crowdfunding-350lSmall investors in Illinois will soon be able to invest in start-up businesses in exchange for a piece of the action, but without some of the onerous oversight previously required by regulatory agencies. Signed by Governor Rauner in July, 2015 the Equity Crowdfunding Act (HB 3429) is a game changing piece of legislation that leverages the crowdfunding platform to the benefit of small investors and companies. Waiving many of the regulations that govern  traditional securities markets, Illinois’ intrastate crowdfunding law authorizes non-accredited investors (also known as “the little guys) to acquire equity in small business without all the red tape.

The law allows individuals with a net worth under $1,000,000 and annual incomes under $200,000 to contribute up to $5,000 per company in any given year. Creative business types will have access to capital that might been unavailable previously, broadening the choice of funding sources beyond the often burdensome small business loans offered by banks.

The law will also allow founders of startups to maintain tighter ownership control of their enterprise. Typically, venture capitalists who invest in new companies demand excessively large chunks of the business in return for their capital infusion. The Act opens doors to a broader lender base while creating the potential for a more even distribution of profits. In general the legislation should improve liquidity across the board.

trollIt’s almost never a compliment when someone is referred to as a troll, but in the case of patent extortionists, it is an accurate and richly deserved description. Patent trolls are technically called  “non-practicing entities” (NPE) or Patent Assertion Entities (PAEs), but these euphemisms provide only a dim definition of what they are all about. And they pose a unique challenge to small business owners.

Whatever you call them, they all have a common business model: they purchase patent rights with the intention of generating fees through sketchy lawsuits or the threat thereof.  The patents themselves are generally obscure, shaky or acquired from bankruptcy.  Virtually none of them have ever been deployed legitimately in the marketplace, but that is not the intention of the trollsters. Rather, these organizations exist to exploit weaknesses in the U.S. Patent Office and legal system to generate bogus licensing revenue from legitimate businesses.

Generally, patent trolls have no assets other than the patents they intend to “protect.” They manufacture nothing and render no services. Many of the acquired patents were granted due to the Patent and Trademark Office’s systemic failure to keep up with a rapidly changing world over the past 30 years.  Quite simply, the federal agency has lacked the resources to determine what is really an “invention” in the context of the onslaught of digital technology.  In particular, the class of business method patents that arose that have arisen since 1998 has proven to be a thorn in the side of honest commerce.

recording-policeIt is now legal in Illinois for citizens to record interactions with police without their consent, but it’s early in the game for too much celebration.

In 2014, the Illinois Supreme Court found the state’s strict eavesdropping law to be unconstitutional under the First Amendment (People v Clark).  Prior to that decision, Illinois had been an outlier among most states with regard to private citizens’ right to record law enforcement officials under any conditions. Most other states already allowed the taping of conversations with police or anyone else without obtaining all-parties’ consent or in most cases, without even letting them know they were being recorded.  But in Illinois, taping a conversation with a police officer without consent was a Class 1 felony with ten year prison potential.

Following that decision, it took a year for our state legislature to amend the Illinois Eavesdropping law, and now Illinois law gives citizens the right to record public conversations with police, arrests and other law enforcement activity without their consent.  720 ILCS 5/14-1 is an improvement.  Nothing promotes accountability like on the spot electronic documentation.

teen-drinkingThrowing a party while Mom and Dad are out is a venerable teenage pastime, often regarded as naughty but ultimately harmless behavior.  For philosophically permissive parents, allowing the kids to have a party while the parents are home is sometimes regarded as a better alternative than letting their offspring run wild in the streets. According to this school of thought, “at least we know where they are.”

Unfortunately, there is an almost unlimited potential for things to go south when teens and alcohol/ drugs mix, and parents can end up holding the bag financially. When drunk or high party-goers are released into the world, they could get arrested, or  cause damage to property, or injury to themselves or others. They may kill themselves or someone else.  If any of these things happen, the parents of the hosting teens may well be held legally and financially responsible, even if they had no knowledge of the festivities or the illegal consumption of substances.

Whether or not the owners of the home end up being held accountable depends on a number of factors, some of which aren’t immediately obvious.

pizza-delivery-w-textFor the last several years the issue of fair minimum wage rights has been front and center in an increasingly passionate public debate. Because it is perceived as a classic David and Goliath mismatch, it is tempting to assume that employers are automatically the bad guys. But, as the following discussion demonstrates, the topic of fair worker compensation can be complicated, both morally and legally.

Perhaps you have noted recent reports of two Fair Labor Standards Act (FLSA) class action lawsuits against Domino’s franchisees in Georgia and California. This is not the first labor related action against Domino’s franchisees, nor is it the first against pizza chains and other fast food store owners.  However, this one is a little different because it ties in a minimum wage action with the reimbursement of delivery drivers for their expenses. This fact makes the case less straightforward and shifts it into an interesting gray area. The strategy chosen by the plaintiff’s legal team also highlights the fact that legislative rules often seem designed to make justice harder to come by.

Filed by a pizza delivery driver in California, the lawsuit alleges that Hishmeh Enterprises, Inc. (the fifth largest Domino’s franchise owner in the country) deprived drivers of fair wages by imposing a faulty policy to determine reimbursement rates. The plaintiffs are not claiming that the store owners were failing to pay the federal $7.25/hour minimum wage for the hours they worked. They are instead asserting that the way in which the owners paid them for vehicle expenses subtracts “value” from their overall compensation and constitutes an FLSA violation.

power-of-attorney-downloadThe problem with traumatic injuries, accidents and medical emergencies is that they always seem to come unexpectedly. But there are steps that everyone can take to improve the odds that you can exert some element of control over future events, even in the worst of circumstances.

To that end, the State of Illinois has adopted a new Health Care Power of Attorney document that promises to be a boon to anyone seeking to manage their own fate in the event of a personal health crisis or accident. Technically known as an “advance directive”, the HCPOA goes into effect when a traumatic event renders you unable to make decisions on your own behalf. Similar to (but not the same as) a Living Will, the HCPOA provides legally binding emergency guidelines for your family or another designated representative.

A key component of the process is the selection of your trusted health care agent, as they may well become the most important person in your life should your life be on the line. The objective of the form is to communicate your emergency medical treatment parameters to your HCPOA-appointed agent, but the law nevertheless allows this individual to consent to or refuse medical interventions. They are also authorized to withdraw treatment if they understand that course to be consistent with your wishes.

shutterstock_143144308    In decisions involving two recent cases, the US Supreme Court has made subtle but important changes to the standards affecting retaliation and discrimination cases. By applying more stringent criteria in two areas, the Court has limited the ability of workers to file these types of lawsuits against business owners. The first criterion invokes a legally tricky principle called a “but for” causation standard and the second clarifies the definition of “supervisor.”

A complaining employee must establish what is known as a “but for” condition to satisfy the first criterion.  Specifically, the justices ruled that retaliation claims filed under Title VII of the Civil Rights Act of 1964 must be proven under this established legal principle. It is a term that lawyers are familiar with, but most business owners are not. In practice, it means that an act of discrimination – usually termination or demotion  –  must be shown to be contingent on a supervisor’s wish to retaliate against the employee.  By invoking this scenario, the plaintiff’s lawyer is compelled to convince a jury that the discriminatory action would not have taken place “but for” an conscious desire to punish or pay back the employee.  This concept is a little more accessible if we substitute the term “if it were not for” to replace “but for.”  For example, the supervisor would not have fired the employee if it were not for (but for) the supervisor’s desire for retribution against the employee for complaining about sexual harassment.

The second component of the ruling is more straightforward and involves redefining the term “supervisor” for purposes of discrimination cases.   In the case of University of Texas Southwestern Medical Center v. Nassar, the Court ruled that a supervisor is a person who has authority over the employee in the workplace, including the power to hire and fire.  More broadly, a supervisor has the power to hire, fire, promote, transfer or otherwise discipline an employee.  In that sense, the supervisor is a representative of the business ownership, who may be held legally accountable under the law.

fraud     In a world preoccupied with internet spam and phishing attacks, beware the old school scalawags who operate their rip-offs through the U.S. mail!  Like their online counterparts, they are trying to lighten your wallet by offering bogus products – in this case “corporate compliance” services.

When your business registers with the State of Illinois, your company information becomes part of the public record and is readily available through the Secretary of State’s public databases. There are good reasons for this requirement. For one, it is important for customers and vendors to be able to confirm that you are a legitimate business. It is also necessary for various branches of government to be able to verify the company’s ownership and officer structure for the purposes of regulation and revenue collection.

Unfortunately, your contact information is also easily accessible to anyone who wants to send you solicitations in the mail. And not everyone who sends you mail has your best interests in mind. Focusing primarily on new business registrations, a specialized type of shady dealer out there is lurking, waiting to offer you their “help” in complying with government regulations. These promotional mailings are creatively worded to panic you into spending money for spurious compliance services, usually for hefty fees.

facebook     The central tragedy of human existence is that our lives on the earthly plane are finite. Saint or sinner, the time must come when each of us departs this mortal coil.  But whether or not you believe in an afterlife, there is a higher power that dictates how one small slice of your legacy lives on – that power is Facebook.

As is the case with your other important assets and heirlooms, it now appears to be a key responsibility of your social media persona to arrange for a successor for your Facebook page.  Even if you have a legal executor for your “real world” estate, Facebook has recently determined that our state laws don’t apply to them and that you will need to name a manager to administer your page after your passing.   This Facebook as decreed.

Previous to this policy change, Facebook simply “memorialized” the pages of people who died when advised of their death. The deceased’s profile would be identified with a “Remembering” status, which allowed friends and visitors to share memories on the Timeline.  While family members could request that a page be taken down – a challenging process to be sure – they were not permitted to make any changes to the page.

tax-prep-fraudWhen you see a tv commercial for a paid tax preparation service that seems too good to be true, that may well be because it is too good to be true. Every year about this time, we are inundated with a tsunami of businesses that offer to ease the pain of tax season by guiding us through the fiscal anxiety season safely. Unfortunately, there is no shortage among them of predatory faux accounting firms whose real profession is to rip off people who are intimidated or overwhelmed by the tax filing process. Often backed by slick marketing and intense advertising, these “independent” tax preparers use hidden charges and add-on services to jack up prices for services that are unnecessary at best and illusory at worst.

Perhaps the most pervasive set piece of this dodgy business is the combo platter of a Refund Anticipation Loan (RAL) accompanied by the insinuation that Tax Preparer X has some sort of inside track to get you a larger refund. While an RAL may be of benefit to some taxpayers, they are the moral equivalent of a payday loan and generally come with high fees or interest rates. You may even get charged for the pre-paid card that contains your refund advance.

To pick off the low hanging fees, the purveyors of RALs are adept at leveraging taxpayers’ need for cash and the lingering distrust of electronic filing . But while the IRS may well take three to four weeks to send you your tax refund if you file by mail, it takes only a few days to get your refund if you file online.