Articles Tagged with “New Jersey Business lawyers”

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New Home, Construction, For Sale, Buy
In October 2019, the Appellate Division of the Superior Court of New Jersey issued an opinion in the case of Becker v. Ollie Solcum & Son, Inc., examining the enforceability of an arbitration clause in a construction project.  The decision continued the trend in New Jersey of limiting enforcement of arbitration agreements, particularly where one party is a customer.

The case arose from a dispute over a residential construction project. Robert and Catherine Becker entered into a contract with Ollie Slocum & Son, Inc. (“Slocum”) to build a new home for them for $1,850,000.  Under the contract, the project was to be completed in no more than 52 weeks after excavation work started.  Substantial completion was actually about one and a half years late.  The Beckers sued Slocum in the Law Division of the Superior Court of New Jersey over the delay and alleged construction defects including water penetration and deterioration of the outdoor decking, siding, and finishing.

The contract, which contained a clause requiring arbitration of disputes, stated:

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American, Bills, Business, Cheque
In the case of Secretary of United States Department of Labor vs. Bristol Excavating, Inc., the United States Court of Appeals for the Third Circuit, recently issued an important, precedential opinion on when payments by third-parties need to be included by employers in the calculation of their employees’ overtime pay rates.

Bristol Excavating, Inc. (Bristol) is a small excavation contractor.  Bristol was a subcontract for Talisman Energy, Inc., a large producer of natural gas.  Bristol provided Talisman with equipment, labor and services at Talisman’s drilling sites.  Bristol’s employees often worked more than 40 hours per week, and Bristol paid them “overtime,” or one and a half times the regular hourly rate which Bristol normally paid them (“time and a half”) for all the hours they worked over 40 hours in one week.

Talisman offered workers at its sites – not just its own employees – separate bonuses rewarding them for safety, efficiency and productively measured by completion of work.  Bristol’s employees asked Bristol if they could participate.  Bristol agreed, and also agreed to do the administrative work.  This administrative work included paying the bonuses through Bristol’s payroll, and taking out all applicable tax withholdings.  Bristol did not include these bonuses in its calculation for overtime pay for its employees because it was not Bristol’s money with which the employees were being paid.

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One of the most difficult questions in New Jersey Business law concerning the retirement of a business owner is determining the value of the laptop-3175111__340-300x200owner’s share of the business which the remaining owners must pay to buy out his share.  This can be difficult even if the departure itself is on good terms.  The method and amount of the valuation can cause vicious disputes even among friendly partners.  The Chancery Division of the Superior Court of New Jersey in Bergen County recently issued a published decision on this problem in the context of a limited liability company.

Background

In that case, Namerow v. Pediatricare Associates, LLC, four pediatricians were members (owners) of a medical practice named Pediatricare Associates, LLC.  The Amended Operating Agreement which governed valuation of the business upon member retirements provided that:

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justitia-3222265__340-300x190Injunctive Relief

Injunctive relief is an order by a court requiring a party to cease an act, condition or behavior.  It is a powerful tool in New Jersey business law civil cases. An order for injunctive relief is typically referred to as an “injunction.”  A temporary injunction is granted only after a hearing, and a permanent injunction is granted after the case has been completed.  A temporary restraining order may be granted prior to a hearing in emergency situations.

Where to File

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Types of Contract Damages

In New Jersey business law disputes, there are two broad categories of damages, legal damages and equitable damages.

Briefly, legal damages, or remedies in law, are money damages.  Legal damages are for harms which can be compensated by the payment of money by the party which breached the contract.  In New Jersey contract law, punitive damages are not allowed.  Likewise, attorneys fees cannot be recovered unless the contract provider for it.  Compensatory damages, which are the amount of money needed to make the innocent party whole, may be awarded when they can be proved.  In business disputes these are often lost profits, but may also include other damages such as diminution of value of property.

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The United States Third Circuit Court of Appeals (which hears appeals from the federal district courts in New Jersey, Delaware, Pennsylvania and the United States Virgin Islands) recently had the opportunity to address the state of New Jersey employment law on restrictive covenants in the case of ADP, LLC v. Rafferty.

Background

In the Rafferty case, two ADP employees, Kristi Mork and Nicole Rafferty, agreed to restrictive covenants in exchange for an award of company stock.  Because they were high performing employees, they agreed to restrictions in exchange for the stock award which were more onerous than lower performing  employees were required to agree to.  The restrictions applied whether they quit or were fired.

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Types of Entities Available Under New Jersey Business Law

New Jersey business law offers different options for the forms which business entities can take.  Each has its advantages and disadvantages.  Traditionally, the choices were corporations, partnerships and sole proprietorships.

Corporations are usually chosen, particularly in the context of small businesses, for the protection they provide.  The corporate form erects a shield, known as the “corporate veil,” which protects owners from the debts and liabilities of their business.  So, for example, if the corporation owes a supplier and doesn’t pay, the supplier can recover from the company but not the owners.  Likewise, if someone is injured by the company’s negligence they can only sue the business, not the owners.

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girl-2607176__340-300x240There are many types of medical leave benefits which exist in New Jersey for employees, and they are ever-expanding and evolving. There is the federal Family Medical Leave Act of 1993 (“FMLA”) which allows an employee to take time off from work either for that employee’s own medical issues or to care for a seriously ill family member. The FMLA allows an employee to take up to twelve weeks of unpaid, job-protected leave each year as long as the employer has fifty or more employees.

To supplement this, in 2008 New Jersey enacted the Family Leave Act. That law provided up to six weeks of paid time off for employees to care for sick family members or newborn babies. The FLA did not cover time off for the employee’s own illness (because that is covered by New Jersey’s Temporary Disability Insurance laws (“TDI”)). Still, under the FLA, employees could take 6 weeks off to bond with or care for a family member and their jobs were protected during that period. The employee would receive up to 2/3rds of their normal weekly salary or wages (or approximately 66% of wages), up to a maximum of $650 per week. As with the FMLA, the FLA only applied to employers with fifty or more employees.

For an employee who had to be out for her own medical condition, pregnancy, or disability, that employee could file for TDI benefits. To qualify for TDI, an employee would need to be out of work for a medical reason for more than seven days. TDI benefits provide employees with up to 26 weeks of partial salary replacement. As with the 2008 FLA, the employee could receive up to 2/3rds of her normal wages. However, with TDI, that amount maxes-out at $637 per week.

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macbook-336704__340-300x200The Benefits and Responsibilities of Ownership

Becoming the owner of a business has tremendous advantages:  Owners can rise or fall based on their own merits, and when expenses are paid the remaining profits belong to the owners.  However, there are also disadvantages, such as the risk that the business will lose money, and responsibility for the business’s payroll and debt.  In addition to this stands business owners’ duties to their co-owners, be they partners in a partnership, shareholders in a corporation, or members in a limited liability company.

Under New Jersey business law, owners are placed in a special position of trust vis a vis their fellow owners, and the law thus imposes special responsibilities on them.  These responsibilities are known as “fiduciary duties.”

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Enforceable contracts are the bedrock of a strong economy. If contracts were not enforced, parties could not rely on the other side performing because there would be no remedy if they breached. Therefore, commerce would break down. Enforceable contracts are so important to the economy, in fact, that the freedom to contract is included in both the New Jersey and United States Constitutions. Before a contract can be enforced, however, the parties and the reviewing court must figure out what the contract means. When the terms are clear this normally isn’t a problem. However, when the contract is ambiguous, or even just a part of it is unclear, the question becomes what evidence may be admitted to determine the meaning and intent of the contract.

As I’ve written earlier, New Jersey courts generally adhere to the “parole evidence rule,” which holds that when there is a clear, unambiguous contract, extrinsic, or external, evidence beyond the four walls of the contract is inadmissible to prove what the contract means. However, in New Jersey business law, the exceptions come close to swallowing the rule. Indeed, the New Jersey Supreme Court held as far back as 1953, in the case of Atlantic Northern Airlines v. Schwimmer, that all evidence is relevant if it will assist the trier of fact in determination what the parties to a contract intended and what the contract means – even if that evidence is extrinsic.

The question, then, is what sort of extrinsic evidence is admissible? In the case of commercial contracts, one source of evidence is custom and usage.