ACC Focus on the New Jersey Chapter - February 6, 2009 (Print All Articles)

NJCCA President's Message

by Valerie Camara

Developing programs that will benefit our members.

To the Membership,

Well the year is off to a running start and NJCCA is working on hosting a number of programs in the coming months.

The board and committee leaders continue to work on developing programs that will appeal to our members.  We should be thinking about how we can do our jobs in the most efficient manner.  This may be the appropriate time for each of us to conduct a self evaluation to determine what I can improve upon that will make me more of an asset to the company. Are there areas of my practice that would benefit from an update?  Do I have the necessary business and management skills, to enable me to provide value to my clients and be able to work with them to develop the right strategy for the business? 

Our Career Management & Transition Committee is an active committee that continues to look for opportunities to host programs and networking events that will provide our members with an arsenal of tools that they can use in their professional development and with managing their careers. 

As we all look at ways to improve our substantive and professional skills and continue to add value to our companies, NJCCA seeks to provide you with those opportunities.  If you have a suggestion for a program, please feel free to contact your NJCCA committee chairs or me to brainstorm about creative ways that we may be able to assist our members.  Our events calendar is being updated with programs that we hope will entice our members to join us at our upcoming CLE programs, committee meetings or networking events.

ACC is a great resource for all of its members, including those that find themselves in transition.  For any of our members that are concerned about maintaining their membership, I would suggest to you that now is the most critical time to stay connected to ACC not only for the substantive resources that it provides, but for the network of in-house counsel that it connects you to.  Also, if your find yourself in transition, ACC and the NJ Chapter provides its members with resources that may be of assistance.  ACC also provides a discounted rate for our members that are in transition (All you need to do is complete the In Transition Waiver of Dues Form).

I would also ask members to review, at your convenience, the NJCCA Refund Policy that the board adopted last month. 

I hope to see you at some of our upcoming events!

Valerie Camara
NJCCA President

Arbitration Clause and Post-Dispute Considerations for In-House Counsel

David A. Kotler
Are the perceived benefits of arbitration clauses overshadowed by the particular challenges they actually pose?

Arbitration clauses are included in virtually every type of contract between sophisticated commercial entities, from the closely-held company to the Fortune 100 publicly-traded company.  Undoubtedly, parties negotiating a contract include arbitration clauses because of the general perception that arbitration has the potential to provide significant benefits over in-court litigation.  But, these perceived benefits often overshadow the particular challenges that arbitration actually pose.  In-house counsel should be aware of both the potential benefits and the possible pitfalls when crafting the arbitration clause in the next contract that they negotiate.  In particular, one of the most useful -- and perhaps most overlooked -- benefits of arbitration is that it gives the parties a second chance to craft the rules and procedures to fit their specific dispute.  Therefore, in-house counsel should be open to the possibility of negotiating with their opposition once an arbitration has commenced to arrive an arbitration plan tailored to the specific issues about which they disagree.

The most commonly acknowledged benefit of arbitration over litigation is that arbitration is more efficient and less costly than an in-court trial.  Vis-à-vis a jury trial, an arbitrator is generally more sophisticated than a jury, meaning that an arbitrator can process the factual and industry background and focus on the key issues more expeditiously than a jury.  Arbitration also has potential efficiencies over a bench trial, as parties often have the opportunity to select one or more of the arbitrators.  This allows the parties to choose an individual or individuals who have some familiarity with either the type of dispute or the companies’ industries.

Another commonly acknowledged benefit of arbitration is that discovery in arbitration has the potential to proceed more rapidly and with less cost than in-court litigation because the arbitrator can keep close tabs on the parties’ discovery strategies and focus the parties on truly necessary discovery (rather than allowing “fishing expeditions”).  And, indeed, this perception is true in many cases.  However, where a case involves complex issues, the efficiency and cost savings achieved through arbitration discovery may be slight or none.  In one of our recent cases, for example, the parties disputed whether one of the parties had used “all commercially reasonable efforts” to develop and market a particular product.  Discovery, therefore, necessarily involved hundreds of thousands of pages regarding everything from research and development to the company’s worldwide marketing activities.  Hence, where a dispute involves complex issues, any cost savings from arbitration are likely to be a result of the speed and efficiency of the hearing rather than a reduction in the volume of discovery.

With these potential costs and benefits in mind, in-house counsel should consider the following ideas when negotiating their next arbitration clause:

• Consult with litigation counsel.  We are all aware of the circumstance where the attorneys negotiating a transaction agreement will use boilerplate language in the arbitration clause.  This, of course, is understandable, because during contract negotiations, the parties generally are more focused on the substantive issues rather than the potential for the contractual relationship to erode and for the parties to end up in a legal battle against each other.  For this reason, it is crucial that the attorney drafting the contract consult with litigation counsel regarding the language in the arbitration clause.  Litigation counsel likely has experienced how the language in certain arbitration clauses can help or hinder a party in achieving its goals, which will allow litigation counsel to suggest the language that would be most beneficial to the client.
  
  
• Consider an arbitration clause that permits dispositive motions.  Arbitrators tend to prohibit dispositive motions, or refuse to grant them even in the face of compelling reasons to do so.  But, these motions can focus the issues in an arbitration -- knocking out claims that lack merit -- or even resolve the case altogether.  To ensure that the arbitrator receives dispositive motions and treats them seriously, the parties should explicitly address the issue in the arbitration clause. 
  
  
• Craft an arbitration clause that allows for flexibility over specificity in timing and scope of discovery.  It generally makes little sense for the parties to negotiate a limit on aspects of discovery before a dispute has arisen.  Once the actual dispute is clear, the parties, working with the arbitrator, can develop a discovery plan and timeline that fits that dispute.  For example, it is not uncommon for an arbitration clause to require that a dispute be resolved within a specified period of time.  However, the complexity of the dispute may prevent compliance with that requirement, thus compelling the parties to spend time essentially re-negotiating the arbitration clause after the arbitration had already commenced.  Therefore, a more general arbitration clause is often preferential to an arbitration clause with specific dates and discovery limits.

In the event that a dispute does arise, the parties will have to put the arbitration clause into effect.  But, this does not mean that the parties should proceed on auto-pilot as if the case had been filed in court.  Rather, as noted above, the parties should engage in an open dialogue with each other and the arbitrator(s) to arrive at a plan for the discovery and hearing processes that best fits the dispute.  Thus, once the arbitration has been filed, in-house counsel should consider the following:

• Tailor the scope of fact discovery to the actual dispute.  It can be difficult for parties when they are negotiating a contract to foresee what forms of discovery will be necessary should a dispute ever arise under that contract.  But, once the arbitration papers have been filed, the parties should consider whether discovery should include or exclude fact depositions, corporate designee depositions, interrogatories, or other discovery tools.  While these types of discovery have the potential to narrow the issues for trial, they often increase discovery expense and time, making the discovery process -- and legal fees -- resemble that of large-scale court litigation.
  
  
• Designate rules to apply to evidence at the hearing.  When it comes to putting on evidence at the hearing, arbitrators usually employ a “let it all in” philosophy.  But this approach can be problematic for the parties for at least two reasons.  First, without something like the Federal Rules of Evidence guiding them, the parties are less likely to carefully consider what evidence to put on and focus on the specific issues in dispute.  This makes for a less efficient and more costly hearing.  Second, the parties are forced to prepare witnesses to deal with tangential or potentially irrelevant evidence, again increasing the cost of preparing for the hearing and responding to evidence at the hearing.  By agreeing that the hearing will be governed by the Federal Rules of Evidence, for example, the hearing should be more focused and efficient.
  
  
• Consider how to limit the time necessary for the hearing.  Often, once the contours of the dispute are clear, the parties have an opportunity to define how the arbitration hearing should be conducted in a way that can significantly limit the length of the hearing.  One possibility is to have witnesses prepare witness statements to serve as their direct testimony, limiting in-person testimony to primarily cross-examination by the opposing party. 

While arbitration disputes will never fall into a “one size fits all” category, in-house counsel would be wise to consider the concepts described above when negotiating their next arbitration clause.

David A. Kotler is a partner in the Princeton office of Dechert LLP in the White Collar and Securities Litigation group.  He was assisted in this article by Jennie Krasner and William Gibson, both of whom are also members of the White Collar and Securities Litigation Group in the Dechert Princeton office.

In-House Lawyer's Conclusion of FMLA Coverage Does Not Prevent Doubling of Award

Lee Braem

Don't skip the research!

The failure to research whether a pregnant employee was covered by the Family and Medical Leave Act (FMLA) leads a federal judge to double a jury's verdict for back pay. 

In the case of Brown v. Nutrition Management Services Co., (2006-2034, E.D. Pa.), U.S. Federal District Court Judge Shapiro found that the lack of evidence of basic research for FMLA applicability demonstrated bad faith on behalf of the company, and thus, under the law, required the court to double the damages (adding $80,655.82 to the total judgment).

In Brown, the plaintiff had been hired by Nutrition Management based on Brown's similar work at another company.  Less than three months after starting to work for Nutrition Management, Brown claims she was fired after she informed management that she was pregnant and was applying for leave.  The jury found that Nutrition Management was a "successor employer" under the FMLA and that Brown was a covered employee because she worked for more than a year in the same position before being fired by Nutrition Management.  

In reaching his decision, Judge Shapiro noted the testimony of Nutrition Management's in-house lawyer (who also served as it's director of Human Resources) that he had determined it was "okay" to terminate Brown because she was a "brand new" employee.  Judge Shapiro ruled that "Nutrition Management's reliance on [in-house counsel's] cursory determination was inadequate to ascertain whether Brown's prior employer was covered by the FMLA and, if so, whether Nutrition Management was a successor in interest."  Further, "Nutrition Management presented no evidence that it researched or had an attorney research the requirements of the FMLA, or was otherwise aware of the factors governing whether the FMLA would apply to Brown's request for leave."  In the end, Nutrition Management failed to meet its burden of proving that the termination was a good faith violation of the FMLA.

Online Professional Networking For In-House Lawyers

Eugene M. Weitz, Barbra Levy & Michael Prokop

Announcing the newest Linked In Group - New Jersey Corporate Counsel Association

The Technology Law and Career Management and Transition Committees of the New Jersey Corporate Counsel Association (“NJCCA”) are pleased to announce and invite your participation in a new NJCCA Linked In group.  Please check us out and join our group.

• If you are already a Linked In member, all you need to do is click the group link below or search for ”NJCCA” on the Groups page and request to join.
  
  
• If you are not a Linked In member, you can join at any time.  It is a free and easy-to-use professional networking site.  Just click on the Linked In link below.  We’ll be glad to help you set up your own Linked In profile if you are interested.  You will find that many of your colleagues already are onboard with Linked In and you easily can start building your connections.

This Linked In group will be limited exclusively to NJCCA members.  With your participation in developing Discussion Boards and other tools, we believe Linked In can be used by our members, as more than a convenient online Rolodex.  For example, our NJCCA group can serve as a platform for career networking, brainstorming with NJCCA committee leaders on program ideas, or soliciting advice from your colleagues on how others have generally handled a matter.

We hope you will consider joining our NJCCA group on the Linked In virtual network.  LinkedIn, and specifically our LinkedIn group for NJCCA members, will enable you to engage in online professional networking with your legal colleagues at other companies throughout New Jersey.

If you’d like more information about Linked In and its benefits beyond job-hunting, check out this list of the “Top 10 ways to use Linked In."

If you are interested in developing a Discussion Board, please let the Linked In Group Administrators know or prior to signing up you can contact NJCCA Board member Eugene Weitz at weitz@alcatel-lucent.com.  We welcome any other feedback you have about how to make this Linked In group more valuable to our membership.

In-House Counsel Changing Jobs: Checklist of Records to Update

Lee Braem

Changing positions?  Here's a helpful checklist.

• NJ licensed attorneys file change of address to:
   
    Lawyers’ Fund for Client Protection
    P.O. Box 961
    Trenton, NJ 08625-0961
    609-394-3637 (fax)

    Source:  http://www.njbarexams.org

  • NJ limited license in-house counsel file updates as follows:

  Notify the Board of Bar Examiners within 60 days of termination of employment.

  If changing employers (remaining in-house), complete and file the Change of Employer form available from the Board of Bar Examiners.

  Applicants for in-house license notify the Board of Bar Examiners of change of address.  

   Source:  http://www.njbarexams.org  Also, Rule 1:27-2 and NJ Supreme Court Supplemental Administrative Determination dated March 1, 2004.  

  • File any change of address with other licensing jurisdictions or authorities, if applicable.

   

  • Notify the Association of Corporate Counsel. 

  Go to http://www.acc.com.  Then <Member Services>, then <My Membership>, then <Update my Record>.

  • Notify the NJ State Bar Association, if applicable.

  Go to http://www.njsba.com.  Then <Member Login>, then <Membeship>, then <Change of Address>.

  • Notify the American Bar Association, if applicable.

   Go to http://www.abanet.org.  Then <Member Services>, then under Member Tools, <Change of Address>.

  • Notify other professional organizations of which you are member.

   

  • Notify publishers of newsletter, periodicals, etc that are delivered to old business address.

   

  • Notify frequent traveler programs, e.g., airline frequent flyer accounts.

   

  • And, reprogram all family cell phones with your new office telephone number.

   

  DISCLAIMER:  This information is provided as a convenience to the membership of the NJ Corporate Counsel Association.  It is believed to be current on the date prepared and may not be complete.  Members should independently confirm their individual obligations to properly comply with the requirements of licensing, bar admission, or other authorities.

NJCCA Profiles - Martin Carrara

Our continuing series of profiles of your NJCCA Board.

1. Tell us a little bit about your personal background. 
I was born and raised in Staten Island, NY, which was a great place to grow up because you had a nice mix of proximity to “the city” with a suburban feel.  I currently live in Hillsborough, NJ with my wife, Christine, and our son, Rob. 

I received my J.D. from Fordham University School of Law, and have a BS and an MBA from Wagner College.  I am an instructor for the Institute for Supply Management (ISM) and various ISM affiliates, where I teach seminars on contract law and other topics related to the legal aspects of purchasing and supply management.

2. What was your first job?  
My first job was working my way through school as an electrician.  I worked for my cousin, who owns and operates an electrical contracting firm on Staten Island.  I did commercial and residential wiring.  I still love to work with tools in my spare time, and Christine wishes I would make more spare time for all of the items on her to-do list.   

3. What motivated you to become a lawyer?
After graduating from college, I sold electrical supplies for a little over a year before becoming a purchasing manager for one of my customers, L.K. Comstock & Co., a large electrical contracting firm in New York.  I then moved to NYNEX (now Verizon) as a purchasing manager and contracts team leader.  I enjoyed negotiating and drafting contracts and loved working with the lawyers (I know what you are thinking!).  I worked with some excellent business lawyers at NYNEX and learned a great deal from them.  I went to law school evenings while working at NYNEX and, in my last year of law school, while working at Citibank.

4. Tell us about your in-house experience.
I am currently Senior Corporate Counsel at Wyeth, where I handle a wide variety of commercial transactions for the Wyeth Consumer Healthcare business.  I joined Wyeth in January 2009 from Pfizer.  My first in-house position was at Pharmacia, where I was the procurement and real estate counsel.  I joined Pharmacia in 1998, and joined Pfizer when Pfizer acquired Pharmacia in 2003.  With Pfizer, I continued to handle a diversified array of commercial transactions including contract manufacturing and supply agreements, plant acquisitions and divestitures, outsourcing, construction, software and technology, and a wide variety of procurement matters.  I also worked on the sale of the Pfizer Consumer Healthcare business to J&J, handling all of the agreements and legal issues relating to the manufacturing and supply aspects of the deal.

5.  What do you find most rewarding about your job.
As an in-house lawyer, you have the opportunity to really work closely with the clients and become part of the business.  Our job is not to say “no, you can’t do that” but, rather, to guide the clients on how they can accomplish their business objectives while managing risk to appropriate and acceptable levels.  It is a delicate balance of advancing the business while protecting the company, and I think that my previous business experience really helps me to understand and appreciate the business needs.  I enjoy being a trusted advisor who clients view as part of the team.

6.  Tell us about your position at NJCCA?
I have been on the board of directors for several years, and recently became an officer as Vice President and Secretary and a member of the Executive Committee.  I am also the chair of the Commercial Law Committee.

7.  What do you find most rewarding about your association with NJCCA?
Without a doubt, the most rewarding aspect is the opportunity to work with and to get to know such great people, from the officers to the directors, committee leaders and committee members, our Executive Director, program presenters and organizers, our sponsors and everyone who supports NJCCA and attends our programs.  These people have busy jobs and families, but they make time to help advance the professionalism and recognition of the in-house bar.  Networking isn’t just (or mainly) about job-hunting; it’s about getting to know some great people who do what you do and can share their experiences.  I encourage people to get involved in the organization – just come to a program or volunteer to work on a committee.  You will be very happy that you did.

8.  What do you like to do in your spare time? 
Spare time?  Actually, in addition to work and NJCCA, I am active in the Knights of Columbus in Raritan, NJ.  We help to organize and run fundraisers to help the parish and the needy in the community, and it is a great way to give something back to the community.  I try to spend what little spare time is left with my family.

9. Who would you most like to have dinner with? 
Family dinners were an important part of growing up in my family, and I wish I could have one more of those great family dinners including my dad, who passed away four years ago.  Outside of family, I would like to have dinner with Bill Bennett and Supreme Court Justice Antonin Scalia.  From history, I wish I could have dinner with some of our founding fathers, especially men like Thomas Jefferson, James Madison, George Washington and John Adams.  I am amazed at what these men accomplished – at grave personal risk - in creating this great country, and I fear that we are letting it slip away today.

10. What advice do you have for young lawyers new to in-house or interested in moving in-house?
In addition to getting to understand your client’s business, the key thing you need to do is to constantly improve and expand your skills and knowledge.  Two of the best ways to do that is through networking with your colleagues at NJCCA and by attending NJCCA CLE programs.

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