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Legal Risk Management Seminar Cowles & Thompson, PC
October 28, 2015
5 Major Mistakes Business Owners Make that Expose
The...
Failing to Meet Requirements for
Company Records, Reporting, and
Governance
1
Failure to Negotiate and Use
Contracts to Protect Company
Interests
2
Virtually Ubiquitous
Eligibility to File
for Chapter 7 or
Chapter 11 Relief
.
 No insolvency requirements
 No debt ceiling limitations
 No i...
Chapter 7
 Appoints an interim Chapter 7
 Right to elect a different
trustee
 Trustee is authorized to hire
counsel and...
Chapter 11
 Fiduciary of the bankruptcy
estate
 Remains in possession and
control of its assets
 The debtor will operat...
Unsecured
Creditors’
Committee
Represents the interests of the
unsecured creditors as a whole
Property of the Bankruptcy Estate
All legal and equitable interests of the
debtor in property of any kind at the time
the ...
The Automatic
Stay
Operates as a stay of “the
commencement or continuation…
of a judicial, administrative, or
other action...
The Automatic
Stay
Operates as a stay applicable to
all entities, of any act to obtain
possession of property from the
est...
The Automatic
Stay
• The automatic stay contains
exceptions
• Does not prevent the
commencement or continuation
of crimina...
Automatic Stay
The automatic stay protects only the debtor
and usually does not extend to separate legal
entities.
Howev...
Executory Contracts and
Unexpired Leases
Executory Contracts
Debtors are permitted to assume
executory contracts and unexpired leases
and assign those contracts or...
Executory Contracts
Contracts and leases cannot be assumed
or assigned if applicable non-bankruptcy
law would excuse the n...
Executory Contracts
As a condition to the assumption or assignment
of a contract or lease, the debtor must:
(i) cure or pr...
Executory Contracts
Upon rejection, the contract is deemed
breached, as if such breach occurred
immediately prior to the f...
Setoff and
Recoupment
The Code preserves any setoff
rights a claimant may have under
applicable non-bankruptcy law
Setoff
In order to establish a valid right of
setoff, the parties obligations must
arise prior to the commencement
of the ...
Recoupment
• Right of recoupment is similar to
that of setoff
• Recoupment must arise from the
same transaction or occurre...
Reclamation
Reclamation allows a
creditor to reclaim goods
previously shipped to the
debtor under the
applicable provision...
Sale of Assets
Debtor in possession is permitted to
operate the debtor’s business and as such
may use, sell or lease estat...
Appointment of a
Chapter 11 Trustee
The standard for appointment a trustee is
“cause” which is defined to include fraud,
d...
Dismissal and Conversion
The court may convert the chapter 11 case to
one under chapter 7 or dismiss the case –
whatever i...
Avoidance Actions
Preferences and Fraudulent Transfers
Fraudulent Transfers
(i) Made with the actual intent to hinder, delay or
defraud a creditor; or (ii) made in exchange for
...
Preferences
The analysis focuses on whether the creditor’s
position was improved by the transfer during
the preference per...
Definition of a Preference
1. There must be a transfer of property to or
the benefit of the creditor;
2. The transfer must...
Definition of a Preference
4. The transfer must have been made on or within 90 days
prior to the filing date of the bankru...
Definition of Transfer of Property
Almost any conceivable mode of disposing of
property is included.
Defenses to Preference Claim
New Value
Contemporaneous Exchange
Ordinary Course
New Value
The creditor must have given the
debtor money or money’s worth,
new credit or a release of
property previously t...
Contemporaneous
Exchange
• If the transfer was intended by
the debtor and the transferee to
be a contemporaneous
exchange;...
Ordinary Course
• Transfer must have been incurred in the
ordinary course of business or financial
affairs of both the deb...
Ordinary Course
If the timing of the payments
made by the debtor to you
during the 90 days pre-petition
are not consistent...
Ordinary Course
Courts will review the manner, the amount
and the timing of the payments made to see
whether the preferenc...
Preventative Measures
to Avoid a Preference
Maintain routine payment schedules
Require cash in advance or on delivery
O...
Fraudulent Transfers
• Transfers made by a debtor with the actual
intent to hinder, delay or defraud
• Transfers made for ...
Badges of Fraud
• Transfer made to an insider
• Debtor retain possession or control
• Transfer was concealed
• Debtor was ...
Constructive Fraud
• Transfer for less than reasonably
equivalent consideration
• Transfer leaves the debtor with
unreason...
Defenses to Fraudulent Transfer
Good Faith
Savings clause for an initial transferee that
gives reasonably equivalent value...
Failure to Proactively Deal With
Workplace Issues
3
EMPLOYEE HANDBOOKS
Employers should have them(!)
o Without a handbook, it’s more difficult to
defend EEOC charges of discr...
EMPLOYEE HANDBOOKS
But employers want to avoid
curtailing “at-will” employment
with handbooks, and in Texas, they
generall...
EMPLOYEE HANDBOOKS
Handbooks are not generally
treated as binding contracts:
"There is a 'generalized rejection [by
Texas ...
EMPLOYEE HANDBOOKS
Avoid promises of lifetime employment,
termination only for good cause, etc.
BUT—even these seldom crea...
EMPLOYEE HANDBOOKS
General statements …simply do not justify the
conclusion that the speaker intends by them
to make a bin...
EMPLOYEE HANDBOOKS
General comments that an
employee will not be discharged
as long as his work is
satisfactory do not in
...
EMPLOYEE HANDBOOKS
Without such agreement the employee cannot
reasonably expect to limit the employer's right to
terminate...
EMPLOYEE HANDBOOKS
Handbooks are generally not binding on the
employer. They are nothing more than a
guideline. If the emp...
EMPLOYEE HANDBOOKS
NLRB, however, frowns on too-broad at will disclaimers. e.g.:
“I further agree that the at-will employm...
EMPLOYEE HANDBOOKS
Here are some examples of issues that should
be in a handbook:
Acknowledgment of Receipt of Employee H...
EMPLOYEE HANDBOOKS
Discrimination, Harassment and Disrespect Toward
Others (including sexual harassment)
FMLA Policy
Fr...
EMPLOYEE HANDBOOKS
 Overtime
 Relationships Within The Workplace
 Request for Change in Employment Status
 Searches
 ...
INDEPENDENT CONTRACTORS
So-called “misclassification” of workers as independent
contractors when they are really employees...
INDEPENDENT CONTRACTORS
Traditional common law test centered on
“control” over the details of the way the work
is performe...
INDEPENDENT CONTRACTORS
USDOL and other
federal agencies, and
the federal courts,
look beyond control
to include other
fac...
DOL FACTORS
The extent to which the work performed is an integral
part of the employer’s business.
Whether the worker’s ma...
INDEPENDENT CONTRACTORS
4) The worker’s skill and initiative.
5) The permanency of the worker’s relationship
with the empl...
EMPLOYEE PRIVACY ISSUES
Non-consensual use of
employees’ name or likeness
Publication of Private
Information
Intrusion into Seclusion, i.e. search...
EMPLOYEE PRIVACY ISSUES
Searches
Key is to obtain
employee consent at
time of hire, and to
remove any reasonable
expectati...
Developing Privacy Issues
Medical Records
• ADA requires that
medical information
be kept in separate
files
• HIPPA does a...
EMPLOYEE PRIVACY ISSUES
Information received as an
employer record is not
protected by health privacy
rule. e.g.; FMLA hea...
Employer Monitoring of Electronic
Resources
• Give employees notice, get consent, get
acknowledgement
• Electronic Communi...
Video Monitoring
If no audio, not
subject to ECPA
but can still be
invasion of privacy, so
give employees
notice, get cons...
EMPLOYEE PRIVACY ISSUES
Examples of video monitoring which got
employers into trouble:
• Employer put video cameras in wom...
Lack of Comprehensive Immigration
Compliance Plan to Avoid Violations
and Claims
4
Investigates employers for compliance with
employment employer verification rules and removes
undocumented aliens from the...
Investigates and prosecutes charges of immigration-
related unfair employment practices
www.usdoj.gov/crt/osc
U.S. Departm...
PM Packing ordered to
pay $27,200 (reduced
from $53,762) for
paperwork violations,
including failure to
prepare I-9 for 22...
Golf International ordered to pay $57,650 (reduced
from $136,697) for paperwork violations, including
failure to sign sect...
Demand of Specific I-9 Documents Prohibited
RECENT CASES
Miami Dade County Public
Schools paid $90,000 penalty
and $125,00...
Immigration Compliance Plan
Recommended Policies and Procedures
I-9 procedures for hiring and re-verification
Anti-discrimination policies
Retention o...
Group training
Individual training
Sample training
Ongoing and periodic
Training and Supervision
Secure Recordkeeping
Separation Centralized Retention
Retention Calculation
Date of Hire__________+ 3 years =____________
Date of Separation ________+ 1 year = _________
Take t...
Consistency – do not treat workers differently because of
immigration status
No “citizen only” policy
Do not demand specif...
Violationsreportingandinvestigations
Consistency
Credible
reporting
Enforce, enforce, enforce!
Prepare for government audit
Identify errors
Identify training issues
Demonstrates good faith compliance
I-9 Self Audits
Conduct training
Ensure corrections are made
Review audit report and implement
procedural changes
Maintain ongoing project...
ICE Enforcement Action
Responding to ICE Enforcement Actions
 Choose a point person
 Ask to see documents
authorizing the search
of premises or...
Responding to ICE Enforcement Actions
 Ask about purpose
and scope of
inspection
 Accompany agents on
the search
 Compl...
Responding to ICE I-9 Inspection
 If I-9 inspection, don’t waive
right to 3-day notice (ask for
extension)
 Separate I-9...
Call an experienced attorney immediately
upon receipt of the NOI or initiation of
enforcement action and do not allow agen...
NO Annual Legal Review to
Uncover Hidden Risks and Reduce
Potential Losses
5
Legal Check-Up
• Diagnosis
• Treatment
• Prevention
Thank You
901 Main Street
Suite 3900
Dallas, Texas
75202
4965 Preston Park Blvd
East
Suite 320
Plano, Texas 75093
214-672-...
5 Major Mistakes Business Owners Make That Expose Them to Legal Risks
5 Major Mistakes Business Owners Make That Expose Them to Legal Risks
5 Major Mistakes Business Owners Make That Expose Them to Legal Risks
5 Major Mistakes Business Owners Make That Expose Them to Legal Risks
5 Major Mistakes Business Owners Make That Expose Them to Legal Risks
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5 Major Mistakes Business Owners Make That Expose Them to Legal Risks

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Presentation about the major mistakes business owners can make with critical business and legal management functions such as:

Protecting their business entity status, shielding personal assets, and planning for growth and business transition
Negotiating purchase agreements, customer contracts, leases, and other business agreements
Observing immigration employment eligibility verification requirements
Handling employer responsibilities and shielding against employee competition and loss of trade secrets
Managing legal exposure and defending against lawsuits

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5 Major Mistakes Business Owners Make That Expose Them to Legal Risks

  1. 1. Legal Risk Management Seminar Cowles & Thompson, PC October 28, 2015 5 Major Mistakes Business Owners Make that Expose Their Businesses to Huge Legal Risk, Severe Financial Loss and Bad Publicity
  2. 2. Failing to Meet Requirements for Company Records, Reporting, and Governance 1
  3. 3. Failure to Negotiate and Use Contracts to Protect Company Interests 2
  4. 4. Virtually Ubiquitous
  5. 5. Eligibility to File for Chapter 7 or Chapter 11 Relief .  No insolvency requirements  No debt ceiling limitations  No income requirements
  6. 6. Chapter 7  Appoints an interim Chapter 7  Right to elect a different trustee  Trustee is authorized to hire counsel and other professionals  Operate the Debtor’s Business
  7. 7. Chapter 11  Fiduciary of the bankruptcy estate  Remains in possession and control of its assets  The debtor will operate its business and conduct its affairs in the ordinary course
  8. 8. Unsecured Creditors’ Committee Represents the interests of the unsecured creditors as a whole
  9. 9. Property of the Bankruptcy Estate All legal and equitable interests of the debtor in property of any kind at the time the case is commenced, the proceeds of that property, and interests in property that the estate acquires after the commencement of the case.
  10. 10. The Automatic Stay Operates as a stay of “the commencement or continuation… of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case.”
  11. 11. The Automatic Stay Operates as a stay applicable to all entities, of any act to obtain possession of property from the estate or to exercise control over property of the estate.
  12. 12. The Automatic Stay • The automatic stay contains exceptions • Does not prevent the commencement or continuation of criminal proceedings against a debtor nor actions by the government in exercising its police and regulatory powers.
  13. 13. Automatic Stay The automatic stay protects only the debtor and usually does not extend to separate legal entities. However, despite the general rule, courts have held that the automatic stay can reach beyond a debtor to stay actions against non- debtor third parties, such as officers, directors and others. Actions brought by the debtor are not stayed.
  14. 14. Executory Contracts and Unexpired Leases
  15. 15. Executory Contracts Debtors are permitted to assume executory contracts and unexpired leases and assign those contracts or leases to third parties regardless of any prohibition on assignment in the contract or lease and over the objection of the non-debtor party
  16. 16. Executory Contracts Contracts and leases cannot be assumed or assigned if applicable non-bankruptcy law would excuse the non-debtor party from accepting performance from or rendering performance to any party other than the debtor
  17. 17. Executory Contracts As a condition to the assumption or assignment of a contract or lease, the debtor must: (i) cure or provide adequate assurance of a prompt cure of any monetary defaults; (ii) compensate the non-debtor party for actual pecuniary loss resulting from the debtor's default; and (iii) provide adequate assurance of the debtor’s (or assignee’s) further performance under the contract or lease
  18. 18. Executory Contracts Upon rejection, the contract is deemed breached, as if such breach occurred immediately prior to the filing of the bankruptcy petition. Rejection results in the non-debtor party having a general unsecured claim for damages arising from the rejection.
  19. 19. Setoff and Recoupment The Code preserves any setoff rights a claimant may have under applicable non-bankruptcy law
  20. 20. Setoff In order to establish a valid right of setoff, the parties obligations must arise prior to the commencement of the bankruptcy case and must be mutual obligations
  21. 21. Recoupment • Right of recoupment is similar to that of setoff • Recoupment must arise from the same transaction or occurrence
  22. 22. Reclamation Reclamation allows a creditor to reclaim goods previously shipped to the debtor under the applicable provisions of the Uniform Commercial Code
  23. 23. Sale of Assets Debtor in possession is permitted to operate the debtor’s business and as such may use, sell or lease estate assets in the ordinary course of that business Debtor in possession is permitted to use, sell or lease assets outside the ordinary course of business either through a confirmed plan or by motion under section 363
  24. 24. Appointment of a Chapter 11 Trustee The standard for appointment a trustee is “cause” which is defined to include fraud, dishonesty, incompetence or gross mismanagement
  25. 25. Dismissal and Conversion The court may convert the chapter 11 case to one under chapter 7 or dismiss the case – whatever is in the best interest of creditors – for “cause”
  26. 26. Avoidance Actions Preferences and Fraudulent Transfers
  27. 27. Fraudulent Transfers (i) Made with the actual intent to hinder, delay or defraud a creditor; or (ii) made in exchange for less than reasonably equivalent value, (a) while the debtor was insolvent or which rendered the debtor insolvent, or (b) which left the debtor with inadequate capital to continue in business, or (c) which rendered the debtor unable to pay its debts as they became due.
  28. 28. Preferences The analysis focuses on whether the creditor’s position was improved by the transfer during the preference period
  29. 29. Definition of a Preference 1. There must be a transfer of property to or the benefit of the creditor; 2. The transfer must be on account of an antecedent debt owed by the debtor before the transfer was made; 3. The transfer must have been made with the debtor was insolvent;
  30. 30. Definition of a Preference 4. The transfer must have been made on or within 90 days prior to the filing date of the bankruptcy petition (or within one year if the transferee was an insider of the debtor); and 5. The transfer must have enabled the creditor to receive more than it would have received in chapter 7
  31. 31. Definition of Transfer of Property Almost any conceivable mode of disposing of property is included.
  32. 32. Defenses to Preference Claim New Value Contemporaneous Exchange Ordinary Course
  33. 33. New Value The creditor must have given the debtor money or money’s worth, new credit or a release of property previously transferred that is not secured by an otherwise unavoidable security interest and on account of which the debtor did not make an otherwise unavoidable transfer
  34. 34. Contemporaneous Exchange • If the transfer was intended by the debtor and the transferee to be a contemporaneous exchange; • The exchange was for new value; and • The exchange was contemporaneous or substantially contemporaneous
  35. 35. Ordinary Course • Transfer must have been incurred in the ordinary course of business or financial affairs of both the debtor and the creditor; and • The transfer was made in the ordinary course of the debtor and the creditor; or • The transfer was made according to ordinary business terms
  36. 36. Ordinary Course If the timing of the payments made by the debtor to you during the 90 days pre-petition are not consistent with the debtor’s pre-preferential period payments, the preference period payments may be preferential
  37. 37. Ordinary Course Courts will review the manner, the amount and the timing of the payments made to see whether the preference period transactions fall within the typical range for either the parties’ or the industry’s payment terms
  38. 38. Preventative Measures to Avoid a Preference Maintain routine payment schedules Require cash in advance or on delivery Obtain collateral Always accept payment
  39. 39. Fraudulent Transfers • Transfers made by a debtor with the actual intent to hinder, delay or defraud • Transfers made for less than reasonably equivalent value • Transfers by a partnership to a general partner while the partnership is insolvent or by which it became insolvent • Transfers to self-settled trusts in which the debtor is a beneficiary
  40. 40. Badges of Fraud • Transfer made to an insider • Debtor retain possession or control • Transfer was concealed • Debtor was in litigation • Transfer involved all the debtor’s assets • Debtor was insolvent or was rendered insolvent • Unreasonable consideration for the transfer • Transfer was outside the ordinary course • Transfer involved shell entities
  41. 41. Constructive Fraud • Transfer for less than reasonably equivalent consideration • Transfer leaves the debtor with unreasonably small capital • Transfer caused the debtor to incur debts beyond its ability to pay
  42. 42. Defenses to Fraudulent Transfer Good Faith Savings clause for an initial transferee that gives reasonably equivalent value to the debtor for the transfer and the transferee exhibits good faith Burden of proof is on the transferee
  43. 43. Failure to Proactively Deal With Workplace Issues 3
  44. 44. EMPLOYEE HANDBOOKS Employers should have them(!) o Without a handbook, it’s more difficult to defend EEOC charges of discrimination, unemployment, etc. o Also, handbook is basic source of information for employees on rules at their place of employment.
  45. 45. EMPLOYEE HANDBOOKS But employers want to avoid curtailing “at-will” employment with handbooks, and in Texas, they generally can.
  46. 46. EMPLOYEE HANDBOOKS Handbooks are not generally treated as binding contracts: "There is a 'generalized rejection [by Texas courts] of the claim that employment manuals issued unilaterally by an employer can per se constitute written employment contracts and create specific limitations which take the cases out of the at-will doctrine.“ Hays v. HCA Holdings, Inc., 2015 U.S. Dist. LEXIS 131960 (W.D. Tex. 2015)
  47. 47. EMPLOYEE HANDBOOKS Avoid promises of lifetime employment, termination only for good cause, etc. BUT—even these seldom create enforceable contracts nullifying employment at will.
  48. 48. EMPLOYEE HANDBOOKS General statements …simply do not justify the conclusion that the speaker intends by them to make a binding contract of employment. For such a contract to exist, the employer must unequivocally indicate a definite intent to be bound not to terminate the employee except under clearly specified circumstances.
  49. 49. EMPLOYEE HANDBOOKS General comments that an employee will not be discharged as long as his work is satisfactory do not in themselves manifest such an intent. Neither do statements that an employee will be discharged only for "good reason" or "good cause" when there is no agreement on what those terms encompass.
  50. 50. EMPLOYEE HANDBOOKS Without such agreement the employee cannot reasonably expect to limit the employer's right to terminate him. An employee who has no formal agreement with his employer cannot construct one out of indefinite comments, encouragements, or assurances. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, (Tex. 1998)
  51. 51. EMPLOYEE HANDBOOKS Handbooks are generally not binding on the employer. They are nothing more than a guideline. If the employer included a phrase providing they are not contractual, then they will not be binding. e.g., progressive discipline provisions can be ignored if offense is serious.
  52. 52. EMPLOYEE HANDBOOKS NLRB, however, frowns on too-broad at will disclaimers. e.g.: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” NLRB thought that this language would cause employees to conclude that the at-will language means that their at-will status cannot be changed through collective bargaining.
  53. 53. EMPLOYEE HANDBOOKS Here are some examples of issues that should be in a handbook: Acknowledgment of Receipt of Employee Handbook Attendance Policy At-Will Employment; Handbook not a contract Company-Issued Credit Cards Confidentiality of Information Conflict of Interest Driver Policy Drug-Free Workplace Policy
  54. 54. EMPLOYEE HANDBOOKS Discrimination, Harassment and Disrespect Toward Others (including sexual harassment) FMLA Policy Fringe Benefits Exempt/Nonexempt employees Internet, E-Mail, and Computer Usage Policy Limits on Leave Benefits Medical Absence Warnings Medical Information Confidentiality Policy Neutral Absence Control Policy
  55. 55. EMPLOYEE HANDBOOKS  Overtime  Relationships Within The Workplace  Request for Change in Employment Status  Searches  Smoking Policy  Social Media Use Policy  Vacation and Sick Leave  Video Surveillance / Search Consent  Wage Deduction Authorization Agreement  Wage Overpayment/Underpayment Policy  Work Schedules and Recording of Work Time
  56. 56. INDEPENDENT CONTRACTORS So-called “misclassification” of workers as independent contractors when they are really employees is a top priority for the federal government. There are joint working agreements between IRS, DOL/WH, TWC to exchange info on employers who have a lot of misclassified employees.
  57. 57. INDEPENDENT CONTRACTORS Traditional common law test centered on “control” over the details of the way the work is performed, and Texas courts addressing state law issues still focus a lot on control.
  58. 58. INDEPENDENT CONTRACTORS USDOL and other federal agencies, and the federal courts, look beyond control to include other factors.
  59. 59. DOL FACTORS The extent to which the work performed is an integral part of the employer’s business. Whether the worker’s managerial skills affect his or her opportunity for profit and loss. The relative investments in facilities and equipment by the worker and the employer.
  60. 60. INDEPENDENT CONTRACTORS 4) The worker’s skill and initiative. 5) The permanency of the worker’s relationship with the employer. 6) The nature and degree of control by the employer.
  61. 61. EMPLOYEE PRIVACY ISSUES
  62. 62. Non-consensual use of employees’ name or likeness Publication of Private Information Intrusion into Seclusion, i.e. searches of person, property, medical exams, tests TRADITIONAL PRIVACY ISSUES
  63. 63. EMPLOYEE PRIVACY ISSUES Searches Key is to obtain employee consent at time of hire, and to remove any reasonable expectation of privacy employee might have
  64. 64. Developing Privacy Issues Medical Records • ADA requires that medical information be kept in separate files • HIPPA does apply to health insurance plans, etc.; HOWEVER
  65. 65. EMPLOYEE PRIVACY ISSUES Information received as an employer record is not protected by health privacy rule. e.g.; FMLA health care provider certification info. But if employer is plan administrator, Health Privacy Rule applies.
  66. 66. Employer Monitoring of Electronic Resources • Give employees notice, get consent, get acknowledgement • Electronic Communications Privacy Act has both civil and criminal sanctions for secret monitoring, eavesdropping
  67. 67. Video Monitoring If no audio, not subject to ECPA but can still be invasion of privacy, so give employees notice, get consent, get acknowledgement
  68. 68. EMPLOYEE PRIVACY ISSUES Examples of video monitoring which got employers into trouble: • Employer put video cameras in women’s restroom based on rumors of drug sales, but kept them there two years • Hooter’s franchise took secret videos of applicants changing into proposed Hooter’s uniforms
  69. 69. Lack of Comprehensive Immigration Compliance Plan to Avoid Violations and Claims 4
  70. 70. Investigates employers for compliance with employment employer verification rules and removes undocumented aliens from the United States. http://www.ice.gov
  71. 71. Investigates and prosecutes charges of immigration- related unfair employment practices www.usdoj.gov/crt/osc U.S. Department of Justice Office of Special Counsel (OSC)
  72. 72. PM Packing ordered to pay $27,200 (reduced from $53,762) for paperwork violations, including failure to prepare I-9 for 22 employees.
  73. 73. Golf International ordered to pay $57,650 (reduced from $136,697) for paperwork violations, including failure to sign section 2 for 110 employees.
  74. 74. Demand of Specific I-9 Documents Prohibited RECENT CASES Miami Dade County Public Schools paid $90,000 penalty and $125,000 for back pay Yellow Cab Companies of Nevada paid $445,000 in civil penalties Abercrombie paid approximately $156,000 in back pay
  75. 75. Immigration Compliance Plan
  76. 76. Recommended Policies and Procedures I-9 procedures for hiring and re-verification Anti-discrimination policies Retention of I-9 forms E-Verify procedures Investigation of violations
  77. 77. Group training Individual training Sample training Ongoing and periodic Training and Supervision
  78. 78. Secure Recordkeeping Separation Centralized Retention
  79. 79. Retention Calculation Date of Hire__________+ 3 years =____________ Date of Separation ________+ 1 year = _________ Take the later date and enter it here: _____________________________________ Retention Date
  80. 80. Consistency – do not treat workers differently because of immigration status No “citizen only” policy Do not demand specific documents, e.g. “green card” Do not re-verify “green card” when the card expires Do not demand more documents than needed to complete I-9 Anti-Discrimination Procedures
  81. 81. Violationsreportingandinvestigations Consistency Credible reporting Enforce, enforce, enforce!
  82. 82. Prepare for government audit Identify errors Identify training issues Demonstrates good faith compliance I-9 Self Audits
  83. 83. Conduct training Ensure corrections are made Review audit report and implement procedural changes Maintain ongoing project attitude Post-Audit Implementation
  84. 84. ICE Enforcement Action
  85. 85. Responding to ICE Enforcement Actions  Choose a point person  Ask to see documents authorizing the search of premises or employees (warrant)  Make copy of the warrant, notice of inspection (NOI), subpoena, etc.
  86. 86. Responding to ICE Enforcement Actions  Ask about purpose and scope of inspection  Accompany agents on the search  Comply with the warrant but do not volunteer information not covered by warrant
  87. 87. Responding to ICE I-9 Inspection  If I-9 inspection, don’t waive right to 3-day notice (ask for extension)  Separate I-9 forms from personnel files  Offsite review – make copies of all documents submitted  Onsite review – conference room or somewhere separate from work areas
  88. 88. Call an experienced attorney immediately upon receipt of the NOI or initiation of enforcement action and do not allow agents to talk with employees before calling an attorney.
  89. 89. NO Annual Legal Review to Uncover Hidden Risks and Reduce Potential Losses 5
  90. 90. Legal Check-Up • Diagnosis • Treatment • Prevention
  91. 91. Thank You 901 Main Street Suite 3900 Dallas, Texas 75202 4965 Preston Park Blvd East Suite 320 Plano, Texas 75093 214-672-2000 www.cowlesthompson.com info@cowlesthompson.com

Presentation about the major mistakes business owners can make with critical business and legal management functions such as: Protecting their business entity status, shielding personal assets, and planning for growth and business transition Negotiating purchase agreements, customer contracts, leases, and other business agreements Observing immigration employment eligibility verification requirements Handling employer responsibilities and shielding against employee competition and loss of trade secrets Managing legal exposure and defending against lawsuits

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