Free Enterprise - The FindLaw Small Business Law Blog

June 2016 Archives

Do Small Biz Tenants Need More Protection From Landlords?

Commercial tenants have it tough. Sometimes landlords have their own plans for the space where you make your living, disrupting your business and earnings. This is just one reason why New York Mayor Bill de Blasio signed a law that shields mom-and-pop shops from landlord harassment.

Calling small businesses essential to the city, the New York mayor said the new law will protect these shops from harassment and penalize offending landlords. But for some business advocacy groups the law does not go far enough and they are pushing for additional protective measures on behalf of commercial tenants.

Managing Brexit Uncertainty, Market Volatility, and Your Business

Last week, Britain stunned the world by voting on a referendum to leave the European Union, known as Brexit. Now the stunned world is trying to figure out what the implications of this decision will be for Britain, European Union nations, and the rest of us.

Some experts say that Britain's decision could lead to a slowdown in local small business lending by banks and decreased spending by American consumers, which directly impacts businesses. Let's consider why this might be and what Brexit means to you.

Small Businesses, Beware Fake Government Agents

Have you ever gotten a shady phone call from someone claiming to be a government agent? Individuals get these calls all the time, with fraudsters claiming they are calling on behalf of tax or other authorities. But businesses too are targets for scammers, and ABC News reports on the latest trick aimed to deprive your business of its hard-earned money. Consider this a warning about workplace warning posters.

Whether you're a seasonal business booming in the summer months, or a year-round shop wanting to give kids a job on their summer breaks, hiring temporary employees for a few months can be a great way to expand your business and provide valuable learning opportunities. That's if you do it right. Hiring summer employees isn't always as simple as throwing someone on the payroll in July.

Here are five tips for getting your summer hiring decisions right, from our archives:

Your small business isn't located in London. You don't have clients in Northern Ireland. Heck, you don't even know anyone in Scotland, and the closest you've come to Wales was seeing Shamu at Sea World. But if you're thinking that means last week's Brexit referendum won't have an impact on your operations, you may want to think again.

Many financial market observers are seeing an indirect impact on small business, not in sales but in small business lending. So will Britain leaving the EU leave your startup or small business without the funding it needs?

Risks and Returns of Litigation Finance as an Investment

You're in business so you find investment opportunities interesting and are curious about this thing called litigation finance. What exactly is it and how risky is this investment?

Litigation finance is investing in lawsuits and, depending on the outcome, collecting a portion of judgments or settlements. Like any investment opportunity, it comes with risks and the better you understand litigation finance the better equipped you'll be to determine if it's for you.

3 Contract Drafting Tips to Help Your Business

If you are in business, then you definitely enter contracts regularly. Sometimes you're buying and sometimes you're selling, but most likely you're dealing quite a lot.

In light of that, you should create standard contracts for your business, or form agreements that are both general enough to work for different kinds of deals but specific enough that they address your priorities. If you don't do this, chances are good that you'll be continually getting into agreements that are on others' terms. That might work some of the time but it's not an ideal approach.

In today's small biz world, many startups, especially Silicon Valley-based tech companies, are asking early employees to forgo high salaries in favor of shares in the company, essentially betting on their own future success. Such equity arrangements can be great for employees and entrepreneurs alike, but they may come with a snag: how can new employee-shareholders find out how much of the company they're getting and how much their shares are worth?

For publicly traded companies, it's easy -- check the share price. But for privately held startups getting that kind of information is more difficult, if not impossible. But an oft-overlooked Delaware incorporation law may be opening the books to shareholders. Here's what you need to know:

Brexit and Your Business: Making Sense of Events

The British are not coming but they may be going, or Brexiting if you will, quitting the European Union. The referendum is being voted on today and if they don't remain, this will impact business internationally, including here in the US.

But there are a lot of factors that influence the economy, and isolating which precise event caused what outcomes is impossible. In fact, that is why the British are voting on exiting the European Union despite reports that partnership has led to prosperity and that Brexit could be a headache. Let's try to make sense of it all, to the extent possible.

High Court Says VA Must Open More Bids to Veteran-Owned Businesses

Sometimes but not that often everyone on the US Supreme Court agrees on a topic. That is what happened last week when the eight justices had to consider government contracts for veteran-owned businesses. The nation's highest court decided last week that the Department of Veteran Affairs must set aside more contracts to be filled by veteran-owned small businesses, and that it's not optional as lower courts ruled.

The court's reasoning was remarkably simple and straightforward, and its decision turned on one word: "shall." The hope is that veterans in business will be awarded more government contracts as a result. Let's consider the case, reported by The Washington Post.

Turning your dream job into an LLC can make you feel like you finally made it. Or it can feel like a needless hassle that will corporatize your mom and pop shop. Most often, what incorporating your small business will mean is legal protection for both you and your company.

So if you're still weighing your options, or if you've just begun the incorporation process, here are seven big questions you'll want the answers to:

Marijuana Startups Still Face Many Legal Obstacles

Marijuana has come to seem like the growth industry to get in on for anyone who can handle a little uncertainty. States are increasingly legalizing cannabis for medical or recreational use, sometimes both, and celebrities are scrambling to establish marijuana brands while the industry is still young. It seems like those who invest in cannabis today could do great financially down the line.

But the cannabis business has its own special wrinkles. Even if you believe in weed and want to see marijuana businesses succeed, you need to be aware of some legal issues that continue to threaten the industry, despite its increasing legitimacy.

Labor Regulation and San Diego's New Minimum Wage

San Diego is the latest city to raise the local minimum wage and outline obligatory accrual of sick leave for employees. The change will take effect as soon as July of this year, JD Supra reports, but won't apply retroactively.

The measure will gradually increase the minimum wage for workers in San Diego, and provide much-needed sick leave. As soon as it takes effect, employees will see a 50 cent bump in hourly wages to $10.50. In January, there will be a one dollar bump and from 2019, wages will increase with the cost of living annually, based on the Consumer Price Index for the previous year. Let's consider labor regulation in the Californian city and beyond.

It's a balance that we Americans are consistently told we get wrong: weighing the responsibility of getting work done against the need for vacation, rest, and travel. We always hear how the Europeans got summer vacation right, and when we try to make it up by offering employees more paid vacation days, they're too afraid and stressed to take advantage.

So does taking care of your employees mean kicking them out of the office for at least three weeks this summer? The New York Times seems to think so. Here's how the three-week vacation could work for your small business.

Can Businesses Ban Gun Owners?

The owner of two restaurants in Portland, Maine ignited a national debate after she claimed on Facebook that she would no longer allow owners of semi-automatic rifles in her businesses. Anne Verrill's post, which has since been removed, raises interesting questions, one of which is: can she do that?

Actually, it seems highly unlikely. Let's consider the legality and practicality of the proposal.

If your small business handles enough credit card transactions, you already know how much of a hassle they can be. There's the processing equipment, the interchange fees, the data security issues, and the risk of fraud, all of which can fall on the small business owner. But a slightly larger business has decided to fight back.

Home Depot filed a federal antitrust lawsuit against Visa and MasterCard, claiming the two largest credit card issuers colluded to hike transaction fees and suppress new chip-based card technology that can prevent fraud. So what does this mean for credit cards at your small business?

Austin Drivers Sue Uber, Lyft for Back Pay

The ridesharing companies Uber and Lyft, which recently left Austin to avoid driver safety regulations, are being sued in two cases by Texas workers who say they were laid off without fair warning. The drivers say the companies violated federal regulations requiring employers with 100 or more workers to provide 60-day notice of layoffs.

The companies are probably not alarmed -- between them they face almost 700 cases of labor violations and other infractions, according to Courthouse News Service. They are used to fighting. Meanwhile, the drivers seek class certification, a declaratory judgment that the companies violated the WARN Act, an injunction, 60 days of lost wages and benefits, and statutory damages.

Unicorns Seeking Angels: Share Investor Info Evenly to Minimize Liability

Do you remember when everyone was planning to get rich by getting in on the ground floor of the next great tech startup? Well, those days are already over and, despite the enthusiasm for technology generally, startups are facing increasing scrutiny from investors and regulators.

Bloomberg reports that we can expect a lot of investor lawsuits in the near future, and many of them will be focused on information sharing. Startups don't have to follow as many rules as public companies and, anyway, they pride themselves on disrupting business as usual. But sharing information evenly with all prospective investors is a rule every business should have.

The last two major mass shootings, in San Bernardino and Orlando, didn't happen in public parks or streets -- they happened in places of business. This has a lot of employees wondering if they can bring guns to the workplace for self-protection and a lot small business owners wondering if and how they can ban firearms in their businesses.

Small businesses of all kinds are intersections of owner prerogatives, employee interests, and customer rights -- so how do these balance out when it comes to guns at work? Here are three main concerns, and some advice, from our archives:

Feds Put FedEx on Trial for Illegal Drug Delivery

FedEx is on trial in federal court in California for delivering drugs, among other charges. The delivery giant is accused of knowingly dropping off millions of packages from illicit internet pharmacies, and the prosecution in its opening statement likened the package distributor to a part-time drug dealing operation.

Of course, FedEx can't be held responsible for what people mailed if it did not know that internet pharmacies were delivering illegal items. But federal prosecutors say that they have evidence that FedEx not only knew about the illegal drug deliveries, but worked to keep this type of business and to ensure customers did not switch to the competition, according to Courthouse News Service.

Small business owners are always trying to get the most out of their employees. Advances in the type of work we do, and the technology with which we do it, have given bosses more options than ever for squeezing every last idea and project out of their staff.

We're no longer tethered to our desks or out-dated tech, so why are we still tethered to a standardized amount of time for work? The eight-hour workday has been a staple of work in America for centuries -- is it time for it to retire?

Bosses: What to Do Before Hiring

You have a lot to do -- you're the boss. Your business demands a lot from you. For that reason, you rely on others to comb through resumes and vet candidates for positions. But picking a person who will fit in at your company, truly, and produce the quality of work you demand, requires your involvement.

According to a Gallup poll discussed in Fortune, companies choose the wrong person for a job more than 80 percent of the time they hire. That means four out of five new hires are are not well-suited to a job they were offered. The solution to this costly and time-consuming problem may be relatively easy, however. It just requires extra attention before making the final hiring decision.

Gawker Files for Bankruptcy, Plans Auction and Resurrection

Gawker, the audacious upstart media company that lost a privacy trial to Hulk Hogan in Florida recently, is paying heavily for its audacity. Today it formally filed for bankruptcy and is entertaining offers from prospective buyers, reports Recode.

But don't wave goodbye to Gawker yet, as it is still a feisty company, and this is not clearly a sign of defeat. In fact it's a sign of more fight. Although it announced its intention to file for Chapter 11, the company's owner Nick Denton said that he intends to continue to publish and to fight the legal battle against Hulk Hogan, sponsored by billionaire Peter Thiel.

What Workers Need: 3 Tips for Making a Great Company

Bosses are forever writing articles and giving talks to other bosses about how much people love to work for their companies because they are awesome. Keep in mind when you read this guidance from people who are in power that they are necessarily disconnected from the trenches.

If you want to know what people need from their jobs, ask workers. Even famous companies that get much credit for friendliness have disturbing business practices that call their claims to fame into question. So turn off the superstar CEO TED talk and chat with your team. Here are three tips for developing a successful small business that gets the best from its people.

When to Incorporate When Buying Into a Franchise?

Starting a business involves so many different types of tasks that the business owner, especially in the beginning, has to wear a lot of hats. This is why many people who wish to start a business consider franchising, or purchasing the right to open a branch of an existing business.

Buying into an existent brand that is already successful doesn't eliminate the risks or difficulty of running your own shop, but it certainly limits them a lot. When you do buy into a franchise, keep in mind these critical tips from CorpNet Founder and CEO Nellie Akalp. One of the first questions you have to address is this: when and how should you incorporate as a new franchisee?

Illegal Sales Tactics Businesses Must Avoid

You are not only a business person but a person, and you know how annoying other people can be, especially when they are trying to sell you on something. Yet you read so much different business advice that you can't always figure out when to be aggressive and when to be nice.

Opt for the latter whenever you wonder what approach to take because there are some deceptive trade and sales tactics that are not only unpleasant for the customer, but also illegal. Let's look at some sales tactics you should absolutely avoid for your sake and that of your customers.

Any small business can be the target of crime, from outsiders or employees. And as small businesses have ramped up their technological know-how, so have scammers. So cybersecurity, credit card fraud, and sham office supply schemes are just a few of the concerns the average business owner needs to add to her already full plate.

Here are seven of the most prevalent small business crimes and scams, and what you can do to protect your small business, from our archives:

3 Tips to Scale Your Business and Reach the Next Level

When you first start a business, you do whatever you can to survive and you find people who are flexible and can do as much as possible. But as your business grows, you need to consider how to improve processes and ensure that your expansion and actions are sustainable.

Some startups are never lucky enough to have the problem of scalability. That's because they don't do enough to manage the internal culture and ultimately never reach their full potential. So let's consider a few tips from Doug Bewsher, CEO of San Francisco tech firm Leadspace, who spoke to Forbes about what he's doing to ensure that the trajectory of his company continues onward and upward.

No business wants to get dogged in a Yelp review, especially dog walking and sitting companies that thrive on word of mouth and positive customer feedback for new clients. But could a lone one-star Yelp review really cost a Lone Star state pet sitting company $1 million dollars in lost business?

That's what Dallas-based Prestigious Pets is contending, after a couple left a less-than-stellar Yelp review of their dog-walking and fish-feeding services. And even though the company may be trying to send a message to consumers, this may be a valuable learning experience for small businesses on when you can go too far to protect your image.

Is Your Employee Wellness Program ADA Compliant?

Increasingly, medical experts are advocating employee wellness programs that take a proactive approach to health. These programs focus on disease prevention and wellness over treatment and illness and are considered cost effective, in addition to keeping workers fit and in good spirits.

But before you implement one of these in your business, you do need to be aware of the fact that there are many different rules to follow. And just because your business's program is in compliance with one health law, does not mean it has complied with all requirements. Recently, the US Equal Employment Opportunity Commission (EEOC) issued guidelines advising employers of just this and finalizing a rule on compliance with the Americans with Disabilities Act (ADA), reports the National Law Review. Let's take a look.

3 Things Not to Do When Your Biz Is Sued

You're in business because you believe people can be convinced of things, for example to purchase your products or services. So when you are served with a lawsuit, you might want to do all kinds of things that will convince the plaintiff that you're a decent human who would never cause anyone harm. Don't do that.

There is no single approach that works for all lawsuits. But there are definitely some things you don't want to do when your business is sued. Let's consider.

Step One: Make sure your great idea makes for a great business. Step Three: Grow the heck out of your business. What's Step Two? Making sure your startup doesn't trip up in the meantime. And one of the biggest hurdles most new businesses face is the numbers game involving income, profit, overhead, and expenses.

You may have just turned the lights on in your small business, but customers, clients, partners, and investors will want to shine a light on your books. Here's how to get your startup's financial house in order.

Learning From the Rapid Rise and Fall of Startup Billionaires

It's easy to get a complex about not being a billionaire when there are so many of them now, and so young. For example, last year Elizabeth Holmes was on top of the world, worth billions of dollars due to the valuation of her company Theranos. There's also Parker Conrad of Zenefits.

Today both companies are worth substantially less than last year, face criminal accusations, and the founders appear to have deceived people they met on their meteoric rise to the top. What's the takeaway for you in the story of these booming startups that seem to be stalling out?

3 Data Security Tips for Small Businesses

You put everything into your small business -- time, energy, love, and money -- so it's important to keep it secure. Threats come in all forms and sizes and they can end up costing you everything you worked for if you are not careful.

With businesses increasingly reliant on electronic tools, you cannot afford to be ignorant of or indifferent to issues like data breaches and hacker attacks. Here is some guidance from security experts who spoke to Entrepreneur about how small businesses in particular can protect their operations.

Having a great idea is a good start. But what really makes a company successful is happy, capable, and motivated employees. And that corporate culture starts with you, the boss.

Here are nine ways to set the right tone for your employees, from your first hire to the occasional failure: