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Is Your Business Ready For ICE?

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Last week, federal and local law enforcement raided a construction site in Tallahassee looking for immigrants who are in the country illegally. The video was stunning as law enforcement dressed in military-like uniforms pulled more than 100 workers off the job site.

Until recently, such raids of businesses were rare in Florida unless the business was blatantly abusing the immigration system. Yes, there have always been audits and other tools to ensure state and federal statutes were enforced, but large, public displays of immigration officials entering businesses are relatively new

As these types of raids increase, it’s vital that your business understands what is required of you under immigration laws and what will be needed to be done if immigration officials show up at your business unexpectedly.

Much like any crisis planning for your business, you hope you never have to use such a plan, but if you do, being prepared will make a difference in the worst-case scenario.

If your business is in Orlando, Altamonte Springs, Seminole County Winter Garden, Kissimmee or all of Central Florida, the attorneys at The Orlando Law Group can help put together the plans and policies to ensure your business stays within your legal rights, along with working to help lessen the impact if you are approached by immigration officials.

 Make sure you are handling the onboarding of employees correctly

The first step of any immigration issue is to ensure you have taken all the proper steps in onboarding any new employee.

For all businesses, this includes having any new employee fill out the form I-9, where the employee verifies they are a citizen of the United States or have the legal right to work in the United States.

The I-9 process is fairly simple, but it requires the employee to provide one or two forms of identification from a long list of documents. Indeed has a great list found here. These records must be kept on file, as they will be needed if your business is ever audited.

It is also our recommendation that any documentation with I-9 forms be kept in separate files from the rest of the employee files. This allows them to be easily accessed in case of an audit, but also does not risk other employee information being provided if not requested by a warrant.

In Florida, for many businesses, there is an additional step – using the federal E-Verify system. If your business has 25 or more employees, is a public entity or contracts with a public entity, you are required to use the system found here.

According to the Florida Department of Revenue, an employee is defined as an individual filling a permanent position who performs labor or services under the control or direction of an employer that has the power or right to control and direct the employee in the material details of how the work is to be performed in exchange for salary, wages, or other remuneration.

The term “employee” does not include:

  • An individual hired for casual labor that is to be performed entirely within a private residence
  • An independent contractor, as defined in federal laws or regulations, hired to perform a specified portion of labor or services

You can find more information on what the state of Florida requires on its E-Verify fact sheet.

ICE may still come to your door

 Despite all the efforts you make to follow the law, there is no guarantee that immigration enforcement won’t come to your business to check your immigration status. For instance, officials may have uncovered that some of the identification documents provided by the employee were fraudulent, causing a visit by law enforcement.

When that happens, it is important that you have developed a plan and have shared this plan with all employees. While it certainly will be scary – that’s part of the intention of the raid – you and your employees have rights provided under the Constitution.

There are several key terms to understand that you will need to know.

First, if they are asking to review your I-9 documentation and have the proper paperwork for an audit, you have three days to comply and provide your records to immigration. In that case, take the audit request and let them know you will deliver the records to them in the proper timeframe.

Second, if they are pushing to enter the building or your office, you must allow them to enter any area where the public is admitted.

For a restaurant, that means agents can enter the seating area or any other areas where guests are allowed to go. If you are in an office, that means they can come in the front lobby – if you allow anyone to come in that entrance.

They cannot enter private areas where the public is not allowed.

For instance, a hotel must allow immigration officials into the lobby, bar or hallways, but they do not have to be let into the laundry room or the maintenance shed or the executive offices.

One simple step to take in this regard is to put up “Employees Only” or “No Public Allowed” on those areas.

If immigration officials try to say they can enter a private area, it is important that employees stand firm, requesting to see the warrant that allows them to enter private areas.

Understand the difference between a judicial warrant and an administrative warrant

When dealing with immigration issues, not all warrants are equal, however, law enforcement has no legal obligation to clarify the types of warrants. If they say they have a warrant and you let them in, you have given them consent.

The warrant that most people think of when it comes to warrants is a judicial warrant. That’s when law enforcement appears before an impartial judge and presents evidence of a potential crime and the need for a warrant.

When law enforcement shows a judicial warrant, your business is required to let them go wherever they would like.

To make sure it is a judicial warrant, look for two things: A signature from a judge and a court listed on the top of the warrant.

If neither of those is on the paperwork, it is an administrative warrant, and the immigration officials are only allowed to be in public areas.

Administrative warrants are focused on the individual who is accused of being in the United States illegally. They are not always administered by a “neutral and detached” magistrate, as there are fifty-two immigration officer categories expressly authorized to issue arrest warrants for immigration violations, as well as “other duly authorized officers or employees of the Department of Homeland Security or the United States who are delegated the authority.”

Therefore, an administrative warrant does not allow the same access to private areas. An administrative warrant is identifiable by being issued by an immigration officer/federal agency, and/or will be found on a form I-205 or I-200.

It is not as easy to get a judicial warrant as it is an administrative warrant, but law enforcement has no obligation to explain the difference to you.

That’s why the first step when any law enforcement, including immigration officials, comes to your business that you call your attorney, who can review any documents and help instruct you on your rights.

If the immigration officials ask questions or try to push an employee, it is important that the employees are trained to say they are not authorized to speak to law enforcement or immigration officials and nothing else.

It is also important to record with video any interaction with immigration officials. Stay back from the officials, let them know you are recording and do not interfere. This is part of the documentation process. And everything should be documented in this case.

Finally, you are under no obligation to help immigration officials. So, if they ask for John Doe employee, you are not required to get the employee or share that they are there if they are in a private area of the business.

Why interfere with law enforcement actions at all?

To be clear, under no circumstances should any employee block law enforcement. Hopefully, the agents will work with the employees and follow applicable rules, although there have been instances recently where law enforcement is not been cooperative.

If they refuse or are moving toward a target because of a triggering event, the employee needs to let them proceed and allow the attorney to look at any protection or future action.

Remember, any immigration enforcement actions could result in significant legal actions against your business. The construction company that was raided by ICE is now undergoing a federal investigation into its employment practices. And, if you don’t follow the law, resulting in a wrongful detention of one of your employees, you could be subject to a lawsuit.

The attorneys at The Orlando Law Group can help your business prepare for any business law or immigration law, including ICE raids in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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The Ins and Outs of Contracting

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We enter into contracts all the time for business and personal reasons. Whether it is a purchase of a ticket to an event or the purchase of a house, almost everything we purchase involves a contract.

Think about this.

How many times have you clicked to accept the “terms and conditions” of a purchase online? Pretty much every time you buy something on the internet, right? By clicking that you accept them, you are entering into a contract with the seller of that product or service.

There is an important reason why companies always ask you to approve the terms and conditions.

It doesn’t matter whether or not you are entering into a relationship with a customer, with a vendor or an independent contractor; contracts are a fact of business. Contracts serve as legally valid agreements that protect your interests.

The attorneys at The Orlando Law Group can help any business looking to create or review their contracts to make sure they are binding and cover all of the important topics needed for business contracts.

What Makes A Contract Great?

Generally, to be legally valid, most contracts must contain two elements:

  1. All parties must agree about an offer made by one party and accepted by the other.
  2. Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.

The point when two parties agree can be a little fuzzy.

For example, many businesses will put a standard contract template before an independent contractor and expect it to be signed without any discussion. At that point – and the law is clear on this – a legal contract exists only when one party makes an offer and the other accepts all terms of that offer.

In this example, the contractor is still free to rebut any of the points in the contract and make a counteroffer, until an agreement has been reached.

Offers are rarely accepted immediately and further discussions or amendments may be required. Unless the offer has a deadline for acceptance, it can remain open.

In addition to ensuring both parties agree on the terms of an offer, the second element that ensures a contract is legally valid is that both parties exchange something of value.  This is important since it differentiates a contract from being a one-sided statement or even a gift.

“Something of value” can be as simple as a promise to perform certain services by one party while the other party agrees to pay a fee for the work performed.

Most business transactions are based on this exchange of promises. However, the act of doing the work can also satisfy the exchange of value rule. For example, if you contract with a vendor to provide you X and Y, but you decide you need to add Z to the final deliverable, the vendor can create a binding contract by actually doing Z – something which you can’t object to if you change your mind.

Include an expiration date on any offer and counteroffer

It’s good practice to include an expiration date for any offer or counteroffer during contract negotiations to ensure you have time to maneuver should you wish to change the terms or revoke the offer before a certain date.

Offers that are subject to an expiration date – known as option agreements – are typically price-driven or allow the buyer to mull the decision without fear of losing out to a competing buyer.

It’s important to understand that a seller can place a fee on option agreements. For example, if you decide to give a buyer 30 days to think over a purchase, you can charge for that. This typically occurs when the product or service is of high value or when the seller pledges not to sell that product to another customer during that 30-day option period.

Likewise, a seller can’t revoke the offer until that 30-day period ends.

The Keys to Every Good Contract!

Business contracts are comprised of several key elements. These elements are included to make sure that all of the contents of the contract are legally binding.

The key business contract elements also help to prevent misunderstandings that could occur if they were omitted.

The key elements of a business contact are:

  • The parties. The contract must clearly and specifically identify the parties to the agreement. If one of the parties is a corporation or other business entity, that must be stated. The roles of the parties must also be specified, indicating who is the seller and who is the buyer. One party is usually the business that is paying for a product or service. An owner or manager typically includes her name in the payee spot. The other party is the service company or supplier. Each party must be giving something of value in return for receiving something of value, which is legally known as mutual consideration.
  • The agreement. Legally called the consideration, the agreement could be only a sentence or two in length. It includes a general statement of what the service or product provider is expected to do for the buyer. The agreement also indicates whether other parties are expected to complete part of the work.
  • More detailed information about the deal is included in the terms section of the business contract. This section spells out exactly what services or products are expected from the company doing the work. The terms section also includes the price, details of the payment, the length of the contract and when the services or products will be delivered. Some business contracts also include special terms, such as whether the contract can be canceled for any particular reason. For example, contracts that violate public policy or are not signed voluntarily are voidable, according to “Reference for Business” online. Special terms of a business contract also can indicate whether the buying party may transfer the contract to someone else.
  • The date.The date usually appears in at least two areas: within the contract where both parties entered their names or business names and next to each party’s signatures. A date also might appear at the top of the contract, indicating when the contract was created. Businesses or lawyers who create business contracts usually include the date the transaction takes place at the top of the contract.
  • The business contract must be signed by both parties. This indicates that the buyer accepts the payment conditions, and the seller agrees to complete the work. The parties must document their consent to the terms and clauses of the contract by means of a signature. In the case of a business entity, this often requires the placement of the entity’s official seal on the contract. This is all referred to legally as the contract execution. Sometimes the contract execution will also be witnessed as indicated by the seal of a third-party notary.

Have You Developed a Form Contract?

A lot of times, people use form contracts, which have the language and terms already set. Parties usually do not negotiate when using form contracts.

Landlord/tenant agreements are a common example of when form contracts are used.

You can also use a form contract as a model when drafting a more customized contract. Pay attention to the details, define any words that could be misconstrued, or any terms that are ambiguous, be specific.

When drafting a contract, clarifying the terms and duties should be the goal. Make sure to carefully review the terms of the contract so you are aware of your responsibilities.

Some key items to come up with your form of contract are:

  • Get sample contracts of what other people do in the industry, you don’t need to re-invent a contract.
  • Make sure you have an experienced business lawyer doing the drafting, one that already has good forms to start with.
  • Make sure you make it look like a standard form pre-printed contract with typeface and font size.
  • Don’t make it so ridiculously long that the other side will throw up their hands when they see it.
  • Make sure you have clearly spelled out pricing, when payment is due, and what penalties or interest are owed if payment isn’t made.
  • Try to limit warranties when possible for products and services.
  • Include limitations on your liability if the product or service doesn’t meet expectations.
  • Include a “force majeure” clause relieving you from breach if unforeseen events occur.
  • Include a clause on how disputes will be resolved. Our preference is for confidential binding arbitration in front of one arbitrator.

While the form contract is standard, it does not prevent customization when needed. Every contract can be tailored to be more favorable to one side or the other.

You can start with your form of contract, and your clients can agree and sign or request changes be made. Working with a lawyer who is experienced with the right wording to use, can save you a lot of time and money in the long run.

Other steps to finalizing a contract

In some cases, like when you agree to the terms and conditions, signing a contract is fairly easy. After all, you can’t negotiate your service agreement with Netflix.

Here are some other issues to watch for when developing and negotiating contracts.

  • While negotiating contracts, make certain you are comfortable with your proposed duties and obligations. Make your intentions, requirements and expectations of the other party clear at the beginning of negotiations. And, as a safeguard, remember to negotiate for a remedy within the contract if there is a breach by either of the parties.
  • Many parties use legalese, legal words and language, when drafting contracts. This can make the terms and obligations of the contract confusing. Use regular language when possible, to ensure that both parties understand what the contract says and means.
  • Contract negotiations, especially important financial contracts, can be grueling. An attorney can help you with negotiations, making sure that your needs and requirements will be met. Also, a lawyer can help you with the initial and final draft and contract review, and explain to you your duties under the contract. An attorney is there to look out for your best interests throughout the entire contract process.

Don’t forget the most critical step!

Before you sign any contract, read it. Make sure you know what your stated obligations are under the contract. If you are uncertain as to your duties, and you sign the contract, you may be liable for breaching the contract.

It’s a good idea to have a lawyer review the contract terms to ensure that your needs will be met and that you will not obligate yourself unexpectedly.

Yes, even those terms and agreements need to be read. We recently experienced one of those types of contracts that had an obligation to pay a monthly fee for 12 months in the terms and conditions, several pages down.

While that could be considered a deceptive business practice, if you read the contract, you would have seen that clause.

The attorneys at The Orlando Law Group can help your business with any contract needs as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Business Ownership Information is Not Dead for Foreign-Reporting Companies

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Over the past couple of years, businesses have been in limbo when it comes to filing their business ownership information with the federal government. Their owners have watched as courts flip-flopped over the constitutionality of requiring businesses to share their ownership information with the government.

This weekend, the U.S. Treasury Department announced a final verdict for businesses that should give some relief for those who were waiting to file.

In its announcement, the Treasury Department declared that it would not enforce any fines or punishments listed in the law for any U.S. citizen or domestic-based companies. Instead, the agency will be engaging in a rulemaking initiative to narrow the scope to foreign-reporting companies.

That means the vast majority of small businesses do not have to file their BOI paperwork, but for the 25,000 or so foreign-reporting companies registered in Florida, you still are on the hook.

The attorneys at The Orlando Law Group can help businesses determine if they are required to file their Beneficial Ownership Information and file all the required documents for you.

What is the Beneficial Ownership Information?

As a recap of the issue, privately owned small businesses, for the most part, do not have to file any sort of public disclosures in the way that companies listed on a stock exchange must do every quarter.

Unfortunately, too many criminals are using fake companies for money laundering and other crimes. It is very difficult to track criminal activity without a subpoena.

That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.

Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses were going to be required to file additional information with the government because of criminals.

Who was required to file Beneficial Ownership Information?

In the Corporate Transparency Act, small businesses with fewer than 20 employees and annual revenues of less than $5 million were required to file. Yes, there were some exemptions like companies in the investment and financial realms. Most organizations that file as a 501(c) with the IRS were exempt. And large businesses were exempt.

For businesses with one LLC, the issue wasn’t very problematic, but for businesses that have multiple LLCs, such as a real estate firm that owns multiple properties or a restaurant group with each location a separate entity, this could have meant filing a separate Beneficial Ownership Information for each one!

What happened if a business did not report its Beneficial Ownership Information?

Remember from our first article on this issue, the penalties for not filing were harsh. According to the federal government:

“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

This was not like filing with the State of Florida, where the fine is relatively small for not filing. This was an effort of the Financial Crimes Enforcement Network division of the United States Treasury. It was scary.

What Happens Now?

It is not unexpected that the Trump Administration was going to eliminate the need for small businesses to file their BOI information. After all, one of the key aspects of their campaign was to eliminate regulations on businesses.

So, if your LLCs are based in the United States, the law still says you need to file, but there is no repercussion for not doing so. As such, we are recommending our clients to not take any action.

If you are a foreign-reporting company, you will still be waiting for the Treasury Department to make its final rule, but you should be prepared to act sometime in 2025 or 2026, as it appears once rulemaking is finished, you will be required to submit your BOI.

That means, if you are using the Cayman Islands or some other location as a headquarters for tax advantages or are just an office of a foreign-based company, you will probably need to file at some point.

We say “some point” because rulemaking is a process that takes a long time, often longer than a year. In the process, the agency will ask for comments and possibly hold public hearings, looking for thoughts on how it should adjust or implement a proposed rule.

This does give an opportunity for business owners who are affected to share why they shouldn’t be required to file. While you may not think the agency will listen, they often do.

The attorneys at The Orlando Law Group can help your businesses prepare for this requirement as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Make Sure Your Business is Protected After a Cyberattack

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In today’s high-tech world, businesses are often at the mercy of cybercriminals. Every day, hundreds of thousands of attacks on businesses are launched to do everything from steal company secrets, demand money, find concealed data, or just be disruptive.

There is not a business that is immune to these attacks and even the most tech-savvy companies and people can find themselves on the wrong side of a cyberattack.

There are many ways to help reduce the likelihood of some sort of cyberattack, and the number of companies that offer protection is endless, but criminals will find a way around these steps eventually.

At The Orlando Law Group, our goal is to ensure you take the steps before and after a cyber-attack to reduce your legal liability to your customers and vendors. Our attorneys specialize in helping businesses with all types of legal issues facing them, including cybersecurity recovery.

What Can Happen?  

The types of business scams using technology continue to increase and evade those companies fighting cybercrime.

For instance, just a few months ago, two of Central Florida’s most trusted institutions were hit by cyber-attacks.

At the University of Central Florida, an accountant received a notice from a vendor that their bank account had changed and that all payments needed to be sent to another bank. The university complied and sent the money to the new account not realizing the vendor’s email was hacked.

Once the money was received, the cybercriminals launched a “spam bomb” designed to overwhelm the email system to delay the discovery of the attack. It worked and the issue was not fully revealed for 12 days – and after $105,000 went missing.

Right after that, the non-profit OneBlood was attacked, and all systems were shut down until the organization was to pay a ransom. The organization eventually stopped the attack, but not before switching to manual systems to send blood to more than 220 hospitals. The attack also resulted in the data of thousands of donors to be compromised.

These are not isolated cases. The same criminals who attacked OneBlood have also attacked Rite-Aid, The Florida Department of Health and many others.

What types of scams are there?

Quite frankly, the types of online scams that are being used by criminals continue to evolve and get harder and harder to spot. With the improvements in artificial intelligence and virtual reality, it can be nearly impossible to detect a scam.

Here are a few of the ways that criminals are preying on their victims.

  • AI-driven phishing emails – Phishing emails have been a way of life for users of email since the days of AOL. However, in the past, the emails were usually poorly written or just didn’t sound like the person sending them. Today, criminals are using AI to copy the voice and writing style of the person they are using. They scour social media with technology to compile the email, making it sound like you are truly talking to your customer or vendor.
  • Deepfake impersonation scams – Today’s technology can almost perfectly imitate an individual with video and/or voice. This technology fooled a tremendous number of voters with a robocall sounding like President Joe Biden during the election, but that’s just one example. There are now deepfakes of a company’s CEO being sent to employees with fraudulent requests – like making a GoFundMe donation for a coworker – that work too often.
  • QR code phishing (aka “quishing”) – Remember when we all stopped putting thumb drives in our computers? We’re getting to that point with QR codes now that they are being used for nearly all advertising and marketing. However, a legitimate-looking QR code could send you to a criminal’s website, giving access to all of your files and information connected to your smartphone. For many businesses, this is just about every file they own.
  • Fake invoice and billing scams – This type of scam has been around for a while, but has become more complicated and harder to stop. Take the UCF example. In the past, the university could have acted quickly, but with the additional step of a spam bomb, the thieves were able to get away with the money. Again, using AI can help make the request for payment sound exactly like a vendor’s regular requests.
  • Business identity theft – Identity theft is also no stranger to businesses and individuals. They made an entire movie about Frank Abagnale Jr. stealing identities and living various lives around the world long before the internet. Today, with critical records, like employer identification numbers sent freely, it’s not difficult to mimic someone’s identity. With key information, crooks can open loans, file for tax returns and much more.

These are just a few of the ways businesses can be attacked through technology. Frankly, new methods of attacks are being developed every day, making it more and more difficult to protect a business from criminals.

Are there legal ways to recover lost funds?

Unfortunately, cyber thieves are much harder to catch than the criminals of yesterday who held up banks and mugged people on the street.

In nearly all cyber crimes, criminals are very smart and can cover their tracks using technology. When someone is caught for cybercrime, it takes a substantial effort from law enforcement. Oftentimes, the criminal might be in another country – and may even be backed by an adversarial government!

For instance, in February, a cybercriminal was caught in Spain after hacking into NATO, the U.S. Army, and other high-value targets. It took more than a year and was a combined effort of the National Cryptologic Centre of the National Intelligence Centre of Spain, EUROPOL and U.S. Homeland Security Investigations.

Of course, the first step after any cyberattack is to call law enforcement to start the investigation to find the criminals, however, in most cases, local law enforcement is not equipped to find the criminals because the resources and the technology are extremely specialized and very expensive.

It’s unfortunate, but in most cases, there will be very little recovery of any data or funds stolen during a cyberattack.

Prepare for your defense – before the attack

While a personal or business loss is unfortunate, it only affects the individual or business. Businesses run into significant issues when a customer’s data or money is stolen as part of a cyberattack.

In that case, your company could be found liable and be forced to pay significant legal fees, fines and payments to customers for a breach. In some cases, the result is a class-action lawsuit against the company.

Recently, Equifax had to pay approximately $575 million because of a security breach that compromised the information of more than 150 million people in 2017. Investigators found out that Equifax could have prevented the attack by fixing a known flaw in its systems. It also failed to quickly inform its customers of the breach.

According to CSO, a website dedicated to cybersecurity issues, of the $575 million, “$300 million of that will go to a fund providing affected consumers with credit monitoring services (another $125 million will be added if the initial payment is not enough to compensate consumers), $175 million will go to 48 states, the District of Columbia and Puerto Rico, and $100 million will go to the Consumer Financial Protection Bureau.  The settlement also requires the company to obtain third-party assessments of its information security program every two years.”

You can read more about that and other high-profile cases here.

Take steps now to protect yourself

There is no sure way to prevent a lawsuit from your customers or vendors after a cyberattack, but you can take steps now to increase the likelihood of a successful defense of a lawsuit.

First, find a cybersecurity firm with a proven track record of preventing cyber-attacks. Many companies offer cybersecurity, so you must do your due diligence.

The insurance company, Brown & Brown, wrote a great article on how to pick a great cybersecurity company here. But their nine key aspects are:

  1. Primary Focus on Cybersecurity
  2. Customizable Service Offerings
  3. Desire for Long-Term Relationship
  4. Understands Every Endpoint
  5. Data-Driven Defenses
  6. Diverse Client Base
  7. No Conflicts of Interest
  8. Exceptional Customer Service
  9. Money Matters but Cost Isn’t Everything

Brown & Brown also recommends cyber insurance, which we would recommend as well as another layer of protection for when your business is attacked.

After you’ve hired a cyber security company and installed all the technology needed, it is then time to establish your protocols for what happens after a breach and how to notify customers.

If you are dealing with medical records, HIPPA then it is fairly straightforward as the United States Department of Health and Human Services has specific guidelines on what to do found here.

While non-medical companies are not required to follow these steps, they actually provide a great framework for any business to follow.

For instance, HHS guidance says:

“These individual notifications must be provided without unreasonable delay and in no case later than 60 days following the discovery of a breach and must include, to the extent possible, a brief description of the breach, a description of the types of information that were involved in the breach, the steps affected individuals should take to protect themselves from potential harm, a brief description of what the covered entity is doing to investigate the breach, mitigate the harm, and prevent further breaches.”

By following this format, you are making sure the victims of the breach – a company’s customers and vendors – can take action quickly to stop any further damage. In addition, you can offer some sort of way to help, such as providing free credit monitoring for anyone who would like it.

That said, waiting after a breach to put together a plan can be costly for a business. A company should put together the plan as soon as possible and be ready to activate the plan as soon as a breach is discovered.

The Orlando Law Group can help your business prepare for an eventual cyberattack and will be there for you when it happens to mitigate as much liability as possible for your business.

The attorneys at The Orlando Law Group help businesses and organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida with all types of business law, including legal protections in a cyber-attack.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Thinking About a Raffle? Don’t Push Your Luck!

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As a non-profit organization, one of the easiest ways to raise your much-needed funds is through some sort of game of chance. It could be a casino night or a limited-entry raffle for a new car. You could offer a 50/50 contest or just a raffle for a gift basket or a pair of concert tickets.

Truly the options are endless as to the ways to raise money through games of chance.

Too often, however, non-profit organizations inadvertently break the law by requiring a purchase of a ticket, an entry fee or some other barrier to entry that is prohibited.

It is a serious issue with serious repercussions. If your organization is found to violate state laws dealing with games of chance, you could be charged with a second-degree misdemeanor for a “deceptive and unfair trade practice” with potentially 60 days in jail and a $500 fine per offense. You could also face civil penalties of up to $1,000.

If your non-profit organization is looking to hold a raffle or a sweepstakes, please reach out to The Orlando Law Group today. Our attorneys specialize in helping non-profit organizations with all types of legal issues facing non-profit organizations, like games of chance.

No one goes after these types of issues, right?

Most people would think there is no big deal in holding a raffle or a casino night to raise money for a great cause. Every day in Florida, someone is holding a charity poker tournament, a casino night, a raffle drawing or something else.

And in most cases, law enforcement does not bother them.

It does happen, however.

In fact, it has happened to people and organizations The Orlando Law Group works with.

Several years ago, a non-profit organization was holding a charity poker tournament in Downtown Orlando and the marquee outside the venue read “Casino Night Tonight.” Inside were more than 100 leaders, elected officials and donors supporting this non-profit organization.

At the time, agencies were cracking down on illegal casinos that were being operated throughout the state. The local law enforcement came into the venue and stopped the poker tournament to ensure it wasn’t gambling.

Luckily for the non-profit organization, all of the rules were followed, and a professional casino company was hired. After around 30 minutes, the all-clear was given and the festivities resumed.

If the rules were not followed and law enforcement determined the tournament was gambling, it would have been a lot worse and maybe even been on the evening news.

The Laws are fairly easy to follow

In Florida, the statutes that govern non-profit organization raffles and sweepstakes, FS 849.0935, are fairly straightforward.

It is illegal in Florida:

(a) To design, engage in, promote, or conduct any drawing in which the winner is predetermined by means of matching, instant win, or preselected sweepstakes or otherwise or in which the selection of the winners is in any way rigged;

(b) To require an entry fee, donation, substantial consideration, payment, proof of purchase, or contribution as a condition of entering the drawing or of being selected to win a prize. However, this paragraph does not prohibit an organization from suggesting a minimum donation or from including a statement of such suggested minimum donation on any printed material used in connection with the fundraising event or drawing;

(c) To condition the drawing on a minimum number of tickets having been disbursed to contributors or on a minimum amount of contributions having been received;

(d) To arbitrarily remove, disqualify, disallow, or reject any entry or to discriminate in any manner between entrants who gave contributions to the organization and those who did not give such contributions;

(e) To fail to promptly notify, at the address set forth on the entry blank, any person whose entry is selected to win of the fact that he or she won;

(f) To fail to award all prizes offered;

(g) To print, publish, or circulate literature or advertising material used in connection with the drawing which is false, deceptive, or misleading;

(h) To cancel a drawing; or

(i) To condition the acquisition or giveaway of any prize upon the receipt of voluntary donations or contributions.

Be careful with entry fees

Perhaps the most common mistake non-profit organizations make is in charging an entry fee to participate in the casino night or a raffle and charity poker tournaments are often among the biggest offenders.

For many of those types of tournaments, the marketing materials say “$100 buy-in” to participate in the tournament. Then, to entice players, the organization shows the grand prize is a trip to Las Vegas.

That is illegal in Florida.

After all, if you must spend money to win, it is technically gambling. So instead, you need to ask for a “suggested minimum donation” to play in the poker tournament. And if someone wants to play for less or even for free, you must let them. It’s the law.

The same holds for any raffle contest, no matter how small. If someone asks for a free entry, you are required to give it to them.

While that may sound like you’re going to have a raffle filled with free entries when you are trying to raise money, that rarely happens and there are steps you can take to discourage free entries.

For instance, you could offer 10 raffle tickets with a purchase instead of just one. You can make it so that someone has to use the post office to request a free ticket or entry. You can provide a free entry to receive 1,000 chips in the poker tournament, but then offer an additional 10,000 chips for $100.

The important thing is that you cannot deny free entry to anyone.

Disclosures are required

One of the other places where non-profit organizations run afoul of the law is in disclosures for raffles and sweepstakes. The non-profit organization will put the raffle drawing on its website and on social media to draw attention and raise money for the non-profit organization, but the state requires certain language.

The law is specific in that all tickets, brochures, advertising and forms must show:

(a) The rules governing the conduct and operation of the drawing.

(b) The full name of the organization and its principal place of business.

(c) The source of the funds used to award cash prizes or to purchase prizes.

(d) The date, hour, and place where the winner will be chosen and the prizes will be awarded, unless the brochures, advertisements, notices, tickets, or entry blanks are not offered to the public more than 3 days prior to the drawing.

(e) That no purchase or contribution is necessary.

While the law states that it must be “conspicuous,” it does not say where or how large it must be. And while it seems like a lot, a simple disclaimer can work. It can be something like this:

Doing Good Inc. will be conducting a hand drawing of raffle entries on January 1, 2026 at 2 p.m. at our office at 123 Any Street, Orlando. No purchase is necessary for the raffle of donated items.

Of course, since this is a legal requirement, it is critical to work with your attorney to ensure it is properly written for your unique circumstances.

One thing to note. If your non-profit organization is selling raffle tickets at an event – and only at the event – and drawing prizes that night, you will not need to list where and when the raffle will take place.

Just a reminder. Failure to follow these rules is a second-degree misdemeanor.

Large Prizes Have Unique Rules

One of the proven ways to raise money is to offer a limited number of raffle tickets for a high-value prize, like a great trip, a car lease or something like that. The size of the prize generates significant excitement for the non-profit organization and its donors, who gladly pay $100 a ticket for a one-in-200 chance at a Mercedes Benz.

If you don’t follow the law, you could end up paying $1,000 in fines to the state, in addition to being charged with a second-degree misdemeanor.

The cut-off point for this section of the law is when a non-profit organization offers a prize valued at $5,000 or more. At that level, there are very specific rules that you must follow.

First, you have to register for the contest with the state’s consumer affairs division and you need to build a page on your website with all of the rules of the contest. You will need to pay $100 to the state as a filing fee.

Then, you need to establish a trust account at a bank that will hold the amount of money that is required to pay the winners. The bank must then file a form from the state that verifies you opened the account and the amount of money in the account. You can also purchase a surety bond.

However, if you have registered with the state a similar contest for five consecutive years without any incident, the state may waive the requirements to have a trust account or a surety bond.

All of the above must be done at least seven days before the contest starts.

Finally, after you have given the prizes away, you must send to the state a certified list of all winners who received a prize of more than $25, including the value of the prize. You’re also required to keep these on file for anyone who requests them.

It can get complicated, so here’s the exact language found in Florida Statute 849.094:

Every operator of a game promotion in which the total announced value of the prizes offered is greater than $5,000 shall provide the Department of Agriculture and Consumer Services with a certified list of the names and addresses of all persons, whether from this state or from another state, who have won prizes which have a value of more than $25, the value of such prizes, and the dates when the prizes were won within 60 days after such winners have been finally determined.

The operator shall provide a copy of the list of winners, without charge, to any person who requests it. In lieu of the foregoing, the operator of a game promotion may, at his or her option, publish the same information about the winners in a Florida newspaper of general circulation within 60 days after such winners have been determined and shall provide to the Department of Agriculture and Consumer Services a certified copy of the publication containing the information about the winners.

The operator of a game promotion is not required to notify a winner by mail or by telephone when the winner is already in possession of a game card from which the winner can determine that he or she has won a designated prize. All winning entries shall be held by the operator for a period of 90 days after the close or completion of the game.

That’s a lot of work for a large prize pool, but it can be worth it depending on your non-profit organization’s needs.

Every state is different, so make sure you work with an attorney when planning any games of chance to ensure you are following state law. Florida’s full statute on charitable games of chance can be found here.

In March, The Orlando Law Group will be holding its first non-profit boot camp, where our attorneys will work closely with non-profit leaders to ensure the non-profit organization is following all the legal aspects required.

By attending, non-profits can truly give donors and the community the comfort that their non-profit is one being run with the highest standards.

The attorneys at The Orlando Law Group help non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Non-Profits: Ensure Your Bylaws Are Strong

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If you’re a non-profit leader, you most likely have received a call from a board member sharing they have the solution to an issue you discussed at the last board meeting.

The solution is expensive, but after researching it more, it does seem like the perfect fit. It truly does solve the issue at hand, so you go ahead and sign a contract for the solution.

Everything seems to be running great until someone files a complaint against how you procured that solution.

You didn’t know there were multiple companies offering similar solutions, including one that was significantly less expensive than the one the board member offered. As such, the accusations start flying internally and on social media.

They accuse you of wasting the non-profit’s funds.

They accuse you of just pleasing a board member.

They accuse you of providing insider information to a board member.

They accuse you of not following the professional standards of non-profits.

None of this is good, especially when the media picks up on the situation, but it all could have been avoided with a great set of bylaws that were followed methodically.

If your non-profit organization does not have a great set of bylaws, or you simply want to make sure your non-profit organization’s bylaws are up to date, please reach out to The Orlando Law Group today. Our attorneys specialize in helping non-profits on all types of legal issues facing non-profits, like bylaws.

Why are bylaws important?

The bylaws of any organization are the most essential part of any organization, especially a nonprofit. They are the road map for governance, providing direction to staff and the board about how the non-profit organization operates.

Bylaws should be tailored to the organization and its needs. Yes, bylaws are required by Florida statute, but there is no instruction manual for what is included in an organization’s bylaws.

Florida statutes simply state:

The initial bylaws of a corporation shall be adopted by its board of directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless otherwise provided in the articles of incorporation or the bylaws. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

It is clearly up to the organization what should be in your bylaws.

Steps to take when creating your non-profit organization’s bylaws

Any non-profit organization’s bylaws should reflect the organization’s goals and objectives. While it’s not a tactical document on how to reach those goals, it is a document to show the procedures and processes the organization should follow to reach those goals and objectives.

We find the best way to start the process is to create a small group of board members who are interested in how the organization is governed. These individuals usually have experience in non-profit board service and understand what usually needs to be in a non-profit organization’s bylaws.

This group should work with an attorney, who can provide guidance to ensure you follow all statutes that govern non-profit organizations. The attorney can also provide you with examples of bylaws from other organizations to set the stage.

Most of the work on changing bylaws happens in this committee. They will work with staff to see what works and what does not work in the current bylaws. They will look for places that need clarification or items that are just not irrelevant.

This group will put together a proposed set of bylaws to present to the full board, which will then accept the changes or ask for further changes.

Of course, many people do not like working through committees, but with a non-profit’s bylaws, it is important to have the full board’s commitment to the document. With their commitment, it is much easier to follow and refer to in situations where the staff may need guidance.

What should be in a non-profit organization’s bylaws

While every non-profit organization’s bylaws will be unique in some fashion, the subject matter of the bylaws is fairly standard for most non-profit organizations.

Specifically, here is what needs to be in your bylaws:

  • Name and purpose of your organization. This should include your mission and vision statements determined through strategic planning of your board of directors.
  • Election, roles, and terms of board members and officers. How this is done can vary significantly depending on the size and goals of each non-profit organization. Some organizations might want a nominating committee to provide board members, others may not.
  • Meeting guidelines. These should include how often the board meets and what constitutes a quorum. One thing to focus on here is what constitutes a quorum and to ensure it is not too difficult to reach. You want to have enough board members present for critical votes, but you don’t want a regular lack of quorums to prevent the non-profit organization from moving forward.
  • Board structure. This could include the number of board members, standing committees and their roles. Again, this can be specific to any organization, although a finance committee and an executive committee are standard. As to board size, there is no right answer. Some non-profit organizations have very large boards and others have just a few people. That is a decision of the board.
  • Compensation and indemnification of board members. Most non-profit organizations do not pay board members, but it is up to the board to determine that aspect. The indemnification part is essential if you would like to attract higher-level board members.
  • Role of the chief executive, the paid leader of the organization. This is truly essential as it is the basis for any employee review. It is also critical to let board members and staff understand what tasks they each should be doing and what processes and procedures they oversee.
  • Conflict of interest policy for board members and its staff. One of the worst scandals a non-profit organization can experience is being accused of using donor funds to enrich the board or the staff. Understanding these conflicts and having a policy about conflicts in purchasing is essential to protect the non-profit group.
  • How to amend the bylaws in the future. A bylaws document should always be able to be amended easily with the permission of the board. It is impossible to see every issue that may need a bylaw change in the future.
  • Dissolution of the organization. No one likes to think about the end of the non-profit organization, but it happens, and you want to make sure the board has thought about what must be followed if the end comes.

All of those apply to just about any 501(c) organization. If you are a 501(c)(6) organization, a membership group, like a chamber of commerce, then an outline of the membership procedures, including how members are accepted and terminated, will be needed.

Other aspects to watch when creating your bylaws

Creating bylaws can be tricky, but when the board comes together, the bylaws are more than just a governance document. It is a platform to give potential donors the security that the non-profit organization is a well-run organization.

For instance, when you talk about term limits in your bylaws, the organization should look at the overall state of the non-profit.

Often there is a debate on term limits for board members. After all, do you want to see someone who is an integral part of the board leave simply because of timing?

Maybe.

But do you have a pipeline of potential board members waiting to join the board or are you struggling to find quality board members?

Will it help your board to have as many community members as possible or do you want the board to be exclusive?

While best practices call for a non-profit to have term limits, that is an individual discussion. For many early non-profits, term limits may come later in the organization.

Another aspect is to make sure the bylaws are written at a high level.

While a non-profit wants to be specific, it should not detail the day-to-day operations of the organization. That should be developed by the paid executive.

For instance, the bylaws of the organization should not have how annual reviews of the customer service agents are performed but it should clearly state how the top-paid executive is reviewed.

When writing the bylaws, make them difficult to change, but not too difficult to change.

For instance, having a supermajority of all of the members of a chamber of commerce approve a bylaws change would be a nearly impossible task, but having a supermajority of the board approve a change is hard, but not impossible.

Finally, remember the bylaws are the rules by which the non-profit is governed. In too many cases, the bylaws are written, approved and then filed as done and not looked at again.

The bylaws should be living, breathing documents that are looked at regular basis.

Examples of how to use your bylaws

Going back to the beginning scenario where a board member proposes a solution to an issue the non-profit organization is experiencing.

When the board member suggests a product or service, the first step should be to check the bylaws for the processes and procedures when that happens.

Does the board member have a conflict of interest? For instance, is the company owned by the board member or a client of the board member?

If there is a conflict of interest, what are the procedures for handling conflicts of interest? Do the bylaws talk about disclosing conflicts or do the bylaws change the procedures for procurement if there is a conflict of interest? Or do the bylaws just say you can’t work with a board member’s company?

Then, check to see what the bylaws say about any procurement. Is there a requirement for multiple bids? Are there specific levels where you need full board authority to purchase?

If you follow all the bylaws, the non-profit organization has some protection against accusations of preferential treatment or wasting money.

Another example is with new board members, particularly when there are more people wanting to be on the board than there are board seats.

When bringing on new board members, the bylaws should have a clear process as to how new board members are approved. This often has a nominating committee that presents to the board a slate of candidates and then the board or membership approves the board members.

What happens if someone really great wants to join the board, but the bylaws say the only time a board member is added is once a year – and that just happened?

Unfortunately, the organization has to wait or go through the process of amending the bylaws to allow for specific exceptions.

But, if you don’t follow the bylaws in every case, you’re ignoring the rules of the organization. That could have serious consequences, including lawsuits or losing your non-profit status.

In March, The Orlando Law Group will be holding its first non-profit boot camp, where our attorneys will work closely with non-profit leaders to ensure the non-profit organization is following all the legal aspects required.

By attending, non-profits can truly give donors and the community the comfort that their non-profit is one being run with the highest standards.

The attorneys at The Orlando Law Group help non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Nurturing Growth: The Power of Proper Onboarding

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Does 2025 include growing the number of people working at your business?

We sure hope so! After all, bringing on new employees means your company is growing and succeeding. We love to see companies expand by creating jobs and providing a career for someone who is looking – or needs – a change.

Hiring employees can be difficult, however, and not just the process of finding the right person. You want to make sure when you find the right person they have the tools, training and structure for their personal success.

That means before bringing them on as a new employee you need to ensure your policies, procedures and much more are up to date. Of course, having those will also lessen the chance of conflict while the employee is at your company – and make the transition smoother when their time at the company is finished.

The attorneys at The Orlando Law Group have a long history of helping businesses with their employment matters, particularly creating the legal documents any company should develop before bringing on an employee.

Is the new hire an employee or an independent contractor?

In today’s gig economy, the lines between an employee and an independent contractor are continually blurring and the punishment for getting this aspect of your workers wrong is substantial, including severe fines for classifying employees as independent contractors and back pay for the employee.

That’s why it is critical that before you bring on new workers, you are very clear about whether they are independent contractors or employees.

In 2024, the U.S. Department of Labor issued its final rule on how to determine if someone working for a company can be classified as an independent contractor. A background on the rule can be found here, but in a nutshell, you want to consider (among other things) “The Economic Reality Test.”

The six factors that go into that test are:

  1. Opportunity for Profit or Loss Depending on Managerial Skill. Basically, does the worker have an opportunity to earn money based on marketing their skills to a wide range of clients, or is their pay and jobs assigned by the company? An employee has their jobs assigned and work extra hours to make more money.
  2. Investments by the Worker and the Potential Employer. Do you buy the computer for your worker or do they purchase their equipment? Does the worker have their own Google account, or do you provide it? If you are investing in the worker’s equipment and tools, then the worker is an employee.
  3. Degree of Permanence of the Work Relationship. Can the worker work for multiple companies like yours? Can the worker turn down an assignment that you require? If the answer is no to either of these questions, the worker is an employee.
  4. Nature and Degree of Control. The Department of Labor has a full checklist for this factor. You are hiring an employee if you:
    1. “set the worker’s schedule;
    2. “supervise the performance of the work;
    3. “explicitly limit the worker’s ability to work for others, or place demands or restrictions on workers that do not allow them to work for others or work when they choose;
    4. “use technological means to supervise the performance of the work;
    5. “reserve the right to supervise or discipline workers; or
    6. “control economic aspects of the working relationship, such as the prices or rates for services and the marketing of the services or products provided by the worker.”
  5. Extent to Which the Work Performed is an Integral Part of the Potential Employer’s Business. The key here is not that the worker is critical to the business, but rather that what the worker does for the company is critical to the company’s success.
  6. Skill and Initiative. Of course, your worker is highly skilled, but does the worker use that skill to generate additional work for themselves, or is it focused on what you want the worker to do? If that skill is used for the position exclusively, you are hiring an employee.

To add more complexity, these are not the only factors that could determine if a worker is an employee or a contractor. That’s why it is important to have an attorney review this aspect before a worker starts at your business.

You can read more at the Department of Labor’s fact sheet here.

Does the new hire have a job description?

Hiring any employee is a critical step for your business. As such, you want to ensure you are as clear as possible about what is expected from the position and the new employee.

That means you need a job description written out for both you and the employee to have the road map for success – and you lessen the opportunity for future legal action.

According to the Society for Human Resources Management, here are the items every job description should have:

  • Job title
  • Classification: Exempt or nonexempt under the Fair Labor Standards Act.
  • Salary grade/level/family/range.
  • Title of the position the person performing this job reports to.
  • When the job description was written or last reviewed.
  • Summary and overall objectives of the job.
  • Essential functions of the job.
  • Knowledge, skills, and abilities needed for the job.
  • Supervisory responsibilities.
  • Work environment: Factors that will affect the person’s working conditions while performing the job.
  • Physical demand of the job.
  • Position type and expected hours of work.
  • Percentage of travel time expected for the position where the travel occurs and whether it is overnight.
  • Required education and experience.
  • Union eligibility.
  • Additional eligibility qualifications:
  • Affirmative action plan/equal employment opportunity (AAP/EEO) statement.
  • Other duties: Disclaimer

From an attorney’s viewpoint, the last two are extremely important. Showing that your company is an equal opportunity employer is key to showing you are following federal regulations.

The disclaimer should say the job description can and will change without notice and that it is not a comprehensive list of duties required of the employee. After all, it will take time to review the strengths and weaknesses of the new hire. The job description should change based on this review.

Did the new hire get an offer letter?

Much like the job description, the offer letter is an important part of the onboarding process because it has all the details in writing about what is included in the new employee’s compensation.

It is crucial to have this written in a document as a misunderstanding during the hiring process could cause the job search to start over and perhaps lead to litigation.

Here is what Indeed says should be in an offer letter.

  • Job title
  • Base salary
  • Start date
  • Employment contingencies, such as background checks, drug screenings, reference checks, I-9 forms, etc.
  • At-will statement
  • Description of job responsibilities
  • Manager/supervisor name and title
  • Workplace location and expected working hours
  • Additional compensation potential, such as bonuses, profit-sharing, stock options, etc.
  • Employee benefits, such as insurance coverage, 401(k), paid time off, etc.
  • Offer letter expiration date

While the offer letter is not a contract, per se, it can be used in litigation and should always be reviewed or written by an attorney.

Does the new hire require an employment contract?

In Florida, an employment contract is not required for any employee. Florida is an at-will work state, meaning a company can fire an employee at any time for any reason that is not illegal. Of course, the employee can quit for any reason without punishment too.

That said, for many positions, particularly management or highly skilled employees, an employment contract is encouraged to give both the employee and the company the confidence to work together.

When there is competition for an employee, like a physician or an engineer, the employment contract gives the employee confidence to work for your business. Likewise, it helps give the company confidence that an investment into that employee won’t be wasted by the employee leaving for a competitor.

Plus, if you own a company with a lot of intellectual property or trade secrets, you’ll want an employee contract to manage the control of your IP.

The job description and the offer letter cover the employee’s tasks at the company and those should be included in the employment contract. More importantly, however, is that the employment contract covers what happens at the end of the employee’s time at the company.

Here are a few questions to consider:

  1. What are the reasons that an employee can be terminated?
  2. If you need to terminate the employee, what will be the severance package?
  3. If the employee decides to leave early, how does the employee compensate the company for any investment in training or continuing education?
  4. What will be the punishment if trade secrets or intellectual property is shared with a competitor, basically non-disclosure language?
  5. Can the employee leave to work immediately for a competitor? The enforceability of non-compete clauses has been involved in legal proceedings, but, as of now, they are legal.
  6. Who owns the work product of the employee? This is particularly important for creative positions, like graphic designer.
  7. What would be the venue to mediate any disagreements to help prevent litigation?

Understand, that the employment contract also binds you and often makes it more difficult to fire a bad hire, but by having this contract, there should be little disagreement on the processes to end an employee’s time at your company.

The attorneys at The Orlando Law Group can help make sure your business in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida are ready to hire great employees and make their onboarding and exit much smoother.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Five Resolutions for Your Business in 2025

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The new year brings significant opportunities for businesses. For many, it’s time to reset and look forward, examining the company goals and seeing what steps can be taken to meet and exceed their annual goals in 2025. For others, it is a time for reflection, a look back at the previous year to see what went right and what went wrong and how to change course, if needed.

From a legal standpoint, there are certain things the new year brings a great opportunity to review. Hopefully, everything on this list is already checked off, but if you’re looking for a New Year’s Resolution for your business, here are five ideas that can be completed fairly quickly.

  1. Review your business structure and make sure you have the right documents for that structure.
  2. Check to make sure your contracts are truly being fulfilled.
  3. Resolve any outstanding disputes.
  4. Complete performance reviews for employees and contractors.
  5. Develop or finish your exit plan.

The attorneys at The Orlando Law Group can help you meet these resolutions quickly. Just like the resolution so many people make to join a gym, the first step is reaching out. We are here to help.

Resolution No. 1: Review your business structure and make sure you have the right documents for that structure

Companies often ebb and flow. They evolve. They change how they are operated and revise their missions and goals.

Too often, however, the company’s original business structure stays the same.

There are so many different types of business structures, from a Limited Liability Company to a B Corporation and so much more. Maybe it is time to create an ESOP or move from a partnership to a sole owner.

The important thing is to talk with your lawyer and accountant to ensure your company is structured in a manner that provides you the most financial benefits, along with the most legal protections.

Every company is different, making it difficult to say all the reasons why companies are structured in specific ways. That’s why it is a good time to dig in and review your company’s goals.

But here are a few questions you can ask:

  1. If you were to get sued, how damaging would it be to the owners of the business personally?
  2. How many employees will you add over the next few years?
  3. Are you looking for investment this year or did you start bringing on investors in the past year?
  4. What are the goals of each of the partners over the next few years?
  5. Are there expansion plans for your business to add new locations?
  6. What are your exit plans? (See resolution No. 5.)
  7. How have tax laws changed since you started the company?
  8. Are you thinking about starting a new line of business with a new product or service?
  9. How extensive is your use of 1099 contracted workers?
  10. Are you thinking about offering your goods and services in a different state?

The answers to these questions all impact on how your business is legally structured.

During this review, you might find the current structure is the right structure for your business. However, if you’ve been in business for a while, it would be time to review all of the documents for your business.

After all, laws and regulations change. There may be new requirements you are unaware of. There may be new paperwork required from state, local and federal governments. All of this can impact your business and, if you have outdated documents, you could be subject to fines and penalties.

It is a fairly simple step to review your structure and your company’s documents, but not doing so can have significant financial repercussions in the future.

Resolution No. 2: Check to make sure your contracts are truly being fulfilled

When you enter into a contract with a vendor or a supplier, there is always a set of terms, including the services being provided. This is the outline of how the relationship works.

Over time, it is common for those responsibilities to slip or change. Maybe billing is a bit different than what was outlined. Maybe a new service or product was added to the list, or maybe something has proven to not be productive.

None of that necessarily means that the vendor or supplier is doing a bad job or not fulfilling the terms of the contract. In many cases, changes to the terms are agreed by both parties.

However, the contract needs to reflect the current state of the relationship to prevent any sort of legal issues down the road in case the relationship starts turning for the worse.

If there have been changes to the relationship, it is a good time to rework any contracts that need to be changed to accurately reflect what is being provided and any other aspects of the contract.

Of course, if a supplier’s or vendor’s work has not been to your satisfaction, a review of your contracts could be a good opportunity to work with the company to improve their performance – or end the relationship. (See Resolution No. 4)

Just make sure to follow the terms of the contract to end the relationship in a way to avoid any legal issues. The attorneys at The Orlando Law Group can assist with that.

Resolution No. 3: Try to resolve any outstanding disputes

Having a dispute with a customer, a vendor, a supplier or anyone else can be costly. Legal fees add up, but what happens if state regulators become involved? How much business will you lose when a dispute is taken to social media? How much productivity will you lose while focusing on a dispute?

It is much better to resolve disputes as quickly as possible and do everything you can to prevent disputes from happening.

Unfortunately, that cannot be 100 percent possible, so use the new year as a way to try to make a fresh start.

Of course, that doesn’t mean you capitulate to the other side of the dispute or that you compromise your morals or integrity. What it means is that now is a good time to see if there is a compromise or a way to satisfactorily resolve ongoing disputes.

Every dispute is different and there simply may not be an option to bring about a resolution, but your business will be healthier and more productive if you can find a way to end any dispute.

Resolution No. 4: Complete performance reviews for employees and contractors

Every large corporation has a formal process for employee reviews. There’s a reason for that. Holding performance reviews can help prevent disagreements and can help employees grow.

For many small businesses, where the owner and the employees work closely together, performance reviews can often be an afterthought. After all, the thought is that since the employee/owner relationship is close, the employee would share them immediately.

Also, if the employee hasn’t said anything and is overperforming, it is human nature to think that everything is OK and that a formal performance review will only cause issues.

Unfortunately, most employees will not willingly share their feelings of being disgruntled or unfulfilled. That leads to a surprise when the employee decides to take another job paying them just a little bit more, costing the business productivity to train a new employee.

Similarly, many businesses don’t have performance reviews for their contracted workers. After all, they are bound by the terms of a contract, you should have less control over the contractor’s overall performance and the termination of a contract shouldn’t have as big of an effect on the business.

In both cases, it is always better to have a performance review to find out if there are any issues, what can be changed in the relationship to make it better and to learn the goals of the contractor or employee.

According to Harvard Business Review, here are a few things to consider when approaching the annual performance reviews for employees and contractors.

  1. Convey your positive intent
  2. Describe specifically what you have observed
  3. State the impact of the behavior or action
  4. Ask the other person to respond
  5. Put regular follow-ups on the schedule

By ensuring you have completed these reviews as the calendar turns, your business should be more productive throughout the next year.

Resolution No. 5: Develop or finish your exit plan

As a business owner, it is not easy to think about life after the business. Sure, you can dream about sitting on a beach with a cocktail during retirement, but for many business owners, their company is part of their personality and certainly a major part of their lives.

Of course, the end might not be retirement. It may be that your goal is to sell the company and start another one with the proceeds. Serial entrepreneurs do this all the time.

It may be that you want the legacy of the company to move forward, but you would like someone else to run the day-to-day operations and you might see that for the company to scale, you’ll need a much different ownership structure.

You also might think about the day when your children will run the business, and you can see them build on your foundation.

The stark reality is that it is very difficult to maintain a business after the original owner leaves or dies. Forbes wrote about a study that showed “sales dipped by 60%, on average, four years after a business owners’ death, and employment at the firms was down 17%. The survival rate of firms where the owner died two years afterward was 20% lower than at similar firms where the owner was living. At the same time the likelihood of bankruptcy rose at firms where the owner passed away.”

That doesn’t need to happen to your business if you ensure your exit plan is complete.

In your exit plan, you’ll need to think about your life goals. You’ll need to think about who will replace you. You’ll need to think about what the company would need to move forward without you. You’ll need to think about your estate plan and how your family would be compensated if you were to suddenly die.

Those are just a few of the questions you will need to ask.

Then you’ll need to set up your exit plan into a formal document and process. There are many, many ways to give your business the best opportunity for success after you leave.

The attorneys at The Orlando Law Group can help you with exit plans and all types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Hold Off On Your Beneficial Ownership Information – For Now

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For the past year, we’ve been working with small businesses to ensure they comply with the Corporate Transparency Act to file their Beneficial Ownership Information before the deadline.

For now, those plans can be put on hold as the courts ruled the entire act overstepped the authority of Congress and states’ rights.

“First, it represents a Federal attempt to monitor companies created under state law—a matter our federalist system has left almost exclusively to the several States. Second, the CTA ends a feature of corporate formation as designed by various States—anonymity,” the judge wrote in his ruling.

Already, most businesses in Florida had an extension to file because of the recent hurricanes, but now, we’re looking at pausing any activity related to Beneficial Ownership Information for the time being.

We discussed much of this previously, but here is a recap of the issue.

What is the Beneficial Ownership Information?

As a recap of the issue, privately owned small businesses, for the most part, do not have to file any sort of public disclosures in the way that companies listed on a stock exchange must do every quarter.

Unfortunately, too many criminals are using fake companies for money laundering and other crimes. It is very difficult to track criminal activity without a subpoena.

That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.

Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses will now have to file additional information with the government because of criminals.

The law applies to small businesses with fewer than 20 employees and annual revenues of less than $5 million, with some exemptions. That covered more than 35 million businesses!

The penalties for not filing were harsh. According to the federal government:

“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

What happens now with Beneficial Ownership Information filings?

At this point, all filings are on hold as we wait to see what further actions the federal government might take.

The government could appeal the decision, but as this bill was passed by a Democratic Congress and the Biden administration, the new Trump administration may decide to not push the case anymore.

Of course, that is speculation, but without any further court actions, the federal government can not enforce the requirements that businesses provide their BOI and certainly can not enact any penalties for not filing.

The attorneys at The Orlando Law Group can help your businesses with all types of issues as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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The 12 Rules of Office Parties Your Lawyer Says To You

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We don’t mean to sound like The Grinch.

We just want to make sure your holiday office party doesn’t steal the holiday spirit – and ruin your new year with unexpected legal issues.

While most of us want to think of the holiday office party as fun, joyful and a great time to get to know your co-workers, many pitfalls and problems can happen. And the hangover of a poorly planned event can last for years.

The attorneys at The Orlando Law Group can certainly review your holiday party plans but follow the 12 Rules of Holiday Parties and the advice your lawyer gives to you, you should have a jolly good time!

The first rule of office parties your lawyer says to you is to take it easy on the alcohol.

Let’s face it, spiked eggnog goes with the holidays like peas in a pod. However, more issues happen at the office holiday parties with alcohol in the mix than those without it.

This year, you could limit the number of drinks to just two per person. You could also hire a professional bartender trained to spot when an individual has had enough to drink. You could also only offer beer and wine – certainly no shots1

If you want to avoid alcohol entirely, you could also have a holiday party at lunch or provide mocktails instead of cocktails.

Having an office holiday party where the wine flows faster than the cheer can cause any company serious issues after the festivities end.

The second rule of office parties your lawyer says to you is to make it optional not mandatory.

There are a lot of steps to take if your party is mandatory because, as a mandatory event, you are now required to treat it as an actual workday. That means you’ll have to pay for employee time and ensure all other workplace protections take hold too.

If you have an optional party and are careful to not discuss business, you can use that as a defense if things happen to go awry.

The third rule of office parties your lawyer says to you is to keep it religious-free. 

While many people want to have an Office Christmas Party, that can cause serious issues from Title VII which strictly prohibits religious discrimination in the workplace.

It’s best to just have a “holiday” office party as all major religions have a holiday in December – or just make it winter-themed with snowflakes, snowmen and candy canes.

The fourth rule of office parties your lawyer says to you is to stay away from mistletoe and other harassment issues.

If you allow the shenanigans of holiday office parties in the movies at your party, it will turn into a lump of coal for your business very quickly. Under no circumstances can you allow any form of sexual harassment at your company holiday party.

That means the mistletoe over the door is strictly prohibited, even though it’s not a religious symbol, and any sexual innuendoes, unwanted advancements and more will result in an employee being put on the naughty list, otherwise known as termination.

The fifth rule of office parties your lawyer says to you is to provide an opportunity for complaints at the party.

As an owner or a manager, you can try your best to prevent sexual harassment at the office party, but it still can happen. The best way to help with any sexual harassment claim from the holiday party is to make sure your staff knows how to make a complaint.

This system should be available during the party and after the party. Any complaints should be taken seriously and investigated and punishment given if the incident is found to have happened.

Just like at the office any other time, your company and your holiday party should have zero tolerance for sexual harassment.

The sixth rule of office parties your lawyer says to you is to establish a professional dress code.

Another way to try to prevent the party from getting too wild is by establishing a dress code as office attire.

While a person’s dress is no excuse for sexual harassment, reminding people to dress as they would at the office simply reinforces the holiday office party is an extension of the office, not a raging keg party.

The seventh rule of office parties your lawyer says to you is to remind managers they are role models.

Managers have been given their leadership roles for a reason. They are respected by the employees of the company and should be reminded of such before the party.

It’s particularly difficult for someone who has recently been promoted to separate from the way they interacted with co-workers in the past. Just reminding them as management they are held to a different standard can help keep a holiday office party professional.

The eighth rule of office parties your lawyer says is to pay your employees for their time.

While paying employees is not necessary for a non-mandatory party, it can help cover any issues that might arise. For instance, if a manager decides to talk about a company project or a new client, that could be interpreted as work, leaving you liable for potential fines and back pay.

However, by paying employees for their time at the holiday office party, you’re covered from any potential issues that might come up.

Plus, your employees will appreciate the small gesture and may increase attendance.

The ninth rule of office parties your lawyer says to you is to send out your harassment policies before the big event.

Yep, we’re back to those issues with sexual harassment. Trust us, this is the No. 1 issue that happens at a holiday office party, so you want to take every step possible to prevent harassment.

Just a simple email with the harassment policies shows you were proactive and any employee who fails to follow those procedures can not use the excuse they didn’t remember or didn’t know the policies.

The tenth rule of office parties your lawyer says to you is to not question why an employee isn’t there.

When you hold a holiday office party and it is voluntary, you have to make sure that it is truly voluntary. That means you can’t ask your employees why they weren’t there or why they aren’t coming.

Doing so could create the impression that the holiday office party isn’t really voluntary and that by missing the party, the employee could be viewed negatively.

If an employee says they can’t make it, just say thank you for letting me know.

The eleventh rule of office parties your lawyer says to you is to pay for a rideshare for employees.

One of the absolute worst things that can happen at a holiday office party is for an employee to get in a crash while driving under the influence. In some cases, depending on how the holiday party was structured, you could be held liable for damages.

Having a professional bartender and limiting drinks helps, but you do not know how much the employee had to drink before the event – or if there are any other substances, like marijuana, in their system.

The best protection you can provide is to make sure employees do not get behind the wheel after drinking by including in your party budget a free rideshare for any employee to get to the party and home from the party.

Again, your employees will appreciate the gesture.

The twelfth rule of office parties your lawyer says to you is to have a great time celebrating another year of success!

While we have certainly sounded like true party poopers, the most important rule may be the last one we give you.

An office holiday party is a great time to build camaraderie between co-workers. It can build morale at your company and can certainly help improve company results.

So, please, make sure you and your employees have a lot of fun!

The attorneys at The Orlando Law Group can help businesses with all types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Only Two Months Left to File Your BOI with the Government

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Over the past year, The Orlando Law Group has been gently nudging you to ensure you file your Beneficial Ownership Information with the federal government.

The countdown clock is almost to zero for you to file this information. If you don’t, you could be subject to significant fines and possible criminal charges as this is about protecting the country from significant criminal activity.

This can be a major issue for small businesses that have fewer than 20 employees and earn less than five million in revenue.

If that describes your company, reach out to The Orlando Law Group today!

The attorneys at The Orlando Law Group can help businesses determine if they are required to file their Beneficial Ownership Information and file all the required documents for you.

We discussed much of this previously, but here is a recap of the issue.

What is the Beneficial Ownership Information?

As a recap of the issue, privately owned small businesses, for the most part, do not have to file any sort of public disclosures in the way that companies listed on a stock exchange must do every quarter.

Unfortunately, too many criminals are using fake companies for money laundering and other crimes. It is very difficult to track criminal activity without a subpoena. That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.

Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses will now have to file additional information with the government because of criminals.

Who is required to file Beneficial Ownership Information today?

If you are a small business with fewer than 20 employees and annual revenues of less than $5 million, you most likely will need to file.

There are 21 specific exemptions, like companies in the investment and financial realms. Most organizations who file as a 501(c) with the IRS are exempt. And large businesses are exempt.

For businesses that have multiple LLCs, such as a real estate firm that owns multiple properties or a restaurant group with each location a separate entity, this could mean filing a separate Beneficial Ownership Information for each one!

If you have to file each LLC with SunBiz or any other Secretary of State, then each LLC needs to file separate Beneficial Ownership Information.

Do I need to file a BOI if I’m a Sole Proprietor?

Really, the question is about how you are structured. Many 1099 contractors, like an Uber driver, do not have a company that has filed with the Secretary of State. Instead, they may have a business tax ID they use or provide the contracting company with a social security number. They may have a fictitious name.

Those don’t matter.

The only thing that matters to a sole proprietor is if they have filed to form a company with the Secretary of State of the state they are doing business in.

This also does not include individuals who have a professional license they acquired from the state, such as a barber or a physical therapist. If there is not a company created through the Secretary of State, then the individual does not have to file.

Of course, it’s always better to be safe than sorry, so a simple call to The Orlando Law Group can help determine if you need us to file on your behalf.

What happens if a business does not report its Beneficial Ownership Information?

Remember from our first article on this issue, the penalties for not filing are harsh. According to the federal government:

“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

Keep in mind, that this is not like filing with the State of Florida, where the fine is relatively small for not filing. This is an effort of the Financial Crimes Enforcement Network division of the United States Treasury.

These are the people who spend every moment looking for criminals breaking the law to protect us.

While the federal government says, “willful failure,” that term could apply to your actions if you “forget” to file or do not realize you need to file. It is still to be determined how that will be treated.

It is certainly not something any business would want to be the test case for. Plus, pay attention to that last line of the government’s warning that says senior officers of the company can be held personally accountable for a failure to file.

The attorneys at The Orlando Law Group can help your businesses prepare for this requirement as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Understanding Service Animal Regulations for Airbnb Hosts in Florida

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Being a host of an AirBNB can be a rewarding business, providing a source of income for investment properties. Of course, there are always hassles with guests over myriad issues.

One thing that is difficult to argue over is service animals.

To be clear, if you are an AirBNB host and try to deny a guest accommodation for a service animal, you could be charged with a crime.

When it comes to service animals, it’s best to let guests utilize a service animal in nearly all cases otherwise you risk serious repercussions.

The Orlando Law Group can help you work through all the regulations – like service animals and other Americans with Disability Act issues – that come with being an AirBNB host.

What are the service animal rules for an AirBNB?

In Florida, any AirBNB rentals are classified as vacation rentals, which puts them under the “public accommodation” category. That means any regulations under the ADA legislation apply to AirBNB.

Federal law prohibits any business offering public accommodation from refusing any service animal from entering an establishment.

In some ways, the regulations covering service animals are relatively strict. According to ADA.gov, “a service animal is defined as a dog that has been individually trained to do work or perform tasks for an individual with a disability.  The task(s) performed by the dog must be directly related to the person’s disability.”

In Florida, the only difference is that a service animal can also be a miniature horse.

While the service animal must be a dog or a horse, there are no certifications, training or any other item that is required to call either a service animal.

How do I prevent service dogs and horses?

In a nutshell, you can’t.

If a guest shows up with a service animal, even without prior notice, you must let them stay, although you can ask two key questions to confirm the animal is a true service animal, according to ADA.gov.

First, is the service animal required because of a disability?

Second, what work or task has the animal been trained to perform?

You cannot request proof they are service animals. You can’t ask to see the animal in action. You cannot ask about the disability the animal is assisting.

However, there are a few things that a host can utilize to ask a service animal to leave. According to Florida statutes, A public accommodation may exclude or remove any animal from the premises, including a service animal, if the animal is out of control and the animal’s handler does not take effective action to control it, the animal is not housebroken, or the animal’s behavior poses a direct threat to the health and safety of others.

A properly trained service animal should not bark, should not be wild, and should not go to the restroom any place it is not supposed to.

Tampa AirBNB Host Charged with a Misdemeanor

Earlier this year, an AirBNB host in Tampa was charged with a crime after forcing a guest with a service dog out of the AirBNB. The host offered the guest a free night stay but wanted the dog to leave.

In that case, the guests contacted AirBNB customer support explaining the dog was a service animal trained to sense seizures. However, AirBNB responded that the owner was highly allergic to pet hair and that the dog needed to leave.

The result was the owner being arrested for a second-degree misdemeanor, “denial of rights of the disabled.”

According to ADA regulations, “allergies and fear of animals are not valid reasons for denying access or refusing service to an individual with a service animal.”

Luckily for the owner, his attorney found a loophole because the host lived in the AirBNB that was being rented out. Thus it was not a fully public accommodation and the ADA laws did not apply. The charges were dismissed.

That sort of arraignment is very rare with AirBNB, though. In nearly all cases, you will need to allow a service animal into your AirBNB without any pet deposit or any other restrictions.

The attorneys at The Orlando Law Group can help AirBNB hosts with these types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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How Does My Business Deal with Service Animals?

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Most businesses that interact with the public have encountered an issue with service animals. Perhaps someone wanted to bring their emotional support cat into the restaurant or wanted to trot their miniature horse around the grocery store.

On the surface, it seems both of those examples would be easy to deny, but in Florida, denying the public entrance because of a service dog or miniature horse can get you into significant trouble.

But the cat?

It’s an emotional support animal and is not covered under the Americans with Disability Act

The rules on accommodating those with disabilities can be difficult for many businesses because their owners want to do the right thing, but often want to do prevent an animal from entering when it affects the overall business.

The attorneys at The Orlando Law Group can help any business that might have concerns about accommodations for service animals.

What is a service animal?

It’s important to understand what constitutes a service animal according to legal definitions.

According to ADA.gov, “A service animal is defined as a dog that has been individually trained to do work or perform tasks for an individual with a disability.  The task(s) performed by the dog must be directly related to the person’s disability.”

Let’s start with the animal must be a dog in most places. In Florida, it also includes a miniature horse.

Then the laws covering what is a service animal are based on the honor system. There are no certifications, training, or any other item that is required to call a dog or miniature horse a service animal.

There cannot legally be a support alligator, cat, parrot or any other type of animal. Those could be emotional support animals, but that is not covered by the ADA.

And, if a person walks into your store with an emotional support dog, one that is there to calm anxiety and not trained as a service animal, you can deny access.

Do the Laws Apply to My Business?

If you have anyone from the public enter your business, the laws covering service animals apply.

According to the ADA and Florida Statutes, an individual with a disability has the right to be accompanied by a service animal in all areas of public accommodation that the public or customers are normally permitted to occupy.

According to Pettable.com, examples of this include:

  • Parks, zoos, and other recreational facilities
  • Sales, rental, and service establishments
  • Convention centers, sports stadiums, and other gathering places
  • Hotels and lodging establishments
  • Restaurants
  • Public transportation stations
  • Museums, galleries, and libraries
  • Educational institutions

Frankly, if you allow anyone who is not an employee into your business, you need to allow a service animal into your business.

How do I prevent service dogs?

In a nutshell, you can’t.

If a customer shows up with a service dog, you must let them in, although you can ask two key questions to confirm the dog or horse is a true service animal, according to ADA.gov.

First, is the service animal required because of a disability?

Second, what work or task has the animal been trained to perform?

You cannot request proof they are service animals. You can’t ask to see the dog in action. You cannot ask about the disability the dog is assisting.

However, there are a few things that a host can utilize to ask a guest with a service animal to leave.

According to Florida statutes, A public accommodation may exclude or remove any animal from the premises, including a service animal, if the animal is out of control and the animal’s handler does not take effective action to control it, the animal is not housebroken, or the animal’s behavior poses a direct threat to the health and safety of others.

A properly trained service animal should not bark, should not be wild, and should not go to the restroom any place it is not supposed to.

A service dog should not be carried in a shopping cart but could be carried by the guest. The service animal can’t be fed at the table in a restaurant or sit in a chair at the table. The service animal cannot go in the pool at the gym and cannot be left in the hotel room.

A service animal is there to provide a medically needed service, just like a wheelchair or an oxygen tank, not to be a part of the family or a pet.

Two Exceptions for Businesses

While most businesses must allow service dogs, there are two exceptions where businesses can summarily ban service dogs.

First, the law allows a business to prevent service animals if the service animal fundamentally changes the nature of the business.

ADA.gov gives a great example of where a boarding school, that is open to the public, has a set of rooms specifically for children with allergies. The school could ban service animals – but only for that section of the school.

Second, if the service dog presents a safety hazard to the business, service animals can be banned.

The ADA.gov example showcases the issues with a zoo. Many animals are prey to dogs, and the presence of a dog could create serious issues for those animals. The zoo could ban service animals only in those exhibits and not in the entire zoo.

It’s hard for most businesses to fit into those exemptions and before establishing such a requirement, a business owner should have an attorney review their specific case.

The attorneys at The Orlando Law Group can help businesses with these types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Welcome Back Non-Compete Contracts

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For much of the past year, nearly one in five of all employees in the United States have been waiting for September 4.

That was the day the Federal Trade Commission set to ban most non-compete contracts between employees and their employers.

Due to a recent judicial ruling, the wait for a non-compete contracts ban will take significantly longer, if it happens at all.

On August 21, a federal court in Texas ruled the FTC does not have the authority to make sweeping bans on any business practice nationwide and has halted the FTC’s new regulation from taking effect.

What that means is that for the foreseeable future, employees and employers should continue as they have been for years, looking at non-competes on a case-by-case basis.

And both groups should not presume this will change anytime soon.

The Orlando Law Group wrote about the possible impacts of this rule last November, warning businesses about the ban when the final ruling was announced. With the recent news, it is still high time to review your non-compete contracts.

How did we get here?

Under most non-compete contracts, an employee is not able to work for a competitor for a specified period, many times several years. If the employee decides to work for a competitor, they will be required to pay back any severance and, perhaps, pay damages.

For many employees, it was not a negotiated contract, but something that was required – basically a “sign this if you want to work here.”

The Federal Trade Commission went through its rule-making process, saying non-compete contracts are an “unfair method of competition” and are in violation of Section 5 of the Federal Trade Commission Act.

Plus, the Federal Trade Commission projected non-compete contracts lowered wages by $300 billion for more than 30 million Americans and that eliminating non-compete contracts would increase competition and lower prices.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said FTC Chair Lina M. Khan in the release announcing the rulemaking process last November. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.”

What is the Power of Executive Agencies?

The ruling by the FTC was challenged in a Texas court by a company called Ryan LLC, a local tax firm. In the lawsuit, which was joined by the U.S. Chamber of Commerce, the company said the following according to NPR:

“In requesting relief, Ryan, the tax services firm, had argued that the ban on noncompetes would inflict ‘serious and irreparable injuries’ on its business, including by putting its confidential information at risk and enabling its competitors to poach valuable employees, whose knowledge and training would go out the door.”

The judge put a limited injunction on the FTC ban in July, and on August 21, expanded the injunction nationwide.

The reason?

Basically, the Federal Trade Commission does not have the authority to enact such a sweeping ban without the direction of Congress.

Chevron Decision Impacts Non-Competes

Earlier this year, the U.S. Supreme Court overturned a decades-old practice of considering the “Chevron Test” to the actions of federal agencies.

That test said that if a current regulation was ambiguous or silent on an issue, then the courts must follow the agency’s direction.

In June, that changed with the U.S. Supreme Court saying that there must be direction from Congress for an agency to act in a manner like the FTC acted.

The Texas court ruling specifically referred to Chevron explaining that Congress did not give the FTC the authority to make a rule as it did with the non-compete ban, as among other issues the court had with the FTC’s ban.

What Comes Next?

The most likely next step is for the federal government to appeal the injunction to the 5th District Court of Appeals and eventually to the U.S. Supreme Court.

That process will take years and could get stopped by a future Presidential Administration. Besides, with the current makeup of the 5th District and the Supreme Court, it is highly unlikely the injunction would be overturned.

After all, this Supreme Court overturned the Chevron Test, which allowed this injunction to happen.

Of course, Congress could enact a ban on non-compete clauses, but that is not expected to happen without a major change in the partisan makeup of Congress.

Various states are enacting non-compete bans or other restrictions. If you work in Oklahoma, California, Minnesota or North Dakota, non-competes are not allowed. Other states have restrictions which you can see at the Economic Innovation Group’s website here.

In Florida, the last change to non-compete laws was more than five years ago. There are some restrictions, with the key one being non-compete contracts must be reasonably necessary and (in some instances) should be six months or less, and certainly not more than two years.

For now, employers and employees should review their non-compete contracts for compliance with state and federal laws. They also must understand the notion that a national non-compete ban has vanished.

The attorneys at The Orlando Law Group can help businesses with these types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Florida May Close Your Business for Not Following This Law

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Over the past few weeks, The Orlando Law Group has received multiple calls from business owners who have been subject to workers’ compensation investigations by Florida officials.

In each case, investigators walk into a business and ask to review all documentation as to how individuals are being compensated – to see if they are truly covered under workers’ compensation law or not.

At the heart of the issue is whether an individual is an independent contractor or an employee. Generally, an employer is not required to carry workers’ compensation for independent contractors.

What is happening, however, is that investigators are finding a significant lack of documentation as to an individual’s status and some businesses are threatened with shutting down the business until documentation on employment status can be provided.

That’s a position no business wants to be in, but it doesn’t have to happen when you have the proper documentation for independent contractors.

The Orlando Law Group can help review all the required documentation for independent contractors and employees to ensure you comply if a state investigator decides to review your business practices.

What is an Independent Contractor?

It is fairly easy to identify an employee of a business.

They get a regular paycheck.

They are told what they need to do in their job.

The company covers business expenses and provides employees with the tools they need to accomplish a job, like a computer and business cards.

Taxes are taken out of their paycheck and the individual may be eligible for employment benefits.

An independent contractor should be straightforward, yet many businesses confuse the line.

In a nutshell, a business using an independent contractor does not influence how the contractor performs a job, it cannot tell the contractor when they must work and certainly does not take out taxes or provide employment benefits.

Unfortunately, many businesses try to slide the rules a bit. They may provide a business card to an independent contractor or a list of potential sales customers to target. They may pay in cash or try to enforce hours.

All of that might get a company in trouble if they were investigated by state or even federal officials.

How Do You Classify an Independent Contractor?

For many businesses, using independent contractors can be advantageous. There is a lower cost associated with taxes and employment benefits. Termination is significantly easier and usually spelled out in a contract.

According to state statute, to classify someone as an independent contractor, four of the following six criteria for an independent contract must exist :

  1. the independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;
  2. the independent contractor holds or has applied for a federal employer identification number unless he or she is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;
  3. the independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual;
  4. the independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation;
  5. the independent contractor performs work or is able to perform work for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or
  6. the independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or a set of tasks as defined by contractual agreement unless such contractual agreement expressly states that an employment relationship exists.

Furthermore, state statute says that if four of the above scenarios is not met, you may still have an independent contractor if that independent contractor satisfies any of the following conditions:

  • performs or agrees to perform specific services or work for specific amounts of money and controls the means of performing the services or work,
  • incurs the principal expenses related to the service or work that he or she performs or agrees to perform,
  • is responsible for the satisfactory completion of work or services that he or she performs or agrees to perform,
  • receives compensation for work or services performed for a commission or on a per-job basis and not on any other basis,
  • realizes a profit or suffer a loss in connection with performing work or services,
  • has continuing or recurring business liabilities or obligations, or
  • the business’ success or failure is dependent on the relationship of business receipts to expenditures.

What Happens if a Business isn’t Compliant?

In all seriousness, a small business may have to close its doors if an agency finds that it is treating employees as independent contractors.

In the calls we’ve received from business owners, the state has issued stop-work orders against the business when it could not demonstrate it in fact uses independent contractors.

The reason for that is employees should be covered by workers’ compensation insurance. And the state does not forgive a business for misclassifying its workers.

Even if the company is not forcibly shut down, the financial implications are significant.

In addition to fines, a company can be ordered to pay back wages and taxes for misclassifying. And, in other states, a business owner can be sentenced to jail time as well. For instance, this April, a concrete contractor in Virginia was ordered to pay $1.2 million for improperly classifying employees. Last year, a drywall contractor in Wisconsin was fined nearly $600,000 and sentenced to 18 months in prison.

You don’t want that to happen to you.

As soon as you can, schedule a review of your independent contractor relationships with an attorney from The Orlando Law Group. We’ll review your situation to see if you are compliant and can provide proper direction.

The attorneys at The Orlando Law Group can help businesses with these types of issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Why Does a Business Need a Business Law Attorney?

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By Juan Camacho, director of business law services

The Orlando Law Group is committed to serving businesses and working with them to make them successful. In fact, The Orlando Law Group has always been very entrepreneurial with our founder and attorneys owning multiple businesses in a wide range of industries, not just the legal field.

As the firm’s director of business law services, I’m here to guide our clients throughout their business, from the formation of an idea to a successful exit from the company. Just like all of the attorneys at The Orlando Law Group, I look to be a partner in our clients’ businesses, helping owners avoid costly issues before they become a problem.

Indeed, I look to be that first call (before problems strike) and not the last call (after problems strike).

While every business is different, all business law generally lies in four broad categories:

  • Business Formation
  • Business Transactions
  • Business Management
  • Business Transfer

Wherever you are in the lifecycle of your business, The Orlando Law Group is here to help you and provide counsel. But let us take a deeper look at some of the issues you might encounter when a business law attorney is vital.

Business Formation

Have a business idea? Thinking about starting a business? Then reach out to a business law attorney to discuss the right business structure for you.

We talked about business structure in our last article, but let’s go a bit deeper into two of the more common business structures.

Partnerships: Many people have the dream of opening a business with a friend. Perhaps the partnership is with a family member – or a spouse. Forming a partnership is relatively simple – just two or more individuals must agree on the business purpose and how that business achieves that purpose. Although a partnership can be very informal, there are issues that may complicate things. First off, there are a wide range of types of partnerships to consider. Plus, any written partnership agreement (although not required) should clearly outline a significant number of hypothetical situations, like what happens if a partner suddenly dies or there is a divorce. Without a solid legal outline, much larger problems can happen down the road.

Limited Liability Company:  This is one of the more popular types of business structures. Despite being more formal than a partnership, LLCs are relatively easy to start. Registering your business and filing Articles of Incorporation with your respective Department of State may be the minimum requirements, but not the only thing that should be done. A limited liability company should also have an operating agreement and other binding agreements in place. By forming an LLC, owners generally avoid personal liability – meaning you are not on the hook for your business’ liability. There are also tax implications a business owner should consult an accountant about before choosing this structure for their business.

At business formation, in addition to identifying the proper business structure, business owners should look at trademarks and copyrights. And, before talking about a business idea, make sure to have a good non-disclosure agreement for other people to adhere to.

Business Transactions

Everyone gets into business to make money, right?  And at the core of a profitable business are the contracts for services, products and other aspects.

If a business provides a service, does it have proper wording in its contract about the length of the engagement, the renewal process and termination? Is the work product protected or is it the property of the client when the contract ends? Does the contract clearly outline the services provided?

If a business sells a product, does its sales agreements have a warranty or return policies? Does it outline what damage is covered and is there protection against injuries that might arise due to the product?

There is a reason why almost all sales include “terms of agreement.” It’s because the sales contract is essential for a business.

Of course, there are many more aspects to the business transaction realm. Collections, negotiating contracts, failures to perform and much more are handled by a business law attorney.

Business Management

The day-to-day management of the company, particularly with human resources and dealing with employees can be troublesome for many businesses.

If a business does not have an employment contract ready for all employees, it’s essential to start working with a business law attorney today. Similarly, if a business uses independent contractors, having a contract that clearly outlines roles and responsibilities is essential.

Both employees and contractors are often places where lawsuits are prone to arise primarily because the terms of the relationship were not clearly outlined before starting the relationship.

Finally, with the possibility of non-compete clauses ending soon, does the business have a strong non-disclosure agreement so employees and contractors cannot use trade secrets when they leave?

Likewise, what is the contractual relationship with a business’ suppliers and vendors? Does the contract clearly state when payment is due and what happens if the vendor/supplier fails to perform? Is there an internal process for purchase orders? What protections does the business have for a vendor’s collusion with competitors?

A business lawyer is essential for all of these aspects of managing a business.

Business Transfer

All good things must come to an end, right?

A founder’s role in their business will end eventually, but the question will always remain whether the business continues after the initial founder leaves. After all, statistically, only one in four businesses survive past the first generation of owners.

Working with a business lawyer can be a great way to be among the 25 percent who do survive.

Much of the effort happens when a business is started, particularly with partnerships and other forms of business structure. Hopefully, when the business was formed, much of the terms of ending the business were discussed and agreed upon.

If not, a business attorney can help negotiate an exit, whether it is by putting the company in a trust, having a partner buy another one out or any other type of exit.

The key here is to ensure all legal documents are as clearly laid out as possible as ending a relationship can easily be a place where issues can arise.

We are here to help

The Orlando Law Group is celebrating its 15th anniversary this year. During that time, our attorneys and the entire firm have focused on helping business owners throughout Central Florida, particularly those small- and medium-sized businesses that are found throughout our community.

These types of services are what I specifically work through every day, helping business owners prevent problems from happening instead of waiting until they become problems to deal with.

If you think you need assistance, please reach out to me and let us review your unique situation.

Juan Camacho is the director of business law services for The Orlando Law Group. The attorneys at The Orlando Law Group can help business owners in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange Counties to assist you.

 

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New Rules on Residential Real Estate Start on August 17

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One of the biggest changes to how people buy and sell their homes is taking effect this weekend. That’s when the National Association of REALTORS has told all of its members to start using the settlement terms in the federal court case accusing most real estate brokerages of violating the Sherman Anti-trust Act.

Multiple changes must be implemented by real estate brokers, almost all dealing with compensation and transparency in the compensation of brokers.

The biggest change is in how buyers are compensated, and it is something that anyone looking for a house needs to know.

If a home is closed after August 17, the buyer must pay their agent directly with out-of-pocket costs, eliminating how the buyer and the seller were paid during the closing of the home.

The Orlando Law Group has been following this issue since the beginning with detailed articles found here and here.

While having a personal agent work with you on finding your dream home can be very beneficial, with this ruling, utilizing the services of a proven residential real estate attorney can be a way to offset the costs of buying a home.

The attorneys at The Orlando Law Group understand this type of transaction as we are also licensed real estate agents. We work with local real estate agents and their teams on a wide range of services, including contracts and closings, but also with individuals who need assistance and are here for you.

What is changing?

The good news is that real estate brokers have had plenty of time to adjust. In May, the National Association of REALTORS announced the changes that needed to be made by brokers.

As reported by REALTOR magazine, here’s what needed to be changed:

  • Eliminate and prohibit any requirement of offers of compensation in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives.
  • Retain and define “cooperation” for MLS participation.
  • Eliminate and prohibit MLS participants, subscribers and sellers from making any offers of compensation in the MLS to buyer brokers or other buyer representatives.
  • Require the MLS to eliminate all broker compensation fields and compensation information in the MLS.
  • Require the MLS to not create, facilitate or support any non-MLS mechanism (including by providing listing information to an internet aggregator’s website for such purpose) for participants, subscribers or sellers to make offers of compensation to buyer brokers or other buyer representatives.
  • Prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers or other buyer representatives. Such use must result with the MLS terminating the participant’s access to any MLS data and data feeds.
  • Reinforce that MLS participants and subscribers must not, and MLSs must not, enable the ability to filter out or restrict MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker or the name of a brokerage or agent.
  • Require compensation disclosures to sellers, as well as prospective sellers and buyers.
  • Require MLS participants working with a buyer to enter into a written agreement with the buyer prior to touring a property.

That is a significant number of changes, including the wording of contracts and marketing materials.

Buyer’s Agent Compensation at the Forefront

Historically, a buyer’s agent was compensated by the seller’s agent by splitting commissions between the buyer and the seller. On a $400,000 sale price, this could mean a commission for the seller’s and buyer’s agents of more than $10,000.

For most buyers, this seemed like a good arrangement. The money that was paid to the agent was taken out of the sale proceeds, so the buyer never truly saw any additional costs, other than what was in the sale price.

Now, the buyer will be on the hook for thousands of dollars in addition to the home price. Of course, the offer to buy a house could be lower, but The Orlando Law Group provides a different option.

What are a home buyer’s options now?

As we stated when the settlement was first made, the options seem to be limited now. With the new laws, buyers can:

  • Agree to pay the agent directly for a preset cost,
  • Negotiate with the seller to cover the buyer’s agent fee, similar to credits for closing costs,
  • Hire an experienced real estate attorney, or
  • Try to negotiate the purchase of real estate unrepresented.

We hope that no one tries to negotiate without representation. The process of buying a home should be trusted to a professional and an experienced real estate attorney may be your best bet.

No, a real estate attorney will not scour the internet looking for your perfect home. Most of the buyers we know are already doing that, looking at listing services for homes they like.

A real estate attorney can, however, negotiate the terms of your sale. They can help ensure you are covered for unforeseen circumstances in the sale contract. They can perform all the duties required at closing, that you will be paying for anyway.

The best part? The fees paid to an experienced real estate attorney, like those found at The Orlando Law Group, are a fraction of what would be paid to a real estate agent.

The attorneys at The Orlando Law Group can help homebuyers in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Are Impact Fees Going Away?

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One of the key mechanisms governments use to finance their road improvements, their sewer maintenance and new schools is through impact fees. Every time someone approaches the local government to build a new building, they pay an impact fee, designed to cover the increased costs created by the new building.

This month, however, the United States Supreme Court developed two rules key to impact fees that must apply to all impact fees to avoid tripping the Fifth Amendment of the U.S. Constitution.

Those two rules, established through earlier case law, first state any restrictions on permitting, like impact fees, must be essential to the government’s purpose. Second, the rules state impact fees must be proportionate to the impact it looks to offset.

What this means for impact fees, local governments and developers is still to be determined, most likely through a significant number of lawsuits.

If you think you may have paid an impact fee that doesn’t meet those two rules, reach out to us immediately. The attorneys at The Orlando Law Group can review your case to ensure those two rules are met and provide counsel on the next steps.

Why did the Supreme Court rule on impact fees?

Ask any developer about impact fees, and they will most likely say they are too high and are a money grab by local governments.

For instance, if you want to build a 2,000-square-foot home in an unincorporated Orange County suburb, you will be forced to pay nearly $25,000 to acquire a permit.

Most people do not pay these fees directly as they are paid by a developer before the new house is built. But, the cost of that house at its first sale increased by $25,000 to cover the impact fees.

Local governments are key to pointing out that significant restrictions on tax collections have limited revenue. For instance, homeowners receive significant tax deductions on their primary home and values are locked in at three percent increases every year, regardless of actual increase.

Plus, elected officials rarely raise any taxes. The federal gas tax has been locked in at 18 cents a gallon for decades and doesn’t come close to paying for highway repairs, much less new highways to accommodate growth.

For the most part, local governments have argued the Fifth Amendment doesn’t apply to actions by legislative bodies, like school boards or city councils. But one couple who paid nearly $25,000 in impact fees to build a home in California sued for a refund. Courts in California agreed the “legislative body” that enacted the fee was not impacted by the Fifth Amendment.

In a unanimous decision, the U.S. Supreme Court overruled those courts, saying all government actions are covered by the Fifth Amendment.

However, it did not say if the California impact fees were improper taking of property by the government. It left that to local governments and courts.

That also left a lot of confusion on what comes next.

The only thing we know is more lawsuits are coming

While the ruling is being lauded by real estate and home builder groups, there really is nothing in the Supreme Court ruling that says impact fees must be reduced or eliminated.

There’s nothing that provides a mathematical equation that outlines what an impact fee range should be.

The only thing the court’s ruling does is say that all impact fees must be judged based on the two established rules.

We believe there will be very few governments who willingly say they were overcharging impact fees. It should be assumed each government believes the impact fees they charge pay for an essential government service and cover the approximate cost of the impact of the development.

What we think will happen will be a significant number of lawsuits filed against local governments forcing them to justify the amount of impact fees it charges.

Should I Sue to Recoup Fees?

As is the answer with most cases of law, maybe.

There are a lot of questions with this ruling. Maybe a developer who recently paid impact fees should strongly consider it, but how long are developers impacted? That’s to be determined.

Could an HOA sue to recoup impact fees on behalf of its homeowners? Maybe.

Could an individual who had impact fees passed on into the purchase of a new home sue? Maybe.

What about someone who was charged an impact fee on a remodel, even though the same number of people will be living in their house? Maybe.

The key is to allow one of the real estate attorneys at The Orlando Law Group to review your circumstance to see if there is a case we can make that you were overcharged based on the rules that now apply to all impact fees.

The attorneys at The Orlando Law Group can help businesses and individuals with all types of real estate issues in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Poof! Just Like That, Non-competes are Gone!

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For nearly one in five workers in the United States, leaving their job just became a lot easier as the Federal Trade Commission issued its final rule banning all non-compete contracts.

This means that by the end of the summer, nearly all employees who are subject to a non-compete contract right now will be free to work wherever they want, even in competing firms they were barred from.

According to their release, the FTC estimates this “will lead to new business formation growing by 2.7% per year, resulting in more than 8,500 additional new businesses created each year.”

Furthermore, the FTC says it will increase wages “by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade.”

Finally, the FTC says: “The final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.”

The Orlando Law Group wrote about the possible impacts of this rule in November warning businesses this may be a possibility. Now, businesses must prepare to take action over the next few months.

The attorneys at The Orlando Law Group can help your business prepare and work through any issues this new rule may cause.

What is a non-compete contract?

As we wrote in November, in most cases, the non-compete contract is presented as part of the employment package at the time of the person being hired.

Under the non-compete contract, an employee is not able to work for a competitor for a specified period, many times several years. If the employee decides to work for a competitor, they will be required to pay back any severance and, perhaps, damages.

Too often, it was not a negotiated contract, but something that was required – basically a “sign this if you want to work here.”

And since the employee has very little negotiation power at that point, the non-compete contract is often valid regardless of how the employment is terminated – even if the worker is laid off or fired!

Federal government says non-competes are bad for the economy.

In a nutshell, the Federal Trade Commission says non-compete contracts are an “unfair method of competition” and are in violation of Section 5 of the Federal Trade Commission Act.

That act says anything that affects consumers in the following ways is not permitted, specifically something that:

  • causes or is likely to cause substantial injury to consumers,
  • cannot be reasonably avoided by consumers, and
  • is not outweighed by countervailing benefits to consumers or to competition.

In dealing with non-competes, the Federal Trade Commission says it will increase the wages in the United States by $300 billion and give employment freedom to more than 30 million Americans.

In addition, the government maintains that by eliminating non-compete contracts, prices will decrease because there will be more competition.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said FTC Chair Lina M. Khan in the release announcing the rulemaking process in November. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.

“By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition,” she added.

What should businesses do today?

Now that the rule is final, it is time for businesses to take action.

First, businesses need to review their non-disclosure agreements to ensure they are extensive without any loopholes. The FTC did not eliminate non-disclosure agreements. They encouraged them.

In other words, the employee can work for a competitor, but it can not share your secrets to that new employer.

Then, you need to categorize all trade secrets, those things that make your product or service unique and all the reasons why. Those should be protected by a non-disclosure agreement as well.

Finally, any business with non-compete contracts must notify all employees covered by them that they will not be enforced by the beginning of September.

There is one exception, however.

Senior-level executives who have a non-compete contract will have those agreements continue through their agreed-upon terms, but they cannot be renewed and new ones cannot be entered into.

It is estimated that less than one percent of all non-disclosure agreements are for senior-level executives, those individuals making more than $151,164.

As such, the only protection a business would have from an employee taking their trade secrets to a competitor is by having a non-disclosure agreement.

The attorneys at The Orlando Law Group can help businesses with these types of contracts in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and Central Florida.

 

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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You Still Need to File Your BOI in 2024

Last year, The Orlando Law Group shared the need for your business to file your Beneficial Ownership Information with the federal government this year. It is part of the Corporate Transparency Act that was passed in 2020 but just became effective on January 1.

As you might have seen, earlier this month, a federal court in Alabama declared the government overreached its constitutional authority by requesting this information.

While we are monitoring the court battles, at this time we are still recommending all business owners continue as if the filings are still required.  

The attorneys at The Orlando Law Group can help businesses determine if they are required to file their Beneficial Ownership Information and file all the required documents for you.

What is the Beneficial Ownership Information?

As a recap of the issue, privately owned small businesses, for the most part, do not have to file any sort of public disclosures in the way that companies listed on a stock exchange must do every quarter.

Unfortunately, too many criminals are using fake companies for money laundering and other crimes. It is very difficult to track criminal activity without a subpoena.


That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.

Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses will now have to file additional information with the government because of criminals. 

Who is required to file Beneficial Ownership Information today? 

If you are a small business with fewer than 20 employees and annual revenues of less than $5 million, you most likely will need to file. 

There are 21 specific exemptions, like companies in the investment and financial realms. Most organizations who file as a 501(c) with the IRS are exempt. And large businesses are exempt.

For businesses that have multiple LLCs, such as a real estate firm that owns multiple properties or a restaurant group with each location a separate entity, this could mean filing a separate Beneficial Ownership Information for each one! 

If you have to file each LLC with SunBiz or any other Secretary of State, then each LLC needs to file separate Beneficial Ownership Information.

How does the court ruling impact these businesses? 

Remember, there are many steps in the process of determining if a law passed by Congress and signed by the President is constitutional. In some cases, it takes years to move through the court system and can eventually be decided by the U.S. Supreme Court.

National Small Business Association, et al. v. Janet Yellen, et al. was filed in November 2022 in federal court. It took until March for the court to issue an opinion on the law.

While it sounds like a relief for everyone, the opinion was quite narrow, only granting relief to named plaintiffs and members of the National Small Business Association. According to news reports, there are 65,000 member businesses covered under their membership with the association. 

Chances are that your business is not one of them. 

After all, there are more than 30 million small businesses in the United States according to the U.S. Small Business Administration. And you can’t join now and be included in the court case.

Even if you are a member of the association, you should still prepare your Beneficial Ownership Information as the federal government plans to appeal the decision. That means the injunction providing relief could be overturned at any time.

What happens if a business does not report?

Remember from our first article on this issue, that the penalties for not filing are harsh. According to the federal government:

“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

Keep in mind, that this is not like filing with the State of Florida, where the fine is relatively small for not filing. This is an effort of the Financial Crimes Enforcement Network division of the United States Treasury. 

These are the people who spend every moment looking for criminals breaking the law to protect us. 

While the federal government says, “willful failure,” that term could apply to your actions if you “forget” to file or do not realize you need to file. It is still to be determined how that will be treated. 

It is certainly not something any business would want to be the test case for. Plus, pay attention to that last line of the government’s warning that says senior officers of the company can be held personally accountable for a failure to file.

The attorneys at The Orlando Law Group can help your businesses prepare for this requirement as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Non-compete Contracts May Disappear Soon

One of the biggest issues affecting employers, contractors and employees in 2024 may be the elimination of non-compete contracts depending on the actions of the Federal Trade Commission in April.

Throughout 2023, the government agency has been looking at eliminating the use of non-compete contracts by all businesses when it comes to workers and contractors. Nearly 30,000 people have weighed in on the proposed action.

If passed, companies will need to ensure they have worked with employees and contractors on strict non-disclosure agreements to protect its company secrets.

But in the fall, a business’ best employee may be able to go work for a competitor a day after leaving and there will be no recourse for the company.

The attorneys at The Orlando Law Group can help ensure your non-disclosure agreements are comprehensive and enforceable to protect your business and can work through any issues this new rule may cause.

What is a non-compete contract?

Nearly every executive or contractor has signed a non-compete contract in the past. In most cases, the non-compete contract is presented as part of the employment package at the time of the person being hired.

Under the non-compete contract, an employee is not able to work for a competitor for a specified period, many times several years. If the employee decides to work for a competitor, they will be required to pay back any severance and, perhaps, damages.

Too often, it was not a negotiated contract, but something that was required – basically a “sign this if you want to work here.”

And since the employee has very little negotiation power at that point, the non-compete contract is often valid regardless of how the employment is terminated – even if the worker is laid off or fired!

The federal government says non-competes are bad for the economy.

In a nutshell, the Federal Trade Commission says non-compete contracts are an “unfair method of competition” and are in violation of Section 5 of the Federal Trade Commission Act.

That act basically says anything that affects consumers in the following ways is not permitted, specifically something that:

  • causes or is likely to cause substantial injury to consumers,
  • cannot be reasonably avoided by consumers, and
  • is not outweighed by countervailing benefits to consumers or to competition.

In dealing with non-competes, the Federal Trade Commission says it will increase the wages in the United States by $300 billion and give employment freedom to more than 30 million Americans.

In addition, the government maintains that by eliminating non-compete contracts, prices will decrease because there will be more competition.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said FTC Chair Lina M. Khan in the release announcing the rulemaking process. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.

“By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition,” she added.

Additionally, the release discussed how the Federal Trade Commission believes non-competes hinder innovation and increase consumer prices.

“The evidence shows that noncompete clauses also hinder innovation and business dynamism in multiple ways—from preventing would-be entrepreneurs from forming competing businesses to inhibiting workers from bringing innovative ideas to new companies,” the release says. ‘This ultimately harms consumers; in markets with fewer new entrants and greater concentration, consumers can face higher prices.”

Is this going to happen?

It has been almost a year since the Federal Trade Commission announced it was starting the rulemaking process to eliminate non-compete clauses. At the time, the commissioners voted 3-1 to start the process.

Since then, the commission allowed for public comment and extended the period because there were so many comments being submitted. All told, approximately 27,000 individuals filed a comment.

As the lone vote against the rulemaking process, Commissioner Christine Wilson provided a 14-page document with her reasons for voting against it. In it, she talked about:

  • how there has been more than a century of case law upholding non-compete contracts.
  • how this issue is a legislative issue for Congress to address,
  • how there has been very little enforcement on this issue,
  • how the issue has limited research, and
  • how other protections, like non-disclosure agreements, are not proven to protect businesses.

However, Commissioner Wilson’s term ended in March 2023, and she was not reappointed by President Joe Biden. The Federal Trade Commission is bi-partisan and two new Republican appointees for the five-person board are currently being considered by the United States Senate.

That said, the two new appointees could object and the rule would still move forward unless one of the existing commissioners changes their vote.

After that, the new rule will be challenged in court, and it could take years to be heard by the U.S. Supreme Court. During that time, the rule may or may not be enforced, depending on court actions.

What should businesses do today?

It should be assumed the new rule will be passed in April and will take effect 180 days after the ruling.

Under the new rule, it would “be illegal for an employer to:

  • enter into or attempt to enter into a non-compete with a worker;
  • maintain a noncompete with a worker; or
  • represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

As such, the only protection a business would have from an employee taking their trade secrets to a competitor is by having a non-disclosure agreement.

In that contract, the employee or contractor agrees not to share any confidential information and there are severe consequences for breaking the contract.

It is critical all businesses that operate with non-compete contracts have reviewed and implemented non-disclosure agreements in early 2023.

The attorneys at The Orlando Law Group can help businesses with these types of contracts in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Do Not Steal Photographs from Google

One of the most common delays in building websites for small businesses is finding the right content, especially the right photographs to tell the story of the business.

For most small businesses, the amount of time and the costs of hiring a photographer, developing a shot list, and then combing through dozens of proofs just doesn’t seem like a good use of time.

Instead, the staff turns to Google and finds the perfect shot that truly amplifies the text on the page. It’s easy to pull from the Internet – just right-click and save the image.

It seems harmless. After all, the business owner isn’t selling the image or putting it on merchandise. It is just being used to showcase an idea.

But even using just one copyrighted image can result in fines up to $150,000, plus other penalties.

The attorneys at The Orlando Law Group can help defend you in a copyright case or help prevent others from using your copyrighted material.

What constitutes a copyrighted image?

Frankly, the assumption should be that just about any image cannot be used without permission from the owner.

The images in a Google search? Yes, those are copyrighted unless specifically marked.

The images you find in a promotional email? Yes, they are copyrighted.

The images on Instagram that a customer takes of your business? Yes, they are copyrighted.

Donald Trump’s Georgia mug shot? Yes, the Fulton County Sheriff’s Office owns it, although they are obviously not enforcing it.

The images your friend posts on Facebook? Yes, they are copyrighted too!

Again, virtually every image you see online has the assumption of being copyrighted.

To be clear, the images do not have to be registered with the government to be copyrighted.

According to the U.S. Copyright Office, “Your work is under copyright protection the moment it is created and fixed in a tangible form that it is perceptible either directly or with the aid of a machine or device.”

The only exception as to if an image is copyrighted is when an image’s copyright expires and becomes a part of the public domain. This does not happen very often, however, and you can learn more about this in our blog post about how Steamboat Willie is now part of the public domain.

What happens if you use a copyrighted image?

If you use a copyrighted image, the penalties can be significant.

In most cases, if you use a copyrighted image, you will probably receive a cease-and-desist letter, asking for the image to be taken down. And in most cases, reputable businesses will take it down.

Of course, that is the best-case scenario.

Sometimes, however, the person who owns the copyright may want to make your case an example so others don’t follow suit. Other times, the copyright holder may be a small business too, often a photographer whose entire business is based on selling photographs.

In that case, you can be sued for using copyrighted images and the consequences can be severe.

Just in fines, you could be looking at a minimum $200 fine for each image used with a maximum fine of $150,000.

Your website could be impounded, taking away one of your greatest tools to market your business.

You can be forced to pay for attorney fees.

Finally, you can also be forced to pay damages if it is proven that you earned any revenue from the use of the image. While that is usually formed with merchandise using copyrighted images, it could also be construed that your website delivered revenue to your business.

How to avoid using copyrighted images

The easiest way to avoid using copyrighted material is to hire a professional photographer. In that case, the photographer is providing you with photos that you paid to have the rights to. You can use these photos as you see fit.

If you are in a rush and need an image to reinforce your brand, then you can turn to a stock image site and purchase the images for your use. You are purchasing a license, and you must follow that license, but you can use it for most purposes – and they are exclusive to your business.

Some of the more popular stock image sites are iStock and ShutterStock. Plus, if you use Adobe products like Acrobat and Photoshop, the company has a large collection of images to use in its stock photo library.

In these cases, you will need to pay a fee to use them, and other businesses can buy the same image, but you will not get sued for using them.

There are some free stock image sites too, just make sure there is no fine print restricting use. For instance, some stock image sites offer photos to be used for personal use, but not for business use.

In the case of images used on social media by friends or customers, it’s always best to just ask them in writing if you can use the image. In most cases, the customer and friend will agree to let you use them.

What is someone is using a photo I took?

In nearly every case, it will take the use of an attorney to help stop copyright infringement. From the beginning, a cease-and-desist letter from an attorney will have a greater effect on a business owner than just a random email.

Plus, it can be sent certified, confirming the company received it.

The attorney can also help determine if you should sue for damages, especially if the photo was used in a way that damages your brand or was used for revenue production by the other company.

Finally, the attorney can help guide you to an applicable law enforcement agency if there are criminal implications to the assumed copyright infringement.

The attorneys at The Orlando Law Group help business owners dealing with copyrights in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Need A Real Estate Attorney

Scary! A Nearly $2 Billion Judgment Against the National Association of REALTORS® on Halloween

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While we’re still a long way away from a final ruling, a federal court in Missouri has ruled the National Association of REALTORS® and most major residential real estate brokerages are in violation of the Sherman Anti-trust Act, one of the oldest laws ensuring a free market in the United States.

The punishment? Damages of $1.79 billion.

In a nutshell, the courts determined the National Association of REALTORS®, along with companies like Re/Max, Century 21, Keller Williams and more, squashed competition by forcing any real estate agent who wants to use the MLS database must use their rules for commission payments. According to the ruling, this prevented free market competition and eliminated any negotiations on who pays commissions and how much they are paid.

The attorneys at The Orlando Law Group work with local real estate agents and their teams on a wide range of services, including contracts and closings. This is a subject we are watching closely as it could rework how real estate agents are paid.

The Basics of the Class Action Suit

In 2019, a group of people who sold homes in Missouri sued the National Association of REALTORS® and the real estate companies, saying the group has agreed to “adopt, promote, and implement anticompetitive rules through the association’s governance.”

By having an association that prevents members from allowing their associates to compete with one another for commissions, and by agreeing to follow and enforce these anticompetitive rules, the National Association of REALTORS® acted to further its implementation and enforcement.

The main arguments from the plaintiffs included:

  1. The MLS is controlled by local associations, and access to the MLS is conditioned on brokers agreeing to follow all mandatory rules set forth by the National Association of REALTORS®.
  2. The National Association of REALTORS®’ policies restrain competition in the real estate market. This restraint forces the sellers to pay the buyer’s agent commission that, in a competitive market and were it not for the association’s anticompetitive restraint, would, or could, be paid by the buyer.
  3. The “Adversary Commission Rule” which is a policy of the National Association of REALTORS®, effectively requires the seller to predesignate a commission for the buyer’s agent, and further limits the ability to negotiate that commission amount.
  4. Since the MLS requires the seller to list a commission percentage, this provides the buyer’s agents the opportunities to selectively show clients properties the agent deems to be” worth their time.” This places sellers who choose to pay less in commission in a disadvantageous position, as the buyer’s agent usually gives priority to showing homes that pay a higher commission, and selling brokers are incentivized to provide a higher buyer broker commission to comply with NAR’s mandatory rule.
  5. Failure to abide by the MLS and association rules can lead to expulsion from the National Association of REALTORS® and access to the MLS, which restricts real estate agents who are not REALTORS® from listing properties on the centralized database.

Overall, the plaintiffs argued if these rules didn’t exist, buyers and sellers would be free to negotiate amongst themselves regarding the amount of commission paid. This would make the market more competitive and would likely drive down the prices paid to agents to lower commissions.

Additionally, it would cease the requirement that the seller pay the buyer’s agent’s commission.

Essentially, the association’s policies contribute to fixed commission prices, regardless of the individual factors of each sale at levels that would not exist in a competitive marketplace.

What is the Sherman Anti-trust Act

The Sherman Anti-trust Act was passed in 1890 and was the first law in the United States prohibiting monopolies. At the time, many companies had formed that dominated industries. These companies had no competition and, thus, drove prices significantly higher than a free market would allow.

Since that time, there have been many high-profile cases where monopolies have been broken up, like General Electric, Standard Oil and AT&T. Perhaps the highest profile case is Major League Baseball, which has been able to defeat any push to call them a monopoly.

The purpose of the Sherman Anti-trust Act is to preserve free and unfettered competition in the marketplace and that competition produces the best allocation of our economic resources, the lowest price, the highest quality, and the greater material progress.

To establish that any defendant violated Section 1 of the Sherman Anti-trust Act, the plaintiffs were required to prove:

  • a conspiracy existed to follow and enforce the Cooperative Compensation Rule in the subject MLSs,
  • the Defendants knowingly, voluntarily, and intentionally joined in the conspiracy,
  • the conspiracy had the purpose or effect of raising, inflating, or stabilizing Broker commission rates paid by home sellers,
  • the conspiracy caused the class plaintiffs to suffer injury to their property.

Here is an example the plaintiffs used to show how they believed the National Association of REALTORS® violated the act. In their Code of Ethics, Standard Practice, 16-16, “REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.”

What does this mean for real estate agents and for you?

While this case is pending final resolution through the appellate court, and possibly even the Supreme Court, it is unknown how this case will affect the day-to-day real estate operations and what could happen to the real estate industry, but it could have drastic impacts. However, knowing what the exact effects are will likely take a few more years.

The attorneys at The Orlando Law Group can help real estate agents in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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No Easy Way to Protest a Losing Proposal

No one likes to lose a big contract, but it has happened to every company providing goods and services to other businesses and governments.

For contracts with private businesses, there’s very little recourse. After all, a private business can choose to do business with whomever they would like.

When it comes to government contracting, however, it is a completely different story. The government is spending tax dollars – your money – and there are pages and pages of rules and regulations as to how those agencies must spend those dollars.

Many are spending millions, even billions, of dollars every year on all types of goods and services from cybersecurity protection to toilet paper.

That is at the local and state level. The federal government can authorize more than a trillion dollars in contracted spending in one indefinite-delivery/indefinite-quantity contract.

Government contracts can positively impact a company for years to come, which is why so many companies focus on them.

While a company can rebound from losing a government contract, it still can cost thousands of dollars to put together a proposal or bid for a government contract.

If a business feels like the process was flawed or the award was in error, there are steps the company can take, but it’s detailed and difficult, and it may cost more than the company spent on the proposal in the first place.

The attorneys at The Orlando Law Group can help you. Our firm specializes in business and contract laws and can help any business looking to protest an award from local or federal governments.

What can you protest?

Technically, a business can protest whatever you would like. That said, filing frivolous protests is a waste of money. Plus, while the agency certainly cannot overtly use a past protest against you in a future solicitation, it is human nature to remember a frivolous protest.

So first, start with who can file a protest. Not everyone can. In most cases, you must be affected by the decision because you were a part of the bidding process.

At the federal level, you do not have to bid to protest and can file a pre-award protest. Those protests are usually because the proposal or bid was written in a way that was confusing or did not directly. For instance, the Government Accounting Office gives these examples:

  • allegedly restrictive specifications
  • omission of a required provision
  • ambiguous or indefinite evaluation factors

Most local governments look for protests after the bid is opened and an intent to award has been given.

But, there is often no set outline saying this is what you specifically can protest, but generally you’re looking for things like the ones the federal government initiated plus acts like:

  • a violation of Sunshine Laws or improper lobbying by the winning company.
  • An ineligible company winning the bid.
  • A part of the process that was overlooked or skipped.

In one of the more high-profile bid challenges this year, one of two bidders for a new city marina in West Palm Beach protested.

The company, Safe Harbor, alleged the mayor’s vote on the proposal was illegal as the city’s ordinances give the mayor a vote only in the event of a tie with a vote at the city council. In addition, the company claimed the winning company improperly lobbied city contracts after a news article showed the council received nearly $50,000 in campaign cash from the winning company.

The results?

The protest was tossed out because Safe Harbor did not follow the rules of the protest, filing it after the deadline.

How do you protest a bid?

Here’s where it gets very complicated because there is no set answer on how to protest a bid or request for proposals. Nearly every government is different.

For instance, as part of the process, Orange County Government requires the following:

“The protesting party shall mail a copy of the notice of protest and the formal written protest to all other bidders and to any person with whom he/she is in dispute and shall provide the chief of purchasing and contracts with evidence of such mailing.”

Just across the county line, Seminole County Government does not require companies to do that. However, it does require this to happen:

“The bidder has the responsibility to contact the County and request the award recommendation results. The failure to contact the County for the award recommendation or recommended ranking results to determine if a protest is warranted will be considered lack of due diligence.”

Then there is the question of how quickly you must file an intent to protest. In both Seminole County and Orange County, the timing is the same. You have until 5 p.m. on the fifth day after the award recommendation is filed.

According to the state’s Administrative Code, a bid protest with any of the state’s agencies must be done within 72 hours after the award or the intent to award is posted electronically.

With federal contracts, it’s even more confusing because you are allowed to protest a bid before the award. In that case, the rule is 10 days after a company should have known about the defect in the competitive solicitation. After an award is announced, companies wishing to protest must request a “debrief” meeting and will have 10 days to protest after that meeting.

As perhaps the largest contractor in the world, the United States government publishes a 71-page booklet to guide protests, it can be that complicated.

The timing is just one of the issues to examine before filing a protest against. Some solicitations require a “protest bond,” meaning you have to pay to protest.

Even with all of these publications linked in the article describing the process, any singular solicitation can vary from these rules. And the courts are constantly looking at these rules, meaning they can change at any given time.

Just this past summer, a federal appeals court overruled past decisions and changed who was eligible to file a protest with the federal government.

If you think you might want to protest a decision by any government agency, it is imperative you reach out to the attorneys of The Orlando Law Group as quickly as possible.

We understand government contracting and can help you with any potential protest you might have.

The attorneys at The Orlando Law Group help business owners in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Lessons for Small Business on Taco Tuesday

Over the summer, there was a very public battle over the phrase “Taco Tuesday.” Lebron James wanted the phrase. Taco Bell wanted the phrase. Restaurants around the country wanted the phrase.

Of course, the owners of the trademarked phrase “Taco Tuesday” didn’t want to give it up and had fought allowing others to use it for years.

Eventually, Taco John’s, which had a trademark on the phrase for decades, decided to release the trademark without a fight and now Lebron James, Taco Bell and your neighborhood food truck can use it legally in most places.

While it is highly unlikely your company will develop a tagline or marketing phrase that becomes as common of a term as Taco Tuesday, it does serve as an important lesson for any business: protect your marketing just like you would a trade secret, an invention or a unique differentiator.

Not doing so can cause a business significant issues in the future, ones that could be easily avoided.

The attorneys at The Orlando Law Group can help you. Our firm specializes in trademarks and copyrights and a host of other business issues.

Why couldn’t we have Taco Tuesday a year ago?

Taco Tuesday seems like it has been part of our vernacular for as long as we can remember. It just makes sense and sounds like the perfect phrase that just rolls off the tongue.

That’s exactly what Taco John’s thought too when they first used it in a marketing campaign in the early 1980s, first calling it Taco Twosday and then using Taco Tuesday. The goal was obvious, by offering two tacos for 99 cents, the company figured it could increase business on a slow day.

It worked and in 1989, the company filed and received a trademark for the phrase Taco Tuesday.

Taco John’s, based in Wyoming, continued to grow over the years and currently has around 400 locations. But the phrase Taco Tuesday grew even faster. The company did as it should, which was to fight the use of the phrase vigorously, but in 2019, Lebron James tried to file a trademark for Taco Tuesday, but was rejected as the term was described as commonplace by the federal government.

That opened the door for Taco Bell to file a lawsuit to cancel the trademark earlier this year. Taco John’s chose not to fight and gave up the trademark.

Of course, Taco Bell used the fight for marketing too, saying they were just getting the term freed for everyone, even creating a FAQ for their actions.

It is not just about generic terms

Companies losing a trademark are well known. After all, we all take aspirin, use an escalator and we all rented a videotape at one point. Each of those terms was once trademarked but became generic terms eventually.

Honestly, the odds of anyone creating a marketing term that turns into a generic term are very low. It rarely happens.

One of the interesting things about Taco Tuesday is a group of Mexican restaurants found multiple uses of Taco Tuesday before Taco John’s 1989 trademark applications. Several companies, including Taco Bell, used the phrase as early as 1966 but did not trademark the phrase.

But Taco John was not the first to get a trademark for Taco Tuesday. That went to a small restaurant in New Jersey, which started Taco Tuesday in 1979 and received the trademark in 1981. They have kept the trademark in New Jersey ever since and have fought to keep it.

They have sold more than two million tacos over the years and market itself as having the “original Taco Tuesday” which is one of the reasons they remain in business today.

Over the years, they fought their competition in New Jersey successfully. After all, when someone sees a business with lines out the door, there will be an attempt to replicate it.

Today, that restaurant is still fighting Taco Bell and still owns the rights to use Taco Tuesday in New Jersey.

It is about your competition.

Both Taco John’s and the New Jersey restaurant show why any business should trademark the terms and slogans they use.

If a business does not protect itself and has a successful promotion, it will be copied to some extent by its competitors. Without a trademark, a business will have no recourse. With a trademark, a business can force the competitor to stop the infringement quickly.

And if the competitor does not stop using it, the courts can order significant damages.

How to trademark your marketing slogan

Even though there are thousands of trademark applications filed every year, it is stunning that more businesses do not file for trademark protections on their marketing slogans.

Start early as it may take a year or more for final approval. Most of the time is used so that anyone can have a chance to say why a trademark should not be used or to claim the trademark themselves.

The U.S. Patent and Trademark Office has a great summary of the process, but, as you will see, it can be extensive.

The only reason the New Jersey restaurant received the trademark was because an attorney worked with them on the process. They admit they did not have the time to handle the trademark process.

The Orlando Law Group has helped businesses with trademarks for years. We have a great article overall on the process here and another one about the use of Steamboat Willie here.

If you think you need trademark assistance, please reach out to the attorneys of The Orlando Law Group as quickly as possible.

The attorneys at The Orlando Law Group help business owners in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

 

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Be Ready to File Your BOI – or Go to Jail

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Next year, the federal government will be requiring businesses to increase the amount of reporting it provides. It is a new step that may catch businesses off guard as many businesses may not have even heard of the new types of disclosure.

But, if you own, invest or work for a small business, be ready to file your Beneficial Ownership Information to the federal government in January. Not doing so could result in significant fines and possibly jail time.

That sounds scary, right? 

It can be, but for most businesses, the actual act of filing this newly required information can be simple. Where it gets complicated is if your business is required and who you must disclose to the federal government. 

The attorneys at The Orlando Law Group can help businesses determine if they are required to file its Beneficial Ownership Information and file all the required documents for you.

Why do businesses need to report its Beneficial Ownership Information?

For most businesses, there is significant reporting required to publicly show the ownership of a business. 

For instance, a major company like Walt Disney Co. is publicly traded and all of its ownership information is accessible and public. A small investment firm files with the Securities and Exchange Commission. A non-profit organization files its ownership information with the Internal Revenue Service in its form 990.

Small businesses, for the most part, do not have to file this type of information with the federal government.

That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.

Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses will now have to file additional information with the government because of criminals. 

Who needs to file Beneficial Ownership Information?

If you are a small business with fewer than 20 employees and annual revenues less than $5 million, you most likely will need to file. 

There are 21 specific exemptions, like companies in the investment and financial realms. Most organizations who file as a 501(c) with the IRS are exempt. And large businesses are exempt.

For businesses that have multiple LLCs, such as a real estate firm that owns multiple properties or a restaurant group with each location a separate entity, this could mean filing a separate Beneficial Ownership Information for each one! 

Basically, if you have to file each LLC with SunBiz or any other Secretary of State, then each LLC needs to file separate Beneficial Ownership Information.

What needs to be included in the Beneficial Ownership Information? 

This is where the issue becomes complicated as the government is requiring small businesses to report anyone who has “substantial control” or “ownership interest” in the business.

The ownership interest is strait forward. Does an individual own 25 percent or more of a small business? If so, that person needs to be included in the Beneficial Ownership Information.

As to substantial control, in most businesses, this will include nearly everyone on the executive team. Specifically, the government says the following are required to be included:

  • The individual is a senior officer (the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).
  • The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
  • The individual is an important decision-maker for the reporting company.

The last bullet is where it gets complicated and will need to be a judgement call on the business owner. If someone in the business has any authority with finances, structure or business lines, they need to be included. 

What happens if a business does not report?

Here is where it gets scary. According to the federal government:

“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

Keep in mind, this is not like filing with the State of Florida, where the fine is relatively small for not filing. This is an effort of the Financial Crimes Enforcement Network division of the United States Treasury. 

These are the people who spend every moment looking for criminals breaking the law to protect us. 

While the federal government says, “willful failure,” that term could apply to your actions if you “forget” to file or do not realize you need to file. It is still to be determined how that will be treated. 

It is certainly not something any business would want to be the test case for. Plus, pay attention to that last line of the government’s warning that says senior officers of the company can be held personally accountable for a failure to file.

When do we file our Beneficial Ownership Information?

For the first year, any existing businesses have all of 2024 to file its first Beneficial Ownership Information. 

However, if you form a new company after January 1, you will have just 30 days to file your information with the federal government. 

The attorneys at The Orlando Law Group can help your businesses prepare for this requirement as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Time to Adjust Your Payroll for Tipped Employees

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Recently, the Miami Herald wrote about a case against the Orlando location of Giordano’s Pizza that was brought on by the U.S. Department of Labor. The restaurant’s owners were accused of not paying their employees properly and was ordered to pay each worker $5,000, for a total fine of $125,625.

For a restaurant or any business, that is a significant fine that could result in the restaurant going out of business.

In that case, the Department of Labor accused the company of not paying its servers time and a half for overtime hours and of paying its servers exclusively in cash.

Both of these should be fairly standard for any businesses using tipped employees to do so, but on September 30, 2023, the numbers associated with tips and pay changed. It is important for you to review your payroll standards and ensure your business is complying.

The attorneys at The Orlando Law Group can help review your situation and ensure your business is following the often-confusing issues related to tipped employees.

How Tips Work

Anyone who dines at a restaurant understands the tips system for compensating restaurant employees. You pay more for your meal based on the quality of service you receive. In addition, it is assumed the cost of the meal is lower because the restaurant has lower labor costs.

But that 20 percent added onto the bill does not go to the server 100 percent. The server gives some to the bussers and the hostess. The bartender may get a portion and the kitchen staff may get paid out as well.

It can be confusing who is getting how much money and, often, nearly impossible to track. That is why the rules of tipping are set up to be based on a “tip credit” established by each state government.

Yes, there is a federal standard, but in many cases, states have higher minimum wages, which always supersede the federal standards and that is the case in Florida.

It is required that some of a server’s wages are not paid through tips exclusively. In Giordano’s case, the restaurant owners were found to have not paid 24 servers any pay except for their tips.

That is not allowed.

What is Florida’s tip credit?

This is where it gets a bit tricky. A few years ago, Florida voters passed a ballot initiative raising Florida’s minimum wage to $15 per hour. Understanding this would be hard on businesses, the new law allowed a gradual increase in the minimum wage until 2026.

The first increase was in 2021, and every year after, the minimum wage increases by $1 per hour. On September 30, 2023, the minimum wage in Florida became $12 per hour.

Of course, that is not the amount that employers are required to pay tipped workers. Florida law allows employers to take a “tip credit” of $3.02 per hour for any employee who receives tips.

That means restaurants and other tip-based industries must pay a minimum wage of $8.98 per hour, a dollar per hour higher than it was in September. And the next year it goes up another dollar, eventually resulting in a minimum wage for tipped employees of nearly $12 per hour!

What are the penalties for non-compliance?

Increasing expenses are always tough for any business, especially restaurants where the margins are always thin and food costs are extremely volatile. Just that one extra dollar per hour could be a tremendous burden for any business.

The alternative will be worse and you will almost always get caught.

Anyone who has worked in the restaurant industry understands employment is often very temporary and there are many opportunities for disgruntled former employees to cheerfully report any practice that does not meet the law.

Once the Department of Labor becomes involved you will have extra legal and accounting fees to prove your case or negotiate a settlement. Almost any fines imposed will include interest and penalties. Instead of paying an extra dollar an hour, you could be paying hundreds of thousands of dollars.

In Giordano’s case, there were only 24 employees at one location who were impacted and the company still had a six-figure fine. How many employees do you have? Is that a fine you could pay easily?

There is also very little defense. For instance, the Department of Labor said in the article Giordano’s blamed a third-party payroll company for a mistake. Unfortunately for the restaurant owner, the responsibility lies with them.

The attorneys at The Orlando Law Group can help you with wage cases like this, as our attorneys represent clients in the restaurant industry and other businesses in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Government Approval for My Commercial Property

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One of the key roles of local government is approving what people build on their land. From zoning to permitting and inspections, a local government can be a great partner or your worst enemy.

For just about any type of commercial project an investor wants to undertake, government action will be required.

Time and again, investors in commercial properties can find themselves in protracted battles with the government without the proper due diligence on what will be needed to accomplish the investors’ desires.

You do not want to invest significant amounts of money or sign a binding contract without understanding everything that will need to be done with the property.

To be prepared, you need to work with an attorney who understands all the issues that come with land use and permitting to give you all of the facts and possible scenarios you need to know before investing in any commercial real estate.

Check the zoning!

At the heart of any government approval is understanding what the government will allow on a particular property. Every parcel in the United States is zoned for something, a church, a single-family home, a warehouse or more.

In many cases, the zoning is not obvious. For instance, most people have driven by a piece of land with one or two cows on the property. Around the land on adjacent properties are hotels and shopping centers in this case.

The land with the cows may be very attractive to purchase for a commercial real estate investor, but the investor must understand the government will need to approve a zoning change from agricultural to a designation that allows them to build what they want.

That change will usually be smooth – after all, a new shopping center will provide significantly more tax revenue for the government than a cow pasture. Plus, because all the adjacent properties are commercial, there are relatively few detractors.

Still, there are multiple boards to approve the change and the investor will still have plenty of preliminary work to do on the legal and engineering needs of the process.

But what if that vacant land was surrounded by neighborhoods and you want to develop a small 24-hour urgent care center on the property? That is going to be significantly more effort, more legal work and higher costs as the neighbors decide they want to keep their cow pasture and decide to fight the approval.

Now, that investor will need to pay for those engineers and attorneys to spend more time on the project. The investor may need to hire a lobbyist and perhaps a public relations firm.

All of that should be taken into account before the investment is made.

Zoning can also play into leases as well. There may be some restrictions on zoning preventing you from operating the business you want to operate. Once you sign a lease, you will be responsible for paying lease payments – even if zoning will not let you open.

The attorneys at The Orlando Law Group have a unique understanding of how zoning can affect properties and can alter plans for a commercial real estate investor and can help guide you to how long and lengthy it may be to ensure your zoning is correct.

How long does permitting take?

Have you read every line in your lease or your sale agreement carefully? After all, there are often phrases in every lease that could cause an issue.

One of the key phrases, particularly in a tenant build-out, is “build-out to be completed by ___ days after execution of the lease.”

If you miss that deadline because the government runs slower than you might think, you will be in violation of your lease.

The Orlando Law Group works with businesses throughout Central Florida and, to be clear, there is very little rhyme or reason on how long it can take to get a building project permitted.

In unincorporated Orange County, there are more than 100 different kinds of permits you might need. Just for a commercial building permit in Orange County, there could be more than a dozen different forms to fill out. There are four different permits for types of tree removals in Orange County.

Every city in Orange County has different forms, different permits and different processes.

Making things even more complicated is how cities and counties control land use is often disjointed, resulting in different processes, procedures and timing for permitting for buildings across the street from each other.

The good news is that, in most cases, governments want to work with you to approve permits. They understand holding up permits prevents investment; it reduces jobs and keeps eyesores or empty lots on the tax rolls. But it still takes an expert to work through the approvals and make sure there are no issues.

Plus, it is always best to fully understand what is needed before purchasing a property or even signing a lease. Not fully understanding the permitting process could cost any investor a lot of money.

Inspections: the last step.

After construction is finished and you are ready to open your business, the government sends in an inspection team to ensure everything built matches what was approved.

While this may sound easy, it can often be the most frustrating part of the process in opening your business. After all, your new business looks complete, the fixtures are all in, and the furniture has been delivered.

All you need is the government’s approval, but the fire inspector finds fault with the placement of the emergency exits. They are too high by three inches.

For the most part, you will need to fix the issue before receiving the final approvals, but by working with an attorney, who understands the process and has worked with the government officials, there can be ways or methods to help speed up the process.

For instance, the government could order a temporary certificate of occupancy, where the business can open, but must fix the issue quickly. This is not available all the time but can be looked at on a case-by-case basis.

The goal for everyone is to get your investment or business operating as soon as possible, in a safe manner that is acceptable to the community around it. It may seem overwhelming, but with the right guidance and assistance, it can be stress-free.

The attorneys at The Orlando Law Group represent clients in commercial real estate and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Dirty land: a great deal or a big hassle

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One of the biggest stories in Central Florida in the 1990s was how the Orlando Sentinel was found to have contaminated the ground under a large swath of downtown Orlando.

For decades, the company had been sending chemicals from its printing presses into drains on the floor of the plant. Those chemicals traveled from its property at Orange Avenue and Colonial Drive, almost all the way to Lake Concord.

The main chemical, trichloroethylene or TCE, was extremely hazardous to people, with an extreme risk of causing cancer.

When the stories broke about this polluted flume of chemicals, the thought was that land would be impacted for decades and would probably be a black hole of development in the heart of the city core.

In fact, the property appraiser slashed the value of all property above the plume by 50 percent.

Today, the north downtown corridor has seen a significant rebound. There are restaurants and apartments, office buildings and small shops. It is a walkable community where businesses and residents thrive.

It also cost millions to clean up and was the subject of a years-long lawsuit to ensure the Sentinel took responsibility, forcing them to clean up the groundwater.

Even though the Sentinel stopped using TCE in 1982, the issue was not publicly known for years. No business wants to be known as a polluter, it is imperative to make sure you understand any issues that might affect the purchase of commercial land you intend to develop.

The attorneys at The Orlando Law Group can help you with any issues of contamination that might be found on a property you are interested in buying.

What type of contamination could be there?

It seems like there is an endless supply of chemicals and hazards that can be found on a site you might be interested in purchasing.

The Environmental Protection Agency says a contaminated property may be “from a variety of intended, accidental, or naturally occurring activities and events such as manufacturing, mineral extraction, abandonment of mines, national defense activities, waste disposal, accidental spills, illegal dumping, leaking underground storage tanks, hurricanes, floods, pesticide use, and fertilizer application.”

Plus, there are thousands of sites throughout the country that have been contaminated. In fact, there are several “brownfields” in Central Florida alone. But there is no tracking system for most of these lands, only the biggest and the worst of the sites. The only way you can know for sure that a dry cleaner in the 1970s was not dumping chemicals on your property is through your own due diligence.

If you don’t perform the due diligence and ensure a clean-up procedure before you buy the land, you’re liable for the contamination as well as the original owner once you use the property.

Hire an engineer.

When you look to purchase a building and plan to finance the purchase or the construction of a new building on vacant land, nearly all financial institutions will require an environmental study, usually just a “Phase I” study.

In this study, a licensed engineer will do a review of the property, going back 50 years to see if there is any reason to suspect some sort of contamination. This is more of a review of the history of the property and nearby businesses. The engineer will look at photos, insurance claims, property records and more.

If the Phase I study shows there may be a reason to think the land could have some issues, a Phase II study will be needed.

The Phase II study is significantly more comprehensive. It includes soil borings and underground water samples. The engineer will run extensive studies on the samples to determine if there is any contamination and how serious it possibly could be.

Depending on the results of the phase II study, a phase III assessment may be needed. This is the most extensive environmental study you can have. It should show the contamination in its entirety and will have a mediation plan to eliminate the issue, including the costs.

Cleaning up contaminated land is not a quick or easy process. If there are chemicals in the soil, the dirt is often trucked off-site to a cleaning facility and disposed of, often through burning. If the water is contaminated, it is a long process of replacing the contaminated water with clean water.

Hire a lawyer.

At this point, a decision will need to be made to determine who is going to pay for the clean-up of the contamination.

In some cases, it should be an easy call. For instance, the pollution in downtown Orlando started at the Orlando Sentinel’s printing facility and flowed downstream.

But, initially, the Sentinel blamed employees for disobeying disposal rules. It blamed an extermination company nearby. It denied any sort of responsibility.

It took seven years of lawsuits by property owners to get some relief – the Sentinel eventually purchased their property in a confidential settlement. The Sentinel also had relief come from the state and the city, which forced the Sentinel to pay just 60 percent of the cleanup of the area.

Since then, nearly $3 million was spent to clean up downtown. There were thousands of pounds of organic chemicals removed from the area and around 209 million gallons of water have been cleaned.

But do you want to purchase a property that could be tied up in litigation, if there is even a company or individual to sue to clean up? Can you recoup your investment in the cleanup through future revenues? Can you include clean-up in your purchase negotiation?

That is where The Orlando Law Group comes in. We are able to work through all of the legal analysis to determine how and where you might get relief. Our attorneys can provide you with a complete picture of the property you are interested in purchasing, so you can make an informed choice.

The attorneys at The Orlando Law Group represent clients in commercial real estate and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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What the lease? A guide to renting space for your business.

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Every business owner remembers the pride they felt when the ribbon was cut on their new office or new location. All their friends and family, along with the local mayor and the chamber of commerce, came by to congratulate the owner on their accomplishment.

Getting to that point was not always easy and getting that space was often complicated, filled with terms that are very well known to realtors and institutional investors but are not common to most people.

After all, the closest thing most people have had with leasing property is the apartment they rented or the short-term rental agreement they signed when moving.

Most residential leases are straightforward. You agree to a rent payment and to maintain the property inside the home, and pay for renters insurance and utilities. The rest is up to the landlord.

That is not the case with commercial real estate, where you can sign a “triple net” lease, an “absolute” lease, a “step-up” lease, a “gross” lease or a number of other types of leases.

It is important you work with an attorney at The Orlando Law Group to ensure you fully understand the ramifications of the lease you want to sign.  Any type of lease has risk and reward and the attorneys at The Orlando Law Group can help you make the best decision for your business.

What are the different types of leases?

There are a multitude of types of leases, but it is important to understand the difference between the common types of commercial leases: single net, double net, triple net and absolute net leases.

In each of these types of leases, the difference is who pays what during the lease to operate and maintain the property. The most common of these leases is the triple net lease, where you will pay less on your lease payment, but more in the operations of your business.

In the triple net lease, your business will be responsible for utilities, taxes, janitorial, insurance, maintenance and much more. The payments will be bill separately and based on the percentage of space you lease in the building.

Sure, it sounds like a lot, but remember, the property owner took the risk in developing the property from leasing. As a user of the building, the thought is you will have responsibility in maintaining the property you are using.

If that sounds like too much to be responsible for, you can always look at a double net lease or a single net lease. These are not as common as they shift some of the responsibility to the property owner, but the owner may be amenable to those types of leases.

In a double net lease, you will pay for just about all the same items as a triple net lease, but the overall property maintenance will be the responsibility of the property owner. Things like landscaping and small facility repairs will not be part of your lease, but you will still need to cover taxes, utilities and other aspects.

In a single net lease, you are pretty much responsible for only your space. You pay rent and taxes and the landlord pays virtually everything else.

The reality of each of these types of leases is the more you pay for, the lower your lease payment. The fewer items you pay for, the higher your lease payment.

What are other varieties of leases?

Of course, as with any legal arrangement, there are dozens of different variations of the three types of leases.

Start out with the “absolute triple net lease.” This variation includes everything that a triple net lease includes, plus a contribution to major repairs on the building. For instance, if your shopping center needs a new roof or your office building needs a new HVAC, your business will be responsible for helping pay for those repairs based on the percentage of square feet you lease.

What if the next hurricane destroys the building? In most leases, the property owner would be responsible. But in a “bond” lease, you are on the hook to help rebuild the property. And if the building is condemned, you still have to make lease payments.

You could also try to negotiate a “gross” lease. It is like the triple net lease as to what it covers, but in this arrangement, everything is included in the singular lease payment, as opposed to being billed separately for taxes, insurance, property maintenance and more.

There are also “percentage” leases, which provide the property owner with a cut of the business profits. These are particularly common with restaurants, which take a bit of time to build a customer base. There are step-up leases, which automatically increase the lease payments over time.

If you want a custom building, you can also look at a ground lease, where you are responsible for building your location and everything that needs to be part of the facility. Of course, you need to make sure it is very clear what happens to your investment when or if the ground lease ends.

What type of lease is best?

There really is no “best” type of lease. All the established types of leases have their pros and cons and are dependent on your business. The goal of the property owner is to keep their investment filled with tenants and produce revenue. They are usually willing to work to find a lease arrangement that works for everyone.

That is why it is critical to work with an attorney on your commercial lease. Your attorney will understand what your long-term goals are for your business and will be able to negotiate to get you the best possible lease for your specific business.

The attorneys at The Orlando Law Group represent clients in commercial real estate and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Alimony-Tax-Deduction

New Divorce Laws in Florida

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At The Orlando Law Group, we certainly understand the stress, confusion and emotions that come with a divorce, particularly one that has alimony payments and child custody arrangements.

Unfortunately, many of the laws guiding Florida courts for decades have been upended this month. For more than a decade, there has been an effort to substantially overhaul these laws. Both Governors Ron DeSantis and Rick Scott have vetoed similar legislation in the past.

This year, however, the laws passed and this month, a slew of new laws took effect in Florida dealing with alimony and child custody.

While not retroactive, any new petitions for divorce will have these new laws apply.

If you are already divorced, these new laws could affect you too as there are new standards to petition the courts for a modification of your divorce agreement.

The big one that could see substantial changes in your agreement is the end of permanent alimony for any new divorces. For those receiving or paying permanent alimony, that could change in the future with new restrictions on retirement, outside support and other aspects.

If you are filing for divorce soon, alimony will be based on the length of your marriage and other factors, but it will now be required to end at some point.

As to custody arrangements, the court now takes the stance that co-parenting – a 50/50 split – is best for the child unless either side proves that not to be the case.

Keep in mind as with any new law, there will be court challenges and other actions to fix any issues with the law, so this could change.

But if you have a divorce agreement from a Florida court, it is imperative you reach out to The Orlando Law Group soon to review and see what your options are and how this new law might affect you.

The Orlando Law Group can help you with any family law issue that might arise, including ones dealing with alimony and child custody. Our full-service firm helps businesses and individuals in Orlando, Winter Garden, Altamonte Springs, St. Cloud, Kissimmee, Sanford and throughout Central Florida.

What is alimony?

In any divorce proceeding, the courts look at how to ensure individuals are not immediately put into financial stress through a divorce. This can come in a variety of forms, from a lump sum payment, a “bridge-the-gap,” rehabilitative and durational.

In each of those cases, there is a wide range of factors that determine the amount and the length of the alimony payments. Usually, without an agreement, the courts would set the length and cost of alimony, including sometimes making it permanent – only ending with death or remarriage.

No more permanent alimony

As of July 1, the new law completely eliminates all permanent alimony, now requiring an end date to the payments.

According to the previous statutes, “Permanent alimony may be awarded to provide for the needs and necessities of life as they were established during the marriage of the parties for a party who lacks the financial ability to meet his or her needs and necessities of life following a dissolution of marriage.”

It was meant for couples separating from long marriages in most cases and it was viewed by statute as the last choice.

The alimony ended when the payee remarried or died, or if there was evidence of new outside financial support – generally living with someone – with a modification filing.

All of that is gone now. In Florida, there are now limits as to how long alimony can last. If you were married for three to 10 years, alimony can not exceed 50 percent of the length of the marriage; for 10-20 years, 60 percent of the length of the marriage; and over 20 years, 75 percent of the length of a marriage.

In addition, there is now a cap on the amount of alimony in durational alimony. It cannot “exceed 35 percent of the difference between the parties’ net incomes, whichever amount is less.”

Wait, there’s more…

One of the things that may have huge implications was the change in the definition of the length of a marriage. That can have large ramifications on your settlement.

In the past, a short-term marriage was defined as up to seven years. It is now 10 years. A moderate-term marriage was from seven to 17 years. It is now 11-20 years. And a long-term marriage is now over 20 years!

This could result in a significant reduction in your anticipated alimony payments.

If you already have permanent alimony, it is also easier to get a modification based on the circumstances of the payee. Before July 1, you could ask for a modification only if your ex-spouse was living with another person. (It automatically ended with remarriage). Now, alimony could end based on another person – other than family or a spouse – supporting your ex for a year or more.

Finally, Florida statute now clearly states how an alimony agreement can be altered in the case of the payor retiring. While this has been somewhat of a precedent based on earlier court cases with modifications, the definition of retirement is clearly stated in the statute and if those definitions are met, alimony ends or is reduced.

Child custody changed too!

A separate piece of legislation may influence divorce agreements with children.

In the past, each case of custody was looked at individually, meaning there was no basis for who had prime custody at the beginning of the case.

Now, the court starts all cases that involved children with the presumption the best interest of the child is to have 50/50 shared custody of minor children. If that is not the case, you must prove “preponderance of the evidence” that a different parenting situation is best for the child.

It is still to be determined how this will be utilized and change how child custody is currently determined.

That is why we believe it is essential to reach out to The Orlando Law Group if you have an existing divorce settlement or are thinking about divorce to ensure you are protected under these new statutes.

The attorneys at The Orlando Law Group represent clients in family law issues and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Independent Contractor Rules Change Again

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As business owners at The Orlando Law Group, we certainly use independent contractors as do many businesses throughout Florida. After all, independent contractors can often provide significant experience in a given field for a fraction of the cost of an employee.

Plus, many of the issues and costs surrounding employees – benefits, overtime, scheduling, time-off and more – are eliminated by working with independent contractors when possible.

Over the past few years, the “gig economy” has had courts, the IRS and the National Labor Relations Board looking closer at how workers should be categorized. And during the Trump administration in 2019, there was an expansion on who could be a contractor.

This June, however, the National Labor Relations Board issued a new ruling to basically reverse that decision. The issue comes down to entrepreneurial opportunity and if the contractor is working for multiple clients.

At The Orlando Law Group, we anticipate these types of criteria will fluctuate for a while as regulators work out how the gig economy will work.

The Orlando Law Group can help your business with any legal issue that might arise, including ones dealing with independent contractors. Our full-service firm helps businesses and individuals in Orlando, Winter Garden, Altamonte Springs, St. Cloud, Kissimmee, Sanford and throughout Central Florida.

What is an Independent Contractor?

Over the years, the independent contractor has been an important part of many business plans. They have been called consultants, 1099s, contractors and more.

But businesses that use them cannot simply substitute an employee for an independent contractor. There are specific rules, but for the most part, it comes down to control. Unlike an employee, a business does not provide any tools to the independent contractor – and cannot control how the contracted work is performed.

For instance, if you hire independent contractors as salespeople, you cannot provide them with sales leads. You cannot say they have to work every Friday or set their hours in any shape or form. You cannot require them to go to the office. You cannot provide them with a laptop or a computer. You shouldn’t even give them a business card with the company’s name on it.

Benefits are off the table. You are not responsible for overtime and certainly not responsible for taxes.

And you most certainly cannot prevent them from contracting to sell for another company at the same time, although you could make industry exclusivity a part of the contract.

The same applies if you are using a delivery driver as an independent contractor, or hiring a beautician, or a pilot, or myriad of other jobs.

Here’s how the IRS determines independent contractors, using three “Common Law Rules.”

  1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  2. Financial: Are the business aspects of the worker’s job controlled by the payer?
  3. Type of Relationship: Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

These Common Law Rules have governed the independent contractor relationship for quite a while.

Entrepreneurial opportunity

So, what changed?

While the Common Law Rules have been part of the discussion on independent contractors for decades, what changed repeatedly in the last decade is how “entrepreneurial opportunity” is defined.

At the center of that term is how the independent contractor can grow their own business with other clients and other contracts.

In 2014, the NLRB said entrepreneurial opportunity was based on real entrepreneurial opportunity –the independent contractor acquired multiple clients. This ruling limited the number of independent contractors and classified many individuals as employees.

In 2019, that determination was expanded. It wasn’t specific to whether the independent contractor had acquired other clients, it became hypothetical. Could the independent contractor grow their business with other clients, even if they hadn’t? And that became the overriding element of classification.

Of course, applying potential instead of actual actions expanded who could be an independent contractor and the newest ruling from the NLRB returns to the 2014 meaning.

What does this mean for businesses? 

The classification of workers as employees or independent contractors is critically important. If you misclassify employees as independent contractors, you could be liable for back taxes and pay, and depending on the extent and negligence on your part, there could be major fines.

These fines can be significant. For instance, Nike is facing a $500 million fine for misclassifying employees. A small construction staffing company with 200 employees in Virginia has a $270,000 fine to pay for misclassifying employees.

At this point, it is important to be as conservative as possible with independent contractors.

We also believe to protect yourself; you should have an attorney at The Orlando Law Group review your independent contractor agreements. We understand your needs as a business owner and want to make sure your business thrives.

The attorneys at The Orlando Law Group represent clients in business law, labor issues and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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LLCs: Is It Better to Tax as a Partnership or S-Corporation?

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All businesses, even some of the biggest corporations you can think of, started as a small business. They are a major part of the American dream and they allow people to use their creativity to support their local community or build a life for themselves. This concept draws in people from all over the world who do not have the same opportunities as those born in the United States.

There are millions of small businesses in the United States, and they are the bones of the American economy. They create tens of thousands of jobs each year, make up almost all businesses in the United States, and are accountable for a large portion of the country’s economic activity.

That being said, starting a small business is not always easy. It takes a lot of time, money, and personal investment to start a small business and make it successful. It also comes with a lot of decisions on how the company should be structured and taxed.

One of the most common structures for small businesses are Limited Liability Companies, commonly referred to as LLCs.

What is an LLC?

An LLC protects owners from being personally responsible for a company’s debts and liabilities and was created by law.

When there is an LLC with a single owner, it is treated like a sole proprietorship, and when there are multiple owners, they can be taxed as either partnerships or corporations.  It is important to talk to your accountant about what is best.

Some of the benefits of an LLC taxed as a partnership include:

  • Flexibility: firms that have complex structures of ownership and investment strategies that vary, find that the flexibility in profit distribution, governance arrangements, and structuring ownership interests is very important.
  • Pass-through Taxation: Pass-through taxation is when the profits and losses of the firm flow through to the partners or individual member’s personal tax returns. This avoids something called “double taxation,” being taxed twice on the same income, and allows the tax treatment to be aligned with situations of the individual investors.
  • Limited Liability Protection: This structure provides limited liability protection, which means that the personal assets of the members or partners and the liabilities of the firm are separate. This is extremely important for private equity firms that engage in investments that are high-risk.
  • Operational Flexibility: LLCs also offer operational flexibility. This allows private equity firms to make their own decisions and manage their investments efficiently, to their liking. It allows for the adoption of operating agreements that can be made to meet any specific requirements or needs the firm has.
  • Alignment with Investor Preferences: Many investors, including high-net-worth individuals and entities that make investments for other people, actually prefer investing in private equity funds structured as LLCs taxed as partnerships. The pass-through taxation allows the tax treatment to align with the investors’ individual needs and desires, which makes it a lot easier to incorporate the investment into the rest of their tax planning.
  • Section 754 Basis Adjustment: By taxing an LLC as a partnership, private equity firms might be able to take advantage of a Section 754 election. This gives the firms the ability to adjust the tax basis of the partnership’s assets when ownership interest goes under transformation, which can be a valuable tool. When private equity firms engage in buying and selling investments, to allocate the stepped-up basis to the acquiring partner and potentially increase amortization deductions or future depreciation. This can be helpful in the private equity industry where there are varying tax bases and holding periods for investments. It provides additional flexibility when managing investments, especially when frequent transfers of partnership interests are anticipated or if there is a diverse portfolio with assets held at varying tax bases.  This can possibly result in tax savings and enhanced tax planning opportunities.  The benefits are not uniform, and they depend on the unique circumstances of the firm and its investors. It is especially important for private equity firms to examine this carefully and consult with legal and tax professionals to determine what the best option for them is.

Another option for taxing LLCs is by taxing them as an S corporation. This is a selection you have to actively make that has a similar pass-through taxing structure. Therefore, taxing an LLC as an S corporation has some of the same benefits as taxing it as a partnership, but there are differences also.

  • Restrictions on Ownership: There are specific eligibility requirements for shareholders. It is limited to one hundred or fewer individuals, select trusts, and estates as shareholders. This can, effectively, limit the flexibility when it comes to raising capital or having certain types of investors.
  • Limited Flexibility in Allocations: S corporations are subject to more strict allocation rules than LLCs taxed as partnerships. They have to distribute their profits and losses to their shareholders according to percentage of ownership. This can become a problem if an owner wishes to allocate the profits or losses in a disproportionate way, because of different shareholder agreements.
  • Restrictions on Entity Structure: S corporations also have restrictions on what kinds of entities can own their shares. For example, C corporations, partnerships, and most kinds of LLCs cannot be shareholders. This limits the options for structuring more complex business relationships or even pursuing certain investment strategies.
  • Limited Fringe Benefits: There may be restrictions on tax treatment of fringe benefits if the S corporation owners own more than 2% of the company’s shares. The owners may also be subjected to additional tax consequences for benefits such as health insurance premiums, medical expense reimbursements, etc.
  • Potential Self-Employment Tax: While shareholders of an S corporation might be able to save on self-employment taxes by paying themselves a lower salary and taking the extra profits as distributions, the IRS may scrutinize the salary amount. If it is deemed unreasonably low, they could reclassify a portion of the distributions as wages, making them subject to employment taxes, which can result in additional tax liabilities and potential penalties.
  • Termination of S Corporation Status: The requirements of an S corporation must constantly be adhered to, in order to maintain their status. If they are not, for instance by exceeding the limit on the number or having an improper type of shareholder. This can, unfortunately, lead to unintended tax consequences and higher taxes if the corporation ends up being treated as a C corporation.

If you are looking for an attorney who understands business, look no further than The Orlando Law Group. Our firm is led by a serial entrepreneur, Jennifer Englert, who has not only grown the firm from its inception but is also a founder or owner in more than a dozen companies in and around Orlando, Altamonte Springs, Winter Garden and St. Cloud.  That experience is critical in giving you legal advice. The Orlando Law Group is not just looking at the law pertaining to your unique circumstance, but it is also looking at your business and what makes your business special.

If you would like to schedule a consultation for any business issue, please reach out to our office at 407-512-4394, fill out our online contact form or save this information in case you ever find yourself or a loved one needing to use it for any of our services, not just business law.

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Terminating a Foreign Worker

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We’ve all been there. 

You hire what you think will be a great employee, and it turns out you missed the mark during the interview. Or your great employee is found to be harassing other employees. Or you just need to cut certain staff because of a downturn in the economy.

In nearly any circumstance, ending the employment of someone who works for you is not an easy task.

But what if that employee came to you through an immigration program, like an H-1 visa or an E visa? If that’s the case, there are very specific steps you must take to follow state and federal laws for both immigration and labor laws.

The Orlando Law Group can help your business on both accounts. As a full-service firm with attorneys helping businesses and individuals, we can certainly help employers looking to terminate foreign workers in Orlando, Winter Garden, Altamonte Springs, St. Cloud, Kissimmee, Sanford and throughout Central Florida.

Notification of Termination

In nearly all cases of employment immigration, if you are terminating the employment of someone who is working with you under an employment visa, you will need to ensure multiple entities are notified. 

This could include the employee, the United States Customs and Immigration Services, and possibly the consulate of the employee’s country of origin. Like so many legal concepts in immigration law, the actual process is dependent on the visa that is being used.

There are two possible exceptions to the above. If the employee is under a TN visa for employees from Mexico and Canada, and if a visa is designated for employees who transferred from one location within the company to a location in the United States.

Extra Expenses

When employing foreign workers, there may be expenses you have incurred when bringing those workers to your company.

Likewise, if you terminate a foreign employee, you may need to reimburse the employee to aid them in returning to their home country for “At least equal to the costs charged by the most economical and reasonable common carrier for the distances involved,” according to the Department of Labor. 

This stipulation does not apply equally to all employment visas, and the case law on this issue evolves regularly. There is no hard definition of what is the “most economical and reasonable” cost that an employer must pay. 

The attorneys at The Orlando Law Group are here to help you navigate this critical step.

Grace Period

When you terminate an employee, that employee is not necessarily required to go straight to the airport and back to their home country. In most cases, workers are provided a grace period of up to 60 days to put their affairs in order and return to their home country. 

To be clear, however, this is not an excuse for workers to overstay their visa. If the visa expires 30 days after termination, the employee can only stay for 30 days. 

There may be other options available for the employee in this situation. While this blog is focused on employers, The Orlando Law Group can help individuals who were terminated while working in the United States through an immigration program as well. There also may be some opportunities for an individual to stay in the United States after termination. 

Your attorney at The Orlando Law Group can help to see if there are options available in your unique circumstance.

I-140 Withdrawal

One of the central parts of terminating an employee is the I-140 petition, which is key to the immigration process for certain employees. 

Remember, this does not apply to all foreign employees but can have significant effects on some foreign employees. The attorneys at The Orlando Law Group can help you determine what may happen to an employee’s I-140 petition.

For employers, keep in mind the I-140 petition is extremely important to your employees, and a commitment to not withdraw the petition within the first 180 days of employment can be a very useful employee benefit to attract higher-level employees. 

Attorneys for Both Employee and Employer

The Orlando Law Group is a full-service law firm that helps businesses, organizations, and individuals with a wide range of legal services. As such, there may be cases where The Orlando Law Group can represent both the employer and the employee in an immigration case when their interests are totally aligned.

Of course, when that happens, The Orlando Law Group will be open and transparent and will only provide legal assistance to both parties with the express permission of both parties as information must be shared between everyone.

Conclusion

While terminating an employee can be complicated, The Orlando Law Group can help guide you to operate within the complex immigration system and its associated labor laws. 

The complexity of terminating foreign employees should not prevent any business from hiring foreign employees. The benefits of foreign labor can be substantial, especially during times like these when good employees are hard to come by.

If you are looking to terminate a foreign employee in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, or Kissimmee, we’re here to help you with a full team of attorneys who care about you and your circumstance and treat you with compassion while seeking the best possible outcome for you and your loved ones. 

The attorneys at The Orlando Law Group represent businesses in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Can I use Steamboat Willie in my Marketing?

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Right before the New Year, the New York Times wrote an extensive article about Mickey Mouse and how the copyright for the historic Steamboat Willie will most likely expire at the end of 2023.

When that happens, the Steamboat Willie version of Mickey Mouse will become public domain, meaning anyone can use that version of the cartoon character and the film without paying any licensing fees.

Of course, nothing is settled in stone. The last time this issue came up, the Walt Disney Company worked with Congress to extend copyright protections by 20 years.

Most businesses cannot just convince Congress to change the rules on copyrights. So, this is a great case to watch as this issue unfolds. It is a good way to understand how people can and cannot use your logo, your graphics, your mascot, your company name.

And it is a great reminder to check with The Orlando Law Group for a review of all your intellectual property has the right protections to keep your brand pure.

The Orlando Law Group can help entrepreneurs and business owners in in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Sanford, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida with all their intellectual property issues, along with any other general business issues.

Let us give a quick overview of intellectual property protections.

First, it is critical to understand the differences between the different types of intellectual property protections. They are often confused with each other, even though all of them can be critical for your long-term success.

For a more detailed look at the difference between trademark and copyright, please review this article we shared a few years ago.

A copyright protects first use of art

Maybe you wrote a jingle for your business or commissioned a painting of your restaurant. Maybe you created a cartoon character mascot. Those are all covered by copyright laws. They are original art and cannot be used by a third-party for profit.

When it is produced, there is a copyright applied, but you must register the copyright with the federal government for The Orlando Law Group to fight to receive any protection from the courts.

A patent protects an invention

If your company has developed the next big thing, you will need to file for a patent. This protects your product, your chemical reaction, your advancement on the widget and much more.  To receive a patent, you will need to show that your invention is “new, unique and usable.”

A trademark protects your brand

Here is where you protect your name and your logo, your company colors and more. The goal with this type of protection is to avoid confusion by consumers and eliminate companies basically calling themselves the same name.

One of the difficulties with trademarks is there are two types of trademarks: word marks and design marks. The word mark protects your name. The design mark protects your logo. Both can be essential.

What do I need to do to protect my brand?

There are a couple of things you can do to protect your brand, especially when you are first starting your business. One of the things we do for any new business is do a search for trademarks, especially when naming restaurants.

The United States Patent and Trademark Office makes a basic search relatively simple through the TESS database. Performing an individual search can give you basic information, but it is still critical to have an attorney review the results. After all, there are 35-word marks for “Mickey Mouse.” Not all will apply to you and there may be an opportunity for you to use your dream name, even if it appears in TESS.

Of course, if your name is already trademarked in your industry, do not use it. Chances are, you will have to rename your business down the road.

Once you have applied, it is important to aggressively defend your protection. Often times, a simple demand letter can stop the possible infringement. Sometimes you will need to file a lawsuit for protection.

The key here is that you are showing others – especially future courts – this is your brand and you will protect it. The longer you allow others to use your brand, the easier it is for that person to claim it is in the public interest.

You do not want that to happen!

That is why you see so many companies being very active in protecting their trademarks. Just look up “trademark lawsuit” by just about any company and you will find multiple news reports of lawsuits.

Of course, this also means that if you want to get close to an established trademark, you are going to be prepared for a fight. Here is an example of where Apple sued just about anyone who tried to file a trademark using an apple. In fact, they filed objections to 215 trademark filings that were close to the logo of the iPhone.

They are counting on people not fighting back.

But that is what The Orlando Law Group is here for. We will fight to protect your company’s intellectual property, from filing for protection and to protect your brand.

And if you want to use Steamboat Willie in your 2024 marketing campaign within the legal format, we will fight for your right to do just that!

If you are looking to protect your intellectual property in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Sanford, Lake Nona, St. Cloud, or Kissimmee, we are here to help you with a full team of attorneys who care about you and your business and will work for the best possible outcome.

If you would like to schedule a consultation for a business issue like the ones described earlier, this information is in case you ever find yourself or a loved one needing to use it.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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