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Buy – Sell Agreements: Be Sure to Say What You Mean; Keep Good Records

Posted by dempseylawfirm on July 26, 2010

Recently, the Wisconsin Supreme Court issued an opinion in Ehlinger v. Hauser, 2010 WI 54 (June 25, 2010). This case provides us with important reminders of (1) why it is essential in a contract to say what you mean and mean what you say and (2) why it is necessary to ensure that you have adequate financial records to support your company’s financial statements.

The Facts
 
Briefly, the facts in Ehlinger were as follows: Two equal shareholders in a corporation signed a buy-sell agreement, which is a typical way to provide a means of business succession in the event certain agreed upon events come to pass. Here, the agreement provided that if one shareholder became completely disabled, the other shareholder could buy out the disabled shareholder. So far, so good.
However, also typical in these types of agreements, the parties provided a means to arrive at a buyout price. This is, generally, a good thing. Unfortunately, this particular agreement provided that the non-disabled shareholder was entitled to purchase the disabled shareholder’s shares at “book value.” Nothing more was stated regarding this term.

One shareholder did become disabled, and the non-disabled shareholder presented an offer to buy the disabled shareholder’s shares. What was the dispute about? You guessed it – each shareholder calculated “book value” in a different way. Each shareholder wished to include different assets and liabilities in the calculation and calculated the value of the assets and liabilities in a different way.

By simply stating that “book value” was to be used, the parties left open the interpretation of that term. It could mean anything from simple adoption of the company’s internally generated balance sheet, i.e., book value being the assets less the liabilities as stated, or a balance sheet generated after a full-blown audit by an outside CPA firm.

Before the trial court, a special magistrate with a CPA background was appointed in an attempt to determine if GAAP (Generally Accepted Accounting Principles) was correctly applied and if the company’s books and records were sufficient to allow a determination of book value. The special magistrate found that, due to poor record-keeping, 76% of the company’s assets and 90% of the company’s liabilities could not be verified through available supporting documentation.

The Supreme Court’s Holding in the Case
 
A divided Supreme Court determined that the agreement was unenforceable. As the majority opinion characterized it, the question was not “what is required under GAAP, but what is required to determine the parties’ rights.” The Court stated:
“Here, regardless of whether the parties intended assets and liabilities to be computed on a cost basis, a tax basis, a fair market value basis, or any other basis, the unavailability of [the company's] financial records prevents Ehlinger from exercising his right to examine the books in order to assess the accuracy of the buyout price. From both a practical and a legal standpoint, the unavailability of the records precludes this agreement from being enforced.”

Additionally, the Supreme Court reviewed the issue of the non-disabled shareholder using the company’s money to defend himself in the seven year old lawsuit. The non-disabled shareholder, who was running the business day-to-day, asserted that he had a right to be indemnified by the company for the legal expenses he incurred. The disabled shareholder objected.

The Supreme Court determined that the dispute was primarily between the two shareholders. It would have been proper for the company to indemnify the non-disabled shareholder for actions he took solely in his capacity as a corporate officer or if the company spent funds in its own legal defense. Neither circumstance was present here. Moreover, if the non-disabled shareholder did contend that he was acting as a corporate officer and wished to use the indemnity for corporate officers provided by the Wisconsin Business Corporation Law, he needed to follow the notice procedure outlined in the statutes. He failed to do so here.

What We Can Learn from this Case
 

Buy – Sell Agreements still have great value and should be used appropriately;
 

Use a means, method or formula to establish the buyout price that is precise and not subject to interpretation;
define it in detail; and/or
agree to appoint a neutral 3rd party to determine;

Maintain adequate financial and business records and retain for a sufficient period of time;
Review the Buy – Sell Agreement periodically to make sure the means, method or formula for the buyout is still relevant and ascertainable;
Provide in the Buy – Sell Agreement for payment of legal expenses in the event of a dispute, e.g., each party to pay one half or “loser” pays all, or provide for a mediation or arbitration mechanism in the event of a failure to agree and allocate the expense in that mechanism;

As a shareholder, be aware of when you act on your own behalf, and when you act on behalf of the company.

Based on the results of this case, even recently drafted Buy – Sell Agreements should be reviewed to determine if they adequately and precisely identify the means, method or formula for the buyout. Additionally, periodic review of your company’s financial statements is in order to ensure that the necessary supporting documentation and detail is available and can be used in the event a Buy – Sell Agreement is triggered.

For more information about our firm, please go to www.dempseylaw.com.

 

Posted in Business Lawyer, Trial Lawyer | Tagged: , , , , , , , , , , , , , , | 4 Comments »

Search Committee Selection Process

Posted by dempseylawfirm on May 13, 2010

Recent events in the news again have demonstrated the pitfalls of failing to develop or adhere to a disciplined process regarding the recruitment, selection, and offer of employment to a professional or other high level employee. Whether you operate in a for profit or not for profit organization, there are certain fundamental guidelines that should be observed in order to not only engender confidence in the process and the decision that is made but also avoid potential legal claims and other adverse consequences.

The purpose of this memo is to outline these guidelines. It is neither intended to be nor can it replace detailed policies or guidelines that your organization should have in place. It is designed to be a checklist and reference to use against your own guidelines or process. Like so many things in the legal world, the process you follow is as important as the decision you make. If you find yourself on a search committee, these are things you should keep in mind:

Before You Start 

1. Search Committee. A committee process offers the best vehicle for a representative and robust decision process. Size of the committee is discretionary, but should not be less than three and should draw from a group with sufficient collective background and experience to provide the requisite depth and breadth of expertise and good judgment.

(a) Members’ Role. Each member should understand his or her role and mission, the concept of equal employment opportunity, and advise of any special interest or conflict in the selection process at the outset.

(b) Members’ Understanding. Each member must know the job description, the selection criteria, and the objectives of the process.

(c) Members’ Duties. Each member must be willing to be available for meetings and interviews, follow the guidelines established, and exercise independent judgment.

2. Relevant Polices and Guidelines. The organization’s search and hiring policies or guidelines should be reviewed thoroughly, understood, and followed.

3. Confidentiality. Application materials and resumes are provided to committee members for the express purpose of assisting in the evaluation and selection process. Each committee member must understand that any act that compromises confidentiality also compromises the integrity of the committee and selection process. This needs to be a continuing point of emphasis with committee members.

4. Assessment and Capabilities Matrix. Prior to the formation of the committee, the organization should have performed an assessment or prepared a capabilities matrix that reflects the current strengths and weaknesses of the position targeted and sharpens the focus on the strengths and capabilities of the type of candidate sought. This provides a good “landscape” picture or overview for the committee as context for the search.

5. Position Description and Requirements. These requirements are pre-established by analysis and a position description. They should be considered as the minimum necessary to perform the essential functions of the job.

6. Timeline. A timeline should be developed at the outset of the process. Often, it is useful to work backward from the target start date contemplated. It is important to set aside sufficient time to perform a complete and effective search. Build extra time into the process to allow for false starts, scheduling conflicts, and the possibility of having to move on to a second or third choice.

The Selection Process 

1. Personal Approach. The law requires fair consideration of all applicants. The law does not prohibit, and you can certainly use, a personal approach to recruiting candidates. Sometimes, outstanding candidates are initially reluctant to apply for advertised positions and can be approached by a search committee if identified. Of course, all equal employment opportunity and affirmative action requirements must be met.

2. Screening and Selection Criteria. The ultimate goal is to hire the “best” candidate. However, establishing who is the best candidate is more challenging. It is important to establish the criteria and rank each prior to the beginning of the process. Once established, you should generally adhere to the criteria and ranking. You can make changes if deemed necessary during the process, but it is legally important that the selection criteria and methods of assessment are applied consistently to all candidates.

3. Interviews. Committee members should be provided with interview guidelines and a list of approved questions. Committee members should receive some minimal training or guidance in how to conduct appropriate interviews and counseled about areas to be avoided. Of course, committee members can or may go “off script,” and that should be encouraged so long as each committee member understands the interview guidelines and adheres to them.

The Recommendation and Confirmation  

1. Meet and Recommend. Once all of the final round interviews are concluded, all of the committee members should meet and discuss. There is nothing in the law that requires a committee to unanimously select a candidate. Sometimes, a majority is sufficient. Often, unanimity is preferred. If there is strong dissenting opinion, and members request that it be recorded “on the record,” the committee’s minutes should contain a brief statement of the discussion and the reasons for the majority’s and minority’s positions. Such information, prior to being finalized, should be reviewed by legal counsel, so that the minutes accurately reflect the process and the outcome.

2. Confirm Required Documents. The committee or Human Resources should confirm that any academic records or transcripts, diplomas, professional registrations or licenses required have been received, reviewed and authenticated for the leading candidates. Confirm that the I-9 form (with copies of verifying documents) has been or will be made available. Reference checks, criminal history checks, motor vehicle records checks, and credit checks (as necessary or required) should be complete and verified.

3. Confirm (and Confirm Again) the Decision Prior to any Offer. Once the selection is made, the entire process should be reviewed for consistency and quality. If there were any errors or doubts, now is the time to raise and resolve them while the process is still internal. Once an offer is made, the committee loses any possibility for a graceful “do over,” and may face legal action by an aggrieved candidate. If the CEO or other senior executives are not directly involved in the selection process, they should be apprised as the process moves forward and provided with relevant information available to committee members if necessary prior to any offer being made. Avoid the trap of moving forward only to be told too late that a key decision maker believes the process to be flawed or the selection decision was incorrect. Being forced to withdraw an offer or backtrack in the process is, at minimum, inefficient and may very well call into question the competence, objectivity, or motives of the organization if the action becomes public.

Post Offer and Acceptance 

1. Document the Selection Process. From a legal perspective, it is important to assemble accurate and complete records of the selection process. It provides the legal basis for the decision, and it can also serve as a model for future selection processes since the committee may be entirely reconstituted the next time a selection needs to be made. Legally, employment records (including applications) must be maintained for up to three years, i.e., one year for the CRA and ADA, and three years for ADEA, FLSA, and FMLA. Your organization’s record retention program may require longer periods.

2. Welcome and Orientation. Just as you have engaged in a process for recruitment and selection, your organization should also have a standard process to welcome the new employee and provide an orientation commensurate with the organization level for which the candidate was hired. You have invested time and effort in the selection process, and it is also necessary to make special efforts to welcome and introduce the selected candidate into the organization and the community.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Business Lawyer, Employment Lawyer, Trial Lawyer | Tagged: , , , , , , , | 2 Comments »

Personal Injury Checklist

Posted by dempseylawfirm on April 13, 2010

Dempsey Law attorneys have significant experience in successfully pursuing personal injury actions for clients.  If you have been injured in an accident, we would be happy to see you in our offices or elsewhere at your convenience to discuss the details.  You may have a possible claim and may be able to recover damages for your injury and any economic loss.

Before an attorney from our office meets with you, there is some basic information that will need to be collected and available for the first interview.  Depending on the circumstances and the nature of your case, some of the information required may be different.  Also, the attorney conducting the interview may request additional information from you.  The following is intended to be a helpful checklist.

General Information

  • Your name and address and the names and addresses of others involved in the accident
  • A copy of your accident report (if one exists or is available)
  • A copy of any written statement that you might have made or others might have made about the accident 

Information about the Accident

  • The date and time of the accident that caused the injury
  • The details of the accident, e.g., make and model of autos involved, road conditions, other known facts
  • The names and addresses of any witnesses and a description of what they observed
  • The name and address of the ambulance company if you were transported to a hospital
  • The name of the hospital/emergency room that you were transported to
  • The names and addresses of any medical providers that treated you for your injury at the time it occurred and those who are treating you now, if different
  • The dates and times that medical services were provided to you
  • Any traffic tickets related to the accident
  • Any photographs that you have of any personal injuries or property damage caused by the accident or regarding the scene of the accident

 Information about Your Employer

  • Your employer’s name and address and contact information
  • Dates you were unable to work due to your injury
  • Documentation regarding any lost wages or benefits
  • A copy of any explanation of your disability benefits or insurance benefits, if provided by your employer

 Information about Your Insurance

 Name and contact information regarding your insurance company, insurance agent, or any other insurance person you have spoken with

  • The actual insurance policy, e.g., auto policy, homeowners, or renters, as applicable
  • Copies of any letters or other documents from or to insurance companies
  • Health insurance documents from your employer, if applicable, including any co-pays, deductibles or coverage limits
  • Any disability insurance coverage, if applicable
  • Any Veterans insurance policy, if applicable

 Information about Your Medical and other Expenses

  • Copies of all medical bills
  • Receipts for any expenses you have incurred because of your injury
  • Any other documentation regarding your injury or treatment for your injury
  • Records of any psychiatric or psychological care or treatment that you required because of the accident and injury

 Other Considerations

The information collected at the initial conference may or may not establish that you have a case.  A definitive decision may not be possible until additional facts are obtained.

If additional information is required, our personal injury attorneys will outline what additional steps are necessary. If you do have a cause of action, our attorneys will advise you promptly.

Time Limitations

Personal injury lawsuits are governed by what is known as a “statute of limitations.”  This means that if you are injured in an accident, you will only have a certain amount of time from the date of your injury (or the date that you first became aware of your injury) to file a lawsuit.  In Wisconsin, the statute of limitations for most types of personal injury cases is three years.  Hence, time may be of the essence.  If your case is not filed within the time period, it may be barred forever.

Fees for Personal Injury Lawsuits

Dempsey Law frequently uses what is known as a “contingency fee” in personal injury lawsuits.  If you do not win your case, the Firm will not receive a fee.  The Firm’s fee is based on a percentage of the amount recovered.  Generally, the Firm’s clients in personal injury actions are responsible for all costs that the Firm may incur on the client’s behalf.  These costs include filing fees, postage, photocopies, fax and telephone charges, service of process, depositions, appraisals, witness fees and fees for expert witnesses.  Of course, if your personal injury case is successfully settled or tried, these costs will be deducted from the amount recovered.  A fee agreement will be executed with you at the time of the initial interview.

Conclusion

Accidents and injuries may involve complicated facts and many documents and records, particularly if there is insurance or medical providers involved.  It is important to keep good records at all times.  The initial interview is when most of the information and documents are collected.  The more complete the information presented, the more quickly our experienced personal injury attorneys can review and assess the merits of your case.  You can assist in the process by providing the necessary information.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Personal Injury Lawyer, Trial Lawyer | Tagged: , , , , | 4 Comments »

Applicants and Conviction Records

Posted by dempseylawfirm on April 13, 2010

Yes, you can ask an applicant for employment if he or she has ever been convicted of a crime.  However, once you determine that the applicant has a criminal record, you cannot simply refuse to hire for that reason.  The Wisconsin Fair Employment Act prohibits discrimination on the basis of a conviction record. 

An employer must show that there is a substantial relationship between the circumstances of the conviction and the job duties applied for.  Some cases are easier to call: a child molester would not have to be hired by a daycare center; an embezzler would not have to be hired by a bank.  Other cases may be more difficult to interpret. 

Of course, an employer does not discriminate on the basis of a conviction record if the employment decision is based solely on objective factors, such as the applicant failing to meet the minimum qualifications for the job or failing to possess the desired skills and experience, when compared with other applicants.

 Once you make the determination that your applicant or employee has a criminal conviction or presents a risk to employees in the workplace, you may want to contact legal counsel before taking any action regarding employment.

For more information about our firm, please go to www.dempseylaw.com.

 

Posted in Business Lawyer, Employment Lawyer, Trial Lawyer | Tagged: , , , , , , , | 1 Comment »

Troubled Employees Are Trouble for Employers

Posted by dempseylawfirm on April 13, 2010

If you are an employer, it is likely you have only one or two chances to avoid the problems, and potential liability, that comes with a bad employee.  You can minimize the risks by taking a few specific and appropriate actions.

Prior to Hiring

Wisconsin recognizes the tort of “negligent hiring.”  In Miller v. Wal-Mart, the Wisconsin Supreme Court determined that an employer could be liable for the negligent supervision, hiring and training of an employee.  If your employee harms another employee or a third party at work and you, as the employer, knew or should have known of the employee’s dangerous tendencies, you could be liable.  Consequently, the hiring decision is the most important decision that is made.  And, it is the first and best opportunity to minimize or eliminate risk.

As an employer, you should have in place hiring practices and policies that will assist you to identify and “screen out” potentially dangerous employees, and that will provide a sound basis on which to defend a decision to hire or not to hire.  These practices and policies should include:

  • Develop a Comprehensive Employment Application Form.  You will need a form that is well thought out, solicits the information you need, and complies with the law.
  • Regularly Train Interviewers.  Every HR person involved in the interview or hiring process should regularly be trained to identify potential issues and ferret out necessary background information.
  • Check References Thoroughly and Carefully. The more substantive information you can obtain, the clearer the picture will be.  Telephone reference checks, as opposed to relying on supplied reference letters, can provide detailed and nuanced information.
  • Look Further into an Applicant’s Background.  It is important to spend the time as appropriate for the position.  Criminal conviction checks and credit checks should be a routine part of the process when hiring for positions involving trust and confidence and the handling of money.  Motor vehicle records and other public records may also provide useful information.
  • Trust Your Instincts.  Good HR recruiters often have a “sixth sense” about applicants.  They can pick up on unexplained gaps in employment history, or why an applicant suddenly switched jobs without good reason, and can ask appropriate questions of an applicant who appears openly critical of or hostile to former employers or former fellow employees.
  • Don’t Allow Time Pressures or Demands of the Job to Color the Decision.  Often, HR personnel are working under tight time deadlines or urgent demands to “get some bodies now” hired into the workplace. 

When the pressure is the greatest, that is when the most time should be taken to ensure the processes and the decisions are sound.  In the rush to meet hiring goals and time schedules, there can be a tendency to cut corners or take short cuts.  Avoid this.

  • Document Your Decision.  Make a record of the process that you followed, the steps that you took, and the information that you obtained.  This record will serve as good evidence of the care and diligence that was taken at the time of the hiring decision.

 

After Hire

After hire, the employer’s potential liability does not end.  Employers have a continuing duty to be aware of and, in appropriate circumstances, take immediate steps to prevent harm to employees and to third parties.  Incidents involving a troubled employee abusing, harming, making threats, or “acting strangely” must be taken seriously and acted on promptly.  Always document any alleged incident and follow to the letter any progressive discipline process or policy in place.  Encourage employees if they are a victim of, or witness to, such conduct to come forward immediately.

The Hobson’s Choice

When confronting a dangerous employee, employers are often faced with the Hobson’s Choice of taking swift action, which often includes summarily dismissing the employee, or leaving the employee in place, and thereby creating potential liability for the employer if there is another incident perpetrated by the employee in the workplace.

Moreover, termination of the employee does not necessarily solve the problem.  A significant number of workplace violence incidents occur during or soon after such a termination.  Often these troubled employees do not just go away, they go away mad – and then they return with a weapon.

Intervention

Forward thinking employers have adopted the concept of “Intervention.”  The concept is premised on the creditable goals that a troubled employee who has broken the rules should not be allowed to stay in the workplace, but also should not be summarily fired.  Instead, an Intervention Team, at the first sign of an employee’s dangerous tendencies, should immediately be activated.  The Intervention Team is an inter-disciplinary team (HR, legal advisor, management, and a psychiatrist or psychologist) focused on (1) mitigating or removing the threat to other employees or third parties in the workplace and (2) obtaining the help and resources the troubled employee needs.

Steps in the process include identifying and evaluating the incident and the employee, placing the employee on a paid or unpaid leave, and developing a plan to provide the counseling and medical resources necessary to assist the employee.  The end result is that the employee may still go away, but that he or she will receive

the necessary assistance.  This approach may cost the employer more in time and money at the outset, but the value of intervening and preventing a violent incident in the workplace far outweighs the cost.  It can be money well spent.

Conclusion

Employees often have problems; troubled employees can have significant problems. Employers have a chance at both the hiring stage, and at an intervention stage, to take the appropriate actions and make the right decisions to reduce or eliminate risk to the employer and other employees or third parties.  Our lawyers are experienced with employment law matters and can ably assist you with your employment law-related questions.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Business Lawyer, Employment Lawyer, Trial Lawyer | Tagged: , , , , , , , , | 1 Comment »

Tips for Employers Making Employment Decisions

Posted by dempseylawfirm on January 21, 2010

1.     Engage legal counsel early in the process.

2.     Review thoroughly the relevant facts and files prior to making the decision.

3.     Use our firm’s “independent” internal review process so that decisions are reviewed before being finalized.

4.     After discussion with counsel, prepare a note or memo to document the decision, the supporting evidence, and the legal basis at the time the decision is made.

5.     Spend time and effort writing a good position statement if responding to a charge.

6.     With the advice of counsel, assess the risks and identify the best strategy to defend or settle early on.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Business Lawyer, Employment Lawyer, Trial Lawyer | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Checklist for a Deposition Witness

Posted by dempseylawfirm on January 21, 2010

  1. Be prepared to spend the necessary time with your attorney to get ready.
  2. Identify and have available all of the relevant documents and other records you need to prove the case.
  3. Unless advised otherwise, spend time going over the facts or files so that you are very familiar with them.
  4. Carefully listen to and understand any key points emphasized by your attorney.
  5. Get a good night’s sleep so that you are rested and alert.
  6. Dress comfortably, but appropriately, so as to make a good impression.
  7. Answer only the question asked – not what you think the questioner is seeking.
  8. Tell the truth.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Business Lawyer, Divorce Lawyer, Employment Lawyer, Family Law Lawyer, Personal Injury Lawyer, Trial Lawyer, Workers Compensation Lawyer | Tagged: , , , , , , , , , , , , , , , , , , , , , , | Leave a Comment »

Changes in Employment Law

Posted by dempseylawfirm on January 21, 2010

2009 Wisconsin Act 20, effective July 1, 2009, expands Wisconsin Fair Employment Law to make available compensatory and punitive damages for employment discrimination.  This is a significant change to the law, and presents new opportunities and new pitfalls for both employees and employers.  These damages are now available along with the other remedies of back pay, reinstatement, and attorneys’ fees in employment cases, and bring Wisconsin law more closely in alignment with Title VII of the federal Civil Rights Act.

Compensatory damages typically go beyond traditional remedies and would encompass “front pay,” e.g., wages or salary that would have been paid in the future but for the adverse employment action.  Punitive damages are special damages available where an employer has acted in a particularly unlawful manner or in bad faith, and are used to “punish” the employer into behaving better in the future.

Employee Considerations

Compensatory and punitive damages may be available to the aggrieved employee, but only if two things occur: (1) the employee must first be successful in an administrative proceeding with the Equal Rights Division and obtain a “probable cause” determination, and (2) must then commence an action in circuit court to obtain the additional damages.  The new law also provides for a jury trial on these issues.  Employees are required to exhaust their administrative remedies first before they can bring their case to the circuit court.

For employees who may have a cause of action, the new changes to the Wisconsin law allow for expanded remedies, and the opportunity to recover a larger amount from an employer who has violated the law.  Employers’ liability for compensatory and punitive damages is capped, however, with the maximum amount that can be recovered set at $300,000.  It becomes even more important now if you suspect that you may 

be a victim of employment discrimination, you should hire an attorney as early as you can in the process.  This is necessary to insure that all possible bases of discrimination are reviewed (including any potential retaliation claims), and that the charges filed in the administrative proceeding are handled correctly.  Our attorneys are very experienced with the filing of these charges and have represented numerous employees in successful outcomes.

Employer Considerations

Dempsey Law attorneys have long advised business clients about terminations and employment decisions and have brought significant value to employers in these cases.  For employers, the stakes of losing have gone up, with new potential for additional exposure.  Our lawyers believe in a “proactive” approach, and can ably assist the employer early on in the process to reduce or eliminate any liability. 

An employment lawyer should be involved as early as possible in the employment decision process with the employer.  This is an opportunity early on to discuss the planned action, assess the facts and the risks, and determine the appropriate strategy.  Yes, it may cost a little money up front for the employer, but it can pay huge dividends down the road if the discrimination charges, circuit court case, and alleged damages can be eliminated or substantially reduced.

Another proactive approach we recommend for employers is to conduct an employment law “audit.”  This exercise, which could involve five to ten hours of an employment attorney’s time, results in a thorough review of the employer’s employment practices and documentation, a report, and recommendations, if called for, on how to better protect the employer’s interests.

Significant Deadlines

For both employees and employers, there are some significant dates and time periods to keep in mind during an employment case.  After a hearing examiner finds, or LIRC affirms a 

finding of probable cause, the employee must be notified in writing that he or she may bring a civil action in circuit court to recover compensatory or punitive damages.  Under the new Act, the time limit for bringing a civil action is 60 days from the time of the hearing examiner’s final decision is mailed to the employee, or if the examiner’s decision is reviewed by LIRC, 60 days after LIRC’s final decision is mailed to the employee.

Conclusion

As of July 1, 2009 the potential rewards for aggrieved employees and the potential risks for employers facing charges have gone up in employment discrimination cases.  Compensatory and punitive damages are now available, and the aggrieved employee is now entitled to a jury trial in circuit court on these damages, if probable cause is found.  This will require that both employees and employers understand their rights and take the appropriate steps to protect themselves and their economic interests.

For more information about our firm, please go to www.dempseylaw.com.

Posted in Business Lawyer, Employment Lawyer, Trial Lawyer | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a Comment »

The Art of Deposition Testimony (or “Oh my God, why do they want to talk with me?”)

Posted by dempseylawfirm on January 21, 2010

If you are ever involved in civil litigation as either a plaintiff, a defendant, or as a witness, you may be called upon to give a “deposition.”  A deposition means that you are testifying under oath but not in court.  Dempsey, Williamson, Kelly & Hertel, LLP has long maintained a substantial litigation practice.  Our experienced lawyers can ably assist you in litigation, whether you are party to a lawsuit, or called as a witness.

What is a Deposition? 

A deposition is the act of testifying under oath as a witness in a legal proceeding, with the testimony recorded to be used at a later date.

Why do attorneys use depositions?

They do so for several reasons, including: possible impeachment of later testimony; to obtain admissions; to obtain and preserve evidence; to clarify the issues for trial; and to evaluate the witness prior to trial.

What is the deposition process like?

It is an informal process, usually in an informal setting, such as a law office, conference room, or hotel conference room, rather than in a courtroom.  It usually occurs early on in a case, during what is called the “discovery” phase prior to trial.  There is no judge or magistrate in attendance and it is not open to the general public.  Attendees usually consist of the parties to the lawsuit, the parties’ legal counsel, the person whose deposition is being taken (the “deponent”), and a stenographer to transcribe testimony and produce a written transcript.  Other potential witnesses or interested parties are generally excluded.

Usually, all of the participants are seated around a conference table, with the deponent who is being questioned seated close to the stenographer.  The deponent will be asked questions by opposing counsel, often as though the deponent was under cross-examination at trial.  Opposing counsel will attempt to discover background information, new facts, and solicit damaging testimony, if possible.  Opposing counsel may, if he or she chooses, use “leading” types of questions with a deponent.

What are some practical tips to help me through this?

Spend time reviewing.  First and foremost, spend some time beforehand recalling and reviewing the facts that 

you will be testifying about.  Take a few moments to review any relevant records or notes, but do not bring any records, notes, or documents with you to a deposition unless you are told to do so.  Our lawyers are very experienced at preparing deponents for a deposition, and can fully assist you to prepare within legal and ethical boundaries.

Know facts and details and personal info.  Be familiar with all correspondence, photos, drawings, etc., or other documents which may be important to the case and about which you have direct knowledge.  Know your personal background information, current and past employers and addresses, and the department, division, or group organizational structure you work in if relevant.  These are all “everyday” facts that you should be familiar with, but you would be surprised at the number of people who are deposed who “draw a blank” when asked some very simple questions in this area.

Understand the question asked.  Be sure you fully and completely understand a question before you answer.  If you do not understand the question, or it seems too complicated, make no attempt to answer but instead ask that it be re-phrased, be stated in a different way, or broken down into smaller, simpler pieces.  An inaccurate answer to a misunderstood question could materially affect the results of the case.  As a deponent it is your responsibility to think before you answer – and give your legal counsel time to object to the question prior to your attempt to answer.

Answer the question as briefly as possible.  When answering a question, if possible, try to use a “yes” or “no” answer.  Do not volunteer additional information that a question does not call for, unless it is necessary to make your answer not misleading.  Answer only the question asked.  Do not guess or speculate about an answer.

Maintain a pleasant demeanor.  Answer all questions with a polite and cooperative attitude.  Try to remain calm, particularly if you think you are being “badgered” by the questioner.  Your lawyer will be present and he or she will do whatever is necessary and effective in the circumstances to protect you from any overzealous or intimidating tactics.

Avoid exaggeration.  Exaggerating is a form of untruthfulness.  Do not try to improve on the facts.  The facts are the facts.  Trying to exaggerate invariably is recognized by opposing counsel for what it is, and he or she will later exploit it to undermine your credibility at trial.

Make an effort to enunciate clearly.  Since your testimony is being recorded by a stenographer, make an effort to enunciate clearly.  Speak audibly and in a normal tone of conversation so the stenographer can 

record precisely what you say.  Avoid non-verbal communication, such as nodding your head, shrugging your shoulders, etc., as these physical gestures cannot be captured in writing by the stenographer.

Present your best appearance.  One of the objectives of a deposition is for legal counsel to get a “preview” of what you would be like as a witness at trial.  Opposing counsel will be appraising you and making some tentative evaluations of how you will impress the jury.  So, it is best to make a good first impression.  For the deposition dress neatly and conventionally.  Be articulate and confident.  Stay interested in the questions and the process, and project a sincere, candid demeanor.

Contemplate dates, times, and measurements accurately.  The case you are involved in may turn on a crucial fact.  Very often, deponents are careless with respect to dates, times and measurements.  An inaccurate answer is often the result of not giving the subject sufficient consideration.  It is important to review these kinds of details in advance.  Don’t allow yourself to be forced into a guessing game with opposing counsel.  If your best judgment is asked for, and based on the information you have, you are unable to make a reliable judgment, say so.  You can certainly also say that it is not possible to make a reasonable estimate with the information that you have, and you would only be guessing.  Also, if you cannot be certain of a fact, say so. 

Do not qualify favorable facts.  Answer questions concerning favorable details of your case as positively and definitively as possible.  If you know you are certain of your answer, avoid expressions like “I think” or “I guess.” 

Conclusion

With depositions, as with other things, we often fear what we do not understand.  This article is designed to give you that basic understanding.  Understanding the deposition process, and taking the time to prepare in advance, will enhance the prospects of a successful conclusion to your case.  Our attorneys can ably assist you with this preparation.

record precisely what you say.  Avoid non-verbal communication, such as nodding your head, shrugging your shoulders, etc., as these physical gestures cannot be captured in writing by the stenographer.

Present your best appearance.  One of the objectives of a deposition is for legal counsel to get a “preview” of what you would be like as a witness at trial.  Opposing counsel will be appraising you and making some tentative evaluations of how you will impress the jury.  So, it is best to make a good first impression.  For the deposition dress neatly and conventionally.  Be articulate and confident.  Stay interested in the questions and the process, and project a sincere, candid demeanor.

Contemplate dates, times, and measurements accurately.  The case you are involved in may turn on a crucial fact.  Very often, deponents are careless with respect to dates, times and measurements.  An inaccurate answer is often the result of not giving the subject sufficient consideration.  It is important to review these kinds of details in advance.  Don’t allow yourself to be forced into a guessing game with opposing counsel.  If your best judgment is asked for, and based on the information you have, you are unable to make a reliable judgment, say so.  You can certainly also say that it is not possible to make a reasonable estimate with the information that you have, and you would only be guessing.  Also, if you cannot be certain of a fact, say so.

Do not qualify favorable facts.  Answer questions concerning favorable details of your case as positively and definitively as possible.  If you know you are certain of your answer, avoid expressions like “I think” or “I guess.” 

Conclusion

With depositions, as with other things, we often fear what we do not understand.  This article is designed to give you that basic understanding.  Understanding the deposition process, and taking the time to prepare in advance, will enhance the prospects of a successful conclusion to your case.  Our attorneys can ably assist you with this preparation.

For more information about our firm, please go to www.dempseylaw.com.

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