Has your business partner, LLC member or LLC manager harmed your business? You are not stuck! There are ways to remove a rogue member or manager from your business, LLC, or partnership (similar to removing a rogue officer or shareholder from a company). Find out more about how we can help you here.

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If a manager or a member of the LLC engages in conduct that harms the LLC, the other members do have standing to bring what is known as a “derivative action” to remove the member or manager from the LLC.

Generally, derivative actions are typically brought by a corporate attorney on behalf of the shareholders of a corporation demanding that the corporation take action against its directors, officers, or others for their actions that harmed the corporation (usually the acts are done outside the scope of their duties or exceeds the standard of reasonable “business judgement”).

Of course, your LLC operating agreement may set forth the rights of the members and the process to remove a manager or other member from the LLC in the event of bad behavior or for other reasons.

Although the New York Limited Liability Company Law does not explicitly provide for derivative actions to remove a manager or member from the LLC, New York Courts have recognized that LLC members do have standing to bring such a claim.  Of course, each case stands on its own facts and merits — but if you believe your fellow LLC member or manager is acting in a way that harms your business, you should contact us (or any New York Business Lawyer or corporate attorney) to discuss your options on how to remove them from your LLC.

Every few weeks, I get called by the media for an interview regarding a current news story.   On this particular day, I got a call from Catherine Holahan, a reporter with BusinessWeek.  Back in  2007, Jayant and Rajat Agarwalla created Scrabulous, the online Scrabble knockoff that became a smash on Facebook.  When Hasbro, which owns the North American rights to Scrabble, filed suit for intellectual property infringement, the brothers removed the game from Facebook after the social network received a takedown notice from Hasbro’s lawyers alleging that Scrabulous violated its copyright and, therefore, Facebook’s terms of service. The brothers then reinvented their game as Wordscraper.  But a board game is not only protected under trademark laws for its brand name of the game, but is also protected under copyright law with respect  to the expression of the game.

Would changing the name from Scrabulous to Wordscraper be enough to satisfy Hasbro? The change of the name could help them on the trademark side. The new name would have to be so that it is not confusingly similar to “Scrabble.”  The question would be, under copyright law, is the expression of the new game so substantially similar that it would still constitute copyright infringement?  I explained to the reporter that ideas are as free as the wind. Courts don’t enforce the protection of an idea, they will however, enforce the way the idea is carried out or expressed. For example, the creators of Superman can’t protect the idea of a super strong person who saves people from criminals. They can, however, enforce their rights if someone created a hero who wears a blue suit with a red cape and flies around saving people when not working at a major metropolitan newspaper. Generally, courts are looking at whether a plaintiff can prove substantial similarity and access to the copyrighted expression.  Read the full article, Scrabulous Now Wordscraper, Hasbro Still Suing, by Catherine Holahan, BusinessWeek.

**This post is for informational purposes only, For legal advice contact an internet attorney**