New York Business Litigation Attorney Blog

The money your company invests now in its New York City employment contracts can ultimately save you literally millions of dollars in the long run.

Manhattan employment law attorneys understand that these documents can be worth more than their weight in gold when disputes arise - as they inevitably do in business.

That has been the case with Tyco International and its former CFO, Mark Swartz, who has been imprisoned in connection with looting the firm. He's now suing the company for $60 million he says he's owed in retirement money.

Here's what we know of the case thusfar, as reported by Reuters:

The case is Mark H. Swartz v. Tyco International Ltd, and alleges the company is guilty of breach of contract for failing to pay Swartz his retirement money.

Tyco is a company based out of Switzerland and holds service and manufacturing units and makes security systems.

Swartz headed the industrial company from 1995 to 2002. Then in late 2002, he was indicted for securities fraud and grand larceny for stealing millions from the company.

In 2005, he was convicted, as was Tyco's former chief executive, Dennis Kozlowski (whom you may remember purchased a $6,000 shower curtain, marking him a tangible symbol of corporate greed). Both were sentenced to between 8 and 25 years in prison. Both are currently being housed at the minimum security Lincoln Correctional Facility. Swartz is given furloughs, where he is released Wednesdays and returns on Mondays.

Kozlowski also filed a lawsuit against the company, saying that he deserved millions in benefits from Tyco. Two years ago, however, a federal judge denied that claim.

Swartz's claim, though, is a little different.

He is saying that the company, to which he has paid more than $70 million in restitution, is in breach of contract for $48 million worth of retirement funds, as well as $9 million in taxes and other monies.

But his lawsuit, which was filed in the New York state Supreme Court, says that the company was aware that the local district attorney was planning to file criminal charges against him at the time that it rubber stamped his contract, which is the one at issue in his lawsuit. He claims that both the management and directors approved the agreement knowing that Swartz was going to soon be indicted. That, he says, means that they had no intention of actually honoring it.

Whether or not he is successful, the greater point for both sides is that employment contracts in New York City have to be thoroughly vetted by an experienced attorney - whether you are the employee or the employer. You should weigh all potential factors that could impact the strength and legality of the contract - and protect your rights and financial interests.

Continue reading "Invest Now In Employment Contracts To Save You From Later Headaches" »

A New York City employment litigation case centers on the issue of whether employers have to give notice to their employees of a layoff.

Our Manhattan employment litigation attorneys know that the answer is: It depends.

We'll explain farther down, but here's what we know so far of this case:

According to Reuters, a once-prominent law firm (the 11th largest in the country) recently laid off 450 employees, following a mass exodus of 120 partners and three out of four co-chairmen.

At its peak, the firm was the employer of some 1,300 lawyers. That was back in 2007. Now, federal regulators are trying to sort through what could be a huge headache: the fact that the firm's pension plan is underfunded by about $80 million for some 1,800 people.

The firm has been mired in debt for several years, and when it asked once-highly paid partners to take a salary cut, a large number of them left.

The problems have only continued from there, including a number of lawsuits.

In one case, a janitorial service is suing for about $300,000, claiming the firm, with offices in Manhattan, has failed to pay its cleaning bill up through the end of April.

And now, it's being sued by a former employer who has filed a class action claim, saying the firm did not give her and other employees the required 60 days notice prior to the lay-off.

Employees were warned on May 4 that the firm may shutter its doors. However, it didn't actually give employees affirmative word that their employment would be terminated, effective May 11.

So does this woman, and those in the class, have a case?

Possibly.

The federal government has what is known as the Worker Adjustment and Retraining Notification (WARN) Act. This was passed in the summer of 1988 and became effective early the following year.

What WARN does is give workers protection by mandating that employers provide at least 60 days advance notice anytime there is an anticipated mass layoff or plant closing. It must be given either directly to those workers who may be affected or to their union representatives.

Employers who would fall under WARN's purview would be those that within the last year, have had more than 100 full-time employees who have worked there for longer than six months. Government agencies are exempt. The employees that would be covered would include both salaried and hourly workers and managerial staff and supervisors. The only ones not entitled to such notice would be business partners.

However, there are exceptions to WARN, and this situation may fall into that. For example, for plant closings, business partners can avoid the notice if there is any situation in which there is an opportunity to seek new capital or business and providing notice would destroy any chances for tha.

There's also an exception for "unforeseeable business circumstances." This would be closings and layoffs caused by some business circumstance that was not foreseeable at the time of notice. This is probably the defense that the law firm in this case will fall back on.

And finally, there is an exception for a natural disaster. This is example is pretty self-explanatory.

If an employer is going to use any of the above-mentioned reasons for giving less than 60 days notice, the burden of proof lies with the company.

Continue reading "New York Employment Litigation: Lay-Off Legalities" »

An appeals court has ruled that the New York Metropolitan Transportation Authority didn't have to hold public hearings before it laid off more than 200 subway booth clerks last year, a reversal of a Supreme Court decision, Thomson Reuters reports.

Issues of labor law in New York have always been important, but with the economy sagging, they take on extreme importance these days.

Issues of discrimination in the workplace have no place in this country. Yet, it happens. As we reported in August, unemployment discrimination in New York is prevalent, despite efforts to stop this unfair practice.

The New York Times found in August that many job advertisements were targeting only those people who were already employed. If a person was unemployed, he or she was not welcome to apply. Can you imagine that actually happens? Fortunately, a law is now in effect that bans unemployment discrimination. And both state and federal laws prohibit hiring and firing practices based on age, gender, sexual orientation, race, national origin, disability and other unlawful factors.

The subway clerk issue was based on a rule issue, not a discrimination issue. According to the Transit Workers Union, which represents MTA workers, the staff reductions couldn't go through without an opportunity for public comment since the agency decided to offer mass layoffs rather than cut down staff through attrition.

But an appeals court recently ruled that because public hearings were held on closing customer service kiosks, the different method of downsizing wasn't a big enough issue to require a new hearing.

Some of the laid-off workers were re-hired for other positions, though the overall number of workers is still down. The ruling may be appealed to the state Court of Appeals, a lawyer for the union told Thomson Reuters.

MTA has eliminated clerks in subway stations starting in 2008, instead relying on electronic vending machines. Overnight service, bus and subway lines have been slashed and administrative staff has been laid off as well.

Given the long history of unions in New York and the reliance on laws and rules put in place to protect employees, many of these labor law issues can be complex. This situation wasn't simply a matter of employees being laid off, but whether the layoffs worked within the rules and laws in place.

These complex legal matters dealing with employment must be addressed. Without legal representation, problems can linger on for generations without resolution. There always must be a person who is willing to step up and take action. If rules are broken or laws violated in a workplace setting, a watchdog or whistle-blower cannot sit back and watch the injustices happen without consequence.

In New York employment law issues, this is critical. A person's job is important not only for income, but for his or her well-being. People are typically at work more than at home, so working in a bad environment can be devastating. These issues must be addressed.

Continue reading "NY Subway Clerk Layoffs Were Legitimate, Appeals Court Says" »

Many people were shocked in the spring, when Mattel was ordered to pay an $89 million jury verdict to rival MGA Entertainment over a dispute involving the popular Bratz dolls. New York Business Litigation Attorney Blog reported on the verdict in May.

Imagine their shock now, after a judge ordered Mattel to cough up an addition $220 million, bringing the total to a whopping $309 million for violations of copyright and trade secret laws in New York. The judge reduced the initial verdict to $85 million, but then added $85 million in punitive damages and $137 million in legal fees, which have piled up since 2004.

The case highlights the high stakes that businesses are in when they go head-to-head in court over a business law matter. This case also highlights the importance of strongly and clearly worded employee contracts.

The Bratz dolls, introduced in 2001 as a hipper version of other dolls on the market for girls ages 9 to 11 had pouty lips and hip-hop clothing. They were popular when introduced nearly 11 years ago.

The central issue of the lawsuit was that a Bratz designer created the dolls while he was employed at Mattel. The case also dealt with allegations that Mattel tried to crush the doll line because it was giving the long-standing Barbie doll a tough time in the market for girls' dolls. The company alleged Mattel hired spies to find out information about its designs.

Mattel, however, accused MGA of stealing the idea for Bratz and then covering up any evidence the concept wasn't created by them. During the initial trial, a jury sided with Mattel and awarded $100 million, but an appeals court overturned the verdict and sent it back for retrial.

At the second trial, a jury rejected Mattel's claims of copyright infringement and found the company had stolen 26 trade secrets worth an $88 million verdict. Legal fees have reached nearly $600 million, the report states.

As you can see, business law matters can be contentious and expensive. But it is necessary for a company to protect its intellectual property -- that is copyrighted material, ideas, secrets and other creations. Without protecting those things that have made a company unique and profitable, they will often lose out to a competitor. Trade secrets and other ideas pertinent to the future success of a company must be held tightly and if they are stolen, competitors must be held accountable.

And, as this case shows, a well laid out employment contract is critical. Allowing employees who know the secrets, the ideas and the battle plans to go to rival companies without consequence can be the death of a company. It is important to make sure contracts with prospective employees are worded to protect the business. These documents must be legally sufficient and include contingencies.

Continue reading "Mattel Forced to Pay $309 Million in Bratz New York Commercial Litigation Case" »

Retail giant Target is beginning to face the same union pressures that Wal-Mart has dealt with for a decade, with employees seeking to join together to increase their pay and benefits, The Associated Press recently reported.

There are some 7.6 million public employees who belong to unions and another 7.1 million private sector workers who are unionized. New York leads all states in union memberships, where more than 24 percent of wage and salary workers are union members. Union disputes are common and for that reason, New York union labor laws have been established to help when there are issues between employers and employees.

According to the wire service, Target had its first union election in two decades in June after workers in Valley Stream, on Long Island, complained of skimpy wages and reduced hours. But the measure failed after Target told workers the store may close if they voted to unionize.

Wal-Mart is the country's biggest target for labor groups as the largest U.S. private employer, but unions have increasingly targeted, well, Target, the nation's No. 3 retailer as it expands into the heavily unionized grocery business.

Along with New York, labor disputes are expected in large cities like San Francisco and Minneapolis. Already, the United Food and Commercial Workers International Union's Local 1500 New York chapter, which organized the election the Valley Stream store, wants to contest the election results and ask the government to order a new one, alleging Target intimidated workers. It hopes to get all 26 stores in the New York area unionized.

A Target spokeswoman didn't comment on its strategies to counter an escalating labor fight.

"Our emphasis is on creating a workplace environment where our team members don't want or need union representation," spokeswoman Molly Snyder said. "Target works to create an environment of mutual trust between Target and our team members -- an environment that promotes listening, responding to concerns of team members and always giving honest feedback."

The article lays out the different treatment Wal-Mart and Target have received. Both stores pay employees between $9 and $11 per hour, but Wal-Mart has battled labor unions and politicians seeking to ban it from opening stores amid allegations of poor treatment of workers, while Target has 10 stores in the five New York boroughs.

Target employes 355,000 workers and operates 1,700 stores compared to Wal-Mart, which has more than 4,000 stores and 1.4 million workers. But the increased scrutiny of Target may be coming because of its plan to expand its grocery business, which can shrink the business of unionized supermarket chains.

Labor issues can be highly emotional, whether on the workers' side or the corporation's side. These disputes can become ugly and require experienced New York labor lawyers to sort out the problems. Whether a company that feels a union would pull it apart or a group of employees who demand respect and better pay, our law firm can help.

Continue reading "Retail Giant Target Facing Union Pressure in New York, Throughout the Nation" »

A network of Long Island doctors recently signed a deal with the state's largest insurer, Long Island Business News reports.

Such a deal highlights the need for a firm of lawyers who have knowledge of New York contract law. Such insurance deals are complex and usually have many terms, including rates, conditions and other factors that require a contract is properly handled.

The Beacon Independent Physician Association, founded last year and has nearly 250 members, reached a three-year agreement with Empire Blue Cross Blue Shield. IPAs have been cropping up around Long Island and nationwide, allowing doctors to remain independent but give them big bargaining power in deals with insurers.

The IPA can lead to compensation based on efforts to improve care through electronic medical records, follow up and eliminating unnecessary testing, such as exams that are duplicated. The doctors share information with each other.

Contractual agreements require precision and extensive research and dedication to detail. Contracts are an essential element to doing business in New York. Without proper contracts, those written with a strict attention to detail, a business can fail.

In business, disputes often arise when one party doesn't honor the terms of the agreement, which can bring up breach of contract actions. That's when aggressive representation is necessary to protect your company's rights. Many breach of contract allegations can be settled through negotiation, arbitration or mediation and our firm is dedicated to finding the best solution, which sometimes means avoiding an expensive lawsuit.

Contract disputes can often lead to financial ruin for the company if the issues aren't properly handled. Competition is fierce and therefore resolving these problems as quickly, quietly and least expensive as possible is in the best interests of a company. And our firm is dedicated to doing what can most benefit our clients.

New York business litigation can be extensive and focus on many matters that affect the well-being of a company. Founders, executives and employees work hard to make sure the business grows and prospers and it can take only one lawsuit to ruin years of hard work. Our firm works to serve businesses that need legal help protecting them and those they serve.

Continue reading "Long Island Health Care Network Signs Deal With Empire Blue Cross/Blue Shield" »

Three current and former waiters who served fans in premium seats at Yankee Stadium allege their tips were withheld, according to a lawsuit, reports Reuters.

A wage law attorney may be your best bet when trying to deal with a company you feel isn't treating you fairly or legally. And both businesses and employees may feel that an experienced employment attorney could assist in resolving work issues.

The lawsuit, filed in U.S. District Court in Manhattan, alleges waiters didn't receive any money generated by service charges added to food served in premium seating at Yankee Stadium.

Orders placed from the high-end seats include an automatic 20 percent service charge, with additional gratuities left up to the customers, according to the lawsuit. The lawsuit seeks class-action status. And while the lawsuit doesn't seek a specific amount of damages, the amount in dispute is more than $5 million covering 150 employees, Reuters reported.

But the servers' attorney told the news service the issue of a service charge was not addressed in the union contract. The Yankees moved into the new stadium in 2009 and charge between $100 and $325 for premium seats. A spokeswoman for the hospitality company told Reuters that all employees are paid in accordance with their union contract.

A spokeswoman for Legends Hospitality said the company had not been served with the suit but said all employees "are paid properly and in strict accordance with their union contract."

The dispute between workers and their company illustrates the importance of hiring a Long Island business law attorney who can properly represent the interests of employees who aren't being paid in accordance with the Fair Labor Standards Act as well as of employers who believe they are paying employees in agreement with a signed contract and/or the law.

This is a complex area of law that requires a knowledgeable attorney. Don't fight it alone.

Continue reading "New York Yankees Waiters Sue Over Alleged Unpaid Tips" »

The recent Bratz Doll cases involving Barbie Doll giant Mattel illustrates the importance of employment contracts in New York.

Of course, the case also involves copyright, trademark and licensing issues and illustrates why hiring a business litigation attorney in New York is always important when establishing new product lines or dealing with issues involving terms of employment for highly-skilled employees.

Forbes reports Mattel was ordered to pay an $89 million jury verdict to tiny rival MGA Entertainment; Mattel originally won a $100 million verdict against MGA in 2008, however that verdict was overturned on appeal.

At issue was whether a Mattel designer had the rights to develop the wildly popular Bratz doll on his own time and sell it to a rival. The employee claimed he developed the doll while living with his parents in Missouri -- between stints working for the company.

Mattel argued the invention came during his second stint with the company -- and that he violated the terms of his inventions agreement by taking the concept to MGA Entertainment. The company claimed copyright infringement and breach of contract and was awarded $100 million at the original trial.

However, the appeals court overturned the verdict, ruling that MGA deserved "sweat equity" for manufacturing and marketing the doll.

Continue reading "Mattel Case Illustrates Importance of Employment Contracts " »