Identity Theft

The Law Practice Management blog has a post on preventing identity theft. Some good points even though I wonder about how many pizza delivery boys will take a check without an address. Worth reading in detail.

An E-Commerce Blog

While e-commerce is not an area I specifically focus on, no one should ignore it in these days of the Internet. Here is the E-Commerce Law Blog and I suggest if you have an interest in e-commerce that you keep an eye on this blog.

Estate Planning for Same-Sex Couples

The American Bar Association's GP Solo e-zine has an article on estate planning for same-sex partners. I want to point out only two issues I have with this article:

• Funeral arrangements is an area fraught with problems for same-sex couples. Many states limit the right to make these arrangements to the decedent’s immediate family. Others, such as Ohio, have enacted legislation removing that restriction and allowing every person to name someone to make these decisions. For same-sex couples, these laws permit each partner to name the other as the person authorized to carry out the arrangements.

Indiana is one of those states which allows only family members to make funeral arrangements. However, that obstacle can be overcome in two ways.

The first method requires the person involved to set up a funeral trust. The article does not mention this rather simple device. Each person would go to a funeral home, decide what type of funeral they want, and pay for it through a pre-needs trust. The trust can be funded through the purchase of an insurance policy. (Actually, I recommend to this all my clients. It does solve the problem of the family deciding the funeral arrangements at the time of death.)

Secondly, get a power of attorney. The power of attorney statute gives to the attorney-in-fact (the person to whom is given the power of attorney) the power to make funeral arrangements, and the disposition of the body. This article does a fair job of describing the myriad powers given to the attorney-in-fact via a power of attorney.

I would also point out that along with funeral arrangements, one needs to include the burial location. That will mean buying funeral plots and specifying those burial plots as the person's final destination.

Solo also has an article on taxes and same-sex couples. It is also worth reading. I would add that under Indiana's inheritance tax no exemption is available for unmarried couples. The need for planning cannot be understated in these circumstances.

Why Real Estate Titles are so Important

This report from the Noblesville Ledger shows the problems that can come from bad real estate deeds.

Regardless of who owned the land originally, county attorney Mike Howard said the trustee's lawyer had the wrong land description when the township's title was entered, so the commission's title was accepted last summer. He said the commission now has the right to the land, and asked Demaree if he wanted to evict the township.

When Demaree did not answer, Commissioner Steve Holt told Howard to void the township's title.

VOIP scam

That is Voice Over Internet Protocol. I am a bit sensitive to this as I use Vonage for my office telephone and I think more of us are going to VOIP telephone service. (Insight has jumped into this with a bevy of commercials touting their telephone service.) So should we be surprised that there are scams?

Vishing is really just a new take on an old scam -- phishing. You know the drill: you get an e-mail that claims to be from your bank or credit card company asking you to update your account information and passwords (perhaps, it says cleverly, because of fraudulent activity) by clicking on a link to what appears to be a legit Web site. Don't do it, of course. It's just a ruse, nothing more than an illegal identity theft collection system.

Vishing schemes are slightly different, with a couple of variations:

• In one version, you get the typical e-mail, like a traditional phishing scam. But instead of being directed to an Internet site, you're asked to provide the information over the phone and given a number to call. Those who call the "customer service" number (a VoIP account, not a real financial institution) are led through a series of voice-prompted menus that ask for account numbers, passwords, and other critical information.
• In another version you're contacted over the phone instead of by e-mail. The call could either be a "live" person or a recorded message directing you to take action to protect your account. Often, the criminal already has some personal information on you, including your account or credit card numbers. That can create a false sense of security. The call came from a VoIP account as well.

Vishing has some advantages over traditional phishing tricks. First, VoIP service is fairly inexpensive, especially for long distance, making it cheap to make fake calls. Second, because it's Web-based, criminals can use software programs to create phony automated customer service lines.

If you are using a VOIP telephone service, please read the rest of the article here.

Franchise owners - a follow up of sorts on Taco Bell in New York

Somewhat of a follow up to this post here. Seems that on top of E.coli outbreaks, a New York Taco Bell has rats.

Business succession planning article from Toronto Star

I find no one likes estate planning. I have nightmares about some of my business clients but we do muddle through. I think this will be the big issue coming up locally in the next few years as many of the local business owners get old.

Then I find this article in Toronto Star which seems so very familiar. The same problems between generations just a different country. Okay, there is some reassurance in that the resistance to estate planning meets the same obstacles as here.

I do suggest that anyone reading this blog and has a business take a look at the article With the exception of one small detail, there is good information there for us Hoosiers.

Links for 2-25-07: Businesses and taxes

From the Fort Wayne Journal Gazette an article on the perils for business people doing their own taxes:

The expression “Don’t try this at home, kids” can easily apply to small-business owners who try to compile income tax returns without the help of a tax preparer or tax prep software.

The Kokomo Tribune published an article on Congressman Donnelly's work on the Small Business Tax Relief bill. This might be a bit of a puff piece for the freshman Congressman, bu still the bill does sound interesting:

The bill will increase the deduction small businesses can take from their taxes from $112,000 to $125,000 and increase the number of businesses that will be eligible.

Don't Get Cute With Bankruptcy Court

From the Washington Post:

The Supreme Court ruled yesterday that a financially troubled businessman lost an important right under the federal bankruptcy code because he failed to disclose all of his assets as the law requires.

In a 5-to-4 decision in Marrama v. Citizens Bank of Massachusetts, the court said Robert Marrama of Gloucester, Mass., could not convert his bankruptcy case from one chapter of the code to another, as the law ordinarily allows.

The reason, the court said, stemmed from his failure to disclose a Maine vacation home placed in a trust. Marrama, who operated a flooring company, listed the value of his interest in the property as zero, according to papers in the case

Non-Competition Agreement and Trade Secrets

From yesterday's Indianapolis Business Journal:

Marion Superior Court Judge Thomas J. Carroll yesterday issued a preliminary injunction ordering an Indianapolis company controlled by high-profile businessman Alan G. Symons to return computer files and other information allegedly taken from a Fishers competitor. The competitor, Product Action International LLC, claimed in a lawsuit filed in May that Symons' company--Fast Tek Group LLC--used Product Action's business blueprint to build a similar company. Both firms sort defects out of parts lots for manufacturers.

Symons filed an appeal shortly after Carroll issued the injunction. "This is two competitors beating each other up," he said, denying wrongdoing.

This story bears some resemblance to other similar cases that I have posted about here and here and here and here.

Carroll's injunction said the former employees, Anthony Roark and Chan Chanthaphone, admitted taking the information, then took the 5th Amendment protection against self-incrimination and refused to testify.

Roark allegedly transferred operating methods, process flow charts, a quality manual and other trade secrets from Product Action computers to a zip drive, and then gave the information to other Fast Tek workers and used the information in Fast Tek operations.

Roark, who started working at a Fast Tek office in Saginaw, Mich., in 2004, climbed to vice president a year later. He resigned in December 2006.

I hate basing anything on a newspaper report and so this may just be two competitors fighting things out in out. However, the bit about the two taking the 5th does make me skeptical about any pleas of innocence.

What I find truly astounding in this story is the aplomb with which the new company took in these former employees of a competitor. These problems ought to have been sorted out before hiring these persons. Instead of resorting to counsel before the manure hit the fan, the attorneys did what they could fix the results of that manure hitting the fan. I have little sympathy for business owners who are in this position - particularly one who sounds as sophisticated as this fellow. If I do accomplish nothing else with this blog, I hope it is instilling this idea in my readers: consult an attorney before doing anything that could sink your business.

Based on the facts from the IBJ, I would have counseled not to hire these people. If hiring, then restrict their activities either in regards to a non-competition agreement (a point on that below) or a strict review of any information that they brought with them or offer for use. Finally, document everything about them and the information they possess and my client uses and how the client used their information.

I speak a little harshly about the company hiring these people but the former employer missed a few points. First, the former employer does not seem to have had non-competition and/or non-disclosure agreements. In the long run, these missing documents did not matter in this case as the former employees' conduct seems to been outrageous. A closer case and the results would differ. Second, the former employer would have avoided financial and business costs with a better method of securing their trade secrets.

4/18/08 update: Trade Secrets: Indiana Court of Appeals Issues Opinion Involving Fast Tek.

Open Door Law news

From the Noblesville Ledger:

The Cicero Town Council violated Indiana's Open Door Law by interviewing engineering firms in closed-door sessions, according to town attorney John Culp.

Steve Key, legal counsel for the Hoosier State Press Association, agreed. "That should not have been done in an executive session. They were wrong."

The Open Door Law, he explained, was written so the public's business is conducted in the open, allowing anyone interested to see what decision is made and for what reasons it was made.

The five-member town council held closed-door sessions, also called executive sessions, on Jan. 24 and Feb. 6 to interview firms interested in handling engineer- ing projects on a contractual basis.

The Open Door Law does allow a governing body to receive information about and interview prospective employees in closed-door sessions. However, the attorney general said in 1997 that contractors are not employees so interviews and information-gathering sessions about them must be done at a public session.

A later report from the same paper shows the importance of legal research:

Town attorney John Culp is blaming himself for Cicero Town Council violating Indiana's Open Door Law by interviewing engineering firms in two closed-door sessions.

"I thought it was alright to go ahead and interview in executive sessions," Culp told the board at its meeting Tuesday night.

The five-member council held closed-door sessions, also called executive sessions, on Jan. 24 and Feb. 6 to interview firms interested in handling engineering projects on a contractual basis. Indiana's Open Door law allows executive sessions to interview prospective employees. Contractors, however, are not considered employees.

Culp said the council asked in advance if executive sessions would be legal, but when the attorney became ill he was unable to research the answer.

actually, i am quite impressed by this Steve Culp's willingness to take responsibility for Cicero's actions.

From the New York Small Business Law blog comes this information on a new Internet resource for small businesses, startupping:

Startupping is a one-of-a-kind community resource created for Internet entrepreneurs by Internet entrepreneurs. It is a place to share information, ask questions, and tap into the experience of others who have built and are building web businesses. Read blog posts about startup issues, participate in our discussion forums, and view our wiki resources, including sample term sheets and a glossary. For more information about the Startupping site, see our about page.

The site has a lot of information and I have not had time to plumb it fully. However, it does seem useful for a person starting a small online business.

If you are thinking of starting a small business would do well to take a look at other posts on the New York Small Business blog. She has several links to blogs and resources for the small business.

Bankruptcy and credit reports

I no longer practice consumer bankruptcy law but I still get questions on it. Some from former clients about why their discharged debts still appear on their credit reports. Today I found this post on the New York Bankruptcy Litigation Blog. The writer succinctly states the problem and the solution. I cannot write any better than this fellow and I suggest anyone having the problem of discharged debts appearing on credit reports read this post now.

Franchise owners - a New York Times article worth reading

Anyone owning a food franchise or thinking of buying one ought to read this article from the New York Times: Left Holding the Bag in the Land of Fast Food. Other franchise owners may still fidn the article helpful. The writer uses the outbreak of e. coli cases at fast food restaurants as the starting point for discussing the riskiness of a franchise business.

After such a crisis, being a franchise owner is both a blessing and a curse. While the franchise has the marketing clout and financial strength of the parent company to back it up, it is also largely dependent on the parent company’s public relations and advertising to lure customers back.

From this lawyer's viewpoint, the question is - to steal a phrase from Capital One - what is in your franchise agreement?

Interesting Tennessee case on third party interference with contracts

Thanks to the Tennessee Business Litigation Law Blog and Day on Torts for the lead to this case on third party interference with contractual rights. I am unaware of any similar reported case in Indiana. However, I think think the reasoning ought to be persuasive here.

First, the Tennessee court established that a difference existed between a parent corporation and a subsidiary:

In a tortious interference claim, a parent corporation and its subsidiary will usually not share an identity of interests when the subsidiary is not wholly-owned because the interests of the majority shareholder are often different from and antagonistic to the interests of the minority shareholders. Because of the competing nature of their interests, Tennessee law protects minority shareholders from majority shareholders. Under Tennessee law, a majority shareholder owes a fiduciary duty to minority shareholders.

Second, the Tennessee court noted that one cannot be liable for interfering with one's own contract.

Then, the court examined the policy underlying that rule:

But when the parent is not the sole shareholder, the interests of the parent and the subsidiary will not always be identical. This distinction is crucial because the whole issue of extending the qualified privilege depends on a complete identity of interest, such that two separate entities are treated as one. When the interests of a parent and subsidiary are not identical, the reason for treating them as the same entity disappears. In that case, the parent should not be considered a
party to the contract so as to protect it from liability for interference with contract.

E-mail and trade secrets

I missed this post from The Trade Secrets Blog. I report my embarrassment at this because I recognize the behavior described in the post. Web-based e-mail includes Yahoo and G-Mail and Netscape Mail (if that still exists) and MSN (or whatever Microsoft calls MSN nowadays).

From the New York Times (registration req'd), a story about the heartburn employers feel when employees transfer their confidential company email to web-accessible free personal email accounts offered by companies such as Google and Yahoo.

As the Times puts it, "employers, who envision corporate secrets leaking through the back door of otherwise well-protected computer networks, are not pleased."

Rest easily (for now) though, "[s]o far, no major corporate disasters caused by this kind of e-mail forwarding have come to light."

But, for the paranoid among us: "Lawyers in particular wring their hands over employees using outside e-mail services. They encourage companies to keep messages for as long as necessary and then erase them to keep them out of the reach of legal foes. Companies have no control over the life span of e-mail messages in employees’ Web accounts."

The New York Times has a free subscription policy but in case you do not want to take the time, here are some excerpts directly from the article:

Hospitals have an added legal obligation to protect patient records. But when DeKalb Medical Center in Atlanta started monitoring its staff use of Web-based e-mail, it found that doctors and nurses routinely forwarded confidential medical records to their personal Web mail accounts — not for nefarious purposes, but so they could continue to work from home.

In the months after the hospital began monitoring traffic to Web e-mail services, it identified “a couple hundred incidents,” said Sharon Finney, DeKalb’s information security administrator. “I was surprised about the lack of literacy about the technology we depend on every day,” she said.

DeKalb now forbids the practice, and uses several software systems that monitor the hospital’s outbound e-mail and Web traffic. Ms Finney said she still catches four to five perpetrators a month trying to forward hospital e-mail.

The Web mail services may also be prone to glitches. Last month, Google fixed a bug that caused the disappearance of “some or all” of the stored mail of around 60 users. A week later, it acknowledged a security hole that could have exposed its users’ address books to Internet attackers.

***

Paul Kocher, president of the security firm Cryptography Research, said the real issue for companies was trust. “If you can’t trust employees enough to use services like Gmail, they probably shouldn’t be working for you,” he said.

Many companies apparently do not have that level of trust. In a survey conducted last year, the e-mail security firm Proofpoint found that 37 percent of companies in the United States used software to monitor office use of Web mail.

With trade secrets does it not always come down to trust? I do not see any means of a business with employee trust issues to protect itself other than installing monitoring software. Do read this earlier post which widens the focus beyond only e-mail.

A Dominatrix Contract? How lawyers think

From thee Tax & Business Law Commentary Blog comes this post about Dominatrix seeking a contract. Mr. Levine thinks:

Of course, the question that first occurred to me is: Is the "Dominatrix" an independent contractor or an employee? This has obvious income tax and FICA/SECA implications.

My first thought was this: might the contract be void as being for an illegal purpose? The commentator to Mr. Levin's blog answers the independent contractor/employee question correctly (well, correctly for Indiana). I had to some looking for my answer. The short answer is that it is not void for being a contract for an illegal act.

The longer answer requires looking at the prostitution statute (IC 35-45-4-2):

Prostitution
35-45-4-2 Sec. 2. A person who knowingly or intentionally:
(1) performs, or offers or agrees to perform, sexual intercourse or deviate sexual conduct; or
(2) fondles, or offers or agrees to fondle, the genitals of another person;
for money or other property commits prostitution, a Class A misdemeanor. However, the offense is a Class D felony if the person has two (2) prior convictions under this section.
As added by Acts 1976, P.L.148, SEC.5. Amended by Acts 1977, P.L.340, SEC.77; Acts 1979, P.L.301, SEC.1; P.L.310-1983, SEC.3.

Then just to be on the safe side checking the definition of "Deviate sexual conduct" at IC 35-41-1-9:

"Deviate sexual conduct" defined
35-41-1-9 Sec. 9. "Deviate sexual conduct" means an act involving:
(1) a sex organ of one person and the mouth or anus of another person; or
(2) the penetration of the sex organ or anus of a person by an object.
As added by P.L.311-1983, SEC.10. Amended by P.L.183-1984, SEC.1.

And, that is legal reasoning in 60 seconds. It does beg the question of why we lawyers think of such things when faced with has other more generally interesting features.

Offers in Judgment as a Settlement Tool?

The HR Lawyer posted a reference to an article on Rule 68 settlements to offer. I seem to recall reading an article on this subject years ago but I cannot recall where. I understand the mechanics and the rule does have potential for defense counsel. However, I cannot think of a time I thought of using the Rule when defending a client who could make the necessary offer. Unfortunately, the article is a SSRN article and might be difficult to download.

Remember that Indiana's Trial Rules has a Rule 68 which follows the federal rule. You can find that rule here. The procedure ought to work as well under our state rule but, again, having the defendant willing and able to pay will be the deciding factor on its use.

Why Intellectual Property is Important For Your Business - trademarks

From Wiggin & Dana's Franchise Law Blog:

IHOP tells investors “Oops”

IHOP recently disclosed that it inadvertently allowed certain of its federal trademark and service mark registrations to lapse, which will require it to revise its Uniform Franchise Offering Circular ("UFOC"). IHOP advised investors that it is taking corrective measures with the United States Patent and Trademark Office, that it has also temporarily stopped selling new franchises pending the approval of state regulators to its changes to the UFOC. IHOP predicted that it will fix the problem “very shortly” and that “any issues regarding the validity of its federal trademark and service mark registrations will not have a material impact” on the franchise system. See this article for more details.

You got to hide your trade secrets away

With apologies to The Beatles, here is a story via The Trade Secrets Blog:

Biggest Threat to Corporate Information: Ignorance

Feb 14 2007

By Andrea James --The Seattle Post-Intelligencer

Corporate executives listen up: Valuable company information is getting into the wrong hands. Sensitive documents are walking out in briefcases, bytes of data are zooming away over the Internet, and those internal files you thought were history are probably lying, unshredded, in some Dumpster.

"You are losing tons of information on a daily basis and don't know it," Dan Verton, executive editor of Homeland Defense Journal, said Tuesday. "A lot of companies ... they want to bury their heads in the sand, they want to ignore it. Shareholder value is the rule of the day."

Big companies may be able to hide these losses because of their size. Small and medium sized businesses do not have the luxury of padding found in the big companies. Can your company afford to lose any of the trade secrets which give you the edge over your competition?

Here is another prime bit from the article:

Making new hires sign acceptable use policies won't cut it, panelists said. People don't read them, or they don't care because rules usually are not enforced.

New college graduates are savvy enough to find ways around controls and Web mail blockers, the panelists said. That's why it's important to train employees to be careful.

"These are people you are going to be hiring," Verton said. "They don't have the same understanding of acceptable use."

If you have read my prior posts on trade secrets, I really suggest that you do so.

Advanced Directives - Good Idea from Vermont?

From the Elder Law Prof Blog:

Vermont agency establishes advance directives registry

Vermonters can now file an advance directive that will ensure that a person's critical health care decisions will be honored during a time of incapacitating illness, coma, or end-of-life care. The advance directive will be maintained in a registry called the "Vermont Advance Directive Registry" established by the Vermont Department of Health. Locating the documents and finding the proper designated "agent" to make health decisions is often a stumbling block to following patient wishes when the patient is unconscious or unable to communicate. "This new registry marks a significant innovation and added protection for Vermonters," said John Campbell, executive director of the Vermont Ethics Network. "It provides the peace of mind and security of knowing that their wishes, exactly as expressed in the advance directive, can be available immediately in a medical emergency or critical care situation.Publish

Source: Emax Health News, http://www.emaxhealth.com/24/9447.html

If this registry allows for access by all healthcare providers and the ability to locate the attorney-in-fact, then I would say this is something Indiana ought to look into. I assume that it is digital. Doesn't make much sense if it is not.

Daughter tries to steal ring off of dead's mom's finger

From Wills, Trusts & Estates Prof Blog:

Mrs. Svajada of Corpus Christi, Texas left instructions to be buried wearing her ring

As the ring was worth $7,000, her daughter and friend decided that it was a "waste" to bury the ring and thus attempted to pry the ring off the Mrs. Svajada's body during the funeral. The daughter was charged with felony theft.

See AP, Woman charged in theft from mom's coffin, Feb. 16, 2007.

Charming. Sounds like Springer Show material.

Leaving a job with a non-compete? Got any savings for the litigation expenses?

More news on non-compete agreements. This time out of Milwaukee:

A bitter fight between investment firm Robert W. Baird & Co. Inc. and a rival company started by two of its former portfolio managers has been resolved, both firms announced Friday.

Baird and Red Granite Advisors LLC, a company that Joel D. Vrabel and David W. Bowman formed after they left Baird, said they had resolved their differences and that lawsuits pending in county circuit and federal courts would be dismissed.

Baird did not have much luck in court:

Shortly after the first lawsuit was filed, Circuit Judge Patricia D. McMahon denied Baird's request for a temporary restraining order stopping Red Granite from doing business while the litigation was pending.

At a pretrial hearing in November, McMahon dealt Baird another blow, rejecting its request that Red Granite return documents. There wasn't sufficient evidence that the firm's founders took them, McMahon said.

I found another article and this factoid seeming highly interesting:

Vrabel, Bowman and Bosworth left Baird Investment Management, a division of Milwaukee-based Baird, at the end of April 2006 to form Red Granite, Milwaukee. Eight Baird employees also resigned and joined Red Granite. Red Granite, in Milwaukee, now has 14 employees.

I do not practice law in Wisconsin. I have no idea what Wisconsin's standards are for non-competition agreements or preliminary injunctions. I cannot believe that Wisconsin is any more conservative on non-competition agreements than Indiana. So my following comments are purely speculative about Wisconsin:

1. Baird must have had a pretty poor non-competition agreement.
2. Baird must not have had very much in the way of evidence supporting its trade secrets claims.

Red Granite started off with ten Baird employees. They apparently compete in the same trade and in the same geographic location.

In Indiana, a non-competition agreement must be ancillary to an employment contract, it must be limited to a reasonable geographic area or client list, and it must be for a reasonable time. Generally, the non-compete requires no contact of the former employer's clients, no direct competition in the same area of business.

Recently, Dow Agrosciences lost an appeal on a preliminary injunction over a non-compete agreement. The opinion is here. I think that the Baird case and the Dow cases are probably more alike than not. Dow's non-compete agreement lacked the proper restrictions on area and/or clients. Dow's trade secrets argument failed to saved its flawed non-competition agreement. Yes, I think the similarities are there.

I suspect the principals in Red Granite consulted a lawyer before jumping ship. Anyone who has a non-competition agreement who does not consult counsel when they leave that employer to form their own company needs their head examined.

I do not see any other way of putting the matter. Starting a competitive company is a red flag for the former employer. Litigation will follow. So long as the employer avoids the mistakes of Dow and Baird, they will get a preliminary injunction. Getting a preliminary injunction means that the employee's company is stopped from the work that is competitive. Generally speaking, the work infringing on the non-competition agreement is the lucrative, profitable trade. Stopping the profit makes the future of the new company appear bleak. It may also impinge on a person's ability to pay for things like food,clothing and shelter.

Therefore, get legal counsel before challenging a non-competition agreement. Failing to do so may involve more costs than you will enjoy.

More on TJX and Pier One

The Canadian blog Thoughts from a Management Lawyer noticed a few news reports that I did not. His conclusion is the same as mine:

I've never seen this type of suit before, but I find it a practical and proactive way of bringing the issue to a head quickly. This is definitely something to watch.

The Boston Globe has a longish piece here. Seems that TJX is a Massachusetts company. Well, it is a bad day when you do not learn something new. Interesting point here which seems to support some of what I have been seeing out here in Indiana:

Paul Holtzman of Boston firm Krokidas & Bluestein LLP said he's seen a growing number of lawsuits involving companies trying to enforce non compete agreements.

"It just reflects the competitive nature of the industries and the economic investment in senior managers," he said.

Non-competition agreements - who is the competitor?

An interesting story from the International Herald Tribune's business page caught my eye:

BOSTON: An odd legal fight has emerged between TJX and Pier 1 Imports, both of them U.S. home furnishing chains, over what defines a competitor.

At issue is Alex Smith, a 54-year-old TJX executive whom Pier 1 hired last month. Days after resigning, Smith received a letter from TJX threatening to sue him over a noncompete clause. TJX also informed Smith that it would not pay him millions of dollars owed in incentive and retirement plans for taking the job.

Pier 1 got a restraining order Tuesday against TJX to prevent it from suing Smith. Even though Pier 1 and TJX both sell home goods, Pier 1 says TJX is not a competitor.

Why? Because Pier 1 sells full-price merchandise, mostly its own brands, and TJX sells discounted products, usually overruns, off-season or discontinued items, at its T.J. Maxx, Marshalls, and HomeGoods stores.

This scenario seems odder when one considers that non-compete agreements are a way of protecting trade secrets. See my post here about combining non-disclosure agreements with a non-competition agreement. So I have to wonder just what trade secrets belonging to TJX would benefit Pier One?

Also, I find Pier One's striking first with an injunction to be interesting. Aggressive without being stupid is a good thing in my mind. I suppose they could have also coupled it with a declaratory judgment suit. That would give them the benefit of having shield (the injunction) and a lance (declaratory judgment). The former protects Pier One's interest in having an employee at work and the latter to punch a hole in TJX's non-competition claim.

I moved the family law posts to a new blog

Following some very good advice, I started Sam Hasler's Indiana Family Law Blog. I have moved all my family law posts there. Take a look and let me know what you think.

A checklist for good collection cases

I give the following checklist to my business clients who need collections work. A good collections case means the client having this information before they send me the file. Too often a debtor is not just a debtor but a true deadbeat. A true deadbeat has no qualms about skipping out on a job or a residence to avoid paying their debts.

1. The person's full name.
2. Person's Social Security Number and driver's license number.
3. Person's address.
4. Person's birth date.
5. Where person was last employed.
6. Copies of contracts and/or invoices unpaid.

Quite a commonsensical list really and all information that every business should have on the people it deals with.

Trade secrets - a cautionary tale

I found the following article somewhat by accident as it happens when searching on the Internet. Seeing the headline, I knew the tale without looking. I looked all the same. I offer it here for anyone who has a business and wonders what the fuss is about trade secrets.

Sometimes I think I bemuse my business clients when I start talking about trade secrets. There are two categories of client reactions to my trade secret questions. The first category does not always see the trade secrets. The other category see trade secrets but think they have no worries about protecting them. They see more pressing legal matters need discussing where I see threats to the core business. I keep telling them that a successful trade secrets case is about what we did long before the case gets to court.

I suggest you read this article written by a businessman and not an overly protective lawyer. By not consulting with an attorney on how to protect his trade secrets (and remember that trade secrets make the business), he almost lost his business.

Indiana collections law - who is liable on a judgment

This question came up last week and I got to admit that I always thought the answer was obvious. After being a lawyer for over nineteen years, I got to keep in mind that what I know as an attorney may not be so obvious to the general public.

The simple answer is that the person liable for a judgment is the person or persons who has a
judgment against them.

Luckily, I asked the person asking the question when they had been sued and whose names were on the the court documents. Her answer was that they had not been sued - yet.

So now I have a different problem, a completely different question. The woman on the other end of the telephone could tell the difference between a pleading and a letter. Knowing that difference was completely unimportant in helping her with her problem.

So I got her talking about what the problem was and I shut up and listened. She was concerned about a bill her new husband owed and whether she could be held liable for it. The real question came out now and I could give her an answer unweighted with a lot of legalese.

She did raise what has been a persistent question for me over the years: where do people get some of their ideas about the law? This lady was under the impression that since she was married she was now liable along with her husband for his debts. I wish I could say that first time I had ever heard that one. I do not know exactly when the law changed so that a wife was not liable for her husband's debts. I always assumed that the law changed before the twentieth century started and long before I was became an attorney.

I explained to her that she was no even liable for any current debts of her husband - unless she signed a contract along with husband. I got to admit that I glossed over the doctrine of necessities. Considering what the Indiana Supreme Court did with that doctrine, I do not think I was shortchanging her.

She was relieved and it took me about five minutes of conversation. It might have taken a bit less if I had been listening like an attorney rather talking like an attorney.

Indiana Landlord Tenant Law News

I would like to keep the purely political off of this blog. However, Matt Tully wrote a column in the February 7 Indianapolis Star where politics and landlord-tenant law meet. The occasion was a bill requiring landlord's to give notice before they enter the premises.

Indiana's landlord-tenant law starts with statutes. Thus, why the legislators had a hearing on this bill.

The bill reads as follows:

(e) A tenant may not unreasonably withhold consent to the tenant's landlord to enter the tenant's dwelling unit in order to:
(1) inspect the dwelling unit;
(2) make necessary or agreed to:
(A) repairs;
(B) decorations;
(C) alterations; or
(D) improvements;
(3) supply necessary or agreed to services; or
(4) exhibit the dwelling unit to prospective or actual:
(A) purchasers;
(B) mortgagees;
(C) tenants;
(D) workers; or
(E) contractors.
(f) A landlord may enter the dwelling unit:
(1) without notice to the tenant in the case of an emergency that threatens the safety of the occupants or the landlord's property; and
(2) without the consent of the tenant:
(A) under a court order;
(B) if the tenant has abandoned or surrendered the dwelling unit; or
(C) for the reasons listed in subsection (e).
(g) A landlord:
(1) shall not abuse the right of entry or use a right of entry to harass a tenant;
(2) shall give a tenant reasonable written or oral notice of the landlord's intent to enter the dwelling unit; and
(3) may enter a tenant's dwelling unit only at reasonable times.

I cannot see anything in this bill which any of my landlord or tenant clients would find objectionable.

I find more interesting what is not in the bill - any penalty for violating the statute. I think that the landlord's remedy would simply be eviction.

I think tenants would generally have only constructive eviction as a remedy. This bill does not include commercial tenants but only residential ones. I think the idea is a bit on the noble side but without a penalty provision not terribly useful for tenant. If this bill does pass into law, I think it would do well to examine closely any allegations of harassment. Therein might lie the way to enough damages to make a case profitable.

I suggest in the meantime that all parties - landlords and tenants - pay close attention to their leases. I have seen landlords who bought their leases at office supply stores find out that their lease was very good - for the tenant! The leases I draft allow for reasonable access. So any lease that does not allow reasonable access is not worth the purchase price for the landlord and not worth the trouble of signing for the tenant.

Increasing intellectual property litigation

Yes, it is a press release but getting statistics on litigation is a bit tricky. It does seem to agree with what I am seeing of increased opinions from the Indiana Court of Appeals on trade secrets and third party interference with contracts. With those caveats, here is the news:

Intellectual Property Litigation Threatens a Growing Array of Companies
Friday February 9, 10:19 am ET

PRINCETON, N.J.--(BUSINESS WIRE)--According to research conducted by IncreMental Advantage, companies in a growing array of industries face potentially ruinous litigation relating to intellectual property. David Wanetick, Managing Director of IncreMental Advantage and Chief Intellectual Property Officer, said, "Sources of Intellectual Property litigation include attacks by patent trolls, disputes over licensing issues, business methods patent violations, counterfeiting and disclosures of trade secrets."

Trends in Intellectual Property litigation include:

• The number of intellectual property lawsuits soared almost three-fold from the beginning of the 1980s to the end of the 1990s.
• From 1984 to 1999, the median loss absorbed by companies faced with IP litigation was $2.9 million and the mean loss was $28.7 million in total losses.

These issues will be more fully discussed at IncreMental Advantage's Intellectual Property Litigation Conference which will be held in New York City on February 28.

Health Care Powers of Attorney - Why You Need One

A recent case brought close to home the importance of having a power of attorney. An adult has a stroke and the wife cannot pay the bills because all of his income is in a bank account in his name only. Having had a stroke, I had to file for guardianship. I charge $150.00 for a power of attorney with a health care provision and a living will, but a guardianship starts at about eight times that much. So much money and stress could have been avoided if the husband had had the proper documents!

Why did he not have the proper documents? Because he never thought that he would need them. A power of attorney appoints a person to act for you as if they were you to take care of your business. A healthcare power of attorney appoints a person to act for you in taking care of your health issues. A living will tells a healthcare provider (your doctor and/or hospital) that you do or do not want to receive life support.

I have a Top Three Reasons of Why You Do Not Need a Power of Attorney. I can tell you that if you answer "NO" to any two of the following, you need a power of attorney and a living will:

3. You have a power of attorney and living will.
2. You will never be incapable of making decisions about your business or health care.
1. You want to receive medical treatment if you are incapacitated regardless of the costs.

Practice management stuff -The Opera Browser

Bob Ambrogi reviews the Opera Browser. Opera always intrigued and I almost tried it out when Netscape Communicator started to die. Right now I am content with Firefox but I am tempted by this part of Ambrogi's review:

Like the latest versions of IE and Firefox, Opera comes with a built-in RSS feed reader. Unlike the other two, it comes with a highly functional e-mail program and newsgroup reader that, once again, is simply more clever than others. Rather than organize messages in files, Opera's e-mail program organizes them in "views." These views can have familiar names such as "received" and "unread" or can be customized, but they are actually hyperlinks embedded in messages. This means that you can assign a single message to multiple views without having to move or copy the message.

I use Yahoo Mail and I really do not like it. I used Eudora from when I first went online till I left for Indianapolis. I miss Eudora. When I did not use Eudora, I used Netscape's integrated e-mail client. Firefox does not do e-mail but there is a sister product which is an e-mail clien