Monthly Archives

July 2013

Negotiating Non-Compete Agreements When Selling Your Business

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Negotiating Non-Compete AgreementsNon-compete agreements are ordinary in places of work, mainly in specialist companies. Nevertheless, the enforceability of these agreements varies. There are some states, such as California, which prohibit them completely.

These agreements usually protect new owners of a business against establishing new similar businesses for a specific period of time, typically in one geographical region. Therefore, what should a serial entrepreneur do? If you have great enthusiasm for your business, and you plan to remain in the same company, then what are your options if your buyer persists on a non-compete agreement?

As for the sale of any business, it is mainly based on negotiation and you have to be clear enough on your needs while respecting the demands of your buyers. The following are some of the tips for business owners who would like to move to their own industries without being sued or constrained due to tough non-compete agreement:

Negotiating Non-Compete Agreements

Begin by consulting an attorney
As explained above, each state has its own laws and regulations when it comes to the non-competes. Even in states where they are allowed, the enforceability of the agreement terms by courts can vary. Therefore, consult an attorney to help you understand how the courts of your state have ruled on these agreements in the past.

Be precise on what you want
Just as with any other negotiation, you should try and find out what the other party needs so that you may discover what you will be dealing with. Do not disobey their position even though you can use the negotiation process to state the exceptions that you have in regard to the terms of their proposals. In any venture, you should be familiar with both what you need and also with what you should not do. Additionally, consider maximizing the time period as well as the geography so that you may have wider options.

Opt for a non-solicitation agreement
Depending on the laws of your state, and how the non-competes fare, it might be significant to either of the parties to sign a non-solicitation agreement. This will bar you from approaching current clients and hiring former employees of your businesses as soon as you sell the business. On the other hand, you may wish to reduce the non-solicitation to certain products.

Explore an earn-out
You should consider an earn out instead of signing non-competes. This is a a condition that states the sellers will get extra future compensations from buyers depending on the rule that the business obtains certain financial aims and objectives. An earn-out will provide an insurance policy to the buyer so that the seller will not compete directly against the buyer or participate in under-deal businesses they have left behind them.

At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.

5 Ways You Might Be Breaking Employment Laws

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Employment Laws

Having a business of your own with employees is an achievement most entrepreneurs dream of. However, it’s not without a catch, as employers have to adhere to set laws in order to avoid breaking the regulations that govern the employment act. Have a look on these 5 ways you might be breaking employment laws.

5 Ways You Might Be Breaking Employment Laws

1. Categorizing All Employees as Exempt Regardless of Who They Are
An exempt worker is any person who is paid a fixed amount of money no matter how many hours per week he/she is in work. The law states that if you are exempt, you should be exempted from meals, rest breaks, and overtime requirements. Other than this, overtime is mandatory to any other employee who is not an exempt. This is the same in both State and Federal laws. Those who are not eligible to any of these, are referred to as nonexempt and are offered overtime and meal breaks. Most employers find themselves in trouble when they don’t recognize these exemptions. For example, one can face the law if he/she fails to offer a lunch break to non exempts.

2. Giving Employees Freedom of Choosing Hours to Work
It is illegal to allow all employees to work past a given specified hours without giving them an overtime payment. In case you have a time policy in your business, which allows some of them to operate in overtime, you should follow the rules therein stated in your State.

3. Firing an Employee after a Leave
When an employee goes for a leave, such as maternity or medical, and you send her/him home as a disciplinary action, you can be sued.

4. Pretending to Be Kind by Offering Cash as Loans to Your Employees Then Deducting it From Salary
This may sound attractive to employees but in real sense, it may be a curse too in equal measure. The company management is allowed to offer loans to its employees, but not to directly get the cash back from the borrowers paycheck. In most States, it is actually illegal to take any other deductible from an employee unless it’s a benefit or just pay. It is recommended that the borrower does the transaction with the help of his/her lawyer to oversee the agreement and terms of the loan.

5. Withholding Final Paycheck of an Employee Who Owns the Company Asset
In some States, the Federal law restricts an employer from issuing the final paycheck to an employee who owns a piece of property of the firm. On the other hand, there are States that order the company to immediately pay the amount to the person, despite the fact that he/she owns an asset of the firm.

It is advisable for the business and its staff to understand employment laws that govern their state for a better tomorrow. At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.

Are Employees Using Cell Phones While Driving Company Vehicles?

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Cell Phones While DrivingIf your employees are using cell phones while operating company vehicles they are putting themselves, others, and your company at risk. If an employee is driving a commercial motor vehicle, or CMV, as of early 2012 it is illegal to: make a call while holding a cell phone and dial a cell phone when using more than one button. The fines for infractions on this new law are huge! The employee liability can be up to a $2,750 but more importantly an employer can be fined up to $11,000.

Cell Phones While Driving Company Vehicles

The new law also bans employers from requiring their commercial motor vehicle drivers to use a handheld cell phone. The employee liability, when a driver of a commercial motor vehicle is involved in an accident, is not as harsh as yours is as the employer. If your employee is involved in an injury accident while acting within their jobs description, or job duties, you will be held responsible for those injuries. You may also be held responsible if you allow an employee who is not licensed or capable of driving a vehicle to operate your commercial motor vehicles. These rulings came about when the DOT conducted several studies that showed that the risk of injury and accident is far greater when employees are driving and using a hand held cell phone as opposed to a hands free device. They also conducted studies that focused on texting and the risks also greatly increased when a driver was texting while operating company vehicles.

Company Policy On Using Cell Phones While Driving

It should, regardless of any laws, be against company policy to text or talk on a cell phone while driving or operating company vehicles. You should also take all necessary precautions to ensure that your employees are licensed and trained to operate a commercial motor vehicle. Should communication be a vital part of an employees job while they are driving, it is your responsibility to make sure that employees are equipped with hands free devices. Hands free devices are still legal and the proper alternative to standard cell phones.

Not only will you be taking the right actions to keep your company and your employees safe but you will be ensuring the safety of other drivers and pedestrians. If you have an employee who has or obtains a bad history of driving you should revoke their driving privileges. Always remember that when your employee is operating a commercial motor vehicle the employee liability is not as harsh as the employers.

Like all other rules, laws and regulations pertaining to your business, if you have commercial motor vehicles you should always stay up to date and be aware of any law changes. When law changes come into effect be sure to update employee policies and handbooks to reflect these new changes. This protects you as the employer as well as the employees liability.

Safety and following the law should always be important to an employer. At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.

How to Legally Use Testimonials & Online Reviews for Business

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Many small businesses use testimonials and online reviews from customers in their advertising and marketing. The power of customer quotes and referrals sometimes differentiate failure and success. However, while using these important tools, make sure you are using them legally without contravening any law.

Across the United States, FTC (Federal Trade Commission) looks into laws regarding consumer protection in certain areas. If you want to use endorsements and testimonials to help you in promoting your services and products, you should know a couple of things to make sure you are doing it legally.

Legally Using Testimonials, Endorsements & Online Reviews

All online reviews, endorsements and testimonials must be truthful and not deceiving. This means they must reflect the actual opinion and experience of the endorser. Testimonials and reviews online making claims about your service or products which cannot be backed up with obvious proof cannot be used. For instance, there are ads promising weight reduction miracles with backing quotes apparently from users testifying to the success of the product. Nonetheless, lack of scientific confirmation proving the truth misleads customers. In this case, the Federal Trade Commission could hold the endorser and owner of the product responsible for engaging in deceptive promotional practices.

Be Honest.

The online reviews and endorsements should mirror the experience of all users. Apart from being clear and truthful, the endorsements should be a typical and clear reflection of all users of the service or product. It should not just be an experience of a couple of satisfied users. If this requirement is not met, the advert should clearly indicate the limited applicability of the user’s experience or what the user of the product should expect. Disclaimers to the effect that results vary from one user to the next or not all users will enjoy the same results are not enough.

Get Permission.

A good way of doing this as a small business owner is getting permission from endorsers of the product or service before posting their testimonials, more so if you would like to have their names posted. Also, the endorsers or reviewers should be asked if they can be contacted later for a reference in case a potential user would like more information related to their experience with the product or service.

Disclose Affiliations.

Affiliations and connections should be disclosed to endorsers. In the case of a material connection to a product endorser, this must be disclosed. For instance, even if you simply pay affiliate markets or bloggers with free samples for them to review, the relationship must be disclosed. It is legally alright to use the endorsements in any advertising or marketing of a product but a disclaimer to the effect that the company owning the product availed the product should be provided.

Lifting Quotes.

There has also been a question whether lifting quotes from sites doing online reviews such as Service Magic, Google Plus, and Yelp can be done. The TOS (Terms of Service) of the reviews or user-generated content might indicate they are owned by the individual who might have written them. Using the reviews without their prior permission might be infringing copyright laws. Always err on the side of caution and thoroughly investigate TOS before posting those reviews somewhere other than its original location.

At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.

Guidelines to Complying With the CAN-SPAM Act

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CAN-SPAM ActWith the increased rate of unemployment in most parts of the world, many people have turned to business as a way of earning income in their lives. Just like in any other sector, there are many business people who engage in ethical or legal activities, while others engage in unethical activities.

This calls for a need to set laws that guide how both small and large business are operated. One such law is the CAN-SPAM Act, which is an Act that provides the rules that businesses should follow when it comes to emailing. The law offers the recipients of the commercial emails the right to stop you from sending them emails and gives tough penalties if you violate it.

Complying With the CAN-SPAM Act

It is worth noting that despite the name CAN-SPAM, it does not only apply to bulk email, but covers all other commercial messages that are sent electronically with the sole purpose of promotion and advertising of commercial services and products. This includes emails that are sent to market content of commercial sites. There is no exception of business to business email according to this law. This means that all emails you send, for instance, informing former customers of a new product, adhere to this law. Below are some of the requirements you need to follow in order to be compliant.

Never use header information that is misleading. This means the information found in the From, To, Reply-To and routing information must always be accurate and identify the business or person whom initiated the message.

When sending email do not use misleading titles. The subject line should describe the content of your message accurately.

You must identify your message as an advert. You are given an option how this should be done. However, you must disclose that your intended purpose is to make an advertisement in your message.

Disclose your location to the recipients. The message must contain a correct physical postal address. The address can be a post office box or street address that your small business is registered with.

Show the recipients how to stop receiving your emails in the future. Your message should have a section where it shows your recipients how to stop receiving your email if they no longer need them. Create the opt-out notice in a simple way that anybody can recognize and understand. Always ensure that your spam filter does not create problems when recipients want to opt out. Whenever a recipient opts out of receiving your messages, honor that request promptly. You are required to honor the opt-out requests within ten business days. You are not required to request any other information except an email address from the recipient as a requirement for honoring the opt-out request.

It is always advisable to follow the CAN-SPAM Act because any violation can be very costly to your small business. At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.