Indiana attorneys tackled common business law questions.
by Jacqueline von Ogden
Signing contracts. Taking your business online. Sorting through employees' legally mandated time off. Filing I-9 forms properly. Understanding copyright law.
There are plenty of legal pitfalls for businesses out there. It's better to be in the know before a legal problem arises, rather than calling in an attorney after the fact. We've asked Indiana attorneys for suggestions related to common issues facing businesses today.
Carly A. Brandenburg
Eichhorn & Eichhorn LLP
What should you do before you have someone sign an independent contract? Can hiring an attorney before you have a problem actually save you money, time and headache?
We see clients every day who have entered into contracts with what appears to be boilerplate language that hasn't been reviewed by counsel. There are many pitfalls and dangers that businesses need to keep in mind. Too often clients fail to seek counsel until a problem has occurred, which generally means the only recourse left is expensive litigation. This problem is preventable.
Think about the contract where you agree to indemnify someone working with you if your actions cause a problem or damage for that other entity–maybe an independent contractor. Are you indemnifying that company for their own negligence too? That's something you want to enter into with your eyes open to the possible consequences.
Also, what if your contract requires you to have certain insurance or to add the independent contractor as an additional insured on your policy? You may be in breach from the start if you're not in compliance with some of these details. With more and more businesses thinking hard about the decision of whether to hire employees or independent contractors, you should know what your contract for employment includes if you take that route. Many employers don't fully understand their obligations and the abilities they may have to protect themselves.
For instance, are you including non-competes, and if so, are they even legally enforceable? Some “standard” non-competes will not hold up in court and aren't worth the paper they're written on. Also, do you know whether your contracts include fee shifting agreements or arbitration clauses? These are things that can harm you or be used to your benefit, depending on the context, and you should know how your business will impacted. By the time many employers see me, it can almost be too late.
David A. W. Wong
Barnes & Thornburg LLP
E-businesses are not immune to legal issues. What do e-businesses need to know before launching a company/product/service?
With Internet law moving so quickly, this is one of the fastest-growing areas. One of the biggest issues for an organization going from a brick-and-mortar store to online is that the organization is not only potentially nationwide, but international as well. Ultimately, businesses need to decide to whom they are selling to. By selling products/services online, you may open yourself up to international issues.
What can organizations do? Businesses need to consider what they are doing, and whether it meets the general standards for the law. Another issue businesses need to think about is the tax implications. Are you allowed to do business in different jurisdictions? Intellectual property issues and privacy issues also come to mind. Many areas outside of the U.S. have far more stringent requirements for collecting personal and financial information. Some areas require a privacy officer with the collection of financial information. Domain issues have become a common problem. It can be difficult to force the transfer of a domain name for a website. We litigate around the world for domain issues. Essentially, it is a first-come, first-served process for domains. I have seen organizations pay $20,000 to $30,000 to retain the use of a domain name. Registering the domain name is part of the proactive approach.
Lastly, the laws are becoming more specific to the Internet, especially when it concerns defamation and copyright issues. A set of laws have been created specifically for shielding online service providers for comments or statements made on their site. Online service providers are simply a passive conduit to the information being sent. Communications Decency Act 230 was created as a means of protecting the online service provider. Think of Amazon or Facebook. They cannot be held responsible for the public's posts regarding an organization's product/service. Of course there are exceptions to the rule, but the online service providers are not held responsible for the defamatory statements.
Jim Jorgenson
Hoeppner Wagner & Evans LLP
ADA, FMLA and worker's compensation can be difficult not only for an employee, but for an employer as well. Employers need to know the ramifications for improperly giving leave, and how to handle the employment “leave” issue. Why is there so much confusion on employee leave?
Perhaps the most difficult challenge employers consistently encounter is the intersection of permitted medical-related leaves. Many of the laws are difficult to manage. In regard to the Americans With Disabilities Act (ADA), the Family and Medical Leave Act (FMLA) and worker's compensation, the problem is that employers (dependent upon their size) may have to look at those laws at the same time. State worker compensation statutes basically apply to all employers. Under these laws, employees who have sustained a work-related injury or illness may miss (be on leave from) work.
The ADA extends to employers with 15 or more employees. Under the ADA, a qualified individual with a disability may be entitled to a reasonable accommodation, which in certain circumstances, could include an unpaid leave for a definite amount of time. Finally, employers with 50 or more employees are covered by the FMLA. Under the FMLA, covered employees may take up to 12 weeks of unpaid leave for their own serious health condition.
Based on its number of employees, an employer can be covered by one, two or all three of these statutes. Note that the employer must cope with three different definitions: work-related injury/illness, disability and serious health condition. The leaves provided by these statutes can overlap. Consider this possibility. An employee with a serious health condition qualifies for a 12-week FMLA for her serious health condition. At the end of the 12 weeks, the employee cannot return to work. Since the employee does not have the job restoration rights of the FMLA, can the employer terminate her employment? Because of the overlap of the FMLA and the ADA, the answer is probably no. If the employee's serious health condition is also a disability under the ADA, a reasonable accommodation may compel the extension of the leave. This extension does not have to be indefinite.
The lesson is clear. Just because one leave ends, this does not mean that another legally protected leave does not continue or begin. Employers must constantly be aware of this possibility. For businesses, preparing an internal checklist of how to move forward and what to do can be beneficial.
Dana Rifai
Burke Costanza & Carberry LLP
With the new I-9 form going into effect last May, employers need to know ways to protect themselves with the new compliance practices and the potential for penalties and legal ramifications.
As stated by the U.S. Citizens and Immigration Services website, employers must have a completed Form I-9 on file for each person on their payroll who is required to complete the form. All I-9 forms must be retained and stored by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later.
The I-9 must be completed to document verification of the identity and employment authorization of each new employee (both citizen and noncitizen) hired after November 6, 1986, to work in the United States. Prior to May 7, 2013, the I-9 was a one-page form. The additional page was added in May 2013. The problem? Some employers are not even aware of having to complete the I-9, let alone the additional new information. The main purpose of the I-9 is documenting that an individual is able to work in the United States. What businesses need to remember is that no employer is exempt.
The Department of Labor is beginning to do random audits, so essentially any business could be subject to an audit. There are ways businesses can be proactive in making sure I-9 documents are not only completed, but records are kept accordingly:
* Review the company's method for completing I-9s.
* Train someone in the company to be responsible for I-9 compliance.
* Implement a policy in the company's handbook regarding I-9s (i.e., whether identification will simply be presented or copies of identification will be made also, how often are I-9s reviewed, etc.).
* Check the company's I-9s for need of reverification. Put notices or reminders in place for reverification of I-9s.
* Determine where the I-9s will be stored.
* Consult a qualified attorney regarding I-9 questions to be sure of legal compliance.
Clifford Browning and Brian Hittinger
Krieg DeVault LLP
When is it necessary to obtain a copyright and what should be done when an infringement occurs?
Many businesses fail to register a copyright because they don't think about it. What businesses need to realize is that there is no common law of copyright in the U.S. All U.S. copyright laws are defined and governed by the U.S. Copyright Act of 1976, as amended. Copyright protection exists in original works of authorship from the moment they are fixed in any form of expression that allows them to be communicated. What does this cover? Qualifying works of authorship for copyright protection include (1) literary works; (2) musical works; (3) choreographic works; (4) pictorial and sculptural works; (5) motion pictures; and (6) architectural works.
In no case does copyright protection extend to an idea, process, method of operation or discovery, regardless of the form in which it is described or illustrated. Ideas, processes and methods of operation fall under patent laws.
Copyright registration is becoming more important because of the Internet. We're seeing more cases and more of a need to copyright work. What business owners need to realize is that the owner of a valid copyright cannot sue copyright infringers until the copyright has been registered with the U.S. Copyright Office.
It's easy to register and not costly. For $35, in many cases the cost of good bottle of wine, businesses can register online. Copyright registrations may be filed online at www.copyright.gov.
Promptly registering a copyright is important. The U.S. Copyright Act provides that in a copyright infringement lawsuit the copyright owner may recover attorneys' fees incurred in the lawsuit, and may elect to recover statutorily defined damages as opposed to proving actual monetary losses, provided that the copyright in suit was registered with the U.S. Copyright Office before the copyright infringement occurred. If the copyright owner waits to register the copyright until after an infringement of the copyright has occurred, the statute provides that the copyright owner will have then waived the right to recover attorneys' fees and will have waived the right to elect statutory damages against that copyright infringer.
Losing the right to recover attorneys' fees can be a significant monetary loss in any lawsuit. It is often difficult for a copyright owner to prove actual out-of-pocket losses attributable to a copyright infringement, so the loss of the right to elect statutory damages can be very significant as well. And statutory damages do have teeth! Businesses and employers can protect themselves. Once a valid claim to copyright in an original, qualifying work of authorship has been obtained, register the copyright well before any infringement occurs.
