Free Enterprise - The FindLaw Small Business Law Blog

September 2016 Archives

If your business conducts cash transactions, you've probably had to wait for countless customers to count out exact change to the very last penny. You may have even had plenty of customers pay an entire bill in loose change. While this can be annoying, most business owners would agree that getting paid in cash, coin, credit, or check, is still getting paid, and is still a good thing. There are, however, rare circumstances, like this attention-seeking grown man-child, where allowing a customer or debtor to pay in coinage just seems horribly inefficient.

Fortunately for private businesses, there is no federal law that mandates what type of currency a private business must accept. And according to one source, there are no states that have a blanket requirement that businesses must accept cash or coin. Just like a business can refuse to accept big bills, they can refuse coinage as well.

What to Include in a Startup Prenup

It's never a good idea to partner up with a colleague or family member based on a handshake and your word. Just ask the lawyers who get tasked with sorting out the mess after the partnership hits an iceberg and sinks. If you consult an attorney before entering a partnership or starting a business with one or more other people, the most important thing you'll be told is to put the agreement in writing.

The current trend for startups to get a prenup is nothing new. The only new part of this trend is calling the written agreement a prenup. It has always been advisable to make sure any partnership agreements are in writing. But what you need to include in your agreement can vary depending on who you'll be working with, what you'll be working on, and how you'll be making or spending money.

A few months ago, the Obama Administration announced efforts to crack down on predatory payday loan companies, attempting to impose some of the underwriting requirements and lending restrictions as regular loans. Payday lenders, the Consumer Financial Protection Bureau said, take advantage of consumers by giving them short-term loans with astronomical interest rates, then charge penalty fees and threaten bank account closures and vehicle seizures if customers can't pay.

And it seems like even the "good guy" payday lenders are behaving badly. San Francisco-based LendUp has agreed to pay $6.3 million in fines for charging customers illegal fees, miscalculating interest rates, and telling customers that borrowing from LendUp would boost their credit score.

In a two day sweep, investigators for the California Labor Commissioner issued $682,344 in fines to 18 different Los Angeles based garment manufacturers. Over $600,000 of the fines were issued against 6 different garment makers for failing to maintain workers' compensation insurance.

California Labor Commissioner Julie A. Su warned, in the agencies press release last week, that the California Labor Commissioner "will shine a light on the underground economy and those who contract with unregistered contractors will also be held accountable." While no big-name clothing companies were named, it is not uncommon for major brands to contract out the manufacturing of their product lines.

If you pay attention to legal issues small businesses face, you've probably seen a lot of headlines recently about startups getting sued. Is this just a function of more startup business in the market? Or are startups especially susceptible to litigation?

Here's a look at five startups that have been sued recently, and the lessons you can take from the lawsuits.

If your small to medium-sized business is handling confidential medical information for clients or patients, you should know that the U.S. Department of Health and Human Services' Office of Civil Rights will now start investigating data breaches involving less than 500 individuals. According to the announcement by HHS last month, regional OCR offices will now have the discretion to prioritize investigations of small to mid-sized health care organizations that handle, process, or possess information protected by HIPAA.

If your healthcare related business handles information or documents covered under HIPAA, apart from ensuring compliance with the law, there are a few things you can do to avoid being investigated due to a data breach.

Starting a company isn't just opening the doors, cutting a ribbon, and getting to work. There are a lot of legal i's to dot and t's to cross, and, like any legal process, that can create a slew of paperwork. So how do you figure out which documents are essential and which may only slow your startup down?

Here are five standard legal document your startup will need, and why.

If you're struggling to save money and survive, you are not alone. Many of the country's small businesses are essentially living month-to-month.

A new study from the JPMorgan Chase Institute showed that the average small business has just 27 days worth of cash reserves. So what is life like for small businesses living on the financial edge?

The Improving Small Business Cyber Security Act of 2016 is aimed at getting aid and resources to small businesses to improve their cybersecurity, and the bill is scheduled to come up for a vote in the House of Representatives today. While its passage is not guaranteed, the bill could have a huge impact on the tools and data available to your small business to keep it safe from hackers, data breaches, and other cybersecurity threats.

Here's a look at the Small Business Cyber Security Act and what it could mean for your company.

If you haven't noticed, marijuana laws in this country are changing rapidly. Four states have already legalized recreational pot possession, and a slew of others now allow medical marijuana for those with a prescription. And for those with an entrepreneurial mind, changes in the law mean business opportunities.

But just because your state has legalized it today, doesn't mean your weed retailer can open its doors tomorrow. Several states have set up significant barriers to entry into the medical marijuana market, and if you ain't got the dough, you may be out of luck.

It's 2016, so you would think female entrepreneurs would have the same access to small business financing as their male counterparts. But recent studies have shown that women are less likely to get business credit than men, and when they do, they often ask for and get less in loans than men.

So how can female entrepreneurs close the small business lending gap? Here's a look at some small business loan and grant options for women.

One accusation of sexual harassment is bad. Ten thousand? That's an epidemic. But that's how many women, so far, have joined a class action lawsuit against Sterling Jewelers, with allegations of harassment and discrimination stretching back as far as 2003.

And it might even get worse for Sterling. Court documents indicate the potential class for the lawsuit could be as many as 44,000 current and former female employees.

Last summer, the Obama administration announced plans to expand overtime pay benefits for workers to cover employees earning up to $47,000. This summer, the Labor Department announced the new overtime rule is official, and they would go into effect on December 1. But that still might not be enough time for some small businesses to be ready, argues the National Federation of Independent Business.

The NFIB contends that small businesses "can't just flip a switch and be in compliance," and is asking for a delay in implementing the rule until June 1 of 2017. But they don't sound likely to get it.

Hiring immigrants is not limited to one or two sectors or industries. From farms and factories to hedge funds and startups, businesses are being run by immigrant entrepreneurs and staffed by talented immigrants. Therefore, any new statute, order, or court decision relating to immigration will have ripple effects throughout the business community, right up to your small business's front door.

Here are three recent developments that could have a substantial impact on your small business.

You've got your big idea, now you just need the space to execute it. And even in today's market of online retail, sales, and social media, the right brick and mortar office or storefront can make all the difference.

So how do you know which is the right spot for you? And more importantly, how do you make sure you're getting the best lease for the space? Here's a handy guide for negotiating a commercial lease:

Last week, news broke out of Bethlehem, Pennsylvania, that factory workers at the Just Born candy company's Peeps factory have gone on strike. The men and women who make the delightfully fluffy, sweet, and soft confections walked out after the company proposed eliminating pensions, reducing wage increases, and increasing employee contributions to health plans.

Union officials for the Peeps' workers are pushing for the union's peeps to be treated fairly, receive reasonable wage increases, and the pension they've been promised. The cuts proposed by management come as the company has been making record sales.

There are a couple reasons you want to hire the best possible employees. First, you want the best ideas and the best production. Second, if they're working for you, they're not working for the competition. But what if your competition already got their hands on them? Is poaching a competitor's employees illegal?

For the most part, you're allowed to hire anyone who wants to work for you. But in certain cases, hiring someone who's already working for a competitor can get you in trouble.

The American people have the right to be free from unreasonable searches. It's a constitutional right that stems from the Fourth Amendment that is meant to protect the people from the government. Microsoft has been fighting since April to stop the government from searching users' cloud storage without providing notice to the searched user. In the most recent filing, Microsoft has found unusual allies in not only Google and Apple, but also Amazon, BP, Fox News, Delta, the EFF, and even the US Chamber of Commerce.

Basically, the issue focuses on the government's ability to obtain not just a search warrant to search through a user's files stored on the cloud, but also a gag order which prevents the company providing the cloud storage from notifying the user that the search will occur or has occurred.

When we advise small business owners to consult with a local attorney about their companies, it's for good reason. Many states, cities, and municipalities have some obscure and head-scratching statutes that only someone familiar with the area will know about. And while you might be inclined to write these legal oddities off as unenforced historical outliers, the last thing you want is your small biz grinding to a halt because of an arcane ordinance you overlooked or ignored.

Here are five (or so) of the weirdest state laws that can have a serious impact on your small business:

We hear all the time about unemployment benefits for laid off workers. (Or at least you should -- if you're a business owner, chances are you and your employees are paying into the unemployment system.) But what about unemployment benefits for failed entrepreneurs? If you owned an unlucky small business, are you out of luck when it comes to unemployment?

While each state may run their unemployment benefit programs a little differently, there is one general rule to unemployment for small business owners: pay in, get paid.

In today's modern era of the internet and energy drinks, small businesses come in all shapes, forms, and types of tangibility. Businesses today can exist solely in the digital sphere, selling digital products that people only use in digital worlds. Businesses that don't have a presence in the digital world want in. But before businesses hire that pricey developer to start developing, an Invention Assignment Agreement should be signed.

Developing code is not just a science, it's an art. Like photographers, developers and coders are the copyright holders and owners of their code. So before your business hires on that coder to build the next revolutionary Thneed, make sure you know who owns what from the outset.

We hear a lot about the Ubers, the Airbnbs, and the Snapchats, privately-held tech startups valued at over $1 billion known in the industry as "unicorns." But not every startup ends well. And one story that surfaced recently tells the tale of a startup going down in flames.

A marketing professional relocated from Dallas, Texas to Silicon Valley to chase a startup dream. But from her account of a month on the job, she lived closer to a startup nightmare.

2016 has been a year to forget for Chipotle. From criminal charges stemming from multiple E. coli outbreaks to illegal Twitter policies, the popular burrito chain has been making the news for all the wrong reasons. And when it rains, it pours.

Almost 10,000 current and former Chipotle employees are now suing the company, claiming they were forced to work unpaid hours off the clock. So here's our latest in the ongoing series: Don't Do What Chipotle Did.

As of August 29, 2016, the Federal Aviation Administration's new regulations on privately operated drones as well as model aircrafts went into effect. The new regulations are actually good news for model airplane aviation hobbyists and businesses that want to utilize drones. Unfortunately, drone hobbyists will not be happy about the new regulations.

Basically, prior to these new regulations, businesses were unable to utilize drones for commercial purposes because the framework to regulate their operation did not exist. With the implementation of FAR 107, this has changed.