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Internet Domain Name Theft Conviction May Be First in U.S.

December 21, 2010 Leave a comment

Internet Domain Name Theft Conviction May Be First in U.S.

By Mary Pat Gallagher

New Jersey Law Journal

December 14, 2010

In what prosecutors are calling the first U.S. conviction for theft of an Internet domain name, a Union Township, N.J., man pleaded guilty Monday to stealing a web address and selling it on eBay to an innocent buyer: former professional basketball player Mark Madsen.

Daniel Goncalves admitted to Superior Court Judge Stuart Peim that he stole the address, http://www.p2p.com, in 2006 by hacking into the account files on the website of GoDaddy, an authorized domain name registrar, and altering the registration information to transfer ownership of the domain to himself.

He pleaded guilty to unlawful taking, theft by deception and computer theft crimes — all second-degree offenses that each could have brought him 10 years in prison and a $150,000 fine. He will be sentenced in May, with the state recommending five years plus restitution.

Goncalves still faces civil liability for the theft in a suit by the site owners pending in federal court.

The stolen P2P address was short and easy to use, making it well-suited as a site for peer-to-peer file sharing: an increasingly popular form of online networking that allows easy transfer of files among multiple users. Napster was an example.

Goncalves’ listing of the site on eBay caught the eye of Madsen, then a professional basketball player for the Minnesota Timberwolves with a sideline of buying up potentially desirable domain names in the hope that he could turn around and sell them for a profit.

Unaware it was stolen, Madsen paid $111,211 for the site and still had it when the original owners sued him, along with Goncalves, in federal court in Newark on Nov. 16, 2007.

That suit was pending when, in May 2009, Goncalves was arrested by the State Police Cyber Crimes Unit based on an investigation that began the previous October when the site’s owner, P2P.com LLC, reported the domain theft. A state grand jury indicted him on Nov. 16, 2009, on seven counts. In addition to the three he pleaded to on Monday, he was charged with second-degree identity theft and three fourth-degree counts of falsifying records by sending phony e-mails to create the appearance he had bought the domain from P2P for $5,000.

Meanwhile, last July 9, Chief U.S. District Judge Garrett Brown Jr. in Trenton administratively terminated the civil suit, P2P.com LLC v. Goncalves, 07-cv-5449, pending the outcome of the criminal matter. George McCarter of McCarter & Higgins in Red Bank, who represents P2P.com, says he will quickly notify Brown that the criminal case is resolved and ask that the civil case be restored to the active docket.

The nine-count complaint, filed by P2P.com and Freedom United LC, both Florida companies, accuses Goncalves and his company, EliteHost LLC, of hijacking and selling three web addresses: the P2P.com site as well as drugoverdose.com and profreedom.com. It includes claims against Goncalves for racketeering, fraud and violation of the federal Computer Fraud and Abuse Act, and against both Goncalves and Madsen for tortious interference, conversion and trespass to chattels.

The plaintiffs claim that when they learned the P2P address had been swiped and demanded its immediate return, Goncalves responded that he had bought it from P2P while Madsen, through his lawyer, also claimed to be the rightful owner. Madsen denied knowing that he was buying stolen property and counterclaimed against the plaintiffs for malicious use of process and tortious interference. He also cross-claimed against Goncalves for breach of contract, fraud and indemnification.

Madsen was let out of the case in April after he settled with the plaintiffs, returning the domain name to them and assigning them his claims against Goncalves. Madsen will share in any recovery based on a graduated scale, says his lawyer, Keith Miller of Robinson, Wettre & Miller in Newark. Miller describes Madsen as “completely hoodwinked” by Goncalves and says the suit “became a major distraction” that he “didn’t want to be in the middle of.”

Madsen’s basketball career included three years with the Los Angeles Lakers, from 2000 to 2003, during which the team won two NBA championships, and four years as a college player at Stanford University. He served as an assistant coach for the Utah Flash and is now at Stanford University pursuing an MBA.

Deputy Attorney General Kenneth Sharpe was the prosecutor. Rachel Goemaat, a spokeswoman for the Division of Criminal Justice, says Goncalves’ is the country’s first known conviction for domain name theft but declines to comment on the plea or on why the civil case alleges three stolen sites when criminal charges were lodged as to only one.

Goncalves’ criminal defense attorney, John Young Jr. of Willis & Young in Jersey City, says Goncalves, 26, is a “nice kid” but “nice people sometimes do stupid things.” Noting that Goncalves had a web-hosting company, Young thinks taking the address “started off as a challenge in his mind to see if he could do it” but got out of control.

Goncalves’ civil lawyer, Michael D’Aquanni of Springfield’s Roth D’Aquanni, could not be reached for comment.

 

Federal Law Regarding Lunch Breaks

December 21, 2010 1 comment

Federal Law Regarding Lunch Breaks

Introduction

One may feel numb or tired working continuously for long hours without having any breaks.  This will obviously reduce the productivity and efficiency of an employee.  Most of the employers may feel happy by seeing their employees working continuously without taking any breaks.  Is it allowed for an employee to take time off from his/her job?  Certainly yes!  A lunch or a meal break is an approved period of time under the federal law.  This Federal law, the FLSA (Fair Labor Standards Act), permit employees to eat or engage in permitted personal activities.

Legal Right of Employees during Work Hours

There is a federal rule that says a break has to be at least 20 minutes long to be a paid one.  Under federal rules only, employers do not need to give most employees lunch or other types of breaks at all.

Lunch and meal breaks are largely a function of state law, which means different states have different rules.  Some states not only require the employer to provide lunch and other breaks, but also imposes very specific penalties for failure to do so.  Understanding your legal obligations as an employer as well as your employees’ legal rights is key to running a successful business.

As an employer, there are two guiding pieces of legislation on employment hours that you should familiarize yourself with – the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA).  Both provide guidance for employers on the rules and regulations that govern employee rights and labor laws with regard to vacation and sick leave, meal and other breaks, as well as flex time.  According to a study, the amount of time people are taking for lunch breaks in the United States is shrinking, thereby making the term “lunch hour” a myth.  Some employers request the lunch to be taken at their work station or not offering lunch breaks at all.  Many employees are taking shorter lunch breaks in order to compete with other employees for a better position, and to show their productivity.

In some places, such as the state of California, meal breaks are legally mandated. Penalties can be severe for failing to adequately staff one’s business premises so that all employees can rotate through their mandatory meal and rest breaks.  For example, on April 16, 2007, the Supreme Court of California, in Murphy v. Kenneth Cole Productions, Inc. 40 Cal. 4th 1094 (2007), held that employers must allow their employees to take time off for lunch or meal breaks.  In Murphy, a former store manager sued Kenneth Cole, a small upscale retail clothing store, claiming violations of wage and hour law and asserting that he was improperly classified as an exempt employee.  After leaving his employment, Murphy filed a complaint with the labor commissioner.  The labor commissioner awarded Murphy unpaid overtime, interest and a waiting time penalty.  The employer appealed. On appeal, Murphy added a claim for unpaid meal and rest periods, pay stub violations and interest and attorney’s fees.  The trial court awarded Murphy unpaid overtime, payments for missed meal and rest periods and pay stub violations, waiting time penalties and pre-judgment interest plus attorney’s fees.  The court of appeal affirmed the lower court’s judgment that Murphy was a non-exempt employee and thus entitled to overtime.  The court of appeal reversed the judgment to the extent the trial court issued an award for missed meal and rest periods for pay stub violations as such claims were not raised before the labor commissioner.  In addition the court of appeal held that the additional payment for meal/rest period violations is a penalty not a wage, and therefore is subject to a one year statute of limitations.  The California Supreme Court, however reversed and held that the additional hour pay provided for in California Labor Code §226.7 constitutes a wage premium payment, which is subject to a three year statute of limitations, not a penalty.

The aftermath of this decision is that, employers now face additional liability when they fail to properly pay employees for not only wages, but also for not providing meal and rest periods as required under the wage hour orders.  One or two missed meal periods, and/or a missed meal period, provides for each one hour of additional pay.

Legal Right of Employers during Work Hours

Although employer’s rights are considered wide with regard to allowing lunch and meal breaks, still they cannot be held liable for actions arising during unpaid lunch or meal breaks on certain circumstances.  When employers allow at least 20 or 30 minutes as breaks for their employees they are free from their liabilities in two different ways.  Firstly, they won’t be penalized for disallowing unpaid breaks for their employees (which is a standard set in labor laws).  Secondly, employers will not be personally liable to pay compensatory benefits for the liabilities incurred by their employees during the course of unpaid lunch breaks. In EMB Contracting Corp., 2008 NYWCLR (LRP) LEXIS 29 (NYWCLR (LRP) 2008), a Workers’ Compensation Board panel affirmed the workers’ compensation law judge’s decision disallowing the claim of a roofer who was hit by a car while returning from his lunch break.  In EMB Contracting Corp., while an employee returning from his lunch break, the claimant was struck by a car and taken to the hospital.  The motor vehicle accident occurred approximately two blocks away from the work site.  In rejecting the claimant’s argument that the accident occurred in the course of his employment, the panel noted that although the employer paid for the half hour lunch break and told the claimant when he should take his break, the employer did not specify where the claimant should eat his lunch. The claimant submitted no evidence of special circumstances that would render the claim compensable, such as a direction on the part of the employer, performance of a duty during the lunch hour, or a lunch period at an odd time caused by something connected with the work.

Therefore, it was held by the court that during the lunch hours in the absence of special circumstances, such as a direction on the part of the employer, performance of some duty during the lunch hour, or a lunch period at an odd time caused by something connected with the work, an employee is not considered to be in the course of his employment when an accident occurs during his lunch hour.

Misuse of lunch breaks by employees will force their employers to terminate their employment.  Moreover, in Grusendorf v. City of Oklahoma City, 816 F.2d 5390 (1987), after signing employment agreement to refrain from smoking during first year of employment, a firefighter was terminated for drawing three puffs on unpaid lunch break after “a particularly stressful day” during the first year of his employment.  Firefighter brought suit based on violation of right to privacy and liberty.  Therefore the United States court of appeals for the federal circuit Court held that, although the court ruled in favor of the employer, the court based its reasoning on the employer’s status as a state agency and applied only a rational scrutiny standard to the employer’s no-smoking policy.  This reasoning may not apply to private employers in part because the 10th Circuit indicated that there is protected liberty interest within the 14th Amendment that protects the right of employees to smoke during non-working hours. Grusendorf, 816 F.2d at 543.

In addition, the Tennessee Supreme Court in Wait v. Travelers Indem. Co., 240 S.W.3d 220 (Tenn. 2007), held that injuries sustained during an employee’s lunch break were compensable under the state’s workers’ compensation act.

Employees are not permitted to consume alcohol during their working hours which includes lunch breaks or rest breaks.

Work Break and Meal State Laws

The 22 states listed below have laws that include some sort of provisions for work breaks. Of the 22, only 19 specifically require a rest or meal break for adults, while only 7 specifically require a rest break in addition to a meal break for adults.

California
Colorado
Connecticut
Delaware
Illinois
Kentucky
Maine
Massachusetts
Minnesota
Nebraska
Nevada
New Hampshire
New York
New Jersey
North Dakota
Oregon
Rhode Island
Tennessee
Vermont
Washington
West Virginia
Wisconsin

But there’s still room for hope for lunch breaks in different states. Many states have passed laws regarding lunch break requirements. If you work in one of those states, your employer has to make sure that he complies with the state regulations.

Here is a summary of the individual state lunch labor laws. Note that not all industries are required to comply with these regulations in each state.

California – 1/2 hour after 5 hours worked, unless shift is only 6 hours

Colorado – 1/2 hour after 5 hours worked, unless shift is only 6 hours

Connecticut – if shift is 7.5 hours, 1/2 hour lunch after first 2 hours but before last 2 hours

Delaware – if shift is 7.5 hours, 1/2 hour lunch after first 2 hours but before last 2 hours

Illinois – required for hotel room attendants only

Kentucky – reasonable meal period between 3rd and 5th hour of shift

Maine – 1/2 hour after 6 consecutive hours

Massachusetts – 1/2 hour, if work is more than 6 hours

Minnesota – reasonable period, if shift is 8+ consecutive hours

Nebraska – 1/2 hour, off premises, at suitable lunch time

Nevada – 1/2 hour, if work is 8 consecutive hours

New Hampshire – 1/2 hour, after 5 consecutive hours – unless employee can eat while working

New York – 1/2 hour, if shift is more than 6 hours

North Dakota – 1/2 hour, if work is more than 5 hours

Oregon – 1/2 hour

Rhode Island – 20 minutes for 6 hour shift; 30 minutes for 8 hour shift

Tennessee – 1/2 hour, if shift is 6 hours

Washington – 1/2 hour, for 5 hour shift

West Virginia – 20 minutes, if work is more than 6 consecutive hours

Wisconsin- ½ hour after 6 consecutive hours’ work

New Mexico-  ½ hour

Guam- ½ hour, after 5 hours, except when workday will be completed in 6 hours or less and there is mutual employer/employee consent to waive meal period. Time worked is not considered unless nature of work prevents relief from duty.

Puerto Rico- 1 hour, after end of 3rd but before beginning of 6th consecutive hour worked. Double-time pay required for work during meal hour or fraction thereof.

If you have questions about your individual state, you should contact your state’s department of labor.

If your state isn’t listed, it means that there is no state law that specifically addresses work breaks or meals.

Even if your state doesn’t have a law that specifically addresses work breaks or meals, it might have related regulations or guidelines that do.  Alternately or additionally, your municipality might have a work break law or related orders, regulations or guidelines. To find out, start by contacting the relevant state labor department.

Employers may grant more work breaks or those of longer duration than state or municipal laws require, but not fewer or of shorter duration.

In states and municipalities where there are no laws or related regulations or guidelines with work break or meal provisions, under the FLSA work break and meal periods are a matter of voluntary agreement between employers and employees or employers and unions.

If your employer is violating work break or meal provisions in state laws or the FLSA, the relevant state labor department might help you to right the wrong.

Payment for Break and Meal Periods: Under 29 CFR 785.18 (Code of Federal Regulations) breaks of five to twenty minutes must be paid by the employer while, for a meal period to be unpaid, has to be at least 30 minutes uninterrupted by work. Note again, however, that federal law does not mandate breaks or meal periods.

Conclusion

If you are human, you have to eat.  If you have a job, you will probably work several hours during the day, most likely across the normal lunch time.  Thus, you probably wonder about lunch labor laws.

Hourly workers are most concerned about the law regarding their lunch breaks, but a recent study found that 90% of salaried workers held an hourly job at one time in their life.  The Fair Labor Standards Act (FLSA) does not require that meal or rest breaks be given. Short breaks (five to 20 minutes), however, which are given to employees as a matter of company policy, are generally considered to be compensable and to count toward the 40-hour workweek.  That policy must be clear and specific on taking breaks, and employees are not entitled to extend these breaks and receive compensation without prior authorization. Companies that offer short breaks as a matter of policy should be clear and specific about time and frequency, and must then count that time as part of the regular workday.

Those states which do not have any laws regarding breaks or meal periods, then those benefits are a matter of agreement between the employer and the employee.  Failing to adhere to state laws concerning breaks can be costly.  Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 922 A.2d 710, 2007 LEXIS 599 (N.J. 2007).  In Wal-Mart, the subject of the issue was a several multimillion dollar lawsuits for failing to give workers mandated breaks and for forcing workers to work off the clock. If a lunch break is considered compensable because the employee is not completely relieved of duties, the extra time worked may be compensable as overtime under federal law.  Furthermore, the New Jersey Supreme Court, in Wal-Mart, permitted two former employees of Wal Mart to proceed with a state wide class action on behalf of some 72,000 employees in which the class representative allege that they were denied required rest and meal breaks, and were forced to work “off the clock”.

Don’t Ask, Don’t Tell foes plan to fight on in court, despite policy’s repeal

December 21, 2010 Leave a comment

Don’t Ask, Don’t Tell foes plan to fight on in court, despite policy’s repeal

By Karen Sloan

The National Law Journal

December 20, 2010

Don’t Ask, Don’t Tell is on its way out, but the litigation surrounding the policy will stick around for a little bit longer.

The Log Cabin Republicans — which first challenged the constitutionality of the policy in 2004 — said it wouldn’t pull its lawsuit until Defense Secretary Robert Gates certifies the repeal.

“Until the Secretary of Defense certifies that servicemembers are not going to be discharged under this policy, Log Cabin Republicans continue our appeal to the 9th Circuit,” said Clarke Cooper, the executive director of the gay rights group. He noted that Gates has indicated that he would certify repeal only with the approval of each service chief. Commandant of the Marine Corps James Amos supports retaining the policy, and that may “cause further problems.”

Any certification letter must stipulate that changes to military policy and regulations have been made, and that those changes won’t hurt the military’s readiness. After certification is completed, the repeal would go into effect in 60 days, said White & Case partner Dan Woods, who represents the Log Cabin Republicans.

“The repeal is certainly helpful for our case,” Woods said. “The only problem is that it isn’t effective for many, many months.”

U.S. District Court Judge Virginia Phillips ruled on Sept. 9 that Don’t Ask, Don’t Tell violates the First Amendment rights of gay and lesbian servicemembers. The government appealed the ruling and oral arguments are scheduled for Feb. 22 before the U.S. Court of Appeals for the 9th Circuit.

“I expect that the government will want all the litigation related to Don’t Ask, Don’t Tell stayed,” Woods said. “I’m not sure how we can agree to that without some conditions. We might agree to stay if the government won’t discharge people. We don’t yet know what the repeal means, and neither does the government.”

The status of another Don’t Ask, Don’t Tell lawsuit in Washington state is also in question. U.S. District Judge Robert Leighton ruled on Sept. 24 that the U.S. Air Force violated the due process rights of former Maj. Margaret Witt, who was discharged in 2004 for being a lesbian. The Justice Department appealed that decision in late November. Witt is represented by Sarah Dunne, an attorney with the ACLU of Washington.

“It’s Monday morning and I’ve heard no word or comment from the Justice Department on the appeal,” Dunne said. “I think it’s too soon. I certainly hope they drop the appeal. We feel like the repeal of Don’t Ask, Don’t Tell is a wonderful moment.”

The Justice Department did not respond to calls for comments on the status of the Witt or Log Cabin Republican cases. The repeal bill also does not address whether servicemembers who were discharged under the policy can be reinstated.

Karen Sloan can be contacted at ksloan@alm.com.

Anti-Robo-Signing Strictures Adopted For N.J. Residential Foreclosures

December 21, 2010 Leave a comment

Anti-Robo-Signing Strictures Adopted For N.J. Residential Foreclosures

By David Gialanella

New Jersey Law Journal

December 20, 2010

The state judiciary on Monday announced a set of measures in reaction to the “robo-signing” scandal in residential mortgage foreclosures.

Based on documented accounts of lending institutions rubber-stamping foreclosure paperwork, the court entered an administrative order directing lenders to show that there are no irregularities in their review processes.

The Supreme Court also adopted emergent rule changes that put the onus on lenders’ attorneys to police their clients’ practices. An attorney representing a foreclosing lender must now file an affidavit or certification confirming the attorney has communicated with a lender’s employees who confirmed the accuracy of the documents; to submit the names of those employees; and to file an affidavit or certification confirming that the filings comply with Rule 1:4-8(a), which mandates that attorney-filed papers have evidentiary support.

 

In a teleconference with reporters on Monday, Chief Justice Stuart Rabner said the additional obligations imposed on attorneys are consistent with existing foreclosure practice. “I would expect that attorneys will be able to comply with this,” he said.

Rabner said he took this action after reviewing a Nov. 4 report by Legal Services of New Jersey and a Nov. 16 report by a congressional oversight panel. Both found that lenders have been signing off on documents in support of foreclosure requests that they haven’t verified, a problem precipitated by lenders’ employees asked to sign stacks of affidavits without looking at the underlying papers.

In the administrative order, Acting Administrative Director of the Courts Glenn Grant singles out six of the state’s most prominent mortgage lenders as allegedly participating in robo-signing activities: Bank of America, JPMorgan Chase, Citi Residential, Ally Financial, OneWest Bank and Wells Fargo.

Grant listed specific instances of suspect verification practices by employees of those six lenders, including:

• A JPMorgan Chase employee whose eight-person team executed about 18,000 affidavits per month, none of which she reviewed before signing.

• A Citi employee who signed documents without review, had no industry experience and “could not even explain what precisely an assignment of mortgage accomplishes.”

• A OneWest Bank employee who executed 750 documents per week, spending no more than thirty seconds to examine each one.

• A Wells Fargo manager who signed 300 to 500 documents over a two-hour period each day. Managers who held her position were authorized to sign as “vice president of loan documentation” for purposes of executing the documents, but weren’t company officers in any other respect.

Grant also directed 24 other lenders, which each filed 200 or more New Jersey residential foreclosure actions in 2010, to demonstrate within 45 days that their foreclosure processes contain no irregularities.

A third prong of the judiciary’s plan, issued by Mercer County General Equity Judge Mary Jacobson ordered that the six lenders show why their processing of New Jersey foreclosure matters should not be suspended as a result of their implication in the robo-signing practices.

Those companies were ordered to make submissions by Jan. 19, when Jacobson will hold a hearing. As head of the Administrative Office of the Courts’ Office of Foreclosure, Jacobson is responsible for reviewing all foreclosure complaints.

Retired Union County Superior Court Assignment Judge Walter Barisonek was recalled on Monday to serve as a special master in charge of receiving the lenders’ submissions explaining their processes, beginning on Jan. 3. Barisonek will review those submissions, request testimony or other additional information, and decide whether to refer any of the lenders to Jacobson for further review.

Together, the 30 lenders named account for 75 percent of New Jersey foreclosure actions in 2010, Rabner said.

Ninety-four percent of the state’s foreclosure cases “proceed in the absence of any meaningful adversarial proceeding,” Grant said in the order.

“The significance of this disparity is even more striking because many of the contested proceedings are defended pro se,” Grant said. “Because these actions frequently lack an aggressive defense, the Office of Foreclosure and our General Equity judges are tasked with the responsibility of ensuring that justice is done for absent and pro se parties.”

Grant’s order said the alleged practices have the potential to call into question the validity of affidavits, certifications and other documents, as well as the integrity of foreclosure records, the judicial system and titles passed through purchase at foreclosure sales.

The New York state judiciary recently began requiring attorneys to make filings similar to those mandated in the New Jersey rule amendments, and attorneys general in at least four states and the District of Columbia have dictated such requirements, Grant said in his order.

E. Robert Levy of Levy & Watkinson in Woodbridge, executive director of the Mortgage Bankers Association of New Jersey, says the judiciary’s goals are “laudable,” but could have an unintended impact.

“When you issue a blanket order … the effect of that is the costs for consumers seeking loans generally will go up,” Levy says. “The slower the process in getting back your money [through foreclosure proceedings], the slower the process in getting money back out there [to lend].”

Levy is “also somewhat concerned from a lawyer standpoint,” he says, adding that he expects attorneys will be held to a high level of due diligence when certifying in court that their client-lenders’ employees have sufficiently reviewed foreclosure documents before signing off on them.

In the 2006 court year, plaintiffs filed 21,752 foreclosure actions; the number swelled to 65,222 in the 2010 court year.

Mediation In The Boardroom

December 9, 2010 Leave a comment

Mediation In The Boardroom


by Clive Lewis 

December 2010

Clive  Lewis Clive Lewis specialises in mediating workplace and employment cases and has been mediating disputes since 2002. His qualifications include an MBA, CEDR and ADR Group Mediator Accreditation and membership of the Chartered Institute of Personnel Development (CIPD). He has mediated hundreds of disputes. He was an advisor to the Department for Business and the CIPD on the Gibbons review of simplifying UK workplace disputes processes. His book ‘The Definitive Guide to Workplace Mediation and Managing Conflict at Work’ was published in January 2009. Clive is a Board member of the Civil Mediation Council and chairs the Council’s Workplace Committee. Clive writes the employment and workplace mediation documentation for the legal website Practical Law Company.”

The management of conflict at work probably represents the biggest unrecognised area for cost savings and market differentiation for organisations today. There is a proven business case for managing conflict at work. To date though, suppliers of mediation services have had limited success in persuading executives to fully engage adopting mediation and conflict resolution strategies. There are a few reasons for this.

First, it can be easy to ignore, avoid or simply put off dealing with conflict. It is one of those matters that require a large amount of energy and effort to deal with. It is often much more convenient to do something else. Secondly, acknowledging that conflict is present can be seen as recognition of failure. Few people, particularly senior managers want to be associated with failure. Third, some problems can go away quickly if you throw money at them. This is far easier to do in the private sector and probably explains why the public sector accounts for around 75% of the revenue related to the workplace mediation market. It also probably demonstrates why three quarters of disputes going to Employment Tribunals are linked to the private sector. Fourth, is a lack of understanding in the board room about how the impact of conflict affects the bottom line. Examples include a decrease in productivity, employee engagement, employee attraction and health & well-being. There is also likely to be an increase in sickness and absence rates, customer complaints, employee turnover and legal fees. On this last point, recent figures indicate the cost of legal fees continue to rise with the average company spending £5.8m on legal fees every year.

Employment Tribunal statistics for 2009/10 highlight a 56% increase in claims year on year. Three of the main increase claim areas are redundancy, breach of contract and unfair dismissal. Dealing with the effects of disputes takes valuable time of team members often meaning that they have to postpone working on value-add areas.

Tension exists at board level too. It can be a prerequisite that part of the criteria for becoming a board room member is that individuals aren’t backward in coming forward. The added dimension about conflict in the boardroom is that it can spill over to affect various parts of the organisation. For example, if team members get wind of the fact that their boss is engaged in conflict with a colleague it can mean that they take sides with their leader. In extreme cases, silos may develop as whole functions may refuse to collaborate with each other out of a sense of loyalty.

The mediation process

Mediation is a tool that increasing numbers of organisations are using to help resolve disputes. In mediation, a neutral, independent third party facilitates a process to help parties find a solution to problem. Some advantages of mediation are that:

  • It’s quick – Most mediation sessions last around one day compared to 12 days to managing a case that is going to an Employment Tribunal
  • It saves money – issues can be settled quickly and can avoid further direct and/or indirect costs
  • It doesn’t stop you litigating – your statutory rights are not affected by participating in mediation
  • It’s not soft and fluffy – mediation is hard work and can focus on pragmatic and commercial solutions

The mediation process is voluntary, confidential and without prejudice. The mediator is neutral and impartial.

Mediation has both operational and strategic dimensions. At the operational level mediation can help get parties talking again. At a strategic level, mediation can help identify organisational learning needs and reduce business risk. An example of this latter aspect can be seen as part of the costs of some of the strikes that have hit the UK recently. As well as the direct costs flowing from the disruption of a strike, an organisation may loose corporate customers forever and associated goodwill. Conflict represents a significant risk for organisations.

Mediation in the boardroom – the benefits

Operational Level

  • Solves disputes
  • Gives line managers their time back
  • Improves customer service
  • Reduces absence
  • Improves team work
  • Gets people talking again

Strategic level

  • Helps organisational learning
  • Helps form succession planning
  • Improves productivity savings
  • Increases the likelihood of achieving organisation objectives
  • Enhances competitiveness
  • Improves employee engagement
  • Improves organisational health and well-being
  • Can be linked to operational and financial reviews
  • Compelling business case for corporate and social responsibility
  • Reduces business risk

Case study

Pursar Technologies is a FTSE 250 global business. A dispute developed between its marketing director, customer service director and chief technology officer. The background to the dispute was that the customer service director sent an email to the chief executive with a proposal on direction for the company. The marketing director and chief technology officer were copied in. The marketing director replied to everyone in the email asking the customer service director to explain why he had proposed an idea about how the company should be adjusting its marketing strategy without discussing it with him first. The situation was made worse when the chief technology officer indicated that he would adopt a third marketing strategy. There was a big fall out. The chief executive decided to let the three of them sort it out. They couldn’t and eventually stopped talking to each other. They also stopped making joint visits to customers and collaborating on organisational initiatives.

Customers began to be negatively impacted and the sales pipeline started to slow down. Three months later the chief executive realised that something needed to be done about it. He engaged the services of a mediator. The mediator was locked in a room with the three executives for three hours. When the parties emerged they had agreed to put the dispute behind them. Apologies had been exchanged and it was back to business as usual. The chief executive was astonished. He was amazed that three months of stand off could be settled with a three hour conversation. He also realised that the organisation had paid a huge price for pontificating over a dispute that could have been nipped in the bud as soon as the original email had been sent.

Mediation can, therefore be a like a double edged sword. On one side it can be used to help get senior executives talking again. On another level it can be used to help build organisational capability, reduce organisational risk and increase competitive advantage.

Mediation in any organisation is unlikely to be highly successful unless members of the board understand its benefits and are willing to engage in mediation themselves when trouble strikes.

I end this article as I started. The management of conflict probably represents the biggest unrecognised area for organisational cost savings and market differentiation for organisations today.

Protracted Prosecutorial Probe Into Death Tolls Tort Claims Notice Date

December 9, 2010 Leave a comment

Protracted Prosecutorial Probe Into Death Tolls Tort Claims Notice Date

By Michael Booth

New Jersey Law Journal

December 8, 2010

An East Orange woman who waited more than a year to file a notice of claim against municipal police and a state hospital over her father’s death will be allowed to proceed despite the Tort Claims Act’s 90-day limitations period.

An Appellate Division panel ruled Tuesday that the delay was the result of extraordinary circumstances, namely, waiting for the Essex County Prosecutor’s Office to complete its investigation into the man’s death.

The plaintiff, Lavonne Johnson, is the administrator of the estate of Danny Garry, who died on July 24, 2008, at the University of Medicine and Dentistry of New Jersey, two days after the car in which he was a passenger was struck by an East Orange police car responding to an emergency call.

Johnson learned from her aunt that day that her father had died but did not know all of the facts behind what caused the death. She first went to the East Orange police, who told her that Garry’s death was being investigated by the Essex County Prosecutor’s Office.

Eventually she was questioned by Det. Howard Johnson of the prosecutor’s office, who indicated in his questions that investigators were looking into the possibility that Garry’s death might have been caused by his girlfriend pushing him down a flight of steps.

The detective said he could not discuss the case with her any further and provided no additional information.

On June 9, 2009, the detective told Johnson the report into Garry’s death was complete and that if she wanted to review it she should retain an attorney. Johnson did so and the attorney, Ronald Ricci, filed a request for the report shortly thereafter. The prosecutor’s office released the report to Ricci on Sept. 9, 2009.

The report said the car in which Garry was riding was struck by an East Orange police car on July 22, 2008, and that Garry was treated and released from University Hospital. Johnson had been told by her aunt that Garry might have died at East Orange General Hospital.

Garry had difficulty walking after being released and returned to University Hospital on July 24. He died that day from complications of a ruptured spleen that had gone undetected.

On Oct. 1, 2009, Ricci asked for permission to file a late notice of claim. Essex County Superior Court Judge Claude Coleman denied the request, saying Johnson was aware of her father’s accident, that she should have exercised reasonable diligence in trying to find out the circumstances behind the accident, and that there were no extraordinary circumstances to warrant filing a late claim. Johnson then appealed.

Appellate Division Judges Anthony Parrillo and Joseph Yannotti, in Johnson v. East Orange Police Department, A-1793-09, said Johnson did act reasonably and allowed her to file a late notice of claim against the police department and the hospital.

“We are convinced that the trial court erred by refusing to permit plaintiff to file a late notice of claim…” the judges said. “In our view, plaintiff acted with reasonable diligence in endeavoring to obtain relevant facts about the accident.”

It was not until her attorney obtained the report that she learned that the East Orange police were involved and that there could be a claim, and that her father had been treated and released from University Hospital, they said.

“Plaintiff acted reasonably in waiting for the completion of the ECPO’s investigation before retaining an attorney,” Parrillo and Yannotti said. “We are therefore convinced that, under the circumstances, the discovery rule tolled the time for accrual of any claims plaintiff may have against defendants.”

Ricci, of Woodland Park’s Ricci & Fava, was away from his office and could not be reached for comment. Assistant East Orange Corporation Counsel Kevin Harris did not return a telephone call seeking comment.

Lee Moore, a spokesman for the Division of Law, which represented UMDNJ, said officials there would not comment because the matter is still being litigated.

Provable Injury Not Essential to Claim Excessive Force Used in Handcuffing

December 9, 2010 Leave a comment

Provable Injury Not Essential to Claim Excessive Force Used in Handcuffing

By Charles Toutant

New Jersey Law Journal

December 7, 2010

Physical injury from handcuffing is not a prerequisite to a finding of use of excessive force by police, a federal judge in Camden ruled Tuesday.

In a §1983 case where a jury found constitutional violations but awarded only $1 in damages, District Judge Joseph Irenas rejected a township’s motion to strike the finding of liability, finding that physical injury is only one indicia of the amount of force applied.

Irenas’ published ruling, in Velius v. Township of Hamilton, 09-cv-00053, arose from the arrest of Ivan Velius on drunken driving charges after a minor motor vehicle accident. He sued officers of the Hamilton Township Police Department in Atlantic County, claiming they handcuffed him too tightly and ignored his pleas to loosen the cuffs. He says he suffered “excruciating pain” for a half-hour.

At trial of his §1983 suit, he presented medical evidence to suggest he suffered nerve damage from the tight cuffs. A jury concluded on Oct. 12 that officers Francis Smyth and Kevin Zippilli used excessive force while arresting Velius and that they failed to intervene to stop the use of excessive force. But the jurors awarded only nominal damages, finding he had not proven injury by a preponderance of the evidence.

A. Michael Barker, the attorney for Hamilton Township and the officers, moved to alter the judgment under Fed. R. Civ. P. 59(e), asserting that there could be no Fourth Amendment violation without an injury. He argued that the jury’s finding of no injury was tantamount to new evidence, which requires the court to alter its judgment.

Irenas said that because the defendants’ argument was premised on the jury’s finding of no injury, they could not have raised the issue earlier, and the issue was ripe for review.

But he rejected the motion, pointing to the Third Circuit’s model jury instructions for excessive force, which instruct jurors to consider “whether the physical force applied was of such an extent as to lead to unnecessary injury.”

Citing the jury instructions, Irenas wrote that an evaluation of whether the amount of force used was reasonable should consider :

the severity of, and the risks posed by, plaintiff’s conduct;

whether plaintiff posed an immediate threat to the safety of the defendants or others;

the possibility that plaintiff was armed;

whether plaintiff was actively resisting arrest or attempting to evade arrest by flight;

the duration of each defendant’s action;

the number of persons with whom Defendants had to contend; and

whether the physical force applied was of such an extent as to lead to unnecessary injury.

Irenas also cited a comment to the jury instructions, which said “physical injury is relevant but it is not a prerequisite of an excessive force claim.”

Finally, he cited Sharrar v. Felsing, 128 F. 3d 810 (1997), another excessive force suit naming a New Jersey police department. There, the Third U.S. Court of Appeals said that “we do not agree that the absence of physical injury necessarily signifies that the force has not been excessive, although the fact that the physical force applied was of such an extent as to lead to injury is indeed a relevant factor to be considered as part of the totality.”

Irenas also rejected the assertion by Barker, the township’s attorney, that the officers were entitled to qualified immunity. Barker claimed that a reasonable officer, having placed a subject in handcuffs in a manner that caused no injury, pursuant to a reasonable arrest, could not have known that his actions violated the Fourth Amendment. Irenas said the Sharrar ruling put officers on notice that the “presence or absence of a physical injury is but one relevant factor to consider in the Fourth Amendment excessive force analysis.”

Irenas found that the township’s lawyer read too broadly the Third Circuit’s ruling in Gilles v. Davis, 427 F. 3d 197 (2005), which upheld dismissal of a suit by a man who raised a claim of excessive force based on overly tight handcuffs. The only evidence supporting the subject’s excessive force claim was his own testimony that he told officers he was in pain. But a videotape of the arrest did not show him to be in discomfort.

Irenas said that Gilles did not contradict Sharrar‘s holding but rather can be read as “an application of the principle that the presence or absence of physical injury is probative evidence of whether the force used was excessive.”

However, Gilles does not stand for the proposition that the absence of physical injury means that no excessive force was used, Irenas said. Rather, it must be proved by other evidence.

Barker, of Barker, Scott & Gelfand in Linwood, says the township did not interpret the Gilles case as creating a rule of law requiring injury to demonstrate excess force. Rather, its position was that its officers did not commit a constitutional violation under the circumstances of the case. Velius left the scene of an accident, was validly arrested, was taken into custody without injury, registered a .22 blood-alcohol concentration, and was convicted of drunken driving. “We argued that none of the officers’ conduct rose to the level of a constitutional violation, or even if some court were to say it did, they were still entitled to qualified immunity,” he says.

Barker says it’s premature to discuss any appeal because the parties are still before Irenas on a fee application by Velius’ counsel. The town takes the position that the plaintiff is not entitled to fees because he is not a prevailing party, Barker adds.

The lawyer for Velius, Thomas Bruno of Abramson & Denenberg in Philadelphia, did not return calls.