Free Enterprise - The FindLaw Small Business Law Blog

September 2012 Archives

Beware of 'Employee of the Month' Programs

Employee of the month programs are used in a lot of large chain restaurants and hotels but you can also find them in small businesses. In those situations, they're probably hurting your bottom line.

It's not that rewarding employees for good work is a bad idea. People that feel appreciated are likely to work harder and be loyal which are important qualities for any employee. The problem is that the program creates a competitive environment which can lead to hostility towards the winners.

It can also easily lead to frustration with the company and trouble managing your workers. From there it could be the basis for a lawsuit.

Is your small business reeling from the economic effects of a recent disaster? If so, you may qualify for a small business disaster loan to help get you and your business back on your feet.

A small business doesn't have to be physically damaged in order to qualify for an Economic Injury Disaster Loan from the Small Business Administration. These loans focus solely on how cash-strapped a business is, not how much physical damage it's suffered.

How much money is at stake? It depends on the scope of the disaster. For example, after Hurricane Isaac slammed parts of the Gulf Coast last month, the SBA approved $1.4 million in disaster loans for residents and businesses in Mississippi, according to the Associated Press.

How do you get an Economic Injury Disaster Loan from the SBA? Here are some general guidelines:

Obama's Small Biz Tax Cuts Explained

As part of his re-election campaign President Obama has been talking about his commitment to small business and the tax cuts he's gotten during his term. When he says it, there are 18 small business tax cuts passed during his administration.

Like most campaign talk, those numbers are somewhat inflated. Obama counts tax extensions and renewals as separate measures, reports CNN.

All in all there were 14 unique tax breaks for businesses and 5 of them are still in effect. The real question is whether that was actually good for small business.

GA Shooting Range's Liquor License Approved

Who says guns and alcohol don't mix? Certainly not the Powder Springs City Council in Georgia, which approved a liquor license for a proposed shooting range that will serve alcohol.

The owners of a gun shop came up with the idea of opening a $3.5 million indoor gun range complete with its own bar, reports NBC. But the owners do note that patrons who visit the bar will be flagged and prevented from returning to the firing range.

So is this a good or safe business mix? Or is this just clever marketing as patrons won't actually be boozing with one hand and shooting a gun with the other?

Why Your Workplace Needs a Gun Policy

If you employ more than 10 people and you don't have a gun policy in your office, it may be time to write one. There are 88.8 firearms per 100 people in the United States, according to The Huffington Post, meaning that it's possible someone in your workplace owns a gun.

The time to deal with whether employees can have guns in the office isn't when a conflict comes up; by that point it's almost too late. A gun policy allows you to be proactive which can protect your company.

Just like a dress code or Internet-use policy, a gun policy gives employees a heads-up about acceptable behavior and stops potential issues from becoming real problems.

Legal to Use 'Made in America' Label on Your Products?

'Made in America' is a proud label for any product since it signifies to customers that the materials and labor come from American workers. It means to them that they're supporting companies that keep jobs in this country.

Part of the reason there's so much faith in the label is that it's highly regulated by the Federal Trade Commission (FTC).

Laws about truth in advertising also apply to labeling and require companies to back up the claims about their products' attributes with facts. The 'Made in America' label is no different and the regulations make it clear what qualifies. If you fail to follow the rules it can be costly.

Is Your Social Media Policy Valid?

Costco recently had their social media policy invalidated by the National Labor Relations Board (NLRB).

Costco's policy basically prevented employees from making statements on social media sites like Facebook and Twitter that could damage the company or other employees' reputations, reports Inside Counsel.

In invalidating the policy, the NLRB found that it was overly broad and violated Costco's employees' free speech rights under the National Labor Relations Act (NLRA).

How to Rely on iPads Without Risking Your Business

Almost all businesses rely on a laptop, iPad, or other computer in some way or other. It's useful for storing customer data, office productivity, store inventory, you name it.

The reason to have your own office computer is simple: it provides an added level of security. Most businesses have information on customers and employees that they need to keep private. They also want to protect themselves from malicious software and viruses

But that computer is pretty bulky. Can a smaller device provide as much security?

Rename Your Biz if the Name Doesn't Work

Choosing a new business name is the quickest route to a do-over if there are problems with the original or you just need a corporate pick-me-up.

Maybe your original idea was already owned by someone else or a PR scandal makes customers cringe. Or maybe the name you chose is hard to pronounce, gets mixed-up often, or it's just time for a change. Whatever the reason, a new name is one of the easiest ways to rebrand a company.

Just because it's easy doesn't mean you don't need to do anything. A name change is cheap but there are still a few steps to follow.

Cashier Rips Up Women's Real $100 Bills

It may be unusual for shoppers to whip out $100 bills at Walmart but that doesn't excuse the clerk who ripped up a customer's legitimate bills when she tried to pay.

Julia Garcia was doing some late-night Christmas shopping in December 2010 when she pulled out a $100 bill to pay for her purchases. The cashier took it, spoke briefly to another cashier, and then ripped the bill in half. He hadn't done any counterfeit detection that Garcia noticed.

Garcia was upset and when a manager was called over, she pulled out a second $100 bill to show him that it was legitimate. But the manager took it and ripped that one up too. Then they told her should would have to wait in the store for police to show up.

5 Ways to Finance a Small Business

Great, so you have an amazing idea for a product or service. Now all you need is financing to turn that small business idea into a reality.

The truth is that many million-dollar ideas are buried at the financing phase. The unfortunate reality is that unless you are blessed with considerable wealth, you will have to seek financing for your business, and if you don't get it, your business may never make it off the ground.

There are many different ways to get small business financing, each with its advantages and disadvantages. Here are five popular ways as compiled by Business News Daily.

Baker's Bills: Is My Homemade Food Biz Legal?

'Baker's Bills' are the cute name for laws that allow individuals to sell homemade food to the public. More formally known as cottage food laws, they permit small-time entrepreneurs to sell food made in home kitchens rather than commercial spaces.

So far 32 states have laws that apply to the sale of home-baked goods. They generally limit the amount of money these businesses can make before they have to upgrade to commercial kitchen space.

California is the latest state to consider implementing laws permitting the sale of homemade food. But not everyone is jumping for joy.

Top 3 Legal Issues Facing Franchise Owners

Starting a franchise may be a great way to become a small business owner, without going through a lot of the growing pains that small business owners typically go through. However, franchising also has a lot of unique legal issues that other small business owners don't face.

With a franchise, the advantage for a business owner is that he or she is not starting from scratch.

Instead, the business owner (franchisee) is able to start with the brand, name recognition, and customer loyalty of a much larger chain (the franchisor). In exchange, the franchisee has to pay the franchisor a fee and possibly royalties on every sale.

End a Biz Partnership Without Ending Your Business

Many businesses start out as partnerships but that doesn't mean they're destined to stay that way.

Business partnerships can end for a number of reasons, both good and bad. Maybe one partner wants to retire, is moving, or is having some financial difficulty and needs to bow out. Or maybe the relationship between the partners is strained and that is negatively affecting the business.

The best time to figure out ending a business partnership is when you start the company. But if you didn't take of it then, you can still manage it when it happens.

Incorporating Your Business: Pros and Cons

If you're starting a new business, one of the first decisions you'll have to make is how to organize your business and whether you should incorporate your business.

There are many different types of business forms you can take including sole proprietorships, partnerships, limited liability companies, and corporations. The type of business you plan to run, your willingness to take on risk, and the amount of business you expect will likely drive what type of business form you take.

Incorporating your business is probably the most expensive and complicated business form you can take. So before you take that step into incorporation, you may want to consider these pros and cons.

To Buy or Rent, a Small Biz Dilemma

Is a small business owner better off renting or buying space to set up shop? It's an age-old question, but answers are changing a bit thanks to the evolving habits of modern American workers.

Shared office space and telecommuting are just two types of alternative work arrangements that are turning old arguments upside-down in the buy-or-rent debate.

Still, traditional concerns about cost control are on the tops of business owners' minds, as a New York Times blogger recently pointed out. Here are five questions you'll want to ask yourself if you're facing a buy v. rent dilemma:

Top 5 Restaurant Safety Concerns Not to be Overlooked

Working in a restaurant carries a lot of safety concerns, both to your customers and your staff.

Restaurant staff know that working in a restaurant kitchen can be dangerous. They can take a more active role letting you know when dangerous situations occur. Customers, meanwhile, may not be as aware or know when to notify staff of a potential danger.

Instead of waiting for them to come to you, be proactive about preventing accidents and keeping customers safe in your restaurant.

How to Manage Out of State Employees

A great thing about technology is that it allows even the smallest companies to have a national presence. However, you should be prepared for dealing with some of the unique challenges of managing out-of-state employees.

When you first started your company, you and your small group of employees may have developed a tight team atmosphere. It can be hard to replicate this same team feeling with employees you rarely ever see.

Still, if you are prepared for managing out-of-state employees, you can run a successful business with employees working remotely without missing a beat. Here are five tips that can help you, as compiled by CBS:

The 10 States with the Worst Legal Climates

It's no secret that there are best and worst legal climates for a business to start based on state law. Unless you thought it was a coincidence that credit cards all come from Delaware in which case don't let us interrupt your daydreams.

But for those who are looking for the best and worst places to launch a business, the U.S. Chamber Institute for Legal Reform has some answers. Their survey of business attorneys and business leaders, published Monday, gives some insight into the legal climates of various states.

It's no shock that Delaware is number 1 but when it comes to the worst states, you may be surprised.

Record Number of Reasons to Follow Wage and Hour Laws

If you haven't been interested in wage and hour compliance before, this bit of information may pique your interest.

There have been more wage and hour lawsuits filed against employers in the first seven months of this year than the whole of last year. Specifically, there have been 7,064 Fair Labor Standards Act lawsuits filed this year, as compared to 7,006 filed for all of 2011, reports NBC. A decade ago, there were only about 2,000 such lawsuits filed a year.

So does this mean that more employers are breaking the law? Not necessarily. According to the report, the federal government has been enforcing wage and hour laws much more closely. In addition, widely publicized wage and hour settlements in the tens of millions of dollars may have alerted many employees to previously unknown laws. So how can you prevent your company from getting sued?

What You Can Learn from the Apple Samsung Decision

While you may not find yourself in the middle of a global patent infringement battle like the Apple Samsung case, there are things you can learn from Apple (and Samsung's) litigation strategy.

Let's say your company developed a new technology and spent considerable fees in properly filing and registering the patents. As the technology gained popularity, you quickly notice that others -- including much larger competitors -- have developed similar technology.

Fresh from the news of Apple enforcing its patents against Samsung, you may be eager to sue all your competitors too. However, unless you have the war chest of Apple, you may need to think twice before jumping into developing your litigation strategy, reports Forbes.

Ben & Jerry's in X-Rated DVDs Violate Trademark

If you've ever wondered how far you should go to protect your trademark, look no further than Ben & Jerry's suit against the maker of a line of x-rated movies.

The films are part of a pornographic series called 'Ben & Cherry's' that uses titles reminiscent of some popular Ben & Jerry's flavors. The lawsuit says that the DVD names and the series title will be confusing to consumers who are looking for Ben & Jerry's ice cream. They're also claiming that the films will tarnish Ben & Jerry's reputation.

The names aren't the only problem listed in the suit, reports ABC. The video packaging also allegedly mimics Ben and Jerry's which makes their case stronger.

Is it OK to Provide Medicine, Aspirin at Work?

When an employee has a headache at work, offering over-the-counter medication may seem like a logical and humane way to go. Not only is it kind to your employees but it also keeps productivity up. Right?

While those things are true, giving out OTC medication at work is probably not a good idea, legally speaking.

You may think providing the medicine is a good service. But it also leaves your business vulnerable to a much bigger potential headache — lawsuits.

7 Business Deals That Require a Written Contract

Running a small business means making deals and agreements all the time. Often it's just a verbal nod from both parties but deals can mean a written contract.

There are lots of business situations where you could use a written contract but there are also some where you almost have to in order to protect your business. Telling the difference is important unless you have enough cash to keep an attorney around full time.

Rather than leaving it to chance, check out our list of the most common business activities that need a written contract.

An ex-employee lawsuit can be an expensive hassle, even if you eventually win. What are the best ways to avoid being sued by former employees?

A small business owner's strategy to prevent legal problems should begin well before you hire the employee. Setting rules early, and making sure everyone knows them, can pay off in the long run.

With that in mind, here are five tips to avoid legal quarrels with workers after they leave your company: