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There’s A New Rule In Town – What Will You Do About It?

“Come gather ‘round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone
For the times they are a-changin’”

“The Times They Are a-Changin’,” Bob Dylan ©1963, 1964

As of January 1, 2018, Commercial Division Rule 10 was amended. The rule, innocuous on its face, specifies what information an attorney must supply at a preliminary conference. The amendment is entitled “Certification Relating to Alternative Dispute Resolution.” It states:

“Counsel for each party shall also submit to the court at the preliminary conference and each subsequent compliance or status conference, and separately serve and file, a statement, in a form prescribed by the Office of Court Administration, certifying that counsel has discussed with the party the availability of alternative dispute resolution mechanisms provided by the Commercial Division and/or private ADR providers, and stating whether the party is presently willing to pursue mediation at some point during the litigation.”

Thus, from the first time your case enters the judicial system, you will be required to make the above disclosure. In addition, based upon the above language, you are “certifying” that you have done as requested by the Commercial Division Rules.

This does become a bit more complex because Rule 11 was also modified. Rule 11 Discovery, is a multipart rule to begin with, and now will contain new areas that will interact with the Commercial Division’s Advisory Council’s desire to motivate parties toward Alternative Dispute Resolution, and most specifically to mediation. Rule 11 (a), set forth below, contains what might be called the enforcement elements of Rule 10.

Rule 11. Discovery

(a) The preliminary conference will result in the issuance by the court of a preliminary conference order. Where appropriate, the order will contain specific provisions for means of early disposition of the case, such as (i) directions for submission to the alternative dispute resolution program, including, in all cases in which the parties certify their willingness to pursue mediation pursuant to Rule 10, provision of a specific date by which a mediator shall be identified by the parties for assistance with resolution of the action; (ii) a schedule of limited-issue discovery in aid of early dispositive motions or settlement; and/or (iii) a schedule for dispositive motions before disclosure or after limited-issue disclosure. [Underlined portion is new]
While serving on the bench, I recognized the difficulty that some lawyers might have suggesting mediation to their clients or to their adversary (a sign of weakness?). Thus, I always informed them that they could tell their clients the judge recommended mediation. If necessary, I would meet with the parties and their lawyers at the same time and explain that it was the Judge’s decision to move forward with mediation to save them time and money. My philosophy was echoed by comments from Marc Zauderer, a member of the Advisory Council, in an article published in the New York Law Journal (New Commercial Division Rule Amendments Emphasize Use of ADR, October 17, 2017). The rule takes the onus of suggesting mediation off the backs of the attorneys and places it squarely on the rules.

It is clear that the goal of the Advisory Council is to make the Commercial Division of New York State the location for domestic and international corporations to resolve disputes. Changes such as the ones we’ve seen in the area of ADR within the Commercial Division, if followed affirmatively and with transparency, will tend to speed the disposition of cases.

If you’ve read this article and don’t usually have cases in the Commercial Division, you may find Rule 10 meaningless to your practice, but be aware that rules that start in such divisions of the Supreme Court as the matrimonial area or in this case the Commercial Division, frequently have a habit of working their way into general Supreme Court practice via the Rules of the Chief Judge.

I would urge commercial litigators to give heed to this new rule and make ADR a part of your attorney-client discussion on a regular basis.

Over a dozen years ago, I attended a meeting at a local Bar Association for its commercial litigation committee. The room was packed with perhaps 80 people in attendance representing small, as well as medium and large law firms. The topic was the future of ADR in commercial litigation. The Administrative Judge inquired of the attendees how many of them would consider reaching out to a mediator to assist in one of their matters, and only one person raised their hand. An active discussion ensued, covering reasons that militate against mediation such as, showing weakness to your adversary, showing weakness to your client, and indicating to the judge before whom the case was pending that you had no confidence in your own case.

Today I know (or hope) the vote would be dramatically different.

“For the times they are a-changin’”

Hon. Randall Eng Authors, “Reflections in Serving on the Second Department Bench” for the New York Law Journal

Transitioning from Presiding Justice of the Appellate Division, Second Department to the private practice of law has given me the opportunity to reflect upon my service in the New York state courts for over three decades. It was a long journey which ranged from assignment to the Summons Part of Manhattan Criminal Court to designation as an Associate Judge of the Court of Appeals for one matter. I think fondly of the many dedicated jurists that I was privileged to work with along the way, and the deep appreciation that I will always have for their respect for the rule of law.

My judicial career began in the Criminal Court of the City of New York in 1983. At that time, the transit fare was $.75, and the national average price of a gallon of gas was $1.24. I was 35 years old when appointed to the Court by Mayor Edward I. Koch, who had a decided preference for younger candidates in his judicial appointments. Indeed, in the year that I was chosen, more than half of his appointees were under the age of 40. From that beginning, I was able to enjoy a judicial tenure that exceeded 34 years, most of which was spent on the criminal side during the raging crack epidemic and the accompanying steep homicide rates.

The highlight, of course, of my time on the bench was my service on the Appellate Division, Second Department. It is difficult to appreciate the enormity of the workload of the Court without having been a part of it. This, I believe, is an appropriate opportunity to share some of my thoughts on the subject.

When I arrived at the Appellate Division, Second Department in January 2008 after more than 20 years of service on the trial bench, I stepped into the rarefied atmosphere of an extraordinary court populated by judicial and non-judicial personnel of the highest caliber, many of whom had lengthy years of experience. The court was then comprised of 18 men and four women, including Presiding Justice A. Gail Prudenti, who had the reputation of being an exceptional administrator. At that time there were two justices of Latino heritage, one African-American, and one Asian-American, myself. By the time I retired as presiding justice in December 2017, the composition of the court had undergone a remarkable transformation as witnessed by the fact that there were now 12 women jurists on the court and ten men. Among these judges were three Latinos, four African-Americans, and one Asian-American, again, myself.

Much had changed over 10 ten years at the Court, five as an associate and five as presiding justice, while much had remained the same. We continued to be the busiest appellate court in the country, faced with enormous caseloads coupled with budget reductions and hiring freezes brought on by the Great Recession which began in earnest in 2009.

The average number of cases decided by the Court were 4,000 per year, the number of new attorneys admitted by the Court was 2,619 per year, and the average number of attorneys who were disciplined per year was 231. Added to those figures were a varying number of suspended and disbarred attorneys who were seeking reinstatement to the Bar.

Criminal appeals had long accounted for a significant percentage of the Court’s docket and it was common to have five or more criminal cases appearing on every Day Calendar. As crime statistics began to decline over the past 10 years, the number of criminal cases in the inventory were reduced accordingly. However, there appeared to be a concomitant increase in the number of Family Court cases, driven in all likelihood by rising populations in many of the counties comprising the Second Department as well as by stress brought on by a declining economy.

Criminal and Family Court appeals were given priority in the processing of cases because of the liberty interests involved and by the need to deal with issues of custody, visitation, and support which have a heavy impact upon vulnerable populations.

We have all come to know the Appellate Division, Second Department for its prodigious output of decisions reflecting 80 cases per week on its Day Calendars, supplemented by submission calendars which decide cases in which oral argument is not permitted under the rules of the Court.

Added to the workload of the Second Department are decisions flowing from motions made to the Court seeking various forms of relief including requests for extension of time to perfect an appeal and extensions of time to answer or reply. Motions seeking re-argument, stays of trial pending appeals, leave to appeal to the Court of Appeals, and orders to show cause come before the Court on an ongoing basis. The total number of motions heard and decided annually by either a single judge or a four judge bench came to approximately 11,000 during my time in the Court.

Functioning outside of the historic and beautiful courthouse of the Second Department at 45 Monroe Place in Brooklyn Heights are the ancillary agencies of the Court that have a myriad of responsibilities under the supervision of the Appellate Division.

Among the larger agencies is the Mental Hygiene Legal Service (MHLS) which is a dedicated legal advocacy program providing a broad range of protective legal services and assistance to mentally-disabled persons under the care or jurisdiction of State-operated or licensed facilities. In 2007, just before my designation to the Court, MHLS was tasked with the responsibility of providing representation to sex offenders alleged to have mental abnormalities making them likely to re-offend and, therefore, in need of confinement or intensive supervision. There are now approximately 85 attorneys providing these services in both institutional and community settings throughout the five judicial districts which comprise the Second Department.

If one adds to the list of agencies the Appellate Term, two Committees on Character and Fitness, three Grievance Committees and the Attorneys for the Children Program, it becomes abundantly clear that the responsibilities of the Second Department are substantial and far-reaching.

I look forward to the new challenges of private practice and am very grateful for having had the good fortune of serving with the extraordinary judges of the Appellate Division, Second Department.

Hon. Randall T. Eng served as a New York Supreme Court Justice for over 30 years, most recently as Presiding Justice of the Appellate Division, Second Department, before joining Meyer, Suozzi, English & Klein, P.C. as a member of the firm’s litigation and dispute resolution department, including the appellate and criminal defense practices. He can be reached at reng@msek.com.

Paul Millus Authors, “Uber Drivers- Employees or Independent Contractors?” for Nassau Lawyer

There was a time when everyone knew the difference between an employee and an independent contractor.  An employee went to the office or factory, worked his eight hours for an employer (and only one employer), had his taxes deducted from his paycheck, and was paid two weeks’ vacation.  The classic independent contractor was the plumber who came to the customer’s home (or business) in his own truck.  The plumber told you when he chose to come, arrived when it was convenient for him, wholly dictated the price, used his own tools and waited to be paid on the spot.  He then left, never to be seen again until the next leaky pipe.

The Rise of the Alternative Worker

The determination as to who is an employee and who is an independent contractor has become less clear over the years, mainly due to the expansion of the “alternative workforce” versus the employee workforce. This expansion was partly caused by the way businesses ran their operations to stay competitive in the global marketplace.  In the 1970’s and 1980’s, recessions led to the downsizing of employee-rich bureaucracies leading companies to rethink their business models to include temporary workers, who may have been employed by someone, but were not employees in the place where they worked – they were part of an independent contractor force.

The next shoe to drop was globalization.  The rise of technology and less costly transportation methods led to offshore production.  Businesses simply could not afford a large employee workforce, and hiring workers on an ad hoc basis lowered their bottom lines and increased their profitability.[i]  As of 2010, more than 10,000,000 workers, comprising 7.4 percent of the U.S. workforce, were classified by the Bureau of Labor Statistics as independent contractors, and another 4,000,000 worked in alternative work arrangements in which they were legally classified as independent contractors for one or more purposes.  In that year, “alternative” workers, as they were called, accounted for approximately $626 billion in personal income, or about one in every eight dollars earned in the U.S.[ii]

The Common Law Tests

So, what is the law as it pertains to the employee versus the independent contractor conundrum?  In 1926, the U.S. Supreme Court opined regarding who could be identified as an independent contractor in Metcalf & Eddie vs. Mitchell.  In that case, the Court used well-established common law as its guide.  In examining the performance of the contract at issue, the Court looked to whether (i) the performance of the contract involved the use of judgment and discretion on the part of the worker; and (ii) the worker was required to use his best professional skill to bring about the desired result.  Thus, the Court concluded, if the worker enjoyed “liberty of action,” it “excludes the idea that control or right of control by the employer which characterizes the relation of employer and employee and differentiates the employee or servant from the independent contractor.” [iii]  The key factor in these cases was level of control exerted by the putative employer.

New York courts apply the same common-law right-to-control test to determine whether a worker is an employee in several contexts.[iv]  In Bynog v. Cipriani Group, Inc., the New York Court of Appeals identified five factors “relevant to assessing control, includ[ing] whether the worker (1) worked at his own convenience; (2) was free to engage in other employment; (3) received fringe benefits; (4) was on the employer’s payroll; and (5) was on a fixed schedule.”[v]

Then, there is the “economic reality test,” which is applied in connection with Fair Labor Standard Act (“FLSA”) cases, which focuses on “the totality of the circumstances.”  In those cases, the “ultimate concern …[is] whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in business for themselves.”[vi]  The courts rely on several factors that are relevant in determining whether individuals are employees or independent contractors.  These factors are derived from the Supreme Court’s decision in United States v. Silk and include (1) the degree of control exercised by the employer over the workers; (2) the workers’ opportunity for profit or loss and their investment in the business; (3) the degree of skill and independent initiative required to perform the work; (4) the permanence or duration of the working relationship; and (5) the extent to which the work is an integral part of the employer’s business.[vii]

Uber Drivers: Misclassified Employees?

In this complex world, it is impossible to make a snap determination as to who is an independent contractor and who is an employee.  Thus, misclassification lawsuits have grown at a record pace.  As of 2015, the number of wage and hour cases filed in federal court rose to 8,871, up from 1,935 in 2000, most pertaining to misclassification, including misclassifying workers as independent contractors when they are later found to be employees.[viii]  That correlates to an increase of 358 percent, compared to the federal judiciary’s overall intake volume, which rose only a total of about seven percent over the same period.

Nowhere is the trend toward expanding misclassification litigation more apparent than when it comes to a company such as Uber.  At first blush, Uber would seem to have a classic independent contractor relationship with its drivers.  Let’s look at the basic facts:  An Uber driver drives his/her own vehicle, obtains his/her own insurance, maintains that vehicle, drives when and where and for how long he/she desires.  The driver is not issued any equipment by Uber and uses his/her own cell phone to access customers.  Moreover, an Uber driver can drive for its competitor, Lyft, at any moment the driver wishes.  It would seem the Uber driver has “liberty of action,” noted by the Court in Metcalf, and, thus, would not be considered an employee.

However, some courts and administrative agencies have ruled otherwise.  In Berwick v. Uber Technologies, Inc., the first California decision to hold that Uber misclassified drivers as independent contractors, the California Labor Commissioner ruled that the Uber drivers bringing a class action were employees and not independent contractors.[ix]  The Commissioner’s focus was on control.

Contrasting the factors listed above that would seem to contradict such control, the Commissioner found that Uber was involved in virtually every aspect of the operation.  First, drivers can only avail themselves of Uber’s customers by utilizing Uber’s app.  Next, Uber conducts driver background checks, sets the drivers’ compensation, and monitors drivers’ performance through customer reviews.  Finally, Berwick held the work performed by the drivers was “integral” to the regular business of Uber – which is axiomatic.

Likewise, in June 2017, the New York State Unemployment Insurance Appeal Board held that three complainants were employees, stating, “Uber exercised sufficient supervision and control over substantial aspects of their work as Drivers,” similar to the analysis and holding in Berwick.[x]  One of the factors considered by the Commissioner was that “Uber did not employ an arms’ length approach to the claimants” that the Commissioner believed would be present in a typical independent contractor relationship.

This raises interesting questions.  Yes, Uber set the rates that could be charged and set certain conditions for drivers to follow, but one must assume some rules are necessary to establish consistency of the business model to attract and maintain customers for Uber and the drivers.  Uber could not exist if it simply provided a means for drivers to pick up a passengers and left it to them to figure out the price of the service. However, what is an element of control, and sometimes what constitutes “control,” can be in the eye of the beholder.

Other Courts: Drivers Are Not Employees

There have been decisions to the contrary.  In McGillis v. Department of Economic Opportunity, the Third District Court of Appeal of Florida upheld an administrative decision finding drivers were not employees.[xi]  On the issue of “control” the court acknowledged that “both employees and independent contractors ‘are subject to some control by the person or entity hiring them.  The extent of control exercised over the details of the work turns on whether the control is focused on simply the result to be obtained or extends to the means to be employed.’” Citing authorities, the court reasoned that if control is confined to results only, there is generally an independent contractor relationship, and if control is extended to the means used to achieve the results, there is generally an employer-employee relationship.

In Saleem v. Corporate Transportation Group, the Second Circuit addressed black car drivers in New York who were asserting claims against owners of black car “base licenses” and affiliated entities, pursuant to the FLSA.  Like Uber, the black car drivers “possessed considerable autonomy in their day-to-day affairs.”[xii]  They could determine when and how often to drive, without providing any notice to the Defendants, and they were at liberty to—and did—accept or decline jobs that were offered.  In the end, the court found that the drivers were independent contractors, noting “[w]hile Defendants did exercise direct control over certain aspects of the CTG enterprise, they wielded virtually no influence over other essential components of the business, including when, where, in what capacity, and with what frequency Plaintiffs would drive.”[xiii]

What is the difference between the black car drivers in Saleem and the cases where Uber has been found to be an employer?  The answer is very little.  However, the law, like life, is nuanced.  If the question is what constitutes control for purposes of making such a determination, one small factor could turn the tide either way.  The real question is: has the economy and technology so changed that the normal paradigms we all think we understood regarding the nature of work and what it means to be “employed” mandate that a new way of looking at such concepts is in order-one way or the other?

———

 

[i] The Rise of the Supertemp, Jody Greenstone Miller and Matt Miller Harvard Business Review, May 2012.

[ii] The Role of Independent Contractors in the U.S. Economy, Jeffrey A. Eisenach, American Enterprise Institute;  NERA Economic Consulting:  December 1, 2010.

[iii] Metcalf & Eddie vs. Mitchell, 269 U.S. 514, 522 (1926).

[iv] Smith v. CPC  Int’l, Inc., 104 F.Supp.2d 272, 275 (S.D.N.Y.2000) (“[T]he common law test of agency discussed in Darden is the same test applied by New York courts in addressing a variety of employer-employee relationships.”).

[v] Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193, 198 (2003).

[vi] Brock v. Superior Care, 840 F.2d 1054, 1059 (2d Cir. 1988); see also Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961) (“‘[E]conomic reality’ rather than ‘technical concepts’ is to be the test of employment.” (quoting United States v. Silk, 331 U.S. 704, 713 (1947)).

[vii] United States v. Silk, 331 U.S. 704 (1947).

[viii] Why Wage and Hour Litigation is Skyrocketing, Washington Post, November 25, 2015.

[ix] Berwick v. Uber Technologies, no. 11-46739 EK, 2015 WL 4153765 (Cal. Dept. Lab. June 3, 2015).

[x] In the Matter of AK, JH and JS  v. Uber, ALJ case No. 016-23858, New York State Unemployment Insurance Appeal Board (June 9, 2017).

[xi] McGillis v. Department of Economic Opportunity, 210 So.3d 220 (FDCA 3d Dist. 2017).

[xii] Saleem v. Corporate Transportation Group, Ltd., 854 F.3d 131 (2d Cir. 2017).

[xiii] Id.

Client Alert: 2018 Winter Alert

On December 20, 2017, Congress passed the Tax Cuts and Jobs Act1, which was signed into law by the President on December 22, 2017. While the new law maintains the overall framework of the existing federal estate, gift and generation-skipping transfer (GST) tax laws, it puts in place important temporary taxpayer friendly changes.

Summary

Building on the major modifications enacted under the Taxpayer Relief Act of 2012, the new Act effects further dramatic reductions in federal transfer tax burdens. Effective January 1, 2018, the law provides for the following:

  • Increased Exemptions. The estate, gift and GST exemptions have been doubled from $5 million to $10 million per person, as indexed for inflation occurring after 2011. Accordingly, the inflation adjusted exemption, which would have been $5.6 million in 2018, is expected to jump to $11.2 million per person as of January 1, 2018.
  • Sunset. The new law includes a “sunset” provision, pursuant to which the increased exemptions expire at the end of 2025, returning to the $5 million level, indexed for inflation. The law also directs that regulations be prescribed to avoid a “clawback” if gifts exceed the exemption threshold when death occurs after the sunset of the exemptions.
  • Inflation Adjustment. The inflation adjustment index has been changed. Prior law based the computation on the Consumer Price Index for all Urban Consumers (“CPI-U”). Under the new law, the adjustment will be based on Chained CPI-U (“C-CPI-U”), which generally produces a slower growing CPI calculation than the CPI-U calculation.

Planning Considerations Under the Tax Cuts and Jobs Act

  • Dramatic Window of Opportunity. No tax legislation is “permanent.” It is important to keep in mind that the new Act was adopted along party lines, and is subject to modification by any future Congress and administration. Moreover, as noted, the increased exemptions are set to be in place for a limited period, expiring on December 31, 2025. Therefore, planning should be implemented while the law permits, and not placed on the back burner.
  • Spousal Portability. The spousal portability provisions, initially adopted under the 2010 Tax Relief Act, allow a surviving spouse to make an election to use the deceased spouse’s unused exemption (“DSUE”). Under the new law, at least for the next 8 years, it may therefore be possible for married couples to shelter up to $22.4 million (indexed for inflation) from federal transfer taxes.
  • Credit Shelter Planning. Planning with testamentary “credit shelter” or “by-pass” trusts established by the first spouse to die, to reduce the overall estate taxes payable upon the death of the second spouse, has long been a cornerstone of estate planning for married couples. While the new high federal exemption amount of $10 million, indexed for inflation, coupled with the spousal portability provisions, render it possible for married couples to shelter from federal estate tax over $20 million without the necessity of creating trust instruments, credit shelter planning remains an appropriate and important planning tool for numerous reasons. Caution is in order, however, for those married couples with existing Wills containing federal credit shelter formula bequests. Those formulas should be reviewed to confirm that the credit shelter bequest is not overfunded or underfunded due to the exemption amounts, leaving the surviving spouse with too little or too much in assets, and potentially generating an unwanted state estate tax upon the death of the first spouse.
  • State Estate Taxes. New York, like several other states, has its own estate tax system. New York incorporates into its law many of the federal estate tax provisions, but New York’s exemption and rates are different from the federal exemptions.
    • While New York has repealed its gift tax2, its estate tax exemption (the “NYS Basic Exclusion Amount”) is presently only $5.25 million. Under current law, the NYS Basic Exclusion Amount is scheduled to increase on January 1, 2019 to equal the federal Exemption Amount, as indexed for inflation at that time. However, the provisions of the New York law are written such that the NYS Basic Exclusion Amount in 2019 will not match the new increased federal exemption amount of $10 million, indexed for inflation, but rather will increase only to $5 million, as indexed for inflation occurring after 2011, using CPI-U. Accordingly it is projected that the NYS Basic Exclusion Amount at that time will be approximately $5.8 or $5.9 million. Consequently, for those residing in New York (and other states with a separate and lower estate tax threshold), it may be prudent to limit a credit shelter disposition to the amount that can pass free of state estate tax.
    • New York has not adopted spousal “portability” provisions to allow a surviving spouse to use a deceased spouse’s unused gift and estate tax exemption.
  • Gifting. Lifetime gifting of assets, whether outright or in trust, can bring substantial transfer tax savings. For those states which, like New York, impose an estate tax but not a gift tax, gifts can result in a substantial reduction in state estate tax liability. Further, the gifting of appreciating assets provides the additional benefit of removing the post-transfer appreciation in the value of the assets from the donor’s estate. Many gifting vehicles, moreover, offer discounting advantages that are absent from or less effective than those associated with testamentary transfers. In assessing the benefits of lifetime gifts, since the recipient of a gift receives the donor’s income tax basis in the gifted assets – as opposed to the recipient of a testamentary transfer receiving an income tax basis as of the date of death – any proposed gift must measure the potential capital gain consequences as against potential gift and estate tax savings.
    • Dynasty Trusts. For those taxpayers who have established (or wish to establish) a Dynasty Trust, substantial gifts of $10 million (indexed for inflation), after factoring in any prior taxable gifts, may be made to a Dynasty Trust to which GST exemption may be allocated, exempting the trust assets from further estate, gift and GST taxation for the term of the trust. Creation of the trust in a jurisdiction that has repealed or liberalized its Rule Against Perpetuities can allow the trust assets to provide for future generations without being burdened by further estate, gift or GST taxes. During the lifetime of the creator of the trust, the trust can be structured as a “grantor trust” for income tax purposes, so that the creator is taxable on any income. Such payments serve to reduce further the taxpayer’s gross estate for federal estate tax purposes.
    • Spousal Lifetime Access Trusts. The Spousal Lifetime Access Trust (SLAT) can enable married couples who wish to make large lifetime gifts to descendants without a dramatic impact on their current lifestyle. With a SLAT, one spouse makes a gift to an irrevocable trust using the donor-spouse’s gift tax exemption. The non-donor spouse is named as a current beneficiary, which allows the trustee to make distributions of trust funds to the beneficiary-spouse during his or her life.

The Tax Cuts and Jobs Act implements far-reaching changes to the Internal Revenue Code, including the temporary changes to the estate, gift and GST exemptions summarized in this Alert. For a limited time, this law offers a valuable opportunity to transfer significant wealth to younger generations. To assure you have a tax-efficient and updated estate plan that makes timely use of techniques appropriate for each individual’s circumstances, we recommend a review of existing estate plans and related documents.

 

1Under the reconciliation process in which the bill was finally passed by both houses of Congress, the actual name of the act is “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.”

New York law provides, however, that gifts made within 3 years of death will be included in the gross estate of a New York resident decedent, if the gift is made between April 1, 2014 and December 31, 2018 and the decedent was a New York resident at the time of the gift.

 

_________________________

 

For more information on Meyer Suozzi’s Wills, Trusts & Estates Law practice, click here.

 

Our Wills, Trusts & Estates Law practice group includes the following attorneys:

Patricia Galteri
pgalteri@msek.com
(516) 592-5790
Nathaniel L. Corwin
ncorwin@msek.com
(516) 592-5740
Jayson J.R. Choi
jchoi@msek.com
(516) 592-5799
Elisa Santoro
esantoro@msek.com
(516) 592-5724

 

Charles O’Shea Writes “Fines Ruled As Illegal Tax” Op-Ed for Newsday

As a former Nassau County Assessor, I have first-hand knowledge regarding the development of fair and equitable assessments for commercial properties. As a former New York State Legislator, I also understand that the Nassau County government requires enough revenue to operate in a professional and effective manner.

That being said, as Judge Anthony Marano astutely pointed out in his ruling on Tuesday and which was highlighted in the Newsday article, “Fines Ruled as ‘Illegal Tax’,” the penalties for not supplying timely information for the Disputed Assessment Fund, initially designed as fines, can be construed as fees used to raise revenue.

Nassau County at this point, must find a more reasonable process to accurately assess class 4 commercial properties while potentially subsidizing the Disputed Assessment Fund.

Client Alert: New York City Predictive Scheduling Law Effective November 26, 2017 Impacts Retail & Fast Food Employers

New York City’s new Predictive Scheduling Law, effective November 26, 2017, imposes significant constraints on retail and fast food employers. The law is complex, and the penalties for non-compliance are severe.

Retail Employers

Among other requirements, the new law mandates that covered employers:

  • Provide employees with written schedules and post schedules at least 72 hours before the beginning of the scheduled hours of work
  • Provide 72 hours’ written notice of schedule changes
  • Post and provide employees with notice of changed schedules

 

The law prohibits:

  • Cancelling a regular shift within 72 hours of the start of such shift
  • Requiring an employee to work with less than 72 hours’ notice without an employee’s written consent
  • Requiring an employee to call in fewer than 72 hours before a shift begins
  • Scheduling an employee for an on-call shift

 

Fast Food Establishment Employers
The law imposes new scheduling requirements on fast food establishments, including the following:

  • Provision of written work schedules to employees
  • Posting of work schedules
  • Provision of schedule changes to employees and reposting of changed schedules within 24 hours of employer’s knowledge of change
  • Written consent of employee to work hours not scheduled
  • Payment of premiums, ranging from $10 to $75, where an employee’s schedule varies from the original work schedule

 

Enforcement

Covered employers are subject to (1) compliance investigations by the newly created Labor Standards Division, (2) lawsuits by the New York City Corporation Counsel, and (3) private actions commenced by individuals. The new law authorizes the imposition of penalties for violations of its provisions ranging from $200 to $2,500 per violation depending on the specific provision violated by the employer.

Retail and fast food employers operating in New York City should review their scheduling policies now and develop procedures to ensure compliance with the requirements of the new predictive scheduling law.

 

For more information on Meyer Suozzi’s Employment Law practice, click here.

A. Thomas Levin Authors, “A Park is a Park is a Park” for the Nassau Lawyer

“The nation behaves well if it treats its natural resources as assets which it must turn over to the next generation increased, and not impaired, in value.” Theodore Roosevelt.

New York has long treated park property with a special reverence, and any attempt by a local government to use designated park property for any other purpose is fraught with peril. This principle was recently illustrated by the Court of Appeals June 6, 2017 decision in Matter of Avella v. City of New York et al.1 This case involved the re-development of the former Shea Stadium property which, believe it or not, is legally considered parkland, and is subject to the Public Trust Doctrine.

The Public Trust Doctrine

In 2001, the New York Court of Appeals took note that the ancient Public Trust Doctrine remains a vibrant legal principle in New York. The history of this doctrine is examined in Friends of Van Cortlandt Park v. City of New York,2 where the Court reaffirmed that public property which has been designated as parkland is held in public trust, such that the property may not be used for any other purpose without authorization from the New York State Legislature.

Van Cortlandt Park examined precedents from the Court of Appeals, beginning with Williams v. Gallatin,3 in which the Court considered New York City’s proposed ten year lease of a building in Central Park to the Safety Institute of America. The proposed lease provided that the building would be improved by the tenant and used for safety education. At certain specified times, the building would be open to the public. In enjoining the lease, the Court concluded that Central Park is dedicated to public use for park and recreational purposes, for the promotion of public health, safety and welfare, and uses which are inconsistent with park purposes, no matter how worthy, are an impermissible deviation from the authorized purposes.

The Court of Appeals again had occasion to examine this principle in 755 Fifth Ave. v City of New York,4 where the Court allowed a café and restaurant in Central Park. Based on the particular facts of that case, the Court concluded that the proposed restaurant was within the ambit of uses which the Park Commissioner was authorized to introduce to the park, and were consistent with and promoted the recreational use of the park property. However, this decision turned to a large extent on the particular language of the State legislation authorizing use of Central Park, so that it is not necessarily persuasive with respect to similar uses of other park property.

In 1972, the Court again spoke with respect to permissible uses of park and recreation property, and rejected a proposed five year lease of property to permit private operation of a dock and related facilities at Lake George. In Lake George S. B. Co. v. Blasio,5 the Court ruled that this constituted an unlawful diversion of public park property for a private use, which could be accomplished only with the consent of the State Legislature (which, in this case, was lacking).

The Court then had two occasions in 2014 to opine further upon these principles.

In Union Sq. Park Community Coalition v. New York City Dept. of Parks & Recreation,6 the Court permitted a restaurant in Union Square Park pursuant to a license agreement. (Assuming that a lease would be prohibited by court precedents, the City here proposed a revocable license agreement. Claiming that this was a distinction without a difference, the opponents argued that it was tantamount to a lease, and was an unlawful interference with park property). The Court reviewed its previous decision in 755 Fifth Ave.,7 and concluded that each case involving a use of public park property required an examination of several factors, including the conditions upon which the property was dedicated to park use, the terms and conditions for operation of the proposed use, and the degree to which the public would be excluded from use, in order to identify the true nature of the underlying transaction. Concluding that this transaction involved a license, which was authorized by statute, no other legislative approval was required.

However, in Capruso v. Village of Kings Point,8 the Court reached the opposition conclusion with respect to a village’s proposed use of parkland for a public works facility. The Village had in fact been using the park property for non-park purposes for a number of years, but its new effort to construct the public works facility on the property aroused opposition by neighboring owners of private property. The State of New York also joined in the litigation. After resolving several procedural issues, the Nassau County Supreme Court enjoined the proposed use, and the Appellate Division, Second Department affirmed.9 Noting that the status of the property as parkland was undisputed, and concluding that the proposed use was a use of a substantially different scale, the Court of Appeals affirmed.

Matter of Avella

With the foregoing history of the Public Trust Doctrine in mind, Avella brought to the Court of Appeals a mixture of issues predicated upon the established principles of that doctrine and the specific legislation for the re-development of Shea Stadium. It may not be commonly known, but Shea Stadium and its related facilities were located in Flushing Meadow Park, an area clearly subject to the Public Trust Doctrine. In an effort to recover from the losses of the Dodgers and Giants at the end of their respective 1957 seasons, New York City embarked upon a project to lure a new Major League baseball team to New York. To that end, in 1961 the New York State Legislature enacted the required leg­islation authorizing New York City to construct and finance a municipal base­ball stadium within the park. This facil­ity became known as Shea Stadium, and was the home for the New York Mets for nearly 50 years.

In 2008, Shea Stadium was demol­ished, and replaced with a new stadi­um, presently known as Citi Field. This demolition and construction was part of an overall plan to re-develop that particular property and other, blight­ed, property in the area of Queens known as Willets Point, for which the City had issued requests for propos­als for area re-development. Queens Development Group, LLC (QDG), a joint venture formed by entities con­trolled by Sterling Equities Associates (owners of the Mets) and The Related Companies, submitted a proposal for construction of retail space, a hotel, an outdoor space, a public school, and affordable housing in the Willets Point neighborhood, and a large-scale retail complex and movie theater on an area designated “Willets West,” on the Citi Field parking lot where Shea Stadium once stood.

Plaintiffs, including a State Senator, not for profit groups, businesses, tax­payers, and users of Flushing Meadow Park sued to enjoin the proposed devel­opment on parkland. The case wound its way to the Court of Appeals, which invoked the Public Trust Doctrine to enjoin the proposed commercial uses of the parkland areas. However, in doing so, the Court was required to review the history of the Public Trust Doctrine, and the particular legislation which had initially authorized Shea Stadium and later authorized redevelopment, and its analysis serves as a teaching moment for municipal attorneys (and attorneys for developers and community groups) in re-emphasizing the rule that park property is held in public trust, invio­late to non-park uses, unless the State Legislature grants a clear authorization for the intrusion of other uses.

In Avella, the City and the developers argued that the 1961 legislation under which Shea Stadium had been con­structed in Flushing Meadows Park was broad enough to allow the construction of a shopping mall more than a half-cen­tury later. This required the Court of Appeals to review the specific (but not necessarily clear) language of the 1961 State legislation, in order to determine the scope of the granted authority.

The Court cited Van Cortland Park,10 holding that the approval of the Legislature must be “plainly conferred” through “direct and specific approv­al.” The specific State legislation in 1961, codified in Administrative Code of the City of New York section 18-118, granted the City authority to enter into agreements to use the grounds and buildings “to use, occupy, or carry on activities in, the whole or any apart of a stadium, with appurtenant grounds, parking areas, and other facilities.” After lengthy and detailed discussion and analysis, the Court concluded that this language clearly did not extend to construction of a shopping mall or movie theater, as these were not “appurtenant” to the clearly authorized stadium and parking lot uses. Rather, these were commercial uses, not within the ambit of the permissible park uses, or the stadium and its related uses.

The Court noted that the redevelop­ment of Willets Point was a laudable goal, but that good intentions were not a sufficient basis upon which to per­mit parkland to be used for non-park purposes. Arguments as to the merit of the proposed uses, or lack thereof, would have to be addressed to the State Legislature, which has the final author­ity to determine the uses to which park­land may be put.

Chief Judge DiFiore filed a lengthy dissent, arguing that the Legislature previously had authorized the use of this land for non-park purposes, and that the majority had too strictly read the statutory language. In her view, the statute was broad enough to authorize uses which were for the benefit of the public, and were related to the per­mitted uses of Citi Field, such that the Public Trust Doctrine did not prevent the proposed uses.

Epilogue

The end of this saga is probably not yet written. The most obvious path for the City and the developers is to seek a new legislative authorization for the Willets Point West project, since it is clearly within the province of the Legislature to grant that permission.

In this respect, however, it should be kept in mind that the State has long had a policy of requiring some mitigation whenever it permits parkland to be put to some other use. Details of this policy, and how it is implemented, are found in the “Handbook on the Alienation and Conversion of Municipal Parkland in New York”11 published in 2012 by the New York State Office of Parks, Recreation & Historic Preservation. That policy generally requires the pro­vision of substitute parkland for the lands being alienated, although there have been some exceptions allowed by the State Legislature.

The moral of the story is that local governments can avoid inevitable lit­igation, and the likelihood of adverse outcomes, by taking care to permit only park and park-related uses on desig­nated parkland property. However, eco­nomic and political pressures frequent­ly motivate governments into pushing the envelope in this regard, so it is likely that we haven’t seen the end of Public Trust Doctrine litigation.

1 __ NY3d __ (2017) 2017 NY Slip Op 04383.

2 95 N.Y.2d 623 (2001).

3 229 N.Y. 248 (1936),

4 15 N.Y.2d 221 (1965),

5 30 N.Y.2d 48 (1972),

6 22 N.Y.3d 648 (2014),

7 Supra note 4.

8 23 N.Y.3d 631 (2014)

9 Capruso v. Village of Kings Point, 102 A.D.3d 902 (2013)

10 Supra note 2.

11 https://parks.ny.gov/publications/documents/AlienationHandbook.pdf

Wills, Trusts & Estates Client Alert: Estate Planning In The Digital Age

You’ve done everything right in setting up your online financial and social media accounts.  You have solid passwords and change them periodically to prevent hackers from gaining access, and you have never had any issues accessing your accounts or had any unauthorized person do so.  Your online banking and brokerage accounts have made life more convenient, and your social media accounts have opened vast social and business networking opportunities. These are examples of “digital assets,” which include any electronic record in which you have a right or interest.

But what happens to those digital assets if you die or become incapacitated?  Who has the right to access them, and how is that access gained?

Digital Asset Hardships

In In re Ellsworth, the family of a U.S. Marine who was killed in Iraq wanted to retrieve the contents of his Yahoo email account. The family had to obtain a court order to get Yahoo to provide a compact disc with photographs and emails of the deceased serviceman.1

In In re Facebook, Inc., the family of a young woman who allegedly committed suicide wanted access to her Facebook posts to determine her state of mind at the time of her death. The family was forced to seek court relief, but the court refused to order Facebook to produce the content, stating that to hold otherwise would run afoul of the privacy interests that federal laws seek to protect.2

The Law of Digital Assets

Overview

Digital assets, similar to other assets, are protected under federal and state laws.  Failure to properly authorize a fiduciary the right to access digital assets may result in a violation of federal or state law.  For example, if your spouse accesses your online brokerage account with your password after your death without proper authorization, your spouse may have acted in violation of federal privacy laws such as the Stored Communications Act or the Computer Fraud and Abuse Act.

The laws governing digital assets have been a confusing morass of contract, federal privacy and state and federal computer access laws, and fiduciaries such as executors and agents under a power of attorney have often had great difficulty accessing and administering digital assets. It is not like showing up at your local bank branch with a power of attorney.

The Uniform Fiduciary Access to Digital Assets Act

As is often the case, the law has been playing catch-up to technological advances.  New York only several months ago adopted a version of the Uniform Fiduciary Access to Digital Assets Act (the “Digital Assets Act”), which has been enacted by 31 other states, and is designed to facilitate the administration and management of digital assets upon a user’s death or incapacity.

Under the Digital Assets Act, a “user” is a person that has an account with a custodian, and a “custodian” is defined as a person or entity that carries, maintains, processes, receives or stores a user’s digital assets.

Four types of fiduciaries are authorized specifically to access digital information:

  • an executor or administrator of a decedent’s estate;
  • a legal guardian;
  • an agent acting under a power of attorney; and
  • a trustee of a trust.

The Digital Assets Act makes a distinction between a fiduciary’s right to access a “catalogue of electronic communications,” which is information identifying the persons with whom a user has had electronic communications, their electronic addresses, and the time and date of the communications, as opposed to a fiduciary’s right to access the “content of an electronic communication,” which is information concerning the substance or meaning of the communication.  In general, a fiduciary may access a catalogue of communications unless the user has affirmatively prohibited disclosure, while access to content is permitted only if the user has consented to disclosure.

Traditionally, the terms-of-service agreement between the custodian and user governed the access to digital assets.  Under the Digital Assets Act, a user may now use an “online tool” (electronic service) provided by a custodian, in an agreement separate from a terms-of-service agreement, to provide directions for disclosure or nondisclosure of digital assets to a third person.

The rules for user direction regarding disclosure are summarized below:

  1. If an online tool allows a user to modify or delete a direction, the direction in the online tool overrides a contrary direction in a will, trust, power of attorney or other record;
  2. If a user has not used an online tool to give direction, or if the custodian has not provided one, a user may give direction in a will, trust, power of attorney or other record; and
  3. If there is no direction in an online tool or in estate planning documents, the terms-of-service agreement will control.

In disclosing a user’s digital assets, a custodian may, in its discretion, grant a fiduciary or designated recipient selected by an online tool full access to the user’s account, partial access sufficient for the fiduciary to perform his or her tasks, or a copy of the digital asset.  Custodians also have the right to seek a court order before providing access, and may charge an administrative fee for the cost of disclosing digital assets.

Planning Recommendations

Wills, trusts and powers of attorney should be updated to include specific language granting a fiduciary comprehensive authority to access and administer digital assets and, where appropriate, how to dispose of those assets.  In addition to regularly updating estate planning documents to include current provisions, we recommend that you (i) prepare and maintain an inventory/catalogue of your digital estate, including the name and website of each online account, the email address associated with each online account, together with usernames, passwords, and answers to security questions, (ii) back up account data from websites and data stored on the cloud, (iii) examine the terms-of-service agreements to identify and give effect to postmortem transfer options, and (iv) determine how you want your fiduciaries and family members to access and manage your digital assets, providing written instructions for those individuals regarding your wishes.  The inventory/catalogue and written instructions, of course, should be maintained in a safe location, such as a safe, and the fiduciary should have access to the inventory/catalogue, if necessary.

Conclusion

In the Digital Age, estate planning for digital assets is as important as planning for the disposition of real and personal property.  Failure to plan appropriately may cause your fiduciary to encounter needless expense and delay.

 

1 In re Ellsworth, No. 2005-296, 651-DE (Mich. Prob. Ct. 2005).

2 In re Facebook, Inc., 923 F. Supp. 2d. 1204 (N.D. Cal. 2012).

 

Paul Millus Authors, “Employment Disputes: Fox News and the Effort to Upend Mandatory Arbitration” for the New York Law Journal

On July 6, 2016, former Fox News Anchor Gretchen Carlson sued in Superior Court in New Jersey naming former Fox News Chairman, Roger Ailes, as the lone defendant in a NYC Human Rights Law case alleging sexual harassment at the hands of Ailes. By not naming Fox News, Carlson hoped to avoid the imposition of mandatory arbitration. On July 8, 2016, Ailes filed a Notice of Removal to the U.S. District Court in New Jersey, a motion to stay all proceedings in New Jersey and to compel arbitration. A week later, Ailes filed a Petition in the Southern District of New York to arbitrate all matters involving Carlson. Ailes v. Carlson, 16-cv-05671 (S.D.N.Y. 2016). On July 21, 2016 Ailes resigned from Fox, and by Sept. 6, 2016 the parties filed a Voluntary Order of Dismissal, reportedly settling her case for $20 million, without any court ever weighing the arbitrability of Carlson’s claims.

Conversely, on Aug. 22, 2016, former Fox News Anchor Andrea Tantaros sued several individual defendants, including Ailes and Fox News, also claiming, in part, discrimination based on sex. She too argued that the arbitration provision did not apply to her claims against the individual defendants. Tantaros v. Fox News Network, New York County Supreme Court, Index No. 157054/2016. Fox filed a motion to stay the action and compel arbitration seven days later. The result there was that on Feb. 15, 2017, Justice David Cohen ruled from the bench granting the motion to compel arbitration after oral argument. The difference in terms of the outcome in each case was based on nothing more than timing.

Would Carlson’s case have been forced to arbitration if the court was required to make a decision? The answer is most assuredly “yes” based on the prevailing law, which is clearly more arbitration friendly, and it is expected that this circumstance will continue despite pushback from employment rights advocates. As recently as May 15, 2017, the U.S. Supreme Court has reiterated its long-standing doctrine that arbitration agreements must be placed on an equal plane with other contracts under the Federal Arbitration Act (FAA). Kindred Nursing Centers Ltd. Partnership v. Clark, 137 S.Ct. 1421. In a concise opinion, Justice Elena Kagen made it abundantly clear that under the FAA, arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. §2 establishes an “equal-treatment principle” such that a court may not invalidate an arbitration agreement based on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” AT&T Mobility v. Concepcion, 131 S.Ct. 1740, 1746 (2011).

The Supreme Court has not wavered in its holding that the FAA “preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements.” Kindred Nursing Centers Ltd. Partnership, 137 S.Ct, at 1423). In DIRECTV v. Imburgia, 136 S.Ct. 463 (2015) the Supreme Court, in a 6-3 decision, reversed the California Court of Appeals which had determined, essentially, that it could apply a prior California law which made a class-arbitration waiver in an employment setting unenforceable.

Against this backdrop, much has been made of the impact of mandatory arbitration clauses in employment agreements and handbooks which critics contend prevent transparency, limit the employee’s choice of forum, and often result in lower recoveries than were possible if their claims were tried by a jury. They are correct on each account as a general rule, but it begs the question: Is that not the whole point of employer’s requiring arbitration rather than permitting litigation in the first place? Employers will cite to the fact that arbitration maintains confidentiality which, from a business standpoint, is important. They would also cite to decreased costs, although any practitioner who arbitrates and litigates in court might not be convinced that the costs associated with arbitration are less than what would have been expended in court. Finally, to the extent arbitration does keep damage awards down, that is exactly what the employer is hoping to do when faced with any legal claim. Yet, the question is still asked: Should mandatory arbitration clauses bar a litigant’s claims that the employer violated state or federal law as opposed to applying solely other contractual conditions of employment? In 2016, a ground swell began to form to limit mandatory arbitration as far as employment was concerned. That year, Sens. Al Franken and Patrick Leahy reintroduced a bill that proposes that any claim that violates state or federal law would automatically bypass any arbitration clause and be permitted to proceed to the courts. A number of states also began proposing similar litigation. In light of present political circumstances, however, it is unlikely that any such legislation will ever be passed.

In New York, the Second Circuit has made it clear that the court must address three primary issues: (1) whether the parties agreed to arbitrate; (2) the scope of that agreement; (3) if federal statutory claims are asserted, whether Congress intended those claims to be nonarbitrable. SDD99 v. ASA Int’l, 2007 WL 952046, at *5 (W.D.N.Y. 2007) (citing JLM Indus. v. Stolt-Nielsen SA, 387 F.3d 163 (2d Cir. 2004); Oldroyd v. Elmira Sav. Bank, 134 F.3d 72, 75-76 (2d Cir. 1998). In regard to the first issue, it is not enough to claim that the employee was forced to enter into the arbitration agreement as a condition of employment. “Even if the Agreement was a form contract offered on a ‘take-it-or-leave-it’ basis and [the party] refused to negotiate the Arbitration Provision, this is not sufficient under New York law to render the provision procedurally unconscionable.” Nayal v. HIP Network Servs. IPA, 620 F. Supp. 2d 566, 571 (S.D.N.Y. 2009); Gilmer v. Interstate/Johnson Lane, 500 U.S. 20, 33, 111 S.Ct. 1647 (1991) (“[m]ere inequality in bargaining power … is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context”).

As for any overbreadth argument, the scope of most arbitration agreements is purposefully broad. A broad arbitration clause “creates a presumption of arbitrability which is only overcome if ‘it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that [it] covers the asserted dispute.'” WorldCrisa v. Armstrong, 129 F.3d 71, 74 (2d Cir. 1997) citing Collins & Aikman Prod. Co. v. Building Systems, 58 F.3d 16, 20 (2d Cir. 1995) (“submitting to arbitration ‘[a]ny claim or controversy arising out of or relating to th[e] agreement,’ is the paradigm of a broad clause”); Tong v. S.A.C. Capital Management, 52 A.D.3d 386, 387 (1st Dep’t 2008).

In regard to the third issue, there is little doubt that claims under Title VII and the NYSHRL are arbitrable. See, e.g., Desiderio v. Nat’l Ass’n of Sec. Dealers, 191 F.3d 198, 206 (2d Cir. 1999) (discussing purpose and history of Title VII and concluding Congress did not intend to preclude arbitrability); Johnson v. Tishman Speyer Properties, L.P., 2009 WL 3364038, at *3 (citing Fletcher v. Kidder, Peabody & Co., 81 N.Y.2d 623 (1993) (race discrimination claims under the NYSHRL are arbitrable)).

So how would Carlson’s argument have fared that, since Ailes was not a signatory to the arbitration agreement, a claim against him solely was not subject to mandatory arbitration? Well, if Justice Cohen’s decision in Tantaros’s case is of any guidance, probably not well. In his decision on the record, Justice Cohen was not moved by the argument that the agreement containing the arbitration clause was non-assignable and excluded third party beneficiaries. In the end, Justice Cohen’s determination that, even though not signatories to the arbitration agreement, the individual defendants could invoke the arbitration clause and compel arbitration, is wholly consistent with Second Circuit law. Roby v. Corporation of Lloyd’s, 996 F.2d 1353 (2d Cir. 1993) (“Courts in this and other circuits consistently have held that employees or disclosed agents of an entity that is a party to an arbitration agreement are protected by that agreement”); Tracinda v. DaimlerChrysler AG, 502 F.3d 212 (3d Cir. 2007) (“The Pritzker rule—that non-signatory agents may invoke a valid arbitration agreement entered into by their principal—is well-settled and supported by other decisions of this Court.”).

While there can be no doubt that employees would rather, if possible, have their claims heard by a jury of their peers rather than an arbitrator (depending on the jurisdiction), the status of the law, at least for the foreseeable future, seems strongly in favor of the employers’ use of arbitration to resolve workplace disputes of all manner and kind. As for Tantaros, in litigation, as in life, sometimes timing is everything.

Reprinted with permission from the June 20, 2017 issue of New York Law Journal. 2017 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

A. Thomas Levin Authored, “President Robert W. Corcoran- A Lawyer’s Lawyer: A Leader in the Legal Profession” for the Nassau Lawyer

Robert W. Corcoran, who served as President of the Nassau County Bar Association from 1982-83, passed away on April 30, 2017 at 97 years of age, just before the Bar Association was to honor him for 70 years of the practice of law at the Annual Dinner Dance.

I had the privilege to serve on the Association Board of Directors with Bob over many years, before, during and after his term as President. He was at all times a highly respected voice, honest and impartial, deliberative and wise. He was a leader and a visionary, and always had the best interests of NCBA at heart. Because Bob was one of a kind, and had so many accomplishments to his credit, I am honored to write this celebration of his life.

World War II Action

Bob was born in Brooklyn in 1919. He was attending St John’s University School of Law when the Second World War broke out. In an act that would surprise nobody who knew him then or later, he immediately volunteered for the military, and he served in the US Army for three years in the South Pacific, participating in the historic capture of Iwo Jima.

Two weeks after his return from service, he married his pre-war sweetheart, Lorraine Gregory of Williston Park, NY. Together, they raised a family of five children in Hicksville. Bob received his law degree with honors from St. John’s and was admitted to the New York Bar in 1947. He earned a Master’s degree from New York University, and was admitted to practice in various federal courts, including the United States Supreme Court, and in 1953 joined the Nassau County Bar Association. In private practice, he became a partner and commercial litigator in the renowned Garden City law firm of Speno, Goldberg, Moore, Margolies and Corcoran.

Guiding the Bar

Throughout his long career, Bob was an exemplar for the legal profession, providing wise counsel and timely advice in the public and private sectors, in his community and among his colleagues.

He chaired many Association committees, notably the Judiciary Committee and the Grievance Committee. During his tenure as President, he led the Association through financially troubled times following the expansion of Domus and the addition of the dining room a few years earlier. He was a strong proponent of the Lawyer Referral Service, and pursued (and achieved) membership growth.

Bob promoted NCBA’s arbitration system as a means to relieve crowded court calendars in hopes that it would benefit the public and the membership. This program evolved into today’s NCBA Mediation and Arbitration service available to the public and the Bar with members screened by the Judiciary Committee serving as mediators and arbitrators

Bob was a strong advocate for the preservation of human rights and dignity, asserting that protection of that dignity should be the main purpose of lawyers and judges. His February 1983 President’s Letter in the Nassau Lawyer sums up his support for Bar Association membership:

“The Association is the attorney’s voice, the attorney’s means of dialogue with the other segments of our society, and his instrument of communication with its components and with those who, rightly or unjustly, accuse the profession of being less than it actually is. We solicit your continued activity in the Bar, and suggest that you do your best to increase its membership by urging those who have not joined us to do so.”

Most notably, in 2003 he received the Association’s highest honor, the Distinguished Service Medallion, in recognition of his impact to enhance the reputation of the legal profession and outstanding service to his clients and his community.

Bob was also heavily involved with the New York State Bar Association. He served on several committees and in the House of Delegates, and in the early 1980’s he was honored as NYSBA’s Pro Bono Attorney of the Year. He was a member of the American Arbitration Association, and served as an arbitrator in many commercial disputes.

Community Leadership

Bob fully engaged in a variety of activities for his community and was a respected leader in all. In the 1950’s he served as Grand Knight of the Knights of Columbus and President of the Ancient Order of Hibernians in Hicksville. He was counsel for the Hicksville Fire Department, the attorney for the Hicksville School District, and was elected to the Hicksville Board of Education. He also served as the Assistant Counsel and Deputy Commissioner of the New York State Liquor Authority.

Among his other talents, Bob was an avid golfer, and high among his achievements was a hole in one at the Wheatley Hills Golf Club.

Following a divorce in 1980, Bob was married to Dr. Virginia Maurer, whom he met at a Christmas party at the home of his brother-in-law, Jon Santemma. Bob and Ginny had two more children. Bob is survived by six of his seven children: sons Paul (a member of NCBA), Timothy and Robert, and daughters Mary Zilko, Kimberly Corcoran and Tammy Fortune. Bob is also survived by eight grandchildren and one great-grandson.

On a personal note, Bob was a mentor and friend to me, always willing to offer helpful and wise counsel. Without his support and advice at the State Bar Nominating Committee, I would never have become President of the State Bar. I am but one of many who owe him much.

With all his achievements and accomplishments, Past President Jon Santemma (1979-1980) correctly sums up Bob’s persona as “a regular, good guy, with a great sense of humor. He was good company and a good guy to be with.”

He was straight as an arrow, business like, dedicated to the law, compassionate and impartial. Applying his military perspective, he made sure everything he did was a proper application of the law, but he always displayed his human, caring side.

The Bob Corcorans of the world come along far too infrequently. All of us who knew him are honored to have had that opportunity; his family, friends and profession mourn his passing.