Business Law Archives - Page 6 of 11

Be careful – a ‘letter of intent’ could be binding

08/17/202005/12/2015 by Report from Counsel

Business-people who have agreed on the general terms of a deal often sign a “letter of intent” that lays out these terms in writing. The idea is to make sure that everyone is on the same page while a formal contract is being drafted.

But what happens if you sign a letter of intent with someone, and then they walk away from the deal? Is that okay?

In general, the answer is yes – a letter of intent isn’t a binding contract; it’s merely an expression of a plan to negotiate a binding contract.

But that’s not always true.

Employee goes to work for competitor, despite contract

09/23/202005/12/2015 by Report from Counsel

Michael Holton was the president of a cancer radiation services company. When he took his job, he signed an agreement saying that if he left, he wouldn’t disclose any confidential information or trade secrets to a competitor for at least a year. After the company merged with another business, Holton was terminated. A month later … Read more

Arbitration Clauses in Employment Contracts

09/23/202001/30/2015 by Report from Counsel

The Federal Arbitration Act requires courts to enforce clauses in commercial contracts that require arbitration of disputes. The U.S. Supreme Court has ruled that transportation workers engaged in interstate commerce are exempt from the Act. For other types of workers, the effect of the Supreme Court ruling was to reaffirm the enforceability of mandatory arbitration provisions in agreements entered into by workers engaged in interstate commerce.

Interstate Commerce Requirement

The Act’s requirement that workers be engaged in interstate commerce is not especially difficult to meet, given the interconnectedness of the economy. When a nurse at a hospital tried to avoid binding arbitration of her wrongful discharge claim by arguing that her employment agreement had no impact on interstate commerce, the argument failed. The court pointed out that the nurse’s employment depended on the constant use of supplies purchased from other states and that the hospital treated many out‑of‑state patients. More often than not, similar connections can be made between most jobs and the flow of interstate commerce, especially for large employers.

Level Playing Field

To say that employers and employees generally may

Employment Law Guidebook

01/20/2015 by Report from Counsel

The U.S. Department of Labor publishes a guidebook to provide businesses with general information on the laws and regulations that the Department enforces. The guidebook describes the statutes most commonly applicable to businesses and explains how to obtain assistance from the Department for complying with them. The authority of the Department of Labor extends to … Read more

Case by Case

08/17/202001/12/2015 by Report from Counsel

Bait‑and‑Switch Credit Card Offer

In a variation on the typical “bait‑and‑switch” scheme, a bank made a promotional offer of a “no annual fee” credit card, then changed the terms mid‑year to require such a fee. A credit card holder sued the bank under the federal Truth in Lending Act (TILA). She alleged a violation of the requirement in TILA that an issuer of a credit card disclose the terms of the card accurately and without misleading statements. A federal court allowed the lawsuit to continue.

Federal Advertising Guidelines for Businesses

08/17/202001/08/2015 by Report from Counsel

The Federal Trade Commission Act prohibits advertising that is untruthful, deceptive, or unfair, and it requires advertisers to have evidence to back up their claims. There are also other federal laws applicable to advertisements for specific types of products and state laws that apply to ads running in particular states.

Unfairness

An advertisement is unfair if it causes “consumer injury.” The Federal Trade Commission (FTC) uses a three‑part test to determine if a consumer injury has occurred or is likely to occur as the result of an advertisement: (1) the injury must be

Capped Commissions

08/17/202011/20/2014 by Report from Counsel

As a sales representative for a computer software company, Richard received an annual salary and sales commissions as determined by a compensation plan that was part of his contract. There was a specific formula for how commissions were to be calculated, but language in the plan gave the company broad authority to make a final decision about compensation and to change the plan at any time. For sales commissions, in particular, the employer reserved the right to review any transaction generating a commission beyond a salesman’s annual quota and to determine the “appropriate treatment” of it.

Freelancers’ Articles Are Not Free

08/17/202011/20/2014 by Report from Counsel

The U.S. Supreme Court has given a victory to freelance authors of newspaper and magazine articles, and a defeat to some major publishers of their work. The publishers hired the authors as independent contractors who would contribute articles to what is known in copyright law as a “collective work,” that is, a newspaper or magazine. Under federal copyright law, the publishers were the owners of the copyright in the collective work, giving them the right to reproduce and distribute the contributions as part of the collective work or any revision of that work. The writers themselves, however, retained the rights to their individual articles.

Age Discrimination in Employment

08/17/202011/20/2014 by Report from Counsel

The combined effects of an aging population and a sluggish economy have led to an increase in lawsuits alleging age bias in the workplace. The Age Discrimination in Employment Act (ADEA) prohibits age discrimination in the employment of persons who are at least 40 years old. The ADEA covers most private employers of 20 or more persons. It forbids age discrimination in advertising for employment, hiring, compensation, discharges, and other terms or conditions of employment. Retaliation against a person who opposes a practice made unlawful by the ADEA or who participates in a proceeding brought under the ADEA is a separate violation.

Small Businesses and Job Discrimination

07/08/201406/16/2014 by Report from Counsel

Number of Employees

The federal Equal Employment Opportunity Commission (EEOC) is responsible for enforcing the most widely applicable federal laws that prohibit discrimination in employment. The smallest of businesses are not subject to most of these statutes. Title I of the Americans with Disabilities Act (ADA), which prohibits employment discrimination against qualified individuals with disabilities, applies only to employers with 15 or more employees.

The same is true for Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits job discrimination based on race, color, religion, sex, and national origin. The threshold for coverage under the Age Discrimination in Employment Act (ADEA) is 20 or more employees. The Equal Pay Act, which is intended to prevent wage discrimination between men and women in substantially equal jobs in the same establishment, applies to most employers with at least one employee.