LEADING BY READING

By G. A. Finch

It may sound trite but it is generally true that “leaders are readers.”  That is not to say that an uneducated person cannot be a leader in his or her own way; nevertheless, reading has its advantages. We have read or heard that Bill Gates, Oprah Winfrey, Warren Buffett, Elon Musk, Steve Jobs and Mark Zuckerberg, among many other successful business people, are/were avid readers. Presidents John Adams and Thomas Jefferson read books as far into old age as they physically could and prized their personal libraries. Benjamin Franklin valued books so much that he created the first lending library in America, and we know what a wise and accomplished man he was.

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More recent presidents, like William Jefferson Clinton and Barack Obama, are known to like to pick up a book.  Whatever your politics may be, Clinton and Obama sound erudite, do they not?  Their knowledge enables them to sound more persuasive and sound more credible, does it not?  An effective executive seeks to become well read by reading often and reading a variety of genres.

Comparable to reading, but not as much as a deep-seated learning and not, I believe, as satisfying, would be listening to audio books and podcasts and watching substantive videos.  In reading, you have time to ponder, contemplate, linger over and ultimately process the content.  One’s listening to audio or watching videos constitutes a more passive brain activity than the act of reading.  It is, of course, better than no learning activity.

The most cerebral people I know voraciously read books and periodicals.  They are well versed on many topics and subjects and are able to connect them, contrast them, 12386-an-stack-of-old-books-isolated-on-a-white-background-pvcompare them, analogize them, extrapolate from them and meaningfully unpack them.

The act of reading or listening to books is the intention and commitment to learn new things and to be in a continuously learning mode –   kind of like a continuing liberal arts education.  Especially now, the  intention-and-commitment-to-learn mode has become imperative given that the rate of expansion of knowledge and innovation seems to double whether in hours, weeks, months or years depending on the field.

My base technology knowledge as a 15-year old was rather primitive and quaint compared to my 15-year-old son who knows how to put together a computer from off-the-shelf components and to program a robot.  He reads articles and blogs on the internet and watches YouTube videos when he wants to learn how to do something.  That is useful learning.  However, he and my teenage daughter and most other teenagers I know do not do enough reading of books, let alone wide and deep reading of books.  I fear their writing and critical thinking skills and broad base knowledge could suffer.  My base general knowledge as a teenager was far greater than theirs is.  I attribute this gap to the fact that I had read many more books by their ages.13728-a-smart-girl-with-glasses-holding-a-book-pv

By reading, you learn how to write better by seeing word usage, different vocabulary, grammar, punctuation and syntax and hearing in the mind’s ear the writer’s voice.   As I alluded earlier about being well versed, by reading you also know more about different topics to inform your professional or social conversations with others.  It can make your conversations more interesting.  Moreover, by reading you bring to bear more knowledge to understand and solve problems and ask the right questions in your work whether it be professional or volunteer work.  When you face industry disruption, must be a change agent, or need to reinvent your business or yourself, your store of knowledge from reading will come in handy!

For those for whom reading does not come readily because of lack of habit or interest, or busyness, the trick is to approach it like starting any new program (like physical exercise or learning a new language): begin lightly with 15 minutes a day and incrementally work your way up to a robust hour.  You may just remember or find what you have been missing all these years: the joys of reading.  You will certainly grow smarter.  Oh, and by the way, if you have trouble falling  asleep at night, start reading a book; it is quicker and healthier than a sleeping pill.

 

Copyright © 2017 by G. A. Finch, All rights reserved.

NON-CIRCUMVENTION AGREEMENTS

BY G. A. FINCH

 

This post is for those executives and professionals who have left their organizations  for one reason or another and are bursting with great ideas for business opportunities.  We have all heard stories from people who lament that “my business idea was stolen from me” or “this person I trusted cut me out of the very deal that I conceived.” anger-svg-med A well drafted non-circumvention document could have protected them from such shenanigans.    A non-circumvention provision or agreement is designed to prevent a party from taking an opportunity or idea brought to this first party by a second party and then doing an end run around the second party to a third party. football10Typically, the second party expects to engage in or execute some kind of commercial transaction together with the first party in relation to some third party.

The non-circumvention can also be mutual so neither party can go around the other using the information obtained from one another.  The third party could be a prospective seller, customer, client, vendor, supplier, investor, inventor, etc.  As the opportunity or idea is usually considered proprietary and confidential, the non-circumvention agreement is often used in conjunction with a non-disclosure/confidentiality provision.  Sometimes for good measure, companion non-competition, non-solicitation and no-grant-of-license provisions may be added.quiet-1

What does a scenario for non-circumvention look like?  One of my clients was negotiating with an investor to fund an acquisition of unique assets that had tremendous upside value and the client inked an agreement that prevented the investor from directly acquiring the assets from the seller without involvement of my client.  A confidentiality provision was also included in the agreement.

What does a non-circumvention provision look like?  Here are two examples:

  • “Non-circumvention. The Receiving Party and its officers, employees and directors will not make any effort to circumvent terms of this Agreement in an attempt to gain the benefits or considerations granted to it under this Agreement by taking any of the following actions:    The Receiving Party will not in any way use, sell, transfer, develop, market, finance, or invest in directly or indirectly, through its owners, shareholders, directors, advisors, employees, subsidiaries, agents or other parties under its direction or control, any product or  service that contains or uses the Confidential Information.”

 

  • “Non-circumvention. Receiving Party agrees that it shall not, either directly or through any third party, enter into any contract, joint venture, partnership, business arrangement or otherwise conduct any business whatsoever with any person regarding the Transaction without the written consent of Disclosing Party.”

 

The upshot in your business dealings is create trust but construct protection.  content_tn-smiley-face A non-circumvention agreement is a building block of protection.

 

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Copyright © 2017 by G. A. Finch, All rights reserved.

POWER WORD PLAY (A Term, Word, or Concept an Executive Ought to Know): MORAL RIGHTS

BY G. A. FINCH

To the uninitiated, the term “moral rights”, would at first blush (pun intended), seem to suggest having something to do with bad character, improper behavior or religious and philosophical subjects.

Actually it has to do with intellectual property rights of an author, artist, or creator beyond mere copyright interests.

Moral Rights is beginning to appear more often in employment agreement provisions pertaining to intellectual property rights.  The employer usually seeks to obtain a waiver of the employee’s moral rights to works subject to copyright which works are made by the employee within the scope of employee’s employment or using employer’s resources or confidential information.

It is a European legal concept and not rooted in American jurisprudence, although similar and analogous concepts have been asserted or litigated in the United States from time to time.  I believe burgeoning multinational corporations and global trade have facilitated the infiltration of moral rights provisions into American legal documents. The American version of moral rights became codified as the Visual Artists Rights Act of 1990 (VARA) pursuant to the mandates of the Berne Convention.

VARA provides that the author of visual art has the right:

 

A) to claim authorship of his work,

B) to prevent the use of his name as author of any visual art that he did not create,

C) to prevent any intentional distortion, mutilation or other modification of his work that would prejudice his honor or reputation,

D) to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of the right.

 

Under VARA, only the author of the subject visual art has these rights whether or not the author owns the copyright. VARA does not provide moral rights for authors of literary or musical works.

Black’s Law Dictionary sets out the most succinct global definition of Moral Rights:

“Moral rights include rights of (1) attribution (also termed “paternity”): the right to be given credit and to claim credit for a work, and to deny credit if the work is changed; (2) integrity: the right to ensure that the work is not changed without the artist’s consent; (3) publication: the right not to reveal a work before its creator is satisfied with it; and (4) retraction: the right to renounce a work and withdraw it from sale or display…”  Black’s Law Dictionary, p. 1030 (Eighth Edition, 2004).

 

INTERNAL REVENUE CODE SECTION 409A

 

BY G. A. FINCH

If your employment agreement has deferral of compensation provisions, you may very well see a section or paragraph captioned “Internal Revenue Code Section 409A” or simply “409A.”  Its official citation is 26 U.S. Code Section 409A – Inclusion in gross income of deferred compensation under nonqualified deferred compensation plans.

This section is too complex and tedious for most lay person executives to understand and figure out.  Your reading Section 409A of the IRS Code is certainly an instant cure for insomnia.080914_jmanscratchhead_tnb

At the outset, before you execute an employment agreement, your retaining an attorney is necessary to interpret and apply Section 409A to the various scenarios of deferral of compensation to ascertain whether such compensation adheres to Section 409A’s deferrals and distributions timing rules.

Failure to comply with the rules concerning deferred compensation has onerous consequences of 1) inclusion of such deferred compensation as gross income for the subject taxable year, 2) payment of the amount of interest on the underpayments, and 3) a penalty amount equal to 20% of the deferred compensation which is required to be included in gross income.IRS_tnb

Accordingly, employers often have a Section 409A provision in the employment agreement that allows the employer to adjust payments under the agreement to comply with Section 409A and allows the employer to disclaim any liability to the employee.

A typical provision can be lengthy paragraphs and include some language like the following:

 

“Anything in this Agreement to the contrary notwithstanding, the parties intend that   all payments and benefits under this Agreement comply with Section 409A of the Code and the regulations promulgated thereunder and, accordingly, to the maximum extent permitted by law, this Agreement shall be interpreted in a manner in compliance therewith.  To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extend reasonably possible, maintain the original intent and economic benefit to you  and the Employer of the applicable provision without violating the provisions of Section 409A.  Notwithstanding the foregoing, the Employer shall not be required to assume any increased economic burden in connection therewith.  Although the Employer intends to administer this Agreement so that it would be exempt or comply with the requirements of Code Section 409A, the Employer does not represent or warrant that this Agreement will be exempt from, or otherwise comply with, Code Section 409A or any other provision of applicable law.  Neither the Employer, its affiliates, nor their respective directors, officers, employees or advisers shall be liable to you (or any other individual claiming a benefit through you) for any tax, interest, or penalties you may owe as a result of compensation paid out pursuant hereto, and the Employer shall have no obligation to indemnify or otherwise protect you from the obligation to pay taxes pursuant to Code Section 409A.”

 

The point of this blog post is that your deferred compensation provisions could trigger 409A tax consequences and your employer, through its employment contract with you, is shifting the risk to you as employee.

I WROTE IT SO WHY CAN’T I USE IT?

BY G. A. FINCH

You are leaving your job or you have already left. After you leave, you want to use all of your power point presentations, white papers, newsletter articles, and blog posts that you did for your employer. Not so fast. Are you allowed to do that? Who owns the written work that you produced? Increasingly I am called to advise incoming or departing executives and professionals on how to preserve and protect their intellectual property rights or understand how to avoid violating the intellectual property rights of their former employers. This post focuses on copyrights, not trademarks or patents or trade secrets.

quill_writingYou need to know the copyright laws. You also need to know what confidentiality/intellectual property agreements you may have signed either in an employment agreement or in a separation/severance agreement or both.

The basics for a copyright are:

  • A work must be original
  • A work must be completed and in tangible form like a written article
  • A copyright holder has the right to reproduce, to distribute, to modify the work, and to perform or display it
  • A copyright holder does not have to register his\her\its work to gain copyright protection and does not have to display the copyright symbol

An employee should note well that ordinarily the employee’s work authored within the defined scope of employee’s employment constitutes a work made for hire. Although the employee physically created the work, the employee may not own it, rather the employer does. Most savvy employers will eliminate any legal ambiguity of copyright ownership by having the employee sign intellectual property and invention assignment agreements.

Although they can vary in length from three sentences to two pages, an assignment of intellectual property provision typically looks like the following:

“ASSIGNMENT OF INVENTIONS. I agree that I will promptly make full written          disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company ….”

no_copyrightPrior to commencing employment, an employee would do well to carve out in a written agreement any invention, original works of authorship, etc. to ensure such work product or invention is not assigned or deemed owned by employee’s new employer. Also prior to any departure, the employee should set out in an agreement what works employee created that were not created on the job or are not assigned to the company.

When the employee does not own the written work employee created, the most obvious and practical thing to do is simply ask permission from the previous employer.

Lastly, there is a limited way to use copyrighted material without permission and not infringe. This way is called “fair use.” For example, if you fairly and reasonably use a short quote and credit it for commentary and criticism, news reporting, teaching, research or parody, you are probably okay. The evaluation includes whether your use adversely affects the market for or value of the work. When in doubt, consult an attorney.

FIVE SUCCESS LESSONS FROM MOM

BY G. A. FINCH

My mother, Louise Antoinette Finch, passed away last month just two and half months shy of her 100th birthday. She is survived by all six of her sons and one daughter. As an older brother gave a eulogy and the priest gave a homily about my mother and what she represented spiritually, I ruminated about her legacy and the impact of her teachings. Although we are far from perfect as individuals and have had our own share of ups and downs, and some of the siblings may be viewed as more materially successful than other siblings, she obtained the same result from each of her children: all finished college and graduate or University_hatprofessional school. How did she do that? She had a few maxims to live by that she drilled into us. These aphorisms would benefit anyone (executive, professional, and others) seeking to get a leg up in life. I share five of the most salient ones below:

1. When you start something, whether it is a project, a task, a job, an extracurricular activity, or a degree program, you must complete it. My mother abhorred quitters and lack of follow through. She correctly knew that the lack of follow through was a serious impediment to success. So despite unfair teachers, mean camp counselors, arbitrary coaches or a tedious activity, we had to finish whatever program we started. To this day, my siblings and I talk about the little voice in our heads, when times got tough in medical, graduate or law school or in a demanding job, that repeated the mantra: “When you start something, you must finish it.”

2. When we complained of being sick, whether severely or lightly, real or imagined, my mother would say, “Get up, wash your face, brush your teeth, put on your clothes, eat some breakfast, go to school, and, if you are still feeling lousy, then call me.” By the time we did all those things, our ailments seem to Smile Face with Colddisappear or become sufficiently mitigated that we forgot that we were physically or psychologically under the weather. This was her ways of saying a) have a strong work ethic, b) “show up” to where you are supposed to be, and c) adjust your attitude. This anti-slacker and anti-lazy approach again carried me and my siblings through many a school and work day.

3. Surround yourself with quality people and people of integrity. Your friends and peers will make or break you and you will be judged by the company you keep. I think of the hyper academic high school that I was fortunate enough to be able to attend; the super intellectual students forced me to up my game and pull myself up from the mud of mediocrity. Counterintuitively, I did not find the competitive atmosphere intimidating because it actually inspired and stimulated me. My siblings and I have never gotten into serious trouble or arrested because our friends are sensible and have a lot of impulse control.HandcuffsMany a prison inmate laments associating with the “wrong crowd” or corrupting friend that landed him in jail.  In short, choose your friends, associates and peers very carefully.

4. Don’t lie or cheat. Being an honest person meant a lot to my mother. A person of character was the benchmark by which my mother evaluated people. She had an expression, “Pretty is, is as pretty does.” A variant was “Pretty on the inside is more important than being pretty on the outside.”

5. Lastly, my mother was a big one in standing up for yourself when another is perpetrating a wrong upon you or a family member or trying to diminish you or a family member. Mom taught us not to look for fights but not to allow ourselves to be victims. She led by example and did not wait around for my father to get home to go address an injustice at any level or push us out the door to face a bully.Boxing_glovesShe made it clear that this attitude and posture must be based on our position being legitimate and righteous as well as our being without fault.

 

Often times you do not have to travel far to learn self-evident truths; they can be found within the four Home-clipartwalls of your own upbringing without ever stepping outside your own front door. I hear my mother’s voice as I counsel my young daughter and young son about how to stand up to bullies and admonish them to finish their activities.

Resolution Passed Thanking G. A. Finch

PRECKWINKLE AND COUNTY BOARD HONOR FINCH

PRECKWINKLE AND COUNTY BOARD HONOR FINCH

Cook County Board President Toni Preckwinkle today, October 23, 2013, presented her Chief of Staff, G.A. Finch, with a resolution thanking him for his service to the County.

On November 1, Finch is leaving Cook County to rejoin his law firm, Hoogendoorn and Talbot, LLC.

Finch accepted the position, he said, because he thought he could make a difference while learning new skills to take back to the private sector.

Finch brought significant experience to the County, having served as a City of Chicago Deputy Planning Commissioner in Mayor Harold Washington’s administration and as the General Counsel for the Chicago Housing Authority. His combination of experience in the public and private sectors made him a valuable asset to the administration, where he played a key role in the President’s continued transformation of County government.

Most recently, Finch worked closely with the President and her team to help craft both County and Forest Preserve District budgets without tax, fine or fee increases.

“I’m grateful to G.A. for his service and dedication to Cook County,” President Preckwinkle said.