German court decides Parents can’t access deceased child’s Facebook account

Facebook

A German appeals court has decided that the Facebook account belonging to a deceased minor cannot be accessed by the deceased minor’s parents, according to German business website Handelsblatt. A couple in Berlin sued for access to the Facebook records of their daughter after she was killed by a subway train in Berlin, hoping to find clues as to the events leading up to her death. They were particularly interested in the chat records, which they thought might provide clues as to whether the daughter’s death might have been a suicide.

The lower court decided for the parents, determining that the Facebook account was part of the deceased minor’s estate. In deciding to appeal, Facebook, the subject of much criticism in Germany for its handling of data privacy, found itself in the unusual position of defending those same rights. The appellate court decided against the parents, and refused access. It appears likely that the parents will appeal the decision.

In the United States, Facebook generally does not allow parents access to a child’s account, deceased or not. Facebook does allow parents to request that the account be terminated, rather than leaving it online in “memorialized” mode, and in rare instances Facebook will honor requests for account data by parents or other authorized individuals.

At the rate we’re going, we’ll soon be traveling with books and cassettes

IMG 1917

Let’s not go here again

As I watched the luggage carousel spin slowly around I was pretty well aware what I would see there – nothing, or at least nothing which belonged to me. We had barely made our connection in Frankfurt, after circling for hours, and the only thing which made it through to Philadelphia was a cat. I don’t even like cats.

No problem, right? We could just run out and buy luggage on the airline’s dime.

Or not. Airline liability for lost or damaged baggage on international flight is regulated by a treaty called the Warsaw Convention, which limits airline liability for checked baggage significantly. According to Delta’s website, that’s $9.07 per pound up to a maximum of $640. Normally the answer is simple – if it’s valuable, don’t check it. The proposed ban on laptops and tablets for flights to the US from Europe, however, adds a new wrinkle to that otherwise simple advice, since most business travelers don’t really have an alternative to traveling with a laptop. Most road warriors won’t be terribly happy about seven to nine hours of lost work time, to say nothing of that low-res airline entertainment. They’ll be even less happy if they can’t retrieve the laptop at the end of that long flight.

The bigger issue, of course, is security. A lost laptop means lost data, and lost data can result in all sorts of headaches depending on what’s actually on the laptop. While encryption can limit the damage, that still won’t compensate for the loss of productivity for business travelers who depend on their laptops for their daily work.

While business travel won’t stop, the laptop ban combined with other issues which make international travel more onerous may well hit the bottom line of airlines with international routes. It will also increase the interest in everything from insurance for lost luggage to rentals of laptops and similar equipment overseas (which brings with it additional security concerns). Some frequent travelers may even consider storing electronics at offices or apartments overseas, to ensure that they are able to get back to work quickly upon arrival.

In the grand scheme, however, Skype begins to look pretty attractive when the alternative is eight hours of airline entertainment or watching TV on a cell phone followed by a full cavity search on arrival.

Of course, you could always fly via Canada.

State of Incorporation

State of Incorporation

Alas, not the most popular state to incorporate in

Europeans often think that they are catching up to the US, at least in terms of harmonized and consistent laws, but in many instances our system is actually more federalized than that of Europe. Whereas you can now form a European corporation, US corporations are formed under the laws of a particular state, rather than under the federal (United States) law. Typically, that means you’ll have to decide between the state in which you’ll actually be headquartered or operating (assuming you know which state that is) and one of the states which has advantageous tax or corporate laws for corporate formation.

Traditionally, Delaware has been the first choice of most corporations because of its favorable tax and corporation laws, but other states such as Nevada, Alaska, and Wyoming have also been trying to get into the lucrative business of corporate services in recent years. If you’ll be operating completely within the border of a single state, you might as well incorporate in that state, but most German businesses are seeking to sell throughout the United States so a Delaware (or other law-tax state) corporation will be more advantageous. There is no equivalent to the European Corporation (SE) in the United States, so every US company will have to choose a state of incorporation.

Even more confusing, if you will be operating in a state outside of your state of incorporation you will have to file for authorization to do business in that state (or those states) as a foreign corporation. That’s right, a Delaware corporation doing business in California or even neighboring Pennsylvania is considered “foreign” for the purposes of state law, just as a German corporation would be, and may have to register as a foreign corporation. Although state laws regarding filing for authorization differ, it’s a safe bet to say that if you’ll have employees or physical assets based in a particular state you’ll be required to register in that state.

So, for example, if you form a corporation under the laws of Delaware, but will have your offices in New Jersey, you’ll form the corporation in Delaware and then file for authorization to do business in New Jersey. If you also have branch offices in California and North Carolina, you’ll need to file for authorization in those states as well. Filing for authorization in a particular state triggers other obligations as well, including the obligation to file an annual tax return and, usually, to file papers with the state relating to labor, taxes, and other fees. For any state in which you do not have a physical presence you’ll also need to pay a registered agent to accept mail and service of legal process on your behalf, which usually costs no more than $200 per year.

This is the first in an occasional series of posts on starting your business in the US.

New Green Card! Still Green!

Green Card

She’s having some well-founded second thoughts.

USCIS announced last week that the green card and employment authorization document (or EAD) would receive a makeover, in order to increase security and reduce the likelihood of tampering. The green card is granted to foreign nationals who wish to remain in the United States permanently, and who have passed through all of the (varied, but mostly lengthy) processes needed to become a permanent resident. The Employment Authorization Document, or EAD, is a document which is used to show that a foreign citizen is permitted to work in the United States.

The new green card remains largely green, and shows the Statue of Liberty. The EAD card will display the bald eagle and be red according to the USCIS, although they look a little more pink/purple to me. While the new cards will become available May 1, 2017, the USCIS will continue issuing the older-format cards for a while, in order to use up the existing inventory of card stock. Older green cards remain valid until they expire.

As a side note, I have to give them credit for that. For years, as a teenager, I cleaned the office of our local Congressman. At some point during that time the government clearly changed letterhead (as far as I can tell, it was a change from blue to black, that’s it). Either way, I ended up carrying out huge piles of pristine and unused stationary, letterhead, and envelopes to the trash for no sensible reason whatsoever.

Anyway, will have photos front and back, and will no longer display the individual’s signature. For more information about the green card, check out the USCIS webpage. Apparently, the cards were issued as part of the “Next Generation Secure Identification Document” project being carried out by the Department of Homeland Security, but I wasn’t able to find a single reference to that project other than announcements of the new green card.

Germany’s DeNIC offers (a bit) more privacy for some registrants

Whois screengrab

With the increasing focus on privacy in Europe, and ongoing challenges to the US-European “Privacy Shield” agreement, domain name registrants from Europe see domain names as (yet another) weak link in privacy rights. They wouldn’t be wrong in that – in order to protect domain name registrants in the case of the failure of a domain name registrar, all registrars are required to put the underlying registrant data in escrow with an accredited data escrow provider. Until recently, however, the only ICANN-approved data escrow provider has been the US company Iron Mountain, and as a result all of the agreements (and the underlying data) were subject to US law. That, of course, means they were subject to US law enforcement and civil litigation demands as well.

That has recently changed. According to heise online (in German), DeNIC, the German company in charge of the .de country level domain, has recently been accredited by ICANN as a third party data escrow provider for registrar data. DeNIC’s accreditation provides a European alternative to Iron Mountain, and provides some assurances that European data remains in Europe subject to European privacy laws. While that’s an improvement, domain registries must also escrow data, and there’s only a single provider for those services as well (can you guess who that might be?). DeNIC, looking to close that weak link in data protection, is actively seeking accreditation there as well.

While this particular service may not impact US business to any great extent, it does demonstrate an increasing interest in European alternatives under the current political climate. No doubt companies like XING (a German LinkedIn alternative) and UK online bookseller Wordery will seek to capitalize on increasing European concern over US service providers.

At the rate things are going, US disregard for privacy may create the European Internet champions that European lawmakers could not.

For more on DeNIC’s accreditation and continuing efforts, see this press release.

How will the new H-1B rules impact German companies?

Zeit Online recently ran an article about announcement by the Trump administration that H-1B visas will be more closely screened than before, and that the focus on protecting US workers will increase. While these changes will (eventually) impact some companies, particularly in the tech area, many German investors will be impacted only indirectly by changes to the H-1B program.

Most small to mid-sized German companies (the so-called Mittelstand) look to two other options for their personnel needs in the USA – the L visa and the E-visa. Neither visa has a separate mechanism to protect US workers because of their limited scope and purpose, and because other limitations (such as specific qualifications or business requirements) limit their use. Neither visa has been subject to the same level of alleged abuse as the H-1B visa (although the L visa has suffered some collateral damage), and thus far neither program has been subject to the same level of animosity from the Trump administration.

The L-visa allows current or recent employees of a German company to be transferred to a US subsidiary or affiliate if they meet certain qualifications. Since the visa is for the transfer of an existing employee, and is to further the exchange of knowledge between related companies, typically only a relatively small number of people can qualify. As a result, there should be little threat to US workers on a larger scale, who wouldn’t have the knowledge necessary for the position anyway since it is specific to the transferring company.

The E-visa allows German companies who trade extensively with the US (E-1) or invest in the United States (E-2) to hire a German national in the US to oversee that trade or investment. The idea is that the investment or trade would not happen without the assistance of someone whom the investor trusts, or someone who has at least the same cultural background as the investor/trader. Since the program is limited to nationals of a specific country with specific qualifications, the overall risk posed by the program to US workers is also limited.

This is not to say that the kerfuffle over H-1B visas doesn’t impact German companies at all. First of all, when H-1B visas become difficult to obtain the strain on other visa categories becomes much greater. The L-1B visa for non-managerial workers in particular has been utilized by companies who can’t obtain enough H-1B visas, often in ways which weren’t really intended uses for the visa. As L-1Bs become more difficult to get, more employers seek to obtain the more preferable L-1A (for managers), which increases scrutiny of that category as well. Not surprisingly, all of the extra scrutiny in the L category makes the E-visa a more attractive option for German companies which, in turn, makes those more difficult to obtain.

Of course, German companies who have already managed to establish a subsidiary in the US (especially in the IT industry) often find that their help wanted ads are answered by foreign nationals, who in turn require a visa (often an H-1B) for employment. As one of my clients once mentioned to me, the German headquarters was not at all happy about having established a US entity at great effort and cost, for the purpose of having an “American” presence, only to turn around and hire Indian nationals and spend money on additional visa applications.

Overall, German companies with a solid business plan and a real need can still obtain the visas they need, although with a little more effort and scrutiny. So far, most (but not all) of those German nationals can still enter the US without too much trouble, although sometimes with more scrutiny and effort there as well. The bigger question for the US is whether the constant barrage of bad news and border control horror stories will make Germans reconsider investing in the US at all.

Of Cherry Blossoms and Business Cards

Japan

In my practice, I work with people from all around the world, but a large number of them come out of Europe, more specifically, Germany. While that has made me very sensitive to the cultural quirks of different European cultures, I’m not nearly as familiar with the dos and don’ts of Asian culture. That’s why, when I was asked to meet with a prospective Japanese client, I reached out to a friend and colleague for advice. His tips are below, for your reading pleasure.

  • Don’t be uncomfortable with silence. Japanese often pause for long periods, or sit in silence. It is crazy uncomfortable for a westerner.
  • Small grunts (mmm, mmmm) are not signs of agreement, but just I’m listening. The reverse is also true and can help with number 1.
  • Japanese occasionally close their eyes in meeting and look like they are going to sleep (and in large meetings many do sleep). It is not considered rude at all.
  • You probably read this but don’t put the business card away. When they hand it to you study it, and when you sit, put it in front of you. If more than one person comes, you line them up in front of you in the order the people sat (don’t make a stack).
  • Unless this is a very western Japanese person, he or she will want to establish a relationship with you before bringing you on board. They may say they’re hiring you, but you might see just little dribbles of work until you get a good relationship. Wine and dine and spend time with them, visit them, give them attention. The more comfortable they are with you the more biz you’ll get.

I found these pretty helpful, and some probably apply in most cultures to differing degrees.

For those of you in the Philadelphia area with an interest in things Japanese, the Cherry Blossom Festival (above, unfortunately this blog post is too late for that) is a great event. See the Japan America Society of Greater Philadealphia for more events.

So long e-signatures, it was nice to know you.

DocuSign screenshot

We recently bought a house or, more accurately, a bank bought a house which we own a teeny-tiny part of. That, of course, resulted in an unending series of requests by mortgage companies, banks, title companies, realtors, sellers, etc. for signatures on long and seemingly duplicative documents. In most of those cases, our signatures were obtained via DocuSign. That’s become pretty standard practice in the real estate industry these days, and also in other industries which require large numbers of signed documents. While it’s annoying, I suppose it beats having an equally large pile of signed originals in a file somewhere.

Or maybe it doesn’t. According to a recent memorandum in a California court, however, a “signed” DocuSign document might not be enough. The judge in that case sanctioned an attorney for relying on DocuSign signatures in the context of bankruptcy law, pointing specifically at a requirement that electronic signatures are only valid if a copy of the “original” signed document was retained. DocuSign, of course, has based its entire platform on the idea that the digitally signed document is the original, which may now be in serious doubt.

For now, the memorandum serves as a reminder that users of digital or e-signatures have to be certain that the laws pertaining to that particular transaction allow e-signatures without a “wet signature” to fall back on in the event of a dispute. Bankruptcy lawyers in particular, take note. That being said, the logic behind the memo calls into question the entire premise behind electronic and digital signatures and, if followed, may end up being a really good development for paper companies. After all, if I sign by putting my name following /s/ in an e-mail, or using the signature function in Apple’s Preview application, the potential authentication issues raised in the memo are exactly the same as raised in this case.

I’ll keep that in mind if we have second thoughts about this whole home-ownership thing.

Hat tip to Whitney Merrill (via Twitter, @wbm312)

Huge Crackdown on H-1B visas!!! Not really.

For a moment, it looked like the H-1B filing deadline was going to pass without much change from the previous administration. Other than a shot across the bow the Trump administration did little to indicate any real changes to the program. Yesterday’s announcements didn’t really change that in any substantive way, although they did add a new sense of concern over whether – and how – the administration would go after companies it perceives are putting US workers in a “disfavored status.” DoNotEnter

After all, the tests for obtaining an H-1B visa don’t really measure, or even attempt to measure, whether an available US worker was overlooked. Rather, the goal is to ensure that there is no wage incentive to hire foreign workers over similarly qualified US workers, the idea being that market forces would do the rest. In some sense, that’s a very Republican approach to regulation, and for some time it worked pretty well.

Since the late nineties, however, the H-1B visa program has become much more controversial. For many it’s seen as a vehicle to bring in cheaper workers with lesser qualifications to unfairly complete for US jobs. The tech industry, on the other hand, insists that these visas are critical for the US IT industry.

There’s no doubt that there is abuse in the H-1B program (and, as a result, the L-1B visa program as well), and that the program could readily be improved. There’s also little doubt that the pool of ready, willing, and qualified US workers looking to step into these positions is limited. Indeed, many of my clients, coming in from overseas to start doing business in the United States, have been extremely frustrated to find that the pool of qualified workers in their area is made up largely of other non-US workers for whom expensive and time-consuming visa applications are required. The program would definitely benefit from a balanced review by Congress and some smart modifications, as have been proposed by any number of practitioners and law professors. A good start might be limiting the use of H-1B visas and L-1B visas by so-called body shops, since those employers have the market power to push down H-1B wages significantly over time.

Unfortunately, that’s not what’s happening, and the administration’s ad hoc method of changing immigration law is sowing uncertainty while giving companies neither the time nor the tools to plan for change. Had this announcement been made in January, companies whose use of the H-1B visa was perhaps unnecessary or improper would have at least had the chance to test the US market and determine whether the non-US worker was actually needed. As with the travel ban, however, this most recent announcement comes after all of the applications have been prepared, checks have been cut and, frankly, most everything was already in the mail. As with the travel ban, that’s not fair to the companies or the people who are planning on those visas for their livelihood.

The quality of the answer depends on the question

People hate to pay lawyers, possibly even more than they hate to pay accountants and dentists. First of all, a lawyer’s stock in trade is essentially words, and Americans in particular don’t like to pay for words, whether it’s for online news or advice about a great business idea. Secondly, questions to lawyers seem to result in a lengthy screed which doesn’t answer the question, followed by a short but hefty invoice. As a result, many US businesses don’t have an ongoing relationship with a lawyer, and some don’t use a lawyer at all. A study by Legal Shield (pdf link) suggests that 60% of small businesses with some sort of legal issue will struggle through without the assistance of an attorney.
There are some valid reasons for that. Lawyers and other professionals can be very expensive, and sometimes the results are – shall we say – less that satisfactory. You can eliminate some of that frustration and expense, however, by following a few simple rules:

  • When you ask a question, provide enough context that the lawyer can understand the underlying transaction in as efficient a manner as possible. Thirty minutes spent summarizing the steps which caused the problem (or opportunity), along with a few key documents, can save hours of lawyer time.
  • Make sure you are asking the right question. If you have a one-line e-mail which ends with “will I have to pay tax?” or “can I do that?” then you probably haven’t provided enough information (see above) and you haven’t asked the right question. You know enough about your business to ask the most relevant, specific question, so don’t make your attorney guess at it.
  • That brings up another point – there should be a clear answer to the question “who is your attorney?” It may seem strange to have “an attorney” when you don’t have a legal issue, but an attorney who understands your business can more readily (and efficiently) answer questions as they arise, since that attorney already knows some of the context. That and, by recognizing issues before they become problems, the attorney can save you significant legal costs down the road.
  • Be a critical – but fair – client. If you get an answer you don’t understand, ask the lawyer to clarify the answer. If you get an answer which doesn’t have an actual answer, or at least a concrete recommendation as to how to proceed, ask for one. If you don’t understand why the cost is what it is, ask for a detailed report.

I’m not going to pretend that all questions can be answered efficiently or cost-effectively every time, even if you follow the above steps. After all, the law is messy, with lots of potential conflicts and complications, and sometimes the very fact you’ve omitted is the one which is crucial to getting the right answers. That being said, if you’ve asked a well-thought out question and provided the necessary context, it’s fair to expect a well-thought out and relevant answer, since that’s what you’re paying for. If you’re still not getting good advice maybe it’s time for a new lawyer. Remember, though, that time you spend up front will pay significant dividends down the line.