Attorneys in Cincinnati Oh & N. KY | Blog

One Manufacturer's Trash is Another Manufacturer's Treasure

Posted on Mon, May 21, 2012 @ 09:42 AM

David J. Schmittby David J. Schmitt

ME3:  A perfect way to build the bottom line AND benefit the environment.

Attention tri-state manufacturers—The Mid-Ohio Regional Planning Commission has federal and other funds available to companies for assessment of their energy use and needs and to suggest ways to increase efficiency, reduce costs and increase the bottom line.

This includes a membership in a network of manufacturers which seek to utilize what may be considered a waste product by one manufacturer as a raw material for another.

Learn more and get the details here.

Tags: ME3, Ohio By-Product Synergy Network, U.S. Environmental Protection agency, Environmental Impact

Emerging Employment-Related Issue: Protected Concerted Activities

Posted on Fri, May 18, 2012 @ 02:40 PM

Alexis L. McDanielby Alexis L. McDaniel

Imagine you’re the general manager of a luxury car dealership.  One day, after browsing through pictures of your children on Facebook, you notice a posting made by one of your salesman criticizing what he describes as the cheap food of hot dogs and chips you provided at your recent sales event.  Although no other salesman commented on the posting, prior to this incident, the salespeople met with management to discuss their concerns about the event.  Infuriated by the posting, you want to fire your salesman on the spot, but should you? 

No, not according to the decision in Karl Knauz Motors, Inc., Case No. 13-CA-46452 (September 28, 2011).  In this case, an ALJ found that the critical comments made by the salesman were protected concerted activities because “food offerings” could have affected car purchases and thereby wages of salespeople.

Under Section 7 of the National Labor Relations Act (“NLRA”), an employee has the right to engage in protected concerted activity and the National Labor Relations Board (“NLRB”) has provided guidance on what this entails.  Based on these guidelines, the following are examples of protected activities:

  • Two or more employees addressing their employer about improving their working conditions or pay;
  • One employee speaking to his/her employer on behalf of him/herself and one or more co-workers about improving workplace conditions; and
  • Two or more employees discussing pay or other work-related issues with each other. 

Prior to the emergence of social media, questions regarding concerted activities were typically confined to the work environment.  For example, a supervisor might overhear Joe and Jane discussing their salary near the water cooler.  Even if the employer considered employee salaries a confidential matter, Joe and Jane’s discussion would be protected under Section 7 of the NLRA.  Now, with websites like Twitter and Facebook, employees have often moved beyond their own work environment and into the world-wide audience these social websites provide.  The end result is a tension between an employer’s concern of negative publicity and loss of business, with the employees’ right to engage in protected concerted activity. 

Although it will take some time before the new social media cases are decided by the NLRB and reviewed by the courts, in two reports, dated August 18, 2011 and January 24, 2012, the Acting General Counsel of the NLRB discusses principles to determine whether an employee’s social media activities are protected.  These emerging principles include the following:

  • By intent or result, employee conduct on social media must involve group activity relating to terms or conditions of employment. 
  • Employee social media posts that directly solicits co-workers or tries to promote group action regarding a term or condition of employment will be protected.
  • Employee social media post that suggests an intent to promote group action or support will likely be protected.
  • Employee social media post that does not expressly solicit co-worker action or support may still be protected if it generates a substantive conversation about terms and conditions of employment. 
  • Post that is not directed to co-workers, or does not address issues of mutual concern to other employees, will likely be viewed as unprotected griping. 
  • Disparaging comments about an employer or supervisors are generally protected unless they:
  • are not related to a dispute over working conditions
  • are maliciously defamatory
  • focus solely on company products or business policies
  • appeal to racial, ethnic, or similar prejudices

It all boils down to this—an employer must be careful when responding to an employee’s social media posting.  There can be severe consequences for an employer that does not take the appropriate steps to evaluate whether a social network posting is protected concerted activity under the NLRA.

Check back often, as there will definitely be new developments to this ongoing issue.

Tags: Social Media, Twitter, NLRA, National Labor Relations Act, Protected Concerted Activity, Facebook

NLRB Suspends "Quickie Election" Rule

Posted on Thu, May 17, 2012 @ 03:05 PM

Robert J. Hollingsworthby Robert J. Hollingsworth

On May 15, 2012, the National Labor Relations Board (“NLRB”) announced that it “has temporarily suspended implementation” of its new expedited election procedures.  The Board’s action was in response to a decision the previous day by a federal district court in the District of Columbia that the NLRB had improperly adopted the new “quickie election” rule, which became effective on April 30, 2012.  The General Counsel of the NLRB has now advised the NLRB Regional Offices to revert to their previous procedures for election petitions.

At the time of the NLRB’s announcement, there were about 150 election petitions pending under the new rule.  It will be interesting to see how many of the 150 or so parties seeking elections will continue their cases under the old procedures.  The reaction of these parties will indicate how much the new procedures influence unions to seek elections they would not have requested under the old procedures.

The Board’s suspension of its new rule is just the initial skirmish in what is likely to be a long battle.  The district court’s ruling was based on a single procedural defect: the NLRB lacked a quorum necessary to adopt the new rule.  The parties challenging the new rule, which include the U.S. Chamber of Commerce, have raised several other arguments that still need to be addressed.

Despite suspending the new rule, the Democrat majority that controls the Board has no intention of backing down.  Board Chairman Mark G. Pearce commented:

We continue to believe that the amendments represent a significant improvement in our process and serve the public interest by eliminating unnecessary litigation....  We are determined to move forward.

“Moving forward” clearly indicates that these Board members intend to re-approve the new election procedures before the full five-member NLRB panel.

Stay tuned for further developments.  The battle has just begun.

Tags: Quickie Election Rule, NLRB, National Labor Relations Board

Cyber Misconduct in the Workplace

Posted on Wed, May 09, 2012 @ 08:23 AM

Jack B. HarrisonJack B. Harrison

New technology has made it increasingly easier for employees to access and take employer data for uses that are often not in the employer’s interest.  This requires increased vigilance on the part of employers to protect their businesses and assets.  Here are a few of those areas that require employers’ attention:


Increasingly, employers are being faced with situations where restrictive covenant agreements they have with employees are being breached through the use of social media by employees.  For example, disgruntled or departing employees with non-compete or non-solicitation agreements may make use of social media to communicate with a prohibited audience in an effort to avoid the specific restrictions contained in their non-compete or non-solicitation agreements. 

In a relatively recent Indiana case, Enhanced Network Solutions Group v. Hypersonic Technologies Corp., the defendant subcontractor, who had a non-solicitation agreement with the plaintiff company, used its LinkedIn account to post a position description.  An employee of the plaintiff saw the position posting and applied for the position and was hired.  Enhanced network Solutions Group sued, alleging that by posting the position to its public LinkedIn profile, Hypersonic Technologies Corp. had violated the non-solicitation agreement.  While the court ultimately found that Hypersonic’s actions were not, in fact, a violation of the non-solicitation agreement, the lawsuit itself evidences the risks that employers may face from the use of social media.


Because companies increasingly make use of social media to publicize themselves, their products, their events, or their news, an employer’s social media presence is an asset that must be protected. 

In PhoneDog v. Kravitz, a recent California case, Kravitz, who had served as the voice of the company’s Twitter account took the company’s Twitter password with him when he departed.  He subsequently changed the account into his own name and continued to post messages.  The company sued Kravitz, asserting that the Twitter account’s password and its followers were themselves trade secrets which Kravitz had misappropriated.  The company argued that through his actions Kravitz had damaged the company’s economic relationship with Twitter followers and advertisers by taking over the Twitter account, in that it led to a decrease in traffic to the employer’s website and to its advertisers’ content. 

While this case is currently ongoing, it does serve as a reminder to employers of the need to vigilantly protect their own social media assets.


The advent of cloud storage has created another avenue for an enterprising employee to abscond with an employer’s proprietary and confidential information in the hopes of making use of the information in work with a future employer.  Cloud storage allows an employee to upload an employer’s proprietary and confidential data to a cloud storage account and then to download it from the cloud to a new employer. 

Earlier this year, in the case of Elliott Greenleaf & Siedzikowski v. Balaban, a law firm sued a former partner for, among other things, misappropriating data.  Elliott Greenleaf & Siedzikowski alleged that Balaban had uploaded multiple files from the firm’s computer system to a free cloud storage space, Dropbox, before departing the firm.  According to the law firm, this action allowed the former partner to continue to have access to and to transfer the firm’s data after he had in fact departed the firm. 

Prior to the advent of free cloud repositories, an employee would have had to directly access an employer’s computer network to transfer data, thus increasing the risk that she would be caught.  Now, because much cloud storage automatically transfers and synchronizes data across multiple devices, the movement of data by an employee preparing for her departure may be less noticeable. 

In developing computer use policies, employers must address cloud-based employee misconduct and must take steps to secure their electronic systems against uninvited cloud access. 

Tags: Non-Compete Agreements, Cyber Misconduct, Social Media Policy in the Workplace, Restrictive Covenant Agreements, Employees' Social Media Use, Non-Solicitation Agreements, LinkedIn, Cloud Storage, Twitter

Improper Denial of Worker's Compensation Claim May Lead to Federal Court Suit

Posted on Tue, May 08, 2012 @ 01:45 PM

David J. Schmittby David J. Schmitt

An April 6, 2012 decision by the United States Court of Appeals for the 6th Circuit  in a worker’s compensation related case may have wide-ranging implications for Ohio employers.

The case of Brown v. Cassens Transport, et al, 2012 U.S. App. Lexis 6929 (6th Cir. 2012) arose out of work-related injuries suffered by claimants in Michigan. The employees sought workers compensation benefits under Michigan law, and their claims were denied by the employer’s third-party administrator (“TPA”). As a result, the employees filed suit in federal court against their employer, the TPA, and the doctor who evaluated their injuries (under contract to the employer). In the federal suit, the employees alleged that the defendants had conspired to fraudulently deny their claims, in violation of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”).

Specifically, the employees alleged that Cassens and the TPA conspired by mail, wire, or other electronic means, to solicit fraudulent medical reports from the physician, who they also claim lacked the expertise in orthopedics necessary to properly evaluate their claims. They claim the doctor was biased by the money paid to him over the years by the employer and the TPA.

The federal district court dismissed the case for failure to state a claim. The 6th Circuit Court of Appeals, however, reversed stating that Supreme Court precedent indicates that RICO is to be read broadly and interpreted liberally. The 6th Circuit also found that the statutory entitlement to worker’s compensation benefits are property and therefore Michigan’s non-discretionary worker’s compensation scheme creates a property interest in the expectancy of worker’s compensation benefits.

Perhaps most importantly, the court found that “even if Michigan law does not create a property interest in such an expectancy, the plaintiffs’ claim for benefits is an independent property interest, the devaluation of which also creates an injury to property with the meaning of RICO.”

The 6th Circuit remanded the case to the district court for further proceedings, stating that for the workers’ RICO action to succeed they must prove that they suffered a quantifiable injury. They will have to show that they would have prevailed in the worker’s compensation claim or obtained a better outcome if not for the alleged fraud and conspiracy between the defendants.

What this means for employers: This decision creates the potential for a routine worker’s compensation case to quickly transform into a federal RICO lawsuit with the potential for triple damages and attorney’s fee awards. While not an exact duplicate, Ohio’s worker’s compensation system is similar to that of Michigan.

Since the 6th Circuit Court of Appeals governs Ohio (as well as Michigan, Tennessee, and Kentucky), employers would be wise to examine their relationships with their TPA’s and any physicians used regularly to evaluate workers compensation claimants to make sure that all of their dealings with these entities are arm’s length transactions.

Tags: 6th Circuit Court, Worker's Compensation, RICO, United States Court of Appeals, Brown v. Cassens Transport

EEOC Rules: Transgendered Employees Protected From Workplace Discrimination

Posted on Fri, May 04, 2012 @ 10:23 AM

Jack B. HarrisonBy Jack B. Harrison

The Equal Employment Opportunity Commission (EEOC) recently ruled that the Civil Rights Act protects transgendered employees from discrimination in the workplace.  In the specific case, the EEOC said that Mia Macy, a transgendered woman, could proceed with a charge of gender identity discrimination against the Bureau of Alcohol, Tobacco, Firearms and Explosives. Macy claims that she was not hired by the Bureau after she announced she was transitioning from male to female.

This decision provides several takeaways that diligent employers should keep in mind when making employment decisions:

Discrimination based on gender identity equals sex discrimination—

The EEOC concluded that Title VII prohibits not just discrimination based on sex, but also on the basis of gender—for example—on the “cultural and social aspects associated with masculinity and femininity.”  Consequently, employment decisions based on the transgender status of an employee could constitute gender discrimination.

The ruling represents a change of position for the EEOC in addressing discrimination claims brought by transgendered employees—

The EEOC had previously deemed claims of discrimination based on gender identity, or the transgender status of an individual, as not being actionable under Title VII.  However, in the Macy decision, the EEOC has made clear that its decision in Macy was intended to expressly overturn those prior decisions.

Employers may need to revise workplace policies—

The Macy decision should serve as a warning to those employers who are not located in jurisdictions where gender identity was already protected prior to the Macy decision.  Those employers should give consideration as to whether their company policies and training programs should be revised to address the new risk recognized by the EEOC.

The decision affects both public and private employers—

While the Macy case involved alleged discrimination in the government sector, the EEOC’s decision was not limited solely to the public sector.  It appears that the EEOC’s decision is equally applicable to the private sector.  As a result, private sector employers should be aware that the EEOC will consider discrimination against transgender employees or applicants to be prohibited by Title VII.

Tags: Transgendered Employees, EEOC, Equal Employment Opportunity Commission

Wealth Transfer in 2012 — Time to Act

Posted on Wed, May 02, 2012 @ 07:33 AM

Hans M. Zimmerby Hans M. Zimmer

If you have been thinking of updating your estate plans by reviewing strategies to transfer wealth to your children or grandchildren, 2012 may well be the time to act. We are currently in a legal environment regarding estate and gift taxes that has not been seen in the past 25 years and we may well never see it again after December 31, 2012.

Let’s review the estate tax history in Congress starting in 2000. In 2000, prior to George W. Bush becoming President, the amount exempt from the federal estate tax was $675,000 which meant that with some fairly basic estate planning, a married couple could leave $1,350,000 to their children free from the federal estate tax. Any amount over $675,000 for a single individual and $1,350,000 for a married couple was taxed at rates beginning at 35% and topping out at a mind-boggling 55% for estates above $5,000,000. The next 10 years presented quite a challenge for persons and their advisers who wanted to create the “best” strategy to transfer wealth either at death or during their lifetimes without triggering a substantial tax burden. From 2001-2010, thanks to the political wrangling in Congress, wealthy clients and their advisers were left with a situation where unless they could accurately predict the year of their death, the tax consequences were uncertain. The reason for this uncertainty was that the legislation signed by George Bush in 2001 was a 10-year law that would end December 31, 2010 unless the law as extended or modified prior to that time. If the law was not renewed, the amount exempt from the estate tax and the tax rates would return to their 2001 levels. The exempt amounts and the tax rate during that 10-year period were as follows:


2002                            $1,000,000                  Top tax rate – 50%

2003                            $1,000.000                  Top tax rate – 49%

2004                            $1,500,000                  Top tax rate – 48%

2005                            $1,500,000                  Top tax rate – 47%

2006                            $2,000,000                  Top tax rate – 46%

2007                            $2,000,000                  Top tax rate – 46%

2008                            $2,000,000                  Top tax rate – 45%

2009                            $3,500,000                  Top tax rate – 45%

2010                            unlimited**                 Top tax rate – 0**


During this same time, lifetime gifts had their own set of rules and as a general guideline, during a person’s life, the maximum amount that could be transferred without triggering gift taxes from 2001 through 2010 was $1,000,000. Any lifetime gifts above that amount were subject to gift tax starting at a base rate of 35% and increasing to a top rate identical to the estate tax. For practical purposes, this caused persons to not enter into substantial gifting programs during their lifetime because of the relatively low amount that could be transferred without triggering the tax.

At the end of 2010 (on December 29, 2011 to be exact), Congress somewhat unexpectedly acted to keep the estate tax laws from reverting to 2001 levels but also added several features that make 2012 an extremely crucial year both for advisers and their clients. For 2011, the amount exempt from the estate tax was increased to $5,000,000. For 2012, that amount is increased to $5,120,000. Even more significantly, until December 31, 2012, the amount exempt from gift tax is also $5,120,000. This increase in the gift tax exemption is to a great extent unprecedented as prior to 2011, the exemption from gift tax had never exceeded $1,000,000. The exempt amount at death had been higher than $1,000,000 for the last decade but not the amount exempt for lifetime gifts.

This law is set to end on December 31, 2012. Unless a new law is passed on or before that date, estate and gift tax exempt amounts and their associated tax rates return to 2001 levels. Making any predictions as to what the law will be on January 1, 2013 is not the purpose of this article other than to say that it would be foolish not to take a serious look at lifetime transfers during 2012. The family may decide that such a transfer is not part of the family plan but we should still look at it closely. We are currently in an environment where a married couple has the opportunity to transfer up to $10,000,000 ($5,000,000 for a single person) to the next generation or even to grandchildren and younger generations. Prior to this year, the opportunity to make lifetime gifts without tax consequences did not exceed $1,000,000 per person and that opportunity may well not exist past the end of this year. Congress has seen a number of proposed modifications to the estate and gift tax structure introduced ranging from a total elimination of the estate and gift tax to a return to limits only slightly higher than those in 2001. The Obama administration has its own proposal calling for a cap on lifetime transfers of $1,000,000 and an exemption at death of $3,500,000 starting January 1, 2013. Simple math tells me that the difference between my ability to make a $5,000,000 gift this year and under the Obama administration’s proposal is approximately $1,858,000.

Looking at the difference in the gift tax in terms of actual dollars presents a startling figure, doesn’t it? Time to act may be running short. Even if you ultimately decide not to make a gift during 2012, you owe it yourself and your family to at least review the situation closely.

Many other techniques besides outright gifts are available and could be incorporated into estate plans or into transfers of family assets or family businesses. Family partnerships, Grantor Retained Annuity Trusts (GRATs) and numerous other techniques are options in certain situations and should be reviewed along with outright gifts to make sure the right strategy is selected for both family and tax objectives.

Tags: Estate Planning, Taxation, Federal Estate Tax, Lifetime Gifts, Gift Tax, Gifting Programs, Family Partnerships, Grantor Retained Annuity Trusts, GRATs

Creating Effective Policies to Regulate Social Media

Posted on Tue, May 01, 2012 @ 09:28 AM

Jack B. Harrisonby Jack B. Harrison

Use of social media increasingly exposes employers to potential liability for what their employees may do or say in various social media forums or for the manner in which an employee uses various emerging technologies.  This development makes it important for employers to develop, implement, and enforce clear social media policies in the workplace in order to avoid potential litigation and liability.

How can an employer face litigation and potential liability based on what an employee may do on a social media website or based on an employee’s use of some emerging technology?   

Here are just a few examples:

  • Federal Equal Employment Law (Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act), as well as similar state laws, protect against unlawful employment practices in the workplace.   For example, where an employer knows its employees are being sexually harassed through social media and takes no action, that employer arguably violates the law.
  • The Fair Credit Reporting Act prohibits an employer from obtaining and using some types of background information without first obtaining authorization from the employee or prospective employee.  Where, for example, a supervisor uses a mobile phone application to check an applicant’s credit record and then refuses to hire her based on what he learns, may subject the company to liability if authorization has not been provided or if the proper notices have not been given.
  • The Health Insurance Portability and Accountability Act protects against the unauthorized disclosure of personal health information. But imagine a situation where hospital employees post details of patient medical care to their Facebook page in describing their day.  Such postings could expose the employer to HIPAA liability.
  • The Uniform Trade Secrets Act, which has been adopted in some form by the vast majority of states, which protects against the disclosure, misappropriation and use of a company’s information, where the economic value derives from the fact that is not generally known to and not readily ascertainable by proper means and the owner takes reasonable steps to protect its secrecy. An employee who discloses his former employer’s trade secrets on his new employer’s website or on its blog could subject the new employer to liability.

These examples are only a few of the various theories under which an employer could be found liable for an employee’s use of social media.

An effective social media policy should:

  • Fit within the strategic vision of how the employer uses electronic media in its business;
  • Be consistent with the employer's policies on: discrimination, harassment, retaliation, ethical practices, intellectual property, trade secrets, information technology, and technology/electronic resources use policies;
  • Be clear about who the policy applies to and specifically identify the media to which it refers, including social networks, blogs, YouTube, Twitter, text messages, bulletin boards and chat rooms;
  • Contain clear statements about limitations on expectations of privacy, including the employer’s ownership of the computer, the employer’s right to monitor and access social media during and after employment, and the existence of an “audit trail” as to activity conducted on a company computer;

Regarding employer-sponsored social media:

    • Require employees to take responsibility for what they post, to create excitement about the employer’s business and to add value; to be respectful and use good judgment; to complain to human resources about any misuse of social media.
    • Prohibit employees from disclosing company confidential and trade secret information; posting personal and privileged information like attorney-client and doctor-patient communications; soliciting for non-company activities; slacking; “friending” subordinates on Facebook or similar sites; posting anonymously or pseudonymously; and violating other company policies through the use of social media.

Regarding non-employer-sponsored social media:

    • Require employees to comply with all company policies; to post a disclaimer for any comments relating to the company; to be truthful and respectful; to resolve human resources complaints internally; to contact HR or a manager for needed clarification.
    • Prohibit employees from disparaging the company, its employees, and the competition; from using the company’s graphics or photos of the company; from posting anonymously or pseudonymously about the company; and from violating company-mandated blackouts.

Finally, the policy must state clear consequences for violations of the policy and be implemented in a manner to insure that managers, information technology staff, and other employees are trained to understand and follow them.  Additionally, an employer will have to monitor, enforce and re-evaluate the policy as necessary.

Tags: Social Media Policy, Social Media, Fair Credit Reporting Act, Health Insurance Portability and Accountability Ac, Uniform Trade Secrets Act, Employer-Sponsored Social Media