Free Enterprise - The FindLaw Small Business Law Blog


The last thing you want dragging your startup down is long-term litigation. There are always legal risks to starting a business, but frivolous lawsuits and out-of-nowhere class action suits can scuttle your company before launch (or lunch, even).

One way many businesses -- large and small -- are attempting to avoid costly and damaging legal battles is through arbitration agreements, which funnel disputes to private dispute resolution rather than public courts. Here's a roundup of our small business arbitration coverage, to find out if arbitration agreements are right for your startup, and how and when you can use them.

Most entrepreneurs understand the legal risks they are taking when starting a new business. First off, you're probably taking on some loans that you'll be responsible for paying back. You're walking into a morass of federal, state, and local employment statutes. And contracts with customers, clients, and suppliers can always go sideways.

Few startups are expecting a full-blown class action lawsuit alleging violations of federal consumer protection laws. Small business can face setbacks for a million different reasons, but a large enough lawsuit could prove fatal. Here's how to survive a class action lawsuit as a startup:

Do You Need a License to Manage Money?

With some professions, like medicine and law, it's clear that you need a license to practice. For other things, like sales management, it's pretty clear that you don't. But what about OPM -- Other People's Money? Though you surely don't need a license to manage your own money, you definitely need one to manage other people's.

Unpaid invoices aren't just a hassle for most small business -- they can significantly derail your cash flow, to the point you have trouble making investments, compensating employees, or paying your own bills. What seems like a minor headache of harassing a customer or client into payment could turn into a major business roadblock.

Your first inclination might be to sue a recalcitrant customer or send the bill to collections. But you might have another option. You might be able to sell that unpaid invoice, avoiding both litigation and a disruption in your cash flow.

The legal issues swirling around driver pay for ridesharing apps like Uber and Lyft normally centered around whether those drivers were classified as employees or contractors. State and federal minimum wage, overtime, and unemployment laws generally only apply to employees, so as long as drivers were independent contractors, the companies could pay what they wanted.

That was until the New York City's Taxi and Limousine Commission stepped in and set a new wage floor for Uber and Lyft drivers in the city. The first such minimum wage for app-based drivers in the country, NYC set the rate at $17.22 per hour after expenses or $26.51 per hour gross. So how will that affect drivers, fares, and the companies?

Los Angeles Legalizes Street Vending

In a historic move, the Los Angeles City Council voted to legalize street vending, starting in the year 2020. The premise for this change ranges from immigration to health issues. The hope is that through regulation, buyers and sellers alike will benefit, while managing the costs to nearby neighbors. Los Angeles now joins the ranks of other major metropolitan areas to legalize street vendors, including New York, Chicago, San Francisco, and Philadelphia.

As Apple Readies for 'Entrepreneur Camp,' Here Are a Few Legal Tips to Mind

Apple is launching a new series of workshops for women, called "Entrepreneur Camp." These are two-week programs which give female app developers coding tips, app design, and marketing ideas, as well as the opportunity to receive ongoing mentoring from an Apple representative. Sounds like a great asset when trying to start an app business. But what about the legal side of developing an app? In case Apple's legal team doesn't make it to camp, here are a few legal tips for any app entrepreneur.

Some small businesses are licking their proverbial chops about Cyber Monday. Others? Not so much. What's the difference? Well, your outlook could be a bit different depending on whether you're an online retailer, or you're worried about your employees doing some online shopping while on the clock.

Either way, small business owners need to be thinking of data security come Cyber Monday, so here are some legal tips.

Do Employers Have to Pay Overtime on Thanksgiving?

Few employees want to work on Thanksgiving, unless they are looking for a solid excuse to get out of a family dinner. Employers often do what they can to spread holiday work around in whatever manner seems fair, but it's likely some percentage of employees in certain industries will have to work this Thanksgiving. Employers are thankful for their service, but do they have to pay them overtime?

Sandwiched in between the monolithic shopping holidays of Black Friday and Cyber Monday is Small Business Saturday -- a day for local and small businesses to really shine. And while your focus might have been on the day before, don't forget to prepare for the day made for your small biz.

So here are five legal tips to prepare for Small Business Saturday, and the biggest shopping weekend of the year.