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Author: Matthew Harrison

Sexual Harassment

What Is It, How to Avoid It, and How the Courts Regard It

Sexual harassment has exploded into the public consciousness in a very short amount of time, especially as many celebrities have joined the lists of accused and accusers alike. But these types of situations are not new.  Despite the recent nature of the public outcry, sexual harassment has posed a potential threat whenever one worker has held power over another. If a business does not understand or recognize the concepts and definitions of sexual harassment, it could easily find itself embroiled in a major issue without even knowing what the alleged perpetrators did wrong. This post will examine the basics of sexual harassment, how your business can steer clear of it, and when you might need the services of legal counsel.

Workplaces provide ready environments for sexual harassment. Employers and employee-supervisors may attempt to leverage the security of their position to abuse their power over lower-ranking employees. Both federal laws and state laws govern claims of sexual harassment in Arizona. Title VII of the Civil Rights Act of 1964 generally governs the issue on a federal level, while generally the Arizona Civil Rights Act covers much of the same ground on the state level. According to these laws, sexual harassment may be defined as any sexually-oriented behavior by one person that the other person doesn’t want, including:

  • Inappropriate touching
  • Visual harassment tactics such as exposing oneself
  • Requests or demands for sexual contact
  • Unsolicited sexual discussion
  • Stalking
  • Bullying, threats, or bribes to obtain sexual acts

Sexual harassment is not limited strictly to employer-employee relationships. Any professional environment in which one person holds seniority or influence over the other can provide the setting for such transgressions, including teacher-student and doctor-patient relationships.   This definition has expanded to the degree that sexual harassment may be alleged even when there is no employer or supervisor relationship involved.  For example, co-workers who tell sexual jokes or stories that make their colleagues uncomfortable may be causing a form of harassment often referred to as a “hostile work environment.” Actual direct requests or demands for sex as a condition of job security are known as “quid pro quo” cases.  Neither does sexual harassment depend on the sex or gender of the individuals involved. A woman can sexually harass a man, a man may sexually harass a woman, or both parties may be of the same gender.

When does a situation reach the point where it would be considered sexual harassment? Definitions such as “inappropriate touching” may be open to interpretation, making such cases less cut-and-dried than one might think. In addition what one might view as sexual harassment may be considered by others to be completely innocent, non-sexual behavior.

To help clarify these issues and reduce the risk of frivolous accusations, the law applies something called a “reasonable person standard” to sexual harassment cases. This basically means that a reasonable person would conclude that the specific actions in the case constituted sexual harassment. For instance, say a group of employees regularly visited a local bar every Friday night, and one of the employees regularly asked another employee to come to this event. A reasonable person would probably see that as a normal social gesture, not a sexual overture. Hostile work environment cases, in which you must establish that an abusive work environment existed, can prove tougher to define than the more straightforward quid pro quo cases.  These cases require very fact-intensive inquiries that may vary greatly in each circumstance.

To prevent such difficult and troubling situations, businesses must have the correct policies in place to outline what is acceptable and unacceptable behavior. Even then, simply stating your stance on these issues is insufficient – the business must also select and implement the correct procedures to investigate and address any allegations of sexual harassment.

© 2018 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

New Estate Tax Exemptions Impacting Your Estate Plan

Along with the modifications in the tax rates, recent changes to federal tax law through the 2017 Tax and Jobs Act signed into law also affect estate planning — especially those who have either high value estates, family farms, or other small privately-held businesses.

The Act, temporarily doubles the exemption amount for estate, gift, and generation-skipping taxes from the $5 million base, set in 2011, to a new $ 10 million base, good for tax years 2018 through 2025.  The “death tax” exemption is indexed for inflation, so it looks like an individual can shelter $11.2 million in assets from these taxes for 2018.  Another federal estate law provision called portability lets couples who do proper estate and financial planning double that exemption.  As such, a couple could exclude $22.4 million for 2018.  The Act’s sunset means that, absent further Congressional action, the exemption amount would revert to the $5 million base, indexed in 2025. 

In this window, the tax bill offers enormous planning opportunities for those high-asset estates.  For couples, this would benefit anyone with $11 million or more in assets.  Under current law, each person for 2018 had a $5.6 million exemption.  Now each person will have an $11.2 million exemption so, a couple has an extra $11.2 million to gift or transfer at death. 

Please keep in mind that the Act doesn’t make changes to the rules that step-up basis at death.  That means that when you die, your heirs’ cost basis in the assets you leave them are reset at the value when you die.

Far fewer estates will be subject to the “death tax.”  The Joint Committee on Taxation estimates the number of taxable estates would drop for 5,000 under current law to 1,800 under the new Act in 2018.  By comparison, 52,000 estates paid the tax in 2000 when the exemption was $675,000. 

Separately, the annual exclusion amount that an individual can give to any number of individuals without eating into the lifetime gift tax exemption is not changed by the new Act.  It will be $15,000 for 2018, an increase from $14,000 in 2017, due to indexing for inflation. 

In summary, the Act does not negatively impact most estate plans.  Instead, it does positively impact those estates that have higher-valued assets.  For example, this Act will prevent most family-owned businesses from having to take into consideration the significant financial impact that would occur if the estate tax is triggered. 

Other posts from the Harrison Law blog about Estate Planning can be found HERE and HERE.

© 2018 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

The Importance of Funding Your Living Trust

If you want to spare your loved ones the headaches of the probate court process after your death, you may wish to consider creating and funding an Arizona living trust. A living trust can spare key assets of an estate from inclusion in the probate process, but only if it’s organized correctly and then actually funded properly with the assets that are part of the estate. This post will take a closer look at what you should know about funding a living trust before making that critical leap.

A living trust is a structure designed to assume legal ownership, either immediately or at the time of your death, of the assets you assign to it. While you’re alive, you’re the trustee and responsible for the maintenance of the trust, but you will have named a successor to take over this responsibility upon your death. This successor will then oversee the organization, protection, and distribution of your assets according to your stated wishes.

Unlike an irrevocable trust, a living trust may be revocable (before your death) and can be amended throughout the course of your lifetime. Not every Arizona resident needs a living trust to avoid probate; for instance, low-value estates, (totaling $75,000 or less) don’t require probate. Some types of assets, such as community property, may also escape the reach of the probate court process. However, any eligible assets that tip the balance over that low listed threshold bring probate into the picture.

Assets placed in a living trust are exempt from the probate court process, but this transfer doesn’t automatically occur simply because you created the trust. Once the living trust has been created, it still must be funded in order to be fully effective. If this step hasn’t been properly completed at the time of your death, your estate will probably initiate the probate cycle, trust or no trust – rendering useless all the time, work and money you’ve put into trying to avoid it. In order to properly fund your trust, you and your financial advisor must make 100 percent certain that you have correctly funded such key assets as:

  • Retirement accounts
  • Real estate
  • Insurance policies
  • Business and bank accounts
  • Investment accounts

Which of your assets do you assign to your living trust, and at what point do you do so? Some items may not go into a living trust right away, some will go into your trust after your death, and others may never go in at all. It’s impossible (or at least highly inappropriate) for an attorney to try and advise you on every account, asset, retirement plan, and insurance policy to be funded into in your living trust. Instead, we urge our clients to communicate with their financial advisors regarding each of these specific assets to receive detailed answers applicable to their specific situations.

When properly implemented and funded, a living trust will save your survivors much unnecessary stress. Attorneys can create the correct legal structure and framework necessary for the trust, but ultimately it’s up to you receive the greatest benefit by properly funding that trust. We encourage you to ask your financial advisor what steps you need to take – and then make certain that you’ve taken them.

© 2018 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Happy Holidays—With Moderation

During this time of the year, I often have business clients ask what should and should not occur at work.   Specifically, what should happen at work-sponsored social events to celebrate the Holidays and a successful end of the year.   These concerns have increased in light of recent news headlines where parties and out-of-work interactions have been a source of allegations of improper conduct and claims of harassment.   I can understand a business leader’s concern.  It is often a balancing act between a company wanting to reward their employees and increase morale, but (at the same time) avoiding a situation where actions may lead to issues at the workplace and liability to the business.    Below are a few general suggestions that I provide to businesses sponsoring a work party or experience.

  1. Have the event away from the office: This is important for several reasons.   First, it separates the event from the business where an owner would be fully responsible to monitor the event and prevent incidents.   Second, it provides additional individuals outside of the business who would be responsible to monitor and make certain it is a safe environment.   Third, it provides a justifiable reason if employees do not want to participate in the event.

  1. Alcohol consumption should be monitored: Alcohol consumption is another important reason why I recommend an event away from the office.   If the event occurs at the business, and alcohol is served, the owners become solely responsible to monitor the consumption of alcohol by their employees and, in part, whether or not they are in a condition to drive home.   This can lead to serious issues for the business if an alcohol-related incident happens either at their business or as their employees and/or their guests travel home.   Holding the event at another location, with event personnel providing the alcohol and monitoring consumption (and cutting off those who have reached their limit) provides an added level of responsibility and protection to avoid a negative event.

  1. Limitation on alcohol consumption: The term “open bar” often brings out the worst in some people where, because it is free, they drink far in excess of what should occur.   Although I understand businesses do not want to appear to be cheap to their employees in the food and alcohol that is to be provided, I often recommend a reasonable maximum alcohol drink limit.   If no drink limit is established, I recommend that the business directly give the bartenders of the event the latitude to cut off any individual they believe has had too much.

  1. Provide an option for travel from the event: If alcohol is being served with the knowledge that employees then have return home afterward, an owner wants to avoid employees driving under the influence and causing an accident, which can potentially expose the business to liability.   The employer offering the use (paid for by the business) of a taxi, shuttle service or similar travel option decreases the odds of an employee driving under the influence.

  1. Make certain that proper releases are signed: A recent trend for these events is for the business to have a team building activity instead of a typical party.   These activities have included such activities as hot air ballooning, bungee jumping, ziplining, a waterpark, or a similar activity that could lead to potential injury or other issues.   If this type of activity is to occur, businesses need to make certain that their employees know the risks and sign the proper release forms for the activities—whether provided by the venue or created by the business.    In addition, they should allow for employees who do not want to participate because of a physical or other limitation to fully participate in the event with co-workers in other ways.   That way, it prevents the appearance of segregating employees or discrimination because of a physical or mental limitation.

  1. Remind employees that their conduct at this event is the same conduct required in the office: Employees need to be reminded that their actions impact the business at all times.   Negative actions that would not be tolerated at the office (such as sexual harassment or committing a crime) are not allowed at a party.   A reminder to behave appropriately in the event invitation or in a company-wide e-mail is appropriate.

Businesses want to reward their employees at the end of the year for their hard work and dedication.   The primary goal is to reward employees in such a way where they both have a good time, feel appreciated yet are not put into a negative situation or scenario.    A few basic guidelines established by the business beforehand go a long way to avoiding potential future legal pitfalls.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.


A Basic Review of Intellectual Property Use by Businesses

Often when a business evaluates their assets, their primary analysis concentrates on bank accounts, inventory, real property, receivables, and similar assets.   These types of assets are often easy calculated and characterized.   However, most businesses also possess more intangible assets that may be more difficult to value, but have significant value nonetheless.   In fact, these assets may have more value than the easily-calculated bank accounts or real property.  One of these areas of assets is intellectual property.   In this article, I will provide the top three areas of intellectual property, how they are typically defined, and what protection they may receive.


Patents are typically divided into two categories.   The first category is a utility patent.  Utility patents cover methods, processes, devices, machines, manufactured items, or chemical compounds.   For a business, these patents protect what has been invented and created by the business for practical application and use.   Most “inventions” people typically envision (i.e, the toaster, air conditioning equipment, or pharmaceutical product) are what is protected.  These include those inventions that revolutionized society to others that went nowhere.

The second category is referred to as design patents.   Design patents protect the ornamental design of a functional item.  In this situation, it is the design that is different and not the function and use of the product.   A good example of a design patent is the one issued for the Coca-Cola bottle.   There are many glass bottles that serve the purpose and are utilized to hold soda.   What makes the Coca-Cola bottle different is the special contour shape and curves that make it unique from any other soda bottle and can be protected by its patent.

To obtain patent protection, the inventor must file a patent application with the U.S. Patent and Trademark Office (the “PTO”).   If the PTO determines that that invention is patentable, the inventor will be awarded U.S. patent, with a unique patent number, giving the holder unique use and rights to what is protected.  Patents can be bought, sold, traded, or inherited.  This is accomplished by the original patent holder assigning their rights in writing to another person or entity.   This assignment is then recorded with the PTO.


Trademark rights protect words, names, symbols, devices, or any combination thereof.  See 15 U.S.C. § 1127.   There are three general categories of trademarks:

  1. Trademarks: These are marks that assist a consumer to be able to differentiate between one protect in the marketplace from another. Famous trademarks that are often observed daily are the BMW propeller emblem, the Nike swoosh, and the multicolor apple for Apple Computers.
  2. Service Marks: These marks do not advertise a tangible product.   Instead, they are utilized to advertise a service or event.   For example, the Amazon logo with the swooping arrow and name advertises their internet shipping and retail business.
  1. Trade Dress: These are distinctive identifying features that form a trademark or service mark.  For example, trade dress may be the unique store design of a company.   You often see this in food and beverage establishments that always have the same layout, colors, floor design, and employee uniforms.    For example, an In-N-Out Burger location, 7-11 store, and McDonalds restaurant building appear almost identical no matter the city, state, or foreign location in which you may be.

Trademarks can also be registered through the PTO.   These rights can be assigned to another entity during the lifetime of the holder of the mark.   Any assignment or change of ownership needs to be recorded with the PTO.


Copyrights protect original literary works, music (both music and lyrics), dramas, choreography, graphics, photographs, movies and other audiovisual works, sound recordings, paintings, and sculptures.   See 17 U.S.C. §§102-103.   The Copyright Act identifies the creators of these works under the general term “authors.” 

Although authors do not need to register their works with the U.S. Copyright Office, doing so can strengthen their rights.  It can also be a factor in a determination of ownership and creation if there is a dispute between two authors of the same material.   Like patents and trademarks, copyrights can be sold, transferred, licensed, and provided as part of an author’s estate or business succession plan.

Most intellectual property assets of a business fall into one of these three areas.   In subsequent articles, I will discuss the steps that should occur to protect these assets and how they can be valued.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.