Foreign Work Force Helps Sustain Our Local Businesses

With Labor Day now behind us, likely many of us have enjoyed some summer fun with our families. Whether a lazy summer day on one of our Jersey Shore beaches, or a day riding the coasters at one of our Pennsylvania amusement parks, summer affords us this time to shut it down and soak up the sun. But, while you’re walking the boards looking for ice cream, have you ever stopped to notice who are those folks working the rides, serving the ice cream or manning the gaming booths? Same goes for the ticket takers at the theme parks. And who hasn’t used their mobile phone or laptop to order those staples for the shore house that you just don’t want to leave the beach to go shop for. Take a closer look and also ponder who might have designed that great app you are using to order those school supplies while the kids are splashing in the pool. Now that you think about it, walking the boardwalks at night can often be analogous to walking down Fifth Avenue in Manhattan during the holidays, English is among the languages you will hear.

The Jersey Shore and Pennsylvania amusement and entertainment industries are great examples of industries that are reliant upon a foreign work force to thrive. Whether through the use of foreign student workers coming to the United States to get a taste of our culture, or the seasonal worker visa program, these industries utilize an immigrant workforce to staff their businesses. And what about that app that you are using on your now sandy cellphone to order from. Ever stop to wonder where that is being developed. You might be surprised to know that a few of our country’s largest American brand retailers are reliant upon a largely foreign national specialized labor force, based here in the United States, to develop these mobile shopping technologies that we can no longer live without.

Pick up a recent newspaper, click a link, or turn on the news and you are likely to hear about the need for a massive wall, travel bans, “extreme” vetting protocols, or the need to hire an additional 15,000 ICE agents all to ensure that we are securing the border and making border security and the slow of illegal immigration-stated priorities. The current administration rode that wave into the White House. Quieter, but equally impactful, has been the implementation of proposals by the current administration that has put legal immigration under attack as well. This issue is of significant concern to local industries who are dependent upon their foreign talent to meet their business needs and keep the rides rolling.

So how is legal immigration under attack? Let’s review the issue from the United States employer side.

US Employers

As a country we continue to have a shortage of one of our most highly utilized visas for specialty workers, the H-1B. These are the visas used by our retailers for their software technology development workers. For at least the past few years now, significantly more than 100,000 people had applied for the only 65,000 available H-1B visas issued each year. This has created an actual visa “lottery” where your chances of having your visa even considered for approval is about 50 percent. The fix, we need more H-1B visas.

For the seasonal worker visas—the H-2B—this past spring in March, the cap for summer visas was reached even before the effective date of April 1. This caused a panic for workers that ultimately required USCIS to issue another emergency distribution of 15,000 H-2B visas in July to those employers who could prove irreparable harm to their business if they could not get workers. Even despite the industries who are dependent on the H-2B workers trying to admirably offer veteran preferences for the open jobs, these employers still cannot find workers willing to do the work. The fix, we need more H-2B visas.

Additionally, as global employers continue to file for visa applications or extensions for existing management-level workers in their global operations to join their U.S. operations, the headwinds of the current immigration climate have resulted in increased scrutiny and denial rates in these applications thereby impeding the efficiencies of their operations here.

On the heels of these, the President Donald Trump, in early August, put his support behind proposed legislation known as the Reforming American Immigration For A Strong Economy (RAISE) Act. If passed, this legislation would replace the current and working employment-based immigrant visa system with a skills-based points system. The over-arching goal of this legislation is analogous to the wall, keep more people out by curbing the existing immigration system. There are also proposals out there calling for a complete overhaul of the H-1B program where there are already visa shortages.

While the ultimate fate of the so-called “travel bans” are tied up in the Supreme Court until likely October, these bans have added to the overall arguably negative current business climate for immigration. Contrasting this climate is the general consensus of American business that as a country we not only need, but in some measure are dependent upon, the foreign talent that chooses to work here and join in the efforts of our existing American team of workers, for the good of the country.

As summer draws to a close, if you’re heading down the Shore for one last time this month, perhaps observe some of those workers around you. While not native born, they are here contributing to our local businesses who are reliant upon them. We need to preserve—albeit modify—an immigration system that both protects our borders but also can additionally aid our legal immigration system also under attack. •

Published , in The Legal Intelligencer. By: Robert C. Seiger, Esq.

Non-Waivable Provisions under NJ-RULLCA

Gianfranco A. Pietrafesa, a partner in the firm’s Business Counseling Group, has contributed an article to the August 2017 edition of the Business Law Section Newsletter of the New Jersey State Bar Association on the topic of provisions in the New Jersey LLC statute (NJ-RULLCA) that cannot be eliminated or altered in an LLC operating agreement.

To read the article, click here.

The Defend Trade Secrets Act—One Year Later

By: Thomas A. Muccifori, published in the The Legal Intelligencer, May 11, 2017

On May 11, 2016, President Barack Obama signed into law the Defend Trade Secrets Act (DTSA) for the purpose of protecting American businesses from economic espionage. The law is notable for, among other things, providing easier access to federal courts as well as the possibility of double damages, attorney fees and the right to ex parte seizure of misappropriated information.

Since its enactment, federal courts across the United States have agreed that the language in the DTSA—”on or after the date of the enactment of this act (May 11, 2016)”—limits recovery for ­parties wronged. However, limiting recovery means something different depending on the conduct complained of under the DTSA.

Briefly, the DTSA provides wronged parties with three “misappropriation” theories: acquisition, disclosure or use of a trade secret. The statute of limitations is three years after the date on which the ­misappropriation is or should have been discovered, but a continuing misappropriation is a single ­misappropriation—for purposes of the ­statute of limitations section only, 18 U.S.C. 1836(d).

So what happens when “misappropriation” occurred both before and after May 11, 2016, and what does that mean for the possibility of recovery?

It depends.

The analysis of these sections began with Dazzle Software II v. Kinney, No. 16-cv-12191 (E.D. Mich. Aug. 22, 2016). The court dismissed the DTSA count of the plaintiff’s complaint because it alleged only conduct before the effective date, but permitted plaintiff, after discovery, to ­re-plead this count based on conduct after May 11, 2016.

In September 2016, both the Southern District of New York and the Middle District of Florida analyzed such a ­scenario in Syntel Sterling Best Shores Mauritius v. Trizetto Group and Adams Arms v. Unified Weapon Systems, respectively.

In Syntel Sterling, the defendant sought leave to amend and add a counterclaim under the DTSA, It alleged conduct that occurred both before and after May 11, 2016. Specifically, Trizetto alleged that, from September 2014, through February 2015, the plaintiff acquired trade secrets. Trizetto then alleged that the plaintiff used and continued to use the secrets to directly compete for the same clients. The Southern District of New York specifically recognized that the statute defines misappropriation as “disclosure or use,” and granted the motion to amend because the proposed counterclaim alleged continued use after May 11, 2016. So although acquisition and some use occurred before May 11, 2016, continued use after May 11, 2016, was actionable and permitted “partial” recovery under the DTSA.

In Adams Arms, defendant Unified Weapon System, moved to dismiss Adams Arms’ count under the DTSA, arguing that the “continuing misappropriation” language in 18 U.S.C. 1836(d) applied to the ­enactment section of the DTSA as well. That is, the defendant argued that any conduct after May 11, 2016, was part of one continuous misappropriation, even conduct after May 11, 2016, was not actionable. The Middle District of Florida rejected this argument based on the clear legislative intent evident from the language of the statute to make the continuing misappropriation doctrine only apply for purposes of the statute of limitations section.

Instead, the district court made clear that partial recovery is available when conduct occurs before and after May 11, 2016. In this case, the plaintiff alleged the defendant acquired the secrets before May 11, 2016, but that all disclosure occurred after May 11, 2016. Therefore, the court permitted the plaintiff to retain its DTSA claim but limited its potential recovery to that which resulted from the disclosure. Thus, in this case, the entire acquisition of the trade secrets occurred before May 11, 2016 and all the disclosure after May 11, 2016—so there was no “continued” conduct, but, rather, separate ­misappropriation grounds arising before and after the enactment of the DTSA. One misappropriation ground (acquisition, disclosure or use) based upon conduct after its enactment is sufficient for recovery under the DTSA.

Then, the District of New Jersey chimed in—High 5 Games v. Marks, No. 13-7161 (Jan. 24). In granting a motion to amend to include a claim under the DTSA, the district court distinguished Dazzle Software, because the plaintiff in Marks alleged “continuing misappropriation” based upon alleged acquisition and use that began before enactment but continued thereafter. The District Court relied on Adams Arms, but stated that the parties’ briefs were inadequate to deny the motion to amend. At this point, it seems as though the federal courts would permit partial recovery despite continuing misappropriation, so long as some continued misappropriation (defined as acquisition, use or disclosure) occurred after May 11, 2016.

This may not be the case for a party ­alleging a continuing disclosure under the DTSA. The Northern District of California, in Avago Techs U.S. v. NanoPrecision Products, No. 16-cv-03737, clearly set forth the most critical distinction from Adams Arms—the trade secrets at issue were allegedly acquired and disclosed before May 11, 2016, and continually used after May 11, 2016. That is, unlike the other cases, not only did acquisition occur before May 11, 2016, but so did disclosure. The district court stated that it had no authority to sustain a DTSA claim based on continued use where disclosure occurred before May 11, 2016. It further held that “continued disclosure” was insufficient to sustain a DTSA claim. Avago Techs stands for the proposition that the defendants in Adams Arms argued—that a continuing misappropriation, if under a disclosure theory—is not actionable under the DTSA. The reason behind this is once “the information is in the public domain … the trade secret is extinguished.” Therefore, without a continued acquisition or continued use, simply alleging continued disclosure is insufficient for recovery.

The District of New Jersey, in Chubb INA Holdings v. Chang, No. 16-2354, in February 2017, dealt again with acquisition and retention. In that case, all acquisition occurred before May 11, 2016. The court found that the pleadings sufficiently alleged an inference of use based on the retention of confidential information with the intent to disclose or use and the defendants’ ­solicitation of plaintiff’s customers, and subsequent inevitable disclosure.

The Eastern District of Pennsylvania, in Brand Energy & Infrastructure Services V. Irex Contracting Group, No. 16-2499, in March, again analyzed this exact issue—continuing access and use. The court recognized the path being created by Syntel Sterling, Adams Arms and Schein. Interestingly, the court also emphasized that the Pennsylvania Uniform Trade Secrets Act does not apply to continuing misappropriation that occurs after the effective date.

The rule is the same—if there is a continuing access or use that began before the DTSA’s enactment, the DTSA still applies if such misappropriation continued after the date of enactment. However, if the continuing misappropriation is simply disclosure, it appears the courts may not permit recovery under the DTSA.

The point is, even if the misappropriating conduct occurred before May 11, 2016, ­litigants may still be able to avail themselves of this new federal remedy—including the added remedies of double damages, attorney fees and the ex parte seizure of misappropriated information. However, in bringing a DTSA claim, practitioners needs to carefully consider the theory and timing of each alleged misappropriation if any ­conduct predates May 11, 2016.

— Ashley LeBrun and Daniel J. DeFiglio, both associates at Archer & Greiner, ­contributed to this article.•

Thomas A. Muccifori is a partner at Archer & Greiner’s Haddonfield, New Jersey office and chair of the firm’s trade secret protection and noncompete practice Group. He can be reached at ­856-354-3036 or tmuccifori@archerlaw.com.

Andrew Fede Discusses Sign and Billboard Law

Andrew T. Fede authored the article, “Sign and Billboard Law: Hijacking the First Amendment or Balancing Freedom of Expression and Government Control?” published in the April 2017 issue of New Jersey Lawyer.  Click here for a printable copy of the article.

Andrew Fede is a Partner in Archer & Greiner’s Hackensack office, and is an adjunct professor in the Department of Political Science and Law at Montclair State University. He is the author of three books and many articles on a variety of legal topics.

This article was originally published in the April 2017 issue of New Jersey Lawyer, a publication of the New Jersey State Bar Association, and is reprinted here with permission.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or the NJSBA, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

 

 

 

 

NJ-RULLCA Provisions Requiring Unanimous Consent of Members

Gianfranco A. Pietrafesa, a partner in the firm’s Business Counseling Group, has contributed an article to the April 2017 edition of the Business Law Section Newsletter of the New Jersey State Bar Association on the topic of decisions that require unanimous approval of LLC members unless such a requirement is modified in an LLC operating agreement.

To read the article, click here.

CHARITABLE BEQUESTS: HOW TO MAKE THEM LAST

mosorio

No one likes talking about death.  

No one likes thinking about death.

However, planning for your death — an inevitable event for all of us — can be one of the simplest ways to control the disposition of your assets after you pass.  A good estate plan can also work to reduce taxes due at the time of death, while also allowing you to make meaningful charitable contributions.

Employ a Professional

While in many states you can handwrite a Will, or even type out your Will on an iPad; to avoid any ambiguity as to your final wishes, and to prevent litigation, it is recommended that you seek professional assistance in creating your estate plan.  Further, you should find a practitioner who is licensed to practice in the state in which you currently reside.

There has been a growing trend towards using internet services and “do-it-yourself” kits that provide general forms and templates for Wills and other legal documents.  These forms can be dangerous as they are a one-size fits all approach to estate planning – a matter which requires personalization. 

Commonly Litigated Issues as to Charitable Bequests

Litigation has arisen in the interpretation, construction, and implementation of charitable gifts in the following scenarios:

  • A poorly drafted Will can result in litigation if there is question as to whether a bequest or trust is indeed charitable.  In general, a charitable trust is a trust “created to benefit a specific charity, specific charities, or the general public rather than a private individual or entity.”  BLACK’S LAW DICTIONARY 1547 (8th ed. 2004).
  • Courts will apply the doctrine of cy pres – and modify charitable bequests – in situations where it becomes impossible, impracticable or illegal to carry out the testator’s particular charitable purpose.  Restatement (Second) of Trusts § 399 (1959).  Thus, it is important to always revisit your Will and update it accordingly, confirming that charities are still in existence and engaging in the same type of charitable work for which you gave the gift.
  • Consider making your bequests condition free.  Consider what would happen if your condition could not be fulfilled. Remember that anyone with standing can contest your Will, i.e., a beneficiary who feels slighted by the terms of the Will, a potential beneficiary, an ex-spouse, stepchildren, children, or siblings.
  • Discuss your plans with the charity in advance, especially if you intend to leave tangible objects, such as artwork or antiques.  You want to work with the charity to ensure that it can make use of and accept your gift.

By enlisting a professional and avoiding some of these common pitfalls, you can make a gift to charity that has a lasting impact.

This article was written by Melissa Osorio Dibble, Esquire, an Attorney at Archer & Greiner, P.C., and a member of Samaritan’s Planned Giving Committee, a volunteer group of the region’s leading financial professionals, lending their expertise to guide our charitable estate planning efforts.

Jam Recipe Yields 1st DTSA Verdict

Click here to view printable PDF of the article. 

On Feb. 27, 2017, a federal jury in Pennsylvania returned the first verdict under the Defend Trade Secrets Act of 2016 and awarded what may amount to be more than $5 million in damages to the plaintiff, the creator and owner of a proprietary fig spread. The case is notable not merely for being the first verdict under the newest amendment to the Economic Espionage Act; it also stands as a reminder of the potent remedies afforded to American companies seeking to protect their trade secrets.

By way of background, on May 11, 2016, President Barack Obama signed into law the DTSA, and thereby amended the Economic Espionage Act of 1996 to create a federal civil remedy for trade secret misappropriation. Since that time, courts around the country have largely interpreted provisions of the DTSA to be coextensive with the various state laws that provide similar protections for trade secrets.[1] However, no case had been brought to a jury verdict, until now.

The salient facts of the case are relatively straightforward. Plaintiff Dalmatia Import Group Inc. is a company co-founded by plaintiffs Maia Magee and Neb Chupin in 1994. Their signature product is the Dalmatia Original Fig Spread. Dalmatia’s namesake comes from its origins in Croatia. Specifically, Dalmatia is a region of Croatia where Chupin grew up and Magee studied as a teenager, and where Chupin’s grandfather dedicated his life to Croatian agriculture.

Chupin and Magee first conceived of the proprietary fig spread while traveling in Croatia in early summer 2000. Thereafter, inspired by the jarred fig preserves Chupin had experienced as a child in Croatia, he and Magee worked with and paid a food technologist to create the recipe and production process for what is now known as Dalmatia Original Fig Spread. According the complaint, the two spent “countless hours” creating Dalmatia’s proprietary recipes — expressed in lists and percentages of ingredients — and production processes.[2] Perhaps unsurprisingly, Dalmatia kept a tight guard on these trade secrets. In addition to shielding these processes and recipe from the general public, it also requires all outside parties, including the defendant, Lancaster Fine Foods Inc., to sign a nondisclosure agreement before having access to them.

The central controversy here arose when Dalmatia decided to part ways with its manufacturer, Lancaster, and its distributor, FoodMatch Inc., toward the end of 2015. Specifically, in or around April 2015, Dalmatia became concerned with the quality of Lancaster’s production of the fig spread. This, in turn, caused delays and other issues on the distribution end, and ultimately led Dalmatia to terminate its arrangement with Lancaster. Dalmatia terminated its distributor agreement with FoodMatch soon thereafter in December 2015.

In or around the same time, FoodMatch and Lancaster decided to enter the fig spread business themselves, and created a product called “Divina.” The problem with this, however, was that they enlisted the primary developer from Lancaster who had access to Dalmatia’s propriety recipe and processes and told him to create “[t]he product we know and have become used to.”

In response, Dalmatia filed an action in the Southern District of New York on Feb. 8, 2016, seeking, inter alia, to enjoin FoodMatch from using its trade secrets in the production of FoodMatch’s Divina-brand fruit spread.[3] Because the DTSA had not been signed into law at the time Dalmatia filed its original complaint, Dalmatia did not include a count under the DTSA. However, on Aug. 1, 2016, Dalmatia filed an amended complaint and added a claim under the DTSA, which included a request for exemplary damages.

The litigation culminated in a four-week trial, after which the jury returned a verdict in favor of Dalmatia, and awarded compensatory damages, as well as an injunction preventing future use of Dalmatia’s trade secrets. The parties continue to spar over the quantum of those damages.

Looking forward, the Dalmatia case is not necessarily memorable for its unique legal principles for several reasons. First, Dalmatia’s proprietary recipes and processes would likely have been protected under common law, and would certainly have been protected under the existing Pennsylvania Uniform Trade Secrets Act. Indeed, in a case with strikingly similar themes, the Third Circuit affirmed a trial court’s grant of injunctive relief under the Pennsylvania Uniform Trade Secrets Act six years before the DTSA’s passage.[4] As is relevant here, the defendant in Bimbo Bakeries, was only one of seven people in the world with the detailed knowledge of all three components needed to replicate Thomas’ English Muffins’ distinctive “nooks and crannies.”

Second, it is important to note that the Dalmatia decision was not just a DTSA case. Dalmatia claimed, among other things, counterfeiting under the Lanham Act, and only added the DTSA claim after the lawsuit was filed.[5] Finally, the facts of the case were compelling. It is well-known that trade secret cases are fact-sensitive matters that do not lend themselves to reasoning by analogy. This case is an extension of that maxim. Not only had Lancaster and FoodMatch allegedly hired the singular developer who had knowledge of Dalmatia’s proprietary recipes and processes, but Dalmatia had the proverbial smoking gun — namely, a statement from the defendants that they intended to make a fig jam that was specifically based on Dalmatia’s proprietary recipe and processes.

Nevertheless, the case is notable in several respects. First, the case stands as a reminder of the powerful protections that can arise from the DTSA in the proper factual scenario. Indeed, according to Dalmatia’s motion for judgment on the verdict, submitted March 20, 2017, Dalmatia could be awarded up to $500,000 on its claims under the DTSA and the Pennsylvania Uniform Trade Secrets Act. Second, the Dalmatia case is a testament to one of the DTSA’s primary rationales — affording victims the ability to “move quickly to Federal court, with certainty of the rules, standards, and practices to stop trade secrets from winding up being disseminated and losing their value.”[6] Here, Dalmatia was able to obtain relief in a little more than a year from the filing of its original complaint and within six months of adding its DTSA claim in August 2016. Finally, because much of the decisional case law arising under the DTSA has yet to advance beyond the motion-to-dismiss stage, the Dalmatia jury verdict will likely stand as a bellwether case for future matters arising under the DTSA, or, at the very least, a reminder of the sharp guillotine that could await companies which steal trade secrets.

—By Thomas A. Muccifori and Daniel DeFiglio, Archer & Greiner PC

Thomas Muccifori is a partner and Daniel DeFiglio is an associate in the trade secret and noncompete practice group in Archer & Greiner’s Haddonfield, New Jersey, office.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Forty-eight states have adopted some version of the Uniform Trade Secrets Act, the state analogue to the DTSA. The remaining two states — Massachusetts and New York — provide trade secret protection under the common law.

[2] As it turns out, the fig spread was a huge success; Dalmatia’s Original Fig Spread has won several awards in the last 15 years.

[3] Dalmatia Import Grp. v. FoodMatch, Inc., No. 16 Civ. 0933 (GBD) (S.D.N.Y. Feb. 18, 2016). Dalmatia also brought claims for breach of the distributor agreement, as well trademark infringement and counterfeiting. The suit also named Earth Pride Organics, LLC. Defendants C.O. Nolt Inc. and Michael S. Thompson were added later.

[4] Bimbo Bakeries USA, Inc. v. Botticella, 613 F.3d 102, 110 (3d Cir. 2010).

[5] It was not until Dalmatia’s second amended complaint that the claim under the DTSA was added.

[6] H. Rept. 114-529 – DEFEND TRADE SECRETS ACT OF 2016

 

All Content © 2003-2017, Portfolio Media, Inc.

 

Andrew Fede Article Featured in Journal of Supreme Court History

Andrew T. Fede, an attorney in the firm’s Hackensack office, authored the article, “Not the Most Insignificant Justice: Reconsidering Justice Gabriel Duvall’s Slavery Law Opinions Favoring Liberty,” published in the Journal of Supreme Court History (March 2017).

In the article, Mr. Fede suggests that Justice Gabriel Duvall has been unfairly labeled as the most insignificant U.S. Supreme Court Justice. He discusses the two slavery law opinions that Duvall wrote while on the Court. The opinions endorsed legal doctrines in suits for freedom, which Mr. Fede contrasts with the pro-slavery approach that swept through the Southern courts in the years before the Civil War, and that reached the Supreme Court in the infamous Dred Scott case.

Mr. Fede has more than 30 years of legal experience. Since 1986, he has been an adjunct professor of law at Montclair State University. His forthcoming third book, “Homicide Justified: The Legality of Killing Slaves in the United States and the Atlantic World,” will be released July 15, 2017. His other books include “Roadblocks to Freedom: Slavery and Manumission in the United States South,” and “People Without Rights: An Interpretation of the Fundamentals of the Law of Slavery in the U.S. South.” He is also author of dozens of articles on legal topics.

Click here for a printable copy of “Not the Most Insignificant Justice: Reconsidering Justice Gabriel Duvall’s Slavery Law Opinions Favoring Liberty.”