Free Enterprise - The FindLaw Small Business Law Blog

July 2016 Archives

Small business owners are protective of their brand. And there is the natural tendency to lash out at anything -- fake online reviews, defamatory comments, or intellectual property theft -- that threatens the integrity of that brand. Heck, even Donald Trump (or more accurately, especially Donald Trump) goes after those he thinks might harm his image.

But sometimes those efforts can backfire, as The Donald himself demonstrated last week, via an ill-advised and subsequently eviscerated cease and desist letter. Let this letter be a lesson to entrepreneurs and small business owner about the limits of defending the brand.

What to Consider When Hiring a Security Guard

It is time to hire some muscle, or you think it might be. But you have never done such a thing and are not even sure what exactly you need to know. In fact, you may not even know how to go about finding a security guard that is appropriate for your business.

Beyond finding and hiring the right person, you also need to figure out the details of your guard's job. There is actually a lot to consider, so let's do that here.

3 Areas of Law That Business People Must Know

You did not go to law school because the law is not your shtick -- business is. But now that you have your MBA framed and up on the wall and your startup has gotten financing, you realize that there is no escaping the law.

Every time you want to do something, hire someone, or strike a deal, legal issues are implicated. There are some areas of business regulation that you simply can't ignore, so let's briefly consider employment, contracts, and taxation.

Some are forced by local, state, or federal law, while others are forced to compete for the best talent, but most small businesses are upping their employee benefits packages, especially when it comes to offering family leave. Employers are offering more time off, more of it paid, and to more of their employees.

So if you're wondering whether expanding your family leave benefits is the right thing to do, or a legal thing you must do, you've come to the right place. Here's what you need to know about family leave and your small business:

CA Lawsuits Target Disparity in Service Pricing for Men and Women

Have you ever noticed that some kinds of businesses charge women more for the same services as men? California lawmakers noticed this a while ago and called for an end to the gender discrimination in pricing for haircuts and other services in 1995.

But the disparity in prices for men and women receiving the same services persists in some places, which is why one woman is suing salons and dry cleaning businesses in Riverside, California. There have been about 11 lawsuits filed since April, the Press Enterprise reports.

Employees Increasingly Suing for Family Leave Discrimination, Study Finds

As an employer you know that you have to allow your employees family leave and you believe you are following all the applicable laws ... or at least you are doing your best. But you should really check that your policy does comply with the patchwork of laws that apply to this topic, lest you find yourself sued.

According to a study by the Center for Worklife Law at the University of California Hastings, lawsuits over family leave issues are on the rise. Employees win about half of these, a much higher proportion than other types of work discrimination cases, reports the Huffington Post. Here's what you need to know.

Not all small businesses can take care of everything in house -- some of us need to subcontract out different pieces of our business, whether that be advertising, construction, production, or distribution. And if you're one of the many small businesses that regularly uses subcontractors, or a small business that regularly acts as a subcontractor, you may want to pay attention to some new federal rules imposing additional obligations on prime contractors and what happens if they fail to satisfy those obligations.

Here's a breakdown of what the Small Business Administration decided, and how it could affect your small business.

Managing the Rising Minimum Wage: 3 Tips for Small Businesses

In recent years, states and even some big cities like San Francisco and Los Angeles have been passing new mandatory minimum wage laws that will be phased in over time. These gradual pay hikes are meant to protect workers, of course, and minimize the strain on employers accommodating the wage increase.

But for small businesses operating on tight margins, even a small mandatory increase spread across all employees can be painful. A raise to workers means increased payroll taxes and potentially other added expenses to the extent your employees receive benefits. Let's consider a few suggestions from Forbes on how to manage a minimum wage increase.

When you own a small business, it's all about income. A classic shop or store may have profits from sales or service. A startup may have venture capital money coming in. In either case, you might need to get a little more creative with your revenue streams. Individuals and investment funds can make money off the stock market, so why not your small business?

But before you start day trading with company funds, here's what you need to know about your small business investing in stocks.

As an employer, you have many responsibilities with respect to workers and employees. You must pay certain taxes and contribute to various state and federal programs, and you must verify the employment authorization of each worker.

In the words of the United States Citizenship and Immigration Services, "Employers have certain responsibilities under immigration law during the hiring process." So let's look at your obligations and the penalties you face if you fail to fulfill your duty to the federal government.

Ah summer -- the time when all your employees (and you) want to head to the beach, the lake, the river, the pool, the national park, the theme park, the park around the corner ... anywhere but the office. But there's no way your small business can survive a mass exodus this summer.

Balancing your company's needs with your employees' happiness can be a challenge. So here's how to let your staff play while making sure the work gets done, and making it all legal.

In almost every employment scenario, you don't need a reason to fire an employee. Most employment arrangements are "at-will," meaning the employee is free to leave and the employer is free to fire, with or without a reason.

But while you don't need a reason to terminate an employee, you're also not allowed to use a bad reason. So if you're going to fire someone because of something they did, here are some legally justifiable reasons you can use and one that you'll want to avoid at all costs:

3 Ways Business Owners Accidentally Break the Law

When you go into business for yourself, there is a lot to think about. It is doubtful that even the savviest entrepreneur has the energy, attention, knowledge, and time to handle every aspect of operations. So you focus on the things that seem most important at first, prioritizing wisely as all the business gurus advise.

But it would also be wise to keep in mind the things that cannot be put off or ignored. All too often entrepreneurs are overly-focused on making things happen and insufficiently concerned with preventing legal disaster. As a result, they unwittingly break the law. Let's look at three critical considerations that will help ensure your business is sustainable.

You want to provide your employees with the best benefits to keep them happy. And after crunching the numbers, you figured that if you cut out the insurance middleman, you can pay your employees' medical claims directly, effectively acting as their insurer. This system is known as self-insurance, and after a period of prohibition in some states, self-insurance is coming back to the small business world.

But what happens in a catastrophic case? Could one employee's medical bills bankrupt your company? Possibly. That's why you might be interested in what's known as a stop-loss insurance policy. So how does stop-loss insurance work? And does your small business need a policy?

Patent Basics for Entrepreneurs

Every entrepreneur needs to know something about patents, lest you miss an opportunity to invest in a lucrative new invention. Or worse, fail to patent yours as promptly as possible.

Patents are part of a system for organizing intellectual property. They protect inventions, so you need more than just an idea to be granted a patent and applying can be an arduous process. Still, wait too long and someone may beat you to the punch. So let’s get started.

Schoolyard bullies grow up, graduate, and get jobs. And sometimes their bullying doesn't stop once they've left school. Harassment, stalking, and other forms of bullying need to be a concern for small business owners, especially now that their employees are often connected through social media as well as through a shared office.

So how do you create a corporate culture that prevents workplace bullying? And how do you deal with bullying incidents should they arise? Here are five pieces of advice, from our archives:

Did Elon Musk Illegally Hide a Material Event From Investors?

You no doubt know about Elon Musk, the visionary behind Tesla Motors, manufacturer of self-driving cars. But what you may not know is that Musk is being accused of a possible violation by the Securities and Exchange Commission.

According to Forbes, the SEC is "reportedly" in the beginning phases of an investigation regarding failure to disclose a "material event" just 11 days before the company and Musk sold $2 billion worth of shares. That event was the first death attributed to a driver using Autopilot, the Tesla self-driving car system. So now seems like a good time to review material events and disclosure.

When you're putting together your business plan, or when you're putting that plan into action, one of the forgotten costs is legal risk and liability. After all, we don't feel very optimistic adding a line for lawsuits into our budget, and although business litigation is common, it's not inevitable.

One way to avoid a lawsuit, and the subsequent drain on your capital and corporate culture, is to plan ahead. By protecting your company, your employees, and your customers, you can reduce your small business's legal risk and liability. Here's how:

OSHA Phasing in New Injury Reporting Rules, Starting Now

As an employer, you are obligated to report workplace injuries to federal labor safety agencies. Now the Occupational Safety and Health Administration (OSHA) is hoping to make disclosure easier for workers and their employers with a new set of rules.

The rules outline new injury reporting obligations and provide protection for those who disclose, ensuring that reporting won't result in retaliation. Here's what you need to know.

Hiring Employees for an Online Store

You started an online shop, which is doing great, and now you want to hire help. The issues you face are similar to any other employer. You need something done and you need someone to do it.

But considerations may be slightly different than in a brick-and-mortar business, as the skills you'll require are likely to be distinct. For one thing, you need someone who is comfortable with technology while traditional sales skills, like making conversation, may be unnecessary. Let's consider some other important issues.

Legal Ways to Save by Hiring Your Kids

The kids are out of school, hanging around, and you want to put them to work. You should. It's a good idea for many reasons. Hiring your kids has both long-term and short-term payoffs.

You can keep an eye on the tykes while presenting a solid work ethic and helping them learn to appreciate of the family business. The summer working together can teach you to communicate with your kids as mature adults, a skill you will need soon enough. They'll earn money, and you keep funds in the family. Plus, there are tax breaks!

Biz Lessons From Macy's Lawsuit: Let Police Stop Thieves

You are sensitive to thefts and keep an eagle eye on customers in your shop. In fact, you are becoming so good at stopping shoplifters that you almost wish you were a cop.

Well, if you are not, then you should be careful with your approach as what you are doing may not be legal. Let law enforcement handle the business of crime and punishment. Macy's department stores in New York found that out the hard way already, according to The Guardian, and it may well pay heavily yet again. Let's look at their handling of thefts and a class action lawsuit filed against them to avoid repeating their mistakes.

You want to keep an eye on your employees, but when does monitoring the workplace become invading their privacy? Generally speaking, employers have a good deal of leeway for when it comes to keeping tabs on employee conduct and communication, but there are legal limits to what they can watch and the kind of speech supervisors can restrain.

Here are several of the biggest concerns employers face when monitoring employee behavior:

The Secret to a Successful Family Business

If you have a family business, then you know these can be explosive endeavors. Emotions run high among relatives, but bonds are also deeper than usual for people who work together.

One successful family has stayed in business 166 years, never accepting offers to go public or sell, or succumbing to the urge to split, and they are in the business of pyrotechnics. Phil Grucci, chief of Fireworks by Grucci, spoke to Fortune about how this family in a risky business has kept cool and hung together for so long.

Job applicants are used to employers advising them that their employment will be contingent on passing a thorough background check. But it looks like the shoe might be on the other foot for once. A Monster survey of over 1,400 job seekers found that 80 percent said they check employer review sites before applying for a job. This means your potential hires are probably running a background check on your business before you ever get the chance to run a background check on them.

So what are these employer review sites, and what do they say about your small business?