Mandatory Arbitration Agreements: Avoiding "Unconscionable" Finding

February 27, 2014

New York arbitration agreements have become one of the best ways that companies can insulate themselves from costly litigation that may stem from employment disputes or allegations of liability from consumers. handwriting.jpg

However, they will do little good if challenged and found to be "unconscionable," and therefore unenforceable, by a judge. In fact, this may only serve to prolong the proceedings and increase costs.

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New York Start-Up Ventures Face Many Legal Hurdles

February 25, 2014

Some of the most impressive technology start-ups have some sort of dubious story of origin. It now appears that Square, a credit card processing firm, may be no different.
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The company has been hit with a business lawsuit alleging breach of fiduciary duty and patent infringement by a professor who had worked with the co-founders prior to the establishment of the firm.

In Robert E. Morely, Jr. v. Square Inc., the professor claims in the federal court filing that he was wrongly cut out of the business that developed into Square, despite having invented the technology that became the company's bread-and-butter.

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New York Commercial Lease Agreements Require Careful Review

February 22, 2014

In a recent commercial landlord-tenant dispute in New York City, the owner of a new business slated to open where a Chinese restaurant once operated is seeking $22 million from the landlord due to a termite infestation, as well as other structure problems that have so far required extensive repairs.
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The BBQ restaurant plaintiff alleges in the New York State Supreme Court filing that the landlord first lied about the condition of the First Avenue structure, and then attempted to initiate an eviction of the tenant when repairs were demanded.

The series of structural issues with the building has delayed the opening of the business for several months, leading to hundreds of thousands of dollars in lost revenue. That's in addition to the $600,000 monthly rent it pays, as well as the $3.1 million it has so far invested in repairs on structural deficiencies that were "almost too many to count," the plaintiff said.

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Regulator Probes Into For-Profit College Loans, Practices, Expands

February 20, 2014

Officials with the Consumer Financial Protection Bureau, along with 32 state attorneys general, are working to expand investigation into the promises and practices of for-profit colleges, with special attention being paid to student loans.
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There is ample indication, the watchdogs say, that there are unfair and deceptive lending practices at these institutions. Inquiries have also led authorities to believe that schools have been overstating the results of their offerings, fudging the facts on post-graduate job placement and more. These kinds of actions are likely to spur New York education lawsuits.

Among those that are being more closely scrutinized:


  • Education Management Co. (a chain partially-owned by Goldman Sachs Group Inc.);

  • ITT Educational Services Inc.;

  • Corinthian Colleges Inc.;

  • Career Education Corp.

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New York City Prevailing Wage Lawsuits & Third-Party Breach of Contract

February 18, 2014

Recently, the Second Circuit Court of Appeals sought guidance from New York's highest court on whether to defer to state labor officials on interpretation that the prevailing wage requirement for certain government contracts be paid only prospectively. sprinkler.jpg

The request for certification from the New York Court of Appeals in the case of Ramos v. SimplexGrinnell LP is rooted in a 2011 decision in federal court that granted SimplexGrinnell a summary judgment on a third-party breach of contract claim. Workers who had installed fire and sprinkler systems in government buildings while working for the firm alleged that the company had not paid them prevailing wages since at least as far back as 2001. As this was a "public works" project, the workers indicated, it was in clear violation of New York Labor Law, Article 8, Section 220.

New York City prevailing wage lawyers know that the law is quite clear: Every public works contract must have provisions to pay workers the prevailing wage. The Court of Appeals has previously indicated that employees, as intended third-party beneficiaries of those contracts, can bring breach of contract claims if they are not fairly compensated.

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Court Sets Strict Liability Precedence for Prevailing Wage Compliance

February 10, 2014

Under New York State's Labor Law, government contractors and subcontractors have to pay the set prevailing wage and fringe benefits to workers. The exact rate, which is pre-determined, depends on the type of work and where it's performed.
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Willful violations of New York's prevailing wage law by contractors can be met with severe penalties, including interest of 16 percent from the date of underpayments to the date of restitution and a penalty of up to 25 percent of the wages, supplements and interest.

Prime contractors can be held responsible for the non-compliance of subcontractors, so it's important that companies be diligent in ensuring their pay structure is properly designed.

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Report: 2014 Ripe for New York Wage-and-Hour Lawsuits

In the last several years, the U.S. Supreme Court made it tougher for individuals to bring forth successful discrimination lawsuits - particularly class action cases. One of the most recent examples is that of Wal-Mart Stores v. Dukes, decided in 2011. coins52jpg.jpg

However, workers haven't stopped filing employment lawsuits in New York. What it appears they are doing is shifting gears. Rather than focusing on things like racial discrimination, workers have been filing a larger number of wage-and-hour lawsuits. Most commonly, they allege employers misclassify workers, allowing them to skirt overtime pay and other benefits.

According to the annual Workplace Class Action Litigation Report, there were approximately 10 percent more wage-and-hour lawsuits filed last years as compared to what was filed in 2012. This year, it appears we might be on track to see even more wage-and-hour claims.

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Small Business Contracts With Feds Should Receive Legal Review

A recent New York Times report indicated that small business contracts with federal agencies dipped 11 percent over the last fiscal year.
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Still, the federal government continues to award hundreds of billions of dollars in private business contracts - some $460 billion by the end of last fiscal year. Plus, Congress just approved a $1.1 trillion spending bill for this fiscal year, and that's going to include a large number small business contracts.

These jobs can be the critical lifeblood of a small operation. Small businesses received about 18 percent of all federal contracts.The downward trend means not only is the process for securing the contract growing more competitive, but maintaining this work requires companies to be thorough in all aspects of their operation.

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New York Landlord-Tenant Dispute: No Heat Leaves Residents Heated

Tenants in Battery Park City's Gateway Plaza are in a heated dispute with their landlord over reportedly freezing conditions inside their units.
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News reports indicate the owner of the property has made numerous promises to repair faulty windows and heating units. However, those promises, tenants say, have gone largely unfulfilled while they have suffered through bouts of extreme cold, with snow and ice piling up inside unsealed windows.

There was talk at a recent Community Board 1 meeting of initiating a rent strike after a year of empty pledges to conduct the various repairs. Of approximately 3,500 units, only about 300 have received the repairs that were vowed. Now, the tenant association is discussing the possibility of filing a landlord-tenant lawsuit on the grounds that the landlord has violated the New York City warranty of habitability guidelines guaranteed to renters under the Rent Guidelines Board.

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Establishing Liability in New York City School Injury Cases

Two high school students reportedly suffered severe burns in New York City while conducting a routine lab experiment in class.
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According to news reports, the chemistry instructor had hoped to offer students a unique display of rainbow flames resulting from burning different kinds of nitrates. However, the buildup of volatile fumes instead ignited into a fireball that shot across the room, severely injuring two students. None who were present were wearing the appropriate safety goggles, witnesses say, and its alleged that a full minute passed before a fire extinguisher was located and used to put out the flames.

As the students continue to recover, the case remains under investigation. However, it seems clear there was at least some degree of negligence. The teacher and the school had a duty to ensure the safety of those children, and it seems that duty may have been breached.

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New York Patent Troll Litigation Ensnares Start-Up Founders

Many had hoped that by now, we'd be seeing more results from legislative efforts to help control the patent trolls.
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These are the opportunistic shell firms that exist solely for the purpose of snapping up obscure patents and then targeting any and all potential violators with the prospect of costly litigation.

As we reported in a recent New York business litigation blog post, President Barack Obama signed off on the Leahy-Smith America Invents Act two years ago. In part, this law made it unlawful for businesses to file a single patent lawsuit against numerous defendants. Now, patent holders have to file individual lawsuits for each company or entity that has allegedly infringed.

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New York Wage and Hour, Employment Issues, to Receive SCOTUS Review

During their last session, U.S. Supreme Court justices delivered several blows to those who sought to file employment and wage and hour lawsuits in New York and throughout the country.
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In effect, there were six major decisions that could be categorized as a "loss" for workers' rights, ultimately cooling class action filings, clearing the way for more business-friendly arbitration action and heightening the hurdles necessary to file such action in the first place.

In the newest 2013-2014 session, which began this month, the high court is slated to hear at least seven cases that could have some impact on wage and employment law. Some of that impact could be significant.

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New York Civil Appeal Centers on State's Strict Gun Control Laws

Alfred Osterweil, a retired attorney and former U.S. Army serviceman, wanted a permit to carry a pistol in New York.
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He applied for one back in 2008 in Albany, but was denied on the grounds that his residency here was only part-time, and state law did not allow issuance of permits to those who are not full-time residents. Osterweil filed a civil lawsuit the following year.

The case has been winding its way through the New York civil appeals process, and now it is set to be heard by the state's highest court.

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New York Bullying Lawsuit Aims to Effect Change in Education System

September 25, 2013

The boy was just 12. His mother recalls him smiling a lot. He was small and he sometimes stuttered. But his sweet nature had a way of winning over almost everyone he met.

Almost everyone.
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The East Harlem boy hanged himself in the shower after two years of unrelenting bullying by a handful of his school peers. He would be tripped. Pushed. Chased. Taunted. Struck with objects. When his mother complained to administrators and the parents of the alleged bullies, it got worse.

Now, the deceased boy's mother has filed a lawsuit against the New York City Education Department, naming also the parents of those boys who tormented her son. The lawsuit claims that not only do the parents have culpability in her son's death, but also the city, the school administrators and the teachers. All share responsibility, she says, because they did nothing to stop the mistreatment of her son.

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Branching Out: Decision to Franchise a Complex One

September 19, 2013

The New York Times recently profiled the owner of a tree-trimming business who was mulling the best way to expand: Either by opening up a second office in a nearby town or by establishing and selling franchises.
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When it comes to the question of how to grow a business, you must of course consider the best strategic approach in terms of market, opportunity and finances. However, it's also critically important to weigh all potential legal implications as well. An experienced small business attorney can help.

Franchise law in New York can be especially complex, overseen and enforced by the State Attorney General's Office. This is not an agency with which you want to go toe-to-toe in a legal battle. Thankfully, most issues that arise can be identified and addressed prior to making the deal, assuming you've had an attorney conduct a thorough review.

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