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What legal rights do I have where an employer promised shares but did not deliver?

Trust is a big part of any deal, and  a situation where you’ve been hired and promised shares but never received any is a major breach of that trust. But does that trust translate into something legally binding, that when broken, gives you options for legal action?

 

The answer is in the details. When you say an employer has “promised” an employee shares, that can mean a few different things. If a verbal or oral agreement was made, it can be difficult to prove, even if it would otherwise be legally binding. If the shares were promised in a written agreement but never delivered, it can be much easier to force the employer to make good on the promise.


 

Verbal promises

Whether or not a verbal agreement is legally binding and enforceable depends on a number of important facts.

 

First and foremost is an employee’s ability to prove that a verbal agreement took place. This will require trustworthy testimony, and a clear reference to it in emails, messages, documents, journals, and so forth can be especially helpful. In cases like Druet v. Girouard (2012) (NBCA), email strings were accepted as verification of consent even when the electronic signatures themselves were disputed for not being totally accurate reflections of a person’s written signature. Supporting evidence lends weight, so don’t underestimate the importance of sifting through those emails!

 

Once the verbal exchange is proven to have taken place, the question becomes whether the elements of a binding agreement are present: an offer, acceptance, and consideration. That means there should be an identifiable exchange of something for the promise made, like money, or agreeing to accept a job in exchange for the promise of shares, to make the promise legally enforceable.

 

In the case of Fedel v. Tan (2010) (ONCA), Tan and Fedel started a new business together. They verbally agreed that Fedel would retain 60% ownership for organizing and administering the business, while Tan would retain 40% ownership for his financial involvement. Upon incorporation, Fedel received 100% of the shares issued, and Tan received none.Tan sued, and the judge looked at Tan and Fedel’s shared business history to determine that Tan had been entitled to 40% of the company. However, the judge decided against issuing shares to Tan. Because the business relationship between Tan and Fedel had been irreparably harmed by the dispute, ownership of shares in a closely held corporation would no longer have been a satisfactory result. The remedy instead was compensation.

 

So if you are entitled to shares, and can prove it, a court will still look at the particular circumstances to decide what the appropriate remedy will be, and this may not be the promised shares.

 

Written promises

If your employment agreement contains a provision entitling you to a particular number of shares at a particular point in time and you do not receive those shares, you may be able to bring an application in court to compel the employer to transfer the shares to you according to the terms of the employment contract.

Of course, this will not enhance the quality of your relationship with your employer! You are better off trying to use friendly channels to obtain the shares.

 

Stock Restriction Agreements

Before doing so however, you will need to look into the details of the contract. Often, employees or contractors will sign a stock restriction agreement. This contract usually provides that you are entitled to a certain number of shares that will vest over a period of time, for example X number of shares on July 20 each year, or X number of shares on the last day of each month. Until the shares have vested they are ‘restricted.’ Restricted shares can usually be redeemed (bought back) by the company at a very low price if your contract with the company is terminated, or if other trigger events take place (e.g., you are convicted of certain types of crimes). Often you are not entitled to vote restricted shares, and you may not be entitled to any dividends that have been declared. If you are terminated, you will not have a right to the promised shares if they have not yet vested.

 

 

Employee Stock Option Plans

Another common way for employees to believe they have been promised shares is under an Employee Stock Option Plan (ESOP). Your contract may entitle you to a certain number of options per year, or you may only be eligible to receive options if the directors use their discretion to grant options to you in any given year. It is important to check the fine print of the plan to determine what you are entitled to.

 

Once you have been granted options you will be able to exercise them to purchase shares at a set price. You will likely only exercise this option if the share value is at or above the purchase price. Note that the options will have an expiry date and many plans will specify that the company has the right, but not the obligation, to buy back any shares purchased under an ESOP if the employee’s contract is terminated for any reason.

 

To see standard versions of the agreements discussed in this article, visit our Small Business Law Library!

This blog was co-written by Alina Butt.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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What legal documents are required to connect an inventor with an investor?

Startups depend upon funding, so preparing the right documents can help you obtain the funding you need.

Due Diligence

No matter what stage or type of funding is at hand, the biggest thing that all investors will be concerned with is the quality of the investment. This means assessing any and all risks, whether they are legal, financial, or market-based. A company can make this process smoother by preparing, collecting and organizing the appropriate information. To attract an investor,the company should also properly prepare a few key documents that can assure the investor that the investment is a sound one, and that the company is well-run.

Minute Books

The Minute Book is the official record of the company’s activities. It should include all directors’ and shareholders’ resolutions, corporate bylaws, articles of incorporation and any amendments to the articles, corporate registers including a register of directors and shareholders, share register, subscription agreements, the form of share certificates, the shareholders’ agreement (if there is one) and copies of all major contracts. Investors will want to inspect the Minute Book to ensure that all corporate actions have been properly authorized. It is important to keep the Minute Book up to date and organized.

Term Sheet

A startup should provide a term sheet, otherwise known as a letter of intent. This is a non-binding document meant to lay out the big-picture terms and conditions of the potential investment. This means outlining the structure of the investment, including a timeline for funding as well as the transfer of shares and equity (or other securities) to the investor. Specifications about board structure and responsibilities of the investor can also be included, as well as any substantial points to be included in a future shareholders’ agreement.

Share Subscription Agreement  

If the deal has progressed and the investor is ready to invest in the company, a share subscription agreement will be required. This is the agreement that contains the terms of the deal between the company and the investor—how many shares, at what price, at what time, for what form of payment. Depending on the investor, the company may be required to provide representations and warranties that the startup has no existing undisclosed loans, liabilities, material agreements, or ongoing litigation, and that the agreement will not cause the company to breach any of its other agreements. The subscription agreement also typically contains a statement of the type of exemption being relied upon to exempt the transaction from prospectus requirements under the applicable securities laws.

Shareholders’ Agreement

Now that the investor is a shareholder and interested in how the company is being managed, they may wish to have a shareholders’ agreement in place. The shareholders’ agreement is a flexible instrument that can (among other things) protect the shareholder’s representation on the board, limit the board’s ability to make certain decisions without shareholder approval, or protect the shareholders by giving them preemptive rights when more shares are issued in the future. Many minority investors will want to ensure that the shareholders’ agreement protects their rights and investment.

To see standard versions of the various documents and agreements discussed in this article, visit our Small Business Law Library!

This blog was co-written by Alina Butt.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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How Do I Legally Protect My Mobile App?

Everyone is looking to offer that next top-selling app, but it’s not as easy as it looks. First, you have to come up with an idea that is innovative and hopefully not already taken. Once you have that idea in mind, the next hurdle is bringing that idea to fruition while avoiding theft of your hard work. Here are some tips on how you can protect yourself.

 

Tip #1: Prepare a Non-Disclosure Agreement

 

One basic way to protect yourself is to have a standard non-disclosure agreement prepared. To get your ideas rolling, you will have to work with many different people. It is fantastic if you can only work with people you trust, but usually that’s not the case, so don’t take any chances! A non-disclosure agreement will require anyone who works with you to discuss your confidential information only with those who need to know the information, such as yourself and team, and to not share the information with anyone else.

 

To strengthen your protection, consider a non-competition agreement as well. Unlike a non-disclosure agreement, which protects confidential information from being shared, adding a non-competition agreement would prevent anyone who has worked with you from competing against you to build the same kind of app. This agreement would be particularly useful when your ideas are in the early stages and can be easily recycled by others in other areas.

 

Check out a sample Non-Disclosure Agreement here!

 

 

 

Tip #2: Keep Records of All Your Work

 

When a dispute arises, the first thing that the court looks at will be your records. What this means is that you need to take notes and make records of everything you do. Intellectual property claims are not easy to prove and evidence is limited so it doesn’t hurt to leave a trail along the way. Make sure that your team is also doing the same. You would be surprised at how far a little note can go and it is the easiest way to protect yourself during any lawsuit.

 

 

Intellectual property can also be legally protected. What you must first do is decide what kind of protection you need and then decide whether you would like to register/apply for protection in one or more of these areas. Although formal protection via registration or application may not necessarily be required, it can help to (i) evidence the fact that you own the idea and (ii) provide notice to any other app developer who may also be thinking of the same idea. There are three areas of intellectual property law that you should be familiar with (consult a lawyer to find out what type of protection is available in your situation):

 

  • Copyrights protect original creative works of authorship, such computer programs in a fixed medium. Keep in mind that a copyright does not protect each and every element of the work. A copyright only prevents a person from copying constituent elements of the work that are original.

    The length of a copyright is the life of the author and 50 additional years.

 

  • Patents protect new inventions and may take some time while you’re in the process of working on your app code or software. Patents are for socially-valuable products and the disclosure of how an invention is made can help other entrepreneurs to create different and non-infringing inventions. One drawback is that patents can be expensive, but may apply for up to 20 years.

 

  • Trademarks protect words, names, and other symbols which are used to distinguish your app or services. Others are restricted from using the trademarked items for another business, especially if there is a possibility that it will confuse customers about the products or services that are being provided. Trademark protection lasts for 15 years and can be renewed.

 

  • IP Transfer  is the most common way to protect your intellectual property. Generally, company founders will have their employees, developers or other inventors involved in the creation of a product/service sign an IP Transfer Agreement. The Agreement’s purpose is for employees, developers, and or inventors to permanently transfer all their intellectual property rights associated with the product/service to the company. Click the link below to view Clausehound’s standard IP Transfer Agreement.

 

 

The Clausehound Small Business Library contains a variety of agreements that can be used to help protect your intellectual property rights!

 

Tip #3: Don’t be intimidated!

 

Creating a new app is incredibly overwhelming and the fear of having all your hard-work taken away from you surely doesn’t help. Start with a non-disclosure agreement and take careful notes. As your app takes form, consult a legal expert on what you need to do next. Then focus your creative energies on developing the next brilliant app!

 

This article was co-authored by Vi Vo.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Can a Founder Legally Promise Equity in a Company that Doesn’t Yet Exist?

Serial entrepreneurs are constantly coming up with the ‘next big idea’. During the excitement of starting the process of building a business, incorporating might not be the first thing on an entrepreneur’s mind. Employees might be promised shares in a corporation that doesn’t even exist. Can the employees enforce this promise?

 

Contractual Promises Made Pre-Incorporation

 

An oral or written agreement promising to provide equity in a company that has not yet been incorporated can be considered a valid agreement.

 

In Fedel v Tan, Tan entered into an oral agreement to provide 40% equity to Fedel in their new seaweed derivative company that had yet to be incorporated. The company was incorporated one year later, with Fedel and Tan as directors of the company. 100% of the shares were issued to Tan, however, Tan had promised that Fedel would still receive 40% of the equity. Fedel continued to work as vice-president of the parties’ company. 10 years later Fedel argued that he was entitled to the 40% ownership interest promised by Tan. The court held that the oral agreement made pre-incorporation was a valid agreement, as the parties’ actions proved that the parties intended to be partners in their company, each holding equity in the company.

 

 

Benefits of Incorporating Immediately

 

Although parties can create binding vesting contracts prior to incorporation, there are a number of benefits to incorporating a business immediately:


 

Investors: When searching for investors to invest in your next big idea, they will be looking to invest in a legal entity, rather than financing individual founders. It is a good idea to have the company incorporated before looking for investors and funding.

 

Employees: Founders may decide to pay new employees out of their pocket prior to incorporation. However, hiring employees by a legal entity can result in tax benefits, and IP assignment from the employee to the company. Furthermore, it eliminates the additional step of entering into a second employment agreement after incorporation.

 

Intellectual Property: If you are coming up with the ‘next big idea’, it is likely that you will have some IP to protect. It is also likely that you will want the IP to be the property of the company, and not individual founders. Incorporating the business will protect the IP of the company and will ensure that IP is assigned to the legal entity. Incorporating early is also a good idea where founders want to protect their unique company name.

 

Check out Clausehound’s Small Business Law Library for standard incorporation documents, such as Articles of Incorporation!

 

 

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Are All Arbitration Provisions in an Employment Agreement Enforceable?

Whether a particular arbitration clause will be enforceable depends on the way in which the clause is drafted. Generally speaking, if (i) the clause is clear, (ii) arbitration is made mandatory, and (iii) the contract can otherwise be enforced, the arbitration clause will be enforceable.

 

Source

 

Arbitration Provisions

It’s best to start with a brief rundown of what arbitration provisions should include. A basic arbitration clause will be an agreement between the parties to use arbitration instead of the courts in the event of a dispute. The clause should be broad enough to cover all types of disputes and questions of interpretation of the contract. If the clause is not broadly worded, one of the parties could argue that the particular dispute was not within the scope of the arbitration clause.

 

The clause should either specify the following details, or incorporate a set of arbitration rules that provide for such details as:

  • how many arbitrators will be chosen to decide the matter;
  • how an arbitrator is to be chosen (both parties must agree upon someone, and if they are unable to reach a decision within a specified time frame, a mechanism must be in place for the choice of an arbitrator);
  • the rules of the arbitration process (there are many standard sets that can be referenced—for example, see the ADR Institute of Canada’s Arbitration Rules);
  • the seat or location where the arbitration will take place;
  • the language to be used during the arbitration process; and
  • the applicable governing law and jurisdiction.

 

Check out Clausehound.com for sample arbitration clause language!

 

Unenforceable Arbitration Clauses

There are two main reasons why courts have held arbitration clause to be unenforceable – bad drafting and matters of public policy.

Source: Jérome Dessômmes – ÉCRIVAINS CONSULT/Wikipedia

 

Bad drafting

If the arbitration clause creates too many ambiguities, or if arbitration is not clearly mandatory, the  bad drafting of provisions may cause the clause to be unenforceable.

There are a few main areas of concern that have been identified by the courts:

  • The arbitration process and procedure should either be written with great detail to avoid the possibility of either party claiming their obligations were unclear, or reference should be made to a recognised set of arbitration rules which themselves contain this detail.
  • To convey obligation and enforceability, mandatory language should be used in the provisions instead of optional language (for example, using “shall” or “must” instead of “may”).
  • Time periods need to be specified (in the contract or in a set of arbitration rules) for when notice of arbitration should be given, how much time is to be given at each step of the arbitration process, and by when the process should be completed and a decision given.

 

 

Public policy

Sometimes an arbitration clause can run afoul of public policy. This has been especially true in the United States, notably in situations where there is a great inequality of bargaining power between the parties to the contract.

 

One concern expressed by American commentators relates to the cost-effectiveness of arbitration. An examination of case law by Wigdor LLP in New York discussed how arbitration provisions can be invalidated if the costs involved are excessive in a way that “could preclude a litigant from effectively vindicating [his or her] federal statutory rights in the arbitral forum.”

 

Another point of growing concern relates to how arbitration can create, as National magazine puts it, “an alternate system of justice” that more often than not rules in the company’s favor and leaves litigants feeling like they have not rightfully received their day in court.

 

To see standard employment agreements and arbitration provisions, visit our Small Business Law Library!

 

This article was co-authored by Alina Butt.

 

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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How Can I Prevent Employees from Posting Material on Behalf of my Company?

Links from this article:
Source
NDA
Small Business Law Library

During World War II there was an expression designed to keep people from sharing seemingly unimportant information with others, especially in public places: “Loose lips sink ships.” Today that public space is the internet, and the “loose lips” of employees can quickly tarnish a company’s reputation or divulge confidential information. The key is to make it very clear that the company has specific expectations about how employees will (or will not) communicate online about the company.

 

Source

 

The informal approach 

The simplest way to make your expectations clear for your employees is to meet with them face-to-face and let them know their obligations and responsibilities. It makes the imperative personal and serious. There’s nothing more crystal-clear than looking them in the eye and telling them whether they can or cannot talk about certain things outside of work, and if they can, what the parameters are for sharing information approved to be released.

 

 

This is most effective if timed correctly. It makes the most sense to inform employees about such expectations shortly after hiring them. If you wait too long, they won’t realize that their conduct and the habits they have formed are in breach of your expectations. One systematized way of debriefing employees is to send out an informal information letter. You can use this to:

  • Remind employees of their responsibilities to the company relating to confidentiality and what information they can and cannot share, and in what ways
  • Remind employees they can’t share such information with anyone, including friends and family, and especially not the Internet—at least not without prior approval
  • Specify how long this obligation is to survive, be it forever or just until the end of their employment

 

Implement company guidelines

It’s a good idea to more formally write down and disseminate a company-wide policy that describes the company’s policy and guidelines on what constitutes acceptable or unacceptable sharing of information and representation of the company outside of work.

 

Making an electronic copy of the guidebook available on every employee’s computer and drawing it to their attention ensures that an employee can’t say you never told them or they had no way of knowing!

 

Source

 

Set it in (contractual) stone

If you really want to make sure your employees are under a legal obligation to do nothing that could tarnish the reputation of the company, include language in the employment contract requiring employees to adhere to the company policies as revised from time to time.

Include confidentiality and non-disparagement clauses in the contract, or have them sign an NDA. Make sure these clauses include express provisions that forbid discussion of the company or company business on social media or with the press, without express authorization by the company.

 

To see a standard employment agreement, visit our Small Business Law Library!

 

Conclusion

The threat of dismissal for breach of their employment contract is likely the best incentive when it comes to encouraging employees to uphold their employer’s image on the internet. Setting clear expectations early on can save everyone much grief—and keep loose lips from sinking the company ship.

 

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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What legal steps do you need to go through in order to start a business?

Source

 

A while ago Forbes published an article titled, “10 Big Legal Mistakes Made By Startups.” It’s quite informative about what you need to do to start a business, but also quite long. We took the liberty of reading it for you and boiling it down to a few of its most important points, and they all come down to one thing: making sure you have the right contracts in place.

 

Don’t hesitate to incorporate.

In the words of Chris Griffiths from The Globe and Mail, “For most businesses, the question is not if, but when to incorporate.” Be sure to consult a lawyer to help you draft articles of incorporation that are suited to your needs. Standard incorporation documents, such as corporate by-laws, can also be found in Clausehound.com’s Small Business Law Library! Check out a sample here:

 

It’s not as taxing as you think.

The way you structure your business can impact the amount of taxes you pay. If done right, you can come away with more money and less worry, especially if your company qualifies as a Canadian Controlled Private Corporation (CCPC). This is because corporate tax rates are lower than personal tax rates, so keeping excess money in the company can be highly advantageous. Keep in mind that these more specific issues of taxation and tax registration should be explored thoroughly with an accountant before making any decisions.

 

There’s tons of ways you can get qualified advisors involved!

How you structure your business can also determine the amount of liability that rests on your shoulders.

In smaller businesses, shareholders often play a bigger role. By using a unanimous shareholders’ agreement, they can place restrictions upon the powers of the board of directors, though in the process shareholders can take on more liability. Another way to get good people involved if liability is a concern for someone wanting to be on the board is to have them take an advisory role.

 

If you like it, put a contract on it.

Once the company is established, it’s a field day in terms of hiring. If you find someone you really want you should treat them right and get them settled into the workplace with a proper employment agreement. Businesses have been wrecked in the past over ambiguity about employment status and wages, so sorting that out through highly specific offer letters, stock option grants, and employee handbooks should offer good protection and build better work relationships.

 

Have standards.

When jumping headfirst into a new business, it’s a good idea to have a standard sales contract or customer agreement to shop around. A sound contract will streamline negotiations with customers—you’ll know exactly what points you’re willing to budge on or not. You don’t have to start from scratch. Find one already in circulation and modify it to make it your own. Consult a lawyer to be sure you have covered the essentials.

 

These should all be on your checklist. A new business starts in a very turbulent environment, and setting up solid contracts will help make the whole process easier to navigate.

 

To see some standard versions of the contracts discussed in this article, visit our Small Business Law Library!

 

This post was co-authored by Alina Butt.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Emailgate: How an NDA is Affecting the Presidential Election

About a week ago, the Federal Bureau of Investigation announced that it would not be pressing charges against Hillary Clinton for her use of a personal email during her tenure as Secretary of State. This has been a long time coming for Clinton, as the email controversy has been a blight on her presidential campaign from its start.

Source

News of “Emailgate” broke in 2014, and picked up last year right before Hillary Clinton announced her run for president. It has dealt a huge blow to her trustworthiness and transparency, with a Morning Consult national survey from this month finding that “half of voters said Clinton’s use of a private email server was illegal.” Those are dangerous numbers for the Democrats, leaving voters finding Donald Trump twice as honest as Hillary Clinton according to a recent Rasmussen survey.

If you still don’t really know much about the controversy, here’s a quick rundown:

Being the Secretary of State involves handling sensitive information, and it was discovered that during her tenure, Hillary Clinton used a series of personal email servers that were nowhere near as secure as federal record systems would have been. This left her correspondence vulnerable to being compromised by the likes of hackers and foreign countries, and people are not happy about that.

At the heart of this controversy lies the fact that Hillary Clinton had signed a Classified Information Nondisclosure Agreement.

 

Source

 

Confidential information, or classified information as per this agreement, was given a clear definition as being marked or unmarked. Specific obligations related to confidentiality were outlined, such as protecting such information “in the interest of national security.”

 

Hillary Clinton has pushed back at the controversy in true political fashion, skirting the issue by saying first that she never handled any classified information over email, and then that she had not known some content was classified because it was not marked as such. But the first point was disproven by the FBI, and the second is explicitly covered in the agreement.

She also tried to dampen the blow of the scandal by pointing out that most other Secretaries of State before her had utilized personal emails as well, but status quo is no good defense against contractually agreed upon obligations related to confidentiality.

 

Source

 

All of this leaves Hillary Clinton in a position to be either criminally charged for violating federal law, or to receive administrative discipline for wrongdoing in her position as Secretary of State. As she no longer holds that position, discipline is not a viable option. As for the former, neither the FBI or the Attorney General are willing to press charges.

 

So, if a substantial portion of the public finds her conduct criminal and legal violations did occur as per the agreement she signed, why is she (so far) getting away scot-free?

 

Here it’s a matter of nuancing the law. The FBI intimated that there was definitely evidence of wrongdoing that amounts to the actus reus, and went so far as to chide her for her actions, describing her conduct as “extremely careless.” Hillary Clinton admitted just as much when she said that in hindsight, she should have had a separate work email. However, she simply does not meet the requirement for intent, or mens rea, of having “intentionally transmitted or willfully mishandled classified information” beyond a reasonable doubt.

 

Without substantial evidence of such intent, a court cannot convict her. Without full confidence that a court can convict her, it would be dangerous to press charges against a woman who is no longer just a former Secretary of State, but now the presumptive nominee for the Democratic Party in the rapidly approaching presidential election. Such a move would have enormous, and potentially disastrous, consequences for the country.

 

Click here to view our Non-Disclosure Agreement template in our Small Business Law Library!

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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