Proof of Motivation Is Now Unnecessary in Michigan Whistleblower Cases

Under the Michigan Whistleblower’s Protection Act (“WPA”), an employer is subject to civil liability and penalties for discharging, threatening or otherwise discriminating against an employee because the employee reports or is about to report, a violation or suspected violation of a law, regulation or rule to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation. This means, a plaintiff in a WPA case is required to prove (1) he or she was engaged in a protected activity as provided under the act, (2) he or she suffered an adverse employment action, and (3) there is a causal connection between the protected activity and the adverse employment action.

While it has been long recognized by the Michigan courts that these are the three prongs required for a successful WPA case, there have been some Michigan casesin the past providing that a plaintiff is also required to prove that he or she engaged in that protected activity primarily for an altruistic purpose: to inform the public on matters of public concern, rather than for any personal vendetta.  Recently, the Michigan Supreme Court issued an opinion clarifying that a plaintiff need not prove that his or her primary motivation was for the public good.  Thus, it no longer matters why the plaintiff intended to blow the whistle, and whether it was for a good or bad reason.  This allows more plaintiffs to prove their case without having to defend their intentions.  This also allows more businesses to be subject to potential whistleblower cases.

The WPA has a very short statute of limitations.  If you have been subject to an adverse employment action, or your business has been accused of participating in an adverse employment action, due to a whistleblowing activity, you should seek the advice of legal counsel as soon as you can.

For more information or to speak with us about your whistleblower issue, please contact us in Ann Arbor at 734-665-4441, or in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

Common Landlord-Tenant Disputes Part 1: The Security Deposit

As attorneys who frequently handle disputes arising out of residential leases, the following are the three topics we are asked about most frequently by landlords and tenants:

• Security deposit issues;
• Late fees;
• Repairs that the landlord must make.

Each of these issues will be covered in two separate blog posts, starting with the security deposit.

The Landlord and Tenant Relationships Act governs residential leases and tenancies in Michigan. Sections 2 through 14 of the Act are commonly referred to as the “Security Deposit Statute.” Generally, a security deposit can only be used for damages that result from conduct not reasonably expected during a tenancy, or for unpaid rent.

Two key provisions of the “Security Deposit Statute” are Section 9 and Section 13.  Section 9 requires a landlord to send an itemized list of damages to a tenant within 30 days of the termination of tenancy, which must include specific statutory language informing the tenant that they must respond to the notice within 7 days, otherwise the tenant will forfeit the amount of claimed damages. Failure by a landlord to send an itemized list of damages, with the proper notice, waives any claim by the landlord for the cost of repairs, and the landlord will have to return the security deposit in full.

However, according to Section 13 of the “Security Deposit Statute,” within 45 days after a tenant vacates a property, a landlord is able to file an action for money damages, which could include damage to a rental property. That being said, a landlord cannot retain any of the security deposit unless one of the following requirements is met:

• Landlord has obtained a money judgment for the disputed amount;
• Tenant has failed to provide the landlord with a forwarding address;
• Tenant failed to respond to landlord’s notice of damages within 7 days as required by Section 9;
• The Parties have agreed in writing to the disposition of the balance of the security deposit; or,
• The amount claimed is based on unpaid rent.

If a landlord fails to fully comply with Section 13 of the “Security Deposit Statute,” illegally withholding a portion of a security deposit, the court will view it as a waiver of all claimed damages and the court could require a landlord pay the tenant double the security deposit amount. Needless to say, this is an important law for all tenants and landlords to understand.

The attorneys at Pear Sperling Eggan & Daniels, P.C. are experienced in handling disputes arising out residential and commercial leases. PSED Law represents both landlords and tenants. If you have questions about your rights under a lease agreement please call PSED Law at our Ypsilanti office at 734-483-3626, or our Ann Arbor location at 734-665-4441.

Social Media and Trademarks: Understanding Your Rights in a Digital Age

The popularity of various social media applications, such as Facebook and Twitter, has grown at a rate that far exceeds the ability of courts and the legislature to keep up with regulations and their interpretation.  A user on any one of these applications is able to post a comment, a picture, a link or logo within seconds of its creation, becoming a potential advertiser for their own company or for another business entity.  At the same time, such a posting may open the user up to liability for trademark infringement, misuse or other causes of action.

Of particular importance at this intersection of social advertising and trademark law is the rights of individuals or small businesses with common law trademarks.  In the U.S., trademark rights are created by use, not by an official registration.  Any trademarkis a name, slogan, logo or any other indicator that a particular source provides a specific good or service.  A common law trademark is one that is used and continues to be used in commerce without ever filing for official registration.  Determining who has the legal right to use the mark is a question of priority.  Without registration, the trademark owner may be able to enforce the mark against anyone using the same or a confusingly similar mark in connection with the same goods or services in the territory in which the mark is used.

Many small businesses have developed common law trademark rights through names or logos and have not had the mark registered, most often because they do not qualify for federal registration.  With the growth of social media as a marketing tool, these businesses create Facebook pages and Twitter accounts, displaying those names and logos.  Increasingly, these local businesses are being forced to abandon those marks or risk losing their social media accounts because a larger, national business has threatened them with legal action, even if the national business was not using the mark first.

A federal registration will help any business create solid, enforceable trademark rights.  However, a federal registration does not always allow the owner to terminate the earlier use of a common law trademark.  Facebook, Twitter and other social media applications are world-wide and cannot limit access to certain geographic territories because of federal or common law trademark rights.  If you have had your Facebook page or Twitter account removed because of an alleged trademark violation, you may be able to have your page restored.  Although courts are just starting to hear these cases, there are decisions and legal precedents that may support you if you have encountered these circumstances.

The combination of national advertising, social media platforms and traditional trademark principles create technical and very complex legal issues.  Knowing your rights in this area is critical to your established goodwill and your continued business success.

For more information or to speak with us about your legal issue, please contact us in Ann Arbor at 734-665-4441, and in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

Good News for Business Clients: Business Courts are Finally Here!

On July 1, 2013, seventeen Michigan counties will begin accepting filings in their Business Court divisions.  Late last year, the Michigan Legislature passed a law requiring any Michigan circuit court with three or more judges to begin a docket for a business court to deal with business or commercial disputes.  These cases will include any dispute involving a business enterprise.  A business enterprise is defined by the law as any of the following:  a sole proprietorship, partnership, limited partnership, joint venture, limited liability company, limited liability partnership, for-profit or not-for-profit corporation or professional corporation, business trust, real estate investment trust, or any other entity in which a business may lawfully be conducted in the jurisdiction in which the business is being conducted.  However, business enterprise does not include an ecclesiastical or religious organization.   However, certain claims involving other nonprofit organizations can be heard in the business court if they meet the requirements.

Business or commercial disputes include, but are not limited to, the following types of actions:

(a) Those involving information technology, software, or website development, maintenance, or hosting.

(b) Those involving the internal organization of business entities and the rights or obligations of shareholders, partners, members, owners, officers, directors, or managers.

(c) Those arising out of contractual agreements or other business dealings, including licensing, trade secret, intellectual property, antitrust, securities, non-compete, non-solicitation, and confidentiality agreements if all available administrative remedies are completely exhausted.

(d) Those arising out of commercial transactions, including commercial bank transactions.

(e) Those arising out of business or commercial insurance policies.

(f) Those involving commercial real property.

However, disputes involving employee terminations and civil rights cases in those contexts, as well as workers compensation are generally exempted from the business court’s jurisdiction, with limited exception.

The seventeen counties subject to the law and the July 1, 2013, deadline are: Wayne, Washtenaw, St. Clair, Oakland, Monroe, Macomb, Genesee, Jackson, Kalamazoo, Muskegon, Kent, Ottawa, Ingham, Calhoun, Berrien, Saginaw and Bay.  Other counties are free to add a business court if they choose.

For more information or to speak with us about your business law issue, please contact us in Ann Arbor at 734-665-4441, and in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

The U.S. Patent System in Your Own Backyard

Think you have the next great idea?  Have you improved an existing technology by making it easier or more efficient?  If so, then you may be entitled to protect your idea by obtaining a patent.  The first ever USPTO satellite office in Detroit is open and operating, and PSED Law would like to help you bring your invention to it.  The high number of engineers and research professionals in the area played a part in the decision to bring the USPTO to Detroit and it is certainly a welcomed addition to Southeastern Michigan.

In the U.S., a patent is a way to prevent others from using, making, selling, offering to sell or importing your invention in the U.S for a limited time.  You are granted this right for 20 years from the date you file your application.

To begin the process of obtaining a patent, you must file an application with the United States Patent and Trademark Office (USPTO).  These applications are very technical and must meet several requirements.  Among other things, the application includes a specification, which details in very clear, concise and exact terms how to make or use the invention so that someone else will be able to make or use your idea after reading it.  An application must also include drawings to further define and illustrate the invention.  Lastly, an application must include at least one claim.  A claim is what features or elements the inventor regards as entitled to protection.

Once your application is complete, it is filed with the USPTO where it will be examined by someone with a background that matches the field of your invention.  The examiner will perform a comprehensive, world-wide search to determine if your invention is new, useful and is not obvious in light of previous inventions.  After the examiner has completed the search, the applicant has an opportunity to respond to any rejections or reasons for not allowing the claims.  If the examiner and the applicant agree that some or all of the claims are allowed, then the USPTO will grant you a patent protecting those claims.

The entire patent process, from filing an application to receiving an issued patent, varies in time according to several factors.  The time a particular application will be pending at the USPTO depends on the complexity of the subject matter of the invention, the backlog and number of examiners at the USPTO, etc.  Applicants will usually receive the first Office Action within 12-15 months and most patents will be granted between 2-6 years from the filing date.

Patent protection is a very valuable asset and provides the inventor with an enforceable right for a relatively long period of time.  The process is very technical and failing to take the proper precautions can result in a potentially lucrative idea being deprived of some, if not all, of its protection.  Consulting with a registered patent attorney before starting the application process is recommended to give you the best chance of receiving a quality patent.  PSED Law’s own Todd Chawansky is a registered patent attorney who can assist you with your patent application.

For more information or to speak with us about your legal issue, please contact us in Ann Arbor at 734-665-4441, and in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

Selecting and Registering a Trademark

Any business, whether emerging or established and looking to expand, should consider one or more trademarks to help consumers identify the source of certain goods or services.   Regardless of any formal registration, trademark rights are created through their use in commerce.  Therefore, it is possible for different entities to obtain trademark rights in the same trademark for different goods or services or in different geographic locations.  Although state or federal registration is not required to obtain an interest in a trademark, it does provide some additional benefits.

In selecting a trademark, the strength or distinctiveness of the mark is critical to the mark’s overall level of protection.  Generally, the more distinctive the mark, the easier it is to register and prevent the use of that same or similar mark by another.  The strength of a trademark depends on the level of distinctiveness.  Fanciful marks are often considered the strongest, followed by arbitrary marks, then suggestive marks and finally descriptive marks.  Merely descriptive marks are typically not entitled to registration on their own, but may acquire distinctiveness over time.  Generic terms are not entitled to any trademark protection.

As noted above, a trademark is created through its use in commerce and registration is not necessary to have rights in a trademark.  Using an unregistered trademark gives the user common law trademark rights in the geographical area in which the mark is used, and slightly beyond in some cases.  If the mark is being used in interstate commerce, federal registration may be possible.  If the mark is only used within one state, state registration may be available.

Whether a mark is available for use and whether it can be registered are different inquires that need to be made.  Before an entity chooses a trademark and begins using it in commerce, it is always recommended to obtain a clearance opinion regarding the proposed mark.  A detailed search report will limit legal liability, as well as prevent wasting time, development and money on a mark that may already be in use by another, thus possibly requiring the entity to change its mark after years of consumer association and goodwill.

Trademarks are arguably the most important asset a business can have.  A strong, distinctive trademark is essential when trying to grow a customer base and become recognized as the source of a particular good or service.  As long as they continue to be used in commerce, trademarks can last in perpetuity.  Making an initial investment in selecting and securing your trademark will go a long way in successfully growing and maintaining your business.

For more information or to speak with us about your legal issue, please contact us in Ann Arbor at 734-665-4441, and in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

Nudes, Dudes, and Zoning Disputes

Anyone who has participated in a local zoning controversy—whether as a property owner desiring to alter the use of a parcel, a nearby property owner displeased with the proposed change, or a governmental agency (council, planning commission, zoning board of appeals) required to resolve the issue—knows full well that these matters can arouse strong emotions.   Indeed, a whole vocabulary of clever acronyms has emerged to characterize attitudes frequently encountered in these situations, such as NIMBY (not in my backyard), NIMTOO (not in my term of office), BANANA (build absolutely nothing anywhere near anyone), DUDE (developer under delusions of entitlement), and NUDE (neighborhood under delusions of entitlement).   Litigation may result from these disputes, and the threat of litigation is often made whether or not a party intends to follow through.  However, an important point to keep in mind is this:  unless a municipality clearly violates the Constitution or a statute in making a land use decision, or clearly abuses its discretion, a court is likely to uphold the municipal decision.   Hence, parties involved in these matters would be well advised to focus on how best to present and explain their positions, rather than on how a court might eventually bail them out.

A number of things are worth the attention of both the property owner wishing to make a change and nearby property owners opposed to the change:

• Remember that those on the other side feel as strongly as you do, and may have legitimate constitutional, legal, and economic interests at stake.   Consider communicating with those people in advance of seeking relief from the municipality (you may even be required by ordinance to do so), and consider making concessions which do not seriously undermine your position but which may enable the matter to be resolved with minimum unnecessary expenditure of time, money, and stress.

• Carefully review the statutes, ordinances, municipal plans, and other development standards which will provide the framework for the municipal decision, and consider discussing the matter with the municipality’s professional planning staff to determine whether there are interpretations relevant to those governing documents, or proposed changes to those documents under consideration, which might impact the municipality’s decision.

• Prepare thoroughly for any presentation to a decision-making body, considering such questions as:  Who should speak?  What documents or other exhibits should be provided?  Would any expert testimony be helpful?  Can community interests be addressed so that the presentation will not be viewed as merely an expression of narrow economic concerns?  How can the presentation be orchestrated so as to avoid undue repetition or personal attack?

From the standpoint of the municipal decision-making bodies, attention must be paid to a number of other matters:

• All relevant procedures, must be followed, such as providing all notices required by statute and ordinance, and conducting all public hearings which may be required.

• Adequate rationale should be provided for all decisions, with an indication of how all relevant standards have been considered.

Compliance with these suggestions will of course not guarantee complete satisfaction by all parties with the decision reached, but may at least help assure that all important concerns have been fairly and adequately addressed.

Pear Sperling attorneys have considerable experience in dealing with municipal government matters, both with regard to zoning and land use and many other topics, and have represented both municipal agencies and private parties in resolving such matters.   For more information or to speak with us about your legal issue, please contact us in Ann Arbor at 734-665-4441, and in Ypsilanti at 734-483-3626.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us athttp://www.psedlaw.com.