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Not On My Land? Clarifying the Elements For a Prescriptive Easement

Imagine finding that a neighbor, or a company, or even the public has acquired the right to use part of your property without compensating you. A recent ruling in South Carolina sets new case law and provides important guidance for issuers of title insurance, parties impacted by property litigation and anyone who may be seeking advice about the validity of an easement, which is a right to cross or use someone else's land for a specified purpose.

In Simmons v. Berkeley Electric – a property dispute over whether utility companies had the right to use a individual's land for water and power lines – the South Carolina Supreme Court held that the Court of Appeals erred in recognizing two methods, adverse use and claim of right, of proving the third element of a prescriptive easement. (A prescriptive easement is earned by regular use; it is not something that is purchased, negotiated or granted, and the user does not gain title to the land.)

This ruling concluded that when analyzing the third element of a prescriptive easement, South Carolina courts should apply a new test for adverse use, which is the practice of using property without the authorization of the owner.

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Beware the Double Whammy of New Overtime Rule

By the end of the year, employers could get hit with a double-whammy from new overtime pay rules. You may have heard about the new minimum pay rule, but another aspect of the overtime rules could sneak up on you.

The big, publicized change, announced in May, is that executives, administrators, outside sales people and professionals (and some others) are exempt from overtime under the Fair Labor Standards Act (FLSA) only if they perform duties that are considered exempt (the “duties test”) and are paid a minimum of $47,476 annually, or $913 a week (the new “salary test”). The current threshold, unchanged since 1975, is only $23,660.

Read our previous post on this change in overtime rules here

What makes it a double whammy is that the attention given to the new salary test likely will prompt many employees to ask if they are correctly being classified as exempt based on the “duties test,” which is separate from the salary test. Regardless of how much someone is paid, they must be paid overtime for hours worked over 40 per week if they don’t fall into an exempt category based on their actual job duties.

Employers won a major victory when the U.S. Department of Labor left the existing definitions for exempt classifications unchanged when it increased the pay threshold. We would caution employers not to breathe a sigh of relief, however. This unchanged part of the overtime rules may prove to be quite troublesome in the months ahead. 

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New South Carolina Law Helps Fiduciaries Access Digital Assets

Our online presence can live forever. The internet is packed with Facebook pages, Twitter accounts and neglected blogs that have outlived their makers. With the increasing presence of technology in our lives, we often a leave behind a plethora of digital assets without any guidance to our fiduciaries about what they are and how to access them. Digital assets include our smartphones, tablets, personal computers, social networking site, email accounts, electronic access to our financial and insurance information, online accounts that hold a cash value such as PayPal, url addresses, blogs, and files, pictures, videos stored on the cloud. Often, these digital assets are held by a third-party custodian, and gaining access in the past has been a daunting process if the deceased didn’t have the foresight to ease this process in estate planning.

Fortunately, South Carolina passed legislation this summer that provides a pathway for fiduciaries to access the digital assets of deceased or incapacitated family members. Called the Uniform Fiduciary Access to Digital Assets Act, it sets out a process for personal representatives and others with power of attorney or fiduciary powers to view these accounts. Custodians of accounts must comply with requests to view accounts so long as access has not been eliminated by the account user, federal law, or by a separate terms of service agreement with the user. 

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Attorney-Client Privilege: Use with Care

A bedrock principle of our legal system is the protection that the law gives to communications between an attorney and the client.

Like most legal rights, however, attorney-client privilege has limits. Every word shared between a client and attorney isn’t protected. If you’re talking to a lawyer about a sensitive matter, don’t take attorney-client privilege for granted. The law provides exceptions, case law sometimes offers muddled guidance and opposing parties may litigate vigorously over what is covered. Your attorney can advise you as to how it applies to your circumstances, but here are some guidelines about relying on attorney-client privilege and waiving it. 

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New Overtime Rule: What You Need to Know

Come December, 67,000 South Carolina workers will be newly eligible for overtime pay, following a revision of federal rules governing when overtime must be paid. Employers must take steps now to prepare for this rule, which goes into effect December 1, 2016 and will impact employees’ job duties, payroll expenses, and how work is assigned.

Depending on your point of view, the U.S. Department of Labor (DOL) regulatory change is either a severe burden for businesses – especially small businesses that may have less flexibility in how work is assigned – or a long overdue revision to allow lower-paid salaried workers to catch up to the rest of the economy.

Nationwide, the DOL estimates that about 4.2 million workers could benefit from the rule. In South Carolina, it will affect approximately 30 percent of salaried workers.

Announced May 18, the change addresses the overtime pay rule that is part of the Fair Labor Standards Act (FLSA). When Congress passed the FLSA at the tail end of the Great Depression, it mandated that workers had to be paid overtime at a rate of time-and-a-half for all hours over 40 worked in a given week. Exceptions were carved into the law, including exemptions for employees who worked in executive, administrative, outside sales, or professional jobs. (The logic behind these exemptions is that with this level of responsibility comes an obligation to get your work done, regardless of the clock.)

However, in addition to proscribing a baseline for the duties these employees engaged in on a day-to-day basis, Congress said employers could exempt only those employees who were paid a minimum salary. Since 2004, the minimum salary for each of these exemptions has been $455 per week, or $23,660 per year. In addition, employees compensated over $100,000 per year (and paid a weekly salary of at least $455 per week) could be exempt regardless of their job duties.

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Don’t Let Your Workplace Become Collateral Damage in the Cultural Wars

The so-called cultural wars have roiled politics since at least the 1990s and now have invaded the workplace.

However you feel about these issues personally, you should know they are going to spawn confusion and litigation in the workplace as employers try to make sense of conflicting mandates in the courts and legislatures. Uncertainty is the enemy of risk management, and unless you want to make an expensive public statement about your beliefs, we advise you to approach these issues with caution – and sound legal counsel – until the smoke clears.

Many date the cultural wars to 1992, when presidential candidate Patrick J. Buchanan delivered what became known as the “cultural war” speech at the Republican national convention, warning that “there is a religious war going on in this country. It is a cultural war, as critical to the kind of nation we shall be as was the Cold War itself, for the war is for the soul of America.”

You don’t have to agree with Buchanan’s politics to recognize that he was right about the nature of the battle. And with talk radio and cable TV’s insatiable appetite for controversy and our never-ending cycle of national campaigning, we don’t expect the cultural wars to abate, even following the election in November. 

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Shareholder Agreements Give Minority Owners Peace of Mind

When entrepreneurs start a business, they are long on optimism and short on contingency plans. That faith in free enterprise and the willingness to take risks has made America great. But businesses do hit speed bumps and the best-business-friends who worked so well together at the beginning of the enterprise sometimes find that their relationship unravels. When that happens, it can be frustrating if you’re a minority owner of the business.

As a dissenting minority shareholder, you can find yourself with no voice in a business where you invested money or sweat equity. That can include operations, hiring and firing, how profits are distributed, and mergers and acquisitions. While people often have honest disagreements over business strategy, the majority also can embark on a deliberate strategy to devalue a minority shareholder’s interest or shut him out of a fair share of profits.

As in most things, you often can avert headaches in a business relationship by assuming the best and planning for the worst.

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Forming an LLC? Don’t Forget to Have “The Talk”

About two-thirds of all new businesses in the U.S. start out as LLCs, or limited liability corporations. Entrepreneurs recognize that LLCs combine the protections of a traditional corporation with the operating flexibility that small businesses need. 

We’re big fans of LLCs, but they are not without potential pitfalls. When there are problems, it’s usually because the LLC members were in a hurry at the outset, and didn’t take advantage of all the safeguards and flexibility this business formation entity allows.

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