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Minneapolis City Council Considering Requiring Sick Leave and Scheduling Obligations for All Employers
The Minneapolis City Council is currently considering a sweeping new ordinance that would mandate all employers in Minneapolis to provide sick leave to their employees, and impose broad requirements with respect to scheduling shifts. The proposal is supported by Mayor Betsy Hodges and a committee which the city council created earlier this year.
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The ABCs on NASAA’s Proposed Changes to Financial Performance Representations
On October 1, 2015, the North American Securities Administrators Association (“NASAA”) published 19 proposed Questions and Answers addressing the preparation of financial performance representations (“FPRs”). This proposed “Commentary,” discussed in this article, would likely affect most franchisors that make FPRs in their franchise disclosure document. Franchisors, franchisees, and other interested parties have until November 2, 2015 to submit comments to NASAA on the proposed Commentary. If no comments are received, the Commentary will likely become law, as written, in 2016.
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Some portions of the Commentary will be welcome clarifications that should reduce the number of inconsistent comments franchisors receive from state regulators who review their franchise filings. Others will impose burdensome requirements. We urge you to read the Commentary carefully, and consider commenting on provisions you believe will be problematic for your system. The task force that prepared the Commentary will review every comment received. To the extent you can show that a proposed change will not be of significant benefit to franchisees, or that the cost of complying outweighs the benefits to prospective franchisees, or that a proposed change will likely cause many established franchisors to stop making FPRs, your comments will receive more significant consideration. -
Data Breach Risk and Responsibility in Franchise Systems
Every franchise system uses common technology systems to facilitate systemwide customer service standards and system reporting. Problems with technology and IT systems are easily foreseeable, including data breaches, viruses, service interruptions, inconsistent databases, outdated data, end of term data transfers, inappropriate uses of data and more, but are often not covered by existing contractual provisions with franchisees. When these problems arise, implied IT warranties, express warranties, disclaimers, limitations on liability, exposures to and limitations of consequential damages, system requirements related to confidentiality and privacy, and many more IT-specific legal provisions that are not customarily included in longer-term franchise agreements all create ambiguity and risk the introduction of unintended parole evidence that is inconsistent with the underlying franchise relationship.
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New Executive Order Mandates Paid Sick Leave for Employees
On Labor Day, President Obama issued a new executive order mandating paid sick leave for employees working under federal contracts. The rules outlined in the order, to be further defined by the secretary of labor and Federal Acquisition Regulatory Council over the next several months, will apply to new federal contracts entered into after January 1, 2017. The U.S. Department of Labor will issue regulations concerning the executive order by September 30, 2016. Within 60 days after the Department of Labor issues its regulations, the Federal Acquisition Council will issue regulations concerning the clauses to be included in federal procurement solicitations and contracts.
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Supreme Court Maintains Rule Prohibiting Post-Expiration Royalties
The Supreme Court maintained the status quo – patent royalties that extend beyond the expiration date of the underlying patent remain prohibited.
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In Kimble v. Marvel Entertainment, LLC, the U.S. Supreme Court rejected a flexible test proposed by Kimble, a patentee and licensor, and maintained the clearly defined rule it adopted in a patent royalty case more than 50 years ago, Brullotte, that prohibits post-expiration royalties. The Kimble decision further eliminates uncertainties surrounding patent purchase and licensing activities by expressly recognizing that certain alternatives still remain which allow parties to contract around the established rule prohibiting post-expiration royalties. Further, the court specifically limited Brullotte’s application to patent royalties. -
Developing an IP Strategy for Your Startup
Starting a business, as well as brewing quality beer, are not easy tasks. There are several factors to consider when developing your business plan such as defining startup costs, hiring key employees, attracting investment, crafting a marketing plan and building an advisory team. In brewing beer, adherence to process and formula is critical. Too often, companies fail to recognize the importance of an intellectual property (IP) strategy and how crucial obtaining the proper protection for ideas is to their success.
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Be Like Mike? Not Unless you Have his Permission
Michael Jordan is arguably the greatest basketball player of all time, winning six NBA championships, five MVP awards, two Olympic gold medals, and one NCAA national championship. In addition to his on-court dominance, his in-court success is notable as well. Just recently (August 2015), for example, he scored an $8.9 million verdict stemming from the unauthorized use of publicity rights. The size of the judgment underscores the risks associated using individuals’ names and personas in communicating or marketing to the public, especially when these activities involve well-known figures.
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Protecting Your IP at the Border: Using the CBP Trademark Recordation System to Stop the Importation of Infringing Products
Every day, thousands of infringing products – everything from counterfeit Viagra, to pirated copies of Star Wars, to fake Marlboros – are smuggled into the United States, often through one of the 328 ports of entry. Products like these are frequently sold on the black market, or they can find their way onto the shelves of legitimate retail establishments. They pose a threat to the health and safety of American consumers, as well as to the legitimate business interests of companies whose products are being imitated.
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NLRB Decision Will Impact Staffing Agency Relationships
On August 27, 2015, the NLRB issued a long-awaited decision regarding Browning-Ferris Industries of California, Inc. (BFI). In this case the NLRB reversed a longstanding standard defining joint employer status. BFI contracted with Leadpoint to provide certain workers involved in its recycling operation and to clean its facility. Leadpoint recruited, interviewed, tested, selected and hired the employees who performed work for BFI. The agreement between BFI and Leadpoint included provisions which, among other things, required Leadpoint to ensure that its personnel had the appropriate qualifications, including certification and training to perform the general duties of the assigned position, and required Leadpoint to make reasonable efforts not to refer workers who were previously employed by BFI and were deemed ineligible for rehire. BFI had the right to reject any Leadpoint employee or to request the removal of any Leadpoint employee, and to approve all hours worked by Leadpoint employees.
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Looking Past Due Diligence for Benefit Plans in Mergers and Acquisitions.
Corporate transactions involving the sale or purchase of another company or division are complex events. While employee benefit plans generally are considered in these transactions, the time and attention devoted to these plans are often minimal. This exposes the parties to additional risks, both in terms of direct costs and in long term administrative complexities. This article will review the various risks that often are undiscovered during the standard due diligence process. Health plans and retirement plans, including multiemployer plans, and ex ecutive compensation plans are all considered.
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California Raisin Case Decides the Obvious: When the Government Takes Your Property, it Has to Pay You For it
The California Raisins made a comeback at the end of June in the form of a United States Supreme Court decision making clear that the Fifth Amendment Takings Clause of the U.S. Constitution (you know the one: “nor shall private property be taken for public use, without just compensation”) applies not only to real estate, but also and with equal force, to personal property. As the Court said recently in Horne v. U.S. Dept. of Agriculture, “Nothing in the text or history of the Takings Clause, or our precedents, suggests that the rule is any different when it comes to appropriation of personal property.”
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The Mechanic's Lien and Pre-Lien Notices
As most of us know, mechanic’s liens are a powerful statutory remedy for contractors to get paid for their work. The mechanic’s lien is an actual lien filed or recorded upon real property that puts the property owner and anyone examining title on notice that a contractor has done work on the property, but has not been paid for the work. Any contractor who has filed mechanic’s liens knows, however, that the process of properly filing such a lien can be filled with pitfalls.
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Takings Law: The Fundamentals
Takings law can be a confusing subject matter. A single article may alternatively discuss takings, eminent domain, condemnation, and inverse condemnation, all without ever defining the meaning of these terms. Beyond vocabulary, articles frequently assume familiarity with the way takings cases are actually litigated. The purpose of this article is to provide a foundation of knowledge for the reader interested in the subject matter.
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Court Watch: Franchise Alert - August 2015
In the August 2015 issue of the Law Journal Newsletter’s Franchising Business & Law Alert, Cynthia Klaus and Bryan Huntington contributed two articles, "Court Awards Franchisor Attorneys' Fees in Trademark Infringement Action Against Competitor" and "Court Clarifies Meaning Of Termination for Breach and Exceptional Lanham Act Claims."
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Allocation
The Reference Handbook on the Commercial General Liability Policy, 2nd Ed., Chapter 13
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Department of Labor Revises FMLA Forms
The Department of Labor (DOL) recently issued revised Family Medical Leave Act (FMLA) forms (available at https://www.dol.gov/whd/fmla/2013rule/militaryForms.htm), which are effective through May 31, 2018. Although employers are not required to use the FMLA forms provided by the DOL, those who do should use the updated forms moving forward. In addition, employers are advised to include the Genetic Information Nondiscrimination Act (GINA) safe harbor language discussed below even when using the revised FMLA forms.
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Privacy Chapter, Business Disputes: Claims and Remedies Deskbook
Phyllis Karasov, a leading employment and labor attorney in the Twin Cities, was recently published by Minnesota Continuing Legal Education.
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Franchise Renewal Season: What Happened and What Will Happen
The franchise renewal season that keeps most franchisors – and their lawyers – busy in February and March (and in April for those who follow the federal 120-day guidelines) is behind us. Larkin Hoffman’s Franchise & Distribution Practice Group completed filings for about 25 brands that have fiscal years ending December 31, and found a number of trends, mostly positive, but with new challenges on the horizon related to risk factors and financial performance representations.
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Counting Calories: The FDA’s New Food Labeling Requirements for Restaurants
The U.S. Food and Drug Administration recently adopted a new rule requiring certain food establishments to provide calorie and nutrition information. Last week it announced the rule will go into effect on December 1, 2016, a delay of one year from its original effective date to allow for additional time to provide clarifying guidance. That delay gives franchisors time to prepare their system for food labeling compliance by both their franchisee-owned and company-owned restaurants. The new rule applies to restaurants that are part of a chain with 20 or more locations operating under the same name, and therefore many food-service franchisors will need to ensure compliance by all their outlets by December 1, 2016.
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DOL Seeking Comments on Proposed Amendments to FLSA “White Collar” Exemptions
On June 30, 2015, The U.S. Department of Labor (“DOL”) released a Notice of Proposed Rulemaking, proposing changes intended to modernize and streamline exemptions to the minimum wage and overtime pay requirements of the Fair Labor Standards Act (“FLSA”). The FLSA guarantees a minimum wage and overtime pay at a rate of not less than one and one-half times the employee’s regular rate for hours worked over 40 in a workweek. The FLSA also provides a number of exemptions, including the so-called “white collar” exemptions. Current regulations exempt salaried employees who are paid a minimum of $455 per week ($23,660 per year) and who qualify as executive, administrative, professional, outside sales, and/or computer employees.
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