Are You Motivated?

Yesterday I attended the Get Motivated Seminar in Des Moines. Here are some sample tidbits from the seminar. Most are common sense but as someone once said, "Common sense is not all that common."

Here are five cornerstones of success as told by Suzie Orman.

1) Think Great Thoughts – have a positive mental attitude
2) Say Great Things – do not speak negatively.
3) Take Great Actions.
4) Wish Others Greatness
5) Love Yourself and Each Other.

Here are a couple of tips from Zig Ziglar.

1) People will not buy until they know how much you care.
2) If someone asks you how you are doing say, "Better than good!"

Phil Town – Successful Investor

1) The best tipoff that a stock is going up – "Insider Buying" (Peter Lynch)
2) The best tipoff that a stock is going down – "Insider selling" (Peter Lynch)
3) Warren Buffett’s rules of making money – #1. Do not lose money. #2. See rule #1.

Peter Lowe

1) Our words control our mind.

Overall I enjoyed the seminar and would recommend it the next time it comes to Des Moines.

Are You Drug Testing? Make Sure to Comply with Law

If you are a private Iowa company that drug tests your prospective or current employees it is important that you pay attention Iowa Code section 730.5. This statute sets forth the obligations of private sector employers involving drug testing in Iowa. I have dealt with several employers who were surprised by the requirements of Iowa Code 730.5. Does your company have a written policy specifically for drug testing? Do you conduct random testing? If an employee tests positive are you prepared to allow that employee to go for drug treatment? These are just a few considerations addressed in the statute.

Before deciding to drug test you should make sure you review the requirements of Iowa Code 730.5 with your lawyer. Performing drug tests may be necessary in your business but you need to make sure you are acting within the requirements of the law. Mistakes could be very costly and subject you to significant liability.

Click here for more information regarding human resource audits for businesses.

Update:  See post regarding Iowa Supreme Court decision on drug testing in August 2006.

Articles of Incorporation or Organization Only Part of the Story

Now for the rest of the story . . .

Imagine a client that becomes embroiled in a disagreement with a 50/50 business partner. The two formed a LLC through a lawyer who was unfortunately not a business lawyer. The lawyer set up a limited liability company and drafted articles of organization. The problem – no operating agreement or initial meeting minutes.

Unfortunately this happens all too often. Without an operating agreement it is very tough to settle potential disagreements. How do you value the company? Who has authority or management rights? How are disputes settled? All of these items could have been set forth in an operating agreement. Instead, the parties may be staring a judicial dissolution in the face.

When do you need a shareholder agreement (Corp) or an operating agreement (LLC)? It is important to have one even if you are the sole shareholder or member. It helps establish corporate formalities to insulate you from personal liability. However, it is absolutely imperative to have such an agreement if you have more than one shareholder or member. That is the case even if the shareholders or members are family or best friends. Having a well-written shareholder or operating agreement can help prevent significant problems down the road.

Click here to learn about forming a corporation or limited liability company.

A New York administrative law judge ruled that a city worker cannot be fired for surfing the Web. The judge said surfing the web is equivalent to reading a newspaper or talking on the phone, providing a combination of communication and information that most employees use as frequently in their personal lives as for their work. He added, "For this reason, city agencies permit workers to use a telephone for personal calls, so long as this does not interfere with their overall work performance. Many agencies apply the same standard to the use of the Internet for personal purposes."

Under the facts of this case, the administrative law judge ruled a only a reprimand was appropriate. But employees that think they now have a free pass to surf the Internet on the job should not get too excited. A well-written employment policy on Internet use would still allow employers to discipline employees if necessary for excessive Internet use. Those same policies would allow the employer to discipline an employee for excessive personal phone calls or reading the newspaper on the job. Overall, it is doubtful this decision will have wide-ranging impact in the private sector and employees should be careful to follow the written policies of the employer.

Corporate Minutes Help Maintain Limited Liability Shield

Corporate minutes often seem unnecessary and mundane. Here’s an article that discusses the importance of minutes and good record keeping in order to maintain limited liability in your corporation or limited liability company.

Click on the Inc article to learn more.

Over the past twelve years I have had the opportunity to work with well over one hundred businesses. Many of them have been successful but many of them unfortunately did not make it. The common thread among those that did not make it? You guessed it. No written business plan and in most cases no planning at all.

Where do you start in writing your business plan? I suggest reading the book, How to Write a Winning Business Plan by Joseph Mancuso. I noticed most recently you could get a used copy for $.02 on Amazon plus shipping. But don’t be fooled by the price, this is an excellent book full of good examples and tips for writing a top notch business plan. I also suggest you visit the SCORE Web site. The Web site has loads of information for entrepreneurs. You should also follow SCORE’s Five Tips for Making the Most of Your Business Plan.

To learn more about incorporating your business or setting up a limited liability company please visit Sullivan & Ward’s Web site.

Thinking of Starting a Business? Consider Bizstarts

Are you starting a business? Do you need financing? Have you developed a marketing plan? Do you know how to do a balance sheet or profit / loss statement?

If you need a little guidance in getting started with your business you should consider calling Monica Dolezal of Bizstarts. Monica has thirty years experience in the banking business and has probably worked with over a thousand small businesses during her career.

She provides seminars and works with entrepreneurs one-on-one. She serves as an advisor to help you in the start-up phase. Check out her Website at www.bizstarts.biz

Outsource Your Legal Work to Iowa:

I have recently read several articles concerning the outsourcing of legal work to India and other countries. In fact, outsourcing is becoming popular for high level legal work including mergers and acquisitions. I have often wondered – why don’t companies outsource their legal work to Iowa? Relatively speaking we have lower hourly rates than larger metropolitan areas of the country and the quality of lawyers is excellent among the Iowa bar.

So take note and send that business to Iowa.

Retaliation Claims Pose Threat

Iowa is known as an "Employment at Will" state. The mantra is that an employer may fire someone for "any reason" or "no reason at all" – as long as that reason is not discriminatory. However, there are exceptions to this rule. One of the major exceptions is when a termination violates the "public policy" of the State of Iowa. A violation of public policy often invokes a retaliation claim. You may need to worry about a retaliation claim under Iowa law if your reason for terminating the employee involves any of the following:

1) Filing a workers’ compensation claim;
2) Filing a wage/hour claim;
3) Filing an IOSHA complaint;
4) Garnishment of wages;
5) Refusing to submit to a polygraph, except under law enforcement circumstances;
6) Participating in or refusing to participate in a labor union;
7) National Guard Duty;
8) Jury duty;
9) Taking time off to vote or voting for a particular candidate;
10) Deliquent child support payments / assignment of income;
11) Participation in a court-ordered drinking drivers course;
12) "Whistle Blowing" by public employees;
13) Request for the employee’s personnel file;
14) Refusing to Commit an illegal act.

There are also federal laws which may give rise to retaliation claims.

It is important to keep in mind that a retaliation claim may be valid even if the original claim had no merit. It is important to establish a policy against retaliation and to faithfully follow it. If you have questions about whether you can terminate an employee please consult your attorney before doing so.

AVOIDING DEFAMATION CLAIMS IN RESPONDING TO REFERENCE CHECKS: Iowa Code Chapter 91B.2

A significant potential liability faced by employers is defamation. To defame someone is to make a false statement that injures the person’s reputation. A written defamatory statement is known as libel. A spoken defamatory statement is slander. In order to have a legitimate defamation claim the false statement must be communicated to a third person either in writing or orally. Generally to be defamatory the statement must be one of fact. Usually statements of opinion are not considered defamatory.

Job references often present a problem relating to defamation. Section 91B.2 of the Iowa Code provides potential immunity for information provided by employers about current or former employees.

1. An employer or an employer’s representative who, upon request by or authorization of a current or former employee or upon request made by a person who in good faith is believed to be a representative of a prospective employer of a current or former employee, provides work-related information about a current or former employee, is immune from civil liability unless the employer or the employer’s representative acted unreasonably in providing the work related information.

2. For purposes of this section, an employer acts unreasonably if any of the following are present:

a. The work-related information violates a civil right of the current or former employee.

b. The work-related information knowingly is provided to a person who has no legitimate and common interest in receiving the work-related information.

c. The work-related information is not relevant to the inquiry being made, is provided with malice, or is provided with no good faith belief that it is true.

Rather than run the risks many employers have a no comment policy whereby they give only the dates of employment and positions held. This is not particularly helpful to a prospective employer and it may actually hurt the employee’s chances of getting the position because enough information is not known. In a bizarre twist some employers have actually been sued by prospective employers for not providing pertinent information regarding the current or former employee.

One potential solution is to adopt a no comment policy but to make an exception where the current or former employee approves in writing the employer providing a reference and release the employer from any liability associated with issuing the reference.

Whatever policy is adopted be sure you communicate it in writing to employees in the company handbook and follow it faithfully. The policy should identify those in the company that are authorized to give references and it should prohibit everyone else in the company from doing so.