Have a Judgment? Now Try to Collect On it.

So you won your case, and the court or jury has awarded you the compensation that should, in full or in part, compensate you for your losses. But now you have a second hurdle: collecting on that judgment. Not every judgment creditor will just hand over what the court says that it owes, and not every judgment creditor can afford to pay whatever judgment has been entered against it.

To learn more, keep reading as our Chicago business litigation attorney at Ellis Legal clarifies your legal options.

Who is the Debtor, and What Kind of Debt is it? 

In collecting your judgment, one thing to consider is whether the judgment is for a business/commercial debt or whether it is against a consumer for consumer debt, generally considered life, household, medical, or personal items or debts.

Often, the line isn't clear between personal or commercial debts, but it's an important distinction because the law provides consumers with personal or household debt more protections than it does business debtors. There are also laws that you, in collecting your judgment, can run afoul of and end up owing money for violating when collecting consumer or personal debts that don't apply to business debts.

Collecting When There's No Money or Assets

Many people or businesses say that they have no money or assets to pay a judgment, and you do have a right to do post-judgment discovery to see if that's true, identify the debtor's assets, and possibly collect on them.

If there are assets, you can have the sheriff collect those assets—but that's much more difficult with consumer debt, where consumers have protections and exemptions.

Even if the consumer or business legitimately has no money or property to pay the judgment, you have time, and should the Defendant's financial situation change in 1, 5, or even 10 years, you can still collect on the judgment. You can follow up with the debtor every few years to see if they are in a better financial situation as time goes on (although admittedly, this isn't ideal if you need the money from the judgment sooner rather than later).

Liening and Foreclosing on Property

In Illinois, you can lien people's property. This would allow you to be paid on the judgment of when and if the property ever sells. But again, this requires waiting until that actually happens.

You can foreclose on the property, but Illinois has a $15,000 exemption ($30,000 for married couples) if the property is homestead property. So, if the property doesn't have much equity, the time and effort of foreclosure may not yield much. If it does have equity, the threat of foreclosure is usually enough to bring people to the bargaining table to work out a solution to paying the judgment.

Garnishing Wages

You can garnish a judgment debtor's wages, but obviously, this isn't applicable when the debtor is a business. If the debtor is a consumer, you again may have to deal with certain exemptions; there is a formula to calculate the maximum amount that a creditor can take from a debtor's regular wages.

Don't get in trouble when collecting on your judgment–do it the right way. Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today for help.

What Happens if You Have a Default Entered Against Your Business?

When someone comes to your door with a lawsuit, that’s stressful enough. But it gets even worse when a process server shows up at your door with court paperwork saying that you have defaulted and a judgment entered against you.

You knew nothing of this lawsuit. You never had the chance to defend yourself. What happened, and what do you do now? Read on as the Chicago business ethics attorney at Ellis Legal explains more below.

How Could a Default Judgment be Entered Against You? 

There are a number of ways that a judgment can be entered against you without you knowing, and depending on what happened, you may or may not have the chance to reopen the case so that you can defend yourself.

Often, judgments are entered against businesses without them knowing when the process server did not serve the original lawsuit on the person designated to receive service for a business by law. That person is normally the company’s registered agent, but many Plaintiffs will instruct process servers to just serve corporate officers, directors—even lower-level employees.

That isn’t valid service on a company, and if a judgment is entered against your company because the service was made on the wrong person, you can fight the default and have the case reopened.

When It Is Your Fault

There are times when the fault is yours. For example, if the process server served your registered agent, and he or she never got the court documentation to you. Or when the registered agent gave it to someone in your office, they did nothing about it.

Overturning the Default

In those cases, you can still fight the default—it just will be much tougher.

You will have to show the court that you used due diligence and that the failure to respond to the lawsuit was a result of excusable neglect. You will also have to show that you have a meritorious defense—that is, if given the chance to defend yourself, you have something that would constitute a legitimate defense.

You may have to have a full hearing, with depositions (or at least affidavits) and witnesses, to show how and why you did not respond to the lawsuit.

 Act Quickly

You do need to act fast—the standard to have the judgment vacated is much easier within 30 days than if the motion is filed after 30 days have expired. Additionally, the court can consider how quickly you acted after learning of the default in deciding whether or not to vacate the default.

Judges and Defaults

On the one hand, many judges understand how life works and don’t want someone saddled with a judgment when they never had the chance to defend themselves. On the other hand, judges have busy dockets and often prefer to close cases and move on, as opposed to reopening what appears to be a closed case.

Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today for help if you have a judgment entered against you or if you’re trying to get a judgment against someone else. 

Attorney Client Privilege in Corporate Communications with Counsel

When speaking with an attorney, we all generally understand how attorney-client privilege works. However, when a client is a Chicago business entity, the boundaries of where confidentiality and privilege begin and end often aren’t as clear, and as a result, can end up in misunderstandings over what is confidential communication and what is not.

For additional information on the nuances of attorney-client privilege for businesses, our Chicago business litigation lawyer at Ellis Legal explains more below.

Personal and Corporate Business

The confusion comes from a simple fact: corporations are their own legal entities capable of being represented by an attorney. But they do not speak; it takes human representatives to do that.

This obvious fact can lead to some difficult problems. One major problem is the blurring of the line of who exactly the attorney represents—the company or the actual person speaking to the attorney.

From the corporate representative’s standpoint, who knows that he or she is speaking on behalf of the company and, thus, is protected by attorney-client privilege, it can be easy to transition from protected corporate communication with the attorney to private communication that is not protected.

For example, a corporate representative speaking with a corporate attorney about corporate matters can easily mention the representative’s “defective car that he has to sue for,” or “my mom’s will that I have a problem with,” or any other personal legal matter.

The representative does not understand that what he is saying to the attorney, once it goes beyond corporate communication, may not be protected by the attorney-client privilege. It is also incumbent on the corporate attorney to inform the person that the attorney does not represent the employee personally so as to avoid any confusion—or, worse, a conflict of interest.

Who Can Speak to the Attorney? 

Larger companies may have many employees. Is every employee conversation with a corporate attorney covered by the attorney-client privilege?

The answer is generally yes, so long as certain requirements are met.

The employee speaking to the attorney must be speaking about company business or legal matters or seeking advice from the attorney on the company’s actions. The employee also must have company permission to speak to the attorney or authority to communicate with the attorney in order to ensure that privilege is attached to the communication.

When Employees Leave

There can be legal issues when an employee who speaks to the company attorney about the company's business leaves the company. If another party asks that employee what he or she said to the company attorney or what was said to them, the company may have to ask the court for a protective order in order to preserve attorney-client privilege.

hy it is important to try to control who in your organization is communicating with the company attorney or who is sitting in meetings, calls, and other places where confidential information is being conveyed between the company and the attorney.

Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today to help you understand what your company counsel can do to help you. 

The Ethics of Speaking With Former Employees of a Company

Imagine that you need to take the deposition of someone who used to be an employee of the Defendant or Plaintiff (a business) in a lawsuit. The business was, and still is, represented by an attorney, and thus, if you were to speak with someone at the business, you would need to communicate through the business’ attorney. 

But what about the former employee? On the one hand, that person was, at the time, represented by the business’ attorney. But he or she is no longer an employee of the business. Can you speak with that former employee directly, or must you still communicate solely through the business’ attorney? 

Our Chicago business litigation firm at Ellis Legal discusses the nuances of this question below.

You Can Speak Directly With the Former Employee

As a general rule, most courts permit attorneys to contact and communicate with former employees of a company without having to speak through the company attorney. 

There are a few reasons for this. The primary reason is that the former employee is no longer working for the company and no longer has the authority to speak for or on behalf of the company. 

Some Caveats to the Rule

But it’s not that cut and dry. To the extent that a former employee’s acts or statements could be assumed to be that of the company or to the extent that the former employee still communicates with the business, you may still need to communicate through the business’ attorney. This includes situations where the former employee might still speak for or on behalf of the company or where the former employee continues to act as a formal or informal advisor to the company. 

What Information Can You Get? 

Even if you do feel like it is OK to communicate with the former employee, that doesn’t mean that you can use that communication to learn about information you otherwise wouldn’t be legally entitled to learn. 

For example, in the same way that you couldn’t ask for and receive confidential trade secret information from the company itself, you couldn’t ask for and receive that information through your communication with a former employee. 

You also should avoid trying to get the former employee from disclosing information that the employee learned that would have been protected by the company’s attorney-client privilege. 

So, asking the former employee about how the company decided to enter into a business deal would be fine. Asking the former employee what the company’s attorney told the company CEO about the business deal would start to approach an ethical boundary.

Never assume that a former employee is, in fact, unrepresented. In many cases, the former employee may be represented personally by the company attorney. 

Be Clear Who You Are 

When speaking with former employees of a company, even if they are unrepresented, make sure that they know who you are, your role as an attorney, and the matter that you are speaking to them about. 

Don’t get in trouble communicating with unrepresented parties. Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today.

Handling Confidential Information and Trade Secrets When Speaking with Investors

If you’re starting a business or have a business but want to expand, innovate, or reach out into new markets, you may be looking for investors. Investors are the lifeblood of your business, and you want to put your best foot forward in proving to them that their money is in good hands with you.

Our Chicago business lawyer at Ellis Legal explains more below.

What About Trade Secrets? 

But how do you show an investor what your plans are, why you’re a good bet, or where their money is going without giving away your valuable trade secrets? 

You may or may not know these investors, but either way, what’s to stop them from sharing the information you provide to them in your “pitch” to others, or worse—using that information themselves?

Using an NDA

Certainly, you could have every investor who hears your business plans and proposals sign an NDA. But that can be problematic; most investors won’t sign an NDA.

Real investors hear a lot of proposals. They may invest in multiple businesses. Some of those businesses and ideas may be similar to yours. They often do not want to sign an NDA that could even open the door to an accusation that they are misusing, disseminating, or misappropriating information that was protected by the NDA.

In many cases, investors don’t have to sign an NDA. If you won’t tell them about your business idea without an NDA, someone else will—they are the ones with the money that you need.

Practically, forcing an investor to sign an NDA can also give off an air of distrust or of being litigious, at least at the early stage of discussions, impressions that you’d be better off avoiding.

Keep It Simple, at First

All this means that you need to become skilled at providing a business pitch to investors that do not give away any kind of protected information or business trade secret.

There are ways to do this, especially if you work with your business attorney on proper wording and information that both informs the investor of what he or she needs to hear but also stops short of giving away any information that you may not want your competitors to learn about.

In fact, you have probably given friends or family general information about your ideas without divulging information that you consider to be proprietary or secret.

Later On, If There’s Interest

If your investors are interested and, perhaps, want to move on to a later stage of consideration and negotiations, where there will be some commitment, then there may be a bigger window to convince an investor to sign the NDA. At that point, the investor sees that he or she may get some benefit from the relationship, making an NDA much more palatable.

Speak with an experienced Chicago business litigation attorney at Ellis Legal by calling (312) 967-7629 today. During a free initial consultation, you can discuss the legal issues surrounding your investments and protecting your trade secrets.

Injunctions and Restraining Orders: How are They Used?

In most legal cases in the civil system, the question is whether a party owes money to the other side, and if so, how much. But there are times when money is not sufficient, or it’s not all that it takes to prevent harm to a party. Sometimes, it takes a court to tell someone to stop doing something that they are doing. This is called an injunction. 

Read on as our Chicago business lawyer at Ellis Legal explains injunctions further.

When Injunctions May Be Necessary

Although we think of injunctions as being used in domestic violence or other cases involving domestic disputes, injunctions also play a role in business law and commercial litigation.

An injunction is used when a party is being harmed and will keep being harmed every single day so long as the offending behavior continues. Imagine these situations:

• A neighbor has an animal that is causing damage to your property, and the damage is occurring regularly.

• Someone is using, disseminating, and profiting from your intellectual property, and this is going on daily.

• Someone is saying defamatory statements about you, and the statements are being repeated and published in numerous outlets.

• Someone has stolen your business’ trade secrets, and those trade secrets are being used by the other party on an ongoing basis.

In these cases, there is ongoing harm every day, which must be stopped.

Temporary and Permanent

You can get a temporary injunction, a permanent one, or both. 

As the name suggests, a temporary injunction is issued at or near the beginning of the case. It is the court telling someone to stop what they are doing temporarily, pending the ultimate outcome of the case. This is often useful when the case looks like it will be longer, and thus, there is little hope of ever getting a permanent injunction in an expedited manner.

Parties can seek a temporary injunction if they can show that they will suffer harm that cannot be remedied or repaired by money. The party seeking the injunction must also show that it has a reasonable chance at winning when and if the case goes all the way to trial.

A permanent injunction is entered at the conclusion of a full-blown trial, with evidence being presented. Once the final judgment is entered, an injunction can be entered by the court, along with any monetary damages that a party may have suffered.

What is a TRO? 

Although used interchangeably, a temporary restraining order, or TRO, is often used to stop harassing activity or activity that may cause physical harm or to prevent a person from engaging in certain behaviors. 

Unlike temporary injunctions, which, if granted, will usually last until the ultimate, final outcome of the trial, TROs expire automatically after 10 days unless extended by the court.

Emergencies

In some cases, a party can get an emergency temporary injunction or restraining order entered without notice to the other side. These are only for short durations of time and only when notifying the other side may take too much time or when notification may present harm to the party asking for the injunction.

Do you need to have an injunction entered or to fight against one? Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 today.

Avoid Common Trust Account Scams

As lawyers, we spend a lot of time learning as much as possible about the law. But what many of us don't do is become experts in technology or how that technology can be used against us. Yes, scammers are in the legal world as well, just waiting to fool attorneys or deceive attorneys into transferring their money or looking to illegally tap into attorneys' trust accounts.

Our Chicago business and ethics attorney at Ellis Legal explains more below.

You're' Ultimately Responsible

Recognizing and avoiding scams matters; while they may be sympathetic, the ARDC does not see it as an excuse that you were fooled—you are the ultimate guardian of your trust account and ultimately responsible, both legally and as far as your bar license is concerned, for theft that happens from one of your trust accounts.

Cleared and Uncleared Funds

If you have a trust account, always be mindful of funds that are in your trust account but aren't yet available to be used. Those funds haven't cleared, but many attorneys are impatient or under pressure from rushed clients or impending deadlines, so don't wait for the funds to clear. Many attorneys figure that they wouldn't be able to do anything with the funds unless they've cleared.

But that's not true. Many banks will allow you to transfer or wire funds even though they have not cleared. 

So, if someone fools you or rushes you into cutting a check or transferring money, the funds that have not cleared aren't there. That means that your trust account is debited for whatever money you use, which leads to a trust account deficit.

Debtor-Creditor Scams

Be wary of "clients" who pressure you to disburse money quickly. Any scenario where person one is sending you funds to disburse to person 2 (usually your "client") should be monitored carefully; these "debtor-creditor" scams using a lawyer's trust account are common. The money looks like it's there, but it's not, so when you disburse it to your "client," you're actually paying that person out of your trust account funds.

Fake Accounts and Emails

Other scams aren't unique to lawyers; things like emails that look like they are from a person or a business, but they are not. Or, emails that say that your trust account has been debited (for example, for a subscription that you never signed up for) are usually scams, looking to get you to devolve personal information or information about your trust account.

Fakes aren't the only problem—the email or account you are sending money to may be a real, actual email or account, but it may just have been hacked by someone other than the actual owner.

Paper Checks

Be wary of your paper checks. The simple act of throwing them away can lead to fraud; it's easy for a wrongdoer to get a check from the trash, duplicate it, and cut a check from your trust account.

Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today if you have a problem with the ARDC related to your trust account or any other ethical issue. 

Common Provisions in Shareholders Agreements

If you go on the public markets, you usually will buy stock without having to sign or agree to a shareholder agreement—or at least, the terms of the agreement aren't of significant importance, given that you are just one of thousands (or more) other shareholders.

The simple fact is that when large publicly traded companies sell stock, the purchasers are really no more than investors. They have no active role in the operation or governance of the company, at least not directly.

Read on as our Chicago corporate attorney at Ellis Legal explains common provisions in shareholders agreements.

Smaller Companies

However, with smaller, midsized, or private companies, shareholders usually take on a more significant role. Because they are much more involved, having a shareholder agreement is of vital importance.

Shareholders may need more protection with a shareholder agreement, given that there is not the same assurance that a smaller business has the management or capital that one traded on the public markets does. There may also be the risk of the business closing or engaging in illegal activities.

In some cases, shareholders are given shares specifically for their engagement with the company—that is, in return for work in an area of expertise they are doing for a company.

What's in a Shareholder's Agreement? 

All of this is why a shareholders agreement becomes very important. A typical shareholders agreement will spell out what is being paid for the stock, including specifying if any in-kind services are being provided or what services are expected to be provided going forward.

The shareholder agreement will also specify whether any work needs to be done by the shareholder at all; some shareholders are just passive investors.

It may also specify what information the shareholders have rights to view and access and how and when they can make such requests. The agreements may also include confidentiality provisions.

Board Member Shareholders

Shareholders who are also board members should understand what their duties and rights are with respect to both positions, something that should be stated in the shareholder's agreements, as well as your corporate governing documents. 

Losing one position doesn't mean losing the other—most companies have procedures for removing board members, but that doesn't divest that person from ownership in their shares.

Voting

In some matters, shareholders may have a right to vote (usually with shareholders who are more active or knowledgeable about corporate operations), while more passive "investor-only" shareholders will not have any right to vote. Either way, you can structure it as you like, so long as the voting rights are spelled out in the corporate documents, as well as the shareholder agreement.

Losing Shares

Shareholder agreements will also normally spell out what happens in the case of loss of shares—can they be transferred to just anyone? What if they are lost involuntarily, such as through bankruptcy, divorce, or death? In many cases, the company has the option to repurchase the shares.

Do you need shareholders' agreements drafted or reviewed? Let us help. Speak with a Chicago business and corporate attorney at Ellis Legal at (312) 967-7629.

Legal Mistakes That Could Tank Your New Business

So you're starting a new business. This is a new beginning for you, and opportunity and success are hopefully on the horizon. You may have analyzed your business decisions in advance and strategized to make your new venture profitable. 

But what about legal strategy? There are many common legal mistakes that new business owners make that can sabotage their ability to be successful in the future. Our Chicago business attorney at Ellis Legal explains more below.

Employment Laws

One common mistake is failing to account for the numerous employment laws, which can lead to trouble. From the Fair Labor Standards Act to the Americans With Disabilities Act to workers' compensation laws to OSHA regulations and everything in between—it's easy to get lost in the nuances and details of so many state and federal employment laws.

Does your business have policies and procedures to address these laws? Is there a policy and procedure where aggrieved employees can address complaints? Do you really know when employees must be paid overtime pay? These are things that shouldn't be overlooked when starting a business.

Remote Work and Personal Devices

In today's world, we do work remotely—even if our jobs aren't entirely remote. But what happens to your important and sensitive corporate information that may be on your employees' personal computers or devices that they use when they are working out of the office?

Even if you don't have full-time work-from-home employees, a device policy, as well as policies that address what property belongs to the company and how to get that information back when the employee leaves, are vital to protecting your trade secrets and confidential company information.

Intellectual Property

Companies often design slogans, jingles, or logos—or even name the business—without giving any thought to whether they actually own the intellectual property that they are using.

Searches for all IP—your company names or slogans—should be done in advance, as should securing domain names online. And if you're using outside contractors to do any design work or musical works for your company, you'd better make sure that you, and not they, own the rights to what they create or what you are using.

Corporate Documents

Many businesses just want to get started and operate as soon as possible. Things like bylaws, procedure manuals, management agreements, or other documents that serve as the "rulebook" for how your company will operate are often overlooked or else just given a cursory bare-bones treatment (often with some random forms people find online).

Make sure you take the time to draft comprehensive governing documents that work for your specific company and that they cover all possible contingencies.

Mixing and Commingling Funds

In a smaller company, it can be easy to commingle money. The company pays for your personal car. You pay personally for some office equipment. The company's PayPal account is deposited into your personal bank accounts.

Even if you're not stealing anything, and all funds are accounted for, you're still commingling your personal funds and the company's funds. 

Take the time to separate the two and have corporate resolutions if the company will be paying personal expenses for any owner or manager of the company. Otherwise, you could end up losing the corporate legal protection that normally comes when you incorporate.

Speak with a Chicago business and corporate attorney at Ellis Legal at (312) 967-7629 today to avoid legal problems later on.

Understanding the Unlicensed Practice of Law: Avoiding Trouble

For most licensed attorneys, the question of when someone is or must be, licensed to practice law isn’t something you give much thought to. You, as an attorney, are licensed, so there is nothing to worry about, right?

Allow our Chicago ARDC defense lawyer at Ellis Legal to delve further into this topic below.

Getting Into Trouble

One way that validly licensed attorneys wind up in legal trouble is that they have staff, or paralegals, who are working for them and practicing law, often inadvertently. And when you, as a licensed attorney, allow someone working under you to practice law who is not licensed, you can be the one facing discipline by the ARDC.

That includes not just paralegals or legal assistants but any attorney whose license is suspended or who may be awaiting admission into the Illinois bar.

What is Practicing Law?

It can be hard to determine what is or what is not practicing law—or where the boundary lies between just giving advice or assisting someone and actually being a lawyer practicing law. As a general, albeit not always a helpful rule of thumb, many courts have defined the practice of law as rendering any service that requires the use or any degree of legal knowledge.

That can sound circular or tautological. But as a general rule, you may want to ask yourself whether something someone is saying is something they would need a law school education to say. If so, it’s practicing law–and someone does not need to go to court or even file anything with a court in any case to be practicing law.

Form Preparers

So, for example, assisting someone in filling out a form would not be the practice of law. Explaining to them the legal implications or consequences of their actions while filling out that form could be the practice of law.

This is the way that many companies that help people fill out divorce or family law forms, or bankruptcy forms get away with doing so: they say that they are just helping people “fill in the blanks” of forms, but they are not explaining the legal ramifications of the answers people put down, nor are they helping people strategize what the best answers would be (at least, that’s what many of these services say).

In reality, many people or services who offer to “fill out forms” (often with the promise of affordable services) are actually practicing law illegally. In many cases, there is simply no way to separate the filling out of legal forms from practicing law. Even just telling you which form to use or what response to select on a form is practicing law.

Paralegals and Legal Assistants

Paralegals are a gray area. They can, on the one hand, convey legal information you instruct them to convey to clients. 

They cannot, however, give their own advice or answer legal questions from clients without conferring with a supervising attorney. In Illinois, there must be a supervising attorney; paralegals are not allowed to work independently of a licensed attorney.

Do you have an ARDC problem or legal issue? Speak with a Chicago business and legal ethics litigation attorney at Ellis Legal at (312) 967-7629 today.

Understanding the Impact of The Case That Overturned Chevron

The Supreme Court recently passed down a decision that may not, on the surface, seem like it will impact your business. It did not get as much media attention as some other Supreme Court decisions this term. But it could upend the way you do business. Our Chicago business lawyer at Ellis Legal explores the impact of the case that overturned Chevron below.

Heavily Regulated Industries

Many of us are in businesses that must comply with heavy federal regulations. Almost every single industry, from energy and power to environmental concerns, to food service and preparation, to websites, transportation and trucking, workplace safety, how workers get paid, vehicle design and manufacture—all of it, and more, must comply with thousands of pages of federal regulations.

It is important to understand how all these regulations and rules came into existence to understand how the recent Supreme Court decision affects your business.

How Rules are Passed

We all know that Congress (or the state legislature, if we're talking about a state law) passes laws. 

However, the problem is that the laws Congress passes cannot address all the details that help people (and businesses) understand what is expected of them. Laws often need details, such as the law's exceptions, consequences, definitions, or explanations.

To make that happen, once the law is passed, the President allows his executive agencies to make rules, "fleshing out" or filling in the blanks, for what is not in the actual law that Congress passes. These rules have the same effect as laws—even though they are technically being passed by executive branch agencies and not Congress.

Executive Agency Deference

For many years, under a Supreme Court case called Chevron, courts believed that whatever these agencies did or said was generally going to be treated like a law—that the agencies would be given deference by courts in the event of any lawsuit related to the rules these agencies pass.

But now, under a case just decided by the Supreme Court called Loper Enterprises, that is no longer the case. 

The Supreme Court has said that courts do not have to give this deference or this respect to what the agencies do. Now, courts are free to interpret agency rules how they see fit, and they no longer have to assume that whatever the agencies feel or decide or pass is necessarily correct, the way they did previously.

What Will Happen Now? 

We don't yet know how this will affect businesses. On the one hand, it could make agency rules easier to challenge and give them less weight, some say lessening restrictions and rules placed on businesses.

But others have concerns that with Chevron's deference gone, businesses will now have more uncertainty—it may be more difficult to know what a court will do and when and if an agency rule is challenged. Businesses may not be certain of what could happen when a particular rule is challenged in court.

We just don't know yet. However, the way that agencies govern private businesses and industries may have changed for the better, and if you are in a heavily regulated industry, now is the time to get good legal counsel.

Don't violate government regulations. Let us help you navigate those waters. Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today.

You’re Getting Divorced: Do You Need an NDA to Protect Your Business?

When we think of nondisclosure agreements and the need to protect our valuable business trade secrets, we often think in terms of protecting their information from rogue former employees or from our business competitors. But what about your spouse? When divorce comes around, protecting your valuable business secrets is something that you may want to think about.

Read on as our Chicago business attorney at Ellis Legal explains more.

They Know a Lot

Whether your spouse works in or at your business or not, the fact remains that for many people, our spouse is a trusted business advisor. We trust his or her advice, and he or she knows about our business, whether in a professional capacity or just from hearing us talk about the business in the car or at the dinner table.

Your spouse knows a lot about you and your business and your business dealings. A lot of that information could be seriously damaging if it gets out to the general public. So when divorce seems to be on the horizon, you may wonder: what will happen to the information that my spouse knows about the business?

When Should You Consider an NDA? 

There are times when you legitimately should be concerned about what a spouse knows about your business and its dealings, such as when divorce is looming.

Imagine these situations:

• Your spouse knows about something about your business that could get you, or it sued, or worse, in criminal trouble

• Your spouse is vindictive, threatening, or has made comments about telling people vital information about your business

• Your spouse feels that he or she isn’t getting what he or she deserves in the divorce, which could lead to the need for very invasive financial discovery about your business in the divorce case—information that could be damaging if it was used against you

• There is something about you, personally, that you feel could have a negative impact on your business if it was revealed—perhaps something that you’ve said or done or the way you may have behaved in your personal life

Negotiating for an NDA

The good news is that you can negotiate, as part of any negotiated settlement, a nondisclosure agreement with your spouse upon divorce and include it in any mediation or marital settlement agreement.

The bad news is that if your divorce goes all the way to a trial, you won’t get any nondisclosure provisions. A family court judge does not have the authority to require that either party remain silent about business terms, to gag what either party says, or to impose penalties for disclosing confidential business information to the general public.

That means that for business owners who have concerns about what their soon-to-be ex-spouse knows about the business, a resolution outside of court may be something to strive for if at all possible.

Project your business, no matter what the situation may be. Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today.

Using Time of the Essence Clauses

Many of the contracts and agreements that we sign have deadlines for them, whether they are deadlines to complete contractual milestones or deadlines to make payments. And while you may think that these deadlines are important, you may be surprised to learn that a court may not consider these time deadlines to be as important as you do. Our Chicago commercial litigation lawyer at Ellis Legal explains more on this below.

Do Time Deadlines Matter? 

As a general rule, if a party breaches a contract, a court is going to want to see that the breach was material. Material breaches not only allow you to sue for damages, but they also allow you to refuse to complete your part of the contract in return.

There are a lot of different definitions of what a material breach is or is not. But when it comes to timed deadlines, missing those deadlines is not always considered to be a material breach or one that warrants your being able to back out of your obligations under the contract.

Many courts will look at the overall agreement, and so long as, in the end, everybody got what they contracted to get, the fact that something was done late won't be a big consideration for the court.

Using a TOTE Clause

That's where time is of the essence, or TOTE provision comes in. 

A statement in your agreement that time is of the essence tells both parties (and the court if you need to enforce the contract) that the timelines in your agreement are not merely flexible or suggested deadlines, but rather, that the timing of the contract is something that the parties materially relied upon, in making the contract.

A TOTE clause tells the parties and the court that time matters—including for payment (which is especially important in installment agreements, where payments are made over time or after the performance of certain contractual milestones).

When to Use TOTE Clauses

Although a court will consider your TOTE clause in any kind of contract, they are best used in contracts where time really does matter. Examples may be construction contracts or contracts involving real estate, but any time you can make a plausible argument that the other party missing time deadlines has cost you injury or damages, a TOTE clause will likely be enforced.

Despite the existence of a TOTE clause, you don't want to go to court over a delay that was trivial, minor, or which, in the end, didn't cost you anything or damage you in any way.

Waiving TOTE Clauses

Be aware that, like any contractual provision, you can waive a TOTE clause. So, for example, if you informally look the other way when a contractual deadline is missed or don't do anything to enforce the time deadlines in your agreement, it would be hard, later on in court, to argue that your time deadlines in your contract were as important as you say that they are.

Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today for help drafting your business' agreements and contracts. 

Your Business Received an OSHA Complaint: Now What Do You Do?

You run a tight and safe ship at your place of work. You care about your employees’ safety, and you know the safety rules for your industry or field. But then it happens: You get a notice of a violation from the Occupational and Safety Hazard Administration (OSHA). What now?

Let our Chicago commercial litigation lawyer at Ellis Legal explain your options.

Fight it or Not? 

The first thing to do is to read the violation and make a decision on whether or not you want to agree to it or contest it. This is important because if you want to contest the allegations in the notice, there are strict deadlines.

Missing those deadlines could lead to your business being penalized and you losing any possible defenses to the charges that you would have otherwise had. That’s not just losing the chance to challenge the notice—it includes the potential loss of the ability to challenge the charges in court if the matter ever gets to a court.

Posting the Notice

One negative aspect of getting cited by OSHA, regardless of what you want to do with the charges, is that the violation must be conspicuously posted at your workplace for 3 days or until whenever the violations are corrected, whichever is longer. You can incur even more fines and penalties for not posting the notice, and the requirement to post doesn’t change even if you are challenging the allegations levied against you by OSHA.

Should You Agree? 

Why would you just agree to the charges in the notice? In most cases, you do have the option of correcting the infractions in the notice (there will be a time limit provided to correct the infractions, and your attorney can negotiate for more time if it is needed to make the corrections).

This may be a good strategy if the allegations are minor or correctable or if you genuinely know that there was an oversight by your company.

Challenging the Allegations

If you do want to challenge the allegations against your business, you must contest the charges on an official “Notice of Contest” OSHA form within 15 days after you receive the violation notice from OSHA.

The notice allows you to have an informal meeting with a local OSHA official, which may allow you to resolve the problem quickly and informally. You must request the meeting within the aforementioned 15-day period.

If the complaint can’t be resolved through negotiations, OSHA will likely file a complaint formally against your business. The complaint is an administrative law hearing.

Available Defenses

You may have defenses at your disposal, including the fact that OSHA requirements would not have been possible to comply with, that OSHA had no permission to inspect your business, or that workers violated your company policies and procedures, which were OSHA-compliant.

Remember never to retaliate against or punish in any way any employee who makes an OSHA complaint. That can get you in trouble from both the employee and the federal government.

Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today for help if your business has a legal issue with the government. 

Supreme Court Changes the Definition of Adverse Employment Action

If you have a business with employees, you may already be aware of the various state and federal laws that protect your employees. And you probably know that you cannot punish or "do bad things" to employees on the basis of race, gender, nationality, age, sexuality, or disability, among other protected classes.

Read on as our Chicago business attorney at Ellis Legal explains adverse employment actions.

Adverse Employment Actions

But just what is a "bad thing?" 

In other words, an aggrieved employee who wants to sue your business for harassment, discrimination, or retaliation often needs to show both that you (the employer) engaged in one of those behaviors and that the employee was punished somehow. Legally, these punishments or negative consequences at work are called adverse employment actions.

We all think of being fired as an adverse employment action, and it is. But there are other adverse employment actions that can give rise to an employee who feels he or she was discriminated or retaliated against, suing your business.

Some examples may include:

• Denials of promotions, or of training or job assignments that may lead to promotions or salary increases

• Giving employees "impossible" jobs or impossible workloads that they cannot possibly succeed in doing

• Denying or not giving bonuses to employees or other favorable things at work (like offices) to employees

• Isolation from social events or office gatherings

• Denials of raises or promotions 

Is a Job Change an Adverse Employment Action? 

Recently, the Supreme Court heard a case that asked whether it was an adverse employment action where an employer changes an employee's job title, but otherwise, the employee doesn't suffer anything else—in other words, the change in job position or title carries the same salary and same prestige or status, as the old job. 

Put another way—is a change in job by itself, with no significant negative consequences, an adverse employment action, allowing an employee to sue?

Even Minor Changes Can be Actionable 

The Court ruled on the side of the employee, saying all the employee has to show is some change, which was motivated by or because of retaliation, harassment, or discrimination, even if the change is not material and even if the change carries no significant adverse consequences.

The employee suing still needs to show that he or she is in a worse position than before the job change for the change to be "adverse," but the employee doesn't need to show how worse off he or she is, nor does the employee need to show that he or she suffered any kind of significant harm by the job change.

It does not matter whether the Plaintiff (the aggrieved employee who is suing) was transferred or suffered a change in job title, status, or position. All that matters is that he or she suffered some harm—even if it was minor or relatively insignificant.

Be careful How You Treat Employees 

This will likely open the door to a lot of litigation over whether or not employees have suffered adverse employment actions. However, it has made it easier for employees to make a case for discrimination or retaliation, and it is something that employers need to be wary of.

Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today for questions about your business and its employees. 

What Does the Board Do in a Nonprofit Organization?

A nonprofit organization, like a traditional for profit organization, must have a board of directors. But that board has a different role in a nonprofit organization, than it would in a traditional company, because of the differing missions and goals between the two types of organizations.

Our Chicago corporate lawyer at Ellis Legal explains more about the board in a nonprofit organization.

Differing Roles

As a general rule, a Board of Directors role in a traditional company, is to protect the interest of the shareholders, many of whom have little or no role in the day to day operation of the company, nor any say in who the company officers will be.

By "protect the interest of shareholders," it means that the Board's goal is to maximize profits for the shareholders by making the company as profitable as possible, hence increasing shareholder dividends.

However, that runs against the idea and mission of nonprofit organizations because nonprofits have no shareholders, and while they can and do make a profit, that profit is not given to any shareholder, board member, or officer of the nonprofit organization.

Roles of the Board

If the board doesn't try to maximize profit for any shareholders in a nonprofit organization, what exactly does it do?

In a nonprofit organization, the Board's job is to both protect outsiders with a stake or interest in the business (such as donors or members of the organization) and also to protect the nonprofit organization itself.

Some examples of things that a board of a nonprofit organization may do, oversee, or regulate include:

• Making sure that the nonprofit company is using money the way the money should be used—that can be in accordance with the terms of a grant, or else, in furtherance of the stated mission of the nonprofit.

• Making sure that company salaries and expenses are within the company budget and that expenditures don't jeopardize the continued existence of the nonprofit

• Managing grants and fundraisers and overseeing company officers to ensure that company money is being spent or invested wisely and prudently in a way to maximize return on the money

• Taking measures to ensure that the company maintains a good image with the general public, which can include public outreach, but also ensuring the company doesn't violate any state or federal laws

• Investigate suspicions of wrongdoing, mismanagement of money, or other actions that could jeopardize the future of the organization.

The Role in Raising Money

A private business sells a product or service, which reaps financial rewards for the company. 

However, that is not always the case for a nonprofit, which may actually engage in activities that potentially lose money. That means that the Board may have to be more engaged in fundraising activities than the board of a traditional company, which can rely on sales to make money.

Fiduciary Duties

Although its duties may differ from a traditional company, the board's fiduciary duties in a nonprofit organization, are the same as in any company. Board members must avoid having conflicts of interest or from self dealing or diverting opportunities away from the organization.

Speak with aChicago corporate law attorney at Ellis Legal at (312) 967-7629 today for questions about your profit or nonprofit organization.

AI “Robot Lawyer” Pays Settlement in Lawsuit Against It

It seems that computers, and specifically artificial intelligence, are taking over every part of our lives. But recently, one website tried to let AI take over legal representation—a decision that has now gotten that company into trouble.

Our Chicago business lawyer at Ellis Legal explains more on this below.

The DoNotPay Robot Lawyer

In 2015, a legal chatbot called DoNotPay was founded. The website’s service was, supposedly, allowing people to get out of traffic tickets, without using an actual human lawyer. The site claimed it was the first “robot lawyer,” and started to expand into legal areas outside of handling traffic tickets.

The site was eventually sued by a user of the site, who tried to use documents generated by the site but who said that the documents it created were not usable due to poor or inaccurate drafting. The problem, according to the lawsuit filed against it, was that the website was neither an actual robot, nor an actual lawyer.

The user said he tried to use the company to handle some small claims court filings, and to draft some corporate documents and operating agreements. The user said that he thought the site used an actual attorney.

The lawsuit, which became a class action, was successful in terms of claims that alleged false advertisements. The site agreed to pay out a settlement to the aggrieved Plaintiff, although whether the company has completely shut down isn’t clear.

Unauthorized Practice of Law?  

A former case, which had alleges that the site engaged in the unauthorized practice of law, was unsuccessful. That suit was brought against DoNotPay by an actual law firm that had sued for unauthorized practice of law—although the court there never reached that issue, instead saying that the law firm that sued, didn’t have standing to bring the suit in the first place.

The judge there said that the lawyers couldn’t show how they were harmed by DoNotPay. The court said the firm did not prove that they had lost clients, or had a damaged reputation, because of the site.

AI in the Legal Practice

Like other services, DoNotPay uses AI to practice or assist in the practice of law. However, there is a difference between an actual, licensed, human lawyer using AI to assist in the provision of legal services and a service where AI is the actual legal representation.

However, even human attorney can get in trouble with the use of AI; there have been instances where attorneys rely too much on AI—such as when attorneys allow AI to draft legal briefs or court documents, without reviewing them, which can and has ended up with the AI citing to fake or nonexistent case law being submitted to courts.

Remember that attorneys are ultimately the ones liable for what their AI does–even if the attorney is not technologically proficient, or even when the attorney him or herself is deceived by the AI. 

Don’t run afoul of your legal ethics. Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 today if you or your firm has any problem or issue involving the ARDC.

Anticipatory Repudiation: Breaching a Contract With Just Words

When we think of a breach of contract, we often think that it is actions or the lack thereof, that make up a breach of contract. But in fact, our words can also constitute a breach of contract, even if the contract is not actually breached.

Anticipatory Repudiation

That’s called anticipatory repudiation. With the right expression of future intention to not perform under an agreement it can allow a party to cancel a contract, or even sue for breach of that contract.

Imagine that you agree to supply IT support for a large company, and there is a contract that details the terms of the support that you will provide. You later learn that the premises or business where your employees will provide the IT services is farther than you thought it was, and thus, you want extra compensation for gas or gas mileage.

You tell the other side that you cannot provide the services unless extra funds are provided for the gas mileage—a term that was not in the original agreement.

Even though you haven’t actually breached the agreement (yet), you have expressed an intention to breach the contract. As such, you could, under a theory of anticipatory repudiation, be held to be in breach of the agreement.

A Clear Statement

To be found to have breached a contract under this legal theory, there must be a clear and unambiguous expressed intention of a refusal to perform under an agreement. So, in our example above, saying, “It will be pretty tough for me to provide those IT services, knowing how far your offices are,” may not be a specific enough intent to not perform the contract to warrant anticipatory repudiation.

Assurances

The Uniform Commercial Code does, in some instances, allow the non-breaching party to ask for assurances that the party that may be repudiating still intends to perform under the agreement. The repudiating party may be required to show some proof of the intention to perform. If that proof is not shown, both parties may be released from their obligations under the contract, and the non-breaching party may be permitted to file a lawsuit.

Repudiating by Actions

You can also repudiate a contract by saying nothing but rather by your actions. So, in our example above, imagine that the IT company packed its bags, closed its office, and disconnected its phones before the IT services were scheduled to start. The business that needed and contracted for the services could safely assume, by the IT company’s actions, that there was no intention to perform on the contract and, thus, could act accordingly.

Note that when it comes to payment conditions, anticipatory repudiation normally will not apply. So, for example, someone can say, “I’m not paying you, ever,” 100 times—but until the actual deadline for payment has come and gone, the payee could not sue for nonpayment.

Speak with a Chicago commercial litigation attorney at Ellis Legal at (312) 967-7629 today for help with your business law and commercial litigation legal issues. 

Breach of Contract Cases: Common Mistakes Non-Breaching Parties Make

Let's say that you have a contract, and the other side of the contract is in clear breach of the agreement. It seems like an easy case. The contract and the facts of the case are in your favor. What could go wrong? It turns out that things can go wrong—even if you are the one that's "in the right" in your breach of contract case.

Our Chicago business litigation lawyer at Ellis Legal discusses breach of contract cases below.

Being Angry: Watch What You Say

One mistake people make when they feel the other side has breached a contract or agreement is that they say things in anger that they should not. It's not that being angry legally prevents you from winning a breach of contract case. It's that the things that you write or text or say when you're angry are often not well thought out—and you could say things that damage your case.

And, if the breach of contract case comes down to a factual, "he said/she said" question for a court to decide, you don't want to seem irrational or unhinged when the judge or jury sees what you wrote or said to the other side.

Waiving Contractual Remedies

Certainly, working things out outside of court is always preferable. And often, working with another party that has breached to try to cure a default or breach is both cost-efficient and makes you a better human. But be wary: some of the things you do when trying to work out contractual breaches can cost you later on.

The course of your dealings in the face of a breach, can end up waiving rights that you otherwise would have had under the prior agreement. So, if you just agree to allow a late delivery, a late payment, or allow someone to provide substandard services, whatever penalty you had in the contract for those breaches, may be seen as waived by you, given your previous hesitancy or refusal to enforce those provisions.

This doesn't mean you need to run to court in the face of every breach of contract. It does mean that if you do decide to work with the other side, or even "look the other way," you should have a writing that specifies that you aren't waiving any other contractual rights you otherwise would have had.

Mitigating Damages

If you are being damaged by a breach, you have a legal obligation to do whatever you can to lessen or reduce your financial injury or damages.

So, for example, if a contractor doesn't come and repair your computers when it should have under an agreement, you need to get another computer repair person in as soon as you can—you can't just sit, do nothing, and be out of business perpetually and try to collect all of those damages as part of the breach.

Don't make mistakes that can harm your breach of contract case. Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 today.

Morals, Ethics and Fiduciary Duties When Your Company is Dissolving

Although we don’t like to think about it, there comes a time when your business needs to wind down and cease operations. Maybe it’s voluntary, such as when you are just retiring, or involuntary, such as when creditors or bad business are just making it more difficult to continue.

One thing to remember when you are winding down business operations, is your duty to the company. Dissolving a business can create a lot of ethical problems and dilemmas, because there may be a lot of people pulling you in different ways.

Our Chicago business attorney at Ellis Legal explains more below.

Creditors and Investors

On the one hand, you may have creditors who insist on being paid whatever debts they may still be owed. 

But on the other hand, you have shareholders or other investors—and if the company has assets to sell or liquidate, they may see those assets as something that they should receive their fair share of. In the meantime, you may be thinking of the future—protecting your family from liability or ensuring you have money to take care of them.

Don’t Take Advantage

If you are an officer, director, or owner, you likely can see the end of the road before your investors, shareholders, or creditors do. That can open the door to the temptation to take advantage of things—for example, to pocket a few more dollars or to send a business opportunity another way.

That’s bad news—don’t take advantage of your position and, thus, violate your fiduciary duties just because you have advanced notice of the business coming to an end.

Dealing With Creditors

You should inform your creditors that your business is ending and winding down. In fact, you should treat yourself as a fiduciary to your creditors, as well as your business. This is to avoid creditors coming after you, personally, for business debts, which they will do if they suspect that you have furtively taken assets, profits, or cash for yourself or your investors without letting creditors know.

Creditors will also come after you, personally, if they suspect that you are engaging in any actions that could be considered fraudulent transfers. For example, they may sell off assets for pennies on the dollar or transfer corporate property into the names of friends or family.

You have a legal obligation to satisfy your creditors from the proceeds of any profits or liquidations from the company before your investors get any of that money. That may not please your investors, but remember, investors get paid from profits from the company, and profits come after the payment of debts to creditors.

You can, of course, challenge a creditor’s claim if you don’t believe it to be valid. However, any funds that the creditor claims should be held back and not paid to other creditors or investors until the dispute is resolved.

Be Above Board

When a business is wrapping up, investors may be angry or upset. This is when they will likely most scrutinize your corporate books, records, and dealings. It is not a time to do anything that could be second-guessed when it comes to your fiduciary duties.

We can help whether you’re starting or ending a business. Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 today.