Category Archives: Van Gils Law

(Published in the Piedmont Business Journal column “Parting Shots”, Winter 2014)

I hope that the readers of the Piedmont Business Journal had a good 2013 and can look forward to an even better 2014.  Before sailing off into the new year, this is a good time to reflect and review.  We can all improve.  For example, did you have any problems or complaints from clients or customers?  Did any employees leave in an unhappy fashion?

Years ago, my brother and I built a sail boat in an Indonesian fishing village.  Before taking it out on a journey around the island of Java, we embarked on a number of “shake out” cruises to test the rigging and how various mechanics would hold up in uncertain conditions.  So before sailing off into 2014, ask yourself, did any warning lights on your dashboard come on or flicker during 2013?  Even if such incidents did not occur, it is good to look back to see what can be improved.

Like a boat, a business  should not leave the harbor until its internal structure is secure. That includes having the appropriate entity, clear agreements between principals and investors, a solid employment system and strategy, and a sound management team with clear lines of responsibility.  If there were any close calls or warning signs during 2013 and you’re still on your feet, consider yourself fortunate but do not tempt fate.

In addition to self refection and review, it is a good idea to seek experienced professional assistance to conduct an audit of your legal foundation and practices for you may not be fully aware of the all of the issues your business faces.  Additionally, your own passion for your business may impair your ability to be fully objective.  Well-run companies use audits to improve performance and assure compliance with the many local, state, federal, and international laws and regulations.  Non-compliance, lack of proper business documentation, unclear contracts, uneven employment practices and weak intellectual property protection can cause sudden and significant losses. By uncovering problems earlier, you can save legal and other expenses – and you, your board, and your shareholders (or members) will rest easier. The goal of an audit is to eliminate possible problems and improve practices in many areas, such as procurement, contracts and intellectual property.

A successful audit will generate solutions that improve your business, in addition to searching for non-compliance. The audit will generate best practice recommendations which will allow you to seize opportunities and prevent liability.  This enables you to focus on the bottom line and important business goals. Not only can future legal problems and costs be avoided, audits can also reveal unknown business opportunities in various areas such as capital allocation, expansion, and more effective business structures.  The goal of an audit is to change things for the better and to make your journey more successful.  I wish you all success as you sail into oceans of prosperity in 2014.

I am very pleased to have been elected to the Board of Directors and then selected to serve as President of the Greater Warrenton Chamber of Commerce.  The year 2014 promises to be full of growth and opportunities to further improve the quality of life for our businesses, non-profit organizations and residents.   The Board, which includes two past presidents, is comprised of talented individuals from all aspects of the business community.  I very much enjoyed the annual dinner where the Board and the deserving award winners of the Business Excellence Awards were introduced.  The excellent article about that evening in FauquierNow.com can be found on the link below.

http://www.fauquiernow.com/index.php/fauquier_news/article/warrenton-chamber-honors-seven-with-2013-awards

During my law practice over the past twenty years, I have been active in many chambers of commerce as I provide legal services for businesses.   While businesses leaders appear to be most vocal about taxes and regulation, what I actually detect to be the biggest vulnerability and one business owners can directly do something about is human resources.

 Ironically, the single most valuable asset for all businesses is the people that operate it but the mishandling of the obtainment and retention of employees and the termination of the employment relationship too often results in the loss of time, energy, morale and money. Managing employees is becoming increasingly complicated. The area of human resources presents a gauntlet of state and federal legal issues which can be tricky to navigate. Maintaining a work force can present legal issues in an assortment of areas such as immigration and homeland security, fair labor standards, family medical leave, compensation and benefits, discrimination, trade secrets, confidentiality and non-competition.

Other attorneys have told me that for most companies, it is not whether, but rather when they will be faced with legal action by a present or former employee. Human Resources experts have identified many factors that may explain this increase, including an expansion of the employment laws, a greater awareness by employees of their rights under the law, and an increase in the number of attorneys who are willing to represent disgruntled employees.

I practice what I like to call preventive law. It is important to take a proactive approach to prevent lawsuits. Having a comprehensive and standardized system and plan in place to create a foundation from which a work force can grow is critical. Otherwise, it is difficult if not impossible to keep up with regulatory and legal requirements which are becoming more complex.

One watch word I use for my business clients is “system”. It is important to develop a system of hiring, review, and termination when necessary.   Not treating every employee the same creates a morass of possible pitfalls. Develop good HR policies and review them for relevance and compliance with legal regulations periodically.

It is not just dotting the “I’s” and crossing the “T’s” legally which is important. Basic respect and a positive environment play a large role. While the people which operate a business are its greatest assets, they are more than assets like phones or computers. Finding ways to make employees feel a part of something and encouraging their growth goes a long way.  However, if an employee does not work out, the manner of termination is critical. An employee is facing the loss of income and his or her feelings are often hurt. It is during this process and how it is handled where the most claims arise. Yes, Virginia is an employment at will state and perhaps an employee does not have a good legal claim but unfortunately, I have witnessed that the lack of a good legal claim has not kept a former employee from bringing suit. The business may win the law suit or have it thrown out altogether but the process will be expensive.

The decision to hire a work force involves not just the cost of salaries and benefits, but the time and effort to learn HR laws and concepts or obtain advice from HR professionals to build this most essential part of the business. It may run for a while without adequate care but the risk of a massive breakdown is lingering and truly, with building a productive happy workforce, an ounce of prevention is worth many pounds of cure.

(Published in the Piedmont Business Journal column “Parting Shots”, Summer 2013)

One of the reasons I enjoy business law is the creative, interesting and dynamic entrepreneurs I have the pleasure of working with. Their creativity has resulted in an explosion of names, phrases, and art used to identify their businesses. Unfortunately, this is another aspect of preventive law that most people do not check.

Because nearly every business of every size has a web site, their names, logos, or identifying phrases can be seen all over the globe. Accusations of infringement can come from just about anywhere, and our courthouse doors are open to litigants from all over the world.

Not only can allegations of infringement be expensive, your name, logo and phrases used to describe your business are critically valuable assets. They distinguish your business and its products and/or services from all others. This form of intellectual property represents the reputation and financial value of a business. For example, the Coca Cola swirl and McDonald’s golden arches are so well known that accompanying words are no longer even necessary.

Being forced to make changes not only costs in reworking print materials and web sites, it can have the effect of confusing customers and, worse, making them disappear altogether.

There are many misconceptions regarding the use of a name, especially on the Internet. Obtaining a domain name is not enough to keep a name safe. It is simply the first step. In fact, use of the domain name itself can lead to a claim of infringement. Names, phrases, and art a business uses should be as thoroughly considered as any other item in a business plan. It is the identification of who and what the business is. A diligent search should be conducted to look for potentially competing names, words, or logos. Then, if the mark has any value at all, I encourage registration with the U.S. Patent and Trademark Office.

Although common law stipulates that a person or a company acquires rights in a mark based on its legitimate use of the mark, federal registration provides several valuable advantages.

Federal registration provides a legal presumption of the registrant’s ownership and exclusive right to use it nationwide. Common law rights are often expensive and difficult to prove. Additionally, federal registration provides constructive notice to the public of your claim of ownership, and the ability to bring an action in federal court.

Federal registration can be a basis to obtain registration in foreign countries and it provides the ability to prevent importation of infringing foreign goods.

A good rule of thumb: Any business asset worth having is worth protecting.

(Published in the Piedmont Business Journal column “Parting Shots”, Fall 2013)

It was with great interest that I read the April 9, 2013 opinion of Judge Jams C. Caheris of the U.S. District Court for the Eastern District of Virginia in the matter of Cameron Jibril Tomaz vs. It’s My Party, Inc. d/b/a I.M.P Inc. et. al.     I recommend reading this opinion for it presents a good primer of some basic contract principles which are always good to review, but a primary issue was whether or not a contract could be construed from email messages and some performance on the part of one of the parties.  In this case, the Court found that no contract existed because in one of the emails it was clearly stated that the contract was still “subject to signature and approval …..”.

The dispute involved a musician Cameron Jibril Thomaz (performing under the name “Wiz Khalifa” and a concert promoter It’s My Party, Inc. (d/b/a “I.M.P, Inc.”).  Mr. Thomaz claimed that I.M.P., Inc. breached its contractual obligation to promote and sell tickets to his concert which was to take place at the Patriot Center on the George Mason University campus.

The Court hung its ruling primarily on the clear statement within the email chain that the contract was still subject to “signature and approval of the Artist”.  Without that statement, it may have been ruled that a contract existed even though the promoter did not intend for there to be an enforceable obligation.  Even with such a statement in the email chain, the promoter ended up defending itself in federal court which is not an inexpensive experience.

I have seen this occur too many times with otherwise experienced and sophisticated business people.  Unfortunately worded emails, whether it be a single email or the typical litany of conversations in an email chain, can be construed as a contract either as a writing or as evidence of the terms of an oral agreement.  Email has many conveniences and it is indeed helpful.  It avoids “phone tag” and enables one the luxury of thinking before responding.  However, too many times, business people do not take the time to use the luxury of deliberation before responding.  I prefer good old fashioned face to face in person communication for matters which are really important and then conveying the terms of a business relationship building up to a contract such as offers, counteroffers and proposals in documented writings.  It should always be clear between the parties at what point a contract is made.

When a contract is made it should be in writing and contain what is known as an integration clause. (I have also seen it referred to as the “Entire Agreement” clause).  Simply stated, it says that this contract which the parties all have duly signed, contains the only terms of the deal.  Emails, letters, texts, notes and all other such clutter falls away leaving one clear document of an understanding between the parties.  Do not get hooked on the unintended.

Virginia has consistently ranked as one of the top three states in the nation to locate a business.  See, for example, the surveys gathered at http://www.yesvirginia.org/whyvirginia/. In a recent article in Time Magazine about the return of  manufacturing to the United States, there are two noteworthy mentions of Virginia.   Note is made of the Commonwealth Center for Advanced Manufacturing (http://www.ccam-va.com) which assists companies with translating research into production and the authors cite an estimate by Boston Consulting Group that there will be 6,840 job openings in manufacturing in Virginia’s former tobacco region by 2017 creating a shortage of about 1,000 skilled workers.  (Foroohar, Rana and Saporito, Bill  “Made in America”,  Time 22 April 2013 28-29 Print.)

The return of manufacturing to Virginia would  create economic growth in general and opportunity for businesses of all kinds.  Manufacturing based in the former tobacco growing region will only add further dynamism to a state which boasts a strong technology sector in the north and is an active nexus between government, high technology and international trading activities.  For a long time, firms located in Virginia have had convenient access to the U.S. government, rail, port and airport facilities, free trade zones, international financial institutions, embassies and international organizations.  Soon, the state may also be a center for the return of manufacturing to the United States.

(Published in the Piedmont Business Journal column “Parting Shots”, Spring 2013)

A friend of mine told me that the TV show Mad Men will air again in April and I’m looking forward to it.  Unfortunately, that is not the only news which is accompanying the Emmy winning series this Spring.   A lawsuit on behalf of a former model was filed in Los Angeles Superior Court last Friday, March 8 against the producer, Lions Gate Entertainment.   The allegation is that her portrait was used in the award winning opening credits without permission.

If the claim is true, this is a serious mistake.  In Virginia, it is actually a crime (albeit a misdemeanor) to “ knowingly use for advertising purposes, or for the purpose of trade, the name, portrait, or picture of any person resident in the Commonwealth, without having first obtained the written consent of such person, or if dead, his surviving spouse, or if none, his next of kin…..”  Virginia Code 18.2-216.1. (emphasis added).

The fine is between 50 and 1000 dollars but the real kicker resides in the civil statute 8.01-40 which provides for a civil cause of action for anyone so aggrieved.  This statute does not limit the cause of action to  Virginia residents and not obtaining written consent does not have to be done knowingly as in the criminal statute.  However, if the “name, portrait or picture” is used knowingly and without consent, a jury may award exemplary damages.  This is a punishment handed down by a jury and there is no statutory limit.  In my mind I question on how many occasions would a name, portrait or picture in an advertisement not be used “knowingly”.  Notice also the use of the wide open phrase “for the purpose of trade”.

A simple consent form is all that is needed.  It may be a bit of a hassle but don’t be one of those  people who say, “Aw, what are the chances?”  That attitude should have no part in running a business.  Be safe.  Reach out and obtain permission.  It protects the bottom line and it helps build good will.   Also, don’t be a Roger Sterling.  Be kind to people and don’t drink and drive.

The Van Gils Law Firm, a locally owned practice focusing primarily on
comprehensive business law and estate planning services, celebrated its grand opening at
19 Winchester Street, Suite A, today.

Bernard “Bert van Gils, who previously divided his time between
serving clients locally as well as out of an office in Northern Virginia, works with both
small and large organizations. He’s looking forward to growing his client base while
forging even stronger ties with the community where he now both lives and works.

“I’ve been fortunate to counsel some very successful businesses,” shares van Gils. “The
most rewarding aspect of my practice is getting the opportunity to work with a variety of
organizations and business leaders as they grow and meet their goals, and there’s no
place I’d rather experience this than right here in the greater Piedmont region.”

Van Gils is a staple in local community organizations. His volunteer service includes
work as a founding director of the Greater Warrenton Chamber of Commerce, where he
continues to provide legal and executive counsel. He is a former director of
the Fauquier County Chamber of Commerce, the Fauquier County Community Action
Committee, the Partnership for Warrenton, the Ballet Academy of Warrenton and the
Fauquier Regional Technology Association.

Van Gils received his Juris Doctor in 1986 from the Washington College of Law for
American University in Washington, D.C. where he was an Associate Editor of the
inaugural edition of The American University Journal of International Law and Policy.
He holds a Bachelors of Arts in History and a Bachelor of Arts in Sociology from Simon
Fraser University in Burnaby, British Columbia. He is a member of the Virginia State Bar
(admitted to practice, April 1987) and a member of the International Law, Business Law,
and Wills, Trusts and Estates sections.