One Simple Way to Avoid Litigation – Always Have an Attorney’s Fee Provision in Your Controlling Documents

May 10, 2012 at 11:06 am | Latest News, Uncategorized | No comment | By Chris Cramer

Always have an attorney’s fee provision in your controlling documents.  It seems like a simple concept to understand.  Repeat it now:  Always have a fee provision.  Without a fee provision, the party contemplating litigation only has to answer the question: “How am I going to pay my lawyer to pursue my claims in this case?” With plenty of lawyers out there working on contingent fees in this economy, answering that question is becoming a lot easier.  However, if there is a fee provision in the contract or other controlling documents, the party contemplating litigation not only has to figure out how to pay their own lawyer to litigate their claims– but also has to come up with an answer to the follow up question: “How am I going to pay my opponent’s lawyer’s fees if I lose my case?”  No one likes to lose in litigation—but think of how much more that loss is going to sting if you have to pay both your own attorney to lose your case and you have to pay your victorious opponent’s attorney’s fees for the privilege of losing.     

 Washington courts even recognize the importance of attorney’s fee provisions, as the courts convert unilateral fee provisions (awarding fees to one party only for the win) into bilateral fee provisions, allowing the winning party, regardless of the actual terms of the fee provision, to collect their attorney’s fees for defeating an action brought by the losing party.

 Not surprisingly, attorney’s fee provisions oftentimes operate as a deterrent to the pursuit of meritless litigation and promote resolving a dispute without resorting to the courts.  Which is just another reason to…always have an attorney’s fee provision in your controlling documents.

Financial Power of Attorney May Not Grant as Broad Powers as You Might Think

May 2, 2012 at 4:37 pm | Latest News | No comment | By Per Oscarsson

            A power of attorney authorizes a person (the attorney-in-fact) to act on behalf of another person (the principal).  Sometimes the power of attorney authorizes the attorney-in-fact to make decisions on behalf of the principal relating to the principal’s health care as well as to the principal’s non-health care, or financial, matters.  Sometimes the power may be granted only as to financial matters.  Often, the attorney-in-fact for financial matters has “all powers of absolute ownership” of the principal or the document granting the power of attorney contains language that the attorney-in-fact “shall have all the powers the principal would have if alive and competent.”  This implies that the attorney-in-fact could do anything on behalf of the principal that the principal could do.  But that is not the case in the state of Washington.

                In Washington, even though a power of attorney contains either of the phrases quoted above, the attorney-in-fact does not have all of the principal’s powers.  For example, the attorney-in-fact does not have the power to make, amend, alter, or revoke the principal’s wills or codicils.  In addition, there are a number of powers the attorney-in-fact does not have unless they are specifically provided for in the document granting the power of attorney.  For example, unless specifically granted in the document, the attorney-in-fact does not have the power to change the beneficiary on the principal’s life insurance policies, to change payable on death or transfer on death beneficiary designations, to make gifts of property owned by the principal, or to disclaim property.  The Washington Legislature recently amended the law to add to the list of powers that must be specifically granted in the document in order to be effective.  If you are considering granting a financial power of attorney to someone, or updating an existing financial power of attorney, please contact Per Oscarsson or one of the other members of Beresford Booth’s Planning/Probate Group.

When A Criminal Background May Not Be Enough To Exclude An Applicant From Employment

April 27, 2012 at 12:26 pm | Latest News | No comment | By Dimitra Scott

Criminal background information is another valuable tool utilized by companies making employment related decisions, such as hiring and termination.  Should your company consider this information when making critical employment decisions?  Absolutely, but do so informed about the risks and with a policies in place to ensure your company does not inadvertently subject itself to liability under Title VII.

The Equal Employment Opportunity Commission recently issued new guidelines on the use of Arrest and Conviction records in employment decisions.  In short, despite feeling justified in an employment decision based on a criminal history, the decision may nevertheless violate Title VII.  The following are two examples of potential inadvertent violations:

Example 1

Candidate A and Candidate B have each been arrested in the past on a charge of domestic violence, but neither candidate was ultimately convicted.  Candidate A is a woman.  Candidate B is a man.  Assuming their qualifications are otherwise equal and the employer extends an offer to Candidate B, Candidate A may have a claim against the employer. 

Why?  Employers cannot treat applicants with the same criminal records differently because of their race, color, religion, sex, or national origin.  This is an example of “disparate treatment discrimination.”  This does not mean the employer was not justified in its hiring decision, but the basis for the decision must be well documented.

Example 2

Employer considers 10 applicants for employment: 8 applicants have nonviolent criminal convictions in the last 10 years and the remaining applicants have no criminal record.  Of the applicants with criminal records, 6 are members of a protected class based on their race or national origin.   The remaining applicants are caucasian men, in their mid-twenties.  The employer dismisses all 8 applicants with criminal records. 

What is the problem?  Under Title VII, even where an employer applies its policy to dismiss applicants due to criminal records without exception, the exclusions may still operate to disproportionately exclude people of a protected class.  Here, of the 10 applicants, the employer’s policy resulted in dismissal of 6 members of a protected class (e.g., 60% of the applicant pool).  This issue is referred to as “disparate impact discrimination”.

To justify its practice in light of the disparate impact, the employer must show that dismissal of the applicants was “job related and consistent with business necessity”.  For example, if these were applicants for a job as a bank teller and the convictions of each dismissed applicant related to theft, there may well be a “job related and consistent with business necessity” sufficient to excuse the disparate impact of the employment decision.   These issues must be carefully considered to mitigate the risks associated with Title VII litigation.

The bottom line: Employers should mitigate their risk of legal exposure with sound practices and policies.  Where potential risk is identified, consult with legal counsel. We are here to help—contact Dimitra Scott or one of the other members of Beresford Booth’s Business Group.