Quiz tests level of legal literacy

Do you know the answers?

If you can answer all these questions, consider yourself knowledgeable about the laws that affect your business and family life.

If you can answer about half of them, you're well on your way to developing a good sense of your rights and responsibilities.

If you only know one or two answers, better set aside some time to read the explanations that follow each question. The answers are written by lawyers who deal with these and similar issues on a daily basis.

1. Can Missouri employers mandate that all claims against them by present and former employees be submitted to arbitration to avoid having to litigate such matters in court?

Yes. Both federal and Missouri law allow employers to enter into mandatory arbitration agreements with their employees.

Employers have found that alternative dispute resolution procedures, such as arbitration, are typically more cost-effective and less lengthy than traditional court and administrative agency actions for resolving disputes between them and their employees.

Arbitration agreements require that some level of consideration be given by both the employer and the employee. Often employers have employees sign the mandatory arbitration agreement at the time that they are hired as a condition of their employment.

However, courts have recognized that current at-will employees also can be required to sign a mandatory arbitration agreement as a condition of their continued employment.

To ensure that an arbitration agreement is enforceable under Missouri and federal law, employers should seek the advice of counsel in drafting and implementing these agreements.

Cathleen A. Martin, Newman, Comley & Ruth, Jefferson City

2. I'm buying the property next door and close tomorrow. I can hardly wait to take possession so I can tear out that pile of rusty scrap iron they call art. Do you think I will have any problems with that?

Yes. You should consider the Visual Artists Rights Act of 1990 (See 17 U.S.C. 106A).

VARA grants rights to artists to prevent the destruction of any visual work of art which would be "prejudicial to his or her honor or reputation" and to prevent the destruction of a "work of recognized stature."

Whether the artist retains any ownership rights to the work of art does not matter. An artist, however, does not have rights under the act with respect to a "work for hire." The artist with rights under VARA can enjoin you from removing the metal sculpture from the property. The artist's rights generally last for his lifetime.

If destroying the sculpture is important to you, then your due diligence should include ascertaining whether the artist who created the sculpture has any rights under VARA.

If he or she has such rights, then your contract to purchase the property should be conditioned on delivery by the seller at closing of a written waiver of those rights by the artist. The waiver should comply with that statute's requirements for an effective waiver.

Valerie M. Sieverling, The King Hershey Law Firm, Kansas City

3. I have heard about mediation and arbitration. Are they the same and, if not, what is the difference and what kinds of cases can they be used for?

They are different. Mediation is when the parties to a dispute meet with a trained neutral mediator who first listens to the parties in a joint session and then talks with each side privately about how the case could be settled.

The mediator goes back and forth between the parties in an effort to find a solution all sides will accept. It is confidential, and the parties settle only if they want to. The mediator does not rule on their case.

Arbitration is when the parties agree to make an informal presentation of their case in front of a neutral person who the parties have agreed in advance has the authority to decide the case. The arbitrator's ruling is binding on the parties and they must abide by it.

All kinds of cases, personal injury, employment, business, divorce, are suitable for mediation. Many are for arbitration as well.

Richard Routman, director of Midwest Arbitration and Mediation Inc., Kansas City

4. I am stuck in an irrevocable trust. Is there anything I can do to get rid of a trustee who I just do not get along with, or to get out a trust that just does not serve my needs or my children's needs?

Surprisingly, Missouri law is rather flexible in this area. For more than a hundred years, it has been the law throughout the English-speaking world, including Missouri, that if all of the adult beneficiaries consent, and if the change will not frustrate a "material purpose" of the grantor in setting up the trust, a trust may be modified or terminated by agreement.

And there has been a statute in force in Missouri since 1983 that provides that a court may approve the modification or termination of a trust by the adult beneficiaries, even over the objection of the trustee and even if it would frustrate the grantor's purpose, if the change would benefit the minor or unborn beneficiaries. These two rules can apply in an unexpected variety of situations to enable you to get out of a bad situation.

Russell A. Willis III, JD, LLM, Creve Coeur (St. Louis)

5. Can a private company take my property against my will for a private development?

Sometimes. The power to take private property is called eminent domain and under the Constitution the government has this power. The only limits are that the property can only be taken for public purposes and the owner must be paid just compensation.

As cities began to decline and suffer from blight, the government started to use its eminent domain power to acquire property that was in a state of decline, then would give the property to private companies to develop into better and more economic uses.

Eventually, the law was changed to sometimes eliminate the step of having the government acquire the property, and the power of eminent domain was given directly to the developers. Of course, the requirement of just compensation always applied.

Today, developers are frequently given eminent domain powers. This happens most often when property is owned by many individual owners.

Because property has to be assembled into large tracts to be developed, eminent domain allows developers to put together land without worrying about someone "holding out" in the middle of a big project.

The most controversial law that gives eminent domain powers to developers is called Tax Increment Financing, or TIF.

This law is controversial because it not only gives eminent domain powers to developers, but also allows them to use tax monies to help pay for the actual projects.

G. Henry, Attorney at Law, Denlow & Henry, St. Louis.

6. How do I keep my business safe from employee theft?

Employee theft can be damaging to a business of any size. Cases I have worked on have been in small and large businesses with amounts stolen from $100 to more than $1.4 million.

In most cases, employees steal to obtain money for three reasons: drugs, gambling or personal need.

Personal need could mean the need to get the thief, or a loved one, out of debt or to provide a better lifestyle. If you see some of these traits in an employee, you might want to watch his or her work habits more closely.

Don't assume a long-time employee cannot be a thief. Even trusted employees get themselves in debt or become problem gamblers.

I know of a grandmother, a 30-year employee, who stole her employer's money for the slot machines.

Be careful who you hire. Check references carefully and obtain a record check from the local police.

Some victims have found out too late that their new bookkeeper or sales representative was a convicted felon.

Follow good accounting and audit procedures. Proper checks and balances in the receipt, deposit and disbursement of funds can help discourage theft or expose it before it gets out of control.

Lax accounting procedures, or trusting one person to handle all of the financial matters, creates the environment for theft to occur.

Sophisticated thieves may divert funds to a company or bank account they have set up keep an eye on your records, statements and canceled checks for unknown payees.

Check into fidelity insurance. This insures the business against employee fraud and theft.

If you find yourself the victim of theft, contact the local police. If possible, do it before the thief is tipped off to your knowledge of the theft. The thief may try to take or destroy records and evidence.

An audit may be necessary. Be prepared to provide police and prosecutors with information about how your business and accounting systems work, and expect to turn over documents and records. Be patient, but don't be afraid to call police or prosecutors to inquire about the status of the proceedings.

J.B. Lasater, St. Louis County Prosecutor's Office

7. How "broke" must a person be to file bankruptcy?

There is no minimum amount of debt a person must have to file either Chapter 7 or Chapter 13 bankruptcy cases. However, there are certain maximum debt limits in order to be eligible to file a Chapter 13 case.

To file under Chapter 13, a person cannot have unsecured debts in excess of $250,000 and secured debts in excess of $750,000.

Because of other ramifications of filing bankruptcy, for example, its effect on a person's credit rating, filing bankruptcy should be contemplated very carefully.

Donna Sommars, Sommars & Bertsch LLC, St. Louis

(The preceding quiz was provided by the Missouri Bar Association)