The cornerstone rule of discovery in civil litigation is that parties to a lawsuit must preserve, gather and produce relevant documents.

However, “it is becoming increasingly difficult and expensive to carry out this basic obligation, given the staggeringly high volume and informal nature of our electronic communications in the workplace,” says John Shonkwiler, a partner at Novack and Macey LLP.

Smart Business spoke with Shonkwiler about the importance of forming better emailing habits.

What are some ways to improve emailing habits?

Stop ‘reflex’ emailing. Too often, we respond to email immediately. This is the texting culture invading the workplace, which is an environment that demands better judgment and discretion.

It is not inconsiderate or unprofessional to deliberate before responding to email.  Sometimes just waiting 10 to 15 minutes can make a big difference. Except in those rare instances where an urgent response is called for and cannot be made by phone, people should not fire off immediate responses.

Why is ‘reflex’ emailing problematic from a litigator’s perspective?

As the volume increases, so does the cost of electronic discovery. Reflex emailing exacerbates the problem by creating more email unnecessarily and so often it can be inconsequential. For example, a response of, ‘I’ll check on this and get back to you,’ is often unnecessary. And you don’t have to be a physicist to understand the laws of ‘e-gravity’: When you send more email, you receive more email. So, consider whether each email you compose has a purpose.

Also, emails that are carelessly or informally prepared are more likely to reflect poor judgment, convey inaccurate information, or contain sarcastic or flippant remarks on serious topics that don’t translate well on paper. These things make for bad documents in litigation. You want to think of every email like a potential trial exhibit. Ask yourself, if you were on the witness stand, would you like to be confronted with this? Often the worst documents that we see as lawyers as we’re gathering documents in discovery are careless emails.

How should employers teach employees about using better discretion?

Just ask employees to place a higher value on their email correspondence. Apply the same care and consideration when you’re sending an email that you would if you were sending a letter on your company’s letterhead. And remember to consider that your message might be better delivered in person or over the phone.

How does organizing help reduce exposure and litigation costs?

Email can be organized like paper correspondence. This means deleting the emails you don’t need and organizing the messages that you keep into folders.

This helps in at least two ways. First, it makes it far easier and cheaper to find and gather relevant email in response to discovery requests. Second, when every email must be accounted for and filed, or deleted, the sender tends to place a higher value on each email, give greater care to the contents and more carefully consider whether a message needs to be sent in the first place.

For people who have never organized their email, how can they get started?

If the task of sorting through every email in your inbox is too imposing, just move the entire contents of your Inbox into a folder titled ‘My Inbox as of [date].’ You can do the same with your sent items. This way, you can start clean and use your new habits going forward, and still have easy access to your old emails if you need them.

Have there been any recent developments in the law concerning email discovery?

Electronic discovery is probably the single hottest topic in continuing legal education courses, and has been for years. It is interesting, however, that for all the attention given to the issue, there has been relatively little discussion about addressing the root of the problem, our emailing habits. This is going to change as employers continue to learn about the significant costs of housing massive amounts of unorganized email.

John Shonkwiler is a partner at Novack and Macey LLP. Reach him at (312) 419-6900 or jshonkwiler@novackmacey.com.Insights Legal Affairs is brought to you by Novack and Macey LLP

Published in Chicago

Most small business owners believe running their businesses through a corporation protects them from personal liability. Generally, this is true. However, courts can “pierce the corporate veil,” holding shareholders accountable for the liabilities of a company when it’s found to be the “alter ego” of the shareholders.

“When shareholders use a company as their personal piggy bank, ignore formalities when operating the business and leave no assets in the corporation, courts will not let them be shielded from liability,” says Matthew Montgomery, an attorney at Stradling Yocca Carlson & Rauth.

Smart Business spoke with Montgomery about responsibly maintaining the corporate form.

What protections does incorporating provide?

Corporations provide protection from liability at a level you can’t get as an individual operating as such in the market. It’s a good way of limiting liabilities for shareholders of a company doing legitimate business and following proper procedures.

For example, if a small incorporated business owner has a delivery fleet and a driver has an accident, the company would be liable, and not the owner or shareholder. Also, loans can be taken out through the corporation without the shareholder having personal responsibility for repayment. Further, incorporation shields a shareholder from being held personally responsible for any regulatory or non-criminal violations made by the company.

Are corporate protections limitless?

No. There are rules that guide how a corporation should be run. When they’re not followed, liability for the company’s actions falls back on the shareholder, whether he or she is a startup inventor or running a large corporation with hundreds of subsidiaries. Corporate business formalities need to be followed and a level of capital needs to be maintained to handle liabilities. In instances where the corporation is found to be the ‘alter ego’ of its shareholder, then direct liability can fall on the shareholder.

What happens if someone is using a corporation as his or her alter ego?

Should the company be sued and the shareholder has been incorrectly using the corporate form, even if not explicitly named in the suit, the shareholder will be held personally liable for the damages inflicted.

A company often generates much higher liability than an individual. Without the legal protections of a corporation, facing charges can be catastrophic.

What’s considered an abuse of a company’s corporate status?

Generally, courts look to see if you’re observing corporate formalities, which means they want to see that you’re holding board meetings and important company decisions are being made by a board, so board minutes must be kept.

It’s also common for individuals to loan themselves money from the business or treat it like it’s their own piggy bank. Owners often think they put money into the company and they deserve it back, which is true; but the corporate form has to be respected, so a salary must be approved and paid and loans generated from the company must be proper business loans that bear interest.

How can companies ensure their corporate veil will not be pierced?

Research what your state requires through its department of commerce, such as the necessary officers, records you must have and taxes you must pay. And seek the guidance of limited corporate counsel to ensure you’re following all corporate formalities. This step is often skipped because people think it’s too expensive, but if you have to hire a defense attorney, it’ll cost much more.

Take the time to understand how a corporation protects you. Otherwise, you may unwittingly unravel those protections and become the alter ego of the corporation you’ve created. Dealing with this issue before it becomes a problem will save you countless dollars and a lot of headaches.

Matthew Montgomery is an attorney with Stradling Yocca Carlson & Rauth. Reach him at (949) 725-4285 or mmontgomery@sycr.com. Connect with him on LinkedIn at www.linkedin.com/in/mtmontgomery.

Insights Legal Affairs is brought to you by Stradling Yocca Carlson & Rauth

Published in National

Having diversity in the workplace not only brings a sense of harmony but also new perspectives that allow for creative development and collaborative innovation. Promoting acceptance and encouraging people with different backgrounds to be active in your company is just good practice — and it may keep you out of unwanted trouble.

Kristina Chung, a partner at Ropers Majeski Kohn & Bentley PC and an expert in employment law, says employee diversity can be a big boost to business, thanks to all the benefits that come with it.

“Having a diverse work force increases your own understanding of the greater world beyond,” she says. “We live in a diverse economy and global community now. This creates a clear business case for diversity to better understand our clients and customers. We also learn internally from different life experiences and perceptions of our colleagues to foster creativity, innovation, outside-the-box thinking and, ultimately, better service and products.”

Smart Business spoke with Chung to find out how to successfully build a diverse work force in your company.

Beyond race, religion, gender, sexual orientation and national origin, what are some concepts or characteristics that are related to employment diversity? 

There can be implicit biases attached to physical appearance such as weight, unattractiveness and body markings like piercings and tattoos. The same can be said for voice and speech impediments or for a person’s lifestyle choices or beliefs.

These biases can create an obstacle to promoting an inclusive environment. If you harbor preconceptions or subconscious notions about how bright, capable or productive a person is based on his or her outward appearance, speech or lifestyle, then you can harm your business because you may exclude someone who could be a significant benefit to your workplace.

What actions should an employer take to demonstrate support for a diverse workplace?

It’s important to show visible support and to take affirmative action. That can mean promoting qualified people who are of more diverse backgrounds into management-level positions or by engaging in community programs that focus on a diverse audience, including helping to provide scholarships and participating in mentorship and pro bono/volunteer services programs.

How can an employer avoid legal problems stemming from discrimination?

The importance of making available information about an employee’s rights, and providing updated training to and consistent monitoring of managers and supervisors, cannot be overstated. Companies should review their employee handbooks on a regular basis to make sure they are complying with their state’s respective laws, particularly as to their nondiscrimination clauses and prohibited conduct. And as to diversity, some companies are now incorporating a ‘commitment to diversity’ provision, although that is not required.

Companies need to ensure that their managers are properly trained, not just in the law, which is constantly evolving, but also for the actual handling of complaints and conducting of investigations. In California, larger companies are required to provide sexual harassment training and expanding those programs to help prevent discrimination could potentially help to reduce liability and damages awards. Diversity training goes hand-in-hand with an employer’s efforts to maintain a discrimination-free workplace. This type of training can include identifying, acknowledging and eliminating the implicit biases mentioned earlier.

Where should a business owner go for this type of training?

Seek the help of a trained professional with the proper background and experience in employment law. The benefit of using the services of a practicing attorney is that he or she will be up to date on recent legal developments. For example, California’s nondiscrimination laws relating to gender recently changed to specify gender identity and gender expression as protected categories. So now, employment handbooks can spell out their policies more clearly, which means employees can better understand their rights and employers can better understand what the law means and are better able to comply with it.

What should business owners do if a discrimination claim is filed against them?

Be open minded to hear everything that the employee has to say about the complaint first as part of a full-scale investigation. If the owner simply makes assumptions, it may lead him or her down the wrong path, such as litigation, that the employee never really even wanted. The owner should fully understand basis for the complaint and what the employee is looking for in terms of resolution.

During the investigation, the complaint should be taken seriously. That is why the person conducting the investigation must be properly trained so that he or she knows what is legally mandated and to make sure that all bases are covered. The owner should contact legal counsel to make sure he or she is complying with all rules and regulations, including not destroying documents and meeting required deadlines.

Kristina Chung is a partner with Ropers Majeski Kohn & Bentley PC. Reach her at (650) 780-1706 or kchung@rmkb.com.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Published in National