Free Enterprise - The FindLaw Small Business Law Blog

January 2016 Archives

Do Private Cannabis Clubs Make Public Smoking OK?

For marijuana consumers, the problems just keep getting better. Not many years ago, it seemed that legalization of the drug was a pipe dream. Today many American states are decriminalizing or legalizing cannabis. In Colorado, the issue now is public consumption.

You can go to bars and have a drink in Colorado. But you can't smoke legal weed anywhere but at home, making consumption confusing for tourists. Marijuana use has been banned at hotels and in public generally but resourceful enthusiasts are working round the prohibitions with cannabis clubs, places where people can go to hang out and smoke. Are these clubs legal?

Are You Liable for an Employee's Violence?

Usually you like to think of your place of business as reasonably pleasant. But recently your employee committed a violent crime -- at work! Apart from the blow to your ego, you are concerned about liability.

Can you be held responsible for an employee assault? How common is workplace violence anyway?

What to Do If Sued for Negligent Hiring

Getting sued is always a pain -- there is really no other way to put it. Even if you have done nothing wrong, you'll need to respond to filings on deadline and submit to questions and spend your time on a complaint. Negligence in hiring suits are no different in this regard.

But they are a little harder than some other claims insofar as you're being blamed for systems you may not have put in place, or which you do not now oversee personally, rather than a negligent action you took. Regardless, if you are responsible for hiring, you should acquaint yourself with the concept of negligence in hiring.

Ride-sharing company Lyft will pay $12.25 million to settle a class action lawsuit with its drivers over their employment status and compensation issues. This could be seen as a victory for Lyft, since the settlement will allow the company to avoid classifying drivers as employees and the additional costs and legal liability that would entail.

It also remains to be seen how this will affect current litigation involving Lyft's main competitor, Uber.

Noah's Ark Theme Park Can Hire Based on Religious Beliefs, Judge Rules

In a battle between two important American principles -- religious freedom and separation of church and state -- our prime directive prevailed. A Kentucky judge concluded this week that a religious theme park cannot be denied government tax incentives if it restricts hiring to fundamentalist Christians because the Noah's Ark park serves a plainly secular purpose -- profit.

Answers In Genesis, "a non-denominational group, which believes in creationism and runs the Creation Museum," sued Kentucky when it withdrew tax incentives for fear the park would hire only fundamentalist Christians, according to Reuters. But U.S. District Judge Gregory Van Tatenhove wrote in an opinion issued Monday that while the group is "clearly a religious organization," religious tourist destinations nonetheless serve the state's "secular" goal of increasing local revenue.

It's the time of year again -- two weeks of hype, anticipation, and chatter about the upcoming Super Bowl, and this isn't just some idle water cooler chat in the office. The big game can have a huge impact on your business, for better and for worse.

So how can your small business take advantage of the Super Bowl without getting into legal trouble? By following these 3 tips:

Business Tip: How to Be Productive on Your Lunch Hour

You start hustling first thing in the morning and you don't stop all day long. On a good day, you take ten minutes to grab a sandwich and eat it at your desk. You think you're doing your best and showing true commitment to your work.

But there is plenty of evidence that shows stepping away will not only improve the quality of your day but the quality of your production, too. Here are some things you can do to make your whole day more successful, based on a Fast Company's suggestions on what successful people do during lunch breaks.

On the one hand, small businesses are trying to take advantage of temporary, seasonal, and contract workers. On the other hand, more and more people are working multiple jobs. All this against a backdrop of startups and Internet businesses with employees that wear a number of hats.

The point is, joint employment is becoming more common. And, according to this warning from the American Bar Association, litigation based on joint employment could be on the rise as well. But that doesn't need to be the case for your small business. Here's how you can avoid joint employment lawsuits.

You're small. You're just getting started. You may not even have many resources, let alone an entire human resources department. So you're probably thinking you can keep any hiring pretty informal. No need for tedious forms, checked boxes, and extra paperwork, right?

Not so much. While an employment application may seem antiquated in the days of LinkedIn, there are good legal reasons to have one, and one that suits your small business and the positions for which you're hiring. Here are a few of them.

Will This Work? How to Inspire New Hires

Employment is a relationship. When you hire an employee, you probably expect them to be at their best and show you what they can do. But if you hire someone who doesn't try to prove their worth, do you need to worry that you made a mistake? How long do you wait before deciding the new guy's not a good fit?

Only you can answer those questions based on what you and your business will tolerate. But here are signs that should serve as warnings of a poor work ethic ... and some things you can do as an employer to make yourself worthy of the best work.

Is 2016 the Best Year Yet for Small Business Hiring?

For many years it has been an employer's market. The economic downturn of the last decade put people out of work at worst and on a tortuously slow career track at best.

These have been the years of making do for employees as corporate America has slashed jobs and replaced them with contract gigs, all of which is good news for you, the small business owner, according to The Daily Herald. Why? Because big business is no longer attractive to many American workers and, generally speaking, they are not expecting much anymore.

Walmart announced last week that it will be closing 269 stores and laying off thousands of employees by the end of the month. But the news isn't all bad for the brand -- the mega-retailer also announced plans to open 300 to 400 new stores in the next year, most of those overseas.

It's worse news for the thousands of employees that may need to find new jobs. Due to this concern, federal law requires employers to alert employees before mass layoffs and possibly provide skill training or retraining programs for affected workers. So does the law apply to Walmart's store closures? And did they comply?

Gender Trends: Men's Groups Suing Women for Discrimination

Women have been in the workplace a while now and the statistics are starting to reflect their successes. But there are efforts being made -- in the sciences and technology particularly -- to bring more women in. So is it too soon to sue women's groups for discrimination when they network without men?

Some men say no, it's not too soon, reports Mother Jones, and they are members of the National Coalition for Men. In lawsuits they filed against women's networking groups, the men are claiming discrimination. The problem, these men say, is that women are blatantly keeping them from professional opportunities when they don't let them attend women's-only networking events.

Nobody wants to bail on a business they built from the ground up. But some circumstances, like enough success to be acquired or a necessary shift in the company's strategy, may require a founder to step aside.

Finding yourself in this situation can be heartbreaking or a blessing, but either way it can also be legally complicated. And you may need to be careful to protect yourself, your finances, and your future if you plan on leaving the company you've founded.

What Does It Take to Open a Chick-Fil-A Franchise?

Many people dream of owning a business but would prefer not to have to put all the parts together. Franchising is a good option for them because they buy into an existing business that has already established all the basics -- what to sell, how to package it, how much things should cost, supply, marketing, and more.

But franchising has certain financial requirements. Buying in can be prohibitively expensive. Not so for Chick-Fil-A. It has the lowest startup cost of any franchise and no minimum net worth or liquid asset requirements, according to Slate and Business Insider. But there's a catch.

As the American craft beer scene has exploded over the last decade, so has the amount of litigation involving craft breweries. Beer makers are going to court over everything from labels and naming rights to trademarked tap handles and whether the beer they make can even be called "craft beer."

Not only have these sudsy spats caused brewers time and money, but some customers as well. It turns out, much like parents with rowdy children, they don't like seeing their favorite breweries fighting. So what can your small business learn from the latest craft beer legal wranglings?

5 Mistakes to Avoid When Buying a Business

You're interested in buying a business and you've done all the research on it, so you are ready. Or are you? What should you be aware of before you buy? Let's take a look at 5 common business buying mistakes and how to avoid them.

Federal prosecutors served Chipotle with a subpoena as part of a criminal investigation into the restaurant's involvement in norovirus outbreak last year. The Department of Justice and the Food and Drug Administration opened the investigation after E. coli outbreaks sickened hundreds of Chipotle customers.

Chipotle's in-store sales and share prices have been plummeting since multiple norovirus outbreaks occurred last fall in California, Massachusetts, Oregon, and Washington.

Win-Win-Win: What Businesses Get From Powerball

Tomorrow's Powerball is inspiring millions of workers to dream of a day when they will be free. No more boss. No more job. And 1.5 billion dollars to play with! What could be better?

But what about the stores that sell these lottery tickets? What's in it for them? And is this a business you want to get in on? Is the lottery a money maker for retailers?

Whether you're looking to open a recreational shop in Colorado, Oregon, or Washington, or a medical dispensary elsewhere, your marijuana retailer will be like any other small business -- you'll need insurance. Of course you'll need standard workers' compensation and theft protection policies, but there may be additional insurance coverage you haven't thought about.

Here are some liability insurance concerns for marijuana businesses.

When Should You Sue an Employee?

Your best worker just left the business and you are sad to see her go. But when she posts up across the street from your shop and starts selling the same products to your customers, your disappointment turns to rage. Do you have any recourse? Can you sue her?

You should consider suing an employee if they breach an employment agreement. So if you have a non-compete clause in the employee's contract and it covers a few years and a 100-mile radius but now she's waving at you from her window, it's time to make a move. Enforcing that non-compete clause could be very meaningful.

First it was Moments. Then they traded out stars and Favorites for hearts and Likes. Now Twitter might be altering one of its original features, the 140-character limit on tweets.

Twitter is apparently toying with the idea of upping that limit to 10,000 characters, and users are already up in arms. But could this be a good thing for your small business?

Did Fed Interest Rate Hike Ignore Small Business?

The fact that the Federal Reserve Bank raised a key interest rate last month could be considered a positive sign. Is this an indication that the Great Recession really is behind us and that there is economic prosperity ahead?

That would be great news for small businesses. But of course, there are dueling views. An editorial in Fortune warns that the rate hike might just be a sign that the big guys who pushed the market to the brink have recovered, not that there is smooth sailing ahead for small businesses or workers. Let's consider the concerns.

Is Your Business Website ADA Accessible?

You want your business to succeed and you try to stay abreast of all legal and industry developments to ensure that you are on top of things and out of trouble. But it is difficult to be aware of all the government agencies and all of the regulations that might impact your business.

Here is a fine example. In 2010, the Department of Justice proposed new rules outlining what businesses would need to do to bring websites in line with the Americans with Disabilities Act. Governmental websites already follow these rules, and businesses that are considered public will have to make accommodations too, although it is not clear how soon the rules will take effect.

January 19 is the first day of tax season, so make sure your tax stand is ready and you only bag as many taxes as your hunting license allows. We kid. Actually, the Tuesday after next is the first day the IRS will begin accepting tax returns, and will continue until Monday, April 18th.

Two weeks is enough time to get everything in order, right? It is, and here's what you need to do:

Feds Give Employers Guidance on Form I-9 Audits

Two major federal government agencies last month issued new guidance for employers on handling employment eligibility verifications for immigration purposes. The guidance highlights the Catch-22 employers face trying to comply with immigration law.

Employers are required to check prospective employees' ability to legally work here, according to federal law, but the government's guidance urges employers to ensure that their internal audits of this verification process are not discriminatory. This puts employers in a bit of a bind, according to the Washington Examiner.

Startup Must-Do: Drafting a Vesting Agreement

You are enthusiastic and energetic and you believe in your new business. In fact, you believe in it so strongly that you're too busy working to protect it legally. That's a mistake.

In the beginning stages of a startup venture, you may rely on goodwill and drive. But don't leave yourself or your business vulnerable to changing winds. A vesting agreement protects new businesses and individual partners, ensuring that dedication to the company really does pay and that no one can walk away early and still get rich.

Equality Coast to Coast: Fair Pay Laws in 2016

Two new equal pay laws, enacted in New York and California, go into effect this month. They aim to make 2016 and beyond better for women workers, who are consistently paid less than men for the same work.

The California law went into effect on January 1 and has been called the nation's toughest fair pay legislation yet by the Los Angeles Times. The New York law passed with 7 others as part of the Women's Equality Agenda and will come into effect on January 19, according to Newsday. Both laws prohibit wage differentials between men and women. They also change how unequal pay claims are proven and defended.