Free Enterprise - The FindLaw Small Business Law Blog

October 2010 Archives

ESPN Zone Workers Sue Under WARN Act

Workers at the former ESPN Zone sports bar in Baltimore, Maryland, are suing the Walt Disney Corporation for suddenly closing the business this past June. The former employees of the Inner Harbor neighborhood restaurant, filed suit in federal district court on October 24, seeking wages they say they were owed for being fired without the required notice.

The plaintiffs claim that federal law requires employers to give at least 60 days notice to workers if they intend to close their business, reports the local CBS affiliate WJZ13. Workers claim that they found out only days before the closing of the ESPN Zone that they would be losing their jobs. One former employee told WJZ that he found out about the closing on Facebook.

Small Biz Bankruptcies Down Yet Again

For once I'm here with good news. About bankruptcy. And the economy. Yes, seriously.

A pair of recently released studies indicate that small business bankruptcies are declining nationwide. According to Equifax Commercial Information Solutions, bankruptcies declined 11 percent in the third quarter of 2010 alone. That also marked the fifth consecutive quarter that bankruptcies have dropped for small businesses. This signals a remarkable shift from only 18 months ago. For the purposes of the study, small businesses are classified as those with 100 or fewer employees.

"Small businesses are having a tough time. But the numbers are beginning to indicate that some of the stresses may be abating," said Reza Barazesh, senior vice president of Equifax. According to the study, small business bankruptcy filings reached their peak at 37,299 during the second quarter of 2009. They stood at 30,392 during the third quarter of 2010. Equifax analyzed Chapter 7, 11 and 13 bankruptcy filings in addition to business data on 24 million U.S. small businesses.

3 Times You Can Fire An Employee For Off Duty Conduct

Juan Williams -- the veteran NPR reporter was recently fired for making comments about his fear of flying when there is a Muslim on the aircraft. Helen Thomas -- a White House reporter for over five decades was fired for making anti-sematic comments in an interview. Howard Arenstein-- a longtime reporter for the CBS was fired after police discovered Arenstein and his wife were growing marijuana plants in their Washington D.C. backyard.

What do all these people have in common? Well, in addition to being highly-respected in their various fields, they were all fired for statements for behavior that they engaged in OUTSIDE of their employment. Williams and Thomas were both interviewed not in their official capacities as reporters, but in personal interviews with a different media outlet. Arenstein was not growing marijuana at the CBS office, but in his own backyard. All the firings beg the question, when can an employer fire an employee for actions taken off the clock? Here are three ways ...

How to Avoid Being Defamed By Your Customers

These days, more people than ever are turning to online reviews on sites including Yelp to review businesses. Like all technology, businesses are finding it to be a bit of a double edged sword. It's great when people say nice things about your business. It's terrible when they say awful things about it.

There are legal options when someone says defamatory things about your business in online reviews. However, suing or threatening to sue is often a mistake. Instead, the best course of action is often to engage the scorned customer and have a dialogue with them. Often they just want you to recognize their pain and compromise with them. It may be possible to turn their experience around and transform them into a satisfied customer that will praise your company in the future. Forget about that if you sue them.

The New York Times recently featured the work of Henry Posner, social media coordinator for B&H photography and a former professional photographer. Posner has done such a good job dealing with online reviews, The Times interviewed him for advice for business owners looking to build a positive online reputation.

Henry Posner offered seven detailed points and the article is worth checking out in order to see them all. Here are a few of my favorites:

Women Owned Small Business Rule Finalized

Women owned businesses rule! Now, in more ways than one.  Known as the Women Procurement Program Rule, the Small Business Association recently filed the final rule on this program, which is aimed at increasing federal contract opportunities for female owned and operated businesses.

Small Business Trends quotes SBA Administrator Karen Mills: "Women-owned businesses are one of the fastest growing sectors of the economy, and even during the economic downturn of the last few years, have been one of the key job creation engines in communities across the country. Despite their growth and the fact that women lead some of the strongest and most innovative companies, they continue to be under-represented in the federal contracting marketplace. This rule will be a platform for changing that by providing greater opportunities for women-owned small businesses to compete for and win federal contracts."

Negligent Hiring and Training Suits

As discussed on a recent post on FindLaw's Legally Weird Blog, a woman is suing the Hyatt Hotel corporation for invasion of privacy, negligent hiring, training, supervision and intentional infliction of emotional distress. The plaintiff, Dayanara Fernandez, returned to her room in a Hyatt in Deerfield, Illinois, to find an employee attired in his Hyatt uniform - from the waist up. From the waist down, he was dressed in her skirt and a pair of her heels and even worse, a pair of her underwear.

Among the tort claims in her suit, which include intentional infliction of emotional distress and invasion of privacy, are claims that the hotel chain negligently hired, trained and supervised the employee involved in the incident. A business owner whose employee commits an illegal action while on the job can find their business liable for the employee's actions, especially if the business did not exercise the proper care in hiring that employee.

ADA Building Access Lawsuits and SB 1608

Suits between disabled patrons and business owners over building access are on the rise. Businesses that fail to comply with the standards promulgated by the American Disabilities Act can face costly litigation. ADA requires all businesses, big or small, to provide reasonable access to all disabled customers and clients. A growing problem is disabled individuals are discovering minor (or major) violations of the ADA and filing multiple lawsuits, regardless of whether he or she actually suffered harm from the violations.

ADA building access litigation is a real concern that business owners should be aware of. The approach should be comprehensive -- knowing what ADA regulations your business is in violation of, and also knowing your legal rights when a lawsuit is filed. The ADA recognizes the cost limitations of certain businesses, and also the nature of the clientele; but when a business is undergoing any type of renovation, special attention to the standards is important.

Small Business Size Standards Revised by SBA

Small Business owners know that sometimes, less is more. Now, the Small Business Administration has made a decision that will allow those with less to get more. On October 6, new rules will allow changes in small business size standards in the retail, hospitality, restaurant and "other services" industries. This change will make 17,000 more businesses eligible for SBA programs, including loans and preferential treatment for federal contracts.

According to the Washington Business Journal, this change in small business size standards for the service industry is a part of the SBA's new approach in better defining who exactly is considered by the federal government to be a small business. Over the next two years, the SBA will complete its update in the rules, which have not been overhauled since 1980s.

Top 5 Ways To Avoid A Retaliation Lawsuit

I may be stating the obvious here, but it is illegal to fire an employee based on complaints regarding company discrimination or harassment. As the name implies, retaliation is the term used to describe any unlawful action a fellow employee takes against another to "punish" an employee for complaining about discrimination or harassment. Ok, glad I got that out of the way. Now here are the top 5 ways to avoid a retaliation lawsuit...

1.  Confidentiality is Clutch- a good rule of thumb is to keep complaints private. Not only will this policy foster open lines of communication, and make employees feel more comfortable discussing illegal patterns of behavior, but it will also limit the number of people that would even want to retaliate against an employee. Simply put, the fewer people that know about a complaint, the smaller the circle for potential retaliation becomes.