Articles Posted in Contracts

equitycrowdfundingEquity Crowdfunding – The Future of Investing?

While nearly everyone has heard of crowdfunding, the concept of equity crowdfunding is not as well known.  For those Chicago business owners that are new to this developing area, prior to May 2016, crowdfunding was available only to accredited investors or those with an annual income of at least $200,000 or a net worth of more than 1 million, not including the value of a primary residence. Although the 2012 federal Jumpstart Our Business Startups Act[1] (JOBS) provided for non-accredited investors, the Securities and Exchange Commission (SEC) did not authorize equity crowdfunding to begin until May 2016.

Since that time, Article III of the JOBS Act has seen 49 successful offerings with 11.5 million dollars committed according to a November 17, 2016, Forbes report[2] on the state of equity crowdfunding. While the report suggests that the large majority of startups are not yet using non-accredited crowdfunding under Title III, it is anticipated that equity investment platforms will see tremendous growth moving forward.

dental officeDentists face new problems with overtime for their employees.  The Fair Labor Standards Act[1] (FLSA) sets forth standards for both minimum wages and overtime pay as well as record keeping for businesses.  Whether your dental practice consists of two employees or a hundred employees spread across three office locations, federal law requires that all dental offices comply with FLSA overtime regulations by December 1, 2016.

Exempt Versus Non-Exempt Employees

In order to determine if you are in compliance with FLSA regulations, the first step is to review which employees are designated as exempt, and not owed overtime wages, versus non-exempt. FLSA rules establish three types of exempt employees[2] which are defined by an individual’s employment description rather than their job title including:

Bellas&Wachowski5starlawyersThis story starts in December 2008 when Utah resident John Palmer ordered a couple of small gifts for his wife from the online retailer KlearGear.com. When the items were never delivered, Palmer and his wife, Jennifer, repeatedly attempted to contact the KlearGear and finally reached a customer service representative. According to Jennifer, the CSR would not give her a straight answer about the missing merchandise, so she wrote a scathing review on Ripoff Report, an online consumer rights site.

And that appeared to be the end of the story. The Palmers did not lose any money since PayPal debits an account only after an order is shipped. But fast forward three years and an email appeared in John’s mailbox that ordered him to delete the review from Ripoff Report or pay $3,500 for violating the “non-disparagement clause” of the KlearGear’s terms of service.

The Palmers refused, so KlearGear sent the “debt” to a collection agency, causing a drop in the couple’s credit rating. The Palmers sued, pointing out that the non-disparagement clause was not a part of KlearGear’s TOS when the order was placed. (A little online sleuthing found that the clause was added to KlearGear’s web site in 2012, long after the attempted purchase.)

KlearGear made no response to the lawsuit and a federal court earlier this year issued a default judgment for the Palmers in the amount of $306,750. That, finally, seemed to get KlearGear’s attention.

An email from the company dated May 19, 2014, claimed that KlearGear was “never properly served under the Hague Convention,” and that disparagement clause was included in the terms of service when Palmer made his order. Apparently, it was just somewhere other than where people looked.* Continue reading