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Searching for Articles published in August 2016.
Found 11 Results.

Agreement Prohibiting Solicitation of Employees by Former Employee may be Unenforceable

Posted on August 23, 2016, Authored by Dean R. Dietrich, Filed under Employment

A recent decision from the Wisconsin Court of Appeals has raised serious questions regarding non-solicitation agreements that are often included as part of an employment agreement or severance agreement.  A non-solicitation agreement typically prohibits a departing employee from soliciting to hire other employees of your company to go to work for a competitor or for the business the departing employee is engaged in.  Non-solicitation agreements are often included in a non-compete agreement and have been broadly crafted to prevent a departing employee from soliciting other employees to leave your company and go to work elsewhere.  In the court of appeals decision issued on August 17, 2016, the court determined that the non-solicitation language must be reviewed in the same manner as a non-compete agreement.  The agreement will only be valid if the language is reasonably necessary to protect the employer from unfair competition by a former employee.  Under this ruling, courts will review non-solicitation provisions with the same scrutiny as a non-compete clause and consider the geographical area that is covered and the length of time the provision is in effect.  In other words, the non-solicitation clause will only be considered valid and applicable to the departing employee if the provisions are reasonable and necessary for protecting your company from unfair competition.  This means the duration of the non-solicitation prohibition and perhaps a geographical limitation will be subject to review and scrutiny by the court as to whether it is reasonable under the circumstances. In the case in question, the non-solicitation clause was written too broadly because it prohibited the departing employee from soliciting or encouraging company employees “to terminate their employment” or to “accept employment with any competitor, supplier or customer.”  The court held that this language was too broad and provided an unreasonable restriction on the rights of the departing employee to communicate with other company employees about possible employment with another company. This is a court of appeals opinion that may or may not be reviewed by the Wisconsin Supreme Court.  It does require employers to assess their non-solicitation clause in employment agreements to provide some reasonable limitations on the applicability of such a clause to a departing employee.

School Law Seminar - Fall 2016

Posted on August 3, 2016, Authored by ,

Holiday Inn & Suites, 1000 Imperial Ave, Rothschild, WI Contact Shannon Jacobson at 715.845.4336, 800.477.8050 or via e-mail at sjacobson@ruderware.com. SCHOOL LAW ISSUES 4:30 - 5:30 p.m. Dean R. Dietrich, Kevin J.T. Terry, Mary Ellen Schill, and Bob Reinertson will discuss: Student conduct issues including dealing with transgender students and social media activity of students. Wisconsin Open Meetings Law including the recent decision regarding special committee and obligations under the Open Meetings Law. Wisconsin Public Records Law and recent decisions. Update on ACA activities. DINNER AND NETWORKING 5:30 - 6:15 p.m SCHOOL RELATIONSHIPS WITH LAW ENFORCEMENT 6:15 - 7:30 p.m. Matt Barnes of the Wausau Police Department and Mosinee School Board will give a presentation regarding the relationship between police and school officials. A panel discussion will ensue including Mr. Barnes and Ruder Ware attorneys. printable invitation

Protect Your Assets - Medical Assistance & Long-term Care Planning Fall 2016 - Wausau, WI

Posted on August 29, 2016, Authored by ,

Holiday Inn & Suites, Rothschild, WI 1000 Imperial Drive The Need for Planning Who Is Eligible for Medical Assistance Planning? Protection of the House and Vacation Home Permitted Transfers of Assets Using Trusts to Protect Your Assets This seminar is presented at no charge - refreshments are included. It is offered at both 10:30 a.m. and 5:30 p.m. Please specify a time when registering. Please contact Shannon Jacobson sjacobson@ruderware.com, 715.845.4336 or 800.477.8050.  Thank you.

Protect Your Assets - Medical Assistance & Long-term Care Planning Fall 2016 - Eau Claire, WI

Posted on August 29, 2016, Authored by ,

Holiday Inn Eau Claire 94 South 4751 Owen Ayres Ct, Eau Claire, WI The Need for Planning Who Is Eligible for Medical Assistance Planning?  Protection of the House and Vacation Home  Permitted Transfers of Assets  Using Trusts to Protect Your Assets This seminar is presented at no charge - refreshments are included. It is offered at both 10:30 a.m. and 5:30 p.m. Please specify a time when registering. Please contact Teresa Meier tmeier@ruderware.com, 715.834 3425 or 800.477.8050.  Thank you.

Employers Who “Usually” Employ 3 or More Employees: the Threshold for Mandatory Worker’s Compensation in Wisconsin

Posted on August 2, 2016, Authored by Russell W. Wilson, Filed under Employment

In general (i.e. non-farm) employment, Wisconsin’s Worker’s Compensation Act becomes mandatory for employers under either of two circumstances.  In the event such an employer pays $500 in wages during any calendar quarter, worker’s compensation becomes mandatory on the 10th day of the next quarter.  That’s a “bright line” rule.  Alternatively, worker’s compensation becomes mandatory when the employer “usually” employs three or more employees during a calendar quarter (irrespective of the total amount of wages paid) which also becomes effective on the 10th day following that quarter.  This alternative threshold criterion is much less clear because the Worker’s Compensation Act does not define the term “usually.”  So what does the term “usually” mean for the small business that once in a blue moon hires one, two, or three people for a small amount of work for which it pays very small wages?  The Wisconsin Court of Appeals interpreted the meaning of “usually” in this context in Noyce v. Aggressive Metals, Inc., 2016 WL 4016088 issued on July 28, 2016.  The facts on which the Noyce case was based were straight-forward.  The employer, Aggressive Metals, offered on December 27, 2010, one week’s worth of work to Noyce to install insulation in its building.  Aggressive Metals had been in business for only about 10 months and had only two employees, Neil and Nick Holland, brothers who owned the corporation.  Noyce performed the installation work and suffered  a serious injury when he fell through a ceiling on the last day of his employment, January 4, 2011. The work had begun before December 31, 2010, which meant that as of the fourth quarter in 2010, Aggressive Metals had in its employment three employees (the Holland brothers and Noyce).  Presumably, any wages paid for services during that quarter did not equal or exceed the sum of $500.  Under the Worker’s Compensation Act, worker’s compensation would become mandatory on January 10, 2011, i.e. the 10th day in the next succeeding quarter, i.e. the first quarter of 2011.  Noyce sought coverage under the Act for his injuries.  Noyce argued that a case decided by the Wisconsin Supreme Court in 1947 was binding precedent, but the court of appeals pointed out that the current version of the Worker’s Compensation Act on this very point had been amended by the legislature after the 1947 case. It still remained, however, for the court of appeals to interpret the meaning of “usually” because the legislature did not define that term in the statute.  The court of appeals did what courts do in that circumstance – consulted a well-recognized dictionary.  The court of appeals relied on Black’s Law Dictionary (10th ed.2014) (“ordinary; customary”) and Webster’s Third New International Dictionary ( (1) “by or according to habit or custom” and (2) “more often than not”).  The court of appeals noted that Aggressive Metals had been in business for only 10 months during which period it had only two employees until it offered “limited, short-term work” to a third employee.  Under this circumstance, Aggressive Metals was held not to have “ordinarily, customarily, or habitually employ three employees at the time Noyce was injured.”  And having a third employee “for a few days” did not suffice to meet the “more often than not” definition of “usually.” Noyce was not alone in seeking worker’s compensation benefits; his claim was supported by the Department of Workforce Development Uninsured Employers Fund (“UEF”).  Evidently, Aggressive Metals had not purchased a worker’s compensation policy on a voluntary basis.  Why might a start up business have done so?  Because if the UEF is required to pay worker’s compensation benefits (which in this case it did not have to do), it must seek reimbursement from the uninsured employer.  Moreover, individual owners of a corporation are not shielded from liability to the UEF, and the standard personal exemptions in bankruptcy are not applicable as against the UEF.  Uninsured employers who are found to be required to have mandatory worker’s compensation may face serious and unappreciated, financial risk.  Even start up companies on a tight budget should strongly consider obtaining a worker’s compensation policy on a voluntary basis.

Same Loan Application, Only Different

Posted on August 30, 2016, Authored by Ruder Ware Attorneys, Filed under Banking and Financial Matters

Last month the Bureau of Consumer Financial Protection (CFPB) quietly approved a revised and redesigned Uniform Residential Loan Application (URLA) for 2017 to allow for the collection of more information about the ethnicity and race of loan applicants. With some exceptions, Regulation B § 1002.5(b) generally prohibits a creditor from inquiring about the race, color, religion, national origin, or sex of an applicant or any other person in connection with a credit transaction.  However, Regulation C, as amended by 2015 Home Mortgage Disclosure Act final rule, will require financial institutions to permit applicants to self-identify their race and ethnicity beginning January 1, 2018.  However, before that date, such inquiries will not be required by Regulation C or allowed under Regulation B. The redesigned URLA and accompanying CFPB staff opinion will allow a financial institution, as of January 1, 2017, to permit applicants to self-identify their race and ethnicity without being in violation of Regulation B § 1002.5(b).  Read the complete CFPB here.

Legally Speaking: A Transforming Legal Marketplace and its Impact on Business

Posted on August 9, 2016, Authored by Matthew D. Rowe,

Like many industries worldwide, the legal world finds itself in an era of transformation.  After decades of rapid growth, the demand for traditional legal services has slowed enormously since 2008.  A number of factors drive this sea change—two of the most important are the influence of technology and globalization. The Influence of Technology on the Law The practical impact of modern-day communication technologies is that a law firm no longer needs to be physically located in a city next to the courthouse and near the client.  Firms can now exist virtually anywhere and provide the same advice and services. Law libraries once stacked with books are now relics—most reported cases, laws, statutes, and regulations are easily accessible by anyone online.  Lawyers can no longer claim to have exclusive access to the "secret archives" of the law. Technology makes it increasingly possible to displace lawyers who handle routine legal matters.  Computerized programs or low-paid workers located 10,000 miles away can often perform the same tasks at a lower price. The Tidal Wave of Globalization A second factor affecting the legal marketplace is globalization.  Growing numbers of businesses are no longer local and thus require legal advice from wider geographic areas.  It is increasingly difficult for the single-office law firm to effectively respond in a cost-efficient manner. Increasing numbers of companies conduct business both nationally and globally, which drives demand for quality legal advice from a broad range of jurisdictions instead of just within a single market. What these Developments Mean for You The swift, radical transformation of the legal market promises to permanently alter how companies work with law firms and lawyers—businesses are now in greater control over their choice of legal providers and over the cost of legal advice and guidance.  These factors present those seeking legal advice with many more options and price points. Options for Legal Advice in a Global Marketplace While large international law firms have the advantage of excellent resources, reputation, status, and credibility, they rarely cover all key global markets and legal costs are uniformly high.  Additionally, their service can be weakened by a “long chain of advice,” meaning that while the firm’s core may be strong, its expertise in all jurisdictions may not be uniform. An independent national firm can offer excellent jurisdictional and legal expertise for their area; a national culture closely akin to major national corporate clients; a short, personalized service chain; and an established understanding of and familiarity with national judicial and regulatory practice.  That said, this type of firm will need some very good friends or a reliable international network to cover their needs in cross-border business and foreign jurisdictions. Boutique law firms offer high competence in narrow, specialized areas, but do not provide general commercial or litigation expertise that is often needed by domestic and global businesses.  This characteristic often requires businesses to hire a second firm. When a business operates exclusively within a specific area, regional law firms can be a good alternative; however, their costs tend to be higher than local firms, and, should a business need it, regional firms offer no coverage outside of their confined areas. Legal Networks and Alliances Faced with profound change in an increasingly global marketplace, many law firms have joined legal networks and alliances.  These relationships provide firms with local knowledge and insight by experienced local practitioners, a larger coverage area, and lower fees when compared with the rates charged by Wall Street firms and larger international firms.  These networks can often be more flexible in their approaches, and there is less chance of a conflict of interest. One potential disadvantage of legal networks is a lack of assurance that the quality of legal counsel is consistent and of high-value.  This means that a network must continuously monitor and evaluate its member lawyers and law firms. Meritas (www.meritas.org) is an example of a highly efficient and competent global legal network.  It has received an elite rating from Chambers (a lawyer and law firm rating service) and is recognized for its quality assurance program, which requires that each Meritas member firm be recertified every three years—or be replaced.  With 176 member firms in 76 countries; 7,000 member lawyers; and 220 law offices located throughout the world, Meritas member firms provide a broad scope of legal services for businesses worldwide. Conclusion While there are a number of options available to businesses requiring legal advice, one of the most cost-effective global options is to work with an independent law firm that is a member of a high-quality legal network with a broad geographic reach.

Taking the Ride for Juvenile Diabetes

Posted on August 24, 2016, Authored by , Filed under Community

On August 13, Melissa Kampmann rode in the  Juvenile Diabetes Research Foundation (JDRF) Ride to Cure Diabetes. The 100 mile route started in La Crosse, Wisconsin and moved through stretches of Minnesota and Iowa, circling back to La Crosse.  More than 350 riders rode to raise money for a cure to type 1 diabetes (T1D), of those riders 53 have T1D.  JDRF hosted several rides throughout the United States in the hopes of raising $8 – 10 million for clinical trial research.  80% of the funds raised goes towards research while 20% goes to offset fundraising, promotion, and administrative costs. Melissa trained for 23 weeks in order to participate in the ride.  Training wasn’t just about getting in shape, it was also about learning how to balance her medications with the nutrition needed for energy.  Managing her blood sugar isn’t as simple as taking medication and eating the right foods.  Managing her health is a careful balancing act because blood sugars are significantly affected by exercise, air temperature, humidity, hydration, stress, hormones, food, and as Melissa says the flight patterns of the monarch butterflies.   Type 1 diabetes is an autoimmune disease where the body attacks the pancreas which produces insulin, the hormone that converts the food we eat into energy.  Over her 23 weeks of training, Melissa spent a lot of time working with a coach to determine how much medication to take and what types of food would provide her with energy and electrolytes but not raise her blood sugars significantly.  Through a lot of frustration over the 23 weeks, Melissa learned that there was a reason only 53 diabetics were daring enough to take on the challenge. Nearly her entire family was there to cheer her on.  When asked why she did it, Melissa comments, “When I was diagnosed 27 years ago, I was told not to do certain things-do not have children, do not exercise for more than an hour, do not put yourself in stressful situations.  Shockingly, I didn’t listen and I’m proud to say that I’ve done everything I have ever wanted to do and I’ve done it safely and I’m healthy.  My daughter was diagnosed at age 5, five years ago.  I have always told her to never let her disease stand in the way and I wanted to show Makenna that even diabetics can take on something extreme like riding 100 miles, we just need to do it differently to stay safe.” Going into the ride, many heard Melissa comment this would be her first and last time.  But, since, Melissa’s not too sure.  “It was a special, emotional weekend that I will never forget.  The camaraderie and the cause are so great, I just might do it again.”  And soon, Makenna will be able to join her mom in making a difference, by participating in the ride.

The Eleventh Circuit Stays Challenge to the Clean Water Rule

Posted on August 22, 2016, Authored by Russell W. Wilson,

On August 16, 2016, the United States Court of Appeals for the Eleventh Circuit, which is located in Atlanta, issued its stay of proceedings in the challenge before that circuit to the Clean Water Rule that was filed in the federal district court for the southern district of Georgia.  State of Georgia, et al., v. McCarthy, No. 15-14035-EE.  The same challenge is well underway in the Sixth Circuit, which is located in Cincinnati.  According to the Eleventh Circuit “[i]t would be a colossal waste of judicial resources for both this Court and the Sixth Circuit to undertake to decide the same issues about the same rule presented by the same parties.”  The Eleventh Circuit opinion provides a helpful chronology of the legal challenges to the Clean Water Rule: June 29, 2015 – EPA and the Corps of Engineers jointly issued the Clean Water Rule, which defines the jurisdiction of the Clean Water Act.  July 20, 2015 – Eleven states, including Wisconsin, filed with the Eleventh Circuit what they called a “protective” petition for direct review by that court of appeals (anticipating that a final determination might be made that original jurisdiction lies with the court of appeals and not with the district court).  June 30, 2015 – Those same eleven states filed suit in the U.S. District Court for the Southern District of Georgia challenging the rule and seeking a preliminary injunction of its enforcement (State of Georgia v. McCarthy) (anticipating that original jurisdiction might be determined to lie in the district court, not in the court of appeals).  July 28, 2015 – The Judicial Panel on Multidistrict Litigation transferred the protective petition from the Eleventh Circuit to the Sixth Circuit and ordered that it be consolidated with other similar challenges to the Clean Water Rule.  The Sixth Circuit then issued a nationwide stay of enforcement of the Clean Water Rule while the consolidated challenges are pending (In Re EPA I).  August 27, 2015 – The district court in State of Georgia v. McCarthy held that original jurisdiction lies exclusively with the court of appeals and, therefore, denied the motion for preliminary injunction.  The denial of this motion is what was appealed to the Eleventh Circuit.  February 22, 2016 – The Sixth Circuit held that the court of appeals, not the district court, has original jurisdiction to determine the challenge to the Clean Water Rule (In Re EPA II).  February 22 - August 16, 2016 – The parties to the petition pending in the Sixth Circuit challenge, which includes all of the parties to the petition that was filed protectively in the Eleventh Circuit and in the district court in the Southern District of Georgia, have worked to develop the briefing schedule and to pare down the contents of the administrative record, “which is more than a million pages long.” In light of the Sixth Circuit’s ruling that original jurisdiction lies in the court of appeals, the Eleventh Circuit asked the parties to brief additional issues, including whether the Sixth Circuit’s decision rendered the protective petition filed before the Eleventh Circuit moot.  Relying on case law from the U.S. Supreme Court, the Eleventh Circuit determined on August 16, 2016, that it holds discretionary authority to hear the protective petition or not and that its discretion is to be informed on principles of wise judicial administration, regard for judicial resources, and comprehensive disposition of judicial litigation.  As noted in the first paragraph of this article, the Eleventh Circuit exercised its discretion firmly against duplicative litigation.  “If there were an exhibition hall for prudential restraint on the exercise of judicial authority, this case could be an exemplar in the duplicative litigation wing.”  The Eleventh Circuit pointed out that the Sixth Circuit is “the obvious court to proceed to decision because it is significantly farther along the decisional path than we are.”  Among other reasons, the Sixth Circuit “is in the process of winnowing down the massive administrative record to its most relevant parts.”  The Sixth Circuit decision might end the matter or at least “narrow and refine, if not render moot, at least some of the issues [the Eleventh Circuit] asked the parties to brief.”  So we await the decision on the merits from the Sixth Circuit Court of Appeals.

IRS Releases Proposed Regulations That Will Affect the Ability to Transfer Your Family Business to the Next Generation

Posted on August 2, 2016, Authored by ,

On Tuesday, the IRS released proposed regulations that will prevent owners of interests in a family business from being able to value those interests at a discount when transferring them to the next generation of owners, either through lifetime gifts or transfers at death.  Under current law, a typical planning scenario with a family-owned corporation (it could also be a partnership or a limited liability company) involves the owners (let’s say it’s the parents, George and Mary) exchanging their shares of stock for an identical percentage of a small number of newly issued voting shares and a large number of newly issued non-voting shares.  George and Mary retain control of the business by retaining their voting shares.  They are able to efficiently transfer a significant percentage of the business, and all future appreciation on that percentage interest, by gifting or selling their non-voting shares to their children or to trusts established for their children.  The efficiency results from the fact that under current law, the non-voting shares can be valued at a discount from full market value because they lack voting rights.  This discount is called a lack of control discount. A brief review of U.S. transfer taxes may be helpful to fully appreciate the impact of the proposed regulations on George and Mary.  Each year, George and Mary may transfer assets up to the annual exclusion amount (currently $14,000) to as many individuals as they want without incurring any transfer tax liability.  In addition, each may transfer assets up to the lifetime exclusion amount (currently $5,450,000), either through lifetime gifts or transfers at death, without incurring any transfer tax liability.  Except for transfers to each other (because they are married), any transfer by George or Mary in excess of the available annual exclusion amounts and the lifetime exclusion amount is subject to a 40% transfer tax (either a gift tax for a lifetime transfer or an estate tax for a transfer at death).  Accordingly, for purposes of transferring interests in their family business to the next generation of owners, the lower the discounted value of George and Mary’s non-voting shares, the more they can transfer (either during their lifetimes or upon death) without the imposition of a transfer tax. The proposed regulations remove the ability of business owners like George and Mary to value their non-voting shares at a discount for gift and estate tax purposes.  Instead, non-controlling interests in a family business will be valued the same as controlling interests, in other words at full market value.  Thus, depending on the value of the family business, it will be more difficult to transfer ownership to the next generation without incurring either a gift tax or an estate tax.  Moreover, if parents like George and Mary decide to sell their interests to the next generation of owners, rather than transfer them by gift, the sales price will be higher under the proposed regulations because non-controlling interests may not be valued at a discount. There is still time for family business owners to take advantage of current law, which allows non-controlling interests to be valued at a discount for transfer tax purposes.  Before the final regulations will be published, the IRS provides opportunities for public comments and a public hearing.  The public hearing is scheduled for December 1, 2016, and the final regulations are not expected to be published before the end of the year.  Therefore, family business owners should be able to complete gift and sale transactions before the end of the year taking advantage of valuation discounts allowed under current law. If you have questions about planning for the transition of ownership in a family business, please contact any of the attorneys providing counsel on family business succession planning.

Local Government Seminar - Fall 2016

Posted on August 24, 2016, Authored by ,

Seating is limited, please register by September 21, 2016 by contacting Shannon Jacobson at: sjacobson@ruderware.com or (715) 845-4336. PRESENTATIONS 4:00 - 5:00 p.m. • Health Care Requirements    Mary Ellen Schill • Open Meetings and Public Records Law Update    Kevin Terry • Local Government Officials Code of Ethics Update    Bob Reinertson • ADA and Reasonable Accommodation in the Public Sector    Dean Dietrich DINNER AND NETWORKING 5:15 - 6:00 p.m.   PANEL DISCUSSION: ECONOMIC DEVELOPMENT ACTIVITIES IN THE PUBLIC SECTOR 6:00 - 7:15 p.m. Panel members will be available to answer questions regarding economic activities in the public sector for local government officials.   We look forward to seeing you.   printable invitation Holiday Inn & Suites 1000 Imperial Dr Rothschild, WI