Free Enterprise - The FindLaw Small Business Law Blog

September 2017 Archives

California's recreational pot law goes into effect in January, and the state's largest metropolitan area wants to be ready. On Monday, the Los Angeles city council approved new cannabis industry rules and regulations for growers, manufacturers and sellers of marijuana, including licensing requirements, operating hours, record-keeping, and security measures.

And as with any new industry or new regulation, there are going to be some growing pains. Here's what L.A.'s legalized pot industry may look like.

If small businesses don't have their intellectual property in order and legally protected, they could be in big trouble. That's why we normally take patents, trademarks, and copyrights so seriously around here.

But every now and then we run across an IP story so weird we have to share it. So here are seven of the strangest stories involving patent and trademark law:

It's one of those terms you hear in business circles, but have a hard time defining: silent partner. It sounds pretty cool, but what does it actually mean?

And if you know it means someone who backs a business financially while backing away from the day-to-day operations, you may know just enough to get yourself into trouble. Here's what you really need to know about bringing on silent partners to your small business.

By his own admission, Gurbaksh Chahal built his first business on a lie. He inflated his age to a London programmer and promised to pay him money Chahal did not have. Chahal sold that company for $40 million. A less successful second venture, a Bollywood restaurant that literally died in flames, taught another unsavory lesson: "Forget noble motivations," Chahal wrote in his memoir. "Pursue your own interests and focus on making yourself happy."

So perhaps it's not too surprising that a CEO with that kind of start would end up being accused in a lawsuit of routinely using racial slurs when speaking to subordinates and physically assaulting two female employees. Also not surprising? This is far from the first lawsuit ascribing this kind of behavior to Chahal.

The Equifax data breach, wherein the credit information for 143 million people was exposed, is potentially catastrophic. Hackers were able to gain access to full names, Social Security numbers, birth dates, addresses, and even driver license numbers -- everything they would need to steal a person's identity, take out loans or credit lines in their name, and ruin their credit history.

And that credit history is especially important to small business owners, many of whom have financed their business using their personal credit. So naturally, small business owners are pretty mad about Equifax putting their business credit at risk by not securing their personal credit information. Mad enough to file a class action lawsuit on behalf of some 28 million small businesses.

You want your employees to perform their best, and you want to provide a safe working environment. For many small business employers, that means keeping your workplace drug-free. While attitudes (and state laws) are changing regarding certain drug use, and some large companies have taken a liberal approach to employee drug habits and histories, the drug-free office, factory, or restaurant has become the norm.

While federal and state laws allow for drug testing at work (and some require it), there are legal and illegal ways to go about implementing employee drug testing policies. Here are some tips for small business employers:

Anti-union 'right-to-work' laws have been controversial since their inception in the 1940s. And although 28 states currently have right-to-work laws on the books, those laws have faced their fair share of legal challenges.

Most recently, Wisconsin passed a right-to-work law in 2015, and the statute just survived its latest legal challenge at the state's 3rd District Court of Appeals.

Part of the appeal of a family business is the family part, as opposed to the business part. Having a warmer, more informal relationship between the owners and employees stands in stark contrast to the calculating, profit-driven world of LLCs. Plus, why share profits with stockholders when you can keep all that money in-house, as it were?

Then again, we all know how families are. There is the ideal of the "Mom and Pop Shop," and then there is the cold reality of succession plans and sibling rivalries, where the fantasy of a happy family business often gives way to the realities of family and financial strife. So how do you make sure your family business weathers those storms? With a good operating agreement.

It seems like just yesterday Google was parting ways with an engineer who felt the need to explain to colleagues, in excruciatingly sophomoric detail, why the "distribution of preferences and abilities of men and women differ in part due to biological causes and ... these differences may explain why we don't see equal representation of women in tech and leadership."

But that was over a month ago, just four months after the U.S. Department of Labor accused the company of an "extreme" gender pay gap. All of which is a precursor to yet another lawsuit filed yesterday in San Francisco, claiming Google "discriminated and continues to discriminate against its female employees by paying female employees less than male employees with similar skills, experience, and duties."

Finding commercial real estate for your small business can be difficult. And finding favorable lease terms as a small business or startup may seem impossible. Between rights to relocate and personal guarantees, negotiating a commercial lease feels more like pulling teeth than pushing your product, and that's if you understand all the terminology and types of leases.

One you may not have heard of is called a triple net or "NNN" lease. These commercial leases can put a heavy financial burden on small business tenants, but can also ending up costing landlords in the long run. Here's what you need to know:

It was probably just a pipe dream, the thought that now that weed was legalized in the Golden State, drones could start dropping doobies from the sky. And not just the hazy hops of lazy stoners -- cannabusinesses too would've loved to offer the service to customers.

Alas, California's buzzkill Bureau of Cannabis Control has already shot down drone pot delivery, before it even got off the ground.

Virtual reality startup Upload, accused of 'rampant' sexual behavior in the workplace, has settled a lawsuit filed by former director of digital and social media Elizabeth Scott. Scott accused Upload, originally called UploadVR, of "a pattern of gender discrimination, sexual discrimination, harassment, hostile work environment, retaliation, and wrongful termination."

Although the terms of the settlement have not been released, a statement from the company asserted "[t]he matter has been concluded."

On September 1, 2017, in what could not be worse timing for the residents of Texas still reeling from the aftermath of hurricane Harvey, a new law is going into effect that benefits insurers in the state rather than the insured.

Unfortunately, in addition to Texas residents, the new pro-insurer law also impacts Texas businesses that file insurance claims after a natural disaster. While proponents for the change believe it will lead to a reduction in the number of "frivolous" lawsuits filed against insurance companies, opponents believe it will provide more incentive for insurers to bully their insured into accepting low valuations and claim denials.

Sure, you may have been daydreaming about Batman when you signed your first apartment lease, and that's okay. But, when it comes to signing your first ever commercial lease for your business, there's quite a bit more to consider.

Courts are much less flexible when it comes to commercial leases compared to residential ones, particularly for the lessees. Generally, this is due to the fact that there are fewer statutory protections for lessees in business/commercial leases, and the legal issues don't involve an individual's, or family's, home. As such, business owners need to carefully review (and have their attorney review) leases prior to signing.

Below, you'll find an easy to follow checklist to review before signing a  commercial lease.