June 21, 2015

Editor's Message: June 2015

Dear Young Lawyers Section Members:

Welcome to the June Issue of Electronically In Touch (EIT), the e-publication of the NYSBA Young Lawyers Section (YLS).

This month the YLS welcomed the new Executive Committee which is lead by Erica Hines as Chair, Erin Flynn as Chair-Elect, John Christopher as Treasurer and Terrence Tarver as Secretary. I would like to thank Tyear Middleton, Managing Editor 2014 - 2015 for all of her help with EIT. She will continue serving the YLS as Second District Co-Representative and Chairperson of the Diversity Committee. Congratulations to the new Officers, District Representatives, Committee Chairs and Section Liaisons!

In this issue of EIT we cover the 2015 Supreme Court Admissions program held on June 15th in Washington D.C. and the YLS' Upcoming Events. We also have articles covering labor law and advising for start-ups by Robert W. Berbenich, Nicholas M. Herubin and Emily A. Georgiades.

Electronically In Touch is a member driven publication and as such we welcome submissions from members on any relevant topic including practice tips, substantive legal articles, case updates, work/life balance, and information regarding upcoming meetings and events. Please submit articles by the 28th of each month to Kara Buonanno at kara.buonanno@gmail.com.

The Officers of YLS and the Editor of Electronically In Touch also wish to make clear that the thoughts and opinions expressed in the articles that follow are those of the respective authors alone, and do not represent the opinions of the NYSBA Young Lawyers Section, or its Officers or Executive Committee.

Kara Buonanno, Esq.
Editor-in-Chief, Electronically In Touch

Message from 2015-2016 Chair Erica M. Hines

Welcome to the June edition of Electronically In Touch! I am proud and delighted to have taken the reins this month in leading the Young Lawyers Section (YLS). The YLS is one of the largest and most diverse sections of the New York State Bar Association. It benefits from a wealth of energetic commitment from its members, who keep active year round with various programs throughout the state. It has also benefited from outstanding leadership, including our immediate past-Chair Sarah Gold, whose unwavering dedication and commitment saw the Section through a fantastic year for 2014-2015. Thank you Sarah, for all of your amazing leadership and guidance! (She's not done yet, she will be co-chairing our 2016 Trial Academy with Chair-Elect Erin Flynn - stay tuned!).

We expect this year to be a busy one. We just held our first Executive Committee meeting of my term on June 14, 2015 in Washington, D.C. The next day the YLS held our annual Supreme Court Admission Program. We were so pleased that NYSBA President David P. Miranda was able to join the YLS for the Program, and he seamlessly moved the admission of sixteen NYSBA members into the Bar of the Supreme Court of the United States. Following the admission, our group was met by Justice Ruth Bader Ginsberg, then we celebrated the newly admitted with a champagne brunch. Congratulations to all attendees!

This summer will feature various YLS district networking events across the state. Please check our website, www.nysba.org/yls, to keep apprised of upcoming events - we hope that you will join us for some! In the meantime, I hope that everyone has a lovely summer - enjoy the rest of the EIT issue!

Supreme Court Admissions Program

Congratulations to the 2015 YLS Supreme Court Admittees! They were admitted to the United States Supreme Court on Monday, June 15th. Justice Ruth Bader Ginsburg congratulated the group privately after the ceremony. If you are interested in applying for the 2016 program, which will be held on June 13, 2016, please contact Megan O'Toole at motoole@nysba.org. More details will be available this fall.

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Upcoming Events

The Antitrust Section presents its Summer Merger Program

Wednesday, July 8, 2015

731 Lexington Avenue
New York, NY

This event is co-sponsored by Bloomberg, the International Committee of the Canadian Bar Association's Competition Law Section, the International Section of the New York State Bar Association, the Young Lawyers Section of the New York State Bar Association and the New York State Bar Foundation.

The program will consist of a timely discussion by competition agency officials at the EU, Canada, FTC, and U.S Department of Justice on the topics of merger remedies, merger retrospectives, and multijurisdictional coordination at the remedies stage. 1.0 MCLE credit.

* Patricia Brink, Director of Civil Enforcement, DOJ
* Ann Wallwork, Senior Deputy Commissioner, Merger Branch, Competition Bureau in Canada
* Naomi Licker, Attorney, FTC Compliance Section
* Julia Brockhoff, Deputy Head of Unit at European Commission's Unit A-2-Merger Case Support and Policy

Moderator: Ilene Knable Gotts, Wachtell Lipton Rosen & Katz

Register today by emailing Michael Galvin at mgalvin@bna.com.

View Flyer

For more information about this program or the Antitrust Section, please contact Tiffany Bardwell at tbardwell@nysba.org.

The Connection Between Domestic Violence and Animal Cruelty

September 30, 2015
2:00 pm - 5:00 pm

State Bar Center
One Elk Street
Albany, NY 12207

For more information, click here to view the flyer.

What Lawyers Should Know About Advising Start-Ups

By: Emily A. Georgiades, Esq.

In today's day and age more and more entrepreneurs are starting businesses that push the envelope and they're looking for lawyers to help them grow their business. Finding the right lawyer can be difficult and from the lawyer's perspective advising a start-up can be a virtual minefield. Depending on the stage the start-up is at there is a lot to consider. There are three main categories a lawyer needs to consider in such circumstances- getting the company started, transacting business and protecting information. Some of the questions a lawyer can expect to be asked include:

1.) What type of company should I establish and what are the tax consequences?
2.) In which state should I incorporate?
3.) How do I establish a company?
4.) What formalities do I need for holding annual meetings, board meetings, etc.?
5.) How do I protect my trade secrets? Do I need to file for IP rights and if so, how?
6.) What employment law policies do I need to implement?
7.) Are my business practices compliant with securities laws and regulations?

As you can imagine, hiring a different specialist lawyer for each category of questions can be very expensive for a start-up business-especially if the money can be used to make the business more profitable. Therefore, many start-ups prefer to hire a general counsel to answer these questions. The General Counsel in turn will have to either very quickly become versant in corporate law, IP law, employment law, and commercial law or will have to be able to hire outside counsel at a cost-effective rate to advise on certain matters. Speaking from experience, there will be times when this is preferable and best for the start-up company. Of course, the mantra "time is money" is always at the forefront of the lawyer's mind and the head of the firm's.

Lawyers (especially compliance lawyers) often have a reputation for being the "no" person; meaning the answer to "can we do xyz" is "no". Considering a start-up firm is not yet an established firm in the industry it is preferable for the lawyer to be less of a "no" person and more of "yes, but if you do this..." person. Being a start-up lawyer requires a creative mind that is not only business oriented but simultaneously sensitive to the laws and regulations of the locality in which the business is established.

A good lawyer will anticipate issues that may arise in the future. It is advisable to be prepared beforehand to limit potential future issues. This requires an honest and in-depth consultation with the entrepreneur to "diagnose the patient"- meaning that the lawyer is better equipped to advise on legalities at the different stages of the company's development if the lawyer knows the business model and the entrepreneur's intention on how to grow the business.

An entrepreneur hires a lawyer to help them legally establish the corporation. However, the entrepreneur will often see themselves and the firm as one entity. It may seem counterintuitive but the lawyer is counsel for the yet to be established firm and the entrepreneur is merely the promoter of the firm until it is established. The lawyer however is hired to be the firm's counsel and if this is not clearly established from the beginning then at some point a conflict of interest may arise.

A potential conflict of interest may occur in equity financings in the instance where the company may benefit from diluting its stock but this would not be beneficial for the founder.

Drafting the right partnership agreement that clearly defines the role and position of each founder (if there is more than one) may also be helpful if future disputes arise. This is especially significant when the partners want to split the profits and losses of the business differently than their respective shares in the company. If this is not clearly stated in writing from the beginning the law does provide a default rule for sharing the profits and losses but this may not be what the partners envisioned.

Another potential problem arises when the company issues stock but the founder was not advised about the relevant securities filings. Such omissions can lead to the directors, officers and founder of the company being held personally liable.

Starting a new business can be exciting and entrepreneurs are typically in a rush to start making profits. But having proper legal guidance is crucial as there are many legal matters that arise before the corporation is even formed. It does not have to be daunting and an experienced business lawyer can be extremely helpful in getting things done correctly from the onset and even anticipating future hurdles or issues. A good lawyer will bring these matters to the entrepreneur's attention and together will help the start-up company succeed on a firm foundation.

Emily Georgiades, Esq. is a member of the New York State Bar, the Bar of England & Wales and the Cyprus Bar Association. She is a business lawyer with a Master of Laws in Corporate, Banking and Finance Law from Fordham University School of Law, was a Deputy General Counsel of a business consulting firm in NY and teaches an advanced course in Business Law at Queens College in New York. Emily can be reached at emigeorg@gmail.com.

Labor Department Proposes Stronger Protections for Investors' Retirement Accounts

By: Nicholas M. Herubin

In April, the U.S. Department of Labor proposed a new rule that would close a major loophole in federal investor protection laws. The Department wants to require that financial professionals advising investors on their retirement accounts act in the investors' best interests.

People are often surprised to learn that, in most cases, brokers are not legally required to act in their clients' best interests. This can be particularly surprising to many attorneys, who are used to the fiduciary standard. However, with limited exceptions, brokers are free to steer their clients towards investments that may generate high fees, regardless of whether a lower-cost option is available.

The Labor Department's proposal would amend the Employee Retirement Income Security Act ("Erisa") to require that stockbrokers advising a client on a 401(k) or individual retirement account act as fiduciaries. The change would apply to approximately $7 trillion worth of investments. According to the Department, it would save investors an estimated $40 billion over the next ten years.

Critics argue that the increased paperwork and compliance costs will hurt investors in the long term. However, this is an argument against regulations in general and does nothing to address the significant conflicts of interest that can arise under the current rules. Even if the administration's' numbers turn out to be high, there is no doubt that individual investors are losing a lot money because their brokers' financial interests do not align with their own.

It remains to be seen whether the Department's proposal will be approved. Recently, Securities and Exchange Commission Chairwoman Mary Jo White said she would support a uniform fiduciary duty for brokers. While it is unclear whether she will be able to accomplish that in her term as Chairwoman, these two developments are an encouraging sign that federal regulators are starting to take investor protections more seriously.

Nicholas Herubin is an attorney located in the Capital Region who interested in financial regulations and the laws protecting individual investors. He can be reached at nickherubin@gmail.com.

New York's Labor Law: An Introduction and Recent Trends

by Robert W. Berbenich

New York State's Labor Law §§ 200, 240(1), and 241(6), particularly Labor Law § 240(1), tend to be hot topics among plaintiff's and civil defense lawyers in New York. Labor Law § 240(1) -- better known as the controversial "ladder law" or "scaffold law" -- has garnered considerable press over the years. While those of us handling general liability matters are likely familiar with these sections of the Labor Law, please allow me to briefly introduce the rest of us to these statutory sections.

Labor Law § 200 is a codification of the common-law duty to provide a safe place for employees to work. This section is the statutory equivalent of common law negligence. Where an injured plaintiff alleges that a defect in the premises caused their accident, then they must show that an owner created the condition or had actual or constructive notice of the defect, and the owner must have had a reasonable amount of time to correct the defective condition. However, where an injured plaintiff claims that his injury was caused by defective equipment, then the plaintiff must show that the owner had the authority to supervise or control the "means and methods" of the work. General supervision is not sufficient to support a claim under Labor Law § 200. The plaintiff must prove that the owner or contactor directed or controlled the method or manner of the work or provided the plaintiff with the equipment necessary to do the job.

Labor Law § 240(1) protects construction workers from gravity-related risks such as falling from a height or being struck by a falling object. Liability under this section is statutory and construction site owners and general contractors can be held strictly liable for violations of Labor Law § 240(1). The plaintiff's comparative fault cannot be considered. The strict liability component, along with the lack of comparative fault, make this a very plaintiff-friendly statute.

Labor Law § 241(6) imposes a non-delegable duty on owners and general contractors to maintain a safe work site. In order to establish a claim under Labor Law § 241(6), a plaintiff must prove a violation of certain sections of the Industrial Code of the State of New York. The sections upon which the plaintiff relies must be applicable to the particular facts of the case and sufficiently specific with regard to the conduct required by the section.

I am very fortunate to be an assistant editor of Goldberg Segalla's Labor Law Update, which provides a semi-annual update regarding significant changes and trends in Labor Law §§ 200, 240(1), and 241(6). It highlights significant cases reported by the Court of Appeals and the Appellate Divisions of the State of New York and offers relevant topics and practice pointers for each case. This is a very useful resource for those of us practicing in this area as well as a good introduction to those of us who may be new to the topic. Goldberg Segalla's most recent Labor Law Update is available here.

From June through December 2014, we uncovered one common question that the courts continued to battle with: whether a plaintiff was engaged in a "protected activity" within the meaning of the New York State Labor Law. For example, in DeSimone v. City of New York, 121 A.D.2d 420 (1st Dep't, 2014), the First Department found that a worker involved in the "financial aspects" of a construction project who was not performing labor was, in fact, engaged in a protected activity, as his work was related to the ongoing construction. The Second Department, in Kharie v. South Shore Record Management, Inc., 118 A.D.3d 955 (2d Dep't, 2014), similarly found the plaintiff to be engaged in a protected activity when dismantling a shelf that was composed of component parts that were attached in a definite manner. This trend draws our attention to the fact that attorneys in this area must focus on the work the plaintiff is actually performed, and the context in which it is performed, to determine whether a plaintiff is engaged in an activity protected by the Labor Law.

We also uncovered that the recalcitrant worker/sole proximate cause defense is still an ongoing issue being dealt with regularly by the courts. In Przyborowski v. A&M Cook, LLC, 120 A.D.3d 651, the Second Department held that a plaintiff's discretion will not absolve a defendant of liability unless it is shown that the plaintiff was specifically instructed to use one means and the plaintiff failed to follow the instruction. The Third Department, in Fabiano v. State of New York, 123 A.D.3d 1262, also found that the recalcitrant worker defense did not apply. Although the plaintiff failed to wear a safety harness while on a scaffold plank that collapsed, the court held that the plaintiff's omission was not the proximate cause of the accident since the scaffold, a primary safety device, failed. In Hill v. Acies Group, LLC, 122 A.D.3d 428 (1st Dep't, 2014), the court held that instructing an employee to avoid using unsafe equipment or engaging in unsafe work is not a safety device and, therefore, the employee's failure to follow the instruction will not give rise to a recalcitrant employee defense. The appellate courts are expected to continue to scrutinize and dissect this defense.

If you are unfamiliar with New York's Labor Law, I hope this brief entry provides you with an introduction to an area I have found to be very interesting and one that is certainly at the forefront of the minds of practicing attorneys as well as the legislators in Albany. This will definitely be a topic you will hear more about going forward. Also, for those who are familiar with this topic, I hope you find this information helpful as well. For more information, please take a look at Goldberg Segalla's most recent Labor Law Update.

Robert W. Berbenich, an associate in Goldberg Segalla's Garden City office, practices civil litigation with a focus on general liability matters, including those involving construction, personal injury, premises liability, and transportation litigation. Robert's previous experience includes working in a civil litigation law firm specializing in high-exposure, multimillion-dollar catastrophic accident cases. There, he was involved in all aspects of litigation, from intake through verdict and appeal. Robert can be reached at rberbenich@goldbergsegalla.com.

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Electronically In Touch is the electronic news-publication of the NYSBA Young Lawyers Section (YLS). It is a member-driven publication, encouraging YLS members to write articles, and as such we would welcome submissions from members on any relevant topic, including practice tips, substantive legal articles, case updates, work/life advice, and information regarding upcoming meetings and events. Please submit articles to Kara Buonanno at kara.buonanno@gmail.com, by the 28th of the month.

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