Terry Jessop & BitnerSalt Lake City Business Law Attorneys | Terry Jessop & Bitner2024-01-19T20:01:19Zhttps://www.cbclaw.com/feed/atom/WordPressOn Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=471892024-01-18T20:02:44Z2024-01-19T20:01:19Z1. Limit geographic scope
Define the specific geographic area covered by the agreement. Limit the non-compete to areas where the employee physically worked and the company operates. Overly broad geographic restrictions are a common reason courts strike down non-competes.
2. Specify a time period
Reasonable time restrictions are also essential for an enforceable non-compete. While requirements vary by state, you need a reasonable duration, such as up to a year, of restriction for an employee from working for a direct competitor after leaving. However, 1-2 years is sometimes acceptable for roles where the employee gained extensive proprietary knowledge or developed close customer relationships. Just make sure restrictions are no longer than necessary to protect your business interests.
3. Limit restricted activities
Clearly define the scope of activities prohibited by the non-compete. Limit the restrictions to roles and services directly in competition with your core business offerings. Also specify that the non-compete only applies to employment relationships, not simply doing business with or providing services to competing companies as an independent contractor. Broad activity restrictions increase the risk of a court seeing the agreement as restrictive of employee mobility and choice.
Carefully drafted non-compete agreements can protect your business when employees move on. With reasonable limits and clear language, these agreements can withstand legal scrutiny.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=471882023-10-26T20:36:01Z2023-10-26T20:36:01ZIs it all good news for start-ups?
It is important to point out that there was also a rise in business bankruptcies during the same time period. The Economic Interest Group provides an interesting analysis of the role the pandemic played in the creation and destruction of these types of businesses. Ultimately, the group explained that there are two likely scenarios, both positive. First, that the rise and fall of start-ups are in balance, and the pandemic has resulted in a reallocation of resources contributing to more productive business endeavors. Second, the startup rate will soon outpace the closure rate, and the surge will show an increase in the nation’s support of entrepreneurship.
What should I know before beginning my own start-up?
If you are looking to move forward with your own start-up, you likely have many questions. One of the more important involves how to structure your business. There are many different options, but the more common include:
Sole proprietorship. The most common and easiest to establish, a sole proprietorship, involves the entrepreneur and the business, and that’s about it. Unfortunately, it does not come with liability protection or tax benefits. This means the owner is responsible for both.
Partnership. This structure is similar to a sole proprietorship but with two owners.
LLC. A limited liability company (LLC) provides, as the name implies, some form of liability protection to the owners. The business structure takes on some of the risks associated with running a business, helping to shelter the owner’s personal assets.
Corporation. This form offers the highest level of asset protection. There are many types of corporations. Entrepreneurs can choose the one that best helps them meet their goals, whether they be tax benefits or investment options, to name a few.
The above provides a good starting point for further discussion. Those looking to move forward are wise to seek legal counsel to help better ensure their choice is tailored to their business interests.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=471872023-07-26T23:55:55Z2023-07-26T23:55:55ZEmployer-driven debt
For many workers, getting a job often means taking on unexpected debt. This is often due to an employer mandating specific training or requiring specific equipment that the company does not provide to gig workers. In some cases, the employers require the employees to purchase items directly from the company at costs much higher than market alternatives. If an employee owes the company a debt, it keeps the employee from wage mobility as they must stay until they finish paying it off. These anti-competitive financial practices companies will use to trap workers for the sole benefit of the business.
Employer surveillance
Additionally, employers that utilize productivity tools threaten employee privacy. Many employers rely on software to track worker productivity, and companies have the ability to continue tracking employees beyond business hours. If a company owns the surveillance data, it can turn and sell this information to other employers, insurers or financial institutions. This is a violation of the Fair Credit Reporting Act.
With the agreement between the CFPB and NLRB, the agencies will move information back and forth to protect workers from illegal labor practices. Through this collaboration, the organizations will look for violations under the National Labor Relations Act and federal consumer financial protection laws.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=470952023-07-10T17:01:52Z2023-05-01T19:29:23ZConstruction defect claim defenses
There are several legal defenses that can assist contractors who are facing construction defect claims. Under Utah law, plaintiffs must file defect claims within six years of the project's completion. Claims made outside this limitation might not be defensible in court. In addition, the claimants should give contractors notice after discovering a defect and allow them a chance to fix the error.
You can also attempt to argue that the construction defect is not a result of your work. It is possible that another builder or a subcontractor caused the mistake. Furthermore, some natural phenomena, including wear over time and weather events, contribute to construction issues. The property owner is responsible for protecting the building from damage after the project is complete.
Preventing construction defect claims
When you construct a building, imperfections are inevitable. Hiring experienced builders, purchasing quality materials and using best practices on the worksite can all decrease the likelihood of a mistake. However, accidents can occur, and even excellent contractors and developers can sometimes face defect claims. Therefore, keeping thorough records and drafting contracts that help you defend yourself from claimants is useful. In addition, providing warranties to your clients and giving them a formal method for making complaints can help deflect legal disputes.
Construction defect claims can be disruptive and costly. However, you can utilize many legal defense options and strategies to avoid future legal issues.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=470942023-07-10T17:01:59Z2023-01-27T16:32:59ZOhio law states that the applicable term cannot exceed one year after the termination of employment.
There must be some legal consideration
A non-compete agreement must include legal consideration for the party committing to the contract. In most cases, the offer of employment and the compensation that comes with that employment is sufficient consideration.
There must be good faith
Any non-compete agreement should reflect good faith on the part of both parties. Each party in the contract should act in support of the contract and in accordance with those terms with no deliberate actions to impede the agreement.
The agreement must be necessary to protect the business
A business in a competitive industry with trade secrets may need a non-compete agreement to protect its position in the industry.
The applicable area must be geographically reasonable
Every non-compete agreement has a defined geographic area for employment restriction. That geographic area must reflect a reasonable area for the company’s competitors and not one that is irrationally large enough to prevent any alternative employment.
The employee should play a specialized role
Employers cannot require administrative employees with no access to proprietary information to sign a non-compete agreement. Only employees in specialized roles and positions with access to regulated information.
Recognizing the fundamentals of an enforceable non-compete agreement is important. Protect your company’s right to enforce your contracts by following the state’s regulations.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=470922023-07-10T17:02:08Z2022-10-29T14:17:41ZUtah Division of Corporations and Commercial Code.
However, you might still resist the transition to LLC. See below for a brief overview of the LLC business entity and how it might help you.
Prevent personal liability
For the most part, sole proprietorships are only for low-profit and low-risk businesses. Anyone can start a sole proprietorship, but as soon as you begin to grow a customer base, you run the risk of lawsuits. If you sell a product or service that has inherent risk, your customer might decide to sue you for damages. Without an LLC, you must pay for any losses from your assets. LLCs can file for bankruptcy without risk to your home, car or savings account.
Use flexible tax structures
Single-member LLCs can take advantage of pass-through taxation. This allows you to avoid corporate taxes and pay personal income taxes on your profits. The Internal Revenue Service treats LLCs as sole proprietorships for tax purposes. However, LLCs still have the option to pay their taxes like a C or S corporation. Sometimes, it is more profitable to become a shareholder in your company and pay the flat corporate tax rate.
Creating an LLC gives you more flexibility for your business. It allows you to avoid individual liability and choose the tax structure that makes sense for the company.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=470902023-07-10T17:02:14Z2022-08-05T20:46:53Za mechanics lien in order to secure payment. A mechanics lien is a legal tool that provides payment by granting the unpaid party a security interest in the property.
Who can file a mechanics lien?
Contractors, subcontractors, and anyone else who provides labor or materials to a construction project have mechanics lien rights in Utah. Lien rights are also granted to suppliers of some pre-construction services, such as surveyors.
Is there a deadline to file a mechanics lien?
You must file a notice for a mechanics lien for pre-construction services within 90 days after the completion of your work.
Anyone filing a construction lien for work performed must file a notice within 90 days after the filing date for the Notice of Completion; or if there is not a notice, within 180 days of the completion of the contract.
What happens if the property owner files for bankruptcy?
A mechanics lien is a secured debt. If there is money left at the end of the bankruptcy process, a mortgage is usually paid first. Then the court pays liens in the filing order.
If there is no value left in the property, you might not get paid. If the owner wants to keep the property, they are still obligated to pay secured debts after the bankruptcy process is over.
Filing a mechanics lien allows contractors and suppliers to receive payment when contracts are not honored on construction projects.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=469102023-07-10T17:02:26Z2022-05-12T14:10:11Z1. Maintenance disputes
When damages occur on a property that may affect the tenant's commercial business, tensions may flare when fingers start to point at who might be responsible for funding the repairs. Depending on the terms of the lease, the landlord might only be responsible for certain maintenance tasks such as structural repairs.
2. Unapproved lease assignments
If a commercial tenant decides to sell their business, they will likely attempt a lease assignment to transfer the property to the new owner. A series of misunderstandings can occur when the original tenant fails to get the landlord's approval of the new tenant, or if the original tenant neglects their continued liability to make the rent payments.
3. Renewal misunderstandings
After successfully conducting business on a property for a number of months or years, a commercial tenant might expect to renew the lease under the original terms. The landlord is not necessarily obligated to present the same terms at the time of renewal, which can frustrate tenants who have concerns over how they will continue to run their business.
Landlords seeking to evict a commercial tenant over serious disputes are dealing with a very specific area of business law. Success in such a case may depend upon quality professional counsel.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=469092023-07-10T17:02:35Z2022-02-11T17:58:06ZPersonal liability
It is important to understand your personal liability. Depending on the structure of your new business, separation may exist between you and your company, in which case there is some protection for your personal property. However, if you are a sole proprietor, your income and savings, and your business itself are at risk in the event of a lawsuit.
Insurance options
Look into insurance options that can offer protection for you and your business. Examples include Employment Practices Liability Insurance (EPLI), Directors and Officers Insurance (D&O), Commercial General Liability (CGL) and even Environmental Insurance. If you have at least five full-time employees, the state of Utah also requires you to carry workers’ compensation insurance.
Litigation hold
If litigation is on the horizon, the first step is to contact your attorney. Next, you must initiate a litigation hold. This means you must identify the people and the information, both hard copy and electronic, that relate to the lawsuit. Make sure that no one destroys pertinent documents or the court might impose penalties that could harm your business.
Trusted adviser
Prepare for possible litigation by developing professional relationships, especially with an attorney who can come to your aid if you become the defendant in a lawsuit. Having the help of an advocate who understands the business climate and the disturbances that can occur will give you peace of mind and allow you to focus on the growth and well-being of your new company.]]>On Behalf of Terry Jessop & Bitnerhttps://www.cbclaw.com/?p=468932023-07-10T17:02:42Z2021-11-08T17:23:07Zantitrust law impact the gig economy?
Antitrust law and the gig economy
Unions have protections that exempt them from federal statutes enacted to promote competition and prevent monopolies. However, because gig workers are independent contractors, they do not have these protections. Without these protections, the law may view strikes and other attempts to organize by gig workers as attempts to fix the price of labor.
Proposed legal changes
The Federal Trade Commission Chair is attempting to change federal law to extend protections to gig workers who wish to form unions. These proposed changes may become part of the ongoing battle between companies who hire gig workers, the government and workers. Businesses argue that gig workers are contractors who are not entitled to the same rights as employees. Some regulators fear that attempts to exempt unionizing gig workers from antitrust laws may lead to price-fixing schemes among independent contractors in other industries.
The FTC has previously shot down attempts by local officials to provide antitrust exemptions to gig workers in Seattle. The federal government does not currently have any antitrust legislation that changes gig worker status on the table. Legislators must write any such changes in a way that avoids potential price-fixing loopholes. Any guidance from the FTC may influence the policy debate, but would not have the force of law.]]>