On July 23, 2010, Attorney General Eric Holder signed final regulations revising the Department of Justice regulations under the Americans with Disabilities Act (ADA). These new regulations address general nondiscrimination requirements relative to people with disabilities and adopt new Standards for Accessible Design that are consistent with the minimum guidelines published by the U.S. Architectural and Transportation Compliance Board (Access Board). These new design standards align the ADA’s requirements with other federal standards, as well as with model building codes, and reflect the experience gained in the 20 years since the first design related regulations were adopted.
The general nondiscrimination requirements became effective on March 15, 2011; however, the Justice Department delayed the effective date until March 15, 2012, to allow sufficient time to plan for implementation. Design professionals and businesses needed time to understand the effects of these new rules and evaluate how to incorporate the modifications into their future plans and projects, says Dale Hermeling, a partner with The Stolar Partnership LLP in St. Louis.
“With the nondiscrimination standards already in effect and with the upcoming March 15, 2012, compliance date on the design standards, now is the time for businesses to review their overall compliance with the ADA,” he says.
Smart Business spoke with Hermeling about the ADA and how the changes could impact a business’s compliance obligations.
Who is affected by these new rules under the Americans with Disabilities Act?
As with the previous rules, these modifications deal with Title II and Title III of the ADA. Title II addresses public entities, which include state and local governments and their various departments and agencies. Title III addresses private entities that operate public accommodations, places such as hotels, restaurants, bars, theaters, retail stores, doctors’ offices, etc. There is no limitation on the size of the business, and each is required to modify its business policies and practices in order to serve customers with disabilities.
These policies and practices need to address considerations for the expanded use of service animals, different types of wheel chairs or other power-driven devices such as Segways, seating requirements in assembly areas and effective ways for communicating with persons with disabilities.
What are the requirements relating to removal of barriers?
Public accommodations have been required under previous regulations to remove architectural barriers where the removal is ‘readily achievable’ or can be carried out without much difficulty or expense. Examples include the installation of ramps, making curb cuts in sidewalks, widening of doors, creating designated parking spaces, etc. All of these types of modifications should already be in place under the previous regulations.
Will building owners be required to modify existing facilities to make them more accessible?
If a building has failed to follow the previous regulations and hasn’t addressed barrier removal under the 1991 standards, it needs to address those now and can use either the 1991 or the 2010 Design Standard until March 15, 2012. If a building has already addressed these issues under the 1991 Design Standard, it is protected by a safe harbor and doesn’t need to take immediate steps, but if it embarks on other alterations to the building or facility, it will need to utilize the new 2010 Design Standards. Any new construction after March 15, 2012, will be covered by the new standard.
Who is responsible for compliance with ADA regulations in a lease arrangement?
Both the landlord who owns a building with a public accommodation and a tenant who owns or operates a business with a public accommodation are subject to the requirements. You may see provisions in the lease that impose the obligation on one party or another, but under the law, both parties are responsible.
Are there any tax benefits available for complying with these new requirements?
Section 44 of the Internal Revenue Code allows a tax credit for small businesses with 30 or fewer full-time employees or total revenue of $1 million or less in the previous tax year. This credit can cover 50 percent of the eligible access expenditures in a year, with a maximum credit of $5,000.
The tax credit can be used to offset costs associated with barrier removal and alterations to improve accessibility, or providing accessible formats for communication such as Braille, or large print signs or audio tapes. Section 190 of the code allows a tax deduction for all businesses, with a maximum deduction of $15,000 per year for costs associated with barrier removal or alterations .
What advice would you give a business owner about complying with the new standards?
The ADA has a variety of components. Whether it’s issues of general non-discrimination and dealing with the new Design Standards or the employment elements under the EEOC, business owners need to stay on top of these matters as they develop. They need to evaluate their policies and procedures to make sure that they comply with the new requirements and train their work force to help accommodate people with disabilities as required.
It is important that you have a policy in place that addresses how to respond to a person who might lodge a complaint and to document what happened during the course of the discussion. We can anticipate increased enforcement by the Justice Department, which could result in fines and other penalties.
Dale Hermeling is a partner with The Stolar Partnership. Reach him at firstname.lastname@example.org or (314) 641-5135.
Leases are rarely conducted on an entirely level playing field, as the landlord is in the business of real estate and the tenant is not. However, with planning and professional guidance, tenants can wrest away the advantage from the landlord and negotiate more attractive terms for occupancy.
“In today’s market, it is imperative that you identify hidden or unanticipated expenses in a lease,” says Richard Mersman, a partner with The Stolar Partnership. “Having a qualified attorney review the lease can save you tremendous headaches in the future.”
Smart Business spoke with Mersman about lease negotiations, what type of provisions and stipulations should be considered, and when to start the lease renewal process.
Why is it important for an attorney to participate in lease negotiations?
For most companies, lease expenses are one of the highest fixed costs on their balance sheet, second only to payroll. Certainly lease expenses — which include rent, common area maintenance costs, taxes and insurance — can have a substantial economic effect on a company’s overall financial performance.
There are a number of financial and legal issues that a tenant will face when negotiating a lease. You want to put yourself in the most advantageous economic and legal position in order to protect your income stream and your business.
What is the role of the letter of intent in the process?
A letter of intent is a tool that the tenant, and later, the tenant’s attorney, can use to streamline the lease negotiation process. The letter of intent defines the basic business terms between the landlord and the tenant.
Generally, the business terms will include key financial terms such as how much rent you are going to pay, what type of tenant improvement allowance the landlord will provide and whether or not there will be a free rent period. The letter of intent will also outline provisions with regard to expansion space, as well as relocation obligations and requirements.
When the attorney — who generally should not be negotiating the business terms — receives the letter of intent, it enables the attorney to concentrate on the legal issues at hand and not the business terms.
What type of provisions should a tenant fight for in a lease?
There are a number of provisions that a tenant should fight for. Commercial leases in today’s market are complicated, sophisticated documents. Generally, in Class A and Class B office buildings, landlords will have a specific lease form that they will provide to the tenant. Naturally, these lease forms are weighted in favor of the landlord.
The responsibility of the tenant’s attorney is to make sure that the tenant is not subject to additional expenses and/or legal obligations that were not originally contemplated in the letter of intent yet may be customary in the marketplace. Involving the tenant’s attorney early in the letter of intent negotiations can be very beneficial and can help eliminate obvious issues.
What stipulations should tenants avoid in a lease?
Make sure that there is no limitation on the use of the space; if the tenant wants to downsize, it may want to sublease space to a different type of business. Additionally, you will not want to be subject to a relocation provision without providing your prior approval. For example, you don’t want the landlord to move you from prime space in a building to space that is less attractive or desirable.
You also want to confirm the parking allocation for your company and identify where that parking will be, thereby ensuring that you have sufficient parking for your employees at a reasonable cost. Signage may also be a concern. Make sure that you have appropriate signage to identify your company within the building as well as outside the building so your customers and clients can easily find you.
Finally, be very careful about common area maintenance costs. The pro rata percentage charge should be accurate and based upon a formula of no less than 95 percent occupancy. This will protect your company’s share of the common area costs so, in the event that a large tenant moves out of the building, your proportionate share of the building costs does not increase.
How should a business go about negotiating a favorable lease renewal?
Start early. The sooner you find out where the market is and what comparable space might cost, the better off you will be. Most leases provide for anywhere between 60 days’ to one year’s notice of renewal, and 180 days is a common threshold. It is incumbent upon each tenant to determine the market rate prior to the 180-day period.
Currently, we are in a very favorable market for tenants. Landlords don’t want to lose a creditworthy, rent-paying tenant. As a result, tenants are able to negotiate a much higher tenant improvement allowance to refurbish space, as well as garner additional rent concessions.
How can a business find a qualified attorney to represent it in lease negotiations?
Referrals are generally the best method for identifying a qualified attorney, as you will likely have someone whom you respect making the recommendation. You can also turn to the local bar association and other legal directories for assistance in finding counsel.
While conducting your search for an attorney, it is important to look for specific experience in commercial leasing as it is a unique area of law that has become much more sophisticated over the last few decades.
Richard Mersman is a partner with The Stolar Partnership. Reach him at (314) 641-5125 or email@example.com.
In today’s competitive environment, noncompete and confidentiality agreements can be critical to maintaining an edge over your rivals.
And failing to have them could put your company out of business should your employees leave and take your secrets with them, says Susan Rowe, a partner with The Stolar Partnership.
“One of the primary assets that most businesses have — which they’ve often spent significant funds to develop — is their confidential information,” says Rowe. “This includes, for example, formulas, proprietary research, customer databases, pricing strategies and other trade secrets.”
Smart Business spoke with Rowe about noncompete and confidentiality agreements, what type of information to include in employee contracts and, if things go awry, what type of evidence is needed to pursue legal action.
Why is it important for employers to address noncompete and confidentiality agreements?
Missouri statutes protect confidential information that is a trade secret. It’s important to have a confidentiality agreement because you can use it to talk to the employee about the importance of protecting confidential information. You can also identify trade secrets and confidential information. If you fully describe what is confidential, the employee can’t later say, ‘I didn’t understand that this was or wasn’t confidential.’ Furthermore, you can include certain protections in addition to the protections that statutes might provide for the employer.
It’s also important to have a noncompete agreement. Absent a noncompete, former employees can leave to join a competitor, with nothing to prevent them from doing so. Even without confidential information, there are circumstances in which an employer doesn’t want someone it has trained — and spent significant resources doing so — to go out and compete against it.
What information should be included in a noncompete agreement?
It’s important for employers to realize that the enforcement of a noncompete agreement is a legal matter. Noncompetes can be expensive to enforce in the courts. Noncompetes undergo a lot of scrutiny in the courts because the law says such agreements are anti-competitive and can only be used to protect certain interests of the employer — such as the customer base or trade secrets.
If you’re protecting client relationships, describe the scope of the relationships and identify which are considered confidential and subject to the noncompete.
Also, be careful about the scope of the agreement in terms of its length and geographic restrictions. The courts typically do not allow for a very broad geographic scope or permit a noncompete to go on for a long period of time.
Finally, include remedies for yourself, such as attorney fees and other provisions, which will protect your business if you have to enforce the agreement.
If an employee signs a noncompete agreement but takes a job with a competitor, what steps can an employer take?
To prevent disputes, give the employee who is leaving or who has been terminated copies of the agreement upon his or her departure.
Employers who employ someone with an existing noncompete with a former employer — and are aware of the noncompete but continue to employ that person nonetheless — run the risk of being sued by the former employer on a tortious interference with contract claim. If you become aware of a former employee, bound by your noncompete agreement, working for a competitor, have your attorney send the new employer a copy of the agreement, thereby putting the new employer on notice that you believe there is a noncompete agreement in effect. Often, this will dissuade the new employer from continuing to employ the person. You can also send a letter to the former employee, reminding him or her of the noncompete agreement and stating that you intend to enforce the provisions. Sometimes that’s enough. Other times, employees will proceed in the face of a noncompete and you will have to go to court to enforce the agreement.
What evidence does a business need to pursue legal action against a former employee whom it suspects has leaked confidential information?
As with any lawsuit, before it is filed, make sure that you have good-faith basis for the lawsuit and see that much of your evidence already in place. If one of your former customers says, ‘Oh, your former employee is calling on me,’ ask that person to send a note or letter identifying the person who has called on the business.
If you think the former employee is talking about your confidential information, ask your customer to write down the substance of the conversation. This allows you to have a statement ahead of time that you can use to support what you will be alleging in the lawsuit.
In addition to noncompetes, what other methods can a business use to protect its intellectual property?
Employers should be mindful of what’s out on the Web. Commentators have talked about employers who have found their former employees disclosing confidential information or engaging in developing relationships with former customers on such sites as Facebook and LinkedIn. When employers find this type of information, they should demand that the former employee stop this conduct or remove confidential materials, or face legal action for failing to do so.
Employees change jobs because they’re dissatisfied — they feel like they don’t have opportunities or that they’ve been treated badly. To prevent people from leaving with confidential information, it’s important to build loyalty with your employees, listen to them when they’re upset and treat them fairly.
Susan Rowe is a partner with The Stolar Partnership. Reach her at (314) 641-5119 or firstname.lastname@example.org.