Business Law Articles

Tips when evaluating cyber-insurance policies

Cyber-insurance policies cover business liability for a data breach in which customer information (such as social security or credit data) is exposed or stolen by a hacker. Such policies may also cover data breaches due to employee error or malfeasance.

Depending on the policy, this insurance can cover a range of expenses associated with data breaches, including notification costs, credit monitoring, costs to defend legal claims, fines and penalties, and other applicable losses. [Read more…]

When you should mediate a legal dispute

If your business is involved in a legal dispute, you may voluntarily agree or be required to participate in mediation.  Mediation is an alternative way of setting disputes that involves negotiation with support from a neutral third-party.

Typically, mediation involves key decision makers from each party as well as their legal counsel. The mediator begins by leading the parties through a confidential review of the situation at hand. Then, depending on the nature of the conflict, the mediator may place each party in separate rooms and act as a go-between to facilitate a jointly-agreeable resolution. [Read more…]

How to shield your website or app from copycats

They say that imitation is the sincerest form of flattery. That’s all well and good if someone copies your new outfit. But imitation is a whole other issue when it comes to online innovation.

Let’s say you’ve just come up with a new online business idea and you’re convinced it has the potential to be the next big market disrupter, like Uber or Airbnb. Can you patent the website, app or software? The unhappy answer is that it depends. [Read more…]

Safeguard trade secrets

Your company’s proprietary information is your secret sauce. It’s what makes your company distinct and competitive in the market. Yet too few businesses put real time and attention into protecting this valuable information.

If information is stolen and you choose to pursue legal measures, you have an obligation to show that you took reasonable steps to protect your proprietary data. But this kind of litigation can be a slow process that may never really compensate you for your loss.  So don’t wait for your confidential information to walk out the door. Take action now by making a small but continued investment in protecting your business’s trade secrets. [Read more…]

Protect your business idea before you patent

The patent process is lengthy, complicated and expensive. So how can an inventor or small business owner move forward with an innovation? Eventually you’re going to have to share your idea with someone who will help develop it, manufacture it, or otherwise bring it to market. Here are three legal tools you can use, with assistance from an attorney: [Read more…]

FTC targets gaming influencers in first official enforcement action

The FTC is continuing its scrutiny of social media influencers who fail to disclose paid endorsements and other compensatory arrangements. In September of this year, the FTC took its first law enforcement action, settling charges with YouTube broadcasters Trevor Martin and Thomas Cassell, known on their channels as “TmarTn” and “Syndicate.”

Martin and Cassell were charged with using their platforms to deceptively endorse CSGO Lotto by failing to disclose they were joint owners of the online betting service, and with allegedly paying other influencers to promote the site without requiring disclosures. [Read more…]

Congress kills arbitration rule

Financial institutions can continue to block customers from banding together in class-action lawsuits, thanks to Congress’ decision to kill a pending arbitration regulation.

The Consumer Financial Protection Bureau’s (CFPB) “arbitration rule,” which would have barred companies from including forced-arbitration clauses in financial contracts such as credit card agreements and car loans, was slated to take effect in March 2018. The House passed a resolution repealing the regulation in July of 2017, followed by the Senate in late October.  [Read more…]

OSHA delaying employer filing deadline

There’s good news for employers required to electronically file injury and illness data with OSHA: You had until Dec. 1, 2017, to comply.

The rule became effective Jan. 1, 2017, with an initial requirement that employers electronically file the information by July 1, 2017. However, given the agency’s inability as of May 2017 to accept electronic submissions of injury and illness logs, OSHA has now formally proposed extending the filing deadline until Dec. 1. It also appears that OSHA is reconsidering the entire rule, which it may even modify or revoke prior to the proposed Dec. 1 filing date.

Disclosing sponsorships now easier on Instagram

Whether you accept or give sponsorships tied to Instagram posts, Instagram is making an effort to make the disclosure process easier.

The social media network is now testing and considering for widespread use allowing users to tag a brand within posts. If the brand confirms the relationship, the post will then be marked as an ad with a “paid partnership with [brand name]” tag at the top.

The Federal Trade Commission recently called out Instagram in particular in a flurry of letters reiterating that influencers and marketers must clearly disclose their relationships to comply with the agency’s Endorsement Guides. The agency noted that endorsements need to be disclosed near the top of posts so that consumers who view posts in their streams or on mobile devices will see the disclosure without having to click “more.” [Read more…]

What to avoid when signing an office lease

Unforeseen costs can crush a business that opts to sign an office lease without legal counsel. From initial construction costs to later capital improvements, the list of potential hidden costs is long and adds up quickly.

To avoid the possibility of paying several large bills down the line, ask your lawyer to help you negotiate a fair lease up front that covers the following, as necessary: a landlord-performed buildout, a tenant-performed buildout, operating expenses and end-of-lease condition.

Landlord-performed buildout

If the landlord is performing demolition and/or construction at the space you are planning to lease, crucial details need to be ironed out in advance and put in writing, including the nature and scope of the construction, a procedure for preparing and approving plans and specifications, the construction schedule and the approval of contractors. [Read more…]

Must websites accommodate blind users?

Just because the Department of Justice does not yet have new website accessibility rules for places of public accommodation doesn’t mean businesses hosting websites aren’t already at risk.

Blind or visually impaired plaintiffs have been filing federal lawsuits against companies over the accessibility of their websites, although they’re meeting with different results.

A federal judge in Florida recently handed down a verdict in the case of Gil v. Winn-Dixie Stores, Inc., finding that Winn-Dixie had violated Title III of the Americans with Disabilities Act by having a website that could not be used by the blind plaintiff. [Read more…]

Beware pitfalls of cloud contracts

Think it’s just your business’ data being stored in the cloud these days? Think again. Some (or all) of the provisions of your contract with your cloud provider also may be “floating,” and can thus be changed at any time, often without notice to you.

How is this possible? Part of the blame rests with the modern-day trend of simplified contracts that include some brief general terms and conditions hyperlinked to online terms that can change at any time.

Typically, these contracts are presented on an as-is basis, and built-in protections, including service levels, generally provide only basic protection. Businesses then have little to no ability to terminate the agreement, even if key terms — including support obligations, service levels, service descriptions and performance standards — change to their disadvantage. Such key terms can change at any time, generally without notice. [Read more…]

Court decision muddies the waters for ‘safe harbor’ for user-generated online posts

A recent decision from a federal appeals court in California will likely have broad implications on what screening procedures, if any, a service provider adopts for user-generated posts and material.

The case, which is called Mavrix Photographs LLC v. LiveJournal Inc., limits the availability of safe harbor protection for social media platforms and other sites that use moderators to review user-submitted posts, even when the website has processes in place for expeditiously removing materials identified in takedown notices under the federal Digital Millennium Copyright Act.

Safe harbor protection can shield you from liability for the copyright infringements of your site’s users if you establish effective notice-and-takedown procedures and promptly remove content when you’ve been notified it is infringing. [Read more…]

Is a patent enough? How to protect your intellectual property

You had a great idea and you started a business around it. Now, you need to protect that intellectual property.

First, check to be sure that your idea is original. Conduct patent and trademark searches early in the development of new products and processes to make sure there isn’t anyone else already protecting the same ideas or concepts.

If you do have an original, patentable idea, go ahead and file a patent application. Filing an initial patent application gives you time to develop or sell your idea, complete market research and/or raise money. [Read more…]

Traditional office vs. co-working space: Which is right for your business?

Collaborative work environments with shared spaces are an increasingly popular take on traditional office space, but can come with less than ideal leasing terms.

Most co-working spaces operate using an occupation license agreement that allows members to use the space for a particular purpose or set of purposes. But it is much easier for a landlord to revoke a licensee’s right of access to than it is to evict a tenant.

A commercial leasing agreement for traditional office space provides tenants more rights and a greater level of security. Such leases can be overly restrictive for startup operations planning to grow quickly, however. Those with smaller teams and budgetary constraints may benefit from the collaborative environment and reduced costs a shared space can provide. [Read more…]

Cybersecurity essentials for small to mid-size businesses

A strong cybersecurity program is designed to protect the confidentiality, integrity and availability of a business’s information systems. These systems can include any computer or networked electronic system used by a business, and certain sensitive business and consumer information.

Programs should be designed to perform three primary functions:

  • Identify and assess threats and risks;
  • Protect information systems and sensitive information from malicious use and unauthorized access; and
  • Detect, respond to and recover from cybersecurity “events” such as breaches.

[Read more…]

Know the risks associated with using targeted advertising for your business

Many companies employ third-party advertising services that use online consumer data and automated software to place advertisements on websites, in apps and within user-generated video services.

But this wide-reaching marketing tool comes with the risk that your advertisement and brand could be displayed alongside offensive content. Third-party targeted advertising services, such as AdSense from Google and Bing Advertising from Microsoft, offer the ability to exclude targeted ads from pornographic or gambling sites. But beyond that it is difficult to prevent your ad from appearing on a website that you would prefer not be associated with your business. Many times, when an advertising service identifies a user that matches the intended audience of the advertisement, the user will see the advertisement even on offensive sites.

The rise of fake news sites further complicates matters, as new sites are created every day in an effort to reap advertising revenue. In one recent example of the challenges this presents, Allstate saw one of its ads appear next to an article denying the occurrence of the Sandy Hook school shooting on a fake news site. [Read more…]

Take care with COBRA compliance — or pay big damages

In recent months, at least four companies have gotten into trouble for failing to provide Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) notices to health plan participants.

Suits of this nature can lead to big damages. Since 2015, courts have approved settlements ranging from $290,000 to $1 million.

Damages include statutory penalties of $110 per day, awards to qualified beneficiaries as relief for damages that occur due to the failure to provide an adequate COBRA notice, and attorney fees. The IRS can also assess excise tax penalties of up to $200 per day for each day that a plan fails to comply with COBRA. [Read more…]

Tips for avoiding a data security breach

Regardless of the size of your business, it’s critical that you work proactively to protect the sensitive and private information of your customers, clients and employees.

While you might hear more often about data breaches at bigger companies, the reality is that smaller companies and organizations are often targeted and typically have limited data security protections in place.

Your approach to protecting your company from a data breach must be comprehensive. [Read more…]

New law reaffirms right to post negative reviews online

Under a new federal law, individuals have a right to post truthful negative reviews about a product or service provider. That’s the case even if they previously signed an agreement that prohibited such reviews.

Over the past few years, this controversial business practice of including non-disparagement clauses in contracts or terms of service has led to a number of lawsuits. These so-called “gag clauses” are intended to deter customers from writing negative reviews, and require them to pay a fee if they do so despite the contract.

The new Consumer Review Freedom Act bars companies from using these clauses.  It gives the Federal Trade Commission and the states the power to enforce the law, allowing them to take legal action against businesses that fail to remove these clauses from their contracts.   [Read more…]

Conduct a website self-audit to ensure compliance with the ADA

Over the past couple of years, more than 200 plaintiffs have sued businesses nationwide arguing that their websites fail to provide access to people with certain disabilities, alleging a violation of the Americans with Disabilities Act. More recently, a law firm based in Pittsburgh sent demand letters to businesses, banks and others saying that they were willing to “work constructively” toward compliance for a fee.

While court rulings on whether the ADA applies to websites have been mixed, plaintiffs have been using the rulings in their favor to persuade businesses to settle.

The ADA, which went into effect in 1990, prohibits discrimination against people with disabilities. Title III of the Act prohibits discrimination on the basis of disability in “places of public accommodation.” The law doesn’t specifically mention websites, but some plaintiffs argue that a website should be treated as a “place of public accommodation.”   [Read more…]

Social media endorsements: How to pay influencers to endorse your brand

It’s becoming popular for companies to pay social media users with big followings to endorse their products or share content about their brand. It’s a great way to get your message out to a wider network of target customers in an authentic way.

But the Federal Trade Commission (FTC) is paying attention and enforcing rules that say you can’t do it without disclosing the relationship.

Recently, the FTC reached settlements with such brands as Lord & Taylor and Warner Bros. Home Entertainment over their failure to disclose such relationships. [Read more…]

Many requests for businesses to take goods off Amazon or eBay fraudulent

It’s pretty common for businesses of all sizes to sell products on sites like Amazon or eBay.

So imagine one day receiving a “take-down notice” informing you that the site is taking down your listings because another party has demanded it under a federal law called the Digital Millennium Copyright Act (“DMCA”). According to the notice, the other party says your goods infringe its copyrights.

If you ever receive such a notice, be sure to look carefully into the matter. That’s because it’s become more common for these demands to have no valid copyright infringement claim to back them. Or worse yet, sometimes the demander doesn’t own any copyrights at all. [Read more…]

Injury and illness records may become public

Most businesses with 10 or more employees must keep records of serious work-related injuries and illnesses. This OSHA rule is intended to help businesses identify and address occupational hazards.

Under new OSHA rules, however, many businesses will also have to submit their records to OSHA itself, which apparently plans to make them public, at least in some form.

Businesses with 20 or more workers must begin submitting OSHA Form 300A starting July 1, 2017. In addition, businesses with 250 or more workers must begin submitting OSHA Forms 300 and 301 starting July 1, 2018. Starting in 2019, all information must be submitted by March 2. [Read more…]

Can you sue if a customer posts a bad online review?

For a business, a bad online review can help determine whether new clients flock in the door.

But if someone writes such a review on Yelp or any other website, you might be out of luck.

In a recent case in California, a federal appeals court decided that an angry business owner who got a one-star rating from a customer couldn’t sue Yelp. [Read more…]

Review your retaliation policies in light of EEOC guidance

It’s even easier for employees and former employees to sue businesses for retaliation under the Equal Employment Opportunity Commission’s new enforcement guidance.

For the first time since 1998, the agency has updated its guidance on the claim, which is already “asserted in nearly 45 percent of all charges … and is the most frequently alleged basis of discrimination,” it said.

Needless to say, preventing a claim is much better than defending one, and retaliation often occurs even when the underlying discrimination claim doesn’t have merit. So businesses must take action to avoid retaliation in the first place. [Read more…]

Could your business be facing a lawsuit over Internet search results?

Any business would jump at the chance to dictate the order of organic Internet search results that include its name. But that’s not so easy.

Still, a judge in Florida recently told a well-known, international company that it must find a way to do exactly that. And in the vast world of the web, it’s a cautionary tale for businesses of all sizes.

The case involves a Gainesville, Fla., company, Uber Promotions, which has a regional trademark that supersedes the more well-known ride-sharing service’s trademark. [Read more…]

Drug testing policies may need to be revised

If you have a policy that requires drug testing after a workplace accident or injury, you may need to change it as a result of new rules issued by OSHA.

The new rules generally require that companies have a reporting procedure in place for work-related injuries and illnesses, and prohibit them from discouraging workers from reporting injuries. The catch is that, according to OSHA, a policy that requires drug testing after a workplace accident could discourage workers from reporting accidents in the first place.

To be clear, OSHA is not saying that you can never give a drug test after a mishap. But to justify a test, two things must be true: [Read more…]

What happens to unused ‘flexible spending’ funds?

Many companies have flexible spending accounts that allow employees to pay health care and dependent care expenses with pre-tax dollars. The biggest drawback to these accounts is that they’re “use it or lose it” – so if employees put money into an FSA and don’t spend all of it on qualified expenses during that calendar year, they forfeit the remainder.

So what happens to the money they forfeit?

The short answer is that the business can simply keep it. However, if a business wants to ease the burden on employees and make the FSA a more attractive benefit, there are several other options allowed under the tax laws: [Read more…]

Many computer ‘hacks’ are actually low-tech thefts

All businesses are scared these days of having their data stolen by highly sophisticated foreign computer experts – and yet a surprisingly large number of “hacks” are actually very low-tech affairs, carried out by people with minimal computer skills. The good news is that some simple measures can reduce the risk.

According to a study by the Ponemon Institute, the vast majority of CEOs view sophisticated intentional hacking as the biggest data security problem they face. The vast majority of IT managers, on the other hand, see the biggest threat as careless employees who haven’t received basic security training about phishing, passwords, cloud access, and the like.

To take one example, you might have heard that a St. Louis Cardinals baseball team employee was recently sentenced to jail for hacking into the computer secrets of a rival team, the Houston Astros. But you might not know exactly how he did it.

[Read more…]

Federal penalties are increasing dramatically

The maximum penalties that can be imposed on businesses by federal agencies are being dramatically increased, as a result of a new law passed by Congress.

OSHA’s civil penalties hadn’t increased since 1990, but that changed on August 1, 2016, when they jumped roughly 80%. The top penalty for a serious OSHA violation went from $7,000 to $12,471, and the top penalty for a willful or repeated violation went from $70,000 to $124,709.

What’s more, if an employer was inspected before August 1, but OSHA didn’t issue a citation until after August 1, OSHA can issue a penalty at the new higher rate. Since OSHA has six months from the date of a violation to issue a citation, it’s expected that a lot of companies that were inspected in the first part of 2016 will see large penalties assessed after August 1. [Read more…]

New law protects trade secrets

President Obama has signed a new federal law that expands the ability of companies to sue when someone steals or misuses a trade secret.

The law also contains new requirements for employment contracts that refer to trade secrets – which means that many such agreements should now be revised.

The “Defend Trade Secrets Act,” or DTSA, will change the legal landscape by making misuse of trade secrets a federal issue, comparable to patent, trademark and copyright infringement.

[Read more…]

Must you disclose notes from an HR investigation?

An employee complains about discrimination or harassment, and you conduct an investigation. The employee is still unhappy and sues. Can you be forced to turn over all your notes from the investigation as part of the court case?

The answer is not always clear – and it’s an important issue you should be aware of.

As a general rule, any relevant documents that are created in the normal course of business are fair game to be turned over in a lawsuit. That includes documents that are created as part of a routine investigation by human resources personnel. [Read more…]

Government steps up audits of health care privacy

The federal government has begun a much more intensive program of auditing health care providers for violations of HIPAA, the federal law that protects patients’ privacy.

For the first time, the government will be auditing not only health care providers but also related businesses to whom patients’ information might be disclosed – including third-party administrators, accountants, attorneys, consultants, clearinghouses, transcriptionists and pharmacy benefits managers.

For this reason, it’s important for all providers to understand the relevant obligations and take steps to minimize risks – and make sure their vendors do so as well. [Read more…]

Employee gets away with keeping confidential info

Anthony Leness was an executive at a company called EventMonitor. His contract stated that he couldn’t disclose confidential information and that he would return all such information if he left the company.

After six years, Leness was terminated. Shortly afterward, the company discovered that he had subscribed to an online data storage service and had uploaded a large number of the company’s files to the service, including confidential data.

The company changed the status of his termination to “for cause,” and cut off his severance payments. [Read more…]

‘Tip pools’ are limited by federal law

Businesses can require their tipped employees to participate in “tip pools,” in which they contribute all their tips to a pot and then share them according to some formula.

As a general rule, a tip pool can only include employees who regularly receive tips. So for instance, a restaurant can require all its waiters to share tips among themselves, but it can’t require them to share their tips with prep cooks and dishwashers.

You should also know that a business can pay its tipped employees less than the federal minimum wage, as long as the employee makes at least the federal minimum once tips are taken into account. [Read more…]

New threats to online retailers

As more and more companies sell things online, especially to far-flung customers, it can be difficult to keep track of the ever-changing legal rules that apply. Here’s a look at just some of the issues on the horizon that online retailers should be aware of:

Is your website accessible to the disabled? You might be surprised at the idea that the federal Americans With Disabilities Act applies to online stores, but the U.S. Department of Justice has taken the position that it does, and is planning to issue rules soon for how retailers should comply.

It’s likely the government will soon require retail websites to do some or all of the following: [Read more…]

What business entertainment expenses are deductible?

As a general rule, you can deduct 50% of what you spend on business entertainment on your federal taxes. Although the IRS is very strict about requiring you to document the expenses and their business purpose, it can be surprisingly generous about what counts as a business expense. [Read more…]

Businesses can’t agree not to ‘poach’ employees

It might be tempting to informally agree with other business owners in a niche field not to poach one another’s employees, but it’s illegal – and recently, some businesses have paid a high price.

For example, the Department of Justice went after several tech companies that allegedly had an informal “no-poach” understanding. The employees themselves then filed a class action, which resulted in a $415 million settlement. [Read more…]

New rules are resulting in faster union elections

Many businesses have predicted that new federal rules that took effect last year could result in “quickie” union elections in which the employer wouldn’t have time to campaign effectively and get its message across. It now looks like those fears might be justified – the average time before a private-sector union election is now only three weeks, compared to five weeks previously, according to the National Labor Relations Board. [Read more…]

Beware of trademark scams

The U.S. Patent and Trademark Office has put its records online, including trademark owners’ full addresses. As a result, many shady but official-sounding businesses are now contacting trademark owners and offering scam services.

For instance, such businesses may offer to arrange third-party publication (which is unnecessary), or they may offer legitimate services such as filing a record with the Customs Office at exorbitant prices.

The most dangerous scams offer to renew a trademark registration without properly updating the declarations as to identification and use. Trademarks that are renewed in this manner may later turn out to be invalid, and may be cancelled or successfully challenged by competitors. [Read more…]

Managers’ ability to keep investigations secret is limited

Can a company that conducts an internal investigation tell the employees it’s interviewing not to talk about the matter while the inquiry is pending?

Not necessarily, according to a new decision by the National Labor Relations Board. The ruling applies to all businesses, regardless of whether they have a union.

Companies can insist on confidentiality only if certain conditions are met, the Board said. [Read more…]

Creating an LLC? What you need to know

Many business owners think it’s easy to set up an LLC. That’s partly the result of companies and websites that claim to offer simple, “standardized” LLC operating agreements. Just fill in the blanks and you’re off!

In reality, there’s no such thing as a “standard” LLC operating agreement. You have a lot of choices to make, and even if you’re starting a very simple business, your choices will have a profound effect on you down the road if the business takes off. [Read more…]

Federal lawsuits might become less burdensome

“Discovery” is the phase of a lawsuit before trial in which the two sides have a right to demand relevant information from each other. Sometimes, big companies suing little companies try to “bury” the little company with endless requests for information, hoping to find some stray helpful tidbit or simply pressure the little company to settle to avoid the burden and expense.

But starting in 2016, the federal court rules have been changed to limit this tactic. The rules now say that discovery must be “proportional” to the needs of the case – taking into account the issues, the amount of money at stake, the importance of the information, the parties’ resources, and the burden involved.

This could make it easier to convince a court (at least in a federal case) that the other side’s endless requests for information are out of proportion and should be stopped.

When is a competitor’s name too similar to yours?

This can be a tricky question, because it often turns on whether the public is likely to actually be confused.

In one recent case, a California company called White Oak Vineyard & Winery brought a lawsuit against a Florida vodka distiller called White Oak Spirits.

The vodka company argued that wine and vodka are different products, and that no one would be confused by the two names, especially since White Oak Vineyard was not a nationally known brand. [Read more…]

Federal contractors must provide paid sick leave

Starting in 2017, companies that have federal contracts must allow employees to earn up to seven paid sick days per year, under an executive order signed by President Obama.

Employees can earn one sick day for each 30 hours worked, up to seven days per year. These days carry over from one year to the next, although an employee who quits or is fired without using them doesn’t have to be compensated for them.

Sick leave can be taken for an employee’s own illness, or to take care of a sick family member. It can also be used to deal with domestic violence, stalking or assault. [Read more…]

Business gets salary back from ‘disloyal’ employee

Did you know that executives and other employees may have a legal obligation to be “loyal” to their companies? This means that they have to act in the company’s interest, and not deliberately harm the company or take advantage of it for their own interest.

This came up in a recent New Jersey case where a timeshare company hired a COO who made $500,000 a year.

The company eventually fired the COO, claiming that he had exposed the company to potential liability by forging timeshare owners’ signatures on legal documents, misrepresenting the status of independent contractors, and sexually harassing two women. [Read more…]

Company can’t require workers to buy its merchandise

The Abercrombie & Fitch clothing chain cannot require its salespeople to buy and wear Abercrombie & Fitch clothes in order to work there, says a federal court in California.

The court okayed a class-action lawsuit on behalf of 62,000 Abercrombie employees in the state, based on the claim that the company’s “look policy” required them to buy Abercrombie clothes – and then buy new Abercrombie clothes every time the company issued a new sales guide.

The “look policy” did contain a disclaimer saying that “Abercrombie employees are not required to purchase Abercrombie clothing.” But the workers who brought the lawsuit claimed that this disclaimer was ignored in practice, and that salespeople who didn’t wear Abercrombie clothes were fired, given reduced hours, or sent home to change. [Read more…]

Clicking or e-mailing can create a binding contract

A New York company ran a loan-application website. As part of the application process, users had to click a box to get from one screen to the next. Above the box it said, “Clicking the box below constitutes your acceptance of … the borrower registration agreement.”

The borrower registration agreement wasn’t on the page, but the words “borrower registration agreement” were a hyperlink to another page that included the complete contract. In fine print, the contract said that disappointed borrowers couldn’t sue in court and had to take all claims to arbitration.

Was this binding? [Read more…]

Here’s a problem with employee arbitration clauses

A software company called TIBCO tried to protect itself by including a non-compete clause in its employment agreements. It also required that any disputes over the employment relationship go to arbitration rather than being tried in court.

When an employee left to work for a competitor, TIBCO filed a lawsuit and asked for an emergency injunction so it could immediately stop the employee from competing against it.

But the court said – surprise! – that it couldn’t issue an injunction because, under the terms of the company’s own contract,  the dispute had to go to arbitration. [Read more…]