Mandatory Arbitration Clauses Within Contracts

What They Are and How They Are Enforced!

by Jennifer McMenomy

In general, when parties enter into a contract, they do not contemplate potential legal disputes arising in the future. However, it is important for parties to outline how they will handle a contractual dispute if one does occur. Including an arbitration clause in a contract will help to eliminate some of the litigation costs and uncertainties that may transpire if a dispute over a contract should develop.

A mandatory arbitration clause is a provision contained within a contract that states that all legal disputes between the parties to the contract will be settled through the process of arbitration. Arbitration clauses are very common and can be found in various types of business contracts including: purchases for goods or services, employment contracts, construction contracts, etc.
Many sophisticated parties and businesses include a mandatory arbitration clause in their contracts because it enables them to settle legal disputes regarding the contract quickly, quietly and without the expense of litigation.

Arbitration is the process of settling a legal dispute between two or more parties using an impartial third person. Therefore, if a dispute arises regarding a provision of the contract that cannot be resolved between the parties themselves, the parties will present their issues to an arbitrator, or neutral third party, instead of through traditional litigation proceedings.

There are many professional arbitrators and organizations that parties may choose from. Some of these specialize in the specific area of the law or business issue. The selection process may be (but is not necessarily) specifically included within the language of the arbitration clause. Generally, the arbitration clause will outline who pays for the arbitration, whether each pays half of the cost of the arbitrator and their own attorney’s fees or whether the non-prevailing party pays these expenses.

Generally, an arbitration clause will state where the arbitration will take place and what law will govern the dispute, should one arise. For instance, if a contract is entered into in Nevada, the arbitration clause will likely state that the contract dispute must be arbitrated in Nevada. It is very important to include within the mandatory arbitration clause, the state and/or location of where the arbitration must take place and the governing law within the arbitration clause to avoid confusion and conflict.

If there is not a specific provision within the contract regarding which law applies, then depending on the nature of the contract, the arbitration clause may be governed under federal or state law. The Federal Arbitration Act (FAA) governs agreements where the contract involves a transaction that crosses state lines, also known as “affecting interstate commerce.”
If the contract does not deal with interstate commerce, then state law will apply. There are several factors to take into consideration when determining exactly which state law applies; however, for the purposes of this article, it is assumed that Nevada law will apply to the arbitration clause.

If the arbitration provision in the contract is governed by Nevada law, there are some specific requirements that must be met before the provision is enforceable. Nevada Revised Statutes (NRS) Chapter 38 governs arbitration provisions within contracts. In Nevada, arbitration agreements between parties to a contract are favored as a matter of public policy because they allow for judicial economy and ease the burden of the courts.

While arbitration agreements are favored, Nevada law sets a higher standard of enforcement for arbitration clauses contained within contracts than most states and the FAA. NRS 597.995(1) requires “specific authorization” of the arbitration clause by each of the parties to the contract.

If “specific authorization” is not provided by the parties, it can render the arbitration clause void and unenforceable. If a mandatory arbitration clause is found to be unenforceable or void, a party can choose to litigate the dispute through the court system and is no longer bound by the contract to arbitrate its claims.

While the statute does not expressly state what “specific authorization” means, the Nevada Supreme Court has given some idea of what constitutes specific authorization under NRS 597.995(1). In Fat Hat, LLC v. DiTerlizzi (2016), the Court found that a signature of a party to the contract on the general signature line at the end of the contract did not meet the specific authorization requirement.

The Court found that, even though the arbitration agreement contained within the contract was right above the signature line, it did not constitute specific authorization. While this case is unpublished and therefore is not controlling in future cases, it may be persuasive as to how a court will view the statutory specific authorization requirement.

To ensure that Nevada’s specific authorization requirement is met, it is important that an agreement includes an additional signature or initial line directly below the arbitration clause to ensure that each party assents to the arbitration clause. By including an additional signature or initial line to the arbitration provision the “specific authorization” requirement will likely be met and ensure that the arbitration clause within the contract is enforceable.

  1. The take away…in order to ensure that an arbitration provision is enforceable, the contract must include the following:
  2. The arbitrator or group identified to arbitrate the dispute;
  3. Who will pay for the legal and arbitrator fees;
  4. The governing law that is to apply to the contractual dispute;
    A signature or initial line set apart from and directly below the arbitration provision to ensure that the “specific authorization requirement is met.”

It is recommended that you seek the assistance of knowledgeable legal counsel in developing and reviewing these clauses in order to protect the future of your business dealings should a conflict arise.

See the article at: Northern Nevada Business View.

Thought Leaders: Are your workers independent contractors or employees?

By: Jennifer McMenomy

Are Your Workers Considered Independent Contractors or Employees under Nevada Law for the Purposes of Payment and Collection of Wages and Other Benefits?

If you are an employer in Nevada, you know your employees are required to be paid a minimum wage for work performed, be provided certain insurance benefits depending on full or part-time status, be compensated properly for overtime, are allowed breaks, and other benefits. You may also know that if you engage independent contractors, these workers are not necessarily entitled to all the benefits afforded to those with an employee status. It is important for you, as an employer, to know the distinction between an independent contractor and an employee to protect your business from liability.

To establish an independent contractor relationship for the purposes of payment and collection of pay and other benefits, there is a relatively new law that has been enacted in Nevada to help employers and workers alike determine their role in the workplace. The determination that a worker is an independent contractor is dependent on several factors that have been enumerated within the law.

In June of 2015, Senate Bill 224 was signed into law. The bill created a “conclusive presumption” that a person is considered an independent contractor if that person meets certain criteria set forth under the law. A “conclusive presumption” requires a court to presume an issue or fact is true notwithstanding evidence to the contrary. Therefore, if a court makes a conclusive finding that a worker is an independent contractor, the worker will not be able to provide evidence to the court opposing that finding.

Under S.B. 224, codified at NRS 608, a person is conclusively presumed to be an independent contractor for the purposes of Nevada Revised Statutes (NRS) Chapter 608—Provisions Governing Payment and Collection of Wages and Other Benefits– if the following requirements are met:

a. The person must not be a foreign national and must be legally present in the United States;

b. The person is required, under their contract with the principal, to hold necessary state or local business licenses and maintain any necessary occupational licenses, insurance or bonding; and

c. The person meets three or more of the following requirements:

1. The person has control over the means and manner of the performance of the work they do and the result of that work;
2. The person has control over the time in which the work is performed (an exception is made here with respect to agreements with a principal regarding completion schedule, range of work hours, and/or for those performing as entertainers);
3. The person is not exclusively required to work for the principal unless the law or a regulation requires exclusivity, and/or the agreement provides for exclusive services for a limited period;
4. The person can hire employees to assist with the work;
5. The person contributes a substantial investment of capital in the business of the person, for instance the purchase of tools and equipment, and/or the person asks for permission from the principal to access the work space from the principal and/or leases the work space from the principal.

For the purposes of this article, the principal is the person who engages another to do any work.

If a person does not meet three or more of the requirements of section (c), that does not mean they will be considered an employee, rather there will be no conclusive presumption made regarding the person’s status as an independent contractor. A finder of fact, meaning a judge or jury depending on the proceeding, will have to determine whether the worker is an independent contractor or an employee under the law.

In interpreting the factors presented in NRS 608, the important word to keep in mind is control. Does the worker or the principal (employer) have control over the timing and the manner in which the work is performed? Does the worker or the principal have control over the materials, tools, and space in which the person is working? Who has control over the financial aspects of the tasks to be performed? Does the worker have the freedom to perform work for a different entity while also working for the principal? If the general answer is that the worker has the control over those aspects, it is likely that the person will be deemed an independent contractor under the law.

Please note that the conclusive presumption of an independent contractor under NRS 608 only applies to Nevada’s wage and hour and benefits laws. The tests for determining whether someone in an independent contractor for the purposes of unemployment, the Nevada Industrial Insurance Act (NIIA), and for tax purposes can be found in other places within the Nevada Revised Statutes and the Federal Tax Laws.

As always, it is of the utmost importance for business owners to have a signed, written agreement with independent contractors that outlines their duties, responsibilities, and the expectations of the task or job to be performed. Be aware, however, that merely classifying a worker as an “independent contractor” in an agreement or contract will not be conclusive as to whether that worker is indeed an independent contractor or employee under the law.

See the Article at NNBV

Understanding the Impact of “Rule of Law” on Nevada Businesses

Joel W. Locke Gets the Latest at the Nevada State Bar Annual Meeting

Joel W. Locke, attorney with Allison MacKenzie Law Firm in Carson City, Nevada

Carson City attorney, Joel W. Locke, a partner at Allison MacKenzie Law Firm pens short series on “The Rule of Law” to help educate Nevada businesses on its impact. Locke recently attended the State Bar of Nevada Annual Meeting in Chicago, IL. The three-day event was held at the Drake Hotel on July 12th thru 14th, 2018. The meeting’s theme was “The Rule of Law” and focused on the discussion of how the legal profession has helped shape the rule in our country’s history, and its role in the future.

The annual meeting provides attorneys with insight into recent developments in law and the legal profession as well as providing a unique opportunity for attorneys to interact with expert judicial figures. One of the goals of this year’s conference was to celebrate and educate the attendees on the role that lawyers have in supporting the “Rule of Law.”

Locke’s inaugural article, The Rule of Law – Part I, was released on July 23rd, 2018 and can be found at: AllisonMacKenzie.com. Part I explores the famed McDonald’s spilled coffee case and includes a video by guest speaker, Susan Saladoff. Additional articles will be released in the upcoming weeks.

“The State Bar of Nevada’s Annual Meeting is an excellent event where I am able to further my knowledge of pressing legal issues facing my clientele as well as enjoy informative lectures and engaging discussions with renowned, high-profile speakers from across the country. Additionally, it is a unique opportunity to network with preeminent attorneys and to meet many judges from across Nevada.” Joel W. Locke stated.

Joel W. Locke joined Allison MacKenzie in 2007. A native Nevadan, Locke graduated from the University of Nevada, Reno in 2000, and then obtained his law degree from Gonzaga University School of Law in 2006. Subsequently, he was admitted to practice law in the State of Nevada in 2006. Joel’s areas of legal practice include: Family Law, Probate Law, Guardianships, Healthcare Law and more.

Records Retention and the Future of Your Business

Understanding the Legality of Digital Data Storage in Nevada

Societal attitudes toward digital information have dramatically changed over the last decade, and continue to change. This change was succinctly demonstrated in an exchange I recently overheard:

Q: “Do you have a hard copy of that document?”
A: “Yeah, I have a PDF.”

How many emails are in your mailbox right now? Not just unread ones, all of them, including the ones in your Sent folder. Multiply that by the number of employees, and you can see that the volume of electronic records your business is accumulating quickly becomes staggering.

Word files, spreadsheets, emails, texts, and instant messages now dominate our work and our communications. Billions of electronic records can be inexpensively stored on a device that fits in your pocket. As the cost of data storage declines, the number of records that are being stored indefinitely continues to soar.

All of these electronic files or records are treated by the courts exactly the same as good old-fashioned paper documents. That means that if your business is sued, it must not only retain those electronic records, but it will very likely have to produce a great number of them to the opposing party. “Electronically stored information,” or ESI, includes all forms of electronic data that is relevant or potentially relevant to the lawsuit. This means word processing files, databases, emails, and even the text messages on your phone.

Does your business have the capability to reliably gather all of those records, review them, and produce them in a lawsuit? Litigation is already expensive, but the sheer volume of these documents has caused the cost of litigation to skyrocket because of the difficulty that is often involved in finding, reviewing and producing such a large number of records.

 

See the complete article at: Northern Nevada Business Weekly.

Kevin Benson is an associate with Allison MacKenzie Law firm with primary focus in the areas of civil litigation, appeals, administrative and regulatory matters, election law, and ballot measures. He is a native Nevadan and former Senior Deputy Attorney General for the state.

Pregnant Workers & the Fairness Act

Are you in compliance with the Pregnant Workers’ Fairness Act?

If you are an employer in Nevada, you probably are well aware that federal law prohibits you from discriminating against employees and/or potential employees on the basis of pregnancy or a pregnancy-related condition. Additionally, you probably already understand that you are required to provide reasonable accommodation to such employees. However, many employers are unfamiliar with the Nevada Pregnant Workers’ Fairness Act of 2017, adopted during the 2017 legislative session, and its impact on interactions between employers and such employees. In this article, we will review the underlying federal law establishing the baseline for interactions with employees who are pregnant, or suffering from pregnancy related conditions, and discuss how the Act, which went into effect on Oct. 1, 2017, differs from prior law.

In 1978, Congress enacted the Pregnancy Discrimination Act of 1978 (PDA) which expanded protections to pregnant workers provided under Title VII of the Civil Rights Act of 1964. The PDA makes it unlawful for an employer to discriminate against an employee on the basis of pregnancy, childbirth or a related condition.

Subsequently, in 1990 Congress enacted the Americans with Disabilities Act (ADA), which requires employers to provide reasonable accommodations to employees suffering from a disability. Congress further expanded protections under the ADA in 2008 by requiring employers to accommodate temporary disabilities. While pregnancy is not classified as a “disability,” if a pregnancy, or related condition, impairs a woman’s ability to complete her essential job functions, under the 2008 amendment an employer is required to provide reasonable accommodation to assist the employee in completing her essential job functions. Under the ADA, an employer, and not the employee, is given the authority to select the accommodation. Accordingly, where an employer offers a reasonable accommodation to an employee, the employee must prove that the accommodation is unreasonable to successfully challenge the employer’s accommodation.

The 2017 Nevada Pregnant Workers’ Fairness Act significantly expands protections for pregnant workers, and workers suffering from pregnancy related conditions in Nevada. Specifically, the Act makes it unlawful for an employer who is covered under the Act to engage in any of the following actions against a female employee who is pregnant, or suffers from a pregnancy related condition:

  • Refuse to provide a reasonable accommodation to the employee.
  • Take an adverse employment action against the employee.
  • Deny the employment opportunity to the employee, if she is qualified for the opportunity.
  • Require the employee to accept an accommodation that she did not request or choose.
  • Require the employee take leave from employment, if a reasonable accommodation is available and would allow the employee to remain at work.

Additionally, employers should be aware that their current compliance with federal law, will not ensure compliance with the Nevada Pregnant Workers’ Fairness Act. Specifically, there are four important distinctions between what is required under federal law and what is required under the Act. These differences are:

  • Federal Law is not gender specific. However, the Act only applies to female employees.
  • Under federal law, the employer determines what accommodation is reasonable and may require the employee to use an accommodation selected by the employer. Further, an employer could require an employee to take leave as an accommodation. Under the Act, an accommodation may not be imposed on an employee without her consent, and an employer may not require an employee to take leave. Therefore, under the Act, generally, the employee, and not the employer, chooses her accommodation.
  • Under federal law, an employee may be required to submit a doctor’s certificate establishing that she indeed has a recognized disability and needs accommodation. However, under the Act, the employer may not require an employee to submit an ADA compliant doctor’s certificate. Instead, an employer may only require the employee to provide an explanatory statement from a physician concerning a recommended accommodation.
  • Finally, under federal law, a “disability” is a defined term, and is limited to physical or mental impairments that substantially limit a major life activity. Accordingly, in order to qualify for accommodation under federal law, an employee must be able to prove that he or she suffers from a condition which “substantially limit[s]” one or more major life activity. Under the Act, there is no such limitation to finding an employee suffers from a condition triggering the right to accommodation. Instead, the Act only requires the employee to assert that she is pregnant, or has “any medically recognized physical or mental condition related to pregnancy, childbirth or recovery from pregnancy or childbirth” in order to obtain accommodation from her employer.

Employers should be cognizant of these changes, and the differences between federal and state law. Further, employers should consider seeking competent legal advice should they have any questions concerning compliance with the Act.

See the article at: Northern Nevada Business Weekly

Jordan Walsh is an associate with Allison MacKenzie Law Firm with primary practice in the areas of Labor and Employment Law. Jordan is admitted to practice in Nevada and California.

Former Senior Deputy Attorney General Joins Allison MacKenzie Law Firm

Kevin Benson, attorney with Allison MacKenzie Law Firm

Allison MacKenzie Law Firm is pleased to announce the hiring of Kevin Benson as an associate attorney effective March 1, 2017. A Carson City native and former State of Nevada Senior Deputy Attorney General, Kevin joins the law firm and will focus his areas of practice on civil litigation, appeals, administrative and regulatory matters, election law, and ballot measures.

Upon graduating from Carson High School, Kevin attended the University of Nevada, Reno, where he obtained a degree in Criminal Justice with a minor in Biology in 2001. In 2004, he obtained his Juris Doctor Degree from Rutgers School of Law in New Jersey. Committed to returning to the area and serving fellow Nevadans, Kevin accepted a position with the State of Nevada Attorney General’s office where he worked for over a decade. There, he rose to the position of Senior Deputy Attorney General.

Read the compete article at: CarsonNow.org

Family Law Series: Modification of Child Custody and Visitation

Family Law Series: Modification of Child Custody and Visitation

Kyle Winter is a Nevada native and attorney at Allison MacKenzie Law Firm in Carson City. This home grown talent focuses his practice in the areas of Family Law, Estate Planning, Guardianships and Probate Law and recently completed his third article, and follow up article to Understanding Child Support Basics, in the Family Law Series: Modification of Child Custody and Visitation.

Please see the complete article below or visit: The Nevada Appeal.

More often than not, divorce and separation leaves parties in a difficult situation having to make decisions immediately, most frequently involving their minor children. Importantly, and until a Court order is entered to the contrary, each parent is considered to be a joint legal and joint physical custodian, meaning each is entitled to be with the children on an equal basis. As discussed in a previous article, the initial custody determination is important, for it sets the standard that serves as the basis for future determinations, including the time when a parent seeks to modify the current custody and visitation arrangement.

Generally speaking, once the custody and visitation of a minor child has been determined by a court of competent jurisdiction, that court retains and exercises continuing and exclusive jurisdiction to modify or vacate its prior order or decree until the child reaches age 18. However, and because a change in custody can be traumatic for a child and tends to undermine the stability and continuity the child has come to enjoy and need, Nevada courts don’t lightly entertain requests for change. Based on this understanding, and always considering the best interest of the child, the standard used by the court to determine whether a change in custody is warranted depends on the type of custodial arrangement that has been previously ordered or agreed upon by the parties.

For instance, if the Court has awarded joint physical custody and a parent later desires to become the primary physical custodian, the court must determine whether such a change is in the child’s best interest. In Nevada, the court considers numerous factors in determining a child’s best interest, including but not limited to, (a) the wishes of the child if the child is of sufficient age, (b) a nomination of a guardian for the child by a parent; (c) which parent is more likely to allow the child to have frequent associations and a continuing relationship with the other parent; (d) the level of conflict between the parents and the ability of the parents to cooperate to meet the needs of the child; (e) the mental and physical health of the parents and the child; (f) the nature of the relationship of the child with each parent; (g) the ability of the child to maintain a relationship with any sibling; and (h) any history of parental abuse or neglect or whether either parent or other party has engaged in an act of domestic violence or committed any act of abduction. If after careful consideration of these factors, the Court determines it would be in the child’s best interest to modify custody from a joint custodial arrangement to a primary physical custodial arrangement, it will do so.

On the other hand, if the court has awarded one parent primary physical custody and provided the other parent reasonable visitation, the standard the court will consider in determining whether modification is appropriate is drastically different. In addition to proving a modification would be in the child’s best interest using the factors explained above, the moving party must also prove there’s been a substantial change in circumstances affecting the welfare of the child. This additional “substantial change in circumstances” prong serves the important purpose of guaranteeing stability for the child and requires the party seeking the modification to prove both prongs. Moreover, the substantial change in circumstances must generally have occurred since the last custody determination, preventing a dissatisfied party from filing immediate, repetitive motions until the desired result is achieved.

 

Attorneys Recognized for Their Pro Bono Service

Joan WrightOLYMPUS DIGITAL CAMERAAllison MacKenzie Attorneys, Joan C. Wright and S. Jordan Dunlap, Recognized for Their Pro Bono Service
January 22, 2016

Carson City, Nevada

For the second year in a row, Volunteer Attorneys for Rural Nevadans (VARN) has recognized Allison MacKenzie, LTD. attorneys for their outstanding volunteer pro bono service.

VARN holds an annual Pro Bono Service Awards reception held in the Supreme Court Rotunda to honor those members of Nevada’s legal community who participate in the organization’s Pro Bono Program by providing exceptional legal services to low-income rural Nevadans.

On January 20, 2016, two Allison MacKenzie, LTD attorneys, Joan C. Wright and S. Jordan Dunlap, were honored for their participation in VARN events, including the organization’s annual legal aid

Attorneys Recognized for Their Pro Bono Service

Kyle A. Winter Joins Allison MacKenzie Law Firm as New Associate Attorney

Local Talent Returns to Carson City to Pursue Legal Career with Allison MacKenzie Law Firm

Kyle Winter

Kyle A. Winter Joins Allison MacKenzie Law Firm as New Associate Attorney

Carson City native, Kyle A. Winter returns home and accepts associate position with Allison MacKenzie Law Firm in Carson City, Nevada effective September 8, 2015. This home grown talent will focus his practice in the areas of family law, estate planning, guardianships and probate law.

After graduating from Carson High School in 2005, Kyle attended the University of Nevada, Reno. In 2009, he graduated with a degree in Criminal Justice and an emphasis in Philosophy. In 2013, he obtained his Doctor of Jurisprudence Degree from Gonzaga University, located in Spokane, Washington. Dedicated to serving the Northern Nevada community, Kyle returned to the area to begin his legal career clerking for the Honorable James E. Wilson, Jr. at Nevada’s First Judicial District Court, in Carson City, and then for the Honorable Jerome M. Polaha at Nevada’s Second Judicial District Court, in Reno.

Kyle was admitted to practice in Nevada in 2013, and is a member of the State Bar of Nevada, and the Carson City and Washoe County Bar Associations.

Aside from his professional endeavors, Kyle is an active supporter of United Blood Services and donates blood whenever possible. He looks forward to exploring and supporting other area volunteer opportunities in the future. Kyle and his wife currently live in Reno with their new born son and two dogs. They enjoy a variety of outdoor activities including fishing and golfing.

“I am happy to be returning to my hometown, and am pleased that I will be able to serve the citizens of this wonderful community. Not only is Allison MacKenzie Law Firm well respected within the State of Nevada but it is also recognized nationally for its outstanding contributions to the legal field and the communities it serves. The attorneys are professional and wonderful to work with. Our staff is supportive and knowledgeable. I look forward to providing our clients with effective, comprehensive representation,” said Kyle about his new association.

Allison MacKenzie Law Firm was recently recognized by Martindale-Hubble as a US Top Ranked Law Firm for 2015. This determination was made after LexisNexis® Martindale-Hubbell® researched over 1.2 million lawyers and firms, in over 160 countries, and identified the top law firms in the United States. Additionally, Allison MacKenzie Law Firm was recognized by US News and World Report as one of the 2015 “Best Law Firms” in the country and was honored with a Metropolitan Tier 1 ranking in the practice area of Energy Law.

The talented legal team of Allison MacKenzie Law Firm is pleased to welcome Kyle to the organization. The firm is confident Kyle will provide exceptional, personalized service to clients as well as assist clients in successfully navigating the often complex litigious landscape of the many practice areas served by the firm. For more information, contact Allison MacKenzie Law Firm at 775.687.0202, or visit AllisonMacKenzie.com.