Collective Bargaining Agreement – Boeing Company showdown with Machinists

So yet another Collective Bargaining Agreement negotiation is coming down to the wire, this time between the Boeing Company and the International Association of Machinists and Aerospace Workers (IAM).  Currently, the IAM has two votes in front of its members:  whether to accept Boeings “best and final offer“, and whether to call a strike.  The IAM has recommended rejecting Boeing’s contract offer and has asked for a strike authorization, which requires a two-thirds vote in favor.  Vote results are due tonight, and a strike could commence as early as 3 am EDT Thursday September 4.

Boeing has recently increased its offer of a 9% pay increase to 11%, as compared to the union’s demand of 13%, and the two sides are also negotiating differences over retirement and pension benefits in addition to medical costs.

On top of a heck of a lot of jobs at Boeing and its subcontractors, the first test flight date of the 787 “Dreamliner” is at risk of being pushed back further, at an estimated cost of $100 million per day of additional delays.

The agreement has not yet been finalized, but once it becomes publicly available, you should be able to find it alongside millions of legal documents and clauses at www.RealDealDoc.com.

How to draft better agreements and contracts

One of the first things a transactional lawyer learns out of law school is that, when in doubt, finding something somebody else has written that could fit the deal structure you’re working on is your best bet in getting something turned around quickly.  In fact, entire industries (see:  knowledge management, enterprise search applications, etc.) have been built around this, with the legal industry being a natural consumer of these products.  For transactional lawyers, many have turned to SEC Filings providers.  The question is why, followed up with a quick “how can we do it better”?

The reason transactional lawyers have turned to SEC filings is that they contain SEC Exhibits, many of which contain material contracts that public companies are required to disclose to the investment community.  Here are a few relevant examples of meaty, deal-containing exhibits that transactional lawyers want to chew on and then reproduce in their own agreements:

• SEC Exhibit 1 – Underwriting Agreements
• SEC Exhibit 2 – Acquisition, Reorganization, Merger and Liquidation Agreements
• SEC Exhibit 3 – Articles of Incorporation and By-laws
• SEC Exhibit 4 – Security Section Holders Rights Documents
• SEC Exhibit 5 – Legal Opinions of Counsel – usually boilerplate, but occasionally contains a “gotcha”
• SEC Exhibit 8 – Tax Related Opinion Letters
• SEC Exhibit 9 – Voting Trust Agreements
• SEC Exhibit 10 – Material Contracts – a real catch-all, but a gold mine of legal agreements and contracts.  You can see hundreds of thousands of these organized by document category at www.RealDealDocs.com and its preview site for legal agreements and contracts. 
• SEC Exhibit 99 – Miscellaneous filings – another catch-all category

Of course, the challenge is that it is a pain in the ass to find what you’re looking for from these exhibits unless you know exactly which company filed the exact type of document that you need to find.  Good luck there!  With some providers, you can do a title search within certain types of exhibits, but of course there you are hoping that the filing company gave a very precise title in some document filing tags to the specific exhibit you are searching within, regardless of the actual title of the agreement.

RealDealDocs.com, from Practice Technologies Inc., makes it much easier by organizing all the legal agreements and material contracts by the type of document, and giving you powerful search tools to find them.  For example, if you are looking for a merger agreement, an executive employment agreement, or maybe a revolving credit agreement from public companies, you might find these within SEC Exhibits 2, 10, or 99 across a variety of filings, including SEC Filing Form 8-k, SEC Form 10-k, etc.  How do you know where to start?  RealDealDocs.com makes it easy by providing you with easy to use search forms for the type of document you want to find, regardless of the source.

I encourage all of you frustrated, efficiency-seeking lawyers to give RealDealDocs.com a try.  While it’s not cheap (less than $70/month, and much less for longer term memberships), the leverage it will provide you in terms of finding the best documents drafted by the top law firms will be tremendous.  You’ll negotiate better deals, save hours in drafting documents or clauses from scratch (you can even find specific deal clauses from deals), and get the heck out of the office that much earlier while leaving behind happier clients.  Mention this post in an email to sales@realdealdocs.com and they’ll even knock $30 off your membership, which you can cancel at any time.  (Fair disclosure – I co-founded this company.  I don’t get a kickback, but I will personally guarantee they take care of you on this.)

Have any better tips on finding and leveraging these types of legal agreements?  Comment away!

Is the Merger Mania back?

Actually, no.  But we are seing some indications that strategic buyers are at least tip-toeing back into the mergers and acquisitions market.

For several years, the access to cheap credit provided the liquidity and leverage to fuel the largest acquisitions boom in the past 20 years.  Private equity firms were increasingly able to bid up prices using cheap capital and aggressive capital structures, sidelining many strategic acquirers who needed to justify acquisitions using more traditional models.  With the credit markets drying up in the past 18 months, private equity firms have been forced out of the game, and there is little indication that we’ll see any return of the mania until the credit markets at least return to normal.

However, there are some indications that strategic buyers are gradually stepping up efforts to take out rivals and expand market share, even as share prices have fallen in the past eight months.  Foreign companies are taking advantage of the cheap dollar to acquire US-based rivals, most prominently InBev’s acquisition of Anheuser-Busch – see agreements involving Anheuser-Busch here.  And some US-based companies are also making noise:

• Skechers USA bid on Heelys for less than 15% of what it was priced for just 2 years ago (see many Skechers agreements here), and
• CVS Caremark Corp made an unsolicited bid for Longs Drugs for $3+ billion last week as well.

We’ll be posting these merger agreements alongside our library of millions of legal agreements and clauses from top law firms and the largest companies in the world over the coming weeks.  Of course, we’ll be keeping an eye on the overall market trends on not just the mergers and acquisitions space but also across the many other practice areas we cover.

Searching for Legal Agreement Templates?

Need to quickly find sample language for certain types of agreements?  Or do you already have a template or form agreement, and you need to look across millions of legal documents to find specific language to make the form fit the deal you’re working on?

It may be helpful to check out RealDealDocs.com, which recently added another feature to its legal agreements and contracts preview site.  This feature allows you to quickly browse through, by company name, tens of thousands of agreements and contracts that were drafted by top law firms for some of the largest companies in the world.  Being able to browse and Search Company Agreements enables legal and deal professionals to:

• Dramatically cut research and drafting time
• Gain competitive intelligence about the types of agreements leading companies in particular industries have entered into
• See how these deals are negotiated and drafted, usually by top law firms
• Find out which law firms are working with specific companies

The preview site is helpful because it allows you to kick the tires and see at least partial views for specific agreements.  More powerful free search tools, including the ability to find specific provisions from different types of agreements, are available at the main site, www.RealDealDocs.com.  Bottom line – sites like this give you the ability to save time and money while constructing better deals because you can leverage the work from top law firms across the country and around the world.

Our Joint Venture Agreement experience (so far)

We recently formed a joint venture agreement to be able to populate one of our new web properties with several million legal documents, primarily court filings.  Generally, joint venture agreements are typically entered into by larger companies, not small to mid-sized businesses (SMBEs), but we felt this was the most effective way to accomplish our objectives.  Parenthetically, it also functioned to help us resolve some ownership and IP issues around a product which was developed for us by one of our consulting partners.

I’m sure many of you are familiar with the nature and objectives of a joint venture relationship, as opposed to a strategic alliance.  For those of you who are not, here is a quick review of the basics:

A joint venture is a legal entity formed between two or more parties, where the parties contribute equity and agree to an allocation of ownership and control, as well as the revenues, expenses, and their respective responsibilities and obligations.  The joint venture can be for one specific project only, or it can result in an ongoing business relationship.  This differs from a strategic alliance agreement, which is a much looser relationship involving contractual obligations but no equity stake (you can see lots of strategic alliance agreements here).  I should quickly note that a joint venture may be any legal structure (a corporation, limited liability company, partnership, etc.), the determination of which depends on a number of considerations such as valuation, tax, and liability.

OK, so back to our regularly scheduled programing.  We chose to enter into a joint venture agreement for several reasons:

1. We had a great partner we trusted.  I can’t emphasize how important this is, and I can’t say enough about the quality of the team we are working with.  For us, this relationship represents an important commitment around what we hope becomes one of our major web properties. 
2. The relationship provides an excellent way for us to scale up and leverage each of the parties’ strengths.  While we have outstanding technical and engineering resources, the group we JV’ed with has 10-15 years of experience in acquiring and managing the content that we are using to populate this particular web site.  We have built up a very deep bench of marketing and product development expertise in providing legal information services to the legal and other professional service providers, so it’s a great fit.
3. We were able to clearly identify and allocate resources and responsibilities, and we needed a structure which could help us cleanly allocate intellectual property.
4. We both needed to think about a longer term relationship which would provide appropriate incentives in the form of buyout provisions to make sure that everyone was committed to the deal.

So how’s it going?  Great.  We got off to a bit of a slow start, but we’re turning the product loose in the next 60 days or so, and we’re excited about the prospects.  Stay tuned.

Ten Key Provisions for Independent Contractor Agreements – Part 3 of our Updating

Briefly skipping over the important intellectual property ramifications of utilizing independent contractors rather than employees, I wanted to quickly review some of the important deal terms for independent contractor agreements, which are also available on a fully searchable basis at www.RealDealDocs.com.  I’ve also provided links to some recent independent contractor agreements filed by some public companies, such as this independent contractor agreement from an environmental consulting and technology provider based in Canada in addition to the ones found at the sites above.

It is generally good drafting to include the following terms in independent contractor agreements, particularly if your objective is to preserve independent contractor status rather than an employee relationship:

1.   Who the parties are and what is their intended relationship (i.e., independent contractor status)

2.   The services to be provided

3.   Compensation, the nature and timing of which contributes to the determination of independent contractor status

4.   Reimbursement of expenses

5.   Company’s cooperation obligations

6.   An affirmative representation of independent contractor’s understanding of tax obligations

7.   Ownership of work product, with particular attention to the assignment of intellectual property rights, which under statutory law in the US are automatically held by the independent contractor unless specifically assigned to the Company

8.   Confidentiality / non-disclosure and non-solicitation of employees or customers

9.   Termination provisions (the easier the independent contractor can terminate without penalty, generally the more likely an employee relationship is found)

10.   General provisions, including warranties, governing law provisions, arbitration, notices, survival, severability, assignability, indemnification, etc.

I should also mention that you can search here for specific deal clauses and provisions from independent contractor agreements, or from any other type of agreement for that matter.

Determining Independent Contractor vs. Employee Status – Part 2 of Updating our Independent Contractor Agreements

As I mentioned in a previous post on how we are updating our independent contractor agreements, one of the critical determinants is to figure out whether someone is an employee or an independent contractor.  This is important because it determines a Company’s liability to pay and withhold Federal income tax, social security, Medicare, and Federal unemployment tax, as well as potential liability for state based taxes.

Essentially, the tests to determine whether someone is an employee or an independent contractor come down to an issue of control – the more control the Company exerts over the individual, particularly with regard to how the work gets done and how autonomous the individual is in calling its own shots, the more likely the relationship is going to be seen as an independent contractor relationship.

The IRS breaks these elements of control down into three categories in this helpful guide:

1. “Behavioral Control – Facts that show whether the business has a right to direct and control the individual.”  These factors include the specificity of instructions and training.
2. “Financial Control – Facts that show whether the business has a right to control the business aspects of the worker’s job.”  To me, these factors go to how financially independent the individual is in terms of its ability to operate its business of providing services to the Company.
3. “Type of Relationship – Facts that show the type of relationship,” which include such factors as how long the relationship is intended to last, the written intention of the parties, etc.

In addition to the criteria proposed by the IRS, there are a number of common law criteria used in determining an individual service provider’s status with regard to employment, and individual states have their own guidelines for determining an individual’s status.  For example, see California’s guidelines here.

I’ll discuss some very important issues around intellectual propery ownership for independent contractor relationships in a subsequent post.

6 Tips on the New California Driving Ban on Handheld Cell Phones

Not so new, actually, as they were passed in late 2006, but the new prohibitions for driving while using a handheld cell phone in California take effect July 1, 2008.  Here’s the lowdown on the new California bans on using handheld cell phones while driving:

1)       It’s still OK to talk on the phone, but it must be handsfree to use it while driving.  And yes, holding the phone to dial is allowed.

2)      Amazingly, both text messaging and reviewing emails is not illegal per se.  Of course, to the extent you drive erratically or are involved in an accident, that could still result in citations and/or legal responsibility.  We expect this to be restricted or prohibited in the next 12 months.

3)       Any use of cell phones by those under 18 is banned, whether it is handheld or hands free.

4)       You may use a handheld phone for emergency purposes, but only to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.

5)       Commercial drivers are exempted from the law.

6)       Using a hand held device is considered a primary violation, so you may be stopped and cited just for this offense.  The prohibition on drivers under 18 using hands free devices is a secondary violation. 

One important legal aspect to take into account is that, while the fine and associated penalties are less than $100 for the first offense, the fact that it is a separate offense means that any negligent or reckless driving while using a handheld device resulting in, for example, a death could be more easily treated as manslaughter by a prosecutor.

You can find the full text of the new laws under California Vehicle Code (VC) §23123 and VC §23124.  If you are interested in other states’ requirements, there is a helpful link from the Insurance Instititute for Highway Safety here.

We have yet to see the new cell phone restrictions hit many companies’ personal vehicle use policies, but if you’d like to see some of them, you can find them under the Vehicles/Driving document type within the Labor & Employment Policies document category at http://www.realdealdocs.com/SearchDocument.aspx.

 

 

Updating your independent contractor agreements template

There is a very wide range of issues you can consider in determining how to structure and draft a consultant / independent contractor relationship.  I’ll be walking through some of these issues in a series of posts over the next several days, but they include:

1. Understand the key differences between independent contractor and employee status.  These include issues ranging from tax withholding responsibilities and worker’s compensation coverage to other general liability issues.
2. Reviewing the particular nuances of intellectual property ownership in an independent contractor relationship.
3. Covering the general contractual elements found in typical independent contractor agreements.

In our business, we like to keep these agreements relatively straightforward, and we rely on templates which cover the key issues.  That said, we’re sticklers in terms of IP assignment and the like, as many venture-backed businesses are.

If you are looking for some outstanding independent contractor agreement samples or templates, I’ve highlighted an excellent resource of documents that were drafted by some of the largest companies and law firms in the country. 

Writing Delaware employment agreements

I recently wrote about new resources for identifying California Employment Agreements to use in your business, or for drafting documents for your clients.  The rationale is clear – negotiating effective employment agreements that are applicable to your jurisdiction is essential to enforcing your rights appropriately.  Additionally, the ability to leverage legal agreements drafted by top law firms enables business owners and lawyers alike to find new ways of constructing deal terms or simply getting documents turned around more quickly.

This of course applies to many state jurisdictions within the United States, not the least of which is the ability to quickly find and browse across thousands of Delaware employment agreements.  These documents are particularly likely to have been drafted by top law firms, as large corporations tend to be disproportionately organized under Delaware law. 

If you need to find Delaware employment agreements using full text search criteria or other tools, such as limiting searches to particular industries, you can do that as well using these employment agreement search tools.