Recent Legal News

Marketwire reports that as the level of private sector hiring continues rising, new and popular rercruiting tools can cause legal issues that companies should be aware of.  With job openings growing, hiring is increasing.  The article describes how in March 2011 alone we saw private sector employers hire 3.8 million workers.  Marketwire goes on to explain that with this increase comes the growth in risk for employer's facing legal problems.  The legal troubles some companies are facing is the growing use of new selection tools like social networking media.  Some of this new technology can violate terms of the federal government's Fair Credit Reporting Act.  As Dr. David P. Jones, a recruitment expert who is president of human capital advisory firm Growth Ventures, Inc., explains, "More hiring is great news for the labor market, but increased recruiting and hiring means more risk, and a greater chance employers will face legal challenges to the hiring decisions they make."  Jones goes on to state "In fact, some of the very things employers are doing to improve their speed and quality of hiring, and reduce the costs, open the door for legal challenge," says Jones, "And making mistakes brings the cost to defend the organization, judgments if you lose, bad press and even the loss of business... all things a CEO doesn't want," add Jones.  You can read about Jones' recommendations to face these challenges and the entire article below:

11th District: Court Improperly Ordered Plumbing Company to Pay Attorney Fees;  Judgment Reversed

Miller v. Miller

    A legal battle which lasted almost eight years finally took a critical turn in favor of the shareholders and co-owners of Trumbull Industries, a plumbing supply company, when the courts reversed a judgment originally made by the Trumbull County Court of Common Pleas in 2003.  The court had initially ordered Trumbull Industries to pay attorney fees and expenses for their former Director, Sam Miller, as well as the former President of Briggs Plumbing Products, Daniel Umbs, and repeatedly found them in contempt of court for failing to pay the attorney fees.

     The dispute first began as the owners of Trumbull Industries, two sets of cousins, entered into conflict involving an alleged 'business opportunity'.  One of the cousins, Sam Miller, who also functioned as Director of marketing and plumbing products manager for Trumbull Industries, supposedly engaged in an undisclosed alliance with the former President of Briggs, Daniel Umbs, in an alleged strategy to run a business that would 'private brand' plumbing and related products for sale to manufacturers and other wholesalers.  Apparently Sam Miller had been ordered by the other family members to terminate all involvement in this 'business opportunity'. 

     In February of 2003, Briggs filed a lawsuit with the United States District Court against their then company president, Daniel Umbs.  This prompted the other set of cousins, which contained Trumbull Industries shareholders and officers, (the appellants) to file a complaint for injunctive relief and damages against their director Sam Miller and the former president, Daniel Umbs, of Briggs (the appellees).  They proclaimed that they had no knowledge that this underground business mission had continued.  Following these proceedings, Sam Miller and Daniel Umbs jointly moved to be reimbursed for their attorney and expense fees.  The trial court ruled against Trumbull Industries, ordering them to repay the legal fees and expenses. This decision was appealed and litigated over several years, with Trumbull Industries being found at one point to be in contempt of court for failing to reimburse Sam Miller and Daniel Umbs. 

    On November 19, 2010, the court of appeals ruled to reverse and remand the trial courts ruling. The court ruled on the grounds that "the appellee director had not been sued as a result of any 'act or omission' on behalf of the corporation, but as a result of his alleged violation of fiduciary duties under R.C. 1701.59(B), part of The Articles of Incorporation, which states that directors of a corporation have an obligation to the corporation which is in the nature of that of a fiduciary and includes two separate duties: loyalty and care."

    Therefore Daniel Umbs and Sam Miller were not entitled to be reimbursed for their legal fees incurred since the actions that were the subject of the lawsuit were not done in Sam Miller's capacity as Director of Trumbull Industries.