Filippov Law Group, PLLC Unveils a New Website
Houston, TX (December 4, 2017) – Filippov Law Group, LLC, a Houston-based full service business-counsel firm dedicated to delivering easily accessible, cost-efficient, and result-driven legal services for businesses, announced today the launch of the newly redesigned website, www.filippovlaw.com. As part of an extensive branding campaign, the law firm created the redesign with the user experience in mind. The new website design uses the latest technology to better serve businesses as an online guide for business counsel. The website offers educational and informative resources for various business needs, as well as information on the lawyers’ experience and qualifications, services and expertise and a direct method of contact for a consultation.
Victoria Filippov Nemeth, the managing member of Filippov Law Group, noted that the new online outlets would also serve as tools to display the firm’s involvement with the community and approachable personality. “As technology continues to change the way businesses operate, our attorneys aim to suit our client’s busy schedule by being accessible from anywhere in the world. Our team can help clients meet their rapidly changing business needs and utilize attorney resources in new and exciting ways,” said Filippov Nemeth.
Filippov Law Group, PLLC’s Houston-based attorneys handle legal matters on demand and develop custom solutions to ensure that its work adds value to businesses. The law firm’s experienced attorneys work directly with senior management at a fraction of the cost of full-time in house counsel.
Read MoreBest Protection for Trade Secrets and Know How
The most important group of company assets is its intellectual property (“IP”). IP includes trade secrets, patents, trademarks, copyrights, drawings, computer programs, electronic media, research, data, samples, pricing information, business plans, verbal communications and other proprietary business information. IP requires special consideration and attention in all business transactions, beginning with a client and vendor relationships and ending with employee contracts.
Unlike copyright, trademark, and patent protection, there is no government registration for trade secrets and company “know how”. Many companies overlook the need to protect this information. Trade secrets need protection because they are not generally known to the public and comprise exclusive “know how” of economic value, generated by people who wish to protecting it. Businesses must protect their “know how” to achieve a leading edge over their competitors.
Trade secret protection extends to designs, formulas, strategy, technique, practice, instrument, patterns, process or even sometimes a customer list. However, trade secrets must not be original, unique, or novel. Rather, most businesses refer to their trade secrets as “confidential information.”
A trade secret may be as easily lost as it is created. Trade secrets only retain their protected status for as long as their secrecy is preserved. Thus, it is important for business owners to make a reasonable effort to maintain the secrecy of its confidential information.
Best Protection for Trade Secrets
Trade secrets must remain “secret” or confidential in order to remain protected. If the trade secret is inadvertently disclosed, it may lose its status as a trade secret. Companies often realize too late that a lack of written agreements has jeopardized their trade secrets and the availability of legal remedies. The best protection for trade secrets is to have policies and procedures in place prior to disclosing trade secrets to employees, contractors, vendors, clients and business partners. Written and signed agreements are necessary in order for a company to have the full range of protection and legal remedies to prevent disclosure of trade secrets. A business can protect its trade secrets through the use of confidentiality agreements, non-compete and non-disclosure agreements.
Proper Trade Secret Procedures and Protocols
Experienced business attorneys can help you achieve trade secret protection by ensuring that all requirements are met for secrecy of company assets. Attorney at Filippov Law Group, LLC assist many businesses in maintaining secrecy with proper procedures and protocols. Depending on the proprietary information, non-disclosure agreements or company non disclosure policies may be necessary. We can weigh and analyze the different procedures and confidential information to fit the needs of your company. We provide services such as non-disclosure agreements, non-compete agreements, due diligence investigations, trade secret identification, employee counseling upon entrance and at exit, and employee training manuals. Attorney at Filippov Law Group, LLC can analyze company procedures or confidential information policies and agreement forms against the factors courts use to evaluate protection of trade secrets. Whether a trade secret would be best protected by utilizing non-disclosure agreements or litigation, we can advise on what is needed to keep your proprietary information confidential. We can also advise on what protocols and procedures are needed to implement and maintain trade secrets. Some of the additional services we provide are trade secret identification, due diligence investigations, employee/compactor on-boarding and exit counseling, non-disclosure or non-competition agreements, and employee training policies.
Don’t wait until after you lose your trade secret to seek legal advice. Our firm can help you achieve trade secret protection by ensuring all the requirements are met for secrecy.
How does your company protect its trade secrets? Are you putting the effort in to have policies and procedures in place prior to disclosing trade secrets to employees, contractors, vendors, clients and business partners? If not, contact us today for a no-obligation assessment of your overall legal needs and risk management program. Call us at (832) 305-5529 or email us at info@filippovlaw.com to schedule an appointment.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC. is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2017 FILIPPOV LAW GROUP, PLLC
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How to Negotiate a Commercial Lease Agreement
Are you preparing to enter into a business lease? Before signing a commercial lease, consider the following terms commonly found in commercial real estate agreements and take the necessary steps to negotiate the terms of your lease.
Operating Expenses (Common Area Maintenance): It is common for commercial leases to include a provision requiring the tenant to pay for operational and maintenance expenses. However, landlords may also include language specifying that tenant pay for insurance and tax-related expenses for their leased building space – expenses the property owner should handle. By reviewing the history of the building’s operating expenses for the last several years, you will be able to determine a trajectory of future expenses. It is important to negotiate the terms of the operating expenses and limit them to legitimate common area expenses. It is also important for the tenant to retain the right to audit and review property owner’s expenses and calculations. A tenant should attempt to insert a clause setting a maximum threshold for operating expenses and insert a “kick out” clause allowing termination of the lease if the threshold is exceeded.
Damages Provisions: Several provisions and clauses frequently found in the commercial lease deal with potential damage and destruction to the leased property. Landlords usually require indemnification and subrogation clauses to be included to cover themselves from incurring additional expenses. The tenant should negotiate limitations on responsibility for expenses incurred from damages, especially those occurring outside the control of the tenant.
- Force Majeure: It is important for tenants to be aware of the weather patterns in the area where they intend to lease. For example, if the leasing area is prone to flooding, hail storms, high winds, wildfires, falling trees, or power outages then the tenant should ensure that the lease contains a Force Majeure clause that covers these weather conditions. Additionally, a major event out of the tenant’s control can include items unrelated to weather such as labor union strikes.
- Damages: Several clauses can be included within a commercial lease addressing damages. These clauses require careful review and may require adjusting the language to be more favorable to the tenant. Typically, the damages clause will address how the landlord and tenant will handle damage to the property, repair, and if there is a need to terminate the lease early due to the extent of the damage to the leased property. There are two common types of damages resulting from a breaching party and providing resolution:
- Liquidated Damages (LDs): A default clause requiring a breaching party to pay a per diem amount for each day of default. Not a favorable clause for the tenant and one that should be amended or removed entirely from the lease agreement. Amendments should include language setting a cap for total damages that the breaching party is liable to pay.
- Consequential Damages (CDs): Include implied damages, such as reputation and name. It is ideal to add a waiver of CDs to the lease agreement and to include language for loss of profits, loss of business opportunities or goodwill, loss of property and/or equipment, and the expense of unforeseen costs.
Subrogation: A waiver of subrogation provision is one of the most critical, yet misunderstood provisions in a commercial lease. This clause allows the insurance company paying the claim to sue a third party it deems responsible for the damage. In terms of leases, the tenant is the third party. Without a clause of waiver of subrogation from the landlord’s insurer, the tenant may be obligated to pay the landlord’s insurer for the damage to property. Landlord and tenant should negotiate whether the waiver of subrogation will be mutual, or only benefit one party.
Additional Insureds: In some cases, landlords will require the tenant to add them to their Comprehensive General Liability (CGL) insurance policy as an additional insured. In this case, if a claim is made for damage, the tenant’s insurance will be required to pay for the claim. Instead, the tenant should attempt to have the landlord named as a Named Insured under a separate policy outside the CGL.
Indemnity: An indemnity provision is a hold harmless agreement involved in a process to assume risk. It is the transference of risk from a third-party claim to the party best able to bear the risk. The claim will arise from damages incurred from the negligent party—party best able to bear the risk, the tenant in this case because he has direct oversight of the rented property space. Indemnity clauses must adhere to strict terms in Texas. The ultimate negotiation of the indemnity clause will determine the tenant and the landlord are responsible for their own actions.
Repair and Maintenance: Tenant should carefully review this clause to determine if the landlord included language that would require the tenant to maintain an area that is the responsibility of the landlord. Typically, repair and maintenance is limited to the interior of the leased premise. However, the tenant should stipulate the exclusion of HVA, sprinklers, heating, and structural elements repair from the clause. The landlord is responsible for the upkeep and repair of said items.
Provisions Relating to Real Property Tax: It is important to ensure language within this provision stipulates the tenant is responsible only for defined real property tax specified within this provision and that these taxes end at the termination of the lease/tenancy. Additionally, it is vital to exclude state and federal income tax. The lease should specify the tax implications in the event the landlord sells his property; specifically stipulating a maximum threshold the tenant will pay for property taxes resulting from a change in ownership.
Compliance with Laws: It is important to thoroughly review the language within the lease agreement to ascertain who is responsible for maintaining the building/property’s compliance with state and federal laws. The tenant should include language specifying they will only be required to maintain compliance with laws regarding their particular use of the leased space. Furthermore, the tenant should include a cap amount they are required to pay per year to limit their yearly exposure.
Assignment and Subletting: It is imperative that you understand what areas within the agreement require consent from the landlord. Within most lease agreements, the tenant is required to obtain permission to sublet or assign their lease. Prior to signing your lease, negotiate this clause to include language for assignment in terms of business reorganization and for space-sharing. In instances of subletting, a provision should be included regarding “excess” rent obtained from subletting. The tenant should attempt to retain part of the excess rent. Additionally, if the lease contains a recapture clause allowing the landlord to terminate the lease at a request by the tenant to sublet, you need to counter with a stipulation allowing you, as the tenant, to withdraw the request if it triggers termination.
Eminent Domain and Estoppels: Tenants should ensure the lease addresses what will happen if a casualty loss damages the premises or eminent domain threatens the leased premise. Provisions addressing this issue can allow termination rights for the landlord and/or the tenant to navigate eminent domain. Effectively reducing risk and loss for the tenant and addressing whether the tenant will continue to lease the premise. The inclusion of an estoppel clause within the lease binds the tenant to factual statements concerning their actions within the lease. Estoppels provides information concerning tenant lease terms to lenders or potential purchasers of the premise. Tenants can negotiate the types of questions that can be asked within the estoppel clauses and set a response time that is convenient for the tenant.
- Subordination, Nondisturbance and Attornment (SNDA) Provision and Lenders: It is important to include a provision for subordination and nondisturbance if the landlord does not hold the deed of trust to the leased premise. The SDNA provision will protect the tenant in the event the landlord defaults on their loan and the property reverts to the lenders. In this case, the tenants lease will continue as is, with the lender being viewed as the new landlord.
- Termination and Abatement Rights: Tenants should include provisions addressing abatement rights relative to the proportion of the affected area of the premise. The abatement should provide additional remedy to the tenant in the event the landlord fails to resolve the affected premise issue and the issue continues to affect the business of the tenant. Including termination rights within the clause, allow the tenant to vacate the premise and terminate the lease without further obligation to the landlord.
- Cross-Default: Tenants who operate within a chain of businesses, should strike the cross-default clause from any lease agreement at their locations. The cross-default clause places all business within the chain in default if one premise location defaults. This is not fair to the other locations who are paid through. Additionally, the tenant should include language for a cure period to remedy the default locations lease.
Termination: Termination clauses cover a broad range of items. Tenants should be aware of provisions addressing relocating the tenant to a different location, landlord’s rights for expansion into the leased space and/or relocation consequences.
- Alternative Dispute Resolution (ADR): It is now common to include ADR provisions in lease agreements. However, tenants should ensure that the ADR provision is non-binding and allows the tenant to seek further remedy if they are unhappy with the results attained by mediation or arbitration. This provision should require a mediator or arbitrator be in compliance with the American Arbitration Association or the International Institute for Conflict Prevention and Resolution and to ensure full neutrality. The tenant may also wish to specify that ADR to take place in their premise location.
- Holdover Provision: Holdover provisions require attention and amending, prior to signing a lease. Tenants should be aware that such a provision will require them to pay a premium for their property upon the expiration of the lease with neither the tenant nor landlord, insisting on vacating the premise. Tenants should negotiate an amendment specifying the conclusion of the lease agreement, the rent will be month-to-month, at a specified amount. Additionally, such month-to-month rent is subject to the Termination for Convenience clause that either party can initiate without risk. The holdover provision can be included to activate in terms of the termination of the lease, but not for a lease expiring.
- Default: Termination for Convenience The tenant should ensure that a Notice clause is included within the lease providing a remedy to the tenant in the event a default is triggered against the tenant or the landlord invoked the Termination for Convenience clause. Thereby, allowing the tenant time to remedy the default before termination procedures are invoked by the landlord or allow the tenant additional time (depending upon what is negotiated within the Notice Clause) to obtain a new location. Additionally, a Net Book Value Protection clause should be included within the lease to protect the tenant’s financial interests if a Termination for Convenience clause is included within the lease. This will allow the tenant to recoup part of their losses for investments put into the property/property.
Conclusion: Prior to signing a commercial lease, it is important to review each clause within the lease with an experienced attorney to protect your business and financial interests. Failure to carefully review your commercial lease could result in increased insurance premiums, unnecessary expenditures for leased space upkeep, liability exposure to state and federal taxes, and unfavorable one-sided termination clauses.
Is your business about to enter a commercial lease? As a rule, never sign a commercial lease agreement without a lawyer’s review and approval. The attorneys at FILIPPOV LAW GROUP, PLLC have the experience and answers to the questions you face when reviewing a commercial lease agreement. Contact us today for a no-obligation assessment of your overall legal needs. Call us at (832) 305.5529 or email us at info@filippovlaw.com to schedule your appointment.
This post is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2017 FILIPPOV LAW GROUP, PLLC.
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Reducing Cost By Minimizing MSA Indemnity Risks
Master Service Agreements (MSAs) form the core of any Oil & Gas Service provider’s business. Eager to bank on opportunities to work with Oil & Gas majors, Oil & Gas providers frequently overlook major risks by singing multiple MSAs without negotiating their terms.
An MSA is not just a contract; it is a risk management tool. Specifically, the indemnity provisions within the MSA primarily function as the means of risk transfer. Most Most Oil & Gas Companies like to lower their risk by placing it onto the Contractors. A properly drafted, reviewed and negotiated MSA indemnity provisions will help oil and gas providers lower their risks.
To further mitigate risk, Oil & Gas operators use other contractual documents, including MSAs, attachments, insurance agreements, terms and conditions, bills of lading, compliance requirements, safety requirements, work orders, and invoicing procedures. These documents are usually designed within the MSA, to reduce various risks governed therein. Such additional documentation typically contain complicated non-disclosure provisions, lien and liability releases, warranty disclaimers, pollution provisions, precise insurance requirements and complex indemnity language.
Filippov Law attorneys provide Oil and Gas clients with a thorough MSA review and negotiation process. At Filippov Law, we assist clients in creating MSA forms that fit their business needs and help with their MSA negotiations. The opposing party usually does not propose excessive changes or redlines out of a sense of goodwill. At Filippov Law, we have successfully negotiated hundreds of Oil & Gas Company MSAs on behalf of Contractor clients, leading to significant reduction of risk of litigation and insurance premium savings.
At Filippov Law, we examine each of our clients’ MSAs for risk and cost for Contractors; and successfully negotiate indemnity provisions leading to a reduction of risk and insurance premiums.
How does your counsel manage the indemnity risk of your MSAs? Are they putting the effort in to reduce your insurance costs and minimize your balance sheet (self-insured) exposure? If not, contact us today for a no-obligation assessment of your overall legal needs and risk management program. Call us at (832) 305-5529 or email our managing member directly at info@filippovlaw.com to schedule an appointment.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC. is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2017 FILIPPOV LAW GROUP, PLLC
Read MoreBulletproof Independent Contractor Agreements
One of the most common issues facing businesses is how to prepare an ironclad agreement with independent contractors. Many businesses use independent contractors to perform critical operations that enable the business to run and grow.
To protect your company’s future, you must have written agreements in place with each independent contractor you hire. Not only do they provide legal protection, but they also create a sense of professionalism and ensure an efficient and streamlined process to complete the project.
The key terms to be included in the independent contractor agreement include:
- Full Legal Identity of Both Parties,
- Detailed description of the services being provided by the independent contractor
- Clear description of payment terms, including fixed job or project fees, how and when payment is rendered
- Scope of the Project, if applicable, including project timeline with deadlines
- Applicable industry standards
- Responsibilities of the Contractor
- Description of materials, supplies and equipment to be furnished by the contractor
- Declaration that agreement constitutes an independent contractor relationship
- Declaration that an independent contractor is self-employed and is not an employee of the company
- Declaration that the independent contractor has the proper licenses and permits to perform the services in question
- Declaration that the independent contractor is a highly skilled professional who does not require additional training
- Declaration that the independent contractor will perform services in compliance with applicable industry standards, policies and procedures
- Declaration that the independent contractor is responsible for paying its own state and federal income taxes, medicare, social security, and other taxes
- Declaration that the independent contractor will not receive any benefits your business provides its employees
- Declaration that the independent contractor carries the necessary liability and worker’s compensation insurance
- An ownership of intellectual property clause protecting business IP, designating contractor’s services as work for hire, and assigning rights to the contractor’s work product to the business
- Indemnification clause that states the independent contractor assumes liability for any violation of patent, trademark or intellectual property infringement
- Indemnification clause that states the independent contractor assumes liability for any personal injury or property damage
- Description of termination and renewal terms of the agreement
- Dispute resolution clause
- Statement regarding the applicable state law and venue for dispute resolution
Call our office to schedule your comprehensive legal audit, so we can advise you on the proper use of contracts to protect your business through effective risk management.
Should a dispute arise between you and your contractor, a written and signed independent contractor agreement is the most ironclad proof of your relationship. Contract attorneys at Filippov Law Group, PLLC can help you develop a bespoke written independent contractor agreement precisely matched with your business needs, as well as other written agreements and contracts you should have in place with your employees, vendors and client. Call us at (832) 305-5529 or email our managing member directly at info@filippovlaw.com to schedule an appointment.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC. is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2016 FILIPPOV LAW GROUP, PLLC
Read MoreSelecting a Business Structure
Selecting a business structure is an exciting but often challenging undertaking. One of the most important decisions you will make is choosing the type of business you will open. The business structure you choose will have legal and tax implications. Generally, businesses are created and operated in one of the following forms:
- Sole proprietorship: The most common and the simplest form of business is the sole proprietorship. In a sole proprietorship, a single individual engages in a business activity without the necessity of formal organization.
- General partnership: A general partnership is created when two or more persons associate to carry on a business for profit. A partnership generally operates in accordance with a partnership agreement, but there is no requirement for state-filing or that the agreement be in writing.
- Corporation: A corporation is a legal entity with the characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The owners of a corporation are called “shareholders.” The persons who manage the business and affairs of a corporation are called “directors.” However, state corporate law allows shareholders to enter into shareholders’ agreements to eliminate the directors and provide for shareholder management. Choosing the best management structure for your corporation is a decision you make with the advice of an attorney.
- Limited Liability Company: The limited liability company (LLC) is not a partnership or a corporation but rather is a distinct type of entity that has the powers of both a corporation and a partnership. Unlike the partnership, where the key element is the individual, the essence of the limited liability company is the entity, necessitating more formal requirements for its creation.
- Limited Partnership: A Texas limited partnership is a partnership formed by two or more persons and having one or more general partners and one or more limited partners. The limited partnership operates in accordance with a partnership agreement, written or oral, between the partners as to the affairs of the limited partnership and the conduct of its business.
- Limited Liability Partnership: In order to limit the liability of its general partners, a general or limited partnership may opt to register as a limited liability partnership. The Secretary of State provides a form for registration as a limited liability partnership.
All Texas business entities are created by filing a certificate of formation with the Texas Secretary of State. The Secretary of State requires a payment of fees for each filed certificate of formation. The Texas Secretary of State Business Formation Fee Schedule follows below.
For questions about business entity formation process in Texas, contact business law attorney at Filippov Law Group, PLLC by calling (832) 305-5529.
Texas Secretary of State Business Formation Fee Schedule:
Certificate of formation for a Texas entity (except nonprofit corporation, cooperative association, PA or LP) (Forms 201, 203, 205, 206) | $300 |
Certificate of formation for a Texas professional association or limited partnership (Forms 204, 207) | $750 |
Certificate of formation for a Texas nonprofit corporation (Form 202) or cooperative association | $25 |
Registration or renewal as a Texas limited liability partnership or LLLP (Forms 701, 703) | $200 per partner |
Foreign entity application for registration (except nonprofit corporation, LLP, cooperative association or credit union) (Forms 301, 303, 304, 305, 306, 309, 311, 312, 313)* A foreign entity that has transacted business in Texas for more than ninety days without registering is subject to a late filing fee. The late filing fee is equal to the registration fee for each full or partial calendar year that the foreign entity transacted business in Texas without being registered. | $750* |
Foreign nonprofit corporation, cooperative association, or credit union application for registration (Forms 302, 309)* A foreign entity that has transacted business in Texas for more than ninety days without registering is subject to a late filing fee. The late filing fee is equal to the registration fee for each full or partial calendar year that the foreign entity transacted business in Texas without being registered. | $25* |
Foreign limited liability partnership application for registration or renewal (Forms 307, 308)* A foreign entity that has transacted business in Texas for more than ninety days without registering is subject to a late filing fee. The late filing fee is equal to the registration fee for each full or partial calendar year that the foreign entity transacted business in Texas without being registered. | $200 per partner in Texas, but not less than $200 nor more than $750* |
The decision regarding business structure should be made after a consultation with an attorney and a tax adviser because it involves the consideration of issues regarding tax, liability, management, continuity, transferability of ownership interests, and formality of operation. The Business Attorneys at Filippov Law Group, PPLC will help you learn about the different types of business structures and find the one best suited for your business. Call us at (832) 305-5529 or email our managing member directly at info@filippovlaw.com to schedule an appointment.
Read MoreTexas Mineral Liens
This article provides basic information about Texas lien law governing the services and materials provided in connection with mineral activities. Like construction liens, mineral liens are frequently referred to as Mechanics & Materialman’s (or M&M) liens. However, Texas mineral liens have different filing, notice and perfection procedures than real estate construction M&M liens. Chapter 56 of the Texas Property Code provides the statutory framework governing mineral liens. Real estate construction M&M liens are governed by Chapter 53 of the Texas Property Code and are beyond the scope of this post.
Special Rights Enjoyed under Mineral Liens
Many types of property are potentially subject to a mineral lien, ranging from the well itself to machinery to pipeline easements to other wells on same property as the well under dispute. Generally, a mineral lien does not take precedence over earlier existing encumbrances on the land; however, a lien on material, machinery, or supplies does take priority over earlier encumbrances on the land where the machinery, material, or supplies is located.
The mineral lien date of preference relates back to the first date the work was performed. This priority date can be very important to oilfield service companies because it pushes them ahead of many other conventional creditors who achieve their priority on “the first in time, first in line” basis. For example, if a company begins to provide services to an oil and gas operator, who later files a deed of trust with a bank, the service company’s invoices would take priority over the bank on the date when work was first performed. Mineral liens can also be filed post-bankruptcy petition without being considered a violation of automatic stay.
Perhaps the biggest benefit of a mineral lien is that it subjects all the wells on the leasehold to the lien, not just the well for which work was performed or machinery was supplied.
All this is very beneficial to service companies, but mineral liens are regulated by very stringent procedural requirements and deadlines. Failure to abide by the requirements and deadlines could result in dismissal of an invalid mineral lien and liability for attorney’s fees.
Procedural Steps for Perfecting a Texas Mineral Lien
Identify the Well. This step should be addressed in the contract or purchase order for provision of services. The service provider should identify the well by referencing its API (American Petroleum Institute) number, which is assigned to each well drilled for oil and gas in the United States. The API number should be recorded before shipping any materials or providing services to the operator.
Identify the lease, the land, and the owners. An attorney must examine the chain of title, identify the working interest owner or owners, and identify the lease and its legal description. A landman is generally used to locate the documents necessary for this examination. The attorney’s work will be used to fill in the appropriate information for the mineral lien affidavit (see File a Lien Affidavit).
Send Notice of the Lien. When an oil and gas services invoice is more than 45 days overdue, it’s good practice to provide notice of intention to file a lien. The notice must be filed no later than the 10 days before the end of six months after the day the indebtedness accrues (the day the lien affidavit is filed). Section 56.005 of the Texas Property Code defines when indebtedness under the mineral lien accrues. If the work is performed by the day or week, then it accrues at the end of the week; otherwise “the indebtedness for material or services accrues on the date the material or services were last furnished.” If all material or services are furnished for the same land, leasehold interest, oil or gas pipeline, or oil or gas pipeline right-of-way, they are considered to be furnished under a single contract, unless more than six months elapse between the dates the material or services are furnished.
A mineral subcontractor must include in a notice to the property owner the amount of the lien, the name of the person indebted to the subcontractor, and a description of the land, leasehold interest, pipeline, or pipeline right-of-way involved. It is advisable to consult an attorney before filing a notice of lien.
File a Lien Affidavit. Under Property Code section 56.021, a lien affidavit must be filed within six months after labor or materials were last furnished. Do not wait until the last few days of that six-month period to file the affidavit because gathering information and filing the affidavit take time. To make matters more complicated, it is possible a county clerk will not record the lien affidavit on the date it is received.
A lien claimant’s affidavit must include the following:
(1) the name of the mineral property owner involved, if known;
(2) the name and mailing address of the claimant;
(3) the dates of performance or furnishing materials/services;
(4) a description of the land, leasehold interest, pipeline, or pipeline right-of-way involved; and
(5) an itemized list of amounts claimed.
Additionally, a mineral subcontractor’s affidavit must include:
(1) the name of the person for whom labor was performed or material was furnished or hauled; and
(2) a statement that the subcontractor timely served written notice that the lien is claimed on the property owner or the owner’s agent, representative, or receiver.
In order to properly and timely file a lien affidavit, seek competent legal advice from a lawyer knowledgeable in Texas mineral lien law.
Send Notice of the Lien Affidavit. Although notice of mineral subcontractor’s lien is required, notice of a lien affidavit is not required. In practice, however, notice of the lien affidavit to the leasehold owner or owners may result in settling the lien before a lawsuit is filed.
File Suit. A suit to enforce the lien must be brought within two years after the last day to file the lien affidavit or within one year after completion (or termination) of the work, whichever is later.
Property Sold or Removed by Mineral Property Owner
If for some reason the mineral property owners or someone working for the owner sells or moves property to which a lien is attached, the lienholder still has a right to possession of the property no matter where it is found. The lienholder may also have the sell the property that was removed or sold to satisfy the lien.
Caveat for Mineral Subcontractors
Once a mineral property owner is served with notice of a mineral subcontractor’s mineral lien, the owner may withhold payment to the general contractor of the amount stated in the lien. Withholding of payment to the contractor because of the subcontractor’s lien may create some difficulties in the relationship between the contractor and the subcontractor, especially if it is an ongoing relationship. It is good practice for the subcontractor to alert the general contractor that a lien is being filed and that the mineral owner may withhold payment.
Before proceeding with filing a lien affidavit, the attorneys at FILIPPOV LAW GROUP, PLLC can offer you competent and knowledgeable advice concerning Texas Mineral Lien Laws. Our experienced attorneys possess a comprehensive understanding of Chapter 56 mineral liens and Chapter 53 M&M liens of the Texas Property Code. Additionally, our attorneys are experienced in filing mineral liens and enforcing collections. If you are looking into filing a lien affidavit or want to consider your legal options, call us at (832) 305-5529 or email our managing member info@filippovlaw.com.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC. is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2015 FILIPPOV LAW GROUP, PLLC
© Copyright 2016 FILIPPOV LAW GROUP, PLLC
Read MoreThe H-1B Visa Requirements
REQUIREMENTS OF THE H-1B VISA IN THE UNITED STATES:
The H-1B is a non-immigrant visa in the United States which allows U.S. employers to temporarily employ foreign workers in specialty occupations for professional-level jobs.
Below are some key requirements you must fulfill to apply for an H-1B Visa. For each requirement, you must include some forms of evidence in support of your petition.
Requirement 1 – You must have an employer-employee relationship with the petitioning U.S. employer.
A valid employer-employee relationship is determined by whether the U.S. employer may hire, pay, fire, supervise or otherwise control the work of the H-1B worker. Usually the company owner or petitioning organization can establish a valid employer-employee relationship, if the facts show that the petitioning entity has the right to control the beneficiary’s employment.
Requirement 2 – Your job must qualify as a specialty occupation by meeting one of the following criteria:
A bachelor’s degree or higher degree or its equivalent is normally the minimum requirement for the particular position;
The degree requirement is common for this position in the industry, or the job is so complex or unique that it can only be performed by someone with at least a bachelor’s degree in a field related to the position;
The employer normally requires a degree or its equivalent for the position; or
The nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree.
Requirement 3 – Your job must be in a specialty occupation related to your field of study.
The regulations define a “specialty occupation” as requiring theoretical and practical application of a body of highly specialized knowledge in a field of human endeavor[1] including but not limited to biotechnology, chemistry, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, law, accounting, business specialties, theology, and the arts, and requiring the attainment of a bachelor’s degree or its equivalent as a minimum (with the exception of fashion models, who must be “of distinguished merit and ability”).
Requirement 4 – You must be paid at least the actual or prevailing wage for your occupation, whichever is higher.
The prevailing wage is determined based on the position in which you will be employed and the geographic location where you will be working (among other factors). The U.S. Department of Labor (DOL) maintains a database with applicable current prevailing wage levels based on occupation and work location.
Requirement 5 – An H-1B visa number must be available at the time of filing the petition, unless the petition is exempt from numerical limits.
The H-1B visa has an annual numerical limit, or cap, of 65,000 visas each fiscal year. The first 20,000 petitions filed on behalf of beneficiaries with a U.S. master’s degree or higher are exempt from the cap. Additionally, H-1B workers who are petitioned for or employed at an institution of higher education (or its affiliated or related nonprofit entities), a nonprofit research organization, or a government research organization are not subject to this numerical cap. Cap numbers are often used up very quickly, so it is important to plan in advance if you will be filing for an H-1B visa that is subject to the annual H-1B numerical cap. The U.S. government’s fiscal year starts on Oct. 1. H-1B petitions can be filed up to 6 months before the start date, which is generally April 1 for an October 1 start date.
Congressional yearly numerical cap and exemptions.
To determine whether H-1B Petition is subject to the regular congressionally mandated cap of 65,000 the United States Citizenship and Immigration Services (USCIS) uses the information provided in Sections 2 and 3 (or Part C) of the H-1B Data Collection and Filing Fee Exemption Supplement. USCIS has already reached the congressionally mandated H-1B cap for fiscal year (FY) 2016. They also have received more than the limit of 20,000 H-1B petitions filed under the U.S. advanced degree exemption. USCIS will continue to accept and process petitions that are otherwise exempt from the cap. Petitions filed on behalf of current H-1B workers who have been counted previously against the cap, and who still retain their cap number, will also not be counted toward the congressionally mandated FY 2016 H-1B cap.
Free Trade Agreements carve out 1,400 H-1B1 visas for Chilean nationals and 5,400 H-1B1 visas for Singapore nationals. However, if these reserved visas are not used, then they are made available in the next fiscal year to applicants from other countries.
USCIS starts accepting applications on the first business day of April for visas that count against the fiscal year starting in October. USCIS will begin accepting H-1B petitions that are subject to the FY 2017 cap on April 1, 2016. You may file an H-1B petition no more than six months before the employment start date requested for the beneficiary.
Duration of stay.
The duration of stay on an H-1B visa is three years, extendable to six years. An exception to maximum length of stay applies in certain circumstances
If a visa holder has submitted an I-140 immigrant petition or a labor certification prior to their fifth year anniversary of having the H-1B visa, he is entitled to renew their H-1B visa in one-year or three-year increments until a decision has been rendered on their application for permanent residence.
If the visa holder has an approved I-140 immigrant petition, but is unable to initiate the final step of the green card process due to their priority date not being current, he may be entitled to a three-year extension of their H-1B visa.
The maximum duration of the H-1B visa is ten years for exceptional United States Department of Defense project related work.
H-1B holders who want to continue to work in the U.S. after six years, but who have not obtained permanent residency status, must remain outside of the U.S. for one year before reapplying for another H-1B visa. Despite a limit on length of stay, no requirement exists that the individual remain for any period in the job the visa was originally issued for. This is known as H-1B portability or transfer, provided the new employer sponsors another H-1B visa, which may or may not be subjected to the quota. Under current law, H-1B visa has no stipulated grace period in the event the employer-employee relationship ceases to exist.
Application process.
The process of getting an H-1B visa has three stages:
1) The employer files with the United States Department of Labor a Labor Condition Application (LCA) for the employee, making relevant attestations, including attestations about wages (showing that the wage is at least equal to the prevailing wage and wages paid to others in the company in similar positions) and working conditions. Employer must submit evidence of the beneficiary’s education credentials at the time of filing.
2) With an approved LCA, the employer files a Form I-129 (Petition for a Nonimmigrant Worker) requesting H-1B classification for the worker. This must be accompanied by necessary supporting documents and fees.
3) Once the Form I-129 is approved, the worker may begin working with the H-1B classification on or after the indicated start date of the job, if already physically present in the United States in valid status at the time. If the employee is outside the United States, he/she may use the approved Form I-129 and supporting documents to apply for the H-1B visa. With a H-1B visa, the worker may present himself or herself at a United States port of entry seeking admission to the United States, and get an Form I-94 to enter the United States. Employees who started a job on H-1B status without a H-1B visa because they were already in the United States still need to get a H-1B visa if they ever leave and wish to reenter the United States while on H-1B status.
Dependents of H-1B visa.
H-1B visa holders can bring immediate family members (spouse and children under 21) to the U.S. under the H4 Visa category as dependents. An H4 Visa holder may remain in the U.S. as long as the H-1B visa holder retains legal status. An H4 visa holder is not eligible to work or get a Social Security number (SSN).[9] However, a DHS ruling made on Feb 24, 2015 provides certain H4 visa holders with eligibility to work, starting May 26, 2015. An H4 Visa holder may attend school, get a driver’s license, and open a bank account in the U.S. To claim a dependent on a tax return or file a joint tax return, the dependent must obtain an Individual Tax Identification Number (ITIN), which is only used for tax filing purposes.
The experienced attorneys at FILIPPOV LAW GROUP, PLLC can alleviate your process of obtaining an H-1B Visa. Our attorneys offer knowledgeable advice and provide excellent immigration services when dealing with Immigration and Naturalization Service. If you are looking into obtaining an H-1B Visa or have questions regarding obtaining an H-1B Visa, call us at (832) 305-5529 or email our managing member info@filippovlaw.com.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances.
© Copyright 2016 FILIPPOV LAW GROUP, PLLC
Read MoreThe Importance of an Independent Contractor’s Agreement
The use of independent contractors, typically a sole proprietor or small business, has significantly increased in recent years. Independent contractors allow companies to outsource work without the risk of investing the time and resources they would for an employee. Use of independent contractors continues to rise as businesses respond to health insurance mandates, a changing economy, and growing compensation demands. Independent contractors do not require overhead costs, overtime pay, workers’ compensation insurance, vacation pay, unemployment insurance, or payroll taxes.
The prospects for independent contractors for 2016 are expected to increase and double by 2020. Given the expected growth rate for 2016 and beyond for independent contractors, it is important for companies to prepare appropriate Independent Contractor’s Agreements. Furthermore, it is still vital to avoid erroneously classifying employees as independent contractors or to evade payroll taxes and other employment-related expenses.
Misclassification challenges can result in significant liabilities and penalties under state and federal laws. Specific examples include state and federal income tax payments, Social Security, Federal Insurance Contributions (FICA) taxes, Medicare and Federal Unemployment Tax Act (FUTA) taxes. Penalties include failure to withhold and pay taxes, liability for violating the Fair Labor Standards Act (FLSA), failure to pay minimum wages, failure to pay overtime, liability for employee benefits, vacation, sick pay, stock options, pension plan contributions, and vesting.
For example, Uber, the company who digitalized on-demand transportation, is currently facing a class action lawsuit that stemmed from one (1) misclassification challenge. US District Judge Edward Chen sided with an earlier decision that ruled against Uber and opened the case to class-action status. Now, Uber faces a jury trial to resolve this class-action lawsuit in California regarding misclassifying their drivers as independent contractors.
Because of these stringent regulations, companies that utilize independent contractors need to protect themselves from inadvertently misclassifying these entities and facing a class-action lawsuit similar to Uber. Creating and implementing an Independent Contractor’s Agreement is imperative.
Independent Contractor’s Agreement
It is imperative to implement a written contract between the Company and the independent contractor. The contract should clearly state the nature of the independent relationship between the parties and expectations for completion of the project. Also, having a written contract allows for customization for each Independent Contractor the Company retains. Customizable contracts protect the Company by:
• Defining the parameters and expectations for all parties involved.
• Defining the nature of the business relationship—clearly stating that the independent contractor is not an employee.
• Form agreements hold little credence in a misclassification lawsuit.
• Customization provides opportunities for the addition of specific provisions. For example, the inclusion of a provision that requires refraining from unfair competition.
The Contracts Limits
All contracts have limits; an Independent Contractor’s Agreement is no different. In the event of a dispute, the contract can withstand the scrutiny of a court if executed as written. The court scrutinizes the implied relationship per the contract and the reality of the relationship based upon the facts each party provides. However, if the duties of an Independent Contractor resemble that of the Company’s employee, the court may consider the contract to be invalid.
Certain industries imply the presumption that they only hire employees, posing a problematic assumption for the Company to overcome. If the Company has links to one of these industries, consider the options and have a well-written contract drawn up before hiring the Independent Contractor.
Legal Considerations
Write Independent Contractor’s Agreements with the intention that the Internal Revenue Service (IRS) or an associated agency may be reviewing the contract for classification purposes. Writing an Independent Contractor’s Agreement with this view in mind, provides an asset in the event of a dispute or misclassification challenge. In the case of a misclassification challenge, the IRS looks at multiple factors grouped into three (3) distinct categories:
Control
• The level of behavioral control that was exerted over the independent contractor by the Company.
• Whether the Company had the right to control and direct job performance of the independent contractor.
Financial control
• The reimbursement or payment of business expenses by the Company.
• The Company’s role in the Independent Contractor’s decision of seeking out additional employment opportunities.
• The Company’s payment method to the Independent Contractor—lump sum, weekly, bi-weekly, or at project milestones.
Relationship
• Definition of the relationship between the Company and the Independent Contractor within the written contract.
• If a defined end was projected or permanency was implied in the contract.
• Expected work and work performed resulting from the relationship.
• The role the Company played in the methods and schedule of the Independent Contractor completing the project.
• If the work performed by the Independent Contractor is a crucial aspect of the Company’s business.
If the Department of Labor (DOL) brings the misclassification challenge, the “economic realities” test is utilized to determine the status of the independent contractor. The “economic realities” test looks at the definition of employ, which includes “to suffer or permit to work.” The test determines whether the Independent Contractor is economically dependent upon the Company or purposely in business. However, if the Equal Employment Opportunity Commission (EEOC) brings the misclassification challenge, the Independent Contractor is considered an employee and a discrimination challenge asserted. As a result, the Company faces scrutiny in the manner and method of how the Independent Contractor conducted his duties. Did the Company exercise too much control?
In summary, writing an Independent Contractor’s Agreement to meet the standards of a particular test or means of measure is ill advised. An Independent Contractor’s Agreement should reflect a business relationship, where each party is on equal footing. Most importantly, companies need to consider the element of control. The higher the degree of control exerted by the Company over an Independent Contractor results in a decreased chance to defend successfully against a misclassification challenge. The IRS considers the amount of control the Company exerts over Independent Contractor’s to be a critical element in their decision process.
As a rule, never prepare a contractor’s agreement without a lawyer’s review and approval. The FILIPPOV LAW GROUP, PLLC provides sophisticated legal services and business advice to individuals and businesses of all sizes, ranging from start-ups to Fortune 500 companies. Our attorneys are experienced in negotiating, drafting and reviewing independent contractor and vendor agreements with an eye towards the client’s best interest. If you need an independent contractor or vendor agreement or want to consider your legal options, call us at (832) 305-5529 or email our managing member info@filippovlaw.com.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon the information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC. is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances. © Copyright 2015 FILIPPOV LAW GROUP, PLLC
Read MoreElecting Termination as a Business Owner
This post continues a previous discussion concerning layoffs. Many companies tend to layoff an employee when in fact, they should be electing termination. Confusing the two can lead to costly litigation and tarnish the image and reputation of the company to competitors and employees alike. Reaching the decision to terminate an employee can be difficult, but with careful planning, this decision can result in a smooth transition. Here are important items to keep in mind throughout the entire termination process.
Poor Performance
Termination is directly related to an employee’s work performance; a layoff is a method companies utilize to save bottom line expenses and permanently remove positions. If an employee is not achieving the desired requirements of the job, performance evaluations should be brought to the employee’s attention and options discussed to address the lack of performance. Providing the employee an opportunity to address their job performance, allows them to prove their worth to the company or provide proof that the company made the correct decision to consider termination.
Action Plan
To terminate an employee properly, create a written action plan that targets the specific problem areas and provides an opportunity for the employee to address the area. This will lessen the company’s liability and preserve the image of producing exemplary employees. Review employee performance evaluations, attendance sheets, disciplinary action reports, upward assessments, and peer reviews to assist in creating an action plan.
Company Image
Improperly laying-off an employee misconstrues the former employee to future employers. The candidate is not viewed as terminated, which would raise questions and concerns, but as a capable candidate with quality performance, which is clearly not the case. The consequence is how other companies view the competency of the company and the quality of the company’s work product.
Providing Severance Packages
Texas is an “at will” state, but should the company provide written contract terms that specify the employee receive a severance package, the employee is entitled to receive the severance package regardless of poor performance. Severance packages can be offered in exchange for an agreement not to sue the company or in return for the services rendered by the employee. The Fair Labor Standards Act (FLSA) has no requirements specifying company’s offer severance packages to terminated employees.
Extended Insurance Coverage
For a limited period after termination, the employee has the right to continue receiving health insurance coverage from the company. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, allows terminated employees to receive a temporary extension of healthcare coverage for their families and themselves from their employer.
Issuing the Final Paycheck
The Texas Payday Law stipulates that terminated employees receive their final paycheck within six (6) calendar days of termination or discharge. It is important to be aware of this particular law if the company distributes paychecks on a bi-weekly basis. In the event that an employee is terminated between the payday cycle than special provisions should be made to ensure the terminated employee is paid within the six (6) day period.
Wrongful Termination
Avoid wrongful termination by consulting the company attorney to ensure that the employee’s Equal Employment Opportunity (EEO) and Age Discrimination in Employment Act (ADEA) rights are not in violation. These include discrimination of race, ethnicity, religion, age, color, disability, and/or veteran status and the termination of an employee over the age of 40 solely due to their age. Keep in mind the laws created to protect specific types of employees as well. These include:
- The Employee Retirement Income Security Act (ERISA) sets minimum standards in regards to pension plans
- Family and Medical Leave Act (FMLA) protects employees jobs during specified medical and family leave and allows for continued health coverage
- The National Labor Relations Act (NLRA) allows employees to participate in unions, collective bargaining, and voice concerns for the welfare of workers
- The Occupational Safety and Health Administration (OSHA) sets industry standards regarding safe work environments
- The Older Workers Benefit Protection Act (OWBPA) safeguards older employees work benefits from age discrimination
- The Sarbanes-Oxley Act (SOX) protects whistleblowers
- The Uniformed Services Employment and reemployment Rights Act (USERRA) protects members of the uniformed services from discrimination
- The Workers Adjustment and Retraining Notification Act (WARN) protects employees and their families by requiring employers to provide notice of a layoff decision
In conclusion, the business justification for terminating an employee should be well documented. Providing evidence of the measures the company took to retain the employee by offering opportunities to address the areas of low performance will serve to show the commitment the company has to its employees. However, when preventative measures fail, the ability to terminate an employee having followed written action plans to address the issues up to that point, provides the company a legal cushion knowing they did what the law required.
FILIPPOV LAW GROUP, PLLC provides sophisticated legal services and business advice to individuals and businesses of all sizes, ranging from start-ups to Fortune 500 companies. Our attorneys are experienced in negotiating, drafting and reviewing employment contracts and other commercial agreements with an eye towards the client’s best interest. If you need to consider your legal options, call us at (832) 305-5529 or email our managing member victoria@filippovlaw.com. For questions concerning your businesses employee layoffs, contact a business attorney at Filippov Law Group, PLLC by calling (832) 305-5529.
This blog is intended as an information source for existing and future clients of FILIPPOV LAW GROUP, PLLC and should not be construed as legal advice. Readers should not act upon information contained in this blog without professional counsel. The materials presented in our blog, “tweets” and legal articles may not reflect the most current legal developments, verdicts, or settlements. These materials may be changed, improved, or updated without notice. FILIPPOV LAW GROUP, PLLC is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances.
© Copyright 2015 FILIPPOV LAW GROUP, PLLC
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