Month: September 2018

Are Your Trade Secrets Really Safe? 4 Steps To Safeguard Your Competitive Edge

Are Your Trade Secrets Really Safe? 4 Steps To Safeguard Your Competitive Edge

A trade secret is a piece of information which is confidential, can be legally protected, and gives your company a competitive edge.  Lots of the most famous examples involve recipes: the formula for Coca Cola, McDonald’s Big Mac “secret sauce”, or that Mrs. Field’s chocolate chip cookie recipe that caused such a legal stir in the 90s.  But you don’t need to be a food purveyor or a mega-corporation to have a unique approach that sets you apart from your competition—and if you can legally keep it a secret, you should.

Here are four steps you can take to keep trade secrets safe:

  1. Make a list: The first step in protecting trade secrets is knowing that you have them.  Look across your business and think about any types of information you possess that are both confidential and critical to your success.  Trade secrets could be product designs, customer lists, marketing plans, sales forecasts, or processes.  For software developers, proprietary code obviously needs protection and for restaurants and food stores, it’s the secret recipe.  Conduct a “trademark audit” to identify the information you have a legal right to keep private and wouldn’t want your competitors to find out.
  2. Stake your claim: Once you know what your trade secrets are, it’s essential to start treating them like secrets.  Stamp or watermark “confidential” on sensitive documents.  Get confidentiality and non-disclosure agreements in place with employees and vendors.   These will put the people who learn your secrets on notice not to usurp them and lay the basis for a legal claim, if necessary.
  3. Lock it up:  Take whatever steps are reasonably available to you to secure your trade secrets from access.  Digital files and systems should be encrypted and password protected. Physical files should be kept locked.  Establish rules around access to sensitive files.  If possible, use a badge system to control access to your facility and posted signs to designate areas where access is controlled.
  4. Train your troops:  Many disclosures of trade secrets are inadvertent slips by an employee who simply did not know better.  That may make it easier to forgive, but the negative impacts on your business are still there.  Prevent this with good training and education for your employees on what your company considers confidential and what employees’ obligations are.  Back the training up with strong written policies.  And when an employee leaves, take steps to shut down their access to your files and systems right away to ensure that your secrets don’t leave with them.

Whether your trade secret is a treasured family recipe, a brilliant string of code, or a closely guarded customer list, it won’t be a secret for long unless you are careful.  Taking the steps above is a great first step toward a solid trade secret strategy.  For even further assurances of security, consider retaining counsel for a professional security audit.  Business attorneys like us can be great partners in protecting your trade secrets and your business.

Independent Contractor or Employee: It’s Very Easy to Cross the Line

Independent Contractor or Employee: It’s Very Easy to Cross the Line

Many businesses prefer to hire independent contractors because there’s often less overhead and fewer expenses (i.e. taxes). However, classify an employee as an independent contractor and you’re in big trouble. Here’s how to legally differentiate between the two.

Who Controls the Worker?

This question is not always easy to answer.  According to the U.S. Internal Revenue Service (IRS), evidence of the degree of control and independence of a worker falls into three distinct categories:

  • Behavioral: Does the company control or have the right to control what the worker does and how she performs the job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? These include how the worker is paid, whether expenses are reimbursed, and who provides tools/supplies.
  • Type of Relationship: Are there written contracts or employee-type benefits such as a pension plan, insurance, sick pay, and vacation pay? Will the relationship continue indefinitely?  Is the work performed a key aspect of the business?

Let’s look at an example involving Jim, John, and Joan.  All three perform work for the ABC Repair Shop.

  • Jim works at the front desk, earns $10 per hour, works from 9am to 5pm and takes complete direction for all of his duties from his supervisor.
  • John is a mechanic, earns $15 per hour, takes some direction from his supervisor, but only works on an “on call” basis when needed, using the company’s tools.
  • Joan is a master mechanic, paid depending on the complexity of the job, “generally” works from 9am to 5pm, but decides which autos to work on, uses her own tools, and takes very little direction from her supervisor.

Who is an independent contractor and who is an employee?  Based on the information above, the answer is – it depends.

  • It’s likely that Jim is an employee as he takes all direction from his supervisor.
  • John could be an employee as he uses the company’s tools, but working on an on-call basis and only taking some direction from his supervisor makes his designation as an employee less certain.
  • Joan is likely an independent contractor as her rate is not fixed, she uses her own tools, and takes very little direction from her supervisor.

Keep in mind that any change in Jim’s, John’s, or Joan’s duties or relationships with ABC could alter their status.  According to the U.S. Department of Labor (DOL), misclassification of employees as independent contractors presents one of the most serious problems facing affected workers, employers, and the entire economy.

If the DOL finds that a worker has been misclassified and denied access to critical benefits and protections to which they are entitled such as the minimum wage, overtime compensation, family and medical leave, and unemployment insurance – it can enforce employers to pay, not only going forward, but retroactively as well.

Case in point?  Federal Express (FedEx) settled a long-running class action lawsuit with over 2,000 of its drivers.  The reason?  The DOL found that FedEx misclassified employees as independent contractors.  The result?  FedEx must create a $228 million fund to cover the claims.

Play it safe.  Discuss employee classification issues with our experienced business attorneys who can guide you in determining which classifications are correct for your situation.

Today We Honor Those We Will Never Forget

In honor of September 11th, a day that we will never forget, Intrepid Law is introducing a non-profit program to benefit current and past first responders.  Our new program offers free wills and other estate planning documents to first responders and or their spouses during the month of September.  Contact us for more information!

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Follow This 8 Point Plan When Starting Your New Business

Follow This 8 Point Plan When Starting Your New Business

Starting a new business can seem overwhelming – especially when you’re doing it alone.  Creating a business plan will allow you to refine incomplete ideas, address areas you may have not yet considered, create a map so you know what to do next, and increase credibility for bank loans or investor funding.

While you may think you’ve got your business concept down pat, turning the idea you wrote down on a napkin into reality isn’t as easy as it might appear and many people get so caught up on how to start the process that the business itself never materializes.

Following this solid eight-point plan, based on guidelines from the U.S. Small Business Administration (SBA), will help you get down to business, literally:

  1. Executive Summary. The executive summary is a snapshot of your business plan as a whole and touches on your company profile and goals.
  2. Company Description. The company description provides information on what you do, what differentiates your business from others, and the markets your business serves.
  3. Market Analysis. Before launching your business, it is essential for you to research the industry, market, and competitors. What’s working and what’s not working for your competitors? How will you distinguish yourself?  Is there anyone else in your market?  If not, there may not be money to be made.
  4. Organization & Management. Every business is structured differently, so it’s important to understand how your company will be organized and managed. What entity will you use? Who’s in charge of what, when?  What kind of business succession plan needs to be put in place?
  5. Service or Product Line. Tell the story about your product or service. Describe what you sell and how it will benefit your potential customers.
  6. Marketing & Sales. Describe how you plan to market your business and explain your general sales strategy.
  7. Funding Request. If you are seeking funding for your business, make sure to include everything asked for in the plan. Any omissions may put your request at the bottom of the pile, or worse yet, in the garbage can.
  8. Financial Projections. Providing financial projections to back up your funding request is critical. Find out what information you need to include in your financial projections for the bank or angel investor.

It’s likely that you may not even know the answers to these questions.  That’s okay. We can help you to refine your goals, map out your plan, and provide the kinds of details needed to make your venture a success.

Are You Prepared to Include the “Wow” Factor?

You may think your business plan is great; but don’t forget that most people think the same of their own business.  The Wow Factor becomes especially important when you’re all competing for funding.

Make sure your plan has a “Wow” factor by:

  • Explaining in very clear terms why your business plan is unique;
  • Being clear about what you have to offer that’s different from your competitors (skills, experiences, relationships, etc.); and
  • Defining how your business caters to a unique niche in the market, which areas are being ignored and what potential opportunities exist for your business going forward.

The bottom line is that you want to make your business plan stand out far above the rest – your plan needs to be well thought out, organized, and unique.  Even if you don’t need outside funding, complete the business plan so you have a road map and the knowledge that you haven’t missed an important consideration.

Let’s Continue This Conversation

If you’re not used to drafting business plans, the task may feel daunting and you may be tempted to jump ahead. Don’t. We’re happy to think through a strong business plan and make sure you have protections in place so that your business gets off to the right start. And, even if you’re already knee deep in your business, we’ll help you get all of your ducks in a row. Give us a call and get on our calendar.