Free Enterprise - The FindLaw Small Business Law Blog

January 2015 Archives

'Mark of the Beast' Accommodation Lawsuit: Lessons for Employers

The Equal Opportunity Employment Commission (EEOC) prevailed earlier this week in a lawsuit that pitted a religious employee against an employer that wouldn't give him a reasonable accommodation.

Well, it's really more complicated than that. The employee claimed that the employer's biometric hand-scanning system, used for time tracking, would brand him with the Biblical "Mark of the Beast." He quit after neither he nor the employer could come to an agreement; later, he got the EEOC involved.

This case is certainly an outlier, but it does bring up the issue of religious accommodation in the workplace. Here's what business owners need to know:

Small Business 101: What Is 'Equity' in a Company?

As you know, starting and operating a business takes money. And one of the many tough decisions business owners must make is whether that money should come from debt or from equity.

Most people are probably familiar with debt, whether from credit cards, car loans or home mortgages. A business loan is no different: You borrow money in exchange for the promise to repay it under agreed-upon conditions. Loans allow a business owner to maintain complete control over a business, but also require regular payments regardless of how the business is doing; they also often require a business owner to put up personal assets as collateral. That's why some business owners decide to raise business capital by securing equity investments in their company.

But what is equity?

As a business owner, should you change your registered agent?

As you probably know, every corporation is required to have a registered agent. This person (or entity, in some cases) is the one who accepts important legal documents (such as lawsuits) on the business' behalf. But after designating a particular person, company, or even yourself as your business' registered agent, you may face a need to change that designation.

Here are a few common scenarios when that might be necessary:

Say it ain't so! SkyMall, the ubiquitous in-flight shopping catalog, filed for bankruptcy protection Friday. While seat-back pockets will never be the same, the company's ordeal offers some legal lessons for business owners.

SkyMall's parent company, Phoenix-based Xhibit Corp., "suspended its retail catalog operations" last week, Reuters reports. Staff layoffs, meetings with creditors, and court hearings are on the itinerary as the company makes its way through the bankruptcy process.

What can small business owners learn from SkyMall's bankruptcy filing? Here are five takeaways:

Ex-McDonald's Employees Sue Company Over Franchisee's Actions

Following closely on news that the National Labor Relations Board (NLRB) intends to sue McDonald's as a "joint employer" along with its franchisees, 10 former McDonald's employees in Virginia are suing the franchisee and McDonald's for employment discrimination under the Civil Rights Act.

The ex-employees claim that they were subject to racially charged language and that supervisors at their McDonald's fired black and Hispanic employees because they didn't "fit the profile."

What does this mean for franchisees and corporations?

What Is Trademark Tacking?

A unanimous U.S. Supreme Court on Wednesday decided in Hana Financial, Inc. v. Hana Bank that the issue of "trademark tacking" was a question for a jury, not a judge.

We all know (hopefully) what a trademark is, but what is "trademark tacking"?

After Sony Hack, 3 Things Businesses Are Doing Differently

In the wake of the large-scale hack of Sony Pictures late last year, businesses have begun implementing security measures to prevent being victimized by a similar attack.

As Bloomberg reports, unlike previous data breaches, which were primarily focused on financial data and trade secrets, the Sony hack included the release of a large amount of personal information on Sony employees. This information included details on employee pay, medical records, and confidential correspondence between Sony employees.

What can businesses to prevent similar data breaches from occurring in the future? Here are three ways some businesses are improving their data security:

Calif.'s New Contractor Liability Law: 5 Things to Know

Among the hundreds of new California laws that went into effect this year is AB 1897. The law affects businesses that use contracting agencies to hire contract employees, making the business liable for the wage and hour violations of the contract agency.

The law is designed to encourage businesses to police their own contractors, using the stick of liability if they don't. Workers whose contracting agencies fail to pay required overtime, for example, can sue either the agency or the business that hired the agency to provide the contract labor.

What do California businesses need to know about this new law?

What Can SMBs Learn From Lagunitas' Trademark (Non) Lawsuit?

Yesterday, news broke that Northern California brewery Lagunitas was suing Sierra Nevada, the other big maker of craft beers in Northern California. The controversy centered on the design and use of the letters "IPA" in the labels for both breweries' India Pale Ales. Lagunitas claimed that Sierra Nevada's design infringed on a trademark for its particular use of "IPA."

Today, the San Francisco Chronicle reported that Lagunitas' founder announced over Twitter that he was dropping the suit after some harsh public criticism.

What can businesses learn from Lagunitas' mini-controversy?

Can You Make Employees Pay for Breakage or Customer Theft?

In the business world, "shrinkage" (loss of inventory due to theft) and "breakage" (stuff getting broken) can eat into revenue, especially in the restaurant business. Dishes get broken, customers leave without paying -- what's a business owner to do?

It's tempting to make employees pay for that. After all, they broke the dishes. They weren't vigilant enough to catch the customers dining and dashing. It's only fair to make them pay for their negligence, right?

Except that, depending on where you are, that might be a violation of state labor laws.

Small Business W-2 Forms: 5 Legal Reminders

It's January, which for small business owners means it's W-2 time.

This year, W-2 forms are due in by March 2 for those small businesses filing by mail, or March 31 for those who choose to e-file; of course, employees must be provided copies of their W-2 forms by January 31. But what else do small business owners need to know about W-2 forms?

Here are five legal reminders:

Operating a Business Without a License: What Can Happen?

Anyone who has ever started a small business knows there’s always another piece of paperwork that needs to be filled out. Leases. Licenses. Supplier agreements. Receipts and contracts with customers and clients.

And that isn’t even touching on costs: Federal taxes. State taxes. City taxes. Sales taxes. After a while, you may begin to feel like you’re paying all of your profits off to the tax man.

But don’t overlook one easy-to-miss requirement of starting a business: the paperwork and fee for your local business license.

Express, Implied, and Quasi-Contracts: What's the Difference?

When it comes to business contracts, there are generally three different types: express, implied, and quasi-contracts.

A contract is a legally enforceable agreement between two or more parties. In many cases, a contract is an actual written document, signed by both parties. But this is not always necessarily the case.

What are the differences between express, implied and quasi-contracts?

Yet Another Unpaid Intern Lawsuit Settles: This Time, It's Viacom

Media giant Viacom has reached a settlement in a class action lawsuit brought by former unpaid interns of the company.

The terms of the settlement have not yet been disclosed, according to The Hollywood Reporter. But Viacom -- whose holdings include MTV, Paramount Pictures and Comedy Central -- is just the latest media company to have an internship policy come back to bite them in the form of a class action lawsuit.

What did Viacom allegedly do wrong, and what can small business owners learn from this case?

Are Your Emails Fair Game When Your Company Is Sued?

Think your work emails are completely private? Think again. They may not be so confidential when your company gets dragged into court.

Uber's Chief Executive Travis Kalanick found this out the hard way when a federal judge ruled that the rideshare company had to disclose Kalanick's emails in a California lawsuit accusing the company of deceiving customers. Fortune reports that last week's ruling upheld an earlier ruling by a magistrate judge allowing executive emails to be reviewed for evidence of Uber's tipping practices.

Does this mean all your business' emails are fair game in a lawsuit?

Obamacare's Employer Mandate Takes Effect: 5 Things to Know

Obamacare's employer mandate went into effect January 1, and there are a few things that employers should know.

The mandate was supposed to go into effect last year, but it was delayed for a year to allow businesses to implement the necessary changes. So what were those changes exactly?

Here are five things employers should know about the Obamacare employer mandate: