Wednesday, July 30, 2008

Think Before You Give A Former Employee A Reference!

(Called as a reference for a former Employee? THINK before speaking.)

The attorneys at Gross & Romaick's Business Law Division offer some advice for business owners who've been asked to give a reference for a former employee.

It is more dangerous than ever to speak with a potential employer of your former employee. The Fairfax County Circuit Court in the case of Elsami v. Global One Communications, Inc. (Fairfax County Circuit Court, Law # 174096, January 11, 1999), recently permitted a defamation action to proceed against a corporation that responded to a reference inquiry.

In the Elsami case, a former employee provided his prior employer as a reference. The employee was in a managerial position in charge of the day to day running of the business in Malaysia. When contacted by a potential new employer, the former employer is alleged to have stated that the employee "lost his temper" and "just did not fit in". The employee claims that these statements cost him the potential job, so he sued his former employer for defamation.

The Fairfax County Circuit Court is allowing the case to proceed toward trial, finding that the statements made by the former employer were statements of fact, not opinion, and could have impugned the employee's professional reputation and negatively impacted his profession by preventing him from obtaining new employment.

What is an employer to do?

Although Mr. Elsami must still prove that the statements of fact were false, the Fairfax case illustrates the danger of providing references for former employees. Any time you speak with someone about a former employee, you place yourself and your company at risk of being sued. Moreover, the distinction between permissible negative opinions and impermissible factual misstatements is too difficult to determine when giving a negative reference.

The safest route is to adopt a company policy not to provide any information beyond position held and dates of employment. Any additional information and you may find yourself in expensive litigation defending your statements.

Theoretically you could obtain a written waiver and release from your former employee before speaking with third parties. Another alternative is to only give written references directly to the employee, which they can distribute to potential employees if they so choose. The safest course is to provide no statement at all.

To seek legal counsel for your Virginia business, contact Gross & Romanick today.

Monday, July 28, 2008

Alcohol Safety Action Plan ASAP Pre-court Evaluation

As part of its traffic and DWI practice, Gross & Romanick provides many valuable articles for client education. For further information or for legal representation for a DWI in Virginia, contact Gross & Romanick today.

The Alcohol Safety Action Program (ASAP) was established by the Virginia legislature to provide alcohol courses and programs for persons convicted of a DWI (Driving motor vehicle, engine, etc., while intoxicated). As a condition of probation and to obtain a restricted license, a person convicted of a DWI must enter into and successfully complete ASAP. Although a court may decline to order participation in ASAP if the assessment by ASAP indicates that intervention is not appropriate for such person, it almost never happens in the Northern Virginia courts. Nevertheless, a pre-court evaluation by ASAP can be a valuable tool in certain cases.

While an ASAP evaluation normally takes place after a conviction of a DWI, Fairfax ASAP offers a pre-court evaluation service. Someone who is charged with a DWI and who took a blood or breath test indicating a high level of alcohol may wish to obtain a pre-court evaluation. In cases of high blood alcohol levels a judge may require an ASAP evaluation before issuing a restricted license. A pre-court evaluation which indicates that the accused does not have a serious alcohol problem and will not be a danger on the road may enable this person to obtain a restricted license at the first court hearing. Since an ASAP evaluation in Fairfax County can take 6 weeks or more to obtain, a pre-court evaluation may save a person from a substantial period of time without a driver's license.

An appointment for a pre-court evaluation must be made at least several weeks prior to the court date. The evaluation interview is conducted in a group setting and takes approximately three hours. The pre-court evaluation report contains a demographic statement, offense history, alcohol and drug history, recommendations for program requirements and a risk assessment. A copy of the pre-court evaluation report is sent to the court, the defendant's attorney and the client.

Although a good evaluation can be very helpful, a bad report can be devastating to the attempt to obtain a positive result in court. Because the report generally contains information about the drinking behavior of the accused on the day of the charge, a decision to obtain the pre-court evaluation should be made in consultation with an experienced DWI lawyer. This lawyer can also advise the client on how to properly conduct oneself during the interview.

Wednesday, July 23, 2008

The Fair Credit Reporting Act: Review Before You View

Are you a business owner or commercial landlord? Review the following article by the attorneys at Gross & Romanick about the Fair Credit Reporting Act before you request a credit report or conduct a secret investigative consumer report.


Before you offer credit, insurance or a job to an individual, you prudently request a Credit Report on the applicant and their spouse. Because the Report displays a history of late and nonpayment, you decline to give the loan, insurance or job but you do not tell them why. You have violated the Fair Credit Reporting Act (FCRA)!

Without informing the applicant for credit, insurance or a job, you decide to conduct a secret Investigative Consumer Report, which involves personal interviews with third persons and a search of public records. Based upon the report, you decide to extend credit or offer the job. You are now subject to suit under the FCRA!

While the FCRA does not apply to credit or insurance applications in connection with business transactions, it does apply to employment evaluations for prospective and new employees.

Consumer Credit Reports

Consumer Credit Reports on individuals are available through credit reporting agencies such as CBI Equifax and TRW. These Reports are quite extensive (see information below). While Reports are not perfect, obvious credit risks are easily determined by a history of late payments, repossession, bad debts, skips or placement for collection.

Partial reliance upon Reports for denial of employment, credit or insurance (even if the charge for such credit or insurance is wholly or partly increased) requires disclosure to the applicant of the name and address of the credit- reporting agency. If reports are obtained from a source other than a consumer- reporting agency, the individual must be informed of the right to the information utilized if such a request is made within 60 days of learning about the adverse decision.

Investigative Credit Reports

Investigative Consumer Reports are defined by the FCRA as a report that contains information "on a consumer's character, general reputation, personal characteristics, or mode of living" and is obtained through personal interviews with "neighbors, friends, or associates of the consumer." These may include Reports prepared by a credit bureau or any other source, such as a private investigator. These types of investigations are subject to special disclosure requirements because of their potentially damaging nature. Employers and insurance companies are frequent users of such Reports due to concerns about personal lifestyle, drinking habits and sexual behavior.

Within 3 days after a report is first requested, the applicant must be advised in writing of the right to request a complete and accurate disclosure of the nature and scope of the investigation. This disclosure is not required "if the Report is to be used for employment purposes for which the consumer has not specifically applied." If requested by the consumer, the disclosure must be mailed or delivered "to the consumer not later than 5 days after the date on which the request for such disclosure was received from the consumer or such Report was first requested, whichever is later."


Consumer Reporting Agencies are governed by the FCRA which sets standards for assuring the accuracy of the reports and places strict limitations on the distribution of the Reports. Nevertheless, both the Agency and the user of Reports may be subject to civil liability. Actual damages can be awarded in cases of negligent noncompliance with the FCRA, and punitive damages may be granted for willful noncompliance. In a successful suit, attorney's fees and costs may be assessed.

Avoiding Liability

Since guessing wrong has serious consequences, it is preferable not to try to determine whether the context for the use of the Report is business or consumer. For example, a loan may have mixed personal and business purposes; or worse, a hidden personal purpose. In all cases, obtain written consents from individuals before obtaining either Credit Reports or Investigative Reports; and immediately deliver the final Reports to the individual upon request. If the Report resulted in an adverse action, inform the consumer in writing of their right to request within 60 days the reasons for the adverse action.

Establish and maintain reasonable procedures to assure compliance with the disclosure provisions of the FCRA. If you can prove by a preponderance of the evidence that you maintained such procedures, the FCRA provides that you cannot be held liable for such violations. Don't count on it - know the FCRA and comply.

Permissible Uses of Credit Reports
  • Extension of credit (including checks and leases)
  • Employment
  • Insurance
  • Government benefits

Impermissible Uses of Credit Reports
  • Alimony or support proceedings
  • Market research
  • Service of process Voir dire (jury selection)
  • Collection of taxes
  • Compilation of background reports by private investigators

What Is In a Credit Report?

Credit reports include:
  • Social Security Number
  • Current and former addresses
  • Marital Status and number of dependents
  • Employment information (current and former positions)
  • Credit accounts and payment history (credit cards, loans, mortgages)
  • Current status of all accounts (including a credit rating for each account)
  • Public Records (judgments, bankruptcies, garnishments, foreclosures)
  • Inquiries (number of reports requested, and by whom)

For more information about credit reporting or to seek legal counsel, contact Gross & Romanick today.

Monday, July 21, 2008

Finders Keepers, Losers Weepers?

You are walking along a busy street when suddenly the bright gleam of metal catches your eye, reflecting off a small coin wedged into a crack in the aging sidewalk. You reach down to retrieve the coin, which appears to be made of gold. You immediately run to the nearest jeweler, who confirms your hopes: the coin is made of solid gold. Great! A windfall! "Finders keepers, losers weepers" right?

Well, maybe.

The laws governing lost property are rather complicated. Any property that you find on the sidewalk falls into one of three categories: abandoned, lost, or mislaid. Title to "abandoned" property, in which the owner has voluntarily relinquished all ownership, vests in the finder - you can keep it. The catch is that you will have to show that the owner intended to give up all title and possession.

A finder of "lost" or "mislaid" property has a more limited right of ownership. Property is "lost" when the owner has accidentally parted with its possession and does not know where to find it. Property is "mislaid" when the owner intentionally places it somewhere, but thereafter forgets where it is. In the case of "lost" property, a finder of the property is entitled to possession except against the original, true owner. In the case of "mislaid" property the owner of land on which the property was found has a right to possession, not the finder of the property.

In both cases, "lost" and "mislaid," the finder has a legal duty to try to find the true owner, if he has reasonable means of doing so. And if the owner does return to recover his property, the finder may be liable for any damage to the property resulting from his negligence.

So, can you keep the coin? Well, maybe.

For more answers to your legal questions, visit Gross & Romanick's publication section on litigation. For legal counsel, contact Gross & Romanick today.

Tuesday, July 15, 2008

The Statutory Lien: Doctor's Send Your Bills

Whatever difficulties a doctor may encounter in collecting a bill owed by a patient who was negligently injured, he is assured of as much as $500 under Virginia law. Section § 8.01-66.2 of the Virginia code provides for a lien for his "just and reasonable charge" up to that amount on the claim of an injured person whose injuries are alleged to have been caused by another's negligence.

In order to assert your lien, send copies of your bills to the attorney representing the patient. If the attorney is uncooperative (refusing to sign a lien/assignment), it might be prudent to send copies to the negligent party's insurance company.

For more information or to seek legal counsel, contact Gross & Romanick today.

Wednesday, July 9, 2008

A Happy Client

Jeff Romanick of Gross & Romanick recently received a letter from a client happy with the legal representation he received at our firm. We were so touched by the gentleman's kind words we thought we'd share it with you.

He wrote:

"I wanted to take a few minutes to say "thank you" for the outstanding representation that Ash Dean provided for my wife.

From what I have gathered from my wife, Ash's quiet, calm, reserved demeanor belies the heart of a tiger and the spirit of a fighter that simply does not accept "no" as an answer.

Ash arrived at court very well prepared, he had a most soothing and calming effect on my wife during all this stress and yet he took on both a very determined police officer and a resolute prosecutor and he negotiated a settlement that would have made Donald Trump proud. As a result of Ash's efforts, I consider his work a victory.

Ash is a credit both to his profession and to your firm. If I were you, I'd do whatever it takes to make sure you keep him.

I hope in a way our paths never have to cross again, but if they do, I know the law firm I'll be talking to to represent us in all traffic matters....Gross & Romanick."

If you need legal representation for a traffic matter in Virginia, contact Gross & Romanick today.

Monday, July 7, 2008

Virginia Contractor's Hit Hard By Taxes/Licenses

If you do construction contract work in Virginia, you may wonder when the taxes end and the profits begin. Both federal and state laws require income taxes, but you may not realize the extent to which localities can pick your pocket. Here is a brief summary of some of the taxes and fees that Virginia counties, cities and towns can levy on your business:

§58.1-3703 - Counties, cities and towns can require a license, impose a fee and assess a license tax.

- Under the new BPOL tax restrictions, localities cannot impose a license tax on gross receipts of $100,000 if the locality has more than 50,000 people or $50,000 to $25,000 if the locality has between 25,000 and 50,000 people. For contractors, the rate can be no higher than 16 cents per $100 gross receipts. However, BPOL rates can be set higher if a locality had such rate set on January 1, 1978.

- Contractors subject to a license tax can also be required to post a bond and prove maintenance of workers' compensation coverage before getting a business license.

- Contractors are exempt from paying to other localities if they pay the required license tax in their office locality. However, if the work in another locality exceeds $25,000, that locality may assess a license tax.

Virginia also has no shortage of licensing requirements, including:

§54.1-1106 - Class licenses are required by all contractors doing work valued over $70,000 in a single contract or project; or $500,000 over a twelve month period.

- Class B licenses are required by all contractors doing work valued over $7,500 in a single contract or project but less than $70,000; or a total of $150,000 but less than $500,000 over a twelve month period.

- Class C licenses are required by all contractors doing work valued over $1,000 in a single contract or project but less than $7,500; or a total of less than $150,000 over a twelve month period.

- Before issuing a building permit, a locality can require proof of licensing or an affidavit demonstrating that a license is not required. In addition, an applicant must prove that required license fees and taxes have been paid.

- Nonresident bidders cannot bid on jobs in Virginia without appointing the Director of the Department of Professional and Occupational Regulation as their agent for lawful process.

- A fine of $500 per day can be assessed for failure to obtain a valid Virginia contractor's license or certificate, as well as conviction of a Class 1 misdemeanor.

- Counties, cities and towns can require local licenses if contractors do not have a Class A license.

If you're a contractor in Virginia and need legal counsel to help navigate needed taxes and licenses, please contact the Construction offices of Gross & Romanick today.

Tuesday, July 1, 2008

Security Deposit Treatment in Bankruptcy

What happens to a tenant's security deposit after the tenant files bankruptcy? If rent is owned, can the landlord apply the deposit to unpaid rent?

An informal poll of area Bankruptcy Lawyers reveals a belief that a security deposit can be used as a set- off against both pre-petition damages and lease termination damages under Section 553 of the Bankruptcy Code. The set off is subject to mitigation by the landlord, including releting the premises. The safest process is to have a court grant relief from stay before applying the security deposit; but this procedure may cause a debtor to file an objection. Right or wrong, most Landlords simply keep the deposit.

Some attorneys also argued that Landlord can assert a "secured claim" up to the amount of the security deposit.

For more information contact the Business Law division of Gross & Romanick today.