by G. Spencer Mynko, Esq.
Operating With Substandard Documents Is Unnecessarily Risky. IMPORTANT AND WELL DRAFTED LEGAL DOCUMENTS CAN PROTECT YOU FROM EXPENSIVE LAWSUITS, SAVE SUBSTANTIAL AMOUNTS OF MONEY, AND ENABLE YOU TO PROTECT YOUR RIGHTS WHEN OTHERS VIOLATE THEM.
State Of The Art Legal Documents Essential To All Trucking And Logistics Companies
At the heart of any dispute that involves a trucking, transportation, or logistics company, there should be a written document. Preferably, a well written document that maximally protects the unfortunate company mired in a legal dispute. Carefully drafted documents can better resolve (or even avoid) many disputes as long as proper legal documents are in place. In this article, I have created a list of important legal documents all trucking, transportation and logistics companies absolutely need.
Employee handbooks are perhaps among the most critical and important documents a company can have. Also referred to as policy and procedures manuals, these documents dictate the relationship between employer and employee, and most importantly, are actually written contracts. In the event of a dispute between employee and employer, the courts in California will enforce the terms stated in an employee handbook or policy and procedure manual – just like a contract.
In order for the handbook to be enforced in the context of a legal dispute, a copy of the handbook must have been distributed to the employee, the language must be specific, and the terms enforceable.
There are many reasons employee handbooks are important, however, there are two critical reasons employee handbooks are so important: 1) wrongful termination lawsuits, and 2) protection of intellectual property, company secrets, and proprietary information.
The bottom line is any company who has employees, regardless of how big or small, needs an employee handbook drafted by an experienced attorney.
Independent contractor operating agreements:
While I understand that these documents have been much maligned and misunderstood, there still are several important reasons any company who works with independent contractors needs to have a proper independent contractor operating agreement in place.
Even if the “contractor” is determined to be an “employee”, forum selection clauses, venue selection clauses, class-action waivers, mandatory arbitration agreements, may all be enforceable in a dispute. The bottom line is, these agreements are still critically important to any company working with subcontractors and still can limit your exposure.
I’m not specifically talking about “lease purchase” agreements that are often used by trucking companies to justify classifying drivers as independent contractors, but rather lease agreements such as when a holding company leases equipment to a trucking company, even if there is common ownership interest in the two companies. Anytime one company is leasing or renting anything to another company, there should be a formalized agreement in place.
Furthermore, if you are leasing office space, yard space or anything else for that matter, you need to be aware of what’s in that document and what all of the fine print means. These agreements should never be discounted or ignored.
These documents are usually, but not always, incorporated into any major contract. However, not all arbitration clauses are created equal, and if they’re not enforceable, they’re worthless.
Quickly, here’s a few reasons arbitration can be so beneficial:
Privacy: Arbitration is a private, generally confidential forum to resolve disputes. The court system is public.
Speed. Arbitration can move along quickly.
Decisions are Non-Appealable: there is finality with the decision
Control. Parties can control which rules apply
No Document Dumps. See below.
No Fishing Expeditions or Discovery Abuses. Endless, costly discovery disputes and abuses can be avoided in arbitration.
Certainty: How the dispute will be handled can be determined before the dispute exists.
Cost: Arbitration can be expensive, but can work to your advantage when dealing with an opponent who can’t afford the costs.
Non-Disclosure Agreements and Confidentiality/Trade Secret Agreements
Parting should not be “sweet sorrow”, but the last time you will ever have to cross paths with employees or contractors you no longer wish to maintain a relationship with. These agreements can be the perfect way to tie up loose ends so you never have to deal that special someone again.
Corporate By-Laws and all Corporate and LLC documents
This goes without saying: If you are a corporation or LLC, you MUST have all proper corporate documents in place.
Shipper-Carrier, Broker-Carrier, Shipper-Broker and 3PL Contracts
Whatever the situation, state of the art agreements can make or break your company. Also, depending on how these agreements are drafted, they can favor the trucking company, the broker, the shipper or forwarder. Make sure you have an agreement in place that benefits you!
Finally, I can’t stress enough that companies need to consider these documents to be investments in their business. I have numerous clients who have been saved hundreds of thousands of dollars by making sure they had the right documents in place for their business. Don’t get stuck in a dispute with no documents or bad documents in place.
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