In the collaborative law process, both parties to the dispute retain separate, specially-trained lawyers whose only job is to help them settle their marital disputes.

Through participation in this collaborative process, a divorce agreement is reached with the mutual cooperation and respect of both parties and their counsel. An additional benefit is often the development of successful constructive problem-solving techniques, which will assist the participants to resolve future differences that may arise.

Please contact Attorney Rauseo at krauseo@nashualaw.com to discuss how collaborative law can be helpful in the resolution of your marital dispute.

For additional information on the Collaborative Law Alliance of New Hampshire, please click here. http://www.collaborativelawnh.org

Selling your Business

2010-07-01T08:51:00.002-04:00

Define Your Priorities
Before beginning the process of selling a business, the owners (shareholders, members) need to talk about why they are selling and ensure everyone is in agreement with the decision. The reasons people have for selling should drive how the sale will be structured. Some owners may be close to retirement age and would like to take the money and move on, while others may wish to work for the acquiring owners. In addition, the method and timing of the payment for the proposed sale needs to be structured to be acceptable to everyone. An earnout, or any type of deferred payment of a portion of the purchase price, especially if the payment is dependent upon the future performance of the company and its managers, may be acceptable to owners who remain as employees, but is usually not acceptable to an owner who wishes to retire and will no longer be employed.

After everyone is in agreement, the company will need to decide how to market itself and decide if a business broker is needed. A good broker can help prepare your company for sale, assist in correcting any perceived problems or weaknesses and can also help in making sure the positive aspects of the company are clearly stated.

Letter of Intent
The receipt of an acceptable offer is the start of the next phase. The prospective buyer sends to either the broker or the company a Letter of Intent or some other form of non-binding letter agreement for review and, ultimately, signature.

It is important to have a good working relationship with both your attorney and accountant. Do not assume that the Letter Agreement is non-binding and just sign it without the benefit of counsel. While it is true that some of the provisions may not be binding on the parties, many buyers are now introducing terms into the Letter of Intent that, once agreed to, will become part of the purchase agreement. Some examples would be indemnification terms, earnout formulas (these may be used if the purchase price is paid out over a period of time), and hold back provisions. Some Letter Agreements may also include break-up fees, which are required payments for failure to close the transaction. If the Letter Agreement is signed and then counsel is retained, it may be too late to negotiate unfavorable terms. Your accountant can help structure the transaction from a tax point of view. One of their primary goals will be to make sure that the tax impact is mitigated as much as possible.

Due Diligence
Once the Letter Agreement is signed, the due diligence process is started. The buyer will send a written request for your company’s financial information, leases, purchase and customer agreements and corporate records as well as other information. Before anything is sent, your attorney should (i) make sure your corporate and other records are formalized and that all transactions are clearly documented; (ii) examine your material contracts (including real estate leases), (iii) determine whether material contracts and leases may be assumed by a buyer; and (iv) ensure that your intellectual property is protected and that you have proper agreements in place with your employees and contractors.

If each of the above steps have been carefully followed and all the major issues such as purchase structure (asset or stock purchase), method and timing of payment of the purchase price, indemnification limits and deductibles and the continued employment of the owners are addressed in the preliminary stages, the negotiation of the purchase agreement is less stressful and the chances of successful conclusion are increased greatly.

The attorneys at Hamblett & Kerrigan have been involved in the buying and selling of businesses for over 100 years. They have handled a wide range of transactions from the sale of small family businesses to representing a large public company during its acquisition of approximately 50 companies. Our continued commitment to providing excellent legal services in a professional manner has earned Hamblett & Kerrigan the respect of our clients and our peers.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

BUSINESS AGREEMENTS

2010-06-24T08:49:00.002-04:00

The nature of your business will to a great degree govern the types of contracts and business documents your company should have.

License Agreement
If your company sells or licenses software or related software services, a license agreement is needed to fully protect your company as the licensor. If your company sells or licenses directly to the end user through the company’s web site, then terms of use and privacy terms are also needed. Special attention should be paid to making sure that your company controls both jurisdiction (which state’s laws will be applied) and venue (where the law suit will be filed) for any dispute that may arise to insure that you can litigate in a location convenient to your company. You and your counsel may also want to consider whether to elect arbitration as the method of resolving disputes or to rely on the courts in the chosen venue.

In addition, your license agreement or the terms of use will deal with limitation of liability, warranty obligations and limitations, patent indemnification, and ownership of the software regardless of the method of sale or license. It is crucial to work with experienced counsel in drafting the license or terms of use to make sure that you are fully protected.

If your company sells products or provides services, it is good practice to develop a series of form documents which would include a quotation form, a standard set of terms and conditions of sale and a standard set of terms and conditions for all purchases.

Quotation form This form should be used to quote prospective customers. At a minimum, the form should include pricing and make clear how long the offered prices will be honored, the delivery terms (stated in terms of after receipt of order), the standard warranty terms and limitation of liability. Many companies may also wish to include payment terms (including discount terms, if any) and other shipping information. The primary goal with this form and the following forms is to limit your company’s exposure to unlimited liability.

Standard Terms and Conditions of Sale This form should be used upon the receipt of any order as an acknowledgement of the order. In addition to defined terms, this form may include inspection criteria and quality systems used, patent indemnification and insurance requirements.

Standard Terms and Conditions of Purchase This form should be used for the acquisition of goods and services. The primary goal is to preserve your company’s rights to compel performance on the part of the supplier. Your company may wish to impose additional requirements upon the supplier in the areas of quality requirements and systems. Also, your company must preserve the right to impose contract terms on the supplier that your company is required to “flow-down”.

Non-disclosure Agreements These agreements are used by almost every company at some time and may take many forms. The company should have a non-disclosure agreement for all visitors to sign before entry into the company facilities (a one page document at reception may be sufficient). All suppliers should be required to execute a non-disclosure agreement before being given confidential information, such as drawings or specifications that may be used to quote pricing for products supplied to your company. Prospective customers who wish to review your company’s drawings and/or specifications should be required to sign one. Potential business partners or acquirers should be required to sign before any financial information is disclosed. Each form will have some common language, but each document is unique and should be tailored to fit the transaction.

These are important and often complex documents. It is crucial that you and your managers develop a relationship with an attorney who can explain all the options and work with you and your managers to develop agreements tailor-made for your situation.

The attorneys at Hamblett & Kerrigan have the training and experience to handle a wide range of issues affecting business start ups, transactions and operations.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Modifying Child Support In NH

2010-06-03T09:10:00.002-04:00

In the case of Martin and Martin (decided March 13, 2008), the New Hampshire Supreme Court clarified language in the child support statute which allow parties to modify a child support order. This clarification may have far reaching effects as to when a party is entitled to seek modification of support order.

Under New Hampshire law a party paying or receiving child support may have a child support order modified under either of two circumstances. The first is that a party can seek modification if they prove that there has been a substantial change of circumstances since the date of the last order which renders the prior order unfair or unjust. Second, either the party paying or receiving child support can automatically have the order modified every three years.

The question answered in Martin is when the three year clock begins to run. In Martin, the wife filed for divorce in 2001. In the fall of 2001 the trial court issued a temporary divorce decree and ordered the husband to pay $1,500.00 per month as child support. In 2003, the trial court issued a final order and ordered the husband to pay $2,065.00 per month in child support.

Both parties appealed the trial court’s final order. In May of 2006, the New Hampshire Supreme Court upheld the trial court’s calculation of child support but reversed the trial court’s valuation of the husband’s business. While the appeal was pending, the husband was paying child support consistent with the temporary divorce decree issued in 2001. After the Supreme Court sent the case back to the trial court for re-evaluation of the husband’s business interest, the wife moved for modification of her child support, claiming three years had passed since the date of the entry of the last order of support. The wife claimed the last order of support was the final divorce decree issued in 2003. The husband argued that, because of his appeal, the final divorce decree never went into effect. Instead, it only became effective when the trial court took up the case after the Supreme Court had reversed and remanded the decision.

The trial court agreed with the husband and held that the wife was not entitled to a modification of child support based upon three years elapsing since the last order. The wife appealed the trial court’s decision to the Supreme Court, which disagreed with the trial judge. The Supreme Court held that the entry of the last order of support occurs “on the date the trial court issues the order of support and not the date the order becomes effective subsequent to an appeal”. Therefore, parties who are looking to modify their child support obligation based upon the three year time table must start that clock running from the date of the last child support order. The fact that an appeal has been filed does not stop that clock.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Comparative Fault

2010-05-27T09:43:00.000-04:00

Accidents are not always one-sided affairs where one party is solely responsible for the loss. Accidents may be caused by many factors, such as the conduct of the defendant, the conduct of third parties, or even the conduct of the plaintiff.

For example, a plaintiff is injured in an automobile accident. The accident occurred because the defendant allegedly ran a red light. Further investigation, however, reveals that the traffic light was defective or the intersection was poorly designed. In such a case, the cause of the accident could be attributed to not only the defendant driver, but also the municipality who maintained the intersection, the engineers who designed the intersection, or the manufacturer of the traffic lights.

In personal injury actions, the defendants may argue that the plaintiff also bears some responsibility for the accident. Perhaps, the plaintiff was not watching the traffic, but instead was answering a cell phone or adjusting the radio.

In personal injury cases, a jury is faced with the sometimes difficult task of assigning fault between the plaintiff and the defendant and perhaps other individuals or entities. This is known as comparative fault. Under the comparative fault law, all of the potential causes of the accident are deemed to total 100%. The jury must break out of that 100% total the percentages of fault that are attributable to the plaintiff, the defendant and any third party involved in the accident.

There are some important rules to remember in our comparative fault system. First, if a plaintiff is determined to be at fault, their recovery will be reduced by the total percentage that they are at fault. For example, a plaintiff is determined to be 20% at fault for the accident. The jury awards the plaintiff $100,000.00. After the jury returns it verdict, the judge will reduce the plaintiff’s recovery by $20,000.00, representing the 20% fault the jury assigned to that person. Similarly, a defendant who is less than 50% at fault will usually only be responsible to pay the portion of fault attributable to him.

Second, a plaintiff can recover nothing if he/she is more than 50% at fault for the accident. Thus, if a jury determines that the plaintiff was 51% at fault for the accident, they will recover no damages from any party.

Finally, a jury can assign fault to entities that are not part of the lawsuit or even immune from suit. For example, a plaintiff is injured in a construction accident. The defendants may argue that the plaintiff’s employer bears some responsibility for the accident. The plaintiff’s employer is most likely immune from suit because of the worker’s compensation statute. However, under the comparative fault law, even if the person is immune from suit a jury can still apportion fault to that immune entity. By apportioning fault to an entity that is immune from suit, the potentially liable defendants may reduce their total liability to the plaintiff.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Accommodations For Disabled Workers

2010-05-27T09:42:00.000-04:00

For some jobs to be done correctly, they must be done on a full-time basis. For such jobs, a disabled worker is not entitled to an accommodation of working only part time. That point was illustrated in the case of Judith Tompson v. Department of Mental Health where the Massachusetts Appeals Court agreed with the trial court’s decision not to allow Tompson to go to trial.

Tompson was a mental health worker and due to superior work performance worked her way up to a supervisor position. She suffered from Crohn’s disease and her treating physician set forth absolute limitations restricting her to work only four hours per day. The Department of Mental Health stated that failure to work a full-time schedule limited her ability to assist clients in a community setting, restricted her ability to be a shift supervisor, limited her ability to write shift reports, made her unavailable to close out the shift, and narrowed her time for role modeling, training, and guidance to less experienced staff. Ultimately the Department told her she could no longer work in that job, but did suggest other jobs available as part-time positions. Tompson was not interested in the part-time positions the Department suggested and never explored that option.

After Tompson was fired, she went through the Massachusetts Commission Against Discrimination and after losing there she went to the Superior Court. The Superior Court, and the Appeals Court thereafter, found that the Department of Mental Health acted reasonably in finding that she could not perform the essential functions of her job by working part time and that it was not a reasonable accommodation to require the Department to allow her to do so.

The Court further found that while the employer and the employee should both engage in an interactive process designed to determine whether or not an accommodation satisfying her needs and those of the Department could be found, Tompson refused to consider other part time positions. The Court noted that, by its very nature, interaction envisions mutual exploration and not a process upon which one side is required to serve up possible solutions while the other simply awaits the arrival of the offer to her liking.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Performance And Incentive Plans In Closely-Held Companies 1

2010-05-27T09:39:00.000-04:00

Performance and Incentive Plans are compelling tools for business owners and managers seeking to assure long and effective performance from their employees.. In many companies but especially in closely-held companies, the company’s greatest asset is their key employees. Many of these key employees have employment contracts or at least non-compete or non-solicitation contracts. These contracts, to the extent that they are enforceable, protect companies by limiting the employees’ incentive to leave. To know how to reward and incentivize key employees to invest and grow with the company is equally important. There is a wide range of the types of incentive plans. Each may be conditioned on a vesting schedule, involve voting or non-voting equity, and/or be payable upon the happening of specified events, such as a sale of the business during the term of the employee’s employment (or during such term and for a limited period thereafter).
When trying to determine what type of performance or incentive plan to adopt, the owners of the company must first determine what the primary goal is Is it to reward performance with an immediate benefit or is the goal to retain employees and allow them to participate in the increased value of the company? The former simply requires cash bonuses or deferred compensation plans. On the other hand, if the latter is the goal, the company may wish to consider one of the many types of equity plans available. Equity plans require more planning because giving someone an ownership share in a closely-held company provides the employee with a variety of rights that business owners may be unwilling to offer.
A brief description of some of the more common plans and issues to consider in connection with each is set forth in this article and the following one: (For ease of discussion, all equity will be referred to as “stock or “shares”, but all plans other than Incentive Stock Options are equally applicable to interests in limited liability companies or partnerships). We also offer our comments on the advantages and disadvantages of each. These comments are based on our many years of experience representing closely-held companies.
Types of Plans.
I. Cash Bonuses.
II. Equity “Tracking” Plans.
(a) Phantom Stock
(b) Appreciation Rights
III. Equity Plans
(a) Stock Grants
(b) Stock Option Plans
(c) employee Stock Purchase Plans
(d) employee Stock Ownership Plans
I. Current or Deferred Cash Bonuses.
Cash bonuses are the easiest to administer and the most common form of performance based awards. Cash bonuses are usually paid at year-end and are tied to company and/or individual performance. The measurements of both company and employee performance are varied and can be unique to each employee and company. Regardless, they should be easily measured and clear to the employees. Individual goals should be part of a formal review process and should be done in writing.
Advantages: Cash bonus plans are easy and inexpensive to administer. Payments are deductible by the company. If it is a formulaic plan, the employee has comfort in knowing how well they will do based on their own performance. Many companies have moved to deferred compensation plans that allow the employees to defer income. This deferral can have a vesting component to it which ties the employee to the company. In a cash bonus plan, the employee does not have any rights as a stockholder.
Disadvantages: Payments of cash bonuses may not increase employee retention or loyalty. Too often, once the bonus is paid, the employee believes it was earned for past performance, not future performance. Deferring bonuses can tie employees to the company, but you must comply with the tax code, in particular Internal Revenue Code Section 409A (“409A), which restricts deferred compensation plans to avoid tax problems.
II. Equity “Tracking” Plans.
Equity plans work best in companies where growth and a potential for acquisition or an IPO are part of the strategy. Equity Tracking Plans are plans that allow employees to benefit from increases in the value of the equity of the business without ever actually owning equity. One of the great advantages of these plans is their flexibility. They are individual or group contracts between the company and employees that grant rights to income based on equity rights, but without subjecting the company to the statutory requirements or granting the employee the statutory rights that follow actual equity ownership in a company. Because they are so flexible, many decisions need to be made about who gets how much, vesting rules, liquidity concerns, restrictions on selling shares (when awards are settled in shares), eligibility, rights to interim distributions of earnings, and rights to participate in corporate governance (if any).
(a) Phantom Stock Plans.

Unlike many of the other plans to be discussed here, a Phantom Stock Plan provides some of the benefits of an equity plan without creating shareholder issues such as information and/or voting rights. The name “Phantom Stock” is somewhat misleading in that the employee never receives stock, but rather only receives a promise to pay a bonus that is equivalent to the value of the company’s shares at a set time. For instance, a company could promise an employee that it would pay a bonus after five years (or upon the occurence of a specified event) equal to the equity value of a certain number of the established shares of the company at that future time or it could promise to pay an amount equal to the value of a fixed number of shares set at the time the promise is made. Other equity or allocation formulas could be used as well. The taxation of the bonus is much like that of any other cash bonus – it is taxed as ordinary income at the time it is received.

The issues with this type of plan are addressed at the planning stage. First, care must be taken to avoid giving early participants too large a “portion” of the company’s stock and not leaving enough for later employees. Second, the Phantom Stock must be valued in a defensible way. Third, similar to cash plans outlined above, if funds are set aside to “fund” the payments to come due, they may need to be segregated into a “Rabbi Trust” to help avoid causing employees to pay tax on the benefit when it is promised rather than paid. Finally, if the plan is intended to benefit more than key employees and defers some or all payment until after termination or retirement, it may be subject to 409A or be considered a de facto “ERISA” or retirement plan.

Advantages: Simple and inexpensive to administer; payments are deductible by the company. No current income tax on the grant. Employee does not have any rights as a stockholder.
Disadvantages: Payments of cash must be treated as ordinary income by the employees. Some employees will not feel like “true owners” of the company and are not incentivized enough to stay in the company.
(b) Stock Appreciation Rights (SAR).
A stock appreciation right (SAR) is a form of phantom stock, except its value is always equal to the amount of an increase in the value of a specified number of the company’s shares over a specified period of time.

An SAR is normally paid out in cash, but it can be paid in shares.[1] SARs may be constructed so that the Plan specifies when they will be paid, or they may provide that the company or the employee have the right to elect when they will be paid (the employee only after they vest).

Like Phantom Stock Plans, if drafted properly, employees are taxed on SAR Plans when the right to the benefit is received. At that point, the value of the award minus any consideration paid for it (usually none) is taxed to the employee as ordinary income and is deductible to the company.

Advantages: Relatively simple and inexpensive to administer; payments are deductible by the company. The employee does not have any rights as a stockholder.
Disadvantages: The company must record a compensation charge on its income statement as the employee's interest in the award vests or is no longer subject to forfeiture. So from the time the grant is made until the award is paid out, the company expenses the value of the percentage of the promised shares or increase in the value of the shares, pro-rated over the term of the award. In each year, the value is adjusted to reflect the additional pro-rata share of the award the employee has earned, plus or minus any adjustments to value arising from the rise or fall in share price.
[1] In large companies, SARs may be granted in tandem with stock options (either ISOs or NSOs) to help finance the purchase of the options and/or pay tax if any is due upon exercise of the options. If SARs are settled in shares, however, their accounting is somewhat different. The company must use a formula to estimate the present value of the award at grant, making adjustments for expected forfeitures.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Performance And Incentive Plans In Closely-Held Companies 2

2010-05-27T09:37:00.000-04:00

III. Equity Plans.

Equity Plans, by definition, are intended to provide the employees with the opportunity to share in the increased value of the company. These plans provide strong incentives to employees to remain with the company to help achieve that growth. The primary reason for employees to acquire equity in a closely-held company is to allow them to share in a liquidating event, such as the sale of the company or a public offering of the company’s stock. The disadvantage that these plans share is that the employees will have rights as shareholders. We recommend limiting those rights by using only non-voting stock and by requiring the surrender or buy-back of the stock when the employee’s service to the company terminates, regardless of reason. This can be accomplished through an employment contract and/or a stockholder agreement.

Generally, in designing an equity plan, companies need to consider carefully how much stock they are willing to make available, who will receive it and how much employment will grow so that the right number of shares is granted each year. A common error is to grant too many shares or options too soon, leaving no room for additional options for future employees. Questions that are crucial in defining specific plan characteristics include eligibility, allocation, vesting, valuation, holding periods and stock price.

Voting and non-voting stock.
If your company elects to grant stock or options to purchase stock, or the stock is purchased by the employees as part of a stock purchase plan, the stock may be designated by the company as either voting or non-voting. If the stock is voting, upon the grant and the removal of any restrictions, or in the case of the exercise of the option, upon payment of the purchase price, the person holding the stock has the same rights to access information, receive dividend distributions and to vote as any other stockholder. If the stock is non-voting, the shareholder does not have the right to vote unless the right is granted for certain events, but the person holding non-voting stock still has the right to receive information and dividend payments equal to that of voting stockholders.
(a) Stock Grants.
The company may grant stock to employees with or without restrictions. These restrictions will determine when the employee will have to pay income taxes on the value received. Most companies use restricted and non-voting stock. While the fact that such restrictions may limit voting rights or vesting of the stock over time, the advantages are usually considered to outweigh these issues.
If the stock is subject to the possibility of forfeiture or is not completely vested, then the stock is restricted and the tax is deferred until the vesting or forfeiture period ends unless the employee chooses to make an election under Section 83(b) of the Internal Revenue Code (an “83(b)” election). If an 83(b) election is made, the employee pays taxes in the tax year in which he or she receives the stock based on its value in that year. There are some issues with an 83(b) election. If the value of the stock does not increase after the election, taxes will still be payable even if the employee forfeits the stock after making the election. In this case, the employee could deduct any amount actually paid for the stock (subject to capital loss limitations), but he or she would not get a deduction for the compensation income reported when the election was made.
Notwithstanding the potential costs, the 83(b) election may be appropriate if (i) the amount of income reported at the time of the election is small and the potential growth in value of the stock is great, or (ii) the employee expects reasonable growth in the value of the stock and the likelihood of forfeiture is very small. The election form must be completed and filed within 30 days of the grant.
Advantages: Relatively simple and inexpensive to administer; grants are deductible by the company when the restrictions lapse. The employee actually becomes an owner in the company and will receive the benefits and risks of ownership.

Disadvantages: Grants must be treated as ordinary income by the employee or the employee must buy the stock. The employee has rights as a stockholder. These disadvantages can be limited by using non-voting stock and shareholder agreements.
(b) Options to Purchase Stock.
Traditionally, stock option plans have been used as a way for companies to reward top management and “key” employees and link their interests with those of the company and other shareholders. However, if the option plan allows employees to sell their shares within a short period after granting, it may not create long-term ownership vision and attitudes.

A stock option gives an employee the right to buy a certain number of shares in the company at a fixed price for a certain number of years. The price at which the option is provided is called the “grant” or “strike” price and now usually will be the market price at the time the option is granted. There are two principal kinds of stock option programs: incentive stock options (“ISO”s) and non-qualified stock options (“NQO’s ).

ISOs are a form of equity compensation that provides unique tax benefits but also requires meeting certain statutory requirements. There is no deduction for the company or income (other than AMT income) to report by the employee at the time of grant or at the time of exercise (unless the stock is sold within one year of purchase). If the stock is held for one year or longer, any gain from the sale of the stock will be treated as long-term capital gain by the IRS. Grants of ISOs must be made at fair market value (or higher) and the option may be held open only for a limited period of time (10 years). It is very unusual for a closely-held company to grant ISOs rather than NQOs, because normally, neither the employee nor the company wants the employee to exercise the option unless there is a pending sale, thus the employee will not satisfy the holding period needed to obtain the tax benefits. In addition, in most instances, the exercise of an ISO will subject the employee to the Alternative Minimum Tax in the year of exercise.
NQOs have two disadvantages compared to incentive stock options. One is that the person receiving the option has to report taxable income on the difference between the exercise price and the value of the shares at the time the option is exercised, and the other is that the income received when the stock is sold is treated as compensation, which is taxed at higher rates than long-term capital gains.
Advantages: Options allow the employees to participate in the growth of the company and to feel that they have an equity participation without having to pay for that right until it is exercised.
Disadvantages: Once they exercise the option, employees will have rights as stockholder; sometimes complex to administer.
(c) Employee Stock Ownership Plans (ESOP).
In an ESOP, the company sets up a trust fund, into which it contributes new shares of its own stock or cash to buy existing shares. Regardless of how the plan acquires stock, company contributions to the trust are tax-deductible, within certain limits.

Shares in the trust are allocated to individual employee accounts. Although there are some exceptions, generally all full-time employees over 21 years of age must participate in the plan. Allocations are made either on the basis of relative pay or some more equal formula. As employees accumulate seniority with the company, they acquire an increasing right to the shares in their account, a process known as vesting. Employees must be 100% vested within 3 to 6 years, depending on whether vesting is all at once (cliff vesting) or gradual.

When an employee leaves the company, the company must buy back the stock from his or her trust account at its fair market value (unless there is a public market for the shares). This can be a major expense. Private companies must have an annual outside valuation to determine the price of their shares. In private companies, employees must be able to vote their allocated shares on major issues such as closing or relocating, but the company can choose whether to pass through voting rights (such as for the Board of Directors) on other issues. In public companies, employees must be able to vote all issues.

Advantages: Issuance of shares is deductible by the company, creating a non-cash deduction. The owners receive significant tax advantages. Employees do not have any rights as a stockholder while the stock is in Trust.
Disadvantages: The cost of setting up an ESOP is substantial. It is also an ERISA Plan and therefore, much less favorable since you cannot discriminate in favor of key employees. The costs of cashing out retiring employees can be high if the company has been profitable. The plan does not reward performance and the cost may outweigh the values of providing the equity to employees.
(d) Employee Stock Purchase Plans (ESPP).
Under a typical Employee Stock Purchase Plan, employees are given an option to purchase company stock generally at a discounted price at the end of an offering period. Although there are some exceptions, generally all full-time employees over 21 years of age must participate in the plan. Employees who wish to participate indicate the percentage or dollar amount of compensation to be deducted from their payroll throughout the offering period. The percentage or dollar amount employees are allowed to contribute varies by plan; however, the IRS limits the total purchase to $25,000 annually.
Advantages: All employees have full participation in growth of company.
Disadvantages: The biggest disadvantage with this type of plan is the lack of flexibility and the inability to treat certain groups of employees differently. This type of plan is subject to ERISA requirements, therefore, preventing the company from discriminating in favor of key employees. There is no differentiation for performance and rewarding performance. These are complex to establish. The employees have full rights as stockholders.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Retaliation Claim

2010-04-29T09:10:00.002-04:00

For an employee to successfully claim that his employer retaliated against him for filing a discrimination claim he would need to show that he suffered a materially adverse employment action. Failure to get a desired office space or job assignment may not be enough to bring a discrimination claim.

In the decision of Rebecca Lockridge v. University of Maine System, decided on March 10, 2010 from the First Circuit Court of Appeals which hears appeals from the New Hampshire federal trial court, the Court noted that in 1994 Lockridge began work at the University as an Assistant Professor of Communications. While at one point she became the Department Chair, she was later removed from that position. In 2006, she claimed that she did not get a pay raise because she is a woman and filed a Complaint with the Human Rights Commission in December 2006.
Many faculty members in the Department of Communications are working out of a satellite office on the University’s campus. Satellite offices were necessary due to limited space in the Department’s HUB at the Chamberlain Street building. A vacant office became available in late 2007 or early 2008 at the Chamberlain Street building and was a more desirable space because it was located at the Department’s center and had direct access to the Department’s administrative support. Lockridge applied for the vacant office, but another female faculty member got that office. She provided evidence in Court that could support a claim that she did not get that space due to retaliation, yet the Court focused on whether the failure to get that office space was a material adverse employment action. To be materially adverse, the action must be one that could dissuade a reasonable worker from making or supporting a charge of discrimination.

The Court first noted that under circumstances a denial of an employee’s request for office space could be a materially adverse employment action and it could dissuade a reasonable person from making or supporting a charge of discrimination. The Court has previously concluded that a disadvantageous transfers or assignments could be materially adverse although in context of conditions more severe than those attending the usual employment office space request. For example, the Court has previously found in another case that under the totality of assignments given to a police officer, including the officer’s transfer for an unusually long duration to a remote and solitary duty site, which was regarded as punishment by officers, constituted a materially adverse employment action that would support a retaliation claim.

In this case, the Court noted that Lockridge’s continued location in the satellite office was not unique. While the inconveniences may not be optimal, it did not affect Lockridge more adversely than it did some of her colleagues. Members more senior than Lockridge were similarly located in the satellite offices and while Lockridge’s request for a better office may have been a reasonable one, the Court found that the denial left her in no worse a position than that held by similarly situated faculty members. As a result, Lockridge lost on summary judgment which means she will not be able to present her claim to a jury.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Non-Compete and Non-Solicitation Agreements For Employees/Contractors

2010-04-29T09:05:00.002-04:00

As companies grow they acquire or build intellectual property capital along with products and inventory. This intellectual property may include processes, formulae, data, functional specifications, computer programs, blueprints, know-how, improvements, discoveries, developments, designs, inventions, techniques, marketing plans, strategies, forecasts, new products, unpublished financial statements, budgets, projections, licenses, prices, costs and customer and supplier lists and/or information transferred to the company subject to a confidentiality restriction. As part of the management team you, will want to clearly define the rights your company has in its technology and to ensure that the company owns all the technology it has paid its employees or any independent contractors the company may retain to develop.

Employees: The type of products or technology the company owns helps determine the scope of the employee agreement as well as who may be required to sign one. The more unique the company or proprietary the information, the more important it is to get most if not all employees to sign an employee agreement which clearly states the company owns what each employee develops while employed by the company. These agreements should contain a provision that automatically assigns patent rights to the company. The agreement may contain language that states that if the company is unable, after reasonable effort, to secure the departed employee’s signature on any application for patent, copyright, trademark or other analogous registration for any other reason whatsoever that the employee irrevocably designates and appoints the company and its duly authorized officers and agents as his agent and attorney-in-fact, to execute and file any applications or any other documents and to do all other lawfully permitted acts to further the prosecution and issuance of patent, copyright or trademark registrations.

You may also want to include a provision where the employee states he is free to work for your company and that his employment does not violate any other agreements that he may have entered into. It might further indemnify the company from any claims that may be made as the result of the employee’s alleged breach of any previous agreement or another company’s intellectual property rights.

Some companies will also include non-compete and non-solicitation provisions as well. The non-compete provision must be tailored to the legitimate business interests of the company and can not be overbroad in scope and term. For many businesses this may mean limiting the territory to New England and the term to one year. The non-solicitation provision prohibits the employee from contacting your customers for a period of time after they terminate employment.

The agreement should also contain a provision that requires the employee to agree that at the time of leaving the employ of the company they will deliver to the company (and will not keep in their possession or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the aforementioned items belonging to the company, its successors or assigns. In the event of the termination of employment, you may require the employee to sign and deliver a Termination Certificate.

Finally, the agreement should always contain a provision that clearly states that the employee agreement is not an employment agreement.

A good practice is to send the employee agreement with the offer letter so that the new employee has a full understanding of the terms before they come to work the first day.

Independent Contractors: The issues are slightly different when dealing with independent contractors since some may work with your competitors already and many will not be willing to sign an agreement with limitations on their right to work in the future. However, because your company does have a legitimate business interest in keeping a contractor away from your customers, you should always include a non-solicitation provision. Absent such a provision in the agreement, the contractor, once they know who the customer is, may decide to undercut your pricing and work directly for the customer. As with the employee agreement, there should be a provision in the agreement stating the contractor is free from any agreements that may restrict his right to work for your company.

Always make sure that all your independent contractor agreements contain a provision that clearly states that the company owns all of the work for which the company has paid. This provision is referred to as a “Work for Hire” provision.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Unequal Property Division In Divorce

2010-04-15T10:11:00.001-04:00

The New Hampshire Supreme Court was asked, (Martel and Martel, March, 2008) to determine whether poor investment decisions made during the marriage by one spouse could result in an uneven property division in a subsequent divorce.

In Martel, the parties were married in 1985 and twenty years later the wife filed for divorce. The trial court granted a divorce and ordered an unequal division of property in favor of the wife. The trial court based its unequal property division, in part, on the fact that during approximately five years during the marriage, the husband lost over one million dollars in a serious of risky investments. The trial court found “the husband’s actions in stock trading cost the loss of [ ] family assets”.

On appeal, the Supreme Court overturned in part the trial’s court decision . The Court held that when dividing marital assets, the trial court can consider “the actions of either party during the marriage which contributed to the growth or diminution in value of property owned by either or both of them”. The Court went on to explain that merely because one party lost money during the marriage is not, in itself, sufficient to warrant an unequal property division. The trial court must also consider the nature of the conduct which diminished the asset, the other spouse’s knowledge of the conduct and whether the conduct diminished the total marital assets to such an extent that the other spouse is unable to live a similar lifestyle following the divorce.

In Martel, the Supreme Court held that the evidence before the trial court indicated that the husband had used his own money to make the initial deposits into the investment fund. The wife was aware that the husband was investing in the stock market and that he had managed the account daily. Further, the parties had other significant marital assets beside the investment fund, and the losses they incurred in the stock market allowed them to claim tax losses which contributed towards a tax credit of over one hundred thousand dollars. Given this evidence, the Supreme Court ordered the trial court to re-examine its finding that an unequal property division in the case was warranted.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

I Formed The Company, Now What?

2010-04-15T10:06:00.002-04:00

You may feel once you have filed the paperwork with the state and obtained a tax identification number (EIN) that your company is formed. This is not true; you have only completed the beginning of the process.

If your entity is a limited liability company, you will need an operating agreement; this is true even if you are the only member. If you have formed a corporation, you will need to adopt bylaws, issue stock and elect officers and directors. If the shareholders want to be an “s” corporation or a flow through entity for tax purposes, you will need to file an IRS Form 2553 within 75 days of the earliest of the following dates, (i) the date that the corporation first had shareholders, (ii) the date the corporation first had assets, (iii) the date the corporation began doing business.

Once those things have been completed, you think you are done, but maybe not yet. If you are a limited liability company you want to make sure that your operating agreement deals with a death of a member or what happens if one member wants to leave. Additionally the agreement should establish how new members will be integrated and how the company will handle disputes. These same issues must be addressed if you have decided to form a corporation and there is more than one shareholder with a shareholder agreement.

In both cases the mechanisms to deal with these issues may be very similar. The parties that have formed the company or corporation may wish to obtain insurance to deal with the potential death of one of the members/ shareholders. The entity must also provide for the departure of one of the members/shareholder, voluntary or not. The entity may elect to have the option of purchasing the departing person’s equity interest, or the parties may decide that the right of the company to purchase is automatic and that the departing member/shareholder is required to sell their equity interest back to the company. There are almost as many ways to determine the purchase price and payment terms as there are companies. The usual method allows for the payment of some of the purchase price immediately with the balance paid over time pursuant to a promissory note. You may also want to provide the right of set-off for damages if there is a termination for cause and the company suffers a loss as the result thereof.

Another important issue to deal with is what happens if the company is approached by a potential purchaser. Do you want to protect all the members/shareholders by allowing them to “tag along”, that is join the majority holder of the equity interests if they want to sell their interests, or conversely do you want to make every member/shareholder sell their equity interests and thus “drag along” the minority equity holders in the event of a proposed sale? Usually these rights mirror each other and you would be well-advised to incorporate these decisions into the operating/shareholder agreement.

If you formed your company in New Hampshire you need to be aware of two taxes that are levied at the company level. The Business Profits Tax is an 8.5% tax that is assessed on income from conducting business activity in the state. If you operate in more than one state the tax is apportioned. Every business that has been formed for profit is subject to the tax; however, if your company generates less than $50,000 of gross revenue in a tax year then the company is not required to file a return. The return must be filed, if applicable, by the 15th day of the third month following the end of the limited liability company or corporation’s tax year (usually this means March 15th). There may be a need to make estimated payments; you should always check with your accountant. The Business Enterprise Tax is a 0.75% tax assessed on the enterprise value tax base, which is the sum of all compensation paid or accrued, interest paid or accrued and dividends paid by the company. Companies with more than $150,000 of gross receipts or an enterprise value tax base of more than $75,000 are required to file a return. The return must be filed at the same time as the Business Profits Return. You should talk with your accountant to determine if there is a need to make estimated payments.

You still may not be done All you have right now is an operating company, but depending upon your business, there may be zoning issues and insurance requirements. You may need terms and conditions of sale and/purchase. Employee and employment agreements will be needed once you start operating the business and hiring employees.

It is important to get your company started right. It is crucial that you develop a relationship with an attorney at the beginning of the process who can take you through all the steps of your company’s growth. The attorneys at Hamblett & Kerrigan have the training and experience to handle a wide range of issues affecting business start ups, transactions and operations and can help your new business get off to a successful start.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Workers' Access To Personnel Files

2010-04-15T10:03:00.001-04:00

Both current and former workers are, upon their request, permitted a reasonable opportunity to inspect their personnel file and to obtain a copy of that file subject to a reasonable fee related to the cost of copying the requested documents under New Hampshire RSA 275:56. If after inspection of the personnel file the worker disagrees with any information contained in the file and the worker and the employer cannot agree upon the removal or correction of the information, the worker may submit a written statement explaining her version of the information together with evidence supporting such a version. Her statement shall be maintained as part of the personnel file and any transmittal of the file to a third party should contain that statement.

The definition of "personnel file" is not merely what the employer places in a folder titled "personnel file". It also includes payroll, disciplinary review, promotion, worker's compensation and benefits records, any contracts signed by the worker such as confidentiality and non-compete agreements as well as signed documentation acknowledging the receipt of any employment policies and manuals.

If there is an internal investigation of the worker by the employer, the employer may be able to exclude from the worker's personnel file documents related to the internal investigation until and unless the internal investigation produces information that results in the initiation of a disciplinary process. By way of example, if a co-worker makes an allegation that certain actions by the worker constituted sexual harassment and the Human Resource Manager, in performing the internal investigation, determines that even if the allegations were true that they clearly did not constitute sexual harassment, the Human Resource Manager might very well terminate the investigation without ever informing the worker that he had been accused. In that case, should the worker subsequently ask for his personnel file, the employer would have a legally supportable position in not providing the co-worker's report of sexual harassment since no disciplinary action was taken against the worker.

Employers do not have to provide information in the personnel file of a worker who is the subject of an investigation at the time of his request if the disclosure could prejudice law enforcement or the information is related to a government security investigation.

When an employer is in doubt as to what documents must be produced to a worker or former worker upon request, the employer would be well advised to contact legal counsel. If the worker were to subsequently bring an employment claim against the employer, and through the litigation obtained documents that should have been disclosed originally as part of the personnel file, the worker may attempt to use the lack of disclosure of those documents in response to the initial personnel file request as evidence of the employer's attempted deception.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

The Impact of Spousal Abuse in NH

2010-04-15T10:01:00.001-04:00

In 2005 the New Hampshire legislature substantially amended the divorce and custody statutes in New Hampshire. The terms physical custody and legal custody are no longer used; instead, the statute (RSA 461-A) uses the terms parental rights and responsibilities. RSA 461-A mandates that in formulating a parenting plan there is a presumption that both parents will have “joint decision making responsibility” for the children. This means both parents have the right to make major decisions regarding the child, including education, medical and religious decisions. However, if domestic abuse has occurred, the court may consider the finding of abuse in determining whether one party should be awarded sole decision making responsibility.

RSA 461-A left open a question as to which court must make a finding of abuse before the presumption of joint decision making responsibility can be overridden. In the case of Mannion and Mannion (March, 2007) the New Hampshire Supreme Court answered that question.

In Manion, the wife obtained a domestic violence order from the Derry District Court. She then filed for divorce in the Portsmouth Family Division. At the final divorce hearing the Portsmouth Family Division determined that no domestic violence had occurred. The court went on to award the husband sole decision making responsibility.

The wife appealed arguing that the Portsmouth Family Division should have considered the finding by the Derry District Court of domestic violence against the husband and awarded her sole decision making responsibility. The Supreme Court disagreed and held that RSA Chapter 461-A requires the court that makes the finding of domestic abuse be the same one that makes the award of sole decision making responsibility. Therefore, under the statute, the Portsmouth Family Division did not need to consider the finding of domestic abuse by the Derry District Court when it made its decision regarding decision making responsibility.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Land Owner Has No Duty To Protect A Neighbor

2010-04-08T11:01:00.001-04:00

The New Hampshire Supreme Court has clearly articulated the rule that a land owner generally has no obligation to protect a neighbor from wild animals that are present on the land owner’s property in the case of Belhumeur v. Zilm (May, 2008).
,
The parties in this case lived next door to each other. A colony of wild bees built a nest in a tree on the defendant’s property. The bees flew over to the plaintiff’s property and stung him. The plaintiff sued the defendant, arguing that the bees were a nuisance and the defendant had an affirmative duty to remove the bees.

The trial court dismissed the plaintiff’s claim, finding that defendant was not liable for injuries caused by wild animals on his property. The Supreme Court agreed and held that since the time of the Roman Empire wild animals were presumed to be owned by no one. Therefore, there is no duty to protect a neighbor from the independent actions of wild animals that are neither possessed nor harbored by the landowner.

In the Belhumeur case specifically, the Supreme Court held that the defendant had no duty to warn the plaintiff of the presence of the bees and no duty to remove the bees from his property. This analysis did not change even when the plaintiff claimed that the defendant had agreed to remove the bees in the past. The Supreme Court held that a mere promise to remove the bees did not impose an obligation upon the defendant to follow through and carry out the action.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Get Vendor Outsourcing In Writing

2010-04-08T10:58:00.001-04:00

A vendor may outsource the service it provides your employer. If you are negotiating vendor service agreements for your employer you should clarify in the agreement what portion of services, if any, the vendor can outsource to contractors and whether the vendor is still ultimately responsible for all services provided.

This is important since under New Hampshire law companies are generally not liable for their independent contractor's negligence. The three exceptions to this rule are when there is negligence of the company in selecting, instructing, or supervising the contractor, or when the work is inherently dangerous or when the company has a duty which can not be delegated, such as the duty to maintain a safe workplace or the duty of a building owner to maintain safe premises.

If your company wants its vendors to be ultimately responsible for their outsourced services, you need to specify this clearly in the written agreement between your company and the vendor. Otherwise, it is possible your company may be left pursuing a negligence claim solely against the independent contractor who may have a lot less resources available to remedy the problem or to pay any monetary damages. While the vendor should still be liable for any breach of contract caused by the independent contractor not fulfilling the vendor's contractual obligations, the vendor may not be liable for the contractor's negligence which causes the company property damage.

For example, your company hires a property management firm to provide all facility maintenance for your manufacturing plant and that company, in turn, hires an independent contractor to provide janitorial services. Your company would be best served by clarifying in the facility maintenance contract that the property management company is responsible for any damages caused by its employees or agents, irrespective of whether or not they are independent contractors of the vendor. Not only would this contract clarification assist your company in holding the property management firm liable for any janitorial negligence causing damage to the premises, but also that firm would have an additional incentive to provide oversight for the independent contractor's janitorial services.

Outsourcing contractual duties can be economically prudent because it allows a business to minimize overhead and thereby keep the cost down. However, your company should know up front, through expressed contractual provisions; a)whether your vendor will outsource and, if so, to whom, b) what level of oversight will be provided to your vendor's contractors, and c) whether the vendor is ultimately responsible for its contractor's errors and omissions.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Automobile Insurance in New Hampshire

2010-04-08T10:52:00.001-04:00

Most people who own a car in New Hampshire have their car insured. While we are all given copies of the insurance policy that we purchase, few of us take the time to sit down and read the policy word for word. An automobile insurance policy can vary greatly depending upon the types of coverage you purchase and the amount of coverage you purchase.

An automobile insurance policy has multiple “lines of coverage,” and each line of coverage does a different thing. Collision coverage, for example, protects the vehicle from damage it sustains in an accident. With collision coverage, the insurance carrier will pay to either have the car repaired or, if the cost of the repairs exceeds the value of the vehicle, it will pay for the value of the vehicle. The policy holder must pay a deductible when making a claim under the collision coverage. Depending upon whether the policy holder was at fault in the accident, some or all of the deductible may be returned at a later date.

One of the more important lines of coverage is liability coverage. If the vehicle is involved in an accident and the driver of the insured vehicle is at fault, liability coverage protects that driver of the vehicle in case of a lawsuit. In liability coverage, the insurance company will pay for the property damage and bodily injury sustained by the other party. The insurance carrier will also hire an attorney to represent the driver of the vehicle in case of a lawsuit. It is important to note that the insurance company is only obligated to pay damages up to the “limit of coverage”. For example, if the insurance policy has only $50,000.00 of liability coverage and the injuries and damages exceed $50,000.00, the insurance company is only liable for the first $50,000.00.

Automobile policies may also include medical payments coverage. Medical payments coverage pays for ambulance, doctors and hospital bills for the occupants who are injured in an accident. It is important to note that medical payments coverage may have limits both in the amount of money the insurance carrier will pay for medical bills and also the time that this coverage is available. For example, some policies may state that the medical bills must be incurred within one year of the date of the accident.

Finally, policies may include uninsured motorists coverage. Uninsured motorists coverage protects you if the other vehicle has no liability insurance or insufficient coverage. If the insured vehicle is involved in an accident and another party was at fault, uninsured motorist coverage will pay for the injuries sustained in the accident if the party at fault does not have insurance or their insurance coverage is insufficient to pay for the entire amount of the loss.

Two important things to note about uninsured motorists’ coverage; first, a claim may not be able to be made for uninsured motorists’ coverage unless the insurance company gives permission for the claim to be made. The insurance company will only give permission if it assures itself that the party responsible for the accident either has no insurance or has paid the full amount of insurance that they do have. Second, you must carefully look at the limits of your uninsured motorists’ coverage. If the at-fault driver has $50,000.00 of liability coverage and you have $50,000.00 of uninsured motorists’ coverage, you cannot make a claim because your uninsured motorists policy limits are equal to the other driver’s liability policy limits. However, if you have a $100,000.00 limit on uninsured motorists’ coverage, you can make a claim for up to $50,000.00 in a case where the other driver has only $50,000.00 of liability coverage.

In order to protect yourself, you should read your policy language carefully to ascertain how much coverage you’ve purchased and specifically what coverage you have. If you have any questions concerning your insurance policy or if you’ve been involved in an accident, you should consult with an attorney to find out your rights and obligations.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com

Franchise Agreements

2010-04-08T10:47:00.001-04:00

The Federal Trade Commission (“FTC”) adopted in January, 2007, after a twelve-year regulatory review, a final amended Franchise Rule, with a Statement of Basis and Purpose and Regulatory Analysis. The 2007 Franchise Rule represents the first time the FTC has amended its Franchise Rule (the “Original Franchise Rule”) since 1978. Under this Franchise Rule all franchisors are required to use the new Franchise Disclosure Document (“FDD”) as opposed the Uniform Franchise Offering Circular (“UFOC”)

The FTC’s 2007 Franchise Rule adopts disclosure requirements that closely track the UFOC Guidelines. In some instances, however, the 2007 Franchise Rule omits or streamlines UFOC Guideline disclosure requirements, such as broker disclosures, cover page risk factors, and detailed computer requirements. In addition, the 2007 Franchise Rule incorporates new disclosure requirements not found in the UFOC Guidelines, including disclosures related to a franchisor’s parent, franchisor initiated litigation, confidentiality clauses and the existence of trademark-specific franchisee associations.

One major transactional change relates to the time a prospective franchisee must have the document in their hands before contacts can be signed or any money paid. The former rule said the UFOC had to be in hand for at least ten business days AND a completed, separate franchise agreement had to be delivered to the prospective franchisee for at least five business days. Under the new rule, there is a fourteen-calendar day minimum review period that simplifies the complexity of completing a franchise transaction. There is another seven calendar day period that kicks in if the franchise company makes unilateral and material changes to the franchise agreement or other agreement attached to the FDD.

Key Points Include:

Financial Statements Start up or new franchisors may phase-in the use of audited financial statements. In this case, the franchisor must clearly and conspicuously disclose that the franchise has not been in business for three or more years and cannot include all required financial statements. (There may still be requirements to submit audited opening balance sheets in registration states). Franchisees should make sure to review the financials carefully as always. The FTC will allow the use of financial statements prepared according to GAAP.
No Broker Disclosures The Amended FTC rule eliminates the broker disclosure requirement. However, the broker will need to be listed on the Receipt Page because the Receipt Page requires the franchisor to identify all "franchise sellers".
Litigation. Franchisors will be required to disclose material franchisor-initiated litigation against its franchisees. The rule will be more lenient as a franchisor will only have to disclose actions that the franchisor filed during its last fiscal year - not the last 10 years. Further, a full description of the case will not be necessary. If a counterclaim is filed against a franchisee, the disclosure will need to be treated, as any other franchisee-initiated action and the regular, full disclosure will be required. (Franchisees will need to more fully investigate whether franchisor-initiated litigation occurred whether it is in the disclosure document or not).
Financial Performance Representations. The new rule encourages franchisors to provide financial performance representations but it is still voluntary. Franchisors may provide a more detailed cost and expense analysis that could be helpful for prospective franchisees. In addition, franchisors may provide financial representations based upon a subset that shares the same characteristics.

A Summary of the 23 Items
1) The Franchisor, Its Predecessors and Affiliates
Information about the franchisor, any predecessors and its affiliates. Disclosure includes a description of the business of the franchisor; previous business experience of the franchisor, its predecessors and affiliates; the business to be operated by the franchisees; and the general market for products or services offered by franchisees.
2) Business Experience
Information about the past five years' work experience of all executives of the franchise system (i.e., officers, trustees, directors, and managers) including their main occupations and past employers.
3) Litigation
Disclosure of prior (up to 10 years) or present litigation. This includes the franchisor and anyone affiliated with it; i.e., predecessors, executives and franchise brokers
4) Bankruptcy
Disclosure of any bankruptcy that has occurred within the past ten years involving the franchise, its affiliates or predecessors.
5) Initial Franchise Fee
Information on all initial fees to the franchisor including the initial franchise fee.
6) Other Fees
Information on other fees that are paid to the franchisor; i.e., ongoing royalty payments and advertising fees.
7) Initial Investment
Now in a useful chart format, this disclosure summarizes the franchisor's estimate of the typical investment costs of establishing a new franchise in their system.
8) Restrictions on Sources of Products and Services
This item outlines the requirements, if any, imposed upon the franchisee to buy or lease products or services from the franchisor or other designated authorized suppliers, and provides details of the specific restrictions imposed.
9) Franchisee's Obligations
This item lists in chart format the franchisee's obligations in 24 different categories: These categories include: site selection and acquisition, initial training, opening, compliance with system standards, territorial development, insurance, records and reports, and dispute resolution.
10) Financing
Describes and details any financing offered to the franchisee by the franchisor or affiliated third party.
11) Franchisor's Obligations
The franchisor's principal obligations under the franchise agreement. This includes a list of (1) services the franchisor is obligated to provide before the opening of the franchisee's business and (2) the services the franchisor is obligated to provide after the opening. The remainder of this item includes detailed information on the franchisor's advertising program, any required computer system or electronic cash registers, the operations manual, site selection criteria and procedures, and the franchisor's training and assistance program.
12) Territory
This section outlines territorial rights and restrictions. It includes disclosure on exclusive territory granted, whether or not the franchisor can open another franchise within the geographical area, conditions for relocating the franchise, and any sales quotas imposed on franchisees.
13) Trademarks
Discloses information on who owns the trademarks of the franchise, how each trademark is protected, and how the franchisee will be allowed to use the trademarks.
14) Patents, Copyrights and Proprietary Information
The franchisor must disclose in this section information about any patents, copyrights, confidential information, or trade secrets relating to the franchise.
15) Obligation to Participate in the Actual Operation of the Franchise
Information on whether or not the franchisee is required to personally participate in the operation of the franchise.
16) Restrictions on What the Franchisee May Sell
Describes the product line, and discloses any restrictions for other products or services you may be allowed to offer your customers
17) Renewal, Termination, Transfer and Dispute Resolution
Disclosure of the required conditions for renewal, termination, and transfer of the franchise. Also provides information on the approved methods for resolving conflicts and disputes with the franchisor.
18) Public Figures
If a franchisor uses a public figure for endorsing the franchise, or uses a famous person in the franchise's name or logo, it must disclose information on the compensation paid to the public figure, the amount of the public figure's investment in the franchise, and the public figure's involvement in the management of the franchisor.
19) Earnings Claims
The FTC does not require franchisors to provide earnings claims to franchisees. If a franchisor chooses to do so, there are strict rules as to the information provided in earnings claims.
20) List of Outlets
In this item, the franchisor must disclose information on: the number of franchise units; name, address and telephone numbers of all franchisees (up to 100); number of new franchises predicted for the upcoming year; and information and contact information on franchisees who have ceased to be franchisees.
21) Financial statements
Financial statements audited by an independent CPA must be provided. They include: (1) for the last three fiscal years -- cash flow statements, statements of operations, and statements of stockholders' equity; and (2) for the last two fiscal years -- balance sheets.
22) Contracts
This section provides copies of all contracts franchisees will be expected to sign if they choose to buy the franchise.
23) Receipt
An acknowledgement of receipt of the UFOC.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Be Careful Buying Foreclosed Properties

2010-04-01T10:07:00.004-04:00

When purchasing foreclosed properties at foreclosure auctions or later purchasing foreclosed properties from the bank which bought the property back at its own foreclosure sale, the old chestnut caveat emptor (or buyer beware) has taken on new meaning in light of several recent Massachusetts cases challenging the validity of certain foreclosure sales.

The issue raised is whether, at the time of the commencement of the foreclosure process, the foreclosing entity or bank actually owned the mortgage it foreclosed. In the past few decades, many homeowners have experienced the phenomenon of the secondary mortgage market by the receipt of at least one, and perhaps multiple notices that redirect monthly mortgage payments to a new entity. These instructions are the result of mortgages being sold by the original holder to third parties. When these sales occur the underlying loan documentation, including the Promissory Note and the Mortgage Deed, are supposed to be transferred to the new owner as holder. The conventional manner for this transfer is by endorsing the original Promissory Note to the new owner (much like endorsing a check), and by assigning the Mortgage Deed to the new owner or holder by a document known as an Assignment. The Assignment, recorded in the Registry of Deeds, puts the homeowner (and any other interested party wishing to check the public records) on notice as to the identity of the legal owner of the mortgage.

As the practice of securitizing large pools of packaged mortgage loans and then breaking them up into derivative-type securities became increasingly popular among financial institutions in the past few years (the “slicing and dicing” we have all read about in the newspapers), the paperwork documenting these transactions seems often to have gotten lost in the shuffle. The result is that many mortgage foreclosures are being brought by entities which do not have legal title to the mortgage because an Assignment naming them as the owner has not been recorded prior to the commencement of the foreclosure process.

The Massachusetts cases, currently on appeal, held that the foreclosures were defective based on a strict reading of the Massachusetts foreclosure statute since while the mortgage may have been sold to the foreclosing entity, that entity did not have an assignment of the mortgage. Recognizing that mortgage holders have the right to pursue their remedy of foreclosure when homeowners are in default, the Court also emphasized the statute’s consumer-protection feature upholding the requirement that the original notice commencing the foreclosure process identify “the holder of the mortgage” to the homeowner. Concluding that assignments to the foreclosing entity recorded after the foreclosure sale failed to properly identify the owner of the mortgage to satisfy the requirements of the foreclosure statute, the Court invalidated the foreclosure sales.

Certain national title insurance companies which insure titles in both New Hampshire and Massachusetts are currently refusing to insure titles out of foreclosure sales under the circumstances described above. Their position is based on the fact that the New Hampshire foreclosure statute is very similar to the Massachusetts statute Therefore unless the ruling on appeal in the Massachusetts cases reverses the lower court ruling, the underwriting risk is simply too great for the title insurance companies to bear.

In light of the uncertainty of titles to properties sold at or after foreclosure sales in circumstances with “missing” assignments, all interested purchasers would be well advised to consult with legal counsel before entering this arena.

Beth H. Davis is a director at Hamblett & Kerrigan, P.A. Her present practice focuses on real estate and business transactions. You can reach Attorney Davis by e-mail at bdavis@nashualaw.com.

Non-Disclosure Agreements

2010-04-01T10:04:00.001-04:00

If you are in business or just starting a new business, at some time your company will either be asked to execute a Non Disclosure Agreement or your company will want another party to execute an agreement that requires the receiving person or entity to protect your company’s confidential information.

These Agreements are sometimes called confidentiality agreements or limited use agreements. The agreement may be unilateral or it may be mutual, both parties are disclosing information. No matter what the document is called there are always a few keys elements that such an agreement should incorporate.

Define what is confidential information: It may be drawings, sales information, customer lists, financial information or it may be formulas or other information that you or your company treat as a secret.

Define the parties: Which party is disclosing the information? If both parties are disclosing information the agreement is a mutual agreement.

Define the information and make sure that the use of the information is limited: Is the purpose of the disclosure to consider an acquisition? If so, if the deal is not completed the party that has disclosed the information should include a provision that requires that the information be returned. If the purpose is to consider a potential sale of goods or services, the agreement should clearly state the purpose and require the receiving party’s use be explicitly limited thereto. Many times there is also a limitation as to who at the receiving party may review the information.

Confidentiality Obligation: Usually the receiving party agrees to protect the information in the same manner it protects it own confidential information. There are some limited exceptions or exclusions to the obligation such as if the information in the public domain prior to the agreement, or was known to the receiving party prior to the disclosure. Usually there is a provision that allows disclosure in response to a subpoena but only after notice to the disclosing party.

Warranties; No Further Agreement and Term: Most agreements will contain language that clearly states that the information is disclosed without warranty, in other words the information may not be completely accurate. The receiving party must make its own decision for instance as to how good the idea may be. The parties are also not agreeing to do business just because there has been an exchange of information. Finally, the agreement has a term such as 2-5 years. The obligation not to disclose extends beyond the termination of the agreement.

Applicable Law; Jurisdiction and Venue: If you are the party making the disclosure, you will want to use your own state’s laws and you will want jurisdiction and venue (where a suit would be filed) to apply. These issues become more complex in mutual agreements.

Agreements look fairly straightforward and you may be tempted to sign one without much thought or you may feel comfortable using someone else’s format as your own. It is always a good idea to talk with your business attorney and make sure that the agreement fits the transaction and that neither you nor your company is agreeing to something that may come back later and cause problems.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com.

Workers May Be Liable For On-The-Job Negligence

2010-04-01T10:00:00.000-04:00

Most people understand that a worker may be held responsible in a civil action for his own negligence at work which causes injury to others or for his knowingly criminal conduct at work. What workers must also understand is that under certain criminal statutes they may be held individually liable for their own negligent conduct even if conducted within the scope of their employment. Traditionally for a crime to be committed, the alleged perpetrator would require a "mens rea", a guilty or wrongful purpose. However, certain actions may result in criminal culpability even though the actions were done negligently rather than with a criminal intent. This is known in the law as strict criminal liability. In the case of USA v. Hanousek, the U.S. 9th Circuit Court of Appeals upheld as proper the Federal District Court’s instruction to the jury that Mr. Hanousek could be found criminally liable for negligently discharging a harmful quantity of oil into navigable waters of the United States under the Clean Water Act. After a 20-day trial, the jury convicted Mr. Hanousek of that crime.

The criminal charge was a result of an estimate of 1,000 to 5,000 gallons of heating oil being discharged into the Skagway River in Alaska when a backhoe struck an unprotected pipeline. Other sections of the pipeline had been protected during the project, yet when Mr. Hanousek took over responsibility of the project for his employer, Pacific & Arctic Railway and Navigation Company, he ceased the prior practice of protecting the pipeline thereby permitting the discharge when the accident occurred.

The Appellate Court agreed with the trial court that for criminal culpability there does not need to be a heightened negligence standard and agreed with the following jury instruction: "In order for the defendant Ed Hanousek to be found guilty of negligent discharge of oil, the government must prove the following elements beyond reasonable doubt:
· The particular defendant caused the discharge of oil;
· The discharge of oil was into a navigable waterway of the United States;
· The amount of oil was of a quantity that may be harmful; and
· The discharge was caused by the negligence of the particular defendant."

As a result of the criminal conviction, Mr. Hanousek was sentenced to six months in prison, six months in a halfway house and six months of supervised release. Mr. Hanousek was given a sentence greater than the minimum because he was a supervisor, a factor which can be taken into account under Federal Sentencing Guidelines and was by the sentencing judge.

A very clear lesson from this case is that a worker does not always have to have a guilty or wrongful purpose to be found culpable under certain criminal statute for actions or inactions at work. While a company’s insurance may sometimes help insulate its workers from the financial ramifications of their negligence, the criminal penalties of fines are usually excluded from insurance coverage and such insurance cannot protect from a jail sentence. Workers, particularly supervisors, should understand what environmental and other hazards are possible at work and take steps to minimize those hazards for the best interests of everyone.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Medical Malpractice Law in New Hampshire

2010-04-01T09:57:00.001-04:00

A medical malpractice case, also known as a medical negligence action, while fundamentally easy to understand, can be one of the most difficult cases to try in a New Hampshire courtroom. In a medical negligence action, the plaintiff must prove a claim that is very similar to an ordinary negligence case, such as a slip and fall or automobile accident. Specifically, the plaintiff must demonstrate that the medical provider was obligated to do a certain thing or refrain from doing a certain thing, the medical provider failed to act or refrain from acting, and as a result of the medical provider’s failure the plaintiff was injured.

Where a medical negligence action diverges from a more routine automobile accident or slip and fall case concerns the evidence the plaintiff must present at trial. There is a statue in New Hampshire which requires the plaintiff, in order to proceed with a medical negligence action, to introduce expert testimony which shows what the medical provider was supposed to do or not do when the treatment was rendered and that the medical provider’s failure to act in accordance with this “standard of care” caused the plaintiff’s injury.

The expert witness must be a person who is familiar with the standard of care that was in existence when the treatment was rendered. Usually this means another medical provider with training and experience similar or superior to the provider being sued. Attempts to “cut corners” with this expert witness can result in the jury disbelieving the expert or the court dismissing the action prior to the case even reaching the jury.

An example of such an extreme sanction occurred when a plaintiff claimed she was injured when an ophthalmologist prescribed an allegedly inappropriate medication for her. The plaintiff attempted to prove her case by calling a pharmacist to testify that the medication prescribed by the ophthalmologist was not appropriate. The plaintiff’s case was dismissed prior to reaching the jury because the court felt the pharmacist was not familiar with the standard of care that applied to ophthalmologists at the time the plaintiff was injured.

Successful prosecution of a medical negligence case requires a through analysis and understanding of the standard of care applicable to the medical provider who is the subject to the lawsuit as well as a thorough understanding of the treatment rendered and the results of that treatment. It is not enough that the plaintiff suffers an unfortunate outcome as the result of treatment. Only if the medical provider was negligent in performing the treatment can a claim for medical negligence possibly exist.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com

Adverse Possession in New Hampshire

2010-03-25T10:42:00.001-04:00

One of the oldest doctrines in property law is known as adverse possession which is the taking of title to real estate by possessing it for a certain period of time It allows a party to obtain ownership of a piece of property without having a deed.

Adverse possession is most frequently seen in boundary line disputes. The boundary line challenge may only occur years after the purchase of the disputed land. For example, your neighbor does a survey of his property lines to fully understand the set back limitations for an anticipated home addition and in the process discovers that land he has always assumed was his and treated as his own may not be encompassed on his deed. In many old deeds, there may be only a vague reference to where a boundary line is located. Frequently the markers used in a deed to determine the boundary line, for example a tree or a stone wall, has been cut down or removed. Therefore, most property owners who trace their title back to deeds from the 1800’s may have only a general sense as to where their property line exists.

To make a claim for adverse possession, the claimant must have acted as if he is the true owner of the property. The claimant must possess the land to the exclusion of all other uses and he must possess the land conspicuously, that is doing things on the property that would show the world that he owns the property. Among those things might be building a house, logging, farming, planting a hedge or building a fence. Further, the claimant must possess the land adversely to the actual owner. This means that the adverse possessor cannot be occupying the land with the permission of the owner. The adverse possessor and the actual title owner are often both under the mistaken belief that the adverse possessor owns the land and the title owner is not giving permission to use land he does not believes he owns. Furthermore, the adverse possessor as acting as the title owner because he believes he is the title owner.

In New Hampshire the adverse possessor must do all the above actions continuously for a period of twenty years. If a prior adverse possessor was occupying the land for seventeen years and conveyed the property or their interest in the property to a second party who continued to adversely possess it for three more years before the neighbor challenges title to the land, then the twenty year period is satisfied.

Other locales where adverse possession can occur are roads, paths or beaches. For example a person may use a path to cut across another person’s property. If the user of the path has been openly and continuously using the property for twenty years, the true owner may be unable to stop them from continuing to do so.

If you believe that an adverse possession situation may exist, you should consult with one of the experienced attorneys here at Hamblett & Kerrigan to review your chain of title and the neighbor’s chain of title.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Signed Release Limits Litigation

2010-03-25T10:39:00.002-04:00

When an employer fires an employee and provides her severance pay she would not otherwise be entitled to, that employer should seriously consider requiring the employee to sign a release in exchange for the severance pay. A clear, properly drafted and signed release may prevent the employer from incurring substantial costs in time and money to defend a potential legal claim by the former employee. The New Hampshire federal court ruled to enforce such a release and barred the former employee from bringing a claim against the employer in April, 2008, in the case of Carol A. Budro v. BAE Systems Information and Electronics Integration, Inc .

Carol Budro represented herself and alleged that BAE violated the Age Discrimination and Employment Act (ADEA) by denying her employment opportunities within the company because of her age and by terminating her after she complained. Budro was employed from 1972 until she was laid off in August 2006 as part of a reorganization. Budro had worked with a team setting up a test lab for BAE and her primary role involved acquiring materials and equipment. According to Budro, once the lab was complete her managers told her that there were no employment opportunities in BAE that required her skill set.

When Budro was laid off, she was given the option to preserve any claims she had against BAE and receive a basic severance benefit, which for her amounted to $1,937.60, or take the supplemental pay on the condition that she sign a release. The supplemental severance pay for her totaled $27,126.40. Budro took the supplemental severance pay and signed the release.
The Court found the release complied with all the special provisions necessary to make it valid under the ADEA including giving her the right of up to 45 days to review the release with additional information to determine how older workers were affected in the layoff. If an employment termination not related to a mass layoff but solely related to one employee, the time period given to the employee to review a release is 21 days. Thereafter, if the employee has signed the release, she has 7 days to revoke her acceptance of the severance pay in exchange for the release, but thereafter cannot revoke the release as it is binding.

In Budro's case against BAE, the New Hampshire federal court found that the release was binding and dismissed Budro's claims against BAE without her having an opportunity to be heard before a jury. Irrespective of whether Budro's underlying claim of age discrimination had merit or not, BAE saved substantial costs of litigation, both in time and money, by having a properly drafted and executed release which allowed them to have the case dismissed.

If an employer believes an employee may have sufficient claims and may be unwilling to sign a release in exchange of the severance pay offer, the employer should contact its employment counsel rather than forgoing offering the severance pay in exchange for a release. It will be important to discuss the specific circumstances of the case and determine the best strategy when dealing with that employee. Among the options might be the decision not to terminate the employee at that time and use the time to further document performance problems before terminating the employee or to increase the proposed severance payment to be paid in exchange for the release.

J. Daniel Marr is a director and shareholder of Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and business persons on a variety of legal issues, including employment, and advocating on their behalf. You can reach Attorney Marr by e-mail at: dmarr@hamker.com

Insurance Policies – Know Your Limits

2010-03-25T10:38:00.000-04:00

An insurance policy is a contract between the insurance company and the insured. Under this contract, an insurance carrier agrees to pay money to the insured in the event of a covered loss. A covered loss is a loss that the insurance carrier has agreed to protect the insured against in the event of its occurrence.

For example, in an automobile policy there are many “covered losses” that the insurance policy may protect against. Under the line of coverage known as “collision coverage,” the insurance carrier will pay to repair the damage done to your vehicle in the event it is involved in an accident. Automobile policies may also carry coverage known as medical payments. This coverage will reimburse a passenger or driver of the vehicle for medical bills they have incurred if they are injured in an accident.

There are two very important things to remember when reading an insurance policy. The first is to clearly identify what covered losses are part of the policy. Remember, an insurance carrier has no obligation to provide coverage for a loss that is not covered. One of the most frequently excluded areas are claims that allege an intentional act. For example, an insured owns a homeowners’ insurance policy. The insured gets into a fight with a visitor and injures the person who brings a lawsuit against the homeowner claiming he was intentionally injured.. If the insurance policy has exclusion for intentional acts, there will be no coverage for this loss.

The second area that must be read carefully is the limit of coverage. The limit of coverage is the maximum dollar amount the insurance carrier will pay in the event of a loss. For example, an automobile insurance policy may have medical payments coverage of $1,000.00. This means the insurance policy will pay up to $1,000.00 for medical bills sustained by a driver or passenger in the event of an accident. There is no obligation to pay for medical bills beyond the $1,000.00 limit. You may also see in an automobile policy a section for liability coverage that reads, for example, $100,000.00/$300,000.00. This means that the event the insured causes an accident, the insurance carrier will pay $100,000.00 for each injured person or $300,000.00 maximum for that accident, whichever is less.

Let me repeat that insurance policies are contracts. When a person purchases an insurance policy they are assumed to have read the policy on a “more than casual basis”. The fact insured was unaware that a term or condition was part of the policy or failed to read that term or provision will not invalidate it. If you have any doubts as to the scope of coverage or limits of coverage of any insurance policy that you own, you should speak with an insurance professional or an attorney.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Release Did Not Protect "State Farm"From Second Suit

2010-03-11T08:57:00.003-05:00

On March 10, 2010, the New Hampshire Supreme Court issued a decision which I am sure was a disappointment to the folks at State Farm Insurance. However, how far reaching that decision actually is remains an open question as far as I am concerned.

The appeal in Balamotis v. Hyland d/b/a State Farm Agent concerned a homeowner’s ability to recover damages suffered to her reasonably new home which was badly damaged by a fire. She initially was in a dispute with State Farm over the amount of loss she had suffered and that led to a battle over how much she was entitled to recover from State Farm. But that dispute was negotiated to successful conclusion and settled with the money being paid by State Farm in exchange for her signed release of all claims against State Farm.

However, once that claim was over the homeowner brought a second claim, this time against her insurance broker for his failure to provide her with adequate insurance coverage for the home. State Farm cried “foul” and said that because the insurance agent was exclusively a State Farm insurance agent, he was immune from the suit due to the earlier executed release. The homeowner said not so fast and the New Hampshire Supreme Court agreed.

Essentially the Court found that the earlier action against the insurance carrier was different and separate from the suit against the agent, and that even if he was an exclusive agent that did not bring him within the terms of the release. More importantly, the release did not include him by its terms, either specifically or generally.

It is for that reason I doubt the decision will have any long term impact. The releases I use always are long and tedious, but they work and do exactly what they were structured to do. Standard good practice has dictated for some time that a release include the released party as well as, at least generally, its agents and employees. The fact that State Farm’s did not do so is what gave rise to this interesting appellate decision. And this decision is something that should be kept in mind by those both writing or reviewing releases.

Timothy G. Kerrigan is a director at Hamblett & Kerrigan, P.A. His present practice focuses on complex legal situations both in the litigation and in the ADR context. He is available as a litigator, client advocate or as an ADR neutral. Mr. Kerrigan is certified by the State Office of Mediation and Arbitration both as a mediator and as an arbitrator. You can reach Attorney Kerrigan by e-mail at tkerrigan@nashualaw.com.

Physician Not Liable For Patient’s Suicide

2010-03-11T08:55:00.001-05:00

The New Hampshire Supreme Court was asked to decide whether a physician could be held liable for the suicide of a patient. After reviewing the facts alleged by the plaintiff
in the recent case of Estate of Maloney v. Badman, the Court held that the defendant could not be held liable in this particular instance.

Helene Maloney committed suicide on July 18, 2001 via an overdose of Percocet. Throughout her life she had suffered from Crohn’s disease, depression and suicidal ideation. The decedent saw a number of doctors including the defendant.

Dr. Badman saw the decedent approximately 9 times between 1999 and 2001. He prescribed her Percocet and Valium, but stopped prescribing medications to her in 2000. Dr. Badman was aware that the decedent was seeing a psychiatrist, had become severely depressed and was struggling with mood regulation. Dr. Badman was aware of the fact that the decedent was contemplating suicide if her illness became too much to bear, but that she did not have a plan to commit suicide.

The decedent’s husband sued Dr. Badman claiming that the Valium prescribed by Dr. Badman accelerated her depression and ultimately caused her suicide. Dr. Badman moved to dismiss the case, arguing that he had no duty of care to prevent the decedent’s suicide. This duty, in law, rests essentially on two classes of defendants, each of whom have a duty of custodial care, is in a position to know about suicidepotential, and fails to take measures to prevent suicide from occurring. Specifically, this duty has been imposed on: (1)institutions such as jails, hospitals and reform schools, having actual physical custody of and control over persons; and (2) persons or institutions such as mental hospitals, psychiatrists and other mental-health trained professionals, deemed to have a special training and expertise enabling them to detect mental illness and/or the potential for suicide, and which have the power or control necessary to prevent that suicide.

The trial court ruled in Dr. Badman’s favor and the Supreme Court affirmed this decision.

The Supreme Court held that, in Dr. Badman’s case, he had no reason to believe that the decedent would use the Percocet to commit suicide. The decedent did not express suicidal ideation when Dr. Badman last saw her in 2001. The decedent also failed to tell Dr. Badman that she attempted suicide 4 years earlier. The decedent’s family never informed Dr. Badman that the decedent was suicidal. In fact, in the week prior to her suicide, the decedent saw a mental health provider on four separate occasions and at no time was assessed to be suicidal.
In sum, the Supreme Court held that the plaintiff failed to show that Dr. Badman was aware of the decedent’s suicidal ideations or had sufficient control over the decedent, so that he could have prevented the suicide. For those reasons, therefore, the Supreme Court concluded that Dr. Badman should not be held liable for the decedent’s death.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com.

Shhh! Keep trade secrets under wraps

2010-03-11T08:48:00.002-05:00

A worker is prohibited under New Hampshire law from disclosing or using her employer’s trade secrets even if she did not sign a confidentiality agreement. New Hampshire law prohibits the misuse of an employer’s confidential and proprietary information by statute. RSA 350-B, Uniform Trade Secret Act, makes it illegal to disclose or use a trade secret of another without express or complied consent.

Under that Act, a trade secret is defined as information including a formula, pattern, compilation, program, device, method, technique or process that is of particular value because of its confidential, proprietary nature and is subject to efforts that are reasonable under the circumstance to maintain its secrecy. A customer list, particularly to the extent it has detailed customer information that is not known to the employer’s competitors, may constitute a trade secret and therefore a worker who discloses or uses the contents of customer list may be in violation of the Act.

If a former worker were to disclose or use such information in competition with her former employer, even absent a confidentiality agreement or non-compete agreement, the employer may still be able to get a court injunction prohibiting the former worker from such use. Furthermore, to the extent the employer was damaged, the law entitles the employer to receive a monetary award which could include both the actual loss to the employer and the unjust enrichment to the former employee caused by the misappropriation not taken in account in computing actual loss. Therefore to the extent the use of these trade secrets by the former worker benefited her more than the actual loss caused to her former employer, those monies may also be recouped by the former employer from her and those who were conspiring with her in using those trade secrets.

In cases where the employer is able to show willful or malicious misappropriation, the Court may award exemplary damages not to exceed twice the amount of the total damages and unjust enrichment. The Court may also award reasonable attorney’s fees to the winning party if it finds that the claim of misappropriation was made in bad faith or a motion to terminate an injunction is made or resisted in bad faith or willful and malicious misappropriation exists. Depending on the facts of the matter, it is also possible that federal laws and state criminal laws of theft apply.
In conclusion, a worker who is considering leaving her former employer should realize that, if she did not sign a confidentiality agreement or non-compete agreement, she has certain legal obligations to her former employer under the law. It would be prudent for her to discuss with legal counsel what those legal obligations are when she takes a new job with a competitor or sets up her own company to compete with her former employer.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

The Appellate Process In New Hampshire

2010-03-11T08:42:00.004-05:00

Readers of these articles will have noticed that many of them deal with recent New Hampshire Supreme Court decisions. The purpose of this article is to explain, briefly, the role of the state Supreme Court in New Hampshire’s legal system and what an appeal to that court entails. The NH Supreme Court is the highest court in the state system and oversees all other courts. It is composed of a Chief Justice and four associate justices and sits in Concord.

The other courts are collectively known as the trial courts and include district court, probate court, superior court, and, in some counties, the family division. As the names suggest, the trial courts are responsible for resolving the initial dispute between the parties. The trial court hears the testimony from witnesses and reviews the documents or other evidence the parties introduce. When the case before the trial court is concluded, the judge or jury will reach a decision.

Under New Hampshire law, if a party is dissatisfied with the decision of the trial court, it has the right to appeal the decision to the New Hampshire Supreme Court. The aggrieved party must be file the appeal within a specific time or the Court will dismiss the case.

While the Supreme Court is also a trial court in limited circumstances, most of its function is as an appellate court (which means a court that deals with appeals). When it acts as an appellate court, it does not hear witnesses nor does it receive new evidence. Instead, its task is to review what occurred in the trial court to make sure that the proper law was applied and that the proceedings were fair. The Supreme Court may review a transcript (the written record of the parties and witness testimony) of the trial court proceedings, as well as copies of the exhibits introduced before the trial court and the written pleadings submitted to the trial court. In an appeal, each side is allowed to file written arguments, known as briefs to explain their position. Do not be fooled by the name -- briefs are usually anything but brief, a point made by writer Franz Kafka, who defined a lawyer as "a person who writes a 10,000-word document and calls it a brief.” A brief typically sets out the facts of the case and a party's legal arguments. These arguments must be supported by legal authority and precedent, such as statutes, regulations, and previous court decisions. The Supreme Court may but is not required to ask, the parties to appear for oral argument. Oral arguments last no more than fifteen minutes and are an exchange between the Supreme Court justices and the appealing party or their attorney debating the merits of the legal positions. The Court will not make a decision at the end of oral arguments. In most cases the Court will consider the matter and issue a written decision at a later date. A copy of this decision is sent to all parties involved. A copy of the decision is often published on the Supreme Court's website and in bound volumes of decisions called the New Hampshire Reports.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com

Handling Records' Retention in the Electronic Age

2010-03-04T11:11:00.005-05:00

The duty to preserve relevant documents, whether written or electronic, arises whenever parties reasonably anticipate the possibility of litigation. When a party reasonably anticipates litigation, that party must suspend its routine document retention policy and put a “litigation hold” in place in order to ensure the preservation of relevant documents. Judge Shira Scheindlin in the case of The Pension Committee of the University of Montreal Pension Plan et al., v. Banc of America Securities, LLC, et al., 2010 noted that this case did not present any egregious examples of the purposeful destruction of evidence but rather was a situation in which some of the plaintiffs failed to institute timely written litigation holds and engaged in careless and indifferent collection efforts after their duty to preserve arose. It is noteworthy that the judge stated that there are “cases routinely define negligence, gross negligence, and willfulness in the context of tortious conduct. [But,] I have found no clear definition of these terms in the context of discovery misconduct. It is apparent to me that these terms simply describe a continuum. Conduct is either acceptable or unacceptable."

On January 15, 2010, Judge Shira Scheindlin of the United States District Court for the Southern District of New York, issued an 85-page amended opinion in the case of The Pension Committee of the University of Montreal Pension Plan et al., v. Banc of America Securities, LLC, et al., 2010. Judge Scheindlin, the author of a series of landmark electronic discovery opinions in Zubulake v. UBS Warburg, titled her recent opinion: “Zubulake Revisited: Six Years Later.”

Briefly, the case originated in 2004 when 96 investors sought to recover losses of $550 million from the liquidation of two British Virgin Islands-based hedge funds in which they held shares. They asserted claims against former directors, administrators and other officials connected with the funds.

The plaintiffs first produced electronic documents responsive to discovery requirements in 2004 when the complaint was filed. They did so again in 2007 when a stay was lifted. After depositions were taken the court additionally ordered each plaintiff to provide a declaration setting forth what efforts they each had undertaken to recover documents. When discovery closed, the defendants moved for sanctions, arguing that the plaintiffs had failed to preserve and produce documents including several that had been stored electronically. They also claimed the plaintiffs submitted false and misleading declarations. After stating that the court did not expect perfection, the judge wrote that 13 of the plaintiffs should be sanctioned for negligence and gross negligence, stating that “the courts have a right to expect that litigants and counsel will take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed, and produced to the opposing party." Otherwise, she stated, the “integrity of the judicial process is harmed and the courts are required to fashion a remedy."

So here are some teaching points from this decision. First, the issue of spoliation can be made against either party. In this case, the plaintiffs were the spoliators and the judge did not hesitate to sanction them, including ordering an adverse inference against the plaintiffs that the judge found had engaged in grossly negligent conduct. Second, the judge held that the “failure to issue a written litigation hold is [sufficient to] constitute[ ] gross negligence because that failure is likely to result in the destruction of relevant information.” Therefore, the need for the litigation hold to issue is of substantial importance as a part of the document retention protocol when litigation is reasonably likely. Third, the judge reiterated the importance of preserving records of former employees that are in a party’s possession, custody or control. The court held that the failure to preserve such documents supported a finding of gross negligence. Fourth, the judge made clear that there is no duty to preserve backup tapes unless the tapes are the sole source of relevant information for the key players and the information is not obtainable from readily accessible sources. If the tapes are the sole source of relevant information, then those backup tapes should be segregated and preserved. “When accessible data satisfies the requirement to search for and produce relevant information, there is no need to save or search backup tapes.”

Certainly, a party should want to comply with appropriate record retention protocol because in the event of noncompliance, the risk and level of sanction can be overwhelming and is left to the sound discretion of the trial judge. But also remember that if protocol was not or cannot now be followed, candor with your opponents and the judge is critical. It may mean the difference between the court ruling on a sanction for careless indifference and one based upon an intentional attempt to mislead the parties or the judge as to the level of compliance the party was able to accomplish.

Timothy G. Kerrigan is a director at Hamblett & Kerrigan, P.A. His present practice focuses on complex legal situations both in the litigation and in the ADR context. He is available as a litigator, client advocate or as an ADR neutral. Mr. Kerrigan is certified by the State Office of Mediation and Arbitration both as a mediator and as an arbitrator. You can reach Attorney Kerrigan by e-mail at tkerrigan@nashualaw.com

part 2 - Massachusetts Privacy Law Applies To Businesses Located In New Hampshire

2010-03-04T08:58:00.004-05:00

Creating A Written Information Security Plan (Wisp) Is A Key Component Of Compliance

Pursuant to 201 CMR 17.00, the Massachusetts Privacy Law, your entity must develop, implement, maintain and monitor a comprehensive Written Information Security Program (WISP) to ensure the security and confidentiality of personal information in both physical and electronic format. The actual scope and complexity of a WISP will vary depending on size and scope of business, availability of resources, nature and quantity of data stored, and the need for security and confidentiality of both consumer and employee information.

When drafting a WISP, you must balance the requirement to incorporate the required technical and physical safeguards for the protection of personal information you have obtained with the objective of reasonable and effective administration. I have out together some general guidelines for you to consider.

1. Information Assessment
Identify Records Containing Personal Information of Massachusetts Residents
You will need to identify which records contain personal information in order to properly handle and protect that information.
Assess Current Information Handling Processes. Review your current processes for collecting, retaining and using personal information.
o What personal information is collected?
o In what form (hardcopy and electronic) is personal information being collected?
o What becomes of this collected information?
o What becomes of the completed forms used to initially collect the personal information?
o If the personal information is stored electronically, who has access to it?
o How is this information disposed of after it is no longer needed?

Identify any open issues. If the above analysis identifies any problems with unauthorized access or unauthorized use of personal information, you must institute and document corrective actions to correct the problems and ensure future compliance.

Limit the Nature and Amount of Personal Info Collected. Collect only the information that is necessary for your business purpose.

Retain Info Only as Long as Necessary. Maintain personal information records only as long as needed. This is no longer mandated by the regulations but is good business practice.

Designate a Data Security Coordinator. The Massachusetts Privacy Law explicitly states that one or more of your employees must be designated as an information security coordinator and charged with maintaining your information security plan. The responsibilities of the coordinator(s) should include

o Initial implementation of the plan
o Initial training of employees including temporary and contract employees (annually thereafter) o Regular testing of the plan’s safeguards
o Annual review of the scope of the plan or whenever there is a material change in business practices that may affect the security or integrity of records containing personal information
o Evaluating the ability of third party service providers to comply with 201 CMR 17.00

2. Information Access
Pursuant to the regulations, you need to have reasonable restrictions on physical access to records containing personal information.

Keep It Secure. All hard copy records containing personal information belonging to Massachusetts citizens should be stored in locked facilities, storage areas or containers.

Restrict Access. Access to records containing personal information, whether in hardcopy or electronic format, should be limited to those who require it in order to perform any part of their job function.

Establish Policies For Use and Transportation of Personal Information. Implement policies and procedures for employees who are storing and transporting records containing personal information outside of your business premises.

Protection From External Threats. Use security tools, firewalls and malware protection to protect your operating systems.

Visitor Procedures. This will depend greatly upon the size and nature if your business, but each entity needs to consider how to control access to the areas in which personal information is stored and used.

3. Computer Security Requirements
The computer security requirements of 201 CMR 17.00 do take into account the size and nature or each business effected and as a result allow each company to determine what is technically feasible which is defined as “a reasonable means through technology to accomplish a required result, then that reasonable means must be used.”

Secure User Authentication Protocols. These protocols must include control of user IDs and other identifiers; a reasonably secure method of assigning and selecting passwords; control of password security; restricting access to active users and blocking access after multiple failed attempts.

Secure Access Control Measures. These measures must include restricting access to records and files containing personal information to those who “need to know” to perform their jobs. In addition unique IDs and passwords (not shared nor vendor supplied default passwords.) need to be assigned.

Monitoring for Unauthorized Use or Unauthorized Access. Reasonable monitoring of systems for unauthorized use of or access to personal information is required. There are a variety of methods and tools available in order to effectively monitor and protect against unauthorized activity - intrusion detection tools, application logs, server firewalls, network security logs and file system auditing, to name a few.

Firewall Protection and Operating Systems Patches. For files containing personal information on a system that is connected to the Internet, you must implement and maintain “reasonably up-to-date” firewall protection and operating system security patches.

Viruses and Malware. You must implement and maintain “reasonably up-to-date” versions of system security agent software that includes malware protection and “reasonably up-to-date” patches and virus definitions. Additionally, you must be set up to receive the most current security updates on a regular basis.

4. Encryption
Laptops, portable devices, backup tapes, email and public network and wireless transmissions containing personal information require encryption where it is reasonable and technically feasible.

Encrypt Transmitted Records Containing Personal Info. If it is technically feasible to do so, outgoing emails containing personal information, as well as any personal information traveling across public networks or transmitted wirelessly, should be encrypted. If it is not “technically feasible” to encrypt, then don’t send personal information in this manner.

Encrypt Only Portable Devices Containing Personal Info. Not all portable devices need to be encrypted. Only those portable devices that contain personal information should be encrypted and, again, only if it is “technically feasible”.

Don’t Ignore Your Web Site. Company or third party web portals onto which the personal information of Massachusetts citizens is entered should be verified as being secure.

5. Vendor Management
Evaluate the Capacity of Your Third Party Service Providers. The regulations require you to take reasonable steps to select and retain third party service providers who are capable of maintaining appropriate safeguards to protect personal information. Such security measures should be consistent with those set forth under 201 CMR 17.00 and any applicable federal regulations. Massachusetts defines a service provider as any person that receives, stores maintains, processes, or is otherwise permitted access to personal information through its provision of services directly to a person that is subject to this regulation. Simply put, this includes any vendors who handle personal information of Massachusetts citizens on your behalf (e.g., background check services, payroll services, life and health insurance providers, 401K administrator services, credit card processing firms, etc.)

Third Party Service Providers Must Be Contractually Obligated to Implement and Maintain Appropriate Security Measures. Each vendor you do business with must enter into a written agreement, or it may be incorporated into the contract, that requires them to implement and maintain appropriate measures for protecting personal information.

6. Employee Issues
Train Employees on an Ongoing Basis. Train employees on the proper use of computer security system and the importance of personal information security.

Document Employee Attendance at Training Sessions. As a standard practice all attendees at these training sessions should certify their attendance at the meeting and their familiarity with the company’s requirements for protection of personal information.

Impose Disciplinary Measures for Violations. Establish and enforce disciplinary measures for employees who violate the security program’s rules.

Prevent Terminated Employees from Accessing Personal Information. Implement measures that prevent terminated employees from accessing records containing personal information. It is good practice upon their termination to immediately cancel their physical and electronic access to such records, including deactivating their passwords and user names.

7. Ongoing Monitoring
Regular Monitoring of Information Security Program. The new Massachusetts Privacy Law requires companies to conduct regular reviews of their information security policies for relevancy and operational effectiveness as well as regular reviews of organizational adherence to the established operational protocols. The regulations state that these reviews must be conducted on an annual basis (at a minimum) or whenever there is a material change in business practices that may affect the security or integrity of records containing personal information.

WHAT DO YOU NEED TO DO

While the deadline has already arrived, it is not too late to begin the process. Hamblett & Kerrigan can provide the assistance necessary to write the WISP and to review your employment practices to insure compliance.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com

Part 1 Massachusetts Privacy Law Applies To Businesses In New Hampshire

2010-03-04T08:46:00.005-05:00

The Commonwealth of Massachusetts enacted 201 CMR 17.00 which is designed to protect state citizens’ personal information. This law, which has already been revised and postponed three times, now requires all covered entities to achieve full compliance by March 1, 2010. Does the new Massachusetts privacy law apply to a company or entity that is located in New Hampshire? The answer is “yes”.

The regulations apply to any entity engaged in commerce that own or license personal information from a resident of the Commonwealth. Massachusetts has defined owns or licenses to mean “Receives, stores, maintains, processes, or otherwise is permitted access to personal information through its provision of goods or services directly to a person that is subject to this regulation.”

Under the law, personal information to be protected includes a Massachusetts resident’s name (either first and last name or first initial and last name) as well as a complete social security number, driver’s license, or other state-issued number, a financial account number or a complete credit card or bank account number. The law speaks to a wide variety of informational records - everything from employee, client, customer and investor records to supplier, patient and student records. What it does not include is any information that is lawfully obtained from publicly available information or from federal, state or local government records lawfully made available to the general public. A person’s date of birth is an example of publicly available information that would not be protected under this law.

Even if an entity is located in New Hampshire, as long as it deals with a Massachusetts resident or company the entity is subject to the privacy law

Failure to Comply

The consequences of non-compliance include:
Increased exposure to lawsuits If a breach has been determined to have occurred and there has been a failure to comply, the Massachusetts Attorney General can file suit against the company.
A civil penalty of $5,000 may be awarded for each violation under Chapter 93H of the Massachusetts General Laws.
Businesses can be subject to a fine of up to $50,000 for each instance of improper disposal. under the portion of 93H concerning data disposal,
Other consequences of failure to comply include damages to a company’s reputation as well as the time and resources required to determine the cause and extent of a breach, notifying affected individuals of a breach and implementing corrective action to ensure a breach does not occur in the future.

Creating a Written Information Security Plan (WISP) is a Key Component of Compliance

Pursuant to 201 CMR 17.00, the Massachusetts Privacy Law, your entity must develop, implement, maintain and monitor a comprehensive Written Information Security Program (WISP) to ensure the security and confidentiality of personal information in both physical and electronic format. The actual scope and complexity of a WISP will vary depending on size and scope of business, availability of resources, nature and quantity of data stored, and the need for security and confidentiality of both consumer and employee information.

When drafting a WISP, you must balance the requirement to incorporate the required technical and physical safeguards for the protection of personal information you have obtained with the objective of reasonable and effective administration.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com

Premarital Agreements In New Hampshire

2010-02-18T09:36:00.003-05:00

While once considered only the province of the rich and famous, premarital agreements are becoming more common in today’s society. A premarital agreement is a contract signed before the marriage between the soon to be husband and the soon to be wife which sets forth the division of assets and liabilities in the event of death and/or divorce. For example, one party may come into a marriage owning significant assets such as real estate or investments and he or she may want a premarital agreement so that in the event of death or divorce the terms of the premarital agreement would govern the other spouse’s claim to those premarital assets.

Premarital agreements must be drafted with extreme caution. It is important, first, to understand that a New Hampshire court will not enforce any premarital agreement which attempts to set forth a child custody schedule or a child support order.

When negotiating a premarital agreement, both sides must make a full, accurate and complete disclosure of their financial assets and liabilities. If it is subsequently shown that there was not a complete or accurate disclosure, the premarital agreement could be voided.

When negotiating a premarital agreement, one should take care to ensure that there was adequate time before the wedding to resolve any disputes in the agreement. While a New Hampshire court will not automatically invalidate a premarital agreement that is given to the spouse on the eve of the wedding, such timing could be a significant factor in determining whether the agreement is enforceable..

In determining whether a premarital agreement is enforceable a court will take into account the skills of the attorneys who drafted the agreement, whether they had adequate time to fully familiarize themselves with the case and if they had time to determine whether a full and complete disclosure of assets had been made. In a recent decision, the Supreme Court invalidated a premarital agreement that was negotiated days before the wedding in which the wife was represented by an attorney who had limited skill in drafting premarital agreements and little opportunity to validate the data that was presented to him by the husband.

It should be noted that the fact one spouse chooses not to challenge the premarital agreement during the marriage does not mean that a challenge cannot be brought during the divorce. The Supreme Court has held that a spouse seeking to invalidate a premarital agreement need not bring such an action prior to the divorce as this would encourage needless litigation between spouses.

In sum, a couple should not attempt to draft or negotiate a premarital agreement without seeking the advice of competent lawyer.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com

Work E-Mail

2010-02-18T09:32:00.003-05:00

If you use your employer's computer system for e-mail or other Internet access, do so with the knowledge that your employer may monitor what e-mails were sent and what Internet sites you visited.

Workers should not legally expect privacy in such activities. Yet to remove any expectation of privacy by workers, employers should provide workers with a written policy on electronic communications in the workplace. This policy may be part of an employment manual or otherwise and should clearly notify the workers that the employer may from time to time monitor their electronic communications.

Such monitoring may be for a variety of legitimate business purposes. An employer may want to monitor and obtain specific evidence of misconduct of a worker. For example, if a worker complains to management that a co-worker is sexually harassing him by continually sending lewd and sexually explicit e-mails to the worker, the employer may have a legal obligation to investigate the claim and, if appropriate, take corrective action to relieve the worker from the sexual harassment of the co-worker.

Such an investigation would include a review of the e-mails even if the worker who received the harassing e-mails had deleted them. Likewise, an employer may suspect that a worker is providing confidential or proprietary information to a competitor or competing with the employer. It is not uncommon for such a disloyal worker to actually use the company computer system to further such competitive misconduct.

Employers may also want to have the ability to monitor worker e-mail and Internet access for the purpose of monitoring work performance.The employer may want to know whether a worker is spending company time on the Internet for personal matters rather than work-related matters. Random monitoring of a worker's Internet access may show that some workers are quite adept at using the minimizing Windows feature to look like they are working when someone comes by but are really spending an inordinate amount of time on personal Internet matters rather than actually working the hours they are paid to work.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Buying A House - Use a Lawyer

2010-02-18T09:26:00.004-05:00

The need for an experienced lawyer to represent a buyer or a seller in a real estate transaction has never been more critical than in today’s troubled economic times. There are a number of distressed or foreclosed properties on the market which may present the potential purchaser with an incredible bargain but may very well contain hidden pit falls. Many of the exotic mortgage packages that gave rise to the current economic crisis have hidden clauses that make it extremely difficult to refinance or sell the property. Many adjustable rate mortgages are either resetting now or will reset within the next year and with mortgage rates remaining low, there is a brisk market in refinancing.

Given these realities, the need for an experienced lawyer to advise the purchaser or seller in a real estate transaction is all the more critical. Your attorney can advise you as to the precise terms of the mortgage and whether there are any clauses in the mortgage that could present future problems for the homeowner. Similarly, counsel can review title documents to ensure that a foreclosure was performed correctly so the former owner will not have a claim to the property in the future. Likewise, counsel can advise the purchaser as to the pros and cons of various insurance products that are available, such as title insurance, and what claims the title insurance policy will or will not respond to.

Counsel should even be involved in the initial negotiation process especially in reviewing and editing of the Purchase and Sale Agreement. Many Purchase and Sale Agreements have strict deadlines which must be adhered to and failure to adhere to these deadlines could result in significant financial loss to the parties. It would be sad to take a financial hit because of missing deadlines of which you were not aware. In short, while the urge may be present to save money at closing, the long terms risks associated with such a strategy greatly outweigh the upfront costs.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at apiela@nashualaw.com

How to Prove Adultery in New Hampshire

2010-02-04T09:17:00.002-05:00

Many people are under the misconception that in order to prove adultery there must be either photographic or videotape evidence of the sexual intercourse. This is not so. While proving adultery is complex, and there are many elements which must be proven to the court, video or photographic evidence, while helpful, is not required. Instead, circumstantial evidence of both opportunity and inclination is considered sufficient evidence on the issue of adultery.

Inclination is nothing more than establishing that the cheating spouse had the desire to engage in sexual intercourse with another not his or her spouse. This is often time established by evidence of e-mails and text messages between the parties or through cell phone records establishing contact of long duration or during unusual hours. Evidence of inclination can also be established by eye-witness contact, showing inappropriate comments or contact between the individuals.

Evidence of opportunity is established by the cheating spouse and the significant other either entering or exiting house or hotel or spending time alone in an automobile in a secluded place. This evidence is often derived from an eye witness, friend, neighbor or a private detective. Evidence of opportunity can also be established by e-mails wherein the cheating spouse acknowledges being alone with the significant other even if it does not state that they had sexual intercourse. Courts have found such e-mails sufficient circumstantial evidence in order to grant a divorce on the grounds of adultery.

Even significant evidence of inclination and opportunity is not sufficient, by itself, to obtain a divorce on the grounds of adultery. The next element the innocent spouse will need to establish is that the adultery was the primary cause for the breakup of the marriage. In order to succeed on this, the innocent spouse must prove that but for learning of the adultery, both parties would have stayed in the marriage and not filed for divorce. While most marriages experience difficulties, these difficulties in and of themselves are often not sufficient to defeat a claim of adultery. Sometimes, however, a marriage may have broken down well before the adulterous act. In such cases, the court may not grant a divorce based upon adultery.

Even if a spouse proves both the existence of an adulterous relationship and that the adulterous relationship is the primary reason for the divorce, the innocent spouse must still prove that the adultery caused either substantial emotional harm to him or her, or resulted in a substantial financial loss to the marital estate. If the court finds adultery after reviewing all the evidence, then the court will forward the divorce decree to the county attorney’s office for potential criminal prosecution.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. You can reach Attorney Rauseo at krauseo@nashualaw.com

Five Key Issues For the Success of Closely Held Entities

2010-02-04T09:10:00.003-05:00

When dealing with closely held entities, either corporations or limited liabilities companies, there are a variety of issues that owners and management should consider to help ensure the company's success.

1. Formalities
Limited personal liability and the tax benefits of doing business in the company form are available only when the shareholders/members comply with the numerous requirements of corporate law. The benefits flow from the legal recognition of the entity, separate from its individual shareholders, members, directors and officers. To enjoy these benefits, everyone must operate the entity in accordance with certain formal requirements. It is essential that company and personal affairs be kept separate. Never mix company and personal funds, assets or accounts. Do not use company funds or assets for personal or other non-company purposes. Business should be done in the company name. Avoid any indication that you are dealing in a personal capacity. When signing documents, it should always be evident that you are acting on behalf of the company. The company name should be used on the telephone listing, advertisements, signage, letterhead and other collateral.

2. Buy-Sell Agreements/Operating Agreements
Many companies restrict the transfer of securities held by their shareholders or members through a buy-sell agreement or an operating agreement. Typically, a buy-sell agreement will cover restrictions on transfers, mandatory repurchase (e.g., when the corporation and/or shareholders must repurchase the corporate stock on the death of a shareholder is only one example), optional repurchase (when the corporation and/or shareholders must repurchase the corporate stock, such as on termination of employment of a shareholder with the corporation), and the price and terms of sale (what valuation method will be used to determine the price of the stock and what terms of payment will be required). As part of the review and negotiation of these agreements, each person should carefully review their own estate plan to verify it is current and up to date.
An operating agreement may cover many of the same issues as a buy-sell agreement and can include certain rights the members may have when one member elects to transfer his or her member interest.

3. Securities
The issuance of securities by the corporation is subject to both federal and state securities laws. Although the federal and state definitions of a security are not identical, such definitions are quite broad and include stocks, options, warrants, evidences of indebtedness, investment contracts and interests in a stock or profit sharing plan. Officers and directors may be held personally liable for criminal and civil violations of securities laws. Therefore, whenever a corporation considers offering, issuing or selling securities, it must be aware of applicable federal and state laws. Also, the corporation should consider "private placement" and "limited offering" exemptions from these laws.

4. Trademarks, Trade Names and Trade Secrets
If the entity has developed a name or symbol which has or will become associated with the entity's product(s) or services, and which indicates its unique origin with the company, then the entity may want to register the name or symbol as a trademark or trade name. Registration with the state and, if appropriate, the federal government, will protect the trademark and trade name assets against loss through improper usage and infringement. If a creative process is involved in the production of the entity's product(s), then a patent and suitable contractual arrangements might be appropriate to protect and preserve company ownership. Trade secrets can be protected by requiring employees to sign agreements guaranteeing the safekeeping of trade secrets and confidential information. Intellectual or literary property may qualify for copyright protection. Require all key employees to sign a non-compete agreement before they start working.

5. Exit Strategy
Almost every person involved in the formation of the business should have an exit strategy for his/her departure. The company may be acquired, become a public company or decide to dissolve. The principal shareholders and/or members can accomplish some of this by updating the buy-sell/shareholder agreement on a regular basis. In addition, each person should update his/her estate and make sure to put an adequate succession plan in place. Businesses are started with optimism and the hope that they will be successful. Many people do not want to consider the problems that may arise when operating a business. However if everyone involved keeps these five basic issues in mind, the chances of success are greatly enhanced.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com

Job Protection For Returning Soldiers

2010-02-04T09:01:00.003-05:00

American soldiers who temporarily leave their current employment to serve our country in Iraq, Afghanistan, or otherwise are afforded protections under the employment laws upon their return. A recent Massachusetts jury verdict and thereafter decision by the trial judge upholding the verdict provides a clear message that both judges and juries will enforce these laws.
On January 25, 2010, a Magistrate Judge for the United States District Court of Massachusetts refused to set aside a $505,748.00 verdict in favor of Stephen F. Fryer against his former employer, A.S.A.P. Fire and Safety Corporation, Inc. (hereinafter “ASAP”). Fryer began work with ASAP in January 2006 servicing and installing sprinkler systems. In 2007, his hourly rate increased, he received sales commissions, a company gas card, and company vehicle. He loved his job and proved very successful in the sales aspects of the job.

In January 2007, Fryer accepted an offer to re-enlist in the Massachusetts National Guard. While he did not expect to be deployed to Iraq shortly after re-enlisting, he was, in fact, deployed. His immediate boss at ASAP and the owners were not happy that he was leaving. Fryer returned home from Iraq in May 2008 and he was very positive, upbeat, and excited to be back. Thereafter ASAP informed him that there were no positions available for him. During Fryer’s deployment ASAP had hired another individual to work in Fryer’s stead. Fryer was eventually given the job of sprinkler helper a position that involved helping another sprinkler fitter. It was not a comparative job to his previous job nor was it the type of job he would have escalated to had he not been deployed. In October 2008, ASAP fired Fryer. The result was that Fryer lost wages and became depressed. His relationship with his wife and children deteriorated.

Fryer proceeded to trial with claims that ASAP and its owner violated the Uniform Services Employment and Re-employment Rights Act when they failed to re-employ him in his pre-service position and discriminated and retaliated against him because of his military service. The jury found in favor of Fryer and awarded him $505,748 in damages.

The Judge noted that under federal law ASAP did not have a defense to putting Fryer back in his previous position because they had already hired a permanent replacement. ASAP could not refuse to re-employ Fryer on the basis that another employee was hired to fill the position, even if the employment of Fryer required the firing of his replacement. Furthermore, the Judge found that a sprinkler helper position neither put Fryer in his previous position or in a position that he would have escalated to had it not been for his deployment; again in violation of federal law. The Judge found that the jury’s award, while generous, withstood scrutiny.

Employers should take this as a clear message that if one of these cases goes to a jury, the risk for the employer can be great. A soldier returning home after providing military service to our country creates a very sympathetic plaintiff to which most jurors will want to protect. Employers should seek legal counsel as to deployed employees to comply with the law upon their return.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Choice of Entity

2010-01-28T11:48:00.004-05:00

When an individual or group of individuals decides to form a business there are many options from which to choose. The types of entities include proprietorships, partnerships, corporations and limited liability companies. Within each of these there are choices to be made as well.

The first and most important step in the process is to think about the business goals of the company. What type of business are you planning? Do you want to and plan to grow? How many people are involved? Will you seek third party financing? Will you have employees? Will you seek outside investment? And finally, what is your exit strategy?

Sole Proprietorships

The primary advantages of Sole Proprietorships are that there is one point of taxation – all income is recognized as regular W-2 income- and the low cost or organization.

The primary disadvantages are there is unlimited liability (although you may be able to acquire insurance to protect against some losses) and it is not a separate entity.

Every sole proprietorship doing business in New Hampshire under a name other than their own must register that name as a d/b/a (NH RSA 349:1 et seq). The cost of filing is $50.00. The name chosen shall remain valid for a period of five (5) years.

Partnerships

A partnership is an association of two or more natural or artificial persons carrying on a business together with the intent to share its profits.

Because of the emergence of limited liability companies there is almost no reason to form a partnership. For this reason we will spend little time discussing them.

Corporations

Business corporations and their formation are governed by New Hampshire RSA 293-A.

Regardless of whether you choose a Subchapter “C” corporation or a Subchapter “S” corporation, the primary reason or advantage sought by those choosing to incorporate is the limitation of liability.

As part of the formation or incorporation process, the people forming the entity must choose a name and reserve it with the Secretary of State’s office. The name must include the word corporation, incorporated, limited or any abbreviation thereof.

S corporations are more common than C. As companies evolve and grow they may elect to terminate their S status and be treated as a C corporation by the IRS.

The primary advantages of an S corporation are, (i) the entity provides limitation of liability while allowing for pass-through tax benefit, (ii) there is a continuity of existence and (iii) the shares are easily transferable.

The primary disadvantages are, (i) non-resident aliens, corporations and most trusts cannot be shareholders, (ii) there is only one class of shares; no capital structuring flexibility, may limit investment options and limit access to capital, (iii) there can not be more than 75 shareholders and (iv) it must have calendar year for the fiscal year.

Limited Liability Companies

Limited Liability Companies are governed by New Hampshire RSA 304-C.

A primary advantage of forming an LLC is that an LLC allows for a flexible treatment of losses, gains, voting rights and percentage of ownership that corporations do not.

However with the uncertainty of the recent changes in the tax laws in New Hampshire and the possibility of a “double tax “ in distributions, there may be some reasons to consider not forming an LLC without some careful consideration and consultation with an accountant and a lawyer.

Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at pcreme@nashualaw.com

Tips on Negotiation

2010-01-28T11:33:00.004-05:00

Many workers find that their jobs involve some level of negotiating agreements with vendors, customers or others. Prior to entering into such negotiations, it is important for the worker to analyze the parameters of this negotiation.

The worker must first understand his level of authority in negotiating on behalf of his employer. If the transaction is for a product or service with which the employer has little or no experience, the worker's input after researching the topic (including information, for example, on what industry competitors are negotiating as terms for similar products or services) will be appreciated by the employer.

Once the worker understands the parameters of his authority, he should consider the alternatives to a negotiated agreement with the other party and analyze or anticipate the possible alternatives available to the other party if it does not negotiate an agreement. Thinking this through helps identify the respective leverage of each party in the negotiation. This also helps determine whether walking away from a potential deal is an acceptable alternative. It is important to remember that all negotiations need not result in an agreement and sometimes the best decision management can make is to forego a potential deal.

Another important factor to decide on is negotiation style. One of the biggest mistakes made in negotiating is beginning with an unreasonable position in the hopes of ultimately settling on a less unreasonable deal. Such tactics often result in the souring of a potential business relationship. It is a good idea to always leave some room in an initial proposal for movement, but not so much as to risk tainting the relationship before it even begins.

Finally, it is extremely important to remember that a judge enforces the written agreement based on its express terms. It would be a mistake to commit to a written provision that is unacceptable to you in reliance on the other party's statement that it is their form provision and that is never enforced. You should be aware if the other party is unwilling to remove a provision from its agreement, they plan to enforce it. It is important that any agreement, however basic, has clear provisions in plain English so that if a problem arises, a judge can read the written provisions and understand what both sides' respective rights and obligations are without having to rely on testimony from either party.

Such clarity in the agreement will not only help your company's position should a dispute arise, but it also decreases the chance of a dispute since both parties can look at a written agreement (after their respective memories of the specifics of the deal fail) and review the provisions to which they actually agreed.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

What Constitutes Adultery in New Hampshire

2010-01-28T11:29:00.000-05:00

Learning that your spouse has been unfaithful can be one of the most painful experiences a person endures. The discovery of your spouse’s infidelity results in significant grief, anger, and feelings of betrayal. These emotions can arise in situations where there has been sexual contact between a spouse and a third party, but can raise equally painful feelings when there has been “an emotional affair” where the spouse develops a significant, inappropriate emotional even if not sexual connection with a third party. While many people consider such a situation an affair, New Hampshire law is much more limited in its definition of adultery.

In New Hampshire, adultery is limited to circumstances where the spouse has sexual intercourse with a person of the opposite gender. The New Hampshire Supreme Court has ruled that sexual intercourse does not include all types of sexual contact. The Court states that sexual intercourse is limited to sexual acts that could lead the conception of a baby. Accordingly, a homosexual affair does not rise to the level of adultery under New Hampshire law. Equally, an emotional affair does not constitute adultery for purposes of obtaining an divorce. However, an emotional affair which causes significant emotional distress to the innocent spouse may result in a separate fault ground known as “conduct to injure health and reason”.

Please contact one of the attorneys at Hamblett & Kerrigan, PA if you have any questions regarding what conduct constitutes adultery under New Hampshire law or for any questions regarding the divorce process.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. You can reach Attorney Rauseo at krauseo@nashualaw.com

2010-01-21T09:05:00.001-05:00

Hamblett & Kerrigan

takes pleasure in announcing

Andrew J. Piela
has been named a
Director

of the firm.

Applications Should Use Liability Statements

2010-01-21T08:51:00.004-05:00

One of the most important decisions a company makes is who its employees will be. Given that fact, simply relying upon a resume without follow-up reference checks of the candidates is a mistake. An employment application gives the employer the opportunity to make appropriate inquiries regarding the information on the application in order to evaluate the candidate rather than simply relying on information the candidate chooses to provide in a resume. Employment application inquiries must be fair, objective, and nondiscriminatory. For example, in their application employers should not seek information that would reveal a candidate's protected class such as race, color, religion, gender, age, disability, or sexual orientation.

The application also provides the company with the opportunity to have the candidate acknowledge that, if hired, he would be deemed an employee at will and may resign or be terminated at any time with or without notice and with or without cause.

Further, it can include a clear statement that the candidate acknowledges that neither the application nor any employment handbook or personnel policies will constitute a contract between the employee and the employer.

Applications should also have statements signed by the candidate that can assist the company in its reference process by having the applicant certify that (a) all the information provided by him in the application and any attached resume is true and correct, (b) if it is discovered at any time that there is any misrepresentation or omission in that application and/or attached resume, it is grounds for discharge and (c) the applicant authorizes the company to check and verify all information on the application.

This signed statement in the application should also fully release the company from any liability resulting from the verification process. It should also authorize and request all the applicant’s present and former employers and personal references furnish information about the candidate's employment record, including a statement of the reasons for termination of his prior employment, work performance, abilities, and other qualities pertinent to his qualification for employment. It should also include a release of those present and former employers and personal references from any and all liability arising from furnishing the requested information.

Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com

Massachusetts’ Prevailing Wage Statute Impact on New Hampshire Employees

2010-01-21T08:47:00.002-05:00

Many New Hampshire employers send their employees into Massachusetts, our friendly neighbor to the south, in the course of their employment. When this occurs New Hampshire employees may come under the protection of Massachusetts’ statutes. In particular, New Hampshire employees may be entitled to the benefits of the Massachusetts Prevailing Wage Statutes when working on state -construction projects.

The Massachusetts Prevailing Wage Statute establishes a minimum wage to be paid by all contractors to their employees on state and local public works projects. The minimum wages to be paid for each trade working on the project is set by the Commissioner for the Department of Labor and Work Force before the beginning of the project. The statute specifies that the wages established by the Commissioner shall be not less than those rates that have been established in certain trades and occupations by collective agreements or understanding in private construction industry between organized labor and employers. In other words, if an employee in a New Hampshire plumbing company is earning $10.00 per hour but is sent to work on a public works project in Massachusetts, the employee will be entitled to the trade rate established for plumbers on the particular project, which could be 3 to 4 times greater than his or her ordinary hourly wage.

The only exception applied under the statute is apprentices registered with the Division of Apprentice and Training. The Commissioner for the Department of Labor and Work Force will assign a separate rate for an employee is in a registered apprentice program,. However the employer is not entitled to pay all employees holding an apprentice license the lower rate. Massachusetts law is clear that a person holding an apprentice’s license must be paid the full journeyman rate established by the Commissioner for the Department of Labor and Work Force unless the employee is part of a formal apprentice program. In order to pay a registered apprentice less than the minimum wage established for the project, the employer must comply with the following criteria: (1) enter into a written agreement with the employee; (2) the employer must agree, among other things, to provide the employee at least 150 hours per year of related classroom instruction and 4,000 hours of continuous work, of which 2,000 hours must be as an apprentice; and (3) the agreement must be registered with and approved by the Director for the Division of Apprentice Training. If the employer fails to comply with any of these statutory requirements, the employer must pay the employee, regardless of his or her experience or skill level, the full rate for the particular job classification with no exceptions.

While New Hampshire does not have a Prevailing Rate Statute for state and local public works projects, there is a Prevailing Wage Statute for all public work projects which received funding from the federal government. Under the Davis-Bacon Act, there is also a minimum wage established for all contractors on federally funded projects under a very similar outline as the Massachusetts Prevailing Wage Statute. If you have any questions or are unsure if you have been paid the full wage you deserve, please contact one of the attorneys of Hamblett & Kerrigan, PA for a consultation.

Kevin P. Rauseo is a director at Hamblett & Kerrigan P.A. He concentrates his practice in the areas of civil litigation, medical malpractice, personal injury, insurance defense and family law. You can reach Attorney Rauseo at krauseo@nashualaw.com

2010-01-14T12:38:00.002-05:00

Hamblett & Kerrigan
takes pleasure in announcing
Paul D. Creme
has joined the firm.

Attorney Creme joined the Business Department of Hamblett & Kerrigan, PA, in January, 2010. He is licensed in New Hampshire and Massachusetts and will concentrate his practice in Business and Corporate Law.

The Importance of a Signed Release

2010-01-14T09:12:00.004-05:00

Employers should not disclose information contained in a personnel file without being presented with either a release signed by the worker granting permission for the employer to disclose that information or a legally valid subpoena. Where there is a release or a legally valid subpoena, the employer should disclose only information specifically authorized through the release or subpoena. If the release or subpoena only pertains to documents, there should be no discussion or disclosure of other information about the worker.

Even if an employer is informed of a legal proceeding involving a worker such as a divorce or automobile personal injury case, that does not provide the other party to the litigation a legal right to access to the personnel file without a release signed by the worker or a legally valid subpoena.

New Hampshire employers generally should not comply with a Massachusetts state court subpoena requesting personnel file documents since, absent a specific procedure being followed, the mere subpoena from that Massachusetts state court case is not valid in New Hampshire. Likewise, a Massachusetts employer served with a New Hampshire state court subpoena, without anything more, is generally not obligated to comply with it unless a specific procedure, as set forth under Massachusetts law, is followed.

When in doubt, an employer should speak with legal counsel to determine the validity of any such subpoena. It is not uncommon for some lawyers to serve a subpoena out of state hoping they will get documents even though the subpoena is in reality not legally sufficient once it crosses state borders. Therefore, it is important for employers to be circumspect in dealing with subpoenas received relative to personnel files.

It is also a prudent policy to contact the worker or, if known, the worker's legal counsel upon receipt of a subpoena to let her know you have received a subpoena. This ensures that the worker has notice of the subpoena and has had an opportunity to challenge it in court, if appropriate. Former workers have the same privacy rights in their personnel files and such information should be similarly protected.

In summary, workers have personal and private information contained within their personnel file and employers need to take steps to ensure that it is not disclosed absent either a worker's consent through a written release or by subpoena or other legally compelled process.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com