photo-suing-supplier-300x199No business is an island. Without trusted suppliers businesses would close shop. What happens when that trust is breached and you’re left holding the bag? If disagreements can’t be worked out and your company is facing or may face a serious loss as a result you may want to consider legal action against a supplier or former supplier.

Huy Fong Foods Inc., based in Irwindale, makes the Sriracha brand hot sauce from chiles (which are peppers). Without chiles there is no Sriracha but that hasn’t stopped the company from suing its chile supplier, Underwood Ranches, based in Camarillo, according to NBC4. Underwood’s website describes the company’s history and its current business including, “Today the farm grows red jalapeños for Huy Fong Foods…”The two companies have had a relationship for thirty years.

Underwood is being sued for breach of production agreement, breach of contract and civil theft. The complaint alleges,

2013_03_23__5016-300x200Whether you’re starting a new business, launching a new product or service or just haven’t gotten around to getting trademark protection for your logo, the names of your company or what you provide your customers, acting sooner is better than acting later. The more time passes the greater the chances another party may be able to trademark the same or similar words.

Trademarks are words, symbols or phrases that identify you as the seller of goods or services or the manufacturer of certain products. Trademarks distinguish them from other goods or services.

Perform a clearance search.

photo-IP-negotiations-300x200If you’re trying to sell your business it’s always good news to hear that a party is interested in buying. But what’s the next step? What happens if after the party looks you, your business and your books over, they decide not to buy? How do you protect your business?

One way to do that is through a confidentiality agreement. Whatever your business, no matter the service or products you provide, one of the most valuable things you have is information. That can include your financial numbers, sales information, marketing plans, customer lists and strategic plans. A potential buyer will want to know that information before making the decision to buy or not.

Before opening yourself and your business to scrutiny, obtain confidentiality agreements from prospective buyers. Here are some issues to think about when deciding what contract language will be right for you.

• You may want your identity kept confidential. If word has leaked out your business is for sale you risk your customers looking elsewhere and your competitors spreading the news to their advantage. One possible way to reduce the number of people knowing about the fact your selling your business is to make yourself anonymous. You could hire an advisor, investment banker or broker to reach out to possible buyers on your behalf while the identity of your businesses remains unknown. Your identity need not be revealed until the potential purchaser signs a confidentiality agreement. Continue reading

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Paris, France, December 10, 2013. LeWeb Day 1. Image by Dan Taylor/Heisenberg Media

Ride sharing behemoth Uber is keeping plenty of lawyers busy. The latest lawsuit concerns control over its board of directors and whether its founder and former CEO, Travis Kalanick, hid critical, damaging facts when he asked the board to allow three more members who he could name. This lawsuit comes after Kalanick resigned as CEO of the company in June after tales of company misbehavior and sexual harassment emerged but as he left as CEO he returned as a board member.

Earlier this month Benchmark Capital Partners, one of Uber’s first investors, sued Kalanick to try to prevent his return as CEO, reports the Los Angeles Times. The lawsuit was filed in Delaware Chancery Court and claims Kalanick breached his fiduciary duty and contractual obligations and engaged in fraudulent concealment by stacking the company’s board with allies to insulate him from possible repercussions of his actions and enable him to return as CEO. Uber and Kalanick are both named but damages are only sought from Kalanick.

photo-online-defamation-200x300Online reviews can help a business grow or cause it to shrink. They are increasingly powerful, double edged tools. Some businesses work very hard to obtain positive reviews and that effort can hit heavy head winds because of an anonymous, vocal, unhappy customer or two. If a business is harmed by a false, negative review, what can it do?

Americans benefit from free speech but that freedom has limits, including defamation. Generally if a business’ reputation is harmed by a false statement and it can prove damages, it may have a legal action for defamation against the party making the false statement. Defamation in a written form is libel while slander is oral defamation.

The California Court of Appeal, First District, Division Four issued a ruling in July protecting a business’ ability to fight online, anonymous speech that may be libelous (ZL Technologies, Inc. v. Does, Glassdoor) though in the context of employee, not customer, reviews. The plaintiff found that it received very poor reviews on the job posting website Glassdoor. They complained about management, compensation and its work environment, making it that much harder for ZL to find job candidates.

I just got off the phone with one potential client, and we are talking about a business dealing without a written agreement. No judgment zone here, but I just think it’s not a good idea. I understand that a lot of times, because of cultural influences or because of our own insecurity, if I ask that person to sign a contract, they might not like me, they might cancel the deal, or they might not go with me for this particular transaction.

Hey, I want to impress this client, so you know I want to show them I’m a person of action, and if I do the work first, I can always go back for the written agreement. Well, that’s not a good idea. From my many, many years of law practice, I can tell you that when you have a serious client coming in and retaining your services, they are expecting you to have a written agreement. With a written agreement, they think you are more professional, more trustworthy, more organized; and most important of all, they want to know what kind of transaction they have entered into with you.

photo-employment-contracts-300x204A contract is a legally binding agreement that spells out the rights and responsibilities of both parties. Employment contracts are becoming more common, especially as employers become more concerned with protecting their intellectual property and seek to channel any employment related disputes away from the courts and towards arbitration.

How far your business wants to take this is up to you. You could have all or none or your employees sign contracts or you may just target management or those whose departure may be particularly damaging to your operation if they decide to work for a competitor or start their own competing business.

On the plus side,

photo-Space-X-300x231A “whistleblower” is an employee who complains of something illegal or unethical internally, to the press or to a government agency and because of that suffers as a result. A lawsuit filed by such an employee, especially when it involves a business doing business with a government entity, can be highly damaging not only in legal costs and potential damages but because the negative light it casts on a company can disrupt relationships with current customers and make it more difficult to get new ones.

Space Exploration Technologies Corp. was cleared by a jury in state court in Los Angeles earlier this month, dismissing a claim by a former technician, Jason Blasdell, he was fired because he told his supervisors (and even company founder Elon Musk) technicians were being pressured by management to falsify test results for rocket and spacecraft parts, reports Bloomberg.

The company stated the plaintiff was fired for poor job performance and he didn’t actually complain of anything illegal or unethical. The company’s attorney argued that Blasdell never saw, performed or complained of unlawful testing and never communicated his concerns to federal authorities. The plaintiff allegedly lost his job because his job performance was unacceptable and fellow employees were worried about their safety because of him.

photo-printer-cartridges-225x300If you patent your product can you limit what your customer can do with it? Not so much says the U.S. Supreme Court in a decision released late last month. It involved a dispute over printer ink cartridges but this could be applied to any number of products. The end result is that patent holders, once their product is released into the market, can’t do much to control what purchasers and others do with it.

The case concerned Lexmark International, which sells printers in order to sell you much more profitable toner cartridges. The company can’t use patent law to stop companies from refilling and selling the cartridges, according to the decision.

Thanks to that ruling anyone who refurbishes, repairs or sells used products would now be protected from patent infringement claims. You also can’t be forced to buy supplies only from the original product source. The end result may be lower consumer prices for ink cartridges and perhaps other used products too.

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photo-PAGA-nondisclosure-lawsuit-300x212Though there’s only one Attorney General for the State of California under certain circumstances a state law allows a party to step into the Attorney General’s shoes and file a lawsuit. Current and former Google employees have filed suit under the statute to claim the company’s employee nondisclosure agreement is illegal.

The reason for the lawsuit is that another employee agreement forbids the use of class action lawsuits against Google, so plaintiffs turned to Plan B, the Private Attorneys General Act (PAGA), according to the Los Angeles Daily Journal. The law allows aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the State of California for Labor Code violations.

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