If you are in a partnership and your partner recently passed away, you may be worried about the future of your company. The Fort Lauderdale business litigation lawyers at the office of Edward J. Jennings, P.A., are prepared to help you deal with this major life event and move on from it in the most effective way possible.

When There is No Partnership Agreement 

If your partnership was solidified with a handshake and a “Cheers”—meaning, there are no official documents proving that a partnership actually existed—the partnership dissolves upon the death of your partner. This does not mean that you do not have a business. Rather, it simply means that your old partnership as a legal entity is no more. If you want to continue business as usual, you would need to sell off assets of your former partnership and use the proceeds to pay off creditors, vendors, and anyone else you owe money to. You would also need to distribute the funds evenly to any other partners and the spouse of the deceased, who was named beneficiary in the will. If the will is in probate, you would need to distribute the funds to the deceased party’s estate for distribution.

Operating without an agreement is risky for several reasons. One such risk develops after a partner passes away. In addition to the partnership dissolving, the partner’s spouse could want his or her money immediately. Most businesses are not in the habit of keeping partners’ capital in a bank account. Instead, they invest in assets, which must be sold in order to come up with each partner’s share of wealth. If the spouse becomes impatient, he or she could sue for speedy recovery, which puts you at a risk of losing more than what is fair.

When There is a Partnership Agreement 

When a partnership agreement does exist, it generally overrides Florida’s laws on the matter. A sound partnership agreement should contain clauses on what should be done in the event of a partner’s death. The contract should specifically address what is to become of a deceased partner’s interests and whether or not an heir can sell those interests to someone else. The covenant should also contain instructions on how to pay out the deceased party’s wealth, how to pay out his or her share, and how to remove his or her name from all partnership documents and agreements.

Agreements pose their own unique risks as well. In addition to the surviving partners being subject to a speedy payment lawsuit, they also run the risk of the deceased partner’s spouse stepping into the now empty partner position. If your agreement has a continuity provision but no language to prevent such a situation, there is nothing that you can do to prevent that from happening. If the spouse has the same business savvy as your partner, you may be fine, but if he or she has no business sense, his or her involvement could pose a serious threat to your company.

Prevent Risks With a Sound Partnership Agreement 

Though there is not much you can do if a partner has recently passed and you either did not have an agreement or did not have a provision in your agreement regarding what to do in the event of a death, you can prevent death-related issues by working with a Fort Lauderdale business litigation lawyer from the moment you decide to go into business with another individual. Whatever your situation may be, reach out to the team at the office of Edward J. Jennings, P.A., to discuss your legal options today.

Resource:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0600-0699/0620/Sections/0620.1603.html

Copying a client list, saving it to an external hard drive, printing it, or emailing it to oneself is essentially stealing. In Florida, a former employer can get into even more trouble for taking a client list, as non-competes are enforceable, and a client list is physical evidence of a breach of a non-compete covenant. If you discovered that a previous or soon-to-be previous employee has wrongfully copied a client list, you have legal rights. Reach out to the Fort Lauderdale business litigation lawyers at the office of Edward J. Jennings, P.A., to discuss those rights and possible remedies.

Laws You May Fall Back On 

When a person steals a client list, he or she is in violation of several of Florida’s laws. Some laws that may protect you and your right to your clients include:

• Conversion: Conversion refers to the wrongful use of someone’s property that is not your own and that deprives the owner possession or ownership rights. Thanks to a precedent set by Alex Hofrichter, P.A. v. Zuckerman & Venditti, 710 So. 2d 127, 129 (Fla. 3d DCA 1998), conversion claims are independent from a breach of contract claim, which means that a former employee may be sued for both conversion and breach of contract, amongst other things.
• Tortious Interference: Tortious interference refers to intentional misconduct in which a person knowingly interferes with a contract or soon-to-be contract between one person or entity and another person or entity. For instance, if your company was on the verge of closing a deal with a major client but your former employee called them up and convinced said client to utilize his or her new company’s services instead, they would be guilty of tortious interference.
• Misappropriation of Trade Secrets: Trade secrets are not just formulas and ingredients that a company uses to make a product. Under Florida law, trade secrets are any “formula, pattern, compilation, program, device, method, technique, or process that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” If the court determines that your client list is a trade secret, your former employer may be sued for the misappropriation of it.
• Breach of Contract: If you require all employees or even just the one to sign a non-compete agreement, you may be able to sue for breach of contract, as Florida is one of the few states to enforce non-competes (Florida Statute 542.335). Stealing a client list with the intent of retaining the clients under a new organization is a prime example of competition, no matter how you look at it.

If you discover that a former employee has stolen your client list, do not wait until clients begin to leave your business to take action. Time is of the essence, so reach out to your local attorney regarding your legal options.

Retain the Help of a Fort Lauderdale Business Litigation Lawyer 

Client lists belong to the company under which the clients were obtained, end of story. If you discover that your client lists are being used by a person outside of your company or by an employee who intends to leave your company, call the office of Edward J. Jennings, P.A., right away. Our Fort Lauderdale business litigation attorneys can help you explore your legal options and enforce your rights.

Resources:

5dca.org/opinions/Opin2002/012802/5D01-1005.op.pdf

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0500-0599/0542/Sections/0542.335.html

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0688/0688.html

americanbar.org/publications/young_lawyer_home/young_lawyer_archive/yld_tyl_aug07_ramey.html

If you signed a non-compete with your employer and want to know what that means for your future, seek the advice of a knowledgeable Fort Lauderdale contract attorney. So long as you do not do anything overtly competitive, you likely have nothing to worry about. However, if you do something like assume a role with a competitor that is similar to or the same as your last position within weeks of ending your previous work relationship, you may have an issue. To better understand what a non-compete means for you, reach out to the business litigation team at the office of Edward J. Jennings, P.A., today.

Florida’s Non-Compete Clause Can Control Competition 

Florida law is a bit different than other states in that it allows employers to protect themselves with non-compete clauses. Any employer in any industry can require employees to sign non-compete contracts. Unfortunately, while this measure protects employers, it can hurt the livelihood of employees, as the impact on an employee’s livelihood has no effect on the enforceability of a non-compete clause. In other words, if a person signs a non-compete and either quits his or her position or gets fired, he or she cannot pursue similar employment elsewhere. For this reason, you should never sign a non-compete agreement without fully understanding what you are agreeing to. Additionally, if an employer values your skill and knowledge enough to safeguard it, negotiate terms in your employment contract that protects you from termination and/or that provides for non-compete contingencies.

Enforcing Non-Compete Agreements in Florida 

Though non-competes are enforceable, enforceability is not automatic. If an employer wants to enact the terms of the agreement, he or she must be able to justify the non-compete provision by proving the existence of one or more legitimate business interests. Florida law defines legitimate business interests as some of the following:

• Trade secrets;
• Client or customer goodwill;
• Noteworthy relationships with customers or clients;
• Valuable or confidential information (not including trade secrets); and
• Specialized training.

Moreover, the agreement must be in writing and signed by both the employer and employee. If an employer can prove the existence of one or more legitimate business interests but cannot provide a signed document, the employee is free to do as she wills.

If You Signed a Non-Compete, Contact a Fort Lauderdale Business Litigation Lawyer 

Even if you do not believe that your employer has a legitimate reason for wanting to enforce a non-compete, you should consult with a Fort Lauderdale business litigation attorney before assuming employment with a competitor. Though your livelihood may be at stake, you stand to lose more if you violate the terms of a non-compete agreement. To learn more about your rights, contact the office of Edward J. Jennings, P.A. today.

Resource:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0500-0599/0542/Sections/0542.335.html

Ensuring an Efficient Investigation 

Businesses face several hurdles when attempting to complete a merger. One such hurdle is complying with data requests from whatever investigative agency is charged with approving the acquisition. Before a merger can be approved, either the Federal Trade Commission or the Department of Justice will review the information presented by the company that proposed the merger in the first place. Not only must the data be complete, accurate, and relevant, but also, there is a certain way in which the business must go about presenting the requested information. Guidelines for data best practices can be found on the Federal Trade Commission’s website. Even when done right, the data collection and submission process can be lengthy and expensive; however, when done wrong, it is exponentially more so. Fortunately, there are some things that you can do to make the process as efficient and cost effective as possible.

For one, you can interact early on with the investigative agency. The goal of an early interaction is to determine what type of information will best serve the agency’s purposes, how suitable the existing information is for the agency’s purposes, how the data should be delivered, and in what form. Without an early interaction, businesses risk going through the lengthy data mining and reporting process once only to have to do it all over again.

In addition to interacting early on with the investigative agency, business owners should appoint a person or team of persons who will be responsible for communicating with the agency. This person or team should be knowledgeable on the information and be able to answer any question the agency throws his or her way regarding the merger. This person should also be prepared to maintain an open line of communication with the agency, as requests may change after the initial meeting.

Work With a Knowledgeable Business Litigation Lawyer 

Of course, there is much more to the merger and acquisition process than what we talked about above. We will continue discussing how you can make the merger review process more efficient in our next post, which will look at how your data should be organized and what information should be included to best assist the agency that is assisting you. To make the process as efficient as possible, retain the help of a Fort Lauderdale business litigation attorney. At the office of Edward J. Jennings, P.A., we are in the business of helping Florida businesses save time, money, and headache on common business issues. To schedule an appointment with one of our attorneys today, call our office or contact us online.

Resource:

ftc.gov/about-ftc/bureaus-offices/bureau-economics/best-practices

Misclassifying an employee as an independent contractor—whether done intentionally or not—can have serious consequences for the business. To avoid such consequences, you need to be aware of applicable state and federal regulations regarding employee classification. Though this post is intended to make you aware of some of those, your best bet would be to consult directly with a Fort Lauderdale business attorney if you have any doubt about whether or not your independent contractors are really “independent contractors.”

Consequences of Misclassifying Employees 

Companies that misclassify employees are looking at consequences not just from the IRS, but from the U.S. Department of Labor and state agencies. Though this list is not exhaustive, it should give you an idea of what type of violations you may be guilty of by wrongly categorizing an employee as an independent contractor:

• Tax penalties;
• Wage law violations;
• Workers’ compensation violations;
• I-9 violations;
• Anti-discrimination violations;
• FMLA violations;
• Warn Act violations;
• Age discrimination liability;
• Unemployment insurance shortfalls; and
• Improper exclusion from benefits plans.

To avoid making any of the above violations, you need to understand what and what does not make an independent contractor.

Florida Worker Classification Guidelines 

Florida’s laws regarding what and what does not make an independent contractor can be found in Florida Statute 440.02. Before we list the criteria for what makes a 1099 worker, you should first know that, according to subsection (15)(c)2., “all persons who are being paid by a construction contractor as a subcontractor” are considered employees, as are independent contractors and sole proprietors performing work within the construction industry. Aside from within the construction industry, however, at least four of the following six criteria must be met in order for a worker to be properly classified as an independent contractor:

1. The individual owns and operates his or her own business and has a work facility, equipment, materials, vehicles, and other similar accommodations;
2. The individual either has or has applied for a federal identification number, unless he or she is a sole proprietor;
3. Any money owed to the individual for services rendered is paid to the business rather than the independent contractor;
4. The individual holds one or more bank accounts in the business’s name for the purpose of paying business expenses;
5. The individual is free to perform work for whichever entities in addition to or besides the employer without having to complete an employment application or process; and/or
6. The individual is paid on a per-assignment basis rather than on an hourly basis.
   

If any of your workers meet four or more of the above criteria, they can be classified as independent contractors so long as your contract with them does not expressly state that an employment relationship exists.

If four of the six criteria are not met, an individual may still be classified as an independent contractor based on the nature of the individual situation with regard to meeting any of the following conditions:

1. The individual agrees to perform work for a specified amount of money and controls the means through which the work is performed;
2. The individual is responsible for the satisfactory completion of the work that he or she agrees to take on;
3. The individual incurs the main expenses related to the service or work that he or she agrees to take on;
4. The individual has continuing business liabilities or obligations;
5. The individual receives compensation for work or services rendered on a per assignment basis or for a commission; and/or
6. The individual is prone to profits and losses as any other business is.
   

Of course, every situation varies, and even if an individual meets several of the aforementioned criteria, your contract wording may make them an employee. For this reason, you should never enter an agreement with an individual contractor without first consulting with your Fort Lauderdale business litigation lawyer about the terms of employment, the nature of your proposed relationship, and your contract with them.

Save yourself unnecessary headache in the future, and contact Edward J. Jennings, P.A. to schedule a consultation today.

Resource:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0440/Sections/0440.02.html

If you left a company to advance your career only to be rewarded with a lawsuit, you may be feeling discouraged and overwhelmed. While that is completely understandable, know that you are not powerless. The Fort Lauderdale business litigation attorneys at the office of Edward J. Jennings, P.A., have helped countless business owners and former employees alike resolve issues dealing with non-compete agreements. If you want to know what your rights are as a former employee, contact our firm today.

TransUnion Risk and Alternative Data Solutions, Inc. v. Surya Challa 

This case is a classic example of a previous employer suing preemptively. In this case, Transunion filed a motion to have an injunction placed against one of the company’s previous employees, who was hired on by a competing data fusion corporation. In its claim, TransUnion asserted that the employee possessed proprietary information which, if leaked to his new employer, could cause irreparable injury to the company. TransUnion testified that it understood that it was unlikely that the former worker would actually disclose the company’s confidential information, and that as of yet, there was no sign that disclosure was imminent. Yet, like many employers, it was taking precautionary measures. The court decided that although there was the presupposition of injury, no harm had actually been done, and so therefore, an injunction was not necessary.

TransUnion appealed the trial court’s decision, but the appellate court upheld the lower court’s findings. In making its decision, the appellate court referred to the defendant’s testimony from the first trial in which he explained that his new job role was vastly different than his previous one, and that he had no use for the information he held.

The trial court found the defendant to be credible, but before it came to a decision, it turned to witnesses. Several witness testimonies attested to the fact that the industry evolves at a rapid rate and that the trademarked information that may have been useful when the employee still worked for the company would likely become irrelevant in the near future. By the time the appellate court reviewed those testimonies, it had already been 14 months.

You Have Rights, and a Fort Lauderdale Business Litigation Attorney Can Help You Assert Them

As demonstrated in the TransUnion case, it is not uncommon for former employers to try to preserve their trade secrets by requesting an injunction before harm has actually occurred. Unfortunately, though those employers only want to protect their livelihood, they do not realize that by acting prematurely, they risk ruining someone else’s.

Whether you signed a non-compete agreement or possess proprietary information, you may discover that leaving your former company in pursuit of loftier career opportunities may result in a lawsuit. If your former employer attempts to place an injunction on you because of the “presumption of injury,” it is your job to show absence of injury. Our Fort Lauderdale business litigation attorneys at the office of Edward J. Jennings, P.A., can help you do that.

Remember, it may be your career on the line, so do not hesitate, and reach out to our firm today.

What Constitutes Intellectual Property? 

Intellectual property can come in many forms and may include everything from your brand’s logo to a secret recipe. However, when dealing with an intellectual property infringement lawsuit, your property will likely be categorized in one of three ways:

• Copyrights: Copyrighted items may include paintings, photographs, software, music, photographs, or other forms of artwork.
• Trademarks: Trademarks may be put on written content, designs, and symbols that are meant to distinguish one product from another.
• Trade Secrets: Trade secrets are often the most valuable form of intellectual property, as they are what allow businesses to distinguish themselves from competitors and to retain a competitive edge. Trade secrets generally information not known by others.

Intellectual Property Violations and Your Rights 

Your legal rights may vary depending on what type of intellectual property was stolen. For instance, if one of your copyrighted photographs was stolen, a painting reproduced, or software code replicated and distributed for profit without your knowledge, you may have a case of copyright infringement. You may also have a case of copyright infringement if your work was displayed or used in production without your express consent. If you own a trademark and suspect that another company has used the same or similar trademark on a similar product, you may have a case of trademark infringement.

It is particularly important that you understand your rights in the event that a trade secret is stolen and used for monetary gain. If you suspect that a company trade secret has been leaked and used for monetary benefit without your consent, you may sue the offending party for misappropriation. If found guilty, said party may be forced to pay for the actual loss caused by misappropriation as well as the undue enrichment caused by misappropriation. If it can be proved that the misappropriation was done with malicious intent, the court may award additional damages that may not exceed twice the award amount (Florida Statutes 688.004).

What to Do if You Suspect Intellectual Property Theft 

If you suspect that another person or entity has violated your copyright or trademark, or if you believe that a trade secret has been stolen and used without your consent, you have your work cut out for you. Proving intellectual property theft is not always easy, but your efforts will pay off when you are able to prove theft and recover compensation for your damages. Some things that you can do to prove intellectual property theft include:

• Document the type of theft and when you first noticed it;
• Gather proof in the form of screenshots, samples of copied information, contracts, and non-disclosure agreements; and
• Keep a detailed account of how the infringement is affecting you monetarily, as without proven damages, you do not have a case.

At the office of Edward J. Jennings, P.A., our business litigation attorneys can help you determine whether or not infringement has occurred, and if it has, advise you on what you need to do next to obtain justice. If you suspect that your intellectual property has been stolen, reach out to our firm today. Call our office or schedule a consultation online.

Resource:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0688/0688.html

Classic Ponzi Scheme, 2.0 

This most recent scheme was put together by Robert Shapiro of Sherman Oaks, California, and the Woodbridge Group of Companies. Together, the entities operated under a typical Ponzi scheme model—they continually used new investment money to pay back old investors—but that was not all they did. According to reports, Shapiro had ownership interest in many of the supposed third-party companies. So, not only was he paying back investors with new investors’ money, but also, he was scamming people into investing in his own companies. Charles Ponzi would have been proud. In the end, Shapiro had approximately $21 million to his own name.

Apparently, Woodbridge claimed to make its millions off of offering short term loans to parties interested in funding commercial properties. Investors were promised an annual return rate slightly lower than those associated with the loans. The problem was that all but a few of the “borrowers” were companies owned by Shapiro, who had zero income to speak of and who had never paid interest on any of his loans. To keep the scheme alive, Shapiro and Woodbridge paid out $6.45 million of investor money to sales representatives, who were told to sell the investments as “low risk.”

Because he had no money, Shapiro used new investor money to pay the returns owed to old investors, essentially creating the “business model” we know as the Ponzi scheme. Despite the fact that he didn’t generate an honest income, Shapiro and his family lived a life of luxury in which they drove luxury automobiles, wore fine clothing and jewelry, went on extravagant vacations, and dined on fine wine and lobster tail.

The scheme came to an abrupt end in December, and while Shapiro and associates now face several legal claims, 8,400 elderly investors are out of their life savings.

Florida Law Regarding Pyramid Schemes 

There are many state and federal laws in place to protect consumers against pyramid schemes. Florida uses the “Deceptive and Unfair Trade Practices Act” and state criminal codes to protect consumers. This act prevents “business owners” from “using a chain referral sales technique to get a consumer to purchase a product or service over $100 and is promised money or commission to recruit more members.” Violators face felony or misdemeanor charges, and may be subject to prison time, probation, fines, restitution, injunction, freezing of business assets, community service, or revocation of business license, depending on the nature and size of the scheme.

At the office of Edward J. Jennings, P.A., our Fort Lauderdale business litigation attorneys are wholly familiar with state and federal laws regarding fair trade practices and work to help businesses remain in compliance with said laws. Whether you’re a business owner or an investor, our lawyers can help you understand your rights and ensure that whatever business dealings you are involved in are fair, legal, and just. If you want to speak with an experienced attorney, call our office or schedule a consultation online today.

Resource:

miamiherald.com/news/local/crime/article191134004.html

While there are several different factors that can lead to the dropping of the veil, there are a few things you and your corporation can do to raise a red flag. Those things are the following:

Committing Fraud or a Wrongdoing Against a Third Party 

The most surefire way to face personal liability for an act committed by the “corporation” is to commit fraud or perform a wrongdoing against a third party. When a person files a complaint against the company and its owners, it is usually because of the willful and morally wrong acts on behalf of the owners. For instance, if company XYZ racked up outstanding credit card debt, closed its doors, and then started company ABC, which was eerily similar in nature and offerings as XYZ, creditors might seek restitution from the owners themselves, citing fraud as its reason for doing so.

An example of how this might play out can be found in Broward Marine, Inc. v. S/V Zeus, in which the corporation’s dominant shareholder was found directly responsible for the default mortgage payments on a yacht. It was discovered that the dominant shareholder closed his yacht company and then moved all of the business’s assets to other entities controlled the by company’s sole shareholder. The court’s found that the shareholder did so to defraud the plaintiff and held him accountable for the judgement on the default yacht.

Failure for Owners to Separate Personal and Corporate Assets and Funds 

This happens when the owner or owners of a company form a legal entity for the business but continue to use their own personal checking accounts or use the business’s assets and funds as if they were personal assets. This type of intertwinement becomes an issue when there are multiple shareholders and owners involved, or when a person forms a company so as to avoid liability for personal debt. If it is believed that the sole purpose of a business is to defraud creditors, the owner or owners could be held liable for fraud. To prevent this, owners and shareholders of corporations, LLCs, or any other business entity should avoid commingling business and personal funds and assets.

Failure to Adhere to Corporate Formalities 

Though following all corporate formalities is not a requirement for business owners in Florida, failure to do so could leave owners, shareholders, and board members open to liability. In cases where formalities were not strictly adhered to, the courts have ruled that the legal liability protection of members was waived as a result of their “decision to waive formalities,” making the personal assets of owners and shareholders available to claimants. 

How a Fort Lauderdale Business Litigation Lawyer Can Help Keep the Veil Intact 

At the office of Edward J. Jennings, P.A., our attorneys can help you implement the processes and procedures necessary to avoid legal liability—both in a personal and a professional sense. To retain the help of a knowledgeable business litigation lawyer, call our office today or schedule a consultation online.

Resource:

scholar.google.com/scholar_case?q=Broward+Marine,+Inc.+v.+S/V+Zeus&hl=en&as_sdt=40006&case=5381725887774071597&scilh=0

Unfortunately, some business minds feel compelled to cheat to make their way to the top. Though there are many ways they can do this, one of which is to interfere with a contract between one competitor and another. This is referred to as “tortious interference,” and if it happens, the competitor who was interfered with can file a tortious interference claim.

Competition laws in Florida are pretty strict, and unlike most other states, it still upholds non-compete agreements. With that in mind, a tortious interference claim can likely end up in hefty fines and a significant judgement for the defendant. If you believe that a competitor wrongly interfered with a contract between you and another competitor, reach out to the Fort Lauderdale business litigation attorneys at the offices of Edward J. Jennings, P.A. to learn more about your legal options.

Proving Tortious Interference 

As with most civil claims, the burden of proof rests with the plaintiff. As the person making the claim, you have to show the judge why you believe the defendant was guilty of tortious interference and how said interference negatively affected your bottom line. In order to prevail, you must be able to show the following to be true:

• A valid contract existed between and you the claimed third party:
• The defendant was aware that a contract existed;
• The defendant acted with the intent to get the other party to breach their agreement with you;
• The defendant acted without any legal justification whatsoever;
• Damages were sustained as a result of the defendant’s actions; and
• That the defendant’s actions caused the breach of contract.
  

The interference does not have to be with the contract in its entirety; a plaintiff can still have a case even if a single contractual provision was purposefully violated.

Damages Awarded in a Successful Tortious Interference Claim 

If you are successful in your claim, you stand to gain any money lost as a result of the defendant’s actions. Unlike with personal injury claims, damages are strictly economic in these types of claim and are calculated based on how much you reasonably lost as a result of the defendant’s actions.

Retain the Help of an Aggressive Business Litigation Lawyer 

If a competitor sabotaged your agreement with another competitor, and if you lost money as a result, you have rights. Reach out to the Fort Lauderdale business litigation attorneys at the office of Edward J. Jennings, P.A. to learn what those rights are and how you can uphold them. Schedule your consultation online to get started.

Resource:

americanbar.org/publications/young_lawyer_home/young_lawyer_archive/yld_tyl_aug07_ramey.html