Recreational use of marijuana is also legal in Ohio, but employers have the right to continue to impose policies precluding the hiring of candidates who test positive.  Employers should be mindful that doing so will limit the pool of eligible candidates.

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Judge Burke found the CTA to be unconstitutional because it exceeds the Constitution’s limits on Congress’s power, without even reaching a decision on whether it violates the First, Fourth or Fifth Amendments.

It is unclear whether this ruling is limited to its plaintiffs or more broadly impacts all businesses that are otherwise required by the CTA to report their beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  In addition, this ruling will likely be appealed and thus the court of appeals, and possibly the Supreme Court, will also weigh in on the issue of the CTA’s constitutionality during the coming months and years.

We encourage our small business clients whose businesses were formed prior to January 1, 2024 to adopt a wait and see approach, and to refrain from submitting their reports until later this year as this case makes its way through the appellate process.  If you have any questions about this ruling and its impact on your business, please contact your BauerGriffith attorney.

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Non-compete agreements are often entered into as a condition of employment to protect trade secrets and intellectual property.  Under the traditional analysis of most states, non-compete agreements are valid and enforceable if the agreement:

• Is supported by consideration
• Contains restrictions no greater than necessary to protect the employer
• Does not impose an unreasonable hardship on the employee
• Contains reasonable temporal and geographic restrictions

On May 30, 2023, the National Labor Relations Board issued a memo indicating that “the proffer, maintenance, and enforcement” of non-compete provisions violates Section 8(a)(1) of the National Labor Relations Act (NLRA), except in very limited circumstances. That memo instructs regional offices to deem most non-compete provisions unlawful.  Adoption of new rules are anticipated in April, 2024, and will certainly face legal challenges.

Until then, it is important for employers to understand that in Ohio, all non-competes are subject to court interpretation (state and federal), and courts are more likely to enforce these agreements if there is a tangible taking and unauthorized use of company data. There are no Ohio statutory provisions governing non-competes. Employers should examine the following with legal counsel:

• Current language in existing non-competes
• Review reason behind the non-compete and enforceability
• What employees are required to sign non-competes
• Does the company have liability insurance coverage for these claims (D&O)
• If non-compete is violated, what is the tangible harm
• Has remote work expanded unnecessary employee access to more company data

For help assessing your current or proposed non-compete agreements, call Elise Auvil Hara in our office at 216-374-3713.

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September 26, 2023                

Cleveland, OH – Today the Board of Trustees voted and approved seven members who will serve as the newly created Civilian Oversight Committee (COC).  The inaugural COC consists of the following individuals: Elise Auvil, Timothy Clary, Jakolya Gordon, David Morris, Steven Sims, George Taylor, and Rebecca Wharton.  The seven members were selected by the GCRTA Board of Trustees through an application and interview process.

“The creation of a voluntary civilian oversight committee exemplifies our dedication to proactively nurture a culture of accountability and transparency within the GCRTA Transit Police Department,” said GCRTA Board Member Lauren R. Welch, Chair, Ad Hoc Selection Committee for the COC.  “The committee’s purpose is to review public complaints filed against GCRTA Transit Police Department employees and make recommendations for the resolution of public complaints regarding alleged misconduct by Transit Police employees.”  The creation of the COC is a proactive strategy, as opposed to a mandate, to provide community voice and build public trust.

The role of a COC member includes:

• Improving relationships by fostering communication between community and police.
• Increasing public understanding of GCRTA police policies and procedures.
• Improving the quality of Transit Police Internal Affairs investigations.
• Recommending and identifying areas of concern and offering options to improve policing.

COC members will receive training and familiarization on police tactics, bias-free policing, federal, state, and local laws involving police-citizen encounters, GCRTA Transit Police policies, procedures, and disciplinary rules, and GCRTA’s Code of Ethics during Q4 of this year.

“I’m excited about this team and of the various levels of work experience they bring to this committee, and I thank them all for their willingness to make such a commitment to serve the community in this capacity,” said GCRTA Board President, Rev. Charles P. Lucas, Pastor Emeritus, St. James AME Church. “Establishing this committee continues to demonstrate GCRTA’s commitment to building trust through transparency and engagement with community stakeholders.”  

“GCRTA stands firm in the belief that a blend of traditional policing and modern civilian outreach is an effective combination in resolving issues identified aboard public transit, or at public transit stations or transit centers,” said GCRTA General Manager and Chief Executive Officer India L. Birdsong Terry. “As we move forward, our Transit Police will continue to review our policing and safety strategy to increase visibility, deter crime, and assist in investigation resolution.  These efforts are intended to assist and enhance the overall safety of our customers, employees, and the public.”

For a complete overview of COC visit https://www.riderta.com/coc for details.

ABOUT GCRTA:

GCRTA was formed in 1975 with the mission of providing public transit services to the 59 communities and 1.2 million residents of Cuyahoga County. As the largest public transit agency in the State of Ohio, GCRTA’s service options include bus, BRT, trolley, paratransit and three rail lines. GCRTA makes connections that empower individuals, neighborhoods, and communities to rise.

COC members pictured left to right; George Taylor, Timothy Clary, David Morris, Elise Auvil, Jakolya Gordon, Rebecca Wharton, and Steven Sims

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Which rights can be assigned, and which duties delegated?

All rights can be assigned unless:

• A statute expressly prohibits assignment
• The contract is for personal services
• The assignment will materially alter the obligor’s risk or duties
• The contract prohibits assignment

All duties can be delegated unless:

• Performance depends on the obligor’s personal skills or talents, or special trust has been placed in the obligor
• Performance by a third party will materially vary from that expected by the obligee
• The contract prohibits delegation

What if the contract prohibits assignment or delegation?

No rights can be assigned except:

• Rights to receive funds
• Ownership rights in real estate
• Rights to negotiable instruments
• Rights to damages for breach of a sales contract or payments under a sales contract

No duties can be delegated

What is the effect on the original party’s rights?

• On a valid assignment, effective immediately, the original party (the assignor) no longer has any rights under the contract
• On a valid delegation, if the delegatee fails to perform, the original party (the delegator) is liable to the obligee (who may also hold the delegatee liable)

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Every state has a statute providing what types of contracts must be in writing, referred to as the Statute of Frauds.  The primary purpose of the statute is to prevent harm to innocent parties by requiring written evidence of agreements concerning important transactions.  Thus an oral contract that is required to be in writing is typically voidable by a party who later does not want to follow through with the agreement.

While there are variations between the states, the following types of contracts are generally required to be in writing or evidenced by a written memorandum or electronic record:

1. Contracts involving interests in land. 
2. Contracts that cannot by their terms be performed within one year from the day after the date of formation.
3. Collateral (secondary) contracts, such as promises to answer for the debt or duty of another and promises by the administrator or executor of an estate to personally pay a debt of the estate.
4. Promises made in consideration of marriage.
5. Contracts for the sale of goods priced at $500 or more, under the Uniform Commercial Code (“UCC”).

A contract involving land is only enforceable if it is in writing or evidenced by a written memorandum.  Land is real property and all physical objects that are permanently attached to the soil, including buildings, fences, trees, and even the soil itself.  The contract must describe the property being transferred with sufficient certainty for it to be identified.  The Statute of Frauds is a defense to the enforcement of an oral contract for the sale of land, and also requires written evidence of contracts for the transfer of other interests in land, such as a mortgage and a lease.  Options to purchase land must also be in writing for the option to be enforced.

The so called one-year rule is because the parties’ memory of the contract terms is not likely to be reliable for more than a year.  The one-year period starts the day after the contract is made.  The test to determine whether an oral contract is enforceable under the one-year rule is whether performance is possible within one year.  It does not matter whether the agreement is likely to be performed during that period, only what is possible.  If performance of a contract is objectively impossible during the one-year period, the contract must be in writing to be enforceable; if performance is possible within one year under the contract’s terms, the contract does not fall under the Statute of Frauds and does not need to be in writing to be enforceable.

A collateral, or secondary, promise is one that is ancillary to a principal transaction or primary contractual relationship.  Stated differently, a collateral promise is one made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform.  A promise to pay another person’s debt or other obligation that is not conditioned on the person’s failure to pay/perform is a primary obligation, whereas a promise to pay only if that party fails to pay is a secondary obligation.  The Statute of Frauds applies to secondary obligations, and the contract must be in writing.  There is one exception – a promise to answer for the debt of another is not subject to the Statute of Frauds if the guarantor’s main purpose in incurring the secondary obligation is to secure a personal benefit.  In that case, the guarantor is, in effect, guaranteeing his own debt and there is no writing requirement.

A promise made in consideration of marriage must be in writing.  This includes both a unilateral promise to give something of value (money or property) in consideration of a promise to marry, as well as prenuptial agreements.  A unilateral promise can be from the future spouse or any third party, but in either case requires written evidence to be enforceable.  A prenup is an agreement made by the partners prior to marriage defining each partner’s ownership rights in the other’s property, and must be in writing to be enforceable.

The Uniform Commercial Code includes Statute of Frauds provisions requiring written evidence or an electronic record of a contract for the sale of goods priced at $500 or more.  The writing need only state the quantity term, and will not be enforceable for any larger quantity.  Other terms can be either omitted or stated less precisely, provided they adequately reflect both parties’ intentions; it need not designate the buyer, seller, terms of payment or price.  A written memorandum or series of communications evidencing a contract is sufficient, as long as it is signed by the party against whom enforcement is sought.

There are a few exceptions to the writing requirement.  When a contract has been partially performed and the parties cannot be returned to their positions prior to the contract’s formation, a court may grant specific performance, an equitable remedy requiring performance of the contract according to its precise terms.  Courts sometimes grant specific performance of an oral contract, after the parties have proved that an oral contract existed.   Oral contracts for the transfer of interests in land might be enforced if partial performance has occurred.  In addition, the UCC provides that an oral contract for the sale of goods is enforceable to the extent that a seller accepts payment or a buyer accepts delivery of the goods.  In general, partial performance indicates that at least one party believes there to be a contract.

If a party against whom enforcement of an oral contract is sought “admits” under oath that the contract for sale was made, the contract is enforceable.  The admission can occur at any stage of the court proceedings.  In addition, a party who admits a contract that is subject to the UCC also makes the contract enforceable, but only to the extent of the quantity admitted.

Some states have also adopted the doctrine of promissory estoppel to enforce oral contracts that would otherwise be unenforceable under the Statute of Frauds.  If a person justifiably relies on another’s promise to her detriment, a court may prevent the promisor from denying the existence of the contract.  For the promise to be enforceable, the promisee must have justifiably relied on it to her detriment, and the reliance must have been foreseeable to the promisor.  In addition, there must be no way to avoid injustice except to enforce the promise.

Finally, under the UCC oral contracts for the purchase of customized goods may be also enforced. 

As stated earlier, to satisfy the Statute of Frauds there must be a written contract or a written memorandum or electronic record that evidences the agreement and is signed by the party against whom enforcement is sought.  A writing can consist of an order confirmation, invoice, sales slip, check, fax or email, or a combination thereof.  It need not be a single document to be an enforceable contract.  In addition, one document may incorporate others by expressly referring to them, and several documents may form a single contract if they are physically attached (such as by staple, paper clip or glue, or even if several documents are placed in the same envelope).  A memo or note evidencing an oral contract need only contain the essential terms of the contract, not every term.  There must be an indication the parties voluntarily agreed to the terms, and a writing under the UCC for the sale of goods must include the quantity.  In most states the writing must also name the parties, identify the subject matter, the consideration and the essential terms with reasonable certainty, and contracts for the sale of land typically require the price and a description of the property with sufficient clarity to identify it without the need for outside resources.  Interestingly, since only the party against whom enforcement is sought must have signed the writing, it is possible for a contract to be enforceable by one party but not the other.

Sometimes a written contract does not include, or contradicts, an oral understanding reached by the parties before or at the time of contracting.  If a court determines that the written contract represents the complete and final statement of the parties’ agreement, it will apply the parol evidence rule and not allow either party to present testimony or other evidence of communications between the parties not contained in the contract itself.  In general, a party cannot present evidence that contradicts or varies the terms of a written contract, e.g. negotiations prior to contract formation, agreements prior to contract formation, or oral agreements made at the same time as the contract.  This is a very strict rule, which has led courts to create certain exceptions.  Subject to the Statute of Frauds and the terms of the contract itself regarding modifications, evidence of subsequent modifications, oral or written, to a written contract can be introduced in court.  Oral evidence can also be introduced to show that the contract was void or voidable; when the terms of a written contract are ambiguous or require interpretation, evidence is admissible to show the meaning of the terms; and when a contract lacks one or more of the essential terms, courts allow additional evidence to fill in the blanks.  Under the UCC, evidence can be introduced to explain or supplement a written contract by showing a prior dealing, course of performance, or usage of trade.  Finally, if the parties have orally agreed on a condition precedent prior to full performance of a contract, which does not conflict with the terms of their written agreement, a court may allow parol evidence to prove the oral condition; and when an obvious or gross clerical error or typo exists, parol evidence is permitted to correct the error.

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There are instances in which a mistake may be used to avoid a contract, however only if it is a mistake as to a material fact.  Mistakes of value or quality do not meet this standard, nor do facts that would not be considered important to a reasonable person.  A unilateral mistake of fact is made by only one party, whereas a bilateral mistake is made by both.  While a bilateral mistake is a mutual misunderstanding regarding a basic assumption on which the contract was made, and allows either party to rescind the contract, a unilateral mistake typically does not provide the mistaken party any right to relief from the contract, and normally the contract is enforceable.  The exceptions are when the other party to the contract knows or should have known that a mistake was in fact made, or if the error was due to a substantial mathematical mistake and was made inadvertently and without gross negligence.  Whether a unilateral or bilateral mistake, the mistake must involve a material fact.

When an innocent party is fraudulently induced to enter into a contract, the contract can usually be avoided because that party did not voluntarily consent to its terms.  The innocent party can either rescind the contract and be restored to her original position, or enforce the contract and seek damages for any harm resulting from the fraud.  Fraudulent misrepresentation generally refers only to misrepresentation that is consciously false and is intended to mislead others.  Fraudulent misrepresentation must include misrepresentation of a material fact, with intent to deceive, that is justifiably relied on by the innocent party and, to collect damages, the innocent party must have been harmed due to the misrepresentation.

Undue influence arises from a relationship in which one party can greatly influence the other, thus overcoming that party’s free will.  A contract entered into under excessive or undue influence lacks voluntary consent and is thus voidable.

Agreement to terms of a contract is not voluntary if one of the parties is forced into it.  Use of threats to force a party to enter into a contract constitutes duress, as do blackmail and extortion.  Generally there must be proof that the threat is wrongful or illegal, rendering the threatened person incapable of exercising free will.  Duress is both a defense to the enforcement of a contract and a ground for the rescission of a contract.

Finally, a contract may be unconscionable if it is a one-sided bargain in which one party has substantially superior bargaining power and can dictate the terms of the agreement.  In this case the signer must agree to those terms or go without the commodity or service in question.  These take-it-or-leave-it (adhesion) contracts often use standard forms, giving the adhering party no opportunity to negotiate terms, and may be considered unconscionable and lacking in voluntary consent.

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Agreement is the first essential element for contract formation, meaning the parties must agree on the terms of the contract and manifest to each other their mutual assent, or voluntary consent, to the same bargain.  Ordinarily agreement is evidenced by two events, an offer and an acceptance.  One party offers a certain bargain to another, who then accepts that bargain.  Although it is wise to have an agreement in writing, with certain exceptions it is not a requirement. 

An offer is a promise or commitment to do or refrain from doing some specified action.  There are three requirements for an offer to be effective, namely that the offeror must have a serious intention to become bound by the offer, the terms of the offer must be reasonably certain, or definite, so that the parties and a court can ascertain the terms of the contract, and the offer must be communicated to the offeree.  Once an effective offer has been made, the offeree’s acceptance of that offer creates a legally binding contract (providing the other essential elements for a valid and enforceable contract exist).  Note that serious intent of the offeror is not determined by his subjective intentions, beliefs and assumptions, rather by what a reasonable person in the position of the offeree would conclude are meant by the offeror’s words and actions.  For example, a reasonable person would recognize that offers made in obvious anger, jest or undue excitement do not meet the serious and objective intent test.  Similarly, expressions of opinion, statements of future intent, preliminary negotiations, invitations to bid, advertisements and price lists, and live and online auctions, are not considered offers.

The second requirement for an effective offer involves the definiteness of its terms.  An offer must have reasonably definite terms so that a court can determine whether a breach has occurred and give an appropriate remedy.  While the specific terms depend on the type of contract, in general a contract must identify the parties, the object or subject matter of the contract, the consideration to be paid, and the time of payment, delivery or performance.  Finally, the third requirement is that the offer must be communicated to the offeree.

Once there is a valid offer, the offeree can accept it, thus making it a binding legal obligation (a contract).  Alternatively, an offer can be terminated by revocation, rejection or counteroffer. Unless the offer is irrevocable, the offeror can revoke his offer by communicating the revocation to the offeree prior to acceptance.  An offeree can reject an offer, by words or conduct, thereby terminating the offer.  Like revocation, a rejection is effective when it is actually received by the offeror.  Finally, an offeree can make a counteroffer, essentially a rejection and simultaneous new offer.  In addition, to ensure that offers do not remain open indefinitely, the power of an offeree to transform an offer into a binding legal obligation can be terminated by operation of law through lapse of time, destruction of the specific subject matter of the offer, death or incompetence of either party, or supervening illegality of the proposed contract.

Acceptance is a voluntary act by the offeree showing assent to the terms of an offer, either by words or conduct.  Acceptance must be unequivocal, typically must be communicated to the offeror, and must be timely.  There are also rare circumstances in which silence can constitute acceptance.  An attempt by an offeree to change the terms of the offer may be considered a counteroffer. 

Consideration is the value given in return for a promise or performance; it is the inducement, price or motive that causes a party to enter into an agreement.  Consideration is something of legally sufficient value given in exchange for the promise, and a bargained for exchange.  This element of bargained for exchange distinguishes contracts from gifts.

Contractual capacity is the legal ability to enter into a contractual relationship.  The age of majority for contractual purposes is eighteen.  The general rule is that a minor can enter into any contract that an adult can, except those prohibited by law for minors (such as the purchase of alcohol or tobacco).  However, a contract entered into by a minor may be voided at the minor’s option, with a few exceptions.  A minor may disaffirm the contract by expressing her intent, through words or conduct, not to be bound by the contract. 

Contracts made by mentally incompetent people can be void, voidable or valid, depending on the circumstances.  If a court has previously determined that a person is mentally incompetent, any contract made by that person is void – no contract exists.  If there is no such court determination, but the person was incompetent at the time the contract was formed, the contract is voidable if the person did not know that he was entering into the contract or lacked the mental capacity to comprehend its nature, purpose and consequences.  In these situations, the contract is voidable, or can be ratified, at the option of the mentally incompetent person, but not the other party.  A contract entered into by a mentally ill person not previously declared incompetent may be valid if the person had the capacity at the time the contract was formed.

Contracts by an intoxicated person are good examples.  If the person was sufficiently intoxicated to lack the mental capacity to comprehend the legal consequences of entering into the contract, the contract may be voidable at the option of the intoxicated person.  However, if the person understood these legal consequences despite intoxication, the contract will be enforceable.  To disaffirm, the intoxicated person can do so at any time while intoxicated and for a reasonable time after becoming sober, but must make full restitution.  In addition, the person can ratify a contract formed while intoxicated after becoming sober. 

Finally, for a contract to be valid and enforceable it must be formed for a legal purpose.  A contract to do something that is prohibited by federal or state statutory law is illegal and, as such, void from the outset and thus unenforceable.  Examples include usury, contracts to commit a crime and contracts by an unlicensed person.  In addition, a contract to commit a tortious act is contrary to public policy and thus illegal and unenforceable. Additional examples of contracts contrary to public policy include restraint of trade, discriminatory contracts and adhesion contracts. With few exceptions, an illegal contract is void.

Our team of attorneys is ready to assist you with your contracting needs.

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Attorney Stacy L. Bauer has a lot of experience working in corporate settings.

Receiving her Bachelor of Arts in English degree from Miami University in Oxford, Ohio, and a law degree from The George Washington University National Law Center in Washington, D.C., Bauer went on to serve as vice president of KeyCorp, where she was responsible for its investment management and commercial lending activities, and later served as vice president and general counsel of VESTAX Securities Corp., an ING company, providing legal and regulatory consultation to its broker/dealer subsidiaries.

As a single mother, Bauer said that she wanted to spend more time with her daughter and have more flexibility in her career. So, in 2009, she established her firm BauerGriffith, LCC with her partner, Nancy Hancock Griffith. The firm specializes in business law, providing counsel to its nonprofit and small business clients. Bauer serves as an outsourced corporate counsel.

“It was very difficult in the sense that you’re giving up a very lucrative career that has identifiable benefits and an income stream,” she said. “Everything became unidentifiable. But the upside is that I was able to be there for everything my daughter needed and wanted, and I wouldn’t change it for the world.”

CJN: Why did you become a lawyer?

Bauer: I knew I was going to be an attorney since I was about four years old. My grandfather asked me what I was going to be when I grew up and I automatically said a lawyer. He asked me why, and I told him it was because I was smart and had a big mouth. At that age, I didn’t think you needed anything else after seeing lawyers on TV and in movies. That’s not the case – but I stuck with it from there.

CJN: What career milestone are you most proud of?

Bauer: I was sworn into the bar of the Supreme Court of the United States about five years ago. I brought my daughter with me. She was so proud and excited. Her reaction to that event, an event that honestly means very little in my career as I likely will never practice in front of the Supreme Court, meant the world to me. She was so humbled and proud. As a parent, there are no words that could ever be sweeter and more humbling than how proud your daughter is of you. She was then and continues to be.

CJN: What is the most gratifying thing about your job?

Bauer: Being able to help people. I am one of the lucky attorneys who can say my clients are usually happy. We’re helping them to establish themselves, and grow to do wonderful things. It is very gratifying to be able to help them and know that they trust me enough to approach me with their problems. And though I might not personally be able to solve them all, they know I can find the person who can – attorney or otherwise.

CJN: What excites you most about the future?

Bauer: I am inspired by LGBTQ issues. We’re allies at our firm and have been involved in the LGBTQ community as advocates for issues involving them. I’ve been really appreciative of seeing some of those issues moving forward and into 21st century thinking. It isn’t what I practice every day, but it is something I enjoy doing.

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