Tag: contracts

Computing, Content Development, Copyright, Creative Content, Entertainment, Internet, Strategy

Ping® by Adlerlaw October 2025 – Navigating AI in Creative Contracts

Third-party generative artificial intelligence systems (AI) are rapidly transforming creative work, introducing new opportunities and real legal and business risks. Many contracts do not yet cover how AI tools are used, who owns resulting intellectual property, or what happens if errors or unlicensed materials are incorporated into your final product. Creative professionals should strongly consider reviewing their contracts and adding provisions for AI use to tackle evolving risks and responsibilities for your industry. This article looks at contractual issues affected by use of AI tools and suggests specific terms to consider. While not exhaustive, the topics in this article target major areas for attention.

Copyright & Intellectual Property (IP) Rights

AI-generated work can pose challenges for copyright protection, licensing, and third-party rights. Many platforms and tools have uncertain or shifting approaches to ownership and proper licensing.

Read more here.

Business, Compliance, Contracts, Entrepreneurs, New York

Ping® By AdlerLaw – NYC Written Contracts & Freelance Workers

Ping® by Adlerlaw Reminder: NYC Requires Written Contracts For Freelance Workers

New York City’s Freelance Isn’t Free Act defines freelance workers as any individual hired or retained as an independent contractor by a hiring party to provide services for compensation. Commonly referred to as gigs, tasks, projects, side or contingent work, working on contract or spec, freelancing, contracting, subcontracting, consulting, moonlighting, entrepreneurship, alternative arrangements, self-employment, etc., you can contact DCWP if you have questions about classification as a freelance worker, independent contractor, or employee.

If you employ independent contractors in New York City (NYC), you may need to have written contracts with your workers. Since May 15, 2017, NYC’s Freelance Isn’t Free Act (the “Act” or “FIFA”) established and enhanced protections for freelance workers, a/k/a “independent contractors.” The Act provides the right to a written contract between the hiring party and the contractor, the right to be paid timely and in full, and the right to be free of retaliation. The key terms that must be included in the written contract are (1) the work to be performed, (2) the pay for the work, and (3) the date payment will be made. The contractor and the hiring party must keep a copy of the written contract.

To read the full Article, go to adler-law.com or click here.

Business, Contracts, Design

Ping® By Adlerlaw – Illinois Evidence Rules on Admissibility of Cell Phone Video

This month’s issue of Ping® highlights Illinois rules regarding use of iPhone-recorded video in a criminal trial. In case you missed it, my article, “Six Things You Can Do to Improve Your Contracts,” from ASID Impact Illinois Magazine, Issue Two, 2022, is discussed below.

Six Things You Can Do to Improve Your Contracts.

In case you missed it, my article “Six Things You Can Do to Improve Your Contracts” appeared in ASID Impact Illinois Magazine, Issue Two 2022, pages 22-24.

Here’s a quick summary.

If you have questions about your business, or about contracts, or if you need assistance navigating the process, please feel to contact me for more information. (866)734-2568 and David [at] adler-law.com

Illinois Rules About iPhone-Recorded Video in a Criminal Trial.

Cell Phone Video. We all have it. We all use it. But what if we need to rely on it in a Court of law to prove – or disprove – a version of the story that’s being told.

We all know how easy it is to fake video and there’s a whole category that’s so credible is hard to prove it’s fake. A free press should tell the truth. But as Pontius Pilate asked, “What is truth?” Who decides what is true? And who should compel the press to “tell the truth”? 

In his article, “Illinois Supreme Court Rules on Admissibility of Cell Phone Videos,” Criminal Law FLASHPOINTS, January 2023, author Matthew R. Leisten of the Ogle County State’s Attorney’s Office, discusses People v. Smith, 2022 IL 127946, an Illinois Supreme Court case upholding the state’s use of iPhone-recorded partial video clips from a building’s surveillance cameras in a burglary trial. Read more here.

Business, Contracts, interior design

Ping® by AdlerLaw – Structuring Interior Design Purchasing Fees

I originally intended to call this article Challenges For Structuring Interior Design Purchasing Fees and Mark-ups, but felt that might be too alarmist.

Nevertheless, Interior Designers often find it challenging to craft the best structure and find the right way to charge clients for interior design services, as well as related services like purchasing and project management. Whether you plan to start up an interior design business or you are already a seasoned interior designer, having clear terms on charges for art, furniture, finishings, fixtures, and other decorative items (sometimes generally referred to as “FF&E” for convenience), will avoid problems in the future. I find a lot of designers tend to skew toward vague and general terms about how marks-ups are calculated and charged.

Another wrinkle arises if the Designer obtains items exclusively through trade-only sources, since there is no “retail” equivalent. The Designer has developed relationships with vendors and service providers enabling Designer to receive pricing and availability not accessible to the public at large. 

Interior Design contracts cases rarely make headlines. That’s why a recent case in Virginia is worth noting.  In the U.S. District Court for the Eastern Dist. of Virginia case of Tanya M. Johnson v. Robert Shields Interiors, Inc., the contract for interior design and decorating services, including purchasing furniture, authorized a ten percent (10%) markup on shipping and related services but did not provide for any other markups, commissions, or fees. Johnson v. Robert Shields Interiors, Inc., Civ. No. 1:15cv820, 20 (E.D. Va. May. 11, 2016)

At trial, plaintiff proved that the designer never provided any receipts, vendor invoices, or purchase orders, to show commissions or rebates received from the vendors, and the designer further refused to provide proof of the furniture charges and shipping costs when asked. Discovery revealed that the designer was secretly marking up most of the furniture sourced for the client by anywhere from 35 to 100 percent. Although the Court entered a default judgment for the plaintiff for the defendant’s failure to appear at trial to defend himself, the court did analyze the breach of contract claim and did state that the designer’s “undisclosed markups on items procured for plaintiff are a breach of the Agreement.”

Also worth noting is the Court’s analysis of the claim for violation of the Virginia Consumer Protection Act (VCPA). The Court stated that the failure to disclose “rebate and commission arrangements with its vendors” and “charg[ing] … undisclosed markups for many of the furniture items procured,” such as “$4,800.00 for a lounge that only cost $2,481.00, and $11,000.00 for a table that only cost $5,999.40” satisfied the VCPA’s prohibition against using deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.” 

Link https://casetext.com/case/johnson-v-robert-shields-interiors-inc

Given my experience working with interior designers, the designer in the Johnson case no doubt believed that because the contract was silent on the amount of the mark-up that he could charge, he had discretion to charge whatever mark-up he chose.

To avoid these headaches, it is important to be clear about how purchasing fees are structured. This can be done several ways. First, if you intend to charge for your time spent during the purchasing process, then include that in your contract. For example “Designer shall charge it standard hourly rate for all time spent on the procurement of furniture and decorative items.” 

Second, if you intend to charge a flat fee for the purchasing process, then be clear about whether that fee includes your fees. For example, the following clause comes from another case [Marcus v. Marlene Dennis Design, LLC] https://www.virginiabusinesslitigationlawyer.com/wp-content/uploads/sites/52/2022/07/Marcus-Complaint.pdf that also made headlines.

Here is the clause at issue:

“Furnishings, rugs, artwork, decorative lighting and accessories not to exceed $250,000. Designer and client to review Furniture Plan and agree on the items to be re-purposed and to confirm that $250,000 is an appropriate amount given the items required.”

This clause is simply too vague. For example, it is unclear what is included in the $250,000 sum.

Key Take Away:

Contract language that governs fees on purchasing services, commissions on the goods, and/or third-party services, must be clear and unambiguous as to how the fee is calculated, what purchases are subject to the fee, whether discounts are available, and how they’re applied, if at all.

For answers to these and other mission-critical business issues faced by designers, please contact us today for a no-fee, limited, no-obligation consultation. (866) 734-2568. http://www.adler-law.com

Business, Contracts, Design, Entrepreneurs, Law, Legislation, llinois, New York

Ping® by AdlerLaw July 2022 – Recent State Laws in Illinois & New York Affect Contractors, Interior Designers

This month’s issue of Ping® highlights recent changes in State laws in Illinois and New York. Effective January 1, 2023, Illinois joins at least 18 other states to have a Title Act authorizing Registered Interior Designers to seal any bound set or loose sheets of technical submissions. This change can only benefit everyone in the industry including, designers, tradespersons, and most importantly, consumers. Also noteworthy is New York’s legislative approval of NY State Senate Bill S8369B relating to protections for freelance workers. The Freelance Isn’t Free Act (the “Act”) if signed, would amend the New York Labor Law to establish rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation. 

Illinois: Legislation relating to Registration & the Scope of Practice of Interior Designers

Effective January 1, 2023, Illinois joins at least 18 other states to have a Title Act authorizing Registered Interior Designers to seal any bound set or loose sheets of technical submissions. This change can only benefit everyone in the industry, designers, tradespersons and most importantly, consumers as it will expedite some customary but often needlessly duplicated tasks.

The Title Act puts no stumbling blocks before those who wish be interior designers. These statutory provisions and rules do not regulate the practice of interior design – anyone can offer to provide and provide interior design services in Illinois. The Illinois act only regulates the use of a specific title – “Illinois Registered Interior Designer.”

Illinois is one of 19 states, including neighboring Minnesota, Wisconsin and Iowa, that have voluntary title registration for interior designers with no permitting authority. In addition, 21 other states, including Michigan, have no title laws or permitting authority for interior designers at all. Proponents of regulating interior design submit that interior designer registration requires industry recognized credentialing and rigorous testing.

If you have questions about the Act’s application to your business, or about the pros/cons of becoming a Registered Interior Designer, or if you need assistance navigating the credentialing process, please feel to contact me for more information. (866)734-2568 and David [at] adler-law.com.

New York: State Legislature Approves Statutory Protections For Independent Contractors

New York’s legislative approval of NY State Senate Bill S8369B relating to protections for freelance workers. The Freelance Isn’t Free Act, if signed, would amend the New York Labor Law to establish rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation. 

The Act establishes protections for certain freelance workers providing services for entities located in the City. The New York State Legislature had earlier this month approved a bill providing similar protections to freelance workers throughout the state. If signed by the Governor, the Act will take effect 180 days after signing and apply to contracts entered into with certain independent contractors on or after that effective date. The Act mirrors the City-specific text in almost all respects and amends the New York Labor Law to establish protections for covered freelance workers, including establishing rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation.

Independent Contractors

If you or your business is contracted to perform specific work for an “employer,” according to your own process, using your own resources, and outside the daily control of the employer, you are an independent contractor. Independent contractors are not considered employees. This creates risk and benefits for both parties. Considered self-employed, independent contractors do not receive most of the rights and benefits that employees receive from employers or by virtue of federal and state employment laws, particularly the Fair Labor Standards Act. In addition, independent contractors are responsible for paying all applicable federal, state and local taxes from the income you receive. However, civil rights law does apply to independent contractors in their relationship to employers. Independent contractors go by many names, including, freelancer, contractor, or consultant.

However, unlike an employee, the terms of the relationship between an independent contractor and the employer are subject to negotiation and may not always be presumed or mutually understood. For example, the terms of your work assignment, and who owns the finished (or in process) work product. For example, if you are a photographer working as an independent contractor, you retain the copyright to your photos even after delivering it to the employer, unless you have a written agreement explicitly stating the services are “work-made-for-hire,” specially commissioned, or otherwise assigned away. As an independent contractor, you will be paid according to the terms of your agreement, not according to the employer’s customary payroll. One of the biggest challenges for independent contractors is getting paid, but these risks can be addressed by properly considering  this issue prior to commencing work.

Focus | Vision | Perspective | Passion

Executives and creative professionals face an often confusing and dynamic set of challenges trying to ensure that their business remains legally compliant. Yet few can afford the highly-qualified and versatile legal staff needed to deal with today’s complex and inconstant legal and regulatory environment.

Adler Law Group is a boutique Entertainment, Intellectual Property & Media law firm created with a specific mission in mind: to provide businesses with a competitive advantage by enabling them to leverage their intangible assets and creative content in a way that drives innovation and increases the overall value of the business. Although we are a highly-specialized law firm, we counsel on a broad range of interconnected issues by leveraging synergies created where Intellectual Property Law, Contract Law and Corporate Law overlap.We approach our relationship with each client as a true partnership and we view our firm as an extension of their capabilities. Our primary value is our specialization on relevant and complex issues that maintain the leading edge for our clients. We invite you to learn more about the services we offer and how we differ.

Business, Chicago, Cloud, cloud computing, Compliance, Contracts, Copyright, Corporate Law, Corporations, Law, LLCs, Mergers & Acquisitions, Small Business, Start-ups, Trademarks

Ping® January 2022 – Reminder To Review Your Contracts

Review Your Contracts Every Year.

One of the most important tools to protect your business – your ideas (copyrights, trademarks, trade secrets, confidential and proprietary information), customer relationships and talent pool – is your written contract. Your contract is the foundation for a reliable relationship for you, your customers and your employees. More importantly, it helps to prevent misunderstandings and false expectations that can lead to a breakdown in your customer relationship, jeopardize projects, or even worse, result in litigation.    

Starting with a form is just OK.

Many companies start with a model or “form” contract adapted from forms available online or drafted when the business first started.  Oftentimes, I am presented with form contracts “downloaded from the Internet” or provided by a form-filling service that will do cheap and quick corporations or LLCs, without actually providing any legal services. Although these forms may be a good starting point, your business needs, it deserves, contracts tailored to the specific needs of the enterprise or relationships.

Franken-contracts can ruin your business.

As businesses develop over time, you may have revised your contracts, adding a little here, removing a little there. Maybe you read an article about an important case in your industry and decided to add some text from the contract discussed in the court’s legal opinion. In many cases, over time, the agreements become “Franken-contracts” an odd amalgamation of trade lingo, inconsistent terms and even contradictory conditions. At best these are ambiguous and confusing to read. At worst, they become unenforceable.

Review contract annually to avoid weak spots.

At some point, you should review, revise and generally “tighten” existing contracts. You should have your lawyer review them to make sure that there are no mistakes, ambiguities or omissions that could cost you or your customers. I urge clients to have their contract forms reviewed on an annual basis. Depending on changes in the law, changes in the industry or changes in your own business, this process should only take a few hours.

Contact us for a free, no-obligation consultation.

To learn more about how we can help your with your business and contracts, contact the Lawyers at the Adler Law Group at David @ adler – law . com (without spaces) or (866) 734-2568. Learn more abut us here:

http://www.adler-law.com

Business, Contracts, Corporate Law, Corporations, Entrepreneurs, Law, Legislation, Noncompete

Ping® October 2021 Changes Coming to Non-Compete Agreements in Illinois

EMPLOYMENT (820 ILCS 90/) Illinois Freedom to Work Act.

Illinois passed a law that amends the Illinois Freedom to Work Act. Expands the scope of the Act to apply to all employees (rather than only low-wage employees). Prohibits all covenants not to compete.

Scope

The law goes into effect January 1, 2022 and amends the Freedom to Work Act (the Act), which restricts the use of non-compete agreements for low wage workers. For the first time, Illinois will have statutory requirements for mandatory review periods, definitions of adequate consideration and legitimate business interests, as well as specific salary minimums for employees subject to restrictive covenants. 

Application

The law will apply to non-compete and non-solicit covenants. The law does not apply to contracts covering confidential and proprietary information, protection of trade secrets, or inventions assignment agreements. The law also does not address covenants for independent contractors, and expressly carves out restrictions on a person purchasing or selling the goodwill  or an ownership interest in a business.

Mandatory Review

The law requires that an employer advise the employee in writing to consult with an attorney prior to entering into the covenant and provide the employee with at least 14 calendar days to review the agreement. 

Consideration

Contract lawyers know that to be enforceable a promise must be supported by consideration. Due to the unique nature of restrictive covenants, there is heightened scrutiny of what will constitute sufficient consideration for a restrictive covenant under the Illinois law. The leading Illinois case, 

Fifield v. Premier Dealer Services, Inc., 993 NE 2d 938 (Ill.App.1st 2013), an Illinois court decided that mere employment or continued employment for at-will employees, is not adequate consideration to support a restrictive covenant unless the employee remains employed with the employer for at least two years after signing the agreement. 

Illinois law will now expressly defines “adequate consideration” as either (1) the employee working for the employer for at least two years after signing the non-compete or non-solicitation covenant or (2) other sufficient consideration, such as “a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.”

The law leaves open the definition of “additional professional or financial benefits.” Courts have found signing bonuses, equity grants, and other types of consideration sufficient under current case law. 

Going Forward

While there is time to plan for the effect of the new law, it’s not too soon to begin reviewing current existing “form” contracts and consider changes. One-size-fits-all contracts always need fine-tuning. Change sin the business operating environment require a closer look at non-compete and non-solicitation covenants. 

Business, Chicago, Contracts, Corporate Law, Corporations, Entrepreneurs, interior design, Law, Small Business, Start-ups, Strategy

Ping® – Arts, Entertainment, Media & Advertising Law News – “Five Rs” To Remember

“Five Rs” To Remember When Letting Employees Go

It is inevitable in almost every business. You will need to let an employee go. Whether it’s a seasoned designer coming with plug-and-play experience or a fresh face just out of design school, sometimes it just doesn’t work out. Recently, several of my designer clients have had to fire an employee due to the employee’s misconduct. This could be anything from soliciting and directing company clients and prospects, to doing personal consulting work on the company’s dime, to taking property and information. Regardless of the reason, here are five “R”s to keep in mind.

1. Review the contract.

2. Reconcile and pay.

3. Request return of property.

4. Reiterate respectfulness. 

5. Reserve rights.

With those ideas in mind, let’s consider each one. A little more.

1. Review the contract/offer letter. This is always the first step and will provide guidance on termination rights, procedures and remedies, if any.

2. Reconcile and pay what’s owed. See number 1. Ensure that except for payment of contractual and statutory amounts, no other salary, commissions, overtime, bonuses, vacation pay, sick pay, severance pay, additional severance pay or other payments or benefits whatsoever will be paid.

3. Request return of property and information, in whatever form. Request all property any and all property or documents the employee created or received in the course of employment, including, but not limited to e-mails, passwords, documents and other electronic information, hardware such as laptop computers and cellular telephones, calculators, smartphones and other electronic equipment (mobile phone, tablet, etc.), software, keys, company credit cards, calling cards, parking transponder, information technology equipment, client lists, files and other confidential and proprietary documents, in any media or format, including electronic files.

4. Reiterate a professional’s obligation to remain respectful. Specific admonition of non-disparagement such as “refrain from saying, making, writing or causing to be made or written, disparaging or harmful comments about us, our employees and/or our clients.”

5. Reserve rights. Close your termination notice by expressly reserving legal and equitable rights and remedies.

Please note that this is not legal advice and you should consult your own lawyer regarding your rights and obligations in the context of terminating your employee’s employment.

Advertising, Affiliate Marketing, Branding, Business, Cloud, Compliance, Contracts, Copyright, cyber risk, cybersecurity, data privacy, Ecommerce, FTC, Influencer Marketing, Internet, Law, Marketing, Media, Monetizing Content, Social Media, Trademarks

What Is Cyberlaw?

On November 13, I had the honor of providing a lecture on Cyberlaw to students at the Boston College Law School. Virtually, of course. I had been asked to talk about trends in Cyberlaw with a specific focus on issues related to intellectual property.

So what is Cyberlaw? Simply put, it is the “Rules of the Road” for the “information superhighway.” Cyber law is the law that governs rights, obligations and remedies of people and transactions conducted over global computer networks.

In a year that has seen hyperbolic growth in technology, commerce, and communications, this topic couldn’t be more timely. In order to frame the discussion, the scope featured a discussion of the Three Cs of Cyberlaw: Connections, Content and Commerce.

The first part of the discussion centered around Content, or issues related to Copyright, such as Free Speech/First Amendment CDA Sec. 230, Creative Works, Media and Entertainment, UGC and the DMCA.

The Second part of the discussion centered around Commerce or issues related to Trademarks, marketing and branding, such as: Marketing/Advertising, Domain Names – Cyberpiracy prevention, Keyword Advertising and Social Advertising.

The third and final part of the discussion focused on Connections and Communications and issues related to Personal Data, Stalking, Harassment, Surveillance and Sovereignty, issues around Social Media Freedom of Speech v. Freedom of Reach, and the latest developments around Political speech online.

The lecture closed with a Q&A focused primarily on Navigating Law School and Professional Practice.

Business, Contracts, Corporate Law, Entrepreneurs, interior design, Restrictive Covenants, Uncategorized

Illinois law and enforceability of postemployment restrictive covenants

Every business in this, the Information Age, is highly dependent on confidential and proprietary information.  As many design and creative professionals know, a design business is often based on intimate, personal relationships with clients. As a result,  relationships are built upon a high degree of trust and the professional reputation of the designer.  In addition, the designer brings a host of regular vendors and proprietary skills, knowledge, experience, including private and confidential information about clients, used for operating the Business.  It is not surprising that businesses will seek to prevent disclosure of business, technical and financial information (including information relating to clients, employees and vendors, as well information an employee learns during her employment.

Do I need a Non-solicitation agreement for my Design Business?

Increasingly, I am being asked by clients to prevent departing employees from using proprietary and confidential information and form poaching clients and employees.  These non-disclosure or non-solicitation provisions seek to prevent an employee from encouraging or soliciting any client, employee, vendor, or contractor to leave. Unfortunately,

Restrictive Covenants Are Hard to Enforce!

Post-employment restrictive covenants are carefully scrutinized by Illinois courts because they operate as partial restrictions on trade. Fifieldv. Premier Dealer Services, Inc., 2013 IL App (1st) 993 N.E.2d 938 (citing Cambridge Engineering, Inc. v. Mercury Partners90 BI, Inc., 378 Ill.App.3d 437, 447 (2007) ). In order for a restrictive covenant to be valid and enforceable, the terms of the covenant must be reasonable. It is established in Illinois that a restrictive covenant is reasonable only if the covenant (1) is no greater than is required for the protection of a legitimate business interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. Reliable Fire Equipment Co. v. Arredondo, 965 N.E.2d 393 (2011). The courts consider the unique factors and circumstances of the case when determining the reasonableness of a restrictive covenant. Millard Maintenance Service Co. v. Bernero, 566 N.E.2d 379 (1990). However, before even considering whether a restrictive covenant is reasonable, the court must make two determinations: (1) whether the restrictive covenant is ancillary to a valid contract; and (2) whether the restrictive covenant is supported by adequate consideration. Fifield, 993 N.E.2d 938. Absent adequate consideration, a covenant, though otherwise reasonable, is not enforceable. Id. ¶ 14 (citing Brown & Brown, Inc. v. Mudron, 887 N.E.2d 437 (2008) ); see also Millard, 566 N.E.2d 379.

For most businesses, enforceability of such covenants turns on the concept of “consideration.” The current Illinois authority on “consideration” is Fifieldv. Premier Dealer Services, Inc., 2013 IL App (1st) 120327. In Fifield, the Illinois appellate court noted that Illinois courts have repeatedly held that there must be at least two years or more of continued employment to constitute “adequate consideration” in support of a restrictive covenant.  The court also clarified the process by adding that “Fifield [did not overrule or modify] Brown, which engaged in a fact-specific approach in determining consideration.

As a general rule, courts do not inquire into the adequacy of consideration. However, postemployment restrictive covenants are excepted from this general rule because “a promise of continued employment may be an illusory benefit where the employment is at-will.”  Most design businesses have at-will employees.

Fifield is equally important for both what it says and for what it does not. Clearly employment alone – any less than two years duration – is  NOT adequate consideration. However, the Fifieldcourt also stated that there could be other or additional factors such as an “added bonus in exchange for this restrictive covenant, more sick days, some incentives, [or] some kind of newfangled compensation,” that could be considered additional compensation that could support enforcement of the covenant.

Despite the recognition that the bar is set high for the amount of consideration necessary to enforce restrictive covenants, it makes sense to include them in your agreements with those who work for you.

In addition to the non-solicitation language, one should create a strong and broad definition of protectable proprietary and confidential information.  While it may not always be possible to stop a former employee from directly competing against you, it is possible to prevent said employee from using your own proprietary and confidential information against you.