Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

April 1st is an annual event that Americans do love, but of course, there are those who take the pranks too far. If employees don’t know where the line is drawn on gags, the dreaded “T” word might come up…torts!

Mark Toth’s “guidelines” are particularly helpful in determining where funny turns into economically dangerous:

“Pranks that involve any of the following should never be allowed:
* race, gender or other protected or physical characteristic
* threats
* physical contact, including ingestion of unwelcome odors or substances
* weapons (even toy ones) or other potentially dangerous objects/substances
* damage to property or a person’s reputation
* interference with a person’s ability to do his/her job”

No, I’m not kidding. Bullying is not just for junior and senior high. John Philips notes that we should expect legislation on workplace bullying in the near future because of the pervasive nature of the problem. The trend has begun in Wisconsin (starting with the schools).

The reality is that (1) bullying hurts morale and productivity and (2) there is a likelihood it could cost your company dearly now and in the future. As with most business legal matters, prevention is preferable to cure - lesson: if you know you have a bully (or are one), act now.

It looks like commercial bankruptcies are on the rise, according to Richard Feferman. The commercial credit market is not eager to hand out funds and Uncle Sam is sticking his hand in the mess. As with any hostile market, yesterday (or six months ago) was a good time to tighten the belt and re-evaluate business plans, but today is still a good time to do the same.

Grant Griffiths, Home Office Lawyer/Warrior extraordinaire, has a great post on how blogging can boost your business. Blogging requires one to exercise some restraint and wisdom regarding what gets posted, but the overall benefits are huge.

I think points 3 & 6 are incredibly important and accurate:

“3. Search engines love blogs and they love them because blogs are easily updated. This is a key to blogs and blogging. Because a blog is designed to be easily updated, you will update it with new, relevant content to your target market. If you can write an email, you can update and post to a blog. New, relevant content is key. Not just content, but relevant content.”

If you have a fantastic product or service to sing about, do it! Tell the world about your Purple Cow with a blog!

Even after posting a bit on the matter of e-discovery, I think that further clarification as to what the business owner really needs to do regarding the relationship between litigation and digital information is in order. Thankfully, RenewData has provided me (and you) with a handy little booklet on the practical aspects of e-discovery. Just fill out the form and you’ll get your free copy in a few weeks.

While I am certainly not stumping for RenewData’s services (I have not used them and so cannot attest to the quality), I can say this book skillfully reveals the abstract nature and intimidating scale of e-discovery. Specifically, the book outlines some of the various locations data can be found (such as PDA’s and flash drives) and the so-called “technobabble” that business owners may hear coming from tech folks handling e-discovery materials.

One also finds general recommendations on how to prepare digital information, on a daily basis, for potential litigation - I believe that the sections addressing anticipatory preparation of digital information are the most important. Ensuring that your digital materials are properly labeled, filed, and backed-up with regularity will save an untold amount of money should litigation erupt and you will sleep better at night knowing that you are prepared. Much of this preparation can be automated, further reducing the front-end costs.

I am a moderately geeky attorney and I learned quite a bit from this book. Business owners ranging from sole proprietors to corporate executives could benefit from this wisdom. I recommend ordering your free copy today and educating yourself on some quality CYA information.

Small businesses have to leverage each dollar spent to maximize return and software is often one of the major expenditures. Traditionally, software was based on the individual computer or on a server. For example, Microsoft Word is installed on each individual computer in the company and creates documents on that specific computer. Things have changed. Software as a Service (SaaS) is showing its might in areas ranging from document creation to customer relationship management. Examples include Google Docs, 37signals tools, and Linked-In.

There is no doubt these tools are useful, mainly because they are affordable (or free), there are no pure setup costs, and software downtime is rare. Instead of paying for a license per computer, you can buy access based on the number of users, usually totally a far cheaper pricetag. Many companies that offer SaaS have developed simple and easily understood graphical user interfaces - drag-n-drop, tabs with obvious names, and other tools. These are great reasons to use SaaS and I agree, they are compelling. Nothing sounds better than using software that appears to level the playing field by a wide margin between small business and behemoth corporations.

However, there are some downsides to consider and they are quite real and quite problematic for small companies. One is the matter of proprietary and confidential information. Almost anything can be considered proprietary (client lists, schematics, etc); the same applies to confidential information. Does your SaaS provider have quality security? Do they also effectively back up whatever information you’ve given them? Is there any way for you to do an independent backup for your information (aside from paper printoffs)?

What happens if there is a billing tiff? And the SaaS company cuts you off from your information?Any service agreement needs to be examined closely with a mind for these matters.

Another issue is the customization capability of SaaS. Most vanilla modification abilities are available, but what if you need to cater software to extremely specific uses? The other side of this issue is that money saved on basic services can be reallocated to area-specific and customizable software.

Finally, one area that should probably be avoided for SaaS is the company’s financials. It is very much in your best interest to maintain ownership of your financial and economic information.

The moral here: evaluate SaaS for your own needs. If the service fits and you trust the provider and the agreement, by all means use it.

John Phillips at The Word on Employment blog explains, with simplicity, the difference between and independent contractor and an employee.

It is absolutely imperative that an employer understand the differences because the tax implications are massive. Mere agreements labeling a person or business as an “independent contractor” is far from sufficient. As Mr. Phillips simply states, “The fact that you have an “independent contractor agreement” with the worker isn’t determinative. If a worker is doing what other employees do, he/she is likely to be an employee irrespective of an agreement that says otherwise. If the worker performs work only for you, as opposed to performing work for multiple companies, he/she is likely to be an employee. ”

IRS tools provided in the article can be found here, here, and here.

Y Combinator and The Business Association of Stanford Entrepreneurial Students are sponsoring a Startup School for programmers out there eager to make their mark on the business world.

Y Combinator is a venture capital firm specializing in tech/web funding and based in both San Francisco and Cambridge, MA. I learned about them when they started up and they have certainly grown in size and influence since then. The Business Association of Stanford Entrepreneurial Students is a Stanford student group dedicated to boots-on-the-ground approaches to business creation.

If you are really into technology and startups, you’ll notice that Mark Zuckerberg graces the School’s homepage, hinting at the kinds of minds and attitudes the School hopes to assist. Marc Andreesen is set to speak at the event, hearkening back to the days of Netscape domination in the browser wars (and my first appreciation of just how cool the web could be). Also, David Heinemeier Hansson, a partner at 37Signals, a company that produces tools many business currently use for project management, client/customer management, and real-time chatting.

If you can justify the associated costs (the School itself is free), I would highly recommend attending - you could discover your funding angel or meet your future business partner.

Hat tip - Ryan Roberts at The Startup Lawyer

Once again, Rush Nigut has found some nifty information on the web for entrepreneurs. I particularly like his point about payroll taxes: pay them on time or they come out of your pocket, not your company’s.

Yes, requests for admissions are what they sound like - questions designed to get a party to absolutely admit or repudiate a fact (which can be an event, a statement, a time, a location, etc). It is always beneficial to a party of a lawsuit to “pin” the opposing party to a fixed position on a fact. After all, if you get your opponent to commit to a position in written discovery, it makes it very hard for them to change their story down the road and you also get the benefit of knowing where the opposing party stands with some certainty. Such a tactic comes in handy when your attorney wants to lay what is called a foundation for documents or other evidence. A foundation is testimony or other evidence that allows the court to admit other evidence, much like a concrete foundation supports a house. A foundation laid through well-drafted admissions gets other evidence in faster and with less effort.

To narrow our definition down further, requests for admissions address two very specific needs: one is to eliminate an element of a cause of action from trial; the other (and opposite) is to show the court that a given issue is very much in dispute and thus fit for trial.

I can break down these two concepts into more manageable bites. A cause of action is the legal theory behind a lawsuit (ex: breach of contract). Each cause of action is constructed of elements, as a cake is made of ingredients - however, in most cases, each element must be proven by facts. To eliminate one element is to “kill” the cause of action and that part of the lawsuit is kicked out of court. You can see why admissions can have a profound impact on your case. On the flipside, admission of certain facts confirms that a dispute exists between the parties and the lawsuit remains alive. This scenario avoids what is called summary judgment, meaning that no dispute as to the facts of the case exists and the judge can apply the law to facts as they stand, resulting in no need for a trial.

The most important concept for you, as a litigant, to understand is that once you admit to something via a request for admissions, that factual matter is definitively settled. The only exception is when the court allows you to withdraw and admission, which is rare.

As with interrogatories, you have a limited time to answer and return requests for admission. By now, you probably realize you will need to handle requests for admission with your attorney. Each response, with your assistance, will be meticulously drafted to stay in line with the litigation strategy and to spot any objectionable requests. Your attorney will also inform you that the tactic of “I don’t recall” that worked with depositions and interrogatories will not be allowed with requests for admission - you either admit or deny, there is no middle ground and there are no qualified answers.

Admissions can kill your case, or get the case resolved in your favor, as fast as any single discovery device. Close work with your attorney will pay handsomely.

Next up is our final topic: inspections of documents, places, and things.