PLDO Law Blog


Deadlock. Impasse. Stalemate. There are few words more dreaded to a corporate director (except maybe "SEC investigation"). What to do when the power brokers in a company just can't agree is a problem that plagues business planning experts and litigators alike. Spoiler alert: there are ways to dodge the bullet of corporate deadlock by way of savvy business planning. But what happens when directors are already at the point of no return?


When the Commonwealth of Massachusetts first established the framework for its legal marijuana industry, Massachusetts law required dispensaries to form and operate as nonprofit corporations. This mandate forced founders and angel investors alike to implement overly complex corporate structures to legally stream revenue out of the nonprofit corporation to investor controlled entities to make investment in this high-risk industry palatable. A common example included the creation of for-profit management companies providing management and consulting services to the dispensary for a price, controlled by the very same parties providing seed monies to the nonprofit dispensary. Also, commonplace were investor-owned real estate holding companies which would lease space to the nonprofit dispensary, in turn generating reliable rental income for investors as an alternative means to see a return on their investment. Frequently, these contractual arrangements were used in tandem. The need for these complex corporate relationships, however, is obviated by a recent change in Massachusetts law.

Password Sharing May Be A Crime

Amid the flurry of recent news about computer hacking and data breaches, a recent lawsuit quietly wound its way up to the steps of the United States Supreme Court. In that case, a former employee left his employer to open a competing business. After he left, he asked his assistant at his old firm to lend her login credentials to him so that he could access his former employer's database. He then used her password to log into his old firm's database. His former employer launched an investigation and reported him to the authorities.


A vexing problem for employers is the period of time it must allow for leave. A very recent decision from the United States Court of Appeals for the Seventh Circuit demonstrates that courts and administrative agencies continue to disagree regarding an employer's obligation to provide extended leave beyond that mandated by the Family Medical Leave Act (FMLA). Severson v. Heartland Woodcraft, No. 15-3754 (7th Cir. Sept. 20, 2017) (Sykes, J.).


A very recent decision in a federal district court case highlights the risk of off-the-clock wage claims. Andrews v. Weatherproofing Technologies, Inc., C.A. No. 15-11873-TSH (D. Mass Sept. 28, 2017) (Hillman, D.J.). In that case, a Massachusetts roofing contractor employed roofing technicians who inspected and repaired roofing systems that the employer installed for its customers. The technicians were typically in the field during the day and claimed that at night they would complete paperwork related to the day's work.


If yours is one of the small clinical practices with less than $30,000 in Medicare revenue or fewer than 100 unique Medicare patients per year, October 2, 2017 will be just another Monday. However, for most Medicare-participating health care practitioners, Monday, October 2, 2017 marks the deadline for significant reporting requirements under the Centers for Medicare & Medicaid Services ("CMS") Quality Payment Program of the Medicare Access and CHIP Reauthorization Act of 2015 or "MACRA".


Recent studies on the electrical usage of cannabis cultivations have confirmed what many in the industry have known first hand for quite some time - indoor marijuana grows use substantial amounts of electricity. While the advent of LED grow lighting has helped reduce costs for cultivators willing to deviate from the historical norms of using traditional 1,000 Watt grow lamps, the industry continues to drastically outpace other industries in usage, in part, because lighting is only one contributing factor to a cultivation's electrical bill. The constant humming of fans deployed to balance heat, and sizable HVAC systems needed to disburse moisture and mitigate odor, are also primary contributors.

Mechanics' Liens: A Complex but Powerful Remedy

For a contractor, subcontractor or supplier who has not been properly paid, few remedies match the power of the mechanics' lien. A properly-recorded mechanics' lien allows a party to file an action in state court against the subject property, and to foreclose and force the sale of that property to satisfy the lien amount. In fact, the mechanics' lienor typically has priority over all other creditors except those with superordinate mortgages or liens. Accordingly, a property owner will typically secure a bond for the amount of a properly recorded mechanics' lien, with the lien transferring from the property to the bond. This gives the lienor a source of cash for the satisfaction of the unpaid amount.

Regulatory Agency Removes Roadblocks to Consumer Lawsuits Against Financial Institutions

The Consumer Financial Protection Bureau ("CFPB") has recently banned most types of mandatory arbitration clauses that require credit card and bank customers to use an arbitrator when they have a dispute with a financial institution. The new rule is intended, in part, to deter wrongdoing by financial institutions by allowing customers to file class action lawsuits against them.


We read about companies and individuals being scammed by hacking or spoofing routinely. No business or individual is immune. Spoofing is a technique in which the spoofer goes to great lengths to secure access to user systems and the information behind protective fire walls. This type of scam artist tracks email communication in an attempt to trick the recipient of an email to release sensitive information or even gain access to bank accounts and confidential information. Email spoofing is also referred to as "phishing," and is employed to make the recipient of an email believe that the sender is a known source. Always beware of "From" when you do not recognize the sender because what appears to be real, may turn out to be a phishing attempt. And anytime a sender is asking for a password or personal information, delete the email immediately.

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