Rush on Business : Iowa Corporate Lawyer & Attorney : Rush Nigut of Brick Gentry Law Firm : Serving Des Moines, Cedar Rapids, Davenport, & Sioux City

Pennsylvania employment lawyer Michael Moore has an excellent post on Five Things Every HR Generalist Should Know about Retaliation Claims.  Michael notes that the number of retaliation claims rose 18% in 2007 to a record high, doubling since 1992.  His post covers the following areas:

• What is unlawful retaliation?
• What is "Adverse Action" by an employer?
• What is "Protected Activity by an employee?
• Promptly investigate comments & complaints regarding discrimination.
• Monitor supervisors for adverse action following an employee complaint.

In my experience, employers are usually cognizant of discrimination and harassment claims. However, they are often blindsided by retaliation claims. The successful resolution of a discrimination or harassment complaint means you are only halfway home. Supervisors and employees must not retaliate against the employee who complained. This is especially important because of a United States Supreme Court decision lowering the burden for employees to show retaliation.

Here are some proactive measures employers can take in order to avoid retaliation claims:

1. Make sure your employee handbook includes a policy prohibiting retaliation.
2. Always have alternative reporting avenues.
3. Conduct supervisor and management training on harassment, discrimination and retaliation. 
4. Make sure supervisors and management have been asked the tough questions when it comes to employee discipline. Make sure the discipline has nothing to do with the complaints of harassment, discrimination or retaliation. 
5. Periodically talk with the complaining employee to determine if anyone has retaliated against them. If performance is an issue for the employee be sure to bring this to the attention of the employee and make sure to document your conversations. Document! Document! Document!

As always, be sure to consult your employment lawyer for advice in specific situations.

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On April 29th, Polk County voters will decide whether we should fix the security and safety problems with the current courthouse and to build a facility that is large enough to meet the current demands of Polk County residents.  Consider the following facts:

Overcrowding

• The current courthouse was built 108 years ago.
• The population of Polk County has increased by over 500% since the courthouse was erected.
• The courthouse was originally built for 4 courtrooms and now consists of 27 courtrooms jammed into every nook and cranny.
• More than 2,000 people enter the courthouse on average each day.
• The number of cases has nearly doubled in the last 15 years and will double again in the next 22 years.
• There are no meeting rooms in the courthouse for attorneys, litigants, witnesses, etc.  Lawyers are often forced to meet in the hallway and run the risk of being overheard by jurors.
• Only 1 jury orientation room exists and it is woefully inadequate to hold all the jurors reporting on any given Monday.
• No disablity accommodation exists at the main entrance.

Security

• More people are arrested at the courthouse than any other place in Polk County.
• No security cameras exist in the courthouse.
• No baliffs or law enforcement exist in any of the courtrooms.
• In 2007 deputy sheriffs received over 500 calls for assistance.
• Prisoners, jurors, judges, attorneys and the general public all use the same corridors.
• No temporary jail or holding cell exists at the courthouse.

Safety

• The courthouse is not in compliance with fire codes.  No sprinklers, no fire detection, no fire stairwells, no smoke evacuation system, etc.
• There is no adequate emergency power system.
• There is a mold problem and ventilation is not adequate.
• Rodent and infestation of cockroaches is a real problem.  So bad the basement has been abandoned.

For more information please visit www.buildingforjustice.com.  I encourage you to vote "Yes" for a new courthouse.  If the facts described above do not persuade you, I implore you to go down to the courthouse and spend some time.  Walk around.  Make sure you go on a Monday morning.  That will give you the best chance to observe the demands on our current courthouse.  The need for a better facility is unquestionable. 

 photo on flickr by Turtlemoon.

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Forbes Magazine ranks Des Moines as the fourth best metro nationally for business and careers.  Iowa City ranked second in the smaller metro category.

Unfortunately for Iowa we also apparently rank first in the nation for corporate tax rates (and I don't mean in a good way).

But the tie breaker is that we are cool.  We always got that going for us.

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Des Moines attorney Charles Kenville has a great post on the need for lawyers to be mindful of the new media exposure in their cases.  Chuck has a criminal law bent to his post but his reminder is just as true for civil cases.

I know from experience that savvy businesses are acutely aware of blogs and other social media in their trial preparation.  In particular, Microsoft did a great job a staying in contact with Des Moines patent attorney Brett Trout and I when the Microsoft-Iowa litigation was going full steam.  But the plaintiffs were not to be outdone.  We routinely received updates from the plaintiffs' public relations team as well.

The bottom line is that lawyers engaging in trial law today ignore blogs and social media at their peril.  Learn how to read RSS feeds to stay on top of pretrial publicity.  You will be glad you did.

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I read a Des Moines Register article this past week on a young man who is starting a business while employed by another company.  According to the SBA deputy director in Iowa this happens frequently.  I must say that I greatly admire anyone who has the courage and desire to start their own business. But my question is whether this is good for employers?

This is not an easy question.  On the one hand it is important for an employee to grow and allowing an employee to create a business on his or her own time may in fact create a more productive and happy employee.  Particularly if the employee is starting a business that is different than the employer and they do it on their own time there may be no harm.

On the other hand, an employer pays an employee to do their job.  The employee's allegiance should be to the employer as long as that employee is receiving wages and other job benefits, right?

I must confess that I am not sure whether there is a right answer and it probably depends on the circumstances.  I am aware of many successful companies that draft policies that prohibit outside business activities while many other successful companies provide an environment that encourages employees to start their own companies.

One important risk in allowing employees to start businesses while on the employer's dime is the potential for the employer to start a similar business and steal clients.  This should be prevented.  One way to do this is with a non-compete agreement.  Other ways employers can protect themselves is through the use of confidentiality and non-solicitation agreements. 

But employers may want to read this article on what to do when an employee betrays you.  Unfortunately, many employees are not as upfront and honest as the young man in the Register article.  Employees have a legal obligation to act in the employer's best interests.  If an employee breaches this duty an employer may have an enforceable right.

Photo on flickr by Burpee Gardens.

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Ohio business lawyer Terri Rasmussen has an excellent overview of the resources available on the SBA Website.  (With a hat tip to Joel Libava on the Small Business Trends Blog for the original post).  Terri also refers to a helpful post from Anita Campbell on the Ten Ways Business.gov Helps Your Business.

While I couldn't agree more with these posts about the valuable information found on the SBA Web site, I would add I find the Kauffman eVenturing site to be one of the most useful business resources on the Internet for pure business advice and information.  The quality of the ideas and writing on the Kauffman site is outstanding.

P.S.  If you are looking for an interesting interview, be sure to take some time to listen to Central Iowa's very own Sherry Borzo interview Anita Campbell on the dsmBuzz site.  It's terrific!

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A cautionary tale about partnership from Richard Fox on the Kauffman eVenturing site is an absolute must read.  Fox shares how he thought his legal background would protect him well as he created shareholder agreements, buy/sell agreements, voting trusts, special bylaws and articles of incorporation when he entered into a business partnership.  But even he was surprised when a 50 percent partner tried to sell the company out from underneath him after his father's funeral.  To make matters worse the partner tried to sell the company to their number one competitor.

Fortunately for Fox he was able to ultimately sell the company for a handsome price because he continued to concentrate on building the business rather than retaliating against his partner.  But it's pretty clear Fox believes any business person should be extremely careful when taking on partner.  He offers the following priceless advice (with my comments following):

• Know Your Existing Shareholders' Rights. Shareholders of private companies—even minority shareholders—hold the same legal rights as shareholders of public companies. When you accept shareholders, you accept the same scrutiny that comes with being a public company without the benefits. Understand that you can never be adequately prepared for a shareholder who wants to maliciously assert their shareholder rights to cause you problems. 

(Comment:  In Iowa, all shareholders are entitled to the financial information of the company as well as copies of all corporate documents   I strongly suggest you keep all copies of all important corporate documents and financial information routinely, not just when you need them.  In particular make sure you have any documents that would evidence ownership rights.  It is my experience that often one partner will have access to the corporate documentation while the other partner does not.  Don't let that happen to you).

• Avoid Taking on New "Legal" Shareholders. Entrepreneurs sometimes give ownership interests to key employees to allow them to share in the equity growth of the business. For the reason stated immediately above, you might consider offering "phantom stock," (read this article for more on phantom stocks) which carries all the economic benefits of common stock ownership without the potentially abusive rights of legal ownership. A lawyer should be able to advise you on the details. 

(Comment:  My experience with clients is that most employees really want to be paid more.  I know entrepreneurs often want employees to feel as though they have a "piece of the action".  But I also caution you to think twice about employee ownership).

• Take the high road. Rather than counter-suing the partner, Fox chose to put his energy into building the business. Not only was it good for the business, but it kept from muddying the waters any further and made a much needed ally out of the company's other corporate director. 

 (Comment:  This is very difficult to do is some situations.  Sometimes you may have no alternative but to fight back.  But I agree it is critical to continue growing the business). 

• Be prepared for anything. Pushed to the edge, some people will fight back with extreme measures. Although secretly passing legislation is extreme, be prepared for the unexpected.

(Comment:  I have learned this lesson the hard way myself with business partners in a few of my endeavors.  Do everything you can to protect yourself.  Start by knowing your rights and make sure to document, document, document.  Adversity often brings out the worst in people but amazingly people also change with substantial success.  Researchers have found the mere presence of money changes people.  It is also a good idea to have a trusted confidant that can help you vet a potential partnership without emotion).

• Sell on your way up. Entrepreneurs are "hard-wired" to grow businesses. The idea of selling is usually a far-away concept that is considered, but knowing the best time to sell is not intuitive. Don't wait until you can see the peak because chances are your buyers can see it too and will discount the price accordingly. Plan on a full year for the sale process to be completed; if you pull the trigger too late, you may miss.

(Comment:  This is a tough one for most business people.  You need to have a little luck on your side to sell at the right time.  But it's just like investing in the stock market.  You will likely never sell at the peak so don't be greedy.  A business sale should be a win-win for the buyer and seller). 

Overall, I just can't stress enough the importance of carefully considering whether a business partnership is right for you.  I often joke that it is not a matter of "if" but a matter of "when" the partnership will end.  But this is one joke I don't consider to be a laughing matter.  Fox's tale proves it.   

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Today is my last day with the Sullivan & Ward law firm.  This coming Monday I am taking a hop, skip and a jump over to the law firm of Brick Gentry, P.C. in West Des Moines, Iowa.  This is actually almost literally true as the Brick Gentry law firm is located across the parking lot just to the west of my current office location. 

It is difficult to leave my friends at the Sullivan & Ward firm but I am excited by this new opportunity.  Brick Gentry is a growing law firm with an excellent reputation in the Des Moines legal community for over 40 years.  The firm now consists of approximately twenty-five lawyers practicing in a wide range of areas including business law, municipal law, health care law, employment law, litigation and real estate.   

I'll join the firm as a shareholder and continue to work with my current business law clients and litigation matters.  Rush on Business will also continue although you will notice some changes to the links and contact information on the blog in the next couple of days. 

My new contact information is:

Rush Nigut, Brick Gentry, P.C., 6701 Westown Parkway, Suite 100, West Des Moines, IA 50266.  Phone:  515-274-1450; Fax:  515-274-1488; email:  rush.nigut@brickgentrylaw.com

Thank you again to all of you that read this blog.  I appreciate your support and look forward to this next step in the journey.  Stay tuned for more because I have a few plans ahead to mix it up and enhance the blog.  I'll need to settled in but I am looking forward to working on some new challenges very soon. 

photo on flickr by phxpma

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Des Moines Iowa intellectual property attorney Brett Trout is on a panel of experts to discuss the ethical risks of online communications.  The program starts at 12:00 p.m. c.s.t. today and runs until 1:30 p.m. 

See program outline information here.

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I will be speaking on a panel today at the Central Iowa Certifiied Financial Planner (CFP) Luncheon on the impact of blogging in my career and whether other professionals should start their own blog.  As I said before to the Sertoma Club, when I started this blog I never could have imagined all the great things that could have happened to me from a business perspective.  Now here I am one year later from my last talk on this subject and it just keeps getting better and better.

One of my favorite quotes about blogging comes from Lexblog founder, Kevin O'Keefe:

"Act as if you have a magic wand when creating a blog. What type of work do you want to do? Who do you want to work with? What type of clients do you want to serve? And be careful what you wish for. Blogging can make it happen."

Thanks to the Central Iowa CFPs for the kind invitation to speak at their luncheon.  I'll be on the panel today with financial planners Art Dinkin of Moment on Money and Suzanna De Baca of Private Capital Solutions Group.

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Here's some great tips for new small businesses.  Some terrific advice.  The top ten tips as listed:

1. Save up as much money as possible before starting.
2. Start on a shoestring.
3. Protect your personal assets.
4. Understand how--and if--you will make a profit.
5. Make a business plan, no matter how short.
6. Get and keep a competitive edge.
7. Put all agreements in writing.
8. Hire and keep good people.
9. Pay attention to the legal status of your workers.
10. Pay your bills early and your taxes on time. 

I especially appreciate the emphais placed on paying your payroll taxes on time, particularly the portion you withhold from your employees' wages. (See the commentary on No. 10).  It is critically important to understand that a corporation or LLC will not protect you from personal liability in the event these taxes are not paid.  (For an example, see a post from my favorite blogging accountant, Joe Kristan).

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As a blogger you may want to read this post from the Write Stuff on how to protect your online reputation. 

The post discusses how several employees have been fired from their jobs for writing controversial blog posts including a Web designer that shared stories and opinions about co-workers on a personal blog, an airline attendant who posted photos of herself in an empty jet, and the former CNN reporter who published opinionated entries on his blog.

As pointed out:

In each instance, the blogger’s justifications and legal arguments may be compelling. But that doesn’t change the fact that they all have one thing in common: Termination from lucrative positions that permanently clouds their employment histories.

The post goes on to give some great reminders including

• Blog as if your employer is watching and behave accordingly.
• Don't mix business and personal matters.
• Research company employee handbooks and/or consult HR before blogging.
• Consider what you stand to gain against what you stand to lose.
• If you are monetizing your blog check your company's conflict of interest policy.
• Blog truthfully and accurately.

Above all, whether you are blogging on a personal or business blog, you must be cognizant of whether your words and actions could damage and/or embarass your employer.  If so, you shouldn't be surprised when you receive your pink slip. 

And also always remember the shortest corporate blogging policy:  "Be professional".

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I don't know a single employer that can't use some good interview tips.  Fortunately for us Ohio Employer attorney Jon Hyman shares how to avoid hidden interview traps  and common stereotypes to avoid during job interviews.

These are great posts so be sure to check them out.

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The Electronic Discovery Blog of K & L Gates has an informative post on a recent electronic discovery decision out of the Northern District of Georgia. 

In the case the court found that deleted emails were not reasonably accessible and the defendant had no duty to search backup tapes for emails of a sexual nature.

Lessons from this decision:

1. DIscovery requests for emails should be relevent, specific and limited by time, sender and recipient.
2. Following a written document retention and destruction schedule can prevent spoilation sanctions.
3. Plaintiffs should request company-wide email perservation and not rely solely on the fact litigation has commenced.  Requests should also include the names of individuals from whom you want the emails.
4. If the costs of retrieving emails on backup tapes are too high, judges are reluctant to order production.

Read the entire decision here.

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This past year I covered in detail the Iowa-Microsoft class action case which settled for $179.95 million.  The case involved allegations that Microsoft undercut competitors and acted illegally.  Real bad stuff if you believed the plaintiffs.

Now a new controversy has developed in the Hawkeye state involving Microsoft.

Last night, I saw an attack against Governor Chet Culver.  At first I though it couldn't be possible because Culver is not up for re-election until 2010.  But it all came together when the voice over said, "Tell Governor Culver that Iowans deserve a tax break, NOT MICROSOFT."

A new law will provide Microsoft tax breaks for a proposed server farm if the company invests $200 million and makes a decision by the end of the year.

My question is whether that is a new $200 million or does the company get a credit for the $179.95 million paid in the settlement?  This is typical Iowa.  It just wouldn't be nice and fair if Iowans picked Microsoft's pockets for $179.95 million and didn't give them anything in return.  And above all, we Iowans are nice and fair. 

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Brian Honnold of Professional Solutions Insurance Services shares important information on IowaBiz that every retailer should know about their insurance coverage when you build out your new retail space in your local mall or strip center.

If you don't fully check out your coverages chances are you will be sorry.

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