Don't forget that Iowa's smoking ban in public places starts July 1, 2008. If you are a business interested in learning more about compliance with the new law please visit the Iowa Department of Public Heath site at www.iowasmokefreeair.gov.
An informative Q & A concerning the smoking ban is available here.
Bar owners in particular are upset about the new law. Is a challenge in the works?
photo on flickr by greefus groinks
While discussing a franchise case recently an attorney working with me observed that the franchisor really didn't agree to do anything for the franchisee in its franchise agreement.
Unfortunately most franchisees are under the mistaken belief that franchisors will provide all kinds of support. When it doesn't happen and the business relationship has fallen apart, the franchisee is surprised to learn that the franchisor isn't contractually obligated to do much of anything. Which generally means that if a lawsuit occurs the franchisee may have very little recourse.
The solution: Franchisees should discuss specifically with the franchisor exactly what the franchisor is going to do to support the franchisee during the term of the agreement. If the franchisor makes promises that are not contained in the franchise agreement, ask for those promises in writing. If the franchisor won't put those promises in writing be ready to walk. And never, I mean NEVER, believe the franchisor that tells you they won't hold you to the terms of their written agreement. You can be assured that the franchisor's lawyer in any lawsuit will never acknowledge that such a statement was ever made and most franchise agreements are written so that any such statement could not be used as evidence anyway.
Ulitimately there is no validity to the claim that franchise operations are less likely to fail than non-franchise operations. A franchisor that just gets you into business doesn't offer you much. Always do your homework, ask the tough questions and demand answers.
Employers have an obligation to prevent sexual and other forms of harassment in the workplace. Unfortunately some employers are under the mistaken belief that their sexual harassment policy adequately covers them. Here are some common mistakes I have noticed while conducting employment compliance reviews:
Commit these mistakes at your peril.
I was shocked and saddened to learn of the death of Des Moines entrepreneur Jim Goodman (46) who died during the Hy-Vee triathlon yesterday. He suffered a heart attack during the swim phase and although rescue workers pulled him from the water, Jim passed away at a local hospital.
Jim was the CEO of Emerging Growth Group and also led VentureNet Iowa. VentureNet Iowa is an organization dedicated to creating wealth and job creation through "orphan" technologies. It was through these ventures that I got to know Jim. He was an incredibly hard worker and cared deeply about the future success of entrepreneurs in Iowa. When I appeared on his Iowa Business Hour radio program last month I could never have imagined I would be one of his last guests.
As Brett Trout said on Twitter about Goodman, "He was a visionary leader and entrepreneur and his passing is a great loss for our city." But Jim's passing will also be felt throughout Iowa as no one I have seen was more committed to assisting rural entrepreneurs in our state gain access to capital and resources.
My heart goes out to Jim's wife and three daughters. Jim Goodman will be missed.
Jonathan Frieden of the E-Commerce Law Blog offers some excellent advice that companies should refrain from copying another company's Web site terms of use policy. Jonathan says that even sophisticated companies are tempted to reduce legal expenses by copying such policies.
Iowa intellectual property attorney Brett Trout has also offered the same advice. As Brett pointed out in his post, an Iowa company looks pretty awkward explaining to a court why its dispute should be tried in Albuquerque.
The bottom line is that even if you use standard terms of use policies and other online policies you will need some customization for your particular business needs. Discuss with your lawyer whether he or she has standards forms that can be customized for your business. Most eCommerce lawyers have such forms. But it is a good practice to avoid directly copying the terms of use and other online policies of other companies.
Nascar has been sued by a former technical inspector in the Nationwide series. The African-American woman seeks at least $225 million in her claims for sexual harassment, racial and gender discrimination and wrongful termination. In the lawsuit, she alleged she was referred to as "Nappy Headed Mo" and "Queen Sheba," by co-workers, was often told she worked on "colored people time," and was frightened by one official who routinely made references to the Ku Klux Klan. In addition, she claims male co-workers made sexual advances, two of whom allegedly exposed themselves to her, and graphic and lewd jokes.
If true, those claims are indeed strong evidence of harassment and discrimination. But what's worse is that her supervisor allegedly ignored her complaints and dismissed by saying that the guys were "former military guys" with a rough sense of humor and that she would just need to "deal with it". Now, Nascar must "deal" with a huge lawsuit. And in case they didn't notice, this predominately white and male sport is a fairly easy target in a case of this nature.
Nascar should have heeded several of my tips on how to avoid employment lawsuits. Th two that quickly come to mind are to treat all employees with respect and to take action promptly to investigate when complaints occur. If you are a supervisor in an organization where harassment or discrimination is suspected you had better not tell the employee to simply "deal with it". That's going to get you sued every time.
Brick Gentry P.C. is willing to aid lawyers that may have been displaced from their offices by flooding in Des Moines. We have a limited amount of office space and some conference room facilities we can make available.
If you are lawyer in Des Moines displaced by the flood and need some work space or a place to meet clients temporarily, please call me at 271-1744.
Throughout the country critics complain that courthouses are flooded with lawsuits. In Iowa our courthouses are flooded - literally.
Be sure to check out these AMAZING aerial photos of the flooding in Cedar Rapids, Iowa including the local courthouse. Cedar Rapids even has its own version of Alacatraz (better known as the Linn County Jail).
After 1993, I never dreamed I would see this kind of flooding in my lifetime. Many experts have said this is a 500 year flood. Unfortunately it's really just fifteen.
For more on Iowa's flooding please visit www.iowaflood.com.
In the film Evan Almighty everyone believes Evan has lost his mind when he begins building an ark next to his home to protect against an upcoming flood. Right now, in Iowa, no one would proclaim him crazy. Our recent flooding has once again wrecked havoc to homes and businesses throughout Iowa.
So how do you build an ark to protect yourself from continually rising employment lawsuits?
1. Treat Employees with Respect: Seems like a basic philosophy but it is amazing how many employers forget to treat their employees with respect. Employees that are humilated or treated in a disrespectful way are much more likely to sue your company.
2. Communicate with Your Employees: First, make sure you have an effective employee handbook with up-to-date employment policies and publicize your policies to employees. Make sure you follow your policies. One of the easiest ways to land in an employee lawsuit is the failure to follow your employment policies. Also make sure you have an open door policy where employees are allowed to voice their concerns or complaints. Do not let complaints fester. Deal with them right away.
3. Implement an Effective Unlawful Discrimination and Harassment Policy: Your harassment policy should include more than just sexual harassment. There may be other forms of harassment based upon race, religion, age or disability. It is also critical to consistently train employees and supervisors regarding unlawful harassment and discrimination. You should consider training employees on harassment and discrimination issues at least once every year.
4. Document, Document, Document: The importance of good record keeping cannot be overstated. If you don't have something in writing, chances are a jury or judge may not believe it happened. Be sure to document even verbal warnings and maintain an appropriate personnel file in order to make sure the documentation is not lost.
5. Conduct Honest Employee Evaluations on a Regular Basis: Unless your company is headquartered in Lake Wobegon every employee is probably not above average. Evaluations can be valuable proof in an employment lawsuit. Make sure poor performance is properly documented. Otherwise, the judge or jury will not believe you when you say the employee performed poorly but all their evaluations are excellent. You should conduct the evaluations on a regular basis, usually at least once per year. I recently represented a client sued for discrimination. A key in defending the case were the honest performance appraisals performed b management.
6. Do Not Retaliate: Employers are often blindsided by retaliation claims. There are a number of proactive measures you can take in order to avoid liability for retaliation claims. It is important to avoid retaliation because recent cases have lowered the burden for plaintiffs to prove their retaliation claims and the number of retaliation claims from plaintiffs is continually on the rise.
7. Take Action and Investigate Promptly: If a complaint arises, make sure you take the complaint seriously and investigate promptly. A quick and thorough investigation may help eliminate problems before you have a real mess. You will need to consider who should conduct the internal investigation.
8. Compy with Wage and Hour Laws: Ensure your exempt employees (i.e., salaried employees) are properly classified as exempt under the law. Wage and hour claims are also on the rise and could result in a class action against your company. This is a common area of the law that is ignored by many employers and could result in significant liability.
9. Review and update your employee handbook and/or policies: At least you should review your policies to incorporate any changes in the law or your manner of doing business.
These simple steps will go a long ways to reducing employee lawsuits. To ensure that your company has done everything it can to avoid employee lawsuits, you should have your employment policies, training and practices reviewed by your employment lawyer.
*This post originally appeared as the Seven Ways to Avoid Employee Lawsuits from January of 2007 but this updated version is worth repeating. It also includes some ideas from Anthony Zaller of the California Workforce Resource Blog who had commented on my original post.
Photo on flickr by Whisper Photograhy.
Glad to see my friend Mark Landa blogging over on the Iowa Law Blog. Mark has an important reminder that the time for filing a civil rights complaint under Iowa law will be extended from 180 days to 300 days in order to conform to the federal timeline.
Iowa employment lawyer Victoria Herring points out on her blog that it is not a good idea to push deadlines but the extended time frame will allow complainants (and employers) and additional time to work out a resolution or gather evidence for claims.
The new Iowa law goes into effect July 1, 2008.
Indiana civil and business lawyer Sam Hasler recently expressed his view that the place to incorporate your business is generally in your home state.
I agree with Sam.
Delaware or Nevada may offer viable options for some companies but in general most Iowa small businesses are probably wise to incorporate here in Iowa. First, Iowa has very low fees when it comes to incorporating your business. It is a $50.00 fee to file Articles of Incorporation for a domestic corporation in the state of Iowa. Further, it only a $30.00 fee every two years for a biennial report if you file online. These fees are extremely low compared to other states.
Second, you won't avoid Iowa taxes by incorporating your Iowa small business in Nevada or Delaware if you are doing business here in Iowa. The tax and corporation laws of Iowa will require you to register your company and pay fees as a foreign corporation in Iowa and you will be required to pay Iowa state income taxes for any income earned. (You also do not avoid federal income taxes by incorporating in Nevada despite the lack of an information sharing agreement with the IRS).
And the perceived court advantages in Delaware? That might be fine for a large business that is actually going to litigate a case in Delaware but it is probably not cost effective for most Iowa small businesses to litigate their cases in Delaware. Besides unless you have well-written forum selection clause in contracts your Iowa small business will likely end up in Iowa courts anyway.
This post on employment lawsuits causing most e-discovery woes just confirms the reasons why a sound document retention policy is necessary in today's business environment.
Organizations need to respond to an increasing number of document requests, from regulatory compliance issues to internal investigations to full-scale litigation. Much of this information is available electronically. Despite the prevalence of such document requests most organizations remain reactive rather than proactive when it comes to dealing with the issue of electronic discovery.
Are you prepared?
This past January I posted on an Iowa immigration bill that targeted employers. The bill sparked significant debate but was not passed.
Now in the wake of the raid at the AgriProcessors slaughterhouse and packing plant in Postville, Iowa, Iowa's legislative leaders are renewing promises to target employers.
This time legislative leaders will introduce legislation to prevent employers from hiring immigrant workers as independent contractors when they should be considered employees. It is also anticipated the legislature will renew efforts to create sanctions on employers that knowingly hire undocumented workers.
I have written on the issues relating to employees and independent contractors on several occasions. The issue of whether a worker is an employee or independent contractor is one of the most misunderstood (or should I say ignored) areas of the law. The proposed legislation is likely to crack down on the use of illegal immigrants serving as independent contractors in the construction industry.
In my experience a significant percentage of workers in the construction and other industries are misclassified as independent contractors rather than employees, not just illegal immigrants. For most companies I would argue it's more about saving on payroll taxes and workers' compensation insurance than hiring undocumented illegal immigrants.
As I have said in the past, the approach of misclassifying workers as independent contractors is not worth the risk. The safest course is to treat workers as employees if the workers' status as an independent contractor could reasonably be questioned.
If you have questions about whether to treat workers as employees or independent contractors be sure to consult with an employment lawyer.
It is easy to form your new Iowa business entity. For details see my Small Business Package. To get started just fill out the Startup Form and we'll contact you to confirm the information.
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