Free Enterprise - The FindLaw Small Business Law Blog

July 2012 Archives

Small Firms Can't Find Skilled Workers They Need

Hiring at a small business can be a bit of a nightmare. The time spent sifting through piles of resumes and scheduling interviews is only balanced by the benefit of finding a dedicated new worker who can add to the company.

But what if you can't find one?

For small firms looking to take on new staff, the high unemployment rate doesn't necessarily mean a flood of qualified applicants. A survey of small business owners showed that a large minority could not fill jobs posted in July because applicants were unqualified.

It can take time to train new employees, especially if they don't have the skills you're looking for. But it was can cost you just as much not hiring help when you need it.

5 Tips to Prevent 'Flash Mob' Shoplifters

Flash mobs have created a new kind of shoplifting where large groups go into a store for the purpose of taking merchandise. These groups can make off with a large amount of high value goods in a short period of time.

Retailers across the country have been affected by flash mob shoplifting. In most cases, the perpetrators are teenagers.

These flash mobs aren't like the fun dance parties that are organized via Twitter or Facebook. They have a much darker purpose and can have serious consequences for retailers.

Luckily, there are some low-cost ways to prevent loss while deterring flash mobs and other shoplifters.

How to Survive a Small Business with a Friend

Guest post by Jennifer K. Halford, Esq.

I was speaking last week with a business owner who suffered through an ugly dissolution of his business partnership. He and his friend had been in business together for over eighteen years. And they never saw the dissolution of their business or their friendship coming.

People go into business with their friends believing that the friendship will endure. And that is often true when the business is doing well and the bills are getting paid.

But what happens when finances get tight and tensions are raised? What if your friend stops contributing her best efforts towards your business? What happens if you disagree over the future of the business?

You don't have to lose your friend to have a business partner.

Can You Charge Customers for Tap Water?

A new cafe in New York City is challenging the idea of the complimentary glass of water by charging customers $2.50 plus tax per glass.

The majority of what they sell is water.

Molecule Water Cafe serves New York City tap water that's put through a rigorous series of filtering mechanisms including ultraviolet rays and ozone treatments. The end result is still water but customers can add roots, herbs, pH, or electrolyte infusions to their glass.

NYC is known for some strange cuisine but it's also the reputed home of some of the country's best tap water. Critics have wondered what the owner is thinking charging for what is free from the tap.

Co-owner Adam Ruhf is unfazed.

Jack Daniel's Cease, Desist Letter Earns Good Publicity

Trademark infringement can get ugly but Jack Daniel's actually used it to their advantage. And they still managed to enforce their trademark.

The company sent a cease and desist letter to author Patrick Wensink whose new book's cover looked an awful lot like the iconic whiskey label. The letter wasn't mean and it didn't make any unnecessary demands on Wensink or his publisher. It didn't even have a whole lot of legal terms besides those needed go get the point across.

The letter was polite (even bordering on friendly) and at the end of the day Jack Daniel's ended up on top without having to spend a penny on a lawsuit.

Romney Ad Deemed 'Fair Use' Under Copyright Law

Mitt Romney's campaign ad, which included a clip of the President singing an Al Green song, was removed from YouTube for violating copyright laws but later restored as a 'fair use.'

BMG Rights Management contacted YouTube about removing the video, claiming that it contained copyrighted material. YouTube immediately removed the video from their website.

YouTube restored the video several days later in response to an appeal letter by the Romney campaign. They asserted that the video was a 'fair use' and not a copyright violation under the Digital Millennium Copyright Act. YouTube agreed.

The video contained headlines about President Obama rewarding donors and lobbyists along with a short clip of the President singing of few lines of Let's Stay Together.

So what about this ad makes it fair use?

Mediation May Be the Best Resolution for Small Businesses

Disputes happen in small businesses and when they do, owners often think "lawsuit" before "mediation."

This may be in part because lawsuits are better known. They're in the news, on television, and in books. Mediation generally isn't.

But the reason lawsuits make the news more often than mediated agreements is that lawsuits are based on conflict where one party wins and one party loses. It's dramatic and often sensational.

Mediation is probably better for business.

Why 50% of Small Biz Owners Forgo Vacation

A dwindling number of small business owners are planning to take vacations this year according to a study done by Manta, an online community for small business owners.

Only 50% of the 1,200 people surveyed said they plan to take a vacation this summer. That's fewer than took a vacation two years ago when the number was 59%. Many owners feel that they just don't have enough time to take a few days off.

It can be hard to find some time off in a busy schedule, especially for a small business with only a handful of employees to keep things running day-to-day.

For those that do have time to take a vacation, the majority won't be spending all their time relaxing.

Disneyland's Segway prohibition may soon topple, after a federal appeals court ruled it likely doesn't go far enough to comply with the Americans with Disabilities Act.

As small business owners know, any business that offers "public accommodations" like a retail store, restaurant, hotel, or theme park must provide equal access to disabled patrons under the ADA's Title III.

But the ADA also requires businesses to go one step further, according to the Ninth Circuit's ruling.

An Employer's FMLA Legal Responsibilities

If you have 50 or more employees, your business is probably covered by the Family and Medical Leave Act (FMLA).

This means your business now has obligations under the federal law to do certain things including posting requirements and providing certain forms to your employees. The different FMLA requirements for employers can be confusing, and can overlap with state leave law requirements. Here, we provide an overview of some of the important steps that covered employers should take.

Know When to Trademark for a Business Advantage

A trademark can be the most important asset you purchase for your business and knowing when to get one can be the difference between good branding and a perfect disaster.

The purpose of a trademark is to protect your brand from competitors. A strong mark uniquely identifies your business so that customers can instantly recognize your work.

It's not unusual for small business owners to register trademarks and it's important to make sure that you register at the right time for maximum impact.

It's tempting to leave trademark registration to a time in the future when you've established your business. But doing that leaves you open to several problems.

Visa, MasterCard Settle Historic Price Fixing Case

A class-action suit against Visa and MasterCard on credit card swipe fees has reached a settlement and it requires a large payout to merchants.

The credit card giants will be paying about $6 billion to plaintiffs to settle claims that credit cards engaged in price fixing on swipe fees. The settlement also includes an eight-month reduction in swipe fees that represents $1.2 billion in savings for business owners.

According to the settlement, merchants will be able to pass along the cost of credit card swipes to customers which Visa and MasterCard did not allow previously.

The terms were acceptable to the plaintiffs, a class of almost 7 million merchants according to CNN. But not all small businesses are in favor of the negotiated terms.

3 Reasons Your Business May Need a Second Lawyer

Guest post by Jennifer K. Halford, Esq.

Business owners can make the mistake of believing that one attorney can meet all of their business needs.

Yes, you should have one attorney that you trust with the majority of your legal issues. He should know your business in and out. And he should be the attorney you call with questions or when issues arise.

But all attorneys are not equal. They have different skill sets and add different value to your business. You need to recognize when your primary business attorney is not enough. And you need to feel comfortable telling him so.

Foie Gras Ban Doesn't Apply to SF Social Club?

The California Foie Gras ban went into effect last week. Yet patrons of some San Francisco restaurants can still order the French delicacy. What gives?

Several clever chefs believe they have found the loophole around the law. The law states that California restaurants cannot sell duck and goose liver. Restaurants openly defying the law argue they are not "selling" the foie gras and that they are not in fact in California.

Starting up a new business takes creativity, determination, and sacrifice. But all your efforts could go to waste if you fail to address certain legal issues that can doom a small business from the start.

Start-up owners may be able to handle a few of these legal issues on their own, but some may require a local business attorney's experience and know-how. It all depends on your specific situation.

In general, here are three legal issues that can doom a small business startup:

Small Biz Buying Office Spaces With Govt. Help

The issue of whether to rent or own is just as important for small businesses and their office space as it is for potential homeowners. But in uncertain economic times, it's hard to part with the 25% or more down payment in cash.

The number of small business loans from big banks has been down for several years. In 2010, community banks starting stepping in to provide the loans big banks wouldn't approve.

The U.S. Small Business Administration started a program in 1959 to help business owners get loans with more manageable terms than what banks could offer. Now increased interest in that program combined with low commercial real estate prices means Uncle Sam is helping more small companies buy office space.

Thank you SBA 504.

How to Sponsor a Foreign Worker for a Green Card

The United States was built through the hard work of immigrants and almost every person in this country descends from immigrants.

If you are a business owner, you may want to continue this tradition by sponsoring a foreign worker for a green card to come work for you.

However, immigration laws today are not what they used to be. In fact, it can now be prohibitively difficult for many employers to hire foreigners.

Don't short-change your hourly employees. Not only is it unfair to your workers, but an employer could also face hefty fines and other legal consequences for failing to comply with federal wage laws.

Because the laws can be confusing, employers are often uncertain about when hourly employees must be paid, according to a recent article in Inside Counsel, a magazine for corporate attorneys. Small business owners can also take advantage of the article's warnings and advice.

Here are five situations when hourly workers must be paid for their time:

Biz Owner Fights $1M Phone Bill, And Wins.

Michael Smith was facing a $1 Million phone bill from AT&T. Smith's company phone line was hacked and fraudulent calls racked up a steep bill. AT&T didn't dispute that the calls were made fraudulently, but they still insisted that Smith had to pay up.

Smith, a small-business owner in Massachusetts, actually has his phone service through Verizon. In September 2009, hackers found a way into his phone system and started using it to make international calls.

Verizon picked up on the issue and shut down his service. But then the hackers used a "dial around" through AT&T and racked up a bill for $891,470. Smith didn't have the $1.5 Million that AT&T sued him for but he couldn't make the company see reason.

That is, until his story hit the news on Monday.

Is Your Small Business Exempt from OSHA?

The Occupational Safety and Health Act covers most businesses that have employees. It has specific rules and regulations but it also specifies a number of industries that are exempt from the OSH Act.

Not everyone has to follow OSH Act regulations and many small businesses are exempt from the requirements.

Most OSH Act requirements are designed to keep employees safe and it's a not a bad idea to consider if they can help you, both for your employee's sake and yours. Keeping employees safe keeps down costs by preventing injuries but not all the OSH Act rules are helpful to small businesses.

So if you're a small business, how do you know if you're exempt from OSHA?

Son Sues Mom, Pop for Overtime at Family Biz

You can choose your employees, but you can't choose your family members.

This has been a hard lesson for a New York City mom-and-pop ice cream shop owner. You see, the actual mother and father are being sued for overtime by their son after the son claims to have worked 80 hours a week without a penny of overtime.

In a strange set of facts, the mom and dad say that their son is only suing them as an intimidation attempt after they fired him for starting a directly competitive business.

Florida lifeguard Tomas Lopez was fired after he tried to save a man's life -- an example of how a company's fear of liability can sometimes make waves and backfire.

Lopez, 21, was hired by Jeff Ellis Management to monitor a portion of a public beach in Hallandale Beach, Fla. The company allegedly gave Lopez strict instructions to stay inside his patrol zone, ABC News reports.

But when Lopez spotted a man in distress outside his patrol zone Monday afternoon, he ignored those instructions and leapt into action.

5 Must-Dos If You Operate a Home Business

Guest post by Jennifer K. Halford, Esq.

Many business owners operate their business out of their homes. It is convenient. Startup and operation costs are limited. And there are no overhead costs associated with an office building or storefront.

Yet operating a business out of your home is not as simple as sitting down at your kitchen table and getting to work.

You need to make sure you are legally able to work out of your home. Failure to do so can result in an unexpected stop of business and loss of money. Local government can shut you down for not having the right zoning or permits. Or you may miss the chance to write-off expenses on your business taxes.

Here are five things you must do if you operate a home business:

Do You Have to Give Your Employees Lunch Breaks?

A simple question: Do you have to give employee meal breaks?

A lawyerly answer: It depends.

Unfortunately, employee meal breaks is one of the most complicated areas of employment law and non-compliant employers regularly face multi-million dollar class action lawsuits. So why the confusion?

Should Businesses Drop Healthcare Under Obamacare?

The math is pretty simple for businesses and Obamacare.

Under Obamacare (the Affordable Care Act upheld Thursday by the Supreme Court), impacted businesses can either continue their employees under their current healthcare plan, or employers can drop healthcare and face the monetary penalties set in the law.

It's not unheard of for businesses to spend $10,000+ dollars per employee each year on health insurance premiums. The penalty for a business not providing health insurance under Obamacare? $2,000 per employee each year. We're not mathematicians, but which direction would J.P. Morgan go?