Author: JGL Law

In medical malpractice suits filed in Maryland, conducting a thorough expert deposition is extremely important to obtaining a successful result at trial. The following are a few important things a plaintiff’s attorneys must do in preparation for, and during the course of, an expert deposition:

1. In advance of an expert deposition, the plaintiff’s attorney must obtain as much information about the expert as possible. For example, where he/she went to medical school, where he/she attended for his/her residency, his/her Fellowship, what hospitals he/she has privileges with, what Board Certifications he/she has, etc. Do not assume anything, especially that the expert passed Board Certifications on the first attempt.

2. Obtain a list of medical publications that the expert has authored.

3. Perform a Jury Verdict Search. It will list the names of the trials that the expert has testified in. Contact the attorneys who have questioned this expert in the past at depositions and at trial. You will be amazed at the wealth of information that they can provide you.

4. The most important tip is to ask many questions regarding his familiarity with certain records. Many experts do not review the medical records as intensely as the attorney preparing them. Before questioning the expert, obtain a list of the medical records and deposition transcripts that he has received, and have those documents marked in as an exhibit or exhibits.

5. Before you depose an expert, you must have a road map and a detailed outline. You need to have your exhibits pre-marked or at least in order. It will be crucial to your examination when you depose the expert.

6. Ask the expert if he/she has ever previously worked with the law firm or client that he/she is proposing testimony for. The information you find out may surprise you and may create a conflict. At the very least, you may impeach his credibility at trial by getting an admission that he has testified for that same law firm multiple times. If the expert has testified multiple times for the law firm, find out the names of the cases, the case numbers, and the venues of each case.

7. You need to extensively research medical treatises, journals, and articles in the area of medicine the expert is testifying on. For example, if you depose an expert in cardiothoracic surgery who performs Left Ventricular Assisted Devices (LVADs) surgery, you better know everything about the procedure itself and the medical articles and journals that are relevant to the subject.

8. Make sure you know the deposition testimony for all party and non-party experts who have previously testified. Your preparation may affect the expert’s opinions, may make him/her change direction on a particular opinion, or at the very least make him/her very uncomfortable. Trust me, the expert in most instances will not be as prepared as you are. They will most likely only put a few hours into reading the medical records and deposition transcripts. They will not put the time that you will put into them.

9. Make sure when you depose the expert you have an easy transcript to read. You will be using that deposition transcript ultimately at trial as a means to impeach the witness. Having sound and easily readable questions that will elicit short and understandable answers will make it easy for the jury to listen to you when you cross examine that expert at trial.

10. Make sure you are well rested for the deposition. You will need all of your focus and concentration during the deposition. You will need to listen to the expert very carefully, especially regarding the testimony that he is offering for the defendant.

Last month, the Maryland Court of Appeals formally recognized the testamentary exception to the attorney-client privilege. In Zook v. Pesce, 438 Md. 232 (2014), the high court reaffirmed a ninety-five-year old exception to the attorney-client privilege.

In 1919, the Maryland Court of Appeals in Benzinger v. Hemler, 134 Md. 581 (1919), found that an attorney who drafted the will of a decedent must testify as to “the transactions, circumstances, and instructions given” by the decedent regarding the preparation of the will including any communications between the decedent and the attorney. The Benzinger Court did not formally name this rule as the testamentary exception to the attorney-client privilege, but this short-hand terminology has been the generally accepted label ever since.

On May 16, 2014, the Court of Appeals revisited this issue in Zook. When Eugene D. Zook passed away in 2008, he left behind three adult children, Dennis Zook, Susan Pesce, and Mary Zook. Before his death, the decedent had retained the services of attorney Thomas P. Downs, to assist him with the preparation of his estate plan. In 2007 Mr. Zook executed the Eugene D. Zook Living Trust. Subsequently, in 2008, Mr. Zook decided to modify the terms of his living trust and executed an amended trust agreement. After Mr. Zook’s death, his family soon discovered that, while his estate was to be divided equally between his three children, one child, Mary Zook, the plaintiff, was to receive her share over a ten-year period, while the rest would receive their inheritance immediately.

Ms. Zook sued in an attempt to have the trust agreement declared void. In her complaint, Ms. Zook argued, among other things, that her father was not competent when he executed the amended trust agreement in 2008 and therefore the new trust agreement did not reflect his actual intent. In an attempt to prove her case, she demanded that she be allowed access to the prior trust agreements. Her request was denied by the trial court, arguing that she was not entitled to the prior trust agreement as it was protected from disclosure by the attorney-client privilege, a privilege that generally survives the death of the client.

The Court of Appeals in its decision, discusses the origins and necessity of the attorney-client privilege. The Court goes so far as to quote a U.S. Supreme Court case explaining the importance of upholding the privilege even after the death of the client in question:

Knowing that communications will remain confidential even after death encourages the client to communicate fully and frankly with counsel. While the fear of disclosure, and the consequent withholding of information from counsel, may be reduced if disclosure is limited to posthumous disclosure in a criminal context, it seems unreasonable to assume that it vanishes altogether. Clients may be concerned about reputation, civil liability, or possible harm to friends or family. Posthumous disclosure of such communications may be as feared as disclosure during the client’s lifetime.

Swidler & Berlin v. United States, 524 U.S. 399, 407, 118 S. Ct. 2081, 2086 (1998).

The Court of Appeals then discusses a number of exceptions to the rule, including the testamentary exception. The Court further acknowledges that the trial court even allowed the attorney who prepared the trust agreements to testify as to communications he had with the decedent regarding the preparation of the trust agreements, as well as the attorney’s perception of the decedent’s mental and physical condition at the time of execution of his estate planning documents.

So what about the trust agreement? Does the exception also apply to testamentary documents prepared by counsel and executed by the decedent but not in force when the decedent dies? The Court of Appeals found that such documents are subject to the exception and that Ms. Zook had a right under that exception to access the prior trust agreement. Unfortunately for Ms. Zook, the Count of Appeals also found that even though the trial court should not have denied her access to the prior trust agreement, admission of the document at trial would not have caused the trial court to alter its ultimate ruling.

In order to obtain appropriate and effective counsel, clients must be open and honest with their estate planning attorney. They must do so, however, with the knowledge that some or all of these private communications may become public if post mortem questions arise as to their actual intentions. The lesson here is that while the attorney-client privilege in Maryland is alive and well, there are pitfalls for the unwary and that ambiguous estate planning documents are more likely to lead to such exposure.

As a medical malpractice lawyer for the past 40 years, I’ve noticed a pattern in my cases: if my clients had followed some or all of the steps listed below, they could have avoided being the subject of medical malpractice. While not a cure-all, following these steps could not only result in preventing medical negligence/malpractice, but also receiving better medical care. If, however, you or your loved one has suffered rom what you believe to be medical negligence, contact an experienced medical malpractice attorney immediately.

1. Obtain a Copy of your Medical Records

A principal error that occurs over and over again giving rise to medical negligence claims is a failure to communicate. The failure can be between patient and physician or between one physician and another. The best method for avoiding these types of mistakes is to obtain and read your own medical records.

Under the HIPAA Privacy Rule, patients have a right to receive and review their own medical records and health information held by doctors, hospitals, and other healthcare providers. Despite the availability, many patients never do. In the past, when most doctors and hospitals had a paper-based system, it was time consuming and expensive to get copies of your medical records. And if you did get them, it would result in a large amount of paper. Modern medicine makes it easier to obtain records, and the law now requires healthcare providers to switch to EHR (electronic health records). The Centers for Medicare and Medicaid Services (CMS) offer a Medicare and Medicaid EHR program that provides incentive payments to eligible professionals and hospitals as they adopt and meaningfully use EHR technology. Also, there are Government Penalties for eligible providers who fail to adopt and demonstrate meaningful use of EHR technology by 2015, such as having their Medicare reimbursements reduced. As a result, it is now possible in many cases to subscribe to your physician’s, laboratory’s, or hospital’s “health portal.” Using that “portal” enables you to open your electronic medical records and download them to your computer.

2. Review your Medical Records and Ask Questions

It is critical to review your medical records to ensure that there are no errors. If errors are contained in your records, they are often repeated over and over again as one healthcare provider, relying on a mistake another healthcare provider made, simply repeats the misinformation. While many times the mistakes may be minor, there are instances in which simple errors lead to disastrous consequences.

For example, if you have repeatedly complained of headaches but doctor’s record indicates that you had no complaints, it’s critical to correct the error before it is repeated and potentially causes harm by not getting the tests you need. Another example is if you have no family history of heart disease but the medical record suggests that you do, unless corrected you may wind up getting unnecessary invasive tests that can result in complications simply because your history was incorrect.

In addition to looking for medical errors, it’s important to review your records to see if there is any information you were not aware of. For example, in one case, if the patient had reviewed his own laboratory records, he would have realized early on that his severely elevated white blood cell count should have resulted in a workup for potential blood cancer.  The physician involved never noticed the elevated white count and the patient was equally unaware. In another example, had a patient reviewed her CT scan report, done for the purpose of working up her abdominal pain, she would have discovered that while her abdomen did not show any signs of a problem, her lung did. The radiologist recommended follow-up but the physician never noticed until it was too late.

One does not necessarily need to be a physician to understand medical records. Laboratory results are expressed as normal, high, or low. Simply looking for the highs and lows and questioning the doctor about abnormal results at the next doctor’s visit can avoid many potential medical mistakes. Similarly, while one may not understand all of the medical jargon in a CAT scan report, when it says in plain English that follow-up for an abnormal finding in the lung is recommended, important questions should be asked.

It’s not only important to review your medical records to find mistakes and information you were unaware of, it’s also important from the standpoint of being able to provide new healthcare providers with critical information on a timely basis. Even in this modern age of electronic medical records, there is often considerable delay in getting old information to new healthcare providers.

Additional but equally important measures to avoid becoming a victim of medical negligence include making an outline of the symptoms, issues and questions you wish to discuss with your physician. All too often, patients forget what they needed to communicate. Thus in the stress of a hurried office visit, there may be a failure for critical information to be communicated.

3. Bring a Friend or Family Member Along to Critical Appointments

Along the same lines, it’s often a good idea to bring a family member or close friend to a medical visit. Many times patients are too stressed during a medical visit to effectively comprehend what they were told by the physician or the various options that were laid out. Thus proper decisions cannot be effectively made. Additionally, it may help to have a witness to critical data that should have been conveyed by the physician, but for whatever reason was not conveyed.

4. Take Notes After Doctors’ Visits

Taking notes after a doctor visit is an excellent way to ensure that you understand what was conveyed and what additional steps must be taken to achieve a diagnosis or treatment. By taking notes, you may realize that there are gaps in your knowledge which will then help you to raise additional questions for your healthcare provider at the next visit.

Medical research has shown that patients who are actively engaged in obtaining and reviewing their own health records get higher quality health care, and can avoid potential medical errors.

 

When asked to provide advice to lawyers who have recently been promoted to partner, JGL’s Jay Holland shared this insight:

“My one tip to junior partners upon making partner is this: Do not forget from where you came. Do not be so enamored with your new status such that you fail to continue to treat those junior and senior to you with respect and consideration. You deserve to feel confident and proud; do not allow that pride to morph into arrogance. Hard work, intelligence and the ability to connect with colleagues and clients are the attributes which surely resulted in your promotion. Continue what you have been doing, do not let up. But sprinkle your promotion with a healthy dose of humility.” 

Several attorneys weighed in with advice in the subscription based Law 360 article, Welcome to the Club: Advice from Old to New Partners.

JGL civil rights attorney, Cary Hansel, was recently quoted in The Daily Record. Commenting on the Court of Special Appeals decision that upheld a Baltimore jury’s verdict against two Baltimore police officers, Hansel stated the court’s decision was a “pretty straightforward interpretation” of the Local Government Tort Claims Act (LGTCA).

In May of 2009, three Baltimore police officers picked up then 15-year-old Michael Brian Johnson Jr. near his West Baltimore home. After driving him around in a police van for several hours, they eventually dropped him off miles away from his home without shoes or a cell phone. A Baltimore jury later found the officers had acted with malice. 

By rejecting the appeal attempt to apply the $200,000 cap on damages under LGTCA, the court affirmed the award against the police officers who acted with malice. “The language of the statute is very clear,” said Hansel. “The plain meaning is that [the officer] is fully liable for the full amount and it’s not capped.”

We’ve all seen the shock-value headlines: “Oh My God, Naked Photos of Kate Upton!”[i] “Jennifer Lawrence Speaks For the First Time About Her Stolen Nude Photos”[ii] There is a movie called “Sex Tape,” in which a couple “discover that their most private video is no longer private.”[iii] On a smaller scale, a scorned lover, spouse, girlfriend, or boyfriend may get revenge by sharing intimate images with others by populating them to social media or uploading them to websites where people share such private images. When two people take consensual, intimate photographs, the subject does not expect that the photos will be posted on the Internet for all to see. However, if the relationship sours, the privacy of an unsuspecting victim may be compromised as the photos are posted on Twitter, Facebook, and websites like myex.com, in an attempt to get revenge.   

All too frequently, private photos are leaked on the Internet with malicious intent. This conduct, while offensive, was not defamatory, illegal, or otherwise prohibited. The victim had no recourse. On October 1, 2014, Maryland joined thirteen other states criminalizing publication of these intimate images without permission of the person/people depicted – so-called “revenge porn.” Maryland’s “revenge porn” law is broad and states that:  

A person may not intentionally cause serious emotional distress to another by intentionally placing on the Internet a photograph, film, videotape, recording, or any other reproduction of the image of the other person that reveals the identity of the other person with his or her intimate parts exposed or while engaged in an act of sexual contact:

(1) knowing that the other person did not consent to the placement of the image on the Internet; and

(2) under circumstances in which the other person had a reasonable expectation that the image would be kept private.[iv]

Images created in public or commercial settings are excluded from this law.[v] Publication of prohibited images with the intent to cause serious emotional distress is a misdemeanor subject to a fine of up to $5,000 or incarceration not to exceed 2 years.[vi]

            While a powerful tool that preserves people’s privacy and decency, Maryland’s revenge porn law has several potential hurdles. In his review of the bill, Attorney General Gansler noted a potential First Amendment challenge to its restriction of free speech; however, he concluded that such a challenge was not likely to succeed.[vii] The First Amendment restrictions, he determined, are not impermissibly broad because the law requires that the publication be motivated by an intent to inflict severe harm, and because the restrictions are on purely private matters, not matters of public concern.[viii] Attorney General Gansler notes that, “there is a risk that as applied to virtual representations such as drawings or animation, a court could find the prohibition to be an impermissible restraint on speech.”[ix]

            Enforcement is also problematic. Once leaked in an electronic format, an image can quickly be disseminated across the Internet. After several, or thousands, of forwards, reposts, and shares, it may be impossible, and resource intensive, to identify the original source of the leak.

            Finally, the law does not enable the victim to remove the material from the Internet. Again, the Internet allows infinite re-blogging, re-posting, and re-sharing of an image. Once it has been published, it is impossible to retract. While the original publisher may be punished, the harm to the victim will continue to accrue.

            Maryland’s revenge porn law is not immune from legal challenges and is not without its practical hurdles. However, it provides law enforcement with powerful tools to control the flow of personal, confidential, and intimate images, and provides victims with tools to preserve their dignity. 

Washington, DC — The American Bar Association’s Fall Leadership selected Jerry Miller, Principal with the law firm of Joseph, Greenwald & Laake, to be a member of the Business Law Panel at their Fall Leadership Summit on October 3 – 4, 2014.

This panel exposed students to business law based on the experience of attorneys working in solo practices, mid- to large-size firms and general counsel. Students learned what skills are necessary to hang their own shingle for a business law practice or to build a competitive application for a hiring committee seeking to fill a business law practice job.

Jerry Miller is a Principal in Joseph, Greenwald & Laake’s Business Service Group. 

Following oral arguments from Amazon’s contract warehouse workers on Friday, CBS Moneywatch’s Erik Sherman, contacted Brian Markovitz for comment on the U.S. Supreme Court case, Integrity Staffing Solutions Inc. v. Busk.

In the article, Why Amazon is nervous about Supreme Court case, Markovitz draws a parallel between mandatory on-call responsibilities and the mandatory security screenings in the Amazon case. If workers are beholden to their employers for time when they’re on call, can they still do things on their own? He states, “I don’t see them as being free to do their own personal activities. It’s something they have to go through. It’s a close call on this.”

In the case currently before the Supreme Court, Amazon warehouse workers (Busk) are requesting their contracting firm (Integrity Staffing Solutions, Inc.) compensate them for time they are required to spend at the end of the day waiting in line for mandatory security screenings.

MainSt.com recently published an article that examines how U.S. states are dealing with alimony reform: Why Protecting Your Assets In the Event of Divorce Just Got More Critical. JGL’s family law attorney, Reza Golesorkhi, weighed in on reforms sweeping the country and how Maryland’s divorce laws favor rehabilitative alimony.

With the divorce rate on the rise and states amending their divorce laws, it’s becoming increasingly important for individuals to protect their assets before entering into a marriage. Despite the evolving traditional American family model, some states haven’t yet updated their alimony laws, while others have perhaps gone too far. Golesorkhi discusses a progressive approach to alimony reform that takes into consideration today’s modern family.

If you’re facing a divorce in Maryland or have questions regarding alimony reform, feel free to email Reza Golesorkhi at rgolesorkhi@jgllaw.com or call our office at 877-412-7429.

Over the past few years, there has been a trend among states to reform alimony (i.e., spousal support). New Jersey is the latest state to join this so-called Alimony Reform Movement, joining Massachusetts, Maine, Florida and Texas. In the past few years, many states have enacted or tried to enact legislation reforming alimony.

 

In my opinion, some states have gone to the extreme and some have made more moderate adjustments. Texas now has limited alimony terms, such that in Texas, payments cannot exceed 3 years unless the person seeking alimony has a disability and the amount is capped at $2,500 a month or 20% of the paying spouse’s monthly gross income. I don’t agree with Texas’ approach as I don’t think every fact pattern or divorce case fits the Texas model. If it did, most divorce lawyers would be out of business. I believe that a progressive approach is more practical. I prefer the Maryland model, which strongly favors rehabilitative alimony but has not yet ruled out the concept of permanent or indefinite alimony. Here is a brief background behind Maryland’s alimony laws:

 

Historically, “[u]ntil 1980, the only alimony the Courts in Maryland could award was technical alimony. Technical alimony was defined as a money allowance payable under a judicial decree by a husband, at stated intervals to his wife, or former wife, during their joint lives or until the remarriage of the wife, so long as they live separately, for her support and maintenance.” Bricker v. Bricker, 78 Md. App. 570, 572, 554 A.2d 444, 445 (1989). However, “[i]n 1976, Marvin Mandel, then Governor of Maryland, established a Commission on Domestic Relations Law ‘to undertake a complete study of the constitutional, statutory, and common law concerning domestic relations, including the laws concerning marriage, the dissolution of marriage, the rights and obligations attendant upon or accruing from each, and the procedures for resolving and adjudicating domestic disputes.’” Id. at 573. The Commission’s first report was “the impetus for sweeping legislative changes in property rights in the event of divorce in Maryland. The second report of the Commission dealt with alimony.” Id. In the Report, the Commission referred specifically to the term “alimony award” and stated: “The award of alimony in the ordinary case should be for a specific time, and that time should be stated in the Order or Decree making the award. Preferably, that time should be fixed in relation to a specified program or goal on the part of the recipient party that will lead to self-sufficiency before that time.” Id.

 

Regardless of where each state stands on the issue of alimony, the driving force behind the sweeping alimony reform legislation is the change to the make-up of the “prototypical” American family. The “normal” American family of today is a lot different from the family of the 1970s, when most of the alimony laws were enacted. In the 70s, the typical family model was comprised of a stay-at-home mom who raised the children while the father served as the sole income earner. Today, that has changed. Today’s family models have every conceivable combination, both spouses working, only the father working, and more-and-more, working wives with stay-at-home dads.

 

So what should couples do to protect their assets?

 

Commonly-used legal instruments include both pre-nuptial (an agreement entered by a couple before the marriage which outlines what will happen in the event of a divorce) and/or post-nuptial agreements (an agreement entered by a couple after marriage which outlines what will happen in the event of a divorce). Traditionally, pre-nuptial agreements were usually used in second marriages and/or marriages where one of the parties had significant assets, had a family business to protect, or children from a previous relationship. But recently, with a boom in IT and technology industry, there is a growing trend for pre-nuptial agreements among young professionals. Most of them are in their late 30s or early 40s and either own a business or have substantial equity in a business. A pre-nuptial agreement is an excellent tool that the soon-to-be spouses can use to predetermine the preservation of, and division of, assets in the event of a divorce. But pre-nuptial agreements can be tricky and require several important steps, such as full financial disclosure and opportunity for legal consultation. While you may be able to download a form from Google®, you should definitely consult an attorney before entering into a pre-nuptial agreement because you want to make sure that all of your rights are protected and/or preserved.

 

 

 

As for preservation of retirement benefits, a common misconception is the belief that the minute you get married, you have to split your retirement benefits. Generally, most jurisdictions define marital property as commencing from the day you get married until the date you get separate and/or divorced. So if you come into a marriage with a $100,000 401K Plan, that amount is considered as non-marital. So if you get divorced 10 years later and your 401K is now $400,000, the courts will likely consider $300,000 to be martial property[1] and the original $100,000 as non-marital. As the law does defer in each jurisdiction, be sure to consult a divorce lawyer to find out the specifics in your jurisdiction.

 

Prior to getting married, particularly if the soon-to-be-newlyweds have significant assets, it is prudent to consult a family law attorney to find out what your rights are both before and after a marriage and where your state stands on the dissolution of a marriage. Most divorce lawyers offer consultation (either free or at a reasonable hourly rate) so take advantage of that resource. In many respects, an hour consultation could be well worth it in the long-run.

 

Reza Golesorkhi is a partner in the family law practice group at the prominent Law Firm of Joseph, Greenwald & Laake. P.A. (www.jgllaw.com). He can be reached in his Rockville office at 240-399-7892 or by email at rgolesorkhi@jgllaw.com

 

O

On October 1, 2014 the Fairness for All Marylanders Act (“FAMA”) went into effect.  FAMA, which was originally discussed in the JGL Law Blog post (Will Prince George’s County residents face less fairness if The Fairness for All Marylanders Act of 2014 (SB 212) becomes law? Possibly.) prohibits discrimination of Maryland employees on the basis of gender identity or transgender status. In passing FAMA, Maryland joined sixteen other states as the only states to cover sexual orientation and gender identity in employment anti-discrimination laws. While many state and local laws expressly protect lesbian, gay, bisexual and transgender (“LGBT”) individuals from workplace harassment and discrimination, the majority of states do not, leaving many of those employees who wish to pursue claims of sexual orientation or gender identity discrimination to rely on Title VII of the Civil Rights Act of 1964 (“Title VII”). 

Title VII prohibits discrimination in the workplace based on race, color, religion, sex and national origin; it does not explicitly protect against discrimination on the basis of sexual orientation. See 42 U.S.C.S. § 2000e et seq. That said, many courts have found that LGBT individuals may bring a viable discrimination claim under Title VII on the basis of sex, using a sex stereotyping theory, which can be distinguished from sexual orientation.

Sex stereotyping, using a gender discrimination angle, under Title VII was best explained in the landmark Supreme Court case, Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), which involved an employer denying a female accountant partnership opportunities because she did not conform to typical gender roles. Specifically, the female employee’s supervisors stated that she should “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” Price Waterhouse, 490 U.S. at 235.  The Court found that the employment decision was based on the employee’s sex because sex stereotyping[1] partly motivated that decision. See id. at 250.    

The Equal Employment Opportunity Commission (EEOC), the federal agency responsible for enforcing Title VII, has used the sex stereotyping theory to include gender identity, under the purview of Title VII. See Macy v. Department of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (April 20, 2012). In Macy, the EEOC recognized that gender identity was protected under Title VII because it involved “gender stereotyping –failing to act and appear according to expectations defined by gender.” EEOC Appeal No. 0120120821 at *6 (quoting Glenn v. Brumby, 663 F.3d 1312, 1316 (11th Cir. 2011)).      

Similarly, the Fifth Circuit, in E.E.O.C. v. Boh Bros. Const. Co., 731 F.3d 444 (5th Cir. 2013), found that a male employee, who had been subjected to homophobic slurs and salacious conduct, “could rely on gender-stereotyping evidence to show that same-sex discrimination occurred ‘because of sex’ in accordance with Title VII.” Id. at 468. The Sixth Circuit, however, held differently on the sex stereotyping theory as a means to use Title VII with regard to sexual orientation.  In fact, the Sixth Circuit noted that if the sex stereotyping theory were used in that manner, “any discrimination based on sexual orientation would be actionable under a sex stereotyping theory” because “all homosexuals, by definition, fail to conform to traditional gender norms in their sexual practices.”  Vickers v. Fairfield Med. Ctr., 453 F.3d 757, 764 (6th Cir. 2006).

The Sixth Circuit underscores the reality that even under the sex stereotyping theory, certain LGBT individuals who work in states that do not expressly protect them from workplace discrimination on the basis of sexual orientation are not able to pursue a claim.  Although some members of Congress have repeatedly introduced the Employment Non-Discrimination Act (“ENDA”) in order to more broadly prohibit employment discrimination on the basis of sexual orientation, to date, no federal statute expressly provides protection.  As such, the ambiguity with respect to sexual orientation under Title VII persists.           

For more information on employment discrimination, contact one of JGL’s discrimination lawyers.

In previous posts (Choice of Entity: A Primer for the New Business Owner Part 1 and Part 2) we discussed starting a business as proprietorship (single owner, with no entity) and as a limited liability company. In the third installment of this series we will discuss the pros and cons of operating your business as a C corporation.

Similar to a limited liability company, a C corporation is formed by filing organization documents with the state in which the business will have its primary headquarters. In Maryland and the District of Columbia, a C corporation is formed by filing Articles of Incorporation with the State Department of Assessments and Taxation.

The primary benefits of operating as a C corporation:

1. Limited liability. Just like limited liability companies, the stockholders of a C corporation are not personally liable for the debts or obligations of the business unless they have expressly assumed those liabilities (for example by signing a personal guarantee). Note that a there are circumstances under which courts will allow a creditor to “pierce the corporate veil” and collect a company obligation directly from a stockholder. The circumstances under which this can happen are extremely limited however.
    
2. Multiple classes of stock. C corporations can issue different classes of stock. The differences can be operational (voting vs non-voting shares) or economic (shares with a priority as to dividends) or both. Note that there is another kind of corporation, known as an S corporation in which the ability to differentiate among classes of stockholders is extremely limited. S Corporations will be discussed in more detail in the next installment.
    
3. Historical precedent. Business owners have been operating as corporations in the United States for almost as long as there has been a United States. Stockholders of corporations can take comfort in the relative stability and certainty that over 200 years of case law and historical precedent provides.
    
4. Crowdfunding under the Jumpstart Our Business Startups Act of 2012. Crowdfunding (such as Kickstarter®) has greatly expanded over the last several years and has become a go-to place for entrepreneurs and start-ups. If and when the Securities and Exchange Commission gets around to issuing regulations governing the crowdfunding provisions of this Act, C corporation status may prove beneficial to entrepreneurs seeking to raise capital.  

The disadvantages of operating as a C corporation:

1. Potential for double tax. C corporations must pay tax on the profits they generate. If those profits are then paid to stockholders in the form of dividends, the stockholders will be taxed on those dividends as well. Note that with proper tax planning, the amount of tax paid by a C corporation on its profits can be minimized and in many cases eliminated entirely.
    
2. Formality and recordkeeping. There are many formal requirements that C corporations must comply with under state law in order to maintain their corporate status. For example, a C corporation must (i) issue stock (or, if, permitted under applicable law, authorize uncertificated shares); (ii) adopt bylaws; (iii) elect a board of directors (some exceptions) and a slate of corporate officers; (iv) hold and document annual meetings of its stockholders; and (v) provide certain information to its stockholders (even minority stockholders) annual and on request. Compare this with a limited liability company that has almost no formal requirements other than filing of its organization document with the state.
    
3. Cost. Generally speaking, because of the additional formalities discussed above, forming and maintaining a C corporation will be more expensive than a proprietorship, limited liability company or partnership.

Generally speaking, there not many situations where operating as a C corporation will be advantageous for a small business startup. As noted in previous posts however, every new business is unique and the prudent entrepreneur will carefully consider all of the available options with her or his accounting advisor and business attorney before deciding on a structure for the new business.

For more information on starting a new business, contact JGL’s business lawyer, Jerry Miller.