I just wanted a simple agreement, not a “War and Peace” rewrite

Have you ever reviewed a contract, gotten to the end and wondered what all these “boilerplate” provisions are all about?  In the alternative, you think you have come up with a simple and easy-to-understand agreement with the other side only to have the attorneys turn it into a “War and Peace” rewrite.  I am here to tell you that these boilerplate provisions that you may not think are important actually have meaning and are included in agreements to protect your interests.  Over the next few weeks, I am going to provide you with overviews of some of the key boilerplate provisions including the following:

  • Choice of law & Jurisdiction;
  • Indemnification, Warranties & Confidentiality.
  • Assignment, Waiver, Limitations on damages & Force majeure.
  • Attorneys’ fees and costs, Arbitration & Jury trial waiver.
  • Severability, Attachments, Notice & Relationships.
  • Headings, Integration & Counterparts

Helpful Resource Pages

 

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

PA Decommissioning Bill Passes the House

3D Illustration of a Passed Mark

House Bill 2104 (“HB 2104”) has finally through the PA House of Representatives. As we have detailed over the past few months, HB 2104 creates a new chapter for standardized requirements related to the decommissioning of alternative energy facilities, including wind and solar. It has been a while, so what exactly does HB 2104 change? HB 2104 presents a uniform approach to alternative energy decommissioning plans as opposed to the broad range of requirements and timelines found in the municipalities across Pennsylvania:

Decommissioning Timeline: except in the event where a grantee is actively working to recommence the production of electricity, a grantee shall be responsible for decommissioning the alternative energy facility in accordance with this chapter no later than 18 months after the facility has ceased producing electricity.

Decommissioning Plan Form: Within 180 days of the effective date of this section, the department shall, by regulation and in consultation with the alternative energy facility industry, develop a provisional standard form for a decommissioning plan and financial assurance to be filed with the county recorder of deeds in accordance with this chapter. For now, the department has provided temporary regulations located in section 4304(b), which must be contained in the final regulations the department creates.

Financial Assurance Requirements:A grantee who executes an alternative energy facility agreement on or after the effective date of this section shall provide a decommissioning plan, submit proof of financial assurance from a banking institution or a Federal credit union as defined in 17 Pa.C.S. § 103 (relating to definitions) to the county recorder of deeds and provide notice to the surface property owner party (underlying landowner). Acceptable methods of financial assurance shall include a bond, an escrow account or an irrevocable letter of credit from a banking institution in accordance with HB 2104. The irrevocable letter of credit may be terminated at the end of an alternative energy facility agreement only upon 90 days’ prior written notice by the banking institution to the grantee and surface property owner.

Financial Assurance Amount: The amount of financial assurance shall be equal to the cost of decommissioning the alternative energy facility in accordance with section 4304(b) (relating to financial assurance forms and decommissioning plans) and shall be calculated and updated every five years by a third-party professional engineer retained by the grantee from a list of professional engineers compiled by the department and published on the department’s publicly accessible Internet website.

Financial Assurance Timeline: A grantee shall deliver a decommissioning plan and proof of financial assurance to the county recorder of deeds no later than 30 days before the commencement of construction of the alternative energy facility, the grantee shall provide the decommissioning plan and proof of financial assurance to the county recorder of deeds in an amount equal to 10% of the total cost of decommissioning as determined by a third-party engineer. The grantee shall update the decommissioning plan and provide proof of financial assurance (in an increasing amount) on or before the fifth (10%), tenth (25%), fifteenth (40%), twentieth (60%) and twenty-fifth (70%) anniversary of the commencement of construction,

Subsequent Grantees: The decommissioning plan and associated financial assurance may not be separated from the alternative energy facility through a change in grantee ownership to a new grantee. The new grantee shall submit proof of financial assurance in a similar manner to the original grantee as stated above. The prior grantee may not release or revoke the prior grantee’s financial assurance until the new grantee’s proof of financial assurance is filed with the county recorder of deeds and notices is provided to the surface property owner party.

OK, but what does that mean for a solar developer in Pennsylvania? When/If HB 2104 passes through the PA Senate, these decommissioning provisions preempt all local ordinances which materially impede the purpose of this bill. These will be the new decommissioning rules to follow and adhere to. OK, but when do these provisions take effect? The addition of 27 Pa. C. S. §4304 (temporary guidelines for decommissioning plans) takes effect immediately following the passage of the bill. The remainder of the act takes effect in 180 days.

COMMUNITY SOLAR UPDATE: We all anxiously await any positive movement on the various PA community solar bills. Here is the most recent status of House Bill 1555 and here is the most recent status of Senate Bill 472.

If you have other specific questions about third-party approvals, renewable energy, or anything related or unrelated, please don’t hesitate to call our firm at (717-845-1524) or email Andy Miller (amiller@mpl-law.com) or Cory Dillinger (cdillinger@mpl-law.com) with any questions or comments.

You Must Protect This House! – Non-Competes and More

Employers are struggling with not only finding quality employees but also protecting their interests when an employee leaves.  I get a call or question at least once a week about the enforceability of non-compete/non-solicit/confidentiality clauses.  It should be straightforward, right?  When you hire someone for a job, part of their agreement is that they won’t go work for your competitor and take all your secrets when they leave.  Seems straightforward.  Okay, that’s a bit simplistic and it is not that easy.  In fact, every State has their own rules related to these often used and misunderstood provisions that range from allowing them all the way to not allowing them at all.  To make matters even more complex, President Biden waded into this topic as well.  So, what are you supposed to do?  At a high level, here are the key components of a reasonable and enforceable non-compete:

What does it protect?

  • Company trade secrets & confidential information
  • Relationships with company clients, both existing and sometimes prospective
  • Company-specific training and knowledge

What are the typical restrictions on the former employee?

  • The former employee cannot go to a competitor company
  • The former employee cannot start a competitor company that offers the same products or services
  • The former employee cannot recruit former colleagues to join the competitor business

Is it enforceable (i.e, what do Courts look at)? 

  • Does it protect your legitimate business interest?
  • Is the time restriction reasonable?
  • Is the geographic restriction reasonable?
  • Was the employee provided some type of consideration in exchange for the non-compete?

The above items are high-level points that should be considered when implementing non-compete/non-solicit/confidentiality agreements with your employees.   As always, I strongly recommend you seek counsel from your team of professional advisors and staff who are knowledgeable in these types of agreements.

Below are some good articles that can provide more insight:

Like Under Armour famously says in its advertisements – “You Must Protect This House!”, non-competes/non-solicits/confidentiality agreements can be an effective way for you to do just that.

Here are a few other things that may be of interest:

Helpful Resource Pages

 

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

MPL General Counsel Corner – You Have Two Ears and One Mouth, Use Them Accordingly

Maybe it’s me, but I have noticed an uptick in business client calls that include the following:  “What are my legal options?” or “I want to sue!”  As I listen to their issues, more times than not the root cause is typically a breakdown in communication.  Maybe the supplier did not adequately explain all the ins and outs of the product or service being provided to you.  Perhaps it was not the supplier’s issue and your expectation of the level of service or quality was not adequately expressed.  Maybe your client is falling on tough times and is scared to tell you about it (i.e., they aren’t paying their invoice).  How about when you don’t check in with a valued employee and they all of a sudden leave?

In each of these situations, poor communication is more times than not at the heart of the issue.  None of us is perfect in this area.  However, listening and being clear and honest with your intentions will typically lessen the likelihood of an issue arising.  I can assure you that entering the legal arena, unless it’s a large, six figure+ type of payout, will hurt more than help your business.

Check out some interesting perspectives on this very topic:

I will leave you with the following quote, which I think is appropriate for this week’s GCC:

“You have two ears and one mouth, use them accordingly.”   – Steven Covey (and several others)

Helpful Resource Pages

 

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.