Free Enterprise - The FindLaw Small Business Law Blog

January 2017 Archives

When it comes to onboarding new employees and keeping old employees current regarding new policies or changes in the industry, training is an essential part of any business. A properly trained workforce can accomplish more and represent your business much better than an untrained workforce. However, training is costly, and if training is a required, then it must be paid.

Under the Fair Labor Standards Act, covered employers must pay for training if the training is required, related to the employment, conducted during normal working hours, or requires actual work be performed during the training. In some situations, even under the FLSA, an employer may be able to avoid paying employees for training.

Throughout the presidential campaign, many wondered how good a Donald Trump presidency would be for business. While some feared his unpredictability would send markets reeling, others, banking on his remarks and history as a business owner would mean good news for other business owners.

And just over a week into his presidency, Trump issued an executive order promising to reduce regulation and regulatory costs. Essentially, if a federal agency is going to enact any new regulation, including those placed upon small businesses, they would need to revoke two existing regulations. This could lead to an un- or at least less-fettered business environment, so what does that look like for your small biz?

Businesses can generally reserve the right to refuse service. But this can get complicated depending on who you're refusing service to. So, what about refusing service to Nazis?

While there is no federal prohibition against refusing service to a customer based upon political or social beliefs, businesses need to be wary of these beliefs being tied to religion or ethnicity. The federally protected classes include: race, sex, age, religion, national origin, ethnicity, disability, genetic information, and veteran status.

Many states also extend protection to LGBT individuals and other classes not granted federal protection. For instance, under California law, protected status is extended to a person's marital status, sexual orientation, medical condition, political affiliation, or status as a crime victim, and more.

The vast majority of small biz owners don't own the building out of which they do business, so that means searching for the perfect spot and negotiating a favorable commercial lease. And as hard as you've worked and as much as you might love your space, the landlord-tenant relationship is not always a happy marriage.

There are ways to get out of a commercial lease, but if those don't work, does that mean you have to go to court?

This week, on the heels of the massive Women's March, the House of Representatives passed a controversial anti-abortion bill, HR-7. The bill, titled the No Taxpayer Funding for Abortion Act, not only bans federal funding from being used for abortions, but it also imposes restrictions for abortion coverage for individuals and businesses. If the act passes the Senate, small businesses will definitely be affected.

Generally, prior to this act, under the Hyde Amendment, federal funds were prohibited from being used for abortions, unless the pregnancy was the result of rape or incest, or if the mother's life was endangered by the pregnancy. What makes this new bill so controversial is that it's threatening to take away the health insurance tax credit that thousands of small businesses (and even more individuals) qualified for under the current law.

Internships sound like a win-win for all involved: employers get access to new ideas and perspectives, all unpaid; and students and people entering the field gain valuable insight and experience. But those benefits don't come without risks.

There are rules when hiring interns, especially unpaid interns, and limits on what they can and cannot do. So to make sure your small business and your interns are getting the most out of the internship experienced, here are three things to think about:

This year, the Affordable Care Act, which has been the center of so much debate, is likely to be repealed and replaced, or changed piecemeal, as a result of the change in political control of the country. How exactly the landmark legislation is going to change, however, is up in the air.

While certain provisions of the ACA are being targeted for repeal, such as the mandate that individuals and small business purchase health insurance, the legislature does not want to actually repeal the ACA, or pieces of it, until a new plan has been crafted to replace the act. Below is a list of 3 essential need-to-know points to help small businesses be better prepared for the changes ahead.

If you're in business today, you're in the social media business as well. But not all of us were born online, with Facebook accounts, Twitter handles, and Snapchat feeds as a central part of our identity.

So if your small biz is still playing catch-up online, here are a few essential social media questions to ask yourself, and where to go for answers.

Do Robots Have Patent Rights?

"A creative singularity in which computers overtake human inventors as the primary source of new discoveries is foreseeable," writes Ryan Abbott, a professor of law and health sciences at the University of Surrey's School of Law. "Creative computers may require a rethinking of the baseline standard for inventiveness, and potentially the entire patent system."

Our patent system wasn't built for robot inventors, but Abbott is arguing for it to be remade with artificial intelligence in mind. But have AI's IP rights already been carved out of existence by the U.S. Copyright Office?

Starting July 17, 2017, a new immigration program to the United States will be available for international entrepreneurs that meet certain qualifications. The program is geared toward allowing startup founders to temporarily reside and work in the US in order to manage rapidly growing startup businesses. It is aptly called the International Entrepreneur Rule.

One of the major purposes behind the new International Entrepreneur Rule is to provide temporary immigration relief for international entrepreneurs whose immigration into the country would provide for a public benefit to the US, such as through US job creation. Basically, this provides an avenue for entrepreneurs with innovative ideas to start their businesses in the US.

Time and time again, hiring managers and HR professionals cite "culture fit" as the single most important determining factor when making a new hire. It makes sense -- we like to work with people like us. But, as Forbes points out, making hiring decisions based on comfort can be bad for the bottom line. And it can also be illegal.

And if you're using "culture" to mask hiring decisions based on race, gender, or national origin, your small business could be in serious trouble.

It's a global economy out there, and to keep up, more and more small businesses are turning to the foreign market to find service vendors and product suppliers or manufacturers. Particularly with how easy placing orders across the ocean has become thanks to the internet, even individual consumers are frequently making direct purchases from overseas companies.

However, small businesses that work with foreign vendors and manufacturers need to be careful about their legal remedies if business, or a transaction, goes bad. While it is always recommended to include dispute resolution terms in any business contract, it is especially important for transactions with foreign businesses. Below are three legal tips to avoid disputes altogether with foreign vendors and suppliers.

Most of us are entrepreneurs so we can be our own boss. But if you're successful enough, your company may have hit the stage where you need some help. Now that it's time to bring someone else aboard, do you know the legal ins and outs of onboarding employees?

Here are a few things to think about before hiring your first employee:

JP Morgan Chase has agreed to settle mortgage discrimination claims, brought by the Department of Justice for $55 million. The federal lawsuit alleged that Chase worked with mortgage brokers that discriminated against minority borrowers by charging them, on average, $1,000 more than white borrowers. While Chase admits no wrongdoing as part of the settlement, the lawsuit alleged that approximately 53,000 black and Hispanic borrowers were charged more than white borrowers by the allegedly independent brokers that Chase was working with between 2006 and 2009.

Currently, the settlement is still awaiting judicial approval. The settlement amount may seem like a significant sum of money to most, however, when the $55 million is put up against the bank's $250 billion in equity, and $2.4 trillion in assets, the settlement seems a bit paltry.

As a small business owner, you should already be aware that you have a responsibility to protect your customers and employees from harassment in the workplace. But that's a pretty broad obligation. What, specifically, do you need to do to prevent harassment? What are your legal responsibilities when responding to complaints of harassment? And do they vary depending on the type of harassment?

Here are the most common workplace harassment questions small business owners face, and where to look for answers:

The World Wide Web is the wild wild west for intellectual property. Those esoteric concepts of copyrights and trademarks and patents often fall by the wayside for businesses looking to promote their business, or maybe even get their start, both online, and in the real world. Photos, videos, and other content are easily steal-able online, and just because it's easy, that doesn't make it legal. As such, businesses do need to be careful when selecting which photos and what type of media they want to use for promotional purposes.

If you're building your own website, or your web designer is asking you for photos, you can't just go and download any photo you see online. Even if you want to use a photo posted to Facebook, Twitter, or Yelp, on your website, you could face legal liability if you do not get permission from the photographer or from the website the photo is posted to. Luckily, social media makes it rather easy to contact users via in-site messaging.

You placed all the ads, reviewed all the resumes, interviewed all the candidates, and hired the perfect staff for your small business. Now that you've got the best and brightest employees in the office, how do you keep them there?

As CNBC reports, one of the biggest factors to employee retention is whether your employees see an internal career path that allows for opportunities to advance within the company. And those businesses that lack internal mobility programs are more likely to see their best employees searching for those opportunities at other firms.

Depending on the type of business you run, hiring freelancers or independent contractors may be necessary from time to time, or maybe even regularly. An all too often overlooked aspect of hiring freelancers or independent contractors is the written hiring contract itself.

A small business owner should, like larger businesses, take control of their contracts whenever possible. This means that contracts should be drafted by the business and not the freelancers or contractors. Doing so enables the business to adequately protect its legal interests, of which there could be many.

Below, you'll find several common terms that should be considered for your freelancer or contractor agreements.

It's been quite the year for Volkswagen. The car maker was rocked by scandal after it was caught cheating on emissions tests, polluting the environment, and trying to cover the whole thing up. But when some were wondering if the company's rep could ever recover, VW went out and set annual sales records, including a recent jump in December.

And now that it's wrapping up the emissions scandal, paying $4.3 billion to settle civil and criminal charges with U.S. regulators, the worst might be behind the embattled Volkswagen brand.

The American automaker Chrysler Fiat, which claims to be America's Import, has unintentionally followed the lead of an actual popular import, Volkswagen. Unfortunately for the US automaker, the lead they are following isn't related to German driving culture. Instead, it's getting busted by the Environmental Protection Agency for deceptive diesel engine emissions.

Only the Jeep Grand Cherokee and Ram 1500 models with the 3.0 liter diesel engine have been listed as possibly being involved. Additionally, this only effects the model years 2014, 2015, and 2016.

When Starbucks announced it would start serving craft beer and wine along with their caffeine, it made a certain amount of sense -- after all, you might need a shot or two of booze to counteract all those shots of espresso. (The coffee giant has since ended the practice, but our point still stands.)

Plenty of businesses have been branching out into booze sales lately, but these five might be the oddest stores in which to get sloshed.

The beginning of a new year is a perfect time for business owners, especially new business owners in partnerships, to take a step back and make sure everything is in order. A lot can change over the course of a year, and the beginning of the year is a good time to look at where you, as a business owner, are personally vulnerable to losing your ownership interest. Conversely, if a business partner has not been living up to their end of the partnership, it may be time to squeeze them out.

One of the most important documents business owners often overlook is their buy-sell agreement. A buy-sell agreement is typically the document that controls when a business partner can be bought out, or can sell their interest. They can also be viewed as business wills, or a succession plan of sorts. Frequently, for partnerships and joint ownerships, there are triggering mechanisms in these agreements that enable owners to sell their interests or be bought out only by other owners.

While not all employers will be impacted by the incoming president's plans to reform immigration, any employer that hires non-permanent resident immigrants may have to change the way they do business. A principal concern for employers that hire immigrant workers is whether and how the process will change, particularly for H-1B visas.

Unless you've been intentionally avoiding the news, you've likely heard about plans to "reform" business immigration, punish sanctuary cities, and deport undocumented immigrants. While many political analysts speculated that Trump's campaign promises were empty threats, businesses might be well advised to have a contingency plan in place and to get ready for change. Speculators believe that Trump may push for the imposition of stricter requirements for showing the need for H-1B workers.

Despite most retailers still enjoying the revenues from the holiday shopping season, a former leader of department stores, Sears, is having a grim start to the year. In fact, analysts are predicting that Sears will be forced to declare bankruptcy within the next two years if something doesn't drastically change. CEO and billionaire Eddie Lampert is basically extending a line of credit to keep the retailer afloat.

While declaring bankruptcy for Sears may not be the end for the retailer, it is certainly looking like the likeliest path to continue existing at all. The retailer has been selling off assets, iconic properties, and even their exclusive brands. It's no secret that traditional brick and mortar retailers have been struggling since online shopping became normalized. However, many people have been fearing the fall of the Sears empire and what that means.

Guns are dangerous. Customers are unpredictable. Logically, it follows that customers with guns are unpredictable and dangerous. Because of this common sense logic, many business owners simply don't want customers or employees or anyone bringing guns into their businesses.

In every state, business owners can legally prohibit both customers and employees from bringing guns into their businesses (although some states make an exception that allows employees to bring guns to work so long as the gun remains locked in their vehicle in the parking lot).

First and foremost, for business owners that want to prohibit guns in the workplace or in their business, using common sense when enforcing the policy is a must. People with guns can kill, and exercising discretion when it comes to telling an armed individual to leave your store is the most important thing you can do.

Despite the fact that more and more states are passing laws to legalize marijuana for both medical and recreational use, there are numerous legal obstacles that marijuana businesses face. At the outset, all marijuana businesses operate with the fear of federal prosecution. While individual states may have legal marijuana, the federal government still regards it as a Schedule I narcotic drug, and considers the sale, use, and possession to be illegal.

In addition to the concern over federal prosecution, local and state laws tend to require marijuana business operators to cut through quite a bit of bureaucratic red tape before opening up shop. While the red tape may seem like a hurdle that can be easily overcome, local permitting often requires the payment of hefty, cost-prohibitive application fees, as well as lengthy processing times, that make setting up a marijuana business even more cost prohibitive.

Hawking your wares on the internet gives you the potential for millions of new customers. Sadly, shipping and inventory mistakes can happen and not all of those customers will be satisfied with their purchase. So how do you do returns when the customer can't walk through your front door with the product and a receipt?

As it turns out, crafting a great (and legal) return policy for ecommerce isn't all that different than putting one together for brick-and-mortar sales. Here are a few things to consider:

Individuals with disabilities are able to perform the same jobs as most other workers. However, due to stigma and ignorance, disabled individuals generally do not get the same career opportunities as non-disabled individuals. Despite the existence of strong anti-discrimination laws, in 2015, the Department of Labor explained that only 17.5 percent of persons with a disability were employed.

New programs at large employers like EY and Microsoft, target specific candidates with disabilities that the employers believe may benefit them. For instance, what employer wouldn't jump at the chance of employing an autistic individual like Raymond Babbitt (the Rain Man) in a number crunching position?

For employers that are hiring, it is important to know how to interview disabled individuals, and how to avoid discrimination.

Can a Business Prohibit Guns?

Despite the Second Amendment right to bear arms, businesses across the country are free to adopt their own policies regulating and even prohibiting guns. Businesses are free to ban guns from their property. However, in some states, there may be some hurdles to jump (or signs to post) before doing so.

For the most part, guns are regulated by state laws. Many states already have laws about when, how, and where guns may be carried, such as prohibiting guns from being carried into establishments that serve alcohol. However, some states like Texas and Georgia require businesses to post conspicuous signage explaining when guns are not permitted on the premises.

If you're anything like us, you might have been too focused on the day-to-day operations of your small business to even notice the calendar flipping over from 2016 to 2017. And if the New Year caught you off guard, don't worry -- it's not too late to make a few business resolutions and goals for the next 12 months.

Need some guidance on making 2017 even better than 2016? Here are our biggest and best legal tips for small business from the past year:

Pot entrepreneurs nationwide have been cheering recent victories, with more and more states legalizing recreational and medical marijuana. But relaxed weed regulations don't always mean an open market on advertising. State and federal law may limit the kind of ads marijuana businesses can run, and whom they may target.

One dicey area is highway pot ads and billboards, and California lawmakers are trying to constrict cannabiz coverage along their inter- and intrastate highways. Here's a look: