When you have employees sign agreements with your company, it’s important that you keep in mind how those agreements contribute to protect intellectual property. As a general rule, employers who employ someone to work at their company do not have any right to restrain those employees from taking with them their knowledge or skills gained at the company. If you have sensitive intellectual property that you don’t want exposed to a competitor, what should you put into your employee agreements when someone starts? Can you add something to their employee agreement after they’ve started if you realize you didn’t have it in writing already?
Here are 3 things that we recommend putting in your employee agreements:
1. Confidential information clause.
Many employee agreements include a confidential information clause. This section of the agreement restrains the employee from using confidential information in future employment. It’s important to note that Pennsylvania law restricts the scope of these clauses to information that is truly confidential. Although not in Pennsylvania, a story that illustrates this point comes from Chicago courts, where Jimmy John’s had all its employees sign confidential agreements in an attempt to keep them from competing at other sandwich shops in the future as employees. This was held to be a violation of the law, in that there was nothing confidential about making sandwiches.
Similarly, you can’t just say that your information is confidential: you have to have something that is worth protecting. This “thing” that you want to protect could be a trade secret, a confidential process or even something like a customer or employee list. Confidentiality clauses are great, but they only protect that which you are already protecting. This is why it is best to supplement your confidentiality clauses with protection on your server and computers, as well as an employee handbook that reminds employees of the types of information that they are not to share with outsiders. In some cases, courts will even allow you to enforce this once they leave and go to another company.
2. Work for hire clauses.
Employees who work for you and come up with an invention, even on company time, may still be able to claim that they have ownership of rights of the invention. That’s why it is important that employers have a clause in their contract that says that anything that is invented in the scope of their employment belongs to the employer. Once again, as above, this is not a catch-all clause. The property that is being referenced must be something that was actually invented, and not merely some new way of doing something that is already in existence. An employee who is increasing their skills or doing better at the job that they are assigned has not invented something just because they have a better a way of doing it within the company. However, if they’ve invented something brand new, something that no one else has ever thought of, something that’s new both inside and outside of the industry, a work for hire clause can ensure that the invention belongs to the company and can only be used by the company in the future.
Courts have traditionally upheld these restrictions, especially where patents are involved. Having a work for hire clause in the agreement allows the company to be owner of the patent, rather than the individual or team that worked on it. This is also why it is important to have standard employee agreements across your whole company. If several people collaborated on the idea, it is important that all of them have signed some form of this agreement.
3. Trade secrets.
What happens when you discover something that can’t really be patented but which is a secret in your industry? Maybe it’s a special technique that no one else has figured out, a special recipe that’s impossible to reverse engineer or duplicate, or a complicated piece of machinery that is only used at your company? Your company may be able to restrain others from using it by claiming the trade secret doctrine. Trade secrets are a complicated area of law and they are claimed far more commonly than they are able to be proven. Nonetheless, if your company really does own something that is a secret, protecting it becomes vitally important. That is why you want to have an agreement with your employees that identifies the trade secrets and makes it clear to the employee that the employee can’t use it outside of the scope of the company’s employment, including once they leave. Such agreements are enforceable but are strictly construed against the employer.
Can I require existing employees to sign new agreements?
This brings us to an important question. What if you’ve been working with certain employees and you become concerned that they may use your intellectual property or leave your company? If that’s the case, it is still possible to have those employees sign agreements, but courts have generally held that you have to offer the employees something new—something more than ongoing or continued employment—in order for them to be legally enforceable. Some employers will offer a bonus for those that sign the agreements and others have offered promotions and a raise. It is important that any such contract be supported by some additional consideration that the employee was not entitled to already.
Conclusion
Contact the business lawyers at Cornerstone Law Firm to support your business. If you own a business with intellectual property, it’s important that you have lawyers who understand the world of IP, including copyrights, trademarks, patents, trade secrets and more. At Cornerstone Law Firm our business attorneys have litigated these cases to the highest level and can explain the ins and outs of your situation to you. Contact us today for a consultation on your business needs and let us help you figure out how to protect yourself now and in the future.
3 Ways to Protect your Company’s Intellectual Property
/in Business Law, Contracts /by Cornerstone LawWhen you have employees sign agreements with your company, it’s important that you keep in mind how those agreements contribute to protect intellectual property. As a general rule, employers who employ someone to work at their company do not have any right to restrain those employees from taking with them their knowledge or skills gained at the company. If you have sensitive intellectual property that you don’t want exposed to a competitor, what should you put into your employee agreements when someone starts? Can you add something to their employee agreement after they’ve started if you realize you didn’t have it in writing already?
Here are 3 things that we recommend putting in your employee agreements:
1. Confidential information clause.
Many employee agreements include a confidential information clause. This section of the agreement restrains the employee from using confidential information in future employment. It’s important to note that Pennsylvania law restricts the scope of these clauses to information that is truly confidential. Although not in Pennsylvania, a story that illustrates this point comes from Chicago courts, where Jimmy John’s had all its employees sign confidential agreements in an attempt to keep them from competing at other sandwich shops in the future as employees. This was held to be a violation of the law, in that there was nothing confidential about making sandwiches.
Similarly, you can’t just say that your information is confidential: you have to have something that is worth protecting. This “thing” that you want to protect could be a trade secret, a confidential process or even something like a customer or employee list. Confidentiality clauses are great, but they only protect that which you are already protecting. This is why it is best to supplement your confidentiality clauses with protection on your server and computers, as well as an employee handbook that reminds employees of the types of information that they are not to share with outsiders. In some cases, courts will even allow you to enforce this once they leave and go to another company.
2. Work for hire clauses.
Employees who work for you and come up with an invention, even on company time, may still be able to claim that they have ownership of rights of the invention. That’s why it is important that employers have a clause in their contract that says that anything that is invented in the scope of their employment belongs to the employer. Once again, as above, this is not a catch-all clause. The property that is being referenced must be something that was actually invented, and not merely some new way of doing something that is already in existence. An employee who is increasing their skills or doing better at the job that they are assigned has not invented something just because they have a better a way of doing it within the company. However, if they’ve invented something brand new, something that no one else has ever thought of, something that’s new both inside and outside of the industry, a work for hire clause can ensure that the invention belongs to the company and can only be used by the company in the future.
Courts have traditionally upheld these restrictions, especially where patents are involved. Having a work for hire clause in the agreement allows the company to be owner of the patent, rather than the individual or team that worked on it. This is also why it is important to have standard employee agreements across your whole company. If several people collaborated on the idea, it is important that all of them have signed some form of this agreement.
3. Trade secrets.
What happens when you discover something that can’t really be patented but which is a secret in your industry? Maybe it’s a special technique that no one else has figured out, a special recipe that’s impossible to reverse engineer or duplicate, or a complicated piece of machinery that is only used at your company? Your company may be able to restrain others from using it by claiming the trade secret doctrine. Trade secrets are a complicated area of law and they are claimed far more commonly than they are able to be proven. Nonetheless, if your company really does own something that is a secret, protecting it becomes vitally important. That is why you want to have an agreement with your employees that identifies the trade secrets and makes it clear to the employee that the employee can’t use it outside of the scope of the company’s employment, including once they leave. Such agreements are enforceable but are strictly construed against the employer.
Can I require existing employees to sign new agreements?
This brings us to an important question. What if you’ve been working with certain employees and you become concerned that they may use your intellectual property or leave your company? If that’s the case, it is still possible to have those employees sign agreements, but courts have generally held that you have to offer the employees something new—something more than ongoing or continued employment—in order for them to be legally enforceable. Some employers will offer a bonus for those that sign the agreements and others have offered promotions and a raise. It is important that any such contract be supported by some additional consideration that the employee was not entitled to already.
Conclusion
Contact the business lawyers at Cornerstone Law Firm to support your business. If you own a business with intellectual property, it’s important that you have lawyers who understand the world of IP, including copyrights, trademarks, patents, trade secrets and more. At Cornerstone Law Firm our business attorneys have litigated these cases to the highest level and can explain the ins and outs of your situation to you. Contact us today for a consultation on your business needs and let us help you figure out how to protect yourself now and in the future.
Victory for Attorney Eric Winter
/in Berks County, Updates /by Cornerstone LawYesterday in Lebanon County Attorney Eric Winter won a jury trial on an assault case on behalf of one of our clients. The case had lingered for nearly a year before the jury trial occurred and involved claims of domestic violence between a girlfriend and boyfriend. This was a classic case of he said/she said. This case carried serious consequences for our client if found guilty: charges of this nature could be either misdemeanor or felony charges and could have changed our client’s life permanently.
After excellent cross examination and demonstration from text messages that the fight was started by the individual claiming to be the victim, Attorney Winter was able to demonstrate to the jury that there was not enough evidence for a conviction beyond a reasonable doubt. This was a complete win for our client and a testament to Attorney Eric Winter’s twenty-three years of experience as a Berks County criminal defense attorney. It was also Attorney Winter’s fastest jury verdict to date. His client was acquitted in just 18 minutes.
As with all such cases the details of the case are vital to the outcome. From carefully interpreting and explaining the physical evidence to the jury to clarifying the implications of the digital evidence in the form of text messages, Eric Winter, of Cornerstone Law Firm, was able to reveal the truth of this matter to the ladies and gentleman of the jury. In addition to the details in this case, there were significant strategic decisions which shaped the scope of the evidence which the jury was allowed to see.
If you find yourself wrongly charged with a crime, you will want an attorney who has the experience, understands the details, and possesses the wisdom to make the crucial strategic decisions which will help you find justice. Please Call Cornerstone Law Firm if you’ve been charged with a crime, so that you can discuss your case and learn how best to defend yourself at a trial.
Cheated Out of Commissions
/in Business Law /by Cornerstone LawIf you’re in sales, you know the unique challenge of living and dying by your sales number each month or quarter. Working hard to continue to impress your employer and avoid the “What have you done for me lately?” mentality is part of the rough-and-tumble world of sales. But what happens when your employer tries to cheat you out of the commissions you’re owed? In today’s blog post, we tackle some of your options if your employer is reneging on an agreement to pay you a commission.
There are primarily three ways that our attorneys see employees cheated out of commissions. First is when an employer changes the terms of commissions partway through a job. The second is a lot more like a scam, where an employer goes around promising new salespeople jobs that pay commissions and then fires them after a few months of collecting sales before they ever pay. The third is when an employer tries to use complicated formulas to hide how much money is being made from sales.
First: Do you have to accept a change of commission?
In a situation where an employer changes the terms of the commissions in the middle of a project, Pennsylvania law has generally recognized that they have to pay what has been previously agreed to. As a simple example, if your employer agrees that for every service job you sell, you get 10% of the price, they can’t change in the middle of a sale that is almost completed and say now you only get 5%. They can, however change the rate for future sales. The gray area starts where an employer changes terms in the middle of a time period which might affect open sales. In this example, suppose an employer raises a base salary, but cuts commissions to 5% starting immediately on all sales, including those not concluded. In this instance, the change may be lawful, but the employee may also have the right to insist on the old contract until those sales are finalized.
Employees have several options in this situation. The first is to politely push back, whether by internal email or in a conversation with your boss. We always prefer to get things in writing, but even an oral conversation would suffice if there is a way to document it after the fact. An employer generally has the right to change future commissions, but an employee is within his or her rights to decline the change on open jobs.
The employer who refuses to pay earned commissions can be sued personally.
In situations where an employer refuses to pay commissions, you have powerful remedies under the law. You can sue the employer as well as any owners or officers of the employer. You are entitled to reimbursement of attorneys’ fees and penalties on top of the wages owed.
In addition, you may be part of a class action that has rights with other employees who were similarly cheated. If your “draw” doesn’t rise to the level of minimum wage with the time you’ve put in and without your commissions, you may also have a claim under the Minimum Wage Act in Pennsylvania or the Fair Labor Standards Act (FLSA) under federal law. Both of these allow powerful remedies.
If the math is complicated, make sure you’re not getting cheated.
Employers are allowed to offer complicated schemes to determine payouts and commissions, and sometimes these are in everyone’s best interest. But if the formula is complicated, make sure you are double-checking the numbers. If your pay is dependent on how much the company is making, you’re entitled to check the books regularly to see that your pay is being correctly calculated. In counseling employers, we often advise them that simple is better, because even unintentional mistakes can lead to lawsuits, attorneys’ fees, investigations and more.
Conclusion
If you have questions about a commission or unpaid wages, we welcome you to call us at Cornerstone Law Firm and set up a consultation with one of our attorneys. Our attorneys help employees who have been cheated out of wages to be made whole and to ensure that employers don’t get away with giving them less than what they deserve. We also counsel employers and help them find fair ways to compensate employees that make everyone more successful. Call for your consultation today.
Who owns an LLC?
/in Business Law /by Cornerstone LawLimited liability companies are one of the most important tools available to business owners to keep their assets safe. Forming an LLC under Pennsylvania law provides protection against creditors and provides clarity of ownership in case an employee or someone else tries to claim that they have some right to ownership of your company.
In Pennsylvania you do not have to list who the owner of an LLC is on the Department of State website. In most cases, the Department of State will not have any information at all, either public or private, about who the owner of the LLC is. Unfortunately, this sometimes brings about disputes between different people who claim to be owners of an LLC. So, who owns an LLC and how can you prove it?
The first and best evidence of ownership of an LLC is what is written in the operating agreement. An operating agreement is signed between the members of an LLC and lays out their ownership interest. In most cases, the ownership interest of an LLC cannot be changed without a unanimous vote of all owners. In rare cases, it can be done with a majority vote and a buyout where the operating agreement has specially provided for that option.
But what happens if you don’t have an operating agreement? What do you do if there is no written documentation at all of who the owners are? This can lead to some very messy situations, including where oral agreements between the alleged owners come into play. Courts will allow testimony to the ownership of an LLC that is oral, even if there is no signed or written document to back it up. Other evidence, such as history of transactions, proof of money invested, evidence regarding the time or effort invested (known as “sweat equity”) and evidence of statements made to third parties are all relevant in determining ownership.
Of course, the best way to prevent a dispute over ownership is to make sure that your operating agreement clearly outlines who the owners are and that you have clear rules laid out in advance on how someone can be purchased out of their ownership interest if there is a conflict. This allows a company to continue as a “going concern” and allows the owners to avoid conflict in advance. If your company doesn’t have this clear documentation, now is as good a time as any to reach out to a business law attorney and get this matter straightened out once and for all.
At Cornerstone Law Firm our attorneys help clients everyday to work out ownership disputes and to try to avoid them in advance, if possible. Our attorneys have litigated multi-million dollar disputes over LLC ownership, and have helped negotiate favorable resolutions out of court as well. If you own an LLC or if you’re part of a group of owners of an LLC, reach out to us to talk about your options in ensuring that your ownership interests are safe for the long term.
Mediation in Personal Injury Cases
/in Car Accident, Insurance, Personal Injury /by Cornerstone LawWhen you’ve been injured by someone else’s mistake, the long legal process that follows with insurance and lawyers can feel frustrating. Getting your injuries treated, dealing with medical bills and health insurance, and talking with an insurance representative about the value of your injury can add mental anguish to the physical pain you are experiencing.
One mechanism that our attorneys employ for getting the best settlement for our clients in a quicker manner is to pursue a mediation instead of going to court. This is a process where instead of going and having a trial in front of a judge or a jury, the attorneys on both sides of the case can meet with a mediator and try to resolve the case amicably.
A mediation involves hiring a third party, usually a retired judge or an attorney, to help both parties try to find a resolution they can agree on. These settlements usually involve a lot of compromise. As mediators often say, “A good settlement in a mediation is one that no one is totally happy with.” Usually, the insurance company pays a little more than it might otherwise have agreed to short of trial because they know how much a trial will cost them and that there is a risk that a jury gives a big award. The injured person may take a little less than they could have gotten at trial to avoid the additional months or years it would take to get money from the case.
Compromise might sound bad at first, but when you consider that mediations are less expensive and quicker than trials, injured clients often find that it’s best to take even a little bit less than they feel they could have gotten after a trial if they can get the money now and move on with their life. Mediations don’t always require compromise—sometimes it’s the perfect tool to help the insurance company see how serious the plaintiff’s injuries are and to get the case resolved.
Mediation is not the same as arbitration, which is a different mechanism we’ve talked about in other articles. Arbitration is less about compromise and is more like having a trial earlier in the process without a jury in the room. If you or someone you love has been injured in an accident or otherwise, talk to the personal injury attorneys at Cornerstone Law Firm to discuss how we can help you to reach a settlement in your case.
September 2022 Update
/in Berks County, Updates /by Cornerstone LawThis month Cornerstone Law Firm has added two new lawyers to our team. Craig Browne joins our firm to assist in general litigation, contract drafting, document review and more. Attorney Browne’s background includes substantial writing, motions practice and other drafting. Attorney Browne will be handling a broad range of cases including criminal law, family law, personal injury and more.
Federica Caloia received her favorable bar results last week, and joins the firm after an excellent academic career which recently concluded at Ave Maria School of Law. Attorney Caloia is an excellent writer and has a deep interest for understanding the public policy underpinning statutes and the common law. She will be assisting with matters ranging from criminal law to civil motions practice and more.
Our attorneys have worked hard this month to settle several personal injury cases arising from motors vehicle accidents and slip and falls caused by the negligence of others. These personal injury cases involve looking through medical records, determining the value of injuries, negotiating with insurance adjusters and company representatives as well as representatives of city governments who may be responsible for broken sidewalks or other defects that cause injuries.
Attorney Rauch-Mannino has worked hard this month to settle custody disputes, litigate divorces and work out appropriate equitable distribution for spouses going through difficult times.
Attorney Ready has finished several trials recently and is working on defending appeals brought by the other side of several cases. In addition to doing writing work on these appeals, Attorney Ready has been handling preliminary objection arguments, which is the beginning of the pleadings process for civil cases.
Attorney Distasio has handled a number of landlord tenant cases at Magisterial District Courts across Pennsylvania, as well as an oral argument on a breach of contract case in Pittsburgh.
Finally, all of our attorneys have been providing advice to business owners and landlords, helping them to navigate everything from tax issues to debt collection and more. If you have questions about a legal issue, contact the lawyers at Cornerstone Law Firm today for a consultation.
Pardon Me, But That Never Happened
/in Criminal Law /by Cornerstone LawEvery year, the Governor of Pennsylvania receives hundreds of pardon recommendations. Dating back more than two centuries in our state, a pardon is a mechanism by which an offender is freed from the burdens of a criminal conviction. When a pardon application is granted, notice of executive clemency is sent to both the Pennsylvania State Police and the Federal Bureau of Investigation. The pardon erases the prior finding of guilt and exempts the individual from any further punishment relative to that conviction. The offender is legally held out as innocent of the underlying offense no differently than had a non-guilty verdict been the original result. This does not mean, however, that the record of the original conviction is completely erased.
In the recent past, it was the case that unless a pardon recipient filed a petition for expungement following the issuance of a pardon, their criminal history record(s) could still appear on the Unified Judicial System of Pennsylvania’s Web Portal. Then, on October 29, 2020, Governor Wolf signed House Bill 440 into law as Act 83 of 2020. This Act automatically seals the criminal history records of pardoned offenses from the UJS Portal. This might sound like the record is made completely inaccessible, but that is not the case. Sealing the record only removes it from public view. While this greatly limits its access, the record still remains available for access via court order. This means that the offense which was erased and is considered never to have been committed can be quasi-resurrected and held against the offender. That is why expungement of the record remains paramount.
While sealing the record substantially hides it, the record still exists. Expungement, on the other hand, erases the record completely. The result is as if the record truly never existed. In order for a pardoned offender to request an expungement of the relevant criminal record, the individual must file a Petition for Expungement with the Court. Once granted, the Court’s order granting the petition is sent to the governing legal authorities to expunge the record in its entirety. Ultimately, this is the result a pardon should bring. Unfortunately, the process is not automatic. Knowledgeable legal representation is needed to ensure that a pardon has the real desired effect of erasing every record of the offense.
If you have received a pardon from a prior conviction and would like the record expunged, the attorneys at Cornerstone Law can help. Contact our office to schedule your consultation today.
Eric Winter joins Cornerstone Law Firm
/in Civil Law, Criminal Law, Updates /by Cornerstone LawCornerstone Law Firm is pleased to announce the addition to our team of Eric Winter. Attorney Winter is highly regarded in the legal community and has several decades of experience handling a broad range of administrative law, criminal cases, immigration and more. Attorney Winter has handled over 100 jury trials and brings his passion for courtroom justice to the team.
Attorney Winter does more hunting law than anybody else in Pennsylvania and is one of the busiest immigration attorneys in Berks County, Pennsylvania.
Eric has also done extensive work in family and civil cases, including tortes such as defamation, invasion of privacy and more. Eric’s knowledge of federal firearms law also allows him to help with gun rights restoration questions and similar areas. Cornerstone Law Firm is please to welcome Eric to the team.
Does it have to be Notarized?
/in Business Law, Contracts /by Cornerstone LawWe are often asked by clients whether it matters if a certain document is notarized. Under Pennsylvania law it is a very rare circumstance that a document must be notarized. The reason a notary stamps a document is to confirm that the signature is from who it purports to be from. This means that if Bob Smith says that they signed the document, the notary has checked the ID of Bob Smith and confirmed that it is indeed Bob Smith.
Beyond that, a notary stamp does not prove anything about a document. It does not prove whether the document is legally binding, whether it’s valid, whether there are defenses to it, or who is at fault for not upholding the contract that it is on.
Notary stamps are typically strongly recommended on wills because the person who signed it will not be alive when it is testified to. Notary stamps are important on Power of Attorney documents because of how important the powers are that the person is giving away. And, of course, banks and insurance companies often require documents to be notarized before they are mailed in to prove that it really is who is signing it, since they won’t meet the person.
Beyond these situations notary stamps really aren’t required. This is common question that we get. “I signed this document, but it’s not notarized. Does this mean I can get out of it?” The short answer is no, at least not because of the lack of a notary stamp. Now none of this means that getting something notarized is a bad idea, but simply that it does not in and of itself make a document any more binding than it already was.
If you are looking to dispute a document, notarized or otherwise, Cornerstone Law Firm can help. Contact us today for a consultation.
Eminent Domain: Theirs for the Taking?
/in Business Law, Civil Law, Construction, Property /by Cornerstone LawWe might be cheering when traffic circles are installed to curb accident occurrences or when roads are widened to accommodate an increase in traffic. Over time, country fields can give way to schools and public parks as a result of growing populations. Done in the name of progress, these projects certainly provide a public benefit, but they can come with private detriment. It is commonly the case that private parties hold legal title to the land needed for these public improvements. For this reason, it is important for all landowners to understand their rights when their private property might be seized for a public purpose.
Eminent domain is the legal doctrine by which a governmental body is permitted to condemn private property for public use. Often called a “taking,” this ominous sounding legal power might seem unopposable, but it is no foregone conclusion that any proposed taking will be permitted as constitutional. The landowner has various grounds on which to challenge a taking because the exercise of this power must conform to legal requirements. It is for the government to show that its exercise of eminent domain does not violate the constitution or state law.
First, any taking of private land must be for public use. Pennsylvania’s Property Rights Protection Act amending Title 26 expressly limits the powers of state and local governments to condemn private property for use by private entities. Outside of the enumerated exceptions, the government must show that its intended purpose for the land serves a public benefit and is not being used for a private enterprise. Common examples of recognized public purposes are roadways and schools.
Second, the government must pay the private owner just compensation for the property. The private owner is not relegated to taking just any offer extended by the government. The fair market value of the property is the standard measure, but this measurement will change in the event that only a portion of the property is taken. When only a portion of the property is taken, just compensation will be the fair market value of the entire property less the value of the portion remaining (fair market value minus the portion not being taken).
In the ideal situation, the landowner and the government will reach an agreement regarding the sale price and proceed with the property transfer without court intervention. When the parties cannot agree on a price, or when the landowner does not wish to sell, a condemnation action will commence. Not all condemnation cases are resolved in favor of the government. Pennsylvania caselaw provides many examples of attempted takings which were not permitted by the courts, so it is important to understand your rights and how you can fight to protect your property.
If you have been notified that the government intends to seize your property, or if you are facing a condemnation action, the attorneys at Cornerstone Law can help. Contact us to schedule a consultation today.