The implications of the study are far-reaching and more than a little complex. Since 1978 the number of new employers has been halved, while the number of employers in operation has grown by 5 percent. This means fewer businesses are starting out, but the ones that survive are more successful. The study, using data from the U.S. Census Bureau, also found New Jersey experienced a relatively small decline in employment by new businesses compared with the rest of the country.
]]> The current economy isn't the sole source of decline in new business. The study found the number of start-ups has been decreasing since 1978. This may not necessarily be a bad thing. Older, successful businesses aren't facing competition from new start-ups, and new businesses often provide similar products to the same customers.The decline in fresh businesses is troubling to many, particularly because they are a source of job creation. However, this likely means that existing business are being managed better. This isn't to say new businesses aren't valuable and worthwhile but it highlights the importance of starting out right.
A successful new business in New Jersey can reap the benefits of proper start-up formation for years to come. A business's organization can help facilitate both everyday decision-making and more significant shifts in direction. Some start-ups may even fail because they are not appropriately formed at the beginning. An experienced business lawyer can provide valuable guidance to give a start-up the tools it needs to succeed.
Source: Bloomberg Businessweek, "The silver lining to the drop in startups," Scott Shane, May 8, 2012
]]>Many employment relationships are "at-will," meaning they can be ended at any time by the employer without cause. Some employers, like the government, often make create employment contracts to specify the details of the employment. When these contracts need to be renegotiated, it can often be contentious and threats of a strike may be common. Employers in New Jersey should be aware of the governing state and federal employment laws and how they may affect their ability to hire and retain successful employees and avoid future litigation via contractual enforcement.
]]> The American Federation of Teachers spokesperson said the demands of the state are unfair and the organization is ready to push back. The organization represents more than 360 faculty members and 120 professorial staff members. They are operating under last year's contract because they have been unable to agree and are currently without a contract.The largest issue, according to the union, is the state's push for localized contracts rather than a single agreement between the state and the union. Each institution's president would then negotiate the local contracts.
This would likely give the union far less bargaining power because fewer faculty members would be involved in each contract. For unions, their strength generally lies in numbers so it would be much easier to negotiate with a smaller group.
While negotiations are currently stalled, the parties hope to avoid escalating the issues by coming to an agreement by the end of the summer.
Source: The Times of Trenton, "College of New Jersey professors rally to protest contract dispute," David Karas, April 27, 2012
]]>Enforcement of restrictive covenants in employment contracts can prevent intellectual property theft. However, the task can become more difficult when the ideas are implemented in another country.
]]> Lately the focus of law enforcement in terms of economic espionage has been China. An assistant attorney general says that China is the most "active and persistent" country in terms of stealing secrets. Several recent cases have involved former U.S.-based employees who have returned to their native country only to face charges for their activities -- involving at least for one New Jersey-based company.According to the FBI, some of this is due to a lack of preparation by the firms that are at risk. Companies that are especially vulnerable should have a clear focus on security. But according to the FBI, many companies do not even have a position of chief security officer, for example.
Chinese companies are often public-private ventures, so tracing the involvement of the government is difficult for U.S.-based analysts. However, one scientist who pleaded guilty in his case said that the Chinese government leaned on him with appeals to his sense of nationality and loyalty to his native country.
That kind of pressure can be difficult to combat. But a rigorous in-house security program can go a long way toward preventing espionage and its machinations before thye even begin.
Source: Houston Chronicle, "Costs of economic espionage mount," Dan Freedman, April 27, 2012
]]>The case could have far-reaching effects, including how employers choose to terminate at-will employees. The decision may also lead to an increase in unemployment benefit claims, because even employees that resigned may be eligible.
]]> The court, a panel of New Jersey Superior Court judges, believed there was no difference between firing and requesting resignation. "Even if the employer's action was fully justified from a business standpoint, the fact remains that appellant's separation from his job was employer, rather than employee, initiated," the court said.The employee in the case was asked to resign, effective immediately, after he was unable to go to work for three days because of car problems. The Board of Review found that the employee, not the employer, was responsible for the termination in employment.
According to the review, the employee failed to arrive at work, thus ending the employment. Generally, unemployment benefits are only available for those who lose their employment position through no fault of their own.
However, the employee in this case will receive unemployment benefits because he was asked to resign, effective immediately. If fired, the worker may not have been eligible for unemployment because there was "cause" for the termination. Baseline eligibility for unemployment requires an employee to have worked 20 weeks or have earned $7,300.
The decision gives employers one more consideration when firing an employee. Before this case, requesting a resignation would preclude unemployment benefits but that distinction is now gone. Employers have a strong interest in who receives unemployment benefits because they fund the program through taxes. An experienced employment law attorney can help create sound human resource employment policies to avoid employment litigation.
Source: NJ.com, "Involuntary resignation at issue in employment court decision," Elliot Caroom, April 15, 2012
]]>Aside from the criminal charges, it is likely the employee was violating a contract with his employer. Successful businesses often use restrictive covenants in their employment contracts to prevent current and previous employees from sharing trade secrets, like in this case.
]]> Employers sharing proprietary information with their employees, like the defense contractor, can include non-compete clauses in their contracts. These will prevent employees from working in direct competition with their former employer.If the defense contractor included such clauses in its employment contracts, it may be able to sue the man for breach. Prosecutors for the criminal charges say the man had a computer with hundreds of documents related to his work with precision navigation for the company. Some of these documents were explicitly prohibited for export. In addition, the man was never issued a company laptop or allowed to bring the information outside the facility.
The man allegedly violated the company's security rules by giving the presentation in Shanghai. However, the conference, organized by the Chinese government, listed him as a representative of the company. He supposedly told one company executive he was going on vacation in Chicago.
There is evidence the man knew he was violating the law and company policy. The documents were all marked as sensitive and said they contained "export controlled information." The company also provided training on export-control laws.
Source: NJ.com, "New charge for man accused in trade secrets case," Apr. 5, 2012
]]>AT&T says it has plenty of other employees to cover the positions. A spokesperson for the company said that managers and vendors could step in on a contingency basis. AT&T also reports it has been planning for a work stoppage for two years now.
]]> The union organizing the potential strike has several complaints about the proposed contract. They include a new three-tier pension structure, how much employees are asked to contribute to their healthcare plans, and the number of jobs being sent overseas.AT&T counters that it produces a significant number of jobs that pay well and that its goal is to do whatever it to protect the careers of its employees. The company also said it is committed to reaching a fair deal but one flexible enough to allow it to compete in the industry.
While the contracts involved hundreds of employees, some of the most sensitive contracts are written for individual employees. They not only contain information about salary and benefits, but also many other vital clauses such non-compete agreements and severance plans.
With such high stakes for either side, it seems likely that both AT&T and the union will have expert negotiators to help them work through the contract intricacies. As AT&T certainly knows, an employment contract can have long-lasting effects.
Source: NJ.com, "AT&T union avoids strike as contract talks go on," April 9, 2012
]]>The New Jersey Association of Woman Business Owners is also trying to promote female-owned businesses in the state. Their president said that many female business owners have a hard time getting funding. That doesn't mean, however, that funding is not available for them -- they just need to know where to look. Officials also say that there are scant dollars with which to fund advertising for the initiatives, so astute entrepreneurs can reap the benefits.
]]> The State Small Business Credit Initiative has provided the New Jersey Economic Development Authority with $33.8 million. The line of credit guarantee assistance through the Main Street Business Assistance Program increased from $250,000 to $500,000. The number of Economic Development Agency Premier Lenders also grew from 15 to 44.Other organizations involved to help female entrepreneurs also include the Rutgers University Commercialization Center for Innovative Technologies Rising Tide Capital Inc. and the Latin American Economic Development Association.
It is no wonder the center gets so many questions. Forming a new business is a critical time, regardless of ownership. Formation and registration of limited liability companies or general or limited partnerships all involve a litany of questions and complicated contracts. Sound legal decisions early in a business's existence can reap rewards for many years in a time when more than a few businesses are struggling.
Source: NJBIZ, "Agencies partnering to promote opportunities for female entrepreneurs," Katie Eder, March 27, 2012
]]>This may put the city at risk of litigation over contractual enforcement because the supplier was planning on providing 50 cases of Solo hot drink cups, costing nearly $80 each. This means the supplier is left with almost $4,000 worth of unsold paper cups, not to mention the other paper products.
]]> The city didn't appear concerned about its contractual duties, however. The city council voted down the proposal three times since last November, leaving the paper supplier in limbo. The $42,000 contract included not only included toilet paper but also paper towels, toilet seat covers and drink cups.Although Trenton's city government never approved the deal, it is possible that it might be sued to enforce it anyway. The supplier could argue that it operated on the assumption the contract would be approved by amassing enough paper products to run a city for a year.
Fortunately, the recent crisis was averted when the city agreed to an emergency, short-term contract with the same company that provided the contested contract. Hot drink cups were not in the latest order, though.
The council again rejected the bid on March 14, so the contract could be re-bid. During the crisis, Dyson donated several air hand-dryers so the city may not need as many hand towels in the new contract. As long as the city is going through the trouble, it may also want to reconsider ordering paper coffee cups as well.
Source: The Times of Trenton, "Toilet paper on way to Trenton City Hall," Matt Fair, March 14, 2012
]]>Sheridan also alleges that ABC and Cherry conspired to make it appear the decision to fire her occurred before the dispute with Cherry. An employee on the set of "Desperate Housewives" has come forward claiming he received an email about deleting files detailing Sheridan's termination, but he later deleted the email itself and could remember very few details about it.
]]> Cherry and ABC both explained that Sheridan was terminated because her character, Edie Britt, was killed off for creative reasons. ABC denied destroying any documents and explained the efforts it makes to keep documents. An internal human resources investigation also cleared Cherry of any wrongdoing.Unfortunately, if one looks beyond the celebrity hype, Sheridan's claim appears to be a common story playing out in workplaces across the country. Wrongful termination lawsuits don't just happen in Hollywood over multi-million dollar employment deals. Small businesses in New Jersey can find themselves involved in this type of litigation just as easily if they do not take care to implement and enforce firm, fair human resources policies.
Source: Reuters, "Mistrial declared in 'Desperate Housewives' trial," Piya Sinha-Roy, March 20, 2012
]]>In reopening the facility, the governor has fulfilled his promise to ensure that the emergency care center went back in business. Residents will now face lessened driving times when they are in need of emergency care. It also eases the burden on ambulance services that had increased since the hospital closed in 2007.
]]> The State Health Commissioner's move to approve the reopening has raised some eyebrows. Other medical centers have claimed that it may have a negative effect on their business, and one hospital spokeswoman said her organization was contemplating taking legal action.Lawsuits such as those of competitors can present themselves at any time, and a sound business formation plan would cater to such possibilities. In opening a new business, taking precautions against lawsuits in the form of liability provisions is essential.
Organizational documents could outline how personal assets may be protected from corporate or limited liability. In a new business, decision-making plays an important role, and proper processes need to be outlined for both major and minor decisions.
These foundational documents need to be finalized and drafted clearly at the earliest possible stages of a company's formation. Not only does thorough planning boost possible investments, it also protects the company for years to come.
Source: NJ.com, "State approves reopening of Pascack Valley Hospital in Westwood," S.P. Sullivan, 28 Feb 2012
]]>The suit stems from a process to make titanium dioxide, which is a white pigment with a variety of applications. The man who pleaded guilty worked with the technology while at DuPont, and when he left after his long stint there, went to work as a consultant with the Chinese company, Pangang. The man's consulting company bid on a plant contract offered by Pangang, asserting that it had DuPont's technology.
]]> The penalties for this type of economic espionage are severe: 15 years' imprisonment, a fine of half a million dollars and additional restitution if ordered by a judge. However, the 77-year-old man is now cooperating with the government so his sentence could be reduced.The case has other defendants, including a California businessman and his wife, another former DuPont employee, and the Panang Group, but their charges have not yet been resolved.
DuPont has typically been very guarded with its technology; it long refused to share its technology, either by licensing it or selling it outright, to Chinese companies. The man who pleaded guilty no doubt pledged in writing not to steal or otherwise disseminate the company's trade secrets. After his guilty plea, however, it seems likely that DuPont would seek damages from him for doing just that.
Source: Bloomberg, "Former DuPont Worker Pleads Guilty in Economic Espionage Case," Karen Gullo, Mar. 1, 2012
]]>However, there has been dueling litigation filed by National Surety Corp., the hotel's insurer, and CJM Hospitality over who should bear the cost of the fire -- and where the suit should be heard. CJM Hospitality sued National Surety in New Jersey in December for not making good on its policy; National Surety sued CJM Hospitality in Wyoming in January claiming that the company misrepresented its finances and conspired in fraud and racketeering leading up to the fire, and should get nothing.
]]> The first issue to be decided is where the case will be held. National Surety claims that the case should be held in Wyoming because that's where the fire happened. They have cited 48 witnesses in Wyoming who could testify. The sprinkler system, phone line and fire alarm batteries had all been inspected just days before the fire, but investigators found that all were disconnected when the fire took place.However, CJM Hospitality says none of the owners or managers of the hotel live in Wyoming, and says any evidence from the site would have been moved or handled long ago. Whatever the outcome of the case, each company will want to make sure it has experienced litigators working on its behalf in order to obtain the best possible result.
Source: Casper Star-Tribune, "New Jersey or Wyoming: Hitch owners, insurance company argue about trial location," Tom Morton, Feb. 27, 2012
]]>The Jets lease their training facility in Florham Park from the New Jersey Sports and Exposition Authority, which is a public entity. The lawsuit claims that because of this, the team should be treated as other government entities in terms of its legal obligations.
]]> One of those obligations, according to the suit originally filed in 2010, is that the team should publicly advertise for real estate services it makes available to Jets employees. The judge who dismissed the suit last year said that the suit didn't say that the Jets offered any real estate services to its employees. But the realty company that filed the suit says that new evidence shows that they have.According to court papers filed last week, two former Jets players dealt with a real estate agent who doubled as the team's director of player development. One of the deals was canceled when the player involved was traded to another team.
The suit also says that the team should set aside 7 percent of its contracts to minority owned businesses. The owner of the realty company that filed the suit is African-American. It remains to be seen if the new evidence will sway the judge into determining if the suit now has merit, or how much business it might generate for the realty company behind the lawsuit.
Source: The Star-Ledger, "Morris Plains real estate firm reopens lawsuit against New York Jets," Ben Horowitz, Feb. 16, 2012
]]>Many symptoms of fatigue can potentially lead to safety hazards at a business, including poor judgment, distraction, slower reaction time and loss of awareness in critical situations. But employers may be able to counteract these issues by introducing a fatigue risk management system to their companies.
]]> A fatigue risk management system could include several tactics, including educating employees on fatigue management and training them how to recognize it; collecting information on fatigue hazards; and coming up with a fatigue reporting system for employees.While evaluating fatigue can be a difficult task, its effects are undeniable. According to a report titled "Fatigue Risk Management in the Workplace" from the American College of Occupational and Environmental Medicine, sleep disorders cost employers a whopping $60 billion every year. This is manifested in lost employee productivity, medical expenses and industrial accidents, according to the report.
Employers always need to be on guard against inefficient and/or dangerous situations that could occur at their workplaces. A relatively small investment in fatigue risk management could pay dividends in the long run by making sure that potentially hazardous events with long-term consequences never happen in the first place.
Source: Business Insurance, "Fatigue risk management can improve workplace safety," Roberto Ceniceros, Feb. 13, 2012
]]>It appears that Stewart and her company are trying to get around the language in the 5-year-old contract with Macy's that prevents its items to be offered for sale at one of Macy's competitors. The company's plan is to create specialty stores within J.C. Penney, thus not technically violating the contract. However, this is not satisfactory to Macy's and they filed suit last month to stop the deal from going through.
]]> It may be that J.C. Penney knew a suit was likely and found the business so lucrative that it was willing to cough up money for a settlement in order to attract Stewart. For her part, Stewart would like to give a bump to her company, which has suffered in recent years. J.C. Penney would buy 17 percent of Martha Stewart Living, giving it an up-front infusion of cash.Businesses in New Jersey that are involved with contract disputes are often well served by having the services of an experienced business litigation attorney on their side.
Source: Bloomberg, "Macy's May Settle Suit, Lose Martha Steward Living Brand to Penney: Retail," Cotten Timberlake and Chris Dolmetsch, Feb. 7, 2012
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