Category Archives: Business Law

Post Employment Agreement

Post Employment Agreement

The Utah employment agreement is a document that states an employer’s terms and conditions to potential employees. Employment agreement are essential to the working relationship of both parties as they must agree upon the compensation offered to the employee for the duties they perform. The contract also provides clarity into the schedule, or “employment period,” in which the designated duties must be executed. Through the completion of the agreement, the employer protects their assets and removes themselves from certain liabilities in the event of a legal claim filed against them by an employee.

Utah Legislature Imposes Limits On Post-Employment Non-Competition Covenants

The Utah Legislature recently enacted the Post-Employment Restrictions Act (Act), which took effect on May 10, 2016. The Act restricts non-competition agreements with employees. It does not limit non-solicitation, non-disclosure, or confidentiality agreements. The Act applies to non-competition agreements executed after May 10, 2016, and to non-competition agreements entered into prior to, but renewed after, the effective date of the Act. Employers should be aware of the Act and ensure that all non-compete agreements they use after May 10, 2016 comply with the Act. The Act provides that “an employer and an employee may not enter into a [non-competition agreement] for a period of more than one year from the day on which the employee is no longer employed by the employer.” Any agreement that restricts competition for more than one year is void (not merely voidable).

Two types of agreements are excepted from this restriction:
1. a severance agreement and
2. an agreement related to the sale of a business.
Under the Act, post-employment non-compete agreements must still comply with the common law. For example, the agreement must still be supported by consideration, must be free of bad faith in the negotiations, the restriction must be reasonably necessary to protect the company’s goodwill or other legitimate business interest, and the restrictions must be reasonable as to time, scope of activity and geographic area. The Act penalizes employers whose agreements are found unenforceable: “If it is determined that the post-employment restrictive covenant is unenforceable” then the employer is liable for the employee’s “costs associated with arbitration,” “attorney fees and court costs,” and “actual damages.” Employers should carefully review their current employment agreements and consider the limitations and restrictions imposed by the Act when entering into future non-competition agreements, and when contemplating steps to enforce them in litigation. The Act consists of a scaled-down version of the bill (HB 251) which is much better for Utah businesses than the original bill. The original bill sought to prohibit most post-employment restrictions. Under the Act, Utah businesses are still able to establish post-employment limitations on competitive activities for proper reasons. State law governs most post-employment restraints, and since the rules vary significantly by jurisdiction, restrictive covenants must reflect the limitations acceptable under the law likely to control. The covenant not-to-compete must define the scope of prohibited activities, where the prohibition applies, and how long it will last. The reasons that the company requires protection against unfair competition should be stated, such as employee access to confidential information; relationships with customers, suppliers, and others; and/or knowledge of operations, plans, finances, etc.

Fundamental Employee Rights

Absent a covenant not to compete or breach of a confidential relationship, employees may plan to compete with their employer while still employed and can leave employment and compete with a former employer.

Protectible Interests of Employers

When an employee’s position enables the employee to learn proprietary information, the employee’s departure exposes the business to unfair competition by the former employee because knowledge of his former employer’s confidential information, operations, and customers may provide an undue advantage. In most jurisdictions, employers have a limited right to protect against such competition, and restrictions that are reasonably necessary to protect an employer are valid. Any ambiguity in a post-employment agreement will be construed in favor of the employee. In suits to enforce restraints, employers bear the burden to show that the restraint is no greater than necessary to protect a legitimate business interest; is not unduly harsh in curtailing an employee’s ability to earn a livelihood; and is reasonable. Prohibiting a former employee from employment in any capacity by a competing company is often deemed unreasonable. When an employee is hired, it is appropriate to obtain a representation that the employee is not covered by any agreements restraining the employee’s right to perform the duties of the position, and that the employee will not disclose any former employer’s confidential information.

Consideration for Enforceable Agreement

An agreement must have consideration flowing to the employee. Accepting employment at-will is sufficient consideration to support a restrictive agreement by an employee. But if the only consideration for the agreement is the employment itself, courts diverge on whether an enforceable agreement restricting post-employment competition must be signed before employment commences. In some states, although an employer never mentioned at the time of hiring that there would be any post-employment restrictions on competition, courts will enforce a covenant signed after employment commenced. In other jurisdictions, non-compete agreements are void for lack of consideration when employers fail to include them in the original terms of employment. Even in states where continued employment is insufficient consideration for a covenant signed after an employee began working, when the agreement is supported by independent consideration, it will be enforceable. A wage increase, a bonus, a new benefit, or a change in status can be sufficient consideration for covenant agreed to after employment commences.

Reasonable Restraints

Lack of durational and geographic limitations renders an agreement void. A former employee’s agreement not to compete against his ex-employer will be upheld if the restraint is no wider geographically and no longer in duration than reasonably necessary to protect the business of the employer. Determining the reasonableness of a restraint requires an examination of surrounding circumstances, including the nature of the employer’s business, the subject matter, the purpose served, the situation of the parties, the nature of the former and subsequent employment of the employee; whether the employee is highly skilled or unskilled; and whether the covenant is necessary to prevent the solicitation of customers.

Employee Solicitation

Most courts will enforce contractual agreements restricting a former employee from poaching employees after the employment relationship ends. Such agreements, like covenants not to compete, must be supported by consideration.

Effect of Termination

Some states deny enforcement following a termination, depending whether termination was for cause or not. In such jurisdictions, if the employer has materially breached the employment agreement in terminating the employee, courts will not enforce a post-employment restraint. In some jurisdictions, courts will not enforce restraints against employees terminated without cause. By its terms, the agreement imposing post-employment restraints should apply regardless of whether the executive resigns, or is terminated with or without cause. One strategy for promoting compliance and achieving enforcement is to tie the period of the restraint to a severance package. In circumstances involving a termination without cause, where a severance package will be paid over time, severance payments may be conditioned upon compliance with the post-employment restraint.

Injunctions

A prompt injunction precluding competition by a former employee is usually the essential relief to avoid competitive harm. In general, an employer seeking to enjoin a former employee from competing pursuant to a contract must establish four elements: likelihood of success on the merits; greater injury would result from not enforcing the agreement than from enforcing the restrictions; irreparable harm will occur unless the injunction is granted; and the public interest would be served by granting the injunction. The agreement should contain an acknowledgement that, because of employee’s knowledge and role in the company, a breach of the agreement not to compete would cause irreparable harm, the restraint would not prevent the employee from earning a living, and immediate injunctive relief to prevent the breach would be essential. The duration of an injunction may run from the date of the court’s order, or from the termination of employment.

Damages

Former employees may also be liable for monetary damages measured by the net revenue lost due to the competition, disgorgement of the employee’s profits, as well as other tort damages. Some jurisdictions will enforce a liquidated damage provision in an agreement not to compete, provided that they are not a penalty. Caution must be exercised, however, because in some jurisdictions, the presence of a liquidated damage clause may preclude injunctive relief.

A post-employment agreement should define what activities are prohibited, where the prohibition applies, and how long it will last, citing the reasons why protection is necessary. A prohibition against solicitation of customers is also valuable in preserving relationships with customers. Post-employment restraints should apply regardless of whether the executive resigns, or is terminated with or without cause. By linking the period of the restraint to the payout under a severance package an employer may increase the probability of compliance with the restraint, as well as the likelihood of success in its enforcement.
What Are Post-Employment Restrictions And Why Are They Tricky?
Post-employment restrictions (or restrictive covenants) are contractual clauses prohibiting employees from doing a specific thing after their employment ends, e.g. they must not join a competitor. PERs are void as an unlawful restraint of trade unless they go no further than necessary to protect the employer’s legitimate business interests. In other words, if PERs are not reasonable, they are void. Reasonableness depends on the specific facts of the case so it is inherently hard to predict whether a court will enforce the covenant. Even carefully drafted restrictions sometimes fail.
What kind of restrictions may be enforceable?
Reasonable PERs aimed at stopping misuse of the employer’s confidential information or business relationships can be enforceable.
To achieve this, employers may be able to prevent employees:
• joining competing businesses (non-compete clauses)
• poaching other employees (non-poaching clauses)
• soliciting customers and/or doing business with customers (non-solicitation clauses).
• Such PERs still must be reasonable in scope, area and duration.
How Can I Make Sure My PERs Are Reasonable?
• Use them sparingly, only where you have a compelling business need and make sure they are limited in time and space. Blanket restrictions for all staff will undermine your case.
• Identify exactly what information or relationships you are trying to protect specific to the particular job role.
• Choose the minimum type, area, scope and duration of PERs which is adequate to protect the specific information or relationships you have identified. One size does not fit all.
• Non-compete clauses are the hardest PERs to enforce. Only use them when no other restriction will do. This will help show you are reasonable.

Importance of an Employment Agreement

Employment Agreement are important for both employee and employer. It bonds both parties to do their duties and responsibilities. For an example: The basic duty of employee is to work for employer and Employer should pay employee according to work within certain time frame. Employment Agreement is legally definitions that state the relationship between two parties as Employer and employee. An employment Agreement will create a strong basis for protecting both your parties’ interest and the employee’s specific role in the company. It will hold details as the employee responsibilities, their health insurance policy, sick days, annual leave days, reasons for why their employment may be terminated, and much more. Generally, agreement of employment is poorly drafted and inadequate and in many cases there is verbal agreement that mean there is no written terms and condition. Such scenario may bring difficulties for parties.

Other are:
• Job security for Employee and Labor certainty for employer: This is most important purpose of employment agreement. A employment agreement includes the time frame about how long an employee is contracted to stay with the company, for example, two or five years. This ensures the job guarantee for employee where as Employer can be positive about staff dropping off job, as long as they do not violate the terms of the contract. The employment agreement should also specify exactly what actions can result in termination. Including this information ensures that each employee knows which activities are mandatory to their role and which actions or behaviors are against company policy and will result in dismissal. Condition for termination maintain ecosystem in between both employee and employer to be honest and genuine with each other. So in sense violation of term might lead to termination of employee, but employee can feel job security if both parties has signed employment contract.

• Understanding of duties (Employee and Employer): The very fundamental things an employment agreement will have is position and duties of the employee. This will assure employee about his/her day to day task or his/her ultimate goal. Agreement also helps employer to expect good performance from employee. If an employee is consistently underperforming and not meeting the agreement set out in their contract, their employer will have reason to take action. Employer also have responsibility to pay to employee, facilitates with different incentives, bonus or benefits. The pay rates, income, benefits bonus etc should be clearly mention in contract and employer should follow accordingly as a duty.
• Key to Protect Employee Right: The employment agreement is a right savior for employee. Basically agreement should be drafted according to Employment Act, different countries follows different Act. Agreement determines you wages and how often you will be paid and again it also includes about overtime and many other dimension. As an employee you should know about your right and make sure the contract covers it. But you should always find some time to know about Employment act in your place before signing agreement.
• Employment agreement is a best way to maintain trade secret or Confidentiality for employer: Employer have to provide access to confidential company information and data and even the trade secret formula. So including confidentiality terms in employee is best way to protect them with this clause in place, employees are prevented from disclosing sensitive or confidential information to others. This can include being released to the media or public, shared on social media, or being used for any other purposes. If an employee was to breach their contract in this way, their employer is able to take legal action against them. Employer may include different restrictive clauses like the non-competition, non-solicitation, non-dealing, and non-poaching clauses.
• Dispute Resolution: A good employment agreement reduces the disputes between two parties that minimize time and expense of a courtroom battle that neither party can afford. Contract bond employee and employer in certain boundaries that minimize the chances of disputes.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Medicare Defense Lawyer

Divorce Ogden

How Long Does A Garnishment Last?

Utah Provo DUI

What Are The Units Of A Private Placement Memorandum?

Utah Child Support Enforcement

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Utah State Employment Laws

Utah State Employment Laws

Utah employers have a great deal of leverage in the employment relationship and can fire employees for no reason (unless it’s a violation of someone’s protected status). But there are laws and regulations meant to even the playing field to a certain degree, such as minimum wage requirements and protections from harassment and discrimination.

Wrongful Termination in Utah

Employers who fail to follow at-will employment exceptions violate employment laws in the state and may find themselves involved in a lawsuit. In cases where an employee takes legal action against his or her employer, that person may be able to collect several different types of compensation if his or her case is successful. For instance, in employment law-related cases, an employee may be awarded front pay, back pay, reimbursement for attorney fees and punitive damages. The employee may also be able to go back to the position he or she was terminated from.

Breach of Contract

Employers who establish an employment contract with an employee are not subject to Utah’s at-will employment laws. In addition to recognizing written contracts, the state also recognizes implied employment contracts based on oral agreements, any statements that are outlined in an employee handbook and any action displayed by employers that illustrate their intention to not fire at will. For instance, employers might have an implied contract if they promise an employee that as long as he or she performs well, he or she will remain employed. Employers who terminate an employee without good cause when an employment contract is in place may face legal action on behalf of the terminated worker.

Discrimination

Most wrongful termination cases develop when discrimination is involved. In Utah, employers are not allowed to terminate an employee based on national origin, race, color, sex, religion, pregnancy, disability or age. They are also not permitted to terminate an employee based on HIV or AIDS status, genetic information, sexual orientation or gender identity. All employers in the state are required to comply with these laws if they have at least 15 employees.

Retaliation

Employment laws in Utah make it illegal for employers to retaliate against an employee when he or she asserts his or her rights as a worker. For instance, if an employee files a complaint with HR on the basis that he or she was passed over for a raise because of his or her age, the worker’s employer is not allowed to discipline or fire the employee for this action. Employers in the state are also not allowed to retaliate against an employee if he or she participates in the investigation of a discrimination complaint, regardless of who filed the initial complaint, or if that employee put forth effort to stop discriminatory practices in the workplace.

Public Policy

In Utah, employers are not allowed to terminate an employee when he or she exercises his or her right to meet civic obligations and certain personal responsibilities. For instance, employers are required to provide their employees with unpaid leave when they are summoned for jury duty. Employers who either penalize or terminate their employees who fulfill this public duty may be subject to a wrongful termination lawsuit.

If you have recently been fired or laid off and think your employer may have violated the law by letting you go, contact a Utah employment lawyer as soon as possible. Utah is generally an “at-will” employment state, meaning that an employee can usually be fired at any time for any reason, or even for no reason at all. However, there are several exceptions to the “at-will” employment rule, and an experienced Utah employment law attorney can explain your rights and determine whether or not you have a case. Being fired or dismissed from work is an unfortunate experience and many employees regard it as an “unfair” act of an employer. Employment wrongful termination occurs when an employee or worker is fired from a company for illegal or “unethical reasons”. So no matter how an employee looks at how “unfairly” he has been discharged, a termination becomes wrongful or illegal, for instance, if a violation against a federal law or statute has been made. However, other acts of an employer may also give rise to wrongful termination. A dismissed employee may file a wrongful termination claim under the following situations:

• When termination is based on discrimination involving issues of age, race, gender, religion, and disability
• When an employee is fired in retaliation to whistle blowing actions, worker’s compensation claim or for asserting his legal rights
• When one’s termination violates the normal firing procedures as stated in company handbooks, manual or in employment contract
• When an employer and other employees use defamation of character as reason for the dismissal of an employee
• When the dismissal is in violation of public policy in regards to local, state and federal laws and statutes
• Violation of implied contract laws
• When an employee is fired based on any negligent or undesirable action that he was not responsible for in any manner
• Through constructive discharge such as making working conditions intolerable for the worker

Filing a Wrongful Termination Claim

In consideration of the strict statute of limitation in a wrongful termination case, the claim must be initiated by a discharged employee right after his termination. The claim must be submitted, with all pertinent documents, to the Equal Employment Opportunity Commission (EEOC) with assistance from an employment lawyer.

The following documents are vital to one’s case and must be presented to an employment lawyer to pursue the claim:
• Employment contract, whether written or implied
• Company handbook and manuals
• Company memoranda and other related communication
• Documents related to past job performance
• Documentary evidence related to one’s termination
• Deposition statements of potential witnesses
Generally, the statute of limitation for the filing of claim is 180 days from the date of termination or 300 days from violations which are deemed part of federal and state civil rights violation as basis of one’s wrongful termination.

Typically, wrongful termination claims are filed for two main reasons:
• To be reinstated to past occupational position without any retaliatory action for filing upheld claims
• To seek compensatory and punitive damages for liable actions done by the employer
In most cases, liability in a wrongful discrimination claim can be established and proven by looking into possible violations made by an employer against existing federal and state laws, which a victim may sometimes find difficult to do for lack of legal knowledge. However, with the assistance of an employment lawyer, one may find justification for his claim and recover the rightful compensation that he deserves.

Steps for terminating an employee

 Let employees know where they stand: An employee shouldn’t be surprised that he or she is being fired. Whether the employee is not performing up to standard or does not work well within their team, you need to be clear about problems as they occur.
 Develop a plan and timeline for improvement: “After every discussion of this type with an employee, follow up with a written recap of the conversation in an email or on paper.” “State what is expected of the employee and when. Be encouraging. State you are confident the employee will make the necessary improvements, but also be clear on the possible consequences if the employee fails to improve.”

 Prepare documentation: If the employee fails to improve and will be terminated, have your documentation ready. You need to prepare a written notice of termination, and determine if a severance is necessary. Calculate the proper severance based on the total compensation the employee earned upon termination. If you have an employment contract, it is a good idea to verify if a termination clause settles the question of severance. “The severance depends on many criteria including the circumstances surrounding the hiring and firing, the employee’s age and experience, the position held and length of service with the organization.
 Hold a face-to-face meeting: “Never terminate an employee over the phone or by email.” Instead, be brief and to the point in a face-to-face meeting. Depending on the situation, you may want to have a witness. But don’t drag the employee’s colleagues into it. Choose a neutral party, such as the person responsible for human resources.
 Allow the employee to leave with dignity: After the firing has taken place, depending on the situation, the employee may be asked to stop work right away or be required to work a termination notice period. You should make sure a fired employee is allowed to leave with dignity. For example, there is usually no reason to prevent a departing employee from personally packing up his or her belongings and saying goodbye to coworkers. And there is certainly no need, under normal circumstances, to have someone escorted to the door by a security guard or supervisor. Additionally, if you have presented the employee with a severance offer, he or she should be given time to review the information you have provided. “You shouldn’t expect the person to respond right away, but should give them at least a few days to review the details, consult their advisors, and get back to you
 Get off to a good start for an easier end: Entrepreneurs have workers sign an employment contract when they’re hired. This should outline working conditions and severance to be paid in case of termination.

Written Employment Contracts

If you have a written contract or other statement that promises you job security, you have a strong argument that you are not an at-will employee. For example, you may have an employment contract stating that you can only be fired with good cause or for reasons stated in the contract. Or, you may have an offer letter or other written document that makes promises about your continued employment. If so, you might be able to enforce those promises in court.

Implied Promises

The existence of an implied employment contract an agreement based on things your employer said and did is another exception to the at-will rule. This can be difficult to prove because most employers are very careful not to make promises of continued employment. But implied contracts have been found where employers promised “permanent employment” or employment for a specific period of time or where employers set forth specific forms of progressive discipline in an employee manual. In deciding whether an implied employment contract exists, courts look at a number of things, including:
 duration of your employment
 regularity of job promotions
 history of positive performance reviews
 assurances that you would have continuing employment
 whether your employer violated a usual employment practice in firing you—such as neglecting to give a required warning, or
 whether promises of long-term employment were made when you were hired.

Breaches of Good Faith and Fair Dealing

If your employer acted unfairly, you may have a claim for a breach of a duty of good faith and fair dealing. Courts have found that employers breached the duty of good faith and fair dealing by:
• firing or transferring employees to prevent them from collecting sales commissions
• misleading employees about their chances for promotions and wage increases
• fabricating reasons for firing an employee when the real motivation is to replace that employee with someone who will work for lower pay
• soft-pedaling the bad aspects of a particular job, such as the need to travel through dangerous neighborhoods late at night, and
• repeatedly transferring an employee to remote, dangerous, or otherwise undesirable assignments to coerce the employee into quitting without collecting severance pay or other benefits that would normally be due.
Some courts don’t recognize the “good faith and fair dealing” exception to at-will employment. And some states require that a valid employment contract exists before employees can sue for a breach of good faith and fair dealing.

Violations of Public Policy

It is illegal to violate public policy when firing a worker—that is, to fire for reasons that society recognizes as illegitimate grounds for termination. Before a wrongful termination claim based on a violation of public policy will be allowed, most courts require that there be some specific law setting out the policy. Many state and federal laws have specified employment-related actions that clearly violate public policy, such as firing an employee for:
• disclosing a company practice of refusing to pay employees their earned commissions and accrued vacation pay
• taking time off work to serve on a jury
• taking time off work to vote
• serving in the military or National Guard, or
• notifying authorities about some wrongdoing harmful to the public (whistle-blowing).

Some states also protect employees from being fired for very specific reasons, like service as an election officer or volunteer firefighter. Some courts have also held that employers cannot fire you because you took advantage of a legal remedy or exercised a legal right—such as filing a workers’ compensation claim or reporting a violation of the Occupational Safety and Health Act (OSHA).

Employer Lawyer

When you need legal help for your business in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Annulment Attorney

Bankruptcy Attorney

Hotel Owners Workers Compensation Claims

How Do I Stop A Garnishment In Utah?

Family Attorney Lawr

Perry Bsharah, Esq.

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Antitrust Lawyers

Antitrust Lawyers

Antitrust refers to the regulation of the concentration of economic power, particularly with regard to trusts and monopolies. Antitrust laws exist as both federal statutes and state statutes. The three key federal statutes in Antitrust Law are the Sherman Act Section 1, the Sherman Act Section 2, and the Clayton Act. Section 1 delineates and prohibits specific means of anticompetitive conduct, and Section 2 deals with end results that are anti-competitive in nature. Sections 1 and 2 supplements each other in an effort to outlaw all types of anticompetitive conduct. The Clayton Act regulates the mergers or acquisition of the companies together with the guidelines published by the Department of Justice and the Federal Trade Commission. As for the states, many have adopted antitrust statutes that parallel the Sherman Antitrust Act to prevent anticompetitive behavior within individual states. Penalties for violating the Sherman Act can be both criminal and civil (most enforcement actions are civil). Criminal prosecutions are limited to intentional and clear violations (ex. price-fixing and rig bids). Criminal penalties for corporations can reach up to $100 million and $1 million for individuals with up to 10 years in prison. Additionally, the maximum fine may be increased to twice the amount the conspirators gained from the illegal act or twice the amount of money lost by the victims of the crime if either of those amounts is over $100 million.

Why Antitrust Laws Matter?

The antitrust laws are supposed to promote and protect competition, or, if you will, competitive processes in distinct “lines of commerce” or “relevant markets.” This alone is their proper purpose. They are not intended to punish big companies merely on account of their size or because of their commercial success. Most importantly, the antitrust laws have never been anti-market or anti-business in their underlying conception or in their implementation. On the contrary, the antitrust laws are intended to promote market economics and healthy competition in every market, while checking the abuses that sometimes arise in different markets. The idea behind these laws is that in every market there should be robust competition: If in each market there are many sellers busily competing against one another to sell a particular kind of product or service to paying customers, no seller will be able to take unfair advantage of the buyers, but rather each seller will be obliged to offer its goods or service on attractive terms, and each will be responsive and efficient in its dealings with buyers, who otherwise will simply turn to another, better seller. In other words, vigorous competition in any given market keeps the sellers honest, forcing them to strive continually both to improve their goods and services and to offer them on favorable terms. Customers benefit from this competition. Poorly run companies are run out of business, as they deserve to be. The better run companies and the most honest ones too, tend to prosper. Society as a whole benefits. This is nothing other than marketplace economics working properly and rewarding each of us for our efforts, our talent, and our perseverance. The antitrust laws exist to help marketplace economics to work better.

The antitrust laws serve to promote and protect market economics, doing so on the theory that society flourishes the most when it is founded on vigorous competition. Antitrust laws are meant to ensure that these incentives and the resulting excellence and low prices flourish in every market (save those that by their very nature admit the presence of only one seller). The antitrust laws exist not to punish or dismantle successful, prosperous companies, even the most dominant global monopolies of the era. These laws instead are meant to redress or temper the fundamental flaw that seems inherent in unbridled competition. That is, the antitrust laws serve to “correct” the inherent contradiction of market economies. In many key markets, one firm or a clutch of major firms often come to dominate the entire market. Once this happens, competition in this market ceases altogether or at best becomes a pale shadow of its former self. Antitrust laws provide protection and relief from this scenario. If competition obliges sellers to act on their best behavior, then the antitrust laws oblige dominant competitors to do the same rather than abuse their dominance in order to take advantage of their captive customers. The only other alternatives are as follows:
• Do nothing and allow various anti-competitive monopolies and cartels to form and suffocate commerce, innovation and responsive service in the markets that they control; or
• impose stultifying government regulation.
More specifically, the antitrust laws serve to check and redress the improper acquisition and abuse of market dominance. In particular, these laws forbid two categories of conduct:
• monopolization — i.e., the use of “anti-competitive measures” to acquire, preserve or enlarge monopoly power in a given market; and
• unlawful restraints of trade — i.e., conduct jointly undertaken by two or more independent actors that unfairly suppress “competition on the merits” in a given market, leading to higher prices, worse service, lack of innovation or loss of choice.

What Antitrust Laws Try to Accomplish

Antitrust laws, properly understood, are intended to grapple with this market contradiction. In particular they forbid any improper monopoly or any attempt to obtain a monopoly by improper means that is, a monopoly obtained, preserved or attempted by a firm that on purpose has destroyed or tried to destroy its competitors, using anti-competitive tactics whose sole or true purpose has been to undermine rival businesses. The antitrust laws also forbid dominant firms to act in collusion in order to impose unfair commercial practices that tend to subvert “competition on the merits” in any market that they dominate or aim to dominate by means of the improper practice. These laws also outlaw specific kinds of recognized commercial fraud that by their very nature are calculated to destroy competition in the market in which they are employed (the most notable offenders are bid-rigging, price-fixing, and horizontal market allocation).

The Charter Principles of Antitrust Law

Broadly speaking, the antitrust laws set forth a series of general propositions that serve as the “charter principles” of marketplace economics in the United States.

• Monopolization: A monopoly is not unlawful, but obtaining or maintaining monopoly power by anticompetitive means constitutes a serious antitrust offense. Specifically, a defendant firm can be held liable for unlawful monopolization in violation of Section 2 of the Sherman Act if the following matters are proved against it: First, that the defendant firm holds monopoly power in a properly defined relevant market which can be proven by direct evidence of the defendant’s ability to impose supracompetitive prices or by a showing that the defendant makes a dominant percentage of overall sales, and that its market share is protected by strong barriers to entry and expansion. by new rivals as well as strong barriers to expansion by existing rivals; and second, that the defendant firm has acquired or maintained its monopoly power by means of anticompetitive practices which broadly speaking are business practices that the defendant employs to undermine its rivals and obstruct their ability to compete against it rather than to improve its own offerings. If the government proves these points, it will prevail. If the plaintiff is a private litigant, it must also prove its own antitrust injury which means harm that it has suffered in proximate consequence of an anticompetitive aspect of the challenged anticompetitive conduct.
• Attempted Monopolization/Conspiracies to Monopolize: It is also improper for a firm to attempt to acquire a monopoly by means of anticompetitive business practices. Specifically, a defendant firm can be held liable for attempted monopolization in violation of Section 2 of the Sherman Act if the following points are proved against it. First, that the defendant firm has employed anticompetitive practices with the specific intent of acquiring a monopoly position in a properly defined relevant market; and second, that there exists a “dangerous probability” that the defendant will succeed in the effort unless there is an antitrust intervention. A private litigant must also prove its own antitrust injury. The last of the monopolization offenses is called a “conspiracy to monopolize.” This offense is said to occur when two or more independent, unaffiliated economic actors conspire to confer monopoly power on a single firm by means of anticompetitive practices. Each conspirator must take at least one act in furtherance of the common plan to obtain monopoly power by means of anticompetitive practices. As in all antitrust cases, a private litigant must prove its antitrust injury in order to establish a claim for this offense.
• Restraints of Trade: It is also illegal under the antitrust laws for two or more independent, unaffiliated firms to act in concert to employ commercial practices that harm competitive processes in a properly defined relevant market. There are three categories of unlawful trade restraints:
1. Restraints that are unlawful per se;
2. Restraints that are condemned under the so-called “Rule of Reason; and
3. Restraints that are condemned under the “quick-look” doctrine.
• Per Se Offenses: It is always improper for two or more direct competitors to set or manipulate the prices that they charge their customers. The offense is called horizontal price-fixing. Nor can competitors pre-arrange bids at competitive auctions or in response to bid-solicitations (bid-rigging); nor can they allocate among themselves parts of a market by customer, territory, specified contracts or product line (horizontal market allocation); nor can they coordinate horizontal group boycotts (a coordinated refusal to deal with a supplier, customer or competitor in order to deprive it of supplies or facilities that it requires to continue competing in a given line of commerce); nor in certain cases can they provide a commercially indispensable product or service only on condition that the buyers also purchase another product or service (unlawful tying). These practices, however ingeniously characterized, are usually treated as per se antitrust offenses. Per se restraints are usually imposed by direct competitors that collectively wield market power. The classic per se violation is price-fixing imposed by large firms in highly concentrated markets. An emerging doctrine is that trade restraints should be deemed unlawful when they are “naked” but not when they are “ancillary.”
• The Rule of Reason: Business dealings between companies can be condemned as trade restraints under the rule of reason only if the following matters are proven:
 The plaintiff must show that the challenged practices have caused harm to competition in a properly defined relevant market;
 if the plaintiff makes this showing, the defendants must then show that the challenged practices serve a legitimate, important business purpose; and
 If the defendants make this showing, the plaintiff must show that the claimed business purposes are a mere pretext or that they could be reasonably accomplished by less restrictive practices. If the plaintiff makes this last showing, the judge or jury must then decide whether the challenged practices on balance cause more harm to competition than they fulfill legitimate commercial aims. “Harm to competition” usually means practices that suppress or restrict competitive rivalries that would otherwise yield lower prices, better products, more products or a wider variety of products in the relevant market.

• The Quick-Look Doctrine: Business dealings can be condemned as trade restraints under the “quick-look doctrine” when they are novel or little known practices that appear to be “obviously” inimical to competition on the merits, no matter how the relevant market is defined.
• Other Offenses: There are other, more technical wrongs that likewise constitute antitrust offenses: For example, it is an antitrust offense under Section 3 of the Clayton Act for two or more firms to use exclusive-dealing arrangements, if the arrangements will probably foreclose a substantial part of overall sales in a relevant market for an extended duration and thereby prevent rival sellers from making enough sales to attain sufficient economies of scale. It is sometimes unlawful under the Robinson-Patman Act for a firm to charge different prices for the same goods when selling them to different commercial customers, but only if the practice causes harm to competition in the seller’s own market, its customers’ markets, or in tertiary markets. It is likewise unlawful for a commercial buyer to induce a seller to commit these offenses. These offenses are called unlawful price discrimination.

Federal Antitrust Laws, And What Do They Prohibit?

There are three major federal antitrust laws: The Sherman Antitrust Act, the Clayton Act and the Federal Trade Commission Act.
• The Sherman Antitrust Act has stood since 1890 as the principal law expressing our national commitment to a free market economy in which competition free from private and governmental restraints leads to the best results to the consumers. Congress felt so strongly about this commitment that there was only one dissenting vote to the Act. The Sherman Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate trade. This includes agreements among competitors to fix prices, rig bids and allocate customers. The Sherman Act also makes it a crime to monopolize any part of interstate commerce. An unlawful monopoly exists when only one firm provides a product or service, and it has become the only supplier not because its product or service is superior to others, but by suppressing competition with anticompetitive conduct. The Act is not violated simply when one firm’s vigorous competition and lower prices take sales from its less efficient competitors; rather, that is competition working properly. Sherman Act violations are punished as criminal felonies. The Department of Justice alone is empowered to bring criminal prosecutions under the Sherman Act. Individual violators can be fined up to $350,000 and sentenced to up to 3 years in federal prison for each offense; corporations can be fined up to $10 million for each offense. Under some circumstances, the fines can go even higher.
• The Clayton Act is a civil statute (it carries no criminal penalties) that was passed in 1914 and significantly amended in 1950. The Clayton Act prohibits mergers or acquisitions that are likely to lessen competition. Under the Act, the government challenges those mergers that a careful economic analysis shows are likely to increase prices to consumers. All persons considering a merger or acquisition above a certain size must notify both the Antitrust Division and the Federal Trade Commission. The Act also prohibits certain other business practices that under certain circumstances may harm competition.
• The Federal Trade Commission Act prohibits unfair methods of competition in interstate commerce, but carries no criminal penalties. It also created the Federal Trade Commission to police violations of the Act. The Department of Justice also often uses other laws to fight illegal activities, including laws that prohibit false statements to federal agencies, perjury, obstruction of justice, conspiracies to defraud the United States and mail and wire fraud. Each of these crimes carries its own fines and imprisonment terms which may be added to the fines and imprisonment terms for antitrust law violations.
What Does an Antitrust Lawyer Do?
An antitrust lawyer is employed by individuals, businesses, and the government to make sure that companies follow antitrust laws. Some activities include:
• Counseling your business for antitrust laws
• Representing you in a claim or lawsuit
• Conducting internal corporate investigations
How Can an Antitrust Lawyer Help Me?
You may want to prevent future legal issues by hiring an antitrust lawyer advise your business transactions. A lawyer can give antitrust counseling, such as in a distribution agreement, a joint venture or merger. An antitrust lawyer can also represent you if your business is accused of violating antitrust laws. An antitrust lawyer can represent you in a lawsuit or help you form a class action, such as if:
• You’re a business owner unable to survive because one company has monopolized your industry
• You’re a consumer that’s paying more because one company is raising prices unfairly
Antitrust violations are difficult to prove, you need to show that one company is affecting the entire market by trying to run out all the other business. This makes it important to find a lawyer who’s an expert in antitrust laws and knows how to prove a violation. Your lawyer should be able to advise you whether or not the case is worth your time or money since such cases are difficult to win.

How Much Does an Antitrust Lawyer Cost?

Typically, antitrust attorneys charge by the hour. Some may charge on a contingency basis, which means that you’re billed a percentage only if you win your case. If you don’t win, your lawyer won’t receive any payment. Since a lawyer runs the risk of not being paid, it’s likely you will only be charged a contingency if you have a very strong case. Negotiate a rate up front so that you know what to expect.

What Should I Expect When Working with an Antitrust Lawyer?

An antitrust Lawyer should be honest about your chance winning your case and how long the process will take. If you do end up going to court, it’s a long and expensive proceeding. Even though your Lawyer will be able to guide you, you have to commit a lot to the case. Expert testimonies are necessary and will add additional costs. Antitrust cases are often class action suits, so the burden is shared among a group. Although it’s possible for you to win a large settlement, a very likely result is a lot of time and effort with no result. An antitrust Lawyer is the most qualified to advise on your best plan of action, so it’s best to consult with an attorney if you think you have a valid case.

Utah Antitrust Lawyer

When you need a Utah antitrust attorney, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Why Would You Avoid Probate?

Attorneys West Valley City Utah

Can I File For Bankruptcy If I Make A Lot Of Money?

Spanish Fork Utah Divorce Attorney

Utah Criminal Code 76-5-111.1

Pleasant Grove Utah Divorce Attorney

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Employer OSHA Law

Employer OSHA Law

The Occupational Safety and Health Administration (OSHA) is a federal agency that establishes rules and handles matters relating to workplace health and safety. The agency also investigates employee complaints in order to determine whether regulations have been violated. The Occupational Safety and Health Act of 1970 set forth the regulatory framework under which Occupational Safety and Health Administration (OSHA) operates. Violations typically result in fines. The Act provides a number of rights to employees pertaining to their well-being, including protections against retaliation:
• Working conditions that are free from risk of serious harm
• Access to clear information (in layman’s terms) on potential safety and health hazards in the workplace
• Access to documentation (for review) on any illnesses or injuries pertaining to the job site
• Ability to make a confidential complaint with OSHA, and to request an inspection
• Freedom to be involved in a requested OSHA inspection
• Access to copies of any tests conducted at the work site related to potential workplace hazards
• Freedom from retaliation or discrimination in relation to OSHA complaints
The agency, created as part of the U.S. Department of Labor in 1971, has five general priorities:
1. Reports of imminent dangers
2. Fatalities & accidents involving the hospitalization of more than three workers
3. Employee complaints
4. Referrals from other government agencies
5. Targeted inspections

OSHA Law

Unless you are self-employed or fit one of the other narrow exceptions, you have the right to file a complaint against your employer for OSHA violations. If that employer takes adverse action soon after such a complaint is filed, such as a demotion or termination, the employee may have a whistleblower claim. A whistleblower is an employee who alerts the authorities about a potential violation of the law or the public trust. Since an OSHA violation may involve any number of existing federal laws, the time limits for filing a claim depend on that particular law. For instance, a railroad worker has 180 days in which to file a complaint under the Federal Rail Safety Act, while an employee has just 30 days in which to file a Clean Air Act complaint. If any adverse action is taken after filing such a complaint, you may file a whistleblower claim with OSHA within 30 days. How to respond in the face of a safety or health hazard in the workplace largely depends on whether it poses an imminent risk. If it indeed poses an imminent risk, the employee has the right to refuse that particular work-related task. The employee also has the right to refuse to return to work until the hazard is corrected. But if there is no imminent threat, the employee first should inform the employer of the problem — in writing. If the problem is not fixed within a reasonable amount of time, or if the employee experiences significant resistance, then a complaint may be filed with OSHA (or the appropriate agency). Remember, your employer may not legally retaliate against you for complaining of an OSHA violation. OSHA grants workers a host of rights designed to protect workers from injury, illness and death. Here is a sampling of your rights under OSHA:
• You cannot be fired or retaliated against for rightfully asserting any of your OSHA rights.
• If your workplace poses an imminent threat to your life, you have the right to refuse work.
• Your employer should inform you of your OSHA rights.
• You can get training from your employer on the health and safety standards that apply to you.
• You can request information from your employer regarding OSHA standards that apply to you.
• You can ask your employer to cure any OSHA violations without fear of retaliation.
• You can file a complaint with OSHA regarding workplace safety concerns.
• You can request an inspection of your workplace for any OSHA state plan violations.
• You are entitled to see the results of any such investigation or inspection.

If you are injured on the job, here are some of the basic steps you should follow as quickly as possible to avoid further injury to yourself and others:
• Seek medical attention: It goes without saying that your first priority is to seek any medical help that you require.
• Notify your employer of dangerous conditions: The next step is to notify your employer of the injury and of any dangerous conditions that still exist.
• File a claim for workers’ compensation: Immediately file your workers’ compensation claim to be compensated for your medical bills and other losses suffered as a result of the injury.
• If your employer doesn’t remedy the danger, file a complaint with OSHA: If your employer doesn’t remedy the threat to worker safety, file a formal complaint with OSHA and/or any related state agency. OSHA maintains a list of approved OSHA state plans.
• If you are retaliated against or fired, contact OSHA and consider a lawyer: OSHA explicitly protects workers from being retaliated against or fired. If your employer harasses you, demotes you or otherwise retaliates against you, immediately contact OSHA and consider hiring a lawyer.
What Businesses Does OSHA Inspect?
OSHA is responsible for making sure its standards are being met by businesses. Notwithstanding, it is impossible for them to inspect every business. The government schedules OSHA inspections as follows:
• Programmed Inspections: Regularly scheduled inspections that are in “high hazard” industries
• Investigation of Imminent Dangers: Any condition or practices that could reasonably be expected to cause death or serious physical harm to employees.
• Investigation of Complaints: OSHA has a responsibility to investigate complaints made by employees or cases referred to them.
• Faulty and Catastrophe Investigations: Any work-related incident that results in the death of an employee or the in-patient hospitalization of three or more employees must be investigated.
How are OSHA Inspections Conducted?
Inspections are conducted by compliance officers. They typically are done without advance notice by state compliance inspectors. Although a prior announcement isn’t necessary, workplace inspections generally must be conducted at a reasonable time, typically during the employer’s normal work hours, and in a reasonable manner. When an OSHA compliance officer arrives at your workplace to conduct an inspection, you have the right to request their warrant. If they cannot provide you with their warrant, you have the right to deny entry. OSHA may get a warrant from a judge. If you allow them entry without asking for a warrant, or let them conduct their search despite not having a warrant after you’ve asked for one, you voluntarily consent to the search. Businesses who are considered low-risk industries may be eligible for the small business exemption. Businesses with 10 or fewer employees are exempted from programmed inspections so long as they have an occupational injury lost workday rate lower than the national average. The national average is published by the Bureau of Labor Statistics.
Defenses to OSHA Violations
You can defend against a citation by showing any of the following:
• You lacked knowledge of the violation;
• Compliance with the standard was impossible or not feasible;
• The violation was caused by an unanticipated employee violation of your work rule;
• No employees were exposed to a hazard; and
• Compliance with the standard would have greater a hazard to employees.
When unsafe working conditions place the life of a worker in imminent danger, the worker should report the dangerous condition to OSHA. The worker also has the right to refuse to work if:
• There is a reasonable and good faith belief that a condition in the workplace poses an immediate and substantial risk of serious physical injury or death;
• The employer will not fix the dangerous condition;
• The immediacy of the danger does not allow enough time to report the condition to OSHA or the appropriate state agency; and
• The worker did not have a reasonable alternative.
The worker can refuse to return to work until the employer eliminates the danger or investigates and determines that no imminent danger exists. If a dangerous condition does not create the risk of imminent danger, the employee should inform the employer of the problem in writing. If the employer fails to correct the condition, the worker can file a complaint with OSHA or with the appropriate state occupational safety agency. OSHA regulations and many state laws prohibit an employer from retaliating against a worker that reports a violation. This means the employer may not fire, demote, or reduce a worker’s pay because the worker filed a complaint about unsafe working conditions. A determination of employer retaliation by OSHA can result in the reinstatement of the worker to their former position and an order for compensation for lost wages.

Types of OSHA Violations

The Occupational Safety and Health Administration, or OSHA, enforces workplace safety in the United States. Businesses and work sites are subject to periodic OSHA inspections, and employee safety complaints can also trigger OSHA inspections. These inspections may detect violations of OSHA codes that range from minor to extremely hazardous. There are six specific categories of OSHA violations, each of which carries either a recommended or a mandatory penalty.

What Is A De Minimis OSHA Violation

A de minimis violation is a technical violation of OSHA rules that have no direct impact on health or safety. It is the least serious class of violation, and inspectors do not levy fines or issue OSHA citations for these violations. Inspectors verbally inform employers about de minimis violations and list them on the employer’s case inspection file. A ladder with 13 inches between rungs rather than 12 inches is an example of a de minimis violation.
Other-than-Serious Violations
A violation of OSHA rules that would not usually cause death or serious injury but that is nevertheless related to job safety or employee health is considered an other-than-serious violation. According to the United States Department of Labor, the maximum penalty for each such violation is $13,494. However, inspectors can choose not to levy a fine, or to reduce the penalty by as much as 95 percent. Inspectors make decisions about penalties based on factors such as the size of the business and the cooperativeness of its owner. Failure to provide copies of safety regulations and failure to post required documentation in work areas are considered other-than-serious OSHA violations.
Serious Violations
When an employer knows of or should know of a situation that has a definite chance of causing serious injury or death, but does not remedy it, OSHA issues a serious violation. Inspectors must assess OSHA fines of up to $13,494 for each serious violation, but they can adjust penalties based upon the seriousness of each particular violation, as well as the employer’s previous history, the size of the business, and the good faith of the employer. Failure to ensure that employees who carry heavy loads wear steel-toe boots is an example of a serious violation.
Willful Violations
The most serious violation category is willful violations, and it is reserved for intentional violations of OSHA rules or situations that show disregard for employee health and safety. According to Health Leaders Media, the minimum penalty for each willful violation is $9,639 and the maximum fine is $134,937. If an employee is killed, the maximum fine is $10,000, six months imprisonment, or both. Occupational Health and Safety Magazine shares that more and more state prosecutors are also pressing criminal charges in these cases. An example of a serious violation might involve a fatal crushing accident because the employer did not implement adequate safety procedures for equipment that had caused prior crushing injuries.
Repeated Violation
If an employer is cited for a particular violation, and a subsequent inspection reveals another identical or very similar violation, OSHA inspectors may cite the employer for a repeated violation. The maximum fine for a repeated violation is $134,937. However, if the employer contests the original violation and is awaiting a final OSHA decision, inspectors cannot consider a violation of the same type to be a repeated violation.
Failure to Abate Prior Violation
When an employer receives a violation citation, the citation includes a date by which the employer must remedy the situation. If the employer does not do so on or before the specified date, it may be liable for a fine of $13,494 per day from the day after the specified date until it remedies the condition.
General Exclusions
Most private sector employers and their employees in all 50 states are covered under OSHA. Unless you are certain that you are exempt from the act, you should assume that the standards apply to your business. Exclusions from OSHA include self-employed individuals, churches, federal and state governments and their political subdivisions. OSHA exempt industries include businesses regulated by different federal statutes such as nuclear power and mining companies, domestic services employers, businesses that do not engage in interstate commerce and farms that have only immediate family members as employees.
Record-Keeping Exemptions
Businesses with more than 10 employees must maintain OSHA injury and illness records unless OSHA classifies the business as partially exempt. If you have fewer than 10 employees during the year, unless OSHA or the Bureau of Labor Statistics says otherwise, you do not have to keep illness and injury records. Your business might classify as partially exempt if it meets OSHA’s low-hazard requirements. In this case, you do not need to keep records of injury and illness. Low-hazard industries include retail, finance, service, real estate and insurance. All employers must report to OSHA any workplace events that caused the death or hospitalization of three or more workers.
Multiple Employers
If you and another employer share the control of your employees, when violations or injury occur, you must determine who is liable for them. To determine which employer is responsible, OSHA considers who has the power to control the employee’s duties and to change her employment conditions, who pays the employees’ wages and who the employee views as her employer.
State Programs
In Section 18 of the Occupational Safety and Health Act of 1970, states are encouraged to establish and administer their own health and job safety plans. OSHA approves and monitors state plans. As of the date of publication, 22 states have developed OSHA-approved plans. The state plan must at least be as comprehensive as the federal plan. One benefit of state programs is that they might cover certain hazards that federal law does not address. Although most states adopt plans that are identical to federal law, the state might set different criteria for businesses that are exempt from state coverage. You can obtain information on your state’s job safety and health plan via OSHA’s website OSHA sanctions can be very severe and difficult to fight. If you are facing an investigation, a local employment attorney can help you meet OSHA requirements. If you were recently inspected, consult with an employment lawyer as the inspection is the beginning of a multi-step process and you may have some defenses. If you are dealing with dangerous working conditions or have been injured on the job you will benefit from the assistance of a legal professional. A lawyer can help determine your rights and help you decide whether you need to sue or will be better off negotiating with an employer. Contact a local employment attorney and let them help guide you to a better, safer working environment.

OSHA Lawyer Consultation

When you need an OSHA Lawyer to help your business, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Orem Utah Divorce Attorney

Does A Church Need A Lawyer?

Title Issues In The Foreclosure Process

Utah Code 76-5-102.6

Utah Estate Probate Process

Can My Husband Take My Retirement If We Divorce?

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Does A Church Need A Lawyer?

Does A Church Need A Lawyer

The short answer is yes – churches need lawyers in today’s world. In fact, it is not uncommon for churches to find themselves on the receiving end of a lawsuit. How well does your church handle the following issues that can result in litigation against churches?
• Screen and Train Volunteers: Bad things happen, even in very good churches. It is absolutely necessary to make sure your volunteers, especially those working with minors, have undergone background checks and are properly trained in their duties and responsibilities. Are your volunteers competent in First Aid? Is there a procedure in place for dropping off and picking up children? Do you have volunteers that know how to handle food allergies? What is the protocol for dealing with a fire or other emergency?

• Maintain Safe Facilities: Not maintaining church property in a safe condition is a top reason churches find themselves in a lawsuit. Are the facilities clean and free of tripping hazards? Are any sharp objects or dangerous chemicals within reach of children? Do doors get locked when rooms are not being used? Is their adequate lighting inside and outside the church? A lawsuit is all too likely to result when someone gets injured from an unsafe condition that the church failed to correct.
• Prevent Misuse of Church Vehicles: Motor vehicle accidents happen every day, and church vehicles are not immune. Every church that owns any type of automobile should have a well-drafted policy explaining who can use the vehicles and for what purposes. Keys to all vehicles should be properly stored and not turned over to anyone who fails to meet insurance requirements. Church members should never be allowed to borrow church vehicles for personal transportation needs.
• Have Clear Policies and Follow Them: Like any organization, churches should have policies in place governing how the church operates. Everything from personnel issues, to how members are accepted and dismissed, to how money is handled need to be explained in writing. While lawsuits by disgruntled church members are rare (as they should be), these types of claims will often be thrown out by a court if the church can show that it acted consistent with its policies.
• Honor Copyright Laws: Copyright violations are extremely common in our society, but churches must be extra careful to follow the law. Copyright law is extremely complicated, and it is best to consult with an attorney before making use of anything that might be protected by federal law.

Reasons Your Church Needs A Lawyer

• Every new church planter should talk to a lawyer familiar with churches, and ask about forming a corporation or similar entity. The legal risks are too high and the solution is relatively easy.
• If you are updating a corporate charter, constitution, bylaws, or similar governing document, talk to an attorney.
• If you haven’t updated your main governing documents in awhile, the church should touch base with an attorney. Hopefully, you have a relationship with a trusted legal advisor that you meet with every year. But if it’s been more than five years, please set aside an hour or two for a review.
• If you are updating your policy manual, it’s wise to have them reviewed by an attorney. If you don’t yet have a policy manual, you should’ve talked to a lawyer a long time ago.
• If the church is granting housing allowance to ministers, an experienced lawyer will help your decisions be supportable and defensible.
• If you’re making a major change in compensation or benefits to key staff, a quick review by a lawyer may save headaches down the road.
• If you are purchasing real estate, the church should use an attorney to make sure the deal doesn’t result in surprises (environmental contamination, zoning issues, etc.)
• If your church is going to terminate the employment of anyone, it is a good time to talk to an attorney. Non-ministerial employees are often subject to the same laws and regulations affecting other businesses. And while the Constitution gives churches broad leeway over “ministerial” employees, those decisions also have legal and political implications.
• A new or unusual fundraising method should be run by a lawyer who understands the charitable solicitation laws in the relevant areas. An improperly designed used-car donation program, eBay ministry, or commission-based solicitor can risk the church’s tax exemption.
• Any significant investment agreement should be reviewed by an attorney. Is the church issuing bonds? Engaging in creative financing? Offering interest? Expecting to receive a return on an investment? Developing real estate? Engage legal counsel.
• If the church is contacted by the IRS or the State or local equivalents, you should talk to an attorney, and have them respond.
• If your church receives communication about a zoning issue, it will be helpful to talk to an attorney before you make any response.
• If the church is contacted by an attorney representing someone else, you should respond through an attorney.
• If your church is engaged in church discipline, or removing members, talk to an attorney about your process. If you are contacted by an attorney representing a member, please have a church attorney respond.
• If your church becomes aware of allegations of sexual misconduct by any employee, contractor, volunteer or associate, contact an attorney immediately.
• If the sexual misconduct includes any person under 18 or over 65, contact an attorney immediately. In many states, ministers and other authorities are required to take very specific steps in a short timeframe. An attorney can make sure it is implemented properly.
• If any staff, contractor, or volunteer is alleged to have taken unfair advantage of an elderly, infirm, or disabled person, talk to an attorney immediately. Some states have implemented “elder abuse” laws similar to child abuse laws, with similar reporting requirements.
• If there is a potential conflict of interest transaction, it is helpful to involve an attorney before it is proposed and approved. Does it benefit staff, insiders, or key members in an unusual way? An attorney can make sure the discussion and record support the decision of the church.
• Does your church still have Trustees? It’s past time to talk to an attorney.

When Does A Church Need An Attorney?

When someone is starting or joining leadership in a religious institution, legal considerations are often towards the bottom of the priority list. However, religious institutions of all faiths need to be aware of areas where they may need advice from a licensed attorney in order to best serve their membership and carry out their faith. Here are some of the most common areas where a church or other religious organization should consult an attorney.
• Governing Documents: The majority of religious organizations operate under the direction of one or more governing documents. It is absolutely vital that these documents be kept up to date and reviewed on a regular basis. An attorney will be able to provide valuable advice and suggestions about what to include in these documents to give the maximum protection to the organization.
• Real Estate and Land Use: If your religious institution needs to move locations or expand its current location, an attorney will often be necessary. In this case, an attorney can help with reviewing your real estate transaction documents, determining whether your land use is permitted in the proposed location, or securing a variance or special use permit from the municipality if necessary.
• Employment: When hiring and firing lay employees, religious institutions must consider state and federal employment law. Discussing particular employment situations with an attorney before acting can save an organization thousands of dollars and an immeasurable amount of negative public perception. Further, an attorney can help prevent difficult situations in the first place by providing your organization with a clear and comprehensive employee handbook.
• Litigation: This is the obvious scenario where an attorney is needed. If a religious institution is presented with a lawsuit, it should immediately seek out an attorney with experience representing religious institutions, as the unique culture and issues in these types of lawsuits often call for a specialist. An attorney specializing in representing religious institutions will be able to better understand issues that are important to the organization, and will be familiar with the special challenges and opportunities presented.
• Denominational Relations: In today’s changing culture, many of the traditional denominations in Utah are changing also. It is inevitable that some congregations will feel called away from their past denominational affiliations for one or more reasons. When separation is being considered, it is vital to consult an attorney who is familiar with the process of leaving a denomination. Various legal issues will need to be considered before undertaking a separation and an understanding and knowledgeable counselor will ease the transition for all involved.
• Organizational Discipline: Many faiths have unique practices for disciplining individual members when necessary. However, there can be potential for some inter-organizational discipline practices to create legal issues. Having an attorney review organizational policy and provide advice on a particular issue can prevent unintended legal consequences.
• Advice on Current Legal Issues: As the culture changes rapidly, new legal issues arise frequently. Religious organizations must be prepared to operate in the light of these new realities. In these cases, an attorney will be an invaluable resource as a counselor who understands both the law and the client, and will be able to shed light on an otherwise confusing situation.

Church Governance And Property Disputes

Property and governance issues are often at the forefront in a church dispute:
• Governance issues: These often occur when there are struggles for control within a congregation or a church body. In nonhierarchical church bodies, disputes often arise between different factions who rival for control of the church.
• Control of church property: Disputes over property are usually a key issue when a church body splits. When a local church congregation breaks off from a larger church structure that is hierarchical in nature, disputes often arise over which body has rights in the church property.
All of these situations must be handled with the utmost care and sensitivity. Governance issues may result in religious employment litigation. When a church splits from a denomination, it is more than a matter of conflicting belief systems or leadership squabbles. Ownership of church buildings must be settled between a denomination and a congregation that is leaving that denomination. Possession and management of endowment funds may also be in question. It is often in the best interests of both sides to resolve the property or governance question without resorting to costly litigation. However, a desire to settle church building ownership or other questions of congregational control may not be enough to avoid a major lawsuit. It is critical to find a well-qualified attorney with experience handling church disputes, both to contain legal fees and to move forward with confidence toward a satisfactory resolution. Every church needs governing documents that define the organization’s scope and determine how it is run. Whether the church is organized as a religious nonprofit corporation or as a nonprofit association, a charter, bylaws, and other guiding documents are necessary for a wide variety of reasons, from basic operations to establishing proper tax treatment, managing assets, and controlling liability. As a church grows and evolves, it’s normal to need to make changes to governing documents.
There are some general steps that apply to each case:
• Take stock of existing documents: Many organizations, including churches, make the mistake of losing sight of their governing documents and discover conflicts only after they’ve become a real problem. Treating documents as living, breathing things is a helpful way to ensure that issues can be addressed. Doing so as a director is also an important part of satisfying one’s fiduciary obligations to the church. When changes do need to be made, it’s a good idea to review the entire document for any other improvements that could be made at the same time.
• Understand technical requirements: A particular governing document, like an incorporated church’s bylaws, typically will have a prescribed process for making amendments. In addition to these rules, changes to a particular document may be subject to state law or the rules of a church’s parent organization, if applicable.
• Reach a consensus: Following the church’s governing rules, the board or other leadership group should discuss why changes need to be made and proposals for new language. An attorney’s help is often necessary to ensure that proposed changes won’t create other problems.
• Document approvals: Regardless of how a church is organized it’s important that the leadership group’s approval of changes to its governing documents be memorialized in writing, either with meeting minutes or, if permitted, by a written consent. Certain types of documents, like corporate charters, may need to be submitted to the state before they will take effect.
• Notify applicable parties: If the church has relationships with outside organizations that rely on its governing documents, they will need to be provided with the updated versions. Banks are a common example of organizations that routinely refer to client governing documents to verify that formalities are satisfied.

Church Lawyer Consultation

When you need a lawyer for your church in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Personal Injury South Jordan Utah

UDRP Complaint

South Jordan Injury Lawyer

What Are Private Placement Securities?

Trucking Defense Attorney

Orem Utah Divorce Attorney

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

501 C 3 Law

501 C 3 Law

501c3 means that a particular nonprofit organization has been approved by the Internal Revenue Service as a tax-exempt, charitable organization. Charitable is broadly defined as being established for purposes that are religious, educational, charitable, scientific, literary, testing for public safety, fostering of national or international amateur sports, or prevention of cruelty to animals and children. A nonprofit organization with a tax-exempt status is not required to pay corporate tax on income that comes from activities that are sufficiently related to its purposes. There is a common misconception that a tax-exempt nonprofit organization is a 501c or 501c3 organization. In actuality, these letters and numbers refer to specific tax categories in the Internal Revenue Code.

Whether it is incorporated or unincorporated, a nonprofit organization is not automatically entitled to federal or state tax exemption. In order to be exempt, the organization is required to meet certain requirements and apply for tax exemption with the IRS and the state. It can become a state nonprofit organization to be exempt from certain state taxes but choose not to become a federal nonprofit organization. Once a nonprofit organization is incorporated, it can apply for federal tax exemption with the IRS or the state. To be eligible for tax-exempt status, the nonprofit must belong to one of the 28 categories of nonprofit organizations, such as research, trade, and religious organizations. After becoming a nonprofit corporation, it may apply for federal tax exemption. The process involves obtaining a federal tax identification number and applying for 501c or tax-exempt status with the IRS. For instance, a trade association will be granted a 501c6 status, while a community recreation organization will receive a 501c4 designation. While a 501c organization does not have to pay taxes on certain kinds of income, it may not be granted a charitable status that enables its donors to write off taxes. The tax-exempt status of a 501c3 organization is granted by the IRS.

Types of 501c3 Organizations

The federal tax code lists several different types of organizations that don’t have to pay income taxes. Here are some of the basic categories:
• Charities
• Hospitals
• Religious organizations
• Educational institutions
• Scientific organizations
• Literary groups
• Groups that test for public safety
• Groups that foster national or international amateur sports competitions

• Anti-cruelty organizations for animals and children
The federal government also classifies private foundations as nonprofit organizations. These types of organizations are largely philanthropic in nature. Because they invest some percentage of their fundraising dollars, the federal government has different rules that they must abide by to maintain their status as a nonprofit organization. Organizations that receive more than one-third of their support from gross investment income are considered private foundations. The IRS requires private foundations to submit detailed tax returns. A 501(c)(3) organization typically begins when a group of people share a common goal of starting a nonprofit organization to fill a need within their community. After carefully choosing a name for the organization, the founders get to work writing the articles of incorporation. The articles of incorporation must include the corporation’s name, contact information, purpose, registered agent, founding directors and information about shares of stock, because once they are filed, they become public record. In most states, founders file the form for the articles of incorporation with the Secretary of State’s office. Organizations usually have to designate an incorporator who signs and files the articles of incorporation with the proper authorities and pays the appropriate filing fee.

There may be separate forms for applying for federal or state tax-exempt status. Bylaws are separate and different from the articles of incorporation. The founding directors write the bylaws, which outline how the nonprofit runs, including the rights and responsibilities of officers and directors. Nonprofit organizations don’t have to file bylaws with the state, but they need to keep them in their files. The next step is usually to appoint a founding board of directors and to hold the first board meeting. After that, the board needs to follow up on obtaining all of the proper licenses and permits, and to open a bank account for the nonprofit’s funds.

Requirements to Maintain 501c3 Status

The government intends for nonprofit entities to remain nonprofit entities, so they set up some rules that tax-exempt organizations must obey in order to keep their tax-exempt status. Not knowing the rules isn’t an excuse for disobeying them. Those who try to blur or cross the line could end up with fines or face other legal consequences.
• Private benefit: Organizations that apply for tax-exempt status cannot serve the private interests, or private benefit, of any individual or organization besides itself past an insubstantial degree. Therefore, a nonprofit may not permit any of its income or assets to benefit insiders, such as board members, officers, directors and important employees.
• Nonprofits are not allowed to urge their members to support or oppose legislation. They may participate in a small amount of lobbying, but lobbying activities may not exceed a certain amount of the organization’s total expenses.
• Political campaign activity: A nonprofit organization may not financially support or endorse any political candidates verbally or in writing. They may not oppose candidates either. This rule applies to candidates at every level i.e. local, state and federal.
• Unrelated business income: Nonprofit organizations aren’t allowed to generate too much income from a purpose that is unrelated to the nonprofit. An organization that regularly operates a trade or business that is unrelated to the nonprofit and makes significant contributions to the organization would need to pay taxes.
• Annual reporting obligation: Nonprofit corporations still have reporting responsibilities, like the Form 990. They may also be responsible for things like tax on unrelated income, employment tax, excise taxes, and certain state or local taxes. Churches and other church-related organizations don’t need to report income.
• Operate in accord with stated nonprofit purposes: An organization that makes a big shift from being unprofitable to making money needs to re-file as a for-profit entity and to pay the applicable taxes.

Dissolving a Nonprofit Organization

It’s much easier to start a nonprofit than it is to dissolve it, and nonprofits must obey certain rules in dissolving their organizations. The intent is to dissuade people from starting nonprofit organizations, shutting them down after a time and keeping the profits for themselves. There are certain steps related to dissolving a nonprofit, and it’s best to gain the help of an attorney or tax professional. A nonprofit may only distribute assets to another tax-exempt organization. The board may vote to dissolve the organization, file dissolution papers with the state and the IRS, and select another nonprofit organization to which to transfer any assets. The board will need to pay all contractual obligations and debts before dissolving the nonprofit. If there aren’t enough assets to pay remaining debts, the nonprofit may need to file bankruptcy. The board could be held liable for not properly dissolving a tax-exempt organization. It’s important to remember that the government values nonprofit organizations for their commitment and sacrifice. The nonprofit savings in tax dollars are intended to serve the public in their communities, not to profit individuals or groups of individuals. The rules and regulations are designed with the intent that nonprofits will start out strong and enjoy long-term sustainability. Nonprofits that decide to close their doors for whatever reason don’t get to pocket any remaining funds. Organizations with 501c3 statuses span a wide variety of industries and service types. One of the main distinguishers of a public charity, at least according to the IRS, is that it isn’t a private foundation. There are many other things that they look for to approve companies for tax-exemption, and they place a heavy focus on revenue sources. The bulk of public nonprofit’s revenue must be provided by public donations or government entities, and one-third of the public donors must be composed of a broad range of backgrounds and classes. The IRS does allow that funds be obtained from individuals as well as companies, and it can also come from other types of charities. Individual donors can write off donations up to amounts that equal half of their yearly income while corporations can only deduct up to 10 percent of their income. There are many similarities between public and private nonprofit organizations, but there are specific differences that the IRS looks for when determining status. While most private organizations are run by families, the rules for a 501c3 charity demand that the majority of the company’s board members are not related. Private organizations aren’t known for their continuously active programs, which is another stipulation for public entities. While they may not technically be active, many private foundations fund the activities of public groups through the use of grants. However, their donor base is usually much smaller than their counterparts because they don’t face the same variety of restrictions. Donors also don’t receive the same deduction opportunities as the IRS limits the claims to 30 percent of their income. It’s not impossible for private foundations to earn 501c3 status, especially if they’re practices result in a hybrid organization, but they’re the smallest type of institution among tax codes. If they do in fact qualify, their donors are able to reap the same tax deduction benefits.

Restrictions on Activities

501c3 organizations face extensive restrictions that are much tougher than other 501c tax code categories. Some of these rules include:
• Individual members or leaders can’t benefit financially from the programs and activities of the organization;
• The assets of a dissolved company much transfer to another 501c3 organization and not to any one person;
• Lobbying should be limited and only use a small percentage of the budget.
• The IRS also prevents organizations from making official ties to political campaigns including candidate endorsements.
In order to obtain 501c3 status, the company or organization needs to complete and file Form 1023. Small entities or those with limited income can use the 1023-EZ Form if they meet the minimal requirements. The IRS requires companies with early earnings of $10,000 or more to pay an $875 filing fee. Organizations with lower revenues are only charged $400 for the application process, but certain entities, like religious institutions, can avoid the entire process as they aren’t required to apply.

The IRS Rule

The IRS uses what is called a facts and circumstances test to help it determine whether an organization has violated the prohibition on political campaigning. This means that the IRS will evaluate any potential misconduct within the context of the organization’s other activities and the current political climate. So, an activity might be considered political campaigning two weeks before an election, but not two years before an election. Some activities that the IRS has found to violate the prohibition on political campaigning include:
• inviting a political candidate to make a campaign speech at an event hosted by the organization
• using the organization’s funds to publish materials that support (or oppose) a candidate
• donating money from the organization to a political candidate
• any statements by the organization’s executive director, in his or her official capacity, that support a candidate
• criticizing or supporting a candidate on the organization’s website
• inviting one candidate to speak at a well-publicized and well-attended event, and inviting the other candidate to speak at a lesser function
• inviting all candidates to speak at an event, but arranging the speaking event or choosing the questions in such a way that it is obvious that the organization favors one candidate over the others
• conducting a “get out the vote” telephone drive in a partisan manner by selecting caller responses for further follow-up based on candidate preference, and using the organization’s website to link to only one candidate’s profile.

A 501(c)(3) organization can engage in the following activities without violating the IRS rule:
• Non-partisan activities: Your organization may engage in non-partisan activities such as non-partisan voter registration drives, non-partisan candidate debates, and non-partisan voter education, as long as these activities fulfill your exempt purposes.
• Legislative or issue advocacy. Your organization can engage in legislative advocacy and issue-related advocacy, as long as it follows certain rules and steers clear of political campaigning. (If your organization is contemplating such activities, it’s a good idea to get advice from a qualified attorney.) And don’t forget that any individuals associated with a 501c3 organization are entitled to voice their opinions and participate in a political campaign, as long as they are not speaking for the organization.

Penalties For Violations

If the IRS believes that your organization may have violated the prohibition, it may send a letter or visit your organization for an on-site examination. Although the IRS has the power to revoke your tax-exempt status, it typically uses this punishment only in the most egregious cases. More likely, the IRS will ask your organization to correct the violation and implement procedures to make sure the violation will not occur again. If the organization’s funds were used to engage in the prohibited activity, the IRS may also impose excise taxes.

501c3 Law Attorney

When you need a lawyer to help you with a 501(c)(3) non-profit entity, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Magna Utah Divorce Attorney

What Bank Accounts Cannot Be Garnished?

Utah Code 76-5-102.8

UDRP Complaint

South Jordan Injury Lawyer

Grantsville Utah Divorce Attorney

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Business Succession

Business succession planning is the process in which long-term needs are identified and addressed. The main concern in succession planning is in providing for the continuation of business operations in the event that the owner or manager retires or suddenly becomes incapacitated or deceased. This can occur by several means, such as transferring leadership to the following generation of family members or by naming a specific person to become the next owner. It is highly advantageous to have a business succession plan. Such a plan can create several benefits for the business, including tax breaks and no gaps in business operations. The plan will be formally recorded in a document, which is usually drafted by an attorney. A business succession plan is similar to a contract in that it has binding effect on the parties who sign the document and consent to the plan. Therefore, the main advantage of having a succession plan is that the organization will be much better prepared to handle any unforeseen circumstances in the future. A well thought out succession plan will be both very broad in scope and specific in detailed instruction. It should include many provisions to address other concerns besides the issue of who will take over ownership.

A business succession plan should include

• Approximate dates or time frames when succession will begin. For example, the projected date of the owner’s retirement. Instructions should also be composed for steps to take as the date approaches.
• Provisions for what should occur in case of the owner’s unexpected incapacitation, such as in the event of severe illness or death. A replacement should be named in these provisions, and you should state how long their responsibilities will last (i.e., permanent or temporary).
• Identification of who will be the next successor or a guideline for how election should occur, and instructions to ensure a smooth transition.
• A strategic plan for the business after the succession has taken place. This should include any new revisions to current policies and management structures.
As you might expect, there are many legal matters to be addressed when creating a succession plan. Some common issues that arise in connection with business succession include:
• Choice of successor: If the succession plan does not clearly name a successor, it can lead to disputes, especially amongst family members who may be inheriting the business. Be sure to state exactly who will take charge.
• Property distribution: If there is any property in the previous owner’s name, this will need to be addressed so that the property can be distributed upon or during transition.
• Type of business form: Every type of business has different requirements regarding succession. For example, if the business is a corporation, the previous owner’s name must be removed from the articles of incorporation and replaced with that of the successor’s name. On the other hand, partnerships will usually dissolve upon the death of a partner, and it must be re-formed unless specific provisions are made in a contract.
• Tax issues: Any outstanding taxes, debts, or unfinished business must be resolved. Also, if the owner has died, there may be issues with death taxes.
• Benefits: You should ask whether the business will continue to provide benefits even after the owner has retired. For example, health care, life insurance, and retirement pay must be addressed.
• Employment contracts: If there are any ongoing employment contracts, these must be honored so as to avoid an employment law disputes. For example, if there is going to be a change in management structure, it must take into account any provisions contained in the employees’ contracts.

Picking the Successor For Your Business

When creating the business succession plan, it is crucial that the person that succeeds the current owner is able to continue the company successfully. Without this ability, many individuals may be crossed off the list. Otherwise, it is just easier to sell the organization to someone that the owner has not invested interest in, and the continued transactions and revenue mean nothing personal. One of the primary reasons to have a business succession plan is to ensure the company continues functioning after the owner either enters retirement or dies. For the successor to be a family member, he or she must be fully prepared to work hard and invest time and energy into the business. Many owners of a business have multiple family members or assistants that could take his or her place. It is important to assess both the strengths and weaknesses of each individual so he or she is able to choose the person best suited for the position. There could be resentment and negative emotions that affect the arrangement with other members of the family, and this must be taken into account along with keeping other relationships from becoming complicated such as a spouse or the manager of the business who may have assumed he or she would take on the ownership or full run of the company.

Finalizing the Process
While some may sell the company before retiring or death, it is still important to determine the value of the business before the plan is finalized. This means an appraisal and documentation with the successor’s name and information. Additional items may need to be purchased such as life insurance, liability coverage and various files with the transfer of ownership if the owner is ready to conclude the proceedings. The current owner may also be provided monetary compensation for his or her interest or a monthly stipend based on the profits of the company. These matters are determined by the paperwork and possession of the business. The transfer may be possible through a cross-purchase agreement where each party has a policy on the partners in the business. Each person is both owner and beneficiary simultaneously. This permits a buyout of shares or interest when one partner dies if necessary. An entity purchase occurs with the policy being both beneficiary and owner. Then the shares are transferred to the company upon the death of one person. Succession plans are commonly associated with retirement; however, they serve an important function earlier in the business lifespan: If anything unexpected happens to you or a co-owner, a succession plan can help reduce headaches, drama, and monetary loss. As the complexity of the business and the number of people impacted by the exit grows, so does the need for a well-written succession plan.
You should consider creating successions plan if you:
• Have complex processes: How will your employees and successor know how to operate the business once you exit? How will you duplicate your subject matter expertise?
• Employ more than just yourself: Who will step in to lead employees, administer human resources (HR) and payroll, and choose a successor and leadership structure?
• Have repeat clients and ongoing contracts: Where will clients go after your exit, and who will maintain relationships and deliver on long-term contracts?
• Have a successor in mind: How did you arrive at this decision, and are they aware and willing to take ownership?

When to Create a Small Business Succession Plan

Every business needs a succession plan to ensure that operations continue, and clients don’t experience a disruption in service. If you don’t already have a succession plan in place for your small business, this is something you should put together as soon as possible. While you may not plan to leave your business, unplanned exits do happen. In general, the closer a business owner gets to retirement age, the more urgent the need for a plan. Business owners should write a succession plan when a transfer of ownership is in sight, including when they intend to list their business for sale, retire, or transfer ownership of the business. This will ensure the business operates smoothly throughout the transition. There are several scenarios in which a business can change ownership. The type of succession plan you create may depend on a specific scenario. You may also wish to create a succession plan that addresses the unexpected, such as illness, accident, or death, in which case you should consider whether to include more than one potential successor.
Selling Your Business to a Co-owner
If you founded your business with a partner or partners, you may be considering your co-owners as potential successors. Many partnerships draft a mutual agreement that, in the event of one owner’s untimely death or disability, the remaining owners will agree to purchase their business interests from their next of kin. This type of agreement can help ease the burden of an unexpected transition—for the business and family members alike. A spouse might be interested in keeping their shares but may not have the time investment or experience to help it blossom. A buy-sell agreement ensures they’re given fair compensation, and allows the remaining co-owners to maintain control of the business.
Passing Your Business Onto an Heir
Choosing an heir as your successor is a popular option for business owners, especially those with children or family members working in their organization. It is regarded as an attractive option for providing for your family by handing them the reins to a successful, fully operational enterprise. Passing your business on to an heir is not without its complications. Some steps you can take to pass your business onto an heir smoothly are:
• Determine who will take over: This is an easy decision if you already have a single-family member involved in the business but gets more complicated when multiple family members are interested in taking over.
• Provide clear instructions: Include instructions on who will take over and how other heirs will be compensated.
• Consider a buy-sell agreement: Many succession plans include a buy-sell agreement that allows heirs that are not active in the business to sell their shares to those who are.
• Determine future leadership structure: In businesses where many heirs are involved, and only one will take over, you can simplify future discussions by providing clear instructions on how the structure should look moving forward.

Selling Your Business to a Key Employee

When you don’t have a co-owner or family member to entrust with your business, a key employee might be the right successor. Consider employees who are experienced, business-savvy, and respected by your staff, which can ease the transition. Your org chart can help with this. If you’re concerned about maintaining quality after your departure, a key employee is generally more reliable than an outside buyer. Just like selling to a co-owner, a key employee succession plan requires a buy-sell agreement. Your employee will agree to purchase your business at a predetermined retirement date, or in the event of death, disability, or other circumstance that renders you unable to manage the business.

Selling Your Business to an Outside Party

When there isn’t an obvious successor to take over, business owners may look to the community: Is there another entrepreneur, or even a competitor, that would purchase your business? To ensure that the business is sold for the proper amount, you will want to calculate the business value properly, and that the valuation is updated frequently. This is easier for some types of businesses than others. If you own a more turnkey operation, like a restaurant with a good general manager, your task is simply to demonstrate that it’s a good investment. They won’t have to get their hands dirty unless they want to and will ideally still have time to focus on their other business interests. Meanwhile, if you own a real estate company that’s branded under your own name, selling could potentially be more challenging. Buyers will recognize the need to rebrand and remarket and, as a result, may not be willing to pay full price. Instead, you should prepare your business for sale well in advance; hire and train a great general manager, formalize your operating procedures, and get all your finances in check. Make your business as stable and turnkey as possible, so it’s more attractive and valuable to outside buyers.
Selling Your Shares Back to the Company
The fifth option is available to businesses with multiple owners. An “entity purchase plan” or a “stock redemption plan” is an arrangement where the business purchases life insurance on each of the co-owners. When one owner dies, the business uses the life insurance proceeds to purchase the business interest from the deceased owner’s estate, thus giving each surviving owners a larger share of the business.

Reasons You Should Call A Business Succession Attorney

• Decisions during the Idea Stage: Even before you officially open your doors for business, you have several decisions to make that will affect your daily operations going forward. What will you call your company? Is the name you have in mind available? What is your marketing tag line? Can you use that without encountering any problems? Where will your business be located? Are there any zoning issues of which you need to be aware? These are just a few examples of decisions that need to be made before you even start doing what it is you want to do. These decisions will be a lot easier to make with the help of a business attorney.
• Startup Protocols and Legal Requirements: Another early decision you’re going to have to make involves the specific type of business entity you want to initiate. You need to do so for several reasons, not the least of which is that most types of business entities require some sort of registration and all businesses will need to register and obtain a business license from the local municipalities in which they operate. In addition, you may need to provide public notice of the intention of starting a business entity, which could involve publishing that notice in a newspaper for four weeks. You need to do this right or you could face other problems, which is another reason why hiring a lawyer for your business startup is a wise decision.
• Banking Questions: If you’re going to start a business, you’re also going to need to open a bank account or perhaps multiple bank accounts. You may also need to apply for credit in the forms of credit cards and/or lines of credit if attainable. It’s highly advisable for a plethora of reasons to keep all of your business finances completely separate from your personal situation, as it’ll be much easier to organize those separate forms of finances come tax time or should any other questions arise. A small business attorney can help you choose the proper bank and the type of account or accounts you should look to open so you don’t wind up scrambling after you begin your core mission.
• Tax Questions: Since the founding of our country, a common quote that people tend to repeat in several contexts is, “Nothing is certain except for death and taxes.” What is not debatable is that your business will be taxed in one way or another, and you need a lawyer for your business startup to make sure that you’re both in compliance with local, state and federal tax codes and so that you’re not unnecessarily facing double taxes. Tax questions should be answered before you get started so you know what to generally expect in this regard, and from there you should work with a tax accountant for your specific tax questions.
• Insurance Questions: One of the issues that you’ll begin to hear and think more about as you get ready to start your business involves liability. You are responsible for the product or service you provide to your clients or customers, and you want to make sure that you’re protected from personal liability should something go wrong. You may also need to comply with regulations that require some sort of liability insurance coverage, but choosing the proper coverage and understanding the nature of that coverage are involved tasks that need to be done right. A small business attorney can help guide your business towards the coverage you need while simultaneously helping you minimize the chance for unexpected and unpleasant surprises down the road.
• Debt Management: For most Americans, debt is simply a part of life. For the majority of small business owners, debt is something that exists even before they open their doors. Debt is real and it doesn’t go away easily, and like anything else, questions, confusion and problems relating to debt can arise that can harm your ability to push your organization forward. The best way to manage debt issues is by way of advice from a business attorney who can explain the legalities involved with it and fight for you if there is a problem.
• Dispute Advocacy: It’s common for any business to encounter disputes of one type or another. It’s also unfortunately common for a startup business to wind up dealing with a problem with a vendor or some larger, more established entity. Regardless, owners need a small business attorney at the ready to fight for their company when such situations arise. An attorney who isn’t going to hesitate to advocate zealously for clients can level the playing field and even help resolve issues before they become much larger problems. In some cases, even mentioning that you have an attorney representing you could help avoid those problems altogether.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

What Is The Point Of Probate

Defense Lawyers Near Me

When To Amend A Contract And Why

Utah Divorce Code 30-3-37

UT Bankruptcy Attorney

West Jordan Utah Divorce Attorney

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

501C3 Non-Profit

501C3 Non-Profit

Most nonprofits are 501(c)(3) organizations, which means they are formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, first you need to form a Utah nonprofit corporation. Then you apply for tax-exempt status from the IRS and the state of Utah.

Common 501(c)(3) Rules and Regulations

The government recognizes that charitable and certain other types of organizations provide valuable community services that would be impossible for the government to provide using taxpayer funds. While the government can’t fully support nonprofit organizations, the 501(c)(3) codes of the IRS classify them as tax-exempt. Not having to pay taxes on donations and on the funds they raise stretches their dollars, making it easier for them to continue providing valuable services for the community. There are specific rules and regulations for starting a 501(c)(3), and there are rules for maintaining one. Failure to abide by those rules means losing tax-exempt status. The federal government also lists rules for dissolving charitable organizations. It’s important for organizations that qualify as tax-exempt to know and follow all applicable rules to avoid penalties and other liabilities.

Types of 501(c)(3) Organizations

The federal tax code lists several different types of organizations that don’t have to pay income taxes. Here are some of the basic categories:
• Charities
• Hospitals
• Religious organizations
• Educational institutions
• Scientific organizations
• Literary groups
• Groups that test for public safety
• Groups that foster national or international amateur sports competitions
• Anti-cruelty organizations for animals and children

The federal government also classifies private foundations as nonprofit organizations. These types of organizations are largely philanthropic in nature. Because they invest some percentage of their fundraising dollars, the federal government has different rules that they must abide by to maintain their status as a nonprofit organization. Organizations that receive more than one-third of their support from gross investment income are considered private foundations. The IRS requires private foundations to submit detailed tax returns.

Rules for 501(c)(3) Organizations

A 501(c)(3) organization typically begins when a group of people share a common goal of starting a nonprofit organization to fill a need within their community. After carefully choosing a name for the organization, the founders get to work writing the articles of incorporation. The articles of incorporation must include the corporation’s name, contact information, purpose, registered agent, founding directors and information about shares of stock, because once they are filed, they become public record. In most states, founders file the form for the articles of incorporation with the Secretary of State’s office. Organizations usually have to designate an “incorporator” who signs and files the articles of incorporation with the proper authorities and pays the appropriate filing fee. There may be separate forms for applying for federal or state tax-exempt status. Bylaws are separate and different from the articles of incorporation. The founding directors write the bylaws, which outline how the nonprofit runs, including the rights and responsibilities of officers and directors. Nonprofit organizations don’t have to file bylaws with the state, but they need to keep them in their files. The next step is usually to appoint a founding board of directors and to hold the first board meeting. After that, the board needs to follow up on obtaining all of the proper licenses and permits, and to open a bank account for the nonprofit’s funds.

How To Maintain 501(c)(3) Status

The government intends for nonprofit entities to remain nonprofit entities, so they set up some rules that tax-exempt organizations must obey in order to keep their tax-exempt status. Not knowing the rules isn’t an excuse for disobeying them. Those who try to blur or cross the line could end up with fines or face other legal consequences.
• Private benefit: Organizations that apply for tax-exempt status cannot serve the private interests, or private benefit, of any individual or organization besides itself past an insubstantial degree. Therefore, a nonprofit may not permit any of its income or assets to benefit insiders, such as board members, officers, directors and important employees.
• Nonprofits are not allowed to urge their members to support or oppose legislation. They may participate in a small amount of lobbying, but lobbying activities may not exceed a certain amount of the organization’s total expenses.
• Political campaign activity. A nonprofit organization may not financially support or endorse any political candidates verbally or in writing. They may not oppose candidates either. This rule applies to candidates at every level — local, state and federal.
• Unrelated business income. Nonprofit organizations aren’t allowed to generate too much income from a purpose that is unrelated to the nonprofit. An organization that regularly operates a trade or business that is unrelated to the nonprofit and makes significant contributions to the organization would need to pay taxes.
• Annual reporting obligation. Nonprofit corporations still have reporting responsibilities, like the Form 990. They may also be responsible for things like tax on unrelated income, employment tax, excise taxes, and certain state or local taxes. Churches and other church-related organizations don’t need to report income.
• Operate in accord with stated nonprofit purposes. An organization that makes a big shift from being unprofitable to making money needs to re-file as a for-profit entity and to pay the applicable taxes.
Dissolving a Nonprofit Organization
It’s much easier to start a nonprofit than it is to dissolve it, and nonprofits must obey certain rules in dissolving their organizations. The intent is to dissuade people from starting nonprofit organizations, shutting them down after a time and keeping the profits for themselves. There are certain steps related to dissolving a nonprofit, and it’s best to gain the help of an attorney or tax professional. A nonprofit may only distribute assets to another tax-exempt organization. The board may vote to dissolve the organization, file dissolution papers with the state and the IRS, and select another nonprofit organization to which to transfer any assets. The board will need to pay all contractual obligations and debts before dissolving the nonprofit. If there aren’t enough assets to pay remaining debts, the nonprofit may need to file bankruptcy. The board could be held liable for not properly dissolving a tax-exempt organization. It’s important to remember that the government values nonprofit organizations for their commitment and sacrifice. The nonprofit savings in tax dollars are intended to serve the public in their communities, not to profit individuals or groups of individuals. The rules and regulations are designed with the intent that nonprofits will start out strong and enjoy long-term sustainability. Nonprofits that decide to close their doors for whatever reason don’t get to pocket any remaining funds.

Your Utah Nonprofit Corporation Lawyer

First, you need to form a nonprofit corporation under Utah state law (the Utah Revised Nonprofit Corporation Act (“RNCA”)).
• Choose the initial directors for your nonprofit: In Utah, you must have at least three directors on your board. If you do not name initial directors in your articles of incorporation, you must provide their names to the state no later than the filing of your first annual report.
• Choose a name for your Utah nonprofit corporation: The name of your nonprofit must be distinguishable from the name of any domestic or foreign, nonprofit or for Profit Corporation, limited liability company, or limited partnership authorized or incorporated in the state, or any name reserved or registered or any trademark or assumed name on file with the Secretary of State. To see if your proposed name is available, you can check the online business name search on the Division of Corporations & Commercial Code website.

• Prepare and file your nonprofit articles of organization: You create your nonprofit entity by filing articles of incorporation with the Utah Department of Commerce, Division of Corporations and Commercial Code. Your articles of incorporation must include basic information such as:
 the name of your nonprofit
 its purpose, including language required by the IRS for federal tax exemption
 the number of shares the corporation is authorized to issue (see RNCA §16-6a-202 for more information)
 a statement regarding whether the corporation will have voting members
 the number of directors constituting the initial board
 for non-commercial registered agents: the Utah street address of the business entity’s initial registered office and the name of its initial registered agent at that address
 for commercial registered agents: the name of the commercial registered agent and the registration number
 the name, street addresses, and verified signatures of each incorporator, and
 the street address for the principal office (optional until first annual report).
To receive your federal tax exemption from the IRS, make sure you include the language required to obtain 501(c)(3) tax-exempt status. This includes:
• a statement of purpose that meets IRS requirements
• statements that your nonprofit will not engage in prohibited political or legislative activity, and
• a dissolution of assets provision dedicating your assets to another 501(c)(3) organization upon dissolution.
• Prepare bylaws for your Utah nonprofit corporation: Before you file your articles of incorporation, you’ll need to have bylaws that comply with Utah law. Your bylaws contain the rules and procedures your corporation will follow for holding meetings, electing officers and directors, and taking care of other corporate formalities required in Utah. Your bylaws do not need to be filed with the state; they are your internal operating manual.
• Hold a meeting of your board of directors: Your first board meeting is usually referred to as the organizational meeting of the board. The board should take such actions as:
 approving the bylaws
 appointing officers
 setting an accounting period and tax year, and
 approving initial transactions of the corporation, such as the opening of a corporate bank account. After the meeting is completed, be sure to create minutes that accurately record the actions taken by the board. You should set up a corporate records binder for your nonprofit to hold important documents such as articles of incorporation, bylaws, and minutes of meetings.
• Apply for an Employer Identification Number (EIN): Apply for an EIN via the IRS website. An EIN is a unique tax number for your nonprofit, which you will use on your state and federal tax filings, exemption application, bank accounts, and other government filings. The application is free, and you will receive your EIN immediately after submission.
• Obtain business licenses and permits: Utah does not require nonprofits to obtain statewide business licenses. However, depending on your location and services, you might need one or more licenses or permits. Check with the licensing office in every town and county where your nonprofit will operate to determine what the requirements are for your organization.
• Submit an annual report/renewal form: Each year, you must submit an annual report/renewal form to keep your nonprofit in good standing with the state. You may renew your nonprofit online via the Division of Corporations and Commercial Code website. The state will send you a renewal reminder before the due date, which will be the end of the month of your initial registration.
Obtain Your Federal and State Tax Exemptions
Now that you have created your nonprofit corporation, you can obtain your federal and Utah state tax exemptions. Here are the steps you must take to obtain your tax-exempt status.
• File your Form 1023 federal tax exemption application; To obtain federal tax-exempt status from the IRS, you will need to complete and file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This long and detailed form asks for lots of information about your organization, including its history, finances, organizational structure, governance policies, operations, activities, and more.
• Obtain your Utah state tax exemptions: Once you obtain your federal 501(c)(3) tax-exempt status from the IRS, your nonprofit is eligible for certain state tax exemptions. Check the Utah State Tax Commission website for information and filing requirements for franchise, sales and use, and property tax exemptions.
• Other state reporting and registration requirements: Depending on your activities and the size of your organization, you may need to register with the state before doing any fundraising activities. Check the Utah Division of Consumer Protection website for information and rules about fundraising and registration requirements for nonprofits.

501(c)(3) Lawyer

When you need legal help with a non-profit 501(c)(3) in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Lawyer For Catholic Church

What Is Better, A Chapter 7 Or 13?

Foreclosure Lawyer North Salt Lake Utah

Utah Divorce Code 30-3-32

Custody Lawyers In Utah County

Farmington Utah Divorce Attorney

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Lawyer For Catholic Church

Lawyer For Catholic Church

The Holy See also employs lawyers when there is a lawsuit in the Utah District Courts. There are also canon lawyers who first attend seminary then go to canon law school. At Ascent Law LLC, we represent churches in court.

The biggest school of canon law in the United States is at Catholic University. The largest one in Rome is at Gregorian University. American canon lawyers frequently go on to work as judges or advocates in the ecclesiastical courts run by dioceses around the country. Their Vatican counterparts do the same in official church tribunals. The best of them reach one of the top three ecclesiastical courts of Rome: the Roman Rota, the church’s highest appellate court; the Apostolic Penitentiary, the secret court that deals with private matters that come up during confession; and the Apostolic Signature, the Vatican’s Supreme Court. (The most common cases to reach the Signature involve administrative disputes, like the transfer of priests.) In each court, a panel of judges investigates and rules on religious matters from disputes over excommunication to marriage annulments. Anyone who appears before the court has the right to a canonical attorney. The work of civil lawyers and canon lawyers often overlaps. For example, it’s fairly easy for couples to get divorced under American civil law. Canon law, however, makes it more difficult to get a marriage annulled in the eyes of the church. A Catholic couple may therefore want to consult both civil and canon lawyers. In the child-abuse cases, both the plaintiffs and the Holy See have consulted canon lawyers to help shape their arguments. The plaintiffs in the Kentucky suit, for example, claim that a 1962 Vatican document mandated that bishops not report sex-abuse cases to authorities. Lawyers for the Vatican argue that the document, as interpreted under canon law, says nothing of the sort. Over the past decade, survivors of sexual abuse around the world have stepped forward with allegations that their abusers were Roman Catholic Church clergy. Many have told disturbing stories of abuse that occurred while they were still children. The wave of allegations has spurred a movement toward holding individual clergy, and the church leadership and institutions that enabled them, to account. In jurisdictions across the country, including in Illinois, New York, and California, survivors have sought that accountability through civil legal actions for damages and other relief.

Obtaining Accountability for Clergy Abuse through the Courts

There are many ways to seek accountability for clergy abuse. Survivors play a role in criminal prosecutions of their abusers. They organize fellow survivors. They advocate for change within the church and outside of it. Survivors nationwide have also found accountability through the courts. A civil legal action against individual clergy members and church institutions can give survivors the opportunity to investigate and shine a light on church practices that fostered clergy abuse. In most jurisdictions, survivors of clergy sexual abuse have the right to sue to recover damages and other relief from their abusers and anyone who facilitated the abuse. Every jurisdiction has its own window of time in which survivors can file those claims. In Utah, the time limits vary depending on how old the victim was at the time of the abuse.

What a Lawsuit for Clergy Abuse Can Accomplish

The wounds of clergy abuse do not heal easily. Survivors often carry the physical, emotional, financial, and spiritual scars clergy abuse inflicts for their entire lives. A civil lawsuit for money damages cannot take away survivors’ pain, but it can help them find much-needed support. A civil action may also help further goals of preventing further clergy abuse. Many jurisdictions, allow for the recovery of punitive damages in cases of intentional harm. These damages serve to punish and deter sexual misconduct. Courts also award injunctive relief in some cases, which essentially amounts to a court order that directs wrongdoers to take preventive actions so that clergy abuse does not recur. Survivors of clergy abuse have filed suit individually, while others have joined together in group litigation. Whatever the form a lawsuit takes, the types of monetary and other relief they may recover are more or less the same. Of course, a positive outcome is never a guarantee in any lawsuit. However, many recent lawsuits against the church and individual abusers have demonstrated it is possible for survivors to recover substantial amounts of money and to achieve meaningful other forms of relief that help to prevent clergy abuse.

When Clergy Abuse Claims Must Be Filed

Time limits for filing clergy sexual abuse claims vary from state to state, so please make sure to consult an experienced clergy abuse attorney when considering filing a legal action against individual clergy or the church. Under California law, for example, survivors of clergy sexual abuse that happened when the plaintiff was over 18 must presently file a claim no later than:
• 10 years from the date of the last act, attempted act, or assault with the intent to commit an act, of sexual assault; or
• Three years from the date the plaintiff discovers or reasonably should have discovered that an injury or illness resulted from an act, attempted act, or assault with the intent to commit an act, of sexual assault.
Survivors of clergy sexual abuse that happened when the survivor was under 18, in contrast, can pursue a claim until the later of:
• Eight years from the date the plaintiff turns 18; or
• Three years from the date the plaintiff discovers or reasonably should have discovered that psychological injury or illness occurring after turning 18 was caused by the sexual abuse.

What a Lawsuit for Clergy Abuse Can Accomplish

The wounds of clergy abuse do not heal easily. Survivors often carry the physical, emotional, financial, and spiritual scars clergy abuse inflicts for their entire lives. A civil lawsuit for money damages cannot take away survivors’ pain, but it can help them find much-needed support. A civil action may also help further goals of preventing further clergy abuse. Many jurisdictions, allow for the recovery of punitive damages in cases of intentional harm. These damages serve to punish and deter sexual misconduct. Courts also award injunctive relief in some cases, which essentially amounts to a court order that directs wrongdoers to take preventive actions so that clergy abuse does not recur. Survivors of clergy abuse have filed suit individually, while others have joined together in group litigation. Whatever the form a lawsuit takes, the types of monetary and other relief they may recover are more or less the same. Of course, a positive outcome is never a guarantee in any lawsuit. However, many recent lawsuits against the church and individual abusers have demonstrated it is possible for survivors to recover substantial amounts of money and to achieve meaningful other forms of relief that help to prevent clergy abuse.
Excommunication is the most severe form of ecclesiastical penalty and is used only as an absolute last resort. Excommunicants remain Catholic because of baptism and still obligated to attend Mass, but they are deprived of all sacraments (except for the Sacrament of Penance). For example, you can go to Mass but not receive the Holy Eucharist. The excommunicated are forbidden from employment or holding any position of authority in a diocese or parish. They are also deprived of a Catholic burial.

The following offenses warrant excommunication as a result of a judgment from a church authority:
• Pretended celebration of the Holy Eucharist (Mass) or conferral of sacramental absolution by one not a priest
• Violation of confessional seal by interpreter and others
Some excommunications, however, are automatic (effective at the moment the act is committed) and without the intervention of the Church. Catholics are automatically excommunicated for committing these offenses:
• Procuring of abortion
• Apostasy: The total rejection of the Christian faith.
• Heresy: The obstinate post-baptismal denial of some truth, which must be believed with divine and Catholic faith.
• Schism: The rejection of the authority and jurisdiction of the pope as head of the Church.
• Desecration of sacred species (Holy Communion)
• Physical attack on the pope
• Sacramental absolution of an accomplice in sin against the Sixth and Ninth Commandments
• Unauthorized episcopal (bishop) consecration
• Direct violation of confessional seal by confessor
The local bishop has the authority to remove most excommunications, but many bishops delegate this power to all their parish priests when it involves a penitent confessing the mortal sin of abortion. This way, the person going to confession can simultaneously have the sin absolved and the excommunication lifted. This is to make it easier for people to go to confession and reconcile themselves with God and the Church, especially after a very emotional, personal, and serious matter, such as abortion. Some excommunications, however, are so serious that only the pope or his delegate can remove the penalty. Other types of penalties
In addition to excommunication, the Code of Canon Law has other types of penalties:
• Suspension: The Church forbids a suspended cleric (priest, deacon, or bishop) to exercise his ordained ministry and to wear clerical garb. However, suspension doesn’t deprive the cleric of receiving the sacraments.
• Interdict: This is a temporary penalty that can be applied to one or more persons or even a whole town or area. Under this punishment, the persons named can’t receive the sacraments, but they aren’t excommunicated, so they still can receive income from a diocese or parish, hold office, and so on. It is lifted when the person repents and seeks reconciliation.

When Does A Church Need An Attorney?

When someone is starting or joining leadership in a religious institution, legal considerations are often towards the bottom of the priority list. However, religious institutions of all faiths need to be aware of areas where they may need advice from a licensed attorney in order to best serve their membership and carry out their faith. Here are some of the most common areas where a church or other religious organization should consult an attorney.

Governing Documents

The majority of religious organizations operate under the direction of one or more governing documents. It is absolutely vital that these documents be kept up to date and reviewed on a regular basis. An attorney will be able to provide valuable advice and suggestions about what to include in these documents to give the maximum protection to the organization.

Real Estate and Land Use

If your religious institution needs to move locations or expand its current location, an attorney will often be necessary. In this case, an attorney can help with reviewing your real estate transaction documents, determining whether your land use is permitted in the proposed location, or securing a variance or special use permit from the municipality if necessary.

Employment

When hiring and firing lay employees, religious institutions must consider state and federal employment law. Discussing particular employment situations with an attorney before acting can save an organization thousands of dollars and an immeasurable amount of negative public perception. Further, an attorney can help prevent difficult situations in the first place by providing your organization with a clear and comprehensive employee handbook.

Litigation

This is the obvious scenario where an attorney is needed. If a religious institution is presented with a lawsuit, it should immediately seek out an attorney with experience representing religious institutions, as the unique culture and issues in these types of lawsuits often call for a specialist. An attorney specializing in representing religious institutions will be able to better understand issues that are important to the organization, and will be familiar with the special challenges and opportunities presented.

Denominational Relations

In today’s changing culture, many of the traditional denominations in Utah are changing also. It is inevitable that some congregations will feel called away from their past denominational affiliations for one or more reasons. When separation is being considered, it is vital to consult an attorney who is familiar with the process of leaving a denomination. Various legal issues will need to be considered before undertaking a separation and an understanding and knowledgeable counselor will ease the transition for all involved.

Organizational Discipline

Many faiths have unique practices for disciplining individual members when necessary. However, there can be potential for some inter-organizational discipline practices to create legal issues. Having an attorney review organizational policy and provide advice on a particular issue can prevent unintended legal consequences.

Advice on Current Legal Issues

As the culture changes rapidly, new legal issues arise frequently. Religious organizations must be prepared to operate in the light of these new realities. In these cases, an attorney will be an invaluable resource as a counselor who understands both the law and the client, and will be able to shed light on an otherwise confusing situation.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Common Law Marriage Utah

Utah Eviction Process

Commercial Loan Workout

Utah Divorce Code 30-3-11.3(2)

Lehi Utah Divorce Attorney

Will Banks Release Money Without Probate?

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office

Commercial Litigation Attorneys

Commercial Litigation Attorneys

Commercial litigation can be tough to define even when speaking with lawyers. While commercial litigation is tough to define, that is not necessarily a bad thing. In fact, commercial litigation provides anyone within it with unparalleled experience in the wide range of business disputes that it encompasses under its umbrella. This fact makes commercial litigation work the perfect type of work for anyone in the legal field that is interested in a constantly changing variety of cases and subjects, and especially invaluable for recent law school graduates. The next time that someone asks you to define what commercial litigation means to you, just remember that its breadth is exactly what makes it the perfect practice area in which to start your legal career. With any legal dispute a commercial business or company may be facing, the security and financial well-being of their business is a priority. What can help maintain your business’s bottom line is having an experienced commercial litigation attorney. While it may seem like just another added expense, it is a necessary one. A skilled and knowledgeable business and commercial litigation lawyer can truly help mitigate the time and cost of a lawsuit. If you try to settle this on your own through negotiations or mediations, you may find yourself looking at a lawsuit and then wishing you had simply hired an attorney to begin with.

Reasons You Should Hire A Lawyer For Your Commercial Or Business Litigation Case

There are many reasons to hire a lawyer when your business is facing litigation, but here are just some of the main ones.
• Getting it done right the first time: When facing litigation either by another business or you are suing another entity for commercial reasons, you do not want to have to backtrack because you didn’t hire a lawyer from the beginning. The sooner your lawyer is in on the loop, the more he or she can help you.
• Time is money: An attorney can help make litigation go as smoothly and efficiently as possible. And as the old saying goes, time is money and you certainly do not want to be wasting your time with legal matters any more than you have to.
• Being prepared makes all the difference: While your commercial dispute may seem like it could be settled outside of court, do not count on this. It only takes one issue to go unresolved before parties pursue litigation. If your attorney is there from the beginning, preparing you and your business for trial in case it comes to that, you will feel secure in knowing you will be ready and prepared.
• Focus on your business instead of legal problems: You shouldn’t have to be worrying about your legal problems. Instead, you should be worrying about what you are good at and that is running your business.

What a Commercial Litigation Lawyer Do

A commercial litigation lawyer is a legal expert who represents a company’s interest in a financial dispute. The lawyer’s purpose is to protect the company’s right and obtain the best outcomes at the end of the litigation process. When you contact a commercial lawyer, the first thing this person will do is analyzing your case. You will be required to answer all their questions and provide relevant proof to help them understand how they should proceed. You might be seeking for representation, or you might be acting as a claimant. A commercial lawyer’s primary role is to choose the best legal option that will minimize the financial risks for your business. After establishing your claim’s potential, they can tell you whether it’s best to have a court lawsuit or an out-of-court settlement. Either way, the lawyer’s role implies various responsibilities since they can handle all the legal matters on your behalf, from proof-gathering to the actual filing.
These are some of the most common duties commercial litigation lawyers usually have to undertake during a litigation process:
• Conducting the initial case evaluation
• Drafting the necessary motions or pleadings
• Formulating responses to the other party’s complaint
• Exchanging information with the other party during the discovery process
• Preparing the necessary documentation for the court lawsuit
• Choosing the best strategy to deploy in court based on the existing evidence
• Presenting the case in court
• Negotiating with the other party’s lawyers during the settlement phase
• Appealing the case if the negotiation fails
Here are some examples of the most common commercial disputes that require legal assistance:
• Breach of contracts
• Corporate disputes
• Fraud disputes
• Intellectual property disputes
• Debt collection
• Partnership or shareholder disputes
• Employment disputes
• Breach of fiduciary duty
• Tortuous interference
• Product liability claims
Typically, commercial lawyers don’t have experience in all these different litigation areas. Therefore, it’s essential to seek a lawyer who has proven experience in the niche that interests you if you have a dispute to solve.
Civil litigation is a lawsuit between two parties to enforce or defend a legal right where the plaintiff typically seeks compensation in the form of monetary damages from the defendant. Many different types of lawsuits fall under the broad umbrella of civil litigation. When businesses or companies are involved in a dispute, the lawsuit is generally known as commercial litigation. A common question is whether commercial litigation is different from traditional litigation. The answer is both yes and no.

Some Similarities

Commercial litigation generally progresses the same way that other civil litigation matters do. These typical litigation stages are: retaining an attorney, conducting factual investigations, researching applicable law, sending demand letters, engaging in settlement negotiations, filing suit, conducting discovery, participating in motion practice, trying the case before a judge or jury, filing post-trial motions, and so on.

Some Differences

Commercial litigation is different from most other civil lawsuits by virtue of the involvement of businesses rather than just individuals, and because the issues involved are very specialized and typically more complex, both factually and legally. Many times, commercial litigation is filed in federal court, rather than state court, and can be a class action or multi-district litigation. Additionally, commercial litigation can take many twists and turns and persist for years as compared to other types of civil litigation. Commercial litigation also can be more expensive due to the costs of discovery, particularly e-discovery, and the costs of forensic experts.
Types
There are many different types of commercial litigation, including the following:
• Antitrust
• Aviation Disputes
• Bad Faith
• Breach of Contract
• Breach of Fiduciary Duty
• Business Torts
• Class Actions
• Construction
• Debtor/Creditor
• Employment and Labor
• Fraud and Misrepresentation
• Insurance Coverage
• Intellectual Property and Patent Infringement
• LLC Member Disputes
• Partnership Disputes
• Privacy, Cyber-security and Data Breach
• Product Liability
• Real Estate, Land Use and Environmental Litigation
• Restrictive Covenant
• Securities Litigation
• Shareholder Disputes and Derivative Actions
• Tax Disputes
• Trade Secret and Unfair Competition
While this is not an exhaustive list of the types of commercial litigation, it highlights some of the more prevalent types of disputes that can arise in the business context.

What Are The Trends

Political administrations change, laws change, rules and regulations change, court appointments change, the economy changes, and the business landscape changes. The commercial litigation environment is no exception. Several areas of business litigation are poised for change, or have already changed. Yearly case figures generally show that the volume of litigation and the time required to resolve cases is increasing. For example, the most recent federal court statistics show that civil case filings increased 5% overall for the 2016 fiscal year. Per the same statistics, the median time from filing to disposition for civil cases was 9.2 months, up from 8.8 months in the prior fiscal year. According to one report, commercial litigation trends indicate that companies with “bet-the-company” cases have quadrupled over the past two years. The same report found that businesses are seeking a faster and more efficient resolution of cases via settlement, and that company spending on employment, intellectual property, and class action litigation is increasing due to the greater risks involved in those types of cases.
The following types of commercial litigation have experienced increased volume, and these robust trends are expected to continue.

Cyber-security and Data Breach Litigation

Increased cyber-security and data privacy litigation is expected due to the escalating frequency, scale and sophistication of cyber-attacks and the resulting data breaches. According to one study, the average total cost of a data breach globally is $3.62 million, and the average global cost per lost or stolen record is $141. These costs incorporate legal expenditures, including litigation costs. In cyber-security and data privacy litigation, the key threshold issue is whether consumers have standing to seek relief for data breaches and improper disclosure of personal information. Also, states continue to expand and pass laws protecting consumer data. These state laws provide consumers with additional avenues for relief for data security breaches and are leading to increased lawsuits.

Employment Litigation

Employment disputes are increasing and they are expensive, lengthy and injurious to an employer’s reputation. This trend of increased litigation arising out of the workplace is expected to continue. According to one study, the average employment claim takes 275 days to resolve and the average cost to defend and settle is $125,000. And, per the same study, for those employment claims that are not settled, the median judgment is approximately $200,000, which is in addition to the cost of a defense. However, the study found that about 25% of employment cases result in a judgment of $500,000.00 or more. According to the same employment litigation study, U.S. companies have an 11% chance of having a claim filed against them by an employee. But, per the study, some states have even higher chances of employee litigation.

Securities Class Actions

Case records show that there was a significant uptick in securities class actions. According to one study, in 2016, plaintiffs filed 270 federal securities cases, which was a 44% increase over the prior year. The same study reported that a record 3.9% of U.S. exchange-listed companies were subject to class action filings in 2016, which was above the historic average of 2.8%. A midyear assessment found that for the first six months of 2017, plaintiffs filed a record 226 new federal class action securities cases. This was 135% above the 1997-2016 historical semiannual average of 96 filings and the highest filing rate since the Securities Clearinghouse began tracking such data. This same assessment reported that 4.7% of U.S. exchange-listed companies were sued in federal securities class actions in the first half of 2017, which was an increase over the percentage of companies sued in 2016. This is an unprecedented spike in securities litigation activity.

Often when people think of litigation, they think of lawyers taking claims to court or defending claims brought against their clients. However, due to the cost and damage to business relationships that occur during court battles, dispute resolution is often used. Most top law firms have specialist litigation and dispute resolution departments, whilst smaller or specialist firms concentrate all their resources on litigation. Often, work as a trainee will begin by preparing documentation or conducting research on relevant laws and case histories or drafting preliminary motions before the court. Eventually though, you will move on to more complex activities as you gain experience. Litigators usually work closely with colleagues from other departments (e.g. banking and finance, corporate, commercial and real estate) and a whole host of other support staff. Litigation is subject to frequent changes and developments over a period of time.

What makes a good litigator?

A litigator requires good communication and negotiation skills. However, it’s not so much about arguing cases but making a cogent and reasoned case in favor of your client’s interests. You’ll need to have a strong academic background and be flexible and creative when it comes to tackling new challenges. In order to be a good litigator, you will need a keen sense of commercial awareness, good command over legal and technical principles and the ability to present facts, law and strategies in a reasoned and persuasive manner.
Some common types of complex commercial litigation include:
• Intellectual property disputes: Patents, trademarks, copyrights, and trade secrets laws all protect the intellectual property of organizations. Your business may need to file a lawsuit if your intellectual property is being misused or you may be named as a defendant if you are accused of violating someone else’s IP rights. Intellectual property disputes often hinge on complex details and highly-technical situations and you need an attorney with unparalleled experience in these difficult cases.
• Employer/employee disputes: Both state and federal laws govern relationships between employees and the companies they work for. Employees may have obligations to your organization, like protecting trade secrets. You also must ensure you comply with fair wage and hour laws and non-discrimination regulations. If your employees believe you have acted unfairly, you can be sued.
• Customer lawsuits for breach of warranty or defective products: Most products have implied warranties, including a warranty of merchantability and of fitness for the purpose for which the product is sued. You may also provide an express warranty for your products. Breach of warranty and defective product claims can come in the form of class action litigation in which multiple plaintiffs join together to take legal action against your business.
• Breach of contract cases: Contracts create private law. If either party materially misrepresents their intentions or fails to fulfill their obligations in the contract, a breach of contract claim can be filed for damages. The non-breaching party can seek specific performance or other equitable remedies, or may seek monetary payment for losses resulting from the breach.

Business Litigation Lawyer

When you a Utah Commercial Trial Lawyer, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

How Do Probate Attorneys Get Paid?

What Is The Income Cut Off For Chapter 7?

Foreclosure Lawyer Provo Utah

Financial Assistance For Accidental Death

Utah Divorce Code 30-3-10.8

Attorneys In Salt Lake City

Ascent Law St. George Utah Office

Ascent Law Ogden Utah Office