Free Enterprise - The FindLaw Small Business Law Blog

June 2011 Archives

Best Buy not Amused by Competitor's Geek Ad

According to retail giant Best Buy, Newegg's "parody" commercial is anything but funny. Best Buy's cease and desist letter sent to Newegg also did not have the intended effect.

Newegg has posted a copy of the letter on its Facebook page.

Why does Best Buy find this commercial so offensive? And, what should small business owners take into account if they're looking to make some parody advertisements of their own?

When Should You Sue a Customer for Defamation?

When is a customer review defamation? And, should you even be suing your customers, the bread and butter of your livelihood, in the first place?

The initial knee-jerk reaction of any business owner to a review posted on a national website that has negative content about their business is bound to be not so positive.

But, initiating a lawsuit over the review is entirely different - and it may be side-stepping important steps to help resolve your customer's problems in a less public and aggressive way.

Legal for SF to Ban the Sale of All Pets?

Though the proposal started off as an attempt to end puppy mills and kitten factories, San Francisco's Humane Pet Acquisition Proposal has morphed into an incredible attempt to completely ban pet sales within the city's borders.

Yes, even goldfish.

While some are shaking their heads, pigeonholing the proposal as just another in San Francisco's long line of strange laws, others are now questioning their business' future.

Proposed New Union Rules Good For Business?

The National Labor Relations Board proposed new union rules on Tuesday that, once in effect, would significantly shorten the unionization timeline.

The rules, which the NLRB "intend to reduce unnecessary litigation, streamline pre- and post-election procedures, and facilitate the use of electronic communications and document filing" are a big change to existing regulations.

And they may not be very good for your business.

Web Operator Libel Liability Lowered in NY

A recent New York state ruling might have lowered web operator libel liability. "Web operators" include owners of blogs - and libel suits have been filed against blog owners in the past for potentially defamatory material posted on their sites.

The case, brought between two rival apartment sales and rental companies, sets the precedence in New York that the Communications Decency Act stops a firm from suing based on offensive material that was posted anonymously on the other company's blog, reports Buffalo News.

The decision might be good precedence for small businesses who are worried about the dangers of posting too much information on the web via a blog or a forum.

FBAR: Reporting Foreign Bank Accounts

If you or your business has $10,000 in foreign accounts, it's important that you pay attention to this year's FBAR reporting regulations.

The deadline for filing this year's FBAR (Report of Foreign Bank and Financial Accounts) is June 30.

However, if you improperly failed to file an FBAR in the last few years, or did not report foreign accounts on your past tax returns, you may also need to take advantage of the 2011 Offshore Voluntary Disclosure Initiative (OVDI).

Are Peer-to-Peer Loans a Good Small Business Idea?

Have you tried to get funding for your small business, only to get met with denials from banks and other big lenders? Peer-to-peer loans, or person-to-person loans, are a new and rapidly growing area where businesses can get some starter funding.

If you've heard of microfinance, the idea behind peer-to-peer loans is fairly similar. A large network of "lenders" come together to help borrowers raise money for various purposes.

Hundreds of lenders can ban together to help raise money. Lenders can put up between $25 to $1,000, reports The Wall Street Journal.

275,000 Non-Profits Lose Tax-Exempt Status

Nearly 275,000 organizations nationwide had their status as a non-profit revoked last week, with the Internal Revenue Service releasing a list of non-profit groups that either failed to complete the required forms or had not submitted documentation for the last three years.

Though this represents about 17% of non-profits across the country, The NonProfit Times reports that a large portion of the listed organizations are no longer in existence or have reformulated into new organizations.

But what about the nonprofit organizations that still exist?

Miracle-Gro Eyes Medical Marijuana Market

Miracle-Gro marijuana.

If there's one example of why you should pay attention to new laws and legislation, this is it.

Taking advantage of laws in 16 states that permit the use of medical marijuana, Scotts Miracle-Gro, known primarily for its high-impact soil and plant food, is in the process of expanding into the pot market.

The medical marijuana market, that is. And it's projected to reach $1.7 billion in sales this year.

Wal-Mart $187M Verdict: Denied Meal, Rest Breaks

A Pennsylvania appeals court has upheld a $187.6 million Wal-Mart verdict. The suit was filed by employees, who claimed that if you worked for retail giant Wal-Mart, meal breaks and rest breaks were regularly cut.

The appeals court affirmed the lower court's finding that Wal-Mart's actions violated state wage and hour laws, Bloomberg reports.

The class action represented about 187,000 current and former Wal-Mart employees who worked in Pennsylvania between 1998 and 2006, according to Reuters.

NY Court: Strip Club's Lap Dances Taxable

Nite Moves, a New York strip club, argued that lap dances are not taxable. Unfortunately for them, a New York court has ruled lap dances are taxable.

Nite Moves had originally argued that the lap dances were "dramatic or musical arts performances" that would exempt the club from having to pay tax on the income, reports The Wall Street Journal.

The club started its tax protest after it was slammed with a $124,921.94 tax bill - plus interest - from lap dances following a 2005 audit, reports The Wall Street Journal.

Ashley Alford's Verdict: $95M for Sex Harassment

Ashley Alford sued Aaron's in a sexual harassment lawsuit. The jury awarded her a verdict against the company to the tune of $95 million.

Aaron's Inc. is a national rent-to-own furniture store. The plaintiff, Ashley Alford, a former employee, claimed that she suffered humiliating and degrading sexual harassment from the store manager at the branch where she worked, reports the New York Daily News.

The harassment began shortly after she began working at an Aaron's branch in St. Louis in 2005, according to the New York Daily News.

Fired for Marijuana: Employer Drug Policy Trumps

Add employers in the state of Washington to those who may legally fire medical marijuana users.

On Thursday, the Washington Supreme Court released a decision in which it severely curtailed the rights of medical marijuana patients in the workplace.

Not only may they be fired, but the decision also bars the state Human Rights Commission from investigating complaints, leaving employers with little liability under anti-discrimination laws.

Alabama Immigration Law: E-Verify Now Required

If you run a business in Alabama, E-Verify is your new friend.

As part of a tough new immigration reform bill signed into law on Thursday by Governor Robert Bentley, Alabama employers will now have to use the immigration verification system when hiring new employees.

Businesses are also bound by new laws relating to day laborers, transportation, and rental agreements.

Old Navy Lawsuit is On: Todd Oldham's $20M Firing

Designer Todd Oldham's lawsuit against retail giant Old Navy has been reinstated by the 2nd Circuit Court of Appeals. Previously, the Old Navy lawsuit had been tossed out by the district court.

Oldham had originally demanded $75 million in royalties and damages. The lawsuit arose out of Old Navy's failure to launch a Todd Oldham-branded line of clothing in 2008. He has now lowered his claim to $20 million.

Oldham was fired about 2 days after he filed the original suit for the lost royalties, according to the court decision. He then added a claim of wrongful termination to the complaint.

Will Calif. Internet Sales Tax Hurt Your Business?

Will California's internet sales tax become a reality? Like many online retailers, Amazon's tax policy has been a great for consumer's wallets, as California residents don't pay any sales tax (unless they report it on their tax returns) on online purchases.

But, this might change soon.

The California Assembly has approved AB 155, or the "Amazon tax" bill. The bill, if signed into law, would force online retailers like Amazon to collect sales tax from customers even if all they have in the state are affiliates. Is this going to be a boon for small businesses - or a bust?

Fewer Small Businesses Taking Summer Vacation

We've written about how small businesses don't really have a legal obligation to give employees paid vacation time. But what about the owner's small business vacation time?

You'd think owner vacation time would rank low on small business owners' priority list. And you would be right. A majority (59%) took no vacation last summer, says a report released by American Express.

But the reason isn't simply profit maximization.

A large majority (79%) of small business owners do not feel guilty for taking a vacation, reports the AmEx survey of 500 small business owners.

But other reasons not to get away loom large:

Free Webinar on New Small Biz W2, 1099 Rules

Small businesses have been the focus of a large number of tax code changes in the last two years, a lot of which are now applicable that we are in the 2011 tax year.

Though many of the changes deal with tax credits and deductions, there has been a lot of focus on employment taxes and health care. This is particularly true of reporting and compliance for your employees' W2 and 1099 forms.

To get you up to speed on small business employment tax code changes, the National Federation of Independent Business is offering a free webinar this Wednesday, June 8, at 12 noon Eastern.

Small Business Export Financing on the Rise

The world could be your small business oyster. Export-import bank loans to U.S. companies to finance sales of American goods internationally have increased.

Between October and January alone, the Export-Import Bank of the United States has increased small-business export financing to $1.5 billion, from $1.4 billion in the same period last year, reports The Wall Street Journal.

Why consider selling products outside the U.S.? Because 95% of your potential customers live outside the United States, reports USA Today.

Employee Panic Buttons Offered After Maid Attacks

Should you give your employees panic buttons? Sexual harassment of housekeepers at prominent New York City hotels has raised awareness of the dangers that employees may face in the work place.

In response to the concern of employers for sexual harassment of their workers, The Pierre and Sofitel hotels have decided to give panic buttons to housekeepers.

This is in response to the string of housekeeper-related sexual harassment cases that have arisen in hotels. Two weeks ago, Dominique Strauss-Kahn, former IMF chief, was arrested on sexual assault and attempted rape of a maid at the Sofitel.

'Loser Pays' Reform a Win for Texas Small Business?

After passing with overwhelming support in both houses of the Texas State Legislature, Governor Rick Perry signed Texas' "loser pays" bill into law earlier this week.

An extension of tort reform bills passed in the last 10 years, the "loser pays" law is being championed as the antidote to an overcrowded court system and frivolous lawsuits.

But is "loser pays" good for small businesses?

The intended purpose of Texas' "loser pays" law is to dissuade residents from filing low-merit lawsuits; arguably, fewer people will risk paying the defendant's legal fees if there is little chance of winning.

How Businesses Should Respond to a Class Action

What is a class action? What are some class action defenses for businesses? Class actions are something that small business owners should be concerned about, as they can cost business owners thousands of dollars.

Class action lawsuits can come from two places - employers should be concerned about the possibility of class action lawsuits brought on by employees, or by customers.

Class actions are most often used when there are a number of plaintiffs, each with a similar injury. The injury suffered by the plaintiffs in a class action may be minor if you look at them individually, but when you aggregate all the injuries from all the plaintiffs, the case can become huge.

Wrongful Termination Law: Avoiding a Lawsuit

As a small business owner, knowing some of the intricacies of wrongful termination law can be vital to preserving your business. Illegal firing of employees for reasons you may believe are justified might just land you in a costly wrongful termination lawsuit.

Most employees are "at will" in the U.S., meaning that they can be fired for whatever reason you want. Of course, that reason must be a legal reason.

So what are some of the common originators of wrongful termination suits? And, what should small business owners be aware of?