Free Enterprise - The FindLaw Small Business Law Blog

June 2014 Archives

How Did Hobby Lobby Win at the Supreme Court?

At the center of today's U.S. Supreme Court opinion in Burwell v. Hobby Lobby are three family-owned businesses: Hobby Lobby, Mardel, and Conestoga Wood Specialties.

The businesses were ultimately successful in their suits to avoid providing post-conception contraception to employees as mandated by Obamacare (aka the Affordable Care Act), Reuters reports.

How did these businesses prevail in front of the nation's highest court? Here's an overview of the three-step legal analysis that won their case:

Reasonable Accommodations for Ramadan? Lessons From 2 EEOC Cases

The holy month of Ramadan can mean certain religious obligations for Muslim employees, and employers should be educated about their legal obligations to reasonably accommodate Ramadan's observance.

What are reasonable accommodations for the month of Ramadan, which begins this weekend?

Maybe these two Equal Employment Opportunity Commission (EEOC) cases can illuminate this issue:

Legal to Show Over-the-Air TV at Your Business?

Small business waiting rooms and dining areas may be a perfect place for a TV, but even free over-the-air broadcasts may legally cost you.

As the U.S. Supreme Court reminded us in the recent Aereo case, just because it's free to watch a TV broadcast, that doesn't mean you can make money by letting others watch it.

Here are some legal points to consider before you show over-the-air TV broadcasts at your business:

Was Girl's KFC Story a Hoax? 3 Legal Lessons Learned

The heart-breaking story of a 3-year-old girl with severe facial scars being kicked out of a KFC may be a hoax, according to the restaurant chain. But the girl's family insists the story is real.

As you may recall, the girl was mauled by a pit bull and suffered facial injuries including the loss of one eye; she was allegedly asked to leave a KFC in Jackson, Mississippi, because her injuries were scaring customers. The story went viral and led to more than $135,000 in online donations for the girl's recovery, including a $30,000 pledge from KFC.

But as the Laurel Leader-Call reports, two investigations by KFC failed to confirm the family's story.

Hoax or not, here are three lessons that your business can learn from the controversy:

FAA: Amazon Drone Delivery Not Allowed (but We Already Knew This)

If Amazon's drone package-delivery plan is going to take off, then the company will have to deal with the FAA first.

Attempting to put a final nail in the coffin of Amazon Prime Air's proposal for a drone-based delivery service, the Federal Aviation Administration (FAA) released a fairly pointed interpretation of its current rules closing off any loopholes for delivery drones as "model aircraft." Commercial use of drones has been explicitly barred by the FAA, which our readers should already know.

Why then is this new Amazon-directed notice a big deal?

Got Unpaid Interns? 5 Do's and Don'ts for Employers

When done right, having unpaid interns at your business can be a wonderful, mutually beneficial experience.

Done wrong, however, it could land you in court.

How can you be sure to stay on the positive (and legal) side of the internship experience? By making sure that you follow the rules. Here are five do's and don'ts for employers dealing with unpaid interns this summer:

    Is a Social Media 'Non-Disparagement' Clause a Good Idea?

    Most small business owners know that negative online reviews can have a significant effect on business. But some have come up with a novel, if slightly controversial, way of trying to eliminate these negative online reviews: They're adding social media "non-disparagement" clauses to their customer contracts and terms of service agreements.

    Should you consider adding a non-disparagement clause to your own customer contracts or TOS? Here are a few points to ponder:

    Is 'Corporate Records Service' a Scam? What Businesses Need to Know

    A company called Corporate Records Service is drawing the ire of consumer protection watchdogs in several states for mailing deceptive solicitations to businesses that officials say are intended to resemble government documents.

    Indiana's Director of Consumer Protections calls it a "scam." As she told Lexington, Kentucky's WKYT-TV, Indiana is one of nearly a dozen states to be hit by Corporate Records Service's document deception.

    What should small business owners look out for?

    5 Things a Small Business Lawyer Can Do (That You Probably Can't)

    For some small business owners, hiring a business attorney may seem excessive. After all, many entrepreneurs are used to handling most of the facets of their companies without external help.

    So why would business legal help be any different?

    For you stubborn employers out there, here are five things a small business attorney can do that you probably can't:

    American Apparel Ouster: Why You Need a CEO Succession Plan

    American Apparel CEO Dov Charney has been ousted pending investigations of sexual misconduct, leaving the clothing company to pick up the pieces. The lesson for small businesses: You may need a CEO succession plan.

    Charney's "highly sexualized" private life often seeped into his role with American Apparel, leading to his eventual ouster and replacement by company CFO John Luttrell, reports the Los Angeles Times. Charney's departure also has the potential to put the company in a financial tailspin.

    So can a CEO succession plan help you avoid an American Apparel-type disaster?

    Take Your Dog to Work Day: 3 Legal Tips for Employers

    Friday is "Take Your Dog to Work Day," a yearly event that encourages businesses to welcome pets into their offices.

    According to USA Today, only 12 percent of dog owners report being able to bring their dog to work, though almost half say they would if they could. Some big-name companies -- including Amazon, Procter & Gamble, and Google -- have even begun allowing pets at the office year-round.

    But whether you let the dogs in just once a year, or on a regular basis, here are three legal tips to keep in mind when it comes to letting your employees dog it at work:

    Top 5 Cybersecurity Tips for Small Businesses

    Your small business should care about its cybersecurity as much as Fortune 500 companies do. And just in case you're wondering, your business can always do more to beef up its Internet security profile.

    Not only can focusing on cybersecurity save employers money and boost goodwill, it can help prevent businesses from being sued after a cyberattack.

    Check out these five legal tips to improve your small business' cybersecurity:

    Legal to Use 'World Cup' in Ads, Social Media Posts?

    World Cup fever has many Americans in its grip, and your business' social media strategy may be able to capitalize on it.

    But can you use the phrase "World Cup" in your ads and social media posts without FIFA, the organization behind the tournament, crying foul?

    Here are a few tips on how to market to football (soccer) fans without worrying about legality:

    Employers: What Is a Hostile Work Environment?

    As an employer, "hostile work environment" is a phrase you've probably heard many times. But do you really know what it means?

    If you don't, you probably should. Maintaining a hostile work environment at your business can create liability for harassment claims and other employee lawsuits. Equally as important: It can lead to unhappy employees and lower productivity.

    But you can't prevent what you aren't looking for. So what exactly is a hostile work environment?

    Bullied Worker Wins $4.7M for Assault, Racial Slurs

    A New York clothing store worker who was repeatedly bullied by a security guard was awarded $4.7 million by a federal court jury earlier this month.

    In his lawsuit for assault, infliction of emotional distress, and negligent hiring against the owner of the Pretty Girl clothing store where he works in the stock room, Osama Saleh alleged that the store's security guard punched him in the face and repeatedly called him "bin Laden."

    The store's management dismissed his complains about the guard's bullying, the New York Daily News reports. But now, they're on the hook for nearly $5 million in damages. What should they have done differently?

    KFC Pays $30K to Girl With Facial Scars Kicked Out of Restaurant

    KFC has agreed to pay $30,000 to the family of a girl with facial scars who was asked to leave one of its Mississippi restaurants because her injuries "disturbed other patrons."

    Victoria Wilcher, 3, was attacked by pit bulls in April, and her recovery has left her with an eyepatch and numerous scars across her face. After the Wilchers shared their story on social media -- of being kicked out of a KFC in Jackson, Mississippi, last week -- KFC responded by donating $30,000 to "assist with her medical bills."

    Did KFC respond properly to this incident?

    3 Things to Know About Starbucks' College Tuition Perk

    Starbucks is making headlines this week, but it's got nothing to do with its coffee. The company has announced that it will be providing a new benefit to its 135,000 U.S. employees: subsidized or in some cases free college tuition to Arizona State University's online program.

    What should small business owners know about Starbucks' new perk, called the College Achievement Plan? Here are three important facts:

    Why Is Tesla 'Giving Away' All of Its Patents?

    Electric car company Tesla has made the bold (or perhaps foolhardy?) move of giving away all of its patents.

    Tesla CEO Elon Musk announced Thursday that Tesla would not engage in patent litigation against anyone who "in good faith, wants to use our technology," reports Wired. The goal of this move is to accelerate the adoption of electric cars.

    But will opening up Tesla's patents to the free market be the company's downfall?

    5 Rules for Displaying the U.S. Flag at Your Business

    June 14 is Flag Day, the holiday designated by President Woodrow Wilson in 1916 to honor the adoption of the American Flag on June 14, 1777. This makes it a great day to fly an American flag at your business (though some businesses even choose to fly an American flag every day; Woodrow Wilson would approve).

    However, what some business owners may not know is that there are exact rules for how and when the American flag can be flown.

    Here are five rules that should be followed when displaying an American flag at your business:

    Workplace-Access Policy Needs a Section 7 Exception: NLRB

    The NLRB has ruled that an employer's blanket off-duty workplace-access policy needs a Section 7 exception, explicitly allowing limited access for protected union or labor activities.

    If your business has a policy that prohibits off-the-clock socializing or even a blanket policy against social media use, then you may need to add a similar exception for certain activities, pursuant to Section 7 of the National Labor Relations Act.

    Here's how a Section 7 exception works and why the NLRB keeps harping on this point:

    World Cup Office Pools: Are They Legal?

    Today marks the start of the 2014 FIFA World Cup in Brazil. And just like March Madness, the Olympics, or any other protracted sporting event, at least a few of your employees will no doubt be swept up in the surrounding fervor.

    In fact, your employees (and possibly you) may even get an office pool going, wagering a little money on the outcome of individual matches or the tournament as a whole.

    So it may be wise to kick off with this question: Are World Cup office pools legal?

    Retaining a Lawyer for Your Business: 3 Things to Know

    As your business grows, you may consider having a lawyer "on retainer" to handle any legal curveballs that come your way. But what exactly does that mean?

    Instead of using different attorneys on an ad-hoc basis, the idea is that you can retain the services of an attorney whom you trust with your business' affairs.

    Here are three things your business should know about retaining an attorney:

    5 Ways to Keep Tabs on Your Business While on Vacation

    If you're a small business owner, it may be tempting just to work straight through the summer (not to mention fall, winter, and spring). After all, how are you supposed to run a business when you're gone?

    But what if you could take that much-needed vacation while still keeping tabs on your business and employees?

    We have some good news for you: You can, and you should. Here are five ways to keep business going full-steam ahead while you're blowing off a little of your own steam poolside:

    Tiffany Employee's Lawsuit Alleges Racial Discrimination

    Tiffany & Co. is being sued for alleged racial discrimination by an employee who claims that he is the only African-American at Tiffany in a management position.

    Michael McClure, a senior manager and employee at Tiffany for over two decades, claims that his long string of positive performance reviews came to an end after he was asked to send a new senior vice president his picture. According to The New York Times, this spring McClure received a warning for termination, despite positive numbers associated with his stores.

    What is Tiffany being accused of, and how can other businesses avoid similar legal trouble?

    Noncompete Clauses Are Everywhere, but Does Your Business Need Them?

    Noncompete clauses are a great tool for keeping your former employees from becoming your new competition, but do you really need them?

    According to The New York Times, noncompete agreements are on the rise even in industries which have been traditionally light on paperwork. Case in point: a Massachusetts man whose job involves spraying pesticide on laws "had to sign a two-year noncompete agreement," the Times reports.

    Should your business be including noncompete clauses in work contracts by default?

    What Happens After a BBB Complaint?

    When consumers have a gripe with a business, such Texas-based Bitcoin "mining" computer maker CoinTerra, they often turn to the Better Business Bureau (BBB).

    As Austin's KXAN-TV explains, the BBB catalogs customer complaints -- in this case, that the company's computers allegedly failed to perform as advertised and that promised refunds haven't appeared. The BBB then contacts the company.

    But business owners may be wondering: What exactly happens when a customer makes a complaint to the BBB? And what's the worst that can happen if you don't respond to a BBB complaint?

    Brewery, Godzilla's Owners Settle 'Mechahopzilla' Trademark Case

    A Louisiana brewery has settled with the legal owners of "Godzilla" over a beer dubbed "Mechahopzilla."

    New Orleans Lager & Ale Brewing Co. (NOLA) had released Mechahopzilla and attempted to call it a "parody" of the Godzilla trademark before eventually settling. According to The Hollywood Reporter, Toho Co. Ltd, the owner of the Godzilla trademark, "wasn't laughing."

    Is this yet another case of trademark being used to squelch a small business?

    7 Legal Tips for Hosting Live Bands at Your Business

    Adding live music can be a great way to liven up the atmosphere at your bar, restaurant, or any other place of business.

    Differing musical tastes aside, sometimes even the most talented band can lead to major headaches — legal and otherwise — for those fail to properly prepare. Add a raucous audience to the mix, and you could have a recipe for disaster.

    To help you avoid any potential problems, here are seven legal tips for hosting live bands at your business:

    Burt's Bees Co-Founder Ousted: 5 Lessons for Business Owners

    The bearded co-founder of Burt's Bees reveals in a recent documentary that he was ousted by the company after he had an affair with an employee.

    Burt Shavitz, 79, is the subject of a new documentary "Burt's Buzz" which chronicles Shavitz's life and his role in the founding of Burt's Bees, whose products still bear his cartoon likeness, reports The Associated Press.

    What can we learn from Shavitz's 1993 ouster and what's happened since? Here are at least five things for business owners to keep in mind:

    'Febreze Attack' on Shoplifting Suspects Gets Store Manager Fired

    Any business owner wants to encourage employees to do their best to prevent shoplifting and take action when they see it happening.

    But the manager of a Family Dollar store in Saginaw, Michigan, may have taken things a little too far when he attacked suspected shoplifters with a can of Febreze they'd allegedly stolen, Detroit's WWJ-TV reports.

    The manager has since been fired, according to TMZ. But what should business owners or employees do if they catch shoplifters in the act?

    Crowdsourcing Your Invention? 3 Legal Tips That Can Pay Off

    Crowdsourcing your invention sounds like a good idea to many entrepreneurs, but there are some worrisome legal tripping points.

    In February, the White House announced it would even consider "crowdsourcing" the review of patents, in an attempt to deal with the increasing issue of patent trolls.

    So before you decide to let your invention enter the fray, here are three legal tips to consider when crowdsourcing your invention:

    5 Things Not to Do After a Sexual Harassment Complaint

    No matter how much training you provide or how comprehensive your employee handbook may be, your business may eventually be confronted with a sexual harassment complaint.

    What you do as the employer to address those charges may in large part determine what happens next.

    Here are five things you'll want to avoid doing if an employee files a workplace sexual harassment claim:

    Twitter's New Guide for Small Businesses: 3 Legal Tips to Add

    Twitter is reaching out to entrepreneurs with a new interactive guide on how to make Twitter work -- and pay off -- for small businesses. This somewhat bubbly graphical walkthrough takes business owners with any level of Twitter-savvy and attempts to teach them a thing or two.

    What Twitter leaves out of its helpful guide, however, are a couple of helpful legal tips.

    That's where we come in. Here are three legal tips that all small business owners on Twitter should keep in mind:

    Should You Support Nat'l Entrepreneurs' Day (HR 401)?

    After a Twitter petition successfully convinced President Obama to declare a National Entrepreneurs' Day in 2010, a group of entrepreneurs has now set their sights on Congress.

    House Resolution 401, sponsored by Rep. Scott Peters (D-California), would support the designation of the third Tuesday of November as National Entrepreneurs' Day.

    Besides just being a mouthful to say, what would a National Entrepreneurs' Day do to actually benefit entrepreneurs and other small business owners?

    5 Things to Do After an Employee Resigns or Quits

    When an employee leaves your company there may be some significant "housekeeping" to do before the position can be filled again. And none of that includes telling the ex-employee not to let his or her rear end hit the door on the way out.

    Be professional and consider these five things you may want to do when an employee resigns or quits: