Given the length, formality, and cost of litigation, employers are turning to arbitration to resolve disputes. Arbitration is a private process with a neutral third party as the decision maker. Employees also find the process advantageous, as it provides a more accessible way to address issues with an employer.

In order to resolve a dispute through arbitration, the parties must be subject to an arbitration agreement. Below is a general overview of Michigan employment arbitration agreements, should you or your business require resolution of a dispute through arbitration:

Scope of Arbitration Agreements

When interpreting an arbitration agreement, the same legal principles that govern contract interpretation apply. Therefore, it is important that the language of the agreement represents intent of the parties.

Determining the Applicable Law

Arbitration agreements are enforceable under Federal Arbitration Act or the Michigan Uniform Arbitration Act.

Arbitrations are administered through organizations such as the American Arbitration Association (“AAA”) or JAMS, which also have its own rules and procedures.

Who Enforces Employment Arbitration Agreements?

The subject of the dispute determines who will decide the issue. Substantive issues–such as whether an agreement exists, and issues that go to the drafting of the contract–are generally questions for the court. Procedural issues, on the other hand, are generally questions for the arbitrator.

Keep in mind that if arbitrating according to the AAA Commercial Arbitration Rules, the arbitrator may make the initial determination of substantive issues.

When Dealing with Enforcement Issues, Who Carries the Burden?

According to Michigan law, the burden is on the party seeking to avoid the arbitration agreement, not the party seeking to enforce the agreement.

Who Can Be Required to Arbitrate?

As a general rule, a party cannot be required to arbitrate an issue which he/she has not agreed to submit to arbitration. Additionally, a party cannot be required to arbitrate when not legally or factually a party to the agreement.

However, since arbitration is a matter of contract, Michigan Courts recognize five contract principles that bind a nonparty to an arbitration agreement:

• Incorporation by reference
• Assumption
• Agency
• Veil-piercing/alter-ego
• Estoppel

Continued Employment as Acceptance of Arbitration Agreement

If an employer changes an arbitration provision in the employee’s employment contract or incorporates new dispute resolution process, it is no longer enough to rely on the employee’s continued employment as acceptance of the changes. The employee must know that their continued employment manifests acceptance.

If you would like help navigating Michigan employment arbitration agreements, our team is happy to assist. Send us a message now.

The post Everything You Need to Know About Michigan Employment Arbitration Agreements appeared first on Dawda PLC.

In today’s ultra-competitive marketplace, a company’s name, branding elements and unique products/services are what distinguish it from thousands of other competing businesses. These trademarks and service marks can have enormous value for a company, whether it is a start-up, multi-national corporation, or a nonprofit, and every company should take steps to ensure that its “intellectual property” is adequately protected. Dawda attorneys have helped dozens of companies – including global automotive suppliers, manufacturers, tech startups and local businesses – do just that.

While it is always advisable for a company to use the services of an experienced law firm, there are certain steps a start-up can take to ensure that its marks are protected from infringement by other competing businesses.

Do your Research

First, when selecting a logo, company name, or the name of your goods and/or services, choose one that is unique and distinctive.  The United States Patent and Trademark Office (USPTO) only protects “fanciful, arbitrary and suggestive” marks. A fanciful mark is one that has been made up (ie, XEROX), an arbitrary mark is a commonly used word but has no relation to your product (ie, Apple for computers), and a suggestive mark is one that vaguely describes the product or services (ie, Quick-Dry).  Marks that are merely descriptive (marks that are comprised of a person’s name, a geographic location or a quality of the product or service you provide are afforded the least protection and may be unregisterable with the USPTO.

Second, make sure the mark you have selected is not being used by another business in any way. The easiest way to do this is to perform Internet searches for the mark and then review the results one by one. Pay attention to names that look and sound similar or that are in a different language. For example, given the existing trademark for “La Croix” for bottled water, you probably would not be successful protecting “Cross,” “Crucifix” or “Holy Cross” for a similar product.

Third, using the USPTO’s TESS database, look to see if another company has already registered your mark. Again, you should look for marks that appear or sound similar to yours or are spelled in a different language.  If there are similar prior registrations, don’t despair, look at the description of goods or services to which the mark applies; if they are different from your goods and services, it may still be possible to register it with the USPTO.

If your mark has been taken, you’ll need to rethink a new plan of attack for your business or consider pursuing trademark coexistence agreements. If your mark is available, you can move on to the next step – registration with the USPTO!

Register

Once you’ve determined the availability and feasibility of protecting your mark, you can begin the process of registering your mark with the USPTO by filing an electronic application on the USPTO’s website.

A trademark application requires that you provide a legally acceptable identification for your mark and can be a challenging process if you decide to take it on solo (especially with soundmarks or a complicated logo/mark) so you should consider hiring an experienced law firm in those instances. Once this application is completed, you’re another step closer to having your mark protected.

Watch your Application

After the trademark application has been submitted, it could potentially take a year or longer to be approved–depending on the trademark you’re applying for. That being said, it’s important to check the status of your application regularly in case additional information or documents are needed. Oftentimes, the USPTO attorney examining your application will issue an office action noting some deficiency or requesting a clarification. These office actions should be promptly responded to, otherwise you risk abandonment of your application. Shepherding trademark applications through the registration process is something Dawda attorneys excel at. In the interim, you can still use your mark as you conduct business.

Once you’ve completed the process of registering your mark with the USPTO, the USPTO will issue a certificate of registration with a date of issuance and renewal dates. These dates are critical to keeping your registration active and failure to renew the trademark during the renewal period could result in loss of a trademark registration. You’ll need a partner who can track these dates and who knows how to protect your company’s marks from companies who may try to use them. That partner is Dawda.

The post Starting a business? Follow these steps to protect your trademarks appeared first on Dawda PLC.

Setting the stage: You are about to enter into a contract and want to make sure the other party, in a year or two, does not attempt to claim that the terms of the contract have changed because of something said by one of your managers, officers or employees.

Taking action: So, you put an anti-modification and anti-waiver clause into your contract that states “this contract may be modified or amended only by a written document signed by the parties.”

The dispute: A few years later, you end up in a contract dispute with the other party, who claims that the requirements for performance under the contract have been changed by one of your managers in a way different than what the contract called for. You pull out your contract, see the anti-modification and anti-waiver provision which states that the terms cannot be modified except by a signed writing, and feel reassured that the other party does not have a legal leg to stand on. You feel certain that you are protected against the assertion that the terms of the contract have changed despite the actions of your manager. Are you in fact protected?  Maybe not.

Why could I not be protected? For several years, Michigan courts have found that such an anti-modification and anti-waiver clause, by itself, does not always protect against oral modifications of the agreement. In Quality Products & Concepts Co. v. Nagel Precision, Inc., 469 Mich 362; 666 NW2d 251 (2003), the Michigan Supreme Court held that parties to a contract are free to mutually waive or modify their contract notwithstanding an existing anti-modification and anti-waiver clause, based on the principle that parties should have the freedom to contract.

However, the Court in Quality Products made it clear that before any waiver or modification could be found to exist under such circumstances, there must be clear and convincing evidence of a mutual intent and agreement (even if oral) to waive the anti-modification provision itself, in addition to the substantive provisions of the contract that the one party claims has been modified. The Court elaborated that such clear and convincing evidence of an intent to waive the anti-modification clause is not ordinarily found by a course of conduct alone (i.e. conduct that is inconsistent with the terms of the contract), but also generally requires evidence of a subsequent oral agreement to such waiver.

How do I make sure I’m protected? How does one strengthen the anti-modification protections in a contract so that an offhand verbal statement by an employee does not result in a modification of the carefully crafted legal rights and obligations in the written agreement? The answer is to limit the number of persons having authority to modify the contract.

While the mere existence of a written anti-modification clause, standing alone, may not be able to completely prevent the oral amendment of a contract, one may supplement such a clause by selectively granting authority to authorize a modification to only a specific individual or officer-holder.  A clause in a contract that provides “any modifications must be approved by the president of the company,” for example, will render ineffective and unenforceable the alleged contract modification based on a verbal statement by someone else in the company. When the parties make it clear that only a specific individual has the authority to change contract terms, statements by others without such power clearly may not be relied upon. In such circumstances, Michigan courts have rejected claims of alleged contract modification when such contract modification was not approved by the person with the sole authority to make the change.  See, for example, Pepperman v Auto Club of Michigan Ins Group, 181 Mich App 519; 450 NW2d 66 (1989).

Do you have additional questions on how a situation like this may impact your business? Please contact John Mucha at jmucha@dmms.com.

The post Navigating an Anti-Modification and Anti-Waiver Contract appeared first on Dawda PLC.

It’s a deal.

We’re hoping to hear those words quite a bit this week at the RECon, presented by the International Council of Shopping Centers, in Las Vegas. But any retail real estate professional also knows there are a lot of complex—and potentially problematic—legalities that can keep you from sealing the deal with a handshake and signing on the dotted line.

When negotiating any type of real estate transaction, it’s important to have someone in your corner who can help you manage the full lifecycle of a deal from inception to conclusion while keeping your best business interests at heart.

From site acquisition and development to leasing and environmental law and regulations, Dawda has the experience and expertise to navigate the nuances and subtleties of often complicated real estate legal issues.

For more than 20 years, our attorneys have represented retailers, developers, owners, property managers and investors for some of the world’s largest retail companies, Fortune 500 enterprises, financial institutions, hospital groups, Real Estate Investment Trusts, automotive manufacturers and dealerships, and mid-size and emerging businesses on all types of real estate transactions.

Our retail real estate legal experts have also been called upon as thought leaders to share their insights into complicated legal matters, like what franchisee tenants need to know about negotiating leases, and how non-traditional retail concepts are emerging as viable and vital new tenants for many centers, and what landlords need to know and do to accommodate them.

Interested in learning more? Dawda’s Alfredo Casab will be at RECon and is available to discuss your legal concerns and how he can ensure you get the best deal possible.

Contact Alfredo today.

The post Retail Real Estate Law Experts Dawda Attending RECon appeared first on Dawda PLC.

In its March 19, 2018 unanimous opinion, Marlette Auto Wash, LLC v Van Dyke SC Properties, LLC, the Michigan Supreme Court affirmed certain principles of Michigan case law regarding adverse possession and prescriptive easements, which principles could have real consequences for purchasers of real property and title insurance companies.

Marlette involved a dispute between neighboring property owners regarding the use of a shopping center parking lot for access to the adjoining parcel without the benefit of a recorded easement.  Proofs offered at trial showed that a previous owner used the adjacent parking lot for access to and from its parcel for more than fifteen years (the statutory period) without an agreement between the neighboring property owners.  No previous owner took legal action to establish record title of such easement.

The Marlette Court rejected the argument that a vested right to a prescriptive easement does not become an easement that runs with the land unless a determination has been made by a court that all elements to a prescriptive easement claim have been satisfied.  Instead, the Court held:

• Open, notorious, adverse, and continuous use of real property for the relevant statutory period creates a prescriptive easement that is appurtenant and runs with the land, without the need for the claimant to show privity of estate with the prior owner; and
• A prior owner of a dominant estate is not required to take legal action to claim the easement in order for a vested prescriptive easement to exist.

While the legal concepts of adverse possession and prescriptive easements may be taught in Real Property 101, the Court’s opinion in Marlette clarifies certain ideas and nuances that are important to individuals purchasing or developing real estate and to the title companies insuring such interests.  Removing the “legalese” from the Court’s holding in Marlette, the Court confirmed that a party gains title by adverse possession when the statutory period expires, not when a legal action regarding title is brought.  Under this theory, a purchaser of real property may not have public, record notice of a prescriptive easement or property lost through adverse possession.  A prior owner may have satisfied the elements for a prescriptive easement or claim of adverse possession, obviating the need for a current possessor to meet such requirements, even if the current possessor has only recently begun to adversely use the property.  As suggested by the Michigan Real Property Law Section in its amicus brief, this position could “give rise to unrecorded easements that are not known and may well not be ascertainable currently.”  In Marlette, however, the Court rejected arguments that its holding would create “secret” easements since a claim of adverse possession is only successful if the use in question is “so open, visible, and notorious as to raise the presumption of notice to the world that the right of the true owner is invaded intentionally.”

For purchasers and developers, the Marlette opinion reaffirms the importance of thorough due diligence prior to purchasing real property.  Ordering a title commitment and a survey of the property may not reveal an adverse use of the property or the extent of such use.  While shared points of entry, worn paths, or encroaching features may provide clues, a site visit and further investigation as to any potential adverse uses may be necessary and prudent to avoid unanticipated negative consequences.

The post What’s Mine Might Be, Legally, Yours appeared first on Dawda PLC.

Yet, the old reliable Yellow Taxi is calling it quits in San Francisco, and will be declaring Chapter 11. Yellow Taxi was the oldest taxicab service in the city.

The woes of this stalwart business contain some elements of modern bankruptcy: a changing business landscape, coupled with a crippling lawsuit and a disagreement with the California judiciary  on a critical sector of employment law.

Drivers: Employees or Contractors

Just as with Uber and Lyft, Yellow Taxi maintains that its drivers are contractors and not employers. Various California jurisdictions have maintained that for all services (Uber, Lyft and traditional cab services) that in many cases, the drivers are indeed employees. The relevant California courts have cited issues such as exclusivity as well as the dependence of the drivers on the larger company for connecting with fares, as well as receiving payment.

Yellow Taxi has experienced a significant setback as a result of these determinations, due to a large lawsuit.

Civil Litigation

In 2011, a passenger was seriously injured while in a Yellow Taxi vehicle. The case, known as Fua v. Yellow Cab hinged on the employment nature of the driver. Yellow Taxi maintained that the driver was a contractor and that Yellow Taxi provided the vehicles and the brand. Ultimately, the jury disagreed with Yellow Taxi and determined that the driver was an employee. As a result, Yellow Taxi was compelled to pay the $8 million award. This award, combined with other pending litigation and arbitration fees as well as other debts, became part of the $20 million indebtedness of the company. There are reportedly 150 other claims against the company that are pending.

Yellow Taxi in the World of Uber and Lyft

Perhaps Yellow Taxi could have handled the large debt load, but their profits are down significantly, too. Both Uber and Lyft have made huge inroads in California and in San Francisco, particularly, where they are headquartered. The availability of vehicles through the Uber and Lyft apps makes them appealing to younger riders, who also appreciate the cashlessness of the transaction.

A National Trend:

Yellow Cab has also filed for bankruptcy in Chicago and other cities’ traditional cab services may be in trouble, too. As evidence of the trouble, New York City’s yellow cab medallions have dropped in price to $700,000. As recently as 2013, the medallions went for $1.3 million each.

The post Goodbye, Yellow Taxi appeared first on Dawda PLC.

Are the two entities a good fit? Lululemon wouldn’t make a good partner with Sears. They have different target markets but also they have vastly divergent corporate ethos and management styles.

One of the most difficult aspects of running a business is envisioning what companies would be good candidates for mergers and acquisitions. Yet, this is actually a far better way to go about M&A then simply evaluating a company because it is on the market.

The very best idea would be to have clearly delineated strategic plans and examine any new mergers within that rubric.

Ask yourself about their bottom line. It’s critically important to understand the financial underpinnings of any potential partner or component. This is not as easy as it seems. Expert attorneys and accountants can help you determine not only the earning power of the potential company mate, but also what the expected outlay would have to be to merge, consolidate or expand your operations.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is just one measurement of the health of a company. Do not rely on this one statistic as the sole determinant of your decision.

Don’t overstate the cost savings and underestimate the costs of merging. Often companies get excited over saving money in staff expenses and equipment and this can add up to a lot. But you won’t be able to just halve your staff in one fell swoop and for a period of time, you may be paying for twice as many people as you need. In addition, you will incur other costs for these synergies like severance payments and possible relocation costs for both people and equipment. It is highly likely that there will be up-front expenses prior to any cost savings.

Consider the down-side of merging. Are there any disadvantages to this merger or acquisition? Would you lose any key employees or significant customers? How would this affect your functioning or your bottom line? What difficulties do you anticipate in terms of management, financing of the acquisition, and the continued flow of operations? Are these aforementioned issues ones that can be overcome? All of these issues are called transition risk and should be a large part of your decision, just as significant as the price of the M&A.

Mergers and acquisitions, when conducted thoughtfully, can be a highly effective way to effectuate strategic growth. All companies are advised to consider the many aspects of these transactions before taking any action and to consult attorneys who specialize in mergers and acquisitions before making any decisions.

The post Making a Decision about a Merger or Acquisition: What You Should Consider appeared first on Dawda PLC.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, Amortization.

EBITDA is often the gold standard by which interested parties determine how successful a company is and if it is a good buy or a good candidate for merging. Certainly, it’s easier to crunch the numbers to come up with an EBITDA figure then wade through dense financial statements.

EBITDA is a good measure of certain aspects of a business, but it is not the complete picture.

EBITDA is helpful in determining:

• Cash flow
• Balance sheets (a good companion to EBIDTA)
• What the company will owe in the short term
• The condition of the assets of the company
• A ballpark figure for valuation of the company (with the caveats listed below).

EBITDA does not take into account:

• What will be required in terms of capital investment to maintain the current and future growth of the company
• The complicated tax picture which varies wildly by the type of business
• Costs of integrating two companies
• The amount of leveraging within the company, which can magnify losses into intolerable levels
• The true picture of the depreciation: The company could require tremendous re-investment every year in equipment, as opposed to depreciation which is essentially an accounting tool that helps to spread out the decreasing value of significant assets but doesn’t actually cost a company significant cash outlays

EBITDA should be part of your algorithm of analysis, but it should not be the only tool at your disposal. Be sure that you have a clear understanding of the true financial picture of any company you are considering purchasing or merging with. As always, consult with trusted specialized attorneys as you enter the research and negotiation phase and avoid hasty decisions.

The post EBITDA: I Can’t Even Say It, Let Alone Understand It appeared first on Dawda PLC.

It can do more damage to your business’ bottom line than unexpected utility price increases and even hikes in health care costs. But while most business owners fret about upticks in prices of commodities that they can’t control, they should be spending more time to ensure that their own offices, stores and practices are protected from fraud.

Your small, medium or large business can be vulnerable to fraud when employees have unsupervised access to money, products, financial instruments or customers’ and/or owners’ financial information.

Some types of fraud of which you should be aware:

• Theft of cash register monies. If you have a “till” or cash register, the person who is collecting money can easily skim cash, especially if they have a way to bypass the system and not enter transactions prior to opening the drawer. Restaurants tend to be the most vulnerable to this type of theft but anybody who deals in cash is vulnerable to this type of theft. Without a tight accounting system and oversight, schemes involving customers and a person on the inside allow goods to change hands without being charged or entered into official sales receipts.
• Check tampering. This type of fraud is becoming less prevalent, as fewer checks are being written. However, a typical check typing scheme involves the alteration of checks. We know of a case where an employer regularly wrote out checks to the “IRS”, which an unscrupulous employee altered to her first name, Priscilla. It took several months before the business owner discovered Priscilla’s misdeeds and she had skipped town by then and not surprisingly, left no forwarding address.
• Ghost employees. A person who has access to payroll accounts can set up fake employees and have funds directly deposited to their accounts, all without the knowledge of business owners. Larger businesses are at higher risk for this type of fraud. Outsourcing payroll may not be a surefire preventive technique, as the payroll service won’t necessarily recognize who is a real employee versus a ghost employee.

There are a few ways to prevent and detect fraud. We will discuss these in next week’s blog.

The post Fraud: Eating at the Bottom Line appeared first on Dawda PLC.

Going along with all of the changes were the homeless of these cities, who were urged or forced to relocate temporarily during the festivities.

The moving of the homeless highlights a consistent issue that crops up in many large cities and suburbs, too. The presence of vagrants and homeless are not considered conducive to retail or commercial establishments. Yet property owners are often unable to force homeless people to find other places to rest.

Different municipalities follow a variety of divergent local judicial interpretations. Certainly in areas where advocates for the homeless have found legal footing, laws prohibiting vagrancy are contested with some success. The advocates have insisted that the homeless have a right to congregate according to 1st Amendment rights governing freedom of assembly. Furthermore, these same advocates have argued that laws prohibiting vagrancy are “excessively cruel” and therefore abridge 8^th Amendment rights.

Some cities have maintained that there are an adequate number of beds in shelters and therefore a person should be compelled to go to one of these establishments if homeless, which would obviate the need for a person to sleep at night on a public bench or camped out on a city sidewalk. This claim has sometimes been upheld in courtrooms, which then provides direction to local security personnel.

Each city’s police force follows the dictates of local law, while balancing their mandate to serve the needs of property owners. In addition, local police must allocate the time that they spend on nuisance issues versus other pressing police business.

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