It’s Complicated: Limits of At-Will Employment

employee terminationWhat is at will employment?

At will employment is an employment relationship in which you may fire your employee at any time for any reason and your employee may resign at any time for any reason. This is the default employment relationship in Nevada, absent an employment contract with specific terms.

Beyond the simple definition…

As a practical matter, you should not capriciously fire your employees! At will employment does NOT mean that you face no liability if you fire your employee. Numerous federal and state laws and case law protect your employee from a wrongful termination. For example:

Statutory Protections

As an employer, you deal with numerous federal regulations; failure to meet these regulations can also give rise to wrongful termination claims. Termination based on the following non-exclusive list of federal protections would give rise to wrongful termination claims:

  • FMLA-requesting or taking family leave
  • Equal Pay Act of 1963-gender
  • VII of the Civil Rights Act-protected classes
  • Age Discrimination in employment Act of 1964
  • Rehabilitation Act of 1973-disability status
  • Americans with Disabilities Act (ADA)-disability status
  • National Labor Relations Act (NLRA)-union membership

You should consider the liability of firing during the termination procedure. You may not have even thought about the employee’s protected status when making your termination decision, but it is important to ensure there is no miscommunication.

Public Policy Exception

Various state laws and court decisions also eroded the definition of at-will employment due to public policy considerations like…

  • Not following proper termination procedures.
  • Arbitrary firing though employee handbook indicated for cause termination only.
  • Employee’s refusal to commit an illegal act.
  • Retaliation for filing worker’s compensation.
  • Retaliation for whistle blowing (alerting to employer’s illegal acts).

Covenant of Good Faith and Fair Dealing

In extreme cases when the employee proves that the employer acted in bad faith, Nevada courts have awarded employees large damage sums, for example a Las Vegas Hilton executive was awarded $600,000 for her wrongful termination. An employee may also have other tort claims based on defamation, intentional infliction of emotional distress, invasion of privacy, etc.

Better safe than sorry

At will employment does provide you with some freedom in termination decisions. However, it is important to have a proper termination procedure in place to minimize your exposure to future law suits from your disgruntled employees. For more information, read our blog article on best practice termination procedure.

CHANGES TO CHARTER SCHOOL LAWS

schoolhouse 

The 2013 legislative session provided significant changes in the Charter School funding and formation laws. These changes are outlined in Senate Bill 384 (“SB 384”) and make modifications to Nevada Revised Statues Chapter 386. There were many changes, but three changes stand out as most significant.

Incorporation of a Charter School as a Non-Profit Corporation under NRS Chapter 82.

Prior to the modifications to NRS Chapter 386, a charter school was formed pursuant to a grant of a charter by the sponsoring entity resulting in the school operating as a quasi-governmental entity. Prior to this change, Nevada charter schools did not incorporate as non-profit corporations. Effective July 1, 2013, charter schools are now allowed to incorporate as a non-profit corporation under NRS Chapter 82 (NRS 386.553). As part of this change, this will allow charter schools the opportunity to apply as a non-profit corporation for tax-exempt status with the IRS.

The ability for the Board of a charter school to form a limited liability entity is significant. Once the entity is formed there is limited liability for anything that happens in the schools operations and for occurrences on the school property. Further, fundraising may be easier as the school will now be able to provide donors with a determination letter from the IRS that clearly shows its tax-exempt status.

 

Removal of Requirement of Charter School to Provide a Security Interest in the Charter School’s Real Property to the State.

 

Prior to the modifications to NRS Chapter 386, charter schools were required to assign a security interest in all property, buildings, equipment, or facilities to the State which were purchased with money received from the State. Due to the fact that charter schools are State funded, this essentially required a security interest in all real property owned by the school. This requirement resulted in many charter schools forming separate tax-exempt, non-profit corporations as supporting organizations to hold property for the benefit of the school. SB 384 deleted the security interest requirement and now allows for charter schools to own property without providing a security interest to the State. Further, SB 384 now specifically allows a charter school to acquire real property and facilities with public money, provided that sponsor approval is obtained.

 

By allowing charter schools to incorporate and obtain their own tax-exempt status, there is now the possibility of folding any supporting organization into the school’s non-profit corporation to run the school’s operations and hold property. This could result in significant cost savings for the school as the costs of maintaining one entity are significantly less than the costs of maintaining two entities. Further, the board of directors can be consolidated into one governing body resulting in more concise operations.

 

Charter Schools can now Finance the Acquisition/Construction of Real Property by Working with the Nevada Department of Business and Industry to Issue Bonds.

 

Prior to SB 384, charter schools had to go outside of the State to find an issuer to issue bonds and other obligations to finance the acquisition, construction, improvement and restoration of property, buildings and facilities for charter schools. SB 384 authorizes the Nevada Department of Business and Industry to issue such bonds.

 

This means that charter schools are now able to directly own their real property and issue bonds and other obligations for the financing of property purchases. This allows for a simpler financing transaction and allows for the charter school governing body to have full control of its facilities, while also maintaining limited liability for the liabilities associated with the operations and property.

 

 

 

Small Talk, Big Problems: Unexpectedly Dangerous Interview Questions

Employee LawMost professionals think they know how to do a proper interview without a lawyer telling them what to say. Some interviewers often start out with small talk, attempting to build rapport with the interviewees and make them more comfortable. Seemingly innocuous questions during this interview process may present a dangerous liability for the company. They can lead to discrimination or wrongful-discharge lawsuits. Here are some surprisingly problematic questions to show you the dangers of improperly trained interviewers.

 

Here’s what NOT to ask during a job interview:

  • Is it Ms. or Mrs.?
  • Is that your maiden name?
  • Do you have any childcare/caregiver responsibilities?
  • Are you pregnant?
  • What’s the name and address of a relative we can notify in case of an emergency?
  • When did you graduate from high school/college?
  • Where’s that accent from?
  • Are you a citizen?
  • Why are you in a cast?
  • Have you ever been arrested?
  • When did you graduate from high school?

 

All these questions inadvertently hint at one of the federally protected categories for employment purposes. Can you see how each implicates one of these categories? The categories are:

  • Race
  • Color
  • Religion
  • Gender (including pregnancy)
  • National origin and citizenship
  • Age (40 and over)
  • Disability (including perceived disability)
  • Genetic information
  • Veterans, active-duty or application to the uniformed services

 

While some of these questions just cannot be asked, other can be rephrased appropriately:

  • This position requires long and irregular hours are you able to fulfill this essential function of the job?
  • What’s the name and address of a person we can notify in case of an emergency?
  • What schools have you attended?
  • If you are hired, will you be able to submit verification of your legal right to work in the US?
  • Have you ever been convicted of a crime?

 

Developing a standard set of questions to choose from during interviews is a good practice and ensures consistency. You can make sure that the questions do not violate any laws and eliminate potential discrimination claims. If you are uncertain about the legality of an interview activity, contact Drinkwater Law Offices at (775) 828-0800.

Virtual World: Your Trademark and Social Media

global connectivityBenefits of Using Social Media
When you use a social media site, you are no longer the only brand builder. By engaging with consumers on social media sites, you will change the brand either positively and negatively. In general, brand recognition tends to be amplified on social media. Here are some benefits of building your brand through social media:
• Maximizes brand exposure: Trademarks that have secondary meaning associated with them have the strongest protection because consumers clearly perceive the brand as a source indicator. Social media can expedite secondary meaning acquisition.
• Lower marketing costs: The effectiveness of social media campaigns can render other forms of media moot, reducing your marketing costs.
• Search engine optimization: The more popular you are on social media sites, the more prominent your search results online. Notoriety in one online site may serve as a catalyst to increase your popularity in others.
• Humanizes the company: While your brand may present your professional image, your social media site can have an entire persona that humanizes you in the eyes of your consumers. Consistent interaction with your audience can build a loyal following.
• Consumer feedback: You can conduct market research on social media sites to modify your products to better fit consumer needs.
• Business networking: You also have the choice of interacting with other businesses to build your professional image.
Relationship with Social Media Platform
Social media platform agreements are non-negotiable, unilateral contracts that give the social media sites broad rights over your trademark. While social media sites do not necessarily benefit from repelling businesses from exercising its full contractual rights, understanding and adapting to agreement is important. Consider the following aspects of your relationship with the social media site:
• Use of your trademark: Social media sites often allow other users to interact with your posts. For example, Youtube allows users to use, reproduce, distribute, display and perform your uploads and Twitter allows users to use, reproduce, and create derivative works from your uploads. You no longer have exclusive rights to your work on that site, which limits quality control of your brand online.
• Licensing issues: Social media sites are international but you may have a territorial restriction on your use of the trademark through a license. Social media postings may conflict with third party trademark licensing agreements.
• Indemnification: You often have to promise social media sites an arm and a leg to compensate them for any injury you might cause. Know what you are promising before using these sites.
• Unlimited amendments with little or no notice: You promise to allow social media sites to change their policies and procedures at any point for any reason. This change may come with little or no notice to you, but you still have an obligation to abide by these new changes. While social media sites will probably not abuse this right or risk losing business interests, you still need to monitor these changes and respond accordingly.
Relationship with Users
• Inadvertent infringers: In some ways the inadvertent infringers are harder to manage than intentional infringers. There are many fans of your trademark who may not understand the legal ramifications of the improper use of your trademark. You want to maintain a positive relationship and continue to build rapport with your consumers while protecting your trademark rights. For example, two fans of Coca-Cola started a Facebook fan site without the company’s knowledge and accumulated millions of fans; it became one of the most popular sites on Facebook. As the company did not start the page, they had no control over the content or trademark use. Instead of sending a cease and desist, Coca-Cola contacted the fans that started the site and partnered with them to manage the page. It is important to educate your consumers and communicate with them to ensure the proper use of your trademark on social media sites.
• Cyber squatters: Even if you choose not to form a business page for your social media site, you must still monitor these sites for infringers. Imposters may use your business name for their own purposes online and social media sites do not necessarily filter out all imposters. Cyber squatters can do significant damage to your reputation and consumer good will in a relatively short amount of time. You should report such abuse to the social media site or send cease and desist letters to enforce your rights.
Social media can be a great tool for growing your business, but it can also harm it. Connect your trademark lawyer with your social media and marketing staff to ensure that your business is protected.

WHEN WILL YOU NEED TO USE A POWER OF ATTORNEY?

Golden scales of justice on a white background

 

The power of attorney allows you to grant your authority (as the principle) to perform certain tasks to another (the agent). You may grant a general power of attorney that In Nevada, a general power of attorney allows your agent to manage…

 

  • real estate
  • personal property
  • investments
  • financial matters
  • businesses
  • insurance
  • trusts
  • legal claims and litigation
  • personal and family maintenance
  • government benefits
  • retirement plans
  • taxes
  • gifts

In Nevada a power of attorney that does not specify a termination date continues after the principle becomes incapacitated.

An individual may desire to be more limited in the powers that are granted and can do so with a specific power of attorney. Some examples include:

 

  • The power of attorney for the performance of mundane tasks in your stead such as representing you at the DMV, paying utilities, managing your insurance, etc.
  • The power of attorney for limited performance of financial (or other) decisions, which can also be for a limited time frame (such as an extended vacation). This power of attorney may be revoked at any time or for any reason, making it useful for temporary use.
  • The power of attorney which grants powers after a specific event or circumstance has occurred, such as incapacitation. This power of attorney along with an advanced health directive or living will gives you the ability to determine how medical decisions are made on your behalf. When choosing an agent for health care decisions, be sure the person is trustworthy and decisive and will carry out your directions even while in emotional turmoil.
  • The grant of a power of attorney in connection with a will or trust to ensure that your family and business are protected the way you intended.

 

If you think you may need a Power of Attorney, please contact Drinkwater Law Offices.