Rush on Business Celebrates 100th Blog Post

I am excited to announce that today is the 100th Blog Post of Rush on Business. Thank you to all the readers who have made this blog a success. I appreciate the favorable comments from many people who have enjoyed and learned from the articles on different aspects of small business law including incorporation and LLC formation, employment issues and franchise law.

I have a couple of exciting projects in the works. The first is the Entrepreneur’s Guide to Starting a Business in Iowa. This project should be done before the end of the year. A second project includes a blawg seminar for Iowa lawyers with Brett Trout. The date is tentatively set for November 10, 2006 in Des Moines. Stay tuned for more details.

My blogging has also introduced me to Mike Sansone and Sandy Renshaw. Mike’s site, Converstations, is filled with good ideas related to blogging. With Mike’s help I plan on taking Rush on Business to its own URL and adding many helpful features.

Please feel free to comment on articles. However, I have a few rules. The first is that all comments must not ask for legal advice in a specific situation. Our legal ethics rules only permit Iowa lawyers to provide information in a blog setting for general purposes only. Second, all comments must identify the author. I will also not allow any person to defame another person or company on my site.

I also encourage people to subscribe to my RSS feed. You may subscribe to the feed by clicking on the orange icon in the Sidebar of this site. By subscribing you will automatically receive updates for the new posts.

Please feel free to let me know about legal issues of interest. I will write about them in future posts.

New Iowa Supreme Court Rule Requires Lawyers to Protect Clients’ Personal Information

A new Iowa Supreme Court rule requires lawyers to protect clients’ personal information in an effort to combat identity theft. Rule 1.422(1)(a)(2) of the Iowa Rules of Civil Procedure states it is the responsibility of counsel and the parties to ensure that protected information is not included or redacted from court documents. The Clerk of Court will not review documents or materials to make sure personal information has been omitted or redacted.

Protected information includes:

1. Social security numbers.
2. Financial account numbers.
3. Personal identification numbers.
4. Other unique identifiers.

If a social security number is required only the last 4 numbers should be used. If financial account information is required only incomplete account numbers should be included.

Counsel is not required to omit or redact protected information from materials or cases deemed confidential by the Iowa Supreme Court: however, omission or redaction is required in proceedings that are initially confidential but which later become public such a divorce proceedings.

A party may also omit other personal information unless it is material to the proceedings or unless disclosure is required by law including:

a. Other personal identifying information such as driver’s license numbers.
b. Information concerning medical treatment or diagnosis.
c. Employment history.
d. Personal financial information.
e. Proprietary or trade secret information.
f. Information concerning a person’s cooperation with the government.
g. Information concerning crime victims.
h. Sensitive security information.
i. Home addresses.
j. Date of birth.
k. Names of minor children.

The new rule is effective November 1, 2006.
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Rush on Business celebrates its 100th blog post in the next post.

Employers Must Protect Employees’ Social Security Numbers

In a recent newsletter update from the Krupin O’Brien employment law firm, attorney Natalie Cantor Gros wrote an informative article regarding the importance of employers protecting the Social Security numbers of employees.

The article points out that a Michigan employer paid $275,000 settlement to group of 911 operators whose Social Security numbers were stolen when a labor union employee brought home documents containing Social Security numbers and the employee’s daughter use the information to make unauthorized purchases.

Michigan has passed a law designed to protect employees’ Social Security numbers and other states are following. With about 9 million victims of identity theft in 2005 it is critical that employers take adequate steps to protect employees’ Social Security numbers.

Employers should be particularly careful of allowing employees to have such confidential and private information on laptops. I have read over and over again about the loss of sensitive information on stolen laptops. Will employers ever learn?

The Use of Comp Time in Place of Overtime

Some employers decide to provide employees comp time instead of paying overtime. Under the law, employers are usually not allowed to provide only one hour of comp time for each hour of overtime. Instead, an employer may be able to give compensatory time if the overtime premium is included. This means an employee is entitled to 1 1/2 hours of comp time for each hour of overtime worked, as long as the employee takes the time off during the same pay period as the overtime work. (This is often a misunderstood fact by employers).

If you have questions concerning the use of comp time in lieu of overtime please consult an employment lawyer or contact the Iowa Workforce Development.

How to Name Your Iowa Business

The first step in naming your Iowa business is to make sure it is available for use. This requires a little homework. You need to make sure you are not infringing someone else’s business name.

To stay out of trouble you should first see if the name is available through the Iowa Secretary of State’s Web site. You can perform a search of a database containing the names of all the registered corporations and limited liability companies (LLCs) registered for business in Iowa. Another option is calling the Iowa Secretary of State’s Office at 515-281-5204 to see if your name is available.

The next step is to make sure your business name is not registered as a trademark. It is possible for businesses to trademark their names in Iowa but a federally registered trademark offers more protection for the owner. In order to check the federally registered trademarks you can perform a free search on the U.S. Patent and Trademark Office Web site. Conducting a search this way is not always complete so you may want to consider contacting an Iowa trademark attorney or a company which specializes in trademark searches. Another great way to protect yourself is to conduct a Web search of Google, MSN, Yahoo or other search engine to find out if a business shows up with the same name. You better be careful and consult an Iowa trademark attorney if you intend to use the same name as someone else.

Why is a trademark so important? If you choose a business name that is too similar to a competitor’s name, you might find yourself accused of "infringing" a trademark owner’s rights. The trademark owner then may be able to force you to change your business name and also receive money damages from you.

Be sure to contact an Iowa business attorney or Iowa trademark attorney if you have questions about how to name your Iowa business.

Exceptions to Limited Liability for Corporations and Limited Liability Companies

One of the main reasons for incorporating or forming a limited liability company (LLC) is protection from personal liability for business debts and claims. While corporate and LLC owners enjoy this limited liability in many situations it is important to realize that limited liability is not absolute. A corporate shareholder or an LLC member may be held personally liable if he or she:

1) Personally and directly injures someone;
2) personally guarantees a bank loan or other business debt and the company defaults;
3) fails to deposit taxes withheld from employees’ wages;
4) intentionally engages in fraud or illegality which causes harm to the company or someone else;
5) mixes business and personal assets and does not maintain separate accounts for the business and personal finances.

Business insurance may be helpful in certain situations to protect you if limited liability does not apply but many insurance policies contain exclusions for intentional acts.

The best advice for running your corporation or LLC is to make sure you keep your personal guarantees to a minimum, pay applicable taxes and keep all business dealings separate from your personal accounts.

Start-Up Businesses Should Develop Solid Relationship with Business Attorney

It is a good idea for start-up businesses to develop a solid relationship with a business attorney. Hiring an attorney is usually not as expensive as entrepreneurs imagine. In many instances entrepreneurs may try to set up their own incorporations through online resources but boilerplate article of incorporation, bylaws or shareholder agreements may not meet your needs. A business attorney can also help you consider other issues which may further protect your interests. This article from Entrepreneur discusses how to develop a solid relationship with your business attorney and the reasons why you should hire an attorney from the outset of your business.

Click here for information on Iowa small business incorporation and LLC formation services.

John Wellman Remembered: The Consummate Lawyer

Upon my return from vacation I was saddened to learn John Wellman passed away last Friday. Wellman, a long-time public defender, was blinded in a hunting accident at the age of 17. He overcame his adversity to earn a law degree from Drake University and a Masters in Law from Yale. He was 64.

His son Gregg was my position coach at Simpson College. Wellman attended our games and later told me at the courthouse that he always enjoyed "watching" our team. He was one of the lawyers in the first trial I watched at the courthouse. He represented an obviously guilty man who had been caught on video tape robbing the cash register at a convenience store. Wellman joked with the prosecutor out of the presence of the jury that he would simply argue the man was trying to put the money back and that the camera had it wrong.

Guilty or not John Wellman represented his client to the best of his ability. He used his laser-like ability to pinpoint deposition testimony to impeach a witness whose trial testimony conflicted with previous statements under oath. Wellman did not refer to the deposition itself. Instead he recited the page and line immediately off the top of his head without missing a beat. An amazing gift indeed.

He delivered his closing as he leaned on his walking stick. Methodically explaining in plain language why the jury should acquit his client. Nothing fancy but a brillant closing nonetheless.

I worked in a case against a Plaintiff’s class action lawyer that told me with regret that he did not have any "real" clients. I know Wellman had no such regrets. As explained in the book, Season of Life, Wellman was truly "a man built for others."

He lived with integrity and not only when it was convenient to do so. Always.
He sought justice. Because it is often hidden.
He encouraged the oppressed because they are always discouraged.
He made a great impact on the world because he asked the simple question: "What can I do for you?"

John Wellman did not worry about getting the biggest bank account or the fanciest car. (I guess he could not have driven the car anyway). He concentrated on what truly mattered. I am better for knowing him and I thank him for his fine example of what a lawyer should be and more.

Look Before You Leap With Blogs

I read this interesting article entitled, "Blogs Raise Copyright, Other Legal Issues" from The Business Journal of Milwaukee. The article discusses the legal issues raised by blogging including copyright infringement, defamation and privacy issues.

For lawyer bloggers there are a whole host of ethical issues to consider including confidentiality, lawyer advertising, unauthorized practice and ex parte contacts.

Companies considering a corporate blog should consider seeking advice from in-house counsel and/or outside counsel with a good understanding of technology and blog law.

eDiscovery Law Resource

The law firm of Preston & Gates has developed a searchable database currently containing over 500 cases relating to eDiscovery. This helpful resource for litigators contains over 100 eDiscovery cases that were decided in 2006. Click here for the eDiscovery Database.

Thanks to Francis G.X. Pilegge of the Delaware Corporate and Commercial Litigation Blog for pointing out the resource.