The Business Litigators
The Business Litigators
The Business Litigators
The Business Litigators
Patrick Austermuehle and Andrew Murphy were selected by Super Lawyers as Rising Stars
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You know how when you post a photo on Facebook of yourself with some friends and Facebook automatically prompts you to tag those people? And it doesn’t just prompt you to tag “your friends” it prompts you with their names because Facebook already knows what you and everyone else on Facebook look like.

While the immediate result is simply a matter of convenience, it’s also kind of scary to know that Facebook is using facial recognition software to identify you. That means that even if your friends don’t tag you in all their photos, Facebook still knows where you were and with whom.

Nimesh Patel was so upset by this idea that he sued Facebook, on behalf of himself and a class of other Facebook users, for allegedly violating their privacy. Although Patel lives in Illinois and the complaint alleges Facebook violated the Illinois Biometric Privacy Act (IBPA), the case has been moved to the federal court for the Northern District of San Francisco. The federal judge hearing the case has recently decided to certify the class, which means it will now be allowed to move forward through the courts.

In agreeing to certify the class, Judge James Donato also defined the parameters of the case, which consists of two main parts: 1) whether Facebook collected this biometric data on consumers under the IBPA; and 2) whether consumers were notified about the biometric data and its uses and had given their consent. Continue reading

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There are some things that doctors can also not be immune to: conflict in the workplace.  There is a growing recognition that professional behaviors and manners should not only extend to the patient.  Rather, they should encompass doctor to doctor relationships, as well as others that work with them.

Having a safe and less conflict in a workplace promotes better professional life quality overall.  This is because conflict creates opportunities to have less understanding amongst peers and undermines communication skills.  Toxic workplace environments become stressful, negative, increase anxiety and give rise to professional burnout.  This, in turn, affects the level of professional care delivered to patients and increases factors for the delivery of medical care with greater liability when it comes to malpractice suits.  Better understandings lead to fewer misunderstandings.

Rather than fearing or avoiding conflict (as is often the case), it can be seen in some cases as a positive opportunity to better understand other points of view, to grow as an individual, and to improve communication and interactions within an organization.

Sources of conflict arise from expectations that were not set clearly, lack of resources, competition for goals, values or resources. For those reasons, identification of sources of conflict early on should be a goal of achieving a workplace culture that fosters respect and effective workplace engagement for all workers collectively.

Tips for managing conflict can include the setting the standards of expectation via an effective employee handbook.  It must also be in compliance with state and federal laws and is always best if run past an attorney prior to implementation.  Having an attorney to mediate disputes is always handy as well.

Avoiding conflict means issues fester and can place issues on a lower scale of measure.  Time gets delayed and suits can follow. Continue reading

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There are so many changes that are made in accounting, auditing, tax and consulting standards that the overlooking of how disputes are solved is a very real possibility.  This is why users and providers of these services should be familiar with the benefits and disadvantages of the various different Alternative Dispute Resolution (ADR) Services.  We will, therefore, suggest that ADR clauses be used in the engagement of services contracts.

CPAs have to consider the wording of any ADR clause approved by a professional liability insurer and legal counsel. These days, most professional liability insurers advocate for the use of non-binding forms of dispute resolution and some may even require this in order to reap the benefits of insurance.

The most common ADR methods available are mediation and arbitration. These are also governed by the AAA’s Accounting and Related Services Arbitration Rules and Mediation Procedures. The process is fair and impartial. To ensure that the ADR clause does not affect a CPA’s independence, the wording must be drafted carefully and in line with the   AICPA Code of Professional Conduct  Rule in Section 1.228.  This gives a generic guide on the use of dispute resolution forums and liability limitation clauses. The inclusion of such clauses does not absolve liability of being unable to meet professional standards.  CPA’s may also need to be required to report a judgment in excess of $25,000 whether granted in court or arbitration.  This amount varies from jurisdiction to jurisdiction.  For that reason, knowledge of the rules is important.

Negotiation

The first step in the settlement of a dispute must always include negotiation.  Parties must make an effort to resolve in the best and least expensive way possible.  Sometimes, ego can come into play and undermine the process.  However, if parties are able to manage their emotions, it will be the most economic outcome, utilizing less time and money.  Negotiations can never take place in bad faith.  If so, involve an attorney that can carefully oversee and draft the proper terms.  They can also intervene on your behalf.  Continue reading

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Extra virgin olive oil (EVOO) is the highest grade of olive oil and people are often willing to pay a higher price for bottles claiming to be filled with EVOO. By definition, EVOO has been made by cold-pressing olives, without using any sulfates or other chemicals in the extraction process. It’s also supposed to have a superior taste compared to all the other forms of olive oil, although the average consumer is unlikely to be able to tell the difference. Unfortunately, there are plenty of olive oil manufacturers who rely on that ignorance.

Although we all do it, there are a few problems with buying a bottle just because it’s labeled “extra virgin olive oil.” The first is that bottles bearing that label are all too easy to obtain here in the U.S., despite the fact that real EVOO is the best of the best, and yet a glance at American grocery store shelves would have you believe that virtually every olive oil sold here is EVOO.

The truth is that EVOO is one of the largest (and oldest) scams in the world. Tests conducted by the University of California-Davis to the National Consumers League have found that more than half the olive oil labeled EVOO in the U.S. is actually adulterated with other oils, such as sunflower seed and peanut oils. Not only do these oils lack taste, they also lack the renowned health benefits of EVOO and can even cause allergic reactions in some consumers. Continue reading

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Trendy big-city restaurants are often here today, gone tomorrow. Such is the case with Grace, a hot West Loop eatery that earned three Michelin stars, a bevy of industry awards, and was the most coveted reservation in Chicago before its owner abruptly closed the restaurant late in 2017. Now, Grace’s former star chef and manager/sommelier are suing to void their noncompete employment agreements.

Head chef Curtis D. and general manager Michael M. were allegedly working together at Avenues restaurant in Chicago’s chic Peninsula Hotel, when they met Michael O.  Curtis and Michael M. had discussed opening their own restaurant which they wanted to name Grace, and found an eager investor in Michael O., who had no experience in the culinary industry. The three went into business together in 2011.

The complaint filed February 20 in Cook County Circuit Court describes the high-priced Grace restaurant as an immediate success upon its opening in 2014 and a “culinary jewel” of the city. It was reportedly profitable within eight months, and Michael O. recouped his entire $3 million investment in the restaurant within several years.

The plaintiffs claim their employment agreements, executed in 2012, were drafted by Michael O.’s attorneys and presented to them without the advice of their own counsel. The agreements contained covenants not to compete for 18 months following termination of employment.

They claim they were led to believe they were receiving ownership rights at the time they signed, when in fact they wouldn’t have the right to share in Grace’s profits for five years. Then the pair would each begin receiving a one-third share of the restaurant’s net revenues. Continue reading

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It may have once been thought that officers constituted as being fiduciaries in a manager-managed LLC setting. Who or what are fiduciaries? Fiduciaries are individuals in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit. Typically, it has been those members who operated the business that owed fiduciary duties of loyalty and reasonable care to non-managing LLC owners.  They normally uphold legal positions of trust with one or more parties and  take care of money or assets for another person.  Now, a managing member of an LLC is an individual who holds an ownership interest in the company, participates in its day-to-day management and has authority to contract on behalf of the company. So are managing members fiduciaries? Since most states have codified the fiduciary duties owed by officers and directors, a recent First District Court has affirmed a trial court finding that this is NOT the case.

In the case of 800 South Wells Commercial LLC v. Cadden, 2018 IL App (1st) 162882 (May 9, 2018) Cook Co., 3rd Div, (FITZGERALD SMITH), the courts looked at these issues in greater depth and length and gave more definitive answers in terms of scopes and duties of member-managed LLCs.  It looked at a situation that involved a manager-managed Illinois LLC which was formed to obtain a leasehold interest in River City Complex’s commercial space and parking garage and the manager and member appointed Cadden to be the LLC’s vice president. Within four years, the LLC defaulted on both its mortgages. The LLC claimed that fiduciary duties were owed only because he held the title of vice president. The Court was quick to grant summary judgment which went further to say that there was no evidentiary basis to demonstrate that any fiduciary duty was owed to the LLC.  Consequently, there was no breach.  Continue reading

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Illinois Appellate Court Ruling on Due Process Rights of Incarcerated Parents

A recent ruling in the Illinois Appellate Court decided if an incarcerated father had his due process rights violated because he was unable to attend a hearing terminating his parental rights since he was in a federal correctional facility in Wisconsin.

Two very young children J.S. and T.S. were found home alone by the Rockford police in their mother’s home. J.S. (seven years old) stated to the responding officers that he sometimes would babysit his brother T.S. (one-year-old). During the investigation, police found marijuana, scales, and a BB Pistol at the unattended home. The Department of Children and Family Service took J.S. and T.S. under protective custody. At this time their father was already in a federal correctional facility in Wisconsin. The father was previously indicted and convicted of drug trafficking crimes and possession of a firearm in furtherance of drug trafficking crimes. The father had other prior convictions.

As a result of the incident, the State filed neglect petitions as to J.S. and T.S. The trial court was aware that the father was in Wisconsin due to his incarceration. The trial court appointed counsel to the children’s father and a writ of habeas corpus was issued asking the federal correctional facility to have the father delivered to the trial court, but the writ was denied. Typically, the federal government does not honor a state writ of habeas corpus. The mother of the children stipulated to one count of the neglect petition, which alleged that the minors were left unsupervised for an unreasonable period of time. The trial court concluded that J.S. and T.S. were neglected minors and DCFS was appointed as their legal guardian and custodian. Continue reading

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A recent ruling in the Illinois Appellate Court decided a very tough decision about two very qualified parents and whether the one parent could move out of Illinois with their minor child, so she could pursue her dream job.

Two individuals were married and had one minor child, they decided to separate and had been granted joint custody and decision making for their child. While married the couple lived in the City of Chicago and then later moved to Downers Grove in their marital home. During the divorce proceedings the marital home was sold, and the father moved to a rental home a few doors down from the marital home and the mother moved to an apartment nearby. The minor child’s mother had the life long dream of getting her Ph.D. from a school in North Carolina. The mother petitioned the circuit court to relocate to North Carolina because she was successful in being admitted to the Ph.D. program that she wanted to attend and would work in her dream job while studying for her degree. Experts for both parents determined that both parents had a successful and nurturing relationship with their minor child and that she would succeed with either parent in Illinois or North Carolina. The father objected to his minor child moving away to North Carolina as, among other things, he would not see her as often and would not have as many in-person interactions with his daughter. Continue reading

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Courts and now legislators are competing against the trend of non-compete clauses in employment agreements.

For it is Democratic leaders that have joined the bandwagon in terms of wanting to prohibit the use of covenants not to compete nationwide. Per Senator Warren’s press release, implementation of the clauses will reduce bargaining power for employees, stifle competition and innovation.  All of that combined hurts Americans and their opportunities. This will eventually, in turn, give greater power to the Department of Labor.

If legislation was in place, there will most likely be a ban through fines on employers who either fail to notify employees that non-compete agreements are illegal or who require employees to sign covenants not to compete. Such a bill would specifically enact a law to protect its trade secrets. As it stands, no legislation is in place that would not allow that to happen. Continue reading

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The dismissal of a lawsuit filed against the Irving School District by the father of a child whose homemade clock was mistaken for a bomb.  It was alleged that the child’s civil rights were violated when the police charged with the making of a “hoax bomb.”  The federal complaint also addressed the issue of taking the child into custody and later dropping the charges.  Since it has been determined that the boy and his father are able to amend their lawsuit, they have until June 1 to make changes.  For that reason, it is likely that their claim has not ended there.

So the clock ticks and it is likely that a new lawsuit would be filed.  The student knew it was not a bomb, never threatened anyone and he never said it was one or alarmed anyone.  The lawyer further added that “despite all of those things, they yanked him out of his chair, put him in handcuffs and arrested him. There was no cause for arrest.”

The court rationale in the ruling was that Principals are responsible for the safety of the students and others on campus.  Part of that included making decisions for students and in the prospect of death.  The school now faces a lawsuit based on the Equal Protection Clause of the U.S. Constitution and Title VI of the Civil Rights Act of 1964.  The Judge dismissed the lawsuit indicating that there was no religious or racial discrimination.  “Plaintiff does not allege any facts from which this court can reasonably infer that any IISD employee intentionally discriminated against A.M. based on his race or religion,” the Judge wrote in his ruling.  This is one reason why facts need to be pleaded properly.  In a difficult case, the need of the students and their safety must be weighed against religious and racial profiling.  This is the same boy that Obama once applauded and now is being dismissed in a Trump’s America.  Mohamed was a 14-year-old freshman when the incident happened at his high school in September 2015. The charge against Mohamed was dropped, and the boy gained public support from President Obama, who invited him to the White House after saying that “we should inspire more kids like you to like science.” Continue reading