Call Us Now! 1-973-228-6786 | pchapman@lumlaw.com

 Power Pages by Mediation.com..

January 2015 Power Pages

Do I Need a Business [Corporate] Attorney?

If you are involved in the running of the business, hiring qualified New Jersey business attorney to assist you with ongoing business needs and more pressing legal matters is extremely valuable. Many business owners simply choose to reach out to an attorney, who may or may not have the level of experience in business related matters and may not be familiar with your business, when there is an important or even critical legal issue at hand; but it actually may be better to form a long-term relationship with someone that you trust well in advance.

There are, however, some serious legal issues that should clue you into the fact that it is better to bond with a qualified business attorney (as well as with a qualified business accountant) before challenges or problems arise. For example, with respect to employment agreements including agreements restricting post-employment competition, “partnering” with another person or business, distributor and sales representation agreements, manufacturing agreements, leasing of real estate, evaluation of your employee handbook and employment practices, terminating employment of at-will employees, requests by employees for a reasonable accommodation allowing them to “telecommute”; presentation to banks in your application for revolving line of credit.

These are complex legal matters that can escalate quickly if you make a mistake on your end. That’s why it’s essential to communicate with a professional as soon as possible so you have appropriate guidance as to your rights and obligations and the better ways of dealing with the issues. You should not assume that you can handle some of these complicated issues on your own, because it may cost you in both time and money; and the attorney with whom you consult should have significant experience in the type of issue.While a business attorney is extremely valuable for the short term needs like handling disputes, you may also benefit from having the ongoing advice from such an individual. When you encounter challenges or simply want to verify the consequences of a possible move in your business, an experienced business attorney can give you insight immediately and give you peace of mind and confidence about your next steps. Whether it’s a short-term crisis or long-term planning, corporate attorneys provide knowledge.

Does the Size of My Business Have an Influence on Mediation Success?

There is a myth out there that only small businesses benefit from dispute mediation, but this is not true. Businesses of all sizes benefit from this form of alternative dispute resolution in which disputing parties meet outside court attempt to create their own agreement.

The reality is that medium size or small businesses, mediation gives business owners an effective litigation alternative. It’s true that for most business owners a serious legal issue puts their very existence at risk. This is why so many business owners choose to hire an attorney immediately when a legal dispute arises. Acting swiftly and in what they believe is their best interest is a common tactic of the business owner who is fearing legal action. Mediation can actually be a more effective and efficient way to manage business disputes.

One of the biggest reasons that you can effectively mitigate your dispute in mediation whether your business is medium size or small has to do with the fact that it can be so easily scheduled. Under the guidance of a New Jersey business mediator, your dispute can be resolved as little as a few meetings. This addresses the business owner’s concern about swiftly managing possible disputes while ensuring that both parties get the opportunity to be heard in a fair and neutral forum.

Simply put, it often doesn’t make sense to divert precious resources and valuable time into litigation when you believe that the issue might be resolved out of court effectively. Many business disputes are a great fit for mediation and choosing to go this route instead of litigation can reduce costs and the time invested in resolving the dispute. Big or small, mediation has applicable benefits for businesses across New Jersey in need of dispute resolution.

Will Filing For Injunctive Relief Help My Partnership Dispute?

Some of the most common business disputes that enter the litigation arena in New Jersey have to do with conflicts between shareholders or limited liability company members (“Partnership Disputes”) Claims of wrongful-sell dealing, breach of fiduciary duty, actions injurious to the conduct of the business can lead to a co-owner requesting an injunction to stop the wrongful conduct, and even to force the wrong-doer to sell his or her shares or membership interest. A once positive business relationship can be seriously impacted by a Partnership Dispute, and knowing the next steps to take can help to limit future problems for a company.

The court may deny requests for injunctive relief if a plaintiff’s damages can be compensated monetarily. In situations where monetary damages can compensate for a plaintiff’s losses, the court is very unlikely to grant an injunction. The purpose of an injunction is to prevent irreparable harm. Irreparable harm cannot be compensated or repaired once it has been carried out. Partnership Disputes can escalate very quickly when there is miscommunication or confusion about behavior. A partner who feels like he or she has been wronged is likely to take the issue to court as soon as possible and this can only serve to further deteriorate business relationships between partners and damage to the conduct of the business.

Your specific legal strategy for managing a Partnership Dispute should be discussed with and executed by an experienced business attorney. Filing for injunctive relief may be appropriate in your case, but it’s also not likely to be successful if monetary damages could cover the losses of the plaintiff. You should always evaluate all the possible options of moving forward with litigation when you have tried to resolve the issue on your own to no avail. Some partnership disputes can be resolved and allow the relationship to return to normal, but others will require planning for how to manage problems when partners go separate ways.

Handling Disability, Death, and Shareholder or Member Departure in Buy-Sell Agreements

There are many critical elements in a successful buy-sell agreement, but there are three factors that you should always address in any basic document. These include how to manage departure, death, disability of shareholders or members. Nearly every closely held business could benefit from a buy-sell agreement and these four elements should always be included.

A business can suffer financially if a person passes away unexpectedly. If a new shareholder or member, like the deceased’s spouse, steps into the business, this can generate even more problems. This is why so many buy-sell agreements outline what will happen in the event of a shareholder’s or member’s death

Disability of a shareholder should also be included in the document. Disability is all too often poorly defined or improperly funded in these agreements, so the document should address both short-term and long-term concerns of a disabled shareholder. A disabled shareholder is likely to expect his or her salary to continue as well as profit-sharing to happen, but a proper agreement will outline the circumstances under which this will unfold.

There’s another element that should be include in a comprehensive buy-sell, and that has to do with loans. More often than not, it’s easy to overlook the influence of loans made to the business that are guaranteed by the principals. A buy-sell should address how these loans are to be treated if a principal guaranteeing them leaves the company voluntarily or involuntarily.

Finally, an appropriate document will also outline what happens if a shareholder or member departs voluntarily. When a shareholder or member leaves a business agreement, his or her interest in the business should in many cases be subject either to a company option to purchase or a required purchase.

The consequence of death, long-term disability and voluntary termination of services to the business should always be addressed included in a New Jersey buy-sell agreement; and as to voluntary termination, in some cases the agreement will provide that the departing shareholder or member sill retains his or her interest in the business.

February 2015 Power Pages

The Fine Balance of Employment Agreements

Employers commonly create finely-detailed employment contracts that seek to cover every possible situation and provide protection and cover for the employer in order to reduce risk.  Reduction of risk when hiring employees can include probationary periods and describing how financial scenarios such as profit sharing or other benefits will be handled in a variety of situations.

 Employment agreements often restrict post-employment competition with the employer.  While such provisions may be reasonable for the protection of the employer, they are frequent causes for employment agreement disputes in New Jersey and elsewhere in the country.  When crafting such agreements, an employer must be mindful of the balance between its interests the employee’s right to make a living and pursue work.

 Trade Secrets and Clients

The purpose of any non-compete provision is to protect the investment of the employer, including 

  • The investment of time and money for the training and equipping the employee
  • The potential loss of customers or clients who induced to follow the employee
  • The unfair and damaging use of confidential information.

 These are important assets and it’s generally deemed reasonable for the employer to take steps to safeguard them.

 Employee Rights

However, the balance between employer interests and employee rights is about more than simply protecting an employer’s interests. To avoid serious employment agreement disputes in New Jersey it’s necessary to craft the non-compete provisions which do not unduly restrict an employee as to the nature of the restricted activities, the duration of the restriction and where the restriction is “territorial”, the size of the territory. The most common employment agreement disputes in New Jersey sees revolve restrictions which are viewed by the Courts too broad in one or more of these elements.

 

March 2015 Power Pages

The Right Time to Call in a New Jersey Business Lawyer is now

Starting a business, in New Jersey or elsewhere, is always an expensive proposition. Start-up costs are probably the most-cited reasons why people hesitate or delay starting their own business, as the amount of money invested can be quite daunting. Unfortunately, this also means that many people attempt to lower the cost of starting a new business by cutting corners in ill-advised ways. One expense that many business owners convince themselves is unnecessary when you are just starting out are the fees associated with a New Jersey business lawyer. The fact is that this expense is actually one of the most justifiable – and most necessary.

Covering Your Bases

Most entrepreneurs are experts in their field: They know the market, the suppliers, the customers, and the best practices for their particular business. Very few of them extend that expertise into the laws governing businesses in the state of New Jersey. That is where a New Jersey business lawyer comes into play: From the very beginning, an experienced and qualified lawyer can help you to ensure you are compliant with all laws and regulations and protected on all fronts.

Services of a New Jersey business lawyer

A qualified New Jersey business lawyer

where there will be two or more shareholders or members of a limited liability company, raise important questions at the outset on the proposed proportions of ownership, functions and compensation
• assure that the foundation documents for the business address the important issues
• review or prepare agreements with employees, sales representative agreement, brokers, distributors, manufacturers, franchisors, and lenders, and review of post-employment non-competition agreements signed by proposed employees with former or present employers
• coordinate with the company’s accountant, insurance advisor and other third-party advisors, such as an intellectual property attorney, employment law attorney, or marketing consultant

The key thing to remember is that attorneys cannot start assisting and protecting your new business until you retain them. Locating and hiring a qualified attorney should be one of the earliest steps taken when forming a business and should in fact be part of the foundation.

Fighting Through Business Disputes in New Jersey

Every business should function in an environment which allows it to operate without distractions, keeps cash flow high, allowing for necessary purchases and payments to be made, and one which keeps the flow of customers coming through the front door, whether that door is physical or virtual.

One of the greatest dangers of business disputes in New Jersey is their potential to ruin that environment and slow down or even stop the business in question from operating smoothly. This can easily turn a bad situation where a dispute is distracting and threatening a business’ future into a worse situation where a dispute is threatening the present. Business disputes in New Jersey can have several immediately negative consequences:

• Loss of cash flow making it difficult to pay suppliers
• Loss of negotiating room as desperation to get things “back to normal” mounts
• Rash decisions based on the mounting pressure

This makes it essential to be able to operate your business in the midst of any dispute.

Strategies for Business as Usual

When engaged in any sort of business dispute in New Jersey, being able to operate your business and keep cash flow high while settling the conflict should be a high priority. Several steps can assist with this goal:

• Having cash reserves in place to help manage sudden spikes in legal fees or to cover slowed receipts
• Hiring a manager to handle on-site operations, freeing you to concentrate on legal proceedings or negotiations
• Having an attorney who holds your trust and thus can handle proceedings on their own

The closer to “business as usual” you can keep your business during a dispute resolution or lawsuit, the stronger your position will be.
Advantages of a New Jersey Distributor Agreement

Becoming a wholesale distributor of a product puts a business owner in the middle of the retail market between the manufacturer and the retail outlet selling to end-users. A distributor is in constant touch with manufacturers and retail outlets, allowing the distributor to learn about new technology trends and consumer buying trends which change the market. A distributor may have information which can lead to recommendations for product upgrades or additional products.

Other Advantages of obtaining a New Jersey distributor agreement

Among the many advantages of a well-negotiated New Jersey distributor agreements are:

• It will clearly define the products you have the right to market and sell
• It will state whether you have exclusive territory or an exclusive type of customer
• It will state whether you retain the right to sell other products or services that do not compete
• It will provide for joint development of a marketing strategy
• the manufacturer will commit to forms of advertising and demonstration support
• the manufacturer will agree to no changes in pricing except upon reasonable advance notice
• the manufacturer’s product liability insurance will name the distributor san additional insured
• Where an exclusive is granted, it will specify a term, conditions for renewals and contain provisions for the consequences of non-renewal, including termination compensation if you have met agreed upon performance goals.

Ensuring Success

In order to ensure that your New Jersey distributor agreement does not contain provisions which are unfair or otherwise inappropriate or omits reasonable provisions for your protection, including what law governs and in what state any mediation, arbitration or law suits must take place.

Business Disputes in New Jersey: What Can a Mediator Really Do?

When you launch and run a business in New Jersey, you are depending on that business for income, for security for your family, for your status in the community and your legacy. We become emotionally involved with our business, it is natural. As a result, when our business comes into conflict – with an employee, a competitor, or a neighbor – we often have an immediate emotional response to the dispute. This leads us to think of litigation, because we have a tendency to think that all business disputes in New Jersey must be handled roughly, with threats and a flurry of countersuits and motions.

The Non-Nuclear Option

Non-binding mediation represents de-escalation, and as such is sometimes perceived as retreat. But the fact is, mediation can be very effective in handling business disputes in New Jersey – more effective and efficient than litigation, in most cases.

For business disputes in New Jersey mediation has several advantages over litigation, whether in the courts or in arbitration:

• Speed: Litigation can sap your business of money and your attention as it stretches out over weeks, months, and even years. Mediation can often be finished in one or two sessions conducted within a month or two of choice of a mediator
• Cost: Mediation is much cheaper, and as a result is generally a good idea to start with, even if you end up in court later.
• Delay: If the dispute is litigated in court and you win, the other side may appeal, thus to cause years before the matter is concluded.
• Avoiding Risk of a Judgment of Award in Arbitration: A mediator does not enter a judgment or grant an award–the mediator “brokers” a settlement.

Litigation of business disputes has a high degree of risk. You can win a case you should lose, lose a case you should win, and if you are seeking a money judgment or defending against one, be badly surprised at the ultimate outcome. Lack of understanding of the business issues and/or poor performance of witnesses and/or an inadequate paper trail can kill your case.

Pop Quiz

So, to review: Mediation does the following for your business in the case of a dispute: Saves you money, saves you time, and offers control. These factors make mediation the best choice in almost every possible situation concerning conflict resolution for you – and your business.

April 2015 Power pages

Taking Care of Your New Jersey Business: Knowing When to Bring In a Corporate Attorney

Starting a business in New Jersey is a big step, one that requires determination and a basic understanding of the laws that will apply to your particular business. Most businesses in New Jersey get off the ground without a New Jersey business lawyer and can often operate for some time without the advice of a retained attorney – filing the basic paperwork to launch your business rarely requires the expertise of a lawyer.

However, part of the key to success for any business is knowing when to take that step and hire a business lawyer in New Jersey. While every business is different (and should hire a lawyer for aspects of the business you do not understand), there are a few common “triggers” that tell you the time has come to retain an attorney for your business.

When to Hire a Lawyer

As a rule, when you reach these milestones in your business it is time to hire attorneys:

  • Incorporating. Launching a business does not always require forming a limited liability company (LLC) or other corporate structure, but if you decide to do so an attorney is often required to manage the complex legal and tax implications of such a step.
  • Filing for patents. Patent law is always shifting, and patent approvals can take years. A qualified attorney is necessary to ensure the process goes as smoothly as possible with the best chance of success.
  • Litigation. When you are sued by someone else, or need to sue another entity to assert your rights or protect your business, it is time o hire a lawyer.
  • Buying or Selling. If you are selling your business or buying another business, an attorney is necessary to ensure everything

_______________________________________________

Business as Usual: Keeping Matters Smooth while Finalizing Business Disputes in New Jersey

When you are in business, in New Jersey or elsewhere, one thing is certain: At some point (most likely at several points) in your business’ operation you will have to deal with disputes. These disputes can range from disagreements with vendors or suppliers, other businesses, or customers. But one of the most common – and most disruptive – disputes that a business can become embroiled in is employment agreement disputes.

The reason the employment agreement disputes New Jersey sees are so disruptive is due to the fact that it is your workers who are involved, the people who you rely on to keep your doors open and your processes moving smoothly. The key to true success when dealing with these sorts of disputes is keeping your operations running smoothly while coming to a final negotiated solution with your employees.

Attorney the Key

In cases where your business is mired in an employment dispute, a New Jersey attorney who has experience with both the applicable employment laws and alternative dispute resolution (ADR) can be invaluable in keeping your business open and running. The goal should always be that your customers and clients not be aware in any way that a dispute is going on. This requires that the involved employees be satisfied that their dispute is being taken seriously, and that they are being heard.

Sometimes simply bringing in an experience attorney is enough to convince employees that you are taking their complaints and concerns seriously. If not, though, having an attorney who knows how to negotiate and navigate the law can keep tempers calm while still defending your interests. It is important to remember that if your business is disrupted by employment agreement disputes, no one wins – least of all the owner.
__________________________________________

Why a New Jersey Distributor Agreement is Vital for Your Business

Distributor agreements in New Jersey can be highly profitable for both parties. On the one hand the supplier sees their goods pushed energetically into a market they had no prior presence in, or an ineffective presence in. On the other, the distributor has access to high-quality and unique products that allow them to quickly establish themselves in a sector of the market without having to develop their own product line. They also often have the advantage of ready-made marketing and promotional materials.

However, when disputes crop up between the two partners in a distributor agreement, all of the accrued benefits are threatened. Years of profitable relationships can be wiped out in a surprisingly fast process, as trust, good will, and accommodations are destroyed by mutual distrust and attacks.

Mediation

In order to preserve those benefits of the distributor agreement, one of the best decisions is often to bring in an experienced New Jersey business disputes mediator. Someone familiar with distributor agreements and the applicable laws as well as alternative dispute resolution (ADR) can be incredibly effective in not only resolving the dispute that is complicating the partnership, but also in preserving the underlying relationship.

And that relationship is where the true value of a distributor agreement lies, and therefore should always be the priority when dispute resolution comes into play. If the relationship is preserved, all the associated benefits will be preserved along with it, and can then be added to in business to come.

When identifying a mediator to help you, it is essential to value experience and find someone who has successfully helped businesses put such disputes behind them. The value of the agreement grows with every passing business day, and preserving it should always be the highest priority.

_____________________________________________

Can a Mediator Really Help with a Business Dispute?

For almost any business, the sales team is the pumping heart. You may be the brains, and there may be plenty of products and services to get out to the waiting market, but your sales people are the people who bridge the gap between you and your customers. That makes the sales representation agreements in New Jersey you prepare and sign some of the most important documents for your business.

That also means that when you have disputes with your sales representatives, it is not just an annoyance – it threatens your entire business. The language in those sales representation agreements is the fundamental structure of your cash flow, and if there are disputes and disagreements about it, your whole business will be effective.

Strategies

So, what can you do when you find yourself in a dispute with sales reps? Many people assume you must be aggressive and attack, litigate, and terminate. But a better solution might be to pursue mediation with your sales representatives.

Can mediation really work? The fact is, mediation not only works, it is actually more effective than more aggressive tactics. Even if you are certain you are in the right, litigation promotes a negative atmosphere not only between you and the active disputants on your sales force, but also between you and every sales rep you employ. They will see themselves in the dispute and take your tactics personally.

When you consider that your response to a dispute will set the tone of the relationship between you and all of your sales reps, it is easy to see that mediation performed by a qualified mediator can be much more effective than an aggressive litigation. And of course if mediation fails despite your best efforts, litigation is still an option.

Remaining 2015 Power Pages

How a New Jersey Business Attorney Can Help Your Business

Operating a business is not always simple. Whether you are trying to decide which business entity structure is most suitable, wondering how to protect your trade name or trade secrets, or grappling with how to settle a business dispute, guidance from a New Jersey business attorney can be a tremendous asset to any business. Having a New Jersey business attorney to turn to for legal business consulting concerning the myriad of mind boggling choices you face as a business owner, can help keep you out of court as well as promote the well-being and success of your company.

There are a variety of legal business formations that can protect your assets as well as your company’s assets. From the very beginning stages of your business venture, a business attorney can be of assistance by advising you on the advantages and disadvantages of different business structures. Depending upon your particular circumstances, you may wish to structure your new business as a sole proprietorship, partnership, corporation, limited liability corporation or limited liability partnership.

Once you get your business up-and-running, you will most certainly be in need of contract drafting and review for any leasing agreements, vendor services and sales contracts. As your business expands, you may need assistance with, distributor and sales representation agreements, manufacturing agreements, independent contractor agreements, employment agreements, and employee handbooks. You may also find yourself needing advice relating to employment or other business disputes that might require litigation.

Legal business consulting focuses primarily on risk avoidance and management, as well as claims resolution, leaving your time free to focus on running your business. It would be well worth it to hire and develop an on-going relationship with a business attorney who can provide you with legal assistance and guidance tailored to your business’ unique needs to help you and your business achieve success.