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Campolo, Middleton & McCormick, LLP, is a full-service business law firm that represents clients in a wide variety of legal matters including litigation and appeals; corporate and technology; real estate development and zoning; wills, trusts and estates; labor and employment; personal injury matters including the defense of general liability, construction, premises liability and transportation cases.
3340 Veterans Highway Suite 400
Bohemia, NY 11716
p 631-738-9100
f 631-738-0659
Disclaimer
The information contained in this newsletter is provided for informational purposes only, and should not be construed as legal advice on any subject matter. The Firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship. No recipients of information from this newsletter, clients or otherwise, should act or refrain from acting on the basis of any information included in this newsletter without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this newsletter contains general information and may not reflect current legal developments. The Firm disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this newsletter.
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Client Advisory
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Department of Labor Inspection Preparation
for Employers
by Arthur Yermash, Esq.
Most employers know that the U.S. Department of Labor (DOL) oversees compliance with the Fair Labor Standards Act (FLSA) and other statutes that protect workers. What many employers may not be aware of, however, is that the  DOL has the authority to conduct inspections of workplaces and bring enforcement actions against employers found to be in violation of the FLSA and related statutes governing wage payments. Employers may be investigated, inspected, audited, or visited by the DOL Wage and Hour Division ("WHD") without explanation. Most often, complaints prompt DOL visits, though the existence of a complaint is not always disclosed to the employer. It is critical for employers to prepare for and understand their rights during inspections, investigations and audits. The following highlights some key points to prepare you and your team for a U.S. Department of Labor investigation.
1. Pre-inspection preparation. Before a government investigation begins, there are preventive measures that employers should take.
a) Check current and past 1099s going back several years to review job duties to ensure proper classification of independent contractors vs. employees.
b) Review timekeeping systems to ensure that non-exempt employees are being paid for all work performed (including overtime).
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Landlord/Tenant Update
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Derivative Claims in Landlord/Tenant Court
by Patrick McCormick, Esq.
In a case of apparent first impression in New York, in Gorbrook Associates Inc., and Norman Fishman, derivatively on behalf of Gorbrook Associates, Inc., v. Ilene Silverstein, John Doe and Jane Doe1, Judge Scott  Fairgrieve held that the summary holdover proceeding was properly instituted derivatively by a shareholder on behalf of the corporation. The petition alleged that petitioner Norman Fishman was an officer and owned 25 shares of Gorbrook and that Fishman and Allen Silverstein were the only directors of Gorbrook. As set forth in the decision, the petition further alleged that Ilene Silverstein was the daughter of Allen Silverstein and sister of Eric Silverstein and that Allen Silverstein and/or Eric Silverstein "arranged for Ilene Silverstein and her husband to move into the premises without a lease or contractual or statutory grant, authority or other basis." Further still, the petition alleged that Fishman had demanded that Allen Silverstein cooperate or not interfere with Gorbrook's efforts to secure use and occupancy payments from Ilene or to remove Ilene and her husband from possession of the premises; that Allen Silverstein was aware that Fishman wanted to collect such payments or to obtain possession of the premises; that Allen Silverstein refused to cooperate with Gorbrook's efforts and that Allen Silverstein opposed the relief sought in the petition so that "it would have been futile for N. Fishman to attempt to secure the approval of A. Silverstein to seek such relief assuming arguendo that such approval was necessary." A thirty day notice to quit was served and upon the refusal to vacate the premises the holdover proceeding was commenced. Respondents moved to dismiss under CPLR 3211(A)(7) alleging that Norman Fishman did not have authority to bring the proceeding and that a shareholder could not maintain a summary proceeding derivatively.
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Intellectual Property Update
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Obama Plans to Take Action Against Patent Trolls
by Eryn Y. Truong, Esq.
President Obama announced earlier this month a set of executive actions directed at cracking down on patent-holding firms that interfere with competition and abuse the patent system. The Wall Street Journal reports that these  "patent trolls" are forcing technology companies, financial institutions and others into costly lawsuits to protect their products by collecting large numbers of patents and then pursuing licensing fees while not actually producing any products themselves. Many technology companies have dealt with multiple lawsuits from so-called "patent trolls," which aim to make money primarily through licensing fees. These firms, also known as non-practicing entities (NPE) or patent assertion entities (PAE), say they are doing nothing wrong, just using patents that were legally granted by the U.S. Patent and Trademark Office. They say they promote a fair market by protecting smaller inventors. Obama has constructed a five-step plan with a total of seven legislative changes, which will be released as part of a White House report on patent trolls. The plan includes a recommendation that the U.S. Patent and Trademark Office create rules that require patent owners to be identified and a request for Congress to pass legislation that puts sanctions on questionable lawsuits filed by patent-holding firms. Additionally, Obama hopes to cut down on the International Trade Commission's involvement in patent disputes. Claims filed with the ITC are often resolved more quickly than standard federal lawsuits. The Obama administration would like Congress to change certain ITC legal standards and ensure that the agency has flexibility in hiring its judges. To read more click here >>
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SCOTUS Update
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Supreme Court Focuses on Arbitrations
and Class Actions
by Lauren Kanter, Esq.
According to Justice Elena Kagan, the Supreme Court's recent decision confirming a corporation's ability to require arbitration in the event of a dispute is "Too darn bad."  The June 20, 2013 decision in American Express Co. v. Italian Colors Restaurant (No. 12-133) considered the situation of an Oakland, California restaurant which, along with other merchants, had commenced a class action lawsuit against American Express for violations of the Sherman and Clayton federal antitrust acts. According to Italian Colors and its fellow merchants, American Express used its monopoly power in the credit card market to force merchants to accept credit cards at rates 30% higher than the fees for competing cards. The credit card agreements between American Express and each of its merchants require that all disputes be resolved by arbitration, and provide that there "shall be no right or authority for any Claims to be arbitrated on a class action basis." Citing these agreements, American Express moved to dismiss the class action and to compel individual arbitration with each merchant under the Federal Arbitration Act. In opposition to the motion, the merchants submitted an affidavit from an economist who estimated that the expert analysis required to prove the merchants' antitrust claims could cost "at least several hundred thousand dollars, and might exceed $1 million," while each plaintiff's maximum recovery would be $38,549. Even so, the District Court granted the motion, but the Court of Appeals reversed, finding that the merchants "would incur prohibitive costs if compelled to arbitrate under the class action waiver." If all of the merchants could share the costs in a class action, pursuing these claims would be much more feasible.
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Wills, Trusts & Estates Update
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College Kids Are Adults
by Martin Glass, Esq.
The summer before my oldest went off to college, we all went for an orientation weekend. While there, he went off and did his thing and my wife and I went off and did ours. In one of our parent orientation seminars we were  reminded that, now that he is 18, he is officially an "adult" in the eyes of the law. We, as parents, would no longer have the automatic legal right to make his healthcare decisions, have access to his healthcare records in an emergency, or be included in any of his financial decisions. Who was paying their enormous bill was irrelevant. His life became private and confidential. Amid the hustle and bustle of getting your kids off to college, it is easy to forget that you need to make sure they have signed a healthcare proxy and a HIPAA authorization form. (HIPAA is the federal law which prohibits physicians and hospitals from disclosing confidential medical records to anyone other than the patient, unless the patient has expressly authorized another person to have access to his records.) The consequences of forgetting these simple forms can be tragic. If something should happen to your child while at college (such as an injury or illness), you do not want to be told by some doctor or hospital employee in a far-off state that they cannot even talk with you about your child's medical status. This is especially true when the potential harm is so easily prevented. With a healthcare proxy, your child signs a document appointing you as their healthcare agent, who will be authorized to make healthcare decisions for them if they ever become unable to make their own decisions. In addition, your child can leave a living will, in which they can specify what kind of end-of-life medical treatments they want (or do not want). To read more click here >>
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Repp Appointed to Board of SCWBA
We congratulate Alyson Repp on being  appointed to the Board of Directors of the Suffolk County Women's Bar Association. She was sworn in on June 13th at the Installation Dinner held at the Old Field Club.
To learn more click here >>
Morgan Appointed to East End Women's Network We also congratulate Hayley Morgan on being appointed Secretary of the East End Women's Network. The mission  of the organization is to bring together women of diverse accomplishment and experience, directing women into policy-making positions through the dissemination and sharing of career opportunities; to educate members and the public on issues affecting women on the East End; and to promote the interests, conditions and positions of women in science, business, industry, labor, government, the arts, education and public service. To learn more click here >>
Campolo Spoke at Three Events in June
Joe Campolo spoke at the Nonprofit Update Seminar sponsored by Cerini & Associates on June 27th  from 8:00 am to 1:00 pm at the Smithtown Sheraton. The seminar was free to attend and CPE credits were given. Topics discussed included a legal and accounting update, new pension disclosure rules, executive compensation issues and more. Joe Campolo spoke at the event addressing legal issues facing not-for-profit organizations.
Joe Campolo moderated a panel at the HIA-LI Small Business Summit on June 27th at 8 am. The topic  was "Building a Business to Sell," including the principles and business practices that will help you build a valuable, profitable and sellable business from day one. Whether you're planning an exit strategy or if you have no future intentions of cashing out, the most successful businesses are those that are built to be attractive to potential buyers. Our panel of professionals discussed how to maximize the value of your business for future acquisition while increasing current profits and cash flow.
To learn more click here >>
Joe Campolo presented a seminar entitled "Avoiding Fines  and Fees -- 2013 Employment Law Updates" on June 13th, 2013. The legal update covered the new laws, rules and regulations affecting business owners. Topics included proper termination practices, classification of employees vs. independent contractors and potential workplace discrimination claims. The event was sponsored by Maher & Associates and the Park Shore School.
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