Getting Fired:

Hiring and Firing: Learning How

Age Discrimination: Can Youth File?

Intellectual

Business Law:

Corrections or additions?

These stories were published in U.S. 1 Newspaper on January 27, 1999.

All rights reserved.

Landmark Firing Case: Employer Beware

If you are ever fired, you might want to keep in mind

the three rules espoused by noted financial editor Marshall Loeb.

Loeb’s three rules:

1.) Never quit. Make the company fire you.

2.) He who acts first, loses.

3.) Don’t get proud, get even. Your pride is the company’s

best weapon.

Nancy Riddell was fired from her customer service job

from the Medical Inter-Insurance Exchange (MIIX), the Princess Road-based

medical malpractice insurance company. The firing took place on the

day when Riddell returned from a medical leave for a back problem.

That day, in return for her severance package, she signed an agreement

specifying that if she ever filed suit against her employer, she would

have to forfeit the severance monies.

But the following morning Riddell began to question the deal, and

she went to an attorney, Elizabeth Zuckerman of Zuckerman &

Fisher on Lenox Drive. An alumna of the University of Michigan, Class

of 1982, Zuckerman has a law degree from the University of California

at Davis and worked in the state deputy attorney general’s office

and was a director at Mason Griffin & Pierson on Poor Farm Road before

joining George Fisher to open a dual practice in 1997 (U.S.

1, September 10, 1997). Zuckerman filed suit alleging age discrimination,

disability discrimination, and overtime payments.

The results of Riddell’s suit against MIIX are helping to make legal

history — and to fatten corporate lawyers’ pockets. Because a

federal district court said that Riddell’s severance agreement was

not a deterrent to a discrimination suit, severance agreements are

now under intense scrutiny. Human resources staffers take note: The

severance agreement that your company used before may not hold up

in court now.

Neither Riddell nor her attorney would comment except to say that

the case appears to be resolved (and presumably will involve a cash

settlement). But the matter was aired in Lawyer’s Weekly USA (http://www.lawyersweekly.com)

on December 14, 1998, under the headline "Severance Agreements

Should Be Rewritten."

In an October, 1998, decision, Judge Mary L. Cooper of U.S.

District Court in Trenton ruled in favor of Riddell, saying that the

agreement was not valid, and that she could sue for a better severance

package. She did not have to return her severance pay. "Forcing

employees with serious health problems to tender back their severance

benefits," wrote Judge Cooper, "would deter meritorious challenges

to releases of Family Medical Leave Act claims and thus undermine

Congress’ goal of encouraging job security for such employees."

Bottom line: Anytime you fire someone, give that person all the protection

that you would give to an older worker. Older workers (those over

40 years old) get special protection under the Older Workers Benefits

Protection Act (OWBPA). They have special severance agreements. Use

them as a model, say the experts, for every other severance agreement.

"Anything less than that," Zuckerman was quoted as saying,

"and an employer may be asking for trouble."

A legally sound severance agreement should:

Advise the worker to consult a lawyer.

Allow enough time to consider the offer. The OWBPA allows

workers to take from 21 to 45 days before they must sign the agreement.

Allow a grace period during which the agreement may be

rescinded, even though it has been signed. The OWBPA allows seven

days.

Specifically mention any claims that the worker is giving

up. These claims might include claims for disability, discrimination,

breach of contract, unfair discharge, and/or monies owed for overtime

or commissions.

Keep the language understandable. Courts will probably

take this into account.

Top Of Page
Getting Fired:

Employee Beware

<B>Stephen Mitchell Sack also offers advice to the

employees who are being asked to sign these agreements. Sack’s new

book, "Getting Fired: What to Do if You’re Fired, Downsized, laid

off, Reconstructed, Discharged, Terminated, or Forced to Resign"

(Warner Books, $24.95), is full of tips, sample forms, and letters.

Sack provides boilerplate documents for the employer and the employee,

everything from a demand letter for ERISA retirement benefits to a

sample trade secret and confidential information policy statement.

Sack, a New York-based author and lawyer, offers the obvious strategies

that a fired worker should use when asked to sign a release. Read

it carefully. Speak to a lawyer immediately when your employer asks

you to sign a release. Less obvious tips:

Try not to sign a "gag order" provision, which

lets the company take back its money if you tell others about your

settlement.

Avoid signing a "no compete" clause, which would

prohibit you from working for a competitor or starting a competing

business.

Negotiate additional clauses for your protection. "Make

sure the agreement will be null and void if any monies due under the

agreement are not paid. Include a guarantee that obligates the parent

company to pay all remaining sums due under the agreement in the event

a subsidiary becomes bankrupt, insolvent, or fails for any reason

to pay the amount due."

Obtain mutual releases where appropriate. "Try to

get the employer to give you a release whenever you are giving one

to the employer. This is because you want to be sure that the employer

can never sue you at a later time for something you did."

And the most obvious, but perhaps the most overlooked idea:

Be sure you are satisfied with the offer. Ask for at least an additional

month’s severance in return for waiving any claims. When it comes

to the actual negotiations:

Appeal to corporate decency at the first meeting. Select

the most sympathetic person at the company to negotiate with.

Rehearse what you will say.

Stall for time and try not to accept the first offer.

Request an additional negotiating session to discuss your severance

package.

Ask for 15 post-termination benefits and you may get the

company to settle for five.

Draft your own favorable letter of reference and get someone

to sign it before you sign the waiver.

Never resign unless absolutely necessary. Says the author

of "Getting Fired," it is better to get fired.

Top Of Page
Hiring and Firing: Learning How

Being old is no longer the major reason to sue for age

discrimination. Now you can sue for being young, says Steven M.

Berlin of Buchanan Ingersoll on College Road. In fact, what with

recent court decisions and EEOC guidelines, employees can sue for

just about anything, so employers must beware.

Berlin speaks at a two-day "Personnel Law Update 1999" conference

scheduled for the Sheraton Hotel in Edison on Wednesday and Thursday,

May 26 and 27. The conference is staged by a national group, the Council

on Education, and costs $595. Call 800-942-4494.

Berlin is an alumnus of the University of Maryland at College Park,

Class of 1977, and went to Brooklyn Law School. For Buchanan Ingersoll

he represents Foodarama Supermarkets Inc., a national trucking company

(Dana Transport), and an information technology firm based in Edison,

Intelligroup Inc. His topic for Thursday, May 27, at 11 a.m. is how

to understand the rules on retaliation set forth by the Equal Employment

Opportunity Commission.

"The EEOC’s recent guidance on retaliation will mean an overwhelming

number of new lawsuits alleging retaliation," says Berlin, referring

to the United States Supreme Court’s "Robinson v. Shell Oil"

decision. After making a race discrimination claim against Shell Oil,

the worker applied for a job elsewhere and was given a negative reference

by Shell. Claiming wrongful retaliation, he brought a lawsuit under

Title VII of the Civil Rights Act. The oil company countered that

since the plaintiff was no longer a Shell employee, Title VII did

not apply. They lost.

Last May the EEOC adopted a guidance against retaliation for any protected

factor — race, age, disability, gender, or equal pay, and, says

Berlin, "the third circuit court of appeals tends to follow EEOC

guidance."

"Poor performing employees are already able to find refuge from

discipline and termination by hiding behind employment laws, making

you feel like your hands are tied. Now, even the slightest actions

by employers can serve as the basis of liability. And the new guidance

protects more employees than ever before."

More people can be protected, including a former employee

or someone closely associated with someone who engaged in protected

activity.

Someone does not have to be right to be protected from

retaliation. If you made the claim and your claim was not upheld,

you are still protected, says Berlin. He gives an example:

"A husband and wife work in a company. The husband claims he was

wrongfully treated and is fired. He gets a negative reference. The

wife who had been a good performer — but never complained —

starts getting treated adversely. She doesn’t complain but her secretary

does. All three would be protected under this guidance."

"The lesson for employers — and it’s an old one," says

Berlin, "is to have good documentation for employment action.

When you do give a performance appraisal don’t be too charitable because

if the performance is unacceptable later, you will have to deal with

the inflated evaluations."

If you have a progressive discipline policy, follow it and document

it, so if you claim poor performance and the worker claims retaliation,

you have your performance claims documented.

"Many of the emerging high tech companies on the Route 1 Corridor

don’t have a human resource structure in place," says Berlin,

"so they need to be mindful of the ABCs of good human resources

policies."

The program also features two Archer & Greiner attorneys, Steven

W. Suflas who will speak on common exempt/non-exempt classification

mistakes that can leave an employer exposed to overtime liability,

and Louis L. Chodoff, speaking on workforce professionalism

standards. A corporate lawyer for Lucent Technologies, Joseph V.

Ippolito will discuss how the most recent Supreme Court cases impact

more than just sexual harassment. Other topics will be proactive safety

measures to head off workplace violence, best practices in witness

interview techniques, improving organizational ethics to decrease

liability exposure, and improving termination practices so as to stave

off wrongful termination lawsuits.

Top Of Page
Age Discrimination: Can Youth File?

Wrongful termination lawsuits are often based on older

workers claiming they were fired for being old, but in a newsletter

for Buchanan Ingersoll clients, Steven M. Berlin (see story

above) cites a case in which someone claimed he was fired for being

young. In "Bergen Commercial Bank v. Sisler," the New Jersey

Supreme Court held that the protection of the New Jersey Law Against

Discrimination (LAD) is broad enough to accommodate claims of age

discrimination based on youth.

"A terminated 25-year-old, who was replaced by a 31-year-old,

sought to invoke the anti-age discrimination provisions of the LAD

on the grounds that he was terminated because his employer perceived

him to be too young for the job," writes Berlin. "Acknowledging

that the federal Age Discrimination in Employment ACT (ADEA) allows

age discrimination claims only for individuals over the age of 40,

the Court ruled that the LAD’s prohibitions against age discrimination

protect employees from ages 18 to 70."

Nevertheless, says Berlin, the court did recognize that older workers

are historically disadvantaged. For a younger worker to win an LAD

age discrimination suit, he must prove the following:

That his employer was the unusual employer who discriminates

against the majority, i.e. younger workers.

that the worker was performing at a level that met the

employer’s legitimate expectations

that the fired worker was replaced with a sufficiently older

candidate to permit an inference of age discrimination (even if

the replacement was also under 40.

"Employers must be careful not to make employment decisions

where age is the determinative factor," writes Berlin. Employers

must also evaluate the impact that employment decisions have on persons

of all age categories covered by the LAD. The decision makes clear

that practically the entire workforce falls under the protections

of the LAD.

Says Berlin: "People need to think twice before they terminate

anyone in any category."

— Barbara Fox

Top Of Page
Intellectual

Property

Not since the technological breakthrough of Gutenberg’s

printing press," says Gary Yanker, "have book publishers

been in more desperate need of a new intellectual property strategy

to protect and enhance the intellectual assets they have been developing

for hundreds of years." Yanker is teaching a new graduate level

interdisciplinary Global Intellectual Property course at Rutgers Graduate

School of Management (the business school) in the fall semester in

New Brunswick. Individuals from the business community may enroll

in this course for about $1,200. Call 732-445-5816 or check http://www.business.rutgers.edu.

A graduate of Columbia University, Yanker is an attorney with an MBA

who has advised more than 50 global companies and more than 100 entrepreneurs

and artists on how to develop an IP strategy and portfolio of IP assets.

Graduate students from all disciplines — including science, law,

communication, fine arts, and engineering — may take the course.

Entrepreneurs, artists, scientists, engineers, and executives will

be invited to be panelists and participants — through private

interviews — in the course.

Defined as "the art, business, and science of protecting creative

and technological ideas," intellectual property law is an umbrella

term for ways to protect ideas using five tools: trade secrets, copyright,

trademarks, patents, and contracts. With his "global" emphasis,

Yanker will treat intellectual property protection from an entrepreneurial

and creative point of view.

"Book publishers have become the dinosaurs of the media industry

group," says Yanker, pointing to such problems as poorly researched

or edited manuscripts, late or untimely publications, book returns,

lack of multimedia marketing plans, and co-opting by Internet descendants

of the publishing franchise.

"Many publishers and booksellers are not aware of the new ways

they can better protect their products," says Yanker, pointing

out that since the printing press was invented the book publishing

business has remained a predominantly quill and paper industry, plagued

with old-fashioned ways of producing and distributing books.

Yanker will show how to apply the five IP tools to enhance the value

of such publisher contract assets as books and articles. He will show

ways for literary and visual authors, editors, agents, publishers,

and booksellers to develop the ideas that underlie their valuable

assets. These could include the creation of book ideas, the editing

and publication of unpublished manuscripts, and the manual merchandising

of printed and digitally distributed books.

Yanker will cover these intellectual property methods:

Trademarking chapters and book titles;

copyrighting story lines and characters in advance;

protecting the look and feel of book jackets and bookstores;

keeping as trade secrets ideas for books and magazines;

and

patenting the many ways that books are prepared, printed,

sold, and distributed.

In a second area, professional services, Yanker will discuss

how consultants can change from being a "wage or fee slave"

into an asset builder or manager. By neglecting to develop their intellectual

property into idea assets, companies in many professional areas —

advertising agencies, law firms, brokerage and investment houses,

and management and freelance consulting firms — have allowed their

know-how to escape to their competitors and even into the public domain.

"They have become highly paid wage slaves who keep reinventing

the wheel in how they do research and advise clients," Yanker

says.

When knowledge is converted into long-lived business assets, it is

"housed globally," as Yanker puts it, and it can dramatically

improve the company’s net worth. He will show how an agency or public

relations firm can protect its pitches and proposals as trade secrets,

and how law firms can be capitalized as businesses, and how accounting

firms can trademark various service business methods.

"The practical impact on service providers may be that they will

be able to use their professional time in a more savvy way," says

Yanker.

Top Of Page
Business Law:

The State’s Case

Now the entrepreneur, the attorney, and the bureaucrat

can work off the same page. The state’s 94-page book "Doing Business

in New Jersey" can answer all your questions about state regulations

and more. Published last year it is available for $5 by calling 973-353-5950.

Interlaced between the nuts and bolts rules is some good advice. A

chapter on procurement activities, for instance, has more than two

dozen names, addresses, and phone numbers of the agencies you might

need to contact, everything from bonding agencies to agencies that

issue bidding lists. Qualifying as a government contractor still seems

like an onerous task, but at least what you would have to do is all

set out for you.

The chapter on regulations for starting a new business has a sample

business plan outline and lists of "Smart Risks" and "Foolish

Risks."

Among the smart risks: Assess your company’s credit policy carefully.

Realize that some customers won’t pay on time and some won’t pay at

all. Hire people who have different skills, abilities, and characteristics

from you.

Foolish risks: Spend your working capital down to the

last dollar, expecting that people will pay you in time for you to

cover your expenses. Hire people who share your background and ambitions.

Hire a friend’s friend or hire solely on the recommendation of another

person.

Among the more difficult decisions an entrepreneur must make

is how to form the business — as a sole proprietorship, a partnership,

a corporation, or a limited liability company. This book sets for

the advantages and disadvantages for each. For a partnership, for

instance, the advantages include

"*"Ease of formation;

"*"Low start-up costs;

"*"Additional sources of venture capital;

"*"Broader management; and

"*"Limited outside regulation;

Disadvantages of a partnership:

"*"Unlimited personal liability;

"*"Lack of continuity;

"*"Divided authority;

"*"Difficulty in raising more capital;

"*"Difficulty in finding suitable partners;

A partnership agreement, the state’s book confides, might need

to cover some of these points:

Name, purpose, and location.

Duration of the agreement.

Authority and responsibilities (who supervises which employees).

Character of partners (general or limited, active or silent).

Amount to be contributed by each partner at the beginning

and later.

Division of profits and losses, obviously important.

Salaries of each partner, guaranteed or not.

Draw allowed for each partner.

Death of partner agreement, for dissolution and wind-up.

Sale of partnership interest.

Arbitration of disputes (how they will be settled).

Required and prohibited acts.

Absence and disability.

Restrictive covenants.

Buying and selling agreements.

Implicit throughout this book is that New Jersey is a good place

to do business, and with this information the state is certainly an

easier place to be an entrepreneur.


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