Welcome To Our New Website!

screenshot-of-new-WBB-Law-homepageWelcome to the new online home of Weiss Berzowski LLP.

Major sections of our new website include:

Practice Areas:

Our Firm and Our People:

News:

  • Announcements – Developments and happenings at the firm
  • Blog – Our attorneys write blog articles on relevant legal topics that apply to your business. Like everything else, the law is changing at an increasing rate. It is our job to stay up to date with these changes, to keep your business informed and up-to-date. We analyze all of the legal details, and inform you of what you need to know on the important legal issues of the day.
  • Publications – Where Weiss Berzowski LLP has been featured in outside published venues. Here you’ll find insightful content explaining new laws, legislation and perspectives (trends) having potential impact upon your business operations. We sift through the legalese and distill it down to understandable and actionable recommendations.
  • The WBB Reporter – Our e-newsletter featuring commentary and perspectives by our attorneys, and news from WBB. Sign-up for our E-Newsletter Mailing List here.

In addition, our new payments page allows you to pay your invoices online, or make an advanced fee payment, with your major credit card.

We appreciate your visit to the new Weiss Berzowski LLP website. Your comments and your feedback are appreciated using our improved Contact Us form.

Plan Before You Think You Need To

image of signing a documentBy Michael M. Berzowski. On August 24, 2014 while doing some yard work, I lost my footing, fell and managed to break both bones in my lower right leg along with some cartilage and tendon damage plus some bone chips in the heel area. As a result of this experience, I thought it might be a good idea for you to do some planning in the event that you experience a similar mobility robbing event.

Probably most important to stay in your communications loop is insuring that you can access your work computer systems at home. Included in this is checking to see if they are all accessible. I know that on occasion some may not be accessible, for example possibly Word docs. Test your system. Continue reading

Wisconsin Supreme Court Rules that Unpaid Health Care Interns are Not Entitled to Whistleblower Protection

whistleblowerBy: Thomas L. Skalmoski  Wisconsin’s Health Care Worker Protection Act, Wis. Stat. § 146.997, prohibits certain health care employers from taking disciplinary action against any person who in good faith reports violations of state law, federal law or certain clinical or ethical standards.  Although the Act prohibits disciplinary action against “any person,” there are other provisions in the Act that suggest that only “employees” are protected. In Masri v. State of Wisconsin Labor and Industry Review Commission and Medical College of Wisconsin, Inc., decided on July 22, 2014, the Supreme Court of Wisconsin decided that health care workers who are unpaid interns are not entitled to the protections of the Act. Despite recognizing the “importance of internships and the often mutually beneficiary relationship between interns and their supervising entity,” the court held that the Act only applies to “employees” and that unpaid interns are not “employees” entitled to whistleblower protection.

Asma Masri was a doctoral student at UWM and an unpaid “Psychologist Intern” at the Medical College of Wisconsin.  Masri reported “clinical/ethical” concerns to an administrator.  About five days later, the Medical College ended Masri’s internship.  Masri filed a complaint with the Department of Workforce Development alleging that she was protected by the Act and had suffered disciplinary action of the type prohibited by the Act. Continue reading

Wisconsin Supreme Court Given Opportunity to Demystify Issue of Valid Consideration for Non-Compete Agreements

By:  Neal S. Krokosky and Andrew T. Frost

The Wisconsin Court of Appeals recently issued a certification to the Wisconsin Supreme Court in Runzheimer International, Ltd. v. Friedlen, asking the Supreme Court to decide whether continued employment is sufficient consideration to support a non-compete agreement entered into by an existing at-will employee.

In 1994, the Court of Appeals determined in NBZ, Inc. v. Pilarski, that a covenant not to compete must be supported by consideration. NBZ, Inc. argued that continued employment was adequate consideration for a non-compete agreement when the employee is an at-will employee. The Court of Appeals did not address this argument because it was determined that the employee’s employment was not conditioned on signing the non-compete agreement. In 2009, the Supreme Court cited NBZ, Inc. v. Pilarski in Star Direct, Inc. v. Del Pra for the proposition that “employers may not compel their existing employees to sign restrictive covenants without additional consideration.” However, the court did not specifically rule that continued employment is inadequate consideration because the case did not concern a non-compete agreement entered into by an existing at-will employee. Continue reading

Analyzing Successor Employer Labor Obligations in Asset Purchase Transactions

Post By: Andrew T. Frost

Buyers often purchase the assets of a business rather than purchase the stock of the business in order to avoid the seller’s liabilities. Some buyers believe this shields them from any obligation to recognize the union that represented the seller’s employees. This is not necessarily the case, and such buyers may be unwittingly acquiring unwanted labor obligations, including union recognition and collective bargaining. Potential buyers should carefully analyze the facts and circumstances of an asset purchase transaction to determine if the deal will trigger labor obligations for the buyer. The following are scenarios that will cause a buyer to acquire labor obligations as part of an asset purchase transaction. Continue reading

New Trust Law in Wisconsin

Post By: Jackie Messler

Last December, Governor Walker signed 2013 Wisconsin Act 92, the Wisconsin Trust Code (WTC), into law.  The WTC completely replaces Chapter 701 of the Wisconsin Statutes.  The law was a product of a study group consisting of members of the State Bar Real Property, Probate, and Trust Section, the Wisconsin Bankers’ Association Trust Section, and the State Bar Elder Law Section.  Randy S. Nelson, a partner in Weiss Berzowski Brady’s Estate Planning practice group, was a member of the study group throughout the duration of the project. Continue reading

The New Net Investment Income Tax – Something To Consider Before Year End

Post by Steven M. Szymanski

As the nation moved towards the fiscal cliff last year, not much attention was given by the media to the implementation of many of the new Obamacare taxes which became effective for taxable years beginning after December 31, 2012. However, some filers may be surprised to find these new taxes once they prepare their 2013 federal income tax returns. One of the new Obamacare taxes is the net investment income tax. The net investment income tax was enacted as part of the Health Care and Education Reconciliation Act of 2010. It laid in the weeds until January 1, 2013 when it became effective.

The net investment income tax is a 3.8 percent tax on the net investment income of individuals, estates and trusts with income above certain statutory threshold amounts. For individuals, the net investment income tax is imposed on the lesser of: (1) an individual taxpayer’s “net investment income” for the tax year, or (2) the excess, if any, of (a) the individual taxpayer’s modified adjusted gross income for tax year over (b) the statutory threshold amount applicable to the taxpayer. For a married taxpayer filing a joint return, the statutory threshold amount is $250,000. For a married taxpayer filing a separate return, the statutory threshold amount is $125,000. For any other instance, the statutory threshold amount is $200,000. Continue reading

A Cautionary Tale for Employers in Age-Sensitive Terminations

Post by Anna M. Pepelnjak

On October 10, 2013, the 7th Circuit Court of Appeals reversed a lower court’s grant of summary judgment in an instructive age discrimination case. In Mullin v. Temco Machinery, Inc., —7th Cir. — , No. 13-1338 (10/10/13), the appellate court issued a decision which includes several lessons for employers making age-sensitive terminations.

The case involved the discharge of a 56-year old fire truck salesman. Mullin did not have “smoking gun” evidence that age motivated his termination, but he was able to point to several company actions that left the Court of Appeals “puzzled”. Continue reading

The Role of Guarantees in Commercial Real Estate Leases

Post by Ann K. Chandler

Landlords often request the principal owners of the business entity personally guaranty the obligations of the tenant under the lease. However, before agreeing to sign a lease guaranty, guarantor should examine the specific reasons why the guaranty is being required in connection with the lease and whether the landlord’s concerns could be satisfied by providing alternative security. If the request for the guaranty is determined to be reasonable, the guarantor should investigate whether the amount and/or term of the guaranty can be reduced. Continue reading

Political Discussions in the Workplace

Post by Anna M. Pepelnjak

Once again, elections are fast approaching. Political discussions in the workplace are bound to occur. Divisive issues are at stake. The sides are profoundly separated and the “middle ground” looks to be disappearing.

So, what happens when folks having politically opposite views come to work? The disputes that are taking place in the media, on talk shows and on the internet have no place in the employment setting. Why? Because in this environment, even “water cooler” discussions can get out of hand.

Private employers are free to limit political dialogue during the workday because employees in private industry do not have “free speech” rights, as public employees do. Therefore, private sector employers are encouraged to adopt policies addressing political discourse. In addition, private employers should examine and modify existing policies, such as e-mail and internet use policies, to guard against unauthorized use for political purposes. Courts have even upheld private sector prohibitions against employees wearing campaign buttons to work.

However, even private sector employers lack unfettered authority to regulate workplace conversations. The NLRB has said that discussions relating to union activity are protected, whether or not the workplace is unionized. For example, a discussion regarding the Affordable Care Act might be protected, even if the participants become heated during the conversation.

In addition, private sector employers should avoid dictating to employees how to vote. Rather, employers should adopt policies that encourage employees to exercise their best judgment to vote for the candidate of their choice, while maintaining respect for one another’s differing views in the workplace.

Estate Tax Portability – Finally a “Permanent” Estate Planning Tool

Post by Nancy M. Bonniwell

There has been much discussion of estate tax portability since the beginning of 2013, and there is good reason. “Estate Tax Portability” is a surviving spouse’s ability to use a predeceased spouse’s unused estate and gift tax exclusion. During our lifetime and on death each of us currently has a $5.25 Million gift and estate tax exclusion. Simply said, we can gift during life and/or leave at death up to $5.25 Million of assets without having to pay any gift or estate tax. Before Congress passed the law allowing portability, if married couples wanted to take advantage of both spouse’s exclusion, they would normally establish a trust to hold the deceased spouse’s assets and allocate the estate tax exclusion to that trust. The new law is intended to make estate planning simpler.

One important rule to keep in mind is that a surviving spouse may only use the unused exclusion of the last spouse to die. The one exception is if the surviving spouse uses that exclusion before her second spouse dies. Thus, if a surviving spouse elected to take $4 Million of her first deceased husband’s unused exclusion, then remarried and her second spouse died with only $1 Million of unused exclusion, she would lose the $4 Million of exclusion from her first husband and only be able to elect the second husband’s $1 Million of unused estate tax exclusion, unless she made large gifts to use that $4 Milllion exclusion during her lifetime and before her second husband died. Continue reading

Is Lowering the Judgment Interest Rate a Help or Hindrance for Collection?

Judgments entered after December 2, 2011, accrue interest at a much lower rate. Now judgments accrue interest at the rate of 1% plus prime. From now on, if the judgment is entered on or before June 30 of any given year, you use the prime rate as of January 1 of that year. If the judgment is entered on or after July 1, you use the prime rate as of July 1. Even though the prime rate may fluctuate over time, the rate of post-judgment interest is fixed and does not change until the judgment is paid. The prime rate is presently 3.25% (and has been since 2008). So that means all judgments entered after December 2, 2011 accrue interest at 4.25% and that rate is locked in. That is also the rate that will apply to new judgments until the prime rate changes. Obviously 4.25% is not as good as 12% if you are a judgment-creditor, but it may more fairly represent the time-value of money right now.

Court Rejects Mutual Mistake In Failure To Disclose Case

Post by Barry R. White

I regularly represent home sellers in lawsuits brought by buyers claiming the seller failed to disclose a defect in the home. A recent Court of Appeals case in this area caught my attention. In most failure-to-disclose cases, the buyer must prove the seller was actually aware of the defect. In the recent case, the buyer claimed that the home had a defect in its ventilation system. However, the buyer claimed that neither the seller nor the buyer was aware of the defect and, therefore, the buyer tried to invoke the doctrine of “mutual mistake” (which says that if both parties to a contract are mistaken as to a material fact, the court can rescind the contract).

If this argument had succeeded, it would have given buyers a powerful weapon in claims against sellers: Either the seller knew about the defect and failed to disclose it, or the seller did not know about the defect and the contract has to be rescinded. However, the Court of Appeals did not buy the buyer’s argument. The Court of Appeals said the buyers failed to show that a defect free house was material to the transaction, since the sales documents merely said the seller was not aware of any defects. Thus, for now, based on standard offer to purchase documents and real estate condition reports, buyers still need to show the seller actually knew about the defect. You can read the case here.

Is it time for a legal checkup for your business?

Post by Chris J. Trebatoski

I was driving through Chicago listening to CBS radio to get traffic reports when I heard a study of the use of legal services during and subsequent to the Great Recession. Boring, turn off the radio is probably your immediate thought. I thought so too but then the statistics were presented. The study found that most, if not all, small to medium size businesses avoided contact with any lawyer during the past several years as a part of their costs savings efforts.

I had had a gut feeling for the past few years that was consistent with the study. In the twenty nine years that I have practiced law, the past few years have been fundamentally different in terms of the use of legal services by all businesses, large and small. My personal observation has been that fewer businesses were pursuing dispute resolution as a part of their business problem solving, settling cases that in other times would have been tried and trying cases that in other times would be settled. Part of the blame for the decrease in use of legal services has certainly been the general trend in the legal industry to strictly adhere to the hourly fee and seeming inability to be more flexible in terms of client needs and fee arrangements in difficult times. Part of the blame for the decrease in use of legal services is also the belief that litigation is simply too expensive to pursue.

Unfortunately, the combination of economic factors, concerns about fee arrangements and costs of litigation resulting in avoiding legal services has an unintended and potentially dangerous impact upon businesses and entrepreneurs. Much like putting off going to see the doctor can result in a much more difficult treatment course, putting off talking with your lawyer allows small disputes to become large disputes. Reduces the advance protections and risk control strategies available from as part of a legal checkup often resulting in significantly more cost incurred by the client both in terms of legal fees and financial damage to his or her business.

Is it time for you or your business to have a legal checkup? As your business looks toward the future it is better to assess legal risks before lawsuits happen and resolve the nagging disputes before they become full blown legal battles. And if that checkup shows there is a problem that should be addressed, make sure to explore all potential forms of dispute resolution to see which one best fits you, your business and your future.

Business Sale Transactions: Representations & Warranties

Post by David J. Roettgers

Representations and warranties are contained in virtually all business sale transactions. Basically, representations and warranties are promises made by the seller to the buyer representing the condition of the Company and its assets and providing a warranty of that condition. These representations and warranties are critical to both parties because they create the basic understanding of the transaction. In the case of a seller, the seller is concerned that the buyer does not come back to seek some type of recovery (indemnification) for any of the statements in the representations and warranties. With respect to a buyer, a buyer reviews these representations and warranties, including the disclosures, in determining the value of the business.

In a business transaction, several representations and warranties are very standard. For example, the seller usually represent and warrant that they own the stock or the assets being sold and that the ownership interest is “free and clear” of any and all liens or encumbrances. Another standard representation and warranty would include a provision concerning authority to sell the stock/assets of the seller. These types of representations and warranties are not only basic but essential to completing a transaction.

On the other hand, certain representations and warranties (e.g., “compliance with all federal, state, and local laws”, “the seller has never violated any environmental law”, etc.,) are often times carefully negotiated. There are several ways of minimizing the risk in these representations and warranties including using a “knowledge” qualifier. Of course, that leads to other negotiations concerning the definition of “knowledge”. Does “knowledge” mean “actual” knowledge of the owners? Does “knowledge” mean that any employee of the Company, at any given time had or should have had knowledge? Obviously, these are vastly different definitions of knowledge and naturally affect a seller’s potential liability.

Representations and warranties, although important, must also be considered with the terms of the indemnifications provisions. An indemnification provision establishes the liability in the event of a breach of a representation or warranty. Depending on the representation or warranty, an indemnification provision can be limited by the time period for a buyer to make a claim (i.e. a claim must arise within one or two years of the date of sale), magnitude (i.e. a cap on the seller liability such as the selling price or some other dollar amount), baskets (damages must exceed a certain dollar amount before any recovery) and certain other limitations/provisions.

Finally, in reviewing the business transactions, representations and warranties and indemnification provisions must be used to balance the risk associated with the transaction. Depending on the business and concerns, this discussion/negotiation is critical in determining whether a transaction is a fair transaction for both the buyer and the seller.

S Corporation Business or Asset Sellers

Time to Again Monitor Approaching Built-in Gains Tax Changes

Post by John A. Sikora

As we noted in a June 2011 blog posting, gains on sales of property by an S corporation are generally subject to only a single level tax, at rates applicable to the corporation’s shareholders. If, however, the property was held by the corporation when it converted from C corporation to S corporation status (or was acquired by such a converted S corporation in a nontaxable transaction), part or all of the gain may also be subject to a second tax at the S corporation level. This corporate-level tax is commonly referred to as the built-in gains tax (or “BIG tax”).

The BIG tax generally applies to sales of property during the ten year period following conversion to S corporation status. From time to time over the last several years, the ten year period has been reduced for sales in certain tax years. For example, if the property was sold by the converted S corporation in 2009 or 2010, the BIG tax did not apply if the corporation had been an S corporation for at least seven years, and for sales in 2011, at least five years.

The so-called “fiscal cliff” legislation enacted in January 2013 extended the five year period to sales occurring in 2012 and 2013. However, the BIG tax period is schedule to return to ten years for sales in 2014 and thereafter.

Therefore, if a corporation’s S status began more than five and less than ten years ago, and it expects to sell or dispose of property at a gain in a taxable transaction in the coming years, it may want to consider selling it, or perhaps distributing it, this year. Doing so will result in tax at the shareholder level this year, but may eliminate a second, BIG tax that could apply if the taxable event is deferred to 2014 or later years. Such S corporations currently negotiating or under contract for the sale of the business or certain business assets may likewise want to make sure the transaction closes this year.

To Hire or Not to Hire – That is the Question

Post by Michael M. Berzowski

Although there is no federal law that directly prohibits employment discrimination based upon criminal records, the EEOC and some courts are of the view that discrimination based upon a criminal record can be a form of race discrimination and a violation of Title X of the Civil Rights Act of 1964 since some racial groups are convicted in numbers that are disproportionate to other groups and, therefore, the argument goes: barring people from employment based on their conviction records will have a disproportionate impact on people of color.

This is not an academic subject. According to the US Department of Justice, there are more than 64 million Americans who have a criminal record that might or might not have resulted in a conviction. The chances are greater than not that you will come across such an individual. The trick will be to adhere to various standards in considering hiring people with criminal records which should provide a balance in maintaining a level of safety at work and hiring competent and talented employees who might not otherwise have had employment opportunities.

A safe approach is to determine whether there is a reasonable and direct relationship between the crime and the job with a direct correlation not being a good match. Similarly, it would be a good idea to be on guard for all violent crimes, regardless of the circumstances since someone prone to assault and battery or reckless driving or negligence charges, for example, might not differentiate between work and non-work environments.

Finally, you should consider how much time has passed between the conviction and the date of the work application, as well as any rehabilitation that may have taken place and the applicant’s previous work history.

If you have a rule that automatically discards any applicant with a criminal record, now would be a good time to consider changing it.

The Key To Access

Post by Michael M. Berzowski

Notwithstanding increasing efforts for diversification, individuality and like approaches, the simple fact of the matter is that we are becoming more and more alike, particularly in reliance on computers, the internet, online transactions and on and on. Related to that is the proliferation of account numbers for credit cards, investment accounts, social and business memberships, health and other insurance as well as other purposes. In most instances there will be blocks to access, such as user names and passwords, key questions, the answers to which you may have forgotten and so on.

My strong recommendation is that you immediately take the time to list all of your accounts and user and passwords and other required information. Once you have compiled your list, you should make its location known to someone you trust. In the event of your unavailability or incapacitation (or worse yet, death), you will have performed an invaluable service that will allow your spouse or your appointed agents to do their job with a minimum amount of aggravation.

And, while you are in the process of arranging your affairs, you might consider opening your desk or kitchen drawer and identifying and labeling the keys that you have been accumulating so that people are not at a loss when trying to determine exactly what those keys are for. Maybe some of them should be tossed – why continue the mystery?

U.S. Supreme Court Clarifies Evidence Required in Federal Retaliation Cases

Post by Anna M. Pepelnjak

The U. S. Supreme Court recently issued an important decision regarding the proof required for employees who assert federal retaliation claims under Title VII. In University of Texas Southwestern Medical Center v. Nassar (decided June 24, 2013), the Court held that Title VII retaliation plaintiffs must prove that their protected activity was a “but-for” cause of the adverse employment action suffered by the employee (not just a “motivating factor”).

The Nassar case involved a teaching hospital that withdrew a contract offer from the plaintiff doctor. Dr. Nassar had accused one of his supervisors of religious and national origin discrimination and then accused another supervisor of retaliation after the offer was withdrawn. Nassar was largely successful at the trial court and appellate level, but the employer appealed the case to the U. S. Supreme Court. On a 5-4 split, the Court (Justice Kennedy) ruled that Title VII provides a different standard of proof for “status-based” discrimination claims than for retaliation claims. For status-based claims (race, color, religion, sex, or national origin) the plaintiff need only show that discrimination was a motivating factor in the employer’s decision, possibly one of many such factors. For retaliation claims, however, the Nassar decision requires successful employees to show that, were it not for an intent to get even or retaliate, the employer would not have taken the action. In other words, the plaintiff must prove that the employer had no other reason for its decision, save retaliation.

This decision brings the standard of proof for retaliation claims in line with age discrimination claims. In a 2009 case, Gross v. FBL Financial Services, Inc., 557 U.S. 167, 129 S. Ct. 2343 (2009), the Court had held that a plaintiff suing under the Age Discrimination in Employment Act must prove that age was the “but-for” cause of the adverse employment action. According to the Nassar court, the language of the retaliation statute mandated the same result. Both of these decisions are a boon to employers, since proof of another motivation will doom the employee’s case.  Relying on these cases, employers may be able to obtain quick, favorable decisions dismissing claims at the summary judgment stage.

Supreme Court Issues Decision Favorable To Employers In Harassment Cases

Post by Thomas L. Skalmoski

In the recently decided case of Vance v. Ball State University, the Supreme Court of the United States clarified the standard for an employer’s liability for harassment by a co-worker and made it more difficult for employees to prove hostile work environment claims by adopting a narrow definition of a “supervisor.”

Vance, an African-American woman, worked for Ball State University. She complained that she had been subjected to a racially hostile work environment because of a co-worker’s offensive conduct that included the use of racial epithets, racial taunts and veiled threats of physical harm. Although the co-worker had the authority to direct some of Vance’s daily work assignments, the co-worker did not have the power to hire, fire, demote, transfer or discipline Vance.

The question before the Supreme Court was whether Ball State was liable for the co-worker’s harassment under Title VII. The standard for determining an employer’s liability for a co-worker’s harassment depends on the status of the co-worker and, specifically, whether the co-worker is a supervisor. Harassment by co-workers differs from harassment by supervisors. It is generally easier for an employee to prove that the employer is liable for a co-worker’s harassment if the harassing co-worker is a supervisor because the employee does not have the burden of showing that the employer was at fault. When the harasser is a co-worker, the employee must prove that the employer was negligent in permitting the harassment. This often requires the employee to prove that the employer had knowledge of the co-worker’s harassment. In the case of harassment by a relatively low-level employee, that proof can be difficult.

Because an employer’s liability depends ultimately on whether the harasser is a supervisor or a mere co-worker, the Supreme Court in Vance had to decide what it means to be a supervisor and, specifically, what degree of authority an employee must have in order to be classified as a supervisor. The Court rejected a broad, pro-employee standard that a supervisor is any co-worker who has the ability to exercise significant discretion over another employee’s daily work, such as making work assignments or leading or directing tasks. Instead, the Court adopted a narrow, pro-employer standard. It held that in order for a co-worker to be a supervisor for purposes of hostile work environment claims, the co-worker must be “empowered by the employer to take tangible employment actions against the victim” including the power to hire, fire, demote, promote, transfer or discipline the employee. Because Vance’s harassing co-worker did not have this power, the co-worker was not Vance’s supervisor and Ball State was not automatically liable for the co-worker’s harassment.

By narrowly defining what it means to be a supervisor in Title VII harassment cases, the Court has protected employers from being liable for the harassing conduct of relatively low-level employees unless the employer has been negligent by not taking reasonable steps to discover and correct workplace harassment.

Disclaimer

The comments and opinions expressed in this blog are intended for informational purposes only and do not constitute legal advice. Reading or using the information in this blog does not create the existence of an attorney-client privilege. Due to the changing nature of the law, the blog posts may contain dated material. For an update on the current law and the application of the law to your particular facts and circumstances, consult a legal advisor. The information contained herein is not a substitute for obtaining legal advice from a qualified attorney licensed in your state.