The McTexLaw Email Alert for March, 2004
| This issue of the McTexLaw Email Alert turned into an employment law issue all around. On the business owner front, we have a case about an employee that stole corporate data and illegally competed with the employer, and who paid the price. In the context of real estate, we have the case of an injured construction worker who sued a sub-contractor, but ran right into the exclusive-remedy provision of the worker’s compensation law even though the worker wasn’t suing his own employer. Both cases include issues of first impression (meaning the courts could find no prior decisions directly on point). New on The McTexLaw Business Owner’s Resource Center: This case is classic. Employee formed a competing company with Employer, and Employer found out from a scrap of paper trash in its parking lot. A jury determined that Employee acted fraudulently, breached contracts, including a confidentiality agreement, and misappropriated confidential information. Click the headline to read about the rules of the employment game and what protections Texas law allows to employers when an employee shows himself to be a bad apple. Dresser-Rand Co. v. Virtual Automation, Inc., et al., Case No. 02-20834, 5th Circuit U. S. Court of Appeals, February 23, 2004. New on The McTexLaw Commercial Real Estate Resource Center: Here’s an Enron story with a twist. Enron contracted with Clark Construction Group to build Enron Building #2. Clark purchased a workers comp insurance policy from Travelers that covered all subcontractors and employees who worked at Enron #2. Clark sub-contracted Way Engineering Company, who hired Sheldon Etie. Way Engineering sub-contracted with Walsh & Albert, Ltd. Etie was injured on the job due to the negligence of a Walsh & Albert employee. Etie received workers comp benefits under Clark’s policy, but also filed a third party negligence suit against Walsh & Albert. W&A said “no can do–the workers comp policy is your one and only, exclusive remedy.” And the Court said “yep” and dismissed Etie’s suit. Click the headline to read about this case of first impression that is very helpful to all general and sub-contractors. Etie v. Walsh & Albert Company, Ltd., et al., Case No. 01-02-01007, 1st District Court of Appeals (Houston), January 22, 2004. DO YOU HAVE “PERSONAL RESPONSIBILITY BIAS”? Leave it up to the trial lawyers to come up with something “bad” about feeling personally responsible for one’s own actions. They have attached the not-so-nice moniker “personal responsibility bias” to these people. Such a person has traditional family values, strong religious beliefs, and a keen sense of personal responsibility. They tend to see the world with bright line rules on how people should act. They think people should be self-reliant, responsible, and self-disciplined. They understand that when people act irresponsibly and are not self-disciplined, there are consequences. So what’s so wrong with that? Well, people who suffer from “personal responsibility bias” hold others accountable for their conduct. They let them “suffer” the consequences of their actions. And for trial lawyers trying to play the “blame game” on behalf of their wounded plaintiffs (whether emotionally, physically, or economically), these are the last people they want on the jury. In fact, a jury full of people with personal responsibility bias won’t let plaintiff’s’ lawyers play the “blame game.” To increase their chances of success, the American Trial Lawyers Association (or “ATLA”) is now marketing and selling a handbook to their members, written by David A. Wenner, for a whopping $800.00. The point of the handbook is to help trial lawyers identify people with “personal responsibility bias” so they can keep them from serving on the jury. For you business owners, this is just another example of the forces aligned to attack your success. They are well organized, and have sufficient funding. How do you combat them? What is your defense? First, identify people, by name or class, who have the opportunity to attack you via a plaintiff’s lawyer. Employees, consumers, customers, partners, spouses of partners, suppliers, tenants, landlords, competitors, all may have the opportunity to attack. Next, watch the forms and written documents you use with each class of people. Have them reviewed and modified regularly. Third, take steps to protect your hard-earned assets from any and all creditors. This must be done before there is any specific threat. Fourth and finally, start implementing your defense now. LEGAL FAIRNESS IN TEXAS The U. S. Chamber of Commerce’s Institute for Legal Reform recently surveyed 1,400 senior attorneys in a study of legal fairness, state by state. From that data, they ranked the states for “legal fairness.“ Guess where Texas landed? 45th out of 50. The only states worse? California, Louisiana, Alabama, West Virginia, and Mississippi. So who’s at the head of the class? Delaware, followed by Nebraska, Virginia, Iowa and Idaho. According to the U.S Chamber, states with the best-rated legal systems have an advantage in the competition for businesses, and the jobs and economic growth they bring. But with two of the country’s largest domestic product producers on the bottom, it looks to me like they forgot the number one principle of real estate: location, location, location. I’m not so sure that I agree with this study (just what does the Institute consider as “legally fair”?). The tort reform law Texas passed just last year is having a real effect by reducing jury verdicts for damages that are difficult to objectively determine, in the cases to which it is applicable. The downside to that law, by the way, is that some secretaries and paralegals at law firms whose profitability took a hit from that new law, have been laid off. But this study may help us keep a healthy wariness about our justice system and pay attention to our upcoming judicial elections. After all, “legal fairness” is more of a quality of life issue than a purely economic one. ‘TIS THE SEASON FOR CALCULATING DEDUCTIONS As we head into the tax season, you might find this particular statistic stunning: for calendar year 2000, 773,000 income tax returns claimed a deduction for donation of a vehicle to charity (mine did in 1999). That’s one in every 175 returns. The donations totaled $2.5 billion, and reduced taxpayer liability by an estimated $654 million. Want in on the fun? Here are some helpful hints from the IRS:
Or you can take the easy way out and just call your CPA. Either way, due to the recent popularity of this deduction, expect the IRS to step up review (i.e. “audit”) of returns that include a charitable deduction for autos without proper documentation. So if you donate and deduct, cross your “t”’s and dot your “i”’s. REFERRAL NETWORKS Your new client referrals are a big part of our continued success, and the same is true about this newsletter. Please take a moment to think about friends and colleagues you know who might enjoy receiving our Email Alerts and forward this to them. Individual subscription information is below. ARCHIVES This Email Alert and all prior McTexLaw Email Alerts, are archived at www.mctexlaw.com/emailalerts.asp for your convenience. Feel free to browse through any newsletters you may have missed. SUBSCRIPTION MANAGEMENT
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