Free Enterprise - The FindLaw Small Business Law Blog

November 2011 Archives

An American hero, a recipient of the Medal of Honor, is suing a former employer in a case that spotlights what employers can -- and cannot -- say about ex-employees.

U.S. Marine Sgt. Dakota Meyer's lawsuit accuses his former bosses at BAE Systems OASYS in San Antonio of ruining his shot at landing another job, The Wall Street Journal reports.

BAE managers allegedly told a prospective employer that Meyer was mentally unstable and had a drinking problem, the Journal reports.

Should You Follow Employees on Twitter?

Should you friend or follow employees on Facebook and Twitter? Do you let them friend or follow you?

If you haven't yet encountered these questions, it's bound to happen sometime soon. Everyone wants to be friends these days--even with their boss.

Social media can build a friendlier working relationship and help you assess your employees' needs. But it can also lead you to act intrusively and aggressively, causing a few legal problems along the way.

So before you follow employees on Twitter, first take a look at these pointers.

Unpaid interns can play a huge supporting role for your small business. But depending on what tasks you've scripted for them, you may be setting the scene for a lawsuit.

A Hollywood studio is learning that the hard way. As has been widely reported, two former interns are suing Fox Searchlight Pictures for failing to follow state and federal guidelines regarding unpaid internships.

The interns complain they were made to brew coffee, take out the trash, and get people to sign paperwork -- tasks they say should have earned them a paycheck.

Are Your Employees Ready for Retirement?

Small business owners know a few things about their employees. And it seems as the economy continues to falter, many business owners also know this one thing: employees aren't ready to retire. It doesn't help that retirement plans are expensive for small business owners.

Around 75% of small business owners feel that America is hitting a retirement crisis because so many people are simply unprepared, according to Nationwide Financials. At the same time, only 20% of business owners say they provide 401(k) or other self-funded retirement plans for their workers.

The 401(k) is only one of several different retirement plans that employees can utilize. As a small business owner, how else can you help your employee achieve a financially secure retirement?

Small business e-tailers take note: Make sure your website isn't selling counterfeit goods, or it could get seized by the feds in a Cyber Monday crackdown.

The Justice Department announced Monday it's seized 150 websites that investigators say were hawking fake name-brand goods. Seized domain names include,, and, Reuters reports.

Shutting down the sites is relatively easy, but prosecuting the counterfeit sellers will be more difficult. That's because the sellers are typically located overseas, mostly in China, according to Reuters.

How to Protect Your Company Secrets

Imagine this scenario unfolding: You own a small bakery. You've spent your entire life crafting the perfect cupcake recipe. Due to the formula's success, you've had to hire an apprentice to help you out. For a few years, he's happy to help you create your masterful cupcakes. Since he's helping you bake, you end up giving him the secret formula to your delicious wares.

Everything is great -- until he decides to leave and start his own cupcake shop right across the street from you. Not only that, but he decides to use your cupcake recipe.

Et tu, brute. Do you feel that stab of betrayal? It might have been avoided if he had signed some legal agreements.

Retailers Sue Federal Reserve Over Swipe Fees

Retailers have filed a new swipe fee lawsuit against the Federal Reserve, arguing that the cap took into account bank expenses that could not be considered under the law.

The retailers’ suit comes after the Federal Reserve capped swipe fees at 21 cents earlier this year. The central bank originally proposed swipe fees should be capped at 12 cents before changing their mind. Swipe fees averaged at 44 cents per transaction before the Federal Reserve’s new rules.

The swipe fee lawsuit alleges that merchants will be harmed by the new rules, which went into effect on October 1, according to Bloomberg.

Twitter Custody Battle after Employee Quits

As more and more companies leverage social media as a marketing tool, tricky issues might soon arise such as: who owns the actual corporate Twitter account? On one hand, an employee who manages the account is the one who builds the following and tweets the messages.

But if this position is a social media marketer, should the Twitter account actually be owned by the company?

These are the types of questions that may soon be analyzed in an upcoming case involving Noah Kravitz, an ex-employee of a company called PhoneDog. Kravitz worked as a reviewer and a blogger for the company and established a Twitter account, called @PhoneDog_Noah. When he quit, he kept the account and changed the handle to @noahkravitz.

Should You Rush to Buy a .xxx Domain?

Soon, "XXX" will mark the spot in a whole new way: the new .xxx domain name is coming later this year. In order to avoid association with pornographic sites, many universities are rushing to purchase their school's name in order to combat potential trademark infringement and abuse.

Imagine a website called "," specifically dedicated to showing you the "best" parts of co-ed students.

It costs $200 to buy a site. Trademark owners can do so under the "sunrise period" instituted by the Internet Corporation of Assigned Names and Numbers (ICANN). After the "sunrise period" ends, porn companies can start purchasing .xxx domains.

Is Your Business Ready for Cyber Monday?

As Thanksgiving approaches, businesses have three concerns in mind: surviving the Black Friday rush, making sales on Small Business Saturday, and serving customers easily on their web store. Business owners that plan on putting out online deals should prepare for Cyber Monday.

Previously, we discussed some tips that businesses should keep in mind when preparing their stores for Black Friday.

But, when you're talking about online sales, it's a whole different ballgame. Here are the rules:

Prepare Your Small Business for Black Friday

This year, Black Friday will be followed by Small Business Saturday. And two days later, retailers will honor the shopping deities with Cyber Monday. Between the three, you're likely to find yourself trampled by a savings stampede.

Which is why you should prepare yourself and your small business for Black Friday. But before you make a plan, you might want to take a look at the following Saturday Night Live video. It's a perfect example of what you shouldn't do during this weekend's mayhem.

What Does SOPA Mean for Small Business?

You've likely heard a lot about the Stop Online Piracy Act (SOPA) in the last few days, and chances are the chatter isn't going to stop. The bill has the potential to change the way you use the Internet.

It's designed to give rights-holders more power to stop online piracy, but it arguably shifts the burden of enforcement to technology companies. As a result, SOPA may affect small business.

Anchor Brewing Lawsuit: SF Beer Sued by Sam Adams

Legal trouble is brewing between San Francisco-based Anchor Brewing and Boston Beer, maker of Sam Adams. Boston Beer is accusing Anchor Brewing of hiring one of their former employees in an effort to gain trade secrets.

The employee in question, Judd Hausner, was an executive at Boston Beer. He was hired by the brewer in 2006, and signed a non-compete clause valid for one year after leaving the company. The clause expressly prohibited him from working in the same market as Boston Beer.

This year, Hausner quit Boston Beer and went over to Anchor Brewing. Now, Boston Beer is claiming that Hausner is in breach of his non-compete clause.

Three Legal Must Haves for Your Business Website

Guest post by Jennifer K. Halford, Esq.

It's amazing how the Internet has completely changed the small business owner's ability to advertise and sale her products or services. In fact, it is rare to find a business these days that doesn't have a website.

Recently I was speaking with a small business owner about her business' website. She didn't realize was that by having a business website she is subjecting her business to responsibilities and liabilities that she does not have in her brick-and-mortar store.

Like many small business owners, she did not know that there are constantly changing ecommerce laws and tax liabilities that directly affect her business' website. It occurred to me that despite the common occurrence of having a website, few business owners understand what legal agreements they should have on their site.

Do Your Employees Dress Too Provocatively?

You've probably encountered employees who dress in a provocative or unkempt manner. And you probably debated whether to bring it up.

If you don't have an employee dress code, creating one can be an easy fix. But what if an employee is simply not following the rules? It's not easy to tell her that she's dressing provocatively. Or to tell him he really needs to pull up his pants.

Consider one of the following suggestions:

Update Your Website or Google May Bury You

"Google update." These two words can strike a chord of fear into the heart of any business owner that runs their own website. Not to mention send an entire team of search engine optimization specialists scrambling.

Sometimes when Google tinkers with its infamous search algorithm, certain websites may be left in the dust.

This newest update brings along an important warning: if you don't update your site regularly, you might be seeing a sudden drop in your web traffic.

Broken down, here's what you need to know to help your website:

10 Tips to Peacefully Continue the Family Business

Guest post by Jennifer K. Halford, Esq.

I was recently preparing a presentation for my local Small Business Development Center about the steps a small business owner should take to ensure the next generation is ready to continue the family business.

I find that most small business owners underestimate the time it takes to continue the family business. They are busy and find it difficult to talk about what will happen when you pass away.

However, failing to plan for the transfer of the family business can result in heartache and conflict. I have seen many lawsuits of children fighting over their parents business.

So what steps should you take to ensure your children peacefully continue the family business?

The battle of the baby blogs is on. The New York Times is suing The Huffington Post, saying its "Parentlode" blog infringes on the Times'  trademark, "Motherlode."

Both "Parentlode" and "Motherlode" are blogs that talk about parenting issues. And both were the brainchild of the same blogger, Lisa Belkin.

Belkin started "Motherlode" as a Times employee three years ago. She jumped ship for AOL's Huffington Post last month.

Shortly thereafter, "Parentlode" was born. The New York Times promptly sent out a cease and desist letter, and requested "Parentlode" change its name.

The paper even asked HuffPo founder Arianna Huffington to take action. Huffington and AOL's lawyers wouldn't budge.

Legal to Use Someone Else's Contract?

Entrepreneurs and small business owners often run into problems when starting a business. One issue that constantly crops up is getting all the required legal documentation in order. So, are contracts copyrighted? Is using someone else’s contract legal?

After all, it would be so much easier to use someone else’s contract. Hiring an attorney to draft agreements for you would be costly.

And small businesses are acutely aware of how important it is to keep costs lowered. So is it okay to use contracts you find on the web? And should you?

Could Your Business Become a Benefit Corporation?

Businesses not only want to make money, but they want to impact their community in a decidedly good way. And social entrepreneurship is on the rise. Many states are starting to recognize a new class of companies: benefit corporations. 

California, Hawaii, Virginia, Maryland, Vermont, and New Jersey have all passed B Corp legistlation.

Several other states have pending legislation.

A benefit corporation is essentially a company that has a social or charitable goal built into its business model. For example, a company where part of the profits are given to philanthropic efforts. Or one with a focus on environmental impact.

Top 5 Ways to Pay Less in Attorneys' Fees

Guest post by Jennifer K. Halford, Esq.

When speaking at seminars for small business owners, I am often asked how a business owner can pay less in attorneys' fees.

I find that most business owners know the value a good attorney can bring to their business. An attorney can protect your business from risks and liabilities. An attorney can also create the policies and contracts that will help your business succeed.

Yet, the advice of an attorney can be expensive. Many of the small business owners I speak with don't have extra capital in their business' budgets to pay attorney's fees.

So what can a small business owner do to pay less in attorneys' fees?

How to Sell a Product on TV

Should you sell your product on QVC? How about on one of those "As Seen on TV" commercials? Or should you produce your own infomercial?

If you've developed a unique product, chances are you've thought about selling it on TV. In fact, you've most likely considered infomercials, which are also known as Direct Response Television (DRTV).

There's a lot to consider before you sell on TV, including licensing rights and manufacturing. Below is a quick comparison of your three major options.

7.5M Reasons Not to Call Your Rival the Taliban

With the down economy, businesses these days are trying everything to get an edge. But whatever you do, be wary of defamation laws. For example: calling your rival car dealership something akin to the "Taliban Toyota" might just end up costing you millions.

That's exactly what happened in the case of Bob Tyler Toyota of Pensacola, Florida.

Employees at the Toyota dealership spread rumors and slurs about Shawn Esfahani, the owner of the Eastern Shore Toyota in Daphne, Alabama. They told customers that he was funneling money to insurgents. And that he was an Iraqi terrorist.

Have You Reserved Your Right to Refuse Service?

We reserve the right to refuse service.

The sign's message is clear and simple, but the truth is that a business can't reserve a wholesale right to refuse service.

As places of public accommodation, private businesses are subject to federal and state anti-discrimination laws. These statutes prohibit discrimination on the basis of race, color, religion, national origin, disability, gender and sex. Some also include sexual orientation.

And others, well they outlaw even arbitrary discrimination.

How Not to Get Sued by Your Independent Contractors

Guest post by Jennifer K. Halford, Esq.

Independent contractors are very much in vogue these days. I recently attended a Women in Business Conference where I was asked by a small business owner if she should hire an independent contractor for her business.

It occurred to me during our discussion that business owners generally understand the difference between employees and independent contractors.

Yet, few business owners appreciate how careful they must be when interacting with their independent contractors.

Does Your Business Belong on a 'Daily Deal' Website like Groupon?

Many small businesses put themselves on daily deals websites like Groupon and LivingSocial. But other business remain wary.

Some business owners complaint that they draw in customers that are frugal and only willing to spend a certain amount.

And the daily deals sites take a cut of the purchase. In the end, a business can sink a lot of money into a deal that may not result in long-term business growth. But for some, putting out a social deal can be a powerful marketing and publicity tool.

So does your business belong on a daily deals site?