Free Enterprise - The FindLaw Small Business Law Blog

May 2015 Archives

As a small business owner, you have to focus on the health and success of your business. When an employee's behavior or conduct threatens the business' success or reputation, you have to lay down the law.

While you can't always be your employees' best friend, you don't necessarily want to be hated as the mean boss, or be sued for something you said.

So, here are some do's and don'ts for having an effective and legal difficult conversation:

Whether in your advertising or in your shop decor, you may want to use a striking image or fantastic photo that you found. But be careful: the image may be copyrighted, and without a license to use the image, you may be committing copyright infringement.

"But," you say, "copyright licenses can be expensive, and my business doesn't make that much, and besides no one will probably know." All fair points, but none a proper legal defense. So here are some ideas if you want to use images but can't afford licensing fees:

Remember when you could start a business by making a pitcher of lemonade, setting a table up on the sidewalk, and designing a pretty sign?

Today, starting a business means paperwork, paperwork, and more paperwork. Big brother (the government) wants to be able to track your business for tax purposes and to protect the public. So, to start a business you'll likely need a permit or license.

Where can you find permit and licensing requirements to start a business?

Why take the risk of starting your own business from scratch when you can buy into an already successful chain? Many entrepreneurs think about this every day, which is why they buy franchises.

But buying a franchise isn't as easy as just slapping someone else's logo on your front door. We've written a lot about franchises over the years and have gathered some good information you should consider before taking this step. So before you sign that franchise agreement, here are 3 things you need to know:

When the debts start piling up, you may have to consider bankruptcy.

Bankruptcy may sound appealing. You get the creditors off your back and your debts discharged. Sure, it destroys your credit, but that can be rebuilt. However, what about your business?

What can happen to your business if you file for bankruptcy?

An estimated 15 million Americans have food allergies, including 1 in every 13 children. Every three minutes, someone is rushed to the emergency room for an allergic reaction to a food allergy.

Nearly 90 percent of food-allergic reactions are caused by milk, eggs, peanuts, tree nuts, fish, wheat, soy, and shellfish. With the prevalence of food allergies, can you be held liable if someone has an allergic reaction to your food products?

"Imitation is the sincerest form of flattery," or so they say. But when a giant retailer copies your t-shirt design, is that flattery or actual copyright infringement?

Work-at-home fashion designer Melissa Lay discovered Target is selling a nearly identical tank top to one that she printed in her garage for her Etsy store. She admits she didn't copyright the design, but could she still have a claim?

No one wants to be bad mouthed, especially by a disgruntled former employee.

Companies have tried, unsuccessfully, to censor customer complaints on review sites. However, customers may not be the only people who have bad things to say about your company. Your disgruntled ex-employees may have some disparaging comments and complaints of their own.

Can you make an employee sign a non-disparagement agreement as part of their severance package?

Last Sunday, a brawl among biker gangs broke out in front of Texas Twin Peaks restaurant.

It started out as quiet Sunday, but police were already on edge. They had prior warning that trouble between bike gangs may occur. So, police were at the Twin Peaks' parking lot staking out the restaurant. Suddenly, a fight erupted. The fight, between five rival gangs, escalated rapidly from punches and kicks to gunfire.

Nine people were killed. At least 18 people were injured. and over 170 people were arrested.

If you're in any kind of business, you're also in the contract business -- negotiating, writing, signing, and enforcing. In many ways, the contracts we sign end up running our businesses.

We just have to be sure they don't end up ruining our businesses. We want clear and concise terms that will be enforceable, if necessary. But just because a clause is in a signed contract doesn't mean a court will enforce it. Let's take a look at a few common contract provisions, and whether they're enforceable:

First and foremost, you want to make the best hiring decisions for your business. And maybe that means that you don't care if someone has a felony conviction on their record. Or maybe you say you would never hire a felon.

Either way, hiring a felon might actually be good for your small business. Between compliance with federal anti-discrimination laws and access to municipal contracts, there are a few reasons to consider hiring former felons.

Summer is coming. Your business had a good year. You want to reward your team with a company picnic!

However, be careful. Company picnics and events can be great ways to build rapport and reward your employees. But, depending on how you plan your event, you could be exposing yourself to a host of liability issues.

Unpaid interns mean free labor and more money in your business' coffers. That's a great idea!

Is it really? There are many labor laws and regulations regarding unpaid interns. For example, unpaid internships must be educational, cannot displace paid employees, and must primarily benefit the intern. Violations of these rules can lead to expensive lawsuits and judgments that could have been avoided if you just paid your interns. Just last year, NBCUniversal agreed to pay a $6.4 million settlement in an unpaid internship case.

So, are unpaid internships even worth the hassle? Here is a round-up of our best unpaid internship articles to help guide you through the legalities hiring an unpaid intern:

As a small business owner, you've probably weighed the pros and cons of hiring independent contractors or full-time employees. And you've also hopefully considered the possible penalties for misclassifying workers as independent contractors when they're really employees.

The IRS has been consistently cracking down on independent contractor use, but they're not the only organization you need to be wary of. Here's what can happen to employers that misclassify employees as independent contractors.

Quick, a customer is choking on his couscous. Call 911! Or not?

If a customer chokes, gets sick, injured, or has a medical emergency at your business, do you have a duty to help them? Is it enough to call 911? Do you have to take extraordinary measures to save them? Should you train your employees in CPR or the Heimlich? Or, can you sit idly by without fear of criminal or civil liability?

Here is what you need to know about a restaurant's duty to help:

It's every small business owner's worst nightmare: finding out you've produced and sold a defective product. And from listeria in food to ignition switches on cars and even exploding bottles of marijuana soda, it could happen to any business.

If you've got a defective product on the market or in the hands of consumers, you might need to institute a recall. Here's how to recall a product responsibly and legally:

Have you considered enrolling your eligible employees in Medicaid?

Under the Affordable Care Act, employers with 100 or more full time workers must offer affordable health insurance coverage. In 2016, employers with only 50-100 employees will also have to comply. With the high cost of health insurance, offering health insurance to employees could have a major impact on your business' bottom line.


We do our best during the hiring process to screen out potential conflicts and hire staff that we think will get along. That doesn't always work out.

If you've had a verbal or physical altercation between employees, you may be wondering what to do next. Here are a few legal considerations if your employees got into a fight.

How to Avoid TCPA Lawsuits

Do you advertise your business using telemarketing? If so, you should be aware of the Telephone Consumer Protection Act (TCPA).

In reaction to growing telemarketing practices, Congress passed the TCPA in 1991. The law prohibits the use of automatic dialing systems, and sets strict restrictions on calls and text messages sent to consumers.

Business is about maximizing profits by raising revenue and keeping costs low. But, business owners should also consider the human costs.

New York nail salons are getting a tough lesson in humanity from Governor Andrew Cuomo. The Governor recently issued an emergency order calling for rules to protect nail salon workers from wage theft and mistreatment.

Have you noticed that inventory has been unusually low? Are your sales uncharacteristically lower than usual despite normal traffic and inventory turnover? Do you suspect employee theft or customer theft?

Whether its $5 or $50,000 that has gone missing, theft by an employee or a customer is a problem that should not be ignored.

What do you do if you notice theft at your business?

So you've weighed the pros and cons of incorporation and you've decided to take the next step and form your small business as an LLC. As you move down your LLC to-do list, you see: "File your LLC's Articles of Organization with the Secretary of State office in your state."

Wait, what are articles of organization? And how are they important to your business? Here's a quick background and a few tips on writing and filing your LLC's articles of organization.

Even though we live in a free market, business is highly regulated by wage and hour laws, tax laws, intellectual property laws, anti-discrimination and harassment laws, etc.

While asking forgiveness instead of permission may be a good policy elsewhere, you do not want to do that with your business. Operating your business in violation of any of the myriad of laws could cost you thousands, even millions, of dollars.

Protect your business and your hard work. Comply with the law, and get the proper legal advice to help. Here are three things all business owners should discuss with their lawyers:

Most business owners would be stunned to learn an employee is accusing them of illegal or unethical business practices. And more than a few would be angered to the point of retaliation.

That would be a bad idea. Facing a whistleblower case would be anyone's nightmare, but here are three ways to avoid making it worse.

You run an efficient business. When you sign contracts, you expect them to be completed as agreed upon in the time period allowed in the contract.

So, what can you do if you get apples when you asked for oranges? Or, what happens when you ask for your bread delivery at 5 a.m. but don't get it until 7 a.m.?

If the other side breached a contract, what can you do, and when can you do it?

Summer is almost upon us. And with that comes new regulations regarding outdoor employees.

The Occupational Safety & Health Administration is conducting a "Water Rest Shade" campaign to protect workers from sun and heat-induced illnesses, and new regulations went into effect on May 1. Here's how to comply with the law and keep your employees safe this summer.

Being an employer is hard. You have to balance sometimes hard or risky business decisions without getting sued for harassment and discrimination.

Depending on your business model and company culture, certain features of your employees appearances may be inappropriate for work.

How can you legally critique an employee's appearance without getting sued?

After watching the events in Baltimore last week, or those in Ferguson last year, business owners can't help but wonder if the same couldn't happen to their downtown storefronts. And if so, will insurance cover the damage from riots and the loss of revenue from curfews?

Let's take a look at some common business insurance policies and see if you and your small business are covered.

Mixing family and business can be as emotionally and financially rewarding as they can be legally troublesome. No one wants the workplace to intrude on their homelife, so how can we keep our family business from coming in between family members?

Here are three legal tips for your family business:

It's a brave new world. The District of Columbia and a majority of states have legalized the use of medical marijuana. In Oregon, Alaska, Colorado and Washington, you can now use marijuana for recreational purposes.

With several more states considering legalizing marijuana, enterprising business people are lining up to get a piece of this growing and emerging market.

So, you want to start a cannabusiness. Here are three things to know about a marijuana start-up:

First and foremost, you want employees that can do the job -- capable, competent, and committed. After that, you're probably looking at an employee's interpersonal skills and how they represent your company to the public.

But there might be some different traits you'll want to keep an eye out for when hiring, like the skills or qualities that can keep your company out of legal trouble. Here are three of them: