Is Your Condominium Building Compliant With The Americans With Disabilities Act?

An aging baby-boomer generation and the increasing choice by empty-nesters to lower maintenance responsibilities and move into multi-unit residential buildings pose an interesting question for property managers and condominium board members. As a building’s age demographic increases, does a condominium association have an obligation to make the units or common areas accessible to persons with disabilities? Condominiums and other multi-unit residential developments present unique issues, because the building includes both private dwellings and public places. Some developments even include public commercial spaces as well. Given this dichotomy, building management will have to consider if, and what parts, of the building need to be accessible.

The Americans With Disabilities Act of 1990 (“ADA”) prohibits discrimination on the basis of disability in employment, public services, public accommodations and services operated by private entities and common carriers. However, according to a supplement issued by the U.S. Department of Housing and Urban Development, strictly residential facilities are not covered under Title III of the ADA. What may pose a dilemma for a condominium, though, is that certain common areas, which are located in residential facilities, are considered places of public accommodation in some circumstances. The ADA identifies 12 categories of places of public accommodation:

1. Inns, hotels or places of lodging;
2. Restaurants, bars or establishments serving food and drink;
3. Movie theaters, concert halls or stadiums;
4. Auditoriums, lecture halls or convention centers;
5. Bakers, grocery stores or other sales or rental establishments;
6. Laundromats, dry cleaners, banks, barber shops or other service establishments;
7. Terminals, depots or public transportation stations;
8. Museums, libraries or galleries;
9. Parks, zoos or amusement parks;
10. Nurseries and schools;
11. Day care centers, senior centers or other social service establishments; and
12. Gymnasiums, health spas or places of exercise or recreation.

Depending on the nature of the condominium building, some of these categories of places of public accommodation may be applicable. Property managers and the building’s board must consider the possibility that federal law imposes obligations to provide reasonable accommodations with persons with disabilities, whether residents or members of the general public. This is especially important if a building is considering renovations to common areas or commercial portions of a building.

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Lack of an Exit Plan Equals Dead Company Walking

Part of a series on issues related to Manufacturers, Distributors and International Trade

Ralph Waldo Emerson warns that “rest, conservatism, appropriation, inertia; not newness, not the way onward” are forms of old age which causes people (I submit companies also) to be dead while they are yet alive. Yet, your manufacturing company can grow young again, if you as the leader/owner pursue and embrace strategic planning, innovation, and sustainability.

The root cause hindering such onward movement is frequently caused by a lack of succession/exit strategies for business owners/leaders. The Small Business Administration estimates that at any given time, forty percent of businesses are facing transfer of ownership issues. Without arriving upon a succession plan/exit strategy for the owner/leader, onward is not possible.

Rather, the bitter truth of humanity is realized – we all die and many times we take our companies with us. The familiar aphorism “shirtsleeves to shirtsleeves in three generations” describes the propensity of family-owned businesses to fail by the third generation. In fact, it is estimated that less than one-third of family businesses survive the transition from first to second generation ownership, and only 10 percent remain active for the third generation to lead.

By creating an exit/succession plan, a business owner/leader is forced to consider not only what the business needs today but what is needed for the future. The owner will make hundreds of decisions differently such as: making an S Corporation election; entering into contracts with key employees, distributors, and suppliers; maintaining clean records; developing and incenting a good management team; and/or transferring stock to family members. Without a plan, the business will mostly die due to the lack of necessary investment in leadership and talent, business systems, and “state of the art” equipment.

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Buying a House? A Quick Look at Legal Issues You Should Consider

Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives.

The decision to purchase a home may be one of the biggest financial decisions you will ever make. Chances are, you will be looking at two or three times your annual income in debt, a small forest’s worth of paperwork, and a host of terms and phrases you may not be familiar with. Unfortunately, a misstep or two in your purchase can have serious ramifications on both your home and your investment. This discussion sets forth several legal considerations to keep in mind before you sign the contract.

How Should I Take Title to the Property?

This choice can be pretty easy when you are single – you purchase it and title yourself as the sole owner. The property is yours (subject to the mortgage) and you are free to sell it as you please or have it pass pursuant to estate plan.

However, if you are married or purchase the property with a friend or investor, you will need to title the property differently and different titles may be more appropriate for different marital and financial relationships. For example, a joint tenancy with right of survivorship may be ideal for family situations in which an older family member wants the property to automatically pass to a younger sibling upon death. A tenancy by the entirety, reserved for married couples, can prevent one of the spouse’s individual creditors from reaching the property. Where business partners are purchasing a property, it may be wise to hold title as tenants in common which would allow either partner to freely sell his/her interest in the property without the permission of the partner.

The Basement Is Dry, The Roof Does Not Leak: Seller Representations

Most states require the seller to disclose to you “material” facts which may affect your decision to buy the property. What is “material” may vary from state to state, but typical items for disclosure and warranty address termite or water damage as well as issues relating to appliances, the roof, and sewage systems. Should the seller misrepresent the extent of a known problem or fail to disclose something known to them, you may have a cause of action against the seller for any damages caused thereby. It is important to note, however, that the seller’s disclosure typically only covers known issues. For this reason, it is still strongly suggested that you obtain your own independent property inspection.

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Protecting Against the Overseas Theft of Trade Secrets

Part of a series on issues related to Manufacturers, Distributors and International Trade

The overseas theft of trade secrets is a major concern of companies with business operations outside of the United States. A recent decision by the Court of Appeals for the Federal Circuit provides U.S. companies with a new weapon to protect against trade secret misappropriation that occurs completely outside the United States. While welcome news for U.S. businesses, it is important that they remain vigilant in developing and implementing preventive measures for the international protection of their trade secrets.

In TianRui Group Co., et al. v. ITC et al., 661 F.3d 1322 (Fed Cir. Oct 11, 2011), the U.S. Court of Appeals for the Federal Circuit held that the U.S. International Trade Commission (ITC) has the authority to exclude imports of products into the United States that are manufactured outside the United States using a misappropriated trade secret process, even when the misappropriation occurs outside the United States and there are no goods being manufactured in the U.S. using the protected process.

The Court held that in determining whether a trade secret has been misappropriated, the ITC should apply U.S. federal common law of trade secret misappropriation rather than the law of any particular U.S. state or of the country where the misappropriation occurred. The application of federal common law in actions brought before the ITC involving the overseas theft of trade secrets will make it easier in many cases for U.S. companies to prove the theft of their trade secrets, because proving trade secret misappropriation is generally more difficult under the laws of many other countries.

The holding in TianRui has no bearing on the sale or importation of goods outside the United States that were manufactured using misappropriated trade secrets of a U.S. manufacturer. Consequently, U.S. companies will still need to think globally when adopting trade secret protection measures.

The definition of what constitutes a trade secret and the elements for proving trade secret misappropriation vary from country to country. Additionally, there are regional competition laws that affect trade secret protection. Taking into account these laws when drafting confidentiality and non-compete provision is necessary to ensure trade secret protection and the enforceability of the provisions or agreements. Post-employment restrictive covenants need to be drafted to take into account the relevant statutory and judicial law, because if they are drafted too broadly they will be unenforceable.

In many countries a post-employment non-compete clause is not valid unless there is separate compensation for the restrictive covenant (e.g., China and Germany). In other countries, non-compete agreements are prima facie void on public policy grounds, and therefore, particular care is required when drafting a non-competition agreement in order to ensure that it will be considered reasonable under the applicable country’s laws.

To prove access to confidential information, it is advisable for a company to require written acknowledgement of the receipt of company information from employees, consultants, subcontractors and any other third parties at the time of disclosure, as well as having these individuals sign confidentiality agreements. In some countries, having a signed confidentiality agreement is not sufficient to prove access to a trade secret.

As a result of the decision of the U.S. Court of Appeals for the Federal Circuit in TianRui, U.S. companies have a powerful enforcement mechanism to protect against the imports of competitor products into the United States if the foreign manufacturer engaged in conduct that constitutes an unfair trade practice under U.S. law.

However, when drafting confidentiality agreements, trade secret preventive measures and post-employment restrictive covenants, U.S. companies still need to consider carefully the statutory and judicial laws of the relevant foreign country and region.

Posted by Attorney Marcia S. Orgill. Orgill concentrates her practice in the area of business and personal taxation—especially complex domestic and international tax strategies.

Supreme Court Ruling Protects Religious Organizations from Employment Discrimination Claims

On Wednesday, January 11, 2012, the United States Supreme Court granted victory to religious organizations across the nation by confirming that their First Amendment freedoms insulate churches and schools from certain employment discrimination claims. Some will consider this a landmark decision, and it may be the Court’s most significant church-state ruling in decades. The decision in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC confirmed churches’ and schools’ autonomy to make decisions about whom to hire and fire, when those employees have job duties related to the ministry of the organization.

The Court ruled against an elementary school teacher in her employment discrimination claim against Hosanna-Tabor Evangelical Lutheran Church and School, of Redford, Michigan, holding that the First Amendment protects the school from the reach of anti-discrimination laws, when the claims involve certain employees. The ruling was in line with many lower federal court rulings, but the issue had not previously been presented to the United States Supreme Court.

In the decision, written by Chief Justice John Roberts, the Court confirmed the “ministerial exception” to certain anti-discrimination laws, concluding that the courts could not force the school to reinstate the teacher, Cheryl Perich. Perich claimed she was fired because she pursued a claim under the Americans with Disabilities Act, alleging she suffered from narcolepsy.

While the Supreme Court confirmed the ministerial exception for religious organizations, such as churches and schools, it did not provide a strict test for determining exactly who was considered a “minister” for purposes of the exception. However, the Court’s ruling is clear that the exception applies to a class of employees broader than merely clergy. Perich was an educator, and was responsible for teaching secular courses, in addition to religion class, and she attended chapel with students. However, she had formal religious training and had recently been designated as a “called” teacher of the school, as opposed to a lay or contract employee. Chief Justice Roberts’ opinion is clear that her duties with respect to religious instruction at the school were sufficient for her to fall under the umbrella of the ministerial exception. The Court was further not persuaded that the small amount of time spent by the teacher teaching religion class during her work day was a significant factor, stating “the issue before us, however, is not one that can be resolved with a stopwatch.”

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Pension Underfunding Contributes To Illinois Credit Downgrade

A recent article by the St. Louis Post-Dispatch reports that the Moody’s Credit Agency has downgraded the State of Illinois’ credit rating to A2. The Post-Dispatch reports that this is the lowest mark Moody has given to any state, and, in part, the state’s severe pension underfunding has contributed to this credit problem.

The impetus of the story is new legislation passed by the Illinois legislature which outlaws “double dipping” by union officials. According to the article, union officials allegedly misused the pension system to secure large public pensions based upon short teaching stints and even substitute teaching for as little as a single day. Certainly this kind of abuse, if true, is, or should have been, discouraged by all the players involved, including both the state and the public pension plan trustees.

As highlighted by the rest of the article, Illinois continues to face a significant fiscal and budgetary problem, due to many factors, including public pension liabilities. The author notes that the crisis currently amounts to an $83 billion funding shortfall, resulting in the worst unfunded pension liability in the nation, with only 43% of the long-term pension obligations currently funded. Part of the fault certainly lies with the State of Illinois for its failure to fund in earlier, more prosperous times. If uncorrected, this funding shortfall will continue to cause headaches for Illinois lawmakers and public pension plans alike. Ultimately, if not corrected, the continuing trend could possibly cause personal financial losses to deserving retirees across the state.

While unions and public pension plan officials urge the state to fully fund the pension liabilities, lawmakers continue to evaluate plans for both the temporary and permanent fix to the state’s pension woes. Employees and retirees will be keeping a close eye on these legislative developments, and some options may threaten continued benefits for future and/or existing employees.

As the author of the article correctly points out, any attempt by the Illinois legislature to modify the retirement benefits of existing employees entitled to those pensions will almost certainly raise serious legal and constitutional questions that the Illinois, or perhaps even Federal courts, will ultimately decide.

Posted by Attorney Jeffrey R. Schmitt. Schmitt practices in commercial litigation including banking, real estate, construction, and other matters for individuals and businesses.

Considerations Before Popping the Question: What the Law Has to Say and What You Should Know

Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives.

The state where you reside shapes and defines what marriage is and what it means for you and your fiancée through its laws and licensing requirements. Because these laws and requirements govern very intimate aspects of our lives, they can be emotionally and financially significant. This discussion sets forth several legal considerations to keep in mind as you travel towards the big day.

Living Together Before Marriage

On December 14, 2011, the Pew Research Center released a report concluding that the number of young adults waiting to get married is on the rise. The study also concluded that cohabitation has risen to its highest level in decades. Cohabitation has its benefits; however, it can also have drawbacks.

In the state of Missouri, simply living together does not affect any property either of you own. Upon break up, you are each entitled to your own property. The situation becomes more complicated when you begin purchasing real estate or personal property together or if you pay off each other’s financial obligations. Depending upon the circumstances, a court may require one party to compensate the other. Paying for your share of the fifty dollar rug you purchased together is one thing, but what about your share of that car? Or the house?

Plan on moving to another state? In some states, merely living together can have great implications. Depending on where you live, who you live with, and how you present yourself, you might find it interesting that in the eyes of the state, you might already be characterized as married. Known as a “common-law marriage” and contracted in a handful of states, this type of marriage carries with it the same rights, responsibilities and obligations of a traditional marriage, including those in divorce.

Who Gets the Ring?

You’re a huge Cardinals fan. You find out she has been hiding from you that she is a dyed-in-the-wool Cubs fan and don’t think you can ever forgive her. The engagement is off. Now what? What about that ring you saved for months to buy her?

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Four Points to Follow When Your Lease Term is Ending

Your lease may be the most important asset of your business. Commercial leases are complex transactions and should not be taken lightly.

Following these basic points will make the lease renewal or new lease go smoothly.

1. Know your dates. I have seen many cases where tenants allow their lease renewal deadline to pass or, even worse, have their lease automatically renewed by failing to follow these important deadlines. You should check your lease to see exactly what options you have to renew and the deadline specified in the lease to notify the landlord of your intention to renew. These deadlines are usually strictly enforced by the courts.
2. Start early. You should start your decision process well before the deadline in the lease. The earlier you start, the more time you have to test the market, review potential alternative sites, and make your decision. Many renewal provisions have a market rent adjustment, so you will need to find out what your landlord proposes as “market rent” well in advance of the deadline to give you time to negotiate or to consider alternatives.
3. Consult the experts. You should consult a commercial real estate broker familiar with your type of property to assist you in determining the options available in the market including rent and other terms landlords are providing. They know the market, the players and concessions generally available. Brokers generally work on a commission basis and your landlord will most probably be consulting with his broker so you need to even the playing field. At the same time, you should consult with a real estate attorney so that your attorney will be on board when the lease proposal is made and when you are presented with a lease or renewal document.
4. Carefully review the lease documents. Depending on the type of property, whether construction is contemplated and many other factors, leases are lengthy and complex. Much legalese is involved and terms have meaning and importance that are not apparent to someone not experienced in reviewing and negotiating leases. The lease or renewal document should be carefully reviewed by your attorney and revised to include provisions necessary to protect your interests. Most landlords have lease formats that are not favorable to tenants but landlords are willing to negotiate lease terms especially now when it is still a tenant-oriented market.

If you follow these steps you should be able to navigate the lease renewal minefield. If not, you risk a blow up!

Posted by Attorney Michael J. McKitrick. With over 30 years of hands-on commercial litigation and transactional law experience, McKitrick’s practice encompasses business and transactional advice, commercial real estate matters, and regulatory and practice management guidance for health care professionals. Most of his clients are in the medical, financial services, and manufacturing sectors.

Quick! . . . Mediate That Business Divorce!

One of the officers of a corporate client calls. You note the distress in his voice immediately. He tells you that a dispute has arisen between the major shareholder factions of the company, and he wants you to advise on what he and those in his faction can do to win this. And you can tell he expects you to talk “reason” to the other faction.

But you quickly realize that although for the moment knowledge of the dispute is restricted to people in the company, it will only be a short time before it gets out to the customers, suppliers, banks and others with whom the company does business, threatening the existence of the company.

You should consider recommending the factions mediate the dispute, if possible before litigation is filed.

Advantages of Mediation

Some advantages of mediation are:

No Publicity. No lawsuit is filed. The situation can be kept as confidential as the parties want.

Speed. Trial, or even a hearing for significant injunctive relief, will take months, if not years. And as soon as customers hear there is an internal dispute — and they will — they will take their business elsewhere, to a “stable” competitor. And this risk increases significantly if a lawsuit is filed. A mediation can begin immediately.

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Estate Planning for Young Professionals: Why Considering Your Death is Important Even at this Age

Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives

It’s probably a safe bet that most people in their twenties and thirties have not given much thought to estate planning. Short of a first child or a friend asking if you want life insurance, planning for what will happen when you die probably hasn’t come up and why should it? You’ve got youth and health on your side. Moreover, you probably don’t have a lot of assets at this point.

So why is it important? Planning for the future encompasses much more than where your property goes upon your death. Estate planning can also cover:

• who handles your finances if you are out of town,
• who makes medical decisions for you in the event you become incapacitated, and
• who becomes your guardian if a court declares you incompetent.

With these thoughts in mind, you may want to reflect upon the following considerations:

What Happens to My Assets?

You have more than you think you have. Even if you don’t own a home or a wall safe full of bullion, you still have assets and they need to be distributed somehow and to someone. Consider the following examples: bank accounts, savings accounts, stock, bonds, 401ks, IRAs, other retirement accounts, automobiles, clothes, art, appliances, and furniture. Chances are you have at least one of these things and more than likely you have a few. Maybe you’d like your friend to get your watch or a fund be set aside for your nephew’s college fund. Estate planning assists in sorting out who gets what and when.

What Happens to My Children?

If you have children and are single, chances are you may have spoken with someone about taking care of your children in the event you pass. However, without any sort of document proving these intentions, how will the State know what to do? If you are married with children, your spouse will take on the responsibility, but what if you die at the same time? Or get divorced? Your children’s future should be your decision and not left up to the State or a court system.

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