Business Law Articles

‘Puffery’ on product label was okay, court says

A manufacturer isn’t allowed to make false or misleading statements in its advertising or on a product label. But in a recent case involving the Gerber baby food company, a California court ruled that claims made on its labels, while vague and open to interpretation, were not over the line. Gerber said on some of its labels that its products were “an excellent source” of various vitamins and minerals, that they provided “natural immune support” and

Read More »

Is a ‘letter of intent’ binding?

Businesspeople 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

Read More »

Beware of ‘off-the-shelf’ forms for background checks

A company can conduct background checks on job applicants, but there are strict federal laws governing how to go about getting applicants’ permission to do so. Increasingly, businesses are using “off-the-shelf” forms for this purpose, or are contracting with third-party vendors to set up an online job application process. The problem is that if the forms or the online services don’t comply with the letter of the law, the company itself may be on the hook.

Read More »

Businesses sued for disclosures of health care information

The federal law called HIPAA requires anyone who has access to medical information to keep it confidential. Businesses that violate the law can face penalties from the government. A big new threat, though, is that recently some courts have also started allowing people whose information was improperly disclosed to sue for damages in court. This is significant, because the HIPAA law applies not only to doctors and hospitals but also to businesses that have even occasional

Read More »

Does your insurance cover a data breach?

Given the rapid increase in data breaches – affecting not only Fortune 500 companies but smaller businesses as well – it’s worth checking whether your current insurance policy covers cyber losses. That’s especially true now that almost every state requires companies to notify customers if their data has been compromised. A growing number of insurers are now offering cyber-liability policies. These typically cover the costs of investigating a data breach and notifying customers, loss of business

Read More »

You may need a policy covering employees’ use of cloud storage

Employees are discovering that cloud storage services are a great way to access work-related data at home and on the road, and to collaborate with co-workers, especially those who work remotely. Unfortunately, they’re also a great way to make your confidential data insecure – which is why you may need a thoughtful policy covering their use. Cloud services allow a user to log into an account, upload documents or files, and then access or download them

Read More »

‘Crowdfunding’ businesses have obligations to investors

More and more start-up businesses are seeking funding on websites such as Kickstarter or Indiegogo, promising small rewards to individual investors in return for micro-contributions. These include the Veronica Mars movie, which raised millions of dollars by promising small contributors posters, DVDs and movie scripts, and a space telescope project that offered “space selfies.” But keep in mind that these promises are a legal obligation – so if you end up getting hundreds or even thousands

Read More »

Companies can’t force workers to accept ‘payroll cards’

Companies cannot require workers to receive payment of their wages via “payroll cards,” according to the federal Consumer Financial Protection Bureau. Payroll cards have become popular recently, especially in the retail and food service industries. But under federal law, a company can’t make the cards the exclusive way it offers to pay wages. State laws may impose further restrictions on the cards.

Read More »

You can be sued for interfering with someone else’s contract

If you sign a licensing agreement to sell someone else’s products, but that person already has an exclusive license with a third party to sell the same products, you could be legally on the hook. That’s a lesson that J.C. Penney learned the hard way, after it signed an agreement with Martha Stewart to sell a variety of her housewares in special dedicated sections of its stores. The problem was that Martha Stewart had previously signed

Read More »

Company not liable for employee who assaulted customer

A car dealership couldn’t be held liable in court for a salesman who sexually assaulted a customer, according to the Texas Court of Appeals. The customer had brought her car in for service and was waiting for a shuttle bus to take her home. The salesman offered to drive her home in his personal car, and she claimed that along the way, he made improper advances. The dealership immediately fired the salesman. The customer sued the

Read More »
Email us now
close slider