Mark O’Donnell Publications
Sarbanes-Oxley and its Direct Application to Your Company
Your “Street Access” and the Diminution of Your Property Rights
Sarbanes-Oxley and its Direct Application to Your Company
Business owners are under the misapprehension that the Sarbanes-Oxley Act (the "Act") does not apply to them and their individual businesses. They incorrectly assume that the Act only applies to publicly-traded companies. Please note that this assumption is seriously wrong.
The Act includes new and very strict criminal provisions dealing with the obstruction of justice by document destruction. The Act makes it a crime (punishable by up to 20 years imprisonment per violation) to knowingly destroy a document with the intent to obstruct or influence "the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States." Unfortunately, the Act expands the prohibition to even contemplated investigations. The language quoted above has been interpreted by federal courts to include almost every conceivable area of interest of the federal government.
It is important to remember that a "document or record" includes electronic communications and voice mail. Assume a supervisor communicates with an officer or director in your company by email. The email discusses a potential OSHA violation. Further assume that the recipient of the email deletes it. A complaint is made to OSHA. OSHA notifies your company of an investigation relating to the matter discussed in the email. The question now becomes whether under the Act you or other individuals will be exposed to criminal liability.
In this instance, you and your company will want very much to have a document retention program. Here are some of the reasons:
1. Officers and directors of your company will have significantly less risk of being charged with criminal violations.
2. Under the Federal Sentencing Guidelines, you and your company may be eligible for a reduction in penalties if you have an effective compliance program in place and a document retention program is part of it.
3. Records retention is always an important substantive component of many of the laws with which private companies must comply. Examples are OSHA, Toxic Substances Control Act, Resource Conservation and Recovery Act, wage and hour laws, Title I of the Americans with Disabilities Act, hiring and recruiting records, IRS and other tax records, immigration, use of independent contractors, ERISA, Family and Medical Leave Act, trademark records, privacy laws, and other areas of law with which companies must comply.
4. Records that have been improperly disposed of can create monumental compliance and litigation problems.
Your company should implement the following recommendations:
1. Have a written document retention policy.
2. The policy must make provision for the retention and destruction of electronic files and voice mail.
3. The policy must have a "stop button" for immediate cessation of document destruction upon notice of an official investigation, or even if an investigation is possible.
4. All employees need to be educated on what constitutes a "document." In many instances, files that an employee considers personal will contain "documents" and the same should be clearly identified in the document retention policy.
5. Your company’s employee handbook/manual needs to cross-reference the company’s document retention policy. You should consider having each employee sign a separate acknowledgment that the employee has read and understands the document retention policy.
Developing a document retention policy as part of a compliance program for your company is a time-consuming endeavor. There are various ways to accomplish this task. Whichever way your company chooses to develop its record retention program, sooner is better than later. For more information about this article or a record retention program for your company, you may contact the author at 503-306-0224 or MarkO@OandC.com.
Your "Street Access" and the Diminution of Your Property Rights
by Mark O’Donnell and Ross Day
As any land owner knows, location, location, location is a critical component of the value of your property. For a proprietor of a lodging facility, "access" to your facility is critical. But what happens if access to your location – for your customers, suppliers or employees – is restricted, limited or eliminated by the government?
Oregon law is very unfriendly to landowners. Most Oregon politicians, including most Republicans, place the preservation of the environment (a most nebulous concept) ahead of people, jobs and property rights. Equally disturbing is the attitude of Oregon’s Court of Appeals and Supreme Court, who treat "property rights" as a second class of rights not afforded the protection of the environment, criminals, aesthetics and other elitist values.
In 1991, the Land Conservation and Development Commission adopted the Transportation Planning Rule (the "Rule"). This Rule applies to cities, counties, metropolitan planning organizations and the Oregon Department of Transportation (ODOT). The most notable features of the Rule are its measures to enhance pedestrian, bicycle and transient travel, and to reduce reliance on the automobile. The Rule is legislative approval of a tool for the government to use to restrict access to your property. This article will briefly discuss access law in Oregon, your rights as a landowner, and steps you may take to protect access to your property.
The common law rights of access protected access points for a property owner, but presented significant problems for city, county, and state transportation departments as they began constructing our country’s system of highways and roads. In an effort to "resolve" this dilemma in favor of the government, the Oregon legislature and the courts created a mish-mash of statutory law and case law which restricted property owners’ access rights.
The law in Oregon allows property owners "reasonable" access from their property. When a land owner has multiple access points, the elimination of one or more of these access points does not require compensation, so long as reasonable access remains. Mere inconvenience, reduction of business profits, or reductions in property values are not compensable as a result of the loss of an access point.
What’s more, access closures are not compensable even though a new access point for property is less convenient for customers and delivery by suppliers is made more difficult. The fact that traffic must use a more circuitous route to obtain access to a property, making it more inconvenient, and negatively affecting the use and value of the property, does not require compensation.
With the state of the law so antagonistic toward access rights for property owners in Oregon, there are some steps that a property owner may be able to take in order to protect access to an abutting road.
First, some properties may have "easements" or "reservations" of access in their deeds which grant access to an abutting road at a specific location. If ODOT is proposing to restrict or remove an access point for your business, or you are going to apply for a zone change, conditional use or other land use change for your property, you need to consult with an experienced real estate and land use lawyer to review your chain of title (deeds, etc.) for any such specific access reservations.
Second, property owners can take preemptive steps to avoid falling into the pitfalls of Oregon access law. Property owners can protect themselves by submitting multiple applications for multiple access points along their property.
Third, for new developments, most property owners have access permits with the either the Oregon Department of Transportation or their local departments of transportation. If the use of the property has materially changed, the access permit may become invalid. Failure to comply with terms of the permit may result in revocation of access points along an abutting road or highway.
Finally, a property owner is only entitled to access for primary uses of the property. Where an access point benefits an "auxiliary" use of your property, access for the auxiliary use is not guaranteed, and if ODOT were to deny or eliminate this access, a property owner would not be entitled to compensation. Accordingly, if access issues are a foreseeable problem, it would be wise for property owners to separate different uses into different tax lots and ownerships in order to avoid this outcome.
One of the most valuable characteristics of property owned by a business are the access points the property enjoys with abutting roads. However, your rights to access have been restricted and diminished by both the Democratic and Republican elected officials in Oregon. On the other hand, always remember there are still some methods a property owner may employ in order to protect their rights. These require a clear understanding of your access rights prior to any government action to restrict them.
If you would like more information or would like to meet to go over your access rights, please contact Mark O’Donnell or Kristian Roggendorf at 503-306-0224.