Free Enterprise - The FindLaw Small Business Law Blog

July 2013 Archives

Small Biz Super Bowl TV Ad Contest: 5 Legal Tips

One lucky small business is set to score big-time with a free 30-second TV ad during the Super Bowl -- the grand prize in a new contest for entrepreneurs. But there are a few legal considerations you'll want to kick around in your head first.

The winner of the Intuit Small Business Big Game will get a professionally produced TV commercial that will likely be seen by more than 100 million viewers during Super Bowl XLVIII in February, according to USA Today.

Snagging a Super Bowl ad spot could be a game-changer for your small business, but the "Big Game" contest also comes with a lengthy set of rules. Here are five legal reminders for you to keep in mind:

IRS Cracking Down on Independent Contractors

According to a recent Treasury Department report, the IRS is cracking down on the misclassification of "independent contractors." The consequences could be costly for business owners who aren't too careful.

For employers, the advantages of classifying a worker as an "independent contractor" are clear: You don't have to withhold income tax and you don't have to offer them any benefits, just to name a few.

But the Treasury report estimates that "millions" of workers are misclassified as independent contractors, when they really should be considered employees. How can you tell the difference, and what's the big deal, anyway?

Starbucks Tip-Sharing Lawsuit Back in Court

A conflict over Starbucks shift supervisors sharing tips with baristas is back in federal court, after a ruling by New York's highest court on Monday clarified the state law's take on tips.

Under New York's state wage laws, "shift supervisors" at Starbucks are entitled to a share of the overall tips, because they perform many of the same customer-service tasks as the dedicated baristas, reports Thomson Reuters.

The case now heads back to the 2nd U.S. Circuit Court of Appeals, where the fate of the tip-sharing in service-based businesses is yet undecided.

NLRB: Social Media Policy Can't Be Too Restrictive

The National Labor Relations Board (NLRB) has a thing or two to say about social media policies at work. These days, it's no huge surprise that social media use is pervasive in the workplace, in addition to being used during one's personal time as well.

However, despite the many workplace policies regarding social media in the workplace, some of them apparently go a bit too far. In an NLRB memorandum obtained by Reed Smith's EmploymentLawWatch.com, an NLRB lawyer advises that enforcing certain too-restrictive social media rules in the workplace may be a violation of federal labor laws.

What does the NLRB's guidance mean, exactly?

10 Ways to Ruin Your Twitter Reputation

With Twitter transforming into a cornerstone of engagement for businesses, maintaining a strong Twitter reputation is key. But beware: A number of practices could be devastating to your Twitter reputation -- and to your business, according to Forbes.

Even Twitter itself isn't immune from committing a Twitter faux-pas. Just last week, the company "deeply apologized" for a mockup graphic that attributed fake tweets to some of its real users.

As many companies have learned the hard way, actions that are damaging to your Twitter reputation can go viral. Here are 10 ways to ruin your Twitter reputation that you'll want to avoid:

Do You Need an Employee Smartphone Policy?

By now, the majority of employees at most small businesses will have smartphones, some of them even issued by their companies. So a savvy business owner will have policies in place to prevent liability and misuse of smartphones in the office.

For many businesses, an employee smartphone policy is the right call -- it can increase productivity, and it may also save your business from future lawsuits.

Here are a few legal issues you may want to consider for your company's employee smartphone policy:

7 Tips to Prevent Sexual Harassment at Work

Figuring out how to prevent sexual harassment in the workplace may be overwhelming and uncomfortable, but it certainly beats landing in middle of a lawsuit.

A prime example in the news this week: the San Diego mayor's sexual harassment scandal. As more alleged victims step forward, employers may want to take a more critical look at their own actions, their employees' actions, and their workplace policies.

Here are seven tips to help prevent sexual harassment at work:

Borgata Casino's Weight Limit for Servers OK: Judge

An Atlantic City casino's weight limit policy for cocktail servers is not unlawfully discriminatory, a New Jersey judge has ruled.

The Borgata Hotel Casino & Spa successfully defeated a lawsuit filed by 22 female servers who challenged a policy that prevented the servers (known as "Borgata Babes") from "gaining more than 7 percent of their original body weight," reports Philadelphia's WCAU-TV.

Employers can often require their employees to look or dress a certain way, but is this weight limit a step too far?

Skype Interviews: 5 Tips for Employers

With the Internet age upon us and remote interviews quickly becoming an e-cornerstone, every employer stands to gain something from a few Skype interview tips.

Here are five tips (that don't involve hidden Skype Emojis) to help you navigate a video job interview -- and keep things legal -- in the digital age:

Can 'Gamification' Work for Your Business?

Could "gamification" help boost your small business' bottom line? For many business owners, the answer is "Yes -- and there's an app for that."

Already, big companies such as Intel and Accenture have incorporated "gamification" -- the use of gaming elements to encourage specific behaviors in a target audience -- to boost employee productivity, reports Time. They've created so-called "gamified" apps to turn mundane work tasks into something more competitive and enjoyable.

Don't worry, you don't need a cheat code to figure out how (and why) it works.

3 Ways to Protect Business Assets in Divorce

Divorce is never easy, but having your small business straddling your marital assets can bring legal separation to a whole new level of frustration.

Regardless if your business began before or during your marriage, here are three ways to potentially protect your business’ assets from being torn apart in a divorce:

Joint Ventures: 5 Tips to Make Them Work

Joining your business forces in a joint venture can be a boon for your business and your future goals. But there are a few things any adventurous joint venturer needs to keep in mind.

For example, what exactly are you bringing into the new venture? What happens if it doesn't work out? And are you adequately protected, legally speaking?

By remembering these five tips, a small business owner can embark on a joint venture with much fewer legal worries:

Mobile Shopping Survey: 88% of Users Unsatisfied

According to a new mobile shopping survey by Skava, many customers haven't had a great time making purchases on their phones -- and they're not alone.

The vast majority of mobile shoppers -- 88 percent -- said they were not happy with their mobile shopping experience. One-third of those unsatisfied shoppers then took their business to a competitor's site, reports Forbes.

Fortunately, small businesses can save the (digital) day. Here are a few of the common gripes and tips for making mobile shopping a happier experience:

Unpaid Intern Lawsuit? Try Mediation

Your business doesn't want to get caught in an unpaid intern lawsuit like Fox Searchlight or NBC. But if it does, then mediation might be a good alternative to court.

The recent spate of lawsuits by unpaid interns who allege they were treated as regular employees (minus pay) could be mitigated through mediation, which is not only private but also doesn't attempt to pit one party against the other, reports Inside Counsel.

Non-adversarial alternatives like mediation can often discover a middle ground or compromise that litigation wouldn't consider, and can save your business the time and money of being dragged through court.

Here are some general facts to know about mediating unpaid intern lawsuits:

3 Ways to Earn Your Employees' Respect

To successfully lead, you must earn your employees' respect. Not only does it go a long way toward creating a more harmonious workplace, but it can also be part of a strategy to help prevent employee lawsuits.

Gaining employees' respect requires diligence, humility and a collaborative spirit. At the end of the day, to achieve sustainable success as a leader, you must put people first.

Here are three ways to earn respect from your employees:

Can 'Social Media Insurance' Protect Your Business?

As business owners become increasingly aware of social media's potential impact on profits, a new form of "social media insurance" promises to protect companies from digital damages.

Insurance broker Lockton has launched a new kind of policy for their business clients, an "Intangible Risk Policy" that offers coverage for "reputational harm," even when caused by a negative spike in social media, reports MediaPost.

Could social media insurance be the next "big thing" when it comes to business insurance?

3 'Cool' Legal Tips for Businesses in a Heat Wave

Summer heat waves may be a boon if you're running a lemonade stand, but small business owners might be more burdened than blessed by oppressive temperatures.

That's especially true if your business involves working in the great outdoors, which can be not-so-great -- and downright dangerous -- during a heat wave.

For those business owners who aren't working on a device that changes the weather, here are three tips to help your employees stay cool -- and to help you avoid potential liability:

Who says there aren't any holidays in August? If you do business in one of 17 states with a sales tax holiday, a "tax-free weekend" -- or even a "tax-free week" -- may be fast approaching.

The "tax-free weekends" coming up in July and August generally apply to back-to-school sales for items such as clothing, computers, and school supplies, according to the Federation of Tax Administrators (FTA), which works with tax-collection agencies in all 50 states.

Is your state among those with a back-to-school "tax-free weekend" holiday? And if so, when does it take place? Check this list, provided by the FTA, to find out:

Store Owner, 96, Stands Up to Would-Be Robber

A 96-year-old store owner thwarted an attempted robbery with nerves of steel and a fist of sass. But police say that's not the safest way to handle such a situation.

"I said I'm not opening up that cash register and that's it, I'm not opening it," Margaretta Wolf, owner of Wolf's Grocery Store in Marshfield, Wisconsin, told WAOW-TV. "I said you can have all the Tootsie Rolls you want but I am not opening that cash register."

Wolf may have howled the knife-wielding robber out of the store, but police caution against adopting her approach. If you're a mom-and-pop store owner, here are some law-enforcement tips about what to do when confronted by a robber:

Legal to Track Customers via In-Store WiFi?

While online stores like Amazon use cookies and past purchases to determine your browsing and purchasing habits, some brick-and-mortar stores are now using in-store WiFi to track customers' physical movements.

Big department stores like Nordstrom are using their free in-store WiFi to gather data about "shoppers' behavior and moods" by tracking their movements inside the store, reports The New York Times. The data is then used to modify in-store layouts and to offer customized coupons, according to the report.

Still, there has been a good deal of consumer backlash, and many have been left wondering if it is legal for any business -- big or small -- to track their customers.

Is Your Non-Compete Clause Valid?

A valid non-compete agreement can be a powerful business tool. In today's competitive market, many companies -- Fortune 500s, sole proprietors, nonprofits and more -- use non-compete agreements to protect trade secrets and prevent the luring away of loyal customers.

However, enforcing non-compete agreements can be tricky, especially if they aren't clearly drafted.

To be legally valid, here's what a non-compete agreement has to entail:

5 Tasks Your Summer Interns Shouldn't Handle

A summer intern's tasks should involve supervision. Television station KTVU and the National Transportation Safety Board (NTSB) are learning that the hard way.

During the California TV station's noon newscast last Friday, an anchor read aloud four fake names of the pilots of the Asiana Airlines jet that crash-landed in San Francisco. The racially insensitive names were reportedly confirmed by an intern with the NTSB.

It seems the NTSB either gave an unpaid intern the power of an employee, or it failed to properly supervise the intern.

Let this embarrassing gaffe serve as a cautionary tale for you. Here are five tasks your interns shouldn't handle:

NLRB Poster Rule Invalid, Federal Courts Rule

Two federal appeals courts have struck down the NLRB poster rule, a federal rule that would have required millions of businesses to put up posters informing workers of their rights to form a union under the National Labor Relations Act.

The rulings by the 4th U.S. Circuit Court of Appeals and the D.C. Circuit will impact employers across the country.

Here's what business owners need to know:

10 Tasks Your Small Business Can Outsource

Outsourcing may sound like a dirty word to some. But the reality for small businesses is that many tasks, including legal ones, can be effectively handled by someone outside of an employer's direct supervision.

Small business outsourcing can potentially help you save time and money. Of course, there are some legal issues you'll want to keep in mind as well.

Here are 10 tasks that a small business owner may want to consider outsourcing:

5 Sizzling-Hot Startup Sectors Revealed

The economy may feel frozen, but there are some hot startup sectors that are seeing fast growth and have a low barrier to entry.

A recent IBISWorld report spotlights industries teeming with opportunity for startup entrepreneurs in 2013. But opportunity often comes with risks -- including legal ones.

Without further ado, here are five sizzling-hot startup industries that are worth checking out, and some legal reminders for each:

Pre-Employment Testing Can Get You Sued

Like many business owners, you may be considering implementing some sort of pre-employment test to sift out the best potential candidates from the throngs of applicants.

While these tests may be effective in saving time by cutting down on job interviews, frivolous or careless use in testing may leave your business with more lawsuits than qualified hires.

Gross Golden Corral Video Gets Manager Fired

After a rather gross Golden Corral video went viral, a manager at one of the buffet chain's franchise locations has been fired.

Employee Brandon Huber posted a two-minute video that showed some of the restaurant's practices went completely against protocol. Huber's video showed raw burger patties and baby back ribs, placed on trays right next to the outdoor trash bins behind the restaurant.

"This hamburger meat, look at all these flies, this is disgusting, all this food," Huber said in the video, which he uploaded to YouTube. You can see the video here:

Salaried Employees: How Many Hours Can They Work?

If your employees are salaried, how many hours can they work? And are salaried workers ever entitled to overtime pay?

The Fair Labor Standards Act (FLSA) does not limit the number of hours per day or per week that employees 16 years and older can be required to work, according to the U.S. Department of Labor.

But beware: If salaried workers put in more than 40 hours in a week, employers are sometimes required to pay overtime, depending on the size of the business and the job responsibilities of the worker.

Electronic Payments Can Be Risky Business

Electronic payments are increasingly common these days, but that doesn't mean they don't come with risks for small businesses.

When it comes to payment options, e-payments are often the preferred method for both customers and business owners. Often, all it requires is a simple click and instantly, money from a customer's bank account is transferred to your business.

With new innovations like mobile credit card readers, there seems to be no stopping the e-payment trend. But along with convenience and ease, there are potential risks you should keep in mind. Here are just a few:

Does Your Business Have to Comply With the ADA?

The Americans with Disabilities Act (ADA) requires businesses to make reasonable accommodations for those with recognized disabilities, but only if those businesses fall within the ambit of the law.

If your business is on the small side or doesn’t cater to the public, it may not need to comply with the ADA.

How can you tell if your business falls under the ADA? Here are some general guidelines:

7 Twitter Mistakes Small Businesses Should Avoid

There are many Twitter mistakes that small business owners should be wary about making. Some are more obvious than others.

Even though Twitter may seem fun and casual, and you may be tempted to tweet whatever you feel like, beware. Twitter is really a powerful social media tool that can often make or break your business' online marketing strategy and image.

So if you haven't yet, get with the micro-blogging program. Before you get too tweet-happy, though, consider these seven Twitter-related mistakes that business owners will want to avoid:

Legal to Fire Over Tattoos, Piercings?

From shoulder wings to plugs, tattoos and piercings are quite the rage. But is it legal to fire people for having tattoos or piercings?

Despite their growing popularity, if you aren't a fan of your employee's alternative forms of self-expression, you can ask him or her to cover them up. If that doesn't work, then you may be able to legally fire a tattooed or pierced worker in particular situations.

Job discrimination based on appearance is a reality for those with tats or piercings, but there are certain circumstances when it could be against the law.

For Employers: 5 Red Flags to Spot on Resumes

For many employers, red flags on a job applicant's resume are the only thing they'll look for. After all, spotting red flags is an easy way to weed out lackluster candidates -- especially when your help wanted ad results in a glut of responses.

Knowing what to look for on a resume not only cuts down on your time, it can also help you avoid potential liability or other issues that can affect your business.

So what are red flags should you be looking for on resumes? Here are five that should stand out:

Unpaid Interns Strike Back: Gawker, NBC Sued

It's not just movie studios facing unpaid intern lawsuits. Now Gawker Media and NBC Universal are being sued by ex-interns as well.

The new lawsuits are sequels, of sorts, to the Fox Searchlight Pictures case, in which a judge ruled the company violated federal and state minimum wage laws by not paying interns who worked on the movie "Black Swan."

The string of cases cropping up signals a warning to business owners who rely heavily on unpaid internships.

Obamacare's Employer Mandate Delayed to 2015

The Affordable Care Act's "employer mandate" has been delayed to 2015, giving businesses and insurers time to carefully conform to insurance-reporting standards.

Mark Mazur, the Assistant Secretary for Tax Policy at the Treasury Department, stated in a press release Tuesday that the Obama administration is "engaging in a dialogue with businesses." In response to concerns about implementing the ACA's insurance-reporting mandate in 2014, the deadline will be extended to allow businesses more time to effectively implement the required changes.

While many businesses may be rejoicing at the administration balking at enforcing Obamacare's employer mandate, what does this delay mean for your business?

Does Your Startup Idea Violate Your Contract?

Taking the first steps to get your startup off the ground may mean taking some final steps with your current employer, ensuring you don't burn any bridges or breach any contracts.

The last thing your new business needs is a lawsuit from your old employer. So you'll want to avoid some common startup mistakes.

How can startup ideas violate employment contracts, and what can entrepreneurs do to not get sued? Here are some issues to consider:

E-Verify for Small Businesses: Is It Required?

E-Verify for small businesses may soon be mandatory, if the immigration bill that passed the Senate last week becomes law. But instead of requiring all employers to use E-Verify within 18 months, as had been proposed, the amended version of the bill pushes back that timeframe by a few years, Inc. reports.

Still, many states already require businesses, including many small mom-and-pop shops, to use the E-Verify system. For example, on July 1, North Carolina became the 22nd state to require E-Verify for small businesses. But not all small businesses are affected under the law, the Charlotte Observer reports.

Here's what small business owners need to know about E-Verify:

Top 10 Social Media Legal Tips for Small Biz

Is your small business on social media? If so, are you keeping your activities legal?

There are many legal implications behind the inner workings of social media. Many may not occur to business owners, especially those for whom social-media use seems almost like second nature.

Still, it's best to be careful as to how you publicly represent your business on Twitter, Facebook, and other platforms. Here are the Top 10 legal tips (and a few non-legal Internet etiquette tips) for small business owners on social media:

Bar Must Pay $4.3M for Red Sox Fan's Stabbing

A customer's stabbing is going to cost a Connecticut restaurant a pretty penny. A Boston Red Sox fan who was harassed and stabbed in the neck by a New York Yankees fan at a restaurant in 2010 has been awarded $4.3 million by a jury, reports The Associated Press.

Red Sox fan Monte Freire, 45, suffered life-altering injuries, including a brain injury, a stroke, impaired speech and vision, and severe scarring.

The jaw-dropping jury award serves as a reminder to business owners in the food and beverage industry to think twice before topping off a visibly intoxicated patron.