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 3^rd 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.

 

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A-Contact your lender immediately and explain your situation.  Provide information on your income and expenses.  Do not ignore the notice.

Q – Do I have any options other than foreclosure?

A – Yes, you may.  Our experienced attorneys may be able to assist you.

Q-Can I sell my home rather than lose it in a foreclosure?

A-Yes, you can.  It is called a “short sale.”  The cooperation of your lender and an experienced real estate agent are essential.

Q-Can my lender sell my home  for less than what I owe?

A-Yes.  And if it is sold for less, the lender may come after you for a deficiency judgment.

Q-Who can bid for my house at a foreclosure sale?

A-Anyone can make a bid, including you.

Q-What if no one makes a bid for my home?

A-Your lender will take possession and hire a real estate agent to sell your home.

Q-Is it really worth trying to save my home?

A-Yes, if you are willing to fight for it and you have sufficient equity in it.  Our experienced attorneys can discuss strategies and options with you.

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

Judicial Process 

The judicial process involves the lender filing a lawsuit to obtain a court order to foreclose the lien of the lender’s mortgage.  It is used when there is no power of sale provided in the mortgage.  After the court grants a judgment of foreclosure, your home will be auctioned to the highest bidder.  In Wisconsin, no sale may be pursued for one year from the date of the judgment unless your lender gives up its right to any deficiency, i.e., the difference between the winning bid and what you actually owe.  If the lender waives any deficiency, the delay is six months, or two months if you abandon your home.  You may, in an agreement with your lender, consent to an earlier sale.

 Short Sales and Deeds in lieu of Foreclosure

            Two possible alternatives to a foreclosure are a short sale or deed in lieu of foreclosure.  A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.  Lenders may be willing to do this to avoid the costs of a foreclosure.  The benefit to you is that the lender may be willing to forego pursuing the deficiency that results from the sale.  Thus, through proper negotiation with the lender, it may be possible to get out from under your mortgage obligations and not owe the bank any additional amounts.  However, this is the lender’s decision.

            It is important to note that these sales can take a substantial amount of time prior to the lender approving them.  You may also need to submit to the lender more 

information then you did to get the loan and take any actions they request, such as marketing the property. In a short sale, the virtue of patience will be necessary.

            Another possible way to avoid foreclosure is a deed in lieu of foreclosure.  Essentially you deed your property to the lender in exchange for the lender cancelling the loan.  The lender agrees to not initiate, or will terminate, any existing foreclosure proceedings.  Again, though, you will need to negotiate a forgiveness of any deficiency with the lender prior to completing this procedure.

 Both procedures may be difficult, if not impossible, where there are multiple lenders or lien holders.                                                        

It is also important to note in both cases that if the lender does forgive the deficiency there will be income tax consequences since debt forgiveness is considered income to you unless certain exceptions apply.  Dempsey Law’s experienced tax attorneys can assist you with those considerations.

Conclusion

Dempsey Law’s experienced Real Estate attorneys understand the law and the foreclosure processes, know and have dealt with many of the lenders and real estate agents in the area, and can provide assistance to you in dealing with your lender and helping you avoid foreclosure, if that is possible, or otherwise protect your interests in the process.

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

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

Dempsey Law’s Trust & Estate Planning attorneys have the experience and can ably assist you with the documents that will meet your needs.  You owe it to yourself and to your family to see that you have the appropriate estate planning documents in place.  Often, basic estate planning will include these five documents: a last will and testament; a durable financial power of attorney; a power of attorney for health care; a living will; and an authorization for final disposition.

Last Will and Testament

For almost everyone, a simple last will and testament can meet your basic testamentary needs.  It is a single legal document that can accomplish the following goals:  identify the proper beneficiaries of your estate, which may include family members, friends, or charities; appoint your personal representative (and a successor) who is the person legally responsible for seeing that your wishes are carried out; designate a person who will care for your minor children, if needed, or for anyone else you may be responsible for and provide directions for their care; and control how you want your assets to be distributed to the beneficiaries of your estate after your death.  If you die without a will, then your estate will be divided according to the laws of intestacy under the Wisconsin Statutes which may be different than how you wish your estate to be 

handled.  Of course, if you have accumulated significant wealth (generally, a gross estate of more than $3,000,000), if you own a business, or if you have property in multiple states, you may need more extensive planning and a more complex estate plan to maximize what can be transferred to your heirs to specify how the assets are to be transferred, and also to minimize any federal or state tax impact. 

Durable Financial Power of Attorney

If you ever have a mental or physical incapacity or are out of the country, a durable financial power of attorney may be necessary.  This is a legal document that authorizes an individual or entity (called an “agent”) to act on your behalf for financial matters.  The most common uses for financial powers of attorney are for financial transactions or real estate matters.  With a durable financial power of attorney, you can choose when and to what extent you want to give power to another to act for you in financial matters.  Often, the power of attorney encompasses bill paying, banking, insurance, real estate, income taxes and the ability to do other specified acts.  It can be open-ended in time or can terminate on a specific date.  It is revocable at any time.  Having a durable power of attorney will protect against the prospect of your family having to go to court to have a guardian appointed for you in the event of incapacity.

Medical Power of Attorney – Power of Attorney for Health Care

A medical power of attorney, called a “Power of Attorney for Health Care” in Wisconsin, is a legal document that appoints an individual (usually a spouse, family member or trusted friend) as your health care agent to make medical decisions for you in the event that you are no longer able to do so.  The medical power of attorney may also include the agent’s powers regarding your admission to a nursing home or to a community-based residential facility.  It may also include provisions regarding your baby if you are pregnant at the time of your incapacity.  And, if you have not already done so, you may also make anatomical gifts at the time of your death.  The most common situation arises when you are either unconscious or your mental state no longer allows you the legal capacity to make decisions for yourself.  An executed copy of your medical power of attorney is also often kept on file with your medical provider, in case it is needed.

Having a medical power of attorney will protect against the prospect of your family having to go to court to have a guardian appointed for you in the event of incapacity.

Living Will – Declaration to Physicians

A living will, called a “Declaration to Physicians” in Wisconsin, is a legal document that identifies the types of medical treatments and life-sustaining steps or procedures you would, or would not, want, such as mechanical breathing, a feeding tube, or other means to extend or prolong your life in the event that you have a “terminal condition” or if you are in a “persistent vegetative state” as defined under Wisconsin law.  Having a living will affirmatively states your wishes to your family, loved ones and the world concerning your desires if you are ever in such a difficult situation.  A living will applies in circumstances where the decision to use medical treatments may extend your life for a limited period of time and not obtaining treatment would result in your death.  A living will is not intended to and does not prevent medical providers from denying you pain medications and other measures that would relieve pain or otherwise make you more comfortable.  A living will does not affect your medical treatment in the ordinary course in situations that are not life-threatening.  The determination whether your condition meets the definition of “terminal condition” or “persistent vegetative state” is determined by medical professionals, usually your doctor and at least one other doctor, or your doctor and a licensed psychologist who have examined you and/or reviewed your medical history and status.  An executed copy of your living will is often kept on file with your medical provider, in case it is needed.

Authorization for Final Disposition

An Authorization for Final Disposition is a legal document that allows you to identify who you want to be in charge of arranging your funeral or cremation services.  It also allows you the ability to put into writing what your wishes are for a funeral service, the scattering of ashes after a cremation, or any other wish or desire that you may have for handling the disposition of your remains.  In the event that there is no Authorization for Final Disposition document, the planning for these issues is often left up to the first heir to step up and be willing to pay for such services.

Conclusion

The medical profession has an ever-increasing ability to prolong lives.  Better diet and being more health-conscious also contribute to extending your years.  However, if you fall into frail health or if some misfortune should overcome you, you need to have a plan, and these basic legal documents will allow you to deal effectively with these situations.  You owe it to yourself and to your family to have a plan and have these essential documents in place.  The documents discussed in this article can provide you with that plan and protect your family from ever having to make very difficult decisions without knowing precisely what your desires are or from enduring time-consuming and costly court hearings in order to carry out your wishes.

Should you wish to discuss any of these documents in more detail, or if you already have any these documents but think that they may be in need of updating, our Trust and Estate Planning attorneys will be happy to talk with you and provide you with the benefit of their experience and expertise.

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

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.

             However, as we all know, in practice there are two significant impediments to successfully implementing and using these new tools.  One is the “human” factor.  People.  They make mistakes.  They may not be computer literate.  Or, they may simply not want to learn the new system.  The other obstacle is the software that runs your EHR and CPOE systems.  The decisions you make regarding the choice of software, upgrades, and the software contract provisions are significant legal keys to lowering your organization’ s exposure to negligence and malpractice claims.  This memo will assist you to deal more effectively with your software  planning and your software contracts.  

             Pre-planning

           1. Assemble Your Team.  Software contracting should be a “team” exercise.  For any substantial acquisition, you are smart to involve an outside IT consultant who can act as an objective third party.  An attorney with software licensing and business experience is essential.  A cross-team of your organization’s business, medical professional, and technical people is necessary to obtain  perspectives and receive appropriate buy-in at all levels.

           2. Do the Preliminary Work.  Will the software that you are looking at “run” in your environment? Is it scalable?  Have you done any testing with a demo version?  How many alternatives will you look at?  Have you talked with other similar organizations currently using the software and gained the benefit of their experience?  Determine all alternatives and good, better, and best choices.

           3. Agree on the Process and Strategies.  Once your team is assembled, you will need to develop and agree on the process, strategies and time lines you will use.  This work may be commenced by a subset of your team, or a “lead dog” group that will formulate and sketch out the initial draft plans.  How and when will you look at bids or packages?  Are there legacy systems or concerns that must be addressed?  Who will write your specifications or statement of work (SOW)?  Who will handle the negotiations with vendors?  Who will control the drafting of the legal documents?

           4. Consider Some “What Ifs?”  Prior to the start of the project, your team may want to consider potential problems.  What if the software does not meet the expectations?  What if the roll-out cannot meet the originally established time lines?  What if the site priorities for “go live” need to be re-ordered?  What if there are cost overruns?

           Key Terms and Conditions

           5. Everything is Negotiable.  Price may be negotiable, but so is almost everything else.  Terms and conditions are negotiable, despite what some vendors represent.  As a buyer, if you have leverage, now is the time to make use of that leverage.  Resist the urge to simply sign the vendor’s pre-printed forms.  There is too much money and too much potential liability at stake.

           6. Definitions.  Make sure the key terms are specifically defined and you understand them and how they may inter-relate.

           7. Progress Payments.  Make use of a payment plan, with clearly identified milestones or objectives.  Any doubt about meeting milestones or objectives should be within your authority to resolve or that of a neutral third party – and not ceded contractually to the vendor.

           8. Transferable License.  If you anticipate your organization growing, either organically or by acquisition, now is the time to negotiate the costs of future license “seats,” upgrades or maintenance.

           9. Statement of Work (SOW) and Specifications.  The SOW defines the project and the outcomes.  The specifications mean the functional and operational characteristics of the software.  It is extremely important to spend the time and effort on these documents and finalize them before the contract is signed.

           10. Grant of License.  Pay particular attention to this provision.  Does the license include access to the source code if necessary?  Is there a provision that allows the software to be used on laptops or on the home computers of your medical professionals?

           11. Warranties.  Beyond good title to the software, try to get warranties that the software will materially conform to the specifications and meet any representations regarding performance provided by the vendor.  The duration of any warranty should be stated.

           12. Remedies.  Legal remedies for breach of warranty should be carefully considered.  The most common remedy is simply to “repair or replace” the software, but this might not be adequate in your circumstances.  Response times also may be of critical importance.

           13. Indemnities.  Indemnities are not risk allocation provisions.  Indemnities relate to liability due to a third party claim against one of the contracting parties.  A good example is a claim by a third party that the vendor’s software infringes the third party’s intellectual property.

           14. Risk Allocation.  This is a key provision, as it is concerned with allocating liability between the contracting parties for any breach of the contract and potential damages.  Waivers, incidental, consequential, liquidated and actual damages are all within the scope of this provision.  Risk management plays an essential role.  How will you cover any potential risks or legal exposure?  What is covered by the vendor if it is negligent and what do you need to cover by your own insurance or by other means?

           Post-Contract

           16. No Oral Agreements.  Simple rule – if it is not in writing, it did not happen or it was not agreed to.  Be sure to commit all agreements and amendments to writing.

           15. Assemble the Documents.  All contract information (both paper and electronic formats), drafts, notes, emails, files, and signed originals, to, from and with the vendor should be collected to a single source so that a history can be maintained. 

           16. Monitor Status.  Monitor status, glitches, bugs, fixes, maintenance, etc., on a continuing basis.  Keep in mind future up-stream or down-stream upgrades or changes.  Stay in contact with your vendor to maintain close communication and support.

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

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.

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.

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.