Business disputes and litigation
Non-Compete Agreements Banned by FTC
In the old days, you might see a small business owner requiring a low level employee, even an administrative assistant, sign a non-compete. Those days are thankfully gone as certain states have moved in to balance the equation by banning non-compete agreements and protecting employees. The Federal Trade Commission (FTC) issued a final rule to ban non-competes nationwide. The Rule was scheduled to go into effect before a federal court placed a temporary hold on the rule. If the rule eventually is allowed to go into effect, that will mean that entering, attempting to enter, enforcing, or attempting to enforce, and representing that an employee is subject to a non-compete agreement, will be prohibited. And in any event, employers nationwide should consider the rule when preparing employment contracts because there is a…
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Employers Stop! Non-Compete Agreements Prohibited
Employers have become increasingly emboldened to stick it to their employees. Employees with little negotiating leverage or without legal counsel have been saddled with some egregious restrictions. Courts over the years have thrown out the most unreasonable restrictions, creating various tests whether to enforce the agreement. But the employee would need the resources to fight back in court. The District of Columbia has recently banned non-compete agreements, which is the trend throughout the country. If you have employees who reside or work in states that have banned non-competes, then you have precious few alternatives except to eliminate non-competes from your employment agreements with those protected employees. In the District of Columbia, that means eliminating non-compete provisions not only from your…
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Fiduciary Duties 101
You may have heard about fiduciary duties, something about loyalty and care, but truth be known, you have no idea what that all means. Let’s set the scene. Your startup company is up and running. You have consulted with your startup lawyer about forming the company as a limited liability company. What duties do you owe to those who have invested in the company. They are after all part owners and have invested their hard-earned money into your company. You talk with your startup lawyer and he or she explains that you owe the owners a fiduciary duty—fiduciary what, you ask? If you violate these fiduciary duties, you may be personally liable. Well, that should get your attention. This article discusses what a fiduciary duty is and who it is applied to.
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Law Firm Dissolution: Watching Lawyers Duke it Out
Lawyers are not immune from the travails of business divorce. They must address the same issues that any small business must address when business partners no longer want to be in business with one another. They must decide whether one or more of the partners will continue the law firm or dissolve the law firm. This article looks at one of the most contentious matters in law firm dissolutions: what happens to pending matters when a law firm dissolves.
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Small Business Response to Lawsuits
Lawsuits for small business can consume enormous time and resources. The best way to protect your small business from lawsuits is preventative care. That means that if you are a small business owner, you should use written agreements with everyone: employees, independent contractors; vendors, business partners, investors, everyone. Nonetheless, even if you have an agreement, you may find yourself or your business named in a lawsuit. This article discusses some of the initial steps that a small business should do if it is named in a lawsuit.
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Anatomy of a Business Dispute
Almost all small businesses frequently encounter disputes—some small, some not so small. In the vast majority of these business disputes, the small business owner can resolve the conflict without resort to a lawyer. In this blog, we describe what measures you can take as a small business owner to minimize the risk of business disputes, tactics to take to resolve disputes when they arise, and finally, when after a dispute arises is the best time to see your small business lawyer.
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Business Divorce: Outcomes and Resolutions for Small Businesses
This article summarizes possible outcomes from a business divorce. There are rarely good options in a business divorce, only ways to minimize the risk and uncertainty. It is not unlikely that the partners will engage in a self-defeating street fight with only losers and no winners. There are several issues that may affect the partners’ respective negotiating positions. In terms of the company, there are a limited number of possibilities: the company will continue to exist or it will be dissolved. There are of course other variants such as the assets of the company may be purchased or the company may be merged into a different company. In terms of damages or other remedies to the aggrieved party, courts try to fashion a remedy depending on the alleged harm. Whatever the outcome in a business divorce, usually none of…
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Business Divorce and Small Businesses
At one time or another there will be an end to your business. When you started your business, you should have developed an exit strategy, but sometimes things don’t go as planned. The business may end happily in a merger or acquisition and sometimes less happily by dissolution or bankruptcy. Without clear guidelines at the outside, you will find that extricating yourself from your partners may be costly. A business divorce may have similar acrimony to a family divorce. In a family divorce, there is the combustible combination of kids and money. In a business divorce, the business partners undoubtedly will also argue about money—and will contend for control over their business, which for founders, can be like an extension of their families. The disputes among partners are not easy disputes. And business divorces…
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