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Do You Have an Undisclosed Offshore Account?
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Through the Offshore Voluntary Disclosure Initiative (OVDI), the IRS is allowing holders of income in offshore accounts an opportunity to get current on tax returns to avoid the potentially harsh penalties that may come with IRS detection of accounts. This second opportunity comes with harsher penalties than the first offer, which ended October 15, 2009, but may still allow participants to avoid yet harsher punishments, such as criminal charges. This OVDI offering expires September 9, 2011. Extensions may be provided to some who have made a good faith effort to comply, but if you want to take advantage of this Initiative, you should act quickly. For more information on the OVDI click here. |
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E-Commerce Law Series - Online Jurisdiction
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An online presence for your business has become a virtual necessity. Most potential clients will at least do an internet search for you or your business name before making the final decision to use your services; the more pages you control that show up in that search, the better able you are to disseminate the information you want to represent you. With the expansive use of websites and online services also comes an increased market as more and more businesses offer their goods and services nationally, if not internationally, through those sites. Even relatively small, local operations can reach out to customers thousands of miles away, or, at the very least, still make a sale if one of those far-off customers happens to find their site.
The increasing ease of expanding your business' market online comes with increased uncertainty regarding the location of potential liabilities. If you are selling a product online in California, you have few ways of controlling (or incentives to control) whether that product will end up in Virginia. The next question becomes, what is the proper venue for resolving a dispute with this out-of-state, or even out-of-country, customer?
When the internet was still relatively new, the courts created a sliding scale to determine whether a business, by virtue of its website, was subject to the jurisdiction of a foreign state. This scale is based on the interactivity of your site, ranging from "passive" to "interactive". A passive website does little more than tell users who you are and how to contact you; it operates like a business card online. A truly passive website will have no interactive capabilities and will not subject its operator to jurisdiction wherever a visitor resides. When a relatively passive site begins to incorporate more interactive elements it becomes a "moderately interactive website," and may lead to jurisdiction in the visitors' forums depending on the level of repeat contacts with those states and whether the site was purposely meant to reach customers in those states. At the far end of the spectrum, are interactive sites, which allow visitors to purchase goods and services, make reservations, or perform other e-commerce tasks involving the exchange of information. Interactive sites will generally expose a business to jurisdiction in the state of the user.
In order to decrease potential liability in foreign jurisdictions, it is important for businesses and website operators to have comprehensive terms of service and terms of use for their sites that limit the manner and location for resolving disputes. These so-called "Choice of Forum" and "Choice of Law" provisions can dictate the state, and state law, that will be used for resolving conflicts, and even require mediation and/or arbitration in lieu of ordinary civil court proceedings.
It is worth noting that the use of a third-party site (one that you do not own or control) by an individual or business carries slightly different rules for exposure to foreign jurisdictions. If interactions with foreign states are random and attenuated, it is unlikely that the forum for a dispute will be in a foreign jurisdiction. For example, someone who sells products occasionally through eBay will not need to fly to the home state of their purchasers for ordinary disputes.
Please contact our office if you are interested in having website terms prepared or if you feel that your current terms need to be reviewed or updated.
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Employment Law F.A.Q.
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Q: What workplace postings do I, as an employer, need to have?
A: The California Department of Industrial Relations and the United States Department of Labor require all employers to display certain notices in areas where employees frequently go and can easily read the information. You can download or order postings for free here. Be careful to look for and post both the California and federally required workplace postings.
It is recommended that you periodically update your workplace postings as they are frequently updated. Changes have occurred in 2011, so if you have not updated yours this year, follow the link above to get in compliance!
Q: Can an employer terminate an employee based on their social media posts?
A: Yes, and No.
While many states, including California, are "at-will" employment states, and while some employee posts may be disparaging or derisive to their employers, terminating an employee for such posts may violate provisions of the National Labor Relations Act (NLRA), even in the absence of an employee union. Sections 7 and 8 of the NLRA outline specific protected employee conduct and prohibited employer actions that would interfere with such conduct. While not specifically drafted to include online speech, the National Labor Relations Board (NLRB) has interpreted these provisions to cover Facebook status updates, tweets on Twitter, and even private blogs.
In general, Sections 7 and 8 of the NLRA prohibit an employer from taking action against an employee who is engaged in "concerted activities," which include soliciting co-workers to start/join a union, discussing adverse working conditions or unfair labor practices, or otherwise bringing to light employer behavior against the public interests. "Concerted activity" occurs when an employee is engaged with coworkers, and not acting solely by and on behalf of himself. Concerted activity also includes "circumstances where individual employees seek to initiate or to induce or to prepare for group action" and where individual employees bring "truly group complaints" to management's attention. This protection afforded to an employee may be stripped where the content of the speech is particularly egregious or interferes in some way with the ordinary operations of an employer's business. This limitation, however, has been narrowly construed and it may be best to err on the side of caution when an employee's speech can arguably be considered "concerted activity."
Consider the following examples:
- An employee who was terminated for asking coworkers on Facebook whether they agreed with her assessment that one of their coworkers was performing poorly was determined to be engaged in concerted activities. Management terminated the employee for what it considered "cyber-bullying" and harassing behavior, but the NLRB found the fact that the post was made to solicit information for a meeting with management regarding the coworker who was the subject of the post to be dispositive for a determination of concerted behavior.
- An employer who terminated an employee for posting photos of an automotive sales event with comments criticizing the management's choice of refreshments was found to be in violation of the NLRA. While the employer argued that the photos and negative comments were disruptive to its business, the NLRB found evidence that the employee who posted the photos and comments on his personal Facebook account was actually posting representative comments that were shared among the employee's coworkers and thus constituted concerted activity.
- An employee who was found to have posted offensive and inappropriate comments on his Twitter account was not engaging in concerted activity because his comments did not relate to his employer's business or specific employment practices and because he was not representing the shared sentiment of his coworkers.
- An employee who was terminated for disparaging his employer's clientele and for revealing confidential accounting practices of the company was not protected by Sections 7 and 8 of the NLRA. The employee revealed the information during a discussion with a non-employee via Facebook. Although the posts did address the employee's job, and some of his coworkers were "friends" and thus able to view the post, none of those coworkers responded and the content of the discussion was considered a personal gripe and therefore not protected.
When determining whether an employee's conduct is actionable, it is worth noting that the response of other employees may be as important as the actual content of the post. If one employee were to post content that would be considered a personal gripe but receives responses from other employees who share in the sentiment, it is possible to find concerted activity among the employees. Ultimately, it is important to thoroughly analyze the content, the forum, and the response to any employee posting before deciding whether to discipline or fire that employee.
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What To Consider When Outsourcing
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Outsourcing certain aspects of your operation to foreign or domestic specialist companies can be a great way to reduce costs. As with all business transactions, however, it is important to plan for worst-case scenarios to ensure that you are protected. With outsourcing contracts typically dealing with multiple jurisdictions, and even foreign laws, the following issues can be extremely important factors in your negotiations:
1. What law will apply to the transaction? For out-of-state and foreign companies, are there any local labor, privacy, or tax laws that should be considered?
2. Where will disputes be resolved? Is one state or country's laws more favorable to one side or do either offer defenses or remedies not available in the other forum?
3. Will the parties submit to ordinary civil court or will mediation/arbitration be preferred to further reduce costs? For international contracts are any countries a party to an international agreement, such as the United Nations Commission on International Trade Law's Model Laws, that could affect your choice of forum for disputes?
4. What remedies will be available in the event of a breach and will enforcement of a judgment be an issue? Some countries have specific rules for the enforcement of foreign judgments, which can cause increased costs and difficulty for you.
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Sincerely,
WLF Lawyers
www.WLFLawyers.com
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About Us
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We are a full service boutique law firm with hourly rates starting as low as $175. Our attorneys provide attentive service to you and your business; we strive to add value to your company in addition to legal advice.
Our offices are located in Glendale and Century City, California and are convenient for all of the Greater Los Angeles area. We are also able to work with clients throughout California because many of our services may be provided without in-person meetings.
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Our Practice Areas |
Did you know WLF Lawyers is a full-service business law firm? Our practice areas include:
*Drafting and Negotiating Contracts;
*Intellectual Property;
*Business Formations;
*Non-Profit and Mutual Benefit Entities;
*Estate Planning;
*Asset Protection;
*Litigation;
*Trademark Trial and Appeal Board Cases;
*Entertainment Law;
*Investments and Securities;
*General Business Services;
*Restaurant Law;
*Franchise Law;
*Collections;
*Gambling and Gaming;
*Internet and E-commerce;
*Privacy;
*and Employment Law. Contact us anytime at (818) 649-7805 or click here to contact us.
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Disclaimer
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This email and its contents do not constitute or contain legal advice. Information is posted for educational purposes and as a means of providing a frame of reference for those considering seeking legal representation. Nothing associated with this email creates an attorney-client relationship. Nothing posted or submitted (including by email) as a reply or comment to any post will be considered private or confidential information.
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