Monday, December 21, 2009

BCS makes new law regarding corporate debt collections

On November 18, 2009, the Georgia Court of Appeals embraced the argument put forward by the law firm of Briskin, Cross & Sanford, LLC and established a significant new precedent in civil litigation.

Law firm Partners Alan Briskin and Byron Sanford succeeded in convincing the Court to extend existing case law to restrict judgment debtors from fraudulently transferring assets to avoid collection on court judgments. This decision makes strides to protect the ability of individuals and businesses to collect sums awarded to them by the courts, arguably one of the most burdensome issues faced by parties seeking justice through the civil courts.
Byron Sanford stated, "In civil lawsuits, justice is served not through the mere verdict of the court, but through the ability of the winning party to benefit from the court's judgment in its favor. In most cases, the burden of collecting the benefits justly granted by the court falls on the shoulders of the winning party, whose available instruments for collection are costly and limited by their available means." 

This transfer, which significantly diminished the value of the court-levied stock and the winning party's ability to collect on the awarded sums, was declared by the trial court to be unlawful and not authorized by proper corporate authority since the stock was in the hands of the sheriff.

In arguing before the Court of Appeals, Briskin and Sanford sought to have the trial court's ruling upheld and to have the Court of Appeals restrict transfers by the corporation while its stock was under levy by the trial court. In its ruling, the Georgia Court of Appeals agreed with the arguments set forth by Briskin and Sanford and declared that such transfers are void and without effect. The Court further agreed with the position of Briskin and Sanford that the trial court had both the jurisdiction and the authority to void this sale of assets.

Regarding the Court of Appeal's ruling Sanford further stated, "Our firm is deeply gratified with this ruling on behalf of our client. We are proud to have had a part in extending Georgia precedent to prevent judgment debtors from using fraudulent transfers to avoid the duties imposed upon them by law." 

Friday, December 18, 2009

A lesson for employers: AT&T sued for alleged violations of the FLSA

AT&T and two of its subsidiaries have been hit by a class action lawsuit brought by approximately 5,000 of its employees who allege that AT&T violated the overtime pay requirements of the federal Fair Labor Standards Act (the “FLSA”). The employees are claiming an estimate $1 Billon in unpaid overtime and damages, stemming from a company-wide policy in which AT&T classified first-level managers as exempt from overtime pay requirements.

This case serves as an object lesson for employers of all sizes of the perils that can lie in the decisions surrounding how to compensate employees. Federal labor laws are complex and fraught with subtle distinctions and grey areas which can lead even companies with sophisticated HR departments and legal counsel into uncertain and perilous ground. The danger for many companies, particularly either smaller or struggling business, is that violations of the FSLA carries with it not only a requirement that the employer pay out any unpaid overtime pay, but a violating company is also subject to additional damages equal to the unpaid overtime, as well as the attorneys’ fees incurred by the employees in recovering the unpaid overtime.  This sort of “double damages” provision can be ruinous for business that already struggle with costs of doing business in a difficult economy.

Further complicating matters is the fact that, unlike many other federal employment laws, the FLSA applies to business of all sizes, ranging from companies with a single employee to ones with tens of thousands of employees.

Cases such as the AT&T case are good example of why it is vital for business, regardless of size or industry, understand how federal and state labor laws apply to it, and likewise ensure that their policies and practices are fully compliant. The cost of not doing so makes the relatively minimal expense of such an “ounce of prevention” far more attractive than either the “pound of cure” or, even worse, the cost of an adverse judgment.