To limit warranties or disclaim liability for products sold in online commerce or advertised online, most businesses create a Terms and Conditions or a Rules of Use page on their business website.  A significant uptick in cases filed in New Jersey, however, cite these common broad warranty limitations and disclaimers posted on a business’ website as violations of the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). 

The TCCWNA gives standing to consumers who have suffered no financial loss or injury against sellers who, with no intent to mislead, have provided a consumer with, or even shown, a warranty, contract, sign or notice of any sort relating to personal, family or household merchandise that includes text that violates New Jersey (or federal) law. Using software to find Terms and Conditions or Rules of Use and other web-based advertising and social media campaigns that include the offensive text, the organized plaintiffs’ bar has increasingly relied on TCCWNA to bring class actions to generate huge fees for the attorneys and $100 to each consumer in the class under the statute’s automatic damages provision.

What is the TCCWNA ?

The TCCWNA can be found in N.J.S.A. 56:12-14, et seq. The law, which became effective over 30 years ago, is a broad consumer protection law that requires that a plaintiff/consumer only show:
1.  the consumer or potential consumer was given or shown a warranty, notice, contract, or sign by the seller;
2. the product offered was consumer related – used primarily for  personal, family, or households purposes; and
3. the document or notice included some language that breaches New Jersey or Federal law in some manner.
According to the TCCWNA, N.J.S.A. 56:12-15:

No seller, lessor, creditor, lender  or bailee shall in the course of his business offer to any consumer or prospective consumer….or give or display any written consumer warranty, notice or sign…which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor ,creditor, lender or bailee as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.

Why are the TCCWNA lawsuits being brought?

TCCWNA lawsuits are being brought for a variety of reasons. The core reasons are:

• Most business websites include warranty waivers or indemnity provisions that try to limit a consumer’s legal right.
• The consumer does not have to show any specific injury or any loss.
• Good faith of the business is not a defense. The plaintiff does not need to prove an unconscionable act.
• There is no privity requirement; i.e., the plaintiff does not have to prove that he/she actually bought our used the product.
• Damages include attorney’s fees and court costs.
• There is an automatic $100 damages per plaintiff provision within TCCWNA so actual damages need not be proven. Just a thousand member class means $100,000 in damages.

How does TCCWNA affect a business website?

Business webpages are “notices” under the TCCWNA even if they are not intended by the business to mislead a consumer about the applicable law or to form a contract. This includes the Terms and Conditions, Menus, Disclaimers, and almost any page of the website. Any type of advertisement or print material may be considered a “notice” to consumers and the great variety of state laws and complexity of the Federal Magnuson-Moss Warranty Act make it easy to inadvertently include an impermissible warranty or disclaimer provision. Examples of text that can trigger problems include:

• disclaiming implied warranties (of merchantability or fitness for a particular purpose) on any consumer product if you offer a written warranty for that product or sell a service contract on it. 
• requiring a purchaser of a warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty.
• requiring customers to return a registration card when stating that the business is providing a “full” warranty.
• offering a warranty that appears to provide coverage but in fact provides none (like a warranty covering only moving parts on an electronic product that has no moving parts).
• excluding or imposing limitations on incidental or consequential damages or on how long an implied warranty last in some states.
• including a provision that requires customers to try to resolve warranty disputes by means of an informal dispute resolution mechanism before going to court that does not meet the requirements stated in the FTC’s Rule on Informal Dispute Settlement Procedures.

Caveat

You should always have a lawyer review the Terms and Conditions and Rules of Use pages (and perhaps all the pages) of your website before you publish to see what clauses or statements may be in violation of New Jersey or Federal law. Prohibited limitations on the legal rights of a consumer under implied or express warranties should be edited or deleted.  No business that is acting in good faith should face huge litigation costs and a stiff statutory penalty in a class action lawsuit brought by plaintiffs who suffer no actual harm. 

Employers are now using a new strategy in an effort to keep their employees from leaving the company and working in a competitive enterprise. Traditionally, employers used restrictive covenant agreements, almost always built in to the employee’s written employment agreement. These covenants prohibit employees from engaging in competition with a former employer. Courts tend not to favor restrictive covenants because they impinge on the ability of a worker to earn a living – they are a restraint of trade.

To limit the scope of restrictive covenants, courts impose a reasonableness standard. Restrictions for a limited time, such as a year, and a small geographical area, such as a five mile radius, were favored. Long-term and broad covenants were not. The employee’s skill set and knowledge of the original employer’s enterprise are also key factors in assessing the business need for any restrictions. The more skill needed to do the work, the more knowledge an employee has of the employer’s business strategies, the more justifiable the non-compete clause becomes.

Why Employers Like the Employee Choice Doctrine

The strategy that employers are now using in some states, including Pennsylvania, is a little more artful. Employers are offering employees post-employment benefits such as stock options and deferred compensation with a condition – a catch. The catch is that the benefits are only available if the employee who leaves the company does not compete with the employer providing the benefits. The employee is given a choice to either accept the benefits and not compete, or compete, but forfeit the benefits and be subject to repayment, or "clawbacks” of benefits already paid. The choice has become known as the employee choice doctrine.

The employee choice option works better for the employer than the typical restrictive covenant because it enables the employer to shift the burden to the employee. In the classic non-compete case, the employer's remedy was to seek an injunction against the competing former employee ordering him or her to cease the competition. In employee choice cases, the employer can still seek an injunction. Better still, the employer can just terminate the benefits (the stock option or other post-employment benefit) thus shifting the burden to the employee to seek redress in the courts by demanding payment of the benefit.

In some states, like New York, there is no review of the employee choice option to assure that the choice offered to the former employee is reasonable. That is not the case in Pennsylvania. Pennsylvania law currently does allow employees to craft employment benefits that are tied to non-competition, but the tie has to be reasonable. The cases in Pennsylvania are evolving. As with restrictive covenants, the more reasonable, meaning less strict, the choice is - the more likely Pennsylvania courts will uphold it.

Key Drafting Issues in Employee Choice Benefit Contracts

When drafting employee choice benefit provisions, employers should keep in mind the following points:

• The Employee must have a real choice. The choice between competing in the new position and forfeiting the benefit or not competing and keeping the benefit should be clear. In short, the employee should understand that there is a trade-off.

• The Employee has to leave voluntarily. The choice option is likely only valid if the employee controls the decision about leaving the current employer. Some courts reason that the employee choice doctrine is not really a choice if the employer fires the employee without cause. In such a circumstance, the employer has little or no legitimate business interest in enforcing the non-compete obligation.

• Consideration.  For the employee to be forced to make a choice between forfeiting assets and working with a competitor, the employer has to give the employee additional consideration over and above that which the employee would have been entitled to receive in the normal course of working for the employer, including severance or other payments normally paid upon termination.

Why Legal Counsel Can Help

Experienced business counsel understand the evolving nature of the employee choice doctrine.  In particular, they keep current with the Pennsylvania and federal court decisions so they can craft documents which have the best chance of surviving attack by employees who seek to avoid them by claiming that the choice is invalid as a restraint of trade.

Before drafting, and certainly before presenting an employee benefit with a forfeiture provision – employers should seek to have their business counsel review the language of the benefit contract.

By Elizabeth Fineman, Esquire

As a family law practitioner, I’d like to share some information that could help prepare potential clients for the kind of personal questions they will be asked when they make their first call to schedule a consultation.   Many people are taken aback by being asked for details about sensitive personal and financial details on their initial contact with a family law attorney’s office.  I want to reassure you that, while these initial interviews can be difficult,  there are good reasons why the questions need to be asked,  and  ultimately, you are better served if we gain a fuller picture of your issues before the first meeting with the attorney.

First things first.  The firm is ethically obligated to take names and identifying information related to all parties involved in the case before the attorney consults with the client.  We do this so that we can confirm that there are no conflicts.  A conflict check involves a review of prior cases that the firm and attorneys have handled to make sure that we have not previously represented the opposing party.  Once the firm confirms that there are no conflicts, a meeting with a domestic relations attorney can be scheduled. 

You should also expect to be asked some questions related to jobs, incomes, assets and liabilities.  This information is all provided to the attorney before you meet, enabling that attorney to walk into the initial consultation knowing what issues (divorce, child support, alimony pendente lite, spousal support, alimony and/or child custody) are pertinent to your case and time can be allotted accordingly so that all areas are covered in enough detail at the consultation.

While the first steps in a divorce or family law matter are, by their nature, very personal and fraught with emotion, knowing what to expect before you make that call can hopefully lessen the impact, and lead to a better and more productive exchange.

By: Elizabeth J. Fineman, Esquire

Social media use has become pervasive in modern culture.   More and more people regularly engage in social media activities across several platforms, including Facebook, LinkedIn, Twitter, SnapChat, Instagram and Google+.  Unfortunately, many people post to various social media sites without giving sufficient consideration to the possible consequences.  For those who are going through a divorce, engaged in a custody dispute or paying or receiving support, it is essential that you evaluate your social media habits and apply a higher level of discretion to your social media communications. 

Family Law cases are often tumultuous and there are a lot of emotions involved.  It is not uncommon for some to use social media as an outlet to vent their frustrations, conflicts, or interpersonal issues.  That is never a good idea.  Any time you post something to social media, you should ask yourself, "How would a court view this post?"  If this is not something that you would want raised at a future hearing, do not post.  For many, this kind of self-editing or “filtering” is difficult.  My strong advice to them is to take a break from social media, and develop some “rules” for posting before resuming social media activities.  A few good guidelines are; never post when you are angry or upset, give yourself a cool down period, don’t engage in a public debate or correction of others on the internet, stop and take a moment to think and re-read before posting. It’s important to remember, once you tweet, share or post, you have effectively put something out on the web that you can’t really take back.

For parents, if the other parent objects to the children's photographs being posted to social media sites, you should respect their wishes.  There are other ways to share photographs with family and friends other than social media which are much more secure.

It is important to understand that information posted on many of these sites can be obtained, even after posts are deleted.  Therefore, posting and later deleting may not be sufficient.  There have been too many instances where social media postings have negatively impacted results in domestic relations matters.  In custody, some people post photos and "check in" places during their periods of physical custody, making it clear the children are regularly left with a babysitter.  If seeking additional custodial time, this is never a good idea.  Some people involved in support litigation post information that makes it clear that their income is higher than they have disclosed.  These can all have a detrimental impact their results in court.

I hope the take away here is clear; you must use extreme discretion when utilizing social media when divorce, child custody and support are at issue. 

By William T. MacMinn, Esquire Reprinted with permission from the February 25, 2016 issue of The Legal Intelligencer. (c) 2016 ALM Media Properties. Further duplication without permission is prohibited.

Can organization attorneys represent their agents in an individual capacity? A recent Pennsylvania Superior Court decision said no.

The confidentiality of attorney-client communications is a long-standing privilege across the United States. The U.S. Supreme Court, in Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998), reasoned that full and frank disclosure is a prerequisite that attorneys need in order to give their clients the best legal advice available. "It is the most revered of the common law privileges," according to Commonwealth v. Chmiel, 738 A.2d 406, 414 (Pa. 1999).

There are exceptions to lawyer-client communications. Lawyers cannot hide knowledge that a future crime is going to be committed. The right to assert the privilege can be voided if the communication to the lawyer was also made to nonlawyers. Of current interest is a third exception¬—the client's right to waive the privilege.

People are often surprised to find out from their domestic relations attorneys that there are two different types of custody that have to be addressed: physical custody and legal custody.

Physical custody is simply which parent the children are with at a given time.  This is generally addressed in a custody agreement or custody order based upon three time periods.  First, who has the children on a regular weekly basis.  This is for both days and nights.  Second, how much vacation time does each of the parents have with the children.  Third, who has the children on holidays.  The parents can decide which holidays are important for them to address, and usually not every holiday is considered.  Primary physical custody occurs when one parent has the child or children more than half of the overnights each year.  The other parent is then considered the partial physical custodian.  Even if there is a primary and partial physical custodian, this custodial arrangement is still considered a form of shared physical custody.  Equal physical custody occurs when the parents each have half of the overnights in a calendar year.

Legal custody relates to legal decisions that impact the children.  The major areas of legal custody are education, religion and healthcare decisions.  In the vast majority of custody cases, the parents will share legal custody and therefore make these decisions jointly.   Parents with younger children will have to make more legal custody decisions as compared to those with older children, for whom many of these determinations have already been made.

Custody schedules can be structured many different ways based upon what is in the best interest of the children, and what works for the parents.  Parents are highly encouraged by the court to work out custody schedules.  If they are not able to, the court will make a determination and issue a custody order.

Custody is often the most emotional aspect of a divorce or separation.   We strongly recommend that parents facing custody issues contact an attorney to be sure they understand the process, and their rights under the law.