Free Enterprise - The FindLaw Small Business Law Blog

February 2016 Archives

Armed at Work: Lessons From a Georgia Business

Everyone's got a different idea of what keeps the peace. Gandhi preached nonviolent resistance and Georgia businessman Lance Toland believes that armed women are the answer.

"As more people arm themselves, women in particular, the world's going to be a safer place," Toland told The Daily Beast. Referring to his office workers specifically, he said, "This is a group of very, very professional women, well-educated, pilots, but they're armed and they're deadly, so do not screw with us." Prompted by a rash of crime in the metro Atlanta area, Toland sponsored concealed carry licenses for his crew.

One of the most important tasks for every startup is instilling the king of corporate culture that defines your business; an ethos that can guide your fledgling company through good times and bad; the defining characteristic that sets you apart, and hopefully above, the rest.

And there are so many ways to create an office culture: diversity celebrations, Chief Happiness Officers, and sending the entire staff to telecommute from Cambodia. Or, you can email your staff reminding them "not use the stairwells to smoke, drink, eat, or have sex."

Crowdfunding vs. Small Business Loan

Everyone seems to be asking for money to make their dreams come true, so why shouldn't you? Your aunt is crowdfunding her feature film and your nephew's collecting cash for an album.

Now you are thinking you'd like to do the same, generating capital for your small business through one of the many crowdfunding apps in existence. Let's take a look at some key characteristics of a successful crowdfunding project, some risks, and how it all compares to the traditional business loan.

States Seek Internet Sales Tax ... and Lawsuits

In an effort to get sued, officials in 12 states are moving to impose taxes on out-of-state Internet retailers. This is meant to prompt Congress to pass a federal law, uniform standards for the revenue that states consider their due. They hope that retailers will challenge the taxation and create a sense of urgency in the federal government.

Alabama's deputy revenue chief, Joe Garrett, for example, told The Wall Street Journal he wants his state to get sued soon. The desired effect is action at a national level.

In case you missed it, Kanye West dropped some knowledge regarding the perks and perils of being an entrepreneur. To wit: "If you are an entrepreneur you may have debt and lawsuits #facts." The assertion came a week after the artist admitted to being $53 million in debt.

But just because Kanye included the irrefutable hashtag, does that mean his tweet is actually correct? Are lawsuits and debts facts of entrepreneurial life?

5 Tips on Choosing Security Cameras for Your Business

You are concerned about security for your small business but don't want to spend a fortune on a system. Is this something you can choose yourself and how will you know what will work for you?

Well, yes. You can choose a security camera and set it up yourself but you have to choose the right one. Here are some tips from Small Business Trends on choosing and installing a system by yourself for your small business.

Here's the good news: you've got a million- or billion-dollar idea. Here's the bad news: not all those dollars will be yours. No matter the idea, every startup has a team. And how those team members allocate ownership shares in the company could have profound legal and economic impacts on the startup.

So how do you get founder equity splits right?

IRS Small Business Tax Reviews Are Up

It's safe to say that an Internal Revenue Service audit scares most people. Even if your taxes are simple and you pay on time, and you have nothing to fear, getting a notice from the IRS is bound to make you nervous. This is all the more so for small businesses, which can have very complex finances despite being tiny.

Given this, you may not be thrilled to hear that last year the IRS increased examinations of business tax returns. Nonetheless, the agency collected less money than in previous years. Let's look at the numbers and what they say.

Why Your Small Business Should Outsource Payroll

If you believed in doing things someone else's way, you probably wouldn't have your own business. Still, just because you have a vision and goals for your enterprise does not mean you do everything on your own, and especially not payroll.

There are some aspects of running a business that are best left to experts. So even if you are good with figures and eager to keep costs low by handling as much as possible on your own, outsource employee payroll. According to Evergreen Small Business, a practical how-to site for small businesses, trying to save on payroll could end up costing you.

Back in August, we wrote about a Florida gun range proclaiming itself "Muslim-free" and promptly being sued. We wrote how this kind of religious discrimination was probably a bad idea, from a moral, legal, and profitable standpoint. Apparently Chad and Nicole Neal over at Save Yourself Survival and Tactical Gun Range in Muskogee County, Oklahoma aren't regular readers.

First, Save Yourself posted a sign out front that declared the shooting range "Muslim-free." Then it denied access to Raja'ee Fatihah, a U.S. Army reservist, an avid shooter, and a Muslim. Unsurprisingly, Fatihah is suing Save Yourself for discrimination.

Litigation may be a fact of life when you run a small business, but that doesn't mean small business owners don't want to avoid it as much as possible. The bad news is that the majority of the litigation risk comes from your own employees. The good news is that you can mitigate this risk with some common sense adjustments to your managerial style.

Here's how your company's management culture can minimize your risk of employment litigation:

Startup Targets: Avoid Money Laundering Schemes

You have a great new idea for a business and you meet a potential investor. This person, unlike most people you meet, seems exceptionally eager to part with money. Your investor wants to put cash into your legitimate business, which is great ... maybe, if this investor isn't shady.

Watching TV you've seen money laundering schemes dramatized. But how do you spot such crimes in real life?

Retaliatory Discrimination Tops the EEOC's List of Worker Complaints

The Equal Employment Opportunity Commission releases a report every year detailing the various types of discrimination claims workers made. The 2015 report came out last week, and the EEOC says that retaliation claims were the most commonly cited reason for workplace discrimination last year and, thus, the greatest concern for workers.

So what is workplace retaliation and what can you do to avoid making the same mistake as many employers who faced EEOC retaliation complaints last year?

Just when you thought it was safe to order office supplies ... Well, actually, ordering supplies for your office is probably pretty safe, just as long as you're not ordering from a few unscrupulous vendors in California or Maryland.

The Federal Trade Commission just charged 12 companies in those two states for ripping off non-profit organizations and small businesses, and "tricking them into paying for overpriced office and cleaning supplies they never ordered." So how do you avoid the same fate as some of these victims?

BLINC or You'll Miss It: Arbitration Checklist for Your Business

BLINC sounds like a new social network or tech device, but it is a mnemonic device designed to remind you of the important factors when drafting an arbitration clause. It'll also help when you are reviewing a contract and reading someone else's terms.

If you don't BLINC you might miss all there is to get about these agreements. Increasingly arbitration agreements are a condition of closing deals and doing business. Know what you need to about these all-important alternatives to litigation.

We're entrepreneurs and small business owners for a reason -- we think we can do it better than anyone else. But that doesn't mean we can do it all, and there are some cases where it's necessary to delegate planning, authority, and action to your employees.

It may not be easy, but there are ways to make delegating at work more effective. Here are three of them:

Disruption, Interrupted: CA Regulators Catch Up With Zenefits

Zenefits, a Silicon Valley startup that was valued at $4.5 billion late last year, has been violating California regulations by using insurance agents who were not properly certified. This week, the state's Department of Insurance announced that it is investigating Zenefits, according to the Wall Street Journal.

This prompted the startup's founder and CEO, Parker Conrad, to quit. The new CEO, David Sacks, has changed the company motto and taken responsibility, admitting Zenefits' error. But the WSJ points out that this is just one of many seemingly successful startups that got big by ignoring industry regulations and asks if that's the true secret to Silicon Valley's successes.

Get Help Protecting Your Business Assets

Right now your business is running smoothly. Everything is operating and workers seem happy and healthy. But a business, like a person, can experience sudden setbacks. Accidents and emergencies happen, so you have to ensure that you are following the law and that business assets are protected. Otherwise, a fluke occurrence could wipe out your empire.

We get insurance to cover our homes and health and lives. Yet business owners don't always apply that principle to their babies, the shop you've worked so hard to build. Let's consider a few reasons to review and protect your assets.

We're big advocates of registering your trademarks -- it's a relatively painless process that can protect your intellectual property from infringement. We say "relatively painless" because, unlike the trademark for Havana Club rum, most trademark applications don't take 21 years to be processed.

One way to avoid having your trademark application sit around for two decades is to stay out of the kind of litigation Havana Club got involved in. Here are a few others:

Why Small Businesses Are Adding Jobs in 2016

It's common during a presidential campaign season to hear a lot about small businesses and their importance to the national economy. The small business occupies a funny place in the American heart - both beloved underdog and the symbol of infinite individual potential - and this month, the statistics prove that both are true.

In January 2016 small business with 1-49 employees created 79,000 new jobs, according to Small Business Trends. Analysis of the monthly Small Business Report -- put together by the human resources group ADP in collaboration with Moody's Analytics -- shows that, despite many market fluctuations in January, small business owners are confident about 2016.

Cold and flu season is in full swing. E. coli is popping up at restaurants nationwide. And now the Zika virus is out there wreaking havoc. You've already got a full plate as a small business owner, and now you have to worry about the impact that sick employees could have on your small business?

And it's not just lost presence and productivity -- sick workers can cost your small business millions in lost revenue as well. Here's how:

Managers Liable for Veteran Employment Discrimination

We don't often think of soldiers as a protected class -- probably because the role of the soldier is to protect. But people who served in the military are protected from employment discrimination in American law, and there is in fact a strong statute, the Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994, that provides bases for liability that other protected classes do not have.

Regulation Nation: What Industries Are Most Carefully Overseen?

All types of businesses are regulated to ensure that certain standards are met and that people are not harmed, or that if they are, there is legal recourse. But some industries tend to be more highly regulated than others, and some are so new that regulators are just starting to figure out what to do.

Are You Celebrating Black History Month in the Office?

Identity issues are a touchy topic in the office. For the most part at work, we put our personal selves aside and handle assignments. Who we are on a personal level is not supposed to be super important. But of course it truly is.

Who we are influences our understanding of the world ... and work. So it is important at times to recognize the contributions of those the culture has not always championed but oppressed. February is Black History Month. Certainly you understand this is important, but as an employer you may not be sure how to handle it. Here is a suggestion -- and some wise words to keep in mind -- provided by Diversity Best Practices.

According to the World Health Organization, the Zika virus is now a global health emergency. The virus has turned up in the United States, and researchers are learning more each day about how the virus is spread and its potential effects on infected people and fetuses.

Here's what you need to know about the Zika virus and its potential impact on your small business and employees:

5 Budgeting Tips for Startups and Small Businesses

Half of all small businesses close their doors within five year of opening. There are many reasons for this and many. Overwhelmed by other issues, financial responsibilities quickly slip to the wayside, and you figure each month that you'll deal with all the figures around April, when taxes are due.

Do not let your finances undo you. Instead, stay on top of expenses with the following five startup and small business budgeting tips, recommended by Small Business Computing.

People always complain how hard it is to achieve a good work-life balance, and to keep business and personal matters separate. At no time is that more true than when your small business gets sued. All of a sudden you're wondering what you could lose if your business loses the lawsuit.

Depending on the corporate structure of your small business, you could be personally liable for business debts, including legal judgments. Which means they could come for your home, unless you take the proper precautions to protect your home in a business lawsuit.

Elon Musk Refuses Super Rude Customer a Car

A scandal is brewing on the social networks and it raises an interesting legal question. The carmaker Tesla, brainchild of Elon Musk, is refusing to sell venture capitalist Stewart Alsop a car, claiming he was super rude.

Can he do that? Before we address the question, let's look at what happened here, according to Auto Guide.

It can be great to have employees on the road. They can meet with clients face-to-face and carry your small business to a big audience. But employee travel can be a bit of a headache as well, with the logistics and the lost time in transit, to say nothing of the legal issues that can arise when workers on the road, on the clock, and on the company dime.

So what are the three thorniest legal issues with employee travel? And what can your small business do to make business trips a bit rosier?

Gig Economy Study by Gov May Change Labor Law

The American government cannot get a handle on how its people are working. Employment has changed and many people now have gigs instead of jobs. The old measurements for economic health are gone and there are no new ones to replace them, so it is actually quite difficult to tell just how well workers are doing or what protections are needed now.

Labor Secretary Thomas Perez announced last week the government's plan to address this issue as US workplaces experience what he called "profound changes," The Wall Street Journal reports. But it will take some time to gather and analyze this information on the gig economy, so the impact on labor laws is likely to be delayed.

Employers have to rate their employees' performance. That's just a fact of the working world and a pretty effective way of incentivizing employees and rewarding them for their efforts. But there are all kinds of rating systems out there, and, as creations of imperfect managers and executives, they can be subject to misuse.

That's what one former Yahoo manager is alleging in a lawsuit filed in Federal District Court in California this week. Gregory Anderson's lawsuit challenges Yahoo's employee rating system and alleges that it was manipulated under CEO Marissa Mayer to fire hundreds of employees without just cause.

Examining Religious Exemptions to LGBT Protections

Compromise is often the only solution. Extremes rarely lead to agreement. You can try to get your way and likely fail, or you can concede a bit in order to advance your interests. It is generally accepted that by compromising, we make incremental progress, and that's a good thing.

But when do we make so many exceptions to a rule that it becomes irrelevant? Is that what's happening to new and proposed LGBT legal protections around the country, as Think Progress reports? Are provisions for religious institutions undermining the very cause these laws are mean to protect, including LGBT people's rights to nondiscriminatory hiring?