Business Startup

Many Startups Are (Unintentionally) Breaking These Wage Laws

Since most startups don’t have a large reserve of cash during their early days, it is common for startups to compensate founders and early employees solely with equity. While this allows startups to conserve what little cash they have, this practice could ultimately be very costly for the company if it runs afoul of wage laws. In today’s post, we discuss various ways that startups may expose themselves (and in some cases their founders, directors, and officers) to liability for violating wage laws, and some steps companies can take to limit that liability.

While the attorneys in our firm do not practice employment law specifically, we come across these issues frequently when working with startups and think it is something founders...

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Mergers & Acquisitions

Business Purchase and Sale: Considering Employees

One of the most important parts of a business is the people doing the day-to-day work. When looking into purchasing a business, it’s important to identify and understand the needs and rights of key employees, review existing employment agreements, and consider any employment related successor liability issues that may come up as part of the transaction. We’re continuing our series on the Purchase and Sale of a Business by highlighting important employee related considerations when purchasing a business.

Identifying (and Locking Up) Key Employees

Does the business you’re purchasing rely heavily on a few key employees? Especially for service-based businesses that rely heavily on relationships, these key employees can be one of the most valuable assets for the business. Making sure you...

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Business Startup

Employer Trends in Parental Leave Policies

We’ve been reading the business news surrounding companies increasing the parental leave they offer their employees. In today’s blog post, we take a more in depth review of the trend locally, discuss what businesses can expect in the future, and remind employers to understand applicable law before developing their parental leave policy.

Parental Leave in the News

Washington tech giants Microsoft, Amazon, and Zillow have recently announced plans to increase their parental leave. Microsoft now offers 12 weeks of fully paid parental benefits to all new mothers and fathers. Amazon also introduced a revamped parental leave policy. Amazon will offer birth mothers up to 20 weeks of leave. Amazon has also introduced a shared leave program; employees whose partners do not receive parental leave...

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Business Startup

Uber Driver Is An Employee According to California

The California Labor Commission recently ruled that a San Francisco Uber driver is an employee, not an independent contractor. This ruling, which came to light last Tuesday when Uber filed an appeal, could have major ramifications. The debate over whether on-demand laborers should be classified as employees or independent contractors has been going on for a few years now fueled by the explosive growth of companies such as Uber and Lyft. And regulators in different states are sure to look at this ruling when they have to make a decision on the issue.

The case that was before the California Labor Commission involves a San Francisco driver, Barbara Ann Berwick, who worked for Uber from July to September 2014. She had...

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Contracts

Brewery Law 101: Key Contracts for Breweries

We continue our Brewery Law 101 series by exploring some key contracts to consider when opening a brewery. Below we’ve highlighted a few key contracts for breweries. These agreements are importnat to have in place and understand in order to keep your brewery as protected as possible.

Commercial Lease Agreements

When you get to the point that it is no longer feasible to brew batches of beer in your basement, backyard, or garage, it’s time to begin exploring a commercial space to house your operations. Some important considerations (among others) to sort out as you begin hunting for the right space include: how large of a space do you need? Will you operate a tasting room or just brew beer to distribute...

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Intellectual Property

Purchase and Sale of a Business: Intellectual Property Considerations

We’re continuing our series on the purchase and sale of a business with a look into intellectual property considerations when purchasing a business. Intellectual property is a large part of many companies’ value. Failing to sort out potential restrictions on the use and further development of a company’s IP may leave the buyer with a significantly less valuable company than it anticipated. Below are some of the major intellectual property considerations to have in mind when you purchase a business:

Ownership of and Right to Use the IP

The first hurdle, and perhaps the most important consideration when reviewing a target company’s intellectual property rights, is confirming that it owns, or at least has a valid license for, all of the key...

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Business Startup

What Your Business Should Know About the New $15/hour Seattle Minimum Wage

Earlier this month, the City of Seattle passed an ordinance that established a $15 minimum wage for employees working in Seattle. In this post, we’ll breakdown the details of the new local law, so you have a basic understanding of how it will affect your business. 

When does the new law take effect?

The ordinance will take effect on April 1, 2015.

How does it affect your Seattle business?

The ordinance provides generally that Seattle businesses must provide their workers with a minimum wage of $15 per hour. In terms of implementation, the ordinance treats certain employers differently, with “Schedule 1 Employer” and “Schedule 2 Employer” designations. Schedule 1 Employers are those who employ more than 500 employees. Schedule 2 Employers are those who...

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Business Startup

Washington Social Media Law: New Regulations Your Business May Not “Like”

The Washington social media law landscape changed recently with the passage of a new bill aimed at protecting employees from social media overreach. The new Washington “Social Media Statute” (RCW 49.44.200) presents a few challenges for businesses and entrepreneurs, especially those that may want to gain access to an employee’s personal or a “contested” social media account.  The statute adds new regulations that make it significantly more difficult to monitor an employee or applicant’s personal social media activity. Employers should understand their obligations under this new statute, and what it means for their social media policies.

Prohibited Activities

The statute makes it unlawful for an employer to “request, require, or otherwise coerce an employee or applicant to disclose login information for the...

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Business Startup

Contingent Contracts: a Valuable Tool When Negotiating Agreements

When you are negotiating an agreement, there are all sorts of ways contract discussions can break down. Often when negotiations become difficult, a contingent contract is a compromise that can lead to a mutually beneficial resolution.

What Is a Contingent Contract?

A contingent contract is an agreement in which the parties to the contract agree to different obligations depending on a future event. A common example is a non-discretionary performance bonus for an employee or manager. A simple provision awarding a non-discretionary bonus might look something like:

If Company Sells X number of units or more of Product Y in 2014, Employee will receive an additional $100,000 in compensation, payable on March 1st, 2015.

In this example, the Company agrees to provide the Employee...

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Business Startup

Why Do Startup Companies Use Vesting Schedules for Founders?

As a startup founder, you’ve probably heard that your startup’s shares should be subject to a vesting schedule. You may not know why a vesting schedule is important when issuing startup founders’ shares. Today’s post highlights some of the major reasons why a vesting schedule makes sense for most startup companies, including why investors prefer investing in companies that use vesting schedules when issuing stock to the founders.

An  example of why startup companies use vesting schedules for founders Suppose ABC Company was founded by John and Jane. ABC has created a new crowdfunding portal where investors can invest in businesses online. ABC raised a small friends and family round of investment to help launch the company. John and Jane have been...

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