Category: Business Law

Philadelphia Business Lawyers: Uber Arbitration Appeal

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When patrons of Uber’s ridesharing service open the Uber app, they are taken to a registration screen that advises them that by using the app, they are consenting to Uber’s terms of service. These terms can be accessed by a hyperlink. One of these terms binds users to arbitration. After some of Uber’s customers filed an antitrust lawsuit against the company, Uber tried to hold them to the arbitration clause. But Federal District Court Judge Jed Rakoff looked at Uber’s registration screen and determined that it did not do a good enough job of ensuring that customers knew what they were signing. Specifically, Rakoff found that Uber did not give its customers fair warning that by using their service, they agree to waive their right to sue Uber in court.

This recent Uber arbitration appeal is part of a trend in litigation, whereby consumers are questioning the validity of their “consent” to hidden terms and conditions on their mobile phone screens. Generally, for consent to be valid, consumers must actively click on a button that says, “I agree,” or something similar. This is referred to as a clickwrap contract. Courts in some circuits are reluctant to honor any other type of agreements.

The Age of the Internet Waiver

In his ruling, Judge Rakoff noted that the right to a jury trial has been one of the most precious and fundamental rights afforded to citizens. Yet, in the world of the Internet, consumers are all deemed to have regularly waived this right on a daily basis and given up our access to courts altogether. He emphasized that many people are unaware of these conditions, and even if they are, they have no real ability to negotiate.

Uber appealed Judge Rakoff’s ruling to the 2nd U.S. Circuit Court of Appeals. Judge Rakoff agreed to stay the underlying antitrust class action until the 2nd Circuit weighs in on the validity of consumer consent to Uber’s arbitration clause. If the 2nd Circuit Court reverses Judge Rakoff’s decision, the antitrust class action will proceed to arbitration.

There has been some criticism to Judge Rakoff’s opinion. The Internet Association warned that his opinion unsettled existing case law. Members of the Internet Association include some of the largest online retailers in the United States. They also claim that consumers have become accustomed to this type of mobile contracting (with hyperlinked terms of service), and know what to expect.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green, P.C. Counsel Clients on All Aspects of Arbitration

Philadelphia business lawyers at Sidkoff, Pincus & Green have experience litigating and counseling clients in all facets of arbitration. From defending arbitration clauses, to challenging arbitration clauses in class action lawsuits on behalf of consumers, we have extensive experience with all aspects of business litigation. We also routinely litigate arbitrations and have a track record of achieving our clients’ goals. To schedule a consultation, call us at 215-574-0600 or contact us online today.



Philadelphia Whistleblower Lawyers: Enforcement Action Leads to $3.5M Award

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A whistleblower was recently awarded approximately $3.5 million by the Securities and Exchange Commission (SEC) for shining a light on wrongdoing that led to a successful enforcement action. According to the SEC – which did not name the whistleblower nor identify the wrongdoer – tips from whistleblowers have led to the recovery of $874 million in financial remedies since the SEC whistleblower program was created in 2012.

Many Americans remain unaware of the financial incentives available to conscientious employees who report their employer’s fraudulent behavior. Whistleblower protection extends to any worker who alerts government regulators to a variety of wrongdoing, including violations of the False Claims Act, the Clean Air Act, the Dodd-Frank Act, the Occupational Safety and Health Act, and many other federal statutes. A whistleblower is granted complete confidentiality by the government when the information disclosed leads to a successful enforcement action. Moreover, if monetary sanctions issued against a wrongdoer exceed $1 million, a whistleblower is entitled to an award ranging between 10 percent and 30 percent of the sanction.

Proceeding as a Whistleblower in Pennsylvania

Whistleblowers must proceed with caution and limit discussions of their concerns with coworkers. Instead, if an employee has a good faith belief that their employer has defrauded the government or consumers, they should first seek counsel from a lawyer who will ensure that whistleblower protections are in place before regulators are contacted. An employer who suspects that a member of their workforce is in talks with the SEC or other government officials may attempt to short-circuit an investigation by taking retaliatory action against a whistleblower. Fortunately, pursuant to the federal Whistleblower Protection Program, when a whistleblower’s actions lead to an enforcement action, the whistleblower is entitled to reinstatement to their previous position in addition to the aforementioned monetary award.

Philadelphia Whistleblower Lawyers at Sidkoff, Pincus & Green, P.C. Offer Reliable, Trustworthy Representation

Philadelphia whistleblower lawyers at Sidkoff, Pincus & Green P.C. understand the concerns of conscientious employees in their effort to shed light on wrongdoing by an employer. If you or a loved one has information relating to a potential whistleblower claim, call 215-574-0600 or contact us online to learn more about how we can help. At our Philadelphia offices, we proudly serve whistleblower clients throughout Southeastern Pennsylvania as well as South Jersey.

Philadelphia Business Lawyers: Pennsylvania Revenge Porn Law

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In 2014, Pennsylvania joined 25 other states in passing what is commonly known as a “revenge porn” law. 18 Pa.C.S.A. § 3131. The new law prohibits unlawful dissemination of intimate images which depict a current or former sexual or intimate partner in a state of nudity or engaged in sexual conduct with the intent to harass, annoy or alarm that individual.

The law makes it a crime for anyone to post explicit photos of a former partner online or send them to others without that partner’s consent. Violators could be sentenced to a year in prison and fined $5,000 if the victim is an adult, or five years in prison with a $10,000 penalty if the victim is a minor.

Difference between Invasion of Privacy Law and Revenge Porn Law

Pennsylvania already has an Invasion of Privacy Law which makes it a crime for someone to take nude photos of another individual without that individual’s consent. 18 Pa.C.S.A. § 7507.1. First time offenders of this law could be sentenced to a year in jail and a $2,500 fine.

The difference between the Invasion of Privacy Law already on the books and Pennsylvania’s new Revenge Porn Law is that in the case of revenge porn, a partner had given consent for the photographs to be taken of him or her. However, the Revenge Porn law is designed to curb the release of intimate photographs that, despite being taken with a partner’s consent, were ultimately disseminated to others, such as through email, or posted on the Internet, without that partner’s consent.

Opportunities for Civil Recourse

Victims of revenge porn searching for compensation may be able to find it through the civil legal system, but may face some challenges in doing so. If a victim does not know who released the photo, or a website is protecting the identity of an uploader, it will be difficult to name a defendant in a lawsuit. Victims of revenge porn will also have trouble pursing a claim against websites upon where the photo is published, because under federal law, internet publishers or websites are not liable for content posted by third-party users; therefore, a website cannot be held liable for a photo or video posted by a user. However, a website that urges users to submit the type of content the victim’s claim involves can sometimes deemed as engaging in the content as a co-developer or editor, and therefore open them up to potential liability.

While there are challenges, there are ways for a victim to obtain redress. One possible avenue is a claim for copyright infringement. The Digital Millennium Copyright Act (DMCA) permits victims of revenge porn to file a report for copyright infringement when they see that their photo is being distributed online, and leads to the issuing of a “takedown notice” to an internet service provider or hosting company. This notice expedites the removal of a photo from a website. A lawsuit for copyright infringement can also provide the opportunity to collect damages. However, there is a limitation with this avenue of recourse in that the copyright belongs to the person who took the photo; therefore, a victim who had a photo taken of them is not the copyright holder and will not be able to pursue this claim unless he or she can obtain copyright ownership.

Other causes of civil action include intentional infliction of emotional distress, private disclosure of public facts, intrusion upon seclusion and identity theft.

For more information, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

Philadelphia Business Lawyers: Prompt Payment Law Decision

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Prompt Payment Law Does Not Always Mandate Bad Faith Awards

In an important decision regarding public contracts, The Supreme Court of Pennsylvania reversed a Commonwealth decision automatically awarding attorney fees and a one percent penalty to contractors whose payments were breached in bad faith. The city of Allentown, Pennsylvania (Allentown) contracted A. Scott Enterprises (Scott) to complete a paving project.

After contaminated soil was discovered at the job site, the project was delayed. Allentown and Scott could not come to an agreement over the additional fees incurred because of the project’s delay and the contaminated soil. Scott then filed suit to recover losses on the delayed project. They were awarded $927,299. The jury found that the city breached its contract and acted in bad faith by refusing to pay Scott for the delays and damaged contract.

Though Scott received damages, they were not awarded attorney fees, the monthly one percent penalty, or interest. Scott then took the case to the Commonwealth Court which held that when the jury found that Allentown acted in bad faith, fees and penalties were mandated by law.

Allentown took the case to the Pennsylvania Supreme Court, arguing that the use of “may” in the Prompt Payment Law indicates that the award of attorney fees and penalties is subject to review on a case by case basis. That said, in most cases, public owners found to act in bad faith are required to pay public contractor’s attorney fees and penalties.

Does This Ruling Permit Exceptions?

Allentown has to take the case to trial court, where they may still be required to pay Scott penalties. The Supreme Court decision simply opened the door for exceptions to the rule.

Only in rare cases, very good reasons will exempt owners from paying out those awards. The Procurement Code will most likely prevail in most cases, requiring owners to pay their contractors on time and as agreed upon.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green, P.C. Tackle Tough Business Litigation

Philadelphia business lawyers at Sidkoff, Pincus & Green represent clients in a variety of business disputes. We handle cases involving OSHA investigations, wrongful termination, discrimination, overtime pay disputes, trademark infringement, business torts, and FTC cases. Call our Center City Philadelphia offices at 215-574-0600 or complete our online contact form to discuss your case.

Philadelphia Employment Lawyers: SEPTA Claim

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Court Rejects Appeal by Former SEPTA Worker on Claims for Hostile Work Environment and Discrimination

On August 8, 2016, the U.S. Court of Appeals for the Third Circuit denied the appeal of former SEPTA employee Marie Selvato, who sued SEPTA after she was seen at a taping of “Live with Kelly & Michael” while on sick leave. Selvato brought an action against former employee SEPTA for hostile work environment and discrimination. Selvato claimed she was sexually harassed between 2004 until she was terminated. Selvato’s claims were dismissed last year when U.S. District Judge Wendy Beetlestone of the Eastern District of Pennsylvania granted summary judgement to SEPTA, finding that she failed to show a connection between her termination and sexual harassment allegations.

Pennsylvania law requires claimants to first file a hostile work environment claim with the EEOC which requires that claims must be filed within 300 days of unlawful employment action. Mandel v. M & Q Packaging Corp., 706 F.3d 157, 165 (3d Cir. 2013). The trial court ruled that most of Selvato’s claims fell outside of this 300 day window. Selvato’s claims stemmed from instances of alleged sexual harassment between 2004 and 2012. However, a majority of the instances occurred between 2004 and 2009. Selvato claimed her supervisor James Stevens made two remarks within the 300 day window that rise to the level of sexual harassment. Stevens told her that he was “stalking her Facebook pictures” because he had gone to school with Selvato’s sister. He also told Selvato that he would like to “pet” a flower on her blouse because it looked soft. The Eastern District granted summary judgment against Selvato, which she subsequently appealed.

To make a hostile work environment claim, Selvato had the prima facie burden of proffering evidence to show the following elements: “1) the employee suffered intentional discrimination because of his/her sex, 2) the discrimination was severe or pervasive, 3) the discrimination detrimentally affected the plaintiff, 4) the discrimination would detrimentally affect a reasonable person in like circumstances, and 5) the existence of respondeat superior liability.” Mandel, 706 F.3d at 165. The Court of Appeals agreed with the lower courts conclusion that these comments, though offensive, did not rise to the level of physical threat necessary to establish a prima facie hostile work environment claim. The Court of Appeals affirmed the dismissal of the discrimination claim as well citing lack of evidence and pure speculation by Selvato. 

Selvato v. SEPTA, No. 15-3686, 2016 U.S. App. LEXIS 14524 (3d Cir. Aug. 8, 2016)

For more information, call our employment lawyers in Philadelphia at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

Philadelphia Business Lawyers: Rainbow Apparel Legal Fees Lawsuit

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Recently, the named partner of a small law firm, Michael Kimm, and co-plaintiff Rainbow Apparel, brought a lawsuit against KCC Trading, Inc. and several individual defendants, alleging that defendants failed to pay them rightfully earned legal fees. The trial court dismissed Kimm’s case, and the appellate court affirmed, on grounds that requiring clients to pay their attorney to sue themselves constitutes as unlawful fee shifting.

KCC and Rainbow Apparel had entered into a multi-million-dollar business venture together. KCC was to supply the financing for Rainbow’s business ventures. In October 2009, KCC retained Kimm’s law firm. They agreed upon a rate of $400 per hour for work performed by Kimm himself, and $250 an hour for work performed by Kimm’s associates. In addition to these fees set forth in the retainer agreement, KCC also agreed to pay the Kimm Law Firm $15,000 a month on a rolling basis, beginning on October 15, 2009. The contract setting forth the fee arrangement also included indemnification and termination clauses.

KCC fired Kimm in April 2010. Kimm then sent KCC the billing statements from October 2009 through March 2010, which totaled nearly $50,000. Then, several months later, Kimm sent KCC a second bill, charging the company over thirty thousand dollars for hours expended litigating against KCC to collect the unpaid legal fees.

An Unenforceable Clause

Kimm sued KCC on grounds that they had breached their contract. They also sued for quantum meruit (reasonable value of services), payment on the basis of account stated, and unjust enrichment. Kimm moved for summary judgment, but the trial court denied his motion. The trial court judge dismissed Kimm’s claim for the $30,000 incurred as a result of the fee litigation. The court reasoned that the indemnification clause was unenforceable because it violated public policy. The trial court also reduced the $50,000 sought by Kimm, finding that the bill was unreasonably high.

Kimm appealed, but the appellate court affirmed the trial court’s dismissal regarding the $30,000 fee. The court noted that requiring clients to pay their attorney to sue themselves constitutes unlawful fee shifting. The appellate court also upheld the reduction of the $50,000 fee as unreasonable.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green Have Experience Litigating Indemnification Clauses and Breach of Contract

If you are involved in a contractual dispute, the Philadelphia business lawyers at Sidkoff, Pincus & Green has the experience to handle your case swiftly and effectively. To schedule a consultation with one of our reputable attorneys, call us at 215-574-0600 or contact us online today.

Philadelphia Trial Lawyers: Judge Halts Rideshare Services

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On October 6, 2016, Judge Lisa Carpenter of the Philadelphia County Court of Common Pleas granted a preliminary injunction requiring that rideshare services such as Uber and Lyft cease operations in Philadelphia. Judge Carpenter ruled that these services, known as transportation network companies, (“TNCs”), violate the Americans with Disabilities Act and Philadelphia’s Fair Practices Ordinance.

The original Complaint was filed by a number of plaintiffs, including Rob Blount, the head of the Taxi Workers Alliance. The Complaint alleged that the companies discriminate against disabled riders because there are no requirements to ensure vehicles can accommodate wheelchairs or protections against refusing to allow service animals, as well as no protection against unfair pricing. In September, Blount amended the Complaint, alleging the Philadelphia Parking Authority violated the equal protection clause of the Constitution by not subjecting TNCs to the same “limitations, assessments, vehicle inspections, or driver requirements.”

If the TNCs violate the injunction, Uber and Lyft could be held in contempt of court.

For more information, call the Philadelphia business lawyers at Sidkoff, Pinus & Green, P.C. today at 215-574-0600 or contact us online.

Philadelphia Business Lawyers: Enforceability of Fee Agreement Via Email

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Recently, a Pennsylvania Superior Court ruled in a business litigation case where a contingent fee agreement, which was set forth in an email between an attorney and client, was enforceable against the client even though the client did not sign it.

In that case, the client owed approximately $40,000 to his attorney under that contingent fee agreement. The Court found that client should be responsible for about $39,000 of it. The main takeaway in that case has major impacts on how attorneys or other businesspeople can collect their fees. The fee agreement between attorney and client was enforceable since it appeared in an email between the parties and no signature by the parties was necessary. In that case, it may also be important to note that the email that contained the agreement requested a $32,000 upfront fee which the client promptly paid.

Emails Constitute as “In Writing”

The client attempted to argue that the fee agreement was not enforceable since the Pennsylvania Rules of Professional Conduct (RPCs) for attorneys requires that contingent fee agreements must be in writing. The court found that the client’s argument failed for two reasons: first because the Rules of Professional Conduct for attorneys do not have the same weight as substantive law in civil proceedings since those rules are intended to be relied upon in attorney disciplinary proceedings; secondly, the court said that the contingent fee agreement was in fact in writing, as required by the RPCs, since it was in an email sent from the attorney to the client.

Although attorneys and other businesses have traditionally favored signed paper contracts for these types of fee agreements, technology appears to be carrying more weight these days. Even though it was not mentioned in the Court’s opinion, the Court may have also found it important that there was no question that the client actually read and received the emailed fee arrangement since he paid the $32,000 in response to that email. Additionally, this client was likely quite knowledgeable in business matters since his attorney was defending him regarding a $1.5 million loan he received from his employer, a major bank.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green, P.C. Counsel on Business Litigation Issues

Call the Philadelphia business lawyers at Sidkoff, Pinus & Green, P.C. today at 215-574-0600, or contact us online, to see how we can protect your rights in when entering into or disputing business agreements.

Philadelphia Business Litigation Lawyers: NJ Court Upholds Arbitration Award

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A New Jersey federal court recently ruled that corporate officers could be bound by an arbitration agreement that was only signed in the name of the company. The court reasoned that the individual officers were alter egos of the corporation, and successors-in-interest to their company. Significantly, because the officers had relied on the arbitration agreement to assert a counterclaim during arbitration, the court determined that they could not now escape being bound by its terms.

New World Solutions, Inc. (NWS) was formed in 2007 to provide IT services to another corporation, Asta. NWS was solely owned by Neal and Coyne, who also served as directors. Two years after formation, NWS and Asta entered into a contract for the provision of services. But after NWS paid Asta four million dollars, Asta terminated the agreement, alleging that NWS submitted inflated invoices, created a malfunctioning replacement unit, and provided essentially useless network monitoring services.

Asta commenced arbitration proceedings against NWS. The relevant provision in the services agreement specified that disputes “between the Parties” would be resolved in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Although NWS was represented by counsel at the outset, at some point, Coyne, one of the directors, assumed representation and filed the counterclaim in arbitration. A separate arbitration was initiated against Neal and Coyne individually.

In addition to finding that Coyne and Neal were bound by the arbitration agreement, the arbitrator also determined that they had used NWS to defraud Asta out of hundreds of thousands if not millions of dollars. The principals were held liable for damages in excess of three million dollars. They appealed, and a New Jersey District Court confirmed the arbitration award in full on a motion for summary judgment.

The Importance of This Ruling in Business Litigation

 A threshold issue the court had to address was whether it could assert jurisdiction over Neal and Coyne because they were not named parties to the arbitration agreement. The court determined that pursuant to the Federal Arbitration Act, the court should determine whether a dispute is to be arbitrated, unless the parties agree otherwise. The court ultimately confirmed the award even though Neal and Coyne refused to participate in the proceedings.

Philadelphia Business Litigation Lawyers at Sidkoff, Pincus & Green, P.C. Provide Competent Counsel in Arbitration

This decision serves as an important reminder that corporate officers can be bound by arbitration agreements signed in the name of their principal. If you need counsel for arbitration, the Philadelphia business litigation lawyers at Sidkoff, Pincus & Green are prepared to help. With offices conveniently located in Philadelphia, we proudly serve businesses located in Pennsylvania and South Jersey. To schedule a consultation, call us at 215-574-0600 or contact us online today.

Philadelphia Employment Lawyers: Superior Court Enforces Contingency Fee Arrangement Written in an E-mail

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The Pennsylvania Superior Court affirmed an Allegheny County Court decision that awarded $40,000 to a personal injury firm in Pittsburgh. Flaherty Fardo, LLC v. Keiser, No. 1260 WDA 2015 (Pa. Super. Ct., Aug. 8, 2016).

The dispute was between the firm, Flaherty Fardo, and one of its clients, Thomas Keiser. Keiser claimed that a contingency fee arrangement written in an e-mail was unenforceable, because it was not a “signed writing to reflect the terms of the parties’ agreement,” and relied on the Pennsylvania Rule of Professional Conduct 1.5(c) to solidify his argument.

Keiser hired Flaherty Fardo to defend him in a lawsuit against Citigroup, his former employer. Part of Keiser’s compensation package when he was hired included an employee forgivable loan of approximately $1.5 million under a nine-year arrangement. When Keiser left the company after only three years, Citigroup sued to recover the remaining $1.03 million, plus interest and attorneys’ fees of about $400,000.

The contingency fee arrangement e-mail contained a $32,000 flat fee up front, and an additional ten percent of any savings realized by the firm from the total amount Citigroup was asking. Following arbitration, Citigroup was awarded the entire remaining loan amount, but no interest or attorneys’ fees. Flaherty Fardo then sent Keiser an invoice for $40,000, believing it had saved Keiser $400,000. After Keiser fired the firm and refused to pay, the firm filed a complaint against him.

The Superior Court, relying on precedent, found that the Pennsylvania Rules of Professional Conduct do not have the effect of substantive law, but are instead only used in disciplinary proceedings. Furthermore, even if those rules did have legal effect, the Court found that the arrangement would have been enforceable, because it was in writing. Furthermore, even though the arrangement was not signed and does not comply with the statute of frauds, the Superior Court stated there is no prior case law that states contingency fee agreements have to comply strictly with the statute of frauds. Therefore, the ruling was affirmed and Flaherty Fardo was awarded the nearly $40,000.

For more information, call Philadelphia employment lawyers at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.