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Akron’s Bowery Project Deal Led by Walter | Haverfield Attorneys


November 30, 2018

A rendering of Akron’s Bowery Project, a $42 million deal led by more than a dozen Walter | Haverfield attorneys. The project is expected to be completed in late 2019 and includes retail, residential and mixed-use space in six redeveloped buildings.

 

A team of more than a dozen Walter | Haverfield attorneys have made a vision for downtown Akron a reality. Acting as lead counsel, the team closed on the $42 million Bowery Project beginning on Nov. 15th, 2018. Construction started the next day. The project includes 40,000 square feet of retail, residential and mixed-use space in six redeveloped buildings.

“Our team is proud to be an integral part of re-vitalizing a historic area of downtown Akron,” said Jack Waldeck, partner and head of Walter | Haverfield’s Real Estate group. “The Bowery Project will be a focal point of the city, and we are honored to help bring a fantastic concept to fruition.”

The Walter | Haverfield team also assisted with completing the $5 million renovation and addition deal for the Akron Civic Theatre, next door to the Bowery Project. The historic landmark will soon boast a small concert venue, an outdoor patio, and a large outdoor electronic screen that will broadcast what’s happening inside outside. New administrative offices and a multi-story box office are also in the plans.

For more than a year, the firm’s real estate attorneys worked on the complex and sophisticated transaction of the Bowery Project, which includes a combination of Historic and New Markets Tax Credits. Nine different financing sources and eight different community and development partners made the deal possible.

“Timing and teamwork were crucial for this deal,” said Waldeck. “It was a balancing act where everything and everyone had to line up just at the right time, and thankfully it did.”

“We are truly grateful for Walter | Haverfield’s Real Estate team,” said Kevin Brokaw, a Cleveland-area developer who is one of the partners behind the Bowery Project.  “There are no words to describe how valuable their counsel is to us. They pitched in to come up with good solutions to very complicated issues while protecting our interests. We wouldn’t be celebrating this milestone today had it not been for their intimate involvement.”

Construction on the Bowery Project and Civic Theatre are expected to be completed by the end of 2019.

Since 1932, Walter | Haverfield attorneys have served as strategic counselors to private businesses, public entities and high net-worth individuals, providing creative and customized solutions that deliver outstanding results at an exceptional value. Our track record has allowed us to sustain year-after-year growth. Walter | Haverfield has doubled its size in the past decade to become one of the top ten Cleveland-based law firms. Today, our team of nearly 80 attorneys is focused primarily in the areas of corporate transactions, real estate, intellectual property, labor and employment, tax and wealth management, liquor control law, litigation, public law and education.

The Value of Design Patents


June 14, 2018

Design patents may provide an avenue to protect important and valuable intellectual property rights. Many products derive significant value from their visual appearance such as product design or ornamental features that can be protected via a design patent.

The United States Patent and Trademark Office (USPTO) defines a protectable design as one that “consists of the visual ornamental characteristics embodied in, or applied to, an article of manufacture.” Thus, a design patent protects only the ornamental appearance of an article, not the article itself or the way it functions. A design that is dictated primarily by the function of the article lacks ornamentality and is not allowed.

In contrast to protection of the ornamental appearance by way of a design patent, a utility patent may be secured to protect the article, how it functions, and/or how it is made. In some cases, both a design and a utility application can be obtained for a given product.

Examples of designs that have received design patent protection include:

• The Coca-Cola bottle (Design Patent No. 48,160)

• Nike sneakers (Design Patent No. 696,853);

• Various features of the iPhone® (Patents which cover the following: a black rectangular front face with rounded corners, a rectangular front face with rounded corners, a grid of 16 colorful icons on a black screen)

 

Since 2012, Apple and Samsung have been embroiled in patent litigation centered on various design patents for smartphones and tablets. On May 24, 2018, a jury awarded Apple $533.3 million for Samsung’s violation of three of Apple’s design patents.

Design patents are typically less expensive and faster to secure than a utility patent. Often, they can be obtained in less than a year. The patent term is limited to 15 years from the date of issuance (compared to 20 years from the filing date for a utility patent), and the protection offered is limited to the appearance of an article. Yet, it’s important to remember that design patents can prevent competitors from creating anything that is considered to be “substantially similar” to the patented design. And such protection is a good way to bolster an existing intellectual property portfolio.

If you need assistance in making an informed business decision about design patents, contact an experienced patent attorney. Walter | Haverfield regularly counsels clients worldwide on patents as well as trademarks, copyrights and trade secrets.

Maria Cedroni is an attorney with Walter | Haverfield and concentrates on intellectual property law. She can be reached at mcedroni@walterhav.com or at 216-619-7846.

Business Owners: Be Aware of Filing Deadlines for the Qualified Business Income Deduction


April 16, 2018

 

There has been a great deal of ‘buzz’ lately over the Qualified Business Income Deduction (QBID). The QBID was recently made available to pass through business owners under the Tax Cuts and Jobs Act that the President signed into law in 2017. Under new Internal Revenue Code Section 199A, pass through business owners are eligible to take up to a 20% deduction against their income from a qualified business. However, there is a risk that if the business is not compliant or late in filing its W-2 wage statements, its owners could lose their entire deduction for the year. While reasonable cause penalty abatement is available for late or incorrectly filed W-2 wage statements, there is no such exception in new Section 199A. This makes it an all or nothing proposition to qualify to take the QBID.

Tax practitioners and business owners have begun reviewing their organizations to determine the most advantageous structure in the context of this new law. Depending on the field of the underlying business and the total income of the business owner, the 20% deduction may be reduced or eliminated entirely. This is where the W-2 wage statements come into play. If a business owner is not engaged in a specified service business(1), and his/her total adjusted income is greater than $415,000 for a married taxpayer or $207,500 for a single taxpayer (the threshold amount), then the 20% deduction is limited to the greater of: (a) 50% of W-2 wages or (b) 25% of W-2 wages plus 2.5% of certain capital assets held by the qualified business. This means that for higher income business owners, if the business has zero W-2 wages and no capital assets, then the QBID will be zero. A high-income business owner will want to structure his/her business to pay sufficient wages and/or hold capital assets that will qualify to take the QBID.

Many practitioners are even recommending that sole proprietors and partnerships with few or no employees convert to be taxed as S corporations in order to pay their owners W-2 wages and thus be eligible to take the QBID. The catch is that the wages paid to the employees of the qualified business must be “properly included in a return filed with the Social Security Administration on or before the 60th day after the due date (including extensions) for such return.”(2) This means that if the business’s W-2 statements are not filed correctly, or are filed more than 60 days late, the owners will not qualify for the QBID for the year the wages were paid, if their income is over the threshold amount.

This trap for the unwary could lead to dire consequences for business owners who are relying on the W-2 limitation to qualify them to take the QBID. Furthermore, this loss of the QBID is in addition to the stiff penalties that may be imposed for non-compliance and late filing of the W-2 wage statements.(3) Practitioners have been seeing more and more employers who have missed these filing deadlines and need assistance in requesting penalty abatements. Although reasonable cause penalty abatement is available for the failure to file and failure to deposit penalties, there is no relief available under Code Section 199A for business owners who mistakenly do not file the wage statements on time and need to qualify for the QBID using the W-2 limitation.

High-income pass through business owners should set up procedures with multiple safeguards to ensure they do not miss the W-2 wage statement filing deadline. And if they do, it’s important that it is corrected within 60 days of the due date. Business owners should set up internal procedures and also coordinate with their tax counsel to make sure they are in full compliance with this requirement for Code Section 199A.

Alexis Kim is an attorney at Walter | Haverfield who focuses her practice on federal, state and local tax planning as well as estate and succession planning. She can be reached at akim@walterhav.com or at 216-619-7859.

 

(1) Any business involving the performance of services in the fields of health, law, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners, or which involves the performance of services that consist of investing and investment management.

(2) USC 199A(b)(4)(C).

(3) Failure to file and failure to deposit penalties are imposed on employers who do not timely file wage statements and/or pay the withheld taxes. See 26 USC 6651 and 6656.

High Court Cases Could Mean Big Changes for Cities, Townships, Villages


April 4, 2018

 

The United States Supreme Court recently heard oral arguments in two cases that may significantly impact local government. One case pits First Amendment free speech rights against the right of a local legislative body to control its meetings. The second case challenges a rule established in 1977 requiring public employees to pay “fair share” union dues where an employee chooses not to join the union. Both arguments involved very active questioning by the justices and could result in changes in the law in late spring or early summer.

Free speech rights of audience members in public meetings

In Lozman v. City of Riviera Beach, the court is considering whether the arrest of a petitioner at a public meeting in Florida constitutes a retaliatory arrest in violation of his First Amendment rights. Fane Lozman stood before the Riviera Beach City Council during the public comment period of the meeting and began talking about public corruption in Palm Beach County. The council chair instructed Lozman not to address that topic, but Lozman continued. (Video can be seen here).

The chair then told Lozman to leave or be arrested, and when he did not leave, the chair ordered him to be arrested. Lozman was handcuffed and charged with disorderly conduct and resisting arrest. The charges were eventually dropped and Lozman filed suit claiming civil rights violations. A jury for the city and the United States Court of Appeals for the Eleventh Circuit upheld the verdict, finding the police had probable cause to arrest Lozman under the Florida statute. The Supreme Court agreed to hear the case, which is Lozman’s second case before the Supreme Court in five years against the city.

The United States Supreme Court will need to decide the line between a citizen’s right to exercise free speech and a government’s ability to maintain order in a public meeting. The question is — was there probable cause to believe Lozman was disturbing or about to disturb a public meeting, or alternatively, were the actions of the chair retaliatory?

Fair share union dues revisited

The United States Supreme Court also heard oral arguments in Janus v. AFSCME, which challenges a 1977 Supreme Court decision in Abood v. Detroit Board of Education. The Abood case upheld the requirement that public employees pay a portion of union dues known as “fair share” when the public employee chooses not to join the union. The court found in Abood that public employees who choose not to join the union still benefit from the negotiations conducted by the union. Mark Janus, a state employee in Illinois, chose not to join the union and has presented the question of fair share to the United States Supreme Court for reevaluation. Two years ago, the Supreme Court considered the issue of fair share in Friedrichs v. California Teachers Association. However, the sudden death of Justice Antonin Scalia a month after the oral argument resulted in a 4-4 decision, leaving the Abood decision in place. President Trump appointee Justice Neil Gorsuch may be the deciding vote. The financial implications of the decision could be significant.

Sara Fagnilli is an attorney at Walter | Haverfield who focuses her practice on public law and litigation. She can be reached at sfagnilli@walterhav.com and at 216-928-2958.

 

Second and Sixth Federal Circuits Expand LGBTQ Workplace Rights


April 3, 2018

 

While there is no federal law expressly prohibiting sexual orientation and gender identity discrimination in employment, two federal appellate courts have recently expanded the rights of gay and transgender employees.

The Second Circuit Court of Appeals, which presides over New York, Connecticut and Vermont, ruled that employees are protected from discrimination on the basis of sexual orientation under Title VII of the Civil Rights Act of 1964. In Zarda v. Altitude Express, a gay skydiving instructor brought the case after he was fired for telling certain clients about his sexual orientation. The Second Circuit interpreted Title VII’s prohibition on sex discrimination to include sexual orientation discrimination because it is “motivated, at least in part, by sex and is thus a subset of sex discrimination.” The Second Circuit joins the Seventh Circuit Court of Appeals, which in 2017 also found that sexual orientation discrimination is prohibited under Title VII in the case of Hively v. Ivy Tech Community College. The Sixth Circuit Court of Appeals, which governs Ohio, Michigan, Kentucky and Tennessee, ruled the opposite way in 2016 in the case of Clemons v. City of Memphis, Tennessee. It found that sexual orientation discrimination is not protected under Title VII.

However, the Sixth Circuit recently ruled that employers may not discriminate against employees based on their transgender or transitioning status, even if the employer has sincere religious objections. In EEOC v. R.G., the Equal Employment Opportunity Commission (EEOC) filed a lawsuit under Title VII alleging that a funeral home unlawfully discriminated on the basis of sex by firing a transgender employee. That happened after she informed her employer that she would begin presenting herself consistent with her gender identity. At the trial court, the employer asserted a defense under the Religious Freedom Restoration Act (RFRA) based on the employee supervisor’s religious belief that gender transition violates “God’s commands.” The Sixth Circuit ruled that the employer failed to show that keeping the transgender employee employed was a substantial burden on religious exercise to qualify for protection under the RFRA. In doing so, the Sixth Circuit necessarily found that Title VII prohibits employers from discriminating against employees on the basis of gender identity.

While there has been no clear guidance from the United States Supreme Court on whether Title VII protects gay or transgender employees, employers should be cognizant of recent court rulings on these subjects. They should also check state and local laws on the subject. While Ohio does not currently have a state statute that prohibits discrimination based on sexual orientation or gender identity, there is legislation pending. House Bill 160, titled “The Ohio Fairness Act,” would protect individuals from employment and housing discrimination on the basis of sexual orientation and gender identity. Additionally, several local governments in Ohio, such as Cleveland, Akron, Columbus, Cincinnati and Toledo have passed legislation prohibiting sexual orientation and gender identity discrimination by employers within those cities.

Rina Russo is an attorney with Walter | Haverfield’s Labor and Employment Services practice group. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

 

State Bill Seeks to Strengthen School Safety by Defining Role of School Resource Officers


March 29, 2018

 

In the wake of national and local school shootings, the Ohio legislature has before it a bill to define and strengthen the use of school resource officers. Introduced in August 2017 by Representatives John Patterson and Sarah LaTourette, House Bill 318 seeks to define the qualifications and responsibilities of a school resource officer (“SRO”), prescribe specific training requirements for them and outline appropriate police powers. The bill looks to fill the void in Ohio law where currently there is no specified training for SROs. That means school districts are left to define the relationship and role which could lead to liability issues.

In its current March 2018 form, HB 318 outlines an SRO’s responsibilities: he/she would provide a safe learning environment, foster positive relationships, develop problem resolution strategies, assist schools in adopting, implementing and amending comprehensive school emergency management plans (including required consultation with local law enforcement and first responders), and provide resources to school staff. However, the bill would still confer school discipline authority to the school district and its administrators. There is also a clear theme throughout the bill, recognizing the developmental needs of students and fostering positive relationships. Additionally, House Bill 318:

  • Requires 40 hours of specific and specialized training offered by the National or Ohio Association for School Resource Officers. The training includes building security, SRO’s role in discipline, psychological and physiological characteristics of students, developmentally appropriate interview, interrogation, de-escalation and behavior management strategies, skills to be a positive role model for youth, classroom management tools for students (including those with special needs), compulsory attendance laws, drug use identification and prevention, and Ohio Peace Officer Training Commission certification.
  • Requires any school district that utilizes SRO services to enter into a Memorandum of Understanding (MOU) with the appropriate law enforcement agency. The MOU should clarify the purpose of the SRO program, define background requirements and expertise for SROs, explain professional development, roles, responsibilities and expectations of the parties, outline a protocol for handling suspected criminal activity in comparison to school discipline, specify requirements for coordination and updating of the school crisis plans, and include student input during the development process. The MOU also needs to be posted in a place that is available to the public.

While this legislation develops, school districts would be wise to clearly define the role of their SROs with local agencies and gain the input of legal counsel. Districts should also proactively seek professional development for SROs to improve their breadth of school knowledge, develop strong positive relationships with students, staff and the community, and implement comprehensive safety and crisis plans.

Lisa Woloszynek is an attorney at Walter | Haverfield who focuses her practice on education law. She can be reached at lwoloszynek@walterhav.com and at 216-619-7835.

 

Walter | Haverfield attorney applies new leadership skills to her love of non-profits


March 9, 2018

 

Alexis Kim, an associate in the Tax and Wealth Management group at Walter | Haverfield, is one of 27 graduates of the OnBoard Cleveland class of 2018. OnBoard Cleveland, a program of the Cleveland Leadership Center, helps early-career professionals make a difference in their community and their workplace.

“OnBoard Cleveland gave me the guidance to make tangible connections to new non-profits,” said Kim, who focuses her work on tax-exempt organizations. “Not only is that a great skill as I grow my practice, but I’m also eager for more opportunities to volunteer.”

Kim currently volunteers for the Cleveland Metropolitan Bar Association and Legal Aid at the West Side Catholic Center in Ohio City, helping local homeless women with legal issues.

OnBoard Cleveland is a six-month program that includes a competitive application process. Participants start off by learning about critical community issues and collaborative leadership skills. They then learn how to utilize their individual strengths to become better connected to philanthropic and professional opportunities.

“Alexis came to Walter | Haverfield with a strong skillset in the legal tax field,” said Gary Zwick, chair of the firm’s Tax and Wealth Management group. “Her participation in this program only makes her that much stronger as an attorney and individual who has a passion for non-profit work. We are extremely proud of her accomplishments.”

Kim is the first Walter | Haverfield attorney to complete OnBoard Cleveland.

Mitigating risk in M and A transactions


January 24, 2018

Sexual Harassment in the News: Employers Take Note


December 4, 2017

 

Following the seemingly endless accusations of sexual harassment in Hollywood, on Capitol Hill, and in corporate America, employers may wonder what they can do to get ahead of the next potential headline in 2018. While it may be impossible to eliminate all conceivable claims of harassment, employers can take some steps to help avoid liability by creating or strengthening anti-harassment programs.

First, employers should consider reviewing and updating current sexual harassment policies. In such policies, employers should clearly define what is considered harassment and indicate that it will not be tolerated. These policies should also provide a clear reporting mechanism for employees to report harassment. Employers should attempt to remove potential roadblocks to reporting, by providing several avenues to report harassment, including confidential reporting through a hotline or other means. Employers may also consider promulgating a description of the steps of an investigation when the employer is presented with a sexual harassment complaint.

Additionally, employers should make sure they have strong anti-retaliation policies for the reporting of sexual harassment claims. Having such a policy on the books will likely provide some employees the courage they need to come forward. Additionally, it is the law – retaliation against an employee for making a harassment complaint is a stand-alone violation of both federal and state civil rights laws. Once the policies are updated, employers should distribute the policies to their employees.

While Ohio maintains no law requiring employers to provide training to its employees on sexual harassment, the Ohio Civil Rights Commission’s administrative regulations [Ohio Adm. Code 4112-5-05(J)(6)] indicate that employers should take all necessary steps to prevent sexual harassment, including “raising the issue of, stating disapproval of, developing sanctions against and informing employees of their rights and how to raise the issue of sexual harassment.” Accordingly, employers should also consider implementing training programs for all employees. Managers and supervisors should be trained on what sexual harassment is, how to identify it, and how to handle specific complaints. They should also be trained to identify retaliation, even absent specific complaints. And with regards to rank and file employees, it’s important that they be trained on the definition of sexual harassment and the process in which to report harassment and retaliation in the organization.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.

Open to the public: The Trump administration’s impact on labor and employment law


November 7, 2017

 

Don’t miss a fast-paced, one-hour seminar given by Walter | Haverfield’s George Asimou titled “A year later…How the Trump administration has changed the LandE landscape.”

Asimou, an attorney in our Labor and Employment group, will speak at the Cleveland Society for Human Resource Management (SHRM) Legal Affairs Conference on December 1, 2017. The conference takes place at Baldwin Wallace University’s Strosacker Union.

Asimou, who represents public and private sector employers on a broad range of issues related to federal and state labor and employment laws, will address the following in his presentation:

    • Formal changes in workplace laws and regulation
    • Subtle shifts in enforcement priorities
    • Broader re-evaluation of the norms of working life in America
    • On-going re-balancing of federal and state regulatory power

 

For more information about the conference and to register, click here.

George can be reached at gasimou@walterhav.com or 216.928.2899

Ohio’s Recycling Revolution: Senate Bill 2 Aims to Prevent Illegal Dumping and Eradicate the Industry’s Sham Recycling


November 3, 2017

 

In an article published in the October 2017 issue of the Cleveland Metropolitan Bar Journal, Leslie Wolfe discussed a new Ohio law which is meant to encourage legitimate construction and demolition debris (C and DD) recycling while prohibiting the operation of illegal dumps.

Gender Identity’s Identity Crisis Under Title VII


October 30, 2017

 

In an about-face move, the Department of Justice issued a memo this month indicating that its interpretation of Title VII of the Civil Rights Act does not protect individuals on the basis of gender identity. Title VII is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin and religion.

Three years ago, the DOJ maintained the exact opposite policy – that the word “sex” in Title VII encompassed claims of discrimination based on an individual’s gender identity, including transgender status.

However, any assumption that you, as an employer, don’t need to hire a transgender applicant or think twice about an adverse employment action against a transgender employee is incorrect. Even though the DOJ has gone on the record indicating that gender identity is not a protected class, the Equal Employment Opportunity Commission (“EEOC”) continues to maintain that gender identity is a protected class under Title VII based on the inclusion of the word “sex” in the statute. The EEOC is a federal agency that investigates charges of discrimination and tries to settle charges with merit. If the charge is not settled, the EEOC has authority to file a lawsuit against the employer or can give the employee the right to sue the employer individually. In fact, the EEOC just filed suit under Title VII against a company in Colorado for rescinding a job offer to an applicant after the company learned of the applicant’s transgender status.

While some states have laws that prohibit discrimination on the basis of gender identity, Ohio currently does not. Given the uncertainty surrounding whether gender identity is protected under Title VII, employers may still want to consider the EEOC’s position. Since Title VII is unlikely to be amended anytime soon to clarify the issue, coverage of gender identity under Title VII will continue to be debated in the courts, with likely conflicting rulings for the foreseeable future.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.